How a Whale Crashed Bitcoin To Sub-$7,000 Overnight (newsbtc.com) 228
CaptainDork shares a report from NewsBTC: Bitcoin lost billions of dollars worth of valuation within a 30-minutes timeframe as a Chinese cryptocurrency scammer allegedly liquidated its steal via over-the-counter markets. The initial sell-off by PlusToken caused a domino effect, causing mass liquidations. PlusToken, a fraud scheme that duped investors of more than $2 billion, dumped huge bitcoin stockpiles from its anonymous accounts, according to Chainalysis. The New York-based blockchain consultancy cited an internal investigation that showed PlusToken scammers on a systematic crypto liquidation spree. Some of them have been actively selling bitcoin since June -- right after the cryptocurrency established a year-to-date high of circa $14,000. According to Chainalysis, PlusToken had cashed out at least $185 million worth of bitcoin via OTC desks. "We can say that those cashouts increased volatility in Bitcoin's price and that they correlate significantly with Bitcoin price drops," says Chainalysis.
"Chainalysis's study shows that the entity still holds a massive stash of bitcoin that it might liquidate at a later stage," adds NewsBTC. "That raises the prospects of more price crashes unless there is an adequate demand to match the scammer's supply flow."
"Chainalysis's study shows that the entity still holds a massive stash of bitcoin that it might liquidate at a later stage," adds NewsBTC. "That raises the prospects of more price crashes unless there is an adequate demand to match the scammer's supply flow."
Demand is increasing exponentially (Score:2, Insightful)
That raises the prospects of more price crashes unless there is an adequate demand to match the scammer's supply flow.,
Yes of course.
But even if from no other source, the demand for Bitcoin will continue to grow, as business and government systems all show signs that over time they are becoming less - not more - secure.
Therefore many more outages from hackers are inevitable, as is the following payment - via BitCoin - from those targets....
That on top of valid traffic flow, and people moving to use BitCoin
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Re:Demand is increasing exponentially (Score:5, Insightful)
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If the supermarket accepts it, it has use.
Just saw an article that claims IGA supermarkets now accept bitcoin. I was at the local IGA this afternoon, and they said they don't accept it. Much as i'd like to believe that website, the supermarket doesn't.
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Just saw an article that claims IGA supermarkets now accept bitcoin. I was at the local IGA this afternoon, and they said they don't accept it. Much as i'd like to believe that website, the supermarket doesn't.
IGA is an advertising association, not a chain. Marketing is the only thing that IGA stores have in common.
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If the supermarket accepts it, it has use.
Just saw an article that claims IGA supermarkets now accept bitcoin. I was at the local IGA this afternoon, and they said they don't accept it. Much as i'd like to believe that website, the supermarket doesn't.
If you accept bitcoin for everyday transactions, you have to accept the risk that it will quickly lose half or more of it's value at any given time. I'd be pretty skittish doing that in a low markup business like selling groceries.
That is bullshit (Score:2)
If you accept bitcoin for everyday transactions, you have to accept the risk that it will quickly lose half or more of it's value at any given time.
Here in reality land, Bitcoin usually changes by just a few percent every day, if that (up 1.55% for today).
But overall, it's performed pretty well [ccn.com] in 2019... Even with this drop.
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Here in reality land, Bitcoin
Wait, your "reality land" is thinking that money is safe because volatility is often low? And "this year?" And you expect business owners to see things that way?
That's... that's... dude, that's so fucking stupid I can't even imagine it being possible to explain it to you! Like, wowsers. You've said some stupid things before, but this is something that gets into the, "wait, how does he remember to breath?" territory.
Re:Demand is increasing exponentially (Score:5, Informative)
Bitcoin sure has its uses, but its properties make in highly impractical for most consumer transactions: BC is so volatile to both directions that accepting payments in it is super risky. Essentially any store accepting it has to exchange their BC to dollars/euros almost immediately, because holding significant sums of bitcoin in the books puts you in deep currency risk, and increases costs because you get added transaction fees. It's the reason why Steam stopped accepting BC as payment a few years back.
It's the exact same reason why most stores will not accept a foreign currency. That too has uses and value, but hassling around with the exchange rates is not worth it for most supermarket -level operators.
High volatility may in some instances be a lucrative thing for investors, but it's never something you want for a currency.
Re: Demand is increasing exponentially (Score:2)
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Credit cards are not a currency, except maybe on a few onion sites.
