Can someone explain to me Bitcoins? [2013]

[MfA]

National currencies serve as lubrication for the real economy which produces things.

Bitcoin exists only for tulip mania and malware, the world would instantly improve if cryptocurrency was banned (ie. US/EU sanctioning any bank which does business with exchanges, no SWIFT is instant death for a bank ... and it would be instant death for cryptocurrencies). Utopian potential is nice and all, but the reality is mania and malware ... even if it didn't burn all that power I think it should be banned.

Cryptocurrencies objectively make the world worse.

Central bank electronic currencies are needed though, the creditcard/paypall monopoly is fucked up. Pornhub should have a constitutional right to the ability to receive electronic payments, until convicted of an actual crime which by law would prevent them from doing business. But bitcoin/ethereum will never be an electronic currency for the normies ...

 

[Gubbi]

Bitcoin decentralized that, essentially crowd-sourcing banking book-keeping.

It did more than that, it crowd sourced monetary authority. That might seem like a wonderful idea if you have many million miners each doing equal work. That's not the case though. The economies of crypto currency mining favours custom logic solutions, which are expensive to build presenting a high barrier of entry for small miners, in turn favouring large miners, which then can pour more money into custom IC development. The result is that a handful of miners mines most of the world's bitcoins with miners in China (state actors?) mining more than 50%, rendering the currency null and void from a monetary security point of view.

Of course making that spread-out system safe entails signifficantly less efficiency. I do think every decentralization of large international power structures is always welcome. Less efficiency is a small price to pay.

It is not.

There are around 300K bitcoin-transactions per day, the bitcoin network spends an estimated 7GW, which translates to 560KWh per transaction. Even if this is off by a factor of ten, even an idiot can see how unsustainable it is.

At this point only fraudsters, criminals and suckers are into cryptocurrencies.

Great bubble though.

Cheers

 

[Bludd]

you have mining factories being set up in places where electricity is cheap. some places they argued they were power-intensive industry and deserved even lower rates or rebates on price of power, basically they wanted government subsidies to make investor speculation numbers go brrrrrrrrr

 

[MfA]

It's funny how China loves bitcoin miners, but hates bitcoin.

More malware and malinvestment for the west, more money and power plants for China. Win win as far as Pooh is concerned. Though eventually the excess supply of modern power plants and earn back time will get dicey for China too.

 

[digitalwanderer]

Bitcoin is pretend money that for some reason is valuable as hell, it doesn't make sense.

 

[pcchen]

It's an artificially supply-limited thing, which, in this day and age, appears to be valuable to some.

 

[manux]

I would say it's a pyramid scheme where more people coming in(demand) drives the value for those who were in earlier. if people one day decide foobar is better then it will crash real bad. Or if you do shady things it can be useful on hiding who is paying for what.

 

[Nesh]

Welcome to capitalism, the irrational market and the fictitious idea of market and monetary value.

 

[WhiningKhan]

Fictitious? I suspect its value is quite real for those who prefer not getting too much attention for their transactions.

 

[Daozang]

I did some mining way back in 2014 and didn't even remember it...
So a few days ago, I came across my address key and thought, what the hell, lets see what we've got.
Long story short, I had 0.2 BTC (20 days of Mining some alt coin the name of which I don't even remember and exchanging it for bitcoin), and sold them for 3150 EUR!

 

[milk]

It did more than that, it crowd sourced monetary authority. That might seem like a wonderful idea if you have many million miners each doing equal work. That's not the case though. The economies of crypto currency mining favours custom logic solutions, which are expensive to build presenting a high barrier of entry for small miners, in turn favouring large miners, which then can pour more money into custom IC development. The result is that a handful of miners mines most of the world's bitcoins with miners in China (state actors?) mining more than 50%, rendering the currency null and void from a monetary security point of view.


It is not.

There are around 300K bitcoin-transactions per day, the bitcoin network spends an estimated 7GW, which translates to 560KWh per transaction. Even if this is off by a factor of ten, even an idiot can see how unsustainable it is.

At this point only fraudsters, criminals and suckers are into cryptocurrencies.

Great bubble though.

