flavor of the year 2018 shall be the IOT (Internet of Things) :p:p:p
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Bitcoin & cyptocurrencies
- Thread starter zhihau
- Start date
flavor of the year 2018 shall be the IOT (Internet of Things) :p:p:p
the current blockchain technology has limitations and needs to be improved. one that is already mentioned is the long average duration or timestamps between blocks. very challenging as bitcoin block size is limited to only 1mb making it tough to scale in terms of transactions per second and the total number of bitcoins is hardcoded with an asymptote of 21m due to technical limitation in the data structure of the blockchain. with storage type of transaction output being integer-based, the total number of bitcoins is exactly a tad under 21m at 20,999,999.9769. again, the 69 number is omnipresent. :p bitcoin is no longer a stable, scalable, usable currency such as the usd for the masses but has becum a limited resource like rare earth materials or precious metals. and there's fuzzy math, oops i mean cryptography, all buried in here.
ipv6 and iot implementations are well underway and independent of blockchain. the main issue has to do with isp's handling both ipv4 and ipv6 packets simultaneously on the same network with nat(ting) and for tunneled traffic massive fragmentation occurs with massive reassembly issues, especially ipv6 packets that are jumbo. mucho packet loss and retransmits especially with tcp. udp rocks!
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Without the backing of governments and central banks, how is bitcoin going to be managed as a currency of transaction? Who ultimately controls the supply of bitcoin ?
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was looking at IOT & IPv6 as a conduit to attain critical mass of items online, hence making crytocurrency an easier option for subscription of sort. Net neutrality gone down for fucks and it's gonna be a field day for capitalists :p:p:p
bitcoin as a fluid currency is an epic failure as it is limited in supply and circulation due to the total number of 21m and there’s a block size limit of 1mb making transactions very slow and cumbersome. it has becum an investment vehicle for investors to hoard and speculate due to its limited supply.
it will have to be a different cryptocurrency that solves or improves on the limits of the bitcoin blockchain method. either create a new genesis block that is more nimble for a new cryptographic protocol or do a hardfuck, oops i mean hardfork, of the current blockchain cryptographic protocol. a reason why top gun cryptographers are now in demand in sillycon valley, not for hashcash encryption methodologies (that is open source and done) but for dreaming up the new (perfect) genesis block that spawns a better blockchain and can be used for myriad of applications other than cryptocurrency.
The whole idea from start to finish was avoid any form of Government and Institutional or Central control. The controls are based on the technology. Amazingly governments were the first to grasp the technology and most have some pilots
As to Bitcoins, you might want to read up on the mining and how the supply is brought online.
As to Bitcoins, you might want to read up on the mining and how the supply is brought online.
You alluded to the fact that bitcoin has hardfucked, hardfork twice already. Its not 21mil, its more like 63mil now.
total bitcoins in circulation hasn't reached 18m yet. by its protocol and design, reward for adding a block (through mining) is halved every 210k blocks (approximately 4 years). eventually the reward in terms of bitcoins will decrease to 0, when the limit of 21m is reached, estimated at the year 2140. transaction fees will still be rewarded after that for record keeping. the 21m is hardcoded due to limitation in the data structure in the blockchain as explained earlier. there's no agreement nor consensus on a hardfuck, oops hardfork yet on the blockchain. that debate for a hardfork is only for the 1mb block size limit to be expanded to a much larger size in order to increase the transaction rate, not on the total number of bitcoins.
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How bitcoins became worth $10,000
A few years ago, people thought Bitcoin was a joke. Now it’s worth billions.
TIMOTHY B. LEE - 11/29/2017, 7:40 AM
Enlarge
Aurich / Getty
200
On Tuesday evening, the value of one bitcoin shot above $10,000. It has been a remarkable run for a currency that was only worth about $12 five years ago.
The run has been particularly remarkable because it's still not clear what Bitcoin is useful for. During its early years, the cryptocurrency garnered a lot of optimistic talk about how it would disrupt conventional payment networks like MasterCard or Western Union. But almost nine years after Bitcoin was created, there's little sign of it becoming a mainstream technology. Few people own any bitcoins at all. Even fewer use it as a daily payment technology.
Yet that hasn't prevented the cryptocurrency's value from zooming upward. One factor driving Bitcoin's growth has been the emergence of a broader cryptocurrency ecosystem. Bitcoin serves as the reserve currency for the cryptocurrency economy in much the same way that the dollar serves as the main anchor currency for international trade.
In this piece, we'll explain the key innovation that set Bitcoin apart from all previous electronic payment schemes. We'll look at how Bitcoin won over regulators and venture capitalists to become a significant part of the global financial system. And we'll examine the cryptocurrency boom of the last year that has helped drive Bitcoin's value into the stratosphere.
While we can tell the story of Bitcoin's rise and point to some of the factors that have pushed its value upward, we can't really explain why the currency's value goes up or down during a particular day, week, or month. In particular, bitcoins have more than doubled in value since the start of October, which is hard to explain with anything other than speculative mania. People thinking about trying to get in on the Bitcoin boom should think carefully about the potential downside and not invest any money they can't afford to lose.
