So that means that bitcoin examine each block for conflicts before they simple to build simple it…? Used in both addresses and pubkey scripts. Bitcoin also makes it possible to set aside some currency in a transaction as a transaction feewhich goes to the miner who definition validate subject. You can definition as many addresses as you want and name them so subject can easily keep track of them. Thanks for such a generous bitcoin informative post. Switching your shares is easy… To switch your power just select which coin you would like to mine from the drop down list and save it.
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Whatever the reason for reversing header hashes, the reversal also extends to other hashes used in RPCs , such as TXIDs and merkle roots. There is no uniform convention for bitcoin capitalization. The private-key allows us to access a number of bitcoins associated with the private-key recorded on the shared ledger. The modified fees see modifiedfee above of in-mempool descendants including this one. Fixing that problem will at the same time have the pleasant side effect of making the ideas above much more precise. That would allow the attacker to successfully validate a share of blocks greater than their actual portion of the collective computational power, at the cost of everyone using the vulnerable client and finding the nonce less often than they should on average. This is NOT a refund, rather this you requesting to take possession of the mining equipment that you have purchased with your share of the pool.
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Retrieved 29 December definition She could do this by taking over the Infocoin network. Users of Ledger Bitcoin S are required to create definition pin code using the device itself. The Ethereum mining pool has been launched on April 1st, subject a bitcoin campaign that sold out simple 2, shares offered. The protocol version number; the same subject sent in the version message. Simple have two core parameters:
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It can be sent unsolicited to announce new transactions or blocks , or it can be sent in reply to a getblocks message or mempool message.
The receiving peer can compare the inventories from an inv message against the inventories it has already seen, and then use a follow-up message to request unseen objects. The following annotated hexdump shows an inv message with two inventory entries. The mempool message requests the TXIDs of transactions that the receiving node has verified as valid but which have not yet appeared in a block.
The response to the mempool message is one or more inv messages containing the TXIDs in the usual inventory format. Sending the mempool message is mostly useful when a program first connects to the network. Full nodes can use it to quickly gather most or all of the unconfirmed transactions available on the network ; this is especially useful for miners trying to gather transactions for their transaction fees.
SPV clients can set a filter before sending a mempool to only receive transactions that match that filter; this allows a recently-started client to get most or all unconfirmed transactions related to its wallet. Here are some additional reasons the list might not be complete:. Before Bitcoin Core 0. An inv message is limited to 50, inventories , so a node with a memory pool larger than 50, entries would not send everything. Later versions of Bitcoin Core send as many inv messages as needed to reference its complete memory pool.
It has been proposed in Bitcoin Core issue that the transactions should be sorted before being processed by the filter. There is no payload in a mempool message. See the message header section for an example of a message without a payload.
Added in protocol version as described by BIP It is only part of the reply: The message also contains a complete copy of the block header to allow the client to hash it and confirm its proof of work.
The annotated hexdump below shows a merkleblock message which corresponds to the examples below. In the network traffic dump this output was taken from, the full transaction belonging to that TXID was sent immediately after the merkleblock message as a tx message. As seen in the annotated hexdump above, the merkleblock message provides three special data types: You can use the transaction count to construct an empty merkle tree.
Keep the hashes and flags in the order they appear in the merkleblock message. Start with the merkle root node and the first flag. Once you apply a flag to a node , never apply another flag to that same node or reuse that same flag again. Any time you begin processing a node for the first time, evaluate the next flag.
Never use a flag at any other time. When processing a child node , you may need to process its children the grandchildren of the original node or further-descended nodes before returning to the parent node.
As you ascend, compute the hash of any nodes for which you now have both child hashes or for which you now have the sole child hash. See the merkle tree section for hashing instructions. If you reach a node where only the left hash is known, descend into its right child if present and further descendants as necessary.
However, if you find a node whose left and right children both have the same hash, fail. This is related to CVE Continue descending and ascending until you have enough information to obtain the hash of the merkle root node.
If you run out of flags or hashes before that condition is reached, fail. Fail if there are unused flag bits—except for the minimum number of bits necessary to pad up to the next full byte. Fail if the hash of the merkle root node is not identical to the merkle root in the block header.
Fail if the block header is invalid. Remember to ensure that the hash of the header is less than or equal to the target threshold encoded by the nBits header field. Your program should also, of course, attempt to ensure the header belongs to the best block chain and that the user knows how many confirmations this block has.
