Blockchain update

[patrikkorda]

Re: Blockchain update

PICK TWO:

- Decentralized
- Private
- Fast (in comparison to centralized or public information using the same technology)

If you think about it, it works as well with windmills and smoke signals as it does with blockchains. Decentralization and privatization have the burden of being relatively inefficient, if only because it means you need a more complicated way to save and access information in "more securely" and functionally "in more spaces."

You are correct, there is currently a trade-off between speed/scalability on the one hand and decentralization/privacy on the other. You could picture the current landscape as a spectrum, with ripple being on one end (centralized/fast/scalable/nimble) and monero on the other end (decentralized/slow/unscalable/nearly impossible to alter). I chose to take the scalability route by betting on ripple because I figured, if the space continued to grow, bitcoin would eventually hit the 1MB blocksize limit and I knew with 100% certainty that a soft fork would be impossible. Why?

The good part about a decentralized ledger is that it is practically immutable. The bad part about a decentralized ledger is that it is practically immutable. In other words, you have to make sure you get things right from the start. Once the chain is live, it is nearly impossible to get enough consensus to alter the code, and it gets exponentially harder the larger the network becomes (due to varying interests and downright ignorance).

One of the main reasons why the privacy coins cannot scale is because each transaction is relatively large. For example, monero uses something called ring signatures, which is tantamount to money laundering (not in an immoral sense but in a technical sense - your transaction turns into a mixed group of transactions). Another alternative is zero-knowledge proofs as used in zcash, which is tantamount to automatically making a new wallet after each transaction - this is even worse in terms of transaction size . In fact, it is so bad that private transactions (so called "shielded transactions") on zcash are optional and almost never used by anyone (you need 3GB of RAM to make a shielded transaction - so basically impossible on a mobile device even if you wanted to). If you think about it, it is pretty obsurd to have transactions broadcast everything on a private ledger, only to then take up even more space to conceal those details.

BUT, there are methods being developed which take up less space than even a fully public blockchain like bitcoin or ripple. I won't get into the details but essentially it is the opposite zcash: most transactions do not broadcast any details (like how much is being sent, from whom, to where) unless you choose the option to make them public in which case they become larger in size. This is a much more intelligent approach to a blockchain designed around privacy.

In a nutshell, I do not think there is an inherent tradeoff between scalability and privacy. We will, in a relatively short period of time, have access to a cryptocurrency that is private (and therefore fungible like monero), scalable (and therefore fast like ripple), and decentralized (and therefore immutable like bitcoin).

[DSpencer]

Re: Blockchain update

BUT, there are methods being developed which take up less space than even a fully public blockchain like bitcoin or ripple. I won't get into the details but essentially it is the opposite zcash: most transactions do not broadcast any details (like how much is being sent, from whom, to where) unless you choose the option to make them public in which case they become larger in size. This is a much more intelligent approach to a blockchain designed around privacy.

In a nutshell, I do not think there is an inherent tradeoff between scalability and privacy. We will, in a relatively short period of time, have access to a cryptocurrency that is private (and therefore fungible like monero), scalable (and therefore fast like ripple), and decentralized (and therefore immutable like bitcoin).

Are you involved in the creation of this cryptocurrency?

[patrikkorda]

Re: Blockchain update

Are you involved in the creation of this cryptocurrency?

Only as a future investor.

[lakedaemonian]

Re: Blockchain update

The winner will also need to survive government bans on exchanges. China has banned exchanges, South Korea soon, triggering a fall of Bitcoin price. As the price falls, other countries will frantically impose their own restrictions and bans as no government wants to be accuse of being slow to protect consumers from the "bitcoin scandal".

Many countries ban non official currency trading, yet it still occurs because it offers a lower frictional cost for exchanging value.

I think most people would be shocked at the amount of value exchange that occurs between people, between countries that doesn’t involve banks or western union like companies via hawala networks.

[lakedaemonian]

Re: Blockchain update

The winner will also need to survive government bans on exchanges. China has banned exchanges, South Korea soon, triggering a fall of Bitcoin price. As the price falls, other countries will frantically impose their own restrictions and bans as no government wants to be accuse of being slow to protect consumers from the "bitcoin scandal".

