What exactly happened after the U.S. severed ties with Cuba? You make it sound like we lost something.
They are still stuck in the 1960s, their economy is absolute garbage and the people are dirt poor, they lost multiple generations of opportunity.
Have you been to Cuba? It’s like going back in time 70 years.. the country itself is beautiful if they had taken a different path they could be incredibly propsorous. A small country like Cuba could get by on tourism alone and do much better than they do now.
Everyone needs to take their own path, if suppressing people’s religions and no freedom is that path the Chinese want to take then that’s their choice.
Our government and our corporations should not support that.
My point is simple: If the US had not severed ties with Cuba and instead engaged with Fidel (as he initially tried to do with the US), chances are Cuba wouldn't have alienated itself with the Soviet Union, and Christians (and everybody else) would have been much better off.
Repression of the Church didn't happen until years after the revolution and the Soviet Union had become its main ally.
Cuba is worse off today than it was 60 years ago by the way, so in that sense, they aren't "stuck in the 60s".
What did the US lose? An ally and a potentially strong economy to trade with a few miles from US shore. Cuban music had quite some influence on the music of New Orleans, particularly jazz. Cuban musicians would regularly travel back and forth from Havana to New Orleans before the revolution (and the other way around).
It’s not certain that it would. But participation in the global economy is one way to get a country hooked on the economic crack that is the modern financial system. Once they’re hooked, economic sanctions (sometimes just the threat of them) are much more effective in achieving desired behavior.
Guys, so what? You think middle America gives a shit your high tech biz is getting hit?
The fact that everyone is building all of this out of China is a terrible sign. The fact that China has grown incredibly quickly by cheating is also terrible. They are number two not because they truly invented, fairly competed, or did anything useful for humanity. They stole all sorts of trade secrets, they continue to do that, didn’t license anything, pushed all of our companies out etc..
I didn’t vote for Trump, but listen to yourselves.
I might vote for Trump on the next one because I really do agree with him on this.
EDIT: downvote me it’s ok, it does not change the fact that you are out of touch and not really looking to hear the other side at all.
EDIT, EDIT: Keep down voting me guys, calling me a racist but it does not change the fact that you aren’t looking to have a dialogue about this.
China has been around for a long, long time and has gone through many phases, including the current incarnation. In this time they have done a great many things for humanity. Including, one could argue, hugely reducing the cost of manufactured goods.
You talk about fairly competing like the US does not massively subsidize many, many industries, undercutting other countries. Not to mention some of the stuff it did in the 80's around south America.
And let's not talk about the fact that the US stole a lot of trade secrets and IP during its industrialization from Britain and other countries.
Feeling threatened by another nation going through its industrialization process and iterating upon it is not a good look, IMO, especially when now the glove is on the other hand so to speak.
The problem you describe is reasonable. But this tariff is worse than doing absolutely nothing about it.
Companies have three options:
1. Do nothing in the US except [perhaps] selling the finished product, and use whatever components you want.
2. Use chinese components in US manufacturing.
3. Assemble in the US using no Chinese components.
Given the scenario you've described, presumably #3 > #2 > #1. And right now, almost everything is taking route #1.
So what does this tariff do for companies currently taking route #1? The tariff doesn't affect finished products, so there's no direct impact on them.
If they want to move something to the US, they'll find themselves in #2, the group that's hit with the tariff. Is it a good thing to discourage that?
It also discourages products that are currently america-only from adding chinese components. That might have prevented today's situation if it were enacted in 1980, but it's pretty much irrelevant today.
Copying isn’t cheating but they have spies in the top tech firms in this country. Everywhere in the world that’s cheating. Stealing confidential proprietary anything anywhere in the modern world will send you to jail, whose sending China to jail?
Many would love to see a single US official going to jail for starting wars under false premise, installing puppet regimes and ruining whole ecosystems to support business interests, from banana imports to oil and gas, and cheap clothes.
Absolutely not true. There is plenty of evidence time and time again from the top firms in this country try.
Aviation and top R&D being stolen from Boeing, just in general corporate espionage is rampant just Google it. The kicking out of top tech firms, why is Google not there in China? Why is that fair? China does not play by any rules and therefore they can’t be allowed to play with us.
The purposeful devaluation of their currency, why is that fair?
I could go on and on. I assure you I’m not a Nazi and I really dislike that part of Trumps campaign but man he is so right on this one.
You keep saying that he is right. You realize this discourages manufacturers from manufacturing here and instead to move that to China, right? Chinese consumer goods aren’t affected, but Made in America is now more expensive.
I know your not trying to troll, statements of disbelief are very common about companies that are about to own an entire market with no real competition in sight. No one sees it yet but these guys are about to own office space and how that is acquired in the future, whose going to stop them? They are creating a future you don’t yet see.
People couldn’t believe Uber was worth more than Delta airlines in one of their valuation rounds.. this is very common. They were about to own the taxi industry and take a cut out of every ride.
This is an interesting comparison, because Uber is also hemorhaging money and to a lot of people it's still not clear they're worth anywhere near as much as their valuation.
It's easy (relatively speaking) to build a big business when you can take on billions of dollars in losses. Turning that around is the hard part.
Plausible $15+ billion in sales over the next four quarters, growing at 70%, with the burn rate rapidly declining, and six years of accessible capital to operate with assuming zero further decline in their burn rate.
Uber will be near or at break-even within 18-24 months. Their sales will be over $20 billion at that point.
Are they worth three time sales? Definitely. How about 5x or more the $20 billion in sales two years out? Probably. Twitter is fetching 13x sales currently, and has only finally started making money after more than a decade of vast losses (even worse, Twitter has almost no growth).
So how does a Twitter-like 10x sales multiple on $20 billion sound, two years out? $200 billion valuation. Does that sound crazy? I think it's very rich, the capital markets may think it makes sense.
Netflix has a zillion PE ratio (and has for a long time), and a 16x sales multiple. Their margins are horrendous and will never be very good. There's a small chance they can ever grow into their current valuation (it'd require 500+ million global customers), much less anything higher.
Uber's quarterly sales will catch Netflix in probably four or five quarters. How about a 16x multiple on Uber's sales four years out, with a conservative $25 billion in sales at that point. How does $400 billion sound?
>> Their competition is literally every office building on the market...
Definitely false. The majority of office buildings on the market aren't interested in leasing me spaces of varying sizes for terms from 1 month to 5 years.
Sure, but some are and coworking space competitors definitely are. I don't see the unique advantage, the moat if you will, to justify WeWork's valuation. I've seen comparisons to Uber in this thread but even if you presume for the argument that Uber's valuation is justified, the network effects don't seem nearly as strong for WeWork.
During world war 2, fan favorite companies like Mercedez Benz were building tanks for the Nazis. If there is a war today don’t you think the government will seize everything and we will all be working for them? This is different in some ways because Google is likely being paid for this but I don’t think they can just refuse nor do I think they should be able to, frankly. That’s not how national security works.
And just because employees at Google refuse, employees in one of the big Chinese firms won’t be able to. If our government does not have this tech then someone else will.
We live in this fantasy, like people aren’t dying everyday from war in so many places around the world. We are not immune to that.
Edit: to all the folks down voting me it’s a good idea to get a different perspective sometimes.
It’s not meaningless. Saying Blockchain is meaningless is like saying the web is meaningless or the internet is meaningless. Just because you either don’t understand it or you feel it’s too broad does not make it meaningless.
Blockchain is a distributed ledger that guarantees consensus without any central party. It has many other properties, like making the transactions public in most cases, and many other important things that are different from centralized databases and non public databases we have been using for the last 30 years.
> Blockchain is a distributed ledger that guarantees consensus without any central party
Except not even Blockchain guarantees consensus. If that was true we wouldn't see the hundreds of bitcoin forks. Let's not even forget Ethereum and Ethereum Classic. The "consensus" for ethereum was provided largely a few whales.
Blockchain doesn't guarantee consensus at all.
> It has many other properties, like making the transactions public in most cases, and many other important things that are different from centralized databases and non public databases we have been using for the last 30 years.
Setting aside your massive handwave of "many other things", your only concrete example is not at all unique to the blockchain. You can make any dataset public regardless of data structure used. Likewise nothing is stopping you from making a private blockchain (as stupid of an idea as that might be).
It's all just breathless hype. The blockchain is just a data structure similar to git only orders of magnitude less efficient by design. It's only good for operating things like Bitcoin or Ethereum. Outside of criminal use, Bitcoin has proven entirely useless in the real world. Ethereum used largely as a platform to build ICO scams.
The whole thing is a scam built on other scams. It's all souped up modern day penny stocks custom built to trick rubes into lining the pockets of a bunch of scammers.
> Except not even Blockchain guarantees consensus. If that was true we wouldn't see the hundreds of bitcoin forks. Let's not even forget Ethereum and Ethereum Classic.
You are deliberately torturing the word consensus just to make a straw man argument against crypto. The original Bitcoin block chain exists and everyone agrees where it is and how long it is. The fact that someone can create a copy and tinker with it with their own group of friends has no effect on the real chain. Anyone can fork it. That's not a technical limitation or flaw in any way even if you try to make it out to be.
Blockchains have solved the technical challenges of coming to consensus. They did not solve the political challenges of bringing Republicans and Democrats together in a consensus. Sorry about that. Maybe in the future.
Ah, so consensus is actually just a codeword for mob rule? I'd say it is pretty ambiguous and if I thought Bitcoin Cash was the real bitcoin, I'd be pissed at the "Bitcoin" fuckers stealing the name...
