Buying bitcoins

PrzemoF

It could be the EU ruling on VAT for bitcoins...

scamalert

if bitcoin value was to drop below 200$ ,it wouldn't last a month.That said chart looks interesting is there a way to see total volume of trades on given days.

Since with limits being close,difficult level increasing rapidly main miners are chinesse who can afford to run so much power and gear,thus while being free currency-its rather split into few large pools that can afford to mine it and have monopoly over it.As for buying them as investment-its a lot of gamble since btc dont create value as real currencies does,then add complexity to whole process,and massive fluctuations,its not much as trying luck on forex with huge leverage in same sense.

Plus if actually buying them-the whole process of safe keeping and transactions makes little sense,unless your shopping in places like agora.

PrzemoF

scamalert wrote: »

[..]As for buying them as investment-its a lot of gamble since btc dont create value as real currencies does,then add complexity to whole process,and massive fluctuations,its not much as trying luck on forex with huge leverage in same sense.

Plus if actually buying them-the whole process of safe keeping and transactions makes little sense,unless your shopping in places like agora.

Real currencies create value? Hmm.... The process of safe keeping is simple and flexible. You can do it yourself or you can trust others. You cannot have a backup of your 50 euro note, while having a backup (even a paper copy!) of bitcoins is easily possible.

makeorbrake

Bitcoin surges - emerging from lull of interest.

RoRo979

well people what are we speculating? 2 weeks about bought 500 worth of btc at 220 a pop I believe so I've made a handy bit of money on top. Do we think it will hold now or do we feel a drop is coming? I personally dont feel a break above 450 happening so am wondering whether I should buy some physical goods now with it incase it drops or if its ok to hold for a bit and see what happens.

alb

scamalert wrote: »

if bitcoin value was to drop below 200$ ,it wouldn't last a month.That said chart looks interesting is there a way to see total volume of trades on given days.

It already did drop under $200 in January, bitstamp closed at 171 on 14th Jan, and was back over $200 the next day - plenty of people willing to scoop up those cheap coins. You can see charts including volume candles for all the major exchanges at https://cryptowat.ch/ Top left allows you to choose exchange and time frame.

Mullicker wrote: »

Came across this article a couple of months ago, governance and ability to handle large transaction volume have bitcoin a little stumped:

The Looming Problem That Could Kill Bitcoin

A lot of people, even many bitcoiners, have a hard time accepting that no one is in charge of, or in control of bitcoin. The issue of increasing the blocksize is the first important issue where there has been a struggle to gain consensus about what to do. While not ideal, I don't think this is a fatal problem. It's not that the problem has no solution, it's that everyone can't agree on which solution is best, and there's no immediate need to since there have not been many symptoms of the problem yet. I do fear it will not get resolved until it becomes urgent, but I think it will get resolved quickly in that case. If transaction capacity gets exhausted, the blocksize will increase one way or another.

As a bitcoin enthusiast it has been fascinating to watch, for the first time we have two competing implementations of bitcoin. We've seen the actual power, or rather lack thereof, that core developers have over bitcoin, as we saw that 1) it is possible for the core devleopers to disagree, and release non-compatible competing versions of the software and 2) that ultimately the network as a whole and not any set of developers will decide what software actually runs and thus what the definition of bitcoin is.

As for the recent pop to $500, people are looking for the one reason that caused it. Firstly, i was monitoring the exchanges and every string upward move originated in China, and secondly I don't think there is a singular reason. People were saying that bitcoin had been going down since the gox bubble 2 years ago, but it's not true. The bottom was January this year, and it's been sideways since then. Many who sold on the down trend were just waiting for a clear bottom to buy back in, so when you get any kind of significant upward movement it's easy for a positive feedback loop to start and we get the hockey stick we've seen before. It looks like it's cooling off now, but I know better than to definitively try and call a top or bottom though.

Mullicker

Let me clarify that I own some bitcoin, having bought a little to play around with a couple of months ago. I like its decentralization. And I like all the creativity and innovation surrounding bitcoin.

My main issue is bitcoin's lack of anonymity. In looking at some alt-coins I see Dash and Monero offering substantial improvement in this area.

Capt'n Midnight

Just a reminder. Activision spent $5.9bn to get Candy Crush. AFAIK this is still more than the total valuation of Bitcoins.

Bitcoin has to continually guard against a fork. And guard against people thinking there's a cartel. And rely on people processing the chain. Like any currency it's based on trust.


I'm still not convinced that bitcoins have intrinsic value. We are getting rid of 1c and 2c coins because they cost more than they are worth to produce. But this is also true of US 1c coins. But here's the thing, over multiple transactions they generate more wealth than they are worth and physical coins churn over fast. Bitcoins take resources to mine and this will increase over time. I'm not convinced that they will repay the energy investment in them.

pH

I'm still of the belief that a bitcoin will either end up worth a tremendous amount of money or worth nothing - sure there's money to be made in the short term speculating as the price rises and falls, but long term either bitcoin succeeds or fails. If it succeeds then the sky's the limit, I'm still sitting on my €45 coins - it's been a lot slower than I expected, but I still think that crypto currencies have a bright future - whether that's bitcoin or a different scheme is another question however.

alb

Capt'n Midnight wrote: »

Just a reminder. Activision spent $5.9bn to get Candy Crush. AFAIK this is still more than the total valuation of Bitcoins.

There are currently just over 14.8m bitcoins in existence, times current price of $385 gives 5.6 billion total value. We know some of those coins are lost forever, at least 10s of thousands but it could be any amount and we know the price is volailte, but yeah, in the grand scheme of things bitcoin is not worth all that much yet, which is why the price is relatively volatile.

On that note, I've recently seen some comments elsewhere about the price approaching the price of gold. People tend to compare the price of 1 bitcoin to the price of one ounce of gold, because they are both the most commonly used units, but is that a reasonable comparison? why not a gram, why not a kilo?

