10 ms·

Bitcoin still makes no sense

83 points by meow_mix 6y ago

brighton36 6y ago
Bitcoin is a thneed.
ridaj 6y ago
It makes sense to me about as much as the trade in ancient coins, stamps, and other collectibles. These are reasonable asset classes if you like gambling, with a somewhat fixed supply, not a lot of industrial applications, and wild price fluctuations based entirely on subjective appreciation. Bitcoin is more liquid but otherwise the price dynamic looks about the same...
- sesuximo 6y ago
  AFAIK, stamps don’t use our resources enough to move prices for energy/chips/etc
  - ridaj 6y ago
    Right. It's scaled up. I suppose that if people became suddenly interested in old stamps to the tune of billions of dollars, stamp-dealing would also start competing for resources with the rest of the economy.
    - sesuximo 6y ago
      I think that’s wrong for a few reasons.... - a stamp uses a small amount of resources no matter how many stamps you want (more stamps may even be cheaper from economies of scale). - Bitcoin inherently relies on expensive computation to provide safety - each Bitcoin is more expensive than the last due to increasingly difficult nonces. - (dumb edge case) you can’t make old stamps so it’s hard to image using a lot of resources to find/make them. Obv not true for other products
      - bawolff 6y ago
        > each Bitcoin is more expensive than the last due to increasingly difficult nonces. Bitcoin difficulty can change in either direction.
  - toolz 6y ago
    bitcoin uses less resources than traditional banking. I think people should stop judging it in a vacuum and instead speak in relative terms. If energy use is a concern then fiat is the greater offender. https://bitcoinist.com/banks-consume-energy-bitcoin/ https://bitcoinist.com/banks-consume-energy-bitcoin/ further crypto would be a much more flexible domain at working towards reducing carbon emission than deeply embedded and slow changing fiat systems
    - root_axis 6y ago
      Bitcoin does not replace traditional banking even if you view it as a legitimate currency.
      - bingbong123 6y ago
        Why not? Do you think every financial service offered by traditional banks can't be coded and made more efficient using internet-native money (bitcoin)? If so, what services can't? People already use BTC as collateral for loans/mortgages ...which are two of the riskiest activities traditional banks engage in.
    - sesuximo 6y ago
      Banks use way less energy per customer
      - yownie 6y ago
        8 years vs 150 years of technology though
      - bingbong123 6y ago
        I've walked into many semi-empty downtown brick and mortar banks with 5-10 idle employees, you want to continue paying that "innefficiency tax" in every transaction/loan/wire/credit-card/etc...? I don't think people really think through the reason there is a 20% tax on financial activity that goes through traditional banking system.
- scoopertrooper 6y ago
  I guess the key difference is that less startups have bilked investors by peddling fantastical dreams of post-fiat ancient coin based economies.
  - bawolff 6y ago
    Maybe less tech startups, but im pretty sure a bunch of people popped up to bilk other people out of their money during the beenie baby craze.
    - scoopertrooper 6y ago
      I'm not sure if you're defending bitcoin or comparing people buying it to crazed beanie baby collectors. At least, nobody was talking about a beanie baby based financial system at the time - however adorable it may have been.
      - bawolff 6y ago
        I don't think bitcoin should be entirely dismissed as a scam (its more complex than that), but if we're going to compare it to a scam (and there are definitely plenty of scammers in the bitcoin ecosystem), i think its important to remember that neither scams nor speculative bubbles are new to human history.
        scoopertrooper 6y ago
        The important innovation of Bitcoin (and the like) was that it democratised the ability to scam. A band of techno-utopians created a technology (ideology?) that made it much easier and cheaper to empty the pockets of the gullible.
    - SrslyJosh 6y ago
      That's a pretty good comparison, because, like the energy and custom hardware thrown at bitcoin, beanie babies are also intrinsically useless at the scale they were sold.
  - 6y ago
tomerico 6y ago
The problem with Bitcoin and is that it creates real negative effects, with little positive effects to show for it. The most prominent negative effect is the huge energy waste, which doesn't help when we are trying to cut on our carbon footprint The second one is that it makes illegal activities easier, and at a larger scale. It's quite common right now for companies to be coerced pay millions of dollars to anonymous criminals, all enabled with cryptocurrencies. Unless equally sized positive effects would emerge, it creates a growing pressure on governments to regulate and potentially criminalize the usage of cryptocurrencies. If that happens, the monetary value will naturally fall down.
- immigration311 6y ago
  Making (certain) illegal activities easier is one of the primary positive effects.
  - codyb 6y ago
    I'll assume you're referring to obtaining drugs which many consider to be something that at the very least should not be punished by prison time (myself included), as opposed to say... the distribution of child pornography, ordering hit men, arms trafficking, or the selling of hacked credit card numbers, passwords, and zero days. If that was your idea, wouldn't we be better served by lobbying our politicians to move the needle on the drug war (seems to be happening) instead of creating volatile whale controlled crypto "currencies" which use huge amounts of electricity as our planet faces a climate change crises and which also enables all of the other really terrible illegal things listed?
    - postingpals 6y ago
      Personally I assumed they meant exchanging money in secret if you are a whistleblower and the government is after you.
      - bitxbitxbitcoin 6y ago
        Same. Or maybe you're someone who was born in a country embargoed by the United States and you want to accept payment for freelance work.
gjs278 6y ago
here comes the parade of salty nocoiners. stay poor.
seibelj 6y ago
Bitcoin is an asset the government simply cannot control. That’s the magic! Whether you think this is good or bad is for debate, but there are apps in every country where you can buy and hold bitcoin (even countries like Nigeria and Venezuela) and it doesn’t take that many people who value it globally to make BTC shoot up in price. If even 1 out of 1000 people on earth desired bitcoin, its value would go up and sustain it. So it doesn’t matter if 999 people dislike it - bitcoin (and crypto) is a niche that can grow much larger without much additional enthusiasm. And the fact it’s worth so much blows people’s minds, making it like a global phenomenon that markets itself every time it goes up. No one makes you buy bitcoin! If you don’t like it, just ignore it. I could list many more arguments here as to why different sorts of people value it, from libertarians to drug dealers to hedge funds to people in countries that have terrible fiat currencies and corrupt central banks, but ultimately it’s a variation of the government not having control. One final thought is that the term “currency” confuses a lot of people. Whether it can actually be used like a dollar is moot - it’s an asset that can be used sometimes like a currency, but being a true currency is not required for utility and value. It’s a misnomer.
- Skunkleton 6y ago
  > Bitcoin is an asset the government simply cannot control. It certainly can, at least if you intend to exchange it for tangible goods or services, or if you convert it to a government currency. Why do you think these sorts of transactions cannot be regulated?
  - seibelj 6y ago
    The settlement layer is purely peer to peer. Governments can enact laws to make actions illegal, and tougher for centralized entities like banks and corporations from using it. But there are addresses out there known to authorities with hundreds of millions of dollars in stolen bitcoin - and there is absolutely nothing they can do to prevent it from being moved. If you have the private key, you own the coins.
    - Skunkleton 6y ago
jimmysong 6y ago
