Thank you  

I wholeheartedly agree with your viewpoint. It is beneficial for the future development of Bitcoin
if people continue to look for unconventional solutions to problems.

I concede that the concept of probabilistic payments probably has been "on the shelf" for a while and not much has happened.
However, the concept has recently resurfaced in conjunction with the Lightning Network.

Take a look at the following paper:
https://courses.csail.mit.edu/6.857/2017/project/7.pdf


I happily admit that I´m probably not particularly impartial about the whole concept,
because I fell in love with the idea the first time I read about it.

I also have to admit that the solution mentioned by you in your earlier post has a
few other advantages:

Especially in terms of security scaling on a different protocol layer is a brilliant solution. Instead
of putting the main layer at risk by trying out new scaling solutions you also abstract the risk
away by making use of a different protocol layer.

This is also the reason why the Bitcoin Cash
roadmap is so dangerous. Let´s assume that they actually use 1GB blocks in the future
and encounter unforeseen issues. In this scenario they would have to roll back a change
like this on the main blockchain, which would be dangerous as well as a huge loss of trust.
If we assume that the Lightning Network of the real Bitcoin will encounter unforeseen issues
down the road, this doesn´t jeopardize the main layer at all.

This is basically the beauty of abstracting features away into different protocol layers in a nutshell.

I intend to start using Poloniex again (even though the rates are already back to lower levels).

I don´t know if you have read it already, but apparently they are being bought
by Circle:
https://modernconsensus.com/2018/02/02/circle-set-acquire-poloniex/

Circle has raised nearly 200M $ in venture capital and is well connected
to the relevant regulatory entities (e.g. they were the very first company
to get one of the BitLicenses from NY back in the day).

I´m sympathetic to this viewpoint. Many people don´t seem to bother with the merit system
at all, which artificially reduces the supply of merit. I read somewhere that roughly 600k merits
were initially distributed. As of now merits are not really circulating as freely as theymos envisioned
it. The situation is going to get worse, because only ~11k merits are generated by the merit sources each month.

If the system is not working properly in spite of the huge supply due to the initial starting
balance of each user, how is it ever going to work when new merits are only generated by merit sources?

I know the theory is that merits will trickle down, because each awarded merit generates 0.5 sMerit.
However, this is clearly not working as intended, because many users don´t award merits at all.

Just take a look at a recent 1 hour period:
A few random observations:
-only 16 merits were awarded in one hour
-for nearly 25 minutes of this hour not a single merit was awarded
-maybe 3/16 merits were awarded to a quality post (I concede that this is subjective and only my opinion) ... but if you take
a look at the posts that were awarded with merits most are pretty terrible

There are several other 1 hour periods where exactly the same problems
occurred (low total amount of merits awarded, merits for questionable posts) and I didn´t really
had to invest any time into cherry picking.

I like the general intention behind the merit system, but it clearly is not working very well.
I also disagree with the viewpoint that "you have to give it some time" or "it´s early days" or
similar adages, because as I argued above it should work great at the start due to the merit starting
balances of most Member-Legendary users.

Besides, I completely understand why many people don´t want to bother with the merit
system at all. Even if giving out a merit only takes a few seconds if you are fast it still
interrupts your reading experience.

I would compare merits to a shitcoin with a 600k coin supply, where probably half
of the supply belongs to inactive users and will never be spent while many of the remaining
HODLers don´t want to bother with it, because it is worth nothing and isn´t traded
at any exchange. Consequently, we are left with a few enthusiasts, who use the shitcoin
for its intended purpose and a few people, who just use it to troll or to have fun (e.g. stuff
like awarding merits to random shitposts or old classics like the Satoshi posts).

Disclaimer: I´m not even particularly affected by the merit system personally, because even though
I would be a Sr. Member based on activity, I have already "earned" 91 merits since the introduction
of the system and will likely rank up soon anyway.

I just don´t think that the sytem is working as intended and that theymos has to take
some measures to increase the circulation of merits.

Possible solutions could be:
-increase the amount of merit sources (I´m not talking about 2-3 new sources, I would increase them by 100 % or more)
-lower the merit requirements for ranking up to take into account the fact that they are not circulating as intended
-remove the merit system completely and replace it with another solution
-impose a minimum merit requirement to prevent people from only awarding a single merit to a post
(theymos argued in one of his recent posts that he initially envisioned that people would award 5-10 merits to a good
post and 1 merit to every post that is remotely readable)
...

