Author Topic: Is it too late [bitcoin]?  (Read 15177 times)

ketchup

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Re: Is it too late [bitcoin]?
« Reply #250 on: December 07, 2017, 07:39:29 AM »
And that's why you learn what the hell you're doing before you do anything with crypto.  Not your own private keys, not your Bitcoin.  Nicehash pays out when you hit 0.01BTC accumulated with them if you use a non-Nicehash wallet (like clearly from this, everyone should).  I had about $12 (I think) worth with them that wasn't paid out to my real wallet yet.  I'll live.

waltworks

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Re: Is it too late [bitcoin]?
« Reply #251 on: December 07, 2017, 08:42:00 AM »
For people looking to enter in the space, watch all of Andrea's videos.  He has a way with explaining everything so newbies can understand.  Take your time and don't rush in.  Buy a portion of bitcoin that you're comfortable with.  This is not going away. Don't let everyone here tell you it's a scam ponzi.

To be fair, it can be an unsustainable bubble very easily without being a scam (there are certainly scams associated with lots of cryptos, but the concept itself isn't a scam) or a ponzi scheme (in which the money coming in from later investors is used to pay the early investors and create the illusion of great returns).

I don't think anyone here would claim that bitcoin is either of those things. We are just saying that when random investing naifs are talking something up on Facebook (no matter what it is!) you should probably run the other way.

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maizeman

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Re: Is it too late [bitcoin]?
« Reply #252 on: December 07, 2017, 09:05:34 AM »
Now up $4400 in about 36 hours.

As Walt said, you can be very optimistic about the long term potential of cryptocurrencies, and still be worried that the current price trajectory of bitcoin is in a bubble that is going to result in a lot of people who are completely new to crypto buying during the rapid upswing getting burned by losses in a crash, damaging the reputation of cryptocurrencies as a whole, and causing harm to the general public's interest in the adoption of cryptocurrencies to actually make payments in the medium term.

Also, credit where credit is due, I didn't think the incipient launch of "bitcoin futures" would have such a big effect on the price of the currency itself. Lifeanon predicted that this news would cause a big uptick in demand (and hence price). With the first bitcoin futures market launching on Sunday, it is clear that I was wrong in my prediction, and Lifeanon was correct.
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ketchup

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Re: Is it too late [bitcoin]?
« Reply #253 on: December 07, 2017, 09:07:46 AM »
Now up $4400 in about 36 hours.

As Walt said, you can be very optimistic about the long term potential of cryptocurrencies, and still be worried that the current price trajectory of bitcoin is in a bubble that is going to result in a lot of people who are completely new to crypto buying during the rapid upswing getting burned by losses in a crash, damaging the reputation of cryptocurrencies as a whole, and causing harm to the general public's interest in the adoption of cryptocurrencies to actually make payments in the medium term.

Also, credit where credit is due, I didn't think the incipient launch of "bitcoin futures" would have such a big effect on the price of the currency itself. Lifeanon predicted that this news would cause a big uptick in demand (and hence price). With the first bitcoin futures market launching on Sunday, it is clear that I was wrong in my prediction, and Lifeanon was correct.
We'll see what happens when futures actually launch though.  Some on /r/bitcoin and the like seem to think "big money" is entering right now in an effort to pump and dump via shorting it once futures are available and it'll correct next week.  Nobody really knows though, of course.  My crystal ball is in the shop.

Also, I sold about a grand's worth of BTC just before this 36 hour ridiculous gain.  Whee.
« Last Edit: December 07, 2017, 09:09:48 AM by ketchup »

waltworks

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Re: Is it too late [bitcoin]?
« Reply #254 on: December 07, 2017, 09:24:17 AM »
As Walt said, you can be very optimistic about the long term potential of cryptocurrencies, and still be worried that the current price trajectory of bitcoin is in a bubble that is going to result in a lot of people who are completely new to crypto buying during the rapid upswing getting burned by losses in a crash, damaging the reputation of cryptocurrencies as a whole, and causing harm to the general public's interest in the adoption of cryptocurrencies to actually make payments in the medium term.

People are not thinking of these as currencies, they are thinking of them as magic free money. When that comes to an end (and there's still no way to go buy a bagel for lunch with any of them) I *hope* that some form of low transaction cost crypto payments system survives and is widely adopted. I agree with Maizeman here, though - the existing price trajectory is a bad thing in the long run.

The removal of the stranglehold of the credit card companies and money transfer fees is the societal benefit we want here. That 2-5% skimmed off the top of every transaction is a HUGE drag and an enormous waste. I *hate* that I can't accept quick electronic payments from customers or send payments to vendors without someone (ok, really, everyone) paying these fees.

That idea is getting lost in the "just buy as much bitcoin as you can because it always goes up" craziness. The goal here should be to let people seamlessly pay for and be paid for things (as cheaply and securely as possible) without *any excitement or expectation of crazy gains at all*. It should be boring!

-W

Canadian Ben

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Re: Is it too late [bitcoin]?
« Reply #255 on: December 07, 2017, 09:27:22 AM »
Why is there an increase in value in Bitcoins? I don't understand why someone would pay 2$ for 1$ (since Bitcoin is an exchange mechanism)

worldtraveler

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Re: Is it too late [bitcoin]?
« Reply #256 on: December 07, 2017, 09:43:24 AM »
Just watched 12million bought at 17.7k in seconds.  These aren't normal people buying.  This is just the beginning.  The herd is coming

worldtraveler

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Re: Is it too late [bitcoin]?
« Reply #257 on: December 07, 2017, 09:44:07 AM »
http://www.zerohedge.com/news/2017-12-07/banks-issue-last-minute-warning-about-risks-bitcoin-futures-trading-asks-regulator-r

ĒThomas Peterffy, a pioneer of electronic trading and head of Interactive Brokers, has warned that the introduction of bitcoin futures into a clearing house could increase systemic risk. On Wednesday Interactive said its clients would be unable to short the bitcoin futures market because of the extreme volatility of bitcoin.

waltworks

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Re: Is it too late [bitcoin]?
« Reply #258 on: December 07, 2017, 09:51:58 AM »
At what point do regulators step in? I mean, if the value gets high enough (especially if people are creating Bitcoin derivatives), it *does* become a systemic risk. Right now a bunch of people would lose a bunch of money, but not enough to cause a recession or other downstream consequences. Give it another couple orders of magnitude and it's a big big problem.

Man, I'm glad I'm FI and don't have to worry about this. It would drive me a little bit nuts to either own or NOT own any bitcoin during times like these. As it stands I can just break out the popcorn and hope that not too many people get hurt.

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lifeanon269

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Re: Is it too late [bitcoin]?
« Reply #259 on: December 07, 2017, 01:59:55 PM »
At what point do regulators step in? I mean, if the value gets high enough (especially if people are creating Bitcoin derivatives), it *does* become a systemic risk. Right now a bunch of people would lose a bunch of money, but not enough to cause a recession or other downstream consequences. Give it another couple orders of magnitude and it's a big big problem.

Man, I'm glad I'm FI and don't have to worry about this. It would drive me a little bit nuts to either own or NOT own any bitcoin during times like these. As it stands I can just break out the popcorn and hope that not too many people get hurt.

-W

Actually the higher the value goes, the lower the risk would be because volatility would go down. The global derivatives market is already a system risk. Adding the straw that is bitcoin to the camel's back I don't think will make much of a difference. Regulators haven't really stepped in on the unregulated ~$1.2 quadrillion derivatives market yet, what would make them step in on a few billion dollar derivative market?

Also, I don't think the risk goes away whether your FI or not, unless you've found a way to not be tied to the markets or the economy in anyway.

lifeanon269

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Re: Is it too late [bitcoin]?
« Reply #260 on: December 07, 2017, 02:22:59 PM »
Now up $4400 in about 36 hours.

As Walt said, you can be very optimistic about the long term potential of cryptocurrencies, and still be worried that the current price trajectory of bitcoin is in a bubble that is going to result in a lot of people who are completely new to crypto buying during the rapid upswing getting burned by losses in a crash, damaging the reputation of cryptocurrencies as a whole, and causing harm to the general public's interest in the adoption of cryptocurrencies to actually make payments in the medium term.

Also, credit where credit is due, I didn't think the incipient launch of "bitcoin futures" would have such a big effect on the price of the currency itself. Lifeanon predicted that this news would cause a big uptick in demand (and hence price). With the first bitcoin futures market launching on Sunday, it is clear that I was wrong in my prediction, and Lifeanon was correct.

Actually I was wrong too. I was far too low in my estimate. I didn't think the price would be anywhere near what it is currently. As you and others have stated, that is quite alarming. I'm a big bitcoin bull long-term, but I'm not rabid to the point where I can't recognize when something might not be sustainable.

It isn't the price that I'm concerned with. What's also alarming is the fact that the big price spike today was largely seen on Coinbase which is the market entry point for all new users to bitcoin. That means that the large spike in price likely has to do with new users making first time purchases. New users are a good thing, but when it happens in a frenzy like it did today, then that's probably not going to end well for many of those new users. Especially considering the fact that arbitrage sharks were just circling around waiting to eat some of the new users willing to buy at sky high prices relative to the going rate for bitcoin on most other exchanges.

waltworks

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Re: Is it too late [bitcoin]?
« Reply #261 on: December 07, 2017, 02:33:20 PM »
Also, I don't think the risk goes away whether your FI or not, unless you've found a way to not be tied to the markets or the economy in anyway.

