Bitcoin in a hyperbolic bubble

[Duke of Marmalade]

Well let's break down the terminology - Solving complex mathematical equations.

Would it be reasonable to suggest that "solving mathematical equations" is ok with you? And that the offending piece is the word "complex"?

complex
[ˈkɒmplɛks]

ADJECTIVE

1. consisting of many different and connected parts.
"a complex network of water channels"
synonyms:
compound · composite · compounded · multiplex


I'm starting to think that you perhaps you are conflating the word "complex" with "complicated"?

Clearly your descript of 21trillion key 'guesses' would suggest that the maths is complex. But your references to 'clever' and 'sophistication' infer an interpretation of 'complicated' as well.
As the dictionary definition above demonstrates, it would be appropriate to describe the Amsterdam canal network as complex, but not very complicated to understand.

As I understand it, there are new bitcoins 'minted' (another metaphor for adoption by crytpo) every ten minutes.
Awarded to the miners that verify all the transactions in a block.

Compare that to the euromillions. You can gain a jackpot reward in the millions, far in excess of any bitcoin reward, if you buy tickets with every single possible combination of numbers.
It is not very complicated, but it is very complex as there are 139,000,000 different combinations. Surely beyond the capacity of any one individual or group of individuals to manaully achieve this?
Perhaps a simple computer program could be devised to purchase tickets for each combination of numbers?
But at €2.50(?) a line, the jackpot would have to be €347,500,000 just to break even. I think €200m is the highest is has ever got. Worse, if you spent €347,500,000 on euromillions tickets, I think only 50% of that goes to prize money.
Even then, anyone attempting to win the jackpot this way would have to factor the double-spend problem (rather, one or more persons picking the same combination of numbers for the same draw).

It is fair to say that the Euromillions have established a robust, fool-proof system to ensure the integrity of the euromillions. It's not very complicated, but it is complex.

As for bitcoin, the maths are far more complex ensuring the integrity of the network.

What a loada midnight baloney.
Performing a SHA256 trial does not Solve anything, I invited you to try it.
There is nothing Complex/complicated/intricate/sophisticated about it.
It requires absolutely zilch mathematical background
It involves no equations whatsoever
But hey, “solving complex mathematical equations” is a tad more impressive than buying gazillions of lottery tickets, which by the way is an excellent analogy which I might address later.

 

[Duke of Marmalade]

@tecate I note your comment that credit card fraud costs $6bn a year in the US alone.
Research using Chainanalysis has shown that 1% of bitcoin’s $90bn per day transactions are criminal. That is a total of $300bn per year, 50 times US credit card fraud.

 

[WolfeTone]

which by the way is an excellent analogy which I might address later.

Please do.
I was listening to a senior executive of a world leading gambling company explain the business model in lay man's language.

He said basically the model is, the punter gives the bookie €10 and the bookie gives the punter €8 back.

Not very sophisticated, nothing really clever about it.
Of course, in-between the base monetary exchange between punter and bookie there is a complex, sophisticated business strategy at play.

But in essence, your concern over the terminology applied to bitcoin is a grossly exaggerated concern.

 

[Duke of Marmalade]

But in essence, your concern over the terminology applied to bitcoin is a grossly exaggerated concern.

It only feels grossly exaggerated because we are in the rabbit hole. But I stated in #627 that it is not a monster point. It has been made a monster point in this rabbit hole by yourself and @tecate. Why don't you just concede that the process of mining does not involve "solving complex mathematical equations" but that it is not a monster point. Then we can all move on to the next rabbit hole.

