Bitcoin Crashing Again....

[phillipsjk]

Bitcoin CAN NOT be a good storage of value, because the PoW mining expense is way too high. By holding Bitcoin, you are basically charged a 10% tax each year. That's not a good storage of value. Bitcoin can become a good storage value if it converts to a Proof of Stake network.

It is my understanding that most PoS coins use PoW for initial coin distribution. Bitcoin is still not generally regarded a viable,  so the continued coin distribution is justified, IMO. The 10% tax will be reduced to a 5% tax within 3 years.

The "unfair" wealth of the "early adopters" is a common criticism I hear about Bitcoin. You appear to be arguing that the early adopters should control even more of the wealth.

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[ssmc2]

I really don't know why? I mean will we ever see $800 again... I doubt it for some reason

Bitcoin's price depends on the perception of the people. If enough people consider bitcoin as a good storage of value, it might hype immensely and we will see $800 or even $1000 again in near future. But if they think instead "better live now and spend everything" BTC will go down, too.

Bitcoin CAN NOT be a good storage of value, because the PoW mining expense is way too high. By holding Bitcoin, you are basically charged a 10% tax each year. That's not a good storage of value. Bitcoin can become a good storage value if it converts to a Proof of Stake network.

 

[kokojie]

Bitcoin CAN NOT be a good storage of value, because the PoW mining expense is way too high. By holding Bitcoin, you are basically charged a 10% tax each year. That's not a good storage of value. Bitcoin can become a good storage value if it converts to a Proof of Stake network.

It is my understanding that most PoS coins use PoW for initial coin distribution. Bitcoin is still not generally regarded a viable,  so the continued coin distribution is justified, IMO. The 10% tax will be reduced to a 5% tax within 3 years.

The "unfair" wealth of the "early adopters" is a common criticism I hear about Bitcoin. You appear to be arguing that the early adopters should control even more of the wealth.

Except more than 60% of Bitcoins are already distributed, and still no plans in sight to fade out PoW.

The tax CAN NOT be reduced by halving, because the PoW network NEEDS to maintain 10% expense in order to not be laughably easy to 51% attack. Therefore it will reach a new equilibrium that rests at 10%, and continue to suck wealth out of the Bitcoin eco-system at that rate.

I don't see how does PoS is related to early adopter controlling more wealth (also, as you said PoW doesn't prevent it neither, Satoshi controls over 1M Bitcoin).  PoS can be distributed fairly, by using a mixture of PoW, development donation and proof of burn.

PoS benefits every single participant of the eco-system, wealth is re-invested in the eco-system instead of transferred out to hardware vendor/electricity company.

[phillipsjk]

The tax CAN NOT be reduced by halving, because the PoW network NEEDS to maintain 10% expense in order to not be laughably easy to 51% attack. Therefore it will reach a new equilibrium that rests at 10%, and continue to suck wealth out of the Bitcoin eco-system at that rate.

You lost me here. The halving will happen regardless of conditions. Over time, fees are supposed to replace the block subsidy.

Hash-power follows price. If Bitcoin is laughably easy to attack now: that is due to poor adoption. That implies that Bitcoin is not important enough to attack by well-funded actors. The hope is that by the time Bitcoin becomes a clear threat to well-funded actors, it will not be so cheap to attack.

Of course, in that case, a well-funded adversary can use the "hack every node" strategy I outlined for PoS coins. In a PoW system, it would be easier to recover from such a scenario: since the block-chain would still be largely trusted due to the proof-of-work it contains.

As I said in this post:

Bitcoin is a revolutionary experiment. It is the "first secure networked application ever created in the history of computers." (Out-of-context Bruce Schneier quote) Governments and banks will attack it through legal and technical means. It may only have a small niche over the next 50 years. If that happens, it will be OK: because it is just an experiment.

Converting Bitcoin to PoS would invalidate the experimental results. I really am curious if Bitcoin will turn out to be the first secure networked application in the history of man-kind. The main thing that makes me doubtful is that today's computer systems are inherently insecure. Formal correctness proofs are generally limited to military applications where you want to be able to deploy special weapon modes in war-time without prior testing. Even safety-critical systems like automotives still use Ad-hoc debugging. This allows bugs to creep in.

[bank of bits]

with bitcoin you never know it can still rise and rise he already proved it a few times

[pitham1]

with bitcoin you never know it can still rise and rise he already proved it a few times

$400 will look real cheap in some time.

[Darkmatter12]

with bitcoin you never know it can still rise and rise he already proved it a few times

$400 will look real cheap in some time.

+1
It will look very very very cheap in some time.

