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The forefront of the Bitcoin frenzy isn't even on the blockchain, it's at the exchanges. Hardcore tech people and those who don't (or can't) trust institutions

The forefront of the Bitcoin frenzy isn't even on the blockchain, it's at the exchanges. Hardcore tech people and those who don't (or can't) trust institutions with their Bitcoin will pay the transaction fees to get their money out of exchanges and into their own wallet. The average retail investor, however, doesn't want to be their own bank. They just want in on the price action, while letting the exchange manage their money. Does anyone really think the person buying crypto $100 at a time in their Robinhood account wants to pay $18 (current average transaction fee) every time they want to move that BTC into their wallet? Of course not, which is one reason why Robinhood doesn't even have an option to withdraw Bitcoin. As with any frenzy, the misinformation being circulated by people who want everyone to buy Bitcoin is getting out of control. How many average people buy Bitcoin because they think Bitcoin is the only way to avoid losing purchasing power? Meanwhile, everyone else has been protecting against inflation by purchasing stocks, real estate, or virtually any other investment long before Bitcoin was even invented. (Yes, I'm aware of the 21 million maximum BTC cap). The current Bitcoin narratives are more like a religion than reality. That said, Tesla's Bitcoin purchase does make a lot of sense. Elon Musk went on Twitter and called Bitcoin "BS" to drive the price down so they could buy at a discount. They then announced their Bitcoin purchase with fanfare that drove the price up, marking a quick return on their investment. They used Elon's influence to make a quick profit on the frenzy.

