Author Topic: Crypto Skeptics Thread  (Read 16268 times)

L.A.S.

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Re: Crypto Skeptics Thread
« Reply #50 on: January 06, 2018, 11:34:05 AM »
A crypto-currency based on a dog meme is now worth over $1 billion

Why does this Hunter S. Thompson quote keep coming to mind:

"When the going gets weird, the weird turn pro."

forgerator

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Re: Crypto Skeptics Thread
« Reply #51 on: January 06, 2018, 10:31:35 PM »
I just bought a soda from the office machine for $0.25.  It was a trivial transaction.

I didn't have to get a digital wallet off of an offline secure hard drive.  No internet connectivity was required.  Hell, if the power went out I would have had the secretary unlock the machine or grabbed a warm one plus ice from the freezer.  There were no transaction fees, it breaks a dollar with no crypto tax on top.

I see a long way for crypto currencies to go before I can casually grab a soda with them.  With transaction fees of $20 for bitcoin and $0.80 for etherium they only make sense when dealing with roughly kilo-dollar magnitude or more.  I don't make a lot of those.  And of those I have yet to see a "Bitcoin accepted here" sign at any of them (my mortgage company comes to mind).  So I see no point in figuring out digital wallets, secure offline storage for my life savings, even adding more crappy apps onto my phone.

Meh.  I counter all the over caffeinated exuberance from all these crypto fan boys with "Meh."  I hear every word and just can't work up more than a shoulder shrug for all the supposed use cases and value propositions.  Someday I predict that peoples coins will end up in a pile in the corner with those old AOL CD's of precisely the same intrinsic value.

Ever heard of Raiblocks? It allows for instant transfer and $0 transaction fee. Someone on reddit showed a screenshot of sending / receiving around a million USD using XRB (Raiblocks) at no cost. Now that is powerful...

The point is that Bitcoin,  Ethereum etc. are just the start , like 1st gen of crypto. As newer ones like Raiblock and others come out with newer advanced features it will only seek to further adoption of digital currencies and assets.

L.A.S.

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Re: Crypto Skeptics Thread
« Reply #52 on: January 07, 2018, 06:36:21 AM »
I just bought a soda from the office machine for $0.25.  It was a trivial transaction.

I didn't have to get a digital wallet off of an offline secure hard drive.  No internet connectivity was required.  Hell, if the power went out I would have had the secretary unlock the machine or grabbed a warm one plus ice from the freezer.  There were no transaction fees, it breaks a dollar with no crypto tax on top.

I see a long way for crypto currencies to go before I can casually grab a soda with them.  With transaction fees of $20 for bitcoin and $0.80 for etherium they only make sense when dealing with roughly kilo-dollar magnitude or more.  I don't make a lot of those.  And of those I have yet to see a "Bitcoin accepted here" sign at any of them (my mortgage company comes to mind).  So I see no point in figuring out digital wallets, secure offline storage for my life savings, even adding more crappy apps onto my phone.

Meh.  I counter all the over caffeinated exuberance from all these crypto fan boys with "Meh."  I hear every word and just can't work up more than a shoulder shrug for all the supposed use cases and value propositions.  Someday I predict that peoples coins will end up in a pile in the corner with those old AOL CD's of precisely the same intrinsic value.

Ever heard of Raiblocks? It allows for instant transfer and $0 transaction fee. Someone on reddit showed a screenshot of sending / receiving around a million USD using XRB (Raiblocks) at no cost. Now that is powerful...

The point is that Bitcoin,  Ethereum etc. are just the start , like 1st gen of crypto. As newer ones like Raiblock and others come out with newer advanced features it will only seek to further adoption of digital currencies and assets.


Oooookaayyy.....

Are you going to come back and give us all a heads up before you plan to dump, too?

sherr

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Re: Crypto Skeptics Thread
« Reply #53 on: January 07, 2018, 07:50:07 AM »
I just bought a soda from the office machine for $0.25.  It was a trivial transaction.

I didn't have to get a digital wallet off of an offline secure hard drive.  No internet connectivity was required.  Hell, if the power went out I would have had the secretary unlock the machine or grabbed a warm one plus ice from the freezer.  There were no transaction fees, it breaks a dollar with no crypto tax on top.

I see a long way for crypto currencies to go before I can casually grab a soda with them.  With transaction fees of $20 for bitcoin and $0.80 for etherium they only make sense when dealing with roughly kilo-dollar magnitude or more.  I don't make a lot of those.  And of those I have yet to see a "Bitcoin accepted here" sign at any of them (my mortgage company comes to mind).  So I see no point in figuring out digital wallets, secure offline storage for my life savings, even adding more crappy apps onto my phone.

Meh.  I counter all the over caffeinated exuberance from all these crypto fan boys with "Meh."  I hear every word and just can't work up more than a shoulder shrug for all the supposed use cases and value propositions.  Someday I predict that peoples coins will end up in a pile in the corner with those old AOL CD's of precisely the same intrinsic value.

Ever heard of Raiblocks? It allows for instant transfer and $0 transaction fee. Someone on reddit showed a screenshot of sending / receiving around a million USD using XRB (Raiblocks) at no cost. Now that is powerful...

The point is that Bitcoin,  Ethereum etc. are just the start , like 1st gen of crypto. As newer ones like Raiblock and others come out with newer advanced features it will only seek to further adoption of digital currencies and assets.


Oooookaayyy.....

Are you going to come back and give us all a heads up before you plan to dump, too?

I think his actual point is valid and relevant to this thread. Even if there are actual use-cases for cryptocurrencies or blockchain that will cause one or the other to stick around, the long-term value of any particular cryptocurrency is zero. There will always be a newer, better iteration that is easier or faster or cheaper or whatever. And eventually everyone will jump ship from $currentThing to $newerBetterThing.

