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There are two problems with that I can think of:
1. Bank transfers can be reversed in some circumstances (account was stolen etc). Some days after Bob gets the money and releases the bitcoins, the bank may reverse the transaction.
2. I'd be worried that the bank may freeze my account if I receive cash transfers from someone who turns out to be a criminal or the bank freaks out for some reason.
I would much prefer a centralized exchange.
This concept could work if A and B meet up and payment is made in cash. This concept could also work for trading between cryptocurrencies (btc <--> ltc etc)
I think these are serious issues which need to be considered These maybe hard questions to answer, but if #2 in particular starts happening for users of your system, you will become a VERY unpopular person, VERY quickly. Having a primary fiat bank account closed or locked is far more damaging and off putting for the novice user (who you've said this system would be for) than losing some fiat or some BTC. |
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There are two problems with that I can think of:
1. Bank transfers can be reversed in some circumstances (account was stolen etc). Some days after Bob gets the money and releases the bitcoins, the bank may reverse the transaction.
2. I'd be worried that the bank may freeze my account if I receive cash transfers from someone who turns out to be a criminal or the bank freaks out for some reason.
I would much prefer a centralized exchange.
This concept could work if A and B meet up and payment is made in cash. This concept could also work for trading between cryptocurrencies (btc <--> ltc etc)
I think these are serious issues which need to be considered |
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You said it yourself, the strength of Bitcoin is zero trust, the fundamental concept of ZR is you must place trust, the features of ZR negate the benefits of BTC.
You make it sound as if the purpose of Bitcoin is to remove all need to trust. It is not. Even in a pure Bitcoin financial world, you need to trust and there will be credit. No, but as you said, as we both agreed, one of the big strengths/salepoints of Bitcoin is it puts the trust in numbers, in cryptography. Adding another layer on top which puts trust in humans negates the benefit of Bitcoin. I understand that. But my point still stands, the whole system is founded on other people giving eachother accurate credit ratings - something that the banks failed spectacularly at despite lots of experience. What makes you think the average Joe would be any better at it? And what are the implications of wrongly placed trust? E.g. what happens if there's a big financial crisis again, and all of a sudden everyone has less money available, so all the links between nodes in the network are effectively wrong?
It will always happen that people abuse trust. The implication is that you lose that money. So don't trust anyone with amounts you can't afford to lose. I believe that the losses you take with such fraud will be way below the inflation tax and the interest payment to the govt-financial complex.What makes you say that? Also, that's a big problem with debt based systems: they work well if you know exactly how much money you're going to earn and spend the rest of your life, but in reality, things happen, medical bills, economic problems, house fires, all these sort of things can ruin a person in debt, and their debtor.
For now, ZR is only meant as a way to exchange Bitcoins, should govts crack down on the centralized exchanges. It may evolve into a large credit network - I certainly hope so. But it does not have an incentive to turn everyone into debt slaves, as the banking system has. Because of that, I believe it is not prone to create such crisis as the banking system is, with all these wars which are financed by the printing press. And yes, I believe the average Joe is pretty good at rating his friends. I also hope that ZR helps to educate people about what fiat money is, and how it can be used for your benefit.
Of course ZR is no panacea. It is a tool. I can only offer it and people can accept or reject it. Just like Bitcoin. Just like Linux. I certainly hope that people will try it out and help evolving it into something great. If people choose to continue to place their trust into the govt-financial complex instead, I can at least say that I tried my best.
I appreciate that, I wouldn't ever want to discourage someone from experimenting, exploring and tinkering with things. I envy you for having the commitment and courage to move forward with things like this, by all means, proceed. I don't think I understand the system fully though. Could you clearly explain, what happens if Alice buys 1 BTC of Bob, but in the sending of the fiat down the chain, one node is dishonest and doesn't forward the fiat, but pockets it instead, what effect does that have on the chain, and who loses money and how is dishonest behaviour punished? |
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Accounts can help with this stuff, saves having multiple wallets for each coin if you really want to handle your accounting on that level: https://en.bitcoin.it/wiki/Accounts_explainedUsing accounts probably makes auditing a bit easier (e.g. you can audit the accounts without needing the database server which maintains website accounts) |
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This is exactly the same as the banks do: Creating and destroying fiat money. Should this catch on, we, the people can take the banking business out of the banks hands and the wealth the banks skim from us remains in our hands.
