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...Aaaaaaand this is exactly why you're going to miss the boat here on new forms of innovative currency that represents a flight to quality from more corrupt fi

...Aaaaaaand this is exactly why you're going to miss the boat here on new forms of innovative currency that represents a flight to quality from more corrupt financial markets. In a year or so you'll be buying cryptocurrency, especially when the Yield Curve starts dropping and we enter another downturn in the Market. There is a generation of kids who will only know electronic gold aka cryptocurrency. See: https://www.mixcloud.com/TheTimFerrissShow/244-the-quiet-master-of-cryptocurrency-nick-szabo/ https://www.mixcloud.com/TheTimFerrissShow/244-the-quiet-mas...

hendzen 9y ago
How exactly are cryptocurrency markets less "corrupt" than our current capital markets?
- gaetanrickter 9y ago
  To start, ever heard of Quantitative Easing or bailing out banks with billions over consumers?
  - tuxxy 9y ago
    To add, I love Bitcoin, but this is why Proof of Stake/Ethereum is also not that great in my opinion. The DAO hardfork was nothing but a bailout.
    - deleted 9y ago
      [deleted]
    - oh_sigh 9y ago
      That's a somewhat scary problem for cryptocurrencies. Basically if 51% of the network decides that they don't like you then they can essentially take all of your currency(or, rather, make it worthless)
      - gruez 9y ago
        That's false. The most that can happen in a 50% attack is that transactions are rolled backs.
        oh_sigh 9y ago
        Look at what happened in the etherium hard fork because of the dao shenanigans. That's why there are two etheriums now...etherium and etherium classic
        polotics 9y ago
        What happened was something else entirely, with a success in decentralised governance to punish the bad actor. What do you want us to look at exactly?
        oh_sigh 9y ago
        Isn't that exactly what I said in my original post? A majority of people in the network wanted to (effectively) take the bad actors coins, so they did.
        magnetic 9y ago
        If I "control 50%+" of the hash power of the network can't I write my own transaction history from a given point for the world to gobble? If that is so, can't I simply transfer all the coins to my account, and go to some exchange and get $$ for my $COINs? You can roll back the history if you want, but as long as I controlled the network long enough to get $$ out of my ill gotten $COINs, it seems like I've been able to rob the network of it's market cap. And if you roll back history, isn't the exchange (that gave me $$ for my $COINs) going to be extremely upset to have neither the coins nor the $$?
        gruez 9y ago
        any point, yes but you'll have to play catch-up with the main chain. suppose you want to take over all the chain starting from 2 weeks ago. even if you have 51% of the network, you're at a disadvantage already because your chain is 2 weeks behind, and the main chain is constantly advancing. you only have a 1% speed advantage over the main chain, so it will take ages for you to catch up (almost 4 years to be exact, assuming the hashrate stays constant). keep in mind that getting 51% is hard as it is because it requires you to either double the current hash rate (ie. you add hashing power equal to the network's current hash rate) which is incredibly expensive, or hack 51% the pools which is easier, but also likely to be noticed. in either case, once the fork occurs, alarm bells will go off everywhere and every competent exchange/payment processor is going to shut down all withdraws/deposits until the situation is investigated. once it's discovered that a malicious actor successfully attempted a 51% attack, the price of the coin will drop to 0 and your efforts would be wasted. if all you want to do is crash bitcoin then you'd have achieved your goal (albeit at a huge expense), but it's certainly not a good way of making money.
    - ojr 9y ago
      a pull request being approved by core developers in an open source project is different than a bank being bailed out by the government, different scales as well
