Bitcoin's white paper turns 12! Dear Satoshi! Thanks for Bitcoin. If you read my comment, please reply me your advice.
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What Bitcoin’s White Paper Got Right, Wrong and What We Still Don’t Know (2018)
121–130 of 224 posts
Re: What Bitcoin’s White Paper Got Right, Wrong and What We Still Don’t Know (2018)
#122It'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 idea of bitcoin as a store of value and not a currency is a revisionist interpretation that became popular with the blockstream devs around 2017-18 when it became apparent that the bitcoin network was unsuitable for handling payments at scale and had fees too high to be useful for mundane payments.
Re: What Bitcoin’s White Paper Got Right, Wrong and What We Still Don’t Know (2018)
#123It'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…
> Inflation is a vector NOT a real number, any asset that people care about has become generally unaffordable i.e: housing, education, healthcare.
You came so close to realising it, but this is the real reason why Bitcoin can't deliver price stability long term - prices move relative to one another in the real economy. You can't preserve purchasing power by simply limiting money issuance, because exogenous economic shocks are real.
(also, Bitcoin can't prevent the Tether people from printing Tether and buying bitcoin with it ...)
Re: What Bitcoin’s White Paper Got Right, Wrong and What We Still Don’t Know (2018)
#124Earlier 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…
> Other blockchains are vastly expanding scalability, as well as eliminating the energy usage. The energy usage combined with proof of work is the backing. If you break that for Bitcoin als is left is trust. The energy used and consumed is like the USD tied to gold (which it is no longer since quite some time)
You can do proof of work based on random memory access for example rather than pure computation. The monetary cost ends up being identical, but it’s much better for the environment.
Re: What Bitcoin’s White Paper Got Right, Wrong and What We Still Don’t Know (2018)
#125Re: What Bitcoin’s White Paper Got Right, Wrong and What We Still Don’t Know (2018)
#126It'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…
> I never understood how "But Can I buy Starbucks with Bitcoin" became a meme That's disingenuous. It became a "meme" because for many years, bitcoin evangelists touted bitcoin as a currency replacement. You can buy pizza with bitcoins! Remember? It has and still is being sold as a virtual currency - after all you can't have cryptocurrency without currency. > I don't expect to be able to buy Starbucks with Apple stoc…
Interestingly Satoshi wrote about the similarities between bitcoin and gold/precious metals multiple times, eg. [1], [2]. I guess it's not black and white and maybe bitcoin organically transitions from digital cash to digital gold. We'll see how it all plays out over time.
[1] https://bitcointalk.org/index.php?topic=583.msg11405#msg1140...
[2] http://p2pfoundation.ning.com/forum/topics/bitcoin-open-sour...
Re: What Bitcoin’s White Paper Got Right, Wrong and What We Still Don’t Know (2018)
#127Earlier quoted context omitted.
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.
that's not why gold is valuable, historically. Historically gold is valuable because it's rivalrous, fungible, and most importantly, easily verifiable. You can assess approximate purity of the metal with very low-level technology ( https://en.wikipedia.org/wiki/Touchstone_(assaying_tool) ). Transactions thus have a lowered barrier of trust. Before gold and money, you could only transact in debt to labor (see debt: 50…
This is correct. Gold is the original “it’s valuable because everyone agrees it is,” and retains that first mover advantage. Over the centuries there have been numerous challengers. Almost all (silver being a notable exception) failed.
Re: What Bitcoin’s White Paper Got Right, Wrong and What We Still Don’t Know (2018)
#128Earlier quoted context omitted.
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.
> The price has continuously gone up overall at a rate greater than inflation. This is true but a) there's no reason to think this will be true for another 10 years, and b) if you had invested in November 2013, you wouldn't have seen a profit until 2017. 4 years of being in the red is a hard pill to swallow if you're not diversified. Things that might look really bad for months, but work out in the end are better inv…
> if you had invested in November 2013
Cherry picking the singularly worst point.
> 4 years of being in the red is a hard pill to swallow
For which you would've been rewarded with nearly all of the months since 2017 with 500%+ gain, and as of now and also for quite a number of months since 2017, 1000%+ gain.
