Bitcoin's Nightmare Scenario Has Come To Pass 306
HughPickens.com writes: Ben Popper writes at The Verge that bitcoin's nightmare scenario has come to pass as the bitcoin network reached its capacity, causing transactions around the world to be massively delayed, and in some cases to fail completely. The average time to confirm a transaction has ballooned from 10 minutes to 43 minutes. Users are left confused and shops that once accepted Bitcoin are dropping out. For those who want the Bitcoin system to continue to grow and thrive, this is troubling. Merchants can't rely on digital transactions that can take minutes or hours to validate. A number of prominent voices in the Bitcoin community have been warning over the past year that the system needed to make fundamental changes to its core software code to avoid being overwhelmed by the continued growth of Bitcoin transactions. A schism has developed between the team in charge of the original codebase for Bitcoin, known as Core, and a rival faction pushing its own version of that open source code with a block size increase added in, known as Classic. "Many in the US Bitcoin community had hoped that hitting this crisis point — a network maxed out, transactions faltering — would result in closure, with miners quickly moving to adopt whichever chain proved more valuable to their economic interests," says Popper. "But so far the debate is dragging on without one side claiming a clear victory, leaving tens of thousands of consumer transactions stranded in limbo."
"Merchants can't rely on digital transactions" (Score:2, Insightful)
This is why I don't rely on fan-currency.
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This is why I don't rely on fan-currency.
As opposed to paper currencies which hold value precisely as long as people believe that they do (i.e. a fan currency).
Re:"Merchants can't rely on digital transactions" (Score:4, Funny)
At least paper money can be used as an actual fan.
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Actually it kind of does.
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Maybe the people who took us off the precious metal standard were enthusiastically devoted to fiat currency. Or maybe , and I think much more likely they saw it as the only practical alternative.
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This is why I don't rely on fan-currency.
So, the U.S. dollar is not fan-currency because it is backed by the full might of the U.S. military?
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It's not about force, it's about trust. I'll take your dollars in exchange for work or goods because I trust that someone else will accept my dollars in the future.
Do you ever look deeper and ask why you have that trust?
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So, the U.S. dollar is not fan-currency because it is backed by the full might of the U.S. military?
A fan, or fanatic, sometimes also called aficionado or supporter, is a person who is enthusiastically devoted to something or somebody, such as a band, a sports team, a genre, a book, a movie or an entertainer.
How in the hell do you equate backed by the full might of the U.S. military to fandom?
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So, the U.S. dollar is not fan-currency because it is backed by the full might of the U.S. military?
A fan, or fanatic, sometimes also called aficionado or supporter, is a person who is enthusiastically devoted to something or somebody, such as a band, a sports team, a genre, a book, a movie or an entertainer.
How in the hell do you equate backed by the full might of the U.S. military to fandom?
You missed a negation. Bitcoin is a fan based currency, OP expressed a distaste for fan based currency... I was asking why the U.S. dollar is not fan based, is it because of faith and trust in the government? That would sound more like fandom to me.
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OP expressed a distaste for fan based currency...
I am OP.
I was asking why the U.S. dollar is not fan based, is it because of faith and trust in the government?
You're making a syllogistic fallacy. Just as Socrates is a mortal, but not all mortals are Socrates, everyone who is enthusiastically devoted to something also has faith and trust in it, but not everyone who has faith and trust is also enthusiastically devoted to it.
Pragmatism (Score:3)
I was asking why the U.S. dollar is not fan based, is it because of faith and trust in the government? That would sound more like fandom to me.
Nobody really needs to be a fan of the US government to realize that a currency backed by the taxing authority of the country with the biggest economy and biggest military which is accepted in trade around the globe and a long record of stability is probably of practical value. Bitcoin on the other hand is thinly traded, volatile, digital only, and relies on technology of uncertain robustness. Those things matter a lot.
The majority of pragmatists using bitcoin seem to be people engaged in activities that
Checks take a while to clear too (Score:3)
We lived for centuries writing checks and they don't clear instantly either. Why is it essential that Bitcoin clear instantly?
