I’m a big fan of Bitcoin and over the years made many more buys than sells – in a nutshell, my default position, whether the market has gone up or down, has been to HODL.
However, that is starting to change – despite my view that I believe Bitcoin will go up in value hugely in the future. I am a long term Bitcoin bull and think that it will beat its all time high in the next few years.
In the short term, though, there’s no getting away from the fact that Bitcoin is going down. Despite a few rallies and spikes it has been dropping pretty consistently since the New Year, and now has half the value it did then (£5k vs £10k).
2018 Bitcoin Price on Trading View (Image: BIUK)
I had got used to the price of Bitcoin going steadily down and hadn’t thought too much about it. I had bought most of mine at £1k – £3k so I wasn’t bothered. Then on 25th July everything changed for me.
Oddly what woke me from my stupor was an email from BullionByPost telling me that the Gold price was beginning to climb. Was it particularly low, I wondered? I idly looked into it and found that, incredibly, at £935/ounce (spot price) it was at the lowest it had been for 8 months, and very nearly the lowest it had been for 18 months.That woke me up. Here I was sitting on a stack of Bitcoin slowly decreasing in value while missing out on other investments. Being a keen proponent of hedging, this made no sense.
I Immediately looked into the Bitcoin price, which I had ignored for some time, and saw that it had been rising, erratically, for exactly a month to a peak of £6400 but since 6am that morning (25th) had been dropping sharply. It was now mid evening.
Bitcoin Price on Trading View from 27 June to 27 July (Image: BIUK)
I took one Bitcoin out of cold storage (on a Ledger Nano) and transferred it to Pro.Coinbase. As soon as the transaction went through, at about 1130pm, I sold it. I got £6300.
By 0020 I had bought 7 one ounce gold coins for an average of £976 each. The total was £6343. That seemed like a very good hour’s work.
Just 36 hours later the value of Bitcoin had sunk to £6000. I decided it was time to start active trading again, if only to hedge against what seemed like inevitable losses if I kept staying out of the market.
I came up with a plan to offload Bitcoin at the best price I could get, ready to buy it back once it had gone lower.
In 1987’s Black Monday stock market crash, Sam Walton, the world’s richest man, lost more than half a billion dollars in a few hours.
When reached for comment, Walton said, “It’s paper anyway. As far as I’m concerned we’re focusing totally on the company doing well and taking care of our customers.”
He didn’t care about dollars; he cared about his asset Wal-Mart, and he still owned that.
History of the #HODL
In bitcoin’s volatile and roller coaster past, “HODL” was the meme that bound the cryptocurrency community together. It stood for the proposition that we all believe in the future of bitcoin. It’s both funny and insightful.
Bitcoin Cryptocurrency (Image: MaxPixel)
Here is the original post by GameKyuubi on a Bitcoin Talk forum (spelling errors and profanity included):
I AM HODLING
I type d that tyitle twice because I knew it was wrong the first time. Still wrong. w/e. GF’s out at a lesbian bar, BTC crashing WHY AM I HOLDING? I’LL TELL YOU WHY. It’s because I’m a bad trader and I KNOW I’M A BAD TRADER. Yeah you good traders can spot the highs and the lows pit pat piffy wing wong wang just like that and make a millino bucks sure no problem bro. Likewise the weak hands are like OH NO IT’S GOING DOWN I’M GONNA SELL he he he and then they’re like OH GOD MY ASSHOLE when the SMART traders who KNOW WHAT THE FUCK THEY’RE DOING buy back in but you know what? I’m not part of that group. When the traders buy back in I’m already part of the market capital so GUESS WHO YOU’RE CHEATING day traders NOT ME~! Those taunt threads saying “OHH YOU SHOULD HAVE SOLD” YEAH NO SHIT. NO SHIT I SHOULD HAVE SOLD. I SHOULD HAVE SOLD MOMENTS BEFORE EVERY SELL AND BOUGHT MOMENTS BEFORE EVERY BUY BUT YOU KNOW WHAT NOT EVERYBODY IS AS COOL AS YOU. You only sell in a bear market if you are a good day trader or an illusioned noob. The people inbetween hold. In a zero-sum game such as this, traders can only take your money if you sell.
so i’ve had some whiskey
actually on the bottle it’s spelled whisky
w/e
sue me
(But only if it’s payable in BTC)
It was not about bitcoin versus bitcoin cash or 1,000 other cryptocurrencies. It was bitcoin vs. the world and we ALL embraced it.
It only took 11 minutes for this post to become a meme that became the rallying cry for the entire crypto world. We were all on the same rollercoaster ride and GameKyuubi, in the depths of his frustration, had (sort of) elegantly articulated both what it feels like and the best trading strategy for an asset this volatile.