> there's no reason to think this will be true for another 10 years
Just one more bull run like those previous is going to put Nov '13 buyers at 10,000% gains, and if history comes close to repeating itself that will occur within 2 years.
> if you're not diversified
then you disregarded the single most repeated quip of investing advice in the bitcoin community - no more than you can afford to lose.
Re: What Bitcoin’s White Paper Got Right, Wrong and What We Still Don’t Know (2018)
#129Earlier quoted context omitted.
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.
> The price has continuously gone up overall at a rate greater than inflation. This is true but a) there's no reason to think this will be true for another 10 years, and b) if you had invested in November 2013, you wouldn't have seen a profit until 2017. 4 years of being in the red is a hard pill to swallow if you're not diversified. Things that might look really bad for months, but work out in the end are better inv…
> b) a risky speculative investment on something that's correlated with the price of CPUs, graphics cards, and electricity, and is prone to major supply shocks
You're exposing an understandable lack of familiarity with recent history when you make such statements. Bitcoin mining hasn't been dependent on CPUs or gpus for a very long time. ASICs (Application Specific Integrated Circuits) dominate bitcoin mining to the extent that it's long been unprofitable to bother using a GPU.[0]
But even if we assume that bitcoin's price is correlated with the price of CPUs and electricity, what is the nature of the correlation?
Naively assuming an ill-defined correlation, we would nonetheless expect bitcoin's value proposition to be deflationary, as all technology is, that is bitcoin makes cost of securely holding and transferring value cheaper as technology continues to improve, which would increase the value of bitcoin, not reduce it. That is, while fiat currency is subject to debasement (money printing makes you lose money the longer you hold it), bitcoin is not. So the value and utility of bitcoin increases, yet the supply of bitcoin is constant. Supply and demand easily implies price increase.
Right now, holding cash is a very costly activity, which is why everyone is constantly looking for investment opportunities. Bitcoin fixes that and becomes even better at, and more suited to, fixing that as technology improves.
> and electricity
Bitcoin dominance as money actually improves the security, efficiency, and competitiveness of energy production. Recall that once upon a time, countries that could produce energy cheaply couldn't export it because transporting energy long distances is expensive and in some cases impossible. Instead, they used their surplus energy to process aluminium[2]. They then exported the processed aluminium. Aluminium served as a means of exporting energy!
It's the same with Bitcoin. Reliance on a bitcoin standard forces energy producers to compete for efficiency and reliability of energy supply in order to secure the bitcoin network and guarantee their own profitability.(Goodbye to blackouts due to incompetence?[3][4])
In places where energy that is produced can't be stored or exported it has to be burned (e.g. in oil fields through flaring) Bitcoin mining can make use of the otherwise wasted energy and thus improve the efficiency of energy production.[1] This will also plausibly lead to profitable energy production/extraction with new technologies in places that might otherwise be too remote to be useful but that can connect to the bitcoin network via satellite. (undersea hydrothermal vents? volcanoes? the sahara?) Hypothetical, but the potential is massive and exciting. Bitcoin gives us reason to be optimistic about humanity's energy production and consumption.
[0]: https://download.wpsoftware.net/bitcoin/asic-faq.pdf
[1]: https://newmoneyreview.com/index.php/2019/10/18/peter-thiels...
[2]: https://cordis.europa.eu/article/id/19086-ambitious-plans-fo...
[3]: https://www.latimes.com/environment/story/2020-10-06/califor...
[4]: https://www.bloomberg.com/news/articles/2020-09-02/eskom-ext...
Re: What Bitcoin’s White Paper Got Right, Wrong and What We Still Don’t Know (2018)
#130It'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…
You can try to guess how many dollars have been printed or how many bars of gold exist. No-one in their day-to-day usage of dollars (or gold) directly cares how many currency units exist. What they care about - and what is very easy to know, is what the purchasing power of their currency is.
and what is not easy to know or perceive is the gradual reduction of your currency's purchasing power over time due to inflating supply.