5 ms·

> I'm not sure BTC is a viable way to store value... BTC (and any deflationary CC) is still a better long term value holder than EUR or USD

by akerro 9y ago

Retric 9y ago
If and only if it remains deflationary, someone could completely destroy Bitcoin by maintaining a 51% attack. I doubt China is going to go from nan to an attack, but confiscate all miners in China and they could easily do so. So, if Bitcoin could easily be worth nothing in 10 years, it's a poor Store of value.
- akerro 9y ago
  >destroy Bitcoin by maintaining a 51% attack The 51% is a better chance attack, you can still try to perform it with 10% and succeed and you can try with 60% and fail. >Bitcoin could easily be worth nothing in 10 years, it's a poor Store of value. Gold is more and more used in electronics, less and less in jewellery, if we move to graphene-based computers gold will not have much place there and its value in USD will probably drop. One nuke on Hawaii or California will cause huge drop in value of USD compared to other currencies.
  - Retric 9y ago
    No, a 51% attack works 100% of the time. You may or may not win a single hash, but by 100+ hashes your chain is longer invalidating their chain. Further, if it looks like your winning people will defect to you're side. > gold Gold is actually used for a lot of things (ex: gold leaf on books), historically it's price has gone up and down quite a bit, but within a fairly narrow band. ~0.1x to 1x while being easy to hide or smuggle. > probably drop Even then it's still worth more than 0. PS: In reality you would likely cause a fork, but that would also drop the price causing miners to migrate to some other coin making further manipulation easier.
    - RyanZAG 9y ago
      > PS: In reality you would likely cause a fork, Yes, probably, but remember - you have way more hashing power still. So you just swap to their new fork and beat them out there too, and you keep doing it until they give up and are forced to accept your fork as the truth. I'd guess one option would be to build a ban for China into the new fork directly, but that would be easy to bypass with VPNs. Ultimately, if you have the hashing power, you own it. Bitcoin can't keep invalidating winning forks forever as it's a war they lose on each step of the way.
  - brokensegue 9y ago
    gold's value is untethered from its use value because people believe it's a hedge
- Y_Y 9y ago
  If you owned more than half of all Bitcoin mining capacity, it would seem counterproductive to destroy it.
  - Retric 9y ago
    You can do a 51% attack while owning zero Bitcoin. You will mine some in the process, but well under 1/5,000 of total coins. Worldwide there are several hundred people that could afford to do this for the lulz, plus basically every government. Now, I don't think the odds are very high it's going to happen, but they are vastly higher than the odds USD's or Gold is going to become worthless.
mcguire 9y ago
Why exactly would you want a long term value holder? (And if you did, what's wrong with gold, which has a bit of a track record?)
- akerro 9y ago
  Gold is kind of heavy compared to Trezor.
- mschuster91 9y ago
  > Why exactly would you want a long term value holder? Because it's nice to have a long term value storage that cannot be randomly seized by the state, debt collectors, thieves, burglars or anyone. We have seen such things during the many times in the past where private gold ownership has been outlawed, or during the financial crisis where the balances of account holders above 100k EUR were used to pay off the debts of the bank. > And if you did, what's wrong with gold, which has a bit of a track record? Can be seized by the state, is subject to export controls/tariffs, and for the environmentally conscious: the production process of gold and many other metals is incredibly nasty, however gold is a special kind of bad given its chemical properties.
  - pimmen 9y ago
    Is there really precedent of debt collectors being unable to seize Bitcoins? Could they simply not just ask about your credentials to get access to your wallet?
    - pjc50 9y ago
      Quite. Maybe they can't seize a passphrase from your head, but they can certainly seize you until you comply with a court order.
      - jstanley 9y ago
        Actually I don't think debt collectors can seize people.
MBCook 9y ago
Why? What makes it more likely that bitcoin will be with something in 5, 15, 25 years than a fiat currency backed by a large and relatively stable government? And what prevents greedy people from forming Bitcoin to remove (or increase) the maximum coin count and getting enough other geeedy miners to go along with it to be the majority fork?
- namelost 9y ago
  > And what prevents greedy people from forming Bitcoin to remove (or increase) the maximum coin count and getting enough other geeedy miners to go along with it to be the majority fork? The nodes define what a bitcoin is. So long as they agree that bitcoin should follow the original exponentially decreasing reward schedule, then that is what will happen. There are some problems, for instance, if almost all miners decided to switch to another fork, then the original chain would simply die because of the difficulty. But miners have electricity bills to pay and are strongly incentivised to mine the most profitable chain. It is not a matter of convincing the miners, but of convincing the world that your uncapped fork is more valuable.
