7 ms·

Isn't the underlying value here mathematically provable scarcity ?

by ftufek 7y ago

hanselot 7y ago
Imagine a system existed whereby you could trade some time from your computer when it was idle for extra juice later. Some kind of credit if you will.
lalaland1125 7y ago
There is no true scarcity. I can create a clone of Bitcoin in seconds just by cloning a github repository and changing one line.
- nullc 7y ago
  Your clone of Bitcoin wouldn't be a 'clone' any more than a lead bar is a 'clone' of gold. You might call it bitcoin all you want, but no actualy bitcoin software would be fooled. (You might trick some people, but fraud has existed long before computers). It's a lot less expensive to reliably distinguish a fraudulent bitcoin from a fraudulent goal bar. So even if you hold the position that there is no perfect scarcity because fraud is possible-- the cost, difficulty, and success rate of that fraud matters greatly.
  - lalaland1125 7y ago
    My clone of bitcoin would have exactly the same properties as bitcoin. Your lead bar doesn't have any of the useful properties of gold (ductability, beauty, conductivity, etc).
    - ftufek 7y ago
      Except that your bitcoin won't have exactly the same properties as bitcoin, mainly the miners which do provide network security.
    - ascendantlogic 7y ago
      Except for the massive number of miners securing the existing Bitcoin network and creating the security that is the inherent value of said network.
    - nullc 7y ago
      For most applications (including Gold's most popular-by-value applications, -- jewelry and sitting in vaults) you can substitute it with other materials with equivalent (or better!) physical properties.
  - richk449 7y ago
    If you want an element that acts like gold (doesn’t oxidize, high electrical conductivity, high thermal conductivity, malleable, etc.), you need gold. You can’t replace it with lead and get the same results. If you want a string of bits that acts like bitcoin, you can replace it with Xcoin, for many values of X. You can even create your own coin which does whatever you need. You may not be able to replicate the network, which may provide some amount of scarcity, but it’s not the same as gold.
    - nullc 7y ago
      > doesn’t oxidize, high electrical conductivity, high thermal conductivity, malleable, etc. So-- silver? Sure silver oxidizes a bit, but the oxide is conductive too and silver itself is more conductive than gold! :)
  - drtillberg 7y ago
    If you and 1 other person use the cloned Bitcoin, that's a network. How many other participants do you need before new Bitcoin is comparable in every tangible way to old Bitcoin?
- 1996 7y ago
  Tell me, how do replicate the network effects of current miners? You know, the thing that prevents someone with decent mining power in their garage to take over your clone? (or do a doublespend, or whatever) The network effect is security. Which come from the expenditure. Which is sustainable with the rising price. Which was baked in through the declining emission curve. Beautifully well thought, and well executed. I too was doubtful about bitcoin at first. It's just plain obvious now: first mover advantage, leading to the development of highly specific ASICs, with a side advantage of allowing the cross border trade of electricity when turned it into mining power. So if you live in some isolated place but with cheap energy, money!! BTC is too big to fail. A success that can't be replicated or taken down as it was ignored for too long. Even more unimaginable now that it benefits some people who wouldn't let them happen without a fight, and who have the power and the money to give this fight.
- grubles 7y ago
  Which will be promptly rejected as invalid since the nodes on the Bitcoin network validate everything. This is partially why (among other reasons) Bitcoin is transformative tech. It can resist quite easily individuals trying to forcefully change aspects of it, like say, cloning the entire supply of bitcoin.
richk449 7y ago
How is that valuable, aside from ones ability to speculate on how much people will want it in the future? As an aside, I agree with the other poster that there is no intrinsic scarcity to bitcoin, because anyone can create bitcoinN which are nearly identical to bitcoin. I say nearly because you can’t necessarily replicate the network, so the scarcity really depends on complicated emergent human behavior.
- grubles 7y ago
  Your "nearly" identical is why they are completely different. Only bitcoins are valid on the Bitcoin network. Any clonecoin's token will be rejected since nodes on the Bitcoin network validate transactions and blocks that are mined. Take any of the past 2 years' forks of Bitcoin (e.g. Bitcoin Cash, Bitcoin Gold, Super Bitcoin, etc.) and try to submit a transaction to the actual legitimate Bitcoin network. It will fail. One of Bitcoin's main technological achievements is solving this type of digital duplication problem. If anyone can just copy-and-paste new bitcoins into the system, it will fail.
  - semiotagonal 7y ago
    You wouldn't try to submit it to the "actual legitimate Bitcoin network" though. You'd bootstrap a whole new network instead. People might prefer a new blockchain that starts with a more even distribution, instead of enriching early adopters of BTC. That said, blockchain may not work at all, as applied to digital currencies. The abilities to revoke and expropriate are tools, like prisons are. Their use, on occasion, is just. Society might not want to see those tools discarded.
    - solotronics 7y ago
      There are already thousands of Bitcoin clones with their own blockchains and they are basically worthless.
    - grubles 7y ago
      Your whole new network wouldn't be Bitcoin then. Therefore there is no cloning. Bitcoin scarcity remains in tact. Bitcoin's initial distribution was as preferable as it can really get. It was announced to a mailing list of people most likely to pay attention to it. Anyone with a computer could join the network and be rewarded with bitcoins. You didn't even need to have a fast computer. The software was free and open source. There isn't much you can improve upon without introducing trust or maligned identification schemes.
marcoseliziario 7y ago
Variola virus samples are pretty scarce too. It doesn't make them a hot commodity.

