Survey: Bitcoin familiarity and use

The Rocketry Forum

Help Support The Rocketry Forum:

This site may earn a commission from merchant affiliate links, including eBay, Amazon, and others.

Bitcoin:How familiar are you with Bitcoin?

  • Bitcoin? Never heard of it.

  • I have heard of it, but have no idea what it is or how it works.

  • Heard of it, but could not care less.

  • Heard of it, but do not trust money I cannot hold in my hands.

  • Heard of it, and it is interesting.

  • I know what it is and generally understand how virtual currency works.

  • I own Bitcoin, but have never used it for a transaction.

  • I own Bitcoin, but rarely use it for transactions.

  • I own it, and use it all the time.


Results are only viewable after voting.
In line with one of the points in the "all cryptocurrencies are a scam" article I linked to above:

Litecoin founder Charlie Lee has sold all of his LTC

https://techcrunch.com/2017/12/20/litecoin-charlie-lee-conflict-of-interest/

It is the world’s fifth larger cryptocurrency, according to Coinmarketcap.com, with a total ‘market cap’ of more than $18 billion. It’s value, at the time of writing, is $330.14 per coin, up more than 75X from just $4.36 on January 1, 2017.
 
Long Island Iced Tea Soars 500% After Changing Its Name To Long Blockchain
The Market Ticker - Commentary on The Capital Markets
2017-12-21 by Karl Denninger

"Long Island Iced Tea Corp. today announced that the parent company is shifting its primary corporate focus towards the exploration of and investment in opportunities that leverage the benefits of blockchain technology. In connection with the shift in strategic direction, the Company has approved changing its name from “Long Island Iced Tea Corp.” to “Long Blockchain Corp.” and has reserved the web domain www.longblockchain.com. The Company intends to request Nasdaq to change its trading symbol in connection with the name change. The Company will continue to operate Long Island Brand Beverages, LLC as a wholly-owned subsidiary and maintain the focus of this business on the ready-to-drink segment of the beverage industry, specifically, premium, ‘better-for-you’ brands marketed at an affordable price."

Isn't that nice.

Remember the 1998/99 timeframe when any company that put the word internet or web into its name suddenly doubled, tripled, or went up in price by 10x? Not a single thing changed in its operation, but the name alone was good for that doubling.

Well, here we are again. When this happens in a so-called "market" the entire market is full of nothing but hot air.

The Fed doesn't care and Trump is cheering it, but pop it will, and when it does everything will get a big fat * up the chute at once.

Just remember folks that these sort of shenanigans, along with things like Apple intentionally trying to toss off warranty repairs in a fashion that tends to try to force you back into the store to buy another phone are all the hallmarks of extraction, which comes with bubbles. Buybacks and other machinations of that sort are another indication; when you cannot find an innovative use for your profits, that is, to actually improve the company, what you do is issue shares to the executives and buy back float so as to effectively steal equity from the common shareholders and give it to the executives. Not one person in a thousand realizes what's going on because the price goes up for a while but the decrease in float means that increase in EPS happens because the divisor got smaller, not because the actual gross earnings increased.

That's important because when losses come that same smaller divisor means the loss per share goes up by the exact same amount, and the resulting share price damage will also be multiplied.

Said executives will have sold their positions through "pre-planned" sales first, at least in part, while you will probably not since you think the price is going to continue to rise to the sky.

Beware pins.
 
Winston,

Speaking of bubbles, "blockchain" and crypto currencies are two different things. While there is a legitimate concern, and value of an on-going discussion on the currency side being a bubble, blockchain is not. Blockchain is a very real and emerging technology that will undoubtedly find its way into everyone's lives.

The hype side of blockchain is the typical financial market "stock promoter" side which ironically is what the grassroots side of the crypto currency movement is not a fan of, and is what is displayed in your article. It's the same hype that fuels the "green" sector, otherwise Tesla's stock would be a bit more grounded and not in the stratosphere. The Iced Tea Company is not listed on any crypto markets, it's on a stock exchange and sadly the rules allow them to do that. If you really don't like it, then I put forth that writing blurbs in a hobby rocketry forum is not an effective way to drive change.

