Bitcoin – a new monetary system or Rube Goldberg machine?

Analysis and Opinion

By Chemrock

This is my maiden attempt on YouTube. Video is a medium I don’t know much about and I’m also lacking in the tools. A man’s got to start somewhere and I’m having fun getting the hang of it.

With all due respect, I think the average guy has as much idea about Bitcoin as Elon Musk in the opening video. There are thousands of videos and articles out there on Bitcoin101 but most are all hypes or intellectualisation. I set out to explain Bitcoin with an overview in simple English (video 1), and explain the cryptography and decentralisation concept in layman terms (video 2). The first 2 videos will bring you up to speed on what the heck Bitcoin is all about. Video 3 discusses some of the issues concerning Bitcoin that answer the burning question of whether it can replace central bank money. The last video is the elephant in the room, the 9 fallacies I identified.

Libertarians love the concept of decentralisation and the freedom from government control. But don’t we all know that almost any system that is unregulated, least of all a monetary one, is a recipe for disaster sooner or later? Old world central regulation is bad, new world non-regulation is badder, I would think. Running as a decentralised open system, the direction of Bitcoin is driven by consensus. As with any human endeavour, power struggle surfaces sooner or later. Bitcoin is meant as an alternative to Wall Street, yet the irony is, powerful Wall Streeters have tried to steer it in certain directions. So we see the battle of the Segwit and Lightning Network groups.

This blog only covers the basics of Bitcoin, and more or less cryptocurrencies in general. What is covered here is by now already dated. The technology has moved way ahead into the new crypto spaces of Defi (Decentralised Finance) and NFT (Non-Fungible Tokens).

Technology-wise, Defi is fascinating. I can see why Gian is so excited over it. But I feel Defi is so complex, it’s not something for the ordinary punters in the stock exchanges. I also feel the closer Defi business gets to quasi-banking, the sooner regulators will step in. This was the main reason the Bank of China stopped Jack Ma’s Ant Financial IPO. Another point of interest, in my opinion, is that Defi is so complex, with its AI and DAOs, that zero-day threats are very high. The recent collapse of Iron’s Titan is one good example when it dropped from $65 to almost zero within a few hours. The cause of the debacle seemed to be a coding error in the redemption algorithm. Another big problem lies in the volatility of cryptos. The swings of the underlying tokens can be so merciless that leveraged long positions suffer catastrophic losses when they get liquidated. In the 2 weeks in May, Defi’s TVL (Total Value Locked) plunged from $88b by 50%.

In the case of NFT, I think it is a great technology searching for a good application. As it is prinarily used now to tokenise digital art, it seems to me it is mainly a novelty thing. But one never knows how this can play out. If cabbage patch dolls can fetch thousands of dollars, anything goes for NFT. Twitter CEO Jack Dorsey digitised his very first tweet and sell his NFT for $2.9m. Digitised art (means anything – you can go digitise Mona Lisa and create your NFT), wild prices, and settlement via cryptocurrencies, is a mechanism made in heaven for money laundering. Recently, artist Beeple’s “Everydays – The First 5,000 Days”, which is a digitised montage of 5,000 pieces of his paintings, was purchased by a guy known by his social media handle of “Metakovan” for $69m. Why would someone pay that kind of money for what is just a jpg file? This guy is a 34 year old Mumbai-born crypto entrepreneur. As he is now Singapore-based, I was curious and ended up writing a blog on this. It’s about NFT. You can read it here if you like About Beeple’s US$69.3m Digital Art Piece – What Price Art, Or Is It Art Of The Scam?

Please view the videos and return back here for comments. I’m no expert. Let’s just share here and expand our horizons.

Bitcoin Part 1 : Bitcoin basics
https://www.youtube.com/watch?v=4AzXS_LaBmU

Bitcoin Part 2 : Bitcoin technicals
https://www.youtube.com/watch?v=vJfupjH0FkA&t=4s

Bitcoin Part 3 : Bitcoin issues
https://www.youtube.com/watch?v=-2W5CWw32DM&t=75s

Bitcoin Part 4: Bitcoin Fallacies
https://www.youtube.com/watch?v=Dd0zasRbuyI



Comments
78 Responses to “Bitcoin – a new monetary system or Rube Goldberg machine?”
  1. i7sharp says:

    Good to know “Chempo” is Patrick Low.
    I was the 88th to view his profile and the 18th or 19th to subscribe?
    I don’t know why I initially wrote “Thomas Low” right after I have seen his name!
    Probably because one of the people from Lufthansa Singapore who helped me in the early operations of Lufthansa in Manila was named Thomas? I don’t quite remember. Perhaps I can find the name in one of my early 1980 journals.
    Am looking forward to learning more about bitcoin but it will be uphill all the way, I guess.

    • chemrock says:

      Were you a pilot then? Glad a fellow Singaporean was helpful to you. I have nothing to do with Thomas.

      • i7sharp says:

        Thanks, Chem (Chempo/Chemrock)

        I was in charge of ground operations (reporting directly to the general manager for Lufthansa in the Philippines).
        The flair of the guys from Singapore made me feel like a hillbilly. 🙂
        One of them spoke fluent German. As for me, “sauerkraut” and “zugzwang” were the only Deutsch words I knew then.

        But, back to bitcoin …
        https://decrypt.co/29229/from-elon-musk-to-mark-cuban-9-billionaires-who-own-bitcoin
        x-

        But when talking about the notion of Bitcoin potentially replacing fiat currencies, Palihapitiya said that “one thing you have to look at is the volatility of the US dollar—and you can’t replace it with something that’s nine sigmas more volatile.”

        So it looks like Bitcoin’s price gains over the past few years are both a blessing, and a curse.
        -x

        “The love of money” is what drives all this, methinks.

        “… nine sigmas more volatile.”
        I wonder where Six Sigma is now?

  2. Joe America says:

    I’ve finished the first video. I could not grasp some of the technical details, but I now understand how a blockchain is created, how miners work, and why transactions take 10 minutes or more. After a rest, I’ll take up video 2. The Musk intro was hilarious. BTW, I don’t think bitcoin is yet money. It’s part collecting, part gambling.

    • The second video gets into the securing of transactions, the iterative ‘hashing’ of data creating the huge demand on computers as miners compete to solve a puzzle fast. I got exhausted just thinking about all the hashing. I think I’ll have my secret identifier tattooed on the inside of my eyeball. Don’t want to lose it.

    • Ah, video 3 is a highly interesting explanation of the flaws with crypto:

      – No economic value
      – Ecological disaster
      – Slow and non-scalable
      – Tool for criminals (Charlie Shrem)
      – Artificial scarcity and tulips; gamed commodity of no value
      – Asset class, not money, but “claim is to nothing”.
      – Incidents: Collapse of value, teens heist 3,5 billion and disappear, China kicks crypto out, Tether troubles, etc.

      This video was not so technical, and very powerful.

  3. LCPL_X says:

    Thanks, chemp!!! Great videos so far, I’m working backwards. I think this series should go viral as I’ve not scene any videos in the negative take down Bitcoin thus, so I hope this is shared widely.

    Can you time stamp (i dunno how to do this) at the bottom of each video, each section like a table of contents for the video so its easier to go back and forth?

    Its too technical for me, so I’ll await gian’s commentaries;

    but for the argument against the economics of Bitcoin, i know you’ve already covered speculation that that aspect maybe profitable, in video 3 , can you What IF…? your current conclusions to say 10 years from now?

    Becuz it seems to me, if deflation is reevaluated as balance positive instead of negative , which is related to popular medium of exchange, and both are now trending up, then

    the two in the middle with the red arrow, chemp, will invariably also change, ie. becoming a unit of account and store of value. Thus the crux is deflationary as concept. What are other examples wherein

    this is good and not bad?

    That’s my 1st question in all this, chemp, but yeah a table of contents for each video would be really helpful, as I’m sure people will be going back and forth on this series, like i’ve already had. thanks, again, chemp. very good stuff.

