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Speculation About The Eventual Death Of Bitcoin

72 points by bascule 11y ago

bencollier49 11y ago
"Will this happen to Bitcoin? I don’t know." Crap title.
Karunamon 11y ago
I flagged this for an awful clickbait headline - the article spends 3/4 of its length explaining how iterative improvements to technology work, and the final 1/4 explaining that, yes, BTC isn't perfect, has some weaknesses, and some other cryptocurrencies do certain things better. In other news, water is wet, the sun rises in the morning, and the "death of bitcoin" has been greatly exaggerated.
- dang 11y ago
  Ok, we changed the title to try to make it more accurate and neutral. We also turned off flagging on this post. The article might be wrong, but it's substantive, and doesn't deserve the death penalty just for its title.
  - JoshTriplett 11y ago
    (HN meta, unrelated to the article.) What's the rough timeline for the user-assisted unflagging plan?
    - dang 11y ago
      Soon! We're working on it. There turn out to be some technical subtleties that we want to get right before deploying.
      - JoshTriplett 11y ago
        Awesome. Any plans to write about those technical subtleties at some point?
        dang 11y ago
        Not really, but only because any time I have for writing is better spent writing code—i.e. better for the community, plus I like writing software more than writing about writing software. To assuage your curiosity, though, the subtleties have to do with trying to make sure the design is consistent with itself and with other parts of HN. There is more than one way to generalize flagging, and some of the ways we tried led either to unwanted behaviors or unwanted complexity. For example: if you vouch (that's the word we're using for anti-flagging, i.e. you vouch for a post if you think it shouldn't have been flagged) for an item and then un-vouch for it, it should go back to its previous state. Posts that were killed by software vs. by user flags have slightly different properties, and the vouch feature needs to preserve those. The way that flagging affects story rank is different from how it affects the life cycle (dead-or-aliveness) of a story, and vouching needs to be consistent with both. When we release this, we'll have a thread about it and can discuss it more if people want to.
- nosuchthing 11y ago
  It seems like the point was that cryptocoins and BTC in particular are heavily influenced by speculation of their "value" and are subject to faith of those who believe in the network. As soon as the market notices a cryptocoin protocol which makes the bitcoin network obsolete, than BTC will evaporate as everyone jumps ship to the next cryptocoin protocol/algorithm/network.
  - wmf 11y ago
    Or maybe the opposite will happen, where people with a vested interest in Bitcoin/BTC will do everything they can to prevent the market from realizing that something better exists. I see people who would rather add trust to Bitcoin than switch to a more efficient system that was designed to take advantage of trust from the beginning.
    - davidgerard 11y ago
      Of course, this already happens. "Bitcoin is limited, 21 million only!" "Altcoins." "You don't need altcoins, we have sidechains! They let you do all that stuff inside Bitcoin!" "Except sidechains don't exist yet." "They will, it'll be fantastic! Sidechains!" (This is leaving aside that altcoins have somehow managed the amazing feat of being even scammier than bitcoins.)
drcode 11y ago
This article confuses a lot of things by never defining what it means for Bitcoin to "die"... Is it possible that the current Bitcoin clients will be replaced by better Bitcoin clients using the same ledger? sure. But would that mean that Bitcoin has "died"? Is it possible that the consensus algo for Bitcoin is replaced by a better one? Conceivably, but would that actually mean Bitcoin has "died"? Is it possible the monetary value currently on the Bitcoin blockchain is shifted to other blockchains? Sure, but if most of the monetary value is preserved, does it really mean anything has "died"?
- astrodust 11y ago
  If you change the blade on an axe, and then later the handle, is it the same axe?
  - GigabyteCoin 11y ago
    If by axe you mean an idea, instead of a tangible object, then yes.
- davidgerard 11y ago
  Bitcoin died in March 2014 with the collapse of Mt Gox. This was a blow it has never recovered from. All since then has been decline as people lose interest. Literally everyone who's bought in the last year is underwater. The fundamentals don't exist; there is no reason for the price to go up and no floor below which it can't go.
  - drcode 11y ago
    I disagree, Bitcoin will not go below $150 at any time in 2015-2017. The upside is a lot more murky and harder to put an estimate on. Can you also supply a concrete estimate? Without a concrete estimate, your skepticism is too vague to be meaningful.
    - davidgerard 11y ago
      The 2015 low point to date is $177; this makes $150 seem really pretty feasible. The slope over the past year has been a downward decay, with the individual drops being sudden and unexpected, with Bitcoin advocates insisting every time that this must be the bottom; they've been consistently wrong over the past year. (Admittedly, I'm mostly looking at /r/bitcoin, which is unusually euphoric even for Bitcoin advocates.) The drop from $500 to $400 to $300 was sudden and unexpected, the drop to $177 was sudden and unexpected. The price recovered (the $177 coincided with the Bitstamp theft, selling those off may have depressed the price), but I don't see how $150 is in any way implausible. The cost of mining 1 BTC is circling 1 BTC (hence the volatility of hashpower of late, with fewer and fewer mining operations able to get cheap enough electricity). It'll be interesting when the mining reward halves in 2016. Just because it will cost more than 1 BTC to mine 1 BTC doesn't hold the price up - look at any altcoin. I don't have a figure for the bottom over 2015-2017, but given the above I find $100 entirely plausible. Everything that applies to altcoins (some of which are worthless or all-but-untraded, which is functionally worthless) also applies to bitcoins, so I don't see why near-zero is inherently implausible. (cheers for getting me to quantify my thoughts :-)
