Cryptocurrencies

[alpha]

JP Morgans former chief equity strategist released a new valuation model for bitcoin.

 

It models bitcoin as a substitute for gold predicting the price rising to 55,000 by 2022.

 

http://www.cnbc.com/2017/07/07/strategist-tom-lee-weighs-sees-bitcoin-going-as-high-as-55000.html

[DooDiligence]

IDK much about blockchain & this article doesn't add much to the discussion of crypto$ valuation but the Question raised by the author

 

"Why do I want 2 remove the intermediary?"

 

seems like it could be asked of other industries (and I'm interested in the comments of wayyyy more knowledgable posters here...)

 

http://www.zkorman.com/blockchain.html

 

BTW - I have no interest in trading crypto$ & instead, am interested in seeing if there are other applications for the tech beyond finance.

[mttddd]

https://www.factom.com/

 

Check out Factom, they've got some solid support too, Gates foundation and a few others

[rkbabang]

IDK much about blockchain & this article doesn't add much to the discussion of crypto$ valuation but the Question raised by the author

 

"Why do I want 2 remove the intermediary?"

 

seems like it could be asked of other industries (and I'm interested in the comments of wayyyy more knowledgable posters here...)

 

http://www.zkorman.com/blockchain.html

 

BTW - I have no interest in trading crypto$ & instead, am interested in seeing if there are other applications for the tech beyond finance.

 

Food for thought.  Reading this reminded me that in the mid to late 90's I thought Realtors were doomed because of the internet.  The existence of sites like ISoldMyHouse.com fed into my confirmation bias (until I tried to use it to sell my first house).  The internet has changed many things, but not exactly the things I thought it would and not in exactly the ways I predicted.  I suspect the same will be true for blockchain tech.  It won't play out in exactly the ways I (and most other people) think it will.  I am pretty confident that having a currency than can't be manipulated by a government agency or central bank is a good thing, everything else people say blockchain will be used for however I'm not as sure about.  Even if it ends up being used only to revolutionize money, stock trading (and maybe keeping track of titles to property in the 3rd world and banking in the 3rd world) that will still be huge.  And of course facilitating black market trade which I think of as a positive, with a few exceptions, of course, such as murder for hire.

 

Thanks for the article.

 

[rkbabang]

There are some who think the move to triple entry accounting will have a larger long term impact on the world's civilization & economy than the move from single entry to double entry accounting did.

 

Why Everyone Missed the Most Important Invention in the Last 500 Years

 

Blockchain Technology A game-changer in accounting?

 

[DooDiligence]

There are some who think the move to triple entry accounting will have a larger long term impact on the world's civilization & economy than the move from single entry to double entry accounting did.

 

Why Everyone Missed the Most Important Invention in the Last 500 Years

 

Blockchain Technology A game-changer in accounting?

 

Thanks!

 

I wonder how triple entry will affect companies like Robert Half which provides temp & ad hoc accounting & audit personnel?

 

My skepticism for cryptocurrencies has blinded me to the opportunities in blockchain.

 

I've frequently been blinded a by knee jerk, distaste for ideas based upon their most visible characteristics (unable to see the forest 4 one big ugly tree) (Blackberry & AIG come to mind...)

[Jurgis]

There are some who think the move to triple entry accounting will have a larger long term impact on the world's civilization & economy than the move from single entry to double entry accounting did.

 

Why Everyone Missed the Most Important Invention in the Last 500 Years

 

Blockchain Technology A game-changer in accounting?

 

Thanks!

 

I wonder how triple entry will affect companies like Robert Half which provides temp & ad hoc accounting & audit personnel?

 

My skepticism for cryptocurrencies has blinded me to the opportunities in blockchain.

 

I've frequently been blinded a by knee jerk, distaste for ideas based upon their most visible characteristics (unable to see the forest 4 one big ugly tree) (Blackberry & AIG come to mind...)

 

And why do you think that your skepticism blinded you?

 

I agree more with zkorman guy that the Bitcoin and blockchain is a solution in search of a problem.

 

Or to rephrase it, the cost of a blockchain likely outweighs the benefits.

 

There are a lot of smart people working on blockchain and there will be likely be useful products based on it. But 90%+ of bloggers are just fanboys looking at the world through blockchain-colored glasses and claiming it to be a solution for everything.

 

It's like VR/AR people. If you listen to them, VR/AR is solution for everything. And it might be for some things, but not as much as they claim.

 

And if I had to bet on long term impact, I'd bet on VR/AR much more than on blockchain.

