Bitcoin's Shared Ledger Technology: Money's New Operating System • Hacker News Board

Re: Bitcoin's Shared Ledger Technology: Money's New Operating System

#31

Post by TheDong » Sun, Sep 13, 2015, 1:52 AM UTC

brighton36 wrote: post #23

TheDong wrote: post #19

Earlier quoted context omitted.

> only charge a tiny margin over the costs of bandwidth, energy and storage. The margin charged in terms of energy is massive . The bitcoin network can't handle many TPS because each transaction needs significant computational work to secure it. On the other hand, if I trust my database I can do the tiny work to write it, make sure I've got consensus among my DB nodes it's written, and be done with it. I'd say that b…

That's not even a little true. The transaction requires little/no work whatsoever. The miners require precisely as much work as there is speculative value for bitcoin. If Bitcoin were worth $10,000 per bitcoin - the energy burned per transaction would be 40 times higher. But that is not to say that the transaction itself required this expense. Mt Gox had as much to do with bitcoin as it did to do with http. I wouldn'…

The transaction has to be included in a block. That requires proof of work.

As you say, the energy burned should be proportional to the value of bitcoin; if I have 100 BTC then I have a vested interest in mining outside of gaining new BTC -- I also want to protect the BTC&transactions I have from attacks.

The argument that it's okay to spend that amount of money securing that amount of money, however, is nonsensical.

Transactions in traditional databases do take almost no work. There's no thousands of computers computing and discarding hashes just to be able to add and subtract some numbers.

I'll acknowledge that MtGox isn't a good thing to reference here, but the fact of the matter is that bitcoin is rife with things that a regular man would call "unreliability".

I don't appreciate that you immediately condescend that I don't understand anything to do with bitcoin when your response has little substance.

Your response is basically "transactions don't require that energy is burned but energy is burned for transactions" and you have the gall to say I don't understand anything?

Re: Bitcoin's Shared Ledger Technology: Money's New Operating System

#32

Post by brighton36 » Sun, Sep 13, 2015, 2:06 AM UTC

TheDong wrote: post #31

brighton36 wrote: post #23

Earlier quoted context omitted.

That's not even a little true. The transaction requires little/no work whatsoever. The miners require precisely as much work as there is speculative value for bitcoin. If Bitcoin were worth $10,000 per bitcoin - the energy burned per transaction would be 40 times higher. But that is not to say that the transaction itself required this expense. Mt Gox had as much to do with bitcoin as it did to do with http. I wouldn'…

The transaction has to be included in a block. That requires proof of work. As you say, the energy burned should be proportional to the value of bitcoin; if I have 100 BTC then I have a vested interest in mining outside of gaining new BTC -- I also want to protect the BTC&transactions I have from attacks. The argument that it's okay to spend that amount of money securing that amount of money, however, is nonsensical.…

Your claim was that there was a 'cost per transaction'. This is easily proved false when you examine the number of transactions in a block. If there were a cost per transaction, some blocks would cost less to produce than others (and/or returning varying rewards to miners. 2. the cost per transaction is directly relative to the price per bitcoin.

As for traditional databases,they are almost always more efficient - I think many of these bitcoin companies are absurd.

As for your pennies reference, I simply don't understand why the cost of a penny is at all relevant. At best, Bitcoin isn't "real" money, and even if it were, I don't know what seniorage costs add to this discussion.

The unreliability of bitcoin may be worth discussing, but that's tangential to your original post. Thus far, I think it's done pretty well in that department considering how new and exotic this technology is.

Your hubris on matters that you clearly don't understand justifies my response, which IMO was fair, balanced, and respectful. Don't rephrase my response unless you wish to misrepresent them, my words stand alone and don't need a tldr.

Re: Bitcoin's Shared Ledger Technology: Money's New Operating System

#33

Post by brighton36 » Sun, Sep 13, 2015, 2:08 AM UTC

Ologn wrote: post #6

For all the bubble talk...if there is any sign of a bubble, it is Bitcoin. Bitcoins are completely worthless, they have no value. The price action shows it - they are currently bouncing between $230 and $235, six months ago that was $260, and one year ago it was $400. It is headed to $0. The smell of scam is all over it. The inventor hides his identity. Bitcoin companies are awash in scams and criminal charges - Mt.…

The intrinsic value of bitcoin (if this matters) is immutable storage. You see this utilized with projects such as counterparty. The non-intrinsic value of bitcoin is the ability to engage in censored commerce. (backpage, wikileaks, silk road, etc.)

