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Volitilty will be inherent with bitcoin, and any blockchain database where the supply has been distributed for low computational/energy/capital input to the sm

Volitilty will be inherent with bitcoin, and any blockchain database where the supply has been distributed for low computational/energy/capital input to the small pool of users who aquire majority stake in the total supply, thus devaluing any long term inherent store of value. additionally, bitcoin and the exchanges can rapidly plummit to zero if and when there's a run to get out as the value requires demand from another just buyer. no buyers, and the price freefalls.

zeroxfe 9y ago
> Volatilty will be inherent with bitcoin... majority stake... You're making a strong claim here -- and I think this applies to any scarce resource. Why is bitcoin different from, say, gold? > additionally, bitcoin and the exchanges can rapidly plummit to zero if and when Here too -- how is that different from any other traded instrument?
- cryptodogemoon 9y ago
  The production curve Satoshi designed was to produce the largest supply of Bitcoins for the least amount of effort/resource input to the smallest group of users running the software. Half of the supply was produced this way in the first few months. Blockchain and Bitcoin is different than physical resources because it's so easily produced. Crypto tokens are different from other traded instruments because of the exchanges they're traded on are unregulated exchanges which can easily manipulate prices, fake orders, front run, or entirely falsify their deposits until there's run on the withdraws.
  - tromp 9y ago
    > designed was to produce the largest supply of Bitcoins No; he simply designed for a fixed total amount of bitcoins, namely 21 million. > Half of the supply was produced this way in the first few months. No; half the supply is produced in 4 years. Then the next 4 years halves that again. And so on every 4 years.
    - cryptodogemoon 9y ago
      "Satoshi" choose to produce the largest percentage of the total Bitcoin supply to the smallest group of users for the lowest computational effort/value input. Rather than designing the supply distribution to coincide with increasing computational and energy value input, the production curve was crafted to gain control of as many coins as possible before anyone else joined the network. This is a catastrophic design flaw as it means the majority of BTC in circulation was created with very low value input. i.e. 10,000 bitcoins shouldn't surpass the value of two pizzas. The current value is a mix of passing on the "coins" to greater fools who only think someone else will buy their coin at a higher price. Combined with exchanges which arnt required to publish their reserves, or prevent insider trading or falsifying bids. More stability will come if verifiable liquidity is offered at any of the exchanges. As we've seen many times, panic sells over trivial news and rumors create freefalls in price from the absence of buyers willing to hold the bag.
  - zeroxfe 9y ago
    > The production curve Satoshi designed was to produce the largest supply of Bitcoins for the least amount of effort/resource input to the smallest group of users running the software. The total supply was fixed from the start and the supply curve was designed to incentivize mining. When it was initially deployed, there was no reason to believe that Bitcoin would become as huge as it is now, and lots of coins were simply lost in frivolous transactions, faucets, and destroyed data. > Half of the supply was produced this way in the first few months. This is not true. > Blockchain and Bitcoin is different than physical resources because it's so easily produced. The whole point of PoW is that it is not easy to produce Bitcoin -- physical goods have scarcity enforced by nature; Bitcoin has scarcity enforced by mathematics.
    - cryptodogemoon 9y ago
      > Blockchain and Bitcoin is different than physical resources because it's so easily produced. The whole point of PoW is that it is not easy to produce Bitcoin -- physical goods have scarcity enforced by nature; Bitcoin has scarcity enforced by mathematics. This is not true. The math in Satoshi's mining algorithm produced most of the coins for extremely low value input. Most people are simply unaware how the supply was gathered very early on, effectively in the style of a pump and dump scheme. To be more specific, half the supply was minted at low computational effort from 2009-2013. Mining was made easy so Satoshi could maximize ownership of the supply, hoping speculators would purchase the units for a sum surpassing the value it took to produce the coins. Bitcoin advocates try to dismiss how easy it is to produce blockchain tokens. Satoshi could just as easily have made the algorithm produce bitcoins in limited quantities early on especially with each coin being divisible to 100000000 units each. Instead Satoshi choose a very easy way to generate the coins before other users took notice of his network. Along with how easy it is to manipulate prices on exchanges. Exchanges will make huge profits during freefalls because they have no oversight on their order books. There's a reason the exchanges often set up shell companies and use off shore banks in jurisdictions often associated with gambling and credit card fraud. The market is hardly user driven, it's now at the whim of which exchange can fake their order books while surviving public relations to avoid their solvency getting called out for. Take note how often exchanges have delays with customer withdraws.

