Bitcoin - Part 2

Status
Not open for further replies.
This is The End said:
With bitcoin having hit $10,000, and with people cashing out thousands of real $$ every day on various markets, I think it's about time for several people from this thread to eat some crow.



http://preev.com/

https://localbitcoins.com
Click to expand...

I don't think anyone here ever said that you couldn't make money with BTC. What was said was that A) BTC looked like a scam (turned out not to be true, imo) and B) that it's difficult to sell a lot of BTC at one time.
 
It is hard to see any realistic trajectory of btc into an actual currency used in everyday transactions - for that it would need to be much more stable and not be seen as an investment expected to bring profit. What makes it practical for crime is not only it's untraceability but also it's convertability into real currencies. If we would, for some bizarre reason, give up modern central banking, then we should use prescious metals as the base.
 
llwyd said:
It is hard to see any realistic trajectory of btc into an actual currency used in everyday transactions - for that it would need to be much more stable and not be seen as an investment expected to bring profit. What makes it practical for crime is not only it's untraceability but also it's convertability into real currencies. If we would, for some bizarre reason, give up modern central banking, then we should use prescious metals as the base.
Click to expand...

It's not a currency now, it's a digital asset that people expect to appreciate. If and when the price eventually stabilizes, it may or may not function as a currency based on it's properties. You claim it's untraceable, yet the blockchain represents a public ledger of every single bitcoin transaction in history. If you can associate wallets with identities, which isn't that difficult, then you have a complete forensic record of any given individual's bitcoin dealings. In fact, there is a company that is dedicated to just this purpose: https://www.chainalysis.com/. Abolishing the fiat money scam and central banking wouldn't be bizarre, it would be enormously beneficial to humanity at large. I agree that precious metals make the best money, but they would first have to be liberated from the dynastic banking families that stole most of them. I also think freedom in money is important, which is why digital crypto-currencies deserve a seat at the table.
 
ChristianProgressive said:
Bitcoin and all other cryptocurrencies are counterfeit by definition. Only sovereign nations may issue legitimate currency.
Click to expand...

Clearly, you don't understand what counterfeit means. Bitcoin isn't attempting to pass itself off as anything other than an anti-inflationary digital crypto-currency, which so far is acting more like an asset than a currency.

The US dollar at inception was the spanish milled dollar, defined as having 371.25 grains of fine silver as per the Coinage Act of 1792. Therefore, one could reasonably claim that every single fiat electronic and paper US dollar is a "counterfeit".

I find this to be the most interesting paragraph from the coinage act:


Section 19 of the Act established a penalty of death for debasing the gold or silver coins authorized by the Act, or embezzlement of the metals for those coins, by officers or employees of the mint; this section of the Act apparently remains in effect and would, in theory, continue to apply in the case of "any of the gold or silver coins which shall be struck or coined at the said mint." (At present the only gold or silver coins struck by the US mint are the American Silver Eagle and the American Gold Eagle coins, some Proof coinage at the San Francisco Mint, such as the silver US State Quarters, and much of the Commemorative coinage of the United States.) All other sections of the act have been superseded, as for example the Coinage Act of 1834 changing the silver-to-gold weight ratio. Various acts have subsequently been passed affecting the amount and type of metal in U. S. coins, so that today there is no legal definition of the term "dollar" to be found in U. S. statute.[5][6][7] Current statutes regulating coinage in the United States may be found in Title 31 of the United States Code.

​

People back then were obviously much more aware of monetary scams, and the importance of honest weights and measures in commerce.
 
The concept is unsustainable and wasteful.

I buy 10 Bitcoins. Transaction #1. I buy an item with 5 Bitcoins. Transaction #2. When there are 2020 transactions there are enough for one ledger block of 1MB. The header of the previous verified block is added to this block (hence the term block-chain). This block is distributed to Bitcoin miners who then compete to find a number (a nonce) which will produce a hashtag which has a target of 32 (or more) leading zeros. This requires such enormous computing power that it takes about 10 minutes to succeed. The first success gets a small number of Bitcoins, and the block is added to the public ledger which is on many computers. All miners then start on the next block.

