As Bitcoin Sinks, Industry Startups Are Forced to Cut Back(techcrunch.com)
techcrunch.com
As Bitcoin Sinks, Industry Startups Are Forced to Cut Back
https://techcrunch.com/2018/12/26/as-bitcoin-sinks-industry-startups-are-forced-to-cut-back/
326 comments
Preston Byrne pointed out since there is no pyramid, this can’t be called a Ponzi scheme. It deserves a new name, the “Nakamoto scheme”:
https://prestonbyrne.com/2017/12/08/bitcoin_ponzi/
https://prestonbyrne.com/2017/12/08/bitcoin_ponzi/
"Scheme" implies a unified/central schemer, though. We can already call it a fad, or a mania (a la tulip mania).
It certainly does seem to be a "scheme" but I wonder how it compares to other fiat or gold currency when looked at through a "scheme" lens.
There is. The Schemer is Satoshi Nakamoto and anyone else involved with bitcoin's initial creation. They stand to profit handily by selling off their coins at many times their original, minimal value. But unlike a ponzi scheme or pyramid scheme, one can't trace fraudulent transactions directly to the schemers. It doesn't mean that it not a scheme.
Bitcoin isn't just a fad, it was clearly designed to enrich the original founders and early adopters at the expense of whoever is left holding the bag when the bubble bursts.
Bitcoin isn't just a fad, it was clearly designed to enrich the original founders and early adopters at the expense of whoever is left holding the bag when the bubble bursts.
why not call it a bubble, just like everything else like it that has come before in history?
https://en.wikipedia.org/wiki/Tulip_mania
https://en.wikipedia.org/wiki/Tulip_mania
Because it's not just a bubble. Bitcoin is, on a technological level, specifically designed to be an inflationary digital asset that primarily benefits the founders. Whatever utility it has as medium of exchange is incidental to its primary purpose which is to enrich the founders.
Maybe bubble implies that the asset or resource has some actual value but the value was being over inflated.
Do cryptos have any real value?
Do cryptos have any real value?
Moving money around without an authority to stop you does have value. The question is whether that value is very high at all - in current society, probably not, and in a futuristic society I’d hope we’d develop trust mechanisms that don’t require the expense of total global order to move money/tokens/whatever around.
Zero-point energy bubble.
Sure, there have been multiple bubbles. Always good to see the tulip posters keeping at it.
I guess you can say it's less like a scheme and more like a meme.
Isn't most of the scheme the classic pump and dump?
I assert that the diffusion of responsibility is a key feature of decentralized technology precisely because it renders us unable to "nip it in the bud".
Not really. When the MPAA wanted action taken on torrented movies, they didn’t just throw their hands up in the air and go “whelp, it’s decentralized!“, they went after the authors of the protocol, the ISPs, hell even domain name registrars (that listed torrent websites).
You can still torrent films, but you could get prosecuted or fined. Furthermore, some content is completely censored from torrent sites.
All that to say, it’s not clear to me that “decentralized technology” can prevent the very human process of holding others accountable. It does slow down that process for now, since the software obfuscates what’s going on (who’s doing what), but regulators will understand how the tech works eventually...
All that to say, it’s not clear to me that “decentralized technology” can prevent the very human process of holding others accountable. It does slow down that process for now, since the software obfuscates what’s going on (who’s doing what), but regulators will understand how the tech works eventually...
I think that in very high-level terms, you're quite correct. You say, for example, 'it’s not clear to me that “decentralized technology” can prevent the very human process of holding others accountable' - I mean, yeah. That's a good starting point.
On the other hand, your comment betrays some of the underlying revelation here: indeed, the MPAA has gone after the centralized components of peer-to-peer file sharing, as you point out. Yet, the bit torrent protocol remains as strong as ever (which, to be fair, isn't terribly strong in the first place).
The internet has learnt and will continue to learn from this, and the next generation of censorship resistance will decentralize some of the points of failure you have listed (which we centralized in the bit torrent iteration).
As for your last point: regulators understanding how the tech works is not meaningful if regulators are no longer the ones making decisions about the world. That will be a wonderful shift if our goals include peace and justice, which governments have consistently and correctly seen as threats to their existence.
At the end of the day, my point is really this: even in the most wild-eyed crypto-anarchist fantasy, everything is fine. There's no need for the doom and gloom that we're routinely seeing on HN in threads like this.
On the other hand, your comment betrays some of the underlying revelation here: indeed, the MPAA has gone after the centralized components of peer-to-peer file sharing, as you point out. Yet, the bit torrent protocol remains as strong as ever (which, to be fair, isn't terribly strong in the first place).
The internet has learnt and will continue to learn from this, and the next generation of censorship resistance will decentralize some of the points of failure you have listed (which we centralized in the bit torrent iteration).
As for your last point: regulators understanding how the tech works is not meaningful if regulators are no longer the ones making decisions about the world. That will be a wonderful shift if our goals include peace and justice, which governments have consistently and correctly seen as threats to their existence.
At the end of the day, my point is really this: even in the most wild-eyed crypto-anarchist fantasy, everything is fine. There's no need for the doom and gloom that we're routinely seeing on HN in threads like this.
Sorry but I don’t buy this anarchist ideology. Evidence shows that these are the most peaceful times in human history, and governments are bigger than ever. Sure, we need to be smart about keeping leaders in check, and progress is jagged, but overall, aren’t you much happier to be born now than 3000 years ago? Would you have preferred to be born at any other time? Because if not, then you must realize that we’re here due to our capacity to unite and form a government that on average contributes to our progress (even if that progress is, admittedly, jagged rather than linear).
> aren’t you much happier to be born now than 3000 years ago?
Indeed I am - this is the most exciting time I can imagine being alive.
And I agree in full with everything you've said.
However, I think that governments, which have been essential for many of the developments we've enjoyed so far (and this is despite their reliably selfish and monopolistic tendencies), have largely run their course and are less useful with each passing day.
I am thankful even for my own government (in the USA), despite it being run in a completely childish fashion at this moment. But recognizing the importance of something doesn't mean that I want it to live forever. Indeed, I think it often means being willing to let it go.
Indeed I am - this is the most exciting time I can imagine being alive.
And I agree in full with everything you've said.
However, I think that governments, which have been essential for many of the developments we've enjoyed so far (and this is despite their reliably selfish and monopolistic tendencies), have largely run their course and are less useful with each passing day.
I am thankful even for my own government (in the USA), despite it being run in a completely childish fashion at this moment. But recognizing the importance of something doesn't mean that I want it to live forever. Indeed, I think it often means being willing to let it go.
Governments might be bigger, but they are a lot more limited. Indeed, we consider the Chinese and North Korean governments to be an aberration, even though they would have been considered ridiculously progressive 3000 years ago.
Also, let's not forget the 100+ million people governments still managed to kill in the 20th century, even with all those handicaps.
Also, let's not forget the 100+ million people governments still managed to kill in the 20th century, even with all those handicaps.
>You can still torrent films, but you could get prosecuted or fined.
You could, but national laws still vary a lot, and in some countries, the MPAA simply has no power to do anything. Routing BT traffic through those countries with a VPN makes it pretty difficult for them to take action.
>but regulators will understand how the tech works eventually...
Maybe, but they have no power over laws in different countries.
You could, but national laws still vary a lot, and in some countries, the MPAA simply has no power to do anything. Routing BT traffic through those countries with a VPN makes it pretty difficult for them to take action.
>but regulators will understand how the tech works eventually...
Maybe, but they have no power over laws in different countries.
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Unfortunately, it does so for everybody. Including people who have a strong interest in the world not seeing Bitcoin as scam central. It all strikes me as a classic tragedy of the commons.
And yet, should it become illegal for people to exchange fiat for crypto and for domiciled entities to own crypto all the decentralisation in the world wouldn't help.
You are talking about an extreme edge case situation, where the entire world declares crypto to be illegal.
I will agree that in this situation, crypto is probably dead.
The much more likely scenario, though, is that a couple countries try to make crypto illegal, and other countries don't, and the decentralization of crypto makes it very difficult for the attacking country to stop it.
The banning country isn't going to be able to target miners in other countries or take down exchanges that aren't located there.
Crypto is still useful in this much more likely scenario.
Think countries like Venezuela. They don't want people moving money outside the country, and yet people are doing that right now, with crypto, and the Venezuelan government can't stop it.
I will agree that in this situation, crypto is probably dead.
The much more likely scenario, though, is that a couple countries try to make crypto illegal, and other countries don't, and the decentralization of crypto makes it very difficult for the attacking country to stop it.
The banning country isn't going to be able to target miners in other countries or take down exchanges that aren't located there.
Crypto is still useful in this much more likely scenario.
Think countries like Venezuela. They don't want people moving money outside the country, and yet people are doing that right now, with crypto, and the Venezuelan government can't stop it.
Nhawww - I was thinking about the USA doing it...
The USA has proven to be extremely friendly to crypto, actually. The SEC supports it.
So once again, this hypothetical seems very unlikely.
So once again, this hypothetical seems very unlikely.
Yep, you are completely correct - so far. My reading is that they have decided that crypto is not a threat to their tax raising powers and it might provide a useful mechanism for a para-cash economy which enables more overall economic activity and yet is more amenable to monitoring and tracking and in the limit enforcement.
I don't really see the connection.
It seems to me that such a move will make decentralized money more valuable and more likely to be used, not less.
It seems to me that such a move will make decentralized money more valuable and more likely to be used, not less.
Most people don't care about decentralised money.
Stop the on/off ramps they currently use for speculation and the vast majority will stop speculating, as they were only in it for the get-rich-quick factor.
Stop the on/off ramps they currently use for speculation and the vast majority will stop speculating, as they were only in it for the get-rich-quick factor.
Again, I don't think that making it illegal to transact in crypto will have the effect of "stop[ping] the on/off ramps" - I think the opposite is far more likely.
So you think that if, say, coinbase and others are made to stop accepting deposits, Joe and Jane Retail-Investor are going to seek illegal methods to continue 'investing'?
I am think you overestimate people's interest, and underestimate just how much of a get-rich-quick bubble this has been.
I am think you overestimate people's interest, and underestimate just how much of a get-rich-quick bubble this has been.
> If it was issued and marketed by a single entity the participants would be in hot water by now for violating the Securities and Exchange laws.
What laws are being violated by Bitcoin's participants?
What laws are being violated by Bitcoin's participants?
Certainly not any SEC laws. Jay Clayton, SEC Chairman, has explicitly said that Bitcoin is not a security: https://www.investopedia.com/news/sec-chair-says-bitcoin-not...
If they were in violation of SEC laws, the parent comment is still be inaccurate since Bitcoin's immutable ledger would mean the SEC would absolutely be pursuing violations, like they are with other ICOs.
If they were in violation of SEC laws, the parent comment is still be inaccurate since Bitcoin's immutable ledger would mean the SEC would absolutely be pursuing violations, like they are with other ICOs.
> This is similar to the housing bubble, where the industry collectively hyped up the "investment" promising huge returns, yet no one was to blame when the music stopped.
Except with the housing bubble the hype was generated by the government, with Republicans touting an ownership culture party line and Democrats applauding expert control of the economy by genius planners.
Secondly, in the housing bubble asset prices were pumped by leveraged (debt-based) transactions. The Hallmark of this is a collapse that happens twice as fast as the run-up. While certainly some people made leveraged plays on crypto I doubt it was very many, which means that the damage is contained to the sector (less domino effect of defaulting entities causing their lenders to default), evidenced by how the crypto collapse is twice as slow than the run-up.
Except with the housing bubble the hype was generated by the government, with Republicans touting an ownership culture party line and Democrats applauding expert control of the economy by genius planners.
Secondly, in the housing bubble asset prices were pumped by leveraged (debt-based) transactions. The Hallmark of this is a collapse that happens twice as fast as the run-up. While certainly some people made leveraged plays on crypto I doubt it was very many, which means that the damage is contained to the sector (less domino effect of defaulting entities causing their lenders to default), evidenced by how the crypto collapse is twice as slow than the run-up.
This articulates the situation perfectly. A clear lack of checks and balances.
The entity behind BTC was smart to remain kind of anonymous.
2018 is the year that we learned that complex social problems can not be solved by technology. From the political weaponization of social media to the collapse of the ICO market we've seen that the techno-utopian dream is largely just that, a dream. Social change takes hard work and the slow building of consensus, not just clever code. We have seen, however, that we can do a lot of damage to the social fabric with poorly thought out technology so I think the era of the unregulated internet is sadly coming to a close. We really have nobody to blame but ourselves.
The next generation of internet startups is going to have to be a lot more savvy about how technology interacts with society.
The next generation of internet startups is going to have to be a lot more savvy about how technology interacts with society.
I think that the biggest issue is frankly bullshit. Bullshit in the sense of complete lack of sensitivity to the truth so long as it leads to the outcome they want. Technology isn't at fault here but bullshit is on so many levels it isn't funny.
The stupid internet rumors and social media manipulation? Bullshit because they want to influence people - they don't care if it is true or not. Company valuations? They don't care if it is productive or useful - they just want it to make money which leads to the new Tulip craze. Security theater and claims that they need to spy on everything? Bullshit to justify their positions and cover their asses. It isn't a technology - it is the social black art old as dirt that keeps being used. It causes problems everywhere because it exists on a nearly fractal level.
We see plenty of people blaming tech companies for their problems and calling for regulations? Do they care if it is true or have any idea for specific regulations in mind? And the few that are trotted out turn out to be trivially unworkable or contrary to the given purpose on so many levels like encryption bans. Because it is all bullshit - what they want is to protect their own vested interests and they don't want the truth in the same building of a skyscrapper, much less the same room because they will lose in a discussion of facts.
I would be very skeptical of anyone who claims that we need regulation on the internet - because so far all of the pushers are shoveling more bullshit.
The stupid internet rumors and social media manipulation? Bullshit because they want to influence people - they don't care if it is true or not. Company valuations? They don't care if it is productive or useful - they just want it to make money which leads to the new Tulip craze. Security theater and claims that they need to spy on everything? Bullshit to justify their positions and cover their asses. It isn't a technology - it is the social black art old as dirt that keeps being used. It causes problems everywhere because it exists on a nearly fractal level.
We see plenty of people blaming tech companies for their problems and calling for regulations? Do they care if it is true or have any idea for specific regulations in mind? And the few that are trotted out turn out to be trivially unworkable or contrary to the given purpose on so many levels like encryption bans. Because it is all bullshit - what they want is to protect their own vested interests and they don't want the truth in the same building of a skyscrapper, much less the same room because they will lose in a discussion of facts.
I would be very skeptical of anyone who claims that we need regulation on the internet - because so far all of the pushers are shoveling more bullshit.
Indeed. I found GP's comment quite insightful until it suddenly called for regulation on the internet.
Why would that change anything when we just established that not the technology but learned behaviours are the problem?
Maybe 2018 was the year that showed us that we finally need to come to terms with the fact that - yes - there are enough resources for everybody and the people who control the bulk of them still want to treat you as a dumb cog in a machine and we need to cut through all the layers of bullshit they are throwing at us.
Why would that change anything when we just established that not the technology but learned behaviours are the problem?
Maybe 2018 was the year that showed us that we finally need to come to terms with the fact that - yes - there are enough resources for everybody and the people who control the bulk of them still want to treat you as a dumb cog in a machine and we need to cut through all the layers of bullshit they are throwing at us.
