Topic: Synthetic Bitcoin Is 100x More Lethal Than the Real Thing (Read 196 times)
I believe that the cryptocurrency market has trade differently. The traders have upped the influence and try to swap BTC derivatives that they promise greater risk and reward.
I think that you are completely ignoring the fact that the real motive behind Bitcoin is to have a safe, secure and faster transaction method rather than to see how it performs in the crypto market where we are all speculators and trying to enjoy the show by speculating things like these.
As long as there's an obvious profit for something, why would people stay clear from it, right? The derivative market is worth trillions of dollars, and there's a reason behind that: genius, nasty investors found a way to dupe the people into thinking that brand Xy is different from brand X itself, albeit applying little to almost no change to it. The gullible people tend to buy it, and once these nasty rich assholes saw that it's easy to deceive people and the governments, they made it into a regular, legal thing. I don't see why 'synthetic' bitcoin is lethal, though I can say it might hurt bitcoin's economy knowing that it takes away a portion of what should/could be for bitcoin. Anyway, no matter how we put it, the derivatives market is one of the biggest 'legitimate' scams of the 21st century, and only those involved says otherwise.
This sort of synthetic coins and forks are nothing new, they come to the market with an enormous amount of hype and later fall on their faces without even proving anything. I personally, am not interested to see what this synthetic Bitcoin is capable of as long as it's value is backed by something.
As long as there's popularity for derivative trading I don't think we'll really need to care about how hazardous it can be, moreover, it is not causing any problem to the overall market rather just to the users who are surely investing knowing the real risk of trading. But, in my opinion, only the pros should be allowed to do derivative trading.
I know that re-quoting myself is kinda 'lame', but ...
If your only in this for 'profit', then you probably have the game all wrong!
Yes the coin market cap top 200 has changed considerably within the last year...
Most real and genuine alternative crypto currency projects (some with massive potential) have been seemingly displaced, forgotten or abandoned over equally or more 'worthless' tokenization i.e. similar to derivatives in financial markets.
- https://en.wikipedia.org/wiki/Tokenization_(data_security)
..."The concept of tokenization, as adopted by the industry today, has existed since the first currency systems emerged centuries ago as a means to reduce risk in handling high value financial instruments by replacing them with surrogate equivalents."...
- https://en.wikipedia.org/wiki/Derivative_(finance)
..."In finance, a derivative is a contract that derives its value from the performance of an underlying entity." ...
So, now that the 'industry' has largely replaced long-term intrinsic value (proven in Bitcoin code), with short-term 'greed' i.e. tokenization and derivatives - how can we expect to truly leverage that original value or worth?
...
Between 2013 and 2017 I spent a lot of my time on this forum in the Altcoin boards - for good reason.
In one of my posts (which I will search for and {link here}) I stated that Bitcoin's value was now effectively backed by Pizza, Haircuts and Alt. coins.
In another post I also stated that most of these altcoin crypto currencies (bitcoin clones) would simply eventually disappear.
...
Avoid eventual de-tokenization and re-focus on what actually builds intrinsic value in the markets you are looking to 'profit' from.
Here is the original bitcoin.org website:
- https://web.archive.org/web/20100327210623/http://www.bitcoin.org:80/faq
..."What is Bitcoin’s value backed by?
Bitcoin is valued for the things it can be exchanged to, just like all the traditional paper currencies are.
When the first user publicly announces that he will make a pizza for anyone who gives him enough Bitcoins, then he can use Bitcoins as payment to some extent - as much as people want pizza and trust his announcement. A pizza-eating hairdresser who trusts him as a friend might then announce that she starts accepting Bitcoins as payment for fancy haircuts, and the value of the Bitcoin would be higher - now it would be backed by pizzas ''and'' haircuts. When Bitcoins have become accepted widely enough, he could retire from his pizza business and still be able to use his Bitcoin-savings.
Currently, Bitcoin is in beta development stage, and some new features need to be implemented before the system is well suited for real use. The system already works on the basic level, though, and you can trade with it if you want to."...
That was probably written by Satoshi (or with his input), and yes whilst Bitcoin had to start somewhere ... do you see any mention of tokenization or derivatives in 'fake' financial markets. None whatsoever - just real world examples of actual 'local' currency being used buy people and businesses.
'We' have lost our way ...
The world's elite and the bankster's are asserting and utilizing (effectively stealing) Blockchain technology to their own ends ...
'Criminals' are continuing to create fake ICO's and 'SCAM's' for folks to 'invest' in ...
So, please continue to sell them your Digital Gold in exchange for representative Plastic Buttons and I will see you at The Restaurant at the End of the Universe.
*This post does not constitute financial advice whatsoever*
There is a lot change going on in the coin market cap top 200 this days and I don't know if I'm the only one who's aware of it. Could you believe new (4months-7month ago) listed token/coin claimed much slot in the CMC top #200 list. Are those old project which belong to the spot claimed no more profitable?
