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The most remarkable thing about BTC is diffusion of responsibility. If it was issued and marketed by a single entity the participants would be in hot water by n

by DenisM 8y ago

The most remarkable thing about BTC is diffusion of responsibility. If it was issued and marketed by a single entity the participants would be in hot water by now for violating the Securities and Exchange laws. However here we had one non-affiliated group of bigger miners issuing the coins and another group of volunteer enthusiasts hyping them up. Since the second group was not hired by the first, the first group cannot be held accountable, while the second group has agents too numerous and too small to go after. This is similar to the housing bubble, where the industry collectively hyped up the "investment" promising huge returns, yet no one was to blame when the music stopped. Watch out for mo ways to diffuse responsibility, that's where "action" will be. Maybe we can nip it in the bud sooner if all keep an eye out.

jMyles 8y ago
I assert that the diffusion of responsibility is a key feature of decentralized technology precisely because it renders us unable to "nip it in the bud".
- wpietri 8y ago
  Unfortunately, it does so for everybody. Including people who have a strong interest in the world not seeing Bitcoin as scam central. It all strikes me as a classic tragedy of the commons.
- hudon 8y ago
  Not really. When the MPAA wanted action taken on torrented movies, they didn’t just throw their hands up in the air and go “whelp, it’s decentralized!“, they went after the authors of the protocol, the ISPs, hell even domain name registrars (that listed torrent websites). You can still torrent films, but you could get prosecuted or fined. Furthermore, some content is completely censored from torrent sites. All that to say, it’s not clear to me that “decentralized technology” can prevent the very human process of holding others accountable. It does slow down that process for now, since the software obfuscates what’s going on (who’s doing what), but regulators will understand how the tech works eventually...
  - jMyles 8y ago
    I think that in very high-level terms, you're quite correct. You say, for example, 'it’s not clear to me that “decentralized technology” can prevent the very human process of holding others accountable' - I mean, yeah. That's a good starting point. On the other hand, your comment betrays some of the underlying revelation here: indeed, the MPAA has gone after the centralized components of peer-to-peer file sharing, as you point out. Yet, the bit torrent protocol remains as strong as ever (which, to be fair, isn't terribly strong in the first place). The internet has learnt and will continue to learn from this, and the next generation of censorship resistance will decentralize some of the points of failure you have listed (which we centralized in the bit torrent iteration). As for your last point: regulators understanding how the tech works is not meaningful if regulators are no longer the ones making decisions about the world. That will be a wonderful shift if our goals include peace and justice, which governments have consistently and correctly seen as threats to their existence. At the end of the day, my point is really this: even in the most wild-eyed crypto-anarchist fantasy, everything is fine. There's no need for the doom and gloom that we're routinely seeing on HN in threads like this.
    - hudon 8y ago
      Sorry but I don’t buy this anarchist ideology. Evidence shows that these are the most peaceful times in human history, and governments are bigger than ever. Sure, we need to be smart about keeping leaders in check, and progress is jagged, but overall, aren’t you much happier to be born now than 3000 years ago? Would you have preferred to be born at any other time? Because if not, then you must realize that we’re here due to our capacity to unite and form a government that on average contributes to our progress (even if that progress is, admittedly, jagged rather than linear).
      - jMyles 8y ago
        > aren’t you much happier to be born now than 3000 years ago? Indeed I am - this is the most exciting time I can imagine being alive. And I agree in full with everything you've said. However, I think that governments, which have been essential for many of the developments we've enjoyed so far (and this is despite their reliably selfish and monopolistic tendencies), have largely run their course and are less useful with each passing day. I am thankful even for my own government (in the USA), despite it being run in a completely childish fashion at this moment. But recognizing the importance of something doesn't mean that I want it to live forever. Indeed, I think it often means being willing to let it go.
- sgt101 8y ago
