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Bitcoin Is Time

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Re: Bitcoin Is Time

#291

Post by krrrh »

thewarrior wrote: post #137
olah_1 wrote: post #69

This is the article that made things finally click with me. Thinking about the pre-WWI gold standard and the issues that existed there and the improvements that Bitcoin brings around time, consensus, etc. The baseless negative comments with no interaction with the article content confirms for me that Bitcoin is on to something. Sour grapes syndrome is a result of pride, I think.

I recently decided to think deeply about Bitcoin and I think my initial skepticism about Bitcoin was wrong. Most of the criticisms of Bitcoin are centered around the fact that Bitcoin has a very low throughput. However this is not necessarily a problem. And here is one hypothetical example of how we can overcome this issue: When countries owe each other money they used to transfer gold back and forth or trust someone…

One of the properties of gold that roughly held true for centuries was a stable value. When gold threatened to become too scarce for a growing economy the incentive to mine, explore, and develop new mining technology increased. Goldbugs often point out that an ounce of gold has always been close to the price of a nice suit (admittedly a fuzzy measure, and it’s sometimes a really nice suit, and sometimes just a really nice jacket).

Bitcoin has gone from pennies, to around $100 for a year, to around $1000 for a year or two, to between $20000 and $3000 for a few years, and now to $50-60k.

I guess you could argue that this is just going to take a few decades to stabilize, but that’s a pretty big bet, and a pretty weird way to design the next monetary framework.

There was a pretty interesting Clubhouse discussion on the weekend where Eric Weinstein praised the genius of Bitcoin but bemoaned the stupidity of its design (“a QWERTY problem”), and Lex Fridman tried to charitably compare Bitcoin to JavaScript as a flawed tech that had great distribution and has been making the best of it since then. They were both rudely dismissed by a group of Bitcoin maximalists as “not getting it”.

The question I’ve asked since the start is, if this is a functional idea, why is the dumb beta version still the dominant implementation? There’s a bizarre religiousity and post hoc rationalizations for some of the weirdest decisions in its design, and mistaking speculative mania and nominal price for success, while proposed uses for Bitcoin and the blockchain have been quietly discarded. Bitcoin’s valuation is more of a symptom of post-2008 monetary conditions than a long-term challenge to them.

Re: Bitcoin Is Time

#292

Post by shawnz »

cyphertruck wrote: post #278
shawnz wrote: post #221

Earlier quoted context omitted.

> Also remember if you have wealth in bitcoin you would mine at a loss merely to secure your own bitcoin. You could also send null transactions which do nothing but pay a transaction fee

Null transactions require mining. The question is if nobody wants to mine who will mine? Old mining chips are already so cheap they cost less than a cheap bitcoin transaction. It would not cost much to mine just to preserve the value of your holdings.

The point of submitting the transaction would be to incentivize mining by posting a bounty for it, in the form of a transaction fee. It would be just like paying other people to mine at a loss on your behalf.

Re: Bitcoin Is Time

#293

Post by betterunix2 »

WanderPanda wrote: post #282
gnrlst wrote: post #210

I'm ready to be downvoted to oblivion, especially by all the Bitcoin purists, but I hope my message sparks at least some curiosity. Bitcoin is getting "weaker" every year for several reasons: - emerging centralization due to economies of scale. If this trend continues the mining power will be so consolidated that a 51% attack will be likely. The Nakamoto coefficient is already at 4, and tending towards 3. - energy us…

But a 51% attack (with e.g. a double spend) will be easily spotted by the community, right? What would be the incentive for an actor with such a vast amount of specialised hardware just for Bitcoin mining, to undermine its security? Its not that I'm saying it is not possible but its your usage of "likely" that I would argue against

You are assuming that the attacker would not gain more from a general loss of faith in Bitcoin than they would gain from controlling Bitcoin itself. That is a bad assumption. What if the attacker is trying to push a competing system? What if the attacker holds short Bitcoin futures contracts?

Re: Bitcoin Is Time

#294

Post by vntok »

Retric wrote: post #271
cyphertruck wrote: post #264

Earlier quoted context omitted.

First off, thank you for making fair criticisms. Unfortunately some of your information is old. You don’t need a bitcoin backed token, lightning does it. Transaction rates are not artificially kept low. In fact most the vast majority of the time bitcoin has excess capacity. Privacy- this is a legitimate concern but it is improving, slowly. Taoroot and Lightning are both privacy improvements. So your daily transaction…

> Transaction rates are not artificially kept low. You can look it up, larger blocks where allowed in the past, 1MB is a completely arbitrary size that was overkill at the time but hasn’t increased. Even 1$ transactions are quite expensive though they are often much higher. The lighting network has it’s own separate set of issues. It’s Bitcoin backed but loses some of Bitcoins advantages: https://arxiv.org/pdf/2006.0…

Generalized mesh networks should solve this problem quite nicely in the next decade.

Re: Bitcoin Is Time

#295

Post by freeone3000 »

krrrh wrote: post #291
thewarrior wrote: post #137

Earlier quoted context omitted.