  - tedsanders 9y ago
    Quantitative easing was an act of monetary policy. Monetary policy helps stabilize the value of a currency and the output of a country. Bitcoin has no mechanisms to stabilize aggregate supply & demand, and therefore is inherently subject to higher volatility. I think that if there was any mistake of QE, the mistake was that it didn't go far enough. Looking back, the recession ended up being deeper and longer than initially expected, and worries over inflation ended up not proving true. With the benefit of this hindsight, it seems clear to me that more QE would have helped the country.
    - polotics 9y ago
      Wow you really drank the kool-aid did you? QE has meant huge asset inflation and huge profits for asset holders. At the expense mainly of future generations and current retirees. You know where the US-Fed balance sheet stands right now?
  - hendzen 9y ago
    Why is QE corrupt? And bank bailouts, while politically unpopular turned out to be profitable for the government. In contrast, bitcoin exchanges have a high rate of getting hacked and losing all customers money. There is no protections against insider trading... and mining is controlled by a couple guys in China, not a body that we have democratic control over. How is that better than the current system?
the_gastropod 9y ago
Let's use this as a test for your future predicting abilities. What do you think is going to happen in a year, exactly? Any concrete predictions?
- gaetanrickter 9y ago
  My personal prediction based on the fact that there are now exchanges and hedge funds involved, is based on what happened in the 2008 financial crisis. Bitcoin rose as people viewed this new medium as safer and with tax benefits. Smart money/investors are position now, diversifying across cryptocurrencies before the next Black Swan event. I predict that on every spike down in cryptocurrencies, smart money will come in and the crypto's will make higher highs from here forward and more importantly, during a flight to quality during the next downturn.
FooHentai 9y ago
>this is exactly why you're going to miss the boat here on new forms of innovative currency that represents a flight to quality from more corrupt financial markets. Perhaps. Equally possible is that we're somewhere on the peak portion of the usual technology hype cycle (https://en.wikipedia.org/wiki/Hype_cycle https://en.wikipedia.org/wiki/Hype_cycle). The part dominated by rife speculation of potential applications of the technology and overly optimistic estimations of it's benefits. That does sound a lot like the current crypto currency hubbub. Especially since as mentioned in the OP article, actual killer applications of crypto currency have yet to appear. So when speculation and the confidence game surround it subsides, we'll enter the trough of disillusion, where if anything the technology will be undervalued for a time. Finally if practical uses emerge, the curve ticks up and levels off as a true reflection of the reality of the situation. We are certainly not there yet. "Miss the boat" is a dead giveaway that we're in the hype phase. It's a simple appeal to the Fear of Missing Out (FOMO) which often drives investors into a bubble at it's peak. The trope of 'this time it's different' may prove right once in a blue moon, but the burden of proof definitely sits with the party making the claim. Specific to crypto currency as a technology, there are some very real reasons to be cautious at this time. All value right now is based on the sole foundation of perceived future value. This mirrors housing market bubbles etc. Without significant real-world utility emerging, the value of bitcoins will disappear once everyone figures out that selling them to each other is not actually increasing their value. Bitcoin is not the singleton of crypto currency, merely the first implementation to gain a significant following. This is very different to nation-based currencies and even for them, a significant portion of their value rests on the backing provided to them by their respective nation's prosperity and stability. Accordingly, expect unbacked crypto currency to be extremely unstable, over the long term.