That to me is the biggest and most obvious reason why one should be skeptical about "investing" in a cryptocurrency. It's not investing, it's 100% buy-low-sell-high market timing.

Travis

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Re: Crypto Skeptics Thread
« Reply #54 on: January 07, 2018, 09:59:48 AM »
I just bought a soda from the office machine for $0.25.  It was a trivial transaction.

I didn't have to get a digital wallet off of an offline secure hard drive.  No internet connectivity was required.  Hell, if the power went out I would have had the secretary unlock the machine or grabbed a warm one plus ice from the freezer.  There were no transaction fees, it breaks a dollar with no crypto tax on top.

I see a long way for crypto currencies to go before I can casually grab a soda with them.  With transaction fees of $20 for bitcoin and $0.80 for etherium they only make sense when dealing with roughly kilo-dollar magnitude or more.  I don't make a lot of those.  And of those I have yet to see a "Bitcoin accepted here" sign at any of them (my mortgage company comes to mind).  So I see no point in figuring out digital wallets, secure offline storage for my life savings, even adding more crappy apps onto my phone.

Meh.  I counter all the over caffeinated exuberance from all these crypto fan boys with "Meh."  I hear every word and just can't work up more than a shoulder shrug for all the supposed use cases and value propositions.  Someday I predict that peoples coins will end up in a pile in the corner with those old AOL CD's of precisely the same intrinsic value.

Ever heard of Raiblocks? It allows for instant transfer and $0 transaction fee. Someone on reddit showed a screenshot of sending / receiving around a million USD using XRB (Raiblocks) at no cost. Now that is powerful...

The point is that Bitcoin,  Ethereum etc. are just the start , like 1st gen of crypto. As newer ones like Raiblock and others come out with newer advanced features it will only seek to further adoption of digital currencies and assets.


Oooookaayyy.....

Are you going to come back and give us all a heads up before you plan to dump, too?

I think his actual point is valid and relevant to this thread. Even if there are actual use-cases for cryptocurrencies or blockchain that will cause one or the other to stick around, the long-term value of any particular cryptocurrency is zero. There will always be a newer, better iteration that is easier or faster or cheaper or whatever. And eventually everyone will jump ship from $currentThing to $newerBetterThing.

That to me is the biggest and most obvious reason why one should be skeptical about "investing" in a cryptocurrency. It's not investing, it's 100% buy-low-sell-high market timing.

We all know today that social media as a technology and culture is worth billions of dollars.  Imagine if 10 years ago we were bidding up the stock on Twitter or Myspace to the tune of 1000% in a single year.  Look at where we are now.  Blockchain may be revolutionary. Bitcoin may not.  For all we know it will be the Pets.com of the internet boom.  There's a fair bet that of these handful of cryptocurrencies on the market, only one will survive to the endgame.  Best of luck picking it.
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Padonak

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Re: Crypto Skeptics Thread
« Reply #55 on: January 07, 2018, 12:02:49 PM »
Here's a little cautionary tale about crypto.

In mid December last year, a friend of mine mentioned that he had talked to a "crypto guru" who had made a fuck ton of money on cryto (or so he said). That guy offered my friend "investment" advice a fee of around $13K. Minimum investment was something like $130K (Red flag right there, can't you "invest" as little as you want in crypto? It's not like you're buying a house ffs), potentially doubling or tripling in value within a month or two.

My friend didn't have any details at the time but asked me for advice. I had been following the crypto space closely but had zero "investments" at the time (and still zero as of now), so I said to him that I wouldn't do if I were him it because my risk tolerance is too low for that, but who am I to stop him. I said, tongue in cheek, that maybe it was his chance to make a ton of money and get out of the rat race and I would still be riding the fucking subway to work shoulder to shoulder with other poor bastards with similarly low risk tolerance.

I talked to my friend again today. He paid the "guru" and "invested" either in some stupid crypto currency or a scam ICO. He still didn't tell me the details, but he said that he already lost most of the money he had put in. In December, he wanted to "invest" in Ripple, but the "guru" said it was stupid and talked him out of it. Instead he offered another "investment" idea which apparently didn't work out. My friend wants to get the "advisory fee" back, but good luck with that.

Luckily this story is not based on my own experience. Like the saying goes, smart people learn from others' mistakes, average people learn from their own, stupid people don't learn.

As for me, I'm sitting this one out. I don't care if I'm missing out on a once in a lifetime opportunity to get rich quick. I just hope that the crypto bubble bursts before it becomes big enough to drag the entire economy down with it into another recession.
« Last Edit: January 07, 2018, 12:22:31 PM by Padonak »

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Re: Crypto Skeptics Thread
« Reply #56 on: January 07, 2018, 12:50:52 PM »
Padonak,

This is the sort of stuff that I am afraid of (more for the individuals, less for the market as a whole).

Since I am mining ETH and XMR people at my work come to ask me about cryptocurrencies. They are always super excited and think that they can only go up? I always explain to them that I've invested ~$3K in hardware in the last year (hardware that I will still have if cryptocurrency goes to zero) and ~$23K in stocks. That usually doesn't calm them down, but it at least eases my conscience.

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Re: Crypto Skeptics Thread
« Reply #57 on: January 08, 2018, 10:05:16 AM »
One of MMM's links in his blog post was particularly good: https://blog.chain.com/a-letter-to-jamie-dimon-de89d417cb80

The scariest quote:
"The basic model is to pre-sell some percentage of the crypto assets the proposed network will generate as a way to fund the development of the decentralized application before it launches. The project founders tend to hold on to some percentage of these assets. Which means that raising money for a project this way is a) non-dilutive as it is not equity and b) not debt, so you never have to pay anyone back. This is basically free money. It’s never been this good for entrepreneurs, even in the 90s dot-com boom. Which makes it incredibly tempting to try and shoe-horn every project that could perhaps justify an “initial coin offering” to go for it, even if they aren’t actually building a decentralized application. After all, an ICO lets you exit before you even launch."

