
Goldman Sachs Is Setting Up a Cryptocurrency Trading Desk - chollida1
https://www.bloomberg.com/news/articles/2017-12-21/goldman-is-setting-up-a-cryptocurrency-trading-desk
======
mccoyspace
When it comes to Bitcoin, I think of Linux as an analogy. When it first
emerged, many people questioned it's basic premise: "why is there a new
operating system? Everyone uses Windows, or Mac". People didn't know or
understand the idea of open source: "Doesn't that just mean people will find
bugs and ways to hack it?" "Without a company behind it, how do I know I can
trust it in the long term?" At first it's usability sucked. It took forever to
get it up and running. It was confusing and hard to learn. It had a small,
rabid fan base who kept obsessing about desktop adoption rates and wondering
when it would take over. That is all kind of the same vibe as Bitcoin. But
just as Linux showed, you don't need a monolithic, centralized entity to back
it, it can start slowly and improve over time. "linux on the desktop"
basically failed (cue all the linux desktop heads on HH....!) but it
completely took over the whole back end of the Internet. Every server runs it.
And it then morphed and took over almost all mobile/tablet/smartTV/etc/etc
devices. I think something similar could easily happen with Bitcoin. It has
securely held Billions of USD equivalents in value for years. The software
continues to evolve. Its core technology has morphed into many other formats.
And like Linux on the Desktop, maybe the early idea of digital cash will
change into another idea, like a settlement layer. who knows? But I remain
pretty optimistic about it.

~~~
eitland
That's one of the more convincing arguments I've seen.

I still hold though that Bitcoin was an early prototype and its value will
sooner or later approach zero.

I do however think that blockchains and cryptocurrencies are a good idea and
here to stay.

To build on your example:

Linux is here to stay but a number of the old companies, distros and packages
are either gone or on life support and newer companies, distros and packages
are making our wishes reality.

~~~
anonytrary
I can't help but agree with this. People can only mine so many coins. Users
will prefer blockchains which have lower fees and transaction times, so miners
will give priority to those coins. At some point the selling point of Bitcoin
will become less and less true. I have rewatched several promotional videos
for Bitcoin pre-2015, and most of their claims are false as of late 2017.

------
asenna
What's with all the extreme negativity with Bitcoin and its trading price on
HN? I've been noticing that in all the BTC related threads recently.

Yes, this is possibly getting too large too fast. Yes there is a chance this
is a bubble because the barbers and shoeshine boys are talking about it. But
there is also a chance that we genuinely are at the beginning of the
transition from Fiat currencies to crypto (beginning of the S-curve mass
adoption). And given that we live in the digital connected age dealing with a
virtual concept, it takes a lot less time for things to catch on and spread
like wild fire, as opposed to other transitions in history like snail mail ->
Email (which also was not that slow).

And if at all that crypto vision does come true, the value of BTC and some of
these other top cryptos would be worth a _lot_ more than it is right now.

Again, this could go the other way and it could all come crashing down soon
and maybe the hype dies down. But I feel a majority of the HN community is
just waiting for that to happen which I did not expect.

~~~
solotronics
for me at least it is an opportunity to keep my own wealth. If I can keep my
own record of wealth why would I entrust a third party that doesn't care
anything about me? Perfect example is Wells Fargo opening accounts and
charging people.

~~~
spookthesunset
> for me at least it is an opportunity to keep my own wealth.

As long as you don't mind the value of that wealth fluctuating by very large
amounts. Today that wealth might be worth $10k, but in a month it very well
could be $100...

~~~
notyourday
Or being unable to access it.

------
victor106
They typically do this for a few reasons:

1\. High net worth clients demanding such products. 2\. Obvious FOMO. 3\. In
case this crypto thing becomes big they don’t want to be criticized. 4\. All
companies are seeing a nice bump in their share prices with any association to
crypto

~~~
headmelted
Mostly I think it's 1.

A lot of people jump on guys like Jamie Dimon and Lloyd Blankfein for calling
Bitcoin massively volatile / a bubble / whatever, like they _hate_
cryptocurrencies.

