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Without an exchange your bitcoin is not a liquid asset, it's even less liquid than most commodity for which there are digital exchange marketplace. You can sell

Without an exchange your bitcoin is not a liquid asset, it's even less liquid than most commodity for which there are digital exchange marketplace. You can sell it over the counter, but that makes it an asset comparable to real estate in terms of liquidity. The fact that the pools haven't intervene until now doesn't change the fact that they can definitely do it, and would if pressured by governments. Economic sanctions using the US dollar weren't a thing until they were. And you only need to have leverage against 50% of the mining power to make that happen, which is pretty straightforward given how centralized the power structure of bitcoin is (although less centralized than for most crypto, for which the developer has full control).

kragen 1y ago
The other day I walked up to a newsstand and asked the newsguy if he wanted to buy US$100 of Bitcoin. He said sure, checked the price, did some calculations on his cellphone, and proposed an amount including a commission for him. I agreed, scanned his QR code on my phone, and posted my transaction to the network. I walked to a nearby shopping mall to pee, and then saw that the transaction was confirmed. I walked back to the newsstand. He handed me a US$100 bill. I didn't sign anything, make any appointments, buy any insurance, walk into any offices, present any identification, or even tell the guy my name. The total time involved was about 20 minutes, but only because I wasn't using Lightning. I had a similarly informal and short, but more argumentative, experience with the previous transaction, at a winery whose owner loudly insisted that he hadn't received the money... until he realized he was checking the wrong phone. You are so full of shit comparing this to a real estate transaction that I am at a loss for words. You're about as full of shit as the winery guy. He, too, was blathering all sorts of nonsense at me about Bitcoin that showed he didn't have the faintest idea what he was talking about. The scenario you're talking about is a 51% attack where big mining pools collude to ensure that nobody else can ever mine a block (because it might allow the laundering of tainted coins). That would be a global and extremely obvious disaster for the Bitcoin network, and it would be remedied by whatever measures were necessary to end the attack, possibly including a hard fork or strategic bombing. Remember that the world's investor class now has 2 trillion dollars tied up in Bitcoin, and they do not want to see it collapse, and such a successful attack would greatly undercut investor confidence in the value of the asset. The Bitcoin crowd has enough pull that they extracted a pardon for Ross Ulbricht and got a friendly SEC head this year. Even before that, when one or another pool would grow to the point where it might be able to mount a 51% attack, it would get hit by DDoS attacks to bring it down. You're comparing that to a bank declining a credit card transaction because you're in another city. Governments have been pressuring Bitcoin miners for over 15 years; it's outright illegal in many countries. The hashrate dropped by more than half when the PRC outlawed Bitcoin mining. The effect on the functioning of the network has been pretty much undetectable.
- Imustaskforhelp 1y ago
  See people like you are the reason why I wouldn't even want to ever invest in bitcoin because atleast you, are so full of yourself that you called someone full of shit just because he said that bitcoin is highly illiquid which is true. Your personal experience may be different and we are willing to hear it but don't treat it as the final truth. I am pretty sure that it was damn awkward asking. Here I am in my country where I don't even ask for UPI payments to cash because its sometimes awkward and this guy is loading bitcoin of all things and saying its liquid lmaoo and like if it wasn't awkward. Saying truth cut you so bad that you had to bad mouth the other person for the sake of it. Grow up at this point, man. This is highly against everything the ethos of hacker-news stands for.
  - kragen 1y ago
    I hope your social anxiety problems improve, but I can assure you I don't share them, as you have assumed I do. It sounds like you also might not understand what the word "liquidity" means in a financial context. What "cuts" me is not people uttering uncomfortable truths but people confidently spewing total bullshit with evidently no concern for its truth-value or even verisimilitude. It's even worse when it seems to be motivated by partisan struggle, as in this case. Both confident bullshit and partisan struggle are enormously corrosive to the collective epistemic endeavor.
- wqaatwt 1y ago
  > He handed me a US$100 bill. Seems like an extremely inconvenient process and it’s unlikely you’d easily find that many people to agree to this unless without a significant premium (>5-10%). Also $100 is not a lot.
  - kragen 1y ago
    I can't imagine what process of transferring cash could be less inconvenient than someone handing me a small piece of paper? And the commission was less than 5%. The fact that it wasn't a lot is precisely why this is a good example of Bitcoin being more liquid than real estate. You can't sell US$100 of real estate, not even here in Argentina.

