Baltic Oil Terminals Share Discussion Threads

[no dice] 11/12/2017 19:08

I'm here because it's always exciting to witness a financial mania - Bitcoin in this case - and the discussions on this board provide an insight into the thinking of those who take a different view.

I'm no cheerleader for fiat currency, I just take the view that the three reserve currencies - USD, GBP and EUR - fulfil more of the desired characteristics of money that Bitcoin.

[spadman] 11/12/2017 18:51

why is nodice here if he thinks fait currency/infinite paper money is such a good idea?

[alexx] 11/12/2017 17:39

yes no dice, but it was only two hours ago when you told me "Any case is easy to make with hindsight". But also you were discussing keeping your money as currency, not putting it in the stock market.

[thegrumpster] 11/12/2017 17:38

Thought my computer was running a bit hot.


"....Research by ad blocking firm AdGuard ...."

One way of selling your product.



Fileless malware:

Extract:

"This article aims to help you detect and remove the newly emerged fileless BitCoin mining software and protect your computer in the future.

Fileless malware is shaping up to be the next big thing in cyber-security, and it will not go away soon. One such virus is the latest discovered BitCoin mining malware. This infection has the only purpose to mine BitCoin, Monero or other cryptocurrencies on the computer it has infected. For cryptocurrency mining to occur, the malware may run processes on the infected machine that may result in the significant over-usage of its resources, and it’s slowing down. And the worst part is that there are no files on your computer, meaning it is very difficult to detect it. If you believe you are infected with this BitCoin miner malware, we advise you to read this article to learn how to remove it from your computer and protect yourself in the future as well."


Mining after the browser is closed:

[hpcg] 11/12/2017 17:12

compoundup - EU and UK guarantee protection against bankruptcy for 100k Euro or 75K GBP. There are assorted consumer rights and protections associated with using banks, though one still has to be careful of course. There are some good protections buying goods and services with a credit card. With any of the current cryptos you have zero rights and protections. If your private key can be forced or stolen, or you lose it, or your wallet gets encrypted by a virus, or the device where you store your wallet gets lost or stolen (backups can help of course) or a wallet holder collapses you have nothing, zilch, zero. All of these have happened to people.

[no dice] 11/12/2017 17:11

As I said I'm just not the tin foil hat wearing type; I'm more aligned with this quote from Warren Buffet:

"In the 20th century, the United States endured two world wars and other traumatic and expensive military conflicts; the Depression; a dozen or so recessions and financial panics; oil shocks; a flu epidemic; and the resignation of a disgraced president. Yet the Dow rose from 66 to 11,497."

That sentiment may not work for everyone but it works for me.

[alexx] 11/12/2017 16:59

compoundup

no dice probably didn't know what being "cyprused" from my 3395 meant either. I have three friends with 6 figure bank accounts so no dice certainly isn't alone. The majority still agree with him, not the relatively few in crypto, gold, silver.

[compoundup] 11/12/2017 16:31

no dice - Let's see if anyone can put up a good reason for holding GBP in a British Bank. How about the new legislation being prepared for adoption? If you have more than £5000 in a UK bank and HMRC thinks you owe them money, they can just take it from your account without reference. If you want it back, the onus is on you to demonstrate why they weren't entitled to it in the first place. As we know, civil servants are (mostly) human and might make a genuine mistake. Their mistake would still be your problem.

Digital money - which is where GBP and most other fiats are headed - can be switched on and off at the government's whim. Is this not a pretty strong argument for a new paradigm? Does not Bitcoin "The Internet of money" provide just that?

"USD, GBP or even EUR...are better quality money". Not a simple point to answer but wrong IMO where "store of value" and "means of control" attributes are concerned.

[no dice] 11/12/2017 15:47

Any case is easy to make with hindsight. The issue with Bitcoin is that its volatility is just one element that weighs negatively on its "quality" as money. Not being the tin foil hat wearing type, if I had a requirement to hold a sum in an account for lets say a year I would choose USD or GBP or even EUR any day over BTC - those three are just better quality money that Bitcoin, even if you disagree with the methods by which that quality is maintained.

[alexx] 11/12/2017 15:25

no dice

"The volatility of Bitcoin severely hampers its use as a store of value"

If you were in Venezuela the price of bitcoin would be up 200 times in a year. And you think someone would be worried about volatility!

I suppose if bitcoin was rising at 10% a year then the volatility would be bad on the nerves but as it is it just doesn't matter ( I mean to me and probably other holders ). If I had a big sum in a bank I would at the very least know I am losing 5% a year, and worry also that as it is legally just a loan to my bank and not actually my money it may be cyprused at any moment.

