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What I Think of Bitcoin

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Re: What I Think of Bitcoin

#191

Post by carleverett »

ballofrubber wrote: post #187
carleverett wrote: post #185

Earlier quoted context omitted.

A good medium of exchange should have: - Little to no transaction fee - Near instantaneous transaction time - stable value The characteristics of Bitcoin that make it such a good store of value make it really bad at these. Computation-heavy proof of work creates a secure and immutable network, but also makes it more expensive and slows down transaction times. It's scarcity makes it a speculative asset prone to booms…

> - Little to no transaction fee - Near instantaneous transaction time That can be done with Bitcoin today. Download a lightning capable wallet in the appstore of your choice and post an invoice, I can instantaneously pay that to your wallet with near zero fees. > stable value That is basically what I was saying earlier, we don't know the correct price yet. However bitcoin is only volatile upwards (if your time horiz…

Yes I 100% agree Lightning Network solves a lot of the medium of exchange issues and in a really cool way too.

I don't see the volatility stopping though. And being volatile upwards might be good for the spender who's been saving that money long term, but probably not for the seller who needs to count on that revenue to cover its monthly expenses.

Re: What I Think of Bitcoin

#192

Post by coolestguy »

mempko wrote: post #83

I think there is a huge tail risk that Ray Dalio missed about bitcoin. https://cbeci.org/ It's incredibility energy intensive and as the world works towards reducing the our impact on the climate, it's possible energy can get too expensive to operate a bitcoin farm mining farm. Or governments decide that using precious electricity production on hashing blocks is the same as other forms of pollution and regulates it a…

Miners are incentivized to use renewable energy because it's cheaper and impacts their profit margins considerably.

Is energy use a concern when you're primarily dealing with solar/hydro power?

Re: What I Think of Bitcoin

#193

Post by saalweachter »

HourglassFR wrote: post #134
CyberDildonics wrote: post #58

Earlier quoted context omitted.

Everyone who invests in bitcoin is breaking the cardinal rule of investing: don't invest in something you don't understand. If people realized that bitcoin's -average- transaction fee is around $25 USD because it is restricted (for no technical reason) to a few transactions per second (less throughput than 240p youtube videos) they would at least move on to other cryptocurrencies. If people realized that a sudden dro…

> If people realized that a sudden drop in price will mean a sudden drop in mining power, which will mean a sudden drop in blocks being generated, which will mean a sudden drop in throughput, they might be even more eager to get out of it. I agree with your overall argument but as I understand it, this is false. If the mining power of the whole network drops, the proof of work will become simpler so as to have a roug…

At one point this was approximately true; I'm honestly not sure if it still is.

The problem was how the difficulty was decided -- it looked at the last N blocks that were successfully mined to decide whether it needed to up or down the difficulty. If you suddenly lost 90% of your mining capacity, it would only adjust the difficulty after several more blocks were mined, each of which would take ~100 minutes instead of the usual ~10. The system would eventually right itself, but it wasn't fast.

I can't recall if this ever became a problem in practice, or whether there was a code change to make it resolve faster.

Re: What I Think of Bitcoin

#194

Post by mastermojo »

gaff33 wrote: post #102
thesausageking wrote: post #34

Earlier quoted context omitted.

Tether FUD always returns when there's an influx of a lot newcomers to Bitcoin. It's been debunked over and over. Here's one by Nic Carter that explains why these "takedowns" are completely wrong: https://medium.com/@nic__carter/assessing-bitcoins-liquidity...

Tether fails bond pricing 101. If you have an IOU from the US government for $100 it's worth about $99 on the open market. If you have an IOU from a highly rated US company (e.g. Ford) for $100 you'd expect it to be worth about $94. Yet we're somehow supposed to believe than an equivalent IOU from tether is worth more?! Oh and the US Government and Ford will probably pay you some form of interest if you hold it long…

This is the part that confuses me too.

If the market believes Tether is not backed by real currency, shouldn't it be trading at a discount to USD?

