Author Topic: Crypto Skeptics Thread  (Read 18057 times)

Scandium

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Re: Crypto Skeptics Thread
« Reply #50 on: January 08, 2018, 11:54:56 AM »
https://steamcommunity.com/games/593110/announcements/detail/1464096684955433613

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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 doesnít 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, weíve 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".

steveo

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Re: Crypto Skeptics Thread
« Reply #51 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.

toganet

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Re: Crypto Skeptics Thread
« Reply #52 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?

MrThatsDifferent

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Re: Crypto Skeptics Thread
« Reply #53 on: January 10, 2018, 09:46:07 PM »

PDXTabs

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Re: Crypto Skeptics Thread
« Reply #54 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

Travis

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Re: Crypto Skeptics Thread
« Reply #55 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.

FireLane

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Re: Crypto Skeptics Thread
« Reply #56 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

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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.

scottish

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Re: Crypto Skeptics Thread
« Reply #57 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.

phil22

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Re: Crypto Skeptics Thread
« Reply #58 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

scottish

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Re: Crypto Skeptics Thread
« Reply #59 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.


phil22

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Re: Crypto Skeptics Thread
« Reply #60 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.

PDXTabs

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sol

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Re: Crypto Skeptics Thread
« Reply #62 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 »

desk_jockey

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Re: Crypto Skeptics Thread
« Reply #63 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, itís 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 weíll move through this period and see applied innovation.  I believe the current buzzworthy crypto currencies will be superseded with something better.  Iím not much of a speculator anyway so wonít speculate in a currency today whose long-term value (probably) eventually approaches zero. 

FINate

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Re: Crypto Skeptics Thread
« Reply #64 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, itís 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 weíll move through this period and see applied innovation.  I believe the current buzzworthy crypto currencies will be superseded with something better.  Iím not much of a speculator anyway so wonít 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.

Mighty-Dollar

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Re: Crypto Skeptics Thread
« Reply #65 on: January 17, 2018, 01:06:29 PM »
1. No customer service department
2. Bitcoin is a bubble

FINate

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Re: Crypto Skeptics Thread
« Reply #66 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 ó 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:

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Or, as the Guardianís Alex Hern wrote, itís ďa competition to waste the most electricity possible by doing pointless arithmetic quintillions of times a second.Ē

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

shadow

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Re: Crypto Skeptics Thread
« Reply #67 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

shadow

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Re: Crypto Skeptics Thread
« Reply #68 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. 

shadow

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Re: Crypto Skeptics Thread
« Reply #69 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 »

steveo

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Re: Crypto Skeptics Thread
« Reply #70 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.

FINate

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Re: Crypto Skeptics Thread
« Reply #71 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.

shadow

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Re: Crypto Skeptics Thread
« Reply #72 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 #73 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 #74 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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Ben Hogan

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Re: Crypto Skeptics Thread
« Reply #76 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.

harvestbook

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Re: Crypto Skeptics Thread
« Reply #77 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



LessIsLess

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Re: Crypto Skeptics Thread
« Reply #79 on: January 22, 2018, 11:41:20 AM »
Why bother being skeptical of something that you believe is truly worthless?  A worthless, junk item will be tossed into the dumpster soon enough.  For example, who would bother to pick up a used condom?

Cryptos are disruptive to the traditional vested interests, and disruptive to people's pre-conceived notion of reality.  I started out being unimpressed with cryptos, but I kept an open mind and learned.  Now I think crypto innovations have the potential to deliver great advances to humanity if we would just give them a chance.

FINate

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Re: Crypto Skeptics Thread
« Reply #80 on: January 22, 2018, 01:46:25 PM »
Why bother being skeptical of something that you believe is truly worthless?  A worthless, junk item will be tossed into the dumpster soon enough.  For example, who would bother to pick up a used condom?

Cryptos are disruptive to the traditional vested interests, and disruptive to people's pre-conceived notion of reality.  I started out being unimpressed with cryptos, but I kept an open mind and learned.  Now I think crypto innovations have the potential to deliver great advances to humanity if we would just give them a chance.

I don't like to find used condoms in my neighborhood. They are unsightly, harm wildlife, and are a biohazard. They are worse than worthless because they have a net negative value. I started out without any opinion about cryptos, but the more I read the more I agree with you that they are the used condoms of the financial world. I just happen to think this is bad rather than merely neutral. They are used to facilitate illicit trade, drugs but also human trafficking and arms. Scammers and ransomware have started using BTC because it's difficult to trace. And a bunch of unsophisticated "investors" will lose everything along the way - these will largely be the most vulnerable folks who have the least time and/or ability to recover.

