Author Topic: Is it too late [bitcoin]?  (Read 85028 times)

sol

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Re: Is it too late [bitcoin]?
« Reply #450 on: December 23, 2017, 05:29:23 PM »
Hey sol, do you happen to have a link to that report handy? Would be curious to read a bit more about how that statistic was estimated.

I don't remember where I read it, but google can probably point you in the right direction.

https://www.google.com/search?q=bitcoin+in+north+korea

thenextguy

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Re: Is it too late [bitcoin]?
« Reply #451 on: December 24, 2017, 10:36:19 AM »
I read one report that said on any given day, approximately 30% of all bitcoin trades involve North Korean money laundering.  It's a way for them to avoid UN sanctions on their financial markets.

Just saying.  Sometimes operating outside the traditional financial sector isn't quite the moral high ground that some people wish it could be.  Are you comfortable supporting a terrorist state, if it could make you money?

What a load of crap! Of course, there would be no bitcoin without the internet, so I guess everyone on this forum is supporting terrorists!

sol

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Re: Is it too late [bitcoin]?
« Reply #452 on: December 24, 2017, 11:22:15 AM »
What a load of crap! Of course, there would be no bitcoin without the internet, so I guess everyone on this forum is supporting terrorists!

I think the specifics were not that North Korea was just buying and holding 30% of the bitcoins in the world, but that they were hosting the tumblers that anonymize bitcoin purchases to make them untraceable.  The tumblers execute thousands (millions?) of tiny bitcoin transactions in order to obscure the blockchain histories.  They're a necessary step if you want it to be truly anonymous.  https://www.bloomberg.com/news/articles/2017-12-14/north-korea-s-bitcoin-play

North Korea also likes bitcoin for investment purposes, because it's one of the very few things they are allowed to legally export for profit.  They have large coal reserves, and so lots of cheap power, but there are sanctions on exporting raw coal.  There are no sanctions on burning your coal to run bitcoin mines and then selling the bitcoins anonymously.  http://money.cnn.com/2017/12/12/technology/north-korea-bitcoin-hoard/index.html

We also know that several of North Korea's global ransomware attacks demanded payment in bitcoin.  How else would North Korean hackers get paid for unencrypting your files, if the're not allowed to use regular banks?  It sounds like they mostly made immediate conversions from bitcoin to other crypto currencies, again as a way of anonymizing their crimes.  https://www.wsj.com/articles/its-official-north-korea-is-behind-wannacry-1513642537

And North Korea is clearly responsible for several of the major bitcoin heists from the exchanges, especially the ones in South Korea.  http://fortune.com/2017/12/22/north-korea-bitcoin-heist/

So no, I don't think it's quite as simple as "using the internet supports bitcoin terrorists."  North Korea is a terrorist state, that is super involved in bitcoin because it allows them to skirt sanctions.  I think this is probably the single biggest threat to the bitcoin "industry", that the UN may decide to sanction and restrict it because it's a tool used primarily by terrorists and criminals.  https://www.express.co.uk/news/world/895564/North-Korea-news-World-War-3-latest-bitcoin-price-Kim-Jong-un-nuclear-Donald-Trump

The global financial system may by universally corrupt, but it does have some benefits.  One of those benefits is that the world's financial powers can use it to restrict rogue states that threaten us with nuclear weapons.  Bitcoin's founders may have had high ideals about subverting a corrupt system, but there is definitely a reason why bitcoin's primary uses have been in black markets and it's NOT because criminals love their digital freedom.


« Last Edit: December 24, 2017, 12:23:27 PM by sol »

maizeman

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Re: Is it too late [bitcoin]?
« Reply #453 on: December 24, 2017, 12:00:53 PM »
What a load of crap! Of course, there would be no bitcoin without the internet, so I guess everyone on this forum is supporting terrorists!

I think the specifics were not that North Korea was just buying and holding 30% of the bitcoins in the world, but that they were hosting the tumblers that anonymize bitcoin purchases to make them untraceable.  The tumblers execute thousands (millions?) of tiny bitcoin transactions in order to obscure the blockchain histories.  They're a necessary step if you want it to be truly anonymous.  https://www.bloomberg.com/news/articles/2017-12-14/north-korea-s-bitcoin-play

Thanks for posting a link sol, but having read through it I didn't see any reference to evidence that bitcoin tumbers being hosted in North Korea, although it sounded like maybe they might sometimes be used by North Koreans (which seems plausible). Did I miss something?

If folks genuinely want to be anonymous, generally they are going to use a currency like Monero or ZCash. The coins you receive back from a bitcoin tumbling service may not be linked to your own misdeeds, but they are pretty darn certain to be linked to SOMEONE's misdeeds. Also with the current spike in transaction fees (we're now on the 3rd day over $50/transaction), it would surprise me a lot if bitcoin tumbling was still economically viable.

sol

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Re: Is it too late [bitcoin]?
« Reply #454 on: December 24, 2017, 12:39:09 PM »
Thanks for posting a link sol, but having read through it I didn't see any reference to evidence that bitcoin tumbers being hosted in North Korea,

I haven't been able to relocate the source where I read the 30% number, sorry. 

KTG

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Re: Is it too late [bitcoin]?
« Reply #455 on: December 25, 2017, 10:00:35 PM »
Here we go:

Israel is the latest country to signal a crackdown on cryptocurrencies

Israel's stock market regulator has proposed bans on stock exchange listings for firms based on cryptocurrencies such as bitcoin.

Read more: https://www.cnbc.com/2017/12/25/israel-may-ban-bitcoin-cryptocurrency-companies-from-tel-aviv-listing.html





Padonak

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Re: Is it too late [bitcoin]?
« Reply #456 on: December 26, 2017, 03:43:32 PM »
In my honest opinion it is safer to run around olongapo with no condoms than to trust bitcoin as a long term investment.

Happy Holidays, No  Hell no fuck that, Merry Christmas!