Sorry, those paragraphs were intended to be separate thoughts. Poorly written on my part. What I meant was that I don't have to spend any time kicking myself for not putting all my money in bitcoin a year ago, nor do I have to sweat out when to sell my Bitcoin gains. I can just watch and be entertained.

If the whole economy goes to hell because of bitcoin somehow, I'm just as screwed as everyone else. :)

-W

thenextguy

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Re: Is it too late [bitcoin]?
« Reply #262 on: December 07, 2017, 02:47:26 PM »
Why is there an increase in value in Bitcoins? I don't understand why someone would pay 2$ for 1$ (since Bitcoin is an exchange mechanism)

Currencies are constantly increasing/decreasing in value. It's not unique to Bitcoin.

https://www.bloomberg.com/markets/currencies


seattlecyclone

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Re: Is it too late [bitcoin]?
« Reply #263 on: December 07, 2017, 02:53:44 PM »
Why is there an increase in value in Bitcoins? I don't understand why someone would pay 2$ for 1$ (since Bitcoin is an exchange mechanism)

Currencies are constantly increasing/decreasing in value. It's not unique to Bitcoin.

https://www.bloomberg.com/markets/currencies



Yes, but for most currencies a 1% change in a day is a pretty big deal. I know that something costing $10 today will cost roughly $10 tomorrow.

Bitcoin has doubled in the past month. They're not really the same thing.
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thenextguy

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Re: Is it too late [bitcoin]?
« Reply #264 on: December 07, 2017, 02:58:34 PM »
Why is there an increase in value in Bitcoins? I don't understand why someone would pay 2$ for 1$ (since Bitcoin is an exchange mechanism)

Currencies are constantly increasing/decreasing in value. It's not unique to Bitcoin.

https://www.bloomberg.com/markets/currencies



Yes, but for most currencies a 1% change in a day is a pretty big deal. I know that something costing $10 today will cost roughly $10 tomorrow.

Bitcoin has doubled in the past month. They're not really the same thing.

The post I was responding to implied that currencies shouldn't change in price. (Why is there an increase in value in Bitcoins?) The poster didn't question the rapid or large changes in Bitcoin price, but the mere fact that it was changing at all. So you're adding irrelevant details to the topic being discussed: Do currencies change in price? The answer is "yes." All the time.

ILikeDividends

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Re: Is it too late [bitcoin]?
« Reply #265 on: December 07, 2017, 03:15:16 PM »
Why is there an increase in value in Bitcoins? I don't understand why someone would pay 2$ for 1$ (since Bitcoin is an exchange mechanism)

Currencies are constantly increasing/decreasing in value. It's not unique to Bitcoin.

https://www.bloomberg.com/markets/currencies



Yes, but for most currencies a 1% change in a day is a pretty big deal. I know that something costing $10 today will cost roughly $10 tomorrow.

Bitcoin has doubled in the past month. They're not really the same thing.

The post I was responding to implied that currencies shouldn't change in price. (Why is there an increase in value in Bitcoins?) The poster didn't question the rapid or large changes in Bitcoin price, but the mere fact that it was changing at all. So you're adding irrelevant details to the topic being discussed: Do currencies change in price? The answer is "yes." All the time.
A dollar is going to be worth a 100 cents regardless of whether its exchange rate rises or falls against the Euro.  You will only notice that difference if you're trying to buy an asset or commodity (bread, for instance) with USD which is priced in Euros, because you have to then exchange your dollars for Euros at the going rate in order to purchase that bread.

I won't get into a debate about whether gold or bitcoins are currencies.  Regardless of where you stand on that, it is inarguable that both are assets that react to the forces of supply and demand.  And that is why both gold and bitcoins go up or down in price at any given time.  They are both assets that are subject to market forces, priced in whatever currency you happen to be buying or selling them in at the time.

If you want to "spend" a part of your bitcoin on a loaf of bread, you have to sell enough of it to pay for the bread, and pay capital gains tax (if any) first, at the market price, before you can do that.  You could probably spend your bitcoin directly to get access restored to your hacked computer, but I kind of consider that to be an outlier scenario at the moment.
« Last Edit: December 07, 2017, 04:05:33 PM by ILikeDividends »

Aggie1999

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Re: Is it too late [bitcoin]?
« Reply #266 on: December 07, 2017, 03:50:17 PM »
So much for these unhackable cryptos...

http://money.cnn.com/2017/12/07/technology/nicehash-bitcoin-theft-hacking/index.html

And, since by its nature the bitcoins can't be recovered -- they are not subject to government seizure, remember -- nicehash can kiss them goodbye.

In theory the bitcoin protocol itself might be "nearly unhackable" (whatever that means), but in practice it's only a matter of time before a breach could hit you, too....

To those thinking of buying a bitcoin or other crypto, you're money is gone when you buy.  Whether you can cash out later and get any money back is a completely different story.  Just ask all those poor folks who lost their private keys or kept their bitcoins at a hacked exchange.  There is no legal remedy or regulation to resolve these problems, nor is there a large organization with good customer service to "make things right." 

Here is your only remedy if you suffer a problem with bitcoin: Go sh*t in your hat.

For someone who dislikes crypto-currencies so much, you certainly hang around these parts frequently spreading FUD like no one's business.

+1

lifeanon269

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Re: Is it too late [bitcoin]?
« Reply #267 on: December 07, 2017, 03:54:52 PM »
A dollar is going to be worth a 100 cents regardless of whether its exchange rate rises or falls against the Euro. 

A bitcoin is going to be worth 100,000,000 satoshis regardless of whether its exchange rate rises or falls against the dollar.

I hope you realize why that doesn't make sense now, right?

You will only notice that difference if you're trying to buy an asset or commodity (bread, for instance) with USD which is priced in Euros, because you have to then exchange your dollars for Euros at the going rate in order to purchase that bread.

I won't get into a debate about whether gold or bitcoins are currencies.  Regardless of where you stand on that, it is inarguable that both are assets that react to the forces of supply and demand.  And that is why both gold and bitcoins go up or down in price at any given time.  They are both assets that are subject to market forces, priced in whatever currency you happen to be buying or selling them in at the time.

If you want to "spend" a part of your bitcoin on a loaf of bread, you have to sell some if first, at the market price, before you can do that.  You could probably spend your bitcoin directly to get access restored to your hacked computer, but I kind of consider that to be an outlier scenario at this point.

A US dollar does have a value that rises and falls in and of itself regardless of whether or not you're exchanging it for another foreign currency. If you're only looking at the exchange rate between the USD and a EUR, for example, you're only looking at the relativity between the two. So if the USD falls compared to the EUR, some of that difference could be due to the EUR's strength and some of that could be due to the USD's decline.

Meanwhile, back home if part of the drop in the USD compared to the EUR was due to the USD's decline in value, then a loaf of bread will suddenly be more expensive to buy with US dollars. You might not notice it day to day, but you most certainly will over the course of a few years or even decades.

Like thenextguy said, all currencies change in price and that change is noted in its actual value whether you're exchanging it for another currency or for a good at the store.

Volatility will come down with bitcoin as its market matures. Volatility is not a critique against bitcoin, but a critique against the fact that the market is as small as it is. However, price volatility is not a hinderence to its use as a currency or medium of exchange if all goods are still priced in USD or any other fiat currency. The cost in bitcoin can simply be adjusted or calculated at the time of purchase when paying with bitcoin and this can happen automatically with whatever POS system is being used. There's no need to adjust good prices according to the price of a bitcoin. It is however a hinderence to lending which is why you won't see loans pegged to the price of a bitcoin for quite a while. Loans can be issued in bitcoin, but as with goods, their amounts and amortization schedules will be pegged to USD to protect the borrowers and lenders from large increases or decreases over the course of the loan.

ILikeDividends

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Re: Is it too late [bitcoin]?
« Reply #268 on: December 07, 2017, 04:08:30 PM »
A dollar is going to be worth a 100 cents regardless of whether its exchange rate rises or falls against the Euro. 

A bitcoin is going to be worth 100,000,000 satoshis regardless of whether its exchange rate rises or falls against the dollar.

I hope you realize why that doesn't make sense now, right?

Please explain how it doesn't make sense.  I will have 100 cents worth of buying power in the USA regardless of whether the USD rises or falls against the Euro.  Its value or utility doesn't change here regardless of whether it goes up or down against the Euro.

Bitcoin doesn't have an "exchange rate" any more than gold does.  Both have a market price.

I agree that a bitcoin is going to be worth 100,000,000 satoshis regardless of whether its price goes up in dollar terms or not.  Are you saying that your statement doesn't make sense?

I don't realize a capital gain or loss when the dollar's buying power changes due to inflation or deflation.
A fifty year old dollar is still worth a dollar now.  It just has less buying power now.

Your situation with bitcoin is similar, but with one very big difference.  You can't buy much of anything with your bitcoin without first realizing a capital gain or loss by selling it for whatever the market thinks it's worth in current dollars at that time; just like with gold.

If I hide a dollar under my mattress for 10 years, I can still spend it for whatever goods or services it will buy at a later time, without realizing a taxable gain or loss.

You can't even hide a bitcoin under your mattress, but that's neither here nor there.
« Last Edit: December 07, 2017, 04:39:12 PM by ILikeDividends »

dougules

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Re: Is it too late [bitcoin]?
« Reply #269 on: December 07, 2017, 04:35:58 PM »
A dollar is going to be worth a 100 cents regardless of whether its exchange rate rises or falls against the Euro. 

A bitcoin is going to be worth 100,000,000 satoshis regardless of whether its exchange rate rises or falls against the dollar.

