Gold collapsing. Bitcoin UP.

[pekatete]

What with it fast approaching sunday here's the long weekend read.
(As if you didn't already have enough to distract you)

The Satoshi Affair

Andrew O’Hagan on the many lives of Satoshi Nakamoto

A very well written piece that has so many nuggets of information it will certainly leave you wondering?

I think there is a lot more to this story that may take years to come out.

What a read! What an insight into what transpired. I have to say, I am totally un-impressed by CSW's motivation not to move coin after all that went before that opportunity presented itself.

 

[cypherdoc]

@molecular

"Does this have anything to do with the text you quoted about the "28 days DAO token withdrawal red flag" or was that just "accidental quoting"?"

No

 

[Inca]

Foolish price prediction:

I think bitcoin will have one or two little further up surges before a flash dump / shakeout just prior to the halving (probably after a little more media coverage). I think the price could reach as high 800-900 dollars but probably won't quite reach the big 1000.

The price will then remain in the 550-750 range until the end of the year before bubbling up to retake the ATH in a spectacular bubble in 2016/17 - price target 1500 - 3000 USD.

What is nice is that there is still a lot of scepticism over this rally and we are floating in the mid 700's already

 

[Zarathustra]

The price more than tenfolded within 5 months after the last halving.

 

[cypherdoc]

Here are some thoughts on Ethereum from someone who hasn’t actually been paying much attention to it. (But I’m not one to let a little thing like that stop me from having an opinion.)

When I first learned around Bitcoin back in early 2012, my reaction was something along the lines of: “holy shit! This changes everything!!!” To me, Bitcoin’s value proposition was pretty apparent and pretty huge. Money is really, really important. Our current monetary system is deeply, deeply flawed. And Bitcoin seemed to, at least potentially, offer an alternative that didn’t suffer from those flaws and was just vastly superior across the board. Assuming it actually worked, it was taking the reliable scarcity of a commodity like gold (and improving on it by providing something with a perfectly predictable and finite supply) and combining it with the transactional convenience of a purely-digital medium. And doing so via a decentralized and censorship-resistant network. I mean, holy shit! That seemed like something that might prove to be a really, really big deal.

On the other hand, when I hear people talk about Ethereum and “smart contracts,” my reaction is more like: “Huh. Yeah, I guess that might be kind of cool. Possibly. One day.” Maybe I lack imagination, but the value proposition just isn’t as immediately obvious to me. Is there some super-compelling future use case for “smart contracts” that I’m missing? (So far, the biggest actual use case seems to have been an $80 million clusterfuck.)

I’m not trying to claim that “smart contracts” won’t prove to be useful and important at some point in the future. But it does seem clear to me that, at least in the near- to medium-term, the significance of the cryptocurrency use case of “smart contracts” absolutely pales in comparison to the cryptocurrency use case of “sound money.”

Because of that, my intuition (as an admitted non-techie) is that you really don’t want the smart contracting stuff occurring at the “base layer” (and thus, Ethereum is taking a fundamentally misguided approach). Instead, that functionality should be moved to a “layer two” that operates above the blockchain. Now it might be the case that moving the smart contract stuff to a “layer two” has certain downsides for the smart contracts themselves, e.g., in terms of convenience or security. (In other words, it may be analogous to the problem you have when you try to make Bitcoin a “settlement layer” and move most payments to a “layer two.”) But, more critically, allowing the smart contracts to execute on the “base layer” seems likely to have downsides for the far, FAR more important “sound money” use case (if for no other reason than it adds additional complexity and thus inherent additional risk). So it seems like the choice is probably a clear one (and Bitcoin is getting it right).

By the way, I just visited ethereum.org for maybe the first time and this is literally the first paragraph on the home page: “Ethereum is a decentralized platform that runs smart contracts: applications that run exactly as programmed without any possibility of downtime, censorship, fraud or third party interference.” Seems like that statement might be due for an update, no?

