A stable coin fixed to USD is simply fiat credits held by a custodial account which is a very old business practice. The additional revenue will come from fees and services people pay to facebook when they buy these credits or "gift cards". Many services like youtube already have tipping with fiat doing this so there is nothing unique except them using the term "crytocurrency" as a marketing gimmick.
Proof of Stake is not new or very interesting, and exists as a form with fiat currency already.Proof of stake has many more attack vectors(nothing at stake attacks, long range attacks, short range attacks , stake grinding attacks) than proof of work and ultimately is either less efficient or less secure.
There doesn't seem to be any foreseeable solutions to making proof of stake secure either besides obscuring the flaws. Bitcoin is deliberately made inefficient with proof of work as using provable work that is external to the blockchain is the only means to create real costs where the game theory supports a model where it is both profitable to secure BTC and extremely costly to attack it.
With PoW (proof of work) you would need to be a tremendous amount of effort in order to censor 1-2 blocks with building many asic mining farms, and than burning the electricity continuously in order to attack bitcoin.
https://www.youtube.com/watch?v=ncPyMUfNyVM
https://www.youtube.com/watch?v=KUd8ZGgm6Qo
With Proof of stake all I need to do is be an early adopter(s) , hack/kidnap an early adopter(s) , or convince many users to join a interest bearing bank account by staking their coins with my company(done many times before) to attack the network. Since Proof of work involves outside resources one can always objectively see and measure the hashrate and sources in realtime and one can cutoff such an attack because it involves outside resources.
There are many different variations of proof of stake but the simplest way to understand this is by looking at those blockchain's as a democratic consensus mechanism where everyone's vote is weighted based upon how many coins or stake they control. Their staked coins than have an opportunity to create a block without proof of work and a dev controlling 51% of the coins gets to virtually mint ~51% on average of all the blocks . This presents another concern as the coins typically need to be in "hot wallets" to do so instead of cold storage leading to a more insecure environment.
Since most PoS coins have massive premines where only a small number of devs control most of the coins this also presents another concern as those devs can be targeted by states , hackers, or attackers or as we often see with altcoin devs they pump and dump a project and than move onto a competing project to repeat this cycle over and over again thus have an incentive to attack their old project.
With Proof of work , seizing the coins or stake of any individual or group of people doesn't effect the process of mining or securing the network directly at all . They can only try and spook the market by dumping coins at a discount while individuals like myself will happily buy up all the discounted coins.
PoS is being sought because it is a clever marketing ploy to attract environmentalists who are concerned about the electricity used in PoW mining. They may have valid concerns that I also share but they fail to see all the external costs in PoS.
There is no protection against a 51% attack that wipes the entire ledger.
Technically there is. You can set checkpoints to avoid massive reorgs, and with chains like Bitcoin there becomes insurmountable limitations for the amount of energy you would need to spend in a race condition to reorg the chain with a sufficient depth. Thus there are limitations in physics one must also consider as well. The problem with checkpoints is this introduces other attack vectors and makes the chain much more centralized so they no longer exist in Bitcoin, but are found in altcoins with much less security
That's the real problem, that an actor could theoretically wipe the whole chain out, start-to-finish.
What you need to clarify is the fact that the old ledger or chain will still exist and users would simply need to hard fork to ignore the attack after it occurs removing the attack or any theft.
Bitcoin is highly regulated, the distinction is that it is more fungible than digital fiat for regulatory arbitrage. Thus regulation happens at the on ramps and off ramps , and you can ignore regulation elsewhere.
Bitmain hash rate has gone considerably in china due to pressure from outside ASIC manufactures. They no longer have the most efficient ASICs as several companies have better ASICs. Samsung is now making some of the best chips for other companies. The PBoC also is putting pressure of Chinese Hydro dam operators to no longer give away free excess hydro energy to the ASIC farms located in china(a big reason why so much mining was being done there) thus we are seeing mining farms migrate to other areas like Canada where there is cheep electricity from renewable sources(mainly hydro). Most mining is still done in China but its now down to around 55-60% - https://www.blockchain.com/en/...
