Author Topic: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion  (Read 166941 times)

shadow

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #500 on: October 28, 2017, 11:47:31 AM »
Does anyone have further advice?

2. If you do trade, distinguish between your longterm hodl and trade stacks. Your trade stack should be no more than 5-10% of your hodl stack. Don't margin trade.

Crypto is still early phase, and it's not user friendly in terms of security. Learn about security. At the very least use a fresh install on a brand new, nonrefurbished device for crypto related activies (this can also apply mutally to banking and other sensitive-info services). A linux bootable disk can also suffice. For longterm storage, use ledger or encrypted usbs, with multiple copies of private key/seed/phrase.



 

phil22

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #501 on: October 28, 2017, 02:14:59 PM »
"Either you don't understand Bitcoin or you don't understand what a pyramid scheme is."

This is, to put it mildly, an extravagantly dismissive attitude. It's not an exact copy of a pyramid scheme (because if it was, it would be completely illegal), but the characteristics are not too dissimilar. In each case, you're seeing a progressively larger flow of money into a product, fuelled by the gains realised by prior investors, and fuelling a still larger flow of money into the product. There are enough characteristics in common that the comparison isn't unwarranted. It's not as tight a match as with Robert Schiller's description of a bubble, but it's still a reasonable comparison to make.

isn't that an exact description of the stock market?  if you own VTSAX or any other index fund you're not researching individual companies.  most of the return on stocks is simply waiting for someone else to come along and buy it from you later for a higher price than you paid.  dividends of course result in the proportional reduction of the share price so those don't count as returns.  the price/book ratio of the s&p 500 is over 3.0, so don't tell me you're gladly purchasing something for more than 3x the "intrinsic value".  you buy stocks because you hope buyers will be there when you go to sell 4% of your shares every year.


Dude, if you want intrinsic value, you want stocks, or land, or useful commodities, or something else that produces something. No currency (at least none that I'm aware of) has "intrinsic" value, bitcoin included. In fact you don't really even want currency to have intrinsic value, since you want it used for exchange, not hoarding.

-W

is a 24/7 global, secure, cheap, fast, censorship-resistant payment network not producing value?  are visa, paypal, and western union valueless as well?

phil22

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #502 on: October 28, 2017, 02:23:48 PM »
Does anyone have further advice?

great advice in that post.

i would add:
-do not sell more than 5% of your holdings in any given year even if everyone is shouting about bubbles, tops, and tulips.  this applies to blockchain forks as well.

maizeman

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #503 on: October 28, 2017, 02:31:39 PM »
MystryBox, a good set of advice. I'm not sure about #3 on the what-not-to-do list just because I think assumed anonymous nature of cryptocurrencies was one of the things that got people really excited about bitcoin in the early days (before people realized how straightforward it would often be to link an anonymous "wallet" to a particular person). So I still think the anonymous cryptocurrencies are likely candidates if there ever is a significant switch from bitcoin to something else.

That said, even if I'm right about that, you certainly raise a very valid point about the difficulty of getting money back out of crypto without looking like a potential drug dealer if you've got a lot of money sitting in monero or zcash (or whichever other anonymous coins are out there).

Dude, if you want intrinsic value, you want stocks, or land, or useful commodities, or something else that produces something. No currency (at least none that I'm aware of) has "intrinsic" value, bitcoin included. In fact you don't really even want currency to have intrinsic value, since you want it used for exchange, not hoarding.

-W

is a 24/7 global, secure, cheap, fast, censorship-resistant payment network not producing value?  are visa, paypal, and western union valueless as well?

I cannot speak for Walt, but I certainly think the bitcoin network and the ability to send payments all over the world is producing value. But the folks who produce that value (and get paid for it) are the miners, not the folks who hold bitcoin. Now if at some point in the future there is a switch to a proof-of-stake instead of proof-of-work on a major cryptocurrency (I think that is still on Ethereum's roadmap), then the folks who just buy and hold the currency could, indeed, be producing value.

phil22

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #504 on: October 28, 2017, 02:55:34 PM »
Now if at some point in the future there is a switch to a proof-of-stake instead of proof-of-work on a major cryptocurrency (I think that is still on Ethereum's roadmap), then the folks who just buy and hold the currency could, indeed, be producing value.

i don't know how Ethereum's PoS will work but i imagine it would have to somehow involve spending money on electricity and computer hardware to process transactions and store the blockchain -- therefore a nonzero input to keep generating value via the payment network.

maizeman

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #505 on: October 28, 2017, 03:08:30 PM »
It's been a long time since I've updated on my ZEC mining experiment.* I stopped updating because the capital appreciation on the fees from ZEC mining which I was holding in bitcoin was going up so fast that it really dwarfed the financial effects of continuing to mine. But my mining rig has continued to chug away in the corner of my basement the last couple of months, so I thought I'd pull together an update.

The last data in my records is from August 18th, 2017, at which point I had climbed out of the ~$1,400 cost of setting up my rig and was up ~$800 (so total gain of approx. $2,200) based on ~$550 of mining income with the rest coming from capital appreciation. Two months later I'm up to ~$1,700 net (so total gain ~$3,100), with mining income at ~$750. I don't have detailed records for the last two months, but whenever I've checked my rig has been pretty consistently pulling in $100/month (~3x the cost of the electricity). People seem to have mostly stopped talking about investing in mining hardware (or maybe it's just an artifact of which forums I do or don't frequent), which is consistent with the profit from mining being a lot more stable.



All in all, I may still break even on the cost of hardware from mining fees at some point. I certainly did end up making money as the result of this experiment, but it was from an unconsidered side effect of my plan (holding more cryptocurrency), not the actual thing I set out to do (turn a profit from setting up a bunch of GPUs in my basement).


*Original details here on the first page of the thread.. Details on power usage here on the second page.

maizeman

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #506 on: October 28, 2017, 03:26:37 PM »
Now if at some point in the future there is a switch to a proof-of-stake instead of proof-of-work on a major cryptocurrency (I think that is still on Ethereum's roadmap), then the folks who just buy and hold the currency could, indeed, be producing value.

i don't know how Ethereum's PoS will work but i imagine it would have to somehow involve spending money on electricity and computer hardware to process transactions and store the blockchain -- therefore a nonzero input to keep generating value via the payment network.

Agreed, but the vast majority of the current computer hardware and energy usage from cryptocurrencies that use proof of work (basically all the big ones everyone has heard of right now) isn't spent on storing the blockchain or communicating about transactions, it is spent on what is essentially a security measure to prevent people from rewriting the blockchain (churning away at asymmetrically hard math problems).

In proof of stake you probably still need to have a computer running in order to help mine (or do they call it minting with PoS?), but you don't get extra minting/mining rewards from having extra more computers/CPUs/GPUs/ASICs only from owning more of the currency and being willing to stake that currency on not allowing invalid transactions to go forward.

Scortius

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #507 on: October 28, 2017, 05:16:46 PM »
Just wanted to chime in and say thanks for the comments. While I do feel that crypto could be hanging on a speculation bubble, I truly am excited about the possible applications of the underlying technology, especially in areas beyond basic currency exchanges. I'll certainly be keeping my eyes on things and the technology continues to progress.

MystryBox

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #508 on: October 28, 2017, 06:12:25 PM »
MystryBox, a good set of advice. I'm not sure about #3 on the what-not-to-do list just because I think assumed anonymous nature of cryptocurrencies was one of the things that got people really excited about bitcoin in the early days (before people realized how straightforward it would often be to link an anonymous "wallet" to a particular person). So I still think the anonymous cryptocurrencies are likely candidates if there ever is a significant switch from bitcoin to something else.