Posts like these make it clear to me that the author does not really understand money, not Bitcoin. It's hard to reason about what Bitcoin's advantages are without first considering what the purpose of money is and the analysis from this article is mostly just sniping at the edges about some of the perceived flaws and not the actual usefulness which is the good part of the trade-off. For a better understanding of money and why Bitcoin is a better money, I would recommend this article: https://vijayboyapati.medium.com/the-bullish-case-for-bitcoin-6ecc8bdecc1 https://vijayboyapati.medium.com/the-bullish-case-for-bitcoi... I'll also toot my own horn a bit which also delves into this confusion: https://www.amazon.com/Little-Bitcoin-Book-Matters-Finances/dp/1641990503 https://www.amazon.com/Little-Bitcoin-Book-Matters-Finances/...
- bitxbitxbitcoin 6y ago
  Heya Jimmy! Glad to see you on HN. In case anyone would like a YT video so they can listen/watch at 2x instead of read... check out: The Complete Case for Bitcoin. https://www.youtube.com/watch?v=xjeXIGWY2DI&ab_channel=Blockedia https://www.youtube.com/watch?v=xjeXIGWY2DI&ab_channel=Block...
  - garmaine 6y ago
    I can read much faster than 2x the speed of a YouTube video...
- ridaj 6y ago
  That article is interesting, but I have to ask about the conclusion: > Beyond the financial case for Bitcoin, its rise as a non-sovereign store of value will have profound geopolitical consequences. A global, non-inflationary reserve currency will force nation-states to alter their primary funding mechanism from inflation to direct taxation, which is far less politically palatable. Isn't this all backwards? In the past, when it was politically inconvenient not to be able to inflate money, governments abandoned gold-backed money and went to fiat. Wouldn't one assume then that the possibility of such profound geopolitical consequences is precisely the reason why governments will not let it become so important?
ffwd 6y ago
some hobbyist observations, please correct me if I'm wrong: >I’m still trying to piece together what exactly how much control governments really lose under Bitcoin, whether I can see that as a positive or a negative, and whether I agree with Dalio that governments would (or could) take action to prevent it. I don't think they could control it at all, as I will get into in the next post >The enforcement of debt and the ability to track money seem, to me, like some of its most important properties I don't think you could track money at all, because I think in a world where bitcoin is dominant, you can bet that you would have many other cryptocurrencies as well. And you can today exchange btc for monero, ethereum or whatever and back again and it's virtually untrackable who owns it or where it came from. Because of this, governments could no longer do any automated taxation, they could no longer have any verification of who owns what, and so they would have to manually tax everyone based on manual observation of physical assets, as they probably couldn't look into most peoples actual financial records either, unless it was voluntary. This is untenable of course >I’m also interested in what a world with a fixed amount of currency really looks like. It wouldn't be fixed in reality, and nobody would really know how much money exists and each currency and inflation would have to be determined individually and you would have booms and crashes based on just how individual markets supply/demand progresses (i think?)
- analog31 6y ago
  >>> Because of this, governments could no longer do any automated taxation, they could no longer have any verification of who owns what, and so they would have to manually tax everyone based on manual observation of physical assets, as they probably couldn't look into most peoples actual financial records either, unless it was voluntary. This is untenable of course They could tax you by a percentage of each asset. At the end of the year, you might owe 31 bitcoins, 0.0125 acre of land, and a chicken. Ironically, this is why money was invented in the first place -- an asset that represents value rather than having inherent value (such as, the inherent value of a chicken is one chicken).
- madamelic 6y ago
  >you can today exchange btc for monero, ethereum or whatever and back again and it's virtually untrackable who owns it or where it came from. I don't get why people buy into this idea that BTC is super-hacker-cash that can't be traced. BTC can be traced. That's the point of an open ledger. If you want 'untraceable' BTC, you have an big burden to do so (buy it for cash in a parking lot with no cameras and using an alias). The problem is the second you start buying things with the BTC and sending them to your house, your anonymity is shot. There are coins (like Monero) whose purpose is to make transactions more untraceable but BTC is intended to be traced.
dmitriid 6y ago
Bitcoin is just a part of a larger problem disucssed in these two articles fro m3 years ago. They are still as true as three years ago: "Ten years in, nobody has come up with a use for blockchain": https://hackernoon.com/ten-years-in-nobody-has-come-up-with-a-use-case-for-blockchain-ee98c180100 https://hackernoon.com/ten-years-in-nobody-has-come-up-with-... Follow up, "Blockchain is not only crappy technology but a bad vision for the future": https://medium.com/@kaistinchcombe/decentralized-and-trustless-crypto-paradise-is-actually-a-medieval-hellhole-c1ca122efdec https://medium.com/@kaistinchcombe/decentralized-and-trustle...
- ccortes 6y ago
  It is pretty useful for cross-border payments
  - dmitriid 6y ago
    It's pretty useful for exactly one case of cross-border payments: into countries that are under international sanctions. For every other country literally anything else is more useful and convenient.
    - ccortes 6y ago
      I can tell you have never experienced this problem before but it might surprise you to know that many counties not under international sanctions have big issues to send money to other countries
      - dmitriid 6y ago
        I've seen people send money even to Turkmenistan. So yeah, people will always find a way. And for the vast majority of people bitcoin will be significany less convenient than sending money through Western Union or Moneygram.
        ccortes 6y ago
silexia 6y ago
There have been lots of other currencies privately traded previously, but since the state has the guns the state can outlaw it. If it truly started competing with major currencies you would see it outlawed. It also is not secure as China is controlling a majority of the mining now and the majority can control the currency. Further, Google has a computer that can hack the encryption and you will see a lot more organizations have them soon. It consumes more power than Switzerland. It's bad for the environment. It's just a bubble and can be popped anytime. Not to mention that it is just unusable for actual legal transactions on a regular basis.
- almostdigital 6y ago
  > Google has a computer that can hack the encryption Citation needed
  - deleted 6y ago
    [deleted]
  - fullstop 6y ago
    I believe that they are referring to quantum computing
    - AuthorizedCust 6y ago
      Vaporware still, at least for practical applications.
  - oconnor663 6y ago
    I think this is a roundabout way of saying Google has a quantum computer. Bitcoin does not involve encryption, and it's a common mistake by journalists to toss that buzzword in there.
    - yownie 6y ago
      All addresses are derived from public/private keypairs
KasianFranks 6y ago
It's a trading vehicle.
OnlyRepliesToBS 6y ago
it's the essence of faithlessness in governmental currency it will survive (and more importantly: have value) as long as humans distrust governments
FruityCoconut 6y ago
