Buying and Spending Bitcoin

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Valuethinker
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Re: Buying and Spending Bitcoin

Post by Valuethinker » Wed Dec 13, 2017 7:04 am

Veiled wrote:
Tue Dec 12, 2017 9:23 pm
This is a fabulous thread...entertaining and so informative.
Valuethinker wrote:
Thu Nov 16, 2017 5:27 pm
J_Markov wrote:
Thu Nov 16, 2017 3:33 pm
Forgive my ignorance on monetary policy, but can the Federal Reserve come up with a cryptocurrency? In other words, can they decide one day that they will substitute the dollar for their own cryptocurrency? In Europe many countries were switched to the Euro in the not so distant past, could they do the same in the future with a cryptocurrency?
On CBs and Crypto Bank of England blog has had a couple of posts and links to papers they have produced. Yes, it could be used for settlement between CBs. SDRs are a money created by the IMF that CBs use in this fashion. Not crypto, but an artificial currency.
I think blockchain is attractive and could be positioned to decrease regulation costs and attract government involvement, so I think government issued cryptocurrency is the new self-driving car (i.e. seems impossible now, might be doable eventually although probably further away than we think).
I read, but I don't know if it is true, that 95% of autonomous vehicles is easy and is being done. The other 5% is really, really hard and we might never get there.

On cryptocurrency if the UK government chooses to authorize an e-pound that is honoured 1 for 1 at the Central Bank as a GBP (cash) then it's a done deal. This would be the equivalent of ETFs or perhaps a better example is an ADR (for the BP ADR listed in NYSE, say, BNY Mellon holds 10 shares of BP stock traded in London on its home exchange). If the main High Street Clearing Banks are permitted to exchange, then there's no problem with the general public using it.

In fact, this already occurs. Certain banks in Scotland and Northern Ireland issue their own notes (Bank of Ulster, Clydesdale, RBS, Bank of Scotland) which are honoured as 1 for 1 as English pound notes (actually pound coins, these days) at English banks. Adding blockchain to that would be fairly trivial, I should think.

I think the main proposals are more like Special Drawing Rights, which is a basket of the currencies of member states of the IMF (roughly). It can be used for transactions between Central Banks. No reason that could not be implemented as a blockchain.

The main thing governments want is traceability: for purposes of preventing money laundering (proceeds of criminal activities into legit ones) and tax evasion (which is itself illegal).

The Wannacry virus which shut down big chunks of the National Health Service one day, demanded payment in bitcoin. Some hospitals did pay. It turns out that some of that bitcoin deposited has been accessed (suspicion was it was the North Koreans who launched the ransomware) which surprised IT security exports. Now we know why governments want traceability!

arsenalfan
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Re: Buying and Spending Bitcoin

Post by arsenalfan » Wed Dec 13, 2017 1:37 pm

I'll add my kudos to grayfox for this fascinating thread. I will also add my call for the "top" of the cryptocurrency bubble - mostly because I just traded out my Volkswagen playmoney gains into litecoin via Coinbase, based in part on this thread. Indeed, I bought LTC at $337, and it is now $282.

I now guarantee Litecoin will plummet like a stone. My exit strategy is similar to my poker strategy: let it go to zero. If it goes up, I pull out my initial investment if/when it doubles, then let the rest ride up or down to zero.

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grayfox
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Re: Buying and Spending Bitcoin

Post by grayfox » Wed Dec 20, 2017 5:36 pm

Look at how high the bitcoin fees are today:
The fastest and cheapest transaction fee is currently 820 satoshis/byte, shown in green at the top.
For the median transaction size of 226 bytes, this results in a fee of 185,320 satoshis.
https://bitcoinfees.earn.com/

At current price 1 BTC = $16,099.70, 185,320 satoshi = $29.84 :shock:

That's comparable to a bank's wire transfer fee.

Why is the fee so high? Look at Mempool. I have heard that all the low-fee transactions have been kicked out of the Mempool. Apparently there's a Mempool size limit when they start booting low-fee transactions. It looks like when Mempool breached 200 MB the 1-2 sat/B (dark blue) and 2-5 sat/B (cyan) were removed. (See Dec-18 18:46 until Dec-19 08:18).

Added: If zoom in Mempool-2Day, it looks like the 5-10 sat/B started getting kicked out of the Mempool on Dec-19 18:04. At this time it is showing that are zero 5-10 sat/B transactions.

Those people on the receiving end of those transactions will probably not be receiving payments, unless they are re-sent with a high fee. Hope they didn't already send out the merchandise.

:idea: The Mempool is prima facie evidence that Bitcoin is broken. Blockchain is not supposed to work that way.

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MP123
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Re: Buying and Spending Bitcoin

Post by MP123 » Wed Dec 20, 2017 6:31 pm

grayfox wrote:
Wed Dec 20, 2017 5:36 pm
:idea: The Mempool is prima facie evidence that Bitcoin is broken. Blockchain is not supposed to work that way.
Unless it's a pump and dump scheme run by bitcoin miners. Then it's working perfectly. :wink:

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grayfox
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Re: Buying and Spending Bitcoin

Post by grayfox » Thu Dec 21, 2017 11:20 am

Dec-21-2017 11:55
The fastest and cheapest transaction fee is currently 990 satoshis/byte, shown in green at the top.
For the median transaction size of 226 bytes, this results in a fee of 223,740 satoshis.
At $15,525.50, FEE = $34.74
This server has a mempool limit of 500 MB. The mempool is currently full and low fee transactions are evicted.
Mempool: As of Dec 21 12:00, it looks like all the 10-20 sat/B transactions have been evicted. Still Broken.

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grayfox
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Re: Buying and Spending Bitcoin

Post by grayfox » Sun Dec 24, 2017 12:35 pm

Now even Bitcoin diehards are admitting that Bitcoin is not usable. I was listening to a YouTube channel and the host said that their customer wouldn't pay any invoice for less than $100 because of the $30 fees. Another guy said he wanted to buy a Trevor hardware wallet for Christmas for 80 Euros using bitcoin, but the minimum transaction they were accepting was 85 Euros, so he could not buy a Bitcoin Hardware Wallet using bitcoin.

But Lightning Network is supposed to fix this, but it will not be ready until some time next year or in 18 months depending on who you ask. At the beginning of 2016 they were saying it would be ready by the end of the year. I guess they didn't specify which year. :)

Then they admitted that the block size would still have to increase even with the Lightning Network.

