Steam is no longer supporting Bitcoin(steamcommunity.com) |
Steam is no longer supporting Bitcoin(steamcommunity.com) |
It's sort of off-topic, but in this case there's not much to say about Steam dropping Bitcoin anyway. Maybe it'll hover near the bottom:
What should we do about the destabilizing potential of Bitcoin?
There are two facts about Bitcoin worth worrying about:
1. There is no upper bound on the price
2. Everyone who thought the price won't continue to exponentially increase was wrong
Greed is a powerful motivator.
It's easy to smile at this[1] but it will only take a couple more 10x increases before people stop laughing.
What happens when governments start putting money into Bitcoin because they don't want their economy to be left out? It'll only make the price go up even further.
It might be a good idea to take a step back for a moment and stop thinking "Can I get rich?" and start thinking "Before this reaches a point where we should worry, what should we do?"
I'm aware that this has roughly a 0.1% chance of happening. But if you'll suspend your disbelief for a few minutes and accept "What if it might be true?" then you'll find it's an interesting question worth thinking about.
It's starting to feel like no one really has a plan for this contingency. It will be a relief if the price crashes back to $1k, but Bitcoin defies belief. How many of you have parents that are seriously talking about getting in? Everyone wants to become rich. And if that infectious mindset spreads to the whole population, we might get an uncontrolled upward spiral.
Is there a way to prevent that?
[1] https://www.reddit.com/r/Bitcoin/comments/1lfobc/i_am_a_time...
2. Everyone who thought the price wouldn't* continue to exponentially increase was wrong. So far. But this statement totally forgets the fact that shit changes. Anyone who said Yahoo was overvalued before 1999 was proven dead wrong. But after 1999, they were pretty much dead on.
Everything else you said has a 0% chance of happening. Objectively speaking, Bitcoin will probably never become legitimized by any government. We're just testing how big a bubble gets.
So far.
Want to bet on the price of bitcoin in 1/5/10/25/100 years?
In 100 years I think bitcoin will be worthless.
b) they have the option of using a payment processor that handles ALL OF THE PROBLEMS THEY DESCRIBED on the backend, behind the scenes
c) switch to a different blockchain. they already built the rails, different trains can run on them already.
d) bitcoin futures start trading on Sunday, its an easy way to hedge volatility, so there goes that argument. Professionals in multinational companies know what these are used for.
I don't think that the lightning network will offer a solution. In engineering, problems are always better solved at the root. As clever as it might be, the lightning network is a bandaid patch on top of a suboptimal solution... There are many cryptocurrencies that scale better than Bitcoin in terms of number of transactions.
---> Bitcoin is not money <----
There is no 'economics' or 'finance' or anything at play.
It's Tulip Bulbs without the Tulip Bulbs.
There are numbers, being traded back and forth for money 'because'.
There is no way to price BTC - there are no real underlying drivers - just what your cab driver and the guy in your office is willing to pay in that day - for an arbitrary number.
If anything, it's a study in pop culture, memes, and how information flows through social networks and the media.
It's just a number. That's it. God knows why some people want to pay $10K for a number they can't do anything with ... unless of course they believe, for some arbitrary reason someone else well.
Most bubbles are fuelled by speculation that is a multiplier of some underlying activity. But there is no 'underlying' BTC. So it's a study in pop culture. Not monetary theory.
But there are many other uses of energy that various subsets of people don't agree with, yet, as long as that electricity is paid for, the system keeps chugging along. What we have to fix is that tragedy of the commons, where we dump carbon dioxide in the atmosphere at no cost.
You can use Dollars to do buy zillions of things large and small.
You can use BTC for nothing.
Dollars are backed by assets, not that it matters that much.
So TBills are in fact a kind of 'faith in the governments ability to pay' - but that is a measurable, tangible, verifiable thing.
Euros are generally backed by real estate and other 'high quality' assets.
Most good national currencies are managed that way.
So - the central banks basically control how 'one asset (i.e. real estate) is turned int currency' back and forth, keeping enough currency going so as to allow for economic expansion, and to keep inflation at about 2% and unemployment in check.
At least in theory.
However, getting the transaction confirmed can take many hours at the times of high demand and then it still fails because thanks to the volatility, the transaction fees have gone up in the meantime. That is creating unsustainable problems for the customer support and makes BTC unusable for actual payments.
I think this is what will ultimately bring Bitcoin down (and with it the entire cryptocurrency goldrush, even though the problems are mostly with BTC). Once the currency is impossible to exchange for actual goods or other currencies due to being more trouble to handle than it is worth, it stops being a currency. What good is that one BTC is $12k+ now if you can't actually buy anything with that? People pouring money into this today and talking about BTC being a "store of value" are being seriously nuts ...
If I run a small business, accepting payment in bitcoin just creates risk. The state of my business not only depends on the quality and success of my product/service but also on the volatility of bitcoin because by accepting bitcoin I am forced to effectively take a long position on BTC. The price could crash by 25% before I sell the bitcoin and now I've a cash-flow problem - struggling to pay wages and rent - even though my business is successful in that I made a profit on selling my products or services.
The purchaser of my services is effectively on the other side of this trade and is exposed to the opposite risk wrt to BTC/USD. The only way for the two parties to minimize this risk would be for the customer to convert fiat currency into bitcoin just before paying, and then for the vendor to convert the bitcoin back immediately on receipt. With high spreads and transaction costs, using bitcoin in this manner is incredibly expensive and makes no business sense.
This is precisely what Lightning aims to solve, and at least anecdotally so far, has done so in the case of LTC.
(Though its hard to compare LTC to a chain with a market cap of over $200b even if the former has a skyrocketing trade volume)
In other words, even if you can't go buy clothing or games or hosting with BTC, doesn't the fact that you can exchange it for $LOCAL_CURRENCY (which can be used to buy those things) give it value?
Basically, a meta-currency or currency of currencies, if you will.