Just like with US dollars all currency with sufficient velocity are "tainted". AML/KYC exchanges either have to start banning all their clients(Not going to happen as big investors already bought into these companies) or change their policies to only restrict BTC from addresses that are directly tainted.
Bitcoin costs less than it costs to mine it - but only if your paying for the electricity.
The report is deeply flawed. They don't take into account the efficiencies of scale with ASIC manufacturing, the sunk costs from green energy, and the fixed contracts for extremely cheap electricity.
Hell, some websites will run a miner on your computer while your browsing their web page.
This has nothing to do with Bitcoin as you can not efficiently mine Bitcoin with GPUs for the last 6.5 years.
The biggest problem with bitcoin is that there is no consideration as to the cost to the environment..
Since some lightning wallets are custodial the amount of users exceed 10k using lightning today.
Due to the way lightning works, a user must stay connected to the network (or risk losing their coins),
This is completely false for many reasons. First of all , this only might apply to merchants receiving lightning transactions if fraud is attempted(same problem with credit cards BTW) where they need to have their node check online for a second at least once a 24 hour period to prevent fraud. If you are spending your lightning on a wallet like eclair or many others you have no fear of this occurring even if you leave your cellphone off for months. Secondly, to prevent the mild inconvenience of having your server/computer work at least 1 second every 24 hours watchtowers are being created.
so it seems to be pretty much a dead technology.
There are thousands of stores accepting lightning right now and many of us have been using lightning for purchasing goods and services all year long so it is alive and growing every day.
Taproot, Dandelion, and lightning all make Bitcoin far more fungible and private. Wallets like https://wasabiwallet.io/ automatically use chaumian coinjoin with an anonymity set of 100 for every Bitcoin transaction to make privacy much simpler than traditional coinjoin. There is even some work on making a mimblewimble sidechain that lightning transactions can automatically perform cross atomic swaps to as well.
Hardware wallets like ledger and trezor are great solutions for beginners . If you know what you are doing you can create a paper wallet or cold storage electrum wallet for more questions you can ask in r/BitcoinBeginners in reddit
People keeping assets on an exchange usually are daytraders who store some in fiat and some in bitcoins. When an exchange is insolvent they allow you to withdraw your bitcoins but give some excuse that they are having banking problems withdrawing fiat to place the blame externally far in advance of restricting btc withdrawals. This forces those wanting to withdraw to buy bitcoin and withdraw which causes the price of bitcoin to dramatically shoot up in value until the exchange completely runs out of bitcoins. This is more of a concern with smaller exchanges that are less regulated but in general it is wise to avoid daytrading or storing any bitcoins on exchanges altogether. Gemini and coinbase/gdax are FDIC insured per account so storing up to 250k USD of fiat is relatively safe to buy bitcoins.
You appear to be unfamiliar with bitcoin and not one who actually uses it. You can buy btc for 0 fee, withdraw it to a personal wallet for 0 fee, and than transact for 5-10 pennies usd per transaction if you use the right exchange and wallet. Fees will also dramatically drop sub penny in 2018 with lightning network wallets which we are testing right now.
You can buy for free on gdax with a limit order , withdraw through gdax for free, and than use a segwit wallet and pay transaction fees of 5-10 cents to move the btc thereafter.
Bitcoin is just the same as any other asset or currency with price discovery. There are fiat and commodity trading pairs and the market determines price based upon supply and demand
I pay 1-10 cents a transaction with bitcoin all the time. Just get a segwit wallet and manually set the fees. If you want a quick confirmation you may have to pay more like 50 pennies USD .
Much of the appreciation is linked to speculation, but this speculation is pricing in the future utility especially in regulatory arbitrage. Think of bitcoin as a blackmarket ETF. Does your investment portfolio include investing in the blackmarket and if not why is it imbalanced? Bitcoin is an uncorrelated asset class and this is interesting to many investors who want a safer and more balanced portfolio.
