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Ask HN: Could Bitcoin be replaced by an ERC-20 token?

news.ycombinator.com

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Re: Ask HN: Could Bitcoin be replaced by an ERC-20 token?

#21

Post by latchkey »

wmf wrote: post #18
latchkey wrote: post #10

Earlier quoted context omitted.

It isn't about modifying the token, it is about rolling back transactions with hard forks. This could be done on any blockchain. The social consensus of the bitcoin miners is the only thing that prevents this from happening.

If you replace Bitcoin with a smart contract, a hard fork could change any aspect of its behavior, such as removing the 21M cap. The social consensus of Bitcoin is that no changes will ever be made, but Ethereum is much more open to changes.

Except you can't replace bitcoin with a smart contract, it wouldn't be bitcoin.

Re: Ask HN: Could Bitcoin be replaced by an ERC-20 token?

#22

Post by latchkey »

vineyardmike wrote: post #20
latchkey wrote: post #5

Earlier quoted context omitted.

I'm not talking about replacing bitcoin. Bitcoin, the network, needs to stay around. There needs to be one asic controlled network. The usage model does not. This is likely part of why the lightning network struggles so much for adoption. It doesn't add the same amount of value as tokenized bitcoin. I can borrow any coin against my tokenized bitcoin (which can often result in a positive apy), then move that coin to a…

> You simply borrow against your existing holdings and pay that debt back while earning interest on your holdings. This model makes that 1-5% cashback on credit cards look like a joke. You can do this today with existing investment portfolios. If someone is willing to give you an unsecured line of credit -without the risk of margin call- why would you borrow against holdings? The magic issue is that markets don’t alw…

Yes, there are risks involved. Not saying there aren't. That said, there can be organizations, which are not credit card companies, that buffer that risk.

Correct, this model does not work for everyone's financial situation. However, people who are living paycheck to paycheck arguably shouldn't also be floating on debt. This is why credit cards ask for income statements in order to determine how much credit to extend.

Re: Ask HN: Could Bitcoin be replaced by an ERC-20 token?

#23

Post by latchkey »

joneholland wrote: post #19
latchkey wrote: post #5

Earlier quoted context omitted.

I'm not talking about replacing bitcoin. Bitcoin, the network, needs to stay around. There needs to be one asic controlled network. The usage model does not. This is likely part of why the lightning network struggles so much for adoption. It doesn't add the same amount of value as tokenized bitcoin. I can borrow any coin against my tokenized bitcoin (which can often result in a positive apy), then move that coin to a…

Your last paragraph exists in the form of margin loans and is already well utilized by savvy people.

Yes, however today, this is done in a centralized way. You have to ask for permission to get that loan. DeFi does this in a collateralized decentralized way. If I have bitcoin, I can borrow against that bitcoin without having to walk into a bank and fill out reams of paperwork.

Re: Ask HN: Could Bitcoin be replaced by an ERC-20 token?

#24

Post by pawelduda »

Technically speaking, it is possible. But in real life such event could:

- dilute overall value of BTC if it was a 1:1 airdrop (this could be avoided by maybe minting the ERC20 version after providing a proof of burn of real BTC)

- get backlash from BTC maxis who attribute its value to the fact that BTC is secure thanks to PoW, or that Ethereum blockchain relies on an asset that has traits of a security, etc.

- uncertainty related to risk of incorrect smart contract implementation, entity behind it, etc.

These factors could cause a lot of volatility to both tokens, and only one of them would prevail in the long term (historically I would bet it would follow similar path of BCH or BSV, or gazillion other BTC killers)

Re: Ask HN: Could Bitcoin be replaced by an ERC-20 token?

#25

Post by sMarsIntruder »

Bitcoin is here to stay since it is the only real decentralised system. I know that you guys will say now “bitcoin maximalist”, but hey, ETH is becoming a centralised shitcoin. Just get over it.

One last thing: PoS will NEVER be as much as good as PoW. So please document yourself a little bit more regarding energy consumption and what Bitcoin CAN help solving.

Nothing is black or white.

Re: Ask HN: Could Bitcoin be replaced by an ERC-20 token?

#26

Post by joneholland »

latchkey wrote: post #23
joneholland wrote: post #19

Earlier quoted context omitted.

Your last paragraph exists in the form of margin loans and is already well utilized by savvy people.

Yes, however today, this is done in a centralized way. You have to ask for permission to get that loan. DeFi does this in a collateralized decentralized way. If I have bitcoin, I can borrow against that bitcoin without having to walk into a bank and fill out reams of paperwork.

Tell me you’ve never taken out a margin loan without telling me you’ve never taken out a margin loan. There is no paperwork. I can withdraw enough cash from my brokerage to buy a house through my phone and in only the time for an ach to post. Entirely collateralized by my assets. I regularly float 250k intraday for free through margin to support trading. You don’t need defi for this. The defi kids are reinventing traditional finance poorly one step at a time.

