6 ms·

> The blockchain got distracted by finance. No, it was about finance right from the start, says so right there in the title of the paper ("cash"). It got dist

by brazzy 9y ago

> The blockchain got distracted by finance. No, it was about finance right from the start, says so right there in the title of the paper ("cash"). It got distracted by politics and greed. What I mean with greed is obvious, and I guess it was kinda inevitable. Politics is a more interesting angle: many blockchain/bitcoin afficionados seem to be of the Libertarian persuasion who think the main point is to prevent government interference, especially inflation. And they seem to thik this was Satoshi's primary goal as well. And here I'm a bit baffled: I can't find that in the original paper. Did Satoshi state any political goals in other communications? I gather that he was actively involved in the early Bitcoin community for some time.

colanderman 9y ago
Intended or not, Satoshi ensured, by artificially capping Bitcoin's supply, that Bitcoin would be deflationary.
- tedeh 9y ago
  And he made a great mistake in that, by encouraging hoarding instead of spending.
  - CryptoPunk 9y ago
    The empirical evidence contradicts this theory. Transaction volumes doubled year over year until the block size limit was reached.
    - rulum 9y ago
      Yeah but it was for speculative trading (and gambling, lots and lots of gambling sites), not for "using it" (to buy goods, exchange value). There is nothing to do with all those cryptocoins other than trading them between each other.
      - snikeris 9y ago
        When people spend cash at a casino they're not "using it"?
        rulum 9y ago
        Yes they are, but if that cash only works across casinos (think casino tokens / chips) and nowhere else, would you take it seriously?
  - BLanen 9y ago
    Pretty ironic. Making incentives to not spend 'cash'.
    - GenericsMotors 9y ago
      21st century's version of the gold bug :)
  - benlorenzetti 9y ago
    On the other hand this helped attract early investment and is a reason Bitcoin initially rose to such heights. There is nothing wrong with a deflationary currency once the rate of supply side deflation becomes small. Worthy investments will still be worthy investments and it helps the wealth of technological progress be distributed to the working class. Federal Reserve Notes are themselves arguably deflationary in nature except that remittance payments to citizens are taxed at 100%. Bitcoin has other problems though.
    - rulum 9y ago
      I don't think bitcoin "rose to such heights" in terms of success. It appreciated in value arguably due to a speculation despite having no legitimate use (as of yet) due to its deflationary nature. So everyone wanted a piece of the pie before it ran out, the perceived scarcity drove people to get some and hoard. Hoard something that had no use. In my opinion, a future successful digital decentralised currency should find a way to prevent itself from being seen as an "investment opportunity". That is not what money is for. That attitude creates bubbles, and "get rich quick" types. You can't have functional money without price stability. The deflationary property of bitcoin works against that. So IMO bitcoin appreciating in value and creating bubbles along the way is not a good thing for bitcoin itself. You shouldn't need to "invest" in a currency, you need to use it. It needs to be trusted and accepted. Many people remember the million dollar pizza now. No one wants to be that guy. Even if BTC was universally accepted now, not many holders would dare to use it to buy things. Because in their mind, BTC is poised to appreciate in value whereas fiat will collapse, so they'd use their fiat instead. If you have $5 in one hand, and a lottery ticket with perceived high odds you bought for $5, and the store accepts both as payment, why would you use the lottery ticket to buy things?
      - benlorenzetti 9y ago
        I agree that bitcoins problems include not having relatively fixed-rate use cases in the future, like paying taxes and your salary. And you make a good point that it will be socially easier for society to adopt a new currency if early investors aren't getting 10x returns for being first. But any new currency is going to offer the opportunity for capital gains as long as it's competition includes the U.S. Dollar, because almost by definition a better alternative to the dollar would be deflationary relative to the dollar. My point is that small rates of deflation aren't bad in a currency and bitcoins fixed size is not really a problem as long as you can trade small enough increments. Also fixed size is not even deflationary, it's just fixed unless something beneficial happens on the demand side like manufacturing cars with less materials. At the same time fixed size is not really a feature though either. You have the whole number line available why not use it? Bitcoins real problem is that it's not a "victory against entropy" like gold coins were in ancient times or reserve notes which can appease Uncle Sam in the future are today. Bitcoin is quite the opposite in fact, because we are dissipaiting so much concentrated energy to maintain the system. It's ironic because bitcoins greatest success is making us imagine currencies that don't dissipate value. I'm pessimistic that there is a distributed solution to this beside just electricity or energy itself, and we're obviously not quite at that point technologically yet.
dsacco 9y ago