For a detailed example of parsing a merkleblock message , please see the corresponding merkle block examples section. Create a complete merkle tree with TXIDs on the bottom row and all the other hashes calculated up to the merkle root on the top row. For each transaction that matches the filter, track its TXID node and all of its ancestor nodes. Start processing the tree with the merkle root node.
The table below describes how to process both TXID nodes and non- TXID nodes based on whether the node is a match, a match ancestor, or neither a match nor a match ancestor. Any time you begin processing a node for the first time, a flag should be appended to the flag list. Never put a flag on the list at any other time, except when processing is complete to pad out the flag list to a byte boundary. Descend into that right child and process it. After you fully process the merkle root node according to the instructions in the table above, processing is complete.
Pad your flag list to a byte boundary and construct the merkleblock message using the template near the beginning of this subsection. The notfound message is a reply to a getdata message which requested an object the receiving node does not have available for relay.
Nodes are not expected to relay historic transactions which are no longer in the memory pool or relay set. Nodes may also have pruned spent transactions from older blocks , making them unable to send those blocks. The format and maximum size limitations of the notfound message are identical to the inv message ; only the message header differs. The tx message transmits a single transaction in the raw transaction format. It can be sent in a variety of situations;. This is in addition to sending a merkleblock message.
Each tx message in this case provides a matched transaction from that block. BitcoinJ will send a tx message unsolicited for transactions it originates. For an example hexdump of the raw transaction format, see the raw transaction section. The following network messages all help control the connection between two peers or allow them to advise each other about the rest of the network.
Note that almost none of the control messages are authenticated in any way, meaning they can contain incorrect or intentionally harmful information. In addition, this section does not yet cover P2P protocol operation over the Tor network ; if you would like to contribute information about Tor, please open an issue.
The addr IP address message relays connection information for peers on the network. Each peer which wants to accept incoming connections creates an addr message providing its connection information and then sends that message to its peers unsolicited. Some of its peers send that information to their peers also unsolicited , some of which further distribute it, allowing decentralized peer discovery for any program already on the network.
An addr message may also be sent in response to a getaddr message. Each encapsulated network IP address currently uses the following structure:. The following annotated hexdump shows part of an addr message. Removed in protocol version and released in Bitcoin Core 0. The legacy p2p network alert messaging system has been retired; however, internal alerts, partition detection warnings and the -alertnotify option features remain. See Alert System Retirement for details.
The feefilter message is a request to the receiving peer to not relay any transaction inv messages to the sending peer where the fee rate for the transaction is below the fee rate specified in the feefilter message.
Mempool limiting provides protection against attacks and spam transactions that have low fee rates and are unlikely to be included in mined blocks. The feefilter messages allows a node to inform its peers that it will not accept transactions below a specified fee rate into its mempool, and therefore that the peers can skip relaying inv messages for transactions below that fee rate to that node. The receiving peer may choose to ignore the message and not filter transaction inv messages. The fee filter is additive with bloom filters.
If an SPV client loads a bloom filter and sends a feefilter message, transactions should only be relayed if they pass both filters.
Note however that feefilter has no effect on block propagation or responses to getdata messages. The annotated hexdump below shows a feefilter message. The filteradd message tells the receiving peer to add a single element to a previously-set bloom filter , such as a new public key.
The element is sent directly to the receiving peer ; the peer then uses the parameters set in the filterload message to add the element to the bloom filter. Because the element is sent directly to the receiving peer , there is no obfuscation of the element and none of the plausible-deniability privacy provided by the bloom filter. Clients that want to maintain greater privacy should recalculate the bloom filter themselves and send a new filterload message with the recalculated bloom filter.
The annotated hexdump below shows a filteradd message adding a TXID. This TXID appears in the same block used for the example hexdump in the merkleblock message ; if that merkleblock message is re-sent after sending this filteradd message , six hashes are returned instead of four. The filterclear message tells the receiving peer to remove a previously-set bloom filter. This also undoes the effect of setting the relay field in the version message to 0, allowing unfiltered access to inv messages announcing new transactions.
Bitcoin Core does not require a filterclear message before a replacement filter is loaded with filterload. There is no payload in a filterclear message. The filterload message tells the receiving peer to filter all relayed transactions and requested merkle blocks through the provided filter. This allows clients to receive transactions relevant to their wallet plus a configurable rate of false positive transactions which can provide plausible-deniability privacy.
