Author Topic: What do you guys think of crypto currencies ?  (Read 3634 times)

Shedir

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What do you guys think of crypto currencies ?
« on: November 17, 2019, 08:47:17 AM »
Hello investors !

I'm totally new to this forum,so you're free to check my presentation ! I've been curious about something. I invested money in crypto currencies, and followed the market very closely since august 2017. I then discovered myself a passion for trading and financial markets and started getting curious about stocks, cac40 and more usual markets.

Crypto still is my main market right now and i'm curious about what investors outside of crypto think about crypto.

1) Are you involved in crypto yet ?
2) If not, why ? Do you think it's a scam, or that it's too risky ?
3) If you want to get involved, what issue are you dealing with ? I mean, is it the law in your country, your bank, or you are just unsure about the potential/ money making opportunity ? Do you have any issue to get in ?

I'm just curious if other investor plan to get in or not, it would be interesting for me to have an additionnal thinking about the upside potential of crypto.

I'm open to any opinion guys, looking forward to read your replies ;)
I think i've seen some crypto related post here, and some were positionned really early, which is awesome. And most people are open to talk about it here, i think i'll love this open minded forum.

( By the way, i hope this topic is still related to this forum, i apologize if it's not allowed)
Thanks

fattest_foot

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Re: What do you guys think of crypto currencies ?
« Reply #1 on: November 17, 2019, 09:34:34 AM »
If crypto is to be worthwhile as a currency, it needs stability.

If it's stable, it's not really the "investment" that crypto people want.

As long as crypto remains speculative, it's worthless.

brellis1vt

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Re: What do you guys think of crypto currencies ?
« Reply #2 on: November 17, 2019, 09:38:18 AM »
Personally, I do not want to have a large portion of my net worth in Crypto.  However, I do think there is a place for it in a portfolio.  I like how it could be a replacement for gold and a hedge against all the things governments are doing with currencies.  I am concerned by the fact it's still young and I don't think governments will allow a Crypto system to take over.  I also don't like the fact that it doesn't have anything backing it.  So, I plan to have 2-5% in it.

JAYSLOL

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Re: What do you guys think of crypto currencies ?
« Reply #3 on: November 17, 2019, 09:41:17 AM »
This should give you a good idea as to why the vast majority around here don’t see crypto as an “investment” at all.  I suggest you read it as well as a lot of other MMM posts, a full understanding of these will literally change your life for the better

https://www.mrmoneymustache.com/2018/01/02/why-bitcoin-is-stupid/

Personally

1). Yes, I played with a bit of crypto for fun, and yes I made a good chunk of money considering how little I put in.  That did not make it an investment, it just made me a lucky gambler/speculator. 
2).  Some coins are basically scams, created for the sole purpose of pump and dump schemes etc.  Not all, and I have nothing against using crypto currency as a tool, but there are a lot of scams that revolve around crypto, and a lot of other risk owning it from risk of losing coins in an exchange to rapid loss of value from volatility.   
3).  Not applicable

Yeah, this is a somewhat open-minded forum, but there’s very little tolerance here for BS, over-hyped “investments”, or outright scams.  So tread lightly. 

You are welcome to discuss crypto currency in the forum, it’s allowed, however I strongly suggest in order to have meaningful discussions that you read the bulk of MMMs posts as well as what other members here suggest about investing.

Shedir

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Re: What do you guys think of crypto currencies ?
« Reply #4 on: November 17, 2019, 10:20:11 AM »
Personally, I do not want to have a large portion of my net worth in Crypto.  However, I do think there is a place for it in a portfolio.  I like how it could be a replacement for gold and a hedge against all the things governments are doing with currencies.  I am concerned by the fact it's still young and I don't think governments will allow a Crypto system to take over.  I also don't like the fact that it doesn't have anything backing it.  So, I plan to have 2-5% in it.

Yeah absolutely, it's here for a little place in the portofolio. However, it's backed by code, the code is the law. In my opinion it's better than being backed by banks etc... At least the code is transparent, what do you think ?

Shedir

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Re: What do you guys think of crypto currencies ?
« Reply #5 on: November 17, 2019, 10:22:47 AM »
Okay i understand Jaysol, i'm not going to promote any invesment or anything, it was just a quick interview to see what's going on here about crypto currencies. It's so much different from Stocks, and other usual markets.
I'll keep reading other discussion, thanks !

JAYSLOL

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Re: What do you guys think of crypto currencies ?
« Reply #6 on: November 17, 2019, 10:25:45 AM »
Personally, I do not want to have a large portion of my net worth in Crypto.  However, I do think there is a place for it in a portfolio.  I like how it could be a replacement for gold and a hedge against all the things governments are doing with currencies.  I am concerned by the fact it's still young and I don't think governments will allow a Crypto system to take over.  I also don't like the fact that it doesn't have anything backing it.  So, I plan to have 2-5% in it.

Yeah absolutely, it's here for a little place in the portofolio. However, it's backed by code, the code is the law. In my opinion it's better than being backed by banks etc... At least the code is transparent, what do you think ?

The “code” doesn’t guarantee a value, it only ensures that it will still exist as a piece of code. That’s like saying the laws of physics back the pieces of paper in my wallet, because no matter what happens I will still have the piece of paper in my wallet. 

Shedir

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Re: What do you guys think of crypto currencies ?
« Reply #7 on: November 17, 2019, 11:23:58 AM »


The “code” doesn’t guarantee a value, it only ensures that it will still exist as a piece of code. That’s like saying the laws of physics back the pieces of paper in my wallet, because no matter what happens I will still have the piece of paper in my wallet.
[/quote]

I'm not sure to understand. The fact that usd/eur/... is backed by the governement doesn't warranty it's value either. I think nothing as a warranted value. Neither usd or bitcoin. The fact that it's backed by government make you sure that you'll be able to exchange almost everything against usd, but doesn't warranty it's value.