I hope you realize why that doesn't make sense now, right?

Please explain how it doesn't make sense.  I will have 100 cents worth of buying power in the USA regardless of whether the USD rises or falls against the Euro.  Its value or utility doesn't change here regardless of whether it goes up or down against the Euro.

Bitcoin doesn't have an "exchange rate" any more than gold does.  Both have a market price.

I agree that a bitcoin is going to be worth 100,000,000 satoshis regardless of whether its price goes up in dollar terms or not.  Are you saying that your statement doesn't make sense?

I don't realize a capital gain or loss when the dollar's value changes due to inflation or deflation.

Your situation with bitcoin is similar, but with one very big difference.  You can't buy much of anything with your bitcoin without first realizing a capital gain or loss by selling it for whatever the market thinks it's worth in current dollars at that time; just like with gold.

If I hide a dollar under my mattress for 10 years, I can still spend it for whatever goods or services it will buy at a later time, without realizing a taxable gain or loss.

You can't even hide a bitcoin under your mattress, but that's neither here nor there.

It is an exchange rate.  Bitcoin is or at least is meant to be a currency.  The idea was that you'd be able to pay for a croissant and coffee with it.  And that's also why holding bitcoin is holding cash. 

ILikeDividends

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Re: Is it too late [bitcoin]?
« Reply #270 on: December 07, 2017, 04:44:15 PM »
A dollar is going to be worth a 100 cents regardless of whether its exchange rate rises or falls against the Euro. 

A bitcoin is going to be worth 100,000,000 satoshis regardless of whether its exchange rate rises or falls against the dollar.

I hope you realize why that doesn't make sense now, right?

Please explain how it doesn't make sense.  I will have 100 cents worth of buying power in the USA regardless of whether the USD rises or falls against the Euro.  Its value or utility doesn't change here regardless of whether it goes up or down against the Euro.

Bitcoin doesn't have an "exchange rate" any more than gold does.  Both have a market price.

I agree that a bitcoin is going to be worth 100,000,000 satoshis regardless of whether its price goes up in dollar terms or not.  Are you saying that your statement doesn't make sense?

I don't realize a capital gain or loss when the dollar's value changes due to inflation or deflation.

Your situation with bitcoin is similar, but with one very big difference.  You can't buy much of anything with your bitcoin without first realizing a capital gain or loss by selling it for whatever the market thinks it's worth in current dollars at that time; just like with gold.

If I hide a dollar under my mattress for 10 years, I can still spend it for whatever goods or services it will buy at a later time, without realizing a taxable gain or loss.

You can't even hide a bitcoin under your mattress, but that's neither here nor there.

It is an exchange rate.  Bitcoin is or at least is meant to be a currency.  The idea was that you'd be able to pay for a croissant and coffee with it.  And that's also why holding bitcoin is holding cash.
I'd love to be a fly on the wall when you try to explain that to the IRS auditor for not reporting your capital gains.

You can conflate market price with exchange rate if you wish to, but that doesn't make it true.

And you can "intend" it to be a currency all you want.  I'm not going to debate that any more than you would debate about whether my intentions could turn a bowl of oatmeal into a currency..
« Last Edit: December 07, 2017, 04:47:39 PM by ILikeDividends »

maizeman

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Re: Is it too late [bitcoin]?
« Reply #271 on: December 07, 2017, 04:46:55 PM »
You can't even hide a bitcoin under your mattress, but that's neither here nor there.

Actually you can if you have a hard copy private key, but that's also neither here nor there. ;-)

Quote
Bitcoin doesn't have an "exchange rate" any more than gold does.  Both have a market price.

I'd argue exchange rate vs market price is a distinction without a difference. The whether you say market price or exchange rate, you need variable numbers of dollars to buy a given amount of euros, RMB, bitcoin, gold, or porkbellies. In all four cases that price is determined by how many people are willing to buy (and at what prices) and how many are willing to sell (and at what prices).

But I remain open to being proven wrong though. How would you define the difference between a market price and an exchange rate (other than that one applies to a currency and one applies to a commodity, because that would just become circular reasoning).

Quote
I don't realize a capital gain or loss when the dollar's value changes due to inflation or deflation. ... If I hide a dollar under my mattress for 10 years, I can still spend it for whatever goods or services it will buy at a later time, without realizing a taxable gain or loss.

That's because you live in the USA where our tax code is denominated in dollars. If you lived in Europe or China where the tax codes use Euros or RMB you would indeed realize taxable gains or losses as the value of a dollar changed. If you hold Euros or RMB in the USA you would indeed incur tax liability as the the market price of these currencies increased (in USD terms). I think these are actually taxed as ordinary income, not capital gains.
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ILikeDividends

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Re: Is it too late [bitcoin]?
« Reply #272 on: December 07, 2017, 05:00:52 PM »
You can't even hide a bitcoin under your mattress, but that's neither here nor there.

Actually you can if you have a hard copy private key, but that's also neither here nor there. ;-)

Quote
Bitcoin doesn't have an "exchange rate" any more than gold does.  Both have a market price.

I'd argue exchange rate vs market price is a distinction without a difference. The whether you say market price or exchange rate, you need variable numbers of dollars to buy a given amount of euros, RMB, bitcoin, gold, or porkbellies. In all four cases that price is determined by how many people are willing to buy (and at what prices) and how many are willing to sell (and at what prices).

But I remain open to being proven wrong though. How would you define the difference between a market price and an exchange rate (other than that one applies to a currency and one applies to a commodity, because that would just become circular reasoning).

Quote
I don't realize a capital gain or loss when the dollar's value changes due to inflation or deflation. ... If I hide a dollar under my mattress for 10 years, I can still spend it for whatever goods or services it will buy at a later time, without realizing a taxable gain or loss.

That's because you live in the USA where our tax code is denominated in dollars. If you lived in Europe or China where the tax codes use Euros or RMB you would indeed realize taxable gains or losses as the value of a dollar changed. If you hold Euros or RMB in the USA you would indeed incur tax liability as the the market price of these currencies increased (in USD terms). I think these are actually taxed as ordinary income, not capital gains.

I said I wasn't going to debate whether bitcoin is a currency, and I'm going to hold to that.

But I think I can convince you of the difference in those terms simply by using the dictionary.

ex∑change rate
noun
noun: exchange rate; plural noun: exchange rates; noun: rate of exchange; plural noun: rates of exchange

    the value of one currency for the purpose of conversion to another.

cur∑ren∑cy
ˈkərənsē/
noun
noun: currency; plural noun: currencies

    1.
    a system of money in general use in a particular country.
    "the dollar was a strong currency"
    synonyms:   money, legal tender, cash, banknotes, bills, notes, coins, coinage, specie
    "foreign currency"
    2.
    the fact or quality of being generally accepted or in use.
    "the term gained currency during the second half of the 20th century"
    synonyms:   prevalence, circulation, exposure; More
    acceptance, popularity
    "a term that has gained new currency"
        the time during which something is in use or operation.

Bitcoin fails the test on both counts.

USD, Euros, and RMB all pass with flying colors.

Now, I'm not saying that bitcoin isn't a currency.  But that doesn't mean that I agree that it's a currency, either.  I'm simply saying that by definition, it doesn't have an exchange rate, while it very clearly does have a market price.

I concede the point about hiding it under a mattress.  Well played. ;)
« Last Edit: December 07, 2017, 05:46:52 PM by ILikeDividends »

Canadian Ben

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Re: Is it too late [bitcoin]?
« Reply #273 on: December 07, 2017, 05:04:21 PM »
The moment it gets accepted (Which is what people are betting on) it will be a currency/method of exchange.... If it ever does.

lifeanon269

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Re: Is it too late [bitcoin]?
« Reply #274 on: December 07, 2017, 05:07:39 PM »
Please explain how it doesn't make sense.  I will have 100 cents worth of buying power in the USA regardless of whether the USD rises or falls against the Euro.  Its value or utility doesn't change here regardless of whether it goes up or down against the Euro.

Bitcoin doesn't have an "exchange rate" any more than gold does.  Both have a market price.

I agree that a bitcoin is going to be worth 100,000,000 satoshis regardless of whether its price goes up in dollar terms or not.  Are you saying that your statement doesn't make sense?

I don't realize a capital gain or loss when the dollar's buying power changes due to inflation or deflation.
A fifty year old dollar is still worth a dollar now.  It just has less buying power now.

Your situation with bitcoin is similar, but with one very big difference.  You can't buy much of anything with your bitcoin without first realizing a capital gain or loss by selling it for whatever the market thinks it's worth in current dollars at that time; just like with gold.

If I hide a dollar under my mattress for 10 years, I can still spend it for whatever goods or services it will buy at a later time, without realizing a taxable gain or loss.

You can't even hide a bitcoin under your mattress, but that's neither here nor there.

Because that's no different than saying that the value of a dollar is a dollar. It isn't necessarily that it doesn't make sense, but just that it is an absurb obviousness that wasn't in question by anyone. A dog will always be a dog too.

Just $1 buys you a bagel today doesn't mean that will always hold true. An exchange rate between two different currencies is only the relativity of those values between the currencies being exchanged.

The fact that bitcoin needs to be exchanged before being spent is irrelevant as to whether it has the capability of being used as a currency. If you take a euro to a US store, you probably won't be able to buy much with it. That doesn't mean that it doesn't have use as a currency at all. It's just that you'll have better success with it in Europe. If you use bitcoin in Japan where merchant adoption is much higher, then you won't find this as being a problem. Considering the fact that bitcoin is a global currency, then it is to be expected that its success as a currency would vary greatly by region.

