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What Bitcoin’s White Paper Got Right, Wrong and What We Still Don’t Know (2018)

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Re: What Bitcoin’s White Paper Got Right, Wrong and What We Still Don’t Know (2018)

#131

It's important to remember that the main thing Bitcoin needs to maintain is it's monetary policy and you can find it at any time right here https://github.com/bitcoin/bitcoin/blob/master/src/validatio... Anyone can query at any time the total amount of Bitcoin that have been issued without relying on anyone. After downloading the Bitcoin client just run gettxoutsetinfo You can try to guess how many dollars have been…

As someone who mined a bunch of Bitcoin back in the early days, I can state that this is a completely ahistorical viewpoint.

Bitcoin was _absolutely_ touted as "digital cash" early on. The earliest transactions of Bitcoins were each news items in the community and the each new vendor that accepted it as payment was put forth as proof of Bitcoin's traction.

Also comparing it to Apple stock is misleading. Stock represents an ownership stake in the assets of a real-world entity. Bitcoin only has value to the extent that it is collectively agreed to have value; a trait shared with currencies (and commodities with little/no utility such as gold, cowrie shells, etc.)

Re: What Bitcoin’s White Paper Got Right, Wrong and What We Still Don’t Know (2018)

#132

It's important to remember that the main thing Bitcoin needs to maintain is it's monetary policy and you can find it at any time right here https://github.com/bitcoin/bitcoin/blob/master/src/validatio... Anyone can query at any time the total amount of Bitcoin that have been issued without relying on anyone. After downloading the Bitcoin client just run gettxoutsetinfo You can try to guess how many dollars have been…

You can try to guess how many dollars have been printed or how many bars of gold exist. No-one in their day-to-day usage of dollars (or gold) directly cares how many currency units exist. What they care about - and what is very easy to know, is what the purchasing power of their currency is.

> No-one in their day-to-day usage of dollars (or gold) directly cares how many currency units exist.

This is an artefact of economic policy and education that has brainwashed us into believing in the time value of money, that is "money now is worth more than the same amount of money in the future." This directly implies a preference for debt and consumption over saving. But the fact is that the purchasing power of a currency is a function of its supply relative to the productivity of the workers in the economy, not the discretionary consumption of individuals in the economy. That is, a currency is only useful to the extent that it allows us to value productivity accurately.

Productivity increases over time, therefore goods and services should become cheaper relative to dollars, that is, a constant amount of money I hold should be worth more — able to buy me more stuff — in the future than it is now.

If you don't care how many actual dollars exist, then fundamentally, you and all the other market actors have no way of discovering the true price of anything. It's all just guesswork, with someone else (the government) putting a thumb on the scale to increase asset prices. The price of what you just bought is whatever you were convinced to pay for it with varying relation to its actual value.

Consider: we don't actually know the value of houses. A couple goes to buy a house and immediately takes out a mortgage to pay >40% of the quoted price. So house owners are incentivised to quote higher prices because of mortgage availability. Contractors and developers similarly inflate prices of their services. Similarly with materials suppliers and landholders. The entire market is distorted because we don't know and don't care and are encouraged not to care how many dollars there are in existence relative to the productivity of humans.

It's not entirely an evil conspiracy in which most of us participate but it is a terrible accident humanity has found itself in.

So, think from first principles and ask yourself: what is the true value of the thing I just bought. It's a helpful exercise in day to day life.

Re: What Bitcoin’s White Paper Got Right, Wrong and What We Still Don’t Know (2018)

#134

It's important to remember that the main thing Bitcoin needs to maintain is it's monetary policy and you can find it at any time right here https://github.com/bitcoin/bitcoin/blob/master/src/validatio... Anyone can query at any time the total amount of Bitcoin that have been issued without relying on anyone. After downloading the Bitcoin client just run gettxoutsetinfo You can try to guess how many dollars have been…

The idea of bitcoin as a store of value and not a currency is a revisionist interpretation that became popular with the blockstream devs around 2017-18 when it became apparent that the bitcoin network was unsuitable for handling payments at scale and had fees too high to be useful for mundane payments.

Exactly! The first sentence from the original white paper is literally: "A purely peer-to-peer version of electronic cash would allow online payments to be sent directly from one party to another without going through a financial institution."

Bitcoin was intended to be MONEY, instead it's pretty fucking useless for anything other than hoarding.

I think it will remain an asset class, but history will not be kind to it. It's going to remain relevant and valuable as an "antique", but likely there will come a cryptocurrency that realizes the original goal at some point.

