Bitcoin in a hyperbolic bubble

[tecate]

Have to love crypto - hope @WolfeTone and @tecate werent Moonbois and DeFi100 fans:

Yes, such a thing happens. People have to do their own due diligence and assess risk. Just so that there's no misunderstanding, nobody wants shysters in the sector. However, this event doesn't mean that everything is a scam. This event doesn't mean that there isn't a wave of innovation in development here. There are very few who believe that most of these projects will still be standing a few years from now. There will be a handful of successful projects/protocols that get adopted.
On the Moonboi reference, we've touched on this before. Although we have some level of institutional buy-in, crypto was always and still is a retail phenomenon. That means a very broad spectrum of stakeholders - from the professional to amateur to moonboi status. Not everyone falls under the latter category. There are also many incredibly bright people working in / associated with this space....many of whom have left successful careers in financial services/banking/tech to work on various aspects of what is being developed here.

Crypto project with coins and decentralized philosophy to stick it to the centralized finance overlord government controlled pigs

Same point to be made on that statement as I made above. There may be extreme views to be found, but that doesn't mean that there aren't pragmatic views to be found within the space also - those who look at what the technology can be used for and go about applying it in those instances.

Happened yesterday - surprise surprise as the crypto world unravels . . . More emperor has no clothes news to follow next week id guess as leverage undoes people in crypto land

whatever may happen in the week ahead, there are likely to be less liquidations - leveraged traders have been cleared out.
Question for you. Are you suggesting then that crypto is DOA in the next 6 months or so?

 

[DublinHead54]

This is flat out wrong. The code is public, open source and licensed in a way that anyone is free to change it and redistribute it. This means anyone can make *their own* changes to the code, they can decide to run the code with those changes and they can release it for other people to run.

However, no one can force anyone to run any particular code changes. The 'official' bitcoin code repository and the set of core developers who work on it have no actual power to compel people to run their code. Users (meaning users, miners, nodes and exchanges etc) run their code by choice not because they're forced to.

If the current core developers decided to change the code in a way that the users did not like, such as increasing the coin issuance, the users would react by not running code that included that change.

It is not wrong, the version of Bitcoin that we know and love and currently has consensus can only be changed by ~6 people. You are right that anyone is free to change the code but it is very unlikely that it will achieve consensus and those blocks be the ones that continue.

That being said the scarcity of Bitcoin is hardcoded and can be changed, but it is unlikely today to be supported by the community. However, that can change in the future. So the possibility of the amount of coins changing does exist.

In summary, BTC is a algorithm but still requires trusts in humans.

 

[WolfeTone]

Musk is at it again, this time talking to North American miners about renewables usage, BTC +20% today.

Personally, I wish he would just say nothing at this point.

 

[tecate]

Musk is at it again, this time talking to North American miners about renewables usage, BTC +20% today.

Personally, I wish he would just say nothing at this point.

Saylor set up the meeting. He also said that miners were going to tackle this environmental fud with proper disclosure of energy mix.

Elon is definitely complicated to say the least but there may eventually be light at the end of the tunnel.

Meanwhile Ray Dalio disclosed this morning that he holds bitcoin and would sooner hold it than bonds in an inflationary environment.

 

[presidenttttt]

unfortunately they teach irish in school and not IT.

How Does Bitcoin Mining Work? A Beginner's Guide

Bitcoin miners and mining are required for new bitcoins to enter into circulation. Mining is also a critical component of the security of the blockchain ledger.

www.investopedia.com

If the code is changeable, is there no way to release coins in a very slow way, to replicate this mining process time? Was it foreseen that people/orgs would mine in this way- biggest computer wins (or should win over long run).

For something that’s supposed to stop the central control of the current system it looks to be benefitting an equally small number. Even the US President can’t move any currency like Elon moves this thing.

 

[tecate]

Was it foreseen that people/orgs would mine in this way- biggest computer wins (or should win over long run).

Yes. Here's a comment from Satoshi from July 2010:

"The design supports letting users just be users. The more burden it is to run a node, the fewer nodes there will be. Those few nodes will be big server farms. The rest will be client nodes that only do transactions and don’t generate."

Note his/her/their acknowledgement of server farms. At the end of the day, miners provide a service and they're compensated for the service they provide.

