Bitcoin: Censorship-Resistant Digital P2P Currency

[RunningMn9]

What if crypto currency goes down in value? Like, by a lot?

[Jaymann]

Wow! 6 cards? Does that mean that single or dual wont work or just are slow?
Does it have to be modern cards? What about 6 older ones?

You can, but your performance will go down. If the currency goes down in value, it is like owning stock that goes down, it may go back up again. You can choose to convert to dollars when it is "high."

[Zarathud]

If the currency goes down in value, it is like owning stock that goes down, it may go back up again. You can choose to convert to dollars when it is "high."

If it doesn't go out of business and there are buyers.

[RunningMn9]

If the currency goes down in value, it is like owning stock that goes down, it may go back up again. You can choose to convert to dollars when it is "high."

We need a better term than "currency", because currency it ain't.

In any case, at least with respect to the miners, you didn't spend your money on virtual nothingness. You bought capital equipment which will depreciate in value, but at least is a tangible good that can be resold in the future to recoup costs. And to the extent that you can continue to trick people into giving you their money in return for the virtual nothing that you are mining, you've beaten the system!

[Jaymann]

Actually "mining" is somewhat of a misnomer. What you are actually doing is verifying electronic transactions with massive encryption. It can be considered currency that is backed by the encryption, as opposed to the dollar which is backed by trust in the federal reserve. Of course the whole thing could collapse, but at this point it is expanding and seems to be the wave of the future.

Personally I was working on a water cooled gaming rig which I repurposed as a mining rig. if it all goes to shite I will still have a kick ass gaming rig.

[RunningMn9]

No, it's not currency, for a variety of reasons, not the least of which is that it has no basis of value, and thus the "value" fluctuates wildly based on speculation. And yeah, I know what crypto mining is.

My point was simply that investing in the equipment to "mine" and get virtual nothingness in return seems like a more sensible path to me than buying virtual nothingness. So long as there are suckers willing to pay more for that virtual nothingness than it costs to mine.

[coopasonic]

Does anyone here actually mine? Is it worth it? How do you do it? Just curious whats involved and if it's something I can just do on my PC (or with some minor purchases) I think I might want to give it a try.

I am just now setting up a dedicated rig to start mining. Surprisingly the critical components are graphics cards, not the cpu, and lots of them. It appears you need at least about 6 to start to hit stride (requiring a special motherboard to handle that) and it is creating a run on GPU's. I'm looking at about $3k for the initial rig, plus the power to run it 24/7 - fortunately I have solar panels. Probably looking at about a year to get ROI. But in addition, if the crypto currency goes up in value you have that going for you.

As a gamer that would like to upgrade his video card, screw you and all your brethren.

[gilraen]

Does anyone here actually mine? Is it worth it? How do you do it? Just curious whats involved and if it's something I can just do on my PC (or with some minor purchases) I think I might want to give it a try.

You can try https://www.nicehash.com/ if you don't want to set up any special rigs and just want to use your spare computing power when you're not using your PC. Whether or not what you end up mining is worth the electricity - that's up to you to decide

[Jaymann]

No, it's not currency, for a variety of reasons, not the least of which is that it has no basis of value, and thus the "value" fluctuates wildly based on speculation. And yeah, I know what crypto mining is.

My point was simply that investing in the equipment to "mine" and get virtual nothingness in return seems like a more sensible path to me than buying virtual nothingness. So long as there are suckers willing to pay more for that virtual nothingness than it costs to mine.

So how do you define currency? You can buy stuff with it and get it in return for goods and services. You can make a case that the bills Uncle Sam is cranking out are based on virtual nothingness.

[RunningMn9]

We've been through this multiple times, but something like Bitcoin is no longer a useful currency because it lacks the most important feature - stability. And while it's true that you could spend bitcoins to buy things - who in their right mind would do that? Forgetting the transaction fees, who would use a method of payment that could be work 50 USD today, 178 USD tomorrow, and 12 USD the day after? Would anyone be dumb enough to get their paychecks in a crypto? That would be lunacy because it lacks stability.