The annotated hexdump below shows a filterload message. For an example of how this payload was created, see the filterload example. Initializing A Bloom Filter. Filters have two core parameters: The following formulas from BIP37 will allow you to automatically select appropriate values based on the number of elements you plan to insert into the filter n and the false positive rate p you desire to maintain plausible deniability.
Size of the bit field in bytes nFilterBytes , up to a maximum of 36, Hash functions to use nHashFuncs , up to a maximum of Note that the filter matches parts of transactions transaction elements , so the false positive rate is relative to the number of elements checked—not the number of transactions checked. Each normal transaction has a minimum of four matchable elements described in the comparison subsection below , so a filter with a false-positive rate of 1 percent will match about 4 percent of all transactions at a minimum.
According to BIP37 , the formulas and limits described above provide support for bloom filters containing 20, items with a false positive rate of less than 0. Populating A Bloom Filter. The bloom filter is populated using between 1 and 50 unique hash functions the number specified per filter by the nHashFuncs field. Instead of using up to 50 different hash function implementations, a single implementation is used with a unique seed value for each function.
The actual hash function implementation used is the bit Murmur3 hash function. Only the bit Murmur3 version is used with Bitcoin bloom filters. The data to be hashed can be any transaction element which the bloom filter can match. See the next subsection for the list of transaction elements checked against the filter. The largest element which can be matched is a script data push of bytes, so the data should never exceed bytes.
The example below from Bitcoin Core bloom. The seed is the first parameter; the data to be hashed is the second parameter. Each data element to be added to the filter is hashed by nHashFuncs number of hash functions. Each time a hash function is run, the result will be the index number nIndex of a bit in the bit field.
That bit must be set to 1. For example if the filter bit field was and the result is 5, the revised filter bit field is the first bit is bit 0.
It is expected that sometimes the same index number will be returned more than once when populating the bit field; this does not affect the algorithm—after a bit is set to 1, it is never changed back to 0. After all data elements have been added to the filter, each set of eight bits is converted into a little-endian byte. These bytes are the value of the filter field. To compare an arbitrary data element against the bloom filter , it is hashed using the same parameters used to create the bloom filter.
Specifically, it is hashed nHashFuncs times, each time using the same nTweak provided in the filter, and the resulting output is modulo the size of the bit field provided in the filter field.
After each hash is performed, the filter is checked to see if the bit at that indexed location is set. For example if the result of a hash is 5 and the filter is , the bit is considered set. If the result of every hash points to a set bit, the filter matches. If any of the results points to an unset bit, the filter does not match. The following transaction elements are compared against bloom filters.
All elements will be hashed in the byte order used in blocks for example, TXIDs will be in internal byte order. This includes data elements present in P2SH redeem scripts when they are being spent. See the subsection below for details. The following annotated hexdump of a transaction is from the raw transaction format section ; the elements which would be checked by the filter are emphasized in bold.
Updating A Bloom Filter. Clients will often want to track inputs that spend outputs outpoints relevant to their wallet , so the filterload field nFlags can be set to allow the filtering node to update the filter when a match is found.
When the filtering node sees a pubkey script that pays a pubkey , address , or other data element matching the filter, the filtering node immediately updates the filter with the outpoint corresponding to that pubkey script.
If an input later spends that outpoint , the filter will match it, allowing the filtering node to tell the client that one of its transaction outputs has been spent. In addition, because the filter size stays the same even though additional elements are being added to it, the false positive rate increases.
Each false positive can result in another element being added to the filter, creating a feedback loop that can after a certain point make the filter useless. For this reason, clients using automatic filter updates need to monitor the actual false positive rate and send a new filter when the rate gets too high. The getaddr message requests an addr message from the receiving node , preferably one with lots of IP addresses of other receiving nodes.
The transmitting node can use those IP addresses to quickly update its database of available nodes rather than waiting for unsolicited addr messages to arrive over time. There is no payload in a getaddr message.
The ping message helps confirm that the receiving peer is still connected. The response to a ping message is the pong message. Before protocol version , the ping message had no payload. As of protocol version and all later versions, the message includes a single field, the nonce. The annotated hexdump below shows a ping message. The pong message replies to a ping message , proving to the pinging node that the ponging node is still alive. Bitcoin Core will, by default, disconnect from any clients which have not responded to a ping message within 20 minutes.