The answer is: it depends. There’s a wide range. Based on my model you can make as little as $900 or as much as $2 million in 1 year. It depends on a variety of factors including: the original claim amount, the number of times you claim a day, the number of referrals you have, the number of times your referrals claim a day, loyalty days and a number of other factors, not to mention the price of crypto.
I had to create a calculator to figure it all out. Within the calculator I’ve created scenarios that help to understand how the different factors above can impact your daily claim amount. These scenarios are labeled min, mid and max. The min scenario represents the person who puts forth the least amount of effort. The max scenario models out the power user with the highest amount of activity. The mid scenario is somewhere in between.
Here’s a quick slide to help explain each scenario:
In other words, Min activity is just mailing it in with one click a day. Mid activity is someone with 100 referrals making between 25 and 48 claims a day, and Max activity is someone who’s maxing out every claim. I like to the think of Min as a lower limit, Max as an upper limit and Mid as an average.
Next, I annualized the daily claim amount from each faucet calculator under each scenario, made a forecast of crypto currencies one year from today and these are the results.
The Results
The first set of results provides an estimate of how much you can make if crypto prices remain the same as they are today.
As you can see from the boxes highlighted in yellow, the minimum amount you can make is around $900, the middle point is around $10K and the max is almost $70K.
1 year estimate of what you can make using Coinpot faucets based on current cryptocurrency prices
So, another way to interpret the results is:
If you’re just mailing it in with 1 claim a day for the rest of the year and have no referrals, you can make $900, providing prices remain the same.
If you make 24–48 claims per day with 100 referrals doing the same thing, you can make $10K, providing prices remain the same.
If you make max claims per day (58–288) with 500 referrals doing the same thing, you can make $70K, providing prices remain the same.
The thing about crypto is that the price does not stay the same. As much as I like free money I wouldn’t be advising you to do this for $900 a year?—?though that’s nothing to sneeze at, especially if it’s free. Early investors of Bitcoin paid just $.06 for a Bitcoin. A $100 investment seven years ago would be worth $28 million today. It is highly unlikely that crypto prices in one year will be what they are today.
What if crypto prices grew 30% on average? The following chart shows what happens to the value of your crypto holdings if crypto prices at the end of 2018 are 30% higher than they are today.
1 year estimate of what you can make using Coinpot faucets based on 30% increase in cryptocurrency prices
If you’re just mailing it in with 1 claim a day for the rest of the year and have no referrals, you can make $1,100 with a 30% increase in prices.
If you make 24–48 claims per day with 100 referrals doing the same thing, you can make ~$13K with a 30% increase in prices.
If you make max claims per day (58–288) with 500 referrals doing the same thing, you can make ~$90K with a 30% increase in prices.
This is amazing, but again, I wouldn’t be telling you to do this for $1,100. The reason people are interested in cryptos, the reason why people are taking out a mortgage on their home (DO NOT DO THAT) to invest in cryptocurrency is because of the exponential growth rates. Bitcoin, Dash, Litecoin and Dogecoin all grew by 1326%, 5935%, 5215% and 3916%, respectively, over the last year (Bitcoin Cash just started in late July/early Aug.).
This is amazing growth and there’s a chance it won’t ever happen again, but cryptos have been on a growth trend for the past five years so I don’t think last year was a fluke. Here’s a chart showing the pace of growth in the crypto market over the last 5 years.
Cryptocurrencies have grown exponentially over the last five years
As you can see, market capitalization grew from $8.8 billion in 2013 to $221 billion in 2017. 2014 was a bad year, but all other years saw phenomenal gains. Now that the word is out about the use value of cryptos, I believe the growth trend will continue to grow exponentially.
So what if the cryptos in your Coinpot portfolio grow at the same level they grew at last year in 2018? These are the results:
If you’re just mailing it in with 1 claim a day for the rest of the year and have no referrals, you can make $13K if prices grow the same rate as they did last year.
If you make 24–48 claims per day with 100 referrals doing the same, you can make ~$240K if prices grow the same rate as they did last year.
If you make max claims per day (58–288) with 500 referrals doing the same thing, you can make ~$2 million if prices grow the same rate as they did last year. Note: there is no max on referrals so this could be higher.
Cryptos may not be able to keep up the bull run they had last year, but if they do it means you could be sitting on a nice portfolio of crypto by the end of the year without spending a dime.
Here’s a quick overview slide of all three price scenarios.
