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As Bitcoin Sinks, Industry Startups Are Forced to Cut Back

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Re: As Bitcoin Sinks, Industry Startups Are Forced to Cut Back

#121

Post by [deleted] »

duxup wrote: post #97
barnabee wrote: post #57

Earlier quoted context omitted.

The difficulty (amount/cost of power required) goes up over time when the price goes up because more miners join the network as it becomes more profitable, which means that on average new coins are produced more often. The network targets a certain rate of production and it does this by increasing the difficulty. If the price drops and miners leave this will happen in reverse and coins will not be produced fast enoug…

Forgive me as I don't quite grok bitcoin. Does the math to calculate a coin change based on... price? For some reason I assumed the mathematical difficulty just naturally increased as part of what in my mind is "the mathematical problem" vs. number of coins.

[deleted]

Re: As Bitcoin Sinks, Industry Startups Are Forced to Cut Back

#122

Post by jMyles »

twblalock wrote: post #112
jMyles wrote: post #100

Earlier quoted context omitted.

Are you insinuating that there have been no breakthroughs in the past 2 years? How do you respond to the ones I have listed in the comment to which you're replying?

How have those so-called breakthroughs had an effect on the world outside the cryptocurrency bubble? Who has used them in industry?

Ahh, yes, in that sense you're right.

But I'm not sure that it's a meaningful standard.

We've seen "the bubble" being poked sharply from the inside with relative trivialities like cryptokitties. We've also seen the more blunt effect of undermining prohibition policies - access to a wide variety of (psychoactive and other) forbidden medicines has been difficult to achieve since the garden of eden; this seems like a breakthrough to me.

But yes, your larger point is sound: broader worldwide adoption hasn't happened, at least yet. I'm confident, though, that the next cryptokitties won't be cryptokitties and that the next OpenBazaar will be more effectual. We'll see.

Re: As Bitcoin Sinks, Industry Startups Are Forced to Cut Back

#123

Post by seanwilson »

jklepatch wrote: post #96

What puzzled me is how comes blockchain startups did not sell their crypto for fiat just after their ICOs. I recommended this to several of my blockchain customers but none of them listened. I dont know if that was motivated by greed or something else. According to Game theory there is no benefit in not selling the crypto for fiat: if you raise lets say 10million during an ico (typical amount raised 6m ago), there is…

> What puzzled me is how comes blockchain startups did not sell their crypto for fiat just after their ICOs.

I'm not sure what's puzzling: The startups who base their business around crypto believe crypto will rise in price. A crypto startup selling all their crypto because they think there's a high risk crypto will crash in value is also sending out a very bad signal to potential investors.

Re: As Bitcoin Sinks, Industry Startups Are Forced to Cut Back

#124

Post by carlob »

InGodsName wrote: post #115
carlob wrote: post #103

Earlier quoted context omitted.

My point was that you are assuming some sort of libertarian viewpoint where nation-states trying to tax your money are fundamentally corrupt/socialist. I personally tend to think that in the vast majority of cases govt spending of tax money does more for the greater good than whatever a self-appointed authority would. There are many exception to this, but I still think this is largely true in democracies. But then ag…

Yeaa but if you go to some third world countries, you'll see high tax rate yet not enough benefits for your tax rate. Prime example is India where people still have power cuts yet business/salaried middle class pays north of 30% tax. People there will happily pay 60% tax if they get even Rome level of infrastructure access So, it's no brainer a lot of them move their money offshore. Edit: people who feel they are not…

This would require some discussion of international wealth and income distribution, but to me the injustice is not at the state level here, but rather in the fact itself that India is a third world country. The Indian upper-middle class should really be demanding reparation to the UK for the effects of colonization rather than moving money offshore damaging only their poorer countrymen.

Re: As Bitcoin Sinks, Industry Startups Are Forced to Cut Back

#125

Post by Phlarp »

stcredzero wrote: post #79
hudon wrote: post #16

Earlier quoted context omitted.

The difference is that even if the difficulty adjusts, there will be dormant ASICs waiting to be used. If the price lowers enough and enough ASICs are out on the bench, it’ll at one point becoming economically beneficial to turn them all on and attack the network rather than having them collect dust and depreciate.

Couldn't the protocol be extended, such that the hash algorithm could be switched periodically, in such a way that ASICs would no longer be profitable to produce?

In theory yes, the algorithm could be changed or even moved away from proof of work and towards proof of stake (I think ETH is doing this?)

In practice bitcoin is somewhat resistant to large changes or forks, most anyone who would consider any type of alteration to the existing implementation forked off with bitcoin cash for a relatively minor change (block size). That self selection has left a staunchly "traditionalist" majority in the remaining bitcoin community.

Re: As Bitcoin Sinks, Industry Startups Are Forced to Cut Back

#126

Post by qubex »

hudon wrote: post #16
marcosdumay wrote: post #10

Earlier quoted context omitted.

