empty vessel
Member
All of which will be lost. You can't take a fraction of something that no longer exists. And you can lose a fraction of something you previously divided.
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Bitcoin community in panic as major exchange goes AWOL.
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All of which will be lost. You can't take a fraction of something that no longer exists. And you can lose a fraction of something you previously divided.
How though when even the smallest fraction of bit coin left can be split into literally an unlimited amount.
empty vessel
Member
Bitcoin cannot do that. It can allow for more decimals, but it cannot force people to actually divide them. To be sure, as deflation continues, it will be more necessary for individual users to resort to smaller and smaller divisions for whatever transactions they make, but this doesn't solve the problem in the least. Smaller and smaller divisions of something can be lost just as larger divisions of something can be. And once it is lost, it is gone forever.
onadesertedisland
Member
What you want is to have your little market where you can get rich for doing nothing, and be accepted for not being a scam.
Propping up bitcoin through evangelism will only get you so far. When vendors stop accepting bitcoins, bitcoin is useless and worthless.
Right now people are cautiously exploring the idea of trading bitcoin for goods and services.
The mentality behind some bitcoin supporters has that air of being off. Sort of like the prepper community. If that's your thing, so be it. I just see it for being a wildly unpredictable pseudo-currency full of scammers and not usable for trade.
The problem EV brought up about replacement is a fundamental flaw in the system. Fractionalization may address part of that, but the early adopter hoarding gives off so many vibes of being a pyramid scheme. Is this simply for squeezing out profit from a speculative market, or a real attempt at becoming a currency? I think the former.
Propping up bitcoin through evangelism will only get you so far. When vendors stop accepting bitcoins, bitcoin is useless and worthless.
Right now people are cautiously exploring the idea of trading bitcoin for goods and services.
The mentality behind some bitcoin supporters has that air of being off. Sort of like the prepper community. If that's your thing, so be it. I just see it for being a wildly unpredictable pseudo-currency full of scammers and not usable for trade.
The problem EV brought up about replacement is a fundamental flaw in the system. Fractionalization may address part of that, but the early adopter hoarding gives off so many vibes of being a pyramid scheme. Is this simply for squeezing out profit from a speculative market, or a real attempt at becoming a currency? I think the former.
But I thought the blockchain was supposed to alleviate this? If all movement is tracked, where would the loss be?
Wat.
A successful speculator has to predict ahead of time what something will cost in the future. When they do business based on that prediction, they cause the prices to get there faster. When that future price reflects actual value (as opposed to being a random bubble thing), the speculator is speeding up the allocation of resources to productive uses and away from non-productive uses. They are adding liquidity to the market; when no one has an immediate concrete need for a good, a speculator may still want it. They are assuming risk; if the speculator predicts wrong, they're giving money to others. These are valuable contributions not unlike those of an investor.
onadesertedisland
Member
I'd say the difference here is usually speculators in that sense purchase tangible goods. Bitcoins have real value only when converted.
That isn't conjecture. Lost currency and issues of scarcity are real-world effects that are critical to the survival of any modern currency.
The only reason why Bitcoin doesn't have a replacement mechanism is to artificially induce scarcity -- which makes it behave more like a commodity than a currency.
empty vessel
Member
People lose access to the bitcoins they own permanently. For example, this guy. Thus, those coins drop out of circulation forever.
usernamechange
Member
-demands people do their own research when they disagree with you
-demand research done for you when you disagree with them
bitcoinsupporters.txt
Osiris
I permanently banned my 6 year old daughter from using the PS4 for mistakenly sending grief reports as it's too hard to watch or talk to her
Just because the blockchain stores a record of the transaction that put a bitcoin (or part of) into a particular wallet doesn't make that bitcoin recoverable if the wallet is subsequently deleted or lost. There's a reason the bitcoin faithful are told frequently to back up their wallet, that's because if you lose your wallet, you lose the bitcoin in it for ever if you don't have a back-up, and as the wallet is ultimately just data, like most data, the likelihood for loss is great if not greater than the likelihood for loss of a real physical currency.