The issue is that you now have ICOs (including by public companies) that use the term "blockchain" just for the hype, even though the supposed "blockchains" they use don't fulfill your conditions.
I don't know why you're being downvoted. That seems a reasonable definition of blockchain, in much the same way one could give a reasonable definition of an array as a sequence of items.
The article's premise that 'The term blockchain is misused and frequently misunderstood' (which is true) means 'Blockchain is meaningless' doesn't hold water and this is very typical for a Vox technology article.
I think gp's definition is still too broad. Consensus is not an inherent property of blockchains, for example. You can make blockchains without any consensus at all, or with some central authority prescribing reality. A blockchain is simply a kind of data structure, like a linked list or a hash map or an array.
Exactly. Is "blockchain" just the data structure, or is it the data structure + the protocol for communication + the software to validate it?
Another example might be bit torrent. I personally wouldn't classify bit torrent as just the data structure. I would say its the data structure, the protocol and the end clients. However if someone used these technologies to create a different format and a different protocol, I wouldn't think of it as bit torrent.
Mining this stuff is a funny thing, that is a devisive feature even in the crypto space.
That being said, this isn’t the first time where mining has plummeted in profitability. Early last year similar articles started popping up and in fact GPUs on eBay we’re being sold at dirt cheap prices because crypto was “plummeting”.
I wouldn’t bet on crypto going anywhere, not in this crazy world we live in.
The real issue with all the pump and dump, fear of missing out, and all the other crazy “mooning” is that it is ruining this whole space. It is creating a reality that all the haters of cryptocurrency have been talking about for a while.
Instead of focusing on building real applications with blockchain, programmable money, and changing the world everyone is focused on trading and get rich quick schemes. This stuff could change the world it is money ripped out of government hands and it could be baked into everything we do on the internet but I am not so sure that will happen anytime soon anymore.
I am very jaded with the whole space because of all this fraud.
>It is creating a reality that all the haters of cryptocurrency have been talking about for a while.
Or you might have it backwards: it's reality crashing against the near-religious fantasies that crypto boosters held for ideological and other reasons.
Here's the thing. You're walking in here all smug like "told you regulation was necessary." Meanwhile all the people who got into crypto because they don't like regulation aren't expressing any regrets. You're "I told you so" is falling flat.
You're trying to frame crypto-enthusists as hypocritical fair-weather libertarians that will change their mind just as soon as there's a scam or hack which affects them. Yet it never materializes. When exchanges get hacked you don't here "wahh let's get regulation". You hear "Don't keep money on exchanges".
While true, I tend to believe regulation then empowers this same kind of thing to happen, but legally and unreported at firms like JPMorgan, Goldman, Morgan-Stanley.
Or: after centuries of iteration our current regulatory environment manages to prevent all but the largest, smartest, and toughest fraudsters from doing what they do, and we should focus on improving those regulations (e.g. by working to separate money and politics) rather than ripping them down on the off chance that for some poorly explained reason the market will behave better this time.
We don't really have mechanisms to iterate on regulations from a societal perspective. The body polity needs to be able to evaluate the effectiveness of regulations in order to iterate on them, and that's so far outside the capabilities of the voting public as to be unimaginable.
Public choice theory would suggest that the iteration is happening on the political and public manipulation front, with rent-seeking market incumbents growing more effective at selling the public on the need for steeper barriers to market participation, and persuading political representatives to institute such barriers.
The story of the "Money Services Round Table" would be a good example of this:
You could make the exact same argument about the stock market. "Nobody is forcing people to invest in a stock as I'm artificially manipulating the price." Pulling a con doesn't automatically become moral just because it is done with a new tool.
Edit: whataretensor's comment was modified, which makes my comment seem quite out of place. The original text of the comment I was replying to was "Nobody is forcing anyone else to take part in these schemes. The people who would regulate this space seem to not understand it at all."
On the contrary, it shows how the market responds and evolves on its own without top-down enforcement.
These pump and dumps will eventually stop being effective, because in a situation where information flows freely, and there are no backstops or gatekeepers to protect investors from their own gullibility, natural selection and other bottom-up adaptive processes go to work.
You can even see the growing 'immunity' that investors have to these pump-and-dump schemes on cryptocurrency forums. People on the forums are much quicker to see through attempts at coordinated pumps now than even a few months ago. Letting things play out results in a more robust configuration than trying to guide the market from the top-down through the creation of powerful gatekeepers and laws that rob people of their agency.
That's one way in which the market adapts. Overprotecting children or investors is not in their long-term interest, or society's.
Ultimately it comes down to whether you think top down processes are more effective, or bottom up ones. I personally know some older people who wanted to invest in Ripple. They talked to me about it and I made them promise not to do so, and to always check with me before investing in any cryptocurrency. That's a bottom up adaptation that makes a couple individuals safer. Sure the government could have just banned them from investing in Ripple, but that's a crude (and Big-Brother-ish) solution that's going to have untold numbers of unintended consequences.
Our cognitive biases will prefer the top-down solution, because it's easier to reason about, but I would argue that reason and evidence tells us that bottom-up works better in the long run. A billion micro-adaptations are exponentially better than a couple macro ones. The world is far more complex/detailed than any regulatory agency can handle.
==I'm rate limited, so responding to Sangermaine's comment below after this point==
>>What if, instead of these older people having to happen to personally know someone knowledgeable about crypto like yourself, or knowing how to find one and not get duped in some forum, there were regulations requiring public disclosure of various information regarding cryptocurrencies and their backers? You know, like we already have for securities? Then these older people could research this information and decide for themselves what to do, which seems to be what you advocate.
You're looking at current regulatory restrictions through rose-colored glasses. The current law requires far more than just disclosure. It also requires having a certain number of 'market professionals' (as determined by the regulatory agency) vet the offering, and for the agency itself to vet it and give it approval before the issuer can offer it to anyone other than the rich (accredited investors).
This inevitably leads to the cost of publicly offering a security to run into the millions of dollars.
There are massively negative unintended consequences from raising the financial barrier to capital raising. Just because they're not directly felt, doesn't mean they aren't just as impactful as the more direct negative consequences that such a blanket restriction would ameliorate.
Look, there are no perfect solutions. We have to think about this in terms of long-term impact, and trade-offs. The long-term result of preventing politicians from imposing laws that violate people's right to do with their own money what they wish, is the emergence of a relatively more vigilant investing public, that generally knows better that it has to do due diligence, and that through experience, some of it bitter, has developed relationships with individuals they can count on to help them with their investment decisions.
The alternative is that we create a centralized gatekeeper and presumably that will stop more scams, but that also stops more opportunities. We would be taking away people's agency, and replacing the billions of decisions that the investing public would have collectively done, with the much smaller set that a regulatory agency does when making judgements on what people are permitted to invest in.
>>"Allow everything" or "ban everything" aren't the only options, never have been, and in the real world aren't.
I never suggested allowing everything. I think fraud should not be allowed. But I don't think we should preemptively ban everything that falls within some broad class of economic activity that has not gotten the approval of some gatekeeper.
> Overprotecting children or investors is not in their long-term interest, or society's.
There's a reason why the term "accredited investor" exists: it designates people with high enough net worth that even in the event of total collapse of their speculation they will not be a burden to society. That society does overprotect institutional investors like banks is a different thing.
> Our cognitive biases will prefer the top-down solution, because it's easier to reason about, but I would argue that reason and evidence tells us that bottom-up works better in the long run.
Not in cases where basic human greed is involved. People involved in MLM schemes, for example, are known to even f..k up their family for personal gain. Greed is powerful and highly corrosive.
>There's a reason why the term "accredited investor" exists: it designates people with high enough net worth that even in the event of total collapse of their speculation they will not be a burden to society.
And it completely fails. Because the non-high-net worth individuals still de facto invest directly but they pay to do it via a broker. Thus the wealthy establish for themselves a rent seeking position and successfully sell it to people like you as "consumer protection". Did you honestly think that a law which codifies only letting the wealthy take advantage of certain opportunities would actually help society?
Praytell would you also be in favor of only letting "accredited intellectuals" go to college just to ensure that the middle class doesn't blow their life savings on a poorly chosen major?
There's a reason why the term "accredited investor" exists: it designates people with high enough net worth that even in the event of total collapse of their speculation they will not be a burden to society.
That’s a much better and more succinct response to the all-to-common complaint about “accredited investors” than I have come up with. One would think it obvious given the long, successful history of MLM, Ponzi schemes, and the like. But one of the things that make MLM/Ponzi work is Fear of Missing Out, and I hear a lot of FOMO when I hear a complaint about accredited investors.
Limiting direct investment to the very rich (accredited investors) is going to do massive damage to the investing public in the long run. You're denying the bulk of society the trials and tribulations it needs to evolve.
It's obvious to me that the negative unintended consequences of preemptively banning an entire class of economic exchange to the majority of people (unaccredited investors), and creating a centralized gatekeeper that gives exemptions on a case by case basis for projects that it approves, is going to be massive. That we see this so differently suggest we come from a very different set of personal experiences and perspectives on the world.
>>Not in cases where basic human greed is involved. People involved in MLM schemes, for example, are known to even f..k up their family for personal gain. Greed is powerful and highly corrosive.
That is not true. Human greed makes humans motivated to avoid bad investments as well. That's why the market adapts over time to be less gullible.
==I'm rate limited, so I'll respond to your comment below after this point==
>>There's a difference between investment (everyone can go via an online broker and trade with stocks) and dangerous speculations like IPOs or ICOs.