[Biomech]

Wrong, it's extremely easy and cheap to attack PoW network, tons of PoW altcoin has been attacked to death.

Zero successful 51% attack on any PoS altcoin so far.

The 51% attack does not work on PoS coins because they are centralized. They use aggressive check-pointing. They also can not be "forged" securely (to an off-line wallet) since you need to keep the private key in memory (of a network-connected machine) to prove "stake".

Most famously, Vericoin (NxT) was rolled back after the Mintpal hack. (Another article talks about how Vericoin was not rolled back after BETR was compromised: paying ransom instead).

Again, WRONG. All PoW has checkpointing, including Bitcoin, because it's so easy to attack a PoW network. Most pure PoS coin does not have checkpointing, because it's not needed. Peercoin is fading out checkpointing since the PoS portion has taken over the network now.

Vericoin roll back is due to hacking, not because of failure of PoS system, so what's the problem? if someone hacked 50% of all Bitcoin available, you can be pretty sure Bitcoin is going to hard fork and rollback the attacker's address too, otherwise the eco-system will fail. Or do you think if someone stole 50% of all USD available, the US government is just going to let it slide?

"someone" did execute a better than 51% attack against the US dollar in 1937. Very effectively, and with complete success til the present.

Not a very good analogy, though your point is taken.

[Biomech]

But if an attacker obtain 51% mining power in a PoW network, there's nearly nothing you could do, other than go out and out-spend the attacker by buying more hardware and spending more on electricity. I'm sure the hardware vendor and electricity companies would love to see this happen. If no one step up and out-spend the attacker, the attacker with their vast amount of hardware can PERMANENTLY disable the Bitcoin PoW network, there's nothing you could do to stop them, other than... converting Bitcoin to PoS .

Do you understand that solution is easy, and attacker will spend alot of money ?
If you refuse hi priority transactions then your block will become invalid and ignored by others. You have to accept bitcoin rules or hash your own empty alt-chain.

The point of having a 51% attack is because you can decide which chain is valid, and what transaction to include. These are straight from the bitcoin wiki:

An attacker that controls more than 50% of the network's computing power can, for the time that he is in control, exclude and modify the ordering of transactions. This allows him to:
    Reverse transactions that he sends while he's in control. This has the potential to double-spend transactions that previously had already been seen in the block chain.
    Prevent some or all transactions from gaining any confirmations
    Prevent some or all other miners from mining any valid blocks

https://en.bitcoin.it/wiki/Weaknesses

Using game theory, can you think of a reason anyone would bother trying this? Your logic skills will be tested.

Short version, with the caveat that it has been two decades since I formally studied Games and Theory.

Bitcoin presents a clear and present danger to conventional banking and national fiat currencies. At the current level of adoption, this thread is more theoretical than real. However, should certain scenarios occur, such as wider adoption of bitcoin or the collapse of a major currency, then certain agencies (The US treasury being one of them) would have a vested interest in destroying or discrediting the digital currency.

I am presenting this with an understanding of the political process that may not be obvious to those who have never been a part of it, so I must digress for a moment to illustrate that while it is important to the political process to centralize and control a fiat currency, that currency IS NOT the one in which the political masters trade. They trade in power, and in most cases that is measured by the number of humans they control as pawns. In the West, where the main political paradigm is a pseudo-democracy, that is measured in votes. In more direct dictatorships, it is measured in actual controlled humans. In either case, that is the currency they most covet and most protect.

In the above scenario, it is likely that the ascendence of an decentralized and unregulated currency would threaten both their fiat and their franchise. In that case, it would make political sense for them to attempt such a thing, and while the resources were available. A big government could do it, in secret, and fairly quckly. They do not respect patents, and frankly there's nothing magical about ASIC chips. While uneconomic in the narrow sense, it would protect their monopoly, which they DO perceive as more important than anything else.

My conclusion, based on 45 years of living in the United States and watching just how rapacious it's government is, is that it will happen at some point. I am of the opinion that the bitcoin protocol and community are resilient enough to withstand it, but saying that it cannot happen or even that it's unlikely seems too complacent. But adoption will have to reach larger scales by quite a lot before they feel that threatened. Right now it's a diversion and cause for some concern to them. That can change. We want that to change. But we should NEVER be complacent when dealing with something that can potentially break a 500 plus year stranglehold on monetary exchange.

[Fabrizio89]

It used to be $1200..

Used to be? Was at that price for like 3 days.

Anyway this bear phase is quite strong but given anyone is so pessimist I think it may be almost over. Not saying it won't drop further though.

[Biomech]

It used to be $1200..

Used to be? Was at that price for like 3 days.

