BITCOIN as an alternative to regular currency

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Euler
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Ethereum Co-Founder Says Crypto Coin Market Is Ticking Time-Bomb

Investors pouring millions into startups with nothing more than a white paper and entrepreneurs issuing dispensable digital coins to cash in on the hype are fanning a blockchain assets bubble, according to one of the ethereum network’s co-founders.

https://www.bloomberg.com/news/articles ... ium=social
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Orixian
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Id say thats a good article overall although I disagree with the statement that regulation is the biggest problem the sector faces. Certainly the SEC clamping down could cause the bubble to burst so from a price perspective it could hurt but they will have as much success regulating the underlying technology as the authroities had regulating napster back in the early 00's. Its peer to peer but with no real central authority so good luck shutting it down. If they did a different crypto would take its place much the same as alternative file sharing sites/programes replaced napster.

Who knows how long this bubble could run for. I wouldnt buy now but now could be the begining of a 2,5,10 year bubble. The bitcoin split they talk about is actually a potential three way split not two way but as of today I believe 80% of the nodes are indicating they will support segwitX2 protocol so my understanding is the bitcoin civil war as they ae calling it is over. If come august the 1st the new protocol is adopted on mass I expect the bubble to continue. As all the alt coins are esstially leveraged plays on bitcoin I expect them to go beserk too. Apparently segwit 2 should drasctically reduce the tranasction times allowing bitcoin to finally be a currency and possibly pave the way for larger adoption. I also saw e-torrow advertising crytocurrency on 2 12ft screens suspended above the esculators at canary wharf tube stop yesterday. Id say the mania phase could be just around the corner.
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Euler
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A coding error led to $30 million in ethereum being stolen

The perils of a blockchain’s immutable transactions was brought home yesterday as some $30 million in ether was stolen due to a bug in the code of a well known ethereum wallet. It could have been worse: an additional $75 million was at risk because of the same coding fault, but a group of vigilante hackers rescued those funds and are promising to give them back to their owners.

https://qz.com/1034321/ethereum-hack-a- ... ng-stolen/
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ShaunWhite
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I've got 5 magic beans going cheap if anyone's interested.
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marksmeets302
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Here's another hack, the fourth this month concerning an ICO:
https://www.bleepingcomputer.com/news/s ... -platform/
What is especially upsetting is the comment of the CEO: "There's no need for us to buy the tokens back. The hacker stole $8.7M worth of VERI & demand ate it up immiedately. " In other words: we don't care that your money, meant to grow our business, was stolen because you are foolish enough to send us new money anyway.
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Orixian
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Thats not the underlying code of those currencies being hacked in each of those cases. Its the security around the organizations holding the coins. Its like a bank being robbed but everyone abandoning currency as a result. Maybe you don't use that bank again but would you abandon the entire monetary system? It wouldn't make sense to do that.
The technology is still sound. Bitcoin its self has already gone through a lot of these events and in all the cases the underlying code that allows for the transactions to take place was never compromised. The safest way to protect yourself is to spread your coins out accross many different wallets and never leave it on exchanges. Centralized points such as large wallets and exchanges are a security risk in a system that relys on decentralisation.

The biggest concern is that everything has been rising and there is no possible way that these coins can all be offering utility in the long run, most of them will be utter rubbish. Given that bitcoin is the only one with any current utility Id say they are all overvalued as is but i suspect come agust the firs they will head upwards once more. Im starting to think bitcoin will be a winner though, we will see after august the 1st if the market agrees.
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marksmeets302
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Maybe you don't use that bank again but would you abandon the entire monetary system? It wouldn't make sense to do that.
It would sure lower my trust in the system, because banks are a necessary part of it. To give a more on-topic analogy: a couple of former colleagues want to start arbitraging cryptocoins. Do I think they will make money? For sure. It's the easiest money on the planet. Do I think they will keep the money? Not so sure. In order to do these arbitrages they will need to store money and coins at exchanges. If one them gets hacked it's game over, and you can't insure against that. And for that reason, as they say in Shark Tank, I'm out.
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Orixian
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I can see how if the arbitrage were to require fast execution they would have to store the crypto on the exchanges as they might be beaten to the punch by others but if the arb exists for a few minutes or longer then most cryptos could sit in their respective wallets until needed and just be sent to the exchange before the transaction. Arbitrage however does take place so some people have already decided there is a good risk to reward inspite of the hacks. I am doubtful its true arbitrage though as most people are probably transfering purchased coins to a different exchange to sell them at a better price and so carrying some risk of price movement. (educated guesse, I have seen no stats on this)

Most of the arbs I have seen are an illusion as they exists between crypto only exchanges and exchanges where you can sell for fiat. The crypto only always seem to be a higher $ price from what I can tell but you wont be able to sell for that at the fiat exchanges. Still if you have friends who have an edge then good on them

It does touch on one of the the things the cryptocurrency system will never do as well as the current monetary system and that is insurance. No one will insure your bitcoin against theft in the way a goverment insures(at least in part) your bank deposists. No one will get it back for you if you transfer it to the wrong account.

People tend to get worried about this because they can't imagine the idea of a value storage system where there is no saftey net against human error or theft but the truth is both systems are double edged swords and thats the way people need to view them. No one can hyperinflate bitcoin to deal with a banking crisis. My government cant devistate the true value of my savings to fix a problem I wasn't responsible for. Before bitcoin gold would have been my only alternative to this but it has zero utility, worst accesability than bitcoin and as the largest holders are the central banks responsible for money printing and the investmant banks that are closely associated to them so I see a lot of potential for market manipulation. The gold market also lacks any where near the transparency of the bitcoin blockchain which (although you cant see who owns the wallets) you can see at any given point where all the bitcoins are.

