The Bitcoin Thread

[CTBP]

There is no single "bitcoin price" really. Just a ballpark figure of what you can expect to pay at several exchanges. There will pretty much always be a price difference due to the currencies different exchanges, liquidity, how easy it is to arbitrage between them etc. Even on the big dollar based exchanges there can be huge gaps at times.

Fair enough, I still have lots to learn regarding BTC.

 

[C4Cat]

Bitcoin is USD based and so if you want to buy BTC you have to go via USD and you cannot buy dollars at that rate. That rate is an average rate of buying and selling dollars. Also there will probably be bank fees thrown in.

This is incorrect. Bitcoin is NOT USD based, it is not based on any currency. You can buy BTC in ZAR but there is no standard price - you pay what sellers are willing to sell for.

 

[Knyro]

Last year when it was $350 ish. More or less Feb/March 2016

I din't get in here because of the long bear market after the Mt. Gox hack and I missed the rise in early 2016.

I wasn't going to make that mistake a second time though and got in shortly after the Bitfinex hack.

It was coins for sale after that

 

[balky]

This is incorrect. Bitcoin is NOT USD based, it is not based on any currency. You can buy BTC in ZAR but there is no standard price - you pay what sellers are willing to sell for.

When I said USD based, what I meant was the official exchange rate is in USD. Yes you can buy in other currencies, but the cost of converting those currencies to USD is factored into the price.

 

[Knyro]

When I said USD based, what I meant was the official exchange rate is in USD. Yes you can buy in other currencies, but the cost of converting those currencies to USD is factored into the price.

No it isn't. There is no "official exchange rate", bitcoin is not officially priced in USD like say oil.

Example: A miner in China mines 1 bitcoin and sells in on a Chinese exchange for [x] yuan, all transactions on that exchange will be in yuan, even for foreigners. Nowhere does the USD play a factor, however arbitrage will have an evening out effect across exchanges world wide.

The bitcoin USD price is just the most popular way of showing the value of bitcoin in the Western media.

 

[balky]

No it isn't. There is no "official exchange rate", bitcoin is not officially priced in USD like say oil.

Example: A miner in China mines 1 bitcoin and sells in on a Chinese exchange for [x] yuan, all transactions on that exchange will be in yuan, even for foreigners. Nowhere does the USD play a factor, however arbitrage will have an evening out effect across exchanges world wide.

The bitcoin USD price is just the most popular way of showing the value of bitcoin in the Western media.

Point taken, but my explanation for the discrepancy in the dollar rate and the price on Luno still stands (as asked by dj2381).
If for example you wanted to buy bitcoin from someone in China, they wouldn't be interested in Rands, so you would have to covert to Yuan, and to do that you would have to use the Yuan buying rate (not the average rate) plus fees. So you would land up paying more in Rands than the bitcoin rate X R/Yuan rate.

 

[Mr Scratch]

arbitrage

 

[Knyro]

Point taken, but my explanation for the discrepancy in the dollar rate and the price on Luno still stands (as asked by dj2381).
If for example you wanted to buy bitcoin from someone in China, they wouldn't be interested in Rands, so you would have to covert to Yuan, and to do that you would have to use the Yuan buying rate (not the average rate) plus fees. So you would land up paying more in Rands than the bitcoin rate X R/Yuan rate.

Your explanation makes no sense. You are buying from people who are interested in getting rands on Luno.

So if we assume, I'm buying on Luno from somebody that originally got their bitcoin in dollars, that means that they transferred their bitcoin in from somewhere else and paid very little transfer fees. That still would not account for the huge price difference. You can measure other big exchanges from other countries and you won't get that much of a gap. The reason (I'd guess) is that there isn't as much arbitrage going on with Luno.

Their 24 volume is only 289 BTC today. The dollar exchanges do thousands/tens of thousands of BTC easily and even crack 100k from time to time.

Luno is not as liquid as the big exchanges, which means there is less competition and incentive to sell at a lower price.

 

[Knyro]

arbitrage

Yes, arbitrage is the main reason why bitcoin prices never get too far away from each other otherwise everybody would game the the system to make 100% guaranteed profit. There are of course people that do but you need a hell of a lot of capital otherwise it's just not worth it.

 

[balky]

Your explanation makes no sense. You are buying from people who are interested in getting rands on Luno.

So if we assume, I'm buying on Luno from somebody that originally got their bitcoin in dollars, that means that they transferred their bitcoin in from somewhere else and paid very little transfer fees. That still would not account for the huge price difference. You can measure other big exchanges from other countries and you won't get that much of a gap. The reason (I'd guess) is that there isn't as much arbitrage going on with Luno.

Their 24 volume is only 289 BTC today. The dollar exchanges do thousands/tens of thousands of BTC easily and even crack 100k from time to time.

Luno is not as liquid as the big exchanges, which means there is less competition and incentive to sell at a lower price.

Lets look at an example. I know Luno does not operate in the US, but let's assume it does (we can use any country).
Assume that 1BTC = $1000 and 1$ = R13.00 (on XE for example)
If John in the USA wants to sell 1BTC and I want to buy it, John will expect $1000.
That means that Luno has to be in a position to deposit $1000 into John's bank account.
I can assure you that John will not accept R13000.
Luno has to now buy $1000 dollars with Rands.
I can also assure you that Luno will not pay R13000 for the $1000.
Luno will have to apply the bying rate + fees, and also fees to transfer this money to the USA.
On XE for example, they will show the average $/R rate without any fees.
So I will have to pay a lot more than R13000.

