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Money that can’t be stopped by meddling do-gooders has high utility value. Just ask the poor slobs in Russia or Venezuela who can’t sell their software and fee

Money that can’t be stopped by meddling do-gooders has high utility value. Just ask the poor slobs in Russia or Venezuela who can’t sell their software and feed their families, or in Canada who threw $50 to support their trucker buddy and got their bank account frozen. Also - there is easily $7B of “stranded” energy in flare gas and hydro “rotating reserve” available to secure Bitcoin and similar systems. Besides, the limiting factor for a successful 51% attack isn’t the energy — it’s the capacity to actually create the hash capacity to execute the attack. Not even the NSA could do that, let alone some non-state attacker.

cowtools 4y ago
>Also - there is easily $7B of “stranded” energy in flare gas and hydro “rotating reserve” available to secure Bitcoin and similar systems. Besides, the limiting factor for a successful 51% attack isn’t the energy — it’s the capacity to actually create the hash capacity to execute the attack. Not even the NSA could do that, let alone some non-state attacker. The cost of securing bitcoin is not just in electricity, it is also in the depreciation cost of ASIC hardware. I guess it would be easy for the NSA to pull off the 51% attack if they are able to backdoor the handful of ASIC manufacturers.
esperent 4y ago
Curse those meddling governments who want to tax you to pay for roads, hospitals, and schools, and social welfare. At least, speaking as a European, this is where the large majority of my tax euros go. If your government spends your tax on less useful things then maybe the solution is to work towards a better government, rather than trying to hide your savings in untaxable havens. (Actually I have no idea how easy it is to hide money from the tax collectors using crypto, but I assume that's one of the appeals). EDIT: user above me edited their comment to reference Russia and Venezuela. My comment about working towards a better government still stands although I recognize it's not an easy task.
- tengbretson 4y ago
  Other governments out there spend money on roads, hospitals, schools, and social welfare regardless of the amount of tax dollars they collect. It would be understandable for people under such a system to view their taxes as purely punitive.
- klabb3 4y ago
  > (Actually I have no idea how easy it is to hide money from the tax collectors using crypto, but I assume that's one of the appeals). Depends on which one but let's take pure bitcoin because that's what the post is about. Governments have 3 main tools, tracing, freezing and recovering. The breakdown is different in crypto vs fiat. In BTC, the blockchain contains all previous transactions, everything is public. If you send your BTC through middlemen it'll be mixed in with their assets but you can still follow the trail perfectly. So tracing is easier with BTC than fiat, because you won't have to convince some Cayman island bank to hand over the cash. Next, there's freezing, which is harder. You can't block transactions to Iran on the chain, but you can block entry and exit points when trading with fiat, on most exchanges. Since freezing is technically equal to censoring, it's a feature. Recovery is almost impossible, to the point of you can even lose your own private key, let alone someone who stole from you. The government can't produce a valid private key any more than your quad-core IOT fridge. TL;DR avoiding tax is hard to do for retail people, simply because the regulators are watching the entry and exit points. So even if you tornado cashed and zcash yadda yadda and your funds are untraceable you eventually need to buy fiat for them, because you'll need the fiat for the Lamborghini. > rather than trying to hide your savings in untaxable havens. Kinda OT, but why suddenly is tax evasion a problem with retail crypto of all things? We have institutionalized tax avoidance for the biggest players (megacorps & ultra rich) to the point where nobody raises an eyebrow anymore. Seems inconsistent to me.
- throwawaymaths 4y ago
  > this is where the large majority of my tax euros go. Actually this isn't true. your tax euros go to paying down the debt on loans taken out to pay for these things. Under this system ultimately one of two things happens -- it's either unsustainable and you lose those niceties, or, the euro gets devalued and the only way you get those niceties is by absolutely routing the lower class (even under European gas and water socialism the divide between rich and poor is increasing. Get ready for a big hike in this divide over the next five years as the euro loses its PPP and needs to start defense spending to safeguard trading relationships). Especially hurt will be underprivileged Europeans, like stateless Turks in Germany or immigrants living in banlieues in France.