For something that’s supposed to stop the central control of the current system it looks to be benefitting an equally small number.

It's designed to offer an alternative to current centralised systems - rather than stop them. In what way is it benefiting a small number? Bitcoin is available to you today should you decide to use it. In terms of the original distribution, it was available to anyone who wanted it for virtually nothing at the outset - and at decent value at various points in between then and now. Other than having to pay its current market value, nobody can stop you from using it or the network it runs on.

Even the US President can’t move any currency like Elon moves this thing.

Price action on that basis is indicative of an asset that lacks maturity and one that is still going through the adoption curve. I'd also point out that Elon moved the market relative to newcomers much more so than those that have involved themselves with bitcoin or held bitcoin over a longer timeframe. On-chain analysis has shown that those who bought/sold on the back of Elon's endorsement and more lately, his reservations have been found to have held bitcoin very much in the short term.

 

[Duke of Marmalade]

unfortunately they teach irish in school and not IT.

Would math not have been more appropriate?

Bitcoin mining is the process by which new bitcoins are entered into circulation, but it is also a critical component of the maintenance and development of the blockchain ledger. It is performed using very sophisticated computers that solve extremely complex computational math problems.

This is typical hype from bitcoin enthusiasts.
Actually neither math nor IT would help you one iota in bitcoin "mining". The same Investopedia link that you provided gives the following flat contradiction to the hype opener.

"What do you mean, 'the right answer to a numeric problem'?"

The good news: No advanced math or computation is involved. You may have heard that miners are solving difficult mathematical problems (YES THE INTRODUCTION TO THIS PAGE]—that's not exactly true. What they're actually doing is trying to be the first miner to come up with a 64-digit hexadecimal number (a "hash") that is less than or equal to the target hash. It's basically guesswork.

The bad news: It's guesswork, but with the total number of possible guesses for each of these problems being on the order of trillions, it's incredibly arduous work. In order to solve a problem first, miners need a lot of computing power.

Or to put it more simply it is like playing the Lotto. You keep guessing the number until it meets the test. It is in fact 100 trillion that's 100 thousand billion times harder for a guess to win the bitcoin Lotto as it is for a single try to win the Irish Lotto.
It wasn't always that difficult. In fact it is 21 trillion times more difficult today than when Satoshi released it. That is because the price of bitcoin has attracted so much computer power to make the guesses. In the analogy the number of lotto numbers is automatically increased to keep the win rate at about 1 per 10 minutes.

So have no regrets for learning the cupla focal.

 

[DublinHead54]

unfortunately they teach irish in school and not IT.

How Does Bitcoin Mining Work? A Beginner's Guide

Bitcoin miners and mining are required for new bitcoins to enter into circulation. Mining is also a critical component of the security of the blockchain ledger.

www.investopedia.com

If the code is changeable, is there no way to release coins in a very slow way, to replicate this mining process time? Was it foreseen that people/orgs would mine in this way- biggest computer wins (or should win over long run).

For something that’s supposed to stop the central control of the current system it looks to be benefitting an equally small number. Even the US President can’t move any currency like Elon moves this thing.

This is quite topical at the minute, see below

'This Isn't the Start of OPEC': New Bitcoin Mining Council Just Wants to Promote Greener Practices, Member Says

The Saylor- and Musk-led group won't mess with Bitcoin's code or fungibility, says Argo Blockchain CEO Peter Wall.

www.coindesk.com

 

[tecate]

This is typical hype from bitcoin enthusiasts.

Dukey, I fail to see how you're getting hung up on this - or how anyone claims this as 'hype'. Insofar as I can figure out, that phrase seems to be emanating from the one source - a writer for Investopedia. You're then quoting from a second Investopedia article for the rest of it.
Who else is using that specific phrase? Most describe the process as 'solving a puzzle' or 'solving an equation'. Otherwise, its clear that some second-rate online publications have lifted the phrase from the Investopedia article - so your beef is with the writer - not with anyone else. Investopedia have a policy on corrections - so if it irritates you that much, contact them and ask them to update it.
I couldn't care less whether the computation is 'complex' or otherwise - so long as overall it does what it says on the tin - i.e. provide the most robust network security there is.
The takeaway in terms of achievement in computer science for Satoshi/bitcoin, isn't 'solving complex computational problems'. It's solving the 'double spend' problem and in finding a way of achieving consensus between participants on the network.

