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Is Bitcoin the Next Big Thing?

Discussion in 'Business Discussions' started by accelerator, Jun 2, 2015.

  1. Marcoose

    Marcoose Well-Known Member

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    This is something I wanted to debunk myself in an article but haven't had the time. There was someone on Twitter the other day offering either $20k or $200k (I actually think it was the latter) to a hardcore researcher to run a study into the topic. Anyway, think about how much energy is used, on a macro level, maintaining the current fiat monetary system. Really think about it. BTC, no matter how wasteful it is, is far less environmentally unfriendly than fiat. It does create far-fewer jobs though.... back to the Rioja.
     
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  2. Domain Forum

    Acorn Domains Elite Member

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    IWA Meetup
     
  3. Marcoose

    Marcoose Well-Known Member

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    I want to "like" this but cant find the button!

    Edit: found it!
     
  4. Edwin

    Edwin Well-Known Member

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    Not if you include usefulness as a measure. Bitcoin achieves almost nothing useful. Fiat enables every transaction from the purchase of a coffee and up. So it’s hardly apples to apples.

    If you add utility into the mix, Bitcoin is thousands of times more wasteful.
     
  5. Marcoose

    Marcoose Well-Known Member

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    So we both agree that Bitcoin is far from a finished product on a number of levels. Out of interest how will you feel about Bitcoin when in a couple of years BTC transactions are (inevitably) almost instant and almost free, and there are intermediaries that take care of price volatility? Will this change anything?
     
  6. Edwin

    Edwin Well-Known Member

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    No, not for the better anyway.

    So long as it keeps going up in value, people will be reluctant to spend it.

    If it stops going up in value, most people won’t care about it any more.

    If it plunges in value that’s game over, because miners will stop mining and therefore nobody will be validating transactions.

    Nobody will provide these services (validation, intermediation etc) for free. So there has to be justification for the fee paid. But that justification goes away if nobody (rounded down) plans to use Bitcoin as a transactional currency rather than a store of value.
     
  7. Marcoose

    Marcoose Well-Known Member

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    But people will spend/sell it as they are now... they just can't spend it on every day purchases at the moment cos it's slooow, expensive, and its in its infancy in terms of adoption.

    It has been dumped umpteen times - look where we are now

    There were nodes at 1c, there were nodes at $100, there are nodes now, at $17k.

    Well people can't spend it now cos BTC is sloooow and expensive in its current form. This last point is essentially speculation.

    I'm not saying BTC will be the go-to crypto for every day transactions. I'm actually hoping it will be LTC.... anything other than Bcash is fine with me.

    ... back to the Rioja.
     
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  8. ausername United Kingdom

    ausername Retired Member

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    Well hundreds of years ago people had to actually 'hammer' coins out of metal, and people would 'clip' coins (silver usually) to break them into smaller pieces for smaller payments.

    The biggest challenge to bitcoin is how they can massively reduce the transaction fee. I mean.... it needs to be like 5p or 10p if it is to ever be used to pay for a latte or a big mac.

    If money was on a blockchain and our transactions were processed through government owned rigs, and they took a transaction fee instead of VAT and other stealth taxes.... that would be awesome.

    Why don't we just make the GBP a crypto currency, sack half of HMRC and be done with it?
     
    Last edited: Dec 12, 2017
  9. Marcoose

    Marcoose Well-Known Member

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    They will have to to stand any chance of maintaining a resemblance of the status-quo. If they do, it doesn't mean crypto is dead though. There is soooo much more to crypto than bitcoin and transactional currencies.

    See:

    Aventus.io
    Datum.org
    Experty.io
    wacoin.io

    ... and probably 1000 legit projects that already exist out there. Life as we know it is going to change as we shift to a tokenised economy.
     
  10. ausername United Kingdom

    ausername Retired Member

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    The most valuable asset will always be land which is the only one of the three primary means of production which is both legal to own and truly limited in supply, so when I hear stories of people remortgaging their homes to purchase bitcoin at $20k then I think those people are morons. I don't care how much people want to hype Bitcoin up, irrespective of whether Bitcoin can reach $50k in the long run it is pretty obvious that we are seeing some sort of mania right now and can expect a correction which will see some people lose the shirt off their backs and then top themselves.

