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Bitcoin Misinformation


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2020 Nov 10, 10:01am   136,283 views  2,177 comments

by Onvacation   ➕follow (4)   💰tip   ignore  



In my opinion, it’s a colossal pump-and-dump scheme, the likes of which the world has never seen. In a pump-and-dump game, promoters “pump” up the price of a security creating a speculative frenzy, then “dump” some of their holdings at artificially high prices. And some cryptocurrencies are pure frauds. Ernst & Young estimates that 10 percent of the money raised for initial coin offerings has been stolen.

The losers are ill-informed buyers caught up in the spiral of greed. The result is a massive transfer of wealth from ordinary families to internet promoters. And “massive” is a massive understatement — 1,500 different cryptocurrencies now register over $300 billion of “value.”

https://www.vox.com/2018/4/24/17275202/bitcoin-scam-cryptocurrency-mining-pump-dump-fraud-ico-value

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1618   Maga_Chaos_Monkey   2022 Feb 1, 8:34pm  

Onvacation says
Definition of sound money

: money not liable to sudden appreciation or depreciation in value : stable money specifically : a currency based on or redeemable in gold — compare paper money.


We all saw the dictionary companies change the definition of many things over the past 2 years. 'Vaccines' etc... The person who coined the phrase was Aristotle as far as I know unless someone before him did. Here is a gold bug blurb about it:

https://www.bullionvault.com/gold-news/money_aristotle_050120092?source=patrick.net

Notice there isn't anything in there about gold or volatility?

On that note I DO agree with you and the dict, sound money shouldn't be volatile. I did not say bitcorn was sound money. I suggested I'm a sound money proponent and that's the upside to bitcorn: It's volatility is generally positive (good!) and at some point it'll flatten out and become sound. I'm guessing that'll be true when there are a few billion people using it.

I think the days of insane overnight gazillionaires are over and there is much less upside but I think a 10x is given and likely much much more. I'll be happy if it beats the USD inflation plus some sort of decent premium over the long term. I expect I'll be happily surprised.
1619   Maga_Chaos_Monkey   2022 Feb 1, 8:37pm  

Onvacation says


I'd (for now) put asterisks next to bitcorn being 'durable' and 'secure' simply because it hasn't existed for very long. Many people make the mistake that bitcorn has been hacked which isn't true. Those were essentially bank robberies or the feds scrapping aws ec2 instances because morons left their bitcorn up there.

I do believe it's durable and secure though - we shall see.
1620   Maga_Chaos_Monkey   2022 Feb 1, 8:40pm  

clambo says
Actually I never thought about Bitcoin until my friend bragged about her nephew having it recently.


You don't have to. You've made great choices with your mutual funds and it paid off. I'm afraid younger generations (I'm X, younger than moi) won't be able to recreate your success.

This is one way for some of millennials and zennnials to catch a break. It's a somewhat short term period before things flatten out for good. Last I read >95% of crypto was held by those two generations. Lots less with X -> Boomers -> Silent in that order.
1621   Maga_Chaos_Monkey   2022 Feb 1, 8:43pm  

clambo says
Gold bugs can easily trade GLDM but lose the expense ratio 0.18%.


I've been staring at the gold and silver markets for nearly a year. Feels like I should have stacked some last summer. I do think they are something people should have. Cannibal Anarchy could happen. The sun could decide to EMP the earth and shut down the internet for an extended period. I think gold and silver are great for that situation despite the lackluster performance over the past decade. Even if they don't do as well this year as I think they might.

But that damn premium just kills me. For silver in particular it's like 50% over spot. If you try to buy a monster box of silver it's more expensive per coin that just buying singletons. WTF is up with that? I know it's heavier/$ and takes workmanship and shipping but damn.
1622   Maga_Chaos_Monkey   2022 Feb 1, 9:12pm  

People chided those new fangled electric candles at one point. Candles worked just fine for thousands of years.

FJB says
bury it


If I buried it I couldn't make 100,000 $10 loans which expire in 24hrs and automatically irrevocably retrieve the interest and principle I charged as per the smart contract.
1623   Patrick   2022 Feb 1, 11:26pm  

It all depends on no one ever being able to figure out how to reverse the md5 or whatever hashing algorithm they are using.

