Author Topic: Cryptocurrencies  (Read 105936 times)

mrholty

  • Full Member
  • ***
  • Posts: 103
Re: Cryptocurrencies
« Reply #410 on: January 18, 2018, 09:29:30 AM »
http://hackingdistributed.com/2018/01/15/decentralization-bitcoin-ethereum/

Quote
Both Bitcoin and Ethereum mining are very centralized, with the top four miners in Bitcoin and the top three miners in Ethereum controlling more than 50% of the hash rate.

The entire blockchain for both systems is determined by fewer than 20 mining entities [4].

Is this correct  ???

https://blockchain.info/pools?timespan=4days

The big ones are mining pools, some have tens of thousands of members each of whom can switch pools or start mining on their own with a couple of keystrokes.

They also all know each other.
Distributed 'security' as advertised doesn't really exist; you're really relying on 'inertia' and self interest ( the fact that the 'craze' is worth much more to everyone if nobody screws the pooch, and the 'ethos' that you don't take your money out). Nothing wrong in that (everyone eventually grows up), but it's a different way of thinking.

SD

I owned Bitcoin back 5 years ago and sold out after 9 months because it volatility was too much for me.  I got interested because of the Silk Road in 2012 and sold before Ullrich got caught.  Back then the sellers on Silk Road didn't like it because they preferred a stable currency.  I bought/sold through Mt. Gox which shut down later and it took weeks on both sides to set up an account/ get my cash.

A few summers ago work took me to China and I spent a lot of time with a few small(ish) business owners that were looking to retire as there were fears of corruption crackdowns as some of the heads of the biggest companies were arrested on their drive home from their towers.  These guys were small scale distributors and these actions killed their business by 75% overnight as they waited to see what else would happen. 

Two of the guys told me that their plan had been to set up a "business" in Canada (Vancouver).  Then use the business to buy an asset (house) paid for by the business.  Then wait 2 years and sell the house at a loss (10-20%) but it was a way to get around the currency controls.  But they had started to hear about Bitcoin as a way to get their money out without doing it via asset purchases.
These mining groups are in China due to the huge subsidization of power to create domestic industry which makes their ability to mine (which updates the distributed ledgers) and due to these huge draws I guarantee that China will look to eliminate (reduce) it.

RKbabang - Have you downloaded the software to have a ledger on your computer.  I did back in 2012 and it took over 3 days to download and setup.  (yes speeds were lower but I expect that due its growth the time would still be long).  I used it to "mine" for a few weeks - got a little.  The infrastructure is more fragile than most people think.

(That said - I think there are uses for BlockChain tech but the coins feel like gambling).


JimBowerman

  • Newbie
  • *
  • Posts: 12
    • Split Rock Capital Management, LLC
Re: Cryptocurrencies
« Reply #411 on: January 18, 2018, 09:39:24 AM »
Is this a good time to buy Bitcoin? What price would you say? Do you have a preference of Bitcoin versus Ether?

Read from around page 12 onwards. The inference is only buy in a collapse, only buy Bitcoin, and it'll be your kids who collect
https://s3.eu-west-2.amazonaws.com/john-pfeffer/An+Investor%27s+Take+on+Cryptoassets+v6.pdf

SD

interesting paper, but here's a slight critique which i'd agree with

https://medium.com/@elliotolds/thought-provoking-paper-but-it-seems-to-be-using-the-equation-of-exchange-incorrectly-25f3148b85ea

Also, thinking outloud about potential markets....If (big if/wildly unrealistic) bitcoin were to become a functional currency. Assume population increases at 1% a year, and productivity increases at 2% a year. With a fixed supply currency, each unit of currency appreciates 3% a year in real terms. Folks assume that gold had this property, but during the gold standard, prices (CPI) remained flat from 1800 to 1900. This would imply that gold discoveries matched this productivity + population growth number (ie gold supply was not fixed but was rising 3% a year using numbers in this example).  With bitcoin, the CPI would've DEflated at 3% a year from 1800 to 1900. 

Various Scenarios:

3% inflation (Money Supply increases 6% a year in nominal terms) - Most modern day economies
      CPI in 1800 = 100
      CPI in 1900 = 1800

0% Inflation (Money supply increases at 3% a year) - 19th century Gold Standard
     CPI in 1800 = 100
     CPI in 1900 = 100

Bitcoin (Fixed Supply)
     CPI in 1800 = 100
     CPI in 1900 = 5

leads to the potential conclusion that potential market for bitcoin is not just world M2 money supply but also other government "near monies"...ie all treasuries that yield less than 3%/inflation rate?   Anyone have a good source on $ amount of bonds oustanding world wide by yield?  As I recall total M2 for the entire world is $90T and government debt outstanding is $80T or so ($170 T) in total.  Obviously under even the most rosy scenarios, bitcoin only takes over a small fraction of that, but interesting to think about.  I had always only looked at M2, but seems that government debt should be included in these calcs the more I think about it.

