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The Guns of Bitcoin (2017)

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Re: The Guns of Bitcoin (2017)

#71

Post by zaphar »

monokh wrote: post #17

The common mistake is to try to compare Bitcoin to a predefined experience of money. Bitcoin's value is multifaceted. From a very simplistic perspective, it can be compared to gold. Things get more interesting when you value aspects such as it being: - Fully digital - Verifiable by the common individual - Sent and received with no interference from third parties - Free from supply emission increases or control Each o…

Those are value adds for a currency. But the article here is speaking about the core value of a currency. Essentially for an asset to be useful it's value must be backed by something and it must be possible to both defend and deploy that asset in a reasonable way. Bitcoin has not yet made the case that is practically useful for anything other than a volatile store of value.

Re: The Guns of Bitcoin (2017)

#72

Post by sushshshsh »

zaphar wrote: post #71
monokh wrote: post #17

The common mistake is to try to compare Bitcoin to a predefined experience of money. Bitcoin's value is multifaceted. From a very simplistic perspective, it can be compared to gold. Things get more interesting when you value aspects such as it being: - Fully digital - Verifiable by the common individual - Sent and received with no interference from third parties - Free from supply emission increases or control Each o…

Those are value adds for a currency. But the article here is speaking about the core value of a currency. Essentially for an asset to be useful it's value must be backed by something and it must be possible to both defend and deploy that asset in a reasonable way. Bitcoin has not yet made the case that is practically useful for anything other than a volatile store of value.

I would say that it has made the case for it based on how many people have used it to exchange value internationally, trustlessly, at a very low cost.

Additionally, Bitcoin network is backed by its ability to detect and refuse counterfeit coins.

You can do most of the above with Visa or Venmo as well, however you run the risk of tax reporting, transaction reversal, fraud, negligence, changing fees...

When Visa works, it works well. But when it fails, it fails in quite bad ways that Bitcoin does not.

Re: The Guns of Bitcoin (2017)

#73

Post by streb-lo »

xerxesaa wrote: post #33
NetWorth16254 wrote: post #27

Earlier quoted context omitted.

Actually you wrong. Dolar has value, because even if no one will want dollar, government will buy it for dollar. It backed on government promise.

Your argument sounds recursive. What does it mean to say the government will buy a dollar for a dollar? A dollar is only useful if it can be exchanged for things other than itself.

I mean avoiding prison for tax evasion sounds pretty useful to me.

Re: The Guns of Bitcoin (2017)

#74

Post by solotronics »

scottmsul wrote: post #18

What's going to stop me from using bitcoin for everything, and then exchanging some into dollars at the last second to pay my taxes?

There are already initiatives to pay taxes directly in Bitcoin. https://bitcoinmagazine.com/articles/why-ohios-state-treasur...

This isn't some fringe idea it is being developed by governments around the US. I remember reading about some city in America that will take Bitcoin directly for tax but I can't find the article.

Re: The Guns of Bitcoin (2017)

#75

Post by coralreef »

wslh wrote: post #46
monokh wrote: post #17

The common mistake is to try to compare Bitcoin to a predefined experience of money. Bitcoin's value is multifaceted. From a very simplistic perspective, it can be compared to gold. Things get more interesting when you value aspects such as it being: - Fully digital - Verifiable by the common individual - Sent and received with no interference from third parties - Free from supply emission increases or control Each o…

> From a very simplistic perspective, it can be compared to gold. It is indeed very simplistic to compare it to gold and this is sadly part of the Bitcoin narrative. Gold has a recognition as an store of value based on its network effects while Bitcoin network effect is pretty low in comparison. We can imagine than if a Bitcoin2 is created with similar economic properties and gain more traction it will automatically…

Gold has a recognition as an store of value based on its network effects while Bitcoin network effect is pretty low in comparison.

Not sure I understand why you believe Bitcoin's network effects are lower than golds. The more people willing to accept a unit of Bitcoin, the more useful Bitcoin becomes.

Also, gold's store of value power is also attributed from its stock to flow ratio (the difficulty of inflating gold supply). Bitcoin has an even better stock to flow ratio, which is why its often compared to gold.

Re: The Guns of Bitcoin (2017)

#76

Post by WorldMaker »

keymone wrote: post #62
WorldMaker wrote: post #58

Earlier quoted context omitted.

Forks are so easy in practice though that it seems magic/wishful thinking to assume there's anything particularly special about one branch's artificial scarcity. It seems axiomatic that in using a tree-based structure branches should be the natural and expected state and pretending the other branches don't exist is a fascinating strategy that I just have a rough time thinking holds over the long term, especially when…

Fork of bitcoin is not bitcoin. Only 21 million bitcoin will ever exist and that’s a self-fulfilling prophecy. Whether that 21 million bitcoin branch will remain the dominant in terms of use and hashpower is under question, but there will only ever be 21 million bitcoin.

