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The cryptocurrency bubble is strangling innovation?

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Re: The cryptocurrency bubble is strangling innovation?

#61

Post by api »

viggity wrote: post #33
acdha wrote: post #14

Earlier quoted context omitted.

> One thing has to be noted, while there is a constant parallel drawn with dot com people forget that there was at least 7-8 years head start for a layman to understand "internet". Bitcoin has been around for 8 years so it's not like there hasn't been enough time. The difference is that the internet was easy to explain to people because it had a number of immediately useful applications: you could almost immediately…

Doesn't solve a problem that average american has right now . The key feature of crypto currency (to me) has always been that it can't be easily manipulated by a government. Specifically with bitcoin, were it not so expensive and have such high fees, it could be of real use in countries with hyperinflation and black markets (Venezuela, Zimbabwe, etc). Hopefully bitcoin and the myriad of alt-coins can fill the gap. On…

But it can absolutely be easily manipulated by a government. Governments have the resources to pump/dump coins, buy huge amounts of mining hardware, etc. Even a smaller nation state could, if it wanted to waste the money, launch a 51% attack against Bitcoin or any other cryptocurrency by just buying enough mining hardware. Beyond direct manipulation you have the ability of competent intelligence agencies to execute mass cyber attacks. "Code as law" is pretty dangerous when code is so vulnerable.

Other well-heeled organizations can do these things as well: corporations, hedge funds, organized crime, ...

People seem to think that currency manipulation and other financial games were invented in the 20th century with modern fiat currency. The price of gold absolutely was manipulated in the past in a variety of ways: secret hoarding, spoofing reserves, false transactions, etc. Every currency or medium of exchange has been manipulated.

In many ways central banking and fiat currency was invented to defend against many types of market manipulation by non-state or foreign state actors (as well as against undesirable emergent behaviors in markets). I once read someone talking about US vs. China trade and Chinese currency manipulation state that for the US to abolish the Fed would amount to "unilateral disarmament." We would suddenly have no coherent way to defend ourselves against other nations armed with the ability to manipulate their own currencies (and ours!).

Re: The cryptocurrency bubble is strangling innovation?

#62

Post by prostoalex »

thisisit wrote: post #6

> It remains an open question whether even much, much lower fees would be viable in the long run. The problem is not fees rather usability. If today I speak to a layman about bitcoin he is confused. It doesn't help that people start talking about hardware wallets, multisigs, Segwit etc. Most of those guys find that using cryptocurrency is a pain and want to stick to real money. Yes, it doesn't stop them from speculat…

It did not seem that the road to adoption was as obstacle-heavy, when Silk Road was around, with its customer, I'm guessing, coming mainly from the mainstream

https://en.wikipedia.org/wiki/Silk_Road_(marketplace)#Sales

"From February 6, 2011 to July 23, 2013 there were approximately 1,229,465 transactions completed on the site. The total revenue generated from these sales was 9,519,664 Bitcoins, and the total commissions collected by Silk Road from the sales amounted to 614,305 Bitcoins. These figures are equivalent to roughly $1.2 billion in revenue and $79.8 million in commissions, at current Bitcoin exchange rates..."

Granted, the number of buyers was at somewhat measly 146,946.

The "store of value" and "investment opportunity" spiel only started when transaction fees became too onerous for everyday usage.

Re: The cryptocurrency bubble is strangling innovation?

#63

Post by leroy_masochist »

qaq wrote: post #50
leroy_masochist wrote: post #39

> Look at the dot-com boom. A lot of people lost a whole lot of paper money, but it brought us a cheap worldwide fiber backbone and companies like Amazon and Google. If the point the author is trying to make is that Amazon and Google were made possible by the dotcom boom, and that the collapse of the dotcom bubble was part of the price we as a society had to pay to have the services provided these companies, that's a…

Google bought a ton of dark fiber for cents on the dollar. So the bust did enable Google to develop much more rapidly and with much smaller $ investment.

Yes, and the boom times of 1998-2000 inspired a bunch of young people to spend more time learning about tech, and some of them grew up to be programmers who added significant value at Google and Amazon. There are lots of these kinds of secondary effects and many of them were significant, such as your fiber example, which is a good one.

The point though, is that both Google and Amazon were able to get themselves off of the ground without taking advantage of all the stupid money that flooded the Valley in the 1998-2000 time period, quite to the contrary of the argument I quoted in the parent comment.

Re: The cryptocurrency bubble is strangling innovation?