The amount you make depends on the level of activity of you and your referrals
No matter what the scenario, in terms of activity level or price, Coinpot is a great way to invest in cryptocurrency without incurring any risk. It’s also great for people that are new to the cryptocurrency world. You don’t have to buy anything or set anything up. It’s all been done for you and it’s all free. All you need is a computer and an email address. To be clear, not all faucets are like Coinpot, so be careful. The reason I chose Coinpot for this experiment is due to its ease of use and credibility. I’m currently working on a few others and will send out a post when that happens.
How To Sign Up For & Maximize Coinpot Faucets
So now that you see the potential, these are the steps to sign up and get started:
Step 1: Sign up for a Coinpot MicroWallet (https://coinpot.co/). This is where each faucet will send your “claim”. When you reach your withdrawal minimum, you will want to move your crypto currency from your software wallet (CoinPot) to another wallet.
Step 2: Sign up with each of the following faucets. Each one of these faucets is already connected to your Coinpot MicroWallet. As long as you sign up with the same email address you used to sign up for your Coinpot, they are automatically connected. Play around with each faucet a bit to get a feel for how this works. Please use my referral codes to sign up for the faucet.
Step 3: Optimize your claim amount on each faucet. I’ve modeled out the performance of each faucet.
Each faucet has its own incentive structure. In general there are two different structures. Your goal is to maximize the claim by paying attention to rewards:
This is a unique faucet. It pays out in Bitcoin. It is the only incentive structure with 5 different bonus categories. Each bonus category gives you the ability to double your claim amount. It also pays at 50% for referrals. This makes Moon Bitcoin one of the best opportunities in the Coinpot faucet network. In addition to referrals, Moon Bitcoin also rewards the following:
1) Loyalty bonus?—?Action: make a claim at least once a day. This is the easiest bonus. All you have to do is make a claim every day and you get a bonus. If you miss a day, it resets back to 1 and you have to walk up to 100% again.
2) Referral bonus?—?Action: refer at least 100 people to take full advantage of the referral bonus.
In addition to getting 50% of your referral’s claims, you also get a 1% bonus for every person you sign up?—?up to 100%. This bonus has a ceiling of 100 people, but your referral commission does not.
3) Offer Bonus?—?Action: do 10 offers to take full advantage of the 100% claim bonus. This bonus has a ceiling of 10 offers.
4) Mystery Bonus?—?Do nothing and earn this bonus.
5) Mining Bonus?—?Mine on your computer for a 100% bonus depending on your hash rate. This is new.
There’s one other thing that is absolutely critical in your claim amount. This is true for all 6 faucets?—?the number of times you claim can drastically increase your daily claim amount. For example, based on the current claim rate which is published on the Moon Bitcoin site, if you claim every 5 minutes for 4 weeks you get 16,128 satoshi (assuming no referrals or bonus opportunities). However, if you claim every 4 weeks you get 111 satoshi.
The key to optimizing this faucet is to claim every 25 minutes or so. This is the max out time, not 5 minutes. This may change, but current claim rates show that there is no benefit to claiming at smaller time intervals. You don’t start to make less satoshi until you wait for 30 minutes or more. So you can claim more often, but you won’t make any more than if you claim every 25 minutes (I say 25 because you don’t want to wait until the last minute). This makes MoonBitcoin one of the easier Moon faucets to reach maximum claims on. If you can’t claim every 25 min, at least claim once a day for the loyalty bonus. You want to do 10 offers to take advantage of the offer bonus. You can also get a bonus for mining on your computer. Focusing on these actions can greatly increase your claims.
Moon Dogecoin is like Moon Bitcoin, but pays out in Dogecoin. All the Moon faucets have the same basic structure, but not as many bonus options.
1) Loyalty bonus?—?Action: make a claim at least once a day. This is the easiest bonus. All you have to do is make a claim every day and you get a bonus. If you miss a day, it resets back to 1 and you have to walk up to 100% again.
2) Referral bonus?—?Action: refer at least 100 people to take full advantage of the referral bonus. In addition to getting 25% (not 50% like Moon Bitcoin) of your referral’s claims, you also get a 1% bonus for every person you sign up?—?up to 100%. This bonus has a ceiling of 100 people, but your referral commission does not.
3) Mystery Bonus?—?Do nothing and earn this bonus.
The key to optimizing this faucet is to claim every 25 minutes or so. This is the max out time, not 5 minutes. This may change, but current claim rates show that there is no benefit to claiming at smaller time intervals. You don’t start to make less dogecoin until you wait for 30 minutes or more. So you can claim more often, but you won’t make any more than if you claim every 25 minutes. I say 25 min because you don’t want to wait until the last minute. If you can’t claim every 25 min, at least claim once a day for the loyalty bonus. This makes MoonDoge one of the easier Moon faucets to reach maximum claims on. You want to refer at least 100 people to take advantage of the referral commission and max out on the 1% per referral bonus. Focusing on these actions can greatly increase your claims.
