When the brown matter will hit the fan ?



  • coindesk
    nov 4, 2016: 1 bitcoin == u$s 702
    nov 2, 2017: 1 bitcoin == u$s 7154

    nytimes

    Entrepreneurs have been issuing the digital currencies through so-called initial coin offerings, or I.C.O.s, which have become a hot but largely unregulated method of fund-raising for technology projects.

    So far this year, some 270 projects have raised over $3 billion by selling new currencies to investors.

    bloomberg

    One of the Biggest Bitcoin Exchanges Just Added 100,000 Users in a Single Day

    express

    On the news that CME will introduce futures, Bitcoin has soared this week to new highs.

    CME, the world’s largest futures exchange, has announced plans to launch bitcoin futures in the fourth quarter pending regulatory review.

    Charles Hayter, CEO of cryptocurrency comparison website Crypto Compare, told CNBC: "This is bitcoin crossing the divide from the wild west of finance to the mainstream"

    "Futures from an incumbent exchange bring bitcoin and cryptocurrencies into the regulatory fold. This allows more complex financial products to be created and will eventually open the doors to institutional money."


  • Impossible Mission Players - A

    This bubble's made of titanium! Can't be burst!


  • kills Dumbledore

    Sure, all the other bubbles burst but I have something they didn't. A good feeling about this



  • I remember someone mentioning that at some point, but can you actually sell bitcoins? Or are all the people who buy into that buying something that they will never be able to sell back to convert to real money?

    (not that it will matter when the bitcoin you bought for several thousands dollars will be worth less than 1...)


  • Discourse touched me in a no-no place

    @remi said in When the brown matter will hit the fan ?:

    can you actually sell bitcoins?

    If you can find someone willing to give you money for them, yes. It's supposed to be equivalent to buying and selling any other currency (and I don't want anything to do with the whole thing; currency speculation is where the real sharks of the financial world circle as it is precisely a zero sum game).



  • @dkf Yeah I mean in theory, what you said is obviously true. But my question was more along the lines of, did anyone ever really actually managed to do so?

    I vaguely remember another discussion where someone was saying that this was practically almost impossible, unless you accepted to deal with shady sites which might or might not be entirely illegal...

    A better way to ask it would be, has anyone any experience of someone selling back bitcoins and getting real money in exchange?



  • @remi said in When the brown matter will hit the fan ?:

    @dkf Yeah I mean in theory, what you said is obviously true. But my question was more along the lines of, did anyone ever really actually managed to do so?

    I vaguely remember another discussion where someone was saying that this was practically almost impossible, unless you accepted to deal with shady sites which might or might not be entirely illegal...

    A better way to ask it would be, has anyone any experience of someone selling back bitcoins and getting real money in exchange?

    I'd love to know too. I looked into it earlier in the year to see if I might be able to milk the bubble for a month and concluded that the options were to sell to someone for cash via various hookup services (no-one even vaguely local), or to sell to an Exchange.
    But the Exchanges seemed to just give you a virtual balance in USD without anyway to actually get that into a real bank. You could only buy more bitcoin with it or do various things with 'partners'.


  • kills Dumbledore

    Sounds like a gap in the market. The first BTC exchange where you can actually cash out



  • There are things like localbitcoin where you can buy and sell bitcoin for cash with people in your area. But you're probably not going to cash out your millions from that old hard drive from 2010 with a 27000 BTC balance that way.



  • @hungrier if all else fails, you could probably just buy a lifetime supply of weed.
    And become a drug dealer to convert it into cash.



  • @anotherusername said in When the brown matter will hit the fan ?:

    @hungrier if all else fails, you could probably just buy a lifetime supply of weed.
    And become a drug dealer to convert it into cash.

    That's the slightly odd thing, if people were paying for their illegal goods on the darkweb with BTC how were the sellers getting it back into real money.

    Some sort of perpetual-motion-drugs-machine where they then resold the BTC in person to more buyers?

    Edit: I swear that <small.> wasn't there. Yeah, just like that :)



  • @cursorkeys does it really make sense, though, for them to use bitcoins they get for selling weed on the dark web to buy more weed to sell IRL for real money?

    I mean, I guess there are some legitimate goods that you can use bitcoin to purchase...

    Still begs the question of whether someone somewhere is eventually converting those bitcoin to cash, and how...



  • @anotherusername said in When the brown matter will hit the fan ?:

    I mean, I guess there are some legitimate goods

    There's some gray-area ones that do. I've got some fraction of a bitcoin that has been gaining value and keeping me subscribed to premium Usenet indexing essentially for free.



  • @remi said in When the brown matter will hit the fan ?:

    But my question was more along the lines of, did anyone ever really actually managed to do so?