To be clear - I'd prefer not to see a new wave of regulation online. I'd much rather see the tech industry clean up its own house and fix its own problems. But since the big companies still seem to be dragging their feet on this after all that's happened I'm pretty sure we're about to get dragged kicking and screaming into the sausage factory that is government regulation.
The market hates regulation but will happily sell you HIV infected blood, then, when they get regulated they cry bloody murder.
And of course regulatory capture is an issue as well.
It is a hard problem because we're dealing with psychopaths.
And of course regulatory capture is an issue as well.
It is a hard problem because we're dealing with psychopaths.
People aren't going to spontaneously stop profit seeking at the expense of society. If things are going to change, the change needs to be coordinated. That's what government is for.
The change needs to be coordinated, but how do you coordinate action between multiple actors when some of those actors are nefarious and actually acting against the change?
By punishing them with the force of law, just like we do with everyone else who doesn't follow the rules.
You missed the point where I was describing the Byzantine Generals problem, of which Byzantine Fault Tolerance solves, and BFT solutions are at the core of almost all blockchain protocols. Software imitates life.
There is no need for Byzantine tolerance when there is a single authority that is held responsible, like a bank, or a government.
Byzantine problems rarely occur in real life, they were effective invented by cryptocurrencies and "solved" by cryptocurrencies (by turning luck and wasrefulness into a measure of authority)
Byzantine problems rarely occur in real life, they were effective invented by cryptocurrencies and "solved" by cryptocurrencies (by turning luck and wasrefulness into a measure of authority)
>There is no need for Byzantine tolerance when there is a single authority that is held responsible, like a bank, or a government.
Where do you live where a single authority that is held responsible? It must be a very idyllic place. In all seriousness a single authority is both very exploitable and failure prone.
Where do you live where a single authority that is held responsible? It must be a very idyllic place. In all seriousness a single authority is both very exploitable and failure prone.
If it was exploitable and failure prone, why is it the standard going back centuries?
If somebody gets into my bank account, what happens? The Bank covers my losses as law enforcement looks into the security breach and tracks down the thief. My life is unchanged, I don't lose anything.
If somebody gets into my bitcoin wallet, what happens? I lose everything I put into it, period. Can't get it back, can't prosecute, can't have my losses covered by federal investment insurance, it's just poof, gone, and no government is going to chase it down because the design of the system prevents any authority from intervening.
Which of these is more idyllic to you? I would much rather live in the world of banks and FDIC and police and courts than to live balancing on the razor's edge in crypto-land, a keystroke away from total ruin.
If somebody gets into my bank account, what happens? The Bank covers my losses as law enforcement looks into the security breach and tracks down the thief. My life is unchanged, I don't lose anything.
If somebody gets into my bitcoin wallet, what happens? I lose everything I put into it, period. Can't get it back, can't prosecute, can't have my losses covered by federal investment insurance, it's just poof, gone, and no government is going to chase it down because the design of the system prevents any authority from intervening.
Which of these is more idyllic to you? I would much rather live in the world of banks and FDIC and police and courts than to live balancing on the razor's edge in crypto-land, a keystroke away from total ruin.
> but learned behaviours are the problem?
Regulation can codify those bad 'learned behaviours' into illegal practices, no?
Regulation can codify those bad 'learned behaviours' into illegal practices, no?
Good point. But the problem with regulation, especially in as of yet poorly understood domains, is it's hard to craft laws that target the behaviours you want to have punished without inflicting too much collateral damage on behaviours you still want to enable. And of course the ones best able to defend themselves against these regulations are the companies who can afford armies of lawyers and loophole-seekers.
My suggestion is: Punish bad behaviours by social exclusion.
So, next time one of you runs across Mark Zuckerberg at a coffee shop don't greet him, give him the stink-eye, throw a muffin at him or something :D
My suggestion is: Punish bad behaviours by social exclusion.
So, next time one of you runs across Mark Zuckerberg at a coffee shop don't greet him, give him the stink-eye, throw a muffin at him or something :D
We're going to see a lot of bullshit regulation on the internet and a lot of opportunists taking advantage of the current chaos to push their own agenda. Unfortunately we handed them the weapons they need to push these arguments by building toxic (or at least very naive) platforms like Facebook and Bitcoin. It's a shame really but the tech community has itself to blame for a lot of this.
The power struggles that have gone on in human societies for our entire existence are now starting to play out online. We should have seen this coming.
The power struggles that have gone on in human societies for our entire existence are now starting to play out online. We should have seen this coming.
In the spirit of this thread, putting "toxic" or "hate" in front of things you don't like IS bullshit.
I feel pretty justified describing Facebook in its current form as toxic. It may be accidental to some degree but Facebook as it is exists today preys on people's weaknesses and insecurities, privileges fake and alarming content, encourages habituated, addictive usage, and undermines normal face-to-face human interaction.
I think it's possible to design social media platforms without those qualities so I feel it's fair to call Facebook, like junk food or cigarettes, toxic.
I think it's possible to design social media platforms without those qualities so I feel it's fair to call Facebook, like junk food or cigarettes, toxic.
No it's not. He is making a very pertinent and truthful criticism of a trend that is swallowing up the Web and turning it into a terrible marketing cesspool.
'Toxic' and 'hate' are at very least abusable just like 'fake news'. We need to be careful and verifiable about how something is 'toxic' or 'hate' - since as seen by any marketing slogan with soundalikes to defined terms undefined terms will mean what they want them to nothing more.
Toxic should have a meaning and something /explainable/ in detail why it is toxic so that it can at least be a seed for discussion. Say for instance that League of Legend's gameplay is a breeder of toxic interactions due to its dependence on unknown teammates, anonymity, and the ability to allow disgruntled or incompetent actors to deliberately throw the game above and beyond under-performance by giving XP to the other team deliberately.
Even if one disagrees with the reasoning it can lead to actual counter reasoning and it is less readily abusible as it needs a rationale for why something is toxic.
As opposed to toxic as in 'pointing out that beloved approach X doesn't seem to work that well' just because it is disagreed with.
It is for this reason why I personally think hate speech is an ambiguous term that should generally be defined more fully if it is used in a context where the definition will matter. Saying that you dislike this platform because it is full of hate speech is fine - it is a matter of personal opinion. Saying that the law should do something about hate speech needs to be well defined.
Hate crimes are recognized and respected as a doctrine because they highlight an additional and separate aspect that makes it more heinous than just the initial crime. If someone burns an innocent man alive they are a horrible person who should be charged for the horrific murder. If someone burns a given person alive as an example to all of their class (minority, sexuality, religion) - they have committed two crimes - both the grisly murder and what may be termed 'ethnic intimidation' - it was a threat to the victim's whole class of people as an additional party wronged.
Toxic should have a meaning and something /explainable/ in detail why it is toxic so that it can at least be a seed for discussion. Say for instance that League of Legend's gameplay is a breeder of toxic interactions due to its dependence on unknown teammates, anonymity, and the ability to allow disgruntled or incompetent actors to deliberately throw the game above and beyond under-performance by giving XP to the other team deliberately.
Even if one disagrees with the reasoning it can lead to actual counter reasoning and it is less readily abusible as it needs a rationale for why something is toxic.
As opposed to toxic as in 'pointing out that beloved approach X doesn't seem to work that well' just because it is disagreed with.
It is for this reason why I personally think hate speech is an ambiguous term that should generally be defined more fully if it is used in a context where the definition will matter. Saying that you dislike this platform because it is full of hate speech is fine - it is a matter of personal opinion. Saying that the law should do something about hate speech needs to be well defined.
Hate crimes are recognized and respected as a doctrine because they highlight an additional and separate aspect that makes it more heinous than just the initial crime. If someone burns an innocent man alive they are a horrible person who should be charged for the horrific murder. If someone burns a given person alive as an example to all of their class (minority, sexuality, religion) - they have committed two crimes - both the grisly murder and what may be termed 'ethnic intimidation' - it was a threat to the victim's whole class of people as an additional party wronged.
What does Bitcoin, certainly the most self-sovereign internet platform, have to do with the corporatization of the web? If anything, it seems to me like a move in the exact opposite direction.
So "open" = "toxic"?
Or is it another aspect of Facebook and Bitcoin that you're criticizing? I fail to see another common characteristic.
Or is it another aspect of Facebook and Bitcoin that you're criticizing? I fail to see another common characteristic.
Openness is not the issue. I think algorithmic feeds are the root of a lot of the problems. They tend over time to favor sensational and negative content because that's the easiest way to drive engagement. Valuing "engagement" over all other metrics has caused a lot of the problems with this generation of social platforms IMO.
I guess I'd describe Bitcoin as more naive than toxic. The failure of its designers to see that it would mostly be used as a platform for money laundering is more a liability of an excessive faith in technology to solve human problems than it is the kind of cynical exploitation of human nature that drove Facebook.
I guess I'd describe Bitcoin as more naive than toxic. The failure of its designers to see that it would mostly be used as a platform for money laundering is more a liability of an excessive faith in technology to solve human problems than it is the kind of cynical exploitation of human nature that drove Facebook.
Getting off-topic, but don't you think it's interesting how parallel the main problem of modern "democracies" is? The quinquennial election game is purely about engagement, over all other metrics.
To come back to Bitcoin, I certainly agree that it is naive, but I don't see it as a failure.
It's too simplistic to be a replacement for fiat currencies or be the new world currency™, yes. But it had to be simple. Before even thinking about macroeconomics or social impact, it had to prove it could function at all as a trustless medium of exchange. It did so very well for a long time, now scaling the model to the world is another problem.
To come back to Bitcoin, I certainly agree that it is naive, but I don't see it as a failure.
It's too simplistic to be a replacement for fiat currencies or be the new world currency™, yes. But it had to be simple. Before even thinking about macroeconomics or social impact, it had to prove it could function at all as a trustless medium of exchange. It did so very well for a long time, now scaling the model to the world is another problem.
> The failure of its designers to see that it would mostly be used as a platform for money laundering
Is there a source on this? I have a hard time believing that's what it's "mostly" used for.
Is there a source on this? I have a hard time believing that's what it's "mostly" used for.
> I would be very skeptical of anyone who claims that we need regulation on the internet - because so far all of the pushers are shoveling more bullshit.
I agree. Two wrongs won't make it right.
I agree. Two wrongs won't make it right.
One man's truth is another's opinion.
> 2018 is the year that we learned that complex social problems can not be solved by technology.
I’ve been hearing this notion, asserted with simplicity and exhaspiration, for the past 10 years. I don’t agree. “Technical solutions to social problems”, certainly do exist. Sewer systems that keep people from contracting cholera. Cold chain logistics systems that bring nutritious foods into the hearts of cities. Prosthetic limbs and wheelchairs that give people mobility. Locks which let people keep strangers from attacking them in their homes. Sms networks that let farmers understand the markets for their crops. Do these solutions have problems? Yes. We live in a world of tradeoffs and no matter how terrible the disease, we must balance benefits and harms for every treatment.
Failures reveal failure modes and a vocation kf building things in an increasingly complex world calls us to learn more broadly about the possible impact of our work and the history of systems made of humans. If we are to call engineering a profession, we can’t abandon our calling to solve the complex social ills of our societies.
I’ve been hearing this notion, asserted with simplicity and exhaspiration, for the past 10 years. I don’t agree. “Technical solutions to social problems”, certainly do exist. Sewer systems that keep people from contracting cholera. Cold chain logistics systems that bring nutritious foods into the hearts of cities. Prosthetic limbs and wheelchairs that give people mobility. Locks which let people keep strangers from attacking them in their homes. Sms networks that let farmers understand the markets for their crops. Do these solutions have problems? Yes. We live in a world of tradeoffs and no matter how terrible the disease, we must balance benefits and harms for every treatment.
Failures reveal failure modes and a vocation kf building things in an increasingly complex world calls us to learn more broadly about the possible impact of our work and the history of systems made of humans. If we are to call engineering a profession, we can’t abandon our calling to solve the complex social ills of our societies.
Maybe it's more accurate to say that complex social problems can't be solved by technology alone. There's been a rarely questioned assumption that a bunch of hackers in a room together can single-handedly disrupt and reshape society in constructive ways. I think we're seeing now that this is a naive and even dangerous point of view.
To elaborate on your examples, things like sewers and wheelchairs benefit us but they depend on a social and legal framework to do so and require coordination, planning and consensus to be useful.
To elaborate on your examples, things like sewers and wheelchairs benefit us but they depend on a social and legal framework to do so and require coordination, planning and consensus to be useful.
Agreed on all points.
Though I’d add “on-the-ground feedback” alongside coordination and planning.
Though I’d add “on-the-ground feedback” alongside coordination and planning.
> ...so I think the era of the unregulated internet is sadly coming to a close. We really have nobody to blame but ourselves.
You had me until there. Who financed the utopian bullshit? We need to regress on this until we can find the culprit and watchlist those (types of) sources of funding.
As founders you can refuse (or be highly critical of) funding by e.g. Saudi Arabia or Russian billionaires. As an early engineer, you can choose not to work for shady outfits.
It all comes down to following the money.
You had me until there. Who financed the utopian bullshit? We need to regress on this until we can find the culprit and watchlist those (types of) sources of funding.
As founders you can refuse (or be highly critical of) funding by e.g. Saudi Arabia or Russian billionaires. As an early engineer, you can choose not to work for shady outfits.
It all comes down to following the money.
By "ourselves" I mean the tech community as a whole, both engineers and entrepreneurs. The people who financed these problematic platforms bear a lot of the responsibility, of course. But I think we engineers must also accept some of the blame. Many of the best and brightest of my generation devoted their talents to building these things and without those efforts these platforms wouldn't exist.
You can always say that if you don't build it then someone else will but in my opinion that's a cop-out. You can't simultaneously claim that engineering talent is valuable and technology is powerful and that we have no responsibility for the things we build.
You can always say that if you don't build it then someone else will but in my opinion that's a cop-out. You can't simultaneously claim that engineering talent is valuable and technology is powerful and that we have no responsibility for the things we build.
>Who financed the utopian bullshit?
That's not a question you can answer on the mainstream open internet these days.
That's not a question you can answer on the mainstream open internet these days.
> 2018 is the year that we learned that complex social problems can not be solved by technology.
speak for yourself. not a new realization for at least some.
speak for yourself. not a new realization for at least some.
What puzzled me is how comes blockchain startups did not sell their crypto for fiat just after their ICOs.
I recommended this to several of my blockchain customers but none of them listened. I dont know if that was motivated by greed or something else.
According to Game theory there is no benefit in not selling the crypto for fiat: if you raise lets say 10million during an ico (typical amount raised 6m ago), there isnt much you can do with 20M (i.e you keep the crypto and it doubles) that you cant do with “just” 10M.
However, if the crypto crashes, and become 5M, you are going to have a hard time explaining to stake holders that 5M just disappeared...
At worst you keep 10pct in crypto if really you want to keep some upside to crypto but thats it
I recommended this to several of my blockchain customers but none of them listened. I dont know if that was motivated by greed or something else.
According to Game theory there is no benefit in not selling the crypto for fiat: if you raise lets say 10million during an ico (typical amount raised 6m ago), there isnt much you can do with 20M (i.e you keep the crypto and it doubles) that you cant do with “just” 10M.