Moon Litecoin is the same as Moon Dash (see below), but it pays out in Litecoin. Though it has a similar bonus structure to MoonDoge and MoonBitcoin, it requires more claims to max out.
1) Loyalty bonus?—?Action: make a claim at least once a day. This is the easiest bonus. All you have to do is make a claim every day and you get a bonus. If you miss a day, it resets back to 1 and you have to walk up to 100% again.
2) Referral bonus?—?Action: refer at least 100 people to take full advantage of the referral bonus. In addition to getting 25% (not 50% like Moon Bitcoin) of your referral’s claims, you also get a 1% bonus for every person you sign up?—?up to 100%. This bonus has a ceiling of 100 people, but your referral commission does not.
3) Mystery Bonus?—?Do nothing and earn this bonus.
The key to optimizing this faucet is to claim at least once a day for the loyalty bonus. To maximize this claim you need to claim every 5 minutes or 288 claims per day which is the highest of any faucet except Moon Dash. This makes MoonLitecoin and MoonDash slightly harder than the other Moon faucets, but not by much. You want to refer 100 people to ms of the 25% referral commission and max out on the 1% per referral bonus. Focusing on these actions can greatly increase your claims.
Newest faucet. The bonus structure is the same as MoonDoge and MoonLitecoin, but pays out in Bitcoin Cash. You can optimize your daily claims by doing the following:
1) Loyalty bonus?—?Action: make a claim at least once a day. This is the easiest bonus. All you have to do is make a claim every day and you get a bonus. If you miss a day, it resets back to 1 and you have to walk up to 100% again.
2) Referral bonus?—?Action: refer at least 100 people to take full advantage of the referral bonus. In addition to getting 25% (not 50% like Moon Bitcoin) of your referral’s claims, you also get a 1% bonus for every person you sign up?—?up to 100%. This bonus has a ceiling of 100 people, but your referral commission does not.
3) Mystery Bonus?—?Do nothing and earn this bonus.
The key to optimizing this faucet is to claim every 25 minutes or so. This is the max out time, not 5 minutes. This may change, but current claim rates show there is no benefit to claiming at smaller time intervals. You don’t make less satoshi until you wait for 30 minutes or more. So you can claim more often, but you won’t make any more than if you claim every 25 minutes. I say 25 min because you don’t want to wait until the last minute. If you can’t claim every 25 min, at least claim once a day for the loyalty bonus. This makes MoonCash one of the easier Moon faucets to reach maximum claims on. You also want to refer 100 people to take advantage of the 25% referral commission and max out on the 1% per referral bonus. Focusing on these actions can greatly increase your claims.
MoonDash is the same as MoonLitecoin, but it pays out in Dash.
1) Loyalty bonus?—?Action: make a claim at least once a day. This is the easiest bonus. All you have to do is make a claim every day and you get a bonus. If you miss a day, it resets back to 1 and you have to walk up to 100% again.
2) Referral bonus?—?Action: refer at least 100 people to take full advantage of the referral bonus. In addition to getting 25% (not 50% like Moon Bitcoin) of your referral’s claims, you also get a 1% bonus for every person you sign up?—?up to 100%. This bonus has a ceiling of 100 people, but your referral commission does not.
3) Mystery Bonus?—?Do nothing and earn this bonus.
The key to optimizing this faucet is to claim as often as you can, at least once a day for the loyalty bonus. To maximize this claim you need to claim every 5 minutes or 288 claims per day which is the highest of any faucet except Moon Dash. This makes MoonLitecoin and MoonDash slightly harder than the other two faucets. You want to refer 100 people to take advantage of the 25% referral commission and max out on the 1% per referral bonus. Focusing on these actions can greatly increase your claims.
Bitfun is slightly different. It pays out in Bitcoin at a higher rate than MoonBitcoin and has no limitations on claim time. You can also play games and do offers. Playing games does not increase faucet amount rate, however.
Referral bonus?—?Action: refer as many people as possible to take advantage of the 50% commission.
The key to optimizing this faucet is to claim around 4hrs, but there is no loyalty bonus. You want to refer as many people as you can to take advantage of the 50% referral commission. Focusing on these actions can greatly increase your claims.
Bonus Bitcoinpays out in Bitcoin. The amount you can claim varies, but you can get a bonus of 5% on all your claims and referrals for the past 3 days as long as you make a claim every day. You can only make a claim every 15 minutes.
Referral bonus?—?Action: refer as many people as possible to take advantage of the 50% commission.
