I'd love to know what the electricity cost is to do that versus their immediate market value. Are you mining lottery tickets or do they have immediate worth?
I hope you realise the product of your mining belongs to your company given its their electricity you’re using (compared to the computers just suspending).
Commercial rates are generally lower than home retail rates, night-time rates are also on the low side, and your hardware is effectively free if you're using idle time.
Electricity is cheap in New Orleans and we make video games so the computers all have decent gpus.
You can connect to hubs that auto switch the mining algorithm to the most profitable one at the time.
0.005% lower expense ratios is what shifted my stuff from Fidelity to vanguard. Idk how much exposure they're putting into crypto currency based on this.
Loss leaders are by their nature unprofitable and thus will go away as soon as they're not required.
Suppose if Vanguard disappears, then Fidelity will hike their rates up.
On the other hand, if Fidelity disappears, Vanguard won't hike their rates up because they won't bite the hand that feeds them since it's their own hand.
They're not unprofitable in general. They are for Fidelity, which is using it as a loss leader to keep their customer base from fleeing (Fidelity has a lot of overhead as a financial services firm).
How do you know? Unless you have some actual evidence you're just making things up. Fidelity's largest fund is an index fund[1]. Do they make less money with index funds vs actively managed funds? Probably. I see no evidence that they are losing money on them and ample evidence they are profitable.
Unfortunately, there's no way to prove Fidelity's internal costs from the outside. Vanguard has the lowest expense ratios holding 4.4 trillion dollars in assets (Fidelity only manages 2.13 trillion). If you're undercutting them without that level of assets under management in those funds, you're losing money on it (Blackrocks has 5.7 trillion under management; it'd be reasonable to think they might be able to undercut Vanguard).
So "index funds are a loss lender for Fidelity (or Schwab, etc.)" is just idle speculation, got it. Even if it were true, there is no evidence that Vanguard's other products are not also subsiding their index funds, so the point is pretty moot. Vanguard doesn't disclose their internal costs either.
Fidelity does more than just mutual funds: wealth management, investment advice, brokerage, etc. It would be outright negligent for a company like them to not "educate themselves" (CEO's words) on cryptocurrencies as one of many available investment options.
Fidelity is not a "mutual fund company," they are a pretty full scale financial services company. They offer more than just index funds, including (but not limited to) actively managed funds, life insurance, a checking account, a credit card, etc...
Most of the major players have funds with expense ratios within a couple basis points of each other. When they're that close, picking the fund with the lowest expense ratio may not result in the best performance and other factors can dominate:
- How well the fund is run, and how representative it is of the index. A fund with high trading costs may underperform.
- Securities Lending policy, how risky it is and how much of the income is returned to the fund
- (In taxable accounts) Tax efficiency. Some funds from some vendors return a significant amount of capital gains and short-term dividends, which can cost several basis points in taxes a year.
In general, the first two elements can be approximated by comparing the performance of the fund to its benchmark over the same time period, and tax efficiency can be estimated by looking at details of past distributions.
In most cases, it wouldn't make sense to switch existing funds to another provider in a taxable account if switching would result in a large capital gain.
I'd expect all providers to get better at indexing over time and their performance after taxes to converge.
EDIT: I was wrong. Please ignore the below incorrect content.
>In most cases, it wouldn't make sense to switch existing funds to another provider in a taxable account if switching would result in a large capital gain.
As long as the the funds track the same index then it's a Section 1031 like-kind exchange which does not trigger capital gains.
Did you compare performance before you changed? Differences that small can easily be offset by the replication strategy and lending. Comparing the tracking error of net performance vs. the index is more relevant.
The idea of electronic money is old. What this describes is a Chaum blind-signature style centrally-cleared coin, which dates back to his 1983 paper. There is no protection against double-spends in this scheme (without the clearing agency taking an active role), and no protection against the central agency creating unlimited amounts of coin.
Proof-of-work schemes like hashcash and bitgold are much closer to hitting on the central ideas that led to Bitcoin. It's like crediting Democritus with atomic theory -- yes, he's talking about the same thing, but in such a way that the final realization is so different as to be unrecognizable.
And it's not really a decimal; it's more properly "1 bitcoin" in the technical sense. 1BTC was later defined to be equal to 10^8 Satoshis because that seemed like a useful amount of money to track exchange rates for (though now it's about 10^4 too high.)
"Name" is maybe not quite right, "Satoshi Nakomoto" is the creator's pseudonym. The actual author of the bitcoin whitepaper is unknown and the subject of much speculation.
Strictly speaking, it's not known if the name is a pseudonym either. There are people in the world that have that name and they haven't denied being the creator.
If it is said author's name, why have they not publicly claimed to be this Satoshi? Name one such individual who has credibly been considered to have invented bitcoin.
You want the name of the Satoshi Nakomoto who is most likely to be the Satoshi Nakomoto? The name? That's what you want? Are you sure you've thought this through?
A pseudonym is a kind of name, so “name” is entirely correct, if not entirely complete (though, AFAIK, it is as complete as is known to be correct, since it is only widely presumed, rather than known, that the name is a pseudonym.)
One of the things I found surprising and curious about bitcoin is that the minimum viable amount is actually the transaction fee, which is maybe around 27,000 satoshis (median tx size x 120 satoshis/byte).
The surprising part for me was that, as a corollary to that, wallets with less than that amount have bitcoin in them which is potentially permanently removed from the total supply of BTC.
Well, you can send zero fee transactions, they'll just take a while to get through, depending on the current size of the mempool. And you can also always send transactions from multiple addresses, meaning you can add up these small amounts to something more meaningful
Will zero fee transactions ever get confirmations? They'll be the absolute last thing any miner includes so unless there's nothing else I wouldn't expect them to get any confirmations.
