7 ms·

Tangential to the tokens/securities issue: I’m surprised that any US exchange is allowed to list coins like Bitcoin Cash where their creators are clearly attemp

by erentz 8y ago

Tangential to the tokens/securities issue: I’m surprised that any US exchange is allowed to list coins like Bitcoin Cash where their creators are clearly attempting to defraud people. It seems there should be some protection against that to be legally compliant. Second tangent. I’m surprised they’re allowed to list coins which are insecure and vulnerable to attacks which could leave the exchange short. E.g. As recently discussed when https://www.crypto51.app https://www.crypto51.app was posted coins like Ethereum Classic and Bitcoin Cash etc. could all be very easily attacked. And it seems there is little an exchange could do to prevent themselves from losing a lot of money from such an attack if used against the exchange. This could make them unable to pay their customers what they’re owed. What protections do they have against this?

cryptobeanbaby 8y ago
>I’m surprised that any US exchange is allowed to list coins like Bitcoin Cash It's ironic you would single out Bitcoin Cash as an attempt by the software devs to defraud people. Take a look at how Ethereum, Bitcoin Core, or any of the top 10, 50, or really any cryptocoin, DAG, or blockchain inspired project works in regards to defrauding new users by extracting their wealth to enrich the early adopters. The very nature of Satoshi's Proof-of-Work protocol is to establish a new oligarchy which exploits anyone without access to surplus capital that can be wasted on expensive random number generators for the mining protocol. One important point: if we actually include all 7 billion people on the earth, most of whom have zero BTC or Ethereum, the Gini coefficient is essentially 0.99+. And if we just include all balances, we include many dust balances which would again put the Gini coefficient at 0.99+. Thus, we need some kind of threshold here. The imperfect threshold we picked was the Gini coefficient among accounts with ≥185 BTC per address, and ≥2477 ETH per address. So this is the distribution of ownership among the Bitcoin and Ethereum rich with $500k as of July 2017. In what kind of situation would a thresholded metric like this be interesting? Perhaps in a scenario similar to the ongoing IRS Coinbase issue, where the IRS is seeking information on all holders with balances >$20,000. Conceptualized in terms of an attack, a high Gini coefficient would mean that a government would only need to round up a few large holders in order to acquire a large percentage of outstanding cryptocurrency — and with it the ability to tank the price. With that said, two points. First, while one would not want a Gini coefficient of exactly 1.0 for BTC or ETH (as then only one person would have all of the digital currency, and no one would have an incentive to help boost the network), in practice it appears that a very high level of wealth centralization is still compatible with the operation of a decentralized protocol. Second, as we show below, we think the Nakamoto coefficient is a better metric than the Gini coefficient for measuring holder concentration in particular as it obviates the issue of arbitrarily choosing a threshold. ...However, the maximum Gini coefficient has one obvious issue: while a high value tracks with our intuitive notion of a “more centralized” system, the fact that each Gini coefficient is restricted to a 0–1 scale means that it does not directly measure the number of individuals or entities required to compromise a system. Specifically, for a given blockchain suppose you have a subsystem of exchanges with 1000 actors with a Gini coefficient of 0.8, and another subsystem of 10 miners with a Gini coefficient of 0.7. It may turn out that compromising only 3 miners rather than 57 exchanges may be sufficient to compromise this system, which would mean the maximum Gini coefficient would have pointed to exchanges rather than miners as the decentralization bottleneck. Conversely, if one considers “number of distinct countries with substantial mining capacity” an essential subsystem, then the minimum Nakamoto coefficient for Bitcoin would again be 1, as the compromise of China (in the sense of a Chinese government crackdown on mining) would result in >51% of mining being compromised. also who would want to use Ethereum when 2/3's of the entire supply is owned by a few dozen anonymous oligarchs? Presale ICO / Premine ( max cost $0.50 USD per ETH ) = 72,009,990 ETH Total Supply today (Feb 23rd 2018) = 97,800,000 ETH Source: https://etherscan.io/stat/supply
- craigc 8y ago
  Username checks out
- latchkey 8y ago
  Not all the oligarchs are anonymous. Joe Lubin [1] made billions off of co-founding Ethereum and is now personally funding a group of companies (ConsenSys umbrella) with ~1000 employees and growing. All in an effort to do massive amounts of R&D in this space. Personally, I think that is pretty cool. [1] https://en.wikipedia.org/wiki/Joseph_Lubin_(entrepreneur) https://en.wikipedia.org/wiki/Joseph_Lubin_(entrepreneur)
- spiritcat 8y ago
  Wow, didn't realize it was _that_ skewed to initial supply.
tCfD 8y ago
If these coins are so straightforward to attack, then what's stopping people? What's defending rational actors from doing the rational thing and squeezing their networks for all the guaranteed real returns of real money they supposedly protect with such brittle defenses? Either the operative definition of attack is too rather shallow to explain this inexplicable lack of attacking (i.e. something other than hashrate/stake is a major factor in the defense of these coins), or the expectation of return from said attack is rather too high.
- jmcqk6 8y ago
  >What's defending rational actors from doing the rational thing and squeezing their networks for all the guaranteed real returns of real money they supposedly protect with such brittle defenses? I guess by "Rational Actors" you mean sociopaths? I'm not commenting on the underlying point. I don't know if these coins are vulnerable or not. But there seemed to be something very depraved about this sentiment in the quote above, and I couldn't leave it alone. I understand that some people only care about gathering as much money as possible. But that is not to be called "rational." Rational people understand that going around and screwing people over for your own benefit has consequences for yourself and others that are not positive.