Think of the guy that held thousands of dollars worth of bitcoins on a old machine he accidentally sent off to a rubbish tip, leaving his wallet on it last year.
Those bitcoins are likely gone forever, not just for that user, but from bitcoin forever, for everyone.
But, given that bitcoin allows for an infinite number of decimal places, as the price of bitcoins goes up (which is a plausible result of bitcoins being lost) people will have more reason to divide them. In order to hit 0 bitcoins all outstanding bitcoins would need to be lost in a short enough period of time that nobody starts dividing and spreading around the bitcoins they have left.
So I don't think "there will be zero of them eventually" is a very compelling criticism, compared to the weaker-sounding "it's deflationary". There's not much risk of that happening before the speculative bubble bursts. Or before it becomes feasible to crack the system and generate private keys for other people's wallets.
Data Elemental
Member
Technically, such a switch is absolutely possible, but would require a hard fork of the block chain and thus agreement from the majority of miners.
If your point is that at some point in time every single holder will have managed to lose their private key, before sending at least part of their (at that point likely quite valuable) balance to somebody else, I'm not sure what to say. It doesn't seem exceedingly likely to me. Are more likely scenario with possibly catastrophic results would be the creation of quantum computers powerful enough to break ECC, but even that could possibly be mitigated to some degree.
I would be inclined to argue that there is something wrong with your statement that batches of 32bit or 64bit values get lost easier if they contain tinier numbers, especially if they are valuable in some manner. As a matter of fact, it seems to me, like early adopters were more likely to lose their coins, because they had a low value and users didn't bother making backups of their wallets or just deleted them after toying around with the whole thing for a bit. Nowadays, people are presumably more inclined to take care not to lose their private keys.
They lose the private key for their address. Thus, coins belonging to that address become inaccessible.
Exactly. It is more likely that it becomes feasible to crack private keys before mining no longer generates new coins, than all coins becoming lost after that point in time in a scenario where people actually still use them.
Edit: Clarified last part.
Osiris
I permanently banned my 6 year old daughter from using the PS4 for mistakenly sending grief reports as it's too hard to watch or talk to her
Untrue, Bitcoin currently only allows for division down to 8 decimal places, aka a "Satoshi"
A "hard fork" would be necessary to allow further subdivision, something that gets harder to perform each year, due to the effects a hard fork has on the blockchain and Bitcoin ecosystem.
onadesertedisland
Member
At what point would it become computationally more efficient to crack private coins than produce new ones?
I get it, the Bitcoins are still there but they are just locked from access.
'I lost my password' is enough to become broke. Got it.
Fair enough, hence the caveat. People were talking like infinite division was possible.
Still, though, the price of a bitcoin has to rise to $1,000,000 before those Satoshis are worth more than a penny apiece.
Supposing some constant percentage of outstanding bitcoins are lost every year and that the total value of outstanding bitcoins is constant, it'd probably still take a very long time before Satoshis become worth more than a penny and this decimalization becomes an issue. For a 1%/year loss rate, starting from $500/btc, it'd take over 750 years.
Speculating on something tangible isn't that substantially different from speculating on intangible things, such as usage rights to something or Bitcoins. Bitcoins have some value as a means of exchange, at least for now; a speculator who takes a long term position in Bitcoins is predicting that value to increase.
I'm never going to get a video card for cheap am I
I gave you this reason and you ignored it!
A currency needs to be a commodity that's limited in supply and not in demand for any practical use -- otherwise it's not a currency, it's just a component of a barter economy and suffers from those problems. (This is to say, wheat, or cows, or iron, are all bad currencies, because people can manufacture them and people tend to use them for non-currency purposes, which will make them terribly inconsistent as stores of value.)
But if a currency is a commodity that's both useless and hard to get, why would anybody accept it? For a currency to work, a third ingredient is necessary -- people have to believe, after accepting it, that they can trade it for other goods and services. This is a classic network effect problem.