Even though Bitcoin is universal, once you start using exchanges that use fiat currencies, then the fiat currency rules apply.
I agree there will be short term discrepancies between various exchanges, but a major reason for Luno being higher is my explanation above.

 

[Knyro]

Lets look at an example. I know Luno does not operate in the US, but let's assume it does (we can use any country).
Assume that 1BTC = $1000 and 1$ = R13.00 (on XE for example)
If John in the USA wants to sell 1BTC and I want to buy it, John will expect $1000.
That means that Luno has to be in a position to deposit $1000 into John's bank account.
I can assure you that John will not accept R13000.
Luno has to now buy $1000 dollars with Rands.
I can also assure you that Luno will not pay R13000 for the $1000.
Luno will have to apply the bying rate + fees, and also fees to transfer this money to the USA.
On XE for example, they will show the average $/R rate without any fees.
So I will have to pay a lot more than R13000.

Even though Bitcoin is universal, once you start using exchanges that use fiat currencies, then the fiat currency rules apply.
I agree there will be short term discrepancies between various exchanges, but a major reason for Luno being higher is my explanation above.

Completely wrong.

Luno doesn't have to buy anything, he's trading with you, not them.

He buys a bitcoin in the USA, transfers it to his Luno account, where he sells it to you, Luno just facilitates the trade.
He gets X rand in his Luno account.
You get a bitcoin in your Luno account, from John, not Luno.
If he wants to convert his money to another currency any forex costs are his problem, not Luno's.

The exchanges don't set the prices, the traders do. The exchange is just a meeting place for traders.

 

[balky]

Completely wrong.

Luno doesn't have to buy anything, he's trading with you, not them.

He buys a bitcoin in the USA, transfers it to his Luno account, where he sells it to you, Luno just facilitates the trade.
He gets X rand in his Luno account.
You get a bitcoin in your Luno account, from John, not Luno.
If he wants to convert his money to another currency any forex costs are his problem, not Luno's.

The exchanges don't set the prices, the traders do. The exchange is just a meeting place for traders.

Luno operates in South Africa, England and Singapore (as far as I know). Are you saying that someone in England trading on Luno will see the prices in Rands? Even if that is the case (which I doubt) how will someone in England get Rands if they sell BTC?

 

[Knyro]

Luno operates in South Africa, England and Singapore (as far as I know). Are you saying that someone in England trading on Luno will see the prices in Rands? Even if that is the case (which I doubt) how will someone in England get Rands if they sell BTC?

I don't see why not. They'll get rands in their Luno account, not their bank account.

You'll have to ask them what currency they see prices in but for example I'll use Bitfinex. If I want to sell a bitcoin on Bitfinex, I'll get X dollars in my Bitfinex account. Now oviously for me to use this money I'll have to then transfer it to my SA bank account, which is in rands, and incur forex costs.

Bitfinex doesn't give a damn about said costs, they already made their money from trading fees.

This goes for all non-Americans trading on Bitfinex.

 

[balky]

Luno doesn't have to buy anything, he's trading with you, not them.

Yes he's trading with me but Luno has to facilitate the trade. Fiat currencies don't magically get transferred through a website. The bankers get involved.

 

[balky]

I don't see why not. They'll get rands in their Luno account, not their bank account.

You'll have to ask them what currency they see prices in but for example I'll use Bitfinex. If I want to sell a bitcoin on Bitfinex, I'll get X dollars in my Bitfinex account. Now oviously for me to use this money I'll have to then transfer it to my SA bank account, which is in rands, and incur forex costs.

Bitfinex doesn't give a damn about said costs, they already made their money from trading fees.

This goes for all non-Americans trading on Bitfinex.

Non Americans trading on Bitfinex would have to have an American bank account. Then the currency conversion is their problem. But as I mentioned Bitcoin operates on the USD, so someone in South Africa would have to first move rands to his US account before he can buy on Bitfinex, and fees then apply.

 

[Knyro]

Non Americans trading on Bitfinex would have to have an American bank account. Then the currency conversion is their problem. But as I mentioned Bitcoin operates on the USD, so someone in South Africa would have to first move rands to his US account before he can buy on Bitfinex, and fees then apply.

No they don't. You clearly have zero idea how bitcoin exchanges work. I suggest you do some research.

 

[Mr Scratch]

Non Americans trading on Bitfinex would have to have an American bank account. Then the currency conversion is their problem. But as I mentioned Bitcoin operates on the USD, so someone in South Africa would have to first move rands to his US account before he can buy on Bitfinex, and fees then apply.

Bitcoin was also made by Donald Trump himself to launder his fortune out of the US without paying tax. It's obviously why he hasn't released them to the public yet...

 

[Thor]

Does anyone have success setting up a dash wallet on a windows machine?

Mine does not seem to want to sync on the windows machine.

 

[balky]

No they don't. You clearly have zero idea how bitcoin exchanges work. I suggest you do some research.

Well then explain to me how I can trade on Bitfinex with Rands then? And if you can, then explain how I can get an exchange rate of R13.10 (current rate on XE).

 

[Thor]

Well then explain to me how I can trade on Bitfinex with Rands then? And if you can, then explain how I can get an exchange rate of R13.10 (current rate on XE).

You can trade with rands on bitfinex? First time I hear this.