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Bitcoin Trends in the First Half of 2015

146 points by ntomaino 11y ago

ceallen 11y ago
No mention of the 'stress test' that's brought the network to its knees the past few days, or of the soft fork that resulted in suggestions to wait for 30+ confirmations? Puff piece. C'mon Coinbase, at least spin them into a '<X> is actually good for Bitcoin, because <Y>' format.
- bendykstra 11y ago
  Those events seem outside the scope of an article that is about multi-year trends.
- bduerst 11y ago
  For those who don't know, the stress test was where a company tested what would happen if someone filled the network with transactions. The results were not favorable for bitcoin and highlights key design problems -> some transactions cost $280/transaction to put through, and other transactions that had <$20 fees were not processed and stuck in limbo.
  - theseatoms 11y ago
    Are there plans for a second stress test? It probably doesn't make sense to run it again until we have reason to expect different results. Other than increased block-size, is there something that could improve these results? More full nodes?
    - tylersmith 11y ago
      More full nodes would not solve the problem. Raising the maximum block size is the only real solution, although paying $0.02 per transaction instead of $0.01 until the "attackers" stop isn't such a bad thing. Especially compared to potential downsides to raising the maximum block size.
  - mths 11y ago
    > The results were not favorable for bitcoin and highlights key design problems Some would disagree, considering the system kept functioning exactly as intended under the circumstances imposed on it. Personally I agree that the whole thing is troubling, but was anything really discovered here? Considering that the price has been rising, if you believe in prediction markets, these design problems could likely be overcome. After all, people have been working on it since long before any of these stress tests were performed.
    - dogecoinbase 11y ago
      Some would disagree, considering the system kept functioning exactly as intended under the circumstances imposed on it. Yes, hence the GP stating, very clearly, that the results "[highlighted] key design problems". The results of the stress test were not surprising to anyone who's been paying close attention, but it was a valuable demonstration that Bitcoin is it currently operates is misarchitected and will require some fundamental redesigns in order to operate at scale. These problems have been under discussion since at least 2011 and have been constantly disregarded, so perhaps this will help. It seems unlikely.
  - petertodd 11y ago
    Huh? $280/tx? Maybe some people paid fees that high by mistake, but no-one had too. Equally $20/tx fees are still ludicrously high by about three orders of magnitude. Bitcoin miners prioritize transactions from highest fee to lowest; the attackers never sent transactions with more than 0.2mBTC/KB fees, which works out to about $0.01/tx. In other words, if you paid more than about $0.01 in fees, your transaction was unaffected by the flood. The problem was a lot of badly written Bitcoin wallets don't let their users set fees at all, nor do they let you resend transactions stuck due to low fees. This is an easily solved problem, and fortunately we're seeing wallet authors fixing it. This should have happened years ago... but a lot of people are heavily invested into the idea that Bitcoin transactions are "free", which just isn't true... You may find my writeup on the flood useful reading: https://gist.github.com/petertodd/8e87c782bdf342ef18fb https://gist.github.com/petertodd/8e87c782bdf342ef18fb
  - williamcotton 11y ago
    On the contrary, the network worked as expected. A somewhat costly stress test resulting in a backlog of transactions that were prioritized by fee, just as predicted. The backlog has since been drastically reduced and high priority fees are back in the 50,000 satoshi per kb range [0]... the average Bitcoin transaction is about 250 bytes, so 12,000 satoshi per transaction, or roughly 3 cents. Low priority transactions of < 1 cent are still somewhat easily confirmed [1]. Even during the stress test I saw high priority fees hovering around the 85,000 satoshi/byte range, and never in the 1,000,000+ satoshi/byte range that you're talking about. What's impressive is that the price [2] of Bitcoin was completely unaffected by a bit of weather [3] on the network and in fact gained in value during the entire ordeal. Public data storage like the ledger maintained by the Bitcoin blockchain has a definite cost and it makes sense that prices would rise as demand increased. The blockchain is a scarce resource. It might make sense for transactions fees to end up around the price of a postage stamp at some point. It's hard to predict how this economic system will continue to evolve. What's most important is that the ledger continues to be maintained, eventually consistent, secured by lots of hashing power, 100% verifiable and has an open and equal access to read and write as it ever did. Not every transaction between two parties needs to be recorded on the blockchain. The blockchain is for clearing and settlement. Between lightning networks [4], private federated offchain networks for batch transactions, and