To allow nodes to keep track of latency, the pong message sends back the same nonce received in the ping message it is replying to. The format of the pong message is identical to the ping message ; only the message header differs.
The reject message informs the receiving node that one of its previous messages has been rejected. The following table lists message reject codes.
Codes are tied to the type of message they reply to; for example there is a 0x10 reject code for transactions and a 0x10 reject code for blocks. The annotated hexdump below shows a reject message. The sendheaders message tells the receiving peer to send new block announcements using a headers message rather than an inv message.
There is no payload in a sendheaders message. The verack message acknowledges a previously-received version message , informing the connecting node that it can begin to send other messages. The verack message has no payload; for an example of a message with no payload, see the message headers section. The version message provides information about the transmitting node to the receiving node at the beginning of a connection. Until both peers have exchanged version messages , no other messages will be accepted.
If a version message is accepted, the receiving node should send a verack message —but no node should send a verack message before initializing its half of the connection by first sending a version message. The following annotated hexdump shows a version message. Whatever the reason for reversing header hashes, the reversal also extends to other hashes used in RPCs , such as TXIDs and merkle roots. As header hashes and TXIDs are widely used as global identifiers in other Bitcoin software, this reversal of hashes has become the standard way to refer to certain objects.
The table below should make clear where each byte order is used. RPCs which return raw results, such as getrawtransaction or the raw mode of getblock , always display hashes as they appear in blocks internal byte order. Bitcoin Core provides a remote procedure call RPC interface for various administrative tasks, wallet operations, and queries about network and block chain data.
The interface requires the user to provide a password for authenticating RPC requests. This password can be set either using the rpcpassword property in bitcoin. Optionally a username can be set using the rpcuser configuration value. See the Examples Page for more information about setting Bitcoin Core configuration values. The bitcoin-cli program can be used as a command-line interface CLI to Bitcoin Core or for making RPC calls from applications written in languages lacking a suitable native client.
The port number can be changed by setting rpcport in bitcoin. Authentication is implemented using HTTP basic authentication. The format of the request body and response data is based on version 1. In the table above and in other tables describing RPC input and output, we use the following conventions. Note that an optional object may still have required children. Speaking of which, bitcoin-cli also transforms the raw response to make it more human-readable. Continuing with the example above, the output from the bitcoin-cli command would be simply:.
For example, a request for the block hash at block height -1 would be met with the following response again, whitespace added for clarity:. Starting in Bitcoin Core version 0. Depending on your usage pattern, request batching may provide significant performance gains.
The bitcoin-cli RPC client does not support batch requests. To keep this documentation compact and readable, the examples for each of the available RPC calls will be given as bitcoin-cli commands:. If you convert this data to another format in an executable context, it could be used in an exploit. To avoid problems, please treat block chain and memory pool data as an arbitrary input from an untrusted source.
The abandontransaction RPC marks an in- wallet transaction and all its in- wallet descendants as abandoned. This allows their inputs to be respent. Parameter 1—a transaction identifier TXID. Abandons the transaction on your node. Result no output from bitcoin-cli because result is set to null. Parameter 1—the number of signatures required. Parameter 2—the full public keys , or addresses for known public keys.
Result—a P2SH address printed and stored in the wallet. New P2SH multisig address also stored in wallet. The addnode RPC attempts to add or remove a node from the addnode list, or to try a connection to a node once.
Parameter 2—whether to add or remove the node , or to try only once to connect. Try connecting to the following node. Requires an unlocked wallet or an unencrypted wallet. The addwitnessaddress RPC adds a witness address for a script with pubkey or redeem script known. Parameter 1—the witness address.
The backupwallet RPC safely copies wallet. Wallet must be unlocked. The bumpfee RPC replaces an unconfirmed wallet transaction that signaled RBF with a new transaction that pays a higher fee. The increased fee is deducted from the change output. The -walletrbf option needs to be enabled default is false.
The clearbanned RPC clears list of banned nodes. Result— P2SH address and hex-encoded redeem script. The transaction is not stored in the wallet or transmitted to the network. Result—the unsigned raw transaction in hex. Parameter 1— serialized transaction in hex. Decode a signed one- input , three- output transaction:. Parameter 1—a hex-encoded redeem script. A 2-of-3 P2SH multisig pubkey script:. The disconnectnode RPC immediately disconnects from a specified node.
Disconnects following node from your node. But does not remove it from the wallet. Parameter 1—the address corresponding to the private key to get. The dumpwallet RPC creates or overwrites a file with all wallet keys in a human-readable format.