THe desgin of bitcoin anticipated this. Initially the profit for adding transactions to the block chain with bitcoin mining. But it was always expected that as the return on mining slowed that it would become fee based. The problem is the fees offered are not reaching the required levels for more miners to enter.
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I have no idea how "checks" (from here on in this post refers to them as "cheques") were handled in US shops, but here in the UK you could not actually buy goods in a physical shop with a cheque unless it was also presented with a valid cheque guarantee card issued by your bank - the cheque could then be presented up to the value of the cheque guarantee card.
The only time you would present a cheque without a guarantee card is when buying remotely, and then the shipper would wait until your cheque cleared be
Re:Checks take a while to clear too (Score:5, Informative)
For most of my lifetime, if a U.S. retailer accepted checks, one of two things happened: You wrote your check and went on your way with your goods, and either the check cleared within a few days, or the check did not clear. If your check didn't clear due to insufficient funds, the merchant could go after you for the amount of the check plus a "returned check" service fee. If you wrote a "worthless check" intentionally, you could be charged with a crime.
Major retailers had their own solutions. I remember Gold Circle (predecessor of the Target store chain) having a check approval counter where you had to get your checks OKed — presumably to make sure you weren't a habitual writer of bad checks. At smaller businesses, it wasn't uncommon to see photocopies of people's bad checks pinned to the wall behind the cash register, or a sign boldly telling staff (and customers) not to accept checks from the below-named people. (There was an episode of "Seinfeld" that involved this, IIRC.)
After 9/11, using the delays caused by the attack as a stated reason, the government and banking system changed it so that now, at most major retailers, writing a check is handled as an electronic debit of your bank account. Many retailers don't even keep the paper check — they print transaction information on it and hand it right back. This caused a little consternation among people who used to "float" a check, writing it a day or two before the money actually made it to the bank and betting the check would arrive after their pay did.
And that's your history lesson. Hope it was worth the read. :-)
Re:Checks take a while to clear too (Score:5, Insightful)
I don't recall ever having a check accepted where I didn't have to show ID. Furthermore, unless it was forgery, the check itself identifies who wrote it, and who is responsble for the debt. None of that is true with bitcoin. In fact, that seems to be the main selling point of bitcoin.
Re: Checks take a while to clear too (Score:4, Insightful)
Credit cards take a while to clear too - - chargebacks can be up to 6 months later. There's absolutely no guarantee that you will actually have the money until that six month period is past. Bitcoin actually improves the situation tremendously. The odds of a bitcoin double-spend are significantly lower than the odds of a credit card chargeback. Especially within wallet systems - say Mycelium to Mycelium - nobody in the peer-to-peer economy is worried at all about getting their money. It's something the established bankers make up to create fear.
Re: Checks take a while to clear too (Score:3)
No the vendor loses if there is a chargeback
Because we have a system that does (Score:2)
Never mind all the other issues, of which there are many, but BTC has to compete with the credit card networks. They work effectively instantly. People are not interested in stepping backwards.
"Classic"? (Score:5, Insightful)
I don't know if there's more backstory, but perhaps users have been slow to adopt because "Classic" sounds like what you'd call an older and (in the usual context) more limited option?
If I'm developing a new technology with potentially millions of $USD riding on its availability and adoption, I'm not going to call it "Classic." "NextGen," or "Enhanced," or even "CC" for Corrected Chain? This sounds less like the free market and more like terrible marketing.
"Classic" as in Satoshi's original design ... (Score:5, Informative)
DOUBLOONS (Score:2)
And now I *KNOW* bitcoin is open source (Score:5, Funny)
With that much internal bickering sabotaging the whole project, it MUST be OSS.
Crypto Trojans? (Score:3, Interesting)
As an AC over on SoylentNews already asked - is there a significant amount of Bitcoin transactions due to ransom payments for crypto-locked data?
I seriously wonder, as there's apparently been quite a surge of corresponding infections lately, and it also seems that quite some victims actually pay up.