You are around 5 years behind on the bitcoin technology. I suggest you investigate into tumblebit, LN payment channels, Confidential Transactions and MimbleWimble if you want to see how private and fungible bitcoin can get
Just like the war on drugs it will be impossible for states to censor bitcoin. Any discussion of making bitcoin illegal will only encourage us to buy more like we all did with AR15s and bullets whenever a anti-gun rhetoric or gun control fanatics open their mouths.
Yes, Bitcoin is primarily purpose is for regulatory arbitrage and thus exists as a hedge against anarchism where states indirectly subsidize its value. The most effective way for states to attack bitcoin is to legalize everything and eliminate all taxes which I don't think is very realistic to ever occur thus feeding into the value proposition of bitcoin. There is a circular economy of the under-served who need bitcoin to survive and these users create an inelastic demand on a disinflationary supply of bitcoin driving up the price. States can no more stop copyright infringement or drug use than they can stop bitcoin.
You have been able to short bitcoin for the last 5 years. Many exchanges allow you to open up shorts.
Here is a regulated exchange in the US that allows you to short Bitcoin - https://support.kraken.com/hc/...
Slashdot Mirror
A stable coin fixed to USD is simply fiat credits held by a custodial account which is a very old business practice. The additional revenue will come from fees and services people pay to facebook when they buy these credits or "gift cards". Many services like youtube already have tipping with fiat doing this so there is nothing unique except them using the term "crytocurrency" as a marketing gimmick.
Proof of Stake is not new or very interesting, and exists as a form with fiat currency already.Proof of stake has many more attack vectors(nothing at stake attacks, long range attacks, short range attacks , stake grinding attacks) than proof of work and ultimately is either less efficient or less secure.
Further reading -
https://medium.com/@tuurdemeester/critique-of-buterins-a-proof-of-stake-design-philosophy-49fc9ebb36c6
https://download.wpsoftware.net/bitcoin/pos.pdf
https://en.bitcoin.it/wiki/Proof_of_Stake
http://www.truthcoin.info/blog/pow-cheapest/
https://medium.com/@hugonguyen/work-is-timeless-stake-is-not-554c4450ce18
There doesn't seem to be any foreseeable solutions to making proof of stake secure either besides obscuring the flaws. Bitcoin is deliberately made inefficient with proof of work as using provable work that is external to the blockchain is the only means to create real costs where the game theory supports a model where it is both profitable to secure BTC and extremely costly to attack it.
With PoW (proof of work) you would need to be a tremendous amount of effort in order to censor 1-2 blocks with building many asic mining farms, and than burning the electricity continuously in order to attack bitcoin.
https://www.youtube.com/watch?v=ncPyMUfNyVM
https://www.youtube.com/watch?v=KUd8ZGgm6Qo
With Proof of stake all I need to do is be an early adopter(s) , hack/kidnap an early adopter(s) , or convince many users to join a interest bearing bank account by staking their coins with my company(done many times before) to attack the network. Since Proof of work involves outside resources one can always objectively see and measure the hashrate and sources in realtime and one can cutoff such an attack because it involves outside resources.
There are many different variations of proof of stake but the simplest way to understand this is by looking at those blockchain's as a democratic consensus mechanism where everyone's vote is weighted based upon how many coins or stake they control. Their staked coins than have an opportunity to create a block without proof of work and a dev controlling 51% of the coins gets to virtually mint ~51% on average of all the blocks . This presents another concern as the coins typically need to be in "hot wallets" to do so instead of cold storage leading to a more insecure environment.
Since most PoS coins have massive premines where only a small number of devs control most of the coins this also presents another concern as those devs can be targeted by states , hackers, or attackers or as we often see with altcoin devs they pump and dump a project and than move onto a competing project to repeat this cycle over and over again thus have an incentive to attack their old project.
