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> magical pseudo-currency that solves all problems and unexplainably makes everyone richer and richer That's not what's exciting about bitcoin. What's exciting

> magical pseudo-currency that solves all problems and unexplainably makes everyone richer and richer That's not what's exciting about bitcoin. What's exciting is that it is the first digital, global money that isn't protected by the proof of violence of the state. The US dollar is the world reserve currency because the United States is the best in the world at deploying destructive power, and the British and French currency before that when they were at the height of their power. It's a neutral currency that every nation state on the planet can be ok with, because the system is completely agnostic to who the participants are. The only thing it requires is that you have hash power and internet connectivity. Nation states will have proportional power in the system based on their respective abilities to deploy energy and compute power to the security of the network.

rhinoceraptor 5y ago
Bitcoin isn't a currency, it doesn't function as such. It can only support at most a few dozen transactions per second. It's a speculative instrument, and its value is propped up by Tether, which pretty much everyone agrees is incredibly fraudulent.
- RedBeetDeadpool 5y ago
  The Dollar isn't money, it doesn't function as such. It can't store value very well. Its a federal instrument, and its value is adjusted by the Federal Reserve, which pretty much everyone agrees is incredibly fraudulent.
  - namaria 5y ago
    Let's play a game. You get one bitcoin and I get the dollar value. Let's see who can obtain more goods in 1 hours with it.
    - RedBeetDeadpool 5y ago
      Let's play a game. You get one dollar and I get the bitcoin value. Let's see who can obtain more goods in 20 years with it.
      - rsj_hn 5y ago
        Let's play a different game. I get a dollar and you get the bitcoin value. Then each year, a random number is generated between 0 and 1, and if the number is more than e^(-1.5t), then each of us spends the dollar on a basket of goods and the game stops. We compare, after fees, who ends up getting more goods to decide the winner. Average velocity of money is 1.5. https://www.thebalance.com/velocity-of-money-3306130 https://www.thebalance.com/velocity-of-money-3306130 If you want to compare the usefulness of a bitcoin as an investment locked up for 20 years, then don't compare it to cash, which is used for day to day expenses. The whole point of cash is to spend it whenever you want. It's fine if you view bitcoin as an investment. But then your alternatives are other investments.
nuerow 5y ago
> That's not what's exciting about bitcoin. What's exciting is that it is the first digital, global money that isn't protected by the proof of violence of the state. No, not really. At all. You're trying to make it sound like everyone is just an anarchist activist trying to fight the power, when in reality it's just people scrambling to make a quick buck. Let's be real and put it in perspective: do you feel that people such as the Winklevoss twins give a damn about theoretical concepts such as "proof of violence by the state"?
- spiorf 5y ago
  Motivation of participants is irrelevant. Bitcoin is working because its participants are greedy and behave as such.
  - nuerow 5y ago
    > Motivation of participants is irrelevant. Bitcoin is working because its participants are greedy and behave as such. The key problem you're trying to glance over is the fact that not all participants have the same degree of influence or control. A greedy participant who is in a position to manipulate the market to fit his goals is in an entirely different position than a greedy participant who is completely powerless and vulnerable to this manipulation. Is it ok if someone participating in a Ponzi scheme is fleeced just because you accuse him of being greedy?
    - hnbad 5y ago
      > Is it ok if someone participating in a Ponzi scheme is fleeced just because you accuse him of being greedy? I know this is counter-intuitive, but yes. Yes, they think that. They think that human nature is to be greedy and screw other people over to your own advantage. This is what they mean that capitalism is natural because it builds on human nature. Nevermind that for most of history human societies have been built on gift economies or that humans always cooperate in times of extreme crisis unless there are external influences explicitly preventing it. Social interactions are transactional to them and if you luck out by participating in a Ponzi scheme early that's good and righteous but if you lose by coming in late and being fleeced, it's your own fault. Luck justifies the spoils of success.
ildon 5y ago
