What Bitcoin’s White Paper Got Right, Wrong and What We Still Don’t Know (2018) • Hacker News Board

Re: What Bitcoin’s White Paper Got Right, Wrong and What We Still Don’t Know (2018)

#61

Post by pavlov » Sat, Oct 31, 2020, 4:12 PM UTC

H8crilA wrote: post #52

pavlov wrote: post #48

Earlier quoted context omitted.

I’m trying to imagine the average Briton putting their savings in Bitcoin. Maybe they buy £50 worth on some local exchange every month. Will the money be there in 30 years? Seems more likely that they’re going to be wiped out before then by either a fraudulent/bankrupt exchange (if they never moved the funds to a Bitcoin address) or by losing the private key (if they did). This technology is absolutely not where a Su…

That's mostly because 0.5% of their net worth is something completely insignificant. Graham talks about this problem in "The Intelligent Investor", about how active management of assets is actually not suitable for most people, either because they have too little capital to make any difference or too little time to get good at it. On the other hand, a billionaire not committing 0.5% (or more) of their net worth to Bi…

I don’t really disagree, but this is very different from the original argument that Bitcoin is “the greatest savings technology ever invented”. With a recommended allocation of 0.5%, it doesn’t fit that description.

Re: What Bitcoin’s White Paper Got Right, Wrong and What We Still Don’t Know (2018)

#62

Post by H8crilA » Sat, Oct 31, 2020, 4:12 PM UTC

mmsmatt wrote: post #54

H8crilA wrote: post #31

Earlier quoted context omitted.

ETFs are simply mutual funds married with high frequency trading. Read about Authorized Participants if you're confused as to what HFT has to do with ETFs. Overall it's a decent improvement over the very old idea of open-ended funds, given the recent digitalisation of trading and super fast market making with tiny spreads. PS. I like ETFs, I think they're achieving exactly what are they supposed to achieve.

Also, read the prospectus of any ETF you already own, and you’ll get the gist of APs, enough to understand why your fees are so low.

There's also securities lending (to short sellers), many ETF sponsors retain all proceeds from securities lending for themselves. This is similar to how many brokerages earn most of their revenues by taking a spread on cash balances, so they can charge very little on transaction costs (i.e., they pay you less for unused cash than money markets pay them). After all borrowing money is the same as shorting cash, so there's nice symmetry here :)

Re: What Bitcoin’s White Paper Got Right, Wrong and What We Still Don’t Know (2018)

#63

Post by UncleDiaz12 » Sat, Oct 31, 2020, 4:16 PM UTC

dudus wrote: post #17

unnouinceput wrote: post #11

Earlier quoted context omitted.

https://dailyhodl.com/2020/09/28/big-bitcoin-holder-transfer... Quote from article: "The anonymous whale sent 15,987 Bitcoin worth $166 million, paying a fee of $23.46" Tell me, what bank in the world would charge only $23.46 for transferring $166 M?

The anonymous whale sent from one wallet to another just to rotate their address? Or have they actually sent this money to someone else? Was this money acquired legally? Is it being used for illegal activity? A Bank would have to audit it at the very least, so there's value for the people at having banks manage that transfer rather than let them do it anonymously. Also for someone with $166M cost of a large transfer…

Anti-Money Laundering laws only catch 0.5% of illicit funds, yet cost 100x the money recovered.

https://www.ledgerinsights.com/anti-money-laundering-has-les...

Also, the $10K threshold for additional AML scrutiny has been the same amount for nearly 50 years. It should be close to $50k in today's dollars due to inflation.

