Bitcoin: The Future or Ponzi Scheme?

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Originally Posted by Aimless

Ultimately it'll be the specific applications that create real value but we are currently not good at determining which ones will succeed and which will fail, nor do we have the slightest idea how to calculate the value of any given implementation. ICOs are one way for companies using blockchains to raise a lot of cash quickly (enabled by ethereum most of the time) but not all companies go down that route.

Your question doesn't really make sense though. No-one here has indicated that they believe in blockchain iced tea or that the value of iced tea coins have anything to do with the value of blockchains in the baking sector.

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No-one here has indicated they believe in Blockchain Iced Tea but the fools easily parted with their money in the stock market have. That's the whole point of discussing and calling out this bubble. That business tripled its stock price by that stupid rename, they're already down to "just" doubled, no doubt reality will see them grounded ultimately too.

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Originally Posted by Ominous Gamer

I'm not seeing the connection between the cost saving of blockchain having anything to do with patents either :bulb:

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The issue is what justifies the specific increases in value for these companies/currencies. Is it a bubble or not? If a company/currency has developed patents that restrict their innovations to themselves that could justify their valuation.

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Originally Posted by Aimless

The idea is that anyone can in theory develop a blockchain application or system so no one single company has a significant and sustained competitive advantage. Of course, this is like saying that smartphones, software, credit card companies and a billion other products have no competitive advantages even though many plainly do.

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Bizarre analogy. Software companies and smartphone companies especially can be incredibly protective and litigious over their patents. Many tech companies have been bought specifically for their patents, while lawsuits between smartphone companies over patents have been major news discussed here previously.

A lot of the value is derived from the network and ecosystem. Those can't be copied.

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Originally Posted by Aimless

The best and most well-known example is Ethereum, which has enabled many others to set up blockchain-based products eg. implementing smart contracts on its own blockchain that cut out middlemen and reduce administrative overhead & delays. The kodak idea isn't new--using blockchains for digital media assets was an early proposal for the technology. Another commonly cited example of a blockchain application is a system that uses smart contracts for a flexible decentralized data storage platform. Many banks are developing blockchain-based platforms for making transactions and international settlements cheaper and a lot faster. In some developing countries, blockchain technology is being developed to enable reliable and secure payments between individuals and businesses, with built-in systems for handling exchange rates etc. One of my favorite ideas is a company that uses blockchain to manage a fraud-proof ticket system for events.

It's true, many altcoins with their heavily publicized ICOs are mostly capitalizing on hype without having a high likelihood of delivering a useful product, but there's a large number of concrete, useful real-world applications for blockchains that either improve existing businesses or enable entirely new types.

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Here's the problem with Ethereum, though: It is not foolproof, it is remotely accessible and there's no human oversight over how the contracts act out when they do.

Just think of the potential for problems if this thing takes off and then, sometime down the stream, we get a Spectre-type vulnerability.

While I recognize the potential, I'm also deeply wary of the problems that will occur. We already have plenty of examples of problems with this technology.

100% Agreed Khen.

Also just heard of a blockchain travel reservation company. Instead of working through a commission-generating online travel agency, your reservations are managed via a blockchain network.

Seems like a neat idea, though wondering how this magically ends the role that online travel agencies play in bulk marketing. It's not like those economics vanish, though people are saying that is the implication of all this.

https://windingtree.com/files/White%...r_EN_nov21.pdf

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Originally Posted by Khendraja'aro

Here's the problem with Ethereum, though: It is not foolproof, it is remotely accessible and there's no human oversight over how the contracts act out when they do.

Just think of the potential for problems if this thing takes off and then, sometime down the stream, we get a Spectre-type vulnerability.

While I recognize the potential, I'm also deeply wary of the problems that will occur. We already have plenty of examples of problems with this technology.

