5 ms·

For context: * El Salvador has 2 legal tenders, most of their reserves is still in USD that is know to go down in value over long term. More likely their bitcoi

by muzika 5y ago

For context: * El Salvador has 2 legal tenders, most of their reserves is still in USD that is know to go down in value over long term. More likely their bitcoin holdings will be worth more than their USD holdings some day. * They own a bit over 1,000 bitcoins, while MSTR owns over 140,000 bitcoins. Apples to oranges, but still.

thehappypm 5y ago
More likely their Bitcoin goes to $0. I’m surprised nobody has ever considered that Bitcoin is vulnerable to attacks. It hasn’t happened yet, but imagine if someone finds a way to do fraudulent transactions. Then it’s all over.
- djenendik 5y ago
  Both comments can be correct.
- radu_floricica 5y ago
  Yup, nobody ever considered Bitcoin is vulnerable to attack. Thank you for the insight! Snark aside, all risk is relative. Your bank account is also vulnerable to attack, and also a lot more vulnerable to human error and a bunch of other risks. Various instruments are good for various goals - as it happens, BTC is a pretty good value store. Not what anybody expected in the beginning, but there you go.
  - zydex 5y ago
    I think a key point is that traditional finance/banking has far more buffer and dampening built into the system than crypto. Crypto seems incredibly rigid and brittle - so it works well until it doesn't. Crypto seems to work well for people that know what they're doing but it's no surprise that the majority of people don't. Far from a new insight but worth pointing out.
    - jbverschoor 5y ago
      Yes.. by regularly shutting down payment systems due to ” computer errors”. Banks have never had any data loss or hacks.. but online banking systems are offline regularly. Also, it’s kind of fun that certain banks have “data recovery” people who go out and try to gather 20+ year old info which was already present. Organizing a bank run is illegal.. but not with crypto
      - londons_explore 5y ago
        > Organizing a bank run is illegal Is it? I don't see why I shouldn't be able to withdraw my cash from a bank, nor be able to tell others that I'm doing so and why... So what part is illegal?
  - deleted 5y ago
    [deleted]
  - drekk 5y ago
    Well when I'm looking for a store of value to use in exchange for goods and services, it generally is helpful for me if my $100 is not $80 the next week, $110 the one after that, then $70, etc. What you mean to say is that BTC is a pretty good speculative asset, and I would agree up until the point that people want to actually turn their speculative asset into tangible wealth. Then they are going through fiat, or an exchange, and all the issues with the traditional finance system come through full force on top of crypto volatility. DeFi and all these attempts are reinventing the wheel but without the traditional protections put in place. If I forget my password and email with Chase I can still recover my assets. Not so with crypto, and if someone does get my wallet key there is nothing stopping them from draining it dry. My bank would probably freeze the account for suspicious activity. I haven't even brought up malicious theft of crypto, which happens all the time. Mt Gox wasn't that long ago and what was it, 10% of all circulating Bitcoin at the time that went missing? Most users aren't using hardware wallets and I imagine even less know how to really audit a smart contract. These are all barriers to widespread adoption.
- joemazerino 5y ago
  This won't happen. USD rotting away to inflation? Happening right now.
  - thehappypm 5y ago
    How certain are you that there will never be an exploit in the protocol?
    - emteycz 5y ago
