Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

The Wealthy Are Hoarding $10B of Bitcoin in Bunkers

bloomberg.com

Post reply on HN
Print view View original

171–180 of 405 posts

Re: The Wealthy Are Hoarding $10B of Bitcoin in Bunkers

#171

Post by mr_spothawk »

kajumix wrote: post #41
simias wrote: post #17

>the global currency of the future, that they need to buy some, and that he’s the man to safeguard it. Looks like in the future people hoard currency instead of spending and investing it then. That ought to be interesting. It also demonstrates the costs associated with non-reversible transactions, these vaults aren't storing gold ingots or priceless artifacts, just private keys. Banks around the world don't need to w…

>if you do hold the keys you better be absolutely paranoid with them because there's no plan B if they get compromised or destroyed One could do multi-signature wallets with Bitcoin. So, for example, there could be three keys: one with you, one with your significant other, and one with a third party custodian, and it'd take, say, 2 out of 3 signatures to spend out of the wallet. It doesn't change the bearer nature of…

> multi-signature wallets

this, among the myriad other points missed by the discussion, is what's special about BTC (arguably, other digital "currencies", as well)

there's so much more to BTC. it's not simply any one of the [currency, investment, speculation] because it's also a [transaction network, messaging platform, clock, vault].

Re: The Wealthy Are Hoarding $10B of Bitcoin in Bunkers

#172

Post by mikeash »

blocked_again wrote: post #162
mikeash wrote: post #153

Earlier quoted context omitted.

Are miners still going to be operating in this post-collapse environment?

Whoever operates is going to become rich. So someone will step up to satisfy the need.

You need a hash rate at least vaguely close to the pre-collapse hash rate, or else the network will grind to a halt. Will they be physically capable of that?

Re: The Wealthy Are Hoarding $10B of Bitcoin in Bunkers

#173

Post by jel9392mdke »

Cthulhu_ wrote: post #31
simias wrote: post #17

>the global currency of the future, that they need to buy some, and that he’s the man to safeguard it. Looks like in the future people hoard currency instead of spending and investing it then. That ought to be interesting. It also demonstrates the costs associated with non-reversible transactions, these vaults aren't storing gold ingots or priceless artifacts, just private keys. Banks around the world don't need to w…

That's because - and everyone but the uninformed or idealists know this - it's an investment product. It's simply not suitable as a currency, because one, inflation / instability, and two, it can only do what, a dozen transactions a second, if that? That's not nearly enough to become a viable currency.

Uninformed

As if you have some secret wisdom of divine nature

You’re using words and language that have been repeated to you over and over by those you perceive to have some authority

Let’s not wrap this in mysticism to continue satisfying your headspace

Re: The Wealthy Are Hoarding $10B of Bitcoin in Bunkers

#174

Post by cuckcuckspruce »

mkirklions wrote: post #161
dmoy wrote: post #155

Earlier quoted context omitted.

What's the backup for various failure cases? House fire? I'd guess off-site backups. House fire that kills you? Do you stick recovery instructions to your backup in a will, or how do you leave money to your heirs? (Or just you don't?)

Unfortunately I have too much bitcoin to say where I store it. The only thing I will say is that I keep my bitcoin in MANY locations and MANY wallets.

Nobody is going to steal your Dunning-Krugerands

Re: The Wealthy Are Hoarding $10B of Bitcoin in Bunkers

#175

Post by TimmyMustGo »

simias wrote: post #17

>the global currency of the future, that they need to buy some, and that he’s the man to safeguard it. Looks like in the future people hoard currency instead of spending and investing it then. That ought to be interesting. It also demonstrates the costs associated with non-reversible transactions, these vaults aren't storing gold ingots or priceless artifacts, just private keys. Banks around the world don't need to w…

So if we let a bank manage bitcoin, perhaps the bank could issue paper receipts that are backed by said bitcoin, and those pieces of paper could circulate instead of using the blockchain.

What I don't understand is if fiat currencies are so bad, why do people express the value of bitcoin in a fiat currency (like USD)? They are just like the goldbugs, hoping and praying that the world will collapse back into the dark ages

Re: The Wealthy Are Hoarding $10B of Bitcoin in Bunkers

#176

Post by jpadkins »

jonknee wrote: post #82
mkirklions wrote: post #74

Earlier quoted context omitted.

> there are only a given number of total bitcoins in existence, which many (myself included) would argue makes it a poor currency. I have always question who says this. What makes you think deflation would be bad? My conspiracy is that governments require inflation to print themselves out of bad policy. Without government abilities to do this, the government performs poorly. Common citizens do not lose 2-4% of their…

> What makes you think deflation would be bad? Literally economics 101. Investment grinds to a halt and progress along with it.

I have taken econ 101, this wasn't covered.

Deflation via credit default has shown to be harmful to wider economy 2x times in US history (monetary shocks). I am not aware of any conclusive study that a deflationary currency is bad for investment and progress. The easy counterpoint is Gold, which is often deflationary (when economic growth outpaces gold mining). We have had 10k years of investment that have shown your basic statement is false (deflationary currency causes investment to grind to a halt).