    • LCPL_X says:

      I was attempting to pry open NH’s math mind awhile back, but to no avail. RE Bitcoin’s divisibility.

      Essentially my point here is that Bitcoin’s divisibility is at core here, and informs this assumption of deflation. Like Godel’s some infinities are bigger than other infinities.

      For example what’s smaller than a Satoshi?

      If a satoshi can be further sub-divided, doesn’t that nullify the “problem” of deflation?

      • chemrock says:

        Lance, I write with no authority here. Just venturing my thoughts.

        (1) What’s smaller than a satoshi?
        You are talking additional denominations, like pounds-shilling-pence.
        Payment channels had to work on tiny btc payments which are tiny fractions of a bitcoin. To make it granular, they give a term millisatoshi which are one hundred billionths of a single bitcoin. It’s just terminology.
        Denominations add nothing to the supply of bitcoin.

        (2) What you are thinking of is akin to a stock split. There are more shares in the market after a split. The share value readjusts itself but there is no change to the valuation of the company.

        • LCPL_X says:

          “Denominations add nothing to the supply of bitcoin.”

          chemp,

          I was thinking along the lines of say in 1930s you could buy a bottle of soda for lets say 5 cents. Nowadays its 2 dollars. Its still the same soda. Inflation brought the price up. And everything adjusted,

          wherein now they’re talking about just getting rid of the penny, costs more to make.

          Granted the supply of US dollar also went up there’s more US dollars now than before. Here’s the Bitcoin argument, 21 Million Bitcoins will actually be less than that, because a bunch have already been lost.

          So arbitrarily lets say Bitcoin actually caps at 15 Million, considerably less than the total 21 Million.

          Will this cause hoarding unnecessarily, not if 1 Bitcoin can be divided into 100,000, 000 Satoshis. Which IMHO means you can not only control for inflation but also deflation. Now the ease of which you can move these units and sub sub units around is for tech to figure out.

          We’re just attempting to think about Bitcoin and its deflationary nature. Is it really?

          My only concern is, and this is why I’ve been hammering Bitcoin’s divisibility, is who decides if you can further subdivide it smaller, like Godel’s infinity. Google says more than likely it will stay at 8 decimal places. But is process of subdividing is it as simple as coding it in,

          or necessary for branching to occur and then a bunch of users just going with said branch. This part I’m not too sure about. Because to me the 8 decimal place cap is the whole point to Bitcoin.

          But the Economic issues you’ve outlined in video 3 seems to be a non-issue given that deflation is basically the point of Bitcoin (satoshis), but instead of hoarding as side effect the tech and divisibility of Bitcoin down to 8 decimals, seems to nullify said problem.

          1,500,000,000,000,000 possible Satoshis in circulation (based on our 15 Millio above). Which is more than enough for planet Earth. Then the users will infuse said satoshis with value, supply and demand. That part is economics.

          I was just thinking about your Bitcoin as deflationary, chemp.

          If you consider Bitcoin as that above number of Satoshis, the other 3 points you’ve made, will follow in the positive not negative.

          As to stock splitting, that’s more akin to splitting in blackjack, with both hands winning. Essentially you just double your money (or losing). So not quite, splitting Bitcoins to 8 decimal places.

          So the closest metaphor is fiat, wherein in 100 cents + 1 dollar + 100 dollars = 102 dollars, has nothing to do with inflation, like Zimbabwe you simply make 1,000,000,000 dollar bills. that’s hyperinflation but you ge t the point.

          Unlike fiat expanding to infinity; the 8 decimal point cap is the point to Bitcoin, for w/out that cap you get the same splitting into infinity with fiat, again Godel. Rendering Bitcoin the same as fiat.

          • chemrock says:

            I get your point.

            I believe increasing decimal points is certainly not impossible. Can be done but not an easy task, especially some parts of the protocol is hard coded. It’s an engine overhaul.

            Increasing the supply of bitcoin goes against the very doctrine of the crypto does’nt it? It’s like gold, short in supply, hence has value. Never mind, let’s take a leaf from central banks and print more, or rather code more, of the juice?

            As to whether increasing the decimals solve the shortage problem, seems like a mind teaser? Let’s work this out :

            btc 1 = $50,000
            Thus sat (satoshi)100,000,000 = $50,000

            If we increase bitcoin decimals by one more decimal:
            sat 1,000,000,000 = $50,000

            How does that increase liquidity?

            At this point in time, bitcoin itself is a commodity, it is not money.

            • LCPL_X says:

              Granted you’re thinking about it in BTC to US dollars, chemp.

              But remember the point here is to replace it all together so Bitcoin isn’t money market, its something new altogether, so if you convert it to US dollars then you’ve not fully utilized maximized its divisibility utility.

              Maybe gian will have the answer as to who can and how can the 8 decimal place in Bitcoin be changed.

              For me that’s the only weakness that I see, branching off makes sense, but if divisibility is arbitrary then that may be a flaw. but so far via Google, the consensus seems Bitcoin will be 8 decimals only.

              The human behaviour portion of all this, whether it reaches critical mass, or govts quell it, that remains to be seen. Another subject all together, chemp.

              • chemrock says:

                I understand what you are saying.
                My point is bitcoin is at the moment, just a commodity. It has value only with refernence to fiat.
                Unless and until it’s money, when it becomes a unit of accounting, then adding decimal points to increase supply may make sense.

                Your last line is the issue my videos tried to lay out. In my opinion, it’s no working out, as it stands now and in the foreseeable future.

              • LCPL_X says:

                “My point is bitcoin is at the moment, just a commodity. It has value only with refernence to fiat.”

                So long as its not Tether, where theres a 1-for-1 value, chemp. its fine. Let it play out.

                Because in the end this is all like an election.

                You say Trump will win I’m saying Bernie will. No one knows in the end . Thus we talk about the tech itself, blockchain and whether or not crypto is tethered to this and that. Value in crypto should be equivalent to what we the people decide, not tethered to US dollar, thats an oxymoron (de-centralised crypto US dollar).

              • chemrock says:

                Oh Lance, but you are so wrong with Tether USDT. It has a critical role to play for cryptos at the moment. It is functioning essentially like fiat. That is why I say, the idea that there is no need for banks in this new decentralised world is a fallacy. There may not be banks as they are physically now, but similar banking functions will evolve. Defi is per se a banbking function.

                I am putting something up on tether soon. It will explain in detail what I’m saying here.

              • LCPL_X says:

                That’s my point re election , chemp. Once there are weaknesses identified, like Tethers 1-for-1 model, then people will move on.

                That’s why Bitcoin is a better canary here. And not Tether. I agree with you Tether is a dead end. But when speaking crypto its Bitcoin, Ethereum that ‘s best studied, not the ones that go bust.

                Tether is a red herring here, unless you wanna use it as lessons learnt, chemp. Bitcoin is the thing your e arguing against, not its iterations.

                As to banking, i want banks to evolve too (but doubtful), but now they’ll have to compete with algorithms , just like taxis are now gone, or fast disappearing (I don’t see ’em here in Socal anymore, especially at LAX).

                Thus , no matter how you cut it banks have changed because of Bitcoin.

    • chemrock says:

      (1) Bad deflation vs Good deflation:
      As the literature now stands, deflation is bad. But economists can argue till the cows come home.
      For our purpose here, this economic arguments are’nt much helpful.
      Let’s just look at the practical side. Bitcoin supply is finite.
      Is 21m sufficient to oil the world economy? Hardly. The world need to work on the non-granular fractions of 0.00,000,000 or maybe even more to come.

      (2) As the protocol stands right now, 10 years down the line it is unlikely that Bitcoin can be an unit of account, function as stored value, nor have universal acceptance.

      (3) On your “What if” — I would venture a more interesting answer.

      The end game is not about cryptos. THE BIG PICTURE IS CONSUMER DATA.

      I think cryptos, in it’s present form as payment platforms, asset class, and decentralised system, won’t be around in the future.

      What has captured the imagination of some smart people is the power of a token to capture consumer data. The name of the game, and the power, lies in the control of consumer data. Thus a decentralised system is worthless — nobody owns the data.