It's invaluable if you are involved in grey/black market trade. I was briefly involved in a legal-yet-taboo industry years ago, and being able to instantly receive private payments from people on the other side of the world without permission from anyone (indeed, while payment processors were limiting and closing my accounts) was phenomenal. It made sense then. In fact I became a bit of a Bitcoin evangelist in my circles, especially as it aligned with my then-libertarian worldview. (However, the questionable leadership of the core Bitcoin fork has mostly eroded that enthusiasm over time.) Now, as a regular taxpayer, Bitcoin makes no sense to me either. And I say that as a fortunate person with a significant stake, and a retirement fund increasingly grateful to all the dumb money being poured into it. Its popularity and exchange rate is not a function of its utility, but rather an indication of a disillusioned and frustrated middle class looking anywhere for financial relief. Cryptocurrency is lottery tickets for people who consider themselves too clever to buy lottery tickets. (Especially all of the new, more volatile cryptocurrencies popping up each day.) Governments would be well-advised not to deprive their taxpayers of this distracting fantasy. You'll know when you need it. Until then, if you want to take a gamble at timing your exit better than the next guy, thanks very much.
domatic1 6y ago
I'm still surprised that bitcoin is hated here, such a great technology. It's a decentralised currency, and it's working really well. A lot of big institutions are taking it seriously now. Does paper cash printed by government make more sense?
- bawolff 6y ago
  As an abstract symbol to represent value, yes, government printed cash works better for most people's use cases. Bitcoin is interesting because of its decentralization, but it definitely pays a high cost to support that feature. If decentralization is not a feature you care about, than a central authority printing cash is a much better system.
- seibelj 6y ago
  Typical HN user: “Disrupt incumbents! Topple the establishment! We have the power to do great things! Let’s found a startup!” When it comes to bitcoin: “Well actually individuals shouldn’t be trusted, decentralization bad, I LOVE my ancient bank with its shitty website, how dare you question authority?”
- analog31 6y ago
  In my view, money is a technology. A technology is designed to serve a purpose, and is said to work if it achieves that purpose reasonably well. My simplistic view is that government money such as the dollar serves a small handful of purposes: It's a medium of exchange, short term store of value, and tool of government economic policy. The government has loosely defined "short term" by the target inflation rate. I suppose that regularizing the taxation process is another purpose. Does it work? Apparently some national currencies work better than others. People in some countries will, if possible, use some other country's money in preference over their own, for all but minor daily transactions. Thus, objecting to one kind of money, and swapping it for another, predates bitcoins. What I think makes bitcoin different is that no government can influence its purpose, leaving its purpose up to each user to define on their own terms. Perhaps another way of thinking about it, is that its own behavior defines its purpose, because if your use is in opposition to its behavior, then it doesn't work for you. This could be said to be true of dollars as well.
mandragon 6y ago
What's the risk for bitcoin pertinent to entrenched pre-quantum encryption? Are the wallet/private key pairs based on such cryptography? What's the technical feasibility of migrating BTC's pow scheme to quantum-resistant hashing? What is the technical feasibility of migrating wallet/private keys to quantum-resistant crypto? Would any such migration of wallet/private keys be dependent on public/non-public interactions with the blockchain by wallet holders, and would those interactions introduce deanonymization or other risks?
- nullc 6y ago
  There is no particular negative interactions with the hash functions and quantum cryptography. Bitcoin is designed so that different asymmetric crypto governing controlling coins can be compatibility introduced-- as has been done a couple times in the past (to introduce revisions to the script system). PQ crypto could be introduced in that way. Unfortunately existing PQ signature schemes don't have a great mix of maturity and performance that make them especially attractive absent a clear and present need. For years I maintained a private patch set to introduce hash based signatures on short notice if needed. I haven't for a number of years now in part because there are now enough contributors I'm confident that if it were needed it could be done quickly without any special preparatory effort. Users can change the rules governing their coins just by moving them.
  - mandragon 6y ago
    This includes seamlessly migrating wallet keys to a quantum resistant scheme without end user intervention? Seems that users would need to do a kind of transaction using existing keys to new wallet/key pair?
    - nullc 6y ago
      Yes, users would need to take some action-- otherwise how would you know if your coins were being moved to your new key vs my new key. :) We know how to construct kinds of forward compatibility that could allow being spent with a new scheme but the specific scheme would have to be set in advance so they users could generate the future keys at the same time the generate the current ones. And, as mentioned, the existing choices aren't that great (for this application).
1996 6y ago
To the people who really want to learn: you won't get quality advice here. BTC has been hated on HN since it's creation. Even over 10 years later, the crypto luddites keep coming at it. Learn by yourself instead of listening to the doomsayers: some people thought independently, like this person in 2011 who was ridiculed here: https://news.ycombinator.com/item?id=2596475 https://news.ycombinator.com/item?id=2596475 Check the discussion from 2017: https://news.ycombinator.com/item?id=15976946 https://news.ycombinator.com/item?id=15976946 Then the new one from 2020, 3 months before the current rally: https://news.ycombinator.com/item?id=24259700 https://news.ycombinator.com/item?id=24259700 Then make your own judgement, as most of the people here won't learn. They refuse to - they are too emotionally invested in their past lapse of judgement, so they need to rationalize it and double down, in the hope that maybe it will crash and everybody will know they were right all along! It's been going on for over 10 years, so follow their advice at your own risk.
- bconnorwhite 6y ago
  This is super common on HN. Just look at threads on Tesla. Fortunately betting against someone with a closed mind is super profitable, because they'll always mis-price the risk/reward.
  - 1996 6y ago
    I don't want to profit from the ignorance over here. What for? I have enough. I'm done. I just find it sad so many bright people are still led to take the wrong decisions. Someone else said, if god had wanted to help the geeks, it couldn't have been done better - anyone could mine, at the cost of $0 on a CPU back then. I was bitten by the HN naysayers and didn't. Fortunately, I quickly realized my mistake and just worked in the field. It's sad so many people want to double down and triple down on their past errors. As long as they can live with the consequences of their actions, I guess it's their problem, not mine. That doesn't make it any less sad.
tamrix 6y ago
Everyone wants to be rich through bitcoin as an investment. No one will actual use it as an everyday currency. If it is the winner of the cyrpto digital currency war. It will be the end of civilisation.
- timbit42 6y ago
  Bitcoin wasn't designed to be an everyday currency. You misunderstand it.
prohobo 6y ago
This seems more like it's questioning cryptocurrency itself, and putting it at odds with fiat currencies and states. As for states, they're rolling out their own cryptos. The Chinese have CryptoYuan, the EU central bank is releasing a currency likely by late 2021, and the Federal Reserve is also planning to create a new currency. That's how they beat Bitcoin. Fiat currency is likely going to be slowly phased out as cryptos take hold, like an old iPhone. States will absolutely gain power if they adopt cryptos, because they can implement currencies that can always be tracked and disseminated much faster and easier than fiat.
- echelon 6y ago
  Which state will win? Will USD fall to CryptoYuan, or will the US solution have advantage? Where can you follow design of these initiatives? Could a state actor DDoS another state's crypto, or will these just be centralized systems with just the crypto moniker? Will Libra make it?
  - prohobo 6y ago
