Why Is Bitcoin Valuable?
taylorpearson.me
taylorpearson.me
People who believe cryptocurrency is going to prevent autocracy have lost all grasp on reality.
Also: Does any crypto currency have anything in store to protect itself against bad nodes? I don't mean nodes that send invalid packages but nodes that act like real nodes but just eat transactions and blocks without relaying them. Flood a network with a few million of these nodes, don't relay addresses of valid nodes and the network will split eventually.
Could you direct me to the theory supporting this assertion? Was considering doing a simulation of this but need some kind of model.
I've been really interested in Bitcoin and have followed it closely since Satoshi was still active, and consider myself a pretty big fan of it in general. But the general arrogance and delusion about the reality of where real power is in the world is a bit cringeworthy. And it's always been that way in the community.
It might get interesting in the future if two or more states have competing interest in Bitcoin(or whatever). I can imagine some hypothetical situation where the US political tide turns very anti-BTC, but say China has enough money tied up in it that it's incentivized to attempt to defend it. Like say if enough people in positions of political power have significant portions of their wealth tied up in it. That's possible, I guess. Sounds messy though for something that relies on economic confidence.
Either way, so far all the luck has been on the side of Bitcoin, as really there's been little to no political pushback against the technology itself. That's pretty awesome, and it's made for a very interesting 7 years or so since BTC really woke up and people around here and elsewhere started seriously discussing it. But the political risk is very real and understated imo. The technical risk is interesting in theory for sure, but just knowing a sufficiently powerful state has the ability to attack is probably more than enough to cause massive economic damage without actually pulling any technological triggers.
But I get why you think this is "all crypto currency enthusiasts", given cryptoanarchists are a prominent group. The distinction was clear during the fail of the DAO [1] from ethereum in 2016. When ethereum core devs decided to fork to revert the blockchain and "erase" the steal, there was basically two groups of people: those who were happy that it meant fraud can be dealt with (a not-so-small minority group, which I was in) and those who thought it meant manipulation, regulation, intervention, everything they despise from governments.
Granted, the later are way more numerous, but please don't assume it's just all cryptocurrency enthusiasts :)
radio to receive new blocks and any means of sending 250-500 bytes of data (sms, radio, morse code, flashlight) is enough to do almost all you will ever need to do with bitcoin, no internet required.
network of trust based acceptance of peers could be a solution to bad nodes flood attack, i think.
- Every scam victim ever
Are there any justifications for Bitcoin that cannot be explained by a cognitive bias?
Are you aware that you can put nearly everything in this sentence instead of Bitcoin and it still holds just as true?
Free markets haven't really made the world totally fair. Democracy hasn't really given all people the ability to choose. Your job hasn't really paid you as much as you've produced value for your boss. Marrying your wife was a questionable choice, to some degree. And your parents also don't really love each other anymore. Your life isn't really meaningful to anything but the fantasy you run yourself in your head to explain it.
We live off of the cognitive biases that we are able to believe in. Enjoy having some cognitive biases left as long as you still have some.
Nothing is set in stone - its software, all of these things are fixable and are being worked on. Its still so very early in the game.
If you compare crypto to a traditional startup project - I'd say user engagement and growth is more valuable than a perfect product from the start.
I wouldn't compare those. Most of the altcoin trading is completely speculative, not even in the sense that they "believe in the future of the coin", a lot is purely speculative profit-making (e.g xrp), pump-and-dump chasing and herdish behavior. Very few coins have substantial engaged followers (e.g. raiblocks) and only the top 2 have actual users. I 'm a believer in the technologies but they are in such early alpha stage that it's not justified to expect that most of them will even prove to work.
The biggest issue for me is the distribution of coins, with most ICOs unashamedly aiming to make the founders and investors billionaires from day 2. Even if their products prove succesful, i think a forked, clean chain will win over more followers.
Back when it was new nobody would shame or outright insult people who invested in it. But somehow that's totally the norm now. Why does it matter whether the coin is worth 10$ or 10000$?
It was and still is a disruptive concept that solves many issues with our current centralized currency system.