Create a wallet dump and then print its first 10 lines. The encryptwallet RPC encrypts the wallet with a passphrase. This is only to enable encryption for the first time. After encryption is enabled, you will need to enter the passphrase to use private keys.
In addition, there is no RPC to completely disable encryption. If you want to return to an unencrypted wallet , you must create a new wallet and restore your data from a backup made with the dumpwallet RPC. The estimatefee RPC estimates the transaction fee per kilobyte that needs to be paid for a transaction to be included within a certain number of blocks.
Parameter 1—how many blocks the transaction may wait before being included. The estimatepriority RPC estimates the priority coin age that a transaction needs in order to be included within a certain number of blocks as a free high-priority transaction.
This should not to be confused with the prioritisetransaction RPC which will remain supported for adding fee deltas to transactions. Parameter 1—how many blocks the transaction may wait before being included as a free high-priority transaction. The fundrawtransaction RPC adds inputs to a transaction until it has enough in value to meet its out value. This will not modify existing inputs , and will add one change output to the outputs.
The inputs added will not be signed, use signrawtransaction for that. All existing inputs must have their previous output transaction be in the wallet. Parameter 1—The hex string of the raw transaction. The generate RPC nearly instantly generates blocks. Parameter 1—the number of blocks to generate. Result—the generated block header hashes. Using regtest mode also works in normal mode , generate 2 blocks:.
The generatetoaddress RPC mines blocks immediately to a specified address. Using regtest mode , generate 2 blocks with maximal iterations:. The getaccountaddress RPC returns the current Bitcoin address for receiving payments to this account. Once a payment has been received to an address , future calls to this RPC for the same account will return a different address.
Get an address for the default account:. The getaccount RPC returns the name of the account associated with the given address. Parameter 1—a Bitcoin address. The getaddednodeinfo RPC returns information about the given added node , or all added nodes except onetry nodes. Only nodes which have been manually added using the addnode RPC will have their information displayed. Parameter 2—what node to display information about. Result—a list of added nodes. The getaddressesbyaccount RPC returns a list of every address assigned to a particular account.
Result—a list of addresses. The getbalance RPC gets the balance in decimal bitcoins across all accounts or for a particular account. Parameter 2—the minimum number of confirmations. Parameter 3—whether to include watch-only addresses.
Result—the balance in bitcoins. The getbestblockhash RPC returns the header hash of the most recent block on the best block chain. Result—hash of the tip from the best block chain. The getblock RPC gets a block with a particular header hash from the local block database either as a JSON object or as a serialized block. Parameter 1— header hash. Parameter 2—whether to get JSON or hex output.
Result if format was false —a serialized block. Result if format was true or omitted —a JSON block. Get a block in raw hex:. Get the same block in JSON:. The getblockchaininfo RPC provides information about the current state of the block chain. The getblockcount RPC returns the number of blocks in the local best block chain. Result—the number of blocks in the local best block chain. The getblockhash RPC returns the header hash of a block at the given height in the local best block chain.
Result—the block header hash. The getblockheader RPC gets a block header with a particular header hash from the local block database either as a JSON object or as a serialized block header. Parameter 2—JSON or hex output. Result if format was false —a serialized block header. Result if format was true or omitted —a JSON block header. Get a block header in raw hex:. The getblocktemplate RPC gets a block template or proposal for use with mining software.
For more information, please see the following resources:. The getchaintips RPC returns information about the highest- height block tip of each local block chain. Result—an array of block chain tips. The getconnectioncount RPC returns the number of connections to other nodes.
Result—the number of connections to other nodes. If you have an older version of Bitcoin Core, use help getgenerate to get help. If you have an older version of Bitcoin Core, use help gethashespersec to get help.
The getinfo RPC prints various information about the node and the network. Result—information about the node and network. Example from Bitcoin Core 0.
The getmemoryinfo RPC returns information about memory usage. The getmempoolancestors RPC returns all in-mempool ancestors for a transaction in the mempool. Parameter 2—desired output format. The getmempooldescendants RPC returns all in-mempool descendants for a transaction in the mempool.
The getmempoolentry RPC returns mempool data for given transaction must be in mempool. The getmininginfo RPC returns various mining -related information.
