What’s more, miners can offer something unique: brand-new,
“virgin” coins, which some investors covet. Such coins
command a premium of up to 20 percent, according to
Travis Kling, founder of the hedge fund Ikigai. It’s
easier to prove they’ve not been involved in money-
laundering operations, he said
Ironic, because that's actually the defacto method for laundering money in Bitcoin land
See this bitcoin laundering method described in this post from a moderator on BitcoinTalk dated August 22, 2013, 02:32:31 AM [ https://bitcointalk.org/index.php?topic=279249.0 ] Payment to miners / mining pool operators for their freshly minted "clean" "virgin" coins in exchange for a 20% markup.. why would anyone want to immediately lose 20% of their investment?...
Do you have a source? Sounds like you just made that up.
Investors, especially large institutions will have teams of lawyers who would would have paperwork from the party they purchase from vetting the purchase. Their insurance is the law and an ability to hold the seller responsible for loss in any case where that risk might exist.
No one pays 20% markup on a car, or gold, or a diamond ring under normal circumstances.
Washing illicit money though paying miners for their new Bitcoins is an established method for money laundering.
>>why would anyone want to immediately lose 20% of their investment?...
They are not buying Bitcoin to gain x% a year. That's what Dow Jones or AT&T stock are about. They are buying bitcoin hoping it goes to $100K a coin, and having a coin that has been used to buy/sell drugs or women...well you get it. Feds can take it or no one refuses to buy it.
It's worth noting that I've no connection to them nor any conflict of interest, just thought it was topical. Didn't have time to make a disclaimer in my original post.
"$14B" on paper - but the real value of what could be extracted from market sells would be immensely less.
Those numbers are based on the market spot price, and not the order book support from real world buyers. Cryptocoin exchanges are mostly bots and the order books are mostly loaded with spoofed bids that are pulled away once real buyers and sellers start pushing one way or the other, hence the volatility.
It's been a solved problem in private tracker communities - where users leach bandwidth is on a credit system and they need to maintain a ratio of upload/download to keep their access.
What TRON is trying to do is sell tokens to users to be able to access bandwidth. Where do these tokens come from to begin with? TRON just whips them up for free.
If I remember right, a famous Bittorrent group based out of the UK called Oink was shut down because they took donations for running the site. One can imagine the same fate would await TRON once the tokens are found facilitating pirated MPAA and copyright IP works.
I’d posit that such a setup will lead to users with low speed connection or connections which aren’t online constantly to be banned or required to buy a pardon from the site when not fulfilling the seeding requirement (as every site policy I’ve seen required maintaining a ratio over time).
This happens because users with high speed connections are incentivized to seed well beyond 1:1 and thus there is rarely any demand for seeding. Downloading is super fast which just exasperates the problem as your share ratio drops below the acceptable rate quickly.
Thus such sites tend to make their money off the people who can likely afford it the least, while rewarding people with the disposable income required to live in a neighborhood with unlimited high speed internet and pay for said service.
There’s also the matter of keeping content alive to consider. I’d consider it much more valuable to keep content with no or relatively few seeders alive than incentivizing seeders to add additional bandwidth to already popular torrents. I has not seen an site policy which encourages this, rather it likely punishes such activities as it bans users who are trying to reach a required share ratio without constant demand thus taking the content offline rather than keeping it available.
Whether or not Project Atlas will enable incentives for all users and multiple scenarios or if it will simply perpetuate a similar system to what is seen in the private torrenting communities remains to be seen.
Do the seeders generate the coins specific to each torrent, or is this some sort of scam where coins are made by TRON and users now have to pay for what's already free..?
> Users can earn tokens for continuing to seed files after a download is complete
> Users who participate will exchange tokens with each other on the basis of resources provided, not mining
Seems like you get paid when you seed, and you can use what you earned to download other stuff. How's the initial money generated? No idea. Maybe you've to buy the tokens for real $$$ or bitcoins or something. Or maybe you can choose to host a file and gather tokens.
>A whole world currency that is potentially immune to
inflation and government manipulation.
But completely exposed to private manipulation - malicious coders inserting backdoors into wallets which allow theft of users funds, weak private keys that are later regenerated by the dev, and so on.
Or manipulation from exchanges which generate counterfeit accounts and fake volume in order to steal BTC from the market before they exit scam like most of the exchanges in the past have.
What do you think about Tether and "stable coins" being generated by the billions for free (and then those operators using the counterfit stablecoins to steal BTC/XMR/ETH)?
The common theory is that Bitfinex, Tether, and most of the Cryptocurrency exchanges are operating as fractional reserve banks - and creating more cryptocoins for free, meanwhile "buying" Bitcoin, Monereo, Ethereum, and so on for free because they operate in the dark.
If this is true, it's worse than real central banking, and it's quiet possible Bitfinex and other exchanges have stolen the vast majority of BTC in circulation.