Your opinion
Your opinion
If your only in this for 'profit', then you probably have the game all wrong!
Yes the coin market cap top 200 has changed considerably within the last year...
Most real and genuine alternative crypto currency projects (some with massive potential) have been seemingly displaced, forgotten or abandoned over equally or more 'worthless' tokenization i.e. similar to derivatives in financial markets.
- https://en.wikipedia.org/wiki/Tokenization_(data_security)
..."The concept of tokenization, as adopted by the industry today, has existed since the first currency systems emerged centuries ago as a means to reduce risk in handling high value financial instruments by replacing them with surrogate equivalents."...
- https://en.wikipedia.org/wiki/Derivative_(finance)
..."In finance, a derivative is a contract that derives its value from the performance of an underlying entity." ...
So, now that the 'industry' has largely replaced long-term intrinsic value (proven in Bitcoin code), with short-term 'greed' i.e. tokenization and derivatives - how can we expect to truly leverage that original value or worth?
...
Between 2013 and 2017 I spent a lot of my time on this forum in the Altcoin boards - for good reason.
In one of my posts (which I will search for and {link here}) I stated that Bitcoin's value was now effectively backed by Pizza, Haircuts and Alt. coins.
In another post I also stated that most of these altcoin crypto currencies (bitcoin clones) would simply eventually disappear.
...
Avoid eventual de-tokenization and re-focus on what actually builds intrinsic value in the markets you are looking to 'profit' from.
Here is the original bitcoin.org website:
- https://web.archive.org/web/20100327210623/http://www.bitcoin.org:80/faq
..."What is Bitcoin’s value backed by?
Bitcoin is valued for the things it can be exchanged to, just like all the traditional paper currencies are.
When the first user publicly announces that he will make a pizza for anyone who gives him enough Bitcoins, then he can use Bitcoins as payment to some extent - as much as people want pizza and trust his announcement. A pizza-eating hairdresser who trusts him as a friend might then announce that she starts accepting Bitcoins as payment for fancy haircuts, and the value of the Bitcoin would be higher - now it would be backed by pizzas ''and'' haircuts. When Bitcoins have become accepted widely enough, he could retire from his pizza business and still be able to use his Bitcoin-savings.
Currently, Bitcoin is in beta development stage, and some new features need to be implemented before the system is well suited for real use. The system already works on the basic level, though, and you can trade with it if you want to."...
That was probably written by Satoshi (or with his input), and yes whilst Bitcoin had to start somewhere ... do you see any mention of tokenization or derivatives in 'fake' financial markets. None whatsoever - just real world examples of actual 'local' currency being used buy people and businesses.
'We' have lost our way ...
The world's elite and the bankster's are asserting and utilizing (effectively stealing) Blockchain technology to their own ends ...
'Criminals' are continuing to create fake ICO's and 'SCAM's' for folks to 'invest' in ...
So, please continue to sell them your Digital Gold in exchange for representative Plastic Buttons and I will see you at The Restaurant at the End of the Universe.
*This post does not constitute financial advice whatsoever*
Derivatives trading isn’t new, but it’s been enjoying a renaissance of late. As the cryptocurrency market has traded sideways, traders have upped the leverage and rushed to swap BTC derivatives that promise greater risk and reward. While platforms like Bitmex and Deribit have profited from the boom in synthetic assets, many traders have been left high and dry.
Also read: Hydroelectric Dam in New York Repurposed as Crypto Mining Farm
Derivatives Trading Is a Hazardous Pursuit With Little Margin for Error
Bitcoin investing is often portrayed as navigating a bumpy road, with each trough and pothole invoking a rallying cry to “Hodl” and persevere till the finish line. If the analogy is accurate, then derivatives trading is like speeding down that road on a motorbike at 160 mph. One false move – a flash crash here; a DDoS there – and it’s game over. Hit a pothole as a hodler and all you’ll lose is some USD off your portfolio. Do the same on 100x leverage and you’ll be liquidated on the spot. Trading synthetic assets, particularly on high leverage, is not for the faint-hearted. Nor is it for the inexperienced.
Synthetic Bitcoin Is 100x More Lethal Than the Real Thing
A handful of Bitmex traders have gotten very rich indeed
There are three types of synthetic options available to bitcoin traders: futures, derivatives, and margin. Some platforms, such as Bitmex, Whaleclub, and Deribit, offer all three. Traditional exchanges such as Bitfinex, Hitbtc, and Poloniex offer margin trading only, and then there’s the likes of Okcoin which offers futures and margin but no derivatives. Here’s how the three options play out:
Futures: A type of derivative contract that can include leverage of up to 100x, futures are an agreement to buy or sell an asset – in this case synthetic BTC – at a future date for a certain price.
Derivatives: A type of contract whose value is derived from that of another asset. On sites like Bitmex, it’s possible to trade options, swaps, and futures – all types of derivatives – with the possibility of higher returns thanks to leverage which multiplies the potential profit or loss, depending on how the trade goes.