possibly public sidechains (if they every materialize), there's a number of approaches that can help facilitate micropayments and other situations that require very low fees. [0] https://api.blockcypher.com/v1/btc/main https://api.blockcypher.com/v1/btc/main [1] https://blockchain.info/tx/417d1c3ada3744910503d58b4640705312e16a2a4f152d1be2561a54a7aec6ef https://blockchain.info/tx/417d1c3ada3744910503d58b464070531... [2] https://blockchain.info/charts/market-price?timespan=30days&showDataPoints=false&daysAverageString=1&show_header=true&scale=0&address= https://blockchain.info/charts/market-price?timespan=30days&... [3] https://blockchain.info/charts/n-transactions?timespan=30days&showDataPoints=false&daysAverageString=1&show_header=true&scale=0&address= https://blockchain.info/charts/n-transactions?timespan=30day... [4] http://rusty.ozlabs.org/?p=477 http://rusty.ozlabs.org/?p=477
  - xirdstl 11y ago
    Interesting. How many transactions were needed to 'fill' the network?
  - CyberDildonics 11y ago
    First, it didn't highlight design problems, only very inefficient prioritizing from clients. Second, those numbers are ridiculous.
  - essofluffy 11y ago
    I remember paying about 2 cents in fees for a transaction and having it go through within the next two blocks during this stress test.
  - herendin 11y ago
    >some transactions cost $280/transaction to put through The stress 'test', (or was it really an attack?), is interesting, though it may be too recent to be included. But where did you get that $280 from? That figure sounds ridiculous. Can you give the source?
contingencies 11y ago
Trends as I see them: decreased media interest, loss of trust in the Bitcoin Foundation and by extension the core development team, lots more government surveillance of related businesses (helped by a stabilization of centralized exchanges), still virtually no banks globally willing to work with Bitcoin-related companies, failure to achieve any real 'killer app' at scale: beyond tax or forex-restriction evasion or international drug distribution. On the plus side, scope creep seems to have slowed, more people are aware of the overall concept, and Merkle trees have begun to be applied experimentally to additional problem domains. PS. Reading between the lines, new user growth has slowed dramatically at Coinbase. IIRC they sent an email this week begging for referrals, offering $25/signup. And like all startups, it probably defines users as people who once gave them their email address, rather than actual regular users of some nontrivial part of the service. "A trillion wallets!" indeed. PPS. What percentage of increased Bitcoin transactions are due to the use of automated gambling sites for Bitcoin-trail erasure type money laundering through numerous microtransactions?
- joeyspn 11y ago
  While what you say is true, there are also increasing good vibes because of news like this one... http://www.businessinsider.com/bnp-paribas-bitcoin-blockchain-securities-firms-redundant-2015-7 http://www.businessinsider.com/bnp-paribas-bitcoin-blockchai... These are the kind of "news" and media attention that matter. The big guys are starting to bet heavily on the technology.
  - davidgerard 11y ago
    That report is literally "one analyst mentioned it in passing in some report".
- petertodd 11y ago
  > loss of trust in the Bitcoin Foundation and by extension the core development team Note that the supermajority of members of the core development team have never received funding from the Bitcoin Foundation.
xasos 11y ago
> 47% of Coinbase users are now from countries outside the US I wonder what the country breakdown estimation is for all Bitcoin transactions. I would guess more international use than Coinbase numbers
vdnkh 11y ago
Wow, the first graph in this article looks exactly like the graph of the bubble phenomenon (http://i.imgur.com/Amon5PR.jpg http://i.imgur.com/Amon5PR.jpg). I guess stability will increase, which is a good thing.
- koonsolo 11y ago
  Great graph, haven't seen this before. Although according to that graph, bitcoin hasn't reached 'despair' yet :(.
  - ewillbefull 11y ago
    I believe that in all of bitcoin's major bubbles, it has never crashed below the previous bubble's high.
    - drcode 11y ago
      That was only true until January 2015, when the price dropped to 152.4, well below the previous bubble's high.
      - ubersync 11y ago
        That was just a flash crash. It has stayed well about 200 the past 6 months.
  - sgt101 11y ago
    When all the greek and chinese people who have jumped in (see the transaction spike in the article) in the last two months discover that no one will buy their coins then we will see the trough. I have to say though, I genuinely did not see the switch out of the recent past coming - good luck to the folks who did, and commiserations to the folk switching in ...
    - davidgerard 11y ago
      >When all the greek I saw a lot of wishful thinking about Greek buyers, but what was the evidence of actual Greek buyers?
slg 11y ago
>As global events that highlight the restrictions of closed banking systems and insecure data security practices (e.g. the Greece debt crisis and recent United States Office of Personnel Management data breach) continue to occur, we believe that bitcoin is likely to be adopted by more people looking for digital money that is global, secure, and inclusive. How would Bitcoin have prevented or mitigated the OPM hack?