Ehm...where is this the case? Pretty much all exchanges that I actively monitor all list their order books, trade history etc. in bitcoin, with a varying number of decimals, and they also accept orders in bitcoin denomination as well. Sometimes they offer a switch in their own trading UI to use mBTC (milli-bitcoin, a thousanth of a bitcoin) as the unit, but that is always optional and I know nobody who uses it.
That being said, I also had a great laugh reading the article when it came to "200,000 satoshis". Although I totally believe her - it's hard to earn significant amounts of BTC via mining today without investing huge amounts of money and dealing with constricted ASIC supplies, so you need to have time and cash to blow at it. But she shouldn't have mentioned that number in the context of "yeah, our mining ops suddenly started to generate huge returns".
Most of the exchanges shut down their chat rooms but thats where it is mostly said, and other real time trading arenas where people talk. People say 200k/sat while reading .000200000 btc
but a satoshi also works in other quotes where other cryptocurrencies are the base unit as well. In an XMR/ETH market, the XMR would be quoted in X eth-sat or ethereum satoshis.
The GUIs use a variety of different metric base units and there is no agreement on the GUIs, that has nothing to do with the terms people use in speech, as they don't say "x thousandth of a bitcoin"
Eh, I don't really know where to start to explain how wrong this is.
The crypto market is still niche. There are stocks that make 100-1000% performance. But the stock market is "saturated" for representing assets, equities and companies. So its growth is limited.
> The crypto market is still niche. There are stocks that make 100-1000% performance. But the stock market is "saturated" for representing assets, equities and companies. So its growth is limited.
so I do not see how my post was wrong. These are the numbers. With such numbers, it would be foolish to discard the crypto market as "too volatile" and stick with stocks.
There are crypto coins that did way better than Strat, but there was not enough volume to make a decent profit. Even Doge did 260%. The only "loser" is STEEM with a 80% ROI.
No, these numbers do in fact suggest the crypto market is extremely volatile. Many, many people who invest regularly in stocks should not invest in cryptocurrency because it is too volatile.
People/companies that are able to understand and accept the risk that comes from speculating on cryptocurrencies should consider doing so, because it is possible to make a profit, perhaps a significant one.
But if you're looking at the past and saying "wow, I should buy BTC because it made 1000% last year - it can't lose!" then you're ignoring a quite serious risk that volatile growth could change into volatile collapse in the future.
I always read these posts as all or nothing, so forgive me if that's not what you mean. Why not take a smaller chunk of a portfolio, say 2%, and invest in crypto?
That way you can get potentially huge gains with little at risk.
They're volatile, but they have low correlation with other asset classes. You can put a small portion of your assets in crypto and lower the overall risk of your portfolio.
They also have very high Sharpe ratios (the ratio between returns and volatility), though given crypto's short history we shouldn't trust that too much.
Agreed, and there probably will be a year where nearly all coins tank. It would be foolish to invest all your profits back into the market, year after year.
But should this stop you (or any investment firm) to seriously look at the profit potential here? What do you get for correctly calling the bubble in 3 years? Nothing.
A slot machine is known to give a 200% ROI and allow a single pull each day. You play this slot machine every day for 500 days, until you notice it stops rewarding you.
Then someone says: "Look I told you so, I've been telling everyone for 2000 days now: This slot machine will crash one day!". And you say: "Ok. You were right. Guess the party couldn't last forever. Thanks for the warning!". Out of habit you play for 30 more days, but the rewards stay gone, so you exit with some nice profit.
Meanwhile, the other person knew of the existence of a highly profitable slot machine, while it was still profitable, but never actually played it, because they feared that one day it may not be profitable anymore.
This isn't quite right. To stick with the casino example, a large number of Bitcoin speculators are "letting it ride." They've won a bunch of times, and they continue to bet more and more money.
Your example only works if you are regularly selling BTC as its worth increases. If you're just holding onto it, your gains are never realized.
Nice quip. To stick with analogy: Some people in this thread are in the 70s, telling record companies to ignore the disco genre entirely, because it is a fad that can't last more than a decade. Instead, telling them to stick with what they know: 50s rock and roll.
Yup. Few people realize Bitcoin has been literally the best performing investment in human history. One dollar invested in March 2010 is worth $1+ million today. 1,000,000× returns.
But the downside of performing so well is that it is too easy to get distracted by the price and disregard the radical improvements that Bitcoin brings over legacy financial systems...
Now compare total market capitalization of equity markets to Bitcoin. I doubt you could liquidate millions of dollars of bitcoin in a day and not make the market plummet. You can do that in the last 30 minutes of the stock trading day with no very little price fluctuation.
There are equities that are up triple digits, including Nvidia...who is realistically the biggest winner in crypto mining.
That's a very very small amount, real currency markets do trillions a day, bitcoin is the size of a large company. He's totally right, that's a small liquid market when compared to the real markets. If you tried to dump 10 million in bitcoin all at once, there's a good chance you're going to crash the market; 10 million wouldn't even move the price in the EURUSD.
If you dump ten million bucks worth of shares in a $10B company, it doesn't matter how many other $10B companies there are. All that matters is the liquidity of that particular company.
«That's a very very small amount, real currency markets do trillions a day»
It is. But that's not what partiallypro and I were discussing. We argued about whether selling "millions" would crash BTC or not.
«He's totally right»
Did you even read the link I posted? Even if you look at only the BTC/USD pair, $10M represents merely ~1% of the volume sold DAILY on the top 6 exchanges (~$800M). You would probably need to sell an order of magnitude more, so $100M, in a single day, to start affecting the markets significantly.
