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Latency, Power, Value Shift, Bitcoin Fails

Arthur Hanson

Well-known member
When bitcoin is traded latency is time consuming and will become astronomical if it did as many transactions as the US dollar. Also if traded as heavily as the US dollar not only the latency would be a severe problem, but the power consumption which even at this point is astronomical per transaction. As these two problems get continually worse with rising volumes the value changes making for futher instabiltiy for the value would change creating even further problems. Add hacking that would increase because of these factors and you have a near total disaster. Bitcoin at best is a dangerous experiment left to people with money to loose. An unregulated currency would become ever more dangerous in many ways as its adoption increased. I welcome further comments and discussions on this.
 

count

Active member
When bitcoin is traded latency is time consuming and will become astronomical if it did as many transactions as the US dollar. Also if traded as heavily as the US dollar not only the latency would be a severe problem, but the power consumption which even at this point is astronomical per transaction. As these two problems get continually worse with rising volumes the value changes making for futher instabiltiy for the value would change creating even further problems. Add hacking that would increase because of these factors and you have a near total disaster. Bitcoin at best is a dangerous experiment left to people with money to loose. An unregulated currency would become ever more dangerous in many ways as its adoption increased. I welcome further comments and discussions on this.
You're assuming technology will stand still. This is the equivalent of being in 1990 saying the internet will never replace newspapers because it's too slow.
 

Arthur Hanson

Well-known member
You're assuming technology will stand still. This is the equivalent of being in 1990 saying the internet will never replace newspapers because it's too slow.
I agree in some respects, but the file on each coin will continuously increase in size and must be kept up to allow tracing, which all countries will require to keep track of for tax, regulatory and crime purposes if it does become a major source of commerce.
 
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count

Active member
I agree in some respects, but the file on each coin will continuously increase in size and must be kept up to allow tracing, which all countries will require to keep track of for tax, regulatory and crime purposes if it does become a major source of commerce.
This will be solved with sharding. Much like databases can be massively parallelized, so can blockchains. There are several projects in various stages of testing/implementation of this.
 

Arthur Hanson

Well-known member
This will be solved with sharding. Much like databases can be massively parallelized, so can blockchains. There are several projects in various stages of testing/implementation of this.
How much power will this take up considering a lot of transactions need the informantion real time? Personally pla I'd rather have Visa have a digital currency since they already have everything in place and a proven track record world wide and when they a mistake, they take the loss and not people who have no real idea how digital currencies work.
 

count

Active member
How much power will this take up considering a lot of transactions need the informantion real time? Personally pla I'd rather have Visa have a digital currency since they already have everything in place and a proven track record world wide and when they a mistake, they take the loss and not people who have no real idea how digital currencies work.
Most newer blockchains are moving to Proof of Stake as opposed to Proof of Work. Proof of Stake eliminates the power wasted through mining. I suggest you read up on the Ethereum 2.0 upgrades (https://ethereum.org/en/eth2/).
 

Arthur Hanson

Well-known member
From what I read from that link, it looks like a hackers paradise. Visa and other financial networks stand behind their proven world wide networks, who stands behind these crypto currencies and their security? If no one is willing to stand behind them, hackers like North Korea and many others will continue to steal billions as they already have. The theft is going on to this day, the problem is we hear about it only after the fact. Who or what central body will cover the losses? What body will claim responsibility and do enforcement? Current currencies and financial systems have enforcement and mediation arms, which I have personally used many times. No system is perfect, but some are better than others.
 

count

Active member
From what I read from that link, it looks like a hackers paradise. Visa and other financial networks stand behind their proven world wide networks, who stands behind these crypto currencies and their security? If no one is willing to stand behind them, hackers like North Korea and many others will continue to steal billions as they already have. The theft is going on to this day, the problem is we hear about it only after the fact. Who or what central body will cover the losses? What body will claim responsibility and do enforcement? Current currencies and financial systems have enforcement and mediation arms, which I have personally used many times. No system is perfect, but some are better than others.
Hackers paradise? That just reminds me of the internet in the late 80s early 90s.
 
who stands behind these crypto currencies and their security? If no one is willing to stand behind them
The source code of the network that is there for all to see and find hacks in it. Cryptocurrencies are based on proven cryptography algorithms, if these would get broken also the conventional international payment networks will have big problems as they are based on same cryptographic algorithms.
 