With Proof of work , seizing the coins or stake of any individual or group of people doesn't effect the process of mining or securing the network directly at all . They can only try and spook the market by dumping coins at a discount while individuals like myself will happily buy up all the discounted coins.
PoS is being sought because it is a clever marketing ploy to attract environmentalists who are concerned about the electricity used in PoW mining. They may have valid concerns that I also share but they fail to see all the external costs in PoS.
http://www.truthcoin.info/blog/pos-still-pointless/
It is akin to not adding up all the inefficiencies in coming to a consensus in a democratic presidential election.
There is no protection against a 51% attack that wipes the entire ledger.
Technically there is. You can set checkpoints to avoid massive reorgs, and with chains like Bitcoin there becomes insurmountable limitations for the amount of energy you would need to spend in a race condition to reorg the chain with a sufficient depth. Thus there are limitations in physics one must also consider as well. The problem with checkpoints is this introduces other attack vectors and makes the chain much more centralized so they no longer exist in Bitcoin, but are found in altcoins with much less security
That's the real problem, that an actor could theoretically wipe the whole chain out, start-to-finish.
What you need to clarify is the fact that the old ledger or chain will still exist and users would simply need to hard fork to ignore the attack after it occurs removing the attack or any theft.
Bitcoin is highly regulated, the distinction is that it is more fungible than digital fiat for regulatory arbitrage. Thus regulation happens at the on ramps and off ramps , and you can ignore regulation elsewhere.
Bitmain hash rate has gone considerably in china due to pressure from outside ASIC manufactures. They no longer have the most efficient ASICs as several companies have better ASICs. Samsung is now making some of the best chips for other companies. The PBoC also is putting pressure of Chinese Hydro dam operators to no longer give away free excess hydro energy to the ASIC farms located in china(a big reason why so much mining was being done there) thus we are seeing mining farms migrate to other areas like Canada where there is cheep electricity from renewable sources(mainly hydro). Most mining is still done in China but its now down to around 55-60% - https://www.blockchain.com/en/...
Here are other payment processors that provide lightning to all their clients bringing the numbers much higher-
https://strike.acinq.co/
https://opennode.co/
https://globee.com/
https://btcpayjungle.com/
Also all merchants that use self hosted BTCpay software or casanodes -
Here are some directories (incomplete):
http://lightningnetworkstores....
https://lightninglist.co/
I have personally bought many things with lightning
Just like with US dollars all currency with sufficient velocity are "tainted". AML/KYC exchanges either have to start banning all their clients(Not going to happen as big investors already bought into these companies) or change their policies to only restrict BTC from addresses that are directly tainted.
Bitcoin costs less than it costs to mine it - but only if your paying for the electricity.
The report is deeply flawed. They don't take into account the efficiencies of scale with ASIC manufacturing, the sunk costs from green energy, and the fixed contracts for extremely cheap electricity.
Hell, some websites will run a miner on your computer while your browsing their web page.
This has nothing to do with Bitcoin as you can not efficiently mine Bitcoin with GPUs for the last 6.5 years .
The biggest problem with bitcoin is that there is no consideration as to the cost to the environment..
Proof of work is the most efficient means to come to secure consensus and thus it is far better for the environment than Proof of Stake or fiat currency- http://www.truthcoin.info/blog... and https://www.youtube.com/watch?... .
https://1ml.com/
6,207 nodes
24,932 channels
Since some lightning wallets are custodial the amount of users exceed 10k using lightning today.
Due to the way lightning works, a user must stay connected to the network (or risk losing their coins),
This is completely false for many reasons. First of all , this only might apply to merchants receiving lightning transactions if fraud is attempted(same problem with credit cards BTW) where they need to have their node check online for a second at least once a 24 hour period to prevent fraud. If you are spending your lightning on a wallet like eclair or many others you have no fear of this occurring even if you leave your cellphone off for months. Secondly, to prevent the mild inconvenience of having your server/computer work at least 1 second every 24 hours watchtowers are being created.
so it seems to be pretty much a dead technology.
