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Comment Re:The. ignorance is strong in this one. (Score 1) 294

I do agree with the parent -- to trade BitCoin, it can be purely physical (as in from bitcoinpaperwallet.com). However, if Alice gave a piece of paper with a wallet's private key to Bob and the identical one to Charlie, the first one who gets the transaction in the system and through the blockchain gets the BTC, the second is screwed.

True, you should trade physical bitcoins with people you trust.

As for the blockchain, there are supposedly shortcuts (mainly letting people run it for you...) but same problem with those as with exchanges. Said group can easily change results in order to snag your stuff or delay it enough for a double-spending attack to take place.

This applies to most online wallets(not all) , somewhat with SPV nodes but not really , but nothing to do with pruned nodes that are around 1GB in size.

Comment Re:The middlemen are winning (Score 1) 294

Bitcoin does me no good as I have to both pay to have it converted to hard currency and take the risk that it will devalue significantly in the time it takes to make the conversion. Today alone, interday fluctuation of the value of bitcoin was 3%, and 14% in the last week. There's no value in that kind of uncertainty in my income.

You are correct that bitcoin is far more volatile than the USD and does indeed have several shortcommings. A few points of clarification though:

You don't need to pay anything to convert BTC to Fiat , as merchant processors like coinbase and bitpay don't charge anything for this

You don't need to pick between Fiat and Bitcoin. You can use both and save a lot of money. When bitcoin is down 5-10% I spend my fiat, when it is up I spend Bitcoin and everything just became cheaper. In fact I can already save 20-30% on amazon with bitcoin , so spending it when it appreciates makes everything 25-40% cheaper!

Americans are spoiled because the US dollar is a relatively stable reserve currency. There are many countries that have currencies with insanely high inflation (vs US low 5-8%)and more volatility than Bitcoin. In fact, on a week a week basis bitcoin was more stable than the euro for 3 months this year.

Comment Re:The middlemen are winning (Score 1) 294

In many places outside the US and europe store owners give a discount if you use cash rather than a credit card. There are significant costs to accepting credit cards. In my country merchants get hit with 6-8% + chargeback costs, thus have a 8 to 16% overhead for accepting credit cards vs cash or bitcoin.

Comment Re:The. ignorance is strong in this one. (Score 2) 294

I was wondering that too. A cashless economy only makes one more dependent on banks because if the card doesn't work, one is SOL.

BitCoin is another alternative... but it requires Internet access or else one is at risk of being the victim of double-spending, and to be really sure, one needs the entire blockchain (going on 40+ gigs.)

You don't need the internet or even power to trade bitcoin. (Physical coins or paperwallets). The security concerns of physical bitcoins are the same with physical fiat. You do not need to download the full blockchain now either as you can use an SPV wallet, online wallet(I.E. circle/coinbase) , or have a pruned full node at about 1GB of space.

Comment Re:How much electricity was used last month to min (Score 1) 179

Sorry for responding a second time as I didn't realize you were the same person. The bottom line is that you may have been misled into thinking that Proof of Work is the only security mechanism for bitcoin and it will scale indefinitely as an arms race wasting power. This is a fair concern to have but also one that is exaggerated because PoW is only one security mechanism and in the future 99% of transactions will be done either off the chain or through inter-payment channels where there won't be direct payment to fund the "waste of resources" therefore no incentive to fuel a never ending arms race of "wasting electricity". To give you an idea of where we are right now -- there are between 100k -150k Tx per day but this represents only a small fraction of the volume as most volume right now exists "off the chain" and therefore not fueling the arms race of ASICs. In the near future Inter-payment channels will make settlement of on the chain a very small fraction of 1 % of the total volume. Bitcoin is actually much less environmentally dangerous than traditional fiat and payment rails.

Comment Re:How much electricity was used last month to min (Score 1) 179

Economics is already forcing some users to recycle the heat from ASIC's as space heaters and this demand will continue to grow. Additionally, the coinbase reward for mining is slowly being replaced by Tx fees which will continue to grow rapidly especially when sidechains and inter payment channels like the lightning network are scaffolded on top of Bitcoin to really scale bitcoin up from 4-7 transactions per second to over 100k tx per second. These proposals do not depend upon PoW (proof of work... but certainly supplementing security by this mechanism helps secure the network verses pure PoS. ) and upon other means to secure bitcoin like oracles, ricardian contracts , and mutisig. Thus the amount of energy needed for PoW does not need to scale proportionally with the transaction volume and the environmental concerns are wildly exaggerated.

Comment Re:How much electricity was used last month to min (Score 1) 179

Then consider those compute cycles could have been used for Folding@Home and actually helping humanity.

Economics is already forcing some users to recycle the heat from ASIC's as space heaters and this demand will continue to grow. Additionally, the coinbase reward for mining is slowly being replaced by Tx fees which will continue to grow rapidly especially when sidechains and inter payment channels like the lightning network are scaffolded on top of Bitcoin to really scale bitcoin up from 4-7 transactions per second to over 100k tx per second. These proposals do not depend upon PoW (proof of work... but certainly supplementing security by this mechanism helps secure the network verses pure PoS. ) and upon other means to secure bitcoin like oracles, ricardian contracts , and mutisig. Thus the amount of energy needed for PoW does not need to scale proportionally with the transaction volume and the environmental concerns are wildly exaggerated.

