4 ms·

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.
    - Mc_Big_G 6y ago
      Correct. It's burning even more vast amounts of energy to do meaningless things that aren't calculations and demonstrably harm the world, especially oil-rich, poor countries.
sesuximo 6y ago
Not related to my original point, but I feel like btc just substitutes trust in an existing banking system with trust in (your wallet provider, the exchange, your computer’s security, and the stability of btc’s price).
rspeele 6y ago
Why was trust worth 12.5 BTC every 10 minutes at the beginning of May 11 2020, but only worth 6.25 BTC every 10 minutes by the end of the day? How did trust get instantly cheaper without causing a disaster? Was Bitcoin paying too much for trust?
- aeternum 6y ago
  The hashrate decreased 25% over the few days on/around May 11 2020. So yes, the price paid for trust decreased 50% and in response the overall security of bitcoin dropped ~25% as a result.
  - rspeele 6y ago
    But the security is still good enough, right? As long as the mining expenditure exceeds the potential illicit rewards of a double-spend, it's not profitable to out-mine the network just to be able to double-spend. So the security of bitcoin should be an all-or-nothing thing: either a 51% attack is profitable, or it's not. It seems to me if there was some way to determine the potential real world reward of a double-spend, Bitcoin could spend exactly the right amount on security: that number + 1. I don't know how to calculate that number. I doubt that Bitcoin mining is matching it precisely because how would it? So it is probably overpaying or underpaying by some amount. So far, Bitcoin appears to have overpaid for security, given that it hasn't been 51%ed. Who knows by how much. Maybe after the next halving, or the one after that, it'll be underpaying?
    - aeternum 6y ago
      It's really hard to price security investment because the primary signal that you've spent too little is often a very costly hack. Flashloans and other derivatives greatly increase the risk since they now enable extreme leverage on only a small amount of initial capital.

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.
  - Mc_Big_G 6y ago
    Correct. It's burning even more vast amounts of energy to do meaningless things that aren't calculations and demonstrably harm the world, especially oil-rich, poor countries.

sesuximo 6y ago

Not related to my original point, but I feel like btc just substitutes trust in an existing banking system with trust in (your wallet provider, the exchange, your computer’s security, and the stability of btc’s price).

rspeele 6y ago

Why was trust worth 12.5 BTC every 10 minutes at the beginning of May 11 2020, but only worth 6.25 BTC every 10 minutes by the end of the day? How did trust get instantly cheaper without causing a disaster? Was Bitcoin paying too much for trust?

aeternum 6y ago
The hashrate decreased 25% over the few days on/around May 11 2020. So yes, the price paid for trust decreased 50% and in response the overall security of bitcoin dropped ~25% as a result.
- rspeele 6y ago
  But the security is still good enough, right? As long as the mining expenditure exceeds the potential illicit rewards of a double-spend, it's not profitable to out-mine the network just to be able to double-spend. So the security of bitcoin should be an all-or-nothing thing: either a 51% attack is profitable, or it's not. It seems to me if there was some way to determine the potential real world reward of a double-spend, Bitcoin could spend exactly the right amount on security: that number + 1. I don't know how to calculate that number. I doubt that Bitcoin mining is matching it precisely because how would it? So it is probably overpaying or underpaying by some amount. So far, Bitcoin appears to have overpaid for security, given that it hasn't been 51%ed. Who knows by how much. Maybe after the next halving, or the one after that, it'll be underpaying?
  - aeternum 6y ago
    It's really hard to price security investment because the primary signal that you've spent too little is often a very costly hack. Flashloans and other derivatives greatly increase the risk since they now enable extreme leverage on only a small amount of initial capital.