Re: What Bitcoin’s White Paper Got Right, Wrong and What We Still Don’t Know (2018)

#135

It's important to remember that the main thing Bitcoin needs to maintain is it's monetary policy and you can find it at any time right here https://github.com/bitcoin/bitcoin/blob/master/src/validatio... Anyone can query at any time the total amount of Bitcoin that have been issued without relying on anyone. After downloading the Bitcoin client just run gettxoutsetinfo You can try to guess how many dollars have been…

The idea of bitcoin as a store of value and not a currency is a revisionist interpretation that became popular with the blockstream devs around 2017-18 when it became apparent that the bitcoin network was unsuitable for handling payments at scale and had fees too high to be useful for mundane payments.

These days there's the Lightning Network - an off-chain "layer" that enables both fast and small, cheap transactions - perfect for "mundane payments" - and even micro-payments with Bitcoin. It's already usable and still improving.

Adoption will grow as the infrastructure continues to be built out. It's still early days for Bitcoin - no one sends AT commands to their modem to get online any more.

Re: What Bitcoin’s White Paper Got Right, Wrong and What We Still Don’t Know (2018)

#136
post #128

Earlier quoted context omitted.

> The price has continuously gone up overall at a rate greater than inflation. This is true but a) there's no reason to think this will be true for another 10 years, and b) if you had invested in November 2013, you wouldn't have seen a profit until 2017. 4 years of being in the red is a hard pill to swallow if you're not diversified. Things that might look really bad for months, but work out in the end are better inv…

> if you had invested in November 2013 Cherry picking the singularly worst point. > 4 years of being in the red is a hard pill to swallow For which you would've been rewarded with nearly all of the months since 2017 with 500%+ gain, and as of now and also for quite a number of months since 2017, 1000%+ gain. > there's no reason to think this will be true for another 10 years Just one more bull run like those previous…

>if history comes close to repeating itself

History didn't come close to repeating itself with Tulips, Beanie Babies, or Pokemon Cards.

Re: What Bitcoin’s White Paper Got Right, Wrong and What We Still Don’t Know (2018)

#137
post #93
post #14

Earlier quoted context omitted.

I was going to say drugs, ransom, money laundering and other illegal activities are the main use cases for crypto

They also all happened before crypto. But no one spoke about the evils of fiat currency then.

What do I, a regular Joe not interested in buying illegal things, gain from using bitcoin? What's the proposition? Where's the value?

Re: What Bitcoin’s White Paper Got Right, Wrong and What We Still Don’t Know (2018)

#138

Earlier quoted context omitted.

that's not why gold is valuable, historically. Historically gold is valuable because it's rivalrous, fungible, and most importantly, easily verifiable. You can assess approximate purity of the metal with very low-level technology ( https://en.wikipedia.org/wiki/Touchstone_(assaying_tool) ). Transactions thus have a lowered barrier of trust. Before gold and money, you could only transact in debt to labor (see debt: 50…

This is correct. Gold is the original “it’s valuable because everyone agrees it is,” and retains that first mover advantage. Over the centuries there have been numerous challengers. Almost all (silver being a notable exception) failed.

Indeed. That does not negate its base value even in barter. (Though it's much lower.)

And especially items made with the use of gold can get really worthwhile - such as semiconductor chips...

So in a funny indirect way, Bitcoin is tied to gold. Both of which are tied to specific costs of labour. Bitcoin however requires a lot of expensive infrastructure to run to be worth anything. (Esp. networking, required to ensure no fake mined bitcoins are in circulation.)

Even printed cash is better at this.

Re: What Bitcoin’s White Paper Got Right, Wrong and What We Still Don’t Know (2018)

#139

It's important to remember that the main thing Bitcoin needs to maintain is it's monetary policy and you can find it at any time right here https://github.com/bitcoin/bitcoin/blob/master/src/validatio... Anyone can query at any time the total amount of Bitcoin that have been issued without relying on anyone. After downloading the Bitcoin client just run gettxoutsetinfo You can try to guess how many dollars have been…

hodl my pokemon card

Re: What Bitcoin’s White Paper Got Right, Wrong and What We Still Don’t Know (2018)

#140
post #83

Earlier quoted context omitted.

It's not tax evasion if the hops are non taxable events, and the privacy of wallets enable anyone to deny it. This is why Bitcoin is an existential threat to government power. I personally think it's empowering and great for the individual, however if you tend towards more statist views then this would seem like anarchy.

Many of our governments are liberal democracies. It sounds less positive when you rephrase it like that; ie: "Bitcoin is a threat to liberal democracy" I don't want some drug lord to pump/dump/coerce/tax-evade their way into being the richest person on my continent, and then hire an army to take my nation over. That is easier with crypto currency than it is with fiat. The tech community dropped the ball in the '90s b…

Yeah I think those are valid concerns.

The ideal case would be a hybrid system of state fiat and cryptocurrencies where liberal democracies incentivize their citizens to use fiat through better governance and services while also respecting the sovereignty of individuals to accumulate value that cannot be debased by dumb political decisions.

Why not both?

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