Author Topic: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion  (Read 180737 times)

Telecaster

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #950 on: February 13, 2018, 06:51:09 PM »

I get it, you and LAS and tele and sol are all fully anti-crypto and unwilling to absorb any new information at this point.

For a guy who complains about ad ad hominems, you sure like to dish them out.  Go back and find an exactly where I attacked you, and not your argument.  Hint:  I only attacked your arguments.

Quote from: surf
The anti-crypto contingent stomped me into the ground, one guy literally said he was punching me in the face, replied with straw man attacks about child pornographers, without parsing ANY of the high quality information I provided. So YEAH, i'm a little frustrated that i spent hours trying to help and got this in return.

A "straw man" argument is misrepresenting someone's position in order to make it easier to attack.  The child pornographers bit wasn't a straw man, because it wasn't your argument.  It was my argument.  I was using hyperbole to make a point, namely there is very little legitimate use of Bitcoin.  Since your whole premise is based on the notion there will one day be wide adoption of Bitcoin, or at least some form of crypto, that's a critical point. 

Here's an example of a straw man:

Quote from: Surf
I won't debate whether the USD works perfectly or whether people are actually using BTC.

I never said the USD works perfectly.  You misrepresented what I said so you could avoid my point.  I just said that if you have concerns about hyperinflation, it makes no sense to invest in something that is currently experiencing hyperinflation.    That's just common sense, right?  But if that point is wrong, it would have a perfect time for you to explain how you arrived at that conclusion.  Showing your work, in other words.  Instead you just ran away. 

I appreciate it when some points out my fly is open.  If someone points out I'm doing something wrong, they are doing me a favor because then I can learn the right way to do it. 

Quote from: surf
It is your right to put your money where you please.  Other members of the community may decide to look into crypto and I was trying to give high quality info to reduce the number of people who got burned making completely avoidable errors and help any who were interested in making more educated choices.  I got nowhere near that point because I got shouted down instantly.

You got disagreed with instantly.   But instead of responding to those disagreements, you lashed out at the people disagreeing with you.   

That said, I'm here for the same reasons as you.  Help people avoid making mistakes. 

Surf

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #951 on: February 13, 2018, 09:08:09 PM »
All right, I've got an honest question for you surf (but if you choose not to reply and bow out of the thread I understand).

You've stated that you believe Bitcoin should be people's primary crypto investment because:
A) it is the coin-of-reference in the crypto world. Eg. people buy Bitcoin with USD, and then trade Bitcoin for other alts.
B) even if Bitcoin is not the long-term cryptocurrency the transition would be gradual, and that people should re-evaluate as more information comes to light.

It seems to me that A is entirely for historical reasons and is becoming less relevant all the time, and that B is not necessarily true at all.

Bitcoin is the coin-of-reference because it was first and was always the "biggest" (in mindshare at least) even after others entered the market. So the banked exchanges allowed you to purchase Bitcoin, and the unbanked exchanges gave you the opportunity to trade all the others. However that's becoming less true as time goes on. Coinbase for example now allows you to directly purchase Bitcoin, Etherium, and Litecoin. I can't imagine that that list will ever shrink; it doesn't take much effort to continue allowing already-written code to run. And more options will be added.

It seems to me that Bitcoin has no use other than as a coin-of-reference at the moment. Very few actual purchases are transacted through Bitcoin, and the merchant support for alts will grow. There are already other coins that are faster and cheaper by design than Bitcoin could ever be. Merchants will never price things directly in Bitcoin because of its volatility.

It seems to me that Bitcoin is already useless and has no future, and the only thing preventing its plummet is the mob mentality agreeing that it's valuable. And one day that will probably change, and everyone will abandon Bitcoin and jump to the New Thing (and then probably eventually the one after that, and the one after that, etc). Maybe it will be Litecoin, or Bitcoin Cash, or Dogecoin (probably not, but I'm rooting for that little guy), or Ripple, or something as-yet undeveloped. But it should eventually happen.

And when it does, there's no reason to think that it would be (B) slow or gradual and allow people the opportunity to rebalance their "investments". Crypto crashes happen incredibly quickly. Selling everything in the middle of a panic crash is usually something everyone tells you is incredibly foolish. Except it's not in this case. A crash in Bitcoin while another stronger coin surges probably would be the trigger that changes the mob mentality. If that happens, and people collectively decide that Litecoin (or whatever) is the new Bitcoin, then not selling in the middle of the crash (assuming you can find anyone to buy at any price) would be the wrong choice and would leave you owning a lot of nothing, forever.

So I guess my question is, why am I wrong?

Excellent points Sherr! 

On a periodic basis I re-evaluate if a bitcoin hold is still a logical proposition, I currently believe it is a profitable long term bet, but it is an admittedly risky one.  Healthy amounts of doubt about one's positions lead to analytic revision of incoming data.

A) bitcoin as coin-of-reference: it is more than just mechanics and btc facilitating transactions to other coins.

crypto traders value their investments using bitcoin as their frame of reference.  Entire crypto portfolios are valued by how much each alt is worth when it is converted to bitcoin, and when things get rough, or btc gets bullish that is what they do.  The "shitcoin" speculation of obscure alts within the crypto community is entirely based around creating an increased amount of bitcoin for the speculator/ TA trader.
 
There are other coins such as Eth that seek to offer a different type of value which can and do exist in parallel with btc.  They compete for investor money in the short term but occupy different tech territory in a longer timeline.  BTC currently cannot execute smart contracts the way eth can(though this is purportedly in the works), and eth is centralized and mutable and much more suitable as a platform for decentralized app development and an overall platform for incorporating blockchain tech esp into the corporate realm, rather than a global financial instrument.

The value of a blockchain can be best understood through metcalfe's law - the value of a communications network is the square of the participants.  This explains neatly (if imperfectly) why twitter is worth billions but the group chat with me and my aunt and grandma is worth nothing, other than to the 3 of us.

Market cap is misleading from this perspective. For example, bcash appears overvalued, it has a market cap 1/7th of btc.   

Number of transactions per day is one gauge of the overall participation rate on a blockchain. 

Bcash network averages roughly 20k transactions per day.  Bitcoin averages roughly 200k transactions per day.  Given a roughly equal number of users making transactions (which may be off by a moderate margin in either direction) Metcalfe's law indicates that this is not a 10 fold difference, rather an exponential difference in network utility.   The price gap is only a factor of 7, while from a value standpoint bitcoin may provide 100x utility(give or take reasonable calculation errors) over bcash!

This is purely on the network value, ignoring the infrastructure advantage bitcoin has over bcash(I can buy plane tickets or book hotels or buy goods online with btc, or convert to USD at bitcoin atms through the US, while bcash is much more difficult to spend. BTC is also legal tender in Japan) or the scaling issues bcash has - if it averaged the same number of transactions per day as bitcoin the fees would be higher by a factor of 2-4x depending on assumptions used.  Further this ignores the substantial developer community working on improving bitcoin protocols which is a large advantage over bcash's niche support.

Core features of bitcoins utility such as decentralization, immutability, and the game theory basis that maintains the integrity of the system originate from its design and utilization of Proof of Work. 
The microsoft blockchain analysis cited earlier in the thread assessed that alternate blockchains to btc sacrificed either decentralization or immutability or both in order to obtain advantages in speed and efficiency.  A SQL database on a server somewhere would vastly outperform bitcoin from a performance standpoint, but would have neither decentralization nor immutability and thus there would be no reason to trust it to authorize financial transactions.
 
Microsoft's conclusion was that second layer protocols to the bitcoin blockchain are the best solution for scaling without sacrificing the underlying fundamentals of btc and by and large the crypto community agrees.

B)  We don't know whether a theoretical flip to another dominant coin would be gradual or not.  If bitcoin were a valueless system that noone actually used then certainly the possibility for an extremely fast crash and replacement would be not just possible but probable.  Due to metcalfe's law if participation rate on the blockchains are 0 then all their values are 0 so substituting one for another should be probable and statistically happen by chance regularly.  That this has never happened or even come close certainly indicates that there are real humans obtaining real value and metcalfe's law has at least partial validity.

Humans are creatures of habit and as this entire crypto movement shows are slow to make change.  All the users out there utilizing btc for various reasons would have to abandon it at once, in unison.  That makes the "sudden plunge to 0" outcome less and less likely the more users are added to the base and the networks utility grows.  It is not impossible or even improbable, so "don't invest money you can't afford to lose" must be paramount.

