Blockchain update

[vt]

Re: Blockchain update

Adeptus, I fully agree that blockchain is the true breakthrough here. Bitcoin is but one use of the technology.

This is a an interesting take:

https://prestonbyrne.com/2017/12/08/bitcoin_ponzi/

[touchring]

Re: Blockchain update

cryptocurrencies remain a novelty or narrow application?

It seems Bitcoin/Crypto is mostly illegal in oppressive regimes because those governments have more to lose. Now give Bitcoin/Crypto another 2-4 years, and if market cap expodes to 5, 10, 50 Trillion USD... I bet even 1st world countries will be questioning it's legality as it has the power to over throw governments through citizens dumping national currencies.

A cryptocurrency may not be viable in the long term unless there is a way for governments to track its usage.

Let's take an example, what's there to prevent Kim from selling a suitcase sized nuke device to an IS group for 100 bitcoins?

In my opinion, a cryptocurrency is more than just a "harmless" speculation or bubble that will at most cause financial damages. It can potentially become a weapon for terrorists, mobs and insurgents to fund their operations, buy chemical and nuclear devices, by pass sanctions. Of course, it can go both ways, just as the Al Qaeda or IS can use cryptocurrency to fund their operation, governments can also use cryptocurrency to fund insurgents.

[thriftyandboringinohio]

Re: Blockchain update

They say inflation is always and everywhere a monetary phenomenon.
Fiat money usually gets the blame for inflation when it is printed recklessly, sometimes by a treasury and sometimes by banks as credit creation.
Cryptos are head and shoulders the most fiat of all money - without intrinsic value and printed by anyone anywhere in unlimited quantities. New ones popping up every day. Being accepted widely in exchange for dollars, euros, and yuan.

i wonder what the chart looks like for total global money supply if we include trillions of dollars of cryptos recently created?
Recall the many discussions around here about why gold was a good way to protect ourselves from runaway fiat money creation as we watched the housing crisis build up. We thought that was the most irresponsible thing we had ever seen and predicted the general size and shape of the resulting crash.

Are we now watching the crypto equivalent of the Weimar inflation?
For the Janszen Scenario we’ve been waiting around for the trigger event for kaPoom. An inflationary spike in the price of oil was once a popular candidate. Perhaps that trigger just arrived on an encrypted thumb drive.

Global Financial Crisis: “Nothing will ever beat the damage I did in 2008”
Cryptocurrency: “Hold my beer”
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[DSpencer]

Re: Blockchain update

https://www.dailywire.com/news/24589...-james-barrett

When does the site get renamed ibitcoin?

[Adeptus]

Re: Blockchain update

A cryptocurrency may not be viable in the long term unless there is a way for governments to track its usage.

yeah sorry, here, I'm going to sound like a Libertarian. Government can keep its eyes and paws off the the money I earned and invested. Yes, I believe in paying taxes, but not in an all seeing 1984 Big Brother government. What if I'm an activist and want to cause civil disobedience and raise funds to gather groups of people to protest the government in power? Perhaps in our nice civil G7 countries all is well and governments won't overly abuse their powers, but what about pretty much every country in Africa? South America? Most countries in Asia? That's just a bad idea. Crypto Currencies can offer the anonymous financial power, for the first time ever, for good people to overthrow bad governments! What we really need is anonymous money for citizens, and trackable fully transparent money for governments. Blockchains can enable that! Blockchains can also enable corruption free voting down the road. Amongst many other positive use cases.

Let's take an example, what's there to prevent Kim from selling a suitcase sized nuke device to an IS group for 100 bitcoins?

What's preventing him from just making another Super Dollar printing press and paying in cash? Pretty much nothing. Except it's a little harder to deliver the $.

Or better yet, what's to prevent North Korea from sharing nuclear plans with ISIS, or how to build XYZ types of bombs, or copies of stolen Microsoft Source code, or the stolen blue prints to whatever American fighter jet? Nothing. That's what the the Internet already enables.

In my opinion, a cryptocurrency is more than just a "harmless" speculation or bubble that will at most cause financial damages. It can potentially become a weapon for terrorists, mobs and insurgents to fund their operations, buy chemical and nuclear devices, by pass sanctions. Of course, it can go both ways, just as the Al Qaeda or IS can use cryptocurrency to fund their operation, governments can also use cryptocurrency to fund insurgents.