    Considering China has bought up a majority of gold in the past decade, and they're the global leader in production, I'd say CryptoYuan will have the best chance of winning out. I assume they're keeping their designs under wraps for now, but I haven't really taken a deep look. There is some info available though: * The Chinese Central Bank has filed over 80 patents relating to CryptoYuan, which can be checked out - https://digitalchamber.org/pboc-patent-repository/ https://digitalchamber.org/pboc-patent-repository/ * The European Central Bank released a report in October - https://www.ecb.europa.eu/pub/pdf/other/Report_on_a_digital_euro~4d7268b458.en.pdf https://www.ecb.europa.eu/pub/pdf/other/Report_on_a_digital_... * The Federal Reserve is apparently still just researching - https://www.federalreserve.gov/econres/notes/feds-notes/central-bank-digital-currency-a-literature-review-20201109.htm https://www.federalreserve.gov/econres/notes/feds-notes/cent... DDoSing another state's crypto would probably be considered an overt act of war, so I don't know how often that could happen. I have no idea what Libra is to be honest.
- Vadoff 6y ago
  The whole point of Bitcoin is that it isn't controlled by any one country and that more can't be printed whenever the country wants. Any new currency or "coin" that a country develops completely misses the mark, and is literally no better vs Bitcoin than their standard currency.
commonoddity 6y ago
Fiat currency is an agreement of settlement using an inflationary mechanism created at will with no work required to provide value. Bitcoins are an asset created in response to work performed, scaling proportionately with the work required giving it value. It really is that simple and makes perfect sense.
- bawolff 6y ago
  I disagree that bitcoins are made "in response" to work performed. The value of a bitcoin doesn't come from the work performed. Otherwise recently mined bitcoins would be more valuable than early mined bitcoins, due to different hash difficulty level. Anyways, currency is not value. Currency represents value. It is symbol. I feel like confusing the symbol with what it represents is the source of much of the misunderstandings of how money works.
  - wolfretcrap 6y ago
    Initially minted coins were technically more valuable for the bitcoin network. It's depends on from what perspective you judge this value.
    - bawolff 6y ago
      That's taking the term "value" severely out of context.
ThomPete 6y ago
Bitcoin makes a lot of sense. Not for physical things but for digital ones. Bitcoin (crypto) will be used for second hand sales of digital items from gaming characters to digital weapons or other unique items across different games from completely different gaming developers.
deleted 6y ago
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xiphias2 6y ago
Just buy the top rated book on Amazon (or download the pdf for free): https://www.amazon.com/Bitcoin-Standard-Decentralized-Alternative-Central/dp/1119473861/ref=sr_1_3?dchild=1&keywords=bitcoin&qid=1607219233&sr=8-3 https://www.amazon.com/Bitcoin-Standard-Decentralized-Altern... The author didn't really do serious research. I can imagine having doubts or questions after reading this book, but without basic knowledge about money there's no point in arguing (I agree with Jimmy Song's comment, but I find Saifedean's book much better researched)
postingpals 6y ago
I think there are technicalities to bitcoin that make typical economic reasoning futile, and as a result non-tech people argue for things they don't really understand. The energy consumption argument alone should completely destroy bitcoin's prospects. I'm not sure how you can even apply classical economics principles to something as uniquely different as bitcoin. Maybe the cost means people should only trade in extremely high amounts of bitcoin so there are less transactions? I don't know.
root_axis 6y ago
Bitcoin is darknet money; it definitely makes sense in that context, but that's about it.
- timbit42 6y ago
  Bitcoin isn't even anonymous, let alone darknet money.
deleted 6y ago
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mdoms 6y ago
> Lyn talks about investing, so she shies away from long-term speculation Isn't that literally what investing is?
claydavisss 6y ago
BTC as a currency has some merit. But people are treating it as an asset class. Crypto as a major asset class is a Brave New World. Its the first major asset class whose value is entirely inferred. Bonds are tethered to a future income stream, typically valued from a present income stream + future expectations. Stocks are tethered to real work, company assets and profits. Precious metals are tethered to something that is either impossible or uneconomical to produce, far beyond the challenges of crypto mining. The world still cannot produce or practically destroy gold. Bitcoins can be completely destroyed - doing so isn't even difficult. Bitcoin is a string of characters. If Bitcoin is never used as a currency, only a tradeable asset, we run the real risk of people suddenly and simultaneously questioning what it is they own. There is no floor underneath that price. Even a bankrupt corporation has a price floor - the used office furniture sold at auction. Bitcoin can trade for 0. And might yet.
rmac 6y ago
There are no new inventions in finance. Be it tulips, joint stock enterprises, junk bonds, or good ol debt, it's all been done before and will all come crashing down yet again, taking the speculative euphoria with it.
bawolff 6y ago
So to actually comment on the article instead of just ranting how bitcoin is either amazing or terrible: > I’m still trying to piece together what exactly how much control governments really lose under Bitcoin Can't you just compare it to the gold standard? Seems like we have a lot of history we could look at where gov could not print money how it pleased. > The enforcement of debt and the ability to track money seem, to me, like some of its most important properties. If I can’t tell how much Bitcoin someone has, how can they be made financially responsible in court? Seems fairly easy to me - you ask them how much money they have, they tell you. If they lie, you throw them in jail. Its really no different than how we handle people who keep there money in the form of gold bars under the bed, or in offshore bank accounts. Sure you can sometimes get away with shinanigans, but its not a new problem. > I’m also interested in what a world with a fixed amount of currency really looks like. I would imagine “inflating away” debtors obligations through fiat would not really be on the table. It would look like the gold standard. inflating away debt with fiat in a major way is pretty uncommon anyway and usually ends badly (Germany tried that and we ended up with WWII!) > 65% hashrate by china, 51%attack, etc It should be noted that a 51% attack is generally something noticeable. Its not a secret attack. So that reduces risk somewhat. Also i thought 51% attacks were actually closer to only needing 33%. > Energy, environment Yeah, i agree with author on these points. Ethereum is doing some interesting stuff here.
meow_mix 6y ago
Wow, this kind of blew up. Wasn't really expecting that, as it's just some notes from about a week of research, very part time. I've got a lot here to read for the next newsletter. Thanks folks that gave insightful comments. Feel free to read more about the process I'm taking with this newsletter or sign up: https://thinkoutloudnews.substack.com/p/why-you-should-read-this-substack https://thinkoutloudnews.substack.com/p/why-you-should-read-...
AtlasBarfed 6y ago
The environmental impact of bitcoin mining is the major argument against it. I don't think it will be feasible in the long run. The fact there are allegedly mining farms in the Mongolian lake of dystopia Bautou undermines the infeasibility long term. As pointed out elsewhere here, fiat currency is as equally arbitrary as bitcoin is. Bitcoin's age and seeming resistance to network manipulation and cracking over a long period of time is really the source of its enduring value. In my personal opinion/perception, the true devaluation of other cryptocurrencies occurred in the "aaaand its gone" twitter moment. Even if it was a joke/stunt, it really highlighted the superfluous nature of almost all cryptocurrencies besides BTC.