The BBC in 2013 says there's an estimated 171,300 tons of gold, which I calculate to be 5,481,600,000 ounces, so it's a lot less scarce than the 21m bitcoin limit.

Capt'n Midnight wrote: »

Bitcoin has to continually guard against a fork. And guard against people thinking there's a cartel. And rely on people processing the chain. Like any currency it's based on trust.

I'm not sure that guard is the right word here. Bitcoin forks if the majority decide to fork. Bitcoin is defined by the chain with the most mining work. Cartels only work if there's a monopoly, but bitcoin competes with other crypto-currencies, miners and/or bitcoin companies forming a cartel to attack the users would be a great way to just push users to a competitor, as in that bitcoin is no longer decentralised, no longer a crypto-currency really. There's no lock in with bitcoin, I can have them on an exchange and changed to another crypto within an hour if I choose.

Capt'n Midnight wrote: »

I'm still not convinced that bitcoins have intrinsic value.

The intrinsic value argument usually boils down to semantics. By the typical usage for equities bitcoin has zero intrinsic value, if its monetary value goes to zero it is worthless otherwise. If your 1 ounce gold coin loses its monetary value, you can still make a spoon out of it. I think why people struggle with bitcoin in this regard is that we're not used to digital things being scarce - we can make unlimited websites, emails, tweets, copies of media files etc. Domain names might be the only other good example. What's the intrinsic value of the domain name google.com?

The bottom line is that everything in the world which is scarce and useful has value. Air is essential but not scarce so it is has no price, my childhood paintings are scarce but useless and also have no price. If bitcoin continues to be scarce and useful it will have a value. A common counterpoint to this is that bitcoin units may be scarce but cryptocurrencies are not, because anyone can clone the bitcoin software and release a copy cat, and indeed they have. But they can't easily copy the bitcoin ecosystem, the mining security, the critical mass of users, the services that support it.

Capt'n Midnight wrote: »

We are getting rid of 1c and 2c coins because they cost more than they are worth to produce. But this is also true of US 1c coins. But here's the thing, over multiple transactions they generate more wealth than they are worth and physical coins churn over fast. Bitcoins take resources to mine and this will increase over time. I'm not convinced that they will repay the energy investment in them.

The resources required to mine bitcoins will always follow the value of bitcoin. The difficulty adjusts upwards or downwards as is appropriate. If you were mining bitcoins and it was unprofitable would you continue to mine? would you spend 100 euro in electricity a month to mine 90 euro worth of bitcoin? Of course not, you'd stop mining. Bitcoin doesn't depend on all miners making a profit, only that there are enough miners.

alb

Coming back to the scalability issue mentioned on the last page. This is a pretty good 15 minute overview of payment channels. These allow multiple trust-less irreversible payments to be made from one party to another during a fixed period of time, but resulting in only 2 actual bitcoin transactions added to the blockchain to settle the final balance.

It's a bit technical, you need to understand the concepts of signing and broadcasting transactions and multi-sig addresses.

zulutango

I'm new to Bitcoin but from what I've been reading it seems very revolutionary to me. The notion that you can make a transfer of money without involving a third party such as a bank is kinda astounding.

A query I have is this though. I transferred a tiny amount of Bitcoin from one wallet to another. The fees ended up amounting to about 10% of the amount that I transferred. So, I'm just wondering, who sets these transfer fees and are they proportionately less if you send larger amounts?

alb

zulutango wrote: »

A query I have is this though. I transferred a tiny amount of Bitcoin from one wallet to another. The fees ended up amounting to about 10% of the amount that I transferred. So, I'm just wondering, who sets these transfer fees and are they proportionately less if you send larger amounts?

The amount of the fee is decided by the person making the transactions, in your case your wallet software most likely used a default fee, but there was probably a way you could have set it manually.

Fees are technically optional, but act as an incentive for miners to include your transaction in a block (and therefore in the blockchain). Miners get to keep any fees for any transactions they include in a block that they mine. So to date miners have prioritised transactions with the highest fees and included ones with no fee attached when there is spare space in a block. So during time of high transaction volumes when blocks have been full there can be quite a delay for no-fee transactions. A fee of about 0.00001 BTC is typically sufficient at present.

The fee is independent of the amount of bitcoins being sent. For example here's a transaction that sent almost 200,000 bitcoins and paid no fee

The nature of fees will most likely change in the long run depending on how bitcoin evolves. As the number of new bitcoins awarded to miners decreases gradually, the fees will become the primary reward for miners. The scarcity of, and demand for, space in mined blocks will ultimately determine the fees people are willing to pay to make a transaction. This will depend on how popular bitcoin is, how much larger blocks can be made, and whether future advances in the technology will allow many small micro-transactions each with a small fee to be combined into one bitcoin transaction.

scamalert

zulutango wrote: »

I'm new to Bitcoin but from what I've been reading it seems very revolutionary to me. The notion that you can make a transfer of money without involving a third party such as a bank is kinda astounding.

A query I have is this though. I transferred a tiny amount of Bitcoin from one wallet to another. The fees ended up amounting to about 10% of the amount that I transferred. So, I'm just wondering, who sets these transfer fees and are they proportionately less if you send larger amounts?

unless you mine bicoin yourself which is impossible considering amount you'd make vs energy price wasted,bitcoin pretty much ended like bank>buy btc using your cash>send btc pay fee on top>receive btc use bank to convert it back to real money.
So unless your buying stuff that otherwise wouldnt be possible then theres just investment into nothing hoping price will go up to sell to someone else :pac: since btc dont generate value-as companies or stocks do rather its at a point where few large Chinese factories can manage to mine it and still make profit and keep it alive.

zulutango

I'm living in Limerick and all the atms are really concentrated in the city centre. I bumped into a friend who I owed a few quid to this morning but didn't have the cash on me and the nearest atm was ages away. So, I half-joked to my friend that if he had a bitcoin wallet I could just transfer him the equivalent in bitcoins straight away. Was surprised when he agreed to it (although he didn't actually have a wallet). I'm starting to realise just how neat this technology is.

alb

January 3rd was the 7th birthday of the Bitcoin network. Just before that, on Christmas day, the 100 millionth transaction was mined and the number of mined coins reached 15 million, meaning there are only 6 million remaining to be mined. This summer the block reward will half to 12.5 coins per block. Bitcoin is reaching the end of the 'distribution' phase, as annual monetary inflation will go from over 9% to around 4.5% continuing to reduce each year.