zeroxfe 9y ago

> Volatilty will be inherent with bitcoin... majority stake... You're making a strong claim here -- and I think this applies to any scarce resource. Why is bitcoin different from, say, gold? > additionally, bitcoin and the exchanges can rapidly plummit to zero if and when Here too -- how is that different from any other traded instrument?

cryptodogemoon 9y ago
The production curve Satoshi designed was to produce the largest supply of Bitcoins for the least amount of effort/resource input to the smallest group of users running the software. Half of the supply was produced this way in the first few months. Blockchain and Bitcoin is different than physical resources because it's so easily produced. Crypto tokens are different from other traded instruments because of the exchanges they're traded on are unregulated exchanges which can easily manipulate prices, fake orders, front run, or entirely falsify their deposits until there's run on the withdraws.
- tromp 9y ago
  > designed was to produce the largest supply of Bitcoins No; he simply designed for a fixed total amount of bitcoins, namely 21 million. > Half of the supply was produced this way in the first few months. No; half the supply is produced in 4 years. Then the next 4 years halves that again. And so on every 4 years.
  - cryptodogemoon 9y ago
    "Satoshi" choose to produce the largest percentage of the total Bitcoin supply to the smallest group of users for the lowest computational effort/value input. Rather than designing the supply distribution to coincide with increasing computational and energy value input, the production curve was crafted to gain control of as many coins as possible before anyone else joined the network. This is a catastrophic design flaw as it means the majority of BTC in circulation was created with very low value input. i.e. 10,000 bitcoins shouldn't surpass the value of two pizzas. The current value is a mix of passing on the "coins" to greater fools who only think someone else will buy their coin at a higher price. Combined with exchanges which arnt required to publish their reserves, or prevent insider trading or falsifying bids. More stability will come if verifiable liquidity is offered at any of the exchanges. As we've seen many times, panic sells over trivial news and rumors create freefalls in price from the absence of buyers willing to hold the bag.
- zeroxfe 9y ago
  > The production curve Satoshi designed was to produce the largest supply of Bitcoins for the least amount of effort/resource input to the smallest group of users running the software. The total supply was fixed from the start and the supply curve was designed to incentivize mining. When it was initially deployed, there was no reason to believe that Bitcoin would become as huge as it is now, and lots of coins were simply lost in frivolous transactions, faucets, and destroyed data. > Half of the supply was produced this way in the first few months. This is not true. > Blockchain and Bitcoin is different than physical resources because it's so easily produced. The whole point of PoW is that it is not easy to produce Bitcoin -- physical goods have scarcity enforced by nature; Bitcoin has scarcity enforced by mathematics.
  - cryptodogemoon 9y ago
    > Blockchain and Bitcoin is different than physical resources because it's so easily produced. The whole point of PoW is that it is not easy to produce Bitcoin -- physical goods have scarcity enforced by nature; Bitcoin has scarcity enforced by mathematics. This is not true. The math in Satoshi's mining algorithm produced most of the coins for extremely low value input. Most people are simply unaware how the supply was gathered very early on, effectively in the style of a pump and dump scheme. To be more specific, half the supply was minted at low computational effort from 2009-2013. Mining was made easy so Satoshi could maximize ownership of the supply, hoping speculators would purchase the units for a sum surpassing the value it took to produce the coins. Bitcoin advocates try to dismiss how easy it is to produce blockchain tokens. Satoshi could just as easily have made the algorithm produce bitcoins in limited quantities early on especially with each coin being divisible to 100000000 units each. Instead Satoshi choose a very easy way to generate the coins before other users took notice of his network. Along with how easy it is to manipulate prices on exchanges. Exchanges will make huge profits during freefalls because they have no oversight on their order books. There's a reason the exchanges often set up shell companies and use off shore banks in jurisdictions often associated with gambling and credit card fraud. The market is hardly user driven, it's now at the whim of which exchange can fake their order books while surviving public relations to avoid their solvency getting called out for. Take note how often exchanges have delays with customer withdraws.