Protections for Customer Funds Are Often Limited or
Illusory. Generally accepted methods for auditing
virtual assets do not exist, and trading platforms lack
a consistent and transparent approach to independently
auditing the virtual currency purportedly in their
possession; several do not claim to do any independent
auditing of their virtual currency holdings at all. That
makes it difficult or impossible to confirm whether
platforms are responsibly holding their customers’
virtual assets as claimed.
Bitcoin's inflation rate is higher than the USD though?
Bitcoin inflation rate per annum: 3.87%
USD Current inflation rate for the United States is
2.7%.
Early in Bitcoin history, by design Bitcoin went though a period of hyperinflation where Satoshi and a few users acquired most of the coins in circulation.
Aprox 4.11% of Bitcoin users (addresses) control 96.53% of all bitcoins in circulation.
Also there's a chance that something will make Bitcoin obsolete in the near future - immediately destroying the trade value of Bitcoin, either a new cryptocurrency, a quantum computer or cryptographic breakthrough that would allow theft of BTC private keys or more predictably a bug like what recently happened in the main Bitcoin core wallet client software which allowed a user to inflate the supply of Bitcoins past 21 million and mint more BTC for free.
So if you were truly concerned about long term stability - gold or tangible functional assets would be much safer than software based pet rocks.
The obvious worst part of this bug was the inflation
exploit. An attack could create new bitcoins at will,
exceeding the 21 million hard cap limit that is
currently in place. This would absolutely destroy
confidence in not only Bitcoin, but every
cryptocurrency.
In addition, a miner could crash every single node they
are connected to by producing a block with an invalid
transaction in it. Miners are will go out of their way
to connect to as many other mining nodes as possible, so
they receive notifications of blocks faster.
Imagine you’re a miner, hashing away at block #1000.
Another miner, Jim, finds block #1001 and starts
propagating it around the network. However, you’re not
connected to Jim, so it takes an extra few seconds for
you to receive the block. During those few seconds, the
network has moved on and you’re wasting hashpower and in
turn money. You need to receive the new block before you
get started on the next one.
All the miners are highly connected, so if one is
producing client-crashing blocks, many of the larger
miners would be hit.
Quite a concerning catastrophe that has no guarantee of being avoided in the future, as any programer knows how many bugs can hide or be exploited in any code base.
Yes, if you measure inflation by the increase in the amount of money in existence, the first block mined represented an infinite amount of inflation, the second block mined created 100% inflation over 10 minutes, the third block created 50% inflation, and so on. But, if the system functions as designed, this rate asymptotes to zero fairly quickly. You are of course correct that the system may not function as designed.
However, it is more common to measure inflation by the increase in nominal prices of goods, as I did above with gold. And, by this measure, Bitcoin is deflating. It's hard to measure the deflation rate with precision because it's so volatile, but at the beginning of 2011, it was worth 10¢, and now it's US$6600. It's oscillated wildly around the exponential trend line by about a factor of 3 on each side, but the trend line itself is a deflation by about 75% per year (or of 300% per year, if you look at deflation that way.)
Presumably this won't continue forever, as it's more appropriate to tulip bulbs than to a usable currency, but it is certainly quite far from inflation in the usual sense.
The vast majority of the supply is owned by a very small oligarch.
The chances of Bitcoin becoming obsolete or failing catastrphically due to a glitch or bug in the protocol software - like what just happened a few days ago (luckily by someone who desired to fix it, if the bug was found by a malicious actor they would have destroyed the entire Bitcoin ecosystem), the cryptocoin software can not be guaranteed as a safe store of value.
Anyone who "invested" in Bitcoin at the start of this year has lost upwards of 50%, so that would qualify as inflation in your terms. Other cryptocoins have seen losses exceeding 80%-90%.
The way cryptocoins work is by early users dumping their supply onto new users to exit and extract real value from the suckers who then become bag holders, the new users hope to do the same but are at a severe disadvantage to early users who own the vast majority of the supply.
Other than a non functioning economy where wealthy oligarchs control everything simply for showing up a few years early and taking control of the money supply because they already had surplus capital to either mine or purchase the easily produced Bitcoins in 2009-2016..
Bitcoin has a higher inflation rate than USD.
Bitcoin inflation rate per annum: 3.87%
USD Current inflation rate for the United States is 2.7%.
Early in Bitcoin history, by design Bitcoin went though a period of hyperinflation where Satoshi and a few users acquired most of the coins in circulation.
Aprox 4.11% of Bitcoin users (addresses) control 96.53% of all bitcoins in circulation.
See this bitcoin laundering method described in this post from a moderator on BitcoinTalk dated August 22, 2013, 02:32:31 AM [ https://bitcointalk.org/index.php?topic=279249.0 ] Payment to miners / mining pool operators for their freshly minted "clean" "virgin" coins in exchange for a 20% markup.. why would anyone want to immediately lose 20% of their investment?...