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Carantoc said..

evlPanda said..
I ...think I follow?

Naaaahhhh.

In generation A there are 1 million potatoes and 21 million bitcoin. Each potato is worth 21 bitcoins.

Potatoes here are representing the total value of all assets of generation A.

In generation D there are now 16 million potatoes. i.e the total value of assets is 16 times greater in real terms.

But if there are still only 21 million bitcoin then each potato is now only worth 1.3 bitcoins.

1 btc for generation A does not equal 1 btc for generation D.



As you pointed out if you print 25% more currency in an economy that is growing by 2% this creates an imbalance and a deflation in the real-terms value of that currency. I took it you were suggesting this was bad and that bitcoin was the solution as nobody could create more of it so it would therefore be very stable.

I was merely pointing out that the same goes both ways. If there is more currency OR less currency relative to the total value of assets there is a change in real value of the currency.

You might say a relative reduction in currency volume is good for savers. Fair enough. But it is bad for spenders. And we all have to spend at some point.

I guess you could argue the change in relative bitcoin volume is much easier to predict than the whim of the central bankers to print dollars. But you still have the unknown change in the economy so the change in relative value isn't calculable, just perhaps slightly easier to predict.



But it is all by-the-by anyway. Because that assumes bitcoin is a currency.

But as you say bitcoin is just a speculative commodity or digital asset. Nothing more, nothing less. It isn't a money and it isn't a currency. It is a speculative non-tangible commodity that has no purpose other than being a very specialized speculative digital commodity.

If the value of my potato collection crashes I can still cook up a tasty baked potato. If the value of my bitcoin collection crashes then the Chinese or Ukrainian miners walk away with all my real money.

Bing! Bing! It doesn't matter if inflating or deflating; the value of the money or unit of account will change.
Money itself does not intrinsic value, especially the ones and zeroes we all use now.
However a system to assist in the transaction of that money does have value: eftpos, bPay, visa et al

Bitcoin is a payment system, with its own baked in currency.
So sure visa does far many transactions per day, but none of that is actually in visa. Nobody ever bought anything using visa as a money.

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myscreenname said..

So many people were telling you to invest!

That little statement is a bit of a give away to what you are really thinking. That the bitcoin game is over?

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evlPanda said..
does have value: eftpos, bPay, visa et al

Bitcoin is a payment system, with its own baked in currency.
So sure visa does far many transactions per day, but none of that is actually in visa. Nobody ever bought anything using visa as a money.

Sure is a payment system:

www.news.com.au/finance/money/costs/criminal-abuse-record-sums-of-illicit-money-in-cryptocurrency-report-says/news-story/da5fbf2bd4e494811c4e403b7ae30a86

So, if I had followed all you'se people advice and bought bitcoin on say 4th Feb (when this thread started), I'd currently be looking at a -13.2% return.

Or, as more commonly known, a big loss.


But - and here's the smart bit....

I buy a powerball ticket this morning and then when I win the jackpot tonight I will make a 120,000,000 / 5.40 return.

That's a +22,222,222.22% return.

Or, as more commonly known, a big win.



So whose the loser now myscreennam ??? hey, hey ???

Come 5.26pm tonight I sure ain't gonna have time for none of your gossip.

mmm, 4 hours later and now I'd be down 17.99% on bitcoin.

So that's 22,222,240.21% better off with my winning powerball.

Impossible,.. I have the winning numbers
1,7,8,11,13,15,19 and powerpick.... Wait one hour......

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Gazuki said..
1,7,8,11,13,15,19 and powerpick....

Pffft.

You gotta pump those numbers up, those are rookie numbers in this racket.

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Carantoc said..

Gazuki said..
1,7,8,11,13,15,19 and powerpick....

Pffft.

You gotta pump those numbers up, those are rookie numbers in this racket.

There my kids birthday dates ...and your mum's of course

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Carantoc said..
So, if I had followed all you'se people advice and bought bitcoin on say 4th Feb (when this thread started), I'd currently be looking at a -13.2% return.