HWR_14 4y ago
> it’s the capacity to actually create the hash capacity to execute the attack. Not even the NSA could do that, I don't see why. The current value of BTC mined in a year is around $6.5 billion. Hardware lasts, let's be generous, 2 years. No one will mine BTC at a loss, so the total cost of mining BTC for 2 years must be less than $13 billion. So for less than $13 billion, the NSA can create a new BTC mining network at 50%. That seems well within their budget. And if they sell their BTC, they can probably be cashflow positive before destroying the network.
- sph 4y ago
  > So for less than $13 billion, the NSA can create a new BTC mining network The NSA doesn't go to the NVIDIA store to buy $13 billion of GPUs. Measuring only the monetary value conveniently ignores the bottleneck of underlying resources to build the hardware to do the mining. Where does the NSA find $13 billion worth of top-shelf GPUs or ASICs? Having money is not enough if there is no one to sell you. That hardware takes natural resources, knowledge know-how found only in a few companies and a non-negligible amount of rare earth minerals to build. That's a serious bottleneck and not something you can stealthily enter in in that capacity, NSA or not.
  - tromp 4y ago
    Large amounts of earlier generation ASICs whose efficiencies are no longer competitive are available for cheap. Many even end up on the scrap heap.
  - DennisP 4y ago
    It would not be surprising if the NSA is able to design and source whatever ASICs they need. That's a capability that would be directly applicable to attacking encryption in general.
  - HWR_14 4y ago
    > Where does the NSA find $13 billion worth of top-shelf GPUs or ASICs? Leaving aside the fact that they could have private secret production capability and I would believe it, the market is probably being flooded now as BTC is tanking. GPUs are apparently getting cheap again.
Snacklive 4y ago
Bitcoin literally does nothing special for Venezuela.
XorNot 4y ago
This comes up over and over, where people clearly don't understand how foreign currency exchange works. The name, of course, tells you, but people seem to think that "currency conversion" is some transformative process where rubles just become bitcoin. Which is of course: false. To turn rubles into bitcoin, someone who wants to buy rubles has to be willing to buy them for bitcoin. This means someone local, who can transact in rubles, needs to have a supply of bitcoin. Where are they getting it from? They can't buy it overseas because if you could exchange rubles with foreigners then you could also just buy USD. They could mine it, but that still means they need to be willing to accept rubles for their bitcoin, and yet the scenario presented suggests there's a path to exchange rubles for USD which is more favorable. In fact at every step of the process, you have the problem that the only way to get Bitcoin from your stranded currency, is to buy it from another party locally.
- lolc 4y ago
  No actually you can sell services (software, as the original comment alluded) and get Bitcoin in return. These Bitcoin can be sold for Rubles, or bread, or whatever. There's no forex involved unless people want the convenience of exchanges. Which is one of the limitations of Bitcoin: it's hard to deal on-net.
  - XorNot 4y ago
    You would have to sell Bitcoin constantly to pay your taxes in your local jurisdiction. And while there's no unrest locally, you're at a negative: no one has any reason to give you a favorable rate, since you need rubles much more then they need Bitcoin. It's just Forex concerns, and you're going to be paying out the nose constantly on a "what if". Of course, while there's no sanctions, you could also just buy USD directly.
    - lolc 4y ago
      Before, you said that nobody in the local market has Bitcoin. Now you're arguing the opposite, that nobody in the local market wants Bitcoin. Sure, both can be true, when there's just no market. But that's a different argument.
tsol 4y ago
>Just ask the poor slobs in Russia or Venezuela who can’t sell their software and feed their families Wait why are they slobs?
- pjkundert 4y ago
  It’s a term of endearment. Anyone who can’t defend themselves from the connected entitled elites are, by definition, “poor slobs”.
  - nly 4y ago
    I think the expression is actually "poor schlub", schlub being Yiddish in origin
betwixthewires 4y ago
The US could if it wanted 51% attack bitcoin with less than 10% of the yearly DoD budget.

