Assuming that NK has channeled most of its BTC stash through a small number of wallets, and that most of them may be identified by NK's spending patterns, I think this is a good case for implementing "poisoned wallets" to render all BTC (or partial BTC) that left a verboten wallet after a given time stamp.
There is no way this will happen . We may not want bitcoin to be used by N Korea but adding blacklists, taint , and reducing fungibility/privacy is unacceptable. Fungibility is more sacrosanct than the 21 million limit in bitcoin and we have already made great changes with privacy that are starting to be used now to make any sort of chain analysis impossible.
but when they get created out of nothing via activities that don't have any semblance of value or value control
The minting of bitcoin is controlled by the destruction of registered value by means of burning energy to create fungible value . This is inherently an inefficient process by design that states are highly subsidizing indirectly through laws and regulations.
.I could never bring myself to even invest a dollar.
Unless you are gambling on the forex market with large amounts of fiat, you shouldn't invest in fiat currencies because they constantly lose value due to inflation. Bitcoin on the other hand is disinflationary. Therefore, scarce and likely to keep going up in value , whether more people invest or not.
.To say it seems shady is probably a gross understatement.
Bitcoins raison d'être is for regulatory arbitrage and assisting the underserved. Sure you can use it for white market use cases but that isn't the primary value proposition. Just like dollars, sometimes this involves breaking laws that are unethical outlawed (war on gambling, prostitution, and drugs), sometimes it involves skirting regulations that are unethical (banking embargo against wikileaks, asset forfeiture, operation chokepoint) , other times it involves skirting capital control from countries that have destroyed their currency due to corruption and mismanagement, and other times it involves unethical illegal transactions(ransomeware). Most crime is done with the US dollar , and while bitcoin is beginning to eat some of the dollars marketshare with the blackmarket it has a long way to go, especially with regards to arms trading and terrorism which is almost 100% fiat currency based.
Aren't bitcoins easily trackable? They are only anonymous if you mine them yourself or buy them from someone that mined them themselves.
Some new changes already in use as we speak add much higher privacy to bitcoin. Lightning network payment channels with onion routing as a default with no recorded tx history on the blockchain, confidential transactions, mimblewimble, cross atomic swaps , all make chain analysis obsolete.
If North Korea is building up a bitcoin stash, then maybe there would be some way for the NSA to cripple the bitcoin currency and wipe out North Korea's savings..
Best of luck, bitcoin thrives in hostile byzantine environments and will only grow stronger with attacks. The war on drugs is an easier task to accomplish than stopping bitcoin. Whether nation states understand this or not , they heavily subsidize the value of bitcoin with their laws and regulations. Bitcoins primary raison d'être is for regulatory arbitrage. Thus the best way to undermine bitcoin would be to start legalizing everything and removing all regulations which indirectly subsidize the value of bitcoin.
Either they could find some vulnerability in the blockchain protocols or, through hacking, infiltrate and damage (okay steal) enough digital wallets as to undermine people's confidence in the currency..
They have to compete with all other hackers and nation states who are trying to collect upon a multibillion dollar bug bounty. Any successful attacks may temporarily drop confidence in bitcoin , sure,but there are enough of us bootstrapped to see the project through regardless the risks involved.
If people can't rely on it, or if it's too easily stolen then that trust goes out the window and the value of the bitcoins will crash.
Theft , asset forfeiture , hyperinflation , bail ins , bail outs , ect , happen all the time with fiat. Bitcoin just has to do moderately better than any competing currency in any aspect that makes currency valuable(scarcity, fungibility, ect...) to retain value and be used. Since bitcoin is worldwide, all it takes is one country to monetary flaws to see an influx of new bitcoin investors as an exit to their countries problems. We are seeing this already in Argentina and Venezuela.
Would a working quantum computer be able to do bitcoin (or other blockchain algorithms) calculations at speeds far greater than conventional or even specialized CPUs?
