9 ms·

The comparison to Madoff is not apt. Madoff hid losses by committing accounting fraud, whereas every single transaction in the Bitcoin network is visible to eve

by cs702 3y ago

The comparison to Madoff is not apt. Madoff hid losses by committing accounting fraud, whereas every single transaction in the Bitcoin network is visible to everyone and, moreover, cryptographically verifiable by everyone. As long as the distributed consensus algorithm continues to function, Bitcoin will continue to exist. Period. (Government regulations cannot kill it; they can only drive it underground, as with gold.) Anyone who predicts Bitcoin's demise must explain precisely how and why its network would stop functioning.

thworp 3y ago
No, this is an absolutely ass-backwards argument. To be a currency or a store of value or money (read: to be of any use) it has to be exchangeable for goods and services. Now we can see transactions on the blockchain but we have no idea what that transaction was for. *Nobody* can tell you what a bitcoins worth of wheat is without resorting to exchange rates of bitcoin to actual currencies. But because the entire exchange ecosystem is so illiquid, intransparent, unaudited and rife with fraud there is no way to know how many bushels of wheat you could get for something like 13 BTC.
- nwiswell 3y ago
  Isn't this counter-argument equally applicable to silver or gold?
  - paddw 3y ago
    Well, the problem is you can easily trade gold for cash because it is socially acceptable to do so. If Bitcoin became outlawed, it would be very hard to exchange Bitcoin for cash, since it has no extrinsic value outside of being a financial asset (as compared to, for example, barrels of crude oil). That being said, I doubt Bitcoin will be outlawed in the West, and generally agree that it will be around for the long term.
    - nwiswell 3y ago
      > That being said, I doubt Bitcoin will be outlawed in the West, and generally agree that it will be around for the long term. Well, not entirely without precedent, since private ownership of gold was outlawed nationwide in the US during the Great Depression. It wasn't fully legalized until 1974. https://en.m.wikipedia.org/wiki/Executive_Order_6102 https://en.m.wikipedia.org/wiki/Executive_Order_6102
      - mplanchard 3y ago
        This is an entirely new fact for me. It’s surprising to me that I’d never heard of this. Thanks for sharing!
        nostrademons 3y ago
        Wait till you hear that the first chairman of the SEC was a notorious market manipulator who was hired by his friend FDR to prevent anyone else from doing the things that made him rich. He also happened to be JFK's dad. https://en.wikipedia.org/wiki/Joseph_P._Kennedy_Sr.#Wall_Street_and_stock_market_investments https://en.wikipedia.org/wiki/Joseph_P._Kennedy_Sr.#Wall_Str...
        csomar 3y ago
        That's why history repeats. Most people have no idea what happened a 100 years ago.
  - HWR_14 3y ago
    Yes.
- chromatin 3y ago
  Nobody can tell you what a gold oz. worth of wheat is without resorting to exchange rates of gold to actual currencies.
  - ntr-- 3y ago
    I'll give you 1kg of wheat for an ounce of gold right now.
    - bhawks 3y ago
      I'll see your 1kg and raise to 100kg.
      - anonporridge 3y ago
        Congrats boys! We just created a market using gold as the unit of account!
  - __loam 3y ago
    Gold has intrinsic value as a commodity though. It's scarce, has industrial uses, and has aesthetic value to a lot of people. Bitcoin doesn't have that. Bitcoin has value entirely because people think it has value. As an inflation hedge it fuckin sucks because it follows the market. When the fed increased rates, bitcoin crashed. As a store of value, it's too volatile to really work well for that and small mistakes can leave you with nothing. As a currency, the transactions per second is way way too low to be useful.
    - tasuki 3y ago
      > Gold has intrinsic value as a commodity though. It's scarce, has industrial uses, and has aesthetic value to a lot of people. Yet this value is a small fraction of gold's trading price. How do you explain the current price of gold?
      - bandrami 3y ago
- mabcat 3y ago
  You do need to separate medium of exchange from store of value. Real estate is useless as a currency while being the primary store of value for most people. Most of your objections also apply to real estate: can't know how much wheat a house is worth, houses are notoriously illiquid, price discovery is difficult and quite opaque, the sector is rife with misrepresentations. I wouldn't go so far as to say fraud, but where does "real estate agent" sit on those polls of "most trusted professions"? Houses aren't even fungible! And if anyone thinks BTC/ETH transactions are slow and expensive (me!), around here the gas fee on real estate transactions is ~5% with a 6-month processing time...