These guys have been, and still are, pro Bitcoin Core, aka Bitcoin SegWit, and they are anti-Bitcoin Cash.

Open your eyes, people. Bitcoin is broken.

Right now, Litecoin and Bitcoin Cash don't have the problem of congested Mempool, high fees and unreliable transactions like Bitcoin Core. What I wonder, is it only Bitcoin that is flawed? Or does the same fate await all the other blockchain cryptocurrencies if they get more transaction volume.

postcryptoafterlife
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Re: Buying and Spending Bitcoin

Post by postcryptoafterlife » Sun Dec 24, 2017 2:02 pm

grayfox wrote:
Sun Dec 24, 2017 12:35 pm
Right now, Litecoin and Bitcoin Cash don't have the problem of congested Mempool, high fees and unreliable transactions like Bitcoin Core. What I wonder, is it only Bitcoin that is flawed? Or does the same fate await all the other blockchain cryptocurrencies if they get more transaction volume.
Bitcoin has this problem because there is a fixed 1MB block size and there has been much fighting about how to achieve consensus to solve this problem.
The fixed block size means that there is only room for so many transactions to be included in each block, which occur on average every 10 minutes.

Instead of waiting for consensus among miners and developers to find a solution for Bitcoin scaling (there has been so much drama over this topic, far before it was even a real problem), some have decided it is easier to fork the codebase and create their own adaptation. For example:

Bitcoin Cash has addressed these issues by adopting a larger block size, and eventually plans to move towards a dynamic blocksize that can adapt as needed for larger transaction volume.

Litecoin also has a fixed 1MB blocksize limit, however the rate of blocks solved is 4 times faster than Bitcoin (every 2.5 minutes). The community is also more welcoming for adopting new scaling ideas such as Segwit and Lightning Network.

Other cryptocurrencies such as Monero already implement a dynamic blocksize that can increase as needed during periods of high transaction volume.

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Re: Buying and Spending Bitcoin

Post by Robert T » Sun Dec 24, 2017 2:07 pm

.
Interesting interview: A Sober View on Crypto

First part touches on scalability.
.
.

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grayfox
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Re: Buying and Spending Bitcoin

Post by grayfox » Sun Dec 24, 2017 2:19 pm

postcryptoafterlife wrote:
Sun Dec 24, 2017 2:02 pm
Bitcoin Cash has addressed these issues by adopting a larger block size, and eventually plans to move towards a dynamic blocksize that can adapt as needed for larger transaction volume.

Litecoin also has a fixed 1MB blocksize limit, however the rate of blocks solved is 4 times faster than Bitcoin (every 2.5 minutes). The community is also more welcoming for adopting new scaling ideas such as Segwit and Lightning Network.

Other cryptocurrencies such as Monero already implement a dynamic blocksize that can increase as needed during periods of high transaction volume.
If I was going to buy any more crypto, it would not be Bitcoin Core. Transaction fees are too high and it would not be useful for me. I think it would be either Litecoin or Bitcoin Cash.

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grayfox
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Re: Buying and Spending Bitcoin

Post by grayfox » Sun Dec 24, 2017 2:31 pm

Robert T wrote:
Sun Dec 24, 2017 2:07 pm
.
Interesting interview: A Sober View on Crypto

First part touches on scalability.
.
.
3:19 Will anyone actually buy things with bitcoin at scale? ... The shorthand of this is "No one is using bitcoin." Everyone's investing in it .... if you talk to 10 people that have purchased bitcoin, and ask how them many of you have spent bitcoin to buy something i the last week, usually the answer is zero. If you say the last year, maybe its 1 or 2. But that is the stated purpose of bitcoin. The stated purpose in paragraph 1 or 2 in the first pages is "this is a means to have commerce on the internet to be more seamless.
:idea: The elephant in the room is that no one is using bitcoin for buying stuff. Because it's useless for it's intended purpose. :D

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watchnerd
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Re: Buying and Spending Bitcoin

Post by watchnerd » Mon Dec 25, 2017 8:33 pm

grayfox wrote:
Sun Dec 24, 2017 12:35 pm
Now even Bitcoin diehards are admitting that Bitcoin is not usable. I was listening to a YouTube channel and the host said that their customer wouldn't pay any invoice for less than $100 because of the $30 fees. Another guy said he wanted to buy a Trevor hardware wallet for Christmas for 80 Euros using bitcoin, but the minimum transaction they were accepting was 85 Euros, so he could not buy a Bitcoin Hardware Wallet using bitcoin.

But Lightning Network is supposed to fix this, but it will not be ready until some time next year or in 18 months depending on who you ask. At the beginning of 2016 they were saying it would be ready by the end of the year. I guess they didn't specify which year. :)

Then they admitted that the block size would still have to increase even with the Lightning Network.

These guys have been, and still are, pro Bitcoin Core, aka Bitcoin SegWit, and they are anti-Bitcoin Cash.

Open your eyes, people. Bitcoin is broken.

Right now, Litecoin and Bitcoin Cash don't have the problem of congested Mempool, high fees and unreliable transactions like Bitcoin Core. What I wonder, is it only Bitcoin that is flawed? Or does the same fate await all the other blockchain cryptocurrencies if they get more transaction volume.
To be a successful medium of exchange, it helps if the supply is inflationary (Litecoin), as opposed to deflationary (Bitcoin).

For a store of value, it's the opposite; deflationary supply is better.

The paradox that Bitcoin / anti-fiat money advocates seem to miss is that a store of value that has deflationary supply leads to hoarding and high transaction costs due to lack of liquidity. This problem is beyond just issues with the mempool.

We know this from history back when specie was used as coin and mints often diluted the precious content to increase the supply for liquidity reasons.
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Epsilon Delta
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Re: Buying and Spending Bitcoin

Post by Epsilon Delta » Tue Dec 26, 2017 12:50 am

watchnerd wrote:
Mon Dec 25, 2017 8:33 pm

To be a successful medium of exchange, it helps if the supply is inflationary (Litecoin), as opposed to deflationary (Bitcoin).

For a store of value, it's the opposite; deflationary supply is better.
IMHO people way over emphasis the store of value bit of being a currency.

