What Are Your Thoughts On The Recent Bitcoin Bust? Is It Apart of the Boom/Bust Cycle or Is The CryptoCurrency Finished?

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feh
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Re: What Are Your Thoughts On The Recent Bitcoin Bust? Is It Apart of the Boom/Bust Cycle or Is The CryptoCurrency Finis

Post by feh » Tue Apr 03, 2018 12:20 pm

telecaster wrote:
Sat Mar 31, 2018 6:08 am
This just means we switch to different "quantum proof" encryption algorithms though and start the game over.
+1

Quantum computing will not be the end of all encryption techniques.

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queso
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Re: What Are Your Thoughts On The Recent Bitcoin Bust? Is It Apart of the Boom/Bust Cycle or Is The CryptoCurrency Finis

Post by queso » Tue Apr 03, 2018 1:11 pm

alwayshedge wrote:
Mon Apr 02, 2018 10:49 pm
There are a lot of very smart people that truly believe in Bitcoin and the blockchain technology. People that are a lot smarter than you and me. I wouldn't be so quick to dismiss crypto currencies based on a speculative mania that occurred. Bitcoin has been around since 2009 and every boom and bust cycle has experienced this same kind of discussion yet somehow, it sticks around and the transaction count keeps growing. Maybe we just don't understand yet where this will play a role. It could be something we haven't even thought of yet. But to dismiss it and compare it to beanie babies or collectible sports cards is rather ignorant.
I don't know for sure, but I'm pretty confident that Elon Musk is probably smarter than me and I am sure not waiting in line to buy TSLA. :happy

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Epsilon Delta
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Re: What Are Your Thoughts On The Recent Bitcoin Bust? Is It Apart of the Boom/Bust Cycle or Is The CryptoCurrency Finis

Post by Epsilon Delta » Tue Apr 03, 2018 1:54 pm

GratefulinNC wrote:
Tue Apr 03, 2018 6:33 am
Crypto currencies are fiat currencies. There is nothing backing them up -- no gold, no oil, no governemnts, and no guns.
So crypto currencies doesn't even have a fiat.

Northern Flicker
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Re: What Are Your Thoughts On The Recent Bitcoin Bust? Is It Apart of the Boom/Bust Cycle or Is The CryptoCurrency Finis

Post by Northern Flicker » Tue Apr 03, 2018 2:52 pm

feh wrote:
Tue Apr 03, 2018 12:20 pm
telecaster wrote:
Sat Mar 31, 2018 6:08 am
This just means we switch to different "quantum proof" encryption algorithms though and start the game over.
+1

Quantum computing will not be the end of all encryption techniques.
Correct. Much faster computing means that cryptographically harder algorithms may be used for encryption as well.

In fact, Shannon proved decades ago that unbreakable encryption techniques exist, but the key length must be at least as large as the sum total of all cleartext to be encrypted with the particular key. An example of such an encryption technique is a one-time pad-- which uses a random key with length equal to cleartext length, and encryption and decryption are just the exclusive-or of the text with the key.

But advances in computing undermine the archival properties of encrypted data. Much faster computing horsepower, whether or not quantum computing, is a threat to blockchain technology. Existing transactions are recorded and archived using encryption techniques that are known to be cryptographically strong at the time the transaction is recorded. If the encryption is broken in the (near or distant) future, it could compromise any anonymity used in existing archival blockchain ledger entries.

Modification of blocks, however, would still require modifying the cryptohashes of predecessor blocks stored in all of the blocks subsequent to the block being modified, with majority voting to commit the changes to block replicas.
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Epsilon Delta
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Re: What Are Your Thoughts On The Recent Bitcoin Bust? Is It Apart of the Boom/Bust Cycle or Is The CryptoCurrency Finis

Post by Epsilon Delta » Tue Apr 03, 2018 3:43 pm

jalbert wrote:
Tue Apr 03, 2018 2:52 pm
feh wrote:
Tue Apr 03, 2018 12:20 pm

Quantum computing will not be the end of all encryption techniques.
Correct. Much faster computing means that cryptographically harder algorithms may be used for encryption as well.
Some classical algorithms now in use are believed to be resistant to quantum computing. OTOH anything based on factorizing semi-primes is quantum toast.
jalbert wrote:
Tue Apr 03, 2018 2:52 pm
Modification of blocks, however, would still require modifying the cryptohashes of predecessor blocks stored in all of the blocks subsequent to the block being modified, with majority voting to commit the changes to block replicas.
A hash collision is sufficient to generate a counterfeit block that meets every requirement of a real block. If you have that duplicate the security of the blockchain is no longer controlled by math, but by the security of the nodes in the network.