The key to optimizing this faucet is to claim as often as you can every 15 min. You want to refer as many people as you can to take advantage of the 50% referral commission and the 72 hr loyalty bonus. Focusing on these actions can greatly increase your claims.
Step 4: Final Step
Take what I’ve written here and make it your own. You have full license to plagiarize all you want. First, replace my referral codes with your own referral codes (please let me know if you need help finding your codes). Send it out to your friends and family. Set up a seminar at your community center or library. Send it out on Facebook/Twitter/Instagram.If you do add additional faucets to your list, be sure to vet them out for your base.
The world of investments is largely cut off from people that don’t have the means, but crypto isn’t. I have family and friends on both sides of the wealth spectrum and this is a great way for both to accumulate coins. Those that have money, but are worried about Bitcoin’s viability, can use faucets as a no risk way to participate in the crypto boom. Those that don’t have the money can also use this as a way to participate.
Translation: If you don’t have $1 million (or even $10,000), Coinpot is a great way to build a diversified portfolio of high potential crypto. It is a portfolio strategy in and of itself.
Bitcoin, Bitcoin Cash, Litecoin, Dash and Dogecoin represent a good cross-section of cryptos available on the market today. The only one that’s missing is Ethereum and I’m looking for a good Ethereum faucet to recommend now.
I will also warn that the learning curve for crypto is steep, but you don’t have to know any of that for Coinpot. Coinpot is a wallet and the faucets it supports are already set up to deposit directly into your Coinpot wallet?—?real time. It couldn’t be any easier.
Update (1/27/18)
As a corollary I wanted to follow up with a very important piece of the crypto puzzle?—?security. You need to keep your crypto safe?—?it’s not safe in Coinpot once you make more than the threshold limits. So you have some time before security becomes an issue, and the amounts you are making are small, but don’t use that as a reason to get sloppy on security. Use the time it takes to reach the threshold to learn more about security.
The threshold limit varies for each coin. According to the website, “Withdrawal requests are processed and paid directly to your wallet within 48 hours.” In my experience, it’s much faster.
These are the current withdrawal threshold limits which can be found on Coinpot when you click on “Withdraw”:
Bitcoin?—?10,000 satoshi (.00010000)
Bitcoin Cash?—?10,000 satoshi (.00010000)
Litecoin?—?200,000 latoshi (.00200000)
Dash?—?20,000 duffs (.00020000)
Dogecoin?—?50 dogecoin?—?side note: you can only withdraw dogecoin to a dogecoin wallet (for free). Then you can transfer to your main wallet.
Once you reach the threshold, you should withdraw your coin to a safe wallet. This is the best article I’ve found on crypto wallets: https://blockgeeks.com/guides/cryptocurrency-wallet-guide/. It also recommends a few wallets and explains what your options are far better than I can.
Once you decide on one of these wallets, you need to follow that wallet’s instructions for receiving or depositing funds. These instructions are very important?—?do not skip this part.
Your new wallet will give you an address in order to deposit funds. Each address is specific to a certain coin. In other words, you have a different address for each coin. Copy the address and put it in the “withdrawal box” in Coinpot. You want to copy your address and put it in the box.
You’re not done yet. Once you make this request, Coinpot will send you a verification email to confirm your request as an extra layer of security. If you don’t click the link, the withdrawal will not occur.
Update #2 (3/22/18):
When I first started this it took a few weeks to reach my threshold, now it takes a few days (if that). Instead of transferring coins to my wallet (which can be tedious), I’ve put a 2FA code on my Coinpot account which adds an extra layer of security. I highly recommend you do the same. If you need help with this step send me a note.
That’s it. Hope it helps. As always, let me know if you have any questions.
Update #3 (5/2/2018):
This is just a quick update to let you know where I am and what I think about Coinpot so far.
Today, Bitcoin, BCH, Dash, Litecoin and Doge are all trading at the following prices:
Bitcoin: $9,163 (down from $12,326 on 1/23/18)
BCH: $1,468 (down from $1,886 on 1/23/18)
Dash: $471 (down from $881 on 1/23/18)
Litecoin: $149 (down from $200 on 1/23/18)
Doge: $0.005245 (down from $0.007962 on 1/23/18)
What’s the common theme? Prices are down across the board.
To make matters worse, I missed making a claim on day 99 and my loyalty percentage reset. I was furious.
So, why am I still thrilled about Coinpot?
Well, for starters, my inability to claim on day 99 isn’t Coinpot’s fault. More importantly, I believe crypto is the future. I echo the same belief system as Andreas Antonopoulos “Bitcoin Jesus”. (see video below)
My interest and investment in bitcoin are about more than value. That said, I believe cryptocurrency, with bitcoin as its leader, has the potential to give the world an offer it can’t refuse (Godfather). In this way, the drop in price is nothing but an opportunity in my eyes.