I would've agreed with you in the past, but after some direct experience cashing out a non-trivial amount of crypto my view has changed.  Fully anonymous crypto are sure to be used for transactions, especially on the darknet, but as an investment I don't think they will ever be very big.  I could be wrong, but here's my thinking:
- Exchanges are likely to run into regulatory issues converting them to fiat in large amounts in many countries.
- I suspect large institutional traders and hedge funds will avoid them precisely because of the anonymous factor/darknet-link and the above exchange issues.  Value won't go very far without larger traders buying.

I think cryptos that are normally traceable but can have anonymization when needed (like eth and bitcoin will eventually support) are better investments than a fully anonymous crypto.  JMO.

Quote
That said, even if I'm right about that, you certainly raise a very valid point about the difficulty of getting money back out of crypto without looking like a potential drug dealer if you've got a lot of money sitting in monero or zcash (or whichever other anonymous coins are out there).

I would recommend if you invest in anonymous cryptos and expect significant gains, you should leave them on the exchange.  Then when it is time to sell there is no question about where they came from.  These concerns are only for significant amounts of crypto.  And if you have a lot of crypto you can run into other problems like hidden caps that some exchanges have on fiat movement, even if source of funds isn't a problem.  For example I believe Kraken has an annual limit where even for highest tier customers it would take you literally 10 years to cash out of a million dollars worth of crypto off the exchange.  So make sure your exchange will actually handle the value you expect to end up with.
« Last Edit: October 28, 2017, 06:19:19 PM by MystryBox »

maizeman

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #509 on: October 28, 2017, 08:06:03 PM »
Thanks! I certainly don't have direct experience cashing out large sums of cypto (anonymous or otherwise) so it's great to hear from someone who has gone through the process recently and seen where the potential snags are.

Bicycle_B

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #510 on: October 28, 2017, 09:49:29 PM »
Maizeman, I continue to love the clarity and reliability of your mining reports. 

MystryBox, welcome to the forum.

lifeanon269

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #511 on: October 29, 2017, 08:25:02 AM »
The most recent Bitcoin difficulty change was pretty significant. It dropped my daily BTC earning from about .00185 to about .00146. Back when I first got this rig in July I was earning about .00269. So it has dropped by almost half in about 3 months. Luckily the price has skyrocketed since then as well. I believe I'll still be profitable with my mining for the foreseeable future, but the difficulty has risen significantly with all the recent BTC price increases. I'm curious to see how the hashrate responds if the 2X fork ends up going through. I'm torn, I think the 2X fork is wreckless and poorly executed because it doesn't have replay protection, but I wouldn't mind seeing some hashrate go to another chain to allow BTCs difficulty to go down or at the very least hold steady for a while.

maizeman

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #512 on: October 29, 2017, 08:40:06 AM »
That's a good point, lifeanon. I should have specified that, stated in dollars, my mining income has been relatively constant. However, since the price of bitcoin in dollars has increased over that time period, stated in bitcoin, my mining income has continued to decline over the last several months.

MystryBox

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #513 on: October 29, 2017, 09:29:33 AM »
I'm torn, I think the 2X fork is wreckless and poorly executed because it doesn't have replay protection, but I wouldn't mind seeing some hashrate go to another chain to allow BTCs difficulty to go down or at the very least hold steady for a while.

The 2X/1X fork is being executed this way on purpose by both sides.  The value in bitcoin is no longer in its technology--it's not remotely leading tech anymore, and it's barely usable by comparison to other coins due to delays and fees--its value is in the Bitcoin brand.  Neither side wants to implement replay protection because whoever changes and implements replay protection becomes the altcoin and arguably won't get the "bitcoin"/"btc" branding.  So both sides are playing a game of chicken to see who will take majority hashing and usage to walk away with the brand and forcing the other side into vanishing or "altcoining" itself.

To me the whole thing is risking the value (and lead coin status) of BTC.  Ethereum took a huge hit in value when it forked off classic without replay protection (though it eventually rebounded).  No matter how it goes I think it's another nail in the coffin of bitcoin maximalism.  The fault lies squarely with Core and its complete inability to cooperate with bitcoin mining, business, and user communities.  Unfortunately I don't see Core improving its leadership abilities and even if 1X wins it only means there will be even more drama soon (or perhaps a defection of businesses and usage to Bitcoin Cash or Ethereum).

Full-Life

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #514 on: October 29, 2017, 09:48:03 AM »
How do you manage your Crypto-Currency Portfolios?

On the basis of market capatilization I'm planning to invest in the top 5 crypto currencies and to rebalance every month.
Like a typical passiv index fonds. What is a cheap and simple way to do this? 

PS. I haven't read every post in this threat, only the first pages and couldn't find an answer.

maizeman

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #515 on: October 29, 2017, 10:00:00 AM »
How do you manage your Crypto-Currency Portfolios?

On the basis of market capatilization I'm planning to invest in the top 5 crypto currencies and to rebalance every month.
Like a typical passiv index fonds. What is a cheap and simple way to do this? 

PS. I haven't read every post in this threat, only the first pages and couldn't find an answer.

If you're trying to replicate a cap weighted index fund you shouldn't be doing any rebalancing at all. In addition, rebalancing every month would either mean losing an awful lot in transaction fees or keeping your cryptocurrency at an exchange, which is a very bad idea.

I'd highly suggest reading MystryBox's post on the previous page about things to do and things not to do when investing in cryptocurrencies before you actually spend any money.

Full-Life

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #516 on: October 29, 2017, 10:12:52 AM »
Thanks for the link. These are exactly the information what  I need Very informative. Especially the taxation and changing to firat currencies.

I'm planing to invest every month 100,- in crypto currencies. Money that doesn't hurt me if lost. Rebalancing for me would mean to buy to rebalance and to sell only if the currencies is not in the top 5 anymore.

How do you recommend to invest constantly passiv in crypto currencies?


shadow

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #517 on: October 29, 2017, 11:08:39 AM »
How do you manage your Crypto-Currency Portfolios?

On the basis of market capatilization I'm planning to invest in the top 5 crypto currencies and to rebalance every month.
Like a typical passiv index fonds. What is a cheap and simple way to do this? 

PS. I haven't read every post in this threat, only the first pages and couldn't find an answer.

I would encourage you to read through the entire post. You may find useful information.

I self-manage. However, trusted names in the passive index fund space are Iconomi and Prism, with fees. Both sites should also give you the ability to pick and choose.

Security wise, I would also recommend a new, nonrefurbished device exclusively for crypto related activities and websites (don't use it for normal web browsing); or boot off a linux disk.






shadow

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #518 on: October 29, 2017, 11:21:58 AM »
I'm torn, I think the 2X fork is wreckless and poorly executed because it doesn't have replay protection, but I wouldn't mind seeing some hashrate go to another chain to allow BTCs difficulty to go down or at the very least hold steady for a while.

The 2X/1X fork is being executed this way on purpose by both sides.  The value in bitcoin is no longer in its technology--it's not remotely leading tech anymore, and it's barely usable by comparison to other coins due to delays and fees--its value is in the Bitcoin brand.  Neither side wants to implement replay protection because whoever changes and implements replay protection becomes the altcoin and arguably won't get the "bitcoin"/"btc" branding.  So both sides are playing a game of chicken to see who will take majority hashing and usage to walk away with the brand and forcing the other side into vanishing or "altcoining" itself.

To me the whole thing is risking the value (and lead coin status) of BTC.  Ethereum took a huge hit in value when it forked off classic without replay protection (though it eventually rebounded).  No matter how it goes I think it's another nail in the coffin of bitcoin maximalism.  The fault lies squarely with Core and its complete inability to cooperate with bitcoin mining, business, and user communities.  Unfortunately I don't see Core improving its leadership abilities and even if 1X wins it only means there will be even more drama soon (or perhaps a defection of businesses and usage to Bitcoin Cash or Ethereum).