Wait a minute.... I thought we were meant to be avoiding repeating the mistakes of the bank? The banks don't make mistakes, they are the problem. They are huge, centralized, fraudulent, corrupt power centers. But one of the benefits regularly touted about Bitcoin is that it's not a debt based system, because it's features of the debt based system that contributed to the various financial crisis. I can understand the purpose of it in the context of this system, but if I were you, I wouldn't market it as doing the same as the banks do, I'm not sure that will get you many supporters - at least on these forums. Debt based systems have bad connotations, at least for me.
From what I understand, it requires you put trust in people. For me, the strength of Bitcoin is that you don't have to trust people, if they send you the coins, you have the coins. In this system, what's stopping someone saying "okay, I trust Anu for $20" and then anu just not coughing up that $20 when required?
You have no reason to trust me. Do not grant me credit. Bitcoin and credit money (ZR) are complementary - they solve different problems. The strength of Bitcoin is that it is zero trust. The strength of ZR is that it can replace the banking system's role in moving in and out of fiat. That's my point though, Bitcoin doesn't require you trust another human. Once they've sent you the money, that's it. Again, that's one of the benefits of Bitcoin. With ZR, you have to place trust in someone, human trust in a human person which is fallible. Bitcoin removes with human element by implement trust using cryptography. Using ZR with Bitcoin, it's just another layer through which people can scam one another, but instead of it being one big centralized exchange scamming, it's lots of little scammers making it harder to actually get any resolution when you are scammed? You said it yourself, the strength of Bitcoin is zero trust, the fundamental concept of ZR is you must place trust, the features of ZR negate the benefits of BTC. The whole benefit of an exchange, for me, is that I don't need to know anyone (other than the exchange) I can just send my money, buy some coins.
You don't need to know the counter party. You need to know your friends. There's a difference between knowing and trusting. But with chains, you're not just trusting that your friend will pay you back $20, you're trusting that they make good judgements in who they trust. E.g. I may trust my colleague to pay back $20, but what if my colleague naively trusts a bot to pay back $x, any transaction that goes from me through that bot (because of my friend) is relying on all the other people in the chain making safe judgements. So if one node fails (e.g. the bot doesn't pay up) all the transactions that go through that node will fail, right? Also, based on reading user experiences, it seems this is even more reliant on critical mass for success, yet it's incredibly hard to get started with nobody else there. That seems a bit paradoxical. Have you any way to incentivise people using this? Also, if you're only streamlining relationships with friends, then why do we need this system in the first place? e.g. it requires me to say "I trust anu" but if I already trust anu, why do I need zeroreserve? Or is the main focus on trust chains formed including people you don't know (which would be hard to do manually arrange)
As you state below, its about chains of trust. The purpose of ZR is to route payments through such chains without the need for anyone (even the friends) to know who the seller and the buyer are. As to the critical mass - that is indeed the problem and if ZR does not achieve critical mass, it will die. So the links between nodes are effectively defined by humans placing trust. Humans are the weak part of any computer system, and this systems seems to be founded on human decisions. If the focus is on trust chains, wont things like adding bots as friends, or adding the pirate party as a trusted party be bad?
In the context of ZR, a friend is defined as "An entity you trust for X amount of credit". So in the context of ZR, your drinking buddy may not be your friend, but your business partner may be, even though you personally dislike him. I understand that. But my point still stands, the whole system is founded on other people giving eachother accurate credit ratings - something that the banks failed spectacularly at despite lots of experience. What makes you think the average Joe would be any better at it? And what are the implications of wrongly placed trust? E.g. what happens if there's a big financial crisis again, and all of a sudden everyone has less money available, so all the links between nodes in the network are effectively wrong? It sounds like it could be a workable system maybe, but I can't help feel a lot of the requirements of users seems to contradict what Bitcoin users would want to do (e.g. debt based system, trust in humans, undocumented off-system transactions) |
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That's like asking how long is a piece of string.
It depends which one you're talking about. It depends what time of day. It depends how much media attention Bitcoin has. It depends if the price is moving up or down quickly.
Also, that's not a cheap setup at all. In fact, you're getting totally ripped off. I have a poewredge 1850 right next to me at the moment. You can pick them up second hand with same spec as described for £30. You can get collocation in a datacenter for like £50 a month. That combined is going to cost around £650 a year.
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I agree with what the above are saying.