Correct on both accounts. What tends to happen is that criminals often are part of the first adopters of new technologies, because they need to stay ahead of the game to beat the system; eventually though, good actors also start using the technology. The reality of the world is that there are far more good actors than bad actors. If you slam down a technology because of a few bad actors, then all good actors throughout the world lose access.

Imagine if the Internet was not allowed to be commercialized because terrorists could share information as per above or pedophiles could share pictures, or, or, or...

Yes, there will be arms, terrorist, bombs and god knows what else funded by Crypto Currencies, but once it becomes mainstream, I suspect there will be far more good than bad - simply because there are far more good actors.

Today, even with Crypto Currencies at $500 Billion, do you know what the most popular currency in the world is to do bad things? THE US. DOLLAR. There is no debate on this. Even with Bitcoin at $5 Trillion market cap. The US dollar will still reign supreme for doing illicit activities around the world.

[Adeptus]

Re: Blockchain update

https://www.dailywire.com/news/24589...-james-barrett
When does the site get renamed ibitcoin?

Haha!! You beat me to it, I was going to make the same post!

[Adeptus]

Re: Blockchain update

They say inflation is always and everywhere a monetary phenomenon.
Fiat money usually gets the blame for inflation when it is printed recklessly, sometimes by a treasury and sometimes by banks as credit creation.
Cryptos are head and shoulders the most fiat of all money - without intrinsic value and printed by anyone anywhere in unlimited quantities. New ones popping up every day. Being accepted widely in exchange for dollars, euros, and yuan.

Ok, for starters "fiat" means "by government decree", so right there this analogy would fall apart, but syntax aside, your idea is still worth discussing.

So yes, new ones are popping up every day, but old ones are dying too. There will come a time when the general population gets tired of losing money in bad crypto investments and starts to figure out which ones are the worthy long term players. Right now, we're in the .COM bubble phase. Much like pets.com had a high valuation because it was a new Internet company, any zany idea associated with "blockchain" is instantly worth millions.

In the same way we have 6 major fiat currencies, and then over 100 other smaller ones, so too, we may end up with a similar situation in blockchain. The difference is that the winners will be the ones that can advance and innovate and specifically provide value. The ones that don't will lose value. We already see some of this behaviour from Bitcoin maximalists who "HODL" (hold) Bitcoin no matter the price gyrations. Why? Because they are true believers that Bitcoin is THE best crypto token out there.

i wonder what the chart looks like for total global money supply if we include trillions of dollars of cryptos recently created?

So ALL 1000 plus crypto currencies "only" add up to $500 Billion or less today. Source: https://coinmarketcap.com (look at the top of the screen)

However, that's not to say 1 or 2 years from now, the number could be at $5 Trillion. Perhaps in 3-5 years, it's at 50 Trillion. At that point, yes, it will be worthy of discussion and consideration. Today, a single tech stock - Apple, has nearly twice the valuation of ALL crypto currencies.

Are we now watching the crypto equivalent of the Weimar inflation?

So individually, most of the crypto currencies are deflationary - the opposite of what cause Weimar republic, but yes, if you create 1000 of them, on net obviously this has significant inflationary implications. Until you realize, of the 100+ crypto exchanges out there, maybe 10% trade the bottom 950 currencies, which gives them some value, but not liquidity. And over time, liquidity evaporates, and most never go to 0 simply because even if there's $0 traded per day, the last trade multiplied by the total coin supply represents the nominal valuation of that coin.

For the Janszen Scenario we’ve been waiting around for the trigger event for kaPoom. An inflationary spike in the price of oil was once a popular candidate. Perhaps that trigger just arrived on an encrypted thumb drive.
Global Financial Crisis: “Nothing will ever beat the damage I did in 2008”
Cryptocurrency: “Hold my beer”

I think the target is correct, Crypto currencies may end up growing out of control through massive world wide adoption and crashing the entire financial system; however, the "inflation" issue caused is not because of 1000 crypto currencies providing a net inflationary effect, but rather that global fiat currencies go into an inflationary spike because everyone is dumping worthless fiat currencies for deflationary crypto currencies that go up in value every other day.

