Bitcoin as a Game • Hacker News Board

Re: Bitcoin as a Game

#61

Post by __MatrixMan__ » Tue, Nov 05, 2019, 6:03 AM UTC

XorNot wrote: post #18

aazaa wrote: post #14

> The premise behind bitcoin-the-game is that the current wave of buyers must guess when (or if) a subsequent wave of buyers will emerge, this second next wave's participation being contingent on when (or if) they believe a third wave of buyers to emerge. If they guess right, the early birds win at the expense of the late ones. ... This is a truly tired analysis. It goes by various names, including "greater fool theo…

Stocks represent actual ownership in the company, potentially voting control of the boards decisions. Government bonds are backed by the full force and trust of the government they represent, and repay the face value plus yield promised at the time they were bought . They represent the most reliable yield you can get. Real estate? You mean that thing you live in? This is all a bunch of a false equivocation with one g…

I'm not a big fan of Bitcoin as a long term solution, I consider it little more than a proof of concept. It took a long time for steam engines to outperform horses, and it may take just as long for a crypto-driven economy to emerge that outperforms our current one. But I think it will happen, and those cryptocurrencies--I'm very excited about those.

Re stock: People are already working on blockchain voting mechanisms. Currently you need to own quite a sizeable chunk of a company's stock, and to go rather far out of your way, to actually influence the decision-making of a company you own stock in. Cryptos with on-chain governance, on the other hand, will remove most of that friction.

Re. government: Sure, right now this type of decision making only applies to either protocol design decisions or how to edit transaction history in the event of a problem, but once the proposal-vote-consensus-action pipeline is figured out and trusted, I see no reason it won't start getting applied to the same problems that we keep governments around to solve. So yeah, government bonds are safe nowadays because government's don't have anything to compete with besides other slow inefficient governments, but if people think that a collection of community maintained consensus algorithms are more effective than their government--well I wouldn't want to be holding fiat bonds when that happens, because why pay taxes when you get more bang for your services-for-society buck elsewhere?

As for real estate, just shooting from the hip I'd say that it's 10% real and 90% the game indicated in the article. In a world where large scale behavior of economies can be quickly altered by a vote and a parameter change, I certainly hope we can find a set of parameters that will eliminate the homeowners association and all of the waste associated with placing property resale value over utility. I'd much rather lose out on my "investment" in this house than continue to live in a world where my friends can't afford to live near me because of all the overpriced empty houses in the way--sucking up all the water for their perfectly manicured lawns that nobody touches while the poor kids down the road play on a field of gravel, broken glass, and thistle.

I don't hold much Bitcoin, but I promise that I don't value it because I think I can later dupe somebody into buying it at a higher price.

I value it because it's clumsily paving the way for a world with fewer parisitic middle-man institutions, and the further it gets before it falls over the sooner I'll get to live in that world. I guess that's called investing.

Re: Bitcoin as a Game

#62

Post by krrishd » Tue, Nov 05, 2019, 6:29 AM UTC

all_blue_chucks wrote: post #59

obilgic wrote: post #2

Then I would say gold is exactly the same. In fact, gold would be a riskier betting game as information is less transparent (estimating supply, how fast It's mined etc) compared to bitcoin.

There are practical limits to the supply of gold. There is no limit to the supply of crypto currency. That can be created out of thin air by anyone at any time.

> There is no limit to the supply of crypto currency

the whole point of bitcoin — whether or not you believe it has a future —is that it allows for (and has) scarcity in a digital environment in which double-spending/scarcity were previously hard to enforce without an intermediary.

there are only ever going to be 21 million bitcoin. there is a limit :)

Re: Bitcoin as a Game

#63

Post by rytill » Tue, Nov 05, 2019, 7:12 AM UTC

grubles wrote: post #56

semiotagonal wrote: post #48

Earlier quoted context omitted.

You wouldn't try to submit it to the "actual legitimate Bitcoin network" though. You'd bootstrap a whole new network instead. People might prefer a new blockchain that starts with a more even distribution, instead of enriching early adopters of BTC. That said, blockchain may not work at all, as applied to digital currencies. The abilities to revoke and expropriate are tools, like prisons are. Their use, on occasion,…

Your whole new network wouldn't be Bitcoin then. Therefore there is no cloning. Bitcoin scarcity remains in tact. Bitcoin's initial distribution was as preferable as it can really get. It was announced to a mailing list of people most likely to pay attention to it. Anyone with a computer could join the network and be rewarded with bitcoins. You didn't even need to have a fast computer. The software was free and open…

What about all those with no bitcoin?

I placed 20 $1 bills on the ground scattered right outside my house. They are out on the street, free and open air. Anyone can take them.

In actuality, there will be a small, small minority of the world that gets all the value.

Re: Bitcoin as a Game

#64

Post by cryptica » Tue, Nov 05, 2019, 7:26 AM UTC

Bitcoin is gambling but the entire economy is also gambling. Luck is the only significant differentiator between winners and losers.

The reason why capitalism kind of works is not because it rewards productive people but because most people believe that it rewards productive people.

The economic incentive to work or invest is rooted in deception. Not so different from Bitcoin or anything else.

Re: Bitcoin as a Game

#65

Post by eru » Tue, Nov 05, 2019, 8:06 AM UTC

aazaa wrote: post #14

> The premise behind bitcoin-the-game is that the current wave of buyers must guess when (or if) a subsequent wave of buyers will emerge, this second next wave's participation being contingent on when (or if) they believe a third wave of buyers to emerge. If they guess right, the early birds win at the expense of the late ones. ... This is a truly tired analysis. It goes by various names, including "greater fool theo…

> Stocks? Remember dividends? Not so much these days.

We have plenty of stock buybacks. They are economically equivalent to dividends.

