I was thinking about the 21 million coins that will ever be "printed".
But what will prevent people from creating fractions of satoshis digitally? Like 0.1 satoshi, then 0.01 satoshi... then 0.00001 satoshi... then 0.0000000000001 satoshis
If people can create fractions of satoshis withou limits, it's the same as creating more than 21 million coins isn't it? In the end it's just the same as having unlimited supply
Altcoins already accomplish this. No, altcoins don't accomplish it. Creating separate currencies doesn't debase each individual currency. The only way that would happen is if everyone treated alt-coins exactly as they do Bitcoin, meaning they were accepted everywhere bitcoin was and at a comensurate exchange rate so the affect would be people wouldn't care whether they had a bitcoin or a dogecoin, because each tended to be equal. That's clearly not the case. People may choose to hold more than one type coin/currency, but what gives each currency its value is how many people choose the same currency. The reason Bitcoin reigns supreme is that although there are countless alt-coins, out of everyone that holds cryptocurrency (probably in the millions now) more people accept Bitcoin than anything else. That's because of the network effect which will continue into the future. OP, I answered this topic at reddit recently. You may find my comment helpful: So it's less confusing imagine a room full of 50 people. Let's say there is $100 on the table and everyone is told it's their lucky day since it will be divided evenly between them. That means each of the 50 people gets exactly $2 ($2 x 50 = $100). Now, 1 penny is the smallest unit of a US dollar. Let's say on that table was still $100, but it was all in pennies! If we divided the money evenly between the people each person would still get $2 total. However, they would actually have 200 pennies, because on the table was 10,000 pennies (50 * 200 pennies = 10,000 pennies). Simply because we divided whole dollars into smaller units doesn't increase number of whole dollars. Similarly, dividing whole bitcoins into smaller units doesn't increase the number of whole bitcoins in existence. This means if billions of people use 21 million bitcoins chances are each whole bitcoin will be worth many thousands of dollars (or more), although we may call fractions of bitcoins something else like mBTC. Second part of the answer: Bitcoin doesn't have 21 trillion whole units. Bitcoin may have trillions of fractional units, even zillions of fractional units are possible, but that doesn't matter so long as the fractions add up to only the whole. Another way to think of it is in terms of US dollars. The penny is the smallest physical unit of one dollar, but you can trade fractions of pennies too, for example on exchanges like BTC-E. So there is such a thing as zillions of fractional dollars in existence now, but only trillions of whole dollars. |
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Why do you like ripple?
Lots of reasons. Here's a few: 1. It's currency agnostic 2. It eliminates central clearing houses and centralized exchanges 3. It federates payment networks (SMTP for money) ... does the exact same thing, is open source and completely transparent. I wonder why I've never seen Ripple promoters speak favorably about that ... |
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XRP is not an IOU. It's a deflationary, math-based currency, just like Bitcoin.
That's a laugh. XRP is NOTHING like Bitcoin. Bitcoin is completely transparent and provable with math. ALL Bitcoin transactions from day 1 are available for viewing and auditing by anyone. That's not true for Ripple. I understand certain people on this forum want to pump Ripple, but please stop trying to hang on Bitcoin's coattails to do it. |
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Maybe people are realizing Open Transactions which fundamentally more open and transparent than Ripple is a better way forward. |
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That Bloomberg journalist, Matt Miller, was explaining Bitcoin to a hostile panel and commented something like there is an inverse correlation to understanding and acceptance of Bitcoin with age. Therefore he didn't expect his co-host Tom Keene, in his 60s, and adamantly opposed to it to have any chance. In an unrelated conversation Marc Andreessen made a similar comment about Warren Buffet who is famously against Bitcoin, calling him an "old white man".
The fact that Ron Paul, now nearly 80, can speak positively about Bitcoin while explaining the nuances of his position I think speaks wildly to his credit.
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There are no absolute rules for when it is a good idea to accept 0, 1, 2,…, N confirmed transactions. It all depends on your definition of "a good idea." What is nice about bitcoin is that everyone is free to choose the security level they feel is most appropriate for them.
