The Bitcoin/Crypto Thread

[xenon]

@klaus said in The Bitcoin/Crypto Thread:

@xenon said in The Bitcoin/Crypto Thread:

@lufins-dad said in The Bitcoin/Crypto Thread:

@xenon said in The Bitcoin/Crypto Thread:

@lufins-dad said in The Bitcoin/Crypto Thread:

@xenon said in The Bitcoin/Crypto Thread:

@lufins-dad said in The Bitcoin/Crypto Thread:

@ivorythumper said in The Bitcoin/Crypto Thread:

@klaus said in The Bitcoin/Crypto Thread:

@ivorythumper said in The Bitcoin/Crypto Thread:

the problem of decimalization

If Bitcoin continues to exist for the next few hundred years, we will see the reverse problem: A house costing 0.00000000001 Bitcoin or something. The amount of Bitcoin will soon start to shrink every year. Bitcoin that is lost can never return.

Bitcoin (tm) is just one brand. There can be a whole lot of competitive ways to buy and sell with other alt coins, right? So if Shiba Inu is capitalized for 1,000,000,000,000,000 coins, and there are a couple of other dozen competitors, how does ever get to a useful money supply to peg to any hard currency?

Their are hundreds or even thousands of Credit Card/Charge Card systems. Most of the major ones are built off the Visa, MasterCard, Discover, and American Express platforms, but there are also innumerable retailers with their own unique platforms. Kohl’s, Macy’s, Target, and on, and on, and on…

Ethereum and possibly Solana stand primed to be your Visa and MC platforms… Then you have other currencies built off of these platforms such as Cardano… These fill the slot that the individual banks fill such as Chase or Citibank. Many of these little alt coins are built for specific and limited use in different gaming or specialty platforms. These are comparable to your small retail cards for specific stores.

There are several competing currencies and marketplaces to handle transactions and tying it to hard currencies.

I still don’t know what the pain points in the current MC/Visa platform are for consumers that crypto would solve.

How would my life be different if Amazon and all other retailers accepted Future Coin?

Well, instead of paying 16% interest you could be making 16% interest for one...

I never pay any interest on cards but still use them for all my transactions. I use the cards for convenience and online transactions.

I also don’t think pure coins would offer a credit platform - or if they did the incentives and prices wouldn’t be so different from current credit prices.

But credit is a different mechanism from currency.

I'm not saying that Crypto will offer "credit" (though there is some research in that arena).

My comparison is using Crypto for a "cash" payment vs using a credit card. While you may get your card paid off every month, a lot of people don't. They intend to, but they miss it. If this didn't happen, the credit cards wouldn't be in business. Even for you, however, Crypto would still be a more secure payment option. A lot lower risk of fraud and personal identity theft. It will also be easier and cheaper for you to send and receive funds personally. Yes, Venmo works pretty well, but there is still a lot of personal security risk there.

Overseas payments are far easier, cheaper, and more secure. I recently received an EFT for a piano purchase where the customer sent the money from their German Bank. It took 7 days and 2 additional banks to take care of the proper handshakes and receive the money.

I get all those benefits, but they’re incremental (which would only come with monstrous disruption to the current system. And it’s not clear that the current system couldn’t be updated to deliver them).

Crypto tech is being priced as if it’s the next internet.

I think those things are not the point of crypto.

From my perspective, there are two main points:

1. Crypto-Money: A currency that isn't controlled by any government and has predictable inflation. That's huge.
2. Smart contracts and everything associated to it ("dApps" etc.). If companies like Chainlink are successful and "off-chain" data and things become available "on the chain", then this can revolutionalize how we do business.

There's still a lot of uncertainty whether this will all work out, and maybe it will all have disappeared in 10 years - there's still many major question marks - , but the potential to be at least just as revolutionary as the internet itself is certainly there.

Number 1 I agree with. There's value in that, and I think Bitcoin is the closest to being that. But - I think much of the heart of the argument overlaps very squarely with the argument for the gold standard.

I have other hot takes on Bitcoin... but I'll keep them to myself to prevent branding myself more of a luddite than I already have.

[Klaus]

@xenon said in The Bitcoin/Crypto Thread:

But - I think much of the heart of the argument overlaps very squarely with the argument for the gold standard.

But gold isn't a digital currency. For instance, it's hard to carry it to other countries. It's easy to make its use illegal. Transactions are costly and slow.