      Hundreds of billions of dollars are staked on the security of Bitcoin protocol. Bitcoin is not some hyper-complex enterprise software suite with thousands of hidden micro-bugs just waiting to be noticed and exploited. It is lightweight, straight-forward and provable by mathematics while being the single most financially exposed and the most audited piece of code ever. Don't you think somebody would notice something by now? Anyways. Do you really think the network wouldn't do anything about it? Even quantum-proofing Bitcoin is a possibility, so why not fixing a bug? I bet that the humans running the machines that run the Bitcoin network would simply update their Bitcoin-core and go on from the point just before the transaction that stole everyone's Bitcoin. A significant nuisance, but hardly a catastrophe.
    - joemazerino 5y ago
      I never said that. I said Bitcoin won't go down to $0. Bugs have and will be found and squashed.
      - shukantpal 5y ago
        Yeah the bugs will be squashed when all the valuable btc is no longer in your wallet
        emteycz 5y ago
        Nah, people would simply reject these transactions and go on from right before it happened.
- Kranar 5y ago
  >I’m surprised nobody has ever considered that Bitcoin is vulnerable to attacks. It's hard to know sometimes if one is being sarcastic on HN, but at any rate, Bitcoin is quite possibly the most scrutinized piece of technology ever developed and there is an enormous amount of research, both academic, corporate, and even just random independent individuals looking for any kind of fault with it whatsoever. Does that mean Bitcoin is infallible? Absolutely not, but to claim that nobody has considered that Bitcoin is vulnerable to attacks is just one of the most ridiculous claims I've read on HN, once again assuming you're not being sarcastic.
  - sudosysgen 5y ago
    Bitcoin is a protocol. There could feasibly be a vulnerability in mining pool software that could enable fraud, for example.
    - londons_explore 5y ago
      Fraud in a mining pool would only impact miners, and anyone who doesn't like it can use a fixed version of the mining pool software. Nobody would see major losses, and I don't imagine it would cause a lack of confidence in bitcoin.
      - rspeele 5y ago
        What about a scenario where a hack of widely used mining software enables an attacker to do a 51% attack? Miners would unknowingly aid the attacker by using the compromised software, and the attacker could execute a double spend. It would be caught after the fact, and the software patched, but money would be lost and confidence in Bitcoin's resistance to double spends would be shaken.
      - sudosysgen 5y ago
        Because this would enable a 51% attack. If you could attack pool software for 51% of hashrate, you would be able to validate a fraudulent transaction and make millions of dollars out of it.
- baobabKoodaa 5y ago
  "If" someone finds a way to do fraudulent transactions? That already happened about 10 years ago when someone exploited an overflow bug to create billions of Bitcoin for the hacker within a single transaction. The bug was fixed and Bitcoin hard forked over it. Everybody moved onto the new chain.
- blueprint 5y ago
  that is virtually the only thing bitcoin was invented to solve.
avrionov 5y ago
According to this article [1], they have about $3B in dollars and gold. Bitcoin needs increase 100x or they need to buy why more. [1] https://tradingeconomics.com/el-salvador/total-reserves-includes-gold-us-dollar-wb-data.html https://tradingeconomics.com/el-salvador/total-reserves-incl...
grey-area 5y ago
MSTR, like his last fraud in the dot com bubble, is busy imploding and will probably be investigated for fraud again at some point. Those bitcoins were bought with borrowed money from insane bond issues at much higher share prices. https://doomberg.substack.com/p/a-drunken-saylor https://doomberg.substack.com/p/a-drunken-saylor
fomine3 5y ago
Non hyped inflation currency vs super hyped deflation crypto.