kragen 1y ago

The other day I walked up to a newsstand and asked the newsguy if he wanted to buy US$100 of Bitcoin. He said sure, checked the price, did some calculations on his cellphone, and proposed an amount including a commission for him. I agreed, scanned his QR code on my phone, and posted my transaction to the network. I walked to a nearby shopping mall to pee, and then saw that the transaction was confirmed. I walked back to the newsstand. He handed me a US$100 bill. I didn't sign anything, make any appointments, buy any insurance, walk into any offices, present any identification, or even tell the guy my name. The total time involved was about 20 minutes, but only because I wasn't using Lightning. I had a similarly informal and short, but more argumentative, experience with the previous transaction, at a winery whose owner loudly insisted that he hadn't received the money... until he realized he was checking the wrong phone. You are so full of shit comparing this to a real estate transaction that I am at a loss for words. You're about as full of shit as the winery guy. He, too, was blathering all sorts of nonsense at me about Bitcoin that showed he didn't have the faintest idea what he was talking about. The scenario you're talking about is a 51% attack where big mining pools collude to ensure that nobody else can ever mine a block (because it might allow the laundering of tainted coins). That would be a global and extremely obvious disaster for the Bitcoin network, and it would be remedied by whatever measures were necessary to end the attack, possibly including a hard fork or strategic bombing. Remember that the world's investor class now has 2 trillion dollars tied up in Bitcoin, and they do not want to see it collapse, and such a successful attack would greatly undercut investor confidence in the value of the asset. The Bitcoin crowd has enough pull that they extracted a pardon for Ross Ulbricht and got a friendly SEC head this year. Even before that, when one or another pool would grow to the point where it might be able to mount a 51% attack, it would get hit by DDoS attacks to bring it down. You're comparing that to a bank declining a credit card transaction because you're in another city. Governments have been pressuring Bitcoin miners for over 15 years; it's outright illegal in many countries. The hashrate dropped by more than half when the PRC outlawed Bitcoin mining. The effect on the functioning of the network has been pretty much undetectable.

Imustaskforhelp 1y ago
See people like you are the reason why I wouldn't even want to ever invest in bitcoin because atleast you, are so full of yourself that you called someone full of shit just because he said that bitcoin is highly illiquid which is true. Your personal experience may be different and we are willing to hear it but don't treat it as the final truth. I am pretty sure that it was damn awkward asking. Here I am in my country where I don't even ask for UPI payments to cash because its sometimes awkward and this guy is loading bitcoin of all things and saying its liquid lmaoo and like if it wasn't awkward. Saying truth cut you so bad that you had to bad mouth the other person for the sake of it. Grow up at this point, man. This is highly against everything the ethos of hacker-news stands for.
- kragen 1y ago
  I hope your social anxiety problems improve, but I can assure you I don't share them, as you have assumed I do. It sounds like you also might not understand what the word "liquidity" means in a financial context. What "cuts" me is not people uttering uncomfortable truths but people confidently spewing total bullshit with evidently no concern for its truth-value or even verisimilitude. It's even worse when it seems to be motivated by partisan struggle, as in this case. Both confident bullshit and partisan struggle are enormously corrosive to the collective epistemic endeavor.
wqaatwt 1y ago
> He handed me a US$100 bill. Seems like an extremely inconvenient process and it’s unlikely you’d easily find that many people to agree to this unless without a significant premium (>5-10%). Also $100 is not a lot.
- kragen 1y ago
  I can't imagine what process of transferring cash could be less inconvenient than someone handing me a small piece of paper? And the commission was less than 5%. The fact that it wasn't a lot is precisely why this is a good example of Bitcoin being more liquid than real estate. You can't sell US$100 of real estate, not even here in Argentina.