Stop selling mined coins privately | Bitcointalksearch.org

polynesia

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Quote from: sandykho47 on September 25, 2014, 07:32:25 AM

You won't break bitcoin price if you sell privately
But you must buy bitcoin from exchanger to raise the price Grin

But i don't want someone use that method to get a lot of profit Angry

Quote from: Honeypot on September 15, 2014, 01:35:14 AM

OP is exactly the reason why people deal off the exchanges.

All I hear is 'stop dealing to your advantage and buy over priced on exchanges so I can line my own pocket!'

I think that's true
And some people thinking just like the OP

Quote from: manselr on September 24, 2014, 05:19:04 PM

Imagine you have to sell 10000 BTC... you are going to break the market if you do it in an exchange, if you do it subtletly with tons of small sells to not create a big wall, you'll take ages. So contacting some rich person privately is the best way.

But, it's difficult to search rich person who want buy 10000 BTC privately Sad

There are OTC markets which help you find such buyers. Of course, they will take a 5% cut.

BIGbangTheory

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Quote from: mikeymillie on September 20, 2014, 04:48:09 PM

"-Miners typically need to sell their coin immediately as they have invested in equipment that expects a return"

Can someone please clarify for me, in layman's terms, how the investment a miner makes to acquire a coin is any more at risk than the investment a trader makes to acquire a coin? Once the coin is in your wallet, the relative return on that coin, once sold, is identical for both cases isn't it?

Miner: Spent $10 on equipment costs, $90 on power and cooling, received one Bitcoin worth $100

Speculator: Spent $90 on some exchange, $10 on fees, received one Bitcoin worth $100

Why are these two individuals in any different situation once they have turned their non-coin assets into coin? Up until the moment the coin landed in their wallet, their pre-coin assets could have performed wildly different to each other. But once they have been converted to coin, they perform the same? Or am I making the mistake of thinking miners do not see themselves as speculators but as something like 'manufacturers' and are thus not using disposable risk capital to set up their operations?

The risk the miner is taking is when they buy their machine. They attempt to ROI on this investment by pocketing the difference between the cost of running the machine and the value of what the machine is able to produce

sandykho47

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Knowledge its everything

You won't break bitcoin price if you sell privately
But you must buy bitcoin from exchanger to raise the price Grin

But i don't want someone use that method to get a lot of profit Angry

Quote from: Honeypot on September 15, 2014, 01:35:14 AM

OP is exactly the reason why people deal off the exchanges.

All I hear is 'stop dealing to your advantage and buy over priced on exchanges so I can line my own pocket!'

I think that's true
And some people thinking just like the OP

Quote from: manselr on September 24, 2014, 05:19:04 PM

Imagine you have to sell 10000 BTC... you are going to break the market if you do it in an exchange, if you do it subtletly with tons of small sells to not create a big wall, you'll take ages. So contacting some rich person privately is the best way.

But, it's difficult to search rich person who want buy 10000 BTC privately Sad

manselr

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Imagine you have to sell 10000 BTC... you are going to break the market if you do it in an exchange, if you do it subtletly with tons of small sells to not create a big wall, you'll take ages. So contacting some rich person privately is the best way.

worhiper_-_

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Quote from: Honeypot on September 15, 2014, 01:35:14 AM

OP is exactly the reason why people deal off the exchanges.

All I hear is 'stop dealing to your advantage and buy over priced on exchanges so I can line my own pocket!'

That's true. When a miner wants to get rid of large quantities the exchange might not be the best place he can sell.

Brokers

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It's bad because there's no competition and no way to determine the acurately

zorke

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Quote from: mikeymillie on September 22, 2014, 03:32:03 PM

Quote from: jjacob on September 20, 2014, 09:38:07 PM

Quote from: mikeymillie on September 20, 2014, 04:48:09 PM

"-Miners typically need to sell their coin immediately as they have invested in equipment that expects a return"

Can someone please clarify for me, in layman's terms, how the investment a miner makes to acquire a coin is any more at risk than the investment a trader makes to acquire a coin? Once the coin is in your wallet, the relative return on that coin, once sold, is identical for both cases isn't it?