After spending nearly all of 2015 in the $200-$300 range, it broke upwards into the 300s at the end of October and quickly up into the 400s in December, where it has stayed since then. People had been saying Bitcoin had been falling for 2 years after the end of 2013 bubble, but in hindsight it seems it fell for one year bottoming out almost a year ago at $170 on Jan 14th 2014.

If bitcoin is to thrive in the post-distribution phase, the transaction volume and/or the transaction fees must increase. There is still heated debate among developers, exchanges, miners and users about how this should happen, and what direction bitcoin should take in the near future. This has escalated into petty personal arguments and censorship of two of the main bitcoin forums among other things which has led to splits in the community. On the plus side it's also led to new ideas and innovation regarding scaling solutions.

Overall this war doesn't concern me too much. sooner or later due to the open source nature of bitcoin with nobody in charge this was likely to happen. If a widely used cryptocurrency system is useful and desirable, and it's technically possible to create one, then one will exist. i consider 4 ways this can play out:

1) bitcoin core developers implement a sufficient scaling solution which everyone is happy to run
2) bitcoin core developers do not implement a scaling solution, someone else does instead. The blockchain forks, one of the forks wins. This is a messy outcome, but everyone will almost certainly migrate to the winning fork very quickly.
3) bitcoin core developers do not implement a scaling solution. None is needed because additional layers on top of bitcoin (lightning network, sidechains, payment channels etc) provide sufficient scaling in due time.
4) bitcoin core developers do not implement a scaling solution and there is no fork or successful additional layers. Bitcoin fails to scale, another cryptocurrency willing to scale overtakes bitcoin as the leading cryptocurrency. I suspect the threat of this is enough to prevent it from happening.

It would not surprise me if this year provides a perfect storm of events for bitcoin to bubble up again: Global markets struggling, along with Chinese currency devaluation, the reward halving and a resolution to the scaling issues, but it's bitcoin so who knows

scamalert

like your post,and have read months before about division happening-truly not that interested how it works out-but seems like most possible scenario.

Since rewards are being cut down,the increase in price is natural-since not only it takes say as twice much amount or power to mine them,since running costs can barely support the reward,and chain reaching depletion basically someone would need to be willing to buy them at ever increasing prices just to keep Chinese farmers running-but even in that case most likely next bubble when it reached another peak would wipe out the currency when major holders would decide to cash in.

another reason is inflation as price ever increases the coins are split into 000000 values,while it has potential to be split to last 0 and make it enough to go around for everyone,its not close happening,since its just simple principle why we dont use notes such as 1000000 or 10000 its hassle of getting change in nominal value,which btc has ingrained in it started at 1coin now its 0.34454655 or smth like that,thus example of say euro becoming 100cents is ok,but split it into 0.01 and you have nonsense.

Also i wouldn't compare btc to have any effects to do with economy-regular people dont use them daily and its scarce nor they are based on something to be considered as secure alternative.

Last thing as many times said its usage is too complicated-see any video where it takes amount to make transaction for something and youd split your own head while waiting in ques,it started as idea tax free and trail free crypto currency,now you supply almost your full details if buying any,and to check out you still use banks etc,and paying taxes for people that just use energy to make them,and other fees of purchase on top.

zulutango

I gather from a cursory look at the reddit forums that something significant has happened in the last few days in terms of the development of bitcoin. Can anybody explain in layman's terms? Do we now have two kinds of bitcoin?

positron

It caught my attention too (I have no bitcoins, just a curious observer). Mike Hearn, one of the guys who worked with Gavin Anderson and the rest of the 'Bitcoin Core' team left (as in sold whatever coins he had, and said this whole thing is going tits up) and wrong this blog explaining his reasons.

https://www.reddit.com/r/Bitcoin/comments/40zhgi/mike_hearn_the_bitcoin_believer_who_gave_up/

I feel he is right about how it should be - no one should have the power to stop or hold back the block size increment (or whatever else) - I too thought bitcoin is a truely hands off mathematical "truth' based system that just reacts to the amount of processing power that's throw at it (which naturally will go up or down). Doesn't seem to be the case. However I am not sure if that means it's the end. What if they / majority sticks with Bitcoin XT, or some other fork? I am not sure how the Bitcoin Core team can control that? Are they really behind the DDoS attacks?

Perhaps alb can help us understand it better.

KomradeBishop

Yea looks like now, judging by that blog post, the technological issues with Bitcoin aren't actually the main problem - trivial to fix technically - but the nail in the coffin is about to be the top-down control of the infrastructure (which will still be an issue even if Bitcoin is replaced with another cryptocurrency), as well as the means of disseminating updates to the community (since prominent/influential platforms for the community seem to now be 'captured'/censored).

When powerful elements within the community, along with those who control the infrastructure, are openly corrupt and are deliberately trying to slam Bitcoin into a technological roadblock - as the above looks a lot like - then it seems like the endgame for the main Bitcoin cryptocurrency is near, and that people unwise enough to invest in Bitcoin, should start dumping them before it all unfolds.

alb

Oh it appears Bitcoin died, again, for the 89th time.

Seriously though, I read through Mike's post and I think he's overreacting, and is underestimating Bitcoin's antifragility. Mike was the first guy to really make a hard push at raising the blocksize, he fell out with most of the other core developers over this, and eventually released the first competing bitcoin implementation with a higher block size (Bitcoin XT). XT had almost no uptake (due to lack of interest? or the attacks he mentions? probably a bit of both).

