Topic: Wall Observer BTC/USD - Bitcoin price movement tracking & discussion - page 21924. (Read 26610066 times)

Yes, some jerk had edited that article to say that I had one of the largest bitcoin fortunes and was a great fan of bitcoin. So I had to fix it.  (Thanks, but no thanks, for reminding me of another reason to hate bitcoin.)

I must update it. There are many more things that people must be warned about.

I believe this quote captures the substance of your post and is the point which merits discussion.

I agree generally, that the centralization of mining is a threat, in principle, albeit not in practice to date, to the security of the ledger.

I also agree, generally, that the current energy expenditure is far in excess of the need of the design goals.

I further agree, generally, that price motivates that expenditure.

Whether it makes "economic sense" is a strange question, politically and philosophically loaded.  Clearly it makes sense, because you have made sense of it, explaining features of its causal structure.  I think what you mean is that the gap between energy expenditure motivated by technical needs, and energy expenditure motivated by economic factors is offensive to your sensibilities.  I am somewhat sympathetic to this complaint, but the market is, as we see, without sympathy.

An argument can be made that the economic value-add of the network suffices to explain all or part of the gap which offends you, and you seem to acknowledge that implicitly, but consider it inadequate to the scale of the gap.  This view would gain respect, if you were to quantify it, or to offer a reasoned case as to why the value-add is less than the present energy cost.

No "hype" is required to explain a deviation of current price from some present fundamental metric.  All that is required is a rational discounting of a future price estimate (which should really be in the form of a distribution).

(Aside, I observe that this discussion is off-topic, which may annoy some who frequent the thread.)

I did and do both things.  Like thisand this for example.

As it says in my signature, I cannot imagine a plausible future where bitcoin will be successful.  I see many ways in which it could fail, those are two of them.  The more I read, the more skeptical I become.

Take the economy of mining, for example. Yesterday I found this paper claiming that the bitcoin mining network now consumes about as much electricity as the whole country of Ireland , ~1 GW.  I found that hard to believe, but it seems correct.  For what? So that some drug dealers can be absolutely certan that their customer will not double-spend them? So that no one can retroactively change the amount that someone spent on Overstock?  So that the police cannot seize the coins of ransomware criminals?

That absurd consumption of energy does not have any rational justification.  It does not even make the network more secure against 51% attacks, because it is still the case that 4-5 mining entities have more than 51% of the hashing power, and that situation is more likely to get worse than better if the network grows more.  Moreover, further price drops and/or the next halving may cause morethan 51% of the hashpower to be turned off -- and may be acquired or rented by a hostile entity, at scrap iron prices.

The absurd consumption of energy is merely a consequence of the block reward being fixed at 50 BTC irrespective of the price, and of the price being 50 times what the current use as currency would imply.  The overvaluation, in turn, is a consequence of the fixed supply, that created the mirage of a currency whose value will grow to astronomic levels; a mirage that led to a spiral of hoarding and absurd price increases.   The overvaluation also resulted in the block reward being 100 times or more the typical fees contained in a block, so that miners have essentially no incentive to include transactions in it.  Worse, the network consumes about 1 million dollars per day that must be provided by new investors, lured by the promise of fabulous speculative gains.  And the absurd will only grow if the price increases again.

This system simply does not make any economic sense.  It is not sustained by sound market principles, but totally by hype, by the belief of gullible people that they will become billionaries if they just buy as much bitcoin as they can and hold hard to it.

From what I have read around, most people who claim to believe in bitcoin's future do so because of various reasons -- because they own bitcoins, because they are employees or investors of bitcoin-related enterprises, because they see it as a way to buy drugs and other illegal things, because of hallucinations about it ending poverty, corruption, banks, governments... but almost never because they rationally believe that it will be a viable currency and efficient payment system.  Which is the only thing that it was designed to be, and it is becoming clear to everybody that it will not be.

Dr Stolfi I see bitcoin made it onto your wikipedia entry !

http://en.wikipedia.org/wiki/Jorge_Stolfi

Following the link I also see there was a "Beware Bitcoin!" article back in December 2013.
http://advivo.com.br/blog/jorge-stolfi/cuidado-com-bitcoin
All I ask is would you write the article now, 18 months later ?

Go write some dissenting blogs, articles, white papers, something other than trolling this spec sub.

If he was really interested in debating the merits or lack thereof of Bitcoin, he would do so in the technical discussion forum where there are people who are more qualified to address his concerns.

Every one of Dr. Stolfi's 'point's has been addressed multiple times, most of them in this very topic, over the several years he has been trolling here.

If bitcoin is to succeed, then these points must be argued against. But that rarely happens. The poster will be simply called a troll, a few ad hominen attacks on him and then put on a stupid, pointless ignore list.

The sad thing is that even the most rabid bitcoiners find it difficult to string a few words together into a logical argument to defend bitcoin. Thats what worries me most.

...economics of minining ... This system simply does not make any economic sense.  

In late 2013 Jorge took an active interest in the economics of cryptocurrencies. He became extremely skeptical about its underlying soundness and chances of success, and has been advising the Brazilian public against investment in bitcoin. [13]

Bitcoin back to $220?

As it says in my signature, I cannot imagine a plausible future where bitcoin will be successful.  I see many ways in which it could fail, those are two of them.  The more I read, the more skeptical I become.

Take the economy of mining, for example. Yesterday I found this paper claiming that the bitcoin mining network now consumes about as much electricity as the whole country of Ireland , ~1 GW.  I found that hard to believe, but it seems correct.  For what? So that some drug dealers can be absolutely certan that their customer will not double-spend them? So that no one can retroactively change the amount that someone spent on Overstock?  So that the police cannot seize the coins of ransomware criminals?

