Market 2017-12-11 & Bitcoin

Santa Rally continues, lead by Tech.

Crude +1.08% to $57.98. Gold -0.31% to $1,244.50.

It is observed that money flows from Gold to Bitcoin as BTC future started to be traded from Sunday.

Winners

OSTK +22% bitcoin fever.

AAPL +2%, iphone X can be shipped in 3-4 days if you order now. I am not sure if this is a good indicator. AAPL lifted QQQ +0.8%. Also  NVDA +1.7%, TWTR +4.5% (people like the double-sized version).

DIS +2.5%, close to reach deal with FOX.

GILD +2.2%, CELG +1.8%. 

LC +10.8%. Bounces back from the selloff on investors day.

My Trades Today

Exit QD, sold the rest @ $14.5.

Bitcoin

Bitcoin is decentralized, peer-to-peer, "cryptocurrency". The core is blockchain technology. Advantage: low inflation, fast and low fee transaction with no purchase tax, user anonymity. Bitcoin payments are processed through a private network of computers linked through a shared program. Each transaction is simultaneously recorded in a "blockchain" on each computer that updates and informs all accounts.

Bitcoin mining: miner runs the program (as gold miners dig), once the miner find a new block (as finding a piece of gold), he/she is rewarded by certain amount of BTC. The block reward is halved every 210,000 blocks, or roughly every 4 years. The block reward started at 50 in 2009, is now 12.5. Currently, 3/4 of possible BTC has been mined as the limit was been set when BTC was introduced. Everybody can be miner. For example, a single facility in China operates more than 25,000 computers for the mining of Bitcoin. These computers use more than $40,000 worth of electricity per day. Besides electricity, GPU (NVDA and AMD) is also in high demand.

Risks:

 1. There are no regulations so far in most of the countries. Governments lose certain tax revenue and tracks of financial activities. It is widely believed BTC is used for money laundry and illegal activities. It is not surprising because some law makers cannot even use smartphone. It is impossible for them to understand cryptocurrency. As blockchain gets popular, there will be regulations for sure. Nobody knows how damaging the regulations would be.

2. If you forget the private key, you lose the received BTC. It is not only lost in your account, it is lost for the whole supply --- nobody can recover it.

3. Hackers are definitely excited. Accidents have been reported from time to time.



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