6 ms·

It's all the same thing every year on HN. People trying to find all sorts of excuses for Bitcoin existence - blockchains, smart contracts, ICOs - as long as the

by snitko 9y ago

xchaotic 9y ago
it's a very noble approach, but the facts are not in your favour. The 'people' that keep bitcoin valuation high are: early adopters (including ones who lost access to their wallets), HODLers and speculators and perhaps a few casual drug buyers. As a mainstream currency, BTC is pretty useless at world scale.
- m1sta_ 9y ago
  You forgot a big one that’s not going away quickly: money launderers.
  - matte_black 9y ago
    Serious launderers launder money through cash only businesses.
iraklism 9y ago
There is definitely a portion of people that this applies to. However, I’d wager that the majority of the Cryptocurrency market capitalisation is from people that really want to become millionaires really fast.
Kiro 9y ago
You're just speculating and I personally think you're wrong.
vec 9y ago
I agree. "Bitcoin as anarcho-capitalist proof of concept" does seem to be the correct framework for understanding why it exists, why it works the way it does, and what one might find valuable about it. On that front it's been at least a partial success. I can't buy a cup of coffee with Bitcoin, and I doubt I ever will, but the fact that it works at all is a lot more than I suspected we would see at this point. It's definitely caused me to rethink quite a few of my assumptions about macroeconomics. That doesn't justify why anyone else should be shoehorning blockchains into their projects. Earlier today I saw that Kodak is going to be launching KODAKCoin later this month as a mechanism to somehow assist photographers in selling and distributing their work. Presumably Kodak trusts Kodak. Any photographer who wants to use Kodak's tools to control the distribution of their work has to trust Kodak. Kodak has an IT department. They don't need trustless or decentralized. What they need is a boring ol' SQL database. Maybe cryptocurrencies are a good idea, maybe they're not. That's more of a political and economic question than a technical one. Either way, they clearly do work more or less as advertised. What I'm still waiting to see is someone who is not a libertarian bent on the destruction of the global financial system using the blockchain to successfully solve any other previously intractable problem.
- CamTin 9y ago
  Tracking ownership of some intangible set of rights is actually basically the one thing that BTC/ETH-esque tech is really useful for, so the Kodak thing is far from the craziest coin announced. A sane thing to do would be to piggyback on one the existing blockhains and their pre-existing hashing power. In this scenario, Kodak would create some kind colored-coin or side chain representing ownership of certain photographs and take a cut as basically a notary, providing easy tools to store a [ image_hash, owner_id ] tuple on the blockchain for posterity. This has the advantage of /continuing to exist if Kodak goes away/, which is what you want as a rights holder. Trouble with that, is that then Kodak doesn't get to issue its own token, and therefore doesn't get to indulge in securities manipulation. It also means they can open themselves up to competition on ease-of-use, since now anybody can run a company doing the same thing. There is also the VERY BIG question of whether or not such a distributed ledger would ever be accepted in a court as proof of ownership of rights to those photos. If it can't be, there's no point in any of it.
tstactplsignore 9y ago
>Bitcoin's main purpose is and always was to have an alternative to the financial system, crippling regulations, government control and taxes. Does bitcoin really do any of those things? Right now, btc core is not an alternative to cash- a problem that maybe will be fixed in time, but currently only seems to be getting worse. If bitcoin really did take off as a global currency, the IRS would audit unreported bitcoin transactions- and it'd have your financial records because the corporations and individuals you interact act with would cooperate, and it'd only need a few to start to deanonymize you. It seems like the blockchain would almost make the tax job easier, because all transactions are public unless people move from bitcoin to a zerocoin model. Even then, the IRS would pursue those who didn't report and have transaction information from vendors to work to identify fraud. So, bitcoin doesn't seem like an alternative to taxes. Also have no idea what it has to do with most government regulation. And, is it really an alternative to the financial system? Yes, people can use bitcoin instead of a checkings or savings account- but still need to use traditional services to invest in the market, and the financial system will continue humming along making more money from money and making gobs of money profiting off everyone else's market inefficiency whether it's working in usd or btc. So, what are we left with? It seems like core btc is only an alternative to a speculative investment in something that the federal reserve cannot print. And believe it or not, the vast majority of this country either doesn't care about quantitative easing, or believes in basic macroeconomics. Core right now seems to just be a LARP fantasy for libertarians convinced that "this time we can finally get rid of the evil Fed and their evil money printing". It'll never happen, and if it does offfer any kind of freedom, it's the freedom to go back to pre-fiat boom and bust cycles of economic hell detached from modern macroeconomic theory.
