To think a huge crypto bitcoin bloodbath is on the cards.

This thread is physically painful, and will date very badly.

Tulipomania bubble lasted c44 years?
South sea bubble lasted c9 years?
English railway mania arguably lasted c20 years.
Even in the business at the speed of thought era, bubbles (if it turns out Bitcoin and other coins and blockchain are bubbles) can persist for quite some time before they run out of bigger fools.

[quote Zilla1]@DGRossetti I'm aware everything has costs and benefits and I'm aware of some the issues both regarding records and fiat currency too. I don't think paper records are perfect though have not seen any compelling value proposition for blockchain which is why I asked. If your standard is perfection as in the Windrush records then how many Bitcoin owners relying on the blockchain have lost access due to the loss of HDD/ memory sticks, hacking of wallet providers and so on?

I also understand what happens when I try and access old optical media. I recall the BBC Domesday Book had problems with the optical media storage which wasn't a great look given the analogue records it emulated have lasted for over 1000 years. The blockchain is decentralised but by its novel nature has no certainty about stability.[/quote]
If people do want to "invest in crypto" then it might be an idea to keep an eye open for blockchain-as-a-service type outfits. After all, in todays capitalism on steroids society, then everything and anything can be hived off in the name of profit. Why on earth would you want to run your own node when you can sub it out.

I would also expect to see places emerging that archived off the older blocks in the blockchain, charging for access if anyone really wanted to go back to year zero and recreate the blockchain. Bearing in mind this is one way the FBI were able to punch through the anonymity problem with bitcoin.

That's what I would put forward if I were still strategizing. Do want you want with it ...

As for Bitcoin owners who lost their stash after throwing away a hard drive ... we return to the point about understanding. For some weird reason, even though I only invested less than £20 back in 2012 I damn well knew then not to lose the keys.

Markets can stay irrational longer than you can stay solvent.

I'm building up stocks of the next hot thing, magic beans.

I dunno, we have been hearing it’s a bubble , it’ll crash etc for years and it does crash but recovers ( from what I can see anyway)
It is terrible for the environment though, all that energy basically wasted on mining coins etc but then you could I suppose argue that cash creation uses energy and visa cards etc do too.

I heard a good argument (imo ) against them in that they are supposed to be anti banks, vested interests, outside of society and normal monetary processes etc but they rely completely on modern infrastructure to exist and be used. They are stored on our phones and use electricity etc and so are just as vulnerable to social collapse as traditional methods of buying things.
Don’t know if this is a good argument against crypto but it sounded one to me

@DGRossetti I'm aware everything has costs and benefits and I'm aware of some the issues both regarding records and fiat currency too. I don't think paper records are perfect though have not seen any compelling value proposition for blockchain which is why I asked. If your standard is perfection as in the Windrush records then how many Bitcoin owners relying on the blockchain have lost access due to the loss of HDD/ memory sticks, hacking of wallet providers and so on?

I also understand what happens when I try and access old optical media. I recall the BBC Domesday Book had problems with the optical media storage which wasn't a great look given the analogue records it emulated have lasted for over 1000 years. The blockchain is decentralised but by its novel nature has no certainty about stability.

Although my feeling is like nuclear fusion this is forever going to be "in the near future" for 50 years ....

I think you're probably right here. When I studied quantum computing at university I was told it was literally about to change everything. That was 15 years ago.

[quote Zilla1]@Magnited I sound like a luddite but what transactions can it serve a tangible purpose for, significantly better than real world paper records. I've seen Land Registry, investment shares, insurance and other contracts discussed but have never seen a compelling example where the benefits outweigh the risks. You said "It has value because that unique digital number is able to form part of a chain so that complex transactions can happen in the real world. But it is yours." but have you seen any that blockchain facilitate better than fiat currency financial investments mediated through non-blockchain platforms cannot facilitate?[/quote]
You might want to ask the dwindling number of Windrush survivors about trusting the state with paper records and then come back.

We return to what I wrote upthread about decentralisation and trust.

If you are happy to trust a single entity - be it your bank or the government - to never make a mistake or act in a way counter to policy, law, or contract then really this discussion is moot. You trust them. They can't do any wrong. End of story.

However if for some or whatever reason you don't have 100% trust in them, then moving the data out of their sticky fingers and into a public and decentralised ledger suddenly looks like an idea.

Add to that the power of cryptography - where transactions are locked to a unique uncrackable* key, and you can start to deliver some services without needing a central authority, Just throw it on the blockchain and (since the blockchain is a state machine) let it process it onwards for you.

Uses so far are around provenance and contracts - hence the world of the law sniffing around.

*Just to head off the quantum-crackers, we'll note that quantum computing can also deliver unbreakable and uninterceptable codes as well as cracking conventional ones. Although my feeling is like nuclear fusion this is forever going to be "in the near future" for 50 years ....

