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JB
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JB
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June 11th, 2017 at 6:55:09 AM permalink
With bitcoin each transaction has a fee associated with it, and how much the fee is is largely left up to the sender. Miners then sort the pending transactions according to their fees, selecting only those with the highest fees to be "approved". Transactions with a fee which is too low will be left in limbo for days. This is ridiculously impractical for real-world everyday transactions.

Imagine going to your local convenience store to buy a coffee for $1 only to be told that you must pay a fee (how much is up to you) before you are allowed to transfer that $1 from your wallet to theirs, and if the fee you selected doesn't meet some secret criteria, then you'll just have to wait and wait and wait... that's how bitcoin works.
Wizard
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Wizard
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June 11th, 2017 at 6:59:04 AM permalink
Quote: JB

With bitcoin each transaction has a fee associated with it, and how much the fee is is largely left up to the sender. Miners then sort the pending transactions according to their fees, selecting only those with the highest fees to be "approved". Transactions with a fee which is too low will be left in limbo for days. This is ridiculously impractical for real-world everyday transactions.

Imagine going to your local convenience store to buy a coffee for $1 only to be told that you must pay a fee (how much is up to you) before you are allowed to transfer that $1 from your wallet to theirs, and if the fee you selected doesn't meet some secret criteria, then you'll just have to wait and wait and wait... that's how bitcoin works.



I have no problem with that element of Bitcoin. The market determines a reasonable fee. If someone offers too low of a fee he will probably learn something and be more generous next time.

Likewise, the barter method would not be efficient at a convenience store but works pretty well at yard sales and buying a house.
It's not whether you win or lose; it's whether or not you had a good bet.
JoelDeze
JoelDeze
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June 11th, 2017 at 8:09:23 AM permalink
Quote: JB

With bitcoin each transaction has a fee associated with it, and how much the fee is is largely left up to the sender. This is ridiculously impractical for real-world everyday transactions.



How much is a foreign exchange fee? How much is the fee for using your card in an ATM? What does PayPal or Western Union charge in fees? What's the fee for a cash advance?

You are discussing decentralized currency. This isnt a fiat currency.

What you should research is inflation.

For example, the Fed attempts to manage inflation through open market operations, discount rates and the reserve. This has never worked to reduce inflation in the long term. It is not precise and highly volatile.

The Fed's policy on fractional reserves only requires banks and lenders to maintain less than 10% of its reserves. So, 90% of the money is made up out of thin air. Everything is backed by digital IOUs.

Any cryptocurrency that is backed by a government can be deflationary until all of its coins are minted.
“Know where to find information and how to use it; that is the secret of success.” – Albert Einstein
JB
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JB
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June 11th, 2017 at 9:25:07 AM permalink
Quote: JoelDeze

How much is a foreign exchange fee? How much is the fee for using your card in an ATM? What does PayPal or Western Union charge in fees? What's the fee for a cash advance?


These fees are all specified up-front, crystal-clear, before you do the transaction. It isn't up to the person withdrawing or exchanging money to guess the fee, and if they guess wrong, all of the money they are trying to transfer gets tied up for days.
CrystalMath
CrystalMath
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June 11th, 2017 at 9:51:35 AM permalink
Quote: JB

These fees are all specified up-front, crystal-clear, before you do the transaction. It isn't up to the person withdrawing or exchanging money to guess the fee, and if they guess wrong, all of the money they are trying to transfer gets tied up for days.



This is why I think Bitcoin will die. It will only be good for transactions over $100, where a $1 fee is acceptable, and even good. But, for how long will $1 buy a fast transaction?
I heart Crystal Math.
prozema
prozema
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June 11th, 2017 at 10:47:54 AM permalink
Currency needs to be 1. A store of value, 2. A unit of measure, and 3. A medium of exchange.

Wild changes in value whether inflationary or deflationary hurt 1 & 2.... Take the dollar, euro, and Yuan for example. Relative to one another they are mostly stable when compared to Bitcoin. Bitcoin on the other hand has seen as much inflation as the Bolivar has seen deflation. Neither is a good thing for a currency unless you are speculating with long or short positions.

I don't know how to validate this assumption, but it sure seems like there are a lot of people buying them to speculate on their future value and not as a medium to exchange goods and services. That's the definition of a bubble. That's a risk to #3.

I don't know if crypto currency is viable in the long run or not... I'm just saying there are challenges it needs to overcome and those challenges are no different than what an other currency faces.
rxwine
rxwine
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June 11th, 2017 at 12:28:01 PM permalink
Quote: prozema

I don't know if crypto currency is viable in the long run or not... I'm just saying there are challenges it needs to overcome and those challenges are no different than what an other currency faces.



Anything other than a suitable trial period among big enough entities would be unacceptable in my opinion.

All the best arguments in the world wouldn't be enough alone for any change on a massive scale.

And I'm not sure what would be a suitable trial period, but some nation states would probably be big enough at least.
If artificial intelligence can tell semi-humorous stories, answer in-depth questions, and write on a chalkboard, why is college still so expensive?
JoelDeze
JoelDeze
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June 12th, 2017 at 2:57:26 AM permalink
People are focusing too much on Bitcoin. As I said in the past, my focus is on Ethereum, which has a lot more advantages in the Enterprise world.

In one week it has gone from $246 to $397 and it's market cap is now over $36 billion and climbing. Its market cap is closing on Bitcoins.

I explained why Ethereum is on the rise. Anyone that heard what I said and researched it, hopefully jumped in.
“Know where to find information and how to use it; that is the secret of success.” – Albert Einstein
Skeptic
Skeptic
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June 12th, 2017 at 6:04:51 AM permalink
The biggest problem with cryptocurrencies is that there can be an unlimited number of them.
JoelDeze
JoelDeze
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June 12th, 2017 at 6:37:41 AM permalink
Quote: Skeptic

The biggest problem with cryptocurrencies is that there can be an unlimited number of them.



Maybe it's simpler not to call them cryptocurrencies but instead call them blockchain technologies. Not all "cryptocurrencies" are designed to be currencies. I've already touched on Ethereum but it is not a true cryptocurrency like bitcoin. Do the research and you'll understand why.

GOLEM (GNT)

Designed to pool and resource computing power to create a global super computer. The people that utilize its blockchain can save on up to 10% of what it would normally cost to do high end computations. This is a huge benefit for research startups or any type of company that needs to focus on computational analytics.

Do you consider any of the publicly listed companies on NASDAQ as just "stocks"? Oh no, there can be an unlimited number of stocks! Each company listed has their own niche. Blockchain developers also have their own niche and many of them are unique in what they do and what they are trying to accomplish.
“Know where to find information and how to use it; that is the secret of success.” – Albert Einstein

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