[xenon]

@klaus said in The Bitcoin/Crypto Thread:

@xenon said in The Bitcoin/Crypto Thread:

But - I think much of the heart of the argument overlaps very squarely with the argument for the gold standard.

But gold isn't a digital currency. For instance, it's hard to carry it to other countries. It's easy to make its use illegal. Transactions are costly and slow.

Right, agreed. But the value comes from being a broadly accepted inflation hedge. (The gold part).

You can get gold ETFs.

The frictionless part is a bonus.

I would rarely ever need to carry my inflation hedge with me anywhere.

[Klaus]

Ethereum’s Fees Are Too Damn High!!

[xenon]

TLDR: Xenon doesn't get the hype. At all. There's no fun or transformative uses cases for blockchain that I've heard of.

I just don't get the point of smart contracts either. Nothing about crypto uses cases is exciting.

At least in the late 90's someone could say: "You'll have a catalog of all the world's product in one place and you can buy anything you want". Or... "people will create encyclopedias on any topic and anyone can access them for a fee"

Or something. Exciting narratives... even though most were bullshit.

The best etherium can do is smart contracts to replace escrow on my home sale. Which will probably need to be backed by a real person when real human shit (like Aqua's burst pipe) happens. It's the Oracle Problem - there's no reliable way to link physical assets to a digital block chain without a trusted third-party.

Or maybe etherium can do NFTs for sports tickets... but you can have digital tickets with bar codes today.

There's no fun or massive cost savings that anyone has articulated.

For work I recently looked at B2B commerce systems. Some of the biggest companies still use this crap called EDI from the 70s to communicate with their suppliers.

There is way way way way way way better technology that exists today to facilitate that. Doesn't matter... if it's good enough and entrenched, there's often no reason to change it.

[xenon]

Block chain at it's most simplest is a mechanism that provides a distributed, verifiable digital paper trial. That's not as exciting as the internet. The internet promised instant, global electronic communication.

I can see blockchain having some nice use cases... I don't see any revolutions though.

Also - blockchain is 13 years old and not yet improving anyone's lives (outside of investment gains). The internet was always engaging and useful (email, FTP) from almost day 1.

[Ivorythumper]

@lufins-dad I think a lot of those store credit cards are just co-branded with synchrony, citi, visa, etc.

[Ivorythumper]

@lufins-dad said in The Bitcoin/Crypto Thread:

@ivorythumper said in The Bitcoin/Crypto Thread:

@klaus said in The Bitcoin/Crypto Thread:

@ivorythumper said in The Bitcoin/Crypto Thread:

the problem of decimalization

If Bitcoin continues to exist for the next few hundred years, we will see the reverse problem: A house costing 0.00000000001 Bitcoin or something. The amount of Bitcoin will soon start to shrink every year. Bitcoin that is lost can never return.

Bitcoin (tm) is just one brand. There can be a whole lot of competitive ways to buy and sell with other alt coins, right? So if Shiba Inu is capitalized for 1,000,000,000,000,000 coins, and there are a couple of other dozen competitors, how does ever get to a useful money supply to peg to any hard currency?

Their are hundreds or even thousands of Credit Card/Charge Card systems. Most of the major ones are built off the Visa, MasterCard, Discover, and American Express platforms, but there are also innumerable retailers with their own unique platforms. Kohl’s, Macy’s, Target, and on, and on, and on…

Ethereum and possibly Solana stand primed to be your Visa and MC platforms… Then you have other currencies built off of these platforms such as Cardano… These fill the slot that the individual banks fill such as Chase or Citibank. Many of these little alt coins are built for specific and limited use in different gaming or specialty platforms. These are comparable to your small retail cards for specific stores.

There are several competing currencies and marketplaces to handle transactions and tying it to hard currencies.

The concern about decimalization is that if Shiba Inu is targeted 1 quadrillion units to peg at $1.00 (for example), then buyers would have to support that valuation with $1Q of purchasing power (hard money or the crypto equivalent.

So let’s say everyone eventually shifts to crypto— which makes sense for several billions of people who don’t have access to stable currencies and safe banking — IOW most of the world— then all the total wealth of the world might be held in crypto, and as wealth was continued to be created the crypto supply would grow or the value would rise.

What is everything in the world valued at in 2021 USD or Euro or any relatively stable currency? Maybe hundreds of trillions or quadrillions or even quintillions (over time)—. But then cryptos are competing for that market share of the wealth to hold the value. So how many $1Q cryptos are needed for this? And how are these stable against market competition?

[89th]

This will all be moot when the water wars start.

