Author Topic: Cryptocurrency -- Is anyone on-board?  (Read 54271 times)

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Offline TerraHertz

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Re: Cryptocurrency -- Is anyone on-board?
« Reply #150 on: December 15, 2017, 02:12:43 am »
At a friend's house last night, with several non-tech people, and bitcoin came up. Oh the wailing and gnashing of teeth about not having gone into it years ago! And yet none of them really had any idea what bitcoin is or how it works, blockchain, etc. And when I asked, neither did any of them understand what the current fiat money is, or how it comes into existence in the economy. They sort-of understood the difference between gold-backed and fiat currency.

Today, I find the email phishers are starting to cotton onto the public bitcoin-yearning. See pic of the spam mail I received. An attached .exe file. Tell me, should I click on it?  (jk)
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Offline hendorog

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Re: Cryptocurrency -- Is anyone on-board?
« Reply #151 on: December 15, 2017, 02:40:50 am »
Chaum cracked several of the fundamental problems including providing cryptocash with a similar level of anonymity and privacy as real cash
Yes, with one more decisive extension. Real cash, consumption money at first is issued exclusively by a commercial bank. So it is not anonym at all, for example to pay a little bigger bill cash as, let's say, a used car, and you bring or want get this cash from the bank, not without declaring officially from whom to where the money comes and goes. That can't happen if you pay directly with bitcoin using its anonymous public and private keystrukture. This commercial and state surveillance is more true to the normal citizen as the money laundering criminal who has still other possibilities.

I'm certainly no expert on Bitcoin so may well be wrong, but it doesn't seem particularly anonymous to me.
It is a public ledger and all transactions are visible to anyone.
The anonymous aspect is just that nobody knows your address unless you tell them, and that you can generate a new address anytime.

So 'they' just need enough surveillance to associate an address with you, and/or with the entity that you are paying.
I imagine that the internet 'metadata' that is supposedly collected constantly, would go a long way towards doing that - or would at least considerably narrow down a list of possibilities.

There are not many Bitcoin transactions per second, so relating the events based on timing seems plausible to me.

 
 

Offline hwj-d

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Re: Cryptocurrency -- Is anyone on-board?
« Reply #152 on: December 15, 2017, 02:42:33 am »
Quote
Tell me, should I click on it?
Nothing happens. The picture is growing ...  :P
 

Offline hwj-d

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Re: Cryptocurrency -- Is anyone on-board?
« Reply #153 on: December 15, 2017, 03:33:26 am »
I'm certainly no expert on Bitcoin so may well be wrong, but it doesn't seem particularly anonymous to me.
It is a public ledger and all transactions are visible to anyone.
The anonymous aspect is just that nobody knows your address unless you tell them, and that you can generate a new address anytime.

So 'they' just need enough surveillance to associate an address with you, and/or with the entity that you are paying.
I imagine that the internet 'metadata' that is supposedly collected constantly, would go a long way towards doing that - or would at least considerably narrow down a list of possibilities.

There are not many Bitcoin transactions per second, so relating the events based on timing seems plausible to me.

I'm also not an expert too. As i see, you're right:
https://www.buybitcoinworldwide.com/anonymity/

But, if creditor and debtor both accept bitcoins, then you don't need a bank anymoore.
« Last Edit: December 15, 2017, 03:35:08 am by hwj-d »
 

Offline hendorog

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Re: Cryptocurrency -- Is anyone on-board?
« Reply #154 on: December 15, 2017, 05:24:55 am »
I'm certainly no expert on Bitcoin so may well be wrong, but it doesn't seem particularly anonymous to me.
It is a public ledger and all transactions are visible to anyone.
The anonymous aspect is just that nobody knows your address unless you tell them, and that you can generate a new address anytime.

So 'they' just need enough surveillance to associate an address with you, and/or with the entity that you are paying.
I imagine that the internet 'metadata' that is supposedly collected constantly, would go a long way towards doing that - or would at least considerably narrow down a list of possibilities.

There are not many Bitcoin transactions per second, so relating the events based on timing seems plausible to me.

I'm also not an expert too. As i see, you're right:
https://www.buybitcoinworldwide.com/anonymity/

But, if creditor and debtor both accept bitcoins, then you don't need a bank anymoore.


