How to Explain Bitcoin: 3 Tips to Have Better Bitcoin Conversations
BTC Friends, Let’s be honest, Bitcoin is confusing. Not to you (you are on this / after all), but to the people who have no idea what it is. Trying to explain Bitcoin is even harder. I’m sure we’ve all had those long, complicated, drawn-out conversations which leave people more confused than when it started. To aid its adoption WE HAVE TO GET BETTER AT EXPLAINING WHAT BITCOIN IS. Here are a few tips that should, hopefully, help you manage a simple and easy to understand discussion about Bitcoin. Before we get to that, a few things to remember: Bitcoin is afundamentalchange from what most people believe. An explanation about Bitcoin shouldn’t be about “being right” or “winning the argument.” Instead, it should be about helping someone explore a new idea and begin to understand that there are actually different alternatives to the only “money” they’ve ever known. Bitcoin is complicated. It’s important to remember that this is as much of an emotion transformation for someone as it is a logical one. A CONFUSED MIND ALWAYS SAYS NO. If you leave a person confused or frustrated about what Bitcoin is, they are more likely to build up a resistance to it and become close-minded because “it’s just too complicated.” Adoption is a marathon, not a sprint. Don’t feel the need to word vomit all of your intense 1337 cypto-knowledge in a single conversation. Slow and steady. Like a good story-teller, keep them wanting more. Now, some tips to consider: 1. Start with ‘WHAT is Bitcoin?,’ not ‘WHY is Bitcoin?’ A fundamental mistake that people make is to try to justify WHY something exists before even explaining WHAT something is. Your explanations need to act as a building blocks of knowledge which means you have to have a very clear, very easily understood, fundamental premise: Bitcoin is…: Digital coins that exist on the internet that you can spend and save just like the paper money in your wallet. An alternative form of money than what you are given by your local government. That's it. That's Bitcoin. While I’m sure we can, and probably will, argue about what that base, fundamental definition is, it’s important to start with WHAT, not WHY. While hyperinflation, store of value, scarcity, the Federal Reserve, and how the printing of fiat devalues currency are all important, it does not answer the question of WHAT is Bitcoin. If you start with WHY, you are skipping a major building block in the mind of the listener and are on your way to creating confusion. And remember, a confused mind always says no! Here is an example. (Now, don’t go full-internet on me. I’m not degrading this person or this video THANK YOU PERSON FOR MAKING THIS VIDEO. This video is awesome! I only bring it up because it is a recent video that got some attention. It also demonstrates this point.) When asked to explain Bitcoin, here is the opening line: “The FED…is out of control with printing money…” This is a ‘WHY is Bitcoin’ response. Already, the listener is probably thinking, ‘what the heck does the FED have to do with anything? I just wanted to know what Bitcoin was…’ and you may just lose your listener right there. Furthermore, this video never actually says “Bitcoin IS…” While there is an implied comparison to gold, there is never a fundamental definition of WHAT Bitcoin is. Start with a clear, concise definition of WHAT Bitcoin is before moving on to WHY Bitcoin is. 2. Let Them Lead / Gauge Their Interest / Know When To Stop When explaining any topic to someone who doesn’t understand it, there is a very strong temptation to TELL everything you know. This is human nature. We are proud of what we know. We want to display knowledge and proficiency. We must, however, understand that it is counter-productive to the learning process. Imagine that certain math teacher going over that certain math problem. They explain it. They are enthusiastic about it. They write it on the chalkboard. Yet your eyes glaze over. It’s too much too fast. You are just waiting until the end when they finally tell you the answer. All logic and reasoning and understanding is gone. This is similar. Instead of telling them everything you know, LET THEM ASK! Allowing your listener to ASK demonstrates two things: an understanding of the last thing you said and, more importantly, interest! Ultimately, that’s what we want and need; their interest. Believe me, just like that little kid asking, ‘why, why, why…?’ They will give you every opportunity to share a little bit more, and a little bit more. For example: Bitcoiner – “Bitcoin are digital coins that exist on the internet that you can spend and save just like the paper money in your wallet.” (STOP TALKING AND LEAVE SPACE FOR THEM TO ASK!!!) Noob – “Oh…ok…well…why do we need that? What's wrong with the money I have now?” Bitcoiner – “Well, there is a risk that, over time, the money that you keep in your wallet or bank account will actually be worth less and be able to buy less stuff.” (STOP TALKING AND LEAVE SPACE FOR THEM TO ASK!!!) Noob – “Wait, what do you mean?” And we are now on our way to a discussion about these messy and intense concepts of inflation vs deflation, printing of fiat currency, fractional reserve lending, etc. And through it all, LET THEM LEAD. Now this is the tough part. If their eyes glaze over, YOU HAVE TO STOP! When the questions stop, YOU HAVE TO STOP! The last thing you want to do is ramble on once they’ve stopped listening. Instead, ASK them a question: “I’m sorry, did you not understand something I said?” “Did I answer your question?” “Is this interesting to you?” By doing this, you will give them an opportunity to ASK you another question: “…back up…what did you mean when you said ‘store of value’?” Or maybe even make a comment: “…wow…this stuff is pretty complicated…” In either case, this actually helps keep the conversation going. Just back up, explain it again, keeping in mind your base concepts and definitions, and see if you can talk them past where they got stuck. Maybe they shut you down entirely: “you know what, this is crazy, it can’t be true, let’s change the subject…” To which the ONLY correct response is, “Ok!” (we’ll get to this later). Keep in mind that letting your listener lead will allow you to carry the conversation much further than you trying to push it along on your own. 3. Know Your Role / A Little at a Time / Don’t Overcorrect So, what’s the end goal? Is it to have them whip out their phone, download an exchange, and make their first Bitcoin purchase right then and there?! No, of course not. The role of these conversations is to LEAVE THEM WANTING MORE. Your goal should be to spark interest and curiosity. If after talking with you they end up on The Google or The YouTube looking for more information, then you’ve done your part! Movies and TV condition us to want the big payoff at the end: the parade, the teary embrace, the triumphant symphony. That is not real life. Really, the best ending to a Bitcoin conversation might just be your listener making an audible, but clearly deeply contemplative, “…huh…”. You’ve done your job. You’ve got them noodling something they have never noodled before. Even once you understand Bitcoin, there is still an entirely different conversation about what the technology is, how it works, and how people interact with it. And let’s be honest, it’s complex and confusing. Exchanges, blockchain, forks, difficulty adjustments, miners, cold storage… More complicated ideas. More jargon. Make sure you throttle yourself back and explain just A LITTLE AT A TIME. It’s ok to have one conversation about the fundamentals of Bitcoin and then an entirely different conversation about blockchain technology or how people acquire BTC or the difference between storing Bitcoin on an exchange versus a cold wallet. Don’t fall into the trap of thinking you have to tackle all of this at once. While all this is happening, BE CAREFUL NOT TO OVERCORRECT. People know what they know, right? And what people know is always correct, right?? Be sensitive. If your listener makes a comment that isn’t true or is off track, don’t scold them or forcefully correct them. If your listener feels attacked or threatened, conflict will arise, and once that happens, their minds will be completely shut off. No one listens during an argument. Don’t attack. Explain. For example: Noob – “Well, the USD is backed by gold, so that will prevent it from ever devaluing!” Bitcoiner – “You know, it’s pretty interesting, a lot of people think the same thing. The truth is that while the USD was backed by gold for a long period of time, it isn’t anymore. You see, back in 1971…” Keep it simple, factual, and non-confrontational. Going back to our example from before, even if your listener shuts you down entirely, THAT’S OK! They have now experienced a Bitcoin conversation that will percolate around in their brain. And perhaps next time they hear the word Bitcoin, whether on the news or on the internet, they’ll think back to your conversation and what you shared with them. Hopefully you didn’t over-press and their memory of your conversation isn't a negative one which leaves them feeling negative about Bitcoin: “Bitcoin is stupid and people who believe in Bitcoin are arrogant and rude.” Finally, ENCOURAGE THEM TO DO THEIR OWN RESEARCH. The journey doesn’t start and end with you. You are simply a stepping stone along their path. Know that you are playing a part in their story; you are not the main character. Adoption of Bitcoin will occur over a long period of time. The conversations we have with our friends and family will create the buzz, attention, and understanding that is needed, but please be mindful that you are doing it in a helpful and productive way that leaves people wanting to know more. Oh, and step 4: Stack Sats and HODL!