Correct me if i'm wrong, but i didn't said the code is a warranty of the value, but more that the code is backing the bitcoin network, to reply to "   I also don't like the fact that it doesn't have anything backing it."

mjr

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Re: What do you guys think of crypto currencies ?
« Reply #8 on: November 17, 2019, 12:44:44 PM »
Bitcoin is a bunch of numbers being generated and it takes a bucket-load of power to do so.    It has NO inherent value.  Yes, now people will argue that fiat money has no gold backing it up any more, but fiat currencies are backed by governments and economies.

As mentioned by a previous commenter, bitcoin can be successful as a currency only if it is stable.  Bitcoin is just gambling, not investing.

Davnasty

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Re: What do you guys think of crypto currencies ?
« Reply #9 on: November 18, 2019, 01:37:51 PM »
The “code” doesn’t guarantee a value, it only ensures that it will still exist as a piece of code. That’s like saying the laws of physics back the pieces of paper in my wallet, because no matter what happens I will still have the piece of paper in my wallet.

I'm not sure to understand. The fact that usd/eur/... is backed by the governement doesn't warranty it's value either. I think nothing as a warranted value. Neither usd or bitcoin. The fact that it's backed by government make you sure that you'll be able to exchange almost everything against usd, but doesn't warranty it's value.

Correct me if i'm wrong, but i didn't said the code is a warranty of the value, but more that the code is backing the bitcoin network, to reply to "   I also don't like the fact that it doesn't have anything backing it."

The bolded is an excellent analogy.

You said bitcoin is backed by code which is better than being backed by banks but these two things are not analogous. The existence of bitcoin is backed by code in the same way the existence of a dollar bill is backed by physics. The value of bitcoin however is backed by nothing whereas the value of currency is backed by banks/government. You've compared the trust you have in the existence of bitcoin to the trust you have in the value of currency. Not a fair comparison.

FINate

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Re: What do you guys think of crypto currencies ?
« Reply #10 on: November 18, 2019, 02:13:44 PM »
Like so many things crypto, crypto currencies on their own do not solve the fundamental trust issue and instead just move it around. What do I mean? Ok, sure, the underlying "value" doesn't require trust in banks or governments. But what good is that value if you can't utilize it and it just sits there as bits in the ether? But at the point where you need to access that value you're right back at the same fundamental issue of trust. Can you trust that that merchant will indeed ship your gold bar after the Bitcoin is transferred? What recourse do you have if they don't? I would argue that cryptos replaced trust in one entity (elected government, regulated banking industry) for trust in less reliable entities (unregulated merchants and unaccountable individuals).

Buffaloski Boris, Russian Bot

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Re: What do you guys think of crypto currencies ?
« Reply #11 on: November 18, 2019, 03:43:50 PM »
I disagree with MMM on crypto. I think it’s as much an “investment” as other highly speculative things like obscure commodities, Argentinian sovereign debt, or the latest Silicon Valley IPOs. Emphasis on “highly speculative.”  I think the time to sink money into it was 5 years ago.

Telecaster

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Re: What do you guys think of crypto currencies ?
« Reply #12 on: November 18, 2019, 04:39:47 PM »
I disagree with MMM on crypto. I think it’s as much an “investment” as other highly speculative things like obscure commodities, Argentinian sovereign debt, or the latest Silicon Valley IPOs. Emphasis on “highly speculative.”  I think the time to sink money into it was 5 years ago.

The difference is that Silicon Valley IPOs have upside potential. Crypto has none. 

MustacheAndaHalf

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Re: What do you guys think of crypto currencies ?
« Reply #13 on: November 19, 2019, 01:38:25 AM »
I'm not sure to understand. The fact that usd/eur/... is backed by the governement doesn't warranty it's value either. I think nothing as a warranted value. Neither usd or bitcoin. The fact that it's backed by government make you sure that you'll be able to exchange almost everything against usd, but doesn't warranty it's value.
Does the number of hamburgers you buy with your salary change much?
Paying USD for goods priced in USD means those prices are stable - and USD is itself fairly stable.
Bitcoin dropped -80% near the start of 2018, meaning you can buy 5x less stuff with your BTC.

You're in the early stage of bitcoin love.  I get it - it's novel and revolutionary.  But USD is the most used currency in the world, backed by the "full faith and credit" of the United States.  If you think USD and BTC are equal, "You better check yo self before you wreck yo self" - Ice Cube (Check Yourself)

YttriumNitrate

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Re: What do you guys think of crypto currencies ?
« Reply #14 on: November 19, 2019, 07:28:47 AM »
I disagree with MMM on crypto. I think it’s as much an “investment” as other highly speculative things like obscure commodities, Argentinian sovereign debt, or the latest Silicon Valley IPOs. Emphasis on “highly speculative.”  I think the time to sink money into it was 5 years ago.
The difference is that Silicon Valley IPOs have upside potential. Crypto has none.
Crypto has serious upside potential. Don't underestimate the buying power of the bigger fool.

Davnasty

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Re: What do you guys think of crypto currencies ?
« Reply #15 on: November 19, 2019, 08:19:39 AM »
I disagree with MMM on crypto. I think it’s as much an “investment” as other highly speculative things like obscure commodities, Argentinian sovereign debt, or the latest Silicon Valley IPOs. Emphasis on “highly speculative.”  I think the time to sink money into it was 5 years ago.

