The last time this address was touched was 2009, and has an even 8,000 coins (back in the day, this only amounted to 320 mined blocks. You could do that in what?... a few hours/half days?[1])
The owner probably ran his system for a few hours, collected 8000 coins, thought it was a ridiculous concept and deleted everything from his system.
This seems like a fundamental flaw in the currency that makes it's deflationary properties worse.
Let's say bitcoin is to last a century, over time, there will be gradual losses to all kinds of problems, like hardware failures, owner errors, etc that cause lost of wallets, and thus, coins, forever.
There's no way to replace these, so over time, the total number of coins it not only limited, but after the last bitcoin is mined, it must decrease.
This suggests to me that bitcoin is a marvelous experiment that finally proved that such a currency is possible on a wide scale, but as a foundational currency, it has serious flaws, and it sounds like it needs to ultimately be replaced by a Bitcoin 2.0.
However, creating a new Bitcoin that is incompatible with the old would massively destroy value in the old system, so it's an interesting proposition as to how you can 'version' the Bitcoin protocol over time while not causing great upheaval.
In theory there's no limit to how much a bitcoin can be divided. Currently 0.00000001BTC is the smallest amount possible. But if there's only 0.00001 bitcoins left in the world then the program can be easily updated to allow 0.00000000000000000001BTC to be sent and used.
Bitcoins are a bit like gold, you can just keep dividing a bar up smaller and smaller into dust.
Of course if all bitcoins in the world vanished after the last block (with a reward) had been mined then that would be the end of bitcoins but that seems pretty unlikely right now.
Creating a new Bitcoin that is incompatible with the old would NOT massively destroy value in the old system. Look at Litecoin and other forks. Bitcoin holders collectively add value to Bitcoin (by simply willing to hold them and willing to pay slightly below the market price to add to their holdings), there is no single person who can change its fate. Even big rich guy's wealth depends on many poorer people to accept his BTC for the service they provide him with.
To switch to Bitcoin 2.0 all holders need to see no future in Bitcoin 1 and panic-sell into Bitcoin 2. If this happens, it's another huge bet (like going from USD to BTC), but the prerequisite is to Bitcoin 1 really be in trouble. Divisibility problem is not a fatal flaw, it can be patched, worked around, or counted in as an extra cost.
On the other hand, USD has tons of fatal flaws: it's being printed like crazy and it needs to be stored in banks that easily freeze, tax and censor accounts. Essentially, USD is not even an asset. It's always a chain of promises by bankers and presidents, who brake them constantly in various ways. Compared to USD, Bitcoin is infinitely better, so people are willing to make a bet that Bitcoin can replace USD. Imbalance like that is the requirement to start discussing a jump from BTC1 into BTC2.
Well, we just use fractions of the one remaining. While the protocol currently supports 8 decimals, there isn't any hard limit; we can continue dividing forever as needed.
Are there any studies on the rate at which physical money disappears from the system? I know physical money can be printed to make up for it, but like all things the electronic counter part of physical money will become much more reliable than physical money over time. Do you worry about google corrupting a digital file you emailed to yourself?
Way smaller scale but back in 2011 I heard about bitcoins and crunched some numbers. I realized that at the current price (~$16), I was able to make profit mining them on my desktop since it would only cost about ~$12 in electricty per coin.
I got myself 3 or 4 coins (I wasn't even in a pool at that point) but then the price crashed in late 2011 and I eventually forgot about it. Since then I've reformatted and I remember having that "Oh shit" moment as I was reformatting but after looking up the price I realized I was only out about $10. This was late 2011.
Now every time I see a HN post about a new price milestone I kick myself. Today I could have sold them for ~$1500-2000.
>Now every time I see a HN post about a new price milestone I kick myself. Today I could have sold them for ~$1500-2000.
You shouldn't. You only lost $10 by reformatting that pc - your only loss is from not buying the bitcoins at that point, of which most of us are guilty.
I got 2 coins off a guy in a coffeshop about 1 year ago for $20. I sold them today for about $1600. About 2 years ago I almost dropped $1000 on bitcoins but was talked out of it by family and friends. It feels weird. I can't connect bitcoins to social or economic value. The "china explosion" of btc price won't last imho. And while I like bitcoin, it's just a currency and not an investment, as in it doesn't generate value itself. I have a hard time connecting stocks to social or economic values too. I'd like to think we can invest in actual businesses where it's a better connected to reality. I don't know how to do that however. Not yet anyway.
Any economy built on a currency that fluctuates this wildly is going to be unpleasant.
I don't know how someone can genuinely believe that bitcoin is a currency with this kind of pricing turbulence. It is behaving like the focal point of rampant speculation.
I suspect the current fluctuation is only a result of newness of bitcoin and that over the years as it becomes more familiar, the fluctuation will mirror more common currencies. I suspect that in order for that to happen, it will need to become more liquid, with more places accepting bitcoin for purchases, and more people using bitcoin to purchase goods rather than as an investment tool.
The "problem" is that the number of bitcoins is asymptotically bounded from above, but there is so far as we know no similar bound on human productivity and output. So there's really no reason to think that the deflation of bitcoin would ever die off. At most it would slow down, as right now the upward trend is fueled not just by the "natural" deflation of the currency but also as it plays catch-up to the market cap of more established currencies, like the USD.
It's worse than that. As the post at the root of this thread observes, it's possible for bitcoins to be lost forever. So while the total number of possible BTC is merely asymptotically bounded, the actual number of BTC in circulation is going to peak and then go into a period of inexorable decline once the rate at which BTC are "destroyed" by data loss exceeds the rate at which BTC can be mined.
