Cryptocurrency Evolution
blog.ycombinator.com
blog.ycombinator.com
"Simply put, fragility is aversion to disorder. Things that are fragile do not like variability, volatility, stress, chaos, and random events, which cause them to either gain little or suffer. A teacup, for example, will not benefit from any form of shock. It wants peace and predictability, something that is not possible in the long run, which is why time is an enemy to the fragile. What’s more, things that are fragile respond to shock in a nonlinear fashion. With humans, for example, the harm from a ten-foot fall in no way equals ten times as much harm as from a one-foot fall. In political and economic terms, a $30 drop in the price of a barrel of oil is much more than twice as harmful to Saudi Arabia as a $15 drop.
"For countries, fragility has five principal sources: a centralized governing system, an undiversified economy, excessive debt and leverage, a lack of political variability, and no history of surviving past shocks. Applying these criteria, the world map looks a lot different. Disorderly regimes come out as safer bets than commonly thought—and seemingly placid states turn out to be ticking time bombs.
That being said, the part that really threw the rest of the book into question for me was that Taleb is very anti-academia and spends several pages in the book claiming that academia had basically zero involvement in the development of computers, which just sounds like he'd never heard of Alan Turing, Charles Babbage, Ada Lovelace, John von Neumann, John McCarthy, and many others.
It really made me wonder how much of the rest of the book he was claiming to be an authority on could be trusted, even though most of it seemed to make sense intuitively.
I think these people are holding society back. So I hope that they will read articles like this.
I’ve read a bit on crypto currencies over the past 2 years to try and wrap my head around all of this.
Reading articles like this, it seems like the whole thing is more philosophical in nature versus utilitarian.
A currency’s role is to function as some mechanism for the transfer of value from one person to another. But in order for this transfer to occur, both parties must recognize the underlying asset.
With cryptocurrency forks, it seems this doesn’t seem to offer enough stability most people would transactionally want.
Other than the obvious speculative desires by the parties involved, how will crypto currencies evolve into becoming mainstream?
-Then people used placeholders instead of goods to barter, like precious gems or sea shells
-Then people used gold coins
-Then people used government approved gold coins
-Then people used government approved fiat currency backed by gold
-Then people used government approved fiat currency backed by nothing
-> Now comes the fancy technology
-Then people don't even use paper anymore they use credit cards, essentially moving numbers around in files or computers
-Then people don't even use credit cards anymore they use accounts like PayPal
...but all of these are fundamentally transferring around fiat USD currency
Well the next iteration is for them to skip fiat and transfer around digital currency so no governments control you at all. Cryptocurrencies are truly global currencies, the only ones that will ever matter. There have been proposals in the past to introduce global fiat currencies, but that's an age long gone - it's too late for anyone to bother with anything but cryptocurrencies
They are decentralized, non-censorable (just make a new wallet, buy crypto in person, then use Tor), deflationary (fixed supply = rising in price over time, the opposite of fiat)
The list of benefits goes on and on. It's a foregone conclusion that cryprocurrencies are the future, it's only a matter of time. The technology is not yet mature but once someone makes a venmo-like app that the normies can use to easily utilize crypto, it's game over for every other system, period
Swiss bank account on your flash drive, swiss bank account in your BRAIN if you memorize your wallet seed phrase. The utility is indescribably large and we will have to fundamentally change our entire government and taxation system to be consumption based (sales taxes not income taxes) once this becomes mainstream, there is no stopping it
I'd expect that a fork will exist if: a) it has a nontrivial chance of survival, and b) if there is an exchange mechanism for cashing out.
Another way of looking at it, what scenario creates an incentive for a fork to die once it has been created? There's no such thing as free money.
On the other hand, forking is a way of bootstrapping a new cryptocurrency variant without becoming a billionaire like Satoshi and needing to worry about would-be adopters questioning your motives.
The "exploit" of forking to generate a wealth multiplier generates a lot of wealth, just not Satoshi level wealth.
In a sense, forking is a signal of too much centralization, as those benefitting from that centralization fork to cash out on their accumulated influence.
With such a large percentage of cryptocurrency economic activity being speculation, the incentive to fork is ripe. On the other hand, if Satoshi wanted to sell of all his Bitcoin Cash and sink it, he could easily do so to protect his original creation, so perhaps we learn more about Satoshi's stewardship intent by watching what he doesn't do rather than what he does.
If mining fees get low enough to not be profitable, mining will cease and the fork will be dead (even if the chain still exists on inactive Nodes).
>Because doing so multiplies the person's wealth.
I don't think you can necessarily extrapolate this. In theory this should be something like when a public company splits or pays a dividend; the value of the parts should be equal to the whole.
You're correct that it's not that way right now. That probably speaks to the inefficiency of the cryptocurrency markets currently but I would hope that that will improve.
As the article says, this worked once but don't expect it to work indefinitely. Arguably forks that allow new use cases (e.g. Bitcoin Cash is supposed to re-enable low-value transactions) create value while other forks (e.g. Ethereum Classic, Bitcoin Gold) should be more zero-sum.
what scenario creates an incentive for a fork to die once it has been created?
Looks like the death process is low exchange volume -> delisting -> zero liquidity -> zero value. https://medium.com/@EthereumRussian/why-cryptocurrencies-get...
I could eventually figure it out with enough time, but how any of this is supposed to be adopted by laymen baffles me. You'd think something with this much developer support would just let you click one button and have it all done.
Really it's for the financial processors. Personally I view the benefit of Bitcoin and its ilk to be the efficiency, transferability and accountability that comes with the blockchain. Those willing to invest time and energy can also carry raw bitcoins in their safe if they so choose, but this is a far way away from being accessible to the layman.
Think HTML. How many laypeople know HTML? Yet they get the benefit of the web thanks to all of the developers that have built services using it. Those services wouldn't be available without it.