I can trade you bottles of whisky for things, that doesn't make bottles of whisky a currency in the traditional sense (else I'd be rich!). Trading me bitcoins for things doesn't make it a currency.

And yes, you could argue that the US dollar is also virtual nothingness. But that's obviously false on it's face. The USD is backed by the full faith and credit of the United States government and it's economy. While some may think that's nothing, it's not. And while the value of a USD changes, it does not do so wildly. When I go to the store and buy a loaf of bread for $2.99, there aren't scenarios where tomorrow that $2.99 is worth $27.45 or $0.34.

You can't legitimately conduct business in the kind of environment where the underlying value of the currency isn't stable. Which is why places like Steam stopped accepting it.

Other cryptos that have a higher chance of succeeding because they scale better can be useful in their own way - but I will never have to own them. We talked about about an example like Ripple/XPR and how it can ease international transactions. That's entirely true - but I don't ever need to own XPR. My bank does. And at that point, stability of value will become paramount.

[Matrix]

We've been through this multiple times, but something like Bitcoin is no longer a useful currency because it lacks the most important feature - stability. And while it's true that you could spend bitcoins to buy things - who in their right mind would do that? Forgetting the transaction fees, who would use a method of payment that could be work 50 USD today, 178 USD tomorrow, and 12 USD the day after? Would anyone be dumb enough to get their paychecks in a crypto? That would be lunacy because it lacks stability.

I can trade you bottles of whisky for things, that doesn't make bottles of whisky a currency in the traditional sense (else I'd be rich!). Trading me bitcoins for things doesn't make it a currency.

And yes, you could argue that the US dollar is also virtual nothingness. But that's obviously false on it's face. The USD is backed by the full faith and credit of the United States government and it's economy. While some may think that's nothing, it's not. And while the value of a USD changes, it does not do so wildly. When I go to the store and buy a loaf of bread for $2.99, there aren't scenarios where tomorrow that $2.99 is worth $27.45 or $0.34.

You can't legitimately conduct business in the kind of environment where the underlying value of the currency isn't stable. Which is why places like Steam stopped accepting it.

Other cryptos that have a higher chance of succeeding because they scale better can be useful in their own way - but I will never have to own them. We talked about about an example like Ripple/XPR and how it can ease international transactions. That's entirely true - but I don't ever need to own XPR. My bank does. And at that point, stability of value will become paramount.

Steam discontinued Bitcoin not because of volatility, but because of transaction cost. Bitcoin doesn't work for small transactions, since it is also slow to confirm payment going through. For ripple Bank also don't need xrp, since they are using different product of ripple ( it has 3 products) . No one needs xrp, it's one of the worst crypto at the moment due to hype and no utility plus management team owning 60% of the tokens.

[Moliere]

Crypto Marketplace Binance Says ‘All Funds Are Safe’ as Traders Panic

Binance, one of the biggest cryptocurrency marketplaces by volume, is trying to calm angry customers who claim their digital coins were sold without their permission.

“All funds are safe,” wrote Zhao Changpeng, chief executive officer of Asia-based Binance, in a tweet Wednesday. “There were irregularities in trading activity, automatic alarms triggered. Some accounts may have been compromised by phishing from before. We are still investigating.”

He then sent a second tweet: “We have localized the irregular trades, they will be reversed. All funds are safe, thanks to the fast alarm.”

A good time to buy when everyone is panicking over a false rumor.

[RunningMn9]

A good time to buy when everyone is panicking over a false rumor.

A good time to start spreading false rumors when you are getting ready to buy!

[Moliere]

Mt. Gox crashes Bitcoin a second time, and there’s more to come

Which whale dumped enough Bitcoins to crash the price in December, January and February? It looks like it was the Mt. Gox exchange’s bankruptcy trustee, Nobuaki Kobayashi, selling the remaining coins to reimburse creditors.