Re: What I Think of Bitcoin

#195

Post by mastermojo »

mempko wrote: post #83

I think there is a huge tail risk that Ray Dalio missed about bitcoin. https://cbeci.org/ It's incredibility energy intensive and as the world works towards reducing the our impact on the climate, it's possible energy can get too expensive to operate a bitcoin farm mining farm. Or governments decide that using precious electricity production on hashing blocks is the same as other forms of pollution and regulates it a…

In the free market people will mine bitcoin if it's profitable. That is, if bitcoin is valuable enough and if energy is cheap enough and if the overall network hash rate is low enough.

Any changes to network hash power, bitcoin prices and energy cost may cause miners to scale down operations and lower overall network hash. Then at a certain network hash rate it will become profitable again.

Re: What I Think of Bitcoin

#196

Post by jstrong »

orange_tee wrote: post #93
lalaland1125 wrote: post #24

This post should be mostly discounted because Ray doesn't really seem to be aware of the true risk of the Tether scam, the biggest component of and risk to Bitcoin's value. For those not aware, Tether is a "stable coin" that issues tokens that supposedly represent dollars and can be used as a medium of exchange. However, it's widely suspected that Tether is unbacked and printing fake dollars and even Tether itself ha…

All of this shows how the supposed transparency of Bitcoin is useless. The blockchain does not really tell you anything. Price goes up 500%. Nobody knows why. People speculate it is because of Tether or some cabal of Chinese BTC mining tycoons or exchanges faking volume;, or WallSt playing their voodoo with billions worth of BTC. What other asset has this situation where the reason for the movement of its price is so…

> Price goes up 500%. Nobody knows why.

welcome to currency trading

Re: What I Think of Bitcoin

#197

Post by ballofrubber »

rspeele wrote: post #182
ballofrubber wrote: post #180

Earlier quoted context omitted.

Even at the current state you wouldn't be able to source all the asics needed for a 51% attack.

Why buy them yourself? Just pay the people who already have them to find hashes for you. Pay noticeably better than the existing pools and they would line up at your door. Miners are motivated by profit. They won't necessarily even know that you're trying to do a 51%, just that you're buying hashrate and are willing to pay them more than they're getting elsewhere. edit: In fact, you could run a legitimate mining pool…

The motivation is extremely simple, as you can just short bitcoin, do your stunt and then cash in the rewards as you just crashed bitcoin.

However the game theory behind what you are saying is completely nonsense, which is why no one ever did nor will do your technically and economically impossible stunt.

Re: What I Think of Bitcoin

#198

Post by ballofrubber »

hjek wrote: post #153
ballofrubber wrote: post #121

Earlier quoted context omitted.

1. You don't decide whats a waste of energy or not. 2. https://www.youtube.com/watch?v=xLYYh4aPXAM 3. Bitcoin Mining will make investments in renewable energy a lot less riskier as you can scale up as much as you want and always have a buyer. This drives out fossil fuel miners 4. Once bitcoins true price has been found, holders will spend to consume as much as they need/want to. Just like every other currency, except…

> 1. You don't decide whats a waste of energy or not. Whether or not it's a "waste", it's certainly a massive amount. More than all of Argentina or Netherlands[0], as was posted here on HN recently. As of 2020, every single Bitcoin transaction uses the equivalent of 15 full charges of a Tesla car battery[1]. Also: You don't decide whether I (or others) decide what's a waste of energy or not. [0]: https://cbeci.org/cb…

> The amount of electricity consumed every year by always-on but inactive home devices in the USA alone could power the Bitcoin network for 1.7 years

I don't know about you, but I see people escaping tyranny in monetary policy as less wasteful than US standby devices.

Re: What I Think of Bitcoin

#200

Post by MrMan »

itsoktocry wrote: post #49
thesausageking wrote: post #34

Earlier quoted context omitted.

Tether FUD always returns when there's an influx of a lot newcomers to Bitcoin. It's been debunked over and over. Here's one by Nic Carter that explains why these "takedowns" are completely wrong: https://medium.com/@nic__carter/assessing-bitcoins-liquidity...

> Tether FUD What's the opposite of FUD, when people with a massive financial stake in something do nothing but tell everyone everything is great all the time, and never acknowledge any issues?

1/FUD
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