I've been observing the space before my mmm account age. It's highly political. Both sides are not without blemish and information distortion. However, I believe core is the greater evil.

lifeanon269

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #519 on: October 29, 2017, 12:20:25 PM »
The 2X/1X fork is being executed this way on purpose by both sides.  The value in bitcoin is no longer in its technology--it's not remotely leading tech anymore, and it's barely usable by comparison to other coins due to delays and fees--its value is in the Bitcoin brand.  Neither side wants to implement replay protection because whoever changes and implements replay protection becomes the altcoin and arguably won't get the "bitcoin"/"btc" branding.  So both sides are playing a game of chicken to see who will take majority hashing and usage to walk away with the brand and forcing the other side into vanishing or "altcoining" itself.

To me the whole thing is risking the value (and lead coin status) of BTC.  Ethereum took a huge hit in value when it forked off classic without replay protection (though it eventually rebounded).  No matter how it goes I think it's another nail in the coffin of bitcoin maximalism.  The fault lies squarely with Core and its complete inability to cooperate with bitcoin mining, business, and user communities.  Unfortunately I don't see Core improving its leadership abilities and even if 1X wins it only means there will be even more drama soon (or perhaps a defection of businesses and usage to Bitcoin Cash or Ethereum).


I've been observing the space before my mmm account age. It's highly political. Both sides are not without blemish and information distortion. However, I believe core is the greater evil.


I'm going to have to disagree here. Every fork should have replay protection of some form implemented to protect the user base and their money. If a hard fork is implemented with replay protection and it has enough community support, then the value, the name of Bitcoin, the community, hashrate, and all will follow it. If there is a fork and non of those things follow, then the community has spoken that the fork is not Bitcoin. Implementing a fork without replay protection should be seen as an attack on Bitcoin itself since it is trying to accomplish altering Bitcoin without consensus. Luckily support for 2X has been declining rapidly lately. Unfortunately, if 2X still goes forward, there is still the risk of fraudulent transactions due to no replay protection.

The Core development team isn't evil, they're conservative and I'm greatful for that since I have money in Bitcoin. It is what has made the Bitcoin network as stable as it is. SegWit was just activated and there needs to be time given to see how that impacts the network before implementing additional changes. As far as fees go, most of the high fees are actually due to poor wallet fee estimation. Most wallets that don't allow the user to directly specify a fee use fee algorithms that way overestimate what fee should be used for a transactions. Luckily, this has also been changing lately as many popular wallets are now allowing the user to specific fee rates. At the moment I can send transactions consistently for 20-30 Satoshis per byte which is very low. This is without SegWit even being widely utilized yet. Implementing a irreversible hardfork to increase the blocksize to 2MB when it isn't necessary yet and to do so without implementing replay protection is wreckless.

B2X is already being listed by most exchanges as different than BTC, so continuing forward in order to capture the Bitcoin name is futile since they attempted to do so without community support.

shadow

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #520 on: October 29, 2017, 12:28:54 PM »
The 2X/1X fork is being executed this way on purpose by both sides.  The value in bitcoin is no longer in its technology--it's not remotely leading tech anymore, and it's barely usable by comparison to other coins due to delays and fees--its value is in the Bitcoin brand.  Neither side wants to implement replay protection because whoever changes and implements replay protection becomes the altcoin and arguably won't get the "bitcoin"/"btc" branding.  So both sides are playing a game of chicken to see who will take majority hashing and usage to walk away with the brand and forcing the other side into vanishing or "altcoining" itself.

To me the whole thing is risking the value (and lead coin status) of BTC.  Ethereum took a huge hit in value when it forked off classic without replay protection (though it eventually rebounded).  No matter how it goes I think it's another nail in the coffin of bitcoin maximalism.  The fault lies squarely with Core and its complete inability to cooperate with bitcoin mining, business, and user communities.  Unfortunately I don't see Core improving its leadership abilities and even if 1X wins it only means there will be even more drama soon (or perhaps a defection of businesses and usage to Bitcoin Cash or Ethereum).


I've been observing the space before my mmm account age. It's highly political. Both sides are not without blemish and information distortion. However, I believe core is the greater evil.


I'm going to have to disagree here. Every fork should have replay protection of some form implemented to protect the user base and their money. If a hard fork is implemented with replay protection and it has enough community support, then the value, the name of Bitcoin, the community, hashrate, and all will follow it. If there is a fork and non of those things follow, then the community has spoken that the fork is not Bitcoin. Implementing a fork without replay protection should be seen as an attack on Bitcoin itself since it is trying to accomplish altering Bitcoin without consensus. Luckily support for 2X has been declining rapidly lately. Unfortunately, if 2X still goes forward, there is still the risk of fraudulent transactions due to no replay protection.

The Core development team isn't evil, they're conservative and I'm greatful for that since I have money in Bitcoin. It is what has made the Bitcoin network as stable as it is. SegWit was just activated and there needs to be time given to see how that impacts the network before implementing additional changes. As far as fees go, most of the high fees are actually due to poor wallet fee estimation. Most wallets that don't allow the user to directly specify a fee use fee algorithms that way overestimate what fee should be used for a transactions. Luckily, this has also been changing lately as many popular wallets are now allowing the user to specific fee rates. At the moment I can send transactions consistently for 20-30 Satoshis per byte which is very low. This is without SegWit even being widely utilized yet. Implementing a irreversible hardfork to increase the blocksize to 2MB when it isn't necessary yet and to do so without implementing replay protection is wreckless.

B2X is already being listed by most exchanges as different than BTC, so continuing forward in order to capture the Bitcoin name is futile since they attempted to do so without community support.

We'll have to disagree on these points. I really want to avoid the politics here, but if you insist, I can provide a statement.

waltworks

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #521 on: October 29, 2017, 12:45:31 PM »
Wait, wait, a cabal of self-interested people who are only slightly answerable to the participants is running the show?!?

Sounds sort of a like... government.

-W


MystryBox

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #522 on: October 29, 2017, 12:51:38 PM »

We'll have to disagree on these points. I really want to avoid the politics here, but if you insist, I can provide a statement.

I'm with you.  Nothing stated in all that had any basis in reality, but I'll just shut my mouth.

lifeanon269

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #523 on: October 29, 2017, 12:56:48 PM »
We'll have to disagree on these points. I really want to avoid the politics here, but if you insist, I can provide a statement.

That's fine. This thread is one large debate regarding Bitcoin and crypto-currencies, so I don't think discussing the technical and logistical aspects of Bitcoin and its various forks necessarily needs to be political or negative. But, I don't think you avoided anything by calling Bitcoin core the "greater evil" either.   ;-)

Wait, wait, a cabal of self-interested people who are only slightly answerable to the participants is running the show?!?

Sounds sort of a like... government.

-W

Haha, well depending on how the 2X fork goes, they could be shown to be fully answerable. Time will tell.

JAYSLOL

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #524 on: October 29, 2017, 01:43:09 PM »
Wait, wait, a cabal of self-interested people who are only slightly answerable to the participants is running the show?!?

Sounds sort of a like... government.