This really looks like it means any yahoo can say, "Hey! I've got this great Killer App! Buy some of the crypto I'm selling to finance it!" But they're lying - there's nothing. No decentralized application, nothing. They just walk away with speculators' actual, real, money, and leave them with worthless crypto. It's fraud, and it's almost impossible, if not completely impossible, to prosecute.

The mind boggles. I just hope it only takes down the speculators, and doesn't kick off an actual recession.

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Re: Crypto Skeptics Thread
« Reply #58 on: January 08, 2018, 11:18:59 AM »
Just saw this. Prices being driven by speculation is clear, that's for sure! I got a giggle out of it.

https://arstechnica.com/tech-policy/2018/01/remember-dogecoin-the-joke-currency-soared-to-2-billion-this-weekend/?amp=1
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sol

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Re: Crypto Skeptics Thread
« Reply #59 on: January 08, 2018, 11:40:22 AM »
One recent report suggests bitcoin currently consumes 0.1%  of all electricity produced on the planet.  More than some entire nations.

Does anyone believe bitcoin represents 0.1% of the work done, or the value created, or the GDP of the planet?  Because that seems like a colossal waste of (mostly carbon-burning) electricity for something that has approximately zero adoption rate or utility to the global economy.
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Re: Crypto Skeptics Thread
« Reply #60 on: January 08, 2018, 11:54:56 AM »
https://steamcommunity.com/games/593110/announcements/detail/1464096684955433613

Quote
Steam is no longer supporting Bitcoin
December 6, 2017 - Kurtis   
As of today, Steam will no longer support Bitcoin as a payment method on our platform due to high fees and volatility in the value of Bitcoin.

In the past few months we've seen an increase in the volatility in the value of Bitcoin and a significant increase in the fees to process transactions on the Bitcoin network. For example, transaction fees that are charged to the customer by the Bitcoin network have skyrocketed this year, topping out at close to $20 a transaction last week (compared to roughly $0.20 when we initially enabled Bitcoin). Unfortunately, Valve has no control over the amount of the fee. These fees result in unreasonably high costs for purchasing games when paying with Bitcoin. The high transaction fees cause even greater problems when the value of Bitcoin itself drops dramatically.

Historically, the value of Bitcoin has been volatile, but the degree of volatility has become extreme in the last few months, losing as much as 25% in value over a period of days. This creates a problem for customers trying to purchase games with Bitcoin. When checking out on Steam, a customer will transfer x amount of Bitcoin for the cost of the game, plus y amount of Bitcoin to cover the transaction fee charged by the Bitcoin network. The value of Bitcoin is only guaranteed for a certain period of time so if the transaction doesn’t complete within that window of time, then the amount of Bitcoin needed to cover the transaction can change. The amount it can change has been increasing recently to a point where it can be significantly different.

The normal resolution for this is to either refund the original payment to the user, or ask the user to transfer additional funds to cover the remaining balance. In both these cases, the user is hit with the Bitcoin network transaction fee again. This year, we’ve seen increasing number of customers get into this state. With the transaction fee being so high right now, it is not feasible to refund or ask the customer to transfer the missing balance (which itself runs the risk of underpayment again, depending on how much the value of Bitcoin changes while the Bitcoin network processes the additional transfer).

So to buy a $40 video game might cost $20 in transaction fees! And if the BTC value changes before the (hours?) long transaction time you might have to add BTC funds, and pay it again! Wasn't this supposed to free us from the oppression and fees from the big, evil banks?? Everything I read about BTC (and others) it seems worse in every way, which is quite an achievement. It's slow, expensive, fraud-prone, and consume a household's worth of power to use!

Also hilarious how the comments are full of people touting other pump-and-dumb schemes, sorry; "alt-coins".

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Re: Crypto Skeptics Thread
« Reply #61 on: January 08, 2018, 03:41:02 PM »
So to buy a $40 video game might cost $20 in transaction fees! And if the BTC value changes before the (hours?) long transaction time you might have to add BTC funds, and pay it again! Wasn't this supposed to free us from the oppression and fees from the big, evil banks?? Everything I read about BTC (and others) it seems worse in every way, which is quite an achievement. It's slow, expensive, fraud-prone, and consume a household's worth of power to use!

This is what I said earlier. Bitcoin is now proven to not work. We may get an alternative but who knows what that will be.

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Re: Crypto Skeptics Thread
« Reply #62 on: January 09, 2018, 10:54:01 AM »

This really looks like it means any yahoo can say, "Hey! I've got this great Killer App! Buy some of the crypto I'm selling to finance it!" But they're lying - there's nothing. No decentralized application, nothing. They just walk away with speculators' actual, real, money, and leave them with worthless crypto. It's fraud, and it's almost impossible, if not completely impossible, to prosecute.

What's worse is the the yahoo doesn't even need to have bad intentions.  The ICO's free money sets up a perverse incentive that increases their chance of failing to deliver.  I've worked in the startup scene long enough to know that the only thing driving 99% of the folks is the promise of future payout.  If they've already got their cash with no commitment to deliver, why would they do the incredibly hard work of building a business?

L.A.S.

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Re: Crypto Skeptics Thread
« Reply #63 on: January 10, 2018, 10:52:39 AM »
So to buy a $40 video game might cost $20 in transaction fees! And if the BTC value changes before the (hours?) long transaction time you might have to add BTC funds, and pay it again! Wasn't this supposed to free us from the oppression and fees from the big, evil banks?? Everything I read about BTC (and others) it seems worse in every way, which is quite an achievement. It's slow, expensive, fraud-prone, and consume a household's worth of power to use!

