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Bitcoin Exchange Had Too Many Bitcoins

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Re: Bitcoin Exchange Had Too Many Bitcoins

#121

Post by closeparen »

goodplay wrote: post #117
gregschlom wrote: post #91

"There is no single obviously correct solution to these issues. Instead, each decision was sort of weird and contingent and reversible: not the immutable code of the blockchain, but just humans sitting around and trying to figure out which approach would cause the fewest complaints. In that, it's a bit like the Dole settlement process -- only instead of a neutral judge making decisions based on written contracts and…

>they're very valuable if and only if you cannot use the protection [..] I don't think that's entirely fair. They're also valuable to those who want to transfer money without ridiculous fees, excessive bureaucratic friction, and many mandatory middlemen. What other system would allow you to instantly be able to accept payments without giving an exorbitant portion of your revenue?

Ridiculous fees, bureaucratic friction, and mandatory middlemen are exactly how I would describe converting the BTC someone transferred to you to a usable form (by exchanging to your local fiat currency).

Re: Bitcoin Exchange Had Too Many Bitcoins

#122

Post by bduerst »

Buge wrote: post #115
bduerst wrote: post #107

Earlier quoted context omitted.

What about Bitcoin Classic and Bitcoin XT? Also isn't that splitting hairs about requiring the blockchain history? I don't think Matt said that.

If you don't share blockchain history, then you don't automatically get some of the new coin by holding some of the previous coin. So there are no issues with exchanges and shorts. Also if you do share history, it is much much harder to start, because you start off with the previous difficulty which is very hard to mine on. If you start a new altcoin with a clean history, the difficulty starts off very low. Bitcoin C…

XT and Classic did fork the blockchain and had the history though, meaning for a time they were an alt-coin with history.

That's completely counter intuitive to what you're saying about Matt's example not having a history.

Re: Bitcoin Exchange Had Too Many Bitcoins

#123

Post by shlinx »

harryh wrote: post #59
tpallarino wrote: post #58

Earlier quoted context omitted.

1. Organization implements foolish policy 2. Thousands of people make trades according to foolish policy 3. Organization changes terms of foolish policy, telling nobody. 4. Organization then waits until after the fact to tell everyone that they have changed the policy, which dictate d the actions of a non trivial percentage of their customers. If you're going to try to look like a legitimate exchange, this kind of th…

If you're going to try to look like a legitimate exchange, this kind of thing looks pretty unseemly. Oh I agree! The whole thing has bitfinex looking a little foolish. It was step #1 that was the problem though. Steps 3 and 4 were them fixing it as best they could. Those parts weren't mistakes, it's just them keeping you from stealing Bitcoin Cash from their other customers.

Steps 3 and 4 were not fixing it as best as they could. They are just doing another wrong thing trying to cover the earlier mistake by sacrificing another group of their customers instead of Bitfinex itself. This group of their customers are also innocent as they are just lured by the foolish policy. They could transfer their BTC to the personal wallet to get BCH if they were not lured. Everyone playing game in Bitfinex is trying to maximize profits based on its policy, robbing or being robbed. The one who breaks the policy or changes the policy without notifying is the nasty one.

Re: Bitcoin Exchange Had Too Many Bitcoins

#124

Post by ajross »

sowbug wrote: post #108
matt_wulfeck wrote: post #88

> But BTC hasn't really lost any value since the spinoff, still trading at about $2,700. So just before the spinoff, if you had a bitcoin, you had a bitcoin worth about $2,700. Now, you have a BTC worth about $2,700, and also a BCH worth as much as $700. It's weird free money, if you owned bitcoins yesterday. Doesn't this throw up any red-flags to the btc/crypto apologist? This type of behavior is not how healthy mar…

If you're thinking of this event as a split, dividend, or spinoff, then it doesn't make sense. But it's more like a company cloning itself but adopting a different vision/mission, and awarding shares to all existing shareholders. They could have started fresh like the zillion other cryptocurrencies that have started up since 2009, some of which appear to have real value. You wouldn't look askance at those, at least f…

> it's more like a company cloning itself but adopting a different vision/mission, and awarding shares to all existing shareholders.

And that doesn't sound... insane to you? I mean, skipping the problems with physics where a "split" company would have to clone its employee talent pool as well: such a company would share the same products and the same markets and the same sales channels and have zero share of all of those at the start. And you're saying that a "healthy market" would be expected to bid up shares of that crazy reincarnated zombie company thing to like 20% or whatever of the original value? Based on "different mission"?

This is crazy, and I want no part of it. The coin community is literally inventing phantom cash and pretending like there's no bubble. How often has that been true in history?

Re: Bitcoin Exchange Had Too Many Bitcoins

#125

Post by gnaritas »

Twisell wrote: post #111
Lazare wrote: post #109

Earlier quoted context omitted.

I wouldn't call your views "left wing", just a bit ignorant of market theory, history, and practice. I mean, the Dutch Tulip Bubble was driven by derivatives (and in particular, a law change forced by the politically connected that retroactively changed some future contracts into option contracts), so if you're looking for some halcyon age prior to "complex products", bailouts, and people using lobbying to reap outsi…

Ok so how on earth does the fact that derivatives permitted the tulip Bubble is an argument in favor of derivatives? It might a question of point of view. Maybe you focus more on tulip frenzy financial opportunities while I focus more on people that have been burned by it... And yeah if you want to trace it back to 1500 no problem with that, old does not always equal good. It like copyright laws written prior to wide…

His point was it isn't a technological improvement, it's something that's existed for hundreds of years, he didn't claim they were good.

