7 ms·

Let’s Destroy Bitcoin

44 points by noch 6y ago

voxadam 6y ago
Better link (no sign-in): https://www.technologyreview.com/2018/04/24/143425/lets-destroy-bitcoin/ https://www.technologyreview.com/2018/04/24/143425/lets-dest...
qqii 6y ago
The article presents some long term and optemistic possibilities of making bitcoin irrelevant but I'm not that convinced. I'm by no means a bitcoin maximalist but the trust and network effect of bitcoin is something every other cryptocurrency struggles with and difficult to replicate. I believe a government run blockchain is a likely outcome, but this doesn't share many similarities with Bitcoin. The currently common rhetoric is that Bitcoin's 21 million limit is a hedge against inflation and a government blockchain won't satisfy people looking for this. The Facebook sneak attack it proposes has two avenues - it's own token (and we saw how that went) or taking over. The possibility of an more insidious takeover is already a possibility now that vendors like PayPal allow you to buy cryptocurrency. PayPal's version of Bitcoin is already nothing like Bitcoin - only PayPal can hold it for you, you cannot sent it to others or spend it and others cannot send you more. The problem is that even if PayPal or Facebook could capture a large user market that doesn't give miners much incentive to switch to their fork. When they forked it would be world news and I'm sure they'll have lawsuits and people demanding their private keys. I find the third option the most likely, but who knows how long it will take and if it will happen. As a new digital currency bitcoin has had the fairest distribution, currently the greatest hashrate and if you include wBTC and it's variants it still finalises a lot of value. For an already complex idea it has name recognition and is relatively simple and understandable in design. It's hard cap of 21 million and stage in the distribution cycle can only be replicated in time. Even now by many metrics Ethereum has an advantage over Bitcoin but as the article point out is only a third of its market cap. Even if Bitcoin's market dominance dropped in the short term it's unlikely that the distribution would favour a single project. To conclude I'm not convinced that Bitcoin's stop of greatest cryptocurrency market cap will be replaced in the short to medium term of 10-20 years.
- twox2 6y ago
  "As a new digital currency bitcoin has had the fairest distribution," Not sure I agree with this, but I guess it depends what your definition of fair is. I think something like 2%-5% of BTC wallets control like 90% of BTC.
  - ivanche 6y ago
    It's even worse. According to [1], around 2.18% of addresses control around 94.75% of BTC. [1] https://bitinfocharts.com/top-100-richest-bitcoin-addresses.html https://bitinfocharts.com/top-100-richest-bitcoin-addresses....
    - cdiddy2 6y ago
      that includes exchange addresses though. each exchange address can hold BTC for millions of people
      - ivanche 6y ago
        You're right, it includes exchange addresses. Although my stance is, other people's address == other people's BTC. They might temporarily be a custodian for you but sooner or later something bad will happen.
  - tromp 6y ago
    With half of all bitcoin emitted in just the first 4 years of existence, it's not very evenly distributed. Yet most other cryptocurrencies have an even worse distribution, especially those with premines.
- okprod 6y ago
  I think in the long-term the first scenario will happen more so than the third, and the second, even if it does, will just be how Bitcoin is treated now. It's unlikely national governments will allow an unregulated digital currency to not be under their control, both from regulatory and economic angles.
Proven 6y ago
Latest news ... from 2018. Thanks for wasting my time.
sesuximo 6y ago
My only complaint about Bitcoin is the energy use. And I think it would be reasonable to whitelist things that are allowed to use so much electricity (or make their prices rise as a function of use)
- HWR_14 6y ago
  I know some localities turned to usage based rates, so a normal household (or maybe a normal house times two or three) was at a regular rate and then there was a sharp jump for usage after that (averaged over the month). Somehow they handled factories, etc. in a different system, but they wanted to only subsidize electricity for certain uses.
- Mc_Big_G 6y ago
  How much is trust worth?
  - tsujp 6y ago
    Not definitive but at least the debt wiped out in the GFC including what is called "the lost decade". So at least quite a bit.
  - zepto 6y ago