Cheers

I'm not here to sing the praises of crypto. I myself do not use it, nor do strongly believe in its long term viability.
I do, though, apreciate their attempt to skirt around the stablished large institutions that centralize monetary transfer today. And I do think that centralization is a serious fragilty of modern society. I don't have high hopes crypto will solve it, specially given the same huge organizations that have monopolized traditional monetary systems can just as well monopolize crypto currencies too.

Ignoring that though, when I said that the lower efficiencies of blockchain are a small price to pay for the attempt to decentralize banking, I'm not only considering the electricity bill of either system, but all the social costs of allowing all the book-keeping of the whole world economy to be unavoidably chained to such few entities.

I believe the 2008 global financial crysis, for example, is the kind of thing that only happens when banking and financing is so damn centealized and sheltered. I'd gladly waste more electricity in monetary transfers if that meant we don't need large banks anymore and all the existing ones go bankrupt and their high-ups have to go and find actually productive jobs. Unfortunately, I do recognize bitcoin is not that solution.

 

[zed]

You seem still under the common misconseption dispelled in this very thread that the computations done during mining serve no purpose whatsoever. Mining is essentially lending conpute time to serve in the transaction infrastructure of the whole system. When you transfer traditional money, that also uses compute power, only there its centralized in few large entities such as banks and regulatory bodies. Bitcoin decentralized that, essentially crowd-sourcing banking book-keeping. Of course making that spread-out system safe entails signifficantly less efficiency. I do think every decentralization of large international power structures is always welcome. Less efficiency is a small price to pay.

Dude I know what its doing with the computing

You are aware
that traditional means of payment handle order of magnitudes more transactions per day
You are also aware
that traditional means of payment require order of magnitudes less energy per transaction

hmmm orders of magnitude * orders of magnitude = I think the unit to measure this is called the 'shit ton' So anyways its a shitton of of less energy used

Mate we are both on the same page somewhat based on your previous post. Im all for the premise of taking power away from banks with some cryptocurrency like system (though with a little more accountability, to easy to lose your bitcoins for the average)
I just know that bitcoin is the wrong way of doing it
1 transaction uses as much power as to power a US household for nearly a month

Imagine if Visa operated like this, we would need to build a dyson shield so ppl could order pizza (slight exaggeration)

 

[dskneo]

Dude I know what its doing with the computing

You are aware
that traditional means of payment handle order of magnitudes more transactions per day
You are also aware
that traditional means of payment require order of magnitudes less energy per transaction

hmmm orders of magnitude * orders of magnitude = I think the unit to measure this is called the 'shit ton' So anyways its a shitton of of less energy used

Mate we are both on the same page somewhat based on your previous post. Im all for the premise of taking power away from banks with some cryptocurrency like system (though with a little more accountability, to easy to lose your bitcoins for the average)
I just know that bitcoin is the wrong way of doing it
1 transaction uses as much power as to power a US household for nearly a month

Imagine if Visa operated like this, we would need to build a dyson shield so ppl could order pizza (slight exaggeration)

The traditional means of payment can also change your balance sheet to zero on account of legal details, terms of user, local goverment or indeed just fat fingers from an intern pressing a keyboard. And all your bullet points are out of date. Every single point you raised is being addressed by eth2.0.

Once those bullet points are gone, what will people come up with? I expect to see them first on facebook news and then out of your mouth. I'm sorry, this was a very rude way of saying that you are out of date with crypto, but it didn't kept you from speaking out loud like an authority.

 

[Gubbi]

Ignoring that though, when I said that the lower efficiencies of blockchain are a small price to pay for the attempt to decentralize banking, I'm not only considering the electricity bill of either system

I don't accept your premise that centralized monetary authority is a bad thing.

I would rather the CEB or FED guarantee the value of my money than some chinese industry magnate. Large central banks are held accountable by the populations of the countries they are created to service.

The 2008 crisis had nothing to do with centralized money, but all to do with unlimited leveraging.

Cheers

 

[zed]

The traditional means of payment can also change your balance sheet to zero on account of legal details, terms of user, local goverment or indeed just fat fingers from an intern pressing a keyboard. And all your bullet points are out of date. Every single point you raised is being addressed by eth2.0.

