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General Category => General Discussion => Topic started by: rkbabang on May 04, 2017, 07:09:52 AM

Title: Cryptocurrencies
Post by: rkbabang on May 04, 2017, 07:09:52 AM
The price of many cryptocurrencies continues to move way up, they have been on a tear all week.

https://coinmarketcap.com/all/views/all/#USD

Bitcoin now has a >$25B marketcap and Ether >$8B.   There are 4 cryptocurrencies with marketcaps above $1B, 13 above $100M, and ~185 of them above $1M.

My once small speculative/experimental positions in BTC, ETH, DASH, & XMR are starting to look significant.
Title: Re: Cryptocurrencies
Post by: vegaseller on May 04, 2017, 09:33:11 AM
i don't really understand crypto.

It seems like a successful one required widespread adoption, yet being volatile and hoarded by speculators goes counter to merchant adoption. On the other hand one that is stable and non-volatile which merchants may adopt is not one which you can speculate on.

It is basically lose lose.
Title: Re: Cryptocurrencies
Post by: mttddd on May 04, 2017, 09:38:52 AM
i don't really understand crypto.

It seems like a successful one required widespread adoption, yet being volatile and hoarded by speculators goes counter to merchant adoption. On the other hand one that is stable and non-volatile which merchants may adopt is not one which you can speculate on.

It is basically lose lose.

ya at this point i view it as complete speculation, i know some folks making good money off of that but there is no real downside protection. Also at least on the bitcoin side of things China dominates the mining capacity which adds a whole geopolitical risk to it, sort of defeating the purpose of it all.
Title: Re: Cryptocurrencies
Post by: premfan on May 04, 2017, 09:40:23 AM
The price of many cryptocurrencies continues to move way up, they have been on a tear all week.

https://coinmarketcap.com/all/views/all/#USD

Bitcoin now has a >$25B marketcap and Ether >$8B.   There are 4 cryptocurrencies with marketcaps above $1B, 13 above $100M, and ~185 of them above $1M.

My once small speculative/experimental positions in BTC, ETH, DASH, & XMR are starting to look significant.

Congrats.  I read the paper on this forum late 2011 and the high conviction posters were framing this as digital gold. I loved the philosophy of the paper.  The math i didnt understand so i stayed away.  For others to learn( myself):

1.) What was thesis when invested?
2.) What is current thesis?
3.) When is this vehicle a sell? Or riding it out using power law?

Thanks

-premfan
Title: Re: Cryptocurrencies
Post by: rkbabang on May 04, 2017, 11:00:06 AM
The price of many cryptocurrencies continues to move way up, they have been on a tear all week.

https://coinmarketcap.com/all/views/all/#USD

Bitcoin now has a >$25B marketcap and Ether >$8B.   There are 4 cryptocurrencies with marketcaps above $1B, 13 above $100M, and ~185 of them above $1M.

My once small speculative/experimental positions in BTC, ETH, DASH, & XMR are starting to look significant.

Congrats.  I read the paper on this forum late 2011 and the high conviction posters were framing this as digital gold. I loved the philosophy of the paper.  The math i didnt understand so i stayed away.  For others to learn( myself):

1.) What was thesis when invested?
2.) What is current thesis?
3.) When is this vehicle a sell? Or riding it out using power law?

Thanks

-premfan


The math/mechanics of how it works is basically a public ledger secured by "mining" (basically you need enormous compute power to fraudulently edit the ledger) and individual accounts are secured with public key cryptology (i.e. you have a public key and a private key).   

I can't speak for anyone else, but my thesis was, and is, that this solves a number of problems with government controlled currencies and transaction time and costs (especially remittance of wealth across large distances), and blockchains can be used for other things besides money.  With government / central bank controlled currencies you have constant inflation risk.  You have no way of knowing, much less controlling, the creation of new units.  You are not only at the whim of someone else, but that someone else is a political entity.  Politics doesn't make good business, the incentives are not in the right places.   With cryptocurrencies you can know how many new units will be created in the future.  With bitcoin as an example there will never be more than 21 million bitcoins, but with Ethereum there will be a small perpetual inflation, so you can take that into account when trying to figure out what to value them at.  Whereas you have no idea how many US dollars outstanding there will be in year 2026.

As far as transaction frictional costs, western union charges an insane amount to send money across the world and there is really no reason for this in the 21st century.  With a cryptocurrency there is no difference between sending money to someone in the same room as you as there is sending money to someone on a different continent.  You send value directly without middle men.

There are many other uses for blockchains other than currencies.  There are smart contracts.  You could use them to keep track of and trade shares of companies to replace stock exchanges.  Any form of database or record keeping where you wanted it difficult, if not impossible, for the records to be tampered with, etc.

The risks are that these currencies are easy to create.  There is nothing stopping you from downloading the bitcoin code and creating an identical cryptocurrency called premfancoin.  You can even change the parameters on how it works or how it is mined, etc.   I have no doubt that some form of cryptocurrency is the future of wealth ownership and exchange, but I'm not all that sure it will be bitcoin, which was my thesis for diversifying a little bit.  I didn't buy any of the bitcoin clones, such as dodgecoin or litecoin, because my thesis was that bitcoin has first mover advantage and for something to overtake it or even be close to as successful as it a competitor will need to have some type of difference which makes people choose it over bitcoin.  Ethereum is very different it is turing complete.  I don't think ether will be used much as a currency or a store of long term wealth, but will be used for smart contracts and the creation of businesses which run on its blockchain.  It will be more of a short term store of value used for doing business or small everyday transactions, the digital coppers to the bitcoin digital gold.   That is how I see it anyway.  I bought some DASH and Monero (XMR) because I like their privacy features and I wonder if bitcoin isn't just a little too public.  I think there will always be a market for untraceable transactions which can live right alongside bitcoin and ether.  DASH and XMR work differently and while I like XMR better, DASH seems to have the better development/marketing behind it, so I diversified into both.

I have no idea about when to sell.  If my thesis is wrong, sell now.  If my thesis is correct then some or all of these will have marketcaps which will be the equivalent of trillions of 2017 USD someday.
Title: Re: Cryptocurrencies
Post by: premfan on May 04, 2017, 04:58:22 PM
Thank you for the post.  Your level of math and thesis synthesis is above my pay grade.  It seems to me that the blockchain and insert any currency that has trust could fundamentally change the bottom 20 percent of the world's population.  This is a great service and invention if executed. 
Title: Re: Cryptocurrencies
Post by: solobz on May 06, 2017, 11:11:03 AM
a16z had a recent podcast that I thought was an insightful convo on cryptos for novices (like myself)
http://a16z.com/2017/04/03/cryptocurrencies-protocols-appcoins/

I own pretty insignificant amounts of ethereum and bitcoin. ether has the advantage of (maybe?) being more of a blockchain/platform/application play, rather than a pure store of value like bitcoin, but I know nothing
Title: Re: Cryptocurrencies
Post by: SharperDingaan on May 06, 2017, 03:27:58 PM
You need to be very clear why you are in these things, and what your thesis is.

You also need to mindful that the distributed security of Bitcoin isn't really working as claimed anymore, as >50% of miners are under the same 'controlling mind'.

SD

Title: Re: Cryptocurrencies
Post by: Parsad on May 06, 2017, 03:39:29 PM
When your mechanic and plumber start investing and touting the wonders of cryptocurrency, you should start to get concerned!  Both have tried to arrange meetings with me recently on how amazing and hot Bitcoin is, as well as they want to introduce me to their Bitcoin guys.

Also, the fact that Patrick Byrne is now spending Overstock.com money on this, should also concern people!

Cryptocurrency is the future, but the winners will be few and far between, like how Amazon presently leads the internet wars with the dead carcasses of its competitors littering the street or barely surviving.

Cheers!
Title: Re: Cryptocurrencies
Post by: rkbabang on May 06, 2017, 05:52:02 PM
When your mechanic and plumber start investing and touting the wonders of cryptocurrency, you should start to get concerned!  Both have tried to arrange meetings with me recently on how amazing and hot Bitcoin is, as well as they want to introduce me to their Bitcoin guys.

Also, the fact that Patrick Byrne is now spending Overstock.com money on this, should also concern people!

Cryptocurrency is the future, but the winners will be few and far between, like how Amazon presently leads the internet wars with the dead carcasses of its competitors littering the street or barely surviving.

Cheers!

+1

The last paragraph above articulates the largest risk I see investing in these. That was what I was trying to say when I said that I was sure that this was the future, but not sure that it will be Bitcoin. The way I see it is that this will be a winner take almost all industry. There will be thousands of cryptocurrencies but only 1-3 real winners. My cost basis in my basket of these is less than 1% of my portfolio even though the current value is over 8% right now. I'm not buying any more.
Title: Re: Cryptocurrencies
Post by: gg on May 07, 2017, 06:30:07 AM
When your mechanic and plumber start investing and touting the wonders of cryptocurrency, you should start to get concerned!  Both have tried to arrange meetings with me recently on how amazing and hot Bitcoin is, as well as they want to introduce me to their Bitcoin guys.

Also, the fact that Patrick Byrne is now spending Overstock.com money on this, should also concern people!

Cryptocurrency is the future, but the winners will be few and far between, like how Amazon presently leads the internet wars with the dead carcasses of its competitors littering the street or barely surviving.

Cheers!

Agree 100% when these sort of people are getting excited about stocks or real estate, or other assets they can speculate on, which have a maximum intrinsic value... the one difference here is that bitcoin has positive network effects, so hysteria/speculation can actually end up increasing their intrinsic value
Title: Re: Cryptocurrencies
Post by: SharperDingaan on May 07, 2017, 06:39:35 AM
Bitcoin is an 'Oracle' with a token called 'Bitcoin'. Because other people will accept 'Bitcoin' as payment for goods or services, 'Bitcoin' functions as money. Because it uses cryptography we call  it 'cryptocurrency', & assign magical properties to it. Long time ago we assigned similar properties to anything ended '.com' - & it didn't go so well.

Bitcoin owes its popularity to first mover advantage, and the blockchain technology that runs it. As it features prominently in a number of textbooks, it is probably never going to go away. And with more people reading those textbooks, demand is likely to increase - driving price and volatility changes.  Mougayar (2016) The Business Blockchain. Nothing wrong in any of this, but at least recognize the drivers.

The underlying blockchain technology is the killer app, and it is operating in 'blue sky' - on just about everything it touches. New monopolies are being created almost quarterly, and are in the process of scaling up; once complete they will make the old Standard Oil Trust look like kiddies play.

The potential impact has started to register with the public, but it is being articulated as 'Bitcoin'; ie: the wrong words are being used. Just as many people thought a 'mouse' was a rodent - when the first computers came out.

SD

   

Title: Re: Cryptocurrencies
Post by: rkbabang on May 07, 2017, 06:39:41 AM
When your mechanic and plumber start investing and touting the wonders of cryptocurrency, you should start to get concerned!  Both have tried to arrange meetings with me recently on how amazing and hot Bitcoin is, as well as they want to introduce me to their Bitcoin guys.

Also, the fact that Patrick Byrne is now spending Overstock.com money on this, should also concern people!

Cryptocurrency is the future, but the winners will be few and far between, like how Amazon presently leads the internet wars with the dead carcasses of its competitors littering the street or barely surviving.

Cheers!

Agree 100% when these sort of people are getting excited about stocks or real estate, or other assets they can speculate on, which have a maximum intrinsic value... the one difference here is that bitcoin has positive network effects, so hysteria/speculation can actually end up increasing their intrinsic value

Exactly.  Similar to Facebook. The more people using it the more valuable it is.  The only question is if Bitcoin is the Facebook of cryptocurrencies or the MySpace?
Title: Re: Cryptocurrencies
Post by: rkbabang on May 08, 2017, 09:24:19 AM
To further diversify, Tezos looks interesting.  I am thinking about participating in the ICO at the end of this month.  If you participate in the first 2 days you get 6000 TEZ per Bitcoin which decreases down to 5000 TEZ/BTC over the 10 day offering.  It is an open-ended ICO, so the resultant market cap will depend on how many participate, they are hoping to raise $20M.  I would be using my current bitcoin holdings to further diversify my cryptocurrency basket, not new money.

Some info:

https://bitcoinmagazine.com/articles/tezos-receives-investment-smart-contact-system-polychain-capitals-digital-currency-fund/ (http://Tezos Receives Funding for Smart Contact System from Polychain Capital's Digital Currency Fund)

Tezos, the generic self amending crypto-ledger (https://steemit.com/crypto-news/@dana-edwards/tezos-the-generic-self-amending-crypto-ledger)

Tezos.com (https://www.tezos.com/)
Title: Re: Cryptocurrencies
Post by: Jurgis on May 08, 2017, 10:17:17 AM
Perhaps I should ask if people are paying taxes on cryptocurrency gains.  8)
Title: Re: Cryptocurrencies
Post by: wachtwoord on May 08, 2017, 12:26:46 PM
Tezos isn't even clear about the number of tokens they are giving out which makes it impossible to calculate a market cap. Completely uninvestible.
Title: Re: Cryptocurrencies
Post by: tng on May 09, 2017, 08:15:05 AM

Exactly.  Similar to Facebook. The more people using it the more valuable it is.  The only question is if Bitcoin is the Facebook of cryptocurrencies or the MySpace?

I'm not sure if it is even comparable like this. If there is a huge advancement in social media, Facebook can simply change their core code to put that feature into it. Other smaller social networks did stuff like videos, live streaming, stories, etc first and Facebook adopted the ones that worked well. Facebook at launch was a wall that people can write on. Now it is very different.

The crypto-currencies are very limited in their ability to change like that. What if someone figures out something better than Bitcoin's block chain? It's almost certain to happen over time. When someone invents a vastly superior crypto-currency, is everybody going to stick with the old one?
Title: Re: Cryptocurrencies
Post by: wachtwoord on May 09, 2017, 08:24:56 AM

Exactly.  Similar to Facebook. The more people using it the more valuable it is.  The only question is if Bitcoin is the Facebook of cryptocurrencies or the MySpace?

I'm not sure if it is even comparable like this. If there is a huge advancement in social media, Facebook can simply change their core code to put that feature into it. Other smaller social networks did stuff like videos, live streaming, stories, etc first and Facebook adopted the ones that worked well. Facebook at launch was a wall that people can write on. Now it is very different.

The crypto-currencies are very limited in their ability to change like that. What if someone figures out something better than Bitcoin's block chain? It's almost certain to happen over time. When someone invents a vastly superior crypto-currency, is everybody going to stick with the old one?

Over time sure something better might be found. Thus far it took all of human civilization to come up with a solution for the Byzantine generals problems allowing for the trust-less transactions enabled in Bitcoin.
Title: Re: Cryptocurrencies
Post by: rkbabang on May 09, 2017, 08:57:39 AM

Exactly.  Similar to Facebook. The more people using it the more valuable it is.  The only question is if Bitcoin is the Facebook of cryptocurrencies or the MySpace?

I'm not sure if it is even comparable like this. If there is a huge advancement in social media, Facebook can simply change their core code to put that feature into it. Other smaller social networks did stuff like videos, live streaming, stories, etc first and Facebook adopted the ones that worked well. Facebook at launch was a wall that people can write on. Now it is very different.

The crypto-currencies are very limited in their ability to change like that. What if someone figures out something better than Bitcoin's block chain? It's almost certain to happen over time. When someone invents a vastly superior crypto-currency, is everybody going to stick with the old one?

Over time sure something better might be found. Thus far it took all of human civilization to come up with a solution for the Byzantine generals problems allowing for the trust-less transactions enabled in Bitcoin.

Yes, but once a solution to a problem is found using new technology (remember in the grand scheme of things the internet and even computers themselves are new technologies) is the first solution likely to be the best solution?  It took all of human civilization to get off the ground, but the Wright brothers original aircraft has been improved upon a bit over the years.  But that is just playing devil's advocate a little, because we don't really know.  To answer tng's question, cryptocurrencies can be changed in how they work.  ETH has forked a number of times to change things and add features, there is a huge debate going on now in the Bitcoin community over forking the blockchain to change some things.   It isn't easy to do. Building consensus is never easy to do, and it probably shouldn't be easy to do, but it can be done.  If something was invented that didn't evolve a blockchain at all, could bitcoin and others evolve to support that?  I don't know, probably not, but I don't think that is likely.  I think blockchains in one form or another are going to be the fundamental building blocks for many useful technologies in the coming decades.  Blockchain technology in 2017 is like the internet in 1985, most people have no idea it even exists, and even those who are excited about it have no idea what exactly it will look like in a few decades.  And maybe the killer app (such as the WWW was for the internet) hasn't even been invented or thought of yet.  I think it is possible that revolutionising money is just the beginning of what the blockchain will do.  Back in 1985 the internet was supposed to revolutionise mail delivery and personal communication, I don't think many people thought it would change the entire global retail industry or the entire entertainment industry in their lifetimes.
Title: Re: Cryptocurrencies
Post by: wachtwoord on May 10, 2017, 01:33:07 AM
The right question isn't whether it can be improved but rather whether it's good enough :)
Title: Re: Cryptocurrencies
Post by: SharperDingaan on May 10, 2017, 11:42:38 AM
It's more useful to think of blockchain technology as the start of another industrial revolution; over time the technologies don't go away, they just get subsumed by something better. But each time the revolution starts - it is a material improvement on what went before it.

Blockchain is evolving; some suggest that we're even currently entering Blockchain 4.0.
Each version takes us to a fork.

SD   
Title: Re: Cryptocurrencies
Post by: Mark Jr. on May 11, 2017, 06:47:33 PM
i don't really understand crypto.

It seems like a successful one required widespread adoption, yet being volatile and hoarded by speculators goes counter to merchant adoption. On the other hand one that is stable and non-volatile which merchants may adopt is not one which you can speculate on.

It is basically lose lose.

That sounds pretty close to what happened with the precursor to crypto-currencies: digital gold currencies of the early 00's era.

e-gold was widely used, liquid but had horrible governance and was eventually shut down.
Goldmoney had a much better governance structure but nobody used it outside of storing gold digitally (merchants were not using goldmoney for payments, e-gold had that pretty much locked).

e-gold went more or less to zero (well it was shutdown, there is still a lingering class action settlement going for what's left)

goldmoney is still around to this day, most recently being merged with Toronto based Bitgold, so interestingly, you can now convert bitcoin into vaulted gold (goldmoney) or even physical gold. Bitgold is also publicly traded on the TSX under "XAU".
Title: Re: Cryptocurrencies
Post by: Mark Jr. on May 11, 2017, 07:08:50 PM
When your mechanic and plumber start investing and touting the wonders of cryptocurrency, you should start to get concerned!  Both have tried to arrange meetings with me recently on how amazing and hot Bitcoin is, as well as they want to introduce me to their Bitcoin guys.

Those are the people who are reacting purely to the price of Bitcoin, in that sense we are probably in another bubble, not the first or the last for the BTC price. One thing I have noticed about the crypto-currency economy is that their "secular cycles" are a lot more compressed than other cycles. The whole space is moving so fast it is simply dizzying. If I were a New-Age Futurist Flake (NAFF?) I would say that a "monetary-technological singularity has occurred" (but I'm not).

Also, the fact that Patrick Byrne is now spending Overstock.com money on this, should also concern people!

I know one of the investments Overstock made into the space and it's actually one of the better ones I've seen.  Real company, actual service, has a nice geographical niche completely locked down, I've met the CEO and he's quite smart and capable. I actually use his platform sometimes.

Cryptocurrency is the future, but the winners will be few and far between, like how Amazon presently leads the internet wars with the dead carcasses of its competitors littering the street or barely surviving.

I still think it's for the most part too early to tell not only who the winners will be but what they're going to be. It may not even be bitcoin (wonderful comment made earlier in this thread was "is bitcoin facebook? or myspace?").

There is a compelling book about this entire phenomenon by Nick Gogerty called "The Nature of Value" (I may have mentioned it in the books forum once), about how technology shifts go through 4 distinct quadrants and 2 of them are horrible for capital allocators. Blockchain is still in that "emerging" quadrant.

Personally all I did was a few years ago I just started accepting bitcoin as payment at my business (domain registations & web hosting), the volume was so low we just threw it into a pile and left it there. Now that pile isn't looking so small anymore, between the incremental daily transactions of a few years and the price rise it's looking quite nice.

Ethereum could be meaningful, when Goldman and JPM et al formed the Enterprise Ethereum Alliance I knew this was the one "alt-coin" to take a flyer on and my first tranche is a 10x. How often does that happen? (I should have bet it EVERYTHING I had! Just kidding). I just knew that with GS and JPM involved it was going to separate from the pack of altcoins. That said, I still haven't seen an actual application that's very far beyond the crypto-currency / blockchain / smart contract equiv. of "hello world" running on ethereum.
Title: Re: Cryptocurrencies
Post by: SharperDingaan on May 13, 2017, 05:21:45 AM
If you are holding Bitcoin - you may want to exit in the next few days.
https://www.yahoo.com/tech/hackers-exploit-stolen-u-spy-agency-tool-launch-000320843--finance.html

What isn't being stated in this story is that the payment is to be made in Bitcoin, & that the corrective software patch was released by Microsoft almost 6 months ago. Russian hackers that want to live, don't shit where they sleep.

Payment in Bitcoin indicates the attack was not meant to succeed. To collect the payment the payer has to know the public key to pay to - & the seller cannot rely on intimidation to keep the keys quiet as they don't know which networks will get hit. The transparency of Bitcoin also makes tracking very easy. But what does happen is a spike in the price and liquidity of Bitcoin as folks rush to purchase the coin - enabling bulk sale of existing coin. In the securities world its called 'working the box'.

To use the spike you must already have the coin, & in quantity; there are few possibilities.
Buyer beware.

SD 

 
Title: Re: Cryptocurrencies
Post by: rkbabang on May 13, 2017, 08:52:02 AM
There are Bitcoin mixers which can anonymize your Bitcoin, but you could be correct. I am not concerned about the short term price though. If it falls by half or more it won't be the first time nor the last. I plan to hold for a decade or more.
Title: Re: Cryptocurrencies
Post by: SharperDingaan on May 13, 2017, 09:17:18 AM
There are Bitcoin mixers which can anonymize your Bitcoin, but you could be correct. I am not concerned about the short term price though. If it falls by half or more it won't be the first time nor the last. I plan to hold for a decade or more.

Mixers disguise who paid you, but you're still the recipient of the coin - & your public key is visible to all.
If it rises rapidly, & you sell (for security) - nothing prevents you buying it back later (at hopefully a lot less).

Interesting piece from Quartz attached. Note the links between Etherium and Bitcoin
https://qz.com/981814/the-strange-mix-of-reasons-why-bitcoin-has-soared-to-all-time-records/?utm_source=YPL&yptr=yahoo

SD
Title: Re: Cryptocurrencies
Post by: Mark Jr. on May 13, 2017, 01:37:19 PM
I don't think the WannaCry worm (which is what you're talking about) has anything to do with "spiking the BTC price" or anything like that, it's just a straight ahead ransomware attack with the added novelty of using a worm delivery system instead of spearphishing. Given that it attacks IIS servers and not workstations this makes sense. Bitcoin has always been the payment method in ransomware attacks, it's a huge business globally, and it's easy to move the BTC around and not get caught.

If you're looking for a rationale to dump any bitcoin you're holding, WannaCry isn't it.
Title: Re: Cryptocurrencies
Post by: SharperDingaan on May 15, 2017, 01:23:54 PM
We live and learn every day ...

http://www.ibtimes.com/wannacry-ransomware-attack-hackers-raised-50000-bitcoins-now-what-2539199

Yet by Monday morning, the London-based bitcoin tracking experts at Elliptic Enterprises Ltd. found only about $50,000 worth of bitcoin ransoms were paid, Bloomberg reported.

SD
Title: Re: Cryptocurrencies
Post by: Jurgis on May 15, 2017, 02:16:27 PM
We live and learn every day ...

http://www.ibtimes.com/wannacry-ransomware-attack-hackers-raised-50000-bitcoins-now-what-2539199

Yet by Monday morning, the London-based bitcoin tracking experts at Elliptic Enterprises Ltd. found only about $50,000 worth of bitcoin ransoms were paid, Bloomberg reported.

SD

Crime just doesn't pay... enough.  8)
Title: Re: Cryptocurrencies
Post by: rkbabang on May 16, 2017, 05:34:19 AM
We live and learn every day ...

http://www.ibtimes.com/wannacry-ransomware-attack-hackers-raised-50000-bitcoins-now-what-2539199

Yet by Monday morning, the London-based bitcoin tracking experts at Elliptic Enterprises Ltd. found only about $50,000 worth of bitcoin ransoms were paid, Bloomberg reported.

SD

Crime just doesn't pay... enough.  8)

Even if they somehow get ahold of their $50k they caused an enormous amount of damage for very little reward.  It's like a mugger who kills someone for $5 in their wallet.  Luckily a 22 year old who still lives with his parents accidentally stopped the attack.

http://www.businessinsider.com/how-22-year-old-stopped-global-cyberattack-ransomware-registering-domain-2017-5
Title: Re: Cryptocurrencies
Post by: Jurgis on May 16, 2017, 08:26:34 AM
22 year olds who live with their parents are the backbone of our society.  8)
Title: Re: Cryptocurrencies
Post by: Spekulatius on May 17, 2017, 04:30:37 AM
Aren't these cryptocurrencies inflationary? As I understand that it, mining these cryptocurrencies does not create any real value, so basically, a fan cryptocurrency  has a value, this means that the value of the currency we currently own is devalued. Right now, the total value of the crypto currency creates an s probably still too small to matter, but if it becomes significant, there should be an inflationary impact on the economies.

I also think that the government eventually will crack down on this for above reason and the ease to use it for money laundry. Sure, the government mayn't be able to control who owns it or who uses it, but if they make the use of he cryptocurrency unlawful, then the cryptocurrency would become a Mafia currency of some sort and be worth far less for most of us.

I think it is just a matter of time when this get regulated to some extend. This is now like the "Wild West", but eventually, the Wild West was ruled by law as well.
Title: Re: Cryptocurrencies
Post by: SnarkyPuppy on May 20, 2017, 08:28:08 AM
Aren't these cryptocurrencies inflationary? As I understand that it, mining these cryptocurrencies does not create any real value, so basically, a fan cryptocurrency  has a value, this means that the value of the currency we currently own is devalued. Right now, the total value of the crypto currency creates an s probably still too small to matter, but if it becomes significant, there should be an inflationary impact on the economies.

I also think that the government eventually will crack down on this for above reason and the ease to use it for money laundry. Sure, the government mayn't be able to control who owns it or who uses it, but if they make the use of he cryptocurrency unlawful, then the cryptocurrency would become a Mafia currency of some sort and be worth far less for most of us.

I think it is just a matter of time when this get regulated to some extend. This is now like the "Wild West", but eventually, the Wild West was ruled by law as well.

You could argue that governments providing some layer of regulation could be a catalyst for increase in layman use.   
Title: Re: Cryptocurrencies
Post by: SharperDingaan on May 20, 2017, 03:29:36 PM
Aren't these cryptocurrencies inflationary? As I understand that it, mining these cryptocurrencies does not create any real value, so basically, a fan cryptocurrency  has a value, this means that the value of the currency we currently own is devalued. Right now, the total value of the crypto currency creates an s probably still too small to matter, but if it becomes significant, there should be an inflationary impact on the economies.

I also think that the government eventually will crack down on this for above reason and the ease to use it for money laundry. Sure, the government mayn't be able to control who owns it or who uses it, but if they make the use of he cryptocurrency unlawful, then the cryptocurrency would become a Mafia currency of some sort and be worth far less for most of us.

I think it is just a matter of time when this get regulated to some extend. This is now like the "Wild West", but eventually, the Wild West was ruled by law as well.

The experience to date suggests that cryptocurrency is not inflationary. Given that very little cryptocurrency is actually accepted for payment purposes, & those that are (ie: Bitcoin) don’t transact very much – that’s not unreasonable.

The broader problem is the inflation metric itself – quantity of money/goods available, usually measured as an ‘M’ number, divided by GDP. Where’s everything (flight, hotel, meals, etc.) you bought using loyalty points?  (ie Visa, Aeroplan, Airmiles, Car Rentals, Travelocity, Uber, airBnB, etc.) – all of which is just another type of cryptocurrency. If the ‘M’ isn’t capturing it, the official inflation rate may well be understating by a good 25-35bp. 

Central banks are heavily involved in cryptocurrency, and it will ultimately be regulated by central banks – with everything linked to the internet of things (IoT). Anything not on the IoT essentially being unusable for most purposes - because it doesn’t have a blockchain history.

SD
Title: Re: Cryptocurrencies
Post by: Desert_Rat on May 22, 2017, 08:23:07 AM
"If you bought $100 of bitcoin 7 years ago, you'd be sitting on $72.9 million now after new record high"
https://finance.yahoo.com/news/bought-100-bitcoin-7-years-081422112.html (https://finance.yahoo.com/news/bought-100-bitcoin-7-years-081422112.html)

I found this particularly depressing because I sought to do that but had such a hard time acquiring them I passed. But if I had bought my target amount ($1000) I may still be holding them as I do krugerrands bought 20~ years ago.

$729,000,000!
Title: Re: Cryptocurrencies
Post by: rkbabang on May 22, 2017, 09:13:20 AM
"If you bought $100 of bitcoin 7 years ago, you'd be sitting on $72.9 million now after new record high"
https://finance.yahoo.com/news/bought-100-bitcoin-7-years-081422112.html (https://finance.yahoo.com/news/bought-100-bitcoin-7-years-081422112.html)

I found this particularly depressing because I sought to do that but had such a hard time acquiring them I passed. But if I had bought my target amount ($1000) I may still be holding them as I do krugerrands bought 20~ years ago.

$729,000,000!



Happy Bitcoin Pizza Day.

That is pretty depressing.  I was following bitcoin since it was far less than $1.  I remember the excitement on the discussion boards when it achieved "dollar parity". 

The only way to aquire it was either through mining (which I never looked very closely into) or MtGox which was difficult to setup an account, they only took wire transfers or something, so I too never bought any.  I watched it soar to over $1K and then back down.  I finally started acquiring some at around $200-$300 per bitcoin.  I also choose not to participate in the ETH ICO and didn't start acquiring it until it was between $4-$8.

Oh well, such is life.  At least I didn't acquire 10K bitcoins (~$22M today) and trade them for a pizza.
Title: Re: Cryptocurrencies
Post by: Desert_Rat on May 22, 2017, 09:34:00 AM
Yep, I now recall that it was the wire transfer that had me pass. It had me question the legitimacy of it all.
Title: Re: Cryptocurrencies
Post by: Jurgis on May 22, 2017, 11:03:58 AM
Didn't MtGox go under and everyone who held bitcoin in it get shafted? (Yeah, I know you coulda moved bitcoin out of its wallets, but still).
Title: Re: Cryptocurrencies
Post by: rkbabang on May 22, 2017, 11:35:17 AM
Didn't MtGox go under and everyone who held bitcoin in it get shafted? (Yeah, I know you coulda moved bitcoin out of its wallets, but still).

Yes.  They were hacked (some people think it was an inside job).   Holding a balance on an exchange for longer than it takes to make your trades is a bad idea even today.  Transfer in, make your trade, and transfer back out. Today this can be done in minutes.  Back then with the wire transfers to get $US in/out it was a longer process, but your bitcoin could still be transferred in or out quickly.
Title: Re: Cryptocurrencies
Post by: Mark Jr. on May 22, 2017, 05:48:37 PM
Didn't MtGox go under and everyone who held bitcoin in it get shafted? (Yeah, I know you coulda moved bitcoin out of its wallets, but still).

MtGox was flashing bright red warning lights for months before it went bust, anybody who was paying attention had their BTC out before it happened. In this respect it is very similar to any other failure, i.e. the people in Greece or Cyprus lining up at ATMs and banks when they were far too late to get their money out.
Title: Re: Cryptocurrencies
Post by: Mark Jr. on May 22, 2017, 05:54:10 PM
Aren't these cryptocurrencies inflationary? As I understand that it, mining these cryptocurrencies does not create any real value, so basically, a fan cryptocurrency  has a value, this means that the value of the currency we currently own is devalued. Right now, the total value of the crypto currency creates an s probably still too small to matter, but if it becomes significant, there should be an inflationary impact on the economies.

Bitcoin is inelastic in that it cannot be "minted on demand" or by fiat and there is a hard cap on how many bitcoins will ever be mined (21 million). In that sense Bitcoin is a deflationary currency, it has a constraint similar to physical gold, only bitcoin's constraint is mathematical.

I also think that the government eventually will crack down on this for above reason and the ease to use it for money laundry. Sure, the government mayn't be able to control who owns it or who uses it, but if they make the use of he cryptocurrency unlawful, then the cryptocurrency would become a Mafia currency of some sort and be worth far less for most of us.

I think it is just a matter of time when this get regulated to some extend. This is now like the "Wild West", but eventually, the Wild West was ruled by law as well.

This is why I think the eventual winner will be ethereum. With Goldman Sachs and JP Morgan behind ethereum the government will leave it alone, or regulate it in whatever manner the Vampyre Squid and the other banksters steer them.
Title: Re: Cryptocurrencies
Post by: Liberty on May 23, 2017, 06:57:53 AM
New piece by Ben Thompson about cryptocurrencies and shared myths and tulips:

https://stratechery.com/2017/tulips-myths-and-cryptocurrencies/
Title: Re: Cryptocurrencies
Post by: CONeal on May 23, 2017, 08:56:56 AM
For those of you that have experience with Cryptocurrencies can you please provide insight on the following.

What is the best exchange to buy ETH?

Is the ETH just stored on the account (ex. Gemini)? 

Is there an up-to-date guide on how all this works?  I get confused when I read about opening wallets and the 5 other hoops you have to jump through.

Any additional insight I should know (other then I will probably lose all my money)? 
Title: Re: Cryptocurrencies
Post by: rkbabang on May 23, 2017, 09:11:24 AM
For those of you that have experience with Cryptocurrencies can you please provide insight on the following.

What is the best exchange to buy ETH?

Is the ETH just stored on the account (ex. Gemini)? 

Is there an up-to-date guide on how all this works?  I get confused when I read about opening wallets and the 5 other hoops you have to jump through.

Any additional insight I should know (other then I will probably lose all my money)? 

If you want dead-simple.  Open up an account with coinbase (https://www.coinbase.com/).  It is a US based company and follows all US laws, reports to the IRS, etc.  You can open an account, link your bank account and buy bitcoin, ether, or litecoin.  You can use their mobile app as a mobile wallet to do all of this and to send/receive any of the currencies.

If you want to stay more private I'd recommend downloading the Jaxx mobile wallet (or chrome extension on your PCs chrome browser).  You can then obtain bitcoin, eth, or a whole host of others, and have it transferred directly into your wallet.  The problem is how?   If you have a bitcoin ATM near you (there are a few near me in NH) then you can put cash in and have it deposit bitcoin into your Jaxx wallet. Or you could find someone locally willing to sell you some for cash (sometimes these people advertise on craigslist, but be careful this sounds risky to me).   Once you have bitcoin one way or the other you can use Shapeshift which is built right into the Jaxx wallet to convert bitcoin to other cryptocurrencies. EDIT: Here is a site which lists locations of bitcoin ATMs.  I'm not sure how accurate or complete it is, but a few of the ATMs I know about are listed there correctly:
https://coinatmradar.com/country/226/bitcoin-atm-united-states/


There are other wallets and exchanges, but those are the two methods I'd recommend.

Title: Re: Cryptocurrencies
Post by: rkbabang on May 23, 2017, 10:06:16 AM
For those of you that have experience with Cryptocurrencies can you please provide insight on the following.

What is the best exchange to buy ETH?

Is the ETH just stored on the account (ex. Gemini)? 

If you use coinbase it works like Gemini you have an account and need to trust coinbase.  You could however use coinbase (or Gemini) to acquire your cryptocurrency and then send it to a wallet which you control the private keys, such as Jaxx (or another I've used is Bread Wallet, but I like Jaxx better now from a usability standpoint and the fact that it supports other currencies besides bitcoin and has Shapeshift integration. Bread Wallet is bitcoin only).  coinbase and Gemini will report your transactions to the IRS, so if you use this method you should keep track of all of your buys and sells for capital gains purposes (you are legally obligated to do this in the US even if you acquire your bitcoins using cash at an ATM or from a private party).   

Quote
Is there an up-to-date guide on how all this works?  I get confused when I read about opening wallets and the 5 other hoops you have to jump through.

Any additional insight I should know (other then I will probably lose all my money)? 

Here's a guide I found, but have not read through it, so YMMV.   http://www.coindesk.com/information/
I did read "Mastering Bitcoin" by Andreas Antonopoulos which I'd recommend if you want a deeper understanding of how it all works. Not necessary to use it though.
My best advice would be to open an account with coinbase or Gemini and make some small transactions to see how it works. Buy some bitcoin and ether, transfer it to your Jaxx mobile wallet, use shapeshift to convert some to Dash or something else.   Get a feel for it.  And yes, it might be just a bubble and you can lose money.
Title: Re: Cryptocurrencies
Post by: CONeal on May 23, 2017, 11:05:48 AM
For those of you that have experience with Cryptocurrencies can you please provide insight on the following.

What is the best exchange to buy ETH?

Is the ETH just stored on the account (ex. Gemini)? 

If you use coinbase it works like Gemini you have an account and need to trust coinbase.  You could however use coinbase (or Gemini) to acquire your cryptocurrency and then send it to a wallet which you control the private keys, such as Jaxx (or another I've used is Bread Wallet, but I like Jaxx better now from a usability standpoint and the fact that it supports other currencies besides bitcoin and has Shapeshift integration. Bread Wallet is bitcoin only).  coinbase and Gemini will report your transactions to the IRS, so if you use this method you should keep track of all of your buys and sells for capital gains purposes (you are legally obligated to do this in the US even if you acquire your bitcoins using cash at an ATM or from a private party).   

Quote
Is there an up-to-date guide on how all this works?  I get confused when I read about opening wallets and the 5 other hoops you have to jump through.

Any additional insight I should know (other then I will probably lose all my money)? 

Here's a guide I found, but have not read through it, so YMMV.   http://www.coindesk.com/information/
I did read "Mastering Bitcoin" by Andreas Antonopoulos which I'd recommend if you want a deeper understanding of how it all works. Not necessary to use it though.
My best advice would be to open an account with coinbase or Gemini and make some small transactions to see how it works. Buy some bitcoin and ether, transfer it to your Jaxx mobile wallet, use shapeshift to convert some to Dash or something else.   Get a feel for it.  And yes, it might be just a bubble and you can lose money.

Thank you very much.  If I download it into a wallet and stored it on my PC do I need to have a fear of someone hacking my computer and stealing the wallet?  If my hard drive crashed am I just screwed out of the bitcoins?
Title: Re: Cryptocurrencies
Post by: rkbabang on May 23, 2017, 11:36:53 AM
For those of you that have experience with Cryptocurrencies can you please provide insight on the following.

What is the best exchange to buy ETH?

Is the ETH just stored on the account (ex. Gemini)? 

If you use coinbase it works like Gemini you have an account and need to trust coinbase.  You could however use coinbase (or Gemini) to acquire your cryptocurrency and then send it to a wallet which you control the private keys, such as Jaxx (or another I've used is Bread Wallet, but I like Jaxx better now from a usability standpoint and the fact that it supports other currencies besides bitcoin and has Shapeshift integration. Bread Wallet is bitcoin only).  coinbase and Gemini will report your transactions to the IRS, so if you use this method you should keep track of all of your buys and sells for capital gains purposes (you are legally obligated to do this in the US even if you acquire your bitcoins using cash at an ATM or from a private party).   

Quote
Is there an up-to-date guide on how all this works?  I get confused when I read about opening wallets and the 5 other hoops you have to jump through.

Any additional insight I should know (other then I will probably lose all my money)? 

Here's a guide I found, but have not read through it, so YMMV.   http://www.coindesk.com/information/
I did read "Mastering Bitcoin" by Andreas Antonopoulos which I'd recommend if you want a deeper understanding of how it all works. Not necessary to use it though.
My best advice would be to open an account with coinbase or Gemini and make some small transactions to see how it works. Buy some bitcoin and ether, transfer it to your Jaxx mobile wallet, use shapeshift to convert some to Dash or something else.   Get a feel for it.  And yes, it might be just a bubble and you can lose money.

Thank you very much.  If I download it into a wallet and stored it on my PC do I need to have a fear of someone hacking my computer and stealing the wallet?  If my hard drive crashed am I just screwed out of the bitcoins?

Using Jaxx you don't need to worry about losing your wallet if your harddrive fails or your phone dies if you write down your backup phrase.  It is a 12 word code that will restore your wallet to any device.  So you can have the same wallet on your PC and your phone.  Create it in one place and use the 12 world phrase to load it onto the other device.  Any transactions you make with one device will be seen by the other because it is on the blockchain.   In fact you can download Jaxx now at https://jaxx.io/ and create your wallet (it will have a zero balance for all coins) and see your backup phrase to see what I am talking about.  Write that down and put it someplace safe, like a safe, a lock box, or even a safety deposit box.  If someone finds it they can get full access to your wallet.

As far as if someone hacks your computer or phone, you can create a pin code to open Jaxx so they would at least have to crack that, but yes some people keep only small amounts on their phone or computer and keep larger amounts on paper wallets (http://www.coindesk.com/information/paper-wallet-tutorial/) or hardware wallets such as TREZOR (https://trezor.io/) or Nano Ledger (https://www.ledgerwallet.com/products/ledger-nano-s). 

The great thing about these currencies is that using tiny amounts is exactly the same as large amounts.  You can buy $10 worth of bitcoin in coinbase, send $5 to Jaxx, use shapshift to convert $1 to ETH and $1 to DASH.  Create a paper wallet and put $0.50 in it, use a block explorer (https://blockexplorer.com/) to verify that your paper wallet has the value, then take $0.25 cents back out.  In this way you can experiment with all these things, get comfortable with them, and not risk any real money.
Title: Re: Cryptocurrencies
Post by: Jurgis on May 23, 2017, 12:15:24 PM
Do I understand it correctly that ATM takes 20.5% to convert cash to bitcoin?  ???

Some take 7%... but still.
Title: Re: Cryptocurrencies
Post by: SnarkyPuppy on May 23, 2017, 12:22:21 PM
rkbabang - thanks for your insight, definitely learning a lot observing your posts. 

Have you looked into ZCash?   JPmorgan just did a deal with the founders (http://www.coindesk.com/jpmorgan-partners-zcash-team-add-enterprise-security/).   Also, Naval Ravikant (https://www.farnamstreetblog.com/wp-content/uploads/2017/02/Naval-Ravikant-TKP.pdf) has publicly talked about having a position in ZCash.   

Curious if you have any thoughts/if you own?
Title: Re: Cryptocurrencies
Post by: rkbabang on May 23, 2017, 12:47:15 PM
rkbabang - thanks for your insight, definitely learning a lot observing your posts. 

Have you looked into ZCash?   JPmorgan just did a deal with the founders (http://www.coindesk.com/jpmorgan-partners-zcash-team-add-enterprise-security/).   Also, Naval Ravikant (https://www.farnamstreetblog.com/wp-content/uploads/2017/02/Naval-Ravikant-TKP.pdf) has publicly talked about having a position in ZCash.   

Curious if you have any thoughts/if you own?

Zcash has been on my list to look further into, but so far I haven't.  There are so many interesting projects out there that there isn't enough time to look into them all.  Bytecoin is another one and I just heard about EOS recently which looks interesting too https://steemit.com/@eosio
I really like the article Liberty posted above: https://stratechery.com/2017/tulips-myths-and-cryptocurrencies/
I think that if this is a bubble it is more analogous to the late 90s internet bubble.  A lot of development, a lot of money poured into a lot of different ideas, but most of them will fail.  It is probably too early to know which ones will be the Amazon.com's or the Ebay's and which ones are the pets.com or the Netscape's. 
 
I only own Ethereum(ETH), bitcoin(BTC), Monero(XMR), & Dash(DASH).  And that is the order from my largest holding to my smallest at today's prices.
Title: Re: Cryptocurrencies
Post by: SnarkyPuppy on May 23, 2017, 12:49:49 PM
rkbabang - thanks for your insight, definitely learning a lot observing your posts. 

Have you looked into ZCash?   JPmorgan just did a deal with the founders (http://www.coindesk.com/jpmorgan-partners-zcash-team-add-enterprise-security/).   Also, Naval Ravikant (https://www.farnamstreetblog.com/wp-content/uploads/2017/02/Naval-Ravikant-TKP.pdf) has publicly talked about having a position in ZCash.   

Curious if you have any thoughts/if you own?

Zcash has been on my list to look further into, but so far I haven't.  There are so many interesting projects out there that there isn't enough time to look into them all.  Bytecoin is another one and I just heard about EOS recently which looks interesting too https://steemit.com/@eosio
I really like the article Liberty posted above: https://stratechery.com/2017/tulips-myths-and-cryptocurrencies/
I think that if this is a bubble it is more analogous to the late 90s internet bubble.  A lot of development, a lot of money poured into a lot of different ideas, but most of them will fail.  It is probably too early to know which ones will be the Amazon.com's or the Ebay's and which ones are the pets.com or the Netscape's. 
 
I only own Ethereum(ETH), bitcoin(BTC), Monero(XMR), & Dash(DASH).  And that is the order from my largest holding to my smallest at today's prices.

Thanks
Title: Re: Cryptocurrencies
Post by: rkbabang on May 23, 2017, 12:51:02 PM
Fidelity to allow clients to see digital currencies on website (https://www.reuters.com/article/us-fidelity-bitcoin-idUSKBN18J20P)
Title: Re: Cryptocurrencies
Post by: SharperDingaan on May 23, 2017, 02:16:52 PM
Aren't these cryptocurrencies inflationary? As I understand that it, mining these cryptocurrencies does not create any real value, so basically, a fan cryptocurrency  has a value, this means that the value of the currency we currently own is devalued. Right now, the total value of the crypto currency creates an s probably still too small to matter, but if it becomes significant, there should be an inflationary impact on the economies.

I also think that the government eventually will crack down on this for above reason and the ease to use it for money laundry. Sure, the government mayn't be able to control who owns it or who uses it, but if they make the use of he cryptocurrency unlawful, then the cryptocurrency would become a Mafia currency of some sort and be worth far less for most of us.

I think it is just a matter of time when this get regulated to some extend. This is now like the "Wild West", but eventually, the Wild West was ruled by law as well.

The experience to date suggests that cryptocurrency is not inflationary. Given that very little cryptocurrency is actually accepted for payment purposes, & those that are (ie: Bitcoin) don’t transact very much – that’s not unreasonable.

The broader problem is the inflation metric itself – quantity of money/goods available, usually measured as an ‘M’ number, divided by GDP. Where’s everything (flight, hotel, meals, etc.) you bought using loyalty points?  (ie Visa, Aeroplan, Airmiles, Car Rentals, Travelocity, Uber, airBnB, etc.) – all of which is just another type of cryptocurrency. If the ‘M’ isn’t capturing it, the official inflation rate may well be understating by a good 25-35bp. 

Central banks are heavily involved in cryptocurrency, and it will ultimately be regulated by central banks – with everything linked to the internet of things (IoT). Anything not on the IoT essentially being unusable for most purposes - because it doesn’t have a blockchain history.

SD

Had some interesting discussions around this …

Assume you draw $1000 from your bank account to buy a plane ride + ability to earn travel points.  Were travel points not part of the deal you would only have paid $909. Hence buying those points created 10% inflation (1000/909) at the time you bought the plane ticket …. & offsetting deflation at the time you used the points to pay for your next plane ride.

So long as more points are created than are redeemed we inflate – hence the expectation that cryptocurrency is inflationary. But if we generally collectively redeem points when we aren’t flush (ie: in a down-turn) – they are deflationary, and it’s on top of the down-turn related asset deflation. All else equal, we end up with higher highs and lower lows.

So .. we really don’t know what happens - but it’s highly likely that it adds to volatility.
Not about to test a central banker on it!

SD   
Title: Re: Cryptocurrencies
Post by: CONeal on May 23, 2017, 08:42:20 PM
"Ethereum could be meaningful, when Goldman and JPM et al formed the Enterprise Ethereum Alliance I knew this was the one "alt-coin" to take a flyer on and my first tranche is a 10x. How often does that happen? (I should have bet it EVERYTHING I had! Just kidding). I just knew that with GS and JPM involved it was going to separate from the pack of altcoins. That said, I still haven't seen an actual application that's very far beyond the crypto-currency / blockchain / smart contract equiv. of "hello world" running on ethereum."


Have looked at Cryptocurrency and played around with it for a few hours.  And it keeps bringing me back to the statement above that I just can't figure out. 

The Enterprise Ethereum Alliance is now up to 86 members with the sole focus of working on blockchain technology.  The companies in the alliance are not all banks and crytocurrency companies as now Samsung is also a member.  If you take away the perceived value of a blockchain currently being assigned (cryptocurrency).

What are the benefits of a blockchain and how could it be used?  Is this just a piece of code to securely wrap around money transfers, so they are not hacked or is the intent to use a blockchain for some other reason that could provide some other type of benefit.  Guess I'm just not understanding why this blockchain technology is being as highly touted as it currently is. 

I understand that this is suppose to be a more secure method for example, only specific people being able to see a classified file.  How is this different and more beneficial then say password protecting an Excel file so that only the people that should have access has the password to actually see it.  Or another example, encrypting a password protected file that contains names and addresses of customers.  The data is already being sent over in a secure manner.  How would a blockchain be any better?
Title: Re: Cryptocurrencies
Post by: meiroy on May 23, 2017, 09:35:56 PM
CONeal,

Watch this:
https://www.youtube.com/watch?v=93E_GzvpMA0

Then this:
https://www.youtube.com/watch?v=_160oMzblY8
Title: Re: Cryptocurrencies
Post by: CONeal on May 23, 2017, 10:20:33 PM
CONeal,

Watch this:
https://www.youtube.com/watch?v=93E_GzvpMA0

Then this:
https://www.youtube.com/watch?v=_160oMzblY8

Ahh, thanks for those videos.  Now beginning to see how this could be used for places like a hospital.  Gives me a completely different perspective of what is going on.

Am I correct with the following statement?   Don't focus on the cryptocurrency value attached to to the blockchain technology.  Focus on the specific blockchain technology and what it's intended to do.  The release of cryptocurrency is more or less a test of the validity of the underlying blockchain technology.  Companies will then use the underlying technology (the blockchain copy) for their intended use.
Title: Re: Cryptocurrencies
Post by: wachtwoord on May 24, 2017, 03:31:44 AM
A blockchain has no value without the monetary aspect because there is no incentive to secure it without it. The tokens on a blockchain need to have value (so yes bitcoin is by far the most interesting one, by several orders of magnitude).
Title: Re: Cryptocurrencies
Post by: meiroy on May 24, 2017, 05:03:43 AM
CONeal,

Watch this:
https://www.youtube.com/watch?v=93E_GzvpMA0

Then this:
https://www.youtube.com/watch?v=_160oMzblY8

Ahh, thanks for those videos.  Now beginning to see how this could be used for places like a hospital.  Gives me a completely different perspective of what is going on.

Am I correct with the following statement?   Don't focus on the cryptocurrency value attached to to the blockchain technology.  Focus on the specific blockchain technology and what it's intended to do.  The release of cryptocurrency is more or less a test of the validity of the underlying blockchain technology.  Companies will then use the underlying technology (the blockchain copy) for their intended use.
CONeal,

Watch this:
https://www.youtube.com/watch?v=93E_GzvpMA0

Then this:
https://www.youtube.com/watch?v=_160oMzblY8

Ahh, thanks for those videos.  Now beginning to see how this could be used for places like a hospital.  Gives me a completely different perspective of what is going on.

Am I correct with the following statement?   Don't focus on the cryptocurrency value attached to to the blockchain technology.  Focus on the specific blockchain technology and what it's intended to do.  The release of cryptocurrency is more or less a test of the validity of the underlying blockchain technology.  Companies will then use the underlying technology (the blockchain copy) for their intended use.

Blockchain finance is one of the applications of the blockchain.  You can google "blockchain applications" to read more about the various uses.

Title: Re: Cryptocurrencies
Post by: rkbabang on May 24, 2017, 05:17:31 AM
I found these articles informing.  One question I had was why do these apps lately all seem to be issuing their own tokens on top of the Ethereum blockchain rather than using Ether directly in their apps.  It is a way to raise money around US securities law.  That is why they issue a token rather than a share of equity.

From: The difference between App Coins and Protocol Tokens (https://medium.com/0x-project/the-difference-between-app-coins-and-protocol-tokens-7281a428348c)

"Unfortunately due to securities regulations it is difficult for dApp developers to raise money on the blockchain through a public sale of unregistered securities. So while equity app coins might provide the most logical incentives for both dApp developers and investors alike, it is currently too risky to structure app coins in this way. That being said, public crowd sales are an irresistible source of funding for dApp developers and with traditional venture capital firms just starting to dip their feet into the world of digital assets, there aren’t many reliable alternatives."

------


And from: A beginner’s guide to Ethereum tokens (https://blog.coinbase.com/a-beginners-guide-to-ethereum-tokens-fbd5611fe30b)

(https://cdn-images-1.medium.com/max/1200/1*fG1euKN8v0-Q32gWGPuihA.png)
Title: Re: Cryptocurrencies
Post by: rkbabang on May 24, 2017, 06:16:54 AM
I found these articles informing.  One question I had was why do these apps lately all seem to be issuing their own tokens on top of the Ethereum blockchain rather than using Ether directly in their apps.  It is a way to raise money around US securities law.  That is why they issue a token rather than a share of equity.

From: The difference between App Coins and Protocol Tokens (https://medium.com/0x-project/the-difference-between-app-coins-and-protocol-tokens-7281a428348c)

"Unfortunately due to securities regulations it is difficult for dApp developers to raise money on the blockchain through a public sale of unregistered securities. So while equity app coins might provide the most logical incentives for both dApp developers and investors alike, it is currently too risky to structure app coins in this way. That being said, public crowd sales are an irresistible source of funding for dApp developers and with traditional venture capital firms just starting to dip their feet into the world of digital assets, there aren’t many reliable alternatives."

------


And from: A beginner’s guide to Ethereum tokens (https://blog.coinbase.com/a-beginners-guide-to-ethereum-tokens-fbd5611fe30b)

(https://cdn-images-1.medium.com/max/1200/1*fG1euKN8v0-Q32gWGPuihA.png)



I was just thinking about how this would work in an unregulated market?   These companies would design their apps to use Ether directly inside their apps, but raise money by issuing tokens on the blockchain which represented an equity share of the company.   These tokens would act just like stock does, but traded as easily as a cryptocurrency. They could be traded on the blockchain exchanges, they could be traded directly from person to person outside of an exchange, the company could issue "dividends" in Ether to token holders, the company could buy back tokens, or do secondary offerings to raise more capital.  Even non-tech companies could "go public" by issuing equity tokens on the Ethereum blockchain fairly easily.  These tokens would have an intrinsic value in the same way that stock does today, because they would represent shares in the company.  Of course since anyone could participate in these ICO events anonymously from anywhere in the world, this would be a legal nightmare in our current regulatory environment.
Title: Re: Cryptocurrencies
Post by: PLynchJr on May 24, 2017, 07:28:28 AM
Interesting discussion here.  One thing I don't understand about Bitcoin is what happens after 2040?  From my understanding there is a hard cap of 21 million Bitcoins with the last ones being produced in 2040.  Why would people continue to mine / verify transactions after 2040 if there is no financial reward?
Title: Re: Cryptocurrencies
Post by: rkbabang on May 24, 2017, 07:48:41 AM
Interesting discussion here.  One thing I don't understand about Bitcoin is what happens after 2040?  From my understanding there is a hard cap of 21 million Bitcoins with the last ones being produced in 2040.  Why would people continue to mine / verify transactions after 2040 if there is no financial reward?

There would still be a mining reward, which would come out of the transaction fees alone.  Also the date is 2140 not 2040, the likelihood of bitcoin still existing in exactly its current form without being hard forked into something different at least once along the way, and it still being the dominant cryptocurrency, 123 years from now seems slim to me.
Title: Re: Cryptocurrencies
Post by: rkbabang on May 24, 2017, 01:03:07 PM
A blockchain has no value without the monetary aspect because there is no incentive to secure it without it. The tokens on a blockchain need to have value (so yes bitcoin is by far the most interesting one, by several orders of magnitude).

I disagree, with your second point, not your first.  Yes a blockchain needs a token to give incentive to secure it, but I don't see bitcoin as the clear winner.  I'm leaning more toward Ethereum now, and not just because it has grown to be my largest crypto holding (by a factor of almost 2 now), but because it has a road-map which includes privacy changes and it is more functional being turing complete.   The Bitcoin community can't even get together to fix the blocksize issues and other scalability problems.  Right now I think BTC is surging because it is the gateway currency, i.e. the easiest way to acquire the others is to get BTC and then exchange it on an exchange or with shapeshift, etc.   Coinbase is the only way that I'm aware of to acquire ETH or LTC with US dollars directly and I am not aware of a way to buy any of the other altcoins except with BTC.  I have a feeling that will change rather quickly.  You will see ETH ATMs and other ways as ETH becomes more popular.

