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I think this is simplistic. It’s viewing Bitcoin through a lens of a traditional Ponzi scheme assuming people that trade their fiat currency for Bitcoin are inv

I think this is simplistic. It’s viewing Bitcoin through a lens of a traditional Ponzi scheme assuming people that trade their fiat currency for Bitcoin are investing, with a view to one day take profits back into dollars. What if people are seeing discussion of minting a trillion dollar coin, trillions in QE, 25% of all dollars created in the last 12 months…and concluding that fiat currency is in an endgame and they are permanently trading what fiat they have now for one of a finite number of digital assets that will ever be created. As Michael Saylor once said in an interview: “It’s the superior asset, Laura”

echelon 5y ago
Quantum computing is going to bring this entire house down. Money without an army is just paper. Or, in this case, imaginary numbers. There will be no one to cry to when the machines start cracking all the hashes and wipe away the entire ecosystem. I'd wager the NSA already has this capability, but they won't blow it on something so stupid.
- Sargos 5y ago
  Ethereum already has quantum resistant algorithms ready to go for each part of the system but they perform worse so it doesn't make sense to start using them until quantum computers are more real. There is no long term threat from quantum computing to Ethereum or other systems like it.
- arthurcolle 5y ago
  They'll make new quantum proof encryption - isn't this an active area of cryptography research? JQI at UMD, NIST's Quantum Computing Group - these teams must be doing something with all the grant money
  - px43 5y ago
    QRL is a thing https://www.theqrl.org https://www.theqrl.org It uses XMSS, and does it fairly well.
    - arthurcolle 5y ago
      I'm talking about real technology. I think I owned like 100K of these at some point lmao
- acomjean 5y ago
  I see your point. But if quantum computers start breaking encryption, crypto currency is probably pretty low on the list of worries…
  - meowkit 5y ago
    Quantum proof encryption already exists.
- anonporridge 5y ago
  sigh...you haven't even begun to understand how bitcoin actually works. https://en.bitcoin.it/wiki/Quantum_computing_and_Bitcoin#Mitigations https://en.bitcoin.it/wiki/Quantum_computing_and_Bitcoin#Mit...
Osmose 5y ago
If it's not about cashing out then why is the primary hype mechanism talking about the dollar-equivalent value of anything crypto related? Why does it matter if an NFT was sold for $300k worth of ether?
- imsd 5y ago
  More and more, I'm hearing only the ETH value rather than dollar denomination. Personally, when I bid (or receive bids) on any of my NFTs, I'm only considering the ETH price. It's a new shift, but I think quite profound. Edit: If you're referring to mainstream media, the dollar value is all that most would be able to put into context. For those deep in the space, we're thinking about dollar values less and less. My primary benchmark on overall portfolio value is the value denominated in ETH, not USD.
  - bb88 5y ago
    But ETH is still tied to the dollar and that's where it gets its value, is in the comparison to the dollar. I don't accept ETH for a used car I'm going to sell. I accept dollars, though.
    - imsd 5y ago
      I'm not sure I understand. You could denominate ETH in dollars, yen, euros, gold, or any other form of money/currency. Although USD might be your preferred, many would happily sell a vehicle for compensation in BTC, ETH, silver, gold, euros, etc.
      - bb88 5y ago
        Well... I wouldn't, nor would 95% of the US. I want to be paid in stable currency backed by the full faith and force of the US Government. "Oh shit, the internet went out. Hope the value of my ETH doesn't crash through the floor while the internet is down...."
        5y ago
Aaronstotle 5y ago
I agree with your sentiment, however I wouldn't use Michael Saylor's quotes as strong ground to stand on, he also said BTC can scale to millions of transactions per second which is impossible. IMO he comes off a grifter who needed to save his company and kept buying loads of BTC to start the "institutions are buying" FOMO.
- mrorbitman 5y ago
  > he also said BTC can scale to millions of transactions per second which is impossible He's probably referring to the lightning network, which is theoretically capable of handling millions or even someday billions of bitcoin transactions per second.
sailingparrot 5y ago
> What if people are seeing [...] What if my grandmother had wheels? More seriously, how many people do you know are seeing what you are talking about? Everyone I know that invested in crypto did so hoping to trade it back later on for more fiat than they paid. Sure, maybe it's a biased sample, but it's a sizeable sample and I do not know even a single person that traded their fiat for crypto definitly.
- dosenbrot 5y ago