However, if the crypto crashes, and become 5M, you are going to have a hard time explaining to stake holders that 5M just disappeared...
At worst you keep 10pct in crypto if really you want to keep some upside to crypto but thats it
> What puzzled me is how comes blockchain startups did not sell their crypto for fiat just after their ICOs.
I'm not sure what's puzzling: The startups who base their business around crypto believe crypto will rise in price. A crypto startup selling all their crypto because they think there's a high risk crypto will crash in value is also sending out a very bad signal to potential investors.
I'm not sure what's puzzling: The startups who base their business around crypto believe crypto will rise in price. A crypto startup selling all their crypto because they think there's a high risk crypto will crash in value is also sending out a very bad signal to potential investors.
> The startups who base their business around crypto believe crypto will rise in price
A startup may very well work on some blockchain technology while not believing that a particular cryptocurrency will rise in price.
A startup may very well work on some blockchain technology while not believing that a particular cryptocurrency will rise in price.
But it is far less common to come across startups who believe this.
Think of blockchain startups as the top 1% of the most optimistic investors who believed in the technology so much that they created companies around an immature infrastructure.
Selection bias explains why they held even even after a 90% correction.
Selection bias explains why they held even even after a 90% correction.
What is even involved in finding a buyer for $10mm btc in usd and then getting that usd into a legal/compliant bank account? Sounds non-trivial. It's my understanding from some work I did for a crypto startup that there is approximately zero usd/btc liquidity, the apparent "usd liquidity" and "usd price" last year was actually dominated by tether-btc and tether-eth liquidity. There was not actually a functional usd/btc market at any point, at least not with liquidity necessary to justify a statement like "startup X holds $10m btc" and this whole thing is a bunch of twenty-five year old entrepreneurs learning about macroeconomics the hard way.
Circle Trade and Cumberland do OTC trades of large amounts. Nothing is magical about this. https://www.circle.com/en/trade
Sure OTC services exist (I believe Coinbase has one) but I think the whales spending $10m on BTC might have an inkling about buy low and sell high – aka they are decidedly not buying during the period between August 2017 and today, which is exactly the period they would need to be buying at scale for all these startups to unload their disintegrating assets.
You are very wrong, OTC markets are very liquid right now.
Also $10 million in BTC isn't very much, you can trade this on the public markets without slipping very much if you really want to.
Also $10 million in BTC isn't very much, you can trade this on the public markets without slipping very much if you really want to.
yes of course they are liquid now, and of course you can trade it in crypto-crypto markets, the question is if you can trade it for USD cash money in a real bank account, eight months ago
There may have been more slippage than your startup was comfortable with, but the OTC market has always been liquid enough for startups to liquidate ETH/BTC from ICOs, even in the middle of the bear market.
show us some evidence!
That's not how OTC markets work.
Have you tried to buy or sell a big amount and did you not get a price you were looking for? Or have you ever read anyone that had this problem? I don't know anyone that has ever complained about this..
Have you tried to buy or sell a big amount and did you not get a price you were looking for? Or have you ever read anyone that had this problem? I don't know anyone that has ever complained about this..
What sort of evidence are you looking for? If indeed people were having problems cashing out as you seem to think, this would have been big news. In which case you should be able to find and provide evidence of this occurring. And, if I understand you correctly, you might as well ask for evidence that investors can sell their TSLA stock for cash.
hardly anybody was even trying to cash out! As demonstrated by this headline.
Very much so, I'm not sure why you think you couldn't. 10 million really isn't that much.
The BTC/USD market on Kraken is pretty liquid. I think trading $10m wouldn't have been a problem if you spread it over a few days. They are trading $34m/day now and it would have been far more 6 months ago.
Not sure what paperwork you need - as long as you could document the source was legit it would probably be ok.
Also changing BTC/USDT would at least protected against the decline in value.
Not sure what paperwork you need - as long as you could document the source was legit it would probably be ok.
Also changing BTC/USDT would at least protected against the decline in value.
> as long as you could document the source was legit it would probably be ok.
But how many of these ICO's actually did proper KYC/AML stuff? My guess is very, very few, making getting fiat money into a legitimate bank much more difficult.
But how many of these ICO's actually did proper KYC/AML stuff? My guess is very, very few, making getting fiat money into a legitimate bank much more difficult.
Yeah not sure about that. I went for a few ICOs. The western ones all had quite a lot of KYC stuff. A Chinese one had nothing but I presume there are some banking arrangements in China that turn a blind eye. The whole China scene seemed pretty unregulated. If you wanted to launder it would probably have been the place though they seem to have cracked down now.
There's off exchange buyers and sellers of crypto who deal in orders of > 1M usd.
It's fairly trivial to go from 10M BTC to 10M of a stable coin. Can't speak on how difficult it is to do 10M stable coin/btc to us bank
It's fairly trivial to go from 10M BTC to 10M of a stable coin. Can't speak on how difficult it is to do 10M stable coin/btc to us bank
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It took me a long time to realise, but these people really do believe in bitcoin/blockchains.
The easiest person to fool is yourself.
If you haven't seen the need for an apolitical currency yet you probably never will. But maybe you're just all viewing this from the perspective of traditional speculators and haven't even considered it?
Regardless of their eventual use, bitcoin fluctuates a lot, so you shouldn't trust it if you need to have the same amount of money in a year.
It's fascinating how strongly we believe that now == how things should be. Humans have been using gold as a currency for thousands of years, and yet nowadays everyone seems to believe that nothing but state-backed paper can work as such - and anyone who wants (as you said) an apolitical currency is just weird.
State-backed paper works so much better than gold-backed currency that it's difficult to find economists who advocate returning to the gold standard without being regarded by their colleagues as quacks.
Gold currency can hardly be described as apolitical. It has been a major political issue in every country that adopted it. Political issues have included debasement and forgery of coins, bimetallism, deflation vs inflation, the legality of citizens owning bullion, the exchange rate between gold-backed paper money and actual gold, ships sinking while carrying loads of gold, countries stockpiling and transferring large amounts of gold back and forth under the Bretton Woods system, etc.
Any "apolitical" system of currency will become political as soon as it is large enough for governments to take notice of it and start trying to regulate it. Any cryptocurrency that has disputes about governance or forking also has politics.
Gold currency can hardly be described as apolitical. It has been a major political issue in every country that adopted it. Political issues have included debasement and forgery of coins, bimetallism, deflation vs inflation, the legality of citizens owning bullion, the exchange rate between gold-backed paper money and actual gold, ships sinking while carrying loads of gold, countries stockpiling and transferring large amounts of gold back and forth under the Bretton Woods system, etc.
Any "apolitical" system of currency will become political as soon as it is large enough for governments to take notice of it and start trying to regulate it. Any cryptocurrency that has disputes about governance or forking also has politics.
I think by "apolitical," they are referring to Bitcoin's property of being censorship resistant, not claiming that politics do not apply to it at all. I prefer to call it a "people's currency."
Everything you just listed here seems to have been solved by Bitcoin, including forking politics - which leaves the users in control (albeit with some political influence from lead devs) ultimately this appears to be a fair power distribution as it is economic nodes deciding the current consensus on the rules set - not miners. (For your list - no forgery, no metal debasement, no long term inflation and infinite divisibility, why shouldn't you be able to own real money? Why shouldn't market set exchange rates? No sinking ships, country stockpiling and transferring is all fair game but custody is easy for anybody to take an maintain.
I personally have no issue with someone wanting "apolitical currency" but it seems silly to chastise (not saying you're doing that here, seems closer to dancing close to that line but not going over) people for preferring the status quo. Why? If someone robs the bank that holds my money, it is insured and it is recovered. If a Mt. Gox happens with crypto, anything I have in it is gone. Also, there's some comfort in a stable currency (perhaps in the long run this would be achievable by a crypto-based currency but in its current iteration, I don't feel that to be true).
So grand scheme of things, yeah, there's pros and cons to both. Personally, I'd prefer the vast majority of my currency to be state-backed vs the alternative.
Regardless, I think the whole mining thing is consuming resources for consumption's sake so if the various coins that must be mined falter to the point that that behavior goes away, I'd be fine with this.
So grand scheme of things, yeah, there's pros and cons to both. Personally, I'd prefer the vast majority of my currency to be state-backed vs the alternative.
Regardless, I think the whole mining thing is consuming resources for consumption's sake so if the various coins that must be mined falter to the point that that behavior goes away, I'd be fine with this.
The problem is that people adopting Bitcoin activates at least two defensive behavior triggers in other people (1. devaluation of the fiat currencies they are holding, 2. jealousy towards early adopters getting rich for doing nothing).
As such, there are few people that are really neutral on cryptocurrencies and you get the kind of scam talk we see in this thread as popular consensus.
As such, there are few people that are really neutral on cryptocurrencies and you get the kind of scam talk we see in this thread as popular consensus.
In me it triggers loss aversion: I don't want to put my money in a uninsured security that could be stolen or lost at any moment with no recourse.
Is the cash in your wallet insured? If stolen do you have recourse? Now you might tell me you have no cash for this very reason. That’s fair, but probably similar to the amount of money you should allocate.
Yes my homeowner's insurance policy covers theft outside my home (although the amount of cash in my wallet is usually less than the annual deductible). If it's stolen and I can identify the thief then I do have recourse through the civil courts.
Can the cash in my wallet be stolen by a script kiddie in China if my security measures aren't exactly perfect? Does it fluctuate in value up to 10% every day?
Personally, I don’t carry cash on me. The only time I use it (kid’s lunches, lottery tickets for office pool (I refuse to be left behind in the unlikely event they win, otherwise wouldn’t play), and spur of the moment things requiring cash/check), I either withdraw right before needing or the night before. I also don’t do checks, really.
I’ve been able to get by with card for the vast majority of things, so it works for me.
I’ve been able to get by with card for the vast majority of things, so it works for me.
There's a big difference between thinking an apolitical currency might be a nice thing and thinking current crypto offerings are a viable example of one.
To me the key question is whether competitive organizations can form around incentive structures based on a decentralized currency. I think doubts and debate on that question are still reasonable.
That is indeed a great question. In general, I have found out that people are extremely inventive when there are profits to be made.
> If you haven't seen the need for an apolitical currency yet you probably never will.
I do see the need for such a currency.
But if this one of the principles crypto enthusiasts believe in, why I do see so little being done to make it a viable medium of exchange? Did everyone just caught up in the gold rush and put their focus on seeing just how much fiat they could get for their BTC?
In fact, in the past year I've seen less news about BTC and more about the hordes of offshoot alt-coins that appear to have been released for the sole purpose of separating speculators from their money.
I do see the need for such a currency.
But if this one of the principles crypto enthusiasts believe in, why I do see so little being done to make it a viable medium of exchange? Did everyone just caught up in the gold rush and put their focus on seeing just how much fiat they could get for their BTC?
In fact, in the past year I've seen less news about BTC and more about the hordes of offshoot alt-coins that appear to have been released for the sole purpose of separating speculators from their money.
Libertarian silliness isn't apolitical.
> It took me a long time to realise, but these people really do believe in bitcoin/blockchains.
Best. Comment. Of. 2018.
Especially since "these people" include some ostensibly smart cookies.
I conjecture that these people were/are trying to elevate BC to the level of adtech (Google).
Perhaps we have averted another black hole for the greatest minds of a generation.
Best. Comment. Of. 2018.
Especially since "these people" include some ostensibly smart cookies.
I conjecture that these people were/are trying to elevate BC to the level of adtech (Google).
Perhaps we have averted another black hole for the greatest minds of a generation.
Cynically the time to sell it is after the IPO for even larger gains with less responsibility. Since if you are behind a ICO and then start to sell yourself it is a clear pump and dump. After a company becomes big enough for an Initial Public Offering however it allows for a clean getaway without liability. You often notice start ups selling out after the growth starts to decline whether they are right or wrong about it - which at least lends some honesty to the transaction.
If it goes bigger after the IPO they either missed out or gave it to more capable hands. If it goes kaput they either got out just in time or it got ran into the ground by the new guys.
If it goes bigger after the IPO they either missed out or gave it to more capable hands. If it goes kaput they either got out just in time or it got ran into the ground by the new guys.
> if you raise lets say 10million during an ico (typical amount raised 6m ago), there isnt much you can do with 20M (i.e you keep the crypto and it doubles) that you cant do with “just” 10M.
By that logic, why invest in anything ever?
By that logic, why invest in anything ever?
There’s an unstated assumption that investing 10M in crypto offers high risk of losing it all. The utility of losing 10M is worse than the utility of gaining an additional 10M- and much moreso when weighted with common sense probabilities.
In most if not all cases the answer is: they can't. The price of crypto, especially that of the ICO era, is propped up by the same individuals that would most want to sell it. It's their HODLing of the coin that keeps it illiquid enough to allow them to drive the price up to the ico target and beyond. By casing out they'd be selling largely to themselves + the thin wisp of actual rubes they've duped into believing there's any substantial buy support under the listed market price.
If you do that people will think you're exiting and your company will tank massively.
True believers make terrible investment decisions.
At what price will the Bitcoin death spiral occur? (i.e. when it costs more to produce/handle Bitcoin than the revenue generated, so best move is to just exit the crypto industry).
Don't bitcoin costs adjust to a shrinking miner population as well as it adjusts for a growing one?
If so, the answer is never. As people give-up, the costs for the remaining ones reduce so that at some point it's lucrative again.
The interesting question is at what price people will stop speculating on its price and run to an exit? I don't think anybody can answer this one.
If so, the answer is never. As people give-up, the costs for the remaining ones reduce so that at some point it's lucrative again.
The interesting question is at what price people will stop speculating on its price and run to an exit? I don't think anybody can answer this one.
The difference is that even if the difficulty adjusts, there will be dormant ASICs waiting to be used. If the price lowers enough and enough ASICs are out on the bench, it’ll at one point becoming economically beneficial to turn them all on and attack the network rather than having them collect dust and depreciate.
People vastly overestimate the profitability of attacking a crypto network.
There are tons and tons of much smaller coins, that can be attacked for very cheap, and yet attacks are still very rare.
IMO, this is because double spends just aren't a very good idea. If you tried to steal money from an exchange, everyone would know it was you doing the attack, and then they wouldn't accept your money in the future, or maybe you'd just go to jail instead.
Also, the network is not static. If there is lots of hashpower sitting unused, maybe that hashpower would turn in to defend against an attack.
More people have something to lose from a successful attack, and thus could be motivated to defend when an attack happens.
There are tons and tons of much smaller coins, that can be attacked for very cheap, and yet attacks are still very rare.
IMO, this is because double spends just aren't a very good idea. If you tried to steal money from an exchange, everyone would know it was you doing the attack, and then they wouldn't accept your money in the future, or maybe you'd just go to jail instead.
Also, the network is not static. If there is lots of hashpower sitting unused, maybe that hashpower would turn in to defend against an attack.
More people have something to lose from a successful attack, and thus could be motivated to defend when an attack happens.
Haha, then “PoW is for security” is a myth. If you are correct (which is arguable), then you don’t need PoW, you just need an elected federation of validators. And validators won’t attack because of the counter-incentives you describe.
So either PoW has a security hole related to dormant ASICs or it’s useless. Either way it’s not a good look.
So either PoW has a security hole related to dormant ASICs or it’s useless. Either way it’s not a good look.