      Presently, google pay has enormous power from google pay. The payments through their system gives them a treasure trove of data that they monetise into huge revenue streams. But google pay is no corporate token…… not yet.

      What may well evolve is a corporate token. Same peer-to-peer system, but centralised and corporate owned. Imagine this is universal, or at least a big chunk of world transactions. The corporation ends up owning every conceivable data you can imagine. The corporation can offer the services free of charge and make money on the data side.

      To do this, they need to offer a token that is not volatile. Thus what will evolve is a stable coin. These are tokens pegged to fiat. If this is pegged to the currency of the country, users have no fear of volatility.

      This was the very idea of Facebook’s Libra. It was projected to be a stable coin, pegged to several currencies. Facebook wisely took themselves out of the governance role. They are only interested in the data. But who are they trying to kid.

      But governments are not stupid. They understand the power of data. They have now seen what big tech can do with such power. Governments also understand such data can be parsed for political intel. Boy, would’nt governments want this for themselves? Why would governments leave this to any private enterprise? This is the reason why Facebook’s Libra will never be permitted. Facebook has now moved on to a milder version of Diem.

      My two cents is the future of cryptos will be government CBDC in the form of a centralised corporate (GOVERNMENT-OWNED) stable token coin. Governments provide the peer-to-peer platform using a stable coin pegged to state currency. Governments will own the data which they can mine for great political insights, and of course to also guide economic policies.

      • LCPL_X says:

        I totally agree with CBDC, my argument with Micha was that CBDC seems almost perfect for MMT. no more banks, no more middle men.

        As for data, also makes sense, those cash counter in banks track serial numbers of bills and credit data also does to the gov’t already.

        I totally agree with your conclusion, but said conclusion will force an equal and opposite reaction namely Bitcoin (and it has a 10 year head start). I know there’s a bunch of crypto, but Bitcoin to date has pedigree. Plus the finiteness of it all is again the exact opposite of fiat and I’m sure CBDC’s, to infinity and beyond!

        China kicked out Bitcoin; but will the US do the same? Or will they be just satisfied sabotaging and making money off it. Toying with it. Because again, what makes money money is just consensus, if enough people wanna use it, they will use it and if the tech is conducive to it.

        Again as Micha said the US gov’t has to stop Bitcoin, otherwise looks like more and more people are getting into it. Critical mass and all…

        chemp, but on granularity, why is this necessarily true, The world need to work on the non-granular fractions of 0.00,000,000 or maybe even more to come Isn’t this more of a tech issue, if digital wallets will accommodate said decimals why not?!!!

        Again Godel says both sides of that decimal are both infinities. fiat which favors <<<>>>> caps at 8 decimal points, thus finite. Thus finite accounts for more stability.

        • LCPL_X says:

          ooooops, inside those arrows I wrote, fiat which favors left side of the decimal is infinite; Bitcoin to the right of said decimal caps at 8 decimal places, thus finite. Not infinite , account s for more stability.

        • chemrock says:

          “I totally agree with CBDC, my argument with Micha was that CBDC seems almost perfect for MMT. no more banks, no more middle men”.

          No need CBDC for MMT.
          No more banks is a fallacy — banks serve a lot of functions, many of which the average guys are not aware. We all just criticise at the pot-belied cigar chomper at Wall Street who is scooping up all the money. The reality is different. But let’s not get into this. I just want to say banking functions will still be there in crypto world. Look at the development of Defi. It is just a way crypto is normalising to good old banking economy.

          “As for data, also makes sense, those cash counter in banks track serial numbers of bills and credit data also does to the gov’t already.”

          The data from a centralised corporate (private or government-owned) token on blockchain technolog, we are talking of an entirely different universe. They know who spent what, where, how much, where they go for holidays, etc etc, break them into demographics and you get powerful political intel.

          “China kicked out Bitcoin; but will the US do the same? ….. what makes money money is just consensus……”?

          That is precisely my point. Bitcoin is not money because there is no mainstream usage. And that is the reason why central banks have not snuffed it out. No state will ever allow a parallel currency not within its control in its jurisdiction.

          “,,, but on granularity….why…. need to work on the non-granular fractions of 0.00,000,000 or maybe even more to come Isn’t this more of a tech issue, if digital wallets will accommodate said decimals why not?!!!.

          From the practical aspect, imagine Shakey’s put up a promo sign our cuppa is now btc 0.00000020. Of course they can say sat 20, or millisat 200.

          For systems, this goes into floating point arithmetic and electronic engineering complexities of which I know next to nothing.

          “Again Godel says both sides of that decimal are both infinities. fiat which favors caps at 8 decimal points, thus finite. Thus finite accounts for more stability.”

          Honestly I don’t know where this is leading to. All I know is system wise, it is always easier to deal with integers than non-granularities.

          • LCPL_X says:

            “For systems, this goes into floating point arithmetic and electronic engineering complexities of which I know next to nothing.”

            Me neither , chemp. Our resident expert here is NH. But I’m sure .00000001 is as valid as 1.0000000 , and I agree with you I wouldn’t want to figure out how much to tip for a meal that cost .00003837 satoshis, my point is that computers will and the ease at that transaction will be done is foreseeably after all that’s what computers are for.

            So your point that integers are better than natural numbers is wrong, one falls under the other (again Godel). Maybe for old school banking, its easier. And theres the rub. This ain’t old school banking anymore.

            “I just want to say banking functions will still be there in crypto world. Look at the development of Defi. It is just a way crypto is normalising to good old banking economy.”

            “Our bank accounts will be ceremoniously closed later in the process. It is poetic that in ShapeShift’s youth, most banks refused to work with us (like most crypto companies). In our maturity, banks have become unnecessary, bureaucratic vestiges of the state which are impossibly behind the curve. Crypto has become its own financial system, and banks will be Kodak’d — wait until they learn about a self-repaying collateralized loan on Alchemix, which requires no sign-up and can be accessed in 30 seconds by anyone on Earth.”
            https://erikvoorhees.medium.com/shapeshift-is-decentralizing-639bb4c82fc8 (that’s from gian’s link below)

            I dunno chemp, just as you’re pretty sure about your position; these guys are equally sure of theirs. And one pattern from 20 years of all this tech stuff is that these guys at least in the tech part, maybe not so keen on human behaviour, they tend to be right.

        • LCPL_X says:

          “No more banks is a fallacy — banks serve a lot of functions, many of which the average guys are not aware. “

          chemp, there s a flaw in your thinking here. think about…

          if we take you proposition that the whole point of CBDC is data control and power, why then would the government share that with banks? It’s like choice A , B, C , of course you’ll take the one that’ll give your direct access, no? Simple.

          • LCPL_X says:

            “China kicked out Bitcoin; but will the US do the same? ….. what makes money money is just consensus……”?

            That is precisely my point. Bitcoin is not money because there is no mainstream usage. And that is the reason why central banks have not snuffed it out. No state will ever allow a parallel currency not within its control in its jurisdiction.

            This is a bit circular , chemp. Bitcoin is not money yet China has snuffed it out. “mainstream usage” and “jurisdiction” are the operant terms here. For example, the state of Wyoming will have parallel currencies.

            Which will get the ball rolling for state’s rights, Fed’s have already lost their drug war. I’m not betting it will win this coming currency war, chemp. At least in the good ole USA, maybe China and Russia.

  4. Thanks for this Chempo

    • chemrock says:

      nHi Gian

      Would be good to have your views on Defi here, as a participant.

      Re NFT I wonder if you have read my blog. I’m thinking as a unique token, NFT won’t take off. But they I wrote about in my blog, he has remodelled a fungible NFT concept. Now this I think is brilliant and has great potential. What are your views?

      I seem to have read a message on my mobile from you but I cannot now locate from where. You corrected me on the non-interest earning Bitcoins. You mentioned Binance offers 1%.. Thanks for pointing that out.