-W

Can I just say how much I love your posts

lifeanon269

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #525 on: October 30, 2017, 11:38:41 AM »
I figured I'd post this for all the crypto lovers here to maybe stoke some even more love you all have for the promise of crypto-currencies. It is an old article (2010) related to the 2008 global financial crisis that I saved to refer back to when I want to be reminded of the blatant fraud that occurs on Wall Street and the promise the crypto-currencies could bring to the table by being counterfeit proof. The article is still relevant today though. It is when I read articles like this that I get really excited about crypto-currencies and how they can help fix our broken economy and help revolutionize our financial sector. It is an excellent read from Rolling Stone if you haven't read it before. It isn't just the US economy that operates like this either, it is the entire world economy that operates on a counterfeit and fraudulent basis.

https://www.rollingstone.com/politics/news/wall-streets-naked-swindle-20100405

If anyone ever tells you that Bitcoin or crypto-currencies are in a bubble, just have them read this article. When you can have 12 paper oil barrels trading for every 1 physical oil barrel, then it isn't Bitcoin that should be worried about a bubble. Our whole economy is based on counterfeit trading.

The fact that Bitcoin is counterfeit proof gives it a leg up on the rest of the economy. At least the Bitcoin I own I know are real and legitimate Bitcoin.

That being said, I'd imagine that once derivatives trading starts becoming more popular with Bitcoin, then those derivatives would likely be vulnerable to the same counterfeiting which is why it is always good advice to just invest and hold directly in Bitcoin and not in any derivative markets.

Enjoy the read and go buy some Bitcoin!

MystryBox

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #526 on: October 30, 2017, 02:06:09 PM »
The fact that Bitcoin is counterfeit proof gives it a leg up on the rest of the economy. At least the Bitcoin I own I know are real and legitimate Bitcoin.

That being said, I'd imagine that once derivatives trading starts becoming more popular with Bitcoin, then those derivatives would likely be vulnerable to the same counterfeiting which is why it is always good advice to just invest and hold directly in Bitcoin and not in any derivative markets.

Too bad core, who you seem to love, is busy killing the original design of bitcoin and turning it into a settlement system that they will then use to power higher level derivative networks like sidechains and lightning.  I had a big argument with nullc (Greg Maxwell) a few years back about how they were moving away from the "digital property" breakthrough that bitcoin achieved to create a bunch of derivatives on top of bitcoin which would start right down the same road of the mainstream financial system.  He didn't care, he's never cared about those aspects of bitcoin.

Their entire refusal to increase the blocksize is not what they claim, it is to obsolete the old bitcoin model and force any new usage into newer derivative technologies (which they of course profit from).   So why bother posting about how great those attributes of bitcoin are when you are cheering the group that is killing those attributes?
« Last Edit: October 30, 2017, 02:09:43 PM by MystryBox »

lifeanon269

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #527 on: October 30, 2017, 04:01:43 PM »
Too bad core, who you seem to love, is busy killing the original design of bitcoin and turning it into a settlement system that they will then use to power higher level derivative networks like sidechains and lightning.  I had a big argument with nullc (Greg Maxwell) a few years back about how they were moving away from the "digital property" breakthrough that bitcoin achieved to create a bunch of derivatives on top of bitcoin which would start right down the same road of the mainstream financial system.  He didn't care, he's never cared about those aspects of bitcoin.

Their entire refusal to increase the blocksize is not what they claim, it is to obsolete the old bitcoin model and force any new usage into newer derivative technologies (which they of course profit from).   So why bother posting about how great those attributes of bitcoin are when you are cheering the group that is killing those attributes?

Wow, MystryBox, you're very antagonistic. First you comment about how my post has no basis in reality (without actually refuting anything), then you comment about how you're going to instead keep quiet on the matter. Then you follow that up with another aggressive post and tell me not to bother posting things about the merits and benefits of Bitcoin as if somehow I'm not a big believer and proponent of the tech.

First off, if you look through this thread and others on this forum, you'll see I am a big advocate of Bitcoin and its capabilities. I'm a firm believer in all that Bitcoin stands for...decentralization, cryptography, open source, consensus, deflationary, etc.

Second, I never said that I love Bitcoin core, I said that they're not evil. For the record, I do support increasing the block size, just not right now and certainly not with the awful SegWit2X implementation that has no active development behind it and doesn't implement replay protection properly. Support for the 2X fork in November has been crumbling lately. Tell me, what defense do you have for any hardfork that doesn't implement replay protection?

Third, increasing the block size is not a scaling solution. If we want Bitcoin to be usable as a medium of exchange, it needs to go beyond just 7 tx/sec (1MB blocks), 14 tx/sec (2MB blocks), or even 55 tx/sec (8MB blocks). Those are not scaling solutions. Bitcoin as it is designed will never be capable of processing transactions at the same rate that VISA is capable of if we're trying to just stick with on-chain transaction blocks. I agree that we absolutely need to increase the block size in order to increase the number of on-chain transactions, but using that as a scaling solution in hopes that it will continue to support the growing demands of all transaction is not going to work. Unless we find a way to move transactions off-chain, then Bitcoin can't scale to what we all want it to become. That is, I would love for a day to come where I can purchase a drink with Bitcoin.

Fourth, that doesn't even touch on the fact that in order for the network to be able to support transaction rates that high, the network would end up being much more centralized. Which out of all properties for Bitcoin, its decentralized nature is probably one of the most important to have come from Satoshi's original whitepaper. It is extremely important for Bitcoin to remain decentralized. At the moment, my Bitcoin node taxes my home network a lot. It took almost a week to download the whole chain. But, it isn't storage that I'm concerned about. I can always purchase additional storage, that's cheap and always getting cheaper. However, the bandwidth that my node uses is a lot and if the block size were to increase much more, then that would probably make it so that I wouldn't be able to host my own node in the very foreseeable future.

Also, sidechains are completely opt-in. No one is forced to use them. That's why SegWit was implemented with a UASF. Bitcoin as it is today is and can still be used the same as it was previously. If a production Lightning Network goes live, no one has to force you to use it. Those who choose to can however. The settlement still happens on the Bitcoin blockchain however and therefore the Lightning Network is still backed by the same verifiable and counterfeit proof Bitcoin blockchain. Explain to me how the Lightning Network is a derivative of Bitcoin as you say? The Lightning Network still settles in Bitcoin. When payment channels close, they're confirmed on the Bitcoin blockchain and payment channel transactions are multisig between the parties involved, so either party can broadcast the transaction in the event of a dispute. I'm not saying that Lightning Network is perfect. I don't like how payment channels need to be constantly monitored, for example. But it isn't a derivative and it is a much longer term scaling solution than simply increasing the blocksize.

Finally, I just wanted to add (I touched on this earlier) that one of Bitcoin's highest risks come from other capable cypto-currencies taking its place as the number one currency and making Bitcoin obsolete. Crypto-currencies are constantly coming up with new ideas and features. There aren't many ways that I could see Bitcoin ever going to $0, but one of those ways that I could see it happening is if a better currency came along to take its place. I believe sidechains will have greatly reduced that risk of ever occuring. They allow Bitcoin to be much more responsive to what the market needs it to be. If Bitcoin requires vastly higher transaction speeds to meet demand or micro-transaction capability, then sidechains will allow for that to occur, thus keeping the value of POS transactions strictly on the Bitcoin network as opposed to having that use-case go to another competitive currency.

Anyway, I just wanted to clear the air. I don't like it when people attempt to call me delusional without at least giving me the courteousy of telling me why the think so. If you want to have a debate with me, go ahead and do so. I'm capable of having a debate based on information without the need to be antagonistic or aggressive.

phil22

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #528 on: October 30, 2017, 07:30:24 PM »
First off, if you look through this thread and others on this forum, you'll see I am a big advocate of Bitcoin and its capabilities. I'm a firm believer in all that Bitcoin stands for...decentralization, cryptography, open source, consensus, deflationary, etc.

you are certainly an awesome advocate and you know your stuff.  i am debating with myself whether or not to reply to your individual points -- but what the hell.  this isn't r/bitcoin -- so we can have a debate!  in fact, the exact same debate that's been had zillions of times since blocks have been full.