You've grouped these examples together because they're all "highly speculative" which makes me think you've missed the point of his claim that bitcoin is not an investment. His argument is that it's not an investment because the there is no product or service, your money adds no value to the system. The probability of success doesn't enter into it.

Granted this is not the literal definition of investment, but he made it clear in the article what he meant when he said bitcoin is not an investment.

Quote
Investing means buying an asset that actually creates products and services and cashflow for an extended period of time.

talltexan

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Re: What do you guys think of crypto currencies ?
« Reply #16 on: November 19, 2019, 08:32:59 AM »
Some people have made a lot of money because they got into crypto at the right time.

But even those people have borne extraordinary risk. True investing involves bearing risk and--over time--being compensated for that risk with a return. But the return might not be available when you really need it.

I would limit investments in crypto currency to 1% of my net worth if I were you. The return-for-risk trade works the best in stock index funds, such as $VTSAX or $IJS.

bwall

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Re: What do you guys think of crypto currencies ?
« Reply #17 on: November 19, 2019, 12:43:51 PM »
The “code” doesn’t guarantee a value, it only ensures that it will still exist as a piece of code. That’s like saying the laws of physics back the pieces of paper in my wallet, because no matter what happens I will still have the piece of paper in my wallet.

I'm not sure to understand. The fact that usd/eur/... is backed by the governement doesn't warranty it's value either. I think nothing as a warranted value. Neither usd or bitcoin. The fact that it's backed by government make you sure that you'll be able to exchange almost everything against usd, but doesn't warranty it's value.

Correct me if i'm wrong, but i didn't said the code is a warranty of the value, but more that the code is backing the bitcoin network, to reply to "   I also don't like the fact that it doesn't have anything backing it."

The bolded is an excellent analogy.

You said bitcoin is backed by code which is better than being backed by banks but these two things are not analogous. The existence of bitcoin is backed by code in the same way the existence of a dollar bill is backed by physics. The value of bitcoin however is backed by nothing whereas the value of currency is backed by banks/government. You've compared the trust you have in the existence of bitcoin to the trust you have in the value of currency. Not a fair comparison.

+1.

Crypto as a store of value is worthless. When I read about Mt. Gox I thought only a fool would put any money in crypto. Read about the scam here: https://en.wikipedia.org/wiki/Mt._Gox
Since then there have been multiple exchanges that have imploded is very shady ways.

Crypto as a medium of exchange is about as practical as say, gold ingots, glass beads or anything else the barter system can produce.

Blockchain is a useful technology and I do believe it has a practical, everyday uses. But not as a store of value or medium of exchange.
This article lists some practical, everyday uses of blockchain as efficient solutions in various situations:
https://www.economist.com/technology-quarterly/2018/08/30/the-promise-of-the-blockchain-technology

Buffaloski Boris, Russian Bot

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Re: What do you guys think of crypto currencies ?
« Reply #18 on: November 19, 2019, 01:44:59 PM »
I disagree with MMM on crypto. I think it’s as much an “investment” as other highly speculative things like obscure commodities, Argentinian sovereign debt, or the latest Silicon Valley IPOs. Emphasis on “highly speculative.”  I think the time to sink money into it was 5 years ago.
The difference is that Silicon Valley IPOs have upside potential. Crypto has none.
Crypto has serious upside potential. Don't underestimate the buying power of the bigger fool.

LOL! Ain’t that the truth. Owners of FAANG stocks live by that credo!

(As I run from the room 🤣)

Buffaloski Boris, Russian Bot

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Re: What do you guys think of crypto currencies ?
« Reply #19 on: November 19, 2019, 01:58:26 PM »
I disagree with MMM on crypto. I think it’s as much an “investment” as other highly speculative things like obscure commodities, Argentinian sovereign debt, or the latest Silicon Valley IPOs. Emphasis on “highly speculative.”  I think the time to sink money into it was 5 years ago.

You've grouped these examples together because they're all "highly speculative" which makes me think you've missed the point of his claim that bitcoin is not an investment. His argument is that it's not an investment because the there is no product or service, your money adds no value to the system. The probability of success doesn't enter into it.

Granted this is not the literal definition of investment, but he made it clear in the article what he meant when he said bitcoin is not an investment.

Quote
Investing means buying an asset that actually creates products and services and cashflow for an extended period of time.

I don’t see crypto as any less of an investment than other investment choices. By the definition provided, gold and diamonds are not an investment. We’ll just have to disagree on the definition then. For those who bought into crypto early, it was a very, very lucrative investment.


Davnasty

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Re: What do you guys think of crypto currencies ?
« Reply #20 on: November 19, 2019, 02:59:42 PM »
I disagree with MMM on crypto. I think it’s as much an “investment” as other highly speculative things like obscure commodities, Argentinian sovereign debt, or the latest Silicon Valley IPOs. Emphasis on “highly speculative.”  I think the time to sink money into it was 5 years ago.

You've grouped these examples together because they're all "highly speculative" which makes me think you've missed the point of his claim that bitcoin is not an investment. His argument is that it's not an investment because the there is no product or service, your money adds no value to the system. The probability of success doesn't enter into it.

Granted this is not the literal definition of investment, but he made it clear in the article what he meant when he said bitcoin is not an investment.

Quote
Investing means buying an asset that actually creates products and services and cashflow for an extended period of time.

I don’t see crypto as any less of an investment than other investment choices. By the definition provided, gold and diamonds are not an investment. We’ll just have to disagree on the definition then. For those who bought into crypto early, it was a very, very lucrative investment.

Correct, gold and diamonds would not be investments according to this definition. But we don't disagree, I acknowledged that this is not the correct definition of investment. It was however MMM's meaning when he said it and he explained as much in the article.