I think you're confusing daily volume with volume available at any one time. Read what I said, dump 10 mil at once. Just because you can trade 10 million in a day doesn't mean the market can handle a 10 million dollar order in one shot without massive slippage due to lack of liquidity. You could drop a 50 million dollar order on the EURUSD and you might maybe move the market 1 point, but a mere 10 million would instantly cause a large swing of perhaps 10% in the bitcoin market, that's why it's so volatile, it's a small market.
It's so small you have individual holders the community now calls whales who can individually manipulate the price with buy and sell walls; no individual can do anything remotely like that in the FX market. One because they don't have enough money, and two because such market manipulation is illegal.
You'd need to spread your purchase or sale out over the day to avoid massive slippage for an order that big because there just isn't enough liquidity to absorb it without the moving the price. 10 mill is about 2500 coins, go look at the order book on any exchange, a purchase that large is going to massively move the price, looks to be possibly 300-400 dollars you'd move the market with that one order. 50 million would certainly crash/bubble the market.
I make a living trading BTC. I know the difference.
The OP mentioned selling in a day, not at once: «I doubt you could liquidate millions of dollars of bitcoin IN A DAY...» This is what I commented on.
You changed the topic and started talking about selling all at once, which would of course eat a bunch of bids. However even doing this wouldn't "crash the market." The order books are deeper than you think. It's hard to find examples, because it's plain dumb to market-sell this much in one order. But I found a ~1150 BTC sell on Bitstamp around 3pm on September 13 and it barely moved the price: https://bitcoincharts.com/charts/bitstampUSD#rg5zig1-minzczs...
It would eat even lower bids on exchanges with less volume/thinner books, but still wouldn't crash the market. For example some idiot sold 1200 BTC in two market-sells of 600 BTC each, 30min apart yesterday on Gemini; and although it ate all the bids from $4100 to $3400, twice!, it didn't "crash the market". Other exchanges didn't react. Subsequent trades resumed exactly where the price was before ($4100).
OK, little more liquid than I expected, I just glanced at the order books on bitcoinwisdom. What happened on Gemini looks more what I'd expect, a deep and fast crash as all the liquidity was eaten.
That's irrelevant, those aren't single transactions. If you can trade $15 Million in a single transaction in bitcoin without effecting the price, I'll say it's becoming liquid.
Such a move would instantly make bitcoin worthless - it would be more profitable for the attackers to put the computing power to mining. The only kind of party that would pose such a risk would not be interested in direct profitability: states.
i don't know how to put it for you mate.. service can be a product? you know, like this site where people friend each other and share shit nobody cares about, what's it called.. facebook?
As it stands, the rich have already co-opted cryptocurrencies.
Minting algorithms have mostly generated the majority of the entire supply in the first few months, allowing anyone with existing capital to purchase majority stakes or mining power.
> Johnson said that the company had made several venture investments in bitcoin-related businesses and that the company was looking at applications of blockchain technologies alongside several leading universities.
Every crypto article makes the same vague claims about the potential of non-specific blockchain technology. I'm surprised there was no mention of replacing Visa in this one as well.
Have you ever submitted a payment or received a payment and seen it marked as "pending". That's likely the result of a delay due to interbank transfers. Real time settlement is something theoretically possible with central banking using something like Fedwire, but in practice most banks use a third party clearinghouse like CHIPS. Additionally, if you have funds in USD and you need to make a payment in EUR, you'll probably need to work through a third party bank that deals with forex settlement. This all adds delays and costs.
With Ripple, realtime clearing and settlement happens automatically even between currencies. If my bank and the vendors bank both use ripple, I can use USD to pay the vendor EUR in real time, and the transaction completes in seconds.
> Yes, but is there something that Ripple is doing here that could not be done by any non-blockchain distributed system?
Yes... as far as I'm aware, most (all?) other non-blockchain distributed ledgers require complete trust between parties. Its hard enough for two banks to trust each other completely, let alone all banks to trust all other banks. The old way of doing things is to either trust a central bank completely, which is easier to do, but far from distributed, or to trust a third party with a days worth of transfers and settling at the end of the day. Still not distributed, but requires less trust.
> The chief value in blockchain seems to be in getting people to agree to do something at all.
Exactly!
Blockchain technology is essentially nothing more than a cryptographically secure distributed ledger. There's probably other ways of having a secured distributed ledger without technically being a blockchain, and I'd be interested in hearing about them, but I'm not aware of their existence at the moment. Either way, I'm not sure why there's so much pushback on blockchains?
Doesn't it just require trust of a single party for settlements (or any number of independent settlements parties)? Which you still sort of require in the ripple model because ripple owns a crap ton of it's own coinage (60% of the pot).
> Doesn't it just require trust of a single party for settlements
If you're talking about two banks... There are thousands of banks out there all with varying levels of trust, and those banks all need to transfer funds between each other on a daily basis. Most banks only have direct relationships with a handful of other banks.
> Which you still sort of require in the ripple model because ripple owns a crap ton of it's own coinage (60% of the pot).
Yes, they own 60% of XRP available, but if you're settling a transfer between USD/EUR then you only need to trust ripple for the length of time for that settlement to happen.
> Yes, they own 60% of XRP available, but if you're settling a transfer between USD/EUR then you only need to trust ripple for the length of time for that settlement to happen.
Which for a bank would be all the damn day because they wouldn't just be doing one transaction every 2 months.
