Bitcoin Splits in Two Amid Feud (cnet.com) 204
Bitcoin is dividing in two. Disagreements about how to operate the cryptocurrency have led to a new strand called Bitcoin Cash, which is breaking off from the bitcoin system. From a report: Bitcoin Cash launches Tuesday in what is known as a "hard fork" from bitcoin, a virtual currency based on peer-to-peer transactions without any central authority or bank behind it. The new offshoot is a response to the increasing popularity of bitcoin, which is struggling to deal with massive numbers of transactions with its underpinning technology. The main bitcoin currency is adopting a system called Segwit2x that moves transactions out of the current blockchain, while bitcoin Cash will use bigger blocks within the blockchain. Bitcoin holders are set to receive the same amount of bitcoin cash as they have in bitcoin if the exchanges and wallets they use support the new coin, another report added. Exchanges including Kraken and ViaBTC have said they'll support both, while others like Coinbase and Poloniex have said they won't, citing uncertainty that bitcoin cash will have lasting market value.
Seems like a bad idea. (Score:4, Insightful)
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My experience is that most people involved in BTC are doing it because they see it as a way of getting rich quick. There is very little idealism left in the BTC ecosystem. It's mainly a bunch of people scheming to become the next set of digital gold rush billionaires.
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It's mainly a bunch of people scheming to become the next set of digital gold rush billionaires.
Which is chasing after nothing at this point. That ship has sailed, so to speak. If anything, this breakup sounds like someone wants to start over with part of the bitcoin brand.
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But seriously, we have no idea what the upper limit of bitcoin is. Some people laughed at suggestions it would be worth $1, and now it's worth nearly $3,000.
Re:Seems like a bad idea. (Score:5, Informative)
> I assume everyone involved is working toward strengthening the currency as a whole and not trying to undermine it's success.
You assume wrong. Blockstream, Inc, a company financed by the second largest mainstream financial company (AXA), hired most of bitcoin's core developers, and drove off many of the rest. They have roadblocked bitcoin's expansion in order to force transactions "off-chain" onto private settlement networks, the kind that AXA can collect fees off of.
A "block" is a set of bitcoin transactions secured with a cryptographic hash, so you can verify the contents are correct. Until now, the block size limit has been 1 MB. Since blocks are generated every ten minutes on average, this works out to slightly less than old 14.4K telephone modem speed. This is an absurdly low limit on transaction rate, but was not a problem until last fall, when the volume of transactions hit that limit. The core developers had refused to raise the limit, so that instigated the software fork.
Bitcoin is open-source software, so it can be forked like any other OSS project. The split happening today is a simple change to the code, to allow up to 8 MB blocks. That amounts to 107 kbps, which is still well within modern broadband capacity. All the transaction up to this point is identical for both forks, but once the new fork generates a block > 1 MB, the other fork won't recognize it as valid. From that point forward their blockhains will have different histories. Any bitcoins you had previously will be represented on both ledgers, and it is up to the user to choose which software they want to use to handle future transactions.
Re:Seems like a bad idea. (Score:5, Interesting)
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The simple solution is for Bitcoin to halve in exchange value, relative to fiat currencies. then you can double spend, but get similar value.
The real question is if double spending happens, and the fork is rejoined, what then? I don't think the fork can be rolled back or 'unforked'.
Probably the hard fork will result in one chain attracting most of the volume, the other losing acceptance, and one survives.
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But why bother? Why not just use smaller units of one Bitcoin as they become more valuable? One Bitcoin can be divided to eight decimal places. 1 satoshi = 0.00000001 BTC. You don't have to spend one Bitcoin all at once.
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Individual transactions are still valid on both chains, and the people who generate blocks (called "miners") of both types can include your transaction. There is still only one bitcoin network. But there are different versions of node, mining, and user wallet software which will track transactions in different ways.
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If you had 1 BTC, you now have 1 BTC and 1 BCC.