Because cold wallets, such as those stored offline in a text file as I keep recommending in my standard advice below: All you need is a text file to put your wallets in, like this example from https://walletgenerator.net/?currency=Dogecoin 1,"D7WBUpdgLRtG6WyPsqjhaKiJR65X8ZGnkZ","6KieLMW1poAzNVnmLuQZqA262gxEQ51eLGdDK8e2GL2B4LHCKKb"2,"DM8LT16d49zHr8ByXbUwZb9UBXDGMaZRdc","6Ktgxdv6vN9v2bDHwcJBBb3oMRAgXJumESzBnxaXUSGFZoq6pWQ"3,"D5UCa51AfxjtVHQ46oYXe2YfkctTeLXPhx","6L2WSPWadRYCwt2L1CxH6zC7PoTYY3KyjxdiUoCqi5eyq6hQKvj" Use https://coinb.in/#settings to move coins. Download both sites and run them offline. Use https://bitinfocharts.com/dogecoin/ to check balances and transactions. See http://www.mocacinno.com/blog/create-sign-broadcast-transactions-using-coinb/ for coinb.in tutorial. And read the ELI5s (and my history) for more info. Are without doubt THE SAFEST way to store your coins. Plus, they consume no resources. No bandwidth, no network stress for every node we have, no storage of 20Gb+ blockchains, no weeks of waiting for things to sync, no tearing your hair out and posting desperate pleas for help, and most importantly, no coins irretrievably lost because you or your client screwed up.
Wallets, ALL WALLETS are nothing but numbers. Very large numbers, but fundamentally no different from “7”, “42”, “911” or a phone number. They cannot be created nor destroyed, and you either know them or you don’t. Anyone who knows a key can use it to spend any coins it controls. Anyone who doesn’t know it, can’t. Don’t be the guy who doesn’t know his own keys. Keep them safe. Make copies. Keep those safe. Don’t let your friends, kid brother or random burglar find them, but don’t lose them either. The only other thing you need for a fully functional wallet is a way to spend coins. Coinb.in is such a way. There are others, such as DogeCoinMultiSig.org which tomcarbon built. Oh, and you can and should download it and run it locally.
The default entry point for coinb.in is https://coinb.in/#settings because this settings page is very well hidden. Its in the tiny gear wheel on the Broadcast page. Looking across the top of the page, you can see
We’re only going to use three of these. New, Sign, Broadcast. Now, keep in mind that coinb.in is an old Bitcoin tool which tomcarbon added Dogecoin to. Sometimes it thinks its dealing with Bitcoin still, so if you see anything odd, go and make sure you’ve selected Dogecoin in the Settings page.
This tool should be the only place you spend coins. Sure, some clients may look more convenient, but they all suffer from a very big coin-losing flaw. Whenever you split a UTXO, they create a new wallet to send the change to. And they DON’T TELL YOU! This means unless you back up after every transaction, you run a high risk of finding all your coins have ‘disappeared’ from your wallet, and you don’t recognise where they went. So if you use a client for the convenience as well as a text list of your wallets, you won’t know to add a new wallet to your masterfile. Its best to ditch the clients entirely.
Now we come to the nitty-gritty. Lets use those three wallets above and assume that #1 is the source, #2 the destination and #3 the change wallet. Note that these won’t actually work, as none of them have ever been used, but they will do as examples. New Transaction Located at the bottom of the New menu, this will give you a page to enter your wallets and amounts. In the top field, you enter your source address or Key. If you use the key, it will calculate the address when you click the Load button, which should match what you expected. Note that Load only brings in the first 100 UTXOs. This is so that you can retrieve coins from high-volume wallets which would kill any client. Coinb.in is in fact the ONLY WAY to do this, as even QT falls over around 600 UTXOs. You will see the total balance that was loaded in the Transaction Fee field. And also in the Inputs tab, where you can go to adjust which UTXOs to spend. Now you need to add the wallet(s) and amounts to send to them. Lets suppose the source contained a single UTXO for 1,000 Doge. You want to send 500 of them. So you would enter the #2 address in the Address field, and 500 in the Amount field. The Fee now changes to 500, which is not what you want. So you click the + button to bring up a new line, enter the change address and the other 500, making the fee zero. And you’re done. Check that the Fee is indeed zero. Check that the amounts shown in the Outputs and Inputs tabs match exactly.
THIS IS CRITICAL!
There is a bug which will send all the coins to the miners if the Outputs exceed the Inputs. I would have expected the Fee to show as negative in such a situation, but it doesn’t. BE WARNED! Once everything looks right, hit the Submit button. This will give you a block of hex code. Copy it. Sign Go to the Sign tab and paste it. Add your private key for the source wallet and click Submit. Note this can be done offline for safety. This will give you another block of hex, the SIGNED transaction. Broadcast Copy this and paste it in the Broadcast tab and click Submit. That’s it. Your coins are on their way. Make a cuppa and settle in while they arrive in a minute or three. Note: All fields retain their values unless you refresh the page! This can be a boon when doing multiple transactions, such as when emptying a huge wallet. But it can also be a trap for the unsuspecting. Refresh or close the window when you’re done.
Who should use this? Absolutely EVERYONE! Even if you’re wedded to your client in some satanic blood-contract, you should still know how this works, because sooner or later you’re going to have a problem you can’t fix without it. Definitely download the site and store it on every device you have. On every USB backup of your wallets. On your phone (well, except iOS which doesn’t do local HTML), etc, etc, etc. Oh, and if you’re a programmer SmartyShibe, do consider improving the code over on GitHub. EDIT:https://github.com/OutCast3k/coinbin added courtesy of AtomHearth
I remember being happy as a little kid. I had no chores, I had the best toys out there, and I had no worries about my future. Not having a brother or sister, unlike most other kids, I wanted that the most. Assuming my parents both wanted another kid too, I got a sister when I was 5. I was the happiest kid alive. Since my parents would be a lot of busy raising the new baby, they also bought me my first computer, probably so I wouldn't think they have forgotten about me, and now are all about taking care of my baby sister. I loved playing with, and taking care of my sister, but more than anything, surprisingly, I loved my computer. I don't know why, it was a new thing back then and I was so in love with this technology, especially games. Quickly enough, I turned 7, and started going to elementary school. My dad then told me straight up, that I should study hard and get all straight A's, otherwise I'd be grounded really hard, to learn my lesson. Being scared of disappointing my dad, I did. I studied hard. I could say I'm a gifted man. I learn really fast (rapid progress is seen if I work on something that I like), so I had no problems getting all them A's. Studying hard was rewarding for me, as every time I got an A, I would be allowed to play on my computer longer, they'd buy me new video games, and take me on a vacation almost every summer. But nobody's perfect. My nightmares started when I was 10, and in my 3rd grade. I got my first B on a test. I was disappointed in myself, came home, and told my parents that I got a B. My dad beat me up really bad. He used to slap me once or twice, or yell at me if I did something wrong before, but this was rigorous. He beat me up like an animal, and when he was finished, tossed me in my room, and told me that my punishment for fucking up is: no going out to play, no friends coming over, no watching TV, and the worst of all, no playing video games. For. A. Month. I was only allowed to go to school, eat and study. He wouldn't even talk to me at all for the duration of my punishment... I was devastated. But I embraced it. I thought that I haven't studied hard enough, and that if I do from now on, this would never happen again and therefore, the scenery that I lived through that day wouldn't either. I had all straight A's in my third grade, now scared of being beaten up by a person I really loved and respected. I wouldn't even mind if he just grounded me, but beating me up was so terrorizing I did not want that to happen EVER again. As a reward, I got a brand new PC after I had all straight A's in my 3rd grade. I was finally able to play GTA San Andreas, which was a new game back then, and my favorite. Soon after he also connected me to the internet, and I started playing my first multiplayer game, CS 1.6. As I started going to 4th grade, things got worse. I, obviously, messed up again, and got a C this time. 'No way in the world I'm reporting this home' I thought to myself, as I did not want to go through the horror I did in the past. So I didn't. But soon enough he found out, and beat me up even harder for fucking up, and lying about it. Starting from my 4th grade, all the way to today, I remember very little of this time in my life, everything is so blurry. I started hating this reality and my own life. I drew myself to play video games more and more, distancing myself from my family, and most of the friends I've had. Next thing I remember is getting a new phone after I finished my 4th grade, obviously, with all straight A's. It was a Sony Ericsson K750i. It was the best phone back then, most of the people have had it. Unfortunately, I wasn't used to paying attention to my stuff and I lost it like 6 months after he bought it to me, little after starting my 5th grade. This time there was no way I could cover that up, but I couldn't tell them that I've lost it. My father found out that I don't have it like 3 days after I've had it lost, since I used to play on it a lot, so it was pretty obvious. He broke everything I had. He broke all the video games I had, he broke my computer, and then beat me up like never before, this time with his fists. I still feel unpleasant pain in my ribs when I stretch myself to this day. I was punished for half a year this time. He wouldn't talk to me at all, sometimes wouldn't even allow me to eat, I was just going to school and studying that time. Having nothing else to do I also finished my 5th grade with all A's, and he was generous enough to let me play on the computer he had bought me when my sister was born, now a very old machine, as my 'reward' I was scarred enough already. I had no hopes for my future, I just wanted to play video games. Since I could only play CS 1.6 on this hamster machine (which I still keep to this day, to remind me of the somewhat good times), I started running my own CS 1.6 server. I got into coding, I made interesting mods for my server, changing the gameplay and making it different and more fun. I also got into website and forum coding for the server that I had. It was pretty successful server, being full with players 24/7. I tried to show my dad my first triumph, something that I've built for the first time, but he never acknowledged it. 