Kobayashi has sold about $400 million worth of Bitcoin and Bitcoin Cash — the latter being the free BCH that was given to every BTC holder as of 1 August — since late September, as he told a creditors’ meeting on Wednesday morning: 35,841 BTC sold for 38,231,389,537 JPY and 34,008 BCH sold for 4,756,654,806 JPY.

The effect on the price was clearly visible. Reddit user riverflop posted this diagram to /r/cryptocurrency, correlating the Mt. Gox Bitcoin selloffs with the Bitcoin price:

[Moliere]

[Moliere]

Trump bans Americans from buying Venezuela's cryptocurrency.

Section 1. (a) All transactions related to, provision of financing for, and other dealings in, by a United States person or within the United States, any digital currency, digital coin, or digital token, that was issued by, for, or on behalf of the Government of Venezuela on or after January 9, 2018, are prohibited as of the effective date of this order.

[Isgrimnur]

Free market FTW

[LawBeefaroni]

Got Bitcoin blockchain? You probably got child porn.

German researchers have discovered unknown persons are using bitcoin’s blockchain to store and link to child abuse imagery, potentially putting the cryptocurrency in jeopardy.

The blockchain is the open-source, distributed ledger that records every bitcoin transaction, but can also store small bits of non-financial data. This data is typically notes about the trade of bitcoin, recording what it was for or other metadata. But it can also be used to store links and files.

Researchers from the RWTH Aachen University, Germany found that around 1,600 files were currently stored in bitcoin’s blockchain. Of the files least eight were of sexual content, including one thought to be an image of child abuse and two that contain 274 links to child abuse content, 142 of which link to dark web services.

“Our analysis shows that certain content, eg, illegal pornography, can render the mere possession of a blockchain illegal,” . “Although court rulings do not yet exist, legislative texts from countries such as Germany, the UK, or the USA suggest that illegal content such as [child abuse imagery] can make the blockchain illegal to possess for all users.”

[Moliere]

South Korean millennials are reeling from the Bitcoin bust

An estimated three in 10 salaried workers in Korea had invested in e-currencies by December 2017, according to a survey by Korean recruiting firm Saramin. Eighty percent of those people were in their 20s and 30s.

But now that the prices of cryptocurrency coins like Bitcoin, Ethereum, and Ripple have tanked, many Korean youths are dealing with the mental and financial aftermath of their losses. Korean psychologists have reported an uptick of patients from the so-called “Bitcoin blues,” divorce counselors say marriages are splitting from failed investments, and even the country’s prime minister said that virtual currencies are on track to cause “serious distortion or pathological social phenomena” among Korea’s young population. “As soon as I break even, I’m out,” Oh says. “It’s just not healthy mentally.”

[LordMortis]

https://www.reuters.com/article/us-jpmo ... SKBN1HI2T4

NEW YORK (Reuters) - JPMorgan Chase & Co has been hit with a lawsuit in Manhattan federal court accusing it of charging surprise fees when it stopped letting customers buy cryptocurrency with credit cards in late January and began treating the purchases as cash advances.

the only surprise to me is that they didn't treat it like cash at the outset. As far as I know you can't even use credit cards to buy lottery tickets for similar reasons. Maybe they'll let me buy stock with my card?

[LawBeefaroni]

South Korean millennials are reeling from the Bitcoin bust

“As soon as I break even, I’m out,” Oh says. “It’s just not healthy mentally.”

I love that they assume a break even exit.

[Moliere]

Hackers keep robbing cryptocurrency YouTubers

Ian Balina, a former IBM salesman who became a full-time cryptocurrency trader and pundit, is not known for his modesty. Like many YouTube personalities in the vein of motivational speaker Gary Vaynerchuk, he brands himself as a self-starter-made-good who now wants to teach you how he did it (while clarifying, of course, that his recommendations are not investment advice). He regularly shares screenshots of his extensive portfolio, which was valued at more than $3 million on April 14th, according to an image he posted on Twitter and Instagram. One of his videos is called “Six-Figure Slave to Crypto Millionaire.”