Miner: Spent $10 on equipment costs, $90 on power and cooling, received one Bitcoin worth $100

Speculator: Spent $90 on some exchange, $10 on fees, received one Bitcoin worth $100

Why are these two individuals in any different situation once they have turned their non-coin assets into coin? Up until the moment the coin landed in their wallet, their pre-coin assets could have performed wildly different to each other. But once they have been converted to coin, they perform the same? Or am I making the mistake of thinking miners do not see themselves as speculators but as something like 'manufacturers' and are thus not using disposable risk capital to set up their operations?

Miners would like to continue mining and earn bitcoins. So their bills have to be paid out.

So do traders, I still do not see how a trader and a miner are in fundamentally different circumstances.
One buys bitcoins from an exchange in hopes of selling them for a profit.
The other buys bitcoins through a combination of a mining equipment company and the electric company, in hopes of selling them for a profit.

The responses I am getting so far seem to imply that miners live paycheck to paycheck (or bitcoin to bitcoin) and cannot afford to sit on even a single mined satoshi, but instead must immediately sell each one to pay their bills instead of waiting for a better price when a better price is likely to come. Do traders not have bills to pay as well? Their investment capital didn't come from nowhere either, and has to be replaced as well.

Also there are, what, like 60% of all mined bitcoins in the blockchain that have as of yet, no unspent outputs? Wouldn't this seem to be, in large part, the result of miners who are clearly not selling coins they mine right away? I don't think Satoshi and a few people who lost or forgot about their Bitcoin account for such a large figure.

Most of the mined bitcoin with no unspent outputs were mined in the days before pools. Even if a miner is to "save" his bitcoin the bitcoin he owns will likely have inputs that are not from block subsidies (they are from previous inputs)

I would think of it as the miners are being forced to buy a certain amount of bitcoin, more then they can afford to buy, so they need to sell some of it. For example, if a miner can only afford to spend $100 per month buying bitcoin but uses up $1,000 worth of electricity then he will need to sell at least $900 worth so he does not buy (on a net effect) more then he can afford

mikeymillie

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Quote from: jjacob on September 20, 2014, 09:38:07 PM

Quote from: mikeymillie on September 20, 2014, 04:48:09 PM

"-Miners typically need to sell their coin immediately as they have invested in equipment that expects a return"

Can someone please clarify for me, in layman's terms, how the investment a miner makes to acquire a coin is any more at risk than the investment a trader makes to acquire a coin? Once the coin is in your wallet, the relative return on that coin, once sold, is identical for both cases isn't it?

Miner: Spent $10 on equipment costs, $90 on power and cooling, received one Bitcoin worth $100

Speculator: Spent $90 on some exchange, $10 on fees, received one Bitcoin worth $100

Why are these two individuals in any different situation once they have turned their non-coin assets into coin? Up until the moment the coin landed in their wallet, their pre-coin assets could have performed wildly different to each other. But once they have been converted to coin, they perform the same? Or am I making the mistake of thinking miners do not see themselves as speculators but as something like 'manufacturers' and are thus not using disposable risk capital to set up their operations?

Miners would like to continue mining and earn bitcoins. So their bills have to be paid out.

So do traders, I still do not see how a trader and a miner are in fundamentally different circumstances.
One buys bitcoins from an exchange in hopes of selling them for a profit.
The other buys bitcoins through a combination of a mining equipment company and the electric company, in hopes of selling them for a profit.

The responses I am getting so far seem to imply that miners live paycheck to paycheck (or bitcoin to bitcoin) and cannot afford to sit on even a single mined satoshi, but instead must immediately sell each one to pay their bills instead of waiting for a better price when a better price is likely to come. Do traders not have bills to pay as well? Their investment capital didn't come from nowhere either, and has to be replaced as well.

Also there are, what, like 60% of all mined bitcoins in the blockchain that have as of yet, no unspent outputs? Wouldn't this seem to be, in large part, the result of miners who are clearly not selling coins they mine right away? I don't think Satoshi and a few people who lost or forgot about their Bitcoin account for such a large figure.

botany

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Quote from: dzust on September 21, 2014, 03:36:02 AM

Quote from: jjacob on September 20, 2014, 09:38:07 PM

Quote from: mikeymillie on September 20, 2014, 04:48:09 PM

"-Miners typically need to sell their coin immediately as they have invested in equipment that expects a return"

Can someone please clarify for me, in layman's terms, how the investment a miner makes to acquire a coin is any more at risk than the investment a trader makes to acquire a coin? Once the coin is in your wallet, the relative return on that coin, once sold, is identical for both cases isn't it?