Re: Ask HN: Could Bitcoin be replaced by an ERC-20 token?

#27

Post by Deritiod »

sMarsIntruder wrote: post #25

Bitcoin is here to stay since it is the only real decentralised system. I know that you guys will say now “bitcoin maximalist”, but hey, ETH is becoming a centralised shitcoin. Just get over it. One last thing: PoS will NEVER be as much as good as PoW. So please document yourself a little bit more regarding energy consumption and what Bitcoin CAN help solving. Nothing is black or white.

Bitcoin is not solving anything really.

People think that PoW just solved the trust issue but it has not.

On one side Bitcoin still depends on miners and big countries like china could have a significant motivation to do a 51% attack in 20 years. People could form a secret org and take over Bitcoin. Bitcoin would require a lot more independent people to mine which people actually don't care for.

And on the other hand a Blockchain itself is only trustworthy inside it's Blockchain. It's easy to send trustworthy money around but the fraud doesn't happen when exchanging the money it happens when real life items are getting exchanged. Bitcoin doesn't help here. The same issue is with smart contracts.

And the best solution is actually PoS. Our current fiat system is not perfect but by far the most stable system we have.

And yes Bitcoin is also not suddenly fixing/solving inflation problems etc.

Re: Ask HN: Could Bitcoin be replaced by an ERC-20 token?

#28

Post by latchkey »

joneholland wrote: post #26
latchkey wrote: post #23

Earlier quoted context omitted.

Yes, however today, this is done in a centralized way. You have to ask for permission to get that loan. DeFi does this in a collateralized decentralized way. If I have bitcoin, I can borrow against that bitcoin without having to walk into a bank and fill out reams of paperwork.

Tell me you’ve never taken out a margin loan without telling me you’ve never taken out a margin loan. There is no paperwork. I can withdraw enough cash from my brokerage to buy a house through my phone and in only the time for an ach to post. Entirely collateralized by my assets. I regularly float 250k intraday for free through margin to support trading. You don’t need defi for this. The defi kids are reinventing tra…

Recently, as a long time customer, I got in on the Backblaze IPO. I had to open up a Fidelity account. In order to do so, I had to drive into a local office and fill out stacks of paperwork while a twenty-something kid watched me. There was no option to even gasp, fax it in.

It sounds like you setup your brokerage account a long time ago and forgot about the paperwork.

You see it as a bad thing, but I'm fine with "defi kids" re-inventing trad fi. Just like Uber did to the taxi industry... despite Uber being a shit company.

The fact that I can already take out a loan against my bitcoin for a fraction of a cent in the span of a single transaction (seconds), without calling anyone, seems like it isn't so poorly done after all. That seems like some real progress.

Re: Ask HN: Could Bitcoin be replaced by an ERC-20 token?

#29

Post by landemva »

joneholland wrote: post #26
latchkey wrote: post #23

Earlier quoted context omitted.

Yes, however today, this is done in a centralized way. You have to ask for permission to get that loan. DeFi does this in a collateralized decentralized way. If I have bitcoin, I can borrow against that bitcoin without having to walk into a bank and fill out reams of paperwork.

Tell me you’ve never taken out a margin loan without telling me you’ve never taken out a margin loan. There is no paperwork. I can withdraw enough cash from my brokerage to buy a house through my phone and in only the time for an ach to post. Entirely collateralized by my assets. I regularly float 250k intraday for free through margin to support trading. You don’t need defi for this. The defi kids are reinventing tra…

That works for those living somewhere with good rule of law.

I live in USA, so a letter crafted by IRS or child support enforcement to a financial institution is all that is needed to wrongly steal my funds. After my funds are stolen, it is difficult to fight back. Lack of rule of law.

Re: Ask HN: Could Bitcoin be replaced by an ERC-20 token?

#30

Post by npc12345 »

Deritiod wrote: post #27
sMarsIntruder wrote: post #25

Bitcoin is here to stay since it is the only real decentralised system. I know that you guys will say now “bitcoin maximalist”, but hey, ETH is becoming a centralised shitcoin. Just get over it. One last thing: PoS will NEVER be as much as good as PoW. So please document yourself a little bit more regarding energy consumption and what Bitcoin CAN help solving. Nothing is black or white.

Bitcoin is not solving anything really. People think that PoW just solved the trust issue but it has not. On one side Bitcoin still depends on miners and big countries like china could have a significant motivation to do a 51% attack in 20 years. People could form a secret org and take over Bitcoin. Bitcoin would require a lot more independent people to mine which people actually don't care for. And on the other hand…

https://www.endthefud.org
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