> No, it was about finance right from the start, says so right there in the title of the paper ("cash"). I agree with you that Bitcoin was originally conceived to solve digital cash problems (like double spending). But I think the parent's point (which I also agree with) is that the actual utility of modern blockchains, regardless of original intentions, is in strong fault-tolerant systems. By any reasonable standard, Bitcoin itself has not matured into a strong currency usable for day to day cash payments. It has extremely high volatility, slow transaction verification and very high transaction fees. I think it's good that it was developed (it inspired a lot of follow-up R&D), and you can make a case for it as a store of value, but it's not really suitable as a payments platform whatsoever. But that failure doesn't diminish its main contribution, which is thermodynamically guaranteed cryptographic resilience and fault tolerance.
- xkarga00 9y ago
  I think that the area where you want fault-tolerance the most is decentralized cash. If you are going to take control of your money you better do it in a fault-tolerant system. Many people don't care about it today but there are those who do. That's why cryptocurrency is the real killer app for blockchain, like it or not. To your comments re bitcoin, it sounds to me like somebody complaining that Internet is slow back in the 90s/00s. EDIT: I am not pontificating in favor of bitcoin. It's just that the technology is still immature but there is a lot of great and promising work happening today.
  - dsacco 9y ago
    > I think that the area where you want fault-tolerance the most is decentralized cash. ...Really? That's one application, sure, but I hardly think it compares to the generalizable usage of cryptographic fault-tolerance assurance in distributed systems. I would consider the elimination of trusted third parties in more well-established and widely used cryptographic protocols (like CAa) or improvements to e.g. NTP node fault-tolerance to be more presently and practically useful than decentralized payments (in particular, because blockchains are much more useful for the former examples than the latter in the present day). > Many people don't care about it today but there are those who do. That's why cryptocurrency is the real killer app for blockchain, like it or not. I don't have an emotional investment in what use case becomes the most successful for blockchains in perpetuity, so it isn't a matter of "liking" or "not liking" any particular application. Rather, I'm speaking in terms of present facts, and purposely not making any points about the future. Sure, people could become passionate en masse about seizing control of their assets in a decentralized, trustless, permissionless, etc systems. I'm not discounting that possibility. But in the present case, blockchains exhibit far more utility for resolving hard problems in domains of computer science than they do for cryptocurrencies. > To your comments re bitcoin, it sounds to me like somebody complaining that Internet is slow back in the 90s/00s. I never considered the internet slow in either of those decades because it was all I knew. More to the point, I think you mistake me for someone who is bearish on cryptocurrencies or blockchains in general - I'm emphatically not. I just think that Bitcoin is not going to be the actual winner for that use case, and regardless of future innovations, it is pretty clearly not succeeding now, either, for the reasons I've already outlined.
deleted 9y ago
[deleted]
namelost 9y ago
The Times 03/Jan/2009 Chancellor on brink of second bailout for banks Whoever Satoshi is, he's probably not a Keynesian.
- brazzy 9y ago
  Ah, that leads me to the https://en.bitcoin.it/wiki/Genesis_block https://en.bitcoin.it/wiki/Genesis_block which can certainly be interpreted as indication of political intent from Satoshi. Are there any others?
  - CryptoPunk 9y ago
    yes: http://p2pfoundation.ning.com/m/discussion?id=2003008%3ATopic%3A9402 http://p2pfoundation.ning.com/m/discussion?id=2003008%3ATopi... >>The root problem with conventional currency is all the trust that's required to make it work. The central bank must be trusted not to debase the currency, but the history of fiat currencies is full of breaches of that trust. Banks must be trusted to hold our money and transfer it electronically, but they lend it out in waves of credit bubbles with barely a fraction in reserve. We have to trust them with our privacy, trust them not to let identity thieves drain our accounts. Their massive overhead costs make micropayments impossible. https://www.mail-archive.com/cryptography@metzdowd.com/msg09971.html https://www.mail-archive.com/cryptography@metzdowd.com/msg09... >>Yes, but we can win a major battle in the arms race and gain a new territory of freedom for several years. >>Governments are good at cutting off the heads of a centrally controlled networks like Napster, but pure P2P networks like Gnutella and Tor seem to be holding their own.
bringtheaction 9y ago
> Did Satoshi state any political goals in other communications? The genesis block contains, among other data, a reference to the front page of the January 3rd 2009 edition of The Times; The Times 03/Jan/2009 Chancellor on brink of second bailout for banks Whether this was simply to prove that the genesis block was mined no sooner than January 3rd 2009, or if additionally that date and that news paper was chosen for the headline of that day one cannot know but a lot of people choose to interpret it as a comment on the instability caused by fractional-reserve banking. https://en.bitcoin.it/wiki/Genesis_block https://en.bitcoin.it/wiki/Genesis_block Edit: Between the time that I opened this tab and when I got around to writing my comment someone else already said it. Oh well.
deleted 9y ago
[deleted]

by brazzy 9y ago

colanderman 9y ago

Intended or not, Satoshi ensured, by artificially capping Bitcoin's supply, that Bitcoin would be deflationary.