Re: Bitcoin Exchange Had Too Many Bitcoins

#126

Post by gregschlom »

goodplay wrote: post #117
gregschlom wrote: post #91

"There is no single obviously correct solution to these issues. Instead, each decision was sort of weird and contingent and reversible: not the immutable code of the blockchain, but just humans sitting around and trying to figure out which approach would cause the fewest complaints. In that, it's a bit like the Dole settlement process -- only instead of a neutral judge making decisions based on written contracts and…

>they're very valuable if and only if you cannot use the protection [..] I don't think that's entirely fair. They're also valuable to those who want to transfer money without ridiculous fees, excessive bureaucratic friction, and many mandatory middlemen. What other system would allow you to instantly be able to accept payments without giving an exorbitant portion of your revenue?

This is fixed by creating new services and/or fixing regulation where needed. A good example of that is TranferWise which turned what used to be a horrible fee laden process into something as simple as fairly priced as it can be.

Fix the banking system. Make new banks. Whatever. You don't need the blockchain for that.

Re: Bitcoin Exchange Had Too Many Bitcoins

#127

Post by Lazare »

Twisell wrote: post #111
Lazare wrote: post #109

Earlier quoted context omitted.

I wouldn't call your views "left wing", just a bit ignorant of market theory, history, and practice. I mean, the Dutch Tulip Bubble was driven by derivatives (and in particular, a law change forced by the politically connected that retroactively changed some future contracts into option contracts), so if you're looking for some halcyon age prior to "complex products", bailouts, and people using lobbying to reap outsi…

Ok so how on earth does the fact that derivatives permitted the tulip Bubble is an argument in favor of derivatives? It might a question of point of view. Maybe you focus more on tulip frenzy financial opportunities while I focus more on people that have been burned by it... And yeah if you want to trace it back to 1500 no problem with that, old does not always equal good. It like copyright laws written prior to wide…

> Ok so how on earth does the fact that derivatives permitted the tulip Bubble is an argument in favor of derivatives?

It's not, not was I making an argument in favour of derivatives. (I'm generally in favour of them; I just wasn't making that argument.)

Rather, I was responding to your argument, which I would paraphrase (I hope not unfairly) as "I hate these new inventions, we should go back to before they existed, when markets worked properly!" by which I suspect you meant the 1950s, but really it's the 1550s. :) (And given how different markets were back then, I'd even go further and say there has never been a time when markets worked the way you imagine. I'm not even sure they could.)

In short, if you don't understand the history of financial markets, your conclusions based on your flawed understanding of that history will have greatly diminished value.

> old does not always equal good

Quite right. But it's very different to say "the last 500 years have been a mistake" versus "the last 50 years" or (especially) "the last 5 years". For one thing, it's a lot harder to imagine the counterfactual.

I can guess what the world would be like if the Gramm–Leach–Bliley Act had never passed (probably very similar to the current day, but again, that's a separate argument); I can't imagine what the world would be like without derivatives, because they have been a part of the past 500 years of development of our economy, laws, and culture. A change of that magnitude requires extraordinary justification.

Re: Bitcoin Exchange Had Too Many Bitcoins

#128

Post by Laforet »

bduerst wrote: post #122
Buge wrote: post #115

Earlier quoted context omitted.

If you don't share blockchain history, then you don't automatically get some of the new coin by holding some of the previous coin. So there are no issues with exchanges and shorts. Also if you do share history, it is much much harder to start, because you start off with the previous difficulty which is very hard to mine on. If you start a new altcoin with a clean history, the difficulty starts off very low. Bitcoin C…

XT and Classic did fork the blockchain and had the history though, meaning for a time they were an alt-coin with history. That's completely counter intuitive to what you're saying about Matt's example not having a history.

Did they? IIRC neither fork left the proposal stage.

Re: Bitcoin Exchange Had Too Many Bitcoins

#129

Post by [deleted] »

bduerst wrote: post #97
tpallarino wrote: post #77

Earlier quoted context omitted.

"Nothing stops me from just announcing that I've cloned a copy of the bitcoin blockchain for BCM" You can't just make random forks and have them be worth something. This is the culmination of years worth of debate and has a significant community following.

Aren't all the alt-coins examples of this happening? That anyone can fork a blockchain and give it their own rules? The market value of a coin isn't limited to a strict mathematical function of mining power or exchanges backing it. That's the point Matt is making.

[deleted]

Re: Bitcoin Exchange Had Too Many Bitcoins

#130

Post by DoctorBit »

bduerst wrote: post #97
tpallarino wrote: post #77

Earlier quoted context omitted.

"Nothing stops me from just announcing that I've cloned a copy of the bitcoin blockchain for BCM" You can't just make random forks and have them be worth something. This is the culmination of years worth of debate and has a significant community following.

Aren't all the alt-coins examples of this happening? That anyone can fork a blockchain and give it their own rules? The market value of a coin isn't limited to a strict mathematical function of mining power or exchanges backing it. That's the point Matt is making.

You're (understandably) confusing a code fork with a chain fork:

Code fork: taking the source code from one project, modifying it, then offering the result as a new project. This is what the overwhelming majority of altcoins are. For example Litecoin is a five-year-old code fork of Bitcoin. Even though Litecoin's code is nearly identical to Bitcoin's, Litecoin from the beginning created its own blockchain, which shares no data with Bitcoin's blockchain.

Chain fork: taking the blockchain from one project, and adding new blocks to that chain that are not compatible with the chain's original style. Variations of this are soft forks (the block-adding rules are made more strict), and hard forks (the block-adding rules are made less strict). Both this week's BTC-BCH fork and last year's ETH-ETC fork were hard forks.

Complications: obviously, a chain fork requires changes to the relevant code to be able to work, so a chain fork usually comes with a code fork, but not necessarily. For example, theoretically, a completely new code base could be created from scratch in a clean-room kind of environment to add new kinds of blocks to an old blockchain.

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