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That's one of the biggest items, along with other black market payments. Legal purchases, donations, etc, appear to make up only a tiny fraction. Paying $200 to get your files back is your only option if you didn't keep backups, and they make it really easy and streamlined these days. There was even an article a while back about how they actually have customer service departments that are very helpful.
It's sort of like how bittorrent has plenty of legitimate uses we can point to, but at the end of the da
Yawn (Score:5, Informative)
Pay higher fees if you are in a hurry.
The demand for most goods tends towards infinity as the cost drops. Bitcoin transactions have been fantastically cheap, which everyone sensible knew couldn't possibly last.
So, do we make bigger blocks, or increase fees? Miners should get more fees from either option. Users would prefer bigger blocks, since it keeps their costs artificially low.
But the real problem is the relay node shortage. Running a node is no longer trivial, and there is no mechanism to recover costs. The blockchain is around 80 GB now (including the index), and growing by ~100 MB per day. Larger blocks will only make that worse, and will almost certainly knock yet more nodes offline.
Someone made a distro that ran bitcoin entirely out of tmpfs. I once had a bunch of super-fast nodes using it. When the blockchain finally exceeded my ability to add more RAM to those boxes, the average time for a new node on the network to sync up increased by a factor of 3 or so.
That's just my personal example. Hundreds of other nodes have dropped off for their own reasons.
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It almost sounds like Bitcoin is starting to suffer from the same capacity problems that hit USENET. I remember a point where running a server just became such a major resource hog that lots of places just quit or could only carry a subset of the hierarchy.
What's odd is that 80 GB doesn't seem like a staggering amount of data, especially in an era of superfast SSD storage (like NVMe) where the memory/disk penalty is a lot smaller. It doesn't even seem like a lot of RAM, either, unless you think in terms o
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They were indeed dirt cheap consumer motherboards. Carefully selected to support relatively large memory (for the category, at the time).
For what I was doing, it wasn't about the size, it was about the seeks. Bootstrapping a new node is murder on a spinning disk. It is, or at least was, incredibly unfriendly to cache schemes because you keep skipping backwards by 1000 blocks to get to the root.
Also, SSD is fast, but it isn't as fast as you are thinking, particularly when every single read is a cache miss
Re:Yawn (Score:5, Insightful)
> The blockchain is around 80 GB now (including the index), and growing by ~100 MB per day. Larger blocks will only make that worse, and will almost certainly knock yet more nodes offline.
0.12.0 has pruning that drops the disk requirements back down to less than 10 gigs.
Higher fees are your solution? (Score:3)
Well if Bitcoin is going to get expensive to use... then why would merchants (or customers) have any reason to like it over credit cards? Credit cards settle in seconds, and the network has scaled to massive size and can continue to scale no problem. The alleged advantages of Bitcoin that people liked to bandy about were that it was supposed to be really fast and not cost a bunch like credit cards do. If you can't deliver that (and it can't, it cannot scale to the levels it would need to) then there's littl
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Re:Yawn (Score:5, Informative)
Note that a typical transaction is 500 bytes, so the typical transaction fee for low-priority transactions is 0.1 mBTC (0.0001 BTC), regardless of the number of bitcoins sent.
At current prices, 0.1 mBTC equals about $0.04 for a simple transaction. If your transaction is $1, that means you pay 4% in transaction fees, which is not "fantastically cheap". I can do an electronic bank transfer in the Euro zone for free.
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That's it (Score:3)
I'm gong back to tulips!
Bullshit (Score:3, Insightful)
This problem is self-correcting.
If there's a drop in the computational power of the network such that blocks are mined less frequently, then the difficulty drops and blocks are mined more frequently.
