
Ethereum Plunges 20% - SREinSF
http://www.cnbc.com/2017/07/16/ethereum-briefly-crashes-20-percent-to-7-week-low-amid-worries-about-rival-bitcoins-future.html
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jgord
I think ETH is being pulled down by association with BTC, in the minds of
investors.

Bitcoin growth is being stifled by those who will do anything to prevent an
increase of blocksize, up from 1MB. We could turn 4MB max blocksize on next
week, but the core devs have delayed this simple change for 2.5 years.

When you have 20MB of transactions in the mempool waiting for the next 1MB
block, its like 2000 people waiting for a single train carriage .. fees go up
and transactions take too long to process. This sets up a low usage
equilibrium - people wont use the system as a currency when it takes 3$ to
send $300, eventually they give up and go back to paypal, banks or try an
altcoin [ Ethereum, Litecoin ]

This change is not a deep complex engineering issue - you _could_ get 10x to
30x transaction volume and several years of rapid user growth on the same
linear blockchain by increasing the blocksize on a fixed schedule, well before
you hit real architectural scaling issues.

After endless debate we now have all out chaos and civil war in the community,
with SegWit/LightningNetwork/blockstream battling against 'BigBlockers',
rather than a clear upgrade roadmap all parties can live with.

Politics and greed - and the lack of a benevolent dictator in the core dev
team who will make hard engineering decisions - seem to prevent us from having
good things, just as Bitcoin is poised to go mainstream.

~~~
chii
i keep hearing that the blocksize can be increased without difficulty. But why
isn't it? What are the problems you're not saying about doing this?

~~~
gravypod
Both versions of BitCoin would exist concurrently if this change was made. One
network would be using 1 MB block sizes (the people who didn't take the update
from the devs) and the other group using 4 MB block sizes (the people who
updated their wallet/mining rigs).

Unfortunately "most" users want larger block sizes to decrease wait times
while "most" miners want block sizes to stay at 1 MB so difficulty is doesn't
increase, all their ASICs still work, and so they get more money (IIRC people
can pay for fast-lane processing).

If the devs pushed the 4 MB change the miners wouldn't move and because of
this no transactions on the 4 MB bitcoin would actually work. If the devs
don't push 4 MB then all of the users leave to another coin and bitcoin drops
in value.

Talk about rock and a hard place.

~~~
jgord
I think miners acting in their self interest would realize that a much larger
number of transactions with smaller fees would result in a larger total fees
profit per block solve.

Almost all of their resources would be the same - the vast majority of their
electricity bill is spent solving the block hash compute problem, the
resources to actually process the transactions and send them are small
compared to that.

The basic logic holds, that you cant make money if nobody uses Bitcoin.

~~~
Fej
But you _can_ make money if nobody uses Bitcoin. Such is speculation.

~~~
jgord
for a while at least, yes : ]

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sna1l
My random thoughts on the reason for the plunge:

1) Bitcoin August 1st uncertainty is leading to vast capital outflows from
crypto in general.

2) Capital outflows are more significant due to so much dumb money coming in
from people who just came in for a fast buck and are now scared.

Obviously nobody knows for sure, but fun to speculate. :)

~~~
nodesocket
Aren't you forgetting Alphabay being shut down and the founder committing
suicide? I am certain lots of people had crypto coins float in Alphabay, which
is now just lost. Can't be sold, just lost into the air.

~~~
c0nducktr
Are you sure the coins in Alphabay are lost? Couldn't the government just sell
them off like they did with the coins from Silk Road?

~~~
nodesocket
I believe there is a difference between coin seized from the personal accounts
and general Alphabay account. Also, this assumes the government has private
keys and access.

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RantyDave
Asset backed by pure hype crashes. Good numbers on tulip futures though.

------
yclopediaen
Time to buy.

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rosstex
If Bitcoin splits, what happens to altcoins?

~~~
topmonk
If you are talking about independent alt-coins, such as Ethereum and Litecoin,
they are completely separate from Bitcoin, and this would have no effect.

If you are talking about tokens on the Bitcoin network, such as MaidSafeCoin,
they would also split.

