Analyzing Cryptocurrencies Using PostgreSQL
blog.timescale.com
blog.timescale.com
However, it seems like the plots of the results of the queries were done manually by writing some code to make each plot.
I can't stop but mention that using Apache Zeppelin Notebook [1] with Postgres interpreter for Zeppelin [2] (Spark SQL should provide comparable analytical capabilities as well, but this comment is not about it) it is possible to show graphical representation of query results without writing a single line of code.
[1] https://zeppelin.apache.org/
[2] https://zeppelin.apache.org/docs/latest/interpreter/postgres...
Am I right that zeppelin is similar to this?
Also, on Saturday, there was an ICO of this coin called TenX (https://www.tenx.tech/) which sold 100,000 ETH (~$30M) worth of TenX in like a minute. Is it all pump and dump?
I can't imagine that anyone has definite answers but I'm interested to hear some opinions.
Bitcoin - Actually used as a store of value, for capital flight, as a hedge, for darknet commerce, and some other ancillary purposes. Genuinely novel, and likely not going anywhere.
Litecoin - Likely not sufficiently differentiated from Bitcoin to become major, but nevertheless compliments BTC for trading and acts as a sort of 'plan B' for some categories of Bitcoin failure.
Ethereum - Cool tech, but all the innovative parts of it are highly unproven. The most novel thing done with it (the DAO) has arguably crippled the whole scene fundamentally with the fork (Vitalik is a kingmaker, and thus could be held liable).
The "ICOs" - Pump and dump, baby! To understand this, take a look at all the ICOs (https://icotracker.net/) and look at the business plans. Basically, there's a whole ecosystem that seeks to recreate Silicon Valley, and bases their presumed success on the magic of Ethereum to give them a competitive advantage. Figure how many of those would have to be successful for the whole scene to stay afloat, and then consider whether that's even close to reasonable.
I think it's transparently obvious that 95% of the ICOs work just fine with a simple database and don't leverage Ethereum in any way whatsoever. But perhaps I'm wrong.
Some other stuff like Dash seems kinda interesting, but it's anyone's guess how the market will respond to it.
I think it's quite proven. Turing complete contracts work according to their code. This has already allowed hundreds of automated token sales to take place, and anyone to copy paste some code to make their own token (with most using the ERC20 standard).
Alpha versions of several Dapps like Augur have been created and there is the Ethereum Name Service (ENS) which was programmed to do several innovative things:
* automatically release names for registration on a staggered schedule
* use hidden bids that are all revealed during a reveal phase
* require the winning bidder to deposit the winning amount of ETH in the ENS contract for as long as they want to maintain control over the name, thus attaching a rental cost for squatting on a valuable name like exchange.eth, which means the rent charged is proportional to the economic rent extracted by rent-seekers.
* allow peer to peer trade of names
All of these ENS features have been working for months. And this is simply a contract built on Ethereum.
And there are people working on contracts to lend out the ETH held for reserving ENS names, showing there are no limits to what can be done, subject only to the cost of the computing resources of the EVM.
Just as another quick illustration of the openness of Ethereum to innovation, here's a project that automatically created 10,000 unique digital collectibles, each a graphical depiction of a cryptopunk character, put them on the Ethereum blockchain, and then let anyone that wanted to, claim them for free.
All 10,000 were claimed and there has already been 25.0317 ETH ($7,762.83 USD) worth of cryptopunks purchased from those holding them, and there are currently 91.2646 ETH ($28,302.97 USD) in bids for cryptopunks for sake:
It also seems like the public chain will be leveraged in other novel ways.
--
Eg.
https://blockoneid.thomsonreuters.com/
https://blockone.thomsonreuters.com/
https://basicattentiontoken.org/
https://www.reuters.com/article/us-fintech-payments-circle-i... (The IMF recently commented on how virtual currencies would make international transfers more secure, and cheaper which is something Circle is already doing on the backend)
I got out of it mainly for that purpose. I was interested in a universal currency, not a get rich scheme based on enticing people with the promise of the future just to use that promise as a means to pump exchange rates. Going forward, it is a perfectly serviceable crypto-gold, but it has no greater aspirations anymore.
I think there is absolutely still room in the market for a cryptocurrency that isn't a ponzie scheme that can actually function as a daily driver currency replacement, but none have become popular yet. Probably because they aren't ponzie schemes.
As long as they could believe capping transaction volume and driving up fees wouldn't kill the currency or slow the appreciation in exchanges they are absolutely content with the status quo. And like I said, crypto-gold is useful. It just isn't a currency, and the way both bitcoin-core and the miner network responded to attempts to improve transaction volume reflect on the broader ideology in bitcoin itself - an ideology, like I said, I don't agree with. Not just the developers alone, but the devs and miners that both want inflation and small blocks over longer term adoption that may not translate into guaranteed profit.
The reality is that, for now, and for the foreseeable future, people are not interested in using bitcoin for over the counter purchases. I know this from personal experience as a former service provider of that specific service. It might never have a use-case that way. People say they want those things, but then don't spend their bitcoin. This is backed up but realty too : there are plenty of other cryptos with the same architecture with 10x the throughput and negligible txn fees (i.e. litecoin) and they aren't used for that. Maybe they will. Maybe they won't. Can't say. I know enough not to want to change something that works for what it is used for though.
