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> "To skip over that right to "but think about how much you're missing out" is... I don't know, I've seen people make this pitch better." To clarify, I was poi

• danShumway 3y ago
  > If I see that I'm wrong, I can simply sell my bitcoin at a profit and walk away - my bitcoin ownership is not a psychological barrier to a change of my belief (a hypothesis you made). This is textbook MLM talk here, and for the benefit of anyone else reading I want to take a minute and walk through it. First, it doubles down on FOMO again after it's been pointed out as FOMO; it just rephrases the same argument again slightly differently. Secondly, it puts forward the absurd notion that investment into a financial vehicle makes one more objective than observers outside of that financial vehicle. Think that through for a second if you're a reader, if someone came to you and said, "I've invested a huge amount into this company and so my analysis of how the company is doing and its growth potential is more objective than an outside analysis", you would rightly dismiss that person. You would not be persuaded by that person telling you, "well, I can sell my stock if I think the company is doing poorly." This is how most of our financial disclosure systems work, we recognize that people in those positions have huge vested interests in seeing the systems they are invested into succeed. But MLM-style systems like Bitcoin attempt to invert that argument, claiming that their stake makes them more trustworthy. And they use a specific trick to do it: they argue that de-investment from the system is costless. It's not, for a couple of reasons. First, it's just straight up ignoring barriers: moving really massive amounts of money into and out of crypto is complicated, often requires going through exchanges, and caries tax implications. It also ignores the social and emotional costs of doing so. But most importantly, it's also false in the more basic sense that when markets crash they crash because there is no buyer for an asset at the previous market rate. So in an MLM scheme, you'll get told that it's risk-free because the company will just buy back any product that you can't sell. Inevitably, you find out that there are some major caveats attached to that, and you'll be stuck with product you can't sell. With Bitcoin, you'll get told that you can just convert your crypto assets back to traditional money at the same price (or even at a higher price, as npoc suggests, get in early enough and who cares if the market goes down, you'll still win). This ignores the fact that observably, when Bitcoin last crashed, a whole lot of people were stuck having bought coins that were worth less than they bought them for. The FOMO argument is arguably the most toxic element of the Bitcoin community because it encourages people to invest more than they can lose. If you were around for the last Bitcoin crash you might remember that certain parts of the crytpo social sphere needed to basically start doing suicide interventions for their members. All investment caries risk: all of it. And of course, financial investment into a system does generally decrease objectivity about that system. > you will also have to come to terms with that fact that through your own mistakes you failed to buy bitcoin at prices probably 10x-100x cheaper than they currently are. For the record, if Bitcoin actually succeeded in improving the world, I would be thrilled. I would lose nothing; I'm not hurting for money, and some of us genuinely pay attention to these technologies because we want the world to be a better place, not because we're trying to get rich quick. But once again, this is just FOMO, and I really do think it's the most toxic part of the community, and it's the part that I honestly think irritates me the most because I literally watched people online contemplate suicide after the last Bitcoin crash and I think it's extremely gross to pull people into that system using FOMO without adequately explaining the risks or the extreme financial interest that Bitcoin proponents have in pulling in late adaptors in order to increase the value of their own coins and justify their earlier investments. ---- So, that out of the way: > Almost, but proof of work doesn't prove anything other than work. This is like saying that cryptographic signature validation doesn't prove anything other than that the signature is valid. It's an oversimplification of why the system exists and what it's used for. You have this basically backwards, miners do validate transactions in every sense that matters. The fact is that multiple valid blocks can be appended to the blockchain at any given time. Mining and proof of work is how the network decides which of those blocks will be "canonical". You move on to talk about governmental decisions and code changes within Bitcoin, but that is an orthogonal concept to what I'm talking about, which is this: that the energy expenditure of Bitcoin is how the network secures itself, not a conversion of electrical energy into value or a byproduct of a separate process. It is used for security and validation of transactions. If this was not the case, the blockchain would not need to be distributed in the first place. But it does, because it uses proof of work to validate transactions. > So I agree on the fundamental point of "the network outspends your attack". But I don't agree that this makes it inefficient I understand that under your definition of inefficiency that you might choose to use a different word, and honestly, if you want to, fine. I don't really care that much, I understand you are pushing back against whether that energy expenditure is worthwhile. What I mean is that the expenditure is not being used for anything except as a barrier of entry to network attacks. It is a set of arbitrary calculations that are designed first and foremost to be incredibly difficult to do, not to solve some complicated problem. It is designed to "waste" CPU time (or nowadays, GPU time). Most people would call that a deliberate inefficiency, in the same way that we would say that peacocks growing large tails that decrease their survival chances in order to attract mates is a "deliberate" inefficiency -- it is worthwhile for the peacock to do, but it is also a system that is not in itself useful, but where the inefficiency itself serves as either a signaling mechanism or a barrier to prevent other actors from competing (in Bitcoin's case, to prevent bad actors from double-spending). I agree that my usage of the word is orthogonal to whether that deliberate inefficiency is worth tolerating, but regardless of whether you'd use a different word than "inefficiency", this is still an important point to understand because it helps us understand that the energy expenditure in Bitcoin is not going away and would in fact need to drastically increase if it ever became a universal global financial market, and in fact is incompatible with goals of cheap or universal access to abundant power or minimization of energy waste -- the security of the network depends on that outcome not happening. And that is the primary environmental objection to Bitcoin. That it by design is impossible to secure without using so much electricity and compute power that they become scarce resources that cannot be accessed or used on a scale by an attacker to overwhelm the network and double-spend. ---- I want to avoid getting bogged down in definitions because a common rhetorical tactic from Bitcoin advocates that I've seen online is to go deep into specific terminology as a way to distract from the overall points of the conversation. As an example of where this kind of argument over definition can be a problem: I could say, strictly speaking, your statement ("Miners don't validate the transactions ($100 nodes people can run at home do that)") is technically just wrong even under your own definitions. Miners do validate blocks, that's part of the mining process -- they have to do some validation in order to know whether or not they're being handed a valid blockchain to mine on. So if we wanted to get really technical and nitpick, even under the lightest most minimal definition of validation miners are doing many of the same validation computations that the $100 nodes do, just they're doing other stuff in addition and at a larger scale. But honestly, I think we both would agree that the above paragraph is unnecessary quibbling, and I think it would be disingenuous and unhelpful for me to argue that technicality. I know you didn't actually mean that miners literally don't run any validation code at all. It's not a gotcha for me to bring that up that they do. You meant something larger about the mining process and its purpose and the role of PoW in the network. And that is the main thing I'm taking issue with, not individual words or definitions. My reading of your comment is that you describe mining essentially as a method of converting "waste energy" (a thing that largely does not exist at the scale Bitcoin operates) into some kind of value. But in fact, mining is a security measure, it is not a conversion of energy into value, it is a way to secure transactions and to prevent double-spending. That energy expenditure does not drive the price of Bitcoin up. The opposite is true, the price of Bitcoin drives up that energy expenditure, because by design the amount of energy spent necessarily needs to be high enough to make 51% attacks unprofitable. That energy expenditure also does not go down if the coin price stays steady. Energy continues to be spent in perpetuity in order to continue to secure the network and to prevent double-spend attacks. And that energy expenditure is the most important part of the Bitcoin design. Satashi does not spend the majority of their whitepaper talking about the specific rules of validation, they leave that as an afterthought, suggesting that those problems are trivial. Satashi instead spends the majority of their whitepaper talking about proof of work as a system for providing distributed, trustless validation of transactions without a central authority. It's through that lens that we should understand and think about mining.