"The "china explosion" of btc price won't last imho"
You might be wrong ;) This week, Yi Gang (a very high-ranked chinese government official: no less than the Director of the State Administration of Foreign Exchange and Deputy Governor of the People's Bank of China), said he would personally adopt a long-term perspective on the currency! See https://news.ycombinator.com/item?id=6782870
Did you get actual cash for the transaction, or some kind of goods or service? I'm having a hard time finding people who actually got CASH MONEY for a bitcoin.
There are dozens of exchanges where you can get "cash money" for Bitcoins. Lately, the buy side (the people with cash money wanting to buy Bitcoin) is much more active than the sell side, which is why it's been climbing. In the US there's Coinbase and CampBX. Worldwide, there's Mt Gox (probably the largest, and, I believe, the oldest), and a whole lot of others. But, to get US dollars deposited into a US bank account, I'm using Coinbase.
Ugh, I kick myself all the time for not investing in bitcoins. I did end up buying 30 of them back in the earlier days of SilkRoad... Wish I saved them instead.
Given tptacek and colleagues' paper on the RSA-doomsday scenario that might not be too far out in the future, I think it might be possible to reclaim (steal?) that money in the future.
Obviously when RSA's end nears, assuming bitcoin is still around then, we'll see some sort of managed transition to a newer cryptosystem. I imagine the network will probably support announcing transactions saying something like, "Wallet X will now be known as wallet Y" where Y uses the new cryptosystem. And presumably only the first valid signed announcement will count and make its way into the block chain. It's at this point that I think people with enough compute power might be able to "steal" lost wallets.
Thanks, I did not know that. But there's little reason to believe that whatever encryption that bitcoin uses (presumably EC?) won't be vulnerable at some point in the future.
DES was broken about 23 years after it was designed.
I'd be surprised if 30 years into the future (probably earlier given the incentives we have to break crypto today are so much than those we had in '98) if these algorithms weren't broken.
There is actually no precedent of a cryptographic system relying on computational hardness surviving for more than a generation. And given that our fundamental theoretical understanding hasn't really evolved beyond, "we think a bunch of these problems are hard", things are likely to stay that way for a while.
That's an oversimplification. The field of cryptography has advanced by orders of magnitude since DES and RC4. Each time one of those breaks, we abstract the weakness into a class of vulnerability that the next algorithm will be immune to.
>There is actually no precedent of a cryptographic system relying on computational hardness surviving for more than a generation.
That's because cryptosystems relying on computational hardness aren't that old.
>And given that our fundamental theoretical understanding hasn't really evolved beyond, "we think a bunch of these problems are hard", things are likely to stay that way for a while.
These assumptions haven't really broken though. You give an example of DES, but that doesn't rely on computational hardness assumptions. Asymmetric crypto with a trapdoor function does. There hasn't even been a big breakthrough in the original prime number factorization assumptions of RSA/DH.
I'm confused, how can you break EC but not be able steal people's money?
Similarly, if you found had preimage attack for ripemd160(sha256(x)) (you can find a public key with the same hash as any other hash), how could you not steal people's money?
The public key behind an address is only revealed if you do a transaction to spend the bitcoins in that address. So the public key is effectively secret until just before it is scrapped with normal use.
Say public key x receives 1 BTC in block A. I'm guessing it's encoded as ripemd160(sha256(o)) -> 1 BTC -> ripemd160(sha256((x)) where o is some other public key with sufficient funds. I create a new key pair with public key y, such that ripemd160(sha256((x)) = ripemd160(sha256((y)). From now on let's call this address hash h.
In block B, I make a transaction h -> 1 BTC -> s. Where s is a securely generated public key that I own. I then sign this transaction with my forged public key, which hashes to h.
If you want to play the Bitcoin lottery, it's a far better idea to focus your computing power on solo mining. You have far more chance guessing a 25 bitcoin block than getting a valid private key.
Actually the Bureau of Engraving and Printing will replace damaged or destroyed US currency if they can determine to their satisfaction how much has been destroyed. They replace over $30 million of currency yearly. The most common causes of mutilation are are fire, water, chemicals, explosives; animal, insect or rodent damage; and petrification or deterioration by burying.
Damaged US Currency can be replaced ONLY if:
(1) 51% or more of the bill is recovered (in some form)
(2) the serial number of the bill can be identified
(Or at least that's what I was told during a tour of a US Mint several years ago.) Money burned up in a fire is not replaceable.
Correct. Except most of us don't keep all our money in our wallet or under our mattress. We keep it in a bank. Which is insured by the federal government. Bitcoin is akin to keeping all your money in a big bag in a single location if you don't back it your digital wallet offsite.
That is the local effect, which is the same for cash vs bitcoin and different for deposit vs bitcoin (though of course there is nothing preventing bitcoin-denominated deposits). The global effect for bitcoin is more like nuking a bit of gold - you have reduced the total supply permanently - whereas for cash we can just print more.
Hmm, so that means that someone who solved the crypto problem (say, NSA) could simply take over [presumably] abandoned wallets, which would be nearly undetectable compared to other uses of such attacks, but could still have a huge impact on Bitcoin ecosystem simply due to the large mass of such wallets.
And this is one of many reasons why it will become increasingly important to beef up the security and robustness of the Bitcoin network and ecosystem. It has some of the same failure modes as traditional bank/government-backed currency. But it also has a set of a different kind of failure modes that should also be minimized or mitigated.