Alternatively, it's a feature. The miners "are" the network, them rejecting a change is the network saying no democratically, and that was the intent of the way things were setup, this is how it's supposed to work. A change that hurts miners profits isn't good for the network because it'll reduce mining and thus reduce security of the network overall. So while a change to increase transaction volumes might be good for currency holders; holders aren't the ones providing security, miners are, and the incentives are setup this way for a reason, it keeps the network secure thus providing the value for the currency to begin with.
Err... no. Nodes define and police consensus in bitcoin, not miners. It is the fact that nodes, and not miners, not agreeing to changes that miners want that would lead to the centralization of the network into miners hands, that is the entire argument about scalability and blocksize.
> them rejecting a change is the network saying no democratically
Yes, it is the nodes rejecting change that is leading to little to no change. The nodes have overwhelmingly agreed to an upgrade, and the largest miner, bitmain, is resisting it, so there may be some truth to the assertion that miners don't want this upgrade because they perceive they will lose profit from it. The fact that the nodes are looking to 'go over bitmains head' and implement this change without the need for the largest blocking miner, that is the entire reason the 'new york agreement' was developed in the first place.
But we do agree on the core issue. The lack of the ability to easily change is a feature of the design. The incentives are slightly misaligned with the implementation of asicboost, but for the most part, they function as expected.
I haven't followed the drama super close but I take the "New York Agreement" as the adults stepping into the room and saying enough with the crazy ideas. If they manage to get SegWit enabled and increase the block size for old-style transactions, I think Bitcoin will be in good shape for a while. I'm not sure it will go smooth though so I cashed out some of my BTC as a hedge.
It seems we both agree that the difficulty of changing the design is a good feature, even though it is frustrating right now due to scaling. A dictatorship is a great system of governance, as long as you can trust him to do good. Other systems are messy and frustrating.
A chain that is attacked is easily going to shift to a different PoW that renders hundreds of millions of dollars of miner hardware obsolete. And the miners know it.
> I would argue that the fork is no longer Bitcoin
You can argue it all you like. Nodes define consensus in bitcoin, not miners.
> I haven't followed the drama super close
Clearly.
> as the adults stepping into the room and saying enough with the crazy ideas.
You mean like assuming that 80,000+ current bitcoin core reference node users are going to suddenly uninstall their node client software, and install a new unreviewed, untested node client? Because a bunch of suits got together in new york to have a pow-wow? In three months? You mean those adults?
> if they manage to get SegWit enabled
The only reason the nya is accelerating the adoption of segwit before aug 1 is because of these supposed uasf kool-aid drinkers. And isn't it kind of telling that this scalability that has been blocked by bitmain for a year is now suddenly good for everyone? Even though they've been blocking it for a year?
> it is frustrating right now due to scaling.
Take it up with bitmain. They've been blocking scalability for a year now. I'm not that concerned though. I'm happy with just the asicboost bug being fixed and no increased blocksize. Looks like I'm just going to get the blocksize anyway, and I can deal with that. But the hard-fork three months later? You can fork off onto china-coin if you want. I'll just continue using bitcoin.
Again with the kool-aid. Why does the Bitcoin protocol have a POW function and miners? Consensus is defined by the chain with the most work. If you fork and change the POW, you will not have the mining power to secure it. So, it will just be another shitty alt-coin. If you can somehow get the majority of people using Bitcoin to switch over, and somehow get enough mining power to make it secure, then you have something. Thinking that the echo chamber that is r/bitcoin represents the majority of users is laughable though. And thinking that current Bitcoin with the current POW will not continue to exist, have value, have mining power behind it is just silly.
> Satoshi from the Bitcoin white-paper chapter 12 'Conclusion' : The network is robust in its unstructured simplicity. Nodes work all at once with little coordination. They do not need to be identified, since messages are not routed to any particular place and only need to be delivered on a best effort basis. Nodes can leave and rejoin the network at will, accepting the proof-of-work chain as proof of what happened while they were gone. They vote with their CPU power, expressing their acceptance of valid blocks by working on extending them and rejecting invalid blocks by refusing to work on them. Any needed rules and incentives can be enforced with this consensus mechanism.
First, you have to understand what 'consensus' actually means :
> https://en.wikipedia.org/wiki/Consensus_%28computer_science%....
> A fundamental problem in distributed computing and multi-agent systems is to achieve overall system reliability in the presence of a number of faulty processes. This often requires processes to agree on some data value that is needed during computation. Examples of applications of consensus include whether to commit a transaction to a database (or, for example, committing blocks to a blockchain), agreeing on the identity of a leader, state machine replication, and atomic broadcasts. The real world applications include clock synchronization, PageRank, opinion formation, smart power grids, state estimation, control of UAVs, load balancing and others.
Nodes are the agents in a multi-agent system enforcing consensus.