[xenon]

It used to be fun! I had a mining rig in 2012 (it was just a gaming PC, but you could get coins back then). I sold all of it when I went to grad school.

Among techies there was a lot of optimism around blockchain. I haven't seen a single useful and valuable application developed in the last decade.

If it were so useful, I would have expected something by now. (And we know there’s no shortage of money or top minds)

I could be completely wrong though.

[Klaus]

If you have 80 min to kill, watch this.

Link to video

It blew me away how fees in Bitcoin work: the game theoretical considerations about incentives, the potential attack vectors, the interaction with block size, the interaction with transaction frequency variability etc.

I particularly liked the considerations of how miners should behave rationally if there's a block with an absurdly high fee, e.g. how they should try to "steal" the block from another miner who has already successfully mined it. That part starts around 58:20.

[xenon]

@klaus said in The Bitcoin/Crypto Thread:

If you have 80 min to kill, watch this.

Link to video

It blew me away how fees in Bitcoin work: the game theoretical considerations about incentives, the potential attack vectors, the interaction with block size, the interaction with transaction frequency variability etc.

I particularly liked the considerations of how miners should behave rationally if there's a block with an absurdly high fee, e.g. how they should try to "steal" the block from another miner who has already successfully mined it. That part starts around 58:20.

Very interesting video. Thanks for sharing. It’s different than a one-time game like a spectrum auction. Miners need to keep their software updated in response to the “meta game” of strategies being deployed by others.

The other factor is that it’s inherently not a fair game. Speed wins. Better equipment means better speed.

(I think today something like 95% of mining is done by 6 players).

It’ll be interesting to see when / people start ditching Bitcoin because of its technical design.

[Klaus]

@xenon said in The Bitcoin/Crypto Thread:

The other factor is that it’s inherently not a fair game. Speed wins. Better equipment means better speed.
(I think today something like 95% of mining is done by 6 players).

Those who invest more gain more. What could be more fair?

Are you sure those 6 aren’t mining pools? I think it’s more distributed than that.

[George K]

https://www.cnbc.com/2021/11/26/google-warns-crypto-miners-are-using-compromised-cloud-accounts-.html

Cryptocurrency miners are using compromised Google Cloud accounts for computationally-intensive mining purposes, Google has warned.

The search giant’s cybersecurity team provided details in a report published Wednesday. The so-called “Threat Horizons” report aims to provide intelligence that allows organizations to keep their cloud environments secure.

“Malicious actors were observed performing cryptocurrency mining within compromised Cloud instances,” Google wrote in an executive summary of the report.

Cryptocurrency mining is a for-profit activity that often requires large amounts of computing power, which Google Cloud customers can access at a cost. Google Cloud is a remote storage platform where customers can keep data and files off-site.

Google said 86% of 50 recently compromised Google Cloud accounts were used to perform cryptocurrency mining. In the majority of cases, cryptocurrency mining software was downloaded within 22 seconds of the account being compromised, Google said.

Around 10% of the compromised accounts were also used to conduct scans of other publicly available resources on the internet to identify vulnerable systems, while 8% of instances were used to attack other targets.

[Jolly]

Sound as a dollar...

[Copper]

The best technology is probably secret. Once the secret is out, the value diminishes.

Link to video

[xenon]

@klaus said in The Bitcoin/Crypto Thread:

Are you sure those 6 aren’t mining pools? I think it’s more distributed than that.

Yeah, I think I'm wrong on that. Not sure where I heard it.

[LuFins Dad]

Has anyone tried staking or delegating? Ian thinking of trying delegating on The Graph…

[Klaus]

@lufins-dad said in The Bitcoin/Crypto Thread:

Has anyone tried staking or delegating? Ian thinking of trying delegating on The Graph…

I looked into it, but the risk I'd be taking is not clear to me.

I hate to invest in something I don't fully understand.

[LuFins Dad]

@klaus said in The Bitcoin/Crypto Thread:

@lufins-dad said in The Bitcoin/Crypto Thread:

Has anyone tried staking or delegating? Ian thinking of trying delegating on The Graph…

I looked into it, but the risk I'd be taking is not clear to me.

I hate to invest in something I don't fully understand.

The delegating GRT on the Graph makes a little more sense to me, but there are still elements of all of this that I am still not sure about which again is why my investment has been weekly lunch money… As of this morning I am breaking even, but that’s mostly because two of my weekly buys of Solana were at low/value prices. It still hasn’t returned to the original price I bought at…