Whether it's "less" of an investment depends on what scale you're using "less" to describe.

If you mean they all meet the definition of investment, then sure, it's no less an investment.

If you are referring to the quality of investment, then yes, it is less of an investment than buying stock, or most other forms of investing for that matter.

Those who bought in early may have made a lot of money, but so does someone who bets straight up on a game of roulette and wins. Would you argue that they made a good investment?

shinn497

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Re: What do you guys think of crypto currencies ?
« Reply #21 on: November 19, 2019, 03:58:08 PM »

i think they are dumb. Why use a large amount of unknown and unreliable computers to spend 1000X as much energy to compute the same transaction that a secure enterprise computer can do in a second.

If I could I would take out every 5 year put option on btc as I could afford.

js82

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Re: What do you guys think of crypto currencies ?
« Reply #22 on: November 19, 2019, 05:37:39 PM »
1) Are you involved in crypto yet ?

No.

Quote
2) If not, why ? Do you think it's a scam, or that it's too risky ?

I'm high on blockchain as a technology, low on cryptocurrency as an "investment".  While blockchain itself is a useful technology that will continue to see expanded usage, cryptocurrency is basically speculation, and here's why:

1.  It's a non-productive asset.  At the end of the day, bitcoin is bitcoin, and it doesn't create anything new for you.
2.  The scarcity argument that most of the bitcoin evangelists swear by is mostly bunk.  As long as alternate cryptocurrencies exist, there's nothing that forces bitcoin to hold its value.  Coin A can be replaced by coin B can be replaced by coin C.  Incidentally this is the one redeeming quality of precious metals - they have intrinsic usefulnes, so you can't just replace platinum with iron, for example.
3. Bitcoin/Proof-of-work coins scale really badly, and are an environmental trainwreck.  The amount of energy/computational power to complete a bitcoin transaction guarantees that it can't scale to the extent it would need to in order to become ubiquitous.  Proof-of-stake crypto doesn't necessarily have this issue, but the crypto evangelists aren't all that keen on them.  See: https://digiconomist.net/bitcoin-energy-consumption
4.  The cryptocurrency market currently does not behave in a rational manner.  Watch the way it moves, and that much is obvious. When I see large moves in the value I often ask a friend who is an active cryptocurrency investor what is driving the moves, and half the time he doesn't know.  When people who make a point to educate themselves about the market don't know what's causing *large* moves, you're well into speculation territory.

If I could purchase an ownership stake in the companies developing the technology, or the companies making the hardware on which cryptocurrency platforms run(this used to be AMD/Nvidia, but that's no longer the case for most coins), I'd strongly consider it.  Coins?  Not so much.

Quote
3) If you want to get involved, what issue are you dealing with ? I mean, is it the law in your country, your bank, or you are just unsure about the potential/ money making opportunity ? Do you have any issue to get in ?

Not trying to get in - see above.
« Last Edit: November 19, 2019, 05:46:44 PM by js82 »

the_gastropod

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Re: What do you guys think of crypto currencies ?
« Reply #23 on: November 19, 2019, 05:59:52 PM »
I'm high on blockchain as a technology, low on cryptocurrency as an "investment".

I couldn't agree more on basically everything else you said. But this, I still just don't get. Bitcoin has been around for about a decade now. As far as I know, there are still 0 actual viable uses of blockchain, unless you count cryptocurrencies themselves. We've used Merkle Trees for 40 years now. Beyond that, a blockchain is about proof of work, useful in 0-trust systems. That excludes them from use in the physical world, where property laws and government regulations exist. So what are they useful for?

shinn497

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Re: What do you guys think of crypto currencies ?
« Reply #24 on: November 19, 2019, 11:18:08 PM »
They are useful for decentralized apps. The question is what is a decentralized app useful for.

The issue is that decentralization often comes at a cost. That cost is the time and amount of computing power required. The security of the blockchain relies on its size, so it can't be replicated on a smaller scale.

Most of the internet is about speed and latency. People are super impatient and don't even like half a second slowdown. Blockchain transactions can take minutes to a day. Computing is also power, energy, and heat constrained. Blockchains are heavy power, energy, and heat consumers.

What kills me about all of this is that, while the cryptographic tech is cool, the actual security is not that great. The decentralization helps against fraud but it doesn't help with trust and edge security.

In situations where you truly need unique signatures and you do not care about speed, like crypto kitties, or decentralized contracting (Again not sure why anyone would care about this), it can help.

But as a whole, most of computing cares about being faster, leaner, and better. Blockchain does not solve that. Look to cloud computing, novel forms of deep learning (capsule, complex, semisupervised, etc. etc.) 3d microchips, and even quantum computing if you want to invest in future computing tech.

The_Big_H

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Re: What do you guys think of crypto currencies ?
« Reply #25 on: November 19, 2019, 11:20:45 PM »
zero sum game, highly useful for illegal/gray transactions, attracts all kinds of anarchist/conspiracy nutjobs, constantly hacked... not interested.

Ive seen someone refer to them as "dunning-krueggerands", bout sums it up nicely.

Telecaster

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Re: What do you guys think of crypto currencies ?
« Reply #26 on: November 20, 2019, 09:41:54 PM »

Ive seen someone refer to them as "dunning-krueggerands", bout sums it up nicely.

Ha!

crimp

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Re: What do you guys think of crypto currencies ?
« Reply #27 on: November 24, 2019, 08:31:49 AM »
One actual application for blockchain -- provenance.

