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There are now more than 200k pending Bitcoin transactions

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Re: There are now more than 200k pending Bitcoin transactions

#121
post #105
post #35

You'll notice the entire Bitcoin community has changed tone. It used to be "this is the currency of the future, down with cash/Visa!" but now you hear "Bitcoin is not a currency, it's a store of value". The wild price swings, slow transactions, high fees, and loq merchant acceptance make it complete garbage as a currency. But as a store of value, none of those arguments apply. It only has to compete with gold bars, w…

Gold bars don't require the electricity output of a small country to keep running. Although I suppose digging them up also has serious environmental consequences.

Mining gold is extremely expensive. And more environmental issues than just the waste of power. Gold processing uses cyanides and refining companies have in the past just dumped them anywhere.

Also, the effort and energy goes into building and maintaining vaults for gold.

Re: There are now more than 200k pending Bitcoin transactions

#122

Does the number of pending transactions impact Bitcoin in any way? If so, what happens if users create large numbers of transactions with low/0 fees attached?

I believe it doesn't. All the miners will just ignore the transactions that don't have a large enough fee attached.

Re: There are now more than 200k pending Bitcoin transactions

#123

Earlier quoted context omitted.

How does the volatility not make it a bad store of value?! Surely by definition that is exactly why it is a bad store of value!

I'm not intimately familiar with BTC prices, but they seem to have lots of high frequency volatility while the low frequency price changes are close to monotonic. If that's the case then it makes sense as a long term store of value.

Yes. The number of bitcoins increases roughly linearly over time and will continue to do so for another few years. At that time, the bitcoin protocol will need to change or there will be no new bitcoins circulating. This leads to almost endless deflation, as long as bitcoin doesn't change from its current structure.

There really is no asset "there" when talking about Bitcoin. Bitcoin acts purely technically and can be traded that way. Unless Bitcoin's structure changes the price will either continue to rise as a trend, or it will crash forever. Long positions and scalpers do great with Bitcoin.

Re: There are now more than 200k pending Bitcoin transactions

#124
post #35

You'll notice the entire Bitcoin community has changed tone. It used to be "this is the currency of the future, down with cash/Visa!" but now you hear "Bitcoin is not a currency, it's a store of value". The wild price swings, slow transactions, high fees, and loq merchant acceptance make it complete garbage as a currency. But as a store of value, none of those arguments apply. It only has to compete with gold bars, w…

How does the volatility not make it a bad store of value?! Surely by definition that is exactly why it is a bad store of value!

"Store of value" here means "investment", but people are trying to keep the veneer of currency definition. And of course it's a highly speculative investment, although whose wild volatility contains a rare spice cherished by asset managers, "high alpha", meaning that it is not related to the broader markets. In musical terms, Bitcoin sings its own song, or dances to its own beat.

To diversify, as modern portfolio theory prescribes, investors seek assets whose prices don't change in relation to other prices, are uncorrelated. In today's world, most markets are highly correlated with each other, they are almost like separate instruments playing in a huge symphony.

But not Bitcoin. Not for now. Bitcoin moves according to bitcoin.

If bitcoin becomes more and more like "digital gold" and loses some of the volatility, however, it will also start to act more and more like physical gold on the world markets. Gold moves as a safe haven asset, and so will Bitcoin, and thereby lose its status as an investment uncorrelated to the broader markets.

If you're involved in trading, you can pretty much be given a single market quote like the S&P or gold, and generally guess the direction and possibly the amount of price changes in many or most other world markets, unless there were events specific to one or another market. Usually if gold went up, for example, the Japanese yen also gained. These relationships change over time, but they are very pronounced. You can ask maybe three questions and generally extrapolate what happened over the entire world except for cases where a local event in India caused its bourse to move independently, or for example a weather event moved an agricultural commodity. Even real estate does not escape the bonds of market correlation.

But... Bitcoin. Without a very large move in other assets, I doubt a well-versed market participant could tell you what happened to Bitcoin without hearing about Bitcoin itself (or maybe Ethereum...). To repeat myself, I believe this will change if BTC becomes established as a "store of value", it will join the symphony, but for that reason it will also lose its great appeal to institutional investors -- its uncorrelated quality, "pure alpha" as one well-known asset manager recently termed it (where alpha is independent returns and beta is benchmarked correlated returns).