The Rise of Ethereum (http://www.nasdaq.com/article/the-rise-of-ethereum-cm794082) (http://www.nasdaq.com/article/the-rise-of-ethereum-cm794082):

"Over the years, Ethereum has garnered admiration and evoked immense interest across enterprises. Accenture observes, “Every self-respecting innovation lab is running and experimenting with Ethereum, including IBM, Microsoft, JP Morgan, and the R3 consortium.”

Ethereum is supported by Microsoft Azure and Alibaba Cloud to encourage innovation and adoption of the technology. However, the efforts remained scattered until the formation of the Ethereum Enterprise Alliance (EEA) in 2017.

The EEA brings together enterprises, startups, academics, technology vendors, and experts to work on Ethereum as an enterprise-grade technology. Its founding members include names like Microsoft, Credit Suisse, Intel, JP Morgan, UBS, Santander, ING, CME Group, BNY Mellon, Accenture, and Wipro. Some of these names (such as Microsoft, JP Morgan, and Santander) have been actively involved in exploring the blockchain technology in the recent years, while others are looking at becoming a part of the revolution that’s underway.

Microsoft believes that Ethereum is “evolving to address the needs of enterprises globally. Focusing on requirements like privacy, permissions and a pluggable architecture while retaining its public roots, Ethereum continues to widen the scope of what developers, businesses and consortiums can achieve.”

During Consensus 2017, Ethereum Enterprise Alliance added another 86 members—taking the total count to 116. EEA now represents well-known names from across different regions and industries, such as Mitsubishi UFJ, DTCC, Deloitte, Samsung SDS, Infosys, Toyota Research Institute, National Bank of Canada and Merck KGaA, among others."


Title: Re: Cryptocurrencies
Post by: rkbabang on May 25, 2017, 08:02:04 AM
The price of many cryptocurrencies continues to move way up, they have been on a tear all week.
https://coinmarketcap.com/all/views/all/#USD

Bitcoin now has a >$25B marketcap and Ether >$8B.   There are 4 cryptocurrencies with marketcaps above $1B, 13 above $100M, and ~185 of them above $1M

Since I wrote this 21 days ago, Bitcoin now has a $45B marketcap and Ether $19B.  There are 7 with caps >$1B, 31 above $100M, and 250 above $1M.

The total space is over $90B.
Title: Re: Cryptocurrencies
Post by: jb85 on May 25, 2017, 10:22:00 AM
91B is still only 91B/60T = 0.15% of world wide M2 currency

Title: Re: Cryptocurrencies
Post by: rkbabang on May 25, 2017, 10:32:54 AM
91B is still only 91B/60T = 0.15% of world wide M2 currency

So if you think this will represent 2% there is still a lot of growth left.  If you think it will be 15%, or 51%, or 80% there is a hell of lot of growth left.   :)
Title: Re: Cryptocurrencies
Post by: jb85 on May 25, 2017, 11:10:01 AM
91B is still only 91B/60T = 0.15% of world wide M2 currency

So if you think this will represent 2% there is still a lot of growth left.  If you think it will be 15%, or 51%, or 80% there is a hell of lot of growth left.   :)

Exactly. If you think there is any value at all, either as currency or store of value, then even at present prices, crypto in general is one of the most asymmetric bets of all time.

I can understand people saying bitcoin will go to zero. What I find odd is when people say the fair value is 50b to 100b.  Your basically saying it should be exactly 1% of world money supply which seems oddly specific
Title: Re: Cryptocurrencies
Post by: rkbabang on May 25, 2017, 11:30:07 AM
91B is still only 91B/60T = 0.15% of world wide M2 currency

So if you think this will represent 2% there is still a lot of growth left.  If you think it will be 15%, or 51%, or 80% there is a hell of lot of growth left.   :)

Exactly. If you think there is any value at all, either as currency or store of value, then even at present prices, crypto in general is one of the most asymmetric bets of all time.

I can understand people saying bitcoin will go to zero. What I find odd is when people say the fair value is 50b to 100b.  Your basically saying it should be exactly 1% of world money supply which seems oddly specific

+1.   I agree.  It is either wildly undervalued or not worth anything.

80% would shock me, but I expect that 10-20%+ of all the world's economic transactions will take place on blockchains within the next 15-20 years. Although I suspect my prediction will prove to be grossly inaccurate in one direction or the other.
Title: Re: Cryptocurrencies
Post by: CONeal on May 28, 2017, 01:16:18 PM
Found this article where the DTCC had a successful proof of concept test for derivatives.  Plan on rolling out the technology in phases beginning in 2018.

http://www.coindesk.com/11-trillion-bet-dtcc-clear-derivatives-blockchain-tech/
Title: Re: Cryptocurrencies
Post by: DTEJD1997 on May 28, 2017, 04:41:25 PM
Hey all:

I hate to be contrarian...but could the recent spike in the value of Bitcoin be related to two things?

A). people in China looking to get some of their capital out the country/renminbi?

B). a spike in demand for Bitcoin due to demand from ransonware?  I have an elderly friend of the family who was looking to get bitcoin as their computer had been locked up.

I have no doubt that Bitcoin/cryptocurrencies could be very valuable.  It sure would be nice to easily move $$$ across political boundaries...to have no counter party risk, etc.

I just think that the recent spike might be the result of abnormal factors that are likely to prove temporary.
Title: Re: Cryptocurrencies
Post by: rkbabang on May 30, 2017, 05:45:13 AM
Hey all:

I hate to be contrarian...but could the recent spike in the value of Bitcoin be related to two things?

A). people in China looking to get some of their capital out the country/renminbi?

B). a spike in demand for Bitcoin due to demand from ransonware?  I have an elderly friend of the family who was looking to get bitcoin as their computer had been locked up.

I have no doubt that Bitcoin/cryptocurrencies could be very valuable.  It sure would be nice to easily move $$$ across political boundaries...to have no counter party risk, etc.

I just think that the recent spike might be the result of abnormal factors that are likely to prove temporary.

I don't see how your views are contrarian at all.  The value of these things is completely speculative at this point.  I've never seen anyone dispute that.  Even the most ardent supporters and evangelists are talking about what blockchain technology could become not what it is already.  Right now these things are used very little by very few, other than for speculation purposes.  As JB85 said above it is an asymmetric bet. That is why I took a small amount of money and purchased a basket of them.   That small amount has already become a measurable position in my portfolio, but I also understand that this is a speculative bubble and it will likely crash back down soon.  ETH is still flying high, but BTC is already down significantly off its recent high.
Title: Re: Cryptocurrencies
Post by: chesko182 on May 30, 2017, 06:54:56 PM
Has anyone looked into potentially profiting from the current spread between the bitcoin ETF (GBTC) and bitcoin? The ETF is trading at a 100% premium to NAV, seems to me like a no brainer trade to put on (long Bitcoin/Short ETF), but not sure which brokerages let you short the ETF since it's OTC. Looking at the historical spread it seems to get out of whack every now and then and then come back to earth.

Any thoughts appreciated.

Credits to Barron's article over the weekend which mentioned this.

http://www.barrons.com/articles/bitcoin-and-tech-stocks-a-21st-century-tulipmania-1495858829
Title: Re: Cryptocurrencies
Post by: CONeal on May 30, 2017, 08:07:57 PM
Has anyone looked into potentially profiting from the current spread between the bitcoin ETF (GBTC) and bitcoin? The ETF is trading at a 100% premium to NAV, seems to me like a no brainer trade to put on (long Bitcoin/Short ETF), but not sure which brokerages let you short the ETF since it's OTC. Looking at the historical spread it seems to get out of whack every now and then and then come back to earth.

Any thoughts appreciated.

Credits to Barron's article over the weekend which mentioned this.

http://www.barrons.com/articles/bitcoin-and-tech-stocks-a-21st-century-tulipmania-1495858829

lookup the ticker symbol on seeking alpha.  If I remember correctly, it has a few articles talking about the spread and how people think about it. 
Title: Re: Cryptocurrencies
Post by: jb85 on May 31, 2017, 11:08:45 AM
Has anyone looked into potentially profiting from the current spread between the bitcoin ETF (GBTC) and bitcoin? The ETF is trading at a 100% premium to NAV, seems to me like a no brainer trade to put on (long Bitcoin/Short ETF), but not sure which brokerages let you short the ETF since it's OTC. Looking at the historical spread it seems to get out of whack every now and then and then come back to earth.

Any thoughts appreciated.

Credits to Barron's article over the weekend which mentioned this.

http://www.barrons.com/articles/bitcoin-and-tech-stocks-a-21st-century-tulipmania-1495858829

lookup the ticker symbol on seeking alpha.  If I remember correctly, it has a few articles talking about the spread and how people think about it.

its the only practical vehichle to buy BTC in your 401k or IRA.  In addition, the supply is limited. I forget the exact rule, but I think the original owners of GBTC can only sell their shares publically after having held GBTC to 2 years or something like that.  As i recall, that meant a large portion of the btc shares weren't even available for resale for a while.  In addition, i think its a closed end fund, so they aren't acquiring any new bitcoin.   Again, I could be wrong on any or all of the above, but that in general what i recall
Title: Re: Cryptocurrencies
Post by: vox on June 02, 2017, 07:59:11 AM
Another sign that bitcoin values are driven by speculation: https://www.reuters.com/article/us-bitcoin-asia-idUSKBN18T0K2
Title: Re: Cryptocurrencies
Post by: Aberhound on June 06, 2017, 02:20:17 PM
Congrats.  I read the paper on this forum late 2011 and the high conviction posters were framing this as digital gold. I loved the philosophy of the paper.  The math i didnt understand so i stayed away.  For others to learn( myself):

1.) What was thesis when invested?
2.) What is current thesis?
3.) When is this vehicle a sell? Or riding it out using power law?

Thanks

-premfan
[/quote]

1. My thesis last august was that BTC would increase exponentially at greater than 100% per annum for at least 5 years, probably to 2032. Further the blockchain was a third revolution in accounting similar in impact to dual entry accounting except with trust as Trace Meyer argues. I charted it and decided that what I was seeing was the S-curve of technological adoption similar to Apple when the Iphone 3 came out. Do you know anyone who had the Iphone 1 or 2? I know one. Finally I theorized that it was created by the Anglo alliance (along with almost all other long term agendas), for the purpose of destroying the nation state final leg of power, namely the ability to issue cheap bonds because your central bank can create currency. This is part of the agenda for the next phase of a world of ten super states. Crypto makes this inevitable. i no longer bother with stocks and save much time thereby.

2. Same. Now the thesis is expanded because I am starting to understand the vast potential of the blockchain so that I now estimate it will be 20 times bigger than the internet as one blog predicted. I also predict Bitcoin will prevail because the silk road alliance will be 60% of the world GDP so China can take over from US as the world's policeman which is one of the Anglo empire long term agendas. Asians will favour Bitcoin over Ethereum or any JP Morgan/banker crypto where they are not trusted for good reason. They will do so because they wrongly perceive Bitcoin as decentralized. I now believe that the reason for the press attacks against Bitcoin is so they can accumulate 50% and then control it. When I say Anglo empire I do not think in term of countries anymore. These people have no loyalty to any country or to the people of UK, US etc. and do everything with similar methods in long term agendas. The most common method is deception. Another method is control by duality. It is easier to maintain control when you control both sides like Democrat/Republican. Accordingly invest in both Bitcoin and Ethereum as they form a duality and favour will be moved back and forth. RSK which allows the creation of smart contracts like Ethereum with the same programming but which works with Bitcoin for greater security and is claimed to be 6x faster is much better than Ethereum from a lawyer's standpoint so currently Bitcoin will likely enjoy favour. I currently favour Bitcoin.

3. Sell before 2032 and diversify into the boom so it does not matter which coin prevails. Get into crypto like Dustin Hoffman was told to get into plastic. (I think plastic really meant visa/mastercard!).

There are lots of people that have made millions that I run into ready to invest in crypto with tons of followers who have made fortunes because of their advice. It is amazing what new business models are made possible because cryptos can eliminate "friction" for many businesses. It reminds me of 1996 when the internet started to gain traction leading up to the 2001 dot com bubble. I 1998 participated in a internet video start-up, an amazing experience. This is much bigger and faster. Don't believe what you read and change the way you think about cryptos so that they are your own thoughts, not thoughts fed by the Anglo empire media who always seek to deceive. It is still possible to prevent or delay their 50% control and bitcoin will be the hardest one for them to achieve. Ripple and Ethereum are theirs and Ripple is obviously one of many crypto pump and dumps considering the billions of coins. They will support Ethereum to maintain the duality so it likely will be well managed. 
Title: Re: Cryptocurrencies
Post by: rkbabang on June 07, 2017, 11:16:23 AM
Two interesting stories about Ethereum.

Singapore will be issuing its currency as tokens on the Ethereum blockchain. 
http://www.trustnodes.com/2017/06/07/singaporean-dollar-tokenized-ethereums-blockchain-monetary-authority-singapore

And Putin had a meeting with Vilalik Buterin
https://www.bloomberg.com/news/articles/2017-06-06/putin-eyes-bitcoin-rival-to-spur-economic-growth-beyond-oil-gas
Title: Re: Cryptocurrencies
Post by: Fly on June 08, 2017, 04:44:58 PM
This might be something to watch as well:

http://www.coindesk.com/us-congressional-group-calls-on-irs-to-clarify-bitcoin-tax-guidance/
Title: Re: Cryptocurrencies
Post by: Liberty on June 10, 2017, 01:27:17 PM
The Tim Ferriss Show: #244: The Quiet Master of Cryptocurrency — Nick Szabo
https://overcast.fm/+BmGV410hM
Title: Re: Cryptocurrencies
Post by: LC on June 10, 2017, 02:12:42 PM
I bought a tiny bit of etherium today
Title: Re: Cryptocurrencies
Post by: rkbabang on June 11, 2017, 08:39:19 AM
I bought a tiny bit of etherium today

Good choice, ETH is my largest crypto holding by far, not because it is the one I bought the most of, that would be Bitcoin,  but because I bought ETH at around $8 where my BTC was acquired between $200-$800. I purchased some ZEC a few days ago to further diversify. 
Title: Re: Cryptocurrencies
Post by: clutch on June 11, 2017, 09:02:27 AM
Good choice, ETH is my largest crypto holding by far, not because it is the one I bought the most of, that would be Bitcoin,  but because I bought ETH at around $8 where my BTC was acquired between $200-$800. I purchased some ZEC a few days ago to further diversify.

What are your thoughts on Ripple and XRP?
Title: Re: Cryptocurrencies
Post by: wachtwoord on June 11, 2017, 09:04:45 AM
At the current valuation I would own most scamcoins over ETH, it's fully centralized, has an infinite supply and trades at half the valuation of Bitcoin?

On top of that it's Turing complete so it will be exploited until it dies. I would be really surprised if Ethereum exists in 10 years, while I would be equally surprised if Bitcoin did not.

Edit:

Why would you buy ZEC? Did you read what it is? They can't prove they didnt keep the initialization seed and if the did can create an infinite supply without it being visible. On top of this they assign themselves 20% (iirc) from the block reward of every mined block.
Title: Re: Cryptocurrencies
Post by: wachtwoord on June 11, 2017, 09:06:54 AM
Good choice, ETH is my largest crypto holding by far, not because it is the one I bought the most of, that would be Bitcoin,  but because I bought ETH at around $8 where my BTC was acquired between $200-$800. I purchased some ZEC a few days ago to further diversify.

What are your thoughts on Ripple and XRP?

Ripple truly is the largest scam around. It's a company releasing a currency which the can inflate infinitely and assign to themselves. On top of that it's not even a cryptocurrency, there is no mining either through POW or POS.
Title: Re: Cryptocurrencies
Post by: anony208 on June 11, 2017, 11:04:29 AM
The Enterprise Ethereum Alliance has nothing to do with the currency aspect. Big names in that alliance have no impact to the speculative aspect of ETH. The alliance is interested in the enterprise aspect of the technology -- permissioned networks, secure data sharing, smart contracts, etc.
Title: Re: Cryptocurrencies
Post by: rkbabang on June 11, 2017, 01:16:44 PM
Good choice, ETH is my largest crypto holding by far, not because it is the one I bought the most of, that would be Bitcoin,  but because I bought ETH at around $8 where my BTC was acquired between $200-$800. I purchased some ZEC a few days ago to further diversify.

What are your thoughts on Ripple and XRP?


Ripple truly is the largest scam around. It's a company releasing a currency which the can inflate infinitely and assign to themselves. On top of that it's not even a cryptocurrency, there is no mining either through POW or POS.

I agree with wachtwoord on ripple.  You have to trust the corporation, it isn't a cryptocurrency at all. I don't think that going from trusting governments and central banks to trusting corporations to control money is much of an improvement.
Title: Re: Cryptocurrencies
Post by: rukawa on June 11, 2017, 01:21:18 PM
Good choice, ETH is my largest crypto holding by far, not because it is the one I bought the most of, that would be Bitcoin,  but because I bought ETH at around $8 where my BTC was acquired between $200-$800. I purchased some ZEC a few days ago to further diversify.

What are your thoughts on Ripple and XRP?

Ripple truly is the largest scam around. It's a company releasing a currency which the can inflate infinitely and assign to themselves. On top of that it's not even a cryptocurrency, there is no mining either through POW or POS.

Reminds me of this
https://www.youtube.com/watch?v=3fxf4ciYU_w
Title: Re: Cryptocurrencies
Post by: jb85 on June 11, 2017, 06:29:37 PM
At the current valuation I would own most scamcoins over ETH, it's fully centralized, has an infinite supply and trades at half the valuation of Bitcoin?

On top of that it's Turing complete so it will be exploited until it dies. I would be really surprised if Ethereum exists in 10 years, while I would be equally surprised if Bitcoin did not.


*Supply is not infinite in any reasonable sense (technically it is, but a .000001% annaul inflation rate is basically 0%) -->

https://www.reddit.com/r/ethereum/comments/5izcf5/lets_talk_about_the_projected_coin_supply_over/dbc66rd/

*ETH is far from fully centralized imo.  Just because a community makes a decision that folks don't agree with doesn't mean its centralized.  (I assume your referrring to DAO hard fork).   At the very least, the existance of ETC shows its not centralized and anyone is free to make bets on whether they agreed with DAO fork (ETH) or didn't agree with DAO fork (ETC).  If vitalik goes nuclear tomorrow and adds code that says he gets 90% of ETH, i'm pretty sure no one is gonna run that code, hence not fully centralized.  Its certainly a spectrum, and ETH may be more centralized than BTC (i dont think it is, but i can see the argument), but logic goes out the window when we start talking in certainties.

*Theres a segment of crypto land that wants to say POS, sharding, etc are guaranteed to fail.  I'm not sure what the odds are but imo crypto land is getting very tribal (im guilty at times) and any sort of rationale discussion is going out the window (ie bitcoin maximilaists, eth maximalists, etc).  in reality, theres a non 0%, non 100% chance eth takes over as a better over all currency even if turing completeness never serves any practical use.  Theres a nontrivial chance that POS and sharding turn out to be order of magnitude more secure than BTC as well as being able to handle orders of magnitudes more transactions and that eth market cap is worth much more than btc

*would agree turing completeness has many things to overcome but again odds of doing so are not 0% nor are they 100%.

*Def don't want to debate POS, Sharding etc here (other are more qualified to do so), but instead will just post some links i found helpful so others reading this thread can learn more.  They explain it much better than i could.  i don't agree with everything vitalik says and i'm far from 100% sure POS succeeds, but imo its at least worth considering his roadmap, thoughts, etc.

https://blog.ethereum.org/2014/11/25/proof-stake-learned-love-weak-subjectivity/

https://github.com/ethereum/wiki/wiki/Sharding-FAQ

https://medium.com/@VitalikButerin/a-proof-of-stake-design-philosophy-506585978d51
Title: Re: Cryptocurrencies
Post by: rkbabang on June 12, 2017, 06:14:01 AM
At the current valuation I would own most scamcoins over ETH, it's fully centralized, has an infinite supply and trades at half the valuation of Bitcoin?

On top of that it's Turing complete so it will be exploited until it dies. I would be really surprised if Ethereum exists in 10 years, while I would be equally surprised if Bitcoin did not.

Edit:

Why would you buy ZEC? Did you read what it is? They can't prove they didnt keep the initialization seed and if the did can create an infinite supply without it being visible. On top of this they assign themselves 20% (iirc) from the block reward of every mined block.

I disagree with you on ETH.  It is technically infinite, but it increases by a small fixed amount of ETH every year, so the inflation starts out tiny and approaches (but never quite reaches 0%).   In fact it may even be deflationary in some years due to coin losses, which nobody disputes is a thing.   I've heard some estimates that as much as 15% of bitcoin may be irretrievably lost already.    People are not always smart about backing up things, thumb drives are lost, hard drives crash, hardware wallets are lost/damaged, paper wallets are lost/damaged, people die without leaving instructions to their heirs on how to retrieve their cryptocurrencies maybe the heirs don't even know it exists at all.  Back in the first few years when bitcoin was almost worthless many people lost a lot of coins and didn't worry too much about it, etc, etc.   There will always be some loss, so the tiny, almost zero inflation rate doesn't worry me.   These new coins will be used to pay miners every year which is something I see as a problem with bitcoin.  Once mining isn't very profitable because of coin creation I think fees are going to rise dramatically.  The bitcoin fees are already too high.

I did some reading on ZCash and I now think you are correct.  I was reading too much of the ZCash official line on how the trusted setup went and cheerleading by supporters on how secure the encryption is.  I only had a tiny amount, but I just shapeshifted it back into BTC as I am no longer comfortable with it.  Thank You for bringing this to my attention.  There is a lot of back and forth and lies, and tribalism, on the message boards about this, and it is hard to know what to believe, but this piece written by one of the 6 people involved in the trusted setup is what really changed my mind. I just don't see ZCash as one of the eventual winners.

My Role In The 2016 Zcash Trusted Setup Ceremony (https://petertodd.org/2016/cypherpunk-desert-bus-zcash-trusted-setup-ceremony)
Title: Re: Cryptocurrencies
Post by: wachtwoord on June 12, 2017, 08:32:51 AM
At the current valuation I would own most scamcoins over ETH, it's fully centralized, has an infinite supply and trades at half the valuation of Bitcoin?

On top of that it's Turing complete so it will be exploited until it dies. I would be really surprised if Ethereum exists in 10 years, while I would be equally surprised if Bitcoin did not.

Edit:

Why would you buy ZEC? Did you read what it is? They can't prove they didnt keep the initialization seed and if the did can create an infinite supply without it being visible. On top of this they assign themselves 20% (iirc) from the block reward of every mined block.

I disagree with you on ETH.  It is technically infinite, but it increases by a small fixed amount of ETH every year, so the inflation starts out tiny and approaches (but never quite reaches 0%).   In fact it may even be deflationary in some years due to coin losses, which nobody disputes is a thing.   I've heard some estimates that as much as 15% of bitcoin may be irretrievably lost already.    People are not always smart about backing up things, thumb drives are lost, hard drives crash, hardware wallets are lost/damaged, paper wallets are lost/damaged, people die without leaving instructions to their heirs on how to retrieve their cryptocurrencies maybe the heirs don't even know it exists at all.  Back in the first few years when bitcoin was almost worthless many people lost a lot of coins and didn't worry too much about it, etc, etc.   There will always be some loss, so the tiny, almost zero inflation rate doesn't worry me.   These new coins will be used to pay miners every year which is something I see as a problem with bitcoin.  Once mining isn't very profitable because of coin creation I think fees are going to rise dramatically.  The bitcoin fees are already too high.

I did some reading on ZCash and I now think you are correct.  I was reading too much of the ZCash official line on how the trusted setup went and cheerleading by supporters on how secure the encryption is.  I only had a tiny amount, but I just shapeshifted it back into BTC as I am no longer comfortable with it.  Thank You for bringing this to my attention.  There is a lot of back and forth and lies, and tribalism, on the message boards about this, and it is hard to know what to believe, but this piece written by one of the 6 people involved in the trusted setup is what really changed my mind. I just don't see ZCash as one of the eventual winners.

My Role In The 2016 Zcash Trusted Setup Ceremony (https://petertodd.org/2016/cypherpunk-desert-bus-zcash-trusted-setup-ceremony)

No worries, it's hard to follow. When I first read about zero-knowledge proof in the context of Bitcoin I was really enthusiastic but the way they implemented it is just terrible. Even implemented well I think Monero is preferable cause ring-signatures are proven technology while zero-knwoledge proofs are cutting (bleeding?) edge. I was even (mildly) enthusiastic about the original idea behind Ripple (a trust network where actors provided lines of credit to each other, which would allow people to provide p2p loans to each other without moving funds and without strong required direct trust  between loaner and debtor) but it was completely corrupted.

Ethereum: Are you talking Ethereum or Bitcoin regarding inflation? Bitcoin follows a completely defined structure for releasing its coins that has never been deviated from. Ethereum says something along the lines of: Vitalek will decide in the future. Vitalek is also the biggest liability of Ethereum as he is a single point of failure. That's why it's so important that Satoshi Nakamoto is anonymous in Bitcoin: there is no-one to corrupt and there is no (less) "follow the Messiah" mentality. Why was ETH forked and did ETH win instead of ETC? Because Vitalek said so. He will be subverted by powerful groups (and held responsible if illegal activities are supported by Ethereum).

All of this comes on top of the fact that Ethereum was pre-mined and will not be workable long term due to the Truing completeness.

BTW: Fees in Bitcoin are not too high but a few orders of magnitude too low. Bitcoin is the most secure payment network on the planet and because of its distribution resistant to censorship and other limitations. I expect fees in the future to rise top an equivalent of $100-$1000 at least and it will be worth that. Those fees is what will pay for the security offered by the most secure transaction network the world has ever seen. The only one that (without strong social engineering that is being attempted right now) cannot be defeated by any state, party or nation.
Title: Re: Cryptocurrencies
Post by: premfan on June 13, 2017, 11:29:21 AM
For the cypto guys i noticed dennis rodman on his trip to north korea was wearing a potcoin.com shirt.


Thanks for all the inputs.  Truly a great study in what extreme scarcity and insatiable demand could create.  I expect the winklevoss twins to grace the forbes list next year.
Title: Re: Cryptocurrencies
Post by: rkbabang on June 13, 2017, 11:45:23 AM
I don't know about potcoin, but
Bitcoin Is Helping the Pot Business Get Over Its Banking Problem (https://www.bloomberg.com/news/articles/2017-06-13/pot-entrepreneurs-look-to-bitcoin-as-big-banks-stay-on-sidelines)
Title: Re: Cryptocurrencies
Post by: wachtwoord on June 13, 2017, 01:58:07 PM
To those invested in Ethereum: What do you think of RSK (http://www.rsk.co/)? With RSK, why would you need Ethereum?
Title: Re: Cryptocurrencies
Post by: LC on June 13, 2017, 02:54:04 PM
I wouldn't say I invested in Ethereum, so I am not the person to answer that question. But my reason for throwing money at it are as follows:

My buddy turned 10K into 300K with bitcoin over the last 4 years or so.

I have no clue about the technology, the winners/losers, the this, the that...this is purely speculative and either I'll lose it all or it will balloon to something.

Tiny % of my portfolio, it's like gambling to me: figure out how much money I am OK with setting on fire, and go from there.
Title: Re: Cryptocurrencies
Post by: wachtwoord on June 13, 2017, 02:56:52 PM
I wouldn't say I invested in Ethereum, so I am not the person to answer that question. But my reason for throwing money at it are as follows:

My buddy turned 10K into 300K with bitcoin over the last 4 years or so.

I have no clue about the technology, the winners/losers, the this, the that...this is purely speculative and either I'll lose it all or it will balloon to something.

Tiny % of my portfolio, it's like gambling to me: figure out how much money I am OK with setting on fire, and go from there.

This is the exact reason why the Ethereum bubble is so big. Make your own decision but Bitcoin is the vastly superior investment (still) if you ask me.
Title: Re: Cryptocurrencies
Post by: LC on June 13, 2017, 02:59:21 PM
That's fair...I presume you say that because bitcoin is a better technology overall.

I still don't quite get what real world applications these things have. All I see are digital currency (is it that hard to send money via Venmo?) and "smart-contracts". Not sure how much $ there is in smart contracts. Or what a smart contract even is.

I'm getting old I guess.
Title: Re: Cryptocurrencies
Post by: wachtwoord on June 13, 2017, 03:32:42 PM
Primarily for Bitcoin it's the most secure immutable transaction ledger ever created which is distributed and therefore extremely strong against attack and censorship. It doesn't scale though without sacrificing security and distribution (but lower security solutions will be build on top of it).

A primary application of such a ledger is for storing and transfering wealth (and this application was needed to make the network as strong as it is to incentive people) but its useful for anything which requires an extremely strong notion of truth (contracts, unchangable record keeping, trades etc) and is willing to pay for it.
Title: Re: Cryptocurrencies
Post by: LC on June 13, 2017, 03:47:40 PM
So (correct me if am wrong) the technology is a distributed ledger? To simplify, it's pretty much bittorrent for transactions (or even more generally, any records in general)?

The value is that, if party A makes a transaction with party B, and then both party A and B sends a signed receipt to everyone else in the world...well nobody can come by later and say "well no, party A still has not transacted with party B".

I can see how this adds another level of security, for sure.

So my thoughts are, the technology and the coin aspect are two distinct things.

The technology is just a record keeping platform, which is stronger the more people use it. You can't generate profit from it, correct?

The coin aspect is only as valuable as people make it. So, the more people who transfer their wealth into bitcoins, the more valuable bitcoins are. Until of course, the last marginal person converts their dollars into bitcoin.

So to value the coin aspect, you have to have an understanding on how and why people will move their wealth into bitcoins. What drives this behavior? Is it security (i.e. people fearing the bank holding their money)? Is it ease-of-use (i.e. a completely digital society where everything is bought/paid for digitally?). Some other reason?

Curious to your two cents on these thoughts, particularly the last one...
Title: Re: Cryptocurrencies
Post by: wachtwoord on June 13, 2017, 04:01:29 PM
Well the very characteristics of Bitcoin make it particularly suitable for storing wealth. Erik Voorhees wrote about it in 2012 http://moneyandstate.com/bitcoin-libertarian-introduction-used-care/ (it shares many of gold's characteristics but is doesn't cost money or time to store or transfer)

So if we accept that Bitcoin is good money Gresham's law applies: "bad money drives out good. For example, if there are two forms of commodity money in circulation, which are accepted by law as having similar face value, the more valuable commodity will disappear from circulation." (Wikipedia). Which will lead to people storing wealth in Bitcoin (removing them from circulation).

It's true that Bitcoin and bitcoin (the token and the network) are two different things, but it's important to note one doesn't work without the other. The bitcoin network is only secure because people are willing to put resources at work to secure it. That's something they would never have done at this scale without monetary compensation. The "currency" aspect bootstrapped the whole network into place. This is why banks and financial institutions that want blockchain but not Bitcoin don't understand anything about this. They often even don't want the mining to be distributed and in effect end up making the world least efficient database with nothing going for it but the blockchain buss word.
Title: Re: Cryptocurrencies
Post by: LC on June 13, 2017, 04:17:06 PM
Ok thanks - just read thru this thread....very interesting stuff....more for me to read... :D
Title: Re: Cryptocurrencies
Post by: rkbabang on June 13, 2017, 04:24:33 PM
So (correct me if am wrong) the technology is a distributed ledger? To simplify, it's pretty much bittorrent for transactions (or even more generally, any records in general)?

The value is that, if party A makes a transaction with party B, and then both party A and B sends a signed receipt to everyone else in the world...well nobody can come by later and say "well no, party A still has not transacted with party B".

I can see how this adds another level of security, for sure.

So my thoughts are, the technology and the coin aspect are two distinct things.

The technology is just a record keeping platform, which is stronger the more people use it. You can't generate profit from it, correct?

The coin aspect is only as valuable as people make it. So, the more people who transfer their wealth into bitcoins, the more valuable bitcoins are. Until of course, the last marginal person converts their dollars into bitcoin.

So to value the coin aspect, you have to have an understanding on how and why people will move their wealth into bitcoins. What drives this behavior? Is it security (i.e. people fearing the bank holding their money)? Is it ease-of-use (i.e. a completely digital society where everything is bought/paid for digitally?). Some other reason?

Curious to your two cents on these thoughts, particularly the last one...

Even after the last person moves to Bitcoin it's value, i.e. What you can buy with it, will increase due to supply and demand. And given a fixed or even shrinking supply and a growing demand from a growing society with increasing wealth and increasing productivity, you should see a certain amount of increasing value.  This of course is a simplistic example as I don't think Bitcoin will be the only currency in society. So it will always be able to also gain or lose against the other currencies in existence.
Title: Re: Cryptocurrencies
Post by: Liberty on June 14, 2017, 08:30:38 AM
Even after the last person moves to Bitcoin it's value, i.e. What you can buy with it, will increase due to supply and demand. And given a fixed or even shrinking supply and a growing demand from a growing society with increasing wealth and increasing productivity, you should see a certain amount of increasing value.  This of course is a simplistic example as I don't think Bitcoin will be the only currency in society. So it will always be able to also gain or lose against the other currencies in existence.

The supply of bitcoin is fixed (and declining as people lose access to them..), but the supply of cryptocurrencies in general is infinite. That'll be an interesting dynamic to see in action over the coming years and decades..
Title: Re: Cryptocurrencies
Post by: rkbabang on June 14, 2017, 09:44:20 AM
Even after the last person moves to Bitcoin it's value, i.e. What you can buy with it, will increase due to supply and demand. And given a fixed or even shrinking supply and a growing demand from a growing society with increasing wealth and increasing productivity, you should see a certain amount of increasing value.  This of course is a simplistic example as I don't think Bitcoin will be the only currency in society. So it will always be able to also gain or lose against the other currencies in existence.

The supply of bitcoin is fixed (and declining as people lose access to them..), but the supply of cryptocurrencies in general is infinite. That'll be an interesting dynamic to see in action over the coming years and decades..

+1.  That is why I think there will be a small handful of winners. I think there will be different categories of blockchains, at least 2-3 categories globally, or maybe this will vary slightly by region as well.   But within each category the network effects are what makes them valuable, so I don’t think there will be too many of them.  Why are there only 4 credit card networks (VISA, MC, AmEx, Discover)?  Why aren’t there thousands?   There could be an infinite number of them right?  It is because a credit card is useless unless it can be used almost everywhere.  This limits the number of them that can exist profitably.  I think the same market forces will be at work in this industry. Here are the 3 categories of blockchains I predict:

1) Bitcoin (or something else like it), with its high fees, slow transfer speeds, and fixed/shrinking supply looks to me like it will be "digital gold".  Good for long term storage of large sums of money or to safely facilitate large transactions safely.   Maybe it will be used mostly by the wealthy or with its very public ledger by corporations to store or transfer large amounts transparently.  I don't see it as the everyday unit the average person gets paid in and uses to buy a coffee and a donut at Dunkin Donuts.   But the average person might have some as a deflationary savings vehicle.

2) Ethereum (or maybe Tezos) or something else like it.  Being Turing complete will be used for smart contracts and to build businesses on top of and other specific types of instruments I’ll call “tokens” here.  This will be a much faster blockchain able to handle an enormous number of transactions per second and probably either the base token or a derivative token will be the unit people use for everyday transactions.  Tokens on this block chain will also represent stock in corporations and will be traded in all the ways stocks are traded today.  And there will exist derivative financial instruments coded in smart contracts such as calls, puts, etc.  Dividends can be paid in either the base token or in the token shares (like dividend reinvestment).  And of course the company can buy back its tokens on the market and destroy them or do secondary offerings and create more tokens.

3) Monero, DASH, or something else.  I see the need for a private currency.  This one will mostly be just a currency, like bitcoin, with limited smart contract programmability, but with complete privacy as to how much you own or what transactions you made and with whom.   Maybe this exists and Bitcoin doesn’t, or maybe Bitcoin hardforks to something else which works this way.  Or maybe this exists as a separate thing as it does now.

Those are the three categories I see. There may only be 1 or 2 winners in each of those categories and, as I said above, category 1 might go away and only categories 2 and 3 end up existing long term.  Of course this is all so new that I might be completely wrong.
Title: Re: Cryptocurrencies
Post by: SharperDingaan on June 14, 2017, 10:18:31 AM
So (correct me if am wrong) the technology is a distributed ledger? To simplify, it's pretty much bittorrent for transactions (or even more generally, any records in general)?

The value is that, if party A makes a transaction with party B, and then both party A and B sends a signed receipt to everyone else in the world...well nobody can come by later and say "well no, party A still has not transacted with party B".

I can see how this adds another level of security, for sure.

So my thoughts are, the technology and the coin aspect are two distinct things.

The technology is just a record keeping platform, which is stronger the more people use it. You can't generate profit from it, correct?

The coin aspect is only as valuable as people make it. So, the more people who transfer their wealth into bitcoins, the more valuable bitcoins are. Until of course, the last marginal person converts their dollars into bitcoin.

So to value the coin aspect, you have to have an understanding on how and why people will move their wealth into bitcoins. What drives this behavior? Is it security (i.e. people fearing the bank holding their money)? Is it ease-of-use (i.e. a completely digital society where everything is bought/paid for digitally?). Some other reason?

Curious to your two cents on these thoughts, particularly the last one...

Bitcoin is just one of many token designed for anonymous reliable transacting in a zero-trust environment. It offers greatest value add to all those who need to transfer value in an anonymous way - the drug merchants, arms dealers, money launderers, etc. High security, easy use, and total anonymity - as long as the miners don't consolidate into a group with > 50% of the CPU power. The main weakness isn't the scaling limitation, it's the vulnerability to miner extortion; as a majority group (>50%) has the CPU power to 'double-spend' all the token issued to date. While they can get rich in token, to cash out - they need someone to lend them cash against token. So far it hasn't happened in any quantity.

It's highly likely that we will have a hybrid of the Bitcoin model for very high net worth clients, but with 'vetted' miners, and a consortium of central banks acting as cash/token exchange facility. Wealth transfers out of banks into cyberspace, with the real protection being no way to get the cash out - unless you go through a bank (where it's traceable). If the consortium maintains a fixed FX rate, there will be zero valuation effect.

SD
     

   
Title: Re: Cryptocurrencies
Post by: wachtwoord on June 14, 2017, 01:41:43 PM
@rkabang I agree with you about Bitcoin and Monero being the likely winners for their respective categories. Although there is a chance Bitcoin will get strong privacy (for example through Mimblewimble).

I'm not yet sure about your second category and if it ends up proving useful I expect something like RSK to win as its build on Bitcoin and the currency aspects of Ethereum are just beyond terrible.
Title: Re: Cryptocurrencies
Post by: clutch on June 14, 2017, 02:39:41 PM
How Practical It Is To Live On Bitcoin In 2017 | CNBC

https://www.youtube.com/watch?v=t0O9eiHOV6A
Title: Re: Cryptocurrencies
Post by: rkbabang on June 15, 2017, 11:30:20 AM
@rkabang I agree with you about Bitcoin and Monero being the likely winners for their respective categories. Although there is a chance Bitcoin will get strong privacy (for example through Mimblewimble).

I'm not yet sure about your second category and if it ends up proving useful I expect something like RSK to win as its build on Bitcoin and the currency aspects of Ethereum are just beyond terrible.


My second category is something fundamentally different from money.  It is about decentralized applications running on a decentralized internet.  You could be right that everything ends up running on Bitcoin's blockchain in the end, but I'm not sure you want applications running on the same blockchain as your money.  I think the requirements are too different to mix them.  The money blockchains need to emphasize security above all else, where the application blockchains would really be all about speed, scalability (to an almost infinite degree), ease of programing, power efficiency, and sure security too, but only secure enough.

Here's an interesting piece I just read which talks about a lot of Category 2 developments and projects.
https://hackernoon.com/the-good-the-bad-and-the-ugly-of-consensus-2017-8776056f97a3
Title: Re: Cryptocurrencies
Post by: rkbabang on June 15, 2017, 12:37:23 PM
One reason I see this as probably the biggest opportunity of a lifetime is that right now it is pretty much just tech people with no investing experience at all fooling around with this stuff.  Articles like this one abound every time there is even the slightest drop. It's quite amusing to see a drop back down to where it was last week called a massacre and people panicking.

Crypto Massacre: Why Value of Bitcoin, Ethereum, Ripple, NEM & Others Sharply Fell (https://cointelegraph.com/news/crypto-massacre-why-value-of-bitcoin-ethereum-ripple-nem-others-sharply-fell)

On the FB groups you have people in an frenzy wanting to know "why is it falling?" "What's going on?"  It's crazy.
Title: Re: Cryptocurrencies
Post by: mttddd on June 16, 2017, 06:21:32 AM
At some point this is all going to go mainstream, if people think its a bubble now just wait until the masses start speculating.

Anyone have any thoughts on SegWit? 
Title: Re: Cryptocurrencies
Post by: rkbabang on June 16, 2017, 06:33:23 AM
At some point this is all going to go mainstream, if people think its a bubble now just wait until the masses start speculating.

Anyone have any thoughts on SegWit? 

I agree, while many people have heard the name "bitcoin" most people don't know what it is.  And the vast majority of people have never heard of any of the other blockchain projects/currencies.  After this goes full-on mainstream, when the real bubble happens, I think it will be time to sell and wait for a good crash to buy back in.  But we are years away from that right now.

I don't have an opinion on SegWit in particular, but in general bitcoin needs to do something to address the blocksize/scaling issues.  SegWit seems to be working fine on the litecoin blockchain right now.
Title: Re: Cryptocurrencies
Post by: wachtwoord on June 16, 2017, 07:20:48 AM
Increasing the blocksize will destroy the unique value propisition of Bitcoin (security, distribution and censorship resistance). Segwit (effectively) increases the blocksize (so I don't like that) buthas some other advantages (it enables 2d level scaling).

All the ideas to plain out increase the blocksize are made by people who are either ignorant and aim to destroy bitcoin through social engineering.
Title: Re: Cryptocurrencies
Post by: mttddd on June 17, 2017, 10:06:22 AM
Ya my concern is that it will be too divisive and in the end lead to a nasty split hammering the value. I'm debating closing out my positions in advance and buy back in after. To me at least it seems like the downside risk is greater than the upside.
Title: Re: Cryptocurrencies
Post by: wachtwoord on June 17, 2017, 10:13:12 AM
Ya my concern is that it will be too divisive and in the end lead to a nasty split hammering the value. I'm debating closing out my positions in advance and buy back in after. To me at least it seems like the downside risk is greater than the upside.

If this gets resolved, what do you expect the upside to be? $10k+ right I expect.
Title: Re: Cryptocurrencies
Post by: mttddd on June 17, 2017, 10:40:00 AM
10k would be nice ha, my guess is 50% upside in the weeks following if all goes well. If things go south I could see things tanking 50% in hours. Thinking I'd rather buy in 20% higher and avoid the downside risk. But as with all things crypto who knows
Title: Re: Cryptocurrencies
Post by: rkbabang on June 21, 2017, 05:58:36 PM
Someone was able to buy ETH for $13 today.

http://www.coindesk.com/13-ethereum-ether-prices-plunge-2500-gdax-exchange-flash-crash/
Title: Re: Cryptocurrencies
Post by: pau_ on June 22, 2017, 10:23:13 AM
The fascinating thing to me is that people got hit by margin calls due to/exacerbating the flash crash.

These exchanges, correct me if I'm wrong, keep their own order books and balances off the blockchain (i.e. likely on some RDBMS + custom software), but it hadn't occurred to me that that meant people could margin up.

I also wonder, if settlement doesn't immediately happen on the blockchain, if some of the trades could be reversed by the exchange.

[edit: that is, if the buyer at 13 had only received etherium at an address owned by the exchange and held in the equivalent of street name, it seems plausible it could be reversed. All bets would be seemingly off if it goes directly to an address owned by the buyer]
Title: Re: Cryptocurrencies
Post by: mttddd on June 22, 2017, 10:27:23 AM
I hadn't realized people were using margin either, this stuff is volatile and risky enough I can't imagine using margin in any large capacity. I guess maybe while you wait for the block chains to confirm but it's not like you have to worry about a three day settlement period
Title: Re: Cryptocurrencies
Post by: pau_ on June 22, 2017, 10:31:15 AM
mttddd I edited my comment to clarify, but my curiosity is around whether these USD-Coin exchanges happen in a conventional, non-distributed manner within the exchange. I suspect there is there is at least some degree of this because of the existence of exchange risk: of cases like Mt Gox where people lost balances held on their behalf.
Title: Re: Cryptocurrencies
Post by: rkbabang on June 22, 2017, 11:11:57 AM
It was even worse than I thought.  It didn't just hit $13, a trade went through at $0.10   
cardboard posted this story in its own thread (http://www.cornerofberkshireandfairfax.ca/forum/general-discussion/quite-a-store-of-value/msg302596/#msg302596):

http://www.cnbc.com/id/104544759

There is so much crazy going on.  $30M market sells, margin buying and stop losses.   I know derivatives exist as well, I'm not sure if that had anything to do with it.  Anyway coinbase says all of the transactions are final and can not be reversed.

I'm thinking there are probably a lot of people setting buy orders with ridiculously low limits right about now just in case.
Title: Re: Cryptocurrencies
Post by: rkbabang on June 22, 2017, 12:17:31 PM
91B is still only 91B/60T = 0.15% of world wide M2 currency

So if you think this will represent 2% there is still a lot of growth left.  If you think it will be 15%, or 51%, or 80% there is a hell of lot of growth left.   :)

Exactly. If you think there is any value at all, either as currency or store of value, then even at present prices, crypto in general is one of the most asymmetric bets of all time.

I can understand people saying bitcoin will go to zero. What I find odd is when people say the fair value is 50b to 100b.  Your basically saying it should be exactly 1% of world money supply which seems oddly specific

A good graphic which illustrates this point.

https://howmuch.net/articles/worlds-money-in-perspective

Larry Page is worth as much as Bitcoin. Just one human being out of over 7 billion is worth as much as all of bitcoin put together. Bill Gates is worth as much as all of Bitcoin + Larry Page + a few $B more.
Title: Re: Cryptocurrencies
Post by: Liberty on June 22, 2017, 01:12:38 PM
Isn't the main difference that most other currencies are being used and most cryptocurrencies are being bought to speculate at the present time? Seems like that changes the analysis when comparing BTC to M2 as a TAM or whatever...
Title: Re: Cryptocurrencies
Post by: pau_ on June 24, 2017, 06:36:00 AM
GDAX is bailing out margin traders who lost their shirts (and people who sold due to a stop-loss order) from the company (VC?) coffers. https://blog.gdax.com/eth-usd-trading-update-2-216a3b946ef6
Title: Re: Cryptocurrencies
Post by: CONeal on June 25, 2017, 08:59:29 AM
GDAX is bailing out margin traders who lost their shirts (and people who sold due to a stop-loss order) from the company (VC?) coffers. https://blog.gdax.com/eth-usd-trading-update-2-216a3b946ef6

Understand where they are coming from and doing this in order to build their brand.  At the same time, a very slippery slope and people will always expect their money back if they lose. 

Personally think this is horse shit, allowing people to talk on more risk thus supporting the idea that the price can only go up.
Title: Re: Cryptocurrencies
Post by: mttddd on June 25, 2017, 09:12:54 AM
Agreed sets a dangerous precedent but they may also know more than we do. If the flash crash was due to issues with their exchange this may be a way of avoiding litigation (I'm assuming there are some strings with the bailout)
Title: Re: Cryptocurrencies
Post by: Jurgis on June 25, 2017, 12:18:08 PM
Funny ICO idea from MIT mailing list:

Quote
GSB ICO [1]

Initial Coin Offerings (ICOs) [2] are the hot new way to get rich with very little effort.  To do an ICO all you need is an idea that runs on Ethereum.  Then, you sell shares of your "company" in tokens to raise capital, similar to an IPO.  From this you can compute the market valuation of your company.  These valuations are absolutely insane given that most of these ICOs haven't actually implemented or planned anything.  In one case, an ICO led to a valuation of $300 million [3].

Given all that, we here at GSB are doing an ICO by following the conventional steps:

1.  Come up with an idea.  Deep learning is hot now, so maybe a distributed deep learning thing?  Throw in some internet of things for good luck. [4]

2.  Pitch the idea.  I've put the important bits between asterisks:

"GSB is a *distributed deep learning framework* built on top of the Ethereum network.  The *internet of things* can leverage our GSB layer to access the *global supercomputer*, enabling never before seen levels of *interoperability*.  I'm an *MIT student* doing an ICO of *5%* of GSB with a target valuation of $200 million so I can work full time on GSB.

Note that I'm only offering 5% of GSB.  This is important because it means that your investors have essentially no say in how the thing runs.
 No one will notice this.

3.  (Optional) Write a white paper with some technical details of how you'll accomplish your goal.  This used to be necessary but now a flashy website with no technical details will do just fine.

4.  Pick a date for your ICO and hype it like crazy on Reddit.  Retail investors with no understanding of computer science or Ethereum will buy your coins like crazy.

5.  After you sell out of tokens, cash out everything.  ICOs often perform worse than ether.  Whether you can actually flood the market with your 95% share is yet to be seen, so you should probably do it slowly.

6.  Don't build anything.  You already have the money.  Kick back and relax!

7.  Fight off the paranoia.  This isn't illegal, right?  I mean, sure the SEC will probably make an example of a few people and send them to federal prison for securities fraud for a very long time, but come on, that won't be YOU, right?  Move to a country that doesn't extradite to the US to be safe.

Buy the GSB ICO at this week's [5]

*G i R L     S C O U T     B E N E F i T*

</snip>
---------------------------------------------------

1.  I really wanted to call this email, "How I Made $200 Million From Home," but last week's email (All Natural AWS) got caught in a lot of spam filters and this definitely would too.

2.  http://fortune.com/2017/03/31/initial-coin-offering/

3.
http://www.coindesk.com/ethereum-ico-irrationality-300-million-gnosis-valuation-sparks-market-concerns/

4.  I overheard some people in Kendall square the other day talking about how they wanted to do an ICO but they didn't have any ideas.
Their first mistake was thinking that they *need* an idea.

5.  Thanks to Ben Sherman for the GSB ICO idea.

This is humor. Do try it at home.  8)
Title: Re: Cryptocurrencies
Post by: alpha on July 07, 2017, 12:29:53 PM
JP Morgans former chief equity strategist released a new valuation model for bitcoin.

It models bitcoin as a substitute for gold predicting the price rising to 55,000 by 2022.

http://www.cnbc.com/2017/07/07/strategist-tom-lee-weighs-sees-bitcoin-going-as-high-as-55000.html
Title: Re: Cryptocurrencies
Post by: DooDiligence on July 10, 2017, 05:26:53 AM
IDK much about blockchain & this article doesn't add much to the discussion of crypto$ valuation but the Question raised by the author

"Why do I want 2 remove the intermediary?"

seems like it could be asked of other industries (and I'm interested in the comments of wayyyy more knowledgable posters here...)

http://www.zkorman.com/blockchain.html

BTW - I have no interest in trading crypto$ & instead, am interested in seeing if there are other applications for the tech beyond finance.
Title: Re: Cryptocurrencies
Post by: mttddd on July 10, 2017, 05:54:19 AM
https://www.factom.com/

Check out Factom, they've got some solid support too, Gates foundation and a few others
Title: Re: Cryptocurrencies
Post by: rkbabang on July 10, 2017, 06:54:39 AM
IDK much about blockchain & this article doesn't add much to the discussion of crypto$ valuation but the Question raised by the author

"Why do I want 2 remove the intermediary?"

seems like it could be asked of other industries (and I'm interested in the comments of wayyyy more knowledgable posters here...)

http://www.zkorman.com/blockchain.html

BTW - I have no interest in trading crypto$ & instead, am interested in seeing if there are other applications for the tech beyond finance.

Food for thought.  Reading this reminded me that in the mid to late 90's I thought Realtors were doomed because of the internet.  The existence of sites like ISoldMyHouse.com fed into my confirmation bias (until I tried to use it to sell my first house).  The internet has changed many things, but not exactly the things I thought it would and not in exactly the ways I predicted.  I suspect the same will be true for blockchain tech.   It won't play out in exactly the ways I (and most other people) think it will.  I am pretty confident that having a currency than can't be manipulated by a government agency or central bank is a good thing, everything else people say blockchain will be used for however I'm not as sure about.  Even if it ends up being used only to revolutionize money, stock trading (and maybe keeping track of titles to property in the 3rd world and banking in the 3rd world) that will still be huge.   And of course facilitating black market trade which I think of as a positive, with a few exceptions, of course, such as murder for hire.

Thanks for the article.
Title: Re: Cryptocurrencies
Post by: rkbabang on July 10, 2017, 08:23:17 AM
There are some who think the move to triple entry accounting will have a larger long term impact on the world's civilization & economy than the move from single entry to double entry accounting did.

Why Everyone Missed the Most Important Invention in the Last 500 Years (https://hackernoon.com/why-everyone-missed-the-most-important-invention-in-the-last-500-years-c90b0151c169)

Blockchain Technology A game-changer in accounting? (https://www2.deloitte.com/content/dam/Deloitte/de/Documents/Innovation/Blockchain_A%20game-changer%20in%20accounting.pdf)
Title: Re: Cryptocurrencies
Post by: DooDiligence on July 11, 2017, 07:18:23 AM
There are some who think the move to triple entry accounting will have a larger long term impact on the world's civilization & economy than the move from single entry to double entry accounting did.

Why Everyone Missed the Most Important Invention in the Last 500 Years (https://hackernoon.com/why-everyone-missed-the-most-important-invention-in-the-last-500-years-c90b0151c169)

Blockchain Technology A game-changer in accounting? (https://www2.deloitte.com/content/dam/Deloitte/de/Documents/Innovation/Blockchain_A%20game-changer%20in%20accounting.pdf)

Thanks!

I wonder how triple entry will affect companies like Robert Half which provides temp & ad hoc accounting & audit personnel?

My skepticism for cryptocurrencies has blinded me to the opportunities in blockchain.

I've frequently been blinded a by knee jerk, distaste for ideas based upon their most visible characteristics (unable to see the forest 4 one big ugly tree) (Blackberry & AIG come to mind...)
Title: Re: Cryptocurrencies
Post by: Jurgis on July 11, 2017, 10:08:30 AM
There are some who think the move to triple entry accounting will have a larger long term impact on the world's civilization & economy than the move from single entry to double entry accounting did.

Why Everyone Missed the Most Important Invention in the Last 500 Years (https://hackernoon.com/why-everyone-missed-the-most-important-invention-in-the-last-500-years-c90b0151c169)

Blockchain Technology A game-changer in accounting? (https://www2.deloitte.com/content/dam/Deloitte/de/Documents/Innovation/Blockchain_A%20game-changer%20in%20accounting.pdf)

Thanks!

I wonder how triple entry will affect companies like Robert Half which provides temp & ad hoc accounting & audit personnel?

My skepticism for cryptocurrencies has blinded me to the opportunities in blockchain.

I've frequently been blinded a by knee jerk, distaste for ideas based upon their most visible characteristics (unable to see the forest 4 one big ugly tree) (Blackberry & AIG come to mind...)

And why do you think that your skepticism blinded you?

I agree more with zkorman guy that the Bitcoin and blockchain is a solution in search of a problem.

Or to rephrase it, the cost of a blockchain likely outweighs the benefits.

There are a lot of smart people working on blockchain and there will be likely be useful products based on it. But 90%+ of bloggers are just fanboys looking at the world through blockchain-colored glasses and claiming it to be a solution for everything.

It's like VR/AR people. If you listen to them, VR/AR is solution for everything. And it might be for some things, but not as much as they claim.

And if I had to bet on long term impact, I'd bet on VR/AR much more than on blockchain.
But then Bitcoin/Ethereum are all going 10x up, while VR/AR... oh well.

(Likely my last post on this thread, since I expect a huge pushback from crypto fanboys and I'm not looking to slug it out)

Peace ...
can only be achieved via blockchain (TM)
Title: Re: Cryptocurrencies
Post by: rkbabang on July 11, 2017, 12:01:09 PM
Or to rephrase it, the cost of a blockchain likely outweighs the benefits.

Right now it almost certainly does.  The bullish case is that the costs will come down over time (i.e. computing, electricity, storage) while the benefits will increase over time as more applications for this are found and become widely used.  If either of those assumptions doesn't turn out to be true then there is nothing to see here but a big tulip bubble.
Title: Re: Cryptocurrencies
Post by: Jurgis on July 11, 2017, 12:39:08 PM
Or to rephrase it, the cost of a blockchain likely outweighs the benefits.

Right now it almost certainly does.  The bullish case is that the costs will come down over time (i.e. computing, electricity, storage) while the benefits will increase over time as more applications for this are found and become widely used.  If either of those assumptions doesn't turn out to be true then there is nothing to see here but a big tulip bubble.