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This goes without saying. See the DAO hack for example. All current technology comes with this risk. Possible that a large blockchain may be more resilient.

https://www.sciencedirect.com/scienc...04393217301666

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Originally Posted by Ominous Gamer

https://www.sciencedirect.com/scienc...04393217301666

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See this? This is my surprise face. :|

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Originally Posted by LittleFuzzy

See this? This is my surprise face. :|

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LOL. This is mine. :o

I might make my own wager now. The RGB 1080 I picked up in May for $460 is now worth north of $700 used. I think I'm going to sell it and focus on catching up on my console games until this crypto thing crashes or the next wave of cards releases.

Pump and dump is going through the smaller currencies like wildfire. A lot of it also includes a social media elements which is annoying as all hell. I know people who really don't have money to be gambling that are 'investing' in them.

I heard a blurb on NPR that the IRS is tamping down on crypto currencies....and taxing every transaction (literally by the millions) like any other property exchange.

Sounds like a round-about way to "regulate" an unregulated, shadow banking industry. Wonder how that would hold up in court, if anyone actually challenged it?

Where did you hear that?

Bitcoin is unregulated and anonymous which is why it's used by criminals. So I don't see how they're "taxing every transaction".

You can call it unregulated, but it's certainly taxed. Cash transactions are anonymous too, but I assume you don't think your physical take at the till in your pub is untaxed.

https://www.investopedia.com/article...s-bitcoins.asp

Sorry I should have phrased it better but yes legally-behaving Americans are supposed to report bitcoin transactions just as legally-behaving people are supposed to report cash takings.

However I specifically mentioned criminals. Cash is a good example, it is used very frequently in black market transactions that go untaxed. Not every cash transaction is taxed as not every tax transaction is reported. A lot of people working "cash in hand" don't report their cash takings. Bitcoin is the same. As opposed to other electronic transactions that normally can't evade taxes as they're traceable.

A drug dealer selling drugs and getting paid in bitcoin is likely not reporting their bitcoin takings to the IRS.

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Originally Posted by RandBlade

Bitcoin is unregulated and anonymous

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sooner or later a vast majority of people have to use a service to change a digital currency into actual cash. That leaves a trail. The IRS has deals with companies to track transactions and has won court cases to force exchanges to turn over info on thousands of accounts.

What OG said. Bitcoin is only anonymous as long as you never convert to or from fiat. The moment you do, it becomes traceable. The Bitcoin ledger is public.

What GGT is probably referring to with "taxing every transaction" is that they're also taxing transactions that don't involve fiat. If you traded some BTC for Litecoin, you have to pay tax on that, even though no USD was involved.

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Originally Posted by RandBlade

Sorry I should have phrased it better but yes legally-behaving Americans are supposed to report bitcoin transactions just as legally-behaving people are supposed to report cash takings.

However I specifically mentioned criminals. Cash is a good example, it is used very frequently in black market transactions that go untaxed. Not every cash transaction is taxed as not every tax transaction is reported. A lot of people working "cash in hand" don't report their cash takings. Bitcoin is the same. As opposed to other electronic transactions that normally can't evade taxes as they're traceable.

A drug dealer selling drugs and getting paid in bitcoin is likely not reporting their bitcoin takings to the IRS.

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I don't know why I'm even trying to translate GGT's classic poor communication but I believe that should be interpreted as demanding or insisting on taxing every transaction (it remains an odd assertion because of course governments always try and do that, but we are talking about GGT here). And bitcoin is actually a lot more tracable than cash. The blockchain guarantees that, every transaction gets recorded automatically. It's not really anonymous. I think the phrase I heard used once is that it's "pseudonymous, not anonymous." Much like the tags used on here. You have to do a lot of work to maintain the identity protection against scrutiny and criminals aren't any better at that than the rest of us.

The recent tax bill appears to have ensured that crypto-only transactions (eg. exchanging bitcoin for ethereum) are no longer covered by the "like kind exchange" exemption. It's clearly a recent change. I think some exchanges have been required to identify a large number of accounts that have incurred tax liabilities as a result of this change.

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Originally Posted by Aimless

The recent tax bill appears to have ensured that crypto-only transactions (eg. exchanging bitcoin for ethereum) are no longer covered by the "like kind exchange" exemption. It's clearly a recent change. I think some exchanges have been required to identify a large number of accounts that have incurred tax liabilities as a result of this change.