Anyway this bear phase is quite strong but given anyone is so pessimist I think it may be almost over. Not saying it won't drop further though.

I hope so. Another 50 bucks down and I can afford to buy a whole bitcoin and hold it

[Wilhelm]

..............

My conclusion, based on 45 years of living in the United States and watching just how rapacious it's government is, is that it will happen at some point. I am of the opinion that the bitcoin protocol and community are resilient enough to withstand it, but saying that it cannot happen or even that it's unlikely seems too complacent. But adoption will have to reach larger scales by quite a lot before they feel that threatened. Right now it's a diversion and cause for some concern to them. That can change. We want that to change. But we should NEVER be complacent when dealing with something that can potentially break a 500 plus year stranglehold on monetary exchange.

It's more fun looking at the United States as an outsider
I strongly believe that the United States is already working on a plan B and C to kill bitcoin.
Plan A is watch it kill itself and never become a currency.

Since P2P filesharing is hard to stop I don't think they can ever stop Bitcoin. Trying to stop it now would only make it more interesting.

Why kill bitcoin? We all know how the fiat situation of the USA is. Bitcoin would be like having an accounting firm checking your bookkeeping. There is no escape, your can't fake your books.
Printing money will no longer be possible and countries (incl. USA) would need to earn their money just like their citizens. Waging war would be a costly business so I also believe that the world might even become a better place.

[Biomech]

..............

My conclusion, based on 45 years of living in the United States and watching just how rapacious it's government is, is that it will happen at some point. I am of the opinion that the bitcoin protocol and community are resilient enough to withstand it, but saying that it cannot happen or even that it's unlikely seems too complacent. But adoption will have to reach larger scales by quite a lot before they feel that threatened. Right now it's a diversion and cause for some concern to them. That can change. We want that to change. But we should NEVER be complacent when dealing with something that can potentially break a 500 plus year stranglehold on monetary exchange.

It's more fun looking at the United States as an outsider
I strongly believe that the United States is already working on a plan B and C to kill bitcoin.
Plan A is watch it kill itself and never become a currency.

Since P2P filesharing is hard to stop I don't think they can ever stop Bitcoin. Trying to stop it now would only make it more interesting.

Why kill bitcoin? We all know how the fiat situation of the USA is. Bitcoin would be like having an accounting firm checking your bookkeeping. There is no escape, your can't fake your books.
Printing money will no longer be possible and countries (incl. USA) would need to earn their money just like their citizens. Waging war would be a costly business so I also believe that the world might even become a better place.

I believe you. Watching it from the inside has been an exercise in frustration. It has become something monstrous and alien in just my lifetime. It doesn't even superficially resemble the country I became an adult in, and that's not a significant amount of time. To me, it looks much like Germany just before the collapse of the Weimar republic.

I also agree with your conclusions.

[labsbitforum]

..............

My conclusion, based on 45 years of living in the United States and watching just how rapacious it's government is, is that it will happen at some point. I am of the opinion that the bitcoin protocol and community are resilient enough to withstand it, but saying that it cannot happen or even that it's unlikely seems too complacent. But adoption will have to reach larger scales by quite a lot before they feel that threatened. Right now it's a diversion and cause for some concern to them. That can change. We want that to change. But we should NEVER be complacent when dealing with something that can potentially break a 500 plus year stranglehold on monetary exchange.

It's more fun looking at the United States as an outsider
I strongly believe that the United States is already working on a plan B and C to kill bitcoin.
Plan A is watch it kill itself and never become a currency.

Since P2P filesharing is hard to stop I don't think they can ever stop Bitcoin. Trying to stop it now would only make it more interesting.

Why kill bitcoin? We all know how the fiat situation of the USA is. Bitcoin would be like having an accounting firm checking your bookkeeping. There is no escape, your can't fake your books.
Printing money will no longer be possible and countries (incl. USA) would need to earn their money just like their citizens. Waging war would be a costly business so I also believe that the world might even become a better place.

What makes you think it wasn't the US government that launched bitcoin?  We need a replacement/backup currency in place for when the US national debt reaches a level that the US dollar begins to collapse.  http://www.usdebtclock.org/

Rather than passing the global financial leadership position on to the next emerging economic leader you simply change the rules...

[Biomech]

..............

My conclusion, based on 45 years of living in the United States and watching just how rapacious it's government is, is that it will happen at some point. I am of the opinion that the bitcoin protocol and community are resilient enough to withstand it, but saying that it cannot happen or even that it's unlikely seems too complacent. But adoption will have to reach larger scales by quite a lot before they feel that threatened. Right now it's a diversion and cause for some concern to them. That can change. We want that to change. But we should NEVER be complacent when dealing with something that can potentially break a 500 plus year stranglehold on monetary exchange.