But because BTC is still the universally accepted gold standard, it will keep most of its value or more (because now the uncertainty has ended) while BCC is regarded more or less as a speculative alt coin like there are hundreds of others.
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If you spend a bitcoin2 (more formally called "bitcoin cash" or BCH) then you still retain the bitcoin1 (bitcoin) that it was twinned with, and vice versa. At present there is a market for BCH, such t
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TFA doesn't mention this, but http://www.businessinsider.com/bitcoin-price-war-amid-volatility [businessinsider.com] and other newer articles I read say things like:
("This" being the size.) So that sounds to me like increasing the size could increase those threats. Yes or no?
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My understanding is that as of now the coins are separate, you have one on ledger A and one on ledger B and never the twain shall meet. The actual value of each will now be determined by market forces, so if they were viewed as equal the value of one would be roughly half, though it sounds like BTC has the leg up for now. I think the fact that many bitcoins will not be duplicated into bitcoin cash, due to their exchanges not supporting the new currency, is part of this.
As a side note, an unscrupulous exc
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The Etherium fork showed an interesting problem with blockchain technology. How do you, in fact, address fraud?
If you can't roll back to 'erase' the fraud, then you have built a system that makes fraud permanent. And yet the blockchain was intended to expose transactions, to validate them, and let the community determine that validity. When a transaction is identified as 'fraudulent', which in Ethereum's case was declaring it to be the result deceptively manipulating 'The DAO' for the purpose of extracti
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Writing code to transfer funds from one DAO to another is not fraud. Fraud is wrongful or criminal deception int
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You have a technical theory that any poorly written contract can be freely abused, that's not how the real world works. A "creative way" of fulfilling the contract will often be fraud, even if you swear until you're blue in the face that it's not.
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You have a technical theory that any poorly written contract can be freely abused, that's not how the real world works
Agreed that that is not how the real world works, but perhaps that is how Ethereum works?
Ethereum programs ("contracts") are supposed to be "self-executing", after all -- does that mean that whatever the Ethereum code actually does is by definition the contract, or do we need lawyers and judges to decide what a given piece of Ethereum code was intended to do, and punish people who manipulate it to behave in ways that its authors didn't intend?
My gut feeling is that the former is more in line with the intent
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How will this work? (Score:2)
Re:How will this work? (Score:5, Interesting)
Not really like a split. More like a clone. This doesn't happen in the stock or currency world. Basically you now have two chains that operate on the same history but are now divergent.
I have no idea how the value of this will play out because it will depend on how strong the support is for each. If each gains equal support, I imagine a decline in valuation for both back to "normal". Otherwise you'll have one absorb the transaction space of the other and essentially just eliminate the loser's value overnight, probably. Depending on how long that plays out people are going to be trading on both which means potential volatility.
Popcorn-worthy from my seat.
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This doesn't happen in the stock or currency world.
Yes it does. Companies can issue more stock. Governments can issue more currency. Doing so reduces the value of the stock/dollars that already exist.
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Companies issuing more stock is usually backed by capital infusion. Governments issuing more currency happens but then you trade on the same currency. This is more like a single country split into two but both are retaining the factories and producing goods for two markets. If it does happen in the financial world, it's certainly rare.
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I have no idea how the value of this will play out because it will depend on how strong the support is for each.
Supply and demand.
Silliest solution: I now have double the money at half the value.
Most likely solution: I now have double the money, half of it is still worth what it was, and the other is worthless.
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Right now the total market value of BTC ($2770) + BCH ($215) is roughly the same as BTC's recent all-time high ($2999). Users who are aware of both chains haven't really lost or gained anything. If you weren't paying attention, though, then you could be oblivious to the fact that your BTC dropped in value but you have unspent BCH that could make up for it.
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" no value beyond hype"
And what gives U.S. Dollars value?