Miner: Spent $10 on equipment costs, $90 on power and cooling, received one Bitcoin worth $100

Speculator: Spent $90 on some exchange, $10 on fees, received one Bitcoin worth $100

Why are these two individuals in any different situation once they have turned their non-coin assets into coin? Up until the moment the coin landed in their wallet, their pre-coin assets could have performed wildly different to each other. But once they have been converted to coin, they perform the same? Or am I making the mistake of thinking miners do not see themselves as speculators but as something like 'manufacturers' and are thus not using disposable risk capital to set up their operations?

Miners would like to continue mining and earn bitcoins. So their bills have to be paid out.

Someone have a very big bill to pay and mining is some kind of investmet.

Mining is an investment, which requires coins to be turned around. I would think it is like some kind of working capital cycle.

snappa4ever

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Quote from: jjacob on September 20, 2014, 09:38:07 PM

Quote from: mikeymillie on September 20, 2014, 04:48:09 PM

"-Miners typically need to sell their coin immediately as they have invested in equipment that expects a return"

Can someone please clarify for me, in layman's terms, how the investment a miner makes to acquire a coin is any more at risk than the investment a trader makes to acquire a coin? Once the coin is in your wallet, the relative return on that coin, once sold, is identical for both cases isn't it?

Miner: Spent $10 on equipment costs, $90 on power and cooling, received one Bitcoin worth $100

Speculator: Spent $90 on some exchange, $10 on fees, received one Bitcoin worth $100

Why are these two individuals in any different situation once they have turned their non-coin assets into coin? Up until the moment the coin landed in their wallet, their pre-coin assets could have performed wildly different to each other. But once they have been converted to coin, they perform the same? Or am I making the mistake of thinking miners do not see themselves as speculators but as something like 'manufacturers' and are thus not using disposable risk capital to set up their operations?

Miners would like to continue mining and earn bitcoins. So their bills have to be paid out.

This is why miners need to sell some amount of their bitcoin when they mine. If they do not then they will have bills that they are unable to otherwise pay

dzust

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Quote from: jjacob on September 20, 2014, 09:38:07 PM

Quote from: mikeymillie on September 20, 2014, 04:48:09 PM

"-Miners typically need to sell their coin immediately as they have invested in equipment that expects a return"

Can someone please clarify for me, in layman's terms, how the investment a miner makes to acquire a coin is any more at risk than the investment a trader makes to acquire a coin? Once the coin is in your wallet, the relative return on that coin, once sold, is identical for both cases isn't it?

Miner: Spent $10 on equipment costs, $90 on power and cooling, received one Bitcoin worth $100

Speculator: Spent $90 on some exchange, $10 on fees, received one Bitcoin worth $100

Why are these two individuals in any different situation once they have turned their non-coin assets into coin? Up until the moment the coin landed in their wallet, their pre-coin assets could have performed wildly different to each other. But once they have been converted to coin, they perform the same? Or am I making the mistake of thinking miners do not see themselves as speculators but as something like 'manufacturers' and are thus not using disposable risk capital to set up their operations?

Miners would like to continue mining and earn bitcoins. So their bills have to be paid out.

Someone have a very big bill to pay and mining is some kind of investmet.

jjacob

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Quote from: mikeymillie on September 20, 2014, 04:48:09 PM

"-Miners typically need to sell their coin immediately as they have invested in equipment that expects a return"

Can someone please clarify for me, in layman's terms, how the investment a miner makes to acquire a coin is any more at risk than the investment a trader makes to acquire a coin? Once the coin is in your wallet, the relative return on that coin, once sold, is identical for both cases isn't it?

Miner: Spent $10 on equipment costs, $90 on power and cooling, received one Bitcoin worth $100

Speculator: Spent $90 on some exchange, $10 on fees, received one Bitcoin worth $100

Why are these two individuals in any different situation once they have turned their non-coin assets into coin? Up until the moment the coin landed in their wallet, their pre-coin assets could have performed wildly different to each other. But once they have been converted to coin, they perform the same? Or am I making the mistake of thinking miners do not see themselves as speculators but as something like 'manufacturers' and are thus not using disposable risk capital to set up their operations?