> The only thing it requires is that you have hash power and internet connectivity. Your argument is a bit naive and this sentence I quoted is the one that shows the reason. Proof of Work is a energy intensive activity, not to mention the specialized tech it requires. Access to energy today is more than ever a sign of the power (including military power) of a nation, so much that energy itself could be regarded as the ultimate currency [1]. Who has more energy is richer. In short that is because nations with abundance of energy enable all sort of activities. In nations in which energy is scarce, opportunities are constrained by the cost of energy. Because energy in the world is still a relatively scarce resource, powerful nations control natural resources needed to produce energy in any way they can. The obvious example is oil, but also land itself can be seen as a means to produce energy: think of the space needed for solar. So in the end when talking about Bitcoin we are back at square one. Even if it was the only currency of the world, it would still be controlled by those with more power. In short: Bitcoin is governed by spending energy and CPU -> ability to produce energy and CPU -> control over means of production of energy and CPU -> international strength ensuring control over natural resources and IP. [1] https://youtu.be/dcIQdlud88c https://youtu.be/dcIQdlud88c
- throwaway248329 5y ago
  > Even if it was the only currency of the world, it would still be controlled by those with more power. You don't have to be a miner to use Bitcoin and miners don't control Bitcoin. Miners can't force a protocol change, no matter how much hash power they have. https://en.bitcoin.it/wiki/Bitcoin_is_not_ruled_by_miners https://en.bitcoin.it/wiki/Bitcoin_is_not_ruled_by_miners
- FabHK 5y ago
  And, like deployment of military power ("proof of violence by the state"), proof of work has significant harmful externalities.
- Valakas_ 5y ago
  Bitcoin is not governed by spending energy and CPU. In fact all miners on earth could disappear except a guy with a Pentium IV on his basement doing all the BTC mining on the world, and it would still work. The difficulty of the hashing would adjust so that it would be possible for his weak slow guesses to send a block every 10 min.
pcwalton 5y ago
I really would like to see a defense of Bitcoin that doesn't rest on the assumption that I want to live in Galt's Gulch.
- fsflover 5y ago
  https://news.ycombinator.com/item?id=29010965 https://news.ycombinator.com/item?id=29010965
corobo 5y ago
That would have been the case if crypto had been used as a currency instead of as any other stock asset You can't use it anywhere as currency! I guess you can buy weed with it online, but that's about it
- nuerow 5y ago
  > You can't use it anywhere as currency! I guess you can buy weed with it online, but that's about it The same can be said about jugs of Tide detergent, but somehow that's not presented as disruptive technology of the future.
  - corobo 5y ago
    Man I've never had a dealer take Tide detergent
- leppr 5y ago
  I pay for my VPS, VPN, and Netflix subscriptions with BTC. I bought my camera, and various other gadgets with BTC at BicCamera in Japan. I sold my VR kit for BTC. I save and spend my RAI anywhere that accepts Visa with an Eidoo debit card.
  - corobo 5y ago
    In that case you should be writing articles, I'd read! :)
bserge 5y ago
Energy and compute power backed by, you guessed it, proof of violence.
danbruc 5y ago
What's exciting is that it is the first digital, global money that isn't protected by the proof of violence of the state. I really like the idea of trying to build at least some part of society on top of mathematics instead of the laws of physics, but I am not really convinced that cryptocurrencies are an example or that this is even possible. The entire Bitcoin system is still made up of humans and hardware, there are still a lot of ways in which the laws of physics could overrule mathematics. Being distributed admittedly makes this harder but I think it is far from to point of being really effective.
CerealFounder 5y ago
Hah, its all protected by the proof of violence state. When someone is physically trying to take your assets, your going to convert that currency as fast as possible into physical force or protection. The problem is a deep misunderstanding of currency. The structure of currency is a tool humans use to exert and identify power within groups. The idea that a decentralized currency will change human nature or goals to control miss the forrest for the trees. We are animals the violence, control and waning and waxing dominance is the only predictable outcome.
- csomar 5y ago
