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jslade


Total Posts: 1095
Joined: Feb 2007
 
Posted: 2017-09-05 22:15
1) As long as it is a conduit for Renminbi to get out of China, the majors will probably continue to go up. If China shuts that spigot off, it may still go up for a while.
2) It's got the feels of mid-90s internet about it. At some point it may actually start solving problems (DNS is an obvious one, payments of course).
3) Storing value on a blockchain is inherently useful.

The technical problems facing most of these blockchains for consumer use are huge of course, but that doesn't seem to matter much. Being able to move a couple million bucks in a few seconds without being on SWIFT opens up a lot of possibilities.

"Learning, n. The kind of ignorance distinguishing the studious."

chiral3
Founding Member

Total Posts: 5022
Joined: Mar 2004
 
Posted: 2017-09-06 01:38
1) Agreed w/ 3, it's really all about blockchain tech
2) Bitcoin isn't forever. It taps out at 21M
3) Interesting article recently about bottom up valuation compared to Visa/Mastercard, which actually charges fees that support their valuation.
4) Closely related... people tend to think of bitcoin in terms of USD/Bitcoin
5) China
6) There's still a ton of issues cropping up that will suppress confidence until all the kinks gets worked out
7) Still smells like tulips

Arguably for laymen, but I'd recommend listening to Tim Ferriss podcast #244 with Nick Szabo. Good perspective from someone well spoken thought by some to be Nonius. I mean Satoshi Nakamodo.

Nonius is Satoshi Nakamoto. 物の哀れ

rod


Total Posts: 375
Joined: Nov 2006
 
Posted: 2017-09-06 02:28
chiral3: "Bitcoin isn't forever. It taps out at 21M"

Maybe I am missing something obvious, but isn't BTC divisible?

If the quantum of BTC is 1 Satoshi = 10 nanoBTC, then shouldn't the upper bound be 2.1 petaSatoshis?

If the quantum of fiat is, say, 10 cents, then 2.1 petaSatoshis would be equivalent (in some sense) to 210 trillion USD, which is over 10 times the GDP of the United States.

chiral3
Founding Member

Total Posts: 5022
Joined: Mar 2004
 
Posted: 2017-09-06 03:17
The way I understand it - and I am a layman in the subject - is the protocol halves the reward for adding a block to the chain every 210,000 blocks. Now thats a fee and a coin. Most want the coin. This is to ensure scarcity and ensures a cap of 21M bitcoins. After that the reward is only the fee.

2.1petasatoshi = 21M Bitcoin (0.00000001*2.1*10^15).

Nonius is Satoshi Nakamoto. 物の哀れ

eläin


Total Posts: 62
Joined: Jun 2010
 
Posted: 2017-09-06 08:36
Even though the prices of different virtual currencies are highly correlated, considering them in the same basket is somewhat wrong in my opinion. (Not necessarily saying this is something you did.)

ICOs.. Well there are still ICOs that you can participate in and sell the tokens at a price multiple times that of what you paid yourself. For the bubble to truly pop I feel that this needs to stop first. When will it stop? I thought that it would have already stopped multiple times.. but it just keeps on going and I still consider some future ICOs to be of good risk/reward ratio.

Longer term most of the tokens issued through ICOs will go to 0, it will take time, people need to first realize there is no real utility in having a token for everything. I think it is too early to even say will any of the tokens survive. It will be an interesting thing to follow..

On the other hand.. our old friend Bitcoin.. I believe that the bubble is only starting to form. Many variables at play and I would say almost impossible to say how high it will go. My bullish sentiment lies mostly on a perhaps a biased view that many people who hold Bitcoin are not very willing to sell them even as the price is going up. In my opinion what you could call the supply side of Bitcoins, is quite inelastic. Demand has been growing steadily throughout the years.. and this is a perfect setup for a huge bubble. On the other hand technological advancements have been very slow.. transaction times and costs are going up, this is bearish on a fundamental level but when have bubbles cared about fundamentals..


rod


Total Posts: 375
Joined: Nov 2006
 
Posted: 2017-09-06 12:52
chiral3: "I'd recommend listening to Tim Ferriss podcast #244 with Nick Szabo"

At 1h35m40s, Szabo says "I designed Bitcoin... uhm... gold..."