They don't care, and they aren't supposed to. Their business is to sell
whatever the customer wants to buy, cheaper or easier than they can get it
elsewhere - and right now the customer wants to buy Bitcoin. Who cares if the
backside falls out of it later?

~~~
cm2187
They got burned by doing the same with subprimes, selling securities to
clients who requested them but in which they did not believe themselves (and
were shorting at the same time). This sort of move carries a significant
reputation risk. I am sure not everyone at GS believes in crypto-currencies,
there must be a lot of internal emails in the style "this is a pyramid
scheme", "this thing will crash", etc... Reminds me a lot of 2007.

~~~
vkou
That's not quite correct.

The problem with subprimes was that banks were issuing questionable loans, and
then selling them to investors (Without telling them that the loans weren't
worth the paper they were printed on.)

This carries a significant reputation risk because they were, quite literally,
defrauding their customers.

A crypto trading desk, on the other hand, just lets them buy or sell crypto on
a customer's behalf, and charge them a fee for it - much like Coinbase does
for retail customers. They won't have any insider knowledge about crypto, and
they probably won't even care if BTC goes to $100,000 tomorrow, or to $0. The
customer asks the bank to sell them BTC, the bank gives them a quote, and the
customer accepts or rejects it. The bank doesn't know if its a good price, nor
does it care - and the customer knows that the bank doesn't know, or care.

There's still ways to defraud customers in this arrangement, but there are far
fewer incentives to do so... Compared to offloading toxic, shitty mortgages
off your books, after having bribed ratings agencies to rate them AAA.

If you really care about crypto, this is a Good Thing (tm). Currently, the
counterparty risk with Bitcoin exchanges is through the roof. Some of them
allow illegal wash trades, some of them don't follow KYC, some of them go
belly-up and steal all your bitcoin and dollars, some of them may be front-
running their users, some of them don't allow half their users to withdraw
USD, some of them are down for minutes a day... For anyone trading in an
extremely volatile environment (Like Bitcoin), this practically screams: "RUN,
DON'T WALK AWAY."

The counterparty risk with a Goldman Sachs trading desk is... Much lower.

~~~
cm2187
Investors buying subprimes were professional investors. Most of them didn't
like subprimes but were buying them because that was the only way to pick up a
little bit of yield in a market where credit spreads were massively
compressed. It's after they lost their shirt that they suddenly pretended
having never realized that subprime stood for loans to riskier borrowers.

This is not very dissimilar. I am certain the majority of investors who will
buy bitcoin did not do their due diligence in term of how the currency works
(in fact I see a lot of pretty financially switched on people around me who
seem quite confused on how it works). They buy now because they want the
return and will complain that they weren't aware of the risks when they lost
their shirt.

~~~
vkou
> Investors buying subprimes were professional investors. Most of them didn't
> like subprimes but were buying them because that was the only way to pick up
> a little bit of yield in a market where credit spreads were massively
> compressed. It's after they lost their shirt that they suddenly pretended
> having never realized that subprime stood for loans to riskier borrowers.

There's certainly more due diligence that they could have done, but that's a
red herring. There was plenty of outright fraud on the part of the ratings
agencies. No subprime mortgage should have been rated triple-A. Yes, you could
blame investors and pension funds for not realizing that they were
systemically duped, and buyer beware and all that, but the ecosystem expected
that CRAs were not flat-out lying to them.

Also, some of those investors were legally obligated to invest portions of
their portfolio into AAA instruments. Their hands were, quite literally, tied.

> Investors losing money = investors suing. Selling products that you don't
> believe in yourself = testifying in front of a bunch of angry senators
> waiving internals emails about "shitty securities" at you.

When I buy a shitty penny stock from my stock broker, and the stock tanks, I
can send as many nasty e-mails to him, and my senator as I want. Unfortunately
for me, nobody will care one whit.

When Charles Schwab sells me a share of MSFT stock, it's not because they
believe, or don't believe in MSFT. Their opinion of MSFT is completely
irrelevant to this transaction. They do it because I asked them to sell me a
share, and because someone else asked them to buy a share.