Edit: I realize we are saying the problem is a delay and pinning down the real value at a given time, but it sounds like that doesn't matter so much as the volatility itself, which should eventually settle. If delay were really a problem, then I would think stocks wouldn't be a thing.
I am having trouble fathoming why you think that.
How ironic..
People have been saying that for years. It serves purposes other than buying and selling goods, and in fact almost no one uses it to buy things.
It's nowhere near that right now. The total cost for your "median" transaction right now (at 226 bytes) is about $4.30 USD (at 150 sat/byte). Even if you double that to 300 sat/byte you are still at ~$9.
Edit: I'm not saying even $4 fees are okay, just pointing out that it's not $20. I agree with steam's decision here, and it's something that Bitcoin needs to solve before it can really be useful as a payment system.
Volatility wouldn't be a big issue for payments if transactions were instant and free. The addition of slow transactions and high fees on top of volatility is what's causing problems for Valve's customers, which ultimately comes back to Valve as customer service issues. And there's nothing a retailer hates more than customer service issues.
For example, if you own 5 BTC and want to hedge the USD value of your portfolio against BTCUSD fluctuation, you can short 1 CME bitcoin contract (http://www.cmegroup.com/trading/equity-index/us-index/bitcoi...). If BTCUSD decreases, the USD value of your 5 BTC decreases while you gain the same amount of USD on the short futures position, so you have no net profit or loss in terms of USD. If you acquire a bigger BTC position, you can maintain your hedge by increasing your futures short position.
For a big merchant like Steam, at least theoretically, they could accept BTC directly and hedge their BTC position using the futures. Although the granularity of 5 BTC is rather high, for a high-volume merchant that can increase or decrease their BTC holdings relatively quickly, hedging like this should be quite feasible. For example at BTCUSD=15000, 5BTC=75000USD. That means while waiting to accumulate an additional 5BTC=75000USD of revenue so that they can hedge with another BTC futures contract, they are exposed to exchange rate risk. How long does it take Steam to accumulate 75000USD of sales? Their 2016 revenue is said to be 3.5bn (https://www.statista.com/statistics/547025/steam-game-sales-...). That amounts to about 5 hours per 5BTC. BTCUSD could change a lot in 5 hours, but if you're a payment processor with 10x larger scale than Steam or think that the up and down fluctuation should roughly even out over the long run, maybe it's still not too risky to accept BTC.
I'd say it does, but the thing is that if the value is rapidly appreciating today, it might as well be rapidly depreciating tomorrow.
The reason for (2) is that an exchange has two parties. If the value of your currency is cratering, it won't work as a medium of exchange because vendors won't accept it, which prevents trade from happening.
If, on the other hand, the value of your currency is rocketing, it still won't work as a medium of exchange because customers won't spend it. That prevents trade just as effectively.
For example, suppose you need to transfer $10M from the US to China, you'll need a prominent and trustworthy bank on each side of the transaction that will ensure it gets from point A to B. Transfers of this nature often take several days, and each bank will take a nice cut for that peace of mind.
Bitcoin can potentially allow that same money to be transferred in minutes without huge banks on either side.
They stay clearly why they're not supporting bitcoin, it's because the time that it takes to mine the blocks means that often the transaction is processed after the payment gateway times out. And the mining fee is too high to make it viable for consumers.
There’s just a lot more steps in converting bitcoins into something they can pay their bills with.
I'm the original developer of Bitquest[1], where we used to process hundreds of micropayments smaller than 1 cent each day using 0 fee Bitcoin transactions.
When the blocks started to fill up we had to move all transactions off-chain except when players send money to the game and cashing out.
From the player's perspective, it's hard to justify paying $2 each time get Bitcoin in/out of the game. On the other side, there's no cut for Apple, Google, et al. who charge for as much as 30% cut for micro transactions.
I'm now working on a similar game[2] that will take advantage of Segwit and Lightning Network. There's still miner fees involved to send money in and opening a payment channel, however there's no cut to a payment processor and the associated problems of compliance.
I'm not saying it's perfect but there's still important advantages on Cryptocurrency for game transactions and I'm confident that Steam and others will get back to it after it's infancy.
[1] https://github.com/bitquest/bitquest [2] https://hammerco.in
We're absolutely in a bitcoin/cryptocurrency mania. Unfortunately, stating that is much easier than predicting what will happen next.
XRP seems less prone to wild speculation (much to the chagrin of some holders) but, afaik, Ripple are more focused on positioning XRP as a settlement layer for banks and big FX houses rather than as a day to day currency.
Personally, I think all of the above will eventually sort itself out. All the crypto currencies are still very young and the entire space is experiencing hyper growth. Teething issues, design flaws and bumps along the way are to be expected. One thing's for sure though, there's too much promise, money and interest in this space for everyone to give up and decide blockchain/tangle tech can't safely scale. It's just a matter of time before a winner emerges with the right formula.
That means that for every $10 game you bought with Bitcoin during the last summer sale, you now have to calculate the cost basis, capital gains, etc., of the BTC you used, and list it on a Form 8949 in April.
[0] in which sense it is very different from gold, which kept increasing in amount, just (mostly) slowly
Thanks
Try Steem (almost Steam lol), it's meant to do that https://steemit.com their site is a social network where people get pay on Steem that isn't trying to phish for your personal data.
but the degree of volatility has become extreme in the last few months,
losing as much as 25% in value over a period of days
I am so thankful Steam did it right, meanwhile BitPay still blames the customer!
Here are the different threads of where the complain went viral. The internet wins at the end, removing the shady business of BitPay.
https://news.ycombinator.com/item?id=15768303 http://steamcommunity.com/discussions/forum/10/3183345176714... https://www.reddit.com/r/CryptoCurrency/comments/7e7wsq/shad...
That’s really not true any more and so a large part of the value of accepting it has simply disappeared. Really, why should they bother any more?