Remember:
Bitcoin traded at 6 cents for most of 2010.
$100 in bitcoins on Jan. 1, 2011 bought you 333.33 bitcoins.
On June 8, 2011, bitcoin hit a high of $31.91, making the paper value of your $100 investment about $10,500.
Today, bitcoin is valued at $9,163 so your $100 investment in 2011 is worth ~$3 million.
How much have I made over the last 4 months? I’ve made a little over $30 by checking in once a day. I also have approximately 30 referrals on each faucet. It doesn’t sound like much. And, it’s a far cry from $900, but I’m not concerned. The potential is still there. With the drop in price, the potential is even greater.
While I won’t be optimizing loyalty points (read: making daily claims), I’ll be sure to provide another update in a few months.
Update #4 (7/11/2018): $100 milestone
Quick update, I hit a $100 milestone today and wanted to share the good news. About 75% of that is in Bitcoin and the rest is in Dash, Doge, Litecoin and Cash. Am I anywhere near $900? No, but Bitcoin has dropped in value since I started this. That would be a concern if I didn’t think Bitcoin was the new gold. So, a drop in price is an opportunity when it comes to faucets and investing. And, Coinbase just added 10 customers for its new crypto custody service. What does this mean? It means institutional investors can now get on board. Woot! Woot! I hope you’re having as much fun as I am!
So the doomsayers were right all along. Crypto was nothing but a bubble and it finally burst.
Good.
Maybe you’re surprised to hear that coming from me, someone who’s dedicated more than a few words to the power of crypto to change the world. Did I suddenly have a change of heart? Did I jump on the Paul Krugman bandwagon and finally realize that Bitcoin is evil? Did I join the naysayers who laugh with glee every time the price drops and arrogantly shout that Bitcoin is going to zero?
Nope.
I say good because the circus has finally left town. The cameras have packed up and gone home. The reporters are losing interest. The story is finished.
And now the crypto community can get back to doing the hard work of building the future in peace and quiet.
Cryptocurrency Art Gallery: Litecoin, Ether, Ripple, Bitcoin and Namecoin (Image: Namecoin/Flickr)
I’ve always said the bubble would burst and in the long run it wouldn’t matter in the least. In retrospect I think Bitcoin getting to $20,000 so fast was the worst thing to ever happen to the community. For years, Bitcoin was nothing but Internet geek money and something to laugh at, but when Bitcoin’s price rocketed higher and higher, it suddenly became something else entirely:
A threat.
Bitcoin’s furious rise scared the hell out of banks and governments everywhere. Banks saw their business models crumbling as programmable money took the world by storm and governments feared they might lose their iron-fisted control of the money supply. Authoritarian regimes raced to crush it. Regulators came out in force. The press unleashed a torrent of articles filled with fear, uncertainty and doubt.
But now as Bitcoin’s price recedes the frenzy of ignorance and fear will die with it and the community can get back to work.
The situation as we left it in my last post is that Gunbot had made 3 complete buy-sell trades of 0.002 BTC each using the ‘Emotionless’ strategy. It had then bought again, and hadn’t seemed to be able to sell again that day. In fact early the following day it did manage to sell, and then later that morning it bought and sold again quickly. Each trade was, naturally, profit making, though only to the tune of about 10p.
Emboldened by this I increased the stake for each trade to 0.005 BTC (about £33). Gunbot soon did another Ether trade, for a profit of about 27p, so a healthy gain of about 0.8%.
I was impatient to see more trades and profits at this point, so I increased the stake to 0.01 BTC and added further coin pairs:
Bitcoin – Bitcoin Cash (BCH)
Bitcoin – Litecoin (LTC)
Bitcoin – Ethereum Classic (ETC)
Bitcoin – Dash (DASH)
Bitcoin – Ripple (XRP)
This naturally increased the transaction volume, here’s what’s happened since:
Poloniex Trade History: Gunbot trading Ether with Emotionless Strategy – more coins (Image: BIUK)
In a nutshell, Ether trading has continued solidly but Gunbot has also regularly bought and sold Litecoin, and Ethereum Classic, and also made single completed trades with Dash and Ripple. Bitcoin Cash is nowhere to be seen.
Profits so far, in Bitcoin:
Ethereum: 0.00059094
Litecoin: 0.00032900
Ethereum Classic: 0.00032669
Dash: 0.00007898
Ripple: 0.00013795
Total: 0.00146356 (about £10)
So not a bad start having been out of bot trading for some time.
Advanced Trading
One thing I like very much about the latest Gunbot is the charts in the user interface – they pretty much reproduce what you get in Poloniex or Trading View with the addition of clear markers of where Gunbot bought and sold.