When some crook sells me a mortgage that _they_ underwrote, that they then
bribed a credit rating agency to rate highly, that I'm legally obligated to
buy... That is an _entirely_ different situation. Do that enough, and you bet
some state senator is going to be gunning for them.

~~~
cm2187
Credit ratings are merely an opinion. You can't call fraud if someone is wrong
on an opinion on whether some securities will go up or down (otherwise you
would jail 90% of research analysts). In this case their rating was based on
the assumption that there wouldn't be a US-wide real estate downturn. That was
backed by a long history and turned out to be dead wrong.

I am sure there was fraud as well. But fraud doesn't explain the financial
crisis. Investor complacency, untested new product, excess leverage and
reliance on short term funding, too much liquidity in the system, interest
rates too low for too long, these were the fundamental reasons.

~~~
vkou
An engineer signing off on a bridge design is also 'merely' an opinion. It's
an opinion that will put that engineer in jail, if the bridge collapses, and
it turns out that he took a bribe to sign off on the design.

There's a world of difference between "We misjudged the long-tail risk of the
instrument we rated" and "We straight up lied so that we could keep getting
business from the banks."

Half the mortgages in some of those AAA instruments were issued to people with
income at minimum wage, or with credit rating in the 500s, or to people buying
homes that were never even looked at by underwriters. This isn't a "Whoops,
our math was a bit off, we didn't expect the collateral to drop in value for a
bit."

This is straight-up fraud, and the people carrying it out should have been
taken out back, and had their shirts taken away from them. We need more, not
less personal responsibility from our professional sectors.

~~~
cm2187
If you think that the future of a business or an economy is as predictable as
whether a bridge will hold, my advice to you is to stay away from any
financial product.

------
coldcode
At the barbers today they were all talking about having bought bitcoin
recently. When barbers start trading in bitcoin its probably the peak. In 1929
some people started getting out when the shoeshine boys started giving tips.

~~~
ringaroundthetx
the reason for that saying is because by the time the lowest class of service
workers is buying then there is nobody else to buy from them

Stocks and commodities spread through society that way, from the most well
connected VCs down to the lower class when the price rise makes them feel like
they have a chance to get rich after it is shown in their nonfinancial choices
of entertainment

Bitcoin hasnt gone through society in this route

Existing hedge funds, VCs, University endowments and pension funds are legally
incapable of buying cryptocurrency

They are all forming new LPs with new operating agreements to do so

There is no institutional leverage or credit in the cryptocurrency ecosystem

There are no derivatives to manage risk yet

The lower class will be selling to the institutions soon

~~~
batmenace
Most of the institutional 'slow money' like endowments and pension funds will
never touch cryptocurrencies, no matter how they are structured. They can't
even take positions on FIAT currencies, or even bonds below AA rating. No way
are they ever touching cryptos.

~~~
ringaroundthetx
> No way are they ever touching cryptos.

Not what I’m hearing in legal circles

Everyone wants exposure, and if they require a new legal structure or a
financial derivative they are doing what needs to be done.

The pensions will just go through the next hedge fund that buys for them.

------
sytelus
In gold rush, you want to be person providing services to people chasing gold,
instead of being person chasing the gold.

~~~
ttul
Today, an 80-year old client of a friend's financial services firm wrote: .

"Hi. Thank you for your excellent stewardship of my retirement savings all
these years. You have helped us change a lot of things, and weather some
pretty terrific storms like the Fall of 2008. I am now focused on a higher
risk-reward trade off, and will be entrusting my son to invest my assets into
the brave new world of crypto currencies. With thanks, please kindly close all
of my accounts and begin the process of moving my funds to my son so that he
can purchase Bitcoin."

I am not kidding. This, folks, is how the world ends.

~~~
user5994461
Can you transfer money to your son in the US? That should be tax evasion.

Where I am from, that order would be totally illegal. ain't happening.

~~~
dmurray
I don't think that is illegal or tax evasion anywhere in the world. Depending
on the amount and the jurisdiction and whether the son gains ownership of the
funds (rather than just the power to invest them), the firm might have to
report this transaction and the son might have to pay for taxes.

~~~
user5994461
It is illegal and it is tax evasion in some jurisdictions.

