Bitcoin - Part 2

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psionl0 said:
The last time I examined the blockchain, the total collected in transaction fees was around 1 BTC per block.

An examination of blocks 500613 to 500622 (https://blockchain.info/blocks/1513994444769) shows that this has risen to between 7 BTC and 12 BTC per block. When the block reward halves in 2020, transaction fees will be the primary motivation for mining.

The average cost of a transaction is around 0.004 BTC ($50 at current prices) and a little less than 1% of the value of the transaction.

What all this means is that the days of buying a pizza with bitcoin are long gone. Unless you are buying or selling bitcoin, the only reason you would use it in a transaction is if you were dealing in large sums of money.
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So the average person would never use it. I figured as much.
 
Just putting this out there:
Wouldn't it be much better to base the mining of a cryptocurrency not on computational complexity which translates to high energy consumption but instead something random but also decentralized? Or if not random, then something unpredictable. I know random number generators (vs. pseudo random) are a bit of a holy grail in computer science and an application like cryptocurrency is perfect example of why such a thing is so important. Think about some of the things that could replace bitcoin mining:
radioactive decay of something
measurements from the Solar and Heliospheric Observatory
Electricity consumption of San Francisco seeded off most insignificant digits
I don't know, point being, something that doesn't consume resources unnecessarily and that nobody has an advantage.
 
portlandatheist said:
Just putting this out there:
Wouldn't it be much better to base the mining of a cryptocurrency not on computational complexity which translates to high energy consumption but instead something random but also decentralized? Or if not random, then something unpredictable.
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It seems technically feasible. Each miner includes a random number in their block and they generate a hash of all the random numbers together and whoever's number is closest to the hash wins.

Problems: Whoever has the most mining computers running simultaneously has the most chance of winning the prize. And being a decentralized network, every miner would have to have a copy of every other miners' block in their computer so that they could compute the winner. This would still be CPU intensive (though not tending towards infinity as with the current setup). There may be other holes that I haven't thought of yet.

Current alternatives to "proof of work" include "proof of stake" (whoever has the most coins wins) and "consensus" (if a majority of miners agree on what should be included in a block then the block gets added to the chain). Consensus seems to be the best of the lot but is not designed to allocate block rewards (maybe incorporate a lottery as above).
 
I went to the store today to get something and when I went to pay for it with my dollar bill the guy at the register told me it had been devalued down to $0.75 overnight and I didn't have enough money to make my purchase, what a bummer
 
psionl0 said:
In the past, everybody who has said "bitcoin's price will never be this high again" has made a jackass out of themselves. I don't see any reason why nobody will be pinning the tail on you this time.
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The crash eased off for about a day at $13,500 or so. But is now at about $12,600.

The slackening of the rate of fall coincided with press stories about how enthusiasts who think the crash is being predicted by jackasses have been buying in using credit cards. That gives them a very leveraged position, and I say again I hope you've not been doing that. Only heehawing jackasses would contemplate such foolishness.

ETA Now jumping around $12100-$12150 at 11:24 UK time.
 
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Perhaps Bitcoin will go the way of the Zimbabwe dollar.

In 1980 when Mugabe came into power the Zim dollar was on a par with the US dollar.

When they finally demonetised the currency, the value had sunk to 10,000,000,000,000,000,000,000,000,000 (25 zeros) to one US dollar.

They were issuing banknotes denoted as 100 trillion redenominated Zim dollars

https://en.wikipedia.org/wiki/Zimbabwean_dollar
 
PartSkeptic said:
Perhaps Bitcoin will go the way of the Zimbabwe dollar.

In 1980 when Mugabe came into power the Zim dollar was on a par with the US dollar.

When they finally demonetised the currency, the value had sunk to 10,000,000,000,000,000,000,000,000,000 (25 zeros) to one US dollar.

They were issuing banknotes denoted as 100 trillion redenominated Zim dollars

https://en.wikipedia.org/wiki/Zimbabwean_dollar
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The Hungarian pengöWP still holds the record then
The Hungarian economy could only be stabilized by the introduction of a new currency, and therefore, on 1 August 1946, the forint was reintroduced at a rate of 400 000 000 000 000 000 000 000 000 000 (400 octillion) = 4×10^29 pengő, dropping 29 zeros from the old currency. In effect, the total amount of circulating pengő notes had a value of less than 0.1 fillér (10^−3 forint)​
 
PartSkeptic said:
One last gasp yesterday. Maybe fools taken in by "Buy now while the price is down". Dropping again today, and I think the trend will continue.

https://www.bitcoinzar.co.za/bitcoin-price-chart/

What we need to talk about now is how low it will go.
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1000 cryptos and 95% due to return to zero is what one bitcoiner enthuses. I would not enthuse if I were a bitcoin billionare. I see nothing backing bitcoin, but I have not read the threads to see where I am wrong.
This feels like the dotcom bubble from a technical view, but of course there was real technology and activity that did things in the dotcoms, and they took off again. If bitcoin is like gold, there will be a limit to what can be mined. But there is no limit to bitcoin clones. There is no gold clone. The whole escapade is a nonsense of the first order, and it will seem all so obvious when it lurches along just above zero.

https://secure.stansberrychurchouse...i2AIV0GO8Ch0ygQvmEAEYASAAEgKMXvD_BwE#AST74247
 
Craig B said:
The crash eased off for about a day at $13,500 or so. But is now at about $12,600.

