10 ms·

«What problem does Bitcoin solve» Easy: it's censorship-resistant. You send a transaction and no middleman, no financial organization, no one can prevent you f

• SideburnsOfDoom 5y ago
  > Easy: it's censorship-resistant. You send a transaction and no middleman, no financial organization, no one can prevent you from sending it. Devil's advocate here: How is a state not going to see that as a bug not a feature? Do you think that governments will let the loophole stand and grow? Won't there inevitably be a choice eventually: get regulation and oversight like any other mass payment method, or be banned outright, and driven to the margins of society?
• wldcordeiro 5y ago
  > bogged down by regulation... Except for this bit though. Eventually it too gets regulated and has been.
• voz_ 5y ago
  1) You're right, and perhaps its a position of privilege to say this, but this does not seem to be a real problem worth solving? I've transacted a lot of money, both ingress and egress, buying a modest home, a car or two, paying off student loans, etc. No one has ever tried to censor me. 2) Beyond censorship, one needs safety. It may not be censored, but its certainly traceable, so how useful is the lack of censorship without anonymity? 3) If we take it that it solves this (both 1 and 2), then moving on to the other part of the question, how does it solve it better than any other distributed infrastructure? You could build a censorship resistant payment system without the insanely excessive hoarding of base wealth (like the gold mining analogy in the payment article), and without the insane environmental impact. 4) Let's say it solves 1, and 2, but we can't do better and I am wrong in 3. Is this problem worth the massive environmental cost to solve?
  • errantmind 5y ago
    As for '4', you have an implicit assumption that I see a lot on HN. No, BTC doesn't have a massive environmental cost. Please re-examine that premise. https://www.lynalden.com/bitcoin-energy/ https://www.lynalden.com/bitcoin-energy/
    • kmonsen 5y ago
      Bitcoin is perhaps a rounding number today (my guess is that it is more than that due to Chinese miners not reporting energy usage correctly but could very easily be wrong), but what it solves is even less of a rounding number. Said in a different way to do all financial transactions on the blockchain would use a lot more energy then it currently does.
      • errantmind 5y ago
        BTC does not require every single transaction to be processed on-chain in the way that you describe. Please refer to the Lightning Network.
        • kmonsen 5y ago
          But then you are moving the goal posts, blockchain is not really needed for lighting.
      • throwaway248329 5y ago
        That's not how it works, energy usage does not scale with the number of transactions.
        • kmonsen 5y ago
          Uh, why not?
    • hectormalot 5y ago
      Sorry, but 0.1% of global energy consumption still adds up to a lot of coal power plants.
• riffraff 5y ago
  More generally, I would say it solves "how do I do transactions when I can't trust the other party nor a middleman". The reason this seems useless is that most of the time you can trust a third party, but sometimes (e.g. paying for illegal stuff) you can't.
  • caf 5y ago
    How does Bitcoin solve the "can't trust the other party" problem? If you send bitcoin to someone to buy some fine pharmaceuticals and they just don't send the product, what recourse do you have?
    • zelag 5y ago
      Markets on darknet solve this problem.
      • caf 5y ago
        You mean a trusted third party / middleman?
        • zelag 5y ago
          Nope. An account with good reviews.
    • chaxor 5y ago
      I believe this is why ethereum was so popular, as it introduced the idea of "Smart contracts". So the transaction is dependent on something occurring in the real world. Obviously there have been a ton of developments since then with newer crypto currencies, including increased privacy, anonymity, linking to applications, etc. For instance, I think Chainlink rewards people for hosting datasets (like ML datasets, or waybackmachine) on ipfs, and also inherits the smart contracts from ETH. Additionally, I think Monero has made developments in smart contracts as well, and the price seems to be more steady, since people actually seem to be utilizing it more for buying things in the real world, like computer services and such.
• Kbelicius 5y ago
  > Easy: it's censorship-resistant. You send a transaction and no middleman, no financial organization, no one can prevent you from sending it. You can transact with anyone, anywhere, 24/7/365, however much you want, $100 or $100 million. This is not completely true. There are middleman and in bitcoin world they are called miners. They are the ones that need to add your transaction to a block and who you need to pay so that they do that. Control the miners and you can censor all you want.