bberris
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Re: What Are Your Thoughts On The Recent Bitcoin Bust? Is It Apart of the Boom/Bust Cycle or Is The CryptoCurrency Finis

Post by bberris » Tue Apr 03, 2018 5:57 pm

Epsilon Delta wrote:
Tue Apr 03, 2018 1:54 pm
GratefulinNC wrote:
Tue Apr 03, 2018 6:33 am
Crypto currencies are fiat currencies. There is nothing backing them up -- no gold, no oil, no governemnts, and no guns.
So crypto currencies doesn't even have a fiat.
Fiat means by law. Crypto's are anti-fiat.

alwayshedge
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Re: What Are Your Thoughts On The Recent Bitcoin Bust? Is It Apart of the Boom/Bust Cycle or Is The CryptoCurrency Finis

Post by alwayshedge » Tue Apr 03, 2018 6:02 pm

queso wrote:
Tue Apr 03, 2018 1:11 pm
alwayshedge wrote:
Mon Apr 02, 2018 10:49 pm
There are a lot of very smart people that truly believe in Bitcoin and the blockchain technology. People that are a lot smarter than you and me. I wouldn't be so quick to dismiss crypto currencies based on a speculative mania that occurred. Bitcoin has been around since 2009 and every boom and bust cycle has experienced this same kind of discussion yet somehow, it sticks around and the transaction count keeps growing. Maybe we just don't understand yet where this will play a role. It could be something we haven't even thought of yet. But to dismiss it and compare it to beanie babies or collectible sports cards is rather ignorant.
I don't know for sure, but I'm pretty confident that Elon Musk is probably smarter than me and I am sure not waiting in line to buy TSLA. :happy
Apples to oranges comparison. Plus you're cherry picking a time short period of time where TSLA stock has not been performing well. Over the long term, the share price has appreciated exponentially.

alwayshedge
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Re: What Are Your Thoughts On The Recent Bitcoin Bust? Is It Apart of the Boom/Bust Cycle or Is The CryptoCurrency Finis

Post by alwayshedge » Tue Apr 03, 2018 6:02 pm

alwayshedge wrote:
Tue Apr 03, 2018 6:02 pm
queso wrote:
Tue Apr 03, 2018 1:11 pm
alwayshedge wrote:
Mon Apr 02, 2018 10:49 pm
There are a lot of very smart people that truly believe in Bitcoin and the blockchain technology. People that are a lot smarter than you and me. I wouldn't be so quick to dismiss crypto currencies based on a speculative mania that occurred. Bitcoin has been around since 2009 and every boom and bust cycle has experienced this same kind of discussion yet somehow, it sticks around and the transaction count keeps growing. Maybe we just don't understand yet where this will play a role. It could be something we haven't even thought of yet. But to dismiss it and compare it to beanie babies or collectible sports cards is rather ignorant.
I don't know for sure, but I'm pretty confident that Elon Musk is probably smarter than me and I am sure not waiting in line to buy TSLA. :happy
Apples to oranges comparison. Plus you're cherry picking a short period of time where TSLA stock has not been performing well. Over the long term, the share price has appreciated exponentially. Of course we are all bogleheads and don't buy individual stocks but you know what I mean...

alwayshedge
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Re: What Are Your Thoughts On The Recent Bitcoin Bust? Is It Apart of the Boom/Bust Cycle or Is The CryptoCurrency Finis

Post by alwayshedge » Tue Apr 03, 2018 6:09 pm

monkey_business wrote:
Mon Apr 02, 2018 2:36 pm
Whakamole wrote:
Sat Mar 31, 2018 11:47 pm
Don't confuse blockchain with Bitcoin. Blockchain is a technology, Bitcoin (and other cryptocurrencies) are specific implementations of blockchain. Buying Bitcoin because you think blockchain will be huge is like having bought Pets.com stock because you thought the Internet was going to be big.
Exactly.

I'm no expert by any means but I think cryptocurrencies will be known as the Crypto Mania in the future, analogous to their very low tech Tulip counterpart of the past.

Anyone here can create what Bitcoin is, very easily, right now. The entire technology is open source. Go download it, change a few things, call it something, and bam, you are the proud owner of your very own currency! What this means is that there is an infinite supply, which means the value should be zero. Last time I checked the number of cryptocurrencies available is 1600+. Your cryptocurrency can be #1643, for example! Imagine that!

