Another Bitcoin Question Thread...and Haralabob is scaring me...

ChugsMcGee · Mar 20, 2017

First, looking to make a deposit to a new book prior to baseball season. Bought some bitcoin last week through Coinbase, but still takes a week to process through my bank (which is a different story, thought I only had to wait for the first transaction, anyways...) Bought on the 16th, price has dropped ~$150 since then. Did I just lose $150 x "X" bitcoins purchased before even getting them or am I missing a step in here?

Also, Bob Voulgaris, who I consider an intelligent man and blindly trust on most topics, tweets some cryptic Bitcoin references last night:

"This Bitcoin civil war is a total nightmare." Someone asks him to expand and he responds:

"Replay attacks may be possible - a hard fork is going to be a pain."

"PSA you should never hold coins on an exchange - but you should REALLY not hold coins on an exchange right now while a fork is possible."

I get the holding coins on an exchange part...can someone break down the rest to me in layman's terms and let me know how pissed I need to be about losing money before I have it?

seldomseen · Mar 20, 2017

[h=1]Bitcoin is on the verge of splitting in two[/h]35

[h=2]Two sides are pushing forward with different versions of the software[/h]by Ben Popper <time class="c-byline__item" data-ui="timestamp" style="box-sizing: border-box; text-decoration: inherit; vertical-align: inherit; font-family: inherit; font-size: inherit; font-style: inherit; line-height: inherit; margin: 0px; padding: 0px;"> Feb 9, 2016, 10:28am EST</time>

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Bitcoin is in the midst of a civil war. It has been simmering for some time, though it remained largely out of view to the general public until last month, when a prominent Bitcoin developer announced that the cryptocurrency and the technology underlying were, in his opinion, a failed experiment.
The developer, a former Google engineer named Mike Hearn, believed that bitter infighting and intransigence among the core development team had paralyzed the system, which was facing growing pains that, unaddressed, would cripple the currency so badly it was unlikely to recover. Pundits piled on to pronounce Bitcoin dead, and even its staunchest advocates admitted it was unclear if the project would continue to thrive.
In the three weeks since, a fascinating debate has played out across the globe, as the Bitcoin community struggled to find a way forward. The future remains uncertain, but for now, the cryptocurrency has split in two, with the core development team going in one direction, and a group of influential miners, exchanges, and startups going in another, a separation known as a hard fork. They have created competing versions, Bitcoin Core and Bitcoin Classic, each stemming from the same source code, but now controlled by separate groups of programmers and with major differences in their roadmap.
<iframe frameborder="0" src="https://www.youtube.com/embed/wH81LffRYOk" style="box-sizing: border-box; text-decoration: inherit; vertical-align: inherit; font-family: inherit; font-size: inherit; font-style: inherit; line-height: inherit; margin: 0px; padding: 0px; display: block; height: 419.844px; position: absolute; top: 0px; width: 746.406px; border-width: 0px; border-style: initial; max-width: 100%;"></iframe>
It’s an intriguing test case for open-source software, highlighting how decentralized systems must grapple with internal conflict. It could end up shining a light on the resilience of the blockchain technology that underlies Bitcoin. But one of our era’s most interesting new ideas, today valued at over $5 billion, could just as easily go up in smoke.
<q class="left" style="box-sizing: border-box; text-decoration: inherit; vertical-align: inherit; font-family: Heroic, "Arial Narrow", Helvetica, sans-serif; font-size: 2em; font-style: italic; line-height: 1; margin: 0px 59.7031px 1.2rem 0px; padding: 1rem 1.25rem 0px 0px; font-weight: 600; letter-spacing: 0.02em; text-transform: uppercase; color: rgb(229, 18, 125); display: block; position: relative; float: left; width: 335.875px;">THE NETWORK WASN'T SCALING TO MEET INCREASING DEMAND</q>
First, let me try and lay out the issue Bitcoin is facing. The basic system works as follows: Bitcoin miners use processing power to complete complex math problems, the cryptographic proof of work that validates bitcoin transactions on an open ledger, known as the blockchain. Miners are rewarded for this validating work with bitcoins. Up until now, each block in the chain was limited to 1mb in size, and the rate at which blocks are mined is relatively fixed. But as the number of users and transactions on the network has grown, this limit has begun to create backlogs, leading to slow and unreliable payments.
For those who want the Bitcoin system to continue to grow and thrive, this is troubling. Merchants can’t rely on digital transactions that can take minutes or hours to validate. A segment of the community has been arguing for an increase in the block size, with proposals over the last few years for changes to the core software that would increase each block in size to 2, 4, or even 8 megabytes. But another segment of the Bitcoin community has been pushing back, arguing that increasing the block size erodes a core feature, some might say ideological principle, of Bitcoin: decentralization.
<q class="right" style="box-sizing: border-box; text-decoration: inherit; vertical-align: inherit; font-family: Heroic, "Arial Narrow", Helvetica, sans-serif; font-size: 2em; font-style: italic; line-height: 1; margin: 0px 0px 1.2rem 37.3125px; padding: 1rem 1.25rem 0px 0px; font-weight: 600; letter-spacing: 0.02em; text-transform: uppercase; color: rgb(229, 18, 125); display: block; position: relative; float: right; width: 335.875px;">MAKING BITCOIN MORE PROFESSIONAL THREATENS TO CENTRALIZE POWER</q>
The larger the block size, the more computing power is required to mine blocks. That would shrink the pool of people who can effectively act as miners. The increase would also affect users running full nodes, people who aren’t rewarded monetarily, like miners, but who play a crucial role in the peer-to-peer network of Bitcoin by helping to ensure the same digital tokens aren’t spent twice. The smaller the network, the less decentralized it becomes, something which a core group in the Bitcoin community is aggressively opposed to.
The two sides — those in favor of increasing block size (Classic), and those opposed (Core) — have become increasingly hostile with one another over the last few months. The developer who declared Bitcoin a failed experiment, Mike Hearn, bemoaned the fact that, not only was the community unable to agree on a way forward, but that the argument had boiled over into censorship of its most popular discussion forum on Reddit, DDoS cyberattacks intended to intimidate rivals, and a general atmosphere of ideological civil war about the proper path forward.
Bitcoin is not the first open-source project to struggle with these issues. In theory, the approach is highly democratic and meritocratic. Anyone can suggest a change to the code, and community input, along with trial and error, decides which improvements to keep and which to reject. But in practice, a small group of core coders are the only ones who can implement these changes, because code must be thoroughly vetted and tested to ensure that it doesn’t break the system when implemented. Imagine it as a world where any citizen can easily write legislation, mark it up, suggest changes, and show evidence for their proposal’s value over another, but where making it into law still requires the consensus of a core group empowered with control.
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Austin Hill @austinhill