I disagree. I don't think there is ever a good case for believing a high value transaction with 0 confirmations is valid. To put it bluntly, that's actually plain stupid. What if the you're accepting a 0-confirm transaction for $25,000 from your mom? I'd sign over that car she's buying from me before the transaction confirms. It's a specific case, I know, but I think it illustrates my point: the required security level is case specific and up for the person accepting the transaction to decide. I think a better 'rule of thumb' is that one should wait for more confirmations as the risk increases. I disagree. You're talking about a very specific case, "Peter R's mom". It appears you have a nice trustworthy relationship with your family/mom. That's not always the case. When it comes to large sums of money often business rules take priority. If you're talking about a personal special case then Bitcoin plays little role to begin with. I might have a warmer relationship with my mom because I'd sign over the car title before I even saw the transaction. Transaction details become irrelevant. I'm not sure what you are disagreeing with, Acoindr. The example I gave was a specific case, and the number of confirmations one should require is case specific. It seems that you are in agreement on this point. A double spend attempt on a zero-confirm transaction succeeds with probability P. A payment processor who conducts network research and who employs a well-connected listening node can estimate what P is. If R is the risk that a given person attempts to double spend, then the expected losses, L, are L = P x R. If P = 10% and R = 2%, then you expect losses of 0.2%. If your customers are less trustworthy, perhaps R = 20%, in which case your expected losses increase to 2%. You as a merchant can now use this information to make your decision. Does the benefit of accepting zero-confirm transactions, given the risks, outweigh the loss of business by not accepting them? What value limit should you enforce? Does L% cut too far into your margins (e.g., a grocery store), or is it largely irrelevant (e.g., a fine dining restaurant)? I agree it is important to educate people about the risks of 0, 1, 2, …, N confirm transactions (it would also be good to compile empirical statistics for P and R in various industries and network conditions). One of the goals of this thread was to do exactly that, as was Peter Todd's Reddit post. The problem I have with what you're saying is, as I said above, as information disseminates it often becomes diluted. For example, long before MtGox exploded I vehemently warned people not to store coins longer term on ANY online service. I did so repeatedly. Long time forum users probably have seen this. Yet I read at falkvinge.net Robert Falkvinge lost over 100K at MtGox precisely because he thought they were a safe place to store coins. He wasn't alone. I worry that "sometimes trusting zero confirmations" becomes "zero confirmations are fine" as information spreads. If you begin explaining to most users they need to calculate P over R multiplied by X to decide whether they should accept certain transactions they're going to look back with a blank stare. People are simple. Cash is simple. Transactions are usually simple. That's the model Bitcoin is trying to fit in. For that it makes sense to inform people of simple hard and fast rules they can use to not get into trouble. If people want to customize acceptance polices on their own of course that's fine. However, in general people should be advised as follows: more confirmations = always better six confirmations = minimum to consider transaction final, use this as a standard less than six confirmations = use at your own risk zero confirmations = inherently untrustworthy* *the difference between zero confirmations and 1 confirmation is essentially classifying an attack as theoretical only (1 confirmation) to quite possible and practical (0 confirmation) |
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There are no absolute rules for when it is a good idea to accept 0, 1, 2,…, N confirmed transactions. It all depends on your definition of "a good idea." What is nice about bitcoin is that everyone is free to choose the security level they feel is most appropriate for them.
I disagree. I don't think there is ever a good case for believing a high value transaction with 0 confirmations is valid. To put it bluntly, that's actually plain stupid. What if the you're accepting a 0-confirm transaction for $25,000 from your mom? I'd sign over that car she's buying from me before the transaction confirms. It's a specific case, I know, but I think it illustrates my point: the required security level is case specific and up for the person accepting the transaction to decide. I think a better 'rule of thumb' is that one should wait for more confirmations as the risk increases. I disagree. You're talking about a very specific case, "Peter R's mom". It appears you have a nice trustworthy relationship with your family/mom. That's not always the case. When it comes to large sums of money often business rules take priority. If you're talking about a personal special case then Bitcoin plays little role to begin with. I might have a warmer relationship with my mom because I'd sign over the car title before I even saw the transaction. Transaction details become irrelevant. However, for the large majority of transactions people make transaction details are relevant. For that they should clearly understand 0 confirmation transactions themselves are inherently untrustworthy. That's the simple truth. As long as people base their actions on that factual knowledge there shouldn't be a problem. I believe that as we move forward with bitcoin, we will find that zero-confirm transactions are "secure enough" in more cases than we currently expect.
The only ones I'd expect are transactions of low value, unless of course a familiar relationship between the parties exists. And I also expect that in other cases we will want to wait for perhaps 144 confirmations (24 hours). For example, if I was a gold broker, I would not physically release 20 kg of gold during a network hard fork event (like we had in March 2013) until I was sure that the network had truly settled on a fork and the payment for the 20 kg of gold was included.