Question: How hard/impossible would it be for me as a US citizen to cash in on a large lot like that? Say I want 10 million dollars for some partying I want to do for New Years.
It seems some people have mega riches, but is it actually feasible for me to realize that money (in US Dollars, deposited to my Chase bank account)?
The whole price of Bitcoin is an illusion that they use to get people to keep buying. It's the result of a bidding war.
There is an article here about that basically explains (this is my interpretation not his words) how the price of BTC is kindof like the sticker price on an item in the store. It doesn't represent the real value, it's simply the value as perceived by consumers and is, in a way, fixed -- http://falkvinge.net/2013/09/13/bitcoins-vast-overvaluation-...
But the fact that early adopters are psychotically rich for doing nothing is... one of the many signs of a flawed system. Basically if everyone started selling the market would destabilize because supply/demand curve would change & I'm pretty sure the value of what they're selling would plummet before they can unload most of their stack.
EDIT: Since I was immediately downvoted, please note that this happens regularly any time you speak ill of Bitcoin's pyramid scheme aspects and is completely expected/anticipated when I post these responses. It's a public service that I will drop eventually, but think about this -- even people who own a ton of BTC (article I linked to) criticize it as being insanely flawed. They only stay with it because as they point out, they believe the price will continue to rise. Speculators love it because they KNOW it's flawed, but still feel confident in a bet that the price will rise. I think it's why ultimately it will take gov intervention or a market catastrophe that screws over all the speculators to finally destroy such interest in Bitcoin and finally give it a chance to start over again... as a currency.
> But the fact that early adopters are psychotically rich for doing nothing is... one of the many signs of a flawed system.
No they risked their money with a speculation that had almost 0% chance of getting any return in the future. They took a huge risk, without this, bitcoin would not exist. And that's why they are rewarded: Taking a risk that almost no one would have taken to create something big.
> Basically if everyone started selling the market would destabilize because supply/demand curve would change & I'm pretty sure the value of what they're selling would plummet before they can unload most of their stack.
Bitcoin had already 2 big crashes (one time from $30 to $1-2 and one time from 200+$ to under 100$) and still recovered afterwards because there's people like me who see the potential in bitcoin.
And please tell me what your "real value" exactly is, because in my opinion their is only a perceived value for everything in the world.
Isn't bitcoin easily manipulated? Let's say I have 1% of all bitcoins. I sell half of them, wait for the price to fall, and buy back to have 1.1% of all bitcoins.
Repeat each few weeks, and let's say there's 20 people that realized this and have enough bitcoins for this to be feasible.
End result = currency that's mostly owned by a few people. And when everybody realize this - bubble collapses.
At least that was my train of thought when I first learnt about bitcoin and now I hate myself for being too risk averse :)
You might working with an oversimplified model of the market. If you have 1% of all bitcoins, you're not going to be able to sell them all at the highest standing offer-to-buy (OTB).
If the highest standing offer to buy is at $700, it's not going to be an offer to buy all 120,000 of your BTC. It might be an offer to buy 100BTC. So you sell 30BTC at $700 and then move on to the next lowest OTB, which might be 20BTC@$699.95. You walk down a line of highest OTBs and the new market price is the highest OTB that you didn't manage to exhaust. The price is lowering as you sell out.
Similarly, you're not going to be able to buy in with your entire pot at the lowest standing offer-to-sell (market price). You'll exhaust the lowest offer-to-sell, then move on to the next highest offer-to-sell, etc. The price is rising as you buy in.
Assuming that the market is efficient, the decrease in price as you sell out and the increase in price as you buy in will be perfectly balanced against each other, and any extraneous gain or loss will reflect changes in market information that occurred while you were executing. Of course the market is not in practice perfectly efficient, but that applies to any other traded commodity.
Ok, this was a weird segue. I thought we were talking about market capitalization and whether or not people use it outside of bitcoins, which they all do for basically everything.
However, non-voting common stock equities that do not grant dividends basically have no "intrinsic value" either I guess. It is just a proxy for the public opinion of the net worth of the underlying asset, similar to bitcoins.
I think this kind of "intrinsic value" line of reasoning isn't a very strong argument in general though because mostly the value of commodities is essentially based on the value people assign it via free market and psychological principles.
You sort of don't seem like you know much about econ/finance so I think it is strange that you are so outspoken about bitcoins.
BTC could still collapse, and it very well may. Even if we put the potential innovative benefits of btc aside though, things like this are more like cults vs religions. A cult is a cult until it has enough followers at which point it becomes a religion.
Cults and religions have a similar scam potential which is what it seems like you are feeling, however at this point I would say btc is reaching or possibly above Scientology levels of belief/followers. In fact the market cap of btc is possibly more than the market cap of Scientology right now. If btc is going to fall apart as a pyramid scheme it will likely be the largest to ever fall.
However btc is more than a pyramid scheme because it does offer some real benefits over the existing financial systems. The online blackmarket does require a currency similar to btc to operate. Right now sending money across borders is difficult and expensive. Right now buying things over the internet basically must be done with credit cards which has a lot of fees attached. Right now there is no real way to quickly send large sums of money to people without similar fees and specific hours of operation. You also have to go to a bank and deal with a lot of bullshit.
Whether btc will be the solution to these problems I am not sure, but it is a very big deal that it already has so many users/followers. That is the hardest part of changing things, getting large scale adoption.