Only if we remove the withdrawal transactions from the equation, and start trading unconfirmed transactions as regular bitcoins (confirmed transactions), can we get around this limitation (such that only the number of new users joining is limited to 20M per month). I’m somewhat skeptical this can work, though, since recipients of funds usually have suppliers to pay, so I assume that we need to settle on the blockchain at least monthly.
[1] https://runeksvendsen.github.io/blog/posts/2017-10-08-no-bit...
This isn't equivalent to unconfirmed transactions - it's tokens of exchange which directly and provably represent bitcoins. Settling on the blockchain shouldn't even have to happen monthly.
One of the other interesting things is that Lightning Network allows for payment in one cryptocurrency while you hold another by channeling it through a very simple, provable currency exchange. This could behave similarly to, for example, paying for something in USD when you hold GBP - practically automatically. So the lack of scalability in Bitcoin's blockchain might not matter so much - if something else turns up that's better for a given person holding money, they can start using it while still continuing to trade with all the people using Bitcoin.
IMHO, cross-chain transactions like this are one of the most important parts of Lightning Network - suddenly, network effects around a specific currency don't matter so much, people can hold whatever they like - Bitcoin people can trade with Litecoin people who can trade with Ethereum scripts, and when something new that solves more problems turns up, people holding that can still buy VPSes with bitcoin.
[1] https://www.tik.ee.ethz.ch/file/a20a865ce40d40c8f942cf206a7c...
https://medium.com/@lightning_network/lightning-protocol-1-0...
"As developers of the Lightning Network protocol, we’re
excited to announce version 1.0 RC of the Lightning
protocol specification along with a successful cross-
implementation test on Bitcoin mainnet!"Isn't the most important thing you want from a store of value stability? Ie, that it'll store the value that you put into it? Bitcoin certainly doesn't have that property.
And if that's not the desired property implied by "store of value", what is?
For example, if you're on any exchange that lists the total amount of orders in BTC, you can easily catch when the manipulation starts by seeing out of the ordinary sums (triple the amount of usual) for open positions.
Not to mention insane bot activity that is equivalent to a DDOS attack on the exchange.
During the last several hours of IOTA pump, exchanges, even the IOTA tangle were, and still are unstable.
That said, if the trend of wild volatility were to continue into the long term it would indeed prove to be a poor store of value, but market speculation would indicate as such long before we were to get there (assuming we pick now as the period delta starting point for a "long term").
Obviously this is not even noise compared to bitcoin; but my point is that bitcoin has shown to be an exceptional store of value for a long term hold.
Beyond that, I think most people who believe in bitcoin as a long term store of value expect that when it reaches a mature global-level market cap; the swings should be less severe.
Which is absolutely insane. What's the point of a currency if you can't use it for transactions? Store-of-value? What value?
As a store of value, it has many desirable properties. There is a fixed supply, it can be used anywhere with internet access, it is secure, and it is very inexpensive to hold. Gold, for instance, has a large potential supply, is very difficult to move and secure (e.g. vaults, armed guards), and typically requires you to trust a 3rd party (most hold gold IOUs, not the physical bars).
If you accept that there is a demand for such a store of value, then you must recognize the value of cryptocurrencies. There is also a great deal of potential value as technological solutions to the scaling problem are found, as well as new uses for Nakamoto-style networks.
$13K of value, and counting.
The "digital gold" argument doesn't make sense to me at all. Human beings aren't rational spenders. Gold, if nothing else, looks good. I can buy a $10,000 bar of gold and even if its value crashes by 20% tomorrow, I at least have an aesthetic metal that feels nice to touch.
BTC doesn't even give me that satisfaction
IOTA is a Tangle[1], which is coordinated[2] flow, similar to a Directed Acyclic Graph[3]. I'm not sure what you mean when you say "overrun nodes" but by virtue of how the network operates, this should not be an issue unless everyone is sticking with only the default nodes in their configuration, but that delves into a conversation of programmer vs user error that isn't pertinent to this thread. Some of us choose to run full nodes without incurring any speed loss, and it doesn't seem to be much of an issue of not having enough of them, only that people aren't using them. Even still, this has not degraded network performance.
[1] - https://iota.org/IOTA_Whitepaper.pdf
[2] - https://www.reddit.com/r/Iota/comments/792d6c/eli5_the_coord...
[3] - https://stackoverflow.com/questions/2283757/can-someone-expl...
But, yes, at least with IOTA the tech is proven. More nodes will let it scale. I just wonder how they will incentivize these nodes to come in to existence and keep ownership of them reasonably decentralized/well distributed (and make it easy for light wallet users to find and use them).
* though admittedly I don't follow the project too closely - so apologies if some of the above is off-base/wrong.
Ripple the company is focused on that because they don't want to spread themselves too thin, however the currency itself can absolutely be used as a day-to-day currency [1]. Its incredibly fast (transfers happen in literally 2 or 3 seconds), and the transaction cost is incredibly cheap [2] (currently about $0.0003).
For that $2 a transaction is forever recorded on thousands of nodes in a worldwide consensus network, secured by a huge number of miners. Blockchains are not going to scale to visa level numbers of transactions without huge blocks and de facto centralization.
The reasonable alternative is a second transaction layer, the lightning network.
Bingo. Short of it is that consumers don't care. They just want to be able to buy something and have the transaction complete immediately. Whether it's a central payment network, a distributed consensus of 1000s of nodes, or a single "ring" from an in person cash register it's all the same.
At which point, why not use those same layers over USD instead of over bitcoin?
Check out the asymptote: https://estimatefee.com/
1) The mining difficulty automatically adjusts to keep the rate of new blocks down to about 1 every 10 minutes.
2) There has always been a 1 MB limit on how large a block can be.
For a long time, #2 didn't matter, because all blocks were much smaller than 1 MB. But about a year ago, transaction volumes finally rose enough that all blocks since then have been at the max. That means that rather than just taking up marginal bandwidth and disk space, transactions are directly competing with each other for the limited space in each block. That's caused transaction fees to skyrocket.
The question of whether the max block size should be raised has been extremely controversial in the bitcoin world, and the "bitcoin cash" fork was primarily focused on this question.