Mike

I had to google it to understand the reference. But why did you pick olongapo of all places, not say Manila or Cebu?

sol

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Re: Is it too late [bitcoin]?
« Reply #457 on: December 26, 2017, 03:53:29 PM »
I had to google it to understand the reference. But why did you pick olongapo of all places, not say Manila or Cebu?

Personal experience?

Padonak

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Re: Is it too late [bitcoin]?
« Reply #458 on: December 26, 2017, 03:57:49 PM »
I had to google it to understand the reference. But why did you pick olongapo of all places, not say Manila or Cebu?

Personal experience?

Are you assuming my gender?

sol

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Re: Is it too late [bitcoin]?
« Reply #459 on: December 26, 2017, 04:00:51 PM »
I had to google it to understand the reference. But why did you pick olongapo of all places, not say Manila or Cebu?

Personal experience?

Are you assuming my gender?

I can't possibly see how.  Did I use a gendered pronoun?

maizeman

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Re: Is it too late [bitcoin]?
« Reply #460 on: December 26, 2017, 04:08:53 PM »
I am guessing sol meant "personal experience?" as speculation about why aboatguy used Olongapo in their original post on Dec. 22nd and not more widely known cities like Manila.

I am guessing Podanak read the same "personal experience?" as a question by sol about whether Podanak had traveled to Manila or Cebu as a customer in the sex trade (which, if conforming to gender stereotypes would imply that Podanak was male).

If these guesses are correct, hopefully that helps clear things up. If the guesses are incorrect, please disregard and carry on.

shadow

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Re: Is it too late [bitcoin]?
« Reply #461 on: December 26, 2017, 08:45:31 PM »
I am guessing sol meant "personal experience?" as speculation about why aboatguy used Olongapo in their original post on Dec. 22nd and not more widely known cities like Manila.

I am guessing Podanak read the same "personal experience?" as a question by sol about whether Podanak had traveled to Manila or Cebu as a customer in the sex trade (which, if conforming to gender stereotypes would imply that Podanak was male).

If these guesses are correct, hopefully that helps clear things up. If the guesses are incorrect, please disregard and carry on.

This is the problem of having different frames of reference and also presuming; one feels accused or persecuted when there's no such intent, etc.

Regarding 'Olongapo', he could simply have read about it somewhere and liked the word.

shadow

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Re: Is it too late [bitcoin]?
« Reply #462 on: December 26, 2017, 09:04:57 PM »
I read one report that said on any given day, approximately 30% of all bitcoin trades involve North Korean money laundering.  It's a way for them to avoid UN sanctions on their financial markets.

Just saying.  Sometimes operating outside the traditional financial sector isn't quite the moral high ground that some people wish it could be.  Are you comfortable supporting a terrorist state, if it could make you money?

I found two articles discussing this:
https://www.thecipherbrief.com/article/tech/terror-finance-age-bitcoin
https://www.foreignaffairs.com/articles/2017-04-21/are-terrorists-using-cryptocurrencies

Both articles basically say it's inconclusive that crypto is being used to effectively finance terrorism:

"Part of the reason virtual currency has yet to become a foundation of terrorism financing is that conventional payment methods, such as cash, remain effective. Most terrorist funding presently occurs through an informal cash-based money transfer mechanism known as hawala networks. Cash is liquid, easily exchangeable, anonymous, and does not require the technical infrastructure missing in many places terrorists operate, particularly northern Nigeria, Yemen, and the Horn of Africa."

Cryptocurrency is a technology, and that it can be used as money is secondary. Economies that adopt it will have a competitive advantage over economies that don't. There are costs, insecurities, and inefficiencies in not be being able to effectively prove land deed or that an accounting record has been tampered with or value exchanges, etc; this where blockchain tech can redress those issues.
 
I won't deny that crypto can be used by bad actors for malicious purposes (terrorism, dark markets, human trafficking, etc). However, it's not clearcut to say that if you support crypto, you support terrorism. If you can say this about crypto, why can't you say this about guns, cash, science, the internet, or any tech?

I make a clear distinction between tools and how people use them. It's an issue of policy and enforcement, and not outright banning because of malicious use.

Indexer

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Re: Is it too late [bitcoin]?
« Reply #463 on: December 26, 2017, 09:37:37 PM »
Here we go:

Israel is the latest country to signal a crackdown on cryptocurrencies

Israel's stock market regulator has proposed bans on stock exchange listings for firms based on cryptocurrencies such as bitcoin.

Read more: https://www.cnbc.com/2017/12/25/israel-may-ban-bitcoin-cryptocurrency-companies-from-tel-aviv-listing.html

Quote from the article: "Shares of Blockchain, which on Sunday changed its name from Natural Resources, have soared some 5,000 percent in the past few months since it announced it would shift its focus from mining for gold and iron to mining cryptocurrencies."

What?  I assume the company executives know that specialization in mining gold doesn't translate to mining bitcoin, but do their investors know that?

Let's pretend for a second this was their real strategy, which I doubt. What do they do with their existing mining equipment, mining employees, land rights, assets, debts, etc.? That is all worthless mining bitcoins. Are they going to sell it all and buy server farms? How long will that take? Are they going to lay off the existing workforce? What will the severance and/or unemployment benefit costs be? How long will the layoffs take? Do they have any crypto experts now? Will they hire more? What will that cost? How long will it take to hire the new employees? How long will it take for the crypto side of the business to reach profitability? Will the new cash flows cover existing debts? Speaking of debts, how much new debt will the company have to take on to finance all of this? How will this new business compete with existing crypto companies who already have experts, server farms, and who don't have all of this additional baggage? This all sounds incredibly risky, time consuming, and less viable than their existing business. Anyone thinking about this rationally wouldn't drive the stock price up 5,000%, they would be driving it down while insisting on leadership changes.

Conclusion: it's irrational exuberance

sol

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Re: Is it too late [bitcoin]?
« Reply #464 on: December 26, 2017, 10:38:59 PM »
Both articles basically say it's inconclusive that crypto is being used to effectively finance terrorism:

That's probably fair, in broad terms.  I haven't heard of ISIS going all in on bitcoin.