[/list]

I could think of several reasons:
1. Bitfinex abandoned the thread years ago, which disincentivizes people from posting about their problems or from bringing up suggestions
2. In the last months the few discussions mainly took place between a few people, who were more or less concerned about the Tether situation (mayax, Samarkand)
and a few people, who thought/think that everything is fine and all Tether rumors are just FUD (TheQuin, Quickseller)
3. Bitfinex has a minimum deposit of 10k $ for new accounts, which is a huge barrier for many newbies, who were looking to invest an amount like 100 $
4. Many posters simply just left Bitcointalk, because the overall forum quality decreased
5. The old-timers in this thread rarely post anymore, because they are probably living on their own private island after enjoying all the P2P margin lending
returns since 2013

Couldn´t it be a good thing if people are reluctant to spend Bitcoins, because they are worth
more in the future? Several economists argue that assets like Bitcoin actually change people´s time
preferences from a high-time preference to a short-time preference. With a short-time preference
people actually think more of the long-term and increase their savings.

One could argue that this would be beneficial for the individual, because having savings protects from
sudden loss of income and also beneficial for society, because it would decrease the ubiquitous overconsumption.

You could be right.

But don´t you think that academic developments of consensus algorithms are different to them being
actually viable for a network that secures billions of $ in digital assets?

What if there are bugs that don´t show up in academic theories?
What if there are unknown attack vectors that make it easy to steal user balances?

It is simply completely crazy to switch the consensus algorithm of a platform that
currently has a market cap (I know, market cap is not a great metric for
cryptocurrencies) of nearly 100 billion $. If PoS proves to be insecure or bad for other
reasons a large amount of this wealth could evaporate.

Proof-of-work has been shown to be secure for nearly a decade, PoS has never been
attempted aside from a few altcoins with low market caps.

Then it might already be too late to save Bitcoin.

If you read articles like this you will see that there are definitely serious
problems in the Bitcoin market and the Bitcoin price discovery doesn´t resemble a
free market at all:
https://hackernoon.com/tether-the-tail-wagging-the-dog-3ebfd4640825

Of course the Tether story is not really newsworthy at this point, but
the ties between the various businesses in the Bitcoin scene
(CoinDesk, Tether, Coinbase, DCG) were novel at least for me.

What if there are more solutions aside from the two solutions that you mentioned?

E.g. probabilistic payments could be a method of circumventing the problem that some amounts are either
too small to be sent or the transaction fee would make the transaction uneconomical.

I´ll quote BitcoinWiki, because I really like the way that they explain the concept
of probabilistic payments:

I concede that this concept is probably unfeasible for many purposes, but in some areas
this could really be a viable solution for enabling micropayments.

This is a misconception.

You can easily move the Bitcoin price by several hundred $ with 10M $ in bids.
Imagine what these Tether issuances of 50-100M $ could do. Some people also
suppose that many USDT are used for margin trading, which intensifies their effect
even more.

People believed that the 2017 bull run was due to good news like
the introduction of Bitcoin futures. If Tether would be exposed as a fraudulent
operation and people realize that the majority of the bull run was caused
by printing USDT that would set back Bitcoin for years.

You should also take a look at www.tetherreport.com and their work.

Especially this takeaway:

You shouldn´t underestimate the impact of Tether. It´s not just FUD.

However, I agree with your general post and I think you are definitely spot on
about the India, China and South Korea news.

Good post, I just happen to disagree on the Tether situation.

I don´t think this is a particularly good idea. In most Western countries nearly
every 2nd marriage ends in a divorce and in most cases the partners are
not really leaving each other on good terms.

If you own a life-changing amount of Bitcoins you should consider the possibility
that your partner absconds with your fortune. After all it is quite easy to move Bitcoins
if you have the private keys and the wallet passphrase.

Of course my view is somewhat pessimistic, but given the divorce rates
and the potentially huge amount of wealth involved your proposal is quite dangerous.
On top of losing all your stored Bitcoins you would also have to deal
with the psychological consequenes of such an enormous betrayal
by a person you trusted.

You are focusing on the downside. If coins are irrevocably lost that actually increases the
value of all the coins that are still in circulation. You could even view dying with your coins
as a contribution to the cause of your fellow Bitcoin holders.

There are estimations that more than 4-5 million Bitcoin are effectively lost or
unaccessible, which would imply that the actual available supply of Bitcoin is
effectively only 16M BTC instead of 21M BTC if all coins will be mined in the future.

Besides, I think that it is inevitable that methods will emerge that allow you
to safely pass on your cryptocurrency holdings to your children or your loved ones.

There are several big holders (e.g. the Winklevoss twins) who own a 5-digit or
even a 6-digit amount of BTC. They could completely wipe out the market with
a few huge market sells. Even 5000-1000 BTC would be enough to wipe
out the order book on most exchanges.

You seriously underestimate the amount of coins that some BTC whales actually
own.

Bitfinex is actually even trading above the Korean exchanges.
The Korean exchanges had premiums of more than 20 % to the Western exchanges
not long ago.