Arthur Hanson

Well-known member
The source code of the network that is there for all to see and find hacks in it. Cryptocurrencies are based on proven cryptography algorithms, if these would get broken also the conventional international payment networks will have big problems as they are based on same cryptographic algorithms.
It has been and always will be a cat and mouse game and current players like central banks and credit card processors have skin in the game that is always changing, who is responsible for Bitcoin blow ups and thefts. Who is responsible for criminal use and tax regulation? Bitcoin is still in the wild west of America's stage, no one knows how it will evolve and when.
 

Arthur Hanson

Well-known member
Janet Yellen declared in the New York Times that Bitcoin is to inefficient and cumbersome for financial transactions to be viable alternative. If you know of any source with better information, connections or access to all aspects of the financial world with the knowledge to navigate this area, let me know.
 
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Janet Yellen declared in the New York Times that Bitcoin is to inefficient and cumbersome for financial transactions to be viable alternative. If you know of any source with better information, connections or access to all aspects of the financial world with the knowledge to navigate this area, let me know.
Main difference between you and me seems to be the trust in these people. It's those proclaimed experts that lead us to the 2008 financial crisis. Only in Iceland a few small fish were sentenced but for the rest no illegal things happened according to the judicial systems. In health crisis year 2020 the stock markets gained new peaks meaning the rich are making themselves more rich.
The 2008 financial was one of the reasons I started looking at Bitcoin and later on the whole crypto space as pieces of the puzzle for a better financial system.
Sure. Bitcoin functions like cash so once is gone it's gone unless you can rely on goodwill from the other side. Visa and other cards provide some fraud protection paid by the fees on each transaction. But there is nothing stopping companies providing similar services on top of Bitcoin; actually there are already companies offering crypto wallet backed credit/debit cards like for example Binance.
Good thing is we live in the West in a (relatively) free society. So people that don't trust Bitcoin are not forced to use it and thus following common financial advice. But it also means that people who see the cryptos as a possible piece of the puzzle for a more just financial system being able to do their thing.
 

Arthur Hanson

Well-known member
Main difference between you and me seems to be the trust in these people. It's those proclaimed experts that lead us to the 2008 financial crisis. Only in Iceland a few small fish were sentenced but for the rest no illegal things happened according to the judicial systems. In health crisis year 2020 the stock markets gained new peaks meaning the rich are making themselves more rich.
The 2008 financial was one of the reasons I started looking at Bitcoin and later on the whole crypto space as pieces of the puzzle for a better financial system.
Sure. Bitcoin functions like cash so once is gone it's gone unless you can rely on goodwill from the other side. Visa and other cards provide some fraud protection paid by the fees on each transaction. But there is nothing stopping companies providing similar services on top of Bitcoin; actually there are already companies offering crypto wallet backed credit/debit cards like for example Binance.
Good thing is we live in the West in a (relatively) free society. So people that don't trust Bitcoin are not forced to use it and thus following common financial advice. But it also means that people who see the cryptos as a possible piece of the puzzle for a more just financial system being able to do their thing.
The instability of Bitcoin will only increase, because it is essentially a confidence game, as life is in general. The problem is that there is no transparency as to its traffic and many other areas that other currencies provide. This is why it has become one of the favorite currencies of crime since it can cross borders, both real and regulatory without detection, and tax evasion. It has become a set of financial nuclear weapons that is growing and becoming ever more dangerous. All currencies have risk, some out of the developing world have extreme risk, but Bitcoin is a joker in the deck. Yesterday demonstrated the intense instability of Bitcoin, when has a major currency had such a radical change in value in one day or should I say one hour? I make my living in finance and it's also my hobby. Serious players in one of the largest players in the market, have made moves with their personal money on one of my recommedation and made 300% in one year on one play.

 
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