[patrikkorda]

Re: Blockchain update

Global Financial Crisis: “Nothing will ever beat the damage I did in 2008”
Cryptocurrency: “Hold my beer”

+1

The most interesting part about this bubble for me is how it takes on a life of its own. The story of why bitcoin is valuable has changed several times as events unfold and the personalities in the space go from heroes to villains. Basically all of the early investors and developers of bitcoin are seen as some sort of villains today (including Roger Ver, Craig Wright, Jeff Garzik, and Gavin Andresen) partly because they have lost faith. Nevertheless, new champions of the bubble arrive onto the scene and it just keeps going. Even the crowd seems different today - in 2011 it used to be disgruntled silverbugs that didn't sell in time, now it seems like the main drivers are Japanese & South Korean teenagers that could careless about paranoid libertarianism.

This thing (or lack thereof) went from being the next form of double-entry book keeping (a distributed and immutable ledger that could process anything), to being the next money (medium of exchange), to being the next gold (scarce asset). I guess the good part is that the delusion seems to get smaller with every new story, since the potential market tends to shrink (a ledger for everything ($Infinity) > money ($100s of Trillions) > gold ($Trillions).

[thriftyandboringinohio]

Re: Blockchain update

Thanks Adeptus for your thoughtful and thorough reply.

And good on you and the others around here who spotted this opportunity early and booked some profits - nicely done.

[patrikkorda]

Re: Blockchain update

patrikkorda - I agree with every one of your statements. Thanks for chiming in. I stand corrected! ;-)

Also, I recall you went into ALT coins before I went in, so I hope that has treated you well, although I entirely disagree with you on XRP being a good coin, despite it going up 5000% in the past 1.5 years... but that's a whole other debate

To me, the fact that most people shunned XRP years ago (and still do to some extent) was an investment opportunity. Here was a "coin" that just happened to be the fastest, the most scalable, the most energy efficient, and had an actual use case (to replace SWIFT) that could be bought for cheap because it was centralized (and therefore hated). Indeed, I could see how a paranoid libertarian would refrain from buying such a "coin". However, I knew that if the industry were to keep growing, the paranoid libertarians wouldn't matter: they are a small fraction of the population. In other words, I figured XRP had the most mainstream appeal.

The irony is that bitcoin is a terrible idea even for paranoid libertarians. It is the literal opposite of anonymous and therefore has major fungibility issues. Moreover, even if you happen to take all the right precautions (VPN, Tor, cold storage, etc.) the fact that the vast majority of users do not allows the entire network to be mapped and every transaction to be traced since every transaction is forever stored on the blockchain. Thus, not only does bitcoin have scaling issues, it is a terrible private "coin" as well. The future lies in scalable "coins" and private "coins" (bitcoin is neither) - and perhaps a "coin" that can do both which is probably impossible for technical reasons.

[Adeptus]

Re: Blockchain update

So Bitcoin did have 32MB block sizes from the get go, but Satoshi begrudgingly agreed to reduce them to 1MB blocks because of "spam" transactions from the likes of Satoshi Dice. As for lack of anonymity, I think that was possibly a genius move. Governments/media can't claim they can't trace transactions, so they allow Bitcoin adoption to flourish, and now we see Blockstream work on and later slap an anonymity layer on top - oops can't shut it down now, there's too many citizens wanting it. But overall I agree, Bitcoin has become a sloth in terms of advancement in part because they can't afford to screw up. The fact that a piece of software with $250 Billion worth of capital riding on it, has been bug free for ~7 years, is a near miracle.

XRP in my mind is an example of good marketing, decent technology, but long term, useless coin. Yes the banks are going to save billions and billions in overhead costs each year by using Ripple's tech instead of SWIFT. Ripple claims something like 60% operating cost reduction for banks for inter-bank electronic transfers, but that pales in comparison when we finally have a scalable blockchain that will inevitably achieve 99.9% savings... and I see such a coin appearing by end of 2018. At best, banks are going to improve the efficiencies of various services with blockchain, but disruption to an industry only ever occurs from the outside, never from the inside.

[patrikkorda]

Re: Blockchain update

So Bitcoin did have 32MB block sizes from the get go, but Satoshi begrudgingly agreed to reduce them to 1MB blocks because of "spam" transactions from the likes of Satoshi Dice.

The 1MB blocksize limit was supposed to be a temporary measure according to Satoshi. It wasn't because, as it turns out (shocking surprise), it is virtually impossible to alter a distributed ledger with tens of thousands of nodes and millions of ignorant holders with varying interests. It is no coincidence that the market share of bitcoin held strong for 6+ years at 90%+ until the blocks became full for the first time earlier this year. Since then, the market share has started to fall rapidly and is now closer to 50%. Most of the growth of the nearly $500 billion market has come from other currencies, i.e., the network effect was destroyed by the blocksize limit.