[compoundup] 11/12/2017 14:16

Steve - The first miner to solve a block gets the reward and the fees. The competition starts again on the next block. There are lots of resources on t'Internet. Widely accepted as the most eloquent evangelist is Andreas Antonopoulos - search Youtube for aantonop. A lot of his lectures have been edited into short segments to illustrate specific topics.

[compoundup] 11/12/2017 14:12

no dice - History shows that you shouldn't hold paper fiat if you want to preserve capital. Bitcoin is in it's infancy. It's volatility will decrease with widening adoption.

[steve73] 11/12/2017 13:55

thanks c.up.. another piece of the jigsaw falls into place for me...

OK - one last question (for today). Does all the effort (i.e. energy consumption) by all the miners get rewarded (with either a new coin or from payment of the fees) or is it just the one's who actually solve the problem and complete the block? Does all the effort expended by unsuccessful miners go unrewarded?

Can you recommend any links that explains the process in not too difficult terms... I've tried to read the original white paper but it's somewhat confusing - at least on a first pass. TIA.

[no dice] 11/12/2017 13:53

The volatility of Bitcoin severely hampers its use as a store of value, even for someone unfortunate enough to be a citizen of Venezuela/Zimbabwe/Argentina/Greece. Bitcoin can certainly serve as a mechanism to transfer capital out of those countries but as soon as the transfer is complete its volatility would impel those wishing to preserve their capital to exchange it for a fiat currency of their choice.

[spadman] 11/12/2017 13:48

Steve the reason bitcoin transactions have high fees are that these transactions are competing to be included in a block limited to 1meg in size.

Bitcoin cash has unlimited block size to keep fees low, Bitcoin Core suggest sidechains as a scaling solution. Sidechains aren't Bitcoin transactions untill they are "settled on chain"

Mining difficulty is related to the price a block is worth ie the value of 12.5 bitcoins. If the value goes up more miners will compete for block rewards keeping the network secure.

[compoundup] 11/12/2017 13:45

Mining isn't so much about processing transactions as finding the next block. It's a competitive process to solve a mathematical puzzle. Miners should include as many fee-bearing transactions as they can in a block and if there is congestion they select according to fees. At relatively quiet times, low fee transactions can get through in the next block. When miners are gaming the system as described above (virtually empty blocks) you have to add a substantial fee to get an important transaction through quickly.

SegWit (simplistically) reduces the data per transaction that goes into a block and increases the block size by roughly a factor of 2. So logically you can see how the concept of more transactions per block can benefit the users without reducing the overall fee amount for the miner.

If you buy BTC using Localbitcoins, you should transfer them into your own wallet (trezor, Ledger, etc.) otherwise they are controlled by someone else's keys (i.e. not strictly "your" Bitcoins). You can receive into a SegWit address in your wallet. At the moment Localbitcoins are only using non-SegWit addresses to receive, so if you decided to sell some BTC using their service, you would be charged at the non-SegWit (higher) rate for transferring back to them prior to selling. Localbitcoins also charge sellers escrow fees.

[spadman] 11/12/2017 13:42

No dice is confusing adoption with a bubble. The manias in tulips, railways, dot coms signaled adoption. The tulip market in the West only got bigger, Railways expanded enormously and the internet is still only growing.

Amazon share price at the height of the dot com "bubble" was just over $100, today it's $1,162.

If Bitcoin becomes any sort of standard as a crypto the price will have to be anywhere between 300,000 and 1.5 million imo

[steve73] 11/12/2017 13:10

coumpoundup..

Your understanding of how the Blockchain system works far exceeds mine...I've only been involved and doing some rather trivial research for a couple of weeks, but I do find that making relatively simple analogies helps me to understand, even if there are a few gaps and shortcomings.... I'm trying to fill those gaps with my questions!

So are you saying that as the number of transactions increases, then the cost per transaction will fall? It's my understanding that with sufficient processing power available, the ENERGY cost will remain roughly the same.. Surely it takes the same energy for 1000 computers (miners) to process 1 transaction each, as for 1 computers to process all 1000 transactions? But obviously it would take that 1 computer 1000 times longer, so more computers is definitely an advantage - in terms of speed. Would I be correct in assuming that the LN's you refer to are a newer and more efficient means of processing? In this case then yes, I agree that processing capacity would increase and energy costs (and so the transaction fees) fall.