Nodes accept incoming transactions and validate them. Miners don't. Nodes replicate transactions to other nodes. Miners don't. Miners take transactions from nodes, and order them in a block, and perform a hashing function on them (the only thing they do). Miners pass the new block to the node. The node validates the transactions in the block. Miners don't. The node validates the block. Miners don't. The node replicates the block to other nodes. Miners don't.
There is only one function that miners do. They take transactions, put them in a block, and hash them. As soon as a miner produces a block that any node determines does not obey consensus rules, it is rejected. It doesn't even matter if another node has already accepted, because consensus is aligned with all nodes. Any node that replicates non-consensus blocks or transactions is itself rejected.
So nodes accept the transactions, validate the transactions, replicate the transactions, maintain the mempools, validate the blocks, replicate the blocks, serve the blockchain, and store the blockchain. Nodes even define the PoW algorithm that miners have to employ.
Nodes maintain the protocol, not miners. It is thus. It has always been thus.
See for yourself. Download it.
https://bitcoin.org/en/download
It's currently at 0.14.2
https://bitcoin.org/en/full-node
> A full node is a program that fully validates transactions and blocks. Almost all full nodes also help the network by accepting transactions and blocks from other full nodes, validating those transactions and blocks, and then relaying them to further full nodes.
You should probably question how such a fundamental misunderstanding of how bitcoin works comes about. Is there a source for your opinion?
You need a copy somewhere to have an actual blockchain, but not every node need host that chain. The major players in the economy, however, with the resources to keep around 100GB every couple years of data are incentivized to to maintain the stability of their currency network.
Because blocks are reverse-signed, you can't have a limited pool of old blocks and forge the records. Its a chain for a reason - each blocks signature is dependent on its peer blocks, and we still don't have anything close to breakable sha-256 that would compromise bitcoin.
You do if immutability, censorship resistance, and resistance to state capture is what you hope to achieve with your crypto.
> Etherium, for example,
If Vitalik Buterim were to be arrested for whatever, or if he were even to just have a skiing accident and die suddenly, you'd see how important that decentralization is in bitcoin. There is no single point of failure in bitcoin. That's the point.
Hey, for what it's worth, I think the tech behind ethereum is great. Most of the people who acquire it have no idea really what it is good for, but it has real potential. But as a 'store of value'? That's just one of the things that it isn't designed for.
There are several approaches to scaling Bitcoin that should work. The debate focuses on risk aversion and which will be best. In the end, though, any untenable situation should be quickly resolved as a majority choose the least painful option. The New York Agreement appears to be this in action, and represents a major shift in the community as a new client may become the default.
Many have compared Bitcoin to TCP: it's not great, but it's good enough to become a standard. I tend to agree with this view, though there are many well-founded concerns.
Reckon the first component is going to happen but there is very little chance of the hard-fork part.
TenX is actually, despite it's name, probably not a pump and dump, for instance (disclaimer: some of that 30M in 1 minute is mine). It's a credit card that links up to various cryptocurrency wallets, and allows you to make real world purchases using them. The token you buy in the ICO entitles you to a portion of the fees collected from processing the transactions.
I also wonder if this will ever be regulated (and if it even can, it seems like a cat-and-mouse game).
> They have no inherent worth,
They have inherent value as you need some foundation of the internet economy that's ideally not gov't controlled.
Fred Wilson makes a good point here - it's quite gut-wrenching to send someone a token that might have doubled in value if you had waited a week. And I would imagine the seller might not feel great either if they received a token that took a sharp drop in value upon receiving it.
Buying things is one of the main uses of currency, IMO, and you can't buy much with any cryptocurrency. I don't think that's likely to change - businesses take fiat currency instead of bitcoins or whatever because they have to pay taxes on their business, and those taxes must be paid in US dollars (or GBP or whatever). And if they don't, men with guns will come and arrest them. That's one of the great drivers of demand for dollars that bitcoin can't really compete with.
So where do cryptocurrencies provide value? Well, the main one is in areas where traditional, government-backed fiat currencies can't be used. In other words, mostly illicit cases - drugs, money laundering, etc. Otherwise, especially for those in nations with more developed financial infrastructure, there's no compelling reason to use bitcoin other than purely ideological motivations.
So you're right that cryptocurrencies do have value, it's just that the value is far more limited and based on illegal activity than most of its proponents will claim.
Most proponents believe that developing countries will be the biggest adopters of crytocurrencies, and drive their values higher. This makes sense as many of those countries already have volatile currencies that are difficult to trade on the open market at low volume. For this reason, USD and Euro are highly sought after for even low income individuals in many less stable countries. Anecdotally, I can offer that many Egyptians with any wealth at all try to hold some foreign currency. It's possible cryptos can replace that need.
Plus, the black market was valued at $10 trillion globally in 2011. If it had an official currency that currency would be worth quite a bit.
Put it this way: the black market does not rely on bitcoin in any substantive way. Bitcoin, however, depends on the black market for its existence.
So the black market has a combined value of $10 trillion, but bitcoin takes only a small, small slice of it because cash is just better. It's just that this small slice is bitcoin's bread and butter.
At what market size do people who have criticized it in the past as only for those things, admit that perhaps that categorization isn't reflected in actuality? 100 billion? 500 billion? One trillion? 10 trillion?