Being forced to pay taxes on any capital gains or losses on every exchange of bitcoin in the US is definitely a hindrance to its use as a currency (what relevance was this to the discussion?). I do have hope that will change someday in the US. But, that's a local regulatory problem for whatever region you're in. Since bitcoin is global, that's not the case for everyone that goes to use it as currency (why were capital gains brought up?).

The original point that was being discussed however was just simply the fact that currencies go up and down in value and that is not unique to bitcoin alone. I don't know what you're arguing and why there were so many tangents taken here. Excuse me if I jumped all around, but I'm just trying to address each of the various points you brought up.

Looking back at thenextguy's post who you responded to, it looks like you're now in agreement with him (that currencies can change value in their own right). So I guess we all are in agreement. So that's great! Cheers.

ILikeDividends

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Re: Is it too late [bitcoin]?
« Reply #275 on: December 07, 2017, 05:23:34 PM »
Please explain how it doesn't make sense.  I will have 100 cents worth of buying power in the USA regardless of whether the USD rises or falls against the Euro.  Its value or utility doesn't change here regardless of whether it goes up or down against the Euro.

Bitcoin doesn't have an "exchange rate" any more than gold does.  Both have a market price.

I agree that a bitcoin is going to be worth 100,000,000 satoshis regardless of whether its price goes up in dollar terms or not.  Are you saying that your statement doesn't make sense?

I don't realize a capital gain or loss when the dollar's buying power changes due to inflation or deflation.
A fifty year old dollar is still worth a dollar now.  It just has less buying power now.

Your situation with bitcoin is similar, but with one very big difference.  You can't buy much of anything with your bitcoin without first realizing a capital gain or loss by selling it for whatever the market thinks it's worth in current dollars at that time; just like with gold.

If I hide a dollar under my mattress for 10 years, I can still spend it for whatever goods or services it will buy at a later time, without realizing a taxable gain or loss.

You can't even hide a bitcoin under your mattress, but that's neither here nor there.

Because that's no different than saying that the value of a dollar is a dollar. It isn't necessarily that it doesn't make sense, but just that it is an absurb obviousness that wasn't in question by anyone. A dog will always be a dog too.

I'm glad we can agree on that.

Quote

Just $1 buys you a bagel today doesn't mean that will always hold true. An exchange rate between two different currencies is only the relativity of those values between the currencies being exchanged.

The fact that bitcoin needs to be exchanged before being spent is irrelevant as to whether it has the capability of being used as a currency. If you take a euro to a US store, you probably won't be able to buy much with it. That doesn't mean that it doesn't have use as a currency at all. It's just that you'll have better success with it in Europe. If you use bitcoin in Japan where merchant adoption is much higher, then you won't find this as being a problem. Considering the fact that bitcoin is a global currency, then it is to be expected that its success as a currency would vary greatly by region.

I never disputed whether it has the capability of being used as a currency.  Bowls of oatmeal have the capability of being used as currency too.  Something being accepted as a currency has nothing inherently to do with what it is or can do.

Quote

Being forced to pay taxes on any capital gains or losses on every exchange of bitcoin in the US is definitely a hindrance to its use as a currency (what relevance was this to the discussion?). I do have hope that will change someday in the US. But, that's a local regulatory problem for whatever region you're in. Since bitcoin is global, that's not the case for everyone that goes to use it as currency (why were capital gains brought up?).

If it did not elucidate anything for you, you should feel free to ignore it.

Quote
The original point that was being discussed however was just simply the fact that currencies go up and down in value and that is not unique to bitcoin alone. I don't know what you're arguing and why there were so many tangents taken here. Excuse me if I jumped all around, but I'm just trying to address each of the various points you brought up.

Looking back at thenextguy's post who you responded to, it looks like you're now in agreement with him (that currencies can change value in their own right). So I guess we all are in agreement. So that's great! Cheers.
Yes, I too think it's good that we can agree on stuff we never disagreed about. 
« Last Edit: December 07, 2017, 05:31:19 PM by ILikeDividends »

maizeman

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Re: Is it too late [bitcoin]?
« Reply #276 on: December 07, 2017, 05:51:58 PM »
Quote
I'd argue exchange rate vs market price is a distinction without a difference. The whether you say market price or exchange rate, you need variable numbers of dollars to buy a given amount of euros, RMB, bitcoin, gold, or porkbellies. In all four cases that price is determined by how many people are willing to buy (and at what prices) and how many are willing to sell (and at what prices).

But I remain open to being proven wrong though. How would you define the difference between a market price and an exchange rate (other than that one applies to a currency and one applies to a commodity, because that would just become circular reasoning).

I said I wasn't going to debate whether bitcoin is a currency, and I'm going to hold to that.

But I think I can convince you of the difference in those terms simply by using the dictionary.

ex∑change rate
noun
noun: exchange rate; plural noun: exchange rates; noun: rate of exchange; plural noun: rates of exchange

    the value of one currency for the purpose of conversion to another.

cur∑ren∑cy
ˈkərənsē/
noun
noun: currency; plural noun: currencies

    1.
    a system of money in general use in a particular country.
    "the dollar was a strong currency"
    synonyms:   money, legal tender, cash, banknotes, bills, notes, coins, coinage, specie
    "foreign currency"
    2.
    the fact or quality of being generally accepted or in use.
    "the term gained currency during the second half of the 20th century"
    synonyms:   prevalence, circulation, exposure; More
    acceptance, popularity
    "a term that has gained new currency"
        the time during which something is in use or operation.

Bitcoin fails the test on both counts.

USD, Euros, and RMB all pass with flying colors.

Now, I'm not saying that bitcoin isn't a currency.  But that doesn't mean that I agree that it's a currency, either.  I'm simply saying that by definition, it doesn't have an exchange rate, while it very clearly does have a market price.

I concede the point about hiding it under a mattress.  Well played. ;)

If I follow the reasoning from your two definitions, your argument is:

(A) the difference between an exchange rate and a market price is that an exchange rate is defined as the rate at which two currencies can be converted from one to the other, and a market price is is the rate at which one currency and one commodity can be converted from one to the other
(B) if bitcoin is not a currency, USD and bitcoin, by definition, cannot have an exchange rate.

I don't actually disagree with either A or B. But I will say that the logically consequence of accepting those two statements is that stating "[I think] Bitcoin doesn't have an "exchange rate" any more than gold does.  Both have a market price." is simply another way of restating "[I think] Bitcoin is not a currency."

Which is a perfectly reasonably view to hold. But saying bitcoin has a market price rather than an exchange rate is not a form of evidence that bitcoin isn't a currency, it's a somewhat less direct way of informing the reader that your view is that bitcoin is not a currency.
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ILikeDividends

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Re: Is it too late [bitcoin]?
« Reply #277 on: December 07, 2017, 05:55:59 PM »
Quote
I'd argue exchange rate vs market price is a distinction without a difference. The whether you say market price or exchange rate, you need variable numbers of dollars to buy a given amount of euros, RMB, bitcoin, gold, or porkbellies. In all four cases that price is determined by how many people are willing to buy (and at what prices) and how many are willing to sell (and at what prices).

But I remain open to being proven wrong though. How would you define the difference between a market price and an exchange rate (other than that one applies to a currency and one applies to a commodity, because that would just become circular reasoning).

I said I wasn't going to debate whether bitcoin is a currency, and I'm going to hold to that.

But I think I can convince you of the difference in those terms simply by using the dictionary.

ex∑change rate
noun
noun: exchange rate; plural noun: exchange rates; noun: rate of exchange; plural noun: rates of exchange

    the value of one currency for the purpose of conversion to another.

cur∑ren∑cy
ˈkərənsē/
noun
noun: currency; plural noun: currencies

    1.
    a system of money in general use in a particular country.
    "the dollar was a strong currency"
    synonyms:   money, legal tender, cash, banknotes, bills, notes, coins, coinage, specie
    "foreign currency"
    2.
    the fact or quality of being generally accepted or in use.
    "the term gained currency during the second half of the 20th century"
    synonyms:   prevalence, circulation, exposure; More
    acceptance, popularity
    "a term that has gained new currency"
        the time during which something is in use or operation.

Bitcoin fails the test on both counts.

USD, Euros, and RMB all pass with flying colors.

Now, I'm not saying that bitcoin isn't a currency.  But that doesn't mean that I agree that it's a currency, either.  I'm simply saying that by definition, it doesn't have an exchange rate, while it very clearly does have a market price.

I concede the point about hiding it under a mattress.  Well played. ;)

If I follow the reasoning from your two definitions, your argument is:

(A) the difference between an exchange rate and a market price is that an exchange rate is defined as the rate at which two currencies can be converted from one to the other, and a market price is is the rate at which one currency and one commodity can be converted from one to the other
(B) if bitcoin is not a currency, USD and bitcoin, by definition, cannot have an exchange rate.

I don't actually disagree with either A or B. But I will say that the logically consequence of accepting those two statements is that stating "[I think] Bitcoin doesn't have an "exchange rate" any more than gold does.  Both have a market price." is simply another way of restating "[I think] Bitcoin is not a currency."

Which is a perfectly reasonably view to hold. But saying bitcoin has a market price rather than an exchange rate is not a form of evidence that bitcoin isn't a currency, it's a somewhat less direct way of informing the reader that your view is that bitcoin is not a currency.