Luckily, there happens to be a time-tested solution to this -- charge people some sort of tax or fee, and explain that it can only be paid in your currency. Voila, you're the demander of last resort. If people have a reasonable expectation of paying taxes or encountering somebody who will, they can safely trade in your currency. This creates a baseline demand pattern which gives your currency enough stability and gives merchants a reason to accept it.
Notice what happens to the currencies of countries that are not expected to be able to collect on their taxes due to military or organizational crises. Two classic examples here are Weimar Germany and civil war Zimbabwe. Sound familiar?
From a currency perspective, Bitcoin has two of the three legs covered -- it's limited in supply and has to practical use. But it's in the unenviable position of being a currency without an army, and thus without any taxation authority. Without a Bitcoin-mandatory demand, what's the point of collecting Bitcoin as a merchant? First of, you'd only do it if you felt very confident of encountering a lot of Bitcoin users -- like, say, if you ran a computer parts supply company such as Tiger Direct. You'd need to be very confident of clearing your currency market, because you'd dump to a stable store of value immediately after every transaction. How many bitcoins does Tiger Direct hold in its account, versus holding as dollars?
There's a real, factual, even physical reason why Bitcoin's not a real currency. It has nothing to do with magic or morals. It's the same reason that gold's not a real currency any more. It has to do with the way currency actually works.
mashoutposse
Ante Up
Bitcoin's characteristics strongly encourage hoarding over spending. It is not at all suitable for use as a currency.
Combine that with its complete lack of intrinsic value, and BTC will not survive past the point when there are not enough unsophisticated players willing to fund the profits of the professional speculators. The price will then crash and the Bitcoin experiment will be over.
Combine that with its complete lack of intrinsic value, and BTC will not survive past the point when there are not enough unsophisticated players willing to fund the profits of the professional speculators. The price will then crash and the Bitcoin experiment will be over.
None because they automatically exchange them for dollars in less than a day via bitpay.
They don't want the bitcoins. They want the dollar equivalent to the good the bitcoins can be quickly exchanged for.
criesofthepast
Member
While you guys were arguing, I just made another $50 selling this monopoly money on my lunch break.
I'm taking this yacht to South America!
I'm taking this yacht to South America!
Data Elemental
Member
Regarding the lost coins issue: The last coins will likely be mined in 2140, so that is the earliest possible point in time at which all bitcoins ever can be lost, because no new ones will be produced anymore. Unless there is a hard fork and subdivisibility is increased.
Unless there is a mathematical breakthrough or we get bit quantum computers to work well enough, it won't. Even with quantum computers, you can only break private keys of addresses, which have already published their public key by making a transaction or otherwise signing a message. Of course, to spend anything, they have to sign something, allowing an attacker with sufficiently fast computation to create a another transaction and race them.
Mining bitcoin using GPUs is no longer cost efficient, to the best of my knowledge. Blame some other cryptocurrency.
This is what we in the business technically call "not true."
http://openstates.org/ca/bills/20132014/AB129/
AB 129 passed one house of California's state Congress. There are at least two more steps to go. Technically, it's still illegal to "put in circulation" bitcoin in California.
Personally I don't think it really matters -- obviously people are still doing it. I don't see that anybody is worrying about the law. But if you're excited about it being changed, unfortunately, it has not yet been.
That's what I'm talking about.
A currency that you always get out of immediately isn't a currency. It's a commodity. Companies may accept commodities as payment sometimes, but they'll always bail out of them in favor of currencies immediately. It's just accounting in action.
onadesertedisland
Member
Regarding the lost coins issue: The last coins will likely be mined in 2140, so that is the earliest possible point in time at which all bitcoins ever can be lost, because no new ones will be produced anymore. Unless there is a hard fork and subdivisibility is increased.