    It’s not actually trust if you have to pay for it by destroying the planet.
    - Mc_Big_G 6y ago
      How do you think the military industrial complex works to back the dollar?
      - zepto 6y ago
        Not by burning vast amounts of energy to do meaningless calculations whose results are discarded.
dchuk 6y ago
While I hold a modest amount of Bitcoin, it’s pretty clear that it’s just digital gold at this point, and not really a currency in a practical sense. And the mining situation is ridiculous, both from a power usage perspective and a miner centralization perspective. I’ve been digging into this project lately and it’s pretty exciting: https://www.chia.net https://www.chia.net especially considering Bram Cohen is the brain behind it (the BitTorrent guy). Really good real time community on Keybase, I also launched a forum that I’m trying to get some traction with to preserve knowledge for the project at https://chiaforum.com https://chiaforum.com It’s a lot of fun building and running the chia farming rigs, feels way more accessible than the mining stuff. Also, since it’s barely just launched, and it’s on good tech foundation, it’s exciting to be in “early” on a new coin.
- jsilence 6y ago
  Yeah, I think a lot of altcoins try to create the 'early in' vibe. Not sure how many and which of them avoid becoming irelevant in the long term.
  - tromp 6y ago
    Perhaps one that avoids the 'early in' vibe by having an even distribution over time.
- donmcronald 6y ago
  Is this something I could get into with 2TB disks? Say 12-15 2TB disks. I have a bunch that are too old to trust and are sitting on a shelf. Any idea how disk failures affect things?
  - dpiers 6y ago
    Yes, you could do that. 24-30TB of plots would win a block roughly every day or so with the current netspace. I'm using a bunch of used drives and not worried about disk failure because worst case scenario is replacing the drive and re-generating new plots.
  - 6y ago
narven 6y ago
lets
digital-cygnet 6y ago
(2018) -- so bits of this already seem dated, for instance the idea of a profusion of coins being a feature, not a bug, of the crypto space: > “Think of this as an incredibly efficient barter system,” says Harvey. “Barter is generally inefficient, but if you have a network and you tokenize the goods and services and enable it with a blockchain, it can become very efficient.” Maybe I just lack imagination, but I am missing where the benefit of this lies. When Apple has a coin and Toyota has a coin and Kodak has a coin (as seemed would be the case at the time this was published) why is it any better to hold any one of these, barter through a set of intermediaries to get to ConvenienceStoreCoin, and settle your candy purchase with that, versus holding investments, selling them for cash, and using that everywhere? Even putting transaction costs aside, my sense is that a natural, shared unit of account / means of exchange will end up predominating and this "incredibly efficient barter system" won't be the paradigm shift the article implies.
- javert 6y ago
  You are correct. A good definition of money is "the most liquid good." People want to use the single most liquid good in transactions, for ease of transaction. In other words, good money drives out the bad.
- noch 6y ago
  > Maybe I just lack imagination, but I am missing where the benefit of this lies. When Apple has a coin and Toyota has a coin and Kodak has a coin (as seemed would be the case at the time this was published) why is it any better to hold any one of these, barter through a set of intermediaries to get to ConvenienceStoreCoin, and settle your candy purchase with that, versus holding investments, selling them for cash, and using that everywhere? These corporate coins, are a form of company scrip. " In the United States, mining and logging camps were typically created, owned and operated by a single company. These locations, some quite remote, were often cash poor; even in ones that were not, workers paid in scrip had little choice but to purchase goods at a company store, as exchange into currency, if even available, would exhaust some of the value via the exchange fee. With this economic monopoly, the employer could place large markups on goods, making workers dependent on the company, thus enforcing employee "loyalty". " https://en.m.wikipedia.org/wiki/Company_scrip https://en.m.wikipedia.org/wiki/Company_scrip
mempko 6y ago
The most probable decline of bitcoin imo is regulation or societal collapse from ecosystem loss from climate change. Both are a 10-30year timeframe kind of thing imo.

