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You can decentralize without block chain and proof of work. You can also create an infinite number of block chain "currencies" that are all decentralized. How

by YZF 9y ago

You can decentralize without block chain and proof of work. You can also create an infinite number of block chain "currencies" that are all decentralized. How many do we have already? Hundreds? What makes bitcoin special? Nothing. The only thing that makes it special is the ongoing speculation on its value, i.e. the supply of people buying it for the hope that other people will buy it at a higher price. Some of those buyers are "miners" some of those buyers buy it directly. But they mostly have one goal which is to find someone who will one day pay a lot more for the same bitcoin then they did.

21 9y ago
> What makes bitcoin special? Nothing. Being first is not nothing. It's called first mover advantage. > But they mostly have one goal which is to find someone who will one day pay a lot more for the same bitcoin then they did. Funny, you also just described VCs with that phrase. Put $1 mil in this company today in the hope of flipping it for $100 mil in two years. They also brag loudly about it, how they "exited" for many times more than they put in. I presume you also find VCs incredibly stupid and unproductive as bitcoin.
- YZF 9y ago
  VC's can't "flip" a company for $100M unless that company is actually valued at $100M. VCs invest in a team and an idea that they believe will build that company. This is why they are productive (as opposed to bitcoin). The way companies are valued, in general, is by their discounted cash flow. That is the only way you can sell a company for $100M is if you convince someone that company's business will earn at least $100M in present value (typically a lot more). This is exactly the difference between investment and speculation. EDIT: VC's don't need someone to pay more. They need a good business. It's true they're generally interested in selling those businesses but they might stay an owner for a very long time if it's a great business. It's not the other people who pay their money that makes VC's money, it's the business creating value. As to their motivation, of course it is partly to make more money through investment, but they don't rely on a bigger fool to succeed.
  - 21 9y ago
    I was talking about motivation. Why do the vast majority of VCs "invest"? Profit. Why do the vast majority of people buy cryptos? Profit. If you attack bitcoin buyers for wanting to get rich, you should feel the same about VCs.
Jommi 9y ago
>You can decentralize without blockchain and proof of work. Yes, but by using blockchain and proof of work we strive to create a system where centralization is the primary state as a result of mathematic equations and game theory. It doesn't need a higher force to govern it. It's inbuilt. Ahh, so you more have a fight with Bitcoin, rather than crypto in general? If you're looking for what makes Bitcoin special, the answer is Time. Time has allowed it to have many many man-hours of development worked poured into it, improving it, making it more resistant. Throughout the years multiple inefficiencies have been removed, and security breaches have been fixed. This is an advantage. Time has allowed its community to spread and grow, building into a powerful decentralized network. Do not underestimate the power of network effects. Time has molded its name into the eyes of people and into the history of the world. Everyone has heard of bitcoin. This is incredibly powerful. (Can also be argued to be a negative point though) You bring up miners as an example of bitcoin having no value, yet that is exactly where the value is. Decentralised mining is how bitcoin keeps its core value of being decentralized. The miners are thus being paid to upkeep this feature. Miners don't need to speculate on the value of Bitcoin, their profits in the long run will be equal to the value of this feature.
- YZF 9y ago
  I don't have any fight with bitcoin. I just view it as an amazing social phenomena and a demonstration of greed and people's desire for easy money. I was chatting with someone when bitcoin was at $20k and he was gushing about how much money he is going to be making, he just needs the stomach to keep holding through 40% dips. I wonder if he had the stomach to hold through $6k. What's going to happen when/if the cost of mining goes above the value of the bitcoin? Anyhow, let's talk in 5 years?
  - Jommi 9y ago
    Dissapointing. I was looking forward to how you would try and debate my points. So you agree that there is value in decentralization? I'm not here to debate the profits or moneymaking schemes. My only thesis is that Bitcoin has value, and one of the drivers of that value is it's decentralized and global nature. >What's going to happen when/if the cost of mining goes above the value of the bitcoin? There are simulations/discussions on this, and we're not sure. But the thing is, for the cost of mining to be over the value of bitcoin it would require a huge coordination of miners. Even now, when we saw Bitcoin lose a lot of value it immedietly resulted in a big amount of miners moving to other cryptocurrencies. This then resulted in difficulty reducing, and profits rising back up to previous levels. But I will admit that, similar to a black swan event, a "bitcoin mining death spiral", could be possible.