'Waste of time', he said. I knew I was born to code. I learned to code AMX, HTML and CSS in my 6th grade, all by myself. I was gifted for this. This is something that I'm really good at, still am, and I want to build my life around it. But not my dad. I guess he had different plans for me. Being drawn away from school and studying, now focusing on running away from my shitty reality and life, I spent lesser and lesser time studying for school, and more and more on improving my coding. I became really good at lying to my dad about my terrible grades, as I barely averaged B in my 6th, 7th and 8th grade, plus my mom, who is a very generous and good person, seeing through which horrors I (and also she) was going through, she'd also cover me up. She couldn't cover everything tho, so I'd end up being punished for bad grades again and again. I wanted to go to the IT high school, and continue my progression into programming. But my dad didn't. So I ended up going in a high school, for a car mechanic. Obviously, I was really hated in my high school by everyone, and on top of that had to attend classes I didn't give 2 shits about, and fix cars. I was barely passing my grades, averaging C. At this point I'd say my dad gave up on me, and didn't even bother punishing me for my terribly bad grades. My high school was generic. I would just play WoW every day (I still play WoW to this day), I pretty much gave up on coding and every dream I have had then. I didn't even know why was I alive. But I found my happiness in WoW. A perfect world where I exist as a powerful hunter, defeating the evils of the world and having good friends there. I played WoW 24/7, and I still do. A flip happened in my 3rd grade of high school, where I got an opportunity to try my first ecstasy pill. I haven't touched alcohol, cigarettes, nor any drug before then. I was 18 now, so I thought, well, 'to hell with it, lets see why is everyone praising this drug, I have nothing better to do anyway'. Needless to say, that was the best experience I have had in a decade. I knew it's just a drug, and fake, but I haven't felt so happy and fulfilled for such a long time, I immediately fell in love with it. Soon after that, I started smoking weed, and found myself, not trapped, but in love, emotionally attached to these substances and in love with the reality they offered. A perfect reality, where I can be happy, for as short as the effects would last. Wanting to run away from reality as far as I could, I paid interest in LSD, as many were saying it's the craziest thing they've tried. So like 2 years ago, I dug, and found out about deep web. This is where I got introduced to Bitcoin, which I'll talk about later. I bought my acid, and man, is this shit good. Completely different state of consciousness and a loss of self identity. I really liked acid, but dropping acid and getting high wasn't my goal now, it was Bitcoin. I fell in love with Bitcoin technology as well, much like i fall in love with any interesting technology. I saw potential in it, and being only 150$ back then, I thought: 'If I could only have one or two, I'd hold it for the rest of my life'. So I told my dad about it, about the technology, the potential, and he immediately replied: 'To hell with your ponzi schemes and pyramids, learn a profession and start making something out of your life'. Yet another devastation. I've also started losing interest in Bitcoin too, since there was no way I could obtain one, hence I had no job, and was still trapped in my high school. I kept abusing drugs for the next year or two, distancing myself from everyone, and everything. The MDMA fucked up my serotonin even further, and I found myself drowning in my sadness and hopelessness even deeper. After my high school I tried to look up for some job so I could at least have money for myself, but anything that I wanted to work, my dad straight up rejected, and didn't allow. I am pretty scared of saying no to him, so I just give up, on everything that I ever wanted to do. 'I'm fairly good at English', I thought, so I figured I wouldn't mind being an English teacher, and my dad would acknowledge this. Actually, I'd love that. I tried to apply for colleague, to study English, but my terrible grades from high school held me from succeeding. I did the test well, but my high school drew my average points way below the requirements. My dad knows some powerful people in town, so he had me applied to a colleague for being a policeman, or something. I didn't have to pass anything, the people he knew would just put me straight in. I refused, not wanting to go through horrors like I did with my high school. He started yelling, threatening me he'd kick me out of the house if I didn't go. Being scared shitless from my dad, I had no other option. I started going, but I couldn't proceed. I missed my first semester, I didn't study at all, and eventually my parents got a call, stating that I'm completely inactive and missing from classes. My dad got furious. He hadn't talked to me for months after I dropped out. He barely acknowledged my existence. I couldn't take it anymore, I took a pen and a paper, wrote down my final words, and went out to fucking do it. But I couldn't. The only thing I remember going through my head was my mother, and my sister, (and my little dog) which I love the most. I couldn't do it because they matter to me. I couldn't do that to them. I remember my mom fainting when she saw me come home, whole neighborhood was gathered to look for me. It was very unpleasant going through that. Surprisingly my dad didn't appear even worried. Like he knew I wouldn't have the balls, basically spitting that in my face. My dad, now (not really) realizing the mistakes he had done, decided to make me happy again, and buy me a mining rig, about 8 months ago. I couldn't say that I was really happy because I'm finally doing something that I loved. I was still devastated from my past, and I doubt that it would ever change. Another big flip was, one month after I started mining, my dad got very furious and started yelling at me because my mining rig was earning lesser and lesser money day by day due to increasing difficulty, and price per ethereum fell from 400$ to 200$, which is understandable having a bull run from 50$ all the way to 400$, that had to happen. He told me to sell all that shitty gear and return him the money he had gave me for it (?!?!?!?!?!). Yeah, he does that often. He buys me stuff to make me temporarily "happy", and then just heartlessly takes that away sooner or later. I, of course, refused, started crying and locked myself in my room. He got even angrier, busted the door, got in, started yelling at me. I didn't care if he'd beat me at this point, I'm used to it. 'Just don't break my miner', is the sentence I repeated inside my thoughts over and over. My mom rushed to try and calm him down, he hit her instead, and she fell down. I couldn't control my breath now. I started breathing faster and faster, then I started seeing double, and I passed out. I guess I had a panic attack. I woke up in a hospital, with my mom and dad next to me. I pretty much lost it then. I started spending more and more ethereum on drugs that made me happy, without thinking of the consequences. Eventually I spent all ethereum, having a need to take more and get higher, and not enough money to pay for it, I sold one graphics card, and then another. I'm left with 4 graphics cards mining now, trying to lay off the stuff and focus on making my video game (hint: https://krle997.github.io). I never told my dad about the game, because I didn't want to get devastated by him once more. Of course, being used to lying to my dad about everything, I didn't tell him about this either. The sucker never even comes in my room so he'd never figure out that I had sold my graphics cards, nor that I have no ethereum. I kept lying to him that I have something that I don't. Reality check. Seven days ago he said he needed the money urgently, and told me to sell my ethereum, which I don't have. He thinks I have around 4 ethereum by now, which is a big amount of money for my country. I wouldn't even be able to mine two ethereum by now, due to increasing difficulty and what not, but I had to keep lying to him about daily earnings so he wouldn't get furious again, and lying to him about ethereum I spent too, price movement, etc. I don't know what to do. I lied to him that it takes about 7-14 days for the transaction to happen, just prolonging the inevitable, eventually. I thought of asking my mom to help me through this, but shes been going through too much trauma too, she also lost her mother not longer than a year ago, and her dad passed away seven days before my sister was born. So she has it pretty fucked up too. Only reason she is still married to this man is because of me, and my sister, we are everything to her. I only have one true friend. But there is no way in hell he could help me through this. He doesn't even know that I don't have the ethereum, as I'm lying to him as well, being afraid of being judged. Should I tell my mom? I don't see any other way I'll get through this. I don't want to die, and I don't want to run away, seeing that as my only viable option right now... Thanks for reading my story. I hope you have a wonderful day, and bright future! Peace.