Probably oversimplistic/unrealistic, but interesting thought experiment...
« Last Edit: January 18, 2018, 09:52:48 AM by JimBowerman »

rkbabang

  • Lifetime Member
  • Hero Member
  • *****
  • Posts: 3780
Re: Cryptocurrencies
« Reply #412 on: January 18, 2018, 09:50:15 AM »
http://hackingdistributed.com/2018/01/15/decentralization-bitcoin-ethereum/

Quote
Both Bitcoin and Ethereum mining are very centralized, with the top four miners in Bitcoin and the top three miners in Ethereum controlling more than 50% of the hash rate.

The entire blockchain for both systems is determined by fewer than 20 mining entities [4].

Is this correct  ???

https://blockchain.info/pools?timespan=4days

The big ones are mining pools, some have tens of thousands of members each of whom can switch pools or start mining on their own with a couple of keystrokes.

They also all know each other.
Distributed 'security' as advertised doesn't really exist; you're really relying on 'inertia' and self interest ( the fact that the 'craze' is worth much more to everyone if nobody screws the pooch, and the 'ethos' that you don't take your money out). Nothing wrong in that (everyone eventually grows up), but it's a different way of thinking.

SD

I owned Bitcoin back 5 years ago and sold out after 9 months because it volatility was too much for me.  I got interested because of the Silk Road in 2012 and sold before Ullrich got caught.  Back then the sellers on Silk Road didn't like it because they preferred a stable currency.  I bought/sold through Mt. Gox which shut down later and it took weeks on both sides to set up an account/ get my cash.

A few summers ago work took me to China and I spent a lot of time with a few small(ish) business owners that were looking to retire as there were fears of corruption crackdowns as some of the heads of the biggest companies were arrested on their drive home from their towers.  These guys were small scale distributors and these actions killed their business by 75% overnight as they waited to see what else would happen. 

Two of the guys told me that their plan had been to set up a "business" in Canada (Vancouver).  Then use the business to buy an asset (house) paid for by the business.  Then wait 2 years and sell the house at a loss (10-20%) but it was a way to get around the currency controls.  But they had started to hear about Bitcoin as a way to get their money out without doing it via asset purchases.
These mining groups are in China due to the huge subsidization of power to create domestic industry which makes their ability to mine (which updates the distributed ledgers) and due to these huge draws I guarantee that China will look to eliminate (reduce) it.

RKbabang - Have you downloaded the software to have a ledger on your computer.  I did back in 2012 and it took over 3 days to download and setup.  (yes speeds were lower but I expect that due its growth the time would still be long).  I used it to "mine" for a few weeks - got a little.  The infrastructure is more fragile than most people think.

(That said - I think there are uses for BlockChain tech but the coins feel like gambling).


I did actually download the whole thing back around when you did.  I even tried to mine, but after a day or two with nothing to show for it I gave up. I didn't join a pool, I was just using my own computer with $40 video card, it would have taken me forever to solve a block, I was just wasting electricity.   It took a long time to download the blockchain, but you only have to do it once.   Also I have 400Mbps internet access now, so downloading it again would be doable if I wanted to run a node.
I didn't actually buy any back then, but I looked into it.  I should have.

sjh

  • Newbie
  • *
  • Posts: 31
Re: Cryptocurrencies
« Reply #413 on: January 18, 2018, 12:33:03 PM »
Is this a good time to buy Bitcoin? What price would you say? Do you have a preference of Bitcoin versus Ether?

Read from around page 12 onwards. The inference is only buy in a collapse, only buy Bitcoin, and it'll be your kids who collect
https://s3.eu-west-2.amazonaws.com/john-pfeffer/An+Investor%27s+Take+on+Cryptoassets+v6.pdf

SD

interesting paper, but here's a slight critique which i'd agree with

https://medium.com/@elliotolds/thought-provoking-paper-but-it-seems-to-be-using-the-equation-of-exchange-incorrectly-25f3148b85ea


" Suppose through a brilliant PR campaign I convince people to use this ledger and engage in $1,000,000,000 worth of transactions in a year, despite its low security. Suppose also that V=5.
What is the token value for my ledger? My model says $2,000,000 per coin, yours says $2,000. Letís assume your calculation is right. How could it be possible for a token with value $2,000 and velocity 5 to support a billion dollars worth of transactions in a year?"

