As Bitcoin Bubble Loses Air, Frauds and Flaws Rise to Surface | Hacker News Reader

As Bitcoin Bubble Loses Air, Frauds and Flaws Rise to Surface

nytimes.com

59 pointsIntronExon26 comments

Open articleView on HN

Surely a lot of frauds but where are the flaws?

Instead we have:

- Open source flexibility: Hundreds of competing coins seeking to optimize upon an original design

- A decentralized payment system: Beyond the reach of currency-manipulating state actors

- Programmable money: The key ingredient for trustless and automated next-gen services and products

- Working as designed: 9 years strong

- And soon: Scalability to global volumes

https://twitter.com/bramcohen/status/959973688035631105

> Working as designed: 9 years strong

and

> And soon: Scalability to global volumes

Wait, what? It's working as designed but can't scale to the "global volumes"? Isn't that a bug?

It was never designed to scale that large. The theoretical limits to transactions were known at creation time it wasn't much of a surprise. Nobody expects to solve every problem on a 1.0 release.

It wasn't even a 1.0 release.

You are incorrect. The best kind of incorrect: factually.

Satoshi said otherwise.

https://bitcointalk.org/index.php?topic=149668.msg1596879#ms...

slededit is not wrong: the original code did have a block size limit which limits tx per second. It required an update ("hard fork") to actually change this "feature". However, there was disagreement when the time for the fork came, which is why you now have Bitcoin Cash, which does support far more tx per sec and cheaper tx fees.

> A decentralized payment system

and

> Working as designed: 9 years strong

Is it really working as designed if very little people are finding actual utility in what it is supposed to be - a decentralized payment system..

As much as I don't buy into the full craze of crypto myself, you have to read this article with a grain of salt.

8 out of the 10 articles he's published recently are about crypto and most in a very negative way.

And this article is misdirected.

> Hackers draining funds from online exchanges. Ponzi schemes. Government regulators unable to keep up with the rise of so-called cryptocurrencies. Signs of trouble have appeared at nearly every level of the industry, from the biggest exchanges to the news sites and chat rooms where the investment frenzy has been discussed.

If you've been following the recent developments, most of the downfall can be attributed to Chinese money exiting the market as their government is flat out banning owning cryptocurrencies and trading them, in and out of China (...for now... give it a few years and they might flipflop).

The prices shrugged off the bitconnect joke that it was, the other bad ICOs since they don't apply, and the Japanese NEM wallet hack (which was mostly due to the exchange being reckless).

So yes, cryptocurrencies are a dodgy world, full of scam, odd things and you can paint it red all day every day. But you'd be silly to not look at it, the blockchain approach can have very good applications and there is a lot of interesting work and partnership forming, sometimes in unexpected ways.

Good and hopefully they'll be cleaned out so we can have decent investments in quality cryptocurrency startups.

Smash cut to a barren wasteland with no one and nothing left. Maybe cryptocurrency has a bright future, but I’m skeptical that any of the extent ones fit that bill. PoW is obscene, Lightning impractical, and it may just be that the whole thing is fatally flawed.

How is Lightning impractical? I encourage you to try it out on testnet right now, it works great. It also solves your PoW concerns.

...By requiring you to keep your computer up 24/7, no?

And keys in memory, which increases the attack surface - especially noteworthy with the intel bugs.

Not really true. You can offload monitoring blockchain to "watchers" (privately), and if you have a pay-only wallet you don't have to watch for anything anyway.

On top of that LN is very practical for heaviest blockchain users, that do run full node 24/7 anyway.

That sounds like a semantic distinction; a computer working for you has to watch the network 24/7. Besides, Quis custodiet ipsos custodes? Hiring a watcher sounds tricky if you want it to be really trustless, it sounds cumbersome, and frankly I can’t find any good info on how it works.

Sounds like a bank or venmo type service...

AFAIK it can be done anonymously, for a tiny price and a bit bigger bounty (if found). Since the state of the channel is private, watcher has no information about anything anyway. On top of it - it's only a secondary defense. Your wallet still can do the monitoring by themselves and other party can't know that you dissapeared from the internet and won't appear in next 24 hours in advance. Other party risks reputation and their own funds if they get caught by you or your watcher(s). Because of that attacks like that are very infeasible.

> How is Lightning impractical?

Like any crypto currency, the numbers in computers are worth whatever people believe they’re worth. So when enough people believe said numbers are worth zero, then the currency will be worth 0. Some may say the same is true for fiat, however the difference with fiat is most national currencies are backed by the might of military force to convince or coerce people into believing the value is > 0.

https://medium.com/@jonaldfyookball/mathematical-proof-that-...

http://www.coppolacomment.com/2018/01/probability-for-geeks....

http://www.coppolacomment.com/2018/01/lightning-and-fat-cont...

Your first link has refuting or critical comments from such notables as Vitalik Buterin and Brahm Cohen. In case anyone wanted a tl;dr to actually reading and evaluating that 15 minute logical fallacy of a read. And the other ones just reference the first link.

Care to explain the fallacy to people not well versed with those names you've thrown around?

Your appeal to celebrity icons does nothing to address the inherent problems with the lightening networks design.

Maybe you can explain the solution to the problems highlighted?

"When the tide goes out you see who is swimming naked" - Warren Buffet

So true.

I worked in Asia in the 90s, and it was remarkable the frauds, scams, and unsustainable loans that would surface when the local stock or real estate markets dropped sharply.

Don't worry keep HODLing! https://www.youtube.com/watch?v=rg2oukQZ6dg

as if above never happens to traditional markets. FYI --2008 where the financial markets almost collapsed and has destroyed lives of millions of individuals.

Reply on news.ycombinator.com