But North Korea totally is.  I don't think they're doing it for the traditional reasons that terrorist networks need to raise money, like paying for desert training centers and paying off the families of suicide bombers.  They're doing it because it operates outside the traditional financial sector, which is currently allied against them.  And isn't that kind of the point of crypto currencies, to operate outside the traditional financial sector?  My understanding is that is exactly why they were created in the first place.  It seems almost tailor-made for places like North Korea that need to circumvent traditional banking.

Bitcoin has been a hugely profitable investment for some people, as lavish press coverage has brought in thousands and thousands of new investors to be the greater fool.  We've seen this story play out before, when an asset class gets too popular and prices spike beyond all reasonable expectations of profitability.  Dotcoms did it.  Iceland's currency did it.  Tulip bulbs did it.  I'm not saying bitcoin is trash, because I rather like the idea, personally.  I'm just saying that the market price of bitcoin, and the firms associated with it, has become totally disconnected from the normal rules of economics by the explosive interest from get-rich-quick public investors.  Just like with tulip bulbs.

And that sort of cash cow, however fleeting and/or technologically savvy it may be, is always going to attract organized crime and rouge nations looking to make a quick buck.  It sounds like North Korea is trying to cash in.  Maybe they're failing at it, I don't know, but they're certainly trying.  They've stolen a bunch of bitcoins, and they've run spearfishing campaigns to steal more, and they've ransomed a bunch with the WannaCry attack, and now they're mining them and actively developing exploits to steal more in the future.  Their stolen bitcoins are mostly traded for other digital currencies, and then into cash they can use to finance a regime that is currently under economic sanctions and unable to raise funding in other ways.  I suspect it's a tiny fraction of their total national revenue, but it's not zero and if you've bought or sold bitcoins before then it sounds like there's a very real chance that you've transacted with North Korea.

And like I said before, that's why I think bitcoin is a risky investment.  Not because the price is crazy volatile, or because I think it's insecure (though it has proven to be both of those things), but because I think it is potentially threatened by the international banking system locking it down, or at least making it much harder to exchange for normal money, because of it's historical involvement with places like North Korea (and with child porn, murder for hire, drug running, etc).  I think that's the real threat to bitcoin.  Civilized society might try to say no thank you, and then it won't matter how good your blockchain is.  If they make it too hard to convert it into groceries, it's just another online gaming megasword item, invaluable to the right gamers but worthless to the rest of us.

shadow

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Re: Is it too late [bitcoin]?
« Reply #465 on: December 27, 2017, 09:35:32 AM »
Civilized society might try to say no thank you, and then it won't matter how good your blockchain is.  If they make it too hard to convert it into groceries, it's just another online gaming megasword item, invaluable to the right gamers but worthless to the rest of us.

One does not cause the other. It may help to make it easier for the other to process. Do we then outlaw a thing because it makes easier for another thing to be done? Is outlawing the right solution? Is there a disproportionate use of bad vs good, or is it the opposite? What usefulness or benefits will be given up and is it worth it?

These are the questions society will have to figure out.

YttriumNitrate

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Re: Is it too late [bitcoin]?
« Reply #466 on: December 27, 2017, 01:26:10 PM »
It's in full mania mode now, so the end game (collapse) is likely near.
Don't forget the old saying that the market can stay irrational longer than you can stay solvent.


My typical gauge for determining if a correction/collapse is coming is to watch and see if the particular investment is discussed on Christmas day at the gathering of my extended family.* If bitcoin is not discussed two weeks from now, then my prediction is that bitcoin is good until 2019.

**I purposefully won't be bringing up the topic to see if someone else does.
Update from YttriumNitrate Family Christmas 2017: Bitcoin was mentioned on Christmas day (not by me). If I had any bitcoin, I'd be selling now.

ChpBstrd

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Re: Is it too late [bitcoin]?
« Reply #467 on: December 27, 2017, 01:41:43 PM »
After this bubble, we will read back over this thread. What will we think?

I predict the discussion will seem remarkably detailed, when simple bubble pattern-recognition was all there ever was to talk about.

The various technical-yet-vague justifications will seem fascinating, but catastrophically misapplied. The fact that many of the people who lost their life savings on the cryptocurrency fad also lived through the housing and dot-com bubbles will seem like a puzzle.

sol

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Re: Is it too late [bitcoin]?
« Reply #468 on: December 27, 2017, 02:07:27 PM »
Just to pile on, after my posts above, Richard Spencer has declared bitcoin "the currency of the alt right."  Yea, no thanks.

After Nazis literally marched in Charlottesville, American extremist groups started pushing digital currencies as a way to avoid government control.  They didn't like having their social media accounts suspended, and bitcoins can't be taken away from them.  It's all part of their protest.  They helped fuel the demand that has inflated the prices so much.  Thanks, hate groups!

14.88 bitcoins were semianonymously donated to the Nazi website dailystormer after it went offline.  1488 is a reference to a nazi slogan.  Nazis love bitcoin!

And why shouldn't they?  It lets them, like North Korea, avoid restrictions placed on them by traditional financial institutions.  It's like digital gold.  I seem to recall the Nazis were very fond of hoarding literal gold, too, for identical reasons.

Is this the price we must pay for freedom?  Sometimes I wonder how many crypto enthusiasts have thought through the consequences of these things.  Somehow, I doubt satashi nakamoto was trying to help out the Nazis.

BattlaP

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Re: Is it too late [bitcoin]?
« Reply #469 on: December 27, 2017, 02:32:24 PM »
But sol, Nazis also use the US dollar! Surely you arenít in favour of removing the US dollar?? /s

ILikeDividends

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Re: Is it too late [bitcoin]?
« Reply #470 on: December 27, 2017, 02:57:04 PM »
But sol, Nazis also use the US dollar! Surely you arenít in favour of removing the US dollar?? /s
That's not really a comparable example.

There are federal banking controls on reporting cash transactions to the government which don't exist for crypto currencies.  The lack of these controls make crypto transactions much more attractive for cloaking illicit activities.
 