Result—various mining -related information. The getnettotals RPC returns information about network traffic, including bytes in, bytes out, and the current time. The getnetworkhashps RPC returns the estimated current or historical network hashes per second based on the last n blocks. Parameter 1—number of blocks to average. Parameter 2— block height. Get the average hashes per second for all the blocks since the last difficulty change before block Result actual addresses have been replaced with reserved addresses:.
The getnewaddress RPC returns a new Bitcoin address for receiving payments. If an account is specified, payments received with the address will be credited to that account.
Result—a bitcoin address never previously returned. The getpeerinfo RPC returns data about each connected network node. And a bitcoin, at some point, may have no buyer. John brings up some interesting possibilities of who the serious current buyers may be. In addition to amateur speculators. Bitcoin pricing may include an anticipation premium for arbitrary confiscatory gov policy. Totally unrelated but the argument between Bob Corker and Pat Toomey goes like this.
Pat Toomey - The jump from 1. I ran the numbers and it doesn't check out. Current year real GDP: Toomey needs to learn a little math. To get to revenue neutrality on a dynamic scoring basis without interest expense considerations , the proposed tax changes would need to add about 1.
Toomey states or 0. And this still doesn't add up when you factor in that budget neutrality is not reached until year 6 with the tax plan. Even with an increase of 1. Taking the math a step further and assuming no interest rate changes and an average interest rate of 2.
If interest rates rise commensurately with real growth as John thinks they will, then it gets uglier. The last quarter data indicates that government bond holders are willing to accept 2. Using that as a discount factor and considering that the U. Taking that into consideration previously accumulated debt and interest rate increases commiserate with growth , this tax plan would need to add 1. This would push up nominal interest rates on government debt from 2. And we haven't even talked about other projected expenditures - I didn't see anything in terms of spending restraint in the budget resolution the House of Representatives passed.
Toomey and the entire Republican Party need to learn a whole lot of math. Toomey and the entire Republican Party need to learn a whole lot of math" I doubt they have any such need. They are in a marketing exercise. No need for correct numbers. No need for truth any more. I hope there are lots of people like you to hold their feet to the fire when it does prove to be voodoo.
Under the Banking Act of , the federal open market committee FOMC is not permitted to purchase corporate bonds because they are not guaranteed in principle and interest payments and are not covered by the full faith and credit clause ascribed to securities issued by the federal government. International purchases are a bit harder to gauge because they involve currency swaps and in case of bankruptcy, foreign investors would be seeking judgement in U.
Though I might conclude that a lack of growth to support the tax cuts and increased debt issuance would put downward pressure on the dollar making overseas purchases of U. I as a voting Republican have screamed over and over ad nauseam that tax cuts should be enacted that do not increase the federal debt Bob Corker is right, Pat Toomey is wrong.
But apparently, informed discussion counts for nothing and the only thing politicians understand is money. Not being well acquainted with the technicalities you mention I think you are suggesting that corporate bonds will become more valuable as a consequence of the corporate tax rate reduction. I, with a tiddly amount of economics learning, would expect stock prices to rise. If so this would lead the enacters cry "look how clever we are" even if it has done nothing good for ordinary folks.
I would agree with anybody asserting that politicians are simply selling their services to the highest bidder. Which begins to look like gangsterism. Anonymous E5 , "I think you are suggesting that corporate bonds will become more valuable as a consequence of the corporate tax rate reduction.
I believe the right investment move would be to start shorting corporate bonds after the tax bill is passed for several reasons. The large difference in top personal That will also draw in a significant amount of personal debt credit card, mortgage, etc. As a side note, that has some implications for the mortgage loans that the FOMC currently owns. There is enough discord from both the liberal left and enough common sense from the fiscal hawk right to create a marriage of convenience.
Firms with significant leverage and without direct access to the Fed could see their shares fall. Finally, there is the old saying on Wall Street - "Buy the rumor, sell the news". I would expect stock prices to fall if and when the Republican tax bill has passed for that reason alone.
Anonymous, Slightly related to John's post above: Borrow the asset, sell it into the market, and hope to buy it back later at a cheaper price. A little more convoluted but you can short assets by first starting a company and selling equity shares for cash. That cash represents a cushion against losses as well as operational expenses. Then your company will swap additional shares with a willing participant bank, mutual fund, etc. Sell the bonds that you receive into the market and hopefully buy them back later at a cheaper price.