  That's a darker picture than what actually it is. Violence is mostly driven by lack of resources. When humans can co-operate for better outcomes, they usually do (or at least the successful societies). > The problem is a deep misunderstanding of currency. The structure of currency is a tool humans use to exert and identify power within groups. The idea that a decentralized currency will change human nature or goals to control miss the forrest for the trees. I agree with this. Most people see currency as money or wealth when, in reality, it's a representation of the structure of the system. That's why some countries are experiencing high inflation: It's not the printing of money but rather a symptom of deep internal problems within their economy. See Argentina for example.
  - CerealFounder 5y ago
    Sure, we arent always violent, but there always be people wanting what others have and imbalance otherwise there would be no relative value established. Great example. I dont think its a bug that crypto is almost fully adopted by people who come from means. People are living in very different systems even in the US currently
EdwardDiego 5y ago
> . The US dollar is the world reserve currency because the United States is the best in the world at deploying destructive power, Orrrrr.... because its value is backed by the world's largest economy?
- nuerow 5y ago
  > Orrrrr.... because its value is backed by the world's largest economy? There's also the fact that oil is quoted in US dollars, and about 65 countries, about a third of all the countries in the world, peg their currency to the US dollar[1]. [1] https://www.investopedia.com/articles/forex/040915/countries-use-us-dollar.asp https://www.investopedia.com/articles/forex/040915/countries...
  - hnbad 5y ago
    Sure but why do you think that is. What currency oil is quoted in has more to do with foreign policy than economics. Regardless of what reasons the US may have had to invade Iraq in 2001, Saddam Hussein was literally on record in 2000 for planning to switch away from quoting Iraqi oil in US dollars to the Euro[0]. There was a ton of talk about the 2001 invasions being about the US oil reserves for itself but that's based on a very simplistic understanding of US foreign policy. The US didn't annex the oil fields, it disrupted the national oil company's monopoly to allow privatization of the market and invite international (especially US and US-friendly) investors. It was really more of a hostile takeover backed by the world's largest military. Again, I'm not claiming that this was the sole reason behind the invasion or the primary motivator, but the US has a history of privatizing nationalized industries of countries it successfully invades, overthrows or interferes in the elections of. [0]: Not a conspiracy theory. Here's an article from Nov 2000: http://content.time.com/time/subscriber/article/0,33009,998512,00.html http://content.time.com/time/subscriber/article/0,33009,9985...
    - leesalminen 5y ago
      Just to be clear, the US invaded Iraq in 2003, not 2001. https://en.m.wikipedia.org/wiki/Iraq_War https://en.m.wikipedia.org/wiki/Iraq_War
TeMPOraL 5y ago
> What's exciting is that it is the first digital, global money that isn't protected by the proof of violence of the state. You say this as if it was a good thing. But is it? Look at it from the other direction: it's a tremendous optimization. Imagine a world of Bitcoin, where someone comes and proposes: "Look, we can all keep spending almost all of the world's energy production on scaling basic trade, or... we can just agree that I'll beat up anyone not playing ball, and we can put all that energy to productive use - like farming, medicine, construction, entertainment, science". Does it sound like a bad deal now? Also, the only reason there isn't much threats of violence[0] associated with Bitcoin yet is because cryptocurrencies are tiny. Barely anyone in the real economy cares about crypto[1]. If, by some scary miracle of a trickster god, the economy starts caring for real, cryptocurrencies will get quickly integrated into the mainstream by regulatory means - and regulations are backed by proof of violence. And almost everyone will want that, too, because people will be tired of getting robbed or cheated out of their money. You can't correct an act of violence without another act of violence[2]. (It's not even that hard to rein in Bitcoin. All it would take is for the US govt to announce which chain is considered legitimate by them for the purpose of paying taxes, and that the rest is considered counterfeit money.) -- [0] - Criminal activity notwithstanding. [1] - No, noises made by large banks about running their own blockchains isn't caring - it's just exploring new potential areas of growth and profit. [2] - At least if we generalize "violence" enough, to encompass credible threats of violence. If me stealing your money at gunpoint is an act of violence, then so is the court ordering me to give it back under threat of forcing me into prison.
hnbad 5y ago