Bitcoin doesn't scale in its current form [0].
0. https://en.wikipedia.org/wiki/Bitcoin_scalability_problem
Maybe you're thinking of how when more people are mining, it becomes harder to mine. This is because there is a global fixed rate of Bitcoin creation. Every 10 minutes, 12.5 new bitcoins come into existence. Miners are effectively competing for the chance to be the one to receive those new bitcoins. If mining becomes unprofitable, then some miners will drop out, causing it to become more profitable for those remaining. Miners don't set prices or rules; price affects profitability which either causes more miners to mine or some to drop out.
If transaction volume (and fees) stayed constant, then as the minting rate goes down, there will be a lower reward for blocks, and some miners will drop out of mining because it's not profitable for them. Miners dropping out will lower the mining difficulty, so the remaining miners will get a bigger cut. The system finds an equilibrium. Mining profitability only affects the mining difficulty and miners themselves (and the amount of resources necessary for a 51% attack, but as long as that remains obscenely high then the specifics don't really matter in this discussion).
How is the bitcoin community rationalizing this seemingly inescapable mathematical failure?
Bitcoin is no more a store of value than tulips were. Bitcoin is a speculative product, not a store of value.
Gold has been valued since, I don't know, before the Greeks. What are the chances that tomorrow gold will go completely out of style (say gold will be worth no more than copper)? What about BitCoin? Can you put money in BC and hide it away?
http://www.macrotrends.net/1378/dow-to-gold-ratio-100-year-h...
In 1917 it was about 5, now it's about 15. So threefold increase in a century.
Plus the Dow pays around 2% dividend per year which is 7-fold increase in a century.
So US stocks outperformed gold by 21 times between 1917 and 2017.
Looking at the chart, there are very few long-term periods when gold has outperformed US stocks.
Exchange how? Your entire argument assumes a functional BTC eco-system (and exchanges with willing counter-parties).
Without usefulness in transactions BTC's only value is whatever is agreed on. And in the absence of a use that is worse than fiat currency - at least that has legal backing rather than just agreeing that BTC has value as a value store.
It's the essence of circular logic: BTC has value since it is a store of value and since it's a store of value it has value...
>If you accept that there is a demand for such a store of value, then you must recognize the value of cryptocurrencies.
I do - just not BTC. Anyone sane will store their value in something that has an actual shot of being grounded in real world transactions. So ETH or whatever is a far better bet.
https://storeofvalue.github.io/posts/cryptocurrency-hacks-so...
The only major online retailer that actually keep their own BTC is Overstock.
Wallet developers and payment portals gets a lot of flak for overcharging fees, but ultimately it is still preferrable to using a conservative estimate and deal with the likely support call when the payment fails to confirm, and there is nothing they can do but watch it get bounced between nodes.
So essentially in these use cases you are just offsetting the chain of custody a few steps later.
And the fact that there's a limited number of transactions that can be processed in a single block, and competition between miners to validate transactions as quickly as possible, complicates things.
It should be a medium of exchange, but for now its a speculative gamble.
With bitcoin in the example I gave earlier, the only currency required by both local exchanges would be Bitcoin, simplifying.
Technically this use is still likely to be illegal.
That's where traditional electronic payments have a huge edge -- instant, incredibly cheap guaranteed verification.
I want internet money. I want to be able to send money to anyone, anywhere in the world, at the drop of a hat, as easy as email. I don't care about speculation or getting rich or avoiding taxes or sticking it to the man or anything like that. I just want to have a convenient way to get tipped on IRC by anyone at any time and to be able to repay in kind, to anyone at any time.
The issues with PayPal have mostly been interfacing with fiat currency, which any system will have to deal with, and transaction fees, which any system will have.
The real problem IMO is the lack of a de-facto service that everyone all around the world has, and we're kind of in this position: https://xkcd.com/927/
Having family and friends in different countries who use different currencies, let me tell you, Paypal is not the solution I want.
Real currency has a federal reserve to balance supply against demand and keep the value steady.
BTC has entirely demand-driven value-- which is precisely as steady and predictable as the human mind.
Financial stability seems like a secondary concern that cannot be solved via computer code but might instead require other kinds of human codification, perhaps legal.
Which LTC wallet support LN in production?
* They don't transact bitcoin.
* They don't transact your (non)bitcoin in a decentralized way. They alone run the software and are in control of changes and restrictions, including who you're allowed to send to.
* You don't hold the private keys to your (non)bitcoin when it's a bank or VISA or Paypal. They own it for you. They can lock your account and maybe give you the privilege of putting yourself through some asinine process to regain access to it.
The lightning network is a "second layer" that still is decentralized and puts users in control of their own funds.
And bear in mind, my original point is that bitcoin is moving away from the original intent.
Or should I be parsing the phrase to mean "It's not anything today, but in the long term, once the market cap is large enough, it'll be a store of value"?
(I'm not being snarky; I'm legitimately confused by what people mean by the phrase.)
I am being snarky: They mean "you better hurry up and buy some bitcoin quick, so I can have some new bagholders"
doesn't tether fix this?
https://coinmarketcap.com/currencies/bitcoin/#markets
for example, bitcoin is now huge on bithumb, I'd buy it at bitstamp and sell it for 10% more, and repeat. given the slow transaction times, huge fees, large mempool, this is impossible to do.
exchanges also ban you for trying to do arbitrage too, so there's a risk of losing all the funds.
It's also not impossible to trade via bitstamp and bitthumb, sure it may take an hour or so to get your btc from bitstamp to bitthumb but that's not the bottleneck. Once you sell on bitthumb for USD you need to get that USD back to bitstamp. So you have to get it from a Korean Bank to your own account and then to bitstamps European bank account. Best case scenario that route takes 5-10 working days so the BTC network taking an hour or so to confirm is the least if your problems.