That is, if someone figures out a quick way to say "given this input block, what unknown string must I tack on to the block to get the hash of the string to come out with a certain number of zeros at the end?"

It's totally possible someone might figure that out, then it's game over and all bitcoin will belong to that person. It will then take about zero energy for that person to mine coins, and it will be very fast. Whoever can do the calculation first gets the vig from the validation of that block.

Currently, people who want to mine coins have to just try all possible unknown strings until they get a hit. That's what's using up all the energy and making it slow.
1624   Onvacation   2022 Feb 2, 5:52am  

Patrick says
That's what's using up all the energy and making it slow.

By design.

If people start mining too fast the puzzles get harder, by design.

"Mining", "coin", "digital gold" it's all a big scam to lure in the gullible, by design
1625   Onvacation   2022 Feb 2, 5:54am  

FJB says
If I buried it I couldn't make 100,000 $10 loans which expire in 24hrs and automatically irrevocably retrieve the interest and principle I charged as per the smart contract.

So you rent out your digital gold? You've got to explain that one.
1626   Maga_Chaos_Monkey   2022 Feb 2, 8:49am  

Onvacation says
So you rent out your digital gold? You've got to explain that one.


No I don't personally do that but that's an example of what someone can do.
1627   Maga_Chaos_Monkey   2022 Feb 2, 8:57am  

Patrick says
It all depends on no one ever being able to figure out how to reverse the md5 or whatever hashing algorithm they are using.


https://www.movable-type.co.uk/scripts/sha256.html?source=patrick.net

"SHA-256 is one of the successor hash functions to SHA-1 (collectively referred to as SHA-2), and is one of the strongest hash functions available. SHA-256 is not much more complex to code than SHA-1, and has not yet been compromised in any way. The 256-bit key makes it a good partner-function for AES. It is defined in the NIST (National Institute of Standards and Technology) standard ‘FIPS 180-4’. "

This is upgradeable if say, super duper computers become common. Reality that's what everyone has been trying to do for the past decade - break it. Nobody has. There is something called a 51% attack that is more likely but it would require a nation state to buy up all of the high end compute over maybe a 6 month period costing billions. People would notice and the network could be hardened.
1628   Bitcoin   2022 Feb 2, 8:58am  

FJB says
Onvacation says
So you rent out your digital gold? You've got to explain that one.


No I don't personally do that but that's an example of what someone can do.


Crypto allows you to lend out your funds (peer-to-peer lending) for an interest payment and/or to stake your crypto for a reward.
I stake my ADA and Dot and earn between 5% for ADA and 12% for DOT (on Kraken). But I get the staking reward payout every 5 days, so the staking rewards are like an compounding interest payment (staking rewards on staking rewards) :)

If you burry your gold, you dont earn any staking rewards. You can also not lend buried gold to anyone. You might also not find your gold again if you lose your map. Also, your gold does not really appreciate in value. Bitcoin is up more than 10,000% in the last few years. Gold has remained at the same value. Gold is a terrible inflation hedge. Stocks, Crypto and RE are an excellent inflation hedge.

Its no surprise to me that the guy (Bill) who pays 10k for a matchbox car also thinks about buying gold to burry it.
1629   Maga_Chaos_Monkey   2022 Feb 2, 9:00am  

Bitcoin for Corporations:

https://www.youtube.com/watch?v=XdgP25UcHB0&source=patrick.net

It's long and I haven't watched it all but the last segment starting at 3:00:00 is Saylor and Lyn Alden and can bring people up to date with the latest. Lyn has great macro analysis for lots of things not just bitcorn.
1630   Bitcoin   2022 Feb 2, 9:05am  

FJB says
This is upgradeable if say, super duper computers become common. Reality that's what everyone has been trying to do for the past decade - break it. Nobody has. There is something called a 51% attack that is more likely but it would require a nation state to buy up all of the high end compute over maybe a 6 month period costing billions. People would notice and the network could be hardened.


spot on. Its more likely that we will see a zombie outbreak or an alien invasion before someone hacks Bitcoin. But, if someone manages it, more power to that person (pun intended). That would be a nice way to go down in the history books. So, get on it, hack Bitcoin! Best of luck and let us know how it goes!
1631   clambo   2022 Feb 2, 9:08am  

I mentioned it elsewhere but I bought some of an ETF of Swiss stocks, which I consider my defensive investment, rather than gold or similar.

