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geo
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BlueFeena said:
Enjoy your nerd coins suckers, I actually work a real job and get paid real money that I can buy real shit with.


That's the thing. Take your real money, buy a bit coin and wait 3 months then sell it. It will increase in value, because fuckers just sit online 24/7 flipping bitcoins. Buy low sell high. Like stocks, but its a commodity? Some people make it their jobs just to flip the damn things.

Old Post 05-07-14 04:20 #
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AndrewB
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Bitcoin is neither a currency nor a commodity nor a stock. It's a junior currency prospect.

You don't buy it looking for stability or safety or spendability. You buy it looking for capital gains and eventual safety and stability.

Old Post 05-07-14 04:44 #
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Doom Marine
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AndrewB said:
Bitcoin is neither a currency nor a commodity nor a stock. It's a junior currency prospect.

You don't buy it looking for stability or safety or spendability. You buy it looking for capital gains and eventual safety and stability.

And yet it behaves like a currency, commodity, and stock. It's a class of asset like none other before it.

A currency by definition is anything used as a medium of exchange, including seashells used as money by ancient Arab traders. Bitcoin has been a currency ever since a pizza was paid with 10,000 BTC in 2009.

Old Post 05-07-14 04:54 #
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TheCupboard
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Just imagine, within public school systems across the USA, economics students are "investing" in virtual currency stocks for an assignment. They are learning how people go batshit insane from day to day in their investment choices.

Old Post 05-07-14 05:13 #
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printz
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I'm too dumb to understand this kind of business, but I'd like to participate when I have time to learn about it. Like anything that involves gaining money, it seems like a complex process.

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Old Post 05-07-14 07:04 #
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TheCupboard
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The complexity merely exists to prevent you from getting ripped off/make it easier for pirates to rip you off with you knowing about it.

Old Post 05-07-14 07:11 #
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Doom Marine
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TheCupboard said:
The complexity merely exists to prevent you from getting ripped off/make it easier for pirates to rip you off with you knowing about it.
Wait, if the complexity exists to prevent you from getting ripped off, how does it make it easier for pirates to rip you off? How do you reconciliate that statement?

Old Post 05-07-14 07:39 #
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TheCupboard
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There will always be computer labs and bunches of computing power to create such virtual currency. People can be ripped off because there is no refund guarantee, there is no "store credit" or anything worth exchange.

Old Post 05-07-14 08:02 #
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Doom Marine
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TheCupboard said:
There will always be computer labs and bunches of computing power to create such virtual currency. People can be ripped off because there is no refund guarantee, there is no "store credit" or anything worth exchange.
Yes, I agree. Virtual currency is essentially virtual cash, and definitely not for Joe blow, not in its current 2014 form.

The consensus in the bitcoin community is that if you don't own the private key, it's not your money.

Even if they own their private key, they are always just one click from downloading a malware that would steal their keys. This is considered a single point of failure.

One of the leading ideas under development in solving these single point of failure, is to implement an "m of n" system, where plural confirmation is required for the transaction to be legitimized. Example: 2 of 3 signatures, TFA.

Old Post 05-07-14 08:26 #
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TheCupboard
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In my family we have merely half a dozen machines running Windows 7 without extended graphics cards. We don't proclaim to have a lot of excess crunching capacity. Yet all the machines are grinding away at a bitcoin. This whole thing is about productive capacity and what we envision our wealth to be. :)

Old Post 05-07-14 08:55 #
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dew
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Doom Marine said:
A. Overseas Remittance - Western Union takes $6 of my $50 that I send overseas. One bitcoin transaction regardless of size, takes 0.0001 BTC or nothing at all.

This is an arbitrary barrier set up by banks to cash in on small money transfers, even in the age in which it costs them nothing. They can drop it at any point, but they'd have to be pressured into it (accursed regulation), because they're not nice people. Technically it's not tied to filthy fiat, however.


B. Eliminating 3rd Party Trust - Without cash, you essentially have to trust a third party in processing your payment, be it Paypal or Mastercard. With cryptocurrency, no trust is required. This eliminates overhead as well as potential privacy breach (see Target hack). For most online purchases, a trusted third party is necessary, for everything else, there's bitcoin.

Here I thought every btc transaction needs a certain amount of verifications by miners. It's a free service run on the side for now, but they will start charging fees when mining becomes less profitable. Extrapolating from this widely accepted outcome, and I speculate based on my limited knowledge, isn't it probable that only few large mining operations survive? These farms would have to deal with all the verification requests, so they'd charge for taking up their computation cycles/justify the operational costs. Eventually, the fees become more profitable than mining and here you go, specialized 3rd party trust authorities are back in town.


C. Counterfeit Resistance - The blockchain's distributed ledger and consensus system makes it virtually impossible to counterfeit crypto. Don't get me started on fiat...

