Tldr: bought bitcoin in 2010 and got lucky sitting on it
I find these story of stories silly but also indicative of the market. We are in a crytpocurrency mania and these read like the "Meet the 25 year old dot com millionaire who bought stock in valinux/webvan/pets.com/etc!" from 1998 that dragged even more nontechnical people into the manic runup then.
All I know is people that I'd never expect to know what bitcoin is are suddenly talking about it. What's that tell you?
It "already" went mainstream in 2012-2013. This is a second speculation bubble. It tells you to get out before it comes crashing down, because it will.
Yes, this reflects my position: I'm out of all cryptocurrencies except for a small bit to fuel a couple side projects. I'm waiting for the coming crash so I can buy.
Everyone says that but when the crash actually happens they always get cold feet because the prevailing view is that Bitcoin is dead and done and never going to recover so they lose their nerve and don't follow through. But best of luck.
No, I don't think you understand the scale we are talking about here if this becomes a world wide common digital currency. Your political dogma is getting in the way of you understanding what Bitcoin's real potential is.
Bitcoin will never become the "world wide common digital currency": it's deflationary in the long term, very volatile int he short term, and transactions are expensive and slow. Maybe some other cryptocurrency could, but not bitcoin.
It could stay as a store of value though, like gold.
Whether or not you think that matters is political dogma.
"very volatile int he short term"
Looking at the one year time scale BTC/USD is only about 2-3x as volatile as USD/EUR. Bitcoin volatility in general has been trending DOWN since it's inception as you would expect something to become more stable as the market matures and more people adopt it.
By what standard? A typical transaction costs less than a dollar and takes about 10 minutes. Once the people holding the block size hostage are out of the way you can expect the cost to return to cents and the speed to be more reliable at 10 minutes or less.
Anyone who thinks Bitcoin can be a store of value like Gold w/o having utility as money is fooling themselves. You need to both.
I don't understand why you think Lightning Network wouldn't be a solution - the crypto side of it is very well-specced and works, and there's plenty of research papers describing various methods of finding a reasonably short path across routes between nodes. It solves specific problems Bitcoin users have today (it provides fast, cheap transactions, which Bitcoin currently doesn't), so it will gain quick adoption.
It's primarily held up on Bitcoin's variant on party politics, more than anything else - there's functional payment channel code working on Litecoin's main network and Bitcoin's testnet.
Because all this digital coin thing is bullshit. When it becomes relevant, it will be corporate owned (isn't it already?) and it will be the new mainstream politics/economics, not the "REVOLUTION!". Just like Facebook/Google are the internet nowadays. Very far from that liberate and revolutionary thing, right?
It isn't very revolutionary - it's a capitalist system through and through. That has absolutely nothing to do with the technical details of why Lightning Network won't work.
I never said "lightning network" won't work. I said that it doesn't matter. If bitcoin someday becomes a thing, it will just behave like dollar, nothing less. With more technology, someone or some corporation will find a way to concentrate more power. Then someone will come up with an idea of a new way to do transactions. Algorithms don't fix social issues. People fix social issues.
> Bitcoin will never become the "world wide common digital currency": it's deflationary in the long term, very volatile int he short term, and transactions are expensive and slow. Maybe some other cryptocurrency could, but not bitcoin.
You said that Lightning network would drop transaction costs thus making bitcoin workable. I said it would do nothing because the problem is not technical but social. But I don't mind if you understood a different thing.
Bitcoin could be workable, and be a world wide common digital currency, without starting a revolution, you realise. A dollar that I can send to people without a bank being involved is still a useful concept.
I agree with you. I just don't think the banks and their private governmental armies will allow it to happen freely. And yes they can stop it. They probably are behing its creation, not a fake japanese alter-ego.
For starters the people pushing lightning are religiously opposing any increase in the block size. For lightening to even be viable on a world wide scale the block size will need to be increased.
The point of Lightning is that transactions don't go on the blockchain until they need to be settled - payment channels could be open for months or years without being settled if there's no need to access the underlying currency. If everyone uses Lightning Network for the vast, vast majority of transactions (and there's no reason not to), the only times most people would ever have to put something on the blockchain is when the entity on the other end of their payment channel disappears, or they have more currency than they've ever had before.
The issue, if anything, is exactly the opposite - that there'll be little incentive to mine without enough transactions on the chain, and the security of the network will come crashing down.
Lightning Network also provides for decentralised, trustless currency exchanges - so the inflexibility of one blockchain will finally not matter much. You could pay someone in bitcoin and the other person could receive litecoin as easily as you can do similar things with a credit card today.
You haven't addressed my comment you are just blabbering. In order to open and close lightening channels on chain transactions are required. Heck in order to protect yourself from fraud in the lightening model you need to be able to do on chain transactions.