Sure it also has a lot of issues itself. But can't we simply appreciate the technology for what it is: a Proof Of Concept.
The volatility will go down over time and even if we were to compare it to currencies go back in history and you will see plenty of fluctuating currencies. A stable currency is a fairly new phenomenon and it comes with a price (you have to grow the economy)
Personally, I have lots of confidence that the USD in my bank account will one day, at a time of my choosing, get me intrinsically valuable things like cars, a home, food, cloths, etc. With bitcoin, I have very little confidence that will occur. So it's not very valuable to me. Nor do I have confidence that there will always be a "greater fool" handy to purchase any bitcoin I might buy for more than I paid for it. I think bitcoin will inevitably collapse.
TFA talks about "citizens protecting themselves from irresponsible or malicious governments and companies", but that's not a problem I'm aware that I have. If it were, then I might be interested in owning bitcoin.
That statement is self-contradicting. If people covet gold for reasons other than what they might exchange it for, that means it has intrinsic value. And in addition to the satisfaction some people get from decorating their bodies with gold, it has many other practical uses. It's used in all types of electronic devices, including the computer you're reading this on.
And as a medium of exchange, gold does not rely on a global computer network being available. (But in a post-apocalyptic world, gold probably would not have as much intrinsic value as it does currently. Whiskey, guns and cartridges would probably be a better bet.)
The only thing scarce about crypto-currency is the energy it consumes, and the world's tolerance for its environmental impact. Aside from that, what prevents anyone from creating a new one?
It's all about the mindset. As long as enough people believe bitcoin is valuable, it will be valuable. I could be wrong, but I don't think that will continue to be the case long term. I think crypto-currencies will continue to exist and will have some practical uses, but, IMO, their values relative to USD are going to be, shall we say, "adjusted" to a more sane level sometime in the future.
In 2010, I lived in a little bit better but still crappy country called Russia, I returned to my old idea to buy US stocks. This time is was possible but I had to make high-quality translation of agreement with US broker (i.e. Google translate wouldn't be accepted) and wait for a week to get permission to wire transfer my money to US brokerage account.
In 2012, I wanted to do some small business and I wanted to do everything legally (I was still naive at that time) so I approached my bank in Russia and said that I want to setup website which accepts credit card payments from US. My bank said they wouldn't allow me to do this.
Then I thought I can open foreign bank account. I tried to open bank account at HSBC in Hong Kong and was rejected for being Russian citizen (that's literally was a reason!). I also was rejected at every single bank in Europe.
And even if I succeed to create shell company in some offshore islands and some account at some not very much reputable bank, I would still have great problems to legalize this money in Russia as I understood from talking to lawyers (again, I naively wanted to do everything legally).
So being citizen of two wrong countries, I quickly realized how tightly government and banks control my money. At one hand Russia and Uzbekistan restrict me to move my capital abroad. On the other hand, even if you manage to move your capital abroad, western countries refuse your money. I could call this the Great Western Wall.
So now, I highly appreciate cryptocurrencies. If you have BTC, ETH, XRP nobody would stop you to send money anywhere. It's so much valuable! The only drawback is extreme volatility of these currencies. But with creation decentralized stable cryptocurrency DAI, this changing game even more.
I think the only people who hate cryptocurrencies are those bloody conformists, big brother lovers who never experienced first hand how shitty traditional financial system is.
And the people who profit from the traditional system. Don't underestimate that group.
And in some regards the group you talk about and the group I talk about are overlapping. In first world countries you are really rarely screwed by your bank (when it comes to international transactions at least). But that these countries populace is allowed to live so freely might be the reason of the banks being able to screw people from shithole countries even more than them. So a change for first world country citizens might very well go the negative way and it's reasonable for them not wanting to change as it is.
There are costs (in the wider not just monetary sense) and benefits to various approaches. The reason you had to resort to crypto-currency first of all seems to me to be the problems in the countries you lived in. If they had working institutions, if you had lived in a Western country and had had access to the banking there, would you have come to the same conclusions?
Also, there is a reason why Western banks and Asian ones too, it seems, prefer losing business over dealing with customers from some countries, and I doubt the reason is spite.