83 points by meow_mix 6y ago

Bitcoin is a thneed.

It makes sense to me about as much as the trade in ancient coins, stamps, and other collectibles. These are reasonable asset classes if you like gambling, with a somewhat fixed supply, not a lot of industrial applications, and wild price fluctuations based entirely on subjective appreciation. Bitcoin is more liquid but otherwise the price dynamic looks about the same...

sesuximo 6y ago
AFAIK, stamps don’t use our resources enough to move prices for energy/chips/etc
- ridaj 6y ago
  Right. It's scaled up. I suppose that if people became suddenly interested in old stamps to the tune of billions of dollars, stamp-dealing would also start competing for resources with the rest of the economy.
  - sesuximo 6y ago
    I think that’s wrong for a few reasons.... - a stamp uses a small amount of resources no matter how many stamps you want (more stamps may even be cheaper from economies of scale). - Bitcoin inherently relies on expensive computation to provide safety - each Bitcoin is more expensive than the last due to increasingly difficult nonces. - (dumb edge case) you can’t make old stamps so it’s hard to image using a lot of resources to find/make them. Obv not true for other products
    - bawolff 6y ago
      > each Bitcoin is more expensive than the last due to increasingly difficult nonces. Bitcoin difficulty can change in either direction.
- toolz 6y ago
  bitcoin uses less resources than traditional banking. I think people should stop judging it in a vacuum and instead speak in relative terms. If energy use is a concern then fiat is the greater offender. https://bitcoinist.com/banks-consume-energy-bitcoin/ https://bitcoinist.com/banks-consume-energy-bitcoin/ further crypto would be a much more flexible domain at working towards reducing carbon emission than deeply embedded and slow changing fiat systems
  - root_axis 6y ago
    Bitcoin does not replace traditional banking even if you view it as a legitimate currency.
    - bingbong123 6y ago
      Why not? Do you think every financial service offered by traditional banks can't be coded and made more efficient using internet-native money (bitcoin)? If so, what services can't? People already use BTC as collateral for loans/mortgages ...which are two of the riskiest activities traditional banks engage in.
  - sesuximo 6y ago
    Banks use way less energy per customer
    - yownie 6y ago
      8 years vs 150 years of technology though
    - bingbong123 6y ago
      I've walked into many semi-empty downtown brick and mortar banks with 5-10 idle employees, you want to continue paying that "innefficiency tax" in every transaction/loan/wire/credit-card/etc...? I don't think people really think through the reason there is a 20% tax on financial activity that goes through traditional banking system.
scoopertrooper 6y ago
I guess the key difference is that less startups have bilked investors by peddling fantastical dreams of post-fiat ancient coin based economies.
- bawolff 6y ago
  Maybe less tech startups, but im pretty sure a bunch of people popped up to bilk other people out of their money during the beenie baby craze.
  - scoopertrooper 6y ago
    I'm not sure if you're defending bitcoin or comparing people buying it to crazed beanie baby collectors. At least, nobody was talking about a beanie baby based financial system at the time - however adorable it may have been.
    - bawolff 6y ago
      I don't think bitcoin should be entirely dismissed as a scam (its more complex than that), but if we're going to compare it to a scam (and there are definitely plenty of scammers in the bitcoin ecosystem), i think its important to remember that neither scams nor speculative bubbles are new to human history.
      - scoopertrooper 6y ago
        The important innovation of Bitcoin (and the like) was that it democratised the ability to scam. A band of techno-utopians created a technology (ideology?) that made it much easier and cheaper to empty the pockets of the gullible.
  - SrslyJosh 6y ago
    That's a pretty good comparison, because, like the energy and custom hardware thrown at bitcoin, beanie babies are also intrinsically useless at the scale they were sold.
- 6y ago

tomerico 6y ago

The problem with Bitcoin and is that it creates real negative effects, with little positive effects to show for it. The most prominent negative effect is the huge energy waste, which doesn't help when we are trying to cut on our carbon footprint The second one is that it makes illegal activities easier, and at a larger scale. It's quite common right now for companies to be coerced pay millions of dollars to anonymous criminals, all enabled with cryptocurrencies. Unless equally sized positive effects would emerge, it creates a growing pressure on governments to regulate and potentially criminalize the usage of cryptocurrencies. If that happens, the monetary value will naturally fall down.

immigration311 6y ago
Making (certain) illegal activities easier is one of the primary positive effects.
- codyb 6y ago
  I'll assume you're referring to obtaining drugs which many consider to be something that at the very least should not be punished by prison time (myself included), as opposed to say... the distribution of child pornography, ordering hit men, arms trafficking, or the selling of hacked credit card numbers, passwords, and zero days. If that was your idea, wouldn't we be better served by lobbying our politicians to move the needle on the drug war (seems to be happening) instead of creating volatile whale controlled crypto "currencies" which use huge amounts of electricity as our planet faces a climate change crises and which also enables all of the other really terrible illegal things listed?
  - postingpals 6y ago
    Personally I assumed they meant exchanging money in secret if you are a whistleblower and the government is after you.
    - bitxbitxbitcoin 6y ago
      Same. Or maybe you're someone who was born in a country embargoed by the United States and you want to accept payment for freelance work.

gjs278 6y ago

here comes the parade of salty nocoiners. stay poor.

seibelj 6y ago

Bitcoin is an asset the government simply cannot control. That’s the magic! Whether you think this is good or bad is for debate, but there are apps in every country where you can buy and hold bitcoin (even countries like Nigeria and Venezuela) and it doesn’t take that many people who value it globally to make BTC shoot up in price. If even 1 out of 1000 people on earth desired bitcoin, its value would go up and sustain it. So it doesn’t matter if 999 people dislike it - bitcoin (and crypto) is a niche that can grow much larger without much additional enthusiasm. And the fact it’s worth so much blows people’s minds, making it like a global phenomenon that markets itself every time it goes up. No one makes you buy bitcoin! If you don’t like it, just ignore it. I could list many more arguments here as to why different sorts of people value it, from libertarians to drug dealers to hedge funds to people in countries that have terrible fiat currencies and corrupt central banks, but ultimately it’s a variation of the government not having control. One final thought is that the term “currency” confuses a lot of people. Whether it can actually be used like a dollar is moot - it’s an asset that can be used sometimes like a currency, but being a true currency is not required for utility and value. It’s a misnomer.