I participated in writing a money transfer service. There's a number of steps, and the actual transfer is just one of them. There can be multiple identity verification checks, and bank authorizations. Each bank has their own internal API, etc. Sometimes their API is just randomly down, if it is some terrible foreign bank.
I know for a fact that Bitcoin's transaction time is not "real time," so why would Ripple's be?
Because bitcoin relies on proof of work in order to determine consensus. Usually vendors require X confirmations, and confirmations happen every 10 minutes of so (every time a block is mined).
Ripple doesn't use proof of work, it relies on a web of trust. So, in order to transfer money from Bank A to Bank B, it relies on Bank A to have some path to Bank B that is trusted. If Bank A and Bank B don't trust each other, but both trust Bank C, then the money is routed through Bank C.
Not sure what you mean by identity verification, if you're talking about for the customers, then they'd still need to have their identity verified at the bank (for purposes of Ripple, a bank is a ripple Gateway, but not all gateways are banks). Honestly, I'm an armchair expert in money transfer systems -- pretty familiar with Ripple, but less familiar with other systems.
It still does not solve the base problem of sourcing liquidity. It is fine and dandy if I have a coin that the banks value, but when I go to turn that coin into fiat currency, I have got to source the fiat liquidity from somewhere. This is the fundamental problem with something like Ripple...
I got removed from a project because I was raining on everyone's blockchain fantasy. Later they begrudgingly admitted that blockchain wasn't going to solve the hard interoperability problem we were facing (bog standard need to pull & analyze data from multiple incompatible data stores held by multiple independent parties).
I can forgive all the business guys for that thinking given articles like these, but the tech guys who were fanning the fires of that fantasy and telling me I didn't understand blockchain....
I got the distinct impression that there is a growing cottage industry of tech consultants and outsource companies that realize that if they can get their clients to "do it on the blockchain" they will be able to bill 10x as much for a project that has a current very good solution (and relatively fast to implement solution). And for which blockchain won't be a benefit. But the client may very well be able to get more VC money, so it's starting to turn blockchain 'skeptics' into martyrs.
And the most frustrating thing is that the innovation in Satoshi's paper (bringing together in a unique way prior known solutions) is really exciting and there are very good uses for blockchain. The international shipping companies using blockchain to track shipping container provenance strikes me as really, really perfect.
The bad uses of blockchain is going to kill the tech before it's had time to mature naturally and find its place.
Thank you for your comment. What you said is the best balance I’ve found of how bitcoin (and in my opinion also AI) is a really really really cool technology with a lot of potential, but also a complete scam.
Thank you for being a voice of reason in a domain that has increasingly become overrun by frauds and zealots.
As someone who has been involved in blockchain research since 2011, it’s sad to see a promising technology (in limited use cases) turn into a buzzword thrown around by the many speculators and scam artists peddling vaporware and pumping crypto prices.
This one is funny. While cryptocurrency gets most of the brickbats around here on HN, I think Deep Learning is also in the same boat.
Executives want to apply Deep Learning to everything and anything they can get their hands on. The results most of the time are underwhelming and could be had with a much simpler set of tools. Just wondering how long before Deep Learning goes into trough of disillusionment.
On the job I have to constantly shoot down big data / data mining / intelligent nn analysis crapware showeled to my bosses, and 99% of the time the answer is “you got NO data to speak of”
One day a consultant or another yesman will be able to check in and syphon precious resources with their pipe dream and I’ll watch six figures fly out of the window while my dev team struggles debugging simulated ipads with mac minis.
We're in an industry ten years behind so we're just getting into Big Data. Obviously the issue that we can't write working normal software hasn't been addressed but we'll see how it goes. I'm actually relatively optimistic.
> One day a consultant or another yesman will be able to check in and syphon precious resources with their pipe dream and I’ll watch six figures fly out of the window while my dev team struggles debugging simulated ipads with mac minis.
Six figures? Oh sweet summer child. :)
First you'll need to burn seven figures to have a Big 3 advise your leadership that you need this tech. Then you burn the six figures implementing it with a lower tier firm.
brick·bat
ˈbrikˌbat
noun
plural noun: brickbats
a piece of brick, typically when used as a weapon.
a remark or comment which is highly critical and typically insulting.
"the plaudits were beginning to outnumber the brickbats"
It feels like lately bots and AI are the biggest hype-train. Everybody wants bots. Bots for this, and bots for that. With natural language processing bolted on somehow.
Got a simple, defined flow that could just be a decision tree? Nope, we need natural language processing in a chatbot, we can't possibly present a menu.
I feel like I'm fighting the Infocom parser again.
>it’s sad to see a promising technology (in limited use cases) turn into a buzzword
The same thing happened to REST. Every "web interface" is supposedly REST now, yet the client and server are even more coupled than they would have been if the interface were implemented in SOAP!
And here I thought I was the lone voice in the wilderness. From Roy Fielding's original paper:
The client-stateless-server style derives from client-server with the additional constraint that no session state is allowed on the server component. Each request from client to server must contain all of the information necessary to understand the request, and cannot take advantage of any stored context on the server. Session state is kept entirely on the client
I've heard enough verbal gymnastics to fill a book trying to excuse how modern web apps aren't violating this condition.
Not alone. I find the problem most people have is no suitable example they can think of. The examples we have online are "starbucks as REST", etc. A better example is the greatest REST client ever made: the web browser. When Facebook updates their "app", I don't even need to restart my "client" to get the updated features. These days I start all "REST: you're doing it wrong" conversations with this.
The tech isn't going to die, it's just not going to change the world in any sexy way.
Maersk is using it for something as boring as secure claims for containers to fight corruption in shipping.