The core of being a currency is being a medium of exchange.
The store of value is a necessary (or at least useful) property for a medium of exchange, not an independent property. Storing value allows selling goods or services and buying goods or services to be decoupled (You can earn your pay Monday to Friday, get payed next Thursday and spend it next Saturday without worry). Storing value for longer times is useful, but the longer the time period the less it matters to being a currency. Being a store of value no more defines a currency than does being portable or divisible (both useful properties for money), and being a store of value over decades or centuries has almost nothing to do with being a currency.

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HomerJ
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Re: Buying and Spending Bitcoin

Post by HomerJ » Tue Dec 26, 2017 1:23 am

Swelfie wrote:
Mon Nov 20, 2017 6:44 am
Most other systems, like banks, are vulnerable because they have not migrated to quantum resistant crypto. However, they are smaller targets because there is a central authority. If I break into your bank and transfer a million dollars to my bank, as soon as it's noticed your and my bank will reverse that transaction and likely there is no real gain for me. In crypto currency transactions are final and there is no authority to appeal to, so the grade of encryption used is quite a bit more intense.
Umm.. isn't that an argument to stay with banks?

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watchnerd
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Re: Buying and Spending Bitcoin

Post by watchnerd » Tue Dec 26, 2017 2:11 am

Epsilon Delta wrote:
Tue Dec 26, 2017 12:50 am
watchnerd wrote:
Mon Dec 25, 2017 8:33 pm

To be a successful medium of exchange, it helps if the supply is inflationary (Litecoin), as opposed to deflationary (Bitcoin).

For a store of value, it's the opposite; deflationary supply is better.
IMHO people way over emphasis the store of value bit of being a currency.

The core of being a currency is being a medium of exchange.
The store of value is a necessary (or at least useful) property for a medium of exchange, not an independent property. Storing value allows selling goods or services and buying goods or services to be decoupled (You can earn your pay Monday to Friday, get payed next Thursday and spend it next Saturday without worry). Storing value for longer times is useful, but the longer the time period the less it matters to being a currency. Being a store of value no more defines a currency than does being portable or divisible (both useful properties for money), and being a store of value over decades or centuries has almost nothing to do with being a currency.
100% agree.

Diamonds might be a decent store of value due to scarcity* (*caveat that man-made diamonds might blow this up), although their lack of fungibility and commoditization (each diamond is unique, after all) makes them hard to use as a medium of exchange. Even more so for collectibles (art, vintage wine). Gold seems closest to splitting the difference -- fungible by weight, but you can't buy stuff with it without converting it to fiat.

A good medium of exchange / currency needs to combine liquidity with a reasonably *stable* store of value.

The valuation swings of Bitcoin don't meet these criteria and highlight that the original mission (to free people from fiat currency) has failed.
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nisiprius
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Re: Buying and Spending Bitcoin

Post by nisiprius » Tue Dec 26, 2017 8:11 am

Epsilon Delta wrote:
Tue Dec 26, 2017 12:50 am
watchnerd wrote:
Mon Dec 25, 2017 8:33 pm

To be a successful medium of exchange, it helps if the supply is inflationary (Litecoin), as opposed to deflationary (Bitcoin).

For a store of value, it's the opposite; deflationary supply is better.
IMHO people way over emphasis the store of value bit of being a currency.

The core of being a currency is being a medium of exchange.
The store of value is a necessary (or at least useful) property for a medium of exchange, not an independent property. Storing value allows selling goods or services and buying goods or services to be decoupled (You can earn your pay Monday to Friday, get payed next Thursday and spend it next Saturday without worry). Storing value for longer times is useful, but the longer the time period the less it matters to being a currency. Being a store of value no more defines a currency than does being portable or divisible (both useful properties for money), and being a store of value over decades or centuries has almost nothing to do with being a currency.
It's a matter of degree. Being a store of value over decades or centuries may not be important, but it has to be a stable store for long enough to complete a transaction! The reason why Valve has stopped accepting Bitcoin, quoted below, is important. And Valve serves a highly Internet-savvy clientele, and they have no particular reason to boost or knock Bitcoin, and they are not new to it--they've been accepting it for a while. They are a good case study in whether it is usable as a way to pay for things over the Internet. If it doesn't work for them, it doesn't work.

A "currency" in which this can happen is a bad joke. This is Bitcoin hitting an iceberg, while enthusiasts say it doesn't matter because there are plenty of Bitcoin Cash lifeboats. And the big flaw in Bitcoin is not its design, but the inability of the Bitcoin community to achieve concensus to avoid an iceberg that was spotted three years ago.

Read this, and tell me that there is no "store of value" issue here. (The boldfacing is mine).
Historically, the value of Bitcoin has been volatile, but the degree of volatility has become extreme in the last few months, losing as much as 25% in value over a period of days. This creates a problem for customers trying to purchase games with Bitcoin. When checking out on Steam, a customer will transfer x amount of Bitcoin for the cost of the game, plus y amount of Bitcoin to cover the transaction fee charged by the Bitcoin network. The value of Bitcoin is only guaranteed for a certain period of time so if the transaction doesn’t complete within that window of time, then the amount of Bitcoin needed to cover the transaction can change. The amount it can change has been increasing recently to a point where it can be significantly different.

The normal resolution for this is to either refund the original payment to the user, or ask the user to transfer additional funds to cover the remaining balance. In both these cases, the user is hit with the Bitcoin network transaction fee again. This year, we’ve seen increasing number of customers get into this state. With the transaction fee being so high right now, it is not feasible to refund or ask the customer to transfer the missing balance (which itself runs the risk of underpayment again, depending on how much the value of Bitcoin changes while the Bitcoin network processes the additional transfer).
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Ditchwitch
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Re: Buying and Spending Bitcoin

Post by Ditchwitch » Tue Dec 26, 2017 4:08 pm

Kenkat wrote:
Thu Nov 16, 2017 8:30 am
It may then shock you to find out that there are many iOS users who never use iTunes and always download apps from the App Store directly to their devices. I haven’t connected my iPad to iTunes in about 4 years and my Android phone has never been connected to a PC or similar device.
Yup, same here...I haven't consciously used Itunes in years but download quite a few Apps on my Iphone and Ipad :D
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Re: Buying and Spending Bitcoin

Post by Swelfie » Wed Dec 27, 2017 6:45 pm

HomerJ wrote:
Tue Dec 26, 2017 1:23 am
Swelfie wrote:
Mon Nov 20, 2017 6:44 am
Most other systems, like banks, are vulnerable because they have not migrated to quantum resistant crypto. However, they are smaller targets because there is a central authority. If I break into your bank and transfer a million dollars to my bank, as soon as it's noticed your and my bank will reverse that transaction and likely there is no real gain for me. In crypto currency transactions are final and there is no authority to appeal to, so the grade of encryption used is quite a bit more intense.
Umm.. isn't that an argument to stay with banks?
It can be. With crypto, no one can interfere with transactions. With bank's, the bank can or anyone the bank must legally follow the direction of. So if I'm buying a new computer, probably best to use my Visa where I can charge back if I get screwed. If I'm donating to WikiLeaks...

