5 ms·

Bitcoin

by rlt 9mo ago

Bitcoin

krupan 9mo ago
People downvote this but Bitcoin has some very nice properties: - easy to verify/impossible to forge (as opposed to gold and paper currency) - fixed supply (as opposed to paper currency, oil, and even gold) - easy to transfer from one party to another (as opposed to gold, oil, and physical cash)
- adamc 9mo ago
  Suffers from no government having a stake in it. If it causes them problems, it can easily become illegal.
  - RealityVoid 9mo ago
    Precisely this makes it attractive. If it can't be _your_ currency let it at least be a currency no other nation controls.
    - JumpCrisscross 9mo ago
      > If it can't be _your_ currency let it at least be a currency no other nation controls At that point just hoard resources. Holding a bunch of Bitcoin in a crisis is useless for a country if no other country will buy them off you in exchange for tradeable hard currency.
      - RealityVoid 9mo ago
        You are right. My point is that if you have international trade of even mild complexity, having a currency is very convenient so trade will end up being denominated in one. No reason it can't be some crypto that is not backed by any nation.
        JumpCrisscross 9mo ago
        > No reason it can't be some crypto that is not backed by any nation There is a great reason: a state-backed currency should always be accepted by that state. If the world is in crisis, you may wind up stuck with your Bitcoins.
        RealityVoid 9mo ago
        I thought we were talking about World reserve currency here i.e. international trade. I agree that you need the currency to be accepted by the state for good local trade support. But that was not the point.
        JumpCrisscross 9mo ago
        > thought we were talking about World reserve currency here i.e. international trade Yes. If you're a random country, you can use your dollars to buy shit from America. Countries hold reserves for basically two direct reasons: to intervene in FX markes and protect their imports. The latter is the main one. At the end of the day, your ideal reserve composition matches your import portfolio because you want currency you can send to the people who are selling you shit.
        engineer_22 9mo ago
        Is it a conspiracy theory that Bitcoin was developed by the US military as a hedge against US dollar hyperinflation? I've heard that argument made somewhere but maybe it was just a rumor to try to legitimize Bitcoin?
        JumpCrisscross 9mo ago
        > Is it a conspiracy theory that Bitcoin was developed by the US military as a hedge against US dollar hyperinflation? Yes, none of that makes an iota of sense. If a military wants to take inflation into its own hands, it has far-better options. From hoarding to, you know, taking shit.
      - krupan 9mo ago
        "just hoard resources" really has nothing to do with a world currency to replace the dollar, which is what we are talking about here. In a crisis you can't eat dollars, gold, oil, or bitcoin, so yeah, you kinda have a point, but an orthogonal one.
        JumpCrisscross 9mo ago
        > In a crisis you can't eat dollars, gold, oil, or bitcoin But you can easily trade dollars for stuff Americans will sell you. That's the advantage of a national backer. In a crisis, they'll welcome the influx of capital in exchange for goods and services. Precisely what you need it you want to spend it. This is why sanctions fuck up reserve calculations. If, in a crisis, America will sanction you, you might as well have held gold or Bitcoin.
  - krupan 9mo ago
    Lots of countries outlaw other country's currencies. This is nothing unique to Bitcoin when we are talking about a world currency to replace dollars.
  - krupan 9mo ago
    Several countries do now have a stake in Bitcoin. See: https://bitbo.io/treasuries/countries/ https://bitbo.io/treasuries/countries/
- philipwhiuk 9mo ago
  > easy to transfer from one party to another "Let me just set up my P2P connection to the Bitcoin network and pay mining fees and hope a miner validates the block" vs "Here's a bar of gold mate" Sure, real easy
  - RealityVoid 9mo ago
    > "Here's a bar of gold mate" Yeah, super convenient. Well worth it. I'll just go with gold bars on me to the market to buy lettuce.
    - throwaway132448 9mo ago
      Nobody is talking about using Bitcoin or gold for transactions. For which nobody does anyway. The whole discussion is about reserves.
      - RealityVoid 9mo ago
        OP was literally comparing payments in gold and in crypto. For which kind of transactions? I admit, it was unspecified, and it might have read too much into it. By it sure does sound simpler to type some numbers that to cut up pieces of metal.
  - krupan 9mo ago
