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I was just talking to someone recently about how I’m long short on Bitcoin. This sort of event makes me really feel validated on this opinion, and reminds me on

I was just talking to someone recently about how I’m long short on Bitcoin. This sort of event makes me really feel validated on this opinion, and reminds me once again to ask publicly what the longest term options are for taking a short position on Bitcoin are. I’d like to be able to take a 30 year short position but I suspect no one offers such a long short position.

satellite2 5y ago
In any case bitcoin will not survive the breaking of sha256 and this will happen in less than 10 years.
- 0xdeadb00f 5y ago
  Can't wait!
- threshold 5y ago
  ^this
- nly 5y ago
  The security of Bitcoin doesn't depend on SHA256 the way you think it does.
- robbedpeter 5y ago
  Sha256 will be replaced, but even if it's cracked before a replacement, there are alternatives ready to be deployed with a fork. It'd be ugly but not lethal. Changing the hashing functions, encryption, and network verification are all built into bitcoin. It's designed to be resilient, and to use consensus when adapting over time. It'd be really stupid for people to go "oh no, someone cracked sha256 and mined a million blocks, I guess we're done with bitcoin now. Buh-bye money!" They'll fix it in the case of a noticeable exploit. If someone were clever, they'd mine blocks surreptitiously, sufficiently spaced out over time and different networks so that it looks like normal mining. They could get a few blocks per day for maybe a couple years until the upgrades. The impact to the system would be minimal.
  - satellite2 5y ago
    I doubt it. The Bitcoin ecosystem is weakly organised and governed, which is an advantage in some regard but has also been shown to lead to the incapacity to make decisions. On top of that, most of the ecosystem is built on specialized hardware that is designed to compute sha256 specifically and that cannot be swapped.
- mkj 5y ago
  Got details on how sha256 is broken?
  - satellite2 5y ago
    It's not. Currently no weakness has been found on sha-2 (publicly at least). My 10 years prediction is based on a heuristic, the constatation that a generation of cryptographic functions tend to last 20-30 years.
    - throwaway248329 5y ago
      Shouldn't the use of double hashing also delay it? Bitcoin blocks are hashed as SHA256(SHA256(x)).
- chki 5y ago
  I wonder: if somebody would silently break sha256 and was able to mine an almost arbitrary amount of Bitcoin would it be unethical to do so? (Or illegal, which would probably depend on the jurisdiction) I feel like it would be slightly unethical but on the other hand you're not really defrauding anybody. You did actually produce those blocks, not by improving your calculator but by using some other method.
  - zikduruqe 5y ago
    I mean every single private key in existence is already on the internet. Have fun raking in those free bitcoins. https://keys.lol/bitcoin https://keys.lol/bitcoin
- lowkey 5y ago
  If and when sha256 is broken, the internet breaks, period. It will be a Y2K-like event across the world. Every single banking website would be vulnerable. The Bitcoin core devs have been thinking about the failure modes of hash algorithms since Satoshi. If you are betting against Bitcoin primarily because you believe it will fail when sha256 inevitably falls, you are missing the bigger picture and underestimating the resilience of the Bitcoin developers and broader community.
beezle 5y ago
Two points: First, the way you phrase it is confusing and generally not how most would refer to that type of position. Better would be 'how I have been short Bitcoin for a long time'. Likewise 'I suspect no one offers very long dated put options on bitcoin' Second, even if there were exchange traded/cleared bitcoin options with very long expirations (say 5 years), you would still have to consider the possibility that the exchange removes the product at a future date, either for lack of volume or other issues. While that might still work in your favor, it would not necessarily imply a bitcoin value approaching zero. Of note, CME only has bitcoin futures out one year and futures options out three months (with very little volume). The bitcoin ETF BITO has options out to Jan 24 with considerably more volume/open interest. ETFs are not 24/7/365 vehicles but do have the advantage as likely to implode quicker than anything else (see USO)
- techdragon 5y ago
  Your right it’s a confusing phrase, I was trying to remember the specifics at the time but couldn’t remember the terminology since it’s not something I deal with on a regular basis, thanks for clarifying with the correct terms, I did indeed mean a put option with a very long date in the future. As for removal, as long as I didn’t have to pay if they de-list the option I’d still put it on the books. I’m quite convinced of my position. As for selecting a more short term timeline, I don’t see my short position happening in the next 3 to 5 years based on block mining rewards so I’ll just have to continue waiting and watching for the day it becomes viable to put my own personal “big short” into action on Bitcoin.

satellite2 5y ago

In any case bitcoin will not survive the breaking of sha256 and this will happen in less than 10 years.