- mikeash 11y ago
  It's possible that one could use the data leaked in the OPM hack to hijack someone's bank account. I imagine a lot, maybe all, of the verification info a bank would ask for in order to do a password reset would be in those files for many people. The link is a bit of a stretch, though.
- ntomaino 11y ago
  Bitcoin couldn't have prevented the OPM attack, but these types of attacks will continue to highlight the flawed way that institutions store data online. I suggest reading this post: http://blog.onename.com/americans-hacked-opm/ http://blog.onename.com/americans-hacked-opm/ TLDR; The blockchain offers a more secure database that allows institutions to stop storing massive amounts of user data on centralized servers.
minimaxir 11y ago
I'm calling statistical shenanigans. While the data presented is likely correct, the narrative is completely misleading. > While the price is down 9% YTD (as of July 13), it's up over 213% over a two year time frame. So they are ignoring the price drop from $1,000? > This has attracted more institutional investors to the market and volatility has decreased as a result. Chart indicates a gradual decrease, it's hard to establish causality. Also, it ignores the fact that 50% volatility for a currency is absurd. > As of June 30, there were 6,109 Github repositories referencing Bitcoin. By comparison, there were 2,352 Github repositories referencing Stripe and 2,318 repositories referencing Paypal. Comparing a currency with a currency processor is blatantly comparing Apples and Oranges. How many GitHub repositories are there mentioning Coinbase?
- philrapo 11y ago
  If institutional investors were responsible for the decrease in volatility, I'd think we would've seen a corresponding increase in liquidity. (It's the additional liquidity and depth of market that they presumably would provide that dampen the price swings). I haven't run the data recently, but anecdotally I don't think liquidity has improved much. The most liquid/highest volume period was still the run to $1000.
- zapdrive 11y ago
  > How many GitHub repositories are there mentioning Coinbase? Conversely, how many GitHup repositories are there mentioning USD or GBP. Oh wait, you can not transact USDs online without a payment processor. So what would be a better way to compare? By comparing all the fiat payment processor mentions against Bitcoin and Bitcoin payment processors. Which is kind of what they are doing here.
- ytdht 11y ago
  makes sense from a Coinbase's perspective to present facts like this, I guess...
  - 02 11y ago
    The alternative is to admit the ship is slowly sinking.
Ologn 11y ago
91 year old billionaire Charlie Munger has referred to Bitcoin as "rat poison". His friend, 84 year old Warren Buffett has said Bitcoin is "not a currency" and advised people to "stay away from it". Now you can ascribe this to them being old fuddy duddies who "just don't get it". You can also ascribe this to the wisdom of people who lived through the Great Depression, World War II etc. and have seen every scam and snake oil pitch under the sun. Which is exactly what Bitcoins are. They are worthless, they have no value. They're not only a scam, they're a scam that should be obvious on the face of it, like subprime real estate, or a Pets.com IPO. People talk about a Silicon Valley bubble - nothing is more indicative of a bubble than Bitcoins. These guys may not know the specifics of blockchain algorithms, but from decades of hard experience they can distinguish value from non-value, and Bitcoins have no value. I can't think of a commodity it makes less sense to hold onto than a Bitcoin. Gold has value, as do other precious metals, oil has value - Bitcoins have no value. The only comparison I've seen made to Bitcoins is fiat money, but it would take too long to fully explain why Bitcoins don't have the value of a US dollar in a post here. I was warning people of this scam here when Bitcoin was over $460 ( https://news.ycombinator.com/item?id=6753545 https://news.ycombinator.com/item?id=6753545 ). It has since fallen to $290. It will be falling to $0. For some laughs, read http://bitcoin.org/en/faq#why-do-bitcoins-have-value http://bitcoin.org/en/faq#why-do-bitcoins-have-value - "Bitcoins have value because they are useful as a form of money. Bitcoin has the characteristics of money (durability, portability, fungibility, scarcity, divisibility, and recognizability) based on the properties of mathematics rather than relying on physical properties (like gold and silver) or trust in central authorities (like fiat currencies)." What? Commodities which already have value(!) become currencies because they have "durability, portability, fungibility, scarcity, divisibility, and recognizability". Gold has all of those properties so it has made a good currency through history - but even if it had none of those properties, it derives its value from it being a commodity with useful physical traits - like the ability to fill a tooth, or conduct electricity, and so forth. Bitcoins have no such traits - they have the traits which would make a commodity with value a good currency, but it has no inherit value as a commodity! Witness all the angels and VC's who sing the high holy praises of this