by muzika 5y ago

thehappypm 5y ago

More likely their Bitcoin goes to $0. I’m surprised nobody has ever considered that Bitcoin is vulnerable to attacks. It hasn’t happened yet, but imagine if someone finds a way to do fraudulent transactions. Then it’s all over.

djenendik 5y ago
Both comments can be correct.
radu_floricica 5y ago
Yup, nobody ever considered Bitcoin is vulnerable to attack. Thank you for the insight! Snark aside, all risk is relative. Your bank account is also vulnerable to attack, and also a lot more vulnerable to human error and a bunch of other risks. Various instruments are good for various goals - as it happens, BTC is a pretty good value store. Not what anybody expected in the beginning, but there you go.
- zydex 5y ago
  I think a key point is that traditional finance/banking has far more buffer and dampening built into the system than crypto. Crypto seems incredibly rigid and brittle - so it works well until it doesn't. Crypto seems to work well for people that know what they're doing but it's no surprise that the majority of people don't. Far from a new insight but worth pointing out.
  - jbverschoor 5y ago
    Yes.. by regularly shutting down payment systems due to ” computer errors”. Banks have never had any data loss or hacks.. but online banking systems are offline regularly. Also, it’s kind of fun that certain banks have “data recovery” people who go out and try to gather 20+ year old info which was already present. Organizing a bank run is illegal.. but not with crypto
    - londons_explore 5y ago
      > Organizing a bank run is illegal Is it? I don't see why I shouldn't be able to withdraw my cash from a bank, nor be able to tell others that I'm doing so and why... So what part is illegal?
- deleted 5y ago
  [deleted]
- drekk 5y ago
  Well when I'm looking for a store of value to use in exchange for goods and services, it generally is helpful for me if my $100 is not $80 the next week, $110 the one after that, then $70, etc. What you mean to say is that BTC is a pretty good speculative asset, and I would agree up until the point that people want to actually turn their speculative asset into tangible wealth. Then they are going through fiat, or an exchange, and all the issues with the traditional finance system come through full force on top of crypto volatility. DeFi and all these attempts are reinventing the wheel but without the traditional protections put in place. If I forget my password and email with Chase I can still recover my assets. Not so with crypto, and if someone does get my wallet key there is nothing stopping them from draining it dry. My bank would probably freeze the account for suspicious activity. I haven't even brought up malicious theft of crypto, which happens all the time. Mt Gox wasn't that long ago and what was it, 10% of all circulating Bitcoin at the time that went missing? Most users aren't using hardware wallets and I imagine even less know how to really audit a smart contract. These are all barriers to widespread adoption.
joemazerino 5y ago
This won't happen. USD rotting away to inflation? Happening right now.
- thehappypm 5y ago
  How certain are you that there will never be an exploit in the protocol?
  - emteycz 5y ago
    Hundreds of billions of dollars are staked on the security of Bitcoin protocol. Bitcoin is not some hyper-complex enterprise software suite with thousands of hidden micro-bugs just waiting to be noticed and exploited. It is lightweight, straight-forward and provable by mathematics while being the single most financially exposed and the most audited piece of code ever. Don't you think somebody would notice something by now? Anyways. Do you really think the network wouldn't do anything about it? Even quantum-proofing Bitcoin is a possibility, so why not fixing a bug? I bet that the humans running the machines that run the Bitcoin network would simply update their Bitcoin-core and go on from the point just before the transaction that stole everyone's Bitcoin. A significant nuisance, but hardly a catastrophe.
  - joemazerino 5y ago
    I never said that. I said Bitcoin won't go down to $0. Bugs have and will be found and squashed.
    - shukantpal 5y ago
      Yeah the bugs will be squashed when all the valuable btc is no longer in your wallet
      - emteycz 5y ago
        Nah, people would simply reject these transactions and go on from right before it happened.
Kranar 5y ago
>I’m surprised nobody has ever considered that Bitcoin is vulnerable to attacks. It's hard to know sometimes if one is being sarcastic on HN, but at any rate, Bitcoin is quite possibly the most scrutinized piece of technology ever developed and there is an enormous amount of research, both academic, corporate, and even just random independent individuals looking for any kind of fault with it whatsoever. Does that mean Bitcoin is infallible? Absolutely not, but to claim that nobody has considered that Bitcoin is vulnerable to attacks is just one of the most ridiculous claims I've read on HN, once again assuming you're not being sarcastic.
- sudosysgen 5y ago
  Bitcoin is a protocol. There could feasibly be a vulnerability in mining pool software that could enable fraud, for example.
  - londons_explore 5y ago
    Fraud in a mining pool would only impact miners, and anyone who doesn't like it can use a fixed version of the mining pool software. Nobody would see major losses, and I don't imagine it would cause a lack of confidence in bitcoin.
    - rspeele 5y ago
      What about a scenario where a hack of widely used mining software enables an attacker to do a 51% attack? Miners would unknowingly aid the attacker by using the compromised software, and the attacker could execute a double spend. It would be caught after the fact, and the software patched, but money would be lost and confidence in Bitcoin's resistance to double spends would be shaken.
    - sudosysgen 5y ago
      Because this would enable a 51% attack. If you could attack pool software for 51% of hashrate, you would be able to validate a fraudulent transaction and make millions of dollars out of it.
baobabKoodaa 5y ago
"If" someone finds a way to do fraudulent transactions? That already happened about 10 years ago when someone exploited an overflow bug to create billions of Bitcoin for the hacker within a single transaction. The bug was fixed and Bitcoin hard forked over it. Everybody moved onto the new chain.
blueprint 5y ago
that is virtually the only thing bitcoin was invented to solve.

avrionov 5y ago

According to this article [1], they have about $3B in dollars and gold. Bitcoin needs increase 100x or they need to buy why more. [1] https://tradingeconomics.com/el-salvador/total-reserves-includes-gold-us-dollar-wb-data.html https://tradingeconomics.com/el-salvador/total-reserves-incl...

grey-area 5y ago

MSTR, like his last fraud in the dot com bubble, is busy imploding and will probably be investigated for fraud again at some point. Those bitcoins were bought with borrowed money from insane bond issues at much higher share prices. https://doomberg.substack.com/p/a-drunken-saylor https://doomberg.substack.com/p/a-drunken-saylor

fomine3 5y ago

Non hyped inflation currency vs super hyped deflation crypto.