I think that unless you have a very specific business reason to convince people that an enterprise involving Bitcoin is desirable, it's worth it just to drop this entire subject altogether.

"Intrinsic value" is a very specific financial term that is being crassly misused by uneducated popular online magazine authors and commentators, and they're convoluting the entire discussion to fit into a fictional framework that rationalizes their complete lack of understanding of what any of this actually represents.

Bitcoin has value, the value is going up as more and more people become aware of the utility of what the network represents, and what a bunch of pretentious dinosaurs want to convince you via sophistry and other such babblings has no impact on what's going to happen in reality.

Delusional?

This really isn't about regular general-purpose CPU's suddenly becoming competitive for mining, but what it does open up is the possibility that in the future, a multitude of devices can be doing a tiny amount of mining in the background all the time.

A very plausible consumer application (that would really represent the holy grail in Bitcoin usability) would be a credit-card sized kinetically-powered lightweight node that functions as a hardware wallet signing transactions. SHA 256 hardware implementation in a CPU is not necessarily about mining, but could form the basis of a low-power signing implementation.

As far as Intel's motivation, it's kind of naive to assume it's Bitcoin specifically, because SHA-1 and SHA-2 are used in a tremendous amount of applications that have nothing to do with cryptocurrency.

I'll eat my hat if a Monarch ships ever. The Monarch was the perfect scam to convince people already running GPU rigs to hand over money thinking they're going to switch over to ASIC.

One individual's poor judgment does not completely invalidate the value in an entire activity for everybody.

The vast majority of this discussion is completely missing the point of what the OP is bringing up.

His question is what machines out there are actually raising difficulty this much right now.

None of the next gen machines batches are out yet. Are there enough 55nm Bitfury chips out there being placed on privately-designed PCB's to produce these numbers?

Mining is a hedge against the price stagnating that allows you to produce income in Bitcoin using Bitcoins without interacting with the fiat economy except for the power cost (which is practically nonexistent compared to returns for even extremely weak ASIC setups).

23 pages later the original post is still more or less the meaningless rantings of a madman.

Absolutely nothing about this post is meaningful in any way.

Time preference is already built into the preference curves that produce supply and demand. For example, we already see this in real life practice as far as Bitcoin payment accepting businesses offering goods at BTC discount. The asymptotic nature of supply in Bitcoin specifically is not necessarily relevant to the OP's point being discussed, because it does not really factor into price discovery in the sense of determining the equilibrium point. (I.e. the exact shape of supply and demand curves is immaterial to the underlying mechanism).


This is semantic nonsense based on how Alfred Marshall arbitrarily decided to draw the graph in the first place. There is no clear causal case for what represents the dependent and independent variable ("price" is just another kind of quantity, the supply and demand graph is actually a quantity graphed against a quantity). I'm gonna go ahead and take your comments with a grain of salt because you didn't know where the graph even comes from.

The entire premise of Bitcoin and p2p decentralized cryptocurrency in the first place is no one has to do the "necessary house keeping". The analogy of a garden without a gardener is patronizing and completely asinine.

The world didn't have any "necessary house keeping" until the early 20th century anyway, and central banking was basically hoisted on countries as the panacea for bank runs. Instead of regulating or outlawing overleveraging, they created the moral hazard of a "lender of last resort", but in the long run we know that the "lender of last resort" function to central banking was just the used car salesman pitch, because the real function was monetary policy / debt manipulation all along.

Central banking is the entity that creates the price volatility in everything in the first place by constantly micro-managing money supply and thus indirectly tweaking interest rates. The price volatility is not inherent to Bitcoin quo Bitcoin, it's a side effect of the fact that the supply schedule of fiat is constantly increasing, and that means more and more fiat needs to find some place to produce a return to counteract inflation.

Every single one of these premises is completely absurd.

That's not what a preimage attack is.

What you're talking about is pre-mining blocks. A preimage attack has nothing to do with the relationship of blocks to each other.

