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posted by Fnord666 on Wednesday October 25 2017, @01:02PM   Printer-friendly
from the first-they-ignore-you-then-they-laugh-at-you-then-they-fight-you dept.

As someone that follows the developments in Bitcoinland closely, it has been difficult to find an article that does a good job of summarizing the drama surrounding the community. This Forbes article (Google Cache) only scratches the surface, but does a good job doing so:

On or around November 16, Bitcoin, the original cryptocurrency created by a novel technology called blockchain — a masterpiece of game theory, cryptography and, of all things, the age-old ledger — will split into two chains, each with its own set of coins. Hodlers [Note: 'hodl' - is a meme that started here] should be happy about suddenly owning double the number of Bitcoins except for the fact that the question of which of these will be called the true Bitcoin is, for now, up in the air — and that could create turmoil in the market. Anyone willing to bet their money by selling one set of coins for another stands to take a financial hit — either because they've picked the wrong side, or, for technical reasons, because selling one set may actually cause a sale on both sides of the chain.

[...] How the first cryptocurrency reached this cliffhanger in its journey is a story that has been many years in the making and finally pits against each other what were strange bedfellows anyway: the cypherpunks who, years before Bitcoin even existed, developed the various technologies that finally resulted in the first true digital asset and the Silicon Valley types who popularized the cryptocurrency that now has at least tens of millions of users and a $100 billion market cap. Whether one side will prevail or their death match will destroy Bitcoin is anyone's guess.

Is this how Bitcoin finally dies? (This bitcoiner thinks bitcoin will be wounded, but will live on.)


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  • (Score: 4, Insightful) by Azuma Hazuki on Wednesday October 25 2017, @04:40PM (17 children)

    by Azuma Hazuki (5086) on Wednesday October 25 2017, @04:40PM (#587445) Journal

    Fuck cryptominers, fuck day traders, and fuck every rent-seeking son of a bitch who tries to live without working. Get a real job, assholes.

    --
    I am "that girl" your mother warned you about...
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  • (Score: 2) by bradley13 on Wednesday October 25 2017, @05:05PM (15 children)

    by bradley13 (3053) on Wednesday October 25 2017, @05:05PM (#587457) Homepage Journal

    Well, yes, but... I do think digital currencies have an important role to play. If we can prevent governments from stomping on them, digital currencies offer an alternative to central banks. Which reduces governments' ability (by at least a small amount) to screw with us.

    --
    Everyone is somebody else's weirdo.
    • (Score: 0) by Anonymous Coward on Wednesday October 25 2017, @06:17PM

      by Anonymous Coward on Wednesday October 25 2017, @06:17PM (#587477)

      Sure they have a role, but this wild investment fire in Bitcoin is highly suspicious. The value is in being able to trade cryptographically secure tokens, and what value any one token has will probably drop when there are a few hundred "coins" around. Eventually people will easily be able to pay in 38 Bitcoins 230 Dogecoins 5,883 Ethereum or whatever combo the seller accepts. How such tokens acquire a precise value is the real trick and as the inflation curve shows it is not even close to stable.

      Personally I find the transaction fees to be almost identical to the banking model. I'll let the wiki speak for itself.

      Transaction fees are voluntary on the part of the person making the bitcoin transaction, as the person attempting to make a transaction can include any fee or none at all in the transaction. On the other hand, nobody mining new bitcoins necessarily needs to accept the transactions and include them in the new block being created. The transaction fee is therefore an incentive on the part of the bitcoin transactor to make sure that a particular transaction will get included into a block.

      I like the extortion here: on the other hand, nobody mining new bitcoins necessarily needs to accept the transactions and include them in the new block being created.

      So it is voluntary, unless you want your transaction to be accepted, then it is not voluntary. Sure sure anyone can run their own miner, but as has been stated if a group can control enough of the total hashing power then they can become the Bitmafia.

    • (Score: 5, Informative) by Thexalon on Wednesday October 25 2017, @06:24PM (13 children)

      by Thexalon (636) on Wednesday October 25 2017, @06:24PM (#587481)

      I get the distinct impression that you have no clue what a central bank actually does or why it was invented. A lot of crypto-currency advocates seem to think that in a back room somewhere Janet Yellen is rubbing her hands together in glee as she crashes the US dollar just for the fun of it or something. Which is not at all what she and her foreign counterparts actually do.

      The Federal Reserve and other central banks have 2 main responsibilities:
      1. Prevent inflation from getting too high or low. If inflation is too high, then the currency no longer acts as a store of value because its purchasing power drops too quickly, and you get Zimbabwe or Wiemar Germany where you need a wheelbarrow full of cash to buy a loaf of bread. If inflation is too low (or even below zero, causing deflation), then money doesn't circulate enough because it's safer to hold on to cash than it is to invest the money, and that lack of investment reduces job growth. The Fed usually targets around 2% inflation.