But then Bitcoin/Ethereum are all going 10x up, while VR/AR... oh well.

 

(Likely my last post on this thread, since I expect a huge pushback from crypto fanboys and I'm not looking to slug it out)

 

Peace ...

can only be achieved via blockchain

[rkbabang]

Or to rephrase it, the cost of a blockchain likely outweighs the benefits.

 

Right now it almost certainly does.  The bullish case is that the costs will come down over time (i.e. computing, electricity, storage) while the benefits will increase over time as more applications for this are found and become widely used.  If either of those assumptions doesn't turn out to be true then there is nothing to see here but a big tulip bubble.

 

[Jurgis]

Or to rephrase it, the cost of a blockchain likely outweighs the benefits.

 

Right now it almost certainly does.  The bullish case is that the costs will come down over time (i.e. computing, electricity, storage) while the benefits will increase over time as more applications for this are found and become widely used.  If either of those assumptions doesn't turn out to be true then there is nothing to see here but a big tulip bubble.

 

I'm stepping way out of my knowledge zone here, but isn't the security of blockchain based on high cost? I.e. isn't it by design based on hard (and also useless - which makes this doubly waste) problems to solve?

 

Maybe there are solutions for blockchain that don't require the above while it still remains blockchain. My suspicion is that solutions just make it not-blockchain-that-is-still-called-blockchain-for-sales/marketing-easy-money. But I might be totally wrong.  8)

[wachtwoord]

Or to rephrase it, the cost of a blockchain likely outweighs the benefits.

 

Right now it almost certainly does.  The bullish case is that the costs will come down over time (i.e. computing, electricity, storage) while the benefits will increase over time as more applications for this are found and become widely used.  If either of those assumptions doesn't turn out to be true then there is nothing to see here but a big tulip bubble.

 

I'm stepping way out of my knowledge zone here, but isn't the security of blockchain based on high cost? I.e. isn't it by design based on hard (and also useless - which makes this doubly waste) problems to solve?

 

Maybe there are solutions for blockchain that don't require the above while it still remains blockchain. My suspicion is that solutions just make it not-blockchain-that-is-still-called-blockchain-for-sales/marketing-easy-money. But I might be totally wrong.  8)

 

You're right. This is also why people who want a blockchain without a currency function (token of value) or permissioned mining (not everyone can mine hence centralization) don't get it all. Without those things blockchain is just an extremely inefficient database.

[rkbabang]

Or to rephrase it, the cost of a blockchain likely outweighs the benefits.

 

Right now it almost certainly does.  The bullish case is that the costs will come down over time (i.e. computing, electricity, storage) while the benefits will increase over time as more applications for this are found and become widely used.  If either of those assumptions doesn't turn out to be true then there is nothing to see here but a big tulip bubble.

 

I'm stepping way out of my knowledge zone here, but isn't the security of blockchain based on high cost? I.e. isn't it by design based on hard (and also useless - which makes this doubly waste) problems to solve?

 

Maybe there are solutions for blockchain that don't require the above while it still remains blockchain. My suspicion is that solutions just make it not-blockchain-that-is-still-called-blockchain-for-sales/marketing-easy-money. But I might be totally wrong.  8)

 

Proof of stake solves the computing and electricity costs.  And storage prices are always going down.  For a currency you might still want proof of work, so you are correct that the computing costs will still be high the question is the value going to be worth the price?  For something like Etherium where the currency isn't the main app proof of stake should solve the computing/electricity problem (etherium will be moving to some form of modified PoS in the next year or so). 

 

There is always a question of the value being worth the cost in everything isn't there?  Is the value of the capital markets worth the cost of being a public company?  For some yes, for others no.  There will be a lot of stuff created and a lot of failures along the way, but I think blockchain tech will find its killer app, and then another one, and then another one, etc... over time.  This may happen on the bitcoin or etherium blockchains or some other one that won't even be invented yet until 2028.  I'm not going to say I know how this will play out.  How many internet companies are no longer with us?  How many computer companies?  How many automobile companies?  Markets are messy, but that doesn't mean this entire category of technology is sure to be worthless now and forever.

 

[mttddd]

Agreed, there is no telling if this will play out, i personally think blockchain is here to stay but it wouldnt shock me if none of the current players exist in a few years

[Liberty]

While looking for something, I found a bookmark folder from 2011 full of Bitcoin stuff I was reading at the time. I've been interested in crypto since the late 90s (PGP), so I was mostly interested in the tech. I also have some friends who are engineers working in an adjacent field, so we discussed it a bit in those days. Never bought or mined (hindsight is 20/20).