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It's all imaginary, but there are orders of magnitude more people imagining that the US dollar has value than there are imagining that bitcoin has value. And even people with a great imagination aren't all that convinced of bitcoin's value. They have a vague daydream that bitcoin has value. Meanwhile, people are building whole universes in their head out of US dollars. It's like comparing pictures of apples with vague childhood recollections of oranges.
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most the population of Earth accepts it as a world currency, it has value like no other money as long as that is true.
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Among other things, $22 trillion dollars in land, as well as IP rights (patents), spectrum, power and other licensing fees all require annual payments in US dollars if you want to continue to own them.
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You can use it to pay your taxes.
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What gives anything value? Even life-essentials life food change value based on your immediate situation.
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No, I'd say this is more equivalent to a stock split. Since the supply just doubled, you'd expect the currency value to roughly halve. But as I understand it, since people will have both in their wallets (double their current Bitcoin), it shouldn't negatively effect anyone.
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This fork is only demonstrating that bitcoin are created out of thin air in the first place and have no value beyond hype
If the hype is believed, then hype is enough. The only thing that makes any currency valuable is peoples' general willingness to provide you with goods or services in return for you giving them some amount of that currency. So as long as people believe bitcoins (or dollars, or gold, or pokemon cards) are worth something, then they are worth something. That's all money ever was -- a collective agreement that some token is (at a particular time) exchangeable for some amount of goods/services.
Which fork survives? (Score:2)
I presume only one fork will really survive. After a period of double-spend shenanigans, I expect the larger block size fork will be the sole survivor. Since it's effectively evicting all of the Chinese miners, some 40% of the mining power of the network, the block difficulty for the new, larger block chain should plummet, making mining far more attractive to individuals again. In addition, the new chain should have radically cheaper transaction fees, which will tend to push transactions to use it. Wher
My question is this: (Score:2)
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Gold as a material has value.
But gold bonds or gold certificates are just pieces of paper with artificial scarcity, supposedly backed by something lying in a vault from which it will never return and which you will never be allowed to see. From where I am sitting, gold is EXACTLY like bitcoin.
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The underlying value is an economic concept called "utility". People value food and houses because they are useful to us. Their "utility value" is what other things we are willing to trade for them (our labor, dollars, etc). The thing is, utility value varies per person and even for the same person at different times. If enough trades happen over a period of time, we can establish an average "market value" - what people are currently willing to trade for this item.
The usefulness of Bitcoin is in transfe
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Not really. Most of those things you listed have also value only in its scarcity. If there was a massive oversupply of gold it wouldn't be worth what it is.
Value of anything is determined by supply and demand. It doesn't matter where this scarcity comes from as long as it exists.
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Gold, cars, jewelry and other "investments" have value whether it's aesthetic or whatever, so can usually be enjoyed in some fashion while you own it. And real American $$ have the advantage of being - you know - legal tender for all debts, public and private" so is immensely useful/valuable. BTC, from all I can see, is just fools gambling. What am I missing?
But gold, cars, and jewelry don't tend to have intrinsic value anywhere close to equal their USD value. Sure, you can enjoy them in their own right, and gold does have some industrial uses. But the value of "enjoyment" doesn't reach anywhere near millions of dollars for jewelry, and there's no way industry alone could support a valuation of US$1200/oz. for gold.
These things mainly derive their value because people say they have value. People buy expensive art and warehouses full of expensive wine partially
Just goes to prove... (Score:2)
Just goes to prove you don't need a government or central bank to eff up a currency.
How it works - 8 times the transactions (Score:3)
No longer quantum safe (Score:2)
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Agreed. At some point in the next 5-10 years, it should be feasible to hunt for 'lost' bitcoin wallets with unspent coins sitting in them.
movin' to montana soon (Score:2)
I might be movin' to Montana soon
Just to raise me up a crop of
crypto coins
[...]
Movin' to montana soon
Gonna be a bitcoin tycoon
[...]