- beedrillzzzzz 9y ago
  I actually started another HN thread today trying to answer questions about taxing crypto and ether tokens: https://news.ycombinator.com/item?id=16108475 https://news.ycombinator.com/item?id=16108475
- bomb199 9y ago
  That's what libertarians want so desperately though. Because in their mind, they'll be the gilded elite in the boom-bust cycle. If it wasn't for the nasty government, all the hard-working brilliant libertarians would be billionaires.
jgh 9y ago
Eh, to most people right now bitcoin is an investment they could maybe get rich off of. I don't think most recent investors are thinking about any sort of social ramifications beyond "what if I get rich?" But yes I agree with you that it is fundamentally anarcho-capitalist. You are certainly not wrong, and this is the source of my objection to bitcoin and most other cryptocurrencies. Although I don't view anarcho-capitalism as "freedom" like you do, but that's a debate for another time.
ThomPete 9y ago
Personally I see a lot of different areas where the blockchain will be extremely useful. The reason I think that is very simple. The blockchain allows us to create scarcity in an otherwise abundant medium. This means that potentially (and yes it will take time) we will see be able to mimic the physical space and create items that are to some extent unique (even though the can be copied. The art market is based on exactly this principle) It's extremely interesting when it comes to things like secondhand markets where we can buy and resell assets without having to deal with licensing issues from some central owner. Things like ebooks that can increase in value because of the people who owned them, digital "Pokemon cards" to create unique digital assets, virtual goods without the need for the original creator of the game to be up and running. In other words, it allow us to have a digital world where what we do creates a unique footprint and doesn't just get's obsolete and where the end user gets to tap into the value chain of technology even if they are not able to work in the technology space. These are some of the things I believe is interesting. I am not anarco-capitalist or libertarian and I don't care if it was pushed primarily by them just like I don't care that my country was based on wars and slavery and killing other people. The blockchain, the way I look at it at least, is a "protocol" like TCP-IP.
- snitko 9y ago
  Blockchain is not a protocol. It's a concept because there are many different blockchains. Bitcoin on the other hand is a protocol.
  - ThomPete 9y ago
    Yup, you are of course 100% technically correct. But conceptually it helps me think about it like that (as the purpose overall regardless of how the blockchain is expressed is the immutable ledger)
- joosters 9y ago
  But all your examples are possible (and have been successfully implemented) without a blockchain. So what does the chain add? Besides which, when is turning abundance into scarcity a good thing?
flignats 9y ago
"Not because blockchain is some sort of an innovation." Actually, it is some sort of huge innovation.
Goladus 9y ago
It's all the same thing every year on HN. People trying to find all sorts of excuses for Bitcoin existence - blockchains, smart contracts, ICOs - as long as they don't have to accept that Bitcoin's main purpose is and always was to have an alternative to the financial system, crippling regulations, government control and taxes. It has not yet succeeded in this purpose as it is not yet a viable alternative currency except in extreme cases where the government-backed currency has failed completely. 9 years is nothing when we're talking about currency. It's not even a fraction of a single lifespan. Bitcoin's rate of money supply has slowed dramatically in the last few years (as it was programmed to do), limiting its ability to expand to accommodate new markets. Instead of becoming more widely accepted, organizations such as Steam are dropping support for it, due to volatility and increased transaction fees: which is exactly what would be predicted when a currency supply is limited but the economy around it is growing (or trying to grow-- scarcity of currency cause an economy to stagnate until an alternative is found).

