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Bitcoin Is Dead, Long Live Bitcoin

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Re: Bitcoin Is Dead, Long Live Bitcoin

#61

Post by droffel »

pavel_lishin wrote: post #32
yc1010 wrote: post #27

Earlier quoted context omitted.

Well there is also Cryptsy fiasco today https://www.reddit.com/r/Bitcoin/comments/411bqw/cryptsy_clo... Bitcoin is a never ending drama rollercoaster but I still use it and I hope eventually some sort of solution is reached

Wait, did they keep the fact that they had over 13,000 BTC stolen for over a year and a half ?

Yup. They were insolvent for a year and a half, and paid out people with pending withdrawals when new people deposited new coins. How people thought it was a good idea to keep using them, I have no idea. There had been warnings about their solvency literally for the past year, starting with permanently "pending" BTC withdrawals, and slowly spreading to not allowing withdrawal of the altcoins on the site.

Re: Bitcoin Is Dead, Long Live Bitcoin

#62

Post by supster »

gavazzy wrote: post #56
slg wrote: post #52

Earlier quoted context omitted.

As someone with an economics background, I'm surprised you think the biggest problem is the statelessness of Bitcoin. The biggest economic problem to me has always been an unintelligent control of the money supply. You can criticize some of the actions that many central banks do to manipulate the economy, but I have a hard time buying the answer to bad management is no management.

It's all about trade-offs. Bitcoin may have trouble competing against a "stable" currency like USD or EUR, but would have a huge benefit over a heavily manipulated one like in Venezuela, where inflation sits at ~60%. If Bitcoin could become stable, then it would offer the freedom of converting wages into a more stable form. A Venezuelan would expect the purchasing power of today's wages to be 4% lower in just one mon…

Exactly, this is why the stateless-ness is such a drawback to adoption. Because Venezuelan gov't knows that its people would prefer to transact in a more stable currency and try to convert from the bolívar to btc. And the gov't will try to do everything in its power to prevent the exchanges from happening.

Re: Bitcoin Is Dead, Long Live Bitcoin

#63

Post by ajross »

mabbo wrote: post #9

The problem with bitcoin, as I see it, is that discussion of problems that may exist can lower the value of bitcoin- whether the problem is real or not. If you're heavily invested emotionally with bitcoins, you need to discuss these problems so that they can be solved. If you're heavily invested financially , you need to make sure no one talks about these problems, at least until you have a plan for how you're not go…

> The problem with bitcoin, as I see it, is that discussion of problems that may exist can lower the value of bitcoin- whether the problem is real or not.

This is a tautology. What you say is true of all investments (which bitcoin does not claim to be, but obviously is in practice), because that's what an investment is: an asset whose value is expected to change over time.

To the extent that bitcoin sees this effect "worse" has nothing to do with its status as an investment and far more to do with its total lack of regulation. An investment run by community consensus works well when there is consensus, and falls apart when there is none.

Re: Bitcoin Is Dead, Long Live Bitcoin

#64

Post by snowwrestler »

AndrewKemendo wrote: post #30

Back in 2009 when I was getting into bitcoin, it was widely described as a "stateless currency" and not just an alternative to Visa or credit cards. Having a background in economics, bitcoin looked to me like a truly revolutionary technology and if it was adopted en masse would change politics forever. The problem however is that a nation's currency is arguably the primary source of it's sovereignty. Whomever control…

> The problem however is that a nation's currency is arguably the primary source of it's sovereignty.

The reverse is also true--any significant currency creates sovereignty by elevating the power of those with the greatest influence over that currency.

In the case of Bitcoin, the "core" developers, in addition to the highest-volume miners, have been elevated to the sovereign position. Rather than a distributed stateless currency (which I would argue is impossible), what Bitcoin has become is a currency whose sovereigns are accidentally selected, poorly organized, and not responsible to its currency users in any direct way.

There is a famous concept called the "tyranny of structurelessness," which says that there are always political structures when groups of humans interact, the question is just whether they are defined or hidden. A "structureless" organization, rather than egalitarian, is governed by a small secret clique that assembles for unknown or possibly trivial reasons. There are no clearly defined procedures for removing or adding sovereigns, or for adjudicating disagreements.

Does this sound like Bitcoin? Based on the articles I've read this week, it does to me.

Edit:

https://en.wikipedia.org/wiki/The_Tyranny_of_Structurelessne...

Re: Bitcoin Is Dead, Long Live Bitcoin

#65

Post by Hupriene »

supster wrote: post #57
slg wrote: post #52

Earlier quoted context omitted.

As someone with an economics background, I'm surprised you think the biggest problem is the statelessness of Bitcoin. The biggest economic problem to me has always been an unintelligent control of the money supply. You can criticize some of the actions that many central banks do to manipulate the economy, but I have a hard time buying the answer to bad management is no management.