Bitcoin was the first truly decentralized electronic payment network
Cypherpunks have dreamed of fully decentralized electronic payment systems for decades. The potential for cryptographically secure electronic money became obvious after the invention of digital signatures using public-key cryptography in the 1970s.
But efforts to create practical digital cash schemes were bedeviled by something called the double-spending problem: how to prevent someone from sending the same digital coins to two different people. Preventing this requires a shared ledger that records all transactions. And until 2008, no one had figured out a way to do this without relying on a central authority to maintain and update the ledger.
Then someone calling himself Satoshi Nakamoto proposed an approach that initially seemed a little crazy: just have everyone on a peer-to-peer network keep a copy of every transaction, forever. Obviously, that's not the most efficient way to design a payment network, but a transaction doesn't need to take up very much space—and bandwidth and storage space get cheaper every year.
FURTHER READING
Bitcoin: inside the encrypted, peer-to-peer digital currency
The key to Nakamoto's scheme was a clever, fully decentralized way to reach a consensus about the order of transactions within the blockchain, Bitcoin's transaction ledger.
Certain nodes on Bitcoin's peer-to-peer network, known as miners, compete for the right to add the next block to the Bitcoin blockchain. Using brute force, they race to find a block whose SHA-256 hash value is below an arbitrary threshold (known as the difficulty). Once a node finds a block that meets the criteria, it announces the new block to other nodes on the network. Others incorporate the new block into their copy of the blockchain and then begin the race anew.
Occasionally, two miners discover blocks close enough together that the network doesn't agree about who was first. Only one block can be accepted by the network. But which one? The network decides by moving on to the next round of the race. Every miner starts looking for a second new block building on one of the two rival blocks in the previous round. When someone finds a new block, it will include a hash value pointing back to one of the previous blocks. Once this happens, both the newly discovered block and the preceding block its creator chose become part of the official blockchain. The other, competing block gets discarded.
In theory, this could happen multiple times—two nodes could discover blocks simultaneously in the second round, deepening uncertainty about which chain is the legitimate one. But if nodes are being honest, this situation won't last for long.
Enlarge / This diagram shows how the Bitcoin network resolves disagreements over the next block in the blockchain. The network always works from the longest chain. When a miner discovers the orange block in step 5, it points back to the green and violet nodes, cementing their status as an official part of the blockchain. Then the red and light-blue nodes are discarded by the network.
Timothy B. Lee / Ars Technica
Nodes are programmed to always build on top of the longest chain—on the block with the largest number of predecessors. So as soon as someone discovers a block that makes its chain longer than other, rival chains, everyone else has a financial incentive to abandon other chains and work from the longest one. In the image above, nodes will abandon the red and light-blue blocks as soon as the orange block is announced in step five, making the green and violet blocks into consensus picks.
Everyone has an incentive to always work from the current longest block because the creator of a block gets to award itself a fixed number of newly created bitcoins—currently 12.5 bitcoins per block. But this reward only becomes official if the block becomes part of the consensus blockchain. If a miner tries to build on a block further back in the chain, any new block they discover won't be on the longest chain. The miner, therefore, won't get a reward.
Bitcoin charms Washington
Enlarge / Sen. Tom Carper (D-Del.) hosted one of the Senate's first Bitcoin hearings, and it was surprisingly favorable to the technology.
Third Way Think Tank
In the early months of 2011, Satoshi Nakamoto gradually became less involved in the Bitcoin project. He turned over official leadership of the project to developer Gavin Andresen and disappeared from public view. Bitcoin had gained enough momentum to continue without him.
Bitcoin started getting mainstream attention in 2011, and much of it wasn't positive. One of the earliest applications of Bitcoin was for a website called Silk Road, a Tor hidden service that operated as a kind of eBay for illegal drugs. The existence of Silk Road came to the attention of Sen. Chuck Schumer (D-N.Y.), one of the first elected officials to comment on the technology. And he wasn't happy.
Silk Road, he said, "represents the most brazen attempt to peddle drugs online that we have ever seen." Bitcoin, in Schumer's view, was "an online form of money laundering used to disguise the source of money."
FURTHER READING
Stealing bitcoins with badges: How Silk Road’s dirty cops got caught
It's easy to imagine things continuing like that, with federal officials moving to shut down the Bitcoin network the same way they'd shut down previous electronic money schemes that had been too accommodating of illicit transactions. But savvy lobbying by Bitcoin insiders and their supporters in the libertarian think-tank world convinced officials to take another path.
These supporters pointed out that shutting down Bitcoin altogether would likely prove impossible. Banning it in the US would merely push it overseas. And if Bitcoin activity was centered in a jurisdiction hostile to the United States, then law enforcement would lose the power to subpoena Bitcoin companies that might have valuable information about illicit uses of the Bitcoin network.
Meanwhile, advocates argued that Bitcoin had the potential to be a major new source of technological innovation.
Over the course of 2013, law enforcement officials and members of Congress became convinced of these arguments. The Senate's first hearings on Bitcoin, held in November 2013, turned out to be Bitcoin lovefests, with the nation's top money-laundering official emphasizing that "innovation is a very important part of our economy."