Many countries ban non official currency trading, yet it still occurs because it offers a lower frictional cost for exchanging value.

I think most people would be shocked at the amount of value exchange that occurs between people, between countries that doesn’t involve banks or western union like companies via hawala networks.

[patrikkorda]

Re: Blockchain update

Many countries ban non official currency trading, yet it still occurs because it offers a lower frictional cost for exchanging value.

I think most people would be shocked at the amount of value exchange that occurs between people, between countries that doesn’t involve banks or western union like companies via hawala networks.

I agree. Even if all of the exchanges throughout the world were simultaneously shut down tomorrow, the cryptomarket will no go to zero, not even close. As an investor who sold last year after holding since 2013, I want the market to go down as much as possible. BTC was not "a bubble" but a series of bubbles. Although I am certain that BTC will eventually go to zero (it is a dinosaur), the cryptomarket is here to stay.

[lakedaemonian]

Re: Blockchain update

Some interesting anecdotes from an extremely fast growing regional crypto exchange:

Jan 2017: 30,000 customers

Dec 1 2017: 500,000 customers

Dec 31 2017: 1,000,000 customers

Jan 7 2018: 1,200,000 customers

Jan 14 2018: 1,400,000 customers

Daily transaction volume up 40x in less than 6 months.

They’re dealing with the usual problems of hyper growth, trying to find enough warm/smart/motivated bodies to prevent blowing apart at the seams. They’ve suffered a few outages reminiscent of dot com boom brand names around the holidays.

On a related note, I put a big data friend of mine in touch with one of the exchange co-founders to let them figure out what to do.

My same friend is building a toolset to function as a “Bloomberg for crypto”.

its going to incorporate data driven metrics as well as “social sentiment” with social source value/accuracy ranking.

The question I posed to him is around the ability to accurately measure non speculative coin/token transactional velocity/utility.

I think if he can get a refined toolset to the public it could be a big money spinner or clear acquisition target.

I’m most interested in discovering which coins/tokens possess genuine Metcalfe’s Law transactional utility.

[seobook]

Re: Blockchain update

This is true, can't deny it. Utimately, I think the abiity to be valued is where Domains lose to crytos at this moment.

It is not that domains can not be valued, it is that the holding cost is so low that many owners prefer to hold out for irrational high bids based on the dream of infinite potential rather than sell at a normal market clearing price.

If you can sell 1 in 1,000 names for $50,000 then that is a far greater profit margin when compared against selling 1 in 100 names for $1,000 each.

I have sold a few names to venture funded startups & fortune 500 companies. Typically the name was only used for a short period of time, if at all & then converted to a 301 redirect.

On a pure economic basis none of the purchases made sense for the buyer.

I've also sold other sites based on multiples of cashflow & those are of course easier to value.

But raw names...often quite arbitrary trying to value them.

I've been in numerous domain auctions where the name was like $1,000 or so & then out of nowhere a $100,000 bid comes in with seconds left.

The shill bidding occurs on essentially every platform.

Earlier this year NameJet updated their terms after some overt shill bidding

we have confirmed that there was suspicious activity relating to certain names being sold on NameJet, and have taken actions to ensure that the integrity of the platform is maintained. We determined that the initially identified domains were owned by a bidder, which is a clear violation of our terms, and as such we have suspended the related accounts.

With GoDaddy you could have someone bid on your name after it expired & then after giving that fake sky-high price signal in the market you renew the name for $8.

SnapNames had a guy who worked for the company who used the nickname halverez (short for hank alverez) which was programmed to look at other bidder's max bids & do last second shill bidding just below their max. That sort of stuff went on for years.

Some of the most well known brokers also broadly advocate shill bidding.

"With a reserve auction, nobody wins if the auction doesn't hit reserve. You do not even get an accurate picture of the market value of the asset because the bids don't mean ANYTHING until they are over the reserve. At least with a no-reserve auction where the owner is allowed to bid, you have real economic advantage and productivity. The owner must authentically create a value threshold. If owner buys it back, the auction house still gets their commission creating economic benefit. ... Outside of the domain industry it is common practice that an owner would be able to bid for their own asset in lieu of setting a reserve." - Andrew Rosner

The market for lemons effect of all the sort of shill bidding scams & such is part of what has turned a lot of people off on the industry. That is part of why GoDaddy can afford to buy out so many portfolios & price names closer to actual values rather than holding out for fantasyland buyers. This is sort of like how all the free credit report offers that included negative option recurring charges on credit cards created the market opening for CreditKarma.