Yeah I hear you pfisch you are definitely one of the more reasonable people I have come across in these arguments. But what I'm saying is this -- I'm certainly not an econ expert it's true but I've analyzed enough of the econ involved in Bitcoin to conclude that it's really not a viable currency and most involved are speculators or black market traders as you point out. And I firmly believe the exchange rates are totally artificial, since BTC are essentially not really transacted the way one would imagine a currency to be used. It makes more sense to say they are "traded". Speculator to speculator or consumer to business straight to 3rd party processor.
It solves a real problem, yes, but not so much so that every Bitcoin should quadruple in value every 6 months, this is a bit ridiculous. After all, one could implement a BTC alternative (Litecoin for example) and achieve the same needs.
So essentially yes I see Bitcoin as a cult of naive investors who think that because of its theoretical underpinnings it will save us all. The truth is, huge stores of it are owned by black market operations and early adopters who had an exponential advantage in the ease of getting these things. Its basically like a free money machine for anyone who had change left in their pocket after spending their first crop of BTC.
If the system were ever to go down via cashout or crash or whatever, these people have as good a shot at grabbing the exit cash as anyone else, plus they can trivially buy a ton of real-world goods now through stores that accept Bitcoin, who themselves essentially send 3rd party processors the bill since presumably the processors are the ones storing Bitcoins while paying out the current exchange rate (or maybe they put them on an exchange soon after). The processors are assuming the risk because they want a foothold in the emerging shadow Wall St landscape. These are people who are putting their blood/sweat/tears into building the infrastructure that is essentially just magnifying the wealth of the founders / online gambling institutions / black market ops.
If instead all the rational people were to abandon the cult & quietly cash out, all that baggage could be left behind. The online casinos could instead foot the bill, and we could begin again with a new more stable cryptocurrency that has more utility as an actual currency. Market volatility adds some lure into the intrigue of the system but it's really just a vehicle for wealth redistribution to those who are prepared to take advantage of a flawed system.
Btw telling me it's gaining traction as a cult is not really endearing me to the ecosystem. I'm just not a big cult-lover. :P
But I guess it wouldn't work because if you sell a lot of bitcoins you couldn't sell all at the same price.
Eg. you want to sell 10k Bitcoins. The price is 750$ and the first 50 Bitcoins you can sell for 750$. Now after that there are not enough limit orders anymore available for that price category. So you would sell a lot of bitcoins for much less than the price was originally when you started selling.
And vice versa if you buy them. So I would doubt that you make a profit (because you can't sell/buy at price x and then afterwards the market price reacts. The market price reacts already while buying/selling in large quantities).
As I see it it's the same principle as if you own a large part of a stock, there you could argue the same.
There are actually common market manipulation trading tricks (will get you busted immediately in the stock market) that people use regularly in Bitcoin.
Read the section in this article titled Enter the tape-painting “Shark Squad”. I've seen a few similar articles that document how simple it is to do market manipulations in Bitcoin that would get you immediately cuffed on Wall St. And it doesn't even take that many parties to pull them off! Because Bitcoin is actually transacted sooooo little.
I can't say for sure though. There are a lot of debates about transactional volume but impossible to tell because some of the big money Bitcoin holders just buy/sell to heighten the perception of its popularity.
yeah but people shouldn't be getting involved with a currency just because it's so scammable.
I commend you for not getting involved. I think Bitcoin speculators are immoral. Someone is going to end up footing the bill and it will ruin many lives.
Hah rich families are usually rich because they spear-headed a manufacturing industry or rose to political power. Yes, their CHILDREN may not deserve the wealth, but they earned it.
Bitcoiners are getting rich for designing a pump-and-dump scam & passing it along. It's called a pyramid scheme. You make a pitch that sounds convincing and then shop it out through "Multi-Level Marketing" strategies.
Why do Bitcoiners believe so much in a currency that allowed the originator to pull so much wealth out of thin air?
Say we estimate conservatively and say the Bitcoin ecosystem is only worth what was put into it. Well, now the founders own like 1/4 of all that money, for doing nothing but coming up with a convincing sounding scheme ("ummm... call it deflationary people will think that sounds intellectual"). A currency is not a currency if it is so distorted that it is radically reorganizing the wealth of those who convert to it.
Maybe one way to look at it is to compare it to owning some land.
Some people are rich because their ancestors claimed a large piece a long long time ago. One could argue that they pulled out a lot of money out of thin air.
They actually did. Much of the western US was "homesteaded" through the federal government. Basically, head out west and settle, plant your flag and you can have that land for free.
yea but that involves work in a sense. You have to tend to this land and develop communities or the land is worthless. I'm sure the value grew over time as the residents were able to make it into a nicer place.
They didn't just buy a few bytes of data & see the value appreciate by 9billion% just for sitting on their fat asses.
And that's the other issue. Land is an ACTUALLY limited resource. We don't know how to pull it out of thin air. The Bitcoin currency is artificially limited just to force a supply/demand situation. People can make other competing currencies just by forking the code.
What about everyone who bought a .com domain early....
Or really anyone who buys a stock early for a company that becomes huge.
I mean, if you buy bitcoins right now you are speculating that it will become a stable currency at some point. It offers a bunch of interesting and disruptive features that cut out a lot of middle men.
eh I hear what you're saying but i just don't believe this one.
.com addresses appreciated in value because they are an actual good -- an address on the web that only 1 person can own. Bitcoin is a currency that isn't serving its purpose yet and whose function can be easily mimicked. All it is is an open source codebase & some infrastructure. If another coin (Litecoin, for example) were to take off, they would just add support for that too no big deal.