That's my point - bitcoin is most useful for those who wish to engage in illicit activity (this accounts for at least 10% of bitcoin's market size if not more [1][2][3]) and for those who have ideological reasons to support it.
Those who have ideological reasons to fear inflation and support bitcoin are primarily libertarians, who think of inflation as Satan incarnate and view it as worse than murder and only slightly better than outright theft. But that's hardly a consensus view. Beyond those two groups, bitcoin has no real use.
I'm not saying bitcoin is worthless, I'm saying that there's a natural peak to its valuation based on its limited use cases (see above). Maybe bitcoin will make significant inroads in developing countries, and maybe then those $100 billion+ valuations will become reality, but I doubt it.
[1] https://en.wikipedia.org/wiki/Silk_Road_(marketplace)#Sales [2] http://money.cnn.com/2016/04/15/technology/ransomware-cyber-... [3] https://bitcoin.stackexchange.com/questions/47942/what-perce... [4] http://www.ofnumbers.com/2015/04/22/the-flow-of-funds-on-the...
So by even your own figures 90% of people aren't using it for the use-case you seem to have an issue with.
Do you have anything to back up this assertion?
I'm going to contradict you here, and say that there is no reason to assume that.
Only idiots would use Bitcoin for black market purchases in the first place, there are better alternatives for the majority of purchases, and the biggest sources of black market are still happening with USD.
I'm not sure why it's even relevant since both currencies would function just fine if we magically removed all illicit activity.
Definitely. Tack ransomware onto that list too.
There's legitimate use cases too though which do present at least a few compelling cases - for example I've had large purchases outright refused because the seller thought there was a chance I was a credit card fraudster. Nothing says "the money is yours now" like a cryptographic proof of that. They straight up told me, even after I gave them proof of ID - "sorry, too risky, pay with bitcoin".
I've also been flagged by maxmind and similar anti-fraud tools before when I made VPS purchases over Tor. But because I paid in Bitcoin support was able to approve the transaction without a second thought - no more fraud risk could occur.
Of course - these types of purchases aren't that frequent - but they do occur.
That doesn't mean there aren't structural flaws in their design (mostly meant to enable their initial success) but I don't think you can make a cryptocurrency that can simultaneously attract interest while also not appreciating from that interest. In order to implement a coin payout algorithm capable of handling an influx of on-chain activity you basically tell your early adopters "hey, this is a new and unproven thing, but if it takes off the algorithm just devalues it anyway to keep it where it is at" so you don't even have the selfish self-gamble motive to profit off it and thus no reason to participate if it isn't already a successful means of exchange.
The tech is great though.
The other big use case is speculation - because their real-world value is so uncertain, they're easy to create, very hyped, and basically unregulated, the current crop of cryptocurrency tech is basically a bubble factory.
They're mostly used as speculative capital trading right now, and can't be compared to any traditional currency in terms of volatility. If the dollar was magically swapped for one of them in an instant, and we all carried on transacting with it like we did with the dollar it would be a different story.
Volatility isn't an inherent property of a currency. It's a function of market dynamics.
(I'm not an economist so excuse potentially poor terminology and I hope I'm conveying this well)
Cryptocurrencies have the latter 2 features sewn-up but there aren't a lot of hard-goods out there that are predominantly priced in crytocurrencies. . . until that happens their valuations will remain volatile.
Ask MtGox users what happened with their "currency"... and it's not even a big case in terms of amount of money gone.
The thing is, yesterday I sent USD from US bank to UK and received it in less than 30 seconds paying less than 1% in total on fees (including FX), using Transferwise. Coinbase wants to charge me 4% and will take its time...
A month ago I made a typo when making a transfer. The money bounced back in 3 days. Try sending BTC to your ETH wallet and see what happens.
The problem that cryptocurrencies solve can and is being solved because the technology is at that level now so it's possible. Yeah banks suck, we need new, better banks. Transfers suck, we need more like Transferwise.
Blockchain is a different story though...
Coinbase is FDIC insured and has insurance for Crypto holdings?
Don't use exchanges if you don't like them?
Of course, with bitcoin, ether, and fiat, you don't need a bank. You can always keep your money yourself. Except with bitcoin and ether the ability to secure your own money is much more attainable for average people.
On the flip side, a lot of people conflate trust in web exchanges or bitcoin banks with the stability of the currency itself. Isolated, you have a reason to trust bitcoin way more than any state actor - its math, codified, and nobody can erase it now. On the other hand, state actors have force of violence if anyone breaks the money. If someone breaks bitcoin with an exploit in the blockchain, you are screwed without recourse. At this point, with the amount of participation it has, the bitcoin protocol should be considered robust - but that also is what translates into its valuation. It is only worth so much because it is proven through its long years of use.
Clearly reality is not agreeing with this assessment? As an example of this counter-argumemt : bitcoin.
In a global economy of some 64 trillion, 42 billion (plus the gold and other precious metals, and many other "lack of faith" stores of wealth) is not even a drop in the bucket.
And even at that, you don't have to have no faith in established currencies to also use bitcoin. I personally don't think the banking system in power now will fail any time soon, but I also can recognize how valuable a cryptocurrency would be to replace it.