The slackening of the rate of fall coincided with press stories about how enthusiasts who think the crash is being predicted by jackasses have been buying in using credit cards. That gives them a very leveraged position, and I say again I hope you've not been doing that. Only heehawing jackasses would contemplate such foolishness.

ETA Now jumping around $12100-$12150 at 11:24 UK time.
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Wow! The price hasn't instantly rebounded! It must really be different this time. :rolleyes:
 
psionl0 said:
Wow! The price hasn't instantly rebounded! It must really be different this time. :rolleyes:
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Hung around 13500, now been in the 12000s for a while. The decline is staged. In previous bubbles, they crashed once people had spent all their money, like Joe Kennedy's shoe shine boy, I've already referred to.

But these days people have credit cards, and it's possible that the hucksters are now encouraging the marks to max them out. That leverages the marks' position, so I hope it's not happening that they're maxing out their credit.

That really would spread the effect of the crash, when it comes, to other sectors of the economy.
 
Craig B said:
But these days people have credit cards, and it's possible that the hucksters are now encouraging the marks to max them out.
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What is this new fangled "credit card" thingy that you are talking about? I have never heard of people borrowing money to speculate with before. Did that start happening this year? Where is your source on this?

And who are the "hucksters"?
 
psionl0 said:
What is this new fangled "credit card" thingy that you are talking about? I have never heard of people borrowing money to speculate with before. Did that start happening this year? Where is your source on this?

And who are the "hucksters"?
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Samson gave us a link to one here https://secure.stansberrychurchouse....D_BwE#AST74247

You don't know that people borrow to speculate? You've never heard of leverage? Margin? Here's investopedia. https://www.investopedia.com/terms/l/leverage.asp

That was a big thing in the 1929 bubble. People borrowed money at high interest rates to play the market, because they expected to make huge capital gains that would wipe out their debts. Or they bought on margin. You could put down 10% of the cost of the shares, and borrow the other 90%, using the shares themselves as collateral. So you can multiply your purchasing power in a rising market tenfold. But if the price falls, your creditor sells your holdings to recover the capital. You don't need to sell. You get "sold out".

Are people buying Bitcoin using credit cards? Can a fish swim? Here's a "huckster" promoting it
Here's the deal:
Buying bitcoins with a credit or debit card used to be REALLY hard.

Luckily, companies like Coinbase (USA, Canada, Europe & UK) and CoinMama(worldwide) have made the process smooth and fast.

Below, we've listed 5 proven exchanges for buying bitcoins with your credit card.​
Here's coinmama's sales pitch.
Step 1: Choose your method of payment. Use a credit/debit card to pay online in minutes! If you want to pay with cash, choose one of the other methods of payment. Step 2: Follow the instructions. To pay with credit/debit card, fill the payment form and follow the instructions. To pay with cash choose Western Union as the method of payment and follow the instructions to complete the payment.​
Stuff like this always happens in crazy bubbles, 1637, 1720, 1845, 1929. Always the same. And when the punters' money runs out, the bubble goes pop. Coinmama and her kind will disappear completely at that very moment, never to be seen again.

My point of course is, joking aside, that easy credit and purchases on credit, are much more widespread and accessible than at any of the previous dates I have cited. That may change the pattern of the crash, but crash there will be. And this may well be it.
 
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I am thinking that even in the tulip bubble you had tulip bulbs at the end with an above zero value.
This is obviously not so with a bitcoin. It will have the same value as a computer graphic of the Mona Lisa, infinitely reproduceable..
 
Samson said:
I am thinking that even in the tulip bubble you had tulip bulbs at the end with an above zero value.
This is obviously not so with a bitcoin. It will have the same value as a computer graphic of the Mona Lisa, infinitely reproduceable..
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Well yes, and in extremis you can even eat them, but that's little consolation to the boomtime possessor of
A tulip, known as "the Viceroy" (viseroij) ... bulb was offered for sale between 3,000 and 4,200 guilders (florins) depending on size (aase). A skilled craftsworker at the time earned about 300 guilders a year.​
https://en.m.wikipedia.org/wiki/Tulip_mania
 
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The_Animus said:
Goldman Sachs is starting a crypto currency trading desk which will trade bitcoin and a couple others

ETA: Link - https://www.bloomberg.com/news/arti...-to-be-building-a-cryptocurrency-trading-desk
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One of the chapters in JK Galbraith's indispensable book The Great Crash 1929 is entitled In Goldman Sachs We Trust. In it, he observes, IIRC, in relation to the leverage operations of that company,
If there must be madness there is something to be said for having it on a heroic scale.​
 
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