The money supply is fixed to 21 million. Fortunately, the coins are basically infinitely divisible, so as the coins become more valuable (assuming over the long run that coins are used for larger and larger amounts of commerce rather than speculation), small transactions simply happen at smaller units. In other words the system is steadily deflationary instead of the highly volatile inflationary system we currently h…

The theoretical maximum money supply is 21 million. The actual amount of money in circulation can still vary wildly as keys to wallets containing bitcoins are lost (resulting in a permanent reduction of the maximum money supply) and as speculators cash out (resulting in a temporary increase in the effective money supply).

Re: Bitcoin Is Dead, Long Live Bitcoin

#66

Post by supster »

aurelius12 wrote: post #60
wmf wrote: post #19

Earlier quoted context omitted.

I would put it in a slightly different way: Everyone wants "Visa" functionality, but there is a debate about whether the solution is a one-layer system where base Bitcoin provides transaction throughput or a two-layer system where transaction throughput is provided by a separate layer on top of Bitcoin.

The trouble is that Visa functionality already exists and it already works really, really well for both consumers and merchants.

The Visa fee of 1-3% is too expensive in the internet era. It made sense 50 years ago when cost of moving information was high, but now it's just rent seeking.

Re: Bitcoin Is Dead, Long Live Bitcoin

#67

Post by the_mitsuhiko »

steve19 wrote: post #47
AndrewKemendo wrote: post #30

Back in 2009 when I was getting into bitcoin, it was widely described as a "stateless currency" and not just an alternative to Visa or credit cards. Having a background in economics, bitcoin looked to me like a truly revolutionary technology and if it was adopted en masse would change politics forever. The problem however is that a nation's currency is arguably the primary source of it's sovereignty. Whomever control…

> nation's currency is arguably the primary source of it's sovereignty Not really. Many countries do not mint their own currency, and other mint currency but peg its value to another. https://en.wikipedia.org/wiki/Currency_substitution What constitutes sovereignty is complex. It mostly comes down either legal recognition of sovereignty (de jure) or physical/guns on the ground control (de facto). https://en.wikipedia.…

A peg can be changed with a moment's notice. You can't do that with a currency you do not issue. This is the dofference between what happened in Switzerland and Greece last year.

Re: Bitcoin Is Dead, Long Live Bitcoin

#68

Post by dragontamer »

supster wrote: post #57
slg wrote: post #52

Earlier quoted context omitted.

As someone with an economics background, I'm surprised you think the biggest problem is the statelessness of Bitcoin. The biggest economic problem to me has always been an unintelligent control of the money supply. You can criticize some of the actions that many central banks do to manipulate the economy, but I have a hard time buying the answer to bad management is no management.

The money supply is fixed to 21 million. Fortunately, the coins are basically infinitely divisible, so as the coins become more valuable (assuming over the long run that coins are used for larger and larger amounts of commerce rather than speculation), small transactions simply happen at smaller units. In other words the system is steadily deflationary instead of the highly volatile inflationary system we currently h…

More importantly however, is the rent-seeking by BTC enthusiasts. BTC hoarders don't "deserve" any more wealth than later adopters, and yet wish to create wealth from nothingness and basically a giant Ponzi scheme.

At least with stocks and companies, the stock actually means something: typically a vote for the board, or access to a dividend.

Re: Bitcoin Is Dead, Long Live Bitcoin

#69

Post by xorcist »

pavel_lishin wrote: post #32
yc1010 wrote: post #27

Earlier quoted context omitted.

Well there is also Cryptsy fiasco today https://www.reddit.com/r/Bitcoin/comments/411bqw/cryptsy_clo... Bitcoin is a never ending drama rollercoaster but I still use it and I hope eventually some sort of solution is reached

Wait, did they keep the fact that they had over 13,000 BTC stolen for over a year and a half ?

The community consensus have long been that Cryptsy are at best incompetent, at worst crooks. They might very well have milked it for all they could get away with.

Re: Bitcoin Is Dead, Long Live Bitcoin

#70

Post by dragontamer »

ajross wrote: post #63
mabbo wrote: post #9

The problem with bitcoin, as I see it, is that discussion of problems that may exist can lower the value of bitcoin- whether the problem is real or not. If you're heavily invested emotionally with bitcoins, you need to discuss these problems so that they can be solved. If you're heavily invested financially , you need to make sure no one talks about these problems, at least until you have a plan for how you're not go…

> The problem with bitcoin, as I see it, is that discussion of problems that may exist can lower the value of bitcoin- whether the problem is real or not. This is a tautology. What you say is true of all investments (which bitcoin does not claim to be, but obviously is in practice), because that's what an investment is: an asset whose value is expected to change over time. To the extent that bitcoin sees this effect…

And companies releasing earning statements can lower the value of company stock.

Which is why the US Government forces public companies to release earning statements. Because discussion is more important than burying your head in the sand and pretending that everything is a-okay.

Until the BTC community can see beyond extremely short-term profit-driven thinking, I think it is fair to call the community as a whole a failure. US Public Companies, and the commercial banking system even, have evolved beyond that.

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