Point being, it isn't the sole implementation of this concept. .com addresses are by nature unique.
hah sure there are alternate DNS systems but there's only one that matters... the one recognized by the major ISPs.
I don't want to get into the other thing. There are a ton of things that distinguish gold from BTC. For one, it has an intrinsic value. As in, "worst case scenario I have to sell this gold to a metalworker/scientist/jeweler/whoever who worse with gold".
If Bitcoin doomsday hits who is gonna pay a cent for one more file on their system. Useless bytes of data are not a commodity.
What about old old money? I'm talking about people that have money because their ancestors were royalty of some sort. Can you really say that they earned it? How much of that could be being in the right place at the right time? E.g.
You helped out the king and he granted you a lot
of land. Several generations later, your descendents
are ridiculously wealthy because you got in on the
'ground floor' of what would later become the world
economy we have today.
"What about old old money? I'm talking about people that have money because their ancestors were royalty of some sort."
They would fall under the rubric of what the parent comment said about "rose to political power." The old nobility got that way because they supported the king in military campaigns in exchange for titles, land, and protected agricultural or mercantile monopolies and warrants. (Incidentally, the origin of the word "entitled" dates back to the titling of the nobility by royal authority. A title is, in essence, the exclusive right to something. In many cases, that right was to specific regions or lands. When we say that someone is "entitled to" something, or "has a sense of entitlement," we are figuratively harkening back to an age when an "entitlement" was something very literal.)
For what it's worth, the fluidity of the nobility is vastly underreported in popular conception. Noble families rose, fell, were made, were broken, etc., about as often as in Game of Thrones. Today's "old old money" descends from the old old noble houses who, by some combination of luck and savvy, ended up on the right side of countless civil wars, uprisings, wars of succession, and dynastic transitions.
Did these families "earn" their fortunes? I'd say no more and no less than any of today's political elites. We're kidding ourselves if we believe the political patronage system in the US is all that different from the political patronage system of the Tudor dynasty, or that of Louis XIV. The mechanics of government are different; the rules of the "Game" are entirely unchanged. (Replace "King" with "Presidential Administration.")
Heh I agree with your concept a bit, I was thinking about that myself. But here's the counter -- WHO REALLY WANTS TO RELIVE THE DARK AGES?!!
Great headline:
"Crypto-Currency of the Future Promises a Return to Medieval Economics via Anonymous Self-Proclaimed King"
Even in those systems, people had to WORK to get that $$. We're kindof seeing that now with those setting up the Bitcoin infrastructure, but early adopters are richer than they at this point -- just by trading for a couple magic beans before the masses decided they HAVE TO HAVE THEM!!!
I think the coolest thing would be if cryptocurrency folks set up the Bitcoin ecosystem decided there was a BETTER digital currency, and just utilized that same tech stack with the better product. F--k Bitcoin it was an experiment and it can rot
eXACTLY! ughhhhhhh 100x yes. i'm always given this "risk" argument and I think "what's the risk in investing pocketchange & leaving on your pc.... it's not like you founded a start-up out-of-pocket".
It's just a more ingenious version of Amway, because rather than pushing products around & trying to have to prod people into trying their hand at sales, they are being sold THE IDEA OF MONEY! And if people decide to buy that money, the value of the originator's money increases. And to make them feel as if they are equals he says "Oh well if you want you can work on these hash equations and free money will appear" but as long as it's propelling the greed for this "money" it will never hurt the value of his stash.
Sad stuff. and the greatest beneficiaries are probably the criminal organizations who use it. Half the reason i wanna see it crash is because it will wipe a lot of bank accounts used by gambling organizations etc. who prey on misery to begin with.
The risk is that if the startup/technology (Bitcoin) failed, you just wasted your time/effort in setting up something useless. There must be thousands of these proposals that you will face in your life.
Bitcoin is the risk I knowingly didn't take, because I didn't think it would amount to anything in the future.
> Why do Bitcoiners believe so much in a currency that allowed the originator to pull so much wealth out of thin air?
All markets get created out of thin air. Everything you use now at one point had someone looking at it thinking, "what the hell is that ever going to be good for?"
> Why do Bitcoiners believe so much in a currency that allowed the originator to pull so much wealth out of thin air?
Even if you don't believe in bitcoin, the problem with fiat currencies is that they are insecure.
> Baaaaaw Bitcoiners' wealth are disproportionate to their merit
Just like in fiat currency, in Bitcoin, lots of people who don't "deserve" anything are rich. Deal with it or go back to your imaginary universe that gives economical advantages to people based on "merit". Notice how I'm using quotes around the words that have no objective definition.
> A currency is not a currency if it is so distorted that it is radically reorganizing the wealth of those who convert to it.
Currency is something relatively stable, it's not a trading platform. I spoke about it in this way the other day --
One should not have to consult an exchange rate to figure out how much their currency is worth. They should know what it's worth by how much it costs for a dozen eggs. If that number changes rapidly (dozen eggs costs 1 BTC Monday, 3 on Friday, .5 next month, 100 in the future, .002 after that) well.... you don't have a currency, you have a speculative commodity.
The only reason Bitcoin users don't complain is because they're mostly hoarders/traders & the general trend is up.
"One should not have to consult an exchange rate to figure out how much their currency is worth. They should know what it's worth by how much it costs for a dozen eggs. If that number changes rapidly (dozen eggs costs 1 BTC Monday, 3 on Friday, .5 next month, 100 in the future, .002 after that) well.... you don't have a currency, you have a speculative commodity."