0xdeadb00f 5y ago
Can't wait!
threshold 5y ago
^this
nly 5y ago
The security of Bitcoin doesn't depend on SHA256 the way you think it does.
robbedpeter 5y ago
Sha256 will be replaced, but even if it's cracked before a replacement, there are alternatives ready to be deployed with a fork. It'd be ugly but not lethal. Changing the hashing functions, encryption, and network verification are all built into bitcoin. It's designed to be resilient, and to use consensus when adapting over time. It'd be really stupid for people to go "oh no, someone cracked sha256 and mined a million blocks, I guess we're done with bitcoin now. Buh-bye money!" They'll fix it in the case of a noticeable exploit. If someone were clever, they'd mine blocks surreptitiously, sufficiently spaced out over time and different networks so that it looks like normal mining. They could get a few blocks per day for maybe a couple years until the upgrades. The impact to the system would be minimal.
- satellite2 5y ago
  I doubt it. The Bitcoin ecosystem is weakly organised and governed, which is an advantage in some regard but has also been shown to lead to the incapacity to make decisions. On top of that, most of the ecosystem is built on specialized hardware that is designed to compute sha256 specifically and that cannot be swapped.
mkj 5y ago
Got details on how sha256 is broken?
- satellite2 5y ago
  It's not. Currently no weakness has been found on sha-2 (publicly at least). My 10 years prediction is based on a heuristic, the constatation that a generation of cryptographic functions tend to last 20-30 years.
  - throwaway248329 5y ago
    Shouldn't the use of double hashing also delay it? Bitcoin blocks are hashed as SHA256(SHA256(x)).
chki 5y ago
I wonder: if somebody would silently break sha256 and was able to mine an almost arbitrary amount of Bitcoin would it be unethical to do so? (Or illegal, which would probably depend on the jurisdiction) I feel like it would be slightly unethical but on the other hand you're not really defrauding anybody. You did actually produce those blocks, not by improving your calculator but by using some other method.
- zikduruqe 5y ago
  I mean every single private key in existence is already on the internet. Have fun raking in those free bitcoins. https://keys.lol/bitcoin https://keys.lol/bitcoin
lowkey 5y ago
If and when sha256 is broken, the internet breaks, period. It will be a Y2K-like event across the world. Every single banking website would be vulnerable. The Bitcoin core devs have been thinking about the failure modes of hash algorithms since Satoshi. If you are betting against Bitcoin primarily because you believe it will fail when sha256 inevitably falls, you are missing the bigger picture and underestimating the resilience of the Bitcoin developers and broader community.

beezle 5y ago

Two points: First, the way you phrase it is confusing and generally not how most would refer to that type of position. Better would be 'how I have been short Bitcoin for a long time'. Likewise 'I suspect no one offers very long dated put options on bitcoin' Second, even if there were exchange traded/cleared bitcoin options with very long expirations (say 5 years), you would still have to consider the possibility that the exchange removes the product at a future date, either for lack of volume or other issues. While that might still work in your favor, it would not necessarily imply a bitcoin value approaching zero. Of note, CME only has bitcoin futures out one year and futures options out three months (with very little volume). The bitcoin ETF BITO has options out to Jan 24 with considerably more volume/open interest. ETFs are not 24/7/365 vehicles but do have the advantage as likely to implode quicker than anything else (see USO)

techdragon 5y ago
Your right it’s a confusing phrase, I was trying to remember the specifics at the time but couldn’t remember the terminology since it’s not something I deal with on a regular basis, thanks for clarifying with the correct terms, I did indeed mean a put option with a very long date in the future. As for removal, as long as I didn’t have to pay if they de-list the option I’d still put it on the books. I’m quite convinced of my position. As for selecting a more short term timeline, I don’t see my short position happening in the next 3 to 5 years based on block mining rewards so I’ll just have to continue waiting and watching for the day it becomes viable to put my own personal “big short” into action on Bitcoin.