Yes, avoiding the need for a bank, and so lining their pockets, is an honourable goal.

This looks interesting. It doesn't require miners to validate transactions - which is a huge disadvantage of Bitcoin.
https://www.technologyreview.com/s/609771/a-cryptocurrency-without-a-blockchain-has-been-built-to-outperform-bitcoin/



 

Offline Decoman

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Re: Cryptocurrency -- Is anyone on-board?
« Reply #155 on: December 15, 2017, 06:00:02 am »
I wonder what IS crypto currency in some practical sense?

Would you sort of get paid by being given some string of numbers, and then.. when trying to pay with that string of data, the string data is hashed and then it is determined if the string data has value and maybe that data can be altered to be adjusted up or down?

Somehow, I just do not trust cryptography given the terrible state of computer security and the lack of privacy. I actually wrote a wall of text here about my naive thoughts about crypto currency, but I realized I actually have no good idea of how it works, so I deleted my initial text. I could say stuff referencing stuff from cryptography, but I can't connect the dots to show how cryptography works together with how crypto currency works. Would 'fully homomorphic encryption' be a part of future crypto currency?

Wild speculation, knowing nothing about crypto currency (because doing that is fun):
I can't help but wonder if maybe crypto currency could be said to be a hash system that sort of works like security by obscurity, in the sense of trusting data strings to hash as expected within a short time, but then, if you just hash them further, you could reveal even more data, as if the data strings could be backdoored that way.

I am curious to learn more about a vague question of mine: what a future "society" would be, if "society" was then being 100% dependent on using crypto currency? Would everything be just dandy, or could it be the proverbial police state? (If it really turns out that *somehow* crypto currency is just a means to control, but isn't really secure.) Maybe some money could have more privacy than others, being more difficult to hash, and then others would have less privacy, being easy to hash for meta tags as per design, as I wildly imagine for fun.

I can also vaguely imagine future crypto currency in the future existing as some kind of ephemeral string of numbers that are all controlled by some over arching crypto scheme (imagine ephermeral Diffie Hellman crypto for one time use (ideally)), as if, the data strings sat in a huge compartmentalized computer that ran 24/7, simply recreating data strings all day long, all year, as if, so to speak, re-print physical money to create this new design on paper money, to control who gets to use this money. :)
« Last Edit: December 15, 2017, 06:13:34 am by Decoman »
 

Offline hendorog

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Re: Cryptocurrency -- Is anyone on-board?
« Reply #156 on: December 15, 2017, 07:12:04 am »
I wonder what IS crypto currency in some practical sense?

Would you sort of get paid by being given some string of numbers, and then.. when trying to pay with that string of data, the string data is hashed and then it is determined if the string data has value and maybe that data can be altered to be adjusted up or down?

Somehow, I just do not trust cryptography given the terrible state of computer security and the lack of privacy. I actually wrote a wall of text here about my naive thoughts about crypto currency, but I realized I actually have no good idea of how it works. I could say stuff based on cryptography, but I can't connect the dots to just how crypto currency works.

Wild speculation, knowing nothing about crypto currency (because doing that is fun):
I can't help but wonder if maybe crypto currency could be said to be a hash system that sort of works like security by obscurity, in the sense of trusting data strings to hash as expected within a short time, but then, if you just hash them further, you could reveal even more data, as if the data strings could be backdoored that way.

I am curious to learn more about a vague question of mine: what a future "society" would be, if "society" was then being 100% dependent on using crypto currency? Would everything be just dandy, or could it be the proverbial police state? (If it really turns out that *somehow* crypto currency is just a means to control, but isn't really secure.)

Fundamentally it is based on variations on a one way algorithm. Given the question it is simple to calculate the answer. But given the answer it is very difficult to calculate the question.

There are practical security issues as well. But they can be managed, in the same way as you would manage normal money.

I wouldn't worry too much about a future society. None of the future society stuff I read in 1980 about 2000 was right, and I don't think we have all got any smarter since then!
 

Online Marco

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Re: Cryptocurrency -- Is anyone on-board?
« Reply #157 on: December 15, 2017, 07:31:14 am »
I am really surprised how many people do not understand the real character of "money"

What I pay food, rent and taxes with. It's never going to be bitcoin, multiple bucks of transaction fees and huge clearing times and all (Lightning is not a solution, it's unintuitive and needs vast amounts of bitcoin locked up to function for regular payments).