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grayfox
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Re: Buying and Spending Bitcoin

Post by grayfox » Mon Jan 08, 2018 8:04 pm

I thought it might be fun to look at what https://coinmarketcap.com/ looked like in the past

https://web.archive.org/web/20130701000 ... etcap.com/

The earliest page is from May 9, 2013

Code: Select all

#	Name		Market Cap	Price
1	 Bitcoin	$ 1,245,619,548	$ 111.87	
2	 Litecoin	$ 59,056,771	$ 3.38	
3	 PPCoin		$ 5,235,373	$ 0.28	
4	 Namecoin	$ 5,164,296	$ 0.94	
5	 Feathercoin	$ 1,276,466	$ 0.20	
6	 Terracoin	$ 1,143,374	$ 0.46	
7	 Devcoin	$ 1,115,923	$ 0.00025	
8	 Freicoin	$ 1,023,475	$ 0.049	
9	 Novacoin	$ 957,137	$ 3.45	
10	 CHNCoin	$ 869,170	$ 0.17	
11	 BBQCoin	$ 451,712	$ 0.027	
12	 Mincoin	$ 231,734	$ 0.22	
13	 BitBar		$ 199,793	$ 70.48	
14	 Ixcoin		$ 176,959	$ 0.014

There were only 14 cryptocurrencies back then. What happened to #3 through 14?

3. PPCoin is gone
4. Namecoin is now #225
5. Feathercoin is now #206 and worth 0.54
6. Terracoin is now #521
7. Devcoin gone
8. Freicoin is now #1013
9. Novacoin is now #467
10. CHNCoin - gone
11. BBQCoin - gone
12. Minion - #989
13. BitBar - #681
14. Ixcoin - #446

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nisiprius
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Re: Buying and Spending Bitcoin

Post by nisiprius » Sun Jan 14, 2018 10:05 pm

Buying bitcoin from a Las Vegas ATM
  • Some Las Vegas restaurants accept payment in bitcoin, so I decided to try to buy bitcoin from a casino's bitcoin ATM.
  • I lost all my money.
  • Considering the exorbitant bitcoin ATM fee, I have real doubts as to whether or not bitcoin has a real future as a currency.
Basically: he didn't know about the miner's fee, nothing on the machine said anything about it, he didn't insert enough money to cover the miner's fee, and the machine is designed so that when you do that, you get no bitcoin, you don't get your money back, and you don't even get a receipt.

And, meanwhile... before someone says "Well, Bitcoin isn't really supposed to be for buying things, you should use Bitcoin Cash for that..."

Bitcoin Cash: Big blocks fail to improve user experience
According to Verret and others, however, the format is already failing, as Bitcoin’s smaller blocks are handling more transactions in the same period than Bitcoin Cash’s bigger ones.
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Re: Buying and Spending Bitcoin

Post by technovelist » Sun Jan 14, 2018 10:26 pm

grayfox wrote:
Mon Jan 08, 2018 8:04 pm
I thought it might be fun to look at what https://coinmarketcap.com/ looked like in the past

https://web.archive.org/web/20130701000 ... etcap.com/

The earliest page is from May 9, 2013

Code: Select all

#	Name		Market Cap	Price
1	 Bitcoin	$ 1,245,619,548	$ 111.87	
2	 Litecoin	$ 59,056,771	$ 3.38	
3	 PPCoin		$ 5,235,373	$ 0.28	
4	 Namecoin	$ 5,164,296	$ 0.94	
5	 Feathercoin	$ 1,276,466	$ 0.20	
6	 Terracoin	$ 1,143,374	$ 0.46	
7	 Devcoin	$ 1,115,923	$ 0.00025	
8	 Freicoin	$ 1,023,475	$ 0.049	
9	 Novacoin	$ 957,137	$ 3.45	
10	 CHNCoin	$ 869,170	$ 0.17	
11	 BBQCoin	$ 451,712	$ 0.027	
12	 Mincoin	$ 231,734	$ 0.22	
13	 BitBar		$ 199,793	$ 70.48	
14	 Ixcoin		$ 176,959	$ 0.014

There were only 14 cryptocurrencies back then. What happened to #3 through 14?

3. PPCoin is gone
4. Namecoin is now #225
5. Feathercoin is now #206 and worth 0.54
6. Terracoin is now #521
7. Devcoin gone
8. Freicoin is now #1013
9. Novacoin is now #467
10. CHNCoin - gone
11. BBQCoin - gone
12. Minion - #989
13. BitBar - #681
14. Ixcoin - #446
You can NEVER look back at what actually happened in history! Because if you do that, then you won't buy any tulips!

Of course I mean "tronics" stocks, or 1999 NASDAQ stocks, or 1929 Big Board stocks, or ...
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grayfox
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Re: Buying and Spending Bitcoin

Post by grayfox » Mon Jan 15, 2018 2:43 am

nisiprius wrote:
Sun Jan 14, 2018 10:05 pm

And, meanwhile... before someone says "Well, Bitcoin isn't really supposed to be for buying things, you should use Bitcoin Cash for that..."

Bitcoin Cash: Big blocks fail to improve user experience
According to Verret and others, however, the format is already failing, as Bitcoin’s smaller blocks are handling more transactions in the same period than Bitcoin Cash’s bigger ones.
Very strange things going on there with Bitcoin Cash (BCH). Look at the Mempool:

https://jochen-hoenicke.de/queue/cash/#4d

Around Jan-13 07:36 the Mempool got slammed with thousands of what looks like very large (in size) zero fee transactions. Those are probably transactions with a huge number of tiny UTXO Inputs, aka dust.

https://fork.lol/blocks/size

I am going to say that it is a spam attack.