In government we're looking into running things like the land ownership registry and other public records on the tech. Not because it's hip, but because it'll save employee resources when we have to perform less audits, and because it'll speed response times.
Property title, availability of airspace, really any complex system that requires mutual cooperation (or at least awareness) could benefit from uniform distributed ledger technology.
For a comprehensive answer see Avi Spielman's thesis, in "Blockchain: Digitally Rebuilding the Real Estate Industry"
"The research to date leads to the following conclusions: A blockchain title recording system is the future of title record keeping and would provide immediate benefits over the current title recording system, with additional benefits accruing in the future as blockchain technology grows in acceptance. However, at the moment, these benefits do not yet outweigh the costs and challenges associated with implementing a prototype blockchain title registry system in Davidson County, or elsewhere in the country. That being said, steps can, and should be taken now to lay the foundation for a blockchain system."
I can't find an explanation in your excerpt nor in the paper that gives specific details as to how the blockchain is uniquely beneficial for property title management. I see some examples of how certain qualities of the blockchain could be beneficial, (e.g. property owners being identified by a private key), but you don't need a blockchain to get any of those benefits.
Avi Spielman, in "Blockchain: Digitally Rebuilding the Real Estate Industry" does a terrific job addressing and exploring "aspect(s)- recording property titles- by comparing the benefits and limitations of a blockchain with those of the current record keeping system."
And to the horror of most crypto-currencies enthusiasts, blockchain will likely end up being used as a tool just like SQL servers and distributed clusters, by large companies and governments instead of being the instrument of challenge to these established entities.
This progression already seems to be occurring. Recently the CEO of JP Morgan even derided Bitcoin as a scam, while JP Morgan promotes its own internally-developed blockchain Quorum.
Now why would a major financial entity want you to think external decentralized technologies are scams, and their in-house solution is fine and legitimate and secure.
There's an easy way to not be frustrated: just buy Bitcoin independently from what you're working on. If you understand what that means to own BTC 10 years from now, you know that malinvestments won't get you frustrated.
The sceptics in the shipping industry are plenty as well, though. And it has been awfully quite around that pilot. Many wonder if the real challenge is really trust or not just incompatible data formats and plenty of non-digitized data...
Back in 2000 I was on a team of eight, digitising a freight system. (Handling about 50% IIRC of all foreign air freight to and from Sweden.)
For a "parcel" of goods, I counted 17 paper copies of the same shipping form, being sent to and fro. Back then IATA also used a custom text field format instead of a standard XML format I think they use now.
So while this was a long time ago, I too expect shipping to be fraught with lots of weird edge cases.
> incompatible data formats and plenty of non-digitized data
This is exactly what many with a cursory knowledge seem to think a blockchain will solve. Unfortunately, these are generally challenges people have to talk about and resolve via mutual agreement and compromise; you can't simply throw code at the issue.
In the long run, countries which have fast tech adoption and strong logistic infrastructure will probably be the ones that will advance the field the fastest. It's exciting technology, but I so far don't see a lot of people using it in a practical way. We may be seeing China as the forerunner of blockchain technology, since there's immediate business advantages for their (enormous) manufacturing and logistics setup.
A lie has short legs: if you dive into private blockchain projects you will realize they are mostly proof of concepts.
This is not to say that ideas behind consensus, security, and smart contracts are not useful but you need to start with a concrete problem instead of adapting a fixed solution.
Having said this, it is interesting to explore a pluggable way to make agreements between parties and follow defined workflows for interoperability. The main barrier with implementing this idea is not technical but political since it is difficult to create agreements about this architecture between companies (e.g. banks).
Well done for sticking up for reason. I first got involved in Bitcoin in early 2011, but left the whole scene in 2015 because of the dwindling number of serious programmers and innovators and the increasing number of fraudsters and "marketers".
Like you say, there are some incredibly innovative uses for the blockchain (another excellent one is claiming and tracking digital works of art like visual arts and music), but using the blockchain as a simple database replacement is ludicrous.
If you don't mind expanding a bit, could you give some examples of areas where you think it has potential - I'm not really clued in enough at the moment to distinguish between real possibilities and snake-oil.
Nah, those bad uses won't kill the tech, but the bubble will burst. But yes, I also notice a lot of companies that are riding the blockchain train in scenarios where a central server would be fine, and all they'll end up with is a needlessly complicated solution to their problem.
Blockchains are the future, aka merkel trees are the future, aka git is the future. Put the world in source control. Distributed, trustless, decentralised source control.
Artificial and delusional scarcity of software derived database entries, of which a multitude of newer alternative service networks are being created every day?
So someone at Fidelity watched Mr Robot I think they missed some parts but lets see how this plays out...(starts thinking about moving investments away from Fidelity).
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Shameless plug, if you want to mine on nicehash using Linux, you can try https://github.com/hossbeast/autominer
You can connect to hubs that auto switch the mining algorithm to the most profitable one at the time.
Surprised it’s cost effective to mine with commodity desktops and retail power though. ;-)
It’s not as decentralized as he/they hoped??
(Though Vanguard is probably still a better choice regardless.)
Additionally, Fidelity offers index funds at a lower cost than Vanguard: https://www.fidelity.com/mutual-funds/investing-ideas/index-...
Also, Fidelity's index funds are loss leaders to retain funds that were flowing out to Vanguard.
That's irrelevant if they those gains are less than a competitor's discounts.
> Also, Fidelity's index funds are loss leaders to retain funds that were flowing out to Vanguard.
So?
Loss leaders are by their nature unprofitable and thus will go away as soon as they're not required.
Suppose if Vanguard disappears, then Fidelity will hike their rates up.