cowtools 4y ago

>Also - there is easily $7B of “stranded” energy in flare gas and hydro “rotating reserve” available to secure Bitcoin and similar systems. Besides, the limiting factor for a successful 51% attack isn’t the energy — it’s the capacity to actually create the hash capacity to execute the attack. Not even the NSA could do that, let alone some non-state attacker. The cost of securing bitcoin is not just in electricity, it is also in the depreciation cost of ASIC hardware. I guess it would be easy for the NSA to pull off the 51% attack if they are able to backdoor the handful of ASIC manufacturers.

esperent 4y ago

Curse those meddling governments who want to tax you to pay for roads, hospitals, and schools, and social welfare. At least, speaking as a European, this is where the large majority of my tax euros go. If your government spends your tax on less useful things then maybe the solution is to work towards a better government, rather than trying to hide your savings in untaxable havens. (Actually I have no idea how easy it is to hide money from the tax collectors using crypto, but I assume that's one of the appeals). EDIT: user above me edited their comment to reference Russia and Venezuela. My comment about working towards a better government still stands although I recognize it's not an easy task.

tengbretson 4y ago
Other governments out there spend money on roads, hospitals, schools, and social welfare regardless of the amount of tax dollars they collect. It would be understandable for people under such a system to view their taxes as purely punitive.
klabb3 4y ago
> (Actually I have no idea how easy it is to hide money from the tax collectors using crypto, but I assume that's one of the appeals). Depends on which one but let's take pure bitcoin because that's what the post is about. Governments have 3 main tools, tracing, freezing and recovering. The breakdown is different in crypto vs fiat. In BTC, the blockchain contains all previous transactions, everything is public. If you send your BTC through middlemen it'll be mixed in with their assets but you can still follow the trail perfectly. So tracing is easier with BTC than fiat, because you won't have to convince some Cayman island bank to hand over the cash. Next, there's freezing, which is harder. You can't block transactions to Iran on the chain, but you can block entry and exit points when trading with fiat, on most exchanges. Since freezing is technically equal to censoring, it's a feature. Recovery is almost impossible, to the point of you can even lose your own private key, let alone someone who stole from you. The government can't produce a valid private key any more than your quad-core IOT fridge. TL;DR avoiding tax is hard to do for retail people, simply because the regulators are watching the entry and exit points. So even if you tornado cashed and zcash yadda yadda and your funds are untraceable you eventually need to buy fiat for them, because you'll need the fiat for the Lamborghini. > rather than trying to hide your savings in untaxable havens. Kinda OT, but why suddenly is tax evasion a problem with retail crypto of all things? We have institutionalized tax avoidance for the biggest players (megacorps & ultra rich) to the point where nobody raises an eyebrow anymore. Seems inconsistent to me.
throwawaymaths 4y ago
> this is where the large majority of my tax euros go. Actually this isn't true. your tax euros go to paying down the debt on loans taken out to pay for these things. Under this system ultimately one of two things happens -- it's either unsustainable and you lose those niceties, or, the euro gets devalued and the only way you get those niceties is by absolutely routing the lower class (even under European gas and water socialism the divide between rich and poor is increasing. Get ready for a big hike in this divide over the next five years as the euro loses its PPP and needs to start defense spending to safeguard trading relationships). Especially hurt will be underprivileged Europeans, like stateless Turks in Germany or immigrants living in banlieues in France.

HWR_14 4y ago

> it’s the capacity to actually create the hash capacity to execute the attack. Not even the NSA could do that, I don't see why. The current value of BTC mined in a year is around $6.5 billion. Hardware lasts, let's be generous, 2 years. No one will mine BTC at a loss, so the total cost of mining BTC for 2 years must be less than $13 billion. So for less than $13 billion, the NSA can create a new BTC mining network at 50%. That seems well within their budget. And if they sell their BTC, they can probably be cashflow positive before destroying the network.

sph 4y ago
> So for less than $13 billion, the NSA can create a new BTC mining network The NSA doesn't go to the NVIDIA store to buy $13 billion of GPUs. Measuring only the monetary value conveniently ignores the bottleneck of underlying resources to build the hardware to do the mining. Where does the NSA find $13 billion worth of top-shelf GPUs or ASICs? Having money is not enough if there is no one to sell you. That hardware takes natural resources, knowledge know-how found only in a few companies and a non-negligible amount of rare earth minerals to build. That's a serious bottleneck and not something you can stealthily enter in in that capacity, NSA or not.
- tromp 4y ago
  Large amounts of earlier generation ASICs whose efficiencies are no longer competitive are available for cheap. Many even end up on the scrap heap.
- DennisP 4y ago
  It would not be surprising if the NSA is able to design and source whatever ASICs they need. That's a capability that would be directly applicable to attacking encryption in general.
- HWR_14 4y ago
  > Where does the NSA find $13 billion worth of top-shelf GPUs or ASICs? Leaving aside the fact that they could have private secret production capability and I would believe it, the market is probably being flooded now as BTC is tanking. GPUs are apparently getting cheap again.

Snacklive 4y ago

Bitcoin literally does nothing special for Venezuela.

XorNot 4y ago

This comes up over and over, where people clearly don't understand how foreign currency exchange works. The name, of course, tells you, but people seem to think that "currency conversion" is some transformative process where rubles just become bitcoin. Which is of course: false. To turn rubles into bitcoin, someone who wants to buy rubles has to be willing to buy them for bitcoin. This means someone local, who can transact in rubles, needs to have a supply of bitcoin. Where are they getting it from? They can't buy it overseas because if you could exchange rubles with foreigners then you could also just buy USD. They could mine it, but that still means they need to be willing to accept rubles for their bitcoin, and yet the scenario presented suggests there's a path to exchange rubles for USD which is more favorable. In fact at every step of the process, you have the problem that the only way to get Bitcoin from your stranded currency, is to buy it from another party locally.

lolc 4y ago
No actually you can sell services (software, as the original comment alluded) and get Bitcoin in return. These Bitcoin can be sold for Rubles, or bread, or whatever. There's no forex involved unless people want the convenience of exchanges. Which is one of the limitations of Bitcoin: it's hard to deal on-net.
- XorNot 4y ago
  You would have to sell Bitcoin constantly to pay your taxes in your local jurisdiction. And while there's no unrest locally, you're at a negative: no one has any reason to give you a favorable rate, since you need rubles much more then they need Bitcoin. It's just Forex concerns, and you're going to be paying out the nose constantly on a "what if". Of course, while there's no sanctions, you could also just buy USD directly.
  - lolc 4y ago
    Before, you said that nobody in the local market has Bitcoin. Now you're arguing the opposite, that nobody in the local market wants Bitcoin. Sure, both can be true, when there's just no market. But that's a different argument.

tsol 4y ago

>Just ask the poor slobs in Russia or Venezuela who can’t sell their software and feed their families Wait why are they slobs?

pjkundert 4y ago
It’s a term of endearment. Anyone who can’t defend themselves from the connected entitled elites are, by definition, “poor slobs”.
- nly 4y ago
  I think the expression is actually "poor schlub", schlub being Yiddish in origin

betwixthewires 4y ago

The US could if it wanted 51% attack bitcoin with less than 10% of the yearly DoD budget.