Having completely anonymous money sure benefits some small businesses (mostly those living in places with bad institutions), but it also enables a lot of very questionable businesses and people. I would suspect that as far as volume goes the latter might actually be far bigger than the former. As always those who have most to gain are those who have a lot of money to move (same with the question about who benefits from government more - the rich or the poor? The rich! Any "redistribution" is dwarfed by the amounts of money people get to make and to keep under the protections of strong government institutions). Anonymity, not just for money, always works for those who have their eyes closed to all the horrible things humans do when nobody is looking - and that is not a negligibly small amount. Of course, the extremely wealthy already have "anonymous money", tracing who owns what is very hard even for the government, but I doubt giving everybody access to anonymity would be a net positive.
I'm not in favor of this argument at all. The internet has incredible benefits, but enables a lot of bad actors. Encryption has incredible benefits but enables a lot of bad actors. Lots of good things also enable bad things, that doesn't mean we shouldn't allow them.
Outside of third world or financially repressive countries, cryptocurrencies are great for "global citizens." I have done contract work while living in a different country, for clients in other countries, both parties have found it much easier to pay each other using cryptocurrencies as opposed to fiat.
The difference, at times, is murky. Even in the west.
So basically like cash.
In Sweden, it’s fast becoming nigh impossible to pay for things with cash, particularly in places like restaurants, cafés and bars. If you have a business that deals in cash, banks make it almost farcically difficult to deposit said cash into your business account.
For example, in one town the largest bank will only accept cash through a deposit machine, outdoors, for one hour during the middle of the day. Oh and you can only deposit something like $1500 per day. Your only other option is to order pickups from a security company, which will cost quite a bit more than you’ll pay for card transactions most likely.
Granted, this example is from a smaller town (aprox. 12000 inhabitants, but LOTS of tourists from abroad that tend to carry cash) but even in a place like the capital Stockholm, you’ll have very particular cash handling restrictions. Some because regulation, but most because banks don’t like to deal with cash. It’s a very real security risk and requires manual labor – both of which are costly and like any business banks like to keep costs down. Most smaller (and local) branches these days don’t deal with cash at all, or deals in very limited amounts.
If you run a small shop that deals in cash, there’s a very real possibility that you’ll have to face the question of whether to pay a lot of money for secure cash handling, or just getting a safe and hope you don’t get robbed.
But contrary to cash, cryptocurrencies like bitcoin can be traced fairly easily in fact, it's one of the most transparent currencies that's ever existed.
As color coins show it will be possible to trace the history of a coin and thus trace what's it's been used for.
This will potentially allow NGO's to recieve funding and track how they are used and make sure they can't be used for approved expenses all autimatic.
Cryptocoins are exactly what governments would want if they really thought it trough. The control they loose in creating the currency is gained in controlling the history of them.
As any business owner can tell you, they don't provide these services. Which of course means that someone could step in, provide these services, and actually has a chance of success.
It sounds so incredibly absurd, but it's actually true: governments do not provide the ability to transact in currency. Only banks do, and only for hefty fees. Hell, the aborted attempt by Varoufakis to issue a tax-backed currency by the Greek IRS would have been the first time I've heard any state providing such a service.
One might think, in reaction, governments would be a little worried and then 2 reactions are possible:
a) governments could make sure these services are provided. Basic banking services, after all, are a complete necessity in todays world. In trade they'd get insight, maybe even a little control, and would make a LOT of people very happy, because the government is omnipresent, and a lot of people feel that banks exploit things (e.g. cashing checks in the US).
b) governments could punish everyone involved, AND threaten everyone until insight is, grudgingly and only after every option to obfuscate things is utilized to the maximum extent, provided.
Of course in the case of b), insight would be a punishment inflicted on businesses and people, and make it very clear to everyone involved that citizens and the government are each other's enemy, and therefore naturally everyone would be trying to make that insight as useless as possible.
Needless to say, every government on the planet has chosen only a single avenue, namely b).