I have no doubt that the Swiss Franc will be a strong currency, and the few Swiss companies in the index are likely to be around for a long time (e.g. Nestle).

FLSW has a low expense ratio.
The time I visited Switzerland 🇨🇭 I bought 3 Swiss Francs for $1 USD. Today $1 USD doesn’t buy 1 Swiss Franc.

My problem is I don’t have new money coming in so I will have to sell something to buy more.
1632   Bitcoin   2022 Feb 2, 9:22am  

clambo says
My problem is I don’t have new money coming in so I will have to sell something to buy more.


unemployed, looking for work or are you retired?
1633   clambo   2022 Feb 2, 10:05am  

I’m retired from working.
1634   Bitcoin   2022 Feb 2, 10:31am  

clambo says
I’m retired from working.


Congrats!
Knowing you are retired I am even less surprised that you haven't looked too much in crypto and Bitcoin. As others said before, its a tool for younger generations to generate life changing wealth (catch up). I plan on using my crypto gains to buy more stocks and investment properties to retire early.

If i am retired that means I already made enough money and can just live off of my portfolio. In my retirement I don't want to invest in high volatile assets.
1635   Zak   2022 Feb 2, 12:38pm  

I love all this talk about "securing bitcoin". Can't make more of it.. lol.. while ignoring the 15k other digital currencies that everyone simply makes more of. AHAHAHAHAHAHAAHAAHAHA
1636   Bitcoin   2022 Feb 2, 12:58pm  

Zak says
I love all this talk about "securing bitcoin". Can't make more of it.. lol.. while ignoring the 15k other digital currencies that everyone simply makes more of.


@Zak
Exactly! You just gave the most bullish argument for Bitcoin!
So, we have 15k other cryptos but countries and Elon Musk are only buying Bitcoin. They dont hold just any crypto on their balance sheet. Only Bitcoin. Have you asked yourself why?


....not expecting a cogent answer.
1637   Patrick   2022 Feb 2, 1:14pm  

Bitcoin says
FJB says
This is upgradeable if say, super duper computers become common. Reality that's what everyone has been trying to do for the past decade - break it. Nobody has. There is something called a 51% attack that is more likely but it would require a nation state to buy up all of the high end compute over maybe a 6 month period costing billions. People would notice and the network could be hardened.


spot on. Its more likely that we will see a zombie outbreak or an alien invasion before someone hacks Bitcoin.


I don't see how you can be sure of that.

Maybe it won't take any significant computing power, but just one person clever enough to figure out how to reverse the hash quickly and with low compute time.

The question is, how much you are willing to bet that there is no one smart enough to do it?

https://www.nsf.gov/discoveries/disc_summ.jsp?cntn_id=100029&org=NSF&source=patrick.net

350 Years Later, Fermat's Last Theorem Finally Proved


I'm not talking about the 51% attack, but instead the ability to hash each block instantly.
1638   Bitcoin   2022 Feb 2, 2:17pm  

Patrick says
Bitcoin says
FJB says
This is upgradeable if say, super duper computers become common. Reality that's what everyone has been trying to do for the past decade - break it. Nobody has. There is something called a 51% attack that is more likely but it would require a nation state to buy up all of the high end compute over maybe a 6 month period costing billions. People would notice and the network could be hardened.


spot on. Its more likely that we will see a zombie outbreak or an alien invasion before someone hacks Bitcoin.


I don't see how you can be sure of that.


Because it has been "hack-proof" for >10years now. If people who are a lot smarter and richer than me invest billions into Bitcoin why should I worry about something that we have zero evidence for? The reason why THEY invest in Bitcoin is because they know how secure it is. If there would be evidence that suggests it can just be hacked, nobody would invest a dollar in it.

