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

Cryptocurrency in the 2020s

blog.coinbase.com

Post reply on HN
Print view View original

201–210 of 278 posts

Re: Cryptocurrency in the 2020s

#201

Post by gl00pp »

spir wrote: post #174
ianferrel wrote: post #29

Earlier quoted context omitted.

Seriously. The risk adjusted return on whatever that crazy contraption is is almost certainly negative, and probably incalculably so. The idea that any sane financial instrument could increase its return by two points by the holders of it voting to do so is... I haven't the words.

> whatever that crazy contraption is The people who built "that crazy contraption" are pioneers in an industry that is going to help lift hundreds of millions out of poverty via cheap, non-predatory financial services and create trillions in wealth by further unifying the global market. I am somebody who spends hundreds of hours per year reading about Ethereum and blockchain. I could stop doing this whenever I want,…

Ethereum is a centralized shitcoin

Re: Cryptocurrency in the 2020s

#202

Post by nootropicat »

aazaa wrote: post #72

The trouble with this article is that the author doesn't seem to know what Bitcoin is for. Notice the vague treatment of actual cryptocurrency applications. There are lots of predictions about startup activity, "flippenings" and venture capital, but little about the goods and services customers will actually be buying, or what specifically startups will be building. It's this kind of thinking that leads people into t…

>censorship-resistant money

It's not, the majority of hash power is in China. That means the Chinese government could start censoring bitcoin transactions in a week if they wanted to - by orphaning non-compliant blocks. Regardless of anything else, this centralization alone makes bitcoin a failed experiment.

https://cointelegraph.com/news/study-chinas-btc-miners-contr...

Re: Cryptocurrency in the 2020s

#204

Post by kerkeslager »

aazaa wrote: post #72

The trouble with this article is that the author doesn't seem to know what Bitcoin is for. Notice the vague treatment of actual cryptocurrency applications. There are lots of predictions about startup activity, "flippenings" and venture capital, but little about the goods and services customers will actually be buying, or what specifically startups will be building. It's this kind of thinking that leads people into t…

This is literally the first comment on Hacker News I've seen that seems to actually understand the implications of decentralization. It's apparent to me that many people who are trying to profit on it don't actually understand why decentralization is desirable for some people. It's a foreign concept to many that there are motivations other than financial gain. Many attempts to "innovate" with Bitcoin are constantly trying to do things that are already solved with centralized systems, and end up working around decentralization.

> Startups will play a marginal role at best because their ultimate aim of monopolization flies in the face of what Bitcoin was designed to do.

I'd go further with this and say that decentralization is an active impediment to startups trying to create monopolies in the crypto space.

I think there's still room for development, but it will be hard for it to be motivated by profit. Particularly, a better-executed namecoin could be revolutionary if people started building infrastructure around it (i.e. as usernames, or a DNS replacement).

Re: Cryptocurrency in the 2020s

#206

Post by [deleted] »

jrimbault wrote: post #69
Geee wrote: post #32

Earlier quoted context omitted.

Yes, but every bitcoin is divided into 100000000 satoshis, and it's possible to add even smaller units in the future.

Who and/or what decides by what mechanisms and when satoshis would be divided into smaller units ? Doesn't that make it virtually valueless by definition ?

[deleted]

Re: Cryptocurrency in the 2020s

#207

Post by lawn »

hnews_account_1 wrote: post #116
JohnJamesRambo wrote: post #91

Earlier quoted context omitted.

I find it hilarious you think Coinbase CEO Brian Armstrong doesn't "know what Bitcoin is for." Maybe you don't know what it is for. People that are sane like Mr. Armstrong and Satoshi Nakamoto intended it to be used as a currency. If Satoshi is still alive I'm sure he was quite disappointed when Bitcoin decided to not scale past its blistering 7 transactions per second. "Bitcoin can already scale much larger than tha…

Every single crypto that has tried to pass that limitation has remained centralised in one way or another. You can either: 1) have centralisation 2) assume storage space will expand exponentially since the entire point of bitcoin is many many copies of its ledger 3) come up with a new method more secure than PoW but still decentralised Good luck with (3). (1) and (2) are not good choices. So they moved it off the cha…

No, the idea is to not force everyone to have a complete copy of the blockchain. This is already the case as most use light wallets or SPV wallets.

"Decentralization" is a means to an end. Not everyone have to run a full node, as long as there's enough.

It's amusing that LN is touted as a solution, since decentralized routing is an unsolved problem, meaning that LN will be more centralized than what it's supposed to solve.

Re: Cryptocurrency in the 2020s

#208

Post by foepys »

pixelperfect wrote: post #105
JohnJamesRambo wrote: post #91

Earlier quoted context omitted.