Eleutheria 11y ago
Here are the deficiencies of bitcoin. I know they will be rebutted till exhaustion but they're deficiencies nonetheless. - 20 million - eight decimals - blockchain size - cryptic account ids - QR codes - price instability - latency - privacy - reach The typical responses will be "that's a feature not a bug" "you'll get used to decimals" "qr codes are not that hard" "in a decade everybody will have a petabyte in their phones" "ten minutes is not that long" "who needs privacy if they're not doing anything wrong" "to the moon!" And that's the precise state in which a disrupting technology hits you with your pants down. Blindness.
- nosuchthing 11y ago
  - Massively disproportionate pay outs to early adopters - Incentivized Hording, Speculation
  - TillE 11y ago
    Yes, the mining difficulty curve is a huge problem which prevents many interesting things you could otherwise do with a cryptocurrency. As I've said before, I'm optimistic about cryptocurrencies in general, but Bitcoin is just the awkward start, not the ideal. There are too many problems without obvious solutions.
    - davidgerard 11y ago
      Bitcoin was presented as a first-draft proof of concept. It was intended to be tried out and discarded in favour of something better. Now look at the angst over changing the block size, and never mind all its other deficiencies. (I'm slightly surprised altcoins have been so uninventive.)
- silverpikezero 11y ago
  You forgot the most damaging one: - security It is impossible on a practical basis to secure any significant amount of cryptocurrency. Even the most secure known methods of storage have been compromised [1], and computer security has reached a state which means everything is hackable. Every Bitcoin exchange I can think of has lost some significant amount of coins to hacks. I see no reasonable solution for this problem. [1] http://leaprate.com/2015/02/is-bitcoin-safe-yet-bter-exchange-loses-175-million-in-cold-wallet-hack-ceases-operations-suspends-withdrawals/ http://leaprate.com/2015/02/is-bitcoin-safe-yet-bter-exchang... EDIT: I have always liked your posts on bitcointalk.org
amelius 11y ago
> The rest is history: AC scaled where DC did not, and the polyphase AC electrical system continues to be the primary means of distributing electrical power over long distances. Interestingly, this may become incorrect, [1]. [1] http://en.wikipedia.org/wiki/High-voltage_direct_current http://en.wikipedia.org/wiki/High-voltage_direct_current
- hackcasual 11y ago
  HVDC has been around since the 30's. It's useful in some situations, but has a lot of tradeoffs.
jostmey 11y ago
A major complaint about bitcoin is the wastefulness of mining. But that is precisely what makes bitcoin a commodity. If it were easy to generate bitcoins then people would start printing forgeries. I don't see a way around it.
- DenisM 11y ago
  A currency should be scarce, but scarcity does not have to come at the cost of spending energy. Imagine a coin that's tied to how many push-ups you make each day? That's still scarce, but the side effects are positive, not negative - you get healthier instead of burning more coal.
  - colordrops 11y ago
    > scarcity does not have to come at the cost of spending energy. But it does until there's a better alternative. Currently there is no algorithm or technique that can't be gamed or corrupted other than proof of work.
  - PierreRochard 11y ago
    Sounds like we should change how electricity is produced?
  - joshuapants 11y ago
    You spend energy when you do push-ups. That would also be a fairly easy system to game.
- karmakaze 11y ago
  This aspect is only temporary while they're being minted.
  - Dylan16807 11y ago
    Unless bitcoin collapses there will always be huge amounts of energy wasted on mining, because the miner fees kick in as people compete to have their transactions recorded.
kushti 11y ago
Bitcoin is far away from ideal from tech point of view: 1. Transactions model with multiple inputs/outputs & scripts attached to both sides is heavy(& scripting language had some critical bugs, see Bitcoins' CVE) 2. Bitcoin's proof-of-work is far away from ideal Sybil-resistant anonymous Byzantine Agreement solution as well. 3. Bitcoin is centralized in all aspects. You need to trust ~10 mining parties to join the network, centralization of holding also takes place(early birds/central exchanges), development is highly centralized as well. So eventually it will be replaced with successor(s). After all, even Satoshi thought Bitcoin is experiment, not the final solution to 1000s problems.
Synaesthesia 11y ago
I have wondered mostly about what if there was a global, probably US-led, concerted effort to ban Bitcoin on a governmental level. I also thought if they made it completely illegal, ordinary people really wouldn't want to take that risk. Or potentially ot could have the opposite effect.
- mpyne 11y ago
  Why ban it? At 2.7 transactions per second all a government would need to do would be to flood the one and only centralized Bitcoin blockchain with meaningless transactions. It's hard to pay for your child porn if you can't ever bid up your transaction high enough to be accepted into a mined block, and it wouldn't be expensive at all to accomplish this feat for even a small national government, let alone the U.S.
eruditely 11y ago
Bitcoin is a marked advancement and will go down in the history books as an important event, whether the ecosystem of today will survive is a separate but important question. Bitcoin is forever.
kordless 11y ago