    I'm a bit torn at the moment, obviously I wish I had a big stack of bitcoin (I don't), and I'm genuinely pleased for those who have become made men or women through bitcoin investment (I sense a lot of jealousy coming from some naysayers), but I also see a lot of greedy people with dollar signs in their eyes and foresee a fair bit of pain coming for many. It all makes me feel a bit queasy actually, all the articles from bag-holders prophesising $1m bitcoin value to sucker in mug punters (vested interest in hyping it up) and all the articles calling it a ponzi scheme from people who missed the boat (jealousy).

    I think its bringing out the worst in a lot of people, I'm seeing a lot of greed and a lot of jealousy and without wanting to sound too much like a hippy... those are probably my two least favourite human traits.
     
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    Last edited: Dec 12, 2017
  11. Edwin

    Edwin Well-Known Member

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    Last time I looked, I could use pounds to pay for a cup of coffee.

    Why do I need Bitcoin. What does Bitcoin bring to the table that pounds (whether in cash, in the form of credit/debit cards, or in some other form) don’t?

    As I mentioned a few pages back. I believe that blockchain technology can be both evolutionary and revolutionary. Some existing industries can be tweaked, others may ultimately be upended (eg who needs the Land Registry if there were a fully traceable, genuinely “incorruptible” record of exactly who owns every piece of property in the UK?)

    But Bitcoin doesn’t need to be part of the picture for those blockchain applications to succeed.

    It’s easy to understand the excitement around blockchain stuff. It’s very hard to fathom why people are getting all hot and bothered about Bitcoin. Sure, it’s zooming up in value right now. And perhaps there’s enough reason right there for many people. But I want to understand WHY. And for the life of me, I can’t.

    Every time I look at aspects of Bitcoin they make no sense. It’s a rubbish currency. It’s a very dangerous way to store wealth. It has no inherent merit (unlike Etherium, say, which has proven highly adaptable for ICO issues). The list goes on and on and on.

    At the end of the day, Bitcoin is about as useful as tulips.

    So we come back to the initial point: Bitcoin is of interest because it’s going up in value. People are making mo-ney! And that’s great (seriously) but it doesn’t do anything to dispel the notion that Bitcoin is a bubble ripe for bursting.
     
  12. ausername United Kingdom

    ausername Retired Member

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    And the Bank of England can print as many new pounds as it wants tomorrow, resulting in the pounds in your pocket purchasing fewer cups of coffee.

    That's the original vision of bitcoin I think, to take currency out of the hands of central bankers... Its a libertarian ideal, to take control away from bankers and government and empower the individual.

    I mean... banks just 'create' money out of nothing. They get £5000 deposited and leverage that to lend out £100,000 which doesn't exist. Read more about fractional reserve banking.... the idea that you can just pull a piece of paper out of your pocket and exchange that for a cup of coffee is just as bizarre as paying for a coffee with a digit from your bitcoin wallet. Both are bizarre concepts.

    The pound in your pocket isn't backed by anything physical, it is just an IOU, so the argument is that money is fake and doesn't really exist. I'd argue that crypto is also fake.

    Now a gold backed currency of some sort.... like we had in the 15th century..... THEN we'd be talking.

    There have long been rumours that China and Germany are each planning on returning to a gold backed currency, and if either of them went through with it then that would be the end of the dollar as the global reserve currency and probably the end of the dominance of the English speaking world.

    Nothing stopping that gold backed currency being a crypto currency either is there? Can be pretty sure that pounds and notes won't exist in 50 years and everything will be digital, and that a transaction tax will be the primary source of revenue for the treasury.

    Fiat currency in its modern form is just as bizarre as a concept as crypto currency, if not more bizarre when you really think about it.
     
  13. ausername United Kingdom

    ausername Retired Member

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    I agree that its in a bubble. But so are most other asset classes.

    Property is in a bubble, the stock market is in a bubble, and both of those are in a bubble because governments keep increasing the money supply.... which goes back to my point about central banks constantly printing new money.

    I wouldn't spent $20k on a bitcoin, because I think there will be a huge correction, but I think the blockchain and the idea of limited supply of a currency is the future and will replace our currently highly flawed system of exchange.

    A gold backed digital currency on the blockchain would genuinely change the planet.

    Bitcoin is the pioneer currency, the pioneer seldom triumphs.... but is difficult to deny that blockchain technology could revolutionise the world and probably will replace fiat currency in some form (probably governments each having their own national currency with a blockchain).

    ps. When you say debit card, do you tend to pay by contactless? Because most other people do.... and you can pay with crypto in the same way that people pay with paypal or apple pay pretty much instantly.

