Bear post of the Day

[Melbustus]

The main reason why I am against this change I have not mentioned. (It is not directly related to speculation about the bitcoin price itself and would belong to the mining subforum but in the spirit of rigor here it is)
Another concern about raising the block size limit is that it is unfair towards miners. If the block size is increased every time it comes close to the limit there won't be ever a real transaction market since it would mean practically unlimited supply. It's a classical bait and switch game.
If the block size limit is allowed to be reached zero fee transactions will be squeezed out which is a good thing for a sustainable mining economy.

Problem is most investors don't want sustainability, they just want to get rich quick....

This is certainly a valid concern. I agree that the blocksize shouldn't be raised such that *all* transactions can be included and fees go to zero. As I noted above, it's a balance... I think keeping it at 1MB forever, though, tilts things way in the other direction. Fees would be high enough that they'd kill some of the key innovative utility that bitcoin theoretically offers.

This is somewhat arbitrary, but what about doubling the blocksize every time the block-reward is halved? This would be slower than keeping pace with Moore's law, but that's probably ok. This seems like one of the simplest dynamic ways to treat the issue, while trying to maintain a balance. (sidenote: I'm sure plenty of other people have suggested this; like I said above, I've by no means read through all the discussion yet).

I might be willing to accept some of a compromise but this is too much. At first moores law and related laws will end. Once they do the balance deteriorates exponentially. You would be increasing the slope one exponent basically. from n^2 to n^3 for ex and would exeed moores law.
Also this would make a ever growing economy necessary which is the fundamental flaw in current inflationary environments. Bitcoin is in it's design a steady state model and the fixed block size is there to ensure that bitcoin evolves into a steady state economy. If you ask me this was done on purpose.

Yeah, I don't know what the correct algorithm is, but ideally it would be simple. The reward halving every four years, and the difficulty adjusting every 2 weeks are both very easy to implement piecewise functions. Those could be done as more elaborate and technically "accurate" continuous functions, but that's much more of a pain from a software dev standpoint. So I like simple solutions.

That said, I don't know if a simple solution can nicely satisfy my assertion that the block size needs to be such that fees make sense but are not too high. To do that "perfectly", you'd have to assign some (arbitrary) target to what you think fees should be (or percentage of transactions that can be included for free), and then adjust accordingly. That's messy.

I'm sure people have some good ideas on this, but at least you and I are pretty much in agreement that we need to meet in the middle on this; blocksize needs to increase over time, but shouldn't increase geometrically forever.

[Melbustus]

Today we have the current state of ASIC:

BFL claims to have chips in the work, and had a visitor to inspect their boxes with fans. Probability of a total fuckup: high
AVALON, has 2 fully confirmed units shipped 2 others with a hint and several? in China of which they aren't telling us anything. Probability of a total fuckup: low
ASICMINER has raised a substantial hashrate, but nothing so out of the ordinary that they should be taken for granted, unloading of shares by IPO investors has begun. Probabilty of a total fuckup: unknown

I always was one of the harshest skeptics in regards to ASICs, right now the consensus is very optimistic on the forum. I will write more on this as it unfolds lets just say I smell something in the air.

What I am fairly certain of is that all ASIC companies have invested a large part of their preorder money in BTC upto the point where they are entirely invested in it. So even under the most optimistic scenario of no fuckups there will be serious profit taking along the way.

tl;dr this rally is an ASIC bubble.

Skeptical. ASIC buzz is certainly one of the positive contributors to the current state of the bitcoin ecosystem, but I don't consider it *the* driver. There are many things that have recently come together (which I explicitly enumerated in another thread). Also note that I originally consider BFL a likely scam, largely due to the awful lack of professionalism demonstrated by at least one of their reps. Given that other ASICs have been demonstrated, though, I'm not so critical of BFL anymore, but the verdict is still out until they ship in volume.

In short, I agree that massive ASIC disappointment is possible, and that it would kill the exchange rate for a while. That would not, however, modify my medium/long-term view of bitcoin.

[ElectricMucus]

We have to wait to find out anyway

One thing I have not mentioned about asicminer is that they are supposed to pay out only till the IPO price, which makes this a highly questionable investment imo.
I cannot fathom why anybody would buy this considering they do nothing else than mining.

