Baltic Oil Terminals Share Discussion Threads

[patientcapital] 11/12/2017 07:37

So, as with market indices, the futures price did point the way. Always does. Tail now wagging the dog.

[spadman] 11/12/2017 05:45

no dice10 Dec '17 - 22:38 - 3374 of 3378 0 0
A commodity spot price buys me that commodity now. A future contract gets me the commodity at an agreed price on an agreed future date.

Except it is cash settled.

[steve73] 11/12/2017 03:35

I've copied my comments on bitcoin electricity cost that I made yesterday on the SHA thread below, as its more relevant here, and hopefully will encourage further discussion.

>>>>

Steve73 10 Dec '17 - 11:23 - 75042 of 75051

Blockchain may use loads of electricity, but I doubt it would be more than the existing methods of contract validations, that require actual people travelling to and working in back-offices, updating the ledgers, etc, etc, etc.

Generally speaking, the lower the cost of something (anything) the less total energy it consumes, since almost everything can be costed in terms of energy usage.

But of course, total energy usage usually increases to consume whatever is available.

>>>>>

Thinking more on the subject - and making an analogy to other commodities.....

It's the cost of extraction (mostly ultimately energy) that determines how much (for example) gold is mined. If energy is cheap, then it's feasible to mine poorer quality ores.. therefore as the price of gold increases, it becomes economic to expend more energy in mining poor quality ore to increase the supply...which will have a feedback affect on the gold price (unless demand increases).

Now for Bitcoin mining (and I'm assuming its similar for other CCs - well engaged erik..!) the benefits of mining reduce as we near the maximum number, and so to keep the "back-office" network of computers running, the fee charged per transaction must increase (or they'll simply refuse to process the transactions).
Ultimately it's the energy cost of processing those transactions that will determine it's fee. As the actual value of each BC mined increases, the fees can be reduced, but if the price of BC drops significantly, the value from mining new coins reduces, and so the fee charged increases. The penalty of paying low fees is slower confirmation times as fewer miners offer to validate each transaction.

Sending BCs from one location (or trading platform) to another (such as a personal wallet) usually takes around 10 minutes to get the 3 confirmation necessary, but can be much longer at busy times. Since exchange trading on various platforms is almost instantaneous, I'm assuming that the block-chain does not get updated.

It's this delay that will limit its use as a "cash replacement" trading tool, unless exchanges are restricted to within platforms, eg. localbitcoins is a great system for allowing its users to exchange BCs at zero cost.

So far there are around 16.9MM coins in existence. The current rate of creation of new coins (on a per block basis), is expected to continue until sometime around Nov-2019 (when there will have been 18.375MM created), at which point the "reward" per block will be halved, and so the fee will probably increase significantly (or the confirmation delay will increase.

The last time the reward got halved was on 9-July-2016, at which point there were a few "wobbles" in the share price

Of course, by 2019, there may well have been a much more efficient (in terms of energy requirement) CC developed and in use.

It always comes down to the money... sorry, errr ENERGY.

[thegrumpster] 10/12/2017 23:09

Edit 11.12.17

If someone wants to bet against BTC, they will want to make an absolute killing first time. If confidence is really trashed, its possible that bitcoin might never spike up so high again. (Even with lower energy mining)

Initially it might be hard to find someone to take a "killer bet",as everyone will be waiting to see how it pans out.

Perhaps the ideal is for a small slump followed by a recovery to greater heights so that bitcoin supporters think their investment has seen off the the best of the shorters and seems bulletproof.

Throw in a few statements from the great and the good that on past performance bitcoin could reach $80-100,000 in 2018 and it would be business as usual.

70% of bitcoin is mined in China. China will likely experience the results of syphoning off large quantities of power before the US. They will end up with the bitcoin (that will be eventually worthless IMO) but the will also have the energy shortages.

That might be a good reason to leave any "move" against bitcoin for as long as possible. (Some sort of energy politics going on?)