scam. Are they just complete fools who have no understanding of the economics they claim to have expertise in, or are they just scammers trying to fleece suckers out there? I don't know the answer to this, but at the end of the day, all the VC's and seeders and angels on Twitter etc. who support this Bitcoin scam are either fools or thieves. Keynes said markets can remain irrational longer than he could remain solvent, but it's inevitable that Bitcoins price will go to $0. Since my first statement of this here, Bitcoin has gone from $460 to its present $290. It will inevitably go to $0, no matter how many of the scammers downvote this post so people won't see it. Because no matter what anyone says, the market cap of the $5 trillion worth of gold mined will never change more than an order of magnitude (barring some amazing chemical technological advance). Whereas lack of doubt is all that is keeping Bitcoin's $4 billion market cap from going to $0. From it's scammy beginnings (the anonymous "Satoshi"), to all the legal problems and scams of Mt. Gox, Butterfly Labs etc., it's only a matter of time before this Ponzi scheme comes to an end. More instructive than that is all the existing VC's, seeders, angels etc. who are vocal in their support of this scam - that's what you should really remember.
deadmik3 11y ago
I believe this is what's referred to as the "pump"
Animats 11y ago
The main trend for Bitcoin in 2015 is that not much happened. The price is within 10% of where it was at the beginning of the year. Transaction volume in dollars is flat, or down a little. Many of the companies which were accepting Bitcoin no longer are; those that are report low transaction volumes. (There are lots of merchants which "accept Bitcoin" because it's an option in some shopping cart programs, but those just send the Bitcoins to Coinbase, which converts them to dollars and sends the funds to the merchant.) The big trends in Bitcoin seem to be: - Amateur hour is over. The remaining exchanges are bigger and seemingly more stable, although none of them are up to bank-level yet. New York's Bitcoin regulation seems to have been accepted. - Mining is more centralized than ever. Most of the big Bitcoin miners are in cold areas of China with cheap power. China has well over 50% of the hash rate now. This may just be a way to convert yuan to dollars. (China has currency controls, but encourages exports. For a few months, it was legal in China to buy Bitcoins with yuan through regular payment channels, then sell the Bitcoins outside China for dollars. That drove the $1000 Bitcoin bubble, and was shut down by the People's Bank of China last year, causing the Bitcoin crash. Mining Bitcoin in China, and selling it outside China, is considered "exporting" and is a legal way to convert yuan to dollars.) - Since the shutdown of Silk Road I and Silk Road II and the related arrests, Bitcoin is no longer considered a safe way to buy drugs. This doesn't seem to have affected the price much one way or the other. - Bitcoin ATMs are disappearing. In the SF bay area, Hacker Dojo and Workshop Cafe got rid of theirs, and Nakamoto's doesn't have theirs working. Hero City (a co-working space) may still have one. History of Bitcoin: 2013: Wow! 2014: Aargh! 2015: Meh.
- drcode 11y ago
  2013: "Decentralized money is amazing- Let me build a business around it!" 2014: "Hmmm... I just built a centralized business around Bitcoin, so now my customers have the same counterparty risks as before... why was I excited about Bitcoin again?" 2015: ??? 2016: Profit (If someone figures out the entry for 2015, please let me know what it is...)
  - danbruc 11y ago
    2016: Reward-Drop
sanswork 11y ago
I notice they are still pushing out the number of wallets and accounts they have as a sign of anything. Coinbase you are now a few years old and have raised over $100m. It's time to leave behind local social networks, and underused sites everywhere and start reporting MAU. No one but fanatics care how many people have signed up. How many people regularly use your service.
OceanPowers 11y ago
keep dreamin' libertardian fanbois!
jhanschoo 11y ago
I really doubt that most people see Bitcoin's features as pluses rather than minuses. I have always thought that the financial institutions we have in mainstream currencies are institutions that societies want. If ever Bitcoin goes mainstream, the Bitcoin economy would end up a lot like the world economy when it was gold-backed, albeit one where the transaction costs were not physical but hidden in the work done in blockchains. It seems to me like people are mistakenly thinking that Bitcoin's lack of financial institutions are a property inherent to the currency rather than the simple fact that Bitcoin is a currency that is not mature enough to have actors sufficiently invested in it to want to create regulatory institutions on top of the currency. Correct me if I'm wrong, but it seems to me easier to regulate Bitcoins than say, gold. It is far easier to trace and verify the provenance of Bitcoins than that of gold, and hence far easier to classify Bitcoins into "clean Bitcoins" and "dirty Bitcoins". A cabal of influential institutions can simply refuse to deal with wallets and businesses that deal in "dirty Bitcoins", and that can serve as a basis of institutional regulation of Bitcoin as a currency.