      Gian I was referring to interest as in a bank savings account. I’m not aware crypto exchange provides interest. Are these custodial accounts. If custodial are they using your tokens? If answer is NO for both, it seems like a promo thingy?

      I’m aware there are crypto lending businesses. Customers place cryptos with them which earns a certain %. They co-mingle the cryptos and lend them out. Some of the rates are indeed tempting. BlockFi was paying 8% I think. However, what they are doing is basically like Tokenplus. The rug can be pulled any time. What the depositors are doing in adding another layer of risks. That’s why users cannot view this like a savings deposit. It is another investment with attendant risks. Any time the tokens are not in one’s own wallet, the risk increases. There is no FDIC insurance coverage. I think BlockFi offers some kind of insurance cover, but not others.

      Linus accepts $ and pays about 4%. How is that sustainable I have no idea.

      All these lending businesses, one needs to be very careful. They operate out of jurisdictions where crypto is still the wild wild west. They don’t operate in US where the Feds are more on top of things. With quasi banking, deposit taking, or $ transactions, all sorts of SEC and banking regulations come into play. This was what happened to Bitfinex and Tethers. They ran into trouble with NY Attorney General and had to stop accepting NY resident customers. Many of these exchanges are operated by the Chinese and because it’s online, they operate in all sorts of safe hesvens. Bifance CEO is exciting China and shifting to Singapore.

      • I’ll try to be as factual as I can be.

        Re NFTs I own a few NFTs as support to Philippine artists. NFT market is burdened by the high Gas Fees of the ETH network. Hopefully, the BSC-based NFT markets can get going.

        A lot of the decentralized things I support or am looking at is trying to get permanence in this impermanent world. If I can use NFTs to save some parts of my work, what I have written, then supporting the ecosystem would have been worth it.

        Re Crypto lending. upon analysis, a lot of these exchanges are in fact just running casinos and as they are structured as such the house always wins. BUSD and USDC seem to be better audited by financial third parties. BUSD is the stable coin of Binance while USDC is the stable coin of CoinBase.

        Decentralized Finance for me is the creation of a form of world stock market. Tokenization is just the natural evolution of Financialization.

        A lot of these coins are speculative in nature but there are real projects underlying. These projects are games, take on privacy, take on web hosting, take on various software projects, and slowly but surely the tokenization will enter the real world.

        I’ll give you an example:
        This is a feature about Play to Earn:

        One of the local leaders of the play-to-earn movement is YGG.

        YGG is now tokenizing its future earnings to be able to grow bigger.

        A lot of these speculative tokens are just a reaction to the centralization of financial markets that exclude people with fewer resources. A lot of the high fees and yield is just because of the nature of a decentralized system wherein the cost of maintaining the system is a whole system of incentives between miners that maintain the system and the people who use the system.

        TLDR: Is this lot like a casino. Definitely. But make no mistake there are real projects that are getting funded because of all the speculation.

        Venture capital and angel funding system is a game of who you know and where you are from. These closed systems ate not easily accessible to the rest of the world. DeFi/ Token offerings are a crowdfunding mechanism.

        @Chempo look at how margin trading is allowed by these exchanges. The norm is 3 to 10X while there are even 100X leverage. These exchanges nudge people to try out Margin Trading and Futures Trading. A 10 percent drop wipes out 10X leverage, A 1 percent drop can wipe out 100 leverage.a 30 percent drop can wipe out 3x leverage.

        • chemrock says:

          Gian
          Thanks for your interesting take.

          “A lot of these speculative tokens are just a reaction to the centralization of financial markets that exclude people with fewer resources.”

          Just adding a cheeky comment here. Your point is true. Look at equity funds — the rich are scooping lots of stuff into their corner (but yeah they take a lot of risks). The counter to your point is that oldies like many here in TSOH, I think we are excluded from the new inclusive world of decentralised money because the complexities are getting beyond us. I trust?

          Re Margin Trading:
          Gian, in the 1980s when the computer era was just beginning, there was no link between financial data base providers like Reuters and Bloomberg and banking systems. I worked with an outsourced programmer to create an interface to facilitate what we then called non-delivery foreign exchange. This is basically the kind of FX margin trading that online platforms are offering.

          So I have some background, in terms of systems, management, compliance, and operations over this kind of products. The game is rigged against the layman players. Even professional dealers in banks have great difficulties generating revenue, especially in spot trading, I always wonder how the ordinary man in the street can win. If FX is a tough act, I’m sure trading in cryptos is many times more, given its volatility. FX is a much much more liquid market, so getting out of positions is not much of a problem. But even then, in my experience, there was an incident during the Asian financial crisis, we had difficulty helping a customer to get out of a $5b position in Deutsmarks. In cryptos, the market liquidity pales in comparison, especially during a crash. Those that play on margins, if they are caught on the wrong side of a position, will suffer tremendous losses. That is why in cryptos, the best advice is always to only play with money that one can afford to loose.

      • with respect to Bitcoin please see this whole series : https://youtu.be/EH6vE97qIP4

        Gary Gensler is now the SEC chairman of the US.

        I have about 4 months in salary in Bitcoin. I am targeting 12 months as I told Karl and Irineo as a bug out fund if shit hits the fan here in the Philippines. I just buy some bitcoin and cold storage it for an emergency. I imagine if I needed to go to SG/Malaysia/Indonesia fast this is a way to be free from Bureau of Immigration extortion that I’ve seen happen twice when visiting my girlfriend now wife who used to work in Singapore.

        • LCPL_X says:

          gian,

          Let me jump in here, don’t mean to bother yours and chemps discusion on efficacy.

          But survivalist and libertarians and bug out bags is kinda my thing.

          Again to clarify I have no Bitcoins or crypto, I do have Robinhood but I don’t really use that to get rich but more like the I-Ching, plus its fun and i can generate conversations (ie. hey did you get this stock, look into this and that) essentially i get to play advisor role to folks that don’t Google too good, so that aspect in itself is also fruitful.

          But I’ve always wondered, if you can totally get into Bitcoin in analog (ie. your cold storage). Without thumb drives or digital wallets, can one simply buy Bitcoin, lets say $2,000 bucks for 2,000,000 satoshis,

          which means these satoshis would have to be shaved off from a Bitcoin. all in analog.

          LET’S SAY…

          You don’t trust the exchanges, but you trust one person that’s into this whole thing, a Michael Saylor maximalist type, so he sells you 2,000,000 satoshis for $2,000 bucks (arbitrarily priced for this example). there’s no thumb drive to document said transaction, no digital wallet in play, becuz analog, so how do you complete said transaction?

          Is it possible to get a print out or better yet hand copy said key onto paper, then put it into a capsule , stick that into a block of cement, OR if you like a tinier capsule placed subdermally, like the back of the ear, then 10 years or so later retrieve it,

          and use it.

          How would you verify that the 2,000,000 satoshis you bought are off the hands of the original seller, is the question (especially if that seller is not so tech savvy themself). Trust but verify and all.

          At the end of the day, the above scenario encapsulates HODL, but my issue with all my buddies’ hoarding Bitcoin is that you can’t be suspicious of tech but rely on tech at the same time. It was more fun seeing them with their gold bars stored at their homes.

          Seemed consistent with a certain world view, but for a worldview based on skepticism and incredulity to then go all in with Bitcoin (based on good faith, becuz gov’t has been all bad faith presumably ), there’s a bit of cognitive dissonance there.

          p.s. — your description of margin trading is exactly how Robinhood does crypto. Why i’ve always stayed clear.

          • If you transfer something you need a node to verify that the transaction is in the blockchain. The security is in the fact you can verify by running your own node.

            Your keys allow you to transact a given address.
            you can spend 15 dollars and about 2 days to have your node to verify a transaction. In the hypothetical you Saylor can create a wallets and out the 2M satoshis and you can just scan the address to verify it’s contents.

            May e we can eventually get services that requires less tech savvy but currently you need to be good at Google and some basic computer knowledge.

            For you to spend it you need to load your keys in a wallet and make use of the services of that wallet to create a transaction and register it in the blockchain.