But a lot of the natural buyers of domains have went away.

- I mentioned how startups now use name hack or less memorable names off the start & then only buy premium names after gaining traction.
- As search results have become more brand biased many SEO-based publishers no longer see the value in generic descriptive names they once did. I think a year or so ago PaydayLoans.net sold for like 3 grand & about a decade ago that name would have easily went for 6 figures.
- The search results and other core traffic channels like Facebook have become far more ad heavy & declined reach.
- Even among the brands that are winning in search, there is often consolidation into fewer + deeper plays. Amazon.com shut down many of their niche sites like Soap.com & Diapers.com.
- In many emerging markets Facebook or WeChat or such is effectively the web.

Let's say if a company claims to have rights to Mars land and starts to sell plots of Mars land. Without knowing how much minerals there is in the land, or whether mankind can explore and mine Mars in even our lifetime, how do you value Mars land? And does the company that sells it actually have the right to the land. If there's no way to value, then the sky is the limit.

I see this as much as the narrative behind cryptos as the narrative behind domain names.

The issue with domain names (for generically descriptive ones at least) is not how many minerals might a person mine, but rather after they purchase the mineral rights how long will it be before someone else develops on top of the land & makes mineral extraction from below cost prohibitive.

There are many layers of cost & risk shifting from the big web players.

- their increasing ad density
- their bundling strategies
- their subtle support of piracy
- their subsidizing ad blockers & building ad blockers & other tracking services into their products
- their cross device user tracking that extracts the value out of niche B2B type publishing and allows others to target the audience without paying the person who originally built the audience
- that same sort of tracking is used to clone up & coming competitors to steal their differentiating features. Facebook owns a privacy & VPN service which they used to see the explosive growth of WhatsApp to acquire it & the growth of SnapChat to copy/clone many of their features.
- and then voice is an even bigger demonetization than the rise of mobile was
- all those are in addition to any uncertainty baked into their core news feed or search ranking type algos. sometimes they over-promote a category they want to be in, cause many people to invest in that area, then change their mind causing all those partner investments to go poof.

I'm pretty sure there's a law about information in this universe that goes something like:

PICK TWO:

- Decentralized
- Private
- Fast (in comparison to centralized or public information using the same technology)

If you think about it, it works as well with windmills and smoke signals as it does with blockchains. Decentralization and privatization have the burden of being relatively inefficient, if only because it means you need a more complicated way to save and access information in "more securely" and functionally "in more spaces."

It would be quite easy for some of the big tech companies to have a strong competitive advantage based on their preexisting widespread usage, brand awareness, gigantic cash flows, etc.

Remember how Google was a big proponent of network neutrality inside the United States (commoditize the compliment / ensure domestic carriers are dumb pipes)?

While they were doing that in the domestic market, they were also building their own global Internet.
https://www.blog.google/topics/googl...subsea-cables/
"Simply put, it wouldn’t be possible to deliver products like Machine Learning Engine, Spanner, BigQuery and other Google Cloud Platform and G Suite services at the quality of service users expect without the Google network. Our cable systems provide the speed, capacity and reliability Google is known for worldwide, and at Google Cloud, our customers are able to to make use of the same network infrastructure that powers Google’s own services."

What happens to your own personal internet?
https://www.youtube.com/watch?v=_cZC67wXUTs
"An Internet was sent by my staff at 10 o clock in the morning on Friday. I got it yesterday! ... the Internet is not something that you just dump something on. It is not a big truck. It's a series of tubes." - techno-futurist Ted Stevens

[seobook]

Re: Blockchain update

edited double post. no idea why it happened

[patrikkorda]

Re: Blockchain update

My same friend is building a toolset to function as a “Bloomberg for crypto”.

its going to incorporate data driven metrics as well as “social sentiment” with social source value/accuracy ranking.

