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Steam is no longer supporting Bitcoin

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Re: Steam is no longer supporting Bitcoin

#401

Post by runeks »

vertex-four wrote: post #197
runeks wrote: post #164

Earlier quoted context omitted.

Indeed there are clearing protocols on top of Bitcoin, which can reduce fee-paying to only occur upon depositing and redemption. But the Bitcoin blockchain is still limited to ~20 million of such transactions per month[1]. Only if we remove the withdrawal transactions from the equation, and start trading unconfirmed transactions as regular bitcoins (confirmed transactions), can we get around this limitation (such tha…

A Lightning Network transaction results in one of two things - a proof that a certain amount of bitcoins can be withdrawn at any time (minus some delay), or a proof of cheating. Surely a proof that you can withdraw a certain amount of bitcoins is more-or-less equivalent to that many bitcoins, and therefore any rational actor - including your suppliers - should accept it as such? This isn't equivalent to unconfirmed t…

> Surely a proof that you can withdraw a certain amount of bitcoins is more-or-less equivalent to that many bitcoins, and therefore any rational actor - including your suppliers - should accept it as such?

The problem is fees. If this rational actor has 10,000 proofs of payment from as many different people, then the settlement transaction might require the redemption of up to 10,000 inputs, which would make payments prohibitively expensive. It may even be impossible to settle in a single block, since the transaction (including dependencies) might exceed the maximum block size.

A proof that 0.001 BTC can be withdrawn at any time isn’t very useful if the cost of withdrawal is 0.001 BTC.

In other words, LN surely has the value transfer part solved. But I don’t see how it solves the clearing part, that is: grouping multiple payments from different clients into a single, low-fee Bitcoin transaction. I understand how fees are saved on multiple payments from the same client (that’s what a payment channel does), but not how it would work with payments from many different clients (which is what merchants need to handle).

Re: Steam is no longer supporting Bitcoin

#402

Post by thaumasiotes »

dclowd9901 wrote: post #391
thaumasiotes wrote: post #225

Earlier quoted context omitted.

I think dclowd9901 was getting at a different question, which I'll present by analogy: I incorporate with 1,000,000,000 shares of stock. I sell 20 shares of stock to my good friend for $50. Is my company now worth 2.5 billion dollars? The answer to this worry is that the value of the good (bitcoins or stock shares, or anything else) is reliable in proportion to the total trading volume, not in proportion to the amoun…

Thank you; you explained this much much better than I did. But your answer, I don't think is sufficient. Just because total trading volume supports the figure doesn't mean that it's valid. If I've invested a small amount of money into the currency (as I suspect most of its buyers have), I've essentially bought into an insane price for little or no "skin". In other words, the price could be high simply because there's…

By "total trading volume" I meant to total across buyers and sellers, not to total across history.

Going back to the analogy, suppose I incorporate with 1,000,000,000 shares of stock and sell 20 shares to my friend for $50. He forgets about them, because after all the whole thing was just a joke.

My company has a market capitalization of $2.5 billion, of which I own $2,499,999,950. That paper wealth is worthless, because the daily (or whatever) trading volume of stock in the company is $0, suggesting that if I tried to realize my immense wealth, I wouldn't be able to.

Suppose instead that I sold 500,000 shares to my friends for $50 (total - 10,000 shares to the dollar), and that they sold the shares on to the public, and that now 10,000 shares trade per day at $2.50 per share.

My company has the same market capitalization of $2.5 billion. I own $2,498,750,000 of that (plus $50 of cash!) -- not as much as I had in the first example, but still pretty good. Just as in the first example, the daily trading volume suggests that this wealth is mostly illusory -- the tiny $25k / day market will be quickly overwhelmed if I try to sell $1 million worth of stock, and the trading price will plummet. However, unlike in the first example, my wealth is not entirely illusory. If I try to pick up an extra $5,000, I'll probably have to sell more than 2,000 shares of stock, but the trading volume can support that amount.

As long as there is active trading at a price, that price is real. There is no such concept as trading enough of a bitcoin for the price of "a bitcoin" to be "real"; what matters is whether you're trading enough of the market to move the price single-handedly. If the amount that you want to trade is much less than trading volume, you can more or less rely on the market price. If you want to trade an amount which is noticeable relative to trading volume, you're going to change the market price.

Put another way, if bitcoin trade volume is 100,000 bitcoins per day, you can sell one bitcoin at the market price even if nobody ever buys or sells more than .00001 bitcoin in a single transaction.

Re: Steam is no longer supporting Bitcoin

#403

Post by thaumasiotes »

iopq wrote: post #389
thaumasiotes wrote: post #224

Earlier quoted context omitted.

The claim is that (1) if the value of a currency is unstable, it won't be useful as a medium of exchange, and that (2) whether it's unstable because it's rising or because it's falling does not affect the validity of (1). The reason for (2) is that an exchange has two parties. If the value of your currency is cratering, it won't work as a medium of exchange because vendors won't accept it, which prevents trade from h…

It doesn't prevent trade just as effectively. Trips to Seoul don't pay for themselves. What do I care if my BTC might be worth more later? In the long run, we're all dead. I want to go on a vacation NOW.

What does a vendor care if your BTC might be worth less later? He's hungry NOW.

Re: Steam is no longer supporting Bitcoin

#404

Post by tomkarlo »

ForHackernews wrote: post #349
speedplane wrote: post #342

Earlier quoted context omitted.