      2. Prevent unemployment from getting too high or low. If unemployment is too high, the problems are obvious, namely you now have a bunch of people not working who are desperately looking for cash. If unemployment gets too low, then you get into what's known as a "wage-price spiral" that creates high levels of inflation and you've got the "stagflation" of the 1970's.

      They generally do an OK job of it. If you look at the US historical inflation numbers [in2013dollars.com], you'll notice that the numbers smooth out quite a bit after you get well into the 20th century and central banking figures out how to do its job, compared to the wild and often deflationary fluctuations of the 19th century. Even the worst year of inflation under the Fed, 1947, isn't anywhere near as bad as some of the pre-Fed years. And if you believe that deflation is a good thing, read up on William Jennings Bryan and why his inflationary policy of adding silver to the currency was so popular.

      And, if your concern is "But the value of my wealth is dropping! No fair!", then the problem is that you're refusing to invest your money somewhere. If you want to play it safe, buy T-Bills, because if those collapse then your cash is also worthless. If you want to play it a bit less safe, try state and municipal bonds. Next level down is usually bonds issued by stable corporations. Stock index funds where you basically get whatever the Dow or S&P 500 is the next level of stability down from that. Picking individual stocks is substantially more risky than that. If you're worried that the thing you're buying isn't a real thing with inherent value, well then I'll point out your pieces of paper saying "100 dollars" on them don't have inherent value either, and suggest you try real estate or commodities trading. And if you're specifically worried the US government is going to go straight to hell in a handbasket, then you'll want to look outside the US, maybe do some foreign exchange trading. The whole point of inflation is to encourage you to get your cash out of your mattress and put it towards something useful.

      Lastly, if your concern is that the President and Congress use the Fed to mess with you, that's why there are all sorts of mechanisms to insulate the Federal Reserve from control by the politicians.

      --
      The only thing that stops a bad guy with a compiler is a good guy with a compiler.
      • (Score: 0) by Anonymous Coward on Wednesday October 25 2017, @06:37PM (2 children)

        by Anonymous Coward on Wednesday October 25 2017, @06:37PM (#587487)

        The whole point of inflation is to encourage you to get your cash out of your mattress and put it towards something useful.

        But currencies like Bitcoin have strong deflationary tendencies right? At least at the start.

        • (Score: 4, Insightful) by Thexalon on Wednesday October 25 2017, @07:21PM (1 child)

          by Thexalon (636) on Wednesday October 25 2017, @07:21PM (#587503)

          But currencies like Bitcoin have strong deflationary tendencies right?

          Yes, and that's one of its major problems. Most people getting involved in Bitcoins are doing so as an investment, not as a way of actually buying something, and their plan is to simply hang onto it and watch it grow in value until they want to convert it into an actual currency to buy something with. Which makes it more like buying rare collectables or something than a currency.

          --
          The only thing that stops a bad guy with a compiler is a good guy with a compiler.
          • (Score: 2) by jmorris on Thursday October 26 2017, @12:02AM

            by jmorris (4844) on Thursday October 26 2017, @12:02AM (#587623)

            Yup, collectables you can't even really see. Rare Pepes are the real long term investment vehicle!

      • (Score: 2) by curunir_wolf on Wednesday October 25 2017, @06:54PM (5 children)

        by curunir_wolf (4772) on Wednesday October 25 2017, @06:54PM (#587492)

        Sure it "flattens out" - because the central banks demand only one direction: Inflation. Because that's the only way to keep the money flowing toward the top (the oligarchs). Deflation can often be a good thing, but not for the ones holding the most money. It's designed to make the rich richer and the poor poorer.

        And, if your concern is "But the value of my wealth is dropping! No fair!", then the problem is that you're refusing to invest your money somewhere.

        Until the central bankers and the oligarchs decide to create an investment bubble out of whatever it is most people have invested most of their money in, like, I don't know, maybe YOUR HOUSE, and then when the bubble bursts they just print up a bunch of money and hand it out to the top-level banks to cover those losses and go around kicking all the poorest homeowners out on the street.

        If you're unsure what the Federal Reserve has done since its inception here is a handy chart for you [comparegoldandsilverprices.com].

        --
        I am a crackpot
        • (Score: 1, Touché) by Anonymous Coward on Wednesday October 25 2017, @07:32PM

          by Anonymous Coward on Wednesday October 25 2017, @07:32PM (#587510)

          ^ this crackpot sees trends

        • (Score: 2) by Thexalon on Wednesday October 25 2017, @07:55PM (3 children)

          by Thexalon (636) on Wednesday October 25 2017, @07:55PM (#587521)

          Because that's the only way to keep the money flowing toward the top (the oligarchs). Deflation can often be a good thing, but not for the ones holding the most money. It's designed to make the rich richer and the poor poorer.

          That is pretty much the exact opposite of reality.