My exact point is that this is a fun "semantic" game. From a technical standpoint, the entire merkle tree is bitcoin, because that is the root data structure, however you want to "brand" individual forks/branches they are always going to be inter-related. The fact that forks already exist today seems to clearly undermine the idea that there are "only ever 21 million bitcoin" because even just taking "Bitcoin Gold" and "Bitcoin Cash" into account alone represent an "additional" 42 million possible bitcoin. (That's before you take in the dozens of other bitcoin forks, and the larger picture of how generally non-scarce cryptocoins are in the general forest beyond the bitcoin tree.)

It doesn't really matter which fork is "dominant", the artificial scarcity seems extremely artificial in a most brittle way and not that scarce from a respectable technical viewpoint.

You can certainly try to build a definition of "dominant" based on mining "hashpower", but that's a social/economic/political/geopolitical minefield much more than it is a technical factor inherent to bitcoin's underlying data structure, because the underlying data structure is forks ("dominance" is a lucky/expedient edge case).

Re: The Guns of Bitcoin (2017)

#77

Post by wslh »

monokh wrote: post #69
wslh wrote: post #46

Earlier quoted context omitted.

> From a very simplistic perspective, it can be compared to gold. It is indeed very simplistic to compare it to gold and this is sadly part of the Bitcoin narrative. Gold has a recognition as an store of value based on its network effects while Bitcoin network effect is pretty low in comparison. We can imagine than if a Bitcoin2 is created with similar economic properties and gain more traction it will automatically…

What you describe is exactly the property of Bitcoin. Have a look at how many forks have tried to create "Bitcoin2". Some even with overwhelming support from powerful actors. If they fail like they have during Bitcoin's infancy, later on they have no chance.

> What you describe is exactly the property of Bitcoin. Have a look at how many forks have tried to create "Bitcoin2".

I am saying we don't have yet that Bitcoin2 yet and the sum of people and organizations using cryptocurrencies is pretty low comparing to their potential of a Bitcoin2 occurring with more user base.

Re: The Guns of Bitcoin (2017)

#78

Post by wslh »

coralreef wrote: post #75
wslh wrote: post #46

Earlier quoted context omitted.

> From a very simplistic perspective, it can be compared to gold. It is indeed very simplistic to compare it to gold and this is sadly part of the Bitcoin narrative. Gold has a recognition as an store of value based on its network effects while Bitcoin network effect is pretty low in comparison. We can imagine than if a Bitcoin2 is created with similar economic properties and gain more traction it will automatically…

Gold has a recognition as an store of value based on its network effects while Bitcoin network effect is pretty low in comparison. Not sure I understand why you believe Bitcoin's network effects are lower than golds. The more people willing to accept a unit of Bitcoin, the more useful Bitcoin becomes. Also, gold's store of value power is also attributed from its stock to flow ratio (the difficulty of inflating gold s…

> Not sure I understand why you believe Bitcoin's network effects are lower than golds. The more people willing to accept a unit of Bitcoin, the more useful Bitcoin becomes.

Gold is more connected to the regulated financial world than Bitcoin. The network effect is not only about user base but interrelation with other systems. Not saying that Bitcoin could not have a bigger place but it is not there yet.

Re: The Guns of Bitcoin (2017)

#79

Post by keymone »

WorldMaker wrote: post #76
keymone wrote: post #62

Earlier quoted context omitted.

Fork of bitcoin is not bitcoin. Only 21 million bitcoin will ever exist and that’s a self-fulfilling prophecy. Whether that 21 million bitcoin branch will remain the dominant in terms of use and hashpower is under question, but there will only ever be 21 million bitcoin.

My exact point is that this is a fun "semantic" game. From a technical standpoint, the entire merkle tree is bitcoin, because that is the root data structure, however you want to "brand" individual forks/branches they are always going to be inter-related. The fact that forks already exist today seems to clearly undermine the idea that there are "only ever 21 million bitcoin" because even just taking "Bitcoin Gold" an…

You are confused. If you try spending bitcoin cash on bitcoin network you will fail, because bitcoin cash utxos are not bitcoin utxos and bitcoin cash is not bitcoin. There are no additional 42 mil bitcoin, there are additional 42 mil of some other tokens spendable on some other networks.

Re: The Guns of Bitcoin (2017)

#80

Post by notahacker »

Sschellbach wrote: post #61
akavi wrote: post #57

Earlier quoted context omitted.

The price in bitcoin of a basket of actual consumable goods went up significantly (ie, BTC's dollar value tanked). How is that not inflation? Or are you claiming that was not "unpredictable"?

You are pointing to price volatility. The comment is talking about inflation. Price discovery occurs in all markets with varying degrees of volatility. Speculative bubbles, crashes, etc result occur when new information causes price discovery. Its an ongoing process in an ever-changing world. Inflation is specifically price increases from change in the amount of money in a system. The delta in money supply for Bitcoi…

> Inflation is specifically price increases from change in the amount of money in a system.

No it isn't. Inflation is a general rise in prices in an economy, period, of which change in the amount of money in circulation is only one possible cause [it can also circulate faster or slower due to change in demand, supply constraints, import prices etc].

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