barisser

"Banks haven't seen an advantage in speeding that up, even though the lag is painful for businesses and families."

And

"What the U.S. needs, the Federal Reserve said last month, is an entirely “new infrastructure” to keep banks connected day, night and through the weekend. Then last week, the Clearing House, a group owned by the largest banks, said it would build a real-time payment network. It didn’t specify a time frame or release cost estimates."

Guys, this exists. It's called Bitcoin. And it's incredibly powerful.

The author is projecting his preferences onto others as if they were objectively obvious. It is a very arrogant thing to do. Let the dreamers dream. Ridiculing their aspirations in a moment of tragedy smacks of Schadenfreude.

Here's another way to think of it.

If the parameter space for my model includes, let's say 10 binary decisions (which is very conservative), that's 1024 possible states of my model. If I tested all 1024 states against historical data, it is likely that some of them might do very well (depending on the general architecture of the model of course). What if I then selected the successful minority and held them up as clever strategies? Their success would very likely have been arbitrary. By basically brute-forcing enough strategies, I will inevitably come across some that were historically successful. But these same historically successful strategies are unlikely to outperform another random strategy in the future. It's not impossible you'll find a nugget of wisdom hidden from everyone else, just much less likely than the more simple explanation I'm offering.

So to your point, it's not just the size of the parameter space versus the data set that matters. Brute-forcing the former alone will likely produce a deceptive minority of winners.

This seems like massive historical overfit, which can lead to arbitrarily precise fit, but no predictive capability.

Any model, if given enough parameters, can be made to match historical data to an arbitrary degree.

I also run several Bitcoin bots. I can tell you that slippage is not insignificant. If you make transactions every ~10 seconds and incur 0.1% fees each time, this is an extremely significant effect in aggregate. Also bid-ask spreads, while usually small, often aren't in periods of high volume.

It's an exciting prospect to trade financial assets on a decentralized, trustless network. Definitely the right direction.

But I'm not psyched about having to think about Counterparty's internal XCP currency, even if it isn't used for most purposes. It's an annoying barrier to have to transact in an altcoin to access certain functionality.

Other implementations use pure Bitcoin only, and are much less overwrought with complexity than Counterparty: https://coins.assembly.com

Ethereum still involves transactional costs. One way or another you have to pay for decentralized security. But the costs should be far less than legacy systems.

Also because of network effects, it is probable that only one cryptocurrency will dominate, likely Bitcoin. So it is convenient for ownership to take place on Bitcoin and not in a competing altcoin. We'll see how things progress when Ethereum comes out.

These are transaction fees inherent to the Bitcoin Blockchain.

But also 2 cents to transfer ownership is a lot cheaper than existing trading fees.

Hi HackerNews,

I'm a Bitcoin Engineer at Assembly. I've built a Colored Coins implementation on the Bitcoin Blockchain to track partner's ownership of products they build collaboratively.

As cryptographically secure tokens, Assembly Coins can be transferred with the same ease as Bitcoin with none of the currency risk. You can cryptographically demonstrate your ownership over businesses, earn royalties, and be an owner from anywhere.

Check out the API docs for some cool curl commands to get started. Or sign up and get free Assembly Coins.

You can see existing the Assembly Coins distribution, wholly derived from the Blockchain, here: https://coins.assembly.com/colors/39u6BdXu8e3aNU8yoMSsVHHvQy...