However, I think the OP is correct that if it becomes mainstream, 20M transactions a month will not be enough. Lightning requires 2 transactions -- one to reserve the funds and one to settle up at the end of the period. The transactions cancel if you do not settle up, so setting that period of time is vital. If you set it to a month (probably reasonable), then you are basically limiting the service to 10M users (assuming the OP's estimate of 20M transactions a month is correct -- I haven't checked).
So I think it's pretty obvious that you are going to have to do something else
In the very long term, if we get to a point where most people's and organization's income is roughly equal to their expenditure, then this won't be a problem, but until then there is still pressure to settle on-chain because of this.
They certainly can if their lawyer is also on the Lightning Network.
Eventually all Bitcoin wallets should support on-chain and Lightning Network transactions, and seamlessly pick one or the other depending on the transaction amount.
The problem is fees. If this rational actor has 10,000 proofs of payment from as many different people, then the settlement transaction might require the redemption of up to 10,000 inputs, which would make payments prohibitively expensive. It may even be impossible to settle in a single block, since the transaction (including dependencies) might exceed the maximum block size.
A proof that 0.001 BTC can be withdrawn at any time isn’t very useful if the cost of withdrawal is 0.001 BTC.
In other words, LN surely has the value transfer part solved. But I don’t see how it solves the clearing part, that is: grouping multiple payments from different clients into a single, low-fee Bitcoin transaction. I understand how fees are saved on multiple payments from the same client (that’s what a payment channel does), but not how it would work with payments from many different clients (which is what merchants need to handle).
Are there other cryptocoins that are built on protocols that avoid having to have this extra layer on top to make them scalable? I imagine the more complexity that is added, the more scope there is for security, implementation and scalability issues so you want to keep things simple.
It's really not that complicated, especially from the average end users perspective.
A stable currency is far more usable to me. Bitcoin is very similar to gold at the moment, in that I'm as likely to use it as I am to carry around bricks of gold in my pocket. For different reasons, sure, but the net result is the same.
So if something has been rising for 6 months, it cannot dip below that point, because of your opinion.
Too bad we did not have your opinion in 1929 or 2008 or 2013 (Mt Gox). Would've saved us.
How about businesses like Steam ditching Bitcoin support?
How about Bitfinex not backing up their fake currency called tether?
https://twitter.com/bitcoin_pizza
I’ve noticed this trend lately of rewriting what Bitcoin is for because I assure you, it was presented as the new cash for a long, long time. We were supposed to see Bitcoin ATMs and paying for daily sundries with Bitcoin. Then that became difficult, we are starting to see the brave adopters drop out of using it that way, and suddenly it’s an investment vehicle and store of value and nobody really buys anything with it and that’s been the intent all along.
People were saying those things for years because Bitcoin proponents were telling us. It’s not like people arrived at that conclusion erroneously.
Right now the core Bitcoin dev team have gone one way, so the "currency" side of the debate have largely moved to alternatives like Bitcoin Cash, Litecoin etc.
The current backlog of transactions on the main Bitcoin chain is down to the artificial block size limit. How far on-chain scaling will stretch is unclear, but the core Bitcoin network could easily process more transactions if the block limit was increased.
People who have been involved with Bitcoin from the beginning are not trying to change it's definition. It will 100% be digital cash in due time. The reason it's taking so "long" is because the dev team cares about keeping it decentralized and doesn't throw sloppy code out and end up forking it later like many other alt coins
In any case, the internet was designed as a communication medium that could survive nuclear war. That's how it was sold by its proponents. So what.
Define reputable.
> Announcing the first release of Bitcoin, a new electronic cash system
http://web.archive.org/web/20090131115053/http://bitcoin.org...
> Instant transactions for points-of-sale
http://web.archive.org/web/20130805223235/http://bitcoin.org...
(That verbiage lasted most of 2013, but was removed a couple days after this capture, presumably because payments were starting to become less "instant.")
> Bitcoin is a new payment system, independent from the traditional financial sector, and this could provide resilience to the economy in case of a crisis, as it creates a parallel payment system.
Understanding Bitcoin: Cryptography, Engineering, and Economics by Pedro Franco, 2010, pp. 26.
> You can purchase video games, gifts, books, servers, and alpaca socks. [...] Bitcoins are a great way for small businesses and freelancers to get noticed. It doesn't cost anything to start accepting them [...] and you'll get additional business from the Bitcoin economy.
https://www.youtube.com/watch?v=Um63OQz3bjo
Bitcoin has literally been presented as a replacement for cash payments since day 1. I could go on, and on. That history is now being rewritten, and I think it’s important to understand why. Bitcoin set out to do one thing, is failing at that one thing, and I’m discouraged to see people rewrite the narrative rather than own it and say it didn’t work for that.
And you've mixed up your history: the research grants into the Internet were funded for that purpose, but it quickly morphed into an alternative usage once the new abilities were seen. Nobody went out and pulled out full page newspaper ads with that intent for its design, or otherwise heralded the Internet as such.
BTC doesn't do its original job, and the current value on it, aside from idiots looking for a get-rich-quick scheme, seems to be that it will eventually do its original job.
Which means it's a gamble if that will ever work.
The protocol doesn't matter, mempools aren't validated or shared[+], and so the validity of the chain isn't challenged by processing the higher fee.
So given that the bitcoin network is designed to be operated by greedy miners, surely one would break with "tradition" and process the second?
You might have to dig to find a route to those nodes but it should surely be possible.
[+] They're not shared as in shared-state, i.e. sync'ed.
But it's playing with fire to rely on that, because without opt-in RBF it's far from a sure thing.
I argue it's not convenient for IRC tipping simply because 1) software is not well-integrated for minimal clicks 2) the other person might not have PayPal.
Don't get me wrong, I don't love PayPal, but I don't think Bitcoin brings anything really fundamentally important & new to the table, except maybe the decentralized part. Though, I suppose you could argue the decentralized nature of email was key for its universal adoption today.
