Dogecoin's inventor looks to the past for insight into the future • Hacker News Board

Re: Dogecoin's inventor looks to the past for insight into the future

#131

Post by moretai » Fri, Jan 12, 2018, 6:43 PM UTC

usrusr wrote: post #98

throwaway30yo wrote: post #25

DOGE is a pretty good currency to use for moving money between exchanges. That is why its used. If BTC had low/no transaction fees and was fast, people would have less incentive to use DOGE. Overvalued? Its possible but I think the entire crypto market is actually insanely undervalued. I was talking to my financial advisor the other day and he said pretty much 100% of people now are asking him about crypto and are co…

> I was talking to my financial advisor the other day and he said pretty much 100% of people now are asking him about crypto and are considering putting money in. 100% of those are not interested in cryptocurrency at all, they are interested in anything that goes from bottom left to top right if charted against their local denomination. They don't want crypto, they want fiat and see crypto merely as a possible means…

That's incredible. What if they don't know where to start? This is the same mentality as "hackers hack, they don't ask if they are hackers".

Re: Dogecoin's inventor looks to the past for insight into the future

#132

Post by ska » Fri, Jan 12, 2018, 6:43 PM UTC

splintercell wrote: post #119

Certhas wrote: post #109

Earlier quoted context omitted.

Bitcoin - Because the problem with global finance is too much regulation. It baffles me how seemingly capable people have had the idea that a cryptocurrency would counter 2008 style stuff. It seems like a reasoning short circuit: Big institutions failed us, so something without big institutions must be immune. The big institutions failed us exactly by allowing each other to do too much. By not regulating (which is by…

> It baffles me how seemingly capable people have had the idea that a cryptocurrency would counter 2008 style stuff. It seems like a reasoning short circuit: Big institutions failed us, so something without big institutions must be immune. I think you misunderstood what people mean by saying "counter 2008 style stuff". The aim isn't to prevent 2008 from happening again, but if 2008 were to happen again, then be in a…

   There are multiple models, but the most common model is that central bank inflating the money supply, and manipulating interest rates caused 2003-2007 to happen. 2008 was merely the well desired correction

Regardless of it's truth value, that is not clearly the most common model.

Re: Dogecoin's inventor looks to the past for insight into the future

#133

Post by throwawayjava » Fri, Jan 12, 2018, 6:47 PM UTC

erispoe wrote: post #104

jzoch wrote: post #12

Earlier quoted context omitted.

The USD is one of the most centralized currencies in the world. Just because everyone has some does not mean its decentralized. It is still minted and distributed through centralized silos owned by the government, and policy enacted by the government ON the currency is still effective.

In modern systems money can be created by banks lending money. That's an interesting property as money creation is tied to the course of the economy. However, this can lead to inflation if the amount of money created actually exceeds the growth in economic activity. In the gold standard model where the amount of money is completely uncorrelated with economic activity, you have inherent deflation. Deflation is a serio…

> completely uncorrelated with economic activity

It's always surprising to me when (not-already-on-the-top-f-the-world) software types see virtue in gold standards. The fact that our work -- moving bits around -- produces so much economic value is an epitome of everything that's wrong with a gold standard.

Re: Dogecoin's inventor looks to the past for insight into the future

#134

Post by pjc50 » Fri, Jan 12, 2018, 6:48 PM UTC

andrewla wrote: post #43

meri_dian wrote: post #2

>"To deliver a peer-to-peer alternative to cash that, through decentralization, did away with the need for trust in financial institutions, which the 2008 crisis showed to be unscrupulous, and often corrupt." The sort of activity which led to the financial crisis would not be mitigated by the establishment of a decentralized currency. Decentralization would not do away with the need for financial institutions (or the…

> The sort of activity which led to the financial crisis would not be mitigated by the establishment of a decentralized currency. I can't speak for every ideological bitcoin supporter, but you and I may differ on what constituted the "crisis". I agree that it would not deal with the activity which led to the financial crisis. But to many, the crisis was not that the banks all failed, but that they were not allowed to…

Unless you end mortgages entirely, there is always the risk of a property crisis spreading to lenders.

Re: Dogecoin's inventor looks to the past for insight into the future

#135

Post by vec » Fri, Jan 12, 2018, 6:51 PM UTC

notheguyouthink wrote: post #108

rthomas6 wrote: post #52

Earlier quoted context omitted.

The internet was something new, and it fueled a speculation bubble. I think we are seeing something similar with cryptocurrencies. Are they something innovative and potentially useful? Yes. Do their valuations make sense? No.

> Do their valuations make sense? No. I think their valuations will make sense, but no, not right now. I think this whole pile is breaking ground on new tech, tech that will redefine some of the things in our lives. Will Bitcoin / ETH be what holds on? No idea.

Sure, some cryptocurrencies (which may or may not include Bitcoin) will probably have some long-term stable valuation (which may or may not be above their current market value). That doesn't imply that what we're seeing now isn't a bubble, and it's not going to provide much comfort to someone who loses their savings investing in a "sure thing".

Re: Dogecoin's inventor looks to the past for insight into the future

#136

Post by Robotbeat » Fri, Jan 12, 2018, 6:52 PM UTC

SippinLean wrote: post #15

lumberjack wrote: post #7

Earlier quoted context omitted.

Are you sure that was Bitcoin's initial goal? Or just speculation from early adopters? In the actual white paper, Satoshi does not mention any of this, although like you, I do remember these motivations being used very early on. I don't know their origin, but Satoshi simply talks about non reversible transactions, in the context of payments over the Internet.