Nothing you said addresses the concern that the people pushing lightening network the hardest are religiously opposed to raising the block size which will make it impossible to deploy lightening on a world wide scale because there won't be enough on chain transaction space to open up these lightening channels.
I'd have to have opened a grand total of one channel over the past four years, personally - I have a suspicion that most people do not regularly gain more income than they've ever had before, as they spend it at a broadly similar rate as they gain it.
In addition to this, as I said, the fact that Lightning Network is a protocol that allows cross-blockchain transactions between any two chains supporting Lightning Network means that if, as you say, Bitcoin has severe problems, everyone will just jump ship to another currency, as there will be far fewer switching costs.
Lightning network design is akin to tacking a vacuum tube communication system onto the outside of a defunct slow steam locomotive rail system.
It's nonsensical, because you might as well just design an entirely new protocol and token network (which is essnetialy what the lightning network is, and there's no reason to tie it to an existing cryptocoin ledger unless you're trying to improve the antiquated design which coincidently you have coin units in).
The issue is that Lightning Network depends on the ability to settle transactions in a double-spend-resistant cryptocurrency in order to work at all - the fraud resistance scheme depends on it, otherwise there is no way to prove that (a) money hasn't been created out of thin air and (b) two parties with a payment channel between them agree on the state of their money.
If you can successfully build a Lightning Network like system without a blockchain, please do.
Not in the short term, bud. I have always said about the real value of Bitcoin since I started mining in 2010: "What really is the value of money laundering, tax-less transactions and a quasi-anonymous store of value?" Bitcoin made the down payment on the car I drive every day. I know what Bitcoin is worth, but I'm telling you, we're in another speculation bubble in the short term, and it would be wise to gtfo of your position.
I sold a domain back in 2011 where the buyer offered to pay via Bitcoin. It was a decent sized transaction. I don't remember the exact exchange rate but it would have likely been upwards of 1,000 BTC.
The answer to that what if is you probably would have sold 80% of them at $30 each, and then most of the rest at $100 each like most people who got them early. Getting back 10x profit is hard to turn up when you have no idea of the future.
At least you sold it. I registered a bunch of great domains when I was a college freshman in 1993. They were free to register, you only had to submit a form via email. I had, amongst others:
grateful.com
eleet.com
cjs.com
snell.com
When Network Solutions won the contract to administer them, they started charging $70/year/domain and I was a poor student and let almost all of them lapse. I lost all of those ones. The only ones I kept were bikeworld.com (registered it for my dad's company) and chrissnell.com. Never made a dime off a domain.
I used to trade domains back when I was in college in 2007 (before the market crashed in 2008). It was still wildly lucrative. You could buy a domain for $10k one day and sell it for $30k two days later.
A lot of people had similar stories: they registered Cars.com or some other major domain back in the 90s, sold it for peanuts, and watched with dismay as it was eventually flipped for 7 figures 10 years later.
I know a guy who, on a whim, registered about 100 double-letter domains (AB.com, AC.com, etc.), then let them expire.
Each of those would be worth a minimum of $250k today
It's worse than just liquidity, if he can unlock his wallet on his phone to verify it and its balance on the spot.... not only is it liquid but he's effectively carrying it on himself in cash at all times.
At least it's only $2.5 million or so remaining, since the rest is now likely in assets that require more effort than merely access to this person+phone (and attempts to rob a person of assets in a bank are usually more traceable than stealing bitcoin). Still seems a bit crazy though.
The difference is that people who got rich through business are already well known, so it’s too late for them. This guy has the option to stay hidden, so he takes it.
On a side note, I recall a story told by Chris Pine being surprised by all of the bodyguards surrounding an extra on the set of Star Trek. That extra was Jeff Bezos who had a small part in the movie. Chris Pine had apparently never heard of him.
Not as well known as Elon Musk obviously but with 25 m in the bank you're unlikely to be completely invisible like this guy. Someone is bound to know you exist.
It's unlikely that he did it in a single transaction, he more likely split it up over a few days. Even a year ago, Bitcoin daily exchange volume was ~$160M, so he wouldn't have had too many problems.
His original mining wallets have already been identified so if he moved the coins at all, it would be big news. Supposedly he hasn't touched any, yet...
I personally do not expect those figures to move anytime soon. My interpretation is that, if you're the architect of Bitcoin, moving this money could send the message of 'cashing out', affecting its perceived value.
There are a million ways you can hide information securely (like a private key), and it's far easier than hiding gold. And only an idiot would keep a cryptocoin wallet on 1 computer with no backup.