Mike effectively left bitcoin already a few months ago when he took a job at R3CEV. He probably still hoped XT would gather some momentum as the block size issue became more critical. What has happened instead is that some other devs, with support of what seems like most of the major mining entities have released another competing bitcoin implementation with bigger blocks - bitcoin classic. I expect that the frustration that classic is making more headway than XT did at least partly fueled his public rage-quit article.

Mike contributed a hell of a lot to bitcoin over the years, and I hope some day he comes back to it, but a tweet I saw put it nicely - "Bitcoin is a consensus system, it has failed only when there is consensus that it has failed." Fred Wilson also wrote a great response. But enough about Mike....

If you read back from the very start of this thread years ago, you'll find questions that bitcoin has had to answer, usually by running into the problems head on. Such as:
- What will happen when the countries regulate bitcoin and make it illegal?
- Mt Gox. has 90% of bitcoin trading, it's a central point of failure, what happens if it fails?
- What happens when the blockchain grows and is too big to fit on a phone or PC, how can you run a wallet?
- What happens when mining can no longer be done by amateurs at home, and is purely the realm of professionals?
- What happens when the hype dies down and the price crashes?

All of the above have been cited as ways bitcoin would fail. Each time bitcoin has overcome one of these it becomes more robust. This is the antifragility in action.

I think of the recent civil war block size debate as at least four more distinct questions that bitcoin is facing rather than one single issue:
1) What happens if people in charge of bitcoin forums and/or core developers attack bitcoin with propaganda, or censorship.
2) What happen if the core developers fail to maintain bitcoin, be it due to bribes, coercion or incompetence?
3) What happens when blocks get full and bitcoin runs out of capacity, can bitcoin scale?
4) What happens if bitcoin splits into two incompatible forks?

The blocksize debate and concerns in Mike's article can mostly be reduced to those 4 questions I think. Here are my thoughts in relation to each one:

1) thermos (aka theymos) has sole control over the bitcoin reddit and bitcointalk.org, which until now have been the leading two US bitcoin forums. He considers any competitor to bitcoin core to be an attack on bitcoin and has actively been censoring mention and discussion of them. Well, he's trying to censor communication in the age of the internet, good luck with that. The solution to this is easy, many users including myself, have left his forums for new uncensored competitors /r/btc and bitco.in.

2) We get competing implementions, there are now Bitcoin XT, bitcoin Classic and Bitcoin unlimited. I think it's clear by now that stakeholders have had a bit of analysis paralysis up until now. Everyone has failed to reach consensus on an increased blocksize so the default action has been to do nothing and stick with bitcoin core. I already detailed the 4 ways this can play out in my earlier post 717

3) This is a more specific case of 2). We'll get the answer to both of these questions together.

4) I expect in this case it resolves very quickly. One fork will gain consensus, and the other will quickly be abandoned. Any of the new implementations such as bitcoin classic typically only trigger a fork when a supermajority (75%) of miners have indicated they are willing to go along with it, there is also typically a grace period then for everyone (merchants, nodes, exchanges) to upgrade and be compatible with the new fork. This will mean that a minority, if anyone at all, are left on the old fork, due to either being stubborn or inactive, and that frankly is their problem. Bitcoin will be what the economic majority want it to be, if you disagree you are no longer part of Bitcoin.

scamalert

I know most posters here are in favor of btc,but what do you gain from it ?

since investment into them is like playing roulette prices move not because of economical factors rather then someone buying bulk or more likely selling bulk amounts.

Its not generating any value-closest example would be some game cards/comics that some people pay insane money because it was original thus small market exists for enthusiasts who see value in it,yet for someone else its just piece of paper-dont mistake that with fiat currency where $ is $ anywhere you go.

then massive fluctuations-due to no regulations,and also unreliable storage and system that is more complex and time consuming then using anything else.

Since i see to fail where people using btc fall into which category.
surely anyone in trading wouldn't invest in it-since there is no economical factor behind it like stocks have based on real life performance of any company due to their results in market,where they generate results based on actual performances in fiscal year on sales,and generating profit or loss due to results.

then diversifying it doesn't make any sense either-if one was to walk into bank and say had 10k to invest and was offered to invest into some fund that would either generate 90% profit or loss in years time,one wouldn't need much brains to figure out risk/vs reward ratio,and imagine being told you are investing into something that is purely based on creating from nothing and has no backup just others who are in same scheme.

and third option is DW where someone selling x stuff wants to remain unknown thus people using it to cover up themselves,and even that if attention is gained could be traced down,as SR example and many following showed.

Its like some claim they want freedom and independence from banks,yet whole thing is manipulated more then any currency and changes that appear can wipe out any value in days time,not to mention how btc was originally manipulated to create its value and it took several attempts before hype was created.

pH

scamalert wrote: »

I know most posters here are in favor of btc,but what do you gain from it ?

since investment into them is like playing roulette prices move not because of economical factors rather then someone buying bulk or more likely selling bulk amounts.

Its not generating any value-closest example would be some game cards/comics that some people pay insane money because it was original thus small market exists for enthusiasts who see value in it,yet for someone else its just piece of paper-dont mistake that with fiat currency where $ is $ anywhere you go.

then massive fluctuations-due to no regulations,and also unreliable storage and system that is more complex and time consuming then using anything else.

Since i see to fail where people using btc fall into which category.
surely anyone in trading wouldn't invest in it-since there is no economical factor behind it like stocks have based on real life performance of any company due to their results in market,where they generate results based on actual performances in fiscal year on sales,and generating profit or loss due to results.

then diversifying it doesn't make any sense either-if one was to walk into bank and say had 10k to invest and was offered to invest into some fund that would either generate 90% profit or loss in years time,one wouldn't need much brains to figure out risk/vs reward ratio,and imagine being told you are investing into something that is purely based on creating from nothing and has no backup just others who are in same scheme.

and third option is DW where someone selling x stuff wants to remain unknown thus people using it to cover up themselves,and even that if attention is gained could be traced down,as SR example and many following showed.