Enlarge / Venture capital data compiled by Coindesk.
Washington's de facto endorsement accelerated a wave of Silicon Valley investment that had already been underway. Bitcoin investment rose from $2 million in 2012 to $95 million in 2013 and $361 million in 2014, according to statistics collected by Coindesk.
Many of these early investments aimed to help consumers use Bitcoin to make everyday payments. "There's a tremendous opportunity to make payments easier, more secure, and less costly for consumers and businesses," said Jeremy Allaire, co-founder of a Bitcoin startup called Circle, in October 2013. The company had just raised $9 million from venture capitalists.
But, unsurprisingly, hardly any consumers were interested in swapping out their credit cards for Bitcoin wallets. The process of acquiring, storing, and spending Bitcoins is cumbersome. The Bitcoin network doesn't offer the kind of fraud protections available on conventional financial networks. And the volatility of Bitcoin means that you could fill up your Bitcoin wallet one day and then discover that 10 percent of its value had evaporated overnight.
Circle ultimately gave up on Bitcoin and pivoted to offering a more conventional electronic payment service. "We no longer offer the ability to buy and sell Bitcoin," the company says on its help page.
ICO mania sparks another Bitcoin boom
Ethereum creator Vitalik Buterin.
TechCrunch
No one has managed to build mainstream products on top of Bitcoin the way companies like Amazon and Google made the Internet useful to ordinary people. The companies that have thrived either focus on building infrastructure for the Bitcoin network or catering to Bitcoin power users. There are now well-established companies that help sophisticated and wealthy customers acquire, store, and manage bitcoins.
And the maturity of the Bitcoin ecosystem has helped spur the development of other cryptocurrencies. People have been creating new cryptocurrencies since Bitcoin's early years. Ars even created one of our own back in 2014. But the most important Bitcoin competitor today is Ethereum. Founder Vitalik Buterin generalized the concepts behind Bitcoin's blockchain to create a network capable of executing arbitrarily complex computer programs known as smart contracts.
FURTHER READING
Behold Arscoin, our own custom cryptocurrency!
Ethereum launched in 2015, and its currency ("ether") quickly became the second most valuable after bitcoin. Ethereum has proven to be a good platform for quickly and easily building new blockchain-based systems.
Buterin launched Ethereum with a presale: people had the chance to buy ether ahead of the launch of the Ethereum network. These tokens proved to be a good investment, and Ethereum inspired a new speculative frenzy of initial coin offerings. Dozens of new cryptocurrencies were created, and people were given the opportunity to buy them—in many cases before the software to run the networks had even been finished. By 2017, the ICO market had become huge, with several offerings raising more than $100 million.
The ICO boom helped to drive a corresponding boom in Bitcoin's value. To participate in an ICO, people need a way to convert conventional cash into the new currency. And it's not easy to set up a new exchange for converting dollars or euros to an exotic new cryptocurrency. Instead, existing Bitcoin (and, to a lesser extent, Ethereum) exchanges have become the main way people inject new cash into the blockchain ecosystem.
In this way, Bitcoin's function in the blockchain economy is similar to the function the US dollar serves in international trade. The US dollar is known as the world's reserve currency because it's the most popular currency for international trade. When two small countries trade with one another, they often deal in dollars because the global financial system is organized to make this convenient.
A similar dynamic has emerged for the blockchain economy. If you have some ZCash, for instance, and you want to convert it into Ethereum Classic, finding someone willing to make that trade for you might be a challenge. But you can easily convert your ZCash into bitcoins and then convert the bitcoins into classic ether.
FURTHER READING
Bitcoin is hitting new highs—here’s why it might not be a bubble
The United States government has benefitted from the dollar's status as the world's reserve currency. Foreign demand for dollars pushes down borrowing costs and makes it easier for US businesses to trade. The dollar has also become a popular way to discreetly store cash. There are billions of $100 bills stuffed in safes and under floorboards around the world.
Bitcoin's status as the default medium of exchange in the blockchain world pushes its value upward in a similar way. Bitcoin is a popular medium of exchange for cryptocurrency-to-cryptocurrency transactions. And for people who want to make a long-term bet on the cryptocurrency economy, buying Bitcoin is as good a choice as any other.
This helps to explain why Bitcoin's price started to soar in early 2017 at the same time as the larger blockchain ecosystem was booming. People needed bitcoins to participate in other cryptocurrency offerings, and Bitcoin became caught up in the general cryptocurrency euphoria. The value of ether, the second most valuable cryptocurrency, has risen more than 50-fold this year at the same time bitcoin's value has increased by a factor of 10.
Bitcoin faces some big challenges
Enlarge
Thomas Trutschel / Getty Images News
Bitcoin is by far the most valuable cryptocurrency. The value of all bitcoins is around $170 billion, considerably more than the $45 billion for second-place Ethereum. But the Bitcoin community faces some big challenges ahead.