I'd also like to ask what your motives are:
Why are you doing this?
What do you intend to achieve?
What are you doing that is new or different from any other exchange?
What makes you the ideal person to do this?
Don't get a VPS. Best option would be to have your own dedicated servers. But getting that setup, and then a sys admin to maintain it is going to add another $50k /year for it to be done properly and safely.
You'll need a proper security audit. That's going to cost a lot too.
You'll also need and accountant and/or legal team.
You could just go with a VPS and your $3k developer, but that wont be secure, your bank will most likely shut you down, and when (not if) you get hacked, liability will fall on you for not taking necessary precautions. Even if nobody takes legal action, you can consider your reputation destroyed.
Even if you handle just cryptocurrencies, I think it's only a matter of time before they start to become regulated (meaning you'll probably need to get other licenses and registrations depending on your jurisdiction.)
Please please PLEASE, unless you're going to do it properly (at least a high 5 figure budget) just don't do it. Last thing cryptocurrencies need is another exchange to fail and get hacked because you feel like setting up an exchange.
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This is exactly the same as the banks do: Creating and destroying fiat money. Should this catch on, we, the people can take the banking business out of the banks hands and the wealth the banks skim from us remains in our hands.
Wait a minute.... I thought we were meant to be avoiding repeating the mistakes of the bank? From what I understand, it requires you put trust in people. For me, the strength of Bitcoin is that you don't have to trust people, if they send you the coins, you have the coins. In this system, what's stopping someone saying "okay, I trust Anu for $20" and then anu just not coughing up that $20 when required? The whole benefit of an exchange, for me, is that I don't need to know anyone (other than the exchange) I can just send my money, buy some coins. Also, based on reading user experiences, it seems this is even more reliant on critical mass for success, yet it's incredibly hard to get started with nobody else there. That seems a bit paradoxical. Have you any way to incentivise people using this? Also, if you're only streamlining relationships with friends, then why do we need this system in the first place? e.g. it requires me to say "I trust anu" but if I already trust anu, why do I need zeroreserve? Or is the main focus on trust chains formed including people you don't know (which would be hard to do manually arrange) If the focus is on trust chains, wont things like adding bots as friends, or adding the pirate party as a trusted party be bad? I would have thought trust links formed where there is actually no real world 2 way trust, other than some guy in IRC saying "add this bot", undermine the strength and security of the entire system? And with trust chains, doesn't that mean that the whole networks trust or reliability is dependent on how trustworthy and reliable every single person in the network is (e.g. if everyone adds that bot, and the operator of that bot defaults on the amount people have naively trust it with, any transactions that do or have gone through that node - which would be a lot if everyone randomly adds it to get started - will be defrauded?) I think the idea of a distributed exchange is good, but to me, this particular system has too much of an (unreliable) human element for trust. Although I may have misinterpreted all this. |
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So there was a lot of talk on this forum about sub-$500. I just assumed it was crazy talk. I was wrong.
How did you figure that the price would drop below $500? I want to learn.
] Hit the zoom out button on the graph. |
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This is great but i 'll pop champagnes only when all major exchanges are above 1000$ at the same time.  I 'm trading on bitstamp after all  Bitstamp orderbook:  And that wall isn't getting smaller...  |
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This is great but i 'll pop champagnes only when all major exchanges are above 1000$ at the same time. I 'm trading on bitstamp after all Bitstamp orderbook: |
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I am afraid I did not express myself clear enough so forgive me to repeat myself here. Compared with property and stock, bitcoin is more like gold. That means 1 BTC is always 1 BTC, it will never collapse, burnt, bankrupt, or diluted. So it just like gold, can be a very good way to keep value. In short, you buy BTC and keep them in paper wallet, and after couple of years, its value will not affected by all the inflations, no matter how much paper money has been printed. I am talking about the value, not the price measured by fiat. The value of BTC only disappears when it is no long used to keep value, just like the silver, which is almost just a useful metal now. If BTC is replaced by a better crypto-currency, then it's value may goes to 0. Otherwise, it is always there. No one will deny using crypto-currency to keep value is a great idea, and once it is accepted by the mainstream it is not reversible. As we know, one of the big value of bitcoin is its scarce. There's only 21m coins, and that's the key for it to keep its value. Therefore, we buy some when they are still affordable and then keep them to hedge all the fiat inflation risks. That's the investment I mentioned. In this sense, holding BTC is safer and easier than holding stocks, properties, or