  And yet, should it become illegal for people to exchange fiat for crypto and for domiciled entities to own crypto all the decentralisation in the world wouldn't help.
  - jMyles 8y ago
    I don't really see the connection. It seems to me that such a move will make decentralized money more valuable and more likely to be used, not less.
    - Nursie 8y ago
      Most people don't care about decentralised money. Stop the on/off ramps they currently use for speculation and the vast majority will stop speculating, as they were only in it for the get-rich-quick factor.
      - jMyles 8y ago
        Again, I don't think that making it illegal to transact in crypto will have the effect of "stop[ping] the on/off ramps" - I think the opposite is far more likely.
        Nursie 8y ago
        So you think that if, say, coinbase and others are made to stop accepting deposits, Joe and Jane Retail-Investor are going to seek illegal methods to continue 'investing'? I am think you overestimate people's interest, and underestimate just how much of a get-rich-quick bubble this has been.
  - stale2002 8y ago
    You are talking about an extreme edge case situation, where the entire world declares crypto to be illegal. I will agree that in this situation, crypto is probably dead. The much more likely scenario, though, is that a couple countries try to make crypto illegal, and other countries don't, and the decentralization of crypto makes it very difficult for the attacking country to stop it. The banning country isn't going to be able to target miners in other countries or take down exchanges that aren't located there. Crypto is still useful in this much more likely scenario. Think countries like Venezuela. They don't want people moving money outside the country, and yet people are doing that right now, with crypto, and the Venezuelan government can't stop it.
krrrh 8y ago
Preston Byrne pointed out since there is no pyramid, this can’t be called a Ponzi scheme. It deserves a new name, the “Nakamoto scheme”: https://prestonbyrne.com/2017/12/08/bitcoin_ponzi/ https://prestonbyrne.com/2017/12/08/bitcoin_ponzi/
- GavinMcG 8y ago
  "Scheme" implies a unified/central schemer, though. We can already call it a fad, or a mania (a la tulip mania).
  - hndamien 8y ago
    It certainly does seem to be a "scheme" but I wonder how it compares to other fiat or gold currency when looked at through a "scheme" lens.
    - hndamien 8y ago
      Down votes, no comment. Par for the course here.
      - dang 8y ago
        Please don't break the site guidelines. https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html
        hndamien 8y ago
        “Please don't comment about the voting on comments. It never does any good, and it makes boring reading.” Thanks, I actually had no idea about this one, and nobody ever bothered to point it out to me. I do find it disheartening though that anything against the grain in this forum often results in downvote and no comment. That said, this will be my final mention of the issue and I’ll just eat the negative karma from here rather than self censor (except on the issue as per the guideline).
pera 8y ago
> If it was issued and marketed by a single entity the participants would be in hot water by now for violating the Securities and Exchange laws. What laws are being violated by Bitcoin's participants?
- carleverett 8y ago
  Certainly not any SEC laws. Jay Clayton, SEC Chairman, has explicitly said that Bitcoin is not a security: https://www.investopedia.com/news/sec-chair-says-bitcoin-not-security/ https://www.investopedia.com/news/sec-chair-says-bitcoin-not... If they were in violation of SEC laws, the parent comment is still be inaccurate since Bitcoin's immutable ledger would mean the SEC would absolutely be pursuing violations, like they are with other ICOs.
dnautics 8y ago
> This is similar to the housing bubble, where the industry collectively hyped up the "investment" promising huge returns, yet no one was to blame when the music stopped. Except with the housing bubble the hype was generated by the government, with Republicans touting an ownership culture party line and Democrats applauding expert control of the economy by genius planners. Secondly, in the housing bubble asset prices were pumped by leveraged (debt-based) transactions. The Hallmark of this is a collapse that happens twice as fast as the run-up. While certainly some people made leveraged plays on crypto I doubt it was very many, which means that the damage is contained to the sector (less domino effect of defaulting entities causing their lenders to default), evidenced by how the crypto collapse is twice as slow than the run-up.
rblion 8y ago
This articulates the situation perfectly. A clear lack of checks and balances.
tim333 8y ago
The entity behind BTC was smart to remain kind of anonymous.