Its like some claim they want freedom and independence from banks,yet whole thing is manipulated more then any currency and changes that appear can wipe out any value in days time,not to mention how btc was originally manipulated to create its value and it took several attempts before hype was created.

If you can't see the value of any two people on this planet being able to electronically transfer money between them in a secure way, for peanuts, with no single bank/company/government telling them they can't then the value of bitcoin certainly will be lost to you. The only way this can happen is if what's being transferred intrinsically has value.

I'm not sure you've ever used SEPA, but the idea that the entire European banking sector came together and this is what a modern electronic payment system looks like is a bad joke - in fact it's such a bad joke, so unfit for purpose that conspiracy theorists should be having a field day.

scamalert

what cave do you live in that any bank doesnt allow you to transfer cash to anyone who owns an account to anyone or anywhere ?

And the same bank that doesnt allow you to transfer cash yet allows you to cash out from your btc.

Thats the part i dont get it,is it an issue paying 1.5-5% on your transfer for 300e using pp,or cc ,or would you feel more secure making transaction one way of few grand without knowing who it goes to,just because you want to skimp on hundred or so to do it ?

I get idea some people want to have some account separate from main bank to do online shopping/gambling thus many services provide it for little to none.
Otherwise no bank gives crap where you spend your cash until you pay taxes as per terms and conditions you sign-thus in return you get some security and safety,that your funds wont vanish into thin air because some server goes down,or sent money and it went missing without a trace.

positron

alb, perhaps another question for you. The 'bankcoin' thing that was mentioned with R3 etc - is that real?

It sounded like banks are looking into create / adopt some sort of blockchain / distributed ledger type setup to handle perhaps as a intra-bank, as well as consumer payment network? If so, that could be great for bitcoin by popularising the technology and acceptance.

alb

From what I understand about r3cev they're trying to work with banks to develop something private using blockchain technology that lets the banks interact more efficiently. From what one of their guys said recently they seem to be still at an early stage. I also heard they have 42 banks participating.

Since bitcoin launched there has always been the question about whether companies, banks or even countries would release 'their own' competitor to bitcoin. People suggested that since such a blockchain would have 'backing' and could be foreced on a user base it would be better and replace bitcoin.

One issue with this is that if a blockchain 'belongs' to someone it is no longer a cryptocurrency. While it still may be useful, it will almost certainly not have many of the features which make bitcoin and crytpocurrency in general appealing - decentralisation, permissionless innovation, permissionless global access, fair distribution.

Systems launched like this have problems bitcoin don't have, if they're not open source, people need to trust the issuer. The issuer can have all sorts of legal risks and costs if they are liable for KYC/AML diligence etc.

There have already been a couple of projects like ripple and stellar which don't seem to have had much impact on bitcoin.

My general thought on this is that if blockchains and cryptocurrency work and are useful, there will be a successful, global, open source public blockchain like bitcoin. As you said, such projects do help to legitimise bitcoin and familiarise people with it, much like people being forced to use private email at work was a precursor to adoption of public email in their personal lives.

Mullicker

alb wrote: »

Oh it appears Bitcoin died, again, for the 89th time.

Seriously though, I read through Mike's post and I think he's overreacting, and is underestimating Bitcoin's antifragility.

I would describe it as more of an attack on bitcoins usability as a consequence of bitcoins governance, not so much a hey bitcoin is fragile.

If you read back from the very start of this thread years ago, you'll find questions that bitcoin has had to answer, usually by running into the problems head on. Such as:
- What will happen when the countries regulate bitcoin and make it illegal?
- Mt Gox. has 90% of bitcoin trading, it's a central point of failure, what happens if it fails?
- What happens when the blockchain grows and is too big to fit on a phone or PC, how can you run a wallet?
- What happens when mining can no longer be done by amateurs at home, and is purely the realm of professionals?
- What happens when the hype dies down and the price crashes?

Regulation is still a scary thing for bitcoin holders. The recent BIS paper listed possible regulations to combat the use of bitcoin, a factor in me selling last week. Besides just because past questions are answered doesn't mean current questions will and the questions raised by Mike were the following:

"would you care about a payments network that:
•Couldn’t move your existing money
•Had wildly unpredictable fees that were high and rising fast
•Allowed buyers to take back payments they’d made after walking out of shops, by simply pressing a button (if you aren’t aware of this “feature” that’s because Bitcoin was only just changed to allow it)
•Is suffering large backlogs and flaky payments
•… which is controlled by China
•… and in which the companies and people building it were in open civil war?"

The idea and what bitcoin stands for will ultimately make it imo, not necessarily bitcoin itself. When you see how easily Dash handled a blocksize increase it makes bitcoin look like a slow moving dinosaur.

https://www.youtube.com/watch?v=HwCZHIP_gmI

alb

Fair point about the regulation, it's not set in stone, but it's also less likely to get the outright global bans any time soon that that people were fearing a few years ago. The general attitude so far has been to warn people that they're dealing with a risky unregulated system, and regulate the fiat-crypto on/off-ramps similar to conventional financial services. All very reasonable.

It wouldn't surprise me if bitcoin didn't really rub governments the wrong way until (if?) closed loop bitcoin economies become more common, and at that point it gets harder to enforce too.

If bitcoin continues to get more popular and the blocksize is not raised all of Hearn's questions you posed will be answered, and I'll quote again the possible outcomes I considered:

1) bitcoin core developers implement a sufficient scaling solution which everyone is happy to run
2) bitcoin core developers do not implement a scaling solution, someone else does instead. The blockchain forks, one of the forks wins. This is a messy outcome, but everyone will almost certainly migrate to the winning fork very quickly.
3) bitcoin core developers do not implement a scaling solution. None is needed because additional layers on top of bitcoin (lightning network, sidechains, payment channels etc) provide sufficient scaling in due time.
4) bitcoin core developers do not implement a scaling solution and there is no fork or successful additional layers. Bitcoin fails to scale, another cryptocurrency willing to scale overtakes bitcoin as the leading cryptocurrency. I suspect the threat of this is enough to prevent it from happening.