1) Transferring your money directly would allow to avoid inheritance tax.

2) Some jurisdictions have hard limits on what you can "donate" to your
children. It can be "low" like 100k per 10 years.

~~~
dmurray
No, it becomes tax evasion if you do this and then fail to pay the applicable
tax on it.

In the same way, it's not tax evasion to have a successful business, say,
making a million dollars selling shoes, even though there are limits on how
much money you can make selling shoes before you have to pay tax on it. It is
tax evasion if you make a million dollars of taxable income and only pay
enough tax for half a million.

Do you have a specific jurisdiction in mind where this transfer would be tax
evasion?

~~~
user5994461
It looks like we're both in agreement that there are legal requirements beyond
"just transfer all the money to my son".

Point being. When the client ask "transfer the money to my son and close my
account", he usually doesn't mean "take 30% off, transfer what's left to my
son and close the account".

You can have a look at France. I am not sure what paperwork is needed to make
it legitimately, it's non trivial.

~~~
jonknee
In the context provided it sounds like the client meant his son would be
taking over as the steward of investvesting his money and was going to put it
into BTC. This is not illegal in any way. It’s not any different than having
an investment manager in the first place, other than it sounds like an
objectively terrible idea.

It’s pretty common to move around retirement accounts in the US, the most
popular type are tied with your job and frequently move when you change
employers.

------
johnwheeler
Great. Now we’re on the path to making this a systemic risk.

~~~
QAPereo
Oh good, I was worried that the BC bubble bursting wouldn’t have enough
negative effects on the economy at large.

(/s)

~~~
reefoctopus
Why do you think it would have any effect? It’s still a comparatively tiny
market.

~~~
krasotkin
> half a trillion USD is a tiny market What?

~~~
notyourday
BTC market size is the $$/Yen/GBP/Euros _exchanged_ into BTC a day and
backwards, not Max(SomeOnePaidForBtc) * BTCs outstanding.

~~~
ryanwaggoner
Interesting. Why is it this and not daily volume?

~~~
vkou
I trade you my dog for your cat. We both say that they are worth a million
dollars.

What is the market cap of our two-animal store-of-value ecosystem?

(Unless you're an economist, the answer is not "Two million dollars.")

On the other hand, if I then went ahead and sold your cat to some outside
party for $600, and you sold my dog for $400, we could reasonably say that the
market cap is ~$1000.

------
pmc1
My best guess is that the "store-of-value that can't be manipulated by banks"
is effectively over. Big banks it seems will take over the trading volume of
the big crypto coins and develop their own exchanges.

~~~
nullbyte
They may be able to partially manipulate the price, but they can't influence
the currency or money supply. That's the beauty of crypto.

~~~
aviv
Doesn't matter one single bit. Goldman Sachs can't mine gold and control its
physical supply, but they sure can play with its market price. So they can
drive down the futures price and then hoard physical bullion on the cheap if
they have a large institution or country wanting to accumulate gold reserves.
Rinse, repeat. Finance 101.

~~~
MadSudaca
Also, bitcoin as it stands right now is pretty useless compared to other
cryptocurrencies. The value of bitcoin long-term is tied to the core team's
ability to make the necessary changes to the protocol and to do it fast before
another currency overtakes the lead of the cryptosphere. This is not gold,
this is a world of software that changes and evolves constantly. The bubble
for bitcoin might burst soon, but other coins that provide actual value will
take its place.

------
kregasaurusrex
I'm sort of surprised there's going to be a regulated secondary market for
this, where the newest version of the GOP Tax plan will place a fee on this
form of arbitrage[1]. Then again, I did learn today that a hot wallet I had on
a crypto-trading website had folded and didn't send me any notice of shutdown;
along with the time period of filing a claim having been long passed. Since
there's a lot of theft and lack of accountability with these closures, maybe
regulation could incentivize better data protection practices and pro-consumer
behavior.