Unless there is a mathematical breakthrough or we get bit quantum computers to work well enough, it won't. Even with quantum computers, you can only break private keys of addresses, which have already published their public key by making a transaction or otherwise signing a message. Of course, to spend anything, they have to sign something, allowing an attacker with sufficiently fast computation to create a another transaction and race them.
Mining bitcoin using GPUs is no longer cost efficient, to the best of my knowledge. Blame some other cryptocurrency.
If the computational power to find a new bitcoin is upped after each interval, and quantum computing becomes available, I don't see why this would not be a potential threat. The trust of the bitcoin is that it can be spent only once. But if by looking at the chain an attacker can simply break the private code for the coins and utilize them, I see this as a potential dead end as well.
That kinda falls into EV's 'money in an envelope' analogy.
criesofthepast
Member
Oh, seems that is right. Still needs to pass in the senate. Still positive news though.
i totally ordered food with buttcoins once. it ended up costing about the same as it would've with paypal, except it was 5x as much of a hassle.
i want to die
Data Elemental
Member
Quantum computers are a danger because of specific techniques they allow, which will break certain (but not all) types of cryptography, such as elliptic curve cryptography.
To efficiently break an ECC private key, even a quantum computer will first have to know the public key, or do the QC equivalent brute-force (Grover's algorithm), which will reduce the required search time complexity to the square root of that for traditional brute-force. With 256-bit private keys, Grover's algorithm would basically reduce them to 128-bit keys, which should still be secure enough.
If the public key is known, you can take a big shortcut. The question then becomes, whether this short-cut will allow you to break the private key fast enough that you can create a transaction for an address (after it published its public key by broadcasting a transaction) before the original transaction is included into a block and clears out the address you are generating a key for. If this is becomes possible, bitcoin will have a big problem. Otherwise, it might survive QC, as long as no addresses are ever reused.
It's definitely a danger and a risk to be aware of.
I think I clearly mentioned this was about food delivery. Over 5000 restaurants in the Netherlands deliver food paid by bitcoin. The fact that they are using 2 other parties to accomplish this (Takeaway and Bitpay) is irrelevant.
Restaurants can choose to keep the bitcoins and don't exchange them right away. I doubt many do, but that's again not relevant.
My point is that I can use bitcoin to pay for my food. It's fast and hassle free. Thus the argument of "useless internet money" is shot down. It's a very usable medium of exchange.
(again, I'm not saying it doesn't have issues)
You're just talking rubbish and you know it.
That story is highly suspicious and impossible to verify with this little to go on.
But regardless, this "disappearance of bitcoin" is not a problem. Yes, they will one day all be lost, but that's not before 2140 (when mining dries up) and (barring nuclear holocaust) probably much, much later. I wonder which countries will still be around at that point. Will we even have a use for bitcoin?
Of all the problems bitcoin has, this is probably on the very, very bottom of the list.
The whole "trend to zero" bit isn't important for actually getting to zero, it's for the trend part. Bitcoin is inherently deflationary, even with mining as it's not enough to keep pace. Having less BTC around is deflation. Using smaller divisions and reducing prices is deflation.
Data Elemental
Member
I don't think anybody argued that this was not the case. I do think, however, that that was not the point empty vessel was trying to make. Ve was specifically talking about every single coin being lost.
Multiple times he said it would happen much later than the value of coins being lost.
Data Elemental
Member
I have looked through the last pages and couldn't find a post such as you mentioned, so I likely missed it. Could you please help me and point out one of the posts, where empty vessel says that the value will likely be lost long before no single coin remains?
empty vessel
Member
That's a larger point about overall viability. People who say that bitcoin is here for good are as a factual matter wrong. It is impossible for bitcoin to be here for good because it was designed to disappear.
The more immediate point, however, is essentially as Hitokage stated. Plus, I think the thing will crash and meaningfully cease to exist long before the absolute number of accessible bitcoins reaches 0. Still could be a long time before even that, though, given the nature of the setup. The deflationary aspect of bitcoin (of which the loss of bitcoins will play a part) will benefit early adopters at the expense of later adopters, which is kind of the sine qua non of a pyramid scheme. I won't try to persuade anybody that they should conclude bitcoin is a pyramid scheme, but I do think it has its fundamental attributes. It's just going to play out over a very long period of time.