Right now, no . In the future , possibly weaken bitcoins security assumptions, but this would undermine the whole financial system as well. Bitcoin also has some easy solutions if this occurs = https://en.bitcoin.it/wiki/Qua...
(It would be ironic if so; they'd be going from "hard" currencies to something that is completely abstract).
Hmmm... fiat currencies and traditional finance is far from "hard" and really abstract.
But wait till the governments put their nose into it, and require all wallet holders to be IDd. Then ALL the transactions you will ever have done in your life can be tied to you.
This is unenforceable. Bitcoin users can have billions of "accounts" and most wallets change the address (account) with each transaction for privacy. Some new changes already in use as we speak add much higher privacy to bitcoin. Lightning network payment channels with onion routing default with no recorded tx history on the blockchain, confidential transactions, mimblewimble, cross atomic swaps , all make chain analysis obsolete.
This happens all the time, and many merchants will offer discounts when you buy goods or services in bitcoin because bitcoin is liquid, eliminated merchant processing fees, eliminates charge back risk.
ICO = illegal security and are generally scams = https://www.sec.gov/news/press...
You get no stake and their is a strong incentive for the company to fail even if it has the best of intentions
Can you give us 2-3 situations where USD would fall 50% or more?
I did better than this. I gave you an example where it fell almost 100% - confederate USD.
Look through most of history , fiat currencies come and go. The average lifespan is around 27 years for fiat currencies before they get a major "reboot" . We are seeing incidents of this right now in countries with hyperinflation, currency/gold confiscation, and national bailins where everyone gets a massive haircut.
Bitcoin has gone through many bubbles in the past where they all correct after a 5-11x in explosive growth, thus many longterm investors will likely take profits in the 5-10k USD per btc range here.
Market cap is indeed a worthless and misleading number; more relevant is market liquidity and you can easily sell a few million of btc right now and not effect the price more than 1%.
Bitcoin is very fungible and liquid, and while still volatile(many fiat currencies are volatile too), isn't at all like a stock where you don't see people trading stock shares to buy goods and services.
No. Not yet. BTC volume is low compared to the equity trading. BTC volume is generally in the range of 50K - 200K BTC / day. And spiking much higher the last few few days
A few million in Bitcoin isn't much these days and many exchanges would quickly fill those orders in a second. Bitcoin is very liquid with over 2.5 billion in trading volume during the last 24 hours
Anyone investing now should be prepared to hold onto it for at least 2020 (next halving) http://www.bitcoinblockhalf.co... but this is an acceptable risk for many to diversify their portfolio with a few % of BTC.
which is a huge problem is you are a rational actor that views volatility negatively.
While volatility in a currency is indeed negative. There are plenty of rational reasons one prefers volatility. Day Traders (I don't recommend this hobby) or simply people who don't mind balancing currencies(BTC is down 20 % I Use USD fiat, BTC up 20 % I combine 18% discount from purse.io for 38% off anything from amazon) .
Bitcoin has been increasing becoming more stable year after year but still has a long way to go and is more akin to gold asset than currency however.
the USD does have a practical floor -- short of an apocalyptic event, the likelihood of the USD dropping more than 50% in my lifetime is approximately zero.
I wouldn't suggest this is accurate as fiat currencies fail all the time. The USD has already had some past failures- confederate dollar, 100% gold backed dollar, partial gold backed dollar.
Intrinsic value in anything is subjective and a product of utility, demand, and scarcity. Bitcoin has left the speculation only phase a long time ago and now has a healthy circular economy of inelastic users who need it to survive: Gamblers, Prostitutes/Johns, Drug Dealers/Users, Ransomeware victims, Money launderers/capital flight are some important use cases.
Where can I purchase a bunch of these bracelets so I can use them on the darknet markets or do I need to still meet the dealer in a dangerous back alley with one of these bracelets? What should I call them; Bracelet coins? How divisible are they? Is each bracelet easily checked for legitimacy to avoid counterfeits? Are they all fungible with one another? Is their a liquid exchange where I can exchange these bracelets easily? Thanks in advance for the info on introducing me to your new currency!