  • @boomzilla :confetti_ball: :clap: Good find! Did you know about it before? I'd never heard of that.

    Doesn't seem widespread and seems borderline extortionate (16% fees... wow), but seems to definitively be a real thing. Anyone ever seen one in real life?



  • @remi I'm sure I remember that several years ago there were a number of exchanges where one could buy/sell Bitcoins for cash, but for some reason it started taking a really, really long time to get the cash, and eventually the biggest (somewhere in the far east — Taiwan? Hong Kong?) one shut down and, I think, stiffed everyone who had not been paid. But I can't find anything about it in a few minutes of googling; the results are polluted by all the recent news.


  • kills Dumbledore

    @hardwaregeek Mt. Gox?

    When the biggest exchange is Magic The Gathering Online Exchange, you know it's a cowboy outfit



  • @jaloopa Yeah, I think that's the one. I couldn't remember the name to give Google something more specific to search for. And I'd completely forgotten that it started as an exchange for something completely unlike currency.



  • @remi said in When the brown matter will hit the fan ?:

    Doesn't seem widespread and seems borderline extortionate (16% fees... wow),

    Well, I have no idea what the going rate for money laundering is, but I suspect this would be a bargain.



  • @cabrito I dunno, but I own about $45 of bitcoin at that 2016 price.

    The problem is I still don't know how to convert FROM bitcoin TO dollars. Especially enmasse. (I mean you can buy shit on NewEgg to convert them into physical goods.)

    I also apparently own some Etherium, or at least set up a wallet for it. Not sure if I ever put anything in that wallet.



  • @remi said in When the brown matter will hit the fan ?:

    Yeah I mean in theory, what you said is obviously true. But my question was more along the lines of, did anyone ever really actually managed to do so?

    Yeah same issue I have with it.

    I will say there are now reputable retailers who will take Bitcoins as payment. So they are a lot more useful now than they were a couple years ago.

    @cursorkeys said in When the brown matter will hit the fan ?:

    But the Exchanges seemed to just give you a virtual balance in USD without anyway to actually get that into a real bank. You could only buy more bitcoin with it or do various things with 'partners'.

    Yup, that's what I found when I explored this all back in like 2013, and more recently in 2016.

    @jaloopa said in When the brown matter will hit the fan ?:

    Sounds like a gap in the market. The first BTC exchange where you can actually cash out

    Nobody wants to be the first one to deal with the IRS and establish what actually happens when bitcoin is converted into dollars.



  • @boomzilla said in When the brown matter will hit the fan ?:

    Well, I have no idea what the going rate for money laundering is, but I suspect this would be a bargain.

    You'd take a much bigger hit than that if you laundered by for example buying monitors off Rakuten or whatever and then reselling on ebay. Lot less labor cost too.


  • Grade A Premium Asshole

    @remi There's at one in a mall in my hometown. I've never seen anyone use it.



  • @remi said in When the brown matter will hit the fan ?:

    but can you actually sell bitcoins

    Anyone who buys is buying from someone else.

    @remi said in When the brown matter will hit the fan ?:

    I vaguely remember another discussion where someone was saying that this was practically almost impossible, unless you accepted to deal with shady sites which might or might not be entirely illegal...

    The big exchanges are very legally regulated (you have to prove your identity) and move millions a day.

    It was a "wild west" for years, but it's not the case anymore.



  • @anonymous234 said in When the brown matter will hit the fan ?:

    The big exchanges are very legally regulated (you have to prove your identity) and move millions a day.

    Just last year I set up an account at I think 3 of them (Kraken, CoinBase and... maybe just those two). None of them allowed you to convert Bitcoins into US Dollars.



  • @blakeyrat Look, I don't know how you're doing it but it's this one:

    0_1509745485026_a1d871a4-ad5a-4173-a731-97a07c5da1f1-image.png

    Granted mine is in EUR but you should have a "USD Wallet"



  • @anonymous234 Well duh but once it's in "USD Wallet" how do I get GREEN CASH in my PHYSICAL wallet?



  • @blakeyrat You go to Settings -> Payment Methods -> Add Payment method and link a bank account, PayPal account or "Wire Withdrawal Information" which is different from a bank account somehow.

    Then you go to Accounts -> USD Wallet -> Withdraw.

    I'm just quoting from the support article here.



  • @anonymous234 I wager there's a 95% chance when I did that I'd be met with a dialog that reads something like "currently US Dollars can not be withdrawn from accounts."

    But I'm too lazy to try.

    So eh.