BS! There are lot of people interested in BC due to it's tax-dodging, black trade and money laundering opportunities as well!
empty vessel
Member
And foolishly so!
The bolded part I think is not right. Once those divisions occur, the process of erosion continues just as before. It is now just acting on those smaller pieces instead of larger ones. And when bitcoins are lost, they are usually lost in chunks anyway, one wallet at a time. And for people who don't spend their bitcoins, they may well have large chunks still available to be lost well into the future. That said, I don't really disagree with the overall thrust of your comment, although (1) it remains to be seen just how easily further divisible bitcoin is; and (2) I think people tend to underestimate the rate at which bitcoins will be lost, which is still not to say that I think bitcoin will approach 0 before it crashes and burns, but I do think it will play an appreciable role in deflation that I think most people do not understand or consider.
Osiris
I permanently banned my 6 year old daughter from using the PS4 for mistakenly sending grief reports as it's too hard to watch or talk to her
And this is why it doesn't work as a viable currency. Say that yesterday I wanted to eat at a fancy dutch restaurant. Would I pay on Bitcoin? Of course not! I would have a lost money. So, when should I spend my bitcoins? When it at a peak, of course... that isn't a currency, that's speculative investment.
Hey, I'm pretty sure you could that a solid argument could be made for the pros of transferring your drug money through bitcoins versus hidden on a car tire. Plus this kind of speculative and untraceable bubbles are excellent for money laundering.
Osiris
I permanently banned my 6 year old daughter from using the PS4 for mistakenly sending grief reports as it's too hard to watch or talk to her
Yes, because every drug lord just loves the idea of their transactions being published on a traceable public medium, ideal for post-arrest investigation
That's why they keep their deals in easily found written ledgers in the movies
Yeah, the volatility may be less than a year ago, but it's still significant. About -30% during the day, but it recovered most of it again during the night. Lunch would have been expensive, dinner less so!
We're still very much in the speculative phase. Expectations are these swings will become less drastic as time goes on. The most well known exchange going AWOL didn't even do that much in the end.
I'll take my cash down to any restaurant in the world; you can take your Bitcoin wallet. I know which one of us will get served without getting called by the cops for failure to pay at the end of the meal.
In the end, you're still paying for your meal with dollars (or Euro, in your case). The restaurant never sees a Bitcoin, doesn't have a Bitcoin wallet, and probably doesn't even care.
Delusibeta
Banned
Ultimately, it serves as a lesson to not put all your money into a proof of concept, and definitely not put your money into an exchange site for Magic the Gathering Online.
EatinOlives
Member
If this is not a troll, it's posts like this that Bitcoin gets its terrible reputation.
You're talking out of your ass, not unlike a speculator brainwashed into a Ponzi scheme. People become rich by taking smart risks. For every "risk-taker" who "hits big", there are hundreds who lose it all. You're going to be one of them. And the worst part of it is that Bitcoin isn't even a Ponzi scheme, but you're certainly treating it like one.
Bitcoin is a digital currency. That's it. It's not a gold mine, or a get-rich-quick scheme, nor the secret to "hitting it big", nor your gateway into tons of money for doing nothing. You're projecting your delusional wishes into a cryptocurrency that has no chance at meeting your expectations. Insulting people with the bolded above makes it extremely obvious. That language is just barely one step away from "WAKE UP SHEEPLE".
While you guys were arguing, I just made another $50 selling this monopoly money on my lunch break.
I'm taking this yacht to South America!
We haven't left the dock.
Even if, for the sake of argument, we accept bitcoin as a currency(Et videndum nec erat denarios) it's deflationary nature makes it a crappy one. country's didn't leave the gold standard because of a hatred of Freedom, they left it because of problems inherent to the system.
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