 

Among the stuff, I found this, which I remembered from those days:

 

[Fly]

Going to be a choppy month or two with cryptos:

 

https://bitcoinmagazine.com/articles/countdown-segwit-these-are-dates-keep-eye/

[beerbaron]

So two questions have been troubling my mind over crypto currencies and I'm lik e non fanatic opinions on each of those.

 

The ledger or full blockchain size.

I don`t see how it would be feasible to have an exponentially growing ledger at the rate that would make bitcoin widely adopted. I can foresee the size growing at a rate much faster than any hd of SSD capacity. Las time I checked HDD were doubling every 3 years but I'm fairly certain that a a full transaction ledger would grow much faster than that. It has two problems against it, 1st as the growing user base grows it also grows the amount of transactions. So in a sense we might not be working on a much more aggresive power than HHD drive capacity. ID be happy to see anybody prove me wrong on this one but I do think there is one fundamental law, the size of the ledger cango to infinity, the size of a hard drive cannot.

 

The power efficiency

I really don't see how on a massive scale where every civilized human being would use a bit currency what kind of power would be necessary to maintain the hash at an acceptable rate. Already we are seeing stress in the video cards supply I don't see how a planet wide adoption would be even possible under a decentralized approach... did anybody did the calculations of how much eneergy would be needed to compute the blockchain in let's say 15 year from now? I would bet that those calculations would show a ridiculous amount of energy, and if the calculations would be applied to 50 years it would be a multiple of all of today's power plant.

 

I did not dig very deep but my gut tells me that we are looking at a exponential power that is greater than our capacity to out innovate. Blockchain has a place in our future but probable not as widely adopted as we think. What do you guys think care to help me gather the data and see if the numbers makes sence in a long term approach?

 

BeerBaron

[rkbabang]

So two questions have been troubling my mind over crypto currencies and I'm lik e non fanatic opinions on each of those.

 

The ledger or full blockchain size.

I don`t see how it would be feasible to have an exponentially growing ledger at the rate that would make bitcoin widely adopted. I can foresee the size growing at a rate much faster than any hd of SSD capacity. Las time I checked HDD were doubling every 3 years but I'm fairly certain that a a full transaction ledger would grow much faster than that. It has two problems against it, 1st as the growing user base grows it also grows the amount of transactions. So in a sense we might not be working on a much more aggresive power than HHD drive capacity. ID be happy to see anybody prove me wrong on this one but I do think there is one fundamental law, the size of the ledger cango to infinity, the size of a hard drive cannot.

 

While it is true that the ledger size is open ended, at any given time the ledger size is finite and will always be finite.  There is no such thing as an infinite sized ledger.    The bitcoin blockchain is currently 124GB (it would fit on a USB stick).  That is tiny, it could grow 100X and it would still be easy for anyone to keep a copy of it.  Even if it were to grow 1000X it wouldn't be much of a problem to keep at home. If it were to grow a million times it wouldn't be much of a problem for miners to keep a copy of it (and probably not home users either by the time it does get that big).  To put 124GB in proportion to the amount of storage in the world from wikipedia (keep in mind that 1 petabyte = 1,000,000 GB:

 

• Games: World of Warcraft uses 1.3 petabytes of storage to maintain its game
  
• Steam, a digital distribution service, delivers over 16 petabytes of content to American users weekly
  
• Cloud backup: Multiple backup vendors, including Code42, Backblaze, and Mozy claim to store 90 or more petabytes of user backup data
  
• Physics: The experiments in the Large Hadron Collider produce about 15 petabytes of data per year, which are distributed over the Worldwide LHC Computing Grid.[26] In July 2012 it was revealed that CERN amassed about 200 petabytes of data from the more than 800 trillion collisions looking for the Higgs boson
  
• Climate science: The German Climate Computing Centre (DKRZ) has a storage capacity of 60 petabytes of climate data
  
• Folding@home (Scientific Data): Folding@home has generated 0.5 petabytes of simulated data
  
• Google Photos has an estimated of 13.7 petabytes worth of photos uploaded in the first year of its existence
  

 

The storage capacity of the world right now is measured in zettabytes (1 zettabyte = 1,000,000 petabytes), and it is doubling every 1-3 years.  Blockchains would have to grow at an enormous rate for a long-long time before storage would be an issue. And if it did become an issue someday that would push innovation and start to drive the storage industry the way mining (and AI as well) is going to start to drive the GPU industry. There won't be a shortage for long as NVIDIA, AMD, and others will ramp up production to try and meet demand. There are already GPU cards coming out specifically designed for mining.  And bitcoin, of course isn't even mined with GPUs anymore, but custom chips specifically designed to mine bitcoins.