It is important to consider that it can be very true that you personally have no use for bitcoin in its current form, and at the same time be true that people in other circumstances consider it invaluable.  And that in its future forms you may benefit from it substantially in either a passive or active capacity, or not, depending on its ultimate use cases.  The likelihoods of those various scenarios are where buying bitcoin to hold long term come into play.  Bitcoin's equilibrium value will depend directly on how many users it stabilizes at and only the future will tell what that is.

I will continue to keep tabs on the crypto space and will be prepared to move on from btc if or when such a time comes.  I will also be prepared to take small portions of btc and allocate them to potential tech that offers paradigm-shift style upgrades over bitcoin in the rare event that they come along.  I have only researched a couple dozen alts (there are 1500+) and acquired precious few.

As I proofread this post and review yours to make sure I responded to the important ideas you raised, it occurs to me that I may be Charlie Brown with the football here, and your entire post may have actually been an elaborate dismissal.   Fingers crossed!

Surf

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #952 on: February 13, 2018, 09:28:21 PM »

So I applaud the enthusiasm, but the planning was lacking and the execution fell flat.  Helpful posters with thoughtful content are always welcome, but you have to know your audience.  You'd get much the same reaction if you started out with a 5k word essay on which corvette is best for your mid life crisis, or the best city to buy a mcmansion, or the benefits of loan sharking.  Cryptocurrencies are just antithetical to the MMM philosophy. 

Surf, you write well and are welcome to join the community.  Would you still be interested if you were never allowed to talk about crypto again, or is that your only interest?  Because paid shills are usually single topic posters, which is what you appear to be now.

I Lol'd at the first part.  Well played sir.  The speculative frenzy surrounding cryptocurrencies is completely antithetical to the MMM philosophy, agreed.   The underlying technology is separate and it's one of the reasons it drives me nuts when my mom calls and says her friend told her to buy Ripple.(Anyone interested do some googling Ripple is basically everything bitcoin is not, and not in a good way)

FWIW there's no such thing as "paid shills" because there is no bitcoin corporation.

Finally I am excited to be a part of this community and if a mod forbade me from posting in crypto threads I would happily participate elsewhere.  FWIW I used the search function to look for existing threads on topics I have other expertise at, like surfing, with no success.  A finance forum is mostly about finance, I'm absorbing traditional finance info from you fine folks and have little to offer in that regard.  I guess I could start a thread asking for situation-specific help but I always feel weird leeching benefit from a community without contributing to it first.

Also, thank you for treating me like a human and not a troglodyte. It's refreshing.

Surf

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #953 on: February 13, 2018, 09:42:42 PM »

So you're building your 'stash, paid down your high interest debt, and living frugally. So why invest in crypto?

Cryptocurrencies' main role in a modern portfolio is diversification

Facepunch.

If you assume that crypto currencies are actually currencies (which is a stretch, but let's assume that for now), then crypto should replace or supplement the portion of your portfolio that is currently held in non-dollar currencies.  That portion of your portfolio should equal exactly zero to begin with.  Unless you are currency speculator, but that's speculating, not investing. 

Your whole analysis breaks down breaks because you are assuming there is such a thing as adoption of Bitcoin.  There isn't.  Almost no one uses it for anything.   The only people who need Bitcoin are child pornographers and drug dealers.  For everybody else, the USD works perfectly.  And even if you are a child pornographer or drug dealer, you still don't need Bitcoin.  You could use Litecoin, or Dogecoin, or Etherium, or Fidleius, or any of a zillion cryptos out there. 

No one, repeat no one, invests in Bitcoin.  People speculate in Bitcoin.  If you want to speculate, more power to ya.  But you are a damn fool if you think speculation is the same as diversification.

I bolded the parts where you either insulted me directly, said "USD works perfectly" or made up an argument that btc's only use case is child pornographers/drug dealers.

Also Facepunch is not a useful way to begin a reasoned discussion.

Your reply was the FIRST one to a logic-driven analysis trying to open up high quality discussion following the parameters set by the mod on the first page.  That I foolishly spent hours on and literally lost sleep to write.

I've done my best to keep my replies civil but the wheels start to fall off after awhile. Helping others is a high value priority for me and every time I try to make it better and it gets worse and I see replies treating me like some sort of scum it is painful. I'm only still here "complaining" and changing my sweaty shirt regularly because I'm trying to not completely throw in the towel on providing some value to those who might be reading but not posting, as I often do.

Also it's really hard not to reply when people are harsh and then lord it over you when you give up. I'm human.

Surf

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #954 on: February 13, 2018, 09:49:05 PM »
Again there's this continuous undercurrent taht I'm some sort of outsider with assumptions about ulterior motives and whether or not I have hte right to contribute here that is xenophobic and disturbing.

Haha! Xenophobic?!? Really? People disagreeing with you is actually allowed here, you know. You're not required to have a huge post count to be taken seriously, but when you post something that almost nobody agrees with, as your first post, and then you *whine* about things like xenophobia (after repeatedly claiming you aren't going to participate in the discussion anymore, then coming right back to whine more) and misinterpret a commonly used term from the forum... how do you think you end up looking?

-W

You're right, I do not take harsh criticism well.

Also I knew as soon as I was being all dramatic writing about the "Facepunch" comment that it was going to be mis interpreted as lack of understanding of the community.  It's hard to explain but I was so stunned that the first word of the first reply was an allusion to physical violence to me.  Even though I knew it was within the mustachian spirit(if certainly not kind), that I literally punched myself in the face putting my wetsuit on I was so shaken up. I've done that like twice in my entire life. 

(for non-surfers: when you pull on a thick wetsuit you have to grab the shoulder cuff area and stuff your arm through it.  If you pull too hard on the shoulder section as you slide your arm through, and simultaneously lose your grip, you can accidentally punch yourself in the face.  My sweaty palms didn't help I'm sure.)

I was having a bit of a dramatic moment as my hope to bring logical value and discussion to the messy back-and-forth was completing its implosions.  My apologies.

shadow

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #955 on: February 13, 2018, 09:57:39 PM »
crypto traders value their investments using bitcoin as their frame of reference.  Entire crypto portfolios are valued by how much each alt is worth when it is converted to bitcoin, and when things get rough, or btc gets bullish that is what they do.  The "shitcoin" speculation of obscure alts within the crypto community is entirely based around creating an increased amount of bitcoin for the speculator/ TA trader.

You can't qualify this for all crypto traders. These statements are not wholly true. Many people do not acquire other coins to increase their bitcoin stack.
 
Quote

There are other coins such as Eth that seek to offer a different type of value which can and do exist in parallel with btc.  They compete for investor money in the short term but occupy different tech territory in a longer timeline.  BTC currently cannot execute smart contracts the way eth can(though this is purportedly in the works), and eth is centralized and mutable and much more suitable as a platform for decentralized app development and an overall platform for incorporating blockchain tech esp into the corporate realm, rather than a global financial instrument.

Eth is not centralized. Eth is as immutable as bitcoin. Your statements about eth are untrue.

Quote
The value of a blockchain can be best understood through metcalfe's law - the value of a communications network is the square of the participants.  This explains neatly (if imperfectly) why twitter is worth billions but the group chat with me and my aunt and grandma is worth nothing, other than to the 3 of us.

Network effects are meaningless metric for bitcoin relative to other blockchains. In blockchains, network effect can be replicated and is not exclusive to bitcoin. Network effects, in the current phase of crypto, are also very fleeting.

Quote
Market cap is misleading from this perspective. For example, bcash appears overvalued, it has a market cap 1/7th of btc.   

Number of transactions per day is one gauge of the overall participation rate on a blockchain. 

Bcash network averages roughly 20k transactions per day.  Bitcoin averages roughly 200k transactions per day.  Given a roughly equal number of users making transactions (which may be off by a moderate margin in either direction) Metcalfe's law indicates that this is not a 10 fold difference, rather an exponential difference in network utility.   The price gap is only a factor of 7, while from a value standpoint bitcoin may provide 100x utility(give or take reasonable calculation errors) over bcash!

These are assumptions and are not conclusive.

Quote
The microsoft blockchain analysis cited earlier in the thread assessed that alternate blockchains to btc sacrificed either decentralization or immutability or both in order to obtain advantages in speed and efficiency.  A SQL database on a server somewhere would vastly outperform bitcoin from a performance standpoint, but would have neither decentralization nor immutability and thus there would be no reason to trust it to authorize financial transactions.
 
Microsoft's conclusion was that second layer protocols to the bitcoin blockchain are the best solution for scaling without sacrificing the underlying fundamentals of btc and by and large the crypto community agrees.

