Project Fedcoin?

[lorenhough]

My friend and joes Steve Q !! Jerry tell me what you think friend..
I made $2000 on $25 Bitcoin wow !!
Put $ every month
Learn and do it

Do what they say subscribe to there tube

I like this guy a lot know his stuff

 

[Jerry Russell]

Moved Loren's new post to old thread for context. As you can see I've been wrong about Bitcoin before.

But still, if I were going to try to make money in this business, I would buy computer time on the cloud to mine Ethereum or maybe Monero or Zcash. I believe they're technologically superior to Bitcoin.

 

[Jerry Russell]

Looking at the charts, something called Cardano has basically come from nowhere since December to become the #5 cryptocurrency. Monero is doing OK, Zcash is struggling. Bitcoin dominance is down to about 33%, which is lower than ever.

https://www.cardanohub.org/en/home/

Cardano is a decentralised public blockchain and cryptocurrency project and is fully open source. Cardano is developing a smart contract platform which seeks to deliver more advanced features than any protocol previously developed. It is the first blockchain platform to evolve out of a scientific philosophy and a research-first driven approach. The development team consists of a large global collective of expert engineers and researchers.​

 

[lorenhough]

 

[Jerry Russell]

Corbett's video linked above is really good for sorting out the apparent contradictions & confusion about cryptocurrency & blockchain. I agree with him that this is all in a very early stage, and will eventually evolve to find a role in the world monetary & economic system.

I also saw this other video posted at Martenson's site. It's not nearly so technologically sophisticated or appreciative of the value of Bitcoin, but I think it does a better job of explaining my basic concern about Bitcoin as an investment. For that matter, the entire stock market is behaving similarly at the moment.

 

[Richard Stanley]

Yes, I think Corbett's and the S&Bcoin videos are very good.

Thinking of such as Bitcoin as an investment is centrally problematic to me, as it is getting away, once again, from the original notion of 'money' as merely a trusted and stable medium of exchange, whether the money medium is beads, ingots of lead, gold, or encrypted 1's and 0's. The ability to leverage oneself speculatively to such an extent that mere trading in the medium of exchange is more valuable than the underlying goods, raw or processed, is a significant problem to any society. And, like the stock market or real estate market, this technology is subject to strategies of "pump and dump", while even more opaque. As well such as high speed trading algorithms will exacerbate, albeit confirmed blockchain transactions are inherently slower - but not slower than old-school real estate transactions (REIT trading is online now).

It is still all based on 'trust' at some level, and with such as Bitcoin the mining aspect is one aspect of 'trust', as well incentivizing the miners to race to create the transaction data blocks. The Bitcoin mining race is inherently wasteful of energy (a problem whether one is concerned about MMGW or not) and incentivizes miners to locate their 'mining' in locales where energy is cheap and/or subsidized. And when the creation of new Bitcoins hits the limit then what will happen with speculation?

As such, this is being presented by some as a cure for the evils of such as institutional bankers and overbearing governments. Okay, great, but this all still seems like a band-aide approach, in lieu of any confidence that societies can directly defang what is essentially cronyism writ large. The thread title here is about such efforts as the Fed to side-step the band-aide supposedly being placed on them.

Why take a band-aide approach? Well, today many have been sold on the notion that all government (not just limited government) is incompetent, at best. The notion is so strong that many of the same people just mentioned decided to elect one of the most corrupt cronies in existence, based upon his rhetoric that he would fix all such, by draining the swamp. But the swamp is winning.

If digital currency is a tool that can either be used well or bad, then so is government and banking, and we need to radically rethink our relationship to them. And this does not include letting the hillbillies decide we need to throw our babies out with their swampy bathwater.

 

[Jerry Russell]

The YouTube filtering process must be hitting hard: three out of five videos gone, including my favorite "Sh*tcoin and Buttcoin". Fortunately, the Internet is still operating as planned for now, and "routing around damage." The video is still available at Vimeo.

 

[Richard Stanley]

The following long excerpted article discusses the Gold Rush insanity around Bitcoin and cyrpto-currency. It also discusses the central mechanics of Bitcoin, that I think ultimately will prove it to be a Ponzi scheme. This revolves around two key features of Bitcoin: the first being the 21 million coin limitation; and second, the designed-in, ever increasing processing difficulty in winning the mining prize of a Bitcoin. The latter, when combined with the increasing numbers of miners competing to guess the next blockchain block's password is creating the insane electrical demand, all to create a medium of exchange that is inherently unstable in value. It is the perfect opaque environment for 'pump and dump' players besides creating insane wealth for Satoshi Nakamoto, or whoever he really is.

What happens to valuation once the 21 million coin limit is reached? The economic dynamics of the system, based upon this inane mining process and the resulting extreme waste of electricity will be drastically altered. But 'pump and dump' will still be in play. But all this is separate from the underlying 'blockchain' technology, which is separately being deployed in a myriad of ways. Blockchain seems destined to survive within the mainstream, but it seems to me that Bitcoin is designed to explode. Cui bono?

