Author Topic: Cryptocurrencies  (Read 28571 times)

writser

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Re: Cryptocurrencies
« Reply #210 on: November 09, 2017, 06:09:39 AM »
When you are dead, you do not know you are dead. It's only painful and difficult for others. The same applies when you are stupid.


no_free_lunch

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Re: Cryptocurrencies
« Reply #211 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

Chia site w/ whitepaper and talk
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.

no_free_lunch

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Re: Cryptocurrencies
« Reply #212 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
« Last Edit: November 11, 2017, 07:48:43 AM by no_free_lunch »

SharperDingaan

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Re: Cryptocurrencies
« Reply #213 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
         

Libs

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Re: Cryptocurrencies
« Reply #214 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
My username is not a political statement.....and I'm too lazy to change it.

Jurgis

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Re: Cryptocurrencies
« Reply #215 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)
« Last Edit: December 14, 2017, 10:59:20 PM by Jurgis »

rkbabang

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Re: Cryptocurrencies
« Reply #216 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.


mattee2264

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Re: Cryptocurrencies
« Reply #217 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.

Jurgis

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Re: Cryptocurrencies
« Reply #218 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!

Jurgis

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