44 points by noch 6y ago

Better link (no sign-in): https://www.technologyreview.com/2018/04/24/143425/lets-destroy-bitcoin/ https://www.technologyreview.com/2018/04/24/143425/lets-dest...

qqii 6y ago

The article presents some long term and optemistic possibilities of making bitcoin irrelevant but I'm not that convinced. I'm by no means a bitcoin maximalist but the trust and network effect of bitcoin is something every other cryptocurrency struggles with and difficult to replicate. I believe a government run blockchain is a likely outcome, but this doesn't share many similarities with Bitcoin. The currently common rhetoric is that Bitcoin's 21 million limit is a hedge against inflation and a government blockchain won't satisfy people looking for this. The Facebook sneak attack it proposes has two avenues - it's own token (and we saw how that went) or taking over. The possibility of an more insidious takeover is already a possibility now that vendors like PayPal allow you to buy cryptocurrency. PayPal's version of Bitcoin is already nothing like Bitcoin - only PayPal can hold it for you, you cannot sent it to others or spend it and others cannot send you more. The problem is that even if PayPal or Facebook could capture a large user market that doesn't give miners much incentive to switch to their fork. When they forked it would be world news and I'm sure they'll have lawsuits and people demanding their private keys. I find the third option the most likely, but who knows how long it will take and if it will happen. As a new digital currency bitcoin has had the fairest distribution, currently the greatest hashrate and if you include wBTC and it's variants it still finalises a lot of value. For an already complex idea it has name recognition and is relatively simple and understandable in design. It's hard cap of 21 million and stage in the distribution cycle can only be replicated in time. Even now by many metrics Ethereum has an advantage over Bitcoin but as the article point out is only a third of its market cap. Even if Bitcoin's market dominance dropped in the short term it's unlikely that the distribution would favour a single project. To conclude I'm not convinced that Bitcoin's stop of greatest cryptocurrency market cap will be replaced in the short to medium term of 10-20 years.

twox2 6y ago
"As a new digital currency bitcoin has had the fairest distribution," Not sure I agree with this, but I guess it depends what your definition of fair is. I think something like 2%-5% of BTC wallets control like 90% of BTC.
- ivanche 6y ago
  It's even worse. According to [1], around 2.18% of addresses control around 94.75% of BTC. [1] https://bitinfocharts.com/top-100-richest-bitcoin-addresses.html https://bitinfocharts.com/top-100-richest-bitcoin-addresses....
  - cdiddy2 6y ago
    that includes exchange addresses though. each exchange address can hold BTC for millions of people
    - ivanche 6y ago
      You're right, it includes exchange addresses. Although my stance is, other people's address == other people's BTC. They might temporarily be a custodian for you but sooner or later something bad will happen.
- tromp 6y ago
  With half of all bitcoin emitted in just the first 4 years of existence, it's not very evenly distributed. Yet most other cryptocurrencies have an even worse distribution, especially those with premines.
okprod 6y ago
I think in the long-term the first scenario will happen more so than the third, and the second, even if it does, will just be how Bitcoin is treated now. It's unlikely national governments will allow an unregulated digital currency to not be under their control, both from regulatory and economic angles.

Proven 6y ago

Latest news ... from 2018. Thanks for wasting my time.

sesuximo 6y ago

My only complaint about Bitcoin is the energy use. And I think it would be reasonable to whitelist things that are allowed to use so much electricity (or make their prices rise as a function of use)

HWR_14 6y ago
I know some localities turned to usage based rates, so a normal household (or maybe a normal house times two or three) was at a regular rate and then there was a sharp jump for usage after that (averaged over the month). Somehow they handled factories, etc. in a different system, but they wanted to only subsidize electricity for certain uses.
Mc_Big_G 6y ago
How much is trust worth?
- tsujp 6y ago
  Not definitive but at least the debt wiped out in the GFC including what is called "the lost decade". So at least quite a bit.
- zepto 6y ago
  It’s not actually trust if you have to pay for it by destroying the planet.
  - Mc_Big_G 6y ago
    How do you think the military industrial complex works to back the dollar?
    - zepto 6y ago
      Not by burning vast amounts of energy to do meaningless calculations whose results are discarded.