Can I just say: may God help governments as soon as someone realizes a way to provide a cryptocurrency that can't be easily blocked over radio or ... because it will turn into an utter disaster for them very quickly.
Or perhaps I should say: the first government to issue a tax-backed currency with a government provided ability to transact, banks, the entire financial sector, and all other governments are in extreme trouble.
Let me rephrase: how many categories of crime occurred on Silk Road et al, and how many are not — based on current law enforcement — plausible to get away with when involving cash?
The claim was made that crypto is bad because it can be used for crime to which i responded like cash.
You claimed it's not at all like cash but you haven't actually provided any argument for how it's not. Instead you have looked at a few obvious differences which doesn't take anything away from the original claim that cash and crypto can be used for the same things and in fact are being used for the same thing.
I don't know how to make it much more clear.
How you can even claim that with a straight face is beyond me. Here is just one person's cash usage.
Second, look at the date on that and tell me, with a straight face, that they didn’t use any cryptocurrencies. If they really did have $22bn, perhaps even if they only had $22m, I expected they used a dozen forms of currency they couldn’t even name.
I do not understand how you consider you response to be relevant, however.
Cash and crypto can be used for more or less the same number of crimes. That was my original point.
Furthermore cash is defacto being used for more crimes every day as most criminals are using cash not crypto.
They are both used for crime and cash is used way more for crime than bitcoin is.
So your claim is simply wrong.
Well, it isn't, as I already pointed out. Is the main strength of your argument how often you repeat it?
> So your claim is simply wrong.
Ah, yes, as I suspected. A strong conviction in place of arguments, reasoning and considering other people's arguments.
I am not holding my breath that you will of course, but just so that we are clear.
You are quite the joker. Or maybe you have some real problems reading English?
Try again: https://news.ycombinator.com/item?id=16197689
Of course, it's been quite obvious for a while that you are just trolling.
I would think that freedom from surveillance is a negative right, but you are framing it as a positive right. Why?
For me personally, I don't hate Bitcoin, I just don't see the value in it. Maybe that's because I'm not from a shithole counry and I can actually rely on my government and financial institutions.
If you need to vent some anger, maybe direct it at the "bloody conformists" and "big brother lovers" in Russia that keep people like Putin in power. Oh wait, maybe these people are also just victims of the system and you should be more careful slinging your insults around.
But how exactly does cryptocurrency solve your problem?
Is it possible to legalize crypto you earned? Nope.
Is it easy to accept payments in cryptocurrency? Nope.
I don't see any advantage over "shitty" old banks.
To believe that the most fundamental social human issues can be solved by technology is a bit of an utopia imho. Greed, lust for power, envy, etc. Those are part of human nature, i don't think they will disappear thanks to some elaborated algorithm. Unless you want algorithms to take control of social interactions (which is another kind of shite society).
Although I still think it's going to be a very long way off if western government's can't work out how to make unauthorized use of crypto illegal.
The blockchain is a human construct, entirely dependent on human inputs, outputs, and interpretation to have any meaning at all. As long as that's the case (and if it isn't, then it's not useful to society), it has the exact same weaknesses.
It's entirely possible if not probable given enough time and enough tries at it, someone is going to find a really useful application for it. But it's hard to take statements like "catalyst for social change" seriously when its sole contribution to this point has been a new form of gambling. There's a big disconnect between what the technology is supposed to do and what's actually happening.
BTC, LTC are traceable, so you can still track down owner (although it may be extremely difficult in some cases).
But with technologies like zero-knowledge proof in ZCash, you have untraceable money.
So at some point, when cryptocurrencies hit mainstream, you may see the situation when people start exchange goods and services directly in ZCash or Monero. I just don't see how government can shutdown this.
I don't see how governments can crackdown cryptocurrencies completely. So in long term, impact of cryptocurrencies on global economy is inevitable.
I’m one of those “bloody conformists”. And because my country is full of then, and we elect sensible politicians, I am welcome at any bank in the world.
Or another way to look at is that bitcoins in Uzbekistan are only produced by mining (ie buying expensive foreign-produced ASICs) or by exchanging something of value from Uzbekistan for US$ some other way. So when