Blockchain update

[patrikkorda]

Re: Blockchain update

If you just want fast cheap transactions, get a database. No need for blockchain.

Interesting considering XRP is the only digital currency out there with a specific use case: to replace SWIFT - a use case which you yourself admitted can reduce costs by hundreds of billions. This all comes back to what the early adopters of bitcoin failed to see: the average person isn't a paranoid libertarian - they do not care whether a digital currency is decentralized. Early bitcoin bugs laughed at gold bugs for being archaic, but at this point it should be obvious that bitcoin bugs are themselves archaic. Bitcoin fails on anonymity, fails on scaling, wastes an enormous amount of energy, and is too big at this point to alter - it is a dinosaur.

XRP will be useful in reducing transaction costs and increasing transaction speeds for international payments (something bitcoin claimed it could do before rebranding to gold 2.0).

The reality right now is that everyone that is potentially wrong is in fact still a winner. In a multi-asset mania, everyone is temporarily right, and it's not possible to see who in fact picked the long term winners until much time has passed. I.e. .COM bubble.

I have already sold the bulk of my XRP - since the scalability debate has already happened. I believe the next debate will be around fungibility.

[DSpencer]

Re: Blockchain update

Interesting considering XRP is the only digital currency out there with a specific use case: to replace SWIFT - a use case which you yourself admitted can reduce costs by hundreds of billions. This all comes back to what the early adopters of bitcoin failed to see: the average person isn't a paranoid libertarian - they do not care whether a digital currency is decentralized. Early bitcoin bugs laughed at gold bugs for being archaic, but at this point it should be obvious that bitcoin bugs are themselves archaic. Bitcoin fails on anonymity, fails on scaling, wastes an enormous amount of energy, and is too big at this point to alter - it is a dinosaur.

XRP will be useful in reducing transaction costs and increasing transaction speeds for international payments (something bitcoin claimed it could do before rebranding to gold 2.0).



I have already sold the bulk of my XRP - since the scalability debate has already happened. I believe the next debate will be around fungibility.

Which currency do you believe is positioned best with regard to fungibility?

[patrikkorda]

Re: Blockchain update

Too many guests.

[jk]

Re: Blockchain update

http://www.visualcapitalist.com/vide...ated-timeline/

strongly recommend the animation here. it's slow at first...

[jk]

Re: Blockchain update

recommended, column by josh brown of the ritholtz group

http://thereformedbroker.com/2017/12/14/a-twist/

[patrikkorda]

Re: Blockchain update

recommended, column by josh brown of the ritholtz group

http://thereformedbroker.com/2017/12/14/a-twist/

I agree. While bitcoin cannot be hyperinflated in name (there will only be 21 million), it will be hyperinflated in substance. The network effect was broken earlier this year in March thanks to the 1MB blocksize limit.
https://coinmarketcap.com/charts/#dominance-percentage

When I was arguing with bitcoin bugs about this in 2013, I was told there is nothing to worry about because the code could always be updated (soft fork) or it can be resolved via a hard fork. I then quickly proceeded to invest into ripple (XRP).

After the next crash, I will invest into a fungibility related digital currency.

[Morgasbord]

Re: Blockchain update

After the next crash, I will invest into a fungibility related digital currency.

From my reading of crypto coin "fungibility", fungibility seems good for users, promising the anonymity they thought bitcoin had. But this feature is bad for governments; governments have an incentive to support traceable blockchains. So it seems to me governments are most likely to crack down specifically on fungible coins, most likely at the entry/exit points between fiat and fungible coins to prevent black markets and capital flight.

Are you then just playing the 'conversation' highs and lows, or are you betting long term that fungible coins will defeat governments?

[patrikkorda]

Re: Blockchain update

From my reading of crypto coin "fungibility", fungibility seems good for users, promising the anonymity they thought bitcoin had. But this feature is bad for governments; governments have an incentive to support traceable blockchains. So it seems to me governments are most likely to crack down specifically on fungible coins, most likely at the entry/exit points between fiat and fungible coins to prevent black markets and capital flight.