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Re: Buying and Spending Bitcoin

Post by bungalow10 » Mon Jan 15, 2018 5:57 am

Valuethinker wrote:
Thu Nov 16, 2017 1:25 pm
HerbRight wrote:
Thu Nov 16, 2017 1:14 pm
wow , in the future we wont need money at all... thats creepy!
Bitcoin isn't money?

Or did you mean simply no cash, just plastic?

Not sure where USA is on this, but in the UK "touch and pay" chip credit and debit cards are big. And having sworn I'd never use it, I use it (credit card) that way all the time. For very small purchases.
Many of the shops near my house (Amsterdam) don't accept cash at all. Big "no cash, pin only" signs on the door. It cuts down on employee fraud and, for food stores like bakeries, they don't have worry about the sanitary aspects of cash money.
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Re: Buying and Spending Bitcoin

Post by technovelist » Mon Jan 15, 2018 11:27 am

bungalow10 wrote:
Mon Jan 15, 2018 5:57 am
Valuethinker wrote:
Thu Nov 16, 2017 1:25 pm
HerbRight wrote:
Thu Nov 16, 2017 1:14 pm
wow , in the future we wont need money at all... thats creepy!
Bitcoin isn't money?

Or did you mean simply no cash, just plastic?

Not sure where USA is on this, but in the UK "touch and pay" chip credit and debit cards are big. And having sworn I'd never use it, I use it (credit card) that way all the time. For very small purchases.
Many of the shops near my house (Amsterdam) don't accept cash at all. Big "no cash, pin only" signs on the door. It cuts down on employee fraud and, for food stores like bakeries, they don't have worry about the sanitary aspects of cash money.
So does that mean that cash isn't money? :confused
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Re: Buying and Spending Bitcoin

Post by grayfox » Mon Jan 15, 2018 11:57 am

** Update on Bitcoin Cash spam attack. **

https://fork.lol/tx/txs

See the BCH increase on transactions over past two days from about 250 transactions per block to over 100 per block? (See blue line) That was not the result of a sudden mass adoption by new users.

The network was flooded with 1 sat/B transactions. Any normal transaction with a mining fee that is more than 1 sat/B will have higher priority and will go into the next block.

Meanwhile many 8 MB blocks are being mined, which is clearing out the Mempool 8x faster than if the max block size was only 1 MB. So bigger blocks is working. :thumbsup

There is some speculation that this is a stress test by Bitcoin cash developers. But another possibility is that it could be a malicious attack. No one is sure.

I wish I had a place nearby that I could buy some Bitcoin Cash to try it out. The nearest ATM that has BCH is hundreds of miles away. :(

Updated update.

I'm reading that the transactions were 1 input -> 50+ outputs and then reversing to 50+ inputs -> 1 output. Because of this pattern, some are thinking that it is a stress test.

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Re: Buying and Spending Bitcoin

Post by nisiprius » Mon Jan 15, 2018 2:25 pm

So you are saying that in addition to everything else, cryptocurrency users need to consider at least the possibility of a DOS attack intentionally directed at a particular currency? Grand.

Now, who might want to do a thing like that?
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Re: Buying and Spending Bitcoin

Post by grayfox » Wed Jan 17, 2018 11:34 am

nisiprius wrote:
Mon Jan 15, 2018 2:25 pm
So you are saying that in addition to everything else, cryptocurrency users need to consider at least the possibility of a DOS attack intentionally directed at a particular currency? Grand.

Now, who might want to do a thing like that?
All cryptocurrencies are susceptible to spam attacks. It goes with the territory.

But the best protection against spam is to charge small fee for each transaction. E.g. if the minimum fee was say, 1 cent, it wouldn't bother normal users, even someone sending $1. But it would cost a spammer $1,000 to send 100,000 spam messages.

So it looks like that strange business with Bitcoin Cash of Jan 13 to Jan 15 was a stress test. The BCH Mempool is back to normal. What they wanted to test was the ability of BCH to scale. They forced the system to create 8 MB blocks, which it currently does not do with the normal amount of transactions.

Some statistics about the "stress test"

Update: I am now hearing that the stress test was done in preparation for GDAX exchange add BTC-BCH trading pair.

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Re: Buying and Spending Bitcoin

Post by grayfox » Wed Jan 17, 2018 1:22 pm

I'm seeing the old Bitcoin BTC trading at less than $10,000 :shock:

https://www.tradingview.com/chart/?symb ... P%3ABTCUSD

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Re: Buying and Spending Bitcoin

Post by grayfox » Sun Jan 21, 2018 11:33 am

I'm shocked. Shocked! :shock:

Shocked to learn that there is Price Manipulation in the Bitcoin Ecosystem

Abstract

We identify and analyze the impact of suspicious trading activity (STA) on the Mt. Gox Bitcoin currency exchange between February and November 2013. We discuss two distinct STA periods in which approximately 600,000 bitcoins (BTC) valued at $188 million were acquired by agents who did not pay for the bitcoins. During the second period, the USD-BTC exchange rate rose by an average of $20 at Mt. Gox on days when suspicious trades took place, compared to a slight decline on days without suspicious activity. Based on rigorous analysis with extensive robustness checks, we conclude that the suspicious trading activity caused the unprecedented spike in the USD-BTC exchange rate in late 2013, when the rate jumped from around $150 to more than $1,000 in two months.
The paper says that trading in cryptos is done OTC. Not through a regulated exchange. No regulation.

:idea: :?: I am left wondering if bitcoin prices we see quoted are real.

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Re: Buying and Spending Bitcoin

Post by technovelist » Sun Jan 21, 2018 7:46 pm

grayfox wrote:
Sun Jan 21, 2018 11:33 am
I'm shocked. Shocked! :shock:

Shocked to learn that there is Price Manipulation in the Bitcoin Ecosystem

Abstract

We identify and analyze the impact of suspicious trading activity (STA) on the Mt. Gox Bitcoin currency exchange between February and November 2013. We discuss two distinct STA periods in which approximately 600,000 bitcoins (BTC) valued at $188 million were acquired by agents who did not pay for the bitcoins. During the second period, the USD-BTC exchange rate rose by an average of $20 at Mt. Gox on days when suspicious trades took place, compared to a slight decline on days without suspicious activity. Based on rigorous analysis with extensive robustness checks, we conclude that the suspicious trading activity caused the unprecedented spike in the USD-BTC exchange rate in late 2013, when the rate jumped from around $150 to more than $1,000 in two months.
The paper says that trading in cryptos is done OTC. Not through a regulated exchange. No regulation.