 

[Duke of Marmalade]

Dukey, I fail to see how you're getting hung up on this - or how anyone claims this as 'hype'. Insofar as I can figure out, that phrase seems to be emanating from the one source - a writer for Investopedia. You're then quoting from a second Investopedia article for the rest of it.

No that is the incredible thing, it is from the same link from @presidenttttt The article must have been written by more than one person. The opening paragraph uses the hype, but later on we get the reality which is amazingly prefaced by "you may have heard that miners are solving difficult mathematical problems" . We certainly have in this very article!!
But it's not a monster point.
Now of more concern if I was an enthusiast (giving "cultist" a rest during the truce) is this suggestion by Frances Coppola that the 21m limit can be increased and more worrying still is Musk and Saylor having to deny that they want "clean" and "dirty" bitcoins. Is that even possible? Not a concern for me as I am not a bitcoiner.

 

[tecate]

No that is the incredible thing, it is from the same link from @presidenttttt The article must have been written by more than one person.

So Investopedia again?

But it's not a monster point.

Yeah, I would say that it's on Investopedia - not on anyone else. There is no hype here. I couldn't give a fiddlers if they edited their article(s) from 'solving complex computations' to 'solving puzzles'.

Now of more concern if I was an enthusiast is this suggestion by Frances Coppola that the 21m limit can be increased

Turkeys can also vote for Christmas but strangely enough they don't. I'm not in any way concerned as users have the power in this scenario.

And more worrying still is Musk and Saylor having to deny that they want "clean" and "dirty" bitcoins. Is that even possible? Not a concern for me as I am not a bitcoiner.

Not a concern for me either. There's a bitcoin upgrade in the works which helps with privacy - it should be effective by November. If there are more moves towards this clean/dirty bitcoin approach, one further privacy upgrade will sort that.

 

[letitroll]

Wall St Journal stealing some of our chat content, scoundrels

Opinion | Ban Cryptocurrency to Fight Ransomware

The existence of bitcoin and the rest benefits nobody except criminals and speculators.

www.wsj.com

 

[tecate]

Wall St Journal stealing some of our chat content, scoundrels

Opinion | Ban Cryptocurrency to Fight Ransomware

The existence of bitcoin and the rest benefits nobody except criminals and speculators.

www.wsj.com

Are we supposed to be impressed because this 'opinion piece' appears in the WSJ? I think that's the notion as we've discussed every piece of this already. On that, I in no way agree - quite the opposite. The WSJ and FT have been dressing down BTC for years already. You'd love Jemima's pieces over at the FT ( although personally, I wouldn't wrap my chips in them). At least the NYT ran with how this actually needs to be addressed.

Your guys piece is pure clickbait. How is bitcoin at fault for all the ransomware (like he claims) when it accounts for $350 million out of $20 billion?

 

[Firefly]

How is bitcoin at fault for all the ransomware (like he claims) when it accounts for $350 million out of $20 billion?

Where did the article say that bitcoin was the fault for all the ransomware?

The article says "Ransomware can’t succeed without cryptocurrency. The pseudonymity that crypto provides has made it the exclusive method of payment for hackers. It makes their job relatively safe and easy.". To me the point being made is that bitcoin facilitates ransomware. Without bitcoin (and other cryptos) how would criminal gangs get paid for their ransomware attacks?

 

[tecate]

Where did the article say that bitcoin was the fault for all the ransomware?

The article says "Ransomware can’t succeed without cryptocurrency. The pseudonymity that crypto provides has made it the exclusive method of payment for hackers. It makes their job relatively safe and easy.". To me the point being made is that bitcoin facilitates ransomware. Without bitcoin (and other cryptos) how would criminal gangs get paid for their ransomware attacks?

It's implicit in this line of FUD that's emerging despite the fact that it's just a tool - a tool that can be used to do good or to do bad. According to this logic, we should ban the internet. How about words? Criminals also use words - should we ban words? The whole thing is ridiculous.

Homing in on the piece that you quoted, the guy reckons that ransomware can't succeed without crypto - and yet he goes on to describe precisely how it can be achieved without crypto. He then quotes a figure which he says bitcoin/crypto is responsible for in ransomware booty - which represents a fraction of the entire ransomware booty thats understood to get hived away each year.