mihaifm 8y ago
The discussion about Bitcoin Cash is slightly out of place here, but I think there are dozens of coins worse than it. I don't necessarily like Bitcoin Cash and their marketing shenanigans, but I think they represent a different take on Bitcoin scalability and definitely have a place in the crypto world.
cocktailpeanuts 8y ago
You're a victim of social media propaganda. It's not your fault though. Most people have busy life and they don't have time to stay on top of all the drama so they only hear from "mainstream sources". The thing is, the original Bitcoin community leaders have control over the largest websites for Bitcoin related content (bitcointalk and /r/bitcoin subreddit and so on) and they control their message through their channels and censor anything about Bitcoin cash. So everything you hear about Bitcoin and Bitcoin cash is pretty much a result of censorship and propaganda, which is why you only hear about Bitcoin cash being a scam. But this is far from truth. If you don't believe me, find the smartest people you know who are professional crypto investors, they will say they secretly hold bitcoin cash but never speak out because they will immediately be labeled as "scam investor", and nowadays character assassination is really scary on Twitter so most people who actually know stuff stay quiet. The whole Bitcoin thing is meant to be forked, and that's the whole point--that's why Bitcoin as a whole is anti-fragile. If something doesn't work out with one approach, there will be another fork of Bitcoin that may succeed with a different approach, but the original Bitcoin holders--unless they're stupid enough to sell everything just because they want "the real bitcoin"--will keep holding the same amount of fork coins, so everybody wins. As for the details on Bitcoin vs Bitcoin Cash, they just have different philosophies. Bitcoin wants to focus on stability whereas Bitcoin cash wants to focus on usability. None of them are "scams" and there's nothing wrong with each party. Some people have strong opinions towards either of the forks, but most old Bitcoin investors stay quiet and are just waiting out to see how it all ends, because they have nothing to lose. If Bitcoin wins, then good. If Bitcoin cash wins, that's also good because they have the same amount of coins. Think about this for a moment. What would happen if Bitcoin Cash dies because "it's a scam", and the original Bitcoin is the only option left? And what if that approach doesn't work out? Then we are left with nothing. I think it's great that these two forks co-exist for now and have chance to prove themselves.
- lawlessone 8y ago
  >If you don't believe me, find the smartest people you know who are professional crypto investors, they will say they secretly hold bitcoin cash you genuinely believe yourself?
simias 8y ago
Out of all the scamcoins out there I wasn't aware that Bitcoin Cash had such a reputation, if anything it's one of the rare forks that actually seem to have a real technical reason behind it (the whole segwit vs. large block debate). Furthermore since it's a fork of the original Bitcoin chain the creators couldn't use the usual tricks to "pump and dump" where they pre-mine a ton of coins to prepare for the dump. I mean I'm a cryptocurrency "hater" myself so as far as I'm concerned it's scams, greed, poor understanding of economics and technology all the way down but I'm surprised to see Bitcoin Cash singled out that way, it always seemed relatively reasonable to me (as far as cryptocurrencies can be at least). If anything the segwit/lightning network proponents did seem a bit disingenuous back then (pre-fork), presenting their technology as the panacea to Bitcoin's scaling problems while conveniently ignoring or hand waving practical issues with their proposed system (possible centralization, whether the system could genuinely remain usable at scale etc...). They also generally demonstrated the usefulness of the lightning network by always taking scenarios best suited to the system (recurrent coffee buys at starbucks for instance) instead of "worst case" situations where lightning made a whole lot less sense and had a ton more overhead. That's a common issue all over the cryptocurrency space however...
- shakestheclown 8y ago
  I don't believe the issue with BCH is the technology, although it's seen as more of a band-aid solution by detractors. I think the main issues are with the centralization aspect of Alibaba miners controlling 49% of nodes, Roger Ver not having a great reputation, and the "hostile takeover" attempts of the split.
  - cocktailpeanuts 8y ago
    SegWit created an entirely new class of Bitcoin address and also an entirely new type of transactions to "solve transaction malleability", which could have been solved in many different other ways. Now we have Bitcoin with two different address types. Imagine having a two different type of email addresses (for example you abc@example.com vs. example.com@abc), any competent engineer would recognize this is the beginning of a huge technical debt, even if we don't go as far to talk about the economic implication. Compare that to Bitcoin cash where all it did was increase the block size limit and changed nothing when it comes to the way Bitcoin worked. I'm not making some ridiculous statement such as "Bitcoin cash is the real bitcoin and Bitcoin core is scam", I'm just saying if we're talking about "band aid" technology, what Bitcoin core developers did to Bitcoin is an order of magnitude more of a "bandaid" than what Bitcoin cash did. I stay on top of both BTC and BCH because I care about both chains, and I can tell you for sure while Roger Ver is indeed an famous figure in BCH, he really has no influence over the direction of BCH. All he has is his website bitcoin.com and related businesses and the subreddit in which he's a mod, but other than that, none of his businesses have anything to do with dealing directly with the protocol. He's just simply a passionate libertarian guy who wants to use Bitcoin as a transaction method while BTC developers are now starting to spin the narrative that Bitcoin is not meant to be used for transaction but supposed to be hoarded like gold. I understand where both sides are coming from, but neither of the philosophies are absolutely correct or incorrect, we will have to see how it plays out.