hendzen 9y ago

How exactly are cryptocurrency markets less "corrupt" than our current capital markets?

gaetanrickter 9y ago
To start, ever heard of Quantitative Easing or bailing out banks with billions over consumers?
- tuxxy 9y ago
  To add, I love Bitcoin, but this is why Proof of Stake/Ethereum is also not that great in my opinion. The DAO hardfork was nothing but a bailout.
  - deleted 9y ago
    [deleted]
  - oh_sigh 9y ago
    That's a somewhat scary problem for cryptocurrencies. Basically if 51% of the network decides that they don't like you then they can essentially take all of your currency(or, rather, make it worthless)
    - gruez 9y ago
      That's false. The most that can happen in a 50% attack is that transactions are rolled backs.
      - oh_sigh 9y ago
        Look at what happened in the etherium hard fork because of the dao shenanigans. That's why there are two etheriums now...etherium and etherium classic
        polotics 9y ago
        What happened was something else entirely, with a success in decentralised governance to punish the bad actor. What do you want us to look at exactly?
        oh_sigh 9y ago
        Isn't that exactly what I said in my original post? A majority of people in the network wanted to (effectively) take the bad actors coins, so they did.
      - magnetic 9y ago
        If I "control 50%+" of the hash power of the network can't I write my own transaction history from a given point for the world to gobble? If that is so, can't I simply transfer all the coins to my account, and go to some exchange and get $$ for my $COINs? You can roll back the history if you want, but as long as I controlled the network long enough to get $$ out of my ill gotten $COINs, it seems like I've been able to rob the network of it's market cap. And if you roll back history, isn't the exchange (that gave me $$ for my $COINs) going to be extremely upset to have neither the coins nor the $$?
        gruez 9y ago
        any point, yes but you'll have to play catch-up with the main chain. suppose you want to take over all the chain starting from 2 weeks ago. even if you have 51% of the network, you're at a disadvantage already because your chain is 2 weeks behind, and the main chain is constantly advancing. you only have a 1% speed advantage over the main chain, so it will take ages for you to catch up (almost 4 years to be exact, assuming the hashrate stays constant). keep in mind that getting 51% is hard as it is because it requires you to either double the current hash rate (ie. you add hashing power equal to the network's current hash rate) which is incredibly expensive, or hack 51% the pools which is easier, but also likely to be noticed. in either case, once the fork occurs, alarm bells will go off everywhere and every competent exchange/payment processor is going to shut down all withdraws/deposits until the situation is investigated. once it's discovered that a malicious actor successfully attempted a 51% attack, the price of the coin will drop to 0 and your efforts would be wasted. if all you want to do is crash bitcoin then you'd have achieved your goal (albeit at a huge expense), but it's certainly not a good way of making money.
  - ojr 9y ago
    a pull request being approved by core developers in an open source project is different than a bank being bailed out by the government, different scales as well
- tedsanders 9y ago
  Quantitative easing was an act of monetary policy. Monetary policy helps stabilize the value of a currency and the output of a country. Bitcoin has no mechanisms to stabilize aggregate supply & demand, and therefore is inherently subject to higher volatility. I think that if there was any mistake of QE, the mistake was that it didn't go far enough. Looking back, the recession ended up being deeper and longer than initially expected, and worries over inflation ended up not proving true. With the benefit of this hindsight, it seems clear to me that more QE would have helped the country.
  - polotics 9y ago
    Wow you really drank the kool-aid did you? QE has meant huge asset inflation and huge profits for asset holders. At the expense mainly of future generations and current retirees. You know where the US-Fed balance sheet stands right now?
- hendzen 9y ago
  Why is QE corrupt? And bank bailouts, while politically unpopular turned out to be profitable for the government. In contrast, bitcoin exchanges have a high rate of getting hacked and losing all customers money. There is no protections against insider trading... and mining is controlled by a couple guys in China, not a body that we have democratic control over. How is that better than the current system?

the_gastropod 9y ago

Let's use this as a test for your future predicting abilities. What do you think is going to happen in a year, exactly? Any concrete predictions?

gaetanrickter 9y ago
My personal prediction based on the fact that there are now exchanges and hedge funds involved, is based on what happened in the 2008 financial crisis. Bitcoin rose as people viewed this new medium as safer and with tax benefits. Smart money/investors are position now, diversifying across cryptocurrencies before the next Black Swan event. I predict that on every spike down in cryptocurrencies, smart money will come in and the crypto's will make higher highs from here forward and more importantly, during a flight to quality during the next downturn.

FooHentai 9y ago

>this is exactly why you're going to miss the boat here on new forms of innovative currency that represents a flight to quality from more corrupt financial markets. Perhaps. Equally possible is that we're somewhere on the peak portion of the usual technology hype cycle (https://en.wikipedia.org/wiki/Hype_cycle https://en.wikipedia.org/wiki/Hype_cycle). The part dominated by rife speculation of potential applications of the technology and overly optimistic estimations of it's benefits. That does sound a lot like the current crypto currency hubbub. Especially since as mentioned in the OP article, actual killer applications of crypto currency have yet to appear. So when speculation and the confidence game surround it subsides, we'll enter the trough of disillusion, where if anything the technology will be undervalued for a time. Finally if practical uses emerge, the curve ticks up and levels off as a true reflection of the reality of the situation. We are certainly not there yet. "Miss the boat" is a dead giveaway that we're in the hype phase. It's a simple appeal to the Fear of Missing Out (FOMO) which often drives investors into a bubble at it's peak. The trope of 'this time it's different' may prove right once in a blue moon, but the burden of proof definitely sits with the party making the claim. Specific to crypto currency as a technology, there are some very real reasons to be cautious at this time. All value right now is based on the sole foundation of perceived future value. This mirrors housing market bubbles etc. Without significant real-world utility emerging, the value of bitcoins will disappear once everyone figures out that selling them to each other is not actually increasing their value. Bitcoin is not the singleton of crypto currency, merely the first implementation to gain a significant following. This is very different to nation-based currencies and even for them, a significant portion of their value rests on the backing provided to them by their respective nation's prosperity and stability. Accordingly, expect unbacked crypto currency to be extremely unstable, over the long term.