Such cases are increasingly unlikely as Bitcoin adoption grows and major code changes (and opportunity for bugs) become fewer, but I agree about waiting for unexpected network events to settle. But I hardly think these debates matter--what matters is that people have a way to protect themselves. The network will evolve to have certain properties. People are free to make the decision they feel are best for them given these properties.
I think this topic and Peter Todd's contribution do matter. If we want people to adopt Bitcoin for common usage we need to tell them how to use it in a safe manner. That involves technical considerations they will likely have no clue about. It's therefore the job of people who do know to inform them appropriately. The network already has certain properties, many of which won't change. One is the fact that 0 confirmation transactions are inherently untrustworthy from a network standpoint. Unless you fundamentally change how Bitcoin works that will remain a fact. |
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...it is never a good idea to use information from unconfirmed transactions.
I've also heard it is never a good idea to say never. I obviously contradicted my own statement by describing an exception with low value transactions. The problem is information dissemination tends to become diluted as it spreads to larger groups of people. For that reason I'd rather the advisory went out as 'never' than anything else because following that won't get people into trouble. There are no absolute rules for when it is a good idea to accept 0, 1, 2,…, N confirmed transactions.
I disagree. I don't think there is ever a good case for believing a high value transaction with 0 confirmations is valid. To put it bluntly, that's actually plain stupid. It all depends on your definition of "a good idea." What is nice about bitcoin is that everyone is free to choose the security level they feel is most appropriate for them.
I disagree again. Most people in my experience don't like losing their money. Over time, we will compile statistics on the loss % due to 0-confirm transactions in various circumstances, as well as establish best-practices to guide users who may consider accepting them. But we will compile similar statistics for 1-confirm and 2-confirm transactions too because they can also be double-spent.
The difference in likelihood of a double spend occurring with zero, 1 or 2 confirmations is like comparing apples and oranges. None of those situations is like the other. To be clear, people should never use information from unconfirmed transactions. If you abide by that simple guideline you will probably never go wrong. With today's hash rates even a single confirmation provides good indication the transaction is valid and final. However, the official recommendation is always to wait for at least 6 confirmations before considering a transaction valid and final. More confirmations provide ever more assurance, but 6 is regarded to be quite safe for all cases. Note there are theoretical attacks which can put 6 confirmations in the realm of question, but these are theoretical not necessarily practical, and that possibility diminishes as Bitcoin gains ever wider adoption and hash power. |
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I think this is a great heads up by Peter Todd. Whether or not it can be called a double spend I think is debatable. It depends more on us and how effective our education is. To be clear, and core devs have reiterated similar (in light of the MtGox malleability issue), it is never a good idea to use information from unconfirmed transactions. One shouldn't trust any info from unconfirmed transactions because in a decentralized trust-less system confirmations are the only thing you can trust. Now, there is consideration for low transaction value, since at worst only a few dollars of value are lost, but that's a judgement call. An example is buying a cup of coffee. The helpful information Peter has provided allows pay recipients to fine tune judgement about likelihood of fraud. Previously it was known double spends in the unconfirmed transaction realm are certainly possible, but the difficulty was considered high enough to somewhat discourage use. Peter shows the difficulty bar to be much lower, which is something to consider. However, I agree with the top comment at reddit: 0 confirmations to me are a bit like print fake dollars. With the right effort, you can print some $1 or $10 bills that can fool most people if you make a quick transaction in a store, but they'll notice afterwards, it's detectable, traceable, if you do it a couple times they'll know it's you. A bit similar to ordering coffee and then running off. If 0 conf double spends happen when you buy some coffee in a store, you're gonna get issues just like with fake money or running without paying. It's just not something people tend to do even if they can. I also think Peter is right that alternate payment transfer types will make this much less of an issue in the future. |
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I'll give some advice which should never steer you wrong:
1. Don't put more in crypto than you can afford to lose.
2. Always diversify.
3. Don't invest in anything you don't understand.
You've already addressed #1, so I'd definitely hold some crytpo. With respect to #2 I'd hold onto some silver (I think others have wisely said similar). That leaves #3 which is how I'd determine how much to put into each. I personally understand cryptocurrency a whole lot better than the silver market (which I think I have some clue about too), so I personally would load up on crytpocurrency.