  - matthewbauer 9y ago
    > the original chain would simply die because of the difficulty I just want to point out that difficulty decreases when there's less mining. Difficulty would not be the problem. Bitcoin would just be more vulnerable to a 51% attack with less hash power.
    - gizmo686 9y ago
      This assumes that there is enough hashrate left to reach the next difficulty adjustment (every 2016 blocks). This is even worse because it would likely be corralated with a loss of market value for Bitcoin, which lessens the incentive to mine. Combined with the ease at which miners can switch to another coin (or, at least, another bitcoin fork), and it is easy to imagine a death spiral where Bitcoin simply fails to lower its difficulty because it does not have enough hashrate to do so.
RyanZAG 9y ago
Does anybody really hold EUR or USD though? They hold gold or stocks or similar, denominated in USD. You could say Bitcoin is the same as gold (which is also deflationary?), but has gold really been a particularly viable way to store value? Gold may never again rise to the price it was 5 years ago, despite being deflationary. Deflationary isn't enough or even required to be a store of value, it rather needs to be in demand and liquid.
- brokensegue 9y ago
  yes? I hold USD in my checking/saving account right now...
pjc50 9y ago
But no sensible person holds more than their wallet float (and maybe emergency fund) in actual money; there's a whole range of current accounts, savings accounts, tax-exempt vehicles, pensions, stocks, trusts, and property to hold value over the long term. It baffles me how scared people are of inflation given how low it is at the moment in the West and has been for years. Certainly compared to the 70s when the UK had a 25% inflation rate. At least back then people realised it had a cause in the real economy and wasn't a money-printing phenomenon.
- luckydata 9y ago
  If you get a bunch of folks that have learned economics from a set of fringe books from the 70s that were never updated to account for what we have discovered in the meantime then it becomes easy to explain the Austrian school and its mindless followers. No amount of evidence will persuade them their beliefs are silly. We have some of them in power right now.
  - bonesss 9y ago
    I think you could even generalize: the unquestioned beliefs brought about in childhood are hard to dislodge and seldom open to logic. Personally I think we need to be highly wary of any group that focuses on planting its ideology in people as early as possible because of this phenomenon. Most legitimate philosophy and ideology has no problem convincing adults of its content, and no need to prey on the illogical minds of children.
- mschuster91 9y ago
  > there's a whole range of current accounts, savings accounts, tax-exempt vehicles, pensions, stocks, trusts, and property to hold value over the long term. Lolnope. For my generation in Germany certainly not. Current accounts and saving accounts deliver interest ratios hovering around 0%, some even with negative interest. Tax-exempt vehicles are only for the ultra-rich. Pensions are a laughing stock, I'm 26 now and don't expect to have anything resembling a pension when retiring with 80. Stocks/trusts? Either you really have considerable savings to start with (due to minimum order fees it's not really worth it to trade below 10k) or you got the stuff inherited at which point you're rich enough to not be affected by anything. Property? Unless you want to invest in the rural countryside that's so far off society that you'll be lucky when you have a 2x64k ISDN uplink you are not able to get property, especially not since the latest round of credit regulations which make it all but impossible for the ordinary person to get a mortgage. Oh and that all has the prerequisite of actually having money to save. The boomer generation has royally screwed up the current young generation. We're struggling to pay rent and (in the US) hope we won't have a major injury sending us straight into bankruptcy, and that's it. Money to save is something for the elite. > It baffles me how scared people are of inflation given how low it is at the moment in the West and has been for years. Low inflation has only been made possible by advances in "how to feed people with cheap garbage". Rents, energy, transportation - everything has skyrocketed, but due to bad selection in the comparison basket inflation is "low". Screw that metric.
raverbashing 9y ago
This is incorrect and some people will only understand once they suffer huge losses Nobody wants to hold an illiquid asset and BTC are doing their darnest to make it illiquid as possible.
rhino369 9y ago
It's not a deflationary currency because its not a currency. And even a deflationary currency can decrease in value if demand drops.
UncleMeat 9y ago
I can create a fork of BTC tomorrow that nobody really uses. It would be deflationary. Would you recommend that people store their value in MeatCoin?

