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Even as a cryptocurrency developer myself, I concur with most of the criticism. I detest all the cash grabbing, speculation, hype, and scams. Where I diverge fr

by tromp 5y ago

Even as a cryptocurrency developer myself, I concur with most of the criticism. I detest all the cash grabbing, speculation, hype, and scams. Where I diverge from most criticism is in PoW. In its early years, when Bitcoin was used as currency rather than for speculation, mining only consumed moderate amounts of energy, in line with the lower prices of a few dozen dollar per bitcoin at most. My hope is for Tether to crash, leading to a downward price spiral for Bitcoin, an end to rampant speculation, and a huge scaling down of mining. There should be no expectation of financial gain in cryptocurrency. It should just serve its original purpose of making convenient limited value purchases online. I don't support PoS as it leads to huge wealth concentration with the founders owning 100% of all initial coins.

vl 5y ago
With settlement time of 60 minutes Bitcoin was never designed as true currency, but more as a holdable asset. While some of the critiques are valid, as system matures, there will be less and less of it. Crypto is here to stay.
- user-the-name 5y ago
  The first line of the Bitcoin white paper: > A purely peer-to-peer version of electronic cash would allow online payments to be sent directly from one party to another without going through a financial institution. Now, if you want to say that it was badly designed for its purpose, that is a different matter.
  - aaaaaaaaata 5y ago
    It will allow it — just not fast, and if you want that, it still allows it, via Layer 2 solutions, many of which guarantee the same security as their Layer 1.
    - user-the-name 5y ago
      There is no known functional and scalable layer 2 solution. Lightning, as designed, can not scale.
  - vl 5y ago
    "would allow online payments to be sent directly from one party to another without going through a financial institution" And it successfully achieved this specific goal, however it never claimed it is a good solution for micro/small payments, which is a requirement for "normal currency". Payments of small amounts require small fees and quick settlement time, neither of which Bitcoin has by design.
    - deanCommie 5y ago
      Well this is where, as any good developer, you have to look at the requirement and ask "why?" > ... without going through a financial institution. Why? Why don't we want to go through a financial institution? Well, honestly, the only REAL reasons are fees on large transactions, and the desire/preference to be able to conduct activities that are illegal by regulated financial institutions. And that, if we all remember, was the only usecase for bitcoin before speculation - buying drugs and even more illegal things on TOR marketplaces. Well, that and money laundering.
      - can16358p 5y ago
        I live in a corrupted country with a corrupted government and don't trust my government a single bit. I'd happily use and adopt crypto. I don't do anything illegal, I just don't want corrupted and evil people having control over my assets.
        deanCommie 5y ago
        > I just don't want corrupted and evil people having control over my assets. Have I got some news for you about the 51% of people who control all the most popular blockchains :(
    - user-the-name 5y ago
      Here are the words of Satoshi himself: > Once it gets bootstrapped, there are so many applications if you could effortlessly pay a few cents to a website as easily as dropping coins in a vending machine. This claim that Bitcoin was never meant to be a payment system for small payments is 100% historical revisionism.
yulaow 5y ago
PoW already brought us to huge wealth concentration so it is not the solution either. This is one of the hard-not-so-talked problems of cryptos at the moment, and I can't see how to solve it.
- tromp 5y ago
  PoW tries to minimizes wealth concentration by imposing a competitive cost on obtaining coins. Of course it cannot reduce the wealth concentration already present in fiat. It can at best not make it much worse (as PoS does). PoW still suffers from wealth concentration due to varying block subsidies over time, which is why I'm a strong supporter of uncapped emissions like 1 coin per second forever, which gives no advantage to early miners.
  - lottin 5y ago
    How does PoW minimise wealth concentration? Minimising wealth concentration would imply distributing the coins evenly among the network participants. That's not what PoW does.
  - garren 5y ago
    Doesn’t “minimiz[ing] wealth concentration by imposing a competitive cost on obtaining coins”, basically translate to “only the wealthy can afford the compute resources needed to mine”? So, not really minimizing wealth concentration as practically gauranteeing that only those with a tremendous amount of resources to waste on PoW will see any return? In fact, the first link in the post [0] touches on this point very well in the first 30 min or so. [0] https://www.youtube.com/watch?v=YQ_xWvX1n9g https://www.youtube.com/watch?v=YQ_xWvX1n9g
- tenuousemphasis 5y ago
  The problem is capitalism, but at least with Bitcoin there is no central authority to unilaterally alter monetary policy to benefit one specific group (those closest to supply of new money i.e. Gresham's Law).
  - 5y ago
user-the-name 5y ago
There is no safe way to wind down mining. As mining becomes unprofitable, mining equipment will be shut down. But it will still exist, and it will be in the hands of people desperate for cash. This means that the price of 51% attack will drop massively, and that completely undermines the safety that PoW provides. A large drop in price followed by a large drop in mining completely destroys the security of bitcoin.
- tromp 5y ago
  The price of a 51% relative to the total marketcap won't change drastically (only moderately due to wider availability of hardware), and that's what security is based on, not the absolute cost of a 51% attack.
  - lottin 5y ago
    No... security depends on the cost mounting an attack, and that's the absolute cost.
    - tromp 5y ago
      No... a chain that costs $1M to attack with a mktcap of $100K is more secure than a chain that costs $10M to attack with a mktcap of $100B, as the latter has huge financial incentives for doublespending (after depositing say $100M at an exchange), while the former has none. It's like how much you spend on a bike lock. A $100 lock on a $20 bike is probably quote secure, while a $200 lock on a $5000 bike is probably quite insecure.
      - lottin 5y ago
        No... an attacker that is able to successfully execute a 51% attack can crash the token price and make enormous profits in the derivatives market, so the market cap is irrelevant. Moreover, and attacker may have motivations other than financial gains, which again makes market cap irrelevant. If your security model only protects against financially motivated attackers it means it's basically rubbish.