  How about the stock market? Everyone I know that invested in stocks did so hoping to trade it back later on for more fiat than they paid.
  - jschwartzi 5y ago
    Well the idea that stocks must go up is a kind of scheme in itself. The whole financialization of our economy is based on constant growth. So you could argue that it’s a Ponzi scheme as well. Our children will likely be caught holding the bag.
    - anonporridge 5y ago
      You could argue that civilization itself is a Ponzi scheme. One day, there will be a final generation left holding the bag.
    - geysersam 5y ago
      The difference is that both stocks and the general economy produces value. This is what separates them from a Ponzi which is only a redistribution of assets.
    - megameter 5y ago
      "Civilization is a Ponzi" is essentially my conclusion. The thing holding up government backing as the standard of real asset is simply its capacity as the just middleman enforcer. Subtract that and currency, real estate, stocks, bonds, contracts, credit ratings and IP rights all go poof. You're left with clothes-on-your-back and local community trust. That's why I see crypto tokenization as an important step towards having another "financial material" to work with. It doesn't commandeer enforcement at a global level, so it doesn't compete with governments on their own terms, but it can help build trust at scale by being designed around the trustless scenario, which reduces reliance on enforcement and bureaucratic methodology in many applications. Crypto projects with a focus on achieving good governance are some of the most promising out there, even as they are hidden in the endless waves of scams.
LurkingPenguin 5y ago
> It’s viewing Bitcoin through a lens of a traditional Ponzi scheme... And? Should we should look at it through a lens of a non-traditional Ponzi scheme? Ponzi 2.0 is better than Ponzi 1.0? > What if people are seeing discussion of minting a trillion dollar coin, trillions in QE, 25% of all dollars created in the last 12 months…and concluding that fiat currency is in an endgame and they are permanently trading what fiat they have now for one of a finite number of digital assets that will ever be created. If the Debt Bubble is nearing its end and fiat currency is in grave jeopardy, what is the mechanism by which the people holding these "digital assets" will save themselves from the economic hell that awaits the world?
wpietri 5y ago
It is absolutely not finite. Coinmarketcap.com lists 7048 cryptocurrencies, with 96 of them having nominal values over $1 billion.
- hanniabu 5y ago
  OP mispoke and meant the supply is finite.
  - wpietri 5y ago
    It's not finite. The supply of cryptocurrencies is effectively infinite. There's almost no barrier to entry. In the closest historical equivalent, the wildcat banking era, at least you had to have state-chartered bank. [1] But what's it take to launch a cryptocurrency these days? Is it anything beyond a tech guy, a marketing guy, and a a credit card with a little room? [1] https://en.wikipedia.org/wiki/Wildcat_banking https://en.wikipedia.org/wiki/Wildcat_banking
    - jspaetzel 5y ago
      You don't really need a room to do it...
      - wpietri 5y ago
        Sorry, I mean a little room on the credit card for the initial spending.
    - hanniabu 5y ago
      The supply in different cryptos is infinite, but the supply of any particular crypto may or may not be infinite. In the case of bitcoin which was the topic of discussion, it's finite. To say it's not is plainly false. Your (clear) bias is blinding you.
      - wpietri 5y ago
        Bitcoin is no longer the only cryptocurrency, and is competing for investor money with all the rest. If all of those were basically unused, I'd say you had a point. But since that's not the case, I stand by my view that "people that trade their fiat currency", as mentioned in the post I'm replying to, are a crucial part of the analysis.
tptacek 5y ago
That objection is addressed, with its own subsection, in the post.
mdoms 5y ago
0%* of Bitcoin holders are in it for the currency aspects. * Within margin of error
Imnimo 5y ago
What percentage of the current value of Bitcoin do you believe is driven by demand from people with that outlook?
- anonporridge 5y ago
  Who cares? Whenever this bull run stalls and crashes, people who don't think this way will sell out thinking the party is over. Meanwhile, the total number of people who view bitcoin as a permanent allocation in their asset portfolio will have increased drastically, and they'll keep on stacking sats. Each boom bust cycle operates this way. A minority of new investors become true believers, and the rest of the chaff wash away in the crash.
kirillzubovsky 5y ago
> One of a finite number of digital assets that will ever be created. That would have been a plausible explanation, if not for the abundance of digital currencies. There are now many more times crypto assets than there are actual currencies in the world, and new ones seem to be created every day. There is absolutely nothing "finite" about crypto anymore.

