Have you never compared Bitcoin volatility to altcoin volatility? They are by no means equal. During the bubbles, altcoins rise much harder than Bitcoin. During the bear markets they fall much harder.

Compare the gains made by Ethereum during calendar year 2017. Ethereum rose about 16,000% over that time. Bitcoin rose about 2,000%. When the crash came, Ethereum lost 95% of its value while Bitcoin only fell 84%. This dynamic is reflected by most altcoins. The smaller an altcoin's market is, the more exaggerated this effect is.

You don't get it. Who cares what mining pools want? The fee market is not some sort of gift to miners, any more than the original block subsidy was. The fee market exists to benefit Bitcoin users because it ensures a continuing honest mining incentive.

If block size always has a "buffer" beyond demand, everyone will pay ~zero. Why would anyone pay when there is free space?

In your vision, block rewards will eventually diminish to nothing and the entire mining incentive will cease to exist. That would make for an incredibly useless and insecure Bitcoin. No thanks.

It's silly to compare obscure, little-used forks to Bitcoin. The fact that nobody uses an unpopular altcoin with big blocks isn't evidence that big blocks are safe for Bitcoin. These are apples and oranges.

There is a strong contingent of Bitcoin users (and Core developers) that want higher fees. Small blocks are a means to force fees higher through a fee market, which makes the mining incentive much more viable. This way, we aren't completely dependent on growing to a billion users paying who hardly pay any fees at all per capita.

If we keep raising block size beyond demand, then miners can never account for fees in their revenue stream even as the block subsidy disappears because there will never be any fee pressure. Everyone will pay close to 0 and miners will continue subsidizing the entire network despite smaller and smaller revenue. This leads to a situation where we might see large swings in hashpower because mining would be so speculative and unsustainable. Big blocks simply make no sense from an economic standpoint unless you want to switch to a design where inflation continues forever -- i.e. increasing the supply of bitcoins.

I don't buy the "global money laundering ring" idea. Over the years, Bitcoin exchanges (especially offshore ones) became utter banking pariahs. Nobody wanted to touch them due to banks' apprehensions about AML concerns and unclear regulation of cryptocurrency. I think that was the whole reason that Crypto Capital was launched in the first place -- to solve this problem. I don't think they were launched in order to launder money. When they launched years ago, the market was so small that it wasn't viable for money laundering anyway. It still probably isn't.

My feeling is the NY AG is grasping at straws. They are likely well aware that Bitfinex client funds were seized and they used that fact to claim that Tether was fraudulently violating its terms. I don't think they have any power to enforce anything against Tether, either. They're not like the Department of Justice or anything.

It's somewhere in between. I think it's no secret that many Bitcoin investors are speculating on its future value more than anything else. Betting on whether Bitcoin will take off or realize mass adoption is a matter of speculation. It's a gamble. Any number of things could happen today or tomorrow that will hamper adoption.

The odds in favor of Bitcoin's success are getting better everyday, though. In several more years, it may not be fair to call it a gamble anymore.

I don't try to convince anyone of anything. I never really did. I never wanted to expose my friends and family to the financial risks of investing so I never hyped it up. I've always been pretty open about the fact that I use Bitcoin and trade cryptocurrencies, though.

People I know who are into trading stocks or tracking their retirement funds seem to have a healthy respect for Bitcoin now. That doesn't mean they're buying coins and they may still be on the skeptical side, but they know that markets don't lie. That's one of the reasons I never wanted to waste my energy persuading anyone -- it's all up to the market. If we're headed for mainstream adoption, non-Bitcoiners will eventually see the writing on the wall. There's no need for me to convince them. I'm just enjoying the ride.

It's a potential problem if/when quantum computers break elliptic curve cryptography. At that point, Bitcoin addresses which have been used to sign transactions or old P2PK outputs could be cracked.

It has nothing to do with the number of generated Bitcoin addresses, though. The chances of collisions are still extremely unlikely.

That's the point. A few months ago, they were fully backed by cash. Now, a quarter of Tether's assets are nothing more than an unsecured loan to a company who is battling insolvency and legal problems left and right. Tethers are backed by a piece of paper whose value is dependent on Bitfinex's continued success.

Given that, it seems crazy to value Tethers at 1:1. The risk seems much worse than that.

Has anyone seen a real legal analysis of this situation yet? Maritime law is definitely not my strong suit. Was the seastead technically in international waters or was it within the 12 nautical mile limit? The Independent article states this and not much else:



It sounds like that's what pissed the Thai government off -- not the seastead per se but the fact that they were trying to get others to join them:

Sadly, they probably won't be able to -- at least from the look of these pitiful trading volumes and the loss of trust after this pathetic relaunch. This situation increasingly reminds me of Vircurex. After being hacked in 2014, Vircurex attempted to maintain services and slowly paid back a small portion of the losses. But trading volume died and they eventually just stopped processing withdrawals. Then they disappeared.