          • chemrock says:

            Lance

            You are describing what is essentially an OTC (over the counter) deal. Who pays who first — that, is the trust issue the analogue world does not provide.

            To summarise Gian’s reply, you can receive your bitcoins only if you have a bitcoin address, means you must have your bitcoin wallet.

            By the way, most people do not know that crypto bulk deals are all OTC. Elon Musk did’nt go to the crypto market to purchase $1.5b of bitcoins. That’s where deals get more shady and murky.

            • LCPL_X says:

              I was reading up on this and it is possible as gian indicated wherein the person (who you trust, family member friend, etc.) essentially creates everything for you, and your job is simply to hide it for safe keeping.

              I’d imagine if one was super rich and doesn’t want the gov’t to get any of their money (because you know they’ll just waste it in Af-Pak or Iraq or the UN, or whatever) it would be pretty common to go the shady and murky route.

              Like when Hermione Granger’s money ended up in Panama, or you know Delaware 😉 . But the point is if the blockchain works, and that it doesn’t really matter how murky or shady one gets their Bitcoins, it’s if their Bitcoins are documented in the blockchain, chemp.

              Thats the point.

              Thus “shady and murky” is a rhetorical device, like saying a woman’s not beautiful cuz of arm pit hairs. I love pit hairs, chemp! I think i was French in my past life.

              • chemrock says:

                Shady and murky does-nt apply is OK with you.
                I’m ashamed at that Lance.

                There has been a few Earth shaking revolutions in human history.

                The use of minted coins by Romans was the era of modern finance
                The Gutenberg press was the era of communication
                Era of transportation — trains, Ford model T etc
                Telephones – era of communication
                The PCs was the era of information
                etc etc

                Blockchain technology is the era of Trust. We can now supposedly can transact without trust. We trust in a secured decentralised technology. If shady and murky deals are OK, the idea of trust is out the windows.

                Let me illustrate how this huge Elon Musk deal could have gone.

                He goes to an OTC operator. Some of these have desks, some don’t. Who are these OTCs? I bet you many are Chinese. Uncle Dong being the most famous. He is now in a prison in China awaiting trial. Dong needs to find say 30,000 bitcoins for Elon. Where will he find that? Crypto exchange of course. He needs some exchange to exchange deals to corner that quantity. Obviously, he needs some connection with some exchange. Indeed he does. He is funder of Bitfinex. Problem is liquidity. Where to find that $ to pay for the bitcoins? Liquidity is the issue. So here is the suspect. Tether coins. Tether is in this big circle of Chinese crypto murky world. Tether is supposed to be 100% backed by $. But it’s fiat reserve is suspect. The opacity of the issuance of new tether coins is a matter of grave concern. Tether issues 1.5b new coins with no backing, sends it to Bitfinex. This sister exchange buys Bitcoins (USDT/BTC) deal from other exchanges. Then sells to Elon Musk (BTC/USD).

              • LCPL_X says:

                “Tether is supposed to be 100% backed by $.”

                You’re playing footsie , chemp.

                We’re talking about Bitcoin, not Tether. and We’re talking about blockchain. Stay on course here because this is kinda important. Bitcoin.

                Let’s transpose the above scenario but now with Bitcoin, not Tether. The question is does the blockchain in Bitcoin hold. Did you get legit Bitcoins? that’s the only question, trust but verify, but the verification is in the blockchain.

                You just three card montied all this, Bitcoin with Tether, and blockchain with tethering to US dollars, chemp. completely different issues.

              • chemrock says:

                Tether plays a very important role in the crypto ecosystem. USDT/BTC is the most traded pair. What I tried to explain above is that tether opacity of new coin issuance is in question. Bitcoins are being acquired with nothing. It’s a high possibilty a big scam is going on.

              • LCPL_X says:

                That there is a scam, i’ll defer to you, chemp, this is accounting stuff. And I know scammers tend to operate where theres less info or understanding.

                So you’re right there could be.

                But my point here, is sans the scam, how is the Bitcoin blockchain; how has it faired since. Sure what you’re saying about Tether is relevant, as lessons learnt goes, what not to do advice,

                if anything its a validation that 1-for-1 crypto for fiat is the wrong model , but Bitcoin has said that along.

        • LCPL_X says:

          thanks, gian!!!

          the other thing i find fascinating with Bitcoin is its QAnon similarity, for example that chart above, and you have tons of folks who write lines and curves and call it analysis. Theres all these positive feedback loops, but the truest of believers remain Michael Saylor, and he doesn’t really do charts i noticed, just one simple mantra buy and HODL.

          Difficult to make something useful if nothings being used. so the strategy of letting the tech catch up makes sense, if you assume tech will catch up. So your input in the uses of all this is very helpful, thanks!

          • tale a look at this. was posted a few minutes ago. I am amazed:. Today, we announced that ShapeShift is decentralizing.

            Unorthodox, but it is the only way to maintain fidelity to the most important principles of crypto; specifically, self-sovereignty over money.

            Without that principle upheld, we’re all just LARP’ing.

            A thread…

            • LCPL_X says:

              Great read, gian!!! Very relevant also to Voting issues here now,

              ========================================================

              But How Will It Actually Work?

              Fundamentally, ShapeShift is moving from a centralized, closed-source application with bank accounts, governed and owned by shareholders, to a decentralized, open-source application without bank accounts, governed and owned by holders of the FOX Token.

              Yes, this means ShapeShift is becoming a DAO.

              Again, this is a process unfolding over some months; it is not immediate. Here are the major elements of our plan:

              The Core Product

              The ShapeShift.com crypto platform and mobile app, will gradually be open-sourced. This must be done carefully, and we will not rush it. As the project is open-sourced, feature development (and protocol integration) will move to a collaborative, community-driven model. ShapeShift is not trying to compete in any one vertical; rather, it is an explicitly multi-chain, self-custody interface for individuals (not institutions) to interact with digital assets. The community can build onto this open-source platform as they see fit.

              Our subsidiary projects all have different paths:

              KeepKey will likely migrate into an independent, open-source hardware wallet project and remain closely integrated with the ShapeShift platform.

              Portis is spinning off as an independent startup, having built a compelling SDK for play-to-earn gaming and NFT users.

              CoinCap has achieved several hundred thousand monthly active users plus millions of downloads, and will be spun off later this year.

              The FOX Token

              We love token economic models and see massive potential in their adoption, but like others, we were put off by the excesses of the ICO boom. We’ve thus treaded carefully with our FOX Token, and we’ve never sold any of it to anyone. We’ve integrated FOX slowly into our platform and distributed it out to customers in various promotions over the past two years.

              There are roughly 21,000 holders of FOX to date, and today it has been airdropped to over a million eligible addresses, consisting of over 900,000 ShapeShift customers and over 160,000 holders of various DeFi tokens. These projects include Uniswap, THORChain, Aave, Gitcoin, and half a dozen others that have inspired us. 340,000,000 FOX Tokens were granted via this airdrop (34% of max total supply).

              FOX Tokens will ultimately have all governance rights over the economics of the ShapeShift platform (similar to the Uniswap model).

              DAO, Treasury, and Governance

              The ShapeShift DAO treasury has been established, endowed with over 242,000,000 FOX Tokens (24% of max total supply). Any FOX unclaimed from the airdrop after three months will be added to this treasury.

              Governance over important ShapeShift decisions (such as what to do with the ShapeShift DAO treasury) will gradually migrate to the community of FOX Token holders. We’re using a stack consisting of Snapshot, Boardroom, Sablier, Discourse, and other leading decentralized, open-source toolsets. We’ve been impressed by many of the successful DeFi projects that already demonstrate effective decentralized governance. You can get involved here: https://discord.com/invite/shapeshift

              A non-profit foundation (name TBD) will be established and funded with the mandate of facilitating ShapeShift’s transition into a decentralized model. It will employ a small handful of highly dedicated community members. Anything that can’t be immediately decentralized will have the foundation’s structural support. After some number of years, the foundation will ultimately dismantle itself and disappear.

            • That is a “wow” move. Huge courage and conviction.

