Bitcoin Sees Wall Street Warm to Trading Virtual Currency • Hacker News Board

Re: Bitcoin Sees Wall Street Warm to Trading Virtual Currency

#71

Post by sparkie » Tue, May 08, 2018, 12:46 PM UTC

tobiaswk wrote: post #59

lrvick wrote: post #56

Earlier quoted context omitted.

Bitcoin fees were cut in half on a technical level by those that chose to adopt segwit which made transactions roughly half as big. Schnoor signatures can further compress transactions to get even more in a block. If in spite of these innovations blocks end up full, a block size increase is still a tool kept in reserve. In reality BCH did not make any hard won technical innovations and simply reached for the bigger b…

That's my point. BCH did not include some technical innovations like you stated. It simply increased hardcoded block size limit. Simple as that. Even Satoshi himself mentions this in his whitepaper. Other stuff has also changed. The difficulty adjustment (DAA) algorithm has changed to allow are more stable difficulty for miners. Segwit just changed what parts of a transaction counted as size in a block. In reality we…

> Suddenly you can't receive payments if you don't hold any coins yourself.

This is completely untrue. The person who is sending you coins can open up a channel to you and load it with the money they're sending you. Sometimes they won't even need to open a channel because you already have one open, but just with no funds on your end of it. Eventually, exchanges will support loading up channels directly this way such that users never actually need to touch the base Bitcoin layer directly, and will deal purely in LN transactions except when they need to settle disputes.

Re: Bitcoin Sees Wall Street Warm to Trading Virtual Currency

#72

Post by udfalkso » Tue, May 08, 2018, 1:01 PM UTC

sparkie wrote: post #70

blackrock wrote: post #64

How do you guys buy your Bitcoin? What exchange do you use? Do you use Coinbase? Or do you have an offline wallet?

You should always have your own local wallet, and if you use an exchange, you should immediately transfer your funds to your local wallet once you buy them. In terms of exchanges, there are many alternatives to Coinbase which you should look into. Coinbase has some sketchy history like insider trading, blocking Wikileaks without giving reasonable explanation, several times they've turned off their markets when condit…

This is not necessarily good advice.

If someone only wants to buy, say, $100 worth of bitcoin just to get their foot in the door and they don't put in the time to research how to keep their local wallet secure and make sure their computer/phone has not been hacked, they're very likely better off keeping that small amount of bitcoin with a service like Coinbase (and set up 2fa!)

Of course if you play with bigger amounts, and you take the time to educate yourself further about taking custody of your own funds, then I completely agree with what you've said.

Re: Bitcoin Sees Wall Street Warm to Trading Virtual Currency

#73

Post by sparkie » Tue, May 08, 2018, 1:11 PM UTC

roenxi wrote: post #65

mvindahl wrote: post #52

Earlier quoted context omitted.

Well, the whole thing is computer data, stored on media. Already these days it's hard to find hardware to read the 5.25" floppy disks that I stored my code on in the late 1980s, and that's just three decades. Preserving digital data is a continuous effort. And yeah, you can encode your private keys in gold, and I kind of think that everyone should do that, to keep future archaeologists puzzled :-P

If your house burns down, there is a reasonable chance of recovering, eg, gold slag. Not so much chance of recovering the markings that were on that gold before. It is difficult to compare the durability of gold and bitcoin. It does seem plausible, given the length of time we've been using it, that gold's value is completely related to its intrinsic properties and difficulty of mining. Bitcoin can't possibly be value…

There are products like Cryptosteel, which are designed specifically to be able to survive a typical house fire and a variety of other disasters.

Combined with a passphrase, it also means your money can't be stolen if your house is burgled. Gold would be a sitting duck in this case.

Re: Bitcoin Sees Wall Street Warm to Trading Virtual Currency

#74

Post by sparkie » Tue, May 08, 2018, 1:25 PM UTC

brandonsometig wrote: post #61

tobiaswk wrote: post #59

Earlier quoted context omitted.