This is just not true for many currencies that have undergone hyper-inflation and hyper-deflation. You are only comparing btc to the most dominant currencies in the world right now, and btc obviously is not one of the most dominant currencies.
Again, you speak of a con of Bitcoin, but I don't see how any other system solves what you complain about.
Please explain to me (or refer me to material explaining) how USD can possibly be stable when used by billions of people. Just because it's been stable from my point of view, doesn't mean it's stable for everyone. If your explanation relies on trusting a single person or organization, you see why I favor Bitcoin.
> The only reason Bitcoin users don't complain is because they're mostly hoarders/traders & the general trend is up.
The only reason fiat users don't complain is because from their perspective it looks like it's working.
USD is more stable because gov/banks/etc. are all staring at it all day, as well as their country's population. Not saying I trust them but I'd rather have a bill backed by the US gov than by Satoshi Nakamoto.
He's the single person YOU rely on -- the one who designed the mining system, currency caps, etc. Ridiculous.
USD is more distributed than Bitcoin just because people are always watching theorizing monitoring USD. Bitcoin is at the mercy of market manipulators and there are no legal protections provided against even basic tricks.
You provided no proof that USD is stable, just a bunch of handwaving.
> He's the single person YOU rely on.
For security, no. The protocol is public. So I assume you mean only by market manipulation. But how so? Is this the same way I rely on Bill Gates not to trade all his money to a foreign currency?
Inflation figures for USD are readily available. That it is more stable when considered against most goods and services than bitcoin is not something about which there is any room for serious dispute.
Falkvinge thinks they will be worth 100k-1000k in the future. If we accept that (which I don't btw) is it so weird that people want to spend 700 today for something that might be worth 100k in a few years?
It's not weird. The problem is that at some point bitcoins must acquire an unambiguous intrinsic value which is not related so much to their possible future value. If they don't, that's the definition of a bubble--prices that are considerably higher than intrinsic value.
Consider tulip mania from the 1600s. Speculation drove up prices of tulip bulbs to the point where the only people buying tulips were other speculators who were willing to pay the high prices because they thought they could sell it for more later on--the exact reasoning you just posted. Speculators were just trading tulips--or worse, tulip futures--amongst themselves. When the time came to sell the tulips to people who wanted them for decoration, it was discovered that none of them actually valued tulips that much, and the bubble popped.
There are arguments for a bitcoin having an intrinsic value of $100k. If bitcoin were ever used for, say, something as large as the real estate market, it would be hard to imagine the price being any lower than that. But bitcoin is extremely far from being used as the dominant currency in any market that large.
I think it's naive because NO investment offers that kind of return. People looked like absolute fools for trusting Madoff to give 5 or 10% or whatever it was, now theyre expecting 1000% just because this is "computers.... the future!!!"
Are you talking about some new attack? The "51% attack" is a security property that fell out from the design of bitcoin: A cooperating group of people needs "51%" of the computing power to break bitcoin.
No, I'm saying that when people realised that there is a hypothetical attack that undermines bitcoin, if you have 51% of the power, that realisation didn't kill bitcoin.
IF bitcoin will materialize as common internet currency, these guys/girls will have some jolly good time. Until this happens this list is is nothing but a high-score in a web based game, for there is no way to exchange your BTC into real currency.
Of course, anyone who has invested in BTC is highly interested to push the hype button and spread the word of BTC as universal payment system. This is the only way to bring more hard currency into the BTC cashflow.
Cashing out $85 million of pretty much any sale (shares, bonds, forex, commodities) is trivial, you simply do it if you have the goods.
The whole idea of Bitcoin transactions requiring special efforts to cash out is a sign of weak liquidity/weak infrastructure. If some bitcoin-exchange-house is limited to cashing out $10k/day, then how can you practically distinguish it from a Ponzi scheme that claims to have money but actually doesn't?
How about just 1 million? It seems most responses above are "it can be arranged", which wouldn't be acceptable to me if I had millions in bitcoin I wanted to cash out.
A million is easy. Put up your ask for 1400-1500 BTC and wait for someone to buy it. Maybe spread it out over a small range so it doesn't look intimidating, but at that size it doesn't really matter. Probably happen in a few hours. Again, several of these transactions happen every day.
Have the money wired to your bank. If you're selling on bitstamp, even that step is easy.
If you’re looking to cash out, SecondMarket is currently trading sizeable blocks of bitcoin. Please feel free to contact us at xbttrading@secondmarket.com .
No. The market just isn't that deep. I really doubt there are people looking to spend 10 million (or even 1 million) dollars on bitcoin in any normal time frame.
Most of the bitcoin super-rich are the early adopters, who mined hundreds of bitcoins on their personal PCs while that was still possible.
One million dollars is less than 1400 BTC on gox at the moment. There are several transactions a day in this range.
And contrary to the popular folklore, you can get USD out of gox, it just costs you a fair amount to do so. If you're dealing in million dollar transactions, it can be arranged.
To put it in perspective, Bitcoincharts.com [1] reports that the market trade volume is around 200,000 BTC (I believe this to be a 24hr stat). BTC-China is currently the largest exchange and their 24-hr volume is 67,500 BTC. So yeah, several thousand BTC being traded at once could be a significant disturbance in the force.
I wonder if it would be possible to come up with some kind of market indicator to detect when one of major holding addresses starts to sell off on one of the exchanges. This may be possible if the escrow/intermediary accounts are known. If one of these 'major holders' really felt like being evil, they could test out some of the BTC to USD processors to see how well their setup to handle large transactions and nuke them with 1000BTC conversions. Coinbase.... BOOM!... BTCQuick.... BOOM!
