Here’s what ‘Institutional Investors’ are waiting for:

I just had the most enlightening conversation with one of my clients and I want to share the key ideas with you here.

This person is a technologist who is working for a major financial services firm that is developing some tools and infrastructure for BTC trading. We were casually discussing the price fluctuations over the last few days and this person explained the viewpoint of this particular institutions management with me (they didn't name the firm, so I can't offer any clues – feel free to speculate).

Here's what was outlined to me:

  • The major financial services institutions know that BTC prices are driven by trading, not holding or spending (not 'utility', in the common sense of the term) and they therefore view it like gold (an arbitrary value store).
  • They believe that BTC will have a market value based on the wealth that they (and their clients) choose to give it, just like they do with gold.
  • They know that the 'asset' they are concerned with is actually the ecosystem that sustains the network, not the BTC directly.
  • These institutions view the 'floor' for the BTC price as the 'minimum exchange value required to sustain the network'.
  • They therefore view the health of the network (number of participants and aggregate hashrate) as the relevant indicator for establishing the price floor: when the exchange value drops to the point where the health of the network begins to show signs of weakness then they will be satisfied that they are buying in at the right price.
  • These same institutional investors are not in a hurry to see price appreciation. Their primary concern is share of control.
  • They will buy slowly – inconspicuously – to keep the price from appreciating while they build their stakes (usual tricks of multiple wallets, obfuscating with occasional sells).
  • At some point the markets will cotton on to the game and the late-comers will rush to grab what share of the BTC supply remains to be traded. It could be six months, a year, two years, whatever. They are not in a rush.
  • They will use those BTC as collateral (just like gold) for low-cost borrowing of fiat for expansion and payouts to customers.

This person's advice to me was simple: watch the price fall until the network starts to show signs of 'weakening'. When this happens, expect a period of price stabilization: low volume trading within a narrowing price range, with minor upward movement in the price trend as required to keep the miners (and their vendors) healthy and the ecosystem growing. It seemed pretty clear that retail use of BTC for payments wasn't on the radar, and the biggest threat they see is from central banks that are in the process of doing the very same thing for the same reason.

Note that this is not advice, nor evidence of anything and I don't know any more than I am sharing here, although I would be pleased to see a debate and discussion. It made a lot of sense to me and I thought some of you might agree.

submitted by /u/Quartermark
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Bitcoin – The Currency of the Internet

We really need to start pushing for SegWit support. Stop waiting for the Lightning Network to fix everything.

What is SegWit ?

The formal title "Segregated Witness (Consensus layer)" had Bitcoin Improvement Proposals number BIP141. It is intended to solve a blockchain size limitation problem that reduces Bitcoin transaction speed. It does this by splitting the transaction into two segments, removing the unlocking signature ("witness" data) from the original portion and appending it as a separate structure at the end. (https://en.wikipedia.org/wiki/SegWit)

What's the problem?

It has been more than 3 months since SegWit was activated. The current level of support for Segwit is abysmal at only 13% of all transactions using SegWit (http://segwit.party/charts/). If everyone right now switched to a SegWit supported wallet, the mempool would likely be empty again allowing for instant transactions once again. While we're all looking at the Lightning Network to solve the congestion issues, the is a much easier and faster fix right in front of us and that is SegWit.

Why isn't everybody using SegWit yet?

That is likely due to the fact that some very large exchanges have yet to activate SegWit on their site yet. Once they do activate SegWit , we should see the number of SegWit transactions rise up. This doesn't just benefit the users as the exchanges themselves will also pay less fees. In other words, we need to pressure all big exchanges into activating Segwit. Not next year, not next month but NOW.

How can I check if my wallet is Segwit compatible?

Good news is, most hardware and software wallets use SegWit. SegWit (P2SH) addresses begin with a “3”, like multisig addresses so they are easy to spot. If your wallet address does not begin with a 3, then it's not SegWit compatible. Those are the addresses we need to get changed and updated to SegWit compatible ones.

So who hasn't activated SegWit yet?

It's time to name and shame the exchanges that haven't activated SegWit yet. You can find a list of all major exchanges and players that have activated SegWit right here: https://bitcoincore.org/en/segwit_adoption/ If your wallet or exchange is NOT highlighted in green, it means it still hasn't activated SegWit yet and needs some serious encouragement from their paying customers. Those will either be marked in yellow as a work in progress or marked in white as planned. Neither of those two statuses are acceptable. It has been more than 3 months now and neglecting to activate Segwit is becoming a serious problem for the whole blockchain and needs to be dealt with right now.

You can help speed up SegWit activation!

This is where big numbers hold big power. You can all help by first checking if your wallet is SegWit compatible (needs to start with a 3). If it's not SegWit compatible, then please make whoever provided the wallet is aware of this issue you are facing and request them to provide a SegWit wallet as soon as possible. So for example if you have a wallet on Coinbase, you will notice it has not activated SegWit yet. You help the cause greatly by sending the exchange support a message that you want to see SegWit activated on their exchange. If you want to take it one step further, you could move your Bitcoins and other funds away from your non-SegWit wallet and exchange to one that does have SegWit activated.

The time for action is now. If you have any questions, please ask them.

tl;dr: SegWit adoption is seriously low. If we can increase it we get faster transactions at lower costs.

submitted by /u/ForeverDutch92
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Bitcoin – The Currency of the Internet