[1] [https://www.bloomberg.com/news/articles/2017-12-21/tax-
free-...](https://www.bloomberg.com/news/articles/2017-12-21/tax-free-bitcoin-
to-ether-trading-in-u-s-to-end-under-gop-plan)

~~~
Chardok
> maybe regulation could incentivize better data protection practices and pro-
> consumer behavior.

Perhaps I am too cynical but given Equifax is still fresh on my mind I really
have doubts the US government will do anything but pass laws to make sure they
are getting taxes from cryptocurrencies.

~~~
kregasaurusrex
While Equifax is a quasi-governmental company that's privately traded; fully
private companies that are regulated in the space are required under the
umbrella watch of FINRA/SEC regulations. In the past[1], they have not had any
problem with levying 7 figure fines against organizations that are outside of
data compliance.

Taxing cryptocurrencies will likely push traders who want a greater margin to
foreign countries' exchanges; but I see it as a step in the right direction
for institutionalizing the practice. I've seen a posts across multiple
subreddits where people want to start trading these purely as investment
vehicles rather than use the underlying technology. With an influx of
ideologies working both with and against one another, a lot of ordinary people
can get harmed from the wild-west environment and volatility associated with
it.

[1][https://www.sec.gov/news/pressrelease/2016-112.html](https://www.sec.gov/news/pressrelease/2016-112.html)

------
tootie
Can someone explain this collective mania to me? This is all 100% pure
speculative frenzy, right?

~~~
etr-strike
Most of us Bitcoiners are skeptical of modern monetary policy and want a risk-
free store of value for our wealth. Today Bitcoin is very risky, however, we
believe its fundamental properties will ultimately lead to a stable place to
put our savings. Sure, it won't gain interest or dividends but it also won't
be subject to inflation or central banker manipulation.

The above is purely my opinion and is frequently the subject of disagreement.
It is, however, why I got into bitcoin.

~~~
randomsearch
So why bitcoin rather than another cryptocurrency?

If another becomes more popular, everyone shifts to it, and the price crashes,
what use was bitcoin as a store of value?

The difference with other assets like cash or gold is that they have value
that is supported by a clear rationale based on a central bank’s economic
policies.

~~~
etr-strike
I chose bitcoin because for several reasons:

1\. I believe in the technology approach bitcoin is taking over any other coin
(I believe functionality like smart contracts should be a side chain to the
main bitcoin chain).

2\. It has had a firm 21m supply cap since the beginning

3\. It is the most decentralized

4\. It has the largest userbase -- it's a more widely adopted currency

5\. It has the most proof of work behind it (most of the mining power in the
world targets the bitcoin blockchain). Proof of work is what keeps the chain
secure from malicious actors.

6\. The ledger is public

Something like gold can't be audited. If I bought gold, I wouldn't want to
store that in my house. I'd need to trust a third party to store it for me.
Who's auditing that third party? Is my gold only mine on paper? Bitcoin is
auditable, gold is not (for the average person).

Cash is a depreciating asset -- at best, it loses 2% per year (likely much
more).

------
thess24
I've seen a few well know prop trading firms that are trading cryptocurrencies
as well (Jump, DRW, probably others) and there doesn't seem to be too much
talk of that. Goldman lends credibility and pretty much everyone has heard of
them, so I get this is bigger news, but to me the more interesting news is in
the trading firms.

Prop trading firms have no reason not to manipulate the cryptomarkets (it
seems legal) and have the capital and knowledge to do so. Or am I missing
something and manipulating these markets is illegal?

~~~
zmk_
It is not illegal as the market is not regulated right now. You can actually
see manipulation in BTC right now.

~~~
tim333
I think it might be more accurate to say the laws are not enforced now as the
markets are not regulated. That's not the same as legal. I'm not sure market
manipulation / insider trading laws are that specific as to which asset you
are manipulating as to make crypto ok. There's some talk now about Coinbase
insiders trading ahead on bitcoin cash and some debate as to whether they
could be done for that. I'd be curious how that plays out.

------
sedtrader
Going to need some rules and regulations. Last thing we need are big banks
overleveraging on crypto currencies for the excess return. When, not if, this
bubble bursts hopefully it doesn't take the whole economy down with it. The
whole financial market wants exposure to crypto at this point.