With every 210,000 blocks the reward is halved. 50 bitcoins up to 210,000, 25 bitcoins up to 420,000 and 12.5 bitcoins up to 630,000. There are currently 496,493 bitcoins. Only 21 million will be produced. Various sites charge a fee of 0 to 2 % per transaction.

The target will be increased in difficulty so that the rate of 1 block every 10 minutes is maintained.

First bitcoin transaction was 10,000 for 2 pizzas . Values: May 2010 = $0.01; Feb 2011 = $1; Jul 2012 = $31; Dec 2012 = $2; Apr 2013 = $266; 2013 and 2014 range = $100 to $1,242; May 2017 = $2,000; Nov 2017 = $9,746.

Number of crypto-currencies is 1,324 and growing. Electricity usage for mining Bitcoin is 29 TeraWattHrs per year. Ireland used 25 TWhrs pa. Electrical usage per transaction is 285 kWhrs. $80 per transaction and increasing rapidly. Visa 82 billion transactions per year. Bitcoin is only 11 million.

It will burst. Any takers on predicting when?
 
PartSkeptic said:
The concept is unsustainable and wasteful.

< ... reasonable description snipped ... >

It will burst. Any takers on predicting when?
Click to expand...
Why would it "burst"? It is more likely that mining difficulty will plateau. This will happen when the cost of mining exceeds the value of the reward and transaction fees per block.

Alternatives to the "proof of work" which don't require escalating amounts of energy are already proving successful. (For example, ripple uses a "consensus" strategy).
 
Fudbucker said:
Why would bitcoin be better than using a credit card for an average person like myself?
Click to expand...

I'm no expert, but as I understand it, in a wallet to wallet transaction you'd avoid the normal credit card transaction fee %. Or rather the business would, ideally resulting in slightly lower pricing.
 
Fudbucker said:
Why would bitcoin be better than using a credit card for an average person like myself?
Click to expand...

Assuming you could actually pay for goods with it, your vendors would be saving the ~3% transaction fees and that would allow them to be more competitive and lower their prices for you. Plus, your savings wouldn't be perpetually devalued by the Federal Reserve.
 
Tippit said:
Assuming you could actually pay for goods with it, your vendors would be saving the ~3% transaction fees and that would allow them to be more competitive and lower their prices for you. Plus, your savings wouldn't be perpetually devalued by the Federal Reserve.
Click to expand...

I get 2% rewards points, an intermediary between me and my money, and a way to build up my credit score. That is more than worth a couple percentage points.

Bitcoin's niche seems to be extremely narrow. It's volatility is extreme. It's not a good currency. It's value is over-inflated.
 
Tippit said:
Assuming you could actually pay for goods with it, your vendors would be saving the ~3% transaction fees and that would allow them to be more competitive and lower their prices for you. Plus, your savings wouldn't be perpetually devalued by the Federal Reserve.
Click to expand...

Um, is this economist article correct in terms of transaction costs or are they instead thinking about mining costs?
https://www.economist.com/news/fina...illiquid-asset-can-be-harder-getting-bitcoins
But it is worth remembering that the cost of using bitcoin is going up. Each transaction has to be verified by “miners” who need a lot of computing power to do so, and a lot of energy: 275kWh for every transaction, according to Digiconomist, a website. In total, bitcoin uses as much electricity a year as Morocco, or enough to power 2.8m American households. All this costs much than processing credit-card transactions via Visa or MasterCard
Click to expand...

AT $0.098/kWh, it would cost $26.95 per transaction in electricity if each transaction represents 275kWh.
Bitcoin will completely fail as a currency although I believe something will rise up in its ashes the utilizes parts of its technology.
A currency that increases in value has many problems:
It discourages us from trading in goods and services because the price of those goods and services gets better every day, slowing down the economy.
It discourages any sorting of loaning of any kind making things like buying a house impossible. Imaging having a mortgage for $250,000 house in bitcoins 5 years ago. You would owe millions and millions of dollars today.
No central body like the Federal Reserve can control its supply which is a bad thing in my opinion. There is a reason the US dollar is the most successful currency in the world.
Bitcoin=tulips. Sooner or later the music is going to stop and a lot of people aren't going to have a chair to sit down in.
 