Federal Banking Rules on Withdrawing Large Sums of Cash
https://finance.zacks.com/federal-banking-rules-withdrawing-large-sums-cash-1696.html

Quote
A 1970 anti-money-laundering law known as the Bank Secrecy Act spells out the rules for large cash withdrawals. In general, banks must report any transaction involving at least $10,000 in cash. That includes not only withdrawals but also deposits, currency exchanges (such as swapping dollars for euros or Japanese yen) and the purchase of traveler's checks. The law also requires banks to check identification on any transaction that would trigger a report. In other words, even if your bank doesn't usually ask for ID with withdrawals, it must do so for withdrawals over $10,000.
« Last Edit: December 27, 2017, 03:03:53 PM by ILikeDividends »

maizeman

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Re: Is it too late [bitcoin]?
« Reply #471 on: December 27, 2017, 05:50:03 PM »
I saw the white supremacist article and wondered if it would show up in this thread.

To have a meaningful debate we'd need to know two things: 1) how significant are the negative uses as a proportion of the total use of the technology* and 2) how large is the benefit for negative actors of using the technology relative to their next best option.**

Since we don't have good data on either of these things with regard to cryptocurrencies and either north korea or white supremacists, any discussion is going to boil down to us having different assumptions about what the most likely "real" answer is for #1 and #2 above. Doesn't seem like a particularly fruitful topic for discussion to me.

*Roads are used in the commission of almost every bank robbery, yet bank robberies make up a tiny fraction of the uses of roads, so banning roads to cut down on bank robberies would be silly. In contrast, KTW ammunition ("cop killer bullets") are used in only a small fraction of total crimes, yet a large fraction of the total civilian use cases for KTW ammunition were criminal, resulting in a federal ban.

**If you want to inject heroin, and you don't have access to a needle, the next best alternative is ... I'm honestly not sure, I don't know much about heroin, but I'm pretty sure it's a lot less effective than a needle, so there are lots of efforts (rightly or wrongly) to control access to IV needles. Because the next best alternative is an awful lot worse.

In contrast, if you want to smoke pot, and you don't have access to proper rolling paper, you could substitute a piece of newspaper, and probably make a joint which worked about as well (again I don't have experience). So laws to control access to cigarette paper isn't a great way to control marijuana use. Because the next best alternative is only a bit more inconvenient than the thing you would ban.

phil22

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Re: Is it too late [bitcoin]?
« Reply #472 on: December 27, 2017, 05:58:00 PM »
Just to pile on, after my posts above, Richard Spencer has declared bitcoin "the currency of the alt right."  Yea, no thanks.

...

And why shouldn't they?  It lets them, like North Korea, avoid restrictions placed on them by traditional financial institutions.  It's like digital gold.  I seem to recall the Nazis were very fond of hoarding literal gold, too, for identical reasons.

Is this the price we must pay for freedom?  Sometimes I wonder how many crypto enthusiasts have thought through the consequences of these things.  Somehow, I doubt satashi nakamoto was trying to help out the Nazis.

"free as in liberty" decentralized currencies have been invented.  "it's too late" -- they can't be uninvented and they can't be killed by banning them.  bad people will use them, and good people will use them.  yes, that's the price we pay for freedom.

how does bitcoin help the nazi cause?  and if it did, what's the problem?  nazis are free to gather and say whatever they want.  if you're against the free movement of money, are you also against the first amendment?

do you sit in the comfort of an American home paid for with freely-open global investment options as you disparage anything that helps prospective investors in China looking for a way to get some of their money out of China?  are you against corruption-resistant smartphone-based banking for the billions of unbanked people around the world?

do you trust governments to be in charge of currencies for the long term?  governments which can be headed by people like Putin, Erdogan, Trump, Assad, Kim, Maduro, and Mugabe?  governments that fiddle with inflation however they want, get into trillions of dollars of debt, and use taxpayer money to fund unpopular wars, corrupt government contracts, pet pork barrel projects, and copious amounts of golf?  i'm not against taxation or governments in general, but they have proven time and again that they are terrible with managing money on a good day, and criminally corrupt on a bad day.

if you're against the free movement of money then you're probably against libertarianism in general.  that's a valid position but i'm surprised to see it so often on this board.  financial independence is only possible because of freedom and privacy we enjoy with our careers, our investments, and our money.

ILikeDividends

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Re: Is it too late [bitcoin]?
« Reply #473 on: December 27, 2017, 06:33:54 PM »
Banning roads would have far-reaching detrimental effects outweighing whatever harm they might prevent in the success of bank robberies. A dubious assumption, since bank robberies are as old as banking.

Likewise, banning IV needles would also have far-reaching detrimental effects.

Banning cigarette rolling paper would at least have negative economic consequences for companies, employees, and taxing authorities that profit from their legitimate use, and would likewise be pretty useless in discouraging marijuana consumption.

I'm not necessarily advocating banning crypto currencies because of neo-Nazi or NK exploitation.  My point is, that even if they were banned, what far-reaching detrimental effects would that ban have?  In my life, personally, that would be a giant ZERO effect.  There is nothing in my life that I need that I cannot get easily without using that technology at all, or ever.

Conversely, I use roads every day.  And IV needles have, upon various occasions, saved my life.  If cryptos disappeared tomorrow, I wouldn't even notice it.  For bad actors, it helps solve an obvious problem.  For the vast majority of hard-working honest folks, it really is nothing more than a novelty.

Having said all that, I do have libertarian leanings, and I wouldn't support a ban of crypto currencies any more than I would support outlawing casinos.  People that want to roll the dice should be allowed to own dice.
« Last Edit: December 27, 2017, 06:53:26 PM by ILikeDividends »

KTG

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Re: Is it too late [bitcoin]?
« Reply #474 on: December 28, 2017, 05:37:34 AM »
Oh another government stepping up:

Bitcoin drops 11% as South Korea moves to regulate cryptocurrency trading

Bitcoin fell on Thursday, marking the latest gyration following a major sell-off at the end of last week.