Except crypto isn't currency, it's an artificial resource with no inherent usefulness beyond exchange. States won't give up their currencies because that would put all of them in the position of, say, Liberia, rather than the position of the US, EU or China who can literally print money to pay. And even if all state currencies vanished over night, this would change nothing for individuals because the vast majority of wealth is claimed by a minority of individuals and the only thing guaranteeing their claim is the exact monopoly of violence of the state that also backs its currency. You don't have a private yacht because the state guarantees the value of your money with violence against foreign nation state actors. You have a private yacht because the state will ruthlessly punish anyone other than itself trying to take it away from you. The state may be holding a gun to your head to be able to take away what's yours at any time, but it also holds a gun to everyone else's head to prevent them from taking it first. This is why the extremely rich spend so much time, money and energy influencing politics. Not because they want to dismantle the state, but because they want to keep it from using the gun against them while still keeping it pointed at everyone else. Without a state threatening violence to protect your claims on "private property" you'd literally have to raise your own private army to defend it. This is why leftists call anarcho-capitalism "feudalism with extra steps".
- jessaustin 5y ago
  States won't... El Salvador is considered by many to be a state.
  - hnbad 5y ago
    It's interesting that you didn't correct me on Liberia, which actually merely had its currency pegged to the US dollar temporarily. I must have mixed up Liberia with another country. El Salvador is a fun case because they didn't exactly switch to the US dollar because their economy was doing so great but because it was either that or massively devaluing their already dodgy currency because they are a very small country and their economy heavily relies on international trade. They introduced Bitcoin as "legal tender" on top of the US dollar against the will of the majority of their citizens but the law was part of a program to lure in foreign investments. This too followed earlier economic problems, so it's more of a cashgrab than a genuine interest in crypto currencies. El Salvador replaced its currency with the US dollar. It did not replace its currency with Bitcoin. It also didn't replace the US dollar with Bitcoin, it just added it as a form of legal tender. It also suffered almost immediate consequences when the price of Bitcoin crashed and they had to dump additional money into it to compensate for this. It's too early to say but at the moment this doesn't sound like a wise political move for El Salvador rather than a risky publicity stunt for the president.
qeternity 5y ago
> What's exciting is that it is the first digital, global money that isn't protected by the proof of violence of the state. I completely agree that the US govt and all super powers before it have made many mistakes, and shed much blood. But the world isn't a utopian bubble free of conflict. The US military doesn't bestow value to the dollar because it goes around nuking every country in sight...it bestows value because it this huge potential of force keeps more peace than we would otherwise have. It's the same rationale for why a 51% attack on bitcoin is so unlikely: those with the ability to attack, also have the most to lose. Mutually assured destruction was not a new concept that started and ended with the cold war. It's fundamentally game theoretic and is why cooperative strategies are so powerful. If you take into consideration all of the atrocities of the past 50 years, even the truly horrific scars on the US military industrial complex, this has been the most peaceful and prosperous period in all of humanity by a large margin. Could it be better? Of course, and we should strive for that. But the same underlying reasons that the dollar is considered safe are the same forces that allow bitcoin to be successful. The fact that the world has come together and cooperated on a massive information sharing network called the internet is an example of something that, ignoring the tech advancements, would have been unfathomable mere centuries ago.
troyvit 5y ago
Bitcoin uses a lot of energy. Power is (arguably, and not always)[0] gained or exercised through violence, if not of the state then of the large entities that generate that power, be it coal, natural gas, hydro or even solar. [0] https://hbr.org/2021/05/how-much-energy-does-bitcoin-actually-consume https://hbr.org/2021/05/how-much-energy-does-bitcoin-actuall...
namaria 5y ago
Bitcoin has no currency. I can't pay taxes with it, I can't buy groceries with it. It's an asset at best. A wallet has a claim on a number stored in distributed database. No more no less.