Why would it be particularly easier to manipulate bitcoin pricing over other stocks/securities? Simply because the authorities don't understand it yet, or something to do with the nature of crypto-currency itself?

Because there are relatively few buyers and sellers in the market and the amounts of transactions are small, so one big mover can shift the price a lot. According to some blockchain site[0] the average transaction volume for BTC is something like $2.25m USD equivalent For comparison, on an average day, SPY[1], which is just one security (albeit a popular one) trades something around $17,160m (e.g. $17.16b). [0] https…

Because there's fundamental value behind most traditional securities, even if it's well below the current market price. If you hold a bond, it will (usually) pay interest and principal. Equities carry the value of the cash holding of the company, plus the potential for future dividends. These cash flows act as an anchor on the value of those securities (in both directions, up and down.)

Re: Steam is no longer supporting Bitcoin

#405

Post by tomkarlo »

ForHackernews wrote: post #341
LsDmT wrote: post #306

Earlier quoted context omitted.

What you mean? You can short any crypto currency on many exchanges. Bitfinex and GDAX being the biggest right now.

And when bitcoin crashes, and the exchange "gets hacked", goes bankrupt, and the owners run away to some international destination, who do you claim your USD back from?

If you're shorting, you get the $ up front and have to supply the security when you "cover". Not having to "cover" the short would actually be better.

Re: Steam is no longer supporting Bitcoin

#406

Post by JBSay »

tbabb wrote: post #392
JBSay wrote: post #368

Earlier quoted context omitted.

I wonder how real currencies existed before central banks...

They weren't stable.

You mean stable like the US dollar which went from $35 per ounce of gold when Nixon closed the gold window to $668 ten years later? By contrast the aureus, the solidus, the fiorino and many other metal based currencies preserved their value over several centuries. What eventually destroyed those currencies was not the lack of a central bank but on the contrary eventual debasement by the central authority.

Re: Steam is no longer supporting Bitcoin

#407

Post by tbabb »

JBSay wrote: post #406
tbabb wrote: post #392

Earlier quoted context omitted.

They weren't stable.

You mean stable like the US dollar which went from $35 per ounce of gold when Nixon closed the gold window to $668 ten years later? By contrast the aureus, the solidus, the fiorino and many other metal based currencies preserved their value over several centuries. What eventually destroyed those currencies was not the lack of a central bank but on the contrary eventual debasement by the central authority.

Actually, I'm glad you pointed to the failure of the gold standard. It's a great example of why commodity money is dangerous.

The gold standard was abolished because the economy was on the brink of collapse. A dollar grossly mismeasured the value of an ounce of gold, because there were far FAR mare dollars than gold to back them, and the mapping of gold to dollars was not adjusted at all (from $35/oz) despite the discrepancy growing and growing for decades. In a sense, each ounce of gold was being double-counted 100 times over by so many dollars floating around in the economy. That situation was horribly unstable, because it was at huge risk of a run on gold (You'd have a lot more wealth if you exchange your dollar for gold; because of the aforementioned double counting, an ounce of gold actually corresponds to a great many dollars. If everyone had realized that and done it, the economy would have been toast).

Disconnecting the dollar from gold allowed the value of an ounce of gold to be correctly measured. So while other prices in the economy remained stable, gold shot up, because now the market was free to price it accurately (reflecting that the economy had grown far faster than the supply of gold). That doesn't indicate inflation, it precisely illustrates how dangerously out of whack things were before the gold standard was lifted.

Re: Steam is no longer supporting Bitcoin

#408

Post by librvf »

blueprint wrote: post #371
librvf wrote: post #296

Earlier quoted context omitted.

When it hits all of: Acceptability Durability Divisibility Stability Portability (Elasticity) If you can't spend it easily, it's not a (functioning) currency. If it spoils or decays within your lifetime it's not a currency. If it's not something you can divide in order to make payments of a more-or-less arbitrary amount, it's not a currency. If you can't predict how much of the asset you will need to pay your bills n…

Are you missing fungibility or is that covered?

Missed it. In my mind I think I lumped it in with divisibility, which is related but not quite the same thing.

Re: Steam is no longer supporting Bitcoin

#409

Post by librvf »

cesarb wrote: post #377
librvf wrote: post #296

Earlier quoted context omitted.

When it hits all of: Acceptability Durability Divisibility Stability Portability (Elasticity) If you can't spend it easily, it's not a (functioning) currency. If it spoils or decays within your lifetime it's not a currency. If it's not something you can divide in order to make payments of a more-or-less arbitrary amount, it's not a currency. If you can't predict how much of the asset you will need to pay your bills n…

> If you can't predict how much of the asset you will need to pay your bills next month, it's not a currency Back in the hyperinflation days, we couldn't predict how many Cr$ we would need to pay our bills in the next month. That didn't keep it from being a currency.

That period did not last. Yes, if you try hard enough and look narrowly enough you can find exceptions to any of these rules, but it holds as a general guideline. If hyperinflation had continued indefinitely, it's probable some other commodity would have supplanted it as a de facto currency.

Re: Steam is no longer supporting Bitcoin

#410

Post by blueprint »

librvf wrote: post #408
blueprint wrote: post #371

Earlier quoted context omitted.

Are you missing fungibility or is that covered?

Missed it. In my mind I think I lumped it in with divisibility, which is related but not quite the same thing.

Nice. In that case, I wonder if you've ever heard of Monero? :)
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