There's value in learning to spot promising new tokens, or in the case of IPOs, securities, as doing so is very lucrative. It's also beneficial for society for more people to become skilled in this activity, as it means faster technological evolution. Creating a class of investment lawyers and VCs who monopolize these sectors is not in society's interest.
>>and look where society is today, where people devise more and more elaborate fraud schemes and people are still believing it and sometimes invest their entire life savings into fraud, despite everyone and their dog blaring that they are investing in a fraud.
That doesn't show that the market doesn't learn. You're not demonstrating that the same proportion of people are falling for manias today as in 1636. You're only pointing out the obvious: that scams and irrationality still exist, and claiming this proves that no learning/adaptation happens.
To Sangermaine:
>>Nope. For the same reason that people still commit crimes despite knowing the consequences, greed for possible profit will always be the more powerful motivator.
If it were "always the more powerful motivator", then everyone would commit crime. You're falling for the pessimistic bias which inevitably leads to repressive societies. Over-reaction to crime is more dangerous than under-reaction.
>That is not true. Human greed makes humans motivated to avoid bad investments as well.
Nope. For the same reason that people still commit crimes despite knowing the consequences, greed for possible profit will always be the more powerful motivator.
>That's why the market adapts over time to be less gullible.
No they don't, and never have. People just keep getting duped until rules and regulations are put into place. We have all of human history to show this.
You're simply expressing semi-religious beliefs about how things should work. We're concerned with how things demonstrably have worked and still work.
> Limiting direct investment to the very rich (accredited investors) is going to do massive damage to the investing public in the long run.
There's a difference between investment (everyone can go via an online broker and trade with stocks) and dangerous speculations like IPOs or ICOs.
> That's why the market adapts over time to be less gullible.
"The market", if such a thing exists, does not learn. For an example, look at the tulip mania - in 1636 - and look where society is today, where people devise more and more elaborate fraud schemes and people are still believing it and sometimes invest their entire life savings into fraud, despite everyone and their dog blaring that they are investing in a fraud.
What's the evidence that learning/adaptation happens in a positive direction in markets? Without the directionality indicator, it sounds more like "this system has changed" rather than "this system has improved".
Also, the positive assertion that markets learn/adapt requires evidence more than the negative. The default assumption should be that the market changes randomly.
>>Also, the positive assertion that markets learn/adapt requires evidence more than the negative. The default assumption should be that the market changes randomly.
I don't see the basis of assuming markets change randomly. Markets are composed of individuals who adapt and learn, and in a free market, theory would suggest people will adapt to configurations that tend to be mutually beneficial.
The market process of profit and loss also rewards better utilizers of capital with more capital, and less effective utilizers with less, so one would expect the market to evolve to become more effective at utilizing capital.
My thought is that unless proved otherwise, the default assumption should not be "signal", it should be "noise".
There is little evidence that modern finance is a free market, or that (macro)-economic theory is all that good at making predictions.
Finally, this may be something we have to agree to disagree on. I look at financial markets and see too much irrational behavior and impossibly complex systems to make accurate predictions on. Without predictions we can test and verify, I don't place much faith in untested assertions, especially since the loudest voices tend to monetize giving advice like this.
Markets are predictable until they aren't. Economics has some interesting things to say about the behavior of people's rationality, but I have yet to be convinced that faith in the free market is anything more than seeing imaginary patterns in a complex system combined with survivorship bias.
Society has learned through long and bitter experience that ignoring this particular problem doesn't make it go away. It's exceedingly generous to call the supposition that ignoring it a bit longer will cause it to go away a "solution." I'd call it a pipe dream.
The cryptocurrency market demonstrates this in accelerated time. The quality of offerings is far better today (though still massively dominated by marketing hype/bullshit) than it was three years ago. The amount being lost to scams was also substantially more, proportionally, three years ago.
Are you actually suggesting that government ought to let fraudsters / unregulated securities run amok? No legal framework for punishment or restitution?
Fraud should be punished. But bad investments are a result of far more than just fraud.
Also, punishing fraud, and creating a gatekeeper that every party needs to get approval from before being allowed to participate in a market activity, are two entirely different things. The law should be reactive. We shouldn't be denying people their liberty as a preemptive measure to stop crime.
>>fraudsters / unregulated securities
I just noticed this conflation. An unregulated security is a security that has not been approved by some gatekeeper. This is totally different from fraud, and these two shouldn't be put in the same category.
>They talked to me about it and I made them promise not to do so, and to always check with me before investing in any cryptocurrency. That's a bottom up adaptation that makes a couple individuals safer. Sure the government could have just banned them from investing in Ripple, but that's a crude (and Big-Brother-ish) solution that's going to have untold numbers of unintended consequences.
Your example is actually a perfect demonstration of how regulation could help. What if, instead of these older people having to happen to personally know someone knowledgeable about crypto like yourself, or knowing how to find one and not get duped in some forum, there were regulations requiring public disclosure of various information regarding cryptocurrencies and their backers? You know, like we already have for securities? Then these older people could research this information and decide for themselves what to do, which seems to be what you advocate.
This is the problem with ideological zealotry: it renders you unable to conceive of anyone as not being an ideological zealot. "Allow everything" or "ban everything" aren't the only options, never have been, and in the real world aren't. It's frustrating to discuss these issue with True Believers because the response is inevitably "Oh, so we should just ban everything then?"
I'm not a "committed libertarian", even if I would be classified as a libertarian according to my views. Any ideological commitment is dangerous, whether that's to libertarianism, or anti-libertarian mixed-economics-ism.
I’m afraid that reality has been around for a lot longer than cryptocurrency and it was quite obvious to a great many people that an unregulated global financial market was going to result in massive fraud. After all it’s a big enough problem in regulated markets!
“Ripped out of the hands of government” means “ripped out of the hands of regulators” and history has taught us exactly what happens again and again in such situations.
The fraud will continue until we get more and more rules and regulation. I expect the governments will step in to regulate all of this. Once we have that we will have applications that work for the public .
But I think the real innovation will be in private blockchain systems . The Hyperledger group has some exciting technology . Taking business problems you know and seeing if it will work will be really exciting.
Even if you aren’t interested in private blockchain technology it gives you what you need to understand. From there you could just read the white papers of bitcoin and Ethereum .
The whole theory of cryptocurrency economics is based on the axiom that people are greedy. Do you really think people didn't realize this? The problem isn't that they didn't realize people are greedy, in fact they believe that more deeply than most. Rather their theories about what aggregate greediness would lead to were inaccurate at least in the short term.
Just today I discovered Bram Cohen is actually working on a new crypto-currency in a company [0] he has setup. It should be interesting to see if he can create a better crypto that doesn't have all problems that he currently sees in Bitcoin and others. He's currently looking for devs with good algorithmic skills to join his company.
Last I heard he was talking about proof of storage, which seems like it has the potential to do for hard drive prices what the others have done for graphics cards!
We are in the dot com bubble of cryptocurrency. Real tech that has been overtaken by hype, momentum investing, and well scammers. I expect a similar type of situation to play out.
I feel like the non-existence USDT is going to be at the center of the coming crisis in cryptocurrency and I think that exchanges should face that head on, rather than letting it swallow them up. Exchanges should start to move away from USDT sooner rather than later.
Well good. If a cryptocoin is regulatable, its a failure. Let them be pumped and dumped until they re banned. It only brings the tech closer to what it has to be
Many millions of people have sums of money from an inheritance or other windfall, this money sits in a bank and does not collect interest, even with low inflation it essentially depreciates. So along comes the crypto market and all of a sudden people are putting their savings in, hoping to make a quick buck on a rising market. They know it is a risk but they do it anyway.
This choice of 'scam coins' over 'fiat' is part religious cult and people get caught up believing more than they can understand about the holy blockchain, however, it also reflects badly on mainstream banking and how broken that is. Really it has been broken for at least a generation in that interest rates are dysfunctional-low.
Barely a day goes by without a scam coming to light that costs real USD, there is a ocean of difference between 'coin market value' and dollars of real money, but still this is lots of poor people losing their windfall savings. It can be a boyfriend or a brother that accesses the savings, so the purse strings are on that trust relationship. My top tip is to get into the divorce business as a lot of people are going to be arguing over 'where the bitcoin went'. They still probably won't be believing 'fiat' money is real so the carcasses left behind by the altcoin scammers should still be rich pickings for lawyers and estate agents.
Right now I am trying to think of how I could use the all wonderful blockchain to help plant trees in the Northern Forest, with an app so people could sponsor a tree and have it all tied in to some fashionable blockchain thing. In this way, in fifty years time, the bits of poetry and dedications people have left for the trees will still work as there will be no central server needed.
However, I don't quite see it. If I am to help plant five million trees by getting people to sponsor the things then the blockchain can wait. My clumsy database tables and the various joins will all be magic-beaned into blockchain sexy at another time, so the forest QR codes and AR poetry works in a decentralised way, for the next few millenia, right?
So maybe I should just roll with it, work with a few altcoin scammers that know the gig is a joke and scam a few million people into buying coins 'backed with saplings' and have them feverishly land grab the whole of the North of England, desperate to plant an extra Rowan tree here or there. In that way, when it all goes tits up, there will be a forest happily growing away.
Or maybe an 'alt-coin' forest could work? 'Bitcoin Pine', 'Bitcoin Oak', 'Bitcoin Ash' - imagine the fun trading in the futures market.