This is like trading Monopoly money for real dollars because the maker announced there will only be 21 billion Monopoly dollars printed. So what? You can print your own "Monopoly" money any time you want. Call it "Shmonopoly" or something. Just find some suckers people to buy/trade it and suddenly it will be exchangeable for real dollars.
There have been numerous attempts to do this. They have all mostly failed. There are forks daily. Bitcoin still grows in value. The anti Bitcoin folk just cherry pick the recent downturn to try to prove their point.

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Epsilon Delta
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Re: What Are Your Thoughts On The Recent Bitcoin Bust? Is It Apart of the Boom/Bust Cycle or Is The CryptoCurrency Finis

Post by Epsilon Delta » Tue Apr 03, 2018 6:41 pm

bberris wrote:
Tue Apr 03, 2018 5:57 pm
Epsilon Delta wrote:
Tue Apr 03, 2018 1:54 pm
GratefulinNC wrote:
Tue Apr 03, 2018 6:33 am
Crypto currencies are fiat currencies. There is nothing backing them up -- no gold, no oil, no governemnts, and no guns.
So crypto currencies doesn't even have a fiat.
Fiat means by law. Crypto's are anti-fiat.
[OT comment removed by admin LadyGeek]

About a month I googled "definition of fiat money". Somewhere close to half of the definitions included crypto-currencies (by function, they also included local scripts like Ithaca Hours as fiat currency). I would have found one such definition disturbing, the sheer volume was well into distressing.

I repeated that search today and the distress has diminished, although at least wikipedia still thinks crypto could be a fiat currency. (Wikipedia includes fiduciary money as a type of fiat money.)

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Re: What Are Your Thoughts On The Recent Bitcoin Bust? Is It Apart of the Boom/Bust Cycle or Is The CryptoCurrency Finis

Post by Northern Flicker » Tue Apr 03, 2018 6:52 pm

A hash collision is sufficient to generate a counterfeit block that meets every requirement of a real block.
The hash collision is highly unlikely to be generated by a block with meaningful data, and its acceptance would still require a majority vote from the sites of all replicas.
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GratefulinNC
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Re: What Are Your Thoughts On The Recent Bitcoin Bust? Is It Apart of the Boom/Bust Cycle or Is The CryptoCurrency Finis

Post by GratefulinNC » Tue Apr 03, 2018 7:19 pm

Epsilon Delta wrote:
Tue Apr 03, 2018 6:41 pm
bberris wrote:
Tue Apr 03, 2018 5:57 pm
Epsilon Delta wrote:
Tue Apr 03, 2018 1:54 pm
GratefulinNC wrote:
Tue Apr 03, 2018 6:33 am
Crypto currencies are fiat currencies. There is nothing backing them up -- no gold, no oil, no governemnts, and no guns.
So crypto currencies doesn't even have a fiat.
Fiat means by law. Crypto's are anti-fiat.
[OT comment removed by admin LadyGeek]

About a month I googled "definition of fiat money". Somewhere close to half of the definitions included crypto-currencies (by function, they also included local scripts like Ithaca Hours as fiat currency). I would have found one such definition disturbing, the sheer volume was well into distressing.

I repeated that search today and the distress has diminished, although at least wikipedia still thinks crypto could be a fiat currency. (Wikipedia includes fiduciary money as a type of fiat money.)
[OT comment removed by admin LadyGeek]

Per Webster's, the definition of fiat: "an authoritative or arbitrary order"
[https://www.merriam-webster.com/dictionary/fiat]

So, fiat encompasses more than government laws. Fiat simply means an authoritative or ARBITRARY order, which can be dictated by any entity to which authority is ascribed -- a government, a company, or an anonymous group.

Fiat currency means a currency created by an arbitrary order or decree -- be it the US dollar or Bitcoin. Hence, its value is arbitrary and illusory. It is not backed by any tangible assets. In contrast to precious metals and oil, which are assets.
Last edited by GratefulinNC on Thu Apr 05, 2018 5:37 am, edited 4 times in total.