dchuk 6y ago

While I hold a modest amount of Bitcoin, it’s pretty clear that it’s just digital gold at this point, and not really a currency in a practical sense. And the mining situation is ridiculous, both from a power usage perspective and a miner centralization perspective. I’ve been digging into this project lately and it’s pretty exciting: https://www.chia.net https://www.chia.net especially considering Bram Cohen is the brain behind it (the BitTorrent guy). Really good real time community on Keybase, I also launched a forum that I’m trying to get some traction with to preserve knowledge for the project at https://chiaforum.com https://chiaforum.com It’s a lot of fun building and running the chia farming rigs, feels way more accessible than the mining stuff. Also, since it’s barely just launched, and it’s on good tech foundation, it’s exciting to be in “early” on a new coin.

jsilence 6y ago
Yeah, I think a lot of altcoins try to create the 'early in' vibe. Not sure how many and which of them avoid becoming irelevant in the long term.
- tromp 6y ago
  Perhaps one that avoids the 'early in' vibe by having an even distribution over time.
donmcronald 6y ago
Is this something I could get into with 2TB disks? Say 12-15 2TB disks. I have a bunch that are too old to trust and are sitting on a shelf. Any idea how disk failures affect things?
- dpiers 6y ago
  Yes, you could do that. 24-30TB of plots would win a block roughly every day or so with the current netspace. I'm using a bunch of used drives and not worried about disk failure because worst case scenario is replacing the drive and re-generating new plots.
- 6y ago

narven 6y ago

lets

digital-cygnet 6y ago

(2018) -- so bits of this already seem dated, for instance the idea of a profusion of coins being a feature, not a bug, of the crypto space: > “Think of this as an incredibly efficient barter system,” says Harvey. “Barter is generally inefficient, but if you have a network and you tokenize the goods and services and enable it with a blockchain, it can become very efficient.” Maybe I just lack imagination, but I am missing where the benefit of this lies. When Apple has a coin and Toyota has a coin and Kodak has a coin (as seemed would be the case at the time this was published) why is it any better to hold any one of these, barter through a set of intermediaries to get to ConvenienceStoreCoin, and settle your candy purchase with that, versus holding investments, selling them for cash, and using that everywhere? Even putting transaction costs aside, my sense is that a natural, shared unit of account / means of exchange will end up predominating and this "incredibly efficient barter system" won't be the paradigm shift the article implies.

javert 6y ago
You are correct. A good definition of money is "the most liquid good." People want to use the single most liquid good in transactions, for ease of transaction. In other words, good money drives out the bad.
noch 6y ago
> Maybe I just lack imagination, but I am missing where the benefit of this lies. When Apple has a coin and Toyota has a coin and Kodak has a coin (as seemed would be the case at the time this was published) why is it any better to hold any one of these, barter through a set of intermediaries to get to ConvenienceStoreCoin, and settle your candy purchase with that, versus holding investments, selling them for cash, and using that everywhere? These corporate coins, are a form of company scrip. " In the United States, mining and logging camps were typically created, owned and operated by a single company. These locations, some quite remote, were often cash poor; even in ones that were not, workers paid in scrip had little choice but to purchase goods at a company store, as exchange into currency, if even available, would exhaust some of the value via the exchange fee. With this economic monopoly, the employer could place large markups on goods, making workers dependent on the company, thus enforcing employee "loyalty". " https://en.m.wikipedia.org/wiki/Company_scrip https://en.m.wikipedia.org/wiki/Company_scrip

mempko 6y ago

The most probable decline of bitcoin imo is regulation or societal collapse from ecosystem loss from climate change. Both are a 10-30year timeframe kind of thing imo.