While I agree that there is a lot of distasteful stuff going on, not everyone's intentions in the crypto currency side are nefarious. What would be a more productive conversation would be a non-partisan discussion on the realities of fiat currencies. Specifically how our governments seem to think the answer to paying back debt and financing their budgets is easily handled by just printing more money. And the fallout from that tactic such as the devaluation of the dollar and inflation.

Where do you believe the current tactics are going, who do you believe benefits from this strategy, would you characterize this strategy as a bubble, if so where do you think we are when it comes to the bubble popping and what do you think it will mean, who do you believe it will effect, do you believe it is sound economics or even common sense?
 
Winston,

What would be a more productive conversation would be a non-partisan discussion on the realities of fiat currencies. Specifically how our governments seem to think the answer to paying back debt and financing their budgets is easily handled by just printing more money. And the fallout from that tactic such as the devaluation of the dollar and inflation.

But Michael, Cryto currencies are solely backed by fiat currencies. The US Dollar is largely backed by oil. No one is able to buy anything in Bitcoin unless the seller can quickly and easily convert it into a fiat currency of their choice.
 
But Michael, Cryto currencies are solely backed by fiat currencies. The US Dollar is largely backed by oil. No one is able to buy anything in Bitcoin unless the seller can quickly and easily convert it into a fiat currency of their choice.

John if you google "what backs the US dollar" you will get quite a few opposing answers. So when you say with authority, "But Michael, Crypto currencies are solely backed by fiat currencies". It is more accurate that this your opinion and just one of many opposing opinions from more credible sources than you and me. I am not going to link all of the articles and opinions as anyone can Google this and read the differing viewpoints. Having said that after reading many of the opposing opinions from the "experts" I believe it is a more accurate to say that coercion is what holds the U.S. dollar system together.

Don't get me wrong I do not have a full authoritative "this is the way it is" on this topic, and I am not for/against fiat currencies or a specific cypto-currency. I believe fiat currencies are manipulated by governments which, first, benefit a select few elite, with the rest of us disproportionately paying the price. I also believe that the current system can be improved and that moving to "a" digital currency, backed by a proof of work cryptography has some advantages. I also don't believe that this has to be an all or nothing proposition or be about replacing a sovereign fiat currency. There is no reason why crypto currencies have to be solely defined and classified as a stateless digital currency but could be thought of as more a payment system, like PayPal or any credit card payment system.

As far as Bitcoin being "the one", who knows if it will survive, who knows if any of the current and proposed ones will go anywhere. I think the vast majority will fail due to various reasons, all of them being legit to a degree, and some of those reasons being cited in this thread. Corruption, scams, Ponzi schemes, loss of faith, government intervention through legislation and bureaucracy, poorly designed currencies, infighting, etc. However I don't see any of these reasons being solely applicable to crypto-currencies. These reasons are very much applicable to fiat currencies now or any form of currency that has ever existed.

As you rightly pointed out, adoption is the key, and so long as you cannot exchange a digital token for a product and or service, it will not be adopted and will simply be a speculative asset. However you are incorrect that you have to exchange it for fiat currencies. While that is mostly true for the vast majority, these digital forms of currencies or payment systems are gaining traction and will very likely continue to do so. There is a big push by a lot of people for wider acceptance which includes an ever growing use cases. This has also sparked a huge and growing industry to support this emerging technology. None of this is negative, which is too bad as a lot of these for or against conversations continue to be peppered with mistruths, rhetoric, etc., on both sides, which seems to be the norm these days.
 
Michael, of course it is my opinion. But it also my opinion that economic supply and demand rules are as fundamental as F=ma.

There is NO LIMIT to the supply of crypto-currencies that can be created out of thin air. But there are some political and social constraints that limit the growth and supply of fiat currencies. It is the former that will lead to the demise of the crypto currency bubble, in my opinion....
 
Michael, of course it is my opinion. But it also my opinion that economic supply and demand rules are as fundamental as F=ma.

There is NO LIMIT to the supply of crypto-currencies that can be created out of thin air. But there are some political and social constraints that limit the growth and supply of fiat currencies. It is the former that will lead to the demise of the crypto currency bubble, in my opinion....

John your supply and demand comment is very applicable to the discussion.

In order to keep this civil I will abandon my opinion in favour of having a purely objective discussion.