Re:Demand is increasing exponentially (Score:5, Informative)
Also, you can actually use the US dollar for official transactions in many, many countries. Hell, some countries even use it instead of having their own currency, like Zimbabwe and El Salvador. Even among countries that produce their own currency, the US dollar may be preferred or even required for official transactions. It's the world's largest reserve currency, by a huge margin. Something like 60% of foreign currency holdings are in US dollars. I think the next closest is the Euro at ~25%.
A separate (but frequently overlapping) set of countries is that where merchants happily accept dollars. Checking the exchange rate in those countries is like checking the weather; it's just a daily fact of life. Everybody knows it, and whether it's going up or down. That's basically every country that has tourism as a major industry, as well as most third world countries. Even in Russia, which is neither third world nor a particularly hot tourist destination, dollars are highly desirable and accepted by most merchants.
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In many countries you can't use credit cards to pay your taxes.
I've never seen a credit card which was an actual currency. I've only ever seen cards that have a corporation lend you a form a currency when you use them.
You comparison is the dumbest thing I've seen.
And yes, in many (most?) countries, you also can't use the almighty dollar to pay your taxes. So dollars are also useless?
I stand corrected. This is now the dumbest thing I've seen.
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Not in the US. Bitcoin purchases count as barter transactions. Which are still taxable.
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If demand were increasing exponentially, the price would still be going up as new supply becomes available. Do math better.
And if the price is not going up as demand increases exponentially, what that tells us is that because of the proliferation of new cryptos, supply is also increasing exponentially.
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"exponentially growth" idn't important if the exponent is extremely small, or even negative. Any curve can be described exponentially, even a flat line. And it's very common for new markets with new products to experience "exponential growth" in their early days, even if there are built-in limitations.
One of the critical limitations, for bitcoin, is the amount of fraud and theft by the traders such as Silk Road and "Plus Token"
Re:Demand is increasing exponentially (Score:5, Insightful)
If demand were increasing exponentially, the price would still be going up
For someone who claims to know math, you seem to have zero grasp on the different between future and present, and short vs long term effects.
Think better.
And you seem to think that Bitcoin price is based on math.
It isn't. The price is completely artificial, it's propped up by people like the ones mentioned in the article who trade small amounts of bitcoin between sock puppet accounts at elevated prices.
Why? To suck real real currency into the system from idiots who think Bitcoin will make them rich for free.
TANSTAAFL.
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I deeply suspect this is the case as well, but there doesn't appear to be a smoking gun which I find surprising given the blockchain is public and lots of people are analysing it - e.g. to identify and track BTC from ransomware campaigns. OK, it would be possible to do this kind of price manipulation by trades within an exc
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Why create a loop when you can spawn new account/wallets at will? Anyway, I'm not sure how cycling between wallets would affect the share price, nor how that might be create demand. You have to actually generate cash-to-BTC transactions to affect the price (by definition), the reverse of what this group has done.
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That's easy enough to do. Someone with a decent amount of seed money buys and sells their own bitcoin and dollars. You do need some seed money, but (except for buying the initial bitcoin) it's perfectly safe.
You can probably be extra clever and involve some other cryptocurrencies in the trading too.
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The way Bitcoin's are laundered is by passing trough bitcoin exchanges such as the one in TFA. The dirty bitcoins go in from account A into one of the exchange's accounts. Then the exchange performs a number of opaque operations between it's different accounts and some time later the washed bitcoins come out in account B. As long as the exchange's accounts aren't being used just for laundering, the opaque nature of their internal transfers makes it impossible to follow A > B.
"Whales" like this one just u
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I deeply suspect this is the case as well, but there doesn't appear to be a smoking gun which I find surprising given the blockchain is public and lots of people are analysing it
It's anonymous and the people manipulating the prices aren't stupid. They can easily create a new account for every single transaction if they want to.
You can easily see it in the trading volumes though: When the price is going up the trading volumes tend to be tiny. This is completely the opposite of what you'd expect when something is traded based on its value. Price should only go up during periods of high demand and high demand means high volumes of trading.
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Why? To suck real real currency into the system from idiots who think Bitcoin will make them rich for free.
TANSTAAFL.
I'd be a millionaire now had I bought or mined bitcoins in the early days. Like it or not Bitcoin is not going away and is still used as currency on the dark net.
Re:Demand is increasing exponentially (Score:4, Insightful)
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Satoshis.
Re: Demand is increasing exponentially (Score:2)
...and is still used as currency on the dark net.
