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Comment by polotics | Hacker News Reader

The backlash against crypto is seriously heating up. This one goes to the long list of obituaries. Quote: """Meanwhile, with bitcoin demonstrably a more expensive and arduous network to manage than the standard fiat currency network, bitcoin can only become some sort of luxury payment system where users pay a premium for the privilege of using it.""" The joke about fiat currency will beobvious the day hyperinflation happens. But of course it never does. Just bog standard seigniorage I guess...

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I was going to write something similar. It is extremely odd timing to write that the same week bitcoin is getting upgraded to be able to compete with VISA level payment networks.

Its like, sure, maybe any other time over the last eight years. But even then it would have been disingenuous to suggest that was the death knell of the concept, since it can be upgraded.

> what happens to the core bitcoin business case once all known operators, exchanges and dealers have to abide by exactly the same regulations that govern conventional currency.

See... this is the sort of question that I love to hear. It's a shining example of the weakness and bias of the current system: it's only a problem to transact bitcoin if you're trying to exchange it to a gov't issued currency.

there's a chain of reasoning that starts at "if my grocer could just sell me groceries for bitcoin" and ends at "yeah, I guess property taxes will continue to need to be paid in gov't issued currency"

at the end of that chain is the catastrophic tipping point where hyperinflation happens. maybe we'll neuter the war machine when we get there... who knows.

Hyperinflation of government-issue currency or bitcoin?

How is Bitcoin more expensive and arduous to manage than, say, Visa's huge infrastructure?

Bitcoin can only support a limited number of transactions per block. If there are more desired transactions then their is room for, then the transaction fees will rise until demand falls to meet supply. This is happening, and the current dispute in bitcoin is how to increase supply.

But that's the cost of use, not management.

They are equal. The transaction fees go to miners. The difference between the value of fees and cost of mining is the miners profit. If the profit gets too large, new miners enter. This increases the cost of maintaining the network until it meets the net value of transaction fees (plus newly minted coins).

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