patrick.net

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.

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

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.

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.

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

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!

Bitcoin says

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

LOL so true!

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.

Onvacation says

The fact that Bitcoin has no intrinsic value

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

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.

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.

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.

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.

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.

FJB says

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

And you won't even try.

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

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?

komputodo says

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

Bitcoin doesnt need hype. Inflation and institutional demand is driving the price up + limited supply.

All we do is correct the misinformation that OV spreads. Correcting someone on false statements isnt hyping.

If you steal $1 billion. They will find you.

https://www.msn.com/en-us/news/us/feds-arrest-married-couple-seize-3-6-billion-in-hacked-bitcoin-funds/ar-AATCpkY?ocid=msedgdhp&pc=U531&source=patrick.net

Yet another shortcoming of bitcoin / blockchain: there is a transaction history that is globally available of the transfer of funds between each wallet. No anonymity is possible.

Lets say you buy a survival food ration kit from survivalkits4less.. your bitcoin wallet is now tied to that sellers wallet via a completely historically logged transaction.

In 2 years when shit breaks loose, there is your global log of everyone who has food. just look for the transactions publicly available on the blockchain. Now you have wallet ID's, just start searching other wallet purchases, and you can build a profile of everything purchased from that wallet. Now you can just cross off all of the wallets that also purchased from guns4less, and here is your scrubbed list of easy targets.

Or worse, lets say you are selling something.. You get a big purchase of $10k.. But oops.. 3 days later, here come the feds, and it turns out that transaction was using a wallet that had stolen $75M from one of the crypto exchanges... Your wallet is seized, and you are forced to return the funds to the "rightful" owner. The log is clear that you received stolen bitcoin. OOPS!!

So now to be protected in a transaction, you either have to use a transaction broker that agrees to check flagged wallets for you, or you have to write your own software to ensure you don't get a downchain transaction off a flagged wallet. Oh bitcoin transactions are SOOOO easy.. LOL!!!

Zak says

No anonymity is possible

you Bitcoin haters should make up your mind.....on the one hand side you are saying only criminals use Bitcoin on the other side you say when you use Bitcoin your identity gets revealed. So which one is it? Maybe only dumb criminals use Bitcoin? I would agree with that....its much better to use cash if you plan on doing something shady :)

Yeah.. so which is it.. Has bitcoin never been hacked, or did bitcoin hackers with 3 billion in bitcoin just get caught and have their wallets confiscated and forced to return the money? I'm confused. I thought it was so secure it could never be hacked, and so secure that the government could never force anyone to give up their bitcoin.That makes this msn story so strange, doesn't it!?!

It looks like the wallets that the hacked bitcoin got transferred to were anonymous... until they weren't, right!?!? AHAHAHAHA. And its not like China can shut down bitcoin mining in the country in an authoritarian manner.. oh wait.. that happened. .

Yes, I do it for the lolz

Bitcoin says

Zak says

No anonymity is possible

you Bitcoin haters should make up your mind.....on the one hand side you are saying only criminals use Bitcoin on the other side you say when you use Bitcoin your identity gets revealed. So which one is it?

Not expecting a cogent answer

Oh yeah.. and what is it called when you put the words of a failing argument in someone else's mouth then try to knock them down. ooooohhhh that's right.. strawman

I'll take 'signs that you don't have a winning argument' for 1000 Alex

LOLZ!!

Zak says

I'll take 'signs that you don't have a winning argument' for 1000 Alex

Did I miss something?

Bitcoin says

All we do is correct the misinformation that OV spreads. Correcting someone on false statements isnt hyping.

Ok, why do you waste your time correcting bitcoin 'misinformation"?

komputodo says

Bitcoin says

All we do is correct the misinformation that OV spreads. Correcting someone on false statements isnt hyping.

False statements?

Like Bitcoin is a scam?

Or, the only way to make money with crypto is to find a bigger fool?

Or maybe, Bitcoin is unsustainable?

What false statements have I made?

I'm not going to unignore Bitcoin to find out what they think.

komputodo says

Bitcoin says

All we do is correct the misinformation that OV spreads. Correcting someone on false statements isnt hyping.

Ok, why do you waste your time

I think OV and others deliberately spread false statements about Bitcoin because crypto is a threat for them somehow.

