What are your thoughts on BitCoin?

[El_Machinae]

It cannot get rid of useless intermediaries, unless you're willing to wait the 10+ minutes to confirm that the blockchain has updated your transaction. Cryptocurrencies are trying to free ride off of real currencies.

Yes, there's a future for the technology. But this law is merely subsidizing people playing in various bubbles. The technology doesn't need a subsidy. And neither does Bitcoin.

 

[Narz]

I made about $8,000. Wish I would've sold at $5k, will buy back at $3200, still holding some now.

I love when everyone says something is stupid and they're wrong. Bitcoins in particular garnered so much hate for some reason. My coworker has made more money off crypto than his full time job over the last few years (he bought about 15 at $200each), also has dozens of litecoins and etherium.

 

[Moriarte]

It cannot get rid of useless intermediaries, unless you're willing to wait the 10+ minutes to confirm that the blockchain has updated your transaction. Cryptocurrencies are trying to free ride off of real currencies.

Yes, there's a future for the technology. But this law is merely subsidizing people playing in various bubbles. The technology doesn't need a subsidy. And neither does Bitcoin.

Electric car owners enjoy similar subsidies in many countries. So why not subsidise technology, which has the potential to make classic currencies a niche thing.

Question isn't "oh it's consuming more than Denmark", the question is - how does it compare to, say, euro. In terms of value appreciation, stability, cost of infrastructure, transaction costs.

As for the bubbles - where do we draw the line between promoting investment and bubble territory? Who gets to decide enough is enough? The free market? You?

 

[El_Machinae]

The free market. I'm the one pointing out that it's a subsidy that's being asked for.

'Classic' currency is a fundamental part of national sovereignty. One of the greater known errors of the EU was to try to switch to a non-sovereign currency without a rebalancing mechanism.

I have no problem with governments providing grants to computer science students. I'm already in favour of sibsidizing research. But I don't like the idea of subsidizing the bubble side of the story.

 

[Lexicus]

"Promoting investment" is nothing more than a codeword for "upward redistribution of wealth." If you want to promote investment, provide people with a basic income so you can get some profitable investment outlets. Seriously, a basic income would do more to promote investment than all the standard garbage policies sold as "pro-investment" combined.

 

[civvver]

I made about $8,000. Wish I would've sold at $5k, will buy back at $3200, still holding some now.

I love when everyone says something is stupid and they're wrong. Bitcoins in particular garnered so much hate for some reason. My coworker has made more money off crypto than his full time job over the last few years (he bought about 15 at $200each), also has dozens of litecoins and etherium.

You could've done the same thing buying regular companies over the past decade like Ford, Apple, Under Armor, Netflix.

 

[uppi]

Electric car owners enjoy similar subsidies in many countries. So why not subsidise technology, which has the potential to make classic currencies a niche thing.

Bitcoin can never replace classic currency, because:

Question isn't "oh it's consuming more than Denmark", the question is - how does it compare to, say, euro. In terms of value appreciation, stability, cost of infrastructure, transaction costs.

Very, very badly:
Value appreciation: Bad - a currency is not supposed to appreciate in value. The economy would collapse within weeks if it ran on Bitcoins
Stability: Very bad - Bitcoin has to be one of the most unstable methods of paying ever invented
Cost of infrastructure: Bad - I do not see any potential savings on the infrastructure for savings, but then you have the massive infrastructure to calculate the block chain.
Transaction costs: Extremely bad - right now the raw electricity costs are around 20 Euro for a single transaction. The cost is so ridiculously high, that no sane human should ever even consider using Bitcoin as a replacement for classic currency.

 

[El_Machinae]

A lot of those transaction costs are currently being subsidized by people mining for profit, which is why the perceived transaction costs are currently so low. But, if I recall, there is a built in mechanism to both increase the calculation costs every update of the blockchain AND a built in mechanism to reduce the rewards from mining for profit. And increasing portion of that transaction cost will be born by those wishing to see their transactions updated. In the end, it will only be worth updating the blockchain if you have sufficient money riding on a transaction that it's worth your time. And thus ends the democratization of the blockchain process ...