'Objective amount'? What it is is an amount, and growing, that feel exactly what you imply doesn't exist. There are clearly many people that have lost 'faith' in fiat currencies, or the central banks that manage them, or the economies behind them, or all of these things, to the tune of the market-cap of bitcoin. How more objective an amount can you get than that?
Eh, yeah, good luck with this. Maybe ask the citizens of Cyprus how trusting their government's promise to pay out in full on their bank accounts worked out.
The US banking system is now hugely concentrated, with a huge pile of leveraged derivatives bets being pyramided on top of depositor money. When this unravels in spectacular fashion, the choice will be to print a massive amount of new USD to paper over depositors' losses, or bail-ins. Either one will accelerate adoption of BTC to escape the depredations of fiat currencies controlled by gov't backed banking cartels.
https://bitconnect.co/bitcoin-news/254/bitcoin-millionaires-...
Or are you saying that quantitative easing consolidates wealth? How?
Or are you just inserting an unrelated complaint into the discussion?
It's like you're cheering on an arsonist because after the fire he lit that has burned down your house, he hands you a bucket of urine to help put the fire out.
1. Strawman. It is the concept of value itself that has been perverted through this process.
2. Because organisations (i.e. banks and the owners of their service channels) closer to the feed of treasuries suffer the least of the effects of monetary expansion.
3. I thought we were talking about inflation and bitcoin as a store of value?
Furthermore, I don't know how to make heads nor tails of the statement that the "concept of value itself" has been "perverted". Such a vague and sentimental notion could mean many different things.
The criticism that our economic system aggregates wealth in the hands of a few is valid, but at least the dollar isn't suffering from deflation and extreme volatility, which is what makes it viable as a unit of account (unlike bitcoin). I wasn't considering bitcoins or dollars as stores of value, just as units for measuring value and devices for transmitting it. Maybe at some point bitcoin will overcome these problems, but for now, I'm rather glad a graph of the dollar's value looks nothing like the graph shown in the original comment.
> The US, UK, and Japan are all currently fighting deflation with QE policies, which seem to be working fairly well.
... and I said :
> If by working you mean rapidly transferring wealth into fewer sets of hands, yes.
... and then you said :
> Are you saying that avoiding deflation and volatility is what consolidates wealth?
I was talking about the effect of QE. That effect being the objective fact that money has transferred from people with less to people with more. You were inventing a strawman about the theory that if the people who were doing this didn't get what they wanted, we would have 'deflation and volatility'? Seen the house markets over the past 30 years? Looks pretty volatile to me, so it doesn't sound like whoever is making policy has their fingers on the pulse, do they? Sounds more like a marketing gimmick to me.
I had to write a paragraph of crap to answer a BS premise that had no relationship to the argument at hand. So. Strawman.
> Furthermore, I don't know how to make heads nor tails of the statement that the "concept of value itself" has been "perverted"
Maybe you got fixated on your strawman.
> but at least the dollar isn't suffering from deflation and extreme volatility
Yeah. Theft is much better. Here is a gun to your head. Give me what I want or I pull the trigger. But at least you don't have deflation and volatility. Remind me again... how many people went to prison for the GFC?
Are you saying you don't want to respond, but something forced you?
The saying, "It takes one to know one," seems appropriate here.
Coming out and saying that you "had to write a paragraph of crap to answer a BS premise" is a bit transparent, don't you think? It's a roundabout way of saying, "you're so stupid that I had some kind of moral duty to correct you, which is a waste of my time because I have better things to do." But... why would you call attention to the fact that you have better things to do than argue with me? Isn't that basically the same thing as admitting that you're bad at prioritizing your own time, that you feel compelled on some emotional level to debase yourself by talking with me?
Which brings me to an alternative strategy: if you think someone's wrong, ask questions. Maybe you'll learn something, maybe they'll learn something, and maybe it's just a misunderstanding.
Is this true? I've never been able to figure out how to turn my BTC back into GBP without submitting documentation for KYC laws. I never had to show Paypal my passport, and paypal sucks.
Bitcoin absolutely is valuable. Some people even take it as payment, making it a currency. And moving around that currency is way more transparent and unencumbered than moving any form of fiat. Currency exchange is wholly up to what you want to convert it into and what exchange you are working with. And if that ends up involving your government... people in other parts of the world don't have that limitation. You can't blame the tech if your society chooses to inhibit it (as your PM is trying to do right now...).
There is absolutely no inherent value and no transaction is denominated in bitcoins (you can pay in the number of bitcoins equivalent to a number of dollars, but nobody operating a real business wants a number of bitcoins for a good or service).
Why are you comparing it to visa? I have no intention of getting rid of my cc. My bank account on the other hand...
> There is absolutely no inherent value
Clearly the people who have assigned value by acquiring it would disagree with this, yes?
> and no transaction is denominated in bitcoins
That's just false. Almost all other cryptos are priced in bitcoin, which i think is the subject matter of this thread.
> nobody operating a real business wants a number of bitcoins for a good or service
Oh dear. No. If you think that service providers that are paid in bitcoin aren't keeping their bitcoin holdings you're kidding yourself. That may have been the case a few years ago, but today? There are services today that do exactly the opposite : take a wage and immediately convert into bitcoin and place it in your wallet.