146 points by ntomaino 11y ago

No mention of the 'stress test' that's brought the network to its knees the past few days, or of the soft fork that resulted in suggestions to wait for 30+ confirmations? Puff piece. C'mon Coinbase, at least spin them into a '<X> is actually good for Bitcoin, because <Y>' format.

bendykstra 11y ago
Those events seem outside the scope of an article that is about multi-year trends.
bduerst 11y ago
For those who don't know, the stress test was where a company tested what would happen if someone filled the network with transactions. The results were not favorable for bitcoin and highlights key design problems -> some transactions cost $280/transaction to put through, and other transactions that had <$20 fees were not processed and stuck in limbo.
- theseatoms 11y ago
  Are there plans for a second stress test? It probably doesn't make sense to run it again until we have reason to expect different results. Other than increased block-size, is there something that could improve these results? More full nodes?
  - tylersmith 11y ago
    More full nodes would not solve the problem. Raising the maximum block size is the only real solution, although paying $0.02 per transaction instead of $0.01 until the "attackers" stop isn't such a bad thing. Especially compared to potential downsides to raising the maximum block size.
- mths 11y ago
  > The results were not favorable for bitcoin and highlights key design problems Some would disagree, considering the system kept functioning exactly as intended under the circumstances imposed on it. Personally I agree that the whole thing is troubling, but was anything really discovered here? Considering that the price has been rising, if you believe in prediction markets, these design problems could likely be overcome. After all, people have been working on it since long before any of these stress tests were performed.
  - dogecoinbase 11y ago
    Some would disagree, considering the system kept functioning exactly as intended under the circumstances imposed on it. Yes, hence the GP stating, very clearly, that the results "[highlighted] key design problems". The results of the stress test were not surprising to anyone who's been paying close attention, but it was a valuable demonstration that Bitcoin is it currently operates is misarchitected and will require some fundamental redesigns in order to operate at scale. These problems have been under discussion since at least 2011 and have been constantly disregarded, so perhaps this will help. It seems unlikely.
- petertodd 11y ago
  Huh? $280/tx? Maybe some people paid fees that high by mistake, but no-one had too. Equally $20/tx fees are still ludicrously high by about three orders of magnitude. Bitcoin miners prioritize transactions from highest fee to lowest; the attackers never sent transactions with more than 0.2mBTC/KB fees, which works out to about $0.01/tx. In other words, if you paid more than about $0.01 in fees, your transaction was unaffected by the flood. The problem was a lot of badly written Bitcoin wallets don't let their users set fees at all, nor do they let you resend transactions stuck due to low fees. This is an easily solved problem, and fortunately we're seeing wallet authors fixing it. This should have happened years ago... but a lot of people are heavily invested into the idea that Bitcoin transactions are "free", which just isn't true... You may find my writeup on the flood useful reading: https://gist.github.com/petertodd/8e87c782bdf342ef18fb https://gist.github.com/petertodd/8e87c782bdf342ef18fb
- williamcotton 11y ago
  On the contrary, the network worked as expected. A somewhat costly stress test resulting in a backlog of transactions that were prioritized by fee, just as predicted. The backlog has since been drastically reduced and high priority fees are back in the 50,000 satoshi per kb range [0]... the average Bitcoin transaction is about 250 bytes, so 12,000 satoshi per transaction, or roughly 3 cents. Low priority transactions of < 1 cent are still somewhat easily confirmed [1]. Even during the stress test I saw high priority fees hovering around the 85,000 satoshi/byte range, and never in the 1,000,000+ satoshi/byte range that you're talking about. What's impressive is that the price [2] of Bitcoin was completely unaffected by a bit of weather [3] on the network and in fact gained in value during the entire ordeal. Public data storage like the ledger maintained by the Bitcoin blockchain has a definite cost and it makes sense that prices would rise as demand increased. The blockchain is a scarce resource. It might make sense for transactions fees to end up around the price of a postage stamp at some point. It's hard to predict how this economic system will continue to evolve. What's most important is that the ledger continues to be maintained, eventually consistent, secured by lots of hashing power, 100% verifiable and has an open and equal access to read and write as it ever did. Not every transaction between two parties needs to be recorded on the blockchain. The blockchain is for clearing and settlement. Between lightning networks [4], private federated offchain networks for batch transactions, and possibly public sidechains (if they every materialize), there's a number of approaches that can help facilitate micropayments and other situations that require very low fees. [0] https://api.blockcypher.com/v1/btc/main https://api.blockcypher.com/v1/btc/main [1] https://blockchain.info/tx/417d1c3ada3744910503d58b4640705312e16a2a4f152d1be2561a54a7aec6ef https://blockchain.info/tx/417d1c3ada3744910503d58b464070531... [2] https://blockchain.info/charts/market-price?timespan=30days&showDataPoints=false&daysAverageString=1&show_header=true&scale=0&address= https://blockchain.info/charts/market-price?timespan=30days&... [3] https://blockchain.info/charts/n-transactions?timespan=30days&showDataPoints=false&daysAverageString=1&show_header=true&scale=0&address= https://blockchain.info/charts/n-transactions?timespan=30day... [4] http://rusty.ozlabs.org/?p=477 http://rusty.ozlabs.org/?p=477
- xirdstl 11y ago
  Interesting. How many transactions were needed to 'fill' the network?
- CyberDildonics 11y ago
  First, it didn't highlight design problems, only very inefficient prioritizing from clients. Second, those numbers are ridiculous.
- essofluffy 11y ago
  I remember paying about 2 cents in fees for a transaction and having it go through within the next two blocks during this stress test.
- herendin 11y ago
  >some transactions cost $280/transaction to put through The stress 'test', (or was it really an attack?), is interesting, though it may be too recent to be included. But where did you get that $280 from? That figure sounds ridiculous. Can you give the source?