I'll repeat (since you probably didn't see my edit) that I'm merely stating what should be an obvious fact, that by definition, bitcoin doesn't have an exchange rate.  I don't need to agree or disagree with that in order to cite definitions from the dictionary, or use words properly from the dictionary in a sentence.

While you probably can deduce what my real opinion is, I don't need or want to join in on a debate that I don't  personally think has any merit in being argued.  The distinction between exchange rate and market price should be self-evident to anyone who wants to use those terms.

When I correspond with other people, I make every effort to choose words having semantics that don't need to be debated.
« Last Edit: December 07, 2017, 06:11:11 PM by ILikeDividends »

maizeman

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Re: Is it too late [bitcoin]?
« Reply #278 on: December 07, 2017, 06:12:41 PM »
You're certainly welcome to state that bitcoin does not satisfy your own definition of the word currency. But I still don't see what the exchange rate/market price distinction adds to the discussion other than being a more complicated way of indicating the same view about whether bitcoin is or isn't a currency.

The reason I think you're trying to back away from that debate is that the same word will have different meanings to different people, and be defined differently in different dictionaries. For example, I'm not sure where you found you set of dictionary definitions. I looked currency up on dictionary.com (http://www.dictionary.com/browse/currency) and this is what I found there.

Quote
currency
[kur-uh n-see, kuhr-]

noun, plural currencies.
1. something that is used as a medium of exchange; money.
2. general acceptance; prevalence; vogue.
3. a time or period during which something is widely accepted and circulated.

So I'm happy to put aside the debate about whether bitcoin is or is not a currency. Arguing with people about the meanings of word (rather than the concepts behind those words) isn't particularly satisfying. My point is simply that once we do put the currency/not-currency debate aside, there is no remaining distinction between the idea represented by the words "exchange rate" and the idea represented by the words "market price."
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lifeanon269

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Re: Is it too late [bitcoin]?
« Reply #279 on: December 07, 2017, 06:34:26 PM »
A dollar is going to be worth a 100 cents regardless of whether its exchange rate rises or falls against the Euro.  You will only notice that difference if you're trying to buy an asset or commodity (bread, for instance) with USD which is priced in Euros, because you have to then exchange your dollars for Euros at the going rate in order to purchase that bread.

I won't get into a debate about whether gold or bitcoins are currencies.  Regardless of where you stand on that, it is inarguable that both are assets that react to the forces of supply and demand.  And that is why both gold and bitcoins go up or down in price at any given time.  They are both assets that are subject to market forces, priced in whatever currency you happen to be buying or selling them in at the time.

If you want to "spend" a part of your bitcoin on a loaf of bread, you have to sell enough of it to pay for the bread, and pay capital gains tax (if any) first, at the market price, before you can do that.  You could probably spend your bitcoin directly to get access restored to your hacked computer, but I kind of consider that to be an outlier scenario at the moment.

It seems like either ILikeDividends is in the mood to argue semantics or I'm just having a hard time understanding the point trying to be made and how we got to discussing what is being discussed. This was your original post that started the discussion in Reply #265. If your 6 posts were to simply say that you don't think that Bitcoin is a currency (which is a very roundabout way of doing so), why not be forthright and just say that and discuss that as opposed to arguing semantics about something completely unrelated?

For the sake of being even more forthright, since this was your original post and it seems like all 6 of your posts were simply an attempt to explain why bitcoin is not a currency, then can you answer this question? Given your above quoted reply, if Bitcoin were being used widely to be spent directly on goods (just like in your outlier scenario above), then wouldn't that qualify bitcoin as a currency to you? I'm not sure how you could answer 'no' to that without leading to some irrationality at somepoint along the way.

I say this because in Japan you can easily use Bitcoin as a currency to purchase goods directly in many local shops and it is recognized as legal tender there. So if Bitcoin is recognized as a currency in at least one nation, then wouldn't that classify it as currency? Most national fiat currencies are only recognized as legal tender in their respective nation, that doesn't disqualify their classification as being recognized as currencies regardless of your origin.

I know you said that you didn't want to debate that, but it seems like after 6 posts of strange circular replies from you, you've been doing that all along anyway.

ILikeDividends

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Re: Is it too late [bitcoin]?
« Reply #280 on: December 07, 2017, 06:47:41 PM »
You're certainly welcome to state that bitcoin does not satisfy your own definition of the word currency. But I still don't see what the exchange rate/market price distinction adds to the discussion other than being a more complicated way of indicating the same view about whether bitcoin is or isn't a currency.

The reason I think you're trying to back away from that debate is that the same word will have different meanings to different people, and be defined differently in different dictionaries. For example, I'm not sure where you found you set of dictionary definitions. I looked currency up on dictionary.com (http://www.dictionary.com/browse/currency) and this is what I found there.

Quote
currency
[kur-uh n-see, kuhr-]

noun, plural currencies.
1. something that is used as a medium of exchange; money.
2. general acceptance; prevalence; vogue.
3. a time or period during which something is widely accepted and circulated.

So I'm happy to put aside the debate about whether bitcoin is or is not a currency. Arguing with people about the meanings of word (rather than the concepts behind those words) isn't particularly satisfying. My point is simply that once we do put the currency/not-currency debate aside, there is no remaining distinction between the idea represented by the words "exchange rate" and the idea represented by the words "market price."

I actually have already stated my opinion about whether bitcoin is a currency upthread.  I'm not actually trying to hide my opinion.  I just don't want to engage in a debate over it.

If I mistakenly saw other nuances to the question asked by the post I responded to, which weren't actually valid, it wouldn't be the first time I've committed such an offense.  I apologize to any who were offended, without reservation.

However, there is no debate to back away from.  Hey, I'm ok using the dictionary of your choice.  If your argument is founded on that first definition, then bitcoin fails that, too.

Your dictionary defines medium of exchange as follows:
noun
1. anything generally accepted as representing a standard of value and exchangeable for goods or services.

Again, we weren't having a debate about whether bitcoin is a currency; at least I wasn't.  But that doesn't mean I'm willing to dismiss the meaning of words, and make up new unconventional semantics that other people won't understand, either, and then use them in correspondence.

« Last Edit: December 07, 2017, 07:05:52 PM by ILikeDividends »

ILikeDividends

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Re: Is it too late [bitcoin]?
« Reply #281 on: December 07, 2017, 06:53:02 PM »
A dollar is going to be worth a 100 cents regardless of whether its exchange rate rises or falls against the Euro.  You will only notice that difference if you're trying to buy an asset or commodity (bread, for instance) with USD which is priced in Euros, because you have to then exchange your dollars for Euros at the going rate in order to purchase that bread.

I won't get into a debate about whether gold or bitcoins are currencies.  Regardless of where you stand on that, it is inarguable that both are assets that react to the forces of supply and demand.  And that is why both gold and bitcoins go up or down in price at any given time.  They are both assets that are subject to market forces, priced in whatever currency you happen to be buying or selling them in at the time.

If you want to "spend" a part of your bitcoin on a loaf of bread, you have to sell enough of it to pay for the bread, and pay capital gains tax (if any) first, at the market price, before you can do that.  You could probably spend your bitcoin directly to get access restored to your hacked computer, but I kind of consider that to be an outlier scenario at the moment.

It seems like either ILikeDividends is in the mood to argue semantics or I'm just having a hard time understanding the point trying to be made and how we got to discussing what is being discussed. This was your original post that started the discussion in Reply #265. If your 6 posts were to simply say that you don't think that Bitcoin is a currency (which is a very roundabout way of doing so), why not be forthright and just say that and discuss that as opposed to arguing semantics about something completely unrelated?

For the sake of being even more forthright, since this was your original post and it seems like all 6 of your posts were simply an attempt to explain why bitcoin is not a currency, then can you answer this question? Given your above quoted reply, if Bitcoin were being used widely to be spent directly on goods (just like in your outlier scenario above), then wouldn't that qualify bitcoin as a currency to you? I'm not sure how you could answer 'no' to that without leading to some irrationality at somepoint along the way.

As I've stated numerous times, I'm not going to be drawn into a debate that has no merit.  I would derive no satisfaction in convincing you one way or another on whether bitcoin is a currency or not.

That would be akin to engaging in a religious debate with you.  That would also be a complete waste of time.

Quote
I say this because in Japan you can easily use Bitcoin as a currency to purchase goods directly in many local shops and it is recognized as legal tender there. So if Bitcoin is recognized as a currency in at least one nation, then wouldn't that classify it as currency? Most national fiat currencies are only recognized as legal tender in their respective nation, that doesn't disqualify their classification as being recognized as currencies regardless of your origin.

I know you said that you didn't want to debate that, but it seems like after 6 posts of strange circular replies from you, you've been doing that all along anyway.
You have an uncanny knack for seeing arguments where there are none.  I'm not arguing semantics, I'm simply showing them to you without opining one way or another.

If you want to argue against either of those dictionary's definitions, then have at it.  I won't join in that debate either.

If you want to continue redefining words with your own "secret" meaning, have fun with that, too.  Just don't be too shocked if nobody has a clue what you're talking about.
« Last Edit: December 07, 2017, 07:09:59 PM by ILikeDividends »

maizeman

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Re: Is it too late [bitcoin]?
« Reply #282 on: December 07, 2017, 07:09:30 PM »
In my original post I stated that, unless one is debating whether something is or isn't a currency, I was aware of no other difference between an exchange rate and a market price.

After several rounds of discussion back and forth with you, I remain unaware of any other differences between an exchange rate and a market price.

But that doesn't mean I'm willing to dismiss the meaning of words, and make up new unconventional semantics that other people won't understand, either, and then use them in correspondence.