This is what I said earlier. Bitcoin is now proven to not work. We may get an alternative but who knows what that will be.

Agreed on the first part...  I mean if bitcoin is such a great great way to replace government-backed money, well it already exists.  Why haven't we all replaced our government-backed money, yet? Right, because of all the problems with bitcoin, most of which arguably can't be solved within the bitcoin framework.  New cryptos would need to be cooked up.  So the bitcoin itself is basically DOA.

On the second part, I take it a step further: we already have alternatives.  Many of them.  No one wants to use them to replace government backed money either, as a far as I can tell. 
« Last Edit: January 11, 2018, 08:50:50 AM by L.A.S. »

MrThatsDifferent

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Re: Crypto Skeptics Thread
« Reply #64 on: January 10, 2018, 09:46:07 PM »

PDXTabs

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Re: Crypto Skeptics Thread
« Reply #65 on: January 11, 2018, 11:09:11 AM »
Warren Buffet has officially joined this list!

Yea, but he also avoided buying tech stocks for more than 30 years.

On a related note: Miami Bitcoin Conference Stops Accepting Bitcoin Due to Fees and Congestion

L.A.S.

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Re: Crypto Skeptics Thread
« Reply #66 on: January 11, 2018, 12:27:48 PM »

L.A.S.

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Re: Crypto Skeptics Thread
« Reply #67 on: January 11, 2018, 12:33:42 PM »
Warren Buffet has officially joined this list!

Yea, but he also avoided buying tech stocks for more than 30 years.

On a related note: Miami Bitcoin Conference Stops Accepting Bitcoin Due to Fees and Congestion

I'm frankly surprised bitcoin pro-users would consider spending their bitcoins in order to attend such conference...

I mean, if one spends the units of bitcoin to attend, then they can't hodl it and watch it go up in price.  In the course of a week they could possibly see a doubling or tripling of the quoted price of their hodlings.  And, isn't that the primary purpose of cryptos right now? 
« Last Edit: January 11, 2018, 12:35:21 PM by L.A.S. »

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Re: Crypto Skeptics Thread
« Reply #68 on: January 11, 2018, 02:13:47 PM »
At least one nation could be on the verge of banning crypto trading...

https://www.cnbc.com/2018/01/10/south-korea-official-reportedly-readying-bill-to-ban-all-cryptocurrency-trading.html

Hearing this from other people, supposedly it's more like they're suspending cryptocurrency use until they get some regulations on the books.  This could take months though.
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FireLane

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Re: Crypto Skeptics Thread
« Reply #69 on: January 12, 2018, 02:24:04 PM »
The creator of Dogecoin, a cryptocurrency intended as a joke that now has a $2 billion market cap, says "something is very wrong" with crypto markets:

https://motherboard.vice.com/en_us/article/9kng57/dogecoin-my-joke-cryptocurrency-hit-2-billion-jackson-palmer-opinion

Quote
Given the immense price increases and media hype, there's a tendency to see 2017 as the best year for cryptocurrencies yet, but I would argue the opposite. In many ways, 2017 marked the year that cryptocurrency stopped being about technologically innovative peer-to-peer cash and instead essentially became a new, unregulated penny stock market.

L.A.S.

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Re: Crypto Skeptics Thread
« Reply #70 on: January 13, 2018, 06:23:42 AM »
Indonesia bans certain companies from using crypto currencies.

https://www.reuters.com/article/us-markets-bitcoin-indonesia/indonesia-central-bank-warns-over-cryptocurrencies-idUSKBN1F20A7?il=0


"The ownership of virtual currencies is high risk and prone to speculation because there is no authority who takes responsibility, there is no official administrator and there is no underlying asset to be the basis for the price," BI spokesman Agusman said in a statement issued late on Friday.

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Re: Crypto Skeptics Thread
« Reply #71 on: January 13, 2018, 09:19:38 AM »
Aside from all these issues, the technology itself doesn't seem to be designed to scale to a world-wide, or even a national, state or municipal level.   If the technical folks on the forum know different, please feel free to correct me.   I don't claim to be an expert.

The original purpose of bitcoin was to address the problem of double-spending electronic currency.   e.g.  I have 10 BC, and I spend 8 BC with Joe followed by a few milliseconds later, I spend 8 BC with Bob.   Somebody just lost 6 BC if these transactions clear.  So how to prevent both transactions from clearing?

"Satoshi"'s solution to this was to log every transaction in a global distributed ledger, so that nobody could commit a transaction without having the purchasers current balance checked.   He had some interesting economic incentives to convince people to participate in the system.

Then to determine my balance, you need to walk through all the transactions and add up every transaction that's been applied to me.

So there are a couple of scalability problems right here:

First, the ledger gets very very big quickly.   There are billions of transactions every day in the world.
Second, to compute someone's balance, you need to walk through all of those transactions.
Third, you need to do this to verify every transaction.

Satoshi added a proof of work to ensure that it would be very difficult for an adversary to corrupt the ledger.    The proof of work requires that somebody (i.e. a bitcoin node) execute a computationally intensive activity in order to sign a new block of transactions.   The digital signature includes information from previous blocks in the chain - hence the term "block-chain" - all the blocks are chained together via their digital signatures.

The crypto stuff required for the "proof of work" just exacerbates the first 3 scalability problems.

Now I haven't been following the technology closely - so maybe someone has developed solutions for these.   But I don't see them discussed in the usual web articles on scalability.   Instead, everyone is complaining about limits on blocks per second & maybe we should make the blocks bigger so that they can contain more transactions and so on.