Skunkleton 6y ago
> Bitcoin is an asset the government simply cannot control. It certainly can, at least if you intend to exchange it for tangible goods or services, or if you convert it to a government currency. Why do you think these sorts of transactions cannot be regulated?
- seibelj 6y ago
  The settlement layer is purely peer to peer. Governments can enact laws to make actions illegal, and tougher for centralized entities like banks and corporations from using it. But there are addresses out there known to authorities with hundreds of millions of dollars in stolen bitcoin - and there is absolutely nothing they can do to prevent it from being moved. If you have the private key, you own the coins.
  - Skunkleton 6y ago

jimmysong 6y ago

Posts like these make it clear to me that the author does not really understand money, not Bitcoin. It's hard to reason about what Bitcoin's advantages are without first considering what the purpose of money is and the analysis from this article is mostly just sniping at the edges about some of the perceived flaws and not the actual usefulness which is the good part of the trade-off. For a better understanding of money and why Bitcoin is a better money, I would recommend this article: https://vijayboyapati.medium.com/the-bullish-case-for-bitcoin-6ecc8bdecc1 https://vijayboyapati.medium.com/the-bullish-case-for-bitcoi... I'll also toot my own horn a bit which also delves into this confusion: https://www.amazon.com/Little-Bitcoin-Book-Matters-Finances/dp/1641990503 https://www.amazon.com/Little-Bitcoin-Book-Matters-Finances/...

bitxbitxbitcoin 6y ago
Heya Jimmy! Glad to see you on HN. In case anyone would like a YT video so they can listen/watch at 2x instead of read... check out: The Complete Case for Bitcoin. https://www.youtube.com/watch?v=xjeXIGWY2DI&ab_channel=Blockedia https://www.youtube.com/watch?v=xjeXIGWY2DI&ab_channel=Block...
- garmaine 6y ago
  I can read much faster than 2x the speed of a YouTube video...
ridaj 6y ago
That article is interesting, but I have to ask about the conclusion: > Beyond the financial case for Bitcoin, its rise as a non-sovereign store of value will have profound geopolitical consequences. A global, non-inflationary reserve currency will force nation-states to alter their primary funding mechanism from inflation to direct taxation, which is far less politically palatable. Isn't this all backwards? In the past, when it was politically inconvenient not to be able to inflate money, governments abandoned gold-backed money and went to fiat. Wouldn't one assume then that the possibility of such profound geopolitical consequences is precisely the reason why governments will not let it become so important?

ffwd 6y ago

some hobbyist observations, please correct me if I'm wrong: >I’m still trying to piece together what exactly how much control governments really lose under Bitcoin, whether I can see that as a positive or a negative, and whether I agree with Dalio that governments would (or could) take action to prevent it. I don't think they could control it at all, as I will get into in the next post >The enforcement of debt and the ability to track money seem, to me, like some of its most important properties I don't think you could track money at all, because I think in a world where bitcoin is dominant, you can bet that you would have many other cryptocurrencies as well. And you can today exchange btc for monero, ethereum or whatever and back again and it's virtually untrackable who owns it or where it came from. Because of this, governments could no longer do any automated taxation, they could no longer have any verification of who owns what, and so they would have to manually tax everyone based on manual observation of physical assets, as they probably couldn't look into most peoples actual financial records either, unless it was voluntary. This is untenable of course >I’m also interested in what a world with a fixed amount of currency really looks like. It wouldn't be fixed in reality, and nobody would really know how much money exists and each currency and inflation would have to be determined individually and you would have booms and crashes based on just how individual markets supply/demand progresses (i think?)

analog31 6y ago
>>> Because of this, governments could no longer do any automated taxation, they could no longer have any verification of who owns what, and so they would have to manually tax everyone based on manual observation of physical assets, as they probably couldn't look into most peoples actual financial records either, unless it was voluntary. This is untenable of course They could tax you by a percentage of each asset. At the end of the year, you might owe 31 bitcoins, 0.0125 acre of land, and a chicken. Ironically, this is why money was invented in the first place -- an asset that represents value rather than having inherent value (such as, the inherent value of a chicken is one chicken).
madamelic 6y ago
>you can today exchange btc for monero, ethereum or whatever and back again and it's virtually untrackable who owns it or where it came from. I don't get why people buy into this idea that BTC is super-hacker-cash that can't be traced. BTC can be traced. That's the point of an open ledger. If you want 'untraceable' BTC, you have an big burden to do so (buy it for cash in a parking lot with no cameras and using an alias). The problem is the second you start buying things with the BTC and sending them to your house, your anonymity is shot. There are coins (like Monero) whose purpose is to make transactions more untraceable but BTC is intended to be traced.

dmitriid 6y ago

Bitcoin is just a part of a larger problem disucssed in these two articles fro m3 years ago. They are still as true as three years ago: "Ten years in, nobody has come up with a use for blockchain": https://hackernoon.com/ten-years-in-nobody-has-come-up-with-a-use-case-for-blockchain-ee98c180100 https://hackernoon.com/ten-years-in-nobody-has-come-up-with-... Follow up, "Blockchain is not only crappy technology but a bad vision for the future": https://medium.com/@kaistinchcombe/decentralized-and-trustless-crypto-paradise-is-actually-a-medieval-hellhole-c1ca122efdec https://medium.com/@kaistinchcombe/decentralized-and-trustle...

ccortes 6y ago
It is pretty useful for cross-border payments
- dmitriid 6y ago
  It's pretty useful for exactly one case of cross-border payments: into countries that are under international sanctions. For every other country literally anything else is more useful and convenient.
  - ccortes 6y ago
    I can tell you have never experienced this problem before but it might surprise you to know that many counties not under international sanctions have big issues to send money to other countries
    - dmitriid 6y ago
      I've seen people send money even to Turkmenistan. So yeah, people will always find a way. And for the vast majority of people bitcoin will be significany less convenient than sending money through Western Union or Moneygram.
      - ccortes 6y ago

silexia 6y ago

There have been lots of other currencies privately traded previously, but since the state has the guns the state can outlaw it. If it truly started competing with major currencies you would see it outlawed. It also is not secure as China is controlling a majority of the mining now and the majority can control the currency. Further, Google has a computer that can hack the encryption and you will see a lot more organizations have them soon. It consumes more power than Switzerland. It's bad for the environment. It's just a bubble and can be popped anytime. Not to mention that it is just unusable for actual legal transactions on a regular basis.

almostdigital 6y ago
> Google has a computer that can hack the encryption Citation needed
- deleted 6y ago
  [deleted]
- fullstop 6y ago
  I believe that they are referring to quantum computing
  - AuthorizedCust 6y ago
    Vaporware still, at least for practical applications.
- oconnor663 6y ago
  I think this is a roundabout way of saying Google has a quantum computer. Bitcoin does not involve encryption, and it's a common mistake by journalists to toss that buzzword in there.
  - yownie 6y ago
    All addresses are derived from public/private keypairs

KasianFranks 6y ago

It's a trading vehicle.