Isn't the underlying value here mathematically provable scarcity ?

by ftufek 7y ago

Isn't the underlying value here mathematically provable scarcity ?

Imagine a system existed whereby you could trade some time from your computer when it was idle for extra juice later. Some kind of credit if you will.

lalaland1125 7y ago

There is no true scarcity. I can create a clone of Bitcoin in seconds just by cloning a github repository and changing one line.

nullc 7y ago
Your clone of Bitcoin wouldn't be a 'clone' any more than a lead bar is a 'clone' of gold. You might call it bitcoin all you want, but no actualy bitcoin software would be fooled. (You might trick some people, but fraud has existed long before computers). It's a lot less expensive to reliably distinguish a fraudulent bitcoin from a fraudulent goal bar. So even if you hold the position that there is no perfect scarcity because fraud is possible-- the cost, difficulty, and success rate of that fraud matters greatly.
- lalaland1125 7y ago
  My clone of bitcoin would have exactly the same properties as bitcoin. Your lead bar doesn't have any of the useful properties of gold (ductability, beauty, conductivity, etc).
  - ftufek 7y ago
    Except that your bitcoin won't have exactly the same properties as bitcoin, mainly the miners which do provide network security.
  - ascendantlogic 7y ago
    Except for the massive number of miners securing the existing Bitcoin network and creating the security that is the inherent value of said network.
  - nullc 7y ago
    For most applications (including Gold's most popular-by-value applications, -- jewelry and sitting in vaults) you can substitute it with other materials with equivalent (or better!) physical properties.
- richk449 7y ago
  If you want an element that acts like gold (doesn’t oxidize, high electrical conductivity, high thermal conductivity, malleable, etc.), you need gold. You can’t replace it with lead and get the same results. If you want a string of bits that acts like bitcoin, you can replace it with Xcoin, for many values of X. You can even create your own coin which does whatever you need. You may not be able to replicate the network, which may provide some amount of scarcity, but it’s not the same as gold.
  - nullc 7y ago
    > doesn’t oxidize, high electrical conductivity, high thermal conductivity, malleable, etc. So-- silver? Sure silver oxidizes a bit, but the oxide is conductive too and silver itself is more conductive than gold! :)
- drtillberg 7y ago
  If you and 1 other person use the cloned Bitcoin, that's a network. How many other participants do you need before new Bitcoin is comparable in every tangible way to old Bitcoin?
1996 7y ago
Tell me, how do replicate the network effects of current miners? You know, the thing that prevents someone with decent mining power in their garage to take over your clone? (or do a doublespend, or whatever) The network effect is security. Which come from the expenditure. Which is sustainable with the rising price. Which was baked in through the declining emission curve. Beautifully well thought, and well executed. I too was doubtful about bitcoin at first. It's just plain obvious now: first mover advantage, leading to the development of highly specific ASICs, with a side advantage of allowing the cross border trade of electricity when turned it into mining power. So if you live in some isolated place but with cheap energy, money!! BTC is too big to fail. A success that can't be replicated or taken down as it was ignored for too long. Even more unimaginable now that it benefits some people who wouldn't let them happen without a fight, and who have the power and the money to give this fight.
grubles 7y ago
Which will be promptly rejected as invalid since the nodes on the Bitcoin network validate everything. This is partially why (among other reasons) Bitcoin is transformative tech. It can resist quite easily individuals trying to forcefully change aspects of it, like say, cloning the entire supply of bitcoin.

richk449 7y ago

How is that valuable, aside from ones ability to speculate on how much people will want it in the future? As an aside, I agree with the other poster that there is no intrinsic scarcity to bitcoin, because anyone can create bitcoinN which are nearly identical to bitcoin. I say nearly because you can’t necessarily replicate the network, so the scarcity really depends on complicated emergent human behavior.

grubles 7y ago
Your "nearly" identical is why they are completely different. Only bitcoins are valid on the Bitcoin network. Any clonecoin's token will be rejected since nodes on the Bitcoin network validate transactions and blocks that are mined. Take any of the past 2 years' forks of Bitcoin (e.g. Bitcoin Cash, Bitcoin Gold, Super Bitcoin, etc.) and try to submit a transaction to the actual legitimate Bitcoin network. It will fail. One of Bitcoin's main technological achievements is solving this type of digital duplication problem. If anyone can just copy-and-paste new bitcoins into the system, it will fail.
- semiotagonal 7y ago
  You wouldn't try to submit it to the "actual legitimate Bitcoin network" though. You'd bootstrap a whole new network instead. People might prefer a new blockchain that starts with a more even distribution, instead of enriching early adopters of BTC. That said, blockchain may not work at all, as applied to digital currencies. The abilities to revoke and expropriate are tools, like prisons are. Their use, on occasion, is just. Society might not want to see those tools discarded.
  - solotronics 7y ago
    There are already thousands of Bitcoin clones with their own blockchains and they are basically worthless.
  - grubles 7y ago
    Your whole new network wouldn't be Bitcoin then. Therefore there is no cloning. Bitcoin scarcity remains in tact. Bitcoin's initial distribution was as preferable as it can really get. It was announced to a mailing list of people most likely to pay attention to it. Anyone with a computer could join the network and be rewarded with bitcoins. You didn't even need to have a fast computer. The software was free and open source. There isn't much you can improve upon without introducing trust or maligned identification schemes.

marcoseliziario 7y ago

Variola virus samples are pretty scarce too. It doesn't make them a hot commodity.