You can insist that they charge you in the same currency as you wish to pay with and your bank will do the exchange at an order of magnitude lower fee. Not everyone knows this. The user interface also doesn't make it very clear (which perhaps surprised no one).
I transfer money to my mum in the UK once a month from my Australia debit card and its in her account within minutes, and the fees are far lower than a bank transfer.
As for transfer times for BTC not being a problem, 1 hour is a gamble in cryptocurrency world.
And how exactly will it become more prevalent when it can't be used for transactions.
Just like Gold, coloured beads, or stocks
> can't be used for transactions.
Gold is a pain to use for transactions, and so are shares, but they still store value and people continue to speculate on their future worth?
BTC in the absence of transactions has not tie-back to anything.
If you're speaking of stock dilution, there is a hard-cap on the number of BTC in the wild and a hard-coded granularity (as I understand it) where a satoshi is a hundred millionth of a Bitcoin.
It's a bit like buying one pen out of a very large pack of pens. You don't own the pack if you only buy one.
I incorporate with 1,000,000,000 shares of stock. I sell 20 shares of stock to my good friend for $50. Is my company now worth 2.5 billion dollars?
The answer to this worry is that the value of the good (bitcoins or stock shares, or anything else) is reliable in proportion to the total trading volume, not in proportion to the amount one person typically buys in a single transaction, or even the amount that one eccentric rich guy bought that one time when he was drunk.
All other fiat currencies have some fundamental value. In the past they were backed by gold. Most common today, you have to pay your taxes using them, which means for example everybody who owes US taxes needs USD.
That makes no sense. If the market were really 'screaming there is no actual value', the price would be around $0, not $14K.
1. Dividend payments
2. The expectation that someone else will want the stock more in the future. (Often for reason #1.)
Financially, there is no other logical reason to possess stocks. It was part of the larger lesson that companies often perform irrational actions because they are made primarily out of people.
BC has none of those advantages.
Acceptability
Durability
Divisibility
Stability
Portability
(Elasticity)
If it spoils or decays within your lifetime it's not a currency.
If it's not something you can divide in order to make payments of a more-or-less arbitrary amount, it's not a currency.
If you can't predict how much of the asset you will need to pay your bills next month, it's not a currency
If you can't bring it with you to the place where the exchange takes place, it's not a currency.
If you can't obtain capital investment in a currency because the currency itself is more valuable than anything you could produce, then it's not a (good long term) currency. This last one is in parens because it one only matters in a growing economy. A deflationary currency can still otherwise function as a viable medium of exchange, but eventually, lack of availability for new entrants will mean that entrepreneurs will begin looking to do business in alternate currencies.
Back in the hyperinflation days, we couldn't predict how many Cr$ we would need to pay our bills in the next month. That didn't keep it from being a currency.
Though I do personally think there's a lot more to a currency than that.
The gold standard was abolished because the economy was on the brink of collapse. A dollar grossly mismeasured the value of an ounce of gold, because there were far FAR mare dollars than gold to back them, and the mapping of gold to dollars was not adjusted at all (from $35/oz) despite the discrepancy growing and growing for decades. In a sense, each ounce of gold was being double-counted 100 times over by so many dollars floating around in the economy. That situation was horribly unstable, because it was at huge risk of a run on gold (You'd have a lot more wealth if you exchange your dollar for gold; because of the aforementioned double counting, an ounce of gold actually corresponds to a great many dollars. If everyone had realized that and done it, the economy would have been toast).
Disconnecting the dollar from gold allowed the value of an ounce of gold to be correctly measured. So while other prices in the economy remained stable, gold shot up, because now the market was free to price it accurately (reflecting that the economy had grown far faster than the supply of gold). That doesn't indicate inflation, it precisely illustrates how dangerously out of whack things were before the gold standard was lifted.
Ethereum, the supposed answer to bitcoins problem has just recently began to see the exact same problem. Why? Because of a dumb kitten game - what happens once even a single ICO finds an moderate amount of user base?
These are early times friend
“Lightning Protocol 1.0: Compatibility Achieved ” https://medium.com/@lightning_network/lightning-protocol-1-0...
That's both cheaper than and faster than bitcoin.
(And this isn't a cost hidden in a perk of a monthly fee, there's no monthly account fee either.)
I'm pretty sure if Satoshi re-appeared "he" would be lamenting those artificially keeping the blocksize small. The 2MB limit was put in as a temporary solution to a problem of too many worthless transactions. Bitcoin has the opposite problem now.
Not to mention that the currency's extreme volatility means that when you sell it to convert it to greenbacks (the currency your investors actually care about) it probably won't be the same amount you were paid for.
But there are some really cool solutions being worked on right now for this problem in bitcoin that can make it scale to a similar way to Visa. But they aren't here yet (and some might turn out to be nonviable). Lightning network would allow Visa levels of transactions per second, at basically zero or next to zero fees per transaction for the majority of them.
The privacy info is valid, but BTC isn’t private either and people are connecting identities to purchases all the time. Not to mention 99% of the time I must give my info to the merchant so they can mail me whatever I purchased.
That said, I can't currently put my EMV card into a card reader on my computer and purchase things online. However, many credit card networks have created tokenized payment systems, where the merchant redirects you to your bank, the bank authorizes you and validates the single transaction, and then redirects you back to the merchant with the signed transaction information. Not many merchants use these systems yet though.
any merchant that commits that sort of fraud repeatedly will have their account terminated
Sure but that is Visa's problem not mine.
With Bitcoin it seems fees are both ridiculously high, plus I can't even tell what I am going to be charged?
Since TX fees go to miners, they are incentivized to pick the transactions with the largest "fee per size" to include first to maximize their profit (though they aren't required to do so).
So basically you can envision all transactions as a stack, with the highest fees at the top. Once a block is found, it takes the top ~1MB worth of transactions, and the cycle repeats. [0] is a good visual representation of this.
Unfortunately this means there isn't an easy way to determine what fee will absolutely get you included in a block before it's mined, since if thousands of transactions show up with higher fees than yours after you (but before a block is mined) yours might not make it in the next block (even if your fee was the highest when you made the transaction).