gold. Most of what you said above, however, are related to price and trading. That is completely short term and manipulated by whales. Concentrating on the price is speculation, not investment, and is not related to what I am talking. One more thing to add: In stead of asking 'is the price of bitcoin sustainable', how about asking 'is the value of fiat sustainable'? I am afraid the latter has much more obvious answer. Fair play, sorry for misinterpreting. Let's try again then Compared with property and stock, bitcoin is more like gold. That means 1 BTC is always 1 BTC, it will never collapse, burnt, bankrupt, or diluted. So it just like gold, can be a very good way to keep value. In short, you buy BTC and keep them in paper wallet, and after couple of years, its value will not affected by all the inflations, no matter how much paper money has been printed. Gold only has value as long as you can convert it into a currency. A lump of gold on it's own, for the most part, is useless. You can't go into 99% of shops and pay for things in gold, you can't eat it, you can't drink it. So gold is only has value by your definition as long as people are willing to trade it for something that is useful to you (e.g. fiat or food or an xbox.) The exact same can be said about Bitcoin. It's only useful or has any value if people trade it, otherwise it's just useless hoarding of junk. So you're right, it is similar to gold in that sense. So no we can look at your original argument that Bitcoin is safer than gold and all others as an investment (which was the point I was refuting in my original post you quoted.) Gold is a tried and tested investment option (or store of value or whatever you want to call it) in so much as we have a better understanding of what it is, how it works, why it works, who wants it, how much we have, and who wants how much - it's part of our society and culture. Cryptocurrencies are not. There are numerous things that could collapse the price of cryptos to near 0: a break of ECDSA & SHA-256, revelation that Satoshi & bitcoin = FBI sting, Satoshi dumps 2million coins, the internet stops working, a MtGox, bitstamp and BTCChina get hacked at the sametime and initiate a huge sell (like 2011.) If any of these happened, your cryptocurrencies would not be useful, because people would be considerably less likely to accept them as payment due to technical inadequacy or social stigma. Society as a hole does not accept cryptocurrencies as valuable by default: e.g. it's not hardcoded into our society like the value of shiny gold. Psychologically, gold will always hold value to a large amount of people because it's part of our history and culture (even more so in other cultures.) For this reason, I believe it would take a far more radical event to collapse gold to $0 than it would cryptocurrencies. And for that reason, I believe Bitcoin is a higher risk investment than gold. Sure you can say if we all accepted and understood Bitcoin, then it would be worth something, and that may happen so it's a good investment. But that is pure speculation, and that's not the kind of value we're talking about, right? |
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Buying property, you are betting on the politics, economy, security, and many other things on the location of your property. You have to worry about the earthquake, fire, flood, storm, hurricane, or typhoon.
Same with Bitcoin, e.g. most people suggest this big boom is linked to China (politics) and when there's a security breach, or a big arrest (like mt gox fueled crashes in the past, or SR arrest) the price goes down. Buying stock, you are betting on the market, competitors, the leadership of the CEO, and many others. Moreover, you have to worry about insider-trading and fraud in accounting.
Same with Bitcoin, you're betting there's going to be a market for oyu to sell your coins to, you're betting your competitors don't do a huge dump before you do. The fraud an insider trading is even more of a risk with Bitcoin (look at how many exchange have disappeared, look at Fontas on BTC-e) Buying gold or silver, you have to find a safe place to store them and then you need to find a safe place to sell if you want cash.
Same with Bitcoin, you have to find a safe exchange, preferably in a stable region with good political ties to whatever country your in. Then you have to get your bank to be okay with you transferring in a massive chunk of fiat from Bitcoin (I know some banks in hte UK wouldn't be comfy with that) I believe now you will agree with me why I said investing on BTC is the safest and the easiest. That said, I'm not saying it is risk-free. It is highly risky, but investing on anything is risky, and holding fiat without investing is even more risky.  Betting in a regulated controlled market is far safer than Bitcoin. As someone pointed out, there's nothing stopping allt he various middlemen here running with your money. In a lot of cases, you've not got a leg to stand on with regards to legal recourse in the Bitcoin world. Don't kid yourself, Bitcoin is just as, if not more risky than other proven tried and tested investment options. |
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The attack vectors described in these "studies" have been discussed in the bitcoin community for years. It's also worth noting that despite a market-cap in the billions, these attacks have not been performed to any measurable degree. Nevermind the perverse incentives (the authors treat incentivization very myopically). These attacks are interesting to theorize about and should ultimately be insulated against for the long-term, but they're of little practical relevance.