contingencies 11y ago

Trends as I see them: decreased media interest, loss of trust in the Bitcoin Foundation and by extension the core development team, lots more government surveillance of related businesses (helped by a stabilization of centralized exchanges), still virtually no banks globally willing to work with Bitcoin-related companies, failure to achieve any real 'killer app' at scale: beyond tax or forex-restriction evasion or international drug distribution. On the plus side, scope creep seems to have slowed, more people are aware of the overall concept, and Merkle trees have begun to be applied experimentally to additional problem domains. PS. Reading between the lines, new user growth has slowed dramatically at Coinbase. IIRC they sent an email this week begging for referrals, offering $25/signup. And like all startups, it probably defines users as people who once gave them their email address, rather than actual regular users of some nontrivial part of the service. "A trillion wallets!" indeed. PPS. What percentage of increased Bitcoin transactions are due to the use of automated gambling sites for Bitcoin-trail erasure type money laundering through numerous microtransactions?

joeyspn 11y ago
While what you say is true, there are also increasing good vibes because of news like this one... http://www.businessinsider.com/bnp-paribas-bitcoin-blockchain-securities-firms-redundant-2015-7 http://www.businessinsider.com/bnp-paribas-bitcoin-blockchai... These are the kind of "news" and media attention that matter. The big guys are starting to bet heavily on the technology.
- davidgerard 11y ago
  That report is literally "one analyst mentioned it in passing in some report".
petertodd 11y ago
> loss of trust in the Bitcoin Foundation and by extension the core development team Note that the supermajority of members of the core development team have never received funding from the Bitcoin Foundation.

xasos 11y ago

> 47% of Coinbase users are now from countries outside the US I wonder what the country breakdown estimation is for all Bitcoin transactions. I would guess more international use than Coinbase numbers

vdnkh 11y ago

Wow, the first graph in this article looks exactly like the graph of the bubble phenomenon (http://i.imgur.com/Amon5PR.jpg http://i.imgur.com/Amon5PR.jpg). I guess stability will increase, which is a good thing.

koonsolo 11y ago
Great graph, haven't seen this before. Although according to that graph, bitcoin hasn't reached 'despair' yet :(.
- ewillbefull 11y ago
  I believe that in all of bitcoin's major bubbles, it has never crashed below the previous bubble's high.
  - drcode 11y ago
    That was only true until January 2015, when the price dropped to 152.4, well below the previous bubble's high.
    - ubersync 11y ago
      That was just a flash crash. It has stayed well about 200 the past 6 months.
- sgt101 11y ago
  When all the greek and chinese people who have jumped in (see the transaction spike in the article) in the last two months discover that no one will buy their coins then we will see the trough. I have to say though, I genuinely did not see the switch out of the recent past coming - good luck to the folks who did, and commiserations to the folk switching in ...
  - davidgerard 11y ago
    >When all the greek I saw a lot of wishful thinking about Greek buyers, but what was the evidence of actual Greek buyers?

slg 11y ago

>As global events that highlight the restrictions of closed banking systems and insecure data security practices (e.g. the Greece debt crisis and recent United States Office of Personnel Management data breach) continue to occur, we believe that bitcoin is likely to be adopted by more people looking for digital money that is global, secure, and inclusive. How would Bitcoin have prevented or mitigated the OPM hack?