by erentz 8y ago

cryptobeanbaby 8y ago

>I’m surprised that any US exchange is allowed to list coins like Bitcoin Cash It's ironic you would single out Bitcoin Cash as an attempt by the software devs to defraud people. Take a look at how Ethereum, Bitcoin Core, or any of the top 10, 50, or really any cryptocoin, DAG, or blockchain inspired project works in regards to defrauding new users by extracting their wealth to enrich the early adopters. The very nature of Satoshi's Proof-of-Work protocol is to establish a new oligarchy which exploits anyone without access to surplus capital that can be wasted on expensive random number generators for the mining protocol. One important point: if we actually include all 7 billion people on the earth, most of whom have zero BTC or Ethereum, the Gini coefficient is essentially 0.99+. And if we just include all balances, we include many dust balances which would again put the Gini coefficient at 0.99+. Thus, we need some kind of threshold here. The imperfect threshold we picked was the Gini coefficient among accounts with ≥185 BTC per address, and ≥2477 ETH per address. So this is the distribution of ownership among the Bitcoin and Ethereum rich with $500k as of July 2017. In what kind of situation would a thresholded metric like this be interesting? Perhaps in a scenario similar to the ongoing IRS Coinbase issue, where the IRS is seeking information on all holders with balances >$20,000. Conceptualized in terms of an attack, a high Gini coefficient would mean that a government would only need to round up a few large holders in order to acquire a large percentage of outstanding cryptocurrency — and with it the ability to tank the price. With that said, two points. First, while one would not want a Gini coefficient of exactly 1.0 for BTC or ETH (as then only one person would have all of the digital currency, and no one would have an incentive to help boost the network), in practice it appears that a very high level of wealth centralization is still compatible with the operation of a decentralized protocol. Second, as we show below, we think the Nakamoto coefficient is a better metric than the Gini coefficient for measuring holder concentration in particular as it obviates the issue of arbitrarily choosing a threshold. ...However, the maximum Gini coefficient has one obvious issue: while a high value tracks with our intuitive notion of a “more centralized” system, the fact that each Gini coefficient is restricted to a 0–1 scale means that it does not directly measure the number of individuals or entities required to compromise a system. Specifically, for a given blockchain suppose you have a subsystem of exchanges with 1000 actors with a Gini coefficient of 0.8, and another subsystem of 10 miners with a Gini coefficient of 0.7. It may turn out that compromising only 3 miners rather than 57 exchanges may be sufficient to compromise this system, which would mean the maximum Gini coefficient would have pointed to exchanges rather than miners as the decentralization bottleneck. Conversely, if one considers “number of distinct countries with substantial mining capacity” an essential subsystem, then the minimum Nakamoto coefficient for Bitcoin would again be 1, as the compromise of China (in the sense of a Chinese government crackdown on mining) would result in >51% of mining being compromised. also who would want to use Ethereum when 2/3's of the entire supply is owned by a few dozen anonymous oligarchs? Presale ICO / Premine ( max cost $0.50 USD per ETH ) = 72,009,990 ETH Total Supply today (Feb 23rd 2018) = 97,800,000 ETH Source: https://etherscan.io/stat/supply