I find it hilarious you think Coinbase CEO Brian Armstrong doesn't "know what Bitcoin is for." Maybe you don't know what it is for. People that are sane like Mr. Armstrong and Satoshi Nakamoto intended it to be used as a currency. If Satoshi is still alive I'm sure he was quite disappointed when Bitcoin decided to not scale past its blistering 7 transactions per second. "Bitcoin can already scale much larger than tha…

Bitcoin is continuing to scale, but it's doing so with the Lightning Network instead of by increasing block size. I'm not super familiar with Bitcoin's tech, but that seems sensible to me. The blockchain is already 250 GB at 7 transactions per second. If you multiplied that by 100, you still have orders of magnitude less transactions per second than credit card processors, but the hardware requirements are now high e…

The Lightning Network is a pipedream of ivory tower developers. People who think LN can scale Bitcoin into a global currency rivaling USD and EUR either don't understand LN or are lying on purpose.

Fact is that each LN "channel" needs a committed amount of Bitcoin that can only be withdrawn by closing the channel. If you want your Bitcoins "secured" in you wallet, you need to close the channel. Otherwise you will - by design - have to constantly monitor the LN for malicious actors trying to withdraw you funds from your channels - which by the way is also only possible with an extremely reliable internet connection. Ultimately it's only possible to "secure" your funds against malicious actors by closing the channel. This leads to nice DoS attack vectors, see below.

Opening and closing a channel requires an on-chain transaction. This means when you only calculate with the US population, you need at least ~700 million on-chain transactions per month, assuming people get paid once a month, which is absolutely underestimating reality. Also assuming business don't trade with each other.

Assuming 7 transactions per second for the Bitcoin network (which in reality is much closer to 3 by the way), you get 7×60×60×24×30 = 18,144,000 transactions per month. So LN cannot even serve 5% of the US.

Reading the LN white paper should give you an idea on how bad it is when you compare it to reality and how people are actually using money.

Re: Cryptocurrency in the 2020s

#209

Post by kerkeslager »

nootropicat wrote: post #202
aazaa wrote: post #72

The trouble with this article is that the author doesn't seem to know what Bitcoin is for. Notice the vague treatment of actual cryptocurrency applications. There are lots of predictions about startup activity, "flippenings" and venture capital, but little about the goods and services customers will actually be buying, or what specifically startups will be building. It's this kind of thinking that leads people into t…

>censorship-resistant money It's not, the majority of hash power is in China. That means the Chinese government could start censoring bitcoin transactions in a week if they wanted to - by orphaning non-compliant blocks. Regardless of anything else, this centralization alone makes bitcoin a failed experiment. https://cointelegraph.com/news/study-chinas-btc-miners-contr...

Well, first, "censorship-resistant" doesn't imply "censorship-proof".

Second, I don't think we can conclude what would happen if China tried to censor.

China certainly has 51% attack capability against Bitcoin, but the only implication that of that which is clear to me is that they could potentially execute double-spends. Using 51% attack capability to orphan transactions is different.

With a double spend, there's two transactions, both signed with the same key, and no way to determine which is valid (which came first). There's no source of truth for that information.

With an orphaned block, there's only one transaction signed with the key, so you have a single source of truth. You know the transaction exists, and at some point (i.e. after a certain number of blocks), if the transaction isn't included in the chain, you can conclude with reasonable certainty that the transaction is being intentionally orphaned. This allows you to reject the chain that doesn't include the transaction as invalid, and choose the longest chain that does include it. We already don't blindly follow the longest chain: for example, blocks that are improperly formatted are already rejected.

This would, of course, having different criteria for what is considered a valid block would cause fork in the currency. There would be the Chinese censored branch and the uncensored branch everyone else is using. But for a lot of reasons, I think people would be unwilling to trade as much traditional currency for the Chinese censored currency as they would for uncensored Bitcoin.

Re: Cryptocurrency in the 2020s

#210

Post by RustyRussell »

dane-pgp wrote: post #166
hnews_account_1 wrote: post #152

Earlier quoted context omitted.

I should've phrased that better. What I meant was to assume consumer affordable storage space will increase in size exponentially i.e. if we pay $0.01 / GB today, we should be paying fractions of that fraction in a year (because obviously "exponential" is loose term here). > (ignoring things like High Frequency Trading) HFT is not a blockchain transaction. They are off blockchain transactions entirely because they tr…

> The point of bitcoin is that everyone should have a copy of every transaction (excluding lightning network transactions). Is that the point of bitcoin? Satoshi said: > Long before the network gets anywhere near as large as that, it would be safe for users to use Simplified Payment Verification (section 8) to check for double spending, which only requires having the chain of block headers, or about 12KB per day. Onl…

Except SPV as Satoshi described doesn't work, so the trade-off becomes "can users simply trust miners" to which the answer from experience is a resounding "no".
Post reply on HN