It seems to me that this won't help - it improves scalability linearly, but the scalability of the design deteriorates quadratically with the number of transactions.  If we deal with the first order scalability problems, we'll just run into the more fundamental scalability problems a bit later.
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Re: Crypto Skeptics Thread
« Reply #72 on: January 13, 2018, 10:54:36 AM »
Aside from all these issues, the technology itself doesn't seem to be designed to scale to a world-wide, or even a national, state or municipal level.   If the technical folks on the forum know different, please feel free to correct me.   I don't claim to be an expert.

The original purpose of bitcoin was to address the problem of double-spending electronic currency.   e.g.  I have 10 BC, and I spend 8 BC with Joe followed by a few milliseconds later, I spend 8 BC with Bob.   Somebody just lost 6 BC if these transactions clear.  So how to prevent both transactions from clearing?

"Satoshi"'s solution to this was to log every transaction in a global distributed ledger, so that nobody could commit a transaction without having the purchasers current balance checked.   He had some interesting economic incentives to convince people to participate in the system.

bitcoin works by tracking "unspent transaction outputs" (UTXO).  so for example if you owned a single 10 BTC UTXO and sent 8 BTC to Joe, you'd then get a change UTXO of 2 BTC.  then your wallet wouldn't let you spend 8 BTC with Bob because you don't have  8 BTC worth of UTXO.

if you wrote your own client to try to double spend like that, bitcoin nodes wouldn't allow the second transaction because it's already been spent.

Then to determine my balance, you need to walk through all the transactions and add up every transaction that's been applied to me.

So there are a couple of scalability problems right here:

First, the ledger gets very very big quickly.   There are billions of transactions every day in the world.
Second, to compute someone's balance, you need to walk through all of those transactions.
Third, you need to do this to verify every transaction.

Satoshi added a proof of work to ensure that it would be very difficult for an adversary to corrupt the ledger.    The proof of work requires that somebody (i.e. a bitcoin node) execute a computationally intensive activity in order to sign a new block of transactions.   The digital signature includes information from previous blocks in the chain - hence the term "block-chain" - all the blocks are chained together via their digital signatures.

The crypto stuff required for the "proof of work" just exacerbates the first 3 scalability problems.

Now I haven't been following the technology closely - so maybe someone has developed solutions for these.   But I don't see them discussed in the usual web articles on scalability.   Instead, everyone is complaining about limits on blocks per second & maybe we should make the blocks bigger so that they can contain more transactions and so on.

It seems to me that this won't help - it improves scalability linearly, but the scalability of the design deteriorates quadratically with the number of transactions.  If we deal with the first order scalability problems, we'll just run into the more fundamental scalability problems a bit later.

rather than re-calculating all address balances for every transaction, each bitcoin node just maintains a (big) list of UTXOs.  whenever a transaction is broadcast, then all nodes can quickly check their UTXO set without checking all past transactions, and then each transaction just modifies the overall set of UTXOs slightly (destroying one or more previous UTXOs and resulting in one or more new UTXOs).  you can see data on the current  UTXO set here:

http://statoshi.info/dashboard/db/unspent-transaction-output-set

L.A.S.

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Re: Crypto Skeptics Thread
« Reply #73 on: January 13, 2018, 06:42:34 PM »
rather than re-calculating all address balances for every transaction, each bitcoin node just maintains a (big) list of UTXOs.  whenever a transaction is broadcast, then all nodes can quickly check their UTXO set without checking all past transactions, and then each transaction just modifies the overall set of UTXOs slightly (destroying one or more previous UTXOs and resulting in one or more new UTXOs).  you can see data on the current  UTXO set here:

http://statoshi.info/dashboard/db/unspent-transaction-output-set

Serious question: What is the point of the ledger, then?  Are the UTXO tables periodically cross-checked against it?

Also, how secure are these UTXOs tables maintained at the nodes? 

I mean the ledger itself might be theoretically secure due to all of the hashing work.  But what if enough of these UTXO tables were hacked and the data was corrupted?  Could miners presume a certain transaction is valid based on corrupted UTXO table data, and produce presumably valid blocks -- perhaps for several blocks of a chain -- and then (I guess) recalibrate the UTXO table against the actual block chain only to find out that a transaction is not valid because it doesn't represent true unspent transaction outputs?  Or would the transaction be considered "(sort-of) valid and be placed in the mem-pool because it is not prohibited based on local UTXO table data, but basically be a zombie transaction because it cannot be made a valid transaction in any block?

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Re: Crypto Skeptics Thread
« Reply #74 on: January 15, 2018, 03:39:33 PM »
I believe the ledger is the system of record, and all the blocks are validated before being accepted.

The UTXO's are in effect a high performance cache.   In database speak this is similar to a materialized view?   So a node could go back to the ledger to recreate or to validate the UTXO's if there was a need to do so.

Since the UTXOs are maintained on the full nodes, they are hopefully not hackable.   But more software == more bugs so I think you raise a valid concern.

Actually, throughout my life, my two greatest assets have been mental stability and being, like, really smart.

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Re: Crypto Skeptics Thread
« Reply #75 on: January 15, 2018, 03:55:54 PM »
yes the blockchain/ledger is the final authority on transactions, and the UTXO set is a performance measure.  if one miner's UTXO set is corrupted, the other miners wouldn't accept any invalid blocks produced by that miner.  and i don't think the UTXO set is periodically recomputed, but i may be wrong on that.

so then on the point of exponentially-increasing burdens on nodes for processing transactions, i don't think validating transactions against the ledger is a concern.  there may be a problem with validating cryptographic signatures requiring an exponentially-increasing amount of work as the number of transactions increases.  i believe this is a concern with the current bitcoin implementation (with fixes proposed), and not of all cryptocurrencies in general.

scalability in general is definitely a huge problem.

