The biggest U.S. stock exchange operators are taking steps to embrace bitcoin...

[TampaAnimusVortex]

The future and digital currency is coming rather you like it or not...

http://www.bloomberg.com/news/articles/2015-03-24/bitcoin-getting-serious-as-nasdaq-nyse-step-into-digital-craze

(Bloomberg) -- The biggest U.S. stock exchange operators are taking steps to embrace bitcoin, spurring speculation the digital currency is coming up from underground.

Nasdaq OMX Group Inc. revealed Tuesday that New York-based Noble Markets, a platform for trading bitcoin, has agreed to license Nasdaq’s X-stream technology. Noble is adopting the same software used by securities exchanges around the world, and a related system runs the Nasdaq Stock Market, one of the biggest equity exchanges. The news follows the New York Stock Exchange’s January agreement to invest in Coinbase, another platform for trading the digital currency.

and for those of you who said it would die (so many times before...) see below.

http://bitcoinobituaries.com/

[zappaman]

1. It's how I get my heroin!

No more going to shady street corners for me!

[Egnever]

2. Would be stupid not to

The wild swings in value would make it a great opportunity for investment schemes.

[TampaAnimusVortex]

10. The wild swings should settle out eventually.

It roaring up to 1200 and down to 200 only happened during the birth pangs initially. It's still wilder than normal currencies, but thats primarily due to its low market cap of 3 or 4 billion in value total. Wait until its 300 or 400 billion, then the forces that stabilize regular currencies will kick in. That, and as the market develops some of the more mature products, like derivatives.

[Egnever]

11. Maybe

It has a long way to go though this is pretty nuts.

http://bitcoincharts.com/charts/bitstampUSD#rg60ztgSzm1g10zm2g25zv

Google stock price by comparison.

https://www.google.com/search?q=goog&oq=goog&aqs=chrome..69i57j69i60j0l3j69i60.3657j0j4&sourceid=chrome&es_sm=122&ie=UTF-8

[TampaAnimusVortex]

16. It does have a ways to do for sure...

But again, that’s the difference in volatility between a 3-4 billion market cap and Google's 400 billion.

Moving a billion into or out of Bitcoin would create HUGE swings... It would barely be a blip for Google.

[arcane1]

3. How does one make money by trading it?

[TampaAnimusVortex]

5. Buy low and sell high

That's about it! Currently it can swing fairly dramatically, but that should slow over time as market cap builds.

[arcane1]

12. Like a currency exchange? I buy it in dollars and cash out later?

[TampaAnimusVortex]

13. Pretty much

Check out circle.com - Its VERY easy to buy and trade.

[randome]

22. I other words, it's just like REAL money except...

...um, well, maybe someone can explain why Bitcoin is different?

And if it's no different, then what's the point?
[hr][font color="blue"][center]TECT in the name of the Representative approves of this post.[/center][/font][hr]

[TampaAnimusVortex]

23. It's not controlled by anyone...

And it's because of that there is the possibility that one day it will make war obsolete...

[closeupready]

6. Buy low, sell high. There's also what's known by the fancy term, arbitrage -

finding inefficiencies between markets, and profiting from it.

[Gidney N Cloyd]

4. Somehow this bunch embracing bitcoin still doesn't make me feel more secure about it.

[TampaAnimusVortex]

7. "This bunch" ultimately means 401ks and you.

Everyone will end up owning a piece of this eventually.

[stevenleser]

9. Just like with mortgage backed securities. We know. nt

[TampaAnimusVortex]

14. Well, there's use and misuse for sure.

Just the fact something is a derivative doesn’t automatically make it evil. One has to look at all the variables. The aspect of derivatives "insuring against price movements" is exactly what Bitcoin needs to smooth out its volatility. Now sinking your entire retirement savings into it would be a fool's game indeed!

http://en.wikipedia.org/wiki/Derivative_%28finance%29

In finance, a derivative is a contract that derives its value from the performance of an underlying entity. This underlying entity can be an asset, index, or interest rate, and is often called the "underlying".[1][2] Derivatives can be used for a number of purposes, including insuring against price movements (hedging), increasing exposure to price movements for speculation or getting access to otherwise hard-to-trade assets or markets.

[A HERETIC I AM]

15. Out of curiosity......

Of the people you know who have mortgages, how many do not make regular payments?

[stevenleser]

17. I'm in NYC, so the number of folks I know who have mortgages is low. Most rent.

And the folks who own in NYC generally have an extremely high net worth or income stream so I am not sure that is a good indicator.

