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Taleb: Bitcoin, Currencies, and Bubbles

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Re: Taleb: Bitcoin, Currencies, and Bubbles

#61

Post by acdha »

lowkey wrote: post #43
tsimionescu wrote: post #40

Earlier quoted context omitted.

Bitcoin and all proof of work systems can barely replace the transaction processing of a small bank, nevermind all of the other operations, while consuming more energy than many entire countries.

El Salvador is the example that proves you wrong. They are using Lightning Network on top of Bitcoin to scale to enormous transaction volume - enough to run an entire country with plenty of room to spare. Proof of work pays for network security, not Tx volume - the most secure super-computer ever invented. Transaction processing is a free side-benefit. With Lightning, TX Processing scales to meet any arbitrary needs.

El Salvador could be the example but it’s far from proven. It definitely shows that Bitcoin really doesn’t scale: getting remotely competitive speed and cost requires giving up the decentralization vision and using Lightning network companies which are banks in all but name.

Re: Taleb: Bitcoin, Currencies, and Bubbles

#63

Post by haskellandchill »

lowkey wrote: post #60
haskellandchill wrote: post #59

Earlier quoted context omitted.

> Bitcoin eliminates counter party risk and international transfer risk citations are a two way street buddy

Fair enough .. Bitcoin is a peer-to-peer network that does not rely on any third party to function - hence no counter-party risk. Bitcoin operates based on rules, but has no rulers, only participants of various flavors. Bitcoin doesn’t understand or recognize borders. There is no country-code input field in a bitcoin transaction. Bitcoin doesn’t care if you are sending Bitcoin to your friend across the street or Nort…

Do you know what a citation is?

Re: Taleb: Bitcoin, Currencies, and Bubbles

#64

Post by prepend »

mypastself wrote: post #49
prepend wrote: post #33

Earlier quoted context omitted.

It’s such strange advice to buy a currency early. Just the utterance of such a thing shows how these aren’t good currencies. Imaging how stupid someone would be to generally give advice to “buy some Euro” or “buy some Dollar.”

In Ethereum, the currency’s role is of secondary importance. Instead, it’s intended to primarily be in the service of the “world computer”. You’d acquire Ether for its value as an asset rather than a currency.* But even so, would you say it’s stupid to advise a Turk to buy dollars? These past few years, many of them have been exchanging lira for dollars as protection against inflation. *In practice, the network is st…

I meant generally advise, like to tell a whole forum of strangers to do it.

And even advising a Turk to buy dollars would depend heavily on the Turk’s particular situation and would likely mean not buying dollars as an investment but as a hedge against other things.

Re: Taleb: Bitcoin, Currencies, and Bubbles

#65

Post by lowkey »

haskellandchill wrote: post #63
lowkey wrote: post #60

Earlier quoted context omitted.

Fair enough .. Bitcoin is a peer-to-peer network that does not rely on any third party to function - hence no counter-party risk. Bitcoin operates based on rules, but has no rulers, only participants of various flavors. Bitcoin doesn’t understand or recognize borders. There is no country-code input field in a bitcoin transaction. Bitcoin doesn’t care if you are sending Bitcoin to your friend across the street or Nort…

Do you know what a citation is?

Yes but I provided an logically consistent explanation instead. Perhaps you would prefer I cite the Bitcoin Whitepaper which explains the peer-to-peer censorship resistent electronic cash as explained by the inventor Satoshi Nakamoto [1].

[1] https://bitcoin.org/en/bitcoin-paper

Re: Taleb: Bitcoin, Currencies, and Bubbles

#66

Post by tsimionescu »

lowkey wrote: post #43
tsimionescu wrote: post #40

Earlier quoted context omitted.

Bitcoin and all proof of work systems can barely replace the transaction processing of a small bank, nevermind all of the other operations, while consuming more energy than many entire countries.

El Salvador is the example that proves you wrong. They are using Lightning Network on top of Bitcoin to scale to enormous transaction volume - enough to run an entire country with plenty of room to spare. Proof of work pays for network security, not Tx volume - the most secure super-computer ever invented. Transaction processing is a free side-benefit. With Lightning, TX Processing scales to meet any arbitrary needs.

How many people are actually using Lightning network in El Salvador at the moment? Also, isn't using Lightning Network over Bitcoin essentially equivalent to using Visa's payment network over the traditional banking system - i.e. a completely separate system, with entriely different trust characteristics and entriely different trusted entities?

People using LN are not transacting using Bitcoin. They are denominating their transactions in Bitcoin, and trusting LN to eventually convert to Bitcoin (at the huge bitcoin transaction cost) if/when they eventually need it. Even worse, most people will not use LN directly, they will use yet another third party, one that will operate a bitcoin wallet and LN channel for them (likely the same wallet and channel for many, many different people).