> I'm not sure BTC is a viable way to store value... BTC (and any deflationary CC) is still a better long term value holder than EUR or USD

by akerro 9y ago

> I'm not sure BTC is a viable way to store value... BTC (and any deflationary CC) is still a better long term value holder than EUR or USD

Retric 9y ago

If and only if it remains deflationary, someone could completely destroy Bitcoin by maintaining a 51% attack. I doubt China is going to go from nan to an attack, but confiscate all miners in China and they could easily do so. So, if Bitcoin could easily be worth nothing in 10 years, it's a poor Store of value.

akerro 9y ago
>destroy Bitcoin by maintaining a 51% attack The 51% is a better chance attack, you can still try to perform it with 10% and succeed and you can try with 60% and fail. >Bitcoin could easily be worth nothing in 10 years, it's a poor Store of value. Gold is more and more used in electronics, less and less in jewellery, if we move to graphene-based computers gold will not have much place there and its value in USD will probably drop. One nuke on Hawaii or California will cause huge drop in value of USD compared to other currencies.
- Retric 9y ago
  No, a 51% attack works 100% of the time. You may or may not win a single hash, but by 100+ hashes your chain is longer invalidating their chain. Further, if it looks like your winning people will defect to you're side. > gold Gold is actually used for a lot of things (ex: gold leaf on books), historically it's price has gone up and down quite a bit, but within a fairly narrow band. ~0.1x to 1x while being easy to hide or smuggle. > probably drop Even then it's still worth more than 0. PS: In reality you would likely cause a fork, but that would also drop the price causing miners to migrate to some other coin making further manipulation easier.
  - RyanZAG 9y ago
    > PS: In reality you would likely cause a fork, Yes, probably, but remember - you have way more hashing power still. So you just swap to their new fork and beat them out there too, and you keep doing it until they give up and are forced to accept your fork as the truth. I'd guess one option would be to build a ban for China into the new fork directly, but that would be easy to bypass with VPNs. Ultimately, if you have the hashing power, you own it. Bitcoin can't keep invalidating winning forks forever as it's a war they lose on each step of the way.
- brokensegue 9y ago
  gold's value is untethered from its use value because people believe it's a hedge
Y_Y 9y ago
If you owned more than half of all Bitcoin mining capacity, it would seem counterproductive to destroy it.
- Retric 9y ago
  You can do a 51% attack while owning zero Bitcoin. You will mine some in the process, but well under 1/5,000 of total coins. Worldwide there are several hundred people that could afford to do this for the lulz, plus basically every government. Now, I don't think the odds are very high it's going to happen, but they are vastly higher than the odds USD's or Gold is going to become worthless.

mcguire 9y ago

Why exactly would you want a long term value holder? (And if you did, what's wrong with gold, which has a bit of a track record?)

akerro 9y ago
Gold is kind of heavy compared to Trezor.
mschuster91 9y ago
> Why exactly would you want a long term value holder? Because it's nice to have a long term value storage that cannot be randomly seized by the state, debt collectors, thieves, burglars or anyone. We have seen such things during the many times in the past where private gold ownership has been outlawed, or during the financial crisis where the balances of account holders above 100k EUR were used to pay off the debts of the bank. > And if you did, what's wrong with gold, which has a bit of a track record? Can be seized by the state, is subject to export controls/tariffs, and for the environmentally conscious: the production process of gold and many other metals is incredibly nasty, however gold is a special kind of bad given its chemical properties.
- pimmen 9y ago
  Is there really precedent of debt collectors being unable to seize Bitcoins? Could they simply not just ask about your credentials to get access to your wallet?
  - pjc50 9y ago
    Quite. Maybe they can't seize a passphrase from your head, but they can certainly seize you until you comply with a court order.
    - jstanley 9y ago
      Actually I don't think debt collectors can seize people.