You put your money in a bank and it's no longer your money. Trust me, I had my main bank account locked up for an entire month due merely to (groundless) suspicion (basically, I made too much legitimate money too quickly (!!)). And then, Simple.com closed my account without warning, apparently due to violating TOS by not using it for "personal use only", which was total bullshit (messing up payments in transit AND not getting back to me for DAYS about where the hell they put my money: https://twitter.com/pmarreck/status/739994477339758592)!! Don't think for ONE SECOND that your bank money and your credit will always be accessible to you (not to mention fraud, identity theft, and other things that are not possible with cryptocurrencies). There're plenty of cases of some government dipping into accounts and helping themselves. If you think your money is safer in a bank than in a properly-secured private key, you're pretty naïve.
At least in the US, the worst case is a temporary lockup like you described. Banks are limited in how long they can hold your money. If your money is in a bank, it is guaranteed from fraud and theft.
You can't say that about Bitcoin. Add to that the fact that if you want to use Bitcoin to buy most anything you are going to have to either rely on a bank to handle transfers or find someone on the street with cash to buy the Bitcoin (dangerous with no guarantees).
I'm totally I'm unconvinced that you're offering a better alternative.
If you lose a key then that's it you're done forever. With banks you had hassles but clearly you got your money back. I have a hard time believing a billionaire wouldnt also be able to get their money back from the bank.
Math guy neglected to mention the ponzi scheme aspect of these cryptocoins, where the early adopters amass large quantities of coins for no reason other then running the software for a short duration and significantly lower cost of processing cycles, all by design.
Rubes trading excessive amounts of fiat cash for digital tokens are baffling, and a testament to how deranged economics can get simply by assuming an asset is rare or desirable.
Cryptocurrency is not a ponzi scheme. A ponzi scheme has an expectation that you'll be paid dividends or returns by the company you are investing in. Essentially, old investors are being paid by new investors. There is only one investment period for these tokens (eg. ICO).
There's nothing ponzi schemish about that. The cost of mining is proportional to competition for new coins. Not much different than any other resource extraction.
The irony here is the "resource" being created by processing cycles is not rare. This is evident by the 800+ variations of cryptocoins. Often times, designers have chosen to 'premine' large sums of coins which are sold off directly for a set price, which then is arbitrary raised because people falsely believe these things are rare.
It's a ponzi scheme in a loose sense, as early adopters produced and acquired large sums of arbitrary numbers written to a database and by design, as time passes later users running the same software on an equally powerful machine are "rewarded" with smaller numbers written to the database.
The entire service, and minting/production of database token/coins are reproducible simply by forking or running a new genesis block with the same protocol.
Denying the inherent ponzi scheme payouts designed into the early cryptocoin protocols is neglect or delusional at best, and at worst, purely deceptive.
Of course the resources are rare. Each cryptocoin is unique to the network that backs it. The network is more than the open source software of the clients. It's also the blockchain itself, which is made more difficult to reverse through proof of work, and the userbase that uses the network/blockchain to transact value.
Something being cheap at first, and then becoming more expensive as demand for it increases, doesn't make it a ponzi scheme. By such a definition, any stock that saw its value increase would be a ponzi scheme.
The assertion of it being a ponzi scheme is pure ignorance at best, and at worse, intentional deception and defamation.
June 12, 2010, 08:14:44 PM
This is an open offer by the way.. I will trade 10,000 BTC
for 2 of these pizzas any time as long as I have the funds
(I usually have plenty). If anyone is interested please
let me know. The exchange is favorable for anyone who
does it because the 2 pizzas are only about 25 dollars
total, maybe 30 if you give the guy a nice tip. If you
get me the upgraded extra large ones or something, I can
throw in some more bitcoins, just let me know and we'll
work something out.
My 1 year old daughter really enjoys pizza too! She just
smears it all over her face if you give her a whole slice,
but she does eventually manage to get most of it in her
mouth (minus a few loose toppings of course).
If you pay actual money for bitcoins to people who've generated thousands of coins for running a piece of software circa 2010, then you've really earned your "investment" into the pyramid of blockchain hype ;)
It's called appreciation. It has happened to numerous assets. The definition of good investing is buying low and selling high. You're implying that something that produces investment returns beyond a amount is a ponzi scheme, which is absurd, and transparently so. You and I both know cryptocurrency doesn't meet the definition of a ponzi scheme. The only question is what's motivating you to make these false representations.
I had a couple thousand Bitcoin once, but then I bought a lot of drugs :(
I calculate how much it would have been worth every once and a while -- obviously it's been 1+ million USD for a while now. Alas, I actually need to work to get money.
Buying drugs is arguably the most efficient use of money. Considering that the only reason we purchase things is to ultimately get more endorphins released by our brains. Drugs can directly hack that system.
I find these story of stories silly but also indicative of the market. We are in a crytpocurrency mania and these read like the "Meet the 25 year old dot com millionaire who bought stock in valinux/webvan/pets.com/etc!" from 1998 that dragged even more nontechnical people into the manic runup then.
All I know is people that I'd never expect to know what bitcoin is are suddenly talking about it. What's that tell you?