If people are complaining (again) about not being able to fit a ton of tiny transactions into a block without paying a fee to ensure prompt delivery, then I'll say (again):
1: Pay a transaction fee
2: Stop shitting around a bunch of tiny transactions
3: Help out and be a miner yourself
4: This is all by design - the end game scenario for BTC is that mining rewards end and all incentive is from transaction fees
If this continues and people don't recognize 1-4 above, idiots will stop using Bitcoin for a bunch of tiny transactions and the problem will correct itself. You don't need to pay .000000001 BTC every time you visit a page on a BTC funded site. You need to pay 000001 BTC to get a credit of 1000 page visits. Bitcoin isn't for massive amounts of microtransactions any more than a traditional bank is. If you want it to do that, then pay the fee (which could be a significant percentage of your microtransaction).
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Why is this insightful? Getting rid of small transactions only gets you so far. The hard limit of transactions in somewhere around three per second (or at least that order of magnitude). Getting rid of micro-transactions only buys a small amount of time, until transaction volume grows to where even macro-transactions are occurring at more than 3 per second, or at least trying to occur at more than 3 per second.
Think about it this way. This is a global currency that can't do more than 95 million transact
Re:Gold is the only real money (Score:5, Funny)
I don't need any of your fiat currency .
I wouldn't use cars as currency either !
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I for one vote we go back to Kent economy [country-data.com].
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A Fiat would be worth the pennies in my couch cushions..
Re: Gold is the only real money (Score:3)
A) "Fix it again, Tony!"
Re:Gold is the only real money (Score:5, Informative)
I don't need any of your fiat currency .
Gold is great until you need more of it, which you always do, because economies grow (all being well) and extra money is needed to support that. The other problem would be getting too much of it too quickly (ie building a mine) and ending up with a glut inflation. Fiat currencies are the only way to have a quantity of money that matches the size of the economy. I know we all want to believe that there's some quantity of precious metal somewhere that backs our cash, it's comforting, but real economies don't work well like that.
Re:Gold is the only real money (Score:4, Interesting)
Conversely, fiat currencies don't necessarily represent the actual amount of wealth in the economy - hence the economic crash. A currency you can literally just make up out of confidence (or false confidence) isn't representative of real wealth.
You're right in that gold doesn't scale as a currency backing - because the amount of effort required to get it is not a fair representation of economic output any more (it used to be - you needed men and basic equipment so it was a reasonable proxy representation of how much economic surplus you had).
Cryptocoin could be regarded as a currency backing that actually scales with economic output - because there are no physical limits beyond manufacturing the ASICs and generating the energy (until you hit physical limits for those...).
Re:Gold is the only real money (Score:4, Insightful)
Sure but the gold standard did not prevent economic crashes, eg in the 30s, and coming off the standard at that time helped. And there's a need to change the amount in circulation up and down to match what's going on in the economy.
As an aside, I rather think that using the vast quantities of energy to keep mining is a bad use of resources. At a time we're trying to be more efficient, creating a system that deliberately inefficient seems is dumb.
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You're really good at spotting fools in hindsight, a real gift.
You're really good at making frivolous remarks. OK it's the cautious people who get burned in market swings - every damned time. Yeah that makes sense. No hindsight is required, but certainly post facto inane remarks seem to be essential.
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By your definition, a "fool" in the 1930s would be anyone with a loan or mortgage. That's what the gold standard did - people spent less, thus money became more valuable (deflation). But the loans didn't change - if you borrowed $5,000 to buy far
Re:Gold is the only real money (Score:5, Insightful)
Paper money only has value because enough people think it does. People will be willing to give you things of tangible value (goods and services) in exchange for paper money and tin coin because they have confidence they can turn around and trade it for more goods and services from someone else at a later date.
Gold only has value because enough people think it does. Most people, however, will NOT be willing to accept gold in exchange for goods and services. In all but a handful of special cases you'll have to first convert that gold to an agreed upon currency first, possibly via some process that certifies the quantity and purity of the gold first.
Both paper money and gold are fiat currencies in this way: They have little or no intrinsic value, but instead serve as proxy of value. It's traded based on a level of trust that the per-unit-value will remain relatively stable (or increase) in the time it takes to turn around and trade it to someone else.