EDIT: And of course, another flaw with Ethereum as an investment, and a point I've made many times before, is that "Bitcoin" isn't really the current protocol that's used to maintain the Bitcoin ledger. It IS that ledger. Even if the Ethereum protocol represented a significant improvement over the current Bitcoin protocol (again, something I strongly suspect is not the case), that would simply be an argument for forking Bitcoin to copy Ethereum's protocol while preserving Bitcoin's ledger. It would NOT be a good reason to migrate to the less-mature Ethereum ledger. "Scrapping ledgers and starting over every time a new protocol is invented would be madness. It would defeat the entire purpose of money which is to preserve a record of value given but not yet received. It'd be sort of like deleting all of your files every time you upgrade your operating system or buy a new computer."

noticed your new avatar. fun note:

my wife and i walked into our hotel elevator on Thursday morning only to see a 7'2" tall thin black guy in the corner: Kareem Abdul-Jabbar. a little grey and wrinkled but extremely stoic with nary a glance our way. that was perfectly ok, as he's a hero of mine. as we descended, each new rider glanced up at the big guy with immediate recognition. i was standing right next to him and some short dude slid into the elevator standing sideways immediately in front of him. he kept glancing WAY up and to his right to identify Kareem, as he probably couldn't quite believe it was him. no words peeped. just solemn and respectful recognition.

it would be tough to be a star i would think. everyone recognizes and appreciates your work but you can't be too friendly. esp what with what happened with that young female singer shooting last week. anyways, short homage to one of my true sports idols of my favorite eras in basketball; Laker dominance.

 

[cypherdoc]

The price more than tenfolded within 5 months after the last halving.

if you step back and survey the landscape, you will see that Bitcoin's Sound Money function has won. for me, the technical price chart says it all. the breakout from 200 is extremely positive and determinate. if we were to have failed as a tech, it should've occurred then during that 3 yr bear period of intense blocksize blockade. instead, we are arching higher with penetration of the significant 470-500 price barriers that have now become support and are free floating in space ready to launch higher. this tells me that Maxwellianism will be washed away soon enough.

and i made this point before as evidence; hodlers have clearly been the winners (most appreciation/return) of investing strategies/choices in my multi-bucket theory of investing in the Bitcoin space consisting of merchants, mining, hodling, & services. price/hodling is now filling it's bucket back up to where it needs to be to balance out the other options in the space. in fact, it should be the predominant bucket for many years in order to drag along the other buckets into the global economy. it's still amazing how early we are. if you ask the avg person on the street about Bitcoin, they will not have heard of it. if you ask the avg person in the know who has heard of it, they will not have invested or done anything about it. IOW, we're just getting started.

the Ethereum debacle is highly illuminating for me. smart contracting is extremely complex and it was predicted that there would be problems. Bitcoin and crypto for me means Sound Money. that's where the problem is and that's what needs to be solved first and foremost. Bitcoin has always been a poison dart pointed at the heart of central banking. smart contracting can remain in the purview of Wall St afaic. they will need the business anyways so as not to cause severe disruption in the world today. they will just need to transact in Bitcoin though.

"most ppl investing in cryptocurrencies will lose money" is a necessary condition to launch Bitcoin higher. not everyone can come along for the ride. nor should they and nor should the skeptics deserve to. most ppl need to lose and Ethereum has made me prescient (along with many other failures). misunderstanding what we're doing here will cause great losses. the volatility in the price chart is a reflection of this misunderstanding and skepticism and is necessary to shake out the weak hands. this is a transfer of wealth from perpetual bailout recipients to those who adhere to the fairness of Sound Money.

the ride has just begun.
[doublepost=1466347638,1466346993][/doublepost]Extraordinary:

[doublepost=1466347863][/doublepost]i probably should add another bucket to my choices: failed projects.

which is probably the biggest of all; only as a huge sink hole for lost capital. very necessary though.
[doublepost=1466348319][/doublepost]LBC in Kenya is revealing and noteworthy. this is the home of M-Pesa, the first successful national digital fiat currency that i'm aware of. M-Pesa was a critical piece of evidence back in 2011 for me in determining the likelihood of Bitcoin's success. if they're converting to Bitcoin, look the hell out:

 

[Richy_T]

On the other hand, when I hear people talk about Ethereum and “smart contracts,” my reaction is more like: “Huh. Yeah, I guess that might be kind of cool. Possibly. One day.” Maybe I lack imagination, but the value proposition just isn’t as immediately obvious to me. Is there some super-compelling future use case for “smart contracts” that I’m missing? (So far, the biggest actual use case seems to have been an $80 million clusterfuck.)

When I saw Vitalik talk at one of the Bitcoin conferences a few years back, the impression I got is that they are wildly overconfident at the scope of what Ethereum can offer.

