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The Sceptics thread.

JohnnyFlash

Starting this so non-believers in cryptocurrencies, and blockchain as a tech, can have a place to discuss why.

It has become apparent to me that getting involved in other threads is 'shítting on the parade' of investors in crypto. And that was never my intention. If you all end up loaded as a result of your investments, then more power to you.

However, there is another perspective on all this. Call it a cynical eye, call it begrudgery , call it fundamentally bearish.

I'd hope that this thread becomes a place where we can discuss these things in a manner that boards.ie has come to expect.

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sexmag

JohnnyFlash wrote: »

https://www.bloomberg.com/news/articles/2018-05-24/bitcoin-manipulation-is-said-to-be-focus-of-u-s-criminal-probe

U.S. Launches Criminal Probe into Bitcoin Price Manipulation

The Justice Department has opened a criminal probe into whether traders are manipulating the price of Bitcoin and other digital currencies, dramatically ratcheting up U.S. scrutiny of red-hot markets that critics say are rife with misconduct, according to four people familiar with the matter.

I stoped reading after that, at least site who these "4" people are, could be any person who reads a paper :rolleyes:

JohnnyFlash

sexmag wrote: »

The Justice Department has opened a criminal probe into whether traders are manipulating the price of Bitcoin and other digital currencies, dramatically ratcheting up U.S. scrutiny of red-hot markets that critics say are rife with misconduct, according to four people familiar with the matter.

I stoped reading after that, at least site who these "4" people are, could be any person who reads a paper :rolleyes:

It's Bloomberg, dude, not the National Enquirer. It comes only days after Phil Potter packed his bags and left Tether/Bitfinex. You could make some working assumptions as to why that might be the case.

Tether is 2.5 billion fake dollars being used by Bitfinex and Binance to manipulate the price of Bitcoin via altcoins. On days where volumes are low, that's pretty much all the money providing liquidity in crypto.

makeorbrake

JohnnyFlash wrote: »

It comes only days after Phil Potter packed his bags and left Tether/Bitfinex. You could make some working assumptions as to why that might be the case.

Tether is 2.5 billion fake dollars being used by Bitfinex and Binance to manipulate the price of Bitcoin via altcoins. On days where volumes are low, that's pretty much all the money providing liquidity in crypto.

I disagree with you on plenty - but the exception is Tether. Phil Potter found himself listed in the Paradise Papers alongside another Tether co-founder.

I hope there is a criminal investigation and that the focus of that investigation is Tether. It's a boil that needs to be lanced for the good of crypto in the long run.

sabat

sexmag wrote: »

There's is potentionally a massive influx of new money coming (which is something johnny constantly contests about)

I feel the current drop is the whales manipulation of the market to get back in at lower prices before the new money comes in and brings everything up again.

So you're waiting for "new money" to enter the space to bring prices back up. Dude you are literally describing a ponzi scheme.

lostboy75

sabat wrote: »

Dude you are literally describing a ponzi scheme.

Or any stock exchange,

Chancer3001

sabat wrote: »

So you're waiting for "new money" to enter the space to bring prices back up. Dude you are literally describing a ponzi scheme.

How?

Say I buy Apple shares. Unless new money and new people come trying to buy my shares, the price won t go up.

The price doesn't just go up cos they invent something good.
It goes up cos after the invention more people want their shares.

JohnnyFlash

http://www1.icsi.berkeley.edu/~nweaver/papers/cryptorisks.pdf

Devastating article on the futility of crypto currency. Now this isn’t written by some chancer on Medium or Reddit, but by a professor from Berkeley writing in the journal ‘Communications of the ACM’. Which I’ve found out is considered the premier computer science journal in the world.

makeorbrake

JohnnyFlash wrote: »

http://www1.icsi.berkeley.edu/~nweaver/papers/cryptorisks.pdf

Devastating article on the futility of crypto currency. Now this isn’t written by some chancer on Medium or Reddit, but by a professor from Berkeley writing in the journal ‘Communications of the ACM’. Which I’ve found out is considered the premier computer science journal in the world.