  5. Karl Garcia says:

    Thanks for this Chem.

    Somewhere in the world there is a country that made bitcoin legal tender and that is El Salvador.

    “El Salvador made Bitcoin legal tender on June 9, 2021. It is the first country to do so. The cryptocurrency can be used for any transaction where the business can accept it. The U.S. dollar continues to be El Salvador’s primary currency.”

    “The latest significant events are the Office of the Comptroller of the Currency (OCC) letter in January 2021 authorizing the use of crypto as a method of payment, Paypal’s introduction of Bitcoin, and Tesla’s acceptance of Bitcoin to purchase Tesla cars and solar roofs. Tesla reversed course on accepting Bitcoin in May 2021, citing environmental concerns around the resources required to mine Bitcoin.”

    From Investopedia

    I guess Tesla should change their mind once more. Since bitcoin mining consumes a lot of electricity, they should encourage miners to buy their solar roofs.

    ===
    They say All bitcoins will be mined by 2040, and transaction fees will be the incentive to go on.

    Meaning the bitcoin miners will make sure transactions go on after 2040 by increasing the fees?
    If that is the only method available then Chem is correct, bitcoins would not last.

    Big Data will evolve into Bigger Data by then and maybe CBDC will be the thing.

    • chemrock says:

      Karl, I covered El Salvador briefly in Part 3 – Final Thoughts.

      I don’t think it will work out for El Salvador. WB and BIS are also not supportive. Reasons:
      1. Strike – the payment platform to be used, works on Bitstream Lightning Network. They are based on the stablecoin Tethers. Bitstream and Tethers are from the same company. Tethers is having an integrity problem and may collapse.
      2. Strike says they will switch to Bitcoin Lightning Networks. But with Bitcoin, they do not have the tr=hroupt capability to support quick transactions, and the fees will kill all micro payments. It just won’t work.
      3. The president of El Salvador signs up with a 20+ year old crypto entrepreneur who manages a company of 13 employees to work out the monetary infra for his country. Great confidence.
      4. El Salvadoreans don’t want to hold Bitcoins, they want $. But Strike cannot hold $, the US Feds will come after them.
      5. The president arranged for 5 banks in the country to hold the $. How will this work out for the unbanked?
      6/ Why should the president allow the people to hold $? His vision is for Bitcoin to be used as legal tender. The govt will sweep away the $ to pay external debt, or to make a small group of people very rich.

      Satoshi’s vision was as the coin supply increases, miners reward in new bitcoins will decrease (the rate is halved every 4 years) and transaction fees will go down because volume increases. It’s not working out that way because its throughput of about 4.6 transaction per second is way too low. Fees are exhorbitant at the moment which killed the micropayment transactions.

      • Karl Garcia says:

        Thanks again.
        Bukele is resortimg to promo gimmicks like offering $30.00 worth of Bitcoin to citizens who boost its use.
        Plus Bukele wants to use bitcoin as a tourism and investment magnet.

        “Why create this law? Because Bitcoin has a $600 billion market capitalization globally and if we do this, investors and tourists who own Bitcoin will come to the country and benefit Salvadorans and the economy,” Bukele said

        Let us see wat happens.

        About Satoshi’s vision.
        Thanks for explaining it further
        Especially with regards to transaction fees.

        • LCPL_X says:

          karl, chemp, et al.

          I was gonna post this directly under sonny and Ireneo’s talk about schools in the Philippines and Ireneo’s latest comment about public support and public sphereness of schools.

          https://oflschools.org/about-our-charter-school/

          But I realized just having read chemp’s play by play of El Salvador. This OFL scam maybe similar to what chemp just outlined above.

          So if you attend a public high school here, and either wanna take on extra classes in the summer or repeat classes you’ve failed (or gotten bad grades in). You attend summer school. I think I must ve attended 2 summers when I was in school.

          Nowadays, you have OFL (Opportunities For Learning) taking over summer programs. Everythings online where before it was high school teachers working extra for the summer, over time pay.

          Public education is free. So at no cost to the students, but the scam is somewhere in the teacher’s salaries (for the summer), and in enrollment money because money goes to every student enrolled in the program. And schools paying too.

          Its like they get paid thrice. Plus tax credits as non profits i’m sure.

          So there’s a bigger corporate entity which covers OFL and other similar websites/sub-companies. But the mother company isn’t so public. The biggest subcompany of this whole conglomerate though is their Tech arm that’s in Pasadena.

          And i think the whole point is Big Data in this scam, because even just to take summer school a student has to divulge not only his/her records from school but extra data not really necessary for one just doing one summer class.

          The big assumption in El Salvador is that the Bitcoin community take care of said country given their interests align. Just like high schools can outsource itself, and teachers can get extra cash working outside of school, and students get their classes to go onto college,

          but as chemp mentioned, if there are other hidden interests, then it all falls apart. Its like Commanding Heights all over gain,

          >>> Private vs. public then; central vs. de-centralized now. <<<

          Wyoming seems a more promising experiment in Bitcoin; tech folks (a bunch of Silicon Valley execs have homes in Jackson Hole) and libertarians (local GOP, betting on the collapse of the dollar) have also converged there.

          “Wyoming’s economy is powered by some of the oldest industries in human history, including mining, agriculture and tourism. But in recent years the state has emerged as an unlikely champion of far newer inventions: cryptocurrencies and the blockchain technology that powers them.

          Now, the Cowboy State is arguably the most crypto-friendly jurisdiction in the United States, thanks to state leaders’ shepherding a series of new laws.

          These changes have encouraged several high-profile companies in the industry to move operations from traditional high-tech hubs like San Francisco to Wyoming’s capital city of Cheyenne, including crypto exchange Kraken, blockchain platform Cardano and payment protocol firm Ripple Labs. But it has also put the state on a potential collision course with federal regulators who appear far more skeptical of the costs and benefits of blockchain technology than libertarian-leaning Wyomingites. “

          https://slate.com/technology/2021/06/wyoming-cryptocurrency-laws.html

      • Karl Garcia says:

        Just confirming some of what you outlined.

        ” El Salvadoreans don’t want to hold Bitcoins, they want $. But Strike cannot hold $, the US Feds will come after them.”

        Confirmed by this

        “From early conversations with local financial institutions, Mallers learned that custodying dollars on users’ behalf would be illegal for a service like Strike’s, he told McCormack. Hence, USDT, a cryptocurrency that usually trades for $1, had to serve as a stand-in for dollars sent to El Salvador through Strike’s system.

        “We built tether into Strike which was the equivalent of the Chase bank account in America and at least gave us some MVP basic functionality,” Mallers said, using the tech industry abbreviation for “minimum viable product.”

        https://www.coindesk.com/strike-usdt-tether-jack-mallers-el-salvador-bitcoin
        ===

        It seems that Mallers did not do his homework before dealing with El Salvador.
        At least they now have 20 employees from 13 you’ve mentioned.

        Problems you mentioned about the unbanked is not the only problem. Mallers is counting on the use of ATMs which is scant and he has only dealt with five banks so far.
        He and his team must be a super multi-taskers because he is also working with Visa because they want to introduce bitcoins to credit card holders.

        But if El Salvador makess this work with or without Mallers, then very good.

        • LCPL_X says:

          “Summing up Strike’s temporary use of tether in the interview with McCormack, Mallers waxed philosophical, speaking about his journey in the second person.

          “You launch with tether, you growth hack, you learn and be a good listener, be a good observer, you end up meeting with the president and helping to find regulatory clarity in the country,” he said. “And then you roll tether out, get it the f**k out of here.”

          ———————————————————————-

          As funny as that quote is, karl.

          I think El Salvador giving both its finger to WB and other bankers is as Joe would say a “wow” move… and if theres one country that deserves to peel off this system, its El Salvador, ei. banana wars, then civil wars , then Iran-Contra crap, now drugs, etc. etc. the whole of Central America for that matter, except maybe the ones that have done well Costa Rica/Panama, have been fucked with enough.

          its a “wow” move, maybe they picked the wrong guy in Mallers, but just the attempt is good enough IMHO. Kudos to them. I hope more Salvadoreans get into tech and their internet improves. That way they don’t have to come all the way over here.

