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In defense of cryptocurrency

blog.cryptographyengineering.com

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Re: In defense of cryptocurrency

#561

Post by Gatsky »

strofcon wrote: post #479
everfree wrote: post #184

Earlier quoted context omitted.

Productivity, entertainment, education, and creation are all subjective, just like the value of an entry in a ledger. I could say "I don't use Macs because I find I can't be productive with them." That's a subjective statement. Or I could say "I don't find it entertaining to sit in front of a Mac," or "I don't learn anything when I use a Mac," "I can't create anything valuable using a Mac." None of the properties you…

Value is subjective in many cases, yes, but there is still intrinsic value in the device itself, if we have to boil it down. You missed that bit - the intrinsic part is literally the metals of which the device is made. Even failing that, it's useful as a weighted object. You can get down to the nuts and bolts of a thing with intrinsic value, such that even in the vent that society collapses and there's no coordinated…

Bitcoin is used by people - for example in countries with capital controls or hyperinflation. It is also legal tender in El Salvador.

In any case your argument is a bit silly? There is an infamous Italian artist who sold tins of his own shit [1]. Would you like to argue that these tins are worth ‘something’ because I can empty the shit out and reuse the tin? I’ll take the bitcoin thanks.

[1] https://en.m.wikipedia.org/wiki/Artist's_Shit

Re: In defense of cryptocurrency

#562

Post by lottin »

forum_ghost wrote: post #521
lottin wrote: post #274

Earlier quoted context omitted.

By that I mean not easy to steal by anyone at gunpoint. The point is that money is not wealth. Wealth is the ability to consume goods and services. If you got stranded on a deserted island with a suitcase full of millions you'd still live in extreme poverty despite all your millions. Therefore securing crypto-currencies doesn't replace the need for securing actual wealth. On the contrary, it's an extra cost that its…

Note that should you be rescued the suit case full of millions will still worth millions. The suitcase, stuffed with medium of exchange, holds value across time. This is the key concept to understand the issue at hand. For a medium of exchange to become useful, it must first become able to hold value , preferably long term, months/years. The only way an asset can do that, if there is demand to hold the asset for long…

Maybe I misunderstood you, but I thought your point was that it's okay if maintaining the bitcoin network is very expensive because securing the GDP is even more expensive, which is a flawed argument, because bitcoin doesn't remove the need for securing the GDP. Bitcoin's performance needs to be evaluated according to how it compares to other monetary systems in terms of cost-effectiveness, not against the cost of securing GDP.

Regarding the question of bitcoin's utility as money. The defining trait of money is that it's used widely as medium of exchange, not that it holds value. An asset has to hold value reasonably well, for it to be able to be used as money, but holding value is not what makes an asset money. Some assets depreciate quickly and don't hold value, but most don't, most assets do store value and yet are not money. Is bitcoin a good store of value? No, it isn't, because a good store of value not only has to hold value over long periods, it also needs to have low volatility. Using a high volatility asset such as bitcoin as a store of value, means there's a big chance you may forced to sell it at times when its market price is well below your purchase price.

Lastly, I don't know what "bitcoin's velocity" is. As far as I know, the velocity of money is a concept from the Quantity Theory of Money. The basic assumption that this theory makes is that GDP is sold and paid for with money. If you wanted to apply QTM to bitcoin, first you'd need to locate a country that sells its entire GDP in bitcoin, and only then you could calculate bitcoin's velocity, in principle. This velocity would be specific to this country. Then again, I'm not aware that such a country exist, so I don't know what you mean by bitcoin's velocity or why it is relevant to this conversation.

Re: In defense of cryptocurrency

#563

Post by ephbit »

lottin wrote: post #558
ephbit wrote: post #538

Earlier quoted context omitted.

> The answer to dysfunctional governments is not get rid of the government. As you're probably aware, central banks are usually intended to operate somewhat indepentently from governments. (One could argue to which degree it's actually the case, though.) Which means that monetary systems are supposed to be somewhat indepentent from governments. Assuming that Bitcoin were to be adopted as some kind of reserve currency…

Central banks are public institutions in charge of conducting monetary policy, they have a public mandate and are accountable to the legislative branch. They're therefore part of the government, even if they have some degree of independence. Bitcoin undermines governments. For example, bitcoin adoption would seriously limit the government's ability to manage the economy via monetary policy. It would also affect its a…

> Bitcoin undermines governments.

Bitcoin undermines certain possibilities of governments, yes.

As most western governments have been successfully hijacked by big corporations so that politics are skewed heavily in favor of the corporations' interests, it has become a tough decision IMO between:

- A: letting governments continue to be the executive branch of the Exxons, Apples, Googles, Facebooks, Amazons, ... and letting the latter continue with making few people richer and letting Gini coefficient converge to 1

- B: taking away governments' favorite (because in the beginning it's so nicely subtle that people won't object) instrument (more debt) to enact politics and thus forcing them to make uncomfortable choices instead

The current system appears to be instable (at least to me). Instability hurts more than continuity, everything else being equal. Bitcoin could become either an effective threat to discipline governments to not let their spending get out of hand or the very foundation to build a new stable monetary system.

We'll see. If it turns out to be more stable, people/institutions will in the long term converge to it.

> ... and a larger chunk of the economy would go underground.

Which is exactly what needs to happen (ideally not in a crash but in a soft transition) in order to get humanity's ecological foot print to a sustainable size in the short time that's left. As soon as the economy has transitioned to sustainable processes, it may of course grow again, but right now, what we need is gentle shrinkage or "degrowth".