mikeash 11y ago
It's possible that one could use the data leaked in the OPM hack to hijack someone's bank account. I imagine a lot, maybe all, of the verification info a bank would ask for in order to do a password reset would be in those files for many people. The link is a bit of a stretch, though.
ntomaino 11y ago
Bitcoin couldn't have prevented the OPM attack, but these types of attacks will continue to highlight the flawed way that institutions store data online. I suggest reading this post: http://blog.onename.com/americans-hacked-opm/ http://blog.onename.com/americans-hacked-opm/ TLDR; The blockchain offers a more secure database that allows institutions to stop storing massive amounts of user data on centralized servers.

minimaxir 11y ago

I'm calling statistical shenanigans. While the data presented is likely correct, the narrative is completely misleading. > While the price is down 9% YTD (as of July 13), it's up over 213% over a two year time frame. So they are ignoring the price drop from $1,000? > This has attracted more institutional investors to the market and volatility has decreased as a result. Chart indicates a gradual decrease, it's hard to establish causality. Also, it ignores the fact that 50% volatility for a currency is absurd. > As of June 30, there were 6,109 Github repositories referencing Bitcoin. By comparison, there were 2,352 Github repositories referencing Stripe and 2,318 repositories referencing Paypal. Comparing a currency with a currency processor is blatantly comparing Apples and Oranges. How many GitHub repositories are there mentioning Coinbase?

philrapo 11y ago
If institutional investors were responsible for the decrease in volatility, I'd think we would've seen a corresponding increase in liquidity. (It's the additional liquidity and depth of market that they presumably would provide that dampen the price swings). I haven't run the data recently, but anecdotally I don't think liquidity has improved much. The most liquid/highest volume period was still the run to $1000.
zapdrive 11y ago
> How many GitHub repositories are there mentioning Coinbase? Conversely, how many GitHup repositories are there mentioning USD or GBP. Oh wait, you can not transact USDs online without a payment processor. So what would be a better way to compare? By comparing all the fiat payment processor mentions against Bitcoin and Bitcoin payment processors. Which is kind of what they are doing here.
ytdht 11y ago
makes sense from a Coinbase's perspective to present facts like this, I guess...
- 02 11y ago
  The alternative is to admit the ship is slowly sinking.

Ologn 11y ago

91 year old billionaire Charlie Munger has referred to Bitcoin as "rat poison". His friend, 84 year old Warren Buffett has said Bitcoin is "not a currency" and advised people to "stay away from it". Now you can ascribe this to them being old fuddy duddies who "just don't get it". You can also ascribe this to the wisdom of people who lived through the Great Depression, World War II etc. and have seen every scam and snake oil pitch under the sun. Which is exactly what Bitcoins are. They are worthless, they have no value. They're not only a scam, they're a scam that should be obvious on the face of it, like subprime real estate, or a Pets.com IPO. People talk about a Silicon Valley bubble - nothing is more indicative of a bubble than Bitcoins. These guys may not know the specifics of blockchain algorithms, but from decades of hard experience they can distinguish value from non-value, and Bitcoins have no value. I can't think of a commodity it makes less sense to hold onto than a Bitcoin. Gold has value, as do other precious metals, oil has value - Bitcoins have no value. The only comparison I've seen made to Bitcoins is fiat money, but it would take too long to fully explain why Bitcoins don't have the value of a US dollar in a post here. I was warning people of this scam here when Bitcoin was over $460 ( https://news.ycombinator.com/item?id=6753545 https://news.ycombinator.com/item?id=6753545 ). It has since fallen to $290. It will be falling to $0. For some laughs, read http://bitcoin.org/en/faq#why-do-bitcoins-have-value http://bitcoin.org/en/faq#why-do-bitcoins-have-value - "Bitcoins have value because they are useful as a form of money. Bitcoin has the characteristics of money (durability, portability, fungibility, scarcity, divisibility, and recognizability) based on the properties of mathematics rather than relying on physical properties (like gold and silver) or trust in central authorities (like fiat currencies)." What? Commodities which already have value(!) become currencies because they have "durability, portability, fungibility, scarcity, divisibility, and recognizability". Gold has all of those properties so it has made a good currency through history - but even if it had none of those properties, it derives its value from it being a commodity with useful physical traits - like the ability to fill a tooth, or conduct electricity, and so forth. Bitcoins have no such traits - they have the traits which would make a commodity with value a good currency, but it has no inherit value as a commodity! Witness all the angels and VC's who sing the high holy praises of this scam. Are they just complete fools who have no understanding of the economics they claim to have expertise in, or are they just scammers trying to fleece suckers out there? I don't know the answer to this, but at the end of the day, all the VC's and seeders and angels on Twitter etc. who support this Bitcoin scam are either fools or thieves. Keynes said markets can remain irrational longer than he could remain solvent, but it's inevitable that Bitcoins price will go to $0. Since my first statement of this here, Bitcoin has gone from $460 to its present $290. It will inevitably go to $0, no matter how many of the scammers downvote this post so people won't see it. Because no matter what anyone says, the market cap of the $5 trillion worth of gold mined will never change more than an order of magnitude (barring some amazing chemical technological advance). Whereas lack of doubt is all that is keeping Bitcoin's $4 billion market cap from going to $0. From it's scammy beginnings (the anonymous "Satoshi"), to all the legal problems and scams of Mt. Gox, Butterfly Labs etc., it's only a matter of time before this Ponzi scheme comes to an end. More instructive than that is all the existing VC's, seeders, angels etc. who are vocal in their support of this scam - that's what you should really remember.

