A systematic critique of Bitcoin's value proposition
blog.rongarret.info
A systematic critique of Bitcoin's value proposition
1–10 of 125 posts
Re: A systematic critique of Bitcoin's value proposition
#2> In the third section I analyze its security model, specifically the cost of mounting a 51% attack on the assumption that hash power is available for rent and doesn't need to be purchased by the attacker.
Bitcoin mining requires special devices (ASICs). These ASICs would lose their value if Bitcoin lost its value. Given this fact, why would anyone rent them out, or rent out the hash power?
Re: A systematic critique of Bitcoin's value proposition
#3Aside from Satoshi's hoard.. there's also just regular destruction. Units can be mined and then permanently lost. The system has a limited number of units that can be generated in total and no mechanism to replace the lost units.
Why is this not a long term problem for bitcoin?
Re: A systematic critique of Bitcoin's value proposition
#4> In the third section I analyze its security model, specifically the cost of mounting a 51% attack on the assumption that hash power is available for rent and doesn't need to be purchased by the attacker. Bitcoin mining requires special devices (ASICs). These ASICs would lose their value if Bitcoin lost its value. Given this fact, why would anyone rent them out, or rent out the hash power?
If your hash power typically translates to $X per day and someone offers you 2X $ to rent the hash power for a day, I suspect most people would rent them out
Re: A systematic critique of Bitcoin's value proposition
#5Aside from Satoshi's hoard.. there's also just regular destruction. Units can be mined and then permanently lost. The system has a limited number of units that can be generated in total and no mechanism to replace the lost units. Why is this not a long term problem for bitcoin?
[deleted]
Re: A systematic critique of Bitcoin's value proposition
#6Aside from Satoshi's hoard.. there's also just regular destruction. Units can be mined and then permanently lost. The system has a limited number of units that can be generated in total and no mechanism to replace the lost units. Why is this not a long term problem for bitcoin?
It's divisible down to 0.00000001.
If that ever became a significant issue I imagine users would be happy to increase the precision via a fork.
LN supports sub satoshi (i.e. higher precision) payments on L2.
If you're talking about the numbers getting super small and being unwieldy, most fiat currencies have the opposite problem of the numbers getting super large, they just redenominate every now and then.
Re: A systematic critique of Bitcoin's value proposition
#7> In the third section I analyze its security model, specifically the cost of mounting a 51% attack on the assumption that hash power is available for rent and doesn't need to be purchased by the attacker. Bitcoin mining requires special devices (ASICs). These ASICs would lose their value if Bitcoin lost its value. Given this fact, why would anyone rent them out, or rent out the hash power?
> mining requires special devices (ASICs)
Profitable mining does. If you’re looking to make money, you need ASICs. If you’re just looking to disrupt the network, e.g. for military purposes, commandeering a cloud or two would do.
Re: A systematic critique of Bitcoin's value proposition
#8Aside from Satoshi's hoard.. there's also just regular destruction. Units can be mined and then permanently lost. The system has a limited number of units that can be generated in total and no mechanism to replace the lost units. Why is this not a long term problem for bitcoin?
Because the units are highly divisible and the divisibility can be increased easily if it becomes necessary.
When someone loses/destroys bitcoin, they are effectively donating the value to everyone else who still holds bitcoin.
Re: A systematic critique of Bitcoin's value proposition
#9Aside from Satoshi's hoard.. there's also just regular destruction. Units can be mined and then permanently lost. The system has a limited number of units that can be generated in total and no mechanism to replace the lost units. Why is this not a long term problem for bitcoin?
Infinitely divisible
Re: A systematic critique of Bitcoin's value proposition
#10> In the third section I analyze its security model, specifically the cost of mounting a 51% attack on the assumption that hash power is available for rent and doesn't need to be purchased by the attacker. Bitcoin mining requires special devices (ASICs). These ASICs would lose their value if Bitcoin lost its value. Given this fact, why would anyone rent them out, or rent out the hash power?
> mining requires special devices (ASICs) Profitable mining does. If you’re looking to make money, you need ASICs. If you’re just looking to disrupt the network, e.g. for military purposes, commandeering a cloud or two would do.
> commandeering a cloud or two would do.
No; The ASICs are orders of magnitude faster and more efficient per dollar. Every GPU on earth couldn't touch the bitcoin hashrate.