rhinoceraptor 5y ago

Bitcoin isn't a currency, it doesn't function as such. It can only support at most a few dozen transactions per second. It's a speculative instrument, and its value is propped up by Tether, which pretty much everyone agrees is incredibly fraudulent.

RedBeetDeadpool 5y ago
The Dollar isn't money, it doesn't function as such. It can't store value very well. Its a federal instrument, and its value is adjusted by the Federal Reserve, which pretty much everyone agrees is incredibly fraudulent.
- namaria 5y ago
  Let's play a game. You get one bitcoin and I get the dollar value. Let's see who can obtain more goods in 1 hours with it.
  - RedBeetDeadpool 5y ago
    Let's play a game. You get one dollar and I get the bitcoin value. Let's see who can obtain more goods in 20 years with it.
    - rsj_hn 5y ago
      Let's play a different game. I get a dollar and you get the bitcoin value. Then each year, a random number is generated between 0 and 1, and if the number is more than e^(-1.5t), then each of us spends the dollar on a basket of goods and the game stops. We compare, after fees, who ends up getting more goods to decide the winner. Average velocity of money is 1.5. https://www.thebalance.com/velocity-of-money-3306130 https://www.thebalance.com/velocity-of-money-3306130 If you want to compare the usefulness of a bitcoin as an investment locked up for 20 years, then don't compare it to cash, which is used for day to day expenses. The whole point of cash is to spend it whenever you want. It's fine if you view bitcoin as an investment. But then your alternatives are other investments.

nuerow 5y ago

> That's not what's exciting about bitcoin. What's exciting is that it is the first digital, global money that isn't protected by the proof of violence of the state. No, not really. At all. You're trying to make it sound like everyone is just an anarchist activist trying to fight the power, when in reality it's just people scrambling to make a quick buck. Let's be real and put it in perspective: do you feel that people such as the Winklevoss twins give a damn about theoretical concepts such as "proof of violence by the state"?

spiorf 5y ago
Motivation of participants is irrelevant. Bitcoin is working because its participants are greedy and behave as such.
- nuerow 5y ago
  > Motivation of participants is irrelevant. Bitcoin is working because its participants are greedy and behave as such. The key problem you're trying to glance over is the fact that not all participants have the same degree of influence or control. A greedy participant who is in a position to manipulate the market to fit his goals is in an entirely different position than a greedy participant who is completely powerless and vulnerable to this manipulation. Is it ok if someone participating in a Ponzi scheme is fleeced just because you accuse him of being greedy?
  - hnbad 5y ago
    > Is it ok if someone participating in a Ponzi scheme is fleeced just because you accuse him of being greedy? I know this is counter-intuitive, but yes. Yes, they think that. They think that human nature is to be greedy and screw other people over to your own advantage. This is what they mean that capitalism is natural because it builds on human nature. Nevermind that for most of history human societies have been built on gift economies or that humans always cooperate in times of extreme crisis unless there are external influences explicitly preventing it. Social interactions are transactional to them and if you luck out by participating in a Ponzi scheme early that's good and righteous but if you lose by coming in late and being fleeced, it's your own fault. Luck justifies the spoils of success.