This bravado may have backfired. On Sunday, during one of his marathon live streams, Balina found himself unable to log into the Google Spreadsheet where he tracks initial coin offerings or ICOs, which are crowd sales for new cryptocurrencies. That appears to be because a hacker took control of his accounts, draining a substantial portion of his holdings. The Next Web estimated that the total stolen was equal to almost $2 million on paper.

Seems pretty dumb to draw this kind of attention to yourself.

[Moliere]

New York’s attorney general is investigating bitcoin exchanges

New York Attorney General Eric Schneiderman launched an investigation into bitcoin exchanges today, his office announced. He’s looking into thirteen major exchanges, including Coinbase, Gemini Trust, and Bitfinex, requesting information on their operations and what measures they have in place to protect consumers.

“Too often, consumers don’t have the basic facts they need to assess the fairness, integrity, and security of these trading platforms,” Schneiderman said in a statement. His office sent detailed questionnaires to the thirteen exchanges, asking them to disclose who owns and controls them, and how their basic operation and transaction fees work. The questionnaire also asks for specific details on how exchanges might suspend trading or delay orders, indicating Schneiderman is particularly concerned with exchanges manipulating the timing of public orders.

The investigation will attempt to shed more transparency on how platforms combat market manipulation attempts and suspicious trading, as well as bots, theft, and fraud. Many of the exchanges Schneiderman is targeting, such as Beijing-based Huobi, have headquarters located outside the US, but the attorney general has jurisdiction over any foreign business operating in New York.

[Moliere]

Facebook is creating a mysterious blockchain division

Facebook is launching its own blockchain division as part of a broader reorganization of its executive lineup, multiple sources confirmed to Recode today. The move comes four months after CEO Mark Zuckerberg said in a Facebook post that he wanted the company to “go deeper and study the positive and negative aspects of” cryptocurrencies.

The company is saying little about its blockchain division for now. But we do know that David Marcus, who was serving as the vice president of messaging products and overseeing Facebook Messenger, will be running the blockchain group. The former CEO of PayPal, Marcus has long been interested in payments, and he currently serves on the board of bitcoin exchange Coinbase. “After nearly four unbelievably rewarding years leading Messenger, I have decided it was time for me to take on a new challenge,” Marcus wrote in a Facebook post, “I’m setting up a small group to explore how to best leverage Blockchain across Facebook, starting from scratch.”

[AWS260]

Monster Cable pivots to blockchain.

Coindesk was the first to spot Monster’s recent SEC filing to start its own initial coin offering. The documents outline a plan to create Monster Money Tokens (“MMNY”), a cryptocurrency that will be used to buy the company’s “high-end” cables online. Does anybody need a cryptocurrency to buy Monster cables? Absolutely not. Should people buy Monster Cables at all? It’s your life, buddy.

Seems about right.

[Moliere]

John McAfee Says He’s Releasing a Physical Cryptocurrency

Each MRU has an initial face value of $9.95 and can be redeemed for a one-minute in-person meeting with McAfee (yes, they’re stackable). McAfee said that 341,000 MRU notes of different denominations have been printed, with a total circulation of 6,050,000 MRU and an implied market cap of $60.2 million.

Assuming the 72-year-old McAfee set aside 10 hours per day to meet with MRU holders (including weekends and holidays), it would take him nearly 28 years to fulfill these obligations. Given his age and lifestyle, that timeline is perhaps a tad optimistic. In the event of his untimely death, MRU holders will not receive any compensation.

There’s a case to be made that the redemption process is perhaps even more convoluted than attempting to withdraw USD from Tether. According to a message printed on the notes, they can only be redeemed in person in Mexico during a two-hour window each day, at which time the owner will be given a particular date, time, and location in the United States in which he or she will be able to meet with McAfee. Individuals, incidentally, may only redeem 100 MRUs at a time.

[Isgrimnur]

Death toll: +1

Two Sherpa joined three Ukrainian climbers for a trek to the summit on May 14 carrying two Ledger crypto wallets containing about $50,000 worth of new cryptocurrency tokens launched by ASKfm, the world’s largest question-and-answer board, Rock and Ice reported.