Achieving consensus on your idea is more than writing good code and posting about it on Medium
Our community is full of grass roots activist coders who have been trying to make a difference in the block size debate, some for years. What I have watched over the years is that grass roots activists like myself can agitate and code, but we lack the necessary connections to get exchanges, miners, and media to support our efforts. We big blockers may have the "ideas war" won, but for years we lost the marketing war. Hopefully that will soon change. My point is that to actually lead change requires more than a good idea and a blog post. If good ideas and lots of online posting was the only prerequisite needed to drive change, well I might be King of Bitcoin by now, or at least Viceroy of Large Blocks. Society is decentralized but not evenly distributed. Some people are the idea generators, some are the influencers, some are the deciders, some are the change agents. Some people have lots of leverage in certain situations. Some people understand the risks and rewards of taking personal chances and are willing to put themselves at risk while others are not. I am not, for example, willing to lead the big block effort. Never have been. I have the experience, and I suppose I have enough knowledge, and I could even find the time, and I have enough money. But I just don't have the gumption to put myself out there any more. I know how much energy it takes - not to write and test code, that's the easy part - the hard part is picking up the phone and getting confirmed support from actual people for your ideas; promoting the ideas on web pages and doing interviews; taking flak on the internet from do-nothings like me; etc. Mike Hearn was great at this shit. His peers hated him for it, because sometimes Mike's ideas weren't the best but he pushed them through anyway. Leadership looks like that. Leadership is not about waiting for everyone to agree with you: it's about understanding that (A) universal agreement is impossible (B) change is inevitable and (C) standing still is lethal. So I say all of this to those people seeking to put together some formal processes for consensus-finding among the decentralized dev teams. It's a good idea to try to find consensus. But realize that quite often consensus will not be found organically. Developers (I'm one) are often guilty of preferring their pet projects (I'm guilty of this too) so anyone who has managed IT departments (I have) is well aware that an IT leader must be able to drive decisions without consensus, otherwise many decisions simply cannot be made bottom-up. So any formal process must have baked into it at a fundamental level some kind of kill-switch where any repo leader can just take off and do its own thing and try to sell that thing to the community without the community going to war. In other words we need to learn how to do healthy competition among the decentralized dev teams. Dev teams can't just "build a better mouse trap" then wait for the world to rush to use it. Dev teams are responsible for taking their message to the street. In software development the project isn't over when the code is written. We all know that's the easy part. The hard part is rolling out the new code and getting everyone to use it. In organizations we call that "change management" and its principles apply to Bitcoin. But organizations are generally hierarchical and Bitcoin is decentralized. That means that change management is also decentralized. Change is ultimately led by motivated individuals. The best idea in the world doesn't spontaneously cause change. Think how hard Satoshi had to work to build up his first 100 users! (edit: then think how long it took before the first pizza) Leadership on these projects means "getting rubber on the road." Teams need to learn how to take ideas, pour them into code, and then get the community to run the code. "The code isn't finished until everyone is running it."
Dark Net/Decentralized Net, Hypothetical layer 2 solutions for DEX's, phone nodes/MeshNets
There was an incredibly important episode of Max Keiser today, the second half he interviews a Venezuelan entrepreneur who is building encrypted meshnet nodes that can send bitcoin transactions and encrypted messages with 3g and 4g without sms, in places that are heavily censored, offgrid, or out of power, they also said you can repurpose old bitcoin miners into these things as well. With the direction that governments are going, I think it is increasingly important to seperate the blockchain from the internet backbone itself by using meshnets (and to ultimately make Tor and exchanges a part of it as well) In any case to the point- G20 summit recently said that they more or less plan to wage a global KYC AML war on cryptocurrency. Many of their proposals undermine the entire privacy and safety of crypto and are antithetical. They are proposing building parallel identity associated traceable refutable, mutable systems and barring countless people out of the economy globally. They could try to break constitutional rights to put backdoors in open source software developers, to persecute miners, node operators, software and wallet releases like Wasabi. And now with FATF, the exchanges will lean towards, they will have a motive to simply ban non compliant or non identity attributed 'smart contract' wallets, a defacto ban on peer 2 peer anonymouty. Countries would attempt to force these wallets onto people and they would essentially have their bitcoin trapped in a statist parrallel bitcoin ecosystem with no way to send money to anonymous wallets, they would attempt to ban and regulate normal wallets and hardware wallets and to ban VPN and Tor, to seize DNS and domain. IT's very easy to cencor crypto and thus money and economic freedom, because the stupid Decentralized exchanges have seizable servers, addresses, business, name, etc, and the order book and matching engine require a server adn resolver, and have temporary custodianship over crypto assets, happenoff chain, etc. What is needed is a real time atomic swap over a decentralized DNS/servecomputation like with IFPS/ZeroNet/Namecoin/Blockstack, but there definitely needs to be hostable nodes, proliferated meshnet node phones. I think ethereum 2.0 scaling will be the breakthrough moment for speed/size, etc. This tendency towards controlled DEX like Binance is just utterly unsustainable and needs to be readily undermined, but it will require the merging of many blockchain systems with meshnet strategies. I am trying to gain some insight into what people are working on and envisioning for a lot of the coming layer 2 solutions in regard to a broader decentralized ecosystem, notably for DEX and smart contracts. -How can layer 2 aid and help the concept of something like Ren VM where you have decentralized computing and smart contracts privately interacting with liquidity pools? -How is layer 2 going to strengthen the feasibility of proliferating full nodes on raspberry pi and phones, and will it help DEX? I feel like a really big issue like a front and center issue is the reliance of exchanges on a central server for orderbook matching and offchain settlement, margin, colateralization, the data involved. Non custodial wallets aren't enough. The central servers are a vector point for centralization, counter party risk, over reliance upon high capital institutions. Arguably bitcoin needs something much more decentralized, that could be achieved with layer two solutions that either integrate with or emulate things like namecoin, ethereum smart contracts, and the new Ren VM tools. The biggest issue is of course speed and scalability. The server function and data of these exchanges should be held inside smart contracts because its more secure, it seems like a virtual machine approach is in fact a better way to go about the challenges of linking liquidity pools and orderbooks. There's also a project from back in the day called Gridcoin. It was or is used to link up computer processing power for science applications and scientific engine rendering solutions for modeling things. Richard heart is making a project similar for science applications. I believe this is a much more secure way to approach DAPP's and layer 2 protocols, to get virtual machines that are not located on central servers to help process a lot of the advanced needs of the network, to slowly make the entire exchange and reliance of these failurepoints of bitcoin to be a part of the bitcoin protocol itself, to remove the ecosystem itself away from the clear net and central servers, and to begin to upload it into satellites and proliferated phone nodes.
I needed $4,000 USD in BTC and found Wall Of Coins to be a clean interface, anonymous, didn't have to deal with a private vendor, etc. I did a $20 test transaction and everything went fine, but when I tried to deposit my 4k into Bitcoin, they halted the transaction! Now, Wall Of Coins is holding my Bitcoin hostage and demanding I provide them with a selfie while holding my government issued ID and transaction receipt. The support chat assured me I wouldn't need more than an email address and phone number, and the video she linked me ( https://www.youtube.com/watch?v=Ab7zYYrJLN8 ) claims WOC is "anonymous, safe, secure". What is less anonymous than taking a selfie of me holding a government issued ID and transaction receipt next to my face? I created a throwaway account for this post because they're obviously after my personal information (my years old reddit is linked to me as an individual). I don't know what to do. They're threatening me with not paying out until I give them the personal info they want, and that's a lot of cash to lose. I regret ever trusting Wall Of Coins. They are a scam, not trustworthy, and not anonymous! Please upvote to warn others from falling into this same trap, and if you can think of anything for me to do to get my cash back or get my bitcoin, let me know. Thanks everyone, appreciate the help in advance. Tag: Wall Of Coins Review UPDATE: In the end, I did get my bitcoin from Wall Of Coins, but at the cost of my individual privacy and wallet anonymity. Sarah was friendly, but ultimately not able to step around their KYC Policy (know your customer) not currently advertised anywhere on their site. I was forced to provide a photo of my face next to a government issued ID and transaction receipt. I was assured they would file away my photos but not release them to anyone unless the government issued them a subpoena. Even after agreeing to take the photos they forced me to provide, it still took a week of constantly calling them to get it done. I counted 23 outgoing calls on my phone history, most of which (as others have noted with the support staff from Wall Of Coins) were with irritated employees who didn't have the clearance to assist me, and whose superior coworkers were forever unavailable and never once returned my callback requests. I seriously doubt if their singular phantom "compliance officer" even exists. In addition, the miner fees they pay out are low and took overnight for each of my transactions to get through the blockchain which is ridiculous considering the extremely high fee they charged me for their service, if you can even call it that- lol. Overall, they are overpriced, have a horrendous customer support staff, and worst of all may compromise your individual privacy and wallet anonymity which, let's be real here, is the number one reason why most people begin using cryptocurrency in the first place.