ildon 5y ago

> The only thing it requires is that you have hash power and internet connectivity. Your argument is a bit naive and this sentence I quoted is the one that shows the reason. Proof of Work is a energy intensive activity, not to mention the specialized tech it requires. Access to energy today is more than ever a sign of the power (including military power) of a nation, so much that energy itself could be regarded as the ultimate currency [1]. Who has more energy is richer. In short that is because nations with abundance of energy enable all sort of activities. In nations in which energy is scarce, opportunities are constrained by the cost of energy. Because energy in the world is still a relatively scarce resource, powerful nations control natural resources needed to produce energy in any way they can. The obvious example is oil, but also land itself can be seen as a means to produce energy: think of the space needed for solar. So in the end when talking about Bitcoin we are back at square one. Even if it was the only currency of the world, it would still be controlled by those with more power. In short: Bitcoin is governed by spending energy and CPU -> ability to produce energy and CPU -> control over means of production of energy and CPU -> international strength ensuring control over natural resources and IP. [1] https://youtu.be/dcIQdlud88c https://youtu.be/dcIQdlud88c

throwaway248329 5y ago
> Even if it was the only currency of the world, it would still be controlled by those with more power. You don't have to be a miner to use Bitcoin and miners don't control Bitcoin. Miners can't force a protocol change, no matter how much hash power they have. https://en.bitcoin.it/wiki/Bitcoin_is_not_ruled_by_miners https://en.bitcoin.it/wiki/Bitcoin_is_not_ruled_by_miners
FabHK 5y ago
And, like deployment of military power ("proof of violence by the state"), proof of work has significant harmful externalities.
Valakas_ 5y ago
Bitcoin is not governed by spending energy and CPU. In fact all miners on earth could disappear except a guy with a Pentium IV on his basement doing all the BTC mining on the world, and it would still work. The difficulty of the hashing would adjust so that it would be possible for his weak slow guesses to send a block every 10 min.

pcwalton 5y ago

I really would like to see a defense of Bitcoin that doesn't rest on the assumption that I want to live in Galt's Gulch.

fsflover 5y ago
https://news.ycombinator.com/item?id=29010965 https://news.ycombinator.com/item?id=29010965

corobo 5y ago

That would have been the case if crypto had been used as a currency instead of as any other stock asset You can't use it anywhere as currency! I guess you can buy weed with it online, but that's about it

nuerow 5y ago
> You can't use it anywhere as currency! I guess you can buy weed with it online, but that's about it The same can be said about jugs of Tide detergent, but somehow that's not presented as disruptive technology of the future.
- corobo 5y ago
  Man I've never had a dealer take Tide detergent
leppr 5y ago
I pay for my VPS, VPN, and Netflix subscriptions with BTC. I bought my camera, and various other gadgets with BTC at BicCamera in Japan. I sold my VR kit for BTC. I save and spend my RAI anywhere that accepts Visa with an Eidoo debit card.
- corobo 5y ago
  In that case you should be writing articles, I'd read! :)

bserge 5y ago

Energy and compute power backed by, you guessed it, proof of violence.

danbruc 5y ago

What's exciting is that it is the first digital, global money that isn't protected by the proof of violence of the state. I really like the idea of trying to build at least some part of society on top of mathematics instead of the laws of physics, but I am not really convinced that cryptocurrencies are an example or that this is even possible. The entire Bitcoin system is still made up of humans and hardware, there are still a lot of ways in which the laws of physics could overrule mathematics. Being distributed admittedly makes this harder but I think it is far from to point of being really effective.

CerealFounder 5y ago

Hah, its all protected by the proof of violence state. When someone is physically trying to take your assets, your going to convert that currency as fast as possible into physical force or protection. The problem is a deep misunderstanding of currency. The structure of currency is a tool humans use to exert and identify power within groups. The idea that a decentralized currency will change human nature or goals to control miss the forrest for the trees. We are animals the violence, control and waning and waxing dominance is the only predictable outcome.