All of this is true for Cryptocurrencies as well. It has value because people want it, not because it's intrinsically valuable. If nobody wants it or is willing to accept it in trade, then it's worthless. You can't even burn it for warmth like paper money or make decorations and tableware out of it like you can with gold... it is absolutely devoid of intrinsic value.
=Smidge=
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Cryptocoin could be regarded as a currency backing that actually scales with economic output - because there are no physical limits beyond manufacturing the ASICs and generating the energy
Meaning that what costs 10 bitcoins in the morning may cost 12 bitcoins at noon, 100 bitcoins tomorrow and a 1000 bitcoins next week.
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You did not learn anything from the past crisis, did you? The main problem with our fiat currencies (the dollar / euro, etc) is that they are poofed into existence for dept with the obligation of paying usury. Off course, that usury was never created, so the dept spiral can only grow until the whole scam blows up in our faces. Gold has the problem that its quantity does not follow the population, but apart from distribution problems that is not necessarily a bad thing. We would just use less gold for the sa
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Off course, exponential growth can never be stable.
I think that people fail to realize: 1% interest, compounded, is still exponential growth. The exponentially growing economy has worked for the last few hundred years due to exponential growth of population, at first finding more and more gold and silver, but shortly after the globe was conquered switching to "paper money" that can grow with population.
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it is always advantageous to wait until prices drop
Only up to a point. You would not want to wait your entire life for clothes, food, housing, etc. Besides, I read that the world's population growth would end somewhere this century. And off course money can be managed. If you install a negative interest rate (a kind of hoarding tax) spending becomes more advantageous. This is not a new idea, and basically I think that most humans are, well, human and not bean counting "rational" specimens of homo economicus. Maybe the stock exchange would grind to a halt. T
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Re:Gold is the only real money (Score:5, Interesting)
Currently we mine 1-1.5% of the existing supply of gold annually.
That means that unless your economy grows less than that, or mining rates go up significantly, you are basically having deflation: Your gold becomes worth more over time.
Deflation is generally seen as a really bad thing, as it makes people prefer saving over spending. Money being saved is not part of the available supply, causing more deflation, causing more people to save their money, etc.
The people hardest hurt are those that can't save any money, as they need to spend all they earn on things like food.
Deflation is really good for people who have a lot of money, as they can save most of it, becoming richer over time, without doing anything.
If they let other people borrow the gold at an interest, their pile of gold also grows, on top of it getting more valuable.
The end result becomes a situation where those few people who have enough gold that they spend less than they earn by lending, will end up with all the gold very quickly.
This has happened many times in the past, when gold was the main type of currency. It usually ended by some King using their power to steal the money from whatever bankers had the big gold piles. (Kings always have wars to spend money on, so they usually spend more than they can earn and then some).
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Currently we mine 1-1.5% of the existing supply of gold annually.
That means that unless your economy grows less than that, or mining rates go up significantly, you are basically having deflation: Your gold becomes worth more over time.
Then the first asteroid ever prospected is found to have more gold and precious metals than have been mined from the Earth in all history.
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Re:Gold is the only real money (Score:5, Insightful)
Who exactly do you think would be running the gold mine?
Do you really think that somehow, getting rid of fiat currency will also somehow invalidate the old rule of "it takes money to make money?"
Re:Gold is the only real money (Score:4, Interesting)
Like most things in life, currency policy is one of tradeoffs. You can have wild swings in value and deflation associated with hoarding, or you can have steady but stable inflation. The main downside to steady inflation is that hoarding cash becomes a money-losing endeavor. Of course, that's rather the point... Solution: buy something else instead of hoarding money. If you are comfortable with gold, hoard gold. If you like equities, get those. Or mix it up a little.
Another advantage of steady inflation is that salaries go down over time. Usually this is all but impossible, even though the laws of economics demand it for an efficient economy. The disadvantage is that, well, your real salary goes down over time. But in theory a rising tide lifts all boats. In practice there are winners and there are losers. This was the case during the gold standard as well.