It's easier for Dash or any other small time coin to be more agile, but they also have not faced the kinds of issues bitcoin does as they are not so popular. I'm not going to care about an alt-coin until I see one at least 10 times bigger than any of them are now.

Mullicker

I won't really care about any cryptocurrency until it is widely accepted, easy to use and offers some privacy. Bitcoin is the best overall but not good enough for me.

It was more like a speculative commodity than a currency for the time I had it. When I look back at my recent online purchases it has been all travel related and none of the accommodation or airline sites I used accepted bitcoin. And where I did use bitcoin as a currency I had to wait 15 minutes before I had a confirmation, so it would actually be a dis-improvement over how quickly things happen when I pay online with Visa.

Now I understand many people use bitcoin for different reasons and it may do a better job than existing solutions in some areas but it was not the case for me.

Tornando9

I love bitcoin and have been around the bitcoin trading scene for years. I used to trade altcoins on cryptsy and bittrex.
I had great fun doing so but the altcoin market retty much died 2 years ago. There seems to be some increase in volume again but might not last long.

In the meantime i have been trading forex pairs and commodities on https://1broker.com/m/r.php?i=2705

The great thing about trading here is that the profits are paid in bitcoin so its quite unique.

Bitcoin is the future and is here to stay.

scamalert

yeah bitcoin are here to stay until darkweb comes up with better solution,and given new implementations to obtain them,given you leave as much track using bitcoin as any prepaid card,then hassle with fees that miners make,transaction time,cashing out-its useless.

btc might not be governed by law,but given that majority is made and maintained by Chinese and servers that store them,that can go puff without any traces or consequences is a joke to believe its some future crypto currency.

Like this story that ive read:basically person managed to get enough btc without as buying any,found out hosting provider that accepted btc as payment and didn't ask any personal info,then create website on dw and paid advertising fees with btc to provide service of hacking someones emails,phones etc for a cost-thing is person who done did never bothered to provide any such services only collect payments-and said what they gonna do hire another service to hack me or complain to someone that they intended to pay for illegal services think its called hackers for hire.

Tornando9

There is already Darkcoin or Dash as it's now known which has a feature called darksend which is untraceable. It's two years old now and old tech. Also to make bitcoin anon all you need to do is send it through a tor node.

You can opt out of miner fees for btc but your confirmation time on a tx will be a long wait.
I can cash out in a matter of minutes with coinbase directly to my bank account.

I have never had my bitcoin wallet hacked or lost coins on a server. But last week my credit card got skimmed for the third time. The winklevoss twins have launched a super secure regulated exchange called gemini and VC money of around $1bn has flooded into bitcoin in the last few months.

Pretty sure Hackers take cash too.

scamalert

Still dont see any single advantage to using btc only cons,and most likely to use for some twisted reasons to go trough all the anonymity hassle.

buying btc from anywhere you pay on top like 20-30$ and lose money instantly on that purchase,if you were to cash out again.

paying transfer fees on top,because some Chinese factory has monopoly.

most inconvenient to calculate its worth,not to mention huge fluctuations in price daily.

capped amount,and profits those who mine it large scale

payments go one way and no backwards security.

while even most basic prepaid card will provide chip security and if dots wont connect investigation will be launched to trace if card was used by someone else or stolen,even more CC cards would notify you first second if purchase was made in couple hundred euros just to confirm it,specially if money are going out of country,but according to tin foil heads its too expensive to send money using prepaid or other card since its like 3% charge that you'll incur for such inconvenience and banks dont allow to send money abroad stories.

zulutango

So, any updates on the latest Bitcoin saga?

What is Core and what is Classic?

zulutango

So, any updates on the latest Bitcoin saga?

What is Core and what is Classic?

alb

Bitcoin Classic has been released this week. https://coin.dance/nodes gives a good overview of the four main node software variants with a description of what each is, and charts that give real time data on what the current market share each has is. If you've any specific questions I can post more later this evening.

zulutango

I will look at that link, thanks. I find it very hard to follow the saga, and to figure out what's best for the currency.

alb

Bitcoin Classic
The gist of it is that bitcoin classic is based on an exact copy of a recent version of bitcoin core, but with one important change. If miners run bitcoin classic, the blocks they produce have a label on them indicating this. If 75% of the last 1000 mined blocks contain contain this label, nodes and miners running Classic consider it as meaning that the increase of the blocksize from 1MB to 2MB has been approved, and after a 1 month grace period they will consider 2MB blocks valid. In this scenario any nodes still running core will consider those blocks invalid.

Nodes and miners
The bitcoin network is made up of nodes and miners. Nodes connect to other nodes and listen for new transactions, if the transactions are deemed valid they relay them to other nodes. They do the same for any new blocks they receive. Each node typically keeps a history of every block, and every transaction that has ever happened, so that they can verify new transactions and blocks.

Miners are typically also nodes, but with the added behaviour of creating new blocks.

Adoption of Classic
The https://coin.dance/nodes link shows that we now have about 15% of nodes running Classic. However 0 of the last 1000 blocks were mined with Classic, meaning that so far there no miners are running classic, and therefore we're nowhere near the 75% of the last 1000 blocks needed for the 2MB increase to happen.

Politics and what's best for bitcoin
The civil war is continuing, people at all levels disagree on the best path forward. Core wants to implicitly increase block size by the complex new segregated witness feature, which isn't ready yet, but is due in a month or two. Classic wants to just simply double the blocksize with a hard fork now. Either way bitcoin continues on. Classic has only just launched so things are finally getting interesting, but I suspect if it does not have significant uptake within say a month, it may die on the vine, and for better or worse Bitcoin continues on the path Bitcoin Core has set.

