5 ms·

Lira crisis fuels Bitcoin boom in Turkey

36 points by nemoniac 5y ago

puregram 5y ago
Are you trying to say x "cryptocurrency boom" or "altcoin boom"? Because Bitcoin (BTC) is almost useless for payments.
riptheworld 5y ago
Cryptocurrencies as a whole are an amazing innovation. It’s sad though to see people rushing to adopt things they don’t fully understand, and getting hurt as a result. Bitcoin and Ethereum are pretty terrible currencies. Proof-of-work is a foundational idea in cryptography, but it’s much better suited for preventing mass email spam than it is as a consensus mechanism. Not to mention how the cryptocurrency space is crowded with useless AltCoins. Unless you’re an expert in the space, its so hard to distinguish from true innovation and dummies just trying to get a piece of the pie. As a result, you have millions of people pushing things like Dogecoin and Shiba, and it ends up hurting real people. The way I see it is this: a useful cryptocurrency needs 3 things: (1) Security (2) Scalability (3) Decentralization Almost all mainstream crypto fails at (2) miserably, and as a result end up failing at (3). High transaction fees, volatility, low throughput, and energy-intensive participation costs are all barriers to achieving actual utility.
- javert 5y ago
  It is not clear that proof of stake can be very decentralized. Proof of work, however, can be. Bitcoin can scale using 3rd party payment providers . That's exactly how fiat currencies are made to scale. We use Visa, PayPal, Zelle, ACH, Swift, etc. We usually do not talk to a ledger at the Fed or ECB, even though they do have those (for huge banks or wire transfers).
  - riptheworld 5y ago
    I'm not sure what you mean when you say that Bitcoin can scale by using 3rd party payment providers? Any Bitcoin transaction will only ever be as fast as the underlying blockchain, which currently processes around seven transactions per second (last time I checked). Of course proof of stake can be decentralized! I think what you mean is that it's not clear whether a widely adopted PoS based blockchain will end up centralizing power in the hands of a few whales. This is a legitimate concern; however, this threat is no different than the threat of centralization of computing power in Bitcoin. In Bitcoin, this isn't even a threat, it’s a reality! I'll say it again: Bitcoin and Ethereum are not great currencies. There are altcoins that have far surpassed both of them in terms of achieving security, scalability, and decentralization simultaneously.
    - wanderingmind 5y ago
      Can you provide more details/references to your statement on altcoins that have better scalability and decentralization.
      - riptheworld 5y ago
        [dead]
        javert 5y ago
        > I don’t want to turn this thread into a crypto version of Wall Street Bets where people are arguing over their favorite coins it seems like that's exactly what you want. Given that you are spreading lots of misinformation and don't seem to be trying to understand the other side's point.
        tromp 5y ago
        > The Algorand cryptocurrency achieves thousands of transactions per second And is it possible to sync to the current Algorand state by downloading and verifying the complete transaction history, like I can with Bitcoin? And if so, how big is that download? Bitcoin limits the tx rate on purpose so that the Initial Block Download remains feasible on average hardware, and no trust is needed beyond the integrity of the client software.
        riptheworld 5y ago
        Bitcoin’s throughput is limited as a function of network security and network delay. It has nothing to do with making it easier for clients to sync with the current state. You can improve Bitcoin’s transaction rate in two ways: 1.) decrease mining difficulty, i.e., the amount of hashing required to produce a valid proof-of-work on average. This impacts the security of the network. 2.) increase the block size so you can fit more transactions into a single block. This negatively impacts network latency (and therefore scalability, as it increases the burden of propagating messages across the network). To your question on Algorand: yes, new consensus participants can quickly and easily sync with the current state of the blockchain through fast catch-up [1], without any meaningful security degradation [2]. [1] https://youtu.be/BOnond-J3Zo https://youtu.be/BOnond-J3Zo [2] https://eprint.iacr.org/2018/269.pdf https://eprint.iacr.org/2018/269.pdf
sjtindell 5y ago
I remember when I thought the people who ran governments were the adults in the room, the experts. Now I literally think the total opposite.
wanderingmind 5y ago
When inflation across the world becomes high like Turkey, crypto currencies will become unstoppable. When atomic swaps start to take off, there will be no way to stop these currencies with regulations.
- listenallyall 5y ago
  I don't think you are wrong, there is plenty of logic that would lead one to believe this. However, every major crypto is down 40% or so while the US is reporting its highest inflation prints since the 70s. By your logic, these currencies should be at all time highs, instead, they seem more correlated with the NASDAQ recently and actually negatively correlated with inflation.
  - anm89 5y ago
    Think about what happened to crypto and other inflation hedges in march 2020. They got ahnilated worse than equities in the initial risk off and then out performed ever since. I think that's where we are now. If there is a market sell off, crypto is along for the ride initially. the question will be what it looks like from there.
    - opportune 5y ago
      I don’t think this deserves to be downvoted. Crypto is an asset class. During uncertainty and sell offs almost all assets sell off in tandem due to either deleveraging or flight to safety (of cash), and crypto isn’t special here. Over long horizons, the argument that crypto is a hedge against inflation or weakened purchasing power of fiat currency makes sense. But during acute corrections that matters very little, especially since very few people are actually paying for real world goods using crypto.
    - listenallyall 5y ago
      Inflation wasn't a problem in March 2020 -- at least it wasn't a primary concern at that time. As you said, first crypto sold off (just like stocks) and then rallied aggressively for the next 20 months or so (just like stocks). Bitcoin's entire existence has been during a major extended bull rally in stocks -- it's never been tested during a market crash or bear market like 1999 or 2008.