Miners would like to continue mining and earn bitcoins. So their bills have to be paid out.

leannemckim46

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Quote from: mikeymillie on September 20, 2014, 04:48:09 PM

"-Miners typically need to sell their coin immediately as they have invested in equipment that expects a return"

Can someone please clarify for me, in layman's terms, how the investment a miner makes to acquire a coin is any more at risk than the investment a trader makes to acquire a coin? Once the coin is in your wallet, the relative return on that coin, once sold, is identical for both cases isn't it?

Miner: Spent $10 on equipment costs, $90 on power and cooling, received one Bitcoin worth $100

Speculator: Spent $90 on some exchange, $10 on fees, received one Bitcoin worth $100

Why are these two individuals in any different situation once they have turned their non-coin assets into coin? Up until the moment the coin landed in their wallet, their pre-coin assets could have performed wildly different to each other. But once they have been converted to coin, they perform the same? Or am I making the mistake of thinking miners do not see themselves as speculators but as something like 'manufacturers' and are thus not using disposable risk capital to set up their operations?

The miner would likely have spent a lot more then $10 in your scenario in buying their miner, but this is not the point.

The miner likely did not plan on investing in bitcoin via the electric company when they purchased their miner. They were likely hoping that the difficulty would rise at a slow enough pace such that they would be able to mine more bitcoin then the miner would cost plus the cost of electricity.

Also a trader would generally only purchase bitcoin on a one time basis, while the miner would be contentiously be buying bitcoin via the electric company. If they already had as much bitcoin as they needed/wanted then they would still need to purchase additional bitcoin because if they do not they would lose out on part of their investment as miners are a deprecating asset.

mikeymillie

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"-Miners typically need to sell their coin immediately as they have invested in equipment that expects a return"

Can someone please clarify for me, in layman's terms, how the investment a miner makes to acquire a coin is any more at risk than the investment a trader makes to acquire a coin? Once the coin is in your wallet, the relative return on that coin, once sold, is identical for both cases isn't it?

Miner: Spent $10 on equipment costs, $90 on power and cooling, received one Bitcoin worth $100

Speculator: Spent $90 on some exchange, $10 on fees, received one Bitcoin worth $100

Why are these two individuals in any different situation once they have turned their non-coin assets into coin? Up until the moment the coin landed in their wallet, their pre-coin assets could have performed wildly different to each other. But once they have been converted to coin, they perform the same? Or am I making the mistake of thinking miners do not see themselves as speculators but as something like 'manufacturers' and are thus not using disposable risk capital to set up their operations?

leannemckim46

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Quote from: Honeypot on September 15, 2014, 01:35:14 AM

OP is exactly the reason why people deal off the exchanges.

All I hear is 'stop dealing to your advantage and buy over priced on exchanges so I can line my own pocket!'

There are advantages and disadvantages to both dealing with exchanges and dealing in private. I would say that the vast majority of trading occurs on exchanges due to the fact that exchanges have reputation and most private brokers do not (at least do not have as much reputation). As a result what the OP is describing is really not relevant to the price of bitcoin

zorke

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Quote from: Possum577 on September 15, 2014, 12:41:14 AM

Quote from: BTCfaucetTIME on September 15, 2014, 12:25:00 AM

Quote from: Thenen on September 14, 2014, 04:05:39 AM

Quote from: AlexWaters on September 09, 2014, 02:16:47 PM

Miners, stop selling privately. Here is why it is not in your best interest:

-Miners typically need to sell their coin immediately as they have invested in equipment that expects a return

-There are deals for fixed liquidity privately. Where the miners can sell their coins outside the open market at a premium or at a guaranteed price range for a set period of time

-Those deals exist because there are market makers who profit immensely from pulling wool over the miners eyes

For example: the maker can buy 10,000 coins privately, which reduces the volume on the public order books. They can then “splash” the thinner books by selling 2000 coins; thereby bringing the price down. Now they can continue negotiating with miners stating that the market rate is $X - which is significantly lower than the market rate had the miners just sold on the open market. The makers are intentionally trying to keep volume off the open books so that they can keep the price low so that they can continue buying their coins low. Someone with $20,000,000 they want to invest in bitcoin would be able to acquire many more bitcoins by using the above methodology.

I dont get what you are trying to say, isn't selling it one exchange and selling it private the same?

I would personally argue that it is, however the OP seems to disagree.