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alexanderadams
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Re: What Are Your Thoughts On The Recent Bitcoin Bust? Is It Apart of the Boom/Bust Cycle or Is The CryptoCurrency Finis

Post by alexanderadams » Tue Apr 03, 2018 8:09 pm

alwayshedge wrote:
Tue Apr 03, 2018 6:09 pm
monkey_business wrote:
Mon Apr 02, 2018 2:36 pm
Whakamole wrote:
Sat Mar 31, 2018 11:47 pm
Don't confuse blockchain with Bitcoin. Blockchain is a technology, Bitcoin (and other cryptocurrencies) are specific implementations of blockchain. Buying Bitcoin because you think blockchain will be huge is like having bought Pets.com stock because you thought the Internet was going to be big.
Exactly.

I'm no expert by any means but I think cryptocurrencies will be known as the Crypto Mania in the future, analogous to their very low tech Tulip counterpart of the past.

Anyone here can create what Bitcoin is, very easily, right now. The entire technology is open source. Go download it, change a few things, call it something, and bam, you are the proud owner of your very own currency! What this means is that there is an infinite supply, which means the value should be zero. Last time I checked the number of cryptocurrencies available is 1600+. Your cryptocurrency can be #1643, for example! Imagine that!

This is like trading Monopoly money for real dollars because the maker announced there will only be 21 billion Monopoly dollars printed. So what? You can print your own "Monopoly" money any time you want. Call it "Shmonopoly" or something. Just find some suckers people to buy/trade it and suddenly it will be exchangeable for real dollars.
There have been numerous attempts to do this. They have all mostly failed. There are forks daily. Bitcoin still grows in value. The anti Bitcoin folk just cherry pick the recent downturn to try to prove their point.
I must agree with your insight.. It does seem as whenever there is some level of downturn regarding bitcoin there is a huge uproar in regards to the failure of crypto... Sometimes I wonder if there was no social media / black or white news culture we have today how that would dramatically effect how we interpret cryptocurrencies.

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alexanderadams
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Re: What Are Your Thoughts On The Recent Bitcoin Bust? Is It Apart of the Boom/Bust Cycle or Is The CryptoCurrency Finis

Post by alexanderadams » Tue Apr 03, 2018 8:13 pm

Epsilon Delta wrote:
Tue Apr 03, 2018 3:43 pm
jalbert wrote:
Tue Apr 03, 2018 2:52 pm
feh wrote:
Tue Apr 03, 2018 12:20 pm

Quantum computing will not be the end of all encryption techniques.
Correct. Much faster computing means that cryptographically harder algorithms may be used for encryption as well.
Some classical algorithms now in use are believed to be resistant to quantum computing. OTOH anything based on factorizing semi-primes is quantum toast.
jalbert wrote:
Tue Apr 03, 2018 2:52 pm
Modification of blocks, however, would still require modifying the cryptohashes of predecessor blocks stored in all of the blocks subsequent to the block being modified, with majority voting to commit the changes to block replicas.
A hash collision is sufficient to generate a counterfeit block that meets every requirement of a real block. If you have that duplicate the security of the blockchain is no longer controlled by math, but by the security of the nodes in the network.
Wow this is very interesting... So If its based on factorizing semi-primes it pretty much will be obsolete? Curious to know what OTOH means? Your Insights are very valuable to me! Thank you for contributing to the post!

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alexanderadams
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Re: What Are Your Thoughts On The Recent Bitcoin Bust? Is It Apart of the Boom/Bust Cycle or Is The CryptoCurrency Finis

Post by alexanderadams » Tue Apr 03, 2018 8:15 pm

queso wrote:
Tue Apr 03, 2018 1:11 pm
alwayshedge wrote:
Mon Apr 02, 2018 10:49 pm
There are a lot of very smart people that truly believe in Bitcoin and the blockchain technology. People that are a lot smarter than you and me. I wouldn't be so quick to dismiss crypto currencies based on a speculative mania that occurred. Bitcoin has been around since 2009 and every boom and bust cycle has experienced this same kind of discussion yet somehow, it sticks around and the transaction count keeps growing. Maybe we just don't understand yet where this will play a role. It could be something we haven't even thought of yet. But to dismiss it and compare it to beanie babies or collectible sports cards is rather ignorant.
I don't know for sure, but I'm pretty confident that Elon Musk is probably smarter than me and I am sure not waiting in line to buy TSLA. :happy
I'm a huge fan of Elon, but my question is what is TSLA? Sorry I'm a noob trying to learn as much from you smart guys!