 

[Narz]

You could've done the same thing buying regular companies over the past decade like Ford, Apple, Under Armor, Netflix.

And? My mom could've bought Amazon back in the late 90s (and talks about it alot ). Im talking about money I made in the last 12 months

 

[innonimatu]

And? My mom could've bought Amazon back in the late 90s (and talks about it alot ). Im talking about money I made in the last 12 months

Money you intend to pour again into bitcoin. Understand that the party will end, and all the theoretical profits of those still in at the end will be wiped out. Bitcoin produced zero wealth, anyone taking real money out of the system is taking the money other people are pouring into it.

It's also very telling how you phrased your statement: "money I made" with bitcoin. Bitcoin in not money in your mind, it's a vehicle for speculation. And that is indeed the truth.

 

[Narz]

Money you intend to pour again into bitcoin. Understand that the party will end, and all the theoretical profits of those still in at the end will be wiped out. Bitcoin produced zero wealth, anyone taking real money out of the system is taking the money other people are pouring into it.

It's also very telling how you phrased your statement: "money I made" with bitcoin. Bitcoin in not money in your mind, it's a vehicle for speculation. And that is indeed the truth.

Obviously investors feel differently than you. People being crying chicken little on bitcoin since it cost 10 bucks. Currency isn't supposed to "produce wealth", it's a medium. Lol @ "real money".

I can understand the hating considering all the people who coulve invested and didn't and want some satisfaction.

 

[Lexicus]

Obviously investors feel differently than you.

Let's imagine an exchange circa 2006:
"Real estate prices can't rise forever, the rising prices don't actually reflect any real increase in value"
"Obviously investors feel differently than you"

 

[innonimatu]

I can understand the hating considering all the people who coulve invested and didn't and want some satisfaction.

I'm not the kind to be satisfied with speculative winnings (that which most people call "investing"), and that is a matter of principle rather that opportunity to avoid those. It's easy enough to see the bubbles forming, harder to tell when they'll pop. Ad very hard for most gamblers to quit while they're winning... having said this, what you do is your own choice and business.

 

[uppi]

A lot of those transaction costs are currently being subsidized by people mining for profit, which is why the perceived transaction costs are currently so low. But, if I recall, there is a built in mechanism to both increase the calculation costs every update of the blockchain AND a built in mechanism to reduce the rewards from mining for profit. And increasing portion of that transaction cost will be born by those wishing to see their transactions updated. In the end, it will only be worth updating the blockchain if you have sufficient money riding on a transaction that it's worth your time. And thus ends the democratization of the blockchain process ...

And the profit of the miners are paid by speculation money. The whole system only works, because of the constant influx of money which is then wasted on electricity. Once people stop buying Bitcoin for hoarding, the system must crash, because no one will be willing to pay the horrendous transaction costs.

The democratization of the blockchain process has already ended. Since you need special hardware for mining, which has not much other use, control of the blockchain is more like the control of a publicly traded company. You need to buy "shares" to be able to have influence on the direction of the blockchain. The only difference is that the shares are always deprecating because the hardware ages.

 

[Moriarte]

Quick question, how do you deduce 20 bucks for a transaction?

 

[uppi]

Quick question, how do you deduce 20 bucks for a transaction?

The mining reward is 12.5 Bitcoin per block. At current price that are 47k dollars per block. Something like 2000 transactions per block results in around 24 dollars per transaction.

Electricity costs are a bit of a guess, and I used 10 cents per kWh to arrive at 20 dollars per transaction, but apparently the source calculated with 5 cents, so it is more like 10 dollars per transaction.

 

[Kozmos]

Core Bitcoin is old tech, many variants are in the pipeline. I'm interested in how some of the more niche projects will turn out.