It's not clear yet how or which ones microsoft will coordinate layer 2 protocols on. "Some public blockchains (Bitcoin [BTC], Ethereum, Litecoin, to name a select few) provide a solid foundation for rooting DIDs, recording DPKI operations, and anchoring attestations....To overcome these technical barriers, we are collaborating on decentralized Layer 2 protocols that run atop these public blockchains to achieve global scale, while preserving the attributes of a world class DID system."

https://cloudblogs.microsoft.com/enterprisemobility/2018/02/12/decentralized-digital-identities-and-blockchain-the-future-as-we-see-it/

Surf

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #956 on: February 13, 2018, 10:04:04 PM »
I just said that if you have concerns about hyperinflation, it makes no sense to invest in something that is currently experiencing hyperinflation.    That's just common sense, right?  But if that point is wrong, it would have a perfect time for you to explain how you arrived at that conclusion.  Showing your work, in other words.  Instead you just ran away. 

My apologies, I didn't think you were actually trying to raise that as a logical point of discussion.  I did run away after all the facepunching. Actually, I went surfing. It was nice, and helped me clear my head.

Agreed, trying to protect from hyperinflation by investing in something hyperinflationary would make no sense whatsoever.

I can't tell if you really want me to answer this or if you are just throwing me a bone. Here goes:

Bitcoin experienced a speculative frenzy-bubble pop cycle at the end of Q4 '17 and beginning of Q1 '18. This has happened on multiple occasions across its history.
 
Using a tiny sample such as the prior 8 weeks of purchasing power loss without accounting for coin supply/cap, long term trends, or analysis of how a diminishing-supply, universally accessible currency would behave in the event of a government-backed currency's failure appeared to be willful ignorance and signaled an end to logical debate.  I guess I misinterpreted?

shadow

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #957 on: February 13, 2018, 10:05:58 PM »
The underlying technology is separate and it's one of the reasons it drives me nuts when my mom calls and says her friend told her to buy Ripple.(Anyone interested do some googling Ripple is basically everything bitcoin is not, and not in a good way)

If there is no token and it's missing something that replicates nakamoto consensus, I don't really consider it blockchain; with a decentralized, secured, immutable ledger. Many things seem to masquerade as blockchain or crypto when they aren't. The underlying technology does not need to be a "currency" but it does require a token.

Also, I'm not defending ripple. I've debated about it before and do not understand value in it.
« Last Edit: February 13, 2018, 10:08:12 PM by shadow »

sol

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #958 on: February 13, 2018, 10:08:07 PM »
FWIW there's no such thing as "paid shills" because there is no bitcoin corporation.

That's a terribly unconvincing argument, in this specific instance.

Because all of the easy money in cryptos is built around speculation, and speculation is fostered by internet forums.  We already know that small bands of active crypto posters on reddit have deliberately and repeatedly manipulated public sentiment about specific altcoins immediately after converting their holdings.  It's classic pump and dump.  Buy into ripple, have three respected (but relatively anonymous and apparently unaffiliated) internet posters spend a week talking about how awesome ripple is, and then sell out of ripple at 50% gains.  Rinse and repeat for Monero, and Litecoin, and whatever else you think you can convince people to buy.  This sort of coordinated market manipulation has been hugely profitable for a core group of early adopters, because so much of the crypto market is based on internet rumors anyway.  How do you think ~40 internet-famous 20-somethings each turned $10k into $50m in two years?  It sure wasn't riding BTC up and down.  They got in and out of the crazy cycles they helped to control.

So you don't need a bitcoin corporation to be a paid shill, because you can be an independent shill.  Crypto markets are so fragile, so volatile, that it only takes a handful of thoughtful and well educated writers to "generate" a billion dollars in market cap in a few weeks time.  There is no underlying revenue stream on which to base valuations, so it's purely 100% speculation and rumor.  Those can be manufactured by people like you.  All discussion of the technology itself is just smoke. 

Any time you (anyone, not you specifically) promote a coin that you hold, you are playing this game on a small scale.  If you're doing it with big money, or in coordination with other internet personas, then you're playing it on a grand scale.  This stuff is blatantly illegal when wall street does it, but crypto is still the wild wild west. 

That's not a good thing, the west was ugly.

astvilla

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #959 on: February 13, 2018, 10:10:38 PM »
Thank god I did not jump on this crypto train.

I don't know what it is, I don't know how to use it, I don't know anyone who actually uses it, I don't know what the practical use of it is. I don't understand it, so I won't put hard earned USD backed by strongest economy and military in history of mankind on something I don't know.

I know a lot of people aren't smart enough to use it or how to use it or how it works like me.

And it seems there's always some new crypto coming out, what are you supposed to use? Do vendors accept? I don't know if you can even use this in daily life. Can you tax it? To me this crypto is a bad idea right now. Maybe in the far future may work.

Surf

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #960 on: February 13, 2018, 10:47:19 PM »
crypto traders value their investments using bitcoin as their frame of reference.  Entire crypto portfolios are valued by how much each alt is worth when it is converted to bitcoin, and when things get rough, or btc gets bullish that is what they do.  The "shitcoin" speculation of obscure alts within the crypto community is entirely based around creating an increased amount of bitcoin for the speculator/ TA trader.

You can't qualify this for all crypto traders. These statements are not wholly true. Many people do not acquire other coins to increase their bitcoin stack.

You are correct, these statements are not wholly true, and I should have phrased them as such.

I edited that section several times and for brevity cut off the sections describing how many coins have devoted followers who have no desire to own any other coin.  My observations were made based on the (admittedly limited) cross section of social media crypto trading "experts" and the replies of their followers(many have hundreds of thousands of followers) and from the short 2 to 3-degrees-of-separation from me out to(again limited) acquaintances in the crypto community.

There are distinctly different segments of the crypto population from HODLers of various coins to TA traders to social media wizards to my aunt calling to tell me her friend bought cardano and it's awesome and I should buy some - speculative noise.


Quote

There are other coins such as Eth that seek to offer a different type of value which can and do exist in parallel with btc.  They compete for investor money in the short term but occupy different tech territory in a longer timeline.  BTC currently cannot execute smart contracts the way eth can(though this is purportedly in the works), and eth is centralized and mutable and much more suitable as a platform for decentralized app development and an overall platform for incorporating blockchain tech esp into the corporate realm, rather than a global financial instrument.

Eth is not centralized. Eth is as immutable as bitcoin. Your statements about eth are untrue.

Apologies for the terminology error.  Eth is mechanistically decentralized in that it is supported by a global community of  miners. 

Eth is politically centralized in that one private entity, The Ethereum Foundation, which has no distributed consensus mechanism for decision making, has authority over it. Which they have used to alter the blockchain, see the DAO hard fork:

https://www.change.org/p/ethereum-hard-fork-ethereum-to-revert-the-hack-of-the-dao

Yes, Vitalik Buterin has said he only did it because the tech was nascent.  If it's possible for an individual entity to make such a move, then no, the ledger is not immutable, no matter how much he says he won't do it again.  If you have evidence to the contrary I would be heartened to hear it as I think Eth has tremendous potential.

Quote
The value of a blockchain can be best understood through metcalfe's law - the value of a communications network is the square of the participants.  This explains neatly (if imperfectly) why twitter is worth billions but the group chat with me and my aunt and grandma is worth nothing, other than to the 3 of us.

Network effects are meaningless metric for bitcoin relative to other blockchains. In blockchains, network effect can be replicated and is not exclusive to bitcoin. Network effects, in the current phase of crypto, are also very fleeting.

Agreed, network effects can be replicated on any blockchain.  Disagree, that you can ignore network effect because of this. 

Thought experiment:

Imagine enough users jumped ship from bitcoin to bitcoin cash such that their userbase was swapped, because it provided better utility or their memes were better or whatever. All the HODLers switched sides, all the everyday users, everything.
The very act of all those users selling their btc to obtain bcash to do their transactions(even if their transaction was buy coins and hold them) would swap the market caps as their supply is nearly identical,  and network effect analysis would again be useful for determining how much more utility all the new bcash users were receiving over those stuck on old btc. 

People can't transact with coins they don't have and the act of acquiring them to do so drives up the value - metcalfe's law in action.  It is not a perfect tool and would be difficult/impossible to use it to ascribe dollar numbers to an individual blockchain, but it is useful for comparing two or more blockchains.

Quote
Market cap is misleading from this perspective. For example, bcash appears overvalued, it has a market cap 1/7th of btc.   

Number of transactions per day is one gauge of the overall participation rate on a blockchain. 

Bcash network averages roughly 20k transactions per day.  Bitcoin averages roughly 200k transactions per day.  Given a roughly equal number of users making transactions (which may be off by a moderate margin in either direction) Metcalfe's law indicates that this is not a 10 fold difference, rather an exponential difference in network utility.   The price gap is only a factor of 7, while from a value standpoint bitcoin may provide 100x utility(give or take reasonable calculation errors) over bcash!