So it's impossible to counterfeit, but how practical is it to use? The full blockchain seems to be 17GB now and growing. Heh, starting with bitcoin is going to be a growing pain in the dick over time. I can see lightweight clients and pruning are proposed to solve this insane design flaw, leaving the heavy lifting to miners (quick read here), but that hamstrings the entire philosophy of a decentralized currency. Regular users would sync up with 3rd party trust authorities (for fees) and isn't that just filthy socialism gorramit. Also the way btc fans handwave off these problems with "future will solve it for us" amazes me.

Joking aside, bitcoin seems to be headed towards an increasingly centralized future as design flaws stemming from decentralization will start to cripple the system. Btc banks/central operators will amass power and with no regulatory body overseeing them, they will be able to bully weaker entities (=users). Unless you let the gubment devil (or other regulatory body) in and then it's all been a pointless exercise. It's actually interesting to see how it resembles an evolving mini-society, but that returns bitcoin to being a charming mathematical/programming experiment. The original advantages seem to disappear as design flaws are addressed.


D. Store of Value - This is debatable. Yes, bitcoin and other crypto are volatile, but it's only 5 years old and hasn't reached its market saturation yet. If bitcoin ever stabilizes a few years down the road, it becomes a great way of storing your wealth from tax collectors and thieves alike (if you're tech-savvy). Fiat is a terrible store of wealth due to arbitrary inflation with the current system.

And this is the point I have the most issues with. You can't have a deflatory currency, it's just impractical in real life and it seems to stall the economy. The gold standard failed for a reason and inflation exists to kill off debts. The system forces you to work with your wealth or you start losing it. Btc promotes sitting on a pile of dragon hoard and watching the exchange rate climb. It's just a libertarian's wet dream - money makes money by itself, more money makes even more money.

It's an investment tool, and with a terrible taste of a get-rich-quick scheme. I also don't see why it should ever stabilize... even gold seems to fluctuate and that isn't based on our collective belief that it exists. That makes it a hugely impractical tool for buying anything with an "objective value" and I can only imagine the insane problems this would bring to large scale long term mega-money operations, say building a nuclear power plant. I consider btc a mostly harmless internet game for tech geeks and libertarians, but the abhorrent social implications were it to "rule the Earth" (or just, say, be consequential) make me highly unsympathetic.

Old Post 05-07-14 10:08 #
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fraggle
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dew said:
I consider btc a mostly harmless internet game for tech geeks and libertarians, but the abhorrent social implications were it to "rule the Earth" (or just, say, be consequential) make me highly unsympathetic.
I wouldn't worry about that. One of Bitcoin's major design flaws is that it's completely unscalable: blocks have limited sizes, meaning there's a limit on the rate of transactions. It hasn't been hit yet, but I suspect it's going to be a big problem in the future. More importantly, you probably couldn't run a medium-sized city on Bitcoin, let alone the entire planet.


The full blockchain seems to be 17GB now and growing. Heh, starting with bitcoin is going to be a growing pain in the dick over time. I can see lightweight clients and pruning are proposed to solve this insane design flaw, leaving the heavy lifting to miners (quick read here), but that hamstrings the entire philosophy of a decentralized currency. Regular users would sync up with 3rd party trust authorities (for fees) and isn't that just filt
And this nicely segues in - even if the block size limit is solved somehow, in order to accommodate the number of transactions from an entire country you're probably talking about hundreds of gigabytes of transaction data on a daily basis. And remember, all that data needs to be hashed and checked, because Bitcoin is crypto-based. People aren't going to be doing this on their home Internet connection any more. Suddenly you're looking at massive bandwidth and dedicated, custom-made hardware and infrastructure just to keep up with the transaction rate.

Kind of like... a bank. And if that's the model, the number-crunching/hashing all becomes a complete waste of time.


Also the way btc fans handwave off these problems with "future will solve it for us" amazes me.
I believe the trademark phrase is "this is actually a good thing for Bitcoin" - at least, that's the excuse we always hear whenever fundamental problems like the ones above are pointed out, or the news comes out that another Bitcoin-related website was the subject of massive fraud/theft, just like last week, and the week before, and the week before that.

As I said in my previous comment, don't listen to anything the Bitcoin "community" says - it's the worst kind of toxic self-delusional circlejerk. Looks like certain people in this thread may have already drunk too much of that kool-aid.

Old Post 05-07-14 16:12 #
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DooMAD
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dew said:
The gold standard failed for a reason and inflation exists to kill off debts. The system forces you to work with your wealth or you start losing it.

Perhaps that's how it's supposed to work, but in the UK and the US (probably other places, too), it's more about keeping the interest rate low to make debt cheap and then creating as much debt as possible because that's how they think you grow an economy. It's farcical.