by tromp 5y ago

vl 5y ago

With settlement time of 60 minutes Bitcoin was never designed as true currency, but more as a holdable asset. While some of the critiques are valid, as system matures, there will be less and less of it. Crypto is here to stay.

user-the-name 5y ago
The first line of the Bitcoin white paper: > A purely peer-to-peer version of electronic cash would allow online payments to be sent directly from one party to another without going through a financial institution. Now, if you want to say that it was badly designed for its purpose, that is a different matter.
- aaaaaaaaata 5y ago
  It will allow it — just not fast, and if you want that, it still allows it, via Layer 2 solutions, many of which guarantee the same security as their Layer 1.
  - user-the-name 5y ago
    There is no known functional and scalable layer 2 solution. Lightning, as designed, can not scale.
- vl 5y ago
  "would allow online payments to be sent directly from one party to another without going through a financial institution" And it successfully achieved this specific goal, however it never claimed it is a good solution for micro/small payments, which is a requirement for "normal currency". Payments of small amounts require small fees and quick settlement time, neither of which Bitcoin has by design.
  - deanCommie 5y ago
    Well this is where, as any good developer, you have to look at the requirement and ask "why?" > ... without going through a financial institution. Why? Why don't we want to go through a financial institution? Well, honestly, the only REAL reasons are fees on large transactions, and the desire/preference to be able to conduct activities that are illegal by regulated financial institutions. And that, if we all remember, was the only usecase for bitcoin before speculation - buying drugs and even more illegal things on TOR marketplaces. Well, that and money laundering.
    - can16358p 5y ago
      I live in a corrupted country with a corrupted government and don't trust my government a single bit. I'd happily use and adopt crypto. I don't do anything illegal, I just don't want corrupted and evil people having control over my assets.
      - deanCommie 5y ago
        > I just don't want corrupted and evil people having control over my assets. Have I got some news for you about the 51% of people who control all the most popular blockchains :(
  - user-the-name 5y ago
    Here are the words of Satoshi himself: > Once it gets bootstrapped, there are so many applications if you could effortlessly pay a few cents to a website as easily as dropping coins in a vending machine. This claim that Bitcoin was never meant to be a payment system for small payments is 100% historical revisionism.

yulaow 5y ago

PoW already brought us to huge wealth concentration so it is not the solution either. This is one of the hard-not-so-talked problems of cryptos at the moment, and I can't see how to solve it.

tromp 5y ago
PoW tries to minimizes wealth concentration by imposing a competitive cost on obtaining coins. Of course it cannot reduce the wealth concentration already present in fiat. It can at best not make it much worse (as PoS does). PoW still suffers from wealth concentration due to varying block subsidies over time, which is why I'm a strong supporter of uncapped emissions like 1 coin per second forever, which gives no advantage to early miners.
- lottin 5y ago
  How does PoW minimise wealth concentration? Minimising wealth concentration would imply distributing the coins evenly among the network participants. That's not what PoW does.
- garren 5y ago
  Doesn’t “minimiz[ing] wealth concentration by imposing a competitive cost on obtaining coins”, basically translate to “only the wealthy can afford the compute resources needed to mine”? So, not really minimizing wealth concentration as practically gauranteeing that only those with a tremendous amount of resources to waste on PoW will see any return? In fact, the first link in the post [0] touches on this point very well in the first 30 min or so. [0] https://www.youtube.com/watch?v=YQ_xWvX1n9g https://www.youtube.com/watch?v=YQ_xWvX1n9g
tenuousemphasis 5y ago
The problem is capitalism, but at least with Bitcoin there is no central authority to unilaterally alter monetary policy to benefit one specific group (those closest to supply of new money i.e. Gresham's Law).
- 5y ago

user-the-name 5y ago

There is no safe way to wind down mining. As mining becomes unprofitable, mining equipment will be shut down. But it will still exist, and it will be in the hands of people desperate for cash. This means that the price of 51% attack will drop massively, and that completely undermines the safety that PoW provides. A large drop in price followed by a large drop in mining completely destroys the security of bitcoin.

tromp 5y ago
The price of a 51% relative to the total marketcap won't change drastically (only moderately due to wider availability of hardware), and that's what security is based on, not the absolute cost of a 51% attack.
- lottin 5y ago
  No... security depends on the cost mounting an attack, and that's the absolute cost.
  - tromp 5y ago
    No... a chain that costs $1M to attack with a mktcap of $100K is more secure than a chain that costs $10M to attack with a mktcap of $100B, as the latter has huge financial incentives for doublespending (after depositing say $100M at an exchange), while the former has none. It's like how much you spend on a bike lock. A $100 lock on a $20 bike is probably quote secure, while a $200 lock on a $5000 bike is probably quite insecure.
    - lottin 5y ago
      No... an attacker that is able to successfully execute a 51% attack can crash the token price and make enormous profits in the derivatives market, so the market cap is irrelevant. Moreover, and attacker may have motivations other than financial gains, which again makes market cap irrelevant. If your security model only protects against financially motivated attackers it means it's basically rubbish.