Bitcoin's Shared Ledger Technology: Money's New Operating System • Hacker News Board

Re: Bitcoin's Shared Ledger Technology: Money's New Operating System

#61

Post by TylerE » Sun, Sep 13, 2015, 5:53 AM UTC

Meekro wrote: post #60

vectorpush wrote: post #41

Bitcoin and blockchain enthusiasts have been claiming that bitcoin (or etherum) is going to take the world by storm any day now, yet all I ever see anywhere are big claims (revolutionizing payments, disrupting remittance, ending wars, freeing the people, destroying the banks etc, ad nauseam) with very little substance and lots of scams, frauds and dead-end ventures. Dark markets, internet gambling and a handful of ot…

You're not an idiot -- the things you described are very real. I've heard about tons of scams and quite a few dead-end ventures. The 21inc thing sounds pretty bizarre to me as well, but there is more going on in the bitcoin world than just that. I'm involved with a VPS hosting company called ChunkHost, and we've accepted bitcoin for many years. We're not criminals, and we don't tolerate criminals on our network, and…

There is tons of anecdotal evidence that Purse.io exists primarily as a way to monetize stolen credit cards.

Re: Bitcoin's Shared Ledger Technology: Money's New Operating System

#62

Post by TylerE » Sun, Sep 13, 2015, 5:57 AM UTC

brighton36 wrote: post #23

TheDong wrote: post #19

Earlier quoted context omitted.

> only charge a tiny margin over the costs of bandwidth, energy and storage. The margin charged in terms of energy is massive . The bitcoin network can't handle many TPS because each transaction needs significant computational work to secure it. On the other hand, if I trust my database I can do the tiny work to write it, make sure I've got consensus among my DB nodes it's written, and be done with it. I'd say that b…

That's not even a little true. The transaction requires little/no work whatsoever. The miners require precisely as much work as there is speculative value for bitcoin. If Bitcoin were worth $10,000 per bitcoin - the energy burned per transaction would be 40 times higher. But that is not to say that the transaction itself required this expense. Mt Gox had as much to do with bitcoin as it did to do with http. I wouldn'…

That's not really true at all. Right now the cost of mining is MASSIVELY subsidized by the block reward, currently to the tune of just under $6k per block. Without the subsidy the actual cost of a transaction would be approximately $4...and it's only that cheap if every block is full.

Re: Bitcoin's Shared Ledger Technology: Money's New Operating System

#63

Post by 2drew3 » Sun, Sep 13, 2015, 6:11 AM UTC

TylerE wrote: post #61

Meekro wrote: post #60

Earlier quoted context omitted.

You're not an idiot -- the things you described are very real. I've heard about tons of scams and quite a few dead-end ventures. The 21inc thing sounds pretty bizarre to me as well, but there is more going on in the bitcoin world than just that. I'm involved with a VPS hosting company called ChunkHost, and we've accepted bitcoin for many years. We're not criminals, and we don't tolerate criminals on our network, and…

There is tons of anecdotal evidence that Purse.io exists primarily as a way to monetize stolen credit cards.

More like once out of 30k+ transactions. PayPal, AirBnB, and Raise all faced similar challenges.

Re: Bitcoin's Shared Ledger Technology: Money's New Operating System

#64

Post by wpietri » Sun, Sep 13, 2015, 6:11 AM UTC

Meekro wrote: post #60

vectorpush wrote: post #41

Bitcoin and blockchain enthusiasts have been claiming that bitcoin (or etherum) is going to take the world by storm any day now, yet all I ever see anywhere are big claims (revolutionizing payments, disrupting remittance, ending wars, freeing the people, destroying the banks etc, ad nauseam) with very little substance and lots of scams, frauds and dead-end ventures. Dark markets, internet gambling and a handful of ot…

You're not an idiot -- the things you described are very real. I've heard about tons of scams and quite a few dead-end ventures. The 21inc thing sounds pretty bizarre to me as well, but there is more going on in the bitcoin world than just that. I'm involved with a VPS hosting company called ChunkHost, and we've accepted bitcoin for many years. We're not criminals, and we don't tolerate criminals on our network, and…

Let me see if I can give some useful goalposts, ones commonly used with other technologies. Consider the classic technology adoption curve, which is the focus of industry classic "Crossing the Chasm":

https://en.wikipedia.org/wiki/Technology_adoption_lifecycle

Oversimplifying, the Innovators, a few percent of a market, will buy anything just because it's cool. An obvious example there is Google Glass. Or a personal example, I just bought an IR camera for my phone. [1] I have absolutely no practical use for this, but that stopped me for about three seconds before I clicked "buy".