Real progress for society would be a low-fee public banking option at all USPS locations. The big vested interests are terrified of this and do their best to stop it. The time and resources literally wasted on BTC (remember, energy equivalent of New Zealand doing nothing but random guesses of cryptographic hashes) would have been put to much better use lobbying and organizing for something like this.

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Re: Crypto Skeptics Thread
« Reply #81 on: January 22, 2018, 04:05:25 PM »
Why bother being skeptical of something that you believe is truly worthless?  A worthless, junk item will be tossed into the dumpster soon enough.  For example, who would bother to pick up a used condom?

Cryptos could be are disruptive to the traditional vested interests, and disruptive to people's pre-conceived notion of reality.  I started out being unimpressed with cryptos, but I kept an open mind and learned.  Now I think crypto innovations have the potential to deliver great advances to humanity if we would just give them a chance.

By all means, give cryptocurrency and the underlying technology a chance.  My hair-stylist friend on Facebook dumping a shit load of money she doesn't have into Bitcoin and thinking it's awesome that a barely-understood technology should go up several hundred percent in value in a year with little to no justification is not that chance.  That's what venture-capitalists and investors with deep pockets are for.

DavidAnnArbor

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Re: Crypto Skeptics Thread
« Reply #82 on: January 22, 2018, 08:22:50 PM »
I agree that the block chain technology may have great positive effects on the internet.

Beyond the Bitcoin Bubble
https://nyti.ms/2FIP4RE

But I don't think investing in Bitcoin is the way to go for the reasons spelled out on this thread.

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Re: Crypto Skeptics Thread
« Reply #83 on: January 23, 2018, 10:04:18 AM »
I made a small purchase of crypto last year.  The value tripled, the creator sold his loot and I followed.   It's never been back up since.  Unlike a stock, the currency isn't rising in price because it's linked to a profitable business.   It's only value is the ability to sell higher to the next buyer. Whoever bought my coins is down and will stay down until someone pays more.

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Re: Crypto Skeptics Thread
« Reply #84 on: January 23, 2018, 05:20:18 PM »
I agree that the block chain technology may have great positive effects on the internet.

Beyond the Bitcoin Bubble
https://nyti.ms/2FIP4RE

But I don't think investing in Bitcoin is the way to go for the reasons spelled out on this thread.

I'm not so sure that block chain technology will amount to anything significant.    Look at the applications being promoted by protocol labs in that NY times article.

IPFS - the inter-planetary file system.      It aims to replace HTTP and build a better web.   What's the incentive for hundreds of millions of web sites to switch from a mature, server based environment to an immature, fully distributed environment?   

Filecoin - a crypto currency powered storage network.   This one actually has a use case - store your stuff in the cloud where advertising companies can't get at it.    But... there are already mature paid services you can use for this (eg Amazon S3).   What's the compelling reason to move to a new unproven system?    Why would someone say, "This is really cool.  You *have* to try this!"?

libp2p - a library of p2p protocol software.   Hmmm.

ipld - IPLD is a single namespace for all hash-inspired protocols.   The trouble with hashed based namespaces is that you can't search them (efficiently), the same way you can't search a hash table.

multiformats - a library of self describing protocol things that aim to future proof protocols.   Except future proofing requires that you know something about the future.

The block chain thing reminds me of all the hype around p2p networking back in the 2000's.   And what's left of that?   Cassandra and BitTorrent?   

If someone has a use case they feel strongly about, I'd be interested in discussing it.    I'd *like* to see a good application of block chains.

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Re: Crypto Skeptics Thread
« Reply #85 on: January 23, 2018, 05:33:22 PM »
I agree that the block chain technology may have great positive effects on the internet.

Beyond the Bitcoin Bubble
https://nyti.ms/2FIP4RE

But I don't think investing in Bitcoin is the way to go for the reasons spelled out on this thread.

I'm not so sure that block chain technology will amount to anything significant.    Look at the applications being promoted by protocol labs in that NY times article.

IPFS - the inter-planetary file system.      It aims to replace HTTP and build a better web.   What's the incentive for hundreds of millions of web sites to switch from a mature, server based environment to an immature, fully distributed environment?   