This is a somewhat weak argument. I could say the same thing about door locks.. no lock is perfect and an attacker with sufficient resources can successfully subvert pretty much any lock. We don't depend only on locks but on police, neighbors, security-alarms, etc. This does not mean that locks are useless.
PoW provides some amount of security but in order to pull off a double-spend you have to not only gain majority hashrate, but also somehow actually spend/cash-out both 'copies' of your coins. This carries substantial risk as you first have to be long those coins (not smart when you are attacking the network). Then convince exchanges to convert both 'copies' while hoping they don't have systems that notice the massive increase in hash-rate nor the unexpected fork you are creating.
Simply shorting a coin, then attacking as more of a DoS may be more feasible but still carries risk as a successful defense could positively affect price.
PoW provides some amount of security but in order to pull off a double-spend you have to not only gain majority hashrate, but also somehow actually spend/cash-out both 'copies' of your coins. This carries substantial risk as you first have to be long those coins (not smart when you are attacking the network). Then convince exchanges to convert both 'copies' while hoping they don't have systems that notice the massive increase in hash-rate nor the unexpected fork you are creating.
Simply shorting a coin, then attacking as more of a DoS may be more feasible but still carries risk as a successful defense could positively affect price.
I don't think your reasoning here is sound. PoW is the elected federation of validators, it's just that they're elected in a very flexible way.
Dormant POW could be as much of a benefit as it is a drawback.
If someone owns 10s of millions of dollars worth of miners that are temporarily turned off, do you think this entity would want an attack to succeed?
No. They'd want to protect their future investment in mining equipment. They might just turn that hashpower back in, if an attack was in progress, and take a temporary loss to fight off a temporary attack.
Even the threat of a big player coming in to prevent an attack would make the risk of attacking way to high.
We saw this happen recently when someone tried to attack the Bitcoin Cash network. Defending miners temporarily turned on their hashpower to stop any attacks. And it worked.
If someone owns 10s of millions of dollars worth of miners that are temporarily turned off, do you think this entity would want an attack to succeed?
No. They'd want to protect their future investment in mining equipment. They might just turn that hashpower back in, if an attack was in progress, and take a temporary loss to fight off a temporary attack.
Even the threat of a big player coming in to prevent an attack would make the risk of attacking way to high.
We saw this happen recently when someone tried to attack the Bitcoin Cash network. Defending miners temporarily turned on their hashpower to stop any attacks. And it worked.
> If someone owns 10s of millions of dollars worth of miners that are temporarily turned off, do you think this entity would want an attack to succeed?
Well that depends on how much they're holding and how deep they are in the hole at the given time.
> No. They'd want to protect their future investment in mining equipment.
Unless they were in financial trouble and an attack would get them some cash, fast. The sort of financial trouble that can happen when a company invests, say, millions and millions of dollars into now-unprofitable hardware.
Well that depends on how much they're holding and how deep they are in the hole at the given time.
> No. They'd want to protect their future investment in mining equipment.
Unless they were in financial trouble and an attack would get them some cash, fast. The sort of financial trouble that can happen when a company invests, say, millions and millions of dollars into now-unprofitable hardware.
What I am saying is, that it one "desperate" miner attacks, then 5 other miners, who don't want to lose their investment, will defend.
The network is not static. It doesn't matter if one miner wants to make a quick buck, because the defenders have more to lose, and would spin up defending POW if needed.
The network is not static. It doesn't matter if one miner wants to make a quick buck, because the defenders have more to lose, and would spin up defending POW if needed.
Until/unless a large player takes this sort of approach, like, say, Bitmain, who have just hit massive financial difficulties.
It absolutely can be in the rational self interest of such players. Relying on other dormant capacity to come up in defence seems fanciful at best.
It absolutely can be in the rational self interest of such players. Relying on other dormant capacity to come up in defence seems fanciful at best.
> There are tons and tons of much smaller coins, that can be attacked for very cheap, and yet attacks are still very rare.
If they can be attacked cheaply, then by definition there's not much money to gain from doing that.
If they can be attacked cheaply, then by definition there's not much money to gain from doing that.
I am skeptical of cryptocurrency networks in general but one thing that they share is the general 'attack resistance' of trade and markets in that attacking it ruins the value they would seek to steal.
If you try raiding a market the trade will dry up as traders won't want to come where they may be attacked and trading with people who attack traders is bad for business given the precedents it establish for property rights. Essentially even if you could seize it all it would be worth a fraction of the value because nobody wants to give their goods/money to 'dicks who steal stuff from traders' for the same reason you don't go to barbecues with cannibals. This is one way that markets and trade help promote peace - war becomes a losing move and ones who anger others less are better resourced
If they want to take everything by force you need to seize the goods and means of production themselves - which also highlights why communist countries have had terrible economies - in addition to all of the economic fallacies. Expropriation scares people off.
Come to think of it this is something that has bitten Haiti with its history and highlights the amorality of the effect. Slaves suffered under conditions so brutal that the slave population was sustained through importation instead of reproduction, greed and economic forces caused slaves to vastly outnumber the masters, and machetes were indispensable tools for sugar plantations. While their grievance was justified they were pretty much embargoed pariahs as a result.
The point being that these phenomenon aren't moral or immoral in themselves and are something that should be kept in mind by all actors.
If you try raiding a market the trade will dry up as traders won't want to come where they may be attacked and trading with people who attack traders is bad for business given the precedents it establish for property rights. Essentially even if you could seize it all it would be worth a fraction of the value because nobody wants to give their goods/money to 'dicks who steal stuff from traders' for the same reason you don't go to barbecues with cannibals. This is one way that markets and trade help promote peace - war becomes a losing move and ones who anger others less are better resourced
If they want to take everything by force you need to seize the goods and means of production themselves - which also highlights why communist countries have had terrible economies - in addition to all of the economic fallacies. Expropriation scares people off.
Come to think of it this is something that has bitten Haiti with its history and highlights the amorality of the effect. Slaves suffered under conditions so brutal that the slave population was sustained through importation instead of reproduction, greed and economic forces caused slaves to vastly outnumber the masters, and machetes were indispensable tools for sugar plantations. While their grievance was justified they were pretty much embargoed pariahs as a result.
The point being that these phenomenon aren't moral or immoral in themselves and are something that should be kept in mind by all actors.
Didn't think about it.
That's a relevant threat to every coin that can use the Bitcoin ASICs. And probably will even happen to others before hitting BTC itself.
That's a relevant threat to every coin that can use the Bitcoin ASICs. And probably will even happen to others before hitting BTC itself.
Cost of 51% attacks on various coins: https://www.crypto51.app/
If they’re dormant, by definition they’re already unprofitable to operate. If the price decreases further, only the most efficient miners will remain, not the least efficient of them.
Unprofitable to operate in friendly conditions*
If you can flip a switch and 10x the hashrate of a network, all under your control, and you don’t care about killing the chain in your attack, it may be a perfect exit for you if you no longer want to play the mining game.
There’s actually a mining pool doing something like this on smaller PoW bitcoins https://sharkpool.cash (not associated, just think it’s interesting)
If you can flip a switch and 10x the hashrate of a network, all under your control, and you don’t care about killing the chain in your attack, it may be a perfect exit for you if you no longer want to play the mining game.
There’s actually a mining pool doing something like this on smaller PoW bitcoins https://sharkpool.cash (not associated, just think it’s interesting)
Any large miner will be profitable mining long before they have more dormant hashing power to 51% bitcoin.
Can you explain why this is the case, especially when the value of BTC is declining? The capital costs (ASICs and the power hookups) are sunk costs, and if it stops being profitable to opwerate all the ASICs honestly, or even to operate any of them if you don't have the lowest cost per hash on the network, then it may be quite valuable to attack the network and barely valuable at all to continue mining normally.
Quite likely an attack on BitCoin would send the price trough the floor before you would be able to cash out.
How do you cash out on this kind of attack if by your own actions you're crashing the value of the coin?
Short it.
Or double spend. E.g. you could send coins to an exchange, cash out, then mine off an old block to get your coins back.
Very true. I still believe this happened in Bitcoin in 2013... When Pieter Wuille and Luke DashJr decided to abandon the v0.8 fork and told the miners to hop on v0.7, they could have easily sold v0.8 coins...
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I've speculated before that the Chinese government may use this to sow confusion in the event of an altercation, "hot" or otherwise, with the West - in which case, the profitability of a miner is moot, only the ability to spin up a majority of the network.
Instead of “strategic oil reserves” countries will need “strategic Bitcoin miner reserves”.
Getting those ASICs from where they are unused to where someone can use them to attack the network is not a simple task. The only way this becomes possible is if the current owner of the hardware decides to attack the network. Even to buy the hardware will require a large capital input, let's at you can buy $1m worth of hardware and ship it to your location within 7 days (shipping and setup), you then need to run it (electricity cost) and hope that you can recoup costs plus profit by double spending. The only option to double spend and profit is to double spend on an exchange and withdraw fiat currency before the exchange realises, the speed at which fiat transfers work this is highly unlikely.
Couldn't the protocol be extended, such that the hash algorithm could be switched periodically, in such a way that ASICs would no longer be profitable to produce?
That's essentially the approach Monero has taken. From [1],
> In sum, we strongly believe that it's beneficial to preserve our ASIC resistance. Therefore, we will perform an emergency hard fork to curb any potential threat from ASICs if needed. Furthermore, in order to maintain its goal of decentralization and to provide a deterrent for ASIC development and to protect against unknown or undetectable ASIC development, the Monero team proposes modifying the Cryptonight PoW hash every scheduled fork, twice a year.
[1] https://ww.getmonero.org/2018/02/11/PoW-change-and-key-reuse...
> In sum, we strongly believe that it's beneficial to preserve our ASIC resistance. Therefore, we will perform an emergency hard fork to curb any potential threat from ASICs if needed. Furthermore, in order to maintain its goal of decentralization and to provide a deterrent for ASIC development and to protect against unknown or undetectable ASIC development, the Monero team proposes modifying the Cryptonight PoW hash every scheduled fork, twice a year.
[1] https://ww.getmonero.org/2018/02/11/PoW-change-and-key-reuse...
In theory yes, the algorithm could be changed or even moved away from proof of work and towards proof of stake (I think ETH is doing this?)
In practice bitcoin is somewhat resistant to large changes or forks, most anyone who would consider any type of alteration to the existing implementation forked off with bitcoin cash for a relatively minor change (block size). That self selection has left a staunchly "traditionalist" majority in the remaining bitcoin community.
In practice bitcoin is somewhat resistant to large changes or forks, most anyone who would consider any type of alteration to the existing implementation forked off with bitcoin cash for a relatively minor change (block size). That self selection has left a staunchly "traditionalist" majority in the remaining bitcoin community.
Otherwise known as the “latent surplus capacity ratchet”.
The difficulty adjustment only occurs after a certain number of blocks are mined. If the price drops rapidly enough that most miners shut down, it might never get to the difficulty adjustment.
That would have to be a pretty spectacular decrease. The difficulty changes every 2016 blocks, which is typically 2 weeks. If 3/4 of all miners dropped out, it'd take 8 weeks instead. Once that difficulty change kicks in, it'd likely be a pretty big drop, yo-yo'ing in miners that may have been unprofitable before. Keep in mind that many miners are operating with little to no marginal costs (ie electricity costs) so there will always be someone mining even when it seem irrational.
Also kerp in mind that a 75% reduction in the net hashrate would result in congestion, and therefore higher transaction fees which would dampan the loss of mining power until the adjustment.
There are still fixed costs and opportunity costs. Even if the fixed costs are low enough that bitcoin will always be slightly profitable it still might not be profitable enough for big business to really bother.
[deleted]
The costs for fiat exchanges, payment gateways, etc etc, do not scale like that. Only the mining difficulty does.
Bitcoin was doing perfectly fine at $100, so I think these predictions are a bit premature and have some recency bias.
The price drop does lower the amount of security in the network, so it becomes cheaper to attack it. However, it also means the payoff to attack is lower.
The price drop does lower the amount of security in the network, so it becomes cheaper to attack it. However, it also means the payoff to attack is lower.
Correct me if I'm wrong, but I thought mining coins took power as time went on. Thus what it took to do the job in the past isn't what it would take today and thus past mining really wouldn't be comparable.
The difficulty (amount/cost of power required) goes up over time when the price goes up because more miners join the network as it becomes more profitable, which means that on average new coins are produced more often. The network targets a certain rate of production and it does this by increasing the difficulty.
If the price drops and miners leave this will happen in reverse and coins will not be produced fast enough, then the difficulty will reduce (meaning less power is required to mine a block). The network would be fine even back at $100.
If the price drops and miners leave this will happen in reverse and coins will not be produced fast enough, then the difficulty will reduce (meaning less power is required to mine a block). The network would be fine even back at $100.
Forgive me as I don't quite grok bitcoin.
Does the math to calculate a coin change based on... price?
For some reason I assumed the mathematical difficulty just naturally increased as part of what in my mind is "the mathematical problem" vs. number of coins.
Does the math to calculate a coin change based on... price?
For some reason I assumed the mathematical difficulty just naturally increased as part of what in my mind is "the mathematical problem" vs. number of coins.
No, the difficulty is based on the average rate of generation of blocks over the last few weeks.
If people put less computational power into generating blocks, fewer blocks will be generated. After each n blocks, nodes adjust their difficulty based on how long it took to generate those blocks, to try and achieve an average of a block every 10 minutes.
But how much computational power people are willing to put in depends on price. It only makes sense to mine if you get more out than you put in in the cost of buying the hardware, amortized over the life of the hardware, plus the cost of the power used in mining. If the price of Bitcoin drops, there are fewer people for whom it makes economic sense to continue mining, so some will turn off their miners, reducing the hash rate.
When global hash rate reduces like this, and the difficulty drops, then the people remaining will get more BTC per unit time from mining, so it can make economic sense for them to continue mining, as long as the price doesn't drop further. So indirectly, the total hash power of the bitcoin network is linked to the price of bitcoin; or, the price of bitcoin relative to the price of electric power.
If people put less computational power into generating blocks, fewer blocks will be generated. After each n blocks, nodes adjust their difficulty based on how long it took to generate those blocks, to try and achieve an average of a block every 10 minutes.
But how much computational power people are willing to put in depends on price. It only makes sense to mine if you get more out than you put in in the cost of buying the hardware, amortized over the life of the hardware, plus the cost of the power used in mining. If the price of Bitcoin drops, there are fewer people for whom it makes economic sense to continue mining, so some will turn off their miners, reducing the hash rate.
When global hash rate reduces like this, and the difficulty drops, then the people remaining will get more BTC per unit time from mining, so it can make economic sense for them to continue mining, as long as the price doesn't drop further. So indirectly, the total hash power of the bitcoin network is linked to the price of bitcoin; or, the price of bitcoin relative to the price of electric power.
> Does the math to calculate a coin change based on... price?
Indirectly.
> "the mathematical problem"
The mathematical problem is producing blocks. A block is a collection of transactions and a bit of metadata, including the address which gets the block reward. The block is hashed along with a counter or random factor (nonce), which is manipulated to try to find a sha-256 output with a certain number of leading 0 bits. The number of zeroes required by the network is the difficulty (this may be somewhat oversimplified).
Hashing has costs, hardware and power mostly. When the price of BTC rises such that the expected income is greater than the expected costs, people switch on more equipment and the network hashrate goes up.