csomar 5y ago
That's a darker picture than what actually it is. Violence is mostly driven by lack of resources. When humans can co-operate for better outcomes, they usually do (or at least the successful societies). > The problem is a deep misunderstanding of currency. The structure of currency is a tool humans use to exert and identify power within groups. The idea that a decentralized currency will change human nature or goals to control miss the forrest for the trees. I agree with this. Most people see currency as money or wealth when, in reality, it's a representation of the structure of the system. That's why some countries are experiencing high inflation: It's not the printing of money but rather a symptom of deep internal problems within their economy. See Argentina for example.
- CerealFounder 5y ago
  Sure, we arent always violent, but there always be people wanting what others have and imbalance otherwise there would be no relative value established. Great example. I dont think its a bug that crypto is almost fully adopted by people who come from means. People are living in very different systems even in the US currently

EdwardDiego 5y ago

> . The US dollar is the world reserve currency because the United States is the best in the world at deploying destructive power, Orrrrr.... because its value is backed by the world's largest economy?

nuerow 5y ago
> Orrrrr.... because its value is backed by the world's largest economy? There's also the fact that oil is quoted in US dollars, and about 65 countries, about a third of all the countries in the world, peg their currency to the US dollar[1]. [1] https://www.investopedia.com/articles/forex/040915/countries-use-us-dollar.asp https://www.investopedia.com/articles/forex/040915/countries...
- hnbad 5y ago
  Sure but why do you think that is. What currency oil is quoted in has more to do with foreign policy than economics. Regardless of what reasons the US may have had to invade Iraq in 2001, Saddam Hussein was literally on record in 2000 for planning to switch away from quoting Iraqi oil in US dollars to the Euro[0]. There was a ton of talk about the 2001 invasions being about the US oil reserves for itself but that's based on a very simplistic understanding of US foreign policy. The US didn't annex the oil fields, it disrupted the national oil company's monopoly to allow privatization of the market and invite international (especially US and US-friendly) investors. It was really more of a hostile takeover backed by the world's largest military. Again, I'm not claiming that this was the sole reason behind the invasion or the primary motivator, but the US has a history of privatizing nationalized industries of countries it successfully invades, overthrows or interferes in the elections of. [0]: Not a conspiracy theory. Here's an article from Nov 2000: http://content.time.com/time/subscriber/article/0,33009,998512,00.html http://content.time.com/time/subscriber/article/0,33009,9985...
  - leesalminen 5y ago
    Just to be clear, the US invaded Iraq in 2003, not 2001. https://en.m.wikipedia.org/wiki/Iraq_War https://en.m.wikipedia.org/wiki/Iraq_War

TeMPOraL 5y ago

> What's exciting is that it is the first digital, global money that isn't protected by the proof of violence of the state. You say this as if it was a good thing. But is it? Look at it from the other direction: it's a tremendous optimization. Imagine a world of Bitcoin, where someone comes and proposes: "Look, we can all keep spending almost all of the world's energy production on scaling basic trade, or... we can just agree that I'll beat up anyone not playing ball, and we can put all that energy to productive use - like farming, medicine, construction, entertainment, science". Does it sound like a bad deal now? Also, the only reason there isn't much threats of violence[0] associated with Bitcoin yet is because cryptocurrencies are tiny. Barely anyone in the real economy cares about crypto[1]. If, by some scary miracle of a trickster god, the economy starts caring for real, cryptocurrencies will get quickly integrated into the mainstream by regulatory means - and regulations are backed by proof of violence. And almost everyone will want that, too, because people will be tired of getting robbed or cheated out of their money. You can't correct an act of violence without another act of violence[2]. (It's not even that hard to rein in Bitcoin. All it would take is for the US govt to announce which chain is considered legitimate by them for the purpose of paying taxes, and that the rest is considered counterfeit money.) -- [0] - Criminal activity notwithstanding. [1] - No, noises made by large banks about running their own blockchains isn't caring - it's just exploring new potential areas of growth and profit. [2] - At least if we generalize "violence" enough, to encompass credible threats of violence. If me stealing your money at gunpoint is an act of violence, then so is the court ordering me to give it back under threat of forcing me into prison.