...
These days, Miehe says, a serious miner wouldn’t even look at a site like that. As bitcoin’s soaring price has drawn in thousands of new players worldwide, the strange math at the heart of this cryptocurrency has grown steadily more complicated. Generating a single bitcoin takes a lot more servers than it used to—and a lot more power. Today, a half-megawatt mine, Miehe says, “is nothing.” The commercial miners now pouring into the valley are building sites with tens of thousands of servers and electrical loads of as much as 30 megawatts, or enough to power a neighborhood of 13,000 homes. And in the arms race that cryptocurrency mining has become, even these operations will soon be considered small-scale. Miehe knows of substantially larger mining projects in the basin backed by out-of-state investors from Wall Street, Europe and Asia whose prospecting strategy, as he puts it, amounts to “running around with a checkbook just trying to get in there and establish scale.”

For years, few residents really grasped how appealing their region was to miners, who mainly did their esoteric calculations quietly tucked away in warehouses and basements. But those days are gone. Over the past two years, and especially during 2017, when the price of a single bitcoin jumped from $1,000 to more than $19,000, the region has taken on the vibe of a boomtown. Across the three rural counties of the Mid-Columbia Basin—Chelan, Douglas and Grant—orchards and farm fields now share the rolling landscape with mines of every size, from industrial-scale facilities to repurposed warehouses to cargo containers and even backyard sheds. Outsiders are so eager to turn the basin’s power into cryptocurrency that this winter, several would-be miners from Asia flew their private jet into the local airport, took a rental car to one of the local dams, and, according to a utility official, politely informed staff at the dam visitors center, “We want to see the dam master because we want to buy some electricity.” ...
https://www.politico.com/magazine/s...mining-energy-prices-smalltown-feature-217230​

 

[Richard Stanley]

Underlying the technology of digital currencies, of which there are now ~1,500 of them, is the 'blockchain' technology. It seems that the lure of the five-finger discount has struck here as well. In this case the foxes have become miners in the henhouse. The following excerpt is from an article discussing how this is being done.

It appears that part of the problem is the typical laziness of software coders in taking the necessary precautions. Can this this technology become secure through a painful process of revisions, ala Microsoft's famous "update Tuesdays"?

The article does provide the explanation for having such 'miners', that their energy hungry efforts are rewarded as a disincentive to hack the blockchain and steal. Maybe this wasn't such a good idea?

Early last month, the security team at Coinbase noticed something strange going on in Ethereum Classic, one of the cryptocurrencies people can buy and sell using Coinbase’s popular exchange platform. Its blockchain, the history of all its transactions, was under attack. ​

​

An attacker had somehow gained control of more than half of the network’s computing power and was using it to rewrite the transaction history. That made it possible to spend the same cryptocurrency more than once—known as “double spends.” The attacker was spotted pulling this off to the tune of $1.1 million. Coinbase claims that no currency was actually stolen from any of its accounts. But a second popular exchange, Gate.io, has admitted it wasn’t so lucky, losing around $200,000 to the attacker (who, strangely, returned half of it days later).​

​

Just a year ago, this nightmare scenario was mostly theoretical. But the so-called 51% attack against Ethereum Classic was just the latest in a series of recent attacks on blockchains that have heightened the stakes for the nascent industry.​

​

In total, hackers have stolen nearly $2 billion worth of cryptocurrency since the beginning of 2017, mostly from exchanges, and that’s just what has been revealed publicly. These are not just opportunistic lone attackers, either. Sophisticated cybercrime organizations are now doing it too: analytics firm Chainalysis recently said that just two groups, both of which are apparently still active, may have stolen a combined $1 billion from exchanges. ...​

https://www.technologyreview.com/s/...nhackable-blockchains-are-now-getting-hacked/​

​

 

[Jerry Russell]

However, projects like Bitshares, Waves and Tether are leveraging Blockchain technology to provide us with Blockchain-based fiat tokens like BitUSD, wUSD, and USDT, respectively.

In total, hackers have stolen nearly $2 billion worth of cryptocurrency since the beginning of 2017, mostly from exchanges, and that’s just what has been revealed publicly.

If some exchange is purporting to store funds and facilitate transactions in dollar-denominated cryptocurrency, wouldn't that make it a bank? Presumably the USG, upon learning about such an entity, would seek to regulate it as a bank? Wouldn't it wind up forced into the Federal Reserve check clearing system and SWIFT international payment network, with all the exposure to US gov't intrusions that go with that territory?

If crypto-currency is merely an abstract concept with no fixed value, is it even a crime to steal it? Is there any legal precedent for civil or criminal action? Can a crypto-exchange call in the FBI or local police to investigate a crypto-theft, as they would investigate any other bank heist?

I'm asking these questions, not even knowing whether the answers have already been sorted through, or whether this is uncharted territory. I'm guessing the latter...

 

[Richard Stanley]

If some exchange is purporting to store funds and facilitate transactions in dollar-denominated cryptocurrency, wouldn't that make it a bank?

What crypto-currencies are dollar denominated? Their units are all translated to dollar equivalents, but so is every other traditional currency.

If crypto-currency is merely an abstract concept with no fixed value, is it even a crime to steal it? Is there any legal precedent for civil or criminal action? Can a crypto-exchange call in the FBI or local police to investigate a crypto-theft, as they would investigate any other bank heist?

I'm not sure the law can make any such distinctions. It considers such as equity stocks, bonds, or even artwork as items of value, which people paid traditional currency to obtain.

If some exchange is purporting to store funds and facilitate transactions in dollar-denominated cryptocurrency, wouldn't that make it a bank?

One would think so. But note that the article is focusing on rogue miners, forking the blockchain so that they can create duplicate 'coins'.