Bitcoin is not dead,we are going through a similar process that early IETF & ICANN went through
2:42 PM - 16 Jan 2016

</twitterwidget>From Linux to ICANN, software projects with this structure have had to contend with moments where a large or vocal segment of the community disagrees with the direction the core group is taking. In some cases, as with Linus Torvalds of Linux, the founder remains a part of the community and has the authority to settle internal disputes. Bitcoin is an interesting case because it has an anonymous creator, Satoshi, who has achieved godlike status for many of Bitcoin’s strongest believers. They pick and choose bits of the text he left behind to bolster their arguments — You see, Satoshi always meant for blocksize to increase! — Never. Idiocy! Heresy!
<q class="left" style="box-sizing: border-box; text-decoration: inherit; vertical-align: inherit; font-family: Heroic, "Arial Narrow", Helvetica, sans-serif; font-size: 2em; font-style: italic; line-height: 1; margin: 0px 59.7031px 1.2rem 0px; padding: 1rem 1.25rem 0px 0px; font-weight: 600; letter-spacing: 0.02em; text-transform: uppercase; color: rgb(229, 18, 125); display: block; position: relative; float: left; width: 335.875px;">ONE SIDE OF THE ARGUMENT DOES HAVE A SERIOUS LOGICAL FLAW</q>
I’ve been following Bitcoin since 2011, but have to confess that the technical arguments about this issue are often incomprehensible to me. I can, however, spot a fundamental logical inconsistency on the side arguing against a change in block size. Take a look at points 5 and 6 in this essay. In the first half of this couplet, the author, representing a large mining pool, argues that the existence of numerous mines and full nodes is crucial to the health and decentralization of Bitcoin. And yet in the next breath he argues that the votes of these users, registered by their decision to adopt certain software over another, should not be used as governance for deciding the future of Bitcoin. No one group should make decisions for Bitcoin, in other words, but a small group of unelected experts, the core developers, should run Bitcoin.
The group in favor of increasing the block size has laid out a more democratic path forward. As written, the new code offered up by Classic will only begin creating bigger blocks — moving up from 1MB to 2MB — 28 days after 75 percent of hashpower has shown support by producing blocks with a special bit set in the block version number." Just as processing power has been the capital committed to create bitcoins and validate transactions on the blockchain, it will now be used to record a vote by the community.
<q class="center" style="box-sizing: border-box; text-decoration: inherit; vertical-align: inherit; font-family: Heroic, "Arial Narrow", Helvetica, sans-serif; font-size: 2em; font-style: italic; line-height: 1; margin: 0px 0px 1.2rem; padding: 1rem 1.25rem 0px 0px; font-weight: 600; letter-spacing: 0.02em; text-transform: uppercase; color: rgb(229, 18, 125); display: block; position: relative;">IT'S UNCLEAR WHAT WILL HAPPEN IF BITCOIN CLASSIC EXECUTES A SUCCESSFUL HARD FORK</q>
In the first few days since the release of the Bitcoin Classic beta software, it’s become the second most popular version, overtaking an earlier fork, Bitcoin XT, the variant pushed by Hearn before he gave up. We don’t know yet which side will end up with more support, and there are countless detailed arguments about why the split will save or break Bitcoin for good. One thing we know for sure is that a protracted battle would likely damage trust in bitcoin the currency, because if two competing blockchains live side by side, it becomes much easier for criminals to spend the same money twice.
The thing about Bitcoin is that anyone, with fairly minimal computing resources, can follow along in real time, evaluate the debate, download the software, set up their node, and add their vote. We're about to find out if that wide open consensus machine can act in its own best interest when the system reaches a breaking point.

