Bitcoin Is Likely to Split Again in November, Say Major Players
bloomberg.com
bloomberg.com
Looking at https://coinmarketcap.com/ you can see that each BCH is worth ~$500 (at the time of this comment) and the value of BTC is higher after the split.
so in essence $8,154,513,572 of new value was created from nothing with the split.
If the next split follow the same pattern, more money appears...
How did the cryptocurrency markets handle that, anyway?
What does this mean? BCH can be sold for USD, and there are people willing to buy BCH. Therefore BCH created $8B in new value.
The $8B in value created is entirely nominal, because of the size of the pre-existing supply. In reply the real value created could well be negative or at most in the millions and not billions.
That's not how economics work.
edit: I suppose all these stocks I'm holding are worth $0, since if every person selling them sold tomorrow the value would drop to that price.
The $8B figure for BCH is using the exact same semantics that every other non-cash asset in the entire world uses. But because it's crypto we get pedantry like this.
Bitcoin: "I'm going to create $8B out of thin air"
To take the 100 shares at $500 example from @stanmancan, if one person is willing to pay $500, another 10 is willing to pay $400 for one share each, and one more person is willing to pay $300 for 20 shares, and one large investor is willing to buy up the rest for $100 only, the total demand for the whole company is $14,400 for 100 shares or $144/share. That's the true value.
I can guarantee you that there isn't even an order of magnitude close to $8B of demand for the artificially created and restricted BCH, so that value wasn't really created.
Anyways, I'm not trying to argue that the value of that hypothetical company is $14,400. I'm trying to argue that it's not anywhere near $50k. (Disproving the GP's example that BCH created $8B of value overnight.)
Fed: "Hold my beer..."
No. The market depth of the various Bitcoin Cash markets is tiny. You couldn’t offload even $10M without crashing the price close to zero.
Just because the highest bid is ~$500 doesn’t mean all 16 million Bitcoin Cash coins can be sold for ~$500, thus ~$500*16m hasn’t been created at all — only a tiny fraction of that.
The public exchanges are a gauge of liquidity. A magic private buyer might exist, willing to buy everything you hold, but I see no evidence that one exists for Bitcoin Cash.
Now it probably is all a shell game ultimately, but the longer it persists the more hopeful speculators will use fiat cash to buy into crypto currencies, letting crypto currency holders "cash out"...
- I have an idea, why don't we inflate it like crazy?
It does not make a lot of sense.
That would be ignoring the political war taking place between core developers and miners that is actually the cause of every fork in Bitcoin's history.
Also - why assume that the ones who initiated the fork are the same ones selling? Wouldn't it be equally plausible to assume that they are the ones buying the tokens?
I'd argue that the perceived utility of Bitcoin as a currency depends a lot on the alternatives available to you.
There's no way to measure Bitcoin adoption by country but Google trends gives an interesting picture:
yes, but because it's far better to hodl and profit instead of spending it on a pizza. It's an investment right now, not a currency.
You have to realize that there are many currencies, and they all have their niches. Bitcoin is just one of them.
Edit: Since I was downvoted I realized my comment wasn't clear. When I said you can't do "that" with Bitcoin I meant transfer my USD life savings to Bitcoin and then go to China and transfer it to yuan.
It bitcoin wants to be the same it doesn't need to be accepted as payment. It only needs to be scarce (which it is) and be immune to manipulation by states (which it appears to be).
To be clear, I'm not saying that this means bitcoin will be popular but it ticks some boxes. If enough people trust it, it could have long term success even if no one accepts it as payment. Being banned by some regimes could even help its reputation there.
Also, importantly, how long do the forks last? Bitcoin Cash has only existed for little over a month as of now. If it dies off (price drops to zero) within a couple of years, it will be clear that forks of that nature doesn’t affect Bitcoin in the long run.
This has to be made more clear for the "normal every day" user in order to make it really work, if you look at /r/Bitcoin and /r/btc, there is so much difference in their ideas.
:: Hard fork to overcome limitations ::
> Bitcoin's adapting to overcome its limitations it will never be a legitimate source of money
Your opinion on which is the True Bitcoin might vary. It's one of them though.