One problem is a looming regulatory crackdown. Bitcoin has already been hit by a crackdown from Chinese officials who have been severely restricting the use of cryptocurrencies. In the United States, there's little risk of a direct crackdown on Bitcoin, but there's a real risk that the Securities and Exchange Commission will crack down on the ICOs that have pushed Bitcoin's price upward. ICOs look a lot like conventional securities offerings, and US law requires companies to file elaborate paperwork with the SEC before offering securities to the public. If the SEC begins shutting down ICOs—or even prosecuting their promoters—that could put a damper on ICO-fueled demand for Bitcoin.
FURTHER READING
It looks like China is shutting down its blockchain economy
Bitcoin also has a congestion problem and a dysfunctional culture that makes it difficult for the Bitcoin community to address that problem effectively. A hard-coded limit in the Bitcoin source code prevents the network from processing more than about a dozen transactions per second. Efforts to expand its capacity have triggered a bitter debate within the Bitcoin world.
We've covered this debate in detail elsewhere, so we won't rehash the issue here. But the bottom line is that the Bitcoin network is increasingly congested, which has led to soaring transaction fees. Developers are working on solutions—most importantly, a related network called Lightning that could enable small, fast transactions without cluttering up the main Bitcoin blockchain. But that technology is still in its experimental stages, and it's not clear how well it will work.
Meanwhile, classic Bitcoin faces a challenge from Bitcoin Cash, a Bitcoin clone that is more focused on addressing Bitcoin's scaling challenges. There's a danger that users will grow frustrated with the congested, expensive network surrounding classic Bitcoin and switch to rivals like Bitcoin Cash.
All of which is to say that continued appreciation is far from a sure thing. We're not foolish enough to predict whether bitcoins will go up or down. But we will emphasize that there are huge risks to investing Bitcoin. Please, please don't do it with money you can't afford to lose.
TIMOTHY B. LEETimothy is a senior reporter covering tech policy, blockchain technologies and the future of transportation. He lives in Washington DC.
EMAIL [email protected] // TWITTER @binarybits
A few years ago, people thought Bitcoin was a joke. Now it’s worth billions.
TIMOTHY B. LEE - 11/29/2017, 7:40 AM
Enlarge
Aurich / Getty
200
On Tuesday evening, the value of one bitcoin shot above $10,000. It has been a remarkable run for a currency that was only worth about $12 five years ago.
The run has been particularly remarkable because it's still not clear what Bitcoin is useful for. During its early years, the cryptocurrency garnered a lot of optimistic talk about how it would disrupt conventional payment networks like MasterCard or Western Union. But almost nine years after Bitcoin was created, there's little sign of it becoming a mainstream technology. Few people own any bitcoins at all. Even fewer use it as a daily payment technology.
Yet that hasn't prevented the cryptocurrency's value from zooming upward. One factor driving Bitcoin's growth has been the emergence of a broader cryptocurrency ecosystem. Bitcoin serves as the reserve currency for the cryptocurrency economy in much the same way that the dollar serves as the main anchor currency for international trade.
In this piece, we'll explain the key innovation that set Bitcoin apart from all previous electronic payment schemes. We'll look at how Bitcoin won over regulators and venture capitalists to become a significant part of the global financial system. And we'll examine the cryptocurrency boom of the last year that has helped drive Bitcoin's value into the stratosphere.
While we can tell the story of Bitcoin's rise and point to some of the factors that have pushed its value upward, we can't really explain why the currency's value goes up or down during a particular day, week, or month. In particular, bitcoins have more than doubled in value since the start of October, which is hard to explain with anything other than speculative mania. People thinking about trying to get in on the Bitcoin boom should think carefully about the potential downside and not invest any money they can't afford to lose.
Bitcoin was the first truly decentralized electronic payment network
Cypherpunks have dreamed of fully decentralized electronic payment systems for decades. The potential for cryptographically secure electronic money became obvious after the invention of digital signatures using public-key cryptography in the 1970s.
But efforts to create practical digital cash schemes were bedeviled by something called the double-spending problem: how to prevent someone from sending the same digital coins to two different people. Preventing this requires a shared ledger that records all transactions. And until 2008, no one had figured out a way to do this without relying on a central authority to maintain and update the ledger.
Then someone calling himself Satoshi Nakamoto proposed an approach that initially seemed a little crazy: just have everyone on a peer-to-peer network keep a copy of every transaction, forever. Obviously, that's not the most efficient way to design a payment network, but a transaction doesn't need to take up very much space—and bandwidth and storage space get cheaper every year.
FURTHER READING
Bitcoin: inside the encrypted, peer-to-peer digital currency
The key to Nakamoto's scheme was a clever, fully decentralized way to reach a consensus about the order of transactions within the blockchain, Bitcoin's transaction ledger.
Certain nodes on Bitcoin's peer-to-peer network, known as miners, compete for the right to add the next block to the Bitcoin blockchain. Using brute force, they race to find a block whose SHA-256 hash value is below an arbitrary threshold (known as the difficulty). Once a node finds a block that meets the criteria, it announces the new block to other nodes on the network. Others incorporate the new block into their copy of the blockchain and then begin the race anew.
Occasionally, two miners discover blocks close enough together that the network doesn't agree about who was first. Only one block can be accepted by the network. But which one? The network decides by moving on to the next round of the race. Every miner starts looking for a second new block building on one of the two rival blocks in the previous round. When someone finds a new block, it will include a hash value pointing back to one of the previous blocks. Once this happens, both the newly discovered block and the preceding block its creator chose become part of the official blockchain. The other, competing block gets discarded.
