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And it's very hard to get anyone to take this seriously. But as far as I can tell, it's a real possibility. I had to talk some sense into a friend who was sayi

And it's very hard to get anyone to take this seriously. But as far as I can tell, it's a real possibility. I had to talk some sense into a friend who was saying she was fed up with being poor and was going to put her $7k life savings into bitcoin. I told her to treat it like gold, hold it, and be very careful to keep it secure. And off Coinbase. And my advice made her hesitate, and now she missed the 100% growth over the last 30 days. But almost everybody is starting to think that way. And if the entire world starts down that mindset, there isn't a top. People have already noticed that wealthy Saudis' money is safer in BTC than in banks. Ditto for Zimbabwe. How long until the rest of the world follows? We have to be thinking of ways to stop this, not merely to benefit from being prescient.

tonyztan 9y ago
Could you explain why "this" needs to "stop"? Why would the success of Bitcoin be apocalyptic?
- sillysaurus3 9y ago
  Although BTC has a finite maximum, it has been inflationary, since coins are being created. This will not hold. BTC was the first crypto, and network effects means it stands a good chance of staying on top. Like eBay, it may be the go-to crypto. If it's true that crypto is the future -- that the entire world will switch from fiat to crypto, kicking and screaming -- then that means the entire world will likely switch to whichever crypto is on top. There are many benefits to using the same crypto that everyone else is using, especially when it comes to long-term wealth storage. Eventually, the coins will stop being generated, and those coins will be the only thing that the world values. We won't transact in BTC, but BTC wasn't designed to transact. It was designed to store wealth. And it does that very well. The rise of Bitcoin will prompt people to pour even more money into it. Savings accounts will look like an anachronism. You won't want to keep your money in a bank: If the entire world is hopping onto the bitcoin boat, then you currently stand to benefit from (7 billion - total BTC holders) of people that have yet to switch. That means you will find it quite inescapable. Now, the final nail will be when your dollars start to lose value relative to BTC. One way of looking at the BTC price is to say that the dollar's value is going down, not that BTC is getting more valuable. Do you really want to bet the future of all mankind on this grand experiment? For all their flaws, our traditional systems have gotten us this far. The amount of upheaval that it could cause to switch the entire world from inflationary to deflationary basis of wealth isn't something to underestimate. https://bitcoin.org/en/faq#wont-bitcoin-fall-in-a-deflationary-spiral https://bitcoin.org/en/faq#wont-bitcoin-fall-in-a-deflationa... There are all kinds of theories about what might happen. But let it sink in that no one knows, and we have no plan to stop this if it turns out badly. This isn't really meant to persuade you, as that would be impossible. No one knows what will happen, so this is guesswork. But we know that if BTC does ultimately win, we will lose all economic controls: there will be no way to inject more money when needed, such as the 2008 crisis, and no strategies to prevent deflation. We will be at the whims of an algorithm that no one has any incentive to change. Contingency plans are good. Let's come up with one.
  - spookthesunset 9y ago
    BTC is worth what it is thanks to massive manipulation under the hood just like the last run up. The music is gonna stop sometime. Almost every exchange is sketchy and you have no promise that anybody is playing fair.... Bitcoin is pure, 100% hype and will not replace any of our financial institutions.
  - monort 9y ago
    You shouldn't worry about it before scaling problem is solved. Dollar will start losing value to bitcoin only if a considerable number of transactions are made in bitcoin, and there is nothing apocalyptic about it - it will be a slow move from the dollar to a cryptocurrency. $1M/bitcoin and 3 transactions/second are not compatible.
  - Slartie 9y ago
