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Bitcoin is "Worse is Better"

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Re: Bitcoin is "Worse is Better"

#11

Post by icebraining »

tptacek wrote: post #8
kiba wrote: post #6

Earlier quoted context omitted.

- meaningless as currency: I am actually not sure how elegance plays into that at all, so I have no cute analogy to rpg's Unix/ITS system calls. The wasted computing power is inherent to the system of avoiding double-spending (I also spent some time discussing this), but that's not related to Bitcoin being worthless or not as a currency. Any damn thing can be currency, after all; currencies are as currencies do. It w…

In this comment I would like to propose "Flitcoin". Flitcoin is nearly identical to bitcoin, with exactly one difference. In Flitcoin, instead of brute forcing a nonce through SHA-256(x) to find hashes with a suitable prefix of 0's, Flitcoin brute forces a nonce through HMAC-SHA256("bananas", x) to find hashes with a suitable suffix of 1's. Please explain to me why my Flitcoin is inferior to your Bitcoin. As you do s…

Bitcoin already has users and Flitcoin doesn't?

Re: Bitcoin is "Worse is Better"

#12

Post by tptacek »

icebraining wrote: post #11
tptacek wrote: post #8

Earlier quoted context omitted.

In this comment I would like to propose "Flitcoin". Flitcoin is nearly identical to bitcoin, with exactly one difference. In Flitcoin, instead of brute forcing a nonce through SHA-256(x) to find hashes with a suitable prefix of 0's, Flitcoin brute forces a nonce through HMAC-SHA256("bananas", x) to find hashes with a suitable suffix of 1's. Please explain to me why my Flitcoin is inferior to your Bitcoin. As you do s…

Bitcoin already has users and Flitcoin doesn't?

So, marketing? Ok! I'll just run a 2-for-1 sale on Flitcoin.

Less snarkily: why are people using Bitcoin? What's the intrinsic value they see in Bitcoin? Based on what evidence can they predict that Bitcoins purchased today will be convertible to gold, dollars, or even toenails at any valuation? You've begged the question.

Re: Bitcoin is "Worse is Better"

#13

Post by icebraining »

tptacek wrote: post #12
icebraining wrote: post #11

Earlier quoted context omitted.

Bitcoin already has users and Flitcoin doesn't?

So, marketing? Ok! I'll just run a 2-for-1 sale on Flitcoin. Less snarkily: why are people using Bitcoin? What's the intrinsic value they see in Bitcoin? Based on what evidence can they predict that Bitcoins purchased today will be convertible to gold, dollars, or even toenails at any valuation? You've begged the question.

>You've begged the question.

No, you just asked a different question.

>What's the intrinsic value they see in Bitcoin?

Well, free transfers, for one, and not being subject to having your money frozen by online payment companies (e.g. Paypal).

Re: Bitcoin is "Worse is Better"

#14

Post by tptacek »

icebraining wrote: post #13
tptacek wrote: post #12

Earlier quoted context omitted.

So, marketing? Ok! I'll just run a 2-for-1 sale on Flitcoin. Less snarkily: why are people using Bitcoin? What's the intrinsic value they see in Bitcoin? Based on what evidence can they predict that Bitcoins purchased today will be convertible to gold, dollars, or even toenails at any valuation? You've begged the question.

>You've begged the question. No, you just asked a different question. >What's the intrinsic value they see in Bitcoin? Well, free transfers, for one, and not being subject to having your money frozen by online payment companies (e.g. Paypal).

"Free transfers" isn't an intrinsic value of Bitcoin. It's a benefit you get by supposing that Bitcoin has some intrinsic value.

What's the intrinsic value? Why is Bitcoin unlikely to be worth $0 in 10 years? Because it is spectacularly unlikely that gold will be worth $0 in 10 years, and similarly unlikely that a dollar will be. Virtually any trader in the world would take the other side of that bet.

Re: Bitcoin is "Worse is Better"

#15

Post by browep »

tptacek wrote: post #12
icebraining wrote: post #11

Earlier quoted context omitted.

Bitcoin already has users and Flitcoin doesn't?

So, marketing? Ok! I'll just run a 2-for-1 sale on Flitcoin. Less snarkily: why are people using Bitcoin? What's the intrinsic value they see in Bitcoin? Based on what evidence can they predict that Bitcoins purchased today will be convertible to gold, dollars, or even toenails at any valuation? You've begged the question.

Here's a nice concrete example. You start a content/news blog/site. Instead of selling adspace you charge for your content by the pageview. Now how much are people willing to spend per pageview ? Probably not very much. Let's say The tools to do this are currently in the pipeline or are really not that hard to devise. This is what bitcoin offers that others don't. Forget anonymity or libertarian arguments, 0 transaction costs are extremely disruptive.

Re: Bitcoin is "Worse is Better"

#16

Post by tptacek »

browep wrote: post #15
tptacek wrote: post #12

Earlier quoted context omitted.

So, marketing? Ok! I'll just run a 2-for-1 sale on Flitcoin. Less snarkily: why are people using Bitcoin? What's the intrinsic value they see in Bitcoin? Based on what evidence can they predict that Bitcoins purchased today will be convertible to gold, dollars, or even toenails at any valuation? You've begged the question.