I'm stepping way out of my knowledge zone here, but isn't the security of blockchain based on high cost? I.e. isn't it by design based on hard (and also useless - which makes this doubly waste) problems to solve?

Maybe there are solutions for blockchain that don't require the above while it still remains blockchain. My suspicion is that solutions just make it not-blockchain-that-is-still-called-blockchain-for-sales/marketing-easy-money. But I might be totally wrong.  8)
Title: Re: Cryptocurrencies
Post by: wachtwoord on July 11, 2017, 12:46:07 PM
Or to rephrase it, the cost of a blockchain likely outweighs the benefits.

Right now it almost certainly does.  The bullish case is that the costs will come down over time (i.e. computing, electricity, storage) while the benefits will increase over time as more applications for this are found and become widely used.  If either of those assumptions doesn't turn out to be true then there is nothing to see here but a big tulip bubble.

I'm stepping way out of my knowledge zone here, but isn't the security of blockchain based on high cost? I.e. isn't it by design based on hard (and also useless - which makes this doubly waste) problems to solve?

Maybe there are solutions for blockchain that don't require the above while it still remains blockchain. My suspicion is that solutions just make it not-blockchain-that-is-still-called-blockchain-for-sales/marketing-easy-money. But I might be totally wrong.  8)

You're right. This is also why people who want a blockchain without a currency function (token of value) or permissioned mining (not everyone can mine hence centralization) don't get it all. Without those things blockchain is just an extremely inefficient database.
Title: Re: Cryptocurrencies
Post by: rkbabang on July 11, 2017, 12:50:57 PM
Or to rephrase it, the cost of a blockchain likely outweighs the benefits.

Right now it almost certainly does.  The bullish case is that the costs will come down over time (i.e. computing, electricity, storage) while the benefits will increase over time as more applications for this are found and become widely used.  If either of those assumptions doesn't turn out to be true then there is nothing to see here but a big tulip bubble.

I'm stepping way out of my knowledge zone here, but isn't the security of blockchain based on high cost? I.e. isn't it by design based on hard (and also useless - which makes this doubly waste) problems to solve?

Maybe there are solutions for blockchain that don't require the above while it still remains blockchain. My suspicion is that solutions just make it not-blockchain-that-is-still-called-blockchain-for-sales/marketing-easy-money. But I might be totally wrong.  8)

Proof of stake solves the computing and electricity costs.  And storage prices are always going down.   For a currency you might still want proof of work, so you are correct that the computing costs will still be high the question is the value going to be worth the price?   For something like Etherium where the currency isn't the main app proof of stake should solve the computing/electricity problem (etherium will be moving to some form of modified PoS in the next year or so). 

There is always a question of the value being worth the cost in everything isn't there?   Is the value of the capital markets worth the cost of being a public company?  For some yes, for others no.   There will be a lot of stuff created and a lot of failures along the way, but I think blockchain tech will find its killer app, and then another one, and then another one, etc... over time.  This may happen on the bitcoin or etherium blockchains or some other one that won't even be invented yet until 2028.   I'm not going to say I know how this will play out.  How many internet companies are no longer with us?  How many computer companies?   How many automobile companies?   Markets are messy, but that doesn't mean this entire category of technology is sure to be worthless now and forever.
Title: Re: Cryptocurrencies
Post by: mttddd on July 11, 2017, 01:05:43 PM
Agreed, there is no telling if this will play out, i personally think blockchain is here to stay but it wouldnt shock me if none of the current players exist in a few years
Title: Re: Cryptocurrencies
Post by: Liberty on July 11, 2017, 01:38:39 PM
While looking for something, I found a bookmark folder from 2011 full of Bitcoin stuff I was reading at the time. I've been interested in crypto since the late 90s (PGP), so I was mostly interested in the tech. I also have some friends who are engineers working in an adjacent field, so we discussed it a bit in those days. Never bought or mined (hindsight is 20/20).

Among the stuff, I found this, which I remembered from those days:

(https://pbs.twimg.com/media/DEeA6CDUQAAY-KU.jpg)
Title: Re: Cryptocurrencies
Post by: Fly on July 11, 2017, 08:01:42 PM
Going to be a choppy month or two with cryptos:

https://bitcoinmagazine.com/articles/countdown-segwit-these-are-dates-keep-eye/
Title: Re: Cryptocurrencies
Post by: beerbaron on July 11, 2017, 08:27:53 PM
So two questions have been troubling my mind over crypto currencies and I'm lik e non fanatic opinions on each of those.

The ledger or full blockchain size.
I don`t see how it would be feasible to have an exponentially growing ledger at the rate that would make bitcoin widely adopted. I can foresee the size growing at a rate much faster than any hd of SSD capacity. Las time I checked HDD were doubling every 3 years but I'm fairly certain that a a full transaction ledger would grow much faster than that. It has two problems against it, 1st as the growing user base grows it also grows the amount of transactions. So in a sense we might not be working on a much more aggresive power than HHD drive capacity. ID be happy to see anybody prove me wrong on this one but I do think there is one fundamental law, the size of the ledger cango to infinity, the size of a hard drive cannot.

The power efficiency
I really don't see how on a massive scale where every civilized human being would use a bit currency what kind of power would be necessary to maintain the hash at an acceptable rate. Already we are seeing stress in the video cards supply I don't see how a planet wide adoption would be even possible under a decentralized approach... did anybody did the calculations of how much eneergy would be needed to compute the blockchain in let's say 15 year from now? I would bet that those calculations would show a ridiculous amount of energy, and if the calculations would be applied to 50 years it would be a multiple of all of today's power plant.

I did not dig very deep but my gut tells me that we are looking at a exponential power that is greater than our capacity to out innovate. Blockchain has a place in our future but probable not as widely adopted as we think. What do you guys think care to help me gather the data and see if the numbers makes sence in a long term approach?

BeerBaron
Title: Re: Cryptocurrencies
Post by: rkbabang on July 12, 2017, 06:45:21 AM
So two questions have been troubling my mind over crypto currencies and I'm lik e non fanatic opinions on each of those.

The ledger or full blockchain size.
I don`t see how it would be feasible to have an exponentially growing ledger at the rate that would make bitcoin widely adopted. I can foresee the size growing at a rate much faster than any hd of SSD capacity. Las time I checked HDD were doubling every 3 years but I'm fairly certain that a a full transaction ledger would grow much faster than that. It has two problems against it, 1st as the growing user base grows it also grows the amount of transactions. So in a sense we might not be working on a much more aggresive power than HHD drive capacity. ID be happy to see anybody prove me wrong on this one but I do think there is one fundamental law, the size of the ledger cango to infinity, the size of a hard drive cannot.

While it is true that the ledger size is open ended, at any given time the ledger size is finite and will always be finite.  There is no such thing as an infinite sized ledger.    The bitcoin blockchain is currently 124GB (https://blockchain.info/charts/blocks-size?scale=1&timespan=all) (it would fit on a USB stick).  That is tiny, it could grow 100X and it would still be easy for anyone to keep a copy of it.  Even if it were to grow 1000X it wouldn't be much of a problem to keep at home. If it were to grow a million times it wouldn't be much of a problem for miners to keep a copy of it (and probably not home users either by the time it does get that big).  To put 124GB in proportion to the amount of storage in the world from wikipedia (https://en.wikipedia.org/wiki/Petabyte) (keep in mind that 1 petabyte = 1,000,000 GB:


The storage capacity of the world right now is measured in zettabytes (1 zettabyte = 1,000,000 petabytes), and it is doubling every 1-3 years.  Blockchains would have to grow at an enormous rate for a long-long time before storage would be an issue. And if it did become an issue someday that would push innovation and start to drive the storage industry the way mining (and AI as well) is going to start to drive the GPU industry. There won't be a shortage for long as NVIDIA, AMD, and others will ramp up production to try and meet demand. There are already GPU cards coming out specifically designed for mining.  And bitcoin, of course isn't even mined with GPUs anymore, but custom chips specifically designed to mine bitcoins.

Title: Re: Cryptocurrencies
Post by: wachtwoord on July 12, 2017, 08:50:26 AM
I fully agree with beerbarron and this why the block size is not simply being increased despite the pressure. However, far from all transactions need the level of security and censorship resistance as Bitcoin and therefore part will be offloaded to less secure channels. Read about lightning if you're interested for a possible implementation.
Title: Re: Cryptocurrencies
Post by: mttddd on July 12, 2017, 09:23:41 AM
I fully agree with beerbarron and this why the block size is not simply being increased despite the pressure. However, far from all transactions need the level of security and censorship resistance as Bitcoin and therefore part will be offloaded to less secure channels. Read about lightning if you're interested for a possible implementation.

Yep lightning and other things like it are in my opinion the eventual solution to concerns about block chain size and transaction speeds. You would still move large sums through the normal block chain since you want that added security but micro transactions that dont need that same security (buying a soda or gas for your car) will require something like lightning to get the transaction speeds and transaction fees down.
Title: Re: Cryptocurrencies
Post by: Liberty on July 12, 2017, 09:31:45 AM
Quote
The bitcoin blockchain is currently 124GB (it would fit on a USB stick).  That is tiny, it could grow 100X and it would still be easy for anyone to keep a copy of it.  Even if it were to grow 1000X it wouldn't be much of a problem to keep at home. If it were to grow a million times it wouldn't be much of a problem for miners to keep a copy of it (and probably not home users either by the time it does get that big).

Are you talking about current storage or future theoretical storage?

Because your examples seem a little stretched to me.

124GB growing 100x is 12.4TB, which is more than what most people have available at home, so I wouldn't say it's "easy for anyone to keep a copy".

124GB growth 1000x is 124TB, which is definitely out of reach of any normal person right now, so I wouldn't say "it wouldn't be much of a problem to keep at home"... Even at the sweet spot of a 4TB HDD, that's 31 hard-drives, or about $4,000 of HDDs, plus the NAS enclosures, plus probably redundancy, which is many other thousands depending on the RAID scheme. So we're probably talking about close to the price of a small car just to store a 1000x larger blockchain.

As for a million times bigger than 124GB, that's definitely not that easy to keep a bunch of distributed copies among miners everywhere with anything close to current technology.

Maybe I misread, or misunderstood what you said, but I was thinking that the multiples of 124GB you were talking about didn't seem that small to me. Maybe you were thinking about theoretical future storage capabilities...
Title: Re: Cryptocurrencies
Post by: rkbabang on July 12, 2017, 10:07:19 AM
Quote
The bitcoin blockchain is currently 124GB (it would fit on a USB stick).  That is tiny, it could grow 100X and it would still be easy for anyone to keep a copy of it.  Even if it were to grow 1000X it wouldn't be much of a problem to keep at home. If it were to grow a million times it wouldn't be much of a problem for miners to keep a copy of it (and probably not home users either by the time it does get that big).

Are you talking about current storage or future theoretical storage?

Because your examples seem a little stretched to me.

124GB growing 100x is 12.4TB, which is more than what most people have available at home, so I wouldn't say it's "easy for anyone to keep a copy".

124GB growth 1000x is 124TB, which is definitely out of reach of any normal person right now, so I wouldn't say "it wouldn't be much of a problem to keep at home"... Even at the sweet spot of a 4TB HDD, that's 31 hard-drives, or about $4,000 of HDDs, plus the NAS enclosures, plus probably redundancy, which is many other thousands depending on the RAID scheme. So we're probably talking about close to the price of a small car just to store a 1000x larger blockchain.

As for a million times bigger than 124GB, that's definitely not that easy to keep a bunch of distributed copies among miners everywhere with anything close to current technology.

Maybe I misread, or misunderstood what you said, but I was thinking that the multiples of 124GB you were talking about didn't seem that small to me. Maybe you were thinking about theoretical future storage capabilities...

12TB is certainly in reach of any home user today.  You can buy 16TB of drives for $500 or 24TB for under $800 (http://www.amazon.com/Red-8TB-Hard-Disk-Drive/dp/B01BYLY4DM/ref=sr_1_6?ie=UTF8&qid=1499878340&sr=8-6&keywords=western%2Bdigital%2Bred&th=1).  Most motherboards can support 2-3 extra drives, but if you want a NAS you can get a 4 bay NAS for $200-$300 (http://www.amazon.com/TS-431P-US-4-bay-Personal-Cortex-1-7GHzDual/dp/B01N2K147Q/ref=sr_1_6?ie=UTF8&qid=1499878731&sr=8-6&keywords=4+bay+nas).

124TB is out of reach right now for home users, but it won't be by the time the blockchain gets that big. And 124TB is easily and relatively cheaply available to large multimillion dollar mining operations right now.

A million times larger than 124GB is 124PB which will be in reach for large operations long before the blockchain gets anywhere even remotely near that size.

I think you underestimate how quickly storage capacity grows now, and especially how quickly it could grow if there was some huge demand driving the market far in excess of what's required today.

EDIT: Of course I was talking about a theoretical future, because in todays know reality you can hold the entire blockchain on a thumb drive for $40 (http://www.amazon.com/Samsung-128GB-Flash-MUF-128BB-AM/dp/B017DH3O5A/ref=sr_1_2?s=pc&ie=UTF8&qid=1499879691&sr=1-2&keywords=usb+stick&refinements=p_n_size_browse-bin%3A10285018011).
Title: Re: Cryptocurrencies
Post by: Liberty on July 12, 2017, 11:18:22 AM
Ok, thanks. Your phrasing made it sound like you thought those orders of magnitude bigger numbers were small for today's  consumer storage.
Title: Re: Cryptocurrencies
Post by: InvestingOnSale on July 12, 2017, 12:53:39 PM
So two questions have been troubling my mind over crypto currencies and I'm lik e non fanatic opinions on each of those.

The ledger or full blockchain size.
I don`t see how it would be feasible to have an exponentially growing ledger at the rate that would make bitcoin widely adopted. I can foresee the size growing at a rate much faster than any hd of SSD capacity. Las time I checked HDD were doubling every 3 years but I'm fairly certain that a a full transaction ledger would grow much faster than that. It has two problems against it, 1st as the growing user base grows it also grows the amount of transactions. So in a sense we might not be working on a much more aggresive power than HHD drive capacity. ID be happy to see anybody prove me wrong on this one but I do think there is one fundamental law, the size of the ledger cango to infinity, the size of a hard drive cannot.

While it is true that the ledger size is open ended, at any given time the ledger size is finite and will always be finite.  There is no such thing as an infinite sized ledger.    The bitcoin blockchain is currently 124GB (https://blockchain.info/charts/blocks-size?scale=1&timespan=all) (it would fit on a USB stick).  That is tiny, it could grow 100X and it would still be easy for anyone to keep a copy of it.  Even if it were to grow 1000X it wouldn't be much of a problem to keep at home. If it were to grow a million times it wouldn't be much of a problem for miners to keep a copy of it (and probably not home users either by the time it does get that big).  To put 124GB in proportion to the amount of storage in the world from wikipedia (https://en.wikipedia.org/wiki/Petabyte) (keep in mind that 1 petabyte = 1,000,000 GB:

  • Games: World of Warcraft uses 1.3 petabytes of storage to maintain its game
  • Steam, a digital distribution service, delivers over 16 petabytes of content to American users weekly
  • Cloud backup: Multiple backup vendors, including Code42, Backblaze, and Mozy claim to store 90 or more petabytes of user backup data
  • Physics: The experiments in the Large Hadron Collider produce about 15 petabytes of data per year, which are distributed over the Worldwide LHC Computing Grid.[26] In July 2012 it was revealed that CERN amassed about 200 petabytes of data from the more than 800 trillion collisions looking for the Higgs boson
  • Climate science: The German Climate Computing Centre (DKRZ) has a storage capacity of 60 petabytes of climate data
  • Folding@home (Scientific Data): Folding@home has generated 0.5 petabytes of simulated data
  • Google Photos has an estimated of 13.7 petabytes worth of photos uploaded in the first year of its existence

The storage capacity of the world right now is measured in zettabytes (1 zettabyte = 1,000,000 petabytes), and it is doubling every 1-3 years.  Blockchains would have to grow at an enormous rate for a long-long time before storage would be an issue. And if it did become an issue someday that would push innovation and start to drive the storage industry the way mining (and AI as well) is going to start to drive the GPU industry. There won't be a shortage for long as NVIDIA, AMD, and others will ramp up production to try and meet demand. There are already GPU cards coming out specifically designed for mining.  And bitcoin, of course isn't even mined with GPUs anymore, but custom chips specifically designed to mine bitcoins.

I agree with the point rka is making, and I would add that there are also potential changes to the Bitcoin blockchain in the future that could make it more manageable. For instance:

1. Once the blockchain size got to, say, 100 TB, perhaps the blockchain breaks in two: the Historical Blockchain (stored on only a few thousand computers around the world) and the Current Blockchain (with wallet holdings starting at some arbitrary block height, and all transactions moving forward from there). Users only store the Current Blockchain on their computers. (I realize there are exponential growth challenges here.)

2. Or, at the point we are talking about, there might be many millions of computers around the world using the blockchain. Perhaps a technology is built whereby, instead of every computer acting as a node, clusters of, say, 100 computers act as a single node. That would reduce any single computer's storage need to 1/100th what it was previously.

While the current Bitcoin blockchain depends on every user storing the entire blockchain, there could be potential solutions to change that in the future, to cope with storage constraints while preserving the distributed ledger principle.
Title: Re: Cryptocurrencies
Post by: Liberty on July 16, 2017, 03:27:32 PM
BTC just went to 1800, ETH to 130... Talk about volatility for 'currencies'.
Title: Re: Cryptocurrencies
Post by: mttddd on July 16, 2017, 03:48:35 PM
Indeed, Iv been having good success trading though
Title: Re: Cryptocurrencies
Post by: rkbabang on July 17, 2017, 07:49:25 AM
I haven't been trading, but for the first time in more than a year I've started buying again.  I've been buying more BTC, because I already own 3x more ETH than BTC (in $US value).  There's not a whole hell of a lot to buy in the stock market right now, so some new money is going into BTC presently.
Title: Re: Cryptocurrencies
Post by: rkbabang on July 17, 2017, 07:58:51 AM
BTC just went to 1800, ETH to 130... Talk about volatility for 'currencies'.

While BTC maybe a 'currency' it is like a nano-cap currency.  The vast majority of people on earth have never heard of it, the vast majority of those who have heard of it have no idea how to acquire or use it, and the vast majority who do know how to acquire it are holding it or trading it for speculation purposes.  It isn't functioning as a currency for the most part yet, so wild price swings are pretty much inevitable.   That goes double for ETH as it is accepted as currency even less often.  There are Bitcoin ATMs and businesses which accept Bitcoin, not so much for ETH yet.  Couple that with the fact that most "investors" have no prior investing experience and panic at the first sight of a down tick in price and, yeah, it's going to be a rollercoaster for a while.
Title: Re: Cryptocurrencies
Post by: mttddd on July 17, 2017, 08:11:08 AM
I did buy some bitcoin in the 1800s but I am accumulating some powder for closer to or after august first. I am hesitant to put much more in until I get a better sense of how Segwit is going to play out, I personally see that as the cause of a lot of the current volatility
Title: Re: Cryptocurrencies
Post by: rkbabang on July 17, 2017, 08:28:22 AM
I did buy some bitcoin in the 1800s but I am accumulating some powder for closer to or after august first. I am hesitant to put much more in until I get a better sense of how Segwit is going to play out, I personally see that as the cause of a lot of the current volatility

I also think that is the reason for the volatility. The reason I'm buying some now is that if all goes well the price will probably bump right back up without giving you the opportunity to purchase even at current prices.  Markets fall on uncertainty which is what we are seeing now.  Of course if things don't go well with many people choosing to keep the original blockchain alive BTC could split into two like ETH/ETC and prices may fall even further.   This could be an opportunity as well.  After the etherium hardfork I was able to convert my ETC into ETH to increase my ETH holdings.  It should be interesting to follow anyway.


Title: Re: Cryptocurrencies
Post by: Jurgis on July 17, 2017, 11:31:33 AM
I did buy some bitcoin in the 1800s

I also time-travelled back to the 1800s and tried to buy bitcoin, but the Amsterdam folks were all talking tulips to me...

Oh wait...

NVM.

 8)
Title: Re: Cryptocurrencies
Post by: rkbabang on July 17, 2017, 11:40:44 AM
I did buy some bitcoin in the 1800s

I also time-travelled back to the 1800s and tried to buy bitcoin, but the Amsterdam folks were all talking tulips to me...

Oh wait...

NVM.

 8)

;)  I recently read someone saying that "If you bought bitcoin stock 10 years ago it would be worth a fortune today".
Title: Re: Cryptocurrencies
Post by: Travis Wiedower on July 17, 2017, 02:58:10 PM
Went down a 3-hour crytocurrency rabbit hole this afternoon--interesting stuff. Anyone have a good non-technical book recommendation that isn't written by a total fan boy? Just looking for a good overview of everything and how it works, not 101 reasons why crypto is going to take over the world.
Title: Re: Cryptocurrencies
Post by: Fat Pitch on July 17, 2017, 03:48:31 PM
Here's a good start http://www.usv.com/blog/fat-protocols

It requires you to re-think the current business models of the internet economy.
Title: Re: Cryptocurrencies
Post by: DTEJD1997 on July 17, 2017, 04:47:10 PM
I did buy some bitcoin in the 1800s

I also time-travelled back to the 1800s and tried to buy bitcoin, but the Amsterdam folks were all talking tulips to me...

Oh wait...

NVM.

 8)

You know what Abraham Lincoln said about the interweb? 

"Don't believe everything you see on the interwebs!"

-Abraham Lincoln
Title: Re: Cryptocurrencies
Post by: SharperDingaan on July 18, 2017, 06:51:47 AM
The $50,000 bitcoin?
http://fortune.com/2014/02/18/could-there-be-a-50000-bitcoin/

The article speaks to a back-of-the-envelope valuation approach that is just one of many; but you may want to just go back to the very basic supply/demand model, and think of it as the price set by supply/demand as at a point in time.

At any one point in time the supply is essentially fixed. As new coin is added only by the mining process, at a insignificant rate that is not a function of price - the supply curve is vertical at any point in time. However, over time - the supply will increase from today's 7M to the maximum 21M per the design specs.

Hence almost all the price change, reflects demand change; find new ways to raise demand for bitcoin, and the price must rise. Could be by a virus demanding bitcoin as ransom, could be via textbooks citing bitcoin - as the technology is rolled out and the masses buy some to play with, could be by treating bitcoin as an asset class - no different to a stock, and it could be by creating credit swaps with bitcoin and cash as different legs of the swap. Lots of ways - all increasing demand for the coin - and thereby its price.

All technology rides a 'S' curve, and crypto-currency is in its very early days still.
As the technology begins to ride the neck of the 'S', a $50,000/coin exchange rate at some point is not unrealistic.

Nothing says you have to buy a whole bitcoin at 50K to participate, just as nothing says you have to buy a full BRK share at a few hundred thousand; baby B's are widely available.

Sometimes, the simpler the better.

SD
 
     
Title: Re: Cryptocurrencies
Post by: enoch01 on July 18, 2017, 07:28:30 AM
SD,

At what price are you buying bitcoin, and at what price are you selling?
Title: Re: Cryptocurrencies
Post by: giofranchi on July 18, 2017, 07:38:34 AM
I am reading "Blockchain Revolution" by Don Tapscott, and I find it to be quite fascinating so far.
Here you can find the most interesting excerpts:

https://twitter.com/giovfranchi/status/881169480755314688

Cheers,

Gio
Title: Re: Cryptocurrencies
Post by: SharperDingaan on July 18, 2017, 10:03:46 AM
SD,

At what price are you buying bitcoin, and at what price are you selling?

We just invest the same small amount every quarter, and try to be opportunistic along the way; sometimes we're right, other times not so much. Ideally the weighted average realizable value of our token doubles along the way, we sell 1/2 to recover our investment, and let the rest ride.

Bitcoin isn't the best at what it does; but like it or not it's the benchmark standard against which others are compared - if only because its the most liquid and best known. They have first mover advantage, much as RIM had at one time with the Blackberry.

If it turns out to be the next Apple, we look like Forest Gump.
If not, no big deal - as long as we've recovered our original investment.

SD
   
Title: Re: Cryptocurrencies
Post by: rkbabang on July 19, 2017, 06:44:19 AM
It's looking like 80%+ of the bitcoin miners are already signaling support for the BIP91 proposal.
https://www.xbt.eu/

Good brief summary of the possible timelines here:
UASF/Segwit2x Scenarios and Timelines (https://medium.com/@jimmysong/uasf-segwit2x-scenarios-and-timelines-1a540336c4be)
Title: Re: Cryptocurrencies
Post by: rkbabang on July 21, 2017, 05:42:33 AM
It's looking like 80%+ of the bitcoin miners are already signaling support for the BIP91 proposal.
https://www.xbt.eu/

Good brief summary of the possible timelines here:
UASF/Segwit2x Scenarios and Timelines (https://medium.com/@jimmysong/uasf-segwit2x-scenarios-and-timelines-1a540336c4be)


From: https://www.xbt.eu/

"BIP91 LOCKED-IN  267 blocks until rejecting non-SegWit blocks."
Title: Re: Cryptocurrencies
Post by: clutch on July 23, 2017, 06:22:29 AM
Aside: Do you want to clone the AlphaBay creator's cryptocurrency allocations?  ;D

http://www.cbc.ca/news/canada/montreal/alexandre-cazes-millionaire-cars-property-alphabay-1.4215894

Quote
Cazes's assets seized by the U.S. government included $6.6 million Cdn in bitcoin, $2.4 million in Etherium, $622,000 in Monero, and $980,512 in Zcash.
Title: Re: Cryptocurrencies
Post by: rkbabang on July 24, 2017, 05:38:19 AM
Aside: Do you want to clone the AlphaBay creator's cryptocurrency allocations?  ;D

http://www.cbc.ca/news/canada/montreal/alexandre-cazes-millionaire-cars-property-alphabay-1.4215894

Quote
Cazes's assets seized by the U.S. government included $6.6 million Cdn in bitcoin, $2.4 million in Etherium, $622,000 in Monero, and $980,512 in Zcash.

I'd love to.   Unfortunately my balances are somewhat lower.  :(

On the bright side though, I still have mine. :)

What a tragic story though.  Since I don't think any object or substance should be illegal, I don't think he did anything wrong.  Quite the opposite, he provided a way for people to safely buy what they wanted without the dangers of dealing in person with shady and possibly dangerous characters.  In short he put his own life and freedom on the line everyday, not only to profit, but to save lives as well.  If this guy was anything he was a hero.   In other words the exact opposite of people for whom my disdain couldn't be greater, like Jeff Sessions and others involved in taking him out.
Title: Re: Cryptocurrencies
Post by: DeepSouth on July 24, 2017, 06:49:01 AM
Aside: Do you want to clone the AlphaBay creator's cryptocurrency allocations?  ;D

http://www.cbc.ca/news/canada/montreal/alexandre-cazes-millionaire-cars-property-alphabay-1.4215894

Quote
Cazes's assets seized by the U.S. government included $6.6 million Cdn in bitcoin, $2.4 million in Etherium, $622,000 in Monero, and $980,512 in Zcash.

I'd love to.   Unfortunately my balances are somewhat lower.  :(

On the bright side though, I still have mine. :)

What a tragic story though.  Since I don't think any object or substance should be illegal, I don't think he did anything wrong.  Quite the opposite, he provided a way for people to safely buy what they wanted without the dangers of dealing in person with shady and possibly dangerous characters.  In short he put his own life and freedom on the line everyday, not only to profit, but to save lives as well.  If this guy was anything he was a hero.   In other words the exact opposite of people for whom my disdain couldn't be greater, like Jeff Sessions and others involved in taking him out.

Yes, what will you do without the ability to easily commit identity and financial frauds on a massive scale? You're going to have to find a new marketplace to buy and sell the financial records of >100k innocent people and malware to procure more. As you said, I'm sure hackers and fraudsters will die without the ability to anonymously buy/sell malware. /s
Title: Re: Cryptocurrencies
Post by: rkbabang on July 24, 2017, 07:21:57 AM
Aside: Do you want to clone the AlphaBay creator's cryptocurrency allocations?  ;D

http://www.cbc.ca/news/canada/montreal/alexandre-cazes-millionaire-cars-property-alphabay-1.4215894

Quote
Cazes's assets seized by the U.S. government included $6.6 million Cdn in bitcoin, $2.4 million in Etherium, $622,000 in Monero, and $980,512 in Zcash.

I'd love to.   Unfortunately my balances are somewhat lower.  :(

On the bright side though, I still have mine. :)

What a tragic story though.  Since I don't think any object or substance should be illegal, I don't think he did anything wrong.  Quite the opposite, he provided a way for people to safely buy what they wanted without the dangers of dealing in person with shady and possibly dangerous characters.  In short he put his own life and freedom on the line everyday, not only to profit, but to save lives as well.  If this guy was anything he was a hero.   In other words the exact opposite of people for whom my disdain couldn't be greater, like Jeff Sessions and others involved in taking him out.

Yes, what will you do without the ability to easily commit identity and financial frauds on a massive scale? You're going to have to find a new marketplace to buy and sell the financial records of >100k innocent people and malware to procure more. As you said, I'm sure hackers and fraudsters will die without the ability to anonymously buy/sell malware. /s

That's a small part of what went on there.  That's like saying craigslist is bad because stolen goods are sometimes sold there.  The people creating and using malware are doing something wrong, not the person running an online marketplace where things can be bought and sold.  If someone finds a hitman on craigslist and pays him in cash does that mean Craigslist and the US Dollar are to blame?  That is the same kind of thinking that says if someone is stabbed you blame the company who made the knife and the retailer who sold the knife rather than the person who actually committed murder.
Title: Re: Cryptocurrencies
Post by: DeepSouth on July 24, 2017, 08:31:23 AM
Aside: Do you want to clone the AlphaBay creator's cryptocurrency allocations?  ;D

http://www.cbc.ca/news/canada/montreal/alexandre-cazes-millionaire-cars-property-alphabay-1.4215894

Quote
Cazes's assets seized by the U.S. government included $6.6 million Cdn in bitcoin, $2.4 million in Etherium, $622,000 in Monero, and $980,512 in Zcash.

I'd love to.   Unfortunately my balances are somewhat lower.  :(

On the bright side though, I still have mine. :)

What a tragic story though.  Since I don't think any object or substance should be illegal, I don't think he did anything wrong.  Quite the opposite, he provided a way for people to safely buy what they wanted without the dangers of dealing in person with shady and possibly dangerous characters.  In short he put his own life and freedom on the line everyday, not only to profit, but to save lives as well.  If this guy was anything he was a hero.   In other words the exact opposite of people for whom my disdain couldn't be greater, like Jeff Sessions and others involved in taking him out.

Yes, what will you do without the ability to easily commit identity and financial frauds on a massive scale? You're going to have to find a new marketplace to buy and sell the financial records of >100k innocent people and malware to procure more. As you said, I'm sure hackers and fraudsters will die without the ability to anonymously buy/sell malware. /s

That's a small part of what went on there.  That's like saying craigslist is bad because stolen goods are sometimes sold there.  The people creating and using malware are doing something wrong, not the person running an online marketplace where things can be bought and sold.  If someone finds a hitman on craigslist and pays him in cash does that mean Craigslist and the US Dollar are to blame?  That is the same kind of thinking that says if someone is stabbed you blame the company who made the knife and the retailer who sold the knife rather than the person who actually committed murder.

If Craigslist is actively aware of hitmen advertising themselves on Craigslist and continue to make their platform available to said hitmen then they are bad and their management should be imprisoned. Craigslist would be actively facilitating murder for hire.

Are you under the impression that Craigslist actively facilitates this and would refuse to comply with authorities if hitmen classifieds are found on their site? This is insane.
Title: Re: Cryptocurrencies
Post by: rkbabang on July 24, 2017, 09:07:10 AM
Aside: Do you want to clone the AlphaBay creator's cryptocurrency allocations?  ;D

http://www.cbc.ca/news/canada/montreal/alexandre-cazes-millionaire-cars-property-alphabay-1.4215894

Quote
Cazes's assets seized by the U.S. government included $6.6 million Cdn in bitcoin, $2.4 million in Etherium, $622,000 in Monero, and $980,512 in Zcash.

I'd love to.   Unfortunately my balances are somewhat lower.  :(

On the bright side though, I still have mine. :)

What a tragic story though.  Since I don't think any object or substance should be illegal, I don't think he did anything wrong.  Quite the opposite, he provided a way for people to safely buy what they wanted without the dangers of dealing in person with shady and possibly dangerous characters.  In short he put his own life and freedom on the line everyday, not only to profit, but to save lives as well.  If this guy was anything he was a hero.   In other words the exact opposite of people for whom my disdain couldn't be greater, like Jeff Sessions and others involved in taking him out.

Yes, what will you do without the ability to easily commit identity and financial frauds on a massive scale? You're going to have to find a new marketplace to buy and sell the financial records of >100k innocent people and malware to procure more. As you said, I'm sure hackers and fraudsters will die without the ability to anonymously buy/sell malware. /s

That's a small part of what went on there.  That's like saying craigslist is bad because stolen goods are sometimes sold there.  The people creating and using malware are doing something wrong, not the person running an online marketplace where things can be bought and sold.  If someone finds a hitman on craigslist and pays him in cash does that mean Craigslist and the US Dollar are to blame?  That is the same kind of thinking that says if someone is stabbed you blame the company who made the knife and the retailer who sold the knife rather than the person who actually committed murder.

If Craigslist is actively aware of hitmen advertising themselves on Craigslist and continue to make their platform available to said hitmen then they are bad and their management should be imprisoned. Craigslist would be actively facilitating murder for hire.

Are you under the impression that Craigslist actively facilitates this and would refuse to comply with authorities if hitmen classifieds are found on their site? This is insane.

I'm not saying that Craigslist actively facilitates this, but let's just say compared to say ebay or Amazon, it is a lot easier to fence stolen goods, or advertize sex for hire, or even something as extreme as a hitman for hire, on Craigslist.  I'm not saying that Craigslist should change, or that they are liable, I'm just saying that there are things they could do and they don't.
Title: Re: Cryptocurrencies
Post by: DeepSouth on July 24, 2017, 09:54:23 AM
Aside: Do you want to clone the AlphaBay creator's cryptocurrency allocations?  ;D

http://www.cbc.ca/news/canada/montreal/alexandre-cazes-millionaire-cars-property-alphabay-1.4215894

Quote
Cazes's assets seized by the U.S. government included $6.6 million Cdn in bitcoin, $2.4 million in Etherium, $622,000 in Monero, and $980,512 in Zcash.

I'd love to.   Unfortunately my balances are somewhat lower.  :(

On the bright side though, I still have mine. :)

What a tragic story though.  Since I don't think any object or substance should be illegal, I don't think he did anything wrong.  Quite the opposite, he provided a way for people to safely buy what they wanted without the dangers of dealing in person with shady and possibly dangerous characters.  In short he put his own life and freedom on the line everyday, not only to profit, but to save lives as well.  If this guy was anything he was a hero.   In other words the exact opposite of people for whom my disdain couldn't be greater, like Jeff Sessions and others involved in taking him out.

Yes, what will you do without the ability to easily commit identity and financial frauds on a massive scale? You're going to have to find a new marketplace to buy and sell the financial records of >100k innocent people and malware to procure more. As you said, I'm sure hackers and fraudsters will die without the ability to anonymously buy/sell malware. /s

That's a small part of what went on there.  That's like saying craigslist is bad because stolen goods are sometimes sold there.  The people creating and using malware are doing something wrong, not the person running an online marketplace where things can be bought and sold.  If someone finds a hitman on craigslist and pays him in cash does that mean Craigslist and the US Dollar are to blame?  That is the same kind of thinking that says if someone is stabbed you blame the company who made the knife and the retailer who sold the knife rather than the person who actually committed murder.

If Craigslist is actively aware of hitmen advertising themselves on Craigslist and continue to make their platform available to said hitmen then they are bad and their management should be imprisoned. Craigslist would be actively facilitating murder for hire.

Are you under the impression that Craigslist actively facilitates this and would refuse to comply with authorities if hitmen classifieds are found on their site? This is insane.

I'm not saying that Craigslist actively facilitates this, but let's just say compared to say ebay or Amazon, it is a lot easier to fence stolen goods, or advertize sex for hire, or even something as extreme as a hitman for hire, on Craigslist.  I'm not saying that Craigslist should change, or that they are liable, I'm just saying that there are things they could do and they don't.

In this case, it seems like alphabay was actively engaged in the promotion and distribution of malware and identity theft portfolios. Assuming you are a libertarian ideologue, both of those things should count as aggression/violence. Just as someone who fences knowingly stolen goods has responsibility in the chain of the crime whether they stole those goods or not, so does a platform that knowingly and actively enables these crimes. It's very disturbing that you believe this is a heroic action. It's like you don't think a getaway driver should be held liable for a drive by shooting because he didn't pull the trigger, he only actively facilitated the crime, and therefore should be lauded and rewarded as a hero.
Title: Re: Cryptocurrencies
Post by: rkbabang on July 24, 2017, 10:01:47 AM
In this case, it seems like alphabay was actively engaged in the promotion and distribution of malware and identity theft portfolios. Assuming you are a libertarian ideologue, both of those things should count as aggression/violence. Just as someone who fences knowingly stolen goods has responsibility in the chain of the crime whether they stole those goods or not, so does a platform that knowingly and actively enables these crimes. It's very disturbing that you believe this is a heroic action. It's like you don't think a getaway driver should be held liable for a drive by shooting because he didn't pull the trigger, he only actively facilitated the crime, and therefore should be lauded and rewarded as a hero.

If alphabay was actively engaged in the promotion and distribution of malware and identity theft as you say then I will concede that you are correct.  If they simply setup an anonymous marketplace and didn't police it, then I will stick by my previous statements.  I do think a getaway driver is just as guilty as the one who pulls the trigger.
Title: Re: Cryptocurrencies
Post by: rkbabang on July 26, 2017, 06:13:11 AM
If anyone is holding Bitcoin at Coinbase, an exchange, or with some other 3rd party system where you don't control your keys.  You might want to transfer it to a wallet which you control the private keys before August 1st, this way in the case of a hard fork you will end up holding an equal amount of both coins.   If you hold Bitcoin in Coinbase you will most likely not get any Bitcoin Cash (BCC).  You can always transfer BTC right back into coinbase afterwards if that is where you want to hold it.

https://news.bitcoin.com/what-every-bitcoiner-should-know-about-bitcoin-cash/
Title: Re: Cryptocurrencies
Post by: rkbabang on July 28, 2017, 05:40:08 AM
If anyone is holding Bitcoin at Coinbase, an exchange, or with some other 3rd party system where you don't control your keys.  You might want to transfer it to a wallet which you control the private keys before August 1st, this way in the case of a hard fork you will end up holding an equal amount of both coins.   If you hold Bitcoin in Coinbase you will most likely not get any Bitcoin Cash (BCC).  You can always transfer BTC right back into coinbase afterwards if that is where you want to hold it.

https://news.bitcoin.com/what-every-bitcoiner-should-know-about-bitcoin-cash/


My assumption that Coinbase would only support one side of any Bitcoin fork was correct.  Here is the official position:
 https://blog.coinbase.com/update-for-customers-with-bitcoin-stored-on-coinbase-99e2d4790a53

"customers with Bitcoin stored on Coinbase will only have access to the current version of bitcoin we support (BTC). Customers will not have access to, or be able to withdraw, bitcoin cash (BCC). Customers who wish to access both bitcoin (BTC) and bitcoin cash (BCC) need to withdraw bitcoin stored on Coinbase before 11.59 pm PT July 31, 2017. If you do not wish to access bitcoin cash (BCC) then no action is required."

Title: Re: Cryptocurrencies
Post by: DeepSouth on July 28, 2017, 10:44:35 AM
In this case, it seems like alphabay was actively engaged in the promotion and distribution of malware and identity theft portfolios. Assuming you are a libertarian ideologue, both of those things should count as aggression/violence. Just as someone who fences knowingly stolen goods has responsibility in the chain of the crime whether they stole those goods or not, so does a platform that knowingly and actively enables these crimes. It's very disturbing that you believe this is a heroic action. It's like you don't think a getaway driver should be held liable for a drive by shooting because he didn't pull the trigger, he only actively facilitated the crime, and therefore should be lauded and rewarded as a hero.

If alphabay was actively engaged in the promotion and distribution of malware and identity theft as you say then I will concede that you are correct.  If they simply setup an anonymous marketplace and didn't police it, then I will stick by my previous statements.  I do think a getaway driver is just as guilty as the one who pulls the trigger.


http://www.businessinsider.com/dark-web-market-alphabay-2015-11/#online-black-markets-dont-exist-on-the-normal-internet-that-most-people-think-of-1

He created one section of the marketplace explicitly for the sale of malware and another that is simply labeled "fraud" most likely where stolen credit card numbers are sold from. Screenshots in the BI article. I mean what did you think was happening, some nice guy built a website and then closed his eyes while thieves fenced stolen goods/credit card numbers/malware under his nose?
Title: Re: Cryptocurrencies
Post by: Jurgis on September 26, 2017, 08:55:58 PM
https://on.acm.org/t/algorand-a-better-distributed-ledger/374

Quote
A distributed ledger is a tamperproof sequence of data that can be read and augmented by everyone. Distributed ledgers stand to revolutionize the way a democratic society operates. They secure all kinds of traditional transactions—such as payments, asset transfers, titling—in the exact order in which they occur; and enable totally new transactions—such as cryptocurrencies and smart contracts. They can remove intermediaries and usher in a new paradigm for trust. As currently implemented, however, distributed ledgers cannot achieve their enormous potential.

Algorand is an alternative, democratic, and efficient distributed ledger. Unlike prior ledgers based on "proof of work," it dispenses with "miners." Indeed, Algorand requires only a negligible amount of computation. Moreover, its transaction history does not "fork" with overwhelming probability: i.e., Algorand guarantees the finality of all transactions.

SPEAKER
Silvio Micali
Faculty at MIT and ACM A.M. Turing Award Winner

Date: 10/13/17
Time: 12:00 PM ET
Duration: 1 Hour

This is public service announcement for interested. I have no expertise in the area and the quality of this research/claims. ACM webinars are usually boring.
Title: Re: Cryptocurrencies
Post by: Liberty on September 27, 2017, 07:34:58 AM
Podcast on blockchain and cryptocurrencies:

http://investorfieldguide.com/hashpower/
Title: Re: Cryptocurrencies
Post by: JimBowerman on September 28, 2017, 02:46:40 PM
You need to be very clear why you are in these things, and what your thesis is.

You also need to mindful that the distributed security of Bitcoin isn't really working as claimed anymore, as >50% of miners are under the same 'controlling mind'.

SD

The switching costs are quite low for mining pools.  If there was rampant abuse by a certain pool, I believe most miners would quickly switch mining pools.
Title: Re: Cryptocurrencies
Post by: SharperDingaan on September 28, 2017, 03:06:05 PM
You need to be very clear why you are in these things, and what your thesis is.

You also need to mindful that the distributed security of Bitcoin isn't really working as claimed anymore, as >50% of miners are under the same 'controlling mind'.

SD

The switching costs are quite low for mining pools.  If there was rampant abuse by a certain pool, I believe most miners would quickly switch mining pools.

When the miners are mining in coordinated 'pools', and those pools are responsible for well over 50% of all the mining activity; the miners themselves are the abusers. While individual miners may switch between coordinated pools, there is no difference in the collective outcome.

SD
Title: Re: Cryptocurrencies
Post by: rkbabang on October 20, 2017, 06:32:17 AM
Podcast on blockchain and cryptocurrencies:

http://investorfieldguide.com/hashpower/

In case anyone missed this, episodes 2 & 3 are now out (only episode 1 was available when Liberty originally posted this) and all of them are excellent.
 
Title: Re: Cryptocurrencies
Post by: turar on October 20, 2017, 08:43:14 AM
Don't know if this was posted here before, but here's Jamie Dimon on bitcoin: https://www.bloomberg.com/news/articles/2017-10-13/jamie-dimon-lasts-one-day-on-his-vow-to-not-talk-about-bitcoin

I happen to agree with him. He completely understands how fiat currencies work, and how currencies MUST go hand in hand with governments and sovereign state power.
Title: Re: Cryptocurrencies
Post by: Aberhound on October 20, 2017, 11:03:43 AM
Paul Brodsky who writes the excellent MAI newsletter is moving to a Blockchain fund.

From: Paul Brodsky [mailto:pbrodsky@macro-allocation.com]
Sent: October-18-17 2:49 AM
Subject: Special Announcement
 
As you may know, in recent months I have been exploring and re-exploring a theme too compelling to ignore: the under-appreciated paradigm shift occurring in the way the world will exchange commerce, create wealth and use money. (I refer you specifically to Game Change, Golden Age, Test Time, Thick & Thin, Structural Shift, Mad Dogs & Gaslights, Cryptonite, and Gold, Dollars & Bitcoin, which may be accessed after free registration here.)
 
It is time to act. I am incredibly honored and excited to have been asked to become a partner and open the New York office of Pantera Capital, the leading fund devoted to digital assets and cryptocurrencies.
 
I have known Pantera’s CEO – Dan Morehead – for many years, since he was a macro fund manager. Dan saw the substantial opportunity set surrounding blockchain technology in 2013, and went “all-in”. Today, Pantera’s best-in-class Sand Hill Road team of entrepreneurs, technologists and analysts oversee funds positioned across the bourgeoning digital asset/crypto space.
 
On a personal level, I have been lucky enough to have enjoyed first-hand transformative shifts on Wall Street, including the advent and build-out of securitization, the swaps market and the Internet. Digitally-based peer-to-peer investing and value exchange sitting atop the Internet that rewards users rather than gatekeepers is just beginning to present itself. It is thrilling to join the premier firm in the space at the forefront of these nascent applications.
 
As for MAI, I plan to continue expressing my views in some way, shape or form. I will keep the website open so that you may access it. (Let me know if you misplaced your login credentials.)
 
For those with whom I discussed investing in PostModern Partners, it has become increasingly obvious to me that blockchain-based investing presents unparalleled risk-adjusted secular returns. While I believe PostModern would have offered an optimal investment program to take advantage of the fundamental problems facing economies and financial asset markets today, Pantera’s blockchain funds are set up to offer investors the opportunity to profit from solutions to those problems. As a Pantera Partner, I will be able to focus every day on applications that remedy much of what ails us.       
 
Please feel free to contact me directly -- anytime – if you would like more information about blockchain, digital assets, cryptocurrencies, Pantera, or anything else. I look forward to staying in touch.
 
Kind regards,
 
Paul Brodsky
(917) 538 - 1908
Title: Re: Cryptocurrencies
Post by: writser on October 20, 2017, 12:06:18 PM
Very smart move. Lots of suckers willing to hand over their money.
Title: Re: Cryptocurrencies
Post by: doughishere on October 20, 2017, 12:14:26 PM
https://charlierose.com/videos/31079


Friday 10/20/2017
A conversation about bitcoin, blockchain technology, and the future of digital currency, featuring Catherine Wood, C.E.O. and C.I.O. of Ark Investment Management; Paul Vigna, a reporter for The Wall Street Journal; and Lily Katz, a reporter at Bloomberg News.
Title: Re: Cryptocurrencies
Post by: SharperDingaan on October 20, 2017, 01:15:06 PM
Very smart move. Lots of suckers willing to hand over their money.

If they just build a portfolio of cryptocoin (Bitcoin, Ether, etc.) they (and their investors) deserve everything that is coming to them.
But if they go into existing businesses; and JV with them to fund block chain/smart contract applications that fundamentally change the 'plumbing' of their business - the sky is literally the limit. I teach a due diligence course in the implementation of block chain/smart applications that advocates doing something very similar to this :)

All it really needs is an existing (profitable) business, a group of developers, and a long-term funder. The JV gets bought out, the funder takes stock over cash, & resells later at inflated CF multiples when the applications deliver the greatly increased CF/share from automation.

Everybody involved ends up doing very, very well.

SD

 


     
Title: Re: Cryptocurrencies
Post by: Mark Jr. on October 22, 2017, 11:45:35 AM
I teach a due diligence course in the implementation of block chain/smart applications that advocates doing something very similar to this :)

I would like to know more about this course.

All it really needs is an existing (profitable) business, a group of developers, and a long-term funder. The JV gets bought out, the funder takes stock over cash, & resells later at inflated CF multiples when the applications deliver the greatly increased CF/share from automation.

Everybody involved ends up doing very, very well.

SD

We should talk.

- mark
 


   
Title: Re: Cryptocurrencies
Post by: Mark Jr. on October 22, 2017, 12:01:12 PM
I am reading "Blockchain Revolution" by Don Tapscott, and I find it to be quite fascinating so far.
Here you can find the most interesting excerpts:

https://twitter.com/giovfranchi/status/881169480755314688

Cheers,

Gio

Good one.

From an investment standpoint, the more recent Cryptoassets by Chris Burniske and Jack Tatar is pretty good so far (about halfway through).

Epicenter podcast episode with Ari Paul of Blocktower Capital is another rational investment perspective on all this.
https://letstalkbitcoin.com/blog/post/epicenter-202-ari-paul-blocktower-capital-and-the-cryptocurrency-opportunity
Title: Re: Cryptocurrencies
Post by: Mark Jr. on October 22, 2017, 12:30:19 PM
Don't know if this was posted here before, but here's Jamie Dimon on bitcoin: https://www.bloomberg.com/news/articles/2017-10-13/jamie-dimon-lasts-one-day-on-his-vow-to-not-talk-about-bitcoin

I happen to agree with him. He completely understands how fiat currencies work, and how currencies MUST go hand in hand with governments and sovereign state power.

Dimon is part of the same apparatus that cryptocurrency evolved to mitigate, so of course, from that perspective "it's a fad". The reality is, since every fiat currency is debasing itself, since every government behind fiat currencies is targeting inflation, suppressing interest rates and since many sovereign state powers are making "bail-ins" part of the calculus, had cryptocurrencies not been invented yet, they would be by now.

That is what I think is the primary driver behind all this. It's a type of capital flight, and since the ascent lately has been dizzying, it is starting to feed on itself. If it is a bubble, it's one of the first that hasn't been fueled by credit expansion, so in that respect "this time is different" at least in that aspect.

 It's easy to say "it's a ponzi" or "it's backed by nothing" or it's "just a digital fiat" when you don't understand the underlying math. These things are an inelastic currency that use asymmetric cryptography to facilitate zero knowledge capital flow.

I've never seen anything as volatile is this stuff though. Price can drop 50% in a day or two. Then surpass previous highs within a week. One of best quips I heard to describe it was "bitcoin may be a pretty good long-term storage of value, but it's a terrible short term one". Maybe once crypto-currencies have been around for generations there will be some well known law or axiom showing that crypto-currency volatility is inversely proportional to stock market volatility by some factor symbolized by a letter from the greek alphabet.

I've always remarked that the price action is really a side show for me. It's the decentralization of the monopoly control over money that is the big deal, and it is happening, it's completely understandable why it's happening and it's an existential threat to people like Jamie Dimon.

As long as global governments are rigging the game, financially repressing savers and trying to chase all capital into the stock and bond markets, these things will not lose steam.

Title: Re: Cryptocurrencies
Post by: Cigarbutt on October 23, 2017, 04:49:19 AM
Links:

https://www.wired.com/story/captains-of-finance-dismiss-bitcoin-at-their-peril/
https://www.forbes.com/sites/johntamny/2017/10/22/bitcoins-surge-to-5600-reveals-why-its-a-junk-currency/#4ca9293f61c8
from Mark Jr: "These things are an inelastic currency that use asymmetric cryptography to facilitate zero knowledge capital flow."

One of my tests for investment ideas requires that I could convincingly explain the thesis to my 10 year-old in less than two minutes.
I'm not there yet.
First, I have to review the meanings of trust and agreement in the dictionary.   
Then again, who can you trust these days?

Title: Re: Cryptocurrencies
Post by: rkbabang on October 23, 2017, 05:24:18 AM
Links:

https://www.wired.com/story/captains-of-finance-dismiss-bitcoin-at-their-peril/
https://www.forbes.com/sites/johntamny/2017/10/22/bitcoins-surge-to-5600-reveals-why-its-a-junk-currency/#4ca9293f61c8
from Mark Jr: "These things are an inelastic currency that use asymmetric cryptography to facilitate zero knowledge capital flow."

One of my tests for investment ideas requires that I could convincingly explain the thesis to my 10 year-old in less than two minutes.
I'm not there yet.
First, I have to review the meanings of trust and agreement in the dictionary.   
Then again, who can you trust these days?

You can, and should, trust no one, which is why I'm bullish on crypto.
Title: Re: Cryptocurrencies
Post by: Jurgis on October 25, 2017, 09:43:27 AM
More fun info on Algorand. Seminar is today, so I removed time/date/location since I doubt that anyone will make it. I'm sure there's more info online.

----------------------------------------------

Algorand: Scaling Byzantine Agreements for Cryptocurrencies
Seminar Series: CSAIL Security Seminar 2017/2018
Speaker: Yossi Gilad
Speaker Affiliation: MIT CSAIL, Boston University
Host: CSAIL Security Seminar

Algorand: Scaling Byzantine Agreements for Cryptocurrencies

Abstract

Algorand is a new cryptocurrency that confirms transactions
with latency on the order of a minute while scaling to many
users. Algorand ensures that users never have divergent
views of confirmed transactions, even if some of the users
are malicious and the network is temporarily partitioned.
In contrast, existing cryptocurrencies allow for temporary
forks and therefore require a long time, on the order of an
hour, to confirm transactions with high confidence.

Algorand uses a new Byzantine Agreement (BA) protocol
to reach consensus among users on the next set of transactions.
To scale the consensus to many users, Algorand
uses a novel mechanism based on Verifiable Random Functions
that allows users to privately check whether they are
selected to participate in the BA to agree on the next set
of transactions, and to include a proof of their selection in
their network messages. In Algorand’s BA protocol, users
do not keep any private state except for their private keys,
which allows Algorand to replace participants immediately
after they send a message. This mitigates targeted attacks
on chosen participants after their identity is revealed.

We implement Algorand and evaluate its performance on
1,000 EC2 virtual machines, simulating up to 500,000 users.
Experimental results show that Algorand confirms transactions
in under a minute, achieves 125× Bitcoin’s throughput,
and incurs almost no penalty for scaling to more users.

Bio

Yossi Gilad is a postdoctoral researcher at MIT and Boston University. His research interests include designing, building, and analyzing secure and scalable networked systems.
Prior to this position he was a postdoctoral researcher at the Hebrew University of Jerusalem, and a research staff member at IBM Research. He is a recipient of the IETF/IRTF Applied Networking Research Prize (2017), the IBM Research Inventor Recognition Award (2015), and the Check Point Institute Information Security Prize (2013-2014).
Title: Re: Cryptocurrencies
Post by: Fat Pitch on October 25, 2017, 11:06:18 AM
Removing incentives makes 51% attacks costless. Bitcoin's consensus algo assumes everyone is a hostile actor so you put rules in place that makes it irrational to attack the network. I mean you still can attack bitcoin, but you are consuming electricity and depreciating your hardware.

Anything that promises huge scaling comes at the cost of security. Blockchain doesn't make sense for most businesses. They are better off using trusted execution environments which gives them strong encryption and you can scale rapidly using centrally hosted cloud infrastructure. ICOs are in a bubble since they lack mechanisms to capture any value. Only bitcoin and maybe eth are capturing any value.

If bitcoin can achieve store of value status, then the market valuation of any other use case will be peanuts.

More fun info on Algorand. Seminar is today, so I removed time/date/location since I doubt that anyone will make it. I'm sure there's more info online.
Title: Re: Cryptocurrencies
Post by: porcupine on November 02, 2017, 03:52:15 PM
I have a question for all the crypto longs:

When do you sell?

Do you hold until it becomes used as a currency? If it is used as a currency, would there be no tax revenue for the government (since all transactions are anonymous)? Assuming there will be no tax revenue, don't you think that the government will try and prevent it's use?

Apologies if this has been asked before.
Title: Re: Cryptocurrencies
Post by: SnarkyPuppy on November 02, 2017, 04:45:06 PM
I have a question for all the crypto longs:

When do you sell?

Do you hold until it becomes used as a currency? If it is used as a currency, would there be no tax revenue for the government (since all transactions are anonymous)? Assuming there will be no tax revenue, don't you think that the government will try and prevent it's use?

Apologies if this has been asked before.

Thesis (mine at least) isn't that it will be used as a currency. 

Bitcoin bull thesis is store of value / flight to safety (eg gold replacement).  This is more of a scarce deflationary commodity than a currency.

Other coins may have value (most won't) through use cases (e.g. You pay solar coin to use your neighbors excess solar capacity).  I suppose this is more of a currency depending on how you look at it. 

It probably will be taxed if either thesis plays out.  And if either thesis plays out, you'll have done well enough post-tax that not investing because of tax reasons would look silly. 
Title: Re: Cryptocurrencies
Post by: rkbabang on November 02, 2017, 05:12:56 PM
I have a question for all the crypto longs:

When do you sell?