Re: Bitcoin's Shared Ledger Technology: Money's New Operating System

#34

Post by throwaway3453 » Sun, Sep 13, 2015, 2:08 AM UTC

Ologn wrote: post #20

joeyspn wrote: post #17

Earlier quoted context omitted.

> The Bitcoin hype machine can't answer one simple question - why do Bitcoins have any value? They can't give a rational answer to this. The answer is simple: Because there's enough number of people that agrees to use it as commodity money and medium of exchange.

That's a tautological answer. When a Bitcoin was worth over 4 times its present value a number of months ago, the same answer could be given - "it's worth that because people will pay for that". I can give a rational answer for why commodities like apples have value, or a gallon of gasoline, or a table, or a shirt. Even houses in 2007 real estate development projects in the outskirts of Sacramento have a rational (if…

I suspect you're being deliberately ignorant to why Bitcoin, a fixed quantity commodity that is immune to counterfeiting, has value.

You're confounding physical utility and symbolic value. I don't have a problem with Bitcoin becoming a wild success or another case of Tulip Mania. I do have a problem with your feigned ignorance just so you can maintain your initial position.

You're doing yourself a disservice for life. There's no shame in understanding a concept more and discarding misconceptions.

Re: Bitcoin's Shared Ledger Technology: Money's New Operating System

#35

Post by hermanmerman » Sun, Sep 13, 2015, 2:16 AM UTC

Ologn wrote: post #20

joeyspn wrote: post #17

Earlier quoted context omitted.

> The Bitcoin hype machine can't answer one simple question - why do Bitcoins have any value? They can't give a rational answer to this. The answer is simple: Because there's enough number of people that agrees to use it as commodity money and medium of exchange.

That's a tautological answer. When a Bitcoin was worth over 4 times its present value a number of months ago, the same answer could be given - "it's worth that because people will pay for that". I can give a rational answer for why commodities like apples have value, or a gallon of gasoline, or a table, or a shirt. Even houses in 2007 real estate development projects in the outskirts of Sacramento have a rational (if…

1. Gold had value 4000 years ago because it was rare enough that people could use it as a currency, not because it was a useful metal. Incidentally, it's not useful at all compared to steel, copper, aluminum, etc. hence its use in jewelry.

2. Gold has value today because some people are willing to buy it and some others are willing to sell it. I don't see how it couldn't be the same with Bitcoins (or anything for that matters). Can you explain to me why dollars have value? Euros? Drachmas?

3. You repeating that two successful investors said something at some point doesn't mean they are right, and you saying that they "agree with you" doesn't mean you are right. When trying to find the truth, blindly referring to authority is the last thing you should do.

Re: Bitcoin's Shared Ledger Technology: Money's New Operating System

#36

Post by TheDong » Sun, Sep 13, 2015, 2:17 AM UTC

brighton36 wrote: post #24

TheDong wrote: post #22

Earlier quoted context omitted.

Proof of Work does disincentive spam a little because you can only spam as quickly as the network can incorporate transactions (6tps iirc) due to the slow nature of the network. If the network were more efficient and used vector clocks, you could spam much more efficiently too. If the majority of parties can decide such things without a proof of work, then a single person can just create a large number of accounts an…

Miner fees mediate spam, not the transaction count. (which btw is likely to be enormously higher than 6tps)

https://en.bitcoin.it/wiki/Scalability#Scalability_targets

> Today the Bitcoin network is restricted to a sustained rate of 7 tps due to the bitcoin protocol restricting block sizes to 1MB.

I've heard the number from other sources as being 6 or 7 before too, particularly after the scale tests I believe.

I know there's the blocksize increase debate which will make this comment inaccurate soon.

Also, I believe that a 0 fee transaction will still get processed eventually and, since such a thing is valid, it's not going to stop spam entirely, just slow it a lot.

Re: Bitcoin's Shared Ledger Technology: Money's New Operating System

#37

Post by [deleted] » Sun, Sep 13, 2015, 2:17 AM UTC

brighton36 wrote: post #24

TheDong wrote: post #22

Earlier quoted context omitted.