The fact you already hold a significant part of your wealth in something tangible other than fiat puts you far ahead of most of the world's population. The fact you also have the opportunity to get into crypto while it's even more obscure on the world stage than gold/silver which have been around thousands of years advances you further. In other words you're doing pretty well either way. The only thing I'd have on my wishlist in addition, if at all possible, is some way to hold property/land. Having precious metals, cryptocurrency and land is the best possible asset portfolio going forward IMO.
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Here, iGROWyourBiz, do me a favor and read the following. It's a link to RT, an international multilingual television network, the second most watched foreign news channel in the US after the BBC in 2011, not a link to a guy named Jerry Robinson's website: http://rt.com/op-edge/gold-manhattan-new-york-594/The total value of the New York Federal Reserve's gold bullion trove of 6700 tonnes is a staggering $368.5 billion.
But according to the New York Federal Reserve: "We do not own the gold. We are mere custodians."
The gold is in "safe-keeping" on behalf of more than 60 sovereign countries and a few organizations. Close to 98 per cent of the gold bullion stored in the NY Fed's lower Manhattan vaults, according to the Fed, belongs to central banks of foreign countries.
The remaining 2 per cent "is owned by the United States and international organizations such as the IMF."
 A wall of gold bricks in the globally owned collection at the Federal Reserve Bank of New York. (Photo courtesy of the New York Fed’s press center) |
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uhm -- did you bother to read the article? if not, then I have no clue how you can say something you have not read is "nonsense". ...
uhm -- did you bother to read my comment? I didn't say the article is nonsense. I posted the article because it supports my position. EDIT: your above quote is confusing because you linked the zerohedge article I posted. Now I realize you probably meant the article you linked farther up, the one that looks like an informational landing page to a get-rich-quick scheme: http://ftmdaily.com/preparing-for-the-collapse-of-the-petrodollar-system/ No I didn't read that, but I don't need to in order to know the statement "we got tired of handling the world's gold" is nonsense. "By the end of the war, nearly 80 percent of the world’s gold was sitting in U.S. vaults and the U.S. Dollar had officially become the world’s undisputed reserve currency." "As nations lined up to convert their dollar holdings for Washington's gold, the United States realized that the game was over. Clearly, America had never intended to be the globe's gold warehouse. Instead, the convertibility of the dollar into gold was meant to generate a global trust in U.S. paper money." Quotes from the article....soooo...yah as I said...BOTH What exactly is your point? |
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uhm -- did you bother to read the article? if not, then I have no clue how you can say something you have not read is "nonsense". ...
uhm -- did you bother to read my comment? I didn't say the article is nonsense. I posted the article because it supports my position. EDIT: your above quote is confusing because you linked the zerohedge article I posted. Now I realize you probably meant the article you linked farther up, the one that looks like an informational landing page to a get-rich-quick scheme: http://ftmdaily.com/preparing-for-the-collapse-of-the-petrodollar-system/ No I didn't read that, but I don't need to in order to know the statement "we got tired of handling the world's gold" is nonsense. |
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Do you realize this is why we went off gold standard? When you make currency convertible to a commodity. The supply cant keep up w demand. It leads to liquidity crisis
No that was to provide camouflage cover. The real reason we went off the gold standard was to accommodate big government. The US population in 1971 was about 200M and about 300M in 2008 or a 50% increase in 40 years. Take a look at the chart below. Over that same time period 1971-2008 the US monetary base increased about 700% in 40 years. Even worse from 2008-2012 or just 4 years it increased 300%! Liquidity crisis my rear. We're absolutely swimming in dollars. You should really listen to the following Peter Schiff episode. He really nails it talking about average people living on about $50 per week in the 50's yet having a full family, feeding & clothing the kids, without the wife working, and typically without a high school diploma, but it's because in today's dollars a comparable person would need to earn $140K per year. https://www.youtube.com/watch?v=kHDcl5aiGus&list=UUIjuLiLHdFxYtFmWlbTGQRQ actually that is also camouflage... we got off gold (silver and gold certificates) to Federal Reserve Notes because we got tired of handling gold for the world and to secure the future of a global currency backed by oil. ie the petrodollar this is not someones opinion...this is historical fact: http://ftmdaily.com/preparing-for-the-collapse-of-the-petrodollar-system/Which part is historical fact, getting tired of handling the world's gold or moving to the petrodollar? I can agree with the latter but certainly not the former. What are we, gold box boys at the supermarket? If we're so tired of handling peoples' gold, which by the way consists of moving a sticker from one stack to another while the physical gold doesn't move, why is our response to Germany upon request for their gold back, sorry we can't give it to you all at once, but will instead stagger shipments over several years? http://www.zerohedge.com/news/2014-01-19/germany-has-recovered-paltry-5-tons-gold-ny-fed-after-one-yearWe got tired of handling other peoples' gold. What a bunch of nonsense. |
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yes they are making an example of him. he moved large amounts of money and had connections to silk road so it isn't surprising
It's not? Shrem moved no more than a few million dollars and there were legal items which could be bought on Silk Road Marketplace in addition to any illegal ones. Meanwhile HSBC provides upward of 1 billion to terrorists, drug cartels, and criminals and nothing happens: http://www.bloomberg.com/news/2012-07-16/hsbc-aided-money-laundering-by-iran-drug-cartels-probe-shows.htmlHSBC Holdings Plc (HSBA)’s head of group compliance, David Bagley, told a Senate hearing he will step down amid claims the bank gave terrorists, drug cartels and criminals access to the U.S. financial system by failing to guard against money laundering.