Blockchain to fix horribly broken e-mail system like it is today?
E-mail as it is, is horribly broken. Horrendously broken. It wasn't that many years ago that you could be assured your e-mail reaches whoever you were mailing to. Today it is a mere suggestion, that perhaps this should be delivered to this person, at least for any automated e-mail. This seems to be creeping to manual, organic email as well. Hell, we are seeing even internal e-mails being flagged by spamassassin as spam, organic, human written conversations! In that instance, the spamassassin is also maintained by one of the largest hosting providers in the world... Hotmail/MS services has been for years (atleast about 4 years now!) been silently dropping email, not all, but some. There's a bit of relief lately, as they have started to favor a bit more marking as spam, rather than silently dropping. I know, most email users don't see this problem, but those who use email a lot to do their work, and those who need to send automated emails (say, welcome e-mails for a service) this is a big problem. (Disclaimer, for us, our niche of hosting probably causes flagging as well. Our site is blocked by many corporate firewalls for example) Blockchain to the rescue? This is an idea i've been toying around with a few years. What if any single e-mail would cost a faction of a cent, and who receives the e-mail, gets paid for it? Now that would solve a lot of problems. I realize there has been some half assed attempts on blockchain based e-mail, but they are about replacing email (never going to happen). Using blockchain to enhance the current experience, with least minimal friction should be the goal, not re-inventing the wheel. Imagine a say 0.01 cent (0.0001 USD) cost per e-mail. This price would not be cost prohibitive even for free e-mail service providers (Ad revenue etc. should exceed this value), never mind any legit e-mail users. Especially considering you get paid for receiving. So all legit e-mail services would work rather well regardless of the cost. (never mind free email service could profit from this) Spam however? To send 1 million emails you would need to pay 100$. How many spammers would continue doing so? At least it makes things much harder, not so easy to use a botnet to send your email when you need to include your private key(s) to the botnet, or make some kind of private key management system, makes more complicated. Small business newsletters? Say you need to send 100k e-mails to legit customers, 10$ is nothing. To human time crafting that newsletter is order (possibly orders) of magnitude greater than that. Price would also fluctuate as per the market. The most difficult thing would probably be setting the self balancing mechanisms to keep per mail cost sensible. As such, the biggest hurdle in this might not be technical at all. Technically, how could this work? Sender sends a TX for e-mail they are sending for recipient. This TX contains message with mail ID, and a segment which can be used with the email contents to unlock the private key for the payment. This way it is verified that recipient mail servers receives and reads the email. Once the recipient server has calculated the private key, they can either TX the received sum to their wallet, or this needs to be formatted so that once the sender has sent it, they cannot recover the private key and double spend (technical hurdle A. For someone who knows their stuff unlikely to be an major hurdle) Step by step repeat: * Sender checks if recipient has "MailCoin" capability * Sender sends TX to recipient * Sender sends the email to recipient * Recipient notices on mail header (say x-mailcoin-tx: TXID_HERE) that this is a "mailcoin" mail * Recipient checks TX if it has been received * Recipient puts the mail on delivery queue, antispam is instructed of heavy negative score (MTA admin configurable) * Recipient claims the value of the TX (this is the hurdle A). Recipient can only claim the TX value in case they have received the full e-mail. (Question, can this step be pushed even further down the delivery chain, but still remain MTA only level without mail client support?). Most likely solution is that the header contains the encrypted private key, and chain TX contains the key to decrypt that private key to claim the coins, or vice-versa? Once recipient has the email & payment, they simply mark on their Antispam a automatic lower score and deliver it normally. E-mail server side we have several components:
Recipient server needs component to check for TXs
Sender server needs component to send a TX, and check if the recipient has the capability
Recipient server OR dns zone has indicator the recipient can utilize "MailCoins" (DNS IN TXT field most likely, ie. mailcoin.domain.com. IN TXT publicaddress)
Most typical scenario would be the Recipient server works as outgoing as well, with single wallet. So depending on your mail volume, do you send or receive more on that wallet you might never need to worry about the coins (except for value going skyhigh and having like 10k $ worth of "MailCoins"). So perhaps additional components on per use case are needed, or more likely rudimentary scripting capability (ie. "MailCoin" daemon api) to keep the balances in check. Technical hurdle B: This needs to be super super simple to setup. Or sufficient financial incentive. One would need to develop standard components & configs for exim, postfix, and other MTAs. Infact, make it autogenerate wallet ID etc. and easy to replace or import private keys etc. to put in coins for sending if you need to. Privacy: On the blockchain you would not see the e-mail contents, only that e-mail likely took place (TX with mail UUID) to recipient. If sender can be deciphered it depends on them if it can be traced who they were. Automatic mixers? :) Recipient can also keep cycling the receive addresses to keep things private if they want to. The biggest problem i see here, is that if an attacker can deduce the sender and/or recipient, it might to lead to some issues out of the scope of technical solutions. If attacker could read the emails, they would already have accomplished MitM and could just grab all e-mails. Default implementation should be so, that from recipient address outsider cannot deduce the recipient server nor hostname. Also, if attacker gains access to your mail with full headers, they could see the TXs in blockchain. MTA might need to scrub mailcoin related headers (yuck, scrubbing headers ....) for paranoid users, but most likely solution is that recipient retransmits those mailcoins as soon as they got the private key for the balance. Blockchain: Blocks needs to be done every 10seconds or so, it needs to be fast. Preferrably even every 5 seconds, as not to cause any undue delay. Then again, if your application is reliant on receiving email within seconds, one should consider another means for communicating. Imho, email should be considered a little bit like snail mail, but on internet pace: Couple minutes delay is just OK. Block size given the e-mail volume needs to be fairly large as well, considering the time between blocks. This is technical hurdle C: Hosting the full blockchain. I can easily foresee that this would grow to be terabytes in size. However, any large email operator would have vested interest in ensuring smooth operation of the blockchain, and for them, running a full node would have neglible cost. (Technical hurdle C) Single email sent using the system could easily have TX contents of 100 bytes + TX headers + block headers etc. Say 100 bytes, and 100 million emails per day: 9.31GiB per day, 3 399GiB per year, 5 years later: 16.60 TiB just for the mail TXs. Some estimate there is 200+ billion emails per day, but we all know large portion of this is spam. But even at 50 billion emails a day, 100 bytes per mail TX would add to 4.55TiB per day! So optimizing the blockchain size is obviously going to be important. The volume will be obviously much smaller as semi-spam (those daily half opt-in spamvertising from companies you know) will be lower as well. So probs 100+ billion emails per day at 100% adoption. Blockchain should then be compressed, the whole block. Algorithm probably should favor speed over compression rate, and should be task specifically optimized (needs a simple reference release, where you can just stream the block contents into it and get output as compressed or uncompressed). The more compression there is, the more full nodes will be hosted by smaller operators :) For large e-mail server clusters there should be central store for the blockchain, but this can be accessed on the system administratoconfig level already. The MTA components will just remotely talk to single full node daemon (so not really different from many implementations in existence right now), instead of each one running locally a full node. At today's cheapest hosting rates 16.60TiB is roughly around 85-100€ a month. Purchase cost per 8TB drive is around 230€ mark right now, externals are cheaper. Not an issue for any even semi serious mail provider. Not even issue for datahoarder individuals. However at 100 billion mails per day: 9.09TiB per day added, which is prohibitively large! We should be targeting something like 20bytes per mail final storage spent, or even less. If it looks like it is going to grow really large, full node needs to have configurable multiple storages, so they can store parts of the blockchain on multiple different devices (ie. individual might choose to have it on 4 different external drives). Filesystem side optimizations are needed as well, but these are fairly simple, just split into multiple subdirectories by the 10 thousand blocks or so, ie. 1 for blocks 1-10k, 2 for blocks 10 001 to 20k etc. Filesystems get exponentially slower the more files there is per directory. 