IMO its more likely a meteor will hit me swimming in my pool than Bitcoin to be hacked by a clever person. I gladly take my chances and are willing to bet anything on it. I am happy to agree to disagree.
1639   Zak   2022 Feb 2, 2:45pm  

"No one can hack bitcoin"

-- read 15 articles per week about various forms of peoples bitcoin being hacked

"but that's not bitcoin, it's just the ECOSYSTEM!"

BWAHAHAHAHAHAHAHA
1640   Bitcoin   2022 Feb 2, 3:07pm  

Zak says
"No one can hack bitcoin"

-- read 15 articles per week about various forms of peoples bitcoin being hacked

"but that's not bitcoin, it's just the ECOSYSTEM!"

BWAHAHAHAHAHAHAHA


That's exactly right @Zak, and thats the reason why people believe in Bitcoin's security. Since its existence there was not one incident where the Bitcoin code has been hacked. Thats why its considered "hack-proof".

That is fundamentally different from a hacker stealing bitcoin. If you leave your Bitcoin (or any other crypto) on an exchange, then it can be stolen through hacks.
There is a saying: not your keys, not your crypto.

To dumb this down: move your crypto to a cold storage/hardware wallet. Nobody can steal, hack or confiscate Bitcoin that is stored on a hardware wallet. Even if someone finds your hardware wallet, they can not access it without the private keys. :)
1641   Onvacation   2022 Feb 2, 3:28pm  

The fact that Bitcoin has no intrinsic value is not a problem. It is bought and sold for fiat currencies.

The fact that the dollar, euro, yuan, etc. have no intrinsic value, that's the problem.
1642   Onvacation   2022 Feb 2, 3:44pm  

Patrick says

I'm not talking about the 51% attack, but instead the ability to hash each block instantly.

Could happen. Never underestimate the power of a programmer.

Currently miners just solve the hash by brute force. I am sure some miners have already tried to tweak the basic algorithm to be the first. Like Enigma in WW2 it is a battle of cryptographers.

But Bitcoin is set up so the coins are released at a "Halvening" rate so that the scam can go on well beyond the lifetime of the HODLers.

Here's a narrative of the algorithm.

When the mining a block the Bitcoin mining algorithm works like this:

1. A block starts out with a header and a single transaction to pay the miner reward. This transaction has a special name (called the “coinbase”).

2. Transactions are added to the block.

3. A block “header” of fixed length is formed by doing cryptographic hashes of the transactions (called the Merkle root).

4. Mining uses SHA256 cryptography which breaks the data up into 64 byte chunks and operates on each chunk so there are 2 chunks and 2 steps to the SHA256 algorithm in this case.

5. The first sha256 step is performed on the first chunk of the header and that does not change. This is called the “midstate” because it is partway through the SHA256 process which is 2 steps in this case. The “midstate” is sent to the ASIC processor,

6. The second step of SHA256 is done on the second chunk of the header. This includes the nonce field. This is done on the Application Specific Integrated Circuit (ASIC) chip.

7. The entire solution is run through a second round of SHA256 and the solution compared to the difficulty (that is part of the block header). The nonce is returned if it meets the difficulty. This is done on the ASIC chip.
8. The nonce is incremented and the last 2 steps (6 and 7) are done again 2**32 times to exhaust all possible nonce values. This is done on the ASIC chip.

9. If no solution is found another nonce contained within the coinbase transaction is incremented. This changes the hash of the coinbase transaction and the merkle root

10. The process goes back to step 5 and continues until a solution is found.


https://cointext.com/glossary/mining/what-problem-is-solved-by-bitcoin-miners/?source=patrick.net
1643   Onvacation   2022 Feb 2, 3:50pm  

Currently the price is basically set by whatever the miners can get for the artificially scarce "Coin". I suspect the system will crash when a couple HODLer whales die and their heirs try to cash out only to find there is no there there.
1644   Bitcoin   2022 Feb 2, 6:11pm  

Onvacation says
Currently the price is basically set by whatever the miners can get for the artificially scarce "Coin".