Don't bitcoin costs adjust to a shrinking miner population as well as it adjusts for a growing one? If so, the answer is never. As people give-up, the costs for the remaining ones reduce so that at some point it's lucrative again. The interesting question is at what price people will stop speculating on its price and run to an exit? I don't think anybody can answer this one.

The difference is that even if the difficulty adjusts, there will be dormant ASICs waiting to be used. If the price lowers enough and enough ASICs are out on the bench, it’ll at one point becoming economically beneficial to turn them all on and attack the network rather than having them collect dust and depreciate.

Otherwise known as the “latent surplus capacity ratchet”.

Re: As Bitcoin Sinks, Industry Startups Are Forced to Cut Back

#127

Post by carleverett »

pera wrote: post #117
DenisM wrote: post #73

The most remarkable thing about BTC is diffusion of responsibility. If it was issued and marketed by a single entity the participants would be in hot water by now for violating the Securities and Exchange laws. However here we had one non-affiliated group of bigger miners issuing the coins and another group of volunteer enthusiasts hyping them up. Since the second group was not hired by the first, the first group can…

> If it was issued and marketed by a single entity the participants would be in hot water by now for violating the Securities and Exchange laws. What laws are being violated by Bitcoin's participants?

Certainly not any SEC laws. Jay Clayton, SEC Chairman, has explicitly said that Bitcoin is not a security: https://www.investopedia.com/news/sec-chair-says-bitcoin-not...

If they were in violation of SEC laws, the parent comment is still be inaccurate since Bitcoin's immutable ledger would mean the SEC would absolutely be pursuing violations, like they are with other ICOs.

Re: As Bitcoin Sinks, Industry Startups Are Forced to Cut Back

#128

Post by dgellow »

jMyles wrote: post #66

The discussion of blockchain tech on HN is puzzling to me. On the matter of value: I suspect that if we find ourselves able to send a message back in time two years (when BTC was less than $1,000 USD) and report that the price is now over $3,700, that we'll find this message to be met with an understanding that this is, at least, a validation of the use of blockchain tech as a store of value. I suspect that if we des…

> outdated notions of "intellectual property."

Could you elaborate? What is wrong with current notion of intellectual property? What is outdated about it?

In general I see this point targeting patents, not the whole concept of IP.

Re: As Bitcoin Sinks, Industry Startups Are Forced to Cut Back

#129

Post by Nursie »

jMyles wrote: post #66

The discussion of blockchain tech on HN is puzzling to me. On the matter of value: I suspect that if we find ourselves able to send a message back in time two years (when BTC was less than $1,000 USD) and report that the price is now over $3,700, that we'll find this message to be met with an understanding that this is, at least, a validation of the use of blockchain tech as a store of value. I suspect that if we des…

> On the matter of value: I suspect that if we find ourselves able to send a message back in time two years (when BTC was less than $1,000 USD) and report that the price is now over $3,700, that we'll find this message to be met with an understanding that this is, at least, a validation of the use of blockchain tech as a store of value

So just ignore everything in between? Yah, sounds great...

> I suspect that if we describe the details of the lightning network in this message and report that transactions are radically faster and cheaper for retail-scale use, that we'll hear cheers about blockchain utility as a currency.

The lightning network is an overcomplicated joke, which requires on-chain transactions to seed, massive amounts of capital tied up into it, always-on participants etc. It also suffers from fundamental problems around routing, payment contention etc. A year on from its launch, it still has negligible uptake, and fails to really take any load off BTC.

Further, its very existence points to a massive failure in the underlying cryptocurrency as a payment network. I look at lightning and see two failures, not one success.

> Let's hear in our mind's voice about the next cohort of decentralized tech...

Very, very few people care about decentralised money, or decentralised tech as a whole. For most, the very nature of it represents a huge step backwards in usability and reliability compared to fast, lightweight, insured and reversible centralised systems.

> Let's celebrate all the adoption they report to us

There are virtually zero positive outcomes for blockchain tech, a decade on. Time to let it rot on the pile of might-have-been's

Re: As Bitcoin Sinks, Industry Startups Are Forced to Cut Back

#130

Post by dustingetz »

jklepatch wrote: post #96

What puzzled me is how comes blockchain startups did not sell their crypto for fiat just after their ICOs. I recommended this to several of my blockchain customers but none of them listened. I dont know if that was motivated by greed or something else. According to Game theory there is no benefit in not selling the crypto for fiat: if you raise lets say 10million during an ico (typical amount raised 6m ago), there is…

What is even involved in finding a buyer for $10mm btc in usd and then getting that usd into a legal/compliant bank account? Sounds non-trivial. It's my understanding from some work I did for a crypto startup that there is approximately zero usd/btc liquidity, the apparent "usd liquidity" and "usd price" last year was actually dominated by tether-btc and tether-eth liquidity. There was not actually a functional usd/btc market at any point, at least not with liquidity necessary to justify a statement like "startup X holds $10m btc" and this whole thing is a bunch of twenty-five year old entrepreneurs learning about macroeconomics the hard way.
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