I think he misses the point.The paper doesn't say that the price must always be exactly what the formular says. But the VALUE of the network is what the formular calculates. Of course the market cap of a given crypto currency can fluctuate, but the intrinsic value will stay the same.

emily

  • Sr. Member
  • ****
  • Posts: 348
Re: Cryptocurrencies
« Reply #414 on: January 18, 2018, 05:11:05 PM »
What is the cost of manufacturing of a bitcoin? Would that price be a signal of rock bottom price on it?

I read that one could store a bitcoin on a wallet like Jaxx in case the exchange goes under. Can't the app for a wallet disappear too? or one could chose to store the same code on multiple devices?

https://www.npr.org/2018/01/18/578800271/finding-your-lost-bitcoins

emily

  • Sr. Member
  • ****
  • Posts: 348
Re: Cryptocurrencies
« Reply #415 on: January 18, 2018, 06:01:09 PM »
WSJ:  SEC Pours Cold Water on Prospect of Bitcoin ETFs

rkbabang

  • Lifetime Member
  • Hero Member
  • *****
  • Posts: 3780
Re: Cryptocurrencies
« Reply #416 on: January 19, 2018, 05:19:42 AM »
What is the cost of manufacturing of a bitcoin? Would that price be a signal of rock bottom price on it?

I read that one could store a bitcoin on a wallet like Jaxx in case the exchange goes under. Can't the app for a wallet disappear too? or one could chose to store the same code on multiple devices?

https://www.npr.org/2018/01/18/578800271/finding-your-lost-bitcoins

The HD wallets like Jaxx follow a standard.  You can take your 12 word backup phrase from your Jaxx wallet and restore it on Exodus for example.  Also you can list all of the private keys in Jaxx and write them down and restore them on any wallet software.  Your Jaxx and wallets like it interact with the blockchain, but they don't store your Bitcoin.  Your Bitcoin lives on the blockchain and any software can be used to access them.  Jaxx can disappear tomorrow and I would not lose any of the Bitcoin that I have stored in my Jaxx wallet.  The particular software you use to view your bitcoins or to spend them doesn't matter.  What matters, and the only thing that matters, is that you know either your 12 word backup phrase or all of your private keys.

SharperDingaan

  • Lifetime Member
  • Hero Member
  • *****
  • Posts: 2803
Re: Cryptocurrencies
« Reply #417 on: January 19, 2018, 07:18:19 AM »
What is the cost of manufacturing of a bitcoin? Would that price be a signal of rock bottom price on it?

I read that one could store a bitcoin on a wallet like Jaxx in case the exchange goes under. Can't the app for a wallet disappear too? or one could chose to store the same code on multiple devices?

https://www.npr.org/2018/01/18/578800271/finding-your-lost-bitcoins

The HD wallets like Jaxx follow a standard.  You can take your 12 word backup phrase from your Jaxx wallet and restore it on Exodus for example.  Also you can list all of the private keys in Jaxx and write them down and restore them on any wallet software.  Your Jaxx and wallets like it interact with the blockchain, but they don't store your Bitcoin.  Your Bitcoin lives on the blockchain and any software can be used to access them.  Jaxx can disappear tomorrow and I would not lose any of the Bitcoin that I have stored in my Jaxx wallet.  The particular software you use to view your bitcoins or to spend them doesn't matter.  What matters, and the only thing that matters, is that you know either your 12 word backup phrase or all of your private keys.

The smartest thing you can do with these is write your code on a slip of paper, store it in your safety deposit box, and ensure that you clear your browser every time you finish accessing your digital wallet. The easiest way to steal token is to simply read (electronically) your device, the easiest way to do that is via malware you've accidentally downloaded.

SD


KCLarkin

  • Hero Member
  • *****
  • Posts: 1575
Re: Cryptocurrencies
« Reply #418 on: January 19, 2018, 07:49:36 AM »
Spent a couple hours studying cryptocurrencies and my brain feels the same way as when I studied the Efficient Market Hypothesis in my MBA. A bunch of real smart people suffering from a mass delusion. A libertarian fever dream mixed with some of the most elegant ponzi schemes ever devised. GLTA.

wachtwoord

  • Hero Member
  • *****
  • Posts: 1222
Re: Cryptocurrencies
« Reply #419 on: January 19, 2018, 08:03:26 AM »
Spent a couple hours studying cryptocurrencies and my brain feels the same way as when I studied the Efficient Market Hypothesis in my MBA. A bunch of real smart people suffering from a mass delusion.

Exactly how I feel about fiat currency. But then extend the (far larger) group of smart people with a whole bunch of stupid and mediocre ones.
"Beware of he who would deny you access to information, for in his heart he dreams himself your master"

COMX - ALS.TO - MRCR - FELP - PDER - NVTR - 
 SODI - ADDC - WWIB.OL - HNFSA - IPO.TO - BONL - GNW -  BWEL - DC.A - POE.V - NYRT