Do you hold until it becomes used as a currency? If it is used as a currency, would there be no tax revenue for the government (since all transactions are anonymous)? Assuming there will be no tax revenue, don't you think that the government will try and prevent it's use?

Apologies if this has been asked before.

My answer is that I don’t know when to sell. It is still too early to get a good idea what it will even be used for in the end. I used to think that Bitcoin would be a currency, but now I’m not so sure. Like SnarkyPuppy above I think it might end up being a store of value like gold as well as a way to transfer large amounts of wealth between institutions or like wiring money and a Western Union replacement.  I think other coins will be used more like a currency. They will be faster and cheaper, but won’t be as secure. You will use bitcoin as your savings and the other as your checking (for an analogy).  There will be still other coins used mainly for smart contracts or to purchase specific goods and services. 

The other big unknown is how governments will react.

I do not know when to sell, but not in the next 10 years.  This is internet circa 1994. Everyone has now heard of it, but almost no one is using it. And a ton of people think it is a bunch useless hype.
Title: Re: Cryptocurrencies
Post by: Schwab711 on November 08, 2017, 10:07:19 AM
How do people look at the electricity consumption issue associated with bitcoin (or generally with blockchain technology)? If bitcoin is trying to be a currency, I don't really understand why it's worth knowing who held my specific coin 5 years ago and how it arrived in my hands. It seems unsustainable for bitcoin or any blockchain-based currency to carry all the unnecessary data with each transaction.
Title: Re: Cryptocurrencies
Post by: no_free_lunch on November 08, 2017, 10:12:19 AM
It seems unsustainable for bitcoin or any blockchain-based currency to carry all the unnecessary data with each transaction.

Bingo.

They are looking at scaling solutions...  It's just kind of crazy that it's valued at $120B and they haven't implemented scaling yet.  Usually when you develop a software solution that needs to scale you take care of that at step 1, not after the software is live.
Title: Re: Cryptocurrencies
Post by: Schwab711 on November 08, 2017, 10:15:54 AM
It seems unsustainable for bitcoin or any blockchain-based currency to carry all the unnecessary data with each transaction.

Bingo.

They are looking at scaling solutions...  It's just kind of crazy that it's valued at $120B and they haven't implemented scaling yet.  Usually when you develop a software solution that needs to scale you take care of that at step 1, not after the software is live.

I was just about to add to my comment about the dangers of using a rigid system with an indefinite life but you basically hit on it. I can't think of any system (especially a large system), physical or conceptual, that was planned at a single point in time and survived for more than a short time without change. The more you fork bitcoin, the more unsustainable each branch becomes for all sorts of reasons.
Title: Re: Cryptocurrencies
Post by: formthirteen on November 08, 2017, 10:31:20 AM
It seems unsustainable for bitcoin or any blockchain-based currency to carry all the unnecessary data with each transaction.

Bingo.

They are looking at scaling solutions...  It's just kind of crazy that it's valued at $120B and they haven't implemented scaling yet.  Usually when you develop a software solution that needs to scale you take care of that at step 1, not after the software is live.

There's a conflict between scaling the Bitcoin network and keeping the blockchain safe from tampering. That is why, to solve the scalability issue, most transactions will have to be moved to a layer built on top of the Bitcoin blockchain. The lightning network is one proposed solution:
https://lightning.network/lightning-network-paper.pdf


Quote
The payment network Visa achieved 47,000 peak transactions per second
(tps) on its network during the 2013 holidays[2], and currently averages
hundreds of millions per day. Currently, Bitcoin supports less than 7 transactions
per second with a 1 megabyte block limit. If we use an average of 300
bytes per bitcoin transaction and assumed unlimited block sizes, an equivalent
capacity to peak Visa transaction volume of 47,000/tps would be nearly
8 gigabytes per Bitcoin block, every ten minutes on average. Continuously,
that would be over 400 terabytes of data per year.

Clearly, achieving Visa-like capacity on the Bitcoin network isn’t feasible
today. No home computer in the world can operate with that kind of
bandwidth and storage. If Bitcoin is to replace all electronic payments in
the future, and not just Visa, it would result in outright collapse of the Bitcoin
network, or at best, extreme centralization of Bitcoin nodes and miners
to the only ones who could afford it. This centralization would then defeat
aspects of network decentralization that make Bitcoin secure, as the ability
for entities to validate the chain is what allows Bitcoin to ensure ledger
accuracy and security.
Title: Re: Cryptocurrencies
Post by: Fat Pitch on November 08, 2017, 11:43:40 AM
The single most important demographic opinion on Bitcoin: https://www.forbes.com/sites/spencerbogart/2017/11/08/7-stats-that-highlight-a-millennial-propensity-for-bitcoin/#4297b62232c4

Decent chance 120B will look very very cheap down the road.

It seems unsustainable for bitcoin or any blockchain-based currency to carry all the unnecessary data with each transaction.

Bingo.

They are looking at scaling solutions...  It's just kind of crazy that it's valued at $120B and they haven't implemented scaling yet.  Usually when you develop a software solution that needs to scale you take care of that at step 1, not after the software is live.
Title: Re: Cryptocurrencies
Post by: rkbabang on November 08, 2017, 11:54:09 AM
The single most important demographic opinion on Bitcoin: https://www.forbes.com/sites/spencerbogart/2017/11/08/7-stats-that-highlight-a-millennial-propensity-for-bitcoin/#4297b62232c4

Decent chance 120B will look very very cheap down the road.

It seems unsustainable for bitcoin or any blockchain-based currency to carry all the unnecessary data with each transaction.

Bingo.

They are looking at scaling solutions...  It's just kind of crazy that it's valued at $120B and they haven't implemented scaling yet.  Usually when you develop a software solution that needs to scale you take care of that at step 1, not after the software is live.

The complete dataset with all of the age groups included is interesting as well:
https://drive.google.com/file/d/0B0Lpn9mr-a-8d0gyalVMZjJ5YkE/view
Title: Re: Cryptocurrencies
Post by: jmp8822 on November 08, 2017, 12:00:09 PM
The single most important demographic opinion on Bitcoin: https://www.forbes.com/sites/spencerbogart/2017/11/08/7-stats-that-highlight-a-millennial-propensity-for-bitcoin/#4297b62232c4

Decent chance 120B will look very very cheap down the road.

It seems unsustainable for bitcoin or any blockchain-based currency to carry all the unnecessary data with each transaction.

Bingo.

They are looking at scaling solutions...  It's just kind of crazy that it's valued at $120B and they haven't implemented scaling yet.  Usually when you develop a software solution that needs to scale you take care of that at step 1, not after the software is live.

I am very intrigued to see what happens to bitcoin in a major global recession (perhaps in the next year or two?).  People loved internet stocks in the late 1990s. I have a feeling the 20-30 somethings at the time were the most confident in their internet stock holdings (these people had never seen stocks decline, perhaps like bitcoin holders today). Did their confidence prevent them from losing 90-100% of their money?  People that ask me about bitcoin are certainly intrigued by the price rising - if that is why you are buying it, who will be left to buy when it's 'cheap'? I'm not sure there will be enough bitcoin bargain-hunters to stop the panic.
Title: Re: Cryptocurrencies
Post by: rkbabang on November 08, 2017, 12:08:04 PM
The single most important demographic opinion on Bitcoin: https://www.forbes.com/sites/spencerbogart/2017/11/08/7-stats-that-highlight-a-millennial-propensity-for-bitcoin/#4297b62232c4

Decent chance 120B will look very very cheap down the road.

It seems unsustainable for bitcoin or any blockchain-based currency to carry all the unnecessary data with each transaction.

Bingo.

They are looking at scaling solutions...  It's just kind of crazy that it's valued at $120B and they haven't implemented scaling yet.  Usually when you develop a software solution that needs to scale you take care of that at step 1, not after the software is live.

I am very intrigued to see what happens to bitcoin in a major global recession (perhaps in the next year or two?).  People loved internet stocks in the late 1990s. I have a feeling the 20-30 somethings at the time were the most confident in their internet stock holdings (these people had never seen stocks decline, perhaps like bitcoin holders today). Did their confidence prevent them from losing 90-100% of their money?  People that ask me about bitcoin are certainly intrigued by the price rising - if that is why you are buying it, who will be left to buy when it's 'cheap'? I'm not sure there will be enough bitcoin bargain-hunters to stop the panic.

That will be me left buying when its cheap.  The more panic the better.  Another chance to buy at $100 or $1 would be greatly appreciated.
Title: Re: Cryptocurrencies
Post by: Schwab711 on November 08, 2017, 12:28:21 PM
The single most important demographic opinion on Bitcoin: https://www.forbes.com/sites/spencerbogart/2017/11/08/7-stats-that-highlight-a-millennial-propensity-for-bitcoin/#4297b62232c4

Decent chance 120B will look very very cheap down the road.

It seems unsustainable for bitcoin or any blockchain-based currency to carry all the unnecessary data with each transaction.

Bingo.

They are looking at scaling solutions...  It's just kind of crazy that it's valued at $120B and they haven't implemented scaling yet.  Usually when you develop a software solution that needs to scale you take care of that at step 1, not after the software is live.

This sounds like another way to say "there are so many fools left to sell to!" It takes slightly more than 8 days of energy for the average house to complete each bitcoin transaction. If 10x more people used bitcoin then I'd guess at least 10% of all US electricity consumption would go towards bitcoin mining (currently 0.7% but we'd need to account for consumption inflation inherent to bitcoin design)...

We'll all be spending our bitcoins to pay our electricity bills to keep our bitcoins valuable!
Title: Re: Cryptocurrencies
Post by: Fat Pitch on November 08, 2017, 12:49:06 PM
This is to discount moore's law. Don't you think there will be advances in ASCI chips to make them more energy efficient? 5 billion has been invested in mining hardware just this year alone.

The single most important demographic opinion on Bitcoin: https://www.forbes.com/sites/spencerbogart/2017/11/08/7-stats-that-highlight-a-millennial-propensity-for-bitcoin/#4297b62232c4

Decent chance 120B will look very very cheap down the road.

It seems unsustainable for bitcoin or any blockchain-based currency to carry all the unnecessary data with each transaction.

Bingo.

They are looking at scaling solutions...  It's just kind of crazy that it's valued at $120B and they haven't implemented scaling yet.  Usually when you develop a software solution that needs to scale you take care of that at step 1, not after the software is live.

This sounds like another way to say "there are so many fools left to sell to!" It takes slightly more than 8 days of energy for the average house to complete each bitcoin transaction. If 10x more people used bitcoin then I'd guess at least 10% of all US electricity consumption would go towards bitcoin mining (currently 0.7% but we'd need to account for consumption inflation inherent to bitcoin design)...

We'll all be spending our bitcoins to pay our electricity bills to keep our bitcoins valuable!
Title: Re: Cryptocurrencies
Post by: writser on November 08, 2017, 12:57:31 PM
And what would smart miners do if chips suddenly get twice as efficient?
Title: Re: Cryptocurrencies
Post by: Schwab711 on November 08, 2017, 01:06:28 PM
This is to discount moore's law. Don't you think there will be advances in ASCI chips to make them more energy efficient? 5 billion has been invested in mining hardware just this year alone.

The single most important demographic opinion on Bitcoin: https://www.forbes.com/sites/spencerbogart/2017/11/08/7-stats-that-highlight-a-millennial-propensity-for-bitcoin/#4297b62232c4

Decent chance 120B will look very very cheap down the road.

It seems unsustainable for bitcoin or any blockchain-based currency to carry all the unnecessary data with each transaction.

Bingo.

They are looking at scaling solutions...  It's just kind of crazy that it's valued at $120B and they haven't implemented scaling yet.  Usually when you develop a software solution that needs to scale you take care of that at step 1, not after the software is live.

This sounds like another way to say "there are so many fools left to sell to!" It takes slightly more than 8 days of energy for the average house to complete each bitcoin transaction. If 10x more people used bitcoin then I'd guess at least 10% of all US electricity consumption would go towards bitcoin mining (currently 0.7% but we'd need to account for consumption inflation inherent to bitcoin design)...

We'll all be spending our bitcoins to pay our electricity bills to keep our bitcoins valuable!

Energy usage per transaction has gone up steadily over time despite the 2 major efficiency jumps: 1) generic to specialized equipment; and 2) improvements to specialized mining equipment. The greatest efficiency gains are in the early years. The amount of "deadweight data" increases at a greater exponential rate than Moore's Law ever did for chips. Tack a transaction factor on due to an increased usage and hardware efficiency only delays the inevitable, imo. 99% of the data being processed in every bitcoin transaction is unnecessary and that % increases with each transaction. That is foundation of bitcoin's design.

I think blockchain will find uses but I don't think it will find anywhere near as many applications as is speculated. It's not really revolutionary imo. It seems a bit like taking a census every time a child is born.
Title: Re: Cryptocurrencies
Post by: Hielko on November 08, 2017, 01:10:24 PM
And what would smart miners do if chips suddenly get twice as efficient?
Actually we can just look at what happened historically when bitcoin went from CPU mining to GPU mining, and then from GPU mining to ASICs. Those moves increased the computational efficiency by an order of magnitude more than just 2x. Guess what happened? The mining difficulty just increased rapidly to nullify those computational gains.

It really blows my mind how so many people don't understand this basic property about bitcoin. It's security through spending more resources than is economically viable for an attacker to use. The whole algorithm is designed to be "unnecessary" computationally complex. Computing hashes that start with a bunch of zero's is totally pointless, except that it's a perfect way to use computational resources (energy) in a way that forces an attacker to do the same thing..
Title: Re: Cryptocurrencies
Post by: pau_ on November 08, 2017, 07:27:09 PM
Bram Cohen (BitTorrent creator) announces a new cryptocurrency with aim to reduce power consumption required for a secure blockchain/currency

TechCrunch: BitTorrent inventor announces eco-friendly bitcoin competitor Chia (https://techcrunch.com/2017/11/08/chia-network-cryptocurrency/)

Chia site w/ whitepaper and talk (https://chia.network)
Title: Re: Cryptocurrencies
Post by: Hielko on November 09, 2017, 04:50:59 AM
Bram Cohen (BitTorrent creator) announces a new cryptocurrency with aim to reduce power consumption required for a secure blockchain/currency

TechCrunch: BitTorrent inventor announces eco-friendly bitcoin competitor Chia (https://techcrunch.com/2017/11/08/chia-network-cryptocurrency/)

Chia site w/ whitepaper and talk (https://chia.network)
I like the idea, but I don't think it can work (but will admit that I haven't read the whole technical paper). But the basic argument is as follows. If it's a "green" solution with less power and resource consumption (because it's using unused space) it's vulnerable because these cheap resources would also be available for an attacker.
Title: Re: Cryptocurrencies
Post by: writser on November 09, 2017, 06:09:39 AM
FWIW the economist on cryptocurrencies:

https://www.economist.com/blogs/buttonwood/2017/11/greater-fool-theory-0

Title: Re: Cryptocurrencies
Post by: no_free_lunch on November 09, 2017, 06:46:21 AM
Bram Cohen (BitTorrent creator) announces a new cryptocurrency with aim to reduce power consumption required for a secure blockchain/currency

TechCrunch: BitTorrent inventor announces eco-friendly bitcoin competitor Chia (https://techcrunch.com/2017/11/08/chia-network-cryptocurrency/)

Chia site w/ whitepaper and talk (https://chia.network)
I like the idea, but I don't think it can work (but will admit that I haven't read the whole technical paper). But the basic argument is as follows. If it's a "green" solution with less power and resource consumption (because it's using unused space) it's vulnerable because these cheap resources would also be available for an attacker.

Maybe it could work, it is an intriguing option.  Just not sure how you can "know" the proof of storage, how do you prevent people from claiming the same storage more than once?  You can't fake proof of work.  I also didn't read the white paper so it's probably in there.

This option still doesn't address scaling of transactions.  Even the lightning network is only a mitigation.  With lightning you still need to write to the main blockchain when you open a channel and you need to write to the blockchain to close the channel.  So imagine if you have a large channel open to some company and you suddenly question the company's integrity.  You are stuck waiting for your chance to write to the main blockchain and close the channel out (with the blockchain running at 6 or 7 transactions per second).  If you have millions of users in this funnel, it could get ugly.

It seems the only solution to scaling is a combination of sharding of the actual chain, off-chain solutions light lightning and I don't know maybe even the occasional freeze point.  Perhaps blockchain will just muddle through all of this and people will accept the complexity, I mean existing financial solution are not perfect either.  I just want to point out that there are a lot of unsolved problems given how much people have bought into this.
Title: Re: Cryptocurrencies
Post by: no_free_lunch on November 11, 2017, 07:45:54 AM
Some comments on the bitcoin lightning network here.  The author is not entirely pessimistic on scaling but suggests off-chain shards might be necessary.

Quote
Now, maybe you have heard about something called 'the lightning network'.  It is important to understand that the Lighting Network (networked bi-directional payment channels) does very little to scale the number of users.  Use of payment-channels requires on-chain transactions to both open and close channels.  More importantly, money has to be tied up in those channels and, at a practical level, ordinary users cannot afford to lock up thousands of dollars in open payment channels; subjecting themselves to volatility risk they may not be comfortable with or is simply more money than they have.

Things like the Lightning-Network provide a great solution for very low value payments (think less than a $1) but doesn't really do much for the higher-value use case.  Individual users still need to be able to hold value, directly on chain.  Even if they don't need to perform on-chain transactions on a daily basis, maybe just once a week, or once every two weeks, the same problem applies.  You need a massive blocksize limit to accommodate them.  Also, the average backlog would grow to be measured not in hours, but in days and weeks, maybe even months.  (@see Nyquist sampling theorem )

http://codesuppository.blogspot.ca/2016/11/the-problem-with-on-chain-scaling-is.html
Title: Re: Cryptocurrencies
Post by: SharperDingaan on November 11, 2017, 09:39:29 AM
FWIW the economist on cryptocurrencies:

https://www.economist.com/blogs/buttonwood/2017/11/greater-fool-theory-0

The supply of Bitcoin is essentially vertical, and moves based on todays expectation of tomorrows price. If we think prices are going up we do not offer our Bitcoin up for sale - reducing supply, raising price, and fulfilling our expectation. The same thing occurs in Real Estate, and is common practice.

It is highly likely that the introduction of both Bitcoin options and syndicated loans (Bitcoin as collateral) will generate (material new) institutional demand (cryptocoin hedge funds) for Bitcoin. Most folks would expect that new demand to raise the price of a Bitcoin, and hold back their Bitcoin IN ANTICIPATION of selling later at a HIGHER price still. The result is something very similar to the Tulip Mania of the Netherlands, that occurred way back when.

Manias are by definition - not rational by normal standards; they have their own internal logics - & every one is different. The only common denominator is that they require a bag holder - & everyone is convinced that it is not them.

SD
         
Title: Re: Cryptocurrencies
Post by: Libs on November 16, 2017, 09:03:30 AM
Stumbled onto this piece about bitcoin, the origins of mediums of exchange, and much more.
He sees Bitcoin as here to stay ( as a medium of exchange).

I liked this section:


<I have previously argued why there is no theoretical reason that a medium of
exchange has to start out being material.9 It only has to be a scarce good. The
digital age, and Bitcoin itself, have made it clear that goods do not have to be
tangible. Despite word choices such as commodity in classic writings on this
subject, there is no fundamental economic reason that a physical material has to
be what secures the essential monetary characteristics—foremost scarcity. The
supposed need for tangibility is an association leftover from the range of
examples that was available prior to the internet age.>


https://static1.squarespace.com/static/5720adbdc6fc0891cbcce17c/t/580d685959cc689a7b411ba4/1477275058522/On+the+Origins+of+Bitcoin+Graf+03.11.13.pdf
Title: Re: Cryptocurrencies
Post by: Jurgis on December 14, 2017, 09:08:28 PM
https://www.bloomberg.com/news/articles/2017-12-14/bitcoin-points-way-to-massive-change-for-commodity-businesses

I have couple questions for blockchain/crypto experts:

1. When these companies are talking about using blockchain for trading physical commodities or for land register, what underlying blockchain are they planning to use? I would assume they are not building this on top of Bitcoin blockchain, are they? Are they using blockchain of one of the public cryptos or deploying their own?
2. Assuming they are using their own blockchain, how is security achieved? I doubt that proof-of-work security works for small/private crypto setups. Are then they using something else? Just relying on single trusted authority (but then why use blockchain)?
3. Why not use DBs? For simplicity, let's assume transaction write-once journaling DB which is pretty much the same as blockchain except not distributed. Especially in the case of crop land registry in Ukraine, I don't see how blockchain can prevent fraud any more than such DB. What are scenarios where blockchain prevents fraud and centralized DB doesn't? Corrupt bureaucrat transferring your land to someone else by changing DB without your knowledge? How would they do that if DB required your authorization/code/password? Hacking? Why hacking DB would be easier than hacking blockchain (also see question2 regarding how the heck you achieve blockchain security on own blockchain)?

Edit:
This https://www.economist.com/news/briefing/21677228-technology-behind-bitcoin-lets-people-who-do-not-know-or-trust-each-other-build-dependable and
https://en.wikipedia.org/wiki/Blockchain answer most of the questions above (if you read through and think a bit...coin  ;D)
Title: Re: Cryptocurrencies
Post by: rkbabang on December 15, 2017, 05:15:46 AM
https://www.bloomberg.com/news/articles/2017-12-14/bitcoin-points-way-to-massive-change-for-commodity-businesses

I have couple questions for blockchain/crypto experts:

1. When these companies are talking about using blockchain for trading physical commodities or for land register, what underlying blockchain are they planning to use? I would assume they are not building this on top of Bitcoin blockchain, are they? Are they using blockchain of one of the public cryptos or deploying their own?
2. Assuming they are using their own blockchain, how is security achieved? I doubt that proof-of-work security works for small/private crypto setups. Are then they using something else? Just relying on single trusted authority (but then why use blockchain)?
3. Why not use DBs? For simplicity, let's assume transaction write-once journaling DB which is pretty much the same as blockchain except not distributed. Especially in the case of crop land registry in Ukraine, I don't see how blockchain can prevent fraud any more than such DB. What are scenarios where blockchain prevents fraud and centralized DB doesn't? Corrupt bureaucrat transferring your land to someone else by changing DB without your knowledge? How would they do that if DB required your authorization/code/password? Hacking? Why hacking DB would be easier than hacking blockchain (also see question2 regarding how the heck you achieve blockchain security on own blockchain)?

Edit:
This https://www.economist.com/news/briefing/21677228-technology-behind-bitcoin-lets-people-who-do-not-know-or-trust-each-other-build-dependable and
https://en.wikipedia.org/wiki/Blockchain answer most of the questions above (if you read through and think a bit...coin  ;D)


You are correct.  I think the word "blockchain" is becoming a trendy buzz word and you will see companies trying to get in on the hype with "blockchain based" this and "blockchain based" that in order to boost their stock price, but a private blockchain where you have to trust the people who control it is nothing but an inefficient database.  If it isn't running on a public distributed blockchain then it isn't safe.  To answer your first question right now most companies running on public blockchains (or planning to) are using Etherium.  There is also IOT, ADA, EOS, NEO, and soon to be released Tezos, which support this kind of thing.  Blockchains such as BTC, BCH, LTC, DASH, BTG, XMR, etc ... are just currencies.  There is also Ripple which is only a currency and a private blockchain which I think will be valueless long term for the reasons that you enumerated (you have to trust Ripple the company).  There is going to be a lot of money thrown at a lot of valueless things for a long time based on hype, buzzwords, and outright fraud before people in general understand this stuff.

Title: Re: Cryptocurrencies
Post by: mattee2264 on December 16, 2017, 03:55:15 AM
 
  https://ftalphaville.ft.com/2017/12/07/2196526/what-happens-when-bitcoins-market-cap-overtakes-world-gdp/

  Interesting article on the FT to the effect that the market structure even with the advent of futures trading could see prices go a lot higher.
Title: Re: Cryptocurrencies
Post by: Jurgis on December 16, 2017, 01:51:02 PM

  https://ftalphaville.ft.com/2017/12/07/2196526/what-happens-when-bitcoins-market-cap-overtakes-world-gdp/

  Interesting article on the FT to the effect that the market structure even with the advent of futures trading could see prices go a lot higher.

Why world gdp? I'm sure the interstellar object that just visited us was here to buy bitcoin for Vegans. After all there's only 21mln bitcoins available IN THE WHOLE GALAXY (actually in the whole UNIVERSE!)! Buy them before aliens show up and slurp up all the liquidity!
Title: Re: Cryptocurrencies
Post by: Jurgis on December 17, 2017, 03:48:48 PM
Just buy coal!

https://www.bloomberg.com/news/articles/2017-12-15/turning-coal-into-bitcoin-dirty-secret-of-2017-s-hottest-market
Title: Re: Cryptocurrencies
Post by: Jurgis on December 19, 2017, 04:32:20 PM
Just buy coal!

https://www.bloomberg.com/news/articles/2017-12-15/turning-coal-into-bitcoin-dirty-secret-of-2017-s-hottest-market

Power Denmark or mine bitcoin?  ::) Who cares about Denmark!  ;D

https://www.washingtonpost.com/news/energy-environment/wp/2017/12/19/why-the-bitcoin-craze-is-using-up-so-much-energy/?utm_term=.84fcb47ec3aa

Title: Re: Cryptocurrencies
Post by: rkbabang on December 19, 2017, 05:49:55 PM
https://srsroccoreport.com/gold-mining-industry-fuel-costs-explode-in-a-decade/
Title: Re: Cryptocurrencies
Post by: beerbaron on December 19, 2017, 07:23:25 PM
So quick calculation:
591 000 000 Gallons of oil at $2.50/Ga = 1.5 Billions in energy Cost per year

Lowball estimate for bitcoin mining: 1 000 000 kWh @ $0.10/h * 24 *365 = $876 000 000
Highball estimate for bitcoin mining 4 000 000 kWh @ $0.10/h * 24 *365 =  $3 504 000 000

So here is the billion dollar questions:
If today's power consumption for bitcoin mining is the same as a big chunck of the overall gold produced.
What is going to be bitcoin mining power consumption next year or 10 years from now?

It seems to me that it is just not a scalable solution, energy efficiency gains on the IC side cannot offset an exponential growth, at least not at this stage and not with silicon. If I were in the bitcoin business I would do everything in my power to address this issue... Is there solutions that would not compromise the security aspect or fragment the network? I don't know... but I'd like to hear about it because that is a pressing matter. Can the technological side support the demand?

Saying that comparing BC to 1995 internet is not the same at all. In 1995 there were OC-192 communications lines available, a solid history of the silicon process increasing 50% per year, a solid understandind of where the theorical limits were to speed and size (can't go smaller than an atom). Hence, a lot of room to grow the technical side to support the demand.

All in all, the internet had technological tailwinds while crypto currencies have technological headwinds. Maybe I'm wrong but I son't see how it would make sense to spend 100B in energy cost in 5 years for now to save on a fraction of that in transactions.

IMO SD has a pragmatic view of the whole picture, I would listen to him for anybody thinking to invest.

BeerBaron
Title: Re: Cryptocurrencies
Post by: Jurgis on December 20, 2017, 12:06:04 AM
Proof of work is likely not scalable.

Possible solutions:

1. Keep proof of work, but optimize everything you can try to optimize: efficiency, block size (increase), side channels, etc. This could work. It's likely to be cumbersome and it may lead to other drawbacks (loss of security?, bigger/slower transactions?).
2. Figure out blockchain without proof of work. There are people working on this. This might be a solution. Will this be implemented? Will it be as secure as proof of work solution? Will it be accepted? News in couple years!  8)
Title: Re: Cryptocurrencies
Post by: wachtwoord on December 20, 2017, 02:41:52 AM
POW scales very well because the difficulty adapts to the perceived value in the system. This is exactly the intention.

Funny how people always want to fix things that aren't broken ...
Title: Re: Cryptocurrencies
Post by: rkbabang on December 20, 2017, 06:04:29 AM
POW scales very well because the difficulty adapts to the perceived value in the system. This is exactly the intention.

Funny how people always want to fix things that aren't broken ...

The neverending quest for a free lunch continues.  TANSTAAFL!
Title: Re: Cryptocurrencies
Post by: bskptkl on December 20, 2017, 06:33:14 AM
Have you seen KASH on Venture.
KASH is $3.75 bid pre opening.
I believe they’ve raised $1.2m at 0.15, the rest of the 41 million shares at .05. Now they raised money at $2.10 per unit.
Insane!



Hashchain arranges $26-million bought deal offering
2017-12-19 16:35 ET - News Release
Mr. Patrick Gray reports
HASHCHAIN TECHNOLOGY ANNOUNCES $26 MILLION BOUGHT DEAL PRIVATE PLACEMENT OF UNITS
Hashchain Technology Inc. has entered into a letter of engagement with Eight Capital as co-lead underwriter and sole bookrunner on behalf of a syndicate of underwriters, under which the underwriters have agreed to purchase approximately 12,381,000 units of the company, on a bought deal private placement basis, subject to all required regulatory approvals, at a price per unit of $2.10, for total gross proceeds of approximately $26-million. Each Unit shall consist of one common share of the Company (a "Share") and one common share purchase warrant (a "Warrant"). Each Warrant shall entitle the holder thereof to acquire one Share at a price of $2.45 for a period of 24 months following the Closing Date.
In the event that, after the date that is four months and one day following the closing of the Offering, the closing sale price of the Company's shares on the TSX Venture Exchange is greater than $4.00 per share for a period of 10 consecutive trading days at any time after the closing of the Offering, the Company may accelerate the expiry date of the Warrants by giving notice to the holders thereof and in such case the Warrants will expire on the 30th day after the date on which such notice is given by the Company.
The Company has granted the Underwriters an over-allotment option to purchase up to an additional 15% of the Units of the Offering at the Offering Price, exercisable in whole or in part, at any time on or prior to 48 hours prior to the closing of the Offering. If this option is exercised in full, an additional approximately $3,900,000 will be raised pursuant to the Offering and the aggregate proceeds of the Offering will be approximately $29,900,000.
The Company intends to use the net proceeds of the Offering for further mining rig purchases, working capital and for general corporate purposes.
The closing date of the Offering is scheduled to be on or about January 4, 2018 and is subject to certain conditions including, but not limited to, the receipt of all necessary approvals, including the approval of the TSX Venture Exchange and the applicable securities regulatory authorities.
About Hashchain Technology Inc.
Hashchain is the first publicly-traded (TSX VENTURE) cryptocurrency mining company to file a final prospectus in Canada, supporting highly scalable and flexible operations across all major cryptocurrencies. Hashchain taps low-cost Canadian power, cool climate and high-speed Internet: the trifecta most critical to mining success, to create a competitive position for maximizing the number of mining 'wins.' Hashchain is based in Vancouver, British Columbia.
We seek Safe Harbor.
© 2017 Canjex Publishing Ltd. All rights reserved.
 
Title: Re: Cryptocurrencies
Post by: LightWhale on December 20, 2017, 08:08:25 AM
IF crypto bubble blows up, what would be the best way to make money out of it?
Are there any legit blockchain companies that when blowing up with everything else, will become a good investment? something like Amazon in 2001?
Title: Re: Cryptocurrencies
Post by: JimBowerman on December 20, 2017, 10:45:35 AM
POW scales very well because the difficulty adapts to the perceived value in the system. This is exactly the intention.

Funny how people always want to fix things that aren't broken ...

The neverending quest for a free lunch continues.  TANSTAAFL!

for those reading, here is a counter argument which argues against POW and for Proof of Stake:

https://medium.com/@VitalikButerin/a-proof-of-stake-design-philosophy-506585978d51
Title: Re: Cryptocurrencies
Post by: NewbieD on December 20, 2017, 01:05:29 PM
I'm in the PoW unsustainable camp. PoS gives advantages to bigger players, but don't see that it's worse than for PoW. 

Cardano has less legacy than Ethereum on the route to proof of stake and the tradeoffs in their design vision make a lot of sense to me. Paying $13B for something that small is repulsive but I took a miniscule bet for learning and hopefully increase at a lower price. 

Bitcoin development effort look too dominated by economic incentives having priority over transaction utility to continue holding at this stage. I sold all between 12-18 k. Might regret it when the 400 k predictions come true :)

Still have Ethereum. They seem pragmatic enough to keep the innovation speed going. When projects are started on Cardano or similar instead of Ethereum I plan to use it as a cue to sell.

By the way rkabang, nice call on XVG. I hadn't ventured into altcoins when I read your post a couple of weeks back. Quickest 10X for me so far I think!
Title: Re: Cryptocurrencies
Post by: cherzeca on December 20, 2017, 01:05:37 PM
IF crypto bubble blows up, what would be the best way to make money out of it?
Are there any legit blockchain companies that when blowing up with everything else, will become a good investment? something like Amazon in 2001?

keep your eye on ostk.  its sub medici just raised >$100MM to roll out a blockchain securities lending platform that could disrupt prime brokerage's gravy train.  if this platform is successful (not aware of any blockchain platform that can handle big volumes. but ostk said that they have solved it), then this will be surviving any bitcoin collapse
Title: Re: Cryptocurrencies
Post by: LightWhale on December 20, 2017, 09:43:28 PM
Overstock? Thanks, I'll have a look at their latest reports
Title: Re: Cryptocurrencies
Post by: bskptkl on December 21, 2017, 07:51:20 AM
you cant make this stuff up...from $2 to $7 on this news:

https://www.cnbc.com/2017/12/21/long-island-iced-tea-micro-cap-adds-blockchain-to-name-and-stock-soars.html (https://www.cnbc.com/2017/12/21/long-island-iced-tea-micro-cap-adds-blockchain-to-name-and-stock-soars.html)
Title: Re: Cryptocurrencies
Post by: rkbabang on December 21, 2017, 07:55:28 AM
you cant make this stuff up...from $2 to $7 on this news:

https://www.cnbc.com/2017/12/21/long-island-iced-tea-micro-cap-adds-blockchain-to-name-and-stock-soars.html (https://www.cnbc.com/2017/12/21/long-island-iced-tea-micro-cap-adds-blockchain-to-name-and-stock-soars.html)

I hope Warren Buffet changes the name of his company to "Berkshire Blockchain", in seconds it will be the most valuable company in the world leaving Apple in the dust.  Unless of course Apple changes its name to Apple Blockchain.

Title: Re: Cryptocurrencies
Post by: Gregmal on December 21, 2017, 08:01:32 AM
you cant make this stuff up...from $2 to $7 on this news:

https://www.cnbc.com/2017/12/21/long-island-iced-tea-micro-cap-adds-blockchain-to-name-and-stock-soars.html (https://www.cnbc.com/2017/12/21/long-island-iced-tea-micro-cap-adds-blockchain-to-name-and-stock-soars.html)

I hope Warren Buffet changes the name of his company to "Berkshire Blockchain", in seconds it will be the most valuable company in the world leaving Apple in the dust.  Unless of course Apple changes its name to Apple Blockchain.

Its pretty amazing actually. Even stranger IMO is XIN, highlighted a couple days ago by a fairly well respected author on SA, with real assets, profitability, a dividend, and supposedly blockchain technology partnerships with 58.com and IBM... barely budging 10%. Went long yesterday for a swing trade but it seems like people only want crappy, worthless companies to invest in.
Title: Re: Cryptocurrencies
Post by: rkbabang on December 21, 2017, 08:07:45 AM
you cant make this stuff up...from $2 to $7 on this news:

https://www.cnbc.com/2017/12/21/long-island-iced-tea-micro-cap-adds-blockchain-to-name-and-stock-soars.html (https://www.cnbc.com/2017/12/21/long-island-iced-tea-micro-cap-adds-blockchain-to-name-and-stock-soars.html)

I hope Warren Buffet changes the name of his company to "Berkshire Blockchain", in seconds it will be the most valuable company in the world leaving Apple in the dust.  Unless of course Apple changes its name to Apple Blockchain.

Its pretty amazing actually. Even stranger IMO is XIN, highlighted a couple days ago by a fairly well respected author on SA, with real assets, profitability, a dividend, and supposedly blockchain technology partnerships with 58.com and IBM... barely budging 10%. Went long yesterday for a swing trade but it seems like people only want crappy, worthless companies to invest in.

Assets, profits, earnings, dividends, blah, blah, blah, but the word "Blockchain" isn't in its name.
Title: Re: Cryptocurrencies
Post by: cherzeca on December 21, 2017, 08:10:58 AM
@gregmal

that is a good heuristic for this area.  if it is about coins/tokens for a vaporware platform/product/service, avoid.  if there seems to be an intriguing blockchain based platform addressing a business need, then maybe there is an investment opportunity...or maybe wait until the coin craziness subsidies and drops the tide for all
Title: Re: Cryptocurrencies
Post by: LC on December 21, 2017, 11:56:27 AM
http://www.gldpartners.com/chasing-efficiencies-blockchain-is-coming-to-the-logistics-world/
Title: Re: Cryptocurrencies
Post by: SharperDingaan on December 21, 2017, 02:23:25 PM
This is where the real money is ;) and those efficiency's come from headcount, office space, and working capital reductions. So much so, that most of the big financials could reduce their operational infrastructure costs by an easy 25-33% - almost overnight.

SD
Title: Re: Cryptocurrencies
Post by: Jurgis on December 22, 2017, 08:48:32 AM
This is just LOL: https://status.coinbase.com/

Quote
Monitoring - Due to today's high traffic, buys and sells may be temporarily offline. We're working on restoring full availability as soon as possible.
Dec 22, 08:35 PST
Buys/Sells temporarily disabled
Investigating - All buys and sells have been temporarily disabled. We are working on a fix and apologize for any inconvenience.
Dec 22, 08:11 PST
Wire Processing Delays
Update - Wire deposits and withdrawals may be delayed by up to 5 business days. Rejected & reversed wires will now be processed within 48 business hours. We apologize for any inconvenience this may cause.

Just shut up and don't take my money?  ::)
Title: Re: Cryptocurrencies
Post by: Liberty on December 22, 2017, 09:35:56 AM
I remember seeing a video of this guy a few months ago being mega-bullish on BTC..

https://www.bloomberg.com/news/articles/2017-12-22/michael-novogratz-shelves-plans-to-start-crypto-hedge-fund
Title: Re: Cryptocurrencies
Post by: Spekulatius on December 22, 2017, 05:45:29 PM
This is just LOL: https://status.coinbase.com/

Quote
Monitoring - Due to today's high traffic, buys and sells may be temporarily offline. We're working on restoring full availability as soon as possible.
Dec 22, 08:35 PST
Buys/Sells temporarily disabled
Investigating - All buys and sells have been temporarily disabled. We are working on a fix and apologize for any inconvenience.
Dec 22, 08:11 PST
Wire Processing Delays
Update - Wire deposits and withdrawals may be delayed by up to 5 business days. Rejected & reversed wires will now be processed within 48 business hours. We apologize for any inconvenience this may cause.

Just shut up and don't take my money?  ::)

My check is in the mail  8)
Title: Re: Cryptocurrencies
Post by: Jurgis on December 22, 2017, 10:11:44 PM
My check is in the mail  8)

Theodora accepts your tribute slave!

https://www.marketwatch.com/story/this-professional-dominatrix-made-men-mine-1-million-in-cryptocurrency-for-her-2017-12-20?mod=mw_share_twitter

Title: Re: Cryptocurrencies
Post by: Liberty on December 26, 2017, 10:15:31 AM
https://hackernoon.com/ten-years-in-nobody-has-come-up-with-a-use-case-for-blockchain-ee98c180100
Title: Re: Cryptocurrencies
Post by: Jurgis on December 26, 2017, 12:01:14 PM
https://hackernoon.com/ten-years-in-nobody-has-come-up-with-a-use-case-for-blockchain-ee98c180100

Obviously some envious old school wannabe on big bank and Fed payroll who did not buy bitcoin early enough and could not hack blockchain so that it would show he did.




 ;D  8)
Title: Re: Cryptocurrencies
Post by: rkbabang on December 26, 2017, 07:58:05 PM
https://hackernoon.com/ten-years-in-nobody-has-come-up-with-a-use-case-for-blockchain-ee98c180100

In the early years of any new technology you always have such visionaries who can see where the tech is, but not where it’s going. There is never a shortage of unimaginative people who aren’t afraid to share their lack of vision publicly so that the rest of us can read it years later and chuckle.

http://www.newsweek.com/clifford-stoll-why-web-wont-be-nirvana-185306
Title: Re: Cryptocurrencies
Post by: no_free_lunch on December 27, 2017, 05:44:50 AM
https://hackernoon.com/ten-years-in-nobody-has-come-up-with-a-use-case-for-blockchain-ee98c180100

"after years of tireless effort and billions of dollars invested, nobody has actually come up with a use for the blockchain—besides currency speculation and illegal transactions."

This article is contradictory.   The use case, as they point out is, illegal transactions if nothing else.   Done.  The fact that the transactions are illegal is irrelevant to it's utility, this isn't about ethics.  You can also add to that safeguarding assets for individuals who live in countries where confiscation is a threat.
Title: Re: Cryptocurrencies
Post by: no_free_lunch on December 27, 2017, 05:57:25 AM
Here is a legal use case.

Quote
The United Nations World Food Programme uses the Ethereum Blockchain to transfer vouchers based on cryptocurrencies to refugees in Syria. The platform was able to transfer cryptocurrency vouchers to a total of 10,000 people. It was done through another platform that was created by Parity Technologies.

https://cointelegraph.com/news/ethereum-blockchain-used-by-united-nations-for-sending-aid-to-syria
Title: Re: Cryptocurrencies
Post by: rkbabang on December 27, 2017, 05:02:20 PM
Ha, Krugman gets something right for once. 

"BitCoin looks like it was designed as a weapon intended to damage central banking and money issuing banks, with a Libertarian political agenda in mind—to damage states ability to collect tax and monitor their citizens financial transactions.”

But of course Bitcoin isn’t evil, Krugman is.

Bitcoin Is Evil (http://“https://krugman.blogs.nytimes.com/2013/12/28/bitcoin-is-evil/?mtrref=news.ycombinator.com&assetType=opinion&mtrref=krugman.blogs.nytimes.com&gwh=A883322DADB8F698CD7ECC77B78DFF9F&gwt=pay&assetType=opinion”)
Title: Re: Cryptocurrencies
Post by: Spekulatius on December 29, 2017, 04:31:35 AM
I for one am thankful for the discussions regarding bitcoin and block chain. I am not buying into the bitcoin bull market, but there is certainly an investment opportunity here. It seems to me that block chain based protocols have a place where counter party or third party trust cannot be obtained or is not desired. I think the underground economy is one, but I could also see an institution like the United Nations using it to transfer funds, Why shouldn’t they create their own block chain based currency currency to facilitize funds movements acros nations borders without interference from anyone? Gaming is another advantage where it could be used to exchange goods between gamers. I am sure there are many others.
Title: Re: Cryptocurrencies
Post by: wachtwoord on December 29, 2017, 05:46:45 AM
I for one am thankful for the discussions regarding bitcoin and block chain. I am not buying into the bitcoin bull market, but there is certainly an investment opportunity here. It seems to me that block chain based protocols have a place where counter party or third party trust cannot be obtained or is not desired. I think the underground economy is one, but I could also see an institution like the United Nations using it to transfer funds, Why shouldn’t they create their own block chain based currency currency to facilitize funds movements acros nations borders without interference from anyone? Gaming is another advantage where it could be used to exchange goods between gamers. I am sure there are many others.

Blockchain "technology" is useless without Bitcoin as without the security, decentralization and lack of the need to trust any 3rd party provided by a system in which the tokens have a real world proven value,  it's simply an extremely inefficient database.
Title: Re: Cryptocurrencies
Post by: SharperDingaan on December 29, 2017, 08:39:11 AM
It's useful to recognize that Bitcoin is simply one combination of 4 SEPARATE technologies 1) token crypto-currency, 2) distributed ledger, 3) block chain, and the 4) smart contract.  It's a very smart combination, and performs its function extremely well, but like everything - it has limitations.

Most people see crypto-currency as the investment opportunity. The currency is worth anywhere from 1) what another 'momentum investor' will pay for it, through 2) total $ value of transactions (demand) divided by total supply of token (supply), and even 3) a little more that the paper fiat in your pocket. The smarter developers are trying for 2) and are attempting to both grow their market segment, and their market share within it. Very competitive.

The actual investment opportunity is in the services supply chain, as 3) and 4) run on a fully scaleable database; to materially reduce labor, space, and working capital requirements. Productivity rises in a big way, break-even levels plunge, all kinds of previously closed markets open up, and competition returns to value-add versus price. Almost all blue sky, and very little competition.

The preferred approach is to take an existing business; and do 3) & 4) to it, to drive up its earnings and CF through productivity gains. The earnings fund acquisitions, the CF pays the interest carry, the back office moves the acquisitions processes onto the existing block chain infrastructure - producing even larger CF savings. Long term, the sleepier the industry the more you make. Brains, vision, block chain expertise, and experience with operating leverage required ;)

It is a measure of how young, and inexperienced the industry is; that so many very smart people are all looking in what is essentially the wrong place. May it continue for some time!

SD

 
Title: Re: Cryptocurrencies
Post by: Liberty on December 29, 2017, 09:48:57 AM
It's useful to recognize that Bitcoin is simply one combination of 4 SEPARATE technologies 1) token crypto-currency, 2) distributed ledger, 3) block chain, and the 4) smart contract.  It's a very smart combination, and performs its function extremely well, but like everything - it has limitations.

As far as I know, Bitcoin doesn't have the ability to perform smart contracts natively, not without layering a third party on top. You might be thinking of Ethereum.
Title: Re: Cryptocurrencies
Post by: SharperDingaan on December 29, 2017, 10:49:33 AM
It's useful to recognize that Bitcoin is simply one combination of 4 SEPARATE technologies 1) token crypto-currency, 2) distributed ledger, 3) block chain, and the 4) smart contract.  It's a very smart combination, and performs its function extremely well, but like everything - it has limitations.

As far as I know, Bitcoin doesn't have the ability to perform smart contracts natively, not without layering a third party on top. You might be thinking of Ethereum.

Agreed that if you want to pay with Bitcoin and need the smart contract, you must use a 3rd party 'Oracle'. However nothing prevents you from also setting yourself up as the 3rd party Oracle, that transacts in crypto-currency between 1st & 2nd parties; the standard solution.

As a quick & dirty reference, the below are a useful reference guide; 

For a Bitcoin: 1) Yes, 2) Yes, 3) Yes, 4) No
For an Ethereum Application: 1) Yes, 2) Yes, 3) Yes, 4) Yes
For most block chain applications running on a database (ie: IBM): 1) Yes, 2) No, 3) Yes, 4) Yes

SD



Title: Re: Cryptocurrencies
Post by: EricSchleien1 on December 29, 2017, 12:21:55 PM
Can someone explain to me Munger's comments around how the incentives allow people to create more Bitcoin? How would this work exactly?
Title: Re: Cryptocurrencies
Post by: Hielko on December 29, 2017, 12:32:17 PM
Can someone explain to me Munger's comments around how the incentives allow people to create more Bitcoin? How would this work exactly?
Bitcoin Gold, Bitcoin Cash, Bitcoin whatever etc....
Title: Re: Cryptocurrencies
Post by: rkbabang on December 29, 2017, 01:33:27 PM
Can someone explain to me Munger's comments around how the incentives allow people to create more Bitcoin? How would this work exactly?
Bitcoin Gold, Bitcoin Cash, Bitcoin whatever etc....

I can create an auction site and call it zbay, does that mean Ebay is worthless? As an experiment go create a clone of bitcoin yourself, start mining blocks, and see if anyone else uses it. While your doing that I’m going to start producing a cola and making Coke worthless, because anyone can make brown sugar water.
Title: Re: Cryptocurrencies
Post by: SharperDingaan on December 29, 2017, 01:55:36 PM
Can someone explain to me Munger's comments around how the incentives allow people to create more Bitcoin? How would this work exactly?

Bitcoin has a design cap of 21M token, that is earned by miners at a declining rate. Until the 21M cap is reached, a user’s cost to verify a bitcoin transaction is free. Once the cap is reached the user’s pay the cost out of their digital wallet, in bitcoin, at market rate.

The miners are monopolies with the ability to charge more for faster processing; say $25 for a hash in 2 seconds or less, or $5 for a hash in 30-45 minutes. A business that needs fast hash processing either pays up or goes someplace else – if they are able.  The disruption makes Bitcoin costly to use, lowering its price, and the tide on which all other crypto currencies float – creating widespread losses, ICO opportunity loss, and a significant loss of ‘faith’ in crypto. Lots of pain.

To do it - the mining syndicates simply stop processing, and publicize it. Hash complexity and difficulty automatically drop to restore hash rate, but with no syndicates participating, slow CPU processing, and low payments for hashing - a very large back-up develops. Keep the hash complexity low, pay what the syndicates want, the supercomputers come back on line, and the backup clears in minutes. Rinse and repeat.

For an exorbitant extortion fee, all Bitcoin need to do is raise the 21M cap, and the pain goes away. And if there's internal reluctance to charge, the friends in low places apply the baseball bat. Hard cap and a wheelchair, or soft cap and ability to walk – which do you think wins?

Munger lived through the 1929 depression, and saw first hand the con-men, grifters and ‘hardmen’ of the era doing their thing.
We would suggest that it was great training, and that he's seeing quite a few similarities.

SD
Title: Re: Cryptocurrencies
Post by: cherzeca on December 29, 2017, 03:18:20 PM
@sharper

"For most block chain applications running on a database (ie: IBM): 1) Yes, 2) No, 3) Yes, 4) Yes"

but isnt the most intriguing application of blockchain those niches where there is no individual database...such as securities lending?  cf medici.  putting inventory together from many suppliers onto a distributed ledger makes a lot of sense...to everyone but the prime brokers
Title: Re: Cryptocurrencies
Post by: SharperDingaan on December 29, 2017, 04:18:48 PM
@sharper

"For most block chain applications running on a database (ie: IBM): 1) Yes, 2) No, 3) Yes, 4) Yes"

but isnt the most intriguing application of blockchain those niches where there is no individual database...such as securities lending?  cf medici.  putting inventory together from many suppliers onto a distributed ledger makes a lot of sense...to everyone but the prime brokers

No - it's ability to raise productivity by keeping output constant, and permanently reducing input. Securities lending is already automated in the R3 Corda ledger, runs on a data base, and most prime brokers are already R3 members. Bigger suppliers already maintain their inventory on in-house ERP systems (data bases) - block chain and smart contracts simply run on top. Outputs stay the same, but most of the related 'admin/back-office' processing gets displaced.

SD
   
Title: Re: Cryptocurrencies
Post by: wachtwoord on December 30, 2017, 04:27:20 AM
It's useful to recognize that Bitcoin is simply one combination of 4 SEPARATE technologies 1) token crypto-currency, 2) distributed ledger, 3) block chain, and the 4) smart contract.  It's a very smart combination, and performs its function extremely well, but like everything - it has limitations.

As far as I know, Bitcoin doesn't have the ability to perform smart contracts natively, not without layering a third party on top. You might be thinking of Ethereum.

Not natively as that is a security risk but on top of it is very possible. Rootstock is just released I believe (www.rsk.co) and I believe it (or something like it) will likely put huge downward pressure (and eventually kill) the perceived value of ethereum.
Title: Re: Cryptocurrencies
Post by: SharperDingaan on December 30, 2017, 05:25:40 AM
"Rootstock is just released I believe (www.rsk.co) and I believe it (or something like it) will likely put huge downward pressure (and eventually kill) the perceived value of ethereum."

Elegant solution, and inclined to agree as to the eventual outcome.
Processing ultimately separates along the spectrum of speed versus security, and at a higher level of scaleability than is currently the case.

SD 
Title: Re: Cryptocurrencies
Post by: cherzeca on December 30, 2017, 08:00:55 AM
@sharper

"For most block chain applications running on a database (ie: IBM): 1) Yes, 2) No, 3) Yes, 4) Yes"

but isnt the most intriguing application of blockchain those niches where there is no individual database...such as securities lending?  cf medici.  putting inventory together from many suppliers onto a distributed ledger makes a lot of sense...to everyone but the prime brokers

No - it's ability to raise productivity by keeping output constant, and permanently reducing input. Securities lending is already automated in the R3 Corda ledger, runs on a data base, and most prime brokers are already R3 members. Bigger suppliers already maintain their inventory on in-house ERP systems (data bases) - block chain and smart contracts simply run on top. Outputs stay the same, but most of the related 'admin/back-office' processing gets displaced.

SD
   

Sounds like tzero is going to do something quite different
Title: Re: Cryptocurrencies
Post by: SharperDingaan on December 30, 2017, 09:13:16 AM
No they are doing the same thing - but on their own competing database. Use our database and you don't need many of the staff you currently have, or the space they currently occupy - were they not currently doing an ICO, most folks would never have heard of them. https://www.tzero.com/#home

There is nothing wrong with competition. But the gorilla in the room is the R3 Consortium consisting of the biggest FI's in the world (80%+ of the entire global market), its Corda ledger, and its backing by many of the major CB's in the world. Corda, with its CB blessing, is to become the FI portion of the hyper-ledger (internet-of-things). We wish Tzero luck, but it's hard to see how they survive as anything other than a tiny boutique; maybe 2-3 principals running an Oracle, & a bunch of sales people.

Ya pays yur money, 'n ya takes ya chances,

SD

Title: Re: Cryptocurrencies
Post by: Liberty on December 30, 2017, 10:46:09 AM
https://medium.com/@preethikasireddy/fundamental-challenges-with-public-blockchains-253c800e9428
Title: Re: Cryptocurrencies
Post by: cherzeca on December 30, 2017, 03:30:08 PM
No they are doing the same thing - but on their own competing database. Use our database and you don't need many of the staff you currently have, or the space they currently occupy - were they not currently doing an ICO, most folks would never have heard of them. https://www.tzero.com/#home

There is nothing wrong with competition. But the gorilla in the room is the R3 Consortium consisting of the biggest FI's in the world (80%+ of the entire global market), its Corda ledger, and its backing by many of the major CB's in the world. Corda, with its CB blessing, is to become the FI portion of the hyper-ledger (internet-of-things). We wish Tzero luck, but it's hard to see how they survive as anything other than a tiny boutique; maybe 2-3 principals running an Oracle, & a bunch of sales people.

Ya pays yur money, 'n ya takes ya chances,

SD

what drives the business? prime brokers? or their customers, pension funds and institutional investors. give the customers a better deal and guess what happens.
Title: Re: Cryptocurrencies
Post by: Liberty on January 01, 2018, 05:38:33 AM
http://www.smh.com.au/business/bitcoin-tensions-rise-as-investors-claim-banks-freezing-their-accounts-20171229-p4yy3z.html
Title: Re: Cryptocurrencies
Post by: rkbabang on January 01, 2018, 07:12:15 AM
http://www.smh.com.au/business/bitcoin-tensions-rise-as-investors-claim-banks-freezing-their-accounts-20171229-p4yy3z.html

More evidence that the “then they fight you” phase is beginning.
Title: Re: Cryptocurrencies
Post by: SharperDingaan on January 01, 2018, 08:11:53 AM
For the most part, R3 are the prime brokers - and they primarily serve the institutional side of the market. Value proposition drives the market - Tzero either serves markets that others will not, does it at a lower price, or with more 'flexibility'.

The market is just starting to learn how 'indirect' CB control works.
One side of every Bitcoin F/X exchange is against a fiat currency, coming to/from an account in a FI - controlled by a CB. You're visible, capital controls can be imposed at any time (account freeze), and the private key on your phone/laptop is very hackable. Welcome to the dark side.

SD

 
Title: Re: Cryptocurrencies
Post by: wachtwoord on January 01, 2018, 08:14:43 AM
I understood that he Australian bank requirements for reserves are particularly strict and as such large outflows of money would limit the banks ability to lend and invest and therefore badly hurt the topline.

Of course this is no excuse for their malignant behavior but it does explain it.
Title: Re: Cryptocurrencies
Post by: emily on January 02, 2018, 11:02:14 AM
I want to experiment with buying bitcoins, to learn the system initially. should I give them all credentials such as date of birth, social, bank account # etc ? I am concerned as I read these exchanges are hacked and would lose all the information in the hands of hackers. What do you advise? It looks like I may need to give all of the info as I give to a brokerage account?
Title: Re: Cryptocurrencies
Post by: rkbabang on January 02, 2018, 11:11:31 AM
I want to experiment with buying bitcoins, to learn the system initially. should I give them all credentials such as date of birth, social, bank account # etc ? I am concerned as I read these exchanges are hacked and would lose all the information in the hands of hackers. What do you advise? It looks like I may need to give all of the info as I give to a brokerage account?