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I do support increasing the block size, just not right now...

blocks have been full for a while -- it should have never even got close to this point.  the block size limit should have been doubled to 2MB years ago, and probably doubled again at least once more by now.  even if monetizing sidechains or the lightning network is the surreptitious goal, you need to raise the block size for it all to work.

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Third, increasing the block size is not a scaling solution ... Bitcoin as it is designed will never be capable of processing transactions at the same rate that VISA is capable of.

VISA levels of tx/sec is a straw man argument.  no one is trying to get that to work at this point.  2MB-8MB blocks are more than enough for the next few years.

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Fourth, that doesn't even touch on the fact that in order for the network to be able to support transaction rates that high, the network would end up being much more centralized. Which out of all properties for Bitcoin, its decentralized nature is probably one of the most important to have come from Satoshi's original whitepaper.

the original unmodified white paper mentions that "server farms" would be nodes, not individual users.  most folks don't run their own email server or web server, yet the internet remains decentralized.

also, the lightning network by design relies on centralization.  if you're concerned the peer-to-peer qualities of bitcoin are at risk then you should be against the current lightning network proposals.

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Also, sidechains are completely opt-in. No one is forced to use them... the Lightning Network is still backed by the same verifiable and counterfeit proof Bitcoin blockchain

sidechains are not opt-in if the block size is 1MB and you're in a bidding war to even get your tx in a block.

the lightning network destroys the original alignment of incentives that give us the incredible security of the today's bitcoin mining network.  if fewer people can make on-chain transactions, and the block reward has been halved a few times, why would the miners even mine any longer?

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sidechains ... allow Bitcoin to be much more responsive to what the market needs it to be.

so do hard forks.  any feature could be added to bitcoin.  bitcoin's supposed to be a honey badger, not a deer in the headlights.  increasing the block size limit to 2MB-8MB by the way isn't a "feature" -- it's a much simpler change than that: it allows bitcoin to perform the same way it's performed since 2009.

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If you want to have a debate with me, go ahead and do so. I'm capable of having a debate based on information without the need to be antagonistic or aggressive.

i think we're all on the same page with that here.  agreed.

lifeanon269

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #529 on: October 30, 2017, 08:23:14 PM »
you are certainly an awesome advocate and you know your stuff.  i am debating with myself whether or not to reply to your individual points -- but what the hell.  this isn't r/bitcoin -- so we can have a debate!  in fact, the exact same debate that's been had zillions of times since blocks have been full.

I enjoy good debates, so I certainly welcome any counterpoints and am an open-minded individual.

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blocks have been full for a while -- it should have never even got close to this point.  the block size limit should have been doubled to 2MB years ago, and probably doubled again at least once more by now.  even if monetizing sidechains or the lightning network is the surreptitious goal, you need to raise the block size for it all to work.

The mempool was completely empty this week, so that would go against the argument that the current blocksize is not sufficient to handle the current transaction rate demanded of the network. The mempool backup that occurred over the summer was due to a lot of transaction spam in an effort to push support for a blocksize increase. Furthermore, Segwit is a 2MB blocksize increase without demanding 2MB of per block data of the Bitcoin network.

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VISA levels of tx/sec is a straw man argument.  no one is trying to get that to work at this point.  2MB-8MB blocks are more than enough for the next few years.

It isn't a strawman argument if it is constantly called into question the idea that Bitcoin is being moved in a direction that is against Satoshi's original vision. That vision was to have Bitcoin be a peer-to-peer payment network that would be a direct competitor against current payment networks like VISA that charge 3% fees to merchants. If Bitcoin is to truly be a competitor to that, then it needs to scale way beyond just 60 tx/sec. That's especially true if the adoption rate kicks into high gear and becomes exponential again like it did this year. You talk about how the blocksize should been increased long ago. That can certainly be argued, but how can that be argued now and at the same time not argue for looking further down the road again and see the writing on the wall that Bitcoin might not be up to the task of handling transactions should adoption exponentially increase yet again.

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the original unmodified white paper mentions that "server farms" would be nodes, not individual users.  most folks don't run their own email server or web server, yet the internet remains decentralized.

also, the lightning network by design relies on centralization.  if you're concerned the peer-to-peer qualities of bitcoin are at risk then you should be against the current lightning network proposals.

There is a difference between trust-based centralization and trust-less centralization. First, most folks don't run their own email server, but they can if they choose to (I choose to). If Bitcoin is forced into a centralized structure, then that puts Bitcoin into more and more control of centralized parties. If Bitcoin is forced to be hosted on nodes that are only hosted by larger organizations, then those very organizations become targets for government pressure and that means that Bitcoin can be controlled. That's much harder to do if your common everyday user is also capable of hosting nodes as well. Look at the response that the community has had against the threat of the 2X fork (https://coin.dance/nodes/core). The number of Bitcoin Core nodes has dramatically gone up over the last month or so and that is all possible because your common user can do so. That's against the very aim of a decentralized peer-to-peer system. The Lightning Network can (and likely will) lead to centralized "credit union" style hubs, but like I said, the Lightning Network is completely opt-in. So no one is forced into using centralized hubs if they don't want to.

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sidechains are not opt-in if the block size is 1MB and you're in a bidding war to even get your tx in a block.

the lightning network destroys the original alignment of incentives that give us the incredible security of the today's bitcoin mining network.  if fewer people can make on-chain transactions, and the block reward has been halved a few times, why would the miners even mine any longer?

In one argument you're talking about blocks being completely full which would force users into sidechains. Then in the next argument you're talking about blocks being empty which would cause miners to stop mining. Which is it? You can't argue both. The truth is that neither of those scenarios would come to pass. In order to open payment channels on the Lightning Network, you'd still need to put confirmed transactions on the Bitcoin blockchain. Opening and closing payment channels requires that to happen. Therefore, even in a fully utilized Lightning Network, there will still be Bitcoin transactions being broadcast on the network. Also, the Lightning Network is ideally used for smaller payments as payment channels will likely be opened with smaller payments in mind. This makes it possible for micro-transactions and everyday transactions to occur between parties. Larger transactions that aren't ideal for the Lightning Network would still be broadcast on the Bitcoin network as usual and if they require larger fees, then that's OK because a $2 fee to send $10,000 is a pretty darn good deal.

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so do hard forks.  any feature could be added to bitcoin.  bitcoin's supposed to be a honey badger, not a deer in the headlights.  increasing the block size limit to 2MB-8MB by the way isn't a "feature" -- it's a much simpler change than that: it allows bitcoin to perform the same way it's performed since 2009.

I agree, hard forks are great too...so long as replay protection is used for those forks to protect the end users' money. Like I said, I'm OK with increasing the block size and I'm not necessarily advocating against it. But I am advocating against the SegWit2X hardfork that is planned for November since it has been poorly planned, it's timing doesn't give SegWit a chance, it fails to implement replay protection, and doesn't have community support behind it.

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i think we're all on the same page with that here.  agreed.

Yup, thanks for the response!   :)

phil22

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #530 on: October 30, 2017, 09:41:17 PM »
The mempool was completely empty this week, so that would go against the argument that the current blocksize is not sufficient to handle the current transaction rate demanded of the network.

you can't cherry pick data to fit your argument.  blocks had been getting closer to being full for years, and now they have been full for some time: https://blockchain.info/charts/avg-block-size?timespan=all&daysAverageString=7

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If Bitcoin is to truly be a competitor to that, then it needs to scale way beyond just 60 tx/sec. That's especially true if the adoption rate kicks into high gear and becomes exponential again like it did this year. You talk about how the blocksize should been increased long ago. That can certainly be argued, but how can that be argued now and at the same time not argue for looking further down the road again and see the writing on the wall that Bitcoin might not be up to the task of handling transactions should adoption exponentially increase yet again.

it seems silly to have to say this but doubling the block size as needed and working on sidechains and lightning network are not mutually exclusive.  it's pretty simple: if most of the network agrees that blocks are full, then double the block size limit if current technology can handle it.  if the block size can't be doubled for technical reasons, then yes unveil the next iteration of whatever sidechain solution you have.