It's more fun looking at the United States as an outsider
I strongly believe that the United States is already working on a plan B and C to kill bitcoin.
Plan A is watch it kill itself and never become a currency.

Since P2P filesharing is hard to stop I don't think they can ever stop Bitcoin. Trying to stop it now would only make it more interesting.

Why kill bitcoin? We all know how the fiat situation of the USA is. Bitcoin would be like having an accounting firm checking your bookkeeping. There is no escape, your can't fake your books.
Printing money will no longer be possible and countries (incl. USA) would need to earn their money just like their citizens. Waging war would be a costly business so I also believe that the world might even become a better place.

What makes you think it wasn't the US government that launched bitcoin?  We need a replacement/backup currency in place for when the US national debt reaches a level that the US dollar begins to collapse.  http://www.usdebtclock.org/

Rather than passing the global financial leadership position on to the next emerging economic leader you simply change the rules...

It has occured to me.

The reason I don't think so, though it would be a beautiful "black" op. is that when it comes to monetary policy, the USG has shown a truly remarkable lack of imagination since their great god J.M. Keynes found his "long run". Now I could see one of the "shadow" organizations within the USG doing it on their own, but it just seems a bit too elegant for their type.

But again, you can't discount the possibility. Especially since it has a counter effect of destabilizing OTHER fiat currencies to a greater degree (due to scale) than the dollar or Euro. It could actually strengthen the big boys by strangling the small ones.

[piramida]

It has become something monstrous and alien in just my lifetime. It doesn't even superficially resemble the country I became an adult in, and that's not a significant amount of time. To me, it looks much like Germany just before the collapse of the Weimar republic.

I don't think it changed that much if at all. Just as you grew older you got less enamored with fairy tales that every government spreads to control their humans. Every government's monstrosity is in direct correlation with the power they hold, they, just like corporations, never actually care about individuals or environment or peace; the only thing on their agenda is monetary profit and control over resources, everything else are fairy tales of different depth, from the "I am god so do as I say" in North Korea to "We live in a free society and elect our president" in USA

[Biomech]

It has become something monstrous and alien in just my lifetime. It doesn't even superficially resemble the country I became an adult in, and that's not a significant amount of time. To me, it looks much like Germany just before the collapse of the Weimar republic.

I don't think it changed that much if at all. Just as you grew older you got less enamored with fairy tales that every government spreads to control their humans. Every government's monstrosity is in direct correlation with the power they hold, they, just like corporations, never actually care about individuals or environment or peace; the only thing on their agenda is monetary profit and control over resources, everything else are fairy tales of different depth, from the "I am god so do as I say" in North Korea to "We live in a free society and elect our president" in USA

If you're talking about it's nature, it hasn't changed significantly since 1917. (When the Senate was abolished in all but name). However, in it's actual presence in our lives and regulation of fucking EVERYTHING, it has accelerated significantly since I was young. When I was a young man, I could carry a rifle practically anywhere if I wasn't waiving it around. I could walk into a courthouse without being searched. I could walk at night without being accosted. I was never even ASKED to identify myself at random. And the police at least pretended to respect the laws they were hired to uphold.

Now, in most parts of the country (I've been to most of them), it's an open police state. They can, and do, kill with impunity. I could go on and on, but I think I make the point.

I never was all that enamored of the fairy tales, but I think the biggest wake up for me was how many of my friends went on vacation to other countries and never came back. When you hear those fairly tales for your whole life, but are able to hack into the networks and see the other side, it gets pretty hard to deny. When you can watch your nation tumbling headlong into the abyss at a pace that would have frightened Nero, then you really have to reassess. The vaunted dollar is worth about -3000% from the time I first entered the workforce. While it's rate of decline is not as bad as it was a couple of years ago, it's still ugly. Wages have not even come close to keeping up with inflation, and yet more dollars are made. I could again cite hundreds of examples, but you get the point.

[Wilhelm]

..............

My conclusion, based on 45 years of living in the United States and watching just how rapacious it's government is, is that it will happen at some point. I am of the opinion that the bitcoin protocol and community are resilient enough to withstand it, but saying that it cannot happen or even that it's unlikely seems too complacent. But adoption will have to reach larger scales by quite a lot before they feel that threatened. Right now it's a diversion and cause for some concern to them. That can change. We want that to change. But we should NEVER be complacent when dealing with something that can potentially break a 500 plus year stranglehold on monetary exchange.

It's more fun looking at the United States as an outsider
I strongly believe that the United States is already working on a plan B and C to kill bitcoin.
Plan A is watch it kill itself and never become a currency.