By myself I wouldn't
Have no boss,
But I'd be raisin' my lonely
crypto coins
Raisin' my lonely
crypto coins
Re:Why does BTC win this one? (Score:5, Insightful)
BTC "wins" because some Chinese mining pools are making money hand over fist from transaction fees. Obviously they don't want that to end. It also "wins" because many people holding BTC don't want the supply to effectively double with a hard fork, as that devalues their "investment".
The ultimate problem with Bitcoin is that it involves multiple parties who are strongly motivated to operate at cross-purposes for their own personal gain. Bitcoin Cash won't be the last hard fork.
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Re:Why does BTC win this one? (Score:5, Funny)
a 'sub-bitcoin' offering that is backed by bitcoin, but doesn't require a full calculation on each transaction.
Like put all the bitcoin somewhere safe like Fort Knox and issue paper substitutes?
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It's inevitable that all the strategies used for traditional money will eventually become part of e-coin.
Re:Why does BTC win this one? (Score:4, Insightful)
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Don't think anything flew over the poster... Such a system would still (if reasonably designed) keep most/all advantages with bitcoin while removing the problems of some idiotic* design choices.
(* IMHO, no make that IMAO)
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"Take that pedantic shit somewhere where they give a crap."
Apparently you forgot where the fuck you are, son.
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"I love the old dismissive posters who don't really understand the blockchain or cryptocurrency"
There's nothing to understand about the walking train wreck that is a permission-less distributed database (what you try calling a blockchain, but it's not new technology, you're just new to this industry and fall for buzzwords just like any child.) It was shown to be a bad idea in the fucking 70s and it's still bad now for the exact same reasons - scaling and information transfer requirements.
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Mod Parent up.
That doesn't stop me from wanting to see a cryptocurrency that gets around the problem using the Worgl Miracle- taxing the CryptoCurrency at 10% per month until that bitcoin disappears, thus freeing its ID to be mined again.
Two fundamental questions (Score:2)
First how does this split prevent double spending ? Each block chain initially has all the wealth records of everyone. So now if I pay bob 1 bitcoin by posting the transaction to BTcash my wallet over on bitcoinOriginal isn't debited. Why can't I now pay Anna the same coin but posting the transaction on btOriginal?
Second question is about your clever derivative idea. Someone has to hold they key to the Reserve backing the derivative. What happens if they decide to spend the reserve?
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You can. If you had 1 BTC before the split, you now have 1 BTC and 1 BCC. You did get a carbon copy of your coins.
Of course, just because 1 BTC trades against almost 3000$, doesn't mean 1 BCC is anything close to the same value.
They're different coins, traded differently.
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This is also why the price of bitcoin spiked before the fork.
a) people wanted to keep their coin in their private wallet so they would get their free BCC
b) BCC options were traded around 400. So even if you needed to pay 200 extra for 1 BTC, the 'profit' would make up for that.
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Still have HOURS-long confirmation times, tiny block size, etc.. makes it useless for F2F transactions, merchant payments, etc..
Not really, And BCC is not a viable solution to BTC's problems.
There's more to making robust network software than constructing a shiny UI or simply hacking operations parameters to reach a higher size per TX; the actual protocol implementation has to be robust to scale with those features and not blow up.
Re:Why does BTC win this one? (Score:5, Informative)
Current NYC maxes out at 7 transactions per second. Visa, MasterCard, etc do thousands of transactions per second.
One of these are the future and it won't be the one where you max out transactions at a mere 7.
If Amazon accept bitcoin it would only ship .5% of what other payment processing. Simply because of the number of transactions that take place daily.
Can you imagine waiting in line at the grocery store for 20 minutes to get a credit card approved? Bitcoin is measured in hours
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Current NYC maxes out at 7 transactions per second. Visa, MasterCard, etc do thousands of transactions per second.
Just when they were on the point of selling out the first field of black tulips!