    OK, how do I know that gold is pure and real? What if you live on the other side of the world and I want to buy that gold from you? And there isn't any "hope" involved in bitcoin transactions. Connecting to the peer to peer network is super simple (way, way easier than creating a brokerage or bank account, and no ID or approval is required). Miners will pick up your transaction (and yes fees will help speed that up, as with any financial transaction) and it will be included in a block. Bitcoin has been doing this non-stop, flawlessly since 2009.
    - nitwit005 9mo ago
      Bitcoin doesn't really solve the trust issue, because it covers half the transaction. If I send you a bunch of bitcoin in exchange for oil, how do I ensure the oil shows up? There are fixes to that problem, of course, but it's not bitcoin itself that's the solution.
- postalrat 9mo ago
  It has at least one fatal flaw: the math it is based on. I feel like it won't be too long before a few major weaknesses are found and bitcoin will lose all security.
  - krupan 9mo ago
    Bitcoin has been running since 2009 with plenty of incentive for hackers to find flaws in it and they haven't found any. It uses standard cryptography that is used by all our computer systems. If a flaw exists it's not just bitcoin that will be damaged but everything we use.
    - direwolf20 9mo ago
      [dead]
- throwaway132448 9mo ago
  It’s dumb because it requires uninterrupted access to an incredibly complex system. The cognitive dissonance of people who see bitcoin as resilient is hilarious.
  - krupan 9mo ago
    It's a peer to peer system that has had 100% uptime since around 2009. I think maybe you have cognitive dissonance?
    - throwaway132448 9mo ago
      Because it’s geopolitically irrelevant, not because it’s robust. Split the user base along geopolitical axes and see how long the consensus algorithm lasts. Gold bars don’t have this problem.
      - krupan 9mo ago
        Huh? Sorry, I don't understand any of what you are saying now.
        shimman 9mo ago
        If a sovereign government declared bitcoin illegal, it becomes illegal. There is nothing unique about any asset to stop this because the rules are all made up and can change anytime.
        hakfoo 9mo ago
        Crypto is arguably among the worst assets for that threat model though. When they called in the physical gold, people could squirrel away their $10 and $20 coins in wallsafes and shoeboxes to trade with trusted partners later. Declaring the coins illegal didn't cause them to disappear from people's hands directly. Crypto doesn't have that physical anchor. If a major world government declared it illegal tomorrow, how would you, as a resident of that country, access the value in your favourite blockchain wallet? Law enforcement could monitor the remnants of the network and trying to trigger transactions is obvious probable cause. That assumes the remnants still function-- they aren't being blocked by DPI/filtering, or just the functional destabilization caused by a large number of participants being unplugged from the network. At best, you'd have to go off-ledger and trade talismans (handing over a document with the private keys for an existing wallet like a bearer instrument and hoping they didn't run off multiple copies, or just trying to keep records of transactions and balances elsewhere and hoping to resynch eventually) This is also why the paper dollar is so important to its reserve-currency status. An enterprising bank in the developing world might say "we offer USD-denominated accounts, all digital, it's 20xx" for customers who don't trust the local currency, but those are a lot easier for the local government to deactivate than a coffee can full of greenbacks buried in their backyard.
- toephu2 9mo ago
  But Bitcoin is backed by nothing. At least the USD is backed by the sole superpower in the world (at the moment).
  - krupan 9mo ago
    What does "backed" mean to you here?
- eigenspace 9mo ago
  Just because frivilous money printing is bad does not mean that a fixed supply is good. A fixed supply is a terrible property to have in a money system. It's very beneficial to have a money supply that can grow or shrink according to demand.
  - krupan 9mo ago
    This is a tough argument to engage with. Define "frivolous" when it comes to money printing. Define beneficial, and define beneficial to whom. Talk about who decides how much money to print. And you said it's beneficial to have the supply grow or shrink. We know "printing more" is how you grow the supply, but how do you shrink the supply?
derangedHorse 9mo ago
Whenever Bitcoin is brought up, the same arguments against it are made by people who are too arrogant to look up credible counterarguments. I've decided to stop bringing it up to the HN crowd since it seems like a magnet for downvotes.