Filecoin - a crypto currency powered storage network.   This one actually has a use case - store your stuff in the cloud where advertising companies can't get at it.    But... there are already mature paid services you can use for this (eg Amazon S3).   What's the compelling reason to move to a new unproven system?    Why would someone say, "This is really cool.  You *have* to try this!"?

libp2p - a library of p2p protocol software.   Hmmm.

ipld - IPLD is a single namespace for all hash-inspired protocols.   The trouble with hashed based namespaces is that you can't search them (efficiently), the same way you can't search a hash table.

multiformats - a library of self describing protocol things that aim to future proof protocols.   Except future proofing requires that you know something about the future.

The block chain thing reminds me of all the hype around p2p networking back in the 2000's.   And what's left of that?   Cassandra and BitTorrent?   

If someone has a use case they feel strongly about, I'd be interested in discussing it.    I'd *like* to see a good application of block chains.

Oh I admit I just looked at the article without the in depth knowledge you have.

sol

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Re: Crypto Skeptics Thread
« Reply #86 on: January 23, 2018, 05:44:08 PM »
If someone has a use case they feel strongly about, I'd be interested in discussing it.    I'd *like* to see a good application of block chains.

Ditto.  So far you can color me unimpressed, but I'm probably just being unimaginative.

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Re: Crypto Skeptics Thread
« Reply #87 on: January 23, 2018, 06:00:13 PM »
I agree that the block chain technology may have great positive effects on the internet.

Beyond the Bitcoin Bubble
https://nyti.ms/2FIP4RE

But I don't think investing in Bitcoin is the way to go for the reasons spelled out on this thread.

I'm not so sure that block chain technology will amount to anything significant.    Look at the applications being promoted by protocol labs in that NY times article.

IPFS - the inter-planetary file system.      It aims to replace HTTP and build a better web.   What's the incentive for hundreds of millions of web sites to switch from a mature, server based environment to an immature, fully distributed environment?   

Filecoin - a crypto currency powered storage network.   This one actually has a use case - store your stuff in the cloud where advertising companies can't get at it.    But... there are already mature paid services you can use for this (eg Amazon S3).   What's the compelling reason to move to a new unproven system?    Why would someone say, "This is really cool.  You *have* to try this!"?

libp2p - a library of p2p protocol software.   Hmmm.

ipld - IPLD is a single namespace for all hash-inspired protocols.   The trouble with hashed based namespaces is that you can't search them (efficiently), the same way you can't search a hash table.

multiformats - a library of self describing protocol things that aim to future proof protocols.   Except future proofing requires that you know something about the future.

The block chain thing reminds me of all the hype around p2p networking back in the 2000's.   And what's left of that?   Cassandra and BitTorrent?   

If someone has a use case they feel strongly about, I'd be interested in discussing it.    I'd *like* to see a good application of block chains.

I tend to agree. That article is, IMO, projecting its hopes for the future onto the past. What it calls InternetOne was no egalitarian utopia. It was the age of expensive (and crappy) proprietary platforms and open protocols stretched to the limits. Linux was still in childhood, so server side options were very expensive and completely proprietary (Sun, IBM, HP). Same for routing equipment. Hell, Windows didn't even come with TCP/IP back then...you had to install and configure it yourself. Sure once on, you could get a "free" webpage at geocities to post photos of your dog and animated gifs, email, and do a few things. Or you could be part of AOL's walled garden. But purely open standard website would be completely lacking in utility...your options were pretty much a Java Applet, ajax wasn't a thing yet. Oh, and people actually *sold* web browsers, and they all sucked and all fragmented the web by making their own extensions (because plain HTML was so limiting).

Also (this from a long-time fan of Open Source Software) most OSS is really crappy. Some if it is excellent, as good or better than commercial software. The good OSS is almost all funded by large internet companies. Software is difficult to write, maintain, debug, and fix. It takes deep pockets to do this well. The real value of OSS is that it plays a vital role in the commodification of platforms and APIs. Similar to how other IP eventually moves into public domain. People used to pay good money for compilers in the 80s and 90s, now these are very often OSS. Same with operating systems. And networking software. The author completely misses this because they are stuck on centralized vs. distributed architectures as an explanation of the world. 