dheera 6y ago
> Elon Musk went on Twitter and called Bitcoin "BS" to drive the price down so they could buy at a discount. They then announced their Bitcoin purchase with fanfare that drove the price up, marking a quick return on their investment. They used Elon's influence to make a quick profit on the frenzy. I don't see an inherent problem with this. People who were too gullible to believe influencer crap and caused bitcoin's price to go down by panic selling are now gone from the market, and the believers stayed in and made money. That's a good thing, and weeds out gullible people from the system. This isn't the stock market where fundamentals matter.
- n4r9 6y ago
  Did people really disappear from the market, or did they temporarily refuse to buy above a certain price?
- viraptor 6y ago
  > People who were too gullible to believe influencer crap and caused bitcoin's price to go down are now gone from the market That's a part of the crowd. Another part is in for speculation and sold on negative message then bought in the dip. We don't know the proportions. The first part could be close to 0.
- PragmaticPulp 6y ago
  > I don't see an inherent problem with this. People who were too gullible to believe influencer crap and caused bitcoin's price to go down by panic selling are now gone from the market, and the believers stayed in and made money. That's a good thing, and weeds out gullible people from the system. So when the price goes down due to influencers, people are dumb for selling. But when the price goes up due to the very same influencers, people are smart for buying? > This isn't the stock market where fundamentals matter. Amen to that.
  - deleted 6y ago
    [deleted]
  - dheera 6y ago
    > But when the price goes up due to the very same influencers, people are smart for buying? The way I see it, Bitcoin is all about hype and modelling hype, so if you can correctly model a particular influencer's effect on a bunch of sheep, I think it's fine to reward that modelling prowess. As for the sheep themselves, they might win or lose, it's a coin toss, but at the end of the day, they're just sheep.
bogomipz 6y ago
>"Does anyone really think the person buying crypto $100 at a time in their Robinhood account wants to pay $18 (current average transaction fee) every time they want to move that BTC into their wallet?" I'm curious is this the transaction per $100 or is $18 a flat fee regardless of transfer amount?
- nacs 6y ago
  It's per transaction regardless of amount. So a $20 transaction also has a $18 transaction fee.
- trident5000 6y ago
  The average transaction fee is a bit disingenuous. Many people are not even using segwit and thats on them. You can also use lightning at this point in time but people dont know how to do it and wallets have not implemented yet. High fees usually prod people and services to adapt to the current tech to get costs down. I expect this to happen soon as high fees are somewhat recent. Also you can send a 50 cent tx fee and it will make it through but not be the fastest. One other thing - you cant even move BTC in or out of Robinhood. Robinhood for crypto is a complete scam right now.
  - SamPatt 6y ago
    Transaction fees are high regardless of using Segwit or not and the Lightning Network is not widely adopted or user friendly at all.
    - trident5000 6y ago
      This response is just insignificant and ignores everything I said. Segwit adoption is at 50% and again, as I said in my comment, Lightning will be further adopted over time for people who want lower fees. The options are here its up to people and services to use them. And they will as their customers get angry.
      - stale2002 6y ago
lph 6y ago
> That said, Tesla's Bitcoin purchase does make a lot of sense ... They then announced their Bitcoin purchase with fanfare that drove the price up, marking a quick return on their investment. Tesla is a car manufacturer! It doesn't make any sense at all! At any company that made sense, a CEO would lose his job for gambling $1B of company money in a casino totally unrelated to the company's business interests.
- toyg 6y ago
  Well, it’s not completely unrelated: bitcoin drives energy consumption, which in turn drives demand for batteries of all shapes, which are a massive part of Tesla’s business plan.
  - unnouinceput 6y ago
    Again with the energy point. The energy is insignificant compared with almost anything else. Wasn't some article that the sum of all standby electronics uses more energy than bitcoin and that's only in US? What are you, Apple? That gives no charger for "environmental reasons" while packaging its wireless headphones in a crapload of unnecessary plastics. If you are so energy consciousness then go bark at US military, those are the biggest polluters and energy hungry of the world.
    - nkohari 6y ago
      The energy required to provide standby power for every electronic device in the United States is a tremendous amount of electricity.
    - tsimionescu 6y ago
      Bitcoin consumes more electricity than entire countries - more than the Czech Republic for example. It consumes a third (or was it a fifth?) of all the electricity of all data centers in the world. It is by no means insignificant.
      - whoanow 6y ago
peteretep 6y ago
“I'm aware of the 21 million maximum BTC cap” Better thought of as a configuration value set by people with most of the mining power, which last time I checked was PRC
- bitexploder 6y ago
  Tinker with that by force of mining power and you will destabilize the currency. Maybe they want that, but it would probably end the currency if it was done by force.
  - dleslie 6y ago
    I'd not call it stable as it is now.
    - bitexploder 6y ago
      It’s stable in the technology sense. The price... who knows :)
  - peteretep 6y ago
    > it would probably end the currency if it was done by force Sounds like you’re saying Bitcoin only has value because the PRC allows it to?
    - bitexploder 6y ago
      I think it’s more they changes are generally done with some form of consensus. Trying to make a change by flexing your muscle as the biggest holder of mining power could have unpredictable and counterproductive results. I think mostly it would just cause more miners to be brought online though. I basically don’t think you can change Bitcoin this way, and if you could it would more or less change it a lot. I think invested institutions would not let that happen.
    - noch 6y ago
      > Sounds like you’re saying Bitcoin only has value because the PRC allows it to? Please learn how the Nakamoto Consensus works and how nodes protect the Bitcoin network while miners are slaves to the network. There's a rich history of this being tested by adversaries. https://news.ycombinator.com/item?id=26089898 https://news.ycombinator.com/item?id=26089898
banachtarski 6y ago
https://news.bitcoin.com/reddit-post-reporting-teslas-bitcoin-purchase-from-a-month-ago-was-a-hoax/ https://news.bitcoin.com/reddit-post-reporting-teslas-bitcoi... Title: Reddit Post Reporting Tesla's Bitcoin Purchase From a Month Ago Was a Hoax Reportedly, the person claiming to be a Tesla insider with intel on the bitcoin purchase was actually some political science major college student tripping on acid. Crazy how so many people ate this story up.
- blueblisters 6y ago
  The post itself was a prank but the purchase is very real. It was self-reported by Tesla I believe.
  - lugorrr 6y ago
    It was reported, yes. See page 23 here. [1] [1] https://www.sec.gov/Archives/edgar/data/1318605/000156459021004599/tsla-10k_20201231.htm https://www.sec.gov/Archives/edgar/data/1318605/000156459021...
- frankenst1 6y ago
  Tesla's SEC filing (https://www.sec.gov/ix?doc=/Archives/edgar/data/1318605/000156459021004599/tsla-10k_20201231.htm https://www.sec.gov/ix?doc=/Archives/edgar/data/1318605/0001...): > Thereafter, we invested an aggregate $1.50 billion in bitcoin under this policy and may acquire and hold digital assets from time to time or long-term. Moreover, we expect to begin accepting bitcoin as a form of payment for our products in the near future, subject to applicable laws and initially on a limited basis, which we may or may not liquidate upon receipt.
ardy42 6y ago
> That said, Tesla's Bitcoin purchase does make a lot of sense. Elon Musk went on Twitter and called Bitcoin "BS" to drive the price down so they could buy at a discount. They then announced their Bitcoin purchase with fanfare that drove the price up, marking a quick return on their investment. They used Elon's influence to make a quick profit on the frenzy. Is that even legal? It sounds like pumping and dumping.
- imtringued 6y ago
  It's technically not pumping and dumping because Elon posts memes that shill his investments but he rarely gives a call to action and if possible avoids naming the cryptocurrency in question. He's definitively manipulating the market in the sense of the colloquial meaning of the word. If there are public signals that predict the performance of a stock then those who benefit the most are those who execute their trades as quickly as possible and since Elon knows what he is going to "announce" on his Twitter account he is going to benefit massively.
  - lugorrr 6y ago
    he rarely gives a call to action and if possible avoids naming the cryptocurrency in question He has put the term "bitcoin" in his twitter bio.
- TeeWEE 6y ago
  Its bitcoin, there is no legal framework.
varispeed 6y ago
I am pretty sure you don't own Bitcoin if it is not in your own wallet regardless of what T&C may be saying. They can always find a way to snatch your coins under any made up reason. They cannot do that if you have all the keys.