In addition to my first comment... : The western-like environment is also the direct consequence of the "no regulation" aspect that crypto fans like so much. When there start being regulation everyone will leave the space precisely because there's not the hope anymore of making quick fast money...
There's no "application" of blockchain. You'd be rather thanking thoses schemes because they are feeding the hype of what would be seems as a useless techno otherwise.
I mean come on, anything can be done without it and using blockchain just bring unessential minor improvements like decentralization that no one cares about. Prove me wrong ...
I can think of one use for blockchains that can't easily be replicated otherwise (at least not with the same amount of security), it's proving that you knew something at some point in time. Putting something in the blockchain is like taking a picture of it with today's newspaper next to it so to speak, except you can't photoshop it.
If I made a groundbreaking discovery today, putting a sha-256 of it into the blockchain would be a very good proof later on that I actually owned it at this time.
But beyond that I agree with you. My (non-technical) girlfriend is looking into cryptocurrencies lately and she watches tons of youtube videos about it while doing her research (TEDx talks and the like). Easily 90% of the claims of "blockchain is going to revolutionize X" are easily dismissed either because the blockchain can't do what the person claims or there's an other, often simpler solution to this same issue. "Use the blockchain for food traceability", "use the blockchain to validate critical equipment firmware" etc... It sounds good as long as you don't think about it for more than 10 seconds.
The problem is that in order to realize that you need to have a rather deep technical knowledge about how the blockchain works, something 99% of people investing in crypto probably lack.
That still doesn’t require a full blockchain: 90s PGP with multiple signatures is all you need, or going really old school, mailing a copy to yourself using registered mail.
Imagine if a notary, post office, etc. set up a signing service: relational database, basic signatures for user-submitted hashes, etc. Not quite as good but much cheaper to run and much easier to have trusted by a court — I suspect most users would see no additional advantage by adding a blockchain.
The centralised approach described requires that one trusts the database administrator. For a lot of things (probably the vast majority), this is good enough.
For the rest, there's decentralised distributed immutable ledgers.
Trust is an interesting topic: I think many people – and especially courts – would be actively disinclined to trust an anonymous blockchain but might be interested in one where it’s identified participants with reputations, liability, etc. Pay the USPS, Western Union, etc. and get a signature backed by insurance.
Trying to explain something like Bitcoin just seems like you’d have a hard time meeting reasonable doubt standards in a dispute but that’s not the only model.
Exactly, most people have done so for centuries. Of course with 99% reliability only, but no one cares about the 1% possibly added by blockchain (with a retarded additional computing burden to deal witg).
Publish a hash somewhere you can prove a date later, like a newspaper or w/e. Then if at any point you publish the text producing this hash you've just proven you had the text at the point of publishing the hash. Blockchain not needed.
In July of 1610 Galileo was still making discoveries faster than he could publish descriptions of them. On the 25th he discovered that Saturn was apparently situated between two smaller companions that always moved together. Wanting to establish his priority of discovery, but not yet ready to reveal what he had found, he sent to Kepler (and others) the following jumble of letters, which he informed them was a coded description of his latest discovery (...)
Yeah, crypto hype in fake technological improvements is part of this mess. People actually think there is intrinsic value in a public ledger (there isn't).
Cryptocurrencies have proved popular for drug dealing, extortion and speculation/gambling. They will probably also help with tax evasion and money laundering. Those are applications of a sort if not very positive ones. The decentralization is necessary to put the above outside government control.
Yeah but you're not seriously saying that the killer app that everybody is waiting for in crypto is " being useful for criminals ". If so it will be banned everywhere soon like in China and blockchain is just dead.
The applications are projects that require immutable data and wide distribution. Those developments haven't really been made yet.
Most of the discussion today about crypto developments is centered around bitcoin. But just because something utilizes a blockchain doesn't mean it has anything to do with bitcoin. Bitcoin was the first popular application built on top of a blockchain, and arguably the most radical.
It allows you to opt out of the monetary system that's been imposed on you by your govt. This might be less of a big deal if you live in a developed country but it's a big deal if you live in an unstable country.
Say hypothetically you lived in a place like Cuba where the government had banned things like renting out a room to foreigners or selling them a coffee as was the situation when I was there. Taking payment in the local currency would be kind of useless as you couldn't buy much with it and taking dollars, euros or whatever was illegal and could get you in prison if they caught you. However if your customer transferred some ether to a wallet you controlled with a private key but without your name on it it would be quite hard to catch or prove.
Why would it be quite hard to catch or prove? How many fiber optic lines do you think go to Cuba? They could lock down the internet the same way China does. Maybe they haven't gotten around to it yet, but that's not a long term structural argument for the utility of cryptocoins its a temporary moment-in-time argument. Kind of like how at one point a big advantage of buying things on the web was that you didn't have to pay sales tax -- that's not anything inherent in the web, it was just an artifact of governments' lag.
Say your customers are us tourists and they send from a coinbase account to some ether address. Dunno how they'd track that.
I don't think it's a lag thing - decentralized cryptocurrencies are just hard for governments to stop. Similar how governments would like to stop people paying cash in hand and avoiding tax but have never really been able.
You don't need to hold physical cash to hold USD. You could have a bank account in London, Geneva, Paris, or New York with your pounds, franks, euros, or dollars. If you need to leave the country, your savings are already outside of it. Just like your bitcoins.
The answer seems to be that repressive countries haven't yet put in place effective mechanisms to be repressive with respect to bitcoins. But there's zero reason intrinsic to bitcoin to expect that to continue. On the contrary, since everything is digital the choke points are easier to control, not harder.
"Much less from Iran" misunderstands the problem with opening an account from the US. Swiss banks don't want to subject themselves to the long reach of the United States government's aggressive criminal justice system. That's the reason they won't open a bank account for a US system anymore. See, e.g. https://www.swissinfo.ch/eng/tax-evasion_us-programme-nets--...
The reason it was impossible, until recently, for an Iranian to open a bank account in Switzerland was not because of the Iranian governments, it was because the Swiss bank was afraid of running afoul of the US sanctions regime. Because those sanction have been lifted (at least for now) an Iranian can open a bank account in Europe, albeit they'll still have to go through a fairly extensive KYC process.
You can't opt out of the monetary system that's been imposed on you by your govt, because your govt's desires are backed by the use of force[0]. Short of moving to a different country, paying off the enforcers, or going into open rebellion, everything else is a fantasy.
That’s not an option for most people and it has huge risks. Try buying anything big with no disclosed income sources or living well beyond your means and you’ll be getting caught by the people looking for drugs dealers, smugglers, etc. Most countries are pretty good at that.
There aren't really any special Android ARM CPUs, maybe they are confident it doesn't really work on Android because it's very difficult to get the timing precision and low-level assembly sequences in Java/ART compiled code. Though I wonder how that squares up with JNI.
I think the key to the statement is in any case that you need to differentiate between what is possible on the processor architecture level when you have full software control, and what is possible on an operating system level, where 3rd party applications are further restricted in various arbitrary ways such as only allowed to use Java, limited access to high resolution timing primitives, etc. that can make practical exploitation impossible, even if the flaw is present.
It's difficult to reason about because it's hard to tell if you can manipulate a JIT runtime into generating the code you need for the exploit to work - and as the JavaScript implementations show, the answer is often "yes".
JIT engines (and compilers) often generate a familiar instruction patterns. Many JIT engines Target specific languages (like JS) and as result have "simpler" optimizers (less time to do this) and possibly more stable instruction patterns. So my money is on somebody fuzzing the required JS code.
>"A bitcoin is a number, and that number has no utility outside of its ability to be accepted by someone else. Unlike gold, the the minimum value of a bitcoin is zero— its value if everyone stops believing it works. This is one reason why a bitcoin is a risky way to hold assets."
I think people forget that there is a lot of value to a censorship resistant currency.
Before Bitcoin was worth hundreds or thousands of dollars it was being used in the black market at whatever rate it was floating at. That rate is a non zero value. There is no other way, other than another crypto currency, to do business in these black market places.
Now blow that out exponentially to places like China where your money isn't exactly your money. Or places where its ok to seize someones property, depending on whose in power.
This then starts to give you an idea that even when the bubble crashes we will still have Bitcoin.
Bitcoin wallet can be seized and the transactions are traceable and public, so a sufficiently determined actor can figure out who has it and how much.
Then enforce their cut with violence.
I would quibble with this, depending on how we define "seized". My understanding is that your coins cannot be transferred unless the transaction is signed by your private key. So, authorities could seize the computer that has the private key on it, or, as you say, use violence against a known individual, but they have no way in-network to take your wallet. Compare this with the central banking system where governments can and do force banks to freeze or hand over their customers' assets.
The NSA was able to infect air gapped Iranian computers 100 ft underground that only a handful of individuals had access to. I doubt any hot wallets are really out of Government reach given enough time and attention. A cold wallet with offline multi sig - more likely.
“Rosenstreich at online trading firm Swissquote said bitcoin’s surge harks to the surprises of the U.K. referendum on European Union membership and President Trump’s election.
“We have underestimated the populist movements,” he said. “There is growing unease on how central banks and governments are managing fiat currencies. Ordinary people globally understand why a decentralized asset is the ultimate safe haven.””
That’s the reason for 10k and it will be the reason for 100k. 100k puts the market at cap at a trillion, it’s not that crazy if you remember that Gold is several times that and other than looking good as jewelry it has no other real intrinsic value. No one likes to talk about that though, they like to demonize bitcoin which actually does something gold could never do. Force trust in a world where you can’t trust anything.