On the other hand, if Fidelity disappears, Vanguard won't hike their rates up because they won't bite the hand that feeds them since it's their own hand.
https://www.forbes.com/sites/greatspeculations/2015/01/13/re...
[1] https://www.bloomberg.com/news/articles/2016-12-02/fidelity-...
> If Vanguard's index funds are run at-cost, then how does Fidelity make by undercutting Vanguard's rates?
https://www.reddit.com/r/investing/comments/62fbk9/if_vangua...
https://www.fidelity.com/mutual-funds/investing-ideas/index-...
http://www.ft.com/cms/s/0/6663cd8c-410d-11e6-9b66-0712b3873a...
So yes, fidelity may not mix the two, but Fidelity is "losing focus" in their eyes.
https://personal.vanguard.com/us/insights/article/active-fun...
- How well the fund is run, and how representative it is of the index. A fund with high trading costs may underperform.
- Securities Lending policy, how risky it is and how much of the income is returned to the fund
- (In taxable accounts) Tax efficiency. Some funds from some vendors return a significant amount of capital gains and short-term dividends, which can cost several basis points in taxes a year.
In general, the first two elements can be approximated by comparing the performance of the fund to its benchmark over the same time period, and tax efficiency can be estimated by looking at details of past distributions.
In most cases, it wouldn't make sense to switch existing funds to another provider in a taxable account if switching would result in a large capital gain.
I'd expect all providers to get better at indexing over time and their performance after taxes to converge.
>In most cases, it wouldn't make sense to switch existing funds to another provider in a taxable account if switching would result in a large capital gain.
As long as the the funds track the same index then it's a Section 1031 like-kind exchange which does not trigger capital gains.
[0] https://www.irs.gov/newsroom/like-kind-exchanges-under-irc-c...
Inventory or stock in trade Stocks, bonds, or notes Other securities or debt Partnership interests Certificates of trust"
It represents the smallest fraction of 1 bitcoin you can use as an amount in a transaction, so they are the smallest (indivisible) units.
It's not really an important distinction, but maybe someone will find the history interesting.
http://groups.csail.mit.edu/mac/classes/6.805/articles/money...
(and OP seems factually correct: Satoshi was the inventor of Bitcoin).
Proof-of-work schemes like hashcash and bitgold are much closer to hitting on the central ideas that led to Bitcoin. It's like crediting Democritus with atomic theory -- yes, he's talking about the same thing, but in such a way that the final realization is so different as to be unrecognizable.
And it's not really a decimal; it's more properly "1 bitcoin" in the technical sense. 1BTC was later defined to be equal to 10^8 Satoshis because that seemed like a useful amount of money to track exchange rates for (though now it's about 10^4 too high.)
I'm sure OP knows this, I'm just being pedantic.
Buterin couldn't possibly have made it more complicated.
The surprising part for me was that, as a corollary to that, wallets with less than that amount have bitcoin in them which is potentially permanently removed from the total supply of BTC.
a lot of trading is quoted in satoshis instead of "x thousandth fractions of a bitcoin"
That being said, I also had a great laugh reading the article when it came to "200,000 satoshis". Although I totally believe her - it's hard to earn significant amounts of BTC via mining today without investing huge amounts of money and dealing with constricted ASIC supplies, so you need to have time and cash to blow at it. But she shouldn't have mentioned that number in the context of "yeah, our mining ops suddenly started to generate huge returns".
Most of the exchanges shut down their chat rooms but thats where it is mostly said, and other real time trading arenas where people talk. People say 200k/sat while reading .000200000 btc
but a satoshi also works in other quotes where other cryptocurrencies are the base unit as well. In an XMR/ETH market, the XMR would be quoted in X eth-sat or ethereum satoshis.
The GUIs use a variety of different metric base units and there is no agreement on the GUIs, that has nothing to do with the terms people use in speech, as they don't say "x thousandth of a bitcoin"
- All Bitcoin: ~500%
- Mix of top market: ~2800%
- All Strat: ~13500%
Meanwhile, stock investors call 12% a good year.
The crypto market is still niche. There are stocks that make 100-1000% performance. But the stock market is "saturated" for representing assets, equities and companies. So its growth is limited.
> The crypto market is still niche. There are stocks that make 100-1000% performance. But the stock market is "saturated" for representing assets, equities and companies. So its growth is limited.
so I do not see how my post was wrong. These are the numbers. With such numbers, it would be foolish to discard the crypto market as "too volatile" and stick with stocks.
There are crypto coins that did way better than Strat, but there was not enough volume to make a decent profit. Even Doge did 260%. The only "loser" is STEEM with a 80% ROI.
People/companies that are able to understand and accept the risk that comes from speculating on cryptocurrencies should consider doing so, because it is possible to make a profit, perhaps a significant one.
But if you're looking at the past and saying "wow, I should buy BTC because it made 1000% last year - it can't lose!" then you're ignoring a quite serious risk that volatile growth could change into volatile collapse in the future.
Traders don't look for "potential growth". In their frame of reference, that potential of growth is already "priced in".
Now if you disagree with that, it is another story.
Edit: replied to the wrong guy.
That way you can get potentially huge gains with little at risk.
They also have very high Sharpe ratios (the ratio between returns and volatility), though given crypto's short history we shouldn't trust that too much.
https://www.bletchleyindexes.com/blog/idx_perf_post
But should this stop you (or any investment firm) to seriously look at the profit potential here? What do you get for correctly calling the bubble in 3 years? Nothing.
Well, if you knew when the bubble was bursting, then there would be no problem!