If you want to use Coinbase or a similar company than you will need to give all the same info as opening a bank or brokerage account.  If you want to do it without that download a bitcoin wallet to your phone (Bread or Jaxx are good), then find a bitcoin ATM (https://coinatmradar.com/), you simply put cash in the machine and scan your QR receive code from your phone and no one knows you own that bitcoin but you.
Title: Re: Cryptocurrencies
Post by: Aberhound on January 02, 2018, 02:40:59 PM
I want to experiment with buying bitcoins, to learn the system initially. should I give them all credentials such as date of birth, social, bank account # etc ? I am concerned as I read these exchanges are hacked and would lose all the information in the hands of hackers. What do you advise? It looks like I may need to give all of the info as I give to a brokerage account?

If you want to use Coinbase or a similar company than you will need to give all the same info as opening a bank or brokerage account.  If you want to do it without that download a bitcoin wallet to your phone (Bread or Jaxx are good), then find a bitcoin ATM (https://coinatmradar.com/), you simply put cash in the machine and scan your QR receive code from your phone and no one knows you own that bitcoin but you.

Exchanges like Kraken are having major difficulties with massive demand. The exchange system has many delays and a new system is in process and the company reports problems by their Japanese bank in processing the volume of bank wires used for funding. I expect another run like we experienced after Thanksgiving. Even so adoption is tiny. Look how few board members are invested. Why as it is obvious the price has to rise with adoption so it is not a bubble until adoption starts to slow. Many new listings and funds are making crypto investment easily available to the wider investing public. This year I expect investors to start to sell off other assets or to take on debt to buy crypto. Watch for a crypto sell off when taxes are due this spring as this will be a good chance to enter. Most crypto investors can't resist the urge to switch coins and those that don't pay will have their coins seized and sold by the tax authorities. Anybody that thinks the coins are not tracked are fools. I personally saw the CRA seize $80,000 in BTC and sell it for $600 each only a couple years ago. If they let the taxpayer hold their coins today $80000 in tokens would now be worth $2M. Guess who the tax authorities will audit first?
Title: Re: Cryptocurrencies
Post by: emily on January 02, 2018, 05:02:34 PM
What would be the advantage of doing it via ATM? Privacy? Skirting taxes? I really do not care about taxes as we all have to pay them. How does ATM protect privacy? I read on the link that you have to wait like an hour to get your money, 6 verifications to withdraw money  (privacy?) and there are limits to withdrawal. So it leads me to using coinbase.

Anything I should be careful of when opening account and giving them info? Just worried about losing all the info if coinbase gets hacked


I want to experiment with buying bitcoins, to learn the system initially. should I give them all credentials such as date of birth, social, bank account # etc ? I am concerned as I read these exchanges are hacked and would lose all the information in the hands of hackers. What do you advise? It looks like I may need to give all of the info as I give to a brokerage account?

If you want to use Coinbase or a similar company than you will need to give all the same info as opening a bank or brokerage account.  If you want to do it without that download a bitcoin wallet to your phone (Bread or Jaxx are good), then find a bitcoin ATM (https://coinatmradar.com/), you simply put cash in the machine and scan your QR receive code from your phone and no one knows you own that bitcoin but you.
Title: Re: Cryptocurrencies
Post by: emily on January 02, 2018, 05:14:19 PM
http://www.businessinsider.com/ethereum-cryptokitties-collectible-2018-1

and ATM's?
Title: Re: Cryptocurrencies
Post by: wachtwoord on January 02, 2018, 05:20:33 PM
In case anyone is interested a high quality paper on the economic state and future of the whole crypto space. Very well written and researched:

https://s3.eu-west-2.amazonaws.com/john-pfeffer/An+Investor%27s+Take+on+Cryptoassets+v6.pdf
Title: Re: Cryptocurrencies
Post by: cherzeca on January 02, 2018, 06:27:47 PM
In case anyone is interested a high quality paper on the economic state and future of the whole crypto space. Very well written and researched:

https://s3.eu-west-2.amazonaws.com/john-pfeffer/An+Investor%27s+Take+on+Cryptoassets+v6.pdf

i guess if i dont want to own gold i am unlikely to want to own bitcoin (that i understand)
Title: Re: Cryptocurrencies
Post by: Cardboard on January 02, 2018, 06:46:26 PM
How could one possibly compare gold with crypto is beyond me? There is simply no comparison in terms of confidentiality, liquidity, ease to buy and sell, and on and on.

Maybe you made lots of money, maybe it will continue but, it isn't comparable at all.

Cardboard

Title: Re: Cryptocurrencies
Post by: SnarkyPuppy on January 02, 2018, 07:02:59 PM
How could one possibly compare gold with crypto is beyond me? There is simply no comparison in terms of confidentiality, liquidity, ease to buy and sell, and on and on.

Maybe you made lots of money, maybe it will continue but, it isn't comparable at all.

Cardboard

Agree, there is no comparison - bitcoin wins/will win each of these and more if you are skating to where the puck is going
Title: Re: Cryptocurrencies
Post by: cherzeca on January 02, 2018, 07:20:21 PM
How could one possibly compare gold with crypto is beyond me? There is simply no comparison in terms of confidentiality, liquidity, ease to buy and sell, and on and on.

Maybe you made lots of money, maybe it will continue but, it isn't comparable at all.

Cardboard

Agree, there is no comparison - bitcoin wins/will win each of these and more if you are skating to where the puck is going

for me, the skating in this analogy is an ability to understand blockchain tech sufficiently to know what i dont know about this space.  i dont see myself getting on this ice much less skating towards this puck

put another way, while i can understand bitcoin as a store of value, there is an alternative to gold and cash/treasuries that is more understandable for me, namely real estate.  has utility, cant replicate land and hard to replicate buildings, can transfer for value (albeit with transaction costs). 

when i read pfeffer's interesting analysis, i wonder why he analyzes bitcoin as an alternative to gold only (silver in passing) when he should really also include RE...isnt RE much bigger than gold as a store of value?
Title: Re: Cryptocurrencies
Post by: SnarkyPuppy on January 02, 2018, 08:45:23 PM
How could one possibly compare gold with crypto is beyond me? There is simply no comparison in terms of confidentiality, liquidity, ease to buy and sell, and on and on.

Maybe you made lots of money, maybe it will continue but, it isn't comparable at all.

Cardboard

Agree, there is no comparison - bitcoin wins/will win each of these and more if you are skating to where the puck is going

for me, the skating in this analogy is an ability to understand blockchain tech sufficiently to know what i dont know about this space.  i dont see myself getting on this ice much less skating towards this puck

put another way, while i can understand bitcoin as a store of value, there is an alternative to gold and cash/treasuries that is more understandable for me, namely real estate.  has utility, cant replicate land and hard to replicate buildings, can transfer for value (albeit with transaction costs). 

when i read pfeffer's interesting analysis, i wonder why he analyzes bitcoin as an alternative to gold only (silver in passing) when he should really also include RE...isnt RE much bigger than gold as a store of value?

RE is not easily transferable and your ownership is subject to the whims of government authority (ie you can be evicted from your house, nobody can take your private bitcoin unless they torture you).  Keep in mind that these are theoretic extremes - but the concept of gold as a hedging asset taken to its logical extension is also a theoretic extreme. 

The most valuable aspect of bitcoin is that it is private property which cannot be taken from it's owner. 
Title: Re: Cryptocurrencies
Post by: cherzeca on January 02, 2018, 09:08:00 PM
@snark

there are far fewer transaction costs to me to buy and sell RE than BTC.  i would have to understand BTC first of all, which i really dont, whereas i sort of understand RE.

also BTC can be (and i expect it to be) regulated just as much as RE.  no one is taking my RE away from me without compensation.  it's there in the US constitution.

look at RE values in NYC, london, miami beach.  store of value with utility
Title: Re: Cryptocurrencies
Post by: emily on January 02, 2018, 09:36:53 PM
The value of bitcoins was in the fact that you could not have more than 21 million bitcoins. Now there are many more alternate coins. Does that still make bitcoins valuable?

https://coinmarketcap.com/
Title: Re: Cryptocurrencies
Post by: SnarkyPuppy on January 02, 2018, 09:45:24 PM
@snark

there are far fewer transaction costs to me to buy and sell RE than BTC.  i would have to understand BTC first of all, which i really dont, whereas i sort of understand RE.

also BTC can be (and i expect it to be) regulated just as much as RE.  no one is taking my RE away from me without compensation.  it's there in the US constitution.

look at RE values in NYC, london, miami beach.  store of value with utility

Just like nobody is taking away our jr pref equity rights?   ;D   That's just in jest... I hope!   

I'm not saying it's likely in our lifetimes - but on a long enough timescale the immutable property rights offered by bitcoin/decentralized assets are what makes them so inherently valuable.  Real estate and bitcoin can coexist just as real estate and gold currently coexist.   

One consideration that made me think about the crypto space from a different perspective was trying to step into the shoes of someone who lives in China, Venezuela, Russia, Morocco, Mongolia, etc as opposed to viewing things from a comfortable American's perspective.   

It's definitely possible I'm holding a bag of worthless tulips- but the more I focus less on the popularity/recent price surges and more on the idea itself, I come away believing that there may be something to this thing.   It's imperfect now in the way that DOS was imperfect in the 80's/early 90's - and the beauty of "forking" seems to allow for seamless upgrades to the existing architecture
Title: Re: Cryptocurrencies
Post by: cherzeca on January 02, 2018, 09:53:50 PM
@snark

right, except many of the people seeking a store of value in those countries you mentioned own condos in NYC/miami beach
Title: Re: Cryptocurrencies
Post by: SnarkyPuppy on January 02, 2018, 09:59:28 PM
@snark

right, except many of the people seeking a store of value in those countries you mentioned own condos in NYC/miami beach

And many also own gold.

I prefer owning RE to Gold.    But we are talking speculation on the rise of a new store of value - not an investment in a current one.   If we accept that Gold is a speculative flight to safety store of value (90-95% of its value is not based on utility) + make the assumption (just for a second...) that bitcoin beats gold at its own game (durable, scarce, immutable, easily transferable,  etc), then its a simple probabilistic bet on growing network effects currently priced at ~4% odds of working out (assuming bitcoin bull thesis = gold = $7tn).   
Title: Re: Cryptocurrencies
Post by: wachtwoord on January 03, 2018, 05:58:48 AM
The value of bitcoins was in the fact that you could not have more than 21 million bitcoins. Now there are many more alternate coins. Does that still make bitcoins valuable?

https://coinmarketcap.com/

The value in gold was the limited supply. Now with the many other atom types such as the ubiquitous carbon, other metals such as iron and other precious metals such as silver, all present in much larger quantities than gold, does gold still have value? ;)

There are and always will be a hard maximum of 21M Bitcoin. No matter how many other cryptos are created and no matter what kind of fancy names they are given.
Title: Re: Cryptocurrencies
Post by: Cardboard on January 03, 2018, 06:02:20 AM
You should check your math:

https://www.cnbc.com/2018/01/02/bitcoin-dominance-of-cryptocurrency-market-lowest-level-ever.html

Emily brought a very good point and crypto's as a whole are now valued at around $640 billion with Bitcoins accounting for 36% per this article.

So your odds have dropped to 9%. If not, why would you assume that all other crypto's will disappear?

This competition among crypto's is not conducive to confidence as dilution becomes real or getting right to the point that Charlie Munger has made.

Moreover, if there is only $7 trillion "hidden" in gold today, then why should it jump to $14 as an alternative has emerged? If this is a so good alternative to gold, then many will switch. There are only so many people and money who don't trust the system. And $7 trilion is an overstated amount as around 18% of gold is held by central banks.

Then add to this all the gold held by Indians who see gold as a cultural asset, a family treasure. Do you think this is all switching to crypto?

Finally, have a look at hedge funds. Once authorities realized that mom and pop could get hurt, they got regulated and truly only the rich can now get their hands on them. That is another risk.

Even gold was confiscated by Roosevelt in the 30's. No asset is totally "safe" from governments.

Remember 2003? What happens to confidence when electricity goes out? Even gold dropped in 2008 with the crash...

Cardboard
Title: Re: Cryptocurrencies
Post by: Spekulatius on January 03, 2018, 06:15:51 AM
Real estate is a Cash Flow generating asset, while bitcoin and gold are not generating anything. Big difference, imo.
Title: Re: Cryptocurrencies
Post by: rkbabang on January 03, 2018, 06:21:36 AM
Even gold was confiscated by Roosevelt in the 30's. No asset is totally "safe" from governments.

Remember 2003? What happens to confidence when electricity goes out? Even gold dropped in 2008 with the crash...

Cardboard

So you are saying that no store of value has ever been perfect?  Yeah no kidding, you are correct, but that doesn't mean we should all go back to using sea shells as money.  Gold wasn't perfect, it was just better than sea shells or pretty rocks.

Bitcoin isn't perfect, just better.
Title: Re: Cryptocurrencies
Post by: wachtwoord on January 03, 2018, 06:22:22 AM
@Cardboard I advise you to read the research paper on the previous page (p. 28). Basically store of value is worth at least 2 orders of magnitude more than a payments system. Therefore Bitcoin is likely undervalued where the altcoin space is massively overvalued  (Ethereum for instance is valued today 50% above the estimated end state value which could be decades away).

Talking about the valuation of the whole crypto space as such is therefore non-productive.
Title: Re: Cryptocurrencies
Post by: CorpRaider on January 03, 2018, 06:57:16 AM
Would you say Etheruem is more like a raw input for other crypto assets/smart contract/transaction protocols or a productive asset (akin to raw land that the developers of other protocols buy and build their structures upon); or neither?  I would never be interested in "digital gold" as I have never been interested in real gold. 

If I was interested in either, I would need to be able to trade it to the hillbillies down the road for alpo and shotgun shells if small hands and rocket man decide to touch their buttons.  So I thinking I would prefer real gold.  But in reality I'm hoping I could forgive some treasury debt in exchange for M-16s or Kevlar pants or something.
Title: Re: Cryptocurrencies
Post by: SharperDingaan on January 03, 2018, 07:00:08 AM
What would be the advantage of doing it via ATM? Privacy? Skirting taxes? I really do not care about taxes as we all have to pay them. How does ATM protect privacy? I read on the link that you have to wait like an hour to get your money, 6 verifications to withdraw money  (privacy?) and there are limits to withdrawal. So it leads me to using coinbase.

Anything I should be careful of when opening account and giving them info? Just worried about losing all the info if coinbase gets hacked


I want to experiment with buying bitcoins, to learn the system initially. should I give them all credentials such as date of birth, social, bank account # etc ? I am concerned as I read these exchanges are hacked and would lose all the information in the hands of hackers. What do you advise? It looks like I may need to give all of the info as I give to a brokerage account?

If you want to use Coinbase or a similar company than you will need to give all the same info as opening a bank or brokerage account.  If you want to do it without that download a bitcoin wallet to your phone (Bread or Jaxx are good), then find a bitcoin ATM (https://coinatmradar.com/), you simply put cash in the machine and scan your QR receive code from your phone and no one knows you own that bitcoin but you.

For most of us there are currently three ways to buy a Bitcoin. Directly from source (bitcoin.org) via an ATM machine, indirectly through an exchange (coinbase), or via a derivative. For the most part, all unregulated (Chicago exchanges excepted). For educational purposes, most would invest no more than a token amount in each, and do a buy/sell on all 3.

Per the global AML/ATF requirements, everyone will ask for your basic information. Not all will be as diligent about it. Hence a wallet holder has to recognize that the less information they are willing to disclose, the more likely that other users are going to be from the underworld. Lot of pro's/con's to this, but it is to the wallet holder to act responsibly.

Retail Bitcoin is estimated to be 30-50% Japanese, a society in which primarily women (Mrs Watanabe) make the investment decision. Outside of Japan, retail Bitcoin is estimated to be 90% male, between the ages of 24-48. The range runs from a few that are very smart, to a very large number that just think they are smart.

As at December 31, 2017 there were 1,381 crypto-currencies in the world. All but 28 trade for less than USD 0.01. The top 5 by market cap are Bitcoin, Ripple, Ethereum, Bitcoin Cash, and Cardano. For most people, buying token through an ICO, is not the road to riches.

All our family, are well practiced in the use of crypto currency. The very best are the little old ladies, many of whom have led 'colourful' lives in times past. Mrs Watanabe keeps great company.

Good luck

SD
   
Title: Re: Cryptocurrencies
Post by: cherzeca on January 03, 2018, 07:11:13 AM
@watch

I thought pfeffer neatly explained coin overvaluation as payment.  But his explanation for coin undervaluation as store of money was entirely straw man. That coin will replace gold. both limited supply.  Pure leap of faith. IMO

edit:  also as to fixed supply point, which is such a preferred alternative to printable fiat.  i didnt see that pfeffer countered the notion that all of these coins can have their tech/platform forked and then you have mini-me coins running all around.  remember the old saw bad money destroys good.

Title: Re: Cryptocurrencies
Post by: rkbabang on January 03, 2018, 07:28:31 AM
What would be the advantage of doing it via ATM? Privacy? Skirting taxes? I really do not care about taxes as we all have to pay them. How does ATM protect privacy? I read on the link that you have to wait like an hour to get your money, 6 verifications to withdraw money  (privacy?) and there are limits to withdrawal. So it leads me to using coinbase.

Anything I should be careful of when opening account and giving them info? Just worried about losing all the info if coinbase gets hacked

Buying from an ATM is easier and much quicker (if you have one nearby that is).  You can download your wallet, put money in to the machine, and you have bitcoin.  You can still keep track of your cost basis and pay your taxes after you sell.  You can still open up a Coinbase account later and transfer your bitcoins in to convert back to $USD.

If you go through a company such as Coinbase you will need to setup an account (like you have already discovered) verify your ID, SSN, email address, etc.  Then you will need to link your bank account which will take a few days.  Then when you buy bitcoin from Coinbase it takes something like a week to show up in your account.  They also have limits to the amount you can buy/sell in a day/week/month.

So with an ATM you have bitcoin in minutes(even if it takes an hour to be fully confirmed at peak times, it is usually less), with Coinbase it will take you over a week from the time you first setup your account until you have bitcoin in your account.

The downside of the ATM is that the fees are usually much higher.  So you will save money in the end if you go the Coinbase route (if bitcoin doesn't shoot up in price by the time you get your account setup and your bank account linked and the money transferred in).

Another way to buy bitcoin is to find someone who is willing to sell you some.  This can be as quick and easy as the ATM and potentially cost you less (depending on the deal you make), but it can be dangerous meeting a stranger with cash in hand.  If you go this route try craigslist or http://localbitcoins.com/ for people in your area selling bitcoins.  I have never done this, but I know people who have.


If you do use Coinbase and are worried about them being hacked, after you have your bitcoin in your coinbase account transfer it out to your own private wallet.  This is what I do.  I use coinbase to buy, but I don't store it there.  Coinbase has never been hacked, but it is always a possibility.
Title: Re: Cryptocurrencies
Post by: rkbabang on January 03, 2018, 07:39:30 AM
@watch

I thought pfeffer neatly explained coin overvaluation as payment.  But his explanation for coin undervaluation as store of money was entirely straw man. That coin will replace gold. both limited supply.  Pure leap of faith. IMO

edit:  also as to fixed supply point, which is such a preferred alternative to printable fiat.  i didnt see that pfeffer countered the notion that all of these coins can have their tech/platform forked and then you have mini-me coins running all around.  remember the old saw bad money destroys good.

You are misunderstanding Gresham's law. Bad money doesn't destroy good, bad money drives out good (from circulation).  It doesn't destroy the value of the good money, in fact it makes it harder to get and thus increases its value. It is always easy to use the good money if you wish to because the demand is so high.  It is just that people will tend to save the good money and spend the bad.




Title: Re: Cryptocurrencies
Post by: cherzeca on January 03, 2018, 07:41:12 AM
@watch

I thought pfeffer neatly explained coin overvaluation as payment.  But his explanation for coin undervaluation as store of money was entirely straw man. That coin will replace gold. both limited supply.  Pure leap of faith. IMO

edit:  also as to fixed supply point, which is such a preferred alternative to printable fiat.  i didnt see that pfeffer countered the notion that all of these coins can have their tech/platform forked and then you have mini-me coins running all around.  remember the old saw bad money destroys good.

You are misunderstanding Gresham's law. Bad money doesn't destroy good, bad money drives out good (from circulation).  It doesn't destroy the value of the good money, in fact it makes it harder to get and thus increases its value. It is always easy to use the good money if you wish to because the demand is so high.  It is just that people will tend to save the good money and spend the bad.

so you are saying the proliferation of mini-me bitcoin is good for bitcoin?
Title: Re: Cryptocurrencies
Post by: SharperDingaan on January 03, 2018, 07:45:45 AM
Re 'valuation'.

Pre Bitcoin; hard currency, gold, and sex, were the world's primary stores of value. If you had to run, you could use them to bribe your way out, and set up anew elsewhere. The distributed ledger has simply given us additional options (more supply), ranging from currency (Bitcoin), through to digital gold (Bit Gold).

The demand for hard currency is now spread over additional supply (Bitcoin). Drug dealer, arms merchant  despot, tax avoidance, and bribe demand shifts to Bitcoin as the payment medium, versus hard currency; driving up the price of Bitcoin and lowering the price of hard currency. Computer ransom is charged in Bitcoin for a reason. 

Demand for physical gold splits over both physical and digital gold, as digital gold is much more portable - and very good at escaping capital controls. A significant supply problem for physical gold, that resembles the supply of Bitcoin; recycling and new mining makes it progressively less scarce - a sudden switch to digital gold floods the physical market with large quantities of supply, abruptly dropping price.

It's also a competitive world.
Nothing prevents groups of CBs from banding together to create a competing 'wealth' coin - to suck some of the demand away from Bitcoin. Most people would prefer not to be co-investing with the 'undesirables' of the world.

The technology is disruptive, and fundamentally changes how we do business.
Welcome to some of the changes.

SD
Title: Re: Cryptocurrencies
Post by: Joe689 on January 03, 2018, 07:51:33 AM
You seem to have the best handle on this change.  What companies are you eyeing, or investing in, to benefit from these changes?
Title: Re: Cryptocurrencies
Post by: rkbabang on January 03, 2018, 07:53:24 AM
@watch

I thought pfeffer neatly explained coin overvaluation as payment.  But his explanation for coin undervaluation as store of money was entirely straw man. That coin will replace gold. both limited supply.  Pure leap of faith. IMO

edit:  also as to fixed supply point, which is such a preferred alternative to printable fiat.  i didnt see that pfeffer countered the notion that all of these coins can have their tech/platform forked and then you have mini-me coins running all around.  remember the old saw bad money destroys good.

You are misunderstanding Gresham's law. Bad money doesn't destroy good, bad money drives out good (from circulation).  It doesn't destroy the value of the good money, in fact it makes it harder to get and thus increases its value. It is always easy to use the good money if you wish to because the demand is so high.  It is just that people will tend to save the good money and spend the bad.

so you are saying the proliferation of mini-me bitcoin is good for bitcoin?

It is at best slightly good and at worst has no effect.  Does the existence of silver, copper, tin, and shiny seashells devalue gold?
Title: Re: Cryptocurrencies
Post by: SnarkyPuppy on January 03, 2018, 07:56:14 AM
In case anyone is interested a high quality paper on the economic state and future of the whole crypto space. Very well written and researched:

https://s3.eu-west-2.amazonaws.com/john-pfeffer/An+Investor%27s+Take+on+Cryptoassets+v6.pdf

Thanks for posting this
Title: Re: Cryptocurrencies
Post by: SharperDingaan on January 03, 2018, 07:56:42 AM
You seem to have the best handle on this change.  What companies are you eyeing, or investing in, to benefit from these changes?

We aren't.

SD
Title: Re: Cryptocurrencies
Post by: cherzeca on January 03, 2018, 08:59:05 AM
@joe

i do not have a handle on blockchain tech.  i think i have an emerging handle on the potential uses of blockchain as something that can disintermediate or reduce transaction cost and increase efficiency.

the only company that i have found that seems to be aggressively moving to commercialize blockchain in interesting use cases is OSTK...first, in seeking to cut out prime brokerage from finding locates for short selling, which is a very opaque and therefore lucrative business for prime brokers (especially for hard to find names, which are the 80% in this 80/20 market).  of course prime brokers could implement their own blockchain platform, but they wont do it in a way that cannibalizes their own profit center...it has to come from outside

would welcome other use case examples/companies

Title: Re: Cryptocurrencies
Post by: zarley on January 03, 2018, 09:15:25 AM
@joe

i do not have a handle on blockchain tech.  i think i have an emerging handle on the potential uses of blockchain as something that can disintermediate or reduce transaction cost and increase efficiency.


Honest question about efficiency and transaction costs:
Given what I've read about the transaction costs for bitcoin and the amount of computing power needed to validate transactions, it seems like these two points are potential problems, not solutions.  Seems like infrequent, high-priority transactions might be well served, but small and frequent transactions would get killed by the transaction costs.  Is that a bitcoin-specific issue or a more general block-chain challenge?
Title: Re: Cryptocurrencies
Post by: no_free_lunch on January 03, 2018, 09:45:39 AM
@joe

i do not have a handle on blockchain tech.  i think i have an emerging handle on the potential uses of blockchain as something that can disintermediate or reduce transaction cost and increase efficiency.


Honest question about efficiency and transaction costs:
Given what I've read about the transaction costs for bitcoin and the amount of computing power needed to validate transactions, it seems like these two points are potential problems, not solutions.  Seems like infrequent, high-priority transactions might be well served, but small and frequent transactions would get killed by the transaction costs.  Is that a bitcoin-specific issue or a more general block-chain challenge?

I have been thinking about this too.  They just can't write it all to the chain, it takes too long and incurs significant costs.  Unless they are using something other than bitcoin.  I wonder if they are  running their own private chain / database that they periodically tokenize (basically just encode everything to say a single 256 byte string) and then they write that token to the block-chain.  So you can then look at their chain and verify that at each step it was linked to the true block-chain which provides your proof of legitimacy and timing.  Just a theory.
Title: Re: Cryptocurrencies
Post by: rkbabang on January 03, 2018, 10:10:21 AM
In case anyone is interested a high quality paper on the economic state and future of the whole crypto space. Very well written and researched:

https://s3.eu-west-2.amazonaws.com/john-pfeffer/An+Investor%27s+Take+on+Cryptoassets+v6.pdf

Thanks for posting this

Add another +1. Thank you.  I'm heavily invested in Ethereum and yet I am having a hard time seeing where he is wrong.
Title: Re: Cryptocurrencies
Post by: cherzeca on January 03, 2018, 10:21:31 AM
@joe

i do not have a handle on blockchain tech.  i think i have an emerging handle on the potential uses of blockchain as something that can disintermediate or reduce transaction cost and increase efficiency.


Honest question about efficiency and transaction costs:
Given what I've read about the transaction costs for bitcoin and the amount of computing power needed to validate transactions, it seems like these two points are potential problems, not solutions.  Seems like infrequent, high-priority transactions might be well served, but small and frequent transactions would get killed by the transaction costs.  Is that a bitcoin-specific issue or a more general block-chain challenge?

I have been thinking about this too.  They just can't write it all to the chain, it takes too long and incurs significant costs.  Unless they are using something other than bitcoin.  I wonder if they are  running their own private chain / database that they periodically tokenize (basically just encode everything to say a single 256 byte string) and then they write that token to the block-chain.  So you can then look at their chain and verify that at each step it was linked to the true block-chain which provides your proof of legitimacy and timing.  Just a theory.

i have read some about improving current blockchain tech to handle huge volume more efficiently, such as you would need to try to blockchainify wall st.  as a tech noncognescenti, i cant tell if this might work or how hard it would be.
Title: Re: Cryptocurrencies
Post by: sjh on January 03, 2018, 10:44:32 AM
In case anyone is interested a high quality paper on the economic state and future of the whole crypto space. Very well written and researched:

https://s3.eu-west-2.amazonaws.com/john-pfeffer/An+Investor%27s+Take+on+Cryptoassets+v6.pdf

Thanks for posting this

Add another +1. Thank you.  I'm heavily invested in Ethereum and yet I am having a hard time seeing where he is wrong.


Sold my ETH and NEO for BTC today after reading it.
Title: Re: Cryptocurrencies
Post by: no_free_lunch on January 03, 2018, 07:03:33 PM
the only company that i have found that seems to be aggressively moving to commercialize blockchain in interesting use cases is OSTK...first, in seeking to cut out prime brokerage from finding locates for short selling, which is a very opaque and therefore lucrative business for prime brokers (especially for hard to find names, which are the 80% in this 80/20 market).  of course prime brokers could implement their own blockchain platform, but they wont do it in a way that cannibalizes their own profit center...it has to come from outside

would welcome other use case examples/companies

Ripple has another use case. It is a private block-chain that is used for quick money transfers.  Apparently transfers are just a few seconds to complete vs 10 minutes for bitcoin.  Since it is private it has a mammoth advantage with energy efficiency / transaction capacity but you lose out on the robustness of a decentralized currency.
Title: Re: Cryptocurrencies
Post by: Liberty on January 03, 2018, 07:07:12 PM
the only company that i have found that seems to be aggressively moving to commercialize blockchain in interesting use cases is OSTK...first, in seeking to cut out prime brokerage from finding locates for short selling, which is a very opaque and therefore lucrative business for prime brokers (especially for hard to find names, which are the 80% in this 80/20 market).  of course prime brokers could implement their own blockchain platform, but they wont do it in a way that cannibalizes their own profit center...it has to come from outside

would welcome other use case examples/companies

Ripple sells a private block-chain that is used for very quick money transfers.  Apparently transfers are just a few seconds to complete vs 10 minutes for bitcoin.  Since it is private it has a mammoth advantage with energy efficiency / transaction capacity but you lose out on the robustness of a decentralized currency.

If the ledger is centrally controlled, what's the benefit over a conventional database ledger? These are already fast and secure.
Title: Re: Cryptocurrencies
Post by: no_free_lunch on January 03, 2018, 08:02:13 PM
It is not really centrally controlled.  My understanding, and I am no expert, it is more an exclusive club of consensus generating nodes that work to stitch together the transactions and create each new block.  However, there isn't the wasteful mining happening, there is instead more trust involved here.  It is a different approach and it has some advantages.
Title: Re: Cryptocurrencies
Post by: Liberty on January 04, 2018, 03:28:38 AM
If it's privately owned, how is it not centrally controlled by the owner? What are those advantages was my question.
Title: Re: Cryptocurrencies
Post by: wachtwoord on January 04, 2018, 03:48:49 AM
the only company that i have found that seems to be aggressively moving to commercialize blockchain in interesting use cases is OSTK...first, in seeking to cut out prime brokerage from finding locates for short selling, which is a very opaque and therefore lucrative business for prime brokers (especially for hard to find names, which are the 80% in this 80/20 market).  of course prime brokers could implement their own blockchain platform, but they wont do it in a way that cannibalizes their own profit center...it has to come from outside

would welcome other use case examples/companies

Ripple sells a private block-chain that is used for very quick money transfers.  Apparently transfers are just a few seconds to complete vs 10 minutes for bitcoin.  Since it is private it has a mammoth advantage with energy efficiency / transaction capacity but you lose out on the robustness of a decentralized currency.

If the ledger is centrally controlled, what's the benefit over a conventional database ledger? These are already fast and secure.

There is no benefit except to Ripple labs who have managed to make a significant amount of people believe Ripple (XRP) hold any value whatsoever while being in control of over 95% of the float (and the ability to make more). Ripple is not even a crypto but like a government issued currency, only by a company.
Title: Re: Cryptocurrencies
Post by: Liberty on January 04, 2018, 04:18:33 AM
https://www.coindesk.com/ripples-xrp-giving-third-largest-cryptocurrency-second-look/

https://twitter.com/prestonjbyrne/status/948636938088611841
Title: Re: Cryptocurrencies
Post by: wachtwoord on January 04, 2018, 04:27:09 AM
https://www.coindesk.com/ripples-xrp-giving-third-largest-cryptocurrency-second-look/

https://twitter.com/prestonjbyrne/status/948636938088611841

The whole trust network thing? They killed that before even launching Ripple. And it's all possible with lightning on the Bitcoin network.
Title: Re: Cryptocurrencies
Post by: Spekulatius on January 04, 2018, 05:05:45 AM
Some questions:

1) Aren’t all those crypto currencies inflationary? Creating these tokens creates no real value in the physical world, but they have a real value for now. right noe, the total value of crytocurrencies is just a few hundred billion $, but if this becomes larger in the trillion $ range, we are talking about a huge and non-government controlled extra money supply.

2) I understand that the network are safe because information is distributed, but what would happen, if most of the processing Power were concentrated in one spot, even if temporarily so?  Could China hijack the Bitcoin simply by flooding the network with mining servers, then temporarily or even permanetly damage it with fake transactions amongst each other, which makes it hard or even impossible to restore. A distributed network sort of lives in the moment, If I can gain control or quasi control over it for just a while, one could change its history ?

Title: Re: Cryptocurrencies
Post by: Liberty on January 04, 2018, 05:40:15 AM

2) I understand that the network are safe because information is distributed, but what would happen, if most of the processing Power were concentrated in one spot, even if temporarily so?  Could China hijack the Bitcoin simply by flooding the network with mining servers, then temporarily or even permanetly damage it with fake transactions amongst each other, which makes it hard or even impossible to restore. A distributed network sort of lives in the moment, If I can gain control or quasi control over it for just a while, one could change its history ?

https://en.bitcoin.it/wiki/Majority_attack
Title: Re: Cryptocurrencies
Post by: wachtwoord on January 04, 2018, 06:12:09 AM
Regarding inflation: there is a pre determined max for Bitcoin (not all of them) so there is no inflation in total supply. There is some inflation in what portion is free floating already (the release of new tokens exponentially decreases to zero).
Title: Re: Cryptocurrencies
Post by: SharperDingaan on January 04, 2018, 06:34:08 AM
In case anyone is interested a high quality paper on the economic state and future of the whole crypto space. Very well written and researched:

https://s3.eu-west-2.amazonaws.com/john-pfeffer/An+Investor%27s+Take+on+Cryptoassets+v6.pdf

This is a very good paper.

One of the key takeaways is that it is token users who benefit, and not token owners (Bitcoin excepted). This is the same result that occurs when tokens ran on a database versus a distributed ledger. In both cases the 'user' is the organization employing the technology, you or I buying that organizations products or services - are only secondary beneficiaries.

Bitcoin itself is exceptionally clever, but its core natural market is also its greatest liability; for many the restraint on widespread adoption is not the technology - it is the possibility of RICO charges by association. Bitcoin 1.1 is very likely to be a central bank version, running on a database, that essentially does all the same things - but runs in the light. Bitcoin 1.1 being used for global trade settlements, versus Bitcoin itself.

The 'investable' opportunities are the shares of the application providers, and their clients, versus the token themselves. Consistent with our view that it's primary an investment in 3) and 4) that improves productivity, profitability, and cash flow. Nice to see a confirmation from an independent 3rd party source. 

Thanks for posting.

SD


 
Title: Re: Cryptocurrencies
Post by: no_free_lunch on January 04, 2018, 07:30:56 AM
If it's privately owned, how is it not centrally controlled by the owner? What are those advantages was my question.

The advantage is it is much, much faster as you don't need to do mining.

They do appear to have a custom set of validators, so you are trusting ripple to be honest about which validators they use.

Quote
Which UNL should I select?

Since anybody can run a validator, the burden is on the network participants to choose a reliable set. Currently, Ripple (further mentions of Ripple in this document that are italicized represent the company) provides a default and recommended list which we expand based on watching the history of validators operated by Ripple and third parties. Eventually, Ripple intends to remove itself from this process entirely by having network participants select their own lists based on publicly available data about validator quality

I get that there are some issues here.  This thing should not be worth $360B.  Yes it does not have the robustness of bitcoin.  However, for actually getting things done it does have some advantages.  I was just replying to the "other use cases" question, which I think this pertains to.
Title: Re: Cryptocurrencies
Post by: berkshire101 on January 04, 2018, 08:30:12 AM
Ripple co-founder is now richer than the Google founders on paper

https://www.cnbc.com/2018/01/04/ripple-co-founder-is-now-richer-than-the-google-founders-on-paper.html

Pretty crazy given that there is hardly any use for the product/service.
Title: Re: Cryptocurrencies
Post by: Spekulatius on January 04, 2018, 08:58:42 AM
Regarding inflation: there is a pre determined max for Bitcoin (not all of them) so there is no inflation in total supply. There is some inflation in what portion is free floating already (the release of new tokens exponentially decreases to zero).

I understand that the #of bitcoins is fixed, but this does not answer my question. Creating these cryptotokens is like creating money, as long as those tokens have a value and there is no economic benefit created (at least for the time being) with these tokens. This makes it inflationary in the real world.
Title: Re: Cryptocurrencies
Post by: no_free_lunch on January 04, 2018, 09:08:22 AM
You are absolutely right, they are inflationary to the fiat currencies but too small currently to have a big impact.
Title: Re: Cryptocurrencies
Post by: rkbabang on January 04, 2018, 09:14:18 AM
Regarding inflation: there is a pre determined max for Bitcoin (not all of them) so there is no inflation in total supply. There is some inflation in what portion is free floating already (the release of new tokens exponentially decreases to zero).

I understand that the #of bitcoins is fixed, but this does not answer my question. Creating these cryptotokens is like creating money, as long as those tokens have a value and there is no economic benefit created (at least for the time being) with these tokens. This makes it inflationary in the real world.

So the addition of these new currencies/stores of value on top of all of the currencies/stores of value already existing in the world is inflationary.  I agree.  I think any value these new currencies capture long term will come at the expense of something else, I would expect a decrease in value of fiat and precious metals.  I think gold will be reduced in value somewhat, but gold will still have value because it has a feature Bitcoin doesn't (i.e. you still have it when the electricity goes out or the internet goes down), it is the best non-digital store of value.  I would expect other metals like silver and copper to lose all value over the value they have as a commodity for industrial/commercial uses.  I think the majority of value loss will come from fiat currencies as they will be used only for transactional purposes and lose all store-of-value uses almost completely and probably lose much of their transactional value to one or more altcoins as well.
Title: Re: Cryptocurrencies
Post by: cherzeca on January 04, 2018, 09:16:16 AM
Regarding inflation: there is a pre determined max for Bitcoin (not all of them) so there is no inflation in total supply. There is some inflation in what portion is free floating already (the release of new tokens exponentially decreases to zero).

I understand that the #of bitcoins is fixed, but this does not answer my question. Creating these cryptotokens is like creating money, as long as those tokens have a value and there is no economic benefit created (at least for the time being) with these tokens. This makes it inflationary in the real world.

my thought is that at some point the fed/treasury will react.  how i dont know.  but here's a question: if some bitcoin billionaire cashes out, how does IRS know and get its share?  does IRS have to audit the ledger? this might get treasury's attention in a not good way.
Title: Re: Cryptocurrencies
Post by: alxcii on January 04, 2018, 09:58:01 AM
In case anyone is interested a high quality paper on the economic state and future of the whole crypto space. Very well written and researched:

https://s3.eu-west-2.amazonaws.com/john-pfeffer/An+Investor%27s+Take+on+Cryptoassets+v6.pdf

Thanks for posting this

Add another +1. Thank you.  I'm heavily invested in Ethereum and yet I am having a hard time seeing where he is wrong.


Sold my ETH and NEO for BTC today after reading it.

First post. It seems to me he is using the equation of exchange incorrectly - P*Q should be total transaction volume on chain, not the value of computation behind it. It would be like valuing a fiat currency by the value of the government/police/gold/infrastructure/etc backing it, not the aggregate value of transactions.
Title: Re: Cryptocurrencies
Post by: rkbabang on January 04, 2018, 10:38:52 AM
In case anyone is interested a high quality paper on the economic state and future of the whole crypto space. Very well written and researched:

https://s3.eu-west-2.amazonaws.com/john-pfeffer/An+Investor%27s+Take+on+Cryptoassets+v6.pdf

Thanks for posting this

Add another +1. Thank you.  I'm heavily invested in Ethereum and yet I am having a hard time seeing where he is wrong.


Sold my ETH and NEO for BTC today after reading it.

First post. It seems to me he is using the equation of exchange incorrectly - P*Q should be total transaction volume on chain, not the value of computation behind it. It would be like valuing a fiat currency by the value of the government/police/gold/infrastructure/etc backing it, not the aggregate value of transactions.

Welcome to the board.

Still his main points are still valid even if the target valuation is some higher number. There is nothing stopping applications from moving from one turing complete app chain to another.  If the value is located in the applications themselves, then what does it matter what chain any app is on as long as there is sufficient computing resources to run it. So there will be little stopping movement from one chain to another, or even from an app running on multiple chains at once and to switch between them (eventually even on the fly).  And as long as there is more than one app-chain competing the prices will fall to some minimum level to provide the computing resources it needs to keep the chain operational (with maybe some small level of profit margin).  And there will most likely be 10s or even hundreds of app-chains to choose from.  There may be good investments in specific apps as they grow (just like stock in companies can be good investments), but the app chains themselves won't be the place the excess value will reside.  I don't know, I'm still thinking through this myself.
Title: Re: Cryptocurrencies
Post by: wachtwoord on January 04, 2018, 10:58:24 AM
Ripple co-founder is now richer than the Google founders on paper

https://www.cnbc.com/2018/01/04/ripple-co-founder-is-now-richer-than-the-google-founders-on-paper.html

Pretty crazy given that there is hardly any use for the product/service.

Emphasis on paper as he holds a huge percentage of the float.
Title: Re: Cryptocurrencies
Post by: sjh on January 04, 2018, 11:50:13 AM
In case anyone is interested a high quality paper on the economic state and future of the whole crypto space. Very well written and researched:

https://s3.eu-west-2.amazonaws.com/john-pfeffer/An+Investor%27s+Take+on+Cryptoassets+v6.pdf

Thanks for posting this

Add another +1. Thank you.  I'm heavily invested in Ethereum and yet I am having a hard time seeing where he is wrong.


Sold my ETH and NEO for BTC today after reading it.

First post. It seems to me he is using the equation of exchange incorrectly - P*Q should be total transaction volume on chain, not the value of computation behind it. It would be like valuing a fiat currency by the value of the government/police/gold/infrastructure/etc backing it, not the aggregate value of transactions.

Welcome to the board.

Still his main points are still valid even if the target valuation is some higher number. There is nothing stopping applications from moving from one turing complete app chain to another.  If the value is located in the applications themselves, then what does it matter what chain any app is on as long as there is sufficient computing resources to run it. So there will be little stopping movement from one chain to another, or even from an app running on multiple chains at once and to switch between them (eventually even on the fly).  And as long as there is more than one app-chain competing the prices will fall to some minimum level to provide the computing resources it needs to keep the chain operational (with maybe some small level of profit margin).  And there will most likely be 10s or even hundreds of app-chains to choose from.  There may be good investments in specific apps as they grow (just like stock in companies can be good investments), but the app chains themselves won't be the place the excess value will reside.  I don't know, I'm still thinking through this myself.

I think he basically means that utility blockchains (like ETH) are like a commodity business. There is no moat. The price for a token can only rise to the value of computing power you get for it (plus a small margin for the miners). If the price for tokens rises above that point people will start using a blockchain that offers cheaper tokens (and provide similar utility). Therefore the market cap (price of all tokens) equals computing power of the network (or slightly above, but never much higher).

The only type of network where this does not apply is a store of value network (like bitcoin), because high token prices are a positive for users here.
Title: Re: Cryptocurrencies
Post by: cherzeca on January 04, 2018, 12:03:55 PM
question for those on this thread who are long bitcoin (either in coin or in theory):

Bitt is blockchainifying the barbados fiat currency.  do you see this central bank adoption expanding to other countries? is this a plus or negative for blockchain/bitcoin adoption?
Title: Re: Cryptocurrencies
Post by: Liberty on January 04, 2018, 12:20:54 PM
If it's privately owned, how is it not centrally controlled by the owner? What are those advantages was my question.

The advantage is it is much, much faster as you don't need to do mining.

They do appear to have a custom set of validators, so you are trusting ripple to be honest about which validators they use.

What's the advantage over a traditional database/ledger, I mean.

I know it's faster than, say, Bitcoin, but if it's not decentralized, then the whole point of a "distributed trustless network" falls down. You're still having to trust an entity, just like with traditional banking, and their control of the currency means that they can change the rules/software down the line without external consensus.
Title: Re: Cryptocurrencies
Post by: no_free_lunch on January 04, 2018, 01:15:32 PM
So again, I am no expert on this.  However from what I have read, the chain IS decentralized, sort of, and still run by the individual banks so that allows them to develop trust and audit the transactions.  The banks will develop relationships and balances with other financial institutions and ramp up volume as the trust builds.  If they want to transfer to a new institution and one of the banks they do buisness with has a relationship then they can "ripple" and bridge across those relationships.   I suspect there is much more to it and I don't understand the inner workings of bank transfers other than I am told it is a slow process when going across countries.

There is also this.  It seems like it is slowly gaining adoption and ultimately real world evidence is what matters.

https://www.cnbc.com/2017/11/16/american-express-santander-team-up-with-ripple-on-blockchain-platform.html
Title: Re: Cryptocurrencies
Post by: rkbabang on January 04, 2018, 01:23:23 PM
question for those on this thread who are long bitcoin (either in coin or in theory):

Bitt is blockchainifying the barbados fiat currency.  do you see this central bank adoption expanding to other countries? is this a plus or negative for blockchain/bitcoin adoption?

I think it will have no effect. Rather than re-type my reasons read my posts in this discussion: http://www.cornerofberkshireandfairfax.ca/forum/general-discussion/money-mustache-why-bitcoin-is-stupid/
Title: Re: Cryptocurrencies
Post by: cherzeca on January 04, 2018, 03:05:37 PM
question for those on this thread who are long bitcoin (either in coin or in theory):

Bitt is blockchainifying the barbados fiat currency.  do you see this central bank adoption expanding to other countries? is this a plus or negative for blockchain/bitcoin adoption?

I think it will have no effect. Rather than re-type my reasons read my posts in this discussion: http://www.cornerofberkshireandfairfax.ca/forum/general-discussion/money-mustache-why-bitcoin-is-stupid/

i think something along this line is needed for legitimacy and widescale adoption
Title: Re: Cryptocurrencies
Post by: Liberty on January 04, 2018, 04:57:36 PM
https://medium.com/@twobitidiot/i-see-you-xrp-fcf151feb96d
Title: Re: Cryptocurrencies
Post by: Liberty on January 04, 2018, 06:07:46 PM
https://twitter.com/nathanielpopper/status/949081873405304832
Title: Re: Cryptocurrencies
Post by: cmlber on January 04, 2018, 07:35:33 PM
Regarding inflation: there is a pre determined max for Bitcoin (not all of them) so there is no inflation in total supply. There is some inflation in what portion is free floating already (the release of new tokens exponentially decreases to zero).

I understand that the #of bitcoins is fixed, but this does not answer my question. Creating these cryptotokens is like creating money, as long as those tokens have a value and there is no economic benefit created (at least for the time being) with these tokens. This makes it inflationary in the real world.

So the addition of these new currencies/stores of value on top of all of the currencies/stores of value already existing in the world is inflationary.  I agree.  I think any value these new currencies capture long term will come at the expense of something else, I would expect a decrease in value of fiat and precious metals.  I think gold will be reduced in value somewhat, but gold will still have value because it has a feature Bitcoin doesn't (i.e. you still have it when the electricity goes out or the internet goes down), it is the best non-digital store of value.  I would expect other metals like silver and copper to lose all value over the value they have as a commodity for industrial/commercial uses.  I think the majority of value loss will come from fiat currencies as they will be used only for transactional purposes and lose all store-of-value uses almost completely and probably lose much of their transactional value to one or more altcoins as well.

What is the mechanism by which 1 USD becomes worth less than 1 USD?  It can become worth less in real terms through inflation, i.e., you can purchase fewer goods with 1 USD, but 1 USD is always 1 USD.  It's not as if you can take 100 USD, and then it becomes 60 USD to "make room" for bitcoins valued at the equivalent of 40 USD. 
Title: Re: Cryptocurrencies
Post by: rkbabang on January 05, 2018, 03:15:52 AM
Regarding inflation: there is a pre determined max for Bitcoin (not all of them) so there is no inflation in total supply. There is some inflation in what portion is free floating already (the release of new tokens exponentially decreases to zero).

I understand that the #of bitcoins is fixed, but this does not answer my question. Creating these cryptotokens is like creating money, as long as those tokens have a value and there is no economic benefit created (at least for the time being) with these tokens. This makes it inflationary in the real world.

So the addition of these new currencies/stores of value on top of all of the currencies/stores of value already existing in the world is inflationary.  I agree.  I think any value these new currencies capture long term will come at the expense of something else, I would expect a decrease in value of fiat and precious metals.  I think gold will be reduced in value somewhat, but gold will still have value because it has a feature Bitcoin doesn't (i.e. you still have it when the electricity goes out or the internet goes down), it is the best non-digital store of value.  I would expect other metals like silver and copper to lose all value over the value they have as a commodity for industrial/commercial uses.  I think the majority of value loss will come from fiat currencies as they will be used only for transactional purposes and lose all store-of-value uses almost completely and probably lose much of their transactional value to one or more altcoins as well.

What is the mechanism by which 1 USD becomes worth less than 1 USD?  It can become worth less in real terms through inflation, i.e., you can purchase fewer goods with 1 USD, but 1 USD is always 1 USD.  It's not as if you can take 100 USD, and then it becomes 60 USD to "make room" for bitcoins valued at the equivalent of 40 USD. 

1 2030 USD will buy less than 1 2018 USD used to and in 2030 the Bitcoin market cap will be equal to 4-12T 2018 USDs.
Title: Re: Cryptocurrencies
Post by: Liberty on January 05, 2018, 03:56:32 AM
This is fine: https://www.cnbc.com/2018/01/04/cryptocurrency-dogecoin-now-has-a-market-value-of-more-than-1-billion.html
Title: Re: Cryptocurrencies
Post by: sjh on January 05, 2018, 04:11:22 AM
If you want to see how an implementation of the lightning network wallet could look like check out the videos in the following twitter thread. He shows how you can add a payment contact (i.e. open a payment channel) and how to send, request and receive payments. I guess it will still take a few months until the bitcoin network has fully rolled out lightning, but it's great to glimpse how it might look like for users.

https://twitter.com/ln_zap/status/949160102883405824
Title: Re: Cryptocurrencies
Post by: cmlber on January 05, 2018, 05:48:32 AM
Regarding inflation: there is a pre determined max for Bitcoin (not all of them) so there is no inflation in total supply. There is some inflation in what portion is free floating already (the release of new tokens exponentially decreases to zero).

I understand that the #of bitcoins is fixed, but this does not answer my question. Creating these cryptotokens is like creating money, as long as those tokens have a value and there is no economic benefit created (at least for the time being) with these tokens. This makes it inflationary in the real world.

So the addition of these new currencies/stores of value on top of all of the currencies/stores of value already existing in the world is inflationary.  I agree.  I think any value these new currencies capture long term will come at the expense of something else, I would expect a decrease in value of fiat and precious metals.  I think gold will be reduced in value somewhat, but gold will still have value because it has a feature Bitcoin doesn't (i.e. you still have it when the electricity goes out or the internet goes down), it is the best non-digital store of value.  I would expect other metals like silver and copper to lose all value over the value they have as a commodity for industrial/commercial uses.  I think the majority of value loss will come from fiat currencies as they will be used only for transactional purposes and lose all store-of-value uses almost completely and probably lose much of their transactional value to one or more altcoins as well.

What is the mechanism by which 1 USD becomes worth less than 1 USD?  It can become worth less in real terms through inflation, i.e., you can purchase fewer goods with 1 USD, but 1 USD is always 1 USD.  It's not as if you can take 100 USD, and then it becomes 60 USD to "make room" for bitcoins valued at the equivalent of 40 USD. 

1 2030 USD will buy less than 1 2018 USD used to and in 2030 the Bitcoin market cap will be equal to 4-12T 2018 USDs.

Money doesn't work like that though... it doesn't lose its nominal value (money is by definition nominal).

I guess what you're assuming is USD gets used less frequently and therefore the money supply grows by the new amount of bitcoin but velocity declines, because USD is spent with less velocity.  That's the only mechanism I can think of by which a new money supply wouldn't be inflationary. 
Title: Re: Cryptocurrencies
Post by: SharperDingaan on January 05, 2018, 09:15:09 AM
A few comments to aid in understanding cryptocurrency ...

1) A currency is simply a unit of account AND a payment system.
2) Every user must decide, per payment, what is MOST important to them; speed OR security (not both). If you're paying for coffee, 5-10 seconds for the machine to process your card is acceptable; 10 minutes+ for a miner to verify your token is not.
3) Every user must decide, per payment, the level of security required. If you're paying via a FI card, the FI stands behind the transaction, and fast processing via a database becomes practical. If you're paying with crypto, NOBODY stands behind the transaction, and slow processing via the miner network on a distributed ledger is a necessity. 
4) Every user must decide, per payment, the level of anonymity required. The more it matters, the more you require the total anonymity of Bitcoin. Most of us will never require that level of anonymity, and if so - only very rarely.

Hence it should be very clear that for the vast majority of payments, we don't need a crypto running on a distributed ledger; the existing rails of cash and FI cards are more than adequate. With no demand for your product (MR), you cannot cover your costs (MC), and must go out of business. To survive, your payment system must offer something that people will pay for - level of anonymity.

Bitcoin is completely functional, anonymous digital cash, that exists entirely outside of the financial system. Records are immutable, it can be exchanged into any fiat currency you want, does everything that a fiat currency does, doesn't cost anything to keep secure, and is always available, at any time, anywhere in the world. It is an incredibly valuable store of value, and it is of most value to the criminal element.

Nothing prevents CBs from banding together to create a competing 'Bitcoin' under a non-sovereign organization (UN, World Bank, etc.). The coin could be used to settle global trade payments, removing the need to convert into fiat currency (USD, Euro, etc) to pay bills as they come due. The coin could partially displace current sovereign gold and foreign currency holdings, as an alternative diversifying asset. However, the coin could also support a global fractional reserve banking system - which Bitcoin CANNOT.

Throughout history, 'good' money has always chased out 'bad' money; most would expect a global CBDC to do something similar to a Bitcoin. The result is that Bitcoin survives as a valuable niche store of value, offering total anonymity as a unique value proposition, and there is nothing wrong in that.

SD



Title: Re: Cryptocurrencies
Post by: SnarkyPuppy on January 05, 2018, 09:23:39 AM
A few comments to aid in understanding cryptocurrency ...

1) A currency is simply a unit of account AND a payment system.
2) Every user must decide, per payment, what is MOST important to them; speed OR security (not both). If you're paying for coffee, 5-10 seconds for the machine to process your card is acceptable; 10 minutes+ for a miner to verify your token is not.
3) Every user must decide, per payment, the level of security required. If you're paying via a FI card, the FI stands behind the transaction, and fast processing via a database becomes practical. If you're paying with crypto, NOBODY stands behind the transaction, and slow processing via the miner network on a distributed ledger is a necessity. 
4) Every user must decide, per payment, the level of anonymity required. The more it matters, the more you require the total anonymity of Bitcoin. Most of us will never require that level of anonymity, and if so - only very rarely.

Hence it should be very clear that for the vast majority of payments, we don't need a crypto running on a distributed ledger; the existing rails of cash and FI cards are more than adequate. With no demand for your product (MR), you cannot cover your costs (MC), and must go out of business. To survive, your payment system must offer something that people will pay for - level of anonymity.

Bitcoin is completely functional, anonymous digital cash, that exists entirely outside of the financial system. Records are immutable, it can be exchanged into any fiat currency you want, does everything that a fiat currency does, doesn't cost anything to keep secure, and is always available, at any time, anywhere in the world. It is an incredibly valuable store of value, and it is of most valuable to the criminal element.

Nothing prevents CBs from banding together to create a competing 'Bitcoin' under a non-sovereign organization (UN, World Bank, etc.). The coin could be used to settle global trade payments, removing the need to convert into fiat currency (USD, Euro, etc) to pay bills as they come due. The coin could partially displace current sovereign gold and foreign currency holdings, as an alternative diversifying asset. However, the coin could also support a global fractional reserve banking system - which Bitcoin CANNOT.

Throughout history, 'good' money has always chased out 'bad' money; most would expect a global CBDC to do something similar to a Bitcoin. The result is that Bitcoin survives as a valuable niche store of value, offering total anonymity as a unique value proposition. Nothing wrong in that.

SD

Two quick thoughts on this-

a)  Do you disagree that the primary element of value in bitcoin is that it is completely decentralized (fundamentally inconsistent with any digital gold issued by a central bank)?   I do not see central bank issuing crypto as a risk for this specific reason - what am I missing here?
b)  Bitcoin is the opposite of anonymous and is a great tool for tracking movements of money - no?   Ross Ulbricht would probably support this statement.   All transactions are publicly and immutably stored for everyone to see - how is this anonymous in any way under the current dynamic?   Regulators should love this for AML.   
Title: Re: Cryptocurrencies
Post by: DeepSouth on January 05, 2018, 09:46:01 AM
A few comments to aid in understanding cryptocurrency ...