> I don’t want to be entirely grim, despite this post’s title. This isn’t intended to be some “Bitcoin is dying”-style FUD piece. That's EXACTLY what he was going for, and he knows it. Saying you weren't doing something you were doing is just confirmation you were doing it.
GigabyteCoin 11y ago
My hope for the Bitcoin blockchain died a few months ago when I realized that all of the Bitcoin proponents on reddit were laughing at the re-design of an old Bitcoin mining website. One I used to mine on before mining became unprofitable for everybody but a few large-scale miners. "Too little, too late!" they all chanted in unison. "Mining websites are dead!" they all laughed. And then it hit me... The fact that the fair distribution of the coin is dead means that the entire blockchain will die imho. Bitcoin's price really exploded when the mining scene was lucrative for everybody interested in the coin. It tapered off rather quickly once mining became impossible for all but the few. Why would anybody buy into Bitcoin now that one of it's original pomises of decentralized mining has been broken? Why would anybdoy buy into Bitcoin when it means only fattening the pockets of a few (already rich) mining syndicates? I certainly wouldn't, and I was a massive Bitcoin proponent for most of it's life. Many ideas that Bitcoin brought with it will live on, but the Bitcoin blockchain in it's current implementation will "die" sooner rather than later imho. The fact that one can transfer value from point A to point B for next to nothing and without government oversight is amazing. The fact that the majority of Bitcoins that will ever exist are held by a few individuals (and always will be while mining for the layman is dead) is not.
- PierreRochard 11y ago
  Most miners sell their bitcoins to buy more hardware and pay their electricity bills... Why go through the trouble of running a mining rig instead of just buying the coins sold by miners in the market? It is true that the majority of Bitcoins are held by a few early adopters (NB: not today's miners!). They will diversify out as time goes on. Wealth can come from skill, hard work, luck, politicking, etc... Rejecting Bitcoin because it enriches a few people in a manner that you find objectionable is... myopic. Look around you, almost everything you do enriches one capitalist or another. Many intelligent people have tried finding a way around that, with limited to no success. Good luck.
  - GigabyteCoin 11y ago
    >Rejecting Bitcoin because it enriches a few people in a manner that you find objectionable is... myopic. That's not why I think Bitcoin is dead. It's primarily the fact that nobody can mine it anymore, thus nobody will be interested in it. All of my friends who I introduced to Bitcoin (and were fanatics while they were mining) don't even talk about it anymore. They're all just steadily hoarding their coins, not using them for anything, in the hopes of cashing out millions of dollars once all of the later "suckers" come along and buy into the blockchain. It was the "free money" aspect that really sold the idea to most people. Nobody cares about the "exchange money for Bitcoin just because Bitcoin is so much more fluid" aspect.
dperfect 11y ago
Most successful technologies didn't succeed because they are and always were perfect; they succeeded because they were good enough at the right time. Who knows whether or not Bitcoin is past that threshold - time will tell. But I have to wonder: is it really worse than the financial system we use right now? Any argument against the use of Bitcoin is also indirectly arguing that something else is better. What is better in this case? An altcoin? If so, I haven't seen it yet - at least not in a way that puts Bitcoin in inadequate-without-a-doubt territory. Could you really write a bullet-proof case for using our current financial system instead, especially if the roles were switched and we were coming from something Bitcoin-like to a proposal for using fiat currency?
- yc1010 11y ago
  The whole article seems written around "Stellar good, Bitcoin bad" premise, when the author ignores that Stellar is basically Ripple with another name, and we know how that ended up eh
  - skeuomorf 11y ago
    nitpick: While Stellar is a fork of Ripple, they have different consensus protocols underneath. Stellar uses the (Stellar Consensus Protocol) [0] while Ripple uses probabilistic voting. [1] [0] https://www.stellar.org/papers/stellar-consensus-protocol.pdf https://www.stellar.org/papers/stellar-consensus-protocol.pd... [1] https://ripple.com/files/ripple_consensus_whitepaper.pdf https://ripple.com/files/ripple_consensus_whitepaper.pdf
  - itistoday2 11y ago
    > The whole article seems written around "Stellar good, Bitcoin bad" premise Having read the paper and discussed with others, the claim also seems untrue. Stellar's new protocol, Stellar Consensus Protocol (SCP), like Bitcoin, allows forks. Unlike Bitcoin, however, it has no way of resolving them. Further, it seems easier for a fork to occur in SCP than it is in Bitcoin. What this means is that in Bitcoin everyone agrees to what your balance is, but in SCP they will not once a fork occurs. There will, in effect, be multiple Stellars, with no limit to how many. In attempting to make it easier for others to join the verification process, Stellar has actually made their entire protocol less secure than Ripple (which restricts membership and therefore can better prevent such forks). See also Gregory Maxwell's criticisms: https://news.ycombinator.com/item?id=9342348 https://news.ycombinator.com/item?id=9342348
Animats 11y ago