[HSBC] ignored links to terrorist financing ... documents show HSBC decided to cut ties with the bank before reversing itself under pressure from Al Rajhi, which received shipments of $1 billion in cash from HSBC’s U.S. operation from 2006 to 2010, according to the report.
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Are you going to provide a link?
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Do you realize this is why we went off gold standard? When you make currency convertible to a commodity. The supply cant keep up w demand. It leads to liquidity crisis
No that was to provide camouflage cover. The real reason we went off the gold standard was to accommodate big government. The US population in 1971 was about 200M and about 300M in 2008 or a 50% increase in 40 years. Take a look at the chart below. Over that same time period 1971-2008 the US monetary base increased about 700% in 40 years. Even worse from 2008-2012 or just 4 years it increased 300%! Liquidity crisis my rear. We're absolutely swimming in dollars. You should really listen to the following Peter Schiff episode. He really nails it talking about average people living on about $50 per week in the 50's yet having a full family, feeding & clothing the kids, without the wife working, and typically without a high school diploma, but it's because in today's dollars a comparable person would need to earn $140K per year. https://www.youtube.com/watch?v=kHDcl5aiGus&list=UUIjuLiLHdFxYtFmWlbTGQRQ |
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I read "sidechain alts" destroy (small) amounts of BTC.
That doesn't sound sustainable....?
No, it's some of the meta coin proposals that do that from what I understand. Sidechains introduce something called "two way pegging" (thanks to gmaxwell) which allows bitcoins to flow back and forth from the side chain. That's why I see a lot of potential with them. |
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You know, it's probably 3% or less of the world's population that really understands Bitcoin. If you get into alt-coins those meager numbers drop further. Don't mention meta coins like Mastercoin, and now there is 'side chains'.
I first dismissed Bitcoin because I misunderstood it. When alt-coins arrived I understood them but dismissed them as unnecessary. However, I later viewed them as playing an important role for the cryptocurrency community, namely providing backup and alternative to Bitcoin. I felt this was necessary for many reasons, some technical, some economic, but above all else because it's hard to gain consensus the more people there are and Bitcoin naturally wants the largest possible userbase. That seemed inherently problematic to me, something which became fairly pronounced with the community uproar over Bitcoin Foundation, a potentially dominant force for centralizing power. That caused me to see that alt-coins could be valuable after all by easing pressure over infights with only one blockhain in which everyone had invested stake. Hard forks of course could be disastrous. Indeed I've seen various heated topics come up where people have talked of storming off to an existing or new alt-coin, like zero coin. Had alt-coins not been seen as a viable option these would have been potential Bitcoin hard forks brewing, not good.
I've listened to the LTB podcast on side chains. They are the first cryptocurrency related technology where out of the box I see the value (I'm still not there with meta coins). Whether or not side chains kill off alt-coins remains to be seen. I doubt they kill off the strongest alts, but it may clear many of the bottom of the ladder ones. I still have questions about how side chains can do all they promise on a technical level, namely in terms of scalability, while still relying on decentralized mining and record keeping, if that's indeed how they work. So I'm not entirely sure how side chains will impact our community, but I do think they hold large, potentially very large promise.
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