    > We will be at the whims of an algorithm that no one has any incentive to change. Not only that. We will also be at the whims of a practically unchangeable algorithm that only works as long as (mostly) chinese mining operators keep their gigawatt-guzzling hashing machines running, and that has no suitable failure handling for the case of big parts of that hashing power suddenly going missing. Look up "chain death spiral" for a description of this specific doomsday scenario. It really is intriguing to follow through on some of these scenarios in which Bitcoin sucks up enormous portions of worldwide economic power, only to catastrophically fail in one of the numerously envisioned ways in which it could fail. The higher the market cap rises, the more it seems possible that we are right now looking at the next worldwide financial crisis in its infancy. Another thought: even assuming Bitcoin continues working normally and somehow being able to handle the transactions that come with a multi-trillion market cap, what about the fact that all this "value" is completely removed from the market where it would usually be mostly "at work" as operating capital of companies which in turn (not all of them, but in the grand scheme) generate actual value, as in improvements of the conditions for real humans? If this is not offset somehow, won't it cause a huge economic crisis of its own, possibly - in the worst case - leading to us (as humanity) not being able to keep up the stupid hashing game and thus making bitcoin entirely unusable and thus worthless?
- awakeasleep 9y ago
  if governments weren't in charge of money supply, it would change the whole nature of governance, which would be an apocalyptic event. Even if everything that came out of it was good, it'd change the nature of life on Earth.
  - almost_usual 9y ago
    He who has the weapons has the order.
- kleer001 9y ago
  #1 reason BTC based economy would suck: No loans. It's a deflationary currency, meaning its value goes up over time instead of down. So, there's no incentive to spend your money before it loses value like with inflationary currencies. Instead the incentive is to hoard your money because it's going to be worth more tomorrow. It's anti-growth.
b1daly 9y ago
Holy crap, there is a top. To realize these gains, owners of bitcoins are going to have to convert back to fiat. US dollars have a built in floor as government issued fiat, which is that they are required to pay taxes. The money supply of a country is a precious resource, and the government has a responsibility, and incentive, to maintain some level of control. Look how serious the Secret Service is about counterfeiting. There are many tools the government has to control the use of bitcoin, the simplest being to just outlaw it. They already treat individuals who sell bitcoin as a business activity with a heavy hand. Libertarian geeks who haven’t thought things through seem to think that because it will be hard to impossible to completely shut down a distributed system, that means the government can’t control it. Wake up! Look at Ross Ulbricht! The fact that he conducted his illegal business with bitcoin was used against him. It protected him zero amount.
- sillysaurus3 9y ago
  To realize these gains, owners of bitcoins are going to have to convert back to fiat. If BTC wins, we'll be converting our dollars to BTC, not the other way around. There are many tools the government has to control the use of bitcoin, the simplest being to just outlaw it. This won't work. BTC will just migrate to countries where it isn't illegal, taking millionaires with them. Libertarian geeks who haven’t thought things through seem to think that because it will be hard to impossible to completely shut down a distributed system, that means the government can’t control it. They can't. The point of this post was that they can't, and that we need to think of ways to escalate the situation until people start taking this seriously. Wake up! Look at Ross Ulbricht! The fact that he conducted his illegal business with bitcoin was used against him. It protected him zero amount. Because he failed at even the most basic opsec. If he had kept most of his coins in cold storage that he never touched, he would still have a fortune, even in prison.
  - tome 9y ago
    > This won't work. BTC will just migrate to countries where it isn't illegal, taking millionaires with them. Productive capacity is not so easy to migrate.
- 9y ago