Bitcoin seems to be over. Bitcoin peaked in Google Trends in early 2014, and is now about 1/4 of that level there. So is the price. The few major merchants who started accepting Bitcoin transactions haven't seen much volume. Newegg's site says "Promotion has expired".[1] It's not a technical problem. It's that the use cases for Bitcoin turned out to be drug dealing and evading China's exchange controls. After Bitcoin stopped working for both of those, the bottom fell out of the price. It doesn't help that Bitcoin is a scam magnet. Anonymous, irrevocable money transfer is the con man's dream. Now you can con people who can't get back at you. That feature of Bitcoin has been very popular. Right now, Bitcoin is in "meh" mode. For 2015, so far the price is flat, and volume is flat.[2] The "altcoin" world is in even worse shape. About 2200 different altcoins were created. About 8 of them still have enough market cap that you might be able to sell a reasonable sized block of them. It was amusing while it lasted. [1] http://www.newegg.com/bitcoin http://www.newegg.com/bitcoin [2] https://blockchain.info/charts/n-transactions-excluding-chains-longer-than-10 https://blockchain.info/charts/n-transactions-excluding-chai...
- davidgerard 11y ago
  > evading China's exchange controls. I do see that use case (buy electricity in yuan, sell bitcoins for dollars), and I strongly suspect it's a thing that happened, but I don't have any data on to what degree this was a thing that happened. Would you have any? Cheers :-)
  - Animats 11y ago
    That was what caused the big Bitcoin run-up to $1000 in 2013. For a few months, people in China could buy Bitcoins using funds in yuan, transferred normally through the banking system in China. Then they could sell the Bitcoins for dollars outside China. Then the People's Bank of China (roughly equivalent to the US Fed and the US Treasury as a regulator) forbade that, and stopped all the Bitcoin exchanges in China from connecting to the banking system. For those of you who don't know, China has currency controls - it's difficult to convert yuan to dollars from within mainland China. There are ways around that, such as physically carrying yuan notes to Hong Kong, which is allowed up to some limit. But Chinese can't just do a wire transfer to a bank outside China. Going through Bitcoin, for a brief period, allowed such moves. After the PBC clamped down, it took a while for the Bitcoin community to get over its delusion that the PBC couldn't do that. Then Bitcoin crashed. Bitcoin mining in China may be an extension of that currency movement. From the standpoint of China's financial system, Bitcoin mining looks like an export manufacturing business. That's encouraged. It's OK to make stuff in China, sell it outside China, and keep the currency used to pay for it. Bitcoin mining is inherently limited; only US$800K a day is generated, which is far too little to affect China's exchange rate. So there's been no effort to crack down on that.
yellowapple 11y ago
> If a retailer were to let a customer leave before confirming receipt of a payment, they would be opening themselves up to fraud This is already the case with credit/debit transactions, which can often take upwards of 24 hours to finalize. The 10 minutes required for a Bitcoin transaction to complete mostly deal with peer verification. The actual publication of that to peers is much quicker, and said publication is usually when a retailer would interpret a payment as having been "received". The only way to speed this up further - with either fiat or cryptographic currency - is to distribute it physically. In the case of fiat, this would be cash. In the case of cryptographic, this would be a paper wallet with a verifiable balance and totally-secret private key, not known to even the person who's paying with it (which is feasible, hypothetically, by using a machine that could print paper wallets with the private key obscured by "scratcher" film like what lottery tickets use; said machine, however, would need to be entirely disconnected from any form of telecommunications, generate truly-(pseudo)random (i.e. not pregenerated) keys, and have no means of storing keys on non-volatile memory in order to be trustworthy, however, but all three of these things are possible with today's technology by not including a NIC, using a PNRG (in software or hardware), and using ROM and a RAMdisk exclusively, respectively). Upon receipt, the recipient can either hang onto it as physical currency or "cash it in" by scratching off the concealing film and extracting the funds.
- davidgerard 11y ago
  > The 10 minutes required for a Bitcoin transaction to complete We've been seeing longer and longer transaction times of late, into the hours. > with either fiat This Bitcoin misuse of the term "fiat" is irritating. It means any currency without a physical backing. This includes Bitcoin. In practice, conventional currencies are considerably better-backed than Bitcoin. (This misuse of "fiat" originates in early goldbug pamphlets and was cut'n'pasted into the Bitcoin memetic sphere.)
  - yellowapple 11y ago
    > We've been seeing longer and longer transaction times of late, into the hours. The longest I've seen so far was maybe two hours. That's still 12 times faster than most credit/debit transactions. Now granted, if confirmation time keeps growing like it has been, then yes, the Bitcoin folks will need to figure out some kind of solution (it's not like other cryptocurrencies haven't already found such solutions). Keeping it under 24 hours, however, means it's still on par with expectations for credit/debit transactions, which was my point. > It means any currency without a physical backing. Wikipedia [0] disagrees with you on the definition of fiat: "Fiat money is currency which derives its value from government regulation or law." I'm too lazy right now to go corroborate that with a dictionary. Bitcoin - unlike fiat currencies - isn't based on a government declaring its value. It's much closer to commodity or representative money (the defitions of neither requiring the "commodity" in question to be a physical commodity - just one that's difficult to reproduce, a trait which blockchain entries possess). [0]: https://en.wikipedia.org/wiki/Fiat_money https://en.wikipedia.org/wiki/Fiat_money