A decent marketing campaign and an easy-to-use purchase flow could blow up a new cryptocoin pretty quickly.
https://hackernoon.com/why-everyone-missed-the-most-importan...
If they're "deeply flawed as a currency" I'd love to hear an explanation as to how, especially compared to traditional currencies that are manipulated by commissars? That's not a political assertion, it's a mathematical fact demonstrated in developing nations more acutely if other examples are needed.
With that said, you can copy the entire cryptocurrency stack that makes up Bitcoin and just rename it. Many of these new coins are just that, clones for pump-and-dump schemes.
And many actually offer legitimately new and intriguing concepts that may have good use cases.
It seems like you already understand it? Is you're question whether they're all flawed or all functional and useful?
It actually doesn't take far for the cart to keel over. Just as far as saying your money supply has a finite limit and / or it has an absolute number of coins minted means it cannot function as a currency. This has been demonstrated by how the bitcoin economy operates in two states - either its going to the moon, or its slowly dying off. Nobody can use it as a regular money because the incentives are entirely built around hoarding it rather than transacting with it, and they were built that way on purpose...
It is a chicken and egg problem. You won't get adoption or take off unless you can entice people with promises of fortune. If you don't give first mover advantage in the cryptocurrency market people will just flat ignore you. But if you do, you sabotage whatever idea you had to just be a ponzie scheme, because it means you have to start out with huge inflation and reduce it over time to keep your adherents happy.
I do think there is absolutely room in the world for an actually usable cryptocurrency to replace traditional fiat. It would be really beneficial to have one, to dethrone the currency manipulators that profiteer off of the influence they yield. But you need a money that can actually fit into the global economy as a means of transaction and not a store of value to accomplish that, and it would require structural considerations counter to what makes any cryptocurrency currently take off.
I don't think I disagree with what you mean, I think I disagree with the notions that these are mutually exclusive.
To echo Margaret Thatcher's (I know) final words in office, there is no such thing as apolitical money. I don't believe there can be a world in which economics is divorced from politics in any way, I think society must occasionally make political decisions about economics.
I agree with your points pragmatically though, which perhaps is where you're grounding everything?
Do you mean that having a forced deflation with cryptographic mathematics is a flaw? I don't really understand why a finite amount of currency would be an issue if the number of units scales beyond what the entire world's traditional currencies contain combined.
It's just a cryptographically enforced trust network to not print money when you decide you want to print money.
I wouldn't say they are, better wording would have been that they were developed for scientific purposes first, caring of the technical, before concern for the economic ramifications set in.
> a finite amount of currency
It is a matter of incentives. Right now, anyone holding most fiats in the world is incentivized by their controlled inflation to spend the money - and if they don't, it has negative economic ramifications because money that stops circulating (also known as a drop in monetary velocity) is effectively lost productivity until it reenters circulation. Traditionally, no millionaire just stuffed their mattress with Benjamins, but we are now seeing corporations effectively do this by sitting on hundreds of billions in cash offshore. The economic impact, however, is the same - money stops moving, and slows the economy because its not being spent. As money slows down, it increases scarcity, and you can quickly have a runaway deflationary spiral where the money keeps getting scarcer and scarcer thus incentivizing people to hoard it more and more while the economy stalls out.
I should disclaim this is independent of how bitcoin (and ether, doge, ltc, etc) naturally deflates through market adoption. All those currencies either have decreasing or static minting of coinage, which means that every new entrant to the market by definition increases scarcity of the coin and drives prices up. This, again, has a runaway effect evidenced by how almost everyone uses bitcoin - as a store of value, not as a means of exchange. Because simultaneously fees are high and transactions are slow, and the money is appreciating over time as more and more people start using it.
Your point relates back to my premise - technically, a finite money is fine as long as its highly divisible, like bitcoin is. The theory is that as the price goes up people just deal in smaller coin denominations. The problem is that doesn't address the economic incentives structure around appreciating currencies, which disincentivizes spending them.
> It's just a cryptographically enforced trust network to not print money when you decide you want to print money.
It isn't about one person having minting powers. The whole point is trustlessness. But you can still have all the promising aspects of cryptocurrencies (public ledger, trustless transactions, theoretically low response time with low fees, pseudonymity) while also having the coinage algorithm adapt to money velocity in the economy to attempt to push incentives towards spending rather than investing when they need to be so pushed.
Transactions per day have been growing rapidly every year in Bitcoin and Ethereum. In Bitcoin, the growth recently stopped, but only due to the block size hitting its protocol limit.
So the evidence contradicts the hoarding theory relating to deflating currencies. The wealth effect from appreciation seems more pronounced than the hoarding effect.
People saw the insane gains earned by bitcoin and ethereum, plus a few other coins, and they figure "you can put in a thousand and turn it into a million." Get enough people doing that, and hey, bubble.
I'll consider the bubble over once dogecoin - a joke currency that doesn't really have much to offer and had all kinds of issues - reverts back to its historical lows.