Another cryptocurrency, Ethereum is bubbling hard in the meantime. Some speculate it's due to migration to it due to the uncertainty in bitcoin. Maybe it is, maybe it's just another small cap alt-coin bubble, I've seen many like it before. Maybe it's a bit of both.

alb

alb wrote: »

Adoption of Classic
The https://coin.dance/nodes link shows that we now have about 15% of nodes running Classic. However 0 of the last 1000 blocks were mined with Classic, meaning that so far there no miners are running classic, and therefore we're nowhere near the 75% of the last 1000 blocks needed for the 2MB increase to happen.

An update since two weeks ago. There are now 1056 Classic nodes running (almost 18% of total nodes). The first Classic blocks were mined, 1.5% of the last 1000 are Classic blocks. Still a long way off the required 75% but it's a start.

Pressured by this support of Classic, some Core developers met with some major Chinese miners and convinced them to stick with Core by assuring them Core would also provide a roadmap to upgrade to 2MB blocks - code available this summer, with hope to only need to deploy it in mid-2017.

Meanwhile, the transaction rate continues to increase, reaching a new daily all time high this week of over 246,000 a couple of days ago. Blocks are frequently full, with a back-log of transactions. We're about to find out whether some bitcoin transactions are really spam or disposable, and what kind of fee market users will tolerate. It's a new chapter for bitcoin.

pH

KomradeBishop 16-01-2016 13:38 wrote: »

When powerful elements within the community, along with those who control the infrastructure, are openly corrupt and are deliberately trying to slam Bitcoin into a technological roadblock - as the above looks a lot like - then it seems like the endgame for the main Bitcoin cryptocurrency is near, and that people unwise enough to invest in Bitcoin, should start dumping them before it all unfolds.

16 Jan 2016 1 BTC = €335
16 Jun 2016 1 BTC = €668

So anyone following your advice would have gotten out at the bottom, people who didn't buy in Jan have missed a chance to double their money in 6 months.



http://www.wsj.com/articles/bitcoin-price-hits-two-year-high-1465856720

zulutango

Bought a few when they dropped to less than $300. It was a gamble. Wish I'd bought more now!

howamidifferent

Interesting take on the current price rises which was published a year ago...

https://www.youtube.com/watch?v=9_IkOf8IFBQ

KomradeBishop

pH wrote: »

16 Jan 2016 1 BTC = €335
16 Jun 2016 1 BTC = €668

So anyone following your advice would have gotten out at the bottom, people who didn't buy in Jan have missed a chance to double their money in 6 months.



http://www.wsj.com/articles/bitcoin-price-hits-two-year-high-1465856720

There is no 'advice' which can predict a volatile flash-increase in the value of Bitcoin - people from 6 months ago, will have had no way to be cognizant that the recent flash increase would happen.

There is no intelligence or shrewd prediction behind deciding to stick with Bitcoin up to today - it's a fairly random/unpredictable event, likely to be followed by a future fall.

You won't be making a similar post noting any future fall in value though, as Bitcoin-mania promoters, tend to cherry-pick what they emphasize/pay-attention to - and focus only on the hype.


Nobody expects the value of Bitcoin to stop being wildly volatile - which is what the current trend is just evidence of - these events don't change the future challenges that Bitcoin still faces, due to its technical structure and how that can potentially be corruptible as mining is further consolidated.

alb

I'm not who you were replying to to, but I've some things to say about this.

KomradeBishop wrote: »

There is no 'advice' which can predict a volatile flash-increase in the value of Bitcoin - people from 6 months ago, will have had no way to be cognizant that the recent flash increase would happen.

There is no intelligence or shrewd prediction behind deciding to stick with Bitcoin up to today - it's a fairly random/unpredictable event, likely to be followed by a future fall.

At the end of post 717 almost 6 months ago I said:

alb wrote: »

It would not surprise me if this year provides a perfect storm of events for bitcoin to bubble up again: Global markets struggling, along with Chinese currency devaluation, the reward halving and a resolution to the scaling issues, but it's bitcoin so who knows

and before that in post 707 in 2015 I said:

alb wrote: »

People were saying that bitcoin had been going down since the gox bubble 2 years ago, but it's not true. The bottom was January this year, and it's been sideways since then. Many who sold on the down trend were just waiting for a clear bottom to buy back in, so when you get any kind of significant upward movement it's easy for a positive feedback loop to start and we get the hockey stick we've seen before.

These weren't predictions with certainty, nor could I know the exact timing, but I do not think it's random either. I don't mean to toot my own horn, but I specified the reasons bitcoin could rise again. I expected another bull market was more likely than more downside and I acted accordingly. Bitcoin has always grown in spikes followed by slow downtrends to higher lows.

KomradeBishop wrote: »

You won't be making a similar post noting any future fall in value though, as Bitcoin-mania promoters, tend to cherry-pick what they emphasize/pay-attention to - and focus only on the hype.

If you held a gun to my head and forced me to predict what happens next I'd say this rises more in the next 2-3 weeks. If it surpasses the previous all time high there will be another media hype cycle and who knows how high it could go. Bitcoin was still difficult to buy in 2013, especially outside of the US and China, now it's fairly accessible globally and way more people have easy access to it.

I think the halving event will probably cause a spike downwards, it would not surprise me if this happens in the week leading up to it as other people who are also predicting it try to sell ahead of it. If this happens it would not surprise me if there is a sharp bounce back up afterwards pushing bitcoin on and upwards in an extended bull market - similar to what happened when the Silk Road got busted.

KomradeBishop wrote: »

Nobody expects the value of Bitcoin to stop being wildly volatile - which is what the current trend is just evidence of - these events don't change the future challenges that Bitcoin still faces, due to its technical structure and how that can potentially be corruptible as mining is further consolidated.