There are thousands of stores accepting lightning right now and many of us have been using lightning for purchasing goods and services all year long so it is alive and growing every day.
Taproot, Dandelion, and lightning all make Bitcoin far more fungible and private. Wallets like https://wasabiwallet.io/ automatically use chaumian coinjoin with an anonymity set of 100 for every Bitcoin transaction to make privacy much simpler than traditional coinjoin. There is even some work on making a mimblewimble sidechain that lightning transactions can automatically perform cross atomic swaps to as well.
Hardware wallets like ledger and trezor are great solutions for beginners . If you know what you are doing you can create a paper wallet or cold storage electrum wallet for more questions you can ask in r/BitcoinBeginners in reddit
Switch to a segwit wallet with manual fees/fee bumping. My tx fees are pennies
People keeping assets on an exchange usually are daytraders who store some in fiat and some in bitcoins. When an exchange is insolvent they allow you to withdraw your bitcoins but give some excuse that they are having banking problems withdrawing fiat to place the blame externally far in advance of restricting btc withdrawals. This forces those wanting to withdraw to buy bitcoin and withdraw which causes the price of bitcoin to dramatically shoot up in value until the exchange completely runs out of bitcoins. This is more of a concern with smaller exchanges that are less regulated but in general it is wise to avoid daytrading or storing any bitcoins on exchanges altogether. Gemini and coinbase/gdax are FDIC insured per account so storing up to 250k USD of fiat is relatively safe to buy bitcoins.
You appear to be unfamiliar with bitcoin and not one who actually uses it. You can buy btc for 0 fee, withdraw it to a personal wallet for 0 fee, and than transact for 5-10 pennies usd per transaction if you use the right exchange and wallet. Fees will also dramatically drop sub penny in 2018 with lightning network wallets which we are testing right now.
You can buy for free on gdax with a limit order , withdraw through gdax for free, and than use a segwit wallet and pay transaction fees of 5-10 cents to move the btc thereafter.
Bitcoin is just the same as any other asset or currency with price discovery. There are fiat and commodity trading pairs and the market determines price based upon supply and demand
I pay 1-10 cents a transaction with bitcoin all the time. Just get a segwit wallet and manually set the fees. If you want a quick confirmation you may have to pay more like 50 pennies USD .
Never store your bitcoins in web wallets or exchanges.
Much of the appreciation is linked to speculation, but this speculation is pricing in the future utility especially in regulatory arbitrage. Think of bitcoin as a blackmarket ETF. Does your investment portfolio include investing in the blackmarket and if not why is it imbalanced? Bitcoin is an uncorrelated asset class and this is interesting to many investors who want a safer and more balanced portfolio.
Chinese love bitcoin because many of them love gambling and day trading , but yes some of it is capital flight as well.
You are around 5 years behind on the bitcoin technology. I suggest you investigate into tumblebit, LN payment channels, Confidential Transactions and MimbleWimble if you want to see how private and fungible bitcoin can get
Just like the war on drugs it will be impossible for states to censor bitcoin. Any discussion of making bitcoin illegal will only encourage us to buy more like we all did with AR15s and bullets whenever a anti-gun rhetoric or gun control fanatics open their mouths.
How many appreciating bubbles does bitcoin have to go through before bitcoin stops being a just a "bubble"
Yes, Bitcoin is primarily purpose is for regulatory arbitrage and thus exists as a hedge against anarchism where states indirectly subsidize its value. The most effective way for states to attack bitcoin is to legalize everything and eliminate all taxes which I don't think is very realistic to ever occur thus feeding into the value proposition of bitcoin. There is a circular economy of the under-served who need bitcoin to survive and these users create an inelastic demand on a disinflationary supply of bitcoin driving up the price. States can no more stop copyright infringement or drug use than they can stop bitcoin.
You have been able to short bitcoin for the last 5 years. Many exchanges allow you to open up shorts. Here is a regulated exchange in the US that allows you to short Bitcoin - https://support.kraken.com/hc/...