In theory, this could happen multiple times—two nodes could discover blocks simultaneously in the second round, deepening uncertainty about which chain is the legitimate one. But if nodes are being honest, this situation won't last for long.
Enlarge / This diagram shows how the Bitcoin network resolves disagreements over the next block in the blockchain. The network always works from the longest chain. When a miner discovers the orange block in step 5, it points back to the green and violet nodes, cementing their status as an official part of the blockchain. Then the red and light-blue nodes are discarded by the network.
Timothy B. Lee / Ars Technica
Nodes are programmed to always build on top of the longest chain—on the block with the largest number of predecessors. So as soon as someone discovers a block that makes its chain longer than other, rival chains, everyone else has a financial incentive to abandon other chains and work from the longest one. In the image above, nodes will abandon the red and light-blue blocks as soon as the orange block is announced in step five, making the green and violet blocks into consensus picks.
Everyone has an incentive to always work from the current longest block because the creator of a block gets to award itself a fixed number of newly created bitcoins—currently 12.5 bitcoins per block. But this reward only becomes official if the block becomes part of the consensus blockchain. If a miner tries to build on a block further back in the chain, any new block they discover won't be on the longest chain. The miner, therefore, won't get a reward.
Bitcoin charms Washington
Enlarge / Sen. Tom Carper (D-Del.) hosted one of the Senate's first Bitcoin hearings, and it was surprisingly favorable to the technology.
Third Way Think Tank
In the early months of 2011, Satoshi Nakamoto gradually became less involved in the Bitcoin project. He turned over official leadership of the project to developer Gavin Andresen and disappeared from public view. Bitcoin had gained enough momentum to continue without him.
Bitcoin started getting mainstream attention in 2011, and much of it wasn't positive. One of the earliest applications of Bitcoin was for a website called Silk Road, a Tor hidden service that operated as a kind of eBay for illegal drugs. The existence of Silk Road came to the attention of Sen. Chuck Schumer (D-N.Y.), one of the first elected officials to comment on the technology. And he wasn't happy.
Silk Road, he said, "represents the most brazen attempt to peddle drugs online that we have ever seen." Bitcoin, in Schumer's view, was "an online form of money laundering used to disguise the source of money."
FURTHER READING
Stealing bitcoins with badges: How Silk Road’s dirty cops got caught
It's easy to imagine things continuing like that, with federal officials moving to shut down the Bitcoin network the same way they'd shut down previous electronic money schemes that had been too accommodating of illicit transactions. But savvy lobbying by Bitcoin insiders and their supporters in the libertarian think-tank world convinced officials to take another path.
These supporters pointed out that shutting down Bitcoin altogether would likely prove impossible. Banning it in the US would merely push it overseas. And if Bitcoin activity was centered in a jurisdiction hostile to the United States, then law enforcement would lose the power to subpoena Bitcoin companies that might have valuable information about illicit uses of the Bitcoin network.
Meanwhile, advocates argued that Bitcoin had the potential to be a major new source of technological innovation.
Over the course of 2013, law enforcement officials and members of Congress became convinced of these arguments. The Senate's first hearings on Bitcoin, held in November 2013, turned out to be Bitcoin lovefests, with the nation's top money-laundering official emphasizing that "innovation is a very important part of our economy."
Enlarge / Venture capital data compiled by Coindesk.
Washington's de facto endorsement accelerated a wave of Silicon Valley investment that had already been underway. Bitcoin investment rose from $2 million in 2012 to $95 million in 2013 and $361 million in 2014, according to statistics collected by Coindesk.
Many of these early investments aimed to help consumers use Bitcoin to make everyday payments. "There's a tremendous opportunity to make payments easier, more secure, and less costly for consumers and businesses," said Jeremy Allaire, co-founder of a Bitcoin startup called Circle, in October 2013. The company had just raised $9 million from venture capitalists.
But, unsurprisingly, hardly any consumers were interested in swapping out their credit cards for Bitcoin wallets. The process of acquiring, storing, and spending Bitcoins is cumbersome. The Bitcoin network doesn't offer the kind of fraud protections available on conventional financial networks. And the volatility of Bitcoin means that you could fill up your Bitcoin wallet one day and then discover that 10 percent of its value had evaporated overnight.
Circle ultimately gave up on Bitcoin and pivoted to offering a more conventional electronic payment service. "We no longer offer the ability to buy and sell Bitcoin," the company says on its help page.
ICO mania sparks another Bitcoin boom
Ethereum creator Vitalik Buterin.
TechCrunch
No one has managed to build mainstream products on top of Bitcoin the way companies like Amazon and Google made the Internet useful to ordinary people. The companies that have thrived either focus on building infrastructure for the Bitcoin network or catering to Bitcoin power users. There are now well-established companies that help sophisticated and wealthy customers acquire, store, and manage bitcoins.