The question I posed to him is around the ability to accurately measure non speculative coin/token transactional velocity/utility.

I think if he can get a refined toolset to the public it could be a big money spinner or clear acquisition target.

I’m most interested in discovering which coins/tokens possess genuine Metcalfe’s Law transactional utility.

The idea of a bloomberg for crypto is personally interesting. I hope it works out and wish your friend all the best. However, I am also extremely skeptical of ventures that revolve around blockchains. It's almost like people feel the need to be busy bodies in order to justify these absurd returns. But activity often turns out to be toxic in investing. I'll give you one example:

I have a friend who started a bitcoin mining company in early 2013. Bitcoin went up ~10,000% that year. Yet, my friend (and his investors) lost nearly everything. Why? Turns out his new (but inferior) mining rigs were no match for the multi-billion dollar mining factories over in China. The electricity costs to mine those bitcoins far outweighed the price of bitcoin. Things got so bad that blockchain.info eventually took down the charts related to mining bitcoins.
https://media.coindesk.com/uploads/2...gmarginbtc.png

It truly is mind blowing if you think about it. All you had to do was buy bitcoin and hold it to reap a ~10,000% that year (with zero leverage!) and yet some people managed to lose money in this market!

I am not sure how you would objectively measure non-speculative value. What is clear, however, is that periods of irrational exuberance often have at least some underlying value to back them up. The dotcom bubble is a prime example. Yes, the majority of those ventures went to zero, but there were also a handful of companies out there which would later go on to dominate the world we know today (e.g., https://abc.xyz/). Another example are the 1720s: it is clear that the South Sea and Mississippi companies were bubbles. However, beneath the surface, there was a revolution in insurance going on with blockchain-like returns!
http://www.nber.org/papers/w15332

Metcalfe’s Law: A lot of networks can look like Metcalfe’s Law is unfolding - until they do not. I didn't get into ripple because of "network effects" of first-mover advantages or any other buzz words. My reasoning was much simpler: if this industry continued to grow, eventually scalability would become paramount. What ripple did last year was unbelievable, and I still question whether it was purely luck (i.e., some sort of butterfly effect). With a crypto position sample size of 1: it very well might have been pure luck.

Either way, the question going forward is this: There are thousands of cryptocurrencies/tokens out there today. So how does one spot the next ripple?

In my opinion, it is impossible for any human to understand every single of them. There are simply too many of them. Instead of trying to figure out what each one claims to bring to the table (and whether they can actually deliver), I believe the more intelligent approach is to figure out what the next narrative will be.

Hindsight is 20/20: It is now obvious that scalability was going to be a huge narrative. But what is likely to be the next narrative? Moreover, which cryptocurrencies will benefit the most from that narrative?

[touchring]

Re: Blockchain update

It is not that domains can not be valued, it is that the holding cost is so low that many owners prefer to hold out for irrational high bids based on the dream of infinite potential rather than sell at a normal market clearing price.


If you can sell 1 in 1,000 names for $50,000 then that is a far greater profit margin when compared against selling 1 in 100 names for $1,000 each.


I have sold a few names to venture funded startups & fortune 500 companies. Typically the name was only used for a short period of time, if at all & then converted to a 301 redirect.


On a pure economic basis none of the purchases made sense for the buyer.

This is not true, being a business operator, I will definitely want to buy the generic domain name for my product and create a website just for it. It could be an informational site, but I can put links in it to my "branded" domain.


Targeted leads are difficult to get - it costs a lot of money to acquire new customers and most of the money spent on the typical PPC is dumped into the drain as you are already aware. There's a lot of gabbage eyeballs on facebook and youtube that are not potential buyers. The only question is how much I am willing to pay for this domain.

I've also sold other sites based on multiples of cashflow & those are of course easier to value.


But raw names...often quite arbitrary trying to value them.


I've been in numerous domain auctions where the name was like $1,000 or so & then out of nowhere a $100,000 bid comes in with seconds left.


The shill bidding occurs on essentially every platform.