That's my point. BCH did not include some technical innovations like you stated. It simply increased hardcoded block size limit. Simple as that. Even Satoshi himself mentions this in his whitepaper. Other stuff has also changed. The difficulty adjustment (DAA) algorithm has changed to allow are more stable difficulty for miners. Segwit just changed what parts of a transaction counted as size in a block. In reality we…

You need a second layer(and possibly more on-top of that) for several reasons. How do you expect to propagate and store 1GB blocks (hell, even 100MB blocks) every 10 minutes for the foreseeable future. I understand that the cost of storage and bandwidth has been falling for some time however if you want this system to gain 'mainstream' adaption it cannot everyone's coffee purchases for the rest of time. How do you ke…

Extremely large blocks will require the big miners to all host their servers in a ULLDMA-like facility, because low latency block propagation gives them the advantage. Anyone not in the club will suffer high-latency block propagation which will put them at a disadvantage to the other players who are all hosted in the same physical location. The result is that a single-point of failure in the system will come not from the concentration of mining power, but the concentration of block-propagating servers accounting for the majority of mining power.

There are obvious questions like who will run such facility, who will be able to join, at what price, and under what jurisdiction will it be. If the club is run collectively by the largest miners, they would not be incentivized to let any new competition join the club as it would collectively harm the existing members who have the advantage.

Also, in existing trading markets, we've seen that there's an "outside club" that can pay to host servers in these facilities, but there's still an "inside club", who get the data earlier than the outside club. (https://www.cnbc.com/id/100809395)

Re: Bitcoin Sees Wall Street Warm to Trading Virtual Currency

#75

Post by jacobush » Tue, May 08, 2018, 1:46 PM UTC

DINKDINK wrote: post #29

jonny_eh wrote: post #22

Earlier quoted context omitted.

Has the growth in popularity of BTC affected the perceived value of gold? You seem to be asserting that crypto-coin popularity will save the planet by reducing gold mining, I'm very skeptical.

Advantages of gold over bitcoin: If there's a total internet && computer && electricity apocalypse, a physical barter exchange with gold is more trustless than bitcoin. You can still transact bitcoin but there's trust involved. Advantages of Bitcoin over gold: No trusted third party (If you're moving sizable sums of gold, you're doing it with a trusted third party[TTP)) 99.99226%[1] transaction uptime (Your TTP keep…

There is no latent energy. There is only potential. That energy could have been used to split water, build a city or electrified train near the hydro plant, etc, etc.

Moreover, you fail to account for human nature. I'd be shocked if bribes have not already passed hands, to allow for use of electricity for bitcoin mining near hydro power in remote areas.

Bitcoin as of now, is by volume a mechanism for letting privileged people in China shift their wealth (including Face) from resources in China to somewhere outside of China, with Bitcoin as a proxy. All the while ignoring externalities.

All the other rosy bitcoin has potential and so on, may be true, but please, look at what it is right now and say with a straight face that it's great. What is it, 90% of hash rate in China?

Edit: the bitcoin block reward is irrelevant. When more value is being parked in bitcoin, the transaction fees are going to go up to match the lost rewards. And people will pay.

Re: Bitcoin Sees Wall Street Warm to Trading Virtual Currency

#76

Post by hudon » Tue, May 08, 2018, 1:50 PM UTC

cslarson wrote: post #51

hudon wrote: post #9

This seems like good news for speculators (disclosure: I still hold Bitcoin and worked at a Bitcoin exchange). Having said that, "Wall Street" should be wary of enabling the use of a system that is using more electricity than the country of Switzerland [0] without any productive output. The energy consumption is rapidly rising too. Furthermore, Bitcoin's transaction throughput is dismally low compared to existing pay…

> and "smart contract" systems like Ethereum seems to still not show any productive output aside from scams and severe bugs in wallets and contracts that lose millions of dollars Ethereum is a vibrant, growing ecosystem with many many ambitious projects that have or are nearing release (maker, golem, swarm, bat, you need to do some research because the list is extensive). the above statement is really ridiculous but…

I know of these projects and some of my friends are investing and/or building them. I commend the ambition and really hope they one day turn into something great.

That's beside the point, though. Knowing that Ethereum and Bitcoin consume more energy than Iceland and Switzerland respectively, why don't we turn them off until they're providing actual use? I get that markets need time to figure out if a product is useful and useless things get built all the time, but has that discovery process ever been done at this scale before? For instance, if proof-of-work ends up spending as much electricity as the United States and we still can't use it for anything meaningful, shouldn't we be concerned? I know "turn them off" sounds silly, but you can tax the miners or impose energy consumption caps until there is a smart contract out there that is arguably benefiting society.

If concern for humanity's wellbeing on this earth is a "throw away" concern to you, then maybe you can provide an argument for why everything's going to be OK? Have we fixed global warming and I just didn't get the memo?