Once those bullet points are gone, what will people come up with? I expect to see them first on facebook news and then out of your mouth. I'm sorry, this was a very rude way of saying that you are out of date with crypto, but it didn't kept you from speaking out loud like an authority.

facebook news? why the hell would I get my news off facebook, I dont even use that thing much.
eth 2.0 so sometihng that is not let even out is gonna make everything smell of roses, oh thats nice since ethereum 1.0 is about as wasteful as bitcoin energywise

headsup crypto is bitcoin its ~2/3rds of the value of all crytocurrencies, its like removing the USA from the world economy, it so important you just cant easily ignore it. Actually Its more like removing USA & china & japan & germany & india & UK & france & italy & canada & russia from the worlds GPD (yes I looked up contries GDP values). Hey but at least NZ & Tokelau & others remain right
Mate to most, ppl bitcoin == crpytocurrencies like I said in my first post

you claimed I/you/all of us can lose our money with the traditional banks, yes I suppose its possible, but there are multiple safeguards (I hope with physical records)
bitcoin has no safeguards, it relies on being vastly distributed that its practically impossible for someone to muster greater computing power

cue enter quantum computing stage left

now quantum computing is terrible for most general computing tasks but theres somethings it does well, unfortunately for bitcoin, thats one of the things it does well. Once theres a quantum PC powerful enough, bitcoin basically becomes worthless overnight, now with traditional banks perhaps the government would bail them out, reimburse the ppl, but with bitcoin, they wont even give you a hanky to cry into
dont HODL until that day comes my friend

 

[zed]

I would rather the CEB or FED guarantee the value of my money than some chinese industry magnate.

Oh but what about mcafee (*),

(*)apparently his penis has been put on suicide watch

 

[milk]

I don't accept your premise that centralized monetary authority is a bad thing.

I would rather the CEB or FED guarantee the value of my money than some chinese industry magnate. Large central banks are held accountable by the populations of the countries they are created to service.

The 2008 crisis had nothing to do with centralized money, but all to do with unlimited leveraging.

Cheers

Just like competition is good for consumer prodcut manufacturers not to get to complacent, distribution of service providers across many institutions rather than a few official ones protects their users from complacency and corruption.

2008's unlimited leveraging happened because banks and financial institutions were being complacent. "too big to fail" mentality. And the banks only get their get out of jail free card because they were intrenched inside government, and because of the "too big to let them fail" mentality. Had there been, say, 20x more banks and financial institutions at 1/20 the size each, their lobbing power would be less, and many of them would not have been as irresponsable with their investments, so only the scummy ones would fail. Hell, I think in this hypothesis, none of them would have felt confortable enough with the irresponsability that they were in 2008.

 

[dskneo]

It seems globally, crypto discussions bring the same type of people who worship computer hardware brands and are blind towards anything of the opposition and refuse change. My mistake thinking this forum could be different than r/btc.

Please continue. I'm checking out.

 

[Nesh]

I don't accept your premise that centralized monetary authority is a bad thing.

I would rather the CEB or FED guarantee the value of my money than some chinese industry magnate. Large central banks are held accountable by the populations of the countries they are created to service.

The 2008 crisis had nothing to do with centralized money, but all to do with unlimited leveraging.

Cheers

There is an oligopoly of super large financial institutions and the FED green lit everything that eventually led to the 2008 crisis. The Central Banks are completely independent institutions. You dont decide on anything that is related to them.
Greenspan wasn't penalized for anything. He just found a lousy excuse for the disaster and the only institutions that were penalized were some that cooked the books like the Lehman Brothers. The rest were subsidized and some profited greatly from the fiasco.

 

[Mariner]

Not completely independent institutions.

The Bank of England does what it is bloody well told, more or less and it will be the same in the US. The problem is that the politicians telling them to do what they are bloody well told are too often beholden to the financial sector.

The current useless Chancellor of the Exchequer in the UK, Rishi Sunak, worked for Goldman Sachs then became a hedgie before entering politics. Needless to say, he's not going to do anything which seriously impacts the power of capital in the UK. At least, not wittingly. He doesn't appear capable of thinking his way out of a paper bag.