So, with its volatility, Bitcoin is maybe being thought of by institutional investors as a kind of extreme spice that can add a bit of diversified risk into their larger stew. Just dab will do ya. But as more dabs are added, the "alpha" quality will wear off and it will begin to move more and more like plain old gold. Maybe less lustrous...

So maybe in investment terms as well, Bitcoin might have a scaling problem.

Re: There are now more than 200k pending Bitcoin transactions

#125
post #76

Earlier quoted context omitted.

Monero now supports multi address.

No, you are wrong, Monero has merged in MultiSig which is something unlike what it sounds, it basically means you can now make a wallet where several people hold a piece of a key and a majority agreement is required to spend.

https://github.com/monero-project/monero/pull/2056 Are you sure?

Re: There are now more than 200k pending Bitcoin transactions

#126

Earlier quoted context omitted.

Another consensus argument. There is more of a consensus around bitcoin than other cryptos and you can’t “invent” consensus either.

You need a consensus about what software to run, what it does, what version, and you need the consensus of the community to run nodes and mine. Imagine that a large majority of miners bet the wrong way on Bitcoin at the CME and go in hoc up to their eyeballs short BTC. Let's say 80% of the BTC mining community is short big and they need BTC for delivery now. As a general proposition, that community could reach a cons…

I see your point, theoretically majority miners could manipulate BTC supply. The major difference is that with fiat currency control of the money supply is centralized, while with Bitcoin it is distributed.

In addition, at the point that miners reached consensus for new BTC rules, arguably it would no longer be BTC.

Bitcoin’s qualities today make it more like gold than fiat, but in reality it’s neither. “Digital gold” is just an analogy.

Re: There are now more than 200k pending Bitcoin transactions

#127

Earlier quoted context omitted.

Because your drug dealer only accepts bitcoin? Does anyone else actually use it? Other than as a get rich quick scheme?

Craigslist now allows people to mark their posts as crypto-friendly. Anyone who accepts Bitcoin runs into the problem where others can know their balance by looking up the address (and thus could be at risk for theft/mugging). If people want to keep their balances private and not share their transaction history (or later transactions), they should use a coin that's private by default such as Monero. Additionally, Mon…

> Additionally, Monero has a dynamic blocksize, so as usage increases it won't experience the transaction backlog that Bitcoin faces.

I am kind of confused with the block size thing. Sure, increasing the size means more transactions can be added into the problem. Bu, as far as I know bigger block size has it's own share of problems - block propagation is slower which can cause double spending and frequent orphans means the blockchain has to keep re-organising frequently too.

Re: There are now more than 200k pending Bitcoin transactions

#128

Earlier quoted context omitted.

And then later on transfer it to your main wallet and pay another fee, and trust that whomever your first address still isn't paying attention to it, or hope they didn't get their coins from a tainted source?

It’s all the same wallet just a different address, no transfer needed.

That is how it works for me.

Re: There are now more than 200k pending Bitcoin transactions

#129

Earlier quoted context omitted.

No, you are wrong, Monero has merged in MultiSig which is something unlike what it sounds, it basically means you can now make a wallet where several people hold a piece of a key and a majority agreement is required to spend.

https://github.com/monero-project/monero/pull/2056 Are you sure?

Subaddresses have not been integrated into a tagged release yet. We can discuss hypotheticals though, if you prefer.

Re: There are now more than 200k pending Bitcoin transactions

#130
post #35

You'll notice the entire Bitcoin community has changed tone. It used to be "this is the currency of the future, down with cash/Visa!" but now you hear "Bitcoin is not a currency, it's a store of value". The wild price swings, slow transactions, high fees, and loq merchant acceptance make it complete garbage as a currency. But as a store of value, none of those arguments apply. It only has to compete with gold bars, w…

why would it be a (good) store of value? there are countless crytocurrencies. The only reason people think bitcoin is rare is a (blind) leap of faith

It’s the first and one of the simplest with the biggest brand. Those things matter somewhat.
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