[Namworld]

We have to wait to find out anyway

One thing I have not mentioned about asicminer is that they are supposed to pay out only till the IPO price, which makes this a highly questionable investment imo.
I cannot fathom why anybody would buy this considering they do nothing else than mining.

Only pay till IPO price? That's incorrect. They pay IPO price in full first. Then shares pay 1/400000 of profits each as supposed. They just guarantee to pay IPO price before taking any profit for themselves for the shares they've kept for themselves.

[ElectricMucus]

We have to wait to find out anyway

One thing I have not mentioned about asicminer is that they are supposed to pay out only till the IPO price, which makes this a highly questionable investment imo.
I cannot fathom why anybody would buy this considering they do nothing else than mining.

Only pay till IPO price? That's incorrect. They pay IPO price in full first. Then shares pay 1/400000 of profits each as supposed. They just guarantee to pay IPO price before taking any profit for themselves for the shares they've kept for themselves.

I've read something different, I may have overseen something though.
Problem with that is: How are they audited?

[adamstgBit]

We have to wait to find out anyway

One thing I have not mentioned about asicminer is that they are supposed to pay out only till the IPO price, which makes this a highly questionable investment imo.
I cannot fathom why anybody would buy this considering they do nothing else than mining.

Only pay till IPO price? That's incorrect. They pay IPO price in full first. Then shares pay 1/400000 of profits each as supposed. They just guarantee to pay IPO price before taking any profit for themselves for the shares they've kept for themselves.

no look again

they pay don't pay dividends! not really, they pay IPO price in full...
after that your holding on the a stock that wont pay dividends...

[Namworld]

I guess that's the same issue as everything else. Based on trust.

I mean, anyone who bought ASICMINER to start with only had some vague promise of ASICs for sending Bitcoins to China.

[Namworld]

We have to wait to find out anyway

One thing I have not mentioned about asicminer is that they are supposed to pay out only till the IPO price, which makes this a highly questionable investment imo.
I cannot fathom why anybody would buy this considering they do nothing else than mining.

Only pay till IPO price? That's incorrect. They pay IPO price in full first. Then shares pay 1/400000 of profits each as supposed. They just guarantee to pay IPO price before taking any profit for themselves for the shares they've kept for themselves.

no look again

they pay don't pay dividends! not really, they pay IPO price in full...
after that your holding on the a stock that wont pay dividends...

Seriously? Where did everyone take that info?

Risk Compensation for Investors To further compensate the risks of
investors, we give investors following privileges.
  You Break Even First We (Bitfountain) will not take any
net profits from mining or device sales until the investors (ASICMINER) break
even against the IPO price (0.1 BTC per share). It means that each share of
ASICMINER will first have 1/x of the total net revenues as dividends, in which
x equals to the total number of ASICMINER shares in circulation, and have
1/400,000 after the principals of the investors are paid out.

[adamstgBit]

We have to wait to find out anyway

One thing I have not mentioned about asicminer is that they are supposed to pay out only till the IPO price, which makes this a highly questionable investment imo.
I cannot fathom why anybody would buy this considering they do nothing else than mining.

Only pay till IPO price? That's incorrect. They pay IPO price in full first. Then shares pay 1/400000 of profits each as supposed. They just guarantee to pay IPO price before taking any profit for themselves for the shares they've kept for themselves.

no look again

they pay don't pay dividends! not really, they pay IPO price in full...
after that your holding on the a stock that wont pay dividends...

Seriously? Where did everyone take that info?

reading their thread....


your right they will need to slipt any "profit" they make
but they can take a salary and always choose to invest the profits back in and expand the company,
in which case their will never be any dividends.

[Namworld]

We have to wait to find out anyway

One thing I have not mentioned about asicminer is that they are supposed to pay out only till the IPO price, which makes this a highly questionable investment imo.
I cannot fathom why anybody would buy this considering they do nothing else than mining.

Only pay till IPO price? That's incorrect. They pay IPO price in full first. Then shares pay 1/400000 of profits each as supposed. They just guarantee to pay IPO price before taking any profit for themselves for the shares they've kept for themselves.

no look again

they pay don't pay dividends! not really, they pay IPO price in full...
after that your holding on the a stock that wont pay dividends...