craigc 8y ago
Username checks out
latchkey 8y ago
Not all the oligarchs are anonymous. Joe Lubin [1] made billions off of co-founding Ethereum and is now personally funding a group of companies (ConsenSys umbrella) with ~1000 employees and growing. All in an effort to do massive amounts of R&D in this space. Personally, I think that is pretty cool. [1] https://en.wikipedia.org/wiki/Joseph_Lubin_(entrepreneur) https://en.wikipedia.org/wiki/Joseph_Lubin_(entrepreneur)
spiritcat 8y ago
Wow, didn't realize it was _that_ skewed to initial supply.

tCfD 8y ago

If these coins are so straightforward to attack, then what's stopping people? What's defending rational actors from doing the rational thing and squeezing their networks for all the guaranteed real returns of real money they supposedly protect with such brittle defenses? Either the operative definition of attack is too rather shallow to explain this inexplicable lack of attacking (i.e. something other than hashrate/stake is a major factor in the defense of these coins), or the expectation of return from said attack is rather too high.

jmcqk6 8y ago
>What's defending rational actors from doing the rational thing and squeezing their networks for all the guaranteed real returns of real money they supposedly protect with such brittle defenses? I guess by "Rational Actors" you mean sociopaths? I'm not commenting on the underlying point. I don't know if these coins are vulnerable or not. But there seemed to be something very depraved about this sentiment in the quote above, and I couldn't leave it alone. I understand that some people only care about gathering as much money as possible. But that is not to be called "rational." Rational people understand that going around and screwing people over for your own benefit has consequences for yourself and others that are not positive.

mihaifm 8y ago

The discussion about Bitcoin Cash is slightly out of place here, but I think there are dozens of coins worse than it. I don't necessarily like Bitcoin Cash and their marketing shenanigans, but I think they represent a different take on Bitcoin scalability and definitely have a place in the crypto world.