  - peoplefromibiza 3y ago
    I guess the difference is that you can live in a house. For the majority of people that's the real value. Real estate market is also heavily (heavily) regulated, to the point that buying and selling houses require so much paperwork that it's not really convenient for scammers. It's also quite stable, loans are secured by mortgages on the properties, I'm not sure anyone would accept bitcoins for the same purpose.
    - thworp 3y ago
      You sort of tipped around the main difference: Real estate is illiquid and intransparent sure, but it is a non-fungible productive asset, you can get people to pay you rents because they need precisely your building. There are no comparable income streams for bitcoin (outside of Ponzi "yield farming") so it is illiquid without any of the benefits of traditional illiquid assets.
      - peoplefromibiza 3y ago
        rent is due after you bought the property. which entails a lot of the aforementioned paperwork and checks and law abidings. if bitcoin could provide the exact same level of security, it could be used as an asset, granted it failed as a currency. the problem is it was designed precisely to not adhere to the standards everyone expects from "old-school" transactions, hence its main purpose is speculation, and it's barely good at that right now.
- fnordpiglet 3y ago
  I don’t think any of this is accurate. My house is a store of value but not easily traded for goods and services, but can be sold for local currency to facilitate that exchange. There are many crypto exchanges with conversion to many currencies, including fiat currencies, but also between other crypto currencies. This is how price discovery is accomplished. If it were illiquid as you claim then there would be a ton of arbitrage opportunity in the inefficiencies and mispricings of crypto currencies. However in recent times prices are fairly rational across exchanges and conversion to fiat. The fraud claims you have seen overblown, FTX not withstanding. But I’d note that all financial markets are rife with fraud, hence the regulation. I don’t think regulation is a bad thing in crypto exchanges specifically. I think any rational crypto exchange would welcome it. Despite claims to the contrary compliant exchanges in many markets not aligned to big players start up all the time. That’s great, and I think a lot of crypto exchange operators have been hoping for a clear regulatory regime from regulators in the US. The current “you better comply with unwritten regulations or we sue you” regime is absurd.
tromp 3y ago
> why its network would stop functioning If it fails, it's most likely because block subsidy will become negligible in a few decades and transaction fees alone won't always provide sufficient security against re-org attacks.
- cs702 3y ago
  Maybe. Others have made that argument before. So far, it's been proven wrong. The rewards are already pretty small, and things are still working. Maybe it could happen after block rewards go to zero? I don't know. But we'll find out if you're right over the next six years!
  - tromp 3y ago
    > So far, it's been proven wrong. How can a prediction of what happens after 2050 (i.e. after a total of 10 halvings to make subsidy negligible) have been proven wrong "so far" ??
    - kiicia 3y ago
      there is set amount of bitcoins to mint transaction fees were intended to keep miners active
- try_the_bass 3y ago
  The "transaction fees won't protect against reorgs" argument assumes that miners count the value of future block rewards at 0. This is poor logic that models mining as a single game of the prisoner's dilemma. Modeling it as a repeated game arrives at the opposite conclusion: that most miners will cooperate to some degree, because the future value of their rewards depends on it. I say this as someone very much opposed to the "deflationary" model, because I think it's bullshit that generates a "landed gentry" (thanks, spez) that can forever dominate the distribution of a currency. If you're going to make a currency, inflation of some degree is required to ensure fair(er) distribution over time. I just think the idea that, when block rewards dissipate, miners will suddenly lose the ability to think more than one block into the future should be called for what it is: bad logic. It's also readily disproved by the most trivial glance at their history of long-term, forward-looking investment.