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I'm not familiar yet with changes from the recent tax bill, but crypto exchanges were never covered by the "like kind exchange" exemption. That's been a persistent belief in crypto circles, but the IRS has said for years now that you can't do like-kind exchanges with crypto.

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Originally Posted by Wraith

The Bitcoin ledger is public.

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https://bitbonkers.com

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One of Japan's largest digital currency exchanges says it has lost some $534m (£380m) worth of virtual assets in a hacking attack on its network.

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http://www.bbc.com/news/world-asia-42845505

:noob:

Bitcoin, the future of armed robbery. https://mobile.nytimes.com/2018/02/1...extortion.html

Do you really need to turn this into a team sport too?

After Venezuela released their Petro cryptocurrency, now Turkey and Iran are looking at releasing their own. I doubt they'll act before they see how the Petro plays out, and I'm hoping that one bombs spectacularly. It'll be interesting to see what happens after.

Anything Venezuela touches bombs spectacularly and there are very good reasons to doubt a single word their government says about Petro.

https://arstechnica.com/tech-policy/...t-its-a-farce/

This is what JP Morgan had to say about blockchains.

Bitcoin blockchain contains child-porn:

https://theoutline.com/post/3799/if-...ded-child-porn

I knew it.

If the blockchain can be made to include illegal material or malware that doesn't sound too positive.

I don't think it's common practice to attempt to locally execute arbitrary data on the blockchain, so there's not much risk of malware.

Finally got around to reading through that paper. The bitcoin blockchain only allows arbitrary data in 80 byte chunks, so the data had to be cut up and spread out, making it pretty unlikely to get to unless you already know how to piece it together. You'll need special tools in order to extract it from the blockchain in any usable form. Further, the protocol allows these chunks to be pruned to save space under certain conditions, so you'll need to make sure your blockchain is unpruned, or extraction will be impossible. Lastly, because of how difficult this all is, the researchers never actually verified that there is child pornography on the blockchain. Here's the relevant quote:

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While five files only show, describe, or link to mildly pornographic content, we consider the remaining three instances objectionable for almost all jurisdictions: Two of them are backups of link lists to child pornography,containing 274 links to websites, 142 of which refer to Tor hidden services.The remaining instance is an image depicting mild nudity of a young woman. In an online forum this image is claimed to show child pornography, albeit this claim cannot be verified (due to ethical concerns we refrain from providing a citation). Notably, two of the explicit images were only detected by our suspicious transactiondetector, i.e., they were not inserted via known services.

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So the story that got repeated all over the media is originally sourced from an unknown online forum post. Good job, media.

BTW, I heard a rumor that if you correctly assemble certain chunks of the digits of Pi, you can find child pornography too.

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Originally Posted by Ominous Gamer

https://bitbonkers.com

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http://cryptolights.info/

The European Commission has decided to invest 300 million euros in tulips. Shameful.

What a waste of money. Hopefully it won't happen until we're out.

Eh, the UK actually signed up for it.

Hard to see also what's wrong with it.

https://www.amazon.com/dp/B07BWHC5ZJ

Free book for those of you who are still having trouble understanding the future of the blockchain.

Rotten tulips.

https://www.bbc.com/news/world-us-canada-47123371

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Originally Posted by Loki

Rotten tulips.

https://www.bbc.com/news/world-us-canada-47123371

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The story is severely fishy as the guy is supposed to have died of Crohn's Disease. Which is rather treatable. And if you do not treat it you're usually not fit to travel - not to mention that for this particular disease, India is the last place you want to be, considering the state of their plumbing.

Depends.

My mum got seriously ill a few years ago due to undiagnosed Chrohn's disease.

Plus many patients, let alone rich adventurous patients, can seek to do activities that are not advisable.

Everything about bitcoin is fishy. That said, and although Crohn's disease is much better managed these days than was the case just a decade ago, complications of the disease as well as of its treatment can on occasion be very dangerous. Even in my short career these have included several tricky cases of sepsis, ileus and bowel infarction. It's just one name, but there's a wide range of severity and bad luck.