One thing about these bitcoin experts is that they're very sophisticated and knowledgeable. This one particular individual I know happens to be a hockey player and has a Bachelor's Degree in Computer Science and Mathematics. He read some of our stories and decided to come into my store, Toronto Hockey Repair, to talk to me.
He told me, "If you're willing to buy me an expensive dinner and throw in a pair of $1100 dollar skates I can help you guys out." I told him, "I'm willing to make a deal with you, however you're going to have to at least cover the cost I pay to get the skates, it usually runs around $600."
I continued, "To get this story right, I'm willing to purchase 3 dinners, given the accuracy of the information is there."
Over dinner, the hockey player/crypto-enthusiast told me, "Cryptocurrency, like bitcoin, is only based on the assumption that people will be willing to pay more or have to pay more to achieve some fictional profit. Remember, everything is streamlined towards positive news which becomes the digestive food towards value whereby value doesn't exist. Mind you, there's always intrinsic value in gold, you can always make jewelry and gold trinkets. Gold is an $8 trillion market and in order for cryptocurrency to replace gold, one has to recruit enough people in believing the value of cryptocurrency. That's why these cryptocurrency legions have a tremendous amount of seminars and pseudo-influencers to attract everyday people that cryptos will be the gateway to real money."
"For example, if I produce 10,000 cryptocurrency coins, it then becomes my job to convince people that the scarcity of this supply will propel prices towards $1 million per coin. The real goal of cryptocurrency is not value, it's a tactical persuasion to achieve fiat currency and the assumption of value," he told me.
I asked him, "Is cryptocurrency a reliable and impenetrable ledger?" He replied, "Remember Fiorenzo about what I just told you, it is purely based off the assumption of value. Blockchain is designed with the assumption that all nodes are honest and therefore controlled by the network. It will take time for the honest community to determine the hash power in the proof-of-work. Think of it this way, a cancer cell has a habit of tricking the body that all is well, however it has a habit of regrouping to attack the good cells. In the cryptocurrency world, a good attacker with enough computer power and mathematical skills is able to destroy the stability of nearly the whole blockchain network with respect to double-spending with self-reserve transactions and mining."
He told me an interesting story, "Only once Fiorenzo, in January 2014, the mining pool reached 42% of total bitcoin computing power and achieved 50% of total power over a week. With the Bitcoin security model, there is not a single coalition of miners controlling more than half of the hash rate. The miners pool their resources together and contribute to the generation of a block and therefore share the reward. The real problem that will unfold in the future is that attackers will change their mathematical algorithms and of course subsequently pool their resources to become more organized and efficient. The strategic objective of these hacks is to achieve a collective reward on a pool of dishonest individuals interrupting the functionality of the honest miners."
"What they really want Fiorenzo with respect to the hackers is a multitude of organized attackers working in unison. Once an attacker releases the private block, you want the honest miners to mine on top of it to achieve the award. If the award is big enough, the sequence of events may take place where 51% of the attack becomes dominant. When you have a block withholding an attack, it's usually made by filtering another pool, it's simply a waiting game whereby patience relies on money laundering billions and billions of dollars. The beauty of cryptocurrency is not just laundering money, but for these hackers to obtain easy profit and holding multinationals accountable towards bribery that otherwise leaves hoards of personal data at risk of being breached."
My friend continued, "by having more countries coming out with their own cryptocurrency it is a good thing that this trend will be even more influenced by volatility. For example, if a country loses $50 to $100 billion in cryptocurrency, it's really not a big deal, you just re-issue more cryptocurrencies for the ones that got burned to keep the party going. Cryptocurrency is no different than the central banks continually printing money."
He looked at me keenly, "Now Fiorenzo ... do I get my skates?"
I looked back, "Not yet my friend, we have two more expensive dinners to get the story straight."
"Just ask yourself, what do you think happens with all the cryptocurrency that has been stolen? They simply print more Fiorenzo."
To be continued.......