".....Bitcoin is slowing the effort to achieve a rapid transition away from fossil fuels. What's more, this is only the beginning. Given its rapidly growing climate footprint, bitcoin is a malignant development..."


hxxps://www.buybitcoinworldwide.com/mining/china/

[patientcapital] 10/12/2017 22:43

Wall Street was hardly just going to sit by and passively watch the action whilst being made to look like fools.You can bet numerous official authorities will be formulating their strategies too.

[no dice] 10/12/2017 22:38

A commodity spot price buys me that commodity now. A future contract gets me the commodity at an agreed price on an agreed future date. Sadly no amount of money can guarantee me the purchase of a white Christmas - there's no other party to agree to the exchange!

[alexx] 10/12/2017 22:35

erik

the white Christmas analogy simply doesn't reach that far - no amount of prior bets could change the result in that case, with bitcoin it may at least be possible

I find it difficult to believe that the CME's motive is not to influence the price. But just imagine that bitcoin moves $2000 from Friday close to Monday morning, what a mess.

[eriktherock] 10/12/2017 22:10

If the bookies initially offer say 10/1 on a white Christmas and enough people take the bet and the bookies progressively reduce the odds to say evens. Is not a white Christmas more likely ?

[no dice] 10/12/2017 22:02

If the one month contract on BTC is being struck at say $40k then I'm guessing the spot-price of Bitcoin might just move up a little maybe? Conversely if it is $5 then the spot-price is pretty likely to go down.

In just under an hour all will be revealed!

[spadman] 10/12/2017 21:54

The futures are cash settled at the price Bitcoin trades for on exchanges. How can that effect the price? All it can do is spread awareness and pave the way for ETF approval which will massively expand demand.

All the people in the world can bet bitcoin goes down but if buyers outnumber sellers on exchanges the price will only go up.

Placing a bet on a White Christmas doesn't make it any more likely it will snow.

[no dice] 10/12/2017 21:44

There isn't any collateral involved and as the contracts are cash settled there are no Bitcoin to be delivered. At expiry of the contract the losing party simply pays the other party the difference between the contract price and the spot price.

[sideshowbull] 10/12/2017 20:55

Unless some FKwit has offered his BTC as collateral.

I think BTC will win in the end but it is going to be butt clenching for + 3-9 traders.

I am holding the rest of what I have.

BWTFDIK

sideshow

[no dice] 10/12/2017 20:37

Futures aren't going to change the decentralised nature of BTC - they just offer an exchange on a future date as opposed to the spot-price-only exchanges that exist today.

[no dice] 10/12/2017 20:27

The Cboe BTC futures will provide a price for BTC at one, two and three months out, visible to all. That visibility doesn't exist on a spread betting platform.

[mcbeanburger] 10/12/2017 19:58

you really think ig is a global market?

[spadman] 10/12/2017 19:43

How will it impact anymore than spread betting on IG?

[sideshowbull] 10/12/2017 19:25

The whole point of Bitcoin BTC, is to be absolutely decentralised.

If you think that futures via cash settlement won't impact on BTC you are wrong.

It will and it is so sad for BTC.

Unless all major Hodlers just hodle.

BWTFDIK

[mcbeanburger] 10/12/2017 19:18

cc - yes esp ones being made up as they go along

[eriktherock] 10/12/2017 19:11

I hate acronyms. I was going to post the same question re cc's. Then i engaged the grey matter and deduced crypto currencies. Could be wrong. oao

[spadman] 10/12/2017 18:52

First Gold ETF launched in March 2003, prices went from 320 to over 1800

[mcbeanburger] 10/12/2017 17:29

another way to control via shorting. pm etf's has had a negative effect overall (not to mention questionable storage/management - lending phys to allow for shorting).

[spadman] 10/12/2017 17:10

ETFs had a very positive impact on metals, like a ten year bull run. Why do you say ETFs will be negative when it offers another gateway into the market?

[mcbeanburger] 10/12/2017 15:58

i assume cboe will be using btc as btc and not bch. bch could rise perhaps.

in fact anything not btc might be more successful