1) A currency is simply a unit of account AND a payment system.
2) Every user must decide, per payment, what is MOST important to them; speed OR security (not both). If you're paying for coffee, 5-10 seconds for the machine to process your card is acceptable; 10 minutes+ for a miner to verify your token is not.
3) Every user must decide, per payment, the level of security required. If you're paying via a FI card, the FI stands behind the transaction, and fast processing via a database becomes practical. If you're paying with crypto, NOBODY stands behind the transaction, and slow processing via the miner network on a distributed ledger is a necessity. 
4) Every user must decide, per payment, the level of anonymity required. The more it matters, the more you require the total anonymity of Bitcoin. Most of us will never require that level of anonymity, and if so - only very rarely.

Hence it should be very clear that for the vast majority of payments, we don't need a crypto running on a distributed ledger; the existing rails of cash and FI cards are more than adequate. With no demand for your product (MR), you cannot cover your costs (MC), and must go out of business. To survive, your payment system must offer something that people will pay for - level of anonymity.

Bitcoin is completely functional, anonymous digital cash, that exists entirely outside of the financial system. Records are immutable, it can be exchanged into any fiat currency you want, does everything that a fiat currency does, doesn't cost anything to keep secure, and is always available, at any time, anywhere in the world. It is an incredibly valuable store of value, and it is of most value to the criminal element.

Nothing prevents CBs from banding together to create a competing 'Bitcoin' under a non-sovereign organization (UN, World Bank, etc.). The coin could be used to settle global trade payments, removing the need to convert into fiat currency (USD, Euro, etc) to pay bills as they come due. The coin could partially displace current sovereign gold and foreign currency holdings, as an alternative diversifying asset. However, the coin could also support a global fractional reserve banking system - which Bitcoin CANNOT.

Throughout history, 'good' money has always chased out 'bad' money; most would expect a global CBDC to do something similar to a Bitcoin. The result is that Bitcoin survives as a valuable niche store of value, offering total anonymity as a unique value proposition, and there is nothing wrong in that.

SD


Bitcoin does not do everything fiat does. Try paying your taxes with bitcoin and you will be posting to COBF from federal prison. I'd argue that satisfying government levies might be the most important function of a currency as it's the function that keeps you out of prison. Why is it that most bitcoin zealots always overlook this?
Title: Re: Cryptocurrencies
Post by: no_free_lunch on January 05, 2018, 09:59:56 AM
b)  Bitcoin is the opposite of anonymous and is a great tool for tracking movements of money - no?   Ross Ulbricht would probably support this statement.   All transactions are publicly and immutably stored for everyone to see - how is this anonymous in any way under the current dynamic?   Regulators should love this for AML.   

If I may jump in to this.  I think that this doesn't necessarily hold up, beyond a very theoretical sense.  In practice there are bitcoin apps that pool transactions together and make it effectively impossible to trace who did what.   

Imagine that you are going to give someone we will call A $1k.   I am going to give someone called B $2k.   There are tools that will make a single transaction such that deepsouth contributes $1k, no_free_lunch contributes $2k,  then a gets $1k and b gets $2k.  You can't really tell who gave the money to A versus who gave the money to B.  Multiply that by a dozen or more people and then do that a couple of times and you can't ever know who was really giving the money to who.  They would have to pass laws to ban transaction pooling to get around this.
Title: Re: Cryptocurrencies
Post by: SnarkyPuppy on January 05, 2018, 10:04:31 AM
A few comments to aid in understanding cryptocurrency ...

1) A currency is simply a unit of account AND a payment system.
2) Every user must decide, per payment, what is MOST important to them; speed OR security (not both). If you're paying for coffee, 5-10 seconds for the machine to process your card is acceptable; 10 minutes+ for a miner to verify your token is not.
3) Every user must decide, per payment, the level of security required. If you're paying via a FI card, the FI stands behind the transaction, and fast processing via a database becomes practical. If you're paying with crypto, NOBODY stands behind the transaction, and slow processing via the miner network on a distributed ledger is a necessity. 
4) Every user must decide, per payment, the level of anonymity required. The more it matters, the more you require the total anonymity of Bitcoin. Most of us will never require that level of anonymity, and if so - only very rarely.

Hence it should be very clear that for the vast majority of payments, we don't need a crypto running on a distributed ledger; the existing rails of cash and FI cards are more than adequate. With no demand for your product (MR), you cannot cover your costs (MC), and must go out of business. To survive, your payment system must offer something that people will pay for - level of anonymity.

Bitcoin is completely functional, anonymous digital cash, that exists entirely outside of the financial system. Records are immutable, it can be exchanged into any fiat currency you want, does everything that a fiat currency does, doesn't cost anything to keep secure, and is always available, at any time, anywhere in the world. It is an incredibly valuable store of value, and it is of most value to the criminal element.

Nothing prevents CBs from banding together to create a competing 'Bitcoin' under a non-sovereign organization (UN, World Bank, etc.). The coin could be used to settle global trade payments, removing the need to convert into fiat currency (USD, Euro, etc) to pay bills as they come due. The coin could partially displace current sovereign gold and foreign currency holdings, as an alternative diversifying asset. However, the coin could also support a global fractional reserve banking system - which Bitcoin CANNOT.

Throughout history, 'good' money has always chased out 'bad' money; most would expect a global CBDC to do something similar to a Bitcoin. The result is that Bitcoin survives as a valuable niche store of value, offering total anonymity as a unique value proposition, and there is nothing wrong in that.

SD


Bitcoin does not do everything fiat does. Try paying your taxes with bitcoin and you will be posting to COBF from federal prison. I'd argue that satisfying government levies might be the most important function of a currency as it's the function that keeps you out of prison. Why is it that most bitcoin zealots always overlook this?

Can you pay taxes in gold today?
Title: Re: Cryptocurrencies
Post by: SnarkyPuppy on January 05, 2018, 10:08:22 AM
b)  Bitcoin is the opposite of anonymous and is a great tool for tracking movements of money - no?   Ross Ulbricht would probably support this statement.   All transactions are publicly and immutably stored for everyone to see - how is this anonymous in any way under the current dynamic?   Regulators should love this for AML.   

If I may jump in to this.  I think that this doesn't necessarily hold up, beyond a very theoretical sense.  In practice there are bitcoin apps that pool transactions together and make it effectively impossible to trace who did what.   

Imagine that you are going to give someone we will call A $1k.   I am going to give someone called B $2k.   There are tools that will make a single transaction such that deepsouth contributes $1k, no_free_lunch contributes $2k,  then a gets $1k and b gets $2k.  You can't really tell who gave the money to A versus who gave the money to B.  Multiply that by a dozen or more people and then do that a couple of times and you can't ever know who was really giving the money to who.  They would have to pass laws to ban transaction pooling to get around this.

I think you can make the same argument for USD - plenty of mechanisms including utilizing international shell companies are used for laundering money.    Criminal activity is a red herring because you can make the exact same argument for all other currencies actively accepted.   

I really should stop posting about bitcoin - will have so much egg on my face when this goes to $0.   I just want to reiterate that I don't think bitcoin is a >50% bet.   I just think it's a good gamble based on current prices and I think the value proposition is largely misunderstood.  :)
Title: Re: Cryptocurrencies
Post by: DeepSouth on January 05, 2018, 10:18:13 AM
A few comments to aid in understanding cryptocurrency ...

1) A currency is simply a unit of account AND a payment system.
2) Every user must decide, per payment, what is MOST important to them; speed OR security (not both). If you're paying for coffee, 5-10 seconds for the machine to process your card is acceptable; 10 minutes+ for a miner to verify your token is not.
3) Every user must decide, per payment, the level of security required. If you're paying via a FI card, the FI stands behind the transaction, and fast processing via a database becomes practical. If you're paying with crypto, NOBODY stands behind the transaction, and slow processing via the miner network on a distributed ledger is a necessity. 
4) Every user must decide, per payment, the level of anonymity required. The more it matters, the more you require the total anonymity of Bitcoin. Most of us will never require that level of anonymity, and if so - only very rarely.

Hence it should be very clear that for the vast majority of payments, we don't need a crypto running on a distributed ledger; the existing rails of cash and FI cards are more than adequate. With no demand for your product (MR), you cannot cover your costs (MC), and must go out of business. To survive, your payment system must offer something that people will pay for - level of anonymity.

Bitcoin is completely functional, anonymous digital cash, that exists entirely outside of the financial system. Records are immutable, it can be exchanged into any fiat currency you want, does everything that a fiat currency does, doesn't cost anything to keep secure, and is always available, at any time, anywhere in the world. It is an incredibly valuable store of value, and it is of most value to the criminal element.

Nothing prevents CBs from banding together to create a competing 'Bitcoin' under a non-sovereign organization (UN, World Bank, etc.). The coin could be used to settle global trade payments, removing the need to convert into fiat currency (USD, Euro, etc) to pay bills as they come due. The coin could partially displace current sovereign gold and foreign currency holdings, as an alternative diversifying asset. However, the coin could also support a global fractional reserve banking system - which Bitcoin CANNOT.

Throughout history, 'good' money has always chased out 'bad' money; most would expect a global CBDC to do something similar to a Bitcoin. The result is that Bitcoin survives as a valuable niche store of value, offering total anonymity as a unique value proposition, and there is nothing wrong in that.

SD


Bitcoin does not do everything fiat does. Try paying your taxes with bitcoin and you will be posting to COBF from federal prison. I'd argue that satisfying government levies might be the most important function of a currency as it's the function that keeps you out of prison. Why is it that most bitcoin zealots always overlook this?

Can you pay taxes in gold today?


Of course not. I never said that it couldn't replace gold, I implied that it can't replace the dollar.

I own bitcoin because of fund flows on the bet that it becomes seen as a stable store of value.
Title: Re: Cryptocurrencies
Post by: SharperDingaan on January 05, 2018, 10:44:41 AM
Fiat is a unit of account, medium of exchange, and store of value (guaranteed by the issuing CB); a Bitcoin is exactly the same thing.
And you CAN use it to pay your taxes - as is commonly done in Estonia.

Crypto as a payment system runs far more effectively and efficiently on a database.
Until you do your own DD on how the technology works, no one can help you.

SD

Title: Re: Cryptocurrencies
Post by: KJP on January 05, 2018, 10:53:24 AM
Fiat is a unit of account, medium of exchange, and store of value (guaranteed by the issuing CB); a Bitcoin is exactly the same thing.
And you CAN use it to pay your taxes - as is commonly done in Estonia.

Crypto as a payment system runs far more effectively and efficiently on a database.
Until you do your own DD on how the technology works, no one can help you.

SD

I have to ask what you mean by "store of value".  Has fiat really been a good "store of value" over decades?  Even the fiats that are seen as generally stable like the dollar have not retained their value in real terms in the 20th century, e.g., look at the change in the nominal price of a gallon of milk or a subway ride in NYC.

EDIT:  I do note that you didn't say fiats were a "good" store of value.  So, to the extent a "store of value" is anything that allows at least some preservation of value over time, then fiats would qualify, even if they're not great at it.
Title: Re: Cryptocurrencies
Post by: DeepSouth on January 05, 2018, 11:00:33 AM
LOL @ Estonia. I don't live there. I can't pay taxes in bitcoin.
Title: Re: Cryptocurrencies
Post by: SnarkyPuppy on January 05, 2018, 11:37:19 AM
A few comments to aid in understanding cryptocurrency ...

1) A currency is simply a unit of account AND a payment system.
2) Every user must decide, per payment, what is MOST important to them; speed OR security (not both). If you're paying for coffee, 5-10 seconds for the machine to process your card is acceptable; 10 minutes+ for a miner to verify your token is not.
3) Every user must decide, per payment, the level of security required. If you're paying via a FI card, the FI stands behind the transaction, and fast processing via a database becomes practical. If you're paying with crypto, NOBODY stands behind the transaction, and slow processing via the miner network on a distributed ledger is a necessity. 
4) Every user must decide, per payment, the level of anonymity required. The more it matters, the more you require the total anonymity of Bitcoin. Most of us will never require that level of anonymity, and if so - only very rarely.

Hence it should be very clear that for the vast majority of payments, we don't need a crypto running on a distributed ledger; the existing rails of cash and FI cards are more than adequate. With no demand for your product (MR), you cannot cover your costs (MC), and must go out of business. To survive, your payment system must offer something that people will pay for - level of anonymity.

Bitcoin is completely functional, anonymous digital cash, that exists entirely outside of the financial system. Records are immutable, it can be exchanged into any fiat currency you want, does everything that a fiat currency does, doesn't cost anything to keep secure, and is always available, at any time, anywhere in the world. It is an incredibly valuable store of value, and it is of most value to the criminal element.

Nothing prevents CBs from banding together to create a competing 'Bitcoin' under a non-sovereign organization (UN, World Bank, etc.). The coin could be used to settle global trade payments, removing the need to convert into fiat currency (USD, Euro, etc) to pay bills as they come due. The coin could partially displace current sovereign gold and foreign currency holdings, as an alternative diversifying asset. However, the coin could also support a global fractional reserve banking system - which Bitcoin CANNOT.

Throughout history, 'good' money has always chased out 'bad' money; most would expect a global CBDC to do something similar to a Bitcoin. The result is that Bitcoin survives as a valuable niche store of value, offering total anonymity as a unique value proposition, and there is nothing wrong in that.

SD


Bitcoin does not do everything fiat does. Try paying your taxes with bitcoin and you will be posting to COBF from federal prison. I'd argue that satisfying government levies might be the most important function of a currency as it's the function that keeps you out of prison. Why is it that most bitcoin zealots always overlook this?

Can you pay taxes in gold today?


Of course not. I never said that it couldn't replace gold, I implied that it can't replace the dollar.

I own bitcoin because of fund flows on the bet that it becomes seen as a stable store of value.

Got it - we're on the same page.
Title: Re: Cryptocurrencies
Post by: SharperDingaan on January 05, 2018, 11:54:14 AM
Fiat is a unit of account, medium of exchange, and store of value (guaranteed by the issuing CB); a Bitcoin is exactly the same thing.
And you CAN use it to pay your taxes - as is commonly done in Estonia.

Crypto as a payment system runs far more effectively and efficiently on a database.
Until you do your own DD on how the technology works, no one can help you.

SD


I have to ask what you mean by "store of value".  Has fiat really been a good "store of value" over decades?  Even the fiats that are seen as generally stable like the dollar have not retained their value in real terms in the 20th century, e.g., look at the change in the nominal price of a gallon of milk or a subway ride in NYC.

EDIT:  I do note that you didn't say fiats were a "good" store of value.  So, to the extent a "store of value" is anything that allows at least some preservation of value over time, then fiats would qualify, even if they're not great at it.

Technically a $1 bill is a bearer bond issued by the central bank, backed by the full faith and credit of the sovereign. The credit being supported by the sovereign ability to charge and collect on taxes, rents, etc. The store of value is 'dynamic', rather than a 'static' asset either sitting in a vault, or in the ground.

SD
Title: Re: Cryptocurrencies
Post by: KJP on January 05, 2018, 12:17:12 PM


Technically a $1 bill is a bearer bond issued by the central bank, backed by the full faith and credit of the sovereign. The credit being supported by the sovereign ability to charge and collect on taxes, rents, etc. The store of value is 'dynamic', rather than a 'static' asset either sitting in a vault, or in the ground.

SD

I don't understand what point you're trying to make.   

I don't think it can be disputed that $1 will buy you far less milk or eggs or bacon or subway rides or movie tickets today than $1 would have bought you 100 years ago.  See, e.g., https://www.bls.gov/opub/btn/volume-2/average-food-prices-a-snapshot-of-how-much-has-changed-over-a-century.htm 

The link illustrates why I think USD is not a good store of value.  If you think it's a good store of value, then I suspect we're using "store of value" to mean different things.

 

 
Title: Re: Cryptocurrencies
Post by: Liberty on January 05, 2018, 01:26:30 PM
If you want to see how an implementation of the lightning network wallet could look like check out the videos in the following twitter thread. He shows how you can add a payment contact (i.e. open a payment channel) and how to send, request and receive payments. I guess it will still take a few months until the bitcoin network has fully rolled out lightning, but it's great to glimpse how it might look like for users.

https://twitter.com/ln_zap/status/949160102883405824

Would you pay with a currency that could move 10 or 20% a day?
Title: Re: Cryptocurrencies
Post by: SharperDingaan on January 05, 2018, 03:32:13 PM


Technically a $1 bill is a bearer bond issued by the central bank, backed by the full faith and credit of the sovereign. The credit being supported by the sovereign ability to charge and collect on taxes, rents, etc. The store of value is 'dynamic', rather than a 'static' asset either sitting in a vault, or in the ground.

SD

I don't understand what point you're trying to make.   

I don't think it can be disputed that $1 will buy you far less milk or eggs or bacon or subway rides or movie tickets today than $1 would have bought you 100 years ago.  See, e.g., https://www.bls.gov/opub/btn/volume-2/average-food-prices-a-snapshot-of-how-much-has-changed-over-a-century.htm 

The link illustrates why I think USD is not a good store of value.  If you think it's a good store of value, then I suspect we're using "store of value" to mean different things.
 

The store TODAY is the claim on TODAYs tax stream of sovereign X. Tomorrow the value may be lower because there are more claims ($ bills) on the same tax stream, or a lower tax stream;either of which would 'devalue' the claim. Fiat currencies devalue because we increase the money supply (number of claims) every year.

Gold devalues as well - by the new amount mined plus the net change in inventory reserves (bullion+jewelry+industry). But as it typically devalues at a slower rate than fiat does, it appears to increase in value over the years.

SD
Title: Re: Cryptocurrencies
Post by: sjh on January 06, 2018, 01:57:45 AM
If you want to see how an implementation of the lightning network wallet could look like check out the videos in the following twitter thread. He shows how you can add a payment contact (i.e. open a payment channel) and how to send, request and receive payments. I guess it will still take a few months until the bitcoin network has fully rolled out lightning, but it's great to glimpse how it might look like for users.

https://twitter.com/ln_zap/status/949160102883405824

Would you pay with a currency that could move 10 or 20% a day?

I think volatility will go down as market cap increases. Bitcoin is like a micro cap stock compared to the amount of capital that is flowing in and out today. Obviously we see a lot of price movement.

The lightning network enables many things like off-chain transactions from a bitcoin wallet (lightning enabled) to wallets denominated in other cryptocurrencies (e.g. litecoin) without using an exchange. So you basically only need your bitcoin lightning wallet and can transact in all crypto currencies, which support this feature (it's called atomic swaps and has already been tested https://youtu.be/cBVcgzEuJ7Q)

99% of transactions will be done off-chain, maybe once or twice a year you will want to close the payment channels to update your current balance in the blockchain.

Or maybe we will still use good old USD and EUR bills in 20 years and this was just a nice idea. Who knows, we all live and learn.  :)
Title: Re: Cryptocurrencies
Post by: emily on January 07, 2018, 09:14:50 PM
Is bitcoin a code made of numbers and letters that I can vuisially see or is a barcode image that you can scan with a scanner?
After buying on coinbase, how do you transfer to Jaxx? Can it not be simply downloaded on a USB and saved on your hard drive? If so, would that be not most secure? Jaxx is a third party app and can be hacked.


What would be the advantage of doing it via ATM? Privacy? Skirting taxes? I really do not care about taxes as we all have to pay them. How does ATM protect privacy? I read on the link that you have to wait like an hour to get your money, 6 verifications to withdraw money  (privacy?) and there are limits to withdrawal. So it leads me to using coinbase.

Anything I should be careful of when opening account and giving them info? Just worried about losing all the info if coinbase gets hacked

Buying from an ATM is easier and much quicker (if you have one nearby that is).  You can download your wallet, put money in to the machine, and you have bitcoin.  You can still keep track of your cost basis and pay your taxes after you sell.  You can still open up a Coinbase account later and transfer your bitcoins in to convert back to $USD.

If you go through a company such as Coinbase you will need to setup an account (like you have already discovered) verify your ID, SSN, email address, etc.  Then you will need to link your bank account which will take a few days.  Then when you buy bitcoin from Coinbase it takes something like a week to show up in your account.  They also have limits to the amount you can buy/sell in a day/week/month.

So with an ATM you have bitcoin in minutes(even if it takes an hour to be fully confirmed at peak times, it is usually less), with Coinbase it will take you over a week from the time you first setup your account until you have bitcoin in your account.

The downside of the ATM is that the fees are usually much higher.  So you will save money in the end if you go the Coinbase route (if bitcoin doesn't shoot up in price by the time you get your account setup and your bank account linked and the money transferred in).

Another way to buy bitcoin is to find someone who is willing to sell you some.  This can be as quick and easy as the ATM and potentially cost you less (depending on the deal you make), but it can be dangerous meeting a stranger with cash in hand.  If you go this route try craigslist or http://localbitcoins.com/ for people in your area selling bitcoins.  I have never done this, but I know people who have.


If you do use Coinbase and are worried about them being hacked, after you have your bitcoin in your coinbase account transfer it out to your own private wallet.  This is what I do.  I use coinbase to buy, but I don't store it there.  Coinbase has never been hacked, but it is always a possibility.
Title: Re: Cryptocurrencies
Post by: rkbabang on January 08, 2018, 05:24:00 AM
Is bitcoin a code made of numbers and letters that I can vuisially see or is a barcode image that you can scan with a scanner?

Both.  Your private key is made up of numbers and letters and your public address is also made up of different numbers and letters.  But they can both be made into a QR code which can be scanned by a smartphone camera.    Any string of numbers and letters can be made into a QR code, that includes website addresses, bitcoin addresses, or anything else.


Quote
After buying on coinbase, how do you transfer to Jaxx? Can it not be simply downloaded on a USB and saved on your hard drive? If so, would that be not most secure? Jaxx is a third party app and can be hacked.

After buying on Coinbase go to your account and select "send", you will fill out a form which needs the amount to send and the address to send to.  Fill in the amount to send, then go to jaxx and find your receive address, copy it, then paste it into the form on coinbase.  Then hit the send button.
It is pretty easy.   Jaxx is an application that runs on your computer or phone, but it doesn't send any info off of your device.  But yes if someone got control of your device they could steal your bitcoin from you.  This is the same if you kept your private key on your hard drive, if someone hacked your computer they could steal your bitcoin.  If you have a substantial amount and you are afraid of someone hacking your device you don't have to keep the Jaxx software on your device.  The best way to learn this I think is to actually do it.  My recommendation would be to take $100 to experiment with for educational purposes.

1) Set up a Coinbase account and buy $100 worth of Bitcoin.
2) Download the Jaxx app to your phone.
3) Run the Jaxx app and set up a new wallet.

    IMPORTANT: Write down the 12 word backup phrase that you are given and save it somewhere secure.

4) Once you have your Bitcoin available in Coinbase send it to your Jaxx wallet.
   a) In Coinbase select "Send".
   b) Put in the amount to send (the max amount).
   c) In Jaxx copy the receive address.
   d) in Coinbase paste your jaxx receive address in the address to send to. And hit the send button.
   e) Wait until your Bitcoin shows up in Jaxx.  This could be as quick as 2 min or as long as an hour.  But will probably be within 10 min.

5) Now that you have Bitcoin in your private Jaxx wallet.  You can remove the Jaxx app from your phone.  Just uninstall the app completely. It is now gone and no one can get your Bitcoin by hacking into your phone.  The only way anyone could steal your Bitcoin from you now would be to somehow get a hold of your 12 word backup phrase which you wrote down when setting up Jaxx.

6) Now to restore your wallet you simply re-install Jaxx and instead of creating a new wallet select restore wallet the first time you run it.  It will ask you for your backup phrase. Type it in and your wallet containing your Bitcoins will be available for you to use.   You can do this to check the balance or to make a transaction. Then you can uninstall Jaxx again to have your wallet exist nowhere but on paper again.
Title: Re: Cryptocurrencies
Post by: clutch on January 08, 2018, 05:55:48 AM
Is bitcoin a code made of numbers and letters that I can vuisially see or is a barcode image that you can scan with a scanner?

Both.  Your private key is made up of numbers and letters and your public address is also made up of different numbers and letters.  But they can both be made into a QR code which can be scanned by a smartphone camera.    Any string of numbers and letters can be made into a QR code, that includes website addresses, bitcoin addresses, or anything else.


Quote
After buying on coinbase, how do you transfer to Jaxx? Can it not be simply downloaded on a USB and saved on your hard drive? If so, would that be not most secure? Jaxx is a third party app and can be hacked.

After buying on Coinbase go to your account and select "send", you will fill out a form which needs the amount to send and the address to send to.  Fill in the amount to send, then go to jaxx and find your receive address, copy it, then paste it into the form on coinbase.  Then hit the send button.
It is pretty easy.   Jaxx is an application that runs on your computer or phone, but it doesn't send any info off of your device.  But yes if someone got control of your device they could steal your bitcoin from you.  This is the same if you kept your private key on your hard drive, if someone hacked your computer they could steal your bitcoin.  If you have a substantial amount and you are afraid of someone hacking your device you don't have to keep the Jaxx software on your device.  The best way to learn this I think is to actually do it.  My recommendation would be to take $100 to experiment with for educational purposes.

1) Set up a Coinbase account and buy $100 worth of Bitcoin.
2) Download the Jaxx app to your phone.
3) Run the Jaxx app and set up a new wallet.

    IMPORTANT: Write down the 12 word backup phrase that you are given and save it somewhere secure.

4) Once you have your Bitcoin available in Coinbase send it to your Jaxx wallet.
   a) In Coinbase select "Send".
   b) Put in the amount to send (the max amount).
   c) In Jaxx copy the receive address.
   d) in Coinbase paste your jaxx receive address in the address to send to. And hit the send button.
   e) Wait until your Bitcoin shows up in Jaxx.  This could be as quick as 2 min or as long as an hour.  But will probably be within 10 min.

5) Now that you have Bitcoin in your private Jaxx wallet.  You can remove the Jaxx app from your phone.  Just uninstall the app completely. It is now gone and no one can get your Bitcoin by hacking into your phone.  The only way anyone could steal your Bitcoin from you now would be to somehow get a hold of your 12 word backup phrase which you wrote down when setting up Jaxx.

6) Now to restore your wallet you simply re-install Jaxx and instead of creating a new wallet select restore wallet the first time you run it.  It will ask you for your backup phrase. Type it in and your wallet containing your Bitcoins will be available for you to use.   You can do this to check the balance or to make a transaction. Then you can uninstall Jaxx again to have your wallet exist nowhere but on paper again.

rkbabang, are you just simplifying your explanation here about what is bitcoin and how its transactions work?

My understanding is that you never download a bitcoin. Bitcoins (more precisely, their values) are not stored on any specific device, but they "inhere" on transaction records on the blockchain network. By creating your own wallet and "sending bitcoins" to there, you are recording an additional transaction to your own address (this address is still part of the network). To make further transactions, you would need to know and use the private key that is generated by the wallet. And this private key is what gets stored in your wallet.

And to answer emily's question of why you cannot simply download "bitcoins" - Because it is simply not a download of an information artifact, but software like jaxx interacts with the blockchain to participate in the transaction recording (ledger) and manages the key generation / storage. You could write software yourself that does this, but obviously not straightforward like storing a file.
Title: Re: Cryptocurrencies
Post by: rkbabang on January 08, 2018, 06:09:12 AM
Is bitcoin a code made of numbers and letters that I can vuisially see or is a barcode image that you can scan with a scanner?

Both.  Your private key is made up of numbers and letters and your public address is also made up of different numbers and letters.  But they can both be made into a QR code which can be scanned by a smartphone camera.    Any string of numbers and letters can be made into a QR code, that includes website addresses, bitcoin addresses, or anything else.


Quote
After buying on coinbase, how do you transfer to Jaxx? Can it not be simply downloaded on a USB and saved on your hard drive? If so, would that be not most secure? Jaxx is a third party app and can be hacked.

After buying on Coinbase go to your account and select "send", you will fill out a form which needs the amount to send and the address to send to.  Fill in the amount to send, then go to jaxx and find your receive address, copy it, then paste it into the form on coinbase.  Then hit the send button.
It is pretty easy.   Jaxx is an application that runs on your computer or phone, but it doesn't send any info off of your device.  But yes if someone got control of your device they could steal your bitcoin from you.  This is the same if you kept your private key on your hard drive, if someone hacked your computer they could steal your bitcoin.  If you have a substantial amount and you are afraid of someone hacking your device you don't have to keep the Jaxx software on your device.  The best way to learn this I think is to actually do it.  My recommendation would be to take $100 to experiment with for educational purposes.

1) Set up a Coinbase account and buy $100 worth of Bitcoin.
2) Download the Jaxx app to your phone.
3) Run the Jaxx app and set up a new wallet.

    IMPORTANT: Write down the 12 word backup phrase that you are given and save it somewhere secure.

4) Once you have your Bitcoin available in Coinbase send it to your Jaxx wallet.
   a) In Coinbase select "Send".
   b) Put in the amount to send (the max amount).
   c) In Jaxx copy the receive address.
   d) in Coinbase paste your jaxx receive address in the address to send to. And hit the send button.
   e) Wait until your Bitcoin shows up in Jaxx.  This could be as quick as 2 min or as long as an hour.  But will probably be within 10 min.

5) Now that you have Bitcoin in your private Jaxx wallet.  You can remove the Jaxx app from your phone.  Just uninstall the app completely. It is now gone and no one can get your Bitcoin by hacking into your phone.  The only way anyone could steal your Bitcoin from you now would be to somehow get a hold of your 12 word backup phrase which you wrote down when setting up Jaxx.

6) Now to restore your wallet you simply re-install Jaxx and instead of creating a new wallet select restore wallet the first time you run it.  It will ask you for your backup phrase. Type it in and your wallet containing your Bitcoins will be available for you to use.   You can do this to check the balance or to make a transaction. Then you can uninstall Jaxx again to have your wallet exist nowhere but on paper again.

rkbabang, are you just simplifying your explanation here about what is bitcoin and how its transactions work?

My understanding is that you never download a bitcoin. Bitcoins (more precisely, their values) are not stored on any specific device, but they "inhere" on transaction records on the blockchain network. By creating your own wallet and "sending bitcoins" to there, you are recording an additional transaction to your own address (this address is still part of the network). To make further transactions, you would need to know and use the private key that is generated by the wallet. And this private key is what gets stored in your wallet.

And to answer emily's question of why you cannot simply download "bitcoins" - Because it is simply not a download of an information artifact, but software like jaxx interacts with the blockchain to participate in the transaction recording (ledger) and manages the key generation / storage. You could write software yourself that does this, but obviously not straightforward like storing a file.

Yes I was trying to simplify it.  More of a how to do it than a how it works explanation.  You are correct there is more to it.  Jaxx interacts with the block chain and doesn't really store anything.  It is even more complicated than that though, as Jaxx is an HD wallet (http://"https://en.bitcoin.it/wiki/Deterministic_wallet#Type_2_hierarchical_deterministic_wallet") which uses a hash of your 12 word backup phrase to generate a new private-key/public-address pair for every single transaction you make with it.  You can view all of your private key/public address pairs in the settings if you want to and use a block explorer to examine each one, but the software handles all of that under the hood for you.  When you restore it on a new Jaxx installation using your 12 word phrase it regenerates the hashes and searches the blockchain to re-compute your history and ballance.  The thing is that you don't have to understand how email works to send emails and you don't have to understand how bitcoin works to use bitcoin.  If you want a deep understanding of the underlying technology you could start with Satashi's white paper (http://"https://bitcoin.org/bitcoin.pdf"), there are also good books and articles which you could read, but if you just want to start using Bitcoin to get a feel for how it works there is no substitute for hands on experience.
Title: Re: Cryptocurrencies
Post by: emily on January 08, 2018, 06:12:07 AM
rkbabang, thank you. Is it possible to download the code to a USB (or on computer) and back up on a local drive not connected to the internet? I assume that would be the safest like you would store gold. Is that possible to do? Hacking is the biggest danger as I read.
Title: Re: Cryptocurrencies
Post by: rkbabang on January 08, 2018, 06:25:13 AM
rkbabang, thank you. Is it possible to download the code to a USB (or on computer) and back up on a local drive not connected to the internet? I assume that would be the safest like you would store gold. Is that possible to do? Hacking is the biggest danger as I read.

Yes you could use a computer that is never connected to the internet to create your wallet or install your wallet on a usb stick and only access it from non-connected computers.  Then send your coins from coinbase to the address generated by the offline computer.

You could also use a hardware wallet like Trezor (https://trezor.io/) this is pocket sized and not much bigger than a usb stick.  I've never used one, because I just prefer to keep paper wallets, but some people claim these are a highly secure way to hold your Bitcoins.  There is also the Ledger Nano S (https://www.ledgerwallet.com/products/ledger-nano-s) hardware wallet but those appear to be backordered until March.

Title: Re: Cryptocurrencies
Post by: Cardboard on January 08, 2018, 07:16:59 AM
The latest e-mails from Rkbabang should demonstrate clearly why this cannot replace gold. At least not for now.

The complexity, relying on third parties is way too high.

Moreover, I just entered this on my PC to see what this market is doing right now: https://www.coindesk.com/price/ and the screen is locked.

How could one of the largest exchanges be experiencing this on a regular basis and attract more users/demand and a sense of security?

Finally, when something goes up 20 times in any given year, it should give a pause to most rational players. That is at least what I would expect from participants on a website who know one thing or two about value investing.

This should also be especially true, when this new "hunt" for a supposedly store of value occurs during a raging bull market in paper assets.

Cardboard
Title: Re: Cryptocurrencies
Post by: rkbabang on January 08, 2018, 07:41:41 AM
The latest e-mails from Rkbabang should demonstrate clearly why this cannot replace gold. At least not for now.

The complexity, relying on third parties is way too high.

Moreover, I just entered this on my PC to see what this market is doing right now: https://www.coindesk.com/price/ and the screen is locked.

How could one of the largest exchanges be experiencing this on a regular basis and attract more users/demand and a sense of security?

Finally, when something goes up 20 times in any given year, it should give a pause to most rational players. That is at least what I would expect from participants on a website who know one thing or two about value investing.

This should also be especially true, when this new "hunt" for a supposedly store of value occurs during a raging bull market in paper assets.

Cardboard

I don't know what is wrong with coindesk.com, I've never been to that website before, but it does appear broken.  There are a million other places you can get a quote though.  I usually use http://coincap.io/  If yahoo finance goes down and you can't get a stock quote from there, would you come to the conclusion that stocks are broken?

Also you misunderstand my posts there is no relying on third parties.  You can acquire Bitcoin outside of a company like Coinbase.  You could mine it yourself, you could go to an atm, you could find someone to sell you some, etc.  Just like gold, you can try prospecting yourself or you can find a private party to sell you some, or you can buy it from a dealer.  You can also purchase a gold ETF which is something you will one day be able to easily do with Bitcoin as well.  I've never physically owned gold as an investment, but I have in the past owned SGOL.

With Bitcoin you can absolutely do everything yourself.  You could write software to generate your own private keys and to interact with the blockchain or you could use opensource software that does this for you.  You can run this software on an air-gapped computer, generate your keys, and completely control your private keys without relying on any 3rd party.

EDIT: Also when it goes up 20X in a year it does give pause to rational players, but that also says nothing at all about what will happen long term with this.   It hit around $1100 in 2013 then went back down to around $100.  I am not saying similar crashes (or worse) will not happen along the way.
Title: Re: Cryptocurrencies
Post by: Cardboard on January 08, 2018, 08:01:47 AM
"I've never physically owned gold as an investment, but I have in the past owned SGOL."

Do yourself an immense favour: go buy right now an ounce of gold and bring it back home. Johnson Matthey is a highly reputable refiner and these are accepted/recognized anywhere.

This will cost you near nothing as these have very little commission to buy but, the process could show you what I mean.

Cardboard
Title: Re: Cryptocurrencies
Post by: SnarkyPuppy on January 08, 2018, 08:19:44 AM
The latest e-mails from Rkbabang should demonstrate clearly why this cannot replace gold. At least not for now.

The complexity, relying on third parties is way too high.

Moreover, I just entered this on my PC to see what this market is doing right now: https://www.coindesk.com/price/ and the screen is locked.

How could one of the largest exchanges be experiencing this on a regular basis and attract more users/demand and a sense of security?

Finally, when something goes up 20 times in any given year, it should give a pause to most rational players. That is at least what I would expect from participants on a website who know one thing or two about value investing.

This should also be especially true, when this new "hunt" for a supposedly store of value occurs during a raging bull market in paper assets.

Cardboard

We are valuing where things will be in 3 years from now.   Also, commitment and consistency bias is strong w this one.

As a value investor I've been taught to not react to price movements and evaluate underlying value.   Assuming something is overvalued simply because of price going up is no different than blaming others for buying things because prices have gone up.   
Title: Re: Cryptocurrencies
Post by: SharperDingaan on January 08, 2018, 09:19:50 AM
These things have a fine line between junkie and investor; and why, in part, we are no longer in them.
There is still a lot of money to be made, but we think that today it's largely a bet against the tide going out. Nothing wrong in that; we just prefer not to hold melting ice cubes.

SD


Title: Re: Cryptocurrencies
Post by: rkbabang on January 08, 2018, 09:31:44 AM
"I've never physically owned gold as an investment, but I have in the past owned SGOL."

Do yourself an immense favour: go buy right now an ounce of gold and bring it back home. Johnson Matthey is a highly reputable refiner and these are accepted/recognized anywhere.

This will cost you near nothing as these have very little commission to buy but, the process could show you what I mean.

Cardboard

I may just do that in the near future.  I suspect it will show me that Bitcoin is easier to acquire and store.  It couldn't hurt to own a small amount of gold though.
Title: Re: Cryptocurrencies
Post by: JimBowerman on January 08, 2018, 10:02:33 AM

Finally, when something goes up 20 times in any given year, it should give a pause to most rational players. That is at least what I would expect from participants on a website who know one thing or two about value investing.


My problem with this is that "something going up 20x" doesn't account for fundamentals.  Many value investors simply say its overvalued because of recent price action.  Aren't we supposed to largely ignore past price movements in value investing and instead focus on fundamentals (% of gold market cap, % of world money supply, etc)?

I think what is really happening here is that crypto in general eliminates the IPO phase of investments.  In its first 9 years as a company, Google went from $0 to $100B+, but people were less likely to call it a bubble because most of the price rise (in % terms ) was pre-IPO.  The IPO market cap was around $20B, but if you chart gains in the pre IPO price of google shares they'd look almost exactly like crypto prices.  Its largely optics imo.

Not saying crypto is a great investment or that it can't fall severly from here, but I don't see a lot of fundamental analysis from value investors going on in regards to crypto (both on the bullish and bearish side).
Title: Re: Cryptocurrencies
Post by: SnarkyPuppy on January 08, 2018, 10:05:52 AM

Finally, when something goes up 20 times in any given year, it should give a pause to most rational players. That is at least what I would expect from participants on a website who know one thing or two about value investing.


My problem with this is that "something going up 20x" doesn't account for fundamentals.  Many value investors simply say its overvalued because of recent price action.  Aren't we supposed to largely ignore past price movements in value investing and instead focus on fundamentals (% of gold market cap, % of world money supply, etc)?

I think what is really happening here is that crypto in general eliminates the IPO phase of investments.  In its first 9 years as a company, Google went from $0 to $100B+, but people were less likely to call it a bubble because most of the price rise (in % terms ) was pre-IPO.  The IPO market cap was around $20B, but if you chart gains in the pre IPO price of google shares they'd look almost exactly like crypto prices.  Its largely optics imo.

Not saying crypto is a great investment or that it can't fall severly from here, but I don't see a lot of fundamental analysis from value investors going on in regards to crypto (both on the bullish and bearish side).

+1
Title: Re: Cryptocurrencies
Post by: Cardboard on January 08, 2018, 10:28:55 AM
"My problem with this is that "something going up 20x" doesn't account for fundamentals.  Many value investors simply say its overvalued because of recent price action.  Aren't we supposed to largely ignore past price movements in value investing and instead focus on fundamentals (% of gold market cap, % of world money supply, etc)?

I think what is really happening here is that crypto in general eliminates the IPO phase of investments.  In its first 9 years as a company, Google went from $0 to $100B+, but people were less likely to call it a bubble because most of the price rise (in % terms ) was pre-IPO.  The IPO market cap was around $20B, but if you chart gains in the pre IPO price of google shares they'd look almost exactly like crypto prices.  Its largely optics imo.

Not saying crypto is a great investment or that it can't fall severly from here, but I don't see a lot of fundamental analysis from value investors going on in regards to crypto (both on the bullish and bearish side)."

A value investor will accept that something goes up 20 times in one year if there was large undervaluation and/or something fundamental that has changed to justify this 20 times. However, I will submit that in my 20+ years of investing that this is very rare occurence and much more likely to happen to obscure, small market cap securities vs billion $ assets.

So you should ask yourself, what has changed to cryptos in the span of 12 months to justify such move?

Moreover, the main thesis that I have heard on this board is that Bitcoin should be valued at $7 trillion mostly because gold has such valuation. Is this fundamental analysis?

Cardboard
Title: Re: Cryptocurrencies
Post by: clutch on January 08, 2018, 10:46:10 AM
The latest e-mails from Rkbabang should demonstrate clearly why this cannot replace gold. At least not for now.

The complexity, relying on third parties is way too high.

Are you just talking about the complexity and reliance that occur during transactions?

Either way, think of all the processes required in mining, processing, selling, regulating, trading, and storing gold (in a relatively safe environment). Think of all the complexities and third parties involved in those processes.
Title: Re: Cryptocurrencies
Post by: SnarkyPuppy on January 08, 2018, 10:48:13 AM
"My problem with this is that "something going up 20x" doesn't account for fundamentals.  Many value investors simply say its overvalued because of recent price action.  Aren't we supposed to largely ignore past price movements in value investing and instead focus on fundamentals (% of gold market cap, % of world money supply, etc)?

I think what is really happening here is that crypto in general eliminates the IPO phase of investments.  In its first 9 years as a company, Google went from $0 to $100B+, but people were less likely to call it a bubble because most of the price rise (in % terms ) was pre-IPO.  The IPO market cap was around $20B, but if you chart gains in the pre IPO price of google shares they'd look almost exactly like crypto prices.  Its largely optics imo.

Not saying crypto is a great investment or that it can't fall severly from here, but I don't see a lot of fundamental analysis from value investors going on in regards to crypto (both on the bullish and bearish side)."

A value investor will accept that something goes up 20 times in one year if there was large undervaluation and/or something fundamental that has changed to justify this 20 times. However, I will submit that in my 20+ years of investing that this is very rare occurence and much more likely to happen to obscure, small market cap securities vs billion $ assets.

So you should ask yourself, what has changed to cryptos in the span of 12 months to justify such move?

Moreover, the main thesis that I have heard on this board is that Bitcoin should be valued at $7 trillion mostly because gold has such valuation. Is this fundamental analysis?

Cardboard

Does fundamental analysis have to be complicated to be fundamental?   

Gold is used as a scarce flight-to-safety store-of-value which is naturally anti-central bank (i.e. government) and a hedge against the current financial system.  It is a demonstrable fact that such an asset is valued at $7trillion. 

Bitcoin seeks to fill the same role.  Compared to gold, Bitcoin is easier to move globally, cheaper, faster, scarcer, easier and more secure to store, and MOST importantly:  has trustless immutability.    (Note:   some of these are not currently the case but probablisticaly will be the case in 3-5 years - such as ease of use, storage, and cost;   many are mistaking the current difficulty with the future ease;   a possible relevant comparison is sending emails in 1987 versus sending emails in 2017).   

If the assumption proves to be true/accepted that bitcoin performs the function of gold in a more efficient and trustless manner (this is clearly debatable), then its entirely within the realm of possibility that it reaches the valuation of gold.   

I will say - this is ABSOLUTELY NOT fundamental value investing with a margin of safety.   This is clearcut speculation - maybe others disagree with this but this absolutely can go to $0 and "probably" (probabilistically >50%) go to $0.  The variant perception is that bitcoin has significant value based on its trustless immutability - and the value proposition is that similar assets are valued at ~23x.   You are risking $1 to make $23.   

Determine the odds and place your bets.
Title: Re: Cryptocurrencies
Post by: JimBowerman on January 08, 2018, 10:52:13 AM

So you should ask yourself, what has changed to cryptos in the span of 12 months to justify such move?


Cardboard

Couldn't the same question be asked of bezos when he invested in google in 1998 at 6 cents a share?  What changed at google form 1998 to 2000 or 2005 for that matter?  Sure they changed/added things (gmail etc) but in general the basic structure of google was kinda there in 1998 (superior search engine, which is naturally winner take all and then selling ad revenue based on that).  You just had to be an accredited investor and believe in their roadmap.  Same thing with amazon...roadmap was laid out in 1997.  angel investors, if they believed bezos, coulda seen the roadmap even earlier.  Then it was a matter of: 1) will the internet take off and 2) will amazon be a leader in that space.  Thats still kinda the same basic thesis all these years later.  The details have evolved but its still basically that.

I think with crypto you kinda have a similar thing: 1) will cryptos in general ever be big? 2) if so, which one is likely to be the leader.

The nature of a lot of investing is naturally going to be that price rises PROCEED actual product developments.  No way you could justify amazon's stock price in 2000 based on what it had implemented at the time.  But investors are able to look forward and time has shown that even those who top ticked amazon in the 2000 bubble had the big picture right (ie internet has turned into a big thing, and amazon has retained leadership)

investors all learn about new tech etc gradually.  I think what youre seeing is more that most investors are finally learning about crypto and taking it seriously instead of blowing it off (which is what most did when they first heard about it in the 2013 bubble).  In the real world ideas need to sit with investors for a while.  IMO thats the reason for the recent price rise, because your right, the nothing has changed significantly in crypt in the last 12 months...or at least nothing that wasn't fairly predictable back in 2015.  That said, the main ideas were there back in 2010, but i wouldnt' expect an instant price rise to a 1T market cap back in 2010 because ideas take time to percolate thorugh society. As they do i'd expect price rises like we saw in the last 12 months even without fundamental changes to the product.
Title: Re: Cryptocurrencies
Post by: rkbabang on January 08, 2018, 10:56:32 AM
"My problem with this is that "something going up 20x" doesn't account for fundamentals.  Many value investors simply say its overvalued because of recent price action.  Aren't we supposed to largely ignore past price movements in value investing and instead focus on fundamentals (% of gold market cap, % of world money supply, etc)?

I think what is really happening here is that crypto in general eliminates the IPO phase of investments.  In its first 9 years as a company, Google went from $0 to $100B+, but people were less likely to call it a bubble because most of the price rise (in % terms ) was pre-IPO.  The IPO market cap was around $20B, but if you chart gains in the pre IPO price of google shares they'd look almost exactly like crypto prices.  Its largely optics imo.

Not saying crypto is a great investment or that it can't fall severly from here, but I don't see a lot of fundamental analysis from value investors going on in regards to crypto (both on the bullish and bearish side)."

A value investor will accept that something goes up 20 times in one year if there was large undervaluation and/or something fundamental that has changed to justify this 20 times. However, I will submit that in my 20+ years of investing that this is very rare occurence and much more likely to happen to obscure, small market cap securities vs billion $ assets.

So you should ask yourself, what has changed to cryptos in the span of 12 months to justify such move?

Moreover, the main thesis that I have heard on this board is that Bitcoin should be valued at $7 trillion mostly because gold has such valuation. Is this fundamental analysis?

Cardboard

How do you value gold?  Should it be valued at $7T right now or is it over or under valued? 

I've read many times that Bitcoin is too volatile to be a good store of value. While that is true currently, the volatility will need to be less than it is, even gold isn't completely stable.  Gold went from $35/oz in 1970 to $850/oz in 1980.  It fell to as low as $250 in 1999 and was trading over $1000 in 2008.

Just in my lifetime gold has ranged from $38 to $1800.  That is a 47X difference on a store of value that has been in common use for thousands of years (you aren't going to get more stable than that).  And it wasn't a smooth increase from $38 to $1800, but up and down massively.


I don't know how to exactly value Bitcoin, but there are some things I'm sure of.

It will be used as a store of value that will be more commonly utilized than gold. Therefor it will be valued at some portion of what gold is valued at today.  It won't be 100%, people will still hold gold and there will still be a market for it.  So will Bitcoin be valued at half of what gold is today?  85%?  Maybe I'm wrong and it will only be 25%.   I don't know.  But at 25%-85% of $7T the market cap will be in the trillions eventually.  I don't know how long this will take (5-15 years maybe), but I am counting on being approximately correct rather than precisely wrong.
Title: Re: Cryptocurrencies
Post by: Liberty on January 08, 2018, 11:01:54 AM
Quote
Gold went from $35/oz in 1970 to $850/oz in 1980.  It fell to as low as $250 in 1999 and was trading over $1000 in 2008.

Just in my lifetime gold has ranged from $38 to $1800.  That is a 47X difference on a store of value that has been in common use for thousands of years (you aren't going to get more stable than that).  And it wasn't a smooth increase from $38 to $1800, but up and down massively.

The value of the US dollar also changed during that period.

Pretty big difference between changing that much over 40-50 year and that much in a year.
Title: Re: Cryptocurrencies
Post by: rkbabang on January 08, 2018, 11:13:56 AM
Quote
Gold went from $35/oz in 1970 to $850/oz in 1980.  It fell to as low as $250 in 1999 and was trading over $1000 in 2008.

Just in my lifetime gold has ranged from $38 to $1800.  That is a 47X difference on a store of value that has been in common use for thousands of years (you aren't going to get more stable than that).  And it wasn't a smooth increase from $38 to $1800, but up and down massively.

The value of the US dollar also changed during that period.

Pretty big difference between changing that much over 40-50 year and that much in a year.

No disputing that.  I'm just saying nothing is completely stable and bitcoin is so new and so few people use it (and even fewer understand it) that I wouldn't be surprised if we have a few more up or down 30X years coming.  On the bear side: there is a lot of Bitcoin in a small number of hands, when those whales start selling things are going to get bumpy and panic will ensue. And on the bullish side: With so few people currently invested and it being so hard for people to invest in (see my above posts that you mentioned), I don't think we've even even come close to seeing how insane Bitcoin mania can get.  Bitcoin will be as easy to use as normal banking is now and every joe sixpack will be buying, so the real mania is still to come (Bitcoin with a $30T market cap maybe).  But 20 years from now all that will have shaken out and it will be close to as stable as gold has been (up or down 3-5X in a decade).
Title: Re: Cryptocurrencies
Post by: clutch on January 08, 2018, 12:34:06 PM
I think there is one limitation of cryptocurrecies that strikes at the core of its value proposition. The primary strength is its decentralization and its independence from any state or organization. However, it requires a global computer network, i.e., the Internet, for it to work. The problem is that the infrastructure that provides the Internet is centralized and owned by states / corporations. So the bedrock on which the blockchain network lives on is not decentralized and independent.

Also, if you are cut off from the network, you cannot participate in this. Just think of the citizens of North Korea - they cannot participate in any Bitcoin transactions because they cannot even access the public Internet.

What happens if a totalitarian state abolishes the infrastructure for the Internet because they see cryptocurrencies as their biggest threat? Maybe not even a single state, but the world as a whole decides for whatever reason that the Internet needs to be abolished? Or another world-war destroys all the digital infrastructures? I guess such conditions are so dire that considerations of the value of cryptocurrencies are moot... But don't these things supposed to be a store of value because these events could occur?

That is also one positive for gold. Even if we go back to fighting with rocks and sticks, gold could still have value.
Title: Re: Cryptocurrencies
Post by: rkbabang on January 08, 2018, 12:57:37 PM
I think there is one limitation of cryptocurrecies that strikes at the core of its value proposition. The primary strength is its decentralization and its independence from any state or organization. However, it requires a global computer network, i.e., the Internet, for it to work. The problem is that the infrastructure that provides the Internet is centralized and owned by states / corporations. So the bedrock on which the blockchain network lives on is not decentralized and independent.

Also, if you are cut off from the network, you cannot participate in this. Just think of the citizens of North Korea - they cannot participate in any Bitcoin transactions because they cannot even access the public Internet.

What happens if a totalitarian state abolishes the infrastructure for the Internet because they see cryptocurrencies as their biggest threat? Maybe not even a single state, but the world as a whole decides for whatever reason that the Internet needs to be abolished? Or another world-war destroys all the digital infrastructures? I guess such conditions are so dire that considerations of the value of cryptocurrencies are moot... But don't these things supposed to be a store of value because these events could occur?

That is also one positive for gold. Even if we go back to fighting with rocks and sticks, gold could still have value.


Yes gold isn't going anywhere, but if the US government gets tyrannical to the point where it shuts down the internet I suspect I'll have larger problems than my Bitcoin holdings.
Title: Re: Cryptocurrencies
Post by: Cardboard on January 08, 2018, 01:25:02 PM
"Yes gold isn't going anywhere, but if the US government gets tyrannical to the point where it shuts down the internet I suspect I'll have larger problems than my Bitcoin holdings."

This gets to my point: there is no hunt right now for a store of value.

The hunt right now is related to greed, the fear to miss out on something or after almost 8 years into a major bull market.

Imagine this whole conversation in 2008-2009 during the major downturn. Even then the supposedly great store of value or gold was down quite a bit. Everything was thrown away. Raising cash was all that mattered.

I am not saying that Rkbabang is not onto something and that crypto is worthless. However, I am quite skeptical about the store of value argument especially after the kind of frenzy that we have seen.

Cardboard
Title: Re: Cryptocurrencies
Post by: JimBowerman on January 08, 2018, 01:56:47 PM
I think there is one limitation of cryptocurrecies that strikes at the core of its value proposition. The primary strength is its decentralization and its independence from any state or organization. However, it requires a global computer network, i.e., the Internet, for it to work. The problem is that the infrastructure that provides the Internet is centralized and owned by states / corporations. So the bedrock on which the blockchain network lives on is not decentralized and independent.

Also, if you are cut off from the network, you cannot participate in this. Just think of the citizens of North Korea - they cannot participate in any Bitcoin transactions because they cannot even access the public Internet.

I think if the internet goes down we have bigger problems, but that said, long term there may be ways around the issues you mentioned.  I've seen research talking about broadcasting bitcoin trasnsactions over radio signals.

In addition, the IPFS protocol hopes to get around the problem on interent centralization you mentioned.   

https://bitconnect.co/bitcoin-news/800/nick-szabo-developed-a-method-of-sending-bitcoin-transactions-over-radio

https://ipfs.io/

https://www.technologyreview.com/s/427413/how-china-blocks-the-tor-anonymity-network/
Title: Re: Cryptocurrencies
Post by: beerbaron on January 08, 2018, 05:17:58 PM
"Yes gold isn't going anywhere, but if the US government gets tyrannical to the point where it shuts down the internet I suspect I'll have larger problems than my Bitcoin holdings."

This gets to my point: there is no hunt right now for a store of value.

The hunt right now is related to greed, the fear to miss out on something or after almost 8 years into a major bull market.

Imagine this whole conversation in 2008-2009 during the major downturn. Even then the supposedly great store of value or gold was down quite a bit. Everything was thrown away. Raising cash was all that mattered.

I am not saying that Rkbabang is not onto something and that crypto is worthless. However, I am quite skeptical about the store of value argument especially after the kind of frenzy that we have seen.

Cardboard

Similar to your thinking, one would assume that if people were looking for store of value one would assume that gain in cryto would translate into an equivalent drop in gold. When I look at charts of golds it seems quite flat, suggesting one is speculation while the other is business as usual.

BeerBaron

Title: Re: Cryptocurrencies
Post by: rkbabang on January 09, 2018, 06:04:49 AM
"Yes gold isn't going anywhere, but if the US government gets tyrannical to the point where it shuts down the internet I suspect I'll have larger problems than my Bitcoin holdings."

This gets to my point: there is no hunt right now for a store of value.

The hunt right now is related to greed, the fear to miss out on something or after almost 8 years into a major bull market.

Imagine this whole conversation in 2008-2009 during the major downturn. Even then the supposedly great store of value or gold was down quite a bit. Everything was thrown away. Raising cash was all that mattered.

I am not saying that Rkbabang is not onto something and that crypto is worthless. However, I am quite skeptical about the store of value argument especially after the kind of frenzy that we have seen.

Cardboard

Similar to your thinking, one would assume that if people were looking for store of value one would assume that gain in cryto would translate into an equivalent drop in gold. When I look at charts of golds it seems quite flat, suggesting one is speculation while the other is business as usual.

BeerBaron

Anyone who doesn't think Bitcoin is pure speculation right now is insane.  I just think it is a good bet, just don't bet the farm.
Title: Re: Cryptocurrencies
Post by: SharperDingaan on January 09, 2018, 06:43:47 AM
"So you should ask yourself, what has changed to cryptos in the span of 12 months to justify such move?"

