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The Almighty Buck

Smart Money Said 'Skip Bitcoin, Bet on Blockchain.' Not Any More (bloomberg.com) 78

Posted by msmash from the market-correction dept.
As cryptocurrency prices tumbled across the board last year, venture capitalists focused their attention on the promise of the underlying technology, the ledger known as blockchain. That, many said, was the smarter bet. Now, the tables have turned. From a report: While Bitcoin's price has rebounded this year, a fresh batch of data shows the flow of cash into blockchain startups dropped dramatically. So far, traditional venture capital investments in blockchain companies have totaled $784 million via 227 deals, according to CB Insights. At that pace, businesses focusing on that technology may only draw $1.6 billion this year, down roughly 60% from a record $4.1 billion in 2018, the research firm said. Money coming from corporations is on "an even sharper decline," despite interest from companies such as Facebook in creating their own digital coins, CB Insights said. Maturing startups are drawing less support, while young startups are faring better, it said.
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Smart Money Said 'Skip Bitcoin, Bet on Blockchain.' Not Any More More

Smart Money Said 'Skip Bitcoin, Bet on Blockchain.' Not Any More

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  • With the last season of Silicon Valley over, no reason for people to think Blockchain is super important any more.

    • Middle-out daisy chain is the new block chain (Score:5, Insightful)

      by goombah99 ( 560566 ) on Friday July 19, 2019 @06:43PM (#58954112)

      Block chain when you subtract the distributed open ledger is not really any different than any secure database.

      The challenge of the open (anyone) distributed ledger is that to trust it there has to be a price fixed to altering it. Whether it's energetic (hashing) or proof of $Valuable you can't just let it an operation that anyone can do for free. Otherwsie the ledger will be forked and hijacked and re-written and no longer be an immutable ledger.

      Any bitcoin-like solution fails because the cost of exhuming and undoing a "spend" in a ledger long after a transaction has been deemed "closed" can never be less than the possible value of the transaction. There is absolutely no argument about that. Ergo, the cost of bitcoin transaction -- if they are secure-- has to be a significant fraction of the total transaction flux. That might be 100% or it might be 10% if you are willing to consider no transaction as really secure until ten bitcoin hashing events have passed. But it's always some large number.

      Since groups of transactions are rolled up in each hash event the cost to any one person is defrayed. But over-all, from an enery use perspective, the total cost HAS to be enormous. it is not secure unless it's enormous. Period.

      Ergo bitcoin contains the seed of it's own size limit where the energy cost is too high. And there is no possible way to not pay that if you want it to be secure and if you want it to be reasonably fast.

      The systems without this distributed ledger avoid the cost by just relying on a closed set of trusted people. And once a system is closed there's no reason it can't just be some secure database. How you do it is just an internal matter of contract law for the consortia of closed trusted partners to decide. They could use some sort of block chain but that's not going to be secure since the cost is removed. It might help with making the system robust to various nodes going down-- a self healing system . It's just one of many methods of making the system robust.

      • . And there is no possible way to not pay that if you want it to be secure and if you want it to be reasonably fast.

        Other layers like payment channels (lightning as an example) allow Bitcoin to scale and transaction fees to remain low as long as the base chain is secure. Bitcoin already has instant confirmations and fees below a penny on these layers with many merchants accepting them.

      • You're absolutely correct and I come up against ignorant people all the time touting the virtues of Blockchain without understanding it.

        The way I typically set the straight is to identify that for Blockchain to work the value of the transactions has to be contested. This works for "money" because everyone wants it: it's contested.

        What it doesn't work for is your warehouse database, or your delivery scheduler, or your proof of origin scheme, because nobody gives a fuck.

        Just use a secure database and regular

      • Re: (Score:2)

        by ceoyoyo ( 59147 )

        There are uses for hash trees that don't involve public editing. Hash trees are great for storing records that aren't intended to change after being written. The data structure gives you fast integrity verification. Git uses it for that reason.

        Implementing some kind of ledger as a hash tree is generally a good idea... one that's been around since the late eighties.

        You can also make the records publicly *viewable* and get some (meta) integrity checking from that. You can do that with any records, but if you

  • No. (Score:3)

    by Type44Q ( 1233630 ) on Friday July 19, 2019 @06:13PM (#58953972)

    Smart Money Said...

    No, Msmash, it didn't. Now should it be so fucking easy to tell which headlines are yours just from their sheer idiocy.

    • Re:No. (Score:4, Interesting)

      by sexconker ( 1179573 ) on Friday July 19, 2019 @07:16PM (#58954272)

      Correct. Only morons bought into the bullshit that was "BLOCKCHAIN TECHNOLOGIES", with companies posting fake job ads for blockchain "experts" just to get thirsty dumbass investors titillated.