Or so some say.
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I prefer the term "exchange medium".
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It's definitely going away. The dark net is not large enough to support its price, and enough price drops will eventually spook everyone into abandoning it.
Re:Demand is increasing exponentially (Score:4, Insightful)
Unlikely. You'd have probably sold it the minute a BTC was worth $20.
Re:Demand is increasing exponentially (Score:4, Insightful)
I'd be a millionaire now had I bought or mined bitcoins in the early days. Like it or not Bitcoin is not going away and is still used as currency on the dark net.
Hindsight is 20:20.
You'd also be a millionaire if you's bought Microsoft stocks, Apple stocks, tulip bulbs, etc.
OTOH you wouldn't be a millionaire if you'd put your money in any of the tens of thousands of "next great things" that fizzled out and went bust.
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Yep, keep telling that to yourself. I'm sure BitCoin will be the money of the future. It and all other 1000 crypto currencies plus the other 1.000.000 that will crop up as soon as someone decides it's time for yet another crypto currency.
I've yet to hear a good explanation for it (Score:2)
I've yet to hear a good explanation for it, why bitcoin would have consistent demand in the future - especially in regards of why bitcoin and not some other coin.
I mean, bitcoin is kinda crap if you want to avoid tracking too and for that kind of use theres better coins.
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so tell me, how much did you bet for bitcoin after it's price plummeted this time? totalitarian, blahblah government funded hackers blahblah - WHY WOULD YOU PUT YOUR MONEY IN CRYPTO COINS IF YOU FEAR THAT STUFF ?! it makes no sense really
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Bitcoin is too volatile to be used as a currency.
If countries use bitcoins their economies will fluctuate to boom and bust over night. Without much influence from them. If you were a company running off of bitcoin say you sell Pizza. You can buy a Pizza at 0.0028 bitcoin this morning. By the end of the day you will need to sell it at 0.0035 bitcoin or 0.0021 bitcoin depending how this market fluctuates all day. Having to buy ingredients that pizza that you sold at 0.0028 bitcoin may not make a profit beca
Ha! (Score:2)
Another evidence btc is not a currency (Score:5, Interesting)
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$185 million worth of currency exchanging hands should not break the value of a currency by nearly 2,75% (200/7100)
It will if the value is:
a) Artificially propped up.
b) Mostly owned by a small group of "whales" who have their computers set up to sell at the slightest sign of trouble so they're not left holding the baby when the house of cards finally collapses.
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Re: Another evidence btc is not a currency (Score:2)
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B) sounds plausible, but the collapse would already have happened if that were the case. We’ve already seen a couple of serious crashes, but they have failed to trigger a mass selloff causing a meltdown (ie a crash to sub dollar levels)
That's because it's organized - a bit like OPEC.
In theory the group of people who own most of Bitcoin are rivals, in practice they have meetings and agreements between themselves. It's in nobody's interest to provoke that mass selloff, They have enough cash on hand that they don't need to liquidate their holdings all at once, it's better to keep the price up.
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C) trade volume is low
If trade volume is low, but onesided, then you can run the price up or down by a large percentage and make some headlines, but when others try to respond to take advantage, the price instantly corrects as the volume ramps up. Trying to take advantage often results in a loss as the price swings faster than exchange transactions complete.
You'll see this a lot in "penny stocks," where the price might be swinging up and down by 2 or 3x, but there is actually no discount opportunity there b
it's a speculative item with very little traffic (Score:3)
that's what it is. the price is totally speculative. nobody actually "needs" to have bitcoin next week so nobody has to buy it.
thats why perhaps the total actual market cap would be like about 1 billion dollars worldwide. that being the amount of money that is tied into it and how much can be actually extracted from it. if you had all the bitcoin and started just selling it off, maybe you would just cap out at 1 billion or even less.
Re:it's a speculative item with very little traffi (Score:4, Insightful)
Less. Far less. If you had 100% of the BTC, and you decided to sell it all, the price would crash well before you reached 100% of what you paid for it. Probably before you reached 50%.
That's over simplified, but the same thing would happen if some percentage of holders behaved similarly. What that percentage is remains to be seen.
Also, "value" has already been extracted from BTC in the form of production and transaction(s), which cost real money to perform, ergo one should not expect a 100% ROI even in ideal circumstances. Currency works precisely because its manufacturing and use costs are almost completely decoupled from its value. BTC is almost exactly the opposite, despite its founders unrealistic expectations, where a huge part of the price of a bitcoin is the cost to mine it.