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alexanderadams
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Re: What Are Your Thoughts On The Recent Bitcoin Bust? Is It Apart of the Boom/Bust Cycle or Is The CryptoCurrency Finis

Post by alexanderadams » Tue Apr 03, 2018 8:21 pm

jalbert wrote:
Tue Apr 03, 2018 2:52 pm
feh wrote:
Tue Apr 03, 2018 12:20 pm
telecaster wrote:
Sat Mar 31, 2018 6:08 am
This just means we switch to different "quantum proof" encryption algorithms though and start the game over.
+1

Quantum computing will not be the end of all encryption techniques.
Correct. Much faster computing means that cryptographically harder algorithms may be used for encryption as well.

In fact, Shannon proved decades ago that unbreakable encryption techniques exist, but the key length must be at least as large as the sum total of all cleartext to be encrypted with the particular key. An example of such an encryption technique is a one-time pad-- which uses a random key with length equal to cleartext length, and encryption and decryption are just the exclusive-or of the text with the key.

But advances in computing undermine the archival properties of encrypted data. Much faster computing horsepower, whether or not quantum computing, is a threat to blockchain technology. Existing transactions are recorded and archived using encryption techniques that are known to be cryptographically strong at the time the transaction is recorded. If the encryption is broken in the (near or distant) future, it could compromise any anonymity used in existing archival blockchain ledger entries.

Modification of blocks, however, would still require modifying the cryptohashes of predecessor blocks stored in all of the blocks subsequent to the block being modified, with majority voting to commit the changes to block replicas.
So pretty much what I'm getting is that no one can pretty much predict anything in regards to quantum computing / cryptocurrencies and blockchain, haha! All this new technology is very interesting and I am learning slowly about quantum computing I have a few friends in the cryptocurrency world who I also learn from... Curious to know what your background is?

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alexanderadams
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Re: What Are Your Thoughts On The Recent Bitcoin Bust? Is It Apart of the Boom/Bust Cycle or Is The CryptoCurrency Finis

Post by alexanderadams » Tue Apr 03, 2018 8:24 pm

Simmons02 wrote:
Tue Apr 03, 2018 11:38 am
Theres alot of misleading information here...
RRAAYY3 wrote:
Mon Apr 02, 2018 10:27 pm
I called this before Christmas ... It always has, and always will be, a valueless “currency”

It’s nothing. It’s code. The block chain technology, sure that has practical implications. Bitcoin is ... what? Nothing.
Im interested in your ideas on how blockchain technology is supposed to function with a "valueless, nothing" of a token. The units of currency in a blockchain have to have value for the economic incentives that hold the blockchain together to function.

Also, the idea that Bitcoin or cryptocurrencies in general are doomed because of quantum computing is naive. When it comes to pass that quantum computing will render commonly used encryptions obsolite, it will happen gradually, and the encryption algorithm can simply be changed to a quantum resistant algorithm. Similar to your bank or brokerage updating their encryption when this begins to occur.
I do agree with the idea in regards to the constant revisions done to security / encryption that will pretty much change every time there is a break in the blockchain due to QC or some other protocol. :happy

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queso
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Re: What Are Your Thoughts On The Recent Bitcoin Bust? Is It Apart of the Boom/Bust Cycle or Is The CryptoCurrency Finis

Post by queso » Wed Apr 04, 2018 7:30 am

alwayshedge wrote:
Tue Apr 03, 2018 6:02 pm
alwayshedge wrote:
Tue Apr 03, 2018 6:02 pm
queso wrote:
Tue Apr 03, 2018 1:11 pm
alwayshedge wrote:
Mon Apr 02, 2018 10:49 pm
There are a lot of very smart people that truly believe in Bitcoin and the blockchain technology. People that are a lot smarter than you and me. I wouldn't be so quick to dismiss crypto currencies based on a speculative mania that occurred. Bitcoin has been around since 2009 and every boom and bust cycle has experienced this same kind of discussion yet somehow, it sticks around and the transaction count keeps growing. Maybe we just don't understand yet where this will play a role. It could be something we haven't even thought of yet. But to dismiss it and compare it to beanie babies or collectible sports cards is rather ignorant.
I don't know for sure, but I'm pretty confident that Elon Musk is probably smarter than me and I am sure not waiting in line to buy TSLA. :happy
Apples to oranges comparison. Plus you're cherry picking a short period of time where TSLA stock has not been performing well. Over the long term, the share price has appreciated exponentially. Of course we are all bogleheads and don't buy individual stocks but you know what I mean...
I'll try another. From what I recall, Jim Jones had a pretty high IQ so was probably smarter than you and me. I'm pretty sure he'd recommend the KoolAid. :happy

Northern Flicker
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Re: What Are Your Thoughts On The Recent Bitcoin Bust? Is It Apart of the Boom/Bust Cycle or Is The CryptoCurrency Finis

Post by Northern Flicker » Wed Apr 04, 2018 11:37 am

Wow this is very interesting... So If its based on factorizing semi-primes it pretty much will be obsolete? Curious to know what OTOH means? Your Insights are very valuable to me! Thank you for contributing to the post!
Bitcoin mining is based on computing discrete logarithms over finite fields generated by elliptic curves.