I would say around 19 of 20 folks I know make their mortgages. One is in foreclosure.

[A HERETIC I AM]

19. Then my followup is this;

What is wrong with "Mortgage Backed Securities"?

[stevenleser]

20. Really? You're asking me that? nt

[A HERETIC I AM]

21. Yes I am, as someone who understands exactly what one is....

I am asking you why it is you think a security backed by a stream of income that, in only YOUR tiny knowledge base, has roughly a 5% default rate. The St. Louis Fed reports the national average to have been at 6.63% in Q4 of 2014 and trending down;

https://research.stlouisfed.org/fred2/series/DRSFRMACBS

I'll just cut to the chase here, OK Steve?

The fact is, the vast majority of Americans who have mortgages pay them on time every month and the mortgage itself is, on average paid off in 15 years.

This creates an INCREDIBLY reliable income stream and as such, up until the time these securities started getting assembled with worthless mortgages, i.e. those sold to people with no hope of paying, they were considered as safe as US Treasury bonds.

The vast majority of troublesome tranches have been weeded out of the system by now.

Not to mention that a security backed by mortgages should be of absolutely no concern to anyone who has never bought one.

I have seen this sentiment repeatedly over the last couple years on DU, and it is clear that many - I have no idea if that includes you - have no real idea what one of these securities actually is or how they are structured.

[TampaAnimusVortex]

29. A thoughtful post!

Regardless of your impression of Bitcoin, I must say you have a good understanding of derivatives it seems. Most people hear single words like "Bitcoin", or "Derivative" and run screaming in terror at something so obviously evil!

[A HERETIC I AM]

30. That is very kind of you to say, but FWIW, a Mortgage Backed Security is not a "derivative"

Last edited Thu Mar 26, 2015, 02:55 AM - Edit history (1)

They are Bonds, and that was what I was responding to on the esteemed Mr. Leser's post.

As far as my impression of Bitcoin is concerned, it is just another currency medium as far as I can see, and as such, it will succeed or fail on it's merits and/or it's usefulness.

But your point is well taken. The troubles of the last recession have left many on this board with talking points that feel good to say, or look good in text, but it is clear to anyone with any experience in the securities industry that often they have no idea what they are talking about, much less exactly what it is they are afraid of.

The threads about Chelsea Clintons husband being a Hedge Fund principal (THE HORROR!) illustrate this perfectly.

Again, for what it's worth, the simplest and most common derivative is an option contract - a Put or Call. Most people are at least familiar with the terms. Some deriviatives can be much more complex of course.

Some of the best investment advice I ever heard was "Never invest in anything you can not easily explain to an eight year old."

For the purposes of full disclosure, I do have experience in the securities industry, although 6 years have passed since I last traded.

[TampaAnimusVortex]

35. Sounds like good investment advice!

But I could easily explain Bitcoin to an 8 year old.

It's simply a distributed ledger, like recording transactions on a piece of paper and you give 50 people copies - then you agree on a method to make sure all the copies stay identical. That's really all Bitcoin is... All the guttural emotional reactions I see from people when you even mention the name to me is quite alien. I have to assume they really don't understand it for the most part, because who could be against a distributed ledger? It's like being against hammers.

Now being against the volatility of it makes some sense. Some people don't have the risk tolerance for it, but say that... Not "It's a ponzi scheme!" or "It's a plot by the libertarians!".

I personally think our digital world just begs for digital money, but that's my perspective. I know people that want to go back and use gold coins and others that want things to remain just as they are. To each his own I guess.

[A HERETIC I AM]

38. An enormous amount of money already is digital.

I can use dollars to buy Yen and then buy English Pound Sterling, use that to buy Gold and then back to dollars, all of it via computerized accounts and never seeing a single banknote or farthing of metal.

[Gidney N Cloyd]

18. I think you meant 'end up HOLDING a piece.'

[stevenleser]

8. You beat me to it. Over the last 40 years the investment banking industry has engaged in

a lot of crazy and some would argue criminal endeavors.

[Yorktown]

24. It's madness

The stock market is already overvalued,
the dollar will lose its reference currency status in one or two decades
and markets want to financiarize a toy currency?

Gee, looks like some people want to play "Lehman Brothers, the sequel'..

[FSogol]

25. Did you read your own article? They are selling software to bitcoin exchanges.

That is hardly taking steps to embrace it.



I once sold an old Plymouth Fury to a cop. That didn't make me a cop.