Yes, and because China has overbuilt infrastructure at the moment they have an excess of unused Hydro that they can use to mine so the ASIC farms are built right next to the hydro companies and Bitcoin essentially becomes a more efficient battery for them by converting energy into fungible value.
Full nodes currently are not subsidized, but there is a new development which is almost ready called Lightning network which will allow full nodes to be both subsidized and tx capacity to dramatically increase. Segwit upgrade will increase the network capacity from ~7 Transactions per second to ~14 TPS and thereafter LN payment channels will both subsidize LN full nodes and but increase the network transaction throughput to millions of transactions per second.
But what good are returns if you never actually get anything from Mining.
I've left Bitcoin installs running for weeks and never gotten a single Satoshi. No way it's paying for the electricity bill.
So why do _I_ join up and give my support to the blockchain network?.
Bitcoin mining is very professional and competitive.
You need to mine in a pool (I suggest p2pool), use a modern ASIC, and have access to very cheap electricity to be profitable.
There are many other ways to support bitcoin besides mining like running a full node, buying bitcoins, contributing code, writing manuals , peer review, education, ect...
This may have been true in 2010 but much has changed since than. An inelastic demand indicates a client base who depends upon bitcoin regardless of price, premium over spot, or tx fees. This is principally driven by darknet markets of drugs, prostitution, online gambling, capital flight, and ransomeware. There are also whitemarket use cases like saving 18% off everything on amazon (not including the savings I make from appreciation) but it is the blackmarket that gives bitcoin its true utility. Sometimes this form of regulatory arbitrage is used for ethical blackmarket cases like donations to wikileaks or Venezuelans buying food, but the end result is the same, utility and demand for bitcoin.
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Assuming that NK has channeled most of its BTC stash through a small number of wallets, and that most of them may be identified by NK's spending patterns, I think this is a good case for implementing "poisoned wallets" to render all BTC (or partial BTC) that left a verboten wallet after a given time stamp.
There is no way this will happen . We may not want bitcoin to be used by N Korea but adding blacklists, taint , and reducing fungibility/privacy is unacceptable. Fungibility is more sacrosanct than the 21 million limit in bitcoin and we have already made great changes with privacy that are starting to be used now to make any sort of chain analysis impossible.
but when they get created out of nothing via activities that don't have any semblance of value or value control
The minting of bitcoin is controlled by the destruction of registered value by means of burning energy to create fungible value . This is inherently an inefficient process by design that states are highly subsidizing indirectly through laws and regulations.
.I could never bring myself to even invest a dollar.
Unless you are gambling on the forex market with large amounts of fiat, you shouldn't invest in fiat currencies because they constantly lose value due to inflation. Bitcoin on the other hand is disinflationary. Therefore, scarce and likely to keep going up in value , whether more people invest or not.
.To say it seems shady is probably a gross understatement.
Bitcoins raison d'être is for regulatory arbitrage and assisting the underserved. Sure you can use it for white market use cases but that isn't the primary value proposition. Just like dollars, sometimes this involves breaking laws that are unethical outlawed (war on gambling, prostitution, and drugs), sometimes it involves skirting regulations that are unethical (banking embargo against wikileaks, asset forfeiture, operation chokepoint) , other times it involves skirting capital control from countries that have destroyed their currency due to corruption and mismanagement, and other times it involves unethical illegal transactions(ransomeware). Most crime is done with the US dollar , and while bitcoin is beginning to eat some of the dollars marketshare with the blackmarket it has a long way to go, especially with regards to arms trading and terrorism which is almost 100% fiat currency based.
Aren't bitcoins easily trackable? They are only anonymous if you mine them yourself or buy them from someone that mined them themselves.
Some new changes already in use as we speak add much higher privacy to bitcoin. Lightning network payment channels with onion routing as a default with no recorded tx history on the blockchain, confidential transactions, mimblewimble, cross atomic swaps , all make chain analysis obsolete.