Four major things changed for Bitcoin during 2017:
1) Attained critical mass. Coming together of enough early adopters outside of the IT/developer community, for social media to take it main stream. 12 months ago it was just a 'thing', now everyone wants to know how to buy/sell them.
2) 'Asset' recognition. Individually, we may be positive that Bitcoin is a 'tulip'; but if the folks that matter declare Bitcoin to be an 'asset', our opinion really doesn't matter.
3) It became credible in NA. Bitcoin was the example, that moved business conversation onto the blockchain technology that runs it. 
4) It became mainstream. R3 Corda ledger tests were successful, providing the pipes to enable financial regulators/institutions to 'safely' participate in crypto currency investment. The outcome has been derivatives on Bitcoin, that enable institutions to control risk.

Given the large quantity of really bad ICO's issued in 2017, & the bad taste they are leaving; most would expect 2018 to see some of the air leave the bubble. The point here is that adoption 'events' are determining the valuation, not the technology itself.

SD



Title: Re: Cryptocurrencies
Post by: rkbabang on January 09, 2018, 07:38:55 AM
"So you should ask yourself, what has changed to cryptos in the span of 12 months to justify such move?"

Four major things changed for Bitcoin during 2017:
1) Attained critical mass. Coming together of enough early adopters outside of the IT/developer community, for social media to take it main stream. 12 months ago it was just a 'thing', now everyone wants to know how to buy/sell them.
2) 'Asset' recognition. Individually, we may be positive that Bitcoin is a 'tulip'; but if the folks that matter declare Bitcoin to be an 'asset', our opinion really doesn't matter.
3) It became credible in NA. Bitcoin was the example, that moved business conversation onto the blockchain technology that runs it. 
4) It became mainstream. R3 Corda ledger tests were successful, providing the pipes to enable financial regulators/institutions to 'safely' participate in crypto currency investment. The outcome has been derivatives on Bitcoin, that enable institutions to control risk.

Given the large quantity of really bad ICO's issued in 2017, & the bad taste they are leaving; most would expect 2018 to see some of the air leave the bubble. The point here is that adoption 'events' are determining the valuation, not the technology itself.

SD

For example gold and human beings coexisted on this planet a long time before gold was used as money.  What happened? Gold didn't change, but all of the sudden it had value where it previously did not.
Title: Re: Cryptocurrencies
Post by: SharperDingaan on January 09, 2018, 08:30:07 AM
"So you should ask yourself, what has changed to cryptos in the span of 12 months to justify such move?"

Four major things changed for Bitcoin during 2017:
1) Attained critical mass. Coming together of enough early adopters outside of the IT/developer community, for social media to take it main stream. 12 months ago it was just a 'thing', now everyone wants to know how to buy/sell them.
2) 'Asset' recognition. Individually, we may be positive that Bitcoin is a 'tulip'; but if the folks that matter declare Bitcoin to be an 'asset', our opinion really doesn't matter.
3) It became credible in NA. Bitcoin was the example, that moved business conversation onto the blockchain technology that runs it. 
4) It became mainstream. R3 Corda ledger tests were successful, providing the pipes to enable financial regulators/institutions to 'safely' participate in crypto currency investment. The outcome has been derivatives on Bitcoin, that enable institutions to control risk.

Given the large quantity of really bad ICO's issued in 2017, & the bad taste they are leaving; most would expect 2018 to see some of the air leave the bubble. The point here is that adoption 'events' are determining the valuation, not the technology itself.

SD

For example gold and human beings coexisted on this planet a long time before gold was used as money.  What happened? Gold didn't change, but all of the sudden it had value where it previously did not.

Technology (long distance travel, sail, etc.) brought locals into trading contact with 'outsiders'. For locals the volume of trade changed the 'store of value' from the light and transportable sea shells & beetles - to the gold that outsiders wanted. Adoption 'events' changed the store of value; not much different from the Bitcoin versus Gold substitution argument we hear of today. We just don't want to hear it.

SD

 
Title: Re: Cryptocurrencies
Post by: rkbabang on January 09, 2018, 09:24:20 AM
Well, that didn’t take long.

Jamie Dimon says he regrets calling bitcoin a fraud and believes in the technology behind it
https://www.cnbc.com/2018/01/09/jamie-dimon-says-he-regrets-calling-bitcoin-a-fraud.html
Title: Re: Cryptocurrencies
Post by: rb on January 09, 2018, 11:56:01 AM
https://www.reuters.com/article/us-eastman-kodak-stocks/eastman-kodak-unveils-cryptocurrency-stock-doubles-idUSKBN1EY2AD

Berkshire should create GECKOCoin, become the first trillion dollar company.
Title: Re: Cryptocurrencies
Post by: Liberty on January 09, 2018, 12:48:58 PM
Meanwhile...

https://www.theverge.com/2018/1/9/16869998/kodak-kodakcoin-blockchain-platform-ethereum-ledger-stock-price

This is fine.
Title: Re: Cryptocurrencies
Post by: roughlyright on January 09, 2018, 08:05:11 PM
"So you should ask yourself, what has changed to cryptos in the span of 12 months to justify such move?"

Four major things changed for Bitcoin during 2017:
1) Attained critical mass. Coming together of enough early adopters outside of the IT/developer community, for social media to take it main stream. 12 months ago it was just a 'thing', now everyone wants to know how to buy/sell them.
2) 'Asset' recognition. Individually, we may be positive that Bitcoin is a 'tulip'; but if the folks that matter declare Bitcoin to be an 'asset', our opinion really doesn't matter.
3) It became credible in NA. Bitcoin was the example, that moved business conversation onto the blockchain technology that runs it. 
4) It became mainstream. R3 Corda ledger tests were successful, providing the pipes to enable financial regulators/institutions to 'safely' participate in crypto currency investment. The outcome has been derivatives on Bitcoin, that enable institutions to control risk.

Given the large quantity of really bad ICO's issued in 2017, & the bad taste they are leaving; most would expect 2018 to see some of the air leave the bubble. The point here is that adoption 'events' are determining the valuation, not the technology itself.

SD

For example gold and human beings coexisted on this planet a long time before gold was used as money.  What happened? Gold didn't change, but all of the sudden it had value where it previously did not.

very well said Rkbabang!
Title: Re: Cryptocurrencies
Post by: Liberty on January 10, 2018, 12:40:11 PM
https://twitter.com/matt_levine/status/951187218621747200
Title: Re: Cryptocurrencies
Post by: Liberty on January 12, 2018, 12:21:44 PM
https://www.bloomberg.com/news/articles/2018-01-12/crypto-exchange-kraken-goes-dark-and-user-anxiety-surges
Title: Re: Cryptocurrencies
Post by: rkbabang on January 12, 2018, 12:48:54 PM
https://www.bloomberg.com/news/articles/2018-01-12/crypto-exchange-kraken-goes-dark-and-user-anxiety-surges

Considering they went down for scheduled maintenance and haven't come back up, I'm assuming that they haven't been hacked (you don't usually schedule being hacked) and are just having unexpected technical difficulties with their upgrades.  But as I've said a bunch of times by now: Don't leave any balance in an exchange.  If you must use an exchange, make a deposit, make a trade, make a withdrawal.  The whole process should take about 10-30min depending on the coins involved.  Get in then get back out as quickly as you can.
Title: Re: Cryptocurrencies
Post by: gary17 on January 12, 2018, 01:45:47 PM
rkbabang- It seems hard to avoid exchanges outright as to buy a crypto one must use an exchange... right?   The only other option I know of is a crypto ATM.

i have been reading lots and learning and playing around with a tiny amount just so i know what's going on.  still a big philosophical thing for me to see how the government couldn't just come in and say no more crypto...   trump could just tweet tomorrow he's going to outlaw crypto and this thing could free fall IMO....  hmmm  i haven't been convinced how it could be completely independent of government.
Title: Re: Cryptocurrencies
Post by: clutch on January 13, 2018, 05:01:04 AM
https://www.bloomberg.com/news/articles/2018-01-12/crypto-exchange-kraken-goes-dark-and-user-anxiety-surges

Considering they went down for scheduled maintenance and haven't come back up, I'm assuming that they haven't been hacked (you don't usually schedule being hacked) and are just having unexpected technical difficulties with their upgrades.  But as I've said a bunch of times by now: Don't leave any balance in an exchange.  If you must use an exchange, make a deposit, make a trade, make a withdrawal.  The whole process should take about 10-30min depending on the coins involved.  Get in then get back out as quickly as you can.

https://www.google.ca/amp/s/blog.kraken.com/post/1449/kraken-returns-with-free-trading/amp/
Title: Re: Cryptocurrencies
Post by: UNF2007 on January 14, 2018, 09:03:42 AM
http://www.businessinsider.com/buying-bitcoin-from-las-vegas-atm-2018-1

Just read this article, is this true about the transaction fee being 40-45$ now? If so it seems absurd anyone would use this as a medium of exchange for small transactions.
Title: Re: Cryptocurrencies
Post by: Gamecock-YT on January 14, 2018, 02:21:14 PM
https://www.nytimes.com/2018/01/13/style/bitcoin-millionaires.html

At a jazz bar a few days later, I run into Mr. Fickel’s personal trainer, Alan Chen, who is now running in this crypto circle. Mr. Fickel had convinced Mr. Chen to put his savings into Ethereum.

“I’m retired, man,” Mr. Chen said. “I’m moving to L.A. next week. I got a penthouse on Marina del Rey.”

“Don’t say I’m retired,” he added. “I’m going into business now. I’m going to use blockchain to help personal trainers.”


nuts
Title: Re: Cryptocurrencies
Post by: UNF2007 on January 15, 2018, 09:03:05 AM
Read through that article, it's interesting they say 95% of the crypto money is owned by 5% of the 13 million investors. Very top heavy. The guy talking about ICO's ( initial coin offering) was also crazy, people inventing new cryptocurrency and then selling it to the public, taking the money and cashing out. In my mind they are basically bypassing the valuation problem, by calling stuff currency. If you were trying to IPO a business, that had no assetts, cash flow etc. that would be a tough sell, but instead of shares call it xxxcoin and your golden.

https://www.nytimes.com/2018/01/13/style/bitcoin-millionaires.html

At a jazz bar a few days later, I run into Mr. Fickel’s personal trainer, Alan Chen, who is now running in this crypto circle. Mr. Fickel had convinced Mr. Chen to put his savings into Ethereum.

“I’m retired, man,” Mr. Chen said. “I’m moving to L.A. next week. I got a penthouse on Marina del Rey.”

“Don’t say I’m retired,” he added. “I’m going into business now. I’m going to use blockchain to help personal trainers.”


nuts
Title: Re: Cryptocurrencies
Post by: Liberty on January 15, 2018, 11:30:09 AM
https://techcrunch.com/2018/01/15/researchers-finds-that-one-person-likely-drove-bitcoin-from-150-to-1000/

https://news.ycombinator.com/item?id=16152050
Title: Re: Cryptocurrencies
Post by: Spekulatius on January 15, 2018, 02:54:17 PM
https://www.nytimes.com/2018/01/13/style/bitcoin-millionaires.html

At a jazz bar a few days later, I run into Mr. Fickel’s personal trainer, Alan Chen, who is now running in this crypto circle. Mr. Fickel had convinced Mr. Chen to put his savings into Ethereum.

“I’m retired, man,” Mr. Chen said. “I’m moving to L.A. next week. I got a penthouse on Marina del Rey.”

“Don’t say I’m retired,” he added. “I’m going into business now. I’m going to use blockchain to help personal trainers.”


nuts

Total insanity. The investors in dot com companies 18 years ago were like coupon clippers compared to this crowd.
Title: Re: Cryptocurrencies
Post by: Liberty on January 16, 2018, 04:28:04 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  ???
Title: Re: Cryptocurrencies
Post by: rkbabang on January 16, 2018, 05:54:52 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.
Title: Re: Cryptocurrencies
Post by: SharperDingaan on January 16, 2018, 06:23:40 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
Title: Re: Cryptocurrencies
Post by: Liberty on January 17, 2018, 03:45:00 AM
https://techcrunch.com/2018/01/16/bitconnect-which-has-been-accused-of-running-a-ponzi-scheme-shuts-down/amp/

https://twitter.com/John_Hempton/status/953476588103983104
Title: Re: Cryptocurrencies
Post by: Liberty on January 17, 2018, 05:54:30 AM
This is worth listening to:

http://www.investorfieldguide.com/preston/
Title: Re: Cryptocurrencies
Post by: emily on January 17, 2018, 01:41:41 PM
Is this a good time to buy Bitcoin? What price would you say? Do you have a preference of Bitcoin versus Ether?
Title: Re: Cryptocurrencies
Post by: emily on January 17, 2018, 02:05:27 PM
I hear that one bitcoin can be broken down into million pieces. The mere reason bitcoin had value was its limited production of 21 million bitcoin. Do you still believe in bitcoin? or Ethernuem? Most skeptics say that you do not own a part of company when you own bitcoin like you do when you purchase a stock and neither do you own anything physical like gold. Considering these, which cryptocurrency has most potential? Are there any blockchain technology stocks that you would recommend as blockchain technology is what is real.
Title: Re: Cryptocurrencies
Post by: SharperDingaan on January 17, 2018, 03:09:47 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
Title: Re: Cryptocurrencies
Post by: rkbabang on January 18, 2018, 06:44:44 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

+1 Anyone who hasn't read that paper yet, do not invest in any crypto assets until you have read it.

BTW. I bought some more Bitcoin yesterday.
Title: Re: Cryptocurrencies
Post by: mrholty 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).
Title: Re: Cryptocurrencies
Post by: JimBowerman 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...
Title: Re: Cryptocurrencies
Post by: rkbabang 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.
Title: Re: Cryptocurrencies
Post by: sjh 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. Let’s 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.
Title: Re: Cryptocurrencies
Post by: emily 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
Title: Re: Cryptocurrencies
Post by: emily on January 18, 2018, 06:01:09 PM
WSJ:  SEC Pours Cold Water on Prospect of Bitcoin ETFs
Title: Re: Cryptocurrencies
Post by: rkbabang 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.
Title: Re: Cryptocurrencies
Post by: SharperDingaan 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

Title: Re: Cryptocurrencies
Post by: KCLarkin 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.
Title: Re: Cryptocurrencies
Post by: wachtwoord 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.
Title: Re: Cryptocurrencies
Post by: KCLarkin on January 19, 2018, 08:12:40 AM
Exactly how I feel about fiat currency.

I don't think many smart people are deluded by fiat currency. Most know that one of the safest currencies, US Dollar, has lost 90% of its value over the last 100 years. Many others have lost 100%.
Title: Re: Cryptocurrencies
Post by: vinod1 on January 19, 2018, 08:22:34 AM
A week ago, I was helping a relative to come home after surgery. He was given general anesthesia for the procedure. As I was picking him up, all he can talk about is crypto-currencies. It seems he was talking to the nurses about it as well while is is half awake. The entire 30 minute drive home is talk about Ripple and that it has a very good potential and that I should look into it.

My relative has shown the least bit of interest in investing over the last several years. I would implore him to get started with investments and he has never shown any interest. Now his wife tells me that instead of playing with his less than year old baby, he would be looking at all these charts about Ripple on his computer.

As I took a quick look, crypto-currencies to me is close to a certainty as one can get in investing, that it is a bubble.

Crypto-currencies are of course wonderful inventions and are of great use - for drug dealers and terrorists.

All it takes is one terrorist attack financed using crypto-currencies for governments to crack down hard on these.

Vinod
Title: Re: Cryptocurrencies
Post by: KCLarkin on January 19, 2018, 08:32:48 AM
Crypto-currencies are of course wonderful inventions and are of great use - for drug dealers and terrorists.

This is really the bull case. If the economy for criminals, terrorists, tax evaders, and money launderers is large enough (and it is), some of these tokens might actually have value as currencies. But which token will become the fiat currency of the underworld? There is a pretty good chance it hasn't even been invented yet. Are we still at the Napster stage of digital currencies?
Title: Re: Cryptocurrencies
Post by: wachtwoord on January 19, 2018, 09:29:19 AM
Exactly how I feel about fiat currency.

I don't think many smart people are deluded by fiat currency. Most know that one of the safest currencies, US Dollar, has lost 90% of its value over the last 100 years. Many others have lost 100%.

I think you're very wrong on that one. Either that or you are far far stricter in your use of the term 'smart' than the generally accepted use of the term.
Title: Re: Cryptocurrencies
Post by: SharperDingaan on January 19, 2018, 09:31:07 AM
Crypto-currencies are of course wonderful inventions and are of great use - for drug dealers and terrorists.

This is really the bull case. If the economy for criminals, terrorists, tax evaders, and money launderers is large enough (and it is), some of these tokens might actually have value as currencies. But which token will become the fiat currency of the underworld? There is a pretty good chance it hasn't even been invented yet. Are we still at the Napster stage of digital currencies?

Amusingly they have the same problem as you and I.
You and I know that the fiat currency in our hand is devaluing all the time - because more bills are being printed. The underground can only buy certain currencies, but if the price of those currencies keeps falling over time - their holdings become worth less and less. 'Devaluation' by another means.

SD
 
Title: Re: Cryptocurrencies
Post by: KCLarkin on January 19, 2018, 09:57:57 AM
I think you're very wrong on that one. Either that or you are far far stricter in your use of the term 'smart' than the generally accepted use of the term.

Anyone I'd consider 'smart' economically would surely be aware of hyperinflation in Germany, Zimbabwe, and Venezuela. Let's use The Economist as the dividing line for "smart". If you've ever subscribed to The Economist (or read it cover-to-cover regularly), you are likely aware of the dangers of fiat currency.

BTW, any 'smart' investor should read this article:
http://fortune.com/2011/06/12/buffett-how-inflation-swindles-the-equity-investor-fortune-classics-1977/
Title: Re: Cryptocurrencies
Post by: rkbabang on January 19, 2018, 10:15:57 AM
Crypto-currencies are of course wonderful inventions and are of great use - for drug dealers and terrorists.

This is really the bull case. If the economy for criminals, terrorists, tax evaders, and money launderers is large enough (and it is), some of these tokens might actually have value as currencies. But which token will become the fiat currency of the underworld? There is a pretty good chance it hasn't even been invented yet. Are we still at the Napster stage of digital currencies?

Yes, way back before that damn Satoshi published his paper criminals, terrorist, tax evaders, and money launderers didn't exist.  There was just no way for them to apply their craft and trade.   Obviously I'm joking, so don't worry, I'm sure the majority of criminals, terrorists, tax evaders, and money launderers will continue using the USD just as they always have for a long time to come.
Title: Re: Cryptocurrencies
Post by: hobbit on January 19, 2018, 11:05:21 AM
what is stopping anyone from launching 100s of bitcoin like currencies..?
Title: Re: Cryptocurrencies
Post by: KCLarkin on January 19, 2018, 11:15:24 AM
Yes, way back before that damn Satoshi published his paper criminals, terrorist, tax evaders, and money launderers didn't exist.  There was just no way for them to apply their craft and trade.   Obviously I'm joking, so don't worry, I'm sure the majority of criminals, terrorists, tax evaders, and money launderers will continue using the USD just as they always have for a long time to come.

I said this was the BULL CASE. I'm not saying cryptocurrencies will increase crime (though there are some crimes like ransomware that would be pretty tricky). But if you look at legitimate reasons why someone would want to use Bitcoin rather than USD as a currency, they are almost all illegal (for example evading capital controls). Getting back to my original post, this is the libertarian fever dream. If you have a decentralized currency, the government loses its power.

Anyways, this will be the last time I post about "crypto" and hopefully the last time I ever think about it.
Title: Re: Cryptocurrencies
Post by: Liberty on January 19, 2018, 11:19:56 AM
https://www.theguardian.com/technology/2018/jan/18/bitcoin-fluctuations-ransomware-cybercrminals-malware-developers
Title: Re: Cryptocurrencies
Post by: Aberhound on January 19, 2018, 11:43:10 AM
Crypto-currencies are of course wonderful inventions and are of great use - for drug dealers and terrorists.

This is really the bull case. If the economy for criminals, terrorists, tax evaders, and money launderers is large enough (and it is), some of these tokens might actually have value as currencies. But which token will become the fiat currency of the underworld? There is a pretty good chance it hasn't even been invented yet. Are we still at the Napster stage of digital currencies?
This is why I don't think there will be a Fedcoin. If there is a Fedcoin then politics means that eventually the government drug dealer and terrorism ops will come out just like we are now finding out about ISIS. I think instead there will be private cryptos, some of them set up by intelligence agencies or their friends. It is part of the trend of changing from the public wave to the private wave. When computers record everything it is no longer possible to have big government with big secrets. It will be much safer to have small government and big secrets hidden among millions of private companies.
Title: Re: Cryptocurrencies
Post by: SharperDingaan on January 19, 2018, 12:41:18 PM
Crypto-currencies are of course wonderful inventions and are of great use - for drug dealers and terrorists.

This is really the bull case. If the economy for criminals, terrorists, tax evaders, and money launderers is large enough (and it is), some of these tokens might actually have value as currencies. But which token will become the fiat currency of the underworld? There is a pretty good chance it hasn't even been invented yet. Are we still at the Napster stage of digital currencies?
This is why I don't think there will be a Fedcoin. If there is a Fedcoin then politics means that eventually the government drug dealer and terrorism ops will come out just like we are now finding out about ISIS. I think instead there will be private cryptos, some of them set up by intelligence agencies or their friends. It is part of the trend of changing from the public wave to the private wave. When computers record everything it is no longer possible to have big government with big secrets. It will be much safer to have small government and big secrets hidden among millions of private companies.

The beauty of the Bitcoin is that nobody could possibly have come up with a better 'store of value' for the underground economy; and the more distrusted 'big brother' is, the better this works! (the libertarian dream). The more 'mainstream' it becomes, the more valuable it becomes as well - as the greater variety and quantity of 'scum' produce network effects. http://www.starwars.com/video/my-kind-of-scum.

The more obvious 'containment' is the creation of ONE single direct CB competitor to Bitcoin, that 'rules them all' (other private currencies).
Fearless and inventive!

SD
 
Title: Re: Cryptocurrencies
Post by: clutch on January 20, 2018, 08:16:10 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.

To crypto bulls, you probably look like this:
https://www.youtube.com/watch?v=UlJku_CSyNg

(i'm joking here; take it lightly)
Title: Re: Cryptocurrencies
Post by: rkbabang on January 20, 2018, 10:46:01 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.

To crypto bulls, you probably look like this:
https://www.youtube.com/watch?v=UlJku_CSyNg

(i'm joking here; take it lightly)

I would think that is more a representation of people who still don’t get it.

Funny story.  My son just build his own gaming computer (an i7 7700k with a 1070 ti video card) and I was telling him last night that he should try to mine some altcoins and earn some of his money back.  My wife said, “so if he starts mining, how does he get his check?”.
Title: Re: Cryptocurrencies
Post by: roughlyright on January 20, 2018, 10:54:40 AM
RKbabang,

  What altcoins are you bullish on? do you care to share your thesis on the coin which is your highest conviction idea?
Title: Re: Cryptocurrencies
Post by: RichardGibbons on January 20, 2018, 11:18:50 AM
My son just build his own gaming computer (an i7 7700k with a 1070 ti video card) and I was telling him last night that he should try to mine some altcoins and earn some of his money back.  My wife said, “so if he starts mining, how does he get his check?”.

FWIW, I am mining zcash with a 1070, and recently I've been making in the region of $3-5 per day.  At this instant, it's $3.54 per day.  Your son's 1070 TI should be slightly better than that. 

It's not going to make anyone wealthy, but it's pretty fun.

Title: Re: Cryptocurrencies
Post by: rb on January 20, 2018, 11:59:53 AM
I would think that is more a representation of people who still don’t get it.

Funny story.  My son just build his own gaming computer (an i7 7700k with a 1070 ti video card) and I was telling him last night that he should try to mine some altcoins and earn some of his money back.  My wife said, “so if he starts mining, how does he get his check?”.
Next time get a Xeon and save yourself some money.
Title: Re: Cryptocurrencies
Post by: rkbabang on January 20, 2018, 04:53:20 PM
My son just build his own gaming computer (an i7 7700k with a 1070 ti video card) and I was telling him last night that he should try to mine some altcoins and earn some of his money back.  My wife said, “so if he starts mining, how does he get his check?”.

FWIW, I am mining zcash with a 1070, and recently I've been making in the region of $3-5 per day.  At this instant, it's $3.54 per day.  Your son's 1070 TI should be slightly better than that. 

It's not going to make anyone wealthy, but it's pretty fun.

We were looking into Zcash, Monero, Ether, etc but he decided to try this https://www.nicehash.com/cpu-gpu-mining

They use both your GPU and CPU and have you mine whatever is most profitable at the moment with each of them. They are about 1% more expensive than most pools, but you should make up the difference in higher earnings. It says that he is earning between $5.50 and $6.00 per day right now (it changes from second to second). Yes I know they were hacked a month ago, but I figure if you cash out once in a while there will never be much in there to loose. And they changed their setup so that every transfer out of their system is human approved so that should mitigate someone hacking in and wiping out all the accounts again.
Title: Re: Cryptocurrencies
Post by: Cardboard on January 21, 2018, 07:31:42 AM
"It says that he is earning between $5.50 and $6.00 per day right now (it changes from second to second). Yes I know they were hacked a month ago, but I figure if you cash out once in a while there will never be much in there to loose."

You cash out hmmm?

Sounds like a heck of a store of value. As soon as you make a few dollars, you want to leave asap because you are afraid of hacks. Then back to good old fiat despite its depreciating value.

I can only imagine what will happen to crypto values in the next crash when people rush to get their hands on liquid. They were selling their gold in the Great Recession to access liquidity...

Cardboard
Title: Re: Cryptocurrencies
Post by: clutch on January 21, 2018, 07:55:17 AM
"It says that he is earning between $5.50 and $6.00 per day right now (it changes from second to second). Yes I know they were hacked a month ago, but I figure if you cash out once in a while there will never be much in there to loose."

You cash out hmmm?

Sounds like a heck of a store of value. As soon as you make a few dollars, you want to leave asap because you are afraid of hacks. Then back to good old fiat despite its depreciating value.

I can only imagine what will happen to crypto values in the next crash when people rush to get their hands on liquid. They were selling their gold in the Great Recession to access liquidity...

Cardboard

So then gold isn't a store of value?
Title: Re: Cryptocurrencies
Post by: wachtwoord on January 21, 2018, 08:53:19 AM
Lol @Cardboard. All he said is he wants to withdraw from a 3rd party holding his money because they got hacked lost month.

Look, you don't have to be a fan but continuing to share your opinion on something you very obviously do not understand (or wish to understand) derails a legitimate thread.
Title: Re: Cryptocurrencies
Post by: RichardGibbons on January 21, 2018, 09:42:06 AM
We were looking into Zcash, Monero, Ether, etc but he decided to try this https://www.nicehash.com/cpu-gpu-mining

Interesting. Based on your thoughts, I may give it a shot too.
Title: Re: Cryptocurrencies
Post by: SharperDingaan on January 21, 2018, 10:42:07 AM
We were looking into Zcash, Monero, Ether, etc but he decided to try this https://www.nicehash.com/cpu-gpu-mining

Interesting. Based on your thoughts, I may give it a shot too.

Just be mindful that today - much of the reason for selling you a rig; is because the seller expects to make MORE from you - than he would had he simply kept the rig, & mined for himself. It's OK for a hobby and experimentation, but it's not what it seems. Obviously, not a popular view among many!

At the aggregate:
1) Only the fastest miner gets paid. New rigs are always faster than yours; meaning that over time you progressively earn less, and more & more of it is in less desirable token. Rigs have a short economic life.
2) Appearance of distributed security. The more rigs sold outside of the 'tech' community, the more diverse the aggregate mining network 'appears' to be, and the more real distributed security 'seems' to be. Problem is that its a 70% layer of very fast computers in mining consortia, and a 30% layer of much slower computers spread throughout the world, with hash rate controlled by degree of hash complexity. A small drop in complexity, and the faster computers win - erasing distributed security.
3) Capital cost downloading. Every utility downloads the capital cost of producing its product onto its customers, most often by the customer paying a 'debt service' charge on their bill every month. An alternative is to simply have the customer build their own generation facility (take on the capital cost) and buy their net output. See any difference between this and a mining rig?

SD

Title: Re: Cryptocurrencies
Post by: rkbabang on January 21, 2018, 11:05:19 AM
Lol @Cardboard. All he said is he wants to withdraw from a 3rd party holding his money because they got hacked lost month.

Look, you don't have to be a fan but continuing to share your opinion on something you very obviously do not understand (or wish to understand) derails a legitimate thread.

Thanks wachtwoord for saving me the trouble. Maybe I should have said ”coin-out”.
Title: Re: Cryptocurrencies
Post by: NeverLoseMoney on January 21, 2018, 11:16:49 AM
Are any of the crypto bulls here concerned with Tether (USDT)? Especially the "printing" of new USDT and some indications that the main people behind it are also principals of the Bitfinex exchange.

Apparently major USDT printing occurred after bitcoin crashed to $10k and some say those were being used to prop-up the bitcoin price. Supposedly USDT are backed by US dollars in a bank account (in an obscure Polish bank if I recall correctly), but I'm very skeptical about that.

I thought this was an interesting video about this issue:
https://www.youtube.com/watch?time_continue=2&v=MwKYbT9MoPE
Title: Re: Cryptocurrencies
Post by: rkbabang on January 21, 2018, 12:04:25 PM
Are any of the crypto bulls here concerned with Tether (USDT)? Especially the "printing" of new USDT and some indications that the main people behind it are also principals of the Bitfinex exchange.

Apparently major USDT printing occurred after bitcoin crashed to $10k and some say those were being used to prop-up the bitcoin price. Supposedly USDT are backed by US dollars in a bank account (in an obscure Polish bank if I recall correctly), but I'm very skeptical about that.

I thought this was an interesting video about this issue:
https://www.youtube.com/watch?time_continue=2&v=MwKYbT9MoPE

It concerns me.  But I put it in the same category as MtGox.  A short term problem that won’t matter in 10 years.  I’m in for the long haul I’m not all that worried about the little problems inbetween.  If it all blows up the panic will create a nice buying opportunity. 
Title: Re: Cryptocurrencies
Post by: rkbabang on January 21, 2018, 12:08:26 PM
We were looking into Zcash, Monero, Ether, etc but he decided to try this https://www.nicehash.com/cpu-gpu-mining

Interesting. Based on your thoughts, I may give it a shot too.

Just be mindful that today - much of the reason for selling you a rig; is because the seller expects to make MORE from you - than he would had he simply kept the rig, & mined for himself. It's OK for a hobby and experimentation, but it's not what it seems. Obviously, not a popular view among many!

At the aggregate:
1) Only the fastest miner gets paid. New rigs are always faster than yours; meaning that over time you progressively earn less, and more & more of it is in less desirable token. Rigs have a short economic life.
2) Appearance of distributed security. The more rigs sold outside of the 'tech' community, the more diverse the aggregate mining network 'appears' to be, and the more real distributed security 'seems' to be. Problem is that its a 70% layer of very fast computers in mining consortia, and a 30% layer of much slower computers spread throughout the world, with hash rate controlled by degree of hash complexity. A small drop in complexity, and the faster computers win - erasing distributed security.
3) Capital cost downloading. Every utility downloads the capital cost of producing its product onto its customers, most often by the customer paying a 'debt service' charge on their bill every month. An alternative is to simply have the customer build their own generation facility (take on the capital cost) and buy their net output. See any difference between this and a mining rig?

SD

I agree. I think it would be better to just buy $500 worth of bitcoin rather than go out and buy a $500 video card to start mining. But if you already have the video card like my son does, why not mine whenever it is otherwise idle.
Title: Re: Cryptocurrencies
Post by: SharperDingaan on January 21, 2018, 01:44:27 PM
Are any of the crypto bulls here concerned with Tether (USDT)? Especially the "printing" of new USDT and some indications that the main people behind it are also principals of the Bitfinex exchange.

Apparently major USDT printing occurred after bitcoin crashed to $10k and some say those were being used to prop-up the bitcoin price. Supposedly USDT are backed by US dollars in a bank account (in an obscure Polish bank if I recall correctly), but I'm very skeptical about that.

I thought this was an interesting video about this issue:
https://www.youtube.com/watch?time_continue=2&v=MwKYbT9MoPE

USDT isn't backed by anything - if it were it would be fully exchangeable into fiat USD, on multiple exchanges.
The fact that they have to give you a token (USDT) that is supposed to be the same as a fiat USD, versus the actual fiat USD, is hard evidence of that. You can give me fiat USD for a token, but you're never getting your fiat USD back - just another token.
A matryoshka doll.

SD
 
Title: Re: Cryptocurrencies
Post by: wachtwoord on January 21, 2018, 01:55:25 PM
Are any of the crypto bulls here concerned with Tether (USDT)? Especially the "printing" of new USDT and some indications that the main people behind it are also principals of the Bitfinex exchange.

Apparently major USDT printing occurred after bitcoin crashed to $10k and some say those were being used to prop-up the bitcoin price. Supposedly USDT are backed by US dollars in a bank account (in an obscure Polish bank if I recall correctly), but I'm very skeptical about that.

I thought this was an interesting video about this issue:
https://www.youtube.com/watch?time_continue=2&v=MwKYbT9MoPE

Why would I be concerned? Don't touch Tether with a 5-foot pole and you'll be fine (it's 100% a scam).
Title: Re: Cryptocurrencies
Post by: NeverLoseMoney on January 21, 2018, 02:54:59 PM
If it goes to zero, any exchange with exposure to Tether/Bitfinex will suffer major fallout as well. It gives authorities a valid reason to freeze exchange bank accounts. It's going to cause a huge shitstorm. I don't think it's going to be a small, isolated event.

Even when you're a massive crypto bull, I don't see why you would want exposure to any coin before Tether blows up (provided you think it's a scam of course). Everything will be a lot cheaper after.
Title: Re: Cryptocurrencies
Post by: rkbabang on January 21, 2018, 02:58:05 PM
Are any of the crypto bulls here concerned with Tether (USDT)? Especially the "printing" of new USDT and some indications that the main people behind it are also principals of the Bitfinex exchange.

Apparently major USDT printing occurred after bitcoin crashed to $10k and some say those were being used to prop-up the bitcoin price. Supposedly USDT are backed by US dollars in a bank account (in an obscure Polish bank if I recall correctly), but I'm very skeptical about that.

I thought this was an interesting video about this issue:
https://www.youtube.com/watch?time_continue=2&v=MwKYbT9MoPE

Why would I be concerned? Don't touch Tether with a 5-foot pole and you'll be fine (it's 100% a scam).

The theory is that they are “printing” thether out of nothing and using it to buy bitcoin, thus inflating the price of bitcoin far above its actual demand. I’m not sure how much of the bitcoin demand is tether related, but long term it means nothing either way.
Title: Re: Cryptocurrencies
Post by: sjh on January 21, 2018, 03:24:28 PM
If it goes to zero, any exchange with exposure to Tether/Bitfinex will suffer major fallout as well. It gives authorities a valid reason to freeze exchange bank accounts. It's going to cause a huge shitstorm. I don't think it's going to be a small, isolated event.

Even when you're a massive crypto bull, I don't see why you would want exposure to any coin before Tether blows up (provided you think it's a scam of course). Everything will be a lot cheaper after.

Very good point. I changed my opinion about the mid term prospects of the crypto market after going to a few blockchain meetups. Just lots of irrational behavior and reasoning out there.

There are so many parallels to the dotcom bubble, watched this today and had a deja-vu.

https://youtu.be/FTvfshr4tMw

Title: Re: Cryptocurrencies
Post by: Cardboard on January 21, 2018, 04:09:49 PM
"Look, you don't have to be a fan but continuing to share your opinion on something you very obviously do not understand (or wish to understand) derails a legitimate thread."

You are right, it would be a shame to derail a thread by some who have outsmarted Buffett, Munger, Dimon, Shiller and so many others... LOL!

So we will let you live your mania. Let you enjoy this Libertarian euphoria over magnetic 0´s and 1's sitting on some server.

Cardboard
Title: Re: Cryptocurrencies
Post by: wachtwoord on January 21, 2018, 04:30:22 PM
Are any of the crypto bulls here concerned with Tether (USDT)? Especially the "printing" of new USDT and some indications that the main people behind it are also principals of the Bitfinex exchange.

Apparently major USDT printing occurred after bitcoin crashed to $10k and some say those were being used to prop-up the bitcoin price. Supposedly USDT are backed by US dollars in a bank account (in an obscure Polish bank if I recall correctly), but I'm very skeptical about that.

I thought this was an interesting video about this issue:
https://www.youtube.com/watch?time_continue=2&v=MwKYbT9MoPE

Why would I be concerned? Don't touch Tether with a 5-foot pole and you'll be fine (it's 100% a scam).

The theory is that they are “printing” thether out of nothing and using it to buy bitcoin, thus inflating the price of bitcoin far above its actual demand. I’m not sure how much of the bitcoin demand is tether related, but long term it means nothing either way.

That's only the Thether Bitcoin price. Not USD/BTC. It has no effect other than some fools parting with their money.
Title: Re: Cryptocurrencies
Post by: wachtwoord on January 21, 2018, 04:31:49 PM
"Look, you don't have to be a fan but continuing to share your opinion on something you very obviously do not understand (or wish to understand) derails a legitimate thread."

You are right, it would be a shame to derail a thread by some who have outsmarted Buffett, Munger, Dimon, Shiller and so many others... LOL!

So we will let you live your mania. Let you enjoy this Libertarian euphoria over magnetic 0´s and 1's sitting on some server.

Cardboard

Some server?  ::) This is what I meant with talking about something you don't comprehend in the slightest.
Title: Re: Cryptocurrencies
Post by: Liberty on January 21, 2018, 06:37:14 PM
https://arstechnica.com/information-technology/2018/01/in-the-wild-malware-preys-on-computers-dedicated-to-mining-cryptocurrency/
Title: Re: Cryptocurrencies
Post by: SnarkyPuppy on January 21, 2018, 07:57:53 PM
"Look, you don't have to be a fan but continuing to share your opinion on something you very obviously do not understand (or wish to understand) derails a legitimate thread."

You are right, it would be a shame to derail a thread by some who have outsmarted Buffett, Munger, Dimon, Shiller and so many others... LOL!

So we will let you live your mania. Let you enjoy this Libertarian euphoria over magnetic 0´s and 1's sitting on some server.

Cardboard

If I made a post in any other thread that was this factually wrong about a company or business I would be called out.   No reason those minimum standards shouldn't apply here.  It is very obvious you have not even the slightest basic understand of how this works.  Either do the work and spend the time to actually be able to have an informed opinion or stop posting meme's in these threads.

To be clear - this is totally independent on whether or not it actually has value.   But you can't make the statement it doesn't have value while making demonstrably ignorant statements like this.     
Title: Re: Cryptocurrencies
Post by: RichardGibbons on January 21, 2018, 10:58:03 PM
Just be mindful that today - much of the reason for selling you a rig; is because the seller expects to make MORE from you - than he would had he simply kept the rig, & mined for himself. It's OK for a hobby and experimentation, but it's not what it seems. Obviously, not a popular view among many!

Yeah, this is a good warning, SD.  In my case, I bought a PC in September because my old one was 7 years old, slow, and getting BSOD every few days.  I got a better graphics card than I would have otherwise--maybe an incremental cost of $300--so I could mine effectively. Normally my computer is on whenever I'm awake, so the incremental cost of electricity is low.

I don't know if it was a good decision, but seemed like a reasonable gamble in that $300 isn't that much money to me and I've enjoyed doing it.  Economically, it has paid off, returning about $600 so far. Of course, that's just an outcome that says little about whether the decision to buy the better card had a positive expected return.  Even if one happens to win at roulette, it doesn't imply it was a smart decision to play.
Title: Re: Cryptocurrencies
Post by: clutch on January 22, 2018, 04:26:10 AM
"Look, you don't have to be a fan but continuing to share your opinion on something you very obviously do not understand (or wish to understand) derails a legitimate thread."

You are right, it would be a shame to derail a thread by some who have outsmarted Buffett, Munger, Dimon, Shiller and so many others... LOL!

So we will let you live your mania. Let you enjoy this Libertarian euphoria over magnetic 0´s and 1's sitting on some server electrons, protons, and neutrons arranged in some particular manner.

Cardboard
Title: Re: Cryptocurrencies
Post by: writser on January 22, 2018, 05:03:39 AM
magnetic 0´s and 1's sitting on some server electrons, protons, and neutrons arranged in some particular manner.

Though frankly you could also describe Berkshire that way.
Title: Re: Cryptocurrencies
Post by: clutch on January 22, 2018, 05:18:39 AM
magnetic 0´s and 1's sitting on some server electrons, protons, and neutrons arranged in some particular manner.

Though frankly you could also describe Berkshire that way.

Hence the fallacy of dismissing the value of any entity based on it's physical make-up.
Title: Re: Cryptocurrencies
Post by: rkbabang on January 22, 2018, 05:23:02 AM
magnetic 0´s and 1's sitting on some server electrons, protons, and neutrons arranged in some particular manner.

Though frankly you could also describe Berkshire that way.

Hence the fallacy of dismissing the value of any entity based on it's physical make-up.

All fermions matter!
Title: Re: Cryptocurrencies
Post by: Liberty on January 22, 2018, 05:53:32 AM
It's quarks all the way down.
Title: Re: Cryptocurrencies
Post by: DeepSouth on January 22, 2018, 06:07:07 AM
"Look, you don't have to be a fan but continuing to share your opinion on something you very obviously do not understand (or wish to understand) derails a legitimate thread."

You are right, it would be a shame to derail a thread by some who have outsmarted Buffett, Munger, Dimon, Shiller and so many others... LOL!

So we will let you live your mania. Let you enjoy this Libertarian euphoria over magnetic 0´s and 1's sitting on some server.

Cardboard

Some server?  ::) This is what I meant with talking about something you don't comprehend in the slightest.

This is rich coming from the poster who spews completely uninformed and error-ridden comments about the stability of the pre-Federal Reserve economy and believes there have been 20+ year recessions in the US in the last hundred years.
Title: Re: Cryptocurrencies
Post by: SnarkyPuppy on January 22, 2018, 06:20:51 AM
"Look, you don't have to be a fan but continuing to share your opinion on something you very obviously do not understand (or wish to understand) derails a legitimate thread."

You are right, it would be a shame to derail a thread by some who have outsmarted Buffett, Munger, Dimon, Shiller and so many others... LOL!

So we will let you live your mania. Let you enjoy this Libertarian euphoria over magnetic 0´s and 1's sitting on some server.

Cardboard

Some server?  ::) This is what I meant with talking about something you don't comprehend in the slightest.

This is rich coming from the poster who spews completely uninformed and error-ridden comments about the stability of the pre-Federal Reserve economy and believes there have been 20+ year recessions in the US in the last hundred years.

Even if true, it doesn't negate the validity of the criticism that thinking bitcoin is hosted on a server is willful ignorance
Title: Re: Cryptocurrencies
Post by: rkbabang on January 22, 2018, 06:57:52 AM
Just be mindful that today - much of the reason for selling you a rig; is because the seller expects to make MORE from you - than he would had he simply kept the rig, & mined for himself. It's OK for a hobby and experimentation, but it's not what it seems. Obviously, not a popular view among many!

Yeah, this is a good warning, SD.  In my case, I bought a PC in September because my old one was 7 years old, slow, and getting BSOD every few days.  I got a better graphics card than I would have otherwise--maybe an incremental cost of $300--so I could mine effectively. Normally my computer is on whenever I'm awake, so the incremental cost of electricity is low.

I don't know if it was a good decision, but seemed like a reasonable gamble in that $300 isn't that much money to me and I've enjoyed doing it.  Economically, it has paid off, returning about $600 so far. Of course, that's just an outcome that says little about whether the decision to buy the better card had a positive expected return.  Even if one happens to win at roulette, it doesn't imply it was a smart decision to play.


Another way to look at it is that if you would have bought $300 worth of Bitcoin in September at $3800 (it traded as low as $3500 in september) your bitcoin would be worth around $850 right now at bitcoin $10,630.00.  You actually lost $250.  This is why I have never bought hardware to mine.   With the rising prices and rising difficulty it doesn't usually make sense to mine rather than purchase the coins outright unless you already own the hardware for other reasons.


Title: Re: Cryptocurrencies
Post by: RichardGibbons on January 22, 2018, 08:27:14 AM
Another way to look at it is that if you would have bought $300 worth of Bitcoin in September at $3800 (it traded as low as $3500 in september) your bitcoin would be worth around $850 right now at bitcoin $10,630.00.  You actually lost $250.  This is why I have never bought hardware to mine.   With the rising prices and rising difficulty it doesn't usually make sense to mine rather than purchase the coins outright unless you already own the hardware for other reasons.

Putting aside the entertainment from mining and the (non-mining) utility of a good graphics card, this still isn't the sort of reasoning I use because it's difficult to predict what will happen with security prices in the short term.

For instance, based on this reasoning, it doesn't make any sense to have bought Bitcoin in September because you could have just bought Ripple in September at $0.171, and it's currently at $1.185.  So, for every $300 of bitcoin you've held since then, you've lost $1,228. And you'd have done even better if you'd just bet it all on black 11 on the roulette wheel just before it came up.

Deciding whether a short-term bet on volatile securities was a good decision based on the outcome is usually a mistake, I think.  Particularly if you allow the outcome to influence your emotions or future decision-making. (Like, what are you going to do today with the information that Ripple greatly outperformed Bitcoin over the last 3 months? Based on your "you shouldn't have bought a card, you should have bought bitcoin" reasoning, you're probably now required to sell all your bitcoins to buy ripple.  :) )
Title: Re: Cryptocurrencies
Post by: RichardGibbons on January 22, 2018, 08:44:25 AM
Hmm, I guess the other factor is the residual value of the card. Right now, there's bids of $530 for it on eBay, so that closes the gap even more.  If I sell the card and get something $300 cheaper (to completely reverse the cryptocurrency part of the purchase), then by your math, I've actually come out ahead compared to buying bitcoin.

That's surprising to me.  Like you, I would have thought that, over this period of time with the big bitcoin appreciation, bitcoin would've been way ahead of my mining.  I don't think it makes the decision good or bad, but it is interesting.
Title: Re: Cryptocurrencies
Post by: SharperDingaan on January 22, 2018, 09:04:05 AM
Rework the numbers when the value of the token is FALLING, and this falls apart rapidly. Even if you've paid for your rig, the incremental electricity cost of running it will exceed the value of the token earned. You would stop mining and enjoy some awesome video instead.

We know that Bitcoin has long-term value, the market will be volatile, and that 'mania' is a limited term engagement.
Perhaps the smartest thing is to simply sell it into the rallies, park the proceeds in treasuries, and buy it back < 500-1000?

SD
Title: Re: Cryptocurrencies
Post by: Liberty on January 22, 2018, 03:56:34 PM
https://medium.com/@bitfinexed/latest

https://twitter.com/Bitfinexed/
Title: Re: Cryptocurrencies
Post by: RichardGibbons on January 22, 2018, 08:24:31 PM
Rework the numbers when the value of the token is FALLING, and this falls apart rapidly.

I agree completely.  That's why it's entertainment, not an attempt to get rich.  It literally isn't worth my time to mine, and it also isn't worth my time to take the money I've put into mining and invest it elsewhere because the amounts we're discussing are negligible.  It's only worthwhile doing because I get entertainment from it. When I stop getting entertained by it, I'll stop.

The electricity cost is interesting in that my electricity usage has gone down year over year since I started doing this.  My only hypothesis for why that would happen is because I replaced my PC and monitor, and current technology is significantly more efficient than the old.
Title: Re: Cryptocurrencies
Post by: Aberhound on January 23, 2018, 09:44:15 AM
Some tokens are interesting as they will affect the underlying industry and stock prices. One such token is DENT. I expect the token to lock in the duopolies in both US and Mexico then elsewhere. If you ever doubted the elite support the crypto economy read about this token. Notice it launches in US and Mexico now with Verizon & ATT and America Movil and Telefonica. Go long the duopoly and short the competitors.

The token has obvious network effects as no one will want a weak token. Mobile data is going to become very cheap and instead the duopoly will charge monthly flat fees to access the network. This make the duopoly network more valuable so wipes out the competitors. So in Canada the contract will go to Bell and Rogers.

So getting the app is a no brainer. The trick though will be to consider that the duopolies have high prices so I doubt you will be able to buy the tokens and use them to save money. Instead you have to understand that airtime is a wasting asset. What will happen is the poor will sell their airtime so data prices will drop. So the play will be to get in at the start when for the first time the poor masses can sell their data. They will and prices will plummet as the poor masses care about a few pennies and the rich don't care. Therefore there is massive excess selling pressure.

Remember Carlos Slim is on the other side of this coin. He is getting the poor masses to drop the data prices at their expense to attract users to his networks so he can charge high access fee. This increases the value of America Movil. Data in Mexico will be sold more cheaply because of poverty so that will be the source of the supply of airtime. Think Rockfeller taking over the oil industry by dropping prices. Data will be available at prices which will bankrupt competing mobile operators.

Brilliant.
Title: Re: Cryptocurrencies
Post by: Liberty on January 24, 2018, 11:32:10 AM
https://twitter.com/matt_levine/status/956208752755175427
Title: Re: Cryptocurrencies
Post by: EricSchleien1 on January 24, 2018, 02:01:07 PM
Munger said people will just make more bitcoin. However, I was under the impression it's set up so that can't happen. Can someone who understands this better than me explain whether Charlie is right or wrong and why?

Thanks
Title: Re: Cryptocurrencies
Post by: shalab on January 24, 2018, 08:47:42 PM
Not the way one would think. Example bitcoin cash was a hard fork of bitcoin. Essentially the transaction speed of bitcoin is super slow and there will be newer ways to do better.

I am a bit skeptical about the crypto currencies but blockchain can be real. It is still early in the game and a lot can and will change.

FWIW, Microsoft offers tools on Azure:

https://azure.microsoft.com/en-us/solutions/blockchain/


Munger said people will just make more bitcoin. However, I was under the impression it's set up so that can't happen. Can someone who understands this better than me explain whether Charlie is right or wrong and why?

Thanks
Title: Re: Cryptocurrencies
Post by: DTEJD1997 on January 24, 2018, 11:28:26 PM
Hey all:

There is some crazy stuff going on bitcoin & crypto-currency mining.

Demand for graphics cards & certain other parts has just gone insane.  I use low end & medium end graphics cards from time to time for various projects...One of my customers asked if I could get any higher end stuff..which I could.  He started buying wildly.  I then noticed that you could buy a $500 graphics card and sell it instantly on Ebay for $750!  BINGO! I have good access to wholesalers and started selling stuff right & left.  This went on for about 2 weeks.  Then the outages at wholesalers hit...I was able to get stuff as I buy a lot of other stuff, so I got priority...then a week ago, wholesaler raised prices of graphics cards across the board.  In some cases, prices have tripled.  $500 graphics cards are now $1,500!!!!!

So now I'm out of the lop...but $150-$200 cards which I need from time to time are now $300 to $500.  So now I can't make any money on certain things, as I can't get components for reasonable prices.  My clients aren't crypto-mining, so they can't pay that much more.

So if I am hurting, I wonder what is going on with smaller PC manufacturers/assemblers?  I bet Apple & Dell can get product...but anybody else might have difficulty.

What about the card manufacturers making more cards?  They are trying their best, BUT they got burned the last time with crypto-currency mining.  Word on the street is that they are not going to make any significant expansion and users will just have to learn to deal with shortages & higher prices.

Title: Re: Cryptocurrencies
Post by: wachtwoord on January 25, 2018, 04:10:28 AM
Essentially the transaction speed of bitcoin is super slow and there will be newer ways to do better.

That is bullshit. The transactions speed is very high but you need to offer a sufficiently high fee to be taken up in the next block. If you pay less you'll need to wait your turn.

But the other cryptos are no solution because your transaction might be included cheaper in the next block, the level of security, censorship resistance and distribution of the network is orders of magnitudes lower.

There's no such thing as free lunch and you need to pay up. If you do Bitcoin is faster than any of them.
Title: Re: Cryptocurrencies
Post by: writser on January 25, 2018, 04:53:54 AM
So you either have to pay a shitload or your transaction takes ages. Doesn't sound like much of an improvement over existing systems but what do I know.
Title: Re: Cryptocurrencies
Post by: SharperDingaan on January 25, 2018, 05:24:36 AM
So you either have to pay a shitload or your transaction takes ages. Doesn't sound like much of an improvement over existing systems but what do I know.

No. You have to decide if you need the 'super security' of Bitcoin.
If you do need it, pay up for the product offered - 'super security'. If you don't need it - why are you in Bitcoin?
If Bitcoin is a 'investment', this is just the transaction fee. No different to the realtors commission when buying a house.

SD


Title: Re: Cryptocurrencies
Post by: no_free_lunch on January 25, 2018, 06:24:15 AM
Munger said people will just make more bitcoin. However, I was under the impression it's set up so that can't happen. Can someone who understands this better than me explain whether Charlie is right or wrong and why?

Thanks

This comes up a lot.  Basically you cannot make more true bitcoin unless the majority of miners agree to it.  I think it is unlikely they would agree to increase the supply as it would likely crash the value of bitcoin.  Historically the miners can't even agree to make changes which are widely considered improvements such as increasing the size of the blocks.

I think what Munger is saying is that you can make different versions of bitcoin, which obviously has happened.  Ethereum, Ripple (sort of), ADA, bitcoin forks, etc.   However, these things are only as secure as the number of miners.  The more miners the harder it is to corner the market.  Given this, I see it coming down to a small number of crypto's with the largest user networks.

Who knows with technology but I think bitcoin will remain one of the dominant crypto's and the 21M bitcoin limit will remain intact if for no other reason than the stubborn behavior of the community.
Title: Re: Cryptocurrencies
Post by: DeepSouth on January 25, 2018, 07:32:04 AM
So you either have to pay a shitload or your transaction takes ages. Doesn't sound like much of an improvement over existing systems but what do I know.

No. You have to decide if you need the 'super security' of Bitcoin.
If you do need it, pay up for the product offered - 'super security'. If you don't need it - why are you in Bitcoin?
If Bitcoin is a 'investment', this is just the transaction fee. No different to the realtors commission when buying a house.

SD

Couldn't Xi Jingping destroy bitcoin's security by nationalizing all Chinese mining power?
Title: Re: Cryptocurrencies
Post by: rkbabang on January 25, 2018, 07:50:45 AM
So you either have to pay a shitload or your transaction takes ages. Doesn't sound like much of an improvement over existing systems but what do I know.

No. You have to decide if you need the 'super security' of Bitcoin.
If you do need it, pay up for the product offered - 'super security'. If you don't need it - why are you in Bitcoin?
If Bitcoin is a 'investment', this is just the transaction fee. No different to the realtors commission when buying a house.

SD

Couldn't Xi Jingping destroy bitcoin's security by nationalizing all Chinese mining power?

Nation states have huge piles of money and weapons and often do crazy destructive things.  So while the answer to that is yes.  I think that would only serve to destroy bitcoin rather than control it.  People would move on to another cryptocurrency if they did that as no one wants a cryptocurrency controlled by any nation state not just China.
Title: Re: Cryptocurrencies
Post by: gary17 on January 25, 2018, 08:11:31 AM
Pardon my ignorance — but the slow transaction of bitcoin — can that not be improved over time with faster processors / chips?  That is a computer problem is it not? just like how internet was slow 20 years ago?
Title: Re: Cryptocurrencies
Post by: DeepSouth on January 25, 2018, 08:15:07 AM
So you either have to pay a shitload or your transaction takes ages. Doesn't sound like much of an improvement over existing systems but what do I know.

No. You have to decide if you need the 'super security' of Bitcoin.
If you do need it, pay up for the product offered - 'super security'. If you don't need it - why are you in Bitcoin?
If Bitcoin is a 'investment', this is just the transaction fee. No different to the realtors commission when buying a house.

SD

Couldn't Xi Jingping destroy bitcoin's security by nationalizing all Chinese mining power?

Nation states have huge piles of money and weapons and often do crazy destructive things.  So while the answer to that is yes.  I think that would only serve to destroy bitcoin rather than control it.  People would move on to another cryptocurrency if they did that as no one wants a cryptocurrency controlled by any nation state not just China.

So instead of being a trustless protocol, bitcoin's existence relies on placing your complete trust that an authoritarian dictator doesn't won't ever decide to destroy it. I thought the key selling point of this was that crypto holders don't trust government?

So we sacrifice speed or cost of transactions in order to gain security, but it's not that secure for the average man on the street who doesn't understand all the steps to ensure their private key isn't hacked and on a protocol basis it's not secure because it could be destroyed by a single memo from the Chinese politburo.

I'll readily admit I'm not an expert but the cost/benefit of that asset over gold, TIPS, T-bills, etc seems pretty shoddy. I'm long and I've realized solid gains because most of the zealots seem to have a religious devotion to it therefore the flow of funds should be bullish, but it's hard for me to really understand the appeal.
Title: Re: Cryptocurrencies
Post by: wachtwoord on January 25, 2018, 08:39:09 AM
Pardon my ignorance — but the slow transaction of bitcoin — can that not be improved over time with faster processors / chips?  That is a computer problem is it not? just like how internet was slow 20 years ago?

