Bitcoin is fiat money, too • Hacker News Board

Re: Bitcoin is fiat money, too

#71

Post by gobengo » Sat, Sep 23, 2017, 12:58 AM UTC

subroutine wrote: post #63

This isnt directly related to the article, but I have two questions about ICO coins I was hoping someone here could answer. I read that recently a group raised millions of dollars in less than a minute to fund the creation of a new web browser. 1. How are coins valued when the underlying company is building a product it will never be able to, or never intends to monetize (eg if Wikipedia had an ICO). 2. If another co…

1) The organization selling the coins more or less says "hey who wants to buy these for $1 each" and somewhere between zero and lots of people buy them. Once I buy one, I can sell it to anyone else for any price. Then the invisible hand does its thing 2) Well the coins themselves can't really be changed. Any actually enforcable obligation on the purchased company wrt to those tokens would ostensibly be acquired as well

I think the big risk with lots of ICOs these days is even if some discerning investors pass, there are still lots of folks buying in as described in #1. And a lot of times it's really unclear what leaglly enforcable obligations actually exist wrt #2.

Re: Bitcoin is fiat money, too

#72

Post by vit05 » Sat, Sep 23, 2017, 1:01 AM UTC

velodrome wrote: post #49

How does Bitcoin work offline? Let's say the world goes to hell (assume internet has been taken offline) and we need to trade using a form of trusted currency. Just curious...

How does Dollar work offline? How much do you have in your pants? Because if the world goes offline, Banks would not have all the "money" necessary to give it back to people.

Re: Bitcoin is fiat money, too

#73

Post by sumedh » Sat, Sep 23, 2017, 1:02 AM UTC

> The currency survived a crisis of credibility after a bug was discovered in 2016

This is my primary worry with cryptocurrency, what if there is a bug in the code which do unexpected things and destroy the value completely.

Re: Bitcoin is fiat money, too

#74

Post by vkou » Sat, Sep 23, 2017, 1:04 AM UTC

ojr wrote: post #24

Fiat money with better programming apis and permissions

Worse apis and permissions, because there is no way to recover from bugs in your code.

Unless you hard-fork.

Re: Bitcoin is fiat money, too

#75

Post by aviv » Sat, Sep 23, 2017, 1:04 AM UTC

Finnucane wrote: post #20

dnautics wrote: post #18

Interestingly the economist misses the traditional definition of Fiat: a currency whose value is determined by the Fiat of a state. Whether or not Bitcoin exhibits similar trends as currency that isn't backed by the state is immaterial to the ethical appeal (to some) of a medium of exchange where participation is voluntary and consensual.

Is Bitcoin actually a medium of exchange? It seems to be functioning more as an investment to be hoarded rather than spent.

Right, the same people telling you it's going to $100K are the ones saying this is a digital currency that should be spent. Well, I sure ain't about to spend $100K to buy 2 MacBook Pros.

Re: Bitcoin is fiat money, too

#76

Post by brndnmtthws » Sat, Sep 23, 2017, 1:05 AM UTC

sumedh wrote: post #73

> The currency survived a crisis of credibility after a bug was discovered in 2016 This is my primary worry with cryptocurrency, what if there is a bug in the code which do unexpected things and destroy the value completely.

Same can be said of every technology.

Besides, what's interesting is that it has survived major bugs, again and again. Doesn't that say something? Seems quite resilient to me.

Re: Bitcoin is fiat money, too

#77

Post by psyc » Sat, Sep 23, 2017, 1:06 AM UTC

julian_1 wrote: post #67

psyc wrote: post #54

Earlier quoted context omitted.

It doesn't work at all without the peer network. However, you might be able to construct an "IOU" of sorts by creating a signed transaction offline, to be fed to the network later. (I'm not 100% sure whether anti-replay features make this impractical.)

Offline signing is common, so theoretically you could print the transactions and private-key to the account/utxo on paper and use them as physical promissory/bearer notes. Unfortunately though, it's the network that verifies the absence of double spends, so there's no guarantee of uniqueness. With the no internet, and limited interbank settlement, I would still bet on the value of crypto over the fiat inflation that…

Ah, I hadn't thought of that. You still couldn't double-spend on the network, but you could double-spend the offline IOUs :)

Re: Bitcoin is fiat money, too

#78

Post by snappyTertle » Sat, Sep 23, 2017, 1:11 AM UTC

sumedh wrote: post #73

> The currency survived a crisis of credibility after a bug was discovered in 2016 This is my primary worry with cryptocurrency, what if there is a bug in the code which do unexpected things and destroy the value completely.

This actually happened to Ethereum. They ended up forking the blockchain to Ethereum and Ethereum Classic.

Re: Bitcoin is fiat money, too

#79

Post by DINKDINK » Sat, Sep 23, 2017, 1:11 AM UTC

velodrome wrote: post #49

How does Bitcoin work offline? Let's say the world goes to hell (assume internet has been taken offline) and we need to trade using a form of trusted currency. Just curious...

>How does Bitcoin work offline?

Depends on the stage of evolution of Bitcoin you're in.

Early Stage: two parties can still trade transactions offline but there's a risk of being double spent against (not completely trustless but not fully trusted).

Second early stage option is: A solution that attempts to prove that private keys to the bitcoin hasn't even been accessed before: https://opendime.com/

Late Stage: Assume Lightning Network connectivity. Since the payment channels in the LN prevent you from double spending coins (attempting to assign UTXO to a different party than your counter party), all you really need to do is issue a channel update and issue a preimage to a hash time locked contract HTLC

Re: Bitcoin is fiat money, too

#80

Post by kobeya » Sat, Sep 23, 2017, 1:11 AM UTC

snitko wrote: post #23

kobeya wrote: post #11

Earlier quoted context omitted.

The price doesn’t define the success of bitcoin.

Well what does? More people using it and interested in it? Doesn't define success. More merchants accepting it? Doesn't define success. More governments paying attention to it? Doesn't define success. What on earth would define success? It's like nothing is ever enough for you people.

It existing and being available for those who truly need decentralized money. It's a bit like saying the success of Tor is when X% of the internet's traffic is over Tor. No, the value of Tor comes from just existing and working when it is needed. Likewise Bitcoin provides something very different from fiat money, and success for bitcoin is retaining those properties and availability as needed.