I recently decided to think deeply about Bitcoin and I think my initial skepticism about Bitcoin was wrong. Most of the criticisms of Bitcoin are centered around the fact that Bitcoin has a very low throughput. However this is not necessarily a problem. And here is one hypothetical example of how we can overcome this issue: When countries owe each other money they used to transfer gold back and forth or trust someone…

One of the properties of gold that roughly held true for centuries was a stable value. When gold threatened to become too scarce for a growing economy the incentive to mine, explore, and develop new mining technology increased. Goldbugs often point out that an ounce of gold has always been close to the price of a nice suit (admittedly a fuzzy measure, and it’s sometimes a really nice suit, and sometimes just a really…

Because it's the one that's caught on. There's no actual need for inherent utility of it that can't be papered over by running everything through one of a few big exchanges. Or, preferably, ONE big exchange, where all settlements can take place off-chain and the blockchain sits in a big vault and everyone just trusts you can redeem your account balance for Bitcoin if you ever want it, but you won't want it, because the balance is more valuable than the actual Bitcoin.

(I'm drawing a comparison to gold here, but this is also true for other commodities, and for that matter, stocks.)

Re: Bitcoin Is Time

#296

Post by tarsinge »

gnrlst wrote: post #210

I'm ready to be downvoted to oblivion, especially by all the Bitcoin purists, but I hope my message sparks at least some curiosity. Bitcoin is getting "weaker" every year for several reasons: - emerging centralization due to economies of scale. If this trend continues the mining power will be so consolidated that a 51% attack will be likely. The Nakamoto coefficient is already at 4, and tending towards 3. - energy us…

> The lightning network is incredibly buggy and won't actually solve the problems it's promising.

Not an expert but I found that a readable summary of different layer 2 scaling strategies and why Ethereum developers prefer Rollups instead of Channels (like Lightning):

https://vitalik.ca/general/2021/01/05/rollup.html

Re: Bitcoin Is Time

#297

Post by shawnz »

toto444 wrote: post #290
shawnz wrote: post #269

Earlier quoted context omitted.

The value of every currency is expressed in other currencies. How else would you do it? Are you saying there is nothing in existence which can really be considered "money" except maybe the US dollar?

If suddenly every land on Earth but the UK is flooded, £1 will still have a value : the set of goods you can buy with £1.

How is that different from Bitcoins? If suddenly every land on Earth but one is flooded, and some people there happen to use Bitcoins (in addition to their other assets, probably), Bitcoins will still have a value too. Same with gold and everything else besides the fiat currencies of the sank countries.

Re: Bitcoin Is Time

#298

Post by anthropodie »

That was an excellent read!

Every time I read about Bitcoin here, I see the "Energy" arguments. Bitcoin was designed to solve a specific problem and it solves that. Even Satoshi himself would not have foreseen the energy requirements for PoW.

If we had argued about energy requirements in late 60s we would have never reached Moon or built the LHC. Technological advancements will always need energy. We should be discussing about how to efficiently harness that big fiery ball in space instead of shutting down technological advancements.

Re: Bitcoin Is Time

#299

Post by cyphertruck »

tomp wrote: post #279
cyphertruck wrote: post #185

Earlier quoted context omitted.

To answer that question you have to make assumptions about the cost of mining, the cost of attacks and the cost of hash power at a point 117 years from now. But we know in the future hash power (technology) will be cheaper and thus bitcoin security will be cheaper, while bitcoin will be more valuable (or non-existing — it has to be either or). Also remember if you have wealth in bitcoin you would likely mine at a los…

> But we know in the future hash power (technology) will be cheaper and thus bitcoin security will be cheaper, This is not in line with my understanding if BTC. The difficulty adjusts automatically, so the real cost isn’t hashing, but energy. And there is no inherent reason why any less energy would be spent/wasted on mining/securing BTC (assuming it will be worth more than today).

The costs of mining are both capital to acquire the equipment and replace it when it is obsolete... and energy. It’s not just energy. Recently that capital cost is about %50 of OpEx, but of course it varies. We cannot predict the future cost of electricity, but we can predict that technology will get cheaper, more generic and thus more ubiquitous. This is what I meant by “cheaper”.

I expect it will be cheap the way wifi is cheap on a raspberry pi. They just include it because you may use it and it’s cheaper to include it than to make both a version with and a version without the WiFi module. (If you inly use WIFI, then the sane argument goes for the redundant-to-you ethernet port.)

You are right about difficulty factor, but that just adjusts how fast blocks are won based on past 2 weeks.

Even when price of BRC has crashed, hash power doesn’t instantly go away.

Also an attack lets you re-organize recent blocks only. Increased depth gets more expensive pretty quick.

If mining chips are cheap and ubiquitous, then an attack us very hard, because you have to beat all the existing honest chips with your attack.

If mining is cheap to attack, the rewards of such an attack will be low.

If bitcoin is valuable, it will be expensive to attack.

Re: Bitcoin Is Time

#300

Post by sphix0r »

gnrlst wrote: post #210

I'm ready to be downvoted to oblivion, especially by all the Bitcoin purists, but I hope my message sparks at least some curiosity. Bitcoin is getting "weaker" every year for several reasons: - emerging centralization due to economies of scale. If this trend continues the mining power will be so consolidated that a 51% attack will be likely. The Nakamoto coefficient is already at 4, and tending towards 3. - energy us…

It's really sad to see the current state of bitcoin. We can't really justify the current energy consumption while mainly being used as a financial instrument to speculate on.

Nano has been on my eye for a while now. I hope Nano will get the attention it deserves. Sub second feeless money settlement transactions is such a game changer. Nano just works.

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