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Re: Crypto Skeptics Thread
« Reply #77 on: January 15, 2018, 06:43:40 PM »
Researchers find that one person likely drove Bitcoin from $150 to $1,000

tl;dr:  Bitcoin prices were fraudulently manipulated by trading bots at Mt. Gox, and this fraud appears to be the only reason prices went up ~800% in two months, in 2013. 

The bots traded publicly, using fake ids for coins they did not own.   Their activity was publicly logged, so we can compare the price changes on the days they traded (way up) to the days they didn't (slightly down).  Market manipulation was relatively easy because trading volume was so low.

Also, as an aside, the owner of Mt. Gox tried to cover up a 600k coin theft several years ago, because he feared public acknowledgment would undermine confidence in his exchange.  Shady as hell, if you ask me.
« Last Edit: January 15, 2018, 06:49:56 PM by sol »
sol will be totally offline for most of June 2018.  You cannot reach me.  You will not hear from me.  I am not dead, just away from civilization.

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Re: Crypto Skeptics Thread
« Reply #78 on: January 16, 2018, 06:51:36 AM »
Researchers find that one person likely drove Bitcoin from $150 to $1,000

tl;dr:  Bitcoin prices were fraudulently manipulated by trading bots at Mt. Gox, and this fraud appears to be the only reason prices went up ~800% in two months, in 2013. 

The bots traded publicly, using fake ids for coins they did not own.   Their activity was publicly logged, so we can compare the price changes on the days they traded (way up) to the days they didn't (slightly down).  Market manipulation was relatively easy because trading volume was so low.

Also, as an aside, the owner of Mt. Gox tried to cover up a 600k coin theft several years ago, because he feared public acknowledgment would undermine confidence in his exchange.  Shady as hell, if you ask me.

Although Mt. Gox is no more, I think we would all be foolish to assume that this practice has stopped, too.

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Re: Crypto Skeptics Thread
« Reply #79 on: January 16, 2018, 07:20:52 AM »
Researchers find that one person likely drove Bitcoin from $150 to $1,000

I came here with the intent to post this article.

Blockchain usage is going to grow exponentially into all kinds of new areas beyond financial transactions:  passports/border security, logistics, intellectual property rights, regulatory compliance, insurance, legal contracts, etc.   Blockchain as a technology is worthy of study, it’s the speculation on the value of the earliest forms of crypto currency that warrants the skepticism. 

Currently we are just repeating Internet 1.0 which resulted people making and losing millions speculating on shares of webvan.com and petfarts.com.   Eventually we’ll move through this period and see applied innovation.  I believe the current buzzworthy crypto currencies will be superseded with something better.  I’m not much of a speculator anyway so won’t speculate in a currency today whose long-term value (probably) eventually approaches zero. 

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Re: Crypto Skeptics Thread
« Reply #80 on: January 17, 2018, 11:19:41 AM »
Researchers find that one person likely drove Bitcoin from $150 to $1,000

I came here with the intent to post this article.

Blockchain usage is going to grow exponentially into all kinds of new areas beyond financial transactions:  passports/border security, logistics, intellectual property rights, regulatory compliance, insurance, legal contracts, etc.   Blockchain as a technology is worthy of study, it’s the speculation on the value of the earliest forms of crypto currency that warrants the skepticism. 

Currently we are just repeating Internet 1.0 which resulted people making and losing millions speculating on shares of webvan.com and petfarts.com.   Eventually we’ll move through this period and see applied innovation.  I believe the current buzzworthy crypto currencies will be superseded with something better.  I’m not much of a speculator anyway so won’t speculate in a currency today whose long-term value (probably) eventually approaches zero.

I'm skeptical of the Internet 1.0 comparisons and the potential for most future blockchain applications. Back in the day everyone had a rough idea of what the Internet was for, even before the heady days of bubble 1.0. The early web companies were poorly executed and startup costs were extremely high. This was before OSS, before cloud computing, and Sun made a killing selling high end software and servers and even small companies were burning through cash at a tremendous rate. However, the basic idea is unchanged 20 years later: Go to browser, add items to your "cart," and purchase. Everyone understood the value proposition.

Blockchain on the other hand...still not clear what it's really for. If we look beyond the buzzwords, the underlying tech of Merkle trees (the blockchain ledger) has been around for a long time and is already put to good use in many applications such as Git source control and certain file systems. These are important applications, but these are solutions to very specific technology problems. It's a huge leap to say that blockchain (Merkle trees) are somehow the magic sauce for a bunch of problems that are primarily social (physical border security, logistics, contracts, etc.).

For example, the latest announcement from IBM and Maersk about applying blockchain tech to the supply chain. One gets the sense that "blockchain" is shoehorned in there just because it's a hot term right now, and blockchain is but a small part of a larger overall agenda. But is blockchain even really solving a core problem? One conspicuous thing missing, which I could not find in any articles, is what consensus method is proposed. The proof-of-work consensus method was really the key contribution from Bitcoin, but this is wildly inappropriate and inefficient for a global supply chain application. My best guess is that it will use a proof-of-authority method to manage the distributed ledger. This effectively just kicks the problem from maintaining a shared ledger into key management and deciding who to trust. The distributed ledger is only as secure as the weakest link (pun intended). And it creates a huge new headache - the private key used by Customs becomes a massively valuable target for smugglers/drug cartels. Someone has to have access to these keys, not hard to imaging a cartel bribing one of these people with a large amount of Bitcoin for a copy of the key...once they have the key they can alter the distributed ledger as the Customs agency, and there's very little traceability (whereas if someone's breaking into your centralized system you can detect this). So they will probably need to add additional layers of protection, at which point the blockchain is essentially providing zero value add because it's not actually trusted.