The first thing to say Johnny - is that there isn't a day that goes by over the past 6 months where some expert doesn't come out on one or other side of the divide on crypto. There are respected people voicing their opinions on each side of the debate - not just 'some chancer on Medium or Reddit' as you put it.

I read the article. There's nothing new here. In some cases, he identifies issues which developers are currently working on - OR - that have been solved in blockchain 2.0 (ethereum) - OR - solved in blockchain 3.0 (EOS, Cardano, IOTA, etc.).

The Steve Jobs example re. stolen credit card is a flaw in the conventional system - not with crypto!

He states: "The only way Bitcoin could reduce its power consumption is through a massive price collapse".
Not true. What of Lightning Network and similar off-chain solutions! Not even a mention.

On censorship resistance he states that with conventional systems, nobody could possibly transfer money to wikileaks - as if that was a bad thing! It's central to the establishment of bitcoin in the very first instance. Of course, he highlights criminal activity - but never once acknowledges that there may be a good side to censorship resistance! How is that equitable?

On storing coin in an online wallet, you don't have to use one! Again, does he once mention hardware wallets? NO.

On the deflationary argument, it has been rubbished many times now. It's inflationary currencies like we have right now that pick peoples pockets..and the FIAT in your pocket is losing value as you read this. A system that encourages people to save vs. the current system where large sections of society are up to their eyeballs in debt!

On systemic risks, is he going to come out and declare that when we have government issued centralised crypto's such as usd coin, etc. (as that day is coming)?...because that will be a hell of a lot more risky!

What is clear from the article is that he has not acknowledged any redeeming factors whatsoever - nor work that's being done to address some of the flaws that he outlined. That's irresponsible at best - but seems prejudiced at worst.

smacl

JohnnyFlash wrote: »

http://www1.icsi.berkeley.edu/~nweaver/papers/cryptorisks.pdf

Devastating article on the futility of crypto currency. Now this isn’t written by some chancer on Medium or Reddit, but by a professor from Berkeley writing in the journal ‘Communications of the ACM’. Which I’ve found out is considered the premier computer science journal in the world.

Communications of the ACM is indeed one of the premier CS journals out there, though if you take the time to have a look at the articles on this journal that relate to blockchain, you'll note the majority are positive. It is a very busy (and IMHO excellent) journal, but it carries a huge amount of material and many often contradictory views. If you decide to cherry pick and search hard enough, you'll find negative views on many subjects.

kaymin

This event raises doubt about the integrity of blockchain:

https://www.siliconrepublic.com/enterprise/bitcoin-51-percent-attack-crypto-jack

'The method used by the malicious miners is known as a ‘51 per cent attack’ whereby the attacker gains control of the majority of the network’s total computing power.

With this power, the attacker then can reverse their own transactions, effectively spending the same coins twice and undermining the entire transparent nature of the blockchain.

The resulting attack strikes at the whole point of cryptocurrencies in terms of transparency and authenticity, making it hard to keep track of transactions.'

smacl

kaymin wrote: »

This event raises doubt about the integrity of blockchain

Not exactly new and not something to be too worried about on larger coins or POS coins. Pretty weak article too IMHO, far better write-up of the same event here.

grindle

kaymin wrote: »

This event raises doubt about the integrity of blockchain

This is one of the main reasons BTC is so valuable. Performing a prolonged attack against it is prohibitively expensive. Doesn't discount massively distributed blockchain at all.

JohnnyFlash

grindle wrote: »

This is one of the main reasons BTC is so valuable. Performing a prolonged attack against it is prohibitively expensive. Doesn't discount massively distributed blockchain at all.

It’s prohibitivly expensive because it uses a morally repugnant amount of electricity to enforce that level of security of the chain.

unkel

You're fighting the wrong fight, JohnnyFlash!

Maybe use some of your considerable drive and intellect to get us all to use more renewable electricity? Scotland is aiming for 100% renewable electricity by 2020. They won't make it, but it's a glorious goal and they won't be a million miles off. It's even easier for use here in Ireland as our wind is almost as good and our sun is much better.

kaymin

unkel wrote: »

You're fighting the wrong fight, JohnnyFlash!