As the hashrate goes up, the difficulty is adjusted by the network in order to keep the new block finidng time at about 10 minutes. If the price falls, miners find it unprofitable, go offline, the hashrate drops and then the difficulty also drops to keep the block time about the same. In this way the costs and rewards balance out.
But this also means that as the price of BTC rises, so does its (already huge) power consumption.
Indirectly.
> "the mathematical problem"
The mathematical problem is producing blocks. A block is a collection of transactions and a bit of metadata, including the address which gets the block reward. The block is hashed along with a counter or random factor (nonce), which is manipulated to try to find a sha-256 output with a certain number of leading 0 bits. The number of zeroes required by the network is the difficulty (this may be somewhat oversimplified).
Hashing has costs, hardware and power mostly. When the price of BTC rises such that the expected income is greater than the expected costs, people switch on more equipment and the network hashrate goes up.
As the hashrate goes up, the difficulty is adjusted by the network in order to keep the new block finidng time at about 10 minutes. If the price falls, miners find it unprofitable, go offline, the hashrate drops and then the difficulty also drops to keep the block time about the same. In this way the costs and rewards balance out.
But this also means that as the price of BTC rises, so does its (already huge) power consumption.
Not exactly, but they loosely correlate. Difficulty changes with overall hash rate. There have been times when the hash rate was increasing even as the price was going down. Miners have a different profitability calculus than investors/speculators.
[deleted]
>However, it also means the payoff to attack is lower.
"Your money is safe because it's not worth anything anyway."
"Your money is safe because it's not worth anything anyway."
As others have pointed out, the difficulty adjusts both up and down depending on the total work being done by the network, so no death cycle is possible.
Additionally, even when there are rapid drops in value (and thus mining), people still want to transact Bitcoin, so transaction fees go up and become a significant percentage of the overall value of a new block, thus compensating miners for the reduced value of the block reward.
There is no death spiral; there's just regular increase/decrease in value over time.
Additionally, even when there are rapid drops in value (and thus mining), people still want to transact Bitcoin, so transaction fees go up and become a significant percentage of the overall value of a new block, thus compensating miners for the reduced value of the block reward.
There is no death spiral; there's just regular increase/decrease in value over time.
>As others have pointed out, the difficulty adjusts both up and down depending on the total work being done by the network, so no death cycle is possible.
It's true that the difficulty adjusts both up and down, however it does so over 2016 block intervals. If a sufficiently fast and large drop in value/hashrate occurs, the chain could well 'death spiral'. The drop simply has to occur within the adjustment interval (2016 blocks- or 14 days).
That said, recovering from a death spiral is as simple as a new Bitcoin Core release that hard-forks the difficulty to a new, workable level, so the fatalistic view of death spirals is still wrong.
It's true that the difficulty adjusts both up and down, however it does so over 2016 block intervals. If a sufficiently fast and large drop in value/hashrate occurs, the chain could well 'death spiral'. The drop simply has to occur within the adjustment interval (2016 blocks- or 14 days).
That said, recovering from a death spiral is as simple as a new Bitcoin Core release that hard-forks the difficulty to a new, workable level, so the fatalistic view of death spirals is still wrong.
I already addressed this. See the second paragraph of my post.
There are tons of interesting failure modes. The simplistic one won't happen, but that doesn't mean that it isn't teetering on the bring of a death spiral.
What happens when the market is flooded with cheap miners? A 51% attack is suddenly affordable.
What happens if the price drops off a cliff right after a difficulty adjustment? As hash rate falls, difficulty adjustments become farther apart than the two weeks they're supposed to be.
What happens when smaller miners close up shop? Bitcoin mining is already very centralized. Falling profitability would move it even more into the hands of the biggest players with the most efficient hardware and the cheapest electricity. Read: China.
A falling price is a huge problem for the security and stability of the network. Bitcoin is teetering on the brink of complete collapse.
>people still want to transact Bitcoin
No one uses Bitcoin. The transaction fees would have to go up by a factor of over 100 to equal the current block rewards. And, if people don't use Bitcoin now, why would they when transactions are 100x the current price?
What happens when the market is flooded with cheap miners? A 51% attack is suddenly affordable.
What happens if the price drops off a cliff right after a difficulty adjustment? As hash rate falls, difficulty adjustments become farther apart than the two weeks they're supposed to be.
What happens when smaller miners close up shop? Bitcoin mining is already very centralized. Falling profitability would move it even more into the hands of the biggest players with the most efficient hardware and the cheapest electricity. Read: China.
A falling price is a huge problem for the security and stability of the network. Bitcoin is teetering on the brink of complete collapse.
>people still want to transact Bitcoin
No one uses Bitcoin. The transaction fees would have to go up by a factor of over 100 to equal the current block rewards. And, if people don't use Bitcoin now, why would they when transactions are 100x the current price?
If transaction fees go up too much this discourages the use of bitcoin as a currency....
This happened from 2014 to mid 2016, a good 18 months.
Nothing happened. There have been bigger threats to the network, the revenue of miners isn't currently one. A threat to the usability of the network would be if 90% of mining power disappeared at the same time, this means it would take 900% longer to confirm a block until the next difficulty adjustment drops the network confirmation time back to 10 minutes. Difficulty adjustments happen every 2016 blocks, each block is supposed to come every 10 minutes. The worst case scenario would be hashrate disappearing right after a difficulty adjustment meaning 2015 blocks will be found very slowly, there could be a max of 4 months of a slower bitcoin network.
Makes me wonder what you even mean by death spiral, like what user experience do you expect to happen?
Users wouldn't immediately stop using bitcoin because it was slower, they wouldn't even know it would suck, so more likely the unconfirmed transactions would add up, and to ensure getting mined into a block, the users would increase their transaction fees to coax miners to include them first (instead of dropping their transaction completely when they run out of memory). With a higher fee market, this is an even greater incentive for miners to come back on the network, because now the block reward doesn't even matter, since the fees can potentially eclipse it totally. The price of bitcoin would even cease to matter, if there is a dollar figure of fees just there. Miners come back on the network would make the hashrate higher again, before the difficulty adjustment, making blocks confirm faster, instead of slower.
This equilibrium is already in the minds of miners, which contributes to them staying on the network so that they don't miss out.
This isn't theory, its all happened before.
Nothing happened. There have been bigger threats to the network, the revenue of miners isn't currently one. A threat to the usability of the network would be if 90% of mining power disappeared at the same time, this means it would take 900% longer to confirm a block until the next difficulty adjustment drops the network confirmation time back to 10 minutes. Difficulty adjustments happen every 2016 blocks, each block is supposed to come every 10 minutes. The worst case scenario would be hashrate disappearing right after a difficulty adjustment meaning 2015 blocks will be found very slowly, there could be a max of 4 months of a slower bitcoin network.
Makes me wonder what you even mean by death spiral, like what user experience do you expect to happen?
Users wouldn't immediately stop using bitcoin because it was slower, they wouldn't even know it would suck, so more likely the unconfirmed transactions would add up, and to ensure getting mined into a block, the users would increase their transaction fees to coax miners to include them first (instead of dropping their transaction completely when they run out of memory). With a higher fee market, this is an even greater incentive for miners to come back on the network, because now the block reward doesn't even matter, since the fees can potentially eclipse it totally. The price of bitcoin would even cease to matter, if there is a dollar figure of fees just there. Miners come back on the network would make the hashrate higher again, before the difficulty adjustment, making blocks confirm faster, instead of slower.
This equilibrium is already in the minds of miners, which contributes to them staying on the network so that they don't miss out.
This isn't theory, its all happened before.
When it costs miners (who lack the economies of scale and access to cheap electricity that major miners have) more to produce Bitcoin than the block rewards and transactions fees they receive from doing so, they simply shut off their miners until the price gets high enough to operate profitably again (of course they could also just continue to operate at a loss in the short-term, but financial resources are always limited so they would have to stop operating at some point if the price doesn’t increase).
There will always be SOME miners who have access to cheap enough electricity and economies of scale for whom it continues to be profitable to mine.
There will always be SOME miners who have access to cheap enough electricity and economies of scale for whom it continues to be profitable to mine.
I think the problem is that BTC has been through a very public boom and bust cycle so the public at large is now very wary and a lot of new regulations are coming in. Blockchain needs to start solving some actual man in the street kind of problems soon if it's going to retain any mindshare.
[deleted]
I think it is solving some man-in-the-street problems for people who aren't in countries with good financial systems.
Already happened. The hash rate is falling and the market is flooded with cheap hardware.
You'll hear some handwaving about difficulty adjustments. That doesn't change the fact that it is becoming increasingly unprofitable and miners are already shutting down en masse.
You'll hear some handwaving about difficulty adjustments. That doesn't change the fact that it is becoming increasingly unprofitable and miners are already shutting down en masse.
there can be no such a thing by design. Tulips didn't have it but Bitcoin does have a mechanism of self adjusting mining difficulty
Bitcoin will rise again.
Bitcoin removes the need to trust a bookie/agent to move money offshore.
Whenever flow of money is possible between a safe haven and a corrupt/socialist big country with high tax rate/more population burden.
Money flows to the safe heaven.
Bitcoin is one such way to move money from african nations/india/china to safe haven like Switzerland, Singapore, UK etc...
I am talking about illict gains/unreported assets which can't be moved through official channels.
Moving your unreported assets to a different country might not be illegal in that country if a deal is structured correctly. That's where lawyers/accounts/consultants come into play.
Bitcoin will rise again once a need to move money to save heaven rises again.
It's an efficient medium to move large sums of money without trusting a bookie.
I can buy coffee loaded in container from an african country where inflation has killed the local currency and banks do not have infra for international settlement or take much bigger cut or simply aren't trusted by local people. For this i make simple bitcoin transfer from Hong Kong and get my coffee contain undocked in Hong Kong.
Edit: it's haven not heaven.
Bitcoin removes the need to trust a bookie/agent to move money offshore.
Whenever flow of money is possible between a safe haven and a corrupt/socialist big country with high tax rate/more population burden.
Money flows to the safe heaven.
Bitcoin is one such way to move money from african nations/india/china to safe haven like Switzerland, Singapore, UK etc...
I am talking about illict gains/unreported assets which can't be moved through official channels.
Moving your unreported assets to a different country might not be illegal in that country if a deal is structured correctly. That's where lawyers/accounts/consultants come into play.
Bitcoin will rise again once a need to move money to save heaven rises again.
It's an efficient medium to move large sums of money without trusting a bookie.
I can buy coffee loaded in container from an african country where inflation has killed the local currency and banks do not have infra for international settlement or take much bigger cut or simply aren't trusted by local people. For this i make simple bitcoin transfer from Hong Kong and get my coffee contain undocked in Hong Kong.
Edit: it's haven not heaven.
First of all the word you're looking for is haven (as in a harbor), not heaven.
Secondly, are you saying that bitcoin exists solely for the purpose of money laundering and tax evasion?
Secondly, are you saying that bitcoin exists solely for the purpose of money laundering and tax evasion?
No, but it certainly can be used for money laundering and tax evasion.
It removes the need to trust a bookie or agent to move money offshore.
There are lawyers/accountants in Switzerland and Hong Kong who will help you launder money from third world countries.
Moving your assets offshore without local government knowing is not a crime in other country!
Edit: why downvotes? What's wrong?
It removes the need to trust a bookie or agent to move money offshore.
There are lawyers/accountants in Switzerland and Hong Kong who will help you launder money from third world countries.
Moving your assets offshore without local government knowing is not a crime in other country!
Edit: why downvotes? What's wrong?
My point was that you are assuming some sort of libertarian viewpoint where nation-states trying to tax your money are fundamentally corrupt/socialist.
I personally tend to think that in the vast majority of cases govt spending of tax money does more for the greater good than whatever a self-appointed authority would. There are many exception to this, but I still think this is largely true in democracies. But then again I tend to identify as a social-democrat.
I personally tend to think that in the vast majority of cases govt spending of tax money does more for the greater good than whatever a self-appointed authority would. There are many exception to this, but I still think this is largely true in democracies. But then again I tend to identify as a social-democrat.
Yeaa but if you go to some third world countries, you'll see high tax rate yet not enough benefits for your tax rate. Prime example is India where people still have power cuts yet business/salaried middle class pays north of 30% tax.
People there will happily pay 60% tax if they get even Rome level of infrastructure access
So, it's no brainer a lot of them move their money offshore.
Edit: people who feel they are not getting fair share of their infra quality, with this line of thinking will move money aboard doesn't matter if it's ethical/legal thing to do or not.
People there will happily pay 60% tax if they get even Rome level of infrastructure access
So, it's no brainer a lot of them move their money offshore.
Edit: people who feel they are not getting fair share of their infra quality, with this line of thinking will move money aboard doesn't matter if it's ethical/legal thing to do or not.
This would require some discussion of international wealth and income distribution, but to me the injustice is not at the state level here, but rather in the fact itself that India is a third world country. The Indian upper-middle class should really be demanding reparation to the UK for the effects of colonization rather than moving money offshore damaging only their poorer countrymen.
Basically a scam then?
perfmode(1)
There was a time when the Bitcoin price was zero, yet people spent computer time mining it.
So the answer to your question is never, a Bitcoin death spiral can not occur.
So the answer to your question is never, a Bitcoin death spiral can not occur.
You're right in the sense that there'll always be a few hundred interested people mining Bitcoin for fun, but that's not very useful information. "Actually dead" and "effectively dead" might as well be synonyms in this case.
Ah, the Bloomberg and TechCrunch bottom signals I’m looking for.
A year ago, I was explaining to family why crypto was a thing. This year I'm explaining why it crashed and why it's to be avoided. Also, why blockchain and crypto are not the same thing.
There are many who participated in the 2017 speculation that will actively avoid and advise against participation this go around. The bubble popped and it will be many years before we see worthy investments take shape.
There are many who participated in the 2017 speculation that will actively avoid and advise against participation this go around. The bubble popped and it will be many years before we see worthy investments take shape.
To think anyone can predict the market (good or bad) is foolish. You could easily flip your statement in support of crypto and it would be equally meaningless. Having participated in crypto since 2013, the only thing that I (or anyone else for that matter) knows is that _no one_ has a clue what they're talking about it.
It's pure speculation in both directions.
We could see BTC go sub $1k in Q1, or we could see it hit another ATH as those that got left out in 2017 FOMO in.
No one, not a single person, has any idea.
It's pure speculation in both directions.
We could see BTC go sub $1k in Q1, or we could see it hit another ATH as those that got left out in 2017 FOMO in.
No one, not a single person, has any idea.
I think another factor is that we've passed peak uncritical press coverage. Never again will there be as large an influx of media-driven naive optimists who think that the price will only go up.
There's also been a crackdown on crypto advertisement by the ad-tech giants.
Further there's a more aware SEC and I imagine there'll be a few examples made to make everyone think twice.
Further there's a more aware SEC and I imagine there'll be a few examples made to make everyone think twice.
That isn't true, it depends on the whims of the people who determine what those optimists say and write.
I am pretty clearly offering an opinion here, so I'm not asserting that it's true. But the naive optimists I'm speaking of here were the greater fools [1] who bought Bitcoin as it was rising. Journalists are generally cynics.