In 1971 Nixon cancelled the direct international convertibility of the United States dollar to gold. This effectively rendered the Bretton Woods system inoperative (fixed exchange rate) and brought in the current system of free floating fiat currencies. This allows the government of the day to print as much money as they feel is necessary by using targets other than the exchange rate itself to administer monetary policy. Floating exchange rates automatically adjust, and enable a country to dampen the impact of shocks and foreign business cycles, and to preempt the possibility of having a balance of payments crisis. However, they also engender unpredictability as the result of their dynamism. Current numbers from the US Treasury are 38,000,000 US notes printed per day, with a face value of $541,000,000, of which it is estimated that 95% of these notes are printed to replace those that are in circulation. The US Treasury states that "There was approximately $1.59 trillion in circulation as of November 15, 2017, of which $1.55 trillion was in Federal Reserve notes."

For the sake of this discussion I will limit the comparison to Bitcoin which has a finite supply of 21,000,000 coins, with just shy of 16,800,000 having been mined. It is also important to note that there are estimates that the last block will be mined in 2140 and that roughly 25% or 4,000,000 bitcoins have been lost and are irrecoverable due to the security of the blockchain and practical computing power that would be required to re-do the proof of work.

Now I am of course ignoring that you are factoring in all 1500ish and growing currencies. We are on the same page that this is a problem. However you have to keep in mind that this is still early days and this phenomenon is likely to rise to a peak and diminish as the technology, users, laws and regulations evolve. If you disbelieve that this is possible then simply refer to your own history of the US dollar. It can be traced back the 1690 where there were several forms of currencies and it arguably had a tough time right up until 1913. In 1913 the introduction of the Federal Reserve Act created one central bank and organized a national banking system to keep up with the changing financial needs of the country. The Federal Reserve Board then created a new currency called the Federal Reserve Note which gave birth to the first federal note issued in the form of a ten dollar bill in 1914.
 
You know that high-pitched whistle you hear when a rocket's coming in ballistic? I don't think the drogue is out on this one. The GPS doesn't have lock, and I can't see where it is at the moment.

Kinda reminds me of one of my flights. The GPS finally reported in with an altitude of -3 feet...


122217_BC.jpg
 
A little more info...

Looks like Coinbase has more than 'high volume' issues. I just read there were charges of insider trading related to their adding Bitcoin Cash (not Bitcoin).

Of note, you'll notice BitCoin Cash is shown in the previous post. Now, less than an hour later, Bitcoin Cash has been pulled from the page.
 
You know that high-pitched whistle you hear when a rocket's coming in ballistic? I don't think the drogue is out on this one. The GPS doesn't have lock, and I can't see where it is at the moment.

Kinda reminds me of one of my flights. The GPS finally reported in with an altitude of -3 feet...

No Bill, you have it wrong. Bitcoin isn't crashing, the Dollar is spiking...
 
Since I don't intend to invest in cryptocurrencies, I don't look for this kind of stuff, it just shows up in my daily financial/investment blog reading. From the last excerpted paragraph below, it sounds like if you even invest in Monero, you might end up on somebody's "watch list".:

Criminals Dropping Bitcoin for Monero
2 Jan 2018

https://www.themaven.net/mishtalk/economics/criminals-drop-bitcoin-for-monero-eykQyMYJVkK7mvvx7EVL8A

Bitcoin is losing its luster with some of its earliest and most avid fans -- criminals -- giving rise to a new breed of virtual currency.

Privacy coins such as monero, designed to avoid tracking, have climbed faster over the past two months as law enforcers adopt software tools to monitor people using bitcoin. A slew of analytic firms such as Chainalysis are getting better at flagging digital hoards linked to crime or money laundering, alerting exchanges and preventing conversion into traditional cash.

The European Union’s law-enforcement agency, Europol, raised alarms three months ago, writing in a report that “other cryptocurrencies such as monero, ethereum and Zcash are gaining popularity within the digital underground.”

In monero’s case, criminals are snapping it up because bitcoin’s underlying technology can work against them. Called blockchain, the digital ledger meticulously records which addresses send and receive transactions, including the exact time and amount -- great data to use as evidence. Match an address to a crime and then watch the bitcoin universe carefully, and you can see the funds disappear and reappear in other locations.