What's really going on here? This is what's really going on =>

https://twitter.com/x/status/1397106939193085952

Carl Icahn came out yesterday and said something along the lines that he'd like to take a position in bitcoin. Either that means he already has or he'll need the right conditions to create an entry point for himself (see above). These guys aren't going to like being front run by a crowd of retail peasants.

 

[24601]

I'd be interested in hearing people's views on the 5th money laundering directive and its impact on Bitcoin. The Criminal Justice (Money Laundering and Terrorist Financing) (Amendment) Act 2021 has been enacted but is awaiting commencement. The intention is to tackle the anonymity aspect but I don't see how this will work in practice given the global aspect of cryptos and the technical ease with which the new rules can be ignored.

 

[Firefly]

Homing in on the piece that you quoted, the guy reckons that ransomware can't succeed without crypto - and yet he goes on to describe precisely how it can be achieved without crypto.

Where does he do this?

The only reference I can find is: "Before cryptocurrency, attackers had to set up shell companies to receive credit-card payments or request ransom payment in prepaid cash cards, leaving a trail in either case. It is no coincidence that ransomware attacks exploded with the emergence of cryptocurrency."

 

[tecate]

I'd be interested in hearing people's views on the 5th money laundering directive and its impact on Bitcoin. The Criminal Justice (Money Laundering and Terrorist Financing) (Amendment) Act 2021 has been enacted but is awaiting commencement. The intention is to tackle the anonymity aspect but I don't see how this will work in practice given the global aspect of cryptos and the technical ease with which the new rules can be ignored.

Some of the unwieldy regulatory requirements of 5MLD drove some crypto-based startups out of Europe.

In the US, manuchin wanted to place a requirement on exchanges to get all customers to confirm the ownership of the crypto wallet they move funds to. It was stupidity - as funds can be moved on to another wallet - and another wallet.
This sort of thing - the powers that be having their control challenged - is going to be central to the back and forth on regulation over the next few years. They can ban it - or take a really hard line - and drive the innovation that's coming with it out of the country. That's the bind they find themselves in.

A couple of years back, someone here mentioned that crypto would have to fit in with regulatory frameworks designed for traditional finance. That is what many agencies have been trying to do but it won't work. Regulation will need to cater for crypto rather than trying to force compliance that's ill-fitting.

Where does he do this?

The only reference I can find is: "Before cryptocurrency, attackers had to set up shell companies to receive credit-card payments or request ransom payment in prepaid cash cards, leaving a trail in either case. It is no coincidence that ransomware attacks exploded with the emergence of cryptocurrency."

Right there. Added to that, I'll add what I mentioned to @letitroll the other week. Even if there was no other way, you think that hackers won't hack? They'll do it anyway - for the kicks, the challenge, etc. Other than that, this sort of thing is central to how governments are attacking one another these days. Who's to say that the Colonial Pipeline attack wasn't sanctioned/orchestrated by Moscow?

As per the NYTs take on the subject (and what I said last week), if these organisations focus on addressing their network security then there's no question of having to pay anyone with anything.

 

[Firefly]

Right there. Added to that, I'll add what I mentioned to @letitroll the other week. Even if there was no other way, you think that hackers won't hack? They'll do it anyway - for the kicks, the challenge, etc.

But we're not talking about hobbyist hackers are we? We are talking about organised criminals who are in it for the money. How would they paid for their ransomware if not via cryptocurrencies? Sure, they could "set up shell companies to receive credit-card payments or request ransom payment in prepaid cash cards" but it's a LOT more work, would involve lawyers & accountants and leave an easier trail to follow... Adding to this...before the advent of cryptocurrencies, there were hobbyist hackers, but I don't remember criminal ransomware happening much, do you?

Other than that, this sort of thing is central to how governments are attacking one another these days. Who's to say that the Colonial Pipeline attack wasn't sanctioned/orchestrated by Moscow?

But the article relates to ransomware. Do you know any governments who have engaged in ransomware and seek payment?

 

[Duke of Marmalade]

@Firefly your last few posts are irrefutable. I've been in similar positions but learnt not to hold my breath for a climb down.