If the majority of the money in a nation's economy is comprised of debt, it stands to reason that you can't pay back that debt without removing most of the money from the economy. So if you want the economy to grow, you create some more money out of thin air via bank loans (and the central bank chip in with a bit of QE), the commercial banks then get more interest and everyone else gets a devalued currency. That's all inflation really achieves. You can call that "growth" if you like, but only a select few are going to reap the benefits. When you stop to think about it, is that really a system you want to defend?

Fair enough if you don't want to take the crypto movement seriously, but at least take a close look at how money creation actually works.

As an alternative to Bitcoin, you could look at the Positive Money movement. They do a fantastic job of highlighting the problems with our current monetary system, although I'm not sure I agree with their proposed solution of how to fix it. An independent body charged with the sole powers of money creation sounds like it would rife with corruption and I highly doubt legislation would ever be passed to make it a reality anyway. Banks would fight vehemently against any attempt to make them surrender a profitable business model. In fact, they might be getting concerned already based on the noises people are making in certain corners of the media.

Last edited by DooMAD on 05-07-14 at 22:14

Old Post 05-07-14 22:02 #
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dew
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DooMAD said:
If the majority of the money in a nation's economy is comprised of debt, it stands to reason that you can't pay back that debt without removing most of the money from the economy.

There's a misconception in this. If your statement was true, money would have negative value, which is provably not the case. Money represents your posessions, not the state debt - that would be obligations. As long as your nation is able to pay out its obligations, your money is safe. Furthermore, nations are very credible debtors, because they're stable and most likely not going anywhere (and no one more than the US and UK), so they can pay out their obligations with more obligations.

The long term strategy is simple: keep the budget deficit under the inflation and you're killing off the state debt. Small deficits can be tolerated and deflation is frowned upon, economists jerk off to "healthy" inflation at around 2-3%.


So if you want the economy to grow, you create some more money out of thin air via bank loans (and the central bank chip in with a bit of QE), the commercial banks then get more interest and everyone else gets a devalued currency. That's all inflation really achieves. You can call that "growth" if you like, but only a select few are going to reap the benefits. When you stop to think about it, is that really a system you want to defend?

Not how the actual growth phase works. Yes, central bank pumps more "fiat" money into the economy to generate inflation on purpose. The idea is to badger people into doing something with their money instead of sewing them into pillows. Get all those untapped resources flowing. Borrowing money for investment is also encouraged, because higher inflation eats the interest. This his how the entire western civilization works at the moment and going back to hoarding dragon treasure would slay our economy in the global competition.

Old Post 05-07-14 22:33 #
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DooMAD
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dew said:

There's a misconception in this. If your statement was true, money would have negative value, which is provably not the case. Money represents your posessions, not the state debt - that would be obligations. As long as your nation is able to pay out its obligations, your money is safe. Furthermore, nations are very credible debtors, because they're stable and most likely not going anywhere (and no one more than the US and UK), so they can pay out their obligations with more obligations.


No misconceptions here. 3% of the money in the economy is physical notes and coins. the other 97% is 1s and 0s on the computers of commercial banks. Some of that 97% will be where people have deposited savings into a bank account, but the majority is printed out of thin air as per fractional reserve. It didn't exist until the banks loaned it into existence and it will be destroyed when it's paid back. Hence, it's not possible to pay off all the debt in the economy, without removing most of the money from the economy. This is true whether the state can pay it's obligations or not.

The real misconception is how most people think the banking system works, but the Bank of England themselves have admitted that the traditionally held views are actually completely wrong. Fiat money is broken. Anyone who recognises that is understandably going to think taking a punt on a new monetary experiment like crypto is worth a small investment. So it's not as batshit crazy as most of the naysayers in the thread would like to claim.

Old Post 05-07-14 23:15 #
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fraggle said:
I wouldn't worry about that. One of Bitcoin's major design flaws is that it's completely unscalable: blocks have limited sizes, meaning there's a limit on the rate of transactions. It hasn't been hit yet, but I suspect it's going to be a big problem in the future. More importantly, you probably couldn't run a medium-sized city on Bitcoin, let alone the entire planet.

And this nicely segues in - even if the block size limit is solved somehow, in order to accommodate the number of transactions from an entire country you're probably talking about hundreds of gigabytes of transaction data on a daily basis. And remember, all that data needs to be hashed and checked, because Bitcoin is crypto-based. People aren't going to be doing this on their home Internet connection any more. Suddenly you're looking at massive bandwidth and dedicated, custom-made hardware and infrastructure just to keep up with the transaction rate. Kind of like... a bank.

All valid points. Gavin Adresen, one of bitcoin's core developers, discussed most of the issues you brought up at the MIT expo a few days ago: https://www.youtube.com/watch?v=tqlvk51uS1M&t=254m30s


fraggle said:
And if that's the model, the number-crunching/hashing all becomes a complete waste of time.
The centralization problem is a real one with the advent of ASIC monopolizing the hashrate of the bitcoin network. Gone are the days in 2010 when someone can just fire up their Radeon 5870 and make money.