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Re: Crypto Skeptics Thread
« Reply #81 on: January 17, 2018, 01:06:29 PM »
1. No customer service department
2. Bitcoin is a bubble

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Re: Crypto Skeptics Thread
« Reply #82 on: January 19, 2018, 11:23:53 AM »
https://www.vox.com/energy-and-environment/2018/1/18/16901422/bitcoin-price-crash-energy-emissions

This particular quote from the article caught me:

"And coin holders are rattled — one of the top posts this week in the cryptocurrency Reddit community was a post on suicide hotlines."


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Re: Crypto Skeptics Thread
« Reply #83 on: January 19, 2018, 01:05:57 PM »
https://www.vox.com/energy-and-environment/2018/1/18/16901422/bitcoin-price-crash-energy-emissions

This particular quote from the article caught me:

"And coin holders are rattled — one of the top posts this week in the cryptocurrency Reddit community was a post on suicide hotlines."

The quote (of a quote) that really popped for me:

Quote
Or, as the Guardian’s Alex Hern wrote, it’s “a competition to waste the most electricity possible by doing pointless arithmetic quintillions of times a second.”

The waste is staggering - amazing what some will do for wealth.

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Re: Crypto Skeptics Thread
« Reply #84 on: January 19, 2018, 03:20:10 PM »

Aside from all these issues, the technology itself doesn't seem to be designed to scale to a world-wide, or even a national, state or municipal level.   If the technical folks on the forum know different, please feel free to correct me.   I don't claim to be an expert.

It's being worked on and it's coming. Plasma is a proof-of-stake consensus with scalability. The transaction estimates, to start, are in the thousands. The higher end goals are millions to billions per second.

https://ethresear.ch/t/minimal-viable-plasma/426

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Re: Crypto Skeptics Thread
« Reply #85 on: January 19, 2018, 03:28:30 PM »

The waste is staggering - amazing what some will do for wealth.

The newer decentralized consensus models won't rely on proof-of-working mining and mining equipment, so they will consume far less electrical consumption; I don't have specific numbers. 

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Re: Crypto Skeptics Thread
« Reply #86 on: January 19, 2018, 03:47:57 PM »

Aside from all these issues, the technology itself doesn't seem to be designed to scale to a world-wide, or even a national, state or municipal level.   If the technical folks on the forum know different, please feel free to correct me.   I don't claim to be an expert.

It's being worked on and it's coming. Plasma is a proof-of-stake consensus with scalability. The transaction estimates, to start, are in the thousands. The higher end goals are millions to billions per second.

https://ethresear.ch/t/minimal-viable-plasma/426

I took a look at the link you provided and given your comments it seems that this has not been adopted yet. 

So as it stands now, there is still a scalability issue amongst many other issues.

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Re: Crypto Skeptics Thread
« Reply #87 on: January 19, 2018, 03:52:24 PM »

The waste is staggering - amazing what some will do for wealth.

The newer decentralized consensus models won't rely on proof-of-working mining and mining equipment, so they will consume far less electrical consumption; I don't have specific numbers.

This is just your prediction. 

As it stands now, cryptos consume enormous amounts of energy and as far as I can tell produce nothing as a result except for a records in a database which some people trade for money.

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Re: Crypto Skeptics Thread
« Reply #88 on: January 19, 2018, 04:03:26 PM »

The waste is staggering - amazing what some will do for wealth.

The newer decentralized consensus models won't rely on proof-of-working mining and mining equipment, so they will consume far less electrical consumption; I don't have specific numbers.

This is just your prediction. 

As it stands now, cryptos consume enormous amounts of energy and as far as I can tell produce nothing as a result except for a records in a database which some people trade for money.

There are already crypto that use delegated proof-of-stake consensus and other forms of non-mining consensus. They do not consume enormous electricity. Dash, neo, stratis, and others.

The coins in a decentralized proof-of-stake system are required. Like proof-of-working mining, they are costs and incentives, to maintain the security of the network. I won't claim to understand all the reasons why people use crypto, whether for malicious or legitimate purposes, but I do recognize use-cases that will be beneficial to alot of people. Blockchain allows or will people to do things they couldn't before: transparent digital smart contracting, peer-to-peer tamper-proof exchanges, decentralized exchanges, etcetera.
 
« Last Edit: January 19, 2018, 04:13:03 PM by shadow »

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Re: Crypto Skeptics Thread
« Reply #89 on: January 19, 2018, 09:24:51 PM »
Blockchain allows or will people to do things they couldn't before: transparent digital smart contracting, peer-to-peer tamper-proof exchanges, decentralized exchanges, etcetera.

It all sounds awesome and I'm serious as well. I am a massive fan of peer to peer applications that are now available due to the Internet. Blockchains are amongst the greatest things I've seen invented in my life. I honestly think they could change money in massive ways.

None of my comments though change the fact that this is a massive bubble and Bitcoin is a massive mess at the moment. It isn't scalable.

For blockchains to really work we have to start realising they are just a means of exchange and they aren't a store of wealth or a way to speculate financially.

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Re: Crypto Skeptics Thread
« Reply #90 on: January 20, 2018, 09:15:00 AM »
https://www.nytimes.com/2018/01/13/style/bitcoin-millionaires.html

Ick! This isn't going to end well. Most of the arrogant crypto-anarchists will be fine. They'll ride the wave until it crashes (some may cash out in time), but they are mostly young and have time to recover. If nothing else they'll have fond memories and a good story to tell. Incredibly sad for Maria Lomeli and the many others like her who will never recover after getting wiped out.

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Re: Crypto Skeptics Thread
« Reply #91 on: January 20, 2018, 09:47:13 PM »
None of my comments though change the fact that this is a massive bubble and Bitcoin is a massive mess at the moment. It isn't scalable.