tonyztan 9y ago

Could you explain why "this" needs to "stop"? Why would the success of Bitcoin be apocalyptic?

sillysaurus3 9y ago
Although BTC has a finite maximum, it has been inflationary, since coins are being created. This will not hold. BTC was the first crypto, and network effects means it stands a good chance of staying on top. Like eBay, it may be the go-to crypto. If it's true that crypto is the future -- that the entire world will switch from fiat to crypto, kicking and screaming -- then that means the entire world will likely switch to whichever crypto is on top. There are many benefits to using the same crypto that everyone else is using, especially when it comes to long-term wealth storage. Eventually, the coins will stop being generated, and those coins will be the only thing that the world values. We won't transact in BTC, but BTC wasn't designed to transact. It was designed to store wealth. And it does that very well. The rise of Bitcoin will prompt people to pour even more money into it. Savings accounts will look like an anachronism. You won't want to keep your money in a bank: If the entire world is hopping onto the bitcoin boat, then you currently stand to benefit from (7 billion - total BTC holders) of people that have yet to switch. That means you will find it quite inescapable. Now, the final nail will be when your dollars start to lose value relative to BTC. One way of looking at the BTC price is to say that the dollar's value is going down, not that BTC is getting more valuable. Do you really want to bet the future of all mankind on this grand experiment? For all their flaws, our traditional systems have gotten us this far. The amount of upheaval that it could cause to switch the entire world from inflationary to deflationary basis of wealth isn't something to underestimate. https://bitcoin.org/en/faq#wont-bitcoin-fall-in-a-deflationary-spiral https://bitcoin.org/en/faq#wont-bitcoin-fall-in-a-deflationa... There are all kinds of theories about what might happen. But let it sink in that no one knows, and we have no plan to stop this if it turns out badly. This isn't really meant to persuade you, as that would be impossible. No one knows what will happen, so this is guesswork. But we know that if BTC does ultimately win, we will lose all economic controls: there will be no way to inject more money when needed, such as the 2008 crisis, and no strategies to prevent deflation. We will be at the whims of an algorithm that no one has any incentive to change. Contingency plans are good. Let's come up with one.
- spookthesunset 9y ago
  BTC is worth what it is thanks to massive manipulation under the hood just like the last run up. The music is gonna stop sometime. Almost every exchange is sketchy and you have no promise that anybody is playing fair.... Bitcoin is pure, 100% hype and will not replace any of our financial institutions.
- monort 9y ago
  You shouldn't worry about it before scaling problem is solved. Dollar will start losing value to bitcoin only if a considerable number of transactions are made in bitcoin, and there is nothing apocalyptic about it - it will be a slow move from the dollar to a cryptocurrency. $1M/bitcoin and 3 transactions/second are not compatible.
- Slartie 9y ago
  > We will be at the whims of an algorithm that no one has any incentive to change. Not only that. We will also be at the whims of a practically unchangeable algorithm that only works as long as (mostly) chinese mining operators keep their gigawatt-guzzling hashing machines running, and that has no suitable failure handling for the case of big parts of that hashing power suddenly going missing. Look up "chain death spiral" for a description of this specific doomsday scenario. It really is intriguing to follow through on some of these scenarios in which Bitcoin sucks up enormous portions of worldwide economic power, only to catastrophically fail in one of the numerously envisioned ways in which it could fail. The higher the market cap rises, the more it seems possible that we are right now looking at the next worldwide financial crisis in its infancy. Another thought: even assuming Bitcoin continues working normally and somehow being able to handle the transactions that come with a multi-trillion market cap, what about the fact that all this "value" is completely removed from the market where it would usually be mostly "at work" as operating capital of companies which in turn (not all of them, but in the grand scheme) generate actual value, as in improvements of the conditions for real humans? If this is not offset somehow, won't it cause a huge economic crisis of its own, possibly - in the worst case - leading to us (as humanity) not being able to keep up the stupid hashing game and thus making bitcoin entirely unusable and thus worthless?
awakeasleep 9y ago
if governments weren't in charge of money supply, it would change the whole nature of governance, which would be an apocalyptic event. Even if everything that came out of it was good, it'd change the nature of life on Earth.
- almost_usual 9y ago
  He who has the weapons has the order.
kleer001 9y ago
#1 reason BTC based economy would suck: No loans. It's a deflationary currency, meaning its value goes up over time instead of down. So, there's no incentive to spend your money before it loses value like with inflationary currencies. Instead the incentive is to hoard your money because it's going to be worth more tomorrow. It's anti-growth.

b1daly 9y ago

Holy crap, there is a top. To realize these gains, owners of bitcoins are going to have to convert back to fiat. US dollars have a built in floor as government issued fiat, which is that they are required to pay taxes. The money supply of a country is a precious resource, and the government has a responsibility, and incentive, to maintain some level of control. Look how serious the Secret Service is about counterfeiting. There are many tools the government has to control the use of bitcoin, the simplest being to just outlaw it. They already treat individuals who sell bitcoin as a business activity with a heavy hand. Libertarian geeks who haven’t thought things through seem to think that because it will be hard to impossible to completely shut down a distributed system, that means the government can’t control it. Wake up! Look at Ross Ulbricht! The fact that he conducted his illegal business with bitcoin was used against him. It protected him zero amount.

sillysaurus3 9y ago
To realize these gains, owners of bitcoins are going to have to convert back to fiat. If BTC wins, we'll be converting our dollars to BTC, not the other way around. There are many tools the government has to control the use of bitcoin, the simplest being to just outlaw it. This won't work. BTC will just migrate to countries where it isn't illegal, taking millionaires with them. Libertarian geeks who haven’t thought things through seem to think that because it will be hard to impossible to completely shut down a distributed system, that means the government can’t control it. They can't. The point of this post was that they can't, and that we need to think of ways to escalate the situation until people start taking this seriously. Wake up! Look at Ross Ulbricht! The fact that he conducted his illegal business with bitcoin was used against him. It protected him zero amount. Because he failed at even the most basic opsec. If he had kept most of his coins in cold storage that he never touched, he would still have a fortune, even in prison.
- tome 9y ago
  > This won't work. BTC will just migrate to countries where it isn't illegal, taking millionaires with them. Productive capacity is not so easy to migrate.
9y ago