My theory is that Bitfinex need to prop up the price on their own exchange to
prevent a cascade of margin calls that would cause a bloodbath. Meanwhile
price points aren´t really defended at other exchanges like Bitstamp that offer no
margin trading and therefore don´t need to fear a cascade of margin calls.

Off-topic:
If someone of you speaks Spanish and needs a distraction from the BTC price,
you can read the official whitepaper for the revolutionary Venezuelan cryptocurrency
- the PETRO - at the following website:
https://www.documentcloud.org/documents/4363861-Whitepaper-Petro.html#document/

If anyone prefers the English translation:
http://elpetro.gob.ve/Whitepaper_Petro_en.pdf

A few quotes:



And here I was thinking that the Venezuelan people were looking for food and other things that
are necessary for survival.


This quote could be interesting for realr0ach 



The whitepaper even contains a reference to Tether (!).

...

To top it all off Venezuela is obviously going with the standard scam launch scheme:
1. Pre-Sale
2. ICO on Ethereum

I think the plans of India to regulate digital currencies are not having
an impact on the BTC price at all. Korea and China were different, because
both were big markets with several big exchanges and a lot of trading volume.

On the other hand there is not a single Bitcoin exchange in India that
has a volume that would show up in the top exchanges at Coinmarketcap.

The current price is simply caused by money moving out of the market after the
2017 bull run. The introduction of Bitcoin futures was the top for now and
now we will face a prolonged bear market.

Expensive?

Since the spam attacks on the BTC main blockchain stopped, Bitcoin has been anything but
expensive. Transactions with low fees like 10 sat/b or 15 sat/b are getting confirmed within
a few blocks.

The mempool currently only has 10 % of the size that it had a few weeks ago.

Using Bitcoin is pretty fun at the moment - if you are not too worried about
the nose dive of the BTC/USD price.

Active BFX USD Swaps are now down to ~510M $. Couldn´t this simply be related to the fact that
the margin positions of many people got liquidated due to the price action? After every margin call
the Active USD Swaps obviously have to go down. This could also explain why the price on Bitfinex
is holding up better than on other exchanges. Many people (e.g. Bitfinex themselves) are obviously
incentivized to prevent a cascade of margin calls and therefore "defend" certain price points
vehemently compared to other exchanges.

Currently Bitfinex is even trading at a premium to the Korean exchanges, which had double-digit
premiums to the price on Western exchanges in the past.

This could be your problem. Due to the increasingly restrictive regulations of the European
Union on financial transfers of any kind, a service like Mistertango is not allowed
to process transactions to bank accounts that belong to a 3rd party.

You should only make withdrawals to your own bank account, because otherwise
you will run into trouble. I would send an e-mail to the Mistertango support where you state
that you were not aware of this rule and that you will only do transfers from and to
a bank account in your own name in the future. Otherwise they will most likely
shut down your account.

Did you send the BTC from blockchain.info to another Bitcoin wallet that you control? Then
CPFP (Child Pays for Parent) may be an easy method to get your transaction confirmed.
This trick unfortunately only works if you are in control of the recipient address. If you sent
your coins from blockchain.info to an exchange or a gambling site this won´t help you.

Irrespective of this I think that you will get a confirmation eventually, because the mempool
only contains 39k transactions as of now and some of these probably have an even lower fee
than 5sat/b.

I think they overstate their own user numbers. I could be wrong, but Japan has only ~125M inhabitants
and Japanese is not an official language in any other country on earth as far as I know. How did they
manage to get 200M active users when there probably aren´t even that many people on earth, who speak
Japanese? Or is the LINE app popular in other countries with different languages as well?

Anyway, it is encouraging that there will be new cryptocurrency exchanges, because every newcomer forces
the incumbents to step up their game or even to lower their fees. Japan surely has to be the country
with the most cryptocurrency exchanges by now? A month ago they already had 15 officially licensed
exchanges and since then there have been a few announcements of other companies like LINE that
have plans to open their own exchange.

The current price of ETH is completely unsustainable.
There is not a single dApp that has a huge userbase and I´m also
not seeing the emergence of one in the foreseeable future. Besides, more than 31M $
are rewarded in mining rewards every 24 hours (Bitcoin mining rewards are 17M $ per 24h).
If we assume that most of these get sold
within a month and miners don´t hold the block rewards for the long-term
Ethereum needs fresh capital inflows of ~900M $ just to keep its current
price level.

The switch to PoS keeps getting postponed, which could be an indication
that there are unsolved problems. Besides, it is questionable whether Proof-of-Stake
is even technically viable at all. There is a reason why Satoshi Nakamoto decided to use
Proof-of-Work for Bitcoin.

To sum up, I´d guess that the upside for Ethereum is extremely limited
and it is much more likely that it will eventually fall all the way back to
sub-100 $. I haven´t even taken into account the possibility that a better
smart contract platform emerges or that one of the current competitors
steps up and improves drastically.