On the other hand, it is an interesting technology, there are a few things it it appropriate for and it's possible, if it sees success, that we could see existing legal and technical structures adapted to account for it.

On the whole, I wish them well but I have a pretty wide streak of skepticism about it. On the other hand though, the question of Ethereum as a good place to hedge or place funds short-term is almost entirely unrelated.

 

[cypherdoc]

i don't think the War Dept is going to be telling Russia what to do anytime soon either:

 

[cliff]

noticed your new avatar. fun note:

my wife and i walked into our hotel elevator on Thursday morning only to see a 7'2" tall thin black guy in the corner: Kareem Abdul-Jabbar. a little grey and wrinkled but extremely stoic with nary a glance our way. that was perfectly ok, as he's a hero of mine. as we descended, each new rider glanced up at the big guy with immediate recognition. i was standing right next to him and some short dude slid into the elevator standing sideways immediately in front of him. he kept glancing WAY up and to his right to identify Kareem, as he probably couldn't quite believe it was him. no words peeped. just solemn and respectful recognition.

it would be tough to be a star i would think. everyone recognizes and appreciates your work but you can't be too friendly. esp what with what happened with that young female singer shooting last week. anyways, short homage to one of my true sports idols of my favorite eras in basketball; Laker dominance.

Lakers gotta get Phil back.

 

[cypherdoc]

On the other hand though, the question of Ethereum as a good place to hedge or place funds short-term is almost entirely unrelated.

yeah, @VeritasSapere and i were talking about this yesterday. i just feel that the upside for Bitcoin is so ginormous b/c of the magnitude of what problems exist in the world today. Forex trades $5T/day and is a market that dwarfs all other markets incl stocks, bonds, real estate, commodities, etc. if Bitcoin even takes a small slice of that, we'll be much higher price wise than where we are now.

then you talk about diversification. yeah, i get that too. except when i look around and see all this money failing by chasing other buckets in the economy. let those other guys do my diversifying for me as a necessary condition for most ppl to lose money in crypto.

smart contracting just doesn't fix any problem in the real financial world, imo. we need assurances and regulators to adjudicate disputes which inevitably happen when dealing with large amounts of investment money; which is what most investments involve. most avg investors are not going to swallow losses and simply accept a code bug like the Dao as a final condition. and most avg investors cannot be expected to read the code beforehand to find those bugs. that's just not the real world.
[doublepost=1466349241][/doublepost]

Lakers gotta get Phil back.

isn't he too old? the game has changed. 3 pt'ers from beyond the arc is a necessary condition.

 

[satoshis_sockpuppet]

On the other hand, it is an interesting technology, there are a few things it it appropriate for and it's possible, if it sees success, that we could see existing legal and technical structures adapted to account for it.

For me it's like these "private blockchains". I don't see what they offer and to this day nobody could give me a real life, comprehensible example. Only a lot of buzzwords.

Where do I need Turing complete scripting? What real life problem can Ethereum solve that Bitcoin can't solve?

A Turing complete scripting language to me sounds more and more like a crude idea somebody didn't really think through. And while Vitalik seems to be highly, extraodrinary intelligent, just making the scripting Turing complete isn't really a stroke of genius for itself. And that he described Ethereum as a "next generation cryptocurrency" is a bit high fetched.

Contrary to @Christoph Bergmann and others I don't see Ethereum as something that is going to stay or that has any use.
Honestly to me it's main purpose seemed to be a replacement for people who felt like they missed out on being early adopters in Bitcoin. And more and more as a refugium for people who were (rightfully) disappointed by the way of Bitcoin core.
The alleged technical superiority of Ethereum was always just a rationalization ex post, not really a reason why people chose Ethereum over Bitcoin.

A robust, working Bitcoin blockchain which does it's one purpose extraordinary well, is the thing we need. All the fancy stuff * can be done with additional layers on top that don't confine the security and integrity of the blockchain.

I know that a lot of people see Ethereum as a fair addition to cryptocurrencies, I see it as an inferior but dangerous competitor that is backed by big companies which never grasped the concept of bitcoin.

*And I still think we won't see more than half of the stuff people are talking about in the next 10 years.