Re: What Bitcoin’s White Paper Got Right, Wrong and What We Still Don’t Know (2018)

#64

Post by rusk » Sat, Oct 31, 2020, 4:18 PM UTC

ojnabieoot wrote: post #56

formalsystem wrote: post #24

It's important to remember that the main thing Bitcoin needs to maintain is it's monetary policy and you can find it at any time right here https://github.com/bitcoin/bitcoin/blob/master/src/validatio... Anyone can query at any time the total amount of Bitcoin that have been issued without relying on anyone. After downloading the Bitcoin client just run gettxoutsetinfo You can try to guess how many dollars have been…

> but if you view it as a savings technology then it's the best one that's ever been created. I am sorry but this is just silly and reckless. Although bitcoin is somewhat less noisy than it used to be, it is still a volatile and extremely high-risk investment. Whatever merit bitcoin might have on the long-term economic fundamentals, right now bitcoin is mostly a speculative instrument, or an investment on computing t…

The price has continuously gone up overall at a rate greater than inflation. Yes if you had bought at a peak you would have lost out alright,but overall it has been steady. That said, yeah it’s probs not a good idea putting all your money in it. Black swans abound with any new technology.

Re: What Bitcoin’s White Paper Got Right, Wrong and What We Still Don’t Know (2018)

#65

Post by rusk » Sat, Oct 31, 2020, 4:19 PM UTC

JumpCrisscross wrote: post #29

formalsystem wrote: post #24

It's important to remember that the main thing Bitcoin needs to maintain is it's monetary policy and you can find it at any time right here https://github.com/bitcoin/bitcoin/blob/master/src/validatio... Anyone can query at any time the total amount of Bitcoin that have been issued without relying on anyone. After downloading the Bitcoin client just run gettxoutsetinfo You can try to guess how many dollars have been…

> if you view it as a savings technology then it's the best one that's ever been created Bitcoin is a terrible savings vehicle for the same reason cash in checking accounts or collectibles are: there is no basis for its value. Baseless assets other than gold have been numerously proposed, usually about once every generation in every cultural sphere going back to Republican Roman times, but unvaryingly fall out of fav…

It’s automated fiat.

Re: What Bitcoin’s White Paper Got Right, Wrong and What We Still Don’t Know (2018)

#66

Post by Geee » Sat, Oct 31, 2020, 4:27 PM UTC

JumpCrisscross wrote: post #29

formalsystem wrote: post #24

It's important to remember that the main thing Bitcoin needs to maintain is it's monetary policy and you can find it at any time right here https://github.com/bitcoin/bitcoin/blob/master/src/validatio... Anyone can query at any time the total amount of Bitcoin that have been issued without relying on anyone. After downloading the Bitcoin client just run gettxoutsetinfo You can try to guess how many dollars have been…

> if you view it as a savings technology then it's the best one that's ever been created Bitcoin is a terrible savings vehicle for the same reason cash in checking accounts or collectibles are: there is no basis for its value. Baseless assets other than gold have been numerously proposed, usually about once every generation in every cultural sphere going back to Republican Roman times, but unvaryingly fall out of fav…

That's exactly why Bitcoin is interesting. It is currently being accepted as having it's own value, just like gold. It's an experiment that seems to be working.

Cash or collectibles don't have the same monetary properties as bitcoin or gold. Most importantly, they can be created from thin air.

Re: What Bitcoin’s White Paper Got Right, Wrong and What We Still Don’t Know (2018)

#67

Post by yowlingcat » Sat, Oct 31, 2020, 4:30 PM UTC

joosters wrote: post #55

emptysongglass wrote: post #19

Earlier quoted context omitted.

There's tons of uses: you can fractionally hold real estate, Estonia uses a blockchain to ensure only citizens can grant access to their data siloes to government entities and that that data remains untampered, you can track lineage of art pieces (who owned when), there are healthcare applications, and encrypted messengers like Jami and Status leveraging. You're a few years late on the let's-hate-blockchain trend. Ti…

Real estate (and 'real' anything) on the blockchain is fatally flawed. What happens when the blockchain forks? Which fork holds the real estate, and which fork holds nothing? Or do the blockchain proponents think that the real estate will magically fork into two just like their money?

Just to play a bit of a devil's advocate here, a lot of the same questions have "bedeviled" (and I mean that a little sarcastically) securities lawyers in corporate restructuring cases over the last century. And by "bedeviled" I mean not really. It's a bit of a leaky analogy that you really have to squint at to make work, but the concepts of subordination for bonds and liquidation preference for equities can roughly be analogized how to how forks achieve consensus and resolve disputes. Which is to say, the fork that the network operators (even if that's a distributed, automated consensus) agree to use is almost tautologically is the one that wins. Just like in real life with courts.