And the maturity of the Bitcoin ecosystem has helped spur the development of other cryptocurrencies. People have been creating new cryptocurrencies since Bitcoin's early years. Ars even created one of our own back in 2014. But the most important Bitcoin competitor today is Ethereum. Founder Vitalik Buterin generalized the concepts behind Bitcoin's blockchain to create a network capable of executing arbitrarily complex computer programs known as smart contracts.
FURTHER READING
Behold Arscoin, our own custom cryptocurrency!
Ethereum launched in 2015, and its currency ("ether") quickly became the second most valuable after bitcoin. Ethereum has proven to be a good platform for quickly and easily building new blockchain-based systems.
Buterin launched Ethereum with a presale: people had the chance to buy ether ahead of the launch of the Ethereum network. These tokens proved to be a good investment, and Ethereum inspired a new speculative frenzy of initial coin offerings. Dozens of new cryptocurrencies were created, and people were given the opportunity to buy them—in many cases before the software to run the networks had even been finished. By 2017, the ICO market had become huge, with several offerings raising more than $100 million.
The ICO boom helped to drive a corresponding boom in Bitcoin's value. To participate in an ICO, people need a way to convert conventional cash into the new currency. And it's not easy to set up a new exchange for converting dollars or euros to an exotic new cryptocurrency. Instead, existing Bitcoin (and, to a lesser extent, Ethereum) exchanges have become the main way people inject new cash into the blockchain ecosystem.
In this way, Bitcoin's function in the blockchain economy is similar to the function the US dollar serves in international trade. The US dollar is known as the world's reserve currency because it's the most popular currency for international trade. When two small countries trade with one another, they often deal in dollars because the global financial system is organized to make this convenient.
A similar dynamic has emerged for the blockchain economy. If you have some ZCash, for instance, and you want to convert it into Ethereum Classic, finding someone willing to make that trade for you might be a challenge. But you can easily convert your ZCash into bitcoins and then convert the bitcoins into classic ether.
FURTHER READING
Bitcoin is hitting new highs—here’s why it might not be a bubble
The United States government has benefitted from the dollar's status as the world's reserve currency. Foreign demand for dollars pushes down borrowing costs and makes it easier for US businesses to trade. The dollar has also become a popular way to discreetly store cash. There are billions of $100 bills stuffed in safes and under floorboards around the world.
Bitcoin's status as the default medium of exchange in the blockchain world pushes its value upward in a similar way. Bitcoin is a popular medium of exchange for cryptocurrency-to-cryptocurrency transactions. And for people who want to make a long-term bet on the cryptocurrency economy, buying Bitcoin is as good a choice as any other.
This helps to explain why Bitcoin's price started to soar in early 2017 at the same time as the larger blockchain ecosystem was booming. People needed bitcoins to participate in other cryptocurrency offerings, and Bitcoin became caught up in the general cryptocurrency euphoria. The value of ether, the second most valuable cryptocurrency, has risen more than 50-fold this year at the same time bitcoin's value has increased by a factor of 10.
Bitcoin faces some big challenges
Enlarge
Thomas Trutschel / Getty Images News
Bitcoin is by far the most valuable cryptocurrency. The value of all bitcoins is around $170 billion, considerably more than the $45 billion for second-place Ethereum. But the Bitcoin community faces some big challenges ahead.
One problem is a looming regulatory crackdown. Bitcoin has already been hit by a crackdown from Chinese officials who have been severely restricting the use of cryptocurrencies. In the United States, there's little risk of a direct crackdown on Bitcoin, but there's a real risk that the Securities and Exchange Commission will crack down on the ICOs that have pushed Bitcoin's price upward. ICOs look a lot like conventional securities offerings, and US law requires companies to file elaborate paperwork with the SEC before offering securities to the public. If the SEC begins shutting down ICOs—or even prosecuting their promoters—that could put a damper on ICO-fueled demand for Bitcoin.
FURTHER READING
It looks like China is shutting down its blockchain economy
Bitcoin also has a congestion problem and a dysfunctional culture that makes it difficult for the Bitcoin community to address that problem effectively. A hard-coded limit in the Bitcoin source code prevents the network from processing more than about a dozen transactions per second. Efforts to expand its capacity have triggered a bitter debate within the Bitcoin world.
We've covered this debate in detail elsewhere, so we won't rehash the issue here. But the bottom line is that the Bitcoin network is increasingly congested, which has led to soaring transaction fees. Developers are working on solutions—most importantly, a related network called Lightning that could enable small, fast transactions without cluttering up the main Bitcoin blockchain. But that technology is still in its experimental stages, and it's not clear how well it will work.
Meanwhile, classic Bitcoin faces a challenge from Bitcoin Cash, a Bitcoin clone that is more focused on addressing Bitcoin's scaling challenges. There's a danger that users will grow frustrated with the congested, expensive network surrounding classic Bitcoin and switch to rivals like Bitcoin Cash.
All of which is to say that continued appreciation is far from a sure thing. We're not foolish enough to predict whether bitcoins will go up or down. But we will emphasize that there are huge risks to investing Bitcoin. Please, please don't do it with money you can't afford to lose.
TIMOTHY B. LEETimothy is a senior reporter covering tech policy, blockchain technologies and the future of transportation. He lives in Washington DC.