Inflationary fiat or credit based currency is a relatively new invention (1972 in the US). I have not seen any serious analysis showing that real investment has radically improved since going off the gold standard. Real investment has been growing for decades as real wealth increases, inflationary currency hasn't changed that very much AFAIK.

Re: The Wealthy Are Hoarding $10B of Bitcoin in Bunkers

#177

Post by jonknee »

mkirklions wrote: post #165
jonknee wrote: post #150

Earlier quoted context omitted.

And it doesn't take a scientist to realize that when things will be cheaper tomorrow people tend to avoid making purchases today. (Think back to when home prices were crashing, there wasn't exactly a rush of people to buy homes that were declining in value.)

But what if you need to eat food? Or pay your mortgage? How will you pay for things if you dont spend Bitcoin?

Yes, essential spending would happen. But why upgrade your car, or go out to eat, or go on a vacation, or all the other non-essential spending that powers our economy? Even a very small change in these behaviors has huge effects because one person's spending is another person's income.

Re: The Wealthy Are Hoarding $10B of Bitcoin in Bunkers

#178

Post by zby »

Cthulhu_ wrote: post #31
simias wrote: post #17

>the global currency of the future, that they need to buy some, and that he’s the man to safeguard it. Looks like in the future people hoard currency instead of spending and investing it then. That ought to be interesting. It also demonstrates the costs associated with non-reversible transactions, these vaults aren't storing gold ingots or priceless artifacts, just private keys. Banks around the world don't need to w…

That's because - and everyone but the uninformed or idealists know this - it's an investment product. It's simply not suitable as a currency, because one, inflation / instability, and two, it can only do what, a dozen transactions a second, if that? That's not nearly enough to become a viable currency.

It is a store of value. I would not call it an investment - because it does not really produce anything. It is like gold - but digital: https://medium.com/@zby/proof-of-work-8d8265def194

I don't think it is a very good store of value - we mostly need store of value in the special cases of wars, extreme crises, and similar stuff - for normal times we can invest our money into businesses that really produce something. But bitcoin does not seem to be very usable in these circumstances. It is not well tested. It is also in danger of being replaced by some other cryptocurrency. And I don't thing there is space for more than two or three of them - just like money gravitated into gold and silver.

Re: The Wealthy Are Hoarding $10B of Bitcoin in Bunkers

#179

Post by simias »

chiefalchemist wrote: post #42
simias wrote: post #17

>the global currency of the future, that they need to buy some, and that he’s the man to safeguard it. Looks like in the future people hoard currency instead of spending and investing it then. That ought to be interesting. It also demonstrates the costs associated with non-reversible transactions, these vaults aren't storing gold ingots or priceless artifacts, just private keys. Banks around the world don't need to w…

> "Looks like in the future people hoard currency instead of spending and investing it then. That ought to be interesting." That sounds like the current to me. Too much is locked up (in too few hands) instead of doing what currency should do. That is, reduce the friction of trade (i.e., goods, skills, etc.) Currency is a lubricant. It's no surprise things are drying up.

I completely agree with you that the concentration of wealth in the hands of a tiny portion of the population is a huge problem today, but don't deflationary cryptocurrencies make it objectively worse?

At least if the current "1%" hoard dollars or euros in their mattress they slowly lose their wealth thanks to inflation. After a generation or two they'll have lost a significant share of their treasure. Therefore they have an incentive to actually invest the money to fight the effects of inflation. In doing so they contribute to the economy.

With a deflationary currency like bitcoin it goes like this:

1/ Buy bitcoins

2/ Bury your keys in a bunker in Antartica

3/ There is no step 3, just watch as you become wealthier while doing absolutely nothing. You want a loan to start your business or buy a house? Well tough luck, you should have mined BTC in 2013.

The deflationary nature of Bitcoin is why it managed to be successful in the first place, it gives a strong incentive to be an early adopter. However in the long term I don't see how it's sustainable, it makes it borderline useless as a currency. On the other hand I don't see how an inflationary cryptocurrency could gain traction if it's not backed by a huge entity such as a government or multinational company because who would bother buying SimiasCoin if you know it's going to lose value at a steady pace in the future? And why would a government or multinational corporation bother creating a cryptocurrency they can't easily control instead of printing bills like they do today?

Re: The Wealthy Are Hoarding $10B of Bitcoin in Bunkers

#180

Post by coldtea »

jel9392mdke wrote: post #173
Cthulhu_ wrote: post #31

Earlier quoted context omitted.

That's because - and everyone but the uninformed or idealists know this - it's an investment product. It's simply not suitable as a currency, because one, inflation / instability, and two, it can only do what, a dozen transactions a second, if that? That's not nearly enough to become a viable currency.

Uninformed As if you have some secret wisdom of divine nature You’re using words and language that have been repeated to you over and over by those you perceive to have some authority Let’s not wrap this in mysticism to continue satisfying your headspace

>As if you have some secret wisdom of divine nature

Doesn't take that to be informed. Studying a subject for example will do.

In fact in this case, to reach the same conclusions, all it needs is common logic.

>You’re using words and language that have been repeated to you over and over by those you perceive to have some authority

Or he made up his own mind -- ever thought of that possibility?

Post reply on HN