The next group is the Early Adopters. They buy in because they have a significant need not addressed by existing technology and are willing to work hard and/or pay lots to solve the problem. Then after that, we have the Early Majority, the first half of mainstream purchasers.

Now the supposed market of Bitcoin is "people spending or transferring money", which is a large fraction of humanity. So my goalpost would be getting out of the 2.5% of the market that is Innovators and well into the Early Adopters. Let's say 10% of the total market. (I'd even be happy with 10% of some major submarket, but since the claim is that Bitcoin will change everything, I'm glad to run with 10% of everything.)

From that standard, the fact that somebody bought a pizza is not so interesting. Ditto your hosting company; what you folks take in via Bitcoin in a year is about 0.00015% what AWS takes in in fiat dollars, or about 47 seconds of their annual revenue.

Ditto the things you mention with purse.io. Either they are subsidizing that 20% Amazon discount or there are hidden fees; Amazon makes under 10% on what they sell. As we learned in Bubble 1.0, you can't evaluate a business by the amazing deals they are using to acquire customers.

My prediction is that Bitcoin will never get close to the goalpost of 10% of the market, because nobody has found a way to solve a significant problem. My current belief that Bitcoin is Segway for the wallet: a really cool technology that almost nobody actually needs.

[1] http://www.flir.com/flirone/display/?id=69324

Re: Bitcoin's Shared Ledger Technology: Money's New Operating System

#65

Post by Jasper_ » Sun, Sep 13, 2015, 6:30 AM UTC

natrius wrote: post #29

TheDong wrote: post #18

Earlier quoted context omitted.

If your "blockchain" doesn't have a proof-of-work beyond trusted people, that's hardly different than a company publishing their database full of signed transactions. I'm aware that 10 minutes is a configurable number, but there's a reason it's as high as it is. I'm also familiar with Ethereum, and I still don't see it as better than a company-run database for anything like uber/airbnb/etc with a central company behi…

> I'm also familiar with Ethereum, and I still don't see it as better than a company-run database for anything like uber/airbnb/etc with a central company behind it. It's better because no one is taking a cut off of the transactions that the network enables. No one has to approve a new application that uses the network, so every application can build on top of the network. The people own the network, not companies. T…

That's a nice pipe dream. Unfortunately, it's not how Bitcoin has played out in the real world. The Bitcoin network has unfortunately not been owned by the people, but instead dominated by Chinese miners with ASICs. The current low-ball estimate based on public numbers is that Chinese miners account for ~70% of the hashrate -- see https://blockchain.info/pools

As the database gets larger and larger, less and less people can afford the disk space, bandwidth, and electricity, and they will be pushed out by people who can. The current scalability of Bitcoin, with its absolutely miniscule userbase, and incredibly high miner count, can barely scrape past 3 transactions per second. Attempts at trying to fix this have absolutely fractured the community. See BIP101 / BitcoinXT and the resulting blowout, especially on the /r/bitcoin subreddit.

The security of Bitcoin is abysmal. There are major mining pools that don't even bother to validate the incoming transactions, since validating was slower than not validating, and more blocks means more money -- https://bitcoin.org/en/alert/2015-07-04-spv-mining

Oh, how are these BTC miners getting money? BitPay's statistics say that $76 million, a disproportionate majority of their payouts, go to miners: http://d.ibtimes.co.uk/en/full/1433561/bitcoin-merchants-mai...

So Bitcoin seems to be a vehicle for Chinese BTC miners to trade cheap electricity for VC money. Up until everything bursts, at least.

It's also worth mentioning that if anybody was able to get these miners to collude, they could completely crash it if they wanted to. Bitcoin's security is largely based on no one entity having a majority of the network's power.

Etherum has all of the same problems and none of the solutions. The official FAQ even says that we're going to see a tilted hashrate arms race ("AMD GPUs will be 'faster' than similarly priced NVIDIA GPUs") -- https://forum.ethereum.org/discussion/197/how-to-help-secure...

Re: Bitcoin's Shared Ledger Technology: Money's New Operating System

#66

Post by 2drew3 » Sun, Sep 13, 2015, 6:33 AM UTC

wpietri wrote: post #64

Meekro wrote: post #60

Earlier quoted context omitted.

You're not an idiot -- the things you described are very real. I've heard about tons of scams and quite a few dead-end ventures. The 21inc thing sounds pretty bizarre to me as well, but there is more going on in the bitcoin world than just that. I'm involved with a VPS hosting company called ChunkHost, and we've accepted bitcoin for many years. We're not criminals, and we don't tolerate criminals on our network, and…

Let me see if I can give some useful goalposts, ones commonly used with other technologies. Consider the classic technology adoption curve, which is the focus of industry classic "Crossing the Chasm": https://en.wikipedia.org/wiki/Technology_adoption_lifecycle Oversimplifying, the Innovators, a few percent of a market, will buy anything just because it's cool. An obvious example there is Google Glass. Or a personal e…

Like most disruptive technologies, it's not quite clear why Bitcoin / blockchain are better than incumbents, namely credit cards / centralized databases.