For example, there is Monero and other "privacy" coins, which promise private and untraceable transactions. They are usually based on ring signatures.
Or IOTA which promises to scale to thousands of transactions per second, and is based on a Directed Acyclic Graph instead of a blockchain. The more devices or people who use it to make transactions, the faster it gets. Scalability is something Bitcoin is struggling with right now.
First movers, early adopters, investors, these folks are providing funds to create things. They're taking a risk and if that risk pays off, and something valuable is created, should they not share in that value?
One of the truly game changing features of the business models blockchain enables is the alignment between creators, investors and users. All have an opportunity to profit if the thing works. That alignment is the wild card in all of this, how much value does having a large community of owners, folks with skin in the game and a desire to make something popular and work, bring to the process of adoption of a new tool or system? I think it's a big one.
If bitcoin ever were to become a universal currency, its market cap would need to grow into the tens of trillions. That represents at least a thousandfold increase in participation, and even right now 1% of all wallets hold 99% of the money. The richest wallet right now holds about 315 million USD in bitcoin. Is it truly reasonable that the person that controls that wallet, if bitcoin were to grow a thousandfold to encompass a large part of the global economy, be worth more than the current top four richest people alive? Wealth inequality is bad enough as is.
I think everyone can agree that it would be a disaster for bitcoin to take over traditional currency systems with its current design, where the total money minted ever is already almost all in circulation. By 2020 about 88% of all bitcoin will have been produced. That is just preposterous for anyone considering trying to grow it into a global currency of substance.
So if the market cap was 10 trillion rather than 42B, instead of your Big Mac costing 0.00157btc like now, it would cost 0.000006594btc. Why is that a problem?
There are already investment models for funding things that can give a pay-off, a pay-off that aren't Ponzi-like schemes.
Why is this new system needed for aligning creators, investors, and users?
And not all have an opportunity to profit - what happens to the last 40% who would eventually be forced to adopt through whatever means?
And of course it's a big opportunity if you get everyone aligned over the idea of being able to profit, the early adopters especially love this because that "$100" they spent could become worth $100,0000,000 at some point with no effort on their part. There is an inherent difference between investing in a stock in a company and something becoming a currency.
This is too shallow of a discussion to go anywhere, there has to be actual analysis and projections to refer to.
I'm sorry for linking to 4chan, but I don't know of any better way to display the caliber of "investor" that is participating in this market right now.
But yeah, these kids are largely responsible for the common layman's goldrush to crypto.
Fear of missing out, and people refusing to sell at a loss.
I dont see any use case beyond being a speculative asset and a money laundering technique, but that is subject to change. Even just being a money laundering technique is a good enough use case to give it value; look up XMR/monero
Unless proven otherwise, yes.
People or groups expect a coin to do well, or they expect that enough other people expect it - so they buy.
Some fractional subset are sincere in their beliefs that it's the Next Big THing. A larger group of buyers are convinced by the passion of the original group. But the majority pile on because they expect to make short- to medium-term profit on price fluctuation.
Very similar to the stock market.
Buy a coin, hype it, buy some more, then dump your stash on the market.
I think there were twitter accounts before to do this, like voting rings.
Technically, people find blockchain to be able to replace trust in some form or the other. Specially in places like stock transactions, where a trusted third party does share transfers with time as long as T+2 days (with T being the day of trade). Problem is people forget that there is a reason why humans are involved in transactions. Its not about trust. It is about a simple truth in business - shit happens. When it does happen, I would rather have a human being to be able to negotiate than have a smart contract execute and try to bankrupt someone
General population, my guess is, still finds this all mumbo jumbo. I have my colleagues telling me about a "bitcoin plan" where they are getting assured returns from a shady money manager. They all have been told about this "bitcoin" thing which went from ~300 to 2.5k in couple of months. Greed takes over and they are shelling money left and right, even with me trying to talk sense into them.
From a crypto enthusiasts point of view, crypto currencies are going to take over the world, replace fiat and replace it with a world where no one needs to trust anyone because blockchain can solve it. Quite a lot of them fear missing out on the next BTC or ETH so they throw money even when don't understand the utility completely.
As for Tenx, it is a tried and tested formula of coin backed cards, nothing new. They will have reserve to hold out for some amount of volatility before trying to sell more coins.
I think this thread about Bancor - the highest ICO yet will add some more info - https://news.ycombinator.com/item?id=14618109
I for example missed out almost completely on the recent Ethereum craze, even though I learned about this new project shortly after their initial crowdsale. Back then, I tried to learn how this thing ought to function and what it tries to do, in an attempt to gauge whether it is feasible from a technical standpoint. I came to the conclusion that this is a visionary, but technically deeply flawed project, because it wouldn't scale on so many levels:
- block validation requires everything to be executed on every node again and again -> essentially your thousands of nodes all compute the same stuff, which is hardly the "supercomputer" as which it is marketed
- parallelization would be hard to achieve, as every contract can possibly call every other contract by design -> again, no "supercomputer" works this way, and transactions per second of this network would be severely limited to an amount that's so low that it would not be useful for any real business case
- smart contracts would be unable to get any data from outside except for stuff delivered to them via transactions, and all that stuff must be pushed onto the blockchain and archived forever -> blockchain would either explode in size or contracts would be extremely limited in their possibilities, despite turing-completeness
- every transaction costs gas, which is bought by ether, which costs money, which means that providing "free" services to users is pretty much impossible besides by impersonating them and doing requests on their behalf, which totally destroys the idea of letting the user sign everything by himself. Free services are an important way of getting user traction however for businesses today and probably also in the future.