The waste of time is a rather harsh and superficial judgement don't you think? It's certainly doing one thing: securing the network in a distributed manner where your identity is firewalled from transaction itself, forgoing the traditional third-party trust.

Unless someone does comprehensive analysis on the energy + manpower of centralized banking vs energy + manpower of cryptocurrency, I wouldn't be so quick to conclude that the hashing power is a waste as things stand.

As bitcoin is an open-source project, I foresee the issues getting addressed as the protocol matures.


fraggle said:
I believe the trademark phrase is "this is actually a good thing for Bitcoin" - at least, that's the excuse we always hear whenever fundamental problems like the ones above are pointed out, or the news comes out that another Bitcoin-related website was the subject of massive fraud/theft, just like last week, and the week before, and the week before that.

As I said in my previous comment, don't listen to anything the Bitcoin "community" says - it's the worst kind of toxic self-delusional circlejerk. Looks like certain people in this thread may have already drunk too much of that kool-aid.

If by neutrally observing bitcoin's trend for three whole years before taking a stance on it meant drinking the kool-aid, then guilty as charged.

Like speculating any emerging new tech, bitcoin's future as it stands is uncertain. How uncertain? If 0 meant the ways of the beta-max, and 1 meant Google, I personally valuate bitcoin higher than 0.5, and have already put real money behind that wager.

We all have our opinions, but here is a chart that just about sums up why I invested: http://i.imgur.com/ejrTU8r.jpg

Old Post 05-08-14 09:42 #
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fraggle said:
I wouldn't worry about that. One of Bitcoin's major design flaws is that it's completely unscalable: blocks have limited sizes, meaning there's a limit on the rate of transactions. It hasn't been hit yet, but I suspect it's going to be a big problem in the future. More importantly, you probably couldn't run a medium-sized city on Bitcoin, let alone the entire planet.
Let's revisit this issue. The advent of sidechains may allow alternative forms of BTC currencies that can handle smaller purchases in higher volume.

Here's a quick image I drew up for the purpose of explaining this:
http://i.imgur.com/AYeGGlwl.jpg

Old Post 05-08-14 09:59 #
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Phml
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We all have our opinions, but here is a chart that just about sums up why I invested: http://i.imgur.com/ejrTU8r.jpg


1 2 5 10 20 50 100 200 500 1000 2000. Textbook manipulative chart.

Of course you'd still see the trend going upwards with an accurate scale, and the curve would be even steeper; but you'd also see much more of a rollercoaster effect.

This graph is trying to trick your brain into thinking there's a positive pattern, and into believing that pattern is largely independent of outside effects (as in, the great cosmic forces even out so no matter what individual events go on, the cycle continues and the value of BTC always moves up in the long run).


If by neutrally observing bitcoin's trend for three whole years before taking a stance on it meant drinking the kool-aid, then guilty as charged.


You don't seem neutral. You seem like you're enjoying this a lot. There's the whole startup smell around Bitcoin, young men (always young men, that's important; women tend to bring the perspective to see those ideas are silly, and older men either have been burned already, or got a kid, and down go the testosterone levels...) talking something up until they convince each other they're really smart; and frankly, that's always been part of your projected personality on DW.

Many of your arguments here rely on passion alone:

history teach us naysayers are wrong -> not true, for every successful idea a thousand fail. Winners write history.

it's open-source so it'll fix itself -> Linux's credo since the 90s, and that's probably where most of the talented programmers supporting open source hang out. Still hasn't worked out for them.

on a scale of 0 to 1 I give it 0.5 -> your random perception does not become accurate because you give it a number out of thin air. Again, classic startup talk.

Put aside personal feelings for a second and try to answer dew's points; with your own words, no references and links to a random figure of authority.

Old Post 05-08-14 11:02 #
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geo
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Doom Marine said:

http://coinmap.org/ shows businesses that accept bitcoins. Around here in Downtown Seattle, some food stands now actually accept bitcoins.



Quite a lot in my gf's area, but she lives in quite a melting pot. Like no one ethnicity is dominant. There's everything. Walmart is fastening. Food diversity is pretty hardcore too.

Old Post 05-08-14 13:02 #
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Phml said:


1 2 5 10 20 50 100 200 500 1000 2000. Textbook manipulative chart.

Of course you'd still see the trend going upwards with an accurate scale, and the curve would be even steeper; but you'd also see much more of a rollercoaster effect.

This graph is trying to trick your brain into thinking there's a positive pattern, and into believing that pattern is largely independent of outside effects (as in, the great cosmic forces even out so no matter what individual events go on, the cycle continues and the value of BTC always moves up in the long run).
figure of authority.