Started in 2014, monero is very different. It encrypts the recipient’s address on its blockchain and generates fake addresses to obscure the real sender. It also obscures the amount of the transaction.

The techniques are so potent that software that flags coins suspected of being obtained through crime now tags just about anything converted into or out of monero as high risk, according to Pawel Kuskowski, chief executive officer of Coinfirm, which helps exchanges and other companies avoid tainted money. That compares with only about 10 percent of bitcoin, he said.

https%3A%2F%2Fs3-us-west-2.amazonaws.com%2Fmaven-user-photos%2Fmishtalk%2Feconomics%2FzmfATcSa4EegwR7v_znq6Q%2FmVBxG0BEOE-EjNXDez74xA
 
You watch too much fake news.

Do you have media being constantly pumped into you via IV or something? IV TV?

Have you been outside yet this week, Winston?
 
You watch too much fake news.

Do you have media being constantly pumped into you via IV or something? IV TV?

Have you been outside yet this week, Winston?

This week? He hasn’t been out in a few years I’d be willing to bet! Spends all day looking up fake news stories!
 
You watch too much fake news.

Do you have media being constantly pumped into you via IV or something? IV TV?

Have you been outside yet this week?



This week? He hasn’t been out in a few years I’d be willing to bet! Spends all day looking up fake news stories!

Please remember not to be disagreeable to people when disagreeing with them :)
 
Speaking of bubbles, "blockchain" and crypto currencies are two different things. While there is a legitimate concern, and value of an on-going discussion on the currency side being a bubble, blockchain is not. Blockchain is a very real and emerging technology that will undoubtedly find its way into everyone's lives.

Yes, I know that. I have no issues at all with blockchain tech.

While I agree that there is a lot of distasteful stuff going on, not everyone's intentions in the crypto currency side are nefarious. What would be a more productive conversation would be a non-partisan discussion on the realities of fiat currencies. Specifically how our governments seem to think the answer to paying back debt and financing their budgets is easily handled by just printing more money. And the fallout from that tactic such as the devaluation of the dollar and inflation.

Oh, don't get me started on fractional reserve banking and central banks - it's central planning determining winners and losers based upon a proven to be garbage economic theory. The reason it isn't challenged is because the people in a position to change it benefit greatly from it.

Granted, it has certainly worked well enough as long as they maintained a very light touch (except in inflationary emergencies as in the early 70s) with respect to central bank manipulations of interest rates and treasury funded bailouts. That is no longer the case and hasn't been since they began bailing out companies that deserved to fail in the 90s, thereby creating a huge moral hazard where companies could act irresponsibly because they knew they would be bailed out due to the systemic hazard they presented. That was really made evident in the reaction to the burst of the housing bubble. BTW, we're now in housing bubble v2.0 in many areas, once again fueled by easy money from the Fed meant to lessen the impact of their last bubble.

Now, with massive amounts of government and private debt worldwide due to easy money (low interest rates), central banks must maintain artificially low interest rates or just the interest alone on debts would be ruinous. They're trapped. Thing is, keeping those rates artificially low results in new bubbles, this (probably final) time in E-V-E-R-Y-T-H-I-N-G. As Japan has shown, this can go on for decades. I have no idea when this mother of all bubbles will pop. If I did, I'd be the world's richest man.

For those who would like this paradigm to end and hope that cryptocurrencies will help with that, be careful what you wish for. A HUGE part of the (false) prosperity in this country is based upon personal and government DEBT and that debt will only be financed as long as people are willing to finance it. That willingness is largely based upon the fact that the US dollar and not some cryptocurrency is the world's reserve currency. When that changes, it's pretty much game over as we know it for the US.

I strongly suspect governments and other beneficiaries of the current financial and monetary paradigm will fight any threat to it with everything at their disposal. Whether they'll succeed is anyone's guess. Anyway, as I pointed out above, be careful what you wish for.

Where do you believe the current tactics are going, who do you believe benefits from this strategy, would you characterize this strategy as a bubble, if so where do you think we are when it comes to the bubble popping and what do you think it will mean, who do you believe it will effect, do you believe it is sound economics or even common sense?
I think that right now cryptocurrencies are in an absolutely textbook speculative bubble - people are buying them because their prices (note I didn't say "value") are going up... which results in the price going up... rinse, repeat. This could go on for a very long time or it could end tomorrow. If cryptocurrencies ever become -WIDELY- used to pay for physical assets and services and their value is then based upon a relative demand for THAT capability, I'll pay much more attention.
 