Szabo is a Hungarian name (it means "tailor"). Hungarians say the surname first. Hence, Szabo Nick. Initials: SN. Satoshi Nakamoto.

jslade


Total Posts: 1095
Joined: Feb 2007
 
Posted: 2017-09-06 21:43
CFTC approving futures and options from LedgerX
https://www.bloomberg.com/news/articles/2017-07-24/bitcoin-options-to-become-available-in-fall-after-cftc-approval
CBOE to release bitcoin futures:
https://www.cnbc.com/2017/08/02/cboe-bitcoin-futures-winklevoss-brothers-digital-currency-exchange.html

FWIIW, Sornette's bubble model is presently claiming a positive hazard rate and a top at around 10,000 for bitcoin.

"Learning, n. The kind of ignorance distinguishing the studious."

EspressoLover


Total Posts: 245
Joined: Jan 2015
 
Posted: 2017-09-06 23:17
Seems like cash-settled futures are going to open a whole Pandora's box of problems. Which pricing source are they going to use? If you get a Bitfinex tether-like issue, then a single exchange's BTC/USD price can be significantly distorted. Also because Bitcoin trading is anonymous, illiquid and volatile, banging the close is going to be super-easy to get away with. Then what about another fork scenario? Do you settle based on the price of BTC alone, or BTC + fork? What if both forks claim to be the successor to Bitcoin, and there's no consensus opinion? What if some miner coalition captures 51% of the pool?

So, many things can go wrong, and that's just off the top of my head. Let's bring all the mind-bending corner cases of crypto problems into the mainstream financial system, where it can spread contagion all over the place. Considering how easy and seamless it is to transfer BTC (isn't that the whole point?), why the hell didn't they just make the futures physically settled?

jslade


Total Posts: 1095
Joined: Feb 2007
 
Posted: 2017-09-07 06:19
Bitcoin trading for cash is most certainly not anonymous unless you know something I don't. In fact, trading it for other cryptos in a semi-anon way is also super difficult to accomplish. Supposedly there are on-chain solutions coming up to make a semi-anon ETH-BTC trade possible. There are none for BTC-USD, and never will be. To turn things into useful amounts of money, you need to talk to banks and comply with all the usual FinCen KYC regulations.

I'm pretty sure they'll use Gemini's cash settlement numbers. It's the most mature of the exchanges by far, and is well tied to GDAX and other exchanges.

"Learning, n. The kind of ignorance distinguishing the studious."

EspressoLover


Total Posts: 245
Joined: Jan 2015
 
Posted: 2017-09-07 21:00
Correct me if I'm wrong, but don't most of the major exchanges allow BTC deposits/withdrawals without KYC verification? At least up to a certain limit, in which case it's just a matter of creating a whole bunch of sock puppet accounts. I'm almost positive this is true for Bitfinex, which is where BTC/USD price discovery mostly occurs anyway. Even if GDAX is secure, their price is going to follow Bitfinex's lead.

If this is the case seems like anonymously banging the close is pretty straightforward. Convert USD to BTC on a clean wallet through a KYC institution. Tumble through Helix, and transfer into a dark net wallet. Deposit BTC from the dark wallet into a Bitfinex slush fund under a fake name. Bang the close in the spot market. Withdrawal to your dark net wallet. Tumble back to clear net wallet. Convert clean BTC into USD through KYC institution.