Anonymity with regards to bank and government is ridiculously overrated, almost everyone in first world nations except the criminals and tax evaders would prefer to be able to recover their account/money if they lost their wallet vs anonymity.
« Last Edit: December 15, 2017, 09:21:09 am by Marco »
 

Offline ebastler

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Re: Cryptocurrency -- Is anyone on-board?
« Reply #158 on: December 15, 2017, 09:39:44 am »
But, if creditor and debtor both accept bitcoins, then you don't need a bank anymoore.
Yes, avoiding the need for a bank, and so lining their pockets, is an honourable goal.

What exactly is the benefit if your replace a bank (and their fees) with a hugely inefficient, decentralized structure (with much higher transaction fees), plus a multitude of shady "exchanges" which somehow lose large sums of Bitcoin every now and then?
 

Offline hwj-d

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Re: Cryptocurrency -- Is anyone on-board?
« Reply #159 on: December 15, 2017, 10:29:18 am »
I am really surprised how many people do not understand the real character of "money"

What I pay food, rent and taxes with. It's never going to be bitcoin, multiple bucks of transaction fees and huge clearing times and all (Lightning is not a solution, it's unintuitive and needs vast amounts of bitcoin locked up to function for regular payments).
Over time, methods will develop to improve these technical disadvantages. What we all need, is a independent international paying system. What we have now, is a opaque crashing system, which drives people into total surveillance and dependency when cash is increasingly being pushed back.

That not intuitiveness (not unintuitiveness) blockchain handling remembers me to the tcp/ip protocol at the beginning of the internet, that is also an infrastructure that we needed because of our cultural development.

But I'm certainly not such a dreamer who automatically believes in the goodness of bitcoins, i'm watching this development. What could it hinder is professional trading of the big 'players' with it, and judicial intervention by prescribing state-controlled alternatives, or mock currencies like 'e-coins'.
 

Offline hwj-d

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Re: Cryptocurrency -- Is anyone on-board?
« Reply #160 on: December 15, 2017, 10:40:14 am »

What exactly is the benefit if your replace a bank (and their fees) with a hugely inefficient, decentralized structure (with much higher transaction fees), plus a multitude of shady "exchanges" which somehow lose large sums of Bitcoin every now and then?

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« Last Edit: December 15, 2017, 10:41:47 am by hwj-d »
 

Offline brucehoult

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Re: Cryptocurrency -- Is anyone on-board?
« Reply #161 on: December 15, 2017, 10:57:24 am »
But, if creditor and debtor both accept bitcoins, then you don't need a bank anymoore.
Yes, avoiding the need for a bank, and so lining their pockets, is an honourable goal.

What exactly is the benefit if your replace a bank (and their fees) with a hugely inefficient, decentralized structure (with much higher transaction fees), plus a multitude of shady "exchanges" which somehow lose large sums of Bitcoin every now and then?

Pretty much the entire problem with bitcoin transaction cost and inefficiency is the 1 MB limit on block size, together with there being only one block about every eight minutes. [1]

On average there are about 2500 transactions in each block and about 5 transactions a second.

The worldwide VISA network processes on average about 1750 transactions a second (though much more at peak times), so bitcoin is a factor of about 350 away from being able to match it.

A good forward-looking upgrade to bitcoin would be to allow blocks to be up to 1 GB in size, a thousand time more than now. The blocks would not actually grow to that size until bitcoin actually does rival VISA. At that point the cost per transaction (all else being equal to today) would drop from $100 to $0.10, which is entirely reasonable.

The mining difficulty (finding a nonce that makes the block hash have enough zeros) does not increase with the size of the block, as you make a partial checksum of the entire block and then just search for the trailing bytes that make it work.

If bitcoin had a VISA-rivalling 1 GB block every 8 minutes, that would be an average data transfer rate to each copy of the blockchain of around 2 megabytes per second. That's well within the capability of any modern home internet connection (or even mobile) and will only get easier in future. But we are very far from that now .. at the moment it's only 2 KB per second. You can do that easily on 1990's dial-up.