The reason InternetTwo is so heavily dependent on large internet companies that these are services rather than software. Software is zero cost to replicate whereas services take vast amounts of hardware and electricity and expertise to keep them running. I'm not convinced that quasi-crypto-currencies can pull in enough outside value to cover these costs without something that looks and behaves like a corporation that can create value for shareholders, or without behaving like a massive get rich quick Ponzi scheme (aka BTC). The reason almost everything is ad based is that most people are not willing to fork over money for services like search and social media, so ads.

steveo

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Re: Crypto Skeptics Thread
« Reply #88 on: January 23, 2018, 06:17:52 PM »
Also (this from a long-time fan of Open Source Software) most OSS is really crappy. Some if it is excellent, as good or better than commercial software. The good OSS is almost all funded by large internet companies. Software is difficult to write, maintain, debug, and fix. It takes deep pockets to do this well.

You had me until here. I've been using Linux at home and Windows at work for years. I much prefer Linux.

FINate

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Re: Crypto Skeptics Thread
« Reply #89 on: January 23, 2018, 06:26:48 PM »
Also (this from a long-time fan of Open Source Software) most OSS is really crappy. Some if it is excellent, as good or better than commercial software. The good OSS is almost all funded by large internet companies. Software is difficult to write, maintain, debug, and fix. It takes deep pockets to do this well.

You had me until here. I've been using Linux at home and Windows at work for years. I much prefer Linux.

Linux is great, been using it since the 90s - remember installing it from piles of 3.5" floppies. But it's also funded by many companies, which makes sense because so many companies benefit from making Linux great. Lesser known (and unfunded) projects are, by and large, crappy software.

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Re: Crypto Skeptics Thread
« Reply #90 on: January 23, 2018, 10:18:33 PM »

If someone has a use case they feel strongly about, I'd be interested in discussing it.    I'd *like* to see a good application of block chains.

Here is an upcoming use-case for blockchain from a payment processor. Straight from the whitepaper https://cdn.omise.co/omg/whitepaper.pdf:

Quote
The  primary  role  of  blockchains  are  to  solve  coordination  problems  among  multilateral
agreements between a network of participants.  By ensuring transparency, assurance, and
enforcement, we can enable multilateral agreements where they were not previously possible.
When  all  parties  are  assured  that  the  operations  are  not  only  transparent,  but  also  the
mechanisms are guaranteed to not change without significant effort, parties are more willing
to  coordinate.   Participants  have  signifcantly  higher  guarantees  that  a  single  party  has
difficulty forcing other parties in the future into usurious rent extraction via a change in
business processes or information asymmetry.  In other words, any single participant is more
willing to use systems where the business processes and mechanisms itself are not owned
by any other single participant.

There is a fundamental coordination problem amongst payment processors, gateways,
and financial institutions.  For instance, a customer of a bank wishes to pay a merchant on
another network.  Traditionally,  there have  been  significant efforts in engineering around
payment systems which are compatible across payment networks and  financial institutions.
These are usually constructed by creating a clearinghouse which manages the interchange,
usually via a messaging network with either a central counterparty clearinghouse or nos-
tro/vostro accounts.  Examples include FedWire, CHIPS, SWIFT, consumer card payment
networks, NSCC/DTCC, OCC, and ACH. These networks service different roles and func-
tions, including local/national payments, international payments, credit, equities/asset ex-
change,  and  derivatives.   These  centralized  networks  allow  for  the  controlling  entity  to
arbitrarily change the mechanisms, which result in significant amount of transaction costs
via information costs, due diligence, and contractual enforcement between all parties.

We believe that there is currently a large emerging market of disruption in digital pay-
ments with new payment platforms (e.g.  Venmo, Alipay, etc.).  These networks have signifi-
cant aversion to interchange across networks, as it usually requires significant overhead costs
in trust with the interchange facility.  Parties are unwilling to use central counterparties, as
neither party wishes to defer to the other, and use of nostro/vostro accounts require bespoke
contracts between participants.  While the larger networks have significant incentive around
protection of their network effects,  we believe that there is a long-tail of entities wishing
to provide eWallet services which require greater coordination amongst multilateral partic-
ipants.  These mid-size participants will be able to cross value across networks in order to
reach sufficient network effects in usability.  The infrastructure and reference frontend for
these providers will allow for the network effects to be encoded into this network, allowing
for emerging eWallet participants to instantly create high network utility.

Blockchains allows society to externalize the world's business processes from single cen-
tralized corporations into open, decentralized computing networks.  [1][2] OmiseGO (OMG)
is a network which decentralizes market liquidity, orderbook matching and execution, clear-
inghouse custodianship, and high-scalability payments to help resolve payments across these
emerging eWallet payment networks.