These are assumptions and are not conclusive.

??
These are not financial numbers, just a back-of-napkin attempt at showing the amount of utility that each blockchain is offering to its end users compared to their relative market caps.


Quote
The microsoft blockchain analysis cited earlier in the thread assessed that alternate blockchains to btc sacrificed either decentralization or immutability or both in order to obtain advantages in speed and efficiency.  A SQL database on a server somewhere would vastly outperform bitcoin from a performance standpoint, but would have neither decentralization nor immutability and thus there would be no reason to trust it to authorize financial transactions.
 
Microsoft's conclusion was that second layer protocols to the bitcoin blockchain are the best solution for scaling without sacrificing the underlying fundamentals of btc and by and large the crypto community agrees.

It's not clear yet how or which ones microsoft will coordinate layer 2 protocols on. "Some public blockchains (Bitcoin [BTC], Ethereum, Litecoin, to name a select few) provide a solid foundation for rooting DIDs, recording DPKI operations, and anchoring attestations....To overcome these technical barriers, we are collaborating on decentralized Layer 2 protocols that run atop these public blockchains to achieve global scale, while preserving the attributes of a world class DID system."

https://cloudblogs.microsoft.com/enterprisemobility/2018/02/12/decentralized-digital-identities-and-blockchain-the-future-as-we-see-it/

Yes that is an excellent point and I can see how what I wrote came off different than what I intended. 

Microsoft is researching using the open-source btc codebase(or possibly other blockchains) and then writing their own second layer protocols to make use of it.  None of this would have any impact on the value of whichever open source blockchain they chose other than purely through the lens of public perception.

I also should not have made any generalizations about what the crypto community endorses or does not endorse.  It's an incredibly diverse group and any speculation to overall trends about what is supported is merely a guess.

I should have said that btc developers support a second layer option to increase throughput. I personally believe this is the highest value approach, as so far the blazing-fast/cost effective competitors like ripple have suffered from mechanistic centralization or political centralization or both, and as such I do not trust them with any of my transactions.  The foundations of BTC that protect the participants and ensure immutability and security are glaringly absent.

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #961 on: February 13, 2018, 10:51:09 PM »
FWIW there's no such thing as "paid shills" because there is no bitcoin corporation.

That's a terribly unconvincing argument, in this specific instance.

Because all of the easy money in cryptos is built around speculation, and speculation is fostered by internet forums.  We already know that small bands of active crypto posters on reddit have deliberately and repeatedly manipulated public sentiment about specific altcoins immediately after converting their holdings.  It's classic pump and dump.  Buy into ripple, have three respected (but relatively anonymous and apparently unaffiliated) internet posters spend a week talking about how awesome ripple is, and then sell out of ripple at 50% gains.  Rinse and repeat for Monero, and Litecoin, and whatever else you think you can convince people to buy.  This sort of coordinated market manipulation has been hugely profitable for a core group of early adopters, because so much of the crypto market is based on internet rumors anyway.  How do you think ~40 internet-famous 20-somethings each turned $10k into $50m in two years?  It sure wasn't riding BTC up and down.  They got in and out of the crazy cycles they helped to control.

So you don't need a bitcoin corporation to be a paid shill, because you can be an independent shill.  Crypto markets are so fragile, so volatile, that it only takes a handful of thoughtful and well educated writers to "generate" a billion dollars in market cap in a few weeks time.  There is no underlying revenue stream on which to base valuations, so it's purely 100% speculation and rumor.  Those can be manufactured by people like you.  All discussion of the technology itself is just smoke. 

Any time you (anyone, not you specifically) promote a coin that you hold, you are playing this game on a small scale.  If you're doing it with big money, or in coordination with other internet personas, then you're playing it on a grand scale.  This stuff is blatantly illegal when wall street does it, but crypto is still the wild wild west. 

That's not a good thing, the west was ugly.

Hmmm. That is very thought provoking and makes me want to not talk crypto anymore.  Thank you.

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #962 on: February 13, 2018, 11:10:03 PM »

Agreed, trying to protect from hyperinflation by investing in something hyperinflationary would make no sense whatsoever.

Using a tiny sample such as the prior 8 weeks of purchasing power loss without accounting for coin supply/cap, long term trends, or analysis of how a diminishing-supply, universally accessible currency would behave in the event of a government-backed currency's failure appeared to be willful ignorance and signaled an end to logical debate.  I guess I misinterpreted?

Okay, let's see your data then. I would love, love, love, to be wrong.  I love stats and numbers, and especially economics, so seeing coin supply/cap, long term trends, and analysis of how a diminishing-supply, universally accessible currency would behave in the event of a government-backed currency's failure is right up my alley.  So please post your analysis.  I'm ready for the deep dive.  I'm serious as a heart attack.  Spreadsheets are my thang.   I really, really, want to see your analysis.   I'm on board.

Oh, and "willful ignorance?"  You gotta admit that things like how a  "diminishing-supply, universally accessible currency would behave in the event of a government-backed currency's failure" isn't something that most people have experience with.  I mean, I didn't learn about it in college.    And I have no personal experience with it either.   

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #963 on: February 13, 2018, 11:41:04 PM »

Agreed, trying to protect from hyperinflation by investing in something hyperinflationary would make no sense whatsoever.

Using a tiny sample such as the prior 8 weeks of purchasing power loss without accounting for coin supply/cap, long term trends, or analysis of how a diminishing-supply, universally accessible currency would behave in the event of a government-backed currency's failure appeared to be willful ignorance and signaled an end to logical debate.  I guess I misinterpreted?

Okay, let's see your data then. I would love, love, love, to be wrong.  I love stats and numbers, and especially economics, so seeing coin supply/cap, long term trends, and analysis of how a diminishing-supply, universally accessible currency would behave in the event of a government-backed currency's failure is right up my alley.  So please post your analysis.  I'm ready for the deep dive.  I'm serious as a heart attack.  Spreadsheets are my thang.   I really, really, want to see your analysis.   I'm on board.

Oh, and "willful ignorance?"  You gotta admit that things like how a  "diminishing-supply, universally accessible currency would behave in the event of a government-backed currency's failure" isn't something that most people have experience with.  I mean, I didn't learn about it in college.    And I have no personal experience with it either.

I'm PM'ing you and happy to go over it to you to the extent of my knowledge, which is limited.

We all don't know what we don't know.  Sol pointed out some things that I didn't know that were quite disturbing.  I'm not going to continue this discussion publicly as I refuse to be, even indirectly, a part of any of what he described.  I've amended my initial post as well.

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #964 on: February 13, 2018, 11:44:49 PM »
Stop the madness. 🔒

Oh, I don't know.  I think we benefit by swatting the flies.  Ridiculous posts need to be heard, and ridiculed.

Now I'm off to start a new thread about vitamix blenders.  Blenders have changed my life!

Looked for it, couldn't find it.  Vitamix is awesome, I'm a smoothie junky.

Travis

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #965 on: February 14, 2018, 08:34:04 AM »
Stop the madness. 🔒

Oh, I don't know.  I think we benefit by swatting the flies.  Ridiculous posts need to be heard, and ridiculed.

Now I'm off to start a new thread about vitamix blenders.  Blenders have changed my life!

Looked for it, couldn't find it.  Vitamix is awesome, I'm a smoothie junky.

It's somewhere in the Shame and Comedy section. I'm certain we've taken that particular kitchen device out behind the tool shed.

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #966 on: February 14, 2018, 08:59:43 AM »
FWIW there's no such thing as "paid shills" because there is no bitcoin corporation.

That's a terribly unconvincing argument, in this specific instance.

Because all of the easy money in cryptos is built around speculation, and speculation is fostered by internet forums.  We already know that small bands of active crypto posters on reddit have deliberately and repeatedly manipulated public sentiment about specific altcoins immediately after converting their holdings.  It's classic pump and dump.  Buy into ripple, have three respected (but relatively anonymous and apparently unaffiliated) internet posters spend a week talking about how awesome ripple is, and then sell out of ripple at 50% gains.  Rinse and repeat for Monero, and Litecoin, and whatever else you think you can convince people to buy.  This sort of coordinated market manipulation has been hugely profitable for a core group of early adopters, because so much of the crypto market is based on internet rumors anyway.  How do you think ~40 internet-famous 20-somethings each turned $10k into $50m in two years?  It sure wasn't riding BTC up and down.  They got in and out of the crazy cycles they helped to control.