tedeh 9y ago
And he made a great mistake in that, by encouraging hoarding instead of spending.
- CryptoPunk 9y ago
  The empirical evidence contradicts this theory. Transaction volumes doubled year over year until the block size limit was reached.
  - rulum 9y ago
    Yeah but it was for speculative trading (and gambling, lots and lots of gambling sites), not for "using it" (to buy goods, exchange value). There is nothing to do with all those cryptocoins other than trading them between each other.
    - snikeris 9y ago
      When people spend cash at a casino they're not "using it"?
      - rulum 9y ago
        Yes they are, but if that cash only works across casinos (think casino tokens / chips) and nowhere else, would you take it seriously?
- BLanen 9y ago
  Pretty ironic. Making incentives to not spend 'cash'.
  - GenericsMotors 9y ago
    21st century's version of the gold bug :)
- benlorenzetti 9y ago
  On the other hand this helped attract early investment and is a reason Bitcoin initially rose to such heights. There is nothing wrong with a deflationary currency once the rate of supply side deflation becomes small. Worthy investments will still be worthy investments and it helps the wealth of technological progress be distributed to the working class. Federal Reserve Notes are themselves arguably deflationary in nature except that remittance payments to citizens are taxed at 100%. Bitcoin has other problems though.
  - rulum 9y ago
    I don't think bitcoin "rose to such heights" in terms of success. It appreciated in value arguably due to a speculation despite having no legitimate use (as of yet) due to its deflationary nature. So everyone wanted a piece of the pie before it ran out, the perceived scarcity drove people to get some and hoard. Hoard something that had no use. In my opinion, a future successful digital decentralised currency should find a way to prevent itself from being seen as an "investment opportunity". That is not what money is for. That attitude creates bubbles, and "get rich quick" types. You can't have functional money without price stability. The deflationary property of bitcoin works against that. So IMO bitcoin appreciating in value and creating bubbles along the way is not a good thing for bitcoin itself. You shouldn't need to "invest" in a currency, you need to use it. It needs to be trusted and accepted. Many people remember the million dollar pizza now. No one wants to be that guy. Even if BTC was universally accepted now, not many holders would dare to use it to buy things. Because in their mind, BTC is poised to appreciate in value whereas fiat will collapse, so they'd use their fiat instead. If you have $5 in one hand, and a lottery ticket with perceived high odds you bought for $5, and the store accepts both as payment, why would you use the lottery ticket to buy things?
    - benlorenzetti 9y ago
      I agree that bitcoins problems include not having relatively fixed-rate use cases in the future, like paying taxes and your salary. And you make a good point that it will be socially easier for society to adopt a new currency if early investors aren't getting 10x returns for being first. But any new currency is going to offer the opportunity for capital gains as long as it's competition includes the U.S. Dollar, because almost by definition a better alternative to the dollar would be deflationary relative to the dollar. My point is that small rates of deflation aren't bad in a currency and bitcoins fixed size is not really a problem as long as you can trade small enough increments. Also fixed size is not even deflationary, it's just fixed unless something beneficial happens on the demand side like manufacturing cars with less materials. At the same time fixed size is not really a feature though either. You have the whole number line available why not use it? Bitcoins real problem is that it's not a "victory against entropy" like gold coins were in ancient times or reserve notes which can appease Uncle Sam in the future are today. Bitcoin is quite the opposite in fact, because we are dissipaiting so much concentrated energy to maintain the system. It's ironic because bitcoins greatest success is making us imagine currencies that don't dissipate value. I'm pessimistic that there is a distributed solution to this beside just electricity or energy itself, and we're obviously not quite at that point technologically yet.

dsacco 9y ago

> No, it was about finance right from the start, says so right there in the title of the paper ("cash"). I agree with you that Bitcoin was originally conceived to solve digital cash problems (like double spending). But I think the parent's point (which I also agree with) is that the actual utility of modern blockchains, regardless of original intentions, is in strong fault-tolerant systems. By any reasonable standard, Bitcoin itself has not matured into a strong currency usable for day to day cash payments. It has extremely high volatility, slow transaction verification and very high transaction fees. I think it's good that it was developed (it inspired a lot of follow-up R&D), and you can make a case for it as a store of value, but it's not really suitable as a payments platform whatsoever. But that failure doesn't diminish its main contribution, which is thermodynamically guaranteed cryptographic resilience and fault tolerance.