Then someone says: "Look I told you so, I've been telling everyone for 2000 days now: This slot machine will crash one day!". And you say: "Ok. You were right. Guess the party couldn't last forever. Thanks for the warning!". Out of habit you play for 30 more days, but the rewards stay gone, so you exit with some nice profit.
Meanwhile, the other person knew of the existence of a highly profitable slot machine, while it was still profitable, but never actually played it, because they feared that one day it may not be profitable anymore.
Your example only works if you are regularly selling BTC as its worth increases. If you're just holding onto it, your gains are never realized.
https://www.youtube.com/watch?v=e6LOWKVq5sQ
But the downside of performing so well is that it is too easy to get distracted by the price and disregard the radical improvements that Bitcoin brings over legacy financial systems...
Besides, almost no one who buys a lottery ticket ends up winning millions, but everyone who bought and held bitcoins since 2010 is a winner.
So where are the 'winnings' of these magical 2010-era bitcoin holders coming from, if not from other people buying bitcoins?
There are equities that are up triple digits, including Nvidia...who is realistically the biggest winner in crypto mining.
Wrong. 1.5+ BILLION dollars' worth of bitcoins are sold and bought in aggregate daily on 100+ exchanges: https://coinmarketcap.com/currencies/bitcoin/#markets
It is. But that's not what partiallypro and I were discussing. We argued about whether selling "millions" would crash BTC or not.
«He's totally right»
Did you even read the link I posted? Even if you look at only the BTC/USD pair, $10M represents merely ~1% of the volume sold DAILY on the top 6 exchanges (~$800M). You would probably need to sell an order of magnitude more, so $100M, in a single day, to start affecting the markets significantly.
It's so small you have individual holders the community now calls whales who can individually manipulate the price with buy and sell walls; no individual can do anything remotely like that in the FX market. One because they don't have enough money, and two because such market manipulation is illegal.
You'd need to spread your purchase or sale out over the day to avoid massive slippage for an order that big because there just isn't enough liquidity to absorb it without the moving the price. 10 mill is about 2500 coins, go look at the order book on any exchange, a purchase that large is going to massively move the price, looks to be possibly 300-400 dollars you'd move the market with that one order. 50 million would certainly crash/bubble the market.
The OP mentioned selling in a day, not at once: «I doubt you could liquidate millions of dollars of bitcoin IN A DAY...» This is what I commented on.
You changed the topic and started talking about selling all at once, which would of course eat a bunch of bids. However even doing this wouldn't "crash the market." The order books are deeper than you think. It's hard to find examples, because it's plain dumb to market-sell this much in one order. But I found a ~1150 BTC sell on Bitstamp around 3pm on September 13 and it barely moved the price: https://bitcoincharts.com/charts/bitstampUSD#rg5zig1-minzczs...
It would eat even lower bids on exchanges with less volume/thinner books, but still wouldn't crash the market. For example some idiot sold 1200 BTC in two market-sells of 600 BTC each, 30min apart yesterday on Gemini; and although it ate all the bids from $4100 to $3400, twice!, it didn't "crash the market". Other exchanges didn't react. Subsequent trades resumed exactly where the price was before ($4100).
Some people told me that I'm confusing good investment decisions with high volatility ones, but what do they know? They're just stupid investors! /s
Without the service, there is nothing.
Mining provides economic cost of reorg as a product, something people in the bitcoin space call "security."
> running a service
i don't know how to put it for you mate.. service can be a product? you know, like this site where people friend each other and share shit nobody cares about, what's it called.. facebook?
Minting algorithms have mostly generated the majority of the entire supply in the first few months, allowing anyone with existing capital to purchase majority stakes or mining power.
Every crypto article makes the same vague claims about the potential of non-specific blockchain technology. I'm surprised there was no mention of replacing Visa in this one as well.
With Ripple, realtime clearing and settlement happens automatically even between currencies. If my bank and the vendors bank both use ripple, I can use USD to pay the vendor EUR in real time, and the transaction completes in seconds.
The chief value in blockchain seems to be in getting people to agree to do something at all.
Yes... as far as I'm aware, most (all?) other non-blockchain distributed ledgers require complete trust between parties. Its hard enough for two banks to trust each other completely, let alone all banks to trust all other banks. The old way of doing things is to either trust a central bank completely, which is easier to do, but far from distributed, or to trust a third party with a days worth of transfers and settling at the end of the day. Still not distributed, but requires less trust.
> The chief value in blockchain seems to be in getting people to agree to do something at all.
Exactly!
Blockchain technology is essentially nothing more than a cryptographically secure distributed ledger. There's probably other ways of having a secured distributed ledger without technically being a blockchain, and I'd be interested in hearing about them, but I'm not aware of their existence at the moment. Either way, I'm not sure why there's so much pushback on blockchains?
Doesn't it just require trust of a single party for settlements (or any number of independent settlements parties)? Which you still sort of require in the ripple model because ripple owns a crap ton of it's own coinage (60% of the pot).
If you're talking about two banks... There are thousands of banks out there all with varying levels of trust, and those banks all need to transfer funds between each other on a daily basis. Most banks only have direct relationships with a handful of other banks.
> Which you still sort of require in the ripple model because ripple owns a crap ton of it's own coinage (60% of the pot).
Yes, they own 60% of XRP available, but if you're settling a transfer between USD/EUR then you only need to trust ripple for the length of time for that settlement to happen.
Which for a bank would be all the damn day because they wouldn't just be doing one transaction every 2 months.
I know for a fact that Bitcoin's transaction time is not "real time," so why would Ripple's be?