So you don't need a bitcoin corporation to be a paid shill, because you can be an independent shill.  Crypto markets are so fragile, so volatile, that it only takes a handful of thoughtful and well educated writers to "generate" a billion dollars in market cap in a few weeks time.  There is no underlying revenue stream on which to base valuations, so it's purely 100% speculation and rumor.  Those can be manufactured by people like you.  All discussion of the technology itself is just smoke. 

Any time you (anyone, not you specifically) promote a coin that you hold, you are playing this game on a small scale.  If you're doing it with big money, or in coordination with other internet personas, then you're playing it on a grand scale.  This stuff is blatantly illegal when wall street does it, but crypto is still the wild wild west. 

That's not a good thing, the west was ugly.

Hmmm. That is very thought provoking and makes me want to not talk crypto anymore.  Thank you.

Just wanted to comment that sol's post is not in any way speculative or conspiracy-theory oriented. We have definitely seen several new brand new users pop up, post one time about their scam ico / pump-and-dump "shitcoin" (linking to their blog that's similarly singularly focused in their signature), and then promptly disappear forever after the mods removed it. I have flagged one or two for the mods to look at myself.

Cryptocurrencies are absolutely in the wild west, and it will be very hard for them to climb out of that untrusted state. It seems every single week (if not day) you hear about yet another ICO scam, a new exchange exit scam / "getting hacked", a new coin-mining malware / unethical websites using your browser to mine without telling you / people using university / government / corporate computers to mine for them (illegally / unethically). Add on top of that the regular old giant speculative bubbles where regular Joes get tricked into "investing" at the top due to the FOMO, possible (probable?) regular old fraud that's underwriting maybe a third of the crytpo market from Tether, the correct fact that cryptos are in fact used to a large degree for purposes that would otherwise be illegal / unethical, and the difficulty of convincing people that an asset that has no fundamentals or revenue stream or traditional value proposition is an "investment".

I don't know if the proper solution is just to stop talking about it whatsoever, I actually probably agree that cryptocurrencies are here to stay and will have some sort of very-long-term value proposition. But at some point just throwing the "do your own research" and "don't invest more than you're willing to lose" and "well you should have known not to store your money on an exchange" buzzwords around is not sufficient, and will make people suspicious of your ulterior motives. Cryptos are burning through public trust very quickly right now. There has never been a more clear argument *for* financial regulations that I've ever seen.

All right, I've got an honest question for you surf
As I proofread this post and review yours to make sure I responded to the important ideas you raised, it occurs to me that I may be Charlie Brown with the football here, and your entire post may have actually been an elaborate dismissal.   Fingers crossed!

It wasn't, it was an honest question, although I'm obviously fairly sceptical of the current state of cryptos.

If I may summarize your response, you believe that Bitcoin will be the long-term winner because the momentum of the large current user / merchant / developer base will allow it to react and evolve faster than anything else could grow. You may be right but I actually hope you're not. Bitcoin seems to be one of the worst cryptos in regard to energy requirements for mining, and I don't agree that mining will become less valuable if Bitcoin continues to be king. That adds up to a terrible waste of energy just because people are unwilling to move to a better solution.

I meant to mention it earlier but I found your comparison to Linux interesting. I think it's probably a fair comparison, but not in the favourable way you meant it. I think an individual cryptocurrency is probably comparable to an individual Linux distribution, not to the whole Linux ecosystem. Linux distributions come and go and gain and lose popularity all the time. And yes, there are some big players who stay relevant for a long time. But there are no guarantees, and since everything in the Linux world is open source and freely available there is nothing to prevent some upstart from creating their own distribution that does something better and convincing a huge portion of the userbase to switch. It's a safe bet that Linux as an operating system will stay relevant forever. Any individual distribution not so much.

ketchup

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #967 on: February 14, 2018, 09:04:46 AM »
Stop the madness. 🔒

Oh, I don't know.  I think we benefit by swatting the flies.  Ridiculous posts need to be heard, and ridiculed.

Now I'm off to start a new thread about vitamix blenders.  Blenders have changed my life!

Looked for it, couldn't find it.  Vitamix is awesome, I'm a smoothie junky.
FYI, Surf, you've mentioned the forum search function a couple times.  It's borderline-worthless; the best way to search the forum is to just use Google and site:forum.mrmoneymustache.com to filter the results.

Surf

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #968 on: February 14, 2018, 10:23:33 AM »
Stop the madness. 🔒

Oh, I don't know.  I think we benefit by swatting the flies.  Ridiculous posts need to be heard, and ridiculed.

Now I'm off to start a new thread about vitamix blenders.  Blenders have changed my life!

Looked for it, couldn't find it.  Vitamix is awesome, I'm a smoothie junky.
FYI, Surf, you've mentioned the forum search function a couple times.  It's borderline-worthless; the best way to search the forum is to just use Google and site:forum.mrmoneymustache.com to filter the results.

You are absolutely correct, thank you.  I did notice the forum search was ineffective and used that method. And felt kind of silly for not doing it immediately, haha.

Surf

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #969 on: February 14, 2018, 10:25:23 AM »
Stop the madness. 🔒

Oh, I don't know.  I think we benefit by swatting the flies.  Ridiculous posts need to be heard, and ridiculed.

Now I'm off to start a new thread about vitamix blenders.  Blenders have changed my life!

Looked for it, couldn't find it.  Vitamix is awesome, I'm a smoothie junky.

It's somewhere in the Shame and Comedy section. I'm certain we've taken that particular kitchen device out behind the tool shed.

I did not realize that was tongue-in-cheek.  I got my vitamix 9 years ago on a refurb sale and have used it daily since then.  It's more than paid for itself as I was burning out blenders about once a year before getting mine.  Just used it to make a lunch smoothie and it's still kicking!

Travis

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #970 on: February 14, 2018, 01:34:09 PM »
Stop the madness. 🔒

Oh, I don't know.  I think we benefit by swatting the flies.  Ridiculous posts need to be heard, and ridiculed.

Now I'm off to start a new thread about vitamix blenders.  Blenders have changed my life!

Looked for it, couldn't find it.  Vitamix is awesome, I'm a smoothie junky.

It's somewhere in the Shame and Comedy section. I'm certain we've taken that particular kitchen device out behind the tool shed.

I did not realize that was tongue-in-cheek.  I got my vitamix 9 years ago on a refurb sale and have used it daily since then.  It's more than paid for itself as I was burning out blenders about once a year before getting mine.  Just used it to make a lunch smoothie and it's still kicking!

Everybody should have the ability to chop food. It's the $500 device that will miraculously cure all your ills that some folks here take issue with.

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #971 on: February 14, 2018, 01:43:39 PM »
People who burn out blenders confuse me.  I've got a 1970s Osterizer (it has some fancy faux wood panelling on the side so I figure it's from the 70s?) that I've been using since before university.  I blend shit all the time.  Everything from green kale or red beet smoothies, to breaking up ice for mixed drinks, to pureeing stuff to thicken drinks.  That thing has had constant use for years, and provided you occasionally oil the spinny parts (I use some olive oil) it seems like it will never die.


Surf

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #972 on: February 15, 2018, 12:31:41 AM »

Just wanted to comment that sol's post is not in any way speculative or conspiracy-theory oriented. We have definitely seen several new brand new users pop up, post one time about their scam ico / pump-and-dump "shitcoin" (linking to their blog that's similarly singularly focused in their signature), and then promptly disappear forever after the mods removed it. I have flagged one or two for the mods to look at myself.

That makes me feel a little better about the savage welcome.

Cryptocurrencies are absolutely in the wild west, and it will be very hard for them to climb out of that untrusted state. It seems every single week (if not day) you hear about yet another ICO scam, a new exchange exit scam / "getting hacked", a new coin-mining malware / unethical websites using your browser to mine without telling you / people using university / government / corporate computers to mine for them (illegally / unethically). Add on top of that the regular old giant speculative bubbles where regular Joes get tricked into "investing" at the top due to the FOMO, possible (probable?) regular old fraud that's underwriting maybe a third of the crytpo market from Tether, the correct fact that cryptos are in fact used to a large degree for purposes that would otherwise be illegal / unethical, and the difficulty of convincing people that an asset that has no fundamentals or revenue stream or traditional value proposition is an "investment".

Agreed the ICO scamcoin phenomenon is in desperate need of regulation, it's a black eye on the crypto community.

Agreed the FOMO speculator aspect is a problem, as is the periodic bubble cycle it drives.  People have and will get burnt.  Users whose only goal is to resell later at a profit provide no value to the network and take away from the entire point of the technology and interfere with its adoption.