It would be trivial to write a script to watch the top however many addresses for movement. You wouldn't know if the coins were headed for an exchange or not, though.
No you need to make a private sale, we're talking back alley or across a table somewhere. Getting money out of the US based exchange Mt.Gox is impossible in the range you are talking about. Currently they are cashing out everyone at $10,000/day, that isn't per person that's combined.
Or you can move your Bitcoins to another exchange (which have a much lower valuation) and which are all foreign. Then cash out there. Then repatriate your USD. Which has tax implications. So in an amount as big as $10M you're going to lose a large amount of "money."
You also have to pray that somewhere along the way your anonymous untraceable Bitcoins aren't stolen.
Actually, it wouldn't be that hard over the course of a few weeks or months. Yes, the price of BTC would drop to some degree, but not necessarily considerably. Over the last 30 days, approximately $720 million worth of bitcoins have been traded on MtGox and btc-e.
Once you complete the transaction, there are also tax implications. An attorney wrote up a description with some broad strokes: http://www.bitcointax.info/
Useful if you're a US citizen or resident and have bitcoins you want to sell.
You would have to make a deal one-on-one with a buyer. The current liquidity on the exchanges would mean that you tank the price and end up with way fewer dollars. And you would start a price panic.
It's likely the Winklevoss brothers have all their coins spread over many addresses. Their wallet will show 100,000+ coins but you can't tell because they are spread among many addresses inside the single wallet file. If they use a brain wallet seed they can create unlimited deterministic addresses but only have to remember one key, and you won't see large accumulations of coins.
The reason is privacy. It's not going to spread the loss of a hack because if the hacker gets the wallet they own all the addresses.
One of the core developers theorized that memory corruption at the exact time you sign a transaction could lock away all the bitcoins in a single address. However this has never been observed. (remember every transaction spends the entire balance of an address and returns your coins to the same/or change address, if that change address has 1 bit wrong the entire balance would be lost)
Suggest a better way to distribute new asset "fairly". Facebook shares are also distributed unfairly. And gold. And dollars. Also, something that looks fair for you, wouldn't look fair for another person.
What's important to me is that money is hard. If you have it, it can't be printed out of value. It should not be very costly or risky to store or transfer (like gold or USD). I want to be sure that even the richest guys can't simply extract money from me. That they have to earn it by doing work. Or earn service from others by paying them, not forcing them. Bitcoin allows us to get to that kind of protection closer than ever.
Consider this: gold was always as hard to protect as to confiscate it. It's symmetrical. Therefore, most powerful and brutal were accumulating gold over time. Gold is now owned massively by largest governments and banks. Regular people can only own as much gold as they can hide in their pockets. Extra gold is too easy to take (http://en.wikipedia.org/wiki/Executive_Order_6102). Bitcoin is much cheaper and easier to store and transfer than to extract it. It's asymmetrical. Now big guys with guns would have to work more and steal less to get some money, then before. Stuff that was stolen or destroyed will never come back to you, but at least, over time, distribution of wealth would match more closely actual merits of market participants, than amount of gunpowder that they have.
And many people can be apart of one address, although that is more risky. One of the top addresses is the Just-Dice investors address, which has between 50,000 and 60,000 bitcoin.
Back in early 2011 I ran a BTC miner for awhile on a spare system and generated around 18 BTC. I bartered them later in 2011 for a pair of movie tickets to take my wife out to see Moneyball (ironically).
I know. I disagree with the practice, especially when I look through the history of the account and see no flagrantly offensive remarks. HN mods might think this site is a temple, but it's disrespectful to waste someone's time and mislead their expectations of feedback for months at a time.
My assumption is that because they have the username 'unethical_ban' they probably understand that they broke the spirit of the Hellban, but did so intentionally.
This account is not intended to be a novelty account; you can see I post relevant discussion most of the time. I am, however, someone who was hellbanned for quite some time for an admittedly less-than-stellar post. One facetious remark got a 900+ karma, 3-year old account banned.
I'm sure anyone using the term hellbanned knows what it means. Sometimes automatic hell banning makes mistakes or is heavy handed (not sure what the algorithms are); some selective civil disobedience corrects the issue and lets the user at least ask admins to find out why.
Can we link IP addresses and hence approximate locations to these wallets using announced transactions on the network? That might be an interesting visual. Maybe not because I doubt anybody was logging bitcoin network traffic in the early days. But doing that even starting today might turn out to be useful. And there's little doubt NSA and friends are likely already doing this.
No IP address is saved in the block-chain. You would need to trust the source of this IP listing service, and still you wouldn't be able to actually prove people's real IP address if they were using systems like TOR to send money.
afaik 90+% (100%?) of all the blocks mined by satoshi have never been touched. Satoshi's wealth would be in thousands of separate 50BTC wallets, not 1 big one.
Can't be bothered to find the source atm but someone did some analysis on the mined blocks in 2009/2010 and found the likely blocks mined by the same person who mined the first block, all unspent.
Either he didn't want to reveal its identity, because he (they) knew well that the history will remain for a long time, or he simply lost access to those bitcoins.
Thousands of separate addresses, most of those coins still sit in their mined blocks. However it is likely Satoshi has all the addresses in one single wallet so that he could move them all at once if he wanted to. Satoshi's estimated wealth is between 500,000 and 1,000,000 coins.
Did Bitcoin 0.1 have a mine-every-block-to-a-new-address feature? It's also possible that he mined to ephemeral addresses and didn't save the private keys which would make all that BTC lost.