You don't think the fact that Bitcoin is definitely not incentive compatible is an issue? An incentive is a reward, and rewards are subjective. We can argue all day about if miners make enough money or who gets the new coins and fees. None of that changes the fact that there will always be people out there who see things such as helping verify payments, having a fun hobby to play around with and generally contributing back to the web as an adequate incentive. Even if you ignore all those things, and argue that there is absolutely no incentive, the conclusion of that is that it would be irrational to mine. There will always be people who behave irrationally. |
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If DPR is (and always was) Ulbricht then I think we would know by now if he was Satoshi.
LE have Ulbrichts computer and most likely access to all his online accounts. Given Ulbrichts track record of data security, they'll probably have access to all his e-mails and files from the past 5 years at least (after all, he did get caught.)
I think if anyone would leap at the opportunity to prove beyond reasonable suspicion that Bitcoin was made by a criminal to buy and sell drugs, it would be LE.
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I sold around $400. Still got my buys spread between $100 - $200 and they're staying there for a while at least.
I suspect bearishness correlates with how far out people zoom on their chart of choice (e.g. the more bearish, the more the person zoomed out)
I'm going to assume that's what you really did, so then I'm wondering: that strategy only makes sense if you assume that we're going to correct down to between 1/8 to 1/4 of the current price. Which didn't even happen in the April 10 crash in any substantial volume (don't know how much you're expecting to buy, but let's say it's more than neglible amounts). That's pretty hardcore bearish, not just "we're overbought right now and will correct back to July levels" but "we're going back more than half a year, well below the previous ATH". Would actually be really interested to hear why you think that's the case? So first, I've been studying Bitcoin for 2.5 years. I'm not a trader, I don't follow it to make money. I've invest $100 and that $100 is $100 I count as in the bin (gone.) I'm not a brilliant investor, I lost some of my potential profits doing bad day trading at times, and lost bits investing in altcoins. Generally though after my first year, I stopped trading, mainly holding, doing a sell if I think the price is highly overinflated (e.g. April.) But this was my reasoning  I think the true value of Bitcoin (and trend) is between early December and early April. I think the trend disappears for a bit due to hype, but continues again from July until October. I think outside of those ranges, the price variation is not due to the value of Bitcoin increasing, but just speculation. I think: when it's speculation, it's risky. I sold what I had for $800. In my risk assessment, my belief the that price will go down was high enough for me to decide I'm happy to cash out for the time being with 700% profit. An implication of my assumption the price will drop a lot is that holding for longer is an increased risk of losing what I had at the time. Given the choice of taking home 700%, or taking a risk, being a risk averse person, I chose to take the money. In my eyes, there is never a reason to be sad, second guess or feel like I've lost out with 700% profit. Saying I could have had 1500% profit, to me, is the equivalent of saying "I could have had $20million if I'd picked <insert last weeks lottery numbers> in last weeks lottery" - pointless. Yes, I could have held longer and had $1500, but I saw an opportunity to take home $700 with no risk. Makes sense to me. With my thought process, lost potential profit is not a loss of profit, because that potential profit would have cost risk, which is something I don't like or need to be content. edit: I would be lying though if I said I wasn't considering revising my buys closer to $200, maybe even as high as $250. |
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Many speak about a bear trap between the 2 pics a few days ago.
What do they mean?
Is there a lexicon somewhere for these terms somewhere in the forum?
Thanks!
You just kinda have to pick it up as your go along A trap tends to suggest the price is going one way luring either bears to sell or bulls to buy and then goes the other way, so it was a trap. |
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I use my belly button fluff to lure out fairies . I then capture them, liquidise them, and sell the resultant green product as a dish washing agent. I then use the fiat profits to buy cryptocurrencies - but that's how everyone does it, right?
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I sold around $400. Still got my buys spread between $100 - $200 and they're staying there for a while at least.
I suspect bearishness correlates with how far out people zoom on their chart of choice (e.g. the more bearish, the more the person zoomed out)
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Actually, the more I read that in the context of this and other posts, the more I realise most of those points should really be highlighted.
Again though, correlation != causation.
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