Bitcoin crashes over 25% in 24 hours, under $180 • Hacker News Board

Re: Bitcoin crashes over 25% in 24 hours, under $180

#201

Post by jasonisalive » Wed, Jan 14, 2015, 11:12 AM UTC

sanswork wrote: post #184

jasonisalive wrote: post #162

Earlier quoted context omitted.

The UK is one of the wealthiest, stablest, most developed countries in the world. Pointing out that its banking system is relatively effective as if that reduces the value of Bitcoin is like saying toilets and public sanitation is great in the UK so why are these entrepreneurs bothering building cheap toilets and menstruation technologies for India and Africa again? In other words, unbelievably naive and borderline a…

What happens when bitcoin is the adopted world currency and the power goes out in your area for a few days?

Entrepreneurs smell an opportunity[1] to roll out one of the many, many new energy technologies that have developed in the meantime in your area (which somehow was overlooked until this point.)

[1] An opportunity made possible by the ability (created by Bitcoin) to profitably and efficiently collect micropayments in poor regions of the world

Re: Bitcoin crashes over 25% in 24 hours, under $180

#202

Post by throwawayaway » Wed, Jan 14, 2015, 11:12 AM UTC

mr_luc wrote: post #183

throwawayaway wrote: post #133

Earlier quoted context omitted.

https://blockchain.info/charts/hash-rate the hash rate doesn't grow on trees. why the hell would you doubt it would be worse? it does 7 transactions per second. http://www.forbes.com/sites/timworstall/2013/12/03/fascinati... here's on estimate: Bitcoin Mining Uses $15 Million's Worth Of Electricity Every Day

Did you read that article you posted? Those stats assumed CPU/GPU and FPGA, not ASIC, miners. For instance, the 5-to-500-gigahash-per-second rigs would have to be running at over 300k watts of electricity using those statistics. :) So in reality, the network is much more efficient -- the high-end miners are using more than 100x less electricity (which would still be 3000 watts for high-end rigs per those numbers), an…

current hash rate GH/s: 300,000,000 //https://blockchain.info/charts/hash-rate

GH/s/w: 4.6 // http://www.coindesk.com/a-look-inside-kncminer/

watts to provite current hash rate: 300,000,000/4.6 = 65,217,391.30 w

kw to provide 1s: 65,217.39

an hour of that: 65,217.39*3600

234,782,604 kwh

10c per kwh => $23,478,260.4 per hour

24 hours => $563,478,249.60

my own figures are even more wacky so I would welcome some better statistics.

Re: Bitcoin crashes over 25% in 24 hours, under $180

#203

Post by sanswork » Wed, Jan 14, 2015, 11:12 AM UTC

Fuxy wrote: post #136

olalonde wrote: post #77

Earlier quoted context omitted.

> Banks can already transfer fund between themselves electronically and efficiently. And a bank account is exactly storing paper currency digitally. Sure, but it doesn't matter what benefits Bitcoin offers to banks (although I do think you are overlooking a few). If banks ever were to support BTC denominated accounts, it would be because of consumer demand, not because Bitcoin is more efficient for them to store/tran…

Unlike the baking systems "digital currency" which can be confiscated from its owner or it owner prevented from using it in certain situations (see Wikileaks) bitcoin give you complete control over your own hard earned money and the causes you choose to support. It may not be much of a currency at the moment since banks are attempting hard to prevent its use but the freedom it gives you outweighs the risk of it being…

Visa and Mastercards business isn't payments it is letting people buy stuff with money they don't have. Bitcoin doesn't compete with them at all.

>It would also be potentially beneficial for the user since if you could purchase things with bitcoin at your local store the owner wouldn't have to pay the bank or Visa a small fee to make a transaction.

I don't pay them when I make a purchase the store does. That saving could be passed along but it wouldn't be.

>The biggest problem bitcoin has at the moment is all the hackers stealing the bitcoins and giving it a bad reputation in the news.

The biggest problem bitcoin has at the moment is that it isn't really better than existing systems for 99% of the people in the world with money. And with that comes complexity, security risks and volatility.