by DenisM 8y ago

jMyles 8y ago

I assert that the diffusion of responsibility is a key feature of decentralized technology precisely because it renders us unable to "nip it in the bud".

wpietri 8y ago
Unfortunately, it does so for everybody. Including people who have a strong interest in the world not seeing Bitcoin as scam central. It all strikes me as a classic tragedy of the commons.
hudon 8y ago
Not really. When the MPAA wanted action taken on torrented movies, they didn’t just throw their hands up in the air and go “whelp, it’s decentralized!“, they went after the authors of the protocol, the ISPs, hell even domain name registrars (that listed torrent websites). You can still torrent films, but you could get prosecuted or fined. Furthermore, some content is completely censored from torrent sites. All that to say, it’s not clear to me that “decentralized technology” can prevent the very human process of holding others accountable. It does slow down that process for now, since the software obfuscates what’s going on (who’s doing what), but regulators will understand how the tech works eventually...
- jMyles 8y ago
  I think that in very high-level terms, you're quite correct. You say, for example, 'it’s not clear to me that “decentralized technology” can prevent the very human process of holding others accountable' - I mean, yeah. That's a good starting point. On the other hand, your comment betrays some of the underlying revelation here: indeed, the MPAA has gone after the centralized components of peer-to-peer file sharing, as you point out. Yet, the bit torrent protocol remains as strong as ever (which, to be fair, isn't terribly strong in the first place). The internet has learnt and will continue to learn from this, and the next generation of censorship resistance will decentralize some of the points of failure you have listed (which we centralized in the bit torrent iteration). As for your last point: regulators understanding how the tech works is not meaningful if regulators are no longer the ones making decisions about the world. That will be a wonderful shift if our goals include peace and justice, which governments have consistently and correctly seen as threats to their existence. At the end of the day, my point is really this: even in the most wild-eyed crypto-anarchist fantasy, everything is fine. There's no need for the doom and gloom that we're routinely seeing on HN in threads like this.
  - hudon 8y ago
    Sorry but I don’t buy this anarchist ideology. Evidence shows that these are the most peaceful times in human history, and governments are bigger than ever. Sure, we need to be smart about keeping leaders in check, and progress is jagged, but overall, aren’t you much happier to be born now than 3000 years ago? Would you have preferred to be born at any other time? Because if not, then you must realize that we’re here due to our capacity to unite and form a government that on average contributes to our progress (even if that progress is, admittedly, jagged rather than linear).
    - jMyles 8y ago
      > aren’t you much happier to be born now than 3000 years ago? Indeed I am - this is the most exciting time I can imagine being alive. And I agree in full with everything you've said. However, I think that governments, which have been essential for many of the developments we've enjoyed so far (and this is despite their reliably selfish and monopolistic tendencies), have largely run their course and are less useful with each passing day. I am thankful even for my own government (in the USA), despite it being run in a completely childish fashion at this moment. But recognizing the importance of something doesn't mean that I want it to live forever. Indeed, I think it often means being willing to let it go.
sgt101 8y ago
And yet, should it become illegal for people to exchange fiat for crypto and for domiciled entities to own crypto all the decentralisation in the world wouldn't help.
- jMyles 8y ago
  I don't really see the connection. It seems to me that such a move will make decentralized money more valuable and more likely to be used, not less.
  - Nursie 8y ago
    Most people don't care about decentralised money. Stop the on/off ramps they currently use for speculation and the vast majority will stop speculating, as they were only in it for the get-rich-quick factor.
    - jMyles 8y ago
      Again, I don't think that making it illegal to transact in crypto will have the effect of "stop[ping] the on/off ramps" - I think the opposite is far more likely.
      - Nursie 8y ago
        So you think that if, say, coinbase and others are made to stop accepting deposits, Joe and Jane Retail-Investor are going to seek illegal methods to continue 'investing'? I am think you overestimate people's interest, and underestimate just how much of a get-rich-quick bubble this has been.
- stale2002 8y ago
  You are talking about an extreme edge case situation, where the entire world declares crypto to be illegal. I will agree that in this situation, crypto is probably dead. The much more likely scenario, though, is that a couple countries try to make crypto illegal, and other countries don't, and the decentralization of crypto makes it very difficult for the attacking country to stop it. The banning country isn't going to be able to target miners in other countries or take down exchanges that aren't located there. Crypto is still useful in this much more likely scenario. Think countries like Venezuela. They don't want people moving money outside the country, and yet people are doing that right now, with crypto, and the Venezuelan government can't stop it.

krrrh 8y ago

Preston Byrne pointed out since there is no pyramid, this can’t be called a Ponzi scheme. It deserves a new name, the “Nakamoto scheme”: https://prestonbyrne.com/2017/12/08/bitcoin_ponzi/ https://prestonbyrne.com/2017/12/08/bitcoin_ponzi/

GavinMcG 8y ago
"Scheme" implies a unified/central schemer, though. We can already call it a fad, or a mania (a la tulip mania).
- hndamien 8y ago
  It certainly does seem to be a "scheme" but I wonder how it compares to other fiat or gold currency when looked at through a "scheme" lens.
  - hndamien 8y ago
    Down votes, no comment. Par for the course here.
    - dang 8y ago
      Please don't break the site guidelines. https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html
      - hndamien 8y ago
        “Please don't comment about the voting on comments. It never does any good, and it makes boring reading.” Thanks, I actually had no idea about this one, and nobody ever bothered to point it out to me. I do find it disheartening though that anything against the grain in this forum often results in downvote and no comment. That said, this will be my final mention of the issue and I’ll just eat the negative karma from here rather than self censor (except on the issue as per the guideline).

pera 8y ago

> If it was issued and marketed by a single entity the participants would be in hot water by now for violating the Securities and Exchange laws. What laws are being violated by Bitcoin's participants?

carleverett 8y ago
Certainly not any SEC laws. Jay Clayton, SEC Chairman, has explicitly said that Bitcoin is not a security: https://www.investopedia.com/news/sec-chair-says-bitcoin-not-security/ https://www.investopedia.com/news/sec-chair-says-bitcoin-not... If they were in violation of SEC laws, the parent comment is still be inaccurate since Bitcoin's immutable ledger would mean the SEC would absolutely be pursuing violations, like they are with other ICOs.

dnautics 8y ago

> This is similar to the housing bubble, where the industry collectively hyped up the "investment" promising huge returns, yet no one was to blame when the music stopped. Except with the housing bubble the hype was generated by the government, with Republicans touting an ownership culture party line and Democrats applauding expert control of the economy by genius planners. Secondly, in the housing bubble asset prices were pumped by leveraged (debt-based) transactions. The Hallmark of this is a collapse that happens twice as fast as the run-up. While certainly some people made leveraged plays on crypto I doubt it was very many, which means that the damage is contained to the sector (less domino effect of defaulting entities causing their lenders to default), evidenced by how the crypto collapse is twice as slow than the run-up.

rblion 8y ago

This articulates the situation perfectly. A clear lack of checks and balances.

tim333 8y ago

The entity behind BTC was smart to remain kind of anonymous.