  • I heard someone said in a few years ago "Due to the non-centralized nature, all you need is overwhelming number of zombie machines (i.e.: those infected by Trojans), more than number of people using Bitcoins, to interfere the Bitcoin network on which transaction is true or not, and you can make the current Bitcoin holder's Bitcoin fake, and the fake Bitcoin hold by your zombie machines real".

    Is that still true?


  • Impossible Mission Players - A

    @cheong said in When the brown matter will hit the fan ?:

    Is that still true?

    That doesn't sound like it could ever be true if the system was programmed correctly, but then humans....



  • @tsaukpaetra said in When the brown matter will hit the fan ?:

    @cheong said in When the brown matter will hit the fan ?:

    Is that still true?

    That doesn't sound like it could ever be true if the system was programmed correctly, but then humans....

    No, this was the way bitcoin was explained to me a few years ago as well. Something like when you make a transaction, you do all the signing stuff, and then send it out to everybody. At which point it will somehow enter the distributed history of bitcoin (that's apparently what the transaction fees are for -- to make sure others process your transaction?). But if enough others are like "nah, that totally didn't happen", then well ... shit.

    (Disclaimer: Based of an informal explanation quite some time ago.)



  • @cvi said in When the brown matter will hit the fan ?:

    But if enough others are like "nah, that totally didn't happen", then well ... shit.

    Yup, That's what I talked about.

    At least a few years ago, Bitcoin transactions need to be verified backward to confirm it's origin. Now if enough "fake client" jam in and say the transactions are invalid, and then a "more than real client" number of "fake client" exists and confirmed transactions among themselves, would they be about to convince the prime number Bitcoin token for the "fake chain" is the real one and the "real chain" is fake?



  • @cheong The whole idea behind "mining" is to avoid that.

    The software trusts whatever block has a bigger proof-of-work, which is literally a proof that someone has hashed a number X times. In other words, to hijack the bitcoin network, you'd need a bigger hashing power than everyone else. Given the size of mining today, it'd take a serious amount of money to do that.

    It's a way to bring real world resource scarcity into the digital space where everything (including identities) can be duplicated.



  • @blakeyrat said in When the brown matter will hit the fan ?:

    @anonymous234 I wager there's a 95% chance when I did that I'd be met with a dialog that reads something like "currently US Dollars can not be withdrawn from accounts."

    From what I've heard (here and there), that would not surprise me at all. Almost all discussions of withdrawing real money go like the one here "there is an option on the website but no-one ever tried it". I'm almost tempted to buy like $10 worth of Bitcoin just to try and convert it back to real money, but I'm pretty sure fixed fees along the line would inflate that amount by a lot, and I'm not too keen on giving real financial information to unknown operators on the other side of the world...



  • @anonymous234 said in When the brown matter will hit the fan ?:

    The software trusts whatever block has a bigger proof-of-work, which is literally a proof that someone has hashed a number X times. In other words, to hijack the bitcoin network, you'd need a bigger hashing power than everyone else. Given the size of mining today, it'd take a serious amount of money to do that

    That's roughly correct, and not as small an issue as you'd think given that a lot of mining is centralized in pools. There was a point in time, somewhere around the last Bitcoin hype, where one of the mining pools was either very near to, or surpassing the 50 percent barrier.


  • area_pol

    @maciejasjmj said in When the brown matter will hit the fan ?:

    There was a point in time, somewhere around the last Bitcoin hype, where one of the mining pools was either very near to, or surpassing the 50 percent barrier.

    Although I guess the miners are strongly disincentivised from cheating even if they have over 50% power:
    The value of bitcoin is that people believe it is a good investment and want to buy it.
    If cheating is discovered, bitcoin will not be trusted and all that mining would become worthless.


  • Discourse touched me in a no-no place

    @cheong said in When the brown matter will hit the fan ?:

    Is that still true?

    With the major miners using rather specialised hardware that is incredibly faster than standard computers at this one task, the scale of zombie takeovers required to take over the market is such that it would definitely be noticed from the power draw required if nothing else. Mining these days isn't a hobbyist thing any more; if you're not planning your shipments of mining hardware direct from a manufacturer, you're nowhere. (The total power consumption with these ultra-fast and efficient systems used by the pro miners is more than the total power used by Ecuador, apparently. That's a hell of a lot of electricity.)



  • @dkf A coworker of mine was mining earlier this year. Not sure if he's still doing it, or maybe he's about to resume. I believe he figured that it wasn't worth it in the summer due to increased cooling costs but he was clearing ~$500/month profit last winter / spring.


  • area_pol

    Another hilarious display of incompetence from the Ethereum client, Parity.
    Not long ago, it was possible to take ownership of wallets by calling a public function which should have been private.
    Now they have another function that can be called inappropriately, this time it it deletes their code from the chain, makes all wallets using the code useless.
    What wrongly-exposed function will they have next month?

