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The Cryptocurrency Industry Is 'On the Brink of an Implosion', Research Says

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Re: The Cryptocurrency Industry Is 'On the Brink of an Implosion', Research Says

#151

Post by kurtisc »

pkulak wrote: post #22
decentralised wrote: post #16

In general, if you pick the all time high as a starting point for your "research" it's all the way down from there. Bitcoin's daily transaction volume is moving to second layer so the metric used is not very useful. More importantly, and I can't stress this enough, the FX value of a cryptocurrency is not directly related to the project's status (developer activity or security track record, etc) but it is correlated t…

By "second layer" do you mean lightning? Is that project off the ground yet? It's been a while since I paid attention.

It's very close, the only thing left to do is solve the Travelling Salesman problem in polynomial time.

Re: The Cryptocurrency Industry Is 'On the Brink of an Implosion', Research Says

#152

Post by ikfmpwdsoz »

superkuh wrote: post #34
fastball wrote: post #28

Earlier quoted context omitted.

Quite the claim. Obviously you haven't heard of the NSA or the US Military.

For anyone downvoting this I'll expand what he said so you can understand it before reflex downvoting. Nationstate backed fiat currencies require enormous amounts of energy waste in the form of standing armies and other tools of power. Compared to the energy Bitcoin uses to protect itself from attack or fraud this energy is very large.

Armies are to protect people and national interests, not currency. I'd love to here more about your vision of a future without military, though.

Re: The Cryptocurrency Industry Is 'On the Brink of an Implosion', Research Says

#153

Post by Tomte »

hal9000xp wrote: post #149
decentralised wrote: post #23

Earlier quoted context omitted.

I saw a couple of comments today about the price of USDT so I think it's worth while explaining how it works just in case anyone is interested in knowing more. USDT is a pegged-currency. It's often described as a stablecoin but that's not correct because it doesn't have an inbuilt stabilisation mechanism unlike Maker's DAI for instance. The way it works is purely based on well known legal mechanisms that have no cryp…

Thanks for mentioning DAI. I mentioned DAI today in comment and essentially got banned for doing it. In comment I provided link to interview with Olaf on blog.ycombinator.com where MakerDAO was mentioned. So I got banned as spammer in HN for providing link to blog on YC. It tells a lot about the level of average HN reader.

You got flagged, not banned. But if you keep rambling about readers' intelligence, it might yet happen.

Re: The Cryptocurrency Industry Is 'On the Brink of an Implosion', Research Says

#154

Post by epicide »

starbugs wrote: post #133
epicide wrote: post #127

Earlier quoted context omitted.

I never said the energy is lost. I'm saying I, the owner, cannot extract it back out. This is also true for gold-backed currency, but USD, among others, hasn't been backed by gold for some time now. My understanding is that a currency needs to be backed by something intrinsically (seen as) valuable as it goes through the bootstrapping process. Once it is generally accepted, it can stand on its own (at least for a whi…

Well, I think the comparison to gold holds to a high degree. Let's take alts out of the equation for now. Bitcoin requires energy to be mined and transferred. Same is true for gold. I'd say Bitcoin's and gold's intrinsic value hence is energy. The parallels only break down at the point where you could get more gold after you've mined all of it on earth (e.g. by mining an asteroid) while for Bitcoin there's a hard lim…

When I say "getting the energy back out", I do not mean exchanging it for something equivalent. I mean actually doing something with Bitcoin other than exchanging it for something else. It is intentionally a silly proposition.

I think Ethereum is a step in the right direction compared to Bitcoin since it is backed by usable computation, but it is still overpriced.

Re: The Cryptocurrency Industry Is 'On the Brink of an Implosion', Research Says

#155

Post by lawn »

bluedevil2k wrote: post #26

Is there even any reason the world needs more than 1 cryptocurrency? I know there are dozens (hundreds?), but they all effectively do the same thing, right? Allow decentralized currency that can be used for legal and illegal transactions.

You can have different approaches on how to make a cryptocurrency. For example let's look at two, Bitcoin Cash (BCH) and Monero (XMR).

* BCH as a fixed coin limit at 21 million. XMR has a tail emission so the coin supply will always increase

* BCH has a POW backed by ASICs and XMR has been doing all they can to brick existing ASICs and keep the mining on CPUs and GPUs

* BCH prioritizes scaling on-chain aggressively while XMR has more hope on second layer solutions

* BCH allows more script functionality (for example allowing you to store Twitter message, see memo.cash) while XMR disallows all that

* BCH has a transparent blockchain where all transactions can be traced while XMR tries to shield all senders and receivers

Of course other coins can make other trade-offs. Ethereum for example explores the extreme end of scripts on-chain, even having a Turing complete scripting language. Other coins are experimenting with alternatives to mining like proof-of-stake (POS).