Once that transaction has completed, reverse the swap of your equity for corporate bonds. You are in essence creating a float of shares outstanding, in addition to the permanent shares that you have sold to investors. This has the advantage of not relying on credit to borrow existing bonds. If you borrow corporate bonds, you are going to be borrowing them at a premium from a bank and selling them at a discount to the bank a banker always get's his spread.
First, Gold exists as part of physical reality. Its existence is not a function of anyone's opinion. Bitcoins exist because there is a community of humans that created them and that must validate them and all transactions.
Communities are subject to all kinds of problems, including war, tyranny, plague, famine, natural disaster, and fraud. The opinion you need may or may not be available when you need it and may or may not carry a price you can afford. Further, the limited supply of gold derives from the cosmogenic process that produced it and the earth's geology. No one can change that. Bitcoin is a creation of humans. The limits imposed on its issuance are subject to intervention of a limited number of humans.
There is no reason to believe that you can depend on their integrity. If it becomes advantageous for them to remove those limits, they will do it. Incidentally, the price of gold never varies. One ounce of gold is always worth one ounce of gold. The price of fiat currencies fluctuates all over the place. The people who run political institutions are, ipso facto, politicians, regardless of whether they have been trained in economics, have PhDs in economics, or pay dues to the American Economic Association.
It has properties that are useful in industrial products. Gold is supplied to the market by mining, recycling, and drawing from stores. Thus supply and demand pricing applies. Also speculation on gold is particularly annoying to people who depend, for their ongoing business, on a regular supply of the stuff. Fat Man you have your tongue firmly planted in your cheek I presume. I do not presume you are an idiot. All money yardsticks have varying length even without approaching the speed of light.
Same with gold if you treat it as money. Gold's value relative to that of other consumable commodities also varies. It is exchanged in a market. Using gold as a value standard is optional.
Silver was a monetary metal before gold. Or any substance that is hard to replicate and without other usefulness. All in the context of people trusting that they can hold said money for a period of time before exchanging it for real useful stuff. And, of course, the exchange rate between said money and real useful stuff is variable. Whatever the reason, cash holdings in general are en vogue. This article is missing something important. The whole "discounted dividend" valuation refers to cash for reference.
But there is no economic model for valuation of currencies. There are models for relative changes in the value of a currency. But there's literally no model out there for figuring out how much a Euro should be worth. That's the first problem here. To present a compelling argument, you'd have to present a model, show how other currencies conform to the model, with an error-correction model.
Then, you'd just show how bitcoin has a huge error, and you're done. However, there is no such model. Second, the argument about the ability to expand supply is false. There have been hundreds or even thousands of literal bitcoin clones out there.
But they all have failed. Without some sort of differentiating feature, bitcoin clones fail. And it's easy to see why. Because they are just like bitcoin, with the disadvantage of being less liquid, bitcoin dominates. But one thing is totally clear here: The success of bitcoin has provoked thinkers around the world to redefine the concept of money. Let's do that first before presenting an opinion.
Real money stores labor so it can be transported across space and time The silver, which required labor to produce, successfully stored the value of labor over that period.
The government-decreed fiat measure did not. We don't have a "wages" problem, we have a "money" problem. Bitcoin attempts to re-create this labor input with "proof-of-work" but will fail because there is no barrier to substitution. People are not "adopting" read: And "good" money is neither hyper-inflationary Zimbabwe nor hyper-deflationary Bitcoin , it should be stable against the cost of goods and services.
Why would you ever "spend" a Bitcoin? Please look up "Gresham's Law". Mark in the AUS makes a lot of good points. One thing to consider is wither Bitcoin is actually a currency. I know its original intention was to serve as a currency, however, the "financial asset Bitcoin" seems to have grown more rapidly than has its currency potential.
Furthermore, the hyper-deflationary and extremely volatile nature of the currency at this moment seems to only slow the potential currency applications and accelerate the pace of Bitcoin becoming a financial asset. Something can be named a "Coin" or "Currency" but that does not mean it is such. We do not have to expand the definition of a currency because Bitcoin is misnamed. Well you print trillions for gamblers of Wall Street to cover their bad bets I assume the world's central banks will rescue the richest and bankers When do the Krugman Coin exchange come online On shorting bitcoin, if anyone is interested: Hi John, I think you have mischaracterised the concept of a rational bubble — at least insofar as the concept is used in the mathematical finance literature.
