What the hell is (a) bitcoin?

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lukethedrifter
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Re: What the hell is (a) bitcoin?

Post by lukethedrifter »

What he said.

What’s the point? Is it just cleverness? Do we need a new currency that will allow even more shadiness than the current system?

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Re: What the hell is (a) bitcoin?

Post by Michael »

Arthur Dent wrote:
Michael wrote:
Schlich wrote:Did it though? The price looks pretty normal right now. I have a lot of I told you so's on my facebook feed but I don't really see the receipts.
It peaked to almost 20k this week. It's trading around 14.2k right now. It was trading under 12k earlier today so it has recovered some. These types of swings aren't uncommon for bitcoin.

Personally, I stay away from cryptocurrency. I think there is a use for it and a market, but what's happening right now feels like gambling to me.
What's the actual use for it? Even if this crash is abortive, the routine high level volatility makes it comically bad at its supposed function as an alternative currency. Not to mention the transactions fees that are currently running at over $50.

Is there any value to it other than as a get rich quick scheme centered around not being the last sucker holding the bag? Shady transactions where the potential secrecy may outweigh the large costs associated with using it?

I can imagine that blockchain as a technology can have some uses, but BTC as a currency is a joke.
Here are the main uses:

1) low cost money transfers to loved ones in different countries.
2) Illegal activities

I didn't know the xfer costs were so high right now. It they true for all the ccys? I know bitcoin has structural problems with how it's designed.

Regardless, my point is there will be a market for cryptocurrency, but what's happening right now is cray cray.

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pioneer98
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Re: What the hell is (a) bitcoin?

Post by pioneer98 »

Goldman Sachs is selling Bitcoin Futures. This has bubble written all over it. Since there are a finite number of bitcoins, some have speculated that as they get closer and closer to mining the last one, the price will keep rising. This will encourage hoarding. This kind of stuff may already be happening. When you have people hoarding large amounts of currency, it starts to fail as a currency because transactions slow and grind to a halt. We get around this problem with real currency by printing more of it.


Goldman Wants a 100% Margin on Some Bitcoin Futures Trades

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Re: What the hell is (a) bitcoin?

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go birds
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Re: What the hell is (a) bitcoin?

Post by go birds »

that was mesmerizing

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Re: What the hell is (a) bitcoin?

Post by Arthur Dent »

Apparently, part of the reason the transaction fees are so high is that drawing in more speculation volume overloads the network, which despite having energy consumption about the same as all of Denmark (consumption that is entirely wasted on doing useless calculations), can only manage to do a global total of 5-7 transactions per second.

On purely technical grounds, the whole thing is just obviously horrendously bad at functioning as a currency. It sustains itself through self-reinforcing hype and (partially rational) speculation.

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Re: What the hell is (a) bitcoin?

Post by Michael »

There was an attempt to fix the transaction times, but it was shot down. It was a highly technical solution.

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Re: What the hell is (a) bitcoin?

Post by Arthur Dent »

Michael wrote:There was an attempt to fix the transaction times, but it was shot down. It was a highly technical solution.
Looking at that, it doesn't seem to solve the problem at all. After a hard transition (everyone in the network must upgrade), they get a 4x improvement, so 20-28 transactions per second? That's still pathetic, and network capacity apparently makes it difficult to do a more radical increase. They propose layering other "lightning" networks on top of the blockchain but there's absolutely nothing special about these. They would just be a ledger maintained by a centralized trusted provider, getting rid of which is supposed to be the whole point of these cryptocurrencies. Trusted ledgers is how terrible, awful, no good, old fashioned bank transactions work.

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Re: What the hell is (a) bitcoin?

Post by Michael »

You're right. I was thinking about Bitcoin XT which is similar, but would have been more effective. There was quite a bit a news about it a few years ago.

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Re: What the hell is (a) bitcoin?

Post by Arthur Dent »

Michael wrote:You're right. I was thinking about Bitcoin XT which is similar, but would have been more effective. There was quite a bit a news about it a few years ago.
From what I can tell, that proposal is more radical but not more effective. It just proposes continual increases in the block size limit, but blockchain technology cannot simply scale this variable freely. Larger blocks increase hardware requirements and propagation delay both of which can enable fraud.

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