~~~
nullbyte
You can't regulate cyptocurrencies. That's the beauty of the whole thing.

~~~
pmlnr
Hell you can. For example, you can make exchanges illegal. Done.

------
pjc50
Guess the end of the run isn't in sight yet.

~~~
pjc50
Oops: since writing this post bitcoin has fallen by 25%. This is why I've not
gone anywhere near investing in it.

------
wslh
I am also thinking about building a cryptocurrency trading desk inside my
company, any thoughts about how to recruit in this field? I am mainly finding
it difficult to get the right personality traits since there are a lot of
shady and non-professional people.

~~~
mulmen
I honestly can't tell if this is a serious comment.

~~~
wslh
This is a very serious comment. I am wondering how to recruit professionals to
build a trading desk inside my company where we specialize in secure
cryptocurrency applications and are part of some venture funds but just don't
do day trading.

I am also wondering if your comment is serious of not because it doesn't add
anything to the discussion.

~~~
tim333
Maybe people who have traded currencies/stocks in bank jobs and done a bit of
crypto trading as a hobby? Or who have a CFA and have traded crypto. I'm not
sure there have been many/any professional crypto trading jobs as the thing is
so new but other trading experience would carry over to an extent. I've got
some stock experience and have recently started trading crypto a bit and there
are lots of oddities with how to do transactions and the like with crypto so
you'd want someone with some experience there.

------
halamadrid
1\. Goldman Sachs going to open trading desk 2. CBOE launches futures 3. CME
launches futures 4. Fed sells seized crypto coins from silk road 5. ...

The list of things that makes this as genuine as it can be goes on and on.

It's a repeat of the 2008-09 crash from subprime loans. Everyone knew what was
happening. But they just wanted to make as much money from the situation
before getting out. Of course Lehman Brothers didn't get out in time.

------
notyourday
This is going to be an end of the current generation of exchanges, and, most
likely, future generation of exchanges:

[https://news.ycombinator.com/item?id=15973721](https://news.ycombinator.com/item?id=15973721)

------
passiveincomelg
In [http://alternativlos.org/41/](http://alternativlos.org/41/) they say that
GS got big on front running and how all the old tricks work on this new,
unregulated market.

------
1undo
Welp pretty much knew this would happen all along. I was hoping crypto would
remain independent of banks, but nope. Not long before big banks take over
crypto exchanges, develop dark pools, and manipulate it. Not much we can do
now

~~~
defo_nonconvex
Isn't Coinbase a dark pool? Off-chain transactions seem like order
internalization to me...

------
elephant_burger
It's interesting that nobody was screaming bubble and denigrating the price of
gold after it kept rising after the GFC. [https://goldprice.org/gold-price-
chart.html](https://goldprice.org/gold-price-chart.html)

~~~
zenlikethat
Gold 2008 - 2017: ~100% increase

Gold 2016 - 2017: almost no change

BTC 2010 - 2017: ~22499899% increase

BTC 2016 - 2017: ~1700% increase

One seems a bit more bubbly than the other don't you think?

------
perseusprime11
The guys who run these trading desks make like $5m-$10m per year. I wonder how
Goldman plans to compensate the guys running the crypto desk.

------
knieveltech
Of course they are, and why wouldn't they be? Goldman's entire business model
is based on raking dumb investment strategies.

------
noddy1
haha. Excellent.

Previous crashes = bankers dunking on retail investor rubes

Coming cryptoocurrency crash = nerdboi investor rubes dunking on bankers

Buy my pretties! Buy!

------
korbonits
If Goldman is doing it... maybe I should finally buy some BitCoin...