Or, as more commonly known, a big loss.

I'm not sure if you aware, but Russia declared war on Ukraine today. I think you will find that markets worldwide are tumbling.

If you bought bitcoin 2 years ago you would be up almost 300% and if you bought it 5 years ago you would be looking at a 3,000% return. Or, as more commonly known, a big gain.

I was just thinking: I don't think your ticker would be up to holding bitcoin, giant gains and big drops are all part of it. Stick to something more passive like collecting bottle tops.

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myscreenname said..
If you bought bitcoin 2 years ago you would be up almost 300% and if you bought it 5 years ago you would be looking at a 3,000% return. Or, as more commonly known, a big gain.

I was just thinking: I don't think your ticker would be up to holding bitcoin, giant gains and big drops are all part of it. Stick to something more passive like collecting bottle tops.

Just out of interest, how do you cope with that?

If something is up 3000%, what stops you from selling, especially if it could just as easily be down 50% tomorrow?

I wouldn't have the nerve for it, unless I bought for a pittance in the beginning. Even then I would have probably taken my gains and run well before now.

How to make money on bitcoin, easy, find a Russian that wants to use his money but not in Russia.

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Carantoc said..
So, if I had followed all you'se people advice and bought bitcoin on say 4th Feb (when this thread started), I'd currently be looking at a -13.2% return.

Or, as more commonly known, a big loss.


But - and here's the smart bit....

I buy a powerball ticket this morning and then when I win the jackpot tonight I will make a 120,000,000 / 5.40 return.

That's a +22,222,222.22% return.

Or, as more commonly known, a big win.



So whose the loser now myscreennam ??? hey, hey ???

Come 5.26pm tonight I sure ain't gonna have time for none of your gossip.

Looking to make a quick buck, in anything, is gambling. More so a volatile asset like bitcoin.

You are down 100% on your lottery ticket. That's infinity% more than you are down on bitcoin.

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FormulaNova said..

myscreenname said..
If you bought bitcoin 2 years ago you would be up almost 300% and if you bought it 5 years ago you would be looking at a 3,000% return. Or, as more commonly known, a big gain.

I was just thinking: I don't think your ticker would be up to holding bitcoin, giant gains and big drops are all part of it. Stick to something more passive like collecting bottle tops.

Just out of interest, how do you cope with that?

If something is up 3000%, what stops you from selling, especially if it could just as easily be down 50% tomorrow?

I wouldn't have the nerve for it, unless I bought for a pittance in the beginning. Even then I would have probably taken my gains and run well before now.

What stops me from selling?

1) investing is long term.

2) if you can't handle the 50% drops then you don't deserve the 1,000% rises.

3) not all eggs in one basket.

4) it's actually one of the appealing aspects of bitcoin. There is nearly always something happening with it.

5) you get used to it.

6) 50% drop = "on sale"!

7) i already did sell ($)

8) tax

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evlPanda said..

1) investing is long term.

Long term? To make gains long term Bitcoin will need new players. It's down 6% on this time last year. Without new players it will tick along with short term players trying to out-think each other. (Up 10% on a week ago) But with no real information to go on the price will be a one-dimensional random walk. Here's a heap of them, pick one.




And the technological age has yet to take a direct hit from a solar super storm. They reckon even the toilets won't flush. How will bitcoin survive one of these?
science.nasa.gov/science-news/science-at-nasa/2014/23jul_superstorm

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Ian K said..

Long term? To make gains long term Bitcoin will need new players. It's down 6%

Up 300% on 2 years ago and up 3000% on 5 years ago.

'Long term': I'd think most people assume that's much more than a year.

Besides, people are born every minute and new markets and opportunities always open up. Also, most investors switch between assets, depending on what they perceive will make them feel better off. I bet many Russians who cashed in all their bitcoin are probably thinking of getting into it again now that their currency has crashed. Most people sell when assets start dropping. Lots of demand is likely as a result of this war, maybe it's a good time to jump into it again.