Maybe use some of your considerable drive and intellect to get us all to use more renewable electricity? Scotland is aiming for 100% renewable electricity by 2020. They won't make it, but it's a glorious goal and they won't be a million miles off. It's even easier for use here in Ireland as our wind is almost as good and our sun is much better.

You still have to pay for renewable energy.

It's a fair point though - if high expense is the main barrier to 51% hacks then doesn't that damage the prospects for the whole crypto / blockchain project?

unkel

kaymin wrote: »

You still have to pay for renewable energy.

Sure, but once you use 100% renewable electricity, the argument that cryptos use a "morally repugnant amount of electricity" is gone.

makeorbrake

kaymin wrote: »

This event raises doubt about the integrity of blockchain:

https://www.siliconrepublic.com/enterprise/bitcoin-51-percent-attack-crypto-jack

For anyone that follows crypto, the idea of a 51% attack is known to all. Clearly it can be an issue - but it's not an issue for networks that are big enough eg. Bitcoin.

kaymin wrote:

It's a fair point though - if high expense is the main barrier to 51% hacks then doesn't that damage the prospects for the whole crypto / blockchain project?

You're making the mistake of lumping all PoS/3rd generation crypto's in with that as well. They're not expensive to run.

JohnnyFlash wrote:

It’s prohibitively expensive because it uses a morally repugnant amount of electricity to enforce that level of security of the chain.

The important point here => 'In Your Opinion'.

You don't see the need for a totally immutable blockchain such as bitcoin but many of us here do. Will there be space for numerous such crypto's - the same as bitcoin - probably not - but the argument is being made that there's space for one. Of course as above, many of the other crypto's are less energy intensive. I think christmas tree lights are a waste, you think the btc blockchain is a waste yet it fulfils an important function.

JohnnyFlash

unkel wrote: »

Sure, but once you use 100% renewable electricity, the argument that cryptos use a "morally repugnant amount of electricity" is gone.

I think this sums up the grotesque nature of bitcoin mining in a slightly grotesque way.

Bitcoin mining is about completing an enormous amount of simple sums in the hope of solving a cryptography puzzle. You are rewarded for your commitment by getting free bitcoins. This promotes centralisation - the bigger you are the more likely you are to get the free bitcoins, and it also promotes the use of the cheapest forms of electricity to give you the competitive edge. Mining ends up in an evolutionary arms race — a Red Queen’s race, where you run as fast as you can to stay in the same place — leading to ever-increasing power usage, for about seven transactions a second maximum, and two to four in practice. Bitcoin will get more inefficient with time.

With every other technology, the economic motivation is to reduce energy costs. But with Bitcoin, you make your bitcoins by spending as absolutely much energy as you can throw at the problem.More efficient mining hardware comes out all the time — but it’s thencompeting against other mining hardware of the same model, and the efficiency improvements don’t advance anything.

Bitcoin mining already uses more electricity than the entire island of Ireland (home to some pretty big DC’s and firms like Intel). For what? So people can speculate on the price? It has no utility, is dreadful as a form of payment, is not anonymous, and is having an immediate impact on the environment. Hell, there’s figures saying that bitcoin mining energy consumption will overtake all solar PV generation (IN THE WORLD!!!) by the end of 2019.

GUBU - Grotesque, Unbelievable, Bizzare, Unprecedented.

sexmag

JohnnyFlash wrote: »

I think this sums up the grotesque nature of bitcoin mining in a slightly grotesque way.

Bitcoin mining is about completing an enormous amount of simple sums in the hope of solving a cryptography puzzle. You are rewarded for your commitment by getting free bitcoins. This promotes centralisation - the bigger you are the more likely you are to get the free bitcoins, and it also promotes the use of the cheapest forms of electricity to give you the competitive edge. Mining ends up in an evolutionary arms race — a Red Queen’s race, where you run as fast as you can to stay in the same place — leading to ever-increasing power usage, for about seven transactions a second maximum, and two to four in practice. Bitcoin will get more inefficient with time.