Re: Bitcoin crashes over 25% in 24 hours, under $180

#204

Post by lmm » Wed, Jan 14, 2015, 11:17 AM UTC

ploxiln wrote: post #84

tribaal wrote: post #37

Earlier quoted context omitted.

Banks can already transfer fund between themselves electronically and efficiently. And a bank account is exactly storing paper currency digitally. Again, I don't see what the innovation here is, except the technical aspects (the blockchain as a distributed system is very clever).

Except wire transfers take one or more days and are a huge pain in the ass to initiate online. In the US at least. If you go to a third world country, it's even less convenient to pay for stuff. For example, you can't get a hotel room last-minute with a credit card in Vietnam, where I checked, because they need to verify your ownership/control of your credit card with a pair of small debits, probably because of the f…

> For example, you can't get a hotel room last-minute with a credit card in Vietnam, where I checked, because they need to verify your ownership/control of your credit card with a pair of small debits, probably because of the fraud/chargeback situation.

This problem is soluble (as sibling points out, it's been solved in the UK). Conversely Bitcoin always takes about half an hour to settle transfers, for fundamental design reasons. Bitcoin qua Bitcoin is never going to be an effective way to pay for your shopping, and if you're using "Bitcoin" via a Visa-like entity, the benefits over just using Visa are questionable.

> Another example, you want to donate to Wikileaks from the US. Not so easy.

I suspect for most people (that is, non-anarchists) that's actually an advantage. Bitcoin is the equivalent of paying in used notes; it inherently carries a whiff of, at minimum, tax avoidance or socially-disapproved earning sources, because the big places where Bitcoin is more useful than conventional currency are tax evasion and socially unpopular activity. Whereas someone paying with amex likely has a proper job.

Re: Bitcoin crashes over 25% in 24 hours, under $180

#205

Post by lmm » Wed, Jan 14, 2015, 11:21 AM UTC

brazzy wrote: post #131

teekert wrote: post #36

Earlier quoted context omitted.

I think it is expected that relatively new currencies have a turbulent period of a certain time. And as for interest, here in the Netherlands it is less than inflation so you loose money (interest on savings accounts is about 1%, inflation is between 1 and 2% over the past years). Bitcoin has or will have its niche, perhaps it will not be for your savings but sharing money with friends using a bitcoin wallet app is b…

Has there ever been a time and place where interest on savings accounts was above inflation? I rather doubt it.

It's entirely normal for interest on savings accounts to be above RPI/CPI inflation. Whether "inflation" is the proper term for those price changes is an uninteresting argument, but it's very ordinary for the basket-of-goods purchasing power of your savings in ten years time to be more than it is now (my (UK) savings account does that, and it's by no means unusual in this regard).

Re: Bitcoin crashes over 25% in 24 hours, under $180

#206

Post by moe » Wed, Jan 14, 2015, 11:24 AM UTC

TheDong wrote: post #139

brazzy wrote: post #118

Earlier quoted context omitted.

Do you have any idea how much energy, work and time is being spent on the infrastructure of regular currencies? Minting, ATMs, secure transport, brank branches, all kind of mainframe dinosaurs running 40 year old COBOL code? Even if scaled up to global usage, I very much doubt Bitcoin mining would be worse.

Yes, bitcoin mining would be worse. Provably worse. As computers get better, traditional applications, like databases, perform better and you can either serve more customers, use cheaper (and often more efficient hardware), or do nothing and use your outdated hardware. With bitcoin, your enemy is not the performance of the raw work you are doing (you can hash better), but the fact that everyone else also has these in…

Yes, bitcoin mining would be worse. Provably worse.

Your premise is wrong. Bitcoin has a mechanism called "difficulty". It's very much at the core of the protocol, google it and ponder how it affects your argument.

Furthermore, the current economics of mining have a fixed expiration date set to 2140, that's roughly when the last coin would be mined.

The protocol will need to be changed fundamentally long before that date. Since we don't know what that change will look like, we also don't know how it will affect the network's power consumption.

Any "thought experiments" that naively extrapolate from the current power consumption are as pointless as trying to guess your car's mileage based on its fuel consumption during ignition.

The protocol is still in the bootstrap phase. If it prevails then the bitcoin in 10 years will be very different from the bitcoin of today.