by YZF 9y ago

21 9y ago

> What makes bitcoin special? Nothing. Being first is not nothing. It's called first mover advantage. > But they mostly have one goal which is to find someone who will one day pay a lot more for the same bitcoin then they did. Funny, you also just described VCs with that phrase. Put $1 mil in this company today in the hope of flipping it for $100 mil in two years. They also brag loudly about it, how they "exited" for many times more than they put in. I presume you also find VCs incredibly stupid and unproductive as bitcoin.

YZF 9y ago
VC's can't "flip" a company for $100M unless that company is actually valued at $100M. VCs invest in a team and an idea that they believe will build that company. This is why they are productive (as opposed to bitcoin). The way companies are valued, in general, is by their discounted cash flow. That is the only way you can sell a company for $100M is if you convince someone that company's business will earn at least $100M in present value (typically a lot more). This is exactly the difference between investment and speculation. EDIT: VC's don't need someone to pay more. They need a good business. It's true they're generally interested in selling those businesses but they might stay an owner for a very long time if it's a great business. It's not the other people who pay their money that makes VC's money, it's the business creating value. As to their motivation, of course it is partly to make more money through investment, but they don't rely on a bigger fool to succeed.
- 21 9y ago
  I was talking about motivation. Why do the vast majority of VCs "invest"? Profit. Why do the vast majority of people buy cryptos? Profit. If you attack bitcoin buyers for wanting to get rich, you should feel the same about VCs.

Jommi 9y ago

>You can decentralize without blockchain and proof of work. Yes, but by using blockchain and proof of work we strive to create a system where centralization is the primary state as a result of mathematic equations and game theory. It doesn't need a higher force to govern it. It's inbuilt. Ahh, so you more have a fight with Bitcoin, rather than crypto in general? If you're looking for what makes Bitcoin special, the answer is Time. Time has allowed it to have many many man-hours of development worked poured into it, improving it, making it more resistant. Throughout the years multiple inefficiencies have been removed, and security breaches have been fixed. This is an advantage. Time has allowed its community to spread and grow, building into a powerful decentralized network. Do not underestimate the power of network effects. Time has molded its name into the eyes of people and into the history of the world. Everyone has heard of bitcoin. This is incredibly powerful. (Can also be argued to be a negative point though) You bring up miners as an example of bitcoin having no value, yet that is exactly where the value is. Decentralised mining is how bitcoin keeps its core value of being decentralized. The miners are thus being paid to upkeep this feature. Miners don't need to speculate on the value of Bitcoin, their profits in the long run will be equal to the value of this feature.

YZF 9y ago
I don't have any fight with bitcoin. I just view it as an amazing social phenomena and a demonstration of greed and people's desire for easy money. I was chatting with someone when bitcoin was at $20k and he was gushing about how much money he is going to be making, he just needs the stomach to keep holding through 40% dips. I wonder if he had the stomach to hold through $6k. What's going to happen when/if the cost of mining goes above the value of the bitcoin? Anyhow, let's talk in 5 years?
- Jommi 9y ago
  Dissapointing. I was looking forward to how you would try and debate my points. So you agree that there is value in decentralization? I'm not here to debate the profits or moneymaking schemes. My only thesis is that Bitcoin has value, and one of the drivers of that value is it's decentralized and global nature. >What's going to happen when/if the cost of mining goes above the value of the bitcoin? There are simulations/discussions on this, and we're not sure. But the thing is, for the cost of mining to be over the value of bitcoin it would require a huge coordination of miners. Even now, when we saw Bitcoin lose a lot of value it immedietly resulted in a big amount of miners moving to other cryptocurrencies. This then resulted in difficulty reducing, and profits rising back up to previous levels. But I will admit that, similar to a black swan event, a "bitcoin mining death spiral", could be possible.