~~~
freeflight
If Goldman is doing it publicly, then you are already too late to the party.

~~~
toomanybeersies
To be fair, people have been saying that you're too late to the bitcoin party
since around 2013.

------
MadSudaca
There's a cryptocurrency called RaiBlocks that is working to be the best at
transfer of value. The protocol uses new cryptocurrency concepts evolved over
the years and I believe it can be quite revolutionary. In my opinion, bitcoin
is one of the worst cryptocurrencies at the moment, and to be honest I hope to
see it die soon.

Create a wallet using this site
[https://raiwallet.com/](https://raiwallet.com/), paste your address here and
I'll send you some raiblocks. The transaction time is about ~5 seconds and
there are no fees, so it's almost on par with a credit card, except you don't
depend on a bank or a credit card company.

Also, check out this link to google trends:
[https://trends.google.com/trends/explore?q=raiblocks](https://trends.google.com/trends/explore?q=raiblocks).
You'll see that the country with the most interest in raiblocks is Venezuela,
which coincidentally is going through hyperinflation. Bitcoins used to be
quite big there as a way of avoiding the loss in value of the national
currency, but as the country became poorer and the cryptocurrency networks
more congested, the fees became prohibitively expensive. Raiblocks could be a
good alternative to cash, or at least help some of the most technically savvy
people.

What I'm aiming at is, give the technology a chance. As the top poster says,
it might be a big bubble, but it might also be a revolutionary technology (or
both, just like the internet).

EDIT: Sorry folks I have to go so you'll have to wait until I check my account
again. Still I'll do my best to keep sending as long as people keep asking.

~~~
seanwilson
Thanks, I'll give it a go as well if you don't mind. :)
xrb_1sy8ewzsee7zxu4bz1ka7pqjt7uwdmd5ng5xu33ghzxts5fxyt3hzcgjqryu

> Raiblocks could be a good alternative to cash, or at least help some of the
> most technically savvy people.

Do you see any downsides? The only technical one I'm seeing is that the
protocol isn't battle tested (e.g. can it cope with being spammed like crazy
given it has zero fees?).

~~~
MadSudaca
Yup, the protocol isn't battle tested. Some stress tests have been performed,
but that's nothing compared to actual real-world use. As in any experimental
technology there are several premises that are assumed, hopefully, with good
reason, and if any of these fail it might be fatal. For raiblocks, it might be
vulnerable to certain types of sophisticated attacks (check the paper for more
info), and more info must be gathered. Also, the cryptocurrency isn't
anonymous, packets are sent unencrypted via UDP.

------
junkscience2017
BTC to $100k followed a drop to $80 and a public bailout

happy trading

~~~
idibidiart
And SEC goes after shady figures, not Goldman

------
idibidiart
Ok, look, it's a pyramid scheme no different than the stock market.... coke
heads at Goldman love this sh_t

------
aviv
So much for the promised currency / store-of-value that can't be manipulated
by banks / governments.

~~~
tootie
Isn't it mostly being manipulated by drug traffickers and money launderers
right now?

~~~
nullbyte
Wow, you're behind the curve, aren't you.

~~~
bsaul
Hm, what are bitcoins used for today ? I was still seriously under the
impression that there still wasn’t any serious use, except for illegal
activities... ( i’m not talking about eth which found an interesting usages
with ICOs, just bitcoins).

Edit : i’m also not asking for the list of legal shops that accept bitcoins,
i’m wondering about the percentage of officialy legal bitcoin transactions vs
the rest.

~~~
CrystalLangUser
Why do you think a _public_ ledger will be the medium for illegal
transactions?

How exactly do you plan on converting fiat to btc and then paying for
transactions? Every step of the way is going to be on the. public. ledger.
Forever. Linked to each step along the way. C'mon.

BTC is for people who don't want to be at the whim of banks or paypal. Or it
was anyways, until the fees became too high and the transaction times became
too long.

The serious use is with other coins like ETH (powering smart contracts, dApps)
and BCH (hard fork of bitcoin from August that doesn't have BTC's current
issues). Or altcoins. Raiblocks and XRP have extremely quick confirmation
times.

All of which have a _public_ ledger by the way. If you want to do illegal
activities, you'd probably want to use Monero or NAV, but first you'd have to
prove either are truly private.

~~~
bsaul
Aren’t there any way to hide your transaction by funneling them through
exchange platforms ?

Plus, if everything was public an easily traceable to a person then why are
exchange platforms hacked ? You could easily identify the authors of the hack
and sue them... i guess there isn’t enough regulation to make tracing the
bitcoin a big enough legal threat. Or that tracing to the wallet without being
able to identify the owner is useless. Which means it’s still good for other
illegal activities.