The digital signatures and authentication used when someone wants to do a transaction are based on public-key cryptosystems.

Quantum computing might make bitcoin mining trivial, necessitating new, computationally harder problems to solve for mining applications.

But mining is specific to cryptocurrency. Business applications of blockchain do not require mining. Suppose 3 participants used a blockchain to record business contracts or transactions. If the digital signature cryptography can be broken, 2 participants could conspire to defraud the 3rd participant by forging the digital signature and serving as a majority to accept updates from the forged block to the end of the chain. The same scenario would apply to a cryptocurrency, but it takes a conspiracy of a majority of participants, and there are likely to be a lot more than 3 in total.

If I could at least plant a Bitcoin in the ground and grow a tulip, I might be more inclined to see some inherent value in it.
Last edited by Northern Flicker on Wed Apr 04, 2018 12:17 pm, edited 1 time in total.
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Valuethinker
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Re: What Are Your Thoughts On The Recent Bitcoin Bust? Is It Apart of the Boom/Bust Cycle or Is The CryptoCurrency Finis

Post by Valuethinker » Wed Apr 04, 2018 11:44 am

alexanderadams wrote:
Tue Apr 03, 2018 8:15 pm
queso wrote:
Tue Apr 03, 2018 1:11 pm
alwayshedge wrote:
Mon Apr 02, 2018 10:49 pm
There are a lot of very smart people that truly believe in Bitcoin and the blockchain technology. People that are a lot smarter than you and me. I wouldn't be so quick to dismiss crypto currencies based on a speculative mania that occurred. Bitcoin has been around since 2009 and every boom and bust cycle has experienced this same kind of discussion yet somehow, it sticks around and the transaction count keeps growing. Maybe we just don't understand yet where this will play a role. It could be something we haven't even thought of yet. But to dismiss it and compare it to beanie babies or collectible sports cards is rather ignorant.
I don't know for sure, but I'm pretty confident that Elon Musk is probably smarter than me and I am sure not waiting in line to buy TSLA. :happy
I'm a huge fan of Elon, but my question is what is TSLA? Sorry I'm a noob trying to learn as much from you smart guys!
The stock ticker for Tesla, the world's most over/ undervalued car company (depending on who you talk to ;-)).

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grayfox
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Re: What Are Your Thoughts On The Recent Bitcoin Bust? Is It Apart of the Boom/Bust Cycle or Is The CryptoCurrency Finis

Post by grayfox » Wed Apr 04, 2018 4:07 pm

I don't think Bitcoin can be called a fiat currency.

According to vocabulary.com:
From the Latin for "let it be done," the word fiat is a binding edict issued by a person in command. It can gain an almost Biblical aura of authority, like a movie Pharaoh saying, "So let it be written, so let it be done." So let it be a fiat.
It seems like there would have to be some kind of authority to issue a fiat. For U.S. Dollars, the authority would be the U.S. Government. Printed on the money: THIS NOTE IS LEGAL TENDER FOR ALL DEBTS, PUBLIC AND PRIVATE. That's the decree or fiat that makes a dollar become legal money.

Image

With bitcoin, there is no authority to issue the decree or fiat that would make it legal tender or money. If people use bitcoin as money, I would call it de facto money or a de facto currency.

conlius
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Re: What Are Your Thoughts On The Recent Bitcoin Bust? Is It Apart of the Boom/Bust Cycle or Is The CryptoCurrency Finis

Post by conlius » Wed Apr 04, 2018 4:41 pm

alex_686 wrote:
Fri Mar 30, 2018 9:45 pm
A asset's price is its discounted free cash flow. Dividends, interest payments, rents, etc. It is tied to economically productive assets. The theory on this is solid. So investing.

Bitcoin, gold, Benie Babies, collectoable cars, etc. don't have any cash flows. Their value is based on what somebody else will pay for it in the futures, where that person buys it based on what somebody else will buy in the future. Etc. The greater fool theory. This is where the pyramid idea comes into play. In order for the value to go up the next round of investors needs to be bigger than the current. These systems tend to be less stable. It is speculation.
Isn't this not the case with proof of stake coins? Proof of stake, from what I understand, is essentially a model that pays you a dividend for holding that coin.