      Everyone with a brain knew, and still knows, Bitcoin is the be all, end all of crypto and blockchain.
      - Yes, alt coins exist. They're all crap.
      - Yes, you can use a blockchain for other things, but so far no one has shown any interest in doing so with a PUBLIC and DISTRIBUTED blockchain. They just want to use it as a buzzword to hock their privately controlled, centralized bullshit.

    • You said what I was already thinking.
  • Smart money says don't bet it, save it.

  • You mean a smart-ass said (Score:5, Insightful)

    by iggymanz ( 596061 ) on Friday July 19, 2019 @06:21PM (#58954010)

    Smart money says Bitcoin and blockchain are both toxic as investments, stay away.

    • In the 2 + Year maturity horizons it has been one the best investment ever and very useful as a currency too. Verify for yourself vs gold, stocks, or fiat = https://dcabtc.com/ [dcabtc.com]

      • Re: (Score:2)

        by ceoyoyo ( 59147 )

        Meh. You can find lots of individual stocks that have done better than bitcoin.

        • It is very difficult for the average person to pick those individual stocks and one could easily predict Bitcoins momentum with some analysis. You are being hyperbolic when you use the term "lots" as well. You may find some exceptions to the rule but I cannot think of any stock that has appreciated as much as Bitcoin in the last 10 years. Can you name any stock that has gone from being worth 0.0007639 USD to 10,978 a "share" of BTC today?

          • Re: (Score:2)

            by ceoyoyo ( 59147 )

            Sure. Uber had about the same valuation / market cap as Bitcoin when it IPOed. Bit less now. Google, Amazon, Facebook, Alibaba, Tencent. Not all of those went from zero to their current valuation in ten years, but most of them also have valuations that are considerably higher than Bitcoin's. That's also being generous to Bitcoin, of course. The market cap of Bitcoin is highly speculative, because it's unclear how much of it is due to manipulation.

            You claim Bitcoin was an easy pick versus stocks, but any

      • lolz, you only have a 2+ year period to talk about because of the nose dive after $20K on Dec 2017.... you're saying it's going to obtain that height by Dec 2019? Pfffttt.

        A cyclical pump and dump penny stock analog doesn't really have a "maturity horizon".

        It's toxic garbage.

        • There have been many of these bear and bull markets in Bitcoins history. With every correction we have heard the doom and gloom chicken littles suggest this is the end and Bitcoin comes back stronger than ever. How many more bull and bear markets where Bitcoin keeps finding higher supports does there have to be before you admit there might be a trend? Do you have an example of any penny stock that goes from a valuation of 0.0007639 USD to 10,978 USD a "share" of BTC today in a period of 10 years?

      • Re: (Score:2)

        by teg ( 97890 )

        In the 2 + Year maturity horizons it has been one the best investment ever and very useful as a currency too. Verify for yourself vs gold, stocks, or fiat = https://dcabtc.com/ [dcabtc.com]

        It is useless as a currency (a good currency is stable).The main use for bitcoin is to hope a bigger fool comes along.

        Of course, there's always money in running an exchange and "losing" [independent.co.uk] the money [google.com]

        .

    • Yeah, but if you had an AI engine on Ryzen to process it, and it was voice enabled to make your crypto carbon neutral, THEN you'd be rolling in the dogecoin!

  • Blockchain and the Standard Model of Physics (Score:3, Funny)

    by thragnet ( 5502618 ) on Friday July 19, 2019 @06:29PM (#58954048)

    Dissociated Press (DP) — FOR IMMEDIATE RELEASE

    Physicists identify new fundamental particle

    May herald a new particle family and restructuring of the Standard Model

    Geneva, Switzerland — August 2018

    Keywords: hypino, shinyon, blockchain

    High energy particle physicists at the CERN (Conseil Européen pour la Recherche Nullité) facility have confirmed the existence of the long-conjectured hypino (hy-PEE-no). It is thought to be the first member of a new class of particles known as shinyons (SHY-nee-ons), distinct from bosons and fermions.

    Unlike other subatomic particles, hypinos carry no charge, and have neither rest nor relativistic mass. Their only defining quantum property is spin. Hypinos are thought to be the fundamental unit of marketing hyperbole. To date, hypinos are the only known members of the proposed class of shinyons, which are of especial interest to tech investors and holders of the MBA degree. Dr. Martin Waugh, of the Institute for Advanced Squander, further posits that the hypino may be the carrier of the so-called “weak-minded force”, a mutual repulsion between fools and their money. It is theorized that, upon sufficiently accelerated spin, hypinos transform into super-excited hyperinos, detectable only by Chief Information Officers.