*Storing* a copy of the blockchain at a 1 GB block every 8 minutes would need 65 TB of new disk space every year. 3 TB disk drives are currently $60 so that's about $4000 of disks needed per year's data. You're probably not going to want to do that yourself at home, but in fact it's within reach of many people if they really wanted to. Don't forget -- that's for bitcoin with three times higher transaction volume than VISA has right now, world-wide. Today's actual bitcoin blockchain uses $4 of disk per year. And prices are only going to come down.


[1] the target is every ten minutes but it's more like eight minutes at the moment because of the growing number of miners and the hash difficulty only being adjusted every 2016 blocks (11 days or so).
« Last Edit: December 15, 2017, 01:28:09 pm by brucehoult »
 
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Offline hwj-d

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Re: Cryptocurrency -- Is anyone on-board?
« Reply #162 on: December 15, 2017, 11:07:36 am »
@brucehoult,
that's what i mean with "Over time, methods will develop to improve these technical disadvantages"  :)
 

Offline mariush

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Re: Cryptocurrency -- Is anyone on-board?
« Reply #163 on: December 15, 2017, 11:30:25 am »
Ethereum is trying to move from proof of work (where miners validate transactions, and you have a few hundred transactions in each block and so on) to proof of stake, where "miners" will no longer have to perform complex computations using video cards or processors to mine blocks.
This will also allow a huge increase in the number of transactions that can be processed per second (a few days ago the ethereum network processed more transactions a day than bitcoin network processed) and it will also work extremely way with the concept of sharding which would allow huge parallelization

It's gonna be a few months at the very least, probably 1-2 years or more... but it's gonna be implemented


For the curious :





// Ethereum's problem (kinda) is that it's really hard on the storage ... if you want to hold to be a full node, holding the full blockchain which is now probably over 100 GB in size - i have the "simplified" blockchain and it's 68 GB and there's a huge amount of seeks and reading small bits from random places each time some new information is added.
You really need a SSD to keep up with the additions today when you don't have a huge amount of transactions.... sharding may help by creating chunks of 50 to maybe a few hundreds blocks and limiting seeks and changes within the files for those blocks

« Last Edit: December 15, 2017, 11:34:58 am by mariush »
 

Online Marco

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Re: Cryptocurrency -- Is anyone on-board?
« Reply #164 on: December 15, 2017, 11:47:12 am »
Over time, methods will develop to improve these technical disadvantages. What we all need, is a independent international paying system. What we have now, is a opaque crashing system, which drives people into total surveillance and dependency when cash is increasingly being pushed back.

Surveillance is a necessity in our multicultural low trust society, when I trust government more than my neighbours I will sacrifice privacy from government for security and equity (if I have to suffer taxes everyone does). Without pervasive surveillance freedoms I care about would be heavier constrained than they are, more restrictions on over the counter sales of household chemicals for instance, or even something as basic as the components to easily DIY drones.

As it stands I see no pressing need to avoid government surveillance or allow my neighbours to avoid it, if I lived in Japan I'd probably feel differently. You may think this attitude is paving the road to hell, but I think it is already paved ... this is just making the ride more comfortable.

Paypal and credit cards need some decent competition, but we'll get there eventually without cryptocurrencies.

PS. why can't blockchains simply rebase occasionally? Pick commonly agreed on points in time, all nodes independently rebase and hash the result ... if the majority agrees on the rebase result, start using that? What's the problem?
« Last Edit: December 15, 2017, 11:57:52 am by Marco »
 

Online paulca

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Re: Cryptocurrency -- Is anyone on-board?
« Reply #165 on: December 15, 2017, 12:11:39 pm »
But, if creditor and debtor both accept bitcoins, then you don't need a bank anymoore.
Yes, avoiding the need for a bank, and so lining their pockets, is an honourable goal.

What exactly is the benefit if your replace a bank (and their fees) with a hugely inefficient, decentralized structure (with much higher transaction fees), plus a multitude of shady "exchanges" which somehow lose large sums of Bitcoin every now and then?

The trouble with the banks is not really their fees, although on a personal finance level of course that matter.

The problem with the banks is that they are now the primary "wealth" generators.  It is them who are allowed to "print the money" as it were and control the money supply.

This used to be done by governments.  When society needed a cash injection to the money supply they would print some money, employ a whole load of people and carry out public works projects.  This money would then eventually bubble it's way up to the banks and investment firms.