Are you then just playing the 'conversation' highs and lows, or are you betting long term that fungible coins will defeat governments?

Fungibility is a key concept of money and has been recognized as such since at least Crawfurd v. Royal Bank (1749). If some governments do crack down on fungibility coins via entry/exit points, it will (1) make the news (this thing feeds on news) and (2) make it more expensive by increasing the cost of entry. Certainly not ideal from a user perspective but not bad from an investment perspective.

With that said, I do not think any coins will "defeat governments". My position since the beginning (hence my XRP investment) is that most people are not paranoid libertarians - the potential market is much bigger. If these things have any value whatsoever the most paramount aspect is scalability, the front-end experience, and the back-end horsepower. With that being said, I also understand the view that Adeptus has expressed - having a centralized blockchain defeats the point of a blockchain to begin with for many potential users. Ripple may get a lot of institutional clients who could care less about a central point of failure, but a decentralized and completely fungible blockchain also promises a ton of value for individuals.

I simply think it is a prudent idea to have what Chamath Palihapitiya refers to as "shmuck insurance". In other words, if the world goes to hell, you can travel with a substantial amount of value without having to worry about being robbed. And, if the world doesn't go to hell (more likely and more welcome) the fungibility debate will happen sooner or later. Ironically, fungibility is something the good players should want just as much as the bad players in a system notorious for sketchy transactions.

[vt]

Re: Blockchain update

Some have made a huge profit in bitcoin; about 23% of bitcoins have disappeared by hacking or error for unlucky speculators.

I look at bitcoin as being like the dotcoms of the late 90's. However blockchain is like the internet, and may be where the real long term money is made. Where does the forum see the best opportunities in blockchain. A number of companies have been involved at early stages. How can we profit from this?

There is a long term problem with Bitcoin as a medium of exchange. This is a paraphrase of what James Rickards thinks:

"Bitcoin has major drawbacks as a medium of exchange. It is not elastic like gold. There is about a 1.6% increase in the global supply of gold, which is slightly below economic growth.

Bitcoin supply will soon max out as it hits it's limit of 21 million coins. But it may not get there because of the massive computing power necessary and the enormous use of electricity used, more than some nations use, to solve the difficult problems of validating transactions in the blockchain.

In order for bitcoin to be a store of value you need a place to invest in it such as bank deposits and bonds. But bitcoin has a deflationary bias and no borrower wants to pay back a loan in more expensive dollars. Thus bitcoin cannot grow by creating a credit market, nor grow beyond the set limit.

Technology will also destroy bitcoin, which relies on encryption to preserve confidentiality and anonymity of it's transactions. In the near future quantum computing will be able to break any encryption available. So much for protecting your privacy ."

[Adeptus]

Re: Blockchain update

Some have made a huge profit in bitcoin; about 23% of bitcoins have disappeared by hacking or error for unlucky speculators.

I look at bitcoin as being like the dotcoms of the late 90's. However blockchain is like the internet, and may be where the real long term money is made. Where does the forum see the best opportunities in blockchain. A number of companies have been involved at early stages. How can we profit from this?

There is a long term problem with Bitcoin as a medium of exchange. This is a paraphrase of what James Rickards thinks:

"Bitcoin has major drawbacks as a medium of exchange. It is not elastic like gold. There is about a 1.6% increase in the global supply of gold, which is slightly below economic growth.

Bitcoin supply will soon max out as it hits it's limit of 21 million coins. But it may not get there because of the massive computing power necessary and the enormous use of electricity used, more than some nations use, to solve the difficult problems of validating transactions in the blockchain.

In order for bitcoin to be a store of value you need a place to invest in it such as bank deposits and bonds. But bitcoin has a deflationary bias and no borrower wants to pay back a loan in more expensive dollars. Thus bitcoin cannot grow by creating a credit market, nor grow beyond the set limit.

Technology will also destroy bitcoin, which relies on encryption to preserve confidentiality and anonymity of it's transactions. In the near future quantum computing will be able to break any encryption available. So much for protecting your privacy ."