That means that block times will decrease 14-fold, and it will be 200 days until the next difficulty adjustment. Since there's no replay protection, there's no effective way to isolate "segwit2x" bitcoins from the non-"segwit2x" bitcoins, so it seems infeasible to trade them separately and let pricing data drive the mining decisions.
This split is much more likely to either go very smoothly -- old chain completely abandoned, segwit2x is now bitcoin, or very disasterously -- becomes impossible to spend either bitcoins of sw2x-bitcoins because of the chain overlap until the coinbase transactions start to mature.
Can you elaborate?
For convenience, let's call the chains BTC and SBT (for segwit2 bitcoin). If I hold 10 BTC before the split, then I hold 10 BTC and 10 SBT after the split. If I want to send 5 BTC to an address post-split, but hold on to my 5 SBT, there's no way to do it. The transaction that sends 5 BTC can be "replayed" onto the SBT fork, so the same address on the SBT side also receives my 5 SBT.
In the ETC/ETH split this was resolved by having a contract which split coins into two addresses, depending on what side of the chain the contract was on; so you would make a ETCETH deposit to this address and specify two output addresses; one would receive the ETC and the other the ETH. This is not possible in Bitcoin; the language is not powerful enough.
So to split your coins, you would need to get conflicting transactions accepted by the two chains, and wait for that to settle. Once that's done, you can move the remainder of your addresses by sending from the SBT address along with a BTCSBT address, and sending from the BTC address along with a BTCSBT address. This is pretty hairy for an individual user, and would probably have to be mediated by a service (most likely operated by an exchange).
Good point. I hadn’t thought of the possibility of having one part of a double spend be confirmed on the main chain and the other part on the fork.
But I don’t see how it relates to the part I quoted.
> But I don’t see how it relates to the part I quoted.
My explanation covered the "impossible to spend either bitcoins [or] sw2x-bitcoins" -- the replay means that attempts to spend one spend the other as well. Forcing a split transaction pair (as I describe above) is really the only way to ensure that your BTC transaction won't spend your SBT as well.
Is it the bit about the coinbase transactions? The coinbase is the most reliable way of getting transactions valid only on one side of the fork; the mining rewards necessarily only apply to the chain on which they were mined. They aren't spendable until 100 blocks after they are rewarded, and only after they mix in sufficiently with other transactions can they be used to differentiate general transactions -- any transaction that descends from a coinbase transaction is also specific to the chain fork. This is more reliable than a timing/sybil attack to try to force the split transaction pair described above.
I was under the impression that the original SegWit proposal increased the block size limit anyway — albeit through a change in how it’s calculated, but still.
[It seems to me that Core wants to keep small blocks so that fees on the primary chain continue to rise and everyone is forced to use the side chains that they are building and stand to profit handsomely from. They don’t want people being able to use the main chain for small purchases because it increases the size of the blockchain, which makes it more expensive to run nodes, but realistically they’re simply making Bitcoin too expensive to use at all.]
Anyway, I’m curious if your question can produce some more reasonable answers here.
Some people think they're buying one when it's the other. Others have lost money trying to set bitcoin from one branch to another.
These is also an argument that making the blocks bigger wont actually make a difference.
https://en.wikipedia.org/wiki/Jevons_paradox
Sidechains will happen regardless.
At this point, though, I see it as little more than a highly politicized flame war. Years of having the same arguments tend to make people grow bitter. The interesting thing (to me) is how little this debate seems to affect the price and adoption of Bitcoin.
* Quadratic scaling in signature checking
* Increased storage requirements for full node operation
* Higher risk of mining empty block and/or creating minor fork blockchain
* Centralized mining due to increased bandwidth requirements for mining nodes
* Low/unknown support for big blocks among non-mining nodes
At this point there are also important non-technical arguments:
* Creating a precedence for further block size increments or hard forks
* Giving in to vocal minority/"them"
* Yielding some control of reference implementation
* Pride
The way I see it, Bitcoin works exactly like a classic pyramid schema. Only interesting part of value IMHO is the Blockchain technology itself.
https://blog.coinbase.com/update-on-bitcoin-cash-8a67a7e8dbd...
As both Bitcoin and Bitcoin Cash have done well post-fork, there's a serious incentive for more forks, and forks of other coin types... and Coinbase's compromising makes it much less tenable to say "no" next time.