Today they just give it to the banks.  The banks the LEND it to society.  This creates even more money in the form of interest.  All of which goes to the banks and the effective debt of society increases.  "Trickle down economics" just doesn't add up.  The ONLY single way to get money from the top to the bottom is to physically work for the money generators and receive a salary.

When a bank lends you $1000 and expects $1500 repayment over the full term, they write an asset on to their books of $1500.  So in a few key strokes $500 has been created in as real as terms as you get today.  They then lend that $1500 out to someone else and expect $2250 back, so they write another $750 into existence.  Obviously when the chain of loans begins to default we have a credit collapse like 2007.  Banks are now usually limited to 8 times the actual backing funds to help prevent massive collapses.

However governments are STILL 'printing' millions of dollars a day and giving it to the banks in quantitative easing.  The banks then generate 8 times that in debt to finance societies needs.  The interest alone is effectively unpayable.  The UK government has been releasing miss leading figures on their deficit for decades.  They always put it across as if they are lowering the public debt, when they are only lowering the rate that debt is expanding.  If you look at it carefully you can see that repaying the debt is effectively impossible.

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Online Marco

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Re: Cryptocurrency -- Is anyone on-board?
« Reply #166 on: December 15, 2017, 12:39:22 pm »
Governments are still printing money and handing it out to the economy. The thought that the Fed or the ECB will ever substantially decrease the amount of government debt they hold is laughable to anyone but central bankers and naive people. A few palms get greased while the debt travels from government to central bank so everyone can poorly pretend it's not monetization, because admitting the truth would blow central banker minds, but in the big picture it really is no different from monetization.

Only Japan is relatively unapologetic about it, that's why central bankers and economists allied to them hate Abe so much ... the emperor has no clothes, central bankers have no real power or independence, it's just a charade which has outlived its usefulness.
« Last Edit: December 15, 2017, 12:44:52 pm by Marco »
 

Offline hwj-d

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Re: Cryptocurrency -- Is anyone on-board?
« Reply #167 on: December 15, 2017, 01:21:35 pm »

Surveillance is a necessity in our multicultural low trust society, when I trust government more than my neighbours I will sacrifice privacy from government for security and equity (if I have to suffer taxes everyone does). Without pervasive surveillance freedoms I care about would be heavier constrained than they are, more restrictions on over the counter sales of household chemicals for instance, or even something as basic as the components to easily DIY drones.

As it stands I see no pressing need to avoid government surveillance or allow my neighbours to avoid it, if I lived in Japan I'd probably feel differently. You may think this attitude is paving the road to hell, but I think it is already paved ... this is just making the ride more comfortable.

Paypal and credit cards need some decent competition, but we'll get there eventually without cryptocurrencies.

PS. why can't blockchains simply rebase occasionally? Pick commonly agreed on points in time, all nodes independently rebase and hash the result ... if the majority agrees on the rebase result, start using that? What's the problem?

Yes, i understand what you mean. From your subjective understanding this may be conclusive for you. You are free to believe. But for me, please excuse me, the general situation, as well global as also national speaks a different language in terms of a state's over gripping of the fundamental human rights of its own and other citizens.

« Last Edit: December 15, 2017, 01:38:33 pm by hwj-d »
 

Offline brucehoult

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Re: Cryptocurrency -- Is anyone on-board?
« Reply #168 on: December 15, 2017, 01:40:50 pm »
PS. why can't blockchains simply rebase occasionally? Pick commonly agreed on points in time, all nodes independently rebase and hash the result ... if the majority agrees on the rebase result, start using that? What's the problem?

I can't see any reason to rebase.

Assuming you're alluding to git (which has a very similar structure to blockchain), what you want is "git clone --depth <N>" or "git clone --shallow-since=<date>"

It's important that someone -- preferably a few someones -- keep the full blockchain history. Someone needs to do that for tracability, to prevent double-spending etc. But not everyone needs to. Knowing the hash of the currently last block is all you really need as a miner.
 

Online Marco

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Re: Cryptocurrency -- Is anyone on-board?
« Reply #169 on: December 15, 2017, 01:55:53 pm »
I can't see any reason to rebase.

Storage requirements and time necessary to start a new "full" node.

