Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

A systematic critique of Bitcoin's value proposition

blog.rongarret.info

Post reply on HN
Print view View original

61–70 of 125 posts

Re: A systematic critique of Bitcoin's value proposition

#61

Post by pcthrowaway »

latchkey wrote: post #43
ghiculescu wrote: post #11

> In private discussions I have heard three counter-arguments, none of which I accept I think this article skips the most compelling (to me) counter argument. If there’s a 51% attack, the currency loses all value. Nobody will want to trade Bitcoin or use it as a currency once this attack is exploited. So a 51% attacker is disincentivized to perform said attack because doing so would make the prize lose its value. Now…

> I suppose if your worry is a government trying to destroy Bitcoin, then that’s exactly how to do it… Andreas Antonopoulos - 51% Bitcoin Attack https://www.youtube.com/watch?v=ncPyMUfNyVM

Did you read the article?

Re: A systematic critique of Bitcoin's value proposition

#62

Post by JumpCrisscross »

SilasX wrote: post #26
JumpCrisscross wrote: post #20

Earlier quoted context omitted.

> short the coin Unacceptable counterparty risk and scale limits.

Even when buying puts on a regulated exchange like LedgerX, which custodies all the cash that would pay out on the bet?

> a regulated exchange like LedgerX, which custodies all the cash that would pay out on the bet

Bitcoin crashing would take out LedgerX. At that point, you’re an unsecured creditor. There is also legitimate question to them paying out a massive short after something like this.

Re: A systematic critique of Bitcoin's value proposition

#63

Post by checkdrain »

rattlesnakedave wrote: post #9
akira2501 wrote: post #3

Aside 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

[dead]

Re: A systematic critique of Bitcoin's value proposition

#64

Post by JumpCrisscross »

humanizersequel wrote: post #39
JumpCrisscross wrote: post #19

Earlier quoted context omitted.

> take a short position on a portfolio of financial stocks before launching the attack This is subject to detection and reversal. FX, credit and rates, on the other hand, could be massively exploited in a risk-on trade.

>This is subject to detection and reversal Why would it be reversed?

> Why would it be reversed?

Massive short placed right before a sudden financial disaster? It may not be reversed, but it will definitely be frozen and investigated.

Re: A systematic critique of Bitcoin's value proposition

#65

Post by pcthrowaway »

JumpCrisscross wrote: post #15
ghiculescu wrote: post #11

> In private discussions I have heard three counter-arguments, none of which I accept I think this article skips the most compelling (to me) counter argument. If there’s a 51% attack, the currency loses all value. Nobody will want to trade Bitcoin or use it as a currency once this attack is exploited. So a 51% attacker is disincentivized to perform said attack because doing so would make the prize lose its value. Now…

> a 51% attacker is disincentivized to perform said attack because doing so would make the prize lose its value North Korea and Russia heavily use crypto. If either does something super stupid, the Congress could create a credible commitment to repeatedly launching attacks on their payment networks, including Bitcoin. This isn’t some far-fetched threat.

I think the U.S. would be reluctant to do so (although I'd love it if they did), because they hold several billion dollars of bitcoin

Re: A systematic critique of Bitcoin's value proposition

#66

Post by yellowapple »

pcthrowaway wrote: post #4
amadeuspagel wrote: post #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?

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

Why would someone offer you that, though?

Re: A systematic critique of Bitcoin's value proposition

#67

Post by overthrow »

mrguyorama wrote: post #53
akira2501 wrote: post #3

Aside 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?

I love how everyone responding to you seems to think that this is fine because you can just continue dividing the currency, as if the problem is a technical one, and seem to be ignoring or unaware of the actual problem: Constant deflation is HORRIBLE for any economic system. By design it rewards early capital holders and punishes you for needing to make any transaction. It disincentivizes doing anything. You are alwa…

Sounds a lot like VTSAX. But somehow people still buy food and shelter even though they could put their money in VTSAX instead and get 7% returns.

Either way less spending sounds good to me. We could use a world with more saving and less consumerism.

Re: A systematic critique of Bitcoin's value proposition

#68

Post by JumpCrisscross »

pcthrowaway wrote: post #65
JumpCrisscross wrote: post #15

Earlier quoted context omitted.

> a 51% attacker is disincentivized to perform said attack because doing so would make the prize lose its value North Korea and Russia heavily use crypto. If either does something super stupid, the Congress could create a credible commitment to repeatedly launching attacks on their payment networks, including Bitcoin. This isn’t some far-fetched threat.

I think the U.S. would be reluctant to do so (although I'd love it if they did), because they hold several billion dollars of bitcoin

> the U.S. would be reluctant to do so (although I'd love it if they did), because they hold several billion dollars of bitcoin

And billions more in private losses. It should be something we’re reluctant to do. But things break in war.

Re: A systematic critique of Bitcoin's value proposition

#69

Post by pcthrowaway »

JumpCrisscross wrote: post #68
pcthrowaway wrote: post #65

Earlier quoted context omitted.

I think the U.S. would be reluctant to do so (although I'd love it if they did), because they hold several billion dollars of bitcoin

> the U.S. would be reluctant to do so (although I'd love it if they did), because they hold several billion dollars of bitcoin And billions more in private losses. It should be something we’re reluctant to do. But things break in war.

Devaluing bitcoin reduces the incentive to mine it, which I consider a net positive all around

Re: A systematic critique of Bitcoin's value proposition

#70

Post by lisper »

ghiculescu wrote: post #11

> In private discussions I have heard three counter-arguments, none of which I accept I think this article skips the most compelling (to me) counter argument. If there’s a 51% attack, the currency loses all value. Nobody will want to trade Bitcoin or use it as a currency once this attack is exploited. So a 51% attacker is disincentivized to perform said attack because doing so would make the prize lose its value. Now…

> a 51% attacker is disincentivized

You missed this:

"An attacker could leverage [a market crash] because they would have a certain amount of control over when news of the attack broke, so they could (for example) take a short position on a portfolio of financial stocks before launching the attack."

Post reply on HN