Reminds me of a chart that I saw in college it looked very similar to this one. Up 2x down 1.5x. Then you look at the bottom and see something where for every Up is worth 2. So 1 = 2. The chart was amplifying the Ups to look twice as good and really it was Up 1x down 1.5x.

Old Post 05-08-14 13:07 #
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Doom Marine said:
alternative forms of BTC currencies that can handle smaller purchases in higher volume.



So we're back to colonial times, then?

Old Post 05-08-14 17:31 #
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fraggle
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Doom Marine said:
The waste of time is a rather harsh and superficial judgement don't you think? It's certainly doing one thing: securing the network in a distributed manner where your identity is firewalled from transaction itself, forgoing the traditional third-party trust.

No, not at all.

The hashing is only a mechanism that facilitates making a decentralised currency possible. If you have a centralised currency you don't need to do it. To use an analogy, your online bank does conceptually the same thing (updating balances and moving funds between accounts). The point of Bitcoin is that it's supposed to do that without a central authority like a bank that has a position of power.

As dew astutely observed, Bitcoin seems to be slowly moving towards a more centralised model, and I believe that such a model will eventually be essential if people want to try to scale it up (even ignoring the block size issues). But if that's the case, the whole elaborate system just becomes pointless. Why waste time using electricity to calculate billions of hashes if it doesn't give any substantive gain?

This isn't just a hypothetical objection. Suppose you put your money in a real bank, the bank can theoretically suspend your account and seize your funds, or the government can order them to do the same. The whole point of Bitcoin is supposed to be that such a scenario isn't possible. But suppose there's a future where Bitcoin mining becomes centralised in the hands of a small number of powerful mining groups (we're already seeing this kind of insane thing happening). The government wants to seize your account; they get court orders telling those mining groups to refuse any transactions from your addresses. Your funds are seized, just like in the current banking system, and Bitcoin has failed.


Doom Marine said:
As bitcoin is an open-source project, I foresee the issues getting addressed as the protocol matures.


dew said:
Also the way btc fans handwave off these problems with "future will solve it for us" amazes me.


I don't see these issues being addressed in the future. Bitcoin isn't just a protocol: it's a set of algorithms that have been put in place and, for all intents and purposes, probably cannot be resolved. You can't change those algorithms without the strong possibility of causing massive disruption and forks in the blockchain. We've seen this happen occasionally when new releases come out that make some minor change - now imagine trying to do the same thing, deliberately, with a much larger fundamental change to how Bitcoin works. The developers know this and have rejected extensions intended to solve some of its problems - Zerocoin is an example.

It's possible that in the future, newer cryptocurrencies will be devised that resolve some of these problems. I see Bitcoin as "Crypto-currency v0.1". It's a toy proof of concept system that shows the idea is workable but isn't suitable for any of the big unrealistic dreams that people are so eager to pin to it.


Doom Marine said:

We all have our opinions, but here is a chart that just about sums up why I invested: http://i.imgur.com/ejrTU8r.jpg


"Past performance does not predict future results."

Imagine a wall somewhere near the top of that chart, where the block limit is reached and the whole thing comes crashing down.

Old Post 05-08-14 18:11 #
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Doom Marine
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Phml said:
1 2 5 10 20 50 100 200 500 1000 2000. Textbook manipulative chart.

Of course you'd still see the trend going upwards with an accurate scale, and the curve would be even steeper; but you'd also see much more of a rollercoaster effect.

It's a logarithmic chart. It shows exponential growth that is otherwise obscured by scaling.

The point of that chart is to show the bigger picture, the year-to-year trend, not the daily ups-and-down from speculative trading.

I mean, I can show you this chart too: http://blog.curry.com/images/2013/02/22/btc-chart.jpg, but the linear scaling obscures bigger picture and the regular cycle of speculative bubble followed by steady state adoption.

How is it manipulative? BTC's value is known for its legendary volatility, as with any immature technology and a natural part of growth (see Twitter or Facebook years before they went IPO).



Phml said:
This graph is trying to trick your brain into thinking there's a positive pattern, and into believing that pattern is largely independent of outside effects (as in, the great cosmic forces even out so no matter what individual events go on, the cycle continues and the value of BTC always moves up in the long run).
The bubble and correction that follows always are related by real life event. April 2013's rally was Cyprus bank run, corrected by Silk Road Hack. November 2013's rally was Chinese exchange opening, corrected by Chinese gov ban. I showed everyone a chart, with hard data, there is a ton of independent information out there if you want to prove me wrong.

I think you are making conjectures with your opinion before doing research on what I put out there, and that isn't fair.

There is a positive pattern in the year to year trend, BTC has never devalued for those who held them for 18 months or longer. The numbers don't lie.