echelon 5y ago

Quantum computing is going to bring this entire house down. Money without an army is just paper. Or, in this case, imaginary numbers. There will be no one to cry to when the machines start cracking all the hashes and wipe away the entire ecosystem. I'd wager the NSA already has this capability, but they won't blow it on something so stupid.

Sargos 5y ago
Ethereum already has quantum resistant algorithms ready to go for each part of the system but they perform worse so it doesn't make sense to start using them until quantum computers are more real. There is no long term threat from quantum computing to Ethereum or other systems like it.
arthurcolle 5y ago
They'll make new quantum proof encryption - isn't this an active area of cryptography research? JQI at UMD, NIST's Quantum Computing Group - these teams must be doing something with all the grant money
- px43 5y ago
  QRL is a thing https://www.theqrl.org https://www.theqrl.org It uses XMSS, and does it fairly well.
  - arthurcolle 5y ago
    I'm talking about real technology. I think I owned like 100K of these at some point lmao
acomjean 5y ago
I see your point. But if quantum computers start breaking encryption, crypto currency is probably pretty low on the list of worries…
- meowkit 5y ago
  Quantum proof encryption already exists.
anonporridge 5y ago
sigh...you haven't even begun to understand how bitcoin actually works. https://en.bitcoin.it/wiki/Quantum_computing_and_Bitcoin#Mitigations https://en.bitcoin.it/wiki/Quantum_computing_and_Bitcoin#Mit...

Osmose 5y ago

If it's not about cashing out then why is the primary hype mechanism talking about the dollar-equivalent value of anything crypto related? Why does it matter if an NFT was sold for $300k worth of ether?

imsd 5y ago
More and more, I'm hearing only the ETH value rather than dollar denomination. Personally, when I bid (or receive bids) on any of my NFTs, I'm only considering the ETH price. It's a new shift, but I think quite profound. Edit: If you're referring to mainstream media, the dollar value is all that most would be able to put into context. For those deep in the space, we're thinking about dollar values less and less. My primary benchmark on overall portfolio value is the value denominated in ETH, not USD.
- bb88 5y ago
  But ETH is still tied to the dollar and that's where it gets its value, is in the comparison to the dollar. I don't accept ETH for a used car I'm going to sell. I accept dollars, though.
  - imsd 5y ago
    I'm not sure I understand. You could denominate ETH in dollars, yen, euros, gold, or any other form of money/currency. Although USD might be your preferred, many would happily sell a vehicle for compensation in BTC, ETH, silver, gold, euros, etc.
    - bb88 5y ago
      Well... I wouldn't, nor would 95% of the US. I want to be paid in stable currency backed by the full faith and force of the US Government. "Oh shit, the internet went out. Hope the value of my ETH doesn't crash through the floor while the internet is down...."
      - 5y ago

Aaronstotle 5y ago

I agree with your sentiment, however I wouldn't use Michael Saylor's quotes as strong ground to stand on, he also said BTC can scale to millions of transactions per second which is impossible. IMO he comes off a grifter who needed to save his company and kept buying loads of BTC to start the "institutions are buying" FOMO.

mrorbitman 5y ago
> he also said BTC can scale to millions of transactions per second which is impossible He's probably referring to the lightning network, which is theoretically capable of handling millions or even someday billions of bitcoin transactions per second.

sailingparrot 5y ago

> What if people are seeing [...] What if my grandmother had wheels? More seriously, how many people do you know are seeing what you are talking about? Everyone I know that invested in crypto did so hoping to trade it back later on for more fiat than they paid. Sure, maybe it's a biased sample, but it's a sizeable sample and I do not know even a single person that traded their fiat for crypto definitly.