10k might start to show slowing down, but is not significant yet. Nodes could also implement secondary compression (compress multiple blocks together), if the blockchain starts to become stupid large. If it starts to become impossible to maintain, we could possibly implement a scrubbing methodology, where very old blocks get the TX contents wiped as they are not necessary anymore. Should not be an issue Blocks with 10second target generated per annum: 3 153 600 Mails per 10second: 115 740 e-mails per 10second block. Final compressed size (say 20 bytes per mail): 2.20MiB + headers etc. per block Let's start small and allow linear growth to this, say 0.1% per day (36.5% annual) and start from 20k / 512KiB. After 3 years: 41.9k / 1072.64KiB per block, After 10 years: 93k / 2380.8KiB. (2027 we should have HDDs in the size of 30TB and daily max size for chain growth is 19.61TiB) On the positive side every problem is an opportunity in disguise. If the blockchain is large, once again botnets will have a hard hard time to spamming, they can't host the full blockchain on infected machines. They will need to develop centralized mechanisms on this regard as well. One method i can see is by having TOR client built in, and via .onion domain to anonymize, but this is two way street, security researchers could exploit this (see above about the private keys) as well. Even without botnets, spammers will need to dedicate significant resources to host the full blockchain. On the flip side, if spammer has also mining operation on the same local area network, they have both the income for mailcoins + full blockchain, and could leverage economies of scale, but this too would increase cost. And after all: This is all about increasing cost for spamming, while having the price in vicinity where real e-mail users, real businesses it is not a significant impact, or may even be an income source Client side Zero, Nada changes. No changes to outlook, thunderbird etc. Everything works under the hood at the MTA level. Very easy adoption for the end user. Everything is in the backend, server side. Economics for users Cost of operation has above been shown to increase wildly for spammers. But how about normal use cases? Joe Average: They receive e-mail a lot more than they send, all kinds of order confirmations, invoices, newsletters and other automated e-mail. They will actually earn (however tiny amounts) from using this system. So for the masses, this is a good thing, they will see the earning potentials! which brings us to .... New business opportunities! I could foresee a business setting up spam traps, the more e-mail you receive the more you earn! So it pays to get your receiver into spam lists. You don't ever need to read these, just confirm receive of them. All of sudden we could see even greater numbers of invalid e-mail addresses in spam lists, making spamming ever more expensive! Free email services might proof to be extremely profitable, to the point of potential revenue sharing with Joe Averages (and above spamtraps). Because free email is mostly joe averages, they will have greater influx than outgoing. On the caveat, free email needs to have limits, but due to the low cost and potential of earnings, they could implement "mail credits" system, base is like 20 emails a day, but each received email could increase this credit limit. As such, it makes actually sense for free email services to implement this at the very least on the receiving side. Business mass emailings. A business which has 100k valid e-mails on their database will not have a problem with paying few dozen bucks to have their mass mailing delivered. BUT they will make extra sure the content is good and targeted, something the recipient wants to receive. These will be the biggest spenders on email, apart from spammers. ISPs, hell they get paid to provide e-mail. And they are on the same spot as free email service providers, they stand to earn more than spend! Blockchain economics This is where things might get interesting, there is so much potential. However, there are several things definitively should not be done:
Initial Coin Offerings
Non-consensus chain (ie. whatever devs say, goes!), always has to be consensus
Infinite & preferential supply
1 & 2 are easy, just do not mine outside of testnet prior to launch. (If devs get paid by companies, there is conflict of interest as well, but let's not get into that right now) 3: Miners and/or full node maintainers decide what goes on. Probably miners like bitcoin is supposed to. 4: Infinite & preferential supply: No after the launch "contracts" etc. to give coins to preferential parties, it should remain as on the launch unless majority consensus says there will be a change. Proof of stake is gray area imho, but then again also proof of work is the rich gets richer. Mining: Storage requirement is a blessing in disguise, the massive storages required for this to function means that there will be no central hardware developer who sells all the shovels, without significant other markets. Ie. WD, Seagate, Toshiba the main players. This means algo needs to be based on the full blockchain being hosted. The hashing needs to be so that GPUs are the king most likely, since almost anything good for CPUs is also doable in GPUs. Eventually someone will likely come with ASIC alternative, but due to masses of data it WILL require high bandwidth, high memory. Nothing like bitcoin currently, where low bandwidth, no memory requirement for the ASIC. There needs to be some expensive commodity components in there (RAM, Storage), and as such GPUs are the most likely candidate, and the bottleneck will not likely be computation, but I/O bandwidth. Quickly thinking, previous block could include number of blocks to be included on the next for verification, in a highly compressible format. Let's say difficulty is number of blocks to be hashed, or from difficulty you can calculate number of blocks to be included. Previous blocks miner just chooses on random blocks to be included on the next one. Listing 10 series of blocks to be included, which can include series instructions. It could request block #5729375+100, or #357492+500 stepping 5 (every 5th block). Hell the random generator could use last block as seed for the next one to make it deterministic YET random as the emails and TXs change. (WTF, Did i just solve how the algo needs to work?!?) Only blocks which would differentiate is the first few, and obviously Genesis, for which an "empty" block would be what is to be hashed. Hashing algo could be SHA256 because of the high requirement of streaming data, and most ASIC miners lacking in bandwidth (infact, it could be made compatible with bitcoin, but only those ASICS with higher I/O bandwidth than storage/ram I/O bandwidth is could actually boost the perf) Different hashable list operations could be (on the block list what to be hashed on the next one): * Single block * Block # + number of blocks * Block # + (number of blocks with stepping) * Block # + number of blocks chosen by random using each hashed block as the seed for choosing next one (makes prefetch, preread, caching not work efficiently) * Number of previous blocks mined (ie. 50 last blocks) * Above but with stepping operator * Above but with choose random next X blocks, with variations based on the last hashed, sum of the hashed * All random pickers would have operation modes for the seed to be used: From hashed sum, the whole block, block contents, block header These modes would ensure the blocks are there and makes it a lot dependable on variable factors, RAM speed, I/O seek time, I/O bandwidth. This way we have proof that the miner has access to those blocks in efficient manner and the full blockchain is stored there, even if it is not practically retrievable from him / her over the internet for others to obtain a copy. HOWEVER, due to the data volumes, i think it is given they have fast access, but a miner would probably prefer not to share their blockchain contents to have bandwidth free for their mining, as the deadlines are tight. It could be built into the full node spec that they do not accept new blocks from sources which are not ready to supply any given block, and perhaps even periodic test of this. However, this would be unenforceable if people start running custom coded nodes which disables this, as it is not part of the blockchain calculation. It is not miner's benefit to "waste" precious bandwidth to serve others the vast blockchain, meanwhile it is end users benefit those running full nodes without mining to get them fast. So an equilibrium might be reached, if miners start loosing out because other miners will not share their blocks, they will start offering them, even if prioritized. At 2MiB blocks, 10 second deadline, a miner would preferentially want the new block within 500ms, which would be barely sufficient time for a round trip across the globe. 500ms for 2MiB is 4MiB/s transfer rate inbound, and when block found you want it out even faster, say 250ms you'll need 8MiB/s burst which very very few have at a home. At more usual 1MiB/s it would take 2secs to submit your new block. On the other hand, if you found the block, you'd have immediate access to begin calcing the next one. Block verification needs to be fast, and as such the above difficulty setting alone is not sufficient, there needs to be nonce. Just picking the right block is not guarantee there will be match, so traditional !???? nonce needs to be set as well most likely. As such, a lot of maths needs to be done to ensure this algorithm does not have dead ends, yet ensures certain blocks needs to be read as full and stored fully by the miners, just plain hashes of the blocks is not sufficient. Perhaps it should be block data + nonce, then all the blocks hashes (with nonce, or pre-chosen salt) and to be generated block combined hash with nonce needs to have certain number of zeroes. Needs testing and maths :) So there are many ways to accomplish proof of storage, we'd need just to figure out the which is the best. Sidenote, this same algo could potentially be used with different settings for immutable, forever storage of data. Since there is no continuing cost to store data, TX Fee for every message (data) byte should be very high in such a coin. Supply. Needs to be predictable and easy to understand. It would be preferential the standard mailing out is always 1x MailCoin, albeit coin itself should be practically infinitively divisable, and as such supply needs to be in the trillions eventually. But these things get complicated really fast, so we need to set a schedule. Current email use is very large, so we should have something in the same magnitude. 8640 blocks per day - so maybe 10 000 coins per block == 86 400 000 new coins per day == 31 536 000 000 new coins per year, halving every 2 years. First halving: 63 072 000 000, Second halving: 94 608 000 000, Third (6 years): 110 376 000 000, but only halving 4 or 5 times to keep some new supply for ever increasing adoption and lost coins. Got all the way here? :D Thanks for reading up. Let me know what you think, and let's start a discussion on the feasibility of such a system! I cannot develop this myself, but i would definitively back an effort up in the ways i can if anyone attempts to do something like this :) And i know i got probably many of the details incorrect The main point of the methods described above is ease of adoption. Without adoption any system is worthless, and with email, you just cannot replace it like that (see the attempts trying to replace IPv4 with IPv6 ...), but you can enhance it. adoption is very critical in communications systems. (No one would have a phone if no one else had a phone) Addendum 1: Forgot to add about pricing and markets, read comment here Addendun 2:Bad actors and voting
A little late, but as promised here is Part 2 of the Beginner’s Guide to Exchanges. I would like to sincerely thank everyone for their support and feedback in making these. Link to Part 1 This time I also made a Google Docs survey in the hopes of sharing the results with the community. I thought we could share what we use as a whole and why redditors choose the exchanges they do. For skeptics (as you all should be), I assure you that I am not collecting personal information. This is for recreation and if you are still wary, then by all means abstain! Link to Survey In Part 3 I will be wrapping up this series by covering decentralized, semi-decentralized, and derivative exchanges. Here it goes!
