61–70 of 151 posts
Because crypto hasn't proven itself. I won't fight your battles for you. Call me when I can buy coffee at my local diner with crypto.
> It would be interesting to know why the status quo financial system is held in such a high regard? Especially in light of the continual debasement of the dollar since it was decoupled from gold.
Note: a few years ago I worked with a team developing an automated central bank intended to manage a cryptocurrency replacement for the monetary system of a sovereign state. You might note that no country has actually implemented this yet.
The status quo financial system is held in high regard because it works, and has contributed mightily to the prosperity of people at all levels. People mostly concentrate on its problems, which is good: those problems need work. But we have plenty of experience of the gold standard and its significantly worse problems. One of the points of today's cryptocurrencies is that they should behave like gold.
Long before bitcoin (or even before Chaum's work) smart people did "going back to the gold standard" analysis in the hope of justifying it. I've read papers on the costs and consequences of warehousing gold, for example. So people have really thought it through...and it sucks.
At a macro level we need simply look back at history. We have financial crashes from time to time, which is used as an argument for gold. But look at the period from the 1840s to WWI. They were wracked by both inflationary spikes (due to gold strikes in California, the Yukon, Victoria, etc) and deflationary depressions (when their economies outgrew the gold supply).
The asset base of a modern economy is much greater than the world's gold supply and anyway grows much faster than that supply becomes accessible. If your money supply can't grow in proportion to the asset base it represents, you can't possibly monetize your assets, which impoverishes everyone, even the wealthy.
And to make things worse there's an absolute amount of tokens like bitcoin. Though you can trade fractional coins, there's a floor at which the cost of validating the transaction exceeds the denomination. So for it not to be a destructive deflationary medium you need...different currencies alongside it, which in the end just means...fiat currency.
And that's simply a taste of the problems at the macro level.
Because crypto hasn't proven itself. I won't fight your battles for you. Call me when I can buy coffee at my local diner with crypto.
Get a Coinbase card and load it with 5 USDC. Go to your diner and buy your coffee with no conversion fee. What's the difference between this and the diner actually accepting crypto?
Earlier quoted context omitted.
The key is that they can look at the ledger, but not alter the ledger. But also privacy improvements to the bitcoin protocol, privacy focused transactions like coinjoins, and payments on the lightning network help hide that even more.
They can look at the ledger, and show up to your house, take ownership of your house and put you in jail.
They can show up to your house and shoot you.
Censorship-resistance is not an all-or-nothing game, but a gradual refinement.
If you want something where they can't just look at the ledger, look at Zcash:
There are countries with totalitarian governments where you can still make private transactions, as long as you don't get too loud about it. And there are countries where any financial transaction will put your family in labor camp for three generations. Some fancy bits on the internet won't help anyone in a rut like that. Doesn't make them useless.
Earlier quoted context omitted.
I think it's more that it's delivering in a practical way to people that live in authoritarian governments with currencies that are more unstable than bitcoin. In places where the citizens have to deal with their governments literally trying to steal their hard assets. For those of us who live in countries with a good banking system and mostly stable currencies (which is most of hn), bitcoin isn't a necessity.
It seems Canada matches the 'good banking system' and 'stable currency' attributes, yet didn't the truckers get robbed by the government? When a government is able to engage in financial retribution against its critics, its own citizenry, Bitcoin might be necessary.
Earlier quoted context omitted.
"It is clear that inflation is bad for the citizenry." No. It is clear that both hyper-inflation and deflation are bad for the citizenry. However, modest inflation is generally a net positive. "yet [inflation] has been done throughout the ages by every dying civilization." Do you have any real data for this? Sounds like bullshit to me. Also, it seems preferable that government be in control of the currency rather tha…
Roman Empire is a biggie. The Weimar Republic is the most obvious. I guess we are now arguing 'Austrian Economics' vs. 'Keynesian Economics'... This is a fair simplification. As long as you hold real assets to protect your wealth, the government's debasement of the currency (modest inflation) is of no concern. Clearly, when a person lives from paycheck to paycheck the only concern is "Can I buy food next week?" and "…
If it becomes a reserve currency governments and the very wealthy will still hold the vast majority and thus maintain control right?
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How do you know the tor exit nodes and/or VPN aren't being ran by your authoritarian government?
You don't, but all of this makes it harder to track. Even if the government can track you through all of this, you can setup your private keys in a way that your family can still access your money if the government arrests you.
There are two major issues with Bitcoin for me. First, crypto is always broken eventually. We have seen the deprecation of crypto algorithms time and again. Why should we assume Bitcoin is immune to this phenomenon? It's a high-value target and it could literally become valueless in an instant. Second, the changing climate is one of the most pressing matters of our time. Bitcoin is absolutely not helping there.
The concern regarding the underlying crypto being broken unexpectedly is probably covered by the fact that if encryption of that level of adoption and trust was broken, Bitcoin breaking would be the least of the internet's issues. For expected deprecations as technology progresses, it should be relatively easy to change algorithms and then fork the blockchain onto the new system, simultaneously phasing out the curren…
Like deprecating insecure and outdated TLS? Doesn’t seem like a good example.
It’s really not the same level of vulnerability. A crypto failure that allows for reading or altering of communications in-flight as it’s used in TLS now has a significantly different impact than if someone is able to alter the source of truth.
As someone who thinks that bitcoin etc are just a techy form of alchemy (the old dream of creating something of value from nothing), if not an outright scam (for anti-social losers to escape from 'teh rulez'), I wouldn't say that it's not so much that I hold the existing order in high regard, but that the alleged 'disruption' does not appear to be anything other than an old ruse in a new guise.
I'm not sure what you mean by the 'old ruse'. The use of gold in ancient times was adopted because it removed the need to trust the other guy's currency. Unless Satoshi shows up tomorrow and cashes out his coin I think we are not in danger of diluting the value of Bitcoin - which would be like the 'old ruse' I think.
Earlier quoted context omitted.
"It is clear that inflation is bad for the citizenry." No. It is clear that both hyper-inflation and deflation are bad for the citizenry. However, modest inflation is generally a net positive. "yet [inflation] has been done throughout the ages by every dying civilization." Do you have any real data for this? Sounds like bullshit to me. Also, it seems preferable that government be in control of the currency rather tha…
Roman Empire is a biggie. The Weimar Republic is the most obvious. I guess we are now arguing 'Austrian Economics' vs. 'Keynesian Economics'... This is a fair simplification. As long as you hold real assets to protect your wealth, the government's debasement of the currency (modest inflation) is of no concern. Clearly, when a person lives from paycheck to paycheck the only concern is "Can I buy food next week?" and "…