I expect Bitcoin to become less volatile as its total value increases. This has been the trend so far and I expect it to continue. It absolutely faces technical challenges - even the blocksize debate has not been resolved at all yet, but ultimately this doesn't matter. Bitcoin currently functions well enough to be used as digital gold - as a speculative asset traded 24/7 globally and that's good enough for now.

I'm not advocating anyone buy now, in fact I sold some and took some profit myself this week. Calling the top on a sharp rise like this is impossible.

Roonbox

nice work alb

Bitcoin is acting as a modern day Gold for market uncertainty.
The upcoming 'halving' event is def providing a bid too.

alb

It's been 5 months since any post here. I'm liking how this thread is documenting the history of bitcoin as it happens so why not have an update. The 16 millionth bitcoin of the eventual 21 million was mined last week. There's no bitcoin hype, there's no tech breakthroughs there's no evidence of any more mainstream adoption or merchant acceptance. Bitcoin is up from $433 at the start of the year to a current price of $740.

My last post in the summer turned out to be very close to a local peak during the rally for the reward halving event.

alb wrote: »

I think the halving event will probably cause a spike downwards, it would not surprise me if this happens in the week leading up to it as other people who are also predicting it try to sell ahead of it.

This kind of happened, but it didn't go down very much.

alb wrote: »

If this happens it would not surprise me if there is a sharp bounce back up afterwards...

This didn't happen.

alb wrote: »

...pushing bitcoin on and upwards in an extended bull market - similar to what happened when the Silk Road got busted.

Bitcoin has stayed in a steady bull market. This is the longest time bitcoin has stayed above 500, above 600 and it also 700 if it can hang on a couple more weeks. Being backed by a brexit-voting country has not helped the pound, being backed by a country banning formerly legal tender notes has not helped the Rupee, being backed by a country devaluing its currency has not helped the Yuan. The dollar is now backed by Trump. Being backed by nothing isn't so bad after all.

Lets talk about threats from other crypto currencies. Ethereum and Monero were the main two competitors that went through hype cycles this year. Both bubbled and crashed and are still hanging around but both combined are well under 10% of Bitcoin's market share, and nothing is even close to catching Bitcoin.

The scaling debate is still not resolved, there has been no hard fork and no block size increase, no competing version of the code has over taken core. However core have recently completed and released the new segwit feature. It needs 95% of miners to signal that they support it over a period of about 2000 blocks to count as consensus before it will take effect, it promises to effectively increase the blocksize by a significant amount. It's early days but it has 28% support so far, it's not clear yet whether it will reach the necessary 95% or not.

Global localbitcoins trading volume just keeps increasing: https://coin.dance/volume/localbitcoins

scamalert

while btc is interesting for me in some ways,but when you put political events as forces for btc drive it losses any sense,now looked around web for any info on actual btc user numbers so far coming up with stats around 1-10mill at best of regular users,rest is amounts of people who speculate on the likes of forex since some brokers introduced the option,gambling sites and the likes to use btc.

So this explains trading volumes,but if looked at actual users,not people that create btc wallet to test it out,or someone who buys it on forex with 1:500 leverage to try and speculate according to this crypto site:https://bitcointalk.org/index.php?topic=1520276.80 you would be hard pressed to get numbers above few mill of actual users -who would use it as currency and not back end to cover themselves just to get it and transfer it back to £$ or whatever currency they actually use.

since reading some comments from people that are in it for years seems,the only use they have for it is holding and selling off when profits are made,and when you have volatility that can go xxx% i doubt there's many that consider it currency,but more like in between exchange or speculation ,thus no actual real world usage since volatility of having it is too much risk,to be considered usable or even safe,for regular people.

makeorbrake

BTC up again these days. The uncertainty in Italy (ref. voting - which potentially could lead to a general election followed by a vote on staying in or leaving the euro) seems to be bumping it up right now.


BTC seems to be a dumping ground for funds to weather various established currency storms. Its frustrating to see that it's not coming through as a main means of payment. Can't understand how this has not been achieved......??

Capt'n Midnight

alb wrote: »

The 16 millionth bitcoin of the eventual 21 million was mined last week.

Even if you can spit bitcoins one of the problems is the finite number of transactions per second. The energy and % costs of transactions also put a finite limit to it's value.

Bitcoin is up from $433 at the start of the year to a current price of $740.

Or if you look at Nov 2013 it's down from $1100.

alb

makeorbrake wrote: »

BTC seems to be a dumping ground for funds to weather various established currency storms. Its frustrating to see that it's not coming through as a main means of payment. Can't understand how this has not been achieved......??

It doesn't have the transaction capacity to be a popular means of payment right now and the additional setup hassle for merchants, the volatility in price and tx fees are all causing too much friction.

Dumping ground makes it sound bad. It's behaving like digital gold - that is a hedge against fiat currencies screwing up, a speculative investment and use as money that is censorship resistant and permission-less, for those that need that for whatever reason.

Bitcoin is doing fine being used as it currently is. There is enough value in the block reward and transactions to keep miners paid and in the meantime scaling solutions are being worked on.

The mining reward will remain the same for the next 3.5 years, so unless there's a severe crash in price bitcoin should chug along fine. After that there'll be four years of a 6.25 block reward, which is probably ok too. Ideally bitcoin needs to have good off-chain scaling 7.5 years from now and be moving to much higher levels of transaction fees onchain from those.

Capt'n Midnight wrote: »

Even if you can spit bitcoins one of the problems is the finite number of transactions per second. The energy and % costs of transactions also put a finite limit to it's value.

See above regarding transaction levels. Energy used for bitcoin mining will always trend towards the appropriate amount. I don't see why either puts any ceiling on what the value can be, if you have a ceiling in mind please let me know what it is.

Capt'n Midnight wrote: »

Or if you look at Nov 2013 it's down from $1100.

I look forward to the day this unimportant argument no longer applies, hopefully within the next 3-6 months