The plan was to bury one of the wallets at the summit and dare a brave soul to trek up and retrieve the tokens.

The team got to the summit of Mount Everest safely; however, it was on the way down that it all went wrong. According to reports, the weather started to worsen before the team reached base camp.
...
However, one of the Sherpas, who was believed to be Lam Babu Sherpa, was reportedly left behind while the climbers made their way back. He was believed to be dead.

A May 17 press release from ASKfm, published after the group returned to base camp, did not mention the Sherpa’s status.

[Isgrimnur]

CNBC

Cryptocurrency projects have been popping up left, right and center in the past 18 months, but over 800 of those are now dead, adding to comparisons between the current digital coin market and the dotcom bubble in 2000.
...
There has been an explosion in ICOs [initial coin offerings]. Companies raised $3.8 billion via ICOs in 2017, but in 2018 so far, this number has already shot up to $11.9 billion, according to CoinSchedule, a website that tracks the market.

However, hundreds of these projects are now dead because they were scams, a joke or the product hasn't materialized. Dead Coins is a website that lists all the cryptocurrencies that fall into those categories. So far, it has identified just over 800 digital tokens that it considers dead. These coins are worthless and trade at less than 1 cent.

Bitcoin, which is the biggest cryptocurrency by market capitalization or value, has also had a tough year. The price of bitcoin has fallen roughly 70 percent since its record high near $20,000 last year, according to CoinDesk data. The big plunge in bitcoin's price has has drawn comparisons with the Nasdaq's sharp fall in 2000 and the failure of many cryptocurrencies has been likened to some of the companies that crashed during the dotcom boom.

Some of the recent bearish sentiment came after two South Korean cryptocurrency exchanges were hacked.

ICOs are incredibly risky investments and there is a lot of fraud in the space. Earlier this year, CNBC reported on a scam ICO called Giza. The fake start-up ended up running off with $2 million of investor money. Still, many advocates see a future for ICOs as an alternative to initial public offerings and venture capital funding.

[malchior]

This is a pretty significant development in crypto currencies. This is an attempt to bridge crypto directly to "paper money". We will see if it survives the attempt especially since ethereum still has a lot of skepticism around it but it is an interesting development nonetheless.

[GreenGoo]

Hey Lawbeef,

Didn't you throw some money at bitcoin a few years ago? How'd that turn out? I haven't been following very closely.

[AWS260]

We're one year on from Bitcoin's peak. Sure, it's been a rough year for crypto, but now there's nowhere to go but up!

Bitcoin has lost 80% of its market capitalization amidst a market-wide crash this year. But Spencer Bogart believes the digital currency can still correct up to 1328% from its current value.

The Blockchain Capital partner told CNBC that he expects bitcoin to touch $50,000 in the future, similar to what he predicted during the digital currency’s famous bull run in 2017. However, this time, Bogart shied away from giving any timeline for his projection.

***

"2018 has been a fantastic year for bitcoin. Forget prices."

[LawBeefaroni]

Hey Lawbeef,

Didn't you throw some money at bitcoin a few years ago? How'd that turn out? I haven't been following very closely.

Missed this earlier. No, never bought Bitcoin or any other crypto. Iirc I called it tulip bulbs.

I did just buy OSTK because I like Trade Zero but it's a gamble on blockchain. Total speculation.

[Isgrimnur]

WaPo

After the founder of Canada’s biggest cryptocurrency exchange, QuadrigaCX, died unexpectedly, about 115,000 clients have been unable to retrieve $190 million in holdings — because the owner was the only one who knew the password to access them, the company said.

Gerald Cotten, 30, died of complications with Crohn’s disease while doing philanthropic work in India in early December, according to a post on QuadrigaCX’s Facebook page. The company didn’t announce Cotten’s death until more than a month after he died, and as customers panicked and tried to withdraw their funds, QuadrigaCX’s website went down, and the company went off the grid.

