Cryptocurrency and apologies now

PhilleusPhogg · Joined: 11 May 2015 Posts: 311

Forgive me for ignoring the Viewing aspect of this thread to address Slogger's question Smile

I had my interest piqued about last year when someone I know 'invested' some cash in bitcoin and other cryptos after I told him not to (without I admit any knowledge of it) and made a boat load of money after it went through the roof in 2017.

Coming from a computer science background I was interested in how it worked, and was pretty impressed with the idea - blockchain and how stuff gets mined and agreed is pretty cool.

Forgive the following if it's a bit stale, I haven't really read much about it since Jan/Feb this year!

However that's seperate to the currencies - bitcoin has a fundamental flaw (well at least it did this time last year) in that basically an early decision to limit the size of the blocks (which determines how many transactions can be processed in each block) was quite small, and hard-coded rather than configurable.

[edited]
Small transaction blocks are a problem because it basically means the amount of transactions bitcoin can process in one go is not enough for current demand, and the way that transactions are prioritised in based on the transaction fee attached to the transaction (the miners obviously choose to process the transactions with the largest fees). As an end user, this means it might cost you £3 in fees to buy a £2 coffee using bitcoin - so as an everyday currency, bitcoin in that form flat out won't work.
[edited]

Thus to change that size, and make bitcoin viable as an everyday currency, everything running bitcoin software to mine and maintain the chain would have to upgrade at the same time. Thus they need to fork the codebase to fix it, and nowadays that carries with it lots of problems.

Therefore like any market, others spot the limitations and come up with alternative currencies which address some of the limitations in the BitCoin implementation - so basically in the realm of crpto currencies you can boil it down to:
1. is the underlying block chain idea going to have uses - yes, e.g. land registry records in corrupt countries and that sort of thing for a start
2. is the general idea of a currency using distributed block chain tech a good idea - that's a socialagy/economic question where probably a lot of the most interesting debate lies
3. which currency is best - here's the bit that's interesting from a money making/speculation aspect, because in reality, it should be the best implementation that wins, but marketing and hype and ease of use will play a big part, it's like VHS and Betamax but with more players I think

So let's assume you subsribe to the view that at least one crypto currency will emerge dominant, because the world ends up having a use-case for one. You then see the motivation for having some skin in the game. As a crypto 'investor' (I would term this as someone that knows a bit about currencies) it's pretty much like venture capitalism, do so research and try to figure out which currencies might have a long term future and indeed could be 'the one'. Then buy a little of these, in the hope/expectation one of these is going to be worth mutliples sometime in the future.

You also have the folk who have largely no idea, and have heard about people making money in crypto and so almost blindly start buying them up - I know a fair few people who did this around this time last year when it was all over the news.

The main problem (or advantage) with investing in crypto currencies is that it's completely open to manipulation, as it's unregulated. So there are some people absolutely making fortunes off the back of the above groups of people.

Basically tweets about certain currencies can massively impact the prices of new bitcoins.

This scenario has happened a few times:

1. Influencer tweets that 'HypeCoin' has a fundamental technical flaw, or won't actually be rolled out
2. Price of HypeCoin crashes on news of 1.
3. Blockchain audit of Hypecoin shows a boat load of HypeCoin gets bought by a few wallets at the deflated price
4. Influencer claims their twitter feed was hacked and the previous tweet about HypeCoin was bogus
5. Price of HypeCoin bounces back on news of 5.

Therefore anyone seriously trying to invest in this stuff, if they're not trying to manipulate the unregulated market I'd say they're going about it wrong Smile

If you're not, and just following crypto 'news' be very very careful, because you are probably going to end up making someone else quite rich.

SloggingScotsman · Joined: 18 Jul 2006 Posts: 2967

PhilleusPhogg thank you.

Don’t worry about the the viewing, even My flabber (and there is a lot of that) is ghasted that viewers are working full time on this, as well as the $100 a pop 2-3 times a month folk now being recruited in. I just can’t get my mind around how, in this context, the viewing works.