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China wants an orderly exit from Bitcoin mining

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Re: China wants an orderly exit from Bitcoin mining

#51

Post by olalonde »

vec wrote: post #48
baddox wrote: post #24

Earlier quoted context omitted.

I have no problem with valid criticism of cryptocurrency, and especially of its fanatics, but I’d be curious to hear you back up your claim that at best it’s a zero-sum game. That seems to me to be clearly incorrect.

Person A mines 1 BTC. Since a Bitcoin has no intrinsic value (as distinguished from market value), Person A has not created any value. They have created $0 worth of goods. Person A sells their coin to Person B for $1,000. A is $1,000 richer and B is $1,000 poorer. B sells the bitcoin to C for $2,000. A is still $1k richer, B is $1k richer, and C is $2k in the hole. C sells to D for $3k. A, B, and C are all $1k richer…

Some see enormous value in an mathematically defined, uncensorable, permissionless, trustless, programmable, digital currency.

Re: China wants an orderly exit from Bitcoin mining

#52

Post by littlestymaar »

ThatPlayer wrote: post #22
joe_the_user wrote: post #18

As to mining farms owned by smaller players, especially those in the mountainous areas of Sichuan and Yunnan provinces, simply locating the miners is a near impossible task. A growing number of private owners of hydropower plants in the two regions have begun to operate mining machines themselves as the price of bitcoin has surged, Du Jun, founder of Node Capital, a Beijing-based venture-capital firm focusing on the…

Miners find a block and distribute them to the P2P Bitcoin network. Blocks do not carry IP addresses, and everyone running a Bitcoin node contributes to sharing blocks, so you'd have a hard time finding out who is mining just from the IP. If the Chinese miners are using a public mining pool, you may be able to see who is connected to the pool. If they're pool mining, they do not even have to run a Bitcoin node in the…

> Miners find a block and distribute them to the P2P Bitcoin network. Blocks do not carry IP addresses

You just need to become part of the p2p network by yourself, and log the IP of people you communicate with …

Re: China wants an orderly exit from Bitcoin mining

#53

Post by makomk »

vadimberman wrote: post #3
TazeTSchnitzel wrote: post #2

I am personally of the opinion that China swiftly killing off its cryptocurrency mining industry overnight would be to the great benefit of humanity. The sheer amount of electricity it wastes is an environmental disaster.

Let alone the psychological damage to the society that any kind of speculation and a flood of "get-rich-fast" schemes incur. Strict measures are not always bad. If China did not handle the SARS epidemic years ago the way they did, things could have been more similar to the Ebola epidemic.

The likely reason Bitcoin has been taking off in China is because the available traditional investing options for people there are terrible as a result of government meddling. In particular, the whole country's economy is in the middle of a terrifying debt-fuelled bubble in which bank lending has effectively become an arm of the state, leading to a rather terrifying debt-to-GDP ratio and a banking system that may well collapse the moment the growth pauses. Combine that with increasingly strict capital controls that restrict the ability of most people to invest their money outside of China and a lack of trust in the government not to seize less favoured people's businesses for the benefit of insiders, and you have a strong recipe for Bitcoin popularity.

Re: China wants an orderly exit from Bitcoin mining

#54

Post by baddox »

Synaesthesia wrote: post #46
baddox wrote: post #24

Earlier quoted context omitted.

I have no problem with valid criticism of cryptocurrency, and especially of its fanatics, but I’d be curious to hear you back up your claim that at best it’s a zero-sum game. That seems to me to be clearly incorrect.

Of course it’s a zero sum game, I’d like to hear how it’s not. It’s not creating any value, any gains are at the expense of someone else.

Who are they at the expensive of?

Re: China wants an orderly exit from Bitcoin mining

#55

Post by littlestymaar »

SolarNet wrote: post #37
joe_the_user wrote: post #18

As to mining farms owned by smaller players, especially those in the mountainous areas of Sichuan and Yunnan provinces, simply locating the miners is a near impossible task. A growing number of private owners of hydropower plants in the two regions have begun to operate mining machines themselves as the price of bitcoin has surged, Du Jun, founder of Node Capital, a Beijing-based venture-capital firm focusing on the…

That's a naive view of networking. The physical location of an IP address can be very difficult to track down (and of course IP addresses aren't part of the bitcoin protocol). Bitcoin is also super low bandwidth, and it would be very easy to build a custom proxy to circumvent the firewall. We are effectively talking about 3 megabytes (or even less) every 10 minutes (5 kBps). It could also be obfuscated with stengraph…

> That's a naive view of networking. The physical location of an IP address can be very difficult to track down

Unless you are the Internet provider … And I do believe that Internet providers in China would answer to Chinese government requests without troubles (I doubt they would sue the government like they would in the US).

Re: China wants an orderly exit from Bitcoin mining

#56

Post by oxide »

olalonde wrote: post #51
vec wrote: post #48

Earlier quoted context omitted.