By  shifting  these  business  processes  traditionally  placed  into  a  single  corporation,  it
is  possible  to  provide  eWallet  providers  an  entire  interchange  process  in  a  decentralized
high-performant open network.

From a medium article by the ceo, the problems they want to solve:
https://medium.com/@jun_omise/omise-omisego-strategy-vol-01-5c7269bb2008

Quote
1. Limited availability of digital currencies or online payment acceptance by merchants.

2. Siloed wallet and payment services impeding the usability and functionality.

3. Low rate of credit card adoption. This is particularly true in the Asia-Pacific region where information about a userís credit score, needed to apply for credit card, is not as easily accessible.

4. Continued limited coverage and penetration of traditional financial services- e.g. bank branches, bank accounts.

The coin used in the network is not a medium-of-exchange or currency. It is used for network validation. Here is a blog post how it works: https://blog.omisego.network/omg-network-validation-f935523086db?gi=96f9370b1515
« Last Edit: January 24, 2018, 01:46:03 AM by shadow »

Mr. Green

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Re: Crypto Skeptics Thread
« Reply #91 on: January 24, 2018, 09:22:17 AM »
Ouch. I don't know what it's like to crash from the newly euphoric high of making $5 million by just as quickly losing it all but I'd guess it's something along the lines of being punched in the balls every minute for a month.

https://www.ccn.com/bitcoin-trader-made-millions-trading-on-margin-and-then-lost-it-all/

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Re: Crypto Skeptics Thread
« Reply #92 on: January 24, 2018, 10:48:51 AM »
And, there is no evidence that it will ever get off the ground, except perhaps it is possible they could become the next hot speculative "investment."

Yup, I agree with the speculation part. There are various risks, there is no guarantee and anything can happen.

As for the evidence, even if we were to share the same information sets, base on our fundamental beliefs, we probably would not come to the same conclusions.

Vitalik Buterin, creator of eth, is an advisor for omg, as well as other eth developers. He has tweeted and retweeted about it multiple times. The company omise had raised over $25 million in vc funding outside of the crypto space. The management team and advisors have presented at conferences and seminars about blockchain, which are broadcasted on youtube. The team has an open source github page for omg plasma, which is in the continuous process of being updated.

These actions may not mean anything and could just be an elaborate scheme, a sophisticated scam with the appearance of productivity. These guys, many of who are already wealthy, and have publicly declared their intent for a social good in the form of blockchain, may not care about their reputation and their efforts are cloaking for vaporware.

To me, there is evidence of legitimacy.

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Re: Crypto Skeptics Thread
« Reply #93 on: January 24, 2018, 04:49:21 PM »

If someone has a use case they feel strongly about, I'd be interested in discussing it.    I'd *like* to see a good application of block chains.

Here is an upcoming use-case for blockchain from a payment processor. Straight from the whitepaper https://cdn.omise.co/omg/whitepaper.pdf:

Quote
The  primary  role  of  blockchains  are  to  solve  coordination  problems  among  multilateral

<snip>...</snip>

By  shifting  these  business  processes  traditionally  placed  into  a  single  corporation,  it
is  possible  to  provide  eWallet  providers  an  entire  interchange  process  in  a  decentralized
high-performant open network.

I know I cut alot of stuff out of the quote...    the point I'm want to look at here is the "high-performant open network"

Let's talk about performance.    When I started studying BitCoin last week, I though "hey, another peer to peer network.   i know how this works - add another node, the capacity goes up."   Horizontal scalability, right?

But that's not quite how it works.   When you add another node, the trust in the BitCoin network goes up with the capacity of the node, at least for some definition of trust.    However, the capacity of the bitcoin network, in terms of transactions per second, actually goes down a bit.   Every time someone creates a transaction, that transaction is delivered to every node in the network.   Every time a new block is created, that block has to be delivered to every node on the network.   So increasing the number of bit coin nodes actually *decreases* the aggregate capacity of the network, because it takes  a little bit longer to handle these broadcasts.