dosenbrot 5y ago
How about the stock market? Everyone I know that invested in stocks did so hoping to trade it back later on for more fiat than they paid.
- jschwartzi 5y ago
  Well the idea that stocks must go up is a kind of scheme in itself. The whole financialization of our economy is based on constant growth. So you could argue that it’s a Ponzi scheme as well. Our children will likely be caught holding the bag.
  - anonporridge 5y ago
    You could argue that civilization itself is a Ponzi scheme. One day, there will be a final generation left holding the bag.
  - geysersam 5y ago
    The difference is that both stocks and the general economy produces value. This is what separates them from a Ponzi which is only a redistribution of assets.
  - megameter 5y ago
    "Civilization is a Ponzi" is essentially my conclusion. The thing holding up government backing as the standard of real asset is simply its capacity as the just middleman enforcer. Subtract that and currency, real estate, stocks, bonds, contracts, credit ratings and IP rights all go poof. You're left with clothes-on-your-back and local community trust. That's why I see crypto tokenization as an important step towards having another "financial material" to work with. It doesn't commandeer enforcement at a global level, so it doesn't compete with governments on their own terms, but it can help build trust at scale by being designed around the trustless scenario, which reduces reliance on enforcement and bureaucratic methodology in many applications. Crypto projects with a focus on achieving good governance are some of the most promising out there, even as they are hidden in the endless waves of scams.

LurkingPenguin 5y ago

> It’s viewing Bitcoin through a lens of a traditional Ponzi scheme... And? Should we should look at it through a lens of a non-traditional Ponzi scheme? Ponzi 2.0 is better than Ponzi 1.0? > What if people are seeing discussion of minting a trillion dollar coin, trillions in QE, 25% of all dollars created in the last 12 months…and concluding that fiat currency is in an endgame and they are permanently trading what fiat they have now for one of a finite number of digital assets that will ever be created. If the Debt Bubble is nearing its end and fiat currency is in grave jeopardy, what is the mechanism by which the people holding these "digital assets" will save themselves from the economic hell that awaits the world?

wpietri 5y ago

It is absolutely not finite. Coinmarketcap.com lists 7048 cryptocurrencies, with 96 of them having nominal values over $1 billion.

hanniabu 5y ago
OP mispoke and meant the supply is finite.
- wpietri 5y ago
  It's not finite. The supply of cryptocurrencies is effectively infinite. There's almost no barrier to entry. In the closest historical equivalent, the wildcat banking era, at least you had to have state-chartered bank. [1] But what's it take to launch a cryptocurrency these days? Is it anything beyond a tech guy, a marketing guy, and a a credit card with a little room? [1] https://en.wikipedia.org/wiki/Wildcat_banking https://en.wikipedia.org/wiki/Wildcat_banking
  - jspaetzel 5y ago
    You don't really need a room to do it...
    - wpietri 5y ago
      Sorry, I mean a little room on the credit card for the initial spending.
  - hanniabu 5y ago
    The supply in different cryptos is infinite, but the supply of any particular crypto may or may not be infinite. In the case of bitcoin which was the topic of discussion, it's finite. To say it's not is plainly false. Your (clear) bias is blinding you.
    - wpietri 5y ago
      Bitcoin is no longer the only cryptocurrency, and is competing for investor money with all the rest. If all of those were basically unused, I'd say you had a point. But since that's not the case, I stand by my view that "people that trade their fiat currency", as mentioned in the post I'm replying to, are a crucial part of the analysis.

tptacek 5y ago

That objection is addressed, with its own subsection, in the post.

mdoms 5y ago

0%* of Bitcoin holders are in it for the currency aspects. * Within margin of error

Imnimo 5y ago

What percentage of the current value of Bitcoin do you believe is driven by demand from people with that outlook?

anonporridge 5y ago
Who cares? Whenever this bull run stalls and crashes, people who don't think this way will sell out thinking the party is over. Meanwhile, the total number of people who view bitcoin as a permanent allocation in their asset portfolio will have increased drastically, and they'll keep on stacking sats. Each boom bust cycle operates this way. A minority of new investors become true believers, and the rest of the chaff wash away in the crash.

kirillzubovsky 5y ago

> One of a finite number of digital assets that will ever be created. That would have been a plausible explanation, if not for the abundance of digital currencies. There are now many more times crypto assets than there are actual currencies in the world, and new ones seem to be created every day. There is absolutely nothing "finite" about crypto anymore.