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Bitcoin and cryptocurrency prices have fallen sharply over the last few days

forbes.com

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Re: Bitcoin and cryptocurrency prices have fallen sharply over the last few days

#161

Post by xorcist »

sparkie wrote: post #136
unhashable wrote: post #112

Earlier quoted context omitted.

This is an interesting scenario worth thinking through. If Bitcoin is forced to go split-brain temporarily, the network could coordinate to rejoin after the fact. Or, it could stay split in two. Regardless, infighting over which network was “the real Bitcoin” would ensue. See Bitcoin Cash and friends.

A "rejoin" isn't really possible. People who spent money on the "wrong" chain will simply have to live with the fact that their money is lost on the "right" chain, although it will probably not be an overnight thing. The two forks could exist for a long time after the split simultaneously, and many merchants may accept either form of payment. There will even be arbitrage between the two chains as profit can be made.…

> have to live with the fact that their money is lost on the "right" chain

It's not that simple. Transactions can, and will be, replayed on both chains. There would however be many opportunities for attacks such as double spends for a short window of time.

> The two forks could exist for a long time after the split simultaneously,

That's not realistic. As soon as there is some communications between the chains, the system will reconcile. It's sort of the whole reason why this proof-of-work thing exists. Without the need to reconcile chain splits it would be sufficient with some sort of voting of proof-of-stake scheme.

Re: Bitcoin and cryptocurrency prices have fallen sharply over the last few days

#162

Post by whiskyant »

jaltekruse wrote: post #48

I still assume it is possible and likely that something like cryptocurrency will eventually become incredibly valuable, but I see that happening only when technical and social hurdles are overcome to make it as widespread and scalable as the current credit card system for everyday transactions. Unfortunately for current cryptocurrencies, they just don't have what it takes to compete with decades of trust to get every…

Look into Lightning Network

Re: Bitcoin and cryptocurrency prices have fallen sharply over the last few days

#163

Post by sparkie »

Barrin92 wrote: post #148
sparkie wrote: post #139

Earlier quoted context omitted.

> The American government and the American economy underpinning the dollar however represent vital goods and services as well as security provided and have an army to back it up so the chance that it magically loses all its value is just about nil. It doesn't need to lose all of its value at once. It just needs to lose some value frequently enough that some people decide "hold on a minute, this is an unjust tax I'm f…

everybody already understands that the dollar is subject to long term inflation which is why people put their money into stocks or pension funds and don't put cash under the mattress for 80 years. The predictable change in the value of the dollar is priced in and desirable for many macro-economic reasons and irrelevant to consumers. As far as the dollar value is concerned you care if the milk and the orange juice cos…

> everybody already understands that the dollar is subject to long term inflation which is why people put their money into stocks or pension funds and don't put cash under the mattress for 80 years. The predictable change in the value of the dollar is priced in and desirable for many macro-economic reasons and irrelevant to consumers.

Understanding and accepting are different things. I might know that the dollar is going to inflate by 1-2% every year, but I don't agree that this should be the case. There exists no avenue for me to opt-out of this either, because it is the policy of both parties, but not the policy of either party - it is instituted by an unelected chamber by which I have no say as to who makes the decisions. Hence, an unjust tax - it is taxation without representation.

This unjust tax also benefits the early receivers of newly printed money at the expense of the later receivers who bear the additional costs. (The Cantillon Effect).

The predictable rate of inflation is also only predictable during periods of economic success. If the economy begins to tank, we can see that the inflation becomes very unpredictable. There are countless cases of hyperinflation in the last century alone which we can take as evidence that centrally controlled supply of money isn't particularly stable.

The dollar is perhaps an exception due to it being the global reserve, but this also means it is potentially of much greater risk if this MMT experiment turns out to be a massive failure, which to me appears inevitable, and is more of a question of when than if.

> As far as the dollar value is concerned you care if the milk and the orange juice cost roughly as much this month as they do next month, there is this weird crypto and gold obsession with long sterm steady value that's not relevant at all for fiat currency.

You're making the implicit assumption that the price of milk and orange juice won't change by much month to month, but this is absolutely not the case in places where hyperinflation has hit. The price can change week to week, day to day, but you can be almost certain that your wage isn't going to follow the price hikes. It isn't a "weird obsession" to consider that the dollar may face the same fate as dozens of other currencies. In fact, the historical evidence of currencies not hyper-inflating is the one we should bring into question - and the dollar as we know it has been around for less than half a century. It is no less of an experiment than Bitcoin.