hnbad 5y ago

Except crypto isn't currency, it's an artificial resource with no inherent usefulness beyond exchange. States won't give up their currencies because that would put all of them in the position of, say, Liberia, rather than the position of the US, EU or China who can literally print money to pay. And even if all state currencies vanished over night, this would change nothing for individuals because the vast majority of wealth is claimed by a minority of individuals and the only thing guaranteeing their claim is the exact monopoly of violence of the state that also backs its currency. You don't have a private yacht because the state guarantees the value of your money with violence against foreign nation state actors. You have a private yacht because the state will ruthlessly punish anyone other than itself trying to take it away from you. The state may be holding a gun to your head to be able to take away what's yours at any time, but it also holds a gun to everyone else's head to prevent them from taking it first. This is why the extremely rich spend so much time, money and energy influencing politics. Not because they want to dismantle the state, but because they want to keep it from using the gun against them while still keeping it pointed at everyone else. Without a state threatening violence to protect your claims on "private property" you'd literally have to raise your own private army to defend it. This is why leftists call anarcho-capitalism "feudalism with extra steps".

jessaustin 5y ago
States won't... El Salvador is considered by many to be a state.
- hnbad 5y ago
  It's interesting that you didn't correct me on Liberia, which actually merely had its currency pegged to the US dollar temporarily. I must have mixed up Liberia with another country. El Salvador is a fun case because they didn't exactly switch to the US dollar because their economy was doing so great but because it was either that or massively devaluing their already dodgy currency because they are a very small country and their economy heavily relies on international trade. They introduced Bitcoin as "legal tender" on top of the US dollar against the will of the majority of their citizens but the law was part of a program to lure in foreign investments. This too followed earlier economic problems, so it's more of a cashgrab than a genuine interest in crypto currencies. El Salvador replaced its currency with the US dollar. It did not replace its currency with Bitcoin. It also didn't replace the US dollar with Bitcoin, it just added it as a form of legal tender. It also suffered almost immediate consequences when the price of Bitcoin crashed and they had to dump additional money into it to compensate for this. It's too early to say but at the moment this doesn't sound like a wise political move for El Salvador rather than a risky publicity stunt for the president.

qeternity 5y ago

> What's exciting is that it is the first digital, global money that isn't protected by the proof of violence of the state. I completely agree that the US govt and all super powers before it have made many mistakes, and shed much blood. But the world isn't a utopian bubble free of conflict. The US military doesn't bestow value to the dollar because it goes around nuking every country in sight...it bestows value because it this huge potential of force keeps more peace than we would otherwise have. It's the same rationale for why a 51% attack on bitcoin is so unlikely: those with the ability to attack, also have the most to lose. Mutually assured destruction was not a new concept that started and ended with the cold war. It's fundamentally game theoretic and is why cooperative strategies are so powerful. If you take into consideration all of the atrocities of the past 50 years, even the truly horrific scars on the US military industrial complex, this has been the most peaceful and prosperous period in all of humanity by a large margin. Could it be better? Of course, and we should strive for that. But the same underlying reasons that the dollar is considered safe are the same forces that allow bitcoin to be successful. The fact that the world has come together and cooperated on a massive information sharing network called the internet is an example of something that, ignoring the tech advancements, would have been unfathomable mere centuries ago.

troyvit 5y ago

Bitcoin uses a lot of energy. Power is (arguably, and not always)[0] gained or exercised through violence, if not of the state then of the large entities that generate that power, be it coal, natural gas, hydro or even solar. [0] https://hbr.org/2021/05/how-much-energy-does-bitcoin-actually-consume https://hbr.org/2021/05/how-much-energy-does-bitcoin-actuall...

namaria 5y ago

Bitcoin has no currency. I can't pay taxes with it, I can't buy groceries with it. It's an asset at best. A wallet has a claim on a number stored in distributed database. No more no less.