 

[Ajidica]

Blockchain has some interesting, if narrow, technological applications, but Bitcoin itself is a commodity bubble with absolutely nothing behind it. Its demand is determined almost entirely by criminals, techno-fetishists, and hobbyists. No government has any incentive to make taxes payable in it because the value of Bitcoin is seemingly divorced from reality. The wave of ICO's are at best willful bubble pumping and, more likely, brazen attempts to avoid IPO laws by classifying them as ICOs because you aren't investing in a "product", you are investing in tokens needed to use the product.

(Also, are we no longer calling Bitcoin RON PAUL FUN BUX or Dunning-Krugerrands?)

 

[El_Machinae]

Electricity costs are a bit of a guess, and I used 10 cents per kWh to arrive at 20 dollars per transaction, but apparently the source calculated with 5 cents, so it is more like 10 dollars per transaction.

We've already seen how the motivation to calculate the blockchain is decreasing. But people will continue to be motivated to run the blockchain if they have a transaction riding on it. But then you run into this weird situation, the more people use the blockchain for a transaction (reducing the per capita cost), the more complex it gets for next time.

Right now, if I do a series of serial buy/sells just trying to make some quick cash on the gamble of it, I do permanent harm to the entire complexity of the blockchain, making future transactions harder. Large entities have been making mad cash manipulating the price of a commodity for a long time. If I had the means to profit by driving the price downwards, I could just go and set up automatic transactions trading millions of microbits back and forth, and let the miners pay for the cost of updating the blockchain.

I have no problem with people trying to make money on bitcoin. It's a wild ride. And then you can use the resulting money for actually useful things. But the idea of subsidizing the loss of our national sovereignty is not a good idea.

 

[uppi]

We've already seen how the motivation to calculate the blockchain is decreasing. But people will continue to be motivated to run the blockchain if they have a transaction riding on it. But then you run into this weird situation, the more people use the blockchain for a transaction (reducing the per capita cost), the more complex it gets for next time.

Right now, if I do a series of serial buy/sells just trying to make some quick cash on the gamble of it, I do permanent harm to the entire complexity of the blockchain, making future transactions harder. Large entities have been making mad cash manipulating the price of a commodity for a long time. If I had the means to profit by driving the price downwards, I could just go and set up automatic transactions trading millions of microbits back and forth, and let the miners pay for the cost of updating the blockchain.

Additional transactions do not make the blockchain any more complex, they just make it longer. Verification of a block is quick, so if you make a lot of transactions, it is mostly hard disk space that gets consumed. You can even make snapshots of the blockchain (that you could still verify by going through the entire thing), so its length is not too much of a concern.

The complexity is almost entirely determined by the combined computing power of all miners. So if more people are mining, because they have transactions riding on it (and you will want to mine for the following blocks to ensure that your transactions are carried over), the transaction costs increase, because the problem gets more complex.

The real show-stopper that makes the whole thing unsustainable is, that you cannot reduce the transaction costs without compromising the integrity of the blockchain. In the long term, no one will be willing to pay 10 dollars per transaction. I would estimate a few cent per transaction are the upper limit. The complexity of the problem would have to be reduced by a factor of 1000 to reach that target. However, you would still have the hardware lying around that would easily have the power to do a 51% (or even 99%) attack and the only way to prevent that would be leaving miners running at a huge loss.

I have no problem with people trying to make money on bitcoin. It's a wild ride. And then you can use the resulting money for actually useful things. But the idea of subsidizing the loss of our national sovereignty is not a good idea.

National sovereignty is not in any danger as long as the concepts are incapable of being a proper currency from a purely technical point of view without even consideration of the economical aspects. Individually, I have no problem with people speculating on Bitcoin. Globally, it is such a waste of energy, however, with only marginal benefits that it might be better for the world to ban unsustainable cryptocurrencies like Bitcoin.

That does not mean that there are no useful applications of the blockchain concept and Bitcoin certainly was a successful experiment in exploring the technology. But I believe that it is time to end this waste of resources.