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I just wonder how exactly a scammer is going to take hundreds of millions of dollars out of a cryptocurrency exchange. (Asking for a friend ;-) )
Apparently, everybody knows these bitcoins came from a fraud scheme. So the exchanges must know too. Are there still any exchanges left that pass money around no questions asked? Most are doing their best to comply with banking regulations these days. I lost count how many times I had to send them passport details, electricity bills etcetera.
They could use mules, o
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Didn't CitiCorp, one of the world's largest money laundries, say they were going to get into BitCoin a few years ago?
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$185 million worth of currency exchanging hands should not break the value of a currency by nearly 2,75% (200/7100) especially since this is a drop in the amount (17 million bitcoin, so theoretically more than 100 billion dollar (7000*17*10^6 don't care for exact values)) that's barely 0.0015% of the total amount of btc.
What idiots are voting this up when the poster can't even get basic maths right? You're 0.0015% is off by a factor 100, you dimwit. With your mathematical prowess you should trade in bitcoin.
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How can it be a "currency" when it lets users print their own money at home?
Do you know any real currencies that do that?
Re:Another evidence btc is not a currency (Score:4, Interesting)
A "whale" is a gambling sucker, whereas this guy is just making it temporarily easier for someone else to buy Bitcoins.
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No different than day trading stocks.
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No different than day trading stocks.
So you agree it's not a currency.
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Well that gets complicated. I can certainly buy and sell things with it. It can get traded for USD and vice versa so that leads me to believe it has value.
Re: Another evidence btc is not a currency (Score:2)
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Paper money could be used as stuffing I guess, but not much more than that.
Paper money is accepted in exchange for goods by a lot more people than Bitcoin.
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Well that gets complicated. I can certainly buy and sell things with it.
You can barter with it but that doesn't make it a currency.
The difference? A currency is universally acceptable, anybody will accept it in exchange for any goods.
The percentage of people who'll accept Bitcoin for anything is very small.
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Re: Another evidence btc is not a currency (Score:3)
liquidate (Score:4, Insightful)
Anyone else find the language of liquidating a large stash of bitcoin a little odd?
If bitcoin really is a currency like cash in dollars or euros, isn't it by definition already as "liquid" as possible?
Re:liquidate (Score:5, Informative)
If bitcoin really is a currency like cash in dollars or euros
It isn't.
Re:liquidate (Score:5, Interesting)
Anyone else find the language of liquidating a large stash of bitcoin a little odd?
If bitcoin really is a currency like cash in dollars or euros, isn't it by definition already as "liquid" as possible?
Occam's razor: It isn't a currency.
(What currency would ever allow people to print their own money at home?)
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Anyone else find the language of liquidating a large stash of bitcoin a little odd?
If bitcoin really is a currency like cash in dollars or euros, isn't it by definition already as "liquid" as possible?
Occam's razor: It isn't a currency.
(What currency would ever allow people to print their own money at home?)
Bitcoin is indistinguishable from tulip bulbs.
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No. Tulips are very pretty. Bitcoins are not visible.
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Can you please point me towards a tulip exchange that gives me cash for them? I can do that right now with dozens of crypto exchanges.
Re:liquidate (Score:4, Interesting)
If you have a significant quantity of tulip bulbs, there is absolutely a wholesaler-distributor who will give you cash for them.
Re: liquidate (Score:2)
You can even - theoretically - eat Krugerrands. ;)
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People were still allowed to breed chickens, goats, etc. when bartering them was (and still is, in some locations) the defacto "currency". Like any asset/currency, it's worth precisely what other people are prepared to pay/exchange for it, even if the value of the raw materials is significantly less, or maybe even zero (see "art"). This is just the same principle at work, so not something I really consider as a flaw of crypto curre
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You can still eat a chicken if nobody wants it.
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https://medium.com/@festina_le... [medium.com]
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liquidity is your ability to spend it.
Euros in the US are less liquid because you just can't go to any US store and hand them a 10E note and buy something worth $11 You will need to get your euros converted to usd before you can go to any store and buy a product.
In college back in the old days. The liquidity of paper bills over $5.00 were drastically diminished, and quarters and singles were very liquid.
I once had $5.00 as the smallest bill in my pocket, and I couldn't buy anything with it. Products under $
Re: liquidate (Score:2)
I guess
That certainly sums it up.