This shouldn't even raise laundering flags. The spot manipulation side very likely loses money. So, you'll be withdrawing less BTC than you put in the clean wallet to begin with. I'm pretty sure, that's not a transaction pattern consistent with laundering/AMP. Remember, the money making side of the equation comes from the CBOE, which never goes within 100 miles of the wallet shenanigans. The whole scheme seems pretty anonymous to me, unless NSA gives CFTC it's backdoor to Tor.

jslade


Total Posts: 1095
Joined: Feb 2007
 
Posted: 2017-09-08 07:11
You're wrong; the KYC for exchanges like this is vastly more of an anal probe than the KYC for a bank or a Stock Broker. I have a half dozen exchange memberships now, and will probably have a half dozen more before I am through. It is not even vaguely possible to do anonymous transactions on an exchange which converts into USD. If it is, please tell me which exchange will do this for me, because that would be fucking great! You can do semi-anon transactions on the blockchain: even that is totally traceable if you know what a graph laplacian is (monero excepted, but we're not talking monero futures). This includes exchanges which do not convert into dollars, of which Poloniex is the most important.

You're also wrong about GDAX vs BitFinex; Gemini leads, GDAX mostly follows Gemini, and Bitfinex is horse shit which does whatever because they can't build working exchange software without resorting to squirting POST operations through some Node.js atrocity.

Compared to shennanegins with stuff like cocoa or tin futures, Bitcoin/dollar futures will be a model of propriety.

"Learning, n. The kind of ignorance distinguishing the studious."

nikol


Total Posts: 423
Joined: Jun 2005
 
Posted: 2017-09-08 14:17
About 21M limit.
Transaction settlement mechanism is probabilistic. The longer the chain, the less probability of duplication (seems). Non-zero prob in finance is sure thing to be exploited.
Am I wrong?
If I m right, the bitcoin money base inflates.

Cheng


Total Posts: 2838
Joined: Feb 2005
 
Posted: 2017-09-08 15:37
Re KYC: my naive approach would be a bitcoin exchange on a nice sunny island with... hhmmm.... somewhat different standards regarding these issues. Or is there no such thing? (I mean, somehow all those dark web drug dealers have to get their money, no?)

"He's man, he's a kid / Wanna bang with you / Headbanging man" (Grave Digger, Headbanging Man)

afekz


Total Posts: 27
Joined: Jun 2010
 
Posted: 2017-09-08 16:19
@Cheng:
Something like BTC-e?

Cheng


Total Posts: 2838
Joined: Feb 2005
 
Posted: 2017-09-08 19:31
Russian Ruble... money laundering... sounds good to me.

"He's man, he's a kid / Wanna bang with you / Headbanging man" (Grave Digger, Headbanging Man)

rod


Total Posts: 375
Joined: Nov 2006
 
Posted: 2017-09-08 19:36
Aaron also wrote on LedgerX recently:

▢ Aaron Brown, LedgerX will transform cryptocurrencies, Bloomberg, August 2, 2017.

jslade


Total Posts: 1095
Joined: Feb 2007
 
Posted: 2017-09-08 21:37
Cheng: " KYC: my naive approach would be a bitcoin exchange on a nice sunny island with... hhmmm.... somewhat different standards regarding these issues. Or is there no such thing? (I mean, somehow all those dark web drug dealers have to get their money, no?)"

Dark web drug deals are not anonymous, and the government regularly arrests such people based on their financial activities. They also don't move very large amounts of money around, which is why some such places continue to exist.

Bermuda triangle and various mountain banking places don't need bitcoin to launder money. They're plugged into the real banking system already.


"Learning, n. The kind of ignorance distinguishing the studious."

EspressoLover


Total Posts: 245
Joined: Jan 2015
 
Posted: 2017-09-08 23:41
@jslade

I believe you're drastically overestimating how traceable BTC is. If the US banking system is a 1, and Monero's a 10, BTC is at least a 7. You're claiming that BTC is just as "clean" as the traditional banking system. That's ridiculous, BTC fundamentally more amenable to criminal activity by design. That shouldn't really come as a surprise, it's pretty much the point. Cryptocurrency's core constituency are hardcore ancaps who read Snow Crash as a howto guide.

Afaik, there's only been a single arrest based on blockchain analysis, and the user made no attempt to conceal or mix his coins. As long as transactions and timing is randomized, BTC mixers are provably secure. No major mixer has ever been compromised. Helix has openly operated a money laundering service for three plus years and has anonymized billions of dollars. Not one single user has ever been arrested.