It's a tough problem to solve, but there are some solutions being worked on to help solve this problem for the vast majority of bitcoin transactions.
Might be a nitpick, but you mean the miner puts as many high value transactions as they can fit into a block and then searches for a valid hash?
The problem is that there are now so many transactions that are attempting to get through (And there is a maximum number of transactions that can be placed in a single block) that miners can be more selective. At this point your transaction is unlikely to get through without a minimum fee/bribe being provided because there are enough transactions with fees already at or above that level.
The number of transactions that can fit into a block (ie. "clear") is roughly fixed. The rate at which new blocks are added (ie. "clearing rate") is roughly fixed. Traders effectively bid for clearing via the transaction fee, and the highest bidding transactions are accepted.
In order words: supply of transactions is effectively fixed, and demand for transactions determines the fee.
There is work going on to enable external clearinghouses called the lightning network that will fix this problem, but that work isn't ready yet.
Nonetheless, for any of the "commonly traded and indexed investment securities we all talk about colloquially as 'stocks'", the daily trade to capitalization ratio is routinely an order of magnitude higher than bitcoin.
But your answer, I don't think is sufficient. Just because total trading volume supports the figure doesn't mean that it's valid. If I've invested a small amount of money into the currency (as I suspect most of its buyers have), I've essentially bought into an insane price for little or no "skin". In other words, the price could be high simply because there's no risk to it being that high for most of its investors.
Going back to the analogy, suppose I incorporate with 1,000,000,000 shares of stock and sell 20 shares to my friend for $50. He forgets about them, because after all the whole thing was just a joke.
My company has a market capitalization of $2.5 billion, of which I own $2,499,999,950. That paper wealth is worthless, because the daily (or whatever) trading volume of stock in the company is $0, suggesting that if I tried to realize my immense wealth, I wouldn't be able to.
Suppose instead that I sold 500,000 shares to my friends for $50 (total - 10,000 shares to the dollar), and that they sold the shares on to the public, and that now 10,000 shares trade per day at $2.50 per share.
My company has the same market capitalization of $2.5 billion. I own $2,498,750,000 of that (plus $50 of cash!) -- not as much as I had in the first example, but still pretty good. Just as in the first example, the daily trading volume suggests that this wealth is mostly illusory -- the tiny $25k / day market will be quickly overwhelmed if I try to sell $1 million worth of stock, and the trading price will plummet. However, unlike in the first example, my wealth is not entirely illusory. If I try to pick up an extra $5,000, I'll probably have to sell more than 2,000 shares of stock, but the trading volume can support that amount.
As long as there is active trading at a price, that price is real. There is no such concept as trading enough of a bitcoin for the price of "a bitcoin" to be "real"; what matters is whether you're trading enough of the market to move the price single-handedly. If the amount that you want to trade is much less than trading volume, you can more or less rely on the market price. If you want to trade an amount which is noticeable relative to trading volume, you're going to change the market price.
Put another way, if bitcoin trade volume is 100,000 bitcoins per day, you can sell one bitcoin at the market price even if nobody ever buys or sells more than .00001 bitcoin in a single transaction.
Whenever you make a transaction in bitcoin, you point to the previous balance you have from a previous transaction, then you say how much you are sending to what address.
The "fee" is the difference between the amounts.
So if I have 1 Bitcoin, and I send .9 to you, the fee is .1
If you want to make sure you keep some Bitcoin, you just send it to yourself.
So 1 have one, and I send .1 to you, and .8 back to me, the fee is .1
Then when a miner mines a block, any unspent money is now theirs, and they claim it via the address they liked for.
Technically the miner needs to know what they are going to be including in a block when they begin trying to find a valid hash, but for the sake of explanation I generally switch it around for simplicity.
There is some compression at a storage level after blocks have been created, but it's not all that important. Pretty much all the data in Bitcoin is very difficult to compress with most of it being signatures, transactions, and addresses all stored in a binary format. The random nature of encryption makes it difficult to compress, and the formats have already been "hand tuned" for minimum size in many cases.
Every so many blocks, the number of new Bitcoin handed to the miners is halved, and eventually it will drop to zero. When that happens, the only incentive for miners to continue mining (And thus keep Bitcoin going) is the fees collected from the transactions. So required fees are only going to go up.
There are solutions being worked on, but they are not ready for primetime yet.
So ideally there will be more traffic but less congestion
https://en.wikipedia.org/wiki/Single_Euro_Payments_Area#Cove...
As a means of payment in the SEPA region, Bitcoin is far worse on cost (free vs $5-10 in my experience), and sometimes worse on speed (1 - 1.5 business days for SEPA to clear).
So in this geographic area, Bitcoin is literally losing to a combination of the legacy banking system, and a huge, multi country, multi lingual, somewhat unwieldy bureaucracy.
Which shows how pathetic the main development team behind Bitcoin is (the core team). The fact that they haven't managed to fix problems that are years old and steadily getting worse is inexcusable. It should be a walk in the park for them to out compete a massive, political entity like the EU and the traditional banking sector.
I hear you on the "strange places", that was where BTC was supposed to shine. It hasn't made any inroads into underserved markets that I'm aware of, e.g. less well-off countries and unbanked people. That is a pipe dream as long as the fees are so high to move funds around.
Vs with bitcoin it's push. You decide how much you are sending to the merchant, and if it's not enough, they don't deliver the goods/services.
But this has completely gotten away from the issue I was talking about (i'm in a shitty mood today and let myself get sucked into internet arguments).
Bitcoin has problems, and those problems aren't going to be easy to solve, but it's ability to change over time means they can be solved, and I really believe that it's a better way of sending money online.
The "pull" method that banks have used for years is a mess, and I truly believe that the core of bitcoin is valuable and useful over the traditional system.
the push/pull problem has been solved for a decade, and not by bitcoin
Even if I push my money to you, you have my address that you can pull from later if you want.
