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)

#71

Post by rhn_mk1 » Sat, Oct 31, 2020, 4:40 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…

Your explanation doesn't make it clearer to me. It looks like you're missing a step between no basis in value and being a terrible savings vehicle. As a saver, I don't care about the basis, I care that the money doesn't get too discounted with time, and I care about the risk.

What am I missing?

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

#72

Post by H8crilA » Sat, Oct 31, 2020, 4:47 PM UTC

pavlov wrote: post #61

H8crilA wrote: post #52

Earlier quoted context omitted.

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.

Bitcoin is clearly not appropriate for "savings", just look at the realised volatility. It may become appropriate in the future, but when that happens the "put on financial system" will be realised, i.e. the convexity proposition will be gone. In fact if "Bitcoin is now appropriate for savings" in the sense that The Economist and other mainstream is not ashamed to write about it and central banks have Bitcoin holdings next to their gold holdings then that precisely means that the convex bet has paid off :)

I used to hold Bitcoin at various times in the past, and I would absolutely not recommend Bitcoin to anyone unless they truly can stomach total loss on the "investment". This means appropriate position sizing, alignment with current personal financial situation and personal plans/goals/objectives. And don't even think about leverage here.

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

#73

Post by slickrick216 » Sat, Oct 31, 2020, 4:47 PM UTC

DennisP wrote: post #70

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…

“ 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.”

Yes they do, it takes even longer to move physical dollars or gold around and depending on where and who you are sending them too it might be impossible.

Sure in some mainstream cases you can send the digital derivative of gold and dollars to someone but those aren’t the actual asset just a representation issued by a centralized entity or a collection of them. Visas payment network isn’t moving dollars it’s moving digital dollars. Same with gold etfs. Let’s see them try to seize bitcoin and stop transfers it’s much harder

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

#74

Post by trident1000 » Sat, Oct 31, 2020, 4:48 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…

Cash is a bad savings vehicle not because its based on trust, but because they keep printing more of it and it already reached price maturity in terms of market cap (its saturated in how many people keep wealth in it, especially as an inflationary asset).

Bitcoin has been a very good savings vehicle over the past 12 years in terms of long term moving average. Like social networks such as facebook, gold, etc, it has network value and these tend to be hard to break when at scale (there are many forks and all are worth nothing). Bitcoin is now (aside from ETF's and 401k's) the single most held liquid tradable asset on earth. More people own it than stock in Apple (not in ETF or 401k form).

You think the gold MC is based on utility? There is not a 9 trillion electronic plating and jewelry market. Jewelry is also by extension speculation on the metal. 95% of golds market cap is through the same value social network that gives bitcoin value. Except I've owned physical gold and its a pain in the ass for so many reasons. Bitcoin is a better store of wealth. Its something that is useful and limited to many including myself and has reached the beginnings of mass adoption. It has value.

So you can continue to call it a beanie baby but that old phrase has been said since 2011. How long can you shake the cane at the sky? Even JP Morgan and Goldman Sachs have come around in addition to Paypal and the others. The entire legacy financial system is adopting at this point.

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

#75

Post by wmf » Sat, Oct 31, 2020, 4:52 PM UTC

trident1000 wrote: post #69

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.

Target date funds aren't complicated at all.

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

#76

Post by daniel-cussen » Sat, Oct 31, 2020, 4:59 PM UTC

JumpCrisscross wrote: post #34

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?

> what bank in the world would charge only $23.46 for transferring $166 M? I have never paid for a wire. I’ve also overseen multibillion-dollar wires for which there were zero transfer fees. If you send and receive wires, get a bank account that doesn’t charge for them. (This is almost every account at e.g. Fidelity or First Republic.) Consumer accounts usually optimise for a different basket of needs than large inst…

Those wires are usually expensive because in many places you have to move tangible money around as a result. In Chile in the 2010's Banco de Chile and its counterparties (including Banco BICE) had vaults of their own in their counterparty's complex just so they could square up all the money that moved between their customers on account of instant transfers.

Sure, when Alice pays Bob, Bob pays Charlie, and Charlie pays Alice a small amount of money a lot of it cancels out. But not all, and over millions of transactions one bank can end up owing another a lot of money. You have to cash out at some point, as banks hate trusting people with money for no interest. So banks then resort to armored vehicles full of cash and gold bars so they can square up.

When they're moving money they balance the cost of additional security against the risk of loss and that's what gets reflected in the bill for the bank wire.

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

#77

Post by DennisP » Sat, Oct 31, 2020, 5:00 PM UTC

slickrick216 wrote: post #73

DennisP wrote: post #70

Earlier quoted context omitted.

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…

“ 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.” Yes they do, it takes even longer to move physical dollars or gold around and depending on where and who you are sending them too it might be impossible. Sure in some mainstream cases you can send the digital derivative of gold and dollars to som…

Their latency is high but they are massively parallel. There's no practical limit on global throughput.

To get low latency on dollars/gold you have to go with centralized digital representations, but Bitcoin has to do the same to get more than 7 tx/sec.

I might still be a fan if that were the only option, but with other blockchains eliminating this restriction I have a hard time seeing the long-term value proposition of Bitcoin specifically.

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

#78

Post by trident1000 » Sat, Oct 31, 2020, 5:03 PM UTC

wmf wrote: post #75

trident1000 wrote: post #69

Earlier quoted context omitted.

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.

Target date funds aren't complicated at all.

Many people in the US and elsewhere dont even know what that is. Know whats way easier? Holding a global non-inflatable reserve currency and forgetting the rest of the BS.

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

#79

Post by kneel » Sat, Oct 31, 2020, 5:04 PM UTC

JumpCrisscross wrote: post #40

kneel wrote: post #37

Earlier quoted context omitted.

ETFs are still subject to whatever country's tax laws. Imagine putting your retirement into various funds only to have a Brexit type situation destroy your hard earned money. Bitcoin is borderless, permissionless storage of value. Game theory built in (anyone powerful enough to attack the network is better incentivized to participate in it.)

> still subject to whatever country's tax laws So is Bitcoin.

Bitcoin is only subject to tax if you move it back into the controlled financial system.

Otherwise it's just numbers hopping around anonymously on a ledger.

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

#80

Post by JumpCrisscross » Sat, Oct 31, 2020, 5:09 PM UTC

kneel wrote: post #79

JumpCrisscross wrote: post #40

Earlier quoted context omitted.

> still subject to whatever country's tax laws So is Bitcoin.

Bitcoin is only subject to tax if you move it back into the controlled financial system. Otherwise it's just numbers hopping around anonymously on a ledger.

> Otherwise it's just numbers hopping around anonymously on a ledger

That’s tax evasion.

I know it’s chic to be callous about tax fraud in some cryptocurrency circles. But the same has been true of cash, art and bearer bonds for centuries.