If you trade privately then the person you sell to will either not purchase bitcoin on an exchange they otherwise would have bought to or will sell bitcoin that they would not have otherwise sold

Which results in the price you or I see being inaccurate, because activity is going on but it won't be reflected in the public price we're seeing on any open exchange. The OP's logic is accurate, whether it's actually happening is another story. I don't know enough about how many miners there are to know how realistic this scenario could be.

Not necessarily. If a seller values their privacy then they will not want their trade reflected on an exchange and will utilize a broker to execute their trade. Not only will their trade not be reflected on the exchanges but the transaction will not have a connection to the exchanges (via the blockchain or otherwise).

Honeypot

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OP is exactly the reason why people deal off the exchanges.

All I hear is 'stop dealing to your advantage and buy over priced on exchanges so I can line my own pocket!'

Possum577

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Loose lips sink sigs!

Quote from: BTCfaucetTIME on September 15, 2014, 12:25:00 AM

Quote from: Thenen on September 14, 2014, 04:05:39 AM

Quote from: AlexWaters on September 09, 2014, 02:16:47 PM

Miners, stop selling privately. Here is why it is not in your best interest:

-Miners typically need to sell their coin immediately as they have invested in equipment that expects a return

-There are deals for fixed liquidity privately. Where the miners can sell their coins outside the open market at a premium or at a guaranteed price range for a set period of time

-Those deals exist because there are market makers who profit immensely from pulling wool over the miners eyes

For example: the maker can buy 10,000 coins privately, which reduces the volume on the public order books. They can then “splash” the thinner books by selling 2000 coins; thereby bringing the price down. Now they can continue negotiating with miners stating that the market rate is $X - which is significantly lower than the market rate had the miners just sold on the open market. The makers are intentionally trying to keep volume off the open books so that they can keep the price low so that they can continue buying their coins low. Someone with $20,000,000 they want to invest in bitcoin would be able to acquire many more bitcoins by using the above methodology.

I dont get what you are trying to say, isn't selling it one exchange and selling it private the same?

I would personally argue that it is, however the OP seems to disagree.

If you trade privately then the person you sell to will either not purchase bitcoin on an exchange they otherwise would have bought to or will sell bitcoin that they would not have otherwise sold

Which results in the price you or I see being inaccurate, because activity is going on but it won't be reflected in the public price we're seeing on any open exchange. The OP's logic is accurate, whether it's actually happening is another story. I don't know enough about how many miners there are to know how realistic this scenario could be.

Possum577

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Loose lips sink sigs!

Quote from: leannemckim46 on September 10, 2014, 12:35:04 AM

I think your logic is somewhat flawed. First of all I kind of doubt that there are many miners contracting to sell 10k BTC considering that only 3.6k~ BTC are mined every day. Secondly these brokers are professionals at making markets, and since they have so much money invested in the bitcoin purchased they have a vested interest in trying to keep the price as stable as possible when they sell on the market to avoid being forced to sell at a loss.

with the exception of your volume consideration, your logic is flawed. Market Makers want to create a market that is stable for them only. Once they have their side of it, they want to move the market.

BTCfaucetTIME

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Quote from: Thenen on September 14, 2014, 04:05:39 AM

Quote from: AlexWaters on September 09, 2014, 02:16:47 PM

Miners, stop selling privately. Here is why it is not in your best interest:

-Miners typically need to sell their coin immediately as they have invested in equipment that expects a return

-There are deals for fixed liquidity privately. Where the miners can sell their coins outside the open market at a premium or at a guaranteed price range for a set period of time

-Those deals exist because there are market makers who profit immensely from pulling wool over the miners eyes

For example: the maker can buy 10,000 coins privately, which reduces the volume on the public order books. They can then “splash” the thinner books by selling 2000 coins; thereby bringing the price down. Now they can continue negotiating with miners stating that the market rate is $X - which is significantly lower than the market rate had the miners just sold on the open market. The makers are intentionally trying to keep volume off the open books so that they can keep the price low so that they can continue buying their coins low. Someone with $20,000,000 they want to invest in bitcoin would be able to acquire many more bitcoins by using the above methodology.

I dont get what you are trying to say, isn't selling it one exchange and selling it private the same?

I would personally argue that it is, however the OP seems to disagree.

If you trade privately then the person you sell to will either not purchase bitcoin on an exchange they otherwise would have bought to or will sell bitcoin that they would not have otherwise sold

Topic: Stop selling mined coins privately (Read 3396 times)