And you are correct that bitcoin's ultimate goal is to have mining income come solely from transaction fees eventually. But by that point the hope is that "second layer" systems will take the brunt of the transactions and the actual core blockchain will only be a settlement layer where a $500 fee is no big deal for 2 banks settling hundreds of millions of dollars directly on the blockchain.
So if a fee is 150 "sat/byte" or satoshi's per byte. A satoshi is 0.00000001 of a bitcoin.
So if your transaction is 250 bytes (which is average for a single transaction to a single person), then you will pay (250 * 150) satoshis (37500 sat), which is about $5.
If your transaction is larger, you'll pay more, if it's smaller, you'll pay less.
But they are "ranked" in terms of who is picked first by "sat/byte" since the amount of room in the block is only 1MB.
So a 500 byte transaction with 37500 sats in fees is worth less than a 250 byte transaction with 37500 sats in fees, because the 500 byte transaction takes up more room that other higher paying transactions could fit in.
A one-time use CC# by nature can't be abused. And any merchant that attempts to issue fraudulent charges starts to run into legal and regulatory frameworks that issue punishments to anyone who has repeat violations. Punishments that range from being kicked off of a payment processing system all the way up to jail time.
Since then, I almost never see BTC as a payment option.
You'd be an idiot to pay for any service with Bitcoin. A million dollar pizza makes for a great news story, but it would suck knowing that you effectively let go of millions of dollars just to buy a pizza.
Bitcoin holders are disincentivized from spending it.
Well, the parent comment said "if the transactions were quick", meaning that you would exchange the bitcoin for something else as soon as you received them (within a second or minute, say).
Assuming they are really fraud and aren't just a "free trial" expiring, aren't a contractually-agreed upon price increase hidden in fine print, or that the cardholder saw the fraud and reported it within 60 days.
Not to mention now the cardholder is now unable to use the card if fraud is found, and needs to wait for a new one to be sent via mail. It would suck if the credit card thought getting gas out of state was fraud, and they canceled your credit card on the first day of a week long trip (happened to me, I had to borrow thousands from a friend for the length of the trip...).
in the UK I can walk into my bank branch and have my card replaced on the spot, so I don't really see that as a problem, unless you're abroad (and if you're abroad with only one card you should probably know better)
Then I can call the bank, tell them I didn't make that transaction, or I didn't agree to it, and if i'm lucky they will refund it right away, then investigate. I then need to follow up on that investigation because if they find for some reason it's not "fraud", then they will recharge me that at a later date, so I need to keep up on it until resolved.
And no matter how easy it is to get a card replaced, it's work that I shouldn't need to do.
I'm not saying that Visa is "broken", or that Bitcoin is the only way forward. But I am saying that I think Bitcoin's core values are better than the current system. And that one day Bitcoin will be easier, more secure, more private, and just as usable as Visa.
Hopefully one day we will look back on the way current payment processes are run and it will seem as terrifying and stupid as if you were required to leave a copy of your car keys at every single parking lot you parked in.
Of course, it's a finite resource and mining it involves dynamiting mountains and cyanide poisoning the environment, but then again Bitcoin mining currently consumes enormous amounts of energy and it can only grow from here. Also countries with no gold reserves have been at a disadvantage, but then Bitcoin mining will require enormous resources as well and countries without those resources will remain at a disadvantage. So personally I don't see any benefits whatsoever.
If I had wealth to store, I'd invest in property simply because properties have intrinsic value. And yes, I'd still buy gold before Bitcoin or any other currency for storing wealth long term.
Bitcoin is currently only useful for speculative gains and I don't see that changing.
Bitcoin is a classical ponzi, you don't have more than few bytes of otherwise meaningless data, and only emotions are keeping the value so high. And as we know, emotions change.
Don't insult gold. It will be around long after Bitcoin will become just another part of history.
Note that this gives you a maximum gain of whatever BTC/USD is today (assuming you denominate in greenbacks), while upside risk is theoretically unlimited.
Of course the lender has to trust or be ensured (or insured) that you will repay.
There must be people using Ethereum contracts to make options on BTC, and maybe trying to minimize counterparty risk through the judicious use of open-sourced smart contracts and digital collateral? Anyone know of interesting cases?
Apparently they will list on 18 Dec on CME, and 10 Dec on CBOE.
I get the feeling that there will be a fair bit of selling pressure as a result. That's usually the case on lockup expiries and it would make sense for the initiation of a volatile instrument that wasn't previously shortable on a listed basis.
I wonder how hedging transactions will affect the mechanics of the bitcoin market.
Sally and Bob each have 1 Bitcoin. Sally received her bitcoin to a single address. If Sally wants to send that 1 Bitcoin to Charlie, that transaction would have 1 input (the address she received it on) and one output (the address Charlie wants to receive it to). Bob has 1 Bitcoin total, but his 1 Bitcoin came from 4 x 0.25 transactions. Bob didn't want to reuse addresses, so for him to send 1 Bitcoin to Charlie he has a transaction with 4 inputs (each address which contains 0.25 BTC) and 1 output. Thus, Bob's transaction is much bigger than Alice's, despite the same amount of Bitcoin being sent.
The bitcoin market is astonishingly shallow compared to most commodities and nearly unregulated, I assume hedge funds and other smart money can and will manipulate the price up and down to their own advantage.
According to some blockchain site[0] the average transaction volume for BTC is something like $2.25m USD equivalent
For comparison, on an average day, SPY[1], which is just one security (albeit a popular one) trades something around $17,160m (e.g. $17.16b).
[0] https://blockchain.info/charts/estimated-transaction-volume-...
Sure, but there are also laws and regulations that limit what you can do with stocks on a real exchange: https://en.wikipedia.org/wiki/Microcap_stock_fraud
> won't this problem go away as BTC gets more popular?
Maybe. It would have to get a lot more popular, and a lot more legitimate and regulated. At that point, it's lost all the cyberpunk appeal, and it's just another speculative asset.