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the original unmodified white paper mentions that "server farms" would be nodes, not individual users.  most folks don't run their own email server or web server, yet the internet remains decentralized.

my mistake -- the mining farms were mentioned in a satoshi email, not the whitepaper: http://satoshi.nakamotoinstitute.org/emails/cryptography/2/

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There is a difference between trust-based centralization and trust-less centralization. ... The Lightning Network can (and likely will) lead to centralized "credit union" style hubs, but like I said, the Lightning Network is completely opt-in.

again i think the VISA argument is arbitrary straw man but just to clarify -- in your scenario on the order of 10-100s of tx/sec are on-chain with "trust-less centralization" and on the order of 10,000s tx/sec are off-chain on lightning network hubs with "trust-based" centralization -- and that's ok?  where only a few percent of users can use bitcoin in a trustless manner?

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In one argument you're talking about blocks being completely full which would force users into sidechains. Then in the next argument you're talking about blocks being empty which would cause miners to stop mining. Which is it? You can't argue both.

nope, in my argument the tiny blocks are full as you say with lightning channel opening/closing tx, and the block reward is trending to zero.  difficulty however is not trending to zero, so miners are now mining at a loss because they're not capturing fees for the bulk of transactions, which are off-chain.  somewhere before this scenario occurs the miners and users will simply migrate to a chain with larger blocks so they can capture more tx fees.

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I am advocating against the SegWit2X hardfork that is planned for November since it has been poorly planned, it's timing doesn't give SegWit a chance, it fails to implement replay protection, and doesn't have community support behind it.

the fork has had >80% support since mid-june.  https://coin.dance/blocks/proposals

if segwit can't compete with 2MB blocks then perhaps the time isn't right for more intricate solutions, see my point above.  if bitcoin will exist for years there will be plenty of time to introduce these new wrinkles.  the conservative solution is simply increasing the block size now (by "now" i mean after segwit -- the really conservative solution would have been just 2MB) and in the meantime yes, by all means, continuing to work on all manner of "down the road" scaling solutions.

lifeanon269

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #531 on: October 31, 2017, 06:26:12 AM »
you can't cherry pick data to fit your argument.  blocks had been getting closer to being full for years, and now they have been full for some time: https://blockchain.info/charts/avg-block-size?timespan=all&daysAverageString=7

You say I'm cherry picking data, and then you link to a chart about the block size? The mempool is a better correlation as to whether the network is backed up than block size is now. Many blocks are not even full. Blocks are able to go beyond 1MB now, so saying they're completely full is extremely misleading of you. The effect of this is that I'm able to send transactions with extremely low fees (20 Satoshi's per byte) and have them confirmed in under an hour. As SegWit continues to get adopted, this trend will continue with more transactions per block with low fees.

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it seems silly to have to say this but doubling the block size as needed and working on sidechains and lightning network are not mutually exclusive.  it's pretty simple: if most of the network agrees that blocks are full, then double the block size limit if current technology can handle it.  if the block size can't be doubled for technical reasons, then yes unveil the next iteration of whatever sidechain solution you have.

They can absolutely be worked on at the same time, but that doesn't mean they need to be implemented at the same time. A UASF is much less impactful on the network than a hard fork is. Again, you're making statements that aren't true. Blocks aren't full to the point where transactions aren't being confirmed in a timely fashion. Transaction fees aren't high. Most wallets miscalculate fee estimates and that's a bigger problem than fee competition is right now. The mempool, which as I said is a better indicator of a bottleneck, is not overloaded with unconfirmed transactions.

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again i think the VISA argument is arbitrary straw man but just to clarify -- in your scenario on the order of 10-100s of tx/sec are on-chain with "trust-less centralization" and on the order of 10,000s tx/sec are off-chain on lightning network hubs with "trust-based" centralization -- and that's ok?  where only a few percent of users can use bitcoin in a trustless manner?

You misunderstand my statement on trust-less versus trust-based. My reference to trust-based was in regards to VISA. Performing transactions over the VISA network requires that you trust them. They're the ultimate mediator of transactions. Transactions are reversible because of this and a lot of fraud occurs which becomes a large cost to VISA. This results in VISA charging large fees to merchants and therefore gives VISA a lot of power. Centralized hubs on the Lightning Network however are trust-less. Those hubs don't control the transactions that traverse through them. They only control which payment channels are set up with who. Furthermore, the Lightning Network can allow for additional anonymity that currently isn't present today with Bitcoin because transactions each payment channel that a transaction traverses is only aware of the intermediary route it is taking (similar to Tor), not necessarily the originator or final recipient.

Also, using the Lightning Network doesn't force you to also use centralized hubs. The two are exclusive of each other. You can still use the Lightning Network without using hubs. Again, it is all opt-in which gives the users options on how they'd like to use their money. This is a very good thing for adoption.

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nope, in my argument the tiny blocks are full as you say with lightning channel opening/closing tx, and the block reward is trending to zero.  difficulty however is not trending to zero, so miners are now mining at a loss because they're not capturing fees for the bulk of transactions, which are off-chain.  somewhere before this scenario occurs the miners and users will simply migrate to a chain with larger blocks so they can capture more tx fees.

How are miners not capturing fees with full blocks as you say? If blocks are full, then they'd be capturing a lot of fees. You're contradicting yourself. The percentage of total transactions that are off-chain is completely irrelevant here when talking about the fee economy for miners. If blocks are full, then miners are getting paid. The reverse of your scenario is much more likely to be true. If you have overly large blocks that are never full, then what would be the point of ever adding a fee to your transaction if it will get confirmed anyway? Vastly empty blocks is bad for the fee economy for miners.

I bolded the statement you just made there that makes absolutely no sense. It is highly contradictory of the entire argument that is ever had for larger blocks. Larger blocks result in lower fees because there is more space than is needed for transactions and therefore there is no reason to include a large fee with your transaction. With the Lightning Network, it enables the capability for micro-transactions to occur (since fees would be non-existent or negligible on the LN), and on-chain transactions where payment channels are opened and larger transactions are made that won't fit on the Lightning Network will have higher fees to accommodate the tighter block sizes.

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the fork has had >80% support since mid-june.  https://coin.dance/blocks/proposals

if segwit can't compete with 2MB blocks then perhaps the time isn't right for more intricate solutions, see my point above.  if bitcoin will exist for years there will be plenty of time to introduce these new wrinkles.  the conservative solution is simply increasing the block size now (by "now" i mean after segwit -- the really conservative solution would have been just 2MB) and in the meantime yes, by all means, continuing to work on all manner of "down the road" scaling solutions.

What do you mean if SegWit can't compete? SegWit had wide support right up until adoption and that support had to remain for a vast majority of blocks in order for it to be activated. Support for SegWit2X however has been declining a lot lately. The support numbers you're showing is just miner signaling (of which Bitmain is a heavy SegWit2X supporter) and miners don't own and dictate the entire network. How is a hard fork (with no replay protection) a more conservative solution than a UASF that was thoroughly tested and even saw exposure on another very similar blockchain (LTC)?? I've yet to hear of a defense for having a hardfork without replay protection.

shadow

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #532 on: October 31, 2017, 09:02:08 AM »
SegWit had wide support right up until adoption and that support had to remain for a vast majority of blocks in order for it to be activated. Support for SegWit2X however has been declining a lot lately. The support numbers you're showing is just miner signaling (of which Bitmain is a heavy SegWit2X supporter) and miners don't own and dictate the entire network. How is a hard fork (with no replay protection) a more conservative solution than a UASF that was thoroughly tested and even saw exposure on another very similar blockchain (LTC)?? I've yet to hear of a defense for having a hardfork without replay protection.