deadmik3 11y ago

I believe this is what's referred to as the "pump"

Animats 11y ago

The main trend for Bitcoin in 2015 is that not much happened. The price is within 10% of where it was at the beginning of the year. Transaction volume in dollars is flat, or down a little. Many of the companies which were accepting Bitcoin no longer are; those that are report low transaction volumes. (There are lots of merchants which "accept Bitcoin" because it's an option in some shopping cart programs, but those just send the Bitcoins to Coinbase, which converts them to dollars and sends the funds to the merchant.) The big trends in Bitcoin seem to be: - Amateur hour is over. The remaining exchanges are bigger and seemingly more stable, although none of them are up to bank-level yet. New York's Bitcoin regulation seems to have been accepted. - Mining is more centralized than ever. Most of the big Bitcoin miners are in cold areas of China with cheap power. China has well over 50% of the hash rate now. This may just be a way to convert yuan to dollars. (China has currency controls, but encourages exports. For a few months, it was legal in China to buy Bitcoins with yuan through regular payment channels, then sell the Bitcoins outside China for dollars. That drove the $1000 Bitcoin bubble, and was shut down by the People's Bank of China last year, causing the Bitcoin crash. Mining Bitcoin in China, and selling it outside China, is considered "exporting" and is a legal way to convert yuan to dollars.) - Since the shutdown of Silk Road I and Silk Road II and the related arrests, Bitcoin is no longer considered a safe way to buy drugs. This doesn't seem to have affected the price much one way or the other. - Bitcoin ATMs are disappearing. In the SF bay area, Hacker Dojo and Workshop Cafe got rid of theirs, and Nakamoto's doesn't have theirs working. Hero City (a co-working space) may still have one. History of Bitcoin: 2013: Wow! 2014: Aargh! 2015: Meh.

drcode 11y ago
2013: "Decentralized money is amazing- Let me build a business around it!" 2014: "Hmmm... I just built a centralized business around Bitcoin, so now my customers have the same counterparty risks as before... why was I excited about Bitcoin again?" 2015: ??? 2016: Profit (If someone figures out the entry for 2015, please let me know what it is...)
- danbruc 11y ago
  2016: Reward-Drop

sanswork 11y ago

I notice they are still pushing out the number of wallets and accounts they have as a sign of anything. Coinbase you are now a few years old and have raised over $100m. It's time to leave behind local social networks, and underused sites everywhere and start reporting MAU. No one but fanatics care how many people have signed up. How many people regularly use your service.

OceanPowers 11y ago

keep dreamin' libertardian fanbois!

jhanschoo 11y ago

I really doubt that most people see Bitcoin's features as pluses rather than minuses. I have always thought that the financial institutions we have in mainstream currencies are institutions that societies want. If ever Bitcoin goes mainstream, the Bitcoin economy would end up a lot like the world economy when it was gold-backed, albeit one where the transaction costs were not physical but hidden in the work done in blockchains. It seems to me like people are mistakenly thinking that Bitcoin's lack of financial institutions are a property inherent to the currency rather than the simple fact that Bitcoin is a currency that is not mature enough to have actors sufficiently invested in it to want to create regulatory institutions on top of the currency. Correct me if I'm wrong, but it seems to me easier to regulate Bitcoins than say, gold. It is far easier to trace and verify the provenance of Bitcoins than that of gold, and hence far easier to classify Bitcoins into "clean Bitcoins" and "dirty Bitcoins". A cabal of influential institutions can simply refuse to deal with wallets and businesses that deal in "dirty Bitcoins", and that can serve as a basis of institutional regulation of Bitcoin as a currency.