Massive fraud (Score:4, Interesting)
What's wrong with you guys? Bitcoin harms the environment in a massive way, to produce something that is of no value whatsoever except in the imagination of some people, it's used to shovel 9 digit sums into the hands of criminals, and there are still people who think it's all a good idea?
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So do I get this right: Some idiots paid a total of about $185,000,000 to a bunch of fraudsters, and you get all excited about a drop in the bitcoin price?
We all? No - just the scammers, and the gulls they haven't burned yet. and BeauHD.
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But, the other option is the "gubermnt" and "gubermnt" is bad, OK?
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Bitcoin harms the environment in a massive way, to produce something that is of no value whatsoever except in the imagination of some people, it's used to shovel 9 digit sums into the hands of criminals...
And it's used to exploit people to pay over sums of money which fund the North Korean government's missile and nuclear weapons programs [coindesk.com]. You forgot that one.
Just tell everyone who trades in bitcoin that they're helping Kim get nukes. See if they're still a fan of the system after learning that fact.
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And it's used to exploit people to pay over sums of money which fund the North Korean government's missile and nuclear weapons programs [coindesk.com]. You forgot that one.
Didn't know that, but "shovelling nine digit sums into the hands of criminals" should cover that.
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Bitcoin is scarce (Score:3)
Can you inflate the supply: NO
Can you print Bitcoin for free: NO
Is Bitcoin the only decentralized system solving The Byzantine Generals Problem: YES
https://www.reddit.com/r/Bitco... [reddit.com]
If we look at the definition of a shitcoin by a famous author: A shitcoin is anything promoted as a form of money whose supply is easy to increase. In other words, anything other than gold or bitcoin.
Meanwhile a bowl of petunias was heard to say... (Score:2)
Many people have speculated that if we knew exactly why the bowl of petunias had thought that we would know a lot more about the nature of the Bitcoin than we do now.
Welcome to the free market! (Score:5, Insightful)
Well, that's what you signed up for, why are you complaining now? You wanted no government oversight, you got it. Where exactly is the problem?
Do we need click bait headlines on Slashdot? (Score:3, Insightful)
Would it really be that hard to rephrase the headline into something that doesn't read like the typical clickbait trash?
I'm no professional editor but maybe have it something like...
Massive BitCoin Liquidation Sent Value To Sub-$7000 Overnight
Don't make me click on the link to find out how, tell me in the headline. If this is interesting to me then I will click. If this reads like clickbait then I move on.
I only commented to point out the clickbait headline. Slashdot quality has been really taking a dive lately. Is it too much to ask to not cross the line into clickbait headlines?
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This is the most tedious thread (Score:3)
This is the most tedious thread I have ever read on Slashdot, Thanks for playing.
Which just confirms what is well known (Score:2)
How many more times? (Score:4, Insightful)
How many more times will Bitcoin be pumped and dumped before people realize that any currency without government backing is too volatile and thus too dangerous and worthless, and merely speculative like a penny stock--unless you're the pumper? (Yes, I'm well-aware that some currencies WITH government backing are near-worthless, but that's a separate political discussion.)
Bitcoin shoud be taken seriously! (Score:4, Interesting)
Bitcoin is unique as the only digital asset genuinely scarce. Bitcoin is scarcest than Gold. In the digital world, nothing else is decentralized, and so, can even compete against Bitcoin. Bitcoin is definitely alone.
https://medium.com/@100trillio... [medium.com]
https://www.reddit.com/r/Bitco... [reddit.com]
Bitcoin 'Investing' (Score:2)
The Dunning-Krugerrand Effect.
Oh crap (Score:2)
Now I can't buy my groceries this week.
Oh no, wait, I don't buy groceries in Bitcoin. Whew.
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https://www.ccn.com/bitcoin-wh... [ccn.com]
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Yeah I thought that Cetaceans were intelligent creatures, and would be too smart to get sucked into the bitcoin craze.
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Yeah I thought that Cetaceans were intelligent creatures, and would be too smart to get sucked into the bitcoin craze.
Normally yes; but they were offered an amazing bargain on bulk krill...
Re: Wtf does this have to do with a whale? (Score:2)
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I'm not sure you understand how short positions work. A short position is when you borrow a security and sell it immediately, with the obligation to buy it back and return it when you close the short position. In effect it is a bet that the price of the security is going to fall in the future, allowing you to buy the security back at a lower price, thereby pocketing the difference. It is the opposite of "buy low, sell high." Instead it's "Sell high, buy low."
You get the cash up front with the short sale and