#64

Post by [deleted] »

fortythirteen wrote: post #51
cantrip wrote: post #46

Earlier quoted context omitted.

You don't generally hold onto Bitcoin when you take it as payment, you sell it immediately, so no, Microsoft was not "investing" in Bitcoin by taking it as a payment for their products and they're not shorting Bitcoin either. The volatility is what makes it untenable as payment, as you can't sell it fast enough to ensure that you get the same exchange rate you gave to the customer.

> The volatility is what makes it untenable as payment, as you can't sell it fast enough to ensure that you get the same exchange rate you gave to the customer. Absolutely false. Speculation has driven the value of bitcoin so high that the average transaction fee, at the time of writing this, is about $31. Buying a $59.99 game for Xbox One will cost you $90 in Bitcoin. That is an individual hash, that must be consoli…

[deleted]

Re: The cryptocurrency bubble is strangling innovation?

#65

Post by rlanday »

debaserab2 wrote: post #57
fortythirteen wrote: post #51

Earlier quoted context omitted.

> The volatility is what makes it untenable as payment, as you can't sell it fast enough to ensure that you get the same exchange rate you gave to the customer. Absolutely false. Speculation has driven the value of bitcoin so high that the average transaction fee, at the time of writing this, is about $31. Buying a $59.99 game for Xbox One will cost you $90 in Bitcoin. That is an individual hash, that must be consoli…

I have a question as a relatively uninformed spectator: where do these transaction fees go and why do they have to be so high?

A miner that successfully mines a block collects all the transaction fees for transactions in the block. They are high right now because many people want to send transactions, but blocks are capped at 1 MB, limiting the number of transactions that can fit into one block. Blocks are produced approximately once every ten minutes, so a transaction that contains a fee that’s too low will constantly get passed over in favor of higher-fee transactions.

Re: The cryptocurrency bubble is strangling innovation?

#66

Post by justincormack »

Goladus wrote: post #58
cantrip wrote: post #27

Earlier quoted context omitted.

I don't think it's weird to focus on Ethereum as, as the article correctly states, most new currencies are not a separate chain themselves but are simply tokens on the Ethereum blockchain. Ethereum is also the only blockchain with a real developer community, and the article focuses on building applications. Microsoft didn't abandon Bitcoin because it was overpriced, they abandoned it because it was volatile. One coul…

> One could argue that a blockchain's only real world purpose is as a shared database, just as http's only real world purpose is the transfer of data between computers. So far it seems like the only thing anyone actually makes based on this shared database are new mini-currencies.

Again, useful applications being crowded out by speculative ones. Why bother making anything if you can apparently trivially print money. Until the bubble ends.

Re: The cryptocurrency bubble is strangling innovation?

#67

Post by fortythirteen »

debaserab2 wrote: post #57
fortythirteen wrote: post #51

Earlier quoted context omitted.

> The volatility is what makes it untenable as payment, as you can't sell it fast enough to ensure that you get the same exchange rate you gave to the customer. Absolutely false. Speculation has driven the value of bitcoin so high that the average transaction fee, at the time of writing this, is about $31. Buying a $59.99 game for Xbox One will cost you $90 in Bitcoin. That is an individual hash, that must be consoli…

I have a question as a relatively uninformed spectator: where do these transaction fees go and why do they have to be so high?

> where do these transaction fees go and why do they have to be so high? They go to the miners who verify transactions. They're high because of the combination of the overall ridiculous price of bitcoin (since the miner gets paid in bitcoin) and the amount of computing power required to successfully mine. The latter means that miners are only willing to verify if the return over time will turn them a profit on the cost of hardware.

Re: The cryptocurrency bubble is strangling innovation?

#70

Post by arisAlexis »

fortythirteen wrote: post #36
cantrip wrote: post #27

Earlier quoted context omitted.

I don't think it's weird to focus on Ethereum as, as the article correctly states, most new currencies are not a separate chain themselves but are simply tokens on the Ethereum blockchain. Ethereum is also the only blockchain with a real developer community, and the article focuses on building applications. Microsoft didn't abandon Bitcoin because it was overpriced, they abandoned it because it was volatile. One coul…

> Microsoft didn't abandon Bitcoin because it was overpriced, they abandoned it because it was volatile. It was "volatile" when they adopted it. It's now volatile and overpriced. If MS thought that Bitcoin was a good investment, volatile or not, they would have stuck with it. "Volatile" is acting as an excuse for their real sentiment, that it's time to short Bitcoin.

please tell us the real reasons. microsoft to short bitcoin. do you know gossip about VPs too?
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