A preimage attack is when something about the nature of the hash allows you to systematically reduce the search space of original pre-hashed inputs. I.e. the hash is "weak" because it tells you something about what value produced the hash.

A mile long electric wire made of various organic cyanide compounds that you're spreading all around your microwave!

A pre-image attack that does not encompass all 64 steps just results in something indistinguishable from the empirical effect of everyone in the world being able to hash faster. As long as access to those implementations is relatively widely known and not asymmetric, there is no threat to mining whatsoever.

Also its important to note that any implementation of a pre-image attack is going to have memory requirements well-above a normal reference SHA256d mining implementation, and it is not predictable a priori whether that will actually result in better real world performance than the current extremely low-memory brute force techniques.

Mining is probably the most ingenious and profound aspect of Satoshi's design.

The fact that concretely on its face it is performing completely arbitrary work, yet what it does on a network-wide composite view of the system reflects the kind of shift in thinking that we need to be able to abstract in order to understand distributed systems.

If you look deeply into the biophysics and biochemistry of physiological systems (which in many instances reflect a great model for distributed systems with no central control), you will see examples constantly of seemingly trivial exchanges of energy or chemical reactions that have a profound impact on the function of the system when you zoom out to a more macro level. For example, look into what mitochondria are actually doing on a very fundamental level.

This is all there is to it:



The supply and demand schedules are determined by underlying preference curves that we might not necessarily know with any kind of omniscience, but we can infer their behavior from the price signal.

There is no "won't drop too much" in any of this. The price holding actually has to happen for us to infer something about the underlying demand preference curves, we can't just assume that on an a priori basis because the only way we know anything about the demand function is through price discovery.

It would be a lot more accurate for the author to have entitled this piece "Why Bitcoin Will Never Be a Currency - in 2 Charts That Only Prove That Bitcoin Is Not Central Banking".

Seriously, this article is just making this syllogistic argument --

Premise 1: Bitcoin is not Central Banking
Premise 2: All currencies are produced by Central Banking
Conclusion: Therefore Bitcoin does not produce a currency.

Valid syllogistic form, MASSIVELY unsound premise #2.

I would look at the price of Bitcoin as very irrelevant to long-term success/adoption, other than maybe bursts of media attention whenever an ATH catches interest.

The central economic planning that controls almost the entire world right now is basically a gigantic bubble-creation machine. QE and other such monetary policy strategies throw the rate of return on savings into the negative, and the artificially-low interest rates create an almost endless supply of monopoly money for institutional investors to throw at whatever they can to make some kind of return on money produced by the system out of thin air.

Hence every kind of bubble you can possibly imagine: oil, real estate, stocks, etc. Right now the US stock market is in one of the most insane bubbles in history.

The saving grace on the price of Bitcoin is that most likely, the influx of capital is not coming from those kind of investors with privileged access to the early stages of fiat creation. There is a strong case to be made from the example of China right now that Bitcoin is acting as an escape for savings.

Basically TL;DR: everything in the world is a volatile bubble because fiat has unlimited supply.

The real test of Bitcoin's price is going to be once we reach the stage where all that easy credit Wall Street money pours into Bitcoin. All this price fluctuation right now means basically nothing in the grand scheme of things. However if we make it to that point, and say we're seeing a price of $50k without any kind of very compelling value proposition relating to the infrastructure surrounding Bitcoin and concrete market penetration (at least Forex, money transmission, maybe some POS), then THAT is the point where people need to start crying bubble and dumping their bags.

They would if they perceive Bitcoin as a threat to the profits of the very payment systems that they have a financial conflict of interest in running, or if guidance remains so vague as to continue the chilling effect in the US. It's a reality that Bitcoin businesses have significant difficulties getting banked in the US, and there are numerous anecdotal reports of individuals being dropped by banks because of purchases relating to buying Bitcoins or even mining equipment.

These entities are going out of their way ironically to prove why we need Bitcoin in the first place!

None of this prevents banks from arbitrarily closing accounts and refusing service to anyone involved in ACH transfers to any Bitcoin business, unless banks start getting sued under competition laws / antitrust.