by snitko 9y ago

xchaotic 9y ago

it's a very noble approach, but the facts are not in your favour. The 'people' that keep bitcoin valuation high are: early adopters (including ones who lost access to their wallets), HODLers and speculators and perhaps a few casual drug buyers. As a mainstream currency, BTC is pretty useless at world scale.

m1sta_ 9y ago
You forgot a big one that’s not going away quickly: money launderers.
- matte_black 9y ago
  Serious launderers launder money through cash only businesses.

iraklism 9y ago

There is definitely a portion of people that this applies to. However, I’d wager that the majority of the Cryptocurrency market capitalisation is from people that really want to become millionaires really fast.

Kiro 9y ago

You're just speculating and I personally think you're wrong.

vec 9y ago

I agree. "Bitcoin as anarcho-capitalist proof of concept" does seem to be the correct framework for understanding why it exists, why it works the way it does, and what one might find valuable about it. On that front it's been at least a partial success. I can't buy a cup of coffee with Bitcoin, and I doubt I ever will, but the fact that it works at all is a lot more than I suspected we would see at this point. It's definitely caused me to rethink quite a few of my assumptions about macroeconomics. That doesn't justify why anyone else should be shoehorning blockchains into their projects. Earlier today I saw that Kodak is going to be launching KODAKCoin later this month as a mechanism to somehow assist photographers in selling and distributing their work. Presumably Kodak trusts Kodak. Any photographer who wants to use Kodak's tools to control the distribution of their work has to trust Kodak. Kodak has an IT department. They don't need trustless or decentralized. What they need is a boring ol' SQL database. Maybe cryptocurrencies are a good idea, maybe they're not. That's more of a political and economic question than a technical one. Either way, they clearly do work more or less as advertised. What I'm still waiting to see is someone who is not a libertarian bent on the destruction of the global financial system using the blockchain to successfully solve any other previously intractable problem.

CamTin 9y ago
Tracking ownership of some intangible set of rights is actually basically the one thing that BTC/ETH-esque tech is really useful for, so the Kodak thing is far from the craziest coin announced. A sane thing to do would be to piggyback on one the existing blockhains and their pre-existing hashing power. In this scenario, Kodak would create some kind colored-coin or side chain representing ownership of certain photographs and take a cut as basically a notary, providing easy tools to store a [ image_hash, owner_id ] tuple on the blockchain for posterity. This has the advantage of /continuing to exist if Kodak goes away/, which is what you want as a rights holder. Trouble with that, is that then Kodak doesn't get to issue its own token, and therefore doesn't get to indulge in securities manipulation. It also means they can open themselves up to competition on ease-of-use, since now anybody can run a company doing the same thing. There is also the VERY BIG question of whether or not such a distributed ledger would ever be accepted in a court as proof of ownership of rights to those photos. If it can't be, there's no point in any of it.

tstactplsignore 9y ago

>Bitcoin's main purpose is and always was to have an alternative to the financial system, crippling regulations, government control and taxes. Does bitcoin really do any of those things? Right now, btc core is not an alternative to cash- a problem that maybe will be fixed in time, but currently only seems to be getting worse. If bitcoin really did take off as a global currency, the IRS would audit unreported bitcoin transactions- and it'd have your financial records because the corporations and individuals you interact act with would cooperate, and it'd only need a few to start to deanonymize you. It seems like the blockchain would almost make the tax job easier, because all transactions are public unless people move from bitcoin to a zerocoin model. Even then, the IRS would pursue those who didn't report and have transaction information from vendors to work to identify fraud. So, bitcoin doesn't seem like an alternative to taxes. Also have no idea what it has to do with most government regulation. And, is it really an alternative to the financial system? Yes, people can use bitcoin instead of a checkings or savings account- but still need to use traditional services to invest in the market, and the financial system will continue humming along making more money from money and making gobs of money profiting off everyone else's market inefficiency whether it's working in usd or btc. So, what are we left with? It seems like core btc is only an alternative to a speculative investment in something that the federal reserve cannot print. And believe it or not, the vast majority of this country either doesn't care about quantitative easing, or believes in basic macroeconomics. Core right now seems to just be a LARP fantasy for libertarians convinced that "this time we can finally get rid of the evil Fed and their evil money printing". It'll never happen, and if it does offfer any kind of freedom, it's the freedom to go back to pre-fiat boom and bust cycles of economic hell detached from modern macroeconomic theory.