Re: Taleb: Bitcoin, Currencies, and Bubbles

#67

Post by ephbit »

QuadrupleA wrote: post #44
errantmind wrote: post #5

Earlier quoted context omitted.

Something can be overvalued without being worthless. Also, the environment argument is inconclusive. Using a lot of power isn't the problem, it is how the power was generated and whether or not it was excess capacity

Even if the electricity were 100% generated by wind farms and solar panels, what a colossal waste of it - rather than helping humanity it goes to feed racks of millions of red hot machines to solve useless hash puzzles all day. It's like feeding vast amounts of wood into an ever growing fleet of steam engines that just travel in circles all day, and once every 10 minutes one of the trains throws off a piece of gravel…

Some whataboutism .. individual people expend energy for countless things that are useless or even harmful to many others. Most people in the west are totally egoistic when it comes to the sheer amount of energy/resources they use/consume. > "... what a colossal waste."

Compared to all this, the energy/environmental footprint of bitcoin is laughably tiny.

IMO bitcoin does indeed have the potential of solving a global problem (not easily manipulatable reserve currency) .. that'd be a political/economic benefit that would justify a non trivial expenditure of resources. We'll see in the future whether it can come true. The experiment itself appears already useful to me. More useful than many other things humans have done. Yeah, totally subjective.

Re: Taleb: Bitcoin, Currencies, and Bubbles

#68

Post by lowkey »

tsimionescu wrote: post #66
lowkey wrote: post #43

Earlier quoted context omitted.

El Salvador is the example that proves you wrong. They are using Lightning Network on top of Bitcoin to scale to enormous transaction volume - enough to run an entire country with plenty of room to spare. Proof of work pays for network security, not Tx volume - the most secure super-computer ever invented. Transaction processing is a free side-benefit. With Lightning, TX Processing scales to meet any arbitrary needs.

How many people are actually using Lightning network in El Salvador at the moment? Also, isn't using Lightning Network over Bitcoin essentially equivalent to using Visa's payment network over the traditional banking system - i.e. a completely separate system, with entriely different trust characteristics and entriely different trusted entities? People using LN are not transacting using Bitcoin. They are denominating…

> How many people are actually using Lightning network in El Salvador at the moment?

My understanding is that they are onboarding something like 20,000 new users per day through community trainings and bootcamps.

Re: Taleb: Bitcoin, Currencies, and Bubbles

#69

Post by x4e »

xiphias2 wrote: post #32
x4e wrote: post #25

Earlier quoted context omitted.

Bitcoin is more just used to refer to cryptocurrency in general. I think most people seriously using cryptocurrency these days do not use bitcoin.

No it isn't. When I'm sending money to Colombia and WorldRemit app takes 10% of my money, it means 10% less food to cook for my girlfriend and her family. She can't get a job since the pandemic, and I have other friends in Colombia with the same problem, they are desperate... some times I just send $40, and they say that it saves their life, it's so bad there right now.

If you are sending 40$ over Bitcoin the fees will Be far more than 10% (4$). Checkout Nano or Stellar Lumens if you want to send small amounts of money without fees.

Re: Taleb: Bitcoin, Currencies, and Bubbles

#70

Post by verall »

lowkey wrote: post #57
verall wrote: post #47

Earlier quoted context omitted.

The point of a fiat is that it slowly loses value, so wealth holders can't get bigger and bigger just by holding the fiat, they are forced to invest to break even. Bitcoin is not "fixing" anything here, a currency that deflates forever is a dumb idea.

So you consider it a feature of fiat that it is impossible for a saver to maintain their purchasing power over time unless they risk their capital on volatile assets such as stocks or real estate? Why is is a good thing that widows, orphans, those living in poverty or on a fixed income have no way to save without having to Risk their principal? The only ones who benefit from inflationary fiat currencies are those clo…

> widows, orphans, those living in poverty or on a fixed income have no way to save

This has got to be the laziest rebuttal - think of the orphans!

Those living in poverty, definitionally, have less money than the not-impoverished. A deflationary currency gives value proportional to whomever is holding it. There is no incentive to loan money, as holding this deflationary currency is risk free growth.

Certainly, the government printing fiat could direct those funds in undesirable or corrupt ways, but this is possible whether the fiat currency is deflating or inflating. A currency that is always deflating will be subject to the tyranny of wealth holders, who now have no incentive to put any of that wealth back into the economy, absent a wealth tax or something.

Fiat already has momentum, it can purchase goods and services, which can be used to create value. It can pay taxes. It does not also need to be self-compounding through deflation.

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