That's why this thread is called Bitcoin misinformation :)

Bitcoin's price is set by the market. Supply and demand. If there are more buyers than sellers the price goes up. Over time Bitcoin's price trends higher due to a supply shortage and high demand.
1645   Zak   2022 Feb 2, 6:12pm  

https://www.coindesk.com/markets/2022/02/01/hackers-move-383m-worth-of-bitcoin-from-2016-bitfinex-hack/?source=patrick.net

BWAHAHHAHAHAHA


yup.. no bitcoin hacks ever... the "code" is secure.

BWAHAHAAHAHAHA
1646   Bitcoin   2022 Feb 2, 6:17pm  

Zak says
up.. no bitcoin hacks ever... the "code" is secure.


Thats 100% correct. Bitcoin's code has never been hacked. Bitcoin can be stolen from exchanges. Just keep your precious coins (digital gold) on a cold storage and they will be safe!
1647   Maga_Chaos_Monkey   2022 Feb 2, 8:21pm  

Bitcoin says
That's why this thread is called Bitcoin misinformation :)


LOL so true!
1648   Maga_Chaos_Monkey   2022 Feb 2, 8:23pm  

Patrick says
The question is, how much you are willing to bet that there is no one smart enough to do it?


Now THAT'S the real question. Not that it's a scam or pyramid scheme.

My answer: 3%

Patrick says
350 Years Later, Fermat's Last Theorem Finally Proved


I don't think bitcorn will be around in 350 years.
1649   Maga_Chaos_Monkey   2022 Feb 2, 8:24pm  

Onvacation says
The fact that Bitcoin has no intrinsic value


False... But I get it, you're thinking in the physical world....
1650   Maga_Chaos_Monkey   2022 Feb 2, 8:27pm  

Onvacation says
It is bought and sold for fiat currencies.


Typically yup, but it doesn't have to be. In the US for sure.. Nothing stopping someone from trading a nice fat pig for a bit-o-bitcorn in Truckistan though.
1651   Maga_Chaos_Monkey   2022 Feb 2, 8:29pm  

Alright, I'm out of this thread for a while. @onvacation thanks for the banter/fun and not betting bugged at me for calling you Bill.

I hope everyone makes a tidy sum in the fucked up markets we're looking at whatever they get into.
1652   Onvacation   2022 Feb 2, 8:59pm  

FJB says
Bitcoin says
That's why this thread is called Bitcoin misinformation :)


LOL so true!

This chart, or one like it, was introduced by user bitcoin.
1653   Bitcoin   2022 Feb 2, 9:00pm  

Onvacation says
FJB says
Bitcoin says
That's why this thread is called Bitcoin misinformation :)


LOL so true!

This chart, or one like it, was introduced by user bitcoin.


Yep, and its still valid today :) thanks for re-posting it.
1654   Onvacation   2022 Feb 2, 9:03pm  

FJB says
Onvacation says
The fact that Bitcoin has no intrinsic value


False... But I get it, you're thinking in the physical world....

It has no intrinsic value.

It has some utility if you are laundering money, paying a ransom, trafficking humans, or like to gamble, but no intrinsic value.

You can't make a cogent argument against the facts I have laid out.
1655   Onvacation   2022 Feb 2, 9:03pm  

FJB says
Alright, I'm out of this thread for a while.

And you won't even try.
1656   Onvacation   2022 Feb 8, 9:57am  

A pump and dump scheme unfolds like this:

The scammers behind the pump and dump buy a random cryptocurrency or token cheaply

When they have bought enough of the crypto, they will hype the purchased crypto on social media, often through popular finfluencers (aka financial influencers)

The people who are being reached by this hype think they can get rich by buying the cryptocurrency

People get excited and buy the crypto

Because the cryptocurrency is now hyped and people are buying, the value of the crypto goes up

When the crypto reaches a certain target value, the scammer then sells all their cryptos

This creates lots of supply, and causes the value/price to drop

Many people who have stepped into the pump and dump see the price drop, and also sell their cryptocurrencies in a panic, trying to minimize loss

The later you stepped in, the more you paid for the crypto, the greater your loss
1657   komputodo   2022 Feb 8, 11:03am  

FJB says
Bitcoin says
That's why this thread is called Bitcoin misinformation :)


LOL so true!

I'm still trying to understand why you 2 guys are hyping bitcoin so much? To what point?

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