Read more: https://www.cnbc.com/2017/12/28/bitcoin-drops-11-percent-as-south-korea-moves-to-regulate-cryptocurrency-trading.html

shadow

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Re: Is it too late [bitcoin]?
« Reply #475 on: December 28, 2017, 11:43:49 AM »
There is nothing in my life that I need that I cannot get easily without using that technology at all, or ever.

Crypto is fledgling tech. You're also never fully cognizant of what you're missing until it exists (like the modern internet). 

Nate79

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Re: Is it too late [bitcoin]?
« Reply #476 on: December 28, 2017, 11:50:03 AM »
I'm waiting for the US govt to come down hard on crypto currency thru the N. Korea angle and the sanctions.

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maizeman

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Re: Is it too late [bitcoin]?
« Reply #477 on: December 28, 2017, 12:33:02 PM »
There is nothing in my life that I need that I cannot get easily without using that technology at all, or ever.

Crypto is fledgling tech. You're also never fully cognizant of what you're missing until it exists (like the modern internet).

Yup. So the North Korea/white supremacist debate just boils down to whether the person posting thinks there are significant benefits (existing or potential) to the technology, which is the same debate people have been having for pages and pages on this thread already.

sol

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Re: Is it too late [bitcoin]?
« Reply #478 on: December 28, 2017, 12:55:01 PM »
debate just boils down to whether the person posting thinks there are significant benefits (existing or potential) to the technology

I still don't see any. 

Bitcoins are just digital objects.  They don't have any value on their own, they serve no useful purpose.  Credit cards and paypal are both easier ways to buy things online, and they work more seamlessly with our existing financial structures.

Most objects have SOME intrinsic value.  If you buy a ton of oranges or pork bellies, you can eat them.  If you buy a building you can live in it or rent it out.  Bitcoins don't appear to have any intrinsic value at all, since they can't do anything.  The only thing they are good for is selling to someone who values them more highly than you do, which is the same thing good old US dollars are already good for.  Except dollars are much more widely available and accepted, hold their value better, are more anonymous, are easier to exchange into other formats, can be converted into a physical form for offline transactions, and are easier to manipulate for economic policy reasons.

The ONLY added utility that I can see bitcoin providing is that they can be easily traded outside of the banking restrictions of the kind we place on organized crime, rogue states, and terrorist networks.  After being traded they can be converted back into real money, which is deliberately more difficult to trade if you are a criminal or rogue state or terrorist.  So their great advantage is that they subvert the existing power structure, but for most of us the existing power structure is working just great, thanks. 

The blockchain idea is cool.  Conceptually, I like it.  But I don't see any reason for all of the hype, like there is literally NO chance bitcoins are ever going to supplant normal money in the global economy (for a variety of reasons). I can see some nation states using similar technology (not bitcoin) to back their currency, but the national currencies will still exist and bitcoin will not exist in any meaningful way.  I mean tulip bulbs still exist too, but not as an investment.
« Last Edit: December 28, 2017, 01:01:20 PM by sol »

maizeman

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Re: Is it too late [bitcoin]?
« Reply #479 on: December 28, 2017, 01:05:27 PM »
Yup. And given that you hold that point of view (that there is no potential societal value to the technology of cryptocurrencies*), it makes complete sense to me that you'd feel things like the use of bitcoin by undesirable actors (north koreans and white supremacists) is enough to condemn the technology.

*Which is a separate debate from "the current price of bitcoin at this particular point in time is the result of a bubble" debate. I think pretty much everyone on this thread is on the same side of that second debate.

sol

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Re: Is it too late [bitcoin]?
« Reply #480 on: December 28, 2017, 01:13:11 PM »
Yup. And given that you hold that point of view (that there is no potential societal value to the technology of cryptocurrencies*), it makes complete sense to me that you'd feel things like the use of bitcoin by undesirable actors (north koreans and white supremacists) is enough to condemn the technology.

Let's slow up a second, there.  I don't "condemn" the technology.  I like the technology.  It's just a useless and overhyped technology with no long term role in our society, like fidget spinners and the Macarena.  Whether or not "undesirable actors" also use bitcoin is totally secondary to my opinion about its utility.  It was a scam long before any of that happened.

I can see a long term use for blockchain technology.  I see zero long term use for bitcoin, other than as a historical artifact for niche collectors interested in the "first" example of the technology, like dudes who collect Model T cars.  Bitcoin will be easily surpassed by superior examples of digital currencies, because it was poorly designed to be a global currency in a global economy, just like the Model T was poorly designed compared to modern cars.  Except you can't polish a bitcoin and put it in a museum.

BattlaP

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Re: Is it too late [bitcoin]?
« Reply #481 on: December 28, 2017, 02:29:29 PM »
But sol, Nazis also use the US dollar! Surely you arenít in favour of removing the US dollar?? /s
That's not really a comparable example.

There are federal banking controls on reporting cash transactions to the government which don't exist for crypto currencies.  The lack of these controls make crypto transactions much more attractive for cloaking illicit activities.
 
Federal Banking Rules on Withdrawing Large Sums of Cash
https://finance.zacks.com/federal-banking-rules-withdrawing-large-sums-cash-1696.html

Quote
A 1970 anti-money-laundering law known as the Bank Secrecy Act spells out the rules for large cash withdrawals. In general, banks must report any transaction involving at least $10,000 in cash. That includes not only withdrawals but also deposits, currency exchanges (such as swapping dollars for euros or Japanese yen) and the purchase of traveler's checks. The law also requires banks to check identification on any transaction that would trigger a report. In other words, even if your bank doesn't usually ask for ID with withdrawals, it must do so for withdrawals over $10,000.

Just for your own internet education, Ď/sí is a sarcasm tag.

ILikeDividends

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Re: Is it too late [bitcoin]?
« Reply #482 on: December 28, 2017, 02:36:28 PM »
[
Just for your own internet education, Ď/sí is a sarcasm tag.

Ah, sorry about that. My internet school practiced a more explicit tag.