          Joe: “That is a “wow” move. Huge courage and conviction.

  6. chemrock says:

    Joe my replies to Gian and Karl went to Trash?

  7. i7sharp says:

    https://einsteintoken.net/
    x-
    A scientific cryptocurrency that is meant to change the future of science in the world

    As a human being, one has been endowed with just enough intelligence to be able to see clearly how utterly inadequate that intelligence is when confronted with what exists.
    -x

    hmmm, … “kny” comes to mind:
    https://www.google.com/search?q=site%3Ajoeam.com+kny

  8. madlanglupa says:

    I could not be convinced entirely, in that the concepts and theories are good on paper, but then is quickly co-opted by hucksters and fraudsters to rip off anyone gullible with money — this country got ravaged by such characters with fake gold bars and stacks of counterfeit dollars, what more with newer generations being bombarded by teases of a easy buck online?

    • i7sharp says:

      Speaking of “hucksters and fraudsters to rip off anyone …” ….

      BITCOIN IS SCAM
      https://www.bitcoinisscam.com/
      x-
      An unbiased research based on objectivity and rationality to prove Bitcoin is scam and fraud. 60,000 words of shocking revelations, based on 3 years of data collection and analysis.
      -x

      Just sharing what I come upon.

      Anyways, …
      Bitcoin – a new monetary system or a Rube Goldberg machine or a ….
      BIG DISTRACTION?

      • LCPL_X says:

        “Over 60,000 words of shocking information and three years of unbiased research to prove Bitcoin as the greatest scam in the history of mankind after free floating fiat currencies.”

        i7sharp, its a pro-gold site!!! fiat is also a scam according to it. Can you share something relevant from that site, a point that we’re discussing here, or another one relevant to blockchain, anything really.

        here’s a chart for comparison,

        • i7sharp says:

          Lance,

          “… it is pro-gold site!!!”

          To be pro-something is a given.

          Something I came upon just now:
          (Little by little, I get to “know” a little more about bitcoin. Methinks.)

          Bitcoin Is A Religion.
          View at Medium.com
          x-
          The bitcoin bible is Satoshi’s manuscript — https://nakamotoinstitute.org/bitcoin/

          It’s no accident that the first bitcoin block is called the ‘Genesis’ block — created on January 3, 2009. (Genesis is the first book of the Bible for those who don’t know.)
          -x

          • @Sharp, the comment was directed to spam. The spam filter does this automatically when the source or content patterns are suspicious or have a prior history of spam-like behavior. I have no control over these filters although maybe my prior sending of some of your argumentative comments to trash does mind-train the machine.

          • LCPL_X says:

            “There’s a record of every bitcoin transaction ever made…
            To fully understand how the blockchain prevents double-spending, you need to know that from the delivery of the very first bitcoin client in 2009, bitcoin’s blockchain has maintained a complete record of every transaction ever made. As all transactions are cryptographically hashed to the previous blocks, you can’t simply change the record. This record is known as a blockchain because a new group of transactions, known as a block, is added every ten minutes.”

            View at Medium.com

            i7sharp, Genesis is just Greek for Bereshith ( בְּרֵאשִׁית ‎): “In beginning” — it would’ve been weirder if they called it Bereshith.

            • i7sharp says:

              Lance,

              Speaking of “bereshith,” Richard Wurmbrand wrote in his
              “100 Prison Meditations”:
              x-
              34 How to Read the Bible

              In prison we repented of many sins. We repented also of
              the manner in which we had read the Bible.

              The Talmud fixes a rule, “Ein dorshim maase bereshith
              beshanaim” – “You do not speak about Genesis, the things
              of the beginning when you are in two.” God created the
              universe all alone. Adam was one single man. The Bible is
              read properly only when you transpose yourself completely
              into the situation and state of spirit of the author at the
              moment of writing.

              Remember the Bible is only a summary. Adam lived 930
              years, but the Bible has only one chapter and a half, 40
              verses, to devote to so long a life.

              Just as Cuvier reconstructed the skeleton of a prehistoric
              animal from a single bone, we are called upon to re-create
              everything from just a few words.

              Remember that much of the Bible is poetry. Although
              Hebrew poetry does not rhyme, one of its characteristics is
              an alphabetical structure, e.g., JOB 13:7-11, in which every
              line starts with an “H.” The whole Psalm 119 is arranged
              n alphabetically, beginning with verses which have “a” as first
              letter, others which have “b” and so on. Poetry can reveal
              truth, but not necessarily accuracy of detail.

              The Bible is meant to be read very slowly with special
              pauses for respiration and meditation. In the Hebrew text
              there is the ~athnach~, a sign which divides a verse into main
              clauses. Another sign for pausing is the ~segholta~ [ ] which

              -x

              There are many things that Richard had written that I still do not fully understand but relative to “bitcoin” they are … a piece of cake.

              Lance, if I read you right, you love (adore?) Bernie Sanders who love (I think) Marx.
              Richard Wurmbrand makes clear that he thinks Marx is satanic.
              Here is a review I came upon just now (after googling, of course):
              https://thelittlemanreviews.wordpress.com/2015/06/08/book-review-marx-and-satan-by-richard-wurmbrand-1986/

              • LCPL_X says:

                I guess I love Satan too, i7sharp.

                I love Bernie, yes; but I adore AOC. Adore. ADORE.

                Did you know Ha Satan just means the Adversary, i7sharp https://en.wikipedia.org/wiki/Satan#Hebrew_Bible which makes Satan literally the Devil’s Advocate, whether the Satan and the Devil are one and the same is debatable , but let’s save that debate for another day.

                The question is if Bitcoin is truly the mark of the Beast.

                “The Classical Greek word charagma (χάραγμα), translated as mark (of the beast) in Revelation 13:16 can also mean any mark engraved, imprinted, or branded; stamped money, document, or coin.” because the hashing of the blocks in blockchain is very similar to stamping, thus “stamped money”.

                Ergo, Bitcoin = Mark of the Beast, or hashed blockchain.

        • i7sharp says:

          Lance,

          This is my 2nd attempt to respond to you.
          The first one, somehow, did not show up here at the site.
          I have just seen Chemrock’s response to you: “… But we can of course discuss the pros and cons.”)

          Here is what seems to be one of the cons:
          View at Medium.com
          x-
          In our capitalistic society, it’s hard to comprehend but the primary objective for the true bitcoin believers is not to make money. Before making money, the true bitcoin believers want to protect Satoshi’s vision, protect bitcoin, protect the religion. And they do it fiercely.

          When bitcoin price goes down, they relish it. They joke about it and then they buy more bitcoin because they have faith that bitcoin will always recover and go back up. When the price plummets, they laugh at the unbelievers, the pessimists, the doubters, the bitcoin atheists. Their mantra is “HODL” — hold on for dear life.
          -x

          • LCPL_X says:

            That’s basically, Michael Saylor , i7sharp.

            And I agree with you that there is an element of faith operant here like religion.

            But unlike religion , there is blockchain. Now if you’ve notice chemp devoted 4 videos, but nothing really on how blockchain has failed. There’s consensus building for sure, this is the branching off process, like how from Greek Bibles, Latin Bibles develop then Aramaic Bibles, then finally to your beloved KJV.

            Unlike religion which requires 100% belief, no room for doubting (otherwise heresy and hell); Bitcoin/crypto’s trajectory is towards Decentralization of everything. that’s the point of blockchain. I don’t know any religion that encourages decentralization, this is why Luther and Calvin fought to ensure the protestant movement doesn’t branch off too much.

            But in America, it did, now we have Mormonism, but also weird iterations of Christianity that developed amongst the natives and also far off isolated places like Appalachia.

            In addition to HODL,

            there is also BTD, Bored To Death; FOMO, Fear Of Missing Out; YOLO You Only Live Once.