As for lack of anonymity, I think that was possibly a genius move. Governments/media can't claim they can't trace transactions, so they allow Bitcoin adoption to flourish, and now we see Blockstream work on and later slap an anonymity layer on top - oops can't shut it down now, there's too many citizens wanting it. But overall I agree, Bitcoin has become a sloth in terms of advancement in part because they can't afford to screw up. The fact that a piece of software with $250 Billion worth of capital riding on it, has been bug free for ~7 years, is a near miracle.

It should be clear by now that the bitcoin code will not be altered in any meaningful way. If Vitalik were still trying to make Ether on top of bitcoin, at best there would be a bitcoin hard fork out there just as there is a bitcoin cash hard fork out there. Again, altering a distributed ledger with tens of thousands of nodes and millions of ignorant holders with varying interests is nearly impossible - this is its strength and weakness.

XRP in my mind is an example of good marketing, decent technology, but long term, useless coin. Yes the banks are going to save billions and billions in overhead costs each year by using Ripple's tech instead of SWIFT.

The second sentence directly contradicts the first.

and I see such a coin appearing by end of 2018.

As soon as something more scalable comes along I'll be happy to adapt - that's the reason I bought XRP in the first place - it was by far the fastest, cheapest, most scalable, and ready-to-adapt digital currency out there. If this boom in digital currencies survives another bubble, I am very confident that bitcoin's market share will continue to dramatically fall - it is neither fungible nor scalable. XRP remains the most scalable coin and, as for fungibility, I believe I know which digital currency will win that race (neither XRP nor BTC).

[Southernguy]

Re: Blockchain update

The 1MB blocksize limit was supposed to be a temporary measure according to Satoshi. It wasn't because, as it turns out (shocking surprise), it is virtually impossible to alter a distributed ledger with tens of thousands of nodes and millions of ignorant holders with varying interests. It is no coincidence that the market share of bitcoin held strong for 6+ years at 90%+ until the blocks became full for the first time earlier this year. Since then, the market share has started to fall rapidly and is now closer to 50%. Most of the growth of the nearly $500 billion market has come from other currencies, i.e., the network effect was destroyed by the blocksize limit.


It should be clear by now that the bitcoin code will not be altered in any meaningful way. If Vitalik were still trying to make Ether on top of bitcoin, at best there would be a bitcoin hard fork out there just as there is a bitcoin cash hard fork out there. Again, altering a distributed ledger with tens of thousands of nodes and millions of ignorant holders with varying interests is nearly impossible - this is its strength and weakness.


The second sentence directly contradicts the first.



As soon as something more scalable comes along I'll be happy to adapt - that's the reason I bought XRP in the first place - it was by far the fastest, cheapest, most scalable, and ready-to-adapt digital currency out there. If this boom in digital currencies survives another bubble, I am very confident that bitcoin's market share will continue to dramatically fall - it is neither fungible nor scalable. XRP remains the most scalable coin and, as for fungibility, I believe I know which digital currency will win that race (neither XRP nor BTC).

Monero?

[patrikkorda]

Re: Blockchain update

Monero?

I'm afraid not, although Monero will almost certainly go up as well if and when the fungibility debate starts. I would highly recommend this talk by Alessandro Chiesa which goes over what the fungibility issue is all about (please note: I don't think Zcash is the one either).

[Adeptus]

Re: Blockchain update

Re: XRP. That comparison chart is grossly over simplified. Missing about 20 columns in my opinion. If you just want fast cheap transactions, get a database. No need for blockchain. I could list 15+ reasons why I don't think XRP is a good long term contender vs public blockchains, but I don't want to derail this thread into such a debate.

The reality right now is that everyone that is potentially wrong is in fact still a winner. In a multi-asset mania, everyone is temporarily right, and it's not possible to see who in fact picked the long term winners until much time has passed. I.e. .COM bubble.

I have a good friend who has also made boatloads of money in crypto. Joined about same time as me. Has a PhD in STEM area. Very smart guy. Has even designed ASIC chips to mine crypto currencies. Disagrees with all my crypto picks and him and I are basically on par in terms of profit totals, year after year. It's rather bizzare if not surreal, we have a good laugh about this. He also dislikes XRP btw, but hey XRP is up like 50% since yesterday, so who am I to argue? ;-)

I will watch that video. Thanks for posting it.