:idea: :?: I am left wondering if bitcoin prices we see quoted are real.
I'm pretty sure they are fake, driven by "Tether", which appears to be totally fraudulent, if this is correct: https://www.reddit.com/r/CryptoCurrency ... out_of_me/
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Re: Buying and Spending Bitcoin

Post by feh » Sun Jan 21, 2018 7:52 pm

technovelist wrote:
Sun Jan 21, 2018 7:46 pm
grayfox wrote:
Sun Jan 21, 2018 11:33 am

The paper says that trading in cryptos is done OTC. Not through a regulated exchange. No regulation.

:idea: :?: I am left wondering if bitcoin prices we see quoted are real.
I'm pretty sure they are fake, driven by "Tether", which appears to be totally fraudulent, if this is correct: https://www.reddit.com/r/CryptoCurrency ... out_of_me/
I't's not clear to me what you guys are theorizing. Bitcoin can be purchased w/ USD. Go to coinbase.com and look at the most recent price.

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Re: Buying and Spending Bitcoin

Post by technovelist » Sun Jan 21, 2018 8:04 pm

feh wrote:
Sun Jan 21, 2018 7:52 pm
technovelist wrote:
Sun Jan 21, 2018 7:46 pm
grayfox wrote:
Sun Jan 21, 2018 11:33 am

The paper says that trading in cryptos is done OTC. Not through a regulated exchange. No regulation.

:idea: :?: I am left wondering if bitcoin prices we see quoted are real.
I'm pretty sure they are fake, driven by "Tether", which appears to be totally fraudulent, if this is correct: https://www.reddit.com/r/CryptoCurrency ... out_of_me/
I't's not clear to me what you guys are theorizing. Bitcoin can be purchased w/ USD. Go to coinbase.com and look at the most recent price.
Yes, we know you can buy it with USD. That's not the question.

The question is whether someone can buy it with totally counterfeit "money" like Tether, and whether any significant amount of trading is done in that way.

Obviously if the latter is true, the price could go to infinity in terms of Tether, but anyone trying to cash out might be paid only in Tether and not be able to convert that to anything that anyone else wants.
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Re: Buying and Spending Bitcoin

Post by feh » Sun Jan 21, 2018 8:39 pm

technovelist wrote:
Sun Jan 21, 2018 8:04 pm
feh wrote:
Sun Jan 21, 2018 7:52 pm
technovelist wrote:
Sun Jan 21, 2018 7:46 pm
grayfox wrote:
Sun Jan 21, 2018 11:33 am

The paper says that trading in cryptos is done OTC. Not through a regulated exchange. No regulation.

:idea: :?: I am left wondering if bitcoin prices we see quoted are real.
I'm pretty sure they are fake, driven by "Tether", which appears to be totally fraudulent, if this is correct: https://www.reddit.com/r/CryptoCurrency ... out_of_me/
I't's not clear to me what you guys are theorizing. Bitcoin can be purchased w/ USD. Go to coinbase.com and look at the most recent price.
Yes, we know you can buy it with USD. That's not the question.

The question is whether someone can buy it with totally counterfeit "money" like Tether, and whether any significant amount of trading is done in that way.

Obviously if the latter is true, the price could go to infinity in terms of Tether, but anyone trying to cash out might be paid only in Tether and not be able to convert that to anything that anyone else wants.
Seems to me this is a problem w/ tether, not bitcoin. I would personally stay away from tether. If/when they choose to break the buck, whomever is holding tether will be hosed.

I have no idea what percentage of bitcoin is purchased w/ tether.

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Re: Buying and Spending Bitcoin

Post by RRAAYY3 » Sun Jan 21, 2018 8:48 pm

Tether, Bitcoin, ... ,

I use my credit card, get reward points, converted them into cash, and went on with my life with currency that is actually able to be used

Can you explain the appeal of converting actual money into “cryptocurrency”? Serious request, I’m really trying to understand why this crypto-thing is actually a thing.

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Re: Buying and Spending Bitcoin

Post by feh » Sun Jan 21, 2018 9:12 pm

RRAAYY3 wrote:
Sun Jan 21, 2018 8:48 pm
Tether, Bitcoin, ... ,

I use my credit card, get reward points, converted them into cash, and went on with my life with currency that is actually able to be used

Can you explain the appeal of converting actual money into “cryptocurrency”? Serious request, I’m really trying to understand why this crypto-thing is actually a thing.
The main advantage, IMO, is no 3rd party. Need to send money to an individual or company? No intermediary (paypal, CC company, bank) is needed.

Here are a couple pages that list both advantages and disadvantages:

http://www.ameerrosic.com/5-benefits-of-cryptocurrency/
https://coinpupil.com/altcoins/advantag ... ocurrency/

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Re: Buying and Spending Bitcoin

Post by technovelist » Sun Jan 21, 2018 10:43 pm

feh wrote:
Sun Jan 21, 2018 8:39 pm
technovelist wrote:
Sun Jan 21, 2018 8:04 pm
feh wrote:
Sun Jan 21, 2018 7:52 pm
technovelist wrote:
Sun Jan 21, 2018 7:46 pm
grayfox wrote:
Sun Jan 21, 2018 11:33 am

The paper says that trading in cryptos is done OTC. Not through a regulated exchange. No regulation.

:idea: :?: I am left wondering if bitcoin prices we see quoted are real.
I'm pretty sure they are fake, driven by "Tether", which appears to be totally fraudulent, if this is correct: https://www.reddit.com/r/CryptoCurrency ... out_of_me/
I't's not clear to me what you guys are theorizing. Bitcoin can be purchased w/ USD. Go to coinbase.com and look at the most recent price.
Yes, we know you can buy it with USD. That's not the question.

The question is whether someone can buy it with totally counterfeit "money" like Tether, and whether any significant amount of trading is done in that way.