>No one likes to talk about that though, they like to demonize bitcoin which actually does something gold could never do.
Just playing devils advocate, but you can't replicate/duplicate gold. On the other hand I could create 21M cryptocoins on a blockchain (calling them Bitcoin2 or even just Bitcoin if it pleases). I can make them function identically, similarly or more efficiently than Bitcoin. I can create a new blockchain (network) or put these coins on an existing blockchain (say the Ethereum blockchain). How much would you pay for all 21M Bitcoin? How much would you pay me to create you 21M Bitcoin2 and transfer 100% of them to you?
You say Bitcoin is $10k because ordinary people understand why a decentralized asset is the ultimate safe haven. If that is your premises it makes little sense to compare Bitcoin to gold, compare Bitcoin to other currencies. Why does Litecoin = $100 and Ether = $500? Bitcoin may do something gold could never do, obviously, but can it do anything any other cryptocoin/token can't?
The real irony is cryptocoins and blockchains couldn't even exist without gold, because it is a necessary component in the machines that created bitcoin, that hosts blockchain nodes, mines, hosts wallets and facilitates transactions.
>On the other hand I could create 21M cryptocoins on a blockchain (calling them Bitcoin2 or even just Bitcoin if it pleases). I can make them function identically, similarly or more efficiently than Bitcoin. I can create a new blockchain (network) or put these coins on an existing blockchain (say the Ethereum blockchain). How much would you pay for all 21M Bitcoin? How much would you pay me to create you 21M Bitcoin2 and transfer 100% of them to you?
Econ 101: The price of a currency is based on people's trust in that currency.
>The real irony is cryptocoins and blockchains couldn't even exist without gold, because it is a necessary component in the machines that created bitcoin, that hosts blockchain nodes, mines, hosts wallets and facilitates transactions.
"Econ 101: The price of a currency is based on people's trust in that currency."
Right, but how many people really trust Bitcoin? And by trust, I mean trust that it will retain its value for the foreseeable future.
I have trust that the Euro will retain its value, so I feel confident pricing my product and services using it. On the other hand you'd be crazy to price anything in Bitcoin.
No one has trust in Bitcoin as a currency. Some people have some degree of trust in it as an investment vehicle, which is fine. That doesn't make Bitcoin a currency any more than gold is.
I wouldn't say no one. There are a number of companies that trust Bitcoin enough to use it in trade for their goods and services. For example, ProtonMail (a secure private e-mail provider) trusts Bitcoin enough to accept it in trade for its services.
So, the same thing that gives the Euro and Gold value (that people will take it trade for goods and services) is one of the components accounting for Bitcoin's valuation. The majority of Bitcoin's value at this point is likely speculation. However some percentage of the value is not derived from currency arbitrage or speculation.
Even if Bitcoin trade participating merchants do not trust the market valuation of Bitcoin enough to be willing to hold Bitcoin for very long after they accept it as part of a transaction (and therefor immediately convert it to USDs) it is still valued by the participating merchant in line with the trade. The same could be said for the value of the electronic ledger recordings created by credit cards. They are generally viewed to have around equivalent value to USDs. But, they are not a currency either.
> On the other hand you'd be crazy to price anything in Bitcoin.
Why? It was easy to add Cryptocurrency as a purchasing option for the online store for my shed business. My buildings are priced in dollars, but people can use crypto to pay and the crypto value is pegged at the current rate of trade on an exchange.
Bonus: I can use the crypto to go buy materials - never have to convert it to dollars.
>Econ 101: The price of a currency is based on people's trust in that currency.
That is the beauty of blockchain right? Its trustless! I'll create 21M of Bitcoin2 on the Ethereum blockchain and send you the smart contract address you can verify on etherscan and boom there is no trust needed.
Edit: As to Irony, OP could have used anything to justify the value of Bitcoin, it is ironic he would select Gold and say it has no intrinsic value other than looking good as jewelry, when it is a intrinsic component to the Bitcoin ecosystem. Notwithstanding, I don't think its a coincidence OP compared Bitcoins value to gold.
The OP meant "trust that it will continue to hold value", not (merely) "trust that transactions happen as intended". The blockchain crypto-magic only ensures the latter.
> On the other hand I could create 21M cryptocoins on a blockchain (calling them Bitcoin2 or even just Bitcoin if it pleases). I can make them function identically, similarly or more efficiently than Bitcoin.
You can do the same thing with Facebook or Twitter, but the value is not in the code or functionality, it really is in the network of people using it.
Why can't you replicate gold? What is gold? It's some elementary particles (like quarks) arranged in a certain way that we all agree are valuable. We could easily agree that some other arrangement is valuable (such as Aluminum).
For all intents and purposes finding a large deposit of gold is the same as duplicating bitcoin. Except the former can happen easily and the latter requires some immense investments to achieve.
You say 21M "cryptocoins" but you couldn't, however, create 21M BTC arbitrarily.
As long as that number stays the same (it isn't completely immutable) then BTC has real scarcity - making it a store of value, like gold. Throw in some additional properties that BTC has that gold does not, and an argument can be made that BTC is at least a decent value store.
Even at $100,000/BTC, Bitcoin would still have a ~1/5th of the market cap of all gold mined.
And in a truly universal sense - gold is made by stars. There are 100 billion stars. There's only one Satoshi in the known universe ;)
What exactly is a BTC? BTC is man made, and depends upon computers and software. And the people who control the software can change their minds, if they so choose. So what a BTC is now, may not be what it is later, including its scarcity. See also the ETH and BTC forks.
Gold on the other hand exists naturally in nature, and doesn't change based upon someone else's whim.
BTC is what the distributed consensus says BTC is. You can’t fake that without pouring billions into building up mining infrastructure to organize a 51% attack and even then the distributed consensus will simply fork around your amazing achievement of successfully doing a single double spend?
So yeah, BTC is definitely not like gold, it’s way better.
Well, you can't double spend gold. You either have it or your don't. And until the matter replicators come into existence, nobody can fork gold.
As to your argument for the 51%, say, Visa comes out with a fork called VisaCoin(TM) that allows one to use a visa card to make transactions directly from VisaCoin (which is a BTC fork).
So that was two to ten people, maybe and what an ad slogan?
And here's the ad slogan: "When you go to the Fog City Diner in San Francisco, take your visa card, because they don't take BTC!"
How is BTC better than gold? What can I do with a bitcoin? It's just data. It's still a fiat currency. Gold is specifically not a fiat currency because it has real world applications. I will agree cryptocurrencies are better than other forms of fiat currency in that there is a definitive quantity, similar to a non-fiat currency, but it's intrinsic value is in the trust others will accept it in exchange for something that has real value.
Suppose a solar flare destroyed all existing digital equipment. What would a physical printout of a wallet be worth?
In their absurdity they are. Oh, and in the way that the two events would wipe out the function of a store of value for bitcoin and gold, respectively.
how exactly does this happen. This has to involve protocol change or is there something in bitcoin protocol that forks around a chain when a double spend is detected. And how exactly is a double spend detected ?
Diuble spend is detected when a longer chain is published to contest the currently accepted chain with orphan depth of more than 5-6. This is huge deal and will decimate butcoin valuation for sure, but just as with acceptance of segwit and hardforks around protocol bugs in the past - there can be agreement made to deploy a version of bitcoin software to hardcode which chain is valid.
Not saying this is easy but when the project is attacked like that, there will be some action.
At this point the arguments for or against the idea of cryptocurrency are pretty irrelevant. Bitfinex has injected millions of dollars of fake money into the ecosystem, users are reporting an ability to withdraw money from it on Reddit, and their Twitter account's last message was reports of a DDoS two days ago with no updates.
Bitfinex controls Tether, a single source cryptocurrency supposedly backed by and pegged to the US dollar. The market cap of Tether has risen $188 million dollars to $678 million in one month:
If Tether is what they say it is, this can only come from investments of US dollars. Ie nearly $400 million dollars of investment in one month.
On November 21 Tether announced a hack in which they lost $30 million.
Bitfinex is extremely likely to be insolvent at this point. Users are complaining of an inability to withdraw funds on Reddit, and Bitfinex's Twitter has a days old announcement of a supposed DDoS attack, with no updates:
Tether announced a hack in which they lost 30 million USDT, not USD. As they don't plan to redeem those USDT to USD, in no sense Tether lost 30 million USD. As far as I can tell, Tether lost nothing.
Do you still think the Tether is still held by the thieves? They traded it for other cryptocurrencies, out of Bitfinex, the second they stole it.
That is, of course, if it actually was a theft, and it was actually for $30 million. It's a single source currency, no one but the people running Tether knows what's actually behind it.
I'm not clear on the the details, but if you wanted to look in to it a lot stems from their "Tether" crypto currency which is supposedly backed by real US Dollars, but many suspect that they created new unbacked "tethers" to buy and bid-up BTC.
In a sense people are worried that they're literally making up money on the promise they have US Dollars so they can buy up BTC and sell it to maybe regain the missing USD? Unclear.
Need to remember that this is the same place, I believe, that was "hacked" and they spread the losses across all their customers if their costs were actually lost or not. Details have been hard to come by which is where the suspicion seems to have really started.
While bitcoin stores value in fiat, eventually that may not be the case and bitcoin will just be worth bitcoin. I know that day is likely very far off but if enough economies collapse, price stabilized and people adopt bitcoin as a currency, we may stop caring what a bitcoin is worth in USD, Yen, AUD, what have you.