Re: In defense of cryptocurrency

#564

Post by SilasX »

mirceal wrote: post #534
SilasX wrote: post #511

Earlier quoted context omitted.

The way I would put it is, escrow is a workaround for the property system's inability to support smartcontract-like functionality. Because you can't have property conditionally transfer on certain triggers, you have to give it to a trusted escrow to actually execute the appropriate transfers, conditional on those triggers.

An escrow is a smart contract

My point there was that the key aspect that makes something a smartcontract is that it automatically causes the property transfer when certain triggers are met, in a sense that is just as real as in the system's normal property-transfer primitives.

Escrow, as it has conventionally existed, tries to accomplish that same thing, but isn't quite that thing. In the moment, the escrow agent must themself manually initiate the "triggered" property transfers, and is capable of violating the rules, hence why they have to be a trustworthy party. Sure, they can be sued later, but in the moment they can effect the transfer.

This is substantively different from a smartcontract where that all happens automatically.

Re: In defense of cryptocurrency

#565

Post by ForHackernews »

sireat wrote: post #408
lumannnn wrote: post #390

Earlier quoted context omitted.

You probably should look at different numbers than just the dollar price. Number of nodes is rising, number of wallets is rising, number of hash-power is rising. Also, please look into the "Lightning Network". It's the second layer on top of Bitcoin and that's where the whole ecosystem scales (in terms of numbers of transactions per second). Cheap, scalable and fast transactions. Adoption is happening in many places.

I would be highly interested in finding a serious shop/commerce/ecommerc operation where Lighting Network is actually used. I check LN every 6 months or so and situation is not looking so great. As it was with Bitcoin itself in early 2010s the shops advertising crypto acceptance are doing it mostly for publicity/ideological reasons or actually have stopped existing. So I check: https://acceptlightning.com/map.html Ra…

https://www.btctimes.com/insight/room77-the-berlin-bar-boots...

Re: In defense of cryptocurrency

#566

Post by danans »

randomhodler84 wrote: post #145
tptacek wrote: post #64

Earlier quoted context omitted.

I'm not disputing the claims the article makes, I'm just saying: it's not an especially persuasive reason to support cryptocurrency; if the problem is simply "bring transaction costs down for the working poor", there are much simpler ways to do that. Meanwhile: the cryptocurrencies we have today are causing ongoing harm.

What harm?

By using as much energy as Argentina.

Re: In defense of cryptocurrency

#567

Post by invasivemullet »

shakes_mcjunkie wrote: post #345
invasivemullet wrote: post #235

Earlier quoted context omitted.

[dead]

Hilariously sad to see this, where crypto has gone from an idea of economic freedom to economic handcuffs. Imagine the even more nightmarish world where a person on welfare has their entire economic life controlled by a completely faceless, heartless algorithm.

I understand your point from a politically liberal perspective. However, in a social market system, earmarked funds and appropriated money is already flowing through the financial system, e.g., agricultural EU funding or even donations: not using them for the assigned purpose may be considered fraud, which can be legally punishable. So some parts of society seem to have agreed that under certain circumstances using money not for the assigned purpose is not desirable. And programmable money could support that.

Re: In defense of cryptocurrency

#568

Post by cableshaft »

mckmk wrote: post #554
cableshaft wrote: post #524

Earlier quoted context omitted.

There are ways to make upgradeable smart contracts but it wasn't really formalized until recently (there's now open contracts you can import into your projects to enable upgrades). Additionally, a lot of the community are against upgradeable contracts because they theoretically can be upgraded to something totally different, and they prefer immutability, with all its potential warts. Some projects use upgradeable con…

Thank you cableshaft. I appreciate you taking the time to share your thoughts. FWIW I also think general protocols on long lived platforms and IPFS are great. BUT, I really don't think the blockchain has a role to play solving any of the issues you laid out. The reason the game you mentioned was able to continued to be played was because Apple was providing the network. The minimum ETH write fee is almost always at l…

I would agree it's not necessarily the best solution, but corporations have proven over and over again that they can't be trusted to steward data long-term.

I wish there was something kind of like bit torrent that lived on people's computers that helped maintain a certain amount of data for every person if they wanted to (even if it's just text data, like journals or stories or a simple message to future people that might stumble across it, whatever), that would remain even when they're gone, and can be accessed by people who do searches by certain types of metadata (or by name), and didn't cost any money or web 3 tokens or crap to keep the platform going. That would be my preferred method. I've even been tempted to work on building such a solution at times.

But until then, web 3 seems to have the better solution to what's already out there at the moment.

Re: In defense of cryptocurrency

#569

Post by toolz »

tromp wrote: post #560
toolz wrote: post #420

Earlier quoted context omitted.

are you aware of what it means to "burn" bitcoin? It's simply putting the coins in a wallet and destroying the keys. For all we know, these coins have already been "burned"

No, burning is sending coins to an obviously unspendable address.

that isn't possible in bitcoin - there are no "obviously unspendable addresses"

like I said, the best you can do is burn the private keys, but that isn't verifiable - you can't prove something doesn't exist

Re: In defense of cryptocurrency

#570

Post by adderx »

Jurat.io is a startup that has solved the transaction irreversibility problem without introducing trusted intermediaries. Instead their process follows court rulings about digital assets in particular blockchain accounts.

In a sense the courts are occupying a position of authority but it’s the same authority that courts have over all property, digital and traditional.

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