No offence, but nearly every single one of the comments here is incorrect, mostly due to ignorance - which I will correct. I don't have time right now, but I will try to login this weekend and provide further insight on why these are incorrect.

For starters, you cannot be depending on old guys who have no technical understanding of blockchains, and have everything to lose if they win out, and on top of that who have been consistently wrong about bitcoin/blockchain. Jim Rickards is a hella smart guy. He seems to know the Fed inside out. He sure as hell could drive circles around me in regards to understanding today's bond/stock/currency markets... but I can drive circles around him in regards to blockchains. I follow him on twitter. For the past ~6 months nearly every single remark he has made about Bitcoin has been consistently incorrect, in some cases absurdly so. It's actually disappointing. He could just study it in depth for a few months, then be another MSM guru on the subject. The IQ certainly isn't lacking.

[Southernguy]

Re: Blockchain update

Re. cold storage, I found this: https://steemit.com/bitcoin/@anarcry...r-cold-storage

[Techdread]

Re: Blockchain update

No offence, but nearly every single one of the comments here is incorrect, mostly due to ignorance - which I will correct. I don't have time right now, but I will try to login this weekend and provide further insight on why these are incorrect.

For starters, you cannot be depending on old guys who have no technical understanding of blockchains, and have everything to lose if they win out, and on top of that who have been consistently wrong about bitcoin/blockchain. Jim Rickards is a hella smart guy. He seems to know the Fed inside out. He sure as hell could drive circles around me in regards to understanding today's bond/stock/currency markets... but I can drive circles around him in regards to blockchains. I follow him on twitter. For the past ~6 months nearly every single remark he has made about Bitcoin has been consistently incorrect, in some cases absurdly so. It's actually disappointing. He could just study it in depth for a few months, then be another MSM guru on the subject. The IQ certainly isn't lacking.

I think he is correct on a few things Bitcoin is looking very late 90's, the algorithms behind them will not stand the test of time either.

https://www.sciencealert.com/new-des...antum-computer

I do think the core ideas behind block chains will have legs especially when melded with AI.

[touchring]

Re: Blockchain update

Insiders all cashing out?

http://www.businessinsider.sg/the-sw...-his-bitcoins/
https://www.bloomberg.com/news/artic...-all-his-coins

[DSpencer]

Re: Blockchain update

Insiders all cashing out?

http://www.businessinsider.sg/the-sw...-his-bitcoins/
https://www.bloomberg.com/news/artic...-all-his-coins

The first story is someone who is simply betting on a different cryptocurrency due to technical/ideological complaints about bitcoin. The second seems more like a true cashing out. The excuse that this somehow frees them from bias seems highly suspect. If I were him I'd be cashing out too.

In "shoeshine boy stock tips" type news: I got a text out of the blue last night from a family member asking about stock warrants on publicly traded companies that are now positioning themselves as somehow being connected to cryptocurrency. It's totally absurd. Just make a press announcement that your company in whatever industry is now pivoting to crypto and your stock price skyrockets.

[Milton Kuo]

Re: Blockchain update

In "shoeshine boy stock tips" type news: I got a text out of the blue last night from a family member asking about stock warrants on publicly traded companies that are now positioning themselves as somehow being connected to cryptocurrency. It's totally absurd. Just make a press announcement that your company in whatever industry is now pivoting to crypto and your stock price skyrockets.

That's exactly how things were at the start of the dot-com bubble. Remember K-Tel (the company that sells compilation music albums)? Back then, there was another company whose name I forget that saw a massive stock price increase after announcing an Internet initiative. The company sold fish or something; it's business was totally unrelated to the Internet and couldn't really benefit from the Internet at that time.

This was some time between 1996 and 1998. I wonder if that's where we are in this latest everything bubble. The idea of waiting another 4 or more years for sanity to return in a ZIRP environment is unnerving.

For those who follow him, Jeremy Grantham's latest quarterly news letter is out. Grantham himself believes that this overpriced market will deflate over *20* years; i.e., no crash as in 2000 or 2008.