Bitcoin

by rlt 9mo ago

Bitcoin

People downvote this but Bitcoin has some very nice properties: - easy to verify/impossible to forge (as opposed to gold and paper currency) - fixed supply (as opposed to paper currency, oil, and even gold) - easy to transfer from one party to another (as opposed to gold, oil, and physical cash)

adamc 9mo ago
Suffers from no government having a stake in it. If it causes them problems, it can easily become illegal.
- RealityVoid 9mo ago
  Precisely this makes it attractive. If it can't be _your_ currency let it at least be a currency no other nation controls.
  - JumpCrisscross 9mo ago
    > If it can't be _your_ currency let it at least be a currency no other nation controls At that point just hoard resources. Holding a bunch of Bitcoin in a crisis is useless for a country if no other country will buy them off you in exchange for tradeable hard currency.
    - RealityVoid 9mo ago
      You are right. My point is that if you have international trade of even mild complexity, having a currency is very convenient so trade will end up being denominated in one. No reason it can't be some crypto that is not backed by any nation.
      - JumpCrisscross 9mo ago
        > No reason it can't be some crypto that is not backed by any nation There is a great reason: a state-backed currency should always be accepted by that state. If the world is in crisis, you may wind up stuck with your Bitcoins.
        RealityVoid 9mo ago
        I thought we were talking about World reserve currency here i.e. international trade. I agree that you need the currency to be accepted by the state for good local trade support. But that was not the point.
        JumpCrisscross 9mo ago
        > thought we were talking about World reserve currency here i.e. international trade Yes. If you're a random country, you can use your dollars to buy shit from America. Countries hold reserves for basically two direct reasons: to intervene in FX markes and protect their imports. The latter is the main one. At the end of the day, your ideal reserve composition matches your import portfolio because you want currency you can send to the people who are selling you shit.
        engineer_22 9mo ago
        Is it a conspiracy theory that Bitcoin was developed by the US military as a hedge against US dollar hyperinflation? I've heard that argument made somewhere but maybe it was just a rumor to try to legitimize Bitcoin?
        JumpCrisscross 9mo ago
        > Is it a conspiracy theory that Bitcoin was developed by the US military as a hedge against US dollar hyperinflation? Yes, none of that makes an iota of sense. If a military wants to take inflation into its own hands, it has far-better options. From hoarding to, you know, taking shit.
    - krupan 9mo ago
      "just hoard resources" really has nothing to do with a world currency to replace the dollar, which is what we are talking about here. In a crisis you can't eat dollars, gold, oil, or bitcoin, so yeah, you kinda have a point, but an orthogonal one.
      - JumpCrisscross 9mo ago
        > In a crisis you can't eat dollars, gold, oil, or bitcoin But you can easily trade dollars for stuff Americans will sell you. That's the advantage of a national backer. In a crisis, they'll welcome the influx of capital in exchange for goods and services. Precisely what you need it you want to spend it. This is why sanctions fuck up reserve calculations. If, in a crisis, America will sanction you, you might as well have held gold or Bitcoin.
- krupan 9mo ago
  Lots of countries outlaw other country's currencies. This is nothing unique to Bitcoin when we are talking about a world currency to replace dollars.
- krupan 9mo ago
  Several countries do now have a stake in Bitcoin. See: https://bitbo.io/treasuries/countries/ https://bitbo.io/treasuries/countries/
philipwhiuk 9mo ago
> easy to transfer from one party to another "Let me just set up my P2P connection to the Bitcoin network and pay mining fees and hope a miner validates the block" vs "Here's a bar of gold mate" Sure, real easy
- RealityVoid 9mo ago
  > "Here's a bar of gold mate" Yeah, super convenient. Well worth it. I'll just go with gold bars on me to the market to buy lettuce.
  - throwaway132448 9mo ago
    Nobody is talking about using Bitcoin or gold for transactions. For which nobody does anyway. The whole discussion is about reserves.
    - RealityVoid 9mo ago
      OP was literally comparing payments in gold and in crypto. For which kind of transactions? I admit, it was unspecified, and it might have read too much into it. By it sure does sound simpler to type some numbers that to cut up pieces of metal.
- krupan 9mo ago