Earlier this year NameJet updated their terms after some overt shill bidding

There's shill bidding but there are also lots of domain names out there, so shill bidders usually focus on big names that generate the most interest and highest profit. For crypto, you only need to rig 1 name. It's easier to rig cryptos than the broader domain market.

At first glance, there appears to be similarities between the domain name and crypto markets because both are dealing in virtual asset, but they are quite different. One is regulated by governments while the legal status of the other has not been established yet.

[VIT]

Re: Blockchain update

Metcalfe’s Law: A lot of networks can look like Metcalfe’s Law is unfolding - until they do not. I didn't get into ripple because of "network effects" of first-mover advantages or any other buzz words. My reasoning was much simpler: if this industry continued to grow, eventually scalability would become paramount. What ripple did last year was unbelievable, and I still question whether it was purely luck (i.e., some sort of butterfly effect). With a crypto position sample size of 1: it very well might have been pure luck.

I am debating the exact same thing myself if it was pure luck, just wanted to try crypto and picked xrp as a trial. My reasoning to get into XRP was similar. When I started to look into crypto currencies I could not understand BTC, it did not check most of the list of what makes medium to be a currency. XRP seemed to serve at least one important purpose to be effective exchange medium which I always thought crypto were made for in the first place.

*oh, now one more thing to worry about.

[lakedaemonian]

Re: Blockchain update

In my opinion, it is impossible for any human to understand every single of them. There are simply too many of them. Instead of trying to figure out what each one claims to bring to the table (and whether they can actually deliver), I believe the more intelligent approach is to figure out what the next narrative will be.

Hindsight is 20/20: It is now obvious that scalability was going to be a huge narrative. But what is likely to be the next narrative? Moreover, which cryptocurrencies will benefit the most from that narrative?

I believe that after the bubble pops(decisively), NOT this upward moving “bubble staircase”, and after people hate crypto more than pets.com, Webvan.com, kozmo.com, and boo.com combined I think the narrative will be:

Some sort of silly acronym, remember ASP(active server pages) a decade before SaaS?

Affordability(low frictional costs)

Acceptability(significant penetration in retail business acceptance)

Utility(significant user base matched with

Velocity(fast transaction speed)

“3Y’s”
”4Y’s”
”5Y’s”

Something like that with a halo of crypto2 reminiscent of Internet 2.0

[touchring]

Re: Blockchain update

I am debating the exact same thing myself if it was pure luck, just wanted to try crypto and picked xrp as a trial. My reasoning to get into XRP was similar. When I started to look into crypto currencies I could not understand BTC, it did not check most of the list of what makes medium to be a currency. XRP seemed to serve at least one important purpose to be effective exchange medium which I always thought crypto were made for in the first place.

*oh, now one more thing to worry about.

https://www.cnbc.com/2018/01/16/why-...-holdings.html

If it is so lucrative to create your own crypto, why won't fb or google or paypal come out with their own crypto. With the user and merchant account reach that these company got, they could literally print hundreds of billions of dollars.

Paypal has 180 active users that can readily buy PPcoins using their paypal balance.

Something just doesn't add up?

[seobook]

Re: Blockchain update

This is not true, being a business operator, I will definitely want to buy the generic domain name for my product and create a website just for it. It could be an informational site, but I can put links in it to my "branded" domain.

The Panda algorithm drastically altered the economics of web publishing in terms of SEO to where the same piece of content will rank vastly differently based on where it is published.

Many informational sites without strong user engagement metrics ended up having to be gutted and carved up.

• About.com became DotDash with a half dozen or so niche sites. Those largeish vertical sites drastically outperformed what About.com was doing.
• ArticlesBase.com went from making $500k a month to not being able to sell at auction for a few grand.
• Suite101.com went offline.
• eZineArticles.com took a big hit.
• HubPages.com, perhaps one of the best fighters, recently sold for something like $5 million after raising $7 million or $8 million about a decade ago. They also did the splitting of their site into verticals. I talked to their CEO via emails a few times a few years back and he is one smart dude, so them selling & maybe hoping for an earn out tells you just how tough things have grown.

The issue with those sites was not just size or page count, but rather brand awareness.

When links were the primary driver of rankings you really didn't need much in the way of brand to compete.