onlyrealcuzzo 3y ago
Except ~99.99% of BTC transactions happen in exchanges off chain and aren't visible to anyone, and have a history of being fraudulent at many exchanges that have failed through the years...
- cs702 3y ago
  That's true for gold too: Most gold transactions happen in exchanges. But the fact that there are successful intermediaries in the gold market is not an argument against gold's viability as a store of value. Ditto for Bitcoin.
  - onlyrealcuzzo 3y ago
    This is whataboutism. The claim is that BTC surely isn't fraud because the chain is public knowledge. This is irrelevant, because the vast majority of data is bullshit. The gold market has been manipulated to and fro, even with regulations. The idea that BTC isn't manipulated to oblivion JUST BECAUSE there's a public ledger (missing 99.99% of the data) is naive.
    - jonhohle 3y ago
      Whataboutism is a method of responding to an accusation by making a counter-accusation against an opponent. (What about her e-mails?)
  - eli 3y ago
    I don't think gold is a good investment vehicle nor means of exchanging value either.
    - deleted 3y ago
      [deleted]
    - xcv123 3y ago
      Tell that to people who lost their entire life savings when their fiat currency hyper-inflated to zero value (Hungary, Zimbabwe, Yugoslavia, Germany, Argentina)
youreincorrect 3y ago
When people talk about Bitcoin's potential demise, they are referring to its price and perceived value, not whether it will cease to exist necessarily. Madoff also was not ultimately caught and his scheme ended because of the accounting fraud being revealed (i.e. the fraud was not that important). That happened later. He was caught because a market downturn resulted in him being unable to acquire new victims for the Ponzi scheme, which would have otherwise perpetuated it by taking new money in and using that to pay out existing investors.
- cs702 3y ago
  The longer Bitcoin's network continues to function, more and more people will become aware of its resiliency. Governments may topple; banks may fail; exchanges may go bust; Bitcoin keeps on ticking. As long as the network continues to function, Bitcoin will have a price.
  - eli 3y ago
    It's possible that more people are aware of Bitcoin than 18 months ago, but I doubt many think it's more resilient. Since Bitcoin depends on a functioning network it seems more likely than something physical like Beanie Babies or baseball cards to one day become effectively worthless.
    - deleted 3y ago
      [deleted]
  - juve1996 3y ago
    The US government has been around for quite some time. The British pound, longer. It will take hundreds of years to compare to that level of resiliency.
    - XorNot 3y ago
      The British government has completed repayments on historically held debt which dates back to the 18th century[1] as recently as 2015 (they were related to the South Sea Bubble). That's a 162 contiguous years of financial records. [1] https://www.gov.uk/government/news/repayment-of-26-billion-historical-debt-to-be-completed-by-government https://www.gov.uk/government/news/repayment-of-26-billion-h...
deleted 3y ago
[deleted]
zirgs 3y ago
Its network could stop functioning simply because it would no longer be profitable to mine it. Sure - a few hardcore believers would continue mining at a loss, but I doubt that they'd have enough computing power to secure the network properly.
- calvinmorrison 3y ago
  Isn't difficulty set based on the previous block time?
  - crote 3y ago
    No, the difficulty is updated every 2016 blocks. This should be once every two weeks, but if the worldwide hash power halves it'll of course take four weeks until it can update. The difficulty adjustment is capped to +300% / -75%. The issue here is that the Bitcoin reward has to pay for the mining cost, but there is nothing preventing the Bitcoin price from dropping lower. So miners will either have to mine at a loss for (on average) a week until a difficulty adjustment, or turn off their equipment. Turning it off will make the wait even longer and the mining price per block will increase even more for the remaining miners - leading to more of them operating at a loss or shutting down which makes the problem even worse.
  - zirgs 3y ago
    If the difficulty is too low then the network becomes vulnerable to a 51% attack. If it's too high then it becomes less profitable to mine and transaction processing speed slows down. So it has to be high enough to prevent attacks, but low enough for mining to be profitable.
lmm 3y ago