Please point to the post where I proposed unconventional semantics?
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ILikeDividends

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Re: Is it too late [bitcoin]?
« Reply #283 on: December 07, 2017, 07:17:04 PM »
In my original post I stated that, unless one is debating whether something is or isn't a currency, I was aware of no other difference between an exchange rate and a market price.

The difference between exchange rate and market price does not depend on whether we are debating anything, or on whether you are aware of that difference.

Quote
After several rounds of discussion back and forth with you, I remain unaware of any other differences between an exchange rate and a market price.

But that doesn't mean I'm willing to dismiss the meaning of words, and make up new unconventional semantics that other people won't understand, either, and then use them in correspondence.

Please point to the post where I proposed unconventional semantics?
That was an assumption on my part.  As far as I know, you have not explicitly redefined the meaning of the term, "currency."  However, if my assumption was incorrect, then I can't for the life of me figure out why we keep going around and around on this.

This is getting interesting now.  Are you now offering an opinion that bitcoin is not a currency?  Just curious.  Personally, I don't care one way or another.

If you do think it's a currency, then I don't need a quote from you to justify my assumption that you don't agree with the conventional semantics.

You can prove my assumption correct or incorrect in your next post, if you care to.  I won't try to change your mind in either case.
« Last Edit: December 08, 2017, 09:47:21 AM by ILikeDividends »

lifeanon269

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Re: Is it too late [bitcoin]?
« Reply #284 on: December 07, 2017, 07:29:01 PM »
As I've stated numerous times, I'm not going to be drawn into a debate that has no merit.  I would derive no satisfaction in convincing you one way or another on whether bitcoin is a currency or not.

That would be akin to engaging in a religious debate with you.  That would also be a complete waste of time.

Likewise, but then I find it puzzling that you just spent 7 posts having that very exact debate in an extremely indirect way. For someone who is against wasting time, I find it even more odd considering the fact that yours was the post that originally even brought up the question as the whether or not bitcoin was a currency or not (no one else here was putting that into question at all).

Quote
You have an uncanny knack for seeing arguments where there are none.  I'm not arguing semantics, I'm simply showing them to you without opining one way or another.

Actually I'm just baffled at trying to understand the difference between that...

Quote
If you want to continue redefining words with your own "secret" meaning, have fun with that, too.  Just don't be too shocked if nobody has a clue what you're talking about.

I wasn't defining any words at all in any of my posts. Care to quote me where I defined any words with secret meaning?

ILikeDividends

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Re: Is it too late [bitcoin]?
« Reply #285 on: December 07, 2017, 07:31:07 PM »
As I've stated numerous times, I'm not going to be drawn into a debate that has no merit.  I would derive no satisfaction in convincing you one way or another on whether bitcoin is a currency or not.

That would be akin to engaging in a religious debate with you.  That would also be a complete waste of time.

Likewise, but then I find it puzzling that you just spent 7 posts having that very exact debate in an extremely indirect way. For someone who is against wasting time, I find it even more on considering the fact that yours was the post that originally even brought up the question as the whether or not bitcoin was a currency or not (no one else here was putting that into question at all).

I don't consider having fun a waste of time.  I find the intensity of your apparent desperation to draw me into a debate that will never occur fascinating and thoroughly entertaining.

Quote
Quote
You have an uncanny knack for seeing arguments where there are none.  I'm not arguing semantics, I'm simply showing them to you without opining one way or another.

Actually I'm just baffled at trying to understand the difference between that...

Acknowledged.

Quote
Quote
If you want to continue redefining words with your own "secret" meaning, have fun with that, too.  Just don't be too shocked if nobody has a clue what you're talking about.

I wasn't defining any words at all in any of my posts. Care to quote me where I defined any words with secret meaning?

If you'll scroll up one post, I think my last reply should pretty much apply to your question as well.  And the invitation to resolve the question is extended to you, too.
« Last Edit: December 07, 2017, 07:52:11 PM by ILikeDividends »

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Re: Is it too late [bitcoin]?
« Reply #286 on: December 07, 2017, 07:39:18 PM »
So much for these unhackable cryptos...

http://money.cnn.com/2017/12/07/technology/nicehash-bitcoin-theft-hacking/index.html

And, since by its nature the bitcoins can't be recovered -- they are not subject to government seizure, remember -- nicehash can kiss them goodbye.

In theory the bitcoin protocol itself might be "nearly unhackable" (whatever that means), but in practice it's only a matter of time before a breach could hit you, too....

To those thinking of buying a bitcoin or other crypto, you're money is gone when you buy.  Whether you can cash out later and get any money back is a completely different story.  Just ask all those poor folks who lost their private keys or kept their bitcoins at a hacked exchange.  There is no legal remedy or regulation to resolve these problems, nor is there a large organization with good customer service to "make things right." 

Here is your only remedy if you suffer a problem with bitcoin: Go sh*t in your hat.

For someone who dislikes crypto-currencies so much, you certainly hang around these parts frequently spreading FUD like no one's business.

Thats it????  That's your rebuttal??

I guess there wasn't much you disagreed with then...


And yeah, this is a forum for people who are seeking financial independence, not a crypto fan-club.  So, assuming the mods will still have me, I'll continue to giving advice I think will help advance people towards the goal of FI.  This includes not speculating on cryptos.  I do weigh in on other topics as well. Sometimes I agree with the consensus, sometimes not.

You know, for being on a financial independence forum, you certainly spend a lot of time hanging around these parts talking nothing but cryptos.

maizeman

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Re: Is it too late [bitcoin]?
« Reply #287 on: December 07, 2017, 07:45:13 PM »
In my original post I stated that, unless one is debating whether something is or isn't a currency, I was aware of no other difference between an exchange rate and a market price.

The difference between exchange rate and market price does not depend on whether we are debating anything, or on whether you are aware of that difference.

You are correct that there could still be another difference in the ideas represented by these terms which I'm unaware of. But since you've yet to propose any additional differences we are left with three possibilities:

1) there are no additional differences between the two terms
2) there is some additional technical difference neither of us aware of (but there is no functional difference between this and #1 for the purposes of our discussion)
3) there is a difference you're aware of, that I'm not aware of, and for some reason you don't want to state what it is (which seems unlikely but if so would make further discussion with you seem particularly fruitless).

But that doesn't mean I'm willing to dismiss the meaning of words, and make up new unconventional semantics that other people won't understand, either, and then use them in correspondence.

Please point to the post where I proposed unconventional semantics?
That was an assumption on my part.  As far as I know, you have not explicitly redefined the meaning of the term, "currency."  However, if my assumption was incorrect, then I can't for the life of figure out why we keep going around and around on this.

This is getting interesting now.  Are you now offering an opinion that bitcoin is not a currency?  Just curious.  Personally, I don't care one way or another.

If you do think it's a currency, then my assumption doesn't need a quote from you to justify my assumption that you don't agree with the conventional semantics.

I've found the best way to avoid debates I'm not interested in (and I'm really not interested in having this debate, with either side) is to genuinely not have a position, rather than stating or implying "I believe X, but I don't want to discuss or debate it."

All I'm trying to get across at this point* is that -- unless option #3 above is correct -- a discussion of whether bitcoin has an exchange rate with the US dollar or a market price in US dollars is the exact same discussion as whether bitcoin is or isn't a currency. There's no additional information content.

*Originally I was trying to figure out if you were trying to convey some additional idea with the exchange rate vs. market price distinction.
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ILikeDividends

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Re: Is it too late [bitcoin]?
« Reply #288 on: December 07, 2017, 07:57:35 PM »
In my original post I stated that, unless one is debating whether something is or isn't a currency, I was aware of no other difference between an exchange rate and a market price.

The difference between exchange rate and market price does not depend on whether we are debating anything, or on whether you are aware of that difference.

You are correct that there could still be another difference in the ideas represented by these terms which I'm unaware of. But since you've yet to propose any additional differences we are left with three possibilities:

1) there are no additional differences between the two terms
2) there is some additional technical difference neither of us aware of (but there is no functional difference between this and #1 for the purposes of our discussion)
3) there is a difference you're aware of, that I'm not aware of, and for some reason you don't want to state what it is (which seems unlikely but if so would make further discussion with you seem particularly fruitless).


But that doesn't mean I'm willing to dismiss the meaning of words, and make up new unconventional semantics that other people won't understand, either, and then use them in correspondence.

Please point to the post where I proposed unconventional semantics?
That was an assumption on my part.  As far as I know, you have not explicitly redefined the meaning of the term, "currency."  However, if my assumption was incorrect, then I can't for the life of figure out why we keep going around and around on this.

This is getting interesting now.  Are you now offering an opinion that bitcoin is not a currency?  Just curious.  Personally, I don't care one way or another.

If you do think it's a currency, then my assumption doesn't need a quote from you to justify my assumption that you don't agree with the conventional semantics.

I've found the best way to avoid debates I'm not interested in (and I'm really not interested in having this debate, with either side) is to genuinely not have a position, rather than stating or implying "I believe X, but I don't want to discuss or debate it."

All I'm trying to get across at this point* is that -- unless option #3 above is correct -- a discussion of whether bitcoin has an exchange rate with the US dollar or a market price in US dollars is the exact same discussion as whether bitcoin is or isn't a currency. There's no additional information content.

*Originally I was trying to figure out if you were trying to convey some additional idea with the exchange rate vs. market price distinction.
This isn't a multiple choice question.  The only thing I ever asserted, apart from actually using that term properly in a sentence, is that, by definition, bitcoin doesn't have an exchange rate.