I'm not sure where you're getting your information from and how you're evaluating it. Most of your statements, like above, are inaccurate.

Segwit did not have the support it needed for adoption until the majority of the business and mining community got together and signed the New York agreement to first upgrade the protocol to segwit and then later to 2mb. This was the only way segwit passed.

https://medium.com/@DCGco/bitcoin-scaling-agreement-at-consensus-2017-133521fe9a77

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We agree to immediately support the following parallel upgrades to the bitcoin protocol, which will be deployed simultaneously and based on the original Segwit2Mb proposal:

    Activate Segregated Witness at an 80% threshold, signaling at bit 4
    Activate a 2 MB hard fork within six months

Many prominent companies (Coinbase, blockchain.info, BitPay, Xap, Jaxx, Circle, bitcoin.com, etc) signed this agreement and now they are being propagandized against by core blockstream as dangerous to bitcoin. It's very ironic because these are the very companies that help users to acquire and use bitcoin. They have invested significant amounts of time and finances into building up the infrastructure, very much skin in the game. They are deeply enmeshed in the entire space. Now, "they're enemies of bitcoin".



I have nothing further to say about the matter. I just hope newcomers reading the debate don't become misled by misinformation.

In Satoshi's words: "If you don't believe me or don't get it, I don't have time to try to convince you, sorry."


lifeanon269

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #533 on: October 31, 2017, 11:51:59 AM »
I'm not sure where you're getting your information from and how you're evaluating it. Most of your statements, like above, are inaccurate.

Segwit did not have the support it needed for adoption until the majority of the business and mining community got together and signed the New York agreement to first upgrade the protocol to segwit and then later to 2mb. This was the only way segwit passed.

https://medium.com/@DCGco/bitcoin-scaling-agreement-at-consensus-2017-133521fe9a77

Like I said, I support a block size increase to 2MB, just not now and not how it is being implemented currently. I don't believe anything I've said is untrue and if you feel I am being misleading, that is not my intention.

However, you call me misleading and then you link to the NYA agreement as if it was some binding agreement among all those involved with Bitcoin is extremely misleading. The NYA agreement was a closed door meeting involving the Digital Currency Group which is really just a group of financial investors and venture capitalists that claim to represent the overall Bitcoin community (http://dcg.co/who-we-are/). That meeting didn't involve anyone from the development team that has worked years on developing Bitcoin. Anyone who values the concept that Bitcoin is resistant to influential entities from manipulating the direction that Bitcoin takes should be troubled by the concept that a small group of investors were able to push a plan forward in the way that they did.

Many of the original companies that signed onto the NYA back in spring after it was announced simply signed on because they wanted to see progress in scaling Bitcoin. I use Coinbase heavily (probably more so than most since I use the Shift debit card for all my daily transactions that is tied to their system). I don't think they are evil and the same goes for many of those companies. I just think they're stuck in a very difficult position. Ultimately their latest announcement regarding how they're going to handle the fork is one of their few options they have without resulting in countless lawsuits if they decided not to support one chain or the other. I was supportive of the NYA agreement at the time as well. I remember when the news came out that I got really excited about the future of Bitcoin and that finally it would be scaled appropriately after years of debate.

Things have changed for numerous reasons since then however. SegWit adoption is only at around ~8% currently. The original Segwit2MB proposal was heavily in favor of SegWit adoption and seeing that in action prior to a 2MB hard fork. It also suggested that 95% of the hashrate signal for the hard fork and that it should be delayed if necessary. The fact that many companies have for a long time used "high fees" as a reason to support SegWit2MB and yet many of those same companies have yet to implement SegWit in their platforms before moving on with a hard fork shows that ultimately they didn't care about actually adopting SegWit to begin with and they certainly didn't care about reducing fees.

I work in IT and never have I ever seen a system get put into production unless we knew that there would be absolutely minimal impact in doing so. This is a $100 billion market now. That can't be said with how the SegWit2X/BTC1 fork has been implemented. As I've said numerous times, a lack of replay protection, naming it BTC1 (confusing users), lack of active development, limited testing, transaction spamming, declining support signaling leading up to the fork date; all of these things make performing a hard fork at this time extremely risky. This is especially true given the fact that additional adoption of SegWit to allow for more transactions per block is an immediate win that can take place without having any impact on the network at all while at the same time introduce additional benefits like

Anyway, like I said, I think we all agree on what needs to happen to Bitcoin to scale it into the future, we just ultimately disagree on the timing on when those things should occur.

My original comment that started this debate was simply that Bitcoin core devs are not evil. I find it odd that you talk about how others are calling companies supportive of SegWit2X as "enemies of bitcoin" and yet there are some in this thread that have ostracized the core dev team as "evil" themselves. I still stand by that statement that they're not evil and you can read this thread by one of the core devs that discusses some of the advances they've made that we should all be grateful for if we want to see Bitcoin succeed.

https://medium.com/@jfnewbery/what-did-bitcoin-core-contributors-ever-do-for-us-39fc2fedb5ef

trollwithamustache

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #534 on: October 31, 2017, 01:33:11 PM »
meh, all this old man arguing about forks is boring.

lets spice this S%$(* with derivatives.

https://www.cnbc.com/2017/10/31/cme-plans-to-launch-bitcoin-futures-by-year-end.html

this is like holy guacamole exciting for BTC holders. It makes the Alt coins pretty alternative if you can sling your BTC around on the CME like granddad used to do with his pork bellies.

Tonyahu

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #535 on: October 31, 2017, 01:57:00 PM »
You guys really had to bring the block weight debate in here huh lol.

Glad everyone is participating and contributing.

QUESTION: Do you see Bitcoin out-performing Alts next year?

It's an interesting discussion to be had given that Hedge Funds are rapidly moving into the space and now we already have 2 derivative providers. I personally still feel Alts (the quality ones) will outperform but the debate can definitely be had for the opposing view.

trollwithamustache

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #536 on: October 31, 2017, 02:42:21 PM »
The liquidity on any individual BTC exchange just isn't that great compared to markets my grandfather would accept as "real".  With CME futures and hedge fund activity you will see a hell of a lot more volume of BTC being moved or needed for hedging ect than any Alt coin will have.

Plus, the futures let you play BTC without forcing a BTC transaction, so the big boys can sling a billion dollars/euros/whatever around amongst future months and it doesn't affect the network. Day after Day of this.

liquidity begets respectability. Or, maybe it will let enough money rush in to really get us to a bubble.


lifeanon269

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #537 on: November 01, 2017, 07:36:11 AM »
The CME futures announcement worries me. I knew it was only a matter of time before Bitcoin derivatives would start getting traded, but it is still so early in the game without a $100 billion dollar market cap. I was hoping that derivatives would be supplemented to Bitcoin's growth, but at this stage it could end up driving growth which I don't think is good.

My post above about the global financial crisis was in direct regards to the derivative manipulation that happens on Wall Street. Also, futures won't actually create demand for Bitcoin today, they'll just be trading "paper bitcoin" today. I can foresee hundreds of thousands of paper bitcoin being traded where only a fraction of that is backed up by actual bitcoin on the blockchain. That's dangerous. I'm curious to see how this ends up getting regulated.

The whole point about bitcoin is that it can't be counterfeit. If you hold bitcoin on the blockchain, then you know it is 100% real. That's not the case with derivatives.

Either way, the news is good for bitcoin however as it just gives it more press and legitimacy to those who actually trade in the real deal.

trollwithamustache

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #538 on: November 01, 2017, 08:19:39 AM »
why are futures so worrying to you?