 

 

[wachtwoord]

I fully agree with beerbarron and this why the block size is not simply being increased despite the pressure. However, far from all transactions need the level of security and censorship resistance as Bitcoin and therefore part will be offloaded to less secure channels. Read about lightning if you're interested for a possible implementation.

[mttddd]

I fully agree with beerbarron and this why the block size is not simply being increased despite the pressure. However, far from all transactions need the level of security and censorship resistance as Bitcoin and therefore part will be offloaded to less secure channels. Read about lightning if you're interested for a possible implementation.

 

Yep lightning and other things like it are in my opinion the eventual solution to concerns about block chain size and transaction speeds. You would still move large sums through the normal block chain since you want that added security but micro transactions that dont need that same security (buying a soda or gas for your car) will require something like lightning to get the transaction speeds and transaction fees down.

[Liberty]

The bitcoin blockchain is currently 124GB (it would fit on a USB stick).  That is tiny, it could grow 100X and it would still be easy for anyone to keep a copy of it.  Even if it were to grow 1000X it wouldn't be much of a problem to keep at home. If it were to grow a million times it wouldn't be much of a problem for miners to keep a copy of it (and probably not home users either by the time it does get that big).

 

Are you talking about current storage or future theoretical storage?

 

Because your examples seem a little stretched to me.

 

124GB growing 100x is 12.4TB, which is more than what most people have available at home, so I wouldn't say it's "easy for anyone to keep a copy".

 

124GB growth 1000x is 124TB, which is definitely out of reach of any normal person right now, so I wouldn't say "it wouldn't be much of a problem to keep at home"... Even at the sweet spot of a 4TB HDD, that's 31 hard-drives, or about $4,000 of HDDs, plus the NAS enclosures, plus probably redundancy, which is many other thousands depending on the RAID scheme. So we're probably talking about close to the price of a small car just to store a 1000x larger blockchain.

 

As for a million times bigger than 124GB, that's definitely not that easy to keep a bunch of distributed copies among miners everywhere with anything close to current technology.

 

Maybe I misread, or misunderstood what you said, but I was thinking that the multiples of 124GB you were talking about didn't seem that small to me. Maybe you were thinking about theoretical future storage capabilities...

[rkbabang]

The bitcoin blockchain is currently 124GB (it would fit on a USB stick).  That is tiny, it could grow 100X and it would still be easy for anyone to keep a copy of it.  Even if it were to grow 1000X it wouldn't be much of a problem to keep at home. If it were to grow a million times it wouldn't be much of a problem for miners to keep a copy of it (and probably not home users either by the time it does get that big).

 

Are you talking about current storage or future theoretical storage?

 

Because your examples seem a little stretched to me.

 

124GB growing 100x is 12.4TB, which is more than what most people have available at home, so I wouldn't say it's "easy for anyone to keep a copy".

 

124GB growth 1000x is 124TB, which is definitely out of reach of any normal person right now, so I wouldn't say "it wouldn't be much of a problem to keep at home"... Even at the sweet spot of a 4TB HDD, that's 31 hard-drives, or about $4,000 of HDDs, plus the NAS enclosures, plus probably redundancy, which is many other thousands depending on the RAID scheme. So we're probably talking about close to the price of a small car just to store a 1000x larger blockchain.

 

As for a million times bigger than 124GB, that's definitely not that easy to keep a bunch of distributed copies among miners everywhere with anything close to current technology.

 

Maybe I misread, or misunderstood what you said, but I was thinking that the multiples of 124GB you were talking about didn't seem that small to me. Maybe you were thinking about theoretical future storage capabilities...

 

12TB is certainly in reach of any home user today.  You can buy 16TB of drives for $500 or 24TB for under $800.  Most motherboards can support 2-3 extra drives, but if you want a NAS you can get a 4 bay NAS for $200-$300.

 

124TB is out of reach right now for home users, but it won't be by the time the blockchain gets that big. And 124TB is easily and relatively cheaply available to large multimillion dollar mining operations right now.

 

A million times larger than 124GB is 124PB which will be in reach for large operations long before the blockchain gets anywhere even remotely near that size.

 

I think you underestimate how quickly storage capacity grows now, and especially how quickly it could grow if there was some huge demand driving the market far in excess of what's required today.