  • bradwood 5y ago
    Middlemen implies a few (or one) centrally controlable group (or unit). BTC miners are anything but this. Is a router a middleman on the internet? No. Same thing.
    • Kbelicius 5y ago
      > Middlemen implies a few (or one) centrally controlable group (or unit). No it does not. > Is a router a middleman on the internet? If that router is controlled by a third party, then yes, a router(entity owning that router) is in fact a middleman.
• ntr-- 5y ago
  Are you running a bitcoin node that successfully mines blocks? If you were adding a hypothetical transaction that would heavily injure a majority of miners (think shifting a huge number of the Satoshi owned coins to the US Gov) do you think they would still happily process it?
• questionto 5y ago
  na, people are just hopes that things will be good... do you really know who built the bitcoin? is there any person you can point ? no? then do you really think that people are smart, decisive enough to keep this kind of systems up in spite of their loss of monry or etc. do you really think that there ls no trust issue with the bitcoin? let say "some" guy "one" day finds a way to steal your wallet ... can you find a way to make it safe as it is with the current banking system? think about even if your credit card used by scammers you still have some kind of safety... banking systems are not there to be perfect but here to secure people's ( who are not thst smart ) money safe... lastly censorship rsistant is my ear! it is clear that you have never lived in an opressed country..
• thr0w72594 5y ago
  The authoritarian tech/finance cartel will gladly close your PayPal account without recourse to claim the balance, close your bank account, prevent you from getting access to payment processors, delist your products, kick you off of web hosting, ban your social media accounts, and otherwise shut you out of 99% of what people use the internet for, just for crossing one of them. I never hold more than leftovers-worth of Bitcoin, so I'm not tied up in its success financially, but it has been a great way to support people who have been oppressed governments and corporations, many of whom who have never even been accused of a crime.
  • markdestouches 5y ago
    >> The authoritarian tech/finance cartel will gladly close your PayPal account without recourse to claim the balance, close your bank account, prevent you from getting access to payment processors, delist your products, kick you off of web hosting, ban your social media accounts, and otherwise shut you out of 99% of what people use the internet for, Wouldn't this effectively make it impossible to exchange bitcoin for currency rendering it utterly useless?
• path411 5y ago
  That seems to be the consensus of what people say, but I think that all of those things are false or atleast assuming functional parts that aren't actually guaranteed. No anonymity, means sure you are free to transfer, but the gov is free to track you down, and if you live in an anti crypto gov, that means entering or exiting the crypto universe is very difficult. You say $100 or $100 million, but this is a large failure of Bitcoin. You are tying it's value to fiat. That compounds on my previous point, if all governments crack down on crypto, would it actually have any value? If tomorrow, all exchanges were shut down, the truth is, Bitcoin would be dead. Lastly, the largest flaw of Bitcoin is it's failures to scale. That means that in the golden crypto universe that every follower dreams of, every text, transaction, breath, thought, all exists on the blockchain, Bitcoin inevitably collapses. You have the problem of both the blockchain size has grown to such a size that the barrier to entry for nodes becomes too large, as well as the failure for Bitcoin to handle any rate of transactions/seconds to handle the real world.
  • rhn_mk1 5y ago
    > if all governments crack down on crypto, would it actually have any value? Which puts cryptocurrency at a minimal advantage over other currencies: it's easier to crack down on currencies whch have centralized control.
  • sweetbitter 5y ago
    Other currencies have addressed the issues of anonymity and environmental impact, and the block size can be scaled dynamically. If the block size increases too much, there is an argument for sharding/pruning- this is an open question, and probably not the one which will crypto-currencies.
  • 127 5y ago
    Current Bitcoin blockchain size is at something like 500 GB. Which is definitely not out of reach for most people in the first world.
    • samhw 5y ago
      And his comment was referring to: > in the golden crypto universe that every follower dreams of, every text, transaction, breath, thought, all exists on the blockchain Bitcoin is necessarily, explicitly inefficient, by virtue of being an immutable append-only log. A first-year CS student with a week of Data Structures and Algorithms classes could tell you that. And it's not even being widely used as a payment system yet - at that point the transaction volume would explode, and the computational and storage inefficiency would become even more salient issues than they are now.