I dont imagine that dealing with a 2008 banking style crisis is an easy thing to do. Lets assume the powers that be genuinely have tried to remedy the situation as best and as honourably as they can.This means the world over the best they can achieve with good intent and hard work is a massive depreciation in the value of stored wealth, a decrease in real wages as paycheques don't adjust to cope with the inflation of the currency,decreased chance of homeowner ship as no one can get a loan, increases in tax to pay for debt rather than public utilities, a cut in public utilities to cope with the deficit and it was also central banking policy in the form of deliberately low intrest rates in the early 00's that was largely responsible for the crisis

....but the system can insure my bank deposists.....although they may only be worth a fraction of their real value after QE.... and only if they don't raid my bank first, like in cyprus.

It just makes sense to have another asset class and monetary system so that your eggs aren't all in one basket. Once this bubble ends and one of the cryptocurrencies finds its true price and the volatility goes then this asset class will be available. It will protect against the pitfalls of central banks and by holding cash you protect against the pitfalss of cryptocurrencies. Another asset class to add to the portfolio but one truly outside the realms of the current financial system. This is the main thing I really want bitcoin and consensus algorithm based currencies for.
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Euler
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Bitcoin rebels risk 'currency trading chaos'

A split in the Bitcoin community is set to create a new incompatible version of the cryptocurrency on Tuesday.

http://www.bbc.co.uk/news/technology-40779767
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megarain
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This was a pretty interesting podcast.

http://po.st/IPdn2N via @po_st

I am intrigued etc, and tried to open some Bitcoin betting sites, but, it mainly says its forbidden in this jurisdiction (Uk).

Does anyone here, have a bitcoin betting account, they use, actively ?
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Orixian
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megarain wrote:
Tue Aug 01, 2017 9:43 am
This was a pretty interesting podcast.

http://po.st/IPdn2N via @po_st

I am intrigued etc, and tried to open some Bitcoin betting sites, but, it mainly says its forbidden in this jurisdiction (Uk).

Does anyone here, have a bitcoin betting account, they use, actively ?
That was an excellent podcast thanks for that.

I don't have a bitcoin betting account but I have been looking into crytocurrencies for betting and trying to imagine what the future could hold. Ill make a separate post on it when I get the time.
Last edited by Orixian on Sat Aug 05, 2017 12:19 pm, edited 1 time in total.
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Orixian
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Euler wrote:
Tue Aug 01, 2017 8:28 am
Bitcoin rebels risk 'currency trading chaos'

A split in the Bitcoin community is set to create a new incompatible version of the cryptocurrency on Tuesday.

http://www.bbc.co.uk/news/technology-40779767
Well this just goes to show the incredibly unpredictable nature of the cryptocurrency market at the moment. The specific fork that just occurred between bitcoin and the new bitcoin cash wasn't even on the cards a week ago when were talking about potential forks. Apparently a section of miners decided to increase the block size from 2mb to 8mb. This means the transactions would speed up but apparently would cause security issues and mean that the cryptocurrency would become more centralised as storing 8mb blocks requires more equipment than 2mb blocks so smaller players are frozen out of the network as costs for maintaining it increase. This isn't good for security reasons, more decentralisation is always best.

The split is essentially the same as a spin off in the world of stocks and shares. Each BTC holder received Bit coin cash at a ratio of 1:1 and theoretically the price of both added together equalled the price of the BTC prior to the split. The pump that occurred in the Bit coin cash to circa 700$ was apparently due to people storing their bitcoin in wallets and exchanges that didn't acknowledge the split and didn't give BTC holders their bit coin cash. Coinbase (one of the largest exchanges)didn't acknowledge the split. As such the supply was limited and demand went through the roof. The price spike isn't thought to be a reflection on utility of the coin from what I'm reading.

I would have thought this would have been a disaster but it appears the segwit2 proposal is still due to take place for bitcoin on august the 8th and as such transaction times will come down to the point where it can finally be a currency. The price has rallied strongly to a new all time high today as a result. I wouldn't say its worth buying bitcoin at the moment given your a 5k price tag over the next year or two is what people are talking about. Even at 10k price tag your not getting enough of a payout given the probability of it getting there.

I would consider buying some of the alt currencies though. As I have said if BTC does boom the mania phase of people looking for "the next bitcoin" will send all coins even further upwards even though the majority are overvalued as it is. I think that trying to identify coins with utility that arguably represent value is a good idea but as everything has gone up ,regardless of utility, over the last few months its clear that you may as well put names of coins on a dart board and select the ones your darts hit.
sora
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I trade crypto so was excited to discover this thread!

The Bitcoin Cash split was probably good for the long-term health of bitcoin. It could have fragmented into multiple smaller coins (Bitcoin, BIP148, Bitcoin Cash and new POW) but most of the hash power and support is still in one coin. There is however still a risk of another chain split when the "2X" part of Segwit2X takes place in November.
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Orixian
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sora wrote:
Tue Aug 08, 2017 6:08 pm
I trade crypto so was excited to discover this thread!

The Bitcoin Cash split was probably good for the long-term health of bitcoin. It could have fragmented into multiple smaller coins (Bitcoin, BIP148, Bitcoin Cash and new POW) but most of the hash power and support is still in one coin. There is however still a risk of another chain split when the "2X" part of Segwit2X takes place in November.
Yea I read about the other chain split risk today. From Bitcoin Core apparently. I don't think the market cares any more. If we get a crypto with bitcoin in its name that actually serves as a currency then that will be the main player.
mcfc1981
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where is the best place to buy bitcoins?
found coinbase a waste of time
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