With every other technology, the economic motivation is to reduce energy costs. But with Bitcoin, you make your bitcoins by spending as absolutely much energy as you can throw at the problem.More efficient mining hardware comes out all the time — but it’s thencompeting against other mining hardware of the same model, and the efficiency improvements don’t advance anything.

Bitcoin mining already uses more electricity than the entire island of Ireland (home to some pretty big DC’s and firms like Intel). For what? So people can speculate on the price? It has no utility, is dreadful as a form of payment, is not anonymous, and is having an immediate impact on the environment. Hell, there’s figures saying that bitcoin mining energy consumption will overtake all solar PV generation (IN THE WORLD!!!) by the end of 2019.

GUBU - Grotesque, Unbelievable, Bizzare, Unprecedented.

You are aware Bitcoin isn't the only crypto currency in the world and as previous posters have said there are alt coins that use far less electricity, what angle do you prefer to take about why you are here?
That you find the cryptocurrency mentality interesting
Or
You care for the environment and want to try and help by lambasting Bitcoin.

For someone who doesn't like or even really want cryptos around you spend an awful amount of time in these forums putting them down, would your energy not be better spent trying to help the environment, maybe you could teach a class on blockchain and cryptos as you seem to have an extensive knowledge about it, put it too good use

JohnnyFlash

sexmag wrote: »

You are aware Bitcoin isn't the only crypto currency in the world and as previous posters have said there are alt coins that use far less electricity, what angle do you prefer to take about why you are here?
That you find the cryptocurrency mentality interesting
Or
You care for the environment and want to try and help by lambasting Bitcoin.

For someone who doesn't like or even really want cryptos around you spend an awful amount of time in these forums putting them down, would your energy not be better spent trying to help the environment, maybe you could teach a class on blockchain and cryptos as you seem to have an extensive knowledge about it, put it too good use

I’m aware there are other coins, and that some are claiming that they use less power because they use different forms of proof. Any proof of work model will always result in a power-consumption arms race though, as you are rewarded based on the amount of work you complete - more energy consumption = more reward. So proof of work is doomed. Having more power is great in a Formula One car. It’s absolutely futile as a proposed method of payment, or store of value though. That’s why I believe the price of Bitcoin will collapse.

I spend around 10-15 minutes on this forum about twice a week. Same as I do on the GAA forum. I’m Bringing some much-needed reality to the place - the rest of it appears to be an almost religious fervour in the power of crypto currencies. Finally, I don’t think it belongs in investing. It’s gambling.

rapul

Johnny your just a broken record at this stage

JohnnyFlash

rapul wrote: »

Johnny your just a broken record at this stage

Do you care about the power consumption of Bitcoin? Ethereum isn’t much better. That Butterin guy keeps going on about different proof methodologies, but no white smoke? The other coins aren’t being used at all in any meaningful way. Is the damage to the environment worth it, and what makes it worthwhile? What social or economic justification is there for each bitcoin transaction using 300 kWh of power (Unkel can tell you how much power that is).

https://www.cell.com/joule/fulltext/S2542-4351(18)30177-6

50 years of Solar PV research wiped away in 12 months just so people can trade on the speculative price of coins. And the coins aren’t evenly distributed. The ‘whales’ control a disproportionate amount of the coins.

Pintman Paddy Losty

Speaking of that Butterin lad, tried to watch a video of his the other day.

What a weird looking dude. Looks and sounds like something from star trek. Couldn't finish the video.

makeorbrake

JohnnyFlash wrote: »

I’m aware there are other coins, and that some are claiming that they use less power because they use different forms of proof.

How do you mean 'claim'? Are there no coins within the top 10 that everyone accepts have a minimal energy usage?

JohnnyFlash wrote: »

Do you care about the power consumption of Bitcoin?

I do - and I'd prefer if btc didn't have such an energy usage. However, I also believe that the world needs one totally immutable blockchain.

JohnnyFlash wrote: »

Ethereum isn’t much better. That Butterin guy keeps going on about different proof methodologies, but no white smoke?