I think that right now cryptocurrencies are in an absolutely textbook speculative bubble - people are buying them because their prices (note I didn't say "value") are going up... which results in the price going up... rinse, repeat. This could go on for a very long time or it could end tomorrow. If cryptocurrencies ever become -WIDELY- used to pay for physical assets and services and their value is then based upon a relative demand for THAT capability, I'll pay much more attention.

I am sure you are aware that Bitcoin (BTC) is just one of many and the rest are are collectively referred to AltCoins. Although Roger Ver would disagree with me on that one. Within the AltCoin market there have been quite a few nefarious players identified as outright scams and as a result they have been de-listed. There are also a lot of weak whitepapers associated with many of them, however there are also some very promising ones.

Not all coins are intended to be used like traditional currencies where they are directly traded for products and or services, however these coins/tokens/currencies still have strong potential. A good example of this is XRP.

This is certainly not meant as any type of financial advice but below are three of the lessor known (beyond the mainstream AltCoins such as Ethereum, DASH, Litecoin, etc.) altcoins that have interesting white papers.

Ripple (XRP) https://ripple.com/

Ethos (BQX) https://www.ethos.io/

Tron (TRX) https://tron.network/en.html

Winston I recommend that you dig into some of the whitepapers, you appear to enjoy and be proficient in research...you may even find yourself coming over to the dark-side. I have a lot more opinions and insight into what is going on but I will not get into it on the forum. If anyone has questions they are free to PM me and take this off-forum.
 
Now, with massive amounts of government and private debt worldwide due to easy money (low interest rates), central banks must maintain artificially low interest rates or just the interest alone on debts would be ruinous. They're trapped. Thing is, keeping those rates artificially low results in new bubbles, this (probably final) time in E-V-E-R-Y-T-H-I-N-G. As Japan has shown, this can go on for decades. I have no idea when this mother of all bubbles will pop. If I did, I'd be the world's richest man.
Nice infographic on that subject:

170919_Bubble_infographic_newfinal600.png
 
The Significance of Decentralization

https://blog.ethfinex.com/the-significance-of-decentralisation-b7f72655484e

Excerpt - one of the "advantages" claimed in the article:

Collusion Resistance — Since the U.S. Government is centralized and the controlling system for the U.S. Dollar, members and leaders have the ability to collude together to change, disrupt, or destroy the U.S. Dollar depending on their own self-interests. With a decentralized system, colluding together becomes much harder as you would need to control more than half of a network in order to truly control it.

Thing is, this collusion IS being done and IS providing those in the US with a disproportionate wealth with respect to the rest of the world, a "centralized and the controlling system for the U.S. Dollar" IS being used to PROTECT the US dollar's status as the world's reserve currency because it is in the best interests of so many even outside the US to do so.

This is an example of what was behind my "be careful what you wish for" message. Don't be suckered into something which would be horrendously negative for YOUR interests as a US citizen based upon some theoretical, egalitarian "benefit" which you may believe is to your benefit only because you've only heard one side of the story as you did in this article. You'll be being fooled into something which is seriously not in YOUR best interest.
 
Researchers find that one person likely drove Bitcoin from $150 to $1,000
15 Jan 2018

https://techcrunch.com/2018/01/15/r...person-likely-drove-bitcoin-from-150-to-1000/

Researchers Neil Gandal, JT Hamrick, Tyler Moore, and Tali Oberman have written a fascinating paper on Bitcoin price manipulation. Entitled “Price Manipulation in the Bitcoin Ecosystem” and appearing in the recent issue of the Journal of Monetary Economics the paper describes to what degree the Bitcoin ecosystem is controlled by bad actors.