MBCook 9y ago

Why? What makes it more likely that bitcoin will be with something in 5, 15, 25 years than a fiat currency backed by a large and relatively stable government? And what prevents greedy people from forming Bitcoin to remove (or increase) the maximum coin count and getting enough other geeedy miners to go along with it to be the majority fork?

namelost 9y ago
> And what prevents greedy people from forming Bitcoin to remove (or increase) the maximum coin count and getting enough other geeedy miners to go along with it to be the majority fork? The nodes define what a bitcoin is. So long as they agree that bitcoin should follow the original exponentially decreasing reward schedule, then that is what will happen. There are some problems, for instance, if almost all miners decided to switch to another fork, then the original chain would simply die because of the difficulty. But miners have electricity bills to pay and are strongly incentivised to mine the most profitable chain. It is not a matter of convincing the miners, but of convincing the world that your uncapped fork is more valuable.
- matthewbauer 9y ago
  > the original chain would simply die because of the difficulty I just want to point out that difficulty decreases when there's less mining. Difficulty would not be the problem. Bitcoin would just be more vulnerable to a 51% attack with less hash power.
  - gizmo686 9y ago
    This assumes that there is enough hashrate left to reach the next difficulty adjustment (every 2016 blocks). This is even worse because it would likely be corralated with a loss of market value for Bitcoin, which lessens the incentive to mine. Combined with the ease at which miners can switch to another coin (or, at least, another bitcoin fork), and it is easy to imagine a death spiral where Bitcoin simply fails to lower its difficulty because it does not have enough hashrate to do so.

RyanZAG 9y ago

Does anybody really hold EUR or USD though? They hold gold or stocks or similar, denominated in USD. You could say Bitcoin is the same as gold (which is also deflationary?), but has gold really been a particularly viable way to store value? Gold may never again rise to the price it was 5 years ago, despite being deflationary. Deflationary isn't enough or even required to be a store of value, it rather needs to be in demand and liquid.

brokensegue 9y ago
yes? I hold USD in my checking/saving account right now...

pjc50 9y ago

But no sensible person holds more than their wallet float (and maybe emergency fund) in actual money; there's a whole range of current accounts, savings accounts, tax-exempt vehicles, pensions, stocks, trusts, and property to hold value over the long term. It baffles me how scared people are of inflation given how low it is at the moment in the West and has been for years. Certainly compared to the 70s when the UK had a 25% inflation rate. At least back then people realised it had a cause in the real economy and wasn't a money-printing phenomenon.

luckydata 9y ago
If you get a bunch of folks that have learned economics from a set of fringe books from the 70s that were never updated to account for what we have discovered in the meantime then it becomes easy to explain the Austrian school and its mindless followers. No amount of evidence will persuade them their beliefs are silly. We have some of them in power right now.
- bonesss 9y ago
  I think you could even generalize: the unquestioned beliefs brought about in childhood are hard to dislodge and seldom open to logic. Personally I think we need to be highly wary of any group that focuses on planting its ideology in people as early as possible because of this phenomenon. Most legitimate philosophy and ideology has no problem convincing adults of its content, and no need to prey on the illogical minds of children.
mschuster91 9y ago
> there's a whole range of current accounts, savings accounts, tax-exempt vehicles, pensions, stocks, trusts, and property to hold value over the long term. Lolnope. For my generation in Germany certainly not. Current accounts and saving accounts deliver interest ratios hovering around 0%, some even with negative interest. Tax-exempt vehicles are only for the ultra-rich. Pensions are a laughing stock, I'm 26 now and don't expect to have anything resembling a pension when retiring with 80. Stocks/trusts? Either you really have considerable savings to start with (due to minimum order fees it's not really worth it to trade below 10k) or you got the stuff inherited at which point you're rich enough to not be affected by anything. Property? Unless you want to invest in the rural countryside that's so far off society that you'll be lucky when you have a 2x64k ISDN uplink you are not able to get property, especially not since the latest round of credit regulations which make it all but impossible for the ordinary person to get a mortgage. Oh and that all has the prerequisite of actually having money to save. The boomer generation has royally screwed up the current young generation. We're struggling to pay rent and (in the US) hope we won't have a major injury sending us straight into bankruptcy, and that's it. Money to save is something for the elite. > It baffles me how scared people are of inflation given how low it is at the moment in the West and has been for years. Low inflation has only been made possible by advances in "how to feed people with cheap garbage". Rents, energy, transportation - everything has skyrocketed, but due to bad selection in the comparison basket inflation is "low". Screw that metric.

raverbashing 9y ago

This is incorrect and some people will only understand once they suffer huge losses Nobody wants to hold an illiquid asset and BTC are doing their darnest to make it illiquid as possible.

rhino369 9y ago

It's not a deflationary currency because its not a currency. And even a deflationary currency can decrease in value if demand drops.

UncleMeat 9y ago

I can create a fork of BTC tomorrow that nobody really uses. It would be deflationary. Would you recommend that people store their value in MeatCoin?