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Re: What Are Your Thoughts On The Recent Bitcoin Bust? Is It Apart of the Boom/Bust Cycle or Is The CryptoCurrency Finis

Post by alex_686 » Wed Apr 04, 2018 4:57 pm

conlius wrote:
Wed Apr 04, 2018 4:41 pm
Isn't this not the case with proof of stake coins? Proof of stake, from what I understand, is essentially a model that pays you a dividend for holding that coin.
This is a term that I have not heard of before. I sense flaws. Thoughts - please punch holes in my arguments.

What would be the rate of return? If it is nominal then it does not matter much. Real returns would have to be in the ballpark of real returns of cash held in a savings account else wise it has a negative value using the cash flow model.

If not then what? If it is not nominal then the holder generates value by just sitting on their holdings? That would tend to be inflationary. And maybe the new creation matches the inflation rate. If so, then the value of future cash flows is back to zero, so no value.

And how do you create economic value by just sitting on your horde of coins? Like I said, inflationary. Maybe if yo are also doing mining as part of this then that would balance things out.

Bitcoin has a upper limit. I would assume over time that this interest / cash flow will dry up.

Ztx
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Re: What Are Your Thoughts On The Recent Bitcoin Bust? Is It Apart of the Boom/Bust Cycle or Is The CryptoCurrency Finis

Post by Ztx » Wed Apr 04, 2018 11:43 pm

carguyny wrote:
Tue Apr 03, 2018 7:10 am
Many companies are already using blockchain for various uses including Vanguard. https://pressroom.vanguard.com/news/Pre ... 21217.html

I'm a huge believer in decentralization, which to me is why the technology has promise. The energy usage is far lower than the hype.

I've used Bitcoin and Ether as currencies, including paying a $30k car deposit, buying toys for my son from Europe etc. You can pay for a trip on Expedia with it as an example.

It's far more regulated than what the media likes to talk about, especially in New York. Coinbase has been providing data to the IRS going back to 2013. Costs to use it as a currency when paying minning fees are much cheaper than a bank. I can do it from my phone or desktop using facial recognition to confirm the transfer and 2 factor authentication to log in.
True, companies started using it, but after reading the press release you referenced, I didn't see anything that couldn't be done without blockchain and just as well:
- distributed databases: they have been around for quite a while
- automated workflows: unless there is a bunch of people at Vanguard importing the data manually, any workflow is already automated with anything from c++ to SSIS packages or Python.
etc

GratefulinNC
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Re: What Are Your Thoughts On The Recent Bitcoin Bust? Is It Apart of the Boom/Bust Cycle or Is The CryptoCurrency Finis

Post by GratefulinNC » Thu Apr 05, 2018 5:47 am

grayfox wrote:
Wed Apr 04, 2018 4:07 pm
I don't think Bitcoin can be called a fiat currency.

According to vocabulary.com:
From the Latin for "let it be done," the word fiat is a binding edict issued by a person in command. It can gain an almost Biblical aura of authority, like a movie Pharaoh saying, "So let it be written, so let it be done." So let it be a fiat.
It seems like there would have to be some kind of authority to issue a fiat. For U.S. Dollars, the authority would be the U.S. Government. Printed on the money: THIS NOTE IS LEGAL TENDER FOR ALL DEBTS, PUBLIC AND PRIVATE. That's the decree or fiat that makes a dollar become legal money.

Image

With bitcoin, there is no authority to issue the decree or fiat that would make it legal tender or money. If people use bitcoin as money, I would call it de facto money or a de facto currency.
I disagree. Any command issued by a person or entity to which YOU ascribe authority -- such as your boss, your spouse -- is fiat. The government is simply the most obvious entity that issues decrees. In the case of Bitcoin, the authority is the blockchain itself.

The MAIN point: There are NO assets backing up Bitcoin. Hence, blockchain is moot because THE EMPEROR HAS NO CLOTHES.

My prediction: Bitcoin is going to zero.

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Re: What Are Your Thoughts On The Recent Bitcoin Bust? Is It Apart of the Boom/Bust Cycle or Is The CryptoCurrency Finis

Post by Vision » Thu Apr 05, 2018 9:56 am

[removed]
Last edited by Vision on Thu Nov 14, 2019 10:12 am, edited 1 time in total.