Yes, Amazon hasn't returned much capital. Granted.

> Real estate? Please. Take away price appreciation driven by easy money and few would bother "owning."

Prices are pretty flat in eg most of Germany. People mostly buy to consume housing services, ie save on rent.

Re: Bitcoin as a Game

#66

Post by eru » Tue, Nov 05, 2019, 8:07 AM UTC

solotronics wrote: post #50

richk449 wrote: post #33

Earlier quoted context omitted.

How is that valuable, aside from ones ability to speculate on how much people will want it in the future? As an aside, I agree with the other poster that there is no intrinsic scarcity to bitcoin, because anyone can create bitcoinN which are nearly identical to bitcoin. I say nearly because you can’t necessarily replicate the network, so the scarcity really depends on complicated emergent human behavior.

The same way gold is valuable. The industrial value of gold is near silver and therefore without speculation and its use as a store of value it would be worth closer to $100 instead of $1500.

Well, there's also value as jewelry. But that doesn't distract too much from the point.

Re: Bitcoin as a Game

#67

Post by eru » Tue, Nov 05, 2019, 8:10 AM UTC

alwillis wrote: post #47

richk449 wrote: post #22

Earlier quoted context omitted.

Surely there is a difference between investments that have underlying value, but are speculated on, and investments which have no underlying value except that due to speculation.

Bitcoin is a non-sovereign, hard-capped supply, global, immutable decentralized digital store of value. It’s an insurance policy against monetary and fiscal policy irresponsibility from governments and central banks globally. Bitcoin’s genesis block contains a reference to the 2008 financial crisis; Bitcoin is pretty clearly a response to what was happening October 2008, when the Bitcoin white paper was released. Iro…

> Ironically, the global economy is contracting [...]

Where do you take that from? A Google search says that global real GDP is forecast to grow about 3% in 2019. Not great, but also not contracting.

For comparison, global population is forecast to grow by about 1% this year. So we even get a bit of growth per capita.

Re: Bitcoin as a Game

#68

Post by eru » Tue, Nov 05, 2019, 8:17 AM UTC

askmike wrote: post #52

XorNot wrote: post #18

Earlier quoted context omitted.

Stocks represent actual ownership in the company, potentially voting control of the boards decisions. Government bonds are backed by the full force and trust of the government they represent, and repay the face value plus yield promised at the time they were bought . They represent the most reliable yield you can get. Real estate? You mean that thing you live in? This is all a bunch of a false equivocation with one g…

> Stocks represent actual ownership in the company, potentially voting control of the boards decisions. A company is an abstract concept around a group of people, framed inside a legal entity. But yes, if you own many stocks you can sit at the table with some big boys. Most companies come with less risk than Bitcoin. But I rather buy Bitcoin than WeWork shares (assuming they list). > Government bonds are backed by th…

> But I rather buy Bitcoin than WeWork shares (assuming they list).

Depends on the price. Thanks to limited liability, WeWork share can never be worth less than zero. And just liquidating their existing office supplis is probably worth at least a few thousand dollars. But, of course, you'd have to pay off creditors first.

If WeWork lists and doesn't go under, and assuming even a weak version of the efficient market hypothesis, the price their shares trade on will be about 'right'.

> Until a government defaults. This doesn't happy every week, but ruling out that it doesn't is not the best investment strategy.

Agreed. Though in the developed world, inflation is usually the bigger worry. (Unless you buy inflation indexed bonds.)

Re: Bitcoin as a Game

#69

Post by jl2718 » Tue, Nov 05, 2019, 10:13 AM UTC

He’s looking at Bitcoin in terms of dollars, but dollars also have zero utility, so they have to be traded for something, and there are an awful lot of them created every day. We’re way overcaptilalized, so most of this is going into speculative investment rather than consumable utility. In that regard, it hardly matters what form that speculation takes, the prices are mostly determined by capital flows rather than internal returns.

Re: Bitcoin as a Game

#70

Post by IllogicalLogic » Tue, Nov 05, 2019, 12:21 PM UTC

eru wrote: post #68

askmike wrote: post #52

Earlier quoted context omitted.

> Stocks represent actual ownership in the company, potentially voting control of the boards decisions. A company is an abstract concept around a group of people, framed inside a legal entity. But yes, if you own many stocks you can sit at the table with some big boys. Most companies come with less risk than Bitcoin. But I rather buy Bitcoin than WeWork shares (assuming they list). > Government bonds are backed by th…

> But I rather buy Bitcoin than WeWork shares (assuming they list). Depends on the price. Thanks to limited liability, WeWork share can never be worth less than zero. And just liquidating their existing office supplis is probably worth at least a few thousand dollars. But, of course, you'd have to pay off creditors first. If WeWork lists and doesn't go under, and assuming even a weak version of the efficient market h…

I find people's lack of knowledge about what makes Bitcoin valuable interesting.

The reason Bitcoin is valuable is because the work required to create one is significantly harder than Fiat currencies and it is one of the only truly scarce assets in human history (hard cap).

How much equipment do you need to counterfeit any fiat currency? Can you purchase the equipment for less than $10k?

Yes, easy.

How much equipment do you need to counterfeit Bitcoin? Can you purchase the equipment for less than $1 billion?

No, not easy.

You may think this is a trivial distinction but it has tremendous value knowing you have hard uncounterfeitable money with a hard cap.

The US treasury spends hundreds of millions of dollars a year fighting fake bills, that's only 1 of the dozen or so problems bitcoin solves. The second is that all the verification and security is done by the most powerful supercomputer in human history.

These things gives it its value.

Garbage company stocks, you can throw those in the trash if the central banks aren't busy helping pump them.

Hard money wins, soft money gets snuffed in the night.