That absurd consumption of energy does not have any rational justification.  It does not even make the network more secure against 51% attacks, because it is still the case that 4-5 mining entities have more than 51% of the hashing power, and that situation is more likely to get worse than better if the network grows more.  Moreover, further price drops and/or the next halving may cause morethan 51% of the hashpower to be turned off -- and may be acquired or rented by a hostile entity, at scrap iron prices.

The absurd consumption of energy is merely a consequence of the block reward being fixed at 50 BTC irrespective of the price, and of the price being 50 times what the current use as currency would imply.  The overvaluation, in turn, is a consequence of the fixed supply, that created the mirage of a currency whose value will grow to astronomic levels; a mirage that led to a spiral of hoarding and absurd price increases.   The overvaluation also resulted in the block reward being 100 times or more the typical fees contained in a block, so that miners have essentially no incentive to include transactions in it.  Worse, the network consumes about 1 million dollars per day that must be provided by new investors, lured by the promise of fabulous speculative gains.  And the absurd will only grow if the price increases again.

This system simply does not make any economic sense.  It is not sustained by sound market principles, but totally by hype, by the belief of gullible people that they will become billionaries if they just buy as much bitcoin as they can and hold hard to it.

From what I have read around, most people who claim to believe in bitcoin's future do so because of various reasons -- because they own bitcoins, because they are employees or investors of bitcoin-related enterprises, because they see it as a way to buy drugs and other illegal things, because of hallucinations about it ending poverty, corruption, banks, governments... but almost never because they rationally believe that it will be a viable currency and efficient payment system.  Which is the only thing that it was designed to be, and it is becoming clear to everybody that it will not be.

If bitcoin is to succeed, then these points must be argued against. But that rarely happens. The poster will be simply called a troll, a few ad hominen attacks on him and then put on a stupid, pointless ignore list.

The sad thing is that even the most rabid bitcoiners find it difficult to string a few words together into a logical argument to defend bitcoin. Thats what worries me most.

Then again, the question on everyone's mind: why the F-- are you here, in the Bitcoin spec forum.  Day. After. Day. After. Day. After. Day. After. Day.

You believe that you can change the minds of a few longs that MIGHT happen across your posts?  Most of your readers are gonna be a few day traders and trolls.  That's it.

C'mon dude, the majority of bitcoin believers in the world don't even speak or read English. They certainly wouldn't spend most of their time here, supposedly hanging on your every word. So you are wasting your breath and everyone's time.

Go write some dissenting blogs, articles, white papers, something other than trolling this spec sub.

There is no shame on speaking a point of view and in time we will be able to reflect on past events and gloat.

Then again, the question on everyone's mind: why the F-- are you here, in the Bitcoin spec forum.  Day. After. Day. After. Day. After. Day. After. Day.

You believe that you can change the minds of a few longs that MIGHT happen across your posts?  Most of your readers are gonna be a few day traders and trolls.  That's it.

C'mon dude, the majority of bitcoin believers in the world don't even speak or read English. They certainly wouldn't spend most of their time here, hanging on your every word. So you are wasting your breath and everyone's time.

Go write some dissenting blogs, articles, white papers, something other than trolling this spec sub.

None of what you wrote makes any sense.

As it says in my signature, I cannot imagine a plausible future where bitcoin will be successful.  I see many ways in which it could fail, those are two of them.  The more I read, the more skeptical I become.

Take the economy of mining, for example. Yesterday I found this paper claiming that the bitcoin mining network now consumes about as much electricity as the whole country of Ireland , ~1 GW.  I found that hard to believe, but it seems correct.  For what? So that some drug dealers can be absolutely certan that their customer will not double-spend them? So that no one can retroactively change the amount that someone spent on Overstock?  So that the police cannot seize the coins of ransomware criminals?

That absurd consumption of energy does not have any rational justification.  It does not even make the network more secure against 51% attacks, because it is still the case that 4-5 mining entities have more than 51% of the hashing power, and that situation is more likely to get worse than better if the network grows more.  Moreover, further price drops and/or the next halving may cause morethan 51% of the hashpower to be turned off -- and may be acquired or rented by a hostile entity, at scrap iron prices.

The absurd consumption of energy is merely a consequence of the block reward being fixed at 50 BTC irrespective of the price, and of the price being 50 times what the current use as currency would imply.  The overvaluation, in turn, is a consequence of the fixed supply, that created the mirage of a currency whose value will grow to astronomic levels; a mirage that led to a spiral of hoarding and absurd price increases.   The overvaluation also resulted in the block reward being 100 times or more the typical fees contained in a block, so that miners have essentially no incentive to include transactions in it.  Worse, the network consumes about 1 million dollars per day that must be provided by new investors, lured by the promise of fabulous speculative gains.  And the absurd will only grow if the price increases again.

This system simply does not make any economic sense.  It is not sustained by sound market principles, but totally by hype, by the belief of gullible people that they will become billionaries if they just buy as much bitcoin as they can and hold hard to it.

From what I have read around, most people who claim to believe in bitcoin's future do so because of various reasons -- because they own bitcoins, because they are employees or investors of bitcoin-related enterprises, because they see it as a way to buy drugs and other illegal things, because of hallucinations about it ending poverty, corruption, banks, governments... but almost never because they rationally believe that it will be a viable currency and efficient payment system.  Which is the only thing that it was designed to be, and it is becoming clear to everybody that it will not be.