I'm sorry that crypto's are not being developed fast enough for you!
Otherwise, crypto is not confined to btc and eth.

Pintman Paddy Losty wrote: »

Speaking of that Butterin lad, tried to watch a video of his the other day. What a weird looking dude. Looks and sounds like something from star trek. Couldn't finish the video.

So now you lower yourself to attacking how a major contributor to the development of crypto looks.....classy.

JohnnyFlash

Pintman Paddy Losty wrote: »

Speaking of that Butterin lad, tried to watch a video of his the other day.

What a weird looking dude. Looks and sounds like something from star trek. Couldn't finish the video.

He also has some very questionable views.

makeorbrake

JohnnyFlash wrote: »

He also has some very questionable views.

So he thinks a little differently - I don't think that's fair or reasonable of you to try and sully him because he had the balls to express an alternate view. He is not condoning it by stating what he stated (and lets not get into it - this is a crypto thread!).

JohnnyFlash

makeorbrake wrote: »

How do you mean 'claim'? Are there no coins within the top 10 that everyone accepts have a minimal energy usage?

I do - and I'd prefer if btc didn't have such an energy usage. However, I also believe that the world needs one totally immutable blockchain.
I'm sorry that crypto's are not being developed fast enough for you!
Otherwise, crypto is not confined to btc and eth.

So now you lower yourself to attacking how a major contributor to the development of crypto looks.....classy.

Most of the coins just aren’t being used. They claim they can process thousands of transactions per second, using minimal amounts of electricity. But they’ve shown no scale. Most of them are pre-mined coins, no daily activity apart from low-volume trading, none being used in real life - Monero is PoW. There’s no other proof methodology being used in anger. The only one being used is Proof of Work, and that rewards the participants by using as much power as possible.

Pintman Paddy Losty

JohnnyFlash wrote: »

He also has some very questionable views.

Jesus. Creepy f*cker! And hes supposed to be a leading light in crypto. Not surprised. Plenty of the early dark web adopters were paedos.

makeorbrake

Pintman Paddy Losty wrote: »

Jesus. Creepy f*cker! And hes supposed to be a leading light in crypto. Not surprised. Plenty of the early dark web adopters were paedos.

It was people like you that said the very same thing about web 1.0 back in the day - of the space and of the people. There's only one degenerate here (or maybe two...) because what is disgusting is to try and tar and feather his character when all that quote suggests is that he dared to take an alternative viewpoint (without in any way condoning the acts of those that engage in said activity).

And as to his point by the way....sure the subject area that he chose to give as an example makes us all uncomfortable without doubt. However there is merit in his point. If we all were judged on what we thought all day every day, every single one of us would be locked up.

Taking you two as a case in point, I'm pretty confident that your interest in crypto is far from holistic. i.e. it's not just that there's a possibility that you believe it has no value - it's that you do NOT want it to succeed. That is 100% clear to me.

makeorbrake

JohnnyFlash wrote: »

Most of the coins just aren’t being used. They claim they can process thousands of transactions per second, using minimal amounts of electricity. But they’ve shown no scale.

They have set out methodology and whilst I accept they have yet to be roadtested, the belief right now is that they are likely to be capable of both scaling and doing so energy efficiently.
You act like you know nothing but you know damn well that these coins have yet to be fully tested - and can't be until their networks reach the required size.

JohnnyFlash wrote: »

Most of them are pre-mined coins

I'm talking about serious projects - not **** coins. Again, you act like you don't know - but you know well....and all of the relevant projects have not involved pre-mining.

JohnnyFlash wrote: »

There’s no other proof methodology being used in anger. The only one being used is Proof of Work, and that rewards the participants by using as much power as possible.

There are other proof methodologies. Even PoW is not being used at scale - so why even bother making a distinction.

Again, I'm sorry if the space is not developing at the lightning pace you require. Time and time again, we have seen 'sceptics' judge crypto projects with no accommodation given to the fact that they are incomplete. They are all incomplete - every single one of them - and work is being carried out worldwide on every single one of them every day of the week.

...in the same way as the web developed.