This suggests that people who advocate using bitcoin on an internet scale just don't understand the mechanisms.   Even though BitCoin is a p2p system, it doesn't scale the way BitTorrent does (for example).

phil22

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Re: Crypto Skeptics Thread
« Reply #94 on: January 24, 2018, 05:07:02 PM »
the network doesn't stop operating while blocks are propagated.  new transactions are still collected and processed.

there are several solutions in the works for dealing with the efficiency of larger block sizes, like "compact blocks" and "xthin blocks" and "graphene."

if these new nodes are mining nodes, assuming the mining difficulty doesn't change (it only changes every ~two weeks) then the capacity, in terms of transactions per second, actually (slightly, and temporarily) increases because the average time to find a block is slightly statistically lowered with the new mining power.

then after two weeks the difficulty is adjusted in an attempt to restore the average 10 minute block time.

scottish

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Re: Crypto Skeptics Thread
« Reply #95 on: January 24, 2018, 05:22:48 PM »
I completely get it - the design was based around mining capacity.   So we tend to think about scalability in terms of mining capacity.   This is natural - the mining is where all the computation takes place.

But the scalability problem isn't the time to mine a block nonce.   The scalability problem is the time to propagate the block through the network.   As you pointed out, Bitcoin can adjust mining difficulty.   If mining capacity goes down instead of up, Bitcoin adjusts the problem difficulty to make mining easier.

Do you think a 10 minute (or even 1 minute) block time is fast enough to scale to the whole world?

The reason the block time is so long is to minimize forks in the block chain.     If the block chain starts forking regularly, the whole network will collapse.



FireLane

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Re: Crypto Skeptics Thread
« Reply #96 on: January 24, 2018, 07:26:19 PM »
Bitcoin May Split 50 Times in 2018 as Forking Craze Mounts
https://www.bloomberg.com/news/articles/2018-01-23/bitcoin-may-split-50-times-in-2018-as-forking-craze-accelerates

Bitcoin has already forked at least 19 times (splitting into two new currencies, each with their own blockchain), but dozens more forks could happen this year. Most of them, as the article says, are pure cash-ins, attempting to capitalize on Bitcoin's popularity by creating a new cryptocurrency with "Bitcoin" in the name. There's Bitcoin Cash, Bitcoin Gold, Bitcoin Diamond, Bitcoin Private, Bitcoin Pizza (?!)...

Who the hell actually uses any of these ridiculous cryptos to buy anything? Does anyone? Even Bitcoin is being accepted by fewer and fewer places these days.

phil22

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Re: Crypto Skeptics Thread
« Reply #97 on: January 24, 2018, 08:54:20 PM »
But the scalability problem isn't the time to mine a block nonce.   The scalability problem is the time to propagate the block through the network.

correct, and those 3 solutions i named are some examples of work being done on this problem of block propagation and orphan blocks.    scaling problems are a legitimate concern and a good reason to be skeptical of the whole idea.

Do you think a 10 minute (or even 1 minute) block time is fast enough to scale to the whole world?

as you said, a 1 minute block time would lead to even more orphaned blocks regardless of block size.  the limiting factor for scaling is block size (regardless of "layer 2" solutions), and as i said there are ongoing efforts in this area.

MustacheAndaHalf

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Re: Crypto Skeptics Thread
« Reply #98 on: January 25, 2018, 04:15:11 AM »
There's another interesting flaw in Bitcoin which, I believe, is the cause of high fees on transactions.  One start-up hired most of the Bitcoin engineers.  So you have most of the people who control Bitcoin's future all focused on becoming rich from stock options at a start-up.  That start up, no surprise, benefits from high fees.

The performance of Bitcoin last year combined with everyone wanting to speculate on it's future worth suggests a bubble to me.  What people speculating don't realize is that eventually those in the know have bought enough Bitcoin.  At some point, everyone who likes Bitcoin is done buying, and price of BTC has no upwards pressure.

Although I'm skeptical of Bitcoin, it has two uses besides online transactions.  First, criminals don't just want anonymity.  They want ways to move large sums of cash across borders, and Bitcoin accomplishes that.  If you have large amounts of money, the fees are low and avoiding banks is worth the transaction delays. 

And second, I've heard a story of someone in South America who put all his money in Bitcoin.  When asked if he was worried about losing it all, he said that he's already lost everything because of his local currency (hyper inflation or bankruptcy, forgot which).  So for some countries, Bitcoin may be more stable than their local currency.

I think Bitcoin will continue to be handicapped by the high fees and slow transactions.  But online merchants accept it more than any other crypto currency, so I suspect when they drop Bitcoin they will be wary of replacing it.

capitalninja

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Re: Crypto Skeptics Thread
« Reply #99 on: January 25, 2018, 08:05:29 AM »
There will be more of this.

Hey hey heyyyyyyyyyyyyy... :-)

https://www.youtube.com/watch?v=EhL2OWXZ26s