 

[Duke of Marmalade]

Please do. (elaborate on the lotto analogy)

Well I will keep my promise. The figures are quite staggering. Just to give a bit more background a trial or in your analogy a purchase of a bitcoin lotto ticket involves performing the following SHA256 operation.
SHA256 (Block header + nonce)
This produces your lotto number. It is the nonce which you change on a totally arbitrary basis to generate a new lotto number.
If your lotto number has a certain number of leading zeros you win and can open the box and make off with your bitcoins. Note in passing that unlike real lotto there can only be one winner in each play.
The number of leading zeroes is chosen to make the chances of winning such that there is a winner about every 10 minutes. The more people playing the game the harder the protocol makes it to win.
If you pick 6 numbers in the Irish Lotto the chances of them winning is about 1 in 11 million. The original bitcoin lotto difficulty was set at 400 times this. It is currently 100 trillion times harder than the Irish Lotto
Of course bitcoin lotto tickets are much much cheaper than Irish Lotto tickets, basically the cost of electricity in running SHA256. The "difficulty" can then be seen as an economic equilibrium between the prize for winning (currently $300k but rapidly falling) and the cost of each ticket.
If there was nothing in the box, which is the ultimate aim, then the only incentive in opening it would be to get the transaction fees. That would quickly weed out the marginal players and bring down the difficulty.

 

[WolfeTone]

Why don't you just concede that the process of mining does not involve "solving complex mathematical equations" but that it is not a monster point.

You have conflated the terminology to something in your own mind, and words, that should represent something far more sophisticated, intricate and clever. For my own part

I admit on the technological side I'm not totally bowled over by bitcoin

You have allowed yourself to be seduced by the language into thinking it is something that functions in some futuristic groundbreaking mathematical advancement. When all along, how it operates is posted on a 8 page whitepaper that doesn't even mention the words "complex mathematical equations".
That is why I reference the euromillions.
The underlying fundamentals of it are neither sophisticated or groundbreaking. But it delivers time and time again on its objectives. To guarantee a win of the jackpot I need to solve a simple mathematical equation. I know that if I buy one line I have 1/139000000 chance of winning.
So if I buy 139m/139m lines I know I am guaranteed to win the jackpot and all prizes in between. But it is complex procedure and cost prohibitive, risk from prize sharing etc, so basically my efforts to try undermine and exploit this system are futile. That is the mathematical equation that the euro millions has solved in order to keep the integrity of its system working.

Bitcoin has solved the mathematical equation of protecting its decentralised network from attack by reducing the probability of a successful attack to next to zero.
The process that is applied to that equation is neither sophisticated nor complicated.
Bitcoin is open for anyone and everyone to improve what bitcoin does. If someone can produce a better a system it will replace bitcoin.
But we will just be talking about #betterbitcoin, not BOHA.

 

[noproblem]

Is it possible that the goverment will pay a ransom in Bitcoin or similar to get the computer system back?

 

[Duke of Marmalade]

You have conflated the terminology to something in your own mind, and words, that should represent something far more sophisticated, intricate and clever. For my own part

Mining does not involve, by any process of conflation or otherwise, "solving complex mathematical equations". It was @joe sod who used the term but I have seen it before in cultist explanations of how bitcoin works. It is a term which obviously flatters the process in the minds of the cult. Why you don't admit its inappropriateness and move on is a mystery to me.

You have allowed yourself to be seduced by the language into thinking it is something that functions in some futuristic groundbreaking mathematical advancement.

Yes indeed, when I first read a cultist explanation of how it works that is what I thought must be at play. A big disappointment when I discovered the mind bogglingly boring truth.

The underlying fundamentals of it are neither sophisticated or groundbreaking. But it delivers time and time again on its objectives. To guarantee a win of the jackpot I need to solve a simple mathematical equation. I know that if I buy one line I have 1/139000000 chance of winning.

Obviously not simple enough. Our posts crossed in which I cited the number 11m. The truth is as follows:

The current odds of winning (in a 6/47 lottery) are: Jackpot - 1 in 10,737,573

Bitcoin has solved the mathematical equation of protecting its decentralised network from attack by reducing the probability to next to zero.

That is not the main reason for the difficulty in solving the bitcoin lotto. The main reason is to slow down the release of the money supply to every 10 minutes. I recommend Antonopolous to you.

The process that is applied to that equation is neither sophisticated nor complicated.

Point of agreement at last.

 

[tecate]

@tecate I note your comment that credit card fraud costs $6bn a year in the US alone.
Research using Chainanalysis has shown that 1% of bitcoin’s $90bn per day transactions are criminal. That is a total of $300bn per year, 50 times US credit card fraud.