Phml said:

You don't seem neutral. You seem like you're enjoying this a lot. There's the whole startup smell around Bitcoin, young men (always young men, that's important; women tend to bring the perspective to see those ideas are silly, and older men either have been burned already, or got a kid, and down go the testosterone levels...) talking something up until they convince each other they're really smart; and frankly, that's always been part of your projected personality on DW.

I am enjoying this venture. Of course I'm not neutral on this topic. I've been neutral on it for three years and has come to the conclusion that this is a movement worth investing my time and energy in. That is the moment neutrality ends and support begins.

I think the second part of your statement is rather jaded, and what does women and children have to do with this? We are talking about emerging tech here. Look back in the 90's, did you think there were many women and children putting things into perspective in the emerging world of the internet?



Phml said:
Many of your arguments here rely on passion alone:

history teach us naysayers are wrong -> not true, for every successful idea a thousand fail. Winners write history.

it's open-source so it'll fix itself -> Linux's credo since the 90s, and that's probably where most of the talented programmers supporting open source hang out. Still hasn't worked out for them.

on a scale of 0 to 1 I give it 0.5 -> your random perception does not become accurate because you give it a number out of thin air. Again, classic startup talk.

Put aside personal feelings for a second and try to answer dew's points; with your own words, no references and links to a random figure of authority.

So you're asking me to answer a technical topic without research reference and hard numbers? Why on earth would that even make sense?

About Linux, what do you mean it hasn't worked out for them? If by not working out meant mass adoption in the server space, then I guess it hasn't worked out for them at all: http://fosslc.org/images/stats/webservers.gif

I never said my perception was accurate as far as BTC goes, only history can verify that.

BTC is an experiment, nobody can say for sure if it will succeed or fail in the long run. I say it's good enough to take a chance on. To each his own. We'll have this conversation again in a year and see how the dialogue has changed.

Last edited by Doom Marine on 05-08-14 at 18:52

Old Post 05-08-14 18:35 #
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Doom Marine
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fraggle said:
"Past performance does not predict future results."

Imagine a wall somewhere near the top of that chart, where the block limit is reached and the whole thing comes crashing down.

Do you think that the thousands of programmers, and especially BTC core developers, would overlook this issue, not run this scenario on their VM's and adjust the arbitrary block limit accordingly? I think they're aware of it, and there's a ton of way to circumvent this scenario.

"Past performance does not predict future results." I've heard that quote so many times and it's hard for me not to facepalm every time I see it. You can use it for almost any investment or prediction if you'd like.

Of course it doesn't, but that won't mean that it won't continue along the trendline due to fundamental forces at play, and based on the fundamentals of BTC and the largely un-capitalized adoption percentage, my bet is that it will continue. I'll elaborate more on it after I get back from work.

Last edited by Doom Marine on 05-08-14 at 21:00

Old Post 05-08-14 18:43 #
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dew
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DooMAD said:
No misconceptions here. 3% of the money in the economy is physical notes and coins. the other 97% is 1s and 0s on the computers of commercial banks. Some of that 97% will be where people have deposited savings into a bank account, but the majority is printed out of thin air as per fractional reserve.

It's almost too painful to type this out, but do you actually realize what sort of currency you advocate in this thread? It took me a day to overcome the shame of having to spell this out.
And here's the second punchline: Bitcoin is "covered" by investments into electricity already burned away with nothing to show for it. It's not 1s and 0s, it's 0s and -1s! *pada psh*


It didn't exist until the banks loaned it into existence and it will be destroyed when it's paid back. Hence, it's not possible to pay off all the debt in the economy, without removing most of the money from the economy. This is true whether the state can pay it's obligations or not.

No. It won't be destroyed when it's paid back, how would that even work? The banks get their money back... and they "delete" it, because bankers are: a) the most braindead people on Earth, b) caring philantropists who only want to do right by humanity at their own expense? The freshly "imagined up" money is here with us to stay and the creditors get to keep it, that's why there's inflation and our money devaluates. It's not fucking quantum fluctuation.


The real misconception is how most people think the banking system works, but the Bank of England themselves have admitted that the traditionally held views are actually completely wrong. Fiat money is broken. Anyone who recognises that is understandably going to think taking a punt on a new monetary experiment like crypto is worth a small investment. So it's not as batshit crazy as most of the naysayers in the thread would like to claim.

That article doesn't say anything new we wouldn't know. Of course the money is IOUs, it's covered by obligations! But obligations work fairly well, they're one of the safest and most conservative types of investment. Only massive shitstorms like Greece or Argentine almost defaulting threaten their particular obligations. Meanwhile, the biggest players like the US and UK can easily spawn any amount they wish. Hell, Germany has managed to sell obligations at negative interest rate during the recent EU crisis and EU as a whole is constantly fighting off deflation for the past few years. How's them apples? Fiat is safe, euro is hard, FED controls dollar with ease and don't get me started on yuan.