 

[cypherdoc]

even the good 'ol USS of A:

[doublepost=1466350037][/doublepost]and the ppl who really need Bitcoin aren't hesitating:

[doublepost=1466350214][/doublepost]@Pecuniology tweeted this great article about the IMF and Bitcoin:

http://www.imf.org/external/pubs/ft/fandd/2016/06/adriano.htm

 

[VeritasSapere]

Afaik the only real new thing in Ethereum was the Turing complete scripting language. That's all.
He took Bitcoin and removed a feature. And promised PoS and a bunch of other stuff which is questionable to happen and not really well researched.

There are many new innovative features to Ethereum, beyond just its turing complete scripting language which does enable many things.

One of the things I found quite remarkable, this is due to the scripting language though, is that when you load the Mist wallet you can set up a wallet contract, which allows for multisignature and daily withdraw limits and a bunch of other features all with a few clicks within an easy to use GUI. As far as I understand it this just does not exist yet within Bitcoin at least not with such ease of use, and I do consider this a significant feature allowing normal users to have a far higher degree of security. These smart contracts allow for decentralized prediction markets, pegged assets, decentralized exchange and of course DAO's like the one we have just witnessed fail spectacularly. It was worth mentioning how far reaching having such a scripting language is, in terms of the applications that are made possible.

As far as innovations that do not relate to its scripting language are also numerous. The proof of work algorithm is highly ASIC resistant, taking up a lot of memory, while the innovation of "uncles" within mining allows for a more fair mining environment, where miners are not disadvantaged because of latency, solving one of the problems of mining centralization. The fifteen second blocktime is also very useful and the fast confirmation time is significant for a range of different applications. Ethereum is also scalable unlike Bitcoin presently, Ethereum has implemented an adaptive blocksize which is something Bitcoin has so far been unable to do. Technologically I would consider Ethereum far more advanced then Bitcoin, there is merit in Bitcoins simplicity but I just want to see Bitcoin scale, which is a hurdle Ethereum has already moved past.

It seems that if Ethereum does move to proof of stake, that the proof of stake system that the Ethereum team has designed is extremely innovative, a revolution in proof of stake really. Where people will be locking up their funds within these contracts in order to receive the interest. Incentivizing the deployed of full nodes and locking up much of the Ethereum which should also have a stabilizing effect on the price. Furthermore that Gas is consumed when contracts are executed does actually make a lot of sense, since it creates a inbuilt demand for Ether giving it more value beyond speculation, based on utility, further adding to the total value proposition of Ethereum, thereby increasing its security and utility reinforcing the virtuous cycle.

In conclusion, Ethereum is far more then just Bitcoin with a touring complete scripting language added to it. Ethereum is an extremely innovative project and Bitcoin does have some steep competition to deal with now, this should be considered a good thing regardless of what happens to Bitcoin, either Bitcoin rises to the challenge of its competitors or the alternatives will take its place, which in my book is still a victory for the original vision of Satoshi.

 

[cypherdoc]

what is the most pressing problem avg citizens of developing nations face today? clearly it is currency devaluation as central banks print to avoid debt devaluation and the catastrophe of deflation. this is why those citizens are piling into Bitcoin as can be seen from the LBC charts above. they struggle to simply buy food and clothing.

how will they value smart contracting? not much, i would suggest. they couldn't give a crap about investing in stocks, bonds, real estate, etc. they just need their money to stop devaluing. which is why they they pile into Bitcoin. sound money is the future of crypto investing.

 

[VeritasSapere]

@Roger_Murdock I do consider Ethereum to be sound money since it is has a predictible and limited supply, even though it does inflate into perpetuity, over time it does so at a very low inflation rate, considering that this is predictable I do not consider this to detract from the sound money aspect.

Ethereum is in my eyes is primarily money, which is I agree the most revolutionary and profound aspect of cryptocurrency, Furthermore the utility that is added through the smart contracts and the application of "gass" I think just adds to the value proposition of this sound money, not detract from it. In the same way that increasing the utility of Bitcoin should increase its value proposition, I think the same is true for Ethereum, especially considering that we can use Ethereum just like Bitcoin without ever needing to touch any smart contracts if we do not want to.