dheera 6y ago

> Elon Musk went on Twitter and called Bitcoin "BS" to drive the price down so they could buy at a discount. They then announced their Bitcoin purchase with fanfare that drove the price up, marking a quick return on their investment. They used Elon's influence to make a quick profit on the frenzy. I don't see an inherent problem with this. People who were too gullible to believe influencer crap and caused bitcoin's price to go down by panic selling are now gone from the market, and the believers stayed in and made money. That's a good thing, and weeds out gullible people from the system. This isn't the stock market where fundamentals matter.

n4r9 6y ago
Did people really disappear from the market, or did they temporarily refuse to buy above a certain price?
viraptor 6y ago
> People who were too gullible to believe influencer crap and caused bitcoin's price to go down are now gone from the market That's a part of the crowd. Another part is in for speculation and sold on negative message then bought in the dip. We don't know the proportions. The first part could be close to 0.
PragmaticPulp 6y ago
> I don't see an inherent problem with this. People who were too gullible to believe influencer crap and caused bitcoin's price to go down by panic selling are now gone from the market, and the believers stayed in and made money. That's a good thing, and weeds out gullible people from the system. So when the price goes down due to influencers, people are dumb for selling. But when the price goes up due to the very same influencers, people are smart for buying? > This isn't the stock market where fundamentals matter. Amen to that.
- deleted 6y ago
  [deleted]
- dheera 6y ago
  > But when the price goes up due to the very same influencers, people are smart for buying? The way I see it, Bitcoin is all about hype and modelling hype, so if you can correctly model a particular influencer's effect on a bunch of sheep, I think it's fine to reward that modelling prowess. As for the sheep themselves, they might win or lose, it's a coin toss, but at the end of the day, they're just sheep.

bogomipz 6y ago

>"Does anyone really think the person buying crypto $100 at a time in their Robinhood account wants to pay $18 (current average transaction fee) every time they want to move that BTC into their wallet?" I'm curious is this the transaction per $100 or is $18 a flat fee regardless of transfer amount?

nacs 6y ago
It's per transaction regardless of amount. So a $20 transaction also has a $18 transaction fee.
trident5000 6y ago
The average transaction fee is a bit disingenuous. Many people are not even using segwit and thats on them. You can also use lightning at this point in time but people dont know how to do it and wallets have not implemented yet. High fees usually prod people and services to adapt to the current tech to get costs down. I expect this to happen soon as high fees are somewhat recent. Also you can send a 50 cent tx fee and it will make it through but not be the fastest. One other thing - you cant even move BTC in or out of Robinhood. Robinhood for crypto is a complete scam right now.
- SamPatt 6y ago
  Transaction fees are high regardless of using Segwit or not and the Lightning Network is not widely adopted or user friendly at all.
  - trident5000 6y ago
    This response is just insignificant and ignores everything I said. Segwit adoption is at 50% and again, as I said in my comment, Lightning will be further adopted over time for people who want lower fees. The options are here its up to people and services to use them. And they will as their customers get angry.
    - stale2002 6y ago

lph 6y ago

> That said, Tesla's Bitcoin purchase does make a lot of sense ... They then announced their Bitcoin purchase with fanfare that drove the price up, marking a quick return on their investment. Tesla is a car manufacturer! It doesn't make any sense at all! At any company that made sense, a CEO would lose his job for gambling $1B of company money in a casino totally unrelated to the company's business interests.