[1] https://en.wikipedia.org/wiki/Greater_fool_theory
[1] https://en.wikipedia.org/wiki/Greater_fool_theory
I never understand why people try to separate blockchain and bitcoin.
Probably because Blockchain got also used outside cryptocurrencies and furthermore because there are now cryptocurrencies that are not Blockchain-based?
It's always good news for Bitcoin!
They started already a few weeks ago. But right now the calm days are starting. The next half year or more will be about people forgetting about Bitcoin.
Reminds me of the time they called my website dead, but it's still alive and generating revenue 10 years after the article...
Precisely
Bloomberg's always Chicken Littling cryptocurrency and backslapping the large investment firms.
The discussion of blockchain tech on HN is puzzling to me.
On the matter of value: I suspect that if we find ourselves able to send a message back in time two years (when BTC was less than $1,000 USD) and report that the price is now over $3,700, that we'll find this message to be met with an understanding that this is, at least, a validation of the use of blockchain tech as a store of value.
I suspect that if we describe the details of the lightning network in this message and report that transactions are radically faster and cheaper for retail-scale use, that we'll hear cheers about blockchain utility as a currency.
If we describe LivePeer and Fluence and the Origin protocol, if we stream talks from this year's DevCon about the incredible Python tooling that is coming of age and the progress on sharding, proof-of-stake, ring signatures, and zero-knowledge proofs, I'm certain that we'll hear nothing but confidence about the ecosystem and the extensibility of blockchain tech.
If I am permitted to send one of my recent talks[0] back with this message about our progress at NuCypher on developing new cryptographic primitives and cryptological narratives to accompany them, I have no doubt whatsoever that we'll receive back both excitement and gratitude, not on account of our work but because everybody in December of 2017 will be so grateful to know that they're about to be alive during a time when organizations like ours actually have the funding and mission to dust off tech that has sat largely stagnant for the preceding 10-15 years and move it substantially forward.
Yet, look at us HN. Instead of these reactions we're sitting here filled with cynicism and darkness. Why? Where have we misplaced our joy at these developments?
I'll tell you what: let's just pretend that somebody from December of 2021 has posted a message here with similar signs of encouragement. Let's imagine that they've told us about Ethereum 2.0 and Monero coming online. That new turnkey technologies include decentralized access management via NuCypher, buttery transcoding via LivePeer, and fast and flexible decentralized queries via Fluence.
Let's hear in our mind's voice about the next cohort of decentralized tech following these, including fully-homomorphic encryption (perhaps via NuFHE), solutions to several of the open oracle problems, and blockchain use in all sorts of gaming scenarios to ensure fairness of loot boxes and other intra-game economics.
Let's celebrate all the adoption they report to us: medical devices that work without the need for trust in insurance companies, communications infrastructure with far greater robustness and in widespread use to thwart spy apparatuses of despotic governments, sharing frameworks to ensure that media is able to spread throughout the world despite attempts at censorship or outdated notions of "intellectual property."
Please, let's let 2019 be a year when optimism and childlike curiosity are not only permitted in these parts but celebrated like they (largely) were just two years ago when the BTC price was less than 30% what it is today.
[0]: https://www.youtube.com/watch?v=OuY9WXK61gY
On the matter of value: I suspect that if we find ourselves able to send a message back in time two years (when BTC was less than $1,000 USD) and report that the price is now over $3,700, that we'll find this message to be met with an understanding that this is, at least, a validation of the use of blockchain tech as a store of value.
I suspect that if we describe the details of the lightning network in this message and report that transactions are radically faster and cheaper for retail-scale use, that we'll hear cheers about blockchain utility as a currency.
If we describe LivePeer and Fluence and the Origin protocol, if we stream talks from this year's DevCon about the incredible Python tooling that is coming of age and the progress on sharding, proof-of-stake, ring signatures, and zero-knowledge proofs, I'm certain that we'll hear nothing but confidence about the ecosystem and the extensibility of blockchain tech.
If I am permitted to send one of my recent talks[0] back with this message about our progress at NuCypher on developing new cryptographic primitives and cryptological narratives to accompany them, I have no doubt whatsoever that we'll receive back both excitement and gratitude, not on account of our work but because everybody in December of 2017 will be so grateful to know that they're about to be alive during a time when organizations like ours actually have the funding and mission to dust off tech that has sat largely stagnant for the preceding 10-15 years and move it substantially forward.
Yet, look at us HN. Instead of these reactions we're sitting here filled with cynicism and darkness. Why? Where have we misplaced our joy at these developments?
I'll tell you what: let's just pretend that somebody from December of 2021 has posted a message here with similar signs of encouragement. Let's imagine that they've told us about Ethereum 2.0 and Monero coming online. That new turnkey technologies include decentralized access management via NuCypher, buttery transcoding via LivePeer, and fast and flexible decentralized queries via Fluence.
Let's hear in our mind's voice about the next cohort of decentralized tech following these, including fully-homomorphic encryption (perhaps via NuFHE), solutions to several of the open oracle problems, and blockchain use in all sorts of gaming scenarios to ensure fairness of loot boxes and other intra-game economics.
Let's celebrate all the adoption they report to us: medical devices that work without the need for trust in insurance companies, communications infrastructure with far greater robustness and in widespread use to thwart spy apparatuses of despotic governments, sharing frameworks to ensure that media is able to spread throughout the world despite attempts at censorship or outdated notions of "intellectual property."
Please, let's let 2019 be a year when optimism and childlike curiosity are not only permitted in these parts but celebrated like they (largely) were just two years ago when the BTC price was less than 30% what it is today.
[0]: https://www.youtube.com/watch?v=OuY9WXK61gY
You are conflating greed with innovation.
We did not rally optimism and childlike curiosoty from the general public for HTTP or TCP/IP.
You are shilling based on the popular Bitcoin playbook of Quotes and Comments.
If it's really about the technology then people shouldn't care about the USD value of this crapshitcoins era... But no you folks not only took on the technologically inclined people but dragged the unaware general public into the mud took their money and fueled your drug-induced, darkweb fantasies of lambos and Porsches.
Just stop with this bs already .. I really hope SEC comes after everyone of you greedy technobabble mumbo jumbo Signal pump-dump idiots.
We did not rally optimism and childlike curiosoty from the general public for HTTP or TCP/IP.
You are shilling based on the popular Bitcoin playbook of Quotes and Comments.
If it's really about the technology then people shouldn't care about the USD value of this crapshitcoins era... But no you folks not only took on the technologically inclined people but dragged the unaware general public into the mud took their money and fueled your drug-induced, darkweb fantasies of lambos and Porsches.
Just stop with this bs already .. I really hope SEC comes after everyone of you greedy technobabble mumbo jumbo Signal pump-dump idiots.
> We did not rally optimism and childlike curiosoty from the general public for HTTP or TCP/IP.
Yes we did! It took a lot to get people excited about the internet, and a lot of naysayers made it a dramatic feat. The difference is that I'm hoping not to find this kind of negativity and name-calling here on HN.
> you folks not only took on the technologically inclined people but dragged the unaware general public into the mud took their money and fueled your drug-induced, darkweb fantasies of lambos and Porsches.
Please show me where I did anything even vaguely resembling this. I assert that I've been a reliable, honest contributor and spoken with my code. I've never been part of a public sale, nor ever made any promises of any kind to anybody who was participating in a public sale. NuCypher will not hold a public sale until our network is ready for use by real application developers. Full stop. That is the opposite of shilling.
Why are you attacking me personally here?
Yes we did! It took a lot to get people excited about the internet, and a lot of naysayers made it a dramatic feat. The difference is that I'm hoping not to find this kind of negativity and name-calling here on HN.
> you folks not only took on the technologically inclined people but dragged the unaware general public into the mud took their money and fueled your drug-induced, darkweb fantasies of lambos and Porsches.
Please show me where I did anything even vaguely resembling this. I assert that I've been a reliable, honest contributor and spoken with my code. I've never been part of a public sale, nor ever made any promises of any kind to anybody who was participating in a public sale. NuCypher will not hold a public sale until our network is ready for use by real application developers. Full stop. That is the opposite of shilling.
Why are you attacking me personally here?
Please at least add a HUGE disclaimer that all the NuCoin things are your own products and not some childlike curiosity. It's important that people understand that because HN doesn't allow ads without disclaimers.
I am unable to edit my comment at this time, but reading it, I think it's very, very obvious from my language ("If I am permitted to send one of my recent talks[0] back with this message about our progress at NuCypher...") that I work at NuCypher. It's not like I mentioned it in passing; I mentioned it specifically to talk about my own experience.
And what are "NuCoin things"? What are you talking about? Do you even have a sense of the technology in this space at all? Or are you just pointing at things about which you've never heard and throwing a tantrum?
Your accusations with the lambos and things are just truly over-the-top. You are targeting the wrong people. We have consistently put out top-shelf high-level cryptographic tooling. We have vowed not to do a public sale until our network is functional in sufficient measure to be worth what we ask for it. And we have made good on that promise.
If you have specific suggestions about how to be more responsible than we have, please offer them and stop with the melodrama.
And what are "NuCoin things"? What are you talking about? Do you even have a sense of the technology in this space at all? Or are you just pointing at things about which you've never heard and throwing a tantrum?
Your accusations with the lambos and things are just truly over-the-top. You are targeting the wrong people. We have consistently put out top-shelf high-level cryptographic tooling. We have vowed not to do a public sale until our network is functional in sufficient measure to be worth what we ask for it. And we have made good on that promise.
If you have specific suggestions about how to be more responsible than we have, please offer them and stop with the melodrama.
> If you have specific suggestions about how to be more responsible than we have, please offer them and stop with the melodrama.
HTTP and TCP/IP do not provoke "child like" wonder and curiosity, because they can be understood by everyone. In other words, they provoke a more mature sense of wonder: one that is backed by a fundamental grasping of the technology, which means people also understand the challenges associated with the tech. The fun is in overcoming the challenge.
With shitcoin technobabble: little to no effort is made to explain the underlying tech with useful analogies (often times, because there isn't really any underlying tech, or because the tech is actually only going to benefit a small proportion of "users"). The obfuscation of the system is precisely what allows technobabble to "evoke a sense of child like curiosity", rather than a proper understanding.
This is an old and common tactic: most "financial instruments" are similarly obfuscated. You're not a newcomer trying to do well, but rather the same old salesman, pitching a new naturopathic solution.
HTTP and TCP/IP do not provoke "child like" wonder and curiosity, because they can be understood by everyone. In other words, they provoke a more mature sense of wonder: one that is backed by a fundamental grasping of the technology, which means people also understand the challenges associated with the tech. The fun is in overcoming the challenge.
With shitcoin technobabble: little to no effort is made to explain the underlying tech with useful analogies (often times, because there isn't really any underlying tech, or because the tech is actually only going to benefit a small proportion of "users"). The obfuscation of the system is precisely what allows technobabble to "evoke a sense of child like curiosity", rather than a proper understanding.
This is an old and common tactic: most "financial instruments" are similarly obfuscated. You're not a newcomer trying to do well, but rather the same old salesman, pitching a new naturopathic solution.
> HTTP and TCP/IP do not provoke "child like" wonder and curiosity, because they can be understood by everyone. In other words, they provoke a more mature sense of wonder: one that is backed by a fundamental grasping of the technology, which means people also understand the challenges associated with the tech. The fun is in overcoming the challenge.
It's precisely the same with blockchain tech in every respect you've described here. And indeed many of us did (and still do) have a high degree of wonder over what's possible with HTTPS and TCP/IP more generally. The "child like" part comes from the realization that the species is indeed undergoing a rapid maturing process, and that the internet is a part of our collective childhood.
> With shitcoin technobabble: little to no effort is made to explain the underlying tech with useful analogies (often times, because there isn't really any underlying tech, or because the tech is actually only going to benefit a small proportion of "users").
Did this person just tell me that I have used too few analogies? I strongly suspect that you actually have no idea who we are or what we're about.
There is nothing about this part of the comment that reflects a mature and educated grasp of this topic.
It's precisely the same with blockchain tech in every respect you've described here. And indeed many of us did (and still do) have a high degree of wonder over what's possible with HTTPS and TCP/IP more generally. The "child like" part comes from the realization that the species is indeed undergoing a rapid maturing process, and that the internet is a part of our collective childhood.
> With shitcoin technobabble: little to no effort is made to explain the underlying tech with useful analogies (often times, because there isn't really any underlying tech, or because the tech is actually only going to benefit a small proportion of "users").
Did this person just tell me that I have used too few analogies? I strongly suspect that you actually have no idea who we are or what we're about.
There is nothing about this part of the comment that reflects a mature and educated grasp of this topic.
The NuCypher has the Hallmark of a marketing website for ICOs and perfect whitepapers and awesome 'team' photos and other stuff that should raise a million red flags.
I have seen this game a million times with so many ICOs with 'super nice squeaky clean websites' before.
I am sure there is _some_ technology hidden there. But to me it just screams money money money. Not technology technology technology. Have seen this game play a million times.
Really really would love to have SEC scrutinize all these crapshoot ICOs ( not accusing you). Have seen so much money swindling with fake whitepapers and promise of Alice and Bob in wonderland security whitepapers. Yours is probably legit but I have no idea. SEC should weigh in.
Alice wants to decrypt the rabbit hole. Bob wants to sell ICOs. Oh my
I am sure there is _some_ technology hidden there. But to me it just screams money money money. Not technology technology technology. Have seen this game play a million times.
Really really would love to have SEC scrutinize all these crapshoot ICOs ( not accusing you). Have seen so much money swindling with fake whitepapers and promise of Alice and Bob in wonderland security whitepapers. Yours is probably legit but I have no idea. SEC should weigh in.
Alice wants to decrypt the rabbit hole. Bob wants to sell ICOs. Oh my
You said in a separate comment that your intention is specifically to inflame, so I don't care to respond to you anymore. However, I will take care to correct some of your misinformation just in case others are mislead by what you've said here:
> The NuCypher has the Hallmark of a marketing website for ICOs and perfect whitepapers and awesome 'team' photos and other stuff that should raise a million red flags.
1) As you already know but seem wont to pretend you don't: we are not having an ICO in the typical sense. We will not be having a public sale until our network is launched. There is nothing "ICOish" about our method. If people are interested in using our network, they can buy our token. And they can't even do that until we launch.
2) We have awesome whitepapers. We are leading the fields of proxy re-encryption and homomorphic encryption. I'm not going to apologize for the fact that we have published our whitepapers.
3) We have an awesome team. I mean, seriously, look at the team we've built. Working at NuCypher feels like playing at the all-star game. And yes, we all get along and enjoy traveling together. I'm not going to apologize for documenting that.
We are putting out solid code that runs. And it does things that haven't been done before. Ideally, I'd love for people not to have the kind of anxiety and discomfort living in the world today that is displayed by this comment. But I don't really know what more to do about it. I'll continue committing and releasing.
> I am sure there is _some_ technology hidden there.
Is that because you watched the live demo to which I linked you? Or because you looked at our repositories? Or because you have watched any of our recent talks at conferences specifically discussing our tech?
> The NuCypher has the Hallmark of a marketing website for ICOs and perfect whitepapers and awesome 'team' photos and other stuff that should raise a million red flags.
1) As you already know but seem wont to pretend you don't: we are not having an ICO in the typical sense. We will not be having a public sale until our network is launched. There is nothing "ICOish" about our method. If people are interested in using our network, they can buy our token. And they can't even do that until we launch.