OnlyRepliesToBS 6y ago

it's the essence of faithlessness in governmental currency it will survive (and more importantly: have value) as long as humans distrust governments

FruityCoconut 6y ago

It's invaluable if you are involved in grey/black market trade. I was briefly involved in a legal-yet-taboo industry years ago, and being able to instantly receive private payments from people on the other side of the world without permission from anyone (indeed, while payment processors were limiting and closing my accounts) was phenomenal. It made sense then. In fact I became a bit of a Bitcoin evangelist in my circles, especially as it aligned with my then-libertarian worldview. (However, the questionable leadership of the core Bitcoin fork has mostly eroded that enthusiasm over time.) Now, as a regular taxpayer, Bitcoin makes no sense to me either. And I say that as a fortunate person with a significant stake, and a retirement fund increasingly grateful to all the dumb money being poured into it. Its popularity and exchange rate is not a function of its utility, but rather an indication of a disillusioned and frustrated middle class looking anywhere for financial relief. Cryptocurrency is lottery tickets for people who consider themselves too clever to buy lottery tickets. (Especially all of the new, more volatile cryptocurrencies popping up each day.) Governments would be well-advised not to deprive their taxpayers of this distracting fantasy. You'll know when you need it. Until then, if you want to take a gamble at timing your exit better than the next guy, thanks very much.

domatic1 6y ago

I'm still surprised that bitcoin is hated here, such a great technology. It's a decentralised currency, and it's working really well. A lot of big institutions are taking it seriously now. Does paper cash printed by government make more sense?

bawolff 6y ago
As an abstract symbol to represent value, yes, government printed cash works better for most people's use cases. Bitcoin is interesting because of its decentralization, but it definitely pays a high cost to support that feature. If decentralization is not a feature you care about, than a central authority printing cash is a much better system.
seibelj 6y ago
Typical HN user: “Disrupt incumbents! Topple the establishment! We have the power to do great things! Let’s found a startup!” When it comes to bitcoin: “Well actually individuals shouldn’t be trusted, decentralization bad, I LOVE my ancient bank with its shitty website, how dare you question authority?”
analog31 6y ago
In my view, money is a technology. A technology is designed to serve a purpose, and is said to work if it achieves that purpose reasonably well. My simplistic view is that government money such as the dollar serves a small handful of purposes: It's a medium of exchange, short term store of value, and tool of government economic policy. The government has loosely defined "short term" by the target inflation rate. I suppose that regularizing the taxation process is another purpose. Does it work? Apparently some national currencies work better than others. People in some countries will, if possible, use some other country's money in preference over their own, for all but minor daily transactions. Thus, objecting to one kind of money, and swapping it for another, predates bitcoins. What I think makes bitcoin different is that no government can influence its purpose, leaving its purpose up to each user to define on their own terms. Perhaps another way of thinking about it, is that its own behavior defines its purpose, because if your use is in opposition to its behavior, then it doesn't work for you. This could be said to be true of dollars as well.

mandragon 6y ago

What's the risk for bitcoin pertinent to entrenched pre-quantum encryption? Are the wallet/private key pairs based on such cryptography? What's the technical feasibility of migrating BTC's pow scheme to quantum-resistant hashing? What is the technical feasibility of migrating wallet/private keys to quantum-resistant crypto? Would any such migration of wallet/private keys be dependent on public/non-public interactions with the blockchain by wallet holders, and would those interactions introduce deanonymization or other risks?

nullc 6y ago
There is no particular negative interactions with the hash functions and quantum cryptography. Bitcoin is designed so that different asymmetric crypto governing controlling coins can be compatibility introduced-- as has been done a couple times in the past (to introduce revisions to the script system). PQ crypto could be introduced in that way. Unfortunately existing PQ signature schemes don't have a great mix of maturity and performance that make them especially attractive absent a clear and present need. For years I maintained a private patch set to introduce hash based signatures on short notice if needed. I haven't for a number of years now in part because there are now enough contributors I'm confident that if it were needed it could be done quickly without any special preparatory effort. Users can change the rules governing their coins just by moving them.
- mandragon 6y ago
  This includes seamlessly migrating wallet keys to a quantum resistant scheme without end user intervention? Seems that users would need to do a kind of transaction using existing keys to new wallet/key pair?
  - nullc 6y ago
    Yes, users would need to take some action-- otherwise how would you know if your coins were being moved to your new key vs my new key. :) We know how to construct kinds of forward compatibility that could allow being spent with a new scheme but the specific scheme would have to be set in advance so they users could generate the future keys at the same time the generate the current ones. And, as mentioned, the existing choices aren't that great (for this application).

1996 6y ago

To the people who really want to learn: you won't get quality advice here. BTC has been hated on HN since it's creation. Even over 10 years later, the crypto luddites keep coming at it. Learn by yourself instead of listening to the doomsayers: some people thought independently, like this person in 2011 who was ridiculed here: https://news.ycombinator.com/item?id=2596475 https://news.ycombinator.com/item?id=2596475 Check the discussion from 2017: https://news.ycombinator.com/item?id=15976946 https://news.ycombinator.com/item?id=15976946 Then the new one from 2020, 3 months before the current rally: https://news.ycombinator.com/item?id=24259700 https://news.ycombinator.com/item?id=24259700 Then make your own judgement, as most of the people here won't learn. They refuse to - they are too emotionally invested in their past lapse of judgement, so they need to rationalize it and double down, in the hope that maybe it will crash and everybody will know they were right all along! It's been going on for over 10 years, so follow their advice at your own risk.

bconnorwhite 6y ago
This is super common on HN. Just look at threads on Tesla. Fortunately betting against someone with a closed mind is super profitable, because they'll always mis-price the risk/reward.
- 1996 6y ago
  I don't want to profit from the ignorance over here. What for? I have enough. I'm done. I just find it sad so many bright people are still led to take the wrong decisions. Someone else said, if god had wanted to help the geeks, it couldn't have been done better - anyone could mine, at the cost of $0 on a CPU back then. I was bitten by the HN naysayers and didn't. Fortunately, I quickly realized my mistake and just worked in the field. It's sad so many people want to double down and triple down on their past errors. As long as they can live with the consequences of their actions, I guess it's their problem, not mine. That doesn't make it any less sad.

tamrix 6y ago

Everyone wants to be rich through bitcoin as an investment. No one will actual use it as an everyday currency. If it is the winner of the cyrpto digital currency war. It will be the end of civilisation.

timbit42 6y ago
Bitcoin wasn't designed to be an everyday currency. You misunderstand it.

prohobo 6y ago

This seems more like it's questioning cryptocurrency itself, and putting it at odds with fiat currencies and states. As for states, they're rolling out their own cryptos. The Chinese have CryptoYuan, the EU central bank is releasing a currency likely by late 2021, and the Federal Reserve is also planning to create a new currency. That's how they beat Bitcoin. Fiat currency is likely going to be slowly phased out as cryptos take hold, like an old iPhone. States will absolutely gain power if they adopt cryptos, because they can implement currencies that can always be tracked and disseminated much faster and easier than fiat.