72 points by bascule 11y ago

"Will this happen to Bitcoin? I don’t know." Crap title.

I flagged this for an awful clickbait headline - the article spends 3/4 of its length explaining how iterative improvements to technology work, and the final 1/4 explaining that, yes, BTC isn't perfect, has some weaknesses, and some other cryptocurrencies do certain things better. In other news, water is wet, the sun rises in the morning, and the "death of bitcoin" has been greatly exaggerated.

dang 11y ago
Ok, we changed the title to try to make it more accurate and neutral. We also turned off flagging on this post. The article might be wrong, but it's substantive, and doesn't deserve the death penalty just for its title.
- JoshTriplett 11y ago
  (HN meta, unrelated to the article.) What's the rough timeline for the user-assisted unflagging plan?
  - dang 11y ago
    Soon! We're working on it. There turn out to be some technical subtleties that we want to get right before deploying.
    - JoshTriplett 11y ago
      Awesome. Any plans to write about those technical subtleties at some point?
      - dang 11y ago
        Not really, but only because any time I have for writing is better spent writing code—i.e. better for the community, plus I like writing software more than writing about writing software. To assuage your curiosity, though, the subtleties have to do with trying to make sure the design is consistent with itself and with other parts of HN. There is more than one way to generalize flagging, and some of the ways we tried led either to unwanted behaviors or unwanted complexity. For example: if you vouch (that's the word we're using for anti-flagging, i.e. you vouch for a post if you think it shouldn't have been flagged) for an item and then un-vouch for it, it should go back to its previous state. Posts that were killed by software vs. by user flags have slightly different properties, and the vouch feature needs to preserve those. The way that flagging affects story rank is different from how it affects the life cycle (dead-or-aliveness) of a story, and vouching needs to be consistent with both. When we release this, we'll have a thread about it and can discuss it more if people want to.
nosuchthing 11y ago
It seems like the point was that cryptocoins and BTC in particular are heavily influenced by speculation of their "value" and are subject to faith of those who believe in the network. As soon as the market notices a cryptocoin protocol which makes the bitcoin network obsolete, than BTC will evaporate as everyone jumps ship to the next cryptocoin protocol/algorithm/network.
- wmf 11y ago
  Or maybe the opposite will happen, where people with a vested interest in Bitcoin/BTC will do everything they can to prevent the market from realizing that something better exists. I see people who would rather add trust to Bitcoin than switch to a more efficient system that was designed to take advantage of trust from the beginning.
  - davidgerard 11y ago
    Of course, this already happens. "Bitcoin is limited, 21 million only!" "Altcoins." "You don't need altcoins, we have sidechains! They let you do all that stuff inside Bitcoin!" "Except sidechains don't exist yet." "They will, it'll be fantastic! Sidechains!" (This is leaving aside that altcoins have somehow managed the amazing feat of being even scammier than bitcoins.)

drcode 11y ago

This article confuses a lot of things by never defining what it means for Bitcoin to "die"... Is it possible that the current Bitcoin clients will be replaced by better Bitcoin clients using the same ledger? sure. But would that mean that Bitcoin has "died"? Is it possible that the consensus algo for Bitcoin is replaced by a better one? Conceivably, but would that actually mean Bitcoin has "died"? Is it possible the monetary value currently on the Bitcoin blockchain is shifted to other blockchains? Sure, but if most of the monetary value is preserved, does it really mean anything has "died"?

astrodust 11y ago
If you change the blade on an axe, and then later the handle, is it the same axe?
- GigabyteCoin 11y ago
  If by axe you mean an idea, instead of a tangible object, then yes.
davidgerard 11y ago
Bitcoin died in March 2014 with the collapse of Mt Gox. This was a blow it has never recovered from. All since then has been decline as people lose interest. Literally everyone who's bought in the last year is underwater. The fundamentals don't exist; there is no reason for the price to go up and no floor below which it can't go.
- drcode 11y ago
  I disagree, Bitcoin will not go below $150 at any time in 2015-2017. The upside is a lot more murky and harder to put an estimate on. Can you also supply a concrete estimate? Without a concrete estimate, your skepticism is too vague to be meaningful.
  - davidgerard 11y ago
    The 2015 low point to date is $177; this makes $150 seem really pretty feasible. The slope over the past year has been a downward decay, with the individual drops being sudden and unexpected, with Bitcoin advocates insisting every time that this must be the bottom; they've been consistently wrong over the past year. (Admittedly, I'm mostly looking at /r/bitcoin, which is unusually euphoric even for Bitcoin advocates.) The drop from $500 to $400 to $300 was sudden and unexpected, the drop to $177 was sudden and unexpected. The price recovered (the $177 coincided with the Bitstamp theft, selling those off may have depressed the price), but I don't see how $150 is in any way implausible. The cost of mining 1 BTC is circling 1 BTC (hence the volatility of hashpower of late, with fewer and fewer mining operations able to get cheap enough electricity). It'll be interesting when the mining reward halves in 2016. Just because it will cost more than 1 BTC to mine 1 BTC doesn't hold the price up - look at any altcoin. I don't have a figure for the bottom over 2015-2017, but given the above I find $100 entirely plausible. Everything that applies to altcoins (some of which are worthless or all-but-untraded, which is functionally worthless) also applies to bitcoins, so I don't see why near-zero is inherently implausible. (cheers for getting me to quantify my thoughts :-)

