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Hey there. I'm one of those people who read Schneier's Applied Cryptography in highschool in the 90s, and immediately recognized the groundbreaking potential of

by px43 6y ago

Hey there. I'm one of those people who read Schneier's Applied Cryptography in highschool in the 90s, and immediately recognized the groundbreaking potential of using asymmetric cryptography for currency. I work in information security, and have seen first hand how our existing financial infrastructure is held together with string and scotch tape. For 10 years or so, every time I heard about some big credit card theft, or wire fraud, or SWIFT hack, I would go see if anyone had figured out how to do cryptocurrencies yet. Then 2009 rolled around and I got an email forwarded to me from someone named Satoshi who had apparently figured out a really solid mitigation for the double spend problem, and had actually released some working PoC code in the form of Bitcoin. Yes, there are a ton of problems with Bitcoin. I've been extremely critical even since that first email, but those problems are nothing compared to the existing systemic problems plaguing traditional finance. Getting rich was never a draw for me. I'm not quite retired (though this year has been pretty good) but I have spent 10s of thousands of Bitcoins over the years building up various aspects of the economy in order to maximize the utility of the network. I could easily be living on my own private island if I had held onto the coins I CPU mined in the early days, but I have no regrets at all about how I spent those coins. I'm more passionate about this than most, I know, but I 100% believe that legacy finance is a massive hindrance to the sustainability of our species, and crypto-economics will be a key aspect in building healthy incentives for a technologically driven society.

zadler 6y ago
Why only healthy incentives? Could they not equally be unhealthy ones?
- px43 6y ago
  First off, "healthy" is subjective, and open to the interpretation of the builder. Second, why would someone work to build unhealthy incentives? Seems counterproductive.
ced 6y ago
I 100% believe that legacy finance is a massive hindrance to the sustainability of our species, Could you please expand on that? Why?
nelsonenzo 6y ago
So, what about refunds when corporations rip us off? And what about losing 100% of my funds when my key is lost or stolen? All keys are lost/stolen - it doesn't take a rocket degree to have observed that from human behavior. Who enforces splitting of equity when some rich dick beats his wife into submission? The courts don't control any bitcoin keys. The problems of bitcoin are proportionately larger than then problems with fiat. The only people saying otherwise are those that are profiting from the opposite perspective. If we are not a bitcoin miner, then how will we get the funds to begin with? Right now I can trade fiat for it, but in the future my children would not be able to trade fiat for it (assuming it's as good as you say it is). So, they will become indentured servants to the bitcoin miners.
- xtracto 6y ago
  All of those are the same problems money has. Refunds capability is something built on top of cash. It will be built on top of cryptocurrencies. Money can be stolen and locked and hidden and whatnot.
  - UncleMeat 6y ago
    But if it is built on top of cryptocurrencies then you don't have the trustlessness that makes it different from cash and banking. Why would banks and businesses choose to transact primarily in btc?
    - DownGoat 6y ago
      Because the markets wants to trade on it. Going with the assumption that crypto will "succeed" in the future, any business or bank not trading on it would be loosing out to businesses that are capable to do both.
      - UncleMeat 6y ago
        That is circular. BTC will succeed as an investment because it will supplant other systems for banking. BTC will supplant other systems for banking because it succeeds as an investment.
badjeans 6y ago
What a weird comment. There's tons of fraud within the bitcoin ecosystem, and it's also used in a lot of fraud too.
- amelius 6y ago
  > What a weird comment It's just another comment by someone who tries to fabricate a self-fulfilling prophecy.
throwaway5752 6y ago
Maybe you can help me out, then? How does the network increase the transaction rate to current global rates (at least 10^4 higher)? What happens when the mining phase completes, or if there is a drop in value? What is a sustainable transaction fee for miners to take absent mining incentives? What happens over long periods of time from hardware failures where wallets are lost? It's probably my problem not researching well enough, but if you know or can point me to anything I would be grateful.
- ric2b 6y ago
  > How does the network increase the transaction rate to current global rates (at least 10^4 higher)? Efficiency improvements on the base chain, 2nd layer technologies like Lightning Network and ultimately increasing the base block size limit. > What happens when the mining phase completes, or if there is a drop in value? Mining doesn't "complete". There have been many massive drops in value in Bitcoin's history, not sure what you're asking about, it just keeps working? > What is a sustainable transaction fee for miners to take absent mining incentives? Anything above 0 is sustainable, you can mine for free if you're using the energy to heat your house. The question is how much energy the network needs to spend to remain secure, that I don't know, depends on how much any potential attackers are willing to spend to attack it. > What happens over long periods of time from hardware failures where wallets are lost? Bitcoin deflates? If some coins are lost but demand remains the same the value of the remaining coins goes up.
NickM 6y ago
I think you are very confused. Asymmetric cryptography is a completely separate, much older technology that has nothing directly to do with cryptocurrencies. Furthermore, Bitcoin does nothing to solve the kind of fraud problems you are talking about, and in fact makes the consequences of them much worse, since you no longer have a central authorities that can reverse fraudulant transactions and the like. The "double spend" problem refers to a problem in distributed systems, not applied security.
- ric2b 6y ago
  > Asymmetric cryptography is a completely separate, much older technology that has nothing directly to do with cryptocurrencies. It does, Bitcoin wouldn't work without it, the whole thing relies on cryptographic signatures. > The "double spend" problem refers to a problem in distributed systems, not applied security. Is it not both? It's a security issue present in distributed systems.
  - NickM 6y ago
    Bitcoin wouldn't work without it - sure, it's a building block, but the core innovation behind Bitcoin is not asymmetric crypto. The parent comment was implying that using asymmetric crypto in finance would solve problems with security and fraud, when in truth, asymmetric crypto has already been in use since well before Bitcoin came along, and is an important technology but has not magically solved all our security problems. There are multiple separate things being conflated here in incorrect ways.
    - bondarchuk 6y ago
      >There are multiple separate things being conflated here in incorrect ways. Only by you. Read more carefully.