You'll twist and turn any which way to try and contrive the outcome you want Duke. A statistic on illicit use vs. fraud in one specific country are not the same thing. Credit card fraud is theft from each and every credit card holder. The statistic given was for the US - not the entire world. Illicit use is by far and away a more broad statistic. You might as well be comparing apples with dragon fruit.

I didn't know that we were moving goalposts but seeing as we are, lets get into it. Here's (which is owned by financial institutions) which was published in 2020. In it, its states:

“cases of laundering through cryptocurrencies remain relatively small compared to the volumes of cash laundered through traditional methods,”

That's a comparison with cash - before we get into banking, credit cards, etc. Another report suggests that the ratio of money laundering in fiat dwarfs that of bitcoin at a rate of 800:1. Yet another report published last year revealed $2 trillion in bank transactions that the banking system flagged as dodgy but processed nonetheless.

But I stated in #627 that it is not a monster point. It has been made a monster point in this rabbit hole by yourself and @tecate. Why don't you just concede that the process of mining does not involve "solving complex mathematical equations" but that it is not a monster point. Then we can all move on to the next rabbit hole.

Ergo its no point! Imagine making a song and dance about the complexity of bitcoin's network security when that algorithm is responsible for a level of network security that is widely acclaimed.

Why you don't admit its inappropriateness and move on is a mystery to me.

Why you would make a meal out of this when I've never heard anyone else do so - is much less of a mystery Duke!

 

[WolfeTone]

It was @joe sod who used the term

Perhaps you should take the matter up with him then?

It is a term which obviously flatters the process in the minds of the cult. Why you don't admit its inappropriateness and move on is a mystery to me

But I dont use the term. And in the instances that others use it I understand it to mean what I have outlined to you. It is yourself that has conflated the term into meaning something of higher grandeur than it actually is. There is alot of terminology and associated memes with bitcoin that I don't conflate into anything other than the metaphors they are, regardless of which perspective you come at with bitcoin.

HODL
BOHA
'To the moon'
Laser-eyes.
Cult

Perhaps you could admit the inappropriateness of some of this terminology and then move on yourself?

 

[Duke of Marmalade]

Perhaps you should take the matter up with him then?

I took it up with nobody in particular but it was yourself and @tecate who made a monster out of it.

 

[Duke of Marmalade]

You'll twist and turn any which way to try and contrive the outcome you want Duke. A statistic on illicit use vs. fraud in one specific country are not the same thing. Credit card fraud is theft from each and every credit card holder. The statistic given was for the US - not the entire world. Illicit use is by far and away a more broad statistic. You might as well be comparing apples with dragon fruit.

I didn't know that we were moving goalposts but seeing as we are, lets get into it. Here's (which is owned by financial institutions) which was published in 2020. In it, its states:

“cases of laundering through cryptocurrencies remain relatively small compared to the volumes of cash laundered through traditional methods,”

That's a comparison with cash - before we get into banking, credit cards, etc. Another report suggests that the ratio of money laundering in fiat dwarfs that of bitcoin at a rate of 800:1. Yet another report published last year revealed $2 trillion in bank transactions that the banking system flagged as dodgy but processed nonetheless.

Some fair points. All the same if bitcoin illicit transactions are $300bn per year and "fiat dwarfs it at a rate of 800:1" that's $240trillion, one wonders is there any ligit activity in fiat at all.

 

[tecate]

I took it up with nobody in particular but it was yourself and @tecate who made a monster out of it.

You raised a complete and utter nothing burger, Duke. However, it is insightful as it confirms that you have zero objectivity in assessing bitcoin when you turn your nose up at what you deem to be an algo that lacks complexity yet its an algo that has been widely acclaimed for doing exactly what it says on the tin -> securing the network.

Some fair points. All the same if bitcoin illicit transactions are $300bn per year and "fiat dwarfs it at a rate of 800:1", one wonders is there any ligit activity in fiat at all.