Satoshi did mention it elsewhere: >The root problem with conventional currency is all the trust that's required to make it work. The central bank must be trusted not to debase the currency, but the history of fiat currencies is full of breaches of that trust. Banks must be trusted to hold our money and transfer it electronically, but they lend it out in waves of credit bubbles with barely a fraction in reserve. We ha…

What's really fantastic, though, is that cryptocurrencies are currently in a large bubble themselves. Privacy of the exchanges is no better as you literally have to send them a picture of your ID. And several exchanges have been hacked with the money stolen. So far, I'd say cryptocurrencies (for the average joe/jane) are WORSE than regular banks. And, on the last point about micropayments, well Bitcoin now has such massive transaction fees and massive overhead that micropayments are even more impossible (without adding more layers).

The ideological/theoretical purity of cryptocurrencies is completely negated by using exchanges and by the perverse incentives of proof of work leading to enormous returns to scale for those who have developed custom ASICs.

Decentralization requires more effort than centralization, but something that requires effort doesn't generally grow very fast... And so we've centralized cryptocurrencies in a haphazard way, making them a lot easier for people to use--thus enabling cryptocurrencies to grow very fast--but also negating all the theoretical benefits.

Something useful will eventually come out of the current mess (and there are various initiatives that help address many of these flaws), but probably not before the Zeitgeist becomes disillusioned with cryptocurrencies.

Re: Dogecoin's inventor looks to the past for insight into the future

#137

Post by soVeryTired » Fri, Jan 12, 2018, 6:53 PM UTC

joyeuse6701 wrote: post #117

soVeryTired wrote: post #55

Earlier quoted context omitted.

What exactly do you mean by 'artificially low'? All short term rates are just a function of central bank policy. The bank will raise or lower rates in an attempt to control inflation (and any other mandate). 'Abnormal' I'd grant you, but not artificial.

artificial as in not 'natural' and natural as in set by market forces, which a central bank setting a short term rate is not a 'natural' market force.

It's been a long time since short rates were set by market forces. And the financial system wasn't particularly stable then either.

Re: Dogecoin's inventor looks to the past for insight into the future

#138

Post by UncleEntity » Fri, Jan 12, 2018, 6:53 PM UTC

erispoe wrote: post #104

jzoch wrote: post #12

Earlier quoted context omitted.

The USD is one of the most centralized currencies in the world. Just because everyone has some does not mean its decentralized. It is still minted and distributed through centralized silos owned by the government, and policy enacted by the government ON the currency is still effective.

In modern systems money can be created by banks lending money. That's an interesting property as money creation is tied to the course of the economy. However, this can lead to inflation if the amount of money created actually exceeds the growth in economic activity. In the gold standard model where the amount of money is completely uncorrelated with economic activity, you have inherent deflation. Deflation is a serio…

> Deflation is a serious threat, as it pushed people to hold onto their currency (as the real value automatically rises) instead of spending or investing it.

Why would people not invest (or spend for that matter)?

It's not like people wouldn't take deflation into account the same way they do with inflation today. If you loan out a dollar today and at the end of the loan its worth $1.03 then you simply adjust the interest rate to reflect this difference. Not like its some complicated formula that starts off with "thar be dragons."

Same can also be said about spending. As a contemporary example why would anyone buy a computer today when they know that in the near future they can get a better model for less? The whole computer industry thrives in a price deflationary sector of the economy.

Whenever someone is trying to push one economic theory over another the key question you need to ask is cui bono.

Re: Dogecoin's inventor looks to the past for insight into the future

#139

Post by Jesus_Jones » Fri, Jan 12, 2018, 6:54 PM UTC

otakucode wrote: post #79

ummjackson wrote: post #4

Earlier quoted context omitted.

(author here) I agree! I was calling out Bitcoin's initial goals in the article but don't 100% align with them myself. Financial institutions came to exist for a reason and I'm really not on board with everyone "being their own bank" as I feel it'd be a step backwards from what we have today. What I do agree with is the need for more audit-able, accountable systems so the institutions we trust are less susceptible to…

They did come to exist for a reason: geography. Primarily, they served as a way to deposit money in one physical location and withdraw it at a different one at a different time. In the modern era, more and more of the economy as a whole flows through these institutions who do nothing more than shuffle numbers down a network link - and yet they charge a percentage cut of the transaction. It costs no more to transmit a…

But also those large bodies provide a certain amount of safety when transferring money, so you can see where it went or if a transfer got lost. That's not true with crypto always, people are on their own. There are endless stories of big banks screwing customers over, often because of uncaring bureaucracy, but I do believe a giant bank will set things right, even if I had to complain - I've never had a problem really, but I have heard of people who do, and don't forget Wells Fargo.

Re: Dogecoin's inventor looks to the past for insight into the future

#140

Post by ummjackson » Fri, Jan 12, 2018, 6:57 PM UTC

cornyNetHandle wrote: post #112

ummjackson wrote: post #4

Earlier quoted context omitted.

(author here) I agree! I was calling out Bitcoin's initial goals in the article but don't 100% align with them myself. Financial institutions came to exist for a reason and I'm really not on board with everyone "being their own bank" as I feel it'd be a step backwards from what we have today. What I do agree with is the need for more audit-able, accountable systems so the institutions we trust are less susceptible to…

What I never understood with the blockchain is the idea that it would change the politics of finance in favour of the little guy. As far as I can tell, financial institutions are exceedingly well practiced at co-opting new monetary systems, as they have been doing exactly that for a very long time, so I never thought that a new model of ledger was ever going to really faze them.

Absolutely, and that's what is happening right now. I honestly don't have a solution for this problem... other than trying to make it as least appealing to these institutions are possible.