When QuadrigaCX broke its silence a week later, the company revealed it had filed for creditor protection in the Nova Scotia Supreme Court, according to reporting from Coindesk. Evidently, Cotten was the sole person responsible for transferring QuadrigaCX funds between the company’s “cold wallet” — secure, offline storage — and its “hot wallet” or online server, according to court documents. Very little cryptocurrency was stored in the hot wallet for security purposes. Cotten’s laptop was encrypted, and his widow, Jennifer Robertson, and the expert she hired have been unable to access any of its contents. The company had no corporate bank accounts and used third-party services to manage payments and withdrawals.

[Holman]

Twitter drama this afternoon as hackers posted multiple fake bitcoin scam requests disguised as big-name accounts.

[Daehawk]

hahahahaa

[Zarathud]

Does anyone know a good primer explaining the technology in the processing process for bitcoin mining and its implications on a server/network?

[pr0ner]

Does anyone know a good primer explaining the technology in the processing process for bitcoin mining and its implications on a server/network?

If you're looking to actually mine, I've been told by a former miner that it's not really worth it for someone to mine solo anymore.

[Holman]

I recently saw it pointed out that the energy cost of mining enough bitcoin to buy a hamburger is the same as ordering a hamburger in California and having someone deliver it to you via Tesla from New York.

Is that so?

[Pyperkub]

Does anyone know a good primer explaining the technology in the processing process for bitcoin mining and its implications on a server/network?

If you're looking to actually mine, I've been told by a former miner that it's not really worth it for someone to mine solo anymore.

However, remember that bitcoin is dependent on there being enough "miners". If any conglomerated miner ever owns 51%, they can do what they will with it as well.

This is to impart the need for a higher hash rate than the rest of the (honest) miners. Mining success is probabilistic, however, so this 50% or 51% is an indication of the expected behaviour given an infinite number of attempts.

Using the scenario where an attacker tries to build their own chain to eventually replace the original one:

If the attacker has 50% of the network hash rate, the expected result is that the two chains will grow at the same pace, and the attacker's chain will never outpace the honest chain.

If the attacker has slightly over 50% of the network hash rate, the attacker's chain will outpace the honest chain, at a rate commensurate with how much over 50% the attacker controls.

If the attacker has less, then the attack chain will be left in the dust.

And if you can rebuild the hash chain, you effectively own it and thus 100% of the "currency".

Longer, pdf look at the issues with Bitcoin as a currency:

his problem is further compounded by the fact that not everyone has the computing power, equipment, and technological knowhow that is necessary to participate in mining the blocks (mining is more complicated than updating the blockchain, which can be set on autopilot). Instead, mining has largely become the realm of small companies who are dedicated to its execution. But users are not at fault here; it would indeed be a serious waste of electricity to compete with other miners and groups.Thus, although those who use bitcoins like the idea of a decentralized currency, they themselves are not willing, or simply unable, to contribute to it. This phenomenon has already taken place: In 2016, China became the leader in bitcoin mining.

China has not yet consolidated its miners, the top mining companies in the nation already mine 71% of all blocks worldwide. Meanwhile, users within the U.S. only mine 1% of all blocks.6 Many companies that are dedicated exclusively to mining bitcoin have set up shop in China, taking advantage of the nation’s relatively cheaper power.7 It would be all too easy for the Chinese government to nationalize such enterprises in order to control bitcoin. Transactional ProblemsBitcoin also faces numerous transactional problems. The basic functions of a currency are the following: It is a store of value, a medium of exchange, and a unit of account. Although bitcoin meets the criteria as a medium of exchange, it fails as a store of value and a unit of account.

That paper is from 2018. Probably worse concentration now.

[The Meal]

I recently saw it pointed out that the energy cost of mining enough bitcoin to buy a hamburger is the same as ordering a hamburger in California and having someone deliver it to you via Tesla from New York.

Is that so?

I've seen folks asking questions on solar forums regarding setups for bitcoin operations.

It's free to ask questions (even if they're really dumb questions), but that would seem to indicate to me that there are still places in the Western world where energy is cheap enough that bitcoin mining operations may provide a net positive gain.