ChugsMcGee · Mar 21, 2017

Thanks, Seldom.

That's what I get I guess, for not investigating and just purchasing. Up $40 in the 21 hours since my initial post, nothing should be that volatile! Two more days of waiting for my transaction to go through.

doubledeuce22 · Mar 21, 2017

For the purposes of most on here, Bitcoin should be used for getting money in and out of books quickly, nothing more.

ChugsMcGee · Mar 21, 2017

doubledeuce22 said:
For the purposes of most on here, Bitcoin should be used for getting money in and out of books quickly, nothing more.

And that's my goal too, but evidently I got stuck in a 7 day waiting period where I'm at the mercy of the value of the Bitcoin after the 7 days...can anybody confirm this for me? Am I stuck with my purchase price from the 16th and whatever the value is on the 23rd is all I'm getting in the book? Or am I missing something?

ChugsMcGee · Mar 21, 2017

More new from Coinbase themselves in their blog via my email today. For those interested:

We wanted to provide customers notice of how a possible hard fork of the Bitcoin protocol into Bitcoin Core and Bitcoin Unlimited will affect Coinbase accounts.

The only version of Bitcoin supported on the Coinbase platform today is Bitcoin Core, currently represented by the symbol BTC.

We may provide support for Bitcoin Unlimited in the future depending on market conditions and stability of the protocol, but we cannot guarantee whether or when such support may be available. Customers who wish to access both blockchains at the time of the hard fork should withdraw their BTC from Coinbase since we cannot guarantee what will happen during the hard fork or when this access may be available.

If one chain receives an overwhelming majority of support from miners, users, and exchanges, we reserve the right to alter the names of chains or discontinue support for certain chains in the future.

Ensuring the safety of customer funds is our top priority. In the event of a hard fork of the Bitcoin protocol, it is likely that Coinbase will temporarily suspend the deposit and withdrawal of bitcoin from the platform pending our assessment of the technical risks posed by any fork, such as the possibility of replay attacks, network instability, or other factors. Customers should take note that they will not be able to withdraw bitcoin from or deposit bitcoin to Coinbase for a period of up to 24 hours or more following the fork. In the event of a hard fork of the Bitcoin protocol, Coinbase may suspend the ability to buy or sell on our platform during this time.

Coinbase looks forward to working with other exchanges and development teams to ensure the smooth execution of future hard forks with as little disruption as possible. Customers should continue to monitor our support pages and Twitter account for updates regarding our support for digital currencies on the platform.

pocketrockets · Mar 22, 2017

This is gonna be a no play for a while folks. Damn.

ChugsMcGee · Mar 23, 2017

pocketrockets said:
This is gonna be a no play for a while folks. Damn.

Yeah...lost ~$400 in value just waiting for my 7 days to clear...sweet.

seldomseen · Apr 2, 2017

Is 7 days what it takes now to process a purchase?

terps1313 · Apr 2, 2017

seldomseen said:
Is 7 days what it takes now to process a purchase?

It is when the purchase comes from your bank account. Credit/Debit cards are instant.

Another Bitcoin Question Thread...and Haralabob is scaring me...

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