Margin: A type of trade in which money is borrowed from a broker with the expectation that they will be repaid upon generating a profit. A minimum level of equity must be maintained on the platform, typically around 30%, to cover losses. If the balance falls below this, additional funds must be covered to account for the shortfall.
Derivatives Can Be Dangerous
Synthetic Bitcoin Is 100x More Lethal Than the Real ThingCrypto Twitter and Telegram channels are filled with tales of woe from leveraged traders who got stopped out and had their position liquidated. If conventional trading is cocaine-like in its addictiveness, high leverage is crack cocaine. One of the biggest gripes for traders, particularly on Bitmex, is those unexpected events that can wreck even the best laid plans. Even experienced traders are taking a huge risk, over and above those associated with bitcoin’s ‘natural’ movements. DDoS attacks, downtime, log-in errors, and sudden price spikes have caused traders to lose everything. When such events conspire, there is little recourse, for complaining to the Seychelles-registered Bitmex will get you nowhere.
As discontent with Bitmex has grown, Deribit has welcomed traders with open arms. It professes to offer faster trade execution than Bitmex, but with only 50x leverage versus its rival’s 100x. Bitmex is still the whale in the derivatives market by some distance, recording 24-hour volume of 355k BTC versus Deribit’s 5k. Exchangewar.info notes Deribit’s lower fees, and there is also less controversy surrounding its margin trading – for now at least. No matter how reputable the platform traders choose, or how good its uptime, it should be acknowledged that derivatives trading is a dangerous business in which a handful of pros profit massively and the remainder are lucky to walk away with their initial stake.
https://news.bitcoin.com/synthetic-bitcoin-is-100x-more-lethal-than-the-real-thing/
Also read: Hydroelectric Dam in New York Repurposed as Crypto Mining Farm
Derivatives Trading Is a Hazardous Pursuit With Little Margin for Error
Bitcoin investing is often portrayed as navigating a bumpy road, with each trough and pothole invoking a rallying cry to “Hodl” and persevere till the finish line. If the analogy is accurate, then derivatives trading is like speeding down that road on a motorbike at 160 mph. One false move – a flash crash here; a DDoS there – and it’s game over. Hit a pothole as a hodler and all you’ll lose is some USD off your portfolio. Do the same on 100x leverage and you’ll be liquidated on the spot. Trading synthetic assets, particularly on high leverage, is not for the faint-hearted. Nor is it for the inexperienced.
Synthetic Bitcoin Is 100x More Lethal Than the Real Thing
A handful of Bitmex traders have gotten very rich indeed
There are three types of synthetic options available to bitcoin traders: futures, derivatives, and margin. Some platforms, such as Bitmex, Whaleclub, and Deribit, offer all three. Traditional exchanges such as Bitfinex, Hitbtc, and Poloniex offer margin trading only, and then there’s the likes of Okcoin which offers futures and margin but no derivatives. Here’s how the three options play out:
Futures: A type of derivative contract that can include leverage of up to 100x, futures are an agreement to buy or sell an asset – in this case synthetic BTC – at a future date for a certain price.
Derivatives: A type of contract whose value is derived from that of another asset. On sites like Bitmex, it’s possible to trade options, swaps, and futures – all types of derivatives – with the possibility of higher returns thanks to leverage which multiplies the potential profit or loss, depending on how the trade goes.
Margin: A type of trade in which money is borrowed from a broker with the expectation that they will be repaid upon generating a profit. A minimum level of equity must be maintained on the platform, typically around 30%, to cover losses. If the balance falls below this, additional funds must be covered to account for the shortfall.
Derivatives Can Be Dangerous
Synthetic Bitcoin Is 100x More Lethal Than the Real ThingCrypto Twitter and Telegram channels are filled with tales of woe from leveraged traders who got stopped out and had their position liquidated. If conventional trading is cocaine-like in its addictiveness, high leverage is crack cocaine. One of the biggest gripes for traders, particularly on Bitmex, is those unexpected events that can wreck even the best laid plans. Even experienced traders are taking a huge risk, over and above those associated with bitcoin’s ‘natural’ movements. DDoS attacks, downtime, log-in errors, and sudden price spikes have caused traders to lose everything. When such events conspire, there is little recourse, for complaining to the Seychelles-registered Bitmex will get you nowhere.
As discontent with Bitmex has grown, Deribit has welcomed traders with open arms. It professes to offer faster trade execution than Bitmex, but with only 50x leverage versus its rival’s 100x. Bitmex is still the whale in the derivatives market by some distance, recording 24-hour volume of 355k BTC versus Deribit’s 5k. Exchangewar.info notes Deribit’s lower fees, and there is also less controversy surrounding its margin trading – for now at least. No matter how reputable the platform traders choose, or how good its uptime, it should be acknowledged that derivatives trading is a dangerous business in which a handful of pros profit massively and the remainder are lucky to walk away with their initial stake.
https://news.bitcoin.com/synthetic-bitcoin-is-100x-more-lethal-than-the-real-thing/
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