That's not to say your comment doesn't have some merit -- I think a lot of blockchain proponents are also of the type to believe that manual edge case dispute resolution (otherwise known as "the law") can be completely removed from blockchain use cases. And of course that is a bit farfetched. But is that a bad goal to strive for? I don't know, I think it would be kind of neat to have some sort of algorithmic countervailing force balancing against an otherwise unstoppable proliferation of bureaucracy, corruption and regulatory capture that I see almost everywhere in the world. Is that such a bad thing?

Re: What Bitcoin’s White Paper Got Right, Wrong and What We Still Don’t Know (2018)

#68

Post by AstralStorm » Sat, Oct 31, 2020, 4:31 PM UTC

Geee wrote: post #66

JumpCrisscross wrote: post #29

Earlier quoted context omitted.

> if you view it as a savings technology then it's the best one that's ever been created Bitcoin is a terrible savings vehicle for the same reason cash in checking accounts or collectibles are: there is no basis for its value. Baseless assets other than gold have been numerously proposed, usually about once every generation in every cultural sphere going back to Republican Roman times, but unvaryingly fall out of fav…

That's exactly why Bitcoin is interesting. It is currently being accepted as having it's own value, just like gold. It's an experiment that seems to be working. Cash or collectibles don't have the same monetary properties as bitcoin or gold. Most importantly, they can be created from thin air.

Bitcoin does not have value of its own. What can you do with a Bitcoin as printed code or eWallet without functioning Bitcoin economy?

It is fiat tied to used value not means to gain value.

On the other hand, you can manufacture useful things from metals, including precious metals. Heck, even old school non-precious metal coins have some of that value.

Re: What Bitcoin’s White Paper Got Right, Wrong and What We Still Don’t Know (2018)

#69

Post by trident1000 » Sat, Oct 31, 2020, 4:33 PM UTC

formalsystem wrote: post #24

It's important to remember that the main thing Bitcoin needs to maintain is it's monetary policy and you can find it at any time right here https://github.com/bitcoin/bitcoin/blob/master/src/validatio... Anyone can query at any time the total amount of Bitcoin that have been issued without relying on anyone. After downloading the Bitcoin client just run gettxoutsetinfo You can try to guess how many dollars have been…

Also means people can save without needing to be financial wizards to not lose much of what they have over their lifetimes. Keeping what you earn in real terms over a lifetime should not be as complicated as it is today.

Re: What Bitcoin’s White Paper Got Right, Wrong and What We Still Don’t Know (2018)

#70

Post by DennisP » Sat, Oct 31, 2020, 4:36 PM UTC

formalsystem wrote: post #24

It's important to remember that the main thing Bitcoin needs to maintain is it's monetary policy and you can find it at any time right here https://github.com/bitcoin/bitcoin/blob/master/src/validatio... Anyone can query at any time the total amount of Bitcoin that have been issued without relying on anyone. After downloading the Bitcoin client just run gettxoutsetinfo You can try to guess how many dollars have been…

The fact that bitcoins can be transferred is the only reason they have value at all. You have to be able to exchange them for something else or they're worthless.

The question then is whether 7 tx/sec really is sufficient to support broad global adoption, even if it's just for savings. Dollars and physical gold have no such limits. Other blockchains are vastly expanding scalability, as well as eliminating the energy usage.

Another issue is whether Bitcoin can maintain its monetary policy for the long term. Here's a paper from Princeton saying that if miner rewards are dominated by transaction fees rather than block rewards, the chain destabilizes, suffering frequent long rollbacks.

https://www.cs.princeton.edu/~arvindn/publications/mining_CC...

If they're right, some future generation of bitcoiners will have to choose between keeping the issuance schedule, and having a blockchain that functions reliably. There's no way for us to know which they will pick.

Personally, I think the right choice is a functioning chain. That last percent or two of inflation isn't a problem for maintaining value, because economies grow at the same rate. So does the supply of gold in the economy.