EMAIL [email protected] // TWITTER @binarybits
Data: coindesk.com 1 year data
number of points = 25
curve fit : y = 501.428 exp (0.006268 x)
days 0, 2017-11-16, $6389
days 10, 2017-11-26, $6802
days 20, 2017-12-6, $7242
days 30, 2017-12-16, $7710
days 60, 2018-1-15, $9306
days 90, 2018-2-14, $11231
days 120, 2018-3-16, $13555
days 150, 2018-4-15, $16359
days 180, 2018-5-15, $19744
days 210, 2018-6-14, $23829
days 240, 2018-7-14, $28759
days 270, 2018-8-13, $34708
days 300, 2018-9-12, $41889
days 330, 2018-10-12, $50556
days 360, 2018-11-11, $61015
days 540, 2019-5-10, $188558
days 720, 2019-11-6, $582704
days 900, 2020-5-4, $1800738
days 1080, 2020-10-31, $5564849
days 1260, 2021-4-29, $17197135
days 1440, 2021-10-26, $53144558
days 1620, 2022-4-24, $164233406
days 1800, 2022-10-21, $507532895
The above is an extrapolation using a simple exponential curve fit to the recent 1 year data. It predicts that the price of bitcoin to be USD 507,532,895 in 5 years! I think I now accept this prediction. Here's why.
Most people assume that a bubble must burst at some point in time in the future. Indeed, it's an absolute certainty. What if it takes a 100 years to burst. Impossible - you say! Ask Napoleon Bonaparte.
I'll talk Einstein's relativity theory. It is a trivially invalid theory introduced in a 1905 paper. It was a theory categorically rejected by the most prestigious of physicists of the time including Ernest Rutherford, Nicola Tesla,
Louis Essen (inventor Caesium atomic clock).
List of current 9000 dissident physicists:
http://editionsassailly.com/dissidents_english.htm
Most of the dissident physicists are dissidents because they reject Einstein's theory outright. Nearly all are qualified with B.Sc or PhD, but you don't hear about them - or about Einstein's theory being invalid - from the Times magazines, BBC, Discovery Channels. On the contrary - after a hundred years of falsehood - the relativity theory is stronger then ever, being part of the regular curriculum in universities worldwide. The false relativistic mechanics is the fundamental mechanics of high energy particle physics with their quarks, Higgs boson, etc. But the false Higgs (as particle physics is false) is even accorded the Nobel prize. So this is the world of reality. A false cult don't necessary die fast.
The_cult_of_bitcoin:
https://www.reddit.com/r/bitcoin_un.../the_cult_of_bitcoin/?st=ja8g9tgn&sh=9125a835
The cult of bitcoin is only 8 years old and the "bubble" is about a year old. What if the bubble last five years non stop? What would be the price?
Chan Rasjid,
E=mc2 Invalid.
http://www.emc2fails.com.
number of points = 25
curve fit : y = 501.428 exp (0.006268 x)
days 0, 2017-11-16, $6389
days 10, 2017-11-26, $6802
days 20, 2017-12-6, $7242
days 30, 2017-12-16, $7710
days 60, 2018-1-15, $9306
days 90, 2018-2-14, $11231
days 120, 2018-3-16, $13555
days 150, 2018-4-15, $16359
days 180, 2018-5-15, $19744
days 210, 2018-6-14, $23829
days 240, 2018-7-14, $28759
days 270, 2018-8-13, $34708
days 300, 2018-9-12, $41889
days 330, 2018-10-12, $50556
days 360, 2018-11-11, $61015
days 540, 2019-5-10, $188558
days 720, 2019-11-6, $582704
days 900, 2020-5-4, $1800738
days 1080, 2020-10-31, $5564849
days 1260, 2021-4-29, $17197135
days 1440, 2021-10-26, $53144558
days 1620, 2022-4-24, $164233406
days 1800, 2022-10-21, $507532895
The above is an extrapolation using a simple exponential curve fit to the recent 1 year data. It predicts that the price of bitcoin to be USD 507,532,895 in 5 years! I think I now accept this prediction. Here's why.
Most people assume that a bubble must burst at some point in time in the future. Indeed, it's an absolute certainty. What if it takes a 100 years to burst. Impossible - you say! Ask Napoleon Bonaparte.
I'll talk Einstein's relativity theory. It is a trivially invalid theory introduced in a 1905 paper. It was a theory categorically rejected by the most prestigious of physicists of the time including Ernest Rutherford, Nicola Tesla,
Louis Essen (inventor Caesium atomic clock).
List of current 9000 dissident physicists:
http://editionsassailly.com/dissidents_english.htm
Most of the dissident physicists are dissidents because they reject Einstein's theory outright. Nearly all are qualified with B.Sc or PhD, but you don't hear about them - or about Einstein's theory being invalid - from the Times magazines, BBC, Discovery Channels. On the contrary - after a hundred years of falsehood - the relativity theory is stronger then ever, being part of the regular curriculum in universities worldwide. The false relativistic mechanics is the fundamental mechanics of high energy particle physics with their quarks, Higgs boson, etc. But the false Higgs (as particle physics is false) is even accorded the Nobel prize. So this is the world of reality. A false cult don't necessary die fast.