Yeah, right now Satoshi is worth at least 100k btc up to 1,000k btc. Some analyses has found that perhaps 2,500k btc are controlled by the same group but that was highly speculative.
I would think Satoshi is getting close to becoming the first Bitcoin billionaire.
Interesting as BitCoin proponents complain about Bankers greed and how 1% own a huge percentage of the wealth. It seems that a really small percentage of addresses owns most of the BitCoin wealth. And these addresses might be owned by even less people.
Compare the distribution of global wealth, or American wealth. And note that we can expect the distribution to gradually get more equal (as indeed it has been all the time) as early adopters slowly sell out and diversify their holdings.
It should be expected that any changes/disturbances in the financial system (including large scale adoption of Bitcoin) will involve some losses for the common person, while a few people will find a way to make a huge profit from exploiting everyone else in this change process.
Scrolling down, there are addresses with an even 10000 bitcoins. If these all belong to the same person (trying to mitigate risk by spreading across wallets?) then it adds up to about 186 million...
The most surprising thing to me is the number of those addresses that haven't had a transaction in several years now... how many of those people lost their "wallet" so to speak?
I don't see btc as being able to retain its hundreds of dollars in exchange currency value. Imagine you have 1 mil usd worth of btc, and then imagine trying to dump it all on the open market. You would probably find a widening gap in the bid-ask as your position is liquidated. In other words, there isn't likely enough buyers.
Someone is probably manipulating the supply and demand to serve their own purposes. You might as well day trade something more liquid.
What kind of repercussion will this have in the future, say, when Bitcoin will be more widely utilized? It seems to me that it might only cause an issue to Bitcoin's market during these initial stages, where a rich bitcoin owner could fluster the market by selling large amounts. But in the long run, there will always be the rich and the poor. Or is there something I'm missing?
And better yet, everyone could just switch to a client that works exactly like the clients we use to day except that it allows a new wallet I just created containing 100,000 bitcoins. This one is better because I get rich.
And to make it work the only thing I need to do is convince everyone to use it. It's kind of like that guy who convinced everyone to allow little green slips of paper to be traded for goods and services -- ALL money has value only because society consents to value it, and society could change it's mind. We've done so before -- consider when the Euro was created and how after a transition period the currencies it replaced became worthless (except as collector's items).
The hard part is convincing everyone to use YOUR plan. The deftness with which Bitcoin has navigated that social dilemma is one of the most impressive things about it. Somehow we have all come to agree that certain bit patterns and secret keys are worth valuable goods and services.
That is a very interesting idea, it makes the fungibility of BTC seem highly questionable, if you can look at its history forever and do an arbitrary 'blacklist'.
That would seriously diminish confidence in bitcoin, though it might encourage spending of bitcoins. I suspect the latter will not be enough to overcome the former. The end result would likely be bogus transactions between addresses merely to keep the money "alive". Adding 0 value and potentially negative value as now a set of useless transactions will sit in the ever growing blockchain.
Similarly, during the transition of clients accepting to clients not accepting those coins, what happens if there's a transaction from one of them? What if it's only partial, they spent 2k but left 2k, they're active but now out 2k BTC that they can't spend?
This is sort of like discussing blacklisting "stolen" BTC. Suppose I figure out 100 brainwallets and steal 1000 BTC. Before I get added to the blacklist, I transfer 1 BTC to each of 1000 addresses. Do you blacklist the whole chain of addresses going back? Do you only blacklist that one amount (essentially reducing the value of those addresses by 1 BTC each)? What if one of those addresses is yours and I'm just tainting every address I can find. You'll have 1BTC that you can't spend, and you don't know to whom it belongs. Which of the original 100 addresses do you send it back to if that's the intent of the system? Do you send it back to a known hacked address? Does the former owner have a mechanism to announce a valid new address for kindhearted souls to return their bitcoins to?
Interesting that many of them were last used within a few seconds or minutes of each other. Indicates to me that one person or party is controlling quite a few big wallets.
Probably holding accounts/cold storage for a single group or a small number of groups using a similar division plan, say an exchange. I bet the idea is keep them in separate wallets to ensure that one compromise doesn't lose their whole investment.
Who are these people? And if any of them are out there reading this thread -- reach out to me and let me know if want to invest in something that will help adoption of Bitcoin, which will result in its value continuing to go up...
No the entire history of bitcoin transactions is public that's the only way the whole thing works because that allows anyone to validate that a given account has enough coin to settle a given transaction.
You can see every single address on the blockchain, just not peoples wallets (Because the wallet contains address but most of the time no obvious link between those addresses can be made).
You can see these addresses and speculate. Also some members of the community keep track of famous Bitcoin users that are known to have accumulated over 100,000 coins.
The original Bitcoin "Rich List" predates that paper by years.
Sadly that paper is pretty poor. It's adequate for informing someone bitcoin isn't anonymous though— but the bitcoin.org website also does that without being littered with basic misunderstandings of how Bitcoin works.
Look at this address:
http://bitcoinrichlist.com/address/198aMn6ZYAczwrE5NvNTUMyJ5...
The last time this address was touched was 2009, and has an even 8,000 coins (back in the day, this only amounted to 320 mined blocks. You could do that in what?... a few hours/half days?[1]) The owner probably ran his system for a few hours, collected 8000 coins, thought it was a ridiculous concept and deleted everything from his system.
[1]: https://blockchain.info/charts/total-bitcoins?timespan=all&s...