    Physical cash is going to die irrespective of whether crypto succeeds or fails. It already is dying out, people have gone contactless and zapping things with their smartphones already. I can't see physical coins and notes lasting another 30 years even if we stick with fiat currency.
     
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    Last edited: Dec 12, 2017
  14. Edwin

    Edwin Well-Known Member

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    I’m probably the last person in Britain who pins all transactions even though my debit card is chipped for contactless. I have very selective Luddite tendencies:p
     
  15. ausername United Kingdom

    ausername Retired Member

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    I frequently spend over £30 at the post office so pin for that.

    But I do think we've set off down the road heading to a cashless society. I actually wonder whether Prince William will be the last monarch in the UK to have his face on coins and notes.

    My wife hardly ever has any cash because she never has any reason to withdraw any, don't even need coins for parking anymore.

    The last remaining shop in my village to get a card machine has finally got one, very recently.

    Every time we change a coin it costs a fortune to businesses to update coin slots etc, spare a moments thought to amusement arcades when they changed the £1 coin... having to switch first to a mechanism to fit both the old and new £1, and then to a mechanism which only accepted the new £1, looking at £50 for each swap so £100 per machine for changing one coin. And for all they know a smaller 50p could be announced next year, and they'd have to do it all again.
     
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  16. Edwin

    Edwin Well-Known Member

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    I wonder if AlphaZero could be taught (or could teach itself) to read markets such as Bitcoin exchanges, or the stock or forex markets?

    It went from knowing nothing about chess to being the most powerful chess player in history in just 4 hours, so it’s not as if it can’t handle complex problems! (It crushed the game of Go a few months ago too.)

    It could be told to watch the Nasdaq, for example, and the movement of individual stocks, and to use that to predict future market movements.

    Perhaps not as crazy as it first sounds. After all, it doesn’t have to have a perfect edge to make money, it just has to be consistently right 51%+ of the time.

    https://www.extremetech.com/extreme/260215-alphazero-new-chess-champion-harbinger-brave-new-world-ai
     
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  17. RobM

    RobM Retired Member

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    Heh the age old question of whether past price bears any relevance to future prices. I have spent years running figures through neural networks and genetic algorithms - I've created loads of fitness functions. What I've found over all those years is that running random (literally flipping a coin) algorithms are almost identical to ones you've given 'intelligence'. The only way I make money is very short term moves where humans are predictable and the market behaves more as expected, in and out in less than an hour, and even though I am profitable I am not even at 50% consistency let alone 51 which would be almost the 'holy grail'. However you can afford to lose more often than you win provided you win more than you lose ;) So in my opinion there is nothing for AI to spot or learn. Of course I may (most likely probably) be wrong. On a sidenote I also spent the last year writing genetic algorithms to solve the n queens problem and I have found that using mechanical algorithms will always work (I'm sure there is a single uniting formula we're all missing) but sometimes you have to conclude that there is nothing for AI to 'learn' and there lies its problem with so many things in life. Anyway sorry to the OP I realise I have digressed massively (not just me) from the original question about whether BTC are worth it :) If anyone is interested we can create another thread and I can share the programs and research I've done into n-queens, neural networks etc.
     
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    Last edited: Dec 13, 2017
  18. Edwin

    Edwin Well-Known Member

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    It may be that AI can spot patterns no human can. If they’re there. It’s a thorny problem: because we’re not smart enough to spot them, we simply don’t know.

    (I’ve idly wondered about very simplistic long term strategies like “buy at the open the 10 stocks that dropped the furthest yesterday”. That’s the kind of thought experiment you probably simulated with your tools all the time.)
     
  19. RobM

    RobM Retired Member

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    Yes it'll be amongst the things I've tried. The trouble is humans are very good at cherry picking 'working' patterns, albeit not intentionally, but when running through all the stats from I think 1990 not one system has proved profitable in the long run. I have yet to see any software spot a pattern.
     
  20. Edwin

    Edwin Well-Known Member

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  21. mojoco United Kingdom

    mojoco Well-Known Member

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    Dad asked his son what he wanted for his birthday...."Dad can I have a bitcoin please"

    What... $15,544??? Do you realise how much $14,678 is ? ... and what would you do with $16759 anyway ? :D
     
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