Etc...

Re: The Cryptocurrency Industry Is 'On the Brink of an Implosion', Research Says

#156

Post by jessriedel »

CyberDildonics wrote: post #131
jessriedel wrote: post #124

I'm uninformed and bearish on bitcoins, but I find it helpful to look at the historic bitcoin price on a log scale. https://bitcoincharts.com/charts/bitstampUSD#tgSzm1g10zm2g25... Bitcoin has had relative declines this big and lasting this long (late 2013 to mid 2015) only to bounce back later.

That's a very simplistic way to look at it. Before the latest huge price increase, bitcoin had very little real competition. Now it has proved that its artificially crippled capacity of 1MB is an enormous problem and that the limited throughput couldn't even come close to handling the last bubble smoothly.

My comment is intended to speak to cryptocurrency as a whole (the OP topic) rather than Bitcoin specifically relative to other cryptocurrencies. I welcome links to charts that show, e.g., total crypto market cap on a log scale.

Re: The Cryptocurrency Industry Is 'On the Brink of an Implosion', Research Says

#157

Post by mihaifm »

pavlov wrote: post #10

An important harbinger of trouble to come is that the Tether (USDT) coin, which is supposed to be pegged 1:1 to USD, is now trading substantially below $1: https://www.bloomberg.com/news/articles/2018-10-15/dollar-pe... Billions of Tethers were printed seemingly out of thin air and used to purchase Bitcoin. It's part of the foundation of the house of cards that keeps Bitcoin at its current price: "Despite their modes…

Thether's success is based on the large number of cryto to crypto exchanges that need to go light on regulation and avoid working with banks. I don't blame them honestly, I've seen many small exchanges close down or move to other countries because their bank account was closed. Nevertheless, tether is a cancer that needs to go, even if the market would crash because of it. Unfortunately some tether clones (like TrueUSD) already appeared, so it's interesting how things will play out.

Re: The Cryptocurrency Industry Is 'On the Brink of an Implosion', Research Says

#158

Post by kokey »

__Joker wrote: post #109
ramblerouser wrote: post #35

>Echoing sentiments of mainstream economists Yea, Paul Krugman has been saying "Bitcoin is doomed" since 2012. He'll always be wrong because this is all politically motivated. The banking and political establishment are scared shitless by alternative currencies, crypto or otherwise. Google the "Liberty Dollar". Mouth pieces for the financial industry like Bloomberg will attack alternatives to the petrodollar no matte…

I am not sure Paul Krugman is scared or politically motivated. One of the strongest argument Paul Krugman makes against bitcoin is about trust. Like, he says dollar has value because US government backs it and you can pay taxes with it. Basically, he is questioning can bitcoin gain that level of trust among its users to be successful. Not the current level of some transaction around dark markets. Personally, I don't…

I would say Paul Krugman is very politically motivated, in fact he tends to participate in political activism thinly disguised as economics analysis. However, his political motivations aren't related to his opinion of cryptocurrencies and he is probably right about it.

Re: The Cryptocurrency Industry Is 'On the Brink of an Implosion', Research Says

#159

Post by sp332 »

kurtisc wrote: post #151
pkulak wrote: post #22

Earlier quoted context omitted.

By "second layer" do you mean lightning? Is that project off the ground yet? It's been a while since I paid attention.

It's very close, the only thing left to do is solve the Travelling Salesman problem in polynomial time.

This is funny, but solving TSP for most real-life networks is not super difficult. Anyway it's not exactly TSP because you don't have to find an optimal route, just any route will do.

Re: The Cryptocurrency Industry Is 'On the Brink of an Implosion', Research Says

#160

Post by decentralised »

vkou wrote: post #114
decentralised wrote: post #23

Earlier quoted context omitted.

I saw a couple of comments today about the price of USDT so I think it's worth while explaining how it works just in case anyone is interested in knowing more. USDT is a pegged-currency. It's often described as a stablecoin but that's not correct because it doesn't have an inbuilt stabilisation mechanism unlike Maker's DAI for instance. The way it works is purely based on well known legal mechanisms that have no cryp…

> The token itself is used to facilitate trading and many investors 'park' their gains in USDT while waiting for the market to reach a certain point or just in between trades, but that means that the token's FX value is set by the open market itself so if there are more buy orders than available USDT the price goes up and if there are more sell orders than demand the price goes down. If the USDT to USD ratio fluctuat…

It usually fluctuates by 2 or 3 cents ( ~0.98 to ~1.03).

https://coincodex.com/crypto/tether/

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