<SARCASM>
Guess I'm just an old HTML fogy.
</SARCASM>

;)
« Last Edit: December 28, 2017, 02:39:34 PM by ILikeDividends »

zoltani

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Re: Is it too late [bitcoin]?
« Reply #483 on: December 28, 2017, 04:47:31 PM »
Just to pile on, after my posts above, Richard Spencer has declared bitcoin "the currency of the alt right."  Yea, no thanks.

After Nazis literally marched in Charlottesville, American extremist groups started pushing digital currencies as a way to avoid government control.  They didn't like having their social media accounts suspended, and bitcoins can't be taken away from them.  It's all part of their protest.  They helped fuel the demand that has inflated the prices so much.  Thanks, hate groups!

14.88 bitcoins were semianonymously donated to the Nazi website dailystormer after it went offline.  1488 is a reference to a nazi slogan.  Nazis love bitcoin!

And why shouldn't they?  It lets them, like North Korea, avoid restrictions placed on them by traditional financial institutions.  It's like digital gold.  I seem to recall the Nazis were very fond of hoarding literal gold, too, for identical reasons.

Is this the price we must pay for freedom?  Sometimes I wonder how many crypto enthusiasts have thought through the consequences of these things.  Somehow, I doubt satashi nakamoto was trying to help out the Nazis.


This kind of reminds me of the early 2000s commercials that claimed if you smoke pot you fund terrorism. Take a behavior that you (government) don't agree with and tie it to nefarious activities to shame people into the behavior you desire. Good show, i say.

sol

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Re: Is it too late [bitcoin]?
« Reply #484 on: December 28, 2017, 05:07:47 PM »
This kind of reminds me of the early 2000s commercials that claimed if you smoke pot you fund terrorism.

Nah, trading bitcoins and smoking pot aren't necessarily good for you, but neither are they evil because of terrorism.  They're just bad for you.

In this case, the analogy between bitcoin and opium is probably more apt, since terrorists have historically grown and processed opium explicitly to fund terrorist activities.  Is it the only way terrorism is funded?  Certainly not, but it is one way.

I make the same argument about oil, btw. 

phil22

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Re: Is it too late [bitcoin]?
« Reply #485 on: December 28, 2017, 05:12:08 PM »
Yup. And given that you hold that point of view (that there is no potential societal value to the technology of cryptocurrencies*), it makes complete sense to me that you'd feel things like the use of bitcoin by undesirable actors (north koreans and white supremacists) is enough to condemn the technology.

Let's slow up a second, there.  I don't "condemn" the technology.  I like the technology.  It's just a useless and overhyped technology with no long term role in our society, like fidget spinners and the Macarena.

you "don't condemn it" but "it's just a useless technology"?  what?

Whether or not "undesirable actors" also use bitcoin is totally secondary to my opinion about its utility.  It was a scam long before any of that happened.

how to you define "scam"?  it's abundantly clear that it's a highly volatile and speculative market without government oversight.

I can see a long term use for blockchain technology.  I see zero long term use for bitcoin, other than as a historical artifact for niche collectors interested in the "first" example of the technology, like dudes who collect Model T cars.

i assume by "bitcoin" you mean "cryptocurrencies" here.  what's the long-term use for blockchain without a built-in incentive mechanism for participants?

Bitcoin will be easily surpassed by superior examples of digital currencies, because it was poorly designed to be a global currency in a global economy, just like the Model T was poorly designed compared to modern cars.  Except you can't polish a bitcoin and put it in a museum.

i agree that bitcoin isn't performing well at a technical level for the last year or two years.  and as you know there are thousands of competing cryptocurrencies.  there's a good chance one or more of them will take bitcoin's place sooner or later.  but bitcoin isn't a stagnant thing.  it's like the "toyota camry".  it can be (and has been) tweaked and upgraded over time.  there's also a good chance that some upgraded fork of a fork of bitcoin will still be around decades from now.

maizeman

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Re: Is it too late [bitcoin]?
« Reply #486 on: December 28, 2017, 05:17:00 PM »
Bitcoin will be easily surpassed by superior examples of digital currencies, because it was poorly designed to be a global currency in a global economy, just like the Model T was poorly designed compared to modern cars.  Except you can't polish a bitcoin and put it in a museum.

i agree that bitcoin isn't performing well at a technical level for the last year or two years.  and as you know there are thousands of competing cryptocurrencies.  there's a good chance one or more of them will take bitcoin's place sooner or later.  but bitcoin isn't a stagnant thing.  it's like the "toyota camry".  it can be (and has been) tweaked and upgraded over time.  there's also a good chance that some upgraded fork of a fork of bitcoin will still be around decades from now.

Yup, I can agree with this statement as well. Average transaction fees for bitcoin have been greater than $30 since the 19th, merchants and payment processors are starting to either reverse course on adopting the currency or at least adopt several other cryptocurrencies in parallel (and yes in theory the lightening network is going to fix that, but right now it doesn't exist in any widely adopted form).

So if your definition of "the technology" is bitcoin specifically and not cryptocurrencies generally, then please do carry on, nothing to see here.

ILikeDividends

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Re: Is it too late [bitcoin]?
« Reply #487 on: December 28, 2017, 05:25:05 PM »
This kind of reminds me of the early 2000s commercials that claimed if you smoke pot you fund terrorism.

Nah, trading bitcoins and smoking pot aren't necessarily good for you, but neither are they evil because of terrorism.  They're just bad for you.

In this case, the analogy between bitcoin and opium is probably more apt, since terrorists have historically grown and processed opium explicitly to fund terrorist activities.  Is it the only way terrorism is funded?  Certainly not, but it is one way.

I make the same argument about oil, btw.
I guess my libertarian stripes are going to show clearly here.

There are many very safe ways of ingesting pot besides smoking it.  Smoking just about anything is a crap-shoot, health wise, because combustion creates thousands of chemicals, randomly, that didn't ever exist in the original material.

In a supposedly free society, where there is mass appeal for a relatively harmless product (especially harmless as compared with alcohol), outlawing that substance is downright anti-American, in my humble opinion.