I should also note that the British pound is becoming a bit player, so anything coming from the official Brit sources must be taken with a pinch of "look for agenda and butthurt".

---


Doom Marine said:
The waste of time is a rather harsh and superficial judgement don't you think? It's certainly doing one thing: securing the network in a distributed manner where your identity is firewalled from transaction itself, forgoing the traditional third-party trust.

fraggle already pointed out the flaws in this statement, but I have to pitch in with my more colourful and dystopian wording. As mining operations become centralized, larger and more powerful, they can basically profile all bitcoin users with analytical tools and attach identities to transactions. Then it's only a matter of time before governments pressure them into the same deals they have with banks. In the end, you become even less powerful in your struggle against the machine, because no one can hear you scream (you're anonymous) and no one gives a damn (there's no regulatory body).


Unless someone does comprehensive analysis on the energy + manpower of centralized banking vs energy + manpower of cryptocurrency, I wouldn't be so quick to conclude that the hashing power is a waste as things stand.

Thank you for bringing this up. I still find it amazing that so much energy and resources gets wasted on setting up rigs and grinding a pointless mathematical riddle in order to attach an arbitrary value to the results. At least the sun did most of the work for tulips, heh. Bitcoin mustn't fail, otherwise the costs will be inexcusable. All that money wasted... especially by the unqualified little folk who got sucked in by the gold craze (mining) and the get-rich-quick scheme (btc as stock commodity). If all that computation power went into SETI or cracking gene code, we might have been better off.


http://i.imgur.com/AYeGGlwl.jpg

One thing creeps into my mind... how long before you need to add bullet points for "Sells licenses for BTC operations" on the left and "Buys synchronization with the mother blockchain" on the right? It smells of corporatization, outsourcing and selling service.


It's a logarithmic chart. It shows exponential growth that is otherwise obscured by scaling.

The point of that chart is to show the bigger picture, the year-to-year trend, not the daily ups-and-down from speculative trading.


Yet it conveniently hides the fact that you can't use btc for day-to-day operations, rendering it next to useless as a currency. It even highlights correlation over data with a different scale, that's totally and inexcusably cheating and misleading, so phml is right to attack the graph.


How is it manipulative? BTC's value is known for its legendary volatility, as with any immature technology and a natural part of growth (see Twitter or Facebook years before they went IPO).

It is known to people who give a damn about it. Most people don't and this thing presents data in a skewed way that requires a lot of context and further reading. Would expect better from open source futurists.


The bubble and correction that follows always are related by real life event. April 2013's rally was Cyprus bank run, corrected by Silk Road Hack. November 2013's rally was Chinese exchange opening, corrected by Chinese gov ban. I showed everyone a chart, with hard data, there is a ton of independent information out there if you want to prove me wrong.

I think you are making conjectures with your opinion before doing research on what I put out there, and that isn't fair.


How is ANY of that a correction? Don't use a buzzword that fakes a sense of a self-correcting system. The Cyprus crisis and the Silk Road bust have absolutely nothing in common, so labeling them as a bubble-correction pair is highly manipulative. The Chinese ban didn't correct anything, it pimp-slapped the hopes&dreams of btc enthusiasts. Btc didn't solve the great geopolitical game and it's not impervious to its twists and folds, it keeps on trucking because the neckbeards cling to it with the power of a mother bear.


So you're asking me to answer a technical topic without research reference and hard numbers? Why on earth would that even make sense?

Phml was talking about young males going head first into risky ventures out of sense of adventure and gain, and here you go, admitting you don't have the answers to naysayers, but you believe in the outcome.

Old Post 05-08-14 21:00 #
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fraggle
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Doom Marine said:
Do you think that the thousands of programmers, and especially BTC core developers, would overlook this issue, not run this scenario on their VM's and adjust the arbitrary block limit accordingly?

Yes. It's not a matter of overlooking it - everyone is perfectly aware of it, there just isn't any easy way to fix it. But when the blockpocalypse comes, I'm sure everyone we'll all hear about it's Actually A Good Thing For Bitcoin.



"Past performance does not predict future results." I've heard that quote so many times and it's hard for me not to facepalm every time I see it. You can use it for almost any investment or prediction if you'd like.


Thing is though - it's true. There are laws in place that force financial firms to use that phrase to remind their customers that it's always a gamble.

It should be obvious enough that just like everything else, the price of Bitcoin isn't going to just keep going up forever. But there are thousands of people just like you who seem to assume it is, and are buying in with the assumption that they're certainly going to make money. Who knows when it will peak, but when it does, a lot of people are going to lose money.

Old Post 05-08-14 22:24 #
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DooMAD
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dew said:

It's almost too painful to type this out, but do you actually realize what sort of currency you advocate in this thread? It took me a day to overcome the shame of having to spell this out.
And here's the second punchline: Bitcoin is "covered" by investments into electricity already burned away with nothing to show for it. It's not 1s and 0s, it's 0s and -1s! *pada psh*


Well duh.