00 – Concepts and Definitions (Continued)
What is FinCEN? This is an agency within the US Dept. of Treasury that collects and analyzes information about financial transactions. It is meant to prevent financial crimes and money laundering both by businesses and individuals. In 2011, FinCEN defined digital currencies as fiat and started cracking down on those in the crypto world. Since then, every exchange serving US citizens has been trying comply with regulations otherwise they face severe penalties. Thank them when exchanges as for your Address and an ID.
What is the ICO (UK Regulatory Body)? This stands for the Information Commissioner’s Office and it is the UK counterpart to FinCEN - a regulatory office that reports directly to Parliament. ICO oversees compliance of the Data Protection and Freedom of Information Acts. It is meant to help companies and individuals keep their private information private, and can enforce this with penalties up to £500,000 when personal information is recklessly stored or leaked.
What is APR? Stands for Annual Percentage Rate.
What is Arbitrage? Arbitrage trading means to take advantage of price differences between markets. For example, say Poloniex lists ETH at $400, while Kraken lists it at $500. Buy low at Poloniex and then sell high on Kraken and you just made yourself a hundred bucks. Simple!
What is a Coinswap/Crypto-converter? Basically, a coinswap is a broker. If liken an exchange to a marketplace where buyers and sellers meet to agree on a price, then a Coinswap is a person who goes to the market on your behalf. Give them what you want to sell, and they will come back with what you want to buy. They take a small commission, give you a fair market rate (or close to it), and sometimes don’t even ask for your identity. Coinswaps are popular because they are convenient and offer coin pairs that exchanges sometimes cannot.
Overview: Founded in late 2013 by Gerald Cotton in Vancouver, Quadriga should be a source of national pride. While 4 major Canadian exchanges suddenly closed between 2015 and 2016, Quadriga survived. Then In 2015, Quadriga became the first exchange to attempt being listed publicly by enrolling for enlistment on the Canadian Stock Exchange (CSE). However, it ultimately failed to do so after being confronted with restrictions and regulations.
Withdrawal/Deposit Fees: Low deposit and withdrawal fees in comparison to other exchanges. A little unorganized on their official site
Linked Bank Transfer
Deposit 1%/ Withdraw Free
Free (Withdraw Only)
1% (Withdraw Only)
Free (Withdraw Only)
Security: Quadriga was quite notably lost of 67,000 ETH earlier this month, after an expensive mistake involving the Geth 1.5.9 upgrade. Apparently, outgoing addresses were incorrectly entered without 0x at the beginning of addresses and the sent ETH became trapped. Yet Quadriga has taken full responsibility and reassured customers that it will not affect their accounts.
Google Authenticator or Email 2FA Available
Undisclosed amount of funds in cold storage
3rd Party Security provided by CloudFlare
Expired $50 bounties
Verification: Quadriga CX enables alternative instant verification with an Equifax Credit Score Report.
Digital only, Limits Vary
Customer Service: Negative reviews are hard to come by, but perhaps that is due to the smaller size of this exchange. The FAQ is a little disorganized with a lack of tabs or categories on the site. However, support offers a direct phone line and email support. Also u/QuadrigaCX seems very active and responsive in the Bitcoin CA subreddit.
Bottom Line: The handling of the ETH loss was handled professionally and quickly. And as a Canadian, lower deposit and withdraw fees are probably impossible to find somewhere else. Trading fees are a little high, but that is the trade off. It seems they have weathered some ugly storms other Canadian exchanges could not and are a trustworthy exchange going into the future.
05 – Fiat Exchanges – Europe
Overview: CEX.io is started in London in 2013 both as an exchange and a cloud mining provider with its acquisition of Ghash.io. In 2014, Ghash was the largest Bitcoin mining pool contributing to over 42% of the mining power and mining over $200 million in BTC. In October of 2014 Ghash closed yet CEX.io lived on as an exchange.
Verification: With a lot of backlash from the Bitcoin community, CEX has registered with FinCEN and ICO in the UK, while also implementing Anti-Money Laundering (AML) and Know-your-Customer (KYC) policies. Once these policies came into effect and ID verification was requested, many original Ghash users abandoned the exchange. Exchange allows for linking of Facebook and Google+ accounts. Not a good option IMO.
ID + Photo
$10,000 Daily/$100,000 Monthly
Customer Service: Customer complain are abound here, and for justified reasons with hidden deposit and withdrawal fees. However it seems the company is quick about inquiries and verification, stating that most inquiries are filled in 24 hours. The FAQ is comprehensive which you should come to expect from established exchanges. Despite some unhappy customers, tt is good to see that they care about their reputation and their product.
Bottom Line: If you are already invested in crypto, CEX.io has some of the lowest trading fees in the game. However, they are clearly taking advantage of inexperienced users and those looking to exchange fiat for the first time. When purchasing with their FOK buying service (using instant credit card transactions), not only is the buy rate not at market price, but a 7% fee is added. This is price-gouging, this is FOK-ing unreasonable. I understand that this service offers something not found elsewhere, but additionally 1% crypto and $50 USD withdrawal fees makes these actions questionable if not just plain greedy.
BTC-E / XBTC-E
Overview: BTC-e is has been operating out of Russia since 2011 and provides language support in English, Chinese, and Russian. Perhaps due to this flexibility, it has high volumes of BTC, LTC, and ETH. It has an unclear connection to xBTCe, but both link to each other in the FAQ of the respective sites. A feature that is provided by BTC-e not seen elsewhere is software for trading called MetaTrader 4. This software seems a little clunky, but includes some TA features.
Security: BTC-e was hacked way back in 2013/2014 and reportedly $35,000 of BTC was stolen. Since then it has had a relatively clean record. This Digiconomist review is a thorough and detailed read, but unsure.
Google Authenticator Available
Must be changed every 6 months
3rd Party Security Services provided by CloudFlare
Verification: Since late May, there have been a shit storm of reports claiming BTC-e is locking funds for previously unverified users. In the FAQ users are asked to register at XBTC-e and within 10 days the account will be unblocked. It is unclear how the websites are connected or related to each other and 10 days is eons in crypto time.
No Stated Limits
Customer Service: Live Chat is supported during operating hours and the FAQ is listed in Russian and English. Resources are a little unorganized, but complete none-the-less. Bad reviews and complaints are plentiful with the long history of the exchange and the recent troubles with account verification for some long time users.
Bottom Line: I’ve got to be honest that I personally despise the interface at these 2 sites. Both give Yahoo! GeoCities and the original SpaceJam website a run for their money in terms of web design. Perhaps it makes up for it with some free TA software and a large daily volume. But it comes to say that the longevity of this exchange is its biggest strength.