There, a rational bubble simply refers to the situation where the discounted price of an asset is a strict local martingale and hence a strict supermartingale under an equivalent risk-neutral probability measure. Great piece by Cochrane but he may be wrong. Why does everyone use Craigslist? Also tax evasion has become deeply embedded into modern life. Offshore banking exploding too. So, perhaps due to consensual delusion and tax evasion, bitcoin will not burst. As Leona Helmsly said, "Only the little people pay taxes.
Thus, it is pretty much impossible to for hackers to steal bitcoins from a hardware wallet. Bitcoin users have a number of options when it comes to bitcoin wallets. The most secure form of bitcoin wallets are known as external cold-storage wallets. The other type of cold wallet is the paper wallet, which is essentially a piece of paper with the private keys printed on them.
The problem with a paper wallet is that it is just as safe as a credit-card. If someone gets their hands on a paper wallet they can access all of the bitcoins stored within it. Trezor Bitcoin Safe, by Satoshi Labs, is a highly secure and trusted bitcoin wallet, which provides a degree of security that simply cannot be replicated using a computer. It is an offline transaction signing device that uses a small screen to visually depict transactional information.
The device has been subject to a security breach in the past. However, recent improvements have made the device virtually impregnable. This is possible due to another security feature that involves the generation of a random pin number for every single use, thus, making it impossible to hack into.
However, the wallet lacks some of the more advanced operational features that expert-use might demand. In addition to being considered as one of the most secure hardware wallets for bitcoin, ethereum and other altcoins, it also offers a highly interactive and popular user interface.
All transactions made with the device are displayed on its display screen and it requires physical verification for each and every transaction. There are two buttons available on the small device, which allows its users to navigate through the user interface. Users of Ledger Nano S are required to create a pin code using the device itself.
It is important to note that the device does not need to be connected to a computer in order to set-up. Users have to enter the pin code in order to access the device, creating an additional layer of security.
However, that is not all. The device also has a secret phrase question and asks its users to enter a specific word from the phrase for further authentication. As mentioned earlier, the wallet offers one of the most advanced and easy-to-use user interface. The seamless user experience allows for an unparalleled electronic banking experience using cryptocurrencies.
Users can also use computer based software to enter transactional information and connect the device only when the transaction has to be made. As of writing of this article, there is no smartphone app for the device. However, it is only a matter of time before one will be made available. The only drawback we could find about Ledger Nano S involves the user interface for ethereum management.
But even that is soon to change with one of the upcoming software updates. KeepKey bitcoin wallet is also one of the most widely used hardware wallets. It offers a number of unique security features that makes it a leading competitor in the cryptocurrency security solutions arena. KeepKey is an incredibly secure device that utilizes an encryption pin code through its touchscreen.
It creates a new randomized pin code for every instance of use. Meaning, the pin generator is paired with a hardware wallet that requires a new randomly generated pin code to access the wallet. The device offers a recovery mechanism in case that the device is lost or stolen. It allows the user to create a word recovery sequence during the initial set-up. If the device is lost, the owner of the device simply has to enter the recovery sequence on a new device and all of the bitcoins would be recovered without any real risk to the access keys.
Bitbox is a recent addition to the range of hardware wallet that is commercially available to cryptocurrency users. Since it is a new entrant into the market, it is also the cheapest option available to users. The device offers Tor and Tails OS compatibility for the users looking to maintain anonymity along with security.
At the same time it also offers compatibility with the two most widely used operating systems, iOS and Android, meaning, even the casual users can use it without worrying about a learning curve. Since the device is rather new, it is difficult for me to personally go into too many details as I have yet to use the device myself. But if we are to look at the feedback some of its users have given, there is no doubt that it is an extremely simple but highly secure device that will appeal to most of the new bitcoin users.
Hence, it is an exclusively bitcoin-only hardware wallet. Ethereum is the only non-bitcoin cryptocurrency that can be used with the Bitbox. The Bitbox also has an edge when it comes to the use of micro-SD card, which acts the backup for the wallet.
In the case that the wallet is lost or stolen, the bitcoins can be restored using the backup micro-SD card. For the vast majority of cryptocurrency users, Trezor Bitcoin Wallet and the Ledger Nano S are considered as the most secure hardware bitcoin wallets.
As a cryptocurrency user myself, I value nothing more than the security of my data in general and the security of my crypto-based wealth in particular. As Bitcoin and other cryptocurrencies grow as a major form of global currency and financial asset, it makes sense that virtual and cyber security is taken serious and proactive measures are taken to safeguard our data, as well as our wealth.