To many it’s been obvious that the Bitcoin markets are, at the very least, being manipulated by one or two big players. “This paper identifies and analyzes the impact of suspicious trading activity on the Mt. Gox Bitcoin currency exchange, in which approximately 600,000 bitcoins (BTC) valued at $188 million were fraudulently acquired,” the researchers wrote. “During both periods, the USD-BTC exchange rate rose by an average of four percent on days when suspicious trades took place, compared to a slight decline on days without suspicious activity. Based on rigorous analysis with extensive robustness checks, the paper demonstrates that the suspicious trading activity likely caused the unprecedented spike in the USD-BTC exchange rate in late 2013, when the rate jumped from around $150 to more than $1,000 in two months.”

The team found that many instances of price manipulation happened simply because the market was very thin for various cryptocurrencies including early Bitcoin. “Despite the huge increase in market capitalization, similar to the bitcoin market in 2013 (the period examined), markets for these other cryptocurrencies are very thin. The number of cryptocurrencies has increased from approximately 80 during the period examined to 843 today! Many of these markets are thin and subject to price manipulation.”

The manipulation happened primarily via two bots, Markus and Willy, that seemed to be performing valid trades but did not actually own the bitcoin they were using. During the Mt. Gox hack a number of these bots were able to create fake trades and make off with millions while manipulating the price of BTC.

The publicly reported trading volume at Mt. Gox included the fraudulent transactions, thereby signaling to the market that heavy trading activity was taking place. Indeed, the paper later shows that even if the fraudulent activity is set aside, average trading volume on all major exchanges trading bitcoins and USD was much higher on days the bots were active. The associated increase in “non-bot” trading was, of course, profitable for Mt. Gox, since it collected transaction fees.

But the Willy Bot likely served another purpose as well. A theory, initially espoused in a Reddit post shortly after Mt. Gox’s collapse (Anonymous, 2014b), is that hackers stole a huge number (approximately 650,000) of bitcoins from Mt. Gox in June 2011 and that the exchange owner Mark Karpales took extraordinary steps to cover up the loss for several years.

The bottom line is simple: if Bitcoin wants to be taken seriously it probably shouldn’t be this easy or legal to manipulate the markets. While decentralization is supposed to replace regulation it’s clear that there is still a way to go before it can be truly taken seriously. “As mainstream finance invests in cryptocurrency assets and as countries take steps toward legalizing bitcoin as a payment system (as Japan did in April 2017), it is important to understand how susceptible cryptocurrency markets are to manipulation. Our study provides a first examination,” write the researchers.
 
Real time info on all 1,531 cryptocurrencies:

https://www.investing.com/crypto/currencies

Cryptocurrency related articles I've come across while reading at financial/investment sites:

Bitcoin Ban Expands Across Credit Cards as Big U.S. Banks Recoil
3 Feb 2018

https://www.bloomberg.com/news/arti...l-cryptocurrency-transactions-on-credit-cards

A growing list of card issuers are declining crypto purchases

After recent price drops, JPMorgan doesn’t want credit risk

JPMorgan Chase & Co., Bank of America Corp. and Citigroup Inc. said they’re halting purchases of Bitcoin and other cryptocurrencies on their credit cards. JPMorgan, enacting the ban Saturday, doesn’t want the credit risk associated with the transactions, company spokeswoman Mary Jane Rogers said.

Bank of America started declining credit card transactions with known crypto exchanges on Friday. The policy applies to all personal and business credit cards, according to a memo. It doesn’t affect debit cards, said company spokeswoman Betty Riess.

And late Friday, Citigroup said it too will halt purchases of cryptocurrencies on its credit cards. “We will continue to review our policy as this market evolves,” company spokeswoman Jennifer Bombardier said.

----------

Cryptocurrency botnets are rendering some companies unable to operate
Smominru botnet has infected 526,000 machines, generated as much as $3.6 million
2 Feb 2018

https://arstechnica.com/information...rate-millions-but-exact-huge-cost-on-victims/

A massive cryptocurrency mining botnet has generated as much as $3.6 million dollars' worth of the digital coin known as Monero since last May, a researcher said Wednesday. The windfall isn't the only noteworthy thing about the botnet. Dubbed Smominru, it's also significant for the 526,000 computers it has infected and for the ability of its operators to withstand takedown attempts by whitehats.