Overview: Liqui is based out of Kiev, Ukraine. As a digital exchange, it does not support fiat currencies and is competing with the likes of Bittrex and Poloniex as it lists dozens of altcoins. The feature that differentiates Liqui is its ‘Interest’ feature which was introduced to increase traffic and volume to the newer exchange. It works similarly to depositing money into a savings account - deposit ETH into an account and earn 24% APR (or .066% daily interest) which is deposited every 24 hours. There is some fine print about deposit limits and interest calculations, but how it is presented is clear and straightforward. Unfortunately the limit of 1000 ETH needed by Liqui is currently full, so you will need to wait until others withdraw ETH or the limit is increased to participate.
Verification: There are no deposit/withdrawal limits and no verification levels. In order to start trading, all that is needed is an email address.
Customer Service: Searching for user reviews shows mixed results about Liqui’s customer service. The fact that it supported on several platforms, is reassuring. Contact Support@liqui.freshdesk.comBy Twitter@Liqui_ExchangeBy Telegram@Liqui
Bottom Line: The design and simplicity of Liqui stands out in my opinion. It is like what Poloniex could be if they just cleaned the UI/UX a bit. I like that it immediately gets into the trading charts without having to click around and if you miss the trollbox then this is your site. Like other smaller exchanges there are doubts over the reputation and reliability due to the opaque nature of the operations and development team. If you are looking for an alternative to Bittrex or Poloniex, this exchange may be worth investigating.
06 – Fiat Exchanges – South Korea
안녕하세요 여러분! 혹시 우리 한국인 친구 이 보고서를 한국어로 읽고 싶어한다면 알려주세요. 관심이 많이 있다면 간단한 한국어 보고서도 만들 수 있습니다. This year, ETH has taken off like a rocket in the Land of the Morning Calm. With a population of just 50 million, South Koreans account for almost 30% of daily ETH trade volume. Even more surprising is that currently the daily volume of ETH is about 5 times higher than that of Bitcoin on Korean exchanges. Since demand is high, ETH is trading at a premium on Korean exchanges. Some users have been talking about capitalizing off this imbalance by trading on arbitrage between exchanges. For those who have no connection to Korea and hope to do so, I have bad news – all Korean exchanges require a National ID number and access to a Korean bank account. This makes Korean exchanges virtually closed to Korean nationals and those with long-term visas. Sorry everyone.
Overview: Bithumb has all the features of horrid Korean web design - pop-up ads, flashing side-banners, disorganized pull downs, links to cafes/blogs, and generic stock images with embedded text. You can’t even see the exchange before making an account with your email or mobile number. It does support 4 languages, but reveals only poor translation done by Google Translate. In the face of this, this exchange has been trading a daily volume only second to Poloniex. On the bright side, they have the unique options to buy gift certificates/vouchers and remit money overseas.
Overview: Coinone is the second largest Korean exchange, and its design is a breath of fresh air compared to its rival. It offers service in English and Korean and allows for the trading of Bitcoin, ETH, ETC, and Ripple. It has a very comprehensive chart that is highly customizable, but sadly is only gear towards BTC currently. This makes it perfect for margin trading, and in the future I hope they add ETH. They also offer overseas remittance through their service Cross. Coinone support seems above average in their customer service with a PDF guide and an unprecedented landline number for direct support.
Overview: As the smallest of the 3 Korean exchanges, Korbit benefits from its simplicity. It by far has the best design and English support with clear links to services - including remittance, global payment, and their company bio. Like CoinOne they offer a direct phone line for customer inquiries and an extensive FAQ in 2 languages. Similar to the other exchanges, it has insanely low fees for deposits and withdrawals. This is largely thanks to the Korean banking system where wire transfers and mobile banking are commonly used. I recommend anyone interested in Korean exchanges to start here as they also have a reddit presence on u/korbitBTC
With a great deal of anticipation, major Chinese exchanges started trading ETH this summer. Since these exchanges deal huge volumes of Bitcoin already, naturally it was expected that they invest heavily into ETH as well. So far this hasn’t quite lived up to the hype with many exchanges still favoring Bitcoin, Litecoin, Altcoins, and even Ethereum Classic (Gulp). Three of these exchanges underwent inspections by the Peoples Bank of China earlier this year and will be working closely with the government to ease fears of money laundering and market manipulation. There are a lot of Chinese sites, and since my Chinese is non-existent this list is basically just for name recognition. In many ways these sites are very similar in regards to security, verification, and fees compared to their western counterparts; just marketed at a different audience and currency. If users are seriously interested in these exchanges and making reviews, please contribute or ask!
Overview: Number one in Chinese ETH trading, currently overtaking the volume of exchanges like GDAX and Kraken. CoinOne is very accessible with a mobile app, PC trading software, live chat customer support, and wallet services. OK Coin has English for the basic interface, but no detailed information in the FAQ.
Overview: Second in Chinese ETH volume, Huobi mirrors its rival OKCoin in many ways. It has a solid interface, a mobile access, and even the same rumors of faking trading data! Huobi also started with the ambitious motive of having zero trading fees, only to introduce them in January of this year.
Overview: ShapeShift is the leading Coin-converter site and has been since 2014 when it was founded. With great effort put into to eliminating verification requirements and allowing for the exchange of dozens of altcoins, ShapeShift provides a relatively seamless and simple service. The big buttons and bright color scheme immediately differentiates it from other exchanges.
Trading Fees: From the website ShapeShift does not charge a specific fee. Instead, we offer an exchange rate for each coin which changes every 30 seconds with market conditions. We try to earn revenue by offering a profitable exchange rate, and typically we earn in the range of 0.5% (50 basis points). You receive exactly what the exchange rate shows, there is no additional fee (except the tiny miner fee). There are complaints about the fees not being calculated fairly, but no one is forcing any of these users to exchange at the unbalanced rate. Or you could just read what CEO u/evoorhees has to say about it over at the Ethereum subreddit.
Security: After losing $230,000 from a possible internal hack in 2016, ShapeShift contracted the Canadian Security firm LedgerLabs. Afterwards they permanently hired Michael Perklin as Chief Security Information Officer. ShapeShift claims the only information stored during exchanges is the logs of wallets and the transfers between them. This is protected by storing the data across servers in multiple countries with none based in the US.
Customer Service: Customer service is necessary for the inevitable ‘entered the wrong wallet address’ problem from new users. Along with complaints about slow transfers, a simpler platform does not exempt ShapeShift from dealing with tons of angry customers and their problems. I take many of the complaints about unfair exchange rates with a grain of salt, because the problem could have been avoided by the customer. It does seem however that ShapeShift is very responsive, with a presence on almost every social platform imaginable. Even right here on reddit at shapeshiftio
Bottom Line: Especially after the release PRISM, it is obvious that no one is better at simplifying than the ShapeShift team. In order for crypto trading to become mainstream, it need to be easy enough that your grandma could do it. Erik Voorhees understands better than anyone. Instead of being confronted by esoteric graphs, unfamiliar ticker symbols, and a list of registration requirements, ShapeShift differentiates itself from other exchanges in both its interface and ease of use.
Overview: Changelly is a prototype project that was created by developers associated with MinerGate 2013. It has a slightly less sleek interface than ShapeShift, but is still quite intuitive in terms of its pull down exchange bars and other information. Changelly offers Credit Card services like CEX.io, but the fees are currently so expensive that it is hardly worth it. Another downside is the recently introduced email requirement.
Trading Fees: 0.5% Commission Fee with .00042 ETH Network Fee.
Security: It offers 2FA with Google Authenticator and HTTPS protocol.
Verification: A confirmed email address is all that is needed to start trading. You could easily use a throwaway email if there are concerns over privacy. There are also links to your Google+ or Facebook Profile, which seems a little uneccessary.
Customer Service: Like ShapeShift, Changelly suffers in its reviews due to inexperienced users. Those using Credit Cards especially will feel ripped off despite a clear disclaimer stating that rates are high. They have an extensive FAQ, but do not appear to have a ticket system for complaints and their social media pages are more geared for press releases than support. Their subreddit is a similar story in changelly, but their support staff u/changelly_com runs circles trying to solve issues. Because of the honest effort, I believe they can do better and can improve.
Bottom Line: When it comes to criticisms of Changelly, the apple does not fall far from the tree with MinerGate. Users rightfully have some distrust about the lack of opacity in the management and operations of this exchange. I feel that they are more honest and fair in the Credit Card services than CEX.io, but still should cut the service as it generates a ton of bad experiences. If you are looking to convert coins, it seems to be an acceptable service, but some of the benefits are lost with having to verify an email address. In this way it is hard to compete with ShapeShift.
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