> Anyone who predicts Bitcoin's demise must explain precisely how and why its network would stop functioning. I've been saying for years that Bitcoin will go down like Second Life. Remember when there were news stories about Sony or whoever buys an island for X million dollars? And now... I mean it's still there (presumably), I don't think they've turned off the servers or anything, but no-one cares and it's obviously not a good investment (and that's with it being propped up by a few people who actually enjoy the game, which Bitcoin won't have). The ability to actually buy stuff with Bitcoin is already past its peak (more places are removing Bitcoin payment options than adding them). It's less in the news than it was. There probably won't be a specific collapse moment (when Tether's reserves get exposed as fraudulent and they stop withdrawals I expect Bitcoin's price will crash, but it's crashed before and there are still true believers left over). I mean eventually the last miner will turn off their rig, but it will be irrelevant long before that happens.
- snapcaster 3y ago
  Presumably you have been saying this for a while and been wrong so far. At what point would you change your mind?
  - landoftheice 3y ago
    [dead]
  - DaiPlusPlus 3y ago
    Are you saying the islands in SecondLife are still retaining their 7-figure US dollar value today?
  - lmm 3y ago
    I don't think I have been wrong? Like I said, the ability to actually buy stuff with Bitcoin is in decline. I'd change my mind if I saw evidence of increasing Bitcoin adoption in the real economy.
    - DaiPlusPlus 3y ago
codingrightnow 3y ago
The fraud is likely in stable coins such as USDT, when it goes Ponzi up, everything comes down with it.
yyyk 3y ago
>(Government regulations cannot kill it; they can only drive it underground, as with gold.) >Anyone who predicts Bitcoin's demise must explain precisely how and why its network would stop functioning. This can be done pretty easily, once enough countries ban and condemn it for its contribution to the climate crisis and to crime. There's no need to catch every transaction, just to ban it enough to shrink the mining pool. Once the active network has shrunk enough, the transparent permissionless structure ensures we can ran the obvious attacks on it. Since it's now underground and these actors aren't the nicest of people, coordinating the forks to resist the attacks will be difficult and costly. People give up after each attack, which makes running another attack easier and so on. Eventually maintaining the network as is won't be worth it to anyone.
chasil 3y ago
Very easy. Only a small number of people can participate in new block chain entries, assuming demand is high. These happen every ten minutes, and well under a hundred thousand transactions are allowed. Get in line to spend your money; it may be years. This would never work! https://en.wikipedia.org/wiki/Bitcoin_scalability_problem https://en.wikipedia.org/wiki/Bitcoin_scalability_problem
prepend 3y ago
> whereas every single transaction in the Bitcoin network is visible to everyone and, moreover, cryptographically verifiable by everyone. It’s pretty easy to hide wash trading in the ledger to manipulate the price of bitcoin to artificial levels. Just because transactions are public doesn’t mean that there isn’t associated data hidden (eg, identities, if dead wallets are really dead, etc etc). Bitcoin may be great, but to say it must succeed because it’s transparent doesn’t address the risk that there is no basis for value and it’s only purpose is speculation and tricking a greater fool to keep the price up.
iudqnolq 3y ago
Tell that to Gus Farber, who was arrested for selling gold after Roosevelt banned private ownership of gold (with certain exceptions): https://en.m.wikipedia.org/wiki/Executive_Order_6102 https://en.m.wikipedia.org/wiki/Executive_Order_6102
marcusb 3y ago
> Anyone who predicts Bitcoin's demise must explain precisely how and why its network would stop functioning. No, they don’t. There are a variety of scenarios that do not require the government to eliminate the ecosystem. For starters, they could make if very, very difficult to use for large capital purchases (houses, cars, etc.) They could impose fines on businesses for accepting crypto — or specific types of crypto — as payment for goods and services. Can they completely eliminate your ability to trade a bitcoin with your friend? No, of course not, any more than the federal government retrieved every ounce of gold back when that was illegal. But they can make it so painful to use that most people simply won’t.