Eleutheria 11y ago

Here are the deficiencies of bitcoin. I know they will be rebutted till exhaustion but they're deficiencies nonetheless. - 20 million - eight decimals - blockchain size - cryptic account ids - QR codes - price instability - latency - privacy - reach The typical responses will be "that's a feature not a bug" "you'll get used to decimals" "qr codes are not that hard" "in a decade everybody will have a petabyte in their phones" "ten minutes is not that long" "who needs privacy if they're not doing anything wrong" "to the moon!" And that's the precise state in which a disrupting technology hits you with your pants down. Blindness.

nosuchthing 11y ago
- Massively disproportionate pay outs to early adopters - Incentivized Hording, Speculation
- TillE 11y ago
  Yes, the mining difficulty curve is a huge problem which prevents many interesting things you could otherwise do with a cryptocurrency. As I've said before, I'm optimistic about cryptocurrencies in general, but Bitcoin is just the awkward start, not the ideal. There are too many problems without obvious solutions.
  - davidgerard 11y ago
    Bitcoin was presented as a first-draft proof of concept. It was intended to be tried out and discarded in favour of something better. Now look at the angst over changing the block size, and never mind all its other deficiencies. (I'm slightly surprised altcoins have been so uninventive.)
silverpikezero 11y ago
You forgot the most damaging one: - security It is impossible on a practical basis to secure any significant amount of cryptocurrency. Even the most secure known methods of storage have been compromised [1], and computer security has reached a state which means everything is hackable. Every Bitcoin exchange I can think of has lost some significant amount of coins to hacks. I see no reasonable solution for this problem. [1] http://leaprate.com/2015/02/is-bitcoin-safe-yet-bter-exchange-loses-175-million-in-cold-wallet-hack-ceases-operations-suspends-withdrawals/ http://leaprate.com/2015/02/is-bitcoin-safe-yet-bter-exchang... EDIT: I have always liked your posts on bitcointalk.org

amelius 11y ago

> The rest is history: AC scaled where DC did not, and the polyphase AC electrical system continues to be the primary means of distributing electrical power over long distances. Interestingly, this may become incorrect, [1]. [1] http://en.wikipedia.org/wiki/High-voltage_direct_current http://en.wikipedia.org/wiki/High-voltage_direct_current

hackcasual 11y ago
HVDC has been around since the 30's. It's useful in some situations, but has a lot of tradeoffs.

jostmey 11y ago

A major complaint about bitcoin is the wastefulness of mining. But that is precisely what makes bitcoin a commodity. If it were easy to generate bitcoins then people would start printing forgeries. I don't see a way around it.

DenisM 11y ago
A currency should be scarce, but scarcity does not have to come at the cost of spending energy. Imagine a coin that's tied to how many push-ups you make each day? That's still scarce, but the side effects are positive, not negative - you get healthier instead of burning more coal.
- colordrops 11y ago
  > scarcity does not have to come at the cost of spending energy. But it does until there's a better alternative. Currently there is no algorithm or technique that can't be gamed or corrupted other than proof of work.
- PierreRochard 11y ago
  Sounds like we should change how electricity is produced?
- joshuapants 11y ago
  You spend energy when you do push-ups. That would also be a fairly easy system to game.
karmakaze 11y ago
This aspect is only temporary while they're being minted.
- Dylan16807 11y ago
  Unless bitcoin collapses there will always be huge amounts of energy wasted on mining, because the miner fees kick in as people compete to have their transactions recorded.

kushti 11y ago

Bitcoin is far away from ideal from tech point of view: 1. Transactions model with multiple inputs/outputs & scripts attached to both sides is heavy(& scripting language had some critical bugs, see Bitcoins' CVE) 2. Bitcoin's proof-of-work is far away from ideal Sybil-resistant anonymous Byzantine Agreement solution as well. 3. Bitcoin is centralized in all aspects. You need to trust ~10 mining parties to join the network, centralization of holding also takes place(early birds/central exchanges), development is highly centralized as well. So eventually it will be replaced with successor(s). After all, even Satoshi thought Bitcoin is experiment, not the final solution to 1000s problems.

Synaesthesia 11y ago

I have wondered mostly about what if there was a global, probably US-led, concerted effort to ban Bitcoin on a governmental level. I also thought if they made it completely illegal, ordinary people really wouldn't want to take that risk. Or potentially ot could have the opposite effect.

mpyne 11y ago
Why ban it? At 2.7 transactions per second all a government would need to do would be to flood the one and only centralized Bitcoin blockchain with meaningless transactions. It's hard to pay for your child porn if you can't ever bid up your transaction high enough to be accepted into a mined block, and it wouldn't be expensive at all to accomplish this feat for even a small national government, let alone the U.S.

eruditely 11y ago

Bitcoin is a marked advancement and will go down in the history books as an important event, whether the ecosystem of today will survive is a separate but important question. Bitcoin is forever.

kordless 11y ago

> I don’t want to be entirely grim, despite this post’s title. This isn’t intended to be some “Bitcoin is dying”-style FUD piece. That's EXACTLY what he was going for, and he knows it. Saying you weren't doing something you were doing is just confirmation you were doing it.