toyg 6y ago
Well, it’s not completely unrelated: bitcoin drives energy consumption, which in turn drives demand for batteries of all shapes, which are a massive part of Tesla’s business plan.
- unnouinceput 6y ago
  Again with the energy point. The energy is insignificant compared with almost anything else. Wasn't some article that the sum of all standby electronics uses more energy than bitcoin and that's only in US? What are you, Apple? That gives no charger for "environmental reasons" while packaging its wireless headphones in a crapload of unnecessary plastics. If you are so energy consciousness then go bark at US military, those are the biggest polluters and energy hungry of the world.
  - nkohari 6y ago
    The energy required to provide standby power for every electronic device in the United States is a tremendous amount of electricity.
  - tsimionescu 6y ago
    Bitcoin consumes more electricity than entire countries - more than the Czech Republic for example. It consumes a third (or was it a fifth?) of all the electricity of all data centers in the world. It is by no means insignificant.
    - whoanow 6y ago

peteretep 6y ago

“I'm aware of the 21 million maximum BTC cap” Better thought of as a configuration value set by people with most of the mining power, which last time I checked was PRC

bitexploder 6y ago
Tinker with that by force of mining power and you will destabilize the currency. Maybe they want that, but it would probably end the currency if it was done by force.
- dleslie 6y ago
  I'd not call it stable as it is now.
  - bitexploder 6y ago
    It’s stable in the technology sense. The price... who knows :)
- peteretep 6y ago
  > it would probably end the currency if it was done by force Sounds like you’re saying Bitcoin only has value because the PRC allows it to?
  - bitexploder 6y ago
    I think it’s more they changes are generally done with some form of consensus. Trying to make a change by flexing your muscle as the biggest holder of mining power could have unpredictable and counterproductive results. I think mostly it would just cause more miners to be brought online though. I basically don’t think you can change Bitcoin this way, and if you could it would more or less change it a lot. I think invested institutions would not let that happen.
  - noch 6y ago
    > Sounds like you’re saying Bitcoin only has value because the PRC allows it to? Please learn how the Nakamoto Consensus works and how nodes protect the Bitcoin network while miners are slaves to the network. There's a rich history of this being tested by adversaries. https://news.ycombinator.com/item?id=26089898 https://news.ycombinator.com/item?id=26089898

banachtarski 6y ago

https://news.bitcoin.com/reddit-post-reporting-teslas-bitcoin-purchase-from-a-month-ago-was-a-hoax/ https://news.bitcoin.com/reddit-post-reporting-teslas-bitcoi... Title: Reddit Post Reporting Tesla's Bitcoin Purchase From a Month Ago Was a Hoax Reportedly, the person claiming to be a Tesla insider with intel on the bitcoin purchase was actually some political science major college student tripping on acid. Crazy how so many people ate this story up.

blueblisters 6y ago
The post itself was a prank but the purchase is very real. It was self-reported by Tesla I believe.
- lugorrr 6y ago
  It was reported, yes. See page 23 here. [1] [1] https://www.sec.gov/Archives/edgar/data/1318605/000156459021004599/tsla-10k_20201231.htm https://www.sec.gov/Archives/edgar/data/1318605/000156459021...
frankenst1 6y ago
Tesla's SEC filing (https://www.sec.gov/ix?doc=/Archives/edgar/data/1318605/000156459021004599/tsla-10k_20201231.htm https://www.sec.gov/ix?doc=/Archives/edgar/data/1318605/0001...): > Thereafter, we invested an aggregate $1.50 billion in bitcoin under this policy and may acquire and hold digital assets from time to time or long-term. Moreover, we expect to begin accepting bitcoin as a form of payment for our products in the near future, subject to applicable laws and initially on a limited basis, which we may or may not liquidate upon receipt.

ardy42 6y ago

> That said, Tesla's Bitcoin purchase does make a lot of sense. Elon Musk went on Twitter and called Bitcoin "BS" to drive the price down so they could buy at a discount. They then announced their Bitcoin purchase with fanfare that drove the price up, marking a quick return on their investment. They used Elon's influence to make a quick profit on the frenzy. Is that even legal? It sounds like pumping and dumping.

imtringued 6y ago
It's technically not pumping and dumping because Elon posts memes that shill his investments but he rarely gives a call to action and if possible avoids naming the cryptocurrency in question. He's definitively manipulating the market in the sense of the colloquial meaning of the word. If there are public signals that predict the performance of a stock then those who benefit the most are those who execute their trades as quickly as possible and since Elon knows what he is going to "announce" on his Twitter account he is going to benefit massively.
- lugorrr 6y ago
  he rarely gives a call to action and if possible avoids naming the cryptocurrency in question He has put the term "bitcoin" in his twitter bio.
TeeWEE 6y ago
Its bitcoin, there is no legal framework.

varispeed 6y ago

I am pretty sure you don't own Bitcoin if it is not in your own wallet regardless of what T&C may be saying. They can always find a way to snatch your coins under any made up reason. They cannot do that if you have all the keys.