Obviously if the latter is true, the price could go to infinity in terms of Tether, but anyone trying to cash out might be paid only in Tether and not be able to convert that to anything that anyone else wants.
Seems to me this is a problem w/ tether, not bitcoin. I would personally stay away from tether. If/when they choose to break the buck, whomever is holding tether will be hosed.

I have no idea what percentage of bitcoin is purchased w/ tether.
No, it is a problem with bitcoin, because if the people who run Tether are using their freshly printed "money" to buy bitcoin, that can drive the price of bitcoin up to unsustainable levels.

The same would be true of any asset that can be purchased with "money" that can be produced in unlimited supply.
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Re: Buying and Spending Bitcoin

Post by technovelist » Sun Jan 21, 2018 10:44 pm

RRAAYY3 wrote:
Sun Jan 21, 2018 8:48 pm
Tether, Bitcoin, ... ,

I use my credit card, get reward points, converted them into cash, and went on with my life with currency that is actually able to be used

Can you explain the appeal of converting actual money into “cryptocurrency”? Serious request, I’m really trying to understand why this crypto-thing is actually a thing.
99% of the "use" right now is speculation, like with NASDAQ stocks in the late 1990's, where a lot of the people buying had no idea what the company did but just saw the price going up.
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Re: Buying and Spending Bitcoin

Post by feh » Mon Jan 22, 2018 7:33 am

technovelist wrote:
Sun Jan 21, 2018 10:43 pm
No, it is a problem with bitcoin, because if the people who run Tether are using their freshly printed "money" to buy bitcoin, that can drive the price of bitcoin up to unsustainable levels.

The same would be true of any asset that can be purchased with "money" that can be produced in unlimited supply.
Of course, we don't know what the people who run tether are doing w/ the money they received. If it is a giant scam, I'd think they'd have it in some Swiss bank account. I don't know why the assumption is being made that is was used to buy bitcoin (or any other crypto).

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Re: Buying and Spending Bitcoin

Post by technovelist » Mon Jan 22, 2018 10:07 am

feh wrote:
Mon Jan 22, 2018 7:33 am
technovelist wrote:
Sun Jan 21, 2018 10:43 pm
No, it is a problem with bitcoin, because if the people who run Tether are using their freshly printed "money" to buy bitcoin, that can drive the price of bitcoin up to unsustainable levels.

The same would be true of any asset that can be purchased with "money" that can be produced in unlimited supply.
Of course, we don't know what the people who run tether are doing w/ the money they received. If it is a giant scam, I'd think they'd have it in some Swiss bank account. I don't know why the assumption is being made that is was used to buy bitcoin (or any other crypto).
https://seekingalpha.com/article/412954 ... ay-go-true
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Re: Buying and Spending Bitcoin

Post by feh » Mon Jan 22, 2018 10:17 am

paywall

Does the author have any evidence, or is it based on assumptions?

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Re: Buying and Spending Bitcoin

Post by technovelist » Mon Jan 22, 2018 10:36 am

feh wrote:
Mon Jan 22, 2018 10:17 am
paywall

Does the author have any evidence, or is it based on assumptions?
It's actually free to sign up, not a real paywall.

But anyway, here's the basic argument.

Tether limited runs bitfinex, a large cryptocurrency exchange.
Tether limited has not been audited and doesn't want to be.
It is not known where they bank.
Tether has been issued in large blocks of tens of millions.

Finally: "If one believes that this is all a legitimate operation, one would have to believe that there are some astute traders/investors willing to write checks each worth tens of millions dollars multiple times in several days to an offshore corporation that is unaudited, in exchange for digital tokens for which they legally have no recourse should conversion to USD be denied; the management is allergic to an audit because it has nothing to hide, thus doesn’t need an audit; and that high correlation between Tether’s supply and the price of Bitcoin is purely coincidental."

Sounds pretty fishy to me.
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Re: Buying and Spending Bitcoin

Post by feh » Mon Jan 22, 2018 10:39 am

technovelist wrote:
Mon Jan 22, 2018 10:36 am
Sounds pretty fishy to me.
Tether definitely sounds fishy. However, it would take more to convince me that tether is what has been driving up the price of bitcoin.

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Re: Buying and Spending Bitcoin

Post by crit » Mon Jan 22, 2018 11:17 am

I agree that Tether sounds like vaporware. My guess is that it's a lure used on exchanges that don't offer the crytpo-USD or other pair that you want to exchange. It -sounds- like it should be the crypto-equivalent of a money-market fund that is "tethered" (!) to the USD. It isn't.

It's brilliant marketing, same as the exchange that calls itself BitBank .... you hear "bank" and think FDIC insured, etc., etc. and you give them your money because a bank is the safe place, right? Same with Tether ... you can't go from XRP to dollar on Coinbase, but you want to sell at $3.00, so you go XRP to Tether on some other iffier exchange, say bitfinex, and because it's "tethered" it's like a money market fund and won't lose value while you figure out how to go Tether -> USD. Right? Right? Nope, you gave the scammers your coins and got vapor in return.

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Re: Buying and Spending Bitcoin

Post by grayfox » Wed Jan 24, 2018 10:51 am

According to https://coinmarketcap.com/ Tether is the 24th largest cryptocurrency and there is $1.6 billion worth of Tether.

24 Tether $1,621,019,567 $1.00 $2,995,480,000 1,618,090,823 USDT *

If you believe them, then someone has 1.6 billion USD on deposit in a bank someone to back this up.

But they won't allow an audit so you just have to trust them. Right.

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Re: Buying and Spending Bitcoin

Post by RRAAYY3 » Wed Jan 24, 2018 11:05 am

Does anyone see this as not being a blatantly obvious bubble ?

You have digital nothing inflating the price of another digital nothing. I’m sorry, I meant “cryptocurrency”. I just read a thread from another forum about “diversifying cryptos” and I just don’t get it.

I’m not asking about blockchain technology. Can someone please explain to me how/why “cryptocurrency” makes any logical sense whatsoever? Let’s turn actual currency into code, trade that code, then pray actual places take this code as an equivalent to the actual currency we just exchanged from.

I’ll continue using my credit card’s “cryptochip” and collecting those “cryptorewards” every month

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Re: Buying and Spending Bitcoin

Post by nisiprius » Thu Jan 25, 2018 8:09 am

Oh, cryptocurrency could make logical sense. There is always some kind of rational story behind any bubble. There is always a plausible answer to the question "why is Insull stock worth so much," "why are binders to buy Florida real estate worth so much," "how can Ponzi do it," "how can Madoff do it," etc. etc.