echelon 6y ago
Which state will win? Will USD fall to CryptoYuan, or will the US solution have advantage? Where can you follow design of these initiatives? Could a state actor DDoS another state's crypto, or will these just be centralized systems with just the crypto moniker? Will Libra make it?
- prohobo 6y ago
  Considering China has bought up a majority of gold in the past decade, and they're the global leader in production, I'd say CryptoYuan will have the best chance of winning out. I assume they're keeping their designs under wraps for now, but I haven't really taken a deep look. There is some info available though: * The Chinese Central Bank has filed over 80 patents relating to CryptoYuan, which can be checked out - https://digitalchamber.org/pboc-patent-repository/ https://digitalchamber.org/pboc-patent-repository/ * The European Central Bank released a report in October - https://www.ecb.europa.eu/pub/pdf/other/Report_on_a_digital_euro~4d7268b458.en.pdf https://www.ecb.europa.eu/pub/pdf/other/Report_on_a_digital_... * The Federal Reserve is apparently still just researching - https://www.federalreserve.gov/econres/notes/feds-notes/central-bank-digital-currency-a-literature-review-20201109.htm https://www.federalreserve.gov/econres/notes/feds-notes/cent... DDoSing another state's crypto would probably be considered an overt act of war, so I don't know how often that could happen. I have no idea what Libra is to be honest.
Vadoff 6y ago
The whole point of Bitcoin is that it isn't controlled by any one country and that more can't be printed whenever the country wants. Any new currency or "coin" that a country develops completely misses the mark, and is literally no better vs Bitcoin than their standard currency.

commonoddity 6y ago

Fiat currency is an agreement of settlement using an inflationary mechanism created at will with no work required to provide value. Bitcoins are an asset created in response to work performed, scaling proportionately with the work required giving it value. It really is that simple and makes perfect sense.

bawolff 6y ago
I disagree that bitcoins are made "in response" to work performed. The value of a bitcoin doesn't come from the work performed. Otherwise recently mined bitcoins would be more valuable than early mined bitcoins, due to different hash difficulty level. Anyways, currency is not value. Currency represents value. It is symbol. I feel like confusing the symbol with what it represents is the source of much of the misunderstandings of how money works.
- wolfretcrap 6y ago
  Initially minted coins were technically more valuable for the bitcoin network. It's depends on from what perspective you judge this value.
  - bawolff 6y ago
    That's taking the term "value" severely out of context.

ThomPete 6y ago

Bitcoin makes a lot of sense. Not for physical things but for digital ones. Bitcoin (crypto) will be used for second hand sales of digital items from gaming characters to digital weapons or other unique items across different games from completely different gaming developers.

deleted 6y ago

[deleted]

xiphias2 6y ago

Just buy the top rated book on Amazon (or download the pdf for free): https://www.amazon.com/Bitcoin-Standard-Decentralized-Alternative-Central/dp/1119473861/ref=sr_1_3?dchild=1&keywords=bitcoin&qid=1607219233&sr=8-3 https://www.amazon.com/Bitcoin-Standard-Decentralized-Altern... The author didn't really do serious research. I can imagine having doubts or questions after reading this book, but without basic knowledge about money there's no point in arguing (I agree with Jimmy Song's comment, but I find Saifedean's book much better researched)

postingpals 6y ago

I think there are technicalities to bitcoin that make typical economic reasoning futile, and as a result non-tech people argue for things they don't really understand. The energy consumption argument alone should completely destroy bitcoin's prospects. I'm not sure how you can even apply classical economics principles to something as uniquely different as bitcoin. Maybe the cost means people should only trade in extremely high amounts of bitcoin so there are less transactions? I don't know.

root_axis 6y ago

Bitcoin is darknet money; it definitely makes sense in that context, but that's about it.

timbit42 6y ago
Bitcoin isn't even anonymous, let alone darknet money.

deleted 6y ago

[deleted]

mdoms 6y ago

> Lyn talks about investing, so she shies away from long-term speculation Isn't that literally what investing is?

claydavisss 6y ago

BTC as a currency has some merit. But people are treating it as an asset class. Crypto as a major asset class is a Brave New World. Its the first major asset class whose value is entirely inferred. Bonds are tethered to a future income stream, typically valued from a present income stream + future expectations. Stocks are tethered to real work, company assets and profits. Precious metals are tethered to something that is either impossible or uneconomical to produce, far beyond the challenges of crypto mining. The world still cannot produce or practically destroy gold. Bitcoins can be completely destroyed - doing so isn't even difficult. Bitcoin is a string of characters. If Bitcoin is never used as a currency, only a tradeable asset, we run the real risk of people suddenly and simultaneously questioning what it is they own. There is no floor underneath that price. Even a bankrupt corporation has a price floor - the used office furniture sold at auction. Bitcoin can trade for 0. And might yet.

rmac 6y ago

There are no new inventions in finance. Be it tulips, joint stock enterprises, junk bonds, or good ol debt, it's all been done before and will all come crashing down yet again, taking the speculative euphoria with it.

bawolff 6y ago

So to actually comment on the article instead of just ranting how bitcoin is either amazing or terrible: > I’m still trying to piece together what exactly how much control governments really lose under Bitcoin Can't you just compare it to the gold standard? Seems like we have a lot of history we could look at where gov could not print money how it pleased. > The enforcement of debt and the ability to track money seem, to me, like some of its most important properties. If I can’t tell how much Bitcoin someone has, how can they be made financially responsible in court? Seems fairly easy to me - you ask them how much money they have, they tell you. If they lie, you throw them in jail. Its really no different than how we handle people who keep there money in the form of gold bars under the bed, or in offshore bank accounts. Sure you can sometimes get away with shinanigans, but its not a new problem. > I’m also interested in what a world with a fixed amount of currency really looks like. I would imagine “inflating away” debtors obligations through fiat would not really be on the table. It would look like the gold standard. inflating away debt with fiat in a major way is pretty uncommon anyway and usually ends badly (Germany tried that and we ended up with WWII!) > 65% hashrate by china, 51%attack, etc It should be noted that a 51% attack is generally something noticeable. Its not a secret attack. So that reduces risk somewhat. Also i thought 51% attacks were actually closer to only needing 33%. > Energy, environment Yeah, i agree with author on these points. Ethereum is doing some interesting stuff here.

meow_mix 6y ago

Wow, this kind of blew up. Wasn't really expecting that, as it's just some notes from about a week of research, very part time. I've got a lot here to read for the next newsletter. Thanks folks that gave insightful comments. Feel free to read more about the process I'm taking with this newsletter or sign up: https://thinkoutloudnews.substack.com/p/why-you-should-read-this-substack https://thinkoutloudnews.substack.com/p/why-you-should-read-...

AtlasBarfed 6y ago

The environmental impact of bitcoin mining is the major argument against it. I don't think it will be feasible in the long run. The fact there are allegedly mining farms in the Mongolian lake of dystopia Bautou undermines the infeasibility long term. As pointed out elsewhere here, fiat currency is as equally arbitrary as bitcoin is. Bitcoin's age and seeming resistance to network manipulation and cracking over a long period of time is really the source of its enduring value. In my personal opinion/perception, the true devaluation of other cryptocurrencies occurred in the "aaaand its gone" twitter moment. Even if it was a joke/stunt, it really highlighted the superfluous nature of almost all cryptocurrencies besides BTC.