I'm not convinced this is true anymore. My only information source is anecdotal, but I've been amazed at how many non technical people I've talked to lately that know about Bitcoin. Many are even buying little bits on coinbase. Their knowledge doesn't run deep, but it certainly exceeds levels of "never heard of it."
You probably just covered > 50% of the population of the earth there. If that isn’t “ordinary people” than what is? People aren’t all rural farmers anymore.
Brussels is the centre of power in the EU. I have nothing against Toronto, but just because its population is higher doesn't really award it the status of being more "major".
Being important or good at one thing doesn’t make you a major city. It’s that you’re not known for one thing that makes you important. NYC has software, banking, media, art, culture, dining, etc. DC or Brussels just has one thing: political power.
Even then, there are plenty who are on the internet without really understanding what it is they're using. They just know how to pattern match (netflix.com will take me to movies + tv but no idea how or where it comes from)
I think on a surface level, they'd say sure, digital money, why wouldn't that be the future but they assume it comes from an "authoritative" source such as the UN or a government.
I wonder whether people associate money with government simply because that's what most money labeling says.
If I were living in a world where money had just been invented, I suppose I'd care mainly that whoever was issuing it was trustworthy enough not to issue extra on the side.* Otherwise I wouldn't really care where it came from.
I'm not sure if I'm agreeing with you, disagreeing, or just continuing the discussion.
*Eventually I'd come to understand that inflation is not necessarily a bad thing, but my first instinct would be that I'd value money only if it were scarce.
So you're saying these average people that say "sure, digital money, why wouldn't that be the future" also "understand why a decentralized asset is the ultimate safe haven"? Huh?
How are you interpreting the term "understand"?
Does the average person even understand what a "decentralized asset" is?
Wait till Africa stops using their local currency mobile payments and switches to crypto. Internet use won’t matter as bitcoin and I’m sure many crypto to follow won’t hinge on an internet connection.
Maybe. My point wasn't so much that people need internet to use cryptos as that our definition of "ordinary people" is pretty skewed compared to the actual world population.
This is nonsense. This is being driven by speculation / minuscule interest rates / greed. Very little of the demand for btc in the past year is due to lack of faith in institutions.
You might be right, but in Zimbabwe it actually was driving the price like this. There it already reached 10K at the end of October. Why? Hyperinflation of the local currency.
I think you're dead on right in what is driving it, but I get the feeling you are suggesting those are poor reasons for the drive. I tend to think they are good reasons. I also don't think greed is always negative, though it certainly can be. However much of the activity in the free market that benefits everyone is, at some level, based on greed.
Sure, that's how it started. But as the adoption increases and price skyrockets, more people will understand the value of the concept of decentralization.
If the value prop of Bitcoin is that it is a store of value comparable to gold (which is now what it is being sold as as far as I can tell), it doesn't need to skyrocket in price. It needs to hold value during a recession. How in the world is that going to happen when so many people holding it right now are speculators looking to make a buck? They will flee and the price will tank. How is that a store of value?
The truth is, nobody really knows what is driving the price up. It’s not the DNMs, the high price and fees are a PITA for them. Could be artificial pump via USDT. Could be individuals or even nations under financial sanctions dumping cash into the markets. Could be speculators in Western markets. Could be people in countries with unstable currencies looking to hedge their losses. We know all of these are factors - unless tethers are actually backed 1:1 by USD - but due to the decentralized and pseudonymous nature of the currency there is little way to know what the prevailing reasons are unless and until it all comes tumbling down. Gox blew up in 2013 and the full story only came to light (well, sort of) this year.
Or it could be all of the above and then some. For some reason we as humans like everything neat and tidy and be able to point our finger at one thing and say this is it. If there’s anything you can learn from the world and why it operates the way it does and how some events that would seem unthinkable eventually transpire, is that the world is much more complex than anyone gives it credit. This goes for economies, markets, bitcoin growth, wars, policies, lobbying and just about everything else. So yeah, I’d say it’s a number of reasons.
Yes, this exactly. I've been trying to point this out as much as possible. The key to future success is adoption, and the precursor to adoption is awareness and interest.
Let me try to make the case for why Bitcoin could be a useful beyond greed.
I can't really think of many reasons why you would use crypto to pay for a coffee or a sandwich if you live in the West (or frankly, even most developing nations).
On the other hand, I can definitely see the utility in a censorship-resistant digital medium to store wealth. To me, this latter use case has much, much more potential to serve the unbanked (as well as the banked).
Some use cases I can think off the top of my head:
(1) You are from Syria and need to flee war and escape into Europe – however bank transfers into Europe are almost impossible if you are a common Syrian. Bitcoin allows you to take your wealth with you, in your brain, as you escape across the border, by just memorising your twelve word private key.
(2) You are from Venezuela or Zimbabwe – The government has issued capital controls and is devaluing currency by the day. You transfer your wealth into Bitcoin in order to offset capital erosion due to hyper-inflation. When the situation stabilises, you transfer your Bitcoin back into fiat.
(3) You are Saudi billionaire Al-Waleed bin Talal. The government freezes all your assets in a political coup. If you have a portion of your wealth in Bitcoin, you could protect them from government expropriation and anonymously transfer them to associates or family members abroad.
(4) You are whistleblower Julian Assance and have been cut off from the financial system as a way to censor your speech. Bitcoin allows you to have an unbreakable digital "Swiss bank account" that the authorities are not able to reach.
This reminds me of Peter Thiel's recent words about Bitcoin [1]: "it's like a reserve form of money, it's like gold, and it's just a store of value. You don't need to use it to make payments."
Is it considered spam because of its substance or because it's repeated verbatim?
E.g. if I take the same exact comment but paraphrase it every time I post it, would that be ok?
The reason I ask is because I see a few accounts post the same tired criticism of bitcoin over and over and see no reprisal for spam.
I would be interested in understanding what the objective rule here is, since I checked the guidelines and could not find references to comment spam definition.
> You are from Venezuela or Zimbabwe – The government has issued capital controls and is devaluing currency by the day. You transfer your wealth into Bitcoin in order to offset capital erosion due to hyper-inflation. When the situation stabilises, you transfer your Bitcoin back into fiat.
How exactly do you transfer your wealth to BTC in this scenario? There aren't many people willing to sell BTC in exchange for a rapidly devaluing third world currency. Realistically, to use any of the large online exchanges, you'll need to convert it to some common currency (like USD or Euro) anyway. But if you can do that, why would you buy BTC, instead of just storing your money in that common currency? It's going to be a lot more stable.
You'd need to get it while you had a chance (see China, Japan, Korea making massive volumes and for a while a lot of the price gains). Once it all freezes up then all you can do is work/trade/exchange for the BTC or USD from those who have it just like it probably always has in situations like that.
Except now they can't literally come take the USD nor can they freeze in-country or off-shore banks so if that's a real scenario for you BTC is a pretty nice deal.
People in Venezuela are actively trading lots of bitcoin every day, in person. You can see this in the LocalBitcoins data: https://coin.dance/volume/localbitcoins
So, okay, some of the fortunate people who do have access to USD/EUR are trading it for Bitcoin on LocalBitcoins, not just storing it. But you're making it sound like this is a graph of ordinary Venezuelans trading their hard-earned bolivar into lucrative Bitcoin, which it almost certainly isn't.
> I can't really think of many reasons why you would use crypto to pay for a coffee or a sandwich if you live in the West (or frankly, even most developing nations).
Until recently that was one of the main utilities of Bitcoin and the mainstream community changed the discourse to "reserve of value". BitPay, Coinbase, Xapo et al were created with the idea of transactions.
This is just one of many observations about how people arguments are not consistent.
I think many organizations behind Bitcoin are responsible for delaying relatively simple innovations to make Bitcoin useful for transactions.
money laundering is legitimising illicit profits but disguising them as legitimate income. none of the examples above fits this definition.actually, it is the opposite - protecting your legitimate gains from illegitimate actions of government.
You are right, I am using money laundering to mean 'anonymous monetary transfer of arbitrary size/value', which most governments don't allow as far as I know.
[1] https://www.investopedia.com/terms/m/moneylaundering.asp
"Money laundering is the process of creating the appearance that large amounts of money obtained from criminal activity, such as drug trafficking or terrorist activity, originated from a legitimate source."
[2] https://www.int-comp.org/careers/a-career-in-aml/what-is-mon... "Money laundering is the generic term used to describe the process by which criminals disguise the original ownership and control of the proceeds of criminal conduct by making such proceeds appear to have derived from a legitimate source."
If i carry a pocket knife, would you call me stabber?
"anonymous monetary transfer of arbitrary size/value" is the knife, money laundering is the stabbing.
There is absolutely nothing that would prevent a government outlawing and criminalizing bitcoin at any point in time. With one stroke of a pen government can outlaw owning bitcoins or performing any transactions in bitcoins. I'd say this is bound to happen eventually with certainty because no government would be willing to lose control on currency (especially ability to pull it out of thin air) and thereby the power they exert on economy as well as other nations. You can count on this. So all those scenarios you mentioned are meaningless because any capital you have in bitcoins is bound to evaporate overnight and reduced to zero at the whim of the government.