• ipaddr 5y ago
  Doesn't the common method of obtaining Bitcoin force the same system on you. If you are buying from coinbase like most Americans you are forced to provide identity to buy, sell or receive over various levels. Same on the other exchanges. Exchanges do freeze accounts. How does a regular person who doesn't mine get around these same controls?
  • hndamien 5y ago
    Bisq
  • bradwood 5y ago
    P2P fiat on/off-ramps
• wahern 5y ago
  Actually, it's the opposite as far as censorship resistance goes. Because all transactions are public, any bitcoin can be traced and tainted. Taints can be enforced easily because the process of detecting tainted coins can be cheaply automated by all involved. Mixers are of little consequence, just like money laundering schemes aren't a magical loophole around laws regulating transactions and tracking asset ownership. Paper fiat is much better in this regard as bills are much more difficult to trace and taint. The infrastructure isn't in place to comprehensively enforce serial tracking. More importantly, there are usually laws that guarantee the fungibility of bills, which means it's usually very difficult as a legal matter to force a current, honest holder of a circulating bill to relinquish it. Such laws exist precisely because of the difficulty of cheaply tracking the provenance of bills. A large country like the U.S. could easily mandate verification by its citizens and businesses of all bitcoin transactions against a central registry. Then in a blink of an eye it could begin flagging bitcoins the way car VINs can be flagged. Sure, you can send it to people not subject to the mandate or otherwise willing to risk accepting it, but the value of that bitcoin is now diminished as compared to the rest of them because the market will be smaller. Transparency means they're not perfectly fungible, yet perfect fungibility is what you need for censorship resistance. To avoid the cost of receiving coins from illegal activity there'll be various escrow and insurance schemes which will make bitcoin transactions even less efficient than they currently are. The flip-side, however, is that for law abiding people without privacy concerns, bitcoin might prove an excellent asset store. Nobody could steal it from you, at least not without fooling the legal system and/or central authorities, which [ideally] would require alot of non-anonymous, conspicuous activity. Which is why NFTs are enticing. Relatedly, NFTs make no sense without a centralized, easily queryable database linking legal ownership of an asset to the NFT. But, ironically, it would be the central database, not the NFT itself, that truly establishes ownership. Similar to how land title registries, not occupation of a piece of real estate or chain of title, establish rightful ownership in jurisdictions with such registries.
  • mrb 5y ago
    «Taints can be enforced» You can't. You would need to control 100% of miners.
• estaseuropano 5y ago
  A motivated government will surrly be able to blacklist certain transactions, penalising any known entity that receives/uses BTC derived from those.
• InsomniacL 5y ago
  > censorship-resistant This entirely depends on your point of view. What you call a problem, I call a feature. I do not want the monetary system I'm apart of supporting Organised Crime, Terrorism, etc. Things like Sanctions, Unexplained Wealth Orders, Proceeds of Crime, suspicious transactions etc.. Are there to protect me. At best, I would say Bitcoin is resistant to unjust-censorship. However the only real instance I'm aware of that I would call unjust is Visa refusing to accept WikiLeaks donations.
  • Chris2048 5y ago
    > I do not want the monetary system I'm apart of supporting Organised Crime, Terrorism, etc. This is true of all significant monetary systems. It's also notable that btc is not anonymous, so leave as much as (or more) of a papertrail. > the only real instance I'm aware of that I would call unjust is Visa refusing to accept WikiLeaks donations What about the practise of Civil forfeiture?
    • samhw 5y ago
      > What about the practise of Civil forfeiture? That's not a feature of a particular monetary system, it's a US-specific legal doctrine governing any kind of property.
      • InsomniacL 5y ago
        > any kind of property. I'd imagine that includes BTC too
        • Chris2048 5y ago
          I don't think it does. Rights to search & seize physical goods isn't the same to search a digital device and force a transaction. At the very least, you can with-hold passwords i.e. refuse to participate, in a way you can't prevent police from searching your vehicle.
      • Chris2048 5y ago
• fergie 5y ago
  Yes but all too often the problem with capital is precisely that it is secretly owned and moved (see "Moneyland"). That cryptocurrencies make money more private and easier to move is not really a benefit at all.