Imagine there's an E. Coli outbreak in Romaine lettuce. The lettuce from a particular plot on a particular farm is the culprit. Luckily the movement of the lettuce from the farm to each stage in the process of distribution is required to be logged in a permissioned blockchain. When an investigator scans the bad lettuce they immediately know which distributers / which farm to check into. Once they've scanned a few, they'll have a pretty good idea where the outbreak of E. Coli came from. They declare a recall. Luckily, all the lettuce in stores across the country have tags which immediately identify to store staff whether the lettuce came from the compromised batch. This makes the recall much simpler.

seattlecyclone

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Re: What do you guys think of crypto currencies ?
« Reply #28 on: November 24, 2019, 11:11:41 AM »
One actual application for blockchain -- provenance.

Imagine there's an E. Coli outbreak in Romaine lettuce. The lettuce from a particular plot on a particular farm is the culprit. Luckily the movement of the lettuce from the farm to each stage in the process of distribution is required to be logged in a permissioned blockchain. When an investigator scans the bad lettuce they immediately know which distributers / which farm to check into. Once they've scanned a few, they'll have a pretty good idea where the outbreak of E. Coli came from. They declare a recall. Luckily, all the lettuce in stores across the country have tags which immediately identify to store staff whether the lettuce came from the compromised batch. This makes the recall much simpler.

Sure, you could track all this in a blockchain, but you could also track it in a relational database. As I see it, the blockchain would only be an improvement over the database if there doesn't exist any one organization that can be trusted to accurately maintain the database.

daverobev

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Re: What do you guys think of crypto currencies ?
« Reply #29 on: November 24, 2019, 11:19:42 AM »
Tangential, but an interesting read: https://www.bbc.co.uk/news/stories-50435014

crimp

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Re: What do you guys think of crypto currencies ?
« Reply #30 on: November 24, 2019, 01:29:12 PM »
One actual application for blockchain -- provenance.

Imagine there's an E. Coli outbreak in Romaine lettuce. The lettuce from a particular plot on a particular farm is the culprit. Luckily the movement of the lettuce from the farm to each stage in the process of distribution is required to be logged in a permissioned blockchain. When an investigator scans the bad lettuce they immediately know which distributers / which farm to check into. Once they've scanned a few, they'll have a pretty good idea where the outbreak of E. Coli came from. They declare a recall. Luckily, all the lettuce in stores across the country have tags which immediately identify to store staff whether the lettuce came from the compromised batch. This makes the recall much simpler.

Sure, you could track all this in a blockchain, but you could also track it in a relational database. As I see it, the blockchain would only be an improvement over the database if there doesn't exist any one organization that can be trusted to accurately maintain the database.

I agree in principle. The blockchain in this instance is serving as an append-only log of lettuce movements. It's just a database that has useful features for the application. You could argue that the CDC should mandate everyone upload this information to a government-run relational database. I wouldn't complain about a well-managed solution along those lines.

If the point you're trying to make is that there isn't anything that blockchain is the _only_ solution for, I'm not going to argue that point. There are plenty of tools in any given toolbox, but there's no honor in throwing a new tool away just because some people are a little too excited about it.

seattlecyclone

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Re: What do you guys think of crypto currencies ?
« Reply #31 on: November 24, 2019, 01:41:12 PM »
One actual application for blockchain -- provenance.

Imagine there's an E. Coli outbreak in Romaine lettuce. The lettuce from a particular plot on a particular farm is the culprit. Luckily the movement of the lettuce from the farm to each stage in the process of distribution is required to be logged in a permissioned blockchain. When an investigator scans the bad lettuce they immediately know which distributers / which farm to check into. Once they've scanned a few, they'll have a pretty good idea where the outbreak of E. Coli came from. They declare a recall. Luckily, all the lettuce in stores across the country have tags which immediately identify to store staff whether the lettuce came from the compromised batch. This makes the recall much simpler.

Sure, you could track all this in a blockchain, but you could also track it in a relational database. As I see it, the blockchain would only be an improvement over the database if there doesn't exist any one organization that can be trusted to accurately maintain the database.

I agree in principle. The blockchain in this instance is serving as an append-only log of lettuce movements. It's just a database that has useful features for the application. You could argue that the CDC should mandate everyone upload this information to a government-run relational database. I wouldn't complain about a well-managed solution along those lines.

If the point you're trying to make is that there isn't anything that blockchain is the _only_ solution for, I'm not going to argue that point. There are plenty of tools in any given toolbox, but there's no honor in throwing a new tool away just because some people are a little too excited about it.

I'm merely arguing that you should use the best tool for the job. A blockchain needs to run on numerous nodes, burning a rather significant amount of computational power to find the hashes necessary to sign all the blocks. Do the advantages of an append-only guarantee justify this extra resource usage in this case? I'd say probably not.

crimp

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Re: What do you guys think of crypto currencies ?
« Reply #32 on: November 24, 2019, 01:56:01 PM »
One actual application for blockchain -- provenance.

Imagine there's an E. Coli outbreak in Romaine lettuce. The lettuce from a particular plot on a particular farm is the culprit. Luckily the movement of the lettuce from the farm to each stage in the process of distribution is required to be logged in a permissioned blockchain. When an investigator scans the bad lettuce they immediately know which distributers / which farm to check into. Once they've scanned a few, they'll have a pretty good idea where the outbreak of E. Coli came from. They declare a recall. Luckily, all the lettuce in stores across the country have tags which immediately identify to store staff whether the lettuce came from the compromised batch. This makes the recall much simpler.

Sure, you could track all this in a blockchain, but you could also track it in a relational database. As I see it, the blockchain would only be an improvement over the database if there doesn't exist any one organization that can be trusted to accurately maintain the database.