GigabyteCoin 11y ago

My hope for the Bitcoin blockchain died a few months ago when I realized that all of the Bitcoin proponents on reddit were laughing at the re-design of an old Bitcoin mining website. One I used to mine on before mining became unprofitable for everybody but a few large-scale miners. "Too little, too late!" they all chanted in unison. "Mining websites are dead!" they all laughed. And then it hit me... The fact that the fair distribution of the coin is dead means that the entire blockchain will die imho. Bitcoin's price really exploded when the mining scene was lucrative for everybody interested in the coin. It tapered off rather quickly once mining became impossible for all but the few. Why would anybody buy into Bitcoin now that one of it's original pomises of decentralized mining has been broken? Why would anybdoy buy into Bitcoin when it means only fattening the pockets of a few (already rich) mining syndicates? I certainly wouldn't, and I was a massive Bitcoin proponent for most of it's life. Many ideas that Bitcoin brought with it will live on, but the Bitcoin blockchain in it's current implementation will "die" sooner rather than later imho. The fact that one can transfer value from point A to point B for next to nothing and without government oversight is amazing. The fact that the majority of Bitcoins that will ever exist are held by a few individuals (and always will be while mining for the layman is dead) is not.

PierreRochard 11y ago
Most miners sell their bitcoins to buy more hardware and pay their electricity bills... Why go through the trouble of running a mining rig instead of just buying the coins sold by miners in the market? It is true that the majority of Bitcoins are held by a few early adopters (NB: not today's miners!). They will diversify out as time goes on. Wealth can come from skill, hard work, luck, politicking, etc... Rejecting Bitcoin because it enriches a few people in a manner that you find objectionable is... myopic. Look around you, almost everything you do enriches one capitalist or another. Many intelligent people have tried finding a way around that, with limited to no success. Good luck.
- GigabyteCoin 11y ago
  >Rejecting Bitcoin because it enriches a few people in a manner that you find objectionable is... myopic. That's not why I think Bitcoin is dead. It's primarily the fact that nobody can mine it anymore, thus nobody will be interested in it. All of my friends who I introduced to Bitcoin (and were fanatics while they were mining) don't even talk about it anymore. They're all just steadily hoarding their coins, not using them for anything, in the hopes of cashing out millions of dollars once all of the later "suckers" come along and buy into the blockchain. It was the "free money" aspect that really sold the idea to most people. Nobody cares about the "exchange money for Bitcoin just because Bitcoin is so much more fluid" aspect.

dperfect 11y ago

Most successful technologies didn't succeed because they are and always were perfect; they succeeded because they were good enough at the right time. Who knows whether or not Bitcoin is past that threshold - time will tell. But I have to wonder: is it really worse than the financial system we use right now? Any argument against the use of Bitcoin is also indirectly arguing that something else is better. What is better in this case? An altcoin? If so, I haven't seen it yet - at least not in a way that puts Bitcoin in inadequate-without-a-doubt territory. Could you really write a bullet-proof case for using our current financial system instead, especially if the roles were switched and we were coming from something Bitcoin-like to a proposal for using fiat currency?

yc1010 11y ago
The whole article seems written around "Stellar good, Bitcoin bad" premise, when the author ignores that Stellar is basically Ripple with another name, and we know how that ended up eh
- skeuomorf 11y ago
  nitpick: While Stellar is a fork of Ripple, they have different consensus protocols underneath. Stellar uses the (Stellar Consensus Protocol) [0] while Ripple uses probabilistic voting. [1] [0] https://www.stellar.org/papers/stellar-consensus-protocol.pdf https://www.stellar.org/papers/stellar-consensus-protocol.pd... [1] https://ripple.com/files/ripple_consensus_whitepaper.pdf https://ripple.com/files/ripple_consensus_whitepaper.pdf
- itistoday2 11y ago
  > The whole article seems written around "Stellar good, Bitcoin bad" premise Having read the paper and discussed with others, the claim also seems untrue. Stellar's new protocol, Stellar Consensus Protocol (SCP), like Bitcoin, allows forks. Unlike Bitcoin, however, it has no way of resolving them. Further, it seems easier for a fork to occur in SCP than it is in Bitcoin. What this means is that in Bitcoin everyone agrees to what your balance is, but in SCP they will not once a fork occurs. There will, in effect, be multiple Stellars, with no limit to how many. In attempting to make it easier for others to join the verification process, Stellar has actually made their entire protocol less secure than Ripple (which restricts membership and therefore can better prevent such forks). See also Gregory Maxwell's criticisms: https://news.ycombinator.com/item?id=9342348 https://news.ycombinator.com/item?id=9342348