It's my understanding (and I could well be wrong here) that most localbitcoin transactions do not hit the open market (ie. do not affect the blockchain).. They simply transfer internally from one user to another via an escrow facility (which allows time for the actual cash funds to be transferred and confirmed). There are no fees for internal BC transaction, but most transactions are made in response to adverts to trade via their escrow which themselves carry a 1% fee to LBC. The high costs are due to the fact that most advertisers charge around 3-5% above or below the market price. It's only when BCs are transferred into or out of the LBC system to another platform (or to a personal wallet) that there are actual blockchain process fees charged... and these "external" fees seem to be variable depending on how busy the network is to ensure that they're attractive for the miners to process.

My analogy with gold is certainly more relevant than tulips.. Gold is durable, relatively scarce, totally fungible, easily verifiable, easily divisible, and easy to transfer (except perhaps globally)... and the rate at which it is mined is definitely related to the energy cost But whether it has anymore intrinsic value than BCs remains to be seen; I would agree that it has some major disadvantages compared to Crypto.

I can certainly envisage that BCs could be used for large commercial transactions, eg. a crude shipment of perhaps 1MMbbl, with a value of c. $60MM (c. 3760 BCs) which in my understanding takes the same validation effort as a cup of coffee valued at less than 0.0003 BC. Also, there is no real problem if the crude shipment transaction took a while to be validated, since you can't easily run off with a tanker, whereas someone using BCs at the local Tesco's checkout would be unhappy to be detained until their weekly shopping payment had been confirmed.

[compoundup] 11/12/2017 12:58

no dice - You could take a soap box to Venezuela/Zimbabwe/Argentina/Greece, etc. and try to persuade folk that they're jumping from the frying pan (= local fiat) into the fire. I don't think they will see it that way. If you have a scarce commodity that you can use virtually anywhere in the world and that others can't steal from you it's going to develop some intrinsic value. Thus you become incentivised to amass more of it. Bitcoin looks like a perfect hedge against bank bail-ins IMO. Where's the manic behaviour?

[no dice] 11/12/2017 12:14

South Sea stocks are not tulip bulbs, tulips bulbs are not railways, railways are not dot-com stocks, etc. etc. ad nauseum. A mania is a mania is a mania and the words "it's 'different this time" have been uttered for each and every one of them.

[compoundup] 11/12/2017 11:54

Steve73 - re 3378

Analogy to gold mining - energy cost of mining bitcoin - Bitcoin mining was never set up to be analogous to anything; rather the contrary. Bitcoin has useful attributes that gold lacks. The mining energy cost is variable acording to the number of active miners. Fewer miners = easier PoW after a difficulty adjustment.

"The fee charged per transaction must increase". Why? Are you assuming that the transaction volume will not increase with time? I disagree. Suppose in 3 years' time after the next halvening, there are 10x the number of transactions. The fees/reward ratio swings significantly towards transaction fees but the cost base is much wider. Furthermore there are at least 3 versions of Lightning Networks (LN) tested and working on mainnet so far. Relatively trivial size transactions will be taking place on second layer solutions as soon as devs get user friendly interfaces for wallets to handle LN in a frictionless manner. LN fees will be trivial. The confimation time on commitment to the blockchain will be irrelevant as the peer-to-peer contract will have been settled on the LN.

We have systemic problems with miner behaviour at the moment. Too many empty blocks are being mined, causing the mempool to overfill. There is plenty of evidence that this is caused by bad actors to push up transaction fees. I will be interested to see how this gets resolved. It has nothing to do with block size as has already been discussed. If the lazy actors like Localbitcoins and Coinbase applied SegWit to reduce the cost for their customers, the transaction fees and block size debates would be even less relevant in the short term.

My favourite tweet of the week: from @naval - Tulips are not durable, not scarce, not programmable, not fungible, not verifiable, not divisible, and hard to transfer. But tell me more about your analogy...

[random] 11/12/2017 11:39

spad, indeed, it is an obvious arb. The cost of storage is essentially zero ...

everyone seems to be on the same page! cme futures/options is the big boys game. the intent is obvious. cash settled means USD is king.

Prepare for BTC to trade more like the US commodity futures/option norm imho.

Implications?

Future/BTC diff closes.
Options become the largest BTC market.
Big moves near option expiry - manipulation.

And last but not least ...

Margin increases = crash zone.

[no dice] 11/12/2017 10:23

A fairly muted start to futures trading: the 3-month contract has traded between $14.7k and $19.3k, albeit on pretty thin volumes.

[spadman] 11/12/2017 07:53

a $2000 premium on jan futures, isn't the obvious trade to sell x#contacts and buy equal number of real bitcoin?