And when you could recycle many link sources quickly & easily across different sites, if you go back a decade there is no question operating 50 informational sites was usually better than operating one big site. But as the technical costs of operating sites have grown (https implementation, responsive design, increasing expenses to keep sites secure against more broad hacking efforts, etc.) operating fewer & deeper sites is typically better.

You don't want the sites to be so broad they stand for nothing, but if you create something that is high quality you will both feed into your brand and benefit your brand more if that content is on your main branded site ... at least in most cases.

Now there are some dominant web players like Zillow that buy out a Trulia or an Expedia that buys out a Travelocity & Orbitz to try to own more of the organic result set, but most the big network builders are moving toward branded names and away from generically descriptive names.

Zillow recently relaunched realestate.com (a year or so ago maybe)
https://www.semrush.com/info/realestate.com
it was an older site which used to be owned by LendingTree so it already had some ability to rank for the core term [real estate] but hasn't be able to rank very well for other terms (at least not when compared against Zillow or Trulia).

I get having different sites for different market segments (say bubble vs tinder vs grindr or such) but informational sites which do not offer interactive features keep sliding in terms of relevance and exposure.

Targeted leads are difficult to get - it costs a lot of money to acquire new customers and most of the money spent on the typical PPC is dumped into the drain as you are already aware. There's a lot of gabbage eyeballs on facebook and youtube that are not potential buyers. The only question is how much I am willing to pay for this domain.

Also the cost to develop the domain name and to try to rank the site and to try to maintain both the rankings and the site.

Another factor (& a way to turn garbage inventory into higher quality traffic sources) is ad retargeting. That is a big, big part of Facebook's ad revenues.

This is another reason many people will put content on a single site rather than across sites...it makes full funnel analysis easier & makes it easier to retarget audience sets.

I am not saying "domains have no value" or anything like that. Only that the central players have sucked a lot of the value out of them relative to what they had a decade ago.

And this declining value impact I am speaking of has more to do with generically descriptive keyword domains rather than say short brandable names.

There's shill bidding but there are also lots of domain names out there, so shill bidders usually focus on big names that generate the most interest and highest profit. For crypto, you only need to rig 1 name. It's easier to rig cryptos than the broader domain market.

Shill bidding is widespread in domain names. As I mentioned earlier in thread, it was systemically done by employees within the auction house, and it is frequently done by the domain owners for even just sort of ok names.

I looked back as some of the names I bought for ~ $300ish on SnapNames back in the day & the only other bidder in the auction was a last second halverez, who drove the auctions from the $59 or $69 minimum to within $20 of my max bid.

One of the $300ish name bought on SnapNames over a decade ago made that much per day for a few years. Now such names would get only a small fraction of the traffic they would have got pre-Panda. I don't think I would pay $300 for a similar name today because it would likely cost 6 figures or more to try to get it to rank & then the core terms it would rank for would have 4 ads above the organic search results. After a 6 figure investment one would need it to rank #1 organically for an extended period of time to have any hope for it to back out.

I was quite lucky to have sold some of those before things got so rough!

If it is so lucrative to create your own crypto, why won't fb or google or paypal come out with their own crypto. With the user and merchant account reach that these company got, they could literally print hundreds of billions of dollars.

Paypal has 180 active users that can readily buy PPcoins using their paypal balance.

Something just doesn't add up?

Are the big companies at this point so aligned with the establishment that they gain nothing but regulatory risk by launching cryptos?

Paypal has partnerships with Visa and MasterCard which could get uglier if Paypal started doing virtual coins. Plus Paypal already has the ability to monetize user balances to earn interest on it while money sits in user Paypal accounts. Paypal has pushed into merchant cash advance quite aggressively over the past 3 or 4 years, but I don't see what they would gain by having a crypto. If it is stable it is another layer of complexity to manage & probably a complex one at that with all the different laws associated with money transmission stuff post September 11. If it is unstable, it undermines the utility of their main service & erodes their perceived brand value.

Amazon has their "coins" but they are static valued
https://www.amazon.com/gp/help/custo...deId=201357530

in 2013 Facebook did away from their Credits system they launched in 2010
https://en.wikipedia.org/wiki/Facebook_Credits