I agree in principle. The blockchain in this instance is serving as an append-only log of lettuce movements. It's just a database that has useful features for the application. You could argue that the CDC should mandate everyone upload this information to a government-run relational database. I wouldn't complain about a well-managed solution along those lines.

If the point you're trying to make is that there isn't anything that blockchain is the _only_ solution for, I'm not going to argue that point. There are plenty of tools in any given toolbox, but there's no honor in throwing a new tool away just because some people are a little too excited about it.

I'm merely arguing that you should use the best tool for the job. A blockchain needs to run on numerous nodes, burning a rather significant amount of computational power to find the hashes necessary to sign all the blocks. Do the advantages of an append-only guarantee justify this extra resource usage in this case? I'd say probably not.

You don't have to use expensive proofs of work or mining in a permissioned / private blockchain. There are more efficient means of consensus. It doesn't have to use the insane energy expenditure of a bitcoin or its clones. You won't hear a positive argument from me on behalf of an ecological disaster like most cryptocurrencies. In fact, I think the point you're making is the best argument against the mass adoption of cryptocurrencies. Even ignoring the greater fool problem and questions of value the fact that bitcoin burns the same amount of electricity as an entire nation is reason enough for me to want it to fail.

In any case, we're kind of derailing the thread. I definitely didn't post here intending to serve as a blockchain or cryptocurrency apologist, so if it's all the same to you I'll just agree that the world will hum along swimmingly with or without blockchain solutions to its problems.

MoneyQuirk

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Re: What do you guys think of crypto currencies ?
« Reply #33 on: December 01, 2019, 10:38:57 PM »
I have a friend that last February jumped in and bought 4 bitcoin at $4000 each.
When he told me, he was grinning like he had won the lottery by buying them. I told him I couldn't afford that. He looked at me strangely and said, "I bet you could put something together if you really wanted to."
I told him that he mistook me. I didn't have $16k to lose on a bad investment.

 They quickly dropped down to $3000 and I had fun poking at him.

They then bounced up to $13k. He was going off the walls.

Now they've dipped down to about $7k and he's subdued, but still confident.

The entire time, my opinion hasn't changed. I don't think they have any inherent value. There is no business behind them, nothing generating returns. It is very similar to buying gold, except gold is time-proven. Bitcoin could crash tomorrow because people have lost interest.

In my opinion, park your money in VOO/VTSAX/VTI and don't worry about it. "If you must speculate, do so with no more than 5% of your portfolio" (paraphrased from The Intelligent Investor).

chevy1956

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Re: What do you guys think of crypto currencies ?
« Reply #34 on: December 02, 2019, 02:25:20 PM »
Crypto to me is a great concept but it's just another form of money. Money is only a means of exchange. It's not something that I will ever invest in. I'll use it and potentially even have a small amount of my portfolio in crypto as a cash alternative but to me investing in it is just playing a game of hot potato.

the_gastropod

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Re: What do you guys think of crypto currencies ?
« Reply #35 on: December 03, 2019, 12:07:18 PM »
You don't have to use expensive proofs of work or mining in a permissioned / private blockchain. There are more efficient means of consensus. It doesn't have to use the insane energy expenditure of a bitcoin or its clones. You won't hear a positive argument from me on behalf of an ecological disaster like most cryptocurrencies. In fact, I think the point you're making is the best argument against the mass adoption of cryptocurrencies. Even ignoring the greater fool problem and questions of value the fact that bitcoin burns the same amount of electricity as an entire nation is reason enough for me to want it to fail.

In any case, we're kind of derailing the thread. I definitely didn't post here intending to serve as a blockchain or cryptocurrency apologist, so if it's all the same to you I'll just agree that the world will hum along swimmingly with or without blockchain solutions to its problems.

Not to beat a dead horse here or anything, but I don't understand how blockchain is *in any way* an improvement over tools we've had for ~40 years. Just as a concrete example, what does a blockchain buy you in this example over a version control system like Git or Bitkeeper? I posit that a Blockchain is *exclusively* worse in virtually every respect.

scottish

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Re: What do you guys think of crypto currencies ?
« Reply #36 on: December 03, 2019, 07:57:13 PM »
Total skeptic here.   What use is a giant distributed database with a very very slow update rate?   

The only value of crypto-currency is as a cheap and boring form of entertainment watching it's trading value go up and down.

talltexan

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Re: What do you guys think of crypto currencies ?
« Reply #37 on: December 05, 2019, 07:18:23 AM »
I still remember how entertaining it was to watch $GBTC trade in the markets during that heady summer of 2017.

YttriumNitrate

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Re: What do you guys think of crypto currencies ?
« Reply #38 on: December 05, 2019, 07:26:30 AM »
Total skeptic here.   What use is a giant distributed database with a very very slow update rate?   
The only value of crypto-currency is as a cheap and boring form of entertainment watching it's trading value go up and down.

Well, it was useful for Silk Road, but that seems to be a limited use case.

Scandium

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Re: What do you guys think of crypto currencies ?
« Reply #39 on: December 05, 2019, 07:49:03 AM »
Total skeptic here.   What use is a giant distributed database with a very very slow update rate?   
The only value of crypto-currency is as a cheap and boring form of entertainment watching it's trading value go up and down.

Well, it was useful for Silk Road, but that seems to be a limited use case.

It's not really that useful either since the feds find ways to track it, and it's not really that anonymous.

marcus_aurelius

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Re: What do you guys think of crypto currencies ?
« Reply #40 on: December 05, 2019, 10:40:13 AM »
There's so much noise about crypto and I have no idea whether Bitcoin is the most incredible invention of the modern financial world, or pure crap. Still, I wanted to profit from the long tail probability that it might take off, so I bought 1 Bitcoin and 8 Etherium in 2018. I think I spent a total of ~6K US$.