In regards to switching ledgers, I do think we are moving into a future with multiple dominant cryptocurrencies and I do not see the problem with owning a multitude of cryptocurrencies. It is a way for me to express my freedom of choice, in the absence of fork prediction markets and any splits on the Bitcoin chain itself this is how I express my preference, I consider the free competition of cryptocurrency a good thing which should drive innovation, it is certainly putting positive pressure on Bitcoin today and I want to support this diversity and competition.

I also think multiple ledgers can reflect a multitude of cultures, ideologies and people. I always found the idea of one chain to rule them all an unrealistic future considering the diversity of believe we have in the world today, true freedom through cryptocurrency can only be achieved if we have this freedom of choice between ledgers, between different economic policies essentially, that for me is at the heart of this revolution, instead of the state forcing its economic policy on us we get to choose what economic policy we adopt, this only works in cryptocurrency if there are a multitude of viable and dominant cryptocurrencies.

I embrace this competition and if an alternative chain becomes the most dominant I hope that I will be wise enough to have a piece of the action. Supporting the common dream of decentralization and financial sovereignty and freedom for all.

 

[Roger_Murdock]

noticed your new avatar. fun note:

my wife and i walked into our hotel elevator on Thursday morning only to see a 7'2" tall thin black guy in the corner: Kareem Abdul-Jabbar. a little grey and wrinkled but extremely stoic with nary a glance our way. that was perfectly ok, as he's a hero of mine. as we descended, each new rider glanced up at the big guy with immediate recognition. i was standing right next to him and some short dude slid into the elevator standing sideways immediately in front of him. he kept glancing WAY up and to his right to identify Kareem, as he probably couldn't quite believe it was him. no words peeped. just solemn and respectful recognition.

it would be tough to be a star i would think. everyone recognizes and appreciates your work but you can't be too friendly. esp what with what happened with that young female singer shooting last week. anyways, short homage to one of my true sports idols of my favorite eras in basketball; Laker dominance.

Very cool. I'm a little young to have followed Kareem's basketball career. So the avatar (along with my user name) is actually a tribute to his performance in one of my favorite movies:

 

[cypherdoc]

@Roger_Murdock

I'm a little young

OMG, that was hilarious! had no idea that clip spawned your name/avatar. you the little kid?

 

[jbreher]

Ethereum is also scalable unlike Bitcoin presently,

In what manner is Etherium more scalable than Bitcoin? I've not had time to study Etherium in depth, but it appears to me that the plan for scaling is fraught with a fatal flaw. As I understand it, the plan is to shard the chain, with different sets of miners working on different shards. This is all well and good - until one starts thinking about the implication to contracts running on these shards. Contracts can take input from the output of other contracts. How does one maintain a consistent representation of the collective state of these contracts across the shards? On the surface, it seems insoluble.

 

[VeritasSapere]

@jbreher I do not think sharding is necessary since I already consider Bitcoin to be theoretically scalable already, its just that governance issues are preventing it from doing so, the answer is simple really.

Presently Bitcoin has a one megabyte blocksize limit. Whereas Ethereum has an adaptive blocksize limit.

Therefore Ethereum is scalable today and Bitcoin is not. This is why the Core developers today are saying that Bitcoin can not scale, whereas the Ethereum developers are saying that their project can scale. That is the simple harsh reality. I want Bitcoin to scale but it is a political and governance struggle with an uncertain outcome, that is a hurdle that Ethereum has at least overcome at this early stage.

I have been advising several projects about how they should build their services on top of blockchain technology, sadly I have had to recommend that they build on top of Ethereum and not Bitcoin because Bitcoin simply does not have the throughput to support these projects, the network becoming congested also causes further problems, including confirmation dellays and high fees. Whereas Ethereum does not suffer from any of these problems, this is the only reason why I have advised these projects to build on top of Ethereum and not Bitcoin. It is the practical reality of today, I can not in good conscience recommend to these companies for them to use Bitcoin when I know that the network would just not support the additional throughput.

In regards to sharding, it would be great if they pull it off, but I would not consider it necessary for scalability, having an adaptive blocksize I would already consider Ethereum scalable, Bitcoin could be scalable as well if an adaptive blocksize was implemented or possibly the solution that Bitcoin Unlimited has for scaling Bitcoin, which is still my preferred solution, at least for a proof of work cryptocurrency.

 

[Roger_Murdock]

@Roger_Murdock



OMG, that was hilarious! had no idea that clip spawned your name/avatar. you the little kid?

Ha ha, no.