Sure, the futures contract for a given forward month may have a huge number of open contracts or a small number.  There will be a self correcting effect if to many contracts are out there and traders are nervous about getting BTC to cover them, they simply buy/sell as appropriate to close the contracts.  Most commodity contracts are closed out like this prior to delivery.

Derivatives are dangerous for the institution issuing them if a counter party cannot pay and they end up with a very very highly leveraged position on a security. This is neither good nor bad for the underlying security.  When derivatives trigger indexes to be bought and sold, this creates volume that stock following computers pick up on and amplify.  But, since the Merc future is the only place those kind of guys can trade, how can they wreck the underlying?


This all may be hyperbole and have no effect if the BTC future is USD settled off an index. If that's the case, institutions may not really trade the futures since they cannot hold underlying to offset positions.

lifeanon269

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #539 on: November 01, 2017, 08:46:41 AM »
why are futures so worrying to you?

Sure, the futures contract for a given forward month may have a huge number of open contracts or a small number.  There will be a self correcting effect if to many contracts are out there and traders are nervous about getting BTC to cover them, they simply buy/sell as appropriate to close the contracts.  Most commodity contracts are closed out like this prior to delivery.

Derivatives are dangerous for the institution issuing them if a counter party cannot pay and they end up with a very very highly leveraged position on a security. This is neither good nor bad for the underlying security.  When derivatives trigger indexes to be bought and sold, this creates volume that stock following computers pick up on and amplify.  But, since the Merc future is the only place those kind of guys can trade, how can they wreck the underlying?


This all may be hyperbole and have no effect if the BTC future is USD settled off an index. If that's the case, institutions may not really trade the futures since they cannot hold underlying to offset positions.

Read the Rolling Stone article above that I link to. It is an excellent read with eye-opening info on how Wall Street handles derivatives.

On paper it may seem like a good thing, but the truth of the matter is that with the corruption on Wall Street, there will likely be 10 "paper bitcoins" being traded for every one bitcoin that is actually on-chain. People might think their derivative is backed by real bitcoins, but the reality is that they probably aren't.

Again, I'm not saying this will be the case with CMEs futures contracts. I'm just saying that going down the derivative road will likely lead this to be true considering that it is true for just about everything else that is traded on Wall Street; oil, soy beans, gold, even US Treasury bonds.

Holding bitcoin on-chain will keep you safe since they can't be counterfeit, but I'd stay as far away from holding any bitcoin derivative of any kind as possible.

"Your key, your bitcoin. Not your key, not your bitcoin."

trollwithamustache

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #540 on: November 02, 2017, 03:59:11 PM »
It appears the futures will be dollar settled, so while at times, the number of open contracts could exceed the number of bitcoins, the settlement of contracts won't force BTC transactions.

maizeman

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #541 on: November 02, 2017, 07:07:04 PM »
So what's the use case of buying or selling a bitcoin future rather than a bitcoin itself? The hedging purposes of futures make sense to me for things that are constantly being produced and where industrial buyers know they will need to purchase fixed amounts at regular timepoints (like oil or porkbellies), but I still cannot wrap my head around this for cytocurrencies.

Are they significant futures markets for euros or RMB? If so, what do people use them for?

hgjjgkj

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #542 on: November 02, 2017, 10:49:42 PM »
Two Questions

1) Is there money in BTC exchange arb? Buying low on one exchange and selling on another?

2) For BTC investors who have seen recent high gains, how do you plan you strategy going forward? Do you take gains and put them in something more stable? How do you think about incremental additional investments when this will now raise your cost basis a ton?

lifeanon269

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #543 on: November 03, 2017, 07:18:45 AM »
IF they pass the law proposal that you can spend like $600 a transaction tax free, I might use it to pay my household bills or buy more mining hardware.

That is a big IF! I would LOVE for that legislation to pass. If it did, bitcoin would become my main tax-free spending money in my early retirement years while my pre-tax accounts get laddered into my Roth.

MVal

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #544 on: November 03, 2017, 08:42:37 AM »
Is anyone here using Bitconnect? I've got a little Bitcoin on there making me a few dollars a week and I'm planning on doing the continuous re-lending thing for a while and see how it goes.

Also, who is buying more Bitcoin before the hard fork this month? I'm hesitant to with Bitcoin rallying like it is right now, but I'm lured by the prospect of "doubling" my coin with the Segwit2x thing.
Proverbs 13:4
The soul of the sluggard craves and gets nothing, but the soul of the diligent is made fat.

Proverbs 13:11
Wealth obtained by fraud dwindles, but the one who gathers by labor increases it.

https://tickers.TickerFactory.com/ezt/t/wGp3WGH/savings.png

shadow

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #545 on: November 03, 2017, 03:18:38 PM »
Bitconnect is a ponzi.

maizeman

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #546 on: November 03, 2017, 03:31:33 PM »
So what's the use case of buying or selling a bitcoin future rather than a bitcoin itself? The hedging purposes of futures make sense to me for things that are constantly being produced and where industrial buyers know they will need to purchase fixed amounts at regular timepoints (like oil or porkbellies), but I still cannot wrap my head around this for cytocurrencies.

Are they significant futures markets for euros or RMB? If so, what do people use them for?

The two main areas I know of.
1. Leverage... You can buy A LOT of bets for (call) or against (put) which sell in lots of 100 for very cheap. Most of the cost is time value... So if BTC moves $1 in an hour (very possible) you can make $100 with a relatively small investment. I am not sure what the premium is going to be since BTC itself is so scarce, but my guess is it will be fractionalized up the a**.
2. Gets around rules to allow trading on the main exchanges "pretend BTC" which is really cash based and has no real conneciton with reality without being an accredited investor so everyone can buy in.

This may either propel BTC to stupid crazy high prices fast because of the hype or stabalize the price... I am not sure which way it will go.

I thought there was a difference between futures contracts and options contracts (puts/calls). With futures you generally pay "full price" now, for delivery at some point in the future. If you look at the pricing for futures contracts on corn or oil or porkbellies they tend to be in the neighborhood as current prices (perhaps a bit higher or a bit lower based on what the market expects future demand to look like). But okay, if we're talking about options contracts rather than futures, I agree with you on point #1, you can certainly lever up a lot more with options than with the underlying asset and as a result make (or lose) a lot more money with a lot less starting capital.

For #2, if the trading is entirely cash based and a lot of the buyers and sellers on non-accredited investors it seems like the counter party risk would be through the roof. Even if you made a killing on bitcoin options contracts, is whoever you bet against actually going to have the money to pay?

Anyway, whatever I think of the rationality of the motivations, I at least understand what the motivations might be now, thanks!

Tonyahu

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #547 on: November 06, 2017, 11:48:29 AM »
Bitconnect is a ponzi.

This is 100% correct. It's officially blocked and banned by Malware Bytes as well.

http://cryptocougar.com/malwarebytes-anti-malware-software-added-bitconnect-blocked-website-list/

LMFAO, please watch this. https://www.youtube.com/watch?v=kbR1SXIje1U

lifeanon269

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #548 on: November 08, 2017, 11:38:59 AM »
The Segwit2X hardfork has been suspended this month. Bitcoin rallies! There was much rejoicing! I'm happy there will not be a split in the community.

Edit: "hardfork" not "hardwork"...stupid autocorrect.
« Last Edit: November 08, 2017, 09:09:45 PM by lifeanon269 »

powskier

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #549 on: November 08, 2017, 03:49:03 PM »

LMFAO, please watch this. https://www.youtube.com/watch?v=kbR1SXIje1U

Looks like another well known non tax paying scam. It's amazing how gullible people can be.