IDK, would you rather buy Ruble - down 40% on this time last year - or bitcoin today?

But Panda is right, if you haven't the ticker to wear 50% falls, don't go there.

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myscreenname said..

Up 300% on 2 years ago and up 3000% on 5 years ago.

They're just the new investors, sort of matches the number of wallets being used. Is the curve flattening? Or is it just a blip?

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Ian K said..
They're just the new investors, sort of matches the number of wallets being used. Is the curve flattening? Or is it just a blip?

Probably flattening, wallets don't mean much. Probably most are empty. Market cap might be a better measure of where bitcoin is at.

coinmarketcap.com/charts/

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myscreenname said..

Probably most are empty.

Why do you think most are empty?

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Ian K said..
Why do you think most are empty?

Well, I have about 10 empty old wallets, paper ones and ones created using numerous apps. You can create wallets online pretty easily.

www.bitaddress.org/

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myscreenname said..

Ian K said..
Why do you think most are empty?

Well, I have about 10 empty old wallets, paper ones and ones created using numerous apps. You can create wallets online pretty easily.

www.bitaddress.org/

But you did have money (btc) in them at one stage. Otherwise, as I understand, they would never have been lodged in the system?

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Ian K said..

But you did have money (btc) in them at one stage. Otherwise, as I understand, they would never have been lodged in the system?

Yes I did, and yes that's correct.

I don't have any BTC now, I prefer to hold WBTC, which is on the Ethereum blockchain. Pretty much the same thing. It's more convenient, as I don't have to use a centralised exchange to swap tokens or rearrange the deck chairs.

Interesting that blockchain/crypto is being used as a weapon in the war.

www.abc.net.au/news/science/2022-03-02/russia-ukraine-war-testing-ground-cryptocurrencies-blockchain/100869596

Although not crypto some friends of mine have developed a neat little virtue signalling app with a payload.

StopWarNow allows anyone with a web browser and internet connection to easily participate in a global distributed denial of service attack aiming to disable key Russian propaganda sites and services supporting the invasion. No civilian services are included in our target.

stopwarnow.github.io/

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Ian K said..
Long term? To make gains long term Bitcoin will need new players. It's down 6% on this time last year. Without new players it will tick along with short term players trying to out-think each other. (Up 10% on a week ago) But with no real information to go on the price will be a one-dimensional random walk. Here's a heap of them, pick one.

It doesn't need new players. Just the existing holders can affect the market.

Extreme example to illustrate/exaggerate/make clear: If there are zero new "players" and nobody is selling, but the existing players all want to buy more, are they going to offer higher and higher buy offers? Yep.

Markets don't work like that; it's not a pyramid scheme. Liquidity matters.

And is the value of bitcoin doing a Monte Carlo walk? Within certain ranges and time absolutely! I mean 25% of it at least is random chop; pure speculation, chance and gambling, for sure!

But you can't honestly say, right, that the last 10 year run has been a Monte Carlo walk. That goes against all odds, and frankly all rationality. There's at least 50% of it current value that is solid, and growing exponentially (albeit a slower and slower rate, with less and less volatility, too)

It's simply more and more and more people understanding money, properly. I keep trying to steer the conversation around to what money is - a belief system - but we keep getting bogged down in the technical.

Some random Pokemon card might be worth 0 to you or me, but to someone else it is worth $100K. So, it is worth $100K.

Money (and other things) aren't worth what we think they are worth, they are worth what other people think they are worth. My house is worth $n because I think that someone else thinks it will be worth this much, because someone else thought the house next to mine was worth that much.

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And the technological age has yet to take a direct hit from a solar super storm. They reckon even the toilets won't flush. How will bitcoin survive one of these?