Re: Bitcoin Sees Wall Street Warm to Trading Virtual Currency

#77

Post by shelune » Tue, May 08, 2018, 1:59 PM UTC

blackrock wrote: post #64

How do you guys buy your Bitcoin? What exchange do you use? Do you use Coinbase? Or do you have an offline wallet?

There should be plenty of options now. If you're in the US, Coinbase I heard is a good option. If you're in Europe, go for Bitstamp / Kraken.

Honestly if you don't buy a huge amount of Bitcoin, the exchange is just fine, since you can trade readily without much hassle. It's always good to have your own secure offline wallet though.

Re: Bitcoin Sees Wall Street Warm to Trading Virtual Currency

#78

Post by [deleted] » Tue, May 08, 2018, 2:05 PM UTC

mvindahl wrote: post #42

DINKDINK wrote: post #29

Earlier quoted context omitted.

Advantages of gold over bitcoin: If there's a total internet && computer && electricity apocalypse, a physical barter exchange with gold is more trustless than bitcoin. You can still transact bitcoin but there's trust involved. Advantages of Bitcoin over gold: No trusted third party (If you're moving sizable sums of gold, you're doing it with a trusted third party[TTP)) 99.99226%[1] transaction uptime (Your TTP keep…

Further advantages of gold over bitcoin: 1) Has been used for millennia. Bitcoin was invented ten years ago. 2) Accepted as valuable by most of human population. Bitcoin mostly as valuable within internet echo bubbles. 3) Although price fluctuates, it's more stable than that of bitcoin, thus better suited as store of value. 4) Has applications for industrial uses or for jewelry, guaranteeing that your gold retains at…

[deleted]

Re: Bitcoin Sees Wall Street Warm to Trading Virtual Currency

#79

Post by notahacker » Tue, May 08, 2018, 2:22 PM UTC

hndamien wrote: post #40

hudon wrote: post #38

Earlier quoted context omitted.

You’re proposing we fix energy production instead of fixing Bitcoin AFAIU. However, until we know how to do that OR until we have strong use cases for Bitcoin, why not put tight controls on proof-of-work mining to reduce electricity consumption? The “let the market find equilibrium” philosophy is reckless when we’re talking about global environmental concerns IMO.

No, I am suggesting that the only problem here is accounting. If you have a price on carbon, the rest will sort itself out. The lack of this cost being accounted for creates the false equilibrium where we plunder the environment to efficiently meet our needs within an otherwise well designed economic system - that is only made better by Bitcoin.

I think when you have a technology which creates the same amount of power demand as all the people and industry in Peru, and rewards people for locating this demand in the part of the world with the cheapest dirtiest coal fired power and zero energy tax, it's disingenuous in the extreme to pretend it's not a huge part of the problem because hypothetical global carbon taxes might solve wider problems.

Crypto mining is part of the externalities accounting problem, and for that matter one of the chief motivating factors behind crypto currency adoption has the idea of being able to avoid things like carbon taxes and energy quotas...

Re: Bitcoin Sees Wall Street Warm to Trading Virtual Currency

#80

Post by nonbel » Tue, May 08, 2018, 2:23 PM UTC

hudon wrote: post #9

This seems like good news for speculators (disclosure: I still hold Bitcoin and worked at a Bitcoin exchange). Having said that, "Wall Street" should be wary of enabling the use of a system that is using more electricity than the country of Switzerland [0] without any productive output. The energy consumption is rapidly rising too. Furthermore, Bitcoin's transaction throughput is dismally low compared to existing pay…

>"I'm all for "wait and see", but have we ever done that with a technology that is literally using more electricity than a medium sized nation? "

I keep seeing these types of posts every few months and they always seem very poorly thought out and presented. Almost like people did the actual analysis but didnt like the results...

Don't you need to compare this with the energy usage of the industries bitcoin is supposed to replace (banks, money transmitters, credit cards)? Also take into account the environmental benefits of a deflationary currency (people saving instead of buying crap they dont need)?

What about running web pages that are >99% ads, tracking, and other unwanted content by kb? Also blocking all that unwanted content. Did anyone set out before hand to calculate the energy usage of that?

It just seems so disingenuous to be concerned about the energy usage of this one thing (and its only possible because it happens to be particularly easy to estimate, an advantage!) every time I see it.