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Adding more fiat money only dilutes the value of the existing money, stealing from whoever has it, and causes inflation.
You think that doesn't happen with the gold/silver/commodity supply? Why do think think BTC mining is rate-limited?
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Adding more fiat money only dilutes the value of the existing money,
You're missing a key detail of modern economics: the debt economy. Think of money and debt as (loosely) matter and anti-matter. When they're together, they can cancel each other out, and one can be produced by producing an equal (except for an mentioned below) amount of the other. The federal reserve bank is able to do this, and that's where the "out of thin air" magic happens.
By producing money, which is then loaned to banks, the banks have enough money on hand to serve their customers' needs, including ma
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Your prices change, either they go up or they go down in response and people react accordingly.
Accordingly means that falling prices should result in a negative interest rate, but you can always get a zero interest rate by keeping the money in a box. This means that in a deflationary environment, you can't borrow (enough) money to invest, and the economy slows down.
Threat of violence is the only real money (Score:2, Interesting)
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Re:Gold is the only real money (Score:4, Insightful)
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You're unclear on the concept. You're apparently referencing getting a loan to purchase that house without saying as much. The value of the house doesn't change because you owe gold - you still owe the same amount of gold you agreed to. When you say the value of the hous
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But the house itself could double or half in value overnight with disruptions in the price of gold, loan or not. This encourages people to walk away from their loans, which is exactly what happened in 2008. In that case it was because people went on a buying frenzy when prices were inflated, thinking that prices would continue to inflate.
The same would happen with gold, "Oh I better buy property now, gold went up in value a lot over the past few months... it might go up more!" Yeah, or it might not.
Either w
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No! It's not the fiat-currency-price of gold which doubles and halves, it's the real price, the only price that matters, the amount of goods and services which you need that you can purchase with it, which is the only real way to value an asset. (It's one of those terms of art in economics that actually means exactly what it says on the tin.)
And the amount of gold may be stable, but its value is not. You don't hold
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Don't, don't, just don't.
The Parent is arguing that if everything in your life such as your contracting earnings for work, and your transactions of other sources of income, were also negotiated in Gold, then you'd be in the clear because even if the dollar-evaluation of Gold changes, you're still owed Gold for things like work-hours put in at work or projects completed for clients.
You're clearly arguing with a deluded lunatic.
For their unicorn economy to work, those bosses and those clients would also have
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Don't worry. I'm sure goldfinger here doesn't actually have any gold outside of his "offshore gold depository" that you see advertised late night on basic cable channels. And I am sure he think that when the economy and society collapses they will be more than happy to ship his gold to him in some sort of well defended caravan.
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Is it too much to hope that the bitcoin trouble means that the business model of the ransomware extortionists is now broken?
Re:And Nothing Of Value Was Lost (Score:4, Insightful)
This is a neither interesting nor insightful post. It's glib, ignorant and stupid.
People are happily exchanging bitcoins for goods and services and back again. In fact they're so happy with it that they exceed the capacity of the network.
If you sell some stuff for bitcoins, then buy some other stuff for bitcoins, then it is just inane to claim that you have been scammed.
Re:And Nothing Of Value Was Lost (Score:5, Informative)
People are happily exchanging bitcoins for goods and services and back again. In fact they're so happy with it that they exceed the capacity of the network.
Well they aren't going to be exchanging them for much longer, because the exchange mechanism is broken (sort of) by design.
If you sell some stuff for bitcoins, then buy some other stuff for bitcoins, then it is just inane to claim that you have been scammed.
It wasn't intended as a scam by the creator, but it became one because of the developers that took over, that didn't view bitcoins as a currency, but rather as a store of value. They don't care that it takes hours or days to close a transaction, because they are not really on board with the idea that bitcoins can be used like money. They only see it as an investment.
Mike Hearn [medium.com] lays out the issues much better than I can, in his open resignation letter. Everyone knew it was coming but the people in charge refused to do anything about it despite the warnings. I really think it's because they don't care about the use of bitcoin in commerce. They view it as nothing but mattress money or a digital investment. Only time will tell how much people lose as there will be less and less people interested in bitcoin at all.