At Purse, we use blockchain escrows to unlock value from Amazon gift card balances. This was previously impossible (gift card exchanges can't transact Amazon), and the liquidity premium powers the discount. Escrows and other complex transactions are difficult using traditional payment systems, and we believe that they can be applied more broadly to many other markets.

Re: Bitcoin's Shared Ledger Technology: Money's New Operating System

#67

Post by Jasper_ » Sun, Sep 13, 2015, 6:35 AM UTC

2drew3 wrote: post #63

TylerE wrote: post #61

Earlier quoted context omitted.

There is tons of anecdotal evidence that Purse.io exists primarily as a way to monetize stolen credit cards.

More like once out of 30k+ transactions. PayPal, AirBnB, and Raise all faced similar challenges.

purse.io's UI emphasizes the discounts you can get, by having a slider from 0% - 50% when you put in your wishlist. They claim they're just matchmaking with a buyer really interested in Bitcoin, but really, there's no way that 50% discounts on Amazon would ever happen, unless it's money laundering or CC fraud. And even then, 20% is really skeptical.

FoldApp seems to just be subsidizing purchases with VC money for adoption. It doesn't seem to be going well.

See also: Flooz, of which 20% of their transactions were fraudulent: https://en.wikipedia.org/wiki/Flooz.com

Re: Bitcoin's Shared Ledger Technology: Money's New Operating System

#68

Post by scintill76 » Sun, Sep 13, 2015, 6:43 AM UTC

2drew3 wrote: post #63

TylerE wrote: post #61

Earlier quoted context omitted.

There is tons of anecdotal evidence that Purse.io exists primarily as a way to monetize stolen credit cards.

More like once out of 30k+ transactions. PayPal, AirBnB, and Raise all faced similar challenges.

German police searched a house and seized stuff for months in one case[1], Amazon reversed gift credit in another[2].

Obviously this is no proof that fraud is rampant, but I still lean toward thinking fraud is too likely for me to want to be involved with using purse.io, especially if I wanted a good deal (big discount = more likely it's a carder cashing out a stolen card.) If nothing else these stories show there's a small chance you might get burned pretty badly. Has anything significantly changed to remove or lessen the risk?

[1] https://www.reddit.com/r/Bitcoin/comments/2po40d/since_my_ho... [2] https://www.reddit.com/r/Bitcoin/comments/2eqcnv/do_not_purc...

Re: Bitcoin's Shared Ledger Technology: Money's New Operating System

#69

Post by 2drew3 » Sun, Sep 13, 2015, 6:49 AM UTC

Jasper_ wrote: post #67

2drew3 wrote: post #63

Earlier quoted context omitted.

More like once out of 30k+ transactions. PayPal, AirBnB, and Raise all faced similar challenges.

purse.io's UI emphasizes the discounts you can get, by having a slider from 0% - 50% when you put in your wishlist. They claim they're just matchmaking with a buyer really interested in Bitcoin, but really, there's no way that 50% discounts on Amazon would ever happen, unless it's money laundering or CC fraud. And even then, 20% is really skeptical. FoldApp seems to just be subsidizing purchases with VC money for ado…

So the UI allows users to set a discount rate, similar to the way you set a limit order on etrade or Name Your Price on Priceline. I can place an order to buy AAPL for $100 or bid to stay in a 5 star hotel for $10. Doesn't mean they will get filled.

Re: Bitcoin's Shared Ledger Technology: Money's New Operating System

#70

Post by Jasper_ » Sun, Sep 13, 2015, 6:53 AM UTC

2drew3 wrote: post #69

Jasper_ wrote: post #67

Earlier quoted context omitted.

purse.io's UI emphasizes the discounts you can get, by having a slider from 0% - 50% when you put in your wishlist. They claim they're just matchmaking with a buyer really interested in Bitcoin, but really, there's no way that 50% discounts on Amazon would ever happen, unless it's money laundering or CC fraud. And even then, 20% is really skeptical. FoldApp seems to just be subsidizing purchases with VC money for ado…

So the UI allows users to set a discount rate, similar to the way you set a limit order on etrade or Name Your Price on Priceline. I can place an order to buy AAPL for $100 or bid to stay in a 5 star hotel for $10. Doesn't mean they will get filled.

But they will be filled. By people who are very eager to cash out of some stolen credit cards or need some dirty money in someone else's hands. And, bonus points, in a way that makes the transaction irreversible.