Congress may have the power to prohibit virtual currencies (VCs) under its power “[t]o regulate Commerce with foreign Nations, and among the several States”[64] and under its exclusive constitutional power “to coin Money” and “regulate the Value thereof.”[64] In a November 2014 decision, the Court upheld the power of regulators to prosecute a defendant who “designed, created and minted coins called ‘Liberty Dollars,’ coins ‘in resemblance or in similitude’ [or made to look like] of U.S. coins."[65] Although the defendant did not pass the Liberty Dollars currency as a counterfeit, the currency were in close enough “resemblance of coins of the United States or of foreign countries” and consequentially fell under the authority of 18 U.S.C.A. § 486.123 The Court has not decided if § 486 includes the power to prohibit VCs, but if a Court decides that the purpose and intent of VC resembles United States or foreign currency it may fall under § 486. The Stamp Payment Act of 1862 prohibits anyone from “mak[ing], issu[ing], circulat[ing], or pay[ing] out any note, check, memorandum, token, or other obligation for a less sum than $1, intended to circulate as money or to be received or used in lieu of lawful money of the United States.”[66] The Court has not decided if Congress has the power to prohibit VCs under this Act or any other existing regulation or statute.
> If Starbucks accepted Euro in US for its coffee it would be a crime
I don't believe that's true. The US dollar is only mandatory for two things: for settling debts (the lender must accept USD to extinguish debt) and for paying taxes. Otherwise people are free to trade as they please - euros, chickens, whatever.
IANAL, but there have been laws on the book prohibiting bartering in any substantial amount for a while. Of course, the IRS is not going to chase you down for swapping with your neighbor, but large scale "bartering" is definitely frowned upon. What's to stop people bartering a yacht for a house and avoid taxes?
For this to happen there would need to be global heads of governments consensus and look how wonderfully the UN is working... it’s a joke. So the scenario you paint is impossible.
Japan has already embraced cryptos as a legal currency. They won't be the last. As this happens, there will be geopolitical factors at play and it won't be that easy to simply "outlaw cryptocurrencies".
I'm actually taking too a few people in Venezuela who may do some work for me and I'm going to pay them in Bitcoin, it seems a much option than their currency at the moment.
`100k puts the market at cap at a trillion, it’s not that crazy if you remember that Gold is several times that`. Similar things heard during every irrational bubble.
I believe people often trot out the 'actual worthlessness' of fiat currency, to support a misguided idea that btc must be the democratic antidote which will free countless millions from the financial enslavement of the global financial machine.
Currency is currency BECAUSE its sponsored by government. And the payments system only works because you are indemnified. By the FDIC. By Chase Credit Cards. That is, the evil banks. How so for btc?
BTC hits 10k while US readies to pass tax overhauls to increase an already alarming wealth inequality. Freedom fighters should pick the right battles.
>Currency is currency BECAUSE its sponsored by government. And the payments system only works because you are indemnified. By the FDIC. By Chase Credit Cards. That is, the evil banks. How so for btc?
I'm not sure that's true. What makes a currency is it's usage. If enough people agree to the value of something, it's irrelevant whether a government sponsors it. You see this all the time with small towns using local "currencies" for specific usages [0]. It's the same idea.
I clicked a bunch of links from that list but couldn't find a single example that backs your point. Most of the local scrips seem to either be defunct/broken links or backed by a trusted institution who promises conversion back to the US dollar (BerkShares, Detroit Cheers).
For all this talk of inequality, why don't poor all over the world just throw their national fiat currencies under the bus and start all over from scratch? Sure doing this every few decades should ideally reset the wealth counter to 0 for most of the top 1%.
That is where fiat currencies come in. Because you don't want extreme situations in either case. Do you seriously want a certain large section of world population holding the entire global financial ecosystem at gunpoint and dictate its terms?
Pay x% taxes as we demand or we fork the blockchain and reset it all to 0.
Currency is currency because it transfers value efficiently. Outlawed currencies are not very efficient at transferring value. Fiat (lawful) currencies are more efficient by default. The digitization and decentralization of currency allows for the introduction of a non-fiat, hard-to-outlaw competitor which is more efficient than fiat in many contexts. Maybe not all contexts, but enough to give it value.
I wish Bitcoin was as decentralized as everyone says it is.
Unlike fiat cash or gold, you can't spend it without an internet connection (in order to sync up the public ledger and submit the transaction).
You're subject to miners to approve your transactions, which in theory should be democratized, but isn't really since it's based on computing power, which in turn can be bought or centralized in mining pools.
You're subject to a small cabal of developers' whims in having to use the reference client and hardforks to patch up bugs in the protocol. In theory that should also be democratized, with people free to use whatever forks they want, but in practice it's centralized with everyone fleeing to whichever fork all the mining pools go with.
> I wish Bitcoin was as decentralized as everyone says it is.
I'm trying to cash out some of mine and I've been downloading the blockchain for four days now. I had to buy a new hard drive before I could even start. I've read that it takes over an hour to do a transaction now, although I'm not yet in a position to verify that. If you look on the btc related subreddits nobody recommends using a proper client as Satoshi intended, it's all about accounts on websites offering a service that could reasonably be described as "banking".
Ah cool, I set it to 4000 and it looks to have sped it up a bit (currently saying 16 hours to go, down from "two days"). I'm still not convinced it's a very practical decentralized currency though.
Gold's market cap in US dollars is currently $7.1 trillion; Bitcoin's is under $0.2 trillion:
Current market capitalization in US dollars
Global money supply (broad) over $90.0 trillion [a]
US dollar money supply (M2) $13.8 trillion [b]
Euro money supply (M2) $13.2 trillion [c]
All coins and banknotes in circulation $7.6 trillion [d]
All gold ever mined $7.1 trillion [e]
Bitcoin under $0.2 trillion [f]
However, if you try to liquidate those assets, they fall in price. But some more than others.
E.g. there's no even $100 billion in Bitcoin invested. If someone tries to sell, say, $1 billion worth (1%) of Bitcoin, the price falls down rapidly and they never going to get anything close to the billion $.
Not so with gold. The price will fall down too, but not so much. One can easily sell 1% of the world gold reserves, for price close (lower, but close) to it's market value.
Maybe one day Bitcoin will behave like gold, but certainly not today.
I'm inclined to agree that bitcoin markets are far less robust than gold markets on the whole because of the long history and entrenched social position of gold. I do think you underestimate the effect on gold markets if they were flooded with someone trying to offload $70b of gold.
That's about 7 times more gold than the entire contents of the U.S. gold reserve of 8,134 metric tons of gold. I really don't understand why you think it would be easy to sell that much gold at the prevailing price.
Some random googling turned up about $100b/day of all gold changing hands worldwide, so you would have to sell it over a long period of time to avoid moving the price. If you were to try to keep your trades under say 0.5% of daily volume, or $500M, this would be the equivalent of trying to sell 1/14,000 of the total market cap each day, which would work out to about $12.5M/day if applied to bitcoin's market cap. Selling 0.5% of the daily volume of bitcoin would be more like $36.7M/day.
The reason for the difference in those numbers is that bitcoin turns over more of its market cap daily than gold, proportionally. So dollar for dollar, of course $1B affects bitcoin more than gold, but in terms of turning over 1% of the market cap the data suggests this might actually be easier in bitcoin.
The thing is, bitcoin in its current state isn't exactly decentralized - a small amount of miners control a fairly large % of bitcoin's hashrate. Not to mention most of those miners are located in China, which is also where most of the ASICs (mining equipment) are produced. These miners could easily support an alternate fork of bitcoin by moving their hashrate over, thus crippling the bitcoin chain. This was the whole drama with Segwit2x
By bitcoin fraud do you mean frauds that are 'settled' in bitcoin or counterfeiting?
The protocol stops counterfeiting, the miners stop individuals from failing to fulfill a payment (i.e. stops double spends) and theft is governed by whatever jurisdiction the crime happens in.
The US government does not prosecute thefts of USD in other countries.
Bitcoin might turn out to be one of the markets where free market dynamics work well.
Whose job is it? Anyone who has a stake in trusting and maintaining bitcoin's value. So the rich are incentivized to safeguard the poor in some sense here.
Well so far it has none of the taxpayer-subsidized funding as the US currency and banks have--which are very expensive to fund. The 2008 crisis was estimated to cost around $9,000-35,000 per US citizen, even by the Fed itself! For just that one incident...
Think about what bailing out means. It was a transfer of wealth from taxpayers and money-balance holders to Wall St banks, the US gov't and a few select private corporations.
Now I don't mean to be patronizing, but it is useful for us to ask ourselves, "how were we convinced that this was desirable?"
What? It seems like you are just changing the subject here? I thought you disagreed with the idea of my grandparent post, but it seems that now you want to say that bitcoin is a fiat currency?
I guess I think about it differently. Fiat means "by decree", or by force. Fiat currencies have historically been associated with a military. Bitcoin doesn't share that property.
Honest question: why does gold have intrinsic value?
My understanding is that it's scarcity is the prime driver of its value, at least in monetary terms, and bitcoin shares that quality. Of course gold does have physical qualities that are useful, but so do many other metals that are not used as stores of value.
I am aware of that of course, but gold jewelry itself generally has very little intrinsic value (it's only valuable because people agree it is, just like bitcoin), and most elements (such as silicon) in electric components are much cheaper than gold.
The prime driver of gold's value is clearly its historical role as a commodity and its scarcity, neither of which are related to any kind of intrinsic qualities.
My point is that the two things gold has going for it (scarcity and the fact that people believe it is a good place to store value) can now be said about bitcoin as well from what I can see.
Full disclosure: I do not own any cryptocoins. Too volatile for my tastes.
many other metals are used as stores of value, but gold is probably the most iconic. From a historical standpoint, It's easy to identify, it's easy to break up into smaller units or consolidate into larger ones, easy to form into coins. It has a global distribution, it's relatively inert so you don't need to worry about degradation.
scarcity is only one factor to consider - demand and fungibility are also important factors among others.