Re: Bitcoin and cryptocurrency prices have fallen sharply over the last few days

#164

Post by sparkie »

xorcist wrote: post #161
sparkie wrote: post #136

Earlier quoted context omitted.

A "rejoin" isn't really possible. People who spent money on the "wrong" chain will simply have to live with the fact that their money is lost on the "right" chain, although it will probably not be an overnight thing. The two forks could exist for a long time after the split simultaneously, and many merchants may accept either form of payment. There will even be arbitrage between the two chains as profit can be made.…

> have to live with the fact that their money is lost on the "right" chain It's not that simple. Transactions can, and will be, replayed on both chains. There would however be many opportunities for attacks such as double spends for a short window of time. > The two forks could exist for a long time after the split simultaneously, That's not realistic. As soon as there is some communications between the chains, the s…

> It's not that simple. Transactions can, and will be, replayed on both chains. There would however be many opportunities for attacks such as double spends for a short window of time.

My point was that a merchant who accepts a payment for some good or service, and later finds out that they were partitioned from the network after they have already released the goods, may find that they don't have any money on the other (main) chain because it was already spent. The merchant has no recourse to get back their money.

> That's not realistic. As soon as there is some communications between the chains, the system will reconcile. It's sort of the whole reason why this proof-of-work thing exists. Without the need to reconcile chain splits it would be sufficient with some sort of voting of proof-of-stake scheme.

This is what I was alluding to in the last paragraph. The majority of participants who do nothing will simply continue to operate on the main chain, but those who were partitioned (which may include miners) may resist operating on the main chain by forking their software. If enough people are affected by a partition, they would have the incentive to follow the partitioned chain and promote the forked software because their money doesn't exist on the main chain. They would probably operate both chains in attempt to spend the money they received whilst the partition occurred, but eventually the dominant main chain would account for most of their economic activity and the partitioned chain will become obscure, like Bitcoin Cash.

Re: Bitcoin and cryptocurrency prices have fallen sharply over the last few days

#165

Post by enlyth »

unhashable wrote: post #10

It's a common misconception that Bitcoin is a safe haven. It's not. Not even Gold is a safe haven during a liquidity crisis. In sharp downturns, cash is king. Think of Bitcoin and Gold as call options on the entire global monetary system. If Govs become insolvent, Bitcoin and Gold is there. If the masses lose faith in central banks, Bitcoin and Gold is there. If central banks debase currencies too quickly, Bitcoin an…

So you mean put options?

Re: Bitcoin and cryptocurrency prices have fallen sharply over the last few days

#166

Post by [deleted] »

zionic wrote: post #3

I have to say, the crypto market's strong ties to traditional finance in this crash surprise me. I understand selling off stock because of expected corporate losses, I don't understand mass conversions to FIAT especially when "print more money" seems to be the fed's response to this.

[deleted]

Re: Bitcoin and cryptocurrency prices have fallen sharply over the last few days

#168

Post by dntbnmpls »

iamaelephant wrote: post #40

People still talk about Bitcoin as though it's a real market and not completely manipulated by a handful of key players? Ok then.

That's true of the stock market and every other market. For stocks, a bunch of market makers of major financial firms set the "market" for these stocks. The same for forex, commodities, you name it.

Re: Bitcoin and cryptocurrency prices have fallen sharply over the last few days

#169

Post by freeopinion »

unhashable wrote: post #72
kaikai wrote: post #50

Earlier quoted context omitted.

You don't have to transport a heavy metal, instead all you have to do is ensure an electrical grid, fully functional internet access, and a distributed network of other people! I'm not sure that's any easier than carry around metal :P

I see: you’re concerned with a future where the concept of an internet ceases to exist? I’m afraid money will be the least of our problems then.

Money was definitely not the least of the problems in Puerto Rico when the grid went down.

Re: Bitcoin and cryptocurrency prices have fallen sharply over the last few days

#170

Post by icedchai »

nonamenoslogan wrote: post #147
ggffryuuj wrote: post #142

Earlier quoted context omitted.

Can someone please flag this person?

Ahh, zero sense of humor. Sorry to step on your -6 karma and bitcoin-lust with my pithy comments.

Indeed. You must've missed the memo. I know I did. The Internet is a safe space for serious business now. It's no longer just the fun world of lol cats, memes, and pr0n. We have serious things now. Like Facebook. And Snapchat.
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