Absolutely wrong info on parent (Score:2)
Bit coin is not limited to that rate of transactions. It's rate limit is infinitely higher than Visa. What you are confusing is transactions and mining events. Mining events happen slowly as you indicate. But each event can process an unlimited number of pending transactions. Thus the latency of transactions is ten minutes but the bandwidth is unlimited-- it's like a station wagon full of microSd cards has higher bandwidth than the internet just high latency
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I find your lack of faith disturbing -- https://www.youtube.com/watch?... [youtube.com]
Re: Why does BTC win this one? (Score:2)
No the block chain just hashes the old block chain and truncated it
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That doesn't make Bitcoin inferior. It just means you can't use it for tons of tine, pointless transactions with instant confirmation.
If you DO want to use it for that, pay a transaction fee.
People are only forking because they want to have their cake and eat it too. They're even resorting to scaremongering and FUD with the whole spiel about the Chinese. Hint: If the fork takes off, the Chinese farms will switch over and the situation will repeat itself.
Just fork it (Score:2)
Just fork it :)
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I see you shilling. Anything except off block chain payments is fucking around in the margins, it's the only thing which can have a big impact.
Pushing increased block size forward is just a silly distraction, that was going to happen eventually any way. This is all about ASIC miners protecting their investment.
Re: Why does BTC win this one? (Score:2, Insightful)
Gold was made illegal in the US for decades.
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In other words, the substance 'gold' still exists, regardless of any law (aside from a global law compelling the nuclear transmutation of all gold). The Gold Reserve Act wasn't the only time that private citizens had been prohibited from owning gold, Eygpt banned it around 1200BC, Sparta around 600BC. But gold still retained value afterwards because despite these bans the substance itself conti
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One good targeted computer virus could eliminate BTC forever.
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Does that include such classics as "loitering" and "walking while black"?
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"Being in possession of an offensive wife"
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Anyone with even a bit of a critical mind should realize fairly quickly that Bitcoin can't work in wide use or long term (and the more use, the shorter the life).
Anyone with even a bit of common sense and the ability to read some economic theory should figure out the financial theory behind Bitcoin is crap and won't work.
Anyone with any understanding of human nature and business should know instantly that centralization and fraud was all that would come of it.
But there's another sucker born every minute, an
Re:Cry more nerds! (Score:4, Interesting)
Anyone with even a bit of a critical mind should realize fairly quickly that Bitcoin can't work in wide use or long term (and the more use, the shorter the life).
Anyone with even a bit of common sense and the ability to read some economic theory should figure out the financial theory behind Bitcoin is crap and won't work.
When bitcoin first came out, I thought that; I still don't want anything to do with Bitcoin, but, I've got to give it my grudging respect. Not only has it lasted a lot longer than I (or most people) thought it would, it's got quite a loyal fanbase, keeps evolving and growing, and is (in general) increasing in value at quite a nice rate.
No, it can't go on increasing in value like that forever, but even if it only goes another 10 years before it pops, it's been a very profitable experiment for many people and lasted longer than an average tech company.
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I've often commented to friends that gradually banks will come up with a bank-authenticated blockchain system, where instead of requiring hundreds of gigawatts per day, the banks simply dictate a set of machines which are allowed to do the authenticating. The need for the computational pissing contest is the weak link of bitcoin. It's an interesting experiment, and something that should be seen and watched as just that: a financial, computational, and sociological experiment.
Re:Cry more nerds! (Score:5, Insightful)
Bitcoin would disappear tomorrow if there was an actually anonymous (Bitcoin isn't even really anonymous) way of sending literally anything of value. This need is most fervently expressed by privacy advocates, but lets be real: a huge amount of bitcoin's actual transactions are sketchy, and at least a decent number are outright criminal.
So many things about Bitcoin should ring alarm bells. The fact that there's huge amounts of the blocks that have been mined and never moved. The fact that it's set up to be almost mined completely out not merely in our lifetimes, but reasonably soon (unlike, for instance, a precious metal- 70% of all possible bitcoins have already been mined). The fact that there's numerous vulnerabilities if enough of the network is under control of a bad actor. The fact that it markets so heavily to principle-driven libertarian types with an anarchist or minarchist mindset. The fact that the bulk of the mining is taking place in China, specifically where electricity is cheap, and is controlled by a few shadowy men. It's a a goddamned parade of red flags.