-I consider this to be pure speculation rather than investment. It represents ~0.7% of my investment portfolio (non-retirement) and I will be OK if I lose this money completely.
-I have decided to hold this at least until 2025. Even longer is fine.
-I don't check the value of BTC/ETH at all.


crimp

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Re: What do you guys think of crypto currencies ?
« Reply #41 on: December 05, 2019, 06:34:25 PM »
You don't have to use expensive proofs of work or mining in a permissioned / private blockchain. There are more efficient means of consensus. It doesn't have to use the insane energy expenditure of a bitcoin or its clones. You won't hear a positive argument from me on behalf of an ecological disaster like most cryptocurrencies. In fact, I think the point you're making is the best argument against the mass adoption of cryptocurrencies. Even ignoring the greater fool problem and questions of value the fact that bitcoin burns the same amount of electricity as an entire nation is reason enough for me to want it to fail.

In any case, we're kind of derailing the thread. I definitely didn't post here intending to serve as a blockchain or cryptocurrency apologist, so if it's all the same to you I'll just agree that the world will hum along swimmingly with or without blockchain solutions to its problems.

Not to beat a dead horse here or anything, but I don't understand how blockchain is *in any way* an improvement over tools we've had for ~40 years. Just as a concrete example, what does a blockchain buy you in this example over a version control system like Git or Bitkeeper? I posit that a Blockchain is *exclusively* worse in virtually every respect.

And somehow I'm defending blockchain again on the Internet...

Git is pretty terrible at storing large volumes of data. Git LFS is fine for big single files you want to send around in a repo for some reason. However, it doesn't do the sort of tracking of changes you would want in this case. Also, the owner of a Git repo has the power to overwrite commit history and overwrite the state on master. While this is extremely poor form in a collaborative project (you should only rebase local commits), the fact that you can do this makes it a poor solution as an immutable store of provenance when the stakeholders aren't trusted to own up to their mistakes.

the_gastropod

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Re: What do you guys think of crypto currencies ?
« Reply #42 on: December 05, 2019, 08:55:03 PM »
And somehow I'm defending blockchain again on the Internet...

Git is pretty terrible at storing large volumes of data. Git LFS is fine for big single files you want to send around in a repo for some reason. However, it doesn't do the sort of tracking of changes you would want in this case. Also, the owner of a Git repo has the power to overwrite commit history and overwrite the state on master. While this is extremely poor form in a collaborative project (you should only rebase local commits), the fact that you can do this makes it a poor solution as an immutable store of provenance when the stakeholders aren't trusted to own up to their mistakes.

Hahahaha, my sympathies!

Is there anything about blockchain that makes it better at storing large volumes of data? What makes git "bad" at storing large volumes is that it's inefficient because it stores every delta. But that's also a fundamental aspect of a blockchain (via the hash tree or merkle tree). Am I missing something here?

It's true that git allows for force pushing altered histories. But it's also fully distributed. And anyone with a copy of the repo would immediately know if someone else changed history. Again, this comes from the hash tree that blockchain uses.

As far as I understand, the only advantage a blockchain gives you over a plain hash tree (or a more conventional database) is trust in a trustless system—accomplished currently by proof of work, the dreadfully  wasteful practice of guessing nonces to generate an arbitrary hash prefix. Trustless systems are exceedingly uncommon, and are basically limited to just cryptocurrencies. And even those, in practice, tend to interface with exchanges with KYC regulations, blind trust in stablecoins, etc. So even for the one thing it's supposed to be good at, nobody's really taking advantage of it. I just find all the hype terribly bizarre.
« Last Edit: December 05, 2019, 08:57:32 PM by the_gastropod »

akajoe87

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Re: What do you guys think of crypto currencies ?
« Reply #43 on: December 06, 2019, 05:33:25 AM »
I tried crypto via Robinhood. I’m going to say that I think the crypto days are gone. The government will not allow an underground currency take their power. If you got into it years ago then I’d say try it. It’s too popular now. The government will step in before you know it. IMO

crimp

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Re: What do you guys think of crypto currencies ?
« Reply #44 on: December 06, 2019, 12:02:00 PM »
And somehow I'm defending blockchain again on the Internet...

Git is pretty terrible at storing large volumes of data. Git LFS is fine for big single files you want to send around in a repo for some reason. However, it doesn't do the sort of tracking of changes you would want in this case. Also, the owner of a Git repo has the power to overwrite commit history and overwrite the state on master. While this is extremely poor form in a collaborative project (you should only rebase local commits), the fact that you can do this makes it a poor solution as an immutable store of provenance when the stakeholders aren't trusted to own up to their mistakes.

Hahahaha, my sympathies!

Is there anything about blockchain that makes it better at storing large volumes of data? What makes git "bad" at storing large volumes is that it's inefficient because it stores every delta. But that's also a fundamental aspect of a blockchain (via the hash tree or merkle tree). Am I missing something here?

It's true that git allows for force pushing altered histories. But it's also fully distributed. And anyone with a copy of the repo would immediately know if someone else changed history. Again, this comes from the hash tree that blockchain uses.

As far as I understand, the only advantage a blockchain gives you over a plain hash tree (or a more conventional database) is trust in a trustless system—accomplished currently by proof of work, the dreadfully  wasteful practice of guessing nonces to generate an arbitrary hash prefix. Trustless systems are exceedingly uncommon, and are basically limited to just cryptocurrencies. And even those, in practice, tend to interface with exchanges with KYC regulations, blind trust in stablecoins, etc. So even for the one thing it's supposed to be good at, nobody's really taking advantage of it. I just find all the hype terribly bizarre.