But despite all these problems and surprisingly (at least for me), Ethereum found a real killer application in the ICO craze: pie-in-the-sky-kind of "companies" created some fancy marketing material called "white paper", a fancy website with fancy team members, laid out a business model that usually conforms to the pattern "we do this already successful use case X, but only decentralized and on the blockchain" and necessarily incorporates a new "token" that they intend to mint and sell to "investors". The tokens are practically useless most of the time (except for their producer, which uses them as a vehicle to get "investor" money), but the fact that almost all of these tokens, as soon as they landed on crypto exchanges (which happens quickly now thanks to the ERC20 standard), netted their initial purchasers an immediate 2-5x profit or more when selling resulted in more and more people buying ether and trying to get in those token sales for a quick buck, effectively driving the ether price into the sky.
For this "use case", all the scaling limitations described above - which still exist, and there are still at most unproven, concept-stage solutions in existence for them - don't really matter, since the ICOs only sell dreams of future applications on the Ethereum blockchain, not actually working ones, and dreams aren't limited by scaling issues (except for the fact that some of these ICOs by themselves drive the current Ethereum network into dysfunctionality already, as recently demonstrated during the Status ICO which effectively clogged the network for almost 48 hours).
I wish I had realized this earlier and had taken part in the 30x gains in the price of ether within two months. But my knowledge about the scaling limitations of the network that ought to be the foundation of all these lofty dreams kept me back...
Or would you have dumped the ICO for 2x-5x profit once the "price target" was achieved? Or would you have ridden the hype wave up to the current 30x?? The answer is you don't know.
Limitations of the project are real. If your idea of becoming rich is buying something you don't believe in and hoping it goes up big time, then you should try the next big ICO, maybe you will get lucky.
"TimescaleDB (the OPs product) is a new open source time-series database built up from PostgreSQL."
Do you know good alternatives or which distributed databases are generally well suited for huge volumes of time-series data? Cassandra?
I think HBase is better than Cassandra for this workload, and I generally like its design sensibilities and consistency focus (gross oversimplification C* = MySQL, HBase = pgsql?) . OpenTSDB is one of the more mature scale out timeseries DBs and works with both. It works pretty well, but getting a production quality HBase setup is non-trivial. OpenTSDB has some decent built in aggregation and filtering functions, but queries over long time spans are quite slow because it has to pull all the data out of HBase and into the tsd daemon.. that can be fixed with what HBase calls a co-processor (think stored procedure in SQL) but it hasn't been done yet.
So, I think TimescaleDB is hitting a real need at the right time, and seeing how expressive and easy to reason those queries are, I am excited to give it a shot.
Happy to try and address any concerns you may have
I hate the word "large" in these contexts.
But I agree that "large" often means different things to different people.
Actually if you had invested $100 three months earlier, in April 2010 (when BTC started trading at $0.003 on BitcoinMarket.com) it would be worth $87M today.
So, given near-perfect liquidity, what makes any particular coin valuable? For shares it's earnings per share. Will we need something akin to "earnings per coin"?
But ultimately we'll probably see those types of coins separated and the more traditional profit sharing coins dominate the market such that a shared language can be established for it.
And, further, fiat currencies aren't perfectly liquid with respect to each other.
While an existing fiat currency might derive its confidence from different sources than that of a digital currency (taxes, military, etc. vs. blockchain, mining, contracts, etc.), it does not make them that different. People still declare the coins value on that confidence/demand.
Nice article! Had a good time reading it.
https://www.irs.gov/uac/newsroom/irs-virtual-currency-guidan...
I would like to run my own analysis too!
https://blog.timescale.com/analyzing-ethereum-bitcoin-and-12...
Enjoy!
Bittrex is the exchange I recommend, and they have a lot of currencies. Poloniex is ok, it's big but slightly fewer currencies, I don't like the interface as well. Kraken is a bit better interface, but way fewer currencies. C-CEX has a reputation for scamminess and running questionable currencies, I'd stay away.
But as with all things crypto, buyer beware. If you aren't day- trading never keep your money on an exchange.
The TL;DR is "Prices went up, prices went down. Some more than others." There's nothing actionable in that.
And a lot of the currencies in your dataset have basically zero volume. AMIS -- your "most profit in a day" -- appears to have a 24h volume < $1,000 and isn't even traded on a single major exchange. Again, that information serves no purpose, and coins like that should probably be excluded as outliers. The fact that they were not only included but highlighted tells me that the author knows nothing about the market they're attempting to analyze.
This looks more like clickbait / advertising, to be honest. "Hey, we need someone to write an article on cryptocurrencies because it's a hot topic. Just give me 2,500 words and a few graphs ASAP. Doesn't matter if it's relevant."