            Whether or not it becomes religion is secondary, the focus should be how many people are getting converted or at least getting interested in Bitcoin that we should focus on. El Salvador and Wyoming are good examples, China going CBDC, to include other countries now going CBDC, is another good example.

            In conclusion , its about the blockchain, i7sharp. That is what’s drawing people in, thus if one wanted to bring down Bitcoin, the attack has to be focused there. Otherwise, we’re just running around in circles.

      • chemrock says:

        For every naysayer there are diehards. To each their own opinions. But we can of course discuss the pros and cons. Just like what Lance is trying to do.

        I’m pretty sure Satoshi never envisaged what Bitcoin could become in a decade. Had he knew, he would never have set the cap at 21 million bitcoins, nor a transaction throughput of under 5 per second. In other words, he did’nt start out to scam. Scams occur at the exchanges and price manipulation.

        Scams are like One Token and Token Plus. The enterprise was planned as a scam.

        • LCPL_X says:

          One question, chemp:

          Is Bitcoin’s blockchain open or closed to scams???

          If open how so?

          • Karl Garcia says:

            Security issues like giving away your PIN, passwords might still happen even in the time of quantum computing.

            So a good measure would be tatooing the security feature in your third eye because you need the two eyes.Just be sure not to be hypno
            tized or in local parlance “budol-budol”
            Double spending, was the earliest schemes used by hackers, and hucksters to somehow counterfeit bitcoins by disrupting the blockchain.

            If it is already too obvious they proceed to the next trick in the cat and mouse book to bypass any security verification feature until they run out of ideas.

            • LCPL_X says:

              “Double spending, was the earliest schemes used by hackers, and hucksters to somehow counterfeit bitcoins by disrupting the blockchain.”

              Can you elaborate , karl. How exactly did this disrupt the blockchain?

          • chemrock says:

            Like I mentioned in my video, the use of cryptology and decentralised protocol ensures a very high level of security. Basically, the system itself cannot be hacked.

            If someone use an unspent bitcoin (UTXO) and before that transaction has been confirmed, he tries to use the same UTXO for another transaction, the 2nd transaction will be rejected, because transactions are verified by full nodes. The verification process can determine if the UTXO has been used. Thus a double spend attempt in this manner will fail.

            Double spent window of opportunity exists in 2 situations – in a blockchain fork and 51% attack. This happens because when the public blockchain is resolved, and previously accepted blocks are rejected, as explained in the video, it may result in certain transactions being returned to sender, The senders are supposed to resend the transactions. But if the sender has already received the goods he purchased, he may refuse to resend and instead use it for a new transaction. Vendors minimise this risk by executing orders only after another 5 levels of confirmation have passed. This way, blockchain forks which occurs routinely due to the nature of a consensus based decentralised system coping with network router delay issues, do not impact them. But 51% attacks are premeditated attacks and attackers can and do get away with it.

            • Karl Garcia says:

              Understood chem,
              The system is built not to be hacked.
              There are more than enough measures to minimize the risks.
              Thanks for your patience.

  9. Karl Garcia says:

    As you have said above bitcoin made sure Double spending can never happen, but risks are always a given.

    Disrupting even just by attempting to fool a fool proof system even indirectly like taking advantage of users that have been lax in securing or safekeeping their bitcoins.

    There might be one to many attempts, but with limited success.

    “Disadvantages of the Blockchain Concerning Double-Spending
    Hackers have tried to get around the bitcoin verification system by using methods such as out-computing the blockchain security mechanism or using a double-spending technique that involves sending a fraudulent transaction log to a seller and another to the rest of the bitcoin network.

    These ploys have met with only limited success. In fact, most bitcoin thefts so far have not involved double-counting but rather have been due to users storing bitcoins without adequate safety measures.

    The greatest risk for double-spending comes in the form of a 51% attack, which can occur if a user controls more than 50% of the computing power maintaining the distributed ledgers of a cryptocurrency. If this user controls the blockchain they will be able to process transfer bitcoins to their wallet multiple times by reversing the blockchain ledger as though the initial transactions had never occurred.”

    https://www.investopedia.com/terms/d/doublespending.asp

    Here is another link.
    I think this is no longer a “cautionary tale”

    https://www.technologyreview.com/2019/02/19/239592/once-hailed-as-unhackable-blockchains-are-now-getting-hacked/

    “We shouldn’t be surprised. Blockchains are particularly attractive to thieves because fraudulent transactions can’t be reversed as they often can be in the traditional financial system. Besides that, we’ve long known that just as blockchains have unique security features, they have unique vulnerabilities. Marketing slogans and headlines that called the technology “unhackable” were dead wrong.

    That’s been understood, at least in theory, since Bitcoin emerged a decade ago. But in the past year, amidst a Cambrian explosion of new cryptocurrency projects, we’ve started to see what this means in practice—and what these inherent weaknesses could mean for the future of blockchains and digital assets.”

    • LCPL_X says:

      thanks, karl! from your tech review link was this report, which I gotta admit I’m now very much questioning Bitcoin. This is truly serious stuff. Make room in your team, karl, cuz I just might have to switch sides. Sorry, gian.

      But let me Google this more before I defect to your team.

      https://bitcoincore.org/en/2018/09/20/notice/

      “CVE-2018-17144, a fix for which was released on September 18th in Bitcoin Core versions 0.16.3 and 0.17.0rc4, includes both a Denial of Service component and a critical inflation vulnerability. It was originally reported to several developers working on Bitcoin Core, as well as projects supporting other cryptocurrencies, including ABC and Unlimited on September 17th as a Denial of Service bug only, however we quickly determined that the issue was also an inflation vulnerability with the same root cause and fix.

      In order to encourage rapid upgrades, the decision was made to immediately patch and disclose the less serious Denial of Service vulnerability, concurrently with reaching out to miners, businesses, and other affected systems while delaying publication of the full issue to give times for systems to upgrade. On September 20th a post in a public forum reported the full impact and although it was quickly retracted the claim was further circulated.

      At this time we believe over half of the Bitcoin hashrate has upgraded to patched nodes. We are unaware of any attempts to exploit this vulnerability.

      However, it still remains critical that affected users upgrade and apply the latest patches to ensure no possibility of large reorganizations, mining of invalid blocks, or acceptance of invalid transactions occurs.”

      _________________________________________

      “Bitcoin Core is an open source project which maintains and releases Bitcoin client software called “Bitcoin Core”.

      It is a direct descendant of the original Bitcoin software client released by Satoshi Nakamoto after he published the famous Bitcoin whitepaper.

      Bitcoin Core consists of both “full-node” software for fully validating the blockchain as well as a bitcoin wallet. The project also currently maintains related software such as the cryptography library libsecp256k1 and others located at GitHub.

      Anyone can contribute to Bitcoin Core.”

      __________________________________________

      “an attacker could have actually used it to create new bitcoin – above the 21 million hard-cap of coin creation – thereby inflating the supply and devaluing current bitcoins.

      Such a perversion of the rules would, at worst, according to many, make users not trust the cryptocurrency anymore.”

      __________________________________________

      Thanks, karl!

  10. chemrock says:

    Watch this video and you may get a good perspective of cryptos. Or the ridiculousness of it.

    This is a new stable coin — Million Token. A one man show sitting in his study room (in his parent’s house, he moved back to his parents after his divorce), he codes the new crypto and explains how it can be done, how he launched it.

    This is Steven, he is a brilliant systems engineer (ex-Googles and ex-Facebook). Is this a scam or like he said, a social experiment. But for background, he is not a crypto enthusiast. He has made his money in cryptos, but he has been warning that people can play only with money they can afford to loose. In fact he has been quoted to predict the possible collapse of bitcoin.

  11. tom kho says:

    Have a great, even if socially distant day,

    Tem Padla

    >

  12. Karl Garcia says:

    Time to ban crypto?
    Chempo, tell the author that bitcoin is ransomware proof.
    https://thehill.com/opinion/cybersecurity/564696-bye-bye-bitcoin-time-to-ban-crypto-currencies

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