  OK, how do I know that gold is pure and real? What if you live on the other side of the world and I want to buy that gold from you? And there isn't any "hope" involved in bitcoin transactions. Connecting to the peer to peer network is super simple (way, way easier than creating a brokerage or bank account, and no ID or approval is required). Miners will pick up your transaction (and yes fees will help speed that up, as with any financial transaction) and it will be included in a block. Bitcoin has been doing this non-stop, flawlessly since 2009.
  - nitwit005 9mo ago
    Bitcoin doesn't really solve the trust issue, because it covers half the transaction. If I send you a bunch of bitcoin in exchange for oil, how do I ensure the oil shows up? There are fixes to that problem, of course, but it's not bitcoin itself that's the solution.
postalrat 9mo ago
It has at least one fatal flaw: the math it is based on. I feel like it won't be too long before a few major weaknesses are found and bitcoin will lose all security.
- krupan 9mo ago
  Bitcoin has been running since 2009 with plenty of incentive for hackers to find flaws in it and they haven't found any. It uses standard cryptography that is used by all our computer systems. If a flaw exists it's not just bitcoin that will be damaged but everything we use.
  - direwolf20 9mo ago
    [dead]
throwaway132448 9mo ago
It’s dumb because it requires uninterrupted access to an incredibly complex system. The cognitive dissonance of people who see bitcoin as resilient is hilarious.
- krupan 9mo ago
  It's a peer to peer system that has had 100% uptime since around 2009. I think maybe you have cognitive dissonance?
  - throwaway132448 9mo ago
    Because it’s geopolitically irrelevant, not because it’s robust. Split the user base along geopolitical axes and see how long the consensus algorithm lasts. Gold bars don’t have this problem.
    - krupan 9mo ago
      Huh? Sorry, I don't understand any of what you are saying now.
      - shimman 9mo ago
        If a sovereign government declared bitcoin illegal, it becomes illegal. There is nothing unique about any asset to stop this because the rules are all made up and can change anytime.
        hakfoo 9mo ago
        Crypto is arguably among the worst assets for that threat model though. When they called in the physical gold, people could squirrel away their $10 and $20 coins in wallsafes and shoeboxes to trade with trusted partners later. Declaring the coins illegal didn't cause them to disappear from people's hands directly. Crypto doesn't have that physical anchor. If a major world government declared it illegal tomorrow, how would you, as a resident of that country, access the value in your favourite blockchain wallet? Law enforcement could monitor the remnants of the network and trying to trigger transactions is obvious probable cause. That assumes the remnants still function-- they aren't being blocked by DPI/filtering, or just the functional destabilization caused by a large number of participants being unplugged from the network. At best, you'd have to go off-ledger and trade talismans (handing over a document with the private keys for an existing wallet like a bearer instrument and hoping they didn't run off multiple copies, or just trying to keep records of transactions and balances elsewhere and hoping to resynch eventually) This is also why the paper dollar is so important to its reserve-currency status. An enterprising bank in the developing world might say "we offer USD-denominated accounts, all digital, it's 20xx" for customers who don't trust the local currency, but those are a lot easier for the local government to deactivate than a coffee can full of greenbacks buried in their backyard.
toephu2 9mo ago
But Bitcoin is backed by nothing. At least the USD is backed by the sole superpower in the world (at the moment).
- krupan 9mo ago
  What does "backed" mean to you here?
eigenspace 9mo ago
Just because frivilous money printing is bad does not mean that a fixed supply is good. A fixed supply is a terrible property to have in a money system. It's very beneficial to have a money supply that can grow or shrink according to demand.
- krupan 9mo ago
  This is a tough argument to engage with. Define "frivolous" when it comes to money printing. Define beneficial, and define beneficial to whom. Talk about who decides how much money to print. And you said it's beneficial to have the supply grow or shrink. We know "printing more" is how you grow the supply, but how do you shrink the supply?

derangedHorse 9mo ago

Whenever Bitcoin is brought up, the same arguments against it are made by people who are too arrogant to look up credible counterarguments. I've decided to stop bringing it up to the HN crowd since it seems like a magnet for downvotes.