Gunbot chart with buy/sell indicators (Image: BIUK)
What this highlighted for me, though, was that the Emotionless strategy is a bit ‘literal’. What I mean is that Gunbot is selling once it achieves the profit it has been set but is missing opportunities for greater profit. For example, in the middle of the screenshot shown we can see that Gunbot sold even though the market was rising fast and if it had waited a couple more minutes the profit would have been many times greater (perhaps even 10x).
I believe this consideration of trend is part of other strategies, particularly those using Trading Stop / Stop Limit (TSSL) which wasn’t an option in my previous Gunbot version. I’m therefore going to investigate that further before changing any more Gunbot settings, in particular increasing the trading stakes.
After my previous post, creating my first Gunbot Setup in this version of Gunbot using the Bollinger Band strategy, I had a change of heart. I decided to try the Emotionless strategy instead, something I don’t remember being an option in my previously installed versions.
“The Emotionless strategy is fully tuned and ready to use, even for novice traders! It’s meant to be a relatively safe strategy, with modest but steady gains.
“With this strategy, you don’t need to think about setting the right or best parameters: it’s all there already. You only need to set the basics like your trading limit and choose on which pairs you want to trade. Optionally, you can increase GAIN slightly.
“Behind the scenes, an advanced algorithm based on the Ichimoku cloud indicator does the hard work. The specifics will not be disclosed.”
Given I haven’t used Gunbot seriously in many months this seemed like a good bet. I cancelled the run and restarted it with the strategy set to Emotionless. I kept all other settings the same.
Trading
I then went to bed, and didn’t check the results until the next morning. Success! Gunbot had bought some Ether and sold it again at a higher price during the night.
I suspect you won’t be impressed if I say the profit made was just 0.00001482 BTC (worth about 10p) but that is to miss the point. The stake, remember, was just 0.002 BTC (£13) and the setting for GAIN is 0.6, i.e. aim to make a profit of 0.6%. In fact the profit is 0.74% so the bot has done really well.
Of course, once you have gained confidence that the bot is working then you naturally increase the stake. If it were set to 1 Bitcoin, for example, then each trade would make a profit of about £50 and you could get multiple trades in one day. 10 BTC would make you £500 per trade, and so on.
In this case I left the bot running unchanged and it has now made 3 complete trades (for a total profit of 2.25%). In any other field such a gain in 2 days would be unprecedented.
Note that the bot has since gone on to buy again, but has not yet sold. It will be interesting to see if it sells successfully or if the market drops and it’s left holding Ether it can’t sell – I’ll report back once the outcome is clear.
Click on Create my first setup. For Setup Name I use the name of the exchange, also select the exchange in the Exchange dropdown. The pair of coins to trade is nearly always Bitcoin and another coin, both specified by their common abbreviation. I’m starting with Bitcoin trading against Ether, so I enter BTC-ETH. The strategy I choose is bb (‘Bollinger Band‘) because it’s the one I’m most experienced with – though I plan to try out others very soon.
Setup with a new trading pair (Image: BIUK)
Click Add pair. The new pair will appear as a tab in the lower window, with settings on the left and a Trading View window on the right. Repeat the process if you want to add more trading pairs.
A new trading pair added (Image: BIUK)
Click Create. You’ll get a message “Setup created! Go to the dashboard to preview and run your setup.” Click on Go to dashboard.
Preview and Run
You are now in the preview screen – here you can check all the settings for the setup by clicking on the triangle marker next to each set. I’ll accept the defaults, however you may want to review how much Gunbot will spend on each trade – for this go to the particular strategy you selected under strategies and review TRADING_LIMIT (this is the amount in Bitcoin). The default is 0.002 (currently about £13).
Preview screen (Image: BIUK)
Click Run Gunbot. A gunthy.exe command window will open (allow it if asked by Windows Firewall). The trading pair tab will now contain a and a trading view window and a window showing real-time output from gunthy.exe (the actual Gunbot bot).
Gunbot running (Image: BIUK)
That’s it – Gunbot is up and running and ready to trade when the conditions are right. We’ll go over the details of the trading in future posts.
I have previously described Gunbot and how it works, including how to prepare for using it. Here I cover installation and initial setup.
Installation
Download and unzip the most recent version of Gunbot from GitHub (obviously you will need to have paid for a license for it to work). I run the Windows version and have mine in a C:/Gunbot/Latest folder (and move older versions into other folders as they get replaced).
Gunbot folder and files (Image: BIUK)
Double-click on gunthy-gui.exe to run the Gunbot user interface. If you get a message about needing to get something from the Windows store, cancel it. If you get a message from Windows Defender Firewall, Allow access.