Comment Re:How much electricity was used last month to min (Score 1) 179

There is plenty of evidence that most bitcoin mines are moving to use hydroelectric power and geothermal. They aren't doing so out of a sense of environmental altruism , but simply because "greener" power is less expensive. http://gizmodo.com/why-bitcoin... http://www.datacenterknowledge... https://www.cryptocoinsnews.co... http://dealbook.nytimes.com/20... http://www.coindesk.com/my-lif...

Comment Re:How much electricity was used last month to min (Score 1) 179

Yes, that is out of date. It really isn't worth the botnet operators time to mine with CPU's and GPU's these days. They are better off holding the computer hostage with malware like crypto locker which encrypts their hard drive and demands ransom with Greendot cards and bitcoin.

Comment Re:How much electricity was used last month to min (Score 1) 179

Per transaction, or total?

I'm willing to bet that a single Bitcoin costs a whole lot more to produce than a credit card transaction takes to process.

Or to put it another way, if you were to replace the entire existing credit card system with Bitcoin, would it use more or less power than the current system?

---

Or perhaps if you were to be honest about the whole thing... Even with Bitcoin, you still are using the existing system, since very few places take bitcoin and most that do convert it into dollars or euros right away.

So you now have twice as many transactions, once for bitcoin, another for the "old guard" banking system.

Fair point. There are some initial costs to upgrading fintech and creating a fairer form of currency that doesn't rob people with unexpected inflation, bail outs, and bail ins. Even if you prefer inflationary fiat currencies instead of dis-inflationary ones with a planned social contract owned openly by the users you should be grateful that this competition will at least temporarily keep governments and banks slightly more honest.

Comment Re:Is bitcoin sustainable? (Score 1) 46

Yeah but your counter argument doesn't account for the sheer scale of what VISA and the banking system do compared to Bitcoin. OK the banking system uses more electricity, but what is the amortized cost on a per transaction basis? That's the question. Accoring to TFA the answer is VISA is HUGELY more environmentally friendly and cost effective than Bitcoin and, and this is the point, always will be because by design Bitcoin makes it harder to obtain coins depending on how much processing power (energy) is being expended to obtain those coins at any given time.

http://motherboard.vice.com/re...

If all bitcoin machines went solar however, then we might have a different outcome. The practicalities of that, given that Bitcoin assumes distribution of computing power, are not in Bitcoin's favor either.

Proof of work through ASICs is a very good security mechanism as attackers must spend real money on machines and electricty to attack the network and create 2-3 double spends before being caught and shutdown, but not the only method.

Already there are inter-channel payment protocols (https://lightning.network/lightning-network-paper-DRAFT-0.5.pdf and http://impulse.is/impulse.pdf are two examples among many) and off the chain transactions (Coinbase/circle/changetip are a few examples where there is no fee and wildly used). Right now there is ~118k transactions per day - https://blockchain.info/charts... but in reality the number of bitcoin transactions per day is much much higher as those numbers represent on the chain transactions. with the lighting network Bitcoin will be able to scale to higher levels of transactions per day than VISA , and without having to similarity increase the amount of ASIC's because those payment channels use multisig and ricardian contracts to secure while being ultimately backed up by PoW on the main chain.

Additionally, be aware that wasted electricity will start to be recycled as heaters(Whether hot water or space heaters). I already have some friends doing this to save on their heating bills and make money at the same time.

Comment Re:Is bitcoin sustainable? (Score 1) 46

That is insightful.

Thank you. Despite bitcoin being more efficient than traditional payment rails networks, there is some truth to what the article you mention is possibly alluding to. Decentralized network security is indeed expensive and much more costly than a few shared database ledgers. This is especially true for bitcoin at the moment with only 118k transactions per day and the massive overhead being spent to secure those transactions. There are two important reasons for this one must consider:

1) Bitcoin having a market cap of 3.7 billion and having immutable transactions needs to be extra vigilant on protecting the network and ledger from attacks whether coming from gangs of hackers or governments. There are some fixed costs here that are needed to superseded the hashpower of an attack and that once a certain level is reached the network will scale more cheaply.

2) Bitcoin primarily uses PoW(proof of work) as a security mechanism but other protocols are being layered upon it like sidechains and payment channels (lightning network) which dont require more hashing done by ASICs and add other security mechanisms like mutisig and ricardian contracts to add different layers of security which supplement bitcoin and allow it to scale past VISA in transactions per second while not adding blockchain bloat or more wasteful energy use.

Comment Re:Is bitcoin sustainable? (Score 1) 46

Bitcoin already uses 5000 times the energy visa does to record a financial single transaction. If parasites learn to use the bitcoin network for their own computations, that will get even worse. http://motherboard.vice.com/re...

The cited study is flawed as it doesn't account for the massive investment in call centers, offices, employees, auditors, and regulators that are needed to sustain the VISA payment rails network and the massive energy use and environmental impact those variables demand.

"Don't tell me I'm burning the candle at both ends -- tell me where to get more wax!!"

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