I work on trustless or low-trust systems (not on blockchain, but I implement / design other cryptography). As such, I admit to having a bias towards thinking trust problems matter, and against trusting organizations who don't have a particularly strong incentive to behave. That people are concerned with these problems is the reason I'm employed. I prefer my software give me strong, provable security guarantees about how it's going to protect me from misuse.

I think blockchain is the least interesting of the modern cryptographic technologies that have been gaining traction in the past five years. I'd love to see more business investment in areas like homomorphic encryption, zero-knowledge proofs, or secure multiparty computation instead of blockchain (particularly cryptocurrency). I am an ardent detractor of Bitcoin and its clones, and hate proof-of-work for the environmental damage it instigates. You don't have to achieve consensus via proof-of-work, however. Other chains use pure proof-of-stake (Byzantine consensus). This has its own problems, but doesn't require you to play the nonce guessing game. The provenance case in particular lends itself to a simple consensus mechanism in that the chain can be permissioned.

The reason I argue blockchain provides some utility for provenance is that I find it hard to believe that companies putting together a provenance system would be willing to accept a centralized solution run by another organization. Why should Walmart trust any particular farmer, and why should that farmer trust Walmart? For that matter, why should any farmer trust that its competitors won't alter the database to blame them for an outbreak? The only advantage blockchain has over other DBs is exactly what you say -- it's a way to ensure integrity without a trusted party. In application areas more sensitive than lettuce, this becomes more of a concern, but I'm arguing it's valid in this business case also. If the FDA was to mandate everyone submit their transactions to a central database, that would be a reasonable solution to the same problem. One could argue that it would be much easier for the FDA (and regulators in other domains) to just require everyone to keep track of a blockchain instead of hiring the technologists necessary to manage and secure such a database. The IRS doesn't store copies of all of your business transactions, but it does require you to hire accountants so that it can validate you're behaving when it comes by for an audit.

With respect to your particular question about data volume: as long as you have at least one copy of the whole chain somewhere at each organization, you can truncate the amount of data stored on end devices to only include the lettuce movements that are still "fresh". There's no need during normal operation to store the entire chain -- this is only necessary when you need to track history. After doing a bit of searching it appears git now supports shallow clones, so I'll put this argument firmly in your corner.

scottish

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Re: What do you guys think of crypto currencies ?
« Reply #45 on: December 06, 2019, 05:19:48 PM »
The reason I argue blockchain provides some utility for provenance is that I find it hard to believe that companies putting together a provenance system would be willing to accept a centralized solution run by another organization. Why should Walmart trust any particular farmer, and why should that farmer trust Walmart? For that matter, why should any farmer trust that its competitors won't alter the database to blame them for an outbreak? The only advantage blockchain has over other DBs is exactly what you say -- it's a way to ensure integrity without a trusted party. In application areas more sensitive than lettuce, this becomes more of a concern, but I'm arguing it's valid in this business case also. If the FDA was to mandate everyone submit their transactions to a central database, that would be a reasonable solution to the same problem. One could argue that it would be much easier for the FDA (and regulators in other domains) to just require everyone to keep track of a blockchain instead of hiring the technologists necessary to manage and secure such a database. The IRS doesn't store copies of all of your business transactions, but it does require you to hire accountants so that it can validate you're behaving when it comes by for an audit.

I don't get it.   Companies don't trust someone else to keep a centralized database.   They each have their own database, even if it's a shoebox full of purchase orders.

crimp

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Re: What do you guys think of crypto currencies ?
« Reply #46 on: December 06, 2019, 09:22:32 PM »
The reason I argue blockchain provides some utility for provenance is that I find it hard to believe that companies putting together a provenance system would be willing to accept a centralized solution run by another organization. Why should Walmart trust any particular farmer, and why should that farmer trust Walmart? For that matter, why should any farmer trust that its competitors won't alter the database to blame them for an outbreak? The only advantage blockchain has over other DBs is exactly what you say -- it's a way to ensure integrity without a trusted party. In application areas more sensitive than lettuce, this becomes more of a concern, but I'm arguing it's valid in this business case also. If the FDA was to mandate everyone submit their transactions to a central database, that would be a reasonable solution to the same problem. One could argue that it would be much easier for the FDA (and regulators in other domains) to just require everyone to keep track of a blockchain instead of hiring the technologists necessary to manage and secure such a database. The IRS doesn't store copies of all of your business transactions, but it does require you to hire accountants so that it can validate you're behaving when it comes by for an audit.

I don't get it.   Companies don't trust someone else to keep a centralized database.   They each have their own database, even if it's a shoebox full of purchase orders.

A patchwork of databases (or shoeboxes) that are fully controlled by each party doesn't provide any integrity guarantees. What's stopping anyone from misbehaving? What prevents me from colluding with another company to generate a false trail that indicts someone else for an outbreak? Sure, you have contradictory records, but there's effort involved in doing that deconfliction at exactly the moment you want to be able to respond swiftly to a problem. Even in the case of trustworthy parties this solution doesn't provide a convenient audit trail. Does a disconnected spattering of databases let an auditor quickly trace problems back to the source? You can't query across the companies records or see where lettuce from the same batch as the first contaminated sample ended up.

scottish

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Re: What do you guys think of crypto currencies ?
« Reply #47 on: December 07, 2019, 11:08:57 AM »
Oh I see.   You're envisioning some sort of global accounting system that will allow auditors to cross check records between companies/organizations.    That's an ambitious objective!