If you don't agree with that, then I propose that we agree to disagree.

You can agree, disagree, agree to disagree, continue posting, or withdraw.  Those are really the only multiple choices available.

It seems that the only thing we are debating is whether we are actually having a debate or not about bitcoin as a currency.  And I'm quite happy to debate that.  I never said I wouldn't debate anything.  I just said I wouldn't debate whether bitcoin is a currency or not.  And I won't.
« Last Edit: December 07, 2017, 08:10:15 PM by ILikeDividends »

maizeman

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Re: Is it too late [bitcoin]?
« Reply #289 on: December 07, 2017, 08:14:05 PM »
So in summation, after rounds and rounds of discussion in response to the very simple question "How would you define the difference between a market price and an exchange rate (other than that one applies to a currency and one applies to a commodity)?" the answer is there are no other differences between the two terms you would care to name.

You really could have saved us both a lot of time (and everyone else following this thread a lot of extremely boring posts) if you'd just said that at the beginning.
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ILikeDividends

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Re: Is it too late [bitcoin]?
« Reply #290 on: December 07, 2017, 08:35:22 PM »
So in summation, after rounds and rounds of discussion in response to the very simple question "How would you define the difference between a market price and an exchange rate (other than that one applies to a currency and one applies to a commodity)?" the answer is there are no other differences between the two terms you would care to name.

You really could have saved us both a lot of time (and everyone else following this thread a lot of extremely boring posts) if you'd just said that at the beginning.

You said flatly, without qualification, that you'd argue there was no distinguishable difference between the two terms.

I'd argue exchange rate vs market price is a distinction without a difference.

Then you said this:

Quote
But I remain open to being proven wrong though. How would you define the difference between a market price and an exchange rate (other than that one applies to a currency and one applies to a commodity, because that would just become circular reasoning).
I proved you wrong on my very first reply, and then you were the one who flooded the thread with redundant posts after that.

I didn't agree (or fully even understand) how currency vs commodity amounts to circular reasoning, but I didn't want to debate that point.  That point was neither resolved or conceded without comment from me; i.e., we never debated it.  I merely withdrew from that point.

Based on your articulation of the point you said you were willing to argue, it quite understandably wasn't obvious that your acceptable proof was contingent on anything more than what you said you'd argue for.
« Last Edit: December 07, 2017, 09:22:22 PM by ILikeDividends »

waltworks

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Re: Is it too late [bitcoin]?
« Reply #291 on: December 07, 2017, 08:56:25 PM »
Indeed, this is a dumb argument.

I am more interested in the conundrum that something that had the promise to make money flow more easily and cheaply between normal people has been hijacked by nutty speculators such that it's practically useless for it's intended (ok, who knows what the intent really was, but still) purpose. The coming (who knows when) crash will give the whole industry a black eye and probably tie us to the stupid credit card processors and their vampire fees for another decade.

-W

maizeman

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Re: Is it too late [bitcoin]?
« Reply #292 on: December 07, 2017, 09:36:05 PM »
New summary: you are not interested in answering my original question: "How would you define the difference between a market price and an exchange rate (other than that one applies to a currency and one applies to a commodity)?" and apparently have been trying to have an unrelated argument.

I don't know how I could have been clearer about the question I was asking than I was in my original post. However, it's clear you feel very strongly about whatever separate discussion you've been having the whole time.

I apologize for taking so long to realize we have been apparently been having completely unrelated conversations, thank you for clarifying.

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ILikeDividends

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Re: Is it too late [bitcoin]?
« Reply #293 on: December 07, 2017, 10:03:38 PM »
New summary: you are not interested in answering my original question: "How would you define the difference between a market price and an exchange rate (other than that one applies to a currency and one applies to a commodity)?" and apparently have been trying to have an unrelated argument.

I don't know how I could have been clearer about the question I was asking than I was in my original post. However, it's clear you feel very strongly about whatever separate discussion you've been having the whole time.

I apologize for taking so long to realize we have been apparently been having completely unrelated conversations, thank you for clarifying.



I am literally thrilled to finally find some common ground with you on this.  If the distinction between currency versus commodity is deemed irrelevant, then the distinction between exchange rate and market price is equally meaningless.

I propose we jointly declare this debate resolved.
« Last Edit: December 07, 2017, 10:09:55 PM by ILikeDividends »

maizeman

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Re: Is it too late [bitcoin]?
« Reply #294 on: December 07, 2017, 10:07:51 PM »
I am literally thrilled to finally find some common ground with you on this.  If the distinction between currency versus commodity is deemed irrelevant, then the distinction between exchange rate and market price is equally meaningless.

I propose we declare this debate resolved.

Exactly! Yes, if we can agree on that point then we are, in fact, in agreement.
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ILikeDividends

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Re: Is it too late [bitcoin]?
« Reply #295 on: December 07, 2017, 10:11:53 PM »
I am literally thrilled to finally find some common ground with you on this.  If the distinction between currency versus commodity is deemed irrelevant, then the distinction between exchange rate and market price is equally meaningless.

I propose we declare this debate resolved.

Exactly! Yes, if we can agree on that point then we are, in fact, in agreement.

<Gavel slams with a loud whack.>  The resolution is adopted.
« Last Edit: December 08, 2017, 07:36:51 AM by ILikeDividends »

lifeanon269

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Re: Is it too late [bitcoin]?
« Reply #296 on: December 08, 2017, 08:03:06 AM »
Thats it????  That's your rebuttal??

I guess there wasn't much you disagreed with then...


And yeah, this is a forum for people who are seeking financial independence, not a crypto fan-club.  So, assuming the mods will still have me, I'll continue to giving advice I think will help advance people towards the goal of FI.  This includes not speculating on cryptos.  I do weigh in on other topics as well. Sometimes I agree with the consensus, sometimes not.

You know, for being on a financial independence forum, you certainly spend a lot of time hanging around these parts talking nothing but cryptos.

That was my rebuttal because that has already be discussed with you and it has been explained several times here and in the other Bitcoin threads which you were a part of why Bitcoin's blockchain is so secure.

You even had a post you created yourself here where you questioned this very topic of security with a clear misunderstand of how it all works:

https://forum.mrmoneymustache.com/investor-alley/things-i-don't-understand-about-bitcoin/

Here you said:

"3.) It's secure... But for how long?  Taking into account the ever increasing computing power, at what point will it be simple to brute-force into bitcoin wallets.  The blockchain is a public ledger so I assume someone could download the whole thing and set a stable of computers against determining the private key for high value bitcoin wallets until they are cracked.  With the exponential advance of computing power, i.e. Moore's Law, how far away are we really?"

In another post, you said:

"I believe that the block-chain is growing exponentially such that at a certain point the power/energy required to continue to validate the blocks in the block chain will be impossibly large.  At that point the network will collapse under its own weight and no new transactions will be validated."

It seems like you have a misunderstanding on how the blockchain works and why it is so secure. As someone who works in Information Security, I will take to time to explain a few things for you.

Bitcoin's security comes from several specific areas and I'll list out the three of the most important ones:

1) Decentralization: Bitcoin's main security protection comes from the fact that it is a decentralized network. There are currently tens of thousands of bitcoin nodes around the world that each store their own copy of the entire blockchain and that validate and propagate blocks across the network to ensure they are valid blocks that meet all the rules of the network. This makes it theoretically impossible to hack the entire network. If there were a remote code execution vulnerability in the bitcoin core software, you'd be able to compromise and run code on that individual node itself, but the blockchain is public information, so there is no confidential data to steal. You could compromise the keys that are stored on that individual's node and potential steal bitcoin from one user, but that isn't a compromise that threatens the entire network. Contrast this to traditional centralized institutions that store massive amounts of confidential consumer information. Many of the data breaches that take place go unnoticed for months or even years, meanwhile millions of dollars are lost due to unauthorized transaction fraud because of these breaches. These damages are completely lost and unrecoverable, not unlike lost bitcoin are today. Most large companies that handle payment information now have cyber-security insurance to help pay for damages in the event of a breach to protect the consumers. This same protection can be applied to centralized bitcoin organizations. Insurance payouts can be used to return the stolen amounts of bitcoin back to consumers that lost it for those people that had bitcoin stored with centralized institutions. Breaches against central authorities that result in financial loss for consumers is not a critique against bitcoin, it is a critique against centralization. However, the Bitcoin network has a solution for this. It allows for users to take security into their own hands by giving them the power to own their private keys. This eliminates the central single point of failure inherent in our institutions today and makes it much more difficult for attackers to steal large amounts of funds from massive stockpiles of information.


2) Proof-of-work: Proof of work is what is used to include transactions onto the blockchain so that they're immutable and permanently stored as part of the transaction history for the public ledger. SHA256 is a hashing algorithm. Hashing algorithms are considered one-way encryption. That means that there is data loss involved in the process and the output can never be transformed back to the input that created it. That means the only viable method of retrieving the input from the output is to simply brute-force all possible combinations. For a primer on how secure 256-bit hashing is, here is a good video to watch:

https://www.youtube.com/watch?v=S9JGmA5_unY

Also, here is a snippet of text regarding the thermodynamics required of today's computing technology in order to break 256-bit security:

"We cannot even imagine a world where 256-bit brute force searches are possible. It requires some fundamental breakthroughs in physics and our understanding of the universe.

One of the consequences of the second law of thermodynamics is that a certain amount of energy is necessary to represent information. To record a single bit by changing the state of a system requires an amount of energy no less than kT, where T is the absolute temperature of the system and k is the Boltzman constant. (Stick with me; the physics lesson is almost over.)