Nor is this a thin channel, a Helix user can tumble 21 BTC per hour. That's $68 million per month. Even if somehow all mixers get compromised, you can still launder by hopping blockchains. Convert BTC to Monero, obscure Monero, then convert back to BTC. Absent preventing every single BTC institution from touching Monero/Zcash/etc. there's no way to prevent this.

If BTC anonymity was compromised, then it wouldn't be the case that every single DNM uses it. If there were so many arrests, why haven't they all moved to Monero. As we speak, thousands of coke dealers are moving millions in profit over the BTC blockchain. How can they keep operating with impunity? AlphaBay processed a billion in transactions over four years. It was only shut down because the admin used his LinkedIn email on the password reset message. Why can't 75%+ of Ross Ulbricht's coins be attributed despite the FBI having root access to his devices? Why haven't the WannaCry hackers been arrested?


jslade


Total Posts: 1095
Joined: Feb 2007
 
Posted: 2017-09-09 00:05
Look I don't know why you're gabbling on about the anonymity of bitcoin and hopping blockchains when you can't admit that BTC-USD/anything else exchanges are all KYCed up the ass. Even if what you said is true (it's not; you can trace BTC transactions, particularly large ones which could, say influence BTC futures if it ever got to a hypothetical cash settlement account that wasn't KYCed), it has no bearing on futures based on BTC-USD spot price.

Hopping blockchains? How you gonna do that without using an exchange (where you will be KYCed up the ying yang)? Why is this relevant to BTC-USD futures? And yes, I know about 0x. I actually know those guys IRL.

As for your assertion that nobody has ever been arrested via blockchain analysis; even when using a mixer, you're wrong about that too, as 10 seconds of googling will tell.
https://news.bitcoin.com/chainalysis-ransomware-arrests-coming/

I've actually thought about this for longer than 5 minutes. If you disagree with me, feel free to attempt to fix the spot price of Bitcoin and make bank on the futures markets. I mean, I've enjoyed your poasts when you actually know what you're talking about, but virtually everything you have asserted about crypto-currencies is blatantly false. Why do you do this?

"Learning, n. The kind of ignorance distinguishing the studious."

EspressoLover


Total Posts: 245
Joined: Jan 2015
 
Posted: 2017-09-09 08:11
@jslade

Sorry. Did not meet to offend you or come across abruptly. Obviously you have much more expertise than me: you're in the industry and I'm just a guy that browses /r/bitcoin from time to time. Also, I thought it was implied that the points I didn't respond to were implicitly conceded. Notably I significantly underestimated the extent of regulation on the major BTC exchanges. Again, you would know much more about the ins and outs of the extant major exchanges, so I wouldn't even bother disputing that. Mea culpa, if that wasn't clear.

That being said, even though you've persuaded me on a fair number of points, there are still a few things I disagree on. Sometimes expertise can be a liability, in certain cases that kind of exposure seduces people into groupthink. (E.g. structured credit experts circa 2006 certainly turned out to have some major blind spots). In fairness, I could easily be wrong about any of these points, and am definitely open to revising my priors based on further argument evidence.

> Hopping blockchains? How you gonna do that without using an exchange (where you will be KYCed up the ying yang)?

Non-US crypto-only exchanges have no legal obligation to KYC. This isn't just hypothetical, Shapeshift (based in Switzerland) requires no personal information whatsoever. And even if every legal jurisdiction in the world outlawed anonymous crypto exchanges, there's no reason they couldn't run purely over the dark net. If you don't touch fiat, you don't need any legal or banking presence.

> it has no bearing on futures based on BTC-USD spot price.

So let's assume that the wall between BTC and USD is hermetically quarantined. Just consider actors who stay purely within crypto space. There's certainly enough endemic wealth available (how many bitcoin millionaires are there now?). Unless crypto transactions can be de-anonymized (more thoughts on this below), then avoiding any conversion to/from fiat puts you completely beyond the pale of regulators. You might disagree with the accuracy of the antecedents, but I don't think you'd deny the logic of the syllogism.