by cs702 3y ago

thworp 3y ago

No, this is an absolutely ass-backwards argument. To be a currency or a store of value or money (read: to be of any use) it has to be exchangeable for goods and services. Now we can see transactions on the blockchain but we have no idea what that transaction was for. *Nobody* can tell you what a bitcoins worth of wheat is without resorting to exchange rates of bitcoin to actual currencies. But because the entire exchange ecosystem is so illiquid, intransparent, unaudited and rife with fraud there is no way to know how many bushels of wheat you could get for something like 13 BTC.

nwiswell 3y ago
Isn't this counter-argument equally applicable to silver or gold?
- paddw 3y ago
  Well, the problem is you can easily trade gold for cash because it is socially acceptable to do so. If Bitcoin became outlawed, it would be very hard to exchange Bitcoin for cash, since it has no extrinsic value outside of being a financial asset (as compared to, for example, barrels of crude oil). That being said, I doubt Bitcoin will be outlawed in the West, and generally agree that it will be around for the long term.
  - nwiswell 3y ago
    > That being said, I doubt Bitcoin will be outlawed in the West, and generally agree that it will be around for the long term. Well, not entirely without precedent, since private ownership of gold was outlawed nationwide in the US during the Great Depression. It wasn't fully legalized until 1974. https://en.m.wikipedia.org/wiki/Executive_Order_6102 https://en.m.wikipedia.org/wiki/Executive_Order_6102
    - mplanchard 3y ago
      This is an entirely new fact for me. It’s surprising to me that I’d never heard of this. Thanks for sharing!
      - nostrademons 3y ago
        Wait till you hear that the first chairman of the SEC was a notorious market manipulator who was hired by his friend FDR to prevent anyone else from doing the things that made him rich. He also happened to be JFK's dad. https://en.wikipedia.org/wiki/Joseph_P._Kennedy_Sr.#Wall_Street_and_stock_market_investments https://en.wikipedia.org/wiki/Joseph_P._Kennedy_Sr.#Wall_Str...
      - csomar 3y ago
        That's why history repeats. Most people have no idea what happened a 100 years ago.
- HWR_14 3y ago
  Yes.
chromatin 3y ago
Nobody can tell you what a gold oz. worth of wheat is without resorting to exchange rates of gold to actual currencies.
- ntr-- 3y ago
  I'll give you 1kg of wheat for an ounce of gold right now.
  - bhawks 3y ago
    I'll see your 1kg and raise to 100kg.
    - anonporridge 3y ago
      Congrats boys! We just created a market using gold as the unit of account!
- __loam 3y ago
  Gold has intrinsic value as a commodity though. It's scarce, has industrial uses, and has aesthetic value to a lot of people. Bitcoin doesn't have that. Bitcoin has value entirely because people think it has value. As an inflation hedge it fuckin sucks because it follows the market. When the fed increased rates, bitcoin crashed. As a store of value, it's too volatile to really work well for that and small mistakes can leave you with nothing. As a currency, the transactions per second is way way too low to be useful.
  - tasuki 3y ago
    > Gold has intrinsic value as a commodity though. It's scarce, has industrial uses, and has aesthetic value to a lot of people. Yet this value is a small fraction of gold's trading price. How do you explain the current price of gold?
    - bandrami 3y ago
mabcat 3y ago
You do need to separate medium of exchange from store of value. Real estate is useless as a currency while being the primary store of value for most people. Most of your objections also apply to real estate: can't know how much wheat a house is worth, houses are notoriously illiquid, price discovery is difficult and quite opaque, the sector is rife with misrepresentations. I wouldn't go so far as to say fraud, but where does "real estate agent" sit on those polls of "most trusted professions"? Houses aren't even fungible! And if anyone thinks BTC/ETH transactions are slow and expensive (me!), around here the gas fee on real estate transactions is ~5% with a 6-month processing time...
- peoplefromibiza 3y ago
  I guess the difference is that you can live in a house. For the majority of people that's the real value. Real estate market is also heavily (heavily) regulated, to the point that buying and selling houses require so much paperwork that it's not really convenient for scammers. It's also quite stable, loans are secured by mortgages on the properties, I'm not sure anyone would accept bitcoins for the same purpose.
  - thworp 3y ago
    You sort of tipped around the main difference: Real estate is illiquid and intransparent sure, but it is a non-fungible productive asset, you can get people to pay you rents because they need precisely your building. There are no comparable income streams for bitcoin (outside of Ponzi "yield farming") so it is illiquid without any of the benefits of traditional illiquid assets.
    - peoplefromibiza 3y ago
      rent is due after you bought the property. which entails a lot of the aforementioned paperwork and checks and law abidings. if bitcoin could provide the exact same level of security, it could be used as an asset, granted it failed as a currency. the problem is it was designed precisely to not adhere to the standards everyone expects from "old-school" transactions, hence its main purpose is speculation, and it's barely good at that right now.
fnordpiglet 3y ago
I don’t think any of this is accurate. My house is a store of value but not easily traded for goods and services, but can be sold for local currency to facilitate that exchange. There are many crypto exchanges with conversion to many currencies, including fiat currencies, but also between other crypto currencies. This is how price discovery is accomplished. If it were illiquid as you claim then there would be a ton of arbitrage opportunity in the inefficiencies and mispricings of crypto currencies. However in recent times prices are fairly rational across exchanges and conversion to fiat. The fraud claims you have seen overblown, FTX not withstanding. But I’d note that all financial markets are rife with fraud, hence the regulation. I don’t think regulation is a bad thing in crypto exchanges specifically. I think any rational crypto exchange would welcome it. Despite claims to the contrary compliant exchanges in many markets not aligned to big players start up all the time. That’s great, and I think a lot of crypto exchange operators have been hoping for a clear regulatory regime from regulators in the US. The current “you better comply with unwritten regulations or we sue you” regime is absurd.