----------

More Than 10% Of $3.7 Billion In ICO Profits Has Been Stolen By Hackers
23 Jan 2018

https://www.zerohedge.com/news/2018-01-23/more-10-37bn-ico-profits-has-been-stolen-hackers

Investing in ICOs - and the cryptocurrency space more broadly - has frequently been compared to investing in penny stocks, like those sold by Jordan Belfort's Stratton Oakmont - the firm from "The Wolf of Wall Street."

But this is a facile - though convenient - comparison. A more precise analysis of the risks associated with ICOs will find that most of more than 800 coins that have been created over the past 18 months will inevitably confirm that ICOs are far more risky than the average penny stock.

Indeed, incompetence and outright fraud aren't just rampant in the ICO space: They're the norm; even the largest - and purportedly most credible - ICOs - have been tainted by scandal. Offerings like Tezos, which raised more than $230 million and was backed by widely respected VCs like Tim Draper - have been hit with dozens of lawsuits from investors alleging negligence, embezzlement and fraud, according to Reuters.

By some estimates, up to 90% of these offerings will lose money for their investors.

Unlike stocks, ICOs face a singular risk: Their vulnerability to theft. Many investors in the DAO - a type of proto-ICO - lost a large chunk of their investment when hackers stole tens of thousands of ether tokens. At the time, the coins were worth $150 million: Today, their value has grown by orders of magnitude.

In a recent study, auditor Ernst & Young discovered that theft in the ICO space is even more pervasive than many had believed.

----------

"Biggest Theft In Crypto History": Over US$400 Million Stolen From Japanese Crypto Exchange

26 Jan 2018

https://www.zerohedge.com/news/2018...tolen-hacked-japanese-cryptocurrency-exchange

...the worst case scenario was confirmed by Coincheck itself told financial authorities that it had lost 500 million NEM cryptocurrency coins in today's cyberheist, which at the current exchange rate amounts to roughly $400 million, according to Nikkei.

NEM Foundation president Lon Wong also confirmed Coincheck was hacked, calling the stolen funds "the biggest theft in the history of the world", as quoted by CryptoNews. According to Wong, the hack had nothing to do with NEM and the blame lies exclusively with Coincheck:

“As far as NEM is concerned, tech is intact. We are not forking. Also, we would advise all exchanges to make use of our multi-signature smart contract which is among the best in the landscape. Coincheck didn't use them and that's why they could have been hacked. They were very relaxed with their security measures," Wong said.

"This is the biggest theft in the history of the world," he added.

----------

Mish: First Major Company to Support Bitcoin Payments Throws in the Towel
24 Jan 2018

https://www.themaven.net/mishtalk/e...ts-throws-in-the-towel-GcH7-__3jkmFlYMhRtIORw

Mish's comment: Bitcoin has zero use as a transaction currency. It's only use is speculation.

Major company's reason to drop bitcoin: "Transaction confirmation times have risen substantially; this, in turn, has led to an increase in the failure rate of transactions denominated in fiat currencies. (By the time the transaction is confirmed, fluctuations in Bitcoin price mean that it’s for the “wrong” amount.) Furthermore, fees have risen a great deal. For a regular Bitcoin transaction, a fee of tens of U.S. dollars is common, making Bitcoin transactions about as expensive as bank wires."

Bitcoin scalability problem

https://en.wikipedia.org/wiki/Bitcoin_scalability_problem

The bitcoin scalability problem is a consequence of the fact that records (known as blocks) in the blockchain are limited to one megabyte in size. Bitcoin miner fees for processing bitcoin transactions rose to above $25 per transaction in December 2017, making small payments uneconomical.

Bitcoin's blocks include the transactions on the bitcoin network. In contrast to Visa's peak of 24,000 transactions per second, the bitcoin network's theoretical maximum capacity with the 1MB block size limit sits between 3.3 and 7 transactions per second. There are various proposed and activated solutions to address this issue.


Blockchain Size (graph)

https://blockchain.info/charts/blocks-size?timespan=3years

[video=youtube;nsCqHOy0PtE]https://www.youtube.com/watch?v=nsCqHOy0PtE[/video]

EDIT - just found this after posting the above:

Bitcoin has a huge scaling problem—Lightning could be the solution
The Lightning network could enable much cheaper and faster bitcoin payments.
4 Feb 2018

https://arstechnica.com/tech-policy/2018/02/bitcoins-lightning-network-a-deep-dive/
 
Back
Top