The malware issue is separate. I was a victim-witness in a federal trial when a computer of mine was hacked. It was used as part of a botnet for an ad click scheme that stole a staggering amount of money.  The issue with distributed mining malware is with computer security.

Tether may or may not be fraud, I cannot verify so I do not use it. There's what, 2bln tether?  The crytpo market cap is ~450bln right now.  I have not done research to determine the overall price shift that would occur if tether were to be fraudulent.  The exchanges make so much money that there is a non-zero chance that it's actually backed by USDs.

The illicit activity topic I cannot verify or deny without data.  I'm a tax paying law abiding citizen and do not use crypto for illicit activity.  Nearly all forms of money are used for criminal purposes.

I don't know if the proper solution is just to stop talking about it whatsoever, I actually probably agree that cryptocurrencies are here to stay and will have some sort of very-long-term value proposition. But at some point just throwing the "do your own research" and "don't invest more than you're willing to lose" and "well you should have known not to store your money on an exchange" buzzwords around is not sufficient, and will make people suspicious of your ulterior motives. Cryptos are burning through public trust very quickly right now. There has never been a more clear argument *for* financial regulations that I've ever seen.

Agreed regulation is sorely needed.

All right, I've got an honest question for you surf
As I proofread this post and review yours to make sure I responded to the important ideas you raised, it occurs to me that I may be Charlie Brown with the football here, and your entire post may have actually been an elaborate dismissal.   Fingers crossed!

It wasn't, it was an honest question, although I'm obviously fairly sceptical of the current state of cryptos.

I'm grateful, thank you.


If I may summarize your response, you believe that Bitcoin will be the long-term winner because the momentum of the large current user / merchant / developer base will allow it to react and evolve faster than anything else could grow. You may be right but I actually hope you're not. Bitcoin seems to be one of the worst cryptos in regard to energy requirements for mining, and I don't agree that mining will become less valuable if Bitcoin continues to be king. That adds up to a terrible waste of energy just because people are unwilling to move to a better solution.

Yes, cautiously.  Its fundamentals are sound and being the largest means the most utility offered.  I don't think it will react faster, but it is upgradeable and many desirable features are in development.  It just has to evolve those features the community desires before they leave for a different blockchain.

Owning a cryptocurrency is kind of like owning a telephone. You don't have to make calls on it every day to derive utility.  The fact that you are available to make or receive calls(in this case send or receive funds) contributes value to the network.  If you're the only one with the phone, it's useless.  If much of the world has it(or at least entities you want to , it's valuable. 

The energy use is an issue yes. The amount of miners competing for rewards is likely outpacing the adoption rate. 
However, scaling the network to more users is not linked to the amount of mining power required to verify the network. Also since electricity is an operating cost the miners are incentivized to use renewables because they are cheaper.

I too hope a more energy efficient, yet still secure, algorithm gains traction.


I meant to mention it earlier but I found your comparison to Linux interesting. I think it's probably a fair comparison, but not in the favourable way you meant it. I think an individual cryptocurrency is probably comparable to an individual Linux distribution, not to the whole Linux ecosystem. Linux distributions come and go and gain and lose popularity all the time. And yes, there are some big players who stay relevant for a long time. But there are no guarantees, and since everything in the Linux world is open source and freely available there is nothing to prevent some upstart from creating their own distribution that does something better and convincing a huge portion of the userbase to switch. It's a safe bet that Linux as an operating system will stay relevant forever. Any individual distribution not so much.

That is an excellent point. 

Corporations like facebook are very good at creating profit, but vulnerable to being overtaken by competitors(RIP myspace).  Open source distributions like Linux are very good at offering value to the userbase, and often fold would-be competitors into their community, but generate little profit.  As a result they are more resilient.
 
The overlap here is that the fiscal value of a blockchain network is directly linked to the utility value offered to the user base.  Basically, a linux-style approach may yield the highest utility product, which is also the highest fiscal value product.  In this instance there is no corporation to pay profits to, so anyone who participates in the network benefits from the increased value, until it reaches equilibrium.  Whether equilibrium is 0 users or millions will decide the fiscal value.

The reason scamcoins are valueless is A) noone uses them(metcalfe's) and B) they rarely do anything better than the established blockchains.

Agree completely that any one distribution/coin may or may not be relevant on a long time frame.

Bitcoin "distribution" variants come as hard forks, where an owner of 1btc receives 1 of the new version of the bitcoin open source, if it becomes successful.  Thus by holding bitcoin you obtain all future versions.
This is NOT the case for non-btc competing blockchain technologies, which makes paying attention to the top market players important.  If one offers better value, and you hold $5k of bitcoin, you can sell it for $5k of Coin X if its long term prospects are higher.  This requires research and vigilance.

Surf

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #973 on: February 15, 2018, 12:38:48 AM »
People who burn out blenders confuse me.  I've got a 1970s Osterizer (it has some fancy faux wood panelling on the side so I figure it's from the 70s?) that I've been using since before university.  I blend shit all the time.  Everything from green kale or red beet smoothies, to breaking up ice for mixed drinks, to pureeing stuff to thicken drinks.  That thing has had constant use for years, and provided you occasionally oil the spinny parts (I use some olive oil) it seems like it will never die.



That's awesome!  They don't make 'em like that anymore.  The modern shiny $75 blender has all plastic gearing, no matter how much stainless they waste on the outside.  If you blend frozen fruit the gears get shredded in short order.

Buying a $500 vitamix to try and cure your health is silliness.

I bought one for $250 refurb because I burned out 2 blenders in 2 yrs, and I use it daily(usually breakfast or lunch, but also for soups and sauces) and have stopped contributing to landfills and saved $ astonishingly.  It's neither pretty nor shiny(i got the lowest model) but it's all metal gears and an effective tool.

sherr

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #974 on: February 15, 2018, 11:11:25 AM »
Tether may or may not be fraud, I cannot verify so I do not use it. There's what, 2bln tether?  The crytpo market cap is ~450bln right now.  I have not done research to determine the overall price shift that would occur if tether were to be fraudulent.  The exchanges make so much money that there is a non-zero chance that it's actually backed by USDs.

Just FYI:
https://www.reddit.com/r/CryptoCurrency/comments/7xae98/understanding_tether_why_it_accounts_for_a/

Finallyunderstand

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #975 on: February 15, 2018, 01:47:27 PM »
Surf, as a new member, it's been suggested you post elsewhere for a while, outside the crypto space.  Yet, you've now on post #30, all in the same crypto thread.

I think you're at risk of getting banned at this point.  Please take a break from this controversial thread.  MMM forums don't need this.

Devils advocate here...  A lot of his posts and responses have been well thought out and he's not simply telling people to buy XYZ coin.  He's posting in a cryptocurrency thread which is where cryptocurrency conversation is supposed to happen.  If he was spamming cooking, real estate, case study threads, etc with crypto talk then it would make sense to mention banning.  If other MMM members don't want to see a "controversial" thread topic like cryptocurrencies then simply don't click the thread or have the Mods remove the thread all together. 

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #976 on: February 15, 2018, 02:02:50 PM »
Surf, as a new member, it's been suggested you post elsewhere for a while, outside the crypto space.  Yet, you've now on post #30, all in the same crypto thread.

I think you're at risk of getting banned at this point.  Please take a break from this controversial thread.  MMM forums don't need this.

Devils advocate here...  A lot of his posts and responses have been well thought out and he's not simply telling people to buy XYZ coin.  He's posting in a cryptocurrency thread which is where cryptocurrency conversation is supposed to happen.  If he was spamming cooking, real estate, case study threads, etc with crypto talk then it would make sense to mention banning.  If other MMM members don't want to see a "controversial" thread topic like cryptocurrencies then simply don't click the thread or have the Mods remove the thread all together.

The point is that if all you have to offer in 3 days as a new member is 30 posts in support of crypto, you probably came to the wrong forum altogether.

I agree with that assessment but just wanted to point out at least he's not spamming other threads.  Time will tell if he dives into other areas with as much gusto.

Travis

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #977 on: February 15, 2018, 02:20:39 PM »
Surf, as a new member, it's been suggested you post elsewhere for a while, outside the crypto space.  Yet, you've now on post #30, all in the same crypto thread.

I think you're at risk of getting banned at this point.  Please take a break from this controversial thread.  MMM forums don't need this.

It's been a 2-way conversation so far, and a couple posters may have even changed his mind on a few points.  It's definitely a controversial and niche subject, but it's not like he's been close minded.  We've had far worse appear here in those regards.