And yet, there's still a desire to subscribe to suicidegirls without your wife finding out, and there's still a desire to get weed mailed to you or whatever. So it still has value, because it is providing a market need, even though everyone knows in their hearts it is just like, so fake. Just so super doubleduper fake.
Re:Cry more nerds! (Score:5, Informative)
Bitcoin would disappear tomorrow if there was an actually anonymous (Bitcoin isn't even really anonymous) way of sending literally anything of value.
Monero is (mathmatically) provably anonymous, provided you download the Monero blockchain and run a full Monero node to send funds (and take the usual steps to anonymize your network connection).
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Bitcoin would disappear tomorrow if there was an actually anonymous (Bitcoin isn't even really anonymous) way of sending literally anything of value.
BTC should be reasonably anonymous if you take the appropriate precaution of either mining your own currency or paying for BTC with cash. There are also other newer currencies like Zcash [z.cash] that are designed from the ground up to tackle the privacy issue.
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Because it's a tangible, physical object in my possession that I physically transfer to someone else's possession. It does not require any 3rd party to authenticate, or verify, and it doesn't get recorded in a public f'ing ledger for all eternity.
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Because it's a tangible, physical object in my possession that I physically transfer to someone else's possession. It does not require any 3rd party to authenticate, or verify, and it doesn't get recorded in a public f'ing ledger for all eternity.
No. Money is not a tangible object. It is a system of accounting. I.e. a ledger. The difference is that it's a distributed ledger, while block-chain based currencies use one centralized ledger (centralized in the sense that all entries are collected together in one dataset, not in the sense that one entity runs it).
The bills and coins you have are tangible objects, but they are not money. They are entries in the ledger.
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Anyone with an ounce of humility would realize that the behavior of a giant distributed system like BitCoin will be impossible to predict, particularly since nothing very much like it has ever been attempted before at this scale. The only wise thing to do is shut up, sit back, stop trying to make foolish predictions about what "obviously will happen", and watch what actually does happen (and don't invest any money in it that you aren't willing to lose suddenly).
Maybe in another 50-100 years we'll understan
Re:Bitcoin Splits in Two Amid Fraud (Score:4, Insightful)
Re:Bitcoin Splits in Two Amid Fraud (Score:5, Funny)
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But I have pieces of green paper in my wallet! Certainly this is a worthy of exchange for goods and services!
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And thanks to Service Workers on my Progressive Web Application, your GPU did math for me too!
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Because there's no such thing as "free money"? And when someone promises you "free money" you can be assured it's a fraud?
When bitcoin first popped up, I mined enough bitcoin on my cheap laptop, and later sold it to pay off my house. The "cost" was perhaps a few cents of electricity. So I'd tend to disagree there's no such thing as "free money".
When gold was discovered in California, a few were fortunate enough to just pick up some nuggets off the ground, with very little effort.
Free money does exist, it'
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When gold was discovered in California, a few were fortunate enough to just pick up some nuggets off the ground, with very little effort.
Its funny that you mention that. During the gold rush, the people that made the most money were the people selling the shovels and pick-axes, not the people mining the gold.
Bitcoin exchanges == shovel/pick-axe salesmen.
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This. The real winners in the whole bitcoin craze are not the people mining; it's the folks selling GPUs and ASICs.
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"Because there's no such thing as "free money"?"
Of course there is such a thing as free money, but it's generally the folks pushing the scheme who end up with it.
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https://coinmarketcap.com/curr... [coinmarketcap.com]
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Or they could have lost it all, depending on which Bitcoin exchange they used.
What's even scarier is that the price of Bitcoin can STILL swing as much as 25% in a day even now. Anybody who's treating their Bitcoin as a serious investment is smoking crack.