36 points by nemoniac 5y ago

Are you trying to say x "cryptocurrency boom" or "altcoin boom"? Because Bitcoin (BTC) is almost useless for payments.

Cryptocurrencies as a whole are an amazing innovation. It’s sad though to see people rushing to adopt things they don’t fully understand, and getting hurt as a result. Bitcoin and Ethereum are pretty terrible currencies. Proof-of-work is a foundational idea in cryptography, but it’s much better suited for preventing mass email spam than it is as a consensus mechanism. Not to mention how the cryptocurrency space is crowded with useless AltCoins. Unless you’re an expert in the space, its so hard to distinguish from true innovation and dummies just trying to get a piece of the pie. As a result, you have millions of people pushing things like Dogecoin and Shiba, and it ends up hurting real people. The way I see it is this: a useful cryptocurrency needs 3 things: (1) Security (2) Scalability (3) Decentralization Almost all mainstream crypto fails at (2) miserably, and as a result end up failing at (3). High transaction fees, volatility, low throughput, and energy-intensive participation costs are all barriers to achieving actual utility.

javert 5y ago
It is not clear that proof of stake can be very decentralized. Proof of work, however, can be. Bitcoin can scale using 3rd party payment providers . That's exactly how fiat currencies are made to scale. We use Visa, PayPal, Zelle, ACH, Swift, etc. We usually do not talk to a ledger at the Fed or ECB, even though they do have those (for huge banks or wire transfers).
- riptheworld 5y ago
  I'm not sure what you mean when you say that Bitcoin can scale by using 3rd party payment providers? Any Bitcoin transaction will only ever be as fast as the underlying blockchain, which currently processes around seven transactions per second (last time I checked). Of course proof of stake can be decentralized! I think what you mean is that it's not clear whether a widely adopted PoS based blockchain will end up centralizing power in the hands of a few whales. This is a legitimate concern; however, this threat is no different than the threat of centralization of computing power in Bitcoin. In Bitcoin, this isn't even a threat, it’s a reality! I'll say it again: Bitcoin and Ethereum are not great currencies. There are altcoins that have far surpassed both of them in terms of achieving security, scalability, and decentralization simultaneously.
  - wanderingmind 5y ago
    Can you provide more details/references to your statement on altcoins that have better scalability and decentralization.
    - riptheworld 5y ago
      [dead]
      - javert 5y ago
        > I don’t want to turn this thread into a crypto version of Wall Street Bets where people are arguing over their favorite coins it seems like that's exactly what you want. Given that you are spreading lots of misinformation and don't seem to be trying to understand the other side's point.
      - tromp 5y ago
        > The Algorand cryptocurrency achieves thousands of transactions per second And is it possible to sync to the current Algorand state by downloading and verifying the complete transaction history, like I can with Bitcoin? And if so, how big is that download? Bitcoin limits the tx rate on purpose so that the Initial Block Download remains feasible on average hardware, and no trust is needed beyond the integrity of the client software.
        riptheworld 5y ago
        Bitcoin’s throughput is limited as a function of network security and network delay. It has nothing to do with making it easier for clients to sync with the current state. You can improve Bitcoin’s transaction rate in two ways: 1.) decrease mining difficulty, i.e., the amount of hashing required to produce a valid proof-of-work on average. This impacts the security of the network. 2.) increase the block size so you can fit more transactions into a single block. This negatively impacts network latency (and therefore scalability, as it increases the burden of propagating messages across the network). To your question on Algorand: yes, new consensus participants can quickly and easily sync with the current state of the blockchain through fast catch-up [1], without any meaningful security degradation [2]. [1] https://youtu.be/BOnond-J3Zo https://youtu.be/BOnond-J3Zo [2] https://eprint.iacr.org/2018/269.pdf https://eprint.iacr.org/2018/269.pdf

sjtindell 5y ago

I remember when I thought the people who ran governments were the adults in the room, the experts. Now I literally think the total opposite.

wanderingmind 5y ago

When inflation across the world becomes high like Turkey, crypto currencies will become unstoppable. When atomic swaps start to take off, there will be no way to stop these currencies with regulations.

listenallyall 5y ago
I don't think you are wrong, there is plenty of logic that would lead one to believe this. However, every major crypto is down 40% or so while the US is reporting its highest inflation prints since the 70s. By your logic, these currencies should be at all time highs, instead, they seem more correlated with the NASDAQ recently and actually negatively correlated with inflation.
- anm89 5y ago
  Think about what happened to crypto and other inflation hedges in march 2020. They got ahnilated worse than equities in the initial risk off and then out performed ever since. I think that's where we are now. If there is a market sell off, crypto is along for the ride initially. the question will be what it looks like from there.
  - opportune 5y ago
    I don’t think this deserves to be downvoted. Crypto is an asset class. During uncertainty and sell offs almost all assets sell off in tandem due to either deleveraging or flight to safety (of cash), and crypto isn’t special here. Over long horizons, the argument that crypto is a hedge against inflation or weakened purchasing power of fiat currency makes sense. But during acute corrections that matters very little, especially since very few people are actually paying for real world goods using crypto.
  - listenallyall 5y ago
    Inflation wasn't a problem in March 2020 -- at least it wasn't a primary concern at that time. As you said, first crypto sold off (just like stocks) and then rallied aggressively for the next 20 months or so (just like stocks). Bitcoin's entire existence has been during a major extended bull rally in stocks -- it's never been tested during a market crash or bear market like 1999 or 2008.