As if this is the worst thing N Korea has been involved with.
If North Korea is building up a bitcoin stash, then maybe there would be some way for the NSA to cripple the bitcoin currency and wipe out North Korea's savings..
Best of luck, bitcoin thrives in hostile byzantine environments and will only grow stronger with attacks. The war on drugs is an easier task to accomplish than stopping bitcoin. Whether nation states understand this or not , they heavily subsidize the value of bitcoin with their laws and regulations. Bitcoins primary raison d'être is for regulatory arbitrage. Thus the best way to undermine bitcoin would be to start legalizing everything and removing all regulations which indirectly subsidize the value of bitcoin.
Either they could find some vulnerability in the blockchain protocols or, through hacking, infiltrate and damage (okay steal) enough digital wallets as to undermine people's confidence in the currency..
They have to compete with all other hackers and nation states who are trying to collect upon a multibillion dollar bug bounty. Any successful attacks may temporarily drop confidence in bitcoin , sure ,but there are enough of us bootstrapped to see the project through regardless the risks involved.
If people can't rely on it, or if it's too easily stolen then that trust goes out the window and the value of the bitcoins will crash.
Theft , asset forfeiture , hyperinflation , bail ins , bail outs , ect , happen all the time with fiat. Bitcoin just has to do moderately better than any competing currency in any aspect that makes currency valuable(scarcity, fungibility, ect...) to retain value and be used. Since bitcoin is worldwide, all it takes is one country to monetary flaws to see an influx of new bitcoin investors as an exit to their countries problems. We are seeing this already in Argentina and Venezuela.
Would a working quantum computer be able to do bitcoin (or other blockchain algorithms) calculations at speeds far greater than conventional or even specialized CPUs?
Right now, no . In the future , possibly weaken bitcoins security assumptions, but this would undermine the whole financial system as well. Bitcoin also has some easy solutions if this occurs = https://en.bitcoin.it/wiki/Qua...
(It would be ironic if so; they'd be going from "hard" currencies to something that is completely abstract).
Hmmm... fiat currencies and traditional finance is far from "hard" and really abstract.
But wait till the governments put their nose into it, and require all wallet holders to be IDd. Then ALL the transactions you will ever have done in your life can be tied to you.
This is unenforceable. Bitcoin users can have billions of "accounts" and most wallets change the address (account) with each transaction for privacy. Some new changes already in use as we speak add much higher privacy to bitcoin. Lightning network payment channels with onion routing default with no recorded tx history on the blockchain, confidential transactions, mimblewimble, cross atomic swaps , all make chain analysis obsolete.
This happens all the time, and many merchants will offer discounts when you buy goods or services in bitcoin because bitcoin is liquid, eliminated merchant processing fees, eliminates charge back risk.
ICO = illegal security and are generally scams = https://www.sec.gov/news/press... You get no stake and their is a strong incentive for the company to fail even if it has the best of intentions
No, market cap in general is a worthless number and this is made far worse because most of ethereum was premined unlike bitcoin.
Can you give us 2-3 situations where USD would fall 50% or more?
I did better than this. I gave you an example where it fell almost 100% - confederate USD. Look through most of history , fiat currencies come and go. The average lifespan is around 27 years for fiat currencies before they get a major "reboot" . We are seeing incidents of this right now in countries with hyperinflation, currency/gold confiscation, and national bailins where everyone gets a massive haircut.
Bitcoin has gone through many bubbles in the past where they all correct after a 5-11x in explosive growth, thus many longterm investors will likely take profits in the 5-10k USD per btc range here.
Market cap is indeed a worthless and misleading number; more relevant is market liquidity and you can easily sell a few million of btc right now and not effect the price more than 1%.
and Gdax is a very illiquid exchange. On a more popular exchange selling a million would hardly effect the price.
Bitcoin is very fungible and liquid, and while still volatile(many fiat currencies are volatile too), isn't at all like a stock where you don't see people trading stock shares to buy goods and services.