    Following the fix for the original multi-sig issue that had been exploited on 19th of July (function visibility), a new version of the Parity Wallet library contract was deployed on 20th of July. However that code still contained another issue - it was possible to turn the Parity Wallet library contract into a regular multi-sig wallet and become an owner of it by calling the initWallet function. It would seem that issue was triggered accidentally 6th Nov 2017 02:33:47 PM +UTC and subsequently a user suicided the library-turned-into-wallet, wiping out the library code which in turn rendered all multi-sig contracts unusable since their logic (any state-modifying function) was inside the library.
    This means that currently no funds can be moved out of the multi-sig wallets.

    Someone on HN explains what that means:

    So here's what happened: Parity used to have a normal multisig wallet, where every user deploys their own contract and each one is a full copy of the code.

    They decided it'd be nice if people could have a lower transaction fee when they deployed a new wallet. So they made one master contract that has all the code. Now when you deploy a new wallet, what you actually deploy is a stub that forwards function calls to the master contract, using a "delegatecall" which lets the master execute its functions in the context of the stub contract.

    However, they didn't think through how they might want to change the master contract code in this new situation. In particular, they didn't remove the selfdestruct function. Self destruct is perfectly sensible when it's your own contract that you're not using anymore, but it's not so great when it's shared code used by lots of people.

    They also forgot to initialize a function setting contract ownership. Someone came along and made themselves the owner, then called the selfdestruct. They posted about it on github, apparently unaware of the full impact of what they'd just done, which was to destroy the code used by all the stub contracts deployed since July 20. Now those stubs no longer have access to functions for withdrawing the ETH they contain.

    This master/stub design was also the root cause of Parity's previous multisig hack. Apparently they didn't get a clue and pay for a fresh round of external audits, which I think would have easily caught this problem. In fact, at the end of a post-mortem of the previous hack, published on July 20, they complained that they lacked funds for such things:

    For added irony, bold claims at parity.io:

    0_1510083856200_b84bbde6-db83-41d6-ad17-2e6d02f5c61d-image.png
    If this is the most secure way, what are the other ways?

    0_1510083832700_ba1c563f-1154-436f-9fbd-37c53713dbf3-image.png



  • @adynathos said in When the brown matter will hit the fan ?:

    If cheating is discovered, bitcoin will not be trusted and all that mining would become worthless.

    That's when you cash in on your short sales :trolleybus:

    Or if you're a government of a freedom-hating country, then you call it "mission accomplished".


  • SockDev

    @maciejasjmj said in When the brown matter will hit the fan ?:

    Or if you're a government of a freedom-hating country, then you call it "mission accomplished".

    so...... you think it'll be the US that does it?



  • @adynathos well, I mean, it is pretty dang secure... nobody can withdraw funds from those wallets!


  • SockDev

    @anotherusername said in When the brown matter will hit the fan ?:

    @adynathos well, I mean, it is pretty dang secure... nobody can withdraw funds from those wallets!

    If funds can be observed but cannot be used...... are they still funds?


  • Impossible Mission - B

    @adynathos Seems to me they've misspelled their own name. The correct spelling of the word they've been using, it would seem, is parody.



  • @accalia said in When the brown matter will hit the fan ?:

    @anotherusername said in When the brown matter will hit the fan ?:

    @adynathos well, I mean, it is pretty dang secure... nobody can withdraw funds from those wallets!

    If funds can be observed but cannot be used...... are they still funds?

    Depends on the current state of sound in the woods when trees fall with no one around.



  • All this talk of bitcoin makes me want to buy some cryptocurrencies. I missed the Bitcoin bandwagon multiple times, and I keep thinking that I should hop on now, and maybe finally get some money out of it. I could even save myself some risk by picking up a cryptocurrency mutual fund, right?

    And then I see that any of the cryptocurrency mutual funds have 5% transaction costs. On both buying and selling. Better than the BTC ATM, but not by much.


  • Discourse touched me in a no-no place

    @potatoengineer said in When the brown matter will hit the fan ?:

    I see that any of the cryptocurrency mutual funds have 5% transaction costs.

    Well, they did used to say that the way to get rich off a gold rush was to sell prospecting equipment…



  • @adynathos said in When the brown matter will hit the fan ?:

    Now when you deploy a new wallet, what you actually deploy is a stub that forwards function calls to the master contract, using a "delegatecall" which lets the master execute its functions in the context of the stub contract.

    I swear, whenever I read about Ethereum, it looks like something that would be a cool idea for a game but I think I'd rather just burn some cash than buy actual Ethereum because at least that would be kind of interesting to watch my money go away.


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