Ripple doesn't use proof of work, it relies on a web of trust. So, in order to transfer money from Bank A to Bank B, it relies on Bank A to have some path to Bank B that is trusted. If Bank A and Bank B don't trust each other, but both trust Bank C, then the money is routed through Bank C.
Not sure what you mean by identity verification, if you're talking about for the customers, then they'd still need to have their identity verified at the bank (for purposes of Ripple, a bank is a ripple Gateway, but not all gateways are banks). Honestly, I'm an armchair expert in money transfer systems -- pretty familiar with Ripple, but less familiar with other systems.
I can forgive all the business guys for that thinking given articles like these, but the tech guys who were fanning the fires of that fantasy and telling me I didn't understand blockchain....
I got the distinct impression that there is a growing cottage industry of tech consultants and outsource companies that realize that if they can get their clients to "do it on the blockchain" they will be able to bill 10x as much for a project that has a current very good solution (and relatively fast to implement solution). And for which blockchain won't be a benefit. But the client may very well be able to get more VC money, so it's starting to turn blockchain 'skeptics' into martyrs.
And the most frustrating thing is that the innovation in Satoshi's paper (bringing together in a unique way prior known solutions) is really exciting and there are very good uses for blockchain. The international shipping companies using blockchain to track shipping container provenance strikes me as really, really perfect.
The bad uses of blockchain is going to kill the tech before it's had time to mature naturally and find its place.
As someone who has been involved in blockchain research since 2011, it’s sad to see a promising technology (in limited use cases) turn into a buzzword thrown around by the many speculators and scam artists peddling vaporware and pumping crypto prices.
http://www.gartner.com/smarterwithgartner/top-trends-in-the-...
Executives want to apply Deep Learning to everything and anything they can get their hands on. The results most of the time are underwhelming and could be had with a much simpler set of tools. Just wondering how long before Deep Learning goes into trough of disillusionment.
One day a consultant or another yesman will be able to check in and syphon precious resources with their pipe dream and I’ll watch six figures fly out of the window while my dev team struggles debugging simulated ipads with mac minis.
Six figures? Oh sweet summer child. :)
First you'll need to burn seven figures to have a Big 3 advise your leadership that you need this tech. Then you burn the six figures implementing it with a lower tier firm.
My WotD
Got a simple, defined flow that could just be a decision tree? Nope, we need natural language processing in a chatbot, we can't possibly present a menu.
I feel like I'm fighting the Infocom parser again.
I still remember my manager getting very excited about XBRL in 2007.
The same thing happened to REST. Every "web interface" is supposedly REST now, yet the client and server are even more coupled than they would have been if the interface were implemented in SOAP!
The client-stateless-server style derives from client-server with the additional constraint that no session state is allowed on the server component. Each request from client to server must contain all of the information necessary to understand the request, and cannot take advantage of any stored context on the server. Session state is kept entirely on the client
I've heard enough verbal gymnastics to fill a book trying to excuse how modern web apps aren't violating this condition.
Maersk is using it for something as boring as secure claims for containers to fight corruption in shipping.
In government we're looking into running things like the land ownership registry and other public records on the tech. Not because it's hip, but because it'll save employee resources when we have to perform less audits, and because it'll speed response times.
"The research to date leads to the following conclusions: A blockchain title recording system is the future of title record keeping and would provide immediate benefits over the current title recording system, with additional benefits accruing in the future as blockchain technology grows in acceptance. However, at the moment, these benefits do not yet outweigh the costs and challenges associated with implementing a prototype blockchain title registry system in Davidson County, or elsewhere in the country. That being said, steps can, and should be taken now to lay the foundation for a blockchain system."
dci.mit.edu/assets/papers/spielman_thesis.pdfdci.mit.edu/assets/papers/spielman_thesis.pdf
Avi Spielman, in "Blockchain: Digitally Rebuilding the Real Estate Industry" does a terrific job addressing and exploring "aspect(s)- recording property titles- by comparing the benefits and limitations of a blockchain with those of the current record keeping system."
dci.mit.edu/assets/papers/spielman_thesis.pdfdci.mit.edu/assets/papers/spielman_thesis.pdf
Now why would a major financial entity want you to think external decentralized technologies are scams, and their in-house solution is fine and legitimate and secure.
They did it with 3D printing, they did it with VR, and now they're doing it with blockchain.
And there’s still the risk of a crash and switch in that long of a timeframe.
I bet there’s more money to be had at cryptocurrency arbitrage
For a "parcel" of goods, I counted 17 paper copies of the same shipping form, being sent to and fro. Back then IATA also used a custom text field format instead of a standard XML format I think they use now.
So while this was a long time ago, I too expect shipping to be fraught with lots of weird edge cases.
This is exactly what many with a cursory knowledge seem to think a blockchain will solve. Unfortunately, these are generally challenges people have to talk about and resolve via mutual agreement and compromise; you can't simply throw code at the issue.
Is provenance in general a good usecase? e.g. chain of custody for evidence / drug testing / food labelling?
This is not to say that ideas behind consensus, security, and smart contracts are not useful but you need to start with a concrete problem instead of adapting a fixed solution.
Having said this, it is interesting to explore a pluggable way to make agreements between parties and follow defined workflows for interoperability. The main barrier with implementing this idea is not technical but political since it is difficult to create agreements about this architecture between companies (e.g. banks).
Like you say, there are some incredibly innovative uses for the blockchain (another excellent one is claiming and tracking digital works of art like visual arts and music), but using the blockchain as a simple database replacement is ludicrous.
https://link.smartcontract.com
Artificial and delusional scarcity of software derived database entries, of which a multitude of newer alternative service networks are being created every day?