...quite easily? Not following. You don't think there are people with the entire blockchain on a few CDs, even paper, in case of this scenario? People are *evangelical* on Bitcoin. The entire chain is less than 1TB. I can't see why it would take more than a couple of hours to be back up.

How will the banks handle it?

Look, Bitcoin is anti-fragile. Everything you can think of has already been thought of and answered. This is an open source project., with many, many brilliant minds contributing. Whenever a flaw or threat is found it gets patched, and it grows stronger.

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Ian K said..

myscreenname said..

Up 300% on 2 years ago and up 3000% on 5 years ago.

They're just the new investors, sort of matches the number of wallets being used. Is the curve flattening? Or is it just a blip?

It is impossible to accurately estimate the number of wallet holders.

Each wallet contains an enormous amount of possible addresses, and each transaction uses a brand new address, by design.

It is even impossible to tell if two addresses belong to the same wallet.

On the flip side a single address for, say, an exchange, can be holding bitcoin for millions of customers.

The only way to sorta estimate is to use the number of people that have used an exchange, but i've used many for example, so even that is inaccurate.

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evlPanda said..

...quite easily? Not following. You don't think there are people with the entire blockchain on a few CDs, even paper, in case of this scenario? People are *evangelical* on Bitcoin. The entire chain is less than 1TB. I can't see why it would take more than a couple of hours to be back up.

How will the banks handle it?

How will the banks handle it? That's a good question. Hopefully our account balances are backed up on something that runs on batteries in a Faraday cage. So even if it's impossible to spend money for a week or two the bankers can run around and cobble together a system. You got your last trolley of groceries as the storm hit for free. Well done.

Trouble with bitcoin is it runs itself. No bankers to oversee the recovery. All the miners are connected to the grid drawing heaps of power. If 95% of the machines get fried who's going to reduce the hash difficulty so the blocks can be completed in less than a week? The hash difficulty is automatically updated every fortnight but can anyone step in and do it manually? And some miner, who wasn't making the grade in the mining game, shut down all his machines, disconnected them from the grid, put them on pallets. The proof of work is now so low, he can hook them up to a 100kW diesel generator and do the 50% attack. (As long as he's got something that looks passable as a blockchain on a CD that is.)

^ Yeah, that's an interesting scenario and problem.

But hey; can't the banks do all sorts of nefarious stuff too?

There would definitely be some issue with the block times and difficulty rate. We saw this soon after the Bitcoin Cash hard fork in late 2017, where hash power was swinging wildly between the two chains, and transactions on both were running normal, then at a crawl, then normal etc. Both nearly froze, and sensing this both came to a consensus.

It is possible that, say, a mining pool on one side of the planet is not hit, and has 50%+ of the hash rate. Are they going to attack Bitcoin? It seems very unlikely as their entire business, all its hardware, its treasury, its future, is in Bitcoin.

As for the hash rate: yes, blocks/mining would slow to a crawl until the difficulty is adjusted, either by reaching the block where difficulty is adjusted, or if consensus was reached across enough nodes to adjust it via a software update. Consensus being the operative word here. I doubt given the extreme situation many if any nodes would indicate any objection.

Any nodes that don't agree can continue on with the "classic" version of the software, and wait until the block that adjust difficulty is mined, but with most miners opting for the software update (surely) that fork/chain would stop mining, and die. (or, they would accept the heaviest chain either way, not sure.)

So to answer your question "The hash difficulty is automatically updated every fortnight but can anyone step in and do it manually?": No, nobody can, but everyone/enough people can, if that makes sense.

A real world example very similar to this is the block size debate which saw some nodes agreeing to increase the block size and not implement SegWit, and others keeping the block size at 1MB and implementing SegWit. The two are incompatible. We now have Bitcoin Cash and Bitcoin.

---

Bitcoin is anti-fragile. The more it is destroyed the stronger it becomes, sorta, in a weird way. It's best practise software design: fail often.

Not unlike the internet it is self-healing, and can survive being split in half etc. etc. No central point of failure.