2) We have awesome whitepapers. We are leading the fields of proxy re-encryption and homomorphic encryption. I'm not going to apologize for the fact that we have published our whitepapers.
3) We have an awesome team. I mean, seriously, look at the team we've built. Working at NuCypher feels like playing at the all-star game. And yes, we all get along and enjoy traveling together. I'm not going to apologize for documenting that.
We are putting out solid code that runs. And it does things that haven't been done before. Ideally, I'd love for people not to have the kind of anxiety and discomfort living in the world today that is displayed by this comment. But I don't really know what more to do about it. I'll continue committing and releasing.
> I am sure there is _some_ technology hidden there.
Is that because you watched the live demo to which I linked you? Or because you looked at our repositories? Or because you have watched any of our recent talks at conferences specifically discussing our tech?
[deleted]
Not everyone's who's interested in decentralized trustless payment technology is a "shill".
You're dismissing innovation and tarring it with greed.
You're dismissing innovation and tarring it with greed.
While the term "shill" is somewhat inflammatory, I don't think it's entirely inaccurate here; specifically the grandiose rhetoric used to hype up his own personal cryptocurrency projects.
I did intentionally want this to be inflammatory.
ICOs,crapcoins have took money from the general public without any regulation and funneled into shady, dodgy ventures. So yes of course my comments come out to be inflammatory.
ICOs,crapcoins have took money from the general public without any regulation and funneled into shady, dodgy ventures. So yes of course my comments come out to be inflammatory.
Please don't do that here. It damages the container regardless of how right you are.
https://news.ycombinator.com/newsguidelines.html
https://news.ycombinator.com/newsguidelines.html
Apologies. Won't do that again.
Hey now... don't drag Signal into this.
I use Signal every day; I have turned something like 10 family members on to it, including literally my Grandmother.
That said, I do kinda feel like Open Whisper prioritizes a more centralized vision of the future than is reasonable for truly secure communications, and I suspect that it does this in order to maintain control and relationships with donors.
Again, I love Signal (and moxie, if you're reading this, I think you've done a bang-up job).
But I also think that it's important that we start to talk about viable alternatives which fix a lot of what's wrong with Signal, and I think that the first place to look for that is matrix / Riot chat.
That said, I do kinda feel like Open Whisper prioritizes a more centralized vision of the future than is reasonable for truly secure communications, and I suspect that it does this in order to maintain control and relationships with donors.
Again, I love Signal (and moxie, if you're reading this, I think you've done a bang-up job).
But I also think that it's important that we start to talk about viable alternatives which fix a lot of what's wrong with Signal, and I think that the first place to look for that is matrix / Riot chat.
There will always be people who say a breakthrough is just around the corner. How many years should the rest of us wait wait before we decide that blockchain tech was a dead end? It's already been around for a while and I can't think of any successful use cases outside of cryptocurrency.
Are you insinuating that there have been no breakthroughs in the past 2 years? How do you respond to the ones I have listed in the comment to which you're replying?
How have those so-called breakthroughs had an effect on the world outside the cryptocurrency bubble? Who has used them in industry?
Ahh, yes, in that sense you're right.
But I'm not sure that it's a meaningful standard.
We've seen "the bubble" being poked sharply from the inside with relative trivialities like cryptokitties. We've also seen the more blunt effect of undermining prohibition policies - access to a wide variety of (psychoactive and other) forbidden medicines has been difficult to achieve since the garden of eden; this seems like a breakthrough to me.
But yes, your larger point is sound: broader worldwide adoption hasn't happened, at least yet. I'm confident, though, that the next cryptokitties won't be cryptokitties and that the next OpenBazaar will be more effectual. We'll see.
But I'm not sure that it's a meaningful standard.
We've seen "the bubble" being poked sharply from the inside with relative trivialities like cryptokitties. We've also seen the more blunt effect of undermining prohibition policies - access to a wide variety of (psychoactive and other) forbidden medicines has been difficult to achieve since the garden of eden; this seems like a breakthrough to me.
But yes, your larger point is sound: broader worldwide adoption hasn't happened, at least yet. I'm confident, though, that the next cryptokitties won't be cryptokitties and that the next OpenBazaar will be more effectual. We'll see.
How much longer are you personally willing to wait for blockchain tech to succeed before you would give up on it?
I don't think this is a well-defined question, at least as you've posed it.
I'm not waiting. I'm taking advantage of the fact that the chaotic redistribution of spending power - caused by the introduction of bitcoin into the world economy - has made funding available to do work that I have long wanted to do. I plan to work full-time at NuCypher for at least another year.
People who are actively using this technology to purchase forbidden fruits over the internet aren't waiting - they're using this technology in life changing ways all the time.
People who (and I know this is a silly one) play cryptokitties aren't waiting - they're making use of this tech, even if it might seem meaningless to you and me.
Maybe you're part of the much larger portion of the population who are still waiting for something that is personally interesting to you to come out of blockchain tech. That's totally cool!
I can't meaningfully ask you how much longer you're willing to wait, because I already know the answer: you'll wait until something that speaks to you becomes available, and then you'll consider it. Right?
I'm not waiting. I'm taking advantage of the fact that the chaotic redistribution of spending power - caused by the introduction of bitcoin into the world economy - has made funding available to do work that I have long wanted to do. I plan to work full-time at NuCypher for at least another year.
People who are actively using this technology to purchase forbidden fruits over the internet aren't waiting - they're using this technology in life changing ways all the time.
People who (and I know this is a silly one) play cryptokitties aren't waiting - they're making use of this tech, even if it might seem meaningless to you and me.
Maybe you're part of the much larger portion of the population who are still waiting for something that is personally interesting to you to come out of blockchain tech. That's totally cool!
I can't meaningfully ask you how much longer you're willing to wait, because I already know the answer: you'll wait until something that speaks to you becomes available, and then you'll consider it. Right?
5 years seems reasonable, but I would have to reevaluate particularly based on certain projects I am following
Tim Berners-Lee created the first hypertext database called Enquire that was similar to a wiki in 1980. How many years did it take before e-commerce on the web was successful?
Except the status of blockchain over the last decade hasn't been a handful of hackers thinking about systems for internal use at CERN, it's been an ecosystem of ventures raising enormous amounts of cash for what they consider to be permanent systems with long term value.
The browser first became accessible to the general public in August 1991, and the graphic browser in September 1993. Amazon was founded in mid 1994 and had a revenue generating website delivering books from a million product catalogue the following year.
The browser first became accessible to the general public in August 1991, and the graphic browser in September 1993. Amazon was founded in mid 1994 and had a revenue generating website delivering books from a million product catalogue the following year.
This comment is similar to looking at the Netscape browser in 1994 and asking who has successfully used a browser in industry. Or, like insisting in 2001-2002 that all dot-coms were like WebVan or pets.com and the Internet was just a fad and didn't provide any real value.
If you have any understanding of the way technology is developed and becomes commercialized (hint: google "gartner hype cycle") you'll probably realize that we've passed the peak of inflated expectations and are firmly in the trough of disillusionment when it comes to crypto. Not every technology makes it to the plateau of productivity, but crypto has a pretty damn good chance of doing so, considering how much innovation and research is currently taking place.
If you have any understanding of the way technology is developed and becomes commercialized (hint: google "gartner hype cycle") you'll probably realize that we've passed the peak of inflated expectations and are firmly in the trough of disillusionment when it comes to crypto. Not every technology makes it to the plateau of productivity, but crypto has a pretty damn good chance of doing so, considering how much innovation and research is currently taking place.
The Netscape browser, and the concept of the internet in normal peoples' homes, and the concept of e-commerce all proved themselves in less time than blockchain tech has now had to prove itself. Maybe that's because blockchain tech will never succeed.
I don't appreciate your condescension, for example:
> If you have any understanding of the way technology is developed and becomes commercialized (hint: google "gartner hype cycle")
I understand these things just fine, thank you very much, and I'm asking you for a explanation why blockchain tech is going to succeed despite its having failed for far more years than comparable technologies have failed in the past. It's been a decade. Where's the beef?
I don't appreciate your condescension, for example:
> If you have any understanding of the way technology is developed and becomes commercialized (hint: google "gartner hype cycle")
I understand these things just fine, thank you very much, and I'm asking you for a explanation why blockchain tech is going to succeed despite its having failed for far more years than comparable technologies have failed in the past. It's been a decade. Where's the beef?
Why innovation? What research? It's so much hoo-ha over really expenaive append-only databases. It's been over ten years, the best anyone has come up with are ledgers, contracts that trigger when you don't want them to and can never be renegotiated, and pump and dump schemes. It's time to move on.
[deleted]
The cynicism has been well earned by all the hype with nothing to show for it. The best thing the cryptocurrency community can do is accept the lumps on the head, taste some humble pie, and shut down the hype machines until there is actually something useful to show. Cryptocurrency is the only technology that requires so much vociferous defense.
You're reading way too hard into this.
It skyrocketed to ~$20K and then plummeted to here because, plainly, it was a vehicle to manipulate morons out of their money. That's worth at least some "cynicism and darkness", and should be prompting our community to contemplate how, going forward, we can avoid hurting the tech illiterate masses when our own irrational exuberance, in concert with the more classically opportunistic and morally deficient business types, leads to damaging outcomes.
This is in fact my gripe with the tech community more generally: we have demonstrated ourselves to be chronically incapable of tempering the innovative instinct with an even baseline understanding of the realities of human nature. And this is why we're becoming increasingly more responsible for breaking the world.
It skyrocketed to ~$20K and then plummeted to here because, plainly, it was a vehicle to manipulate morons out of their money. That's worth at least some "cynicism and darkness", and should be prompting our community to contemplate how, going forward, we can avoid hurting the tech illiterate masses when our own irrational exuberance, in concert with the more classically opportunistic and morally deficient business types, leads to damaging outcomes.
This is in fact my gripe with the tech community more generally: we have demonstrated ourselves to be chronically incapable of tempering the innovative instinct with an even baseline understanding of the realities of human nature. And this is why we're becoming increasingly more responsible for breaking the world.
You can ask for childlike curiosity, or you can ask people to invest money.
...to be clear: I have not and do not ask the latter. I think blockchain-based assets are super risky and I simply don't know enough about investing to advise people either way.
I do, however, know enough about the tech to conclude that this is a time of great excitement and progress; I'm sad that these feelings aren't more widely shared here in our lively discussions every day.
I do, however, know enough about the tech to conclude that this is a time of great excitement and progress; I'm sad that these feelings aren't more widely shared here in our lively discussions every day.
[deleted]
> outdated notions of "intellectual property."
Could you elaborate? What is wrong with current notion of intellectual property? What is outdated about it?
In general I see this point targeting patents, not the whole concept of IP.
Could you elaborate? What is wrong with current notion of intellectual property? What is outdated about it?
In general I see this point targeting patents, not the whole concept of IP.
Not sure why you're being downvoted; this is a very reasonable question.
...and truth be told, I'm not exactly sure what I mean. But I do think that it's plain to notice that the internet tends to facilitate a style of sharing that is inconsistent with the "copyright" model of intellectual property (in addition to precluding a functioning patent system, as you point out).
It seems to me that we need to make peace with the innate tendencies of information, including the tendency of data to be copied and shared. The myth of Prometheus teaches us that this is a message deep in the species, and yet somehow governments have gotten the idea that they have the power to reverse it.
If the internet and governments clash head-to-head, of course the internet will win. The forward march of time does not yield, and especially not for something so fragile and childish as a claim to own an idea.
So I don't exactly know which notions of IP will become outdated and when, but I can visualize easily enough that some of them will at some future point.
...and truth be told, I'm not exactly sure what I mean. But I do think that it's plain to notice that the internet tends to facilitate a style of sharing that is inconsistent with the "copyright" model of intellectual property (in addition to precluding a functioning patent system, as you point out).
It seems to me that we need to make peace with the innate tendencies of information, including the tendency of data to be copied and shared. The myth of Prometheus teaches us that this is a message deep in the species, and yet somehow governments have gotten the idea that they have the power to reverse it.
If the internet and governments clash head-to-head, of course the internet will win. The forward march of time does not yield, and especially not for something so fragile and childish as a claim to own an idea.
So I don't exactly know which notions of IP will become outdated and when, but I can visualize easily enough that some of them will at some future point.
The practical real world beneficiaries of IP law in modern time are nigh exclusively international business conglomerates using it for rent seeking. The number of individual creatives who use the courts to enforce their copyrights as a revenue stream are drops from a spigot next to a torrential river of institutionalized copyright trolling, cross-lawsuits between dozens of lawyers from fortune 500s, and the systemic privatization of culture as a means for profit.
Whole generations have had their heritages locked up in corporate coffers for going on a century now with no end in sight, and that kind of abuse will leave lasting scars on humanity as a whole. I would anticipate historians a millennia from now might reflect on this time as having sufficient creative and intellectual death by copyright aside other calamities like global warming, exploitation of third world labor, or nuclear proliferation as the principal sins of the 20th and 21st century.
Whole generations have had their heritages locked up in corporate coffers for going on a century now with no end in sight, and that kind of abuse will leave lasting scars on humanity as a whole. I would anticipate historians a millennia from now might reflect on this time as having sufficient creative and intellectual death by copyright aside other calamities like global warming, exploitation of third world labor, or nuclear proliferation as the principal sins of the 20th and 21st century.
Imaginary Property has a number of drawbacks [0]. Among them, the fact that it trumps real property - IP will prevent you from using your own real property as you see fit. (For example, playing music in your garage without a broadcasting license [1].)
[0] https://mises.org/library/against-intellectual-property-0
[1] https://www.telegraph.co.uk/news/newstopics/howaboutthat/424...
[0] https://mises.org/library/against-intellectual-property-0
[1] https://www.telegraph.co.uk/news/newstopics/howaboutthat/424...
> On the matter of value: I suspect that if we find ourselves able to send a message back in time two years (when BTC was less than $1,000 USD) and report that the price is now over $3,700, that we'll find this message to be met with an understanding that this is, at least, a validation of the use of blockchain tech as a store of value
So just ignore everything in between? Yah, sounds great...
> I suspect that if we describe the details of the lightning network in this message and report that transactions are radically faster and cheaper for retail-scale use, that we'll hear cheers about blockchain utility as a currency.
The lightning network is an overcomplicated joke, which requires on-chain transactions to seed, massive amounts of capital tied up into it, always-on participants etc. It also suffers from fundamental problems around routing, payment contention etc. A year on from its launch, it still has negligible uptake, and fails to really take any load off BTC.
Further, its very existence points to a massive failure in the underlying cryptocurrency as a payment network. I look at lightning and see two failures, not one success.
> Let's hear in our mind's voice about the next cohort of decentralized tech...
Very, very few people care about decentralised money, or decentralised tech as a whole. For most, the very nature of it represents a huge step backwards in usability and reliability compared to fast, lightweight, insured and reversible centralised systems.
> Let's celebrate all the adoption they report to us
There are virtually zero positive outcomes for blockchain tech, a decade on. Time to let it rot on the pile of might-have-been's
So just ignore everything in between? Yah, sounds great...
> I suspect that if we describe the details of the lightning network in this message and report that transactions are radically faster and cheaper for retail-scale use, that we'll hear cheers about blockchain utility as a currency.