> It's easy to identify, it's easy to break up into smaller units or consolidate into larger ones, easy to form into coins. It has a global distribution,it's relatively inert so you don't need to worry about degradation
Everything in that sentence also applies to bitcoin. Probably the one difference I can see is that if someone loses their private key, the bitcoins associated with that key become useless. Gold does not have that problem.
EDIT: Okay, another huge con with bitcoins is that people don't understand them. Most people at least think they understand why gold is valuable. The confusion a "cryptocurrency" creates is a notable negative.
Currency is a medium to exchange value(Work or outcome of work). Value can be created/destroyed from/to something(Generally work), currency is just a 'medium' to trade the value.
Currency itself has to be created out of thin air.
It absolutely matters, because fiat currency, by definition, has the full power of the state (i.e. legal authority, taxing authority, police/military authority) backing it. The same is not true of Bitcoin.
> they like to demonize bitcoin which actually does something gold could never do
The practical utility of Bitcoin represents only a very small fraction of its price.
The price of bitcoin has climbed more than tenfold in a year - so what is causing this huge increase in demand? Compared to a year ago, are there 10 times as many drugs being purchased on the darknet with bitcoin? No. Are there 10 times as many Chinese people trying to get their money out of China? No. If anything, the utility of bitcoin has diminished as the transaction cost has risen.
The only reasonable explanation is that most people are buying bitcoin simply to sell at a higher price later. In that regard it's the same as gold, but also the same as every bubble asset in history.
I've seen comments saying "unlike bitcoin, gold has intrinsic value!" on HN for years. It never made sense to me. Like Bitcoin, gold is only valuable because we think it is and we want it to be (and because it's relatively scarce, too, just like Bitcoin is). Same with diamonds. Their functional value is relatively small in comparison to their "beauty" and scarcity values.
That is not correct. Gold actually has uses in manufacturing all kind of goods. In many manufacturing processes its irreplaceable. It has historical significance that is ingrained in virtually every culture (i.e. everyone grows up thinking gold as valuable thing due to stories you hear as kid). Jewelry made out of gold looks great, doesn't get rusty and you can keep it for centuries without needing any technology. Even if humankind is driven back to stone age, you can probably still count on gold to barter for other valuable goods. Most importantly, despite the humongous efforts over centuries, gold is still as rare as it was thousands of years ago. This inability to produce it out of thin air (unlike dollars or even bitcoins) what makes its usage as currency possible. None of these things you can say for bitcoin or any other currencies. They are just bits floating around in cyberspace.
A long time ago, when Aluminium was more precious than gold, people made what was considered good looking jewelry out of it: http://www.todayifoundout.com/index.php/2014/05/aluminium-co...
"Its shininess combined with its almost ghostly lightness compared to other metals made it an ideal metal for jewellery and it wasn’t long until the French elite were wearing broaches and buttons made of the aluminium." Aluminium also doesn't get rusty and can be kept for centuries, but nobody makes jewelry out of it any more. Reason: It's not scarce (any more).
The only real thing that makes gold valuable is it's scarcity. If it stopped being scarce because an asteroid containing a lot of gold was brought back to Earth, people would stop valuing gold and stop making jewelry out of it.
Bitcoin has the same important property of scarcity as gold.
Yes, but scarcity of bitcoin is not time tested. Most people seem to downplay this requirement for being "time tested" along with "scarce". However this is the requirement that drives your decision about how much % of your assets would be in certain form over long run. Would bitcoin still be scarce 20 years down the line? Not sure. Gold? Almost certainly. Also bitcoin is at mercy of technology. Few people knows how system works and where are the security gaps. One doesn't have to be even literate, let alone own a computer, to store and transact in gold.
That's not true at all. If someone gives you a gold bar right now, would you be able to tell if it's real or not? What if, for example, it's steel on the inside coated with a thin layer of gold. Or the gold has a low purity, etc. This is why there are specialists (who are very expensive) who can use special tests to check if it's real (and even then it's not 100%).
It's easy to tell if the Bitcoin that you just received is real or not. (Definitely much easier and cheaper than with gold).
This is not accurate. The once useful properties of gold have now been replicated using other (cheaper, alternative, and even synthetic) materials that perform better.
Gold industrial demand has virtually remained unchanged (probably because there is higher volume of goods produced even though lower usage per item)[1].
You are right though and I am being a little sarcastic on purpose. People have argued that Gold has real intrinsic value which it does have its uses but no more or no less than any other important precious metal we use.
I too have been trying to interpret this statement. It reads as a hedge against complete debasement in that it is perceived as a non-zero lower bound on value.
I have theory regarding "underestimated the populist movement" - Anything which is highly publicized and talked about whole day gets stuck in people's mind. And if that something is portrayed as taboo people get more attracted to it.
I think it is in everyone's favor to ignore and not give credence to things like these. There is an article on how Finland has been able to achieve this:
Everything you say can be true but if this is not just the new tulip mania there must be some number at which it stops. You predict 100k but why not a million? why not a billion?
If bitcoin wasn't good for transactions, then each block wouldn't be full of them. Maybe it's not so great for processing a country's volume of transactions because it hasn't scaled. Maybe it's not so great for small-fry transactions but those happen too... Online merchants often give you 24 hours to get your first verification. Your fees can be very low if you don't need your confirmation in the next ~10 minutes. (It will appear unconfirmed in the pool almost immediately.)
I think you might have it the wrong way around. Gold is valuable despite being used in electronics.
Unlike most other metals, gold is suitable as a currency partly because it doesn't get 'used up' in industrial processes in any significant way (where it is used its malleability ensures only tiny amounts are necessary - one gram of gold is enough for a square metre of gold leaf). Similarly, its use as jewellery is not so much to create beautiful objects, but as small portable stores of wealth[1] - in the world's biggest gold jewellery market (India) the price of jewellery is pretty much the same as the price of the raw materials (i.e. gold).
[1] Funny story. I once had a colleague who married an Indian woman in India. He came back to work wearing a lot of gold jewellery (watch, bracelets, rings, necklace or two, etc). Even he thought it was ridiculous, but he felt obliged to wear it. I had to explain to him that he wasn't given all of it with the expectation that he'd actually wear it - it was basically his wife's family's way of giving them money.
That's the part that gets me. Bitcoin has scaling issues, is slow and transaction fees are outrageous. Still, I have no doubt some form of crypto-currency will eventually win out.
The ICO's are like the Webvan and Amazons - similar to how businesses used the Internet to serve their respective industries, we are now using ICO's to serve specific markets.
Rentberry for Rentals, Enjincoin for Games.
With so many new ICOs, it feels like the early Startup Scene but now it's with a focus in Cryptocurrency.
I connected to the internet with a 14.4k modem and I'm connected to fiber today. Bitcoin is in its infancy. It's a matter of time until it reaches the levels we require for handling all the transactions that we want to happen.
I have no doubt the block chain is the future and one backed by governments. I think Bitcoin and Ethereum are the MySpace before something better came along. They have so many issues that better technology will win out. Being first doesn't guarantee anything nor better technology for that matter but in this case crypto is all about technology not just an experience.
We'll assume he was using PPP or SLIP when he had a 14.4k modem.
TCP/IP has been around for 30+ years. So, yes, a lot of that code is still "supporting" his fiber connection.
It's good for pseudonymous worldwide transactions. Blockchain analysis software is now a thing, and while costs are high, there are companies that specialize in tracing BTC transactions. [1] It is possible to launder/mix BTC or play a shell game to/from other currencies and wallets and raise analysis costs enough to make it not worthwhile for many adversaries and many targets.
While this may seem pedantic, it is important that people do not rely on BTC transactions for anonymity. Perpetuating this myth may become dangerous for some Bitcoin users.
There is no such implication. Yes, if golf were cheaper, it would be used more often in electronics, and because not much of it is essential, users of gold for productive purposes can get by with higher prices. However, gold’s price is driven 100% by its use as a speculative fiat store of value, not for its utility or even for its ornamental use.
It's considered to be beautiful because it's expensive and valued. The causation is in the other direction than most people think when it comes to gold and beauty.
It's the same with expensive paintings. A painting is considered to be beautiful (some are actually ugly) and have some deep meaning only after it's sold for a lot of money.
I too thought most of this "throw paint onto a canvas and charge rich suckers thousands of dollars" is bullshit. But after seeing some Picassos IIRC, I realized, yes there is a method to the madness.
Even if the painting wasn't displayed in a fancy museum, I think I would still have thought it was "special".
But those "artists" that pour paint onto the canvas - complete bullshit.
If a five year old can do it - it's not art except to the parents of those "artists"
Reason: it's complicated. But something that's DEFINITELY required for this to be possible is scarcity. The artist is not alive any more. It would never sell for that much if he were still alive.
True digital scarcity is a hard problem to solve (because computers are good at copying things). Bitcoin was the first system that was able to solve this problem.
They are still stuck in the 1960s, their economy is absolute garbage and the people are dirt poor, they lost multiple generations of opportunity.
Have you been to Cuba? It’s like going back in time 70 years.. the country itself is beautiful if they had taken a different path they could be incredibly propsorous. A small country like Cuba could get by on tourism alone and do much better than they do now.
Everyone needs to take their own path, if suppressing people’s religions and no freedom is that path the Chinese want to take then that’s their choice.
Our government and our corporations should not support that.