No. Not yet. BTC volume is low compared to the equity trading. BTC volume is generally in the range of 50K - 200K BTC / day. And spiking much higher the last few few days
Last 24 hour trading was over 940k BTC or 2.5Billion USD https://coinmarketcap.com/curr...
A few million in Bitcoin isn't much these days and many exchanges would quickly fill those orders in a second. Bitcoin is very liquid with over 2.5 billion in trading volume during the last 24 hours
Anyone investing now should be prepared to hold onto it for at least 2020 (next halving) http://www.bitcoinblockhalf.co... but this is an acceptable risk for many to diversify their portfolio with a few % of BTC.
which is a huge problem is you are a rational actor that views volatility negatively.
While volatility in a currency is indeed negative. There are plenty of rational reasons one prefers volatility. Day Traders (I don't recommend this hobby) or simply people who don't mind balancing currencies(BTC is down 20 % I Use USD fiat, BTC up 20 % I combine 18% discount from purse.io for 38% off anything from amazon) .
Bitcoin has been increasing becoming more stable year after year but still has a long way to go and is more akin to gold asset than currency however.
the USD does have a practical floor -- short of an apocalyptic event, the likelihood of the USD dropping more than 50% in my lifetime is approximately zero.
I wouldn't suggest this is accurate as fiat currencies fail all the time. The USD has already had some past failures- confederate dollar, 100% gold backed dollar, partial gold backed dollar.
Intrinsic value in anything is subjective and a product of utility, demand, and scarcity. Bitcoin has left the speculation only phase a long time ago and now has a healthy circular economy of inelastic users who need it to survive: Gamblers, Prostitutes/Johns, Drug Dealers/Users, Ransomeware victims, Money launderers/capital flight are some important use cases.
Where can I purchase a bunch of these bracelets so I can use them on the darknet markets or do I need to still meet the dealer in a dangerous back alley with one of these bracelets? What should I call them; Bracelet coins? How divisible are they? Is each bracelet easily checked for legitimacy to avoid counterfeits? Are they all fungible with one another? Is their a liquid exchange where I can exchange these bracelets easily? Thanks in advance for the info on introducing me to your new currency!
Yes, and because China has overbuilt infrastructure at the moment they have an excess of unused Hydro that they can use to mine so the ASIC farms are built right next to the hydro companies and Bitcoin essentially becomes a more efficient battery for them by converting energy into fungible value.
Full nodes currently are not subsidized, but there is a new development which is almost ready called Lightning network which will allow full nodes to be both subsidized and tx capacity to dramatically increase. Segwit upgrade will increase the network capacity from ~7 Transactions per second to ~14 TPS and thereafter LN payment channels will both subsidize LN full nodes and but increase the network transaction throughput to millions of transactions per second.
I suggest you stay away and don't buy any bitcoin for a few years and than check back when you are ready to re-evaluate.
But what good are returns if you never actually get anything from Mining. I've left Bitcoin installs running for weeks and never gotten a single Satoshi. No way it's paying for the electricity bill.
So why do _I_ join up and give my support to the blockchain network?.
Bitcoin mining is very professional and competitive. You need to mine in a pool (I suggest p2pool), use a modern ASIC, and have access to very cheap electricity to be profitable. There are many other ways to support bitcoin besides mining like running a full node, buying bitcoins, contributing code, writing manuals , peer review, education, ect...
This may have been true in 2010 but much has changed since than. An inelastic demand indicates a client base who depends upon bitcoin regardless of price, premium over spot, or tx fees. This is principally driven by darknet markets of drugs, prostitution, online gambling, capital flight, and ransomeware. There are also whitemarket use cases like saving 18% off everything on amazon (not including the savings I make from appreciation) but it is the blackmarket that gives bitcoin its true utility. Sometimes this form of regulatory arbitrage is used for ethical blackmarket cases like donations to wikileaks or Venezuelans buying food, but the end result is the same, utility and demand for bitcoin.