The_cult_of_bitcoin:
https://www.reddit.com/r/bitcoin_un.../the_cult_of_bitcoin/?st=ja8g9tgn&sh=9125a835
The cult of bitcoin is only 8 years old and the "bubble" is about a year old. What if the bubble last five years non stop? What would be the price?
Chan Rasjid,
E=mc2 Invalid.
http://www.emc2fails.com.
Singapore central bank urges 'extreme caution' when investing in cryptocurrencies
19 Dec 2017 06:15PM (Updated: 19 Dec 2017 09:00PM)
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SINGAPORE: The Monetary Authority of Singapore (MAS) is urging the public to "act with extreme caution" and understand the "significant risks" they take on if they choose to invest in cryptocurrencies.
In a media release on Tuesday (Dec 19), the central bank said: "MAS is concerned that members of the public may be attracted to invest in cryptocurrencies, such as Bitcoin, due to the recent escalation in their prices.
"MAS reminds the public that cryptocurrencies are not legal tender. They are not issued by any government and are not backed by any asset or issuer."
It added that the recent surge in prices of cryptocurrencies is driven by speculation, and that the risk of a sharp reduction in prices is high.
"Investors in cryptocurrencies should be aware that they run the risk of losing all their capital," MAS warned.
Bitcoin, in particular, has had a spectacular rise this year. It started at US$1,000 per unit in January but by mid-December had shot to within striking distance of US$20,000, stoking fears of a bubble.
On Tuesday, MAS reminded the public that, as in most jurisdictions, there is no regulatory safeguard in Singapore for investments in cryptocurrencies. Investors who lose money from such investments will not be able to rely on any protection afforded under legislation administered by MAS.
It also pointed out that there is a greater risk of fraud as cryptocurrency transactions are generally anonymous, which makes them vulnerable to being misused for illegal activities.
In addition, the cryptocurrency intermediary can be hacked if it does not have robust security features, increasing the risk of loss for investors.
Underscoring the risks, the advisory came as a South Korean cryptocurrency exchange said it is shutting down and filing for bankruptcy after it was hacked for the second time this year.
The exchange, called Youbit, said all customers’ cryptocurrency assets will be marked down to 75 per cent of its value, adding it has stopped trading and will work to minimise customer losses.
This is the Singapore regulator's second such notice of caution in a year. In August, MAS and the Commercial Affairs Department (CAD) jointly issued a consumer advisory against the risks of digital tokens and virtual currency-related investment schemes.
"If the touted ease of making significant profits sounds too good to be true, it probably is," said MAS on Tuesday.
"Investors should carefully assess whether an investment in cryptocurrencies is suitable for their investment objectives and risk appetite."
Read more at https://www.channelnewsasia.com/new...ges-extreme-caution-when-investing-in-9510842
19 Dec 2017 06:15PM (Updated: 19 Dec 2017 09:00PM)
Share this content
SINGAPORE: The Monetary Authority of Singapore (MAS) is urging the public to "act with extreme caution" and understand the "significant risks" they take on if they choose to invest in cryptocurrencies.
In a media release on Tuesday (Dec 19), the central bank said: "MAS is concerned that members of the public may be attracted to invest in cryptocurrencies, such as Bitcoin, due to the recent escalation in their prices.
"MAS reminds the public that cryptocurrencies are not legal tender. They are not issued by any government and are not backed by any asset or issuer."
It added that the recent surge in prices of cryptocurrencies is driven by speculation, and that the risk of a sharp reduction in prices is high.
"Investors in cryptocurrencies should be aware that they run the risk of losing all their capital," MAS warned.
Bitcoin, in particular, has had a spectacular rise this year. It started at US$1,000 per unit in January but by mid-December had shot to within striking distance of US$20,000, stoking fears of a bubble.
On Tuesday, MAS reminded the public that, as in most jurisdictions, there is no regulatory safeguard in Singapore for investments in cryptocurrencies. Investors who lose money from such investments will not be able to rely on any protection afforded under legislation administered by MAS.
It also pointed out that there is a greater risk of fraud as cryptocurrency transactions are generally anonymous, which makes them vulnerable to being misused for illegal activities.
In addition, the cryptocurrency intermediary can be hacked if it does not have robust security features, increasing the risk of loss for investors.
Underscoring the risks, the advisory came as a South Korean cryptocurrency exchange said it is shutting down and filing for bankruptcy after it was hacked for the second time this year.
The exchange, called Youbit, said all customers’ cryptocurrency assets will be marked down to 75 per cent of its value, adding it has stopped trading and will work to minimise customer losses.
This is the Singapore regulator's second such notice of caution in a year. In August, MAS and the Commercial Affairs Department (CAD) jointly issued a consumer advisory against the risks of digital tokens and virtual currency-related investment schemes.
"If the touted ease of making significant profits sounds too good to be true, it probably is," said MAS on Tuesday.
"Investors should carefully assess whether an investment in cryptocurrencies is suitable for their investment objectives and risk appetite."
Read more at https://www.channelnewsasia.com/new...ges-extreme-caution-when-investing-in-9510842
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