Bitcoin is long dead; the blockchain - not so much, but it won't survive in its present form as it's highly inefficient.
Bitcoin Is Dead, Long Live Bitcoin
91–100 of 199 posts
Re: Bitcoin Is Dead, Long Live Bitcoin
#92Back 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…
> 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.
No state or political entity will EVER support en masse a currency that it does not control and/or is NOT backed by another state with larger economy!
In Sept 16 1992 the BoE withdraw the Pound from the ERM as a precaution after the most fierce attack the BGP ever received. The cost was ~ 3-5 Billion pounds. The GBP came out wounded, but it came out in one piece because the government had a say. Millions of people in the UK lost money indirectly, but the government was able to minimize the losses. Now imagine if the UK that day had the bitcoin, what would you have them do, block ISP traffic? How would you explain what happened to the population?!
Using BTC as a state currency is not just anti-democratic, it is pure insanity.
Re: Bitcoin Is Dead, Long Live Bitcoin
#93I have never understood the bitcoin protocol very well, and I did not have time to read the entire posted article and its linked supporting pieces. That said, I did pick up that one of the major issues is that a few miners in China control a huge portion of the hash power and have an incentive not to allow growth. Given that computing power is so affordable, is it really not possible for some competing group to decide to save the protocol by creating some large resource pools? In other words, can miners not be evicted once in control?
Re: Bitcoin Is Dead, Long Live Bitcoin
#94Earlier quoted context omitted.
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.
Just being pedantic here :) Banks are fractional reserve because at any given time they don't have enough cash to pay demand deposits but that's because they've lent that money out. So while banks don't have cash they do have _assets_ that could be sold or borrowed against to fulfill deposits. If I have an uninsured, full reserve bank and somebody steals half the deposits I don't become fractional reserve, I become _…
Thanks for the pedantry, I just updated my comment to indicate that they were insolvent. I definitely used the wrong word there.
Re: Bitcoin Is Dead, Long Live Bitcoin
#95Earlier 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.
>I'm surprised you think the biggest problem is the statelessness of Bitcoin. In fact it's the opposite I think that's its biggest strength. If no one else sees it that way however, then it will not live up to it's potential because there is no reason for them to move over to it. Adopting bitcoin is a political decision because money is as equally political as it is economic. It's super complex because the vast major…
I can understand your argument that it might be a strength of the idea behind Bitcoin (I personally disagree), but I believe it becomes a clear weakness because it is such an impediment to wide scale adoption. A system can have a great theory behind it, but it is nothing more than a good thought experiment if a real world implementation is impossible
Re: Bitcoin Is Dead, Long Live Bitcoin
#96Earlier quoted context omitted.
Yes. I love the tyranny of structurelessness and reference it frequently. Also, just to compound things - this gets even worse and more magnified with investments from VC's etc... which already have outsized power. Now they become the de-facto power holders in a sovereign currency. Talk about disruptive technology.
Well, do you honestly believe that VCs have even a fraction of the power that Wall Street does?
I think it's a false distinction. Institutional capital, distinct from Angel money, is part of the same ecosystem.
VC's are part of the larger global equity market, taking funds from LP's such as pension funds in the same way that Goldman and the rest do. The fact that they are smaller in total dollars doesn't mean they have structurally different goals.
At the end of the day a VC has to show returns to the LP in the same way that Wall street does with their private equity departments.
In the case of public companies, the company itself has the power over pricing as long as they are doing well (see: Amazon) when they aren't it's private equity that makes the difference and you are back to where you started.
Re: Bitcoin Is Dead, Long Live Bitcoin
#97This is interesting to me because it presents the blockchain size dispute in a way that seems much more sympathetic to the "no, we shouldn't increase the blockchain size" crowd than Mike Hearn's essay. Is it really true that the people who are objecting to increasing the blockchain size see Bitcoin turning into a reserve "currency" to hold wealth instead of a liquid currency used to make real time transactions? Is th…
The people who would very likely sway a decision on the block size are currently opposed to increasing the block size because (1) there is no immediate need to do so and (2) there is risk that there can be unintended consequences (one of which is making the network more centralized).
Some people, including Hearn (who is more vitriolic than the average) believe that #1 is false and #2 is a necessary risk.
If you are coming at this from reading Hearn's words, you are coming at this from an extreme perspective that would be balanced by reading Gregory Maxwell's words. I recommend http://www.truthcoin.info/blog/blocksize-conversation/ for a critical, outside and rational perspective.
Re: Bitcoin Is Dead, Long Live Bitcoin
#98The 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…
That's a really great point.
I suppose what I meant was mainly regarding the current issues going on in the bitcoin community- as you say, with any investment discussion of problems can lower the value. And it just so happens that we are in a situation today where the people most heavily invested in it financially have the power to censor any discussion of problems with bitcoins.
Re: Bitcoin Is Dead, Long Live Bitcoin
#99Earlier 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.
>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. Why is active, central, management necessary? >The biggest economic problem to me has always been an unintelligent control of the money supply. The Bitcoin paper [0] lays down the rules of control and many have been able to follow it; In what way is…
Because it ignores the velocity of money and total amount of transactions.
If the USA suddenly adopted bitcoin as the official currency, you would see insane deflation. If people stopped using bitcoin as much, you'd see strong inflation.
Central banks manipulate money supply to keep prices steady.
That's why I can sign a loan for a house in dollars. But you would be insane to sign a loan for a house in bitcoin. The federal reserve will keep inflation from 0-2%. We can count on it. Bitcoin who knows.
Re: Bitcoin Is Dead, Long Live Bitcoin
#100Bitcoin will one day be known as 'the grandaddy of them all' just like the Rose Bowl. Bitcoin suffers from centralization, the very thing it was designed to circumvent The Bitcoin cultist are emotionally wrapped up with the idea that it has to be everything for everyone. Money has a way of making us emotional.
Bitcoin has to be a payment machine for payment processors, It has to be a store of wealth for investors, It has to be a currency for libertarians. It is so caught up in trying to be everything that it does none well. Bitcoin developers dont be afraid to go your own way. They should branch out into new areas and create new coins, applications and opportunities. Why does it have to be Bitcoin or bust. Proponents attack new ideas. They wake up at night in terror that something new might emerge that meet needs in better ways. What would the Stockmarket be like if there was but one issue to trade. It is no wonder that Bitcoin companies struggle to make money. The market is being restrained from growing by those that seek to control the golden goose and make certain that there is no other options. Yes, new things are coming and new financial markets will come into being whether Bitcoin changes its protocol or not. Centralization leads to waste fraud and abuse even with the best of intentions Bitcoin