You should have a Windows command window running that says “Gunthy GUI <version> running on http://localhost:5000″.
In a new brower tab (I recommend Chrome as the browser) type in the address “localhost:5000” and enter.
Gunbot User Interface
You should now see the Gunbot interface up and running – the first time it will take you to the Login screen.
Gunbot Login screen (Image: BIUK)
If you don’t get that then you may need to open access to port 5000 through the Firewall – for more details see the official installation video.
Choose and enter a password, record it somewhere safe, then click on Create password. You are now in the main Gunbot dashboard.
Gunbot Dashboard after first login (Image: BIUK)
Assuming you are a new user, and so don’t have an existing config file, select Start without import.
On the next screen, Settings/API Keys, enter the API Key and Secret for the exchange you want to use (I use Poloniex). I have previously covered the method to get an API key for the Bitfinex exchange, but it’s a very similar process on most exchanges.
Gunbot settings screen for API keys (Image: BIUK)
With Master Key enabled, click Add. You should get the message “API Key sucessfully added!” and it should be shown in the table at the bottom of the screen.
Gunbot is an automated bot (robotic software) for trading cryptocurrencies, primarily trading Bitcoin with other crypto coins (‘altcoins’). It was coded by Gunthar De Niro (‘Gunthy‘) with support from the Bitcointalk community.
The theory for trading with Gunbot is relatively straightforward:
You deposit some Bitcoin on a trading exchange.
You request remote access to your account via an API Key and give the Key details to the bot.
You setup the bot, using particular settings to specify how you want it to trade (e.g. what level of risk/reward, etc.).
You start the bot. It runs 24/7 and when the trading conditions are right it buys and sells coins on your behalf using the Bitcoin in your account.
The intention is that it will buy an altcoin at a low price, determined by its trading history, and hold on to it until its price goes above a certain threshold (allowing for trading fees) when it will sell it.
In most cases this works well and makes a profit, and the bot is then ready to make the next trade.
In a small proportion of cases the altcoin price goes down steadily and cannot be sold (this is known as ‘holding a bag’). At that point you need to step in and, in some cases, sell the altcoin at a loss.
With good settings, and regular monitoring, in my experience trading with Gunbot will make more money than it loses and can produce a significant income over time.
Preparing to Use Gunbot
Before you use Gunbot for the first time it is worthwhile to learn about how it operates and what its features and limitations are.
Spend some time in the Gunbot Wiki to get familiar with the bot, how it runs, what strategies it uses, etc.
Read at least the last dozen or so pages of the Gunbot thread on BitcoinTalk to learn about recent changes, and any issues or bugs found. Join BitcoinTalk if you aren’t already a member.
If you’re new to the Bitcoin space, the last few months have been pretty crazy.
There have been some steep climbs and heart-stopping drops making for a roller coaster of emotion that’s not easily controlled. The price action is both thrilling and at times, painful, so it’s easy to lose sight of what you’re investing in. All the coins seem to be running together, so what’s the difference? How is one coin to be distinguished from another? And more importantly, how is an investor to know what the long term value of a coin will be?
Bitcoin (Image: MichaelWuensch/Pixabay)
In this article, I’m going to make the case for what makes Bitcoin different, how Bitcoin is a system that, despite all the cloning, has yet to be truly replicated.
Real Innovation
To really understand the value proposition of Bitcoin, it helps to look at a bit of history. It’s tempting to think that the newest ICO or altcoin is the one that will finally “improve” Bitcoin and fix all of its problems and that Bitcoin will be relegated to the dustbin of history due to its lack of some “feature”. Indeed, nearly every altcoin, ICO or hardfork thinks that they’re being innovative in some fundamental way. What’s missed is that the biggest innovation has already happened.
Decentralized digital scarcity is the real innovation and Bitcoin was the first, and, as this article will make clear, continues to be the only such coin. All the other so-called innovations such as faster confirmation times, changing to proof-of-whatever, Turing completeness, different signature algorithm, different transaction ordering method and even privacy, are really tiny variations on the giant innovation that is Bitcoin.
It’s important to remember here that alternatives to Bitcoin have been proposed since 2011 and none of them have even come close to displacing Bitcoin in terms of price, usage or security. IxCoin was a clone of Bitcoin created in 2011 with larger block rewards and a premine (large number of coins sent to the creator). Tenebrix was an altcoin created in 2011 that tried to add GPU resistance and again had a large premine. Solidcoin was another altcoin created in 2011 with faster block times and again, a premine. About the only ones that survived (and not living out a zombie existence) out of that early altcoin era are Namecoin and Litecoin, which distinguished themselves by NOT having a premine.