Here's a nice concrete example. You start a content/news blog/site. Instead of selling adspace you charge for your content by the pageview. Now how much are people willing to spend per pageview ? Probably not very much. Let's say The tools to do this are currently in the pipeline or are really not that hard to devise. This is what bitcoin offers that others don't. Forget anonymity or libertarian arguments, 0 transact…

This is an application of Bitcoin. It says, "well, people want something that promises what Bitcoin promises; therefore, Bitcoin must be intrinsically valuable". But it's obvious why that isn't true. Flitcoin promises precisely the same things.

Re: Bitcoin is "Worse is Better"

#17

Post by browep »

tptacek wrote: post #16
browep wrote: post #15

Earlier quoted context omitted.

Here's a nice concrete example. You start a content/news blog/site. Instead of selling adspace you charge for your content by the pageview. Now how much are people willing to spend per pageview ? Probably not very much. Let's say The tools to do this are currently in the pipeline or are really not that hard to devise. This is what bitcoin offers that others don't. Forget anonymity or libertarian arguments, 0 transact…

This is an application of Bitcoin. It says, "well, people want something that promises what Bitcoin promises; therefore, Bitcoin must be intrinsically valuable". But it's obvious why that isn't true. Flitcoin promises precisely the same things.

i'm not really worried about the intrinsic value of bitcoin, it goes up, it goes down, it doesn't matter. You don't have to store your wealth in bitcoin, USD goes in USD goes out when you want it to at usually 0.5% transaction cost ( or less some places ). And there's no reason Flitcoin can't succeed in the same places. I'm not sure why that would have anything to do with intrinsic value or why intrinsic value is of paramount importance.

Re: Bitcoin is "Worse is Better"

#18

Post by icebraining »

tptacek wrote: post #14
icebraining wrote: post #13

Earlier quoted context omitted.

>You've begged the question. No, you just asked a different question. >What's the intrinsic value they see in Bitcoin? Well, free transfers, for one, and not being subject to having your money frozen by online payment companies (e.g. Paypal).

"Free transfers" isn't an intrinsic value of Bitcoin. It's a benefit you get by supposing that Bitcoin has some intrinsic value. What's the intrinsic value? Why is Bitcoin unlikely to be worth $0 in 10 years? Because it is spectacularly unlikely that gold will be worth $0 in 10 years, and similarly unlikely that a dollar will be. Virtually any trader in the world would take the other side of that bet.

Let me preface this by saying that I'm very ignorant about this subject.

>What's the intrinsic value? Why is Bitcoin unlikely to be worth $0 in 10 years?

Why does a currency require a value as anything other than a currency to be expect to have value?

Bitcoin offers a useful service. There's is no reason to believe this service will stop being useful in 10 years. Therefore, it's reasonable to expect a demand for Bitcoin in 10 years, making it worth more than $0.

>Because it is spectacularly unlikely that gold will be worth $0 in 10 years

Isn't most of gold's value based on its demand as a currency? If people stopped buying gold just to trade and store value, wouldn't current gold owners lose immensely?

Re: Bitcoin is "Worse is Better"

#19

Post by bdr »

tptacek wrote: post #2

The logic in this post appears to be: 1. "Notice how Bitcoin has a minimal-to-nonexistent cryptographic pedigree". 2. "Here are many criticisms of the system ranging from 'it is difficult to scale' to 'it is completely meaningless as a currency', many of them from cryptographers who have studied cryptocurrencies for over a decade". 3. "Notice how Bitcoin is currently popular". 4. "Therefore, Bitcoin is worse-is-bette…

As long as we're talking about Bitcoin, mind clarifying your criticisms?

it almost totally fails to achieve its security objectives, that it exploits a misperception about anonymity to handwave away the fact that for most users it is not anonymous

Are these the same -- both referring to the mere pseudonymity of addresses?

it is reliant on centralized infrastructure

How so? My understanding is that anyone can generate a new block, it's just (linearly) more likely to be you the more CPU you have.

and (most importantly) that it is meaningless as a currency

This seems like the weakest criticism. There are many conventions that work simply because they are conventions. In other words, they are self-supporting. Bitcoin has bootstrapped to the point where such a convention exists, and people are productively using it as a currency. This may not be the level of rigor you're used to in your work, but it seems plausible that a convention like Bitcoin could last for a significant period of time before collapsing.

Re: Bitcoin is "Worse is Better"

#20

Post by tptacek »

bdr wrote: post #19
tptacek wrote: post #2

The logic in this post appears to be: 1. "Notice how Bitcoin has a minimal-to-nonexistent cryptographic pedigree". 2. "Here are many criticisms of the system ranging from 'it is difficult to scale' to 'it is completely meaningless as a currency', many of them from cryptographers who have studied cryptocurrencies for over a decade". 3. "Notice how Bitcoin is currently popular". 4. "Therefore, Bitcoin is worse-is-bette…

As long as we're talking about Bitcoin, mind clarifying your criticisms? it almost totally fails to achieve its security objectives, that it exploits a misperception about anonymity to handwave away the fact that for most users it is not anonymous Are these the same -- both referring to the mere pseudonymity of addresses? it is reliant on centralized infrastructure How so? My understanding is that anyone can generate…

The dollar isn't a currency simply by convention. Neither is gold. It only seems that way in the frictionless vacuum of message board arguments.
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