[TampaAnimusVortex]

27. What part of my post was in error?

I simply copied what the article said... but if your looking for more proof it's coming:

New York Stock Exchange and Former Citigroup CEO Invest in Coinbase
http://insidebitcoins.com/news/winklevoss-bitcoin-etf-still-on-track-in-addition-to-gemini-exchange/29373

Winklevoss: Bitcoin ETF Still On Track, in Addition to Gemini Exchange
http://insidebitcoins.com/news/winklevoss-bitcoin-etf-still-on-track-in-addition-to-gemini-exchange/29373

So do you have anything else? Or are you one of those who predicted its death (see http://bitcoinobituaries.com/)

[PowerToThePeople]

26. yawn, another op on ponzi scheme.

[TampaAnimusVortex]

28. You really have no clue do you?

http://www.ted.com/conversations/23415/bitcoin_is_not_a_ponzi_scheme.html

[PowerToThePeople]

31. yawn

it is a ponzi scheme, as is the stock market, as is any "buy low, sell high" investment.

Your goal in all of these is to not be the one left holding the bag when the thing collapses.

[A HERETIC I AM]

32. For your edification;

http://en.m.wikipedia.org/wiki/Ponzi_scheme

By your definition, home ownership is a Ponzi Scheme.

[PowerToThePeople]

33. it certainly can be

and was within the last decade.

[TampaAnimusVortex]

34. So now you are against people owning houses...

At least you admit it though. So your position is that you don’t support anything that might lose value.

Good luck getting through life without any risks there bucko. Feel free to put your savings in that savings account drawing .01% interest and have inflation eat you alive.

Also without risk, youll be renting of course, so no chance to build capital there.
Youll be leasing cars of course instead of buying.

Seems like a silly way to go through life honestly - trying to avoid all risks. Most normal people understand there is a balance to it all.

[PowerToThePeople]

43. most normal people

Would rather not be swindled. The problem is, most people are trusting of others and it puts them at a great disadvantage when the show is run by swindlers.

[TampaAnimusVortex]

44. And who exactly is the swindler here?

There is no "master overlord" for bitcoin... You really need to understand what the word "decentralized" means. No one is in charge, get it? Your free to download and look at the code yourself. Everything is transparent. Nothing is hidden.

At best, there might be some big spenders trying to pump and dump, but as market cap grows - their ability to affect the market goes away.

Your just overly paranoid about something you just don’t understand. It's new and strange. I get it.

[CreekDog]

45. so you pay taxes on your bitcoin income, correct?

[NCTraveler]

36. The investor class sees beneficial opportunity in bitcoin.

Those who dream of a centralized world governing unit also find positives in it. It is more of a volatile investment vehicle at the moment. The investor class has reasons for wanting to be the ones to fully control money. I don't get why people simply think it is the future. Nothing has shown that yet.

[TampaAnimusVortex]

37. Then you dont understand the underlying technology.

It (the blockchain) works off a decentralized consensus system/database. This technology has everything to do with the future in tons of applications. Bitcoin is just the first application to use this technology. Wait until Ethereum or Zerocash goes live - then youll REALLY some some interesting things start to roll.

[NCTraveler]

39. The article I am replying to backs up my claim.

Completely. My assertion was pretty basic and is directly related to what you posted. Not sure what you take issue with. Are you saying the investor class is opposed to bitcoin? Are you saying the goal isn't for a single currency? I think I understand just fine.

Bitcoin investors love telling others how it is great. Just like everything was going just fine at ENRON and everyone would make money from them. It was everyone else's lack of knowledge. I think it is time for the bitcoin fans to start realizing it is no longer what it was once touted as and is now seen by the investor class as a method for a quick buck. Day trading with my milk money and saying it is great due to decentralization doesn't make me feel to good about my future vitamin D intake.

[TampaAnimusVortex]

40. The investor class?

You mean every person in the country that owns a 401k or bonds? Sounds like you have a boatload of assumed luggage there.

As for the goal of a single currency... which currency exactly doesn't have that as a goal.

My statement was that you don't understand the technology itself and it's future applications - and so far I'm still seeing that you don't. Google "blockchain" and come back when you read a bit.

[NCTraveler]

41. You know what I mean when I say investor class.

It is not as you outlined. That part of your response is dishonest.
Might want to read your op again. It supports my claim completely. It is spelled out in black and white in your op.