Animats 11y ago

Bitcoin seems to be over. Bitcoin peaked in Google Trends in early 2014, and is now about 1/4 of that level there. So is the price. The few major merchants who started accepting Bitcoin transactions haven't seen much volume. Newegg's site says "Promotion has expired".[1] It's not a technical problem. It's that the use cases for Bitcoin turned out to be drug dealing and evading China's exchange controls. After Bitcoin stopped working for both of those, the bottom fell out of the price. It doesn't help that Bitcoin is a scam magnet. Anonymous, irrevocable money transfer is the con man's dream. Now you can con people who can't get back at you. That feature of Bitcoin has been very popular. Right now, Bitcoin is in "meh" mode. For 2015, so far the price is flat, and volume is flat.[2] The "altcoin" world is in even worse shape. About 2200 different altcoins were created. About 8 of them still have enough market cap that you might be able to sell a reasonable sized block of them. It was amusing while it lasted. [1] http://www.newegg.com/bitcoin http://www.newegg.com/bitcoin [2] https://blockchain.info/charts/n-transactions-excluding-chains-longer-than-10 https://blockchain.info/charts/n-transactions-excluding-chai...

davidgerard 11y ago
> evading China's exchange controls. I do see that use case (buy electricity in yuan, sell bitcoins for dollars), and I strongly suspect it's a thing that happened, but I don't have any data on to what degree this was a thing that happened. Would you have any? Cheers :-)
- Animats 11y ago
  That was what caused the big Bitcoin run-up to $1000 in 2013. For a few months, people in China could buy Bitcoins using funds in yuan, transferred normally through the banking system in China. Then they could sell the Bitcoins for dollars outside China. Then the People's Bank of China (roughly equivalent to the US Fed and the US Treasury as a regulator) forbade that, and stopped all the Bitcoin exchanges in China from connecting to the banking system. For those of you who don't know, China has currency controls - it's difficult to convert yuan to dollars from within mainland China. There are ways around that, such as physically carrying yuan notes to Hong Kong, which is allowed up to some limit. But Chinese can't just do a wire transfer to a bank outside China. Going through Bitcoin, for a brief period, allowed such moves. After the PBC clamped down, it took a while for the Bitcoin community to get over its delusion that the PBC couldn't do that. Then Bitcoin crashed. Bitcoin mining in China may be an extension of that currency movement. From the standpoint of China's financial system, Bitcoin mining looks like an export manufacturing business. That's encouraged. It's OK to make stuff in China, sell it outside China, and keep the currency used to pay for it. Bitcoin mining is inherently limited; only US$800K a day is generated, which is far too little to affect China's exchange rate. So there's been no effort to crack down on that.

yellowapple 11y ago

> If a retailer were to let a customer leave before confirming receipt of a payment, they would be opening themselves up to fraud This is already the case with credit/debit transactions, which can often take upwards of 24 hours to finalize. The 10 minutes required for a Bitcoin transaction to complete mostly deal with peer verification. The actual publication of that to peers is much quicker, and said publication is usually when a retailer would interpret a payment as having been "received". The only way to speed this up further - with either fiat or cryptographic currency - is to distribute it physically. In the case of fiat, this would be cash. In the case of cryptographic, this would be a paper wallet with a verifiable balance and totally-secret private key, not known to even the person who's paying with it (which is feasible, hypothetically, by using a machine that could print paper wallets with the private key obscured by "scratcher" film like what lottery tickets use; said machine, however, would need to be entirely disconnected from any form of telecommunications, generate truly-(pseudo)random (i.e. not pregenerated) keys, and have no means of storing keys on non-volatile memory in order to be trustworthy, however, but all three of these things are possible with today's technology by not including a NIC, using a PNRG (in software or hardware), and using ROM and a RAMdisk exclusively, respectively). Upon receipt, the recipient can either hang onto it as physical currency or "cash it in" by scratching off the concealing film and extracting the funds.

davidgerard 11y ago
> The 10 minutes required for a Bitcoin transaction to complete We've been seeing longer and longer transaction times of late, into the hours. > with either fiat This Bitcoin misuse of the term "fiat" is irritating. It means any currency without a physical backing. This includes Bitcoin. In practice, conventional currencies are considerably better-backed than Bitcoin. (This misuse of "fiat" originates in early goldbug pamphlets and was cut'n'pasted into the Bitcoin memetic sphere.)
- yellowapple 11y ago
  > We've been seeing longer and longer transaction times of late, into the hours. The longest I've seen so far was maybe two hours. That's still 12 times faster than most credit/debit transactions. Now granted, if confirmation time keeps growing like it has been, then yes, the Bitcoin folks will need to figure out some kind of solution (it's not like other cryptocurrencies haven't already found such solutions). Keeping it under 24 hours, however, means it's still on par with expectations for credit/debit transactions, which was my point. > It means any currency without a physical backing. Wikipedia [0] disagrees with you on the definition of fiat: "Fiat money is currency which derives its value from government regulation or law." I'm too lazy right now to go corroborate that with a dictionary. Bitcoin - unlike fiat currencies - isn't based on a government declaring its value. It's much closer to commodity or representative money (the defitions of neither requiring the "commodity" in question to be a physical commodity - just one that's difficult to reproduce, a trait which blockchain entries possess). [0]: https://en.wikipedia.org/wiki/Fiat_money https://en.wikipedia.org/wiki/Fiat_money