Even with completely legitimate stocks that are experiencing run-ups, there is always a "story" to give a quick answer to the person who is simply buying it because it's going up, but who wants to be able to explain to the spouse, and to colleagues around the watercooler, that it's backed by all, or nearly all, the public utilities of the Middle West and the brain of Samuel Insull.

I think the most important thing to know about the Ponzi scheme is that in a sense it was legitimate. The "story" behind it was valid. There was an arbitrage opportunity in the price of international postal reply coupons, and it could actually be exploited. The problem is that it could only be exploited in a tiny, retail-sized way (like taking advantage of a newspaper vending box allowing you to pay for one newspaper but take two). Unfortunately Ponzi had already signed up and taken so much money from so many enthusiastic participants that by the time he realized he couldn't actually buy and sell international postal reply coupons in enough quantity to back his operations, he was riding the tiger and couldn't get off.

In "A Random Walk Down Wall Street," in the section where Malkiel talks about picking stocks--yes, in the first edition in 1973 it was an important part of the book, and it has gradually gotten minimized, but it's still there--he references a wonderful quotation from Ibsen: "Castles in the air--but on a firm foundation." That's what he likes to see in a stock, one that has the castles-in-the-air story that makes investors believe in future success on a grand scale, but that actually does have the fundamentals to make the story credible.

That's what cryptocurrency lacks. It has the convincing, plausible, could-be castle in the air, but it lacks the firm foundation in terms of what has actually been implemented. The whole issue with bitcoin from the beginning is that it was patently never designed to be a stable store of value, and one has to wonder why. Bitcoin solved some extremely interesting problems that people didn't realize could be solved, but it didn't even try to solve that one. The obvious reason is that it was much more interesting to have a highly unstable value with a great chance of exploding upward during the adoption phase, than to have one with a stable value. The other possibility is that the stability problem isn't solvable in a cryptocurrency. Apparently there are experiments now in cryptocurrencies that are supposed to be anchored to fiat currency! And apparently they aren't working very well.

Anyway, the castle in the air for cryptocurrency is, first, anonymity (although that turns out not to be true either), and thus useful for transactions you don't know the government to know about, either because the transaction is evil or because your government is evil; second, merchant transactions far cheaper than the fees assessed by oligopoly banks and their credit card operations; third, ease of international payments to any country whatsoever, not just a handful of developed countries.

The problem isn't that theoretically cryptocurrency couldn't be useful. The problem is that the real live cryptocurrencies as they exist now aren't very useful and the whole world of cryptocurrencies is so tangled up with scams everywhere. Even on the periphery (Butterfly Labs, the fraudulent maker of mining hardware). Perhaps that is what comes with being unregulated.
Last edited by nisiprius on Thu Jan 25, 2018 8:38 am, edited 1 time in total.
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Re: Buying and Spending Bitcoin

Post by technovelist » Thu Jan 25, 2018 8:18 am

RRAAYY3 wrote:
Wed Jan 24, 2018 11:05 am
Does anyone see this as not being a blatantly obvious bubble ?

You have digital nothing inflating the price of another digital nothing. I’m sorry, I meant “cryptocurrency”. I just read a thread from another forum about “diversifying cryptos” and I just don’t get it.
No, you don't get it. This time it's different! This time, nothing really is worth a tremendous amount! :mrgreen:

By the way, I'm currently reading "Devil Take the Hindmost", which describes the common elements of all manias. It's amazing how all the same elements are present in every historic mania... starting in 1690.
In theory, theory and practice are identical. In practice, they often differ.

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Re: Buying and Spending Bitcoin

Post by RRAAYY3 » Thu Jan 25, 2018 8:28 am

technovelist wrote:
Thu Jan 25, 2018 8:18 am
RRAAYY3 wrote:
Wed Jan 24, 2018 11:05 am
Does anyone see this as not being a blatantly obvious bubble ?

You have digital nothing inflating the price of another digital nothing. I’m sorry, I meant “cryptocurrency”. I just read a thread from another forum about “diversifying cryptos” and I just don’t get it.
No, you don't get it. This time it's different! This time, nothing really is worth a tremendous amount! :mrgreen:

By the way, I'm currently reading "Devil Take the Hindmost", which describes the common elements of all manias. It's amazing how all the same elements are present in every historic mania... starting in 1690.
haha I may have to check that out thanks

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Re: Buying and Spending Bitcoin

Post by zed » Thu Jan 25, 2018 6:39 pm

Not attempting to comment on the merit of cryptocurrency one way of another but did run across this ad on Craiglist.

2008 CHEVROLET TRAILBLAZER UT - $8961 (For sale at Lithia Toyota of Missoula on Dec 29)

https://missoula.craigslist.org/ctd/d/2 ... 65047.html

The dealer's web presence is https://www.lithiatoyotamissoula.com/

The ad states that they do accept cryptocurrency. I'll leave it to a greater mind than mine to ferret out what that really means.

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Re: Buying and Spending Bitcoin

Post by grayfox » Tue Jan 30, 2018 1:35 pm

Bitcoin in Freefall! :D

https://www.tradingview.com/chart/?symb ... P%3ABTCUSD

Bitcoin started the day at 11176. It was under $10,000 a little while ago. Right now at $10,040.

There is a lot of discussion lately about Tether being created out of thin air and that it was used to push up the price of all the cryptocurrencies.

Full Disclosure: I own 0.0053041 BTC :confused

Now 9955.72
Will it go below 9,000 today?
9816
9779

Finished 1/30/2018 9972
1/31/2018 4:26 9779
Last edited by grayfox on Tue Jan 30, 2018 11:27 pm, edited 1 time in total.

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Re: Buying and Spending Bitcoin

Post by hilink73 » Tue Jan 30, 2018 2:16 pm

grayfox wrote:
Tue Jan 30, 2018 1:35 pm
Bitcoin in Freefall! :D
We need a thread for that! :mrgreen:
There is a lot of discussion lately about Tether being created out of thin air and that it was used to push up the price of all the cryptocurrencies.
Yes, there are questions for sometime now, if the Tethers are really 100% backed by USD.
Nobody knows for sure... and you don't really need them anyway.

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