So the government outlaws it anyway.  Then the only source to satisfy that demand comes from a criminal enterprise.  Then, to top it all off, the government rhetoric is that the customer is funding a criminal (or terrorist) enterprise.

Wait a minute.  Didn't the government just drive that highly lucrative business opportunity straight into the eager (non-tax-paying) hands of the criminals?  Talk about shooting yourself in the foot.

</RANT>

« Last Edit: December 28, 2017, 05:32:50 PM by ILikeDividends »

sol

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Re: Is it too late [bitcoin]?
« Reply #488 on: December 28, 2017, 05:27:09 PM »
you "don't condemn it" but "it's just a useless technology"?  what?

Exactly.  Just like fidget spinners.  They're not evil.  I don't hate them, or want them destroyed.  They're just silly and useless and a passing fad.

Quote
how to you define "scam"?  it's abundantly clear that it's a highly volatile and speculative market without government oversight.

In this case, I define the scam as "an artificially created new product with no intrinsic value, vastly overhyped by paid media exposure to pump the price up, and then sold for a profit to greater fools."  Just like all of those .com companies that didn't actually have an internet business model, and only used the .com label to draw investors and cash out.  Did you see that the Long Island Ice Tea company spiked their stock price by announcing they were considering investing in blockchain technology?  No relevance, no expertise, no plan.  Just a press release and a quick $20 million payday.  That's a scam.

Quote
I can see a long term use for blockchain technology.  I see zero long term use for bitcoin, other than as a historical artifact for niche collectors interested in the "first" example of the technology, like dudes who collect Model T cars.

i assume by "bitcoin" you mean "cryptocurrencies" here. 

No, I explicitly meant bitcoin.  The language was precise.  Other cryptocurrencies may find utility someday, but bitcoin will not.  Bitcoin will be worthless in a few years, except to novelty collectors.  Which is why the current price of bitcoin is stupid. 

If you like the idea of decentralized online transfers of digital objects that can then be converted into real money, that's all well and good.  It's a fine technology for preventing counterfeiting of abstract digital objects.  That is not a reason to buy bitcoins as a long term investment. 

phil22

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Re: Is it too late [bitcoin]?
« Reply #489 on: December 28, 2017, 06:30:00 PM »
Quote
how to you define "scam"?  it's abundantly clear that it's a highly volatile and speculative market without government oversight.

In this case, I define the scam as "an artificially created new product with no intrinsic value, vastly overhyped by paid media exposure to pump the price up, and then sold for a profit to greater fools."  Just like all of those .com companies that didn't actually have an internet business model, and only used the .com label to draw investors and cash out.  Did you see that the Long Island Ice Tea company spiked their stock price by announcing they were considering investing in blockchain technology?  No relevance, no expertise, no plan.  Just a press release and a quick $20 million payday.  That's a scam.

first of all i agree that bitcoin is performing so terribly, on a technical level with fees and congestion, that there's a good chance it's doomed.  there's a good chance you're right and the current consensus fork will be worthless in a matter or years or even months.  time will tell.  but i think it's performed well on a technical level, and survived over the last 8-9 years, and therefore it no longer qualifies as a "fad" or "scam".

that being said -- that's an extremely wide definition for scam.  "artificial" is a non-argument.  society and everything in it is artificial.  "intrinsic value" is also a non-argument.  if "intrinsic value" isn't an oxymoron the only things that have it are food and water.  fidget spinners are very artificial and have no intrinsic value, and they enjoyed a lot of media exposure this year.  does that make fidget spinners a scam?  perhaps anything you don't like or didn't personally profit from is a scam.

i agree that the company name change was a scammy opportunistic move.  but that has nothing to do with the price people have been buying and selling bitcoin at for the past 8 years.

BattlaP

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Re: Is it too late [bitcoin]?
« Reply #490 on: December 28, 2017, 08:48:28 PM »
Quote from: phil22
"intrinsic value" is also a non-argument.  if "intrinsic value" isn't an oxymoron the only things that have it are food and water.  fidget spinners are very artificial and have no intrinsic value, and they enjoyed a lot of media exposure this year.  does that make fidget spinners a scam?  perhaps anything you don't like or didn't personally profit from is a scam.

lol no dude intrinsic value is like paying a dividend, owning assets, profits from an established customer base, etc. To turn your stupid example into something that makes sense, a business selling fidget spinners might have some intrinsic value and might be an investment worth looking at. Buying individual fidget spinners and hoping to sell them to someone else later on for a higher price would be stupid.

One of the main reasons that bitcoin can drop 30% a day is because there is no intrinsic value, nothing that people can agree has a distinct dollar value attached, therefore there is really no floor to its price. Its utility would not change if it was worth one cent or one million.
« Last Edit: December 28, 2017, 08:53:52 PM by BattlaP »

sol

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Re: Is it too late [bitcoin]?
« Reply #491 on: December 28, 2017, 11:24:49 PM »
lol no dude intrinsic value is like paying a dividend, owning assets, profits from an established customer base, etc.

Right, all investments generate profits.  When you buy stock you are buying a slice of that corporation's future quarterly cash flow.  When you buy bonds you are buying future interest payments.  When you buy real estate you are buying future (real or imputed) rents.  The generation of regular future profits is what makes them investments.

When you buy beanie babies, they produce nothing.  There is no dividend, no interest, no utility you can sell every month.  The only potential way to make money is to find some "greater fool" willing to pay a higher price for an otherwise depreciating asset. 

Bitcoin is much closer to beanie babies than it is to real estate.  It doesn't do anything.  It only has value as long as it remains popular to collect.

edited to add:  my wife made some serious money on beanie babies.  Some people still pay good money for mint condition original issue ones, even today.  That doesn't make them an investment.
« Last Edit: December 29, 2017, 10:25:18 AM by sol »

KTG

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Re: Is it too late [bitcoin]?
« Reply #492 on: December 29, 2017, 08:45:30 AM »
What cracks me up about listening to people defend bitcoin or these other cryptos, is that all I hear how great the technology that involves them is. What I can't understand is how few address how many cryptos there are, how many that are no doubt being developed (and I mean, who wouldn't want to create an artificial currency, sell it all off to morons, and walk away with a profit?). Think things are confusing now? Wait a couple of years. Today its Bitcoin, tomorrow it seems it will be Ripple. Well, wait, after Ripple it will be something else. And where am I able to spend all this funny money? Can I buy gas with it? Groceries? Pay my mortgage? No? Then what the hell am I paying $1000s for them? Oh wait, Bitcoin lists some 20 companies foolish enough to deal with it. Its hysterical. I know people have made some money off trading bitcoin, but its really much like making money trading Monopoly money.