Re: Bitcoin crashes over 25% in 24 hours, under $180

#207

Post by lmm » Wed, Jan 14, 2015, 11:24 AM UTC

jasonisalive wrote: post #146

simonh wrote: post #106

Earlier quoted context omitted.

>...all your deposits and interests disappear with it The US, EU and many other countries have deopsit insurance* schemes that limit risk to depositors. You may not get all your money back if you have large deposits, but for example in the EU you're generaly guaranteed to get at least the first 50,000 Euros. * http://en.wikipedia.org/wiki/Deposit_insurance

This isn't better. It encourages savers to be reckless in their choice of bank, and thus banks to be reckless in their lending policies, because the profits of risky loans are privatised while the losses are socialised. The ultimate loser is everybody, because the cycle of bank bailouts can only be sustained by printing money, devaluing everyone's savings and damaging the economy by degrading economic signals. You mi…

Devaluing savings is good for society. Savings are fundamentally antidemocratic; unconstrained savings inevitably result in the capture of economic output by a rentier class, destroying productivity and entrenching a permanent aristocracy.

Re: Bitcoin crashes over 25% in 24 hours, under $180

#208

Post by spiritplumber » Wed, Jan 14, 2015, 11:29 AM UTC

synchronise wrote: post #197

spiritplumber wrote: post #138

Earlier quoted context omitted.

I'd like something like Foldcoin where your proof-of-work is actually doing something beside keeping my home warm inefficiently.

I personally like the idea of Gridcoin more, because BOINC lets you use your processing power for other things than just folding proteins (although with Rosetta you can still do that) like searching for aliens or looking for gravitational anomalies.

Thanks, I didn't know that existed. Nice!

Re: Bitcoin crashes over 25% in 24 hours, under $180

#209

Post by moe » Wed, Jan 14, 2015, 11:34 AM UTC

zamalek wrote: post #159

TheDong wrote: post #139

Earlier quoted context omitted.

Yes, bitcoin mining would be worse. Provably worse. As computers get better, traditional applications, like databases, perform better and you can either serve more customers, use cheaper (and often more efficient hardware), or do nothing and use your outdated hardware. With bitcoin, your enemy is not the performance of the raw work you are doing (you can hash better), but the fact that everyone else also has these in…

> Yes, bitcoin mining would be worse. Provably worse. ... and exponentially worse as time goes on (by design).

... and exponentially worse as time goes on (by design).

Only for people who don't understand the design.

Google "bitcoin difficulty".

Re: Bitcoin crashes over 25% in 24 hours, under $180

#210

Post by XorNot » Wed, Jan 14, 2015, 11:36 AM UTC

brazzy wrote: post #194

TheDong wrote: post #139

Earlier quoted context omitted.

Yes, bitcoin mining would be worse. Provably worse. As computers get better, traditional applications, like databases, perform better and you can either serve more customers, use cheaper (and often more efficient hardware), or do nothing and use your outdated hardware. With bitcoin, your enemy is not the performance of the raw work you are doing (you can hash better), but the fact that everyone else also has these in…

Computational costs of traditional banking goes down in theory (in practice, they seem to easily overcompensate for that with increased complexity), but other costs (payroll, physical infrastructure, security thereof, etc.) do not. Unless you're proposing that the future of money is 100% digital, with minimal physical infrastructure. Admittedly, that is not entirely unrealistic, though I doubt things will go quite th…

Physical infrastructure costs have been declining for decades, with banks actively trying to push them down by prioritizing digital over physical services.

Physical security also scales well. The volume of secure space you have increases to the 3rd power with only an approximately 2nd order increase in the costs of creating it (your basic area/space tradeoff working for you in this case).

The argument that payroll doesn't scale is also absurd: who are all these Bitcoin entrepreneurs trying to run exchanges, if not payrolled staff?

Finally and most importantly: the difficulty factor of Bitcoin does not reduce the computational power required to mine it. It is the exact mechanism of the provably increasing cost: the difficulty goes up, so more and more power is required to preserve the status quo.

Any changes in energy cost are thus ignorable, since in a Bitcoin-only world they're constantly eaten up by changes in difficulty factor, whereas in the non-Bitcoin world they become real-wealth for everyone.