More on bitcoin's transaction fees:
http://mashable.com/2017/08/28/bitcoin-transaction-fees/#avUx0sYb3kqD
Four dollars. That's how much it'd cost me to send 0.01 bitcoins, or about $42, from one Bitcoin address to another right now.

And this is actually quite cheap compared to a few days ago, when transaction fees were even higher, making Bitcoin barely usable for microtransactions. And cheap transactions, especially for small amounts of BTC, are supposedly one of Bitcoin's biggest advantages.
Click to expand...
and
The average #Bitcoin transaction fee nears $7!
Click to expand...
Wow, $7 transaction fees and consuming enough electricity to run a whole country.

Also this:
https://motherboard.vice.com/en_us/...ty-consumption-ethereum-energy-climate-change
That would be $21.07 per bitcoin transaction when bitcoin was @ $7000!
his averages out to a shocking 215 kilowatt-hours (KWh) of juice used by miners for each Bitcoin transaction (there are currently about 300,000 transactions per day). Since the average American household consumes 901 KWh per month, each Bitcoin transfer represents enough energy to run a comfortable house, and everything in it, for nearly a week. On a larger scale, De Vries' index shows that bitcoin miners worldwide could be using enough electricity to at any given time to power about 2.26 million American homes.

Expressing Bitcoin's energy use on a per-transaction basis is a useful abstraction. Bitcoin uses x energy in total, and this energy verifies/secures roughly 300k transactions per day. So this measure shows the value we get for all that electricity, since the verified transaction (and our confidence in it) is ultimately the end product.
Click to expand...
It's worth asking ourselves hard questions about Bitcoin's environmental footprint
Click to expand...
Um, this isn't going to work.
 
portlandatheist said:
More on bitcoin's transaction fees:
http://mashable.com/2017/08/28/bitcoin-transaction-fees/#avUx0sYb3kqD

and

Wow, $7 transaction fees and consuming enough electricity to run a whole country.

Also this:
https://motherboard.vice.com/en_us/...ty-consumption-ethereum-energy-climate-change
That would be $21.07 per bitcoin transaction when bitcoin was @ $7000!


Um, this isn't going to work.
Click to expand...
I dunno, bitcoin has an inherent value as you have demonstrated in your post.
 
Fudbucker said:
Why would bitcoin be better than using a credit card for an average person like myself?
Click to expand...
With a credit card you are borrowing money. That is never better than using your own.

Tippit said:
Assuming you could actually pay for goods with it, your vendors would be saving the ~3% transaction fees and that would allow them to be more competitive and lower their prices for you. Plus, your savings wouldn't be perpetually devalued by the Federal Reserve.
Click to expand...
You forget that to get a miner to confirm your transaction you need to offer them a transaction fee (the smaller the fee, the few miners that are willing to confirm your transaction). As the reward per block decreases and the cost of mining increases, you will need to offer ever larger transaction fees to attract a miner.

portlandatheist said:
Bitcoin=tulips. Sooner or later the music is going to stop and a lot of people aren't going to have a chair to sit down in.
Click to expand...
GOTO 910.
 
This is The End said:
With bitcoin having hit $10,000, and with people cashing out thousands of real $$ every day on various markets, I think it's about time for several people from this thread to eat some crow.



http://preev.com/

https://localbitcoins.com
Click to expand...

I think the phenomenon is that speculators and true believers are hoarding bitcoins, buying them up at every opportunity and creating scarcity. There is a limited supply of bitcoins so that those which are being held for the long term are effectively out of circulation. Those in circulation are scarce. If too many try to cash out at once, the price would come crashing down again.
 
Status
Not open for further replies.

Back
Top Bottom