Ponder what you like Duke. Circling back to where this began, bitcoin is much less a means of illicit transactions than fiat currency - that's the bottom line despite the ongoing attempts to tar and feather it.

 

[WolfeTone]

I took it up with nobody in particular but it was yourself and @tecate who made a monster out of it.

Hardly. My only point was the adoption of terminology, metaphors etc to describe processes, concepts etc is as old as the hills.
You do appear to take exception to some of the terminology often applied to bitcoin. That is fair enough, but when you apply your own metaphors 'BOHA', 'cult', then that's ok then?
Your tendency to conflate and exaggerate stated positions into something they are not (in this instance 'monster') is well understood.

Anyway, not a major point at all.

 

[Duke of Marmalade]

Ponder what you like Duke. Circling back to where this began, bitcoin is much less a means of illicit transactions than fiat currency - that's the bottom line despite the ongoing attempts to tar and feather it.

You are good at throwing out statistics. Maybe you should credibility check them before doing so. The following three statistics as quoted by you seem very hard to reconcile with the below United Nations quote.
Bitcoin transactions are running at $90bn per day or $33trn per year
Bitcoin illicit transactions are 1% of this, that is $0.33trn per year, let's double that up to $0.66tn per year to cover all crypto
Fiat dwarfs bitcoin by a ratio of 800:1 for money laundering

The estimated amount of money laundered globally in one year is 2 - 5% of global GDP, or $800 billion - $2 trillion in current US dollars.

 

[tecate]

You are good at throwing out statistics. Maybe you should credibility check them before doing so. The following three statistics as quoted by you seem very hard to reconcile with the below United Nations quote.

Says the guy that tried to suggest to us that comparing a credit card fraud statistic against an overall illicit use statistic was reasonable! These are the only scraps you reduce yourself to Duke - this and complaining about your perception of simplicity when it comes to the algorithm thats at the heart of a very robust bitcoin network security mechanism.

You're now trying to fudge it by comparing different research not knowing what parameters and definitions they used in an attempt to discredit.

The report from Swift - they're your banking set buddies - not mine.

 

[Duke of Marmalade]

Says the guy that tried to suggest to us that comparing a credit card fraud statistic against an overall illicit use statistic was reasonable! These are the only scraps you reduce yourself to Duke - this and complaining about your perception of simplicity when it comes to the algorithm thats at the heart of a very robust bitcoin network security mechanism.

You're now trying to fudge it by comparing different research not knowing what parameters and definitions they used in an attempt to discredit.

The report from Swift - they're your banking set buddies - not mine.

Fair enough. No explanation for the wildly contradictory stats.
I suppose I must do my own credibility checks on any future propaganda stats you bandy our way.

 

[tecate]

Fair enough. No explanation for the wildly contradictory stats.
I suppose I must do my own credibility checks on any future propaganda stats you bandy our way.

From my previous post:
"You're now trying to fudge it by comparing different research not knowing what parameters and definitions they used in an attempt to discredit."

This is what your banking set buddies at Swift stated in their report:

“cases of laundering through cryptocurrencies remain relatively small compared to the volumes of cash laundered through traditional methods"

I've provided link to the report so if you'd like to critique it, have at it.

 

[24601]

Interesting discussion on Eamon Dunphy's podcast today with Ronan Murphy of Smarttech where he noted that there has been a recent increase in cybercrime that corresponds very closely with the increase in the price of Bitcoin. He mentioned that an analysis of certain wallets used by hacker syndicates provided strong evidence of this.

 

[tecate]

Interesting discussion on Eamon Dunphy's podcast today with Ronan Murphy of Smarttech where he noted that there has been a recent increase in cybercrime that corresponds very closely with the increase in the price of Bitcoin. He mentioned that an analysis of certain wallets used by hacker syndicates provided strong evidence of this.

Are you suggesting that the uptick in the price of bitcoin over the course of the past few months is accounted for by cybercrime?
That certain wallets belonging to hackers have increased funds in them is a long way from providing any credible evidence that this is the primary activity on the network as a whole. What specific analysis did he cite?