You tell me I have a misconception about how money is created, I explain why it's not a misconception and you go all captain obvious on me.



dew said:
No. It won't be destroyed when it's paid back, how would that even work? The banks get their money back... and they "delete" it, because bankers are: a) the most braindead people on Earth, b) caring philantropists who only want to do right by humanity at their own expense? The freshly "imagined up" money is here with us to stay and the creditors get to keep it, that's why there's inflation and our money devaluates. It's not fucking quantum fluctuation.

Again the misconceptions are on your end: http://www.fractionalreserves.com/why.htm



dew said:
I should also note that the British pound is becoming a bit player, so anything coming from the official Brit sources must be taken with a pinch of "look for agenda and butthurt".


Translation: "I couldn't be bothered to read it, let alone try to make sense of it".

Old Post 05-08-14 22:47 #
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dew
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DooMAD said:
Again the misconceptions are on your end: http://www.fractionalreserves.com/why.htm

On the contrary, the misconceptions stack up at your side of the court: http://originalhampster.ytmnd.com/

Old Post 05-08-14 23:17 #
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Ugh...

This discussion makes my head hurt.

Let's just say one thing:

Bitcoin is a gamble, nothing more, nothing less. Those who are smart will realize soon enough when it's time to sell.

And at that precise point all those gullible fools, of which even here are too many, will lose a lot of money.

Old Post 05-08-14 23:22 #
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Gez
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Bitcoin value keeps climbing and climbing forever with no end in sight. The sooner you buy some, the richer you'll be in the end. Early adopters have already been rewarded beyond their wildest dreams!

Yeah that's a classic Ponzi pyramid scheme. It never ends well. Once the system stops expanding -- and it will stop expending because we aren't living in an infinite world -- it'll burst.


More over, I find the very idea ill-inspired. Bitcoins are backed by what? Not by its developers, as was said earlier in the thread, it's not how backing is supposed to work. A bitcoin is fiat money. It's a token with no intrinsic value; it only has value because you trust that you can exchange it for that value. If you cannot exchange it, it is worse than useless. Contrarily to a banknote, you can't even use it to light a fire or something.

Money exists because it's a lot more convenient than bartering material goods and services against other material goods and services. The value of money is backed not by the banks, but by the states. Printing money has long been a privilege of kings (which is why coins had the king's face on them; if you are not familiar with the saying "render unto Caesar" then look it up, it's Jesus telling you should pay your taxes, something that approximatively 0% of the American Religious Right knows about) and it was a privilege of kings because money was a tool of the state. It is the state that is backing the value of money.

With the great crises of the 20th century, several states have used their ability to print more money irresponsibly. This led to the belief that states couldn't keep this privilege as they would necessarily use it irresponsibly. Instead, the privilege of printing money has been outsourced to bankers, because it was apparently thought they were quite unlikely to behave irresponsibly... And as a natural result of this stupidity, the states have had to bail the banks out, several times, which they did, because it's still their duty. When rights that were privileges of the states are transferred to the private sector, the associated duties are never transferred alongside. The idea is to privatize profit and socialize loss, after all.

None of that with bitcoin, though. If bitcoin fails, nobody will bail it out. Many bitcoin advocates would say that it's a good thing; not a bug but a feature -- but it's not. It's precisely what makes the bitcoin not a usable currency.

Let's be clear: when a currency is backed by the state, what it really means is that it's backed by society. Money is merely a token representing what society agrees is potential buying power. When you earn money, what you really get is an abstracted recognition by society that you have earned some buying potential. In the end, the system works because it has to. It's what we have come up with, it's what everybody is familiar enough with, it's what is meaningful to people, and we need it to work so we're willing to go with whatever is needed to keep it working. We need for it to work, because if it doesn't, the entire society collapses. There is none of that with bitcoin. If tomorrow nobody wants bitcoins anymore, there will not be any sort of movement to keep bitcoins working, because they already don't work. It's not a currency, it's at best a toy.

Libertarians are enamored with the idea that currency has a value outside of society. They love taking, but hate giving, so they are allergic to having to the compromises that go with living in society. SO they want the benefits of living in a society (notably for this thread, a currency that means something) without having to give anything up in exchange (such as admitting that there is something such as common interest). That means they get a hard on for bitcoin because it's a money that works how they want money to work: it's a money that doesn't actually work. Instead of being made to flow freely and constantly (and with forced redistribution mechanism, in the form of taxes and subsidies, to keep it flowing constantly), it's a money designed to be hoarded forever and only used for speculative means. It cannot be traced, so it has tax fraud built-in, and is also perfect for laundering crime money.

But because it's not a real currency, bitcoins will crumble once the Ponzi scheme runs out of expansion room.

Old Post 05-09-14 00:08 #
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