 

EDIT: Of course I was talking about a theoretical future, because in todays know reality you can hold the entire blockchain on a thumb drive for $40.

[Liberty]

Ok, thanks. Your phrasing made it sound like you thought those orders of magnitude bigger numbers were small for today's  consumer storage.

[InvestingOnSale]

So two questions have been troubling my mind over crypto currencies and I'm lik e non fanatic opinions on each of those.

 

The ledger or full blockchain size.

I don`t see how it would be feasible to have an exponentially growing ledger at the rate that would make bitcoin widely adopted. I can foresee the size growing at a rate much faster than any hd of SSD capacity. Las time I checked HDD were doubling every 3 years but I'm fairly certain that a a full transaction ledger would grow much faster than that. It has two problems against it, 1st as the growing user base grows it also grows the amount of transactions. So in a sense we might not be working on a much more aggresive power than HHD drive capacity. ID be happy to see anybody prove me wrong on this one but I do think there is one fundamental law, the size of the ledger cango to infinity, the size of a hard drive cannot.

 

While it is true that the ledger size is open ended, at any given time the ledger size is finite and will always be finite.  There is no such thing as an infinite sized ledger.    The bitcoin blockchain is currently 124GB (it would fit on a USB stick).  That is tiny, it could grow 100X and it would still be easy for anyone to keep a copy of it.  Even if it were to grow 1000X it wouldn't be much of a problem to keep at home. If it were to grow a million times it wouldn't be much of a problem for miners to keep a copy of it (and probably not home users either by the time it does get that big).  To put 124GB in proportion to the amount of storage in the world from wikipedia (keep in mind that 1 petabyte = 1,000,000 GB:

 

• Games: World of Warcraft uses 1.3 petabytes of storage to maintain its game
  
• Steam, a digital distribution service, delivers over 16 petabytes of content to American users weekly
  
• Cloud backup: Multiple backup vendors, including Code42, Backblaze, and Mozy claim to store 90 or more petabytes of user backup data
  
• Physics: The experiments in the Large Hadron Collider produce about 15 petabytes of data per year, which are distributed over the Worldwide LHC Computing Grid.[26] In July 2012 it was revealed that CERN amassed about 200 petabytes of data from the more than 800 trillion collisions looking for the Higgs boson
  
• Climate science: The German Climate Computing Centre (DKRZ) has a storage capacity of 60 petabytes of climate data
  
• Folding@home (Scientific Data): Folding@home has generated 0.5 petabytes of simulated data
  
• Google Photos has an estimated of 13.7 petabytes worth of photos uploaded in the first year of its existence
  

 

The storage capacity of the world right now is measured in zettabytes (1 zettabyte = 1,000,000 petabytes), and it is doubling every 1-3 years.  Blockchains would have to grow at an enormous rate for a long-long time before storage would be an issue. And if it did become an issue someday that would push innovation and start to drive the storage industry the way mining (and AI as well) is going to start to drive the GPU industry. There won't be a shortage for long as NVIDIA, AMD, and others will ramp up production to try and meet demand. There are already GPU cards coming out specifically designed for mining.  And bitcoin, of course isn't even mined with GPUs anymore, but custom chips specifically designed to mine bitcoins.

 

I agree with the point rka is making, and I would add that there are also potential changes to the Bitcoin blockchain in the future that could make it more manageable. For instance:

 

1. Once the blockchain size got to, say, 100 TB, perhaps the blockchain breaks in two: the Historical Blockchain (stored on only a few thousand computers around the world) and the Current Blockchain (with wallet holdings starting at some arbitrary block height, and all transactions moving forward from there). Users only store the Current Blockchain on their computers. (I realize there are exponential growth challenges here.)

 

2. Or, at the point we are talking about, there might be many millions of computers around the world using the blockchain. Perhaps a technology is built whereby, instead of every computer acting as a node, clusters of, say, 100 computers act as a single node. That would reduce any single computer's storage need to 1/100th what it was previously.

 

While the current Bitcoin blockchain depends on every user storing the entire blockchain, there could be potential solutions to change that in the future, to cope with storage constraints while preserving the distributed ledger principle.

[Liberty]

BTC just went to 1800, ETH to 130... Talk about volatility for 'currencies'.

[mttddd]

Indeed, Iv been having good success trading though

[rkbabang]

I haven't been trading, but for the first time in more than a year I've started buying again.  I've been buying more BTC, because I already own 3x more ETH than BTC (in $US value).  There's not a whole hell of a lot to buy in the stock market right now, so some new money is going into BTC presently.