Seriously? Where did everyone take that info?

reading their thread....


your right they will need to slipt any "profit" they make
but they can take a salary and always choose to invest the profits back in and expand the company,
in which case their will never be any dividends.

Oh, that sort of concern. Many seems to have it for many things. I've never seen this occur at all however. The biggest concern would be why would the pay anything all all when they could have just ran away with all the funds? If you don't trust the party, don't buy.

I suspect this is not a concern for anyone who purchased.

[ElectricMucus]

It's myth debunking time again.

This time it's gonna be one of the most represented facts about Bitcoin, so misrepresented that it may even be fraudulent.
It's the "Bitcoin is modelled after Gold in it's initial distribution from the block reward." -myth

Bitcoin follows a mathematical progression which looks like this

Gold on the other hand follows a sigmoid function which looks like this.

That has to do with the fact that at the beginning of gold mining people hadn't had automated mining machines which can haul several tons out of the ground at once, initially not even shovels.
In contrast to Bitcoin the total capacity matters in terms of total production.
Gold like any resource follows the Hubbert Peak in terms of production capacity. Which looks like this:



So to turn up an analogy if Gold would have behaved like Bitcoin stone age people would have picked up watermelon sized nuggets with their bare hands at a rate you pluck a goose.
Long story short: Stop spreading this myth, not only is it totally wrong it is misleading and from the perspective of an uninformed user fraudulent since it tries to talk away the substantial early adopter benefit.

[ElectricMucus]

Since debunking myths and fallacies about the Bitcoin economy doesn't seem to be nearly as popular as simple rhetoric, I give you today one short fact:


The BitInstant Debit card was a proud example of the next big thing during the runup of this bull market. Yet we haven't heard a thing.
It seems to have hit a roadblock or even completely abandoned.

[ElectricMucus]

Since debunking myths and fallacies about the Bitcoin economy doesn't seem to be nearly as popular as simple rhetoric, I give you today one short fact:


The BitInstant Debit card was a proud example of the next big thing during the runup of this bull market. Yet we haven't heard a thing.
It seems to have hit a roadblock or even completely abandoned.

LOL @ the debit card being some big development.
Any fool in this niche could get payoneer to brand a few cards with the B logo and have people send them BTC before putting a $ amount on it.

That's not how I remember it, it was spouted pretty loudly here all over the forum to the point of zomg! critical mass imminent!!1111
If it is that easy there would be plenty by now, there are none.

That the bitinstant guys are lazy does not mean a damn thing.

Uh right, the Captains of the Industry™ bing lazy (or incompetent) doesn't mean anything.  



Keep it up, with that attitude your posts are actually more bearish than mine.  

[adamstgBit]

If it is that easy there would be plenty by now, there are none.

It really is that easy, here's a link: http://www.payoneer.com/PrepaidMC.aspx ... used em to get commissions from some of the sites I have been an affiliate for in the past
For Bitcoin I imagine you would just setup a frontend where people send you BTC. Once you get the coins then you credit their account $ @ gox rate minus fees. Can't be that hard.

As for the Captains of the Industry™ ... I said lazy, you said incompetent ... I would bet on "preoccupied with other projects"

cashing out 1000's of bitcoin is a full time job  lol!

[ElectricMucus]

If it is that easy there would be plenty by now, there are none.

It really is that easy, here's a link: http://www.payoneer.com/PrepaidMC.aspx ... used em to get commissions from some of the sites I have been an affiliate for in the past
For Bitcoin I imagine you would just setup a frontend where people send you BTC. Once you get the coins then you credit their account $ @ gox rate minus fees. Can't be that hard.

As for the Captains of the Industry™ ... I said lazy, you said incompetent ... I would bet on "preoccupied with other projects"

Then I suggest you go ahead and run with it, not any day you got to be Captain, this is the opportunity of a lifetime! Do it!11
Now surely you are neither lazy nor incompetent and not that occupied since you have time to post in that fashion. SO what's your excuse?

me?
I am not competent enough too lazy and don't even want to do it.