No. Processor speed is not the limitation here. The cause is economical rather than technical. To provide security without the need for third party trust the cost needs to be sufficiently high. This is only achieved through limiting the resource (throughput). Simple supply and demand.
Title: Re: Cryptocurrencies
Post by: rkbabang on January 25, 2018, 10:22:09 AM
So you either have to pay a shitload or your transaction takes ages. Doesn't sound like much of an improvement over existing systems but what do I know.

No. You have to decide if you need the 'super security' of Bitcoin.
If you do need it, pay up for the product offered - 'super security'. If you don't need it - why are you in Bitcoin?
If Bitcoin is a 'investment', this is just the transaction fee. No different to the realtors commission when buying a house.

SD

Couldn't Xi Jingping destroy bitcoin's security by nationalizing all Chinese mining power?

Nation states have huge piles of money and weapons and often do crazy destructive things.  So while the answer to that is yes.  I think that would only serve to destroy bitcoin rather than control it.  People would move on to another cryptocurrency if they did that as no one wants a cryptocurrency controlled by any nation state not just China.

So instead of being a trustless protocol, bitcoin's existence relies on placing your complete trust that an authoritarian dictator doesn't won't ever decide to destroy it. I thought the key selling point of this was that crypto holders don't trust government?

So we sacrifice speed or cost of transactions in order to gain security, but it's not that secure for the average man on the street who doesn't understand all the steps to ensure their private key isn't hacked and on a protocol basis it's not secure because it could be destroyed by a single memo from the Chinese politburo.

I'll readily admit I'm not an expert but the cost/benefit of that asset over gold, TIPS, T-bills, etc seems pretty shoddy. I'm long and I've realized solid gains because most of the zealots seem to have a religious devotion to it therefore the flow of funds should be bullish, but it's hard for me to really understand the appeal.

It would cost a fortune (even for a nation state) to do this and because the target would be destroyed in the process, nothing would be accomplished.    Of course those exact words could describe the US foreign policy so who knows?

I expect to see central banks eventually adding BTC to their reserves along side gold, not trying to destroy it.
Title: Re: Cryptocurrencies
Post by: DeepSouth on January 25, 2018, 11:31:44 AM
So you either have to pay a shitload or your transaction takes ages. Doesn't sound like much of an improvement over existing systems but what do I know.

No. You have to decide if you need the 'super security' of Bitcoin.
If you do need it, pay up for the product offered - 'super security'. If you don't need it - why are you in Bitcoin?
If Bitcoin is a 'investment', this is just the transaction fee. No different to the realtors commission when buying a house.

SD

Couldn't Xi Jingping destroy bitcoin's security by nationalizing all Chinese mining power?

Nation states have huge piles of money and weapons and often do crazy destructive things.  So while the answer to that is yes.  I think that would only serve to destroy bitcoin rather than control it.  People would move on to another cryptocurrency if they did that as no one wants a cryptocurrency controlled by any nation state not just China.

So instead of being a trustless protocol, bitcoin's existence relies on placing your complete trust that an authoritarian dictator doesn't won't ever decide to destroy it. I thought the key selling point of this was that crypto holders don't trust government?

So we sacrifice speed or cost of transactions in order to gain security, but it's not that secure for the average man on the street who doesn't understand all the steps to ensure their private key isn't hacked and on a protocol basis it's not secure because it could be destroyed by a single memo from the Chinese politburo.

I'll readily admit I'm not an expert but the cost/benefit of that asset over gold, TIPS, T-bills, etc seems pretty shoddy. I'm long and I've realized solid gains because most of the zealots seem to have a religious devotion to it therefore the flow of funds should be bullish, but it's hard for me to really understand the appeal.

It would cost a fortune (even for a nation state) to do this and because the target would be destroyed in the process, nothing would be accomplished.    Of course those exact words could describe the US foreign policy so who knows?

I expect to see central banks eventually adding BTC to their reserves along side gold, not trying to destroy it.

It wouldn't cost the state anything; the Chinese state could simply expropriate the assets of Chinese miners and would immediately control >50% of mining power. Do you believe that the Chinese government is unwilling to expropriate resources?

And yes, the target could be destroyed in the process, that would be the purpose. If cryptocurrencies are a threat to governments' control of their citizens then destruction of them is an accomplishment for said governments.

This is one of the things I don't really get about many cryptohodlers. They simultaneously believe that governments are rapacious totalitarians, crypto is a way for them to subvert government, and  yet government will treat them lovingly by buying up their crypto at market value. These ideas seem mutually exclusive.
Title: Re: Cryptocurrencies
Post by: emily on January 25, 2018, 09:16:56 PM
As hacking is one of the biggest threat on bitcoin exchanges, I have few questions:
- Do you provide your primary email address to open account ? or should create another email account? (as primary email address may be available through social media and thus more prone to hacking)
-Do you provide your primary checking account #? or better to provide a savings account that you may not use much and have very litttle funds in them?
or am I overthinking this and it doesn't matter?
Title: Re: Cryptocurrencies
Post by: wachtwoord on January 26, 2018, 03:43:58 AM
My advice: use 2-factor authentication (with 2 independent factors. SMS is generally non-secure). Secondly I'd advice to keep any funds on the exchange only for the duration of the trade and withdraw it right after. This also mitigates counter party risk (exchanges have stolen or been hacked themselves relatively often).

Assuming you use a strong password on both the exchange and your email account the most common attack is social engineering: the hacker contacts a 3rd party (email provider or exchange) claiming he's you and that he wishes to change his password. For your email pick a third party who's least likely to cave for such a social engineering attack (? Any idea who?) or run a email server locally yourself (of course that increases the likelihood of the mail server itself getting hacked as e.g. google is better at security than you are).

Mitigating social engineering attacks is difficult. Don't become a target by keeping your affairs private.
Title: Re: Cryptocurrencies
Post by: Liberty on January 26, 2018, 04:08:25 AM
https://hackernoon.com/extortion-police-raids-and-secrecy-inside-the-venezuelan-bitcoin-mining-world-6e97a25e7402
Title: Re: Cryptocurrencies
Post by: rkbabang on January 26, 2018, 05:07:54 AM
My advice: use 2-factor authentication (with 2 independent factors. SMS is generally non-secure). Secondly I'd advice to keep any funds on the exchange only for the duration of the trade and withdraw it right after. This also mitigates counter party risk (exchanges have stolen or been hacked themselves relatively often).

Assuming you use a strong password on both the exchange and your email account the most common attack is social engineering: the hacker contacts a 3rd party (email provider or exchange) claiming he's you and that he wishes to change his password. For your email pick a third party who's least likely to cave for such a social engineering attack (? Any idea who?) or run a email server locally yourself (of course that increases the likelihood of the mail server itself getting hacked as e.g. google is better at security than you are).

Mitigating social engineering attacks is difficult. Don't become a target by keeping your affairs private.

And the most common hacking method is phishing attacks.  i.e. a fake message which looks like it from an institution you do business with asking you to click a link and log in to your account. Do not click on links from emails.  If Coinbase sends you an email to log into your account it probably isn't really from them.  Always type the address into your browser and bookmark it or use the mobile app.  This all goes for your brokerage and bank accounts as well.  If you have a policy of never clicking on a link from an email you will be safe from these types of attacks.
Title: Re: Cryptocurrencies
Post by: NeverLoseMoney on January 26, 2018, 09:44:21 AM
Are any of the crypto bulls here concerned with Tether (USDT)? Especially the "printing" of new USDT and some indications that the main people behind it are also principals of the Bitfinex exchange.

Apparently major USDT printing occurred after bitcoin crashed to $10k and some say those were being used to prop-up the bitcoin price. Supposedly USDT are backed by US dollars in a bank account (in an obscure Polish bank if I recall correctly), but I'm very skeptical about that.

I thought this was an interesting video about this issue:
https://www.youtube.com/watch?time_continue=2&v=MwKYbT9MoPE

Why would I be concerned? Don't touch Tether with a 5-foot pole and you'll be fine (it's 100% a scam).

The theory is that they are “printing” thether out of nothing and using it to buy bitcoin, thus inflating the price of bitcoin far above its actual demand. I’m not sure how much of the bitcoin demand is tether related, but long term it means nothing either way.

That's only the Thether Bitcoin price. Not USD/BTC. It has no effect other than some fools parting with their money.
An interesting piece of research: http://www.tetherreport.com/.

"Summary
Author’s opinion - it is highly unlikely that Tether is growing through any organic business process, rather that they are printing in response to market conditions.

Tether printing moves the market appreciably; 48.8% of BTC’s price rise in the period studied occurred in the two-hour periods following the arrival of 91 different Tether grants to the Bitfinex wallet.

Bitfinex withdrawal/deposit statistics are unusual and would give rise to further scrutiny in a typical accounting environment.

If there is questionable activity, the author believes a 30-80% reduction in BTC price could be forecast."
Title: Re: Cryptocurrencies
Post by: Liberty on January 26, 2018, 10:07:16 AM
"Coincheck Says It Lost Crypto Coins Valued at About $400 Million"

Oops I guess.
Title: Re: Cryptocurrencies
Post by: SnarkyPuppy on January 26, 2018, 10:24:26 AM
Not sure the point of the continued anectodal links^.   Yes it's the Wild West right now - don't store your money on an exchange.  Day 1 stuff. 

With that said-  to the bulls who have more experience in this than I do:

What are your views on the 5 year and 15 year time horizon of bitcoin if the United Stayes completely hammers down on bitcoin - ie closes coinbase, banks required to stop bitcoin payments (ala poker), bitcoin atms shutdown.  Obviously the price gets crushed short term, but longer term how does bitcoin truly recover from a complete US ban?  And then even more extreme (although less likely) how does bitcoin come back from a coordinated G20 action similar to the above?   More curious about the US only scenario as I think it's very low probability various countries can truly coordinate on this
Title: Re: Cryptocurrencies
Post by: Liberty on January 26, 2018, 01:06:35 PM
Not sure the point of the continued anectodal links^.

Entertainment. That's the main way to be assured of getting net positive value out of this show right now.
Title: Re: Cryptocurrencies
Post by: SnarkyPuppy on January 26, 2018, 02:03:29 PM
Not sure the point of the continued anectodal links^.

Entertainment. That's the main way to be assured of getting net positive value out of this show right now.

So your opinion is that that the worlds first judgment resistant + trustless asset isn't worth anything?
Title: Re: Cryptocurrencies
Post by: roughlyright on January 26, 2018, 03:48:55 PM
SnarkyPuppy,

 Are there any Altcoins that you are bullish on?

Roughlyright
Title: Re: Cryptocurrencies
Post by: Spekulatius on January 27, 2018, 06:30:17 AM
Rework the numbers when the value of the token is FALLING, and this falls apart rapidly. Even if you've paid for your rig, the incremental electricity cost of running it will exceed the value of the token earned. You would stop mining and enjoy some awesome video instead.

We know that Bitcoin has long-term value, the market will be volatile, and that 'mania' is a limited term engagement.
Perhaps the smartest thing is to simply sell it into the rallies, park the proceeds in treasuries, and buy it back < 500-1000?

SD

I thought you first entry point was $7000 for bitcoin, why $500-1000? Why not $100 or $10?

While I agree that a lot of money can be made playing the rallies or the busts, the lack of intrinsic value for any crypto currencies makes it hard to get entry or exit pointe for three tokens.
Title: Re: Cryptocurrencies
Post by: SharperDingaan on January 27, 2018, 07:37:26 AM
Rework the numbers when the value of the token is FALLING, and this falls apart rapidly. Even if you've paid for your rig, the incremental electricity cost of running it will exceed the value of the token earned. You would stop mining and enjoy some awesome video instead.

We know that Bitcoin has long-term value, the market will be volatile, and that 'mania' is a limited term engagement.
Perhaps the smartest thing is to simply sell it into the rallies, park the proceeds in treasuries, and buy it back < 500-1000?

SD

I thought you first entry point was $7000 for bitcoin, why $500-1000? Why not $100 or $10?

While I agree that a lot of money can be made playing the rallies or the busts, the lack of intrinsic value for any crypto currencies makes it hard to get entry or exit pointe for three tokens.

There's no real entry 'price'. All you can do is try and guess if the current price is low enough to draw in sufficient numbers of bargain hunters, willing to drive the price up - in the belief that the current price is cheap. The  entry point could just as easily be $5,000 or $10,000. Value investing is also quite good practice for it - as supposedly we are better at 'seeing' value where others do not.

SD

Title: Re: Cryptocurrencies
Post by: no_free_lunch on January 27, 2018, 07:41:21 AM
Rework the numbers when the value of the token is FALLING, and this falls apart rapidly. Even if you've paid for your rig, the incremental electricity cost of running it will exceed the value of the token earned. You would stop mining and enjoy some awesome video instead.

We know that Bitcoin has long-term value, the market will be volatile, and that 'mania' is a limited term engagement.
Perhaps the smartest thing is to simply sell it into the rallies, park the proceeds in treasuries, and buy it back < 500-1000?

SD

I thought you first entry point was $7000 for bitcoin, why $500-1000? Why not $100 or $10?

While I agree that a lot of money can be made playing the rallies or the busts, the lack of intrinsic value for any crypto currencies makes it hard to get entry or exit pointe for three tokens.

I have to agree with you on this.  Bitcoin is either worth an awful lot or perhaps very little.  It's value is roughly proportional (exponentially / log proportional even) to the number of miners.  If something replaces it and the miner community gets sharply reduced I am not sure if it would have that much value.

The big issue that is talked about and never addressed is all this electricity that gets wasted on the mining.  I don't see why that can't be resolved.  I think the only solution is some type of proof of work / stake where that mining isn't completely useless as bitcoin's is.  I don't see why the mining couldn't actually be for a purpose.  Much harder to architect but then you aren't wasting the electricity.  Some of the newer coins are trying to address this, I could see them taking over.  If that happens, and the miners start going to new coins, the bitcoin network could fall apart.
Title: Re: Cryptocurrencies
Post by: gary17 on January 27, 2018, 10:16:41 AM
If I am not interested in cryptoassets but sees a use for blockchain technology...  would it make sense to invest in technologies that enable blockchain rather than the crypto assets themselves?  for example, i read running blockchain for any type of crypto asset requires significant processing power... would it not make sense to invest in say NVDA or AMD or even INTEL?
Title: Re: Cryptocurrencies
Post by: Liberty on January 28, 2018, 07:53:56 AM
Not sure the point of the continued anectodal links^.

Entertainment. That's the main way to be assured of getting net positive value out of this show right now.

So your opinion is that that the worlds first judgment resistant + trustless asset isn't worth anything?

I didn't say anything of the sort.
Title: Re: Cryptocurrencies
Post by: SnarkyPuppy on January 28, 2018, 08:36:50 AM
Not sure the point of the continued anectodal links^.

Entertainment. That's the main way to be assured of getting net positive value out of this show right now.

So your opinion is that that the worlds first judgment resistant + trustless asset isn't worth anything?

I didn't say anything of the sort.

Sorry - the way I phrased that definitely implied that I already knew your opinion.   Was moreso genuinely curious about your longer term views w/ respect to the store of value thesis.   
Title: Re: Cryptocurrencies
Post by: SharperDingaan on January 28, 2018, 11:25:22 AM
If I am not interested in cryptoassets but sees a use for blockchain technology...  would it make sense to invest in technologies that enable blockchain rather than the crypto assets themselves?  for example, i read running blockchain for any type of crypto asset requires significant processing power... would it not make sense to invest in say NVDA or AMD or even INTEL?

The major 'investables' are IBM - offering scaleable (DB) block chain on the cloud, and Etherium offering blockchain on a distributed ledger. Most of this is done via joint ventures, not using outside money.

SD
Title: Re: Cryptocurrencies
Post by: Liberty on January 28, 2018, 05:31:18 PM
https://twitter.com/brucefenton/status/955926683026100224
Title: Re: Cryptocurrencies
Post by: Liberty on January 29, 2018, 01:01:22 PM
Sorry - the way I phrased that definitely implied that I already knew your opinion.   Was moreso genuinely curious about your longer term views w/ respect to the store of value thesis.

There's a lot that is technically interesting, though I think that's probably overhyped at this point. There's also a lot that is incredibly worrying, wrt to the amount of fraud and scams and BS flying at high velocity. Looks like Tether might be a giant fraud that might blow up a lot more than just itself later on since so much of it is recycled into other things...

I've been interested in cryptography since the late 1990s, I've first looked into BTC and cryptocurrencies in 2011. It's interesting stuff for sure, but the mania around it is getting tiresome.

It's mostly getting a lot of attention because of the price action, not so much because of any actual products or problems that are being solved, which is always worrying.

There's some stuff in there that I agree with:

http://www.investorfieldguide.com/preston/

I prefer investing to speculating anyway (I don't have that gambler gene -- don't get pleasure out of it even if I win), so I keep an eye on it for the entertainment value. Or I might change my mind at any point as I gather more info, but so far I'm following it the same way I follow CPU architectures and EV technology.
Title: Re: Cryptocurrencies
Post by: no_free_lunch on January 29, 2018, 07:12:21 PM
If I am not interested in cryptoassets but sees a use for blockchain technology...  would it make sense to invest in technologies that enable blockchain rather than the crypto assets themselves?  for example, i read running blockchain for any type of crypto asset requires significant processing power... would it not make sense to invest in say NVDA or AMD or even INTEL?

That makes sense for some crypto's but for bitcoin it is mostly ASIC.  Haven't ever actually mined but that is what they say.   I don't think you can do ether with ASIC so your thesis might hold up if ether takes over.
Title: Re: Cryptocurrencies
Post by: rkbabang on January 30, 2018, 05:23:53 AM
If I am not interested in cryptoassets but sees a use for blockchain technology...  would it make sense to invest in technologies that enable blockchain rather than the crypto assets themselves?  for example, i read running blockchain for any type of crypto asset requires significant processing power... would it not make sense to invest in say NVDA or AMD or even INTEL?

That makes sense for some crypto's but for bitcoin it is mostly ASIC.  Haven't ever actually mined but that is what they say.   I don't think you can do ether with ASIC so your thesis might hold up if ether takes over.



Correct.  If I were to invest in NVDA or AMD it would be because of AI/Deep learning not because of mining.   There are ASICs for other algorithms now too, not just Bitcoin's SHA-256 algorithm.  Here's an example of an ASIC based system to mine Scrypt coins (https://www.coinwarz.com/miningprofitability/litecoin) such as Litecoin:
https://shop.bitmain.com/antminer_l3_litecoin_asic_scrypt_miner.htm?flag=overview

It's only a matter of time before other algorithms have custom chips available as well.
Title: Re: Cryptocurrencies
Post by: Liberty on January 30, 2018, 11:02:14 AM
Funny, I was just writing about this here 2 days ago...

https://www.bloomberg.com/news/articles/2018-01-30/crypto-exchange-bitfinex-tether-said-to-get-subpoenaed-by-cftc

https://twitter.com/Bitfinexed/status/958420215301394432

Also:

https://www.recode.net/2018/1/30/16950926/facebook-mark-zuckerberg-bans-crypto-advertising-bitcoin-james-altucher
Title: Re: Cryptocurrencies
Post by: Liberty on January 31, 2018, 03:40:50 AM
https://www.bloomberg.com/news/articles/2018-01-30/sec-seeks-to-freeze-crypto-assets-of-600-million-coin-offering
Title: Re: Cryptocurrencies
Post by: SharperDingaan on January 31, 2018, 07:36:52 AM
https://www.bloomberg.com/news/articles/2018-01-30/sec-seeks-to-freeze-crypto-assets-of-600-million-coin-offering

The ICO itself very likely wasn't illegal, simply because there are no real crypto laws to break at present.
What was probably illegal were the statements made around it (FDIC insured bank, Visa, etc.), and the presence of a C-Suite individual on probation for felony theft. Can't claim the bank and pipes stuff until AFTER you've bought the bank.

SD
Title: Re: Cryptocurrencies
Post by: emily on January 31, 2018, 08:39:16 AM
Is Etherium better to invest in for long term or Bitcoin ? I read a paper that was posted here says Bitcoin was better blockchain technology but then I read great things about Etherium too.

If I am not interested in cryptoassets but sees a use for blockchain technology...  would it make sense to invest in technologies that enable blockchain rather than the crypto assets themselves?  for example, i read running blockchain for any type of crypto asset requires significant processing power... would it not make sense to invest in say NVDA or AMD or even INTEL?

The major 'investables' are IBM - offering scaleable (DB) block chain on the cloud, and Etherium offering blockchain on a distributed ledger. Most of this is done via joint ventures, not using outside money.

SD
Title: Re: Cryptocurrencies
Post by: SharperDingaan on January 31, 2018, 09:13:27 AM
Is Etherium better to invest in for long term or Bitcoin ? I read a paper that was posted here says Bitcoin was better blockchain technology but then I read great things about Etherium too.

You need to be very clear on WHY you're investing in this.

In the long-term - a holding of Bitcoin is probably a worthwhile thing. You will have some wealth that is always portable, no matter what happens to you. You will also have experience in what will probably become a 'core' crypto coin (complete with futures & options markets). It does not mean buy it today.

In the nearer term, Etherium will make you familiar with how blockchain smart contract solutions can be applied across many different applications - but Ether token is not a substitute for Etherium stock (it's private). The solutions are where the money is, and the beneficiaries are the companies applying them (some of which are public). The downside is that distributed ledger applications have scaling limitations.

To 'make' wealth one  concentrates - to 'preserve' wealth one diversifies. To 'make' wealth in this game, you need to be a partner in a JV building a blockchain smart contract solution. If that's part of the plan - Etherium is probably the better choice.

Notable is that it cannot be decided by conventional investment 'metrics'
They don't exist yet.

SD
Title: Re: Cryptocurrencies
Post by: rkbabang on January 31, 2018, 09:24:14 AM
Is Etherium better to invest in for long term or Bitcoin ? I read a paper that was posted here says Bitcoin was better blockchain technology but then I read great things about Etherium too.

You need to be very clear on WHY you're investing in this.

In the long-term - a holding of Bitcoin is probably a worthwhile thing. You will have some wealth that is always portable, no matter what happens to you. You will also have experience in what will probably become a 'core' crypto coin (complete with futures & options markets). It does not mean buy it today.

In the nearer term, Etherium will make you familiar with how blockchain smart contract solutions can be applied across many different applications - but Ether token is not a substitute for Etherium stock (it's private). The solutions are where the money is, and the beneficiaries are the companies applying them (some of which are public). The downside is that distributed ledger applications have scaling limitations.

To 'make' wealth one  concentrates - to 'preserve' wealth one diversifies. To 'make' wealth in this game, you need to be a partner in a JV building a blockchain smart contract solution. If that's part of the plan - Etherium is probably the better choice.

Notable is that it cannot be decided by conventional investment 'metrics'
They don't exist yet.

SD


There is no doubt that Etherium is excellent technology, but will it be a good investment buying at today's prices?  I don't know.
Title: Re: Cryptocurrencies
Post by: wachtwoord on January 31, 2018, 03:55:08 PM
Is Etherium better to invest in for long term or Bitcoin ? I read a paper that was posted here says Bitcoin was better blockchain technology but then I read great things about Etherium too.

Did you not read the research I shared here a few weeks ago? Ethereum is 2 orders of magnitude overvalued.

Both these are true:
1. Smart contracts are an interesting technology.
2. Ethereum is a horrible investment at today's prices (or at any recent price.
Title: Re: Cryptocurrencies
Post by: emily on January 31, 2018, 07:29:57 PM
I wish my issue was preservation. To make wealth, which one is better technology that will win ? I do not plan to buy either at these prices, so at this time trying to see which one is Google and which one is Yahoo.

Is Etherium better to invest in for long term or Bitcoin ? I read a paper that was posted here says Bitcoin was better blockchain technology but then I read great things about Etherium too.

You need to be very clear on WHY you're investing in this.

In the long-term - a holding of Bitcoin is probably a worthwhile thing. You will have some wealth that is always portable, no matter what happens to you. You will also have experience in what will probably become a 'core' crypto coin (complete with futures & options markets). It does not mean buy it today.

In the nearer term, Etherium will make you familiar with how blockchain smart contract solutions can be applied across many different applications - but Ether token is not a substitute for Etherium stock (it's private). The solutions are where the money is, and the beneficiaries are the companies applying them (some of which are public). The downside is that distributed ledger applications have scaling limitations.

To 'make' wealth one  concentrates - to 'preserve' wealth one diversifies. To 'make' wealth in this game, you need to be a partner in a JV building a blockchain smart contract solution. If that's part of the plan - Etherium is probably the better choice.

Notable is that it cannot be decided by conventional investment 'metrics'
They don't exist yet.

SD
Title: Re: Cryptocurrencies
Post by: emily on January 31, 2018, 07:34:23 PM
Yes, I did read it. But SD and rkbabbang advised to not buy either at these prices and therefore I am just in the process of paying the 'tuition' to learn. So not looking at prices yet. Bitcoin has almost dropped 50% off its highs but Etherneum is relatively more stable and that is why I started to wonder which one is better as a technology.


Is Etherium better to invest in for long term or Bitcoin ? I read a paper that was posted here says Bitcoin was better blockchain technology but then I read great things about Etherium too.

Did you not read the research I shared here a few weeks ago? Ethereum is 2 orders of magnitude overvalued.

Both these are true:
1. Smart contracts are an interesting technology.
2. Ethereum is a horrible investment at today's prices (or at any recent price.
Title: Re: Cryptocurrencies
Post by: Spekulatius on February 01, 2018, 04:16:42 AM
Whilst I am a layman in crypto, I think the question I’d which one is the better store of wealth and which one is the better underlying technology to facilitate transactions. For the latter it seems Etherium, for the former it is most likely Bitcoin.

If you want to invest in the technology though, purchasing the underlying token (Ether) is not the way to do it, you need to invest in a company that owns or uses the technology.
Title: Re: Cryptocurrencies
Post by: Liberty on February 01, 2018, 05:43:06 AM
https://www.nytimes.com/2018/01/31/technology/bitfinex-bitcoin-price.html
Title: Re: Cryptocurrencies
Post by: SharperDingaan on February 01, 2018, 06:50:52 AM
.... so at this time trying to see which one is Google and which one is Yahoo.

It's too early to make this determination.
Quite a few folks would suggest that it is more likely to be those providing database blockchain/smart contract services via the cloud - simply because they are scaleable. A material consideration if your proposed business application could easily generate 20,000 new blocks/month that need to process in seconds, versus < 1,000 new blocks/month that could take minutes/hours to process on a distributed ledger. You demonstrate your 'proof of concept' on Etherium (Distributed Ledger) - you implement it on IBM/SAP (Database), and do it 'in house'.

Tuition wise, your time would be better spent looking at how this technology affects the operations of a business - versus whether X or Y is the better investment. UoT has a handy 2-day course in the subject  ;)

SD
Title: Re: Cryptocurrencies
Post by: SnarkyPuppy on February 01, 2018, 07:41:27 AM
Whilst I am a layman in crypto, I think the question I’d which one is the better store of wealth and which one is the better underlying technology to facilitate transactions. For the latter it seems Etherium, for the former it is most likely Bitcoin.

If you want to invest in the technology though, purchasing the underlying token (Ether) is not the way to do it, you need to invest in a company that owns or uses the technology.

The store of value thesis is sufficient in its own right to do very well on a crypto investment.  Right now, bitcoin is the clear winner, but the facts may change. 

Advantages of bitcoin as it pertains to store of value:
- current winner in terms of network effects 
- minimal attack surface (minimal and simplistic code as compared to other cryptoassets eg Ethereum)
- 8 years of history with 0 downtime
- An almost religious-like story behind the creation/founder which is not to be underestimated (humans are attached to stories - and money itself is a story)
- higher transaction fees - debatable topic but I actually prefer transaction fees stay where they are (equal to or less than a stock commission).  Store of value is generally (not always) decoupled from units of exchange (pls read the PDF posted a few pages back for more on this). 

Some Risks:
- Proof of stake (or another consensus mechanism)  proves to be a more effective method of providing a store of value.  I can see a small possibility that the staking/"dividends" associated with ethereum after the move to PoS may be viewed as a better form of store of value than bitcoin
- better governance model - see "decred" token.  Also think this is small probability bc of  eteorn effects, but decred seeks to reduce the power held by miners by adding a sort of "2fa" to the validation process by those who stake financial incentive
- Scalability is solved and the perception of store of value is eroded (currency arguably less valuable than store of value)
- Privacy coins - store of value is arguably even better in a private form (whereas bitcoin is fully transparent)

Fortunately the asymmetry at current prices makes hedging out these risks cheap and effective
Title: Re: Cryptocurrencies
Post by: Liberty on February 01, 2018, 10:23:00 AM
Quote
This crypto bubble popping will be different from the last one due to the sheer volume of litigation to which it will give rise.

We are already seeing this with the class actions. Once the template is proven, the floodgates will open. No coin will be safe.

Will be interesting to see how Silicon Valley reacts when all of the "users" it has been so hungrily chasing down transmogrify into "plaintiffs."

It has a _Gremlins_ feel to it. "Don't give him any water. Never feed him after midnight. Don't sell him unregistered securities."

https://twitter.com/prestonjbyrne/status/959120498381787136

https://twitter.com/prestonjbyrne/status/959120951597326338

https://twitter.com/prestonjbyrne/status/959122421856067585
Title: Re: Cryptocurrencies
Post by: emily on February 01, 2018, 10:42:21 AM
Is this course by univ of toronto the one you are talking about? If so, it is a full semster course
http://www.cs.toronto.edu/~rackoff/2426f16/info.pdf


Tuition wise, your time would be better spent looking at how this technology affects the operations of a business - versus whether X or Y is the better investment. UoT has a handy 2-day course in the subject  ;)

SD
Title: Re: Cryptocurrencies
Post by: emily on February 01, 2018, 10:44:31 AM
Anyone has an idea what could be a good price to jump in for bitcoin and etherinium if bubble may pop? I know it is a hard question but is there an intrinsic value? cost to mine one?


Quote
This crypto bubble popping will be different from the last one due to the sheer volume of litigation to which it will give rise.

We are already seeing this with the class actions. Once the template is proven, the floodgates will open. No coin will be safe.

Will be interesting to see how Silicon Valley reacts when all of the "users" it has been so hungrily chasing down transmogrify into "plaintiffs."

It has a _Gremlins_ feel to it. "Don't give him any water. Never feed him after midnight. Don't sell him unregistered securities."

https://twitter.com/prestonjbyrne/status/959120498381787136

https://twitter.com/prestonjbyrne/status/959120951597326338

https://twitter.com/prestonjbyrne/status/959122421856067585
Title: Re: Cryptocurrencies
Post by: Liberty on February 01, 2018, 10:53:21 AM
Anyone has an idea what could be a good price to jump in for bitcoin and etherinium if bubble may pop?

Nobody can tell you that. Be very skeptical of anyone who says they can.
Title: Re: Cryptocurrencies
Post by: emily on February 01, 2018, 11:08:28 AM
Do you trust buying GBTC in retirement portfolio? It is the only option for exposure to Crypto in retirement fund but not sure if it is a reliable trust fund (Not planning to buy at these prices but when it falls more between $1 and $2)

https://finance.yahoo.com/quote/GBTC?p=GBTC
Title: Re: Cryptocurrencies
Post by: rkbabang on February 01, 2018, 11:30:09 AM
Do you trust buying GBTC in retirement portfolio? It is the only option for exposure to Crypto in retirement fund but not sure if it is a reliable trust fund (Not planning to buy at these prices but when it falls more between $1 and $2)

https://finance.yahoo.com/quote/GBTC?p=GBTC

Unless Grayscale Investments and/or Xapo, Inc are a total frauds, my largest concern would be the safety of their holdings.  This page (https://grayscale.co/bitcoin-investment-trust/) says:

"Robust security and storage
The Bitcoin Investment Trust’s assets are stored with Xapo, Inc., as Custodian, in deep cold storage vaults. Bitcoin stored in the Xapo Vaults reside on multisignature addresses, the private keys for which are protected by intense cryptographic, physical and process security."

I don't know.  As I've said a bunch of times already, I like to control my own keys.  But if you do trust Grayscale and Xapo to both not be frauds and to be secure from hacking and theft then 1 share of GBTC = 0.00100721 BTC.
Title: Re: Cryptocurrencies
Post by: Liberty on February 01, 2018, 12:10:25 PM
Do you trust buying GBTC in retirement portfolio? It is the only option for exposure to Crypto in retirement fund but not sure if it is a reliable trust fund (Not planning to buy at these prices but when it falls more between $1 and $2)

https://finance.yahoo.com/quote/GBTC?p=GBTC

Isn't GBTC selling way above NAV (net asset value)?

Any investment you buy should be something you understand and are comfortable with. Not because someone on some forum told you to. You don't know us, some of us might sound convincing, but maybe we have no idea what we're talking about. But your money is real and I'm sure you worked hard for it. Don't fall for FOMO (fear of missing out), it usually ends badly.
Title: Re: Cryptocurrencies
Post by: rkbabang on February 01, 2018, 12:51:55 PM
Do you trust buying GBTC in retirement portfolio? It is the only option for exposure to Crypto in retirement fund but not sure if it is a reliable trust fund (Not planning to buy at these prices but when it falls more between $1 and $2)

https://finance.yahoo.com/quote/GBTC?p=GBTC

Isn't GBTC selling way above NAV (net asset value)?

Any investment you buy should be something you understand and are comfortable with. Not because someone on some forum told you to. You don't know us, some of us might sound convincing, but maybe we have no idea what we're talking about. But your money is real and I'm sure you worked hard for it. Don't fall for FOMO (fear of missing out), it usually ends badly.

+1.  That is why I pointed out that 1 share of GBTC = 0.00100721 BTC.  If you do buy this take that into account.  Investing in BTC is risky enough without paying a large premium above market prices for it.
Title: Re: Cryptocurrencies
Post by: SharperDingaan on February 02, 2018, 07:07:47 AM
Just a quick FYI for those in the Toronto area, with an interest in crypto-token, block chain, smart contracts, etc.
Look at the 'Finance' and 'Innovation' sections.

https://learn.utoronto.ca/courses-programs/business-professionals/courses/skill-builder-series

SD

 
Title: Re: Cryptocurrencies
Post by: emily on February 02, 2018, 03:11:14 PM
Flying to Toronto is too expensive for me. Anything in US?

Just a quick FYI for those in the Toronto area, with an interest in crypto-token, block chain, smart contracts, etc.
Look at the 'Finance' and 'Innovation' sections.

https://learn.utoronto.ca/courses-programs/business-professionals/courses/skill-builder-series

SD
Title: Re: Cryptocurrencies
Post by: emily on February 02, 2018, 03:12:13 PM
Reuters  says that a “cold wallet” should be used and should not be connected to the interrnet.. One of you said to upload code on Jaxx and then take the app off your phone/computer.  Does that make it cold?  isn’t the  global Jaxx Wallet connected to the internet  24/7 as it owned by a company?

“Coincheck has said the virtual coins were stored in a “hot wallet” instead of the more secure “cold wallet,” which operates on platforms not directly connected to the internet. The exchange was also not using an extra layer of security known as a multi-signature system”

https://www.reuters.com/article/uk-japan-cryptocurrency/japans-regulator-urged-coincheck-to-fix-flaws-before-530-million-cyber-theft-idUSKBN1FL6PL
Title: Re: Cryptocurrencies
Post by: Liberty on February 02, 2018, 04:21:56 PM
https://www.bloomberg.com/news/articles/2018-02-02/bofa-to-decline-all-cryptocurrency-transactions-on-credit-cards
Title: Re: Cryptocurrencies
Post by: emily on February 02, 2018, 07:50:47 PM
Lowest cost of mining bitcoin is $530 - $600. So could it drop as low as  $530 - $600 ?
Etherium  mining cost is about $89.00 .
Trying to see how low could these drop when bubble pops fully.
=============================================================================
According to the data, Venezuela was named as the cheapest place in the world to mine a single Bitcoin – $530. This was followed by Trinidad and Tobago ($1,190), and Uzbekistan ($1,790).
https://businesstech.co.za/news/banking/221837/the-cost-of-mining-bitcoin-in-south-africa-vs-other-countries/

Depending on your power prices it will cost anywhere from $600 (at 3 cents per Kwh) to $1,800 (at 9 cents per Kwh) to mine one coin.
https://www.forbes.com/sites/christopherhelman/2018/01/16/bitcoin-mining-uses-as-much-power-as-ireland-and-why-thats-not-a-problem/
Title: Re: Cryptocurrencies
Post by: SharperDingaan on February 02, 2018, 08:47:53 PM
Flying to Toronto is too expensive for me. Anything in US?

Just a quick FYI for those in the Toronto area, with an interest in crypto-token, block chain, smart contracts, etc.
Look at the 'Finance' and 'Innovation' sections.

https://learn.utoronto.ca/courses-programs/business-professionals/courses/skill-builder-series

SD

There will be an on-line version this Fall.
As at the beginning of last Fall there was nothing that I know of in the US - including Harvard!

SD

Title: Re: Cryptocurrencies
Post by: emily on February 03, 2018, 10:35:50 AM
Thank you SD (and to all others for helping me not lose money yet).
Title: Re: Cryptocurrencies
Post by: emily on February 03, 2018, 10:38:39 AM
So the bitcoin investment trust GBTC is at 30% premium to buying bitcoins. Not good. How else do I keep some crypto currency exposure in my retirement fund?  Are their options?
Title: Re: Cryptocurrencies
Post by: emily on February 03, 2018, 10:56:28 AM
Not sure which is legit and which ones may be worth keeping an eye on  (as we know everything is bloated right now). Any input?

https://finance.yahoo.com/quotes/CODE.CN,BTCS,BTL.V,CINGF,DCC.AX,XBLK.CN,BLOC.V,KODK,KASH.V,HIVE.V,MARA,MGTI,GBTC,RIOT,SRAX,GET.CN,VSQTF,DPW,GLNNF,SRAX,HPE,GAHC,HMNY,BITCF,BTCS,GAHC/view/v1
Title: Re: Cryptocurrencies
Post by: SharperDingaan on February 04, 2018, 08:31:15 AM
The smartest thing you can do right now - is educate yourself in the technology.  Forget the FOMO - crypto will be around for a long time, and it's hard to short.

As at yesterday there are 1,512 tokens/coins in the world - about 131 (9.5%) MORE than they were, just ONE month ago https://coinmarketcap.com/all/views/all/ . Pick 2-3 of the more obscure coins/tokens of interest & do a little research on them.

SD




 
Title: Re: Cryptocurrencies
Post by: Liberty on February 04, 2018, 01:39:00 PM
Scene straight out of the big short:

https://www.bloomberg.com/news/articles/2018-02-01/a-bitcoin-conference-rented-a-miami-strip-club-regrets-ensued
Title: Re: Cryptocurrencies
Post by: Jurgis on February 04, 2018, 02:26:04 PM
Scene straight out of the big short:

https://www.bloomberg.com/news/articles/2018-02-01/a-bitcoin-conference-rented-a-miami-strip-club-regrets-ensued

Strippers declined to take cryptos for lapdances?



Bitcoin conference motto: "Invest in crypto and get screwed!"
Title: Re: Cryptocurrencies
Post by: emily on February 04, 2018, 03:36:18 PM
What should I look for?

There isn’t much info on website of most. They have max supply and circulating supply numbers listed. Can they not increase the max supply? They also don't say what is unique that they can't be duplicated (or may be I don't understand).

I read that Ripple will be close to zero as time goes on as an example, and therefore what exactly to look for in these ICO’s?  Everyone seems to be starting ICO’s.


For example this cloakcoin, lists no names on the team just alias. Weird.
https://www.cloakcoin.com/resources/cloak-team.pdf



The smartest thing you can do right now - is educate yourself in the technology.  Forget the FOMO - crypto will be around for a long time, and it's hard to short.

As at yesterday there are 1,512 tokens/coins in the world - about 131 (9.5%) MORE than they were, just ONE month ago https://coinmarketcap.com/all/views/all/ . Pick 2-3 of the more obscure coins/tokens of interest & do a little research on them.

SD
Title: Re: Cryptocurrencies
Post by: wachtwoord on February 04, 2018, 04:41:37 PM
It's safest to assume all ICOs are scams or very bad investments. A waste of time to spend your time reading about.
Title: Re: Cryptocurrencies
Post by: Spekulatius on February 04, 2018, 07:37:44 PM
Scene straight out of the big short:

https://www.bloomberg.com/news/articles/2018-02-01/a-bitcoin-conference-rented-a-miami-strip-club-regrets-ensued

I guess every bubble goes through a stripclub phase, right before it pops. it appears like the mortgage / RE bubble had a strip club phase. I can personally attest to the telecom bubble in 2000 having a strip club phase - there we’re plenty good ones in Ottawa at that time. Now here we are in the crypto strip club phase. History does not exactly repeat, but it it does rhyme.
Title: Re: Cryptocurrencies
Post by: emily on February 04, 2018, 07:48:52 PM
So as I understand most ICO's may not be around once the bubble bursts. Any survivors?


Scene straight out of the big short:

https://www.bloomberg.com/news/articles/2018-02-01/a-bitcoin-conference-rented-a-miami-strip-club-regrets-ensued

I guess every bubble goes through a stripclub phase, right before it pops. it appears like the mortgage / RE bubble had a strip club phase. I can personally attest to the telecom bubble in 2000 having a strip club phase - there we’re plenty good ones in Ottawa at that time. Now here we are in the crypto strip club phase. History does not exactly repeat, but it it does rhyme.
Title: Re: Cryptocurrencies
Post by: SharperDingaan on February 04, 2018, 10:04:53 PM
What should I look for?

There isn’t much info on website of most. They have max supply and circulating supply numbers listed. Can they not increase the max supply? They also don't say what is unique that they can't be duplicated (or may be I don't understand).

I read that Ripple will be close to zero as time goes on as an example, and therefore what exactly to look for in these ICO’s?  Everyone seems to be starting ICO’s.


For example this cloakcoin, lists no names on the team just alias. Weird.
https://www.cloakcoin.com/resources/cloak-team.pdf



The smartest thing you can do right now - is educate yourself in the technology.  Forget the FOMO - crypto will be around for a long time, and it's hard to short.

As at yesterday there are 1,512 tokens/coins in the world - about 131 (9.5%) MORE than they were, just ONE month ago https://coinmarketcap.com/all/views/all/ . Pick 2-3 of the more obscure coins/tokens of interest & do a little research on them.

SD

You've just  learnt what most ICO's are - a whitepaper, a sketchy website, nothing 'patentable', a VERY 'questionable' ICO issuance, and often a token limit - indirectly tied to the 21M maximum of Bitcoin. You've learnt that if you put this stuff into a closed end investment fund, you can sell units in the fund at a 30% premium - when they should be sellling at a discount. And also learnt that it's these 'fund co's' and exchanges that get hacked (& your token stolen) versus the Bitcoin.org oracle itself. If you come from capital markets - you also know how to use Bitcoin options and futures to advantage; on the assumption that a falling tide lowers all boats.

The technology behind crypto-token is the distributed ledger, the blockchain, and the smart-contract. Your value add will be in learning how this works, keeping an open mind, and thinking outside the box. Sadly there's almost always a frat-boy 'blow-out', that is the human part of most market tops (movies get made). It's also a reliable indicator that the party is reaching its end - so use accordingly.

SD


Title: Re: Cryptocurrencies
Post by: emily on February 05, 2018, 08:48:41 AM
I have been wondering how wallets were secure as wallets app are owned by a third party and what happens to bitcoin code if the app is taken off? This does not really ansswer that question but..

https://cointelegraph.com/news/newly-discovered-vulnerability-in-all-ledger-hardware-wallets-puts-user-funds-at-risk
Title: Re: Cryptocurrencies
Post by: wachtwoord on February 05, 2018, 09:50:45 AM
Simple, what you refer to as "Wallet apps" are not wallets.

Run Bitcoin core, control your own keys: https://bitcoin.org/en/download
Title: Re: Cryptocurrencies
Post by: emily on February 05, 2018, 10:02:39 AM
Thank you. That makes sense. Does that mean I need to save my desktop all the time to preserve the downloaded software or it downloads just the bitcoin code in a specific folder so that I can save that folder in an online backup or to a USB?

Simple, what you refer to as "Wallet apps" are not wallets.

Run Bitcoin core, control your own keys: https://bitcoin.org/en/download
Title: Re: Cryptocurrencies
Post by: emily on February 06, 2018, 07:08:31 AM
Hearing on Cryptocurrencies : :Live

https://www.c-span.org/video/?440770-1/jay-clayton-christopher-giancarlo-testify-hearing-virtual-currencies
Title: Re: Cryptocurrencies
Post by: emily on February 06, 2018, 11:28:08 AM
Is there a reliable source for mining cost of bitcoin? Is this $530 value as mining cost real?  Mining cost of $89.00 for Etherium? I suspect the mining cost could go down by tapping solar energy.


Lowest cost of mining bitcoin is $530 - $600. So could it drop as low as  $530 - $600 ?
Etherium  mining cost is about $89.00 .
Trying to see how low could these drop when bubble pops fully.
=============================================================================
According to the data, Venezuela was named as the cheapest place in the world to mine a single Bitcoin – $530. This was followed by Trinidad and Tobago ($1,190), and Uzbekistan ($1,790).
https://businesstech.co.za/news/banking/221837/the-cost-of-mining-bitcoin-in-south-africa-vs-other-countries/

Depending on your power prices it will cost anywhere from $600 (at 3 cents per Kwh) to $1,800 (at 9 cents per Kwh) to mine one coin.
https://www.forbes.com/sites/christopherhelman/2018/01/16/bitcoin-mining-uses-as-much-power-as-ireland-and-why-thats-not-a-problem/
Title: Re: Cryptocurrencies
Post by: SharperDingaan on February 06, 2018, 12:12:28 PM
Is there a reliable source for mining cost of bitcoin? Is this $530 value as mining cost real?  Mining cost of $89.00 for Etherium? I suspect the mining cost could go down by tapping solar energy.


Lowest cost of mining bitcoin is $530 - $600. So could it drop as low as  $530 - $600 ?
Etherium  mining cost is about $89.00 .
Trying to see how low could these drop when bubble pops fully.
=============================================================================
According to the data, Venezuela was named as the cheapest place in the world to mine a single Bitcoin – $530. This was followed by Trinidad and Tobago ($1,190), and Uzbekistan ($1,790).
https://businesstech.co.za/news/banking/221837/the-cost-of-mining-bitcoin-in-south-africa-vs-other-countries/

Depending on your power prices it will cost anywhere from $600 (at 3 cents per Kwh) to $1,800 (at 9 cents per Kwh) to mine one coin.
https://www.forbes.com/sites/christopherhelman/2018/01/16/bitcoin-mining-uses-as-much-power-as-ireland-and-why-thats-not-a-problem/

It's not far off - one of the papers on this thread suggests Etherium was spending around $1M/day.
It's also (in part) why some are skeptical of the Bitcoin 21M coin limit - as the choices are either pay this per transaction, or pay nothing if new token are issued. Most likely as initial additional token up to the amount thought 'lost' over the years (therefore still a maximum 21M), then maybe 1% year thereafter - 'forever'. Controversial.

SD

 
Title: Re: Cryptocurrencies
Post by: nodnub on February 06, 2018, 03:17:27 PM
Thank you. That makes sense. Does that mean I need to save my desktop all the time to preserve the downloaded software or it downloads just the bitcoin code in a specific folder so that I can save that folder in an online backup or to a USB?

Simple, what you refer to as "Wallet apps" are not wallets.

Run Bitcoin core, control your own keys: https://bitcoin.org/en/download

Emily, if you run bitcoin core, it downloads the whole blockchain..
"Bitcoin Core initial synchronization will take time and download a lot of data. You should make sure that you have enough bandwidth and storage for the full block chain size (over 145GB)"


If you do run bitcoin-core, I think you only need to back up your wallet address and private key to preserve your account. That takes almost no storage space at all. But if you lose that you lose all your bitcoins.
Title: Re: Cryptocurrencies
Post by: nodnub on February 06, 2018, 03:30:13 PM
No, it's clearly not the real cost.... it's a simplified comparison based purely on electricity cost.

Firstly, it's doubtful that they used the volume rate electricity cost, which can be more expensive than the cost for small consumer accts in some countries.

Secondly, Venezuela with power cost of $530 is obviously an outlier because they have heavily subsidized electricity cost. It is difficult and dangerous to mine bitcoin in Venezuela and you can expect the police and govt to try to seize your equipment to run it themselves.  There was a recent news article about this.  You have to smuggle the equipment into VZ and then you have to defend the equipment and mine in secrecy.  You also can't concentrate all your equipment in one location due to risk of seizure.

Thirdly, this fake "mining cost" does not include the capital cost of the mining hardware, which is significant. As the bitcoin algorithm difficulty keeps growing, the hardware may be uneconomic to use for mining within a year or two.

Fourth, there are real costs in labour in setting up, managing the mining equipment, securing it, possibly upgrading power service from the power company, rent, etc.


Is there a reliable source for mining cost of bitcoin? Is this $530 value as mining cost real?  Mining cost of $89.00 for Etherium? I suspect the mining cost could go down by tapping solar energy.


Lowest cost of mining bitcoin is $530 - $600. So could it drop as low as  $530 - $600 ?
Etherium  mining cost is about $89.00 .
Trying to see how low could these drop when bubble pops fully.
=============================================================================
According to the data, Venezuela was named as the cheapest place in the world to mine a single Bitcoin – $530. This was followed by Trinidad and Tobago ($1,190), and Uzbekistan ($1,790).
https://businesstech.co.za/news/banking/221837/the-cost-of-mining-bitcoin-in-south-africa-vs-other-countries/

Depending on your power prices it will cost anywhere from $600 (at 3 cents per Kwh) to $1,800 (at 9 cents per Kwh) to mine one coin.
https://www.forbes.com/sites/christopherhelman/2018/01/16/bitcoin-mining-uses-as-much-power-as-ireland-and-why-thats-not-a-problem/
Title: Re: Cryptocurrencies
Post by: Liberty on February 07, 2018, 03:54:12 AM
https://twitter.com/peterktodd/status/960879611231039495

https://twitter.com/sallyshin/status/961111771246465025
Title: Re: Cryptocurrencies
Post by: wachtwoord on February 07, 2018, 06:45:46 AM
Thank you. That makes sense. Does that mean I need to save my desktop all the time to preserve the downloaded software or it downloads just the bitcoin code in a specific folder so that I can save that folder in an online backup or to a USB?

Simple, what you refer to as "Wallet apps" are not wallets.

Run Bitcoin core, control your own keys: https://bitcoin.org/en/download

Emily, if you run bitcoin core, it downloads the whole blockchain..
"Bitcoin Core initial synchronization will take time and download a lot of data. You should make sure that you have enough bandwidth and storage for the full block chain size (over 145GB)"


If you do run bitcoin-core, I think you only need to back up your wallet address and private key to preserve your account. That takes almost no storage space at all. But if you lose that you lose all your bitcoins.

Exactly, backup the wallet.dat (but not online this is your money!...). Of course you need to download the entire blockchain otherwise you can't verify anything.

Thin wallets (or exchanges) are for people that like trusting third parties only in exchange for some convenience.
Title: Re: Cryptocurrencies
Post by: SharperDingaan on February 07, 2018, 09:22:12 AM
I have just been advised that both the 'Blockchain' and 'Bitcoin' courses were caught up in the Facebook crypto advertising ban, and that they have now been given permission to advertise on Facebook.

Little goes viral in academia quite like a formerly banned course - and on social media no less.
I feel so proud!

SD

Just a quick FYI for those in the Toronto area, with an interest in crypto-token, block chain, smart contracts, etc.
Look at the 'Finance' and 'Innovation' sections.

https://learn.utoronto.ca/courses-programs/business-professionals/courses/skill-builder-series

SD
Title: Re: Cryptocurrencies
Post by: emily on February 08, 2018, 02:07:55 PM
I check bitcoin price at least 5-7 times a day even though I have no stake in it. I wonder once I do and if it falls a lot , I would be glued to it as it trades 24 hours. Scary. So am trying to see where approx. the bottom may be. One is mining cost that could still go down with lower energy cost and if they end up mining bitcoin more than 21M.

Roubini says bitcoin could drop between $20 and $89 (says bubble to the power of 2 or 3). Is this guy reliable?

https://www.bloomberg.com/news/videos/2018-02-02/nouriel-roubini-says-bitcoin-is-much-worse-than-tulipmania-video

Title: Re: Cryptocurrencies
Post by: Liberty on February 08, 2018, 02:46:05 PM
I check bitcoin price at least 5-7 times a day even though I have no stake in it. I wonder once I do and if it falls a lot , I would be glued to it as it trades 24 hours. Scary.

Sounds like you have the gambling gene. When you notice that, the proper thing to do is to stay away from gambling.
Title: Re: Cryptocurrencies
Post by: SharperDingaan on February 08, 2018, 03:13:55 PM
I check bitcoin price at least 5-7 times a day even though I have no stake in it. I wonder once I do and if it falls a lot , I would be glued to it as it trades 24 hours. Scary.

Sounds like you have the gambling gene. When you notice that, the proper thing to do is to stay away from gambling.

Agreed; you have to control the money - and not allow the money to control you. There are lots of examples of folks who let the money go to their heads, then discovering that it often destroys lives. Victims range from yesterdays plumber suddenly winning the lottery, to celebrities dying from overdoses. Part of tuition - is learning how to deal with wealth (& lack of).

SD

Title: Re: Cryptocurrencies
Post by: roughlyright on February 08, 2018, 03:36:54 PM
I check bitcoin price at least 5-7 times a day even though I have no stake in it. I wonder once I do and if it falls a lot , I would be glued to it as it trades 24 hours. Scary. So am trying to see where approx. the bottom may be. One is mining cost that could still go down with lower energy cost and if they end up mining bitcoin more than 21M.

Roubini says bitcoin could drop between $20 and $89 (says bubble to the power of 2 or 3). Is this guy reliable?

https://www.bloomberg.com/news/videos/2018-02-02/nouriel-roubini-says-bitcoin-is-much-worse-than-tulipmania-video

I think there is zero probability that will happen. It will be interesting if Roubini actually puts his money where his mouth is and take this bet with me on longbets site. I am open to anyone who wants to bet with me on this :-)
Title: Re: Cryptocurrencies
Post by: no_free_lunch on February 08, 2018, 06:42:02 PM
Major buy signal for crypto came out today.  :)   Still no position.

https://www.bloomberg.com/news/articles/2018-02-07/get-ready-for-most-cryptocurrencies-to-hit-zero-goldman-says
Title: Re: Cryptocurrencies
Post by: emily on February 09, 2018, 10:59:04 AM
Steve Wozniak Sold All His Bitcoin: Bought It At $700

https://www.investopedia.com/news/steve-wozniak-has-sold-his-bitcoin/
Title: Re: Cryptocurrencies
Post by: emily on February 09, 2018, 11:01:49 AM
Winklevoss brothers buy bitcoin at $8.00 and worried about hack, so store in their own vault, Gemini.

https://www.bloomberg.com/news/videos/2018-02-07/winklevoss-brothers-are-long-on-cryptocurrencies-video
Title: Re: Cryptocurrencies
Post by: emily on February 09, 2018, 11:15:08 AM
SD: Best I have heard and so true. Thank you.  "You have to control the money - and not allow the money to control you"

May be I have a gambling gene. I have never played even a dime in Las Vegas or in any slot machine. Trying to do my homework than hoping for a homerun. So, is there a measure of intrinsic value or a floor to bitcoin's value?


I check bitcoin price at least 5-7 times a day even though I have no stake in it. I wonder once I do and if it falls a lot , I would be glued to it as it trades 24 hours. Scary.

Sounds like you have the gambling gene. When you notice that, the proper thing to do is to stay away from gambling.

Agreed; you have to control the money - and not allow the money to control you. There are lots of examples of folks who let the money go to their heads, then discovering that it often destroys lives. Victims range from yesterdays plumber suddenly winning the lottery, to celebrities dying from overdoses. Part of tuition - is learning how to deal with wealth (& lack of).

SD
Title: Re: Cryptocurrencies
Post by: no_free_lunch on February 09, 2018, 02:21:39 PM
So, is there a measure of intrinsic value or a floor to bitcoin's value?


All I know is there are people much smarter than me who can't come to agreement on what it's intrinsic value is.  I think it's proportional to the network of users but what does that even mean? 

The floor is something that you can establish, it's 0.  It's just software running on a bunch of computers.  If a better version comes along, it's worthless.
Title: Re: Cryptocurrencies
Post by: SharperDingaan on February 09, 2018, 02:35:02 PM
Just throwing out a guess here - but somewhere between EURO 1-2.

It will very likely always be more valuable to the criminal element than a EURO 1 coin - simply because it's annonymous and electronic. How much more will depend on how much someone is trying to buy at the time, and why they are buying. On any given day, anyone in the world trying to hide assets in a divorce proceeding, might quite happily pay 'above market' - in the expectation that even if they end up selling at a loss, it's highly unlikely to be 50%. Therefore a maximum of 2 EURO. 

SD