Quote
It's important that someone -- preferably a few someones -- keep the full blockchain history. Someone needs to do that for tracability, to prevent double-spending etc. But not everyone needs to. Knowing the hash of the currently last block is all you really need as a miner.

The new base would still have an accurate state, it just wouldn't have the entire history. Only a tiny amount of history is necessary to prevent double spending and I'd think traceability wouldn't be a selling point for bitcoin users :)
« Last Edit: December 15, 2017, 01:57:50 pm by Marco »
 

Offline brucehoult

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Re: Cryptocurrency -- Is anyone on-board?
« Reply #170 on: December 15, 2017, 03:10:59 pm »
I can't see any reason to rebase.

Storage requirements and time necessary to start a new "full" node.

Quote
It's important that someone -- preferably a few someones -- keep the full blockchain history. Someone needs to do that for tracability, to prevent double-spending etc. But not everyone needs to. Knowing the hash of the currently last block is all you really need as a miner.

The new base would still have an accurate state, it just wouldn't have the entire history. Only a tiny amount of history is necessary to prevent double spending and I'd think traceability wouldn't be a selling point for bitcoin users :)

So that's not rebase. That's partial history. As I showed and explained.
 

Online Marco

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Re: Cryptocurrency -- Is anyone on-board?
« Reply #171 on: December 15, 2017, 05:08:03 pm »
Yes, I meant rebase. As in "To modify core data from which other data is derived in such a way that the final meaning is unchanged."

A partial history is useless to a miner, he needs to verify transactions unless he wants to leave the block empty. As I said before, currently fees exceed the value of mined bitcoins ... so leaving it empty wouldn't be very smart in that case. A blockchain designed to be rebased would work forward from the most recent rebased address contents (and probably the one before that, to rule out desynchronization issues) instead of the complete transaction history.
« Last Edit: December 15, 2017, 05:12:14 pm by Marco »
 

Offline floobydust

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Re: Cryptocurrency -- Is anyone on-board?
« Reply #172 on: December 15, 2017, 10:29:47 pm »
How does this work, from "somewhere" the money comes to those who mine?

Organized chinese bitcoin mining is massive, millions $ a day. Cheap electricity, state land, their own ASIC's. The pictures are impressive:
Bitmain http://www.altcointoday.com/tour-of-one-of-the-largest-bitcoin-mining-operation
https://www.nytimes.com/2017/09/13/business/bitcoin-mine-china.html

It looks like a big money leak to me.
 

Offline hendorog

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Re: Cryptocurrency -- Is anyone on-board?
« Reply #173 on: December 15, 2017, 11:11:13 pm »
But, if creditor and debtor both accept bitcoins, then you don't need a bank anymoore.
Yes, avoiding the need for a bank, and so lining their pockets, is an honourable goal.

What exactly is the benefit if your replace a bank (and their fees) with a hugely inefficient, decentralized structure (with much higher transaction fees), plus a multitude of shady "exchanges" which somehow lose large sums of Bitcoin every now and then?

Banks here in NZ, make enormous profits for their parent Australian companies, and their customer service is trending to zero.
Having some option to operate outside of their sphere of influence would be very satisfying.

You read that comment too literally. I would not replace my current bank right now with Bitcoin, and probably never would. I think Bitcoin is unusable as a currency for several reasons. However the world of crypto currencies is bigger than just Bitcoin, so look beyond. It is conceivable that something will appear that is usable in the way that Bitcoin aspired to be.

But I would have no problem supplementing it with a crypto currency as some point in the future - one that didn't have the disadvantages of bitcoin.

 

Offline EEVblog

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Re: Cryptocurrency -- Is anyone on-board?
« Reply #174 on: December 15, 2017, 11:16:08 pm »
You read that comment too literally. I would not replace my current bank right now with Bitcoin, and probably never would. I think Bitcoin is unusable as a currency for several reasons. However the world of crypto currencies is bigger than just Bitcoin, so look beyond. It is conceivable that something will appear that is usable in the way that Bitcoin aspired to be.

There are many, like IOTA and Cardano (ADA) to name a few.
I actually like the new Cardano wallet Daedelus, and an now accepting ADA donations  ;)

« Last Edit: December 15, 2017, 11:17:39 pm by EEVblog »
 


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