beedrillzzzzz 9y ago
I actually started another HN thread today trying to answer questions about taxing crypto and ether tokens: https://news.ycombinator.com/item?id=16108475 https://news.ycombinator.com/item?id=16108475
bomb199 9y ago
That's what libertarians want so desperately though. Because in their mind, they'll be the gilded elite in the boom-bust cycle. If it wasn't for the nasty government, all the hard-working brilliant libertarians would be billionaires.

jgh 9y ago

Eh, to most people right now bitcoin is an investment they could maybe get rich off of. I don't think most recent investors are thinking about any sort of social ramifications beyond "what if I get rich?" But yes I agree with you that it is fundamentally anarcho-capitalist. You are certainly not wrong, and this is the source of my objection to bitcoin and most other cryptocurrencies. Although I don't view anarcho-capitalism as "freedom" like you do, but that's a debate for another time.

ThomPete 9y ago

Personally I see a lot of different areas where the blockchain will be extremely useful. The reason I think that is very simple. The blockchain allows us to create scarcity in an otherwise abundant medium. This means that potentially (and yes it will take time) we will see be able to mimic the physical space and create items that are to some extent unique (even though the can be copied. The art market is based on exactly this principle) It's extremely interesting when it comes to things like secondhand markets where we can buy and resell assets without having to deal with licensing issues from some central owner. Things like ebooks that can increase in value because of the people who owned them, digital "Pokemon cards" to create unique digital assets, virtual goods without the need for the original creator of the game to be up and running. In other words, it allow us to have a digital world where what we do creates a unique footprint and doesn't just get's obsolete and where the end user gets to tap into the value chain of technology even if they are not able to work in the technology space. These are some of the things I believe is interesting. I am not anarco-capitalist or libertarian and I don't care if it was pushed primarily by them just like I don't care that my country was based on wars and slavery and killing other people. The blockchain, the way I look at it at least, is a "protocol" like TCP-IP.

snitko 9y ago
Blockchain is not a protocol. It's a concept because there are many different blockchains. Bitcoin on the other hand is a protocol.
- ThomPete 9y ago
  Yup, you are of course 100% technically correct. But conceptually it helps me think about it like that (as the purpose overall regardless of how the blockchain is expressed is the immutable ledger)
joosters 9y ago
But all your examples are possible (and have been successfully implemented) without a blockchain. So what does the chain add? Besides which, when is turning abundance into scarcity a good thing?

flignats 9y ago

"Not because blockchain is some sort of an innovation." Actually, it is some sort of huge innovation.

Goladus 9y ago

It's all the same thing every year on HN. People trying to find all sorts of excuses for Bitcoin existence - blockchains, smart contracts, ICOs - as long as they don't have to accept that Bitcoin's main purpose is and always was to have an alternative to the financial system, crippling regulations, government control and taxes. It has not yet succeeded in this purpose as it is not yet a viable alternative currency except in extreme cases where the government-backed currency has failed completely. 9 years is nothing when we're talking about currency. It's not even a fraction of a single lifespan. Bitcoin's rate of money supply has slowed dramatically in the last few years (as it was programmed to do), limiting its ability to expand to accommodate new markets. Instead of becoming more widely accepted, organizations such as Steam are dropping support for it, due to volatility and increased transaction fees: which is exactly what would be predicted when a currency supply is limited but the economy around it is growing (or trying to grow-- scarcity of currency cause an economy to stagnate until an alternative is found).