@housemaus hopefully not the same! But I recommend hot nerds as husbands. Excellent choice all around.

Kazakhstan was mining 25% of bit coin until the government stopped it. Arguably not a great look for a utility. I think the volcano was El Salvador www.dw.com/en/el-salvador-plans-to-build-bitcoin-city-at-the-base-of-a-volcano/av-59915674

The volcano might suit a Bond villain though.

From CNBC:
69% of under-40 traders investing in cryptocurrencies incorrectly believe they’re regulated, according to the U.K. Financial Conduct Authority.
68% of younger traders compared investing in cryptocurrencies and other high-risk products to gambling, the regulator said.
The FCA previously warned a “new, younger, more diverse group of consumers” was getting involved in higher risk investments

This is worrying.

Who are these Kazakhstan volcano miners? Pictures or it didn't happen.

@sleepyhoglet because when people talk about the blockchain or mining, they are talking about millions? of bespoke computers/processors consuming electricity to perform calculations. The hardware tends to be bespoke and scrapped after a very short period of time (1.3 years) and the aggregate electricity exceeds that of a nation state (which state changes as more bit coins are mined - Argentina in February 2021). All for arguably nugatory benefit.

[quote sheroku]@Ratonastick that's a great blog. I totally agree with this dude. I also agree with him that Blockchain is massively over hyped. I'm a software developer and run a tech company and for years I've been asked if we use Blockchain or if we'll be transitioning to Blockchain. The answer is still no because I can't see any sensible reason for us to use it.[/quote]
Henry Ford famously ignored "the market" when setting up to make cars. When asked he noted that if he'd listened to his customers, he would have made "faster horses".

There are a plethora of incredibly bad crystal ball gazing instances in tech. The world maybe needing 5 computers in total. No one needing more than 640K of RAM.

The key to blockchain is decentralisation and sharing of trust. Unless you need (or want) that, it's of no interest to you.

A lot of the power of the state comes from it's control of the money supply. That and people with guns, with the former facilitating the latter. Once you accept that a decentralised infrastructure can remove the state from your plans you can see ways forward.

@Magnited I sound like a luddite but what transactions can it serve a tangible purpose for, significantly better than real world paper records. I've seen Land Registry, investment shares, insurance and other contracts discussed but have never seen a compelling example where the benefits outweigh the risks. You said "It has value because that unique digital number is able to form part of a chain so that complex transactions can happen in the real world. But it is yours." but have you seen any that blockchain facilitate better than fiat currency financial investments mediated through non-blockchain platforms cannot facilitate?

Why is it an environmental nightmare?

I think crypto has some interesting ideas, but a lot of the "alt coins" are pure scams.

I think in order to be taken seriously:

-they need to actually get bitcoin or another crypto to be adopted on a noticeable scale as money, which was the original idea

-get rid of all the scams and scammers

-make it more user friendly for the average person

The world would be a better place if people invested their hard earned cash into job creating businesses that are actually good for the future of the planet rather than environmentally destructive pyramid schemes. That's my (entirely biased) view anyway.

@MorningStarling

Ok. Thicko alert here ... how is crypto "mined"?

Each transaction requires computer power to process securely. People provide the processing power and are rewarded with "mined" crypto-currency.

Generally its a very power-intensive process. Highly-spec'd machines are needed to compete and the rewards are low. And you've got a massive energy bill to consider too.

Even more daft than I thought!

This is SO interesting and helpful, thank you @sheroku and @DGRossetti and other knowledgeable people.

I have long been wanting to understand more but the most I have understood from reading crypto Reddit is that no one knows wtf is going on! It’s all just fuck warren and Charlie, ramen and hodl to the moooooooooooon!

I understand the end product and they do have a tangible purpose. Imagine you could freely manufacture a $1,000 bill with your own unique serial number - that is the best analogy of what Bitcoin becomes. It has value because that unique digital number is able to form part of a chain so that complex transactions can happen in the real world. But it is yours.

As to the true value of Bitcoin, that is difficult to asses. At the moment it is what someone believed it is worth. That is what the market will pay. If Bitcoin is to replace existing currencies, then we are all going to need it. It will have to become more available. The market will have to be purposefully flooded. That suggests the price will have to come down. But who regulates it? The Federal Reserve or The UK Treasury etc? That could bring major problems for investors.

I very much doubt it will get to that. The energy involved would be substantial, we would need huge solar, wind or hydro projects to create sufficient crypto currency and it will take a long time. At a time when all land is competing already for various needs such as housing, leisure, transport, energy, rewilding, let alone food production there is a real risk that crypto currencies may run their course and fizzle very early.

We no longer needs to carry paper money, nor little bits of gold in any event. But talk it up, because of the fear of missing out, why not.

It's not for me. There are plenty of opportunities to make money.