    The discovery of the hypino is recounted by Drs. Robert Crawford and Robert Jensen as follows:

    “It was a Friday afternoon, and we and our colleagues were returning from a long lunch. Maintenance on the Large Hadron Collider (LHC) was scheduled to start Saturday morning, and the apparatus would be unavailable for two months. We were in a ‘what the hell’ kind of mood, so we thought we'd take a fantasy shot, just for grins and giggles.

    “We had a few leftover Higgs Bosons from 2012 on the shelf, so our lowly lab technician, Garth Dennis, breech-loaded them into the beast , set up a blockchain for the target, positioned the extremely sensitive Swindleometer at the intended point of collision, energized the superconducting electromagnets, and let it rip. Upon collision, the blockchain shattered into a shower of the elusive hypinos. Examination of the debris field revealed that the blockchain and all of our cash were gone! Apparently the hypinos were entangled with our funding.”

    There may be natural sources of hypinos. The strongest natural emitters appear to be located in Redmond, Washington, and Armonk, New York.

  • I'm surprised environmentalists don't make make a more public issue out of Bitcoin and similar currencies. Mining is an energy-hog.

    • Anyone that makes this argument doesn't understand the costs to mint and secure fiat and the simple economic reality that MC=MR. “Rent” always forces production costs (MC) to always equal sale prices (MR) with production and ongoing security costs are all extremely high for any currency. With Bitcoin most of the security involves more objective costs that are easier to measure like ASICs+Energy based upon the current Hash rate and with fiat currency or PoS coins these costs are more indirect and

      • PoS coins

        You mean scam coins. Proof of stake is a fundamentally ludicrous design for a currency.

        • Agreed, this is true for cryptocurrencies. I would posit that fiat currency is still a complicated PoS security model that due to the nature of some of them having enough liquidity they do have some advantages of being less volatile and a better day to day unit of account which is an important property for a currency to have. It will be interesting to see with time if this lack of volatility is merely a function of its liquidity or somewhat influenced by a group of economists adjusting interest rates and ot

      • Re: (Score:1)

        by Tablizer ( 95088 )

        If you can reference any decent studies on the "carrying cost" of traditional currency versus crypto-currency, I'd like to see it.

  • "corp blockchain" are just business problems (Score:5, Insightful)

    by TheSync ( 5291 ) on Friday July 19, 2019 @07:20PM (#58954292) Journal

    Very often I've head "oh we will set up a blockchain to avoid the trust problem".

    And I say "Maybe you should fix the trust problem".

    They say "But Bitcoin doesn't need people to trust each other"

    And I say "Yes, Bitcoin ensures that people can trust that other people have performed incredibly complex mathematical functions...but that's it"

    They say "What about long-tail content?" I say "No one wants to watch your long-tail content, or they'd pay you with credit card".

    They say "What about ensuring the supply chain?" I say "how can proving you did some math make people trust that your fish doesn't have parasites?"

    • And I say "Yes, Bitcoin ensures that people can trust that other people have performed incredibly complex mathematical functions...but that's it"

      Bitcoin's security model and assumptions are more complex than this. Proof of Work makes Bitcoin Sybil resistant and has implications in game theory that reward those who secure it and make attacks costly. One of many reasons we know that PoW isn't the only security layer is due to the reality that my full nodes are immune to any block that has either removed the rules or changed existing consensus rules even if 100% of the miners/hashrate colluded to make these changes without my consent or anyone else who

  • Money coming from corporations is on “an even sharper decline,” despite interest from companies such as Facebook Inc. in creating their own digital coins, CB Insights said. Maturing startups are drawing less support, while young startups are faring better, it said.

    Every VC who approaches 'blockchain' like it's a milkable buzzword for crazy profits do not understand the implication of blockchain. They seem to want to treat a blockchain as if it is some sort of digital ledger (which it is),

  • Blockchain is only the database subsystem of Bitcoin; The interesting properties: Anti-censorship and immutability are at the Bitcoin level, not at the database level, because of the right incentives. And the incentives work perfectly because Bitcoin is 'Hard Money'.
  • So far, the blockchain ledger has been used only in small environments, like handling transactions of bitcoin users. If it were to go mainstream and supply security to hundreds of millions of people, giving blockchain ledger updates at least once a day or more to those hundreds of millions of users, the size of the ledger would increase enormously and the amount of bandwidth it would take downloading into those hundreds of millions of computers would bring the Internet to its knees. Reduce the ledger
  • That islands nice, tropical, warm water and nice beaches... lets go there. How was i to know the damn thing was going to sink?

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