Since P2P filesharing is hard to stop I don't think they can ever stop Bitcoin. Trying to stop it now would only make it more interesting.

Why kill bitcoin? We all know how the fiat situation of the USA is. Bitcoin would be like having an accounting firm checking your bookkeeping. There is no escape, your can't fake your books.
Printing money will no longer be possible and countries (incl. USA) would need to earn their money just like their citizens. Waging war would be a costly business so I also believe that the world might even become a better place.

What makes you think it wasn't the US government that launched bitcoin?  We need a replacement/backup currency in place for when the US national debt reaches a level that the US dollar begins to collapse.  http://www.usdebtclock.org/

Rather than passing the global financial leadership position on to the next emerging economic leader you simply change the rules...

Where am I claiming that the US government launched bitcoin? I'm merely stating that they aren't stopping it.

If the US debt reaches a level that the US dollar collapses they will invent a new currency like the US Yen and screw over all debtors.

You do realize that the wealth in US and other countries is superficially created?

If bitcoin would be the only currency wealth would have to be earned and not printed.
Governments would need to be efficient and have less tools to manipulate the economy.
If this is a good or bad thing you can decide.

Edit: I am pro bitcoin because I believe that governments should be efficient, and it might stop wars and bring peace

[Wilhelm]

..............

My conclusion, based on 45 years of living in the United States and watching just how rapacious it's government is, is that it will happen at some point. I am of the opinion that the bitcoin protocol and community are resilient enough to withstand it, but saying that it cannot happen or even that it's unlikely seems too complacent. But adoption will have to reach larger scales by quite a lot before they feel that threatened. Right now it's a diversion and cause for some concern to them. That can change. We want that to change. But we should NEVER be complacent when dealing with something that can potentially break a 500 plus year stranglehold on monetary exchange.

It's more fun looking at the United States as an outsider
I strongly believe that the United States is already working on a plan B and C to kill bitcoin.
Plan A is watch it kill itself and never become a currency.

Since P2P filesharing is hard to stop I don't think they can ever stop Bitcoin. Trying to stop it now would only make it more interesting.

Why kill bitcoin? We all know how the fiat situation of the USA is. Bitcoin would be like having an accounting firm checking your bookkeeping. There is no escape, your can't fake your books.
Printing money will no longer be possible and countries (incl. USA) would need to earn their money just like their citizens. Waging war would be a costly business so I also believe that the world might even become a better place.

What makes you think it wasn't the US government that launched bitcoin?  We need a replacement/backup currency in place for when the US national debt reaches a level that the US dollar begins to collapse.  http://www.usdebtclock.org/

Rather than passing the global financial leadership position on to the next emerging economic leader you simply change the rules...

It has occured to me.

The reason I don't think so, though it would be a beautiful "black" op. is that when it comes to monetary policy, the USG has shown a truly remarkable lack of imagination since their great god J.M. Keynes found his "long run". Now I could see one of the "shadow" organizations within the USG doing it on their own, but it just seems a bit too elegant for their type.

But again, you can't discount the possibility. Especially since it has a counter effect of destabilizing OTHER fiat currencies to a greater degree (due to scale) than the dollar or Euro. It could actually strengthen the big boys by strangling the small ones.

Good point.

Bitcoin could hit other economies harder and make more people invest in USD/Euro/BTC.
Maybe they we're even expecting China to get hit hard

[Fabrizio89]

..............

My conclusion, based on 45 years of living in the United States and watching just how rapacious it's government is, is that it will happen at some point. I am of the opinion that the bitcoin protocol and community are resilient enough to withstand it, but saying that it cannot happen or even that it's unlikely seems too complacent. But adoption will have to reach larger scales by quite a lot before they feel that threatened. Right now it's a diversion and cause for some concern to them. That can change. We want that to change. But we should NEVER be complacent when dealing with something that can potentially break a 500 plus year stranglehold on monetary exchange.

I'm going to say something that may sound crazy to most people, but in this decades we could see governments become obsolete, if they aren't already, having a wide perspective of things. Corporations are and will be always more the center of our world, leading progress and innovation and it seems to me that already now it's just a matter of time until they have more power than governments. Just think how much progress in artificial intelligence will increase in the next decade, just take a look at some of the projects from IBM on smart cities or Watson, or Google with its translator and facial recognition alghoritms. These are just small pieces of what will become a big picture some day. Why should we need a government then?
And Bitcoin is one of those pieces. This could be the longest bear phase we seen so far, but I ultimately believe cryptos are part of the future. Bitcoin couldn't have come at a better time.