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Mod up pls.
Very very interesting read from Mike Hearn. Thanks for the link.
Re:And Nothing Of Value Was Lost (Score:5, Interesting)
We're heading into the Bitcoin end game, where the goal will be for the miners to extract as much money as they can from BTC users via transaction fees until the whole thing collapses. The miners want the network to saturate, and they want people to pay ever-increasing fees to get their purchases on the blockchain. Once the mining reward halves later this year, the incentive to increase transaction fees will be that much greater.
Keeping the network saturated means keeping transaction volume high and the block size fixed, hence the dDOS attacks on nodes running Classic, the spamming of the network with tiny back-and-forth transactions, and the censoring of pro-Classic comments on discussion boards. It all fits with what Hearn has described.
I wouldn't be the least bit surprised to see BTC users paying 0.5% to 2% transaction fees a year from now. It is, after all, what the market will bear when compared to bank and credit card fees.
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"I wouldn't be the least bit surprised to see BTC users paying 0.5% to 2% transaction fees a year from now. It is, after all, what the market will bear when compared to bank and credit card fees."
The trouble is that we are surrounded by a lot of people who are as ignorant of microeconomics as they are about macroeconomics. They'll be outraged if you point out that supply curves slope upward. That's a really bad neighborhood for experimenting with currencies.
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In that case, the Canadian Dollar is a scam.
Try spending one in 99% of the world's shops. Yet you've never seen any riots at shopping malls or Walmart.
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That's because Canadians are too damn polite to riot.
Re: And Nothing Of Value Was Lost (Score:2)
Re:And Nothing Of Value Was Lost (Score:4, Informative)
Re:And Nothing Of Value Was Lost (Score:5, Informative)
Re:And Nothing Of Value Was Lost (Score:4, Informative)
Also, this ignores the fact that in a real crisis, a gold coin isn't worth any more than a quarter for most people. You'd probably be more able to get someone to take it, but you can't eat it. Also, really old coins are worth far more than the gold or other metal it is made from simply because it is old and heavily supply constrained. Melting it down would destroy most of its value to other people who are interested in old coins. Even some of the older coins from the U.S. are worth more as collectibles than either their face value or the metal they contain. For example, a US half penny (we used to have one before the government decided it was useless to keep making because it had lost its value) can fetch thousands of dollars depending on year and condition.
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When people argue for gettin' yer gold coins ready for the crash (during discussions on politics, economics, whatever -- some people bring this up over what to get for breakfast) I like to liken a crisis as a life boat and ask them whether their heavy chest of gold coins is going to get them a spot on a the life boat.
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"This only works for old coins."
Not the penny. The amount of copper and zinc in a CURRENT penny is worth far more than its actual face value, which is why the US Mint is constantly thinking of retiring the penny.
Re: (Score:3)
Re: (Score:3)
A few years ago this was true; but the commodities bubble has burst. Current zinc pennies are worth about 60% of face. Old copper pennies are still worth about 150%.
Re: (Score:2)
"At least when a real currency suffers a terminal crash, you can melt down the coins for scrap metal,"
And you can use it to pay taxes ... at least you probably can as long as the government chooses to try to maintain the fiction that the currency is sound and is merely suffering a temporary setback caused by the actions of vile and disgusting currency speculators.
Trumpcoin (Score:3)
Trump coin will posses intrinsic value regardless of the face value precisely because it had the face of Donald trump on it. It will be a really great currency made from the best bits hand selected by trump himself. There will be no cheap imported bits in Trumpcoin. And Trumpcoin will only work when you are sending money into the USA.
Even if the USA goes down the toilet the trump brand will make these increase in value. Available only at the SHarper Image.
Re:Block chain applications (Score:4, Informative)
Its doubtful - the main issue here is the core BitCoin team who are blocking changes.
This is a fantastic post on the topic, from an authoritative source: The resolution of the Bitcoin experiment [medium.com].