Given that k = 1.38 ◊ 10−16 erg/K, and that the ambient temperature of the universe is 3.2 Kelvin, an ideal computer running at 3.2 K would consume 4.4 ◊ 10−16 ergs every time it set or cleared a bit. To run a computer any colder than the cosmic background radiation would require extra energy to run a heat pump.

Now, the annual energy output of our sun is about 1.21 ◊ 1041 ergs. This is enough to power about 2.7 ◊ 1056 single bit changes on our ideal computer; enough state changes to put a 187-bit counter through all its values. If we built a Dyson sphere around the sun and captured all its energy for 32 years, without any loss, we could power a computer to count up to 2192. Of course, it wouldn't have the energy left over to perform any useful calculations with this counter.

But that's just one star, and a measly one at that. A typical supernova releases something like 1051 ergs. (About a hundred times as much energy would be released in the form of neutrinos, but let them go for now.) If all of this energy could be channeled into a single orgy of computation, a 219-bit counter could be cycled through all of its states.

These numbers have nothing to do with the technology of the devices; they are the maximums that thermodynamics will allow. And they strongly imply that brute-force attacks against 256-bit keys will be infeasible until computers are built from something other than matter and occupy something other than space."



Another unique property to hashing is that every unique input has a completely unique output. Currently, there are no known collisions for the SHA256 algorithm that bitcoin uses. This means that for all the infinite possible inputs, we have currently not found any two inputs that yield the same output. This is critical for the next security feature. For each new block that is added to the blockchain, the hash of the previous block is included and hashed into the new block. This is what creates the immutable blockchain. This means that if any prior block were to be altered, the entire proof of work that went into all blocks there afterward would need to be rehashed in order for the blockchain to stay valid.

Currently, the bitcoin network consists of the most computing power in any one single network in the world. There is more computing power on the bitcoin network that the total of the world's 600 top supercomputers combined. This is an immense amount of computing power that provides bitcoin its security and is completely unique to bitcoin's blockchain. I am not sure exactly the current number as it is constantly changing, but in order for the entire bitcoin blockchain to be reworked, the current bitcoin network would need to calculate for something like 200 days straight. This means that for any other entity that wanted to alter the transaction history of the bitcoin blockchain, not only would you need to have more computing power than the rest of the bitcoin network, but you'd need to put it to work for a very long time which would quickly become cost prohibitive (as if having that much computing power wouldn't be cost prohibitive for one single entity in the first place). The further any given block is buried in the blockchain, the more secure it becomes. Estimates are something around the vicinity of $60 billion dollars to attempt to "counterfeit" one single bitcoin which means economically it just makes sense to purchase bitcoin on the market as opposed to trying to cheat the system. That cost will only continue to rise as more computing power is added to the network.


3) Quantum computing protection: Now the idea of computers being made of something other than matter and occuying something other than space (as noted in the quote above) alludes to the idea of quantum computers. Quantum computers use qubits instead of bits consisting of 1's and 0's. Qubits can be a 1 or a 0 and essentially any superposition of those two states. Using specific algorithms (like Shor's algo), quantum computers can take an integer and finds its prime factors extremely quickly because of the fact that it can solve for many states at the same and solve the equation in polynomial time.

In otherwords, given a public key (which is based on two very large prime numbers), you can find the original prime used numbers which is essentially the private key. Bitcoin uses public and private keys for digital signatures for securing bitcoins for their owners. However, bitcoin uses clever techniques to protect against the threat of quantum computing. Whenever a transaction is signed to send money to another address, its public key is added to the signed transaction so that the network and recipient can verify that the signer was indeed the owner of the bitcoin's being sent. Because addresses are hashes of the public key, this means that the only time that the actual public key is exposed is when the bitcoin address is actually being emptied and sent to the recipient. This is why it is important to never use the same bitcoin address twice. By the time a quantum computer receives the public key in order to attempt to decipher the private key from it, the address will have already been emptied of bitcoin and be worthless. Since quantum computers are not efficient at solving hashing equations, this protects bitcoin from the threat of quantum computers. Should there be a need to change encryption algorithms or increase the key size, this can be done through an upgrade and due to the decentralized nature of the network, the threat of this type of issue in the future is a much bigger threat to existing traditional centralized institutions that depend on these same encryption algorithms for security and rely on single points of failure to protect massive amounts of confidential data.


This is just a small sample of some of the more major components of the security that bitcoin provides and I hope I explained it in a way that is easy to understand.

L.A.S., I gave you the rebuttal I did because it is clear from your posts that after information like this is provided for you, you still continue to post FUD information about bitcoin such as an article about a data breach that is not unique to bitcoin, but is commonplace among every industry out there. The fact that the bitcoin that were stolen cannot be recovered is no different from the billions of USD that are stolen every year before even the data breaches that were the root cause were even discovered. At least when bitcoin is stolen, it is apparent immediately that they are gone compared to the covert fraud that takes place from compromised payment information every single day before it becomes clear there was a breach somewhere.

You're free to post on any topic you'd like, but don't mistake what you're posting as advice to anyone when it is clear from your post history that you have a clear bias against this technology and a lack of understanding of it as well. I welcome any open dialog and debate and if you'd like to engage in that, I'd be more than happy to.
« Last Edit: December 08, 2017, 08:07:03 AM by lifeanon269 »

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Re: Is it too late [bitcoin]?
« Reply #297 on: December 08, 2017, 10:20:34 AM »
L.A.S., I gave you the rebuttal I did because it is clear from your posts that after information like this is provided for you, you still continue to post FUD information about bitcoin such as an article about a data breach that is not unique to bitcoin, but is commonplace among every industry out there. The fact that the bitcoin that were stolen cannot be recovered is no different from the billions of USD that are stolen every year before even the data breaches that were the root cause were even discovered. At least when bitcoin is stolen, it is apparent immediately that they are gone compared to the covert fraud that takes place from compromised payment information every single day before it becomes clear there was a breach somewhere.

The difference with bitcoin is that there is no consumer protection at all.  Once money has been stolen it's gone.  I mean, if there's a data breach at my bank at a billion dollars are lost . . . I don't care because it doesn't impact me.  If my credit card is stolen and there are fraudulent charges, they don't impact me.  When there's a data breach at a place holding bitcoin for people, each of those people will lose their funds.  There also currently exists no real way to trace the missing money.

While I agree with you that there's a lot of cool security technology involved with crypto-currencies, your continual refusal to acknowledge the poor (non-existent) level of consumer protection that comes from using them is a bit odd.

ILikeDividends

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Re: Is it too late [bitcoin]?
« Reply #298 on: December 08, 2017, 10:29:51 AM »
L.A.S., I gave you the rebuttal I did because it is clear from your posts that after information like this is provided for you, you still continue to post FUD information about bitcoin such as an article about a data breach that is not unique to bitcoin, but is commonplace among every industry out there. The fact that the bitcoin that were stolen cannot be recovered is no different from the billions of USD that are stolen every year before even the data breaches that were the root cause were even discovered. At least when bitcoin is stolen, it is apparent immediately that they are gone compared to the covert fraud that takes place from compromised payment information every single day before it becomes clear there was a breach somewhere.

The difference with bitcoin is that there is no consumer protection at all.  Once money has been stolen it's gone.  I mean, if there's a data breach at my bank at a billion dollars are lost . . . I don't care because it doesn't impact me.  If my credit card is stolen and there are fraudulent charges, they don't impact me.  When there's a data breach at a place holding bitcoin for people, each of those people will lose their funds.  There also currently exists no real way to trace the missing money.

While I agree with you that there's a lot of cool security technology involved with crypto-currencies, your continual refusal to acknowledge the poor (non-existent) level of consumer protection that comes from using them is a bit odd.

Shall I assume that you don't agree that bitcoin is suitable for wide adoption and a general acceptance as a standard of value and a medium of exchange?

I have no noteworthy disagreements with your post.  Just curious. ;)
« Last Edit: December 08, 2017, 10:44:17 AM by ILikeDividends »

lifeanon269

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Re: Is it too late [bitcoin]?
« Reply #299 on: December 08, 2017, 10:45:51 AM »
The difference with bitcoin is that there is no consumer protection at all.  Once money has been stolen it's gone.  I mean, if there's a data breach at my bank at a billion dollars are lost . . . I don't care because it doesn't impact me.  If my credit card is stolen and there are fraudulent charges, they don't impact me.  When there's a data breach at a place holding bitcoin for people, each of those people will lose their funds.  There also currently exists no real way to trace the missing money.

That's not really a difference. If there is a data breach at a company, there will likely be millions of dollars that were permanently stolen that can never be returned. The company covers those costs for the consumer. Why can't that same thing be true for centralized companies that handle bitcoin? It isn't the currency that is providing the protection in either case. Most data breaches that occur go unnoticed for months all the while millions of dollars are being stolen. The protections that are in place that protect the consumer are not protections provided by the currency, they're just simply protections provided by the companies because they'd like to stay in business. The customers are protected not because they were able to retrieve the stolen funds (that's almost never the case), but simply because they're protecting their business...the customers...by not putting the loss on them. Cyber-security insurance is a massive industry now for this very reason. Coinbase undoubtedly has as massive insurance policy to protect their customers in the same way that many other companies that handle confidential information do.

If we're talking about individuals holding their own private keys, then the comparison there is no different to anyone holding cash. Once its stolen, its likely gone forever unless you can find who stole it. The same is true for bitcoin.