We know OV invests in silver coins and matchbox cars. Maybe he wanted millennials to fomo into silver instead of Bitcoin? I think there isnt any hope for him :)

Why are you on this thread komputodo? Do you own Bitcoin, ETH or any altcoin? Maybe Cardano?

Notice how the Bitcoin haters never post any articles? Its just spam and false statements but never any backup :)

On the contrary, many people on this blog correct the misinformation and post actual facts.

For instance:

Russia just declared Bitcoin legal tender:
https://www.fxstreet.com/cryptocurrencies/news/russia-recognizing-crypto-as-a-form-of-currency-validates-wells-fargos-hyper-adoption-outlook-202202091425?source=patrick.net

Sry Haters :)

Didn’t someone steal 120,000 bitcoins?
Nobody can do that to me.
I use voice recognition to access my accounts.
With my phone it’s my fingerprint.
If I am using the website, they send a code to my phone to get access.
My bank account never has shit in it so I don’t care about the ATM card being cloned.

clambo says

Didn’t someone steal 120,000 bitcoins?
Nobody can do that to me.

Of course not, you dont even own one Bitcoin! How could they possibly steal one from you.

I own 2 BTC, and they cant steal them because its on a cold storage. If you leave Bitcoin on an exchange, it can be stolen> Not your keys, not your crypto.

Leaving crypto on an exchange is like you leaving gold in a safe deposit box at your local bank. It can be stolen.

Instead, you store it on a hardware wallet/cold storage. Even if they steal your hardware wallet, they cant access it without your keys. :) It just cant get any safer!

Bitcoin says

Why are you on this thread komputodo?

Because I find it interesting to watch people argue over pointless bullshit.

$10 Trillion Asset Manager BlackRock To Offer Crypto Trading: Report
The world’s largest asset manager BlackRock, Inc. is reportedly preparing to
launch a cryptocurrency trading service for investors.

These bigger fools will need to buy crypto if they plan on managing crypto...

Checkmate ;)

Cash says

These bigger fools will need to buy crypto if they plan on managing crypto...

Do you think BlackRock is gonna HODL? Or do they just want to cash in on the fools buying crypto by collecting commissions?

I don't think they're HODLing.

Onvacation says

Do you think BlackRock is gonna HODL

https://www.benzinga.com/markets/cryptocurrency/22/02/25532512/10-trillion-asset-manager-blackrock-to-offer-crypto-trading-report?source=patrick.net

In reality if they are managing crypto for their clients they have no choice but to hold what ever clients allow them to manage. Or don't you know a thing about
what it means to be a custodian of a "clients assets"?

Checkmate still Stands!!!

I have traded both BTC and ETH and I related when I sold them both near the top.
Also I am not the biggest fan of either but I do know for a fact blockchains and associated protocols will
be around many many years after you and I are gone take it to the bank.

Watch the fools buy BTC up to a min. of 89k and possibly 104k and depending on when that comes about
and the data associated is available will go from there. For the most part I have moved to alts and once that season is over
I'm selling most everything except my XRP positions and going to USDC while the bears do their thing and dump crypto to it's
knees then I will be there to pickup the discounts. I target applications with real application like XRP which will be on the world
scene in a big way in the very near future.

Cash says

Checkmate still Stands!!!

OK.

I don't remember you saying how to get your money out without a bigger fool paying you more than you paid for it.

The only way to make money with crypto is to sell it for more than you bought it for. No dividends. No assets. No product. No service other than making it easy for criminals to move money.

Foolsmate.

Blockchains are fine. Stupidly inefficient, but fine. For a while, people tried to say they could provide a system outside of government control. China then banned mining in country, and the use shortly after, and we kind of saw that the idea of things "outside of government control" are still subject to the physical limitations of the real world.

People also tried to make the argument that no one could ever take your bitcoin. They leave out the statement "if you have some kind of perfect real world behavior." Humans are still the weakest link in the chain. For bitcoin, you still need to physically give your money to someone. The places facilitating these trades are called exchanges.They get hacked. In addition, even if you pull your bitcoin out of the exchanges.. you have to make sure your private keys are never seen. This accounts for the much of stolen/confiscated bitcoin. Its really really hard to have bitcoin be usable, and also keep anyone from seeing your private key (if they are really trying to see it). You don't need to hack bitcoin if you just hack the computer you are using your private key on, or have the surveillance of the FBI at your disposal.