[ElectricMucus]

Anyhow, you apologizing for their failure doesn't shed the best light on them either. I know how it is when a project gets abandoned, forgotten and never spoken of again, since when it comes to procrastinating I am an expert. But then I am not trying to run "The paypal of bitcoin" or whatever... What I can do is attest first hand how a left behind project looks like.

[twolifeinexile]

It's myth debunking time again.

This time it's gonna be one of the most represented facts about Bitcoin, so misrepresented that it may even be fraudulent.
It's the "Bitcoin is modelled after Gold in it's initial distribution from the block reward." -myth

Bitcoin follows a mathematical progression which looks like this

Gold on the other hand follows a sigmoid function which looks like this.

That has to do with the fact that at the beginning of gold mining people hadn't had automated mining machines which can haul several tons out of the ground at once, initially not even shovels.
In contrast to Bitcoin the total capacity matters in terms of total production.
Gold like any resource follows the Hubbert Peak in terms of production capacity. Which looks like this:



So to turn up an analogy if Gold would have behaved like Bitcoin stone age people would have picked up watermelon sized nuggets with their bare hands at a rate you pluck a goose.
Long story short: Stop spreading this myth, not only is it totally wrong it is misleading and from the perspective of an uninformed user fraudulent since it tries to talk away the substantial early adopter benefit.

This is a great post, thank you

[adamstgBit]

I don't have a clue what they have going on in their camp and maybe they are comfortable enough in their position that bringing fresh awesomeness to market isn't a priority anymore

I do agree with the sentiment of the forum at the time they announced it.
A place to convert BTC into prepaid mastercard $ would be a huge facilitator for this niche.
I hope that people realize, like I showed above, that bringing a product like that to our market should not be that difficult.
If you are able to put together the frontend and deal with the currency conversion, the card itself can be provided by a third party
(and I think that is the intimidating/confusing part to most of the people who could pull it off)

cavirtex offers such a service with payza or something

-get the payza card
-you sell your bitcoin
-send it to payza
-and then you can spend spend spend

thing is, i can spend spend spend with less fees if i just transfer the money into my account and use my VISA ( +1% bonus dollars! )
so their is no logical reason to use the fee infested payza card.

[ElectricMucus]

This is a great post, thank you

I am glad you like it.

I don't have a clue what they have going on in their camp and maybe they are comfortable enough in their position that bringing fresh awesomeness to market isn't a priority anymore

I do agree with the sentiment of the forum at the time they announced it.
A place to convert BTC into prepaid mastercard $ would be a huge facilitator for this niche.
I hope that people realize, like I showed above, that bringing a product like that to our market should not be that difficult.
If you are able to put together the frontend and deal with the currency conversion, the card itself can be provided by a third party
(and I think that is the intimidating/confusing part to most of the people who could pull it off)

Nice to see you got my argument after all.
What I am trying to do is to make a point here: Lots of developments get hyped so much that they distort the expectations to the point where the speculative value becomes the sole contributor.

In all fairness really bullish developments (which are there) then get overlooked, maybe shortly mentioned but do not get the attention falsely provided to other things. For example the decision of the Internet Archive to let their employees opt in to take some of their wages in Bitcoin.

[ElectricMucus]

Todays myth regards the usefulness of Bitcoin in the case of an economic collapse.

It is claimed that Bitcoins would be very useful in economic uproar because they cannot be counterfeit.
The problem with that is that it is problematic to use Bitcoins in such a scenario in the first place. It pretty much depends that the infrastructure continues to be operational through the crisis.
Once the power grid and the Internet are affected the usefulness is pretty much done for. Proposals to rely on things like solar panels and off-line wallets is pretty much irrational because the mining infrastructure would grind to a halt. Transaction times would be beyond a day and the risk of an attack by the establishment which brought up the crisis severe.
I'd take a silver coin over a bitcoin transaction the next day, and I guess you would too...

Only in a situation where the infrastructure continues to be operational along with a steady high inflation (no deflation) can Bitcoin shine. These are mostly periods of good economic growth, in real cases of economic crisis ppl wouldn't have enough cash to keep the bitcoin price up.