          The basic rule: You want inflation if you're a borrower, and deflation if you're a lender. The oligarchs are, for the most part, lenders - that's how lots of banks and even non-banks like GM and hospitals make their money. The middle class and poor are mostly borrowers (the main difference being the middle class is much more likely to have collateral like their house or car). As an example, let's say you've borrowed $1000 for 1 year at a fixed rate of 5% APR, and to simplify the math it's all due in 1 lump sum at the end of the year. Now, the loan terms were written in nominal values, so you have to pay back $1050 regardless of what $1050 is actually worth in today's dollars. So if there's high inflation, say 15%, then you actually are going to pay back $900 worth, which is rather nice for you. If there's 15% deflation, on the other hand, you're going to have to pay back $1200 worth.

          Now, the banks aren't stupid, so they try to predict inflation and factor that into the interest rates, but they'd be perfectly happy to see the actual inflation rates end up lower than their predictions.

          The reason you think inflation is the source of the problem probably has more to do with your wage or salary not being adjusted for inflation. What should be happening is that your employer can sell things at, say, 3% more after the year is up, so to keep you at roughly the same salary level s/he gives you a 3% cost-of-living raise. That's not happening because there's a surplus of labor in most fields in most places, so supply and demand is driving all wages down. The careers that aren't experiencing those sorts of problems are fields that artificially create shortages like doctors, and management because they're the ones deciding who gets paid how much.

          --
          The only thing that stops a bad guy with a compiler is a good guy with a compiler.
          • (Score: 2) by jmorris on Thursday October 26 2017, @12:05AM (1 child)

            by jmorris (4844) on Thursday October 26 2017, @12:05AM (#587624)

            The basic rule: You want inflation if you're a borrower, and deflation if you're a lender.

            That rule applies in most cases. It applies in every case but one, the case where you are the one inflating. Printing money is a tax on everyone holding the currency being printed. The 'lender of last resort' is also the printer of new money so they win both ways.

            • (Score: 2) by Thexalon on Thursday October 26 2017, @11:56PM

              by Thexalon (636) on Thursday October 26 2017, @11:56PM (#588057)

              If you're the Fed, you don't want to inflate the currency too much, because if you do the profits on your loans goes down. That said, any profits the Fed manages to make go right into the US Treasury, which means that's taxes we don't need to pay. And unlike private banks, the Fed board that makes these decisions can't give themselves raises whenever they feel like it.

              I get that you can't stand fiat currency, but there's no evidence to suggest that the Fed is trying to wreck the US dollar. After all, if they really wreck the dollar, they will be among those up against the wall because the revolution came.

              --
              The only thing that stops a bad guy with a compiler is a good guy with a compiler.
          • (Score: 0) by Anonymous Coward on Thursday October 26 2017, @05:32AM

            by Anonymous Coward on Thursday October 26 2017, @05:32AM (#587711)

            one thing you forgot to mention: in many European countries, there are laws about salaries being raised with the inflation rate, at least for public sector workers.

      • (Score: 0) by Anonymous Coward on Wednesday October 25 2017, @06:59PM

        by Anonymous Coward on Wednesday October 25 2017, @06:59PM (#587495)

        I get the impression that you think central banks only do "good"

        Money printing has historically been a big enabler of financing wars. Read
        any economic history if you don't believe this.

        Money printing also allows governments to deficit spend on projects/programs
        of dubious value.

        Where would the United States be if the country collectively had invested in
        manufacturing automation and not sold/exported technology to offshore interests?
        Instead, the deficit spending has helped keep the military industrial complex the main
        industry in the US.

        Remember, no fiat currency that has ever existed has survived in a long-term sense.
        A reasonable extrapolation of this historical fact is that the US Dollar will not make it
        either.

      • (Score: 2) by boltronics on Thursday October 26 2017, @02:07AM (2 children)

        by boltronics (580) on Thursday October 26 2017, @02:07AM (#587666) Homepage Journal

        The whole point of inflation is to encourage you to get your cash out of your mattress and put it towards something useful.

        If that were true they would teach stocks and investments in school as a compulsory subject everywhere.

        --
        It's GNU/Linux dammit!
        • (Score: 2) by Thexalon on Thursday October 26 2017, @11:58PM (1 child)

          by Thexalon (636) on Thursday October 26 2017, @11:58PM (#588060)

          At least where I was growing up, we covered stocks and investments in our mandatory econ 101 course, as well as in some of our math courses (since it's probably the most important application of exponential functions in the real world).

          --
          The only thing that stops a bad guy with a compiler is a good guy with a compiler.
  • (Score: 0) by Anonymous Coward on Wednesday October 25 2017, @05:59PM

    by Anonymous Coward on Wednesday October 25 2017, @05:59PM (#587471)

    I'm spending my very limited funds to try and make sure we have private money and to hopefully fund other operations. Global digital currency and a cashless society is probably a forgone conclusion. The only question is whether people have *private* digital currency or not. What that would enable is limitless. Voluntary government, voluntary insurance, self "employment" for everyone in the world who can develop a skill, etc. I mine Monero with the FOSS miner, xmr-stak-amd.