by px43 6y ago

zadler 6y ago

Why only healthy incentives? Could they not equally be unhealthy ones?

px43 6y ago
First off, "healthy" is subjective, and open to the interpretation of the builder. Second, why would someone work to build unhealthy incentives? Seems counterproductive.

ced 6y ago

I 100% believe that legacy finance is a massive hindrance to the sustainability of our species, Could you please expand on that? Why?

nelsonenzo 6y ago

So, what about refunds when corporations rip us off? And what about losing 100% of my funds when my key is lost or stolen? All keys are lost/stolen - it doesn't take a rocket degree to have observed that from human behavior. Who enforces splitting of equity when some rich dick beats his wife into submission? The courts don't control any bitcoin keys. The problems of bitcoin are proportionately larger than then problems with fiat. The only people saying otherwise are those that are profiting from the opposite perspective. If we are not a bitcoin miner, then how will we get the funds to begin with? Right now I can trade fiat for it, but in the future my children would not be able to trade fiat for it (assuming it's as good as you say it is). So, they will become indentured servants to the bitcoin miners.

xtracto 6y ago
All of those are the same problems money has. Refunds capability is something built on top of cash. It will be built on top of cryptocurrencies. Money can be stolen and locked and hidden and whatnot.
- UncleMeat 6y ago
  But if it is built on top of cryptocurrencies then you don't have the trustlessness that makes it different from cash and banking. Why would banks and businesses choose to transact primarily in btc?
  - DownGoat 6y ago
    Because the markets wants to trade on it. Going with the assumption that crypto will "succeed" in the future, any business or bank not trading on it would be loosing out to businesses that are capable to do both.
    - UncleMeat 6y ago
      That is circular. BTC will succeed as an investment because it will supplant other systems for banking. BTC will supplant other systems for banking because it succeeds as an investment.

badjeans 6y ago

What a weird comment. There's tons of fraud within the bitcoin ecosystem, and it's also used in a lot of fraud too.

amelius 6y ago
> What a weird comment It's just another comment by someone who tries to fabricate a self-fulfilling prophecy.

throwaway5752 6y ago

Maybe you can help me out, then? How does the network increase the transaction rate to current global rates (at least 10^4 higher)? What happens when the mining phase completes, or if there is a drop in value? What is a sustainable transaction fee for miners to take absent mining incentives? What happens over long periods of time from hardware failures where wallets are lost? It's probably my problem not researching well enough, but if you know or can point me to anything I would be grateful.

ric2b 6y ago
> How does the network increase the transaction rate to current global rates (at least 10^4 higher)? Efficiency improvements on the base chain, 2nd layer technologies like Lightning Network and ultimately increasing the base block size limit. > What happens when the mining phase completes, or if there is a drop in value? Mining doesn't "complete". There have been many massive drops in value in Bitcoin's history, not sure what you're asking about, it just keeps working? > What is a sustainable transaction fee for miners to take absent mining incentives? Anything above 0 is sustainable, you can mine for free if you're using the energy to heat your house. The question is how much energy the network needs to spend to remain secure, that I don't know, depends on how much any potential attackers are willing to spend to attack it. > What happens over long periods of time from hardware failures where wallets are lost? Bitcoin deflates? If some coins are lost but demand remains the same the value of the remaining coins goes up.

NickM 6y ago

I think you are very confused. Asymmetric cryptography is a completely separate, much older technology that has nothing directly to do with cryptocurrencies. Furthermore, Bitcoin does nothing to solve the kind of fraud problems you are talking about, and in fact makes the consequences of them much worse, since you no longer have a central authorities that can reverse fraudulant transactions and the like. The "double spend" problem refers to a problem in distributed systems, not applied security.

ric2b 6y ago
> Asymmetric cryptography is a completely separate, much older technology that has nothing directly to do with cryptocurrencies. It does, Bitcoin wouldn't work without it, the whole thing relies on cryptographic signatures. > The "double spend" problem refers to a problem in distributed systems, not applied security. Is it not both? It's a security issue present in distributed systems.
- NickM 6y ago
  Bitcoin wouldn't work without it - sure, it's a building block, but the core innovation behind Bitcoin is not asymmetric crypto. The parent comment was implying that using asymmetric crypto in finance would solve problems with security and fraud, when in truth, asymmetric crypto has already been in use since well before Bitcoin came along, and is an important technology but has not magically solved all our security problems. There are multiple separate things being conflated here in incorrect ways.
  - bondarchuk 6y ago
    >There are multiple separate things being conflated here in incorrect ways. Only by you. Read more carefully.