Proof of Work does disincentive spam a little because you can only spam as quickly as the network can incorporate transactions (6tps iirc) due to the slow nature of the network. If the network were more efficient and used vector clocks, you could spam much more efficiently too. If the majority of parties can decide such things without a proof of work, then a single person can just create a large number of accounts an…

Miner fees mediate spam, not the transaction count. (which btw is likely to be enormously higher than 6tps)

[deleted]

Re: Bitcoin's Shared Ledger Technology: Money's New Operating System

#38

Post by dogma1138 » Sun, Sep 13, 2015, 2:31 AM UTC

natrius wrote: post #5

kolbe wrote: post #4

One of two things: I either do not understand Wall Street's obsession with blockchainesque technologies, or Wall Street's obsession with it is totally emblematic of their buzzword-obsessed technology-ignorant groupthink that fried the tech industry in the late 90's. I'm seeing companies like this pop up all over the place. Blythe Masters's new venture[1], which made the cover of this month's Bloomberg Business, seems…

People pay Nasdaq to make their trades reliable and safe. Reliable and safe trades can now be done by a swarm of computers running free software, and they only charge a tiny margin over the costs of bandwidth, energy and storage. How is Wall Street supposed to make money now? They're all trying to find out, and they all need to be the first. Financial profits will be much smaller, and the slow movers will have a smal…

They will still make money the same way, heck they'll make much more money than before because operational costs and inherit risks will be much lower. Today it costs banks to transfer money for multiple reasons the blockchain can remove some of those reasons but it will never be accessible to you as a consumer.

The blockchain can integrate allot of the stuff that for example SWIFT is currently used for but combine it with services that correspondent banking and clearinghouses provide to facilitate the actual transaction. This means that if a bank A wants to move money to bank B it will be much easier and safer (from a risk perspective) but it doesn't mean you'll enjoy those benefits just like you can't install a SWIFT gateway at home.

Re: Bitcoin's Shared Ledger Technology: Money's New Operating System

#39

Post by dogma1138 » Sun, Sep 13, 2015, 2:37 AM UTC

natrius wrote: post #3

The "shared ledger" analogy for blockchains is limiting. If you want to understand the potential applications, you should stop using it in your thinking. Blockchains give us publicly writable databases . Such a thing never existed before. A blockchain has one or more programs that define what can be written to the public database. Bitcoin's program is mostly about distributing the 21 million coins to miners and preve…

Calling it a public database is misleading, it's not really public even the Bitcoin blockchain ins't really public as it's access isn't free (proof of work).

The blockchain that will be used by banks won't be public just like SWIFTNet and other similar banking networks aren't public. What WS and the banks want is a private blockchain to replace the current messaging and clearance systems and services into something which will be cheaper, faster and will have lower intrinsic risk.

Banks, clearinghouses and other similar financial institutions will have access to it and will provide the needed infrastructure to support it, it will allow them to conduct their financial operations at a much lower costs increasing their profit margins it's not meant for you to be accessing it from your mobile phone everytime you use apple pay.

Re: Bitcoin's Shared Ledger Technology: Money's New Operating System

#40

Post by CuriousSkeptic » Sun, Sep 13, 2015, 2:37 AM UTC

Ologn wrote: post #20

joeyspn wrote: post #17

Earlier quoted context omitted.

> The Bitcoin hype machine can't answer one simple question - why do Bitcoins have any value? They can't give a rational answer to this. The answer is simple: Because there's enough number of people that agrees to use it as commodity money and medium of exchange.

That's a tautological answer. When a Bitcoin was worth over 4 times its present value a number of months ago, the same answer could be given - "it's worth that because people will pay for that". I can give a rational answer for why commodities like apples have value, or a gallon of gasoline, or a table, or a shirt. Even houses in 2007 real estate development projects in the outskirts of Sacramento have a rational (if…

Things don't have value on their own. They have value to someone in some context. Your Apple has value to a hungry person because it can be eaten, it has value to an apple producer, or merchant, because it can be sold, and it has value to a truck driver because it needs transporting. It's not an intrinsic property of the apple. It is entirely a result of the plans and hopes of those individuals who deals with the apple.

You can of course counter that all value is derived from the hunger of the apple eater, why else would the driver, merchant and producer bother?

And that's where something like Bitcoin could enter the picture. It establish value in the other direction. It has value to the apple eater because it can be used to buy an apple, to the truck driver because it buys fuel, to the merchant because it buys more apples, and to the producer because it buys a well earned vacation trip.

The intrinsic properties of being of a fixed supply, securely transferable, highly divisible and cheap to store and move around makes it useful as an intermediate token of value exchanged.

That said, I do think the high volatility of Bitcoin takes away much of is usefulness as a currency. In this regard it's to much like gold. A future replacement should probably have an elastic supply like the credit based currencies we are used to dealing with.