So let's try to make a meaningful assertion restrained to pure crypto actors. (You've convinced me that dealing with BTC/USD directly is not an easy route.) I'd contend that this group can *still* monkey with BTC/USD spot. This is pretty speculative (and you probably have a better informed opinion than me) but I'd expect that pumping BTC/ETH hard would have strong spillover effects on BTC/USD. I would expect a similar story for some of the major tertiary coins such as BCH, DASH, and LTC. Although to be fair this is definitely a lot less effective than just directly banging the close at Gemini.

> https://news.bitcoin.com/chainalysis-ransomware-arrests-coming/

There's no actual arrest mentioned here. All I see is a CEO in series A funding, talking up his product. The article is nothing more than a vague promise that one day in the unspecified future Chainalysis' product is definitely going to lead to the arrest of some hackers, who may or may not be the WannaCry guys. Just wait and see, it's definitely coming!

So far, there's been nothing to indicate that blockchain analysis is anything more than vaporware. On the other hand there's a confluence of vested interests pushing the hype train. There's the monero/zcash shills who want to bewilder all the criminals away from bitcoin. On the other side are suits like the Winklevii that need to clean up the public's Wild West like perception of bitcoin. Then there's the standard SV bros who realize that "big-data for cryptocurrency" is an easy sell because it includes not one, but two red-hot buzzwords. Finally you've got CS researchers who are using this to bilk the Feds for grant money and consulting fees.

Of course blockchain analysis works under constrained theoretical cases. But as of now there's nothing to show that it can defeat even garden-variety anonymizers. Again, I could be wrong. Maybe blockchain analysis really is ready for primetime. I think a good test is to see if Chainalysis delivers, and we see the WannaCry hackers (or any major BTC based hackers) get arrested in the next few weeks. (And not for some idiotic opsec error, like attaching a clearnet email to a PGP key). If so, I will come back here and eat crow.

> If you disagree with me, feel free to attempt to fix the spot price of Bitcoin and make bank on the futures markets.

At the risk of coming across as inflammatory again... If you disagree with me, feel free to use the blockchain to dox the identities of DNM operators/vendors and make bank blackmailing them.

jslade


Total Posts: 1095
Joined: Feb 2007
 
Posted: 2017-09-10 05:33
There is really no point in addressing any of this; you don't know what you're talking about, at all, and apparently feel obligated to persist in displaying your ignorance.

You have obviously never conducted a sizeable trade of any cryptocurrency, don't understand what the words "public ledger" mean, have never heard of graph theory, or, apparently, google. I'd as soon argue with you about basic cryptocurrency facts as argue theorems in algebraic topology with a potted plant.

"Learning, n. The kind of ignorance distinguishing the studious."

pj


Total Posts: 3342
Joined: Jun 2004
 
Posted: 2017-09-10 12:05
@ jslade
What sources on cryptocurrencies would you suggest?

Google is powerless in distinguishing grain from chaff or hype.

The older I grow, the more I distrust the familiar doctrine that age brings wisdom Henry L. Mencken

nikol


Total Posts: 423
Joined: Jun 2005
 
Posted: 2017-09-10 15:04
@pj
.
http://bitcoinbook.cs.princeton.edu --> all is in video, cannot find quickly their slides. Couple of month ago downloaded them, can share (pm)
.
https://crypto.stanford.edu/cs251/ --> this seems to have more depth.

Baltazar


Total Posts: 1763
Joined: Jul 2004
 
Posted: 2017-09-11 01:00
there is also a coursera
https://www.coursera.org/learn/cryptocurrency/home/welcome

interesting as a starting point, might have some overlap with your first link as it is also from princeton

Qui fait le malin tombe dans le ravin

pj


Total Posts: 3342
Joined: Jun 2004
 
Posted: 2017-09-11 11:17
Thank you, Nikol and Baltazar!
Looks pretty promising.

The older I grow, the more I distrust the familiar doctrine that age brings wisdom Henry L. Mencken
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