Some people bring up comparing it to gold. I don't own gold either. I figure if the sh!t hits the fan where GOLD is more important than the US dollar, then society as we know it will have collapsed and I am better off stocking up on bullets and cigarettes, but I know people have made money off that too. But gold is a natural resource and there is a finite amount on Earth. Its been sought after by just about every civilization. I have no need for it, but I can understand others that might.

I can develop a crypto currency. You can. We all can. And that's a problem.

KTG

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Re: Is it too late [bitcoin]?
« Reply #493 on: December 29, 2017, 08:53:39 AM »
I also want to add that all this is happening because the world economy is doing pretty good. I can assure you if we were in tough times, no one would be spending their hard earned and limited funds on this stuff. Cryptos are a fringe 'investment' (~ I hate calling it that), and in hard times people are going to want payment in currencies that are STABLE, and these wont be.

maizeman

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Re: Is it too late [bitcoin]?
« Reply #494 on: December 29, 2017, 09:38:32 AM »
KTG, I disagree with some of your post, but I agree with you that it will be fascinating to see how cryptocurrency prices respond during the next recession. Since bitcoin dates back to January 2009, all but the first two months of the set of "historical" cryptocurrency data coincide with a nearly nine year long bull market.

belly05

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Re: Is it too late [bitcoin]?
« Reply #495 on: December 29, 2017, 10:13:15 AM »
I personally think Bitcoin is fascinating, and from reading around on this site it looks like I'm going to be in the minority view. I do believe its past the time to invest in bitcoin, but I'm currently investing in ripple and etherium and have been advocating to my friends and family to do the same (in small amounts)

Ripple cannot be mined so I've just purchased a few thousand dollars worth and plan to hold offline in a hardware wallet for several years (the nano ledger hardware wallet to be exact).  Maybe it has an insane run like bitcoin and I can cash out in a few years.

Etherium can be mined, I have servers already constantly running as part of a small web design business so I simply allocated any extra resources towards mining etherium.  It cost about 80/month in extra electricity to mine but so far it has a positive ROI (it generates about 2 etherium coins per month).  If you have the technical knowledge to build a mining computer I'd say go for it!  I'm happy to share the exact specifications of the mining machine I built with you in a DM if you would like.



maizeman

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Re: Is it too late [bitcoin]?
« Reply #496 on: December 29, 2017, 10:20:30 AM »
Belly, does your business already require that your servers have lots of GPUs? Or are you mining ethereum on CPUs? Or installing GPUs into existing machines to make them better at mining?

One of the startups I'm associated with has a lot of computing power that is sitting idle about 80% of the time and we've discussed whether it'd make sense to configure it to mine cryptocurrencies during downtime. I hadn't found a currency where CPU mining makes significant economic sense (we need machines with lots of CPUs and extremely large amounts of RAM, but don't do a lot of parallel computing, so the machines don't have any GPUs at all), but maybe the recent run up in prices has changed the math.

thenextguy

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Re: Is it too late [bitcoin]?
« Reply #497 on: December 29, 2017, 10:23:41 AM »
Hereís an article about the web from 1995.

http://www.newsweek.com/clifford-stoll-why-web-wont-be-nirvana-185306

Itís very interesting because the author raises some valid criticisms of the web at the time. What he was completely clueless about was that there were people working on these issues.

Itís baffling to me that people look at the current state of cryptocurrencies and think theyíll never be anything more because they have some issues that need to be addressed. There is a ridiculous amount of development going on in this space and I predict that one day many of its critics will look as equally silly as the author of that Newsweek article.

sol

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Re: Is it too late [bitcoin]?
« Reply #498 on: December 29, 2017, 12:49:34 PM »
Itís baffling to me that people look at the current state of cryptocurrencies and think theyíll never be anything more

It's not that I don't think the idea has merit, it's that I think bitcoin and the rest of these early coins will be virtually worthless.

Remember that when you pay $17k for a bitcoin, you are not investing in a blockchain technology company.  You are not betting on the successful future of crypto currencies in the global economy.  You are only betting that some other buyer in the future will pay you more than $17k for a specific bitcoin.  Just like with beanie babies.

belly05

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Re: Is it too late [bitcoin]?
« Reply #499 on: December 29, 2017, 01:36:07 PM »
Belly, does your business already require that your servers have lots of GPUs? Or are you mining ethereum on CPUs? Or installing GPUs into existing machines to make them better at mining?

One of the startups I'm associated with has a lot of computing power that is sitting idle about 80% of the time and we've discussed whether it'd make sense to configure it to mine cryptocurrencies during downtime. I hadn't found a currency where CPU mining makes significant economic sense (we need machines with lots of CPUs and extremely large amounts of RAM, but don't do a lot of parallel computing, so the machines don't have any GPUs at all), but maybe the recent run up in prices has changed the math.

Your right on the money, we have web servers that do not require any GPU's.  This year we had it in the budget to build a new machine, when we priced out the machine it added an extra 2k to add 6 GPU's to the machine.  All the mining is done by the GPU's, all the web traffic is served with the CPU's and the machine does have a good amount of RAM as well.

We are only a few months into our test but right now the machine runs with an added electricity cost to power the GPU's of right around $82/month. We are mining in a pool right now and the machine has generated about 1.8 coins per month so far over the first few months.  With the average cost of etherium hovering around $700 per coin the machine is seemingly very profitable to run.  It definitely helps that the electricty is already a business expense and thus a write off + we had to build the machine anyway so the only "added" cost was for the GPU's.