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #978 on: February 15, 2018, 03:48:23 PM »
So you don't need a bitcoin corporation to be a paid shill, because you can be an independent shill.  Crypto markets are so fragile, so volatile, that it only takes a handful of thoughtful and well educated writers to "generate" a billion dollars in market cap in a few weeks time.  There is no underlying revenue stream on which to base valuations, so it's purely 100% speculation and rumor.  Those can be manufactured by people like you.  All discussion of the technology itself is just smoke. 

Any time you (anyone, not you specifically) promote a coin that you hold, you are playing this game on a small scale.  If you're doing it with big money, or in coordination with other internet personas, then you're playing it on a grand scale.  This stuff is blatantly illegal when wall street does it, but crypto is still the wild wild west. 

That's not a good thing, the west was ugly.
Yes, certain communications by those in control of companies or markets to pump-and-dump stock are illegal and the SEC can take legal action because of it. It is in no way illegal for the average Joe to talk about why he chooses to hold (or not) stock XYZ. Nothing like the SEC is watching over those in control of crypto-currencies or their exchanges making this the wild wild west; and it looks like there has been plenty to be concerned about in this realm. Based on what I have read by @Surf here I don't think that he is a part of that. You could reasonably argue that all most of on this forum are guilty of promoting securities that we hold (usually in the form of low-cost index funds). I appreciate the arguments based on the differences between the types of securities (companies doing business to create profits vs. tokens that do nothing other than represent their volatile value on an immutable decentralized public ledger).

I've appreciated the bits of actual discussion of the technology behind crypto-currency that has appeared on this thread. I'm a bit of an optimist about the long term prospects of crypto-currency, but not enough to convince me to invest in it (huge learning curve to understand it well enough to not just be the greater fool). I imagine that some of my optimism stems from my libertarian political leanings - a currency that is not in the control of the government sounds very nice in the context of a libertarian utopia; but I have enough experience with my political leanings to know that pragmatism can be much more effective than idealism.

@Surf, you ought to start a thread about your surfing hobby (especially if you can focus on keeping the hobby frugal). Eventually someone will come along promoting some spendypants surfing equipment as "totally worth it" and you'll see just as much gusto in facepunching them. That's the culture here. @sol can be quite interesting to read when he's talking about stuff that he likes, but like you, I tend to dislike his style when responding to things he disagrees with.

sol

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #979 on: February 15, 2018, 05:01:09 PM »
@sol can be quite interesting to read when he's talking about stuff that he likes, but like you, I tend to dislike his style when responding to things he disagrees with.

Yea, I can be a real bitch.  Sorry, not sorry.

And for the record, people don't get banned here for disagreeing with the forum, they get banned for being rude about it.  I think surf is fine.

GuitarStv

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #980 on: February 15, 2018, 05:57:29 PM »
Surf, as a new member, it's been suggested you post elsewhere for a while, outside the crypto space.  Yet, you've now on post #30, all in the same crypto thread.

I think you're at risk of getting banned at this point.  Please take a break from this controversial thread.  MMM forums don't need this.

Devils advocate here...  A lot of his posts and responses have been well thought out and he's not simply telling people to buy XYZ coin.  He's posting in a cryptocurrency thread which is where cryptocurrency conversation is supposed to happen.  If he was spamming cooking, real estate, case study threads, etc with crypto talk then it would make sense to mention banning.  If other MMM members don't want to see a "controversial" thread topic like cryptocurrencies then simply don't click the thread or have the Mods remove the thread all together.

The point is that if all you have to offer in 3 days as a new member is 30 posts in support of crypto, you probably came to the wrong forum altogether.

We has some nice blender discussion going for a little bit.

Fantasticmrfox

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #981 on: February 17, 2018, 01:27:55 AM »
Hey, fellow Mustachians!

So my official position on crypto is that I fully support blockchain technology and crypto, in my current view, is the best way to bring blockchain tech to the point where these other technologies become economically and socially viable. I also see that our official currencies are also mostly based on trust and speculation (this is obviously ignoring other economic factors such as production and earnings) and so see crypto as a new globalised currency that, using smart contracts, can help both businesses and individuals who transfer large sums across borders.

That said, I mine Ethereum and invest it into a tokenised Index fund inspired by the S&P 500. It's called Crypto20, and as the name suggests, it holds 20 of the top performing coins on the market. I feel that this significantly reduces my risk and allows me to focus on the long-term gains.

I invested $1800 in November at $0.8 per coin and the current value is roughly $2 after 4 months. That puts my potential earnings at $1440. I only put in as much as I was willing to lose. Now I mine and use what I make from mining to invest in Crypto20. Within the next few months, I plan to withdraw the cost of my miner $2500 and the initial $1800 to break even, leaving the mined Crypto20 fund for the next 10 years. I may not withdraw the initial cash injection, instead, leaving it to mature, or not, as I was willing to lose it in the 1st place.

Finallyunderstand

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #982 on: February 17, 2018, 06:22:07 AM »
Hey, fellow Mustachians!

So my official position on crypto is that I fully support blockchain technology and crypto, in my current view, is the best way to bring blockchain tech to the point where these other technologies become economically and socially viable. I also see that our official currencies are also mostly based on trust and speculation (this is obviously ignoring other economic factors such as production and earnings) and so see crypto as a new globalised currency that, using smart contracts, can help both businesses and individuals who transfer large sums across borders.

That said, I mine Ethereum and invest it into a tokenised Index fund inspired by the S&P 500. It's called Crypto20, and as the name suggests, it holds 20 of the top performing coins on the market. I feel that this significantly reduces my risk and allows me to focus on the long-term gains.

I invested $1800 in November at $0.8 per coin and the current value is roughly $2 after 4 months. That puts my potential earnings at $1440. I only put in as much as I was willing to lose. Now I mine and use what I make from mining to invest in Crypto20. Within the next few months, I plan to withdraw the cost of my miner $2500 and the initial $1800 to break even, leaving the mined Crypto20 fund for the next 10 years. I may not withdraw the initial cash injection, instead, leaving it to mature, or not, as I was willing to lose it in the 1st place.

Now this is a shill without any logical discussion.  I invested in a specific  X and now it’s worth X.  Nothing significant was brought to the table.

Capyy

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #983 on: February 17, 2018, 08:39:25 AM »
Has there been discussion about investing in blockchain tech without buying a coin? I don't believe in the future of the coins in the near term.

Telecaster

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #984 on: February 17, 2018, 10:39:50 AM »
That said, I mine Ethereum and invest it into a tokenised Index fund inspired by the S&P 500. It's called Crypto20, and as the name suggests, it holds 20 of the top performing coins on the market. I feel that this significantly reduces my risk and allows me to focus on the long-term gains.

And of course this index fund has filed prospectus with the SEC...right?

Surf

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #985 on: February 17, 2018, 04:15:24 PM »
Has there been discussion about investing in blockchain tech without buying a coin? I don't believe in the future of the coins in the near term.

As an example, Microsoft is looking to take advantage of open-source blockchain tech, without buying any tokens.  So you should have residual exposure from your index funds in the event that large players like MS increase profits through blockchain tech.

Other than stock-picking the corps that look to be investing the most heavily in blockchain, I am not currently aware of a way to do what you are asking.

There are some cryptos that seek to flatten out volatility by operating a pool of investment capital as some combination of USD and top performing cryptos, but at that point you are still fully in the crypto world as you would be buying their token to participate.

Surf

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #986 on: February 17, 2018, 04:37:42 PM »
That said, I mine Ethereum and invest it into a tokenised Index fund inspired by the S&P 500. It's called Crypto20, and as the name suggests, it holds 20 of the top performing coins on the market. I feel that this significantly reduces my risk and allows me to focus on the long-term gains.

Hey Fantasticmrfox,

A true crypto-index fund would be very useful.  I looked over Crypto20, it's a cool concept. A couple turnoffs:

-it is not an index, at all.  Don't fool yourself that you are gaining the benefits of a true index, which requires broad market coverage from the smallest to the largest to distribute risk and capture growth across the entire spectrum.

-if you wanted these 20 coins(I daresay you could choose a better 20 with a couple hours of googling), you would be MUCH better off buying them a la carte and controlling your own private keys.   By investing in Crypto20 you are turning over control of your assets in the hope that they will return them to you when you ask.  There's a non-zero chance that they wont, this defeats the entire point of crypto, which is you control your own finances and do not have to trust a 3rd party.

-Crypto20 appears only a couple months old.  Essentially you are taking on the risk of a fledgling token with the growth rates 20 coins from the top 50 or so.  That's a terrible trade IMO.

-finally, the 20 coins covered include some that I wouldn't touch with a 30 foot pole, and some that have flaws that may or may not preclude them from long term viability.  Some are solid, some I haven't looked into.

talltexan

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #987 on: February 20, 2018, 01:21:40 PM »
Historical data doesn't give us a time when Crypto- performed over an extended weak market (such as the 2001-2010 decade for SP500).