The lightning network is an overcomplicated joke, which requires on-chain transactions to seed, massive amounts of capital tied up into it, always-on participants etc. It also suffers from fundamental problems around routing, payment contention etc. A year on from its launch, it still has negligible uptake, and fails to really take any load off BTC.
Further, its very existence points to a massive failure in the underlying cryptocurrency as a payment network. I look at lightning and see two failures, not one success.
> Let's hear in our mind's voice about the next cohort of decentralized tech...
Very, very few people care about decentralised money, or decentralised tech as a whole. For most, the very nature of it represents a huge step backwards in usability and reliability compared to fast, lightweight, insured and reversible centralised systems.
> Let's celebrate all the adoption they report to us
There are virtually zero positive outcomes for blockchain tech, a decade on. Time to let it rot on the pile of might-have-been's
It's actually useful in places that don't have great financial access. I'm guessing your estimate of "very few people" is from a place that has good access?
That makes absolutely no sense. If you have limited or intermittent internet access, why the hell would you put your money on the internet? Any outage will bankrupt you.
To hold, yes you're right. I suspect you're thinking of the storage of value use-case?
It is a way to transfer value. I'm from the Philippines and I'm seeing increasing usage in remittance or getting paid salaries from abroad.
I also get a better feel for what else bitcoin is doing with this podcast episode "Alex Gladstein on Why Bitcoin Matters for Freedom" https://pca.st/aQy0
It is a way to transfer value. I'm from the Philippines and I'm seeing increasing usage in remittance or getting paid salaries from abroad.
I also get a better feel for what else bitcoin is doing with this podcast episode "Alex Gladstein on Why Bitcoin Matters for Freedom" https://pca.st/aQy0
mindfulplay(1)
I've seen so many local startups that are essentially scams:
March 2018: https://www.politico.com/magazine/story/2018/03/09/bitcoin-m...
November 2018: https://www.seattletimes.com/business/washington-bitcoin-pio...
March 2018: https://www.politico.com/magazine/story/2018/03/09/bitcoin-m...
November 2018: https://www.seattletimes.com/business/washington-bitcoin-pio...
When I first invested in Bitcoin several years back, I tried to imagine ways that it could one day be deterred from becoming increasingly adopted and valuable. Government regulation and hacking were obvious possibilities, but I never considered “death by fragmentation” at the time. I think Bitcoin would be a lot more valuable today if it had not been for the explosion of largely greed-motivated shitcoins (and later ICOs) entering the market.
It was the scalability problem that killed Bitcoin and it probably would have happened a lot sooner without the fragmentation.
When you flip the chart upside down, it sunk 300% over 2 years!
long time since the last Bitcoin is dead article
The lack of attention to crypto as a serious financial instrument is more damning to crypto than an indicator of its success.
We'll just file this under "comments that won't age well"
From a fundamentals perspective, blockchain has a bright future:
lending - https://dharma.io
derivatives - https://dydx.exchange
forecasting/gambling - https://www.augur.net
on-chain "US dollars" - https://mkr.tools
lending - https://dharma.io
derivatives - https://dydx.exchange
forecasting/gambling - https://www.augur.net
on-chain "US dollars" - https://mkr.tools
Bitcoin seems to be getting real hurt from the lack of hype and bans from big adtech companies (along with all the cryptocurrency stuff as well.)
https://trends.google.com/trends/explore?q=bitcoin&geo=US
https://trends.google.com/trends/explore?q=bitcoin&geo=US
At least this might provide pressure to reduce the environmental impact of mining, if only to reduce costs.
I see this arguments being thrown all the time, but I also like the argument that current infrastructures needed to run "previous-gen" currencies are actually burning way more[1]. While I wait for concrete research to estimate how much energy was wasted in the creation and maintenance process of these, I will abstain from spreading the FUD.
[1]: https://en.bitcoin.it/wiki/Myths#Bitcoin_mining_is_a_waste_o...
[1]: https://en.bitcoin.it/wiki/Myths#Bitcoin_mining_is_a_waste_o...
That argument looks like it was written 5 or 6 years ago, long before the modern cryptocurrency boom (and the associated rise in large-scale mining, e.g. in China). It hasn't aged well.
Funny that crypto is being called industry.
Long
is anybody really surprised other than people still involved with this blockchain/cryptocurrency nonsense?
The entire bitcoin pump and dump was orchestrated.
The entire bitcoin pump and dump was orchestrated.
I think this is a fine case to apply Hanlon's Razor: https://en.wikipedia.org/wiki/Hanlon%27s_razor
Conspiracy was unnecessary.
Conspiracy was unnecessary.
ITS NOT A CONSPIRACY
https://www.bloomberg.com/news/articles/2018-06-13/professor...
DOJ is investigating. If you ran an ICO, and you still haven't lawyered up, you are at risk.
https://www.bloomberg.com/news/articles/2018-06-13/professor...
DOJ is investigating. If you ran an ICO, and you still haven't lawyered up, you are at risk.
by the way, Techcrunch CEO was all in crypto last year
Michael Arrington left TechCrunch a long, long time ago.
not sooo long ago and why is it relevant? he is still the founder and his actions bear some significance.
Wonder how this effects Lykke.com
BTC/USD is doing just fine. Nobody who knows anything about anything made any kinds of plans involving $20,000 Bitcoin. At ~$4k, it's still 10x where it was 2 years ago. Anybody remotely involved in BTC from it's actual inception (not the bandwagon shirt-losers of 2017) is filthy stinking rich now.
> Nobody who knows anything about anything made any kinds of plans involving $20,000 Bitcoin.
Except for Goldman, Morgan Stanley, Citigroup and Barclays (see https://www.bloomberg.com/news/articles/2018-12-23/wall-stre...)...
Except for Goldman, Morgan Stanley, Citigroup and Barclays (see https://www.bloomberg.com/news/articles/2018-12-23/wall-stre...)...
That article really does not support your point at all...
>Squeamish from the start about pursuing profits in one of the darker corners of finance, established firms this year slowed their already halting efforts to make a business out of Bitcoin mania.
So they were slow from the start, and are slowing their already slow efforts.
>“The market had unrealistic expectations that Goldman or any of its peers could suddenly start a Bitcoin trading business,” said Daniel H. Gallancy, chief executive officer of New York-based SolidX Partners, which hopes to launch a Bitcoin ETF in the U.S. "That was top-of-the-market-hype thinking."
So the market (not banks or other insiders) had unrealistic expectations of traditional institutions.
>With regulators offering little clear guidance on how they will classify the broad universe of tokens—as commodities, securities or something else—banks and investment firms are treading cautiously.
Banks continue to wait for regulations and guidance before committing fully.
>Squeamish from the start about pursuing profits in one of the darker corners of finance, established firms this year slowed their already halting efforts to make a business out of Bitcoin mania.
So they were slow from the start, and are slowing their already slow efforts.
>“The market had unrealistic expectations that Goldman or any of its peers could suddenly start a Bitcoin trading business,” said Daniel H. Gallancy, chief executive officer of New York-based SolidX Partners, which hopes to launch a Bitcoin ETF in the U.S. "That was top-of-the-market-hype thinking."
So the market (not banks or other insiders) had unrealistic expectations of traditional institutions.
>With regulators offering little clear guidance on how they will classify the broad universe of tokens—as commodities, securities or something else—banks and investment firms are treading cautiously.
Banks continue to wait for regulations and guidance before committing fully.
I think OP is saying they don't know anything about anything. Which has a point, they claim to know what they are doing, but just have such large capital that there is no way for them to fail even if they did everything wrong. So you can't use success as a barometer for knowing anything.
They are part of the getting in late group and the lower valuations are most probably signs they are leaving the market.
I remember when the price started to increase I didn't think 4,000 would hold. 2500 seemed like the correct price. The fact that it hasn't fallen below that amount means there are more investors.
Personally I was using it to purchase goods before the runup and the slowness and increased fees made me move to another form of payment. I'm considering going back now that the price[is dropping
I remember when the price started to increase I didn't think 4,000 would hold. 2500 seemed like the correct price. The fact that it hasn't fallen below that amount means there are more investors.
Personally I was using it to purchase goods before the runup and the slowness and increased fees made me move to another form of payment. I'm considering going back now that the price[is dropping
> I didn't think 4,000 would hold. 2500 seemed like the correct price
How did you arrive at the 2500 figure? Is there some sort of fundamental analysis that could be done, or was it all technical?
How did you arrive at the 2500 figure? Is there some sort of fundamental analysis that could be done, or was it all technical?
Not sure how he got 2500 but there's a long term log graph here and if history repeats you might expect the low to be about 2500 to 1500 and occur about 6 months to a year from now https://cryptoslate.com/wp-content/uploads/2018/10/chart.png
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What stops GS from replacing their fee-based offerings with a blockchain solution? Could this really be as obvious in hindsight as looking at Sears in the 90s not developing an online catalog?
> What stops GS from replacing their fee-based offerings with a blockchain solution?
What does that sentence even mean? To me this is right up there with "I'll create a GUI interface with Visual Basic and see if I can track an IP address."
What does that sentence even mean? To me this is right up there with "I'll create a GUI interface with Visual Basic and see if I can track an IP address."
It literally means what the words say. What stops Goldman Sachs from replacing whatever mechanism they use to process payments with some coin. I would gladly accept the answer ‘because it doesn’t make sense’. Didn’t realize I’d get so much heat for this though.
You mean a solution that has solved exactly 0% of the problems where it was applied to? https://bitcoinist.com/blockchain-study-zero-percent-success...
How does a blockchain solution solve Goldman Sachs' business problems better, or with less resources, than existing solutions?
What would block chain do for Goldman that a SQL database couldn't?
I’m literally not sure, hence the question. I don’t know much about blockchain other than its sort of an answer to the Byzantine generals problem? It was a legit question.
My belief is: nothing.
For one thing, there is no solution to the Byzantine generals problem, this has been proven mathematically.
Cryptocurrencies sidestep it by saying "whoever is the luckiest (aka 'owns more GPUs') gets to decide the truth".
Traditional banks handle the problem by not having Byzantine generals: there is one and only one trusted authority who is compelled by law to keep clean and clear books. If a bank has a Byzantine problem that needs solving, they've already done something illegal.
For one thing, there is no solution to the Byzantine generals problem, this has been proven mathematically.
Cryptocurrencies sidestep it by saying "whoever is the luckiest (aka 'owns more GPUs') gets to decide the truth".
Traditional banks handle the problem by not having Byzantine generals: there is one and only one trusted authority who is compelled by law to keep clean and clear books. If a bank has a Byzantine problem that needs solving, they've already done something illegal.
>Except for Goldman, Morgan Stanley, Citigroup and Barclays (see https://www.bloomberg.com/news/articles/2018-12-23/wall-stre...)...
See: bandwagon shirt-losers of 2017
Bitcoin was the largest, fastest, most successful transfer of institutional wealth into private hands we've ever seen.
See: bandwagon shirt-losers of 2017
Bitcoin was the largest, fastest, most successful transfer of institutional wealth into private hands we've ever seen.
Of course if you are filthy stinking rich, it's because you participated in a distributed scam in order to defraud money from those "bandwagon shirt-losers."
It's not a scam just a bad investment.
Those using bitcoin for payments saw a utility not provided by other solutions.
Those investing are a different class of users. Most purchased after hearing get rich stories.
Those using bitcoin for payments saw a utility not provided by other solutions.
Those investing are a different class of users. Most purchased after hearing get rich stories.
What investment scam can you not say this about?
People in boiler room operations pumping up bogus pharmaceuticals --- for example --- aren't themselves drug researchers and can, of course, tell themselves that they worked not on a scam, but on a product that didn't in the end worked out and simply turned out to be a bad investment.
People in boiler room operations pumping up bogus pharmaceuticals --- for example --- aren't themselves drug researchers and can, of course, tell themselves that they worked not on a scam, but on a product that didn't in the end worked out and simply turned out to be a bad investment.
wolco's point, I think, is that BTC "was supposed" to be a payment mechanism, not a store of value. Those who used it "as directed" ended up no worse for it, while those who "invested" lost their money, but "it's their fault".
Please note the ample use of quotes on my part.
Please note the ample use of quotes on my part.
The fun part is looking back at any bitcoin thread from the past two years, seeing people mention high transaction fees or delays, and the chorus of replies that it's not a currency but a store of value.
Surely you can’t call something a scam unless lying was involved. Plenty of bad investments or financial choices don’t involve lying.
How are the people in the boiler room "lying"? They're not drug researchers. They have no idea if what they're pushing is a good investment or not; all they know is that it's weird that they've somehow got their hands on it, rather than JPMC or GS. The situations strike me as fairly analogous.
We have no trouble calling penny stock pushers dialing for dollars exactly what they are, but when it comes to "cryptocurrency", we're all supposed to keep our mouths shut. That makes no sense to me. What's scary is, the instinct in a lot of places will be to take the analogy and unwind the other side of it --- maybe we should reconsider the morality of the boiler room operations! Maybe they're doing a service after all! Caveat emptor, after all!
We have no trouble calling penny stock pushers dialing for dollars exactly what they are, but when it comes to "cryptocurrency", we're all supposed to keep our mouths shut. That makes no sense to me. What's scary is, the instinct in a lot of places will be to take the analogy and unwind the other side of it --- maybe we should reconsider the morality of the boiler room operations! Maybe they're doing a service after all! Caveat emptor, after all!
>Those using bitcoin for payments saw a utility not provided by other solutions.
Almost no one as few will take btc and that number is shrinking.
>Those investing are a different class of users. Most purchased after hearing get rich stories.
Pretty much everyone who owns btc.
Almost no one as few will take btc and that number is shrinking.
>Those investing are a different class of users. Most purchased after hearing get rich stories.
Pretty much everyone who owns btc.
You mean, like pension funds trading the stock market?
No. Not at all like that.
The stock market is people trading ownership stakes in corporations with actual value under a regulatory regime that implements proper safeguards.
The stock market is people trading ownership stakes in corporations with actual value under a regulatory regime that implements proper safeguards.
How are _pension funds_ scams?
I didn't say pension funds are scams, but that pension funds make their profits from trading against non-knowledgeable people (like GP implied bitcoin traders do)
Most pension funds are long-term investors and do very little active trading. Their trading counterparties are generally just as knowledgeable as they are.
What precisely was the scam? Who and how was I scamming by mining coins with my GPU and some open source software I saw on slashdot that are now worth several thousand dollars each?
The scam was not by all btc pioneers. In the last year, there were a lot of holders creating marketing networks filled with misinformation and half-truths. That convinced a lot of people with little financial education and little understanding of the technology, that growth was imminent.
All the while, the marketeers screaming "buy buy buy" were selling their btc on exchanges at insane rates.
If you're just some guy mining, nobody thinks you're the problem.
All the while, the marketeers screaming "buy buy buy" were selling their btc on exchanges at insane rates.
If you're just some guy mining, nobody thinks you're the problem.
Were they any BTC pioneers who objected strongly to the hype? If not, then I'd say they were at best complicit.
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Did you sell any?
This is similar to the housing bubble, where the industry collectively hyped up the "investment" promising huge returns, yet no one was to blame when the music stopped.
Watch out for mo ways to diffuse responsibility, that's where "action" will be. Maybe we can nip it in the bud sooner if all keep an eye out.