How many fingers will an attacker have to break before you tell them where your bitcoin key is? None of this is any different than other forms of money, including gold. It's just to demonstrate that all the "bitcoin is perfectly secure" is just marketing to get you to believe it has some extra security properties that other things don't have. The form of security that bitcoin has is extremely specific, not some broadly "unhackable unstealable" thing. And worse, as I mentioned previously, all transactions are logged and publicly viewable. So your transaction profile can identify you with very little other metadata needed to fully unmask you (say a shipping record from one of your transactions).

If you take all this problematic bullshit, and add to it a hugely expensive proof of work waste of global computing power and electricity, you get a largely slow, expensive, inefficient distributed database that doesn't really store a lot of data. There is some small value in the distributed log nature of the blockchain, but the "currency value" is largely due to everyone speculating that the price will rise, and they should buy some to participate in the speculation.. The alternative nature would be that everyone was trying to get bitcoin because it was so much easier to conduct online transactions, or store your facebook profile for sharing with friends or something. No one cares about any of that shit. You ask them "why should I buy bitcoin" and the answer is "because the price will go up.".

If bitcoin was a relatively stable thing, and you could buy 1 bitcoin for 1 dollar, and sell it for 99c (transaction fee), and you asked someone "why should I buy bitcoin" .. they would just say "I don't know" . Now, bitcoin people will love to point out the deflationary nature of bitcoin... There are a fixed amount of 21 million, and more can't be made. This is only true of "bitcoin" TM as a single entity. But at the same time, clearly bitcoin "clones" were made. Etherium. etc.. In pointing out that bitcoin can't be inflated away, there is nothing really as a magical benefit that is provided. The whole crux of the matter is pointing out a weakness in FIAT currency. This FIAT currency weakness is well known, and the US dollar is currently rapidly inflating away (7.5% official).

But bitcoin itself is FIAT currency. It was made to represent work completed, not useful work output. Well anything can represent work completed. That's why ethereum could just be made right alongside bitcoin. Nothing of value in bitcoin was created that would provide an enduring value and reason to use it instead of ethereum. Contract this to a commodity. Lets use gears as our example commodity. A finished gear is a proof of work. The bevels and teeth and tolerance are all observable measurable properties. And further, a finished gear can be placed into a machine and do useful work. You also can't just swap out a piece of paper for the gear. You actually need that work completed to accomplish that task.

A "finished" blockchain can do almost nothing, except record a transaction of itself between two wallets. And there are 10,000,000 other ways to also do this, and for a lot cheaper. Paper FIAT money is also proof of work. Clearly you can see the ink was placed onto a rectangular sheet of paper very carefully and with some very hard to replicate authentication mechanisms. The fundamental problem is the useful work that the output piece of paper can do. There is none other than physically representing moving between people's wallets as an indication of wealth transfer. And it shares the same problem as bitcoin. Even if there was a hard limit of 21 million US dollar bank notes...you can just print euros instead of dollars. There is nothing fundamentally value creating about printing currency. And if I wanted to record some distributed transaction, I could just use etherium instead of bitcoin. Nothing is distinct or special, or uniquely needed about the work done in a bitcoin blockchain, other than it is in an incompatible ecosystem to all other digital records (yet another drawback).

In order for a currency to truly have value, it must represent value created and able to be used. A gear preserves the value of the machine work that went into creating it. Beans and rice preserve nutritional value from the labor of the farmer growing it and harvesting it. Metal coins preserve the mining extraction and refining values of the metals they are minted from. I'm not saying this can't occur digitally. In fact it DOES, in the form of software. Software represents the work of engineers that went into writing and compiling that code, and the useful utilization and output of that software. I don't know how software could be treated as currency though. Only the restriction of software through keys and login access to remote systems can create value. Software itself, once produced can be copied infinitely with near zero degredation.

So instead of worrying about buying my depreciating share of digital tokens representing a ponzi scam of artificial scarcity, my personal choice is to create the value of write once, run millions of times software. And I try to invest a chunk into other people also doing that, because it truly seems like a world improving thing, as opposed to bitcoin, which is just another system of control and false scarcity.

Cash says

$10 Trillion Asset Manager BlackRock To Offer Crypto Trading: Report
The world’s largest asset manager BlackRock, Inc. is reportedly preparing to
launch a cryptocurrency trading service for investors.

Amazing. Fidelity, JPM....now Blackrock. All big players are entering the crypto game! Fabulous!