Bicycle_B

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #988 on: February 20, 2018, 06:54:07 PM »
Guess Jamie "bitcoin is a fraud" Dimon has changed his mind.

"We examine the potential role of CCs in terms of offering diversification in a global portfolio, given both their high returns over the past several years and their low correlation with the major asset classes, offsetting some of the cost of high volatility. If past returns, volatilities and correlations persist, CCs could potentially have a role in diversifying one’s global bond and equity portfolio."

https://www.zerohedge.com/news/2018-02-11/jpmorgan-publishes-bitcoin-bible

I am still bullish on using asset allocation strategies like the Larry portfolio, Golden Butterfly, and Bernsteins teachings but including CC in them as a diversifier and hedge. The returns on the modified Golden butterfly portfolio are beating S&P 500 (90/10), pure GB, Larry, and all the other asset mixes I track even with the crazy volatility. I tilt towards diversification and portfolios with the highest returns and the lowest potential drawdowns however. Drawdowns do not concern most people on this forum and if that is the case just stay 100% in VSTAX and keep hating on CCs (and gold).

Whatever the merits of cryptocurrency, a portfolio including it is not a portfolio with the lowest potential drawdown.  Since cryptocurrency has the shortest track record of asset mentioned in the above post, plus many analysts pointing out the possibility/probability of larger drops than any other "asset" class, a crypto-heavy portfolio has the highest potential drawdown.  Whatever rewards it may bring, such a portfolio incurs a larger risk.

talltexan

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #989 on: February 21, 2018, 09:11:08 AM »
Our MMM community seems to include both crypto-skeptics and crypto-boosters.

But let's say that I'm a crypto-skeptic. Does that still mean the optimal allocation to crypto is zero? I can see how the variability of price means I can rebalance to having 1% of a portfolio in crypto and feel like I'm well-positioned for a low-probability, high-value future in which the boosters are vindicated.

BattlaP

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #990 on: February 21, 2018, 10:16:35 AM »
Our MMM community seems to include both crypto-skeptics and crypto-boosters.

But let's say that I'm a crypto-skeptic. Does that still mean the optimal allocation to crypto is zero? I can see how the variability of price means I can rebalance to having 1% of a portfolio in crypto and feel like I'm well-positioned for a low-probability, high-value future in which the boosters are vindicated.

Quote from: literally one page ago
If you allocated 1% of your portfolio to every scheme or technology that could theoretically boom in value you’ll very quickly have a portfolio that is 100% rubbish. Even if your number 2 outcome came about (and I also thoroughly disagree with your ridiculous assessment there of ‘likely’) the chance of ‘cryptos eventually boom’ meaning that the Bitcoin (or any other currently existing coin) you’re holding today specifically represents that future value is exceedingly unlikely.

Come on mate, you've been around long enough to see this discussion had before. If you want to gamble/speculate with your money on sketchy internet ponzi schemes plagued by scams, hacks, propaganda and misinformation instead of investing it according to well studied and historically sound asset portfolios, go ahead, but don't call it 'optimal' or 'well-positioned'.

BattlaP

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #991 on: February 21, 2018, 10:21:24 AM »
Has there been discussion about investing in blockchain tech without buying a coin? I don't believe in the future of the coins in the near term.

If it has any practical application towards competitive advantage for existing firms (lol it doesn't and never will) it'll be covered by your index funds. It is completely safe and preferable to ignore it for now. Better future techs to speculate on would be things like solar and other renewables, machine learning, maybe VR/AR, etc. Better yet, don't speculate and instead let your productive assets (stocks/bonds/real estate) work for you to produce income over time.

sol

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #992 on: February 21, 2018, 11:16:04 AM »
But let's say that I'm a crypto-skeptic. Does that still mean the optimal allocation to crypto is zero?

Yes.  Yes it does.

That's my personal opinion of course, and you can take it or leave it, but I wouldn't touch crypto with a ten foot pole made of other people's money.  The entire space is rife with criminal manipulators with shady motivations.

The economic importance of blockchain, as a clever software idea, is definitely not clear yet but no one believes it is worth a half trillion dollars (the current market cap).  Crypto bears all of the hallmarks of past scams, and none of the attributes of past emerging technologies like electricity, autos, or the internet.  It's a bad investment and everyone is going to get burned, because it only exists to defraud retail investors.  It was created for the sole purpose of criminal fraud (avoiding sanctions, making illegal purchases, and now rotating pump and dump securities fraud). 

Who would willingly invest in something that was designed from the outset to cause financial ruin?  Only the sharks doing the stealing, that's who.  And the minnows they can trick into parting with their hard earned cash.  Which are you?

trollwithamustache

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #993 on: February 21, 2018, 12:53:34 PM »
But let's say that I'm a crypto-skeptic. Does that still mean the optimal allocation to crypto is zero?

The economic importance of blockchain, as a clever software idea, is definitely not clear yet but no one believes it is worth a half trillion dollars (the current market cap). 

well, block chain is  potentially worth that much or more. That doesn't mean the BTC market cap is the real value of the idea of the block chain idea. 

BTC or even Joe-shitposters favorite coin can still end up being worth 0 or a million dollars in 5 years completely independent of how widespread block chain usage ends up being. 

its interesting that in this whole block chain portfolio discussion we always focus on crypto coins and none of the software companies or other applications.

waltworks

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #994 on: February 21, 2018, 01:13:36 PM »
its interesting that in this whole block chain portfolio discussion we always focus on crypto coins and none of the software companies or other applications.

It makes perfect sense, actually. Blockchain outside of the coins and scams is pretty boring (and open source) and lots of companies will use it for lots of useful/lucrative things - but you already probably own stock in those companies if you're an index fund investor. So there's really not much to discuss.

If you like to pick stocks, you could get interested in which companies are doing what with blockchain.

If you just like to gamble, then the coins are the only thing to talk about. Which is why people are so interested in talking about them.

-W

zazpowered

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #995 on: February 21, 2018, 11:50:04 PM »
I made an app recently to help ppl track their cryptocurrency portfolio value. It's probably only useful if you have coins outside of BTC, LTC, ETH and what's store on Coinbase because then you could just use Coinbase to track your portfolio. No registration required and all data is anonymous and only stored on your phone. https://itunes.apple.com/us/app/coinbuddy-track-your-crypto/id1271644974?mt=8

Would love to get any thoughts/feedback!

Telecaster

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #996 on: February 22, 2018, 02:25:45 PM »
^ I was thinking it, but I wasn't going to say it. 

BattlaP

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #997 on: February 22, 2018, 03:20:53 PM »
Yep, complete nonsense. Blockchain is a novel data structure, of academic interest, which has serious flaws (eg complete inability to scale without vast energy consumption) and is also wholly unneccessary because in the real world the average person is perfectly happy with centralised, trusted actors. The cost of trustless decentralisation is much too high to be a practical solution for literally any problem, and is also generally undesirable because trusted actors bring with them the benefits of regulation, reliability, accountability and system control (two examples; chargebacks, system updates - with blockchain solutions transactions are irreversible which is a terrible idea in general, and system updates require agreement and cooperation between distributed actors, which, for example, is why the Bitcoin block size has not been changed in way too long and every attempt to do so ends in a reddit meme war).

Plenty of companies have done your 'behind the scenes' secret trials and the reason you don't hear about them is because they don't amount to anything.
« Last Edit: February 22, 2018, 03:23:33 PM by BattlaP »

Telecaster

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #998 on: February 22, 2018, 03:48:13 PM »
I can see some uses.  Blockchain is a distributed ledger.  So you could use to do things like track the provenance of pieces of art, or maybe firearms, diamonds, cars,  bottles of alcohol, real estate, or anything you wanted to keep track of. 

So it might be useful, but it is an incremental step in bookkeeping.  It isn't like discovering fire or antibotics. 

BattlaP

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Re: OFFICIAL: Blockchain / Crypto-Currency Portfolios and Discussion
« Reply #999 on: February 22, 2018, 04:03:45 PM »
I can see some uses.  Blockchain is a distributed ledger.  So you could use to do things like track the provenance of pieces of art, or maybe firearms, diamonds, cars,  bottles of alcohol, real estate, or anything you wanted to keep track of. 

So it might be useful, but it is an incremental step in bookkeeping.  It isn't like discovering fire or antibotics.

Or you could use a permissioned database and not have to worry about block generation, inability to correct mistakes, etc.

The closest thing to a practical application that blockchain has is Github. And it's not blockchain.