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Re: What Are Your Thoughts On The Recent Bitcoin Bust? Is It Apart of the Boom/Bust Cycle or Is The CryptoCurrency Finis

Post by grayfox » Thu Apr 05, 2018 11:20 am

^^^Someone messed up the quotes in the previous post^^^
GratefulinNC wrote:
Thu Apr 05, 2018 5:47 am

I disagree. Any command issued by a person or entity to which YOU ascribe authority -- such as your boss, your spouse -- is fiat. The government is simply the most obvious entity that issues decrees. In the case of Bitcoin, the authority is the blockchain itself.
That's exactly what I said. A fiat comes from some authority, any authority. It could be the Olympic committee or a company's Management or the head of a household. It does not have to be the government. But has to be decree made by whoever is in charge.

There is no central authority with bitcoin. No one is in charge of bitcoin. That's the whole point of the blockchain. There's no one to issue a decree. It only has value as currency if everyone acts like it has value.

E.g. In prisons, the prisoners use cigarettes as currency. The official prison authority (warden) did not issue a decree that cigarettes will be used as currency. Everyone just uses cigarettes as currency without anyone forcing them. Cigarettes in prison are not a fiat currency, but they are de facto currency.

Whether or not something has intrinsic value is a separate issue.
Cigarettes and gold have intrinsic value. People start using them as money naturally.
Fiat dollars and bitcoin have no intrinsic value. People are ordered to use dollars as money.

And almost no one is really using bitcoin as money.

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Re: What Are Your Thoughts On The Recent Bitcoin Bust? Is It Apart of the Boom/Bust Cycle or Is The CryptoCurrency Finis

Post by GratefulinNC » Thu Apr 05, 2018 11:41 am

grayfox wrote:
Thu Apr 05, 2018 11:20 am
^^^Someone messed up the quotes in the previous post^^^
GratefulinNC wrote:
Thu Apr 05, 2018 5:47 am

I disagree. Any command issued by a person or entity to which YOU ascribe authority -- such as your boss, your spouse -- is fiat. The government is simply the most obvious entity that issues decrees. In the case of Bitcoin, the authority is the blockchain itself.
That's exactly what I said. A fiat comes from some authority, any authority. It could be the Olympic committee or a company's Management or the head of a household. It does not have to be the government. But has to be decree made by whoever is in charge.

There is no central authority with bitcoin. No one is in charge of bitcoin. That's the whole point of the blockchain. There's no one to issue a decree. It only has value as currency if everyone acts like it has value.

E.g. In prisons, the prisoners use cigarettes as currency. The official prison authority (warden) did not issue a decree that cigarettes will be used as currency. Everyone just uses cigarettes as currency without anyone forcing them. Cigarettes in prison are not a fiat currency, but they are de facto currency.

Whether or not something has intrinsic value is a separate issue.
Cigarettes and gold have intrinsic value. People start using them as money naturally.
Fiat dollars and bitcoin have no intrinsic value. People are ordered to use dollars as money.

And almost no one is really using bitcoin as money.
Right on! Bitcoin is a great example of the Greater Fool Theory.

A lot people are going to lose a lot of money as reality sets in.

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Re: What Are Your Thoughts On The Recent Bitcoin Bust? Is It Apart of the Boom/Bust Cycle or Is The CryptoCurrency Finis

Post by NYCwriter » Fri Apr 06, 2018 9:53 pm

I still own a few btc, but I bought cheap, and sold a bit during last fall's spike to recover my initial cash investment plus taxable profit On top of it, I got a very hefty "dividend" in the form of btc cash. Having de-risked, I've left it alone. FYI, taxes are a PITA but the profit was pretty good.

Is it a "store of value?" Only insofar as people believe it is. It seems to be a risk asset, and it does not move up like gold does when the market is down. But I don't own GLD.

I feel bad for people who bought at the high due to the frenzy. I saw it go up and down quite a bit over time, and no I can't say where it'll end up eventually. But I do think blockchain tech will support a lot of future applications. Right now, however, it's exploratory and the attempt to exploit interest is a cautionary tale.

it's still interesting to find people on a Boglehead forum who are so convinced they know the future. I want those tea leaves you're drinking! Any predictions on the market? Will we be up or down on Monday?

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Re: What Are Your Thoughts On The Recent Bitcoin Bust? Is It Apart of the Boom/Bust Cycle or Is The CryptoCurrency Finis

Post by LadyGeek » Sat Apr 07, 2018 12:10 pm

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