4 ms·

This is the terrifying thing about a bug in one of these systems or some other kind of attack. The whole network can suddenly drop to zero in the blink of an ey

This is the terrifying thing about a bug in one of these systems or some other kind of attack. The whole network can suddenly drop to zero in the blink of an eye.

mikotodomo 5y ago
OMG it should be illegal.
lotsofpulp 5y ago
Hence the value of a stabler currency such as USD or GBP versus more volatile currencies. It is an implicit judgment on how much trust there is in the system that uses them.
kingo55 5y ago
As with any software, bugs can be fixed or forked out. The risk of it going to zero is smaller than most people think. Remember the inflation bugs Bitcoin had in it's early days? [1] 1: https://medium.datadriveninvestor.com/itcoin-unhackable-it-happened-twice-not-blowing-smoke-9e16bcddd5ab https://medium.datadriveninvestor.com/itcoin-unhackable-it-h...
ByteJockey 5y ago
Sure, but basically every currency has some theoretical problem. Usually it's just about the currency becoming worthless (usually only a problem in government controlled currencies that have loans in foreign currencies), or people just not accepting it anymore. There's no inherent value in any currency, it's just a useful fiction because it's really hard to go get five goats to trade somebody for a laptop.
- Retric 5y ago
  Currencies are propped up by taxes. The IRS wants a significant percentage of the US GDP paid in USD, as long as the economy exists and the government doesn’t print truly vast amounts of money from thin air the USD can only move within a fairly narrow range.
  - ByteJockey 5y ago
    That would be true if only the US was using the dollar. Given the number of countries using the dollar as their reserve currency, value could collapse quite a ways without the US doing anything. It's not likely, but neither is a 50 + 1 attack on bitcoin given the amount of computing power currently tied up there.
    - Retric 5y ago
      That’s less significant than you might think as US GDP is almost 1/4 of global GDP and foreign countries don’t keep that many USD on hand. Aka even in global terms US GDP is vast. Also, Bitcoin has significantly more vulnerabilities than just a 51% attack or a crash as nodes need to be connected to the internet and therefore can at least in theory be hacked. What exactly happens after that point is anyones guess, but it could easily be worse than a traditional 51% attack.
      - ByteJockey 5y ago
        > That’s less significant than you might think as US GDP is almost 1/4 of global GDP and foreign countries don’t keep that many USD on hand. Aka even in global terms US GDP is vast. Sure, but the value of the dollar (like everything else) is in how easy it is to get (supply). The US GDP is not a measure of the supply of dollars on the market, it is a measure of how often those dollars are exchanged. > Bitcoin has significantly more vulnerabilities than just a 51% attack or a crash as nodes need to be connected to the internet and therefore can at least in theory be hacked. That's fair, if we're including implementation vulnerabilities, it does expand the potential problems quite a bit. The post I was responding to was specifically about a 50 + 1 attack. Though if we include these, we should probably also expand physical currencies' problems to include counterfeiting in that case.
        Retric 5y ago
        > Sure, but the value of the dollar (like everything else) is in how easy it is to get (supply). The US GDP is not a measure of the supply of dollars on the market, it is a measure of how often those dollars are exchanged. The US GDP directly translates into the amount of taxes paid. Suppose a 50% drop in the value of USD happens. If nothing else happens taxes increase by 100%, and people need to acquire more USD which drives the value of the currency up. You might wonder about economic hardship, but historically that causes deflation. +/- 2% per year without printing money is easy, but there is a reason you don’t see huge swings without the government printing money. > counterfeiting An issue for any physical currency but electronic currency actually operates independently. Trying to counterfeit large quantities of cash is therefore surprisingly difficult even for nation stale level actors. A great fake bill can get passed around, 10 billion in fake bills which is still a trivial amount would trip up various monitoring systems.

This is the terrifying thing about a bug in one of these systems or some other kind of attack. The whole network can suddenly drop to zero in the blink of an eye.

mikotodomo 5y ago

OMG it should be illegal.

lotsofpulp 5y ago

Hence the value of a stabler currency such as USD or GBP versus more volatile currencies. It is an implicit judgment on how much trust there is in the system that uses them.

kingo55 5y ago

As with any software, bugs can be fixed or forked out. The risk of it going to zero is smaller than most people think. Remember the inflation bugs Bitcoin had in it's early days? [1] 1: https://medium.datadriveninvestor.com/itcoin-unhackable-it-happened-twice-not-blowing-smoke-9e16bcddd5ab https://medium.datadriveninvestor.com/itcoin-unhackable-it-h...

ByteJockey 5y ago

Sure, but basically every currency has some theoretical problem. Usually it's just about the currency becoming worthless (usually only a problem in government controlled currencies that have loans in foreign currencies), or people just not accepting it anymore. There's no inherent value in any currency, it's just a useful fiction because it's really hard to go get five goats to trade somebody for a laptop.

Retric 5y ago
Currencies are propped up by taxes. The IRS wants a significant percentage of the US GDP paid in USD, as long as the economy exists and the government doesn’t print truly vast amounts of money from thin air the USD can only move within a fairly narrow range.
- ByteJockey 5y ago
  That would be true if only the US was using the dollar. Given the number of countries using the dollar as their reserve currency, value could collapse quite a ways without the US doing anything. It's not likely, but neither is a 50 + 1 attack on bitcoin given the amount of computing power currently tied up there.
  - Retric 5y ago
    That’s less significant than you might think as US GDP is almost 1/4 of global GDP and foreign countries don’t keep that many USD on hand. Aka even in global terms US GDP is vast. Also, Bitcoin has significantly more vulnerabilities than just a 51% attack or a crash as nodes need to be connected to the internet and therefore can at least in theory be hacked. What exactly happens after that point is anyones guess, but it could easily be worse than a traditional 51% attack.
    - ByteJockey 5y ago
      > That’s less significant than you might think as US GDP is almost 1/4 of global GDP and foreign countries don’t keep that many USD on hand. Aka even in global terms US GDP is vast. Sure, but the value of the dollar (like everything else) is in how easy it is to get (supply). The US GDP is not a measure of the supply of dollars on the market, it is a measure of how often those dollars are exchanged. > Bitcoin has significantly more vulnerabilities than just a 51% attack or a crash as nodes need to be connected to the internet and therefore can at least in theory be hacked. That's fair, if we're including implementation vulnerabilities, it does expand the potential problems quite a bit. The post I was responding to was specifically about a 50 + 1 attack. Though if we include these, we should probably also expand physical currencies' problems to include counterfeiting in that case.
      - Retric 5y ago
        > Sure, but the value of the dollar (like everything else) is in how easy it is to get (supply). The US GDP is not a measure of the supply of dollars on the market, it is a measure of how often those dollars are exchanged. The US GDP directly translates into the amount of taxes paid. Suppose a 50% drop in the value of USD happens. If nothing else happens taxes increase by 100%, and people need to acquire more USD which drives the value of the currency up. You might wonder about economic hardship, but historically that causes deflation. +/- 2% per year without printing money is easy, but there is a reason you don’t see huge swings without the government printing money. > counterfeiting An issue for any physical currency but electronic currency actually operates independently. Trying to counterfeit large quantities of cash is therefore surprisingly difficult even for nation stale level actors. A great fake bill can get passed around, 10 billion in fake bills which is still a trivial amount would trip up various monitoring systems.