For blockchains to really work we have to start realising they are just a means of exchange and they aren't a store of wealth or a way to speculate financially.

I would hope that anyone who has crypto is aware of the high risk and extreme volatility, and that they can easily lose what they put in. The market can crash very quickly and stay bearish for a long stretch of time, due to mt gox events or market sentiment. Many crypto will most likely never recover to their ath or become practically worthless. Despite all this, I feel fairly confident that crypto will eventually become a mainstay, and there are scaling solutions that will be unveiled this year. Non-"crypthusiasts" should stay out of the space and just observe from the sidelines.

Regarding blockchain's purpose, I feel it is too early to make any conclusive remarks about its outcome. It already has other uses, such as smart contracts or network validation. Regarding speculation, the funds for development have to come from somewhere. We can warn people to limit their exposure; the U.S. can prohibit participation in non-U.S. base icos and communicate advisory warnings (which they are already doing); we can try to adopt a standard where these icos can't exceed a certain amount, and the tokens are locked up in the smart contract and can't be transacted until a certain time period has expired or limited release when developers reached certain milestones. Other methods such as limiting speculation to only vc's or accredited investors would be very difficult to enforce.

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Re: Crypto Skeptics Thread
« Reply #92 on: January 20, 2018, 10:55:40 PM »
I think it was Warren Buffett who said, it is just like a 'cheque'. Allows for transaction to take place. Doesn't have any intrinsic value of its own and doesn't not produce anything. Both Charlie M. and Warren B's advise was to say away from cryptos.

Even if crypo are the next best thing, they are just a currency (yet to mature but lets assume they become mainstream) even then they are just a new currency. How are they worth 10's of thousands of dollars per bitcoin? People say there are only a 'set number' of bitcoins in existence. That to me is just a joke. Everyday a new crypto currency can be launched. The block-chain technology is not patented. It is open source.

If anyone wants to speculate with play money then I would invest 'against crypto' and see how things turn out.

TomTX

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Re: Crypto Skeptics Thread
« Reply #93 on: January 21, 2018, 07:19:48 AM »
What is your brother in Singapore (who doesn't have a bank account) hoping to spend the money on in the next hour?  Because there is very little stuff that can be purchased with Bitcoin and even less with Ethereum.  (It has to be local of course, because otherwise you could just order it online and send it to him . . . no need to send him the money.)  A useless store of "value" isn't of value if you can't actually buy anything with it.

But even assuming that sending virtual money has to be done . . . how is using crypto significantly better than using Paypal for this purpose?

He has a bank account, but he is not legally allowed to open a US bank account, so getting money from the US to Singapore is complicated. PayPal does work with Singapore, so that is an option. However, there are countries where PayPal won't send money (Myanmar, Iran, etc). Before you tell me that I'm probably not allowed to send money to Iran (or at least I wasn't until very recently), I know. However, neither my brother, nor his wife, nor his mother, nor his children, nor his in-laws are US citizens. This "just use some standard everyday service and currency" is a very western-centric view of the world.

Open a Citibank bank account.  They have instant global transfers between international Citibank accounts in 20 countries, including Singapore & US.

Citi is on the Zelle network, so you probably don't even need to open a Citi account - you just need to have an account with a participating bank (Chase, CapOne, WellsFargo, Bank of America, Ally, Comerica, Fifth Third, PNC, USAA and a bunch of regional and smaller banks)

Typically a Zelle transfer clears within a couple of minutes with participating banks. Free. Traceable. No using 3rd party exchanges to buy and sell crypto.

Note: I haven't actually tried this.
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worldtraveler

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Ben Hogan

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Re: Crypto Skeptics Thread
« Reply #95 on: January 22, 2018, 06:42:54 AM »
The dump starting again. This shall be interesting to see as BTC lowers by 10-20% each week, how do the other smaller company coin/tokens fair.

L.A.S.

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Re: Crypto Skeptics Thread
« Reply #96 on: January 22, 2018, 07:07:34 AM »
https://cointelegraph.com/news/bitcoin-laundering-less-than-one-percent-of-all-transactions

First of all.... "Coin Telegraph" is probably going to write biased articles in favor of bitcoin and cryptos in general.

But I did read through your posted article.

Money laundering is specifically the process of attempting to transform the profits from a criminal enterprise into apparently legitimate sources of income.  Think: the carwash on Breaking Bad.

Money laundering exists because banks and other financial transaction processors keep records of large cash deposits and other financial transactions which can be subpoenaed and reviewed.  So there is a need for criminal organizations to make it difficult to determine the sources of such income and otherwise make it appear legit if they intend to use their money with banks and other financial transaction processors or use it to buy other assets.

However, bitcoins and other cryptos allow for the direct payment in the crypto itself.  So there is no need to money launder if the payment is made outside of the ordinary financial system.

 But, an argument of a lack of significant money laundering does not in and of itself prove that there is insignificant criminal activity occurring with bitcoin and other cryptos. 



L.A.S.

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Re: Crypto Skeptics Thread
« Reply #97 on: January 22, 2018, 07:07:57 AM »
The dump starting again. This shall be interesting to see as BTC lowers by 10-20% each week, how do the other smaller company coin/tokens fair.

https://www.express.co.uk/finance/city/907786/bitcoin-price-india-cryptocurrency-trading-btc-exchange

harvestbook

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Re: Crypto Skeptics Thread
« Reply #98 on: January 22, 2018, 07:18:28 AM »
The median transaction value is returning to pre-December levels. Looks like the whales are done for now. Will be interesting to see what price the minnows set, as most of the fresh ones have already been netted.

https://bitinfocharts.com/comparison/bitcoin-mediantransactionvalue.html#3m