xkarga00 9y ago
I think that the area where you want fault-tolerance the most is decentralized cash. If you are going to take control of your money you better do it in a fault-tolerant system. Many people don't care about it today but there are those who do. That's why cryptocurrency is the real killer app for blockchain, like it or not. To your comments re bitcoin, it sounds to me like somebody complaining that Internet is slow back in the 90s/00s. EDIT: I am not pontificating in favor of bitcoin. It's just that the technology is still immature but there is a lot of great and promising work happening today.
- dsacco 9y ago
  > I think that the area where you want fault-tolerance the most is decentralized cash. ...Really? That's one application, sure, but I hardly think it compares to the generalizable usage of cryptographic fault-tolerance assurance in distributed systems. I would consider the elimination of trusted third parties in more well-established and widely used cryptographic protocols (like CAa) or improvements to e.g. NTP node fault-tolerance to be more presently and practically useful than decentralized payments (in particular, because blockchains are much more useful for the former examples than the latter in the present day). > Many people don't care about it today but there are those who do. That's why cryptocurrency is the real killer app for blockchain, like it or not. I don't have an emotional investment in what use case becomes the most successful for blockchains in perpetuity, so it isn't a matter of "liking" or "not liking" any particular application. Rather, I'm speaking in terms of present facts, and purposely not making any points about the future. Sure, people could become passionate en masse about seizing control of their assets in a decentralized, trustless, permissionless, etc systems. I'm not discounting that possibility. But in the present case, blockchains exhibit far more utility for resolving hard problems in domains of computer science than they do for cryptocurrencies. > To your comments re bitcoin, it sounds to me like somebody complaining that Internet is slow back in the 90s/00s. I never considered the internet slow in either of those decades because it was all I knew. More to the point, I think you mistake me for someone who is bearish on cryptocurrencies or blockchains in general - I'm emphatically not. I just think that Bitcoin is not going to be the actual winner for that use case, and regardless of future innovations, it is pretty clearly not succeeding now, either, for the reasons I've already outlined.

deleted 9y ago

[deleted]

namelost 9y ago

The Times 03/Jan/2009 Chancellor on brink of second bailout for banks Whoever Satoshi is, he's probably not a Keynesian.

brazzy 9y ago
Ah, that leads me to the https://en.bitcoin.it/wiki/Genesis_block https://en.bitcoin.it/wiki/Genesis_block which can certainly be interpreted as indication of political intent from Satoshi. Are there any others?
- CryptoPunk 9y ago
  yes: http://p2pfoundation.ning.com/m/discussion?id=2003008%3ATopic%3A9402 http://p2pfoundation.ning.com/m/discussion?id=2003008%3ATopi... >>The root problem with conventional currency is all the trust that's required to make it work. The central bank must be trusted not to debase the currency, but the history of fiat currencies is full of breaches of that trust. Banks must be trusted to hold our money and transfer it electronically, but they lend it out in waves of credit bubbles with barely a fraction in reserve. We have to trust them with our privacy, trust them not to let identity thieves drain our accounts. Their massive overhead costs make micropayments impossible. https://www.mail-archive.com/cryptography@metzdowd.com/msg09971.html https://www.mail-archive.com/cryptography@metzdowd.com/msg09... >>Yes, but we can win a major battle in the arms race and gain a new territory of freedom for several years. >>Governments are good at cutting off the heads of a centrally controlled networks like Napster, but pure P2P networks like Gnutella and Tor seem to be holding their own.

bringtheaction 9y ago

> Did Satoshi state any political goals in other communications? The genesis block contains, among other data, a reference to the front page of the January 3rd 2009 edition of The Times; The Times 03/Jan/2009 Chancellor on brink of second bailout for banks Whether this was simply to prove that the genesis block was mined no sooner than January 3rd 2009, or if additionally that date and that news paper was chosen for the headline of that day one cannot know but a lot of people choose to interpret it as a comment on the instability caused by fractional-reserve banking. https://en.bitcoin.it/wiki/Genesis_block https://en.bitcoin.it/wiki/Genesis_block Edit: Between the time that I opened this tab and when I got around to writing my comment someone else already said it. Oh well.

deleted 9y ago

[deleted]