I can only imagine what the various US agencies investigating Tether and Bitfinex have unearthed by now. In the long run, it doesn't really matter whether they recover from this or not. This will eventually end in tears. Regulators are years-deep into these investigations now. After another couple bank account seizures, another credit line won't save Bitfinex.

I always had a feeling that Tether was fully backed, but they're in a perpetually risky position where that could change at any moment.

For the sake of Tether holders, I hope that's true now that Tether appears to be a major shareholder in Bitfinex's parent company. Has anyone done any back-of-the-envelope math on how long it would take Bitfinex to repay the loan?


That's a lot worse than a I thought. It's amazing that Tether holders seem to remain so confident. CMC still has it trading at $1.01.

So, you're saying altcoin exchanges shouldn't interface with fiat? And fiat exchanges shouldn't offer altcoin markets? That's a tough sell when the business model of these services = trading commissions. More market listings and trading options means more profit.

I do feel more comfortable using services like Binance and BitMEX because they don't touch fiat currencies. I lost some money when BTC-e got taken down a couple years ago and things have never felt the same since.

Bitfinex has felt like a sitting duck to me for a long time. It's not necessarily Tether -- although Tether made their effect on the market much more expansive -- but the problem of trying to remain unregulated and shrouded in secrecy, hiding their accounts behind shell companies and possibly skirting their AML obligations. This was bound to end with getting money frozen by regulators.

There is surprisingly little public documentation of the Polish seizure. The only primary sources are Polish-language and contain very few details. Further, it is only speculation that the Polish shell company in question was controlled by Crypto Capital and that the money (or some of it) belonged to Bitfinex.

It's clear, however, that Crypto Capital and the exchanges it serves -- Cex.io, Bitfinex, Coinapult, etc. -- have been facing worse and worse withdrawal delays over the past year. It's not just Bitfinex or Tether. There may exist legal proceedings that could prove various bank seizures, but if we're talking about shell companies in foreign jurisdictions, it may be hard for us average joes to connect the dots.

1 sat/byte transactions were getting confirmed ~ 3 days ago. I would guess your transaction will be confirmed within a few days, but it's unpredictable. During times of high price volatility, transaction volumes usually spike up, making low fee transactions less reliable.


I strongly recommend against using the fee estimator on earn.com. It recommends fees that are much too high. I would suggest looking at https://jochen-hoenicke.de/queue/ and then estimating wait time by mempool size, which is the second graph down.

That's quite a low threshold. Do we know exactly what customer due diligence entails with regard to FATF standards?

I'm curious what kind of time-based constraints would be considered for that $1,000 threshold. Not only is the threshold low, but I'm sure standards will be added to prevent payment structuring below the CDD threshold. It could be $1,000 aggregated per day, per week, etc.

They can't enforce a ban effectively, but they can certainly hamper adoption. If a government officially prohibited its usage/ownership, I'm sure that driving it underground into the black market would hamper usage and adoption there. They could never really stop people -- we have encryption and there are simply too many of us. But you might be surprised how many people would fall in line if the government said so. I also think running mining operations at any real scale would be problematic under prohibition in that situation.

People tend not to learn from history. If it didn't happen to them in their lifetime, they don't see it as a threat. Since the post-Bretton Woods (modern fiat) system came to be, we've only seen minor, localized currency failures.

After the stock market crashed in 1929 and subsequent bank failures, we saw a big inflow into gold. People started hoarding it because they distrusted financial institutions so much. They didn't have bitcoins back then, and we're already seeing the seeds of that distrust of banks today. Imagine what would happen if we started seeing crises in the major reserve currencies.

I don't know where you live, but under US tax law, none of this is unclear. The IRS released a memo several years ago defining Bitcoin and other virtual currencies as "property" which subjects it to capital gains taxation.

Our tax laws were written loosely to capture all types of income. Signature campaign income would be taxable at the time of receipt as ordinary income. If you gain thereafter by selling for fiat, you'd be liable for capital gains tax as well.

It doesn't matter if you get compensated in cash or company stock or bitcoins -- all have a fair market value and are taxed as income. The IRS memo mentioned above also elaborates on how to deal with income tax when compensated in digital currency:

Is Bitcoin decentralized or not? What you're talking about is hard-coding censorship into the protocol. That would destroy everything Bitcoin stands for today.

Free markets are free markets. Someday, those coins will probably be moved and sold because they're held on exposed public keys. If someone wants to dump 1 million coins on the market, it's a good thing in the long run. Distribution from one entity to many is healthy for the overall distribution of money supply. It may result in a painful few years for holders, but it's not worth engaging in hard-coded censorship over.