And, although not everyone needs this, for those of us that have been in the situation of doing international money transfers, they are a huge pain, unreasonably expensive, and slow too. Bitcoin puts pressure on all this, and I believe we're already seeing companies pop up that offer transfers in your preferred currency but are using Bitcoin behind the scenes to settle the transfers.
BCC has "replay protection" meaning it uses a different transaction signing mechanism than BTC so that your transactions on one network cannot be "replay"ed on the other network by a malicious actor. I think people obsessing over keeping your coins in wallets with differing keys is mostly just paranoia. e.g. they want to eliminate threat vectors from their BCC wallet trying to steal BTC or that replay-protection may have bugs discovered in the future (unlikely AFAIK).
The clean computer thing is also paranoia. Some folks keep an updated Linux LiveUSB just for their transactions. You can decide for yourself it it's worth the risk.
As far as finding a new wallet, a quick Googling makes it seem that MultiBit uses BIP32 to generate keys. This is an open-source keyword based key generator that's used by various wallets, so you have a lot of options for multi-coin wallets, I'm a fan of coinomi on mobile. If you recreate your wallet using keywords there, it will show your BTC and BCC side by side.
In the case of Bitcoin, it's not clear yet who it's going to keep the name at the next fork. You can see Coinbase blog post about this https://blog.coinbase.com/clarification-on-the-upcoming-segw...
Brands are words that need to be trademarked, but "a cow" does not need to be, because everyone knows what a cow is, and if I sell you what I say is a cow but is actually a cat and then explain that that's now the established brand - you'd say it's cat, not a cow.
The test for Bitcoin is very simple - fire up an old version of the Bitcoin software, and if it validates the blockchain, then the blockchain you have is Bitcoin. If it doesn't, it's not Bitcoin.
And if/when Bitcoin Core ever changes the software such that it is a hard, backwards incompatible fork, then on that day they should stop referring to it as Bitcoin, because it is not the Bitcoin that Satoshi originally started.
If you mean starting an older version of Bitcoin Core after the on-disk storage has been converted by a newer version, then yes, of course. The way data is stored has changed, not the least of changes being Leveldb instead of Berkleydb.
But at the network level newer nodes will communicate with older pre-Segwit nodes just fine.
Breaking the ability of the network to follow a valid majority chain is breaking backward compatibility. It's disingenuous to claim otherwise simply because the forked version eventually ended up with the longest chain.
From https://github.com/bitcoin/bips/blob/master/bip-0050.mediawi...
What happened was the behavior became probabilistic based on the state of the machine it was running on and the how much block history was being rewritten due to a recent reorg, etc. Usually if the node was restarted, it synced and ran just fine.
The recovery didn't change the bitcoin consensus rules as seen by existing clients. There was just a temporary extra limit put in place (a soft-fork) to keep blocks small while the issue was sorted out, then lifted.
if (blocknumber > 115000)
maxblocksize = largerlimit
The arguments of semantics really miss the point of the intension to offer egalitarian access to currency production and account. Keeping the transaction rate low on purpose is counter productive by all measure, but several of the core devs work for blockstream which would stand to profit by selling their own sidechains to enterprises, counter to the first sentence of how Bitcoin is defined in the white paper.
A purely peer-to-peer version of electronic cash would
allow online payments to be sent directly from one party to
another without going through a financial institution.I'd argue instead that the main use case is to buy a cup of coffee with Bitcoin anywhere in the world without having to deal with fees and red tape.
So using your analogy of evolution, transaction scaling is probably going to be the biggest driver of who gets to be at the top of the crypto food chain.
If you want to actually hedge against inflation then TIPS or stock indexes are usually better choices for most investors.
Also, I don't fancy trusting my money to a small group of Chinese miners, who seem in practice to control the network.
BTC is quite different as it is only a "value store" and is inflationary (the supply of BTC is fixed and won't increase)
My personal suspision is at some point the miners will convince everyone to make a fork which keeps miner's fees forever.
No it doesn't.
"How is this not a ponzi scheme, help up by mining fees?"
You misspelt "speculative bubble".
But I am waiting for a new wave of POS systems: https://medium.com/@zby/proof-of-stake-can-be-cheaper-than-p...
https://www.facebook.com/hackdays4all/videos/545598169119184...
It's a well-established (understatement of the century) shorthand for the term "cryptography", that no honest cryptocurrency enthusiast can claim in good faith to be ignorant of, because cryptography provides the technological foundations on which all cryptocurrencies are built.
Conflating these terms can cause undue confusion that breeds disdain for the very technology you're trying to promote. I, for one, was expecting to read an article on the history of cryptography as it evolved over the years when I clicked the link.
Despite all this, I just wanted to say the article itself was an interesting read, but you're doing yourself and the cryptocurrency community a disservice by unwittingly pulling a bait and switch like this on so many potential readers.
At the very least, please avoid using it as a shorthand in contexts intended for communication to those outside your community.
That's the first thing I thought when clicking the link and hitting back disappointedly.
However, I don't think we can stop these kinds of changes. Like with the word hacker for "digital criminal", it'll just be an in-word to use (at the office (pentesting) we're all hackers; on HN we're all hackers) and for the media we'll have to think of something else. Big data is another such example.
My first response to this kinda stuff is now to just think of what words I should start using instead of this, now that this is being misused.
I don't have any good ideas, though, for the field of cryptography being anything other than crypto. Anyone else?
As much as it bothers me, if the media adopts "crypto" to refer to cryptocurrency, the population will follow, and the term will forevermore refer to cryptocurrency and not cryptography.
(Note that there are a bunch of cryptographers and cryptographer wannabes (like me) on HN who are not just (or not at all) into cryptocurrencies).