Person A mines 1 BTC. Since a Bitcoin has no intrinsic value (as distinguished from market value), Person A has not created any value. They have created $0 worth of goods. Person A sells their coin to Person B for $1,000. A is $1,000 richer and B is $1,000 poorer. B sells the bitcoin to C for $2,000. A is still $1k richer, B is $1k richer, and C is $2k in the hole. C sells to D for $3k. A, B, and C are all $1k richer…

Some see enormous value in an mathematically defined, uncensorable, permissionless, trustless, programmable, digital currency.

and rightly so! the boom of ICO's is proof of concept if I've ever seen it, even though almost every single one is a scam as far as I've seen. I've had to discourage friends from investing in obvious scam ICO's, unfortunately. And my mother who is the most gullible sucker ever.

It's pretty strange to see people so consumed with it. It reminds me of beanie babies, and my horrible step-grandmother who would send me in to buy them once she had hit her limit. She was an awful speculator and probably has a worthless collection today for all the money she spent on ebay back then. She'd drive to Vegas to buy them, neighboring towns, all over the place. Totally consumed by speculation gambling. It sickens a person to see someone so...lost in that temptation. I'm not sure how else to put it.

Re: China wants an orderly exit from Bitcoin mining

#57

Post by baddox »

vec wrote: post #48
baddox wrote: post #24

Earlier quoted context omitted.

I have no problem with valid criticism of cryptocurrency, and especially of its fanatics, but I’d be curious to hear you back up your claim that at best it’s a zero-sum game. That seems to me to be clearly incorrect.

Person A mines 1 BTC. Since a Bitcoin has no intrinsic value (as distinguished from market value), Person A has not created any value. They have created $0 worth of goods. Person A sells their coin to Person B for $1,000. A is $1,000 richer and B is $1,000 poorer. B sells the bitcoin to C for $2,000. A is still $1k richer, B is $1k richer, and C is $2k in the hole. C sells to D for $3k. A, B, and C are all $1k richer…

The proof of work needs to be “useless” in order for it to protect the blockchain (there are proposals that dispute this, and I won’t claim to be an expert, but that’s the fundamental idea behind Bitcoin).

When you say that the net value is negative even if the network itself has some positive benefit, what is the negative component there? The only negative component of all that electricity usage is externalities, which apply equally to each unit of energy regardless of what it is used for. Pricing externalities into the cost of electricity is obviously something I approve of, but that’s a separate issue, and I doubt the externalities of electricity usage are anywhere near the magnitude of the positive impact of bitcoin.

Re: China wants an orderly exit from Bitcoin mining

#58

Post by olalonde »

LV-426 wrote: post #49
olalonde wrote: post #27

Earlier quoted context omitted.

> In a pyramid scheme [Bitcoin], an organization compels individuals who wish to join to make a payment [purchase Bitcoin]. In exchange, the organization promises its new members a share of the money taken from every additional member that they recruit [to the moon]. There is no such thing. In that respect, Bitcoin is no different from real estate, stock or gold investors which do tend to sometimes promote their inve…

> early adopters, which take on more risk I don't want to get into the debate on the definition of a pyramid scheme, but what was anyone risking by mining bitcoins for essentially nothing in 2009-2010?

Of course, many of the early adopters got very lucky while taking almost no risk. This happens with gold and oil too. However, those that chose to hodl started taking real risks as soon as Bitcoin hit 1$. Bitcoin hodlers today are obviously taking substantial risk as the price could drop massively at any moment.

Re: China wants an orderly exit from Bitcoin mining

#59

Post by walrus1066 »

llamataboot wrote: post #19
isoprophlex wrote: post #11

Earlier quoted context omitted.

Can't agree more. Also I am getting pretty sick of the impact crypto trading is having on office conversations. All I hear these days are inane conversations about getting rich quick. Everyone is an expert in technical analysis these days. At best, trading these currencies is a zero-sum game where you take money from others without providing any intrinsic worth to humanity. At worst is a pyramid scheme plain and simp…

Naysayers would point out that trading increases liquidity which ostensibly increases the ability of a market to parlay information into value. But I'd be likely to agree with you. While blockchain technology /does/ have a future and will enable forms of socio-economic organization that were previously impossible, it's not there yet, and at the moment we're mostly passing tulips off to the greater fool.

'at the moment we're mostly passing tulips off to the greater fool.'

At least tulips have some intrinsic value, I.e. They can be quite pretty!

Re: China wants an orderly exit from Bitcoin mining

#60

Post by olalonde »

oxide wrote: post #56
olalonde wrote: post #51

Earlier quoted context omitted.

Some see enormous value in an mathematically defined, uncensorable, permissionless, trustless, programmable, digital currency.

and rightly so! the boom of ICO's is proof of concept if I've ever seen it, even though almost every single one is a scam as far as I've seen. I've had to discourage friends from investing in obvious scam ICO's, unfortunately. And my mother who is the most gullible sucker ever. It's pretty strange to see people so consumed with it. It reminds me of beanie babies, and my horrible step-grandmother who would send me in…

> and rightly so! the boom of ICO's is proof of concept if I've ever seen it, even though almost every single one is a scam as far as I've seen.

Agreed, I've yet to see an ICO that seemed legit.

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