cocktailpeanuts 8y ago

You're a victim of social media propaganda. It's not your fault though. Most people have busy life and they don't have time to stay on top of all the drama so they only hear from "mainstream sources". The thing is, the original Bitcoin community leaders have control over the largest websites for Bitcoin related content (bitcointalk and /r/bitcoin subreddit and so on) and they control their message through their channels and censor anything about Bitcoin cash. So everything you hear about Bitcoin and Bitcoin cash is pretty much a result of censorship and propaganda, which is why you only hear about Bitcoin cash being a scam. But this is far from truth. If you don't believe me, find the smartest people you know who are professional crypto investors, they will say they secretly hold bitcoin cash but never speak out because they will immediately be labeled as "scam investor", and nowadays character assassination is really scary on Twitter so most people who actually know stuff stay quiet. The whole Bitcoin thing is meant to be forked, and that's the whole point--that's why Bitcoin as a whole is anti-fragile. If something doesn't work out with one approach, there will be another fork of Bitcoin that may succeed with a different approach, but the original Bitcoin holders--unless they're stupid enough to sell everything just because they want "the real bitcoin"--will keep holding the same amount of fork coins, so everybody wins. As for the details on Bitcoin vs Bitcoin Cash, they just have different philosophies. Bitcoin wants to focus on stability whereas Bitcoin cash wants to focus on usability. None of them are "scams" and there's nothing wrong with each party. Some people have strong opinions towards either of the forks, but most old Bitcoin investors stay quiet and are just waiting out to see how it all ends, because they have nothing to lose. If Bitcoin wins, then good. If Bitcoin cash wins, that's also good because they have the same amount of coins. Think about this for a moment. What would happen if Bitcoin Cash dies because "it's a scam", and the original Bitcoin is the only option left? And what if that approach doesn't work out? Then we are left with nothing. I think it's great that these two forks co-exist for now and have chance to prove themselves.

lawlessone 8y ago
>If you don't believe me, find the smartest people you know who are professional crypto investors, they will say they secretly hold bitcoin cash you genuinely believe yourself?

simias 8y ago

Out of all the scamcoins out there I wasn't aware that Bitcoin Cash had such a reputation, if anything it's one of the rare forks that actually seem to have a real technical reason behind it (the whole segwit vs. large block debate). Furthermore since it's a fork of the original Bitcoin chain the creators couldn't use the usual tricks to "pump and dump" where they pre-mine a ton of coins to prepare for the dump. I mean I'm a cryptocurrency "hater" myself so as far as I'm concerned it's scams, greed, poor understanding of economics and technology all the way down but I'm surprised to see Bitcoin Cash singled out that way, it always seemed relatively reasonable to me (as far as cryptocurrencies can be at least). If anything the segwit/lightning network proponents did seem a bit disingenuous back then (pre-fork), presenting their technology as the panacea to Bitcoin's scaling problems while conveniently ignoring or hand waving practical issues with their proposed system (possible centralization, whether the system could genuinely remain usable at scale etc...). They also generally demonstrated the usefulness of the lightning network by always taking scenarios best suited to the system (recurrent coffee buys at starbucks for instance) instead of "worst case" situations where lightning made a whole lot less sense and had a ton more overhead. That's a common issue all over the cryptocurrency space however...

shakestheclown 8y ago
I don't believe the issue with BCH is the technology, although it's seen as more of a band-aid solution by detractors. I think the main issues are with the centralization aspect of Alibaba miners controlling 49% of nodes, Roger Ver not having a great reputation, and the "hostile takeover" attempts of the split.
- cocktailpeanuts 8y ago
  SegWit created an entirely new class of Bitcoin address and also an entirely new type of transactions to "solve transaction malleability", which could have been solved in many different other ways. Now we have Bitcoin with two different address types. Imagine having a two different type of email addresses (for example you abc@example.com vs. example.com@abc), any competent engineer would recognize this is the beginning of a huge technical debt, even if we don't go as far to talk about the economic implication. Compare that to Bitcoin cash where all it did was increase the block size limit and changed nothing when it comes to the way Bitcoin worked. I'm not making some ridiculous statement such as "Bitcoin cash is the real bitcoin and Bitcoin core is scam", I'm just saying if we're talking about "band aid" technology, what Bitcoin core developers did to Bitcoin is an order of magnitude more of a "bandaid" than what Bitcoin cash did. I stay on top of both BTC and BCH because I care about both chains, and I can tell you for sure while Roger Ver is indeed an famous figure in BCH, he really has no influence over the direction of BCH. All he has is his website bitcoin.com and related businesses and the subreddit in which he's a mod, but other than that, none of his businesses have anything to do with dealing directly with the protocol. He's just simply a passionate libertarian guy who wants to use Bitcoin as a transaction method while BTC developers are now starting to spin the narrative that Bitcoin is not meant to be used for transaction but supposed to be hoarded like gold. I understand where both sides are coming from, but neither of the philosophies are absolutely correct or incorrect, we will have to see how it plays out.