[CreekDog]

46. are you selling or in some way marketing bitcoins here?

most of your posts mention bitcoin and many of the posts have the same wording or phrases, as if they are marketing pitches or slogans.

http://www.democraticunderground.com/?com=view_post&forum=1002&pid=5137521

[CreekDog]

42. another day, another bitcoin post

[Blue_Tires]

47. Because the traders recognizes a hustle when they see one?

And they want a piece of the action?

[TampaAnimusVortex]

49. Exactly what is the hustle and who is the mastermind?

Why is a distributed ledger a hustle again?

[Blue_Tires]

50. The mastermind? Not sure...

Who's been looting all those bitcoin exchanges? Has anybody ever been caught and brought to justice?

[TampaAnimusVortex]

51. In one of the larger ones (Mnt Gox) - it was determine it was an inside job.

If your suggesting the creator could build in a "back door", then you dont understand the technology. Bitcoin is a protocol standard, not a program. You cant "hack" the protocol HTTP or FTP. It's the difference between hacking an engine manual and the engine itself. There are 50 million different Bitcoin programs, all following the protocol rules.

Bitcoin is simply a distributed ledger, just like if you wrote a list of transactions on paper and shared it with your friends, then you all came up with a set of rules that would ensure updates to any ledger would also update all the other copies. It's a consensus system. Thats all. If you think that's "nefarious", then I don't know what to tell you.

[Blue_Tires]

53. So what protection do I have if some "insider" steals it all?

Because there have been a few high-profile incidents since Mt.Gox...

[TampaAnimusVortex]

55. Security is one thing that has been improving in the Bitcoin realm.

The latest addition to the technology is multi-signature keys. If you had $1000 worth of Bitcoin, you could arrange it such that one would need multiple keys to access it instead of just 1 key (password). The following arrangements are possible.

-You keep 2 keys, and an online web hosting services keeps 1. 2 of the keys are needed to access the funds (Bitgo.com model).
-"Majority rule" keys... 3 out 5, 5 out of 9, etc... (Good for a company where multiple signers are needed)

Yes, if there is only 1 key, its MUCH easier to hack an account, but with multiple keys, it's practically impossible.

In my case, I use the 2 out of 3 keys with Bitgo. I have one key printed on paper in my vault. 1 key on my computer. If my computer gets hacked, they would also have to hack the company Bitgo OR come to my house and raid my personal safe and get that peice of paper.

[CreekDog]

56. are you selling or marketing bitcoins or trades in bitcoins?

you have been amazingly consistent in your posts about bitcoins.

[TampaAnimusVortex]

57. Not really.

I have a stash I plan on holding until I retire, but mainly I like debunking the craziness and irrationality around it and the blockchain technology. I'm just as excited over Ethereum and Zerocash because of their inventive use of the blockchain as well.

I suggest looking over this:

http://www.slideshare.net/lablogga/blockchain-the-information-technology-of-the-future

Just for example - slide 22 there. Wrap your head around the implications of this...
"Fully autonomous business entity"
"Autonomous property: example self-owned, self-driving car"

Blockchain tech can do away with just about all "trusted 3rd parties" eventually - and just about everything we do involves trusted 3rd parties. This means it's world changing tech.

The applications are about endless. See below.

[CreekDog]

59. you seemed to get super quiet right after I asked you if you were selling bitcoins here

[TampaAnimusVortex]

60. I responded to your post

as well as pretty much everyone else's on this thread. That's not enough?

[CreekDog]

61. and after this post on bitcoins, you didn't post for a week

only to return today with what? a post on bitcoin.

http://www.democraticunderground.com/?com=view_post&forum=1002&pid=6445654

[closeupready]

48. I'm not a currency trader or anything, but the value in bitcoins for most end-users is

probably the liquidity of the thing - buy bitcoins in your favored currency, do your thing, buy back your favored currency with any bitcoins left.

Some of these purchases are strictly illegal, some aren't, but the salient point is that it helps grease transactions without interference from banking authorities, unlike hard currency transactions or transactions conducted with bank cards.

[TampaAnimusVortex]

54. If you were from a country with capital controls, and wanted to get your wealth out...

Then indeed, Bitcoin would be perfect. Those poor Greeks who had their accounts robbed by the World Bank, and was trying to pull out their money so they could get it out of the country know the value of avoiding capital controls.

It all comes down to this. Do you want absolute control over your wealth or are you wanting to give your keys to some trusted 3rd party?

[customerserviceguy]

52. Wall Street's been selling fairy-dust 'securities' for decades

Wherever there's a buck to be made off of suckers, they'll try to outsmart the amateurs.

[uncle ray]

58. do they accept bitcoin as payment?