tromp 3y ago

> why its network would stop functioning If it fails, it's most likely because block subsidy will become negligible in a few decades and transaction fees alone won't always provide sufficient security against re-org attacks.

cs702 3y ago
Maybe. Others have made that argument before. So far, it's been proven wrong. The rewards are already pretty small, and things are still working. Maybe it could happen after block rewards go to zero? I don't know. But we'll find out if you're right over the next six years!
- tromp 3y ago
  > So far, it's been proven wrong. How can a prediction of what happens after 2050 (i.e. after a total of 10 halvings to make subsidy negligible) have been proven wrong "so far" ??
  - kiicia 3y ago
    there is set amount of bitcoins to mint transaction fees were intended to keep miners active
try_the_bass 3y ago
The "transaction fees won't protect against reorgs" argument assumes that miners count the value of future block rewards at 0. This is poor logic that models mining as a single game of the prisoner's dilemma. Modeling it as a repeated game arrives at the opposite conclusion: that most miners will cooperate to some degree, because the future value of their rewards depends on it. I say this as someone very much opposed to the "deflationary" model, because I think it's bullshit that generates a "landed gentry" (thanks, spez) that can forever dominate the distribution of a currency. If you're going to make a currency, inflation of some degree is required to ensure fair(er) distribution over time. I just think the idea that, when block rewards dissipate, miners will suddenly lose the ability to think more than one block into the future should be called for what it is: bad logic. It's also readily disproved by the most trivial glance at their history of long-term, forward-looking investment.

onlyrealcuzzo 3y ago

Except ~99.99% of BTC transactions happen in exchanges off chain and aren't visible to anyone, and have a history of being fraudulent at many exchanges that have failed through the years...

cs702 3y ago
That's true for gold too: Most gold transactions happen in exchanges. But the fact that there are successful intermediaries in the gold market is not an argument against gold's viability as a store of value. Ditto for Bitcoin.
- onlyrealcuzzo 3y ago
  This is whataboutism. The claim is that BTC surely isn't fraud because the chain is public knowledge. This is irrelevant, because the vast majority of data is bullshit. The gold market has been manipulated to and fro, even with regulations. The idea that BTC isn't manipulated to oblivion JUST BECAUSE there's a public ledger (missing 99.99% of the data) is naive.
  - jonhohle 3y ago
    Whataboutism is a method of responding to an accusation by making a counter-accusation against an opponent. (What about her e-mails?)
- eli 3y ago
  I don't think gold is a good investment vehicle nor means of exchanging value either.
  - deleted 3y ago
    [deleted]
  - xcv123 3y ago
    Tell that to people who lost their entire life savings when their fiat currency hyper-inflated to zero value (Hungary, Zimbabwe, Yugoslavia, Germany, Argentina)

youreincorrect 3y ago

When people talk about Bitcoin's potential demise, they are referring to its price and perceived value, not whether it will cease to exist necessarily. Madoff also was not ultimately caught and his scheme ended because of the accounting fraud being revealed (i.e. the fraud was not that important). That happened later. He was caught because a market downturn resulted in him being unable to acquire new victims for the Ponzi scheme, which would have otherwise perpetuated it by taking new money in and using that to pay out existing investors.

cs702 3y ago
The longer Bitcoin's network continues to function, more and more people will become aware of its resiliency. Governments may topple; banks may fail; exchanges may go bust; Bitcoin keeps on ticking. As long as the network continues to function, Bitcoin will have a price.
- eli 3y ago
  It's possible that more people are aware of Bitcoin than 18 months ago, but I doubt many think it's more resilient. Since Bitcoin depends on a functioning network it seems more likely than something physical like Beanie Babies or baseball cards to one day become effectively worthless.
  - deleted 3y ago
    [deleted]
- juve1996 3y ago
  The US government has been around for quite some time. The British pound, longer. It will take hundreds of years to compare to that level of resiliency.
  - XorNot 3y ago
    The British government has completed repayments on historically held debt which dates back to the 18th century[1] as recently as 2015 (they were related to the South Sea Bubble). That's a 162 contiguous years of financial records. [1] https://www.gov.uk/government/news/repayment-of-26-billion-historical-debt-to-be-completed-by-government https://www.gov.uk/government/news/repayment-of-26-billion-h...

deleted 3y ago

[deleted]

zirgs 3y ago

Its network could stop functioning simply because it would no longer be profitable to mine it. Sure - a few hardcore believers would continue mining at a loss, but I doubt that they'd have enough computing power to secure the network properly.

calvinmorrison 3y ago
Isn't difficulty set based on the previous block time?
- crote 3y ago
  No, the difficulty is updated every 2016 blocks. This should be once every two weeks, but if the worldwide hash power halves it'll of course take four weeks until it can update. The difficulty adjustment is capped to +300% / -75%. The issue here is that the Bitcoin reward has to pay for the mining cost, but there is nothing preventing the Bitcoin price from dropping lower. So miners will either have to mine at a loss for (on average) a week until a difficulty adjustment, or turn off their equipment. Turning it off will make the wait even longer and the mining price per block will increase even more for the remaining miners - leading to more of them operating at a loss or shutting down which makes the problem even worse.
- zirgs 3y ago
  If the difficulty is too low then the network becomes vulnerable to a 51% attack. If it's too high then it becomes less profitable to mine and transaction processing speed slows down. So it has to be high enough to prevent attacks, but low enough for mining to be profitable.

lmm 3y ago

> Anyone who predicts Bitcoin's demise must explain precisely how and why its network would stop functioning. I've been saying for years that Bitcoin will go down like Second Life. Remember when there were news stories about Sony or whoever buys an island for X million dollars? And now... I mean it's still there (presumably), I don't think they've turned off the servers or anything, but no-one cares and it's obviously not a good investment (and that's with it being propped up by a few people who actually enjoy the game, which Bitcoin won't have). The ability to actually buy stuff with Bitcoin is already past its peak (more places are removing Bitcoin payment options than adding them). It's less in the news than it was. There probably won't be a specific collapse moment (when Tether's reserves get exposed as fraudulent and they stop withdrawals I expect Bitcoin's price will crash, but it's crashed before and there are still true believers left over). I mean eventually the last miner will turn off their rig, but it will be irrelevant long before that happens.

snapcaster 3y ago
Presumably you have been saying this for a while and been wrong so far. At what point would you change your mind?
- landoftheice 3y ago
  [dead]
- DaiPlusPlus 3y ago
  Are you saying the islands in SecondLife are still retaining their 7-figure US dollar value today?
- lmm 3y ago
  I don't think I have been wrong? Like I said, the ability to actually buy stuff with Bitcoin is in decline. I'd change my mind if I saw evidence of increasing Bitcoin adoption in the real economy.
  - DaiPlusPlus 3y ago

codingrightnow 3y ago

The fraud is likely in stable coins such as USDT, when it goes Ponzi up, everything comes down with it.

yyyk 3y ago

>(Government regulations cannot kill it; they can only drive it underground, as with gold.) >Anyone who predicts Bitcoin's demise must explain precisely how and why its network would stop functioning. This can be done pretty easily, once enough countries ban and condemn it for its contribution to the climate crisis and to crime. There's no need to catch every transaction, just to ban it enough to shrink the mining pool. Once the active network has shrunk enough, the transparent permissionless structure ensures we can ran the obvious attacks on it. Since it's now underground and these actors aren't the nicest of people, coordinating the forks to resist the attacks will be difficult and costly. People give up after each attack, which makes running another attack easier and so on. Eventually maintaining the network as is won't be worth it to anyone.

chasil 3y ago

Very easy. Only a small number of people can participate in new block chain entries, assuming demand is high. These happen every ten minutes, and well under a hundred thousand transactions are allowed. Get in line to spend your money; it may be years. This would never work! https://en.wikipedia.org/wiki/Bitcoin_scalability_problem https://en.wikipedia.org/wiki/Bitcoin_scalability_problem

prepend 3y ago

> whereas every single transaction in the Bitcoin network is visible to everyone and, moreover, cryptographically verifiable by everyone. It’s pretty easy to hide wash trading in the ledger to manipulate the price of bitcoin to artificial levels. Just because transactions are public doesn’t mean that there isn’t associated data hidden (eg, identities, if dead wallets are really dead, etc etc). Bitcoin may be great, but to say it must succeed because it’s transparent doesn’t address the risk that there is no basis for value and it’s only purpose is speculation and tricking a greater fool to keep the price up.

iudqnolq 3y ago

Tell that to Gus Farber, who was arrested for selling gold after Roosevelt banned private ownership of gold (with certain exceptions): https://en.m.wikipedia.org/wiki/Executive_Order_6102 https://en.m.wikipedia.org/wiki/Executive_Order_6102

marcusb 3y ago

> Anyone who predicts Bitcoin's demise must explain precisely how and why its network would stop functioning. No, they don’t. There are a variety of scenarios that do not require the government to eliminate the ecosystem. For starters, they could make if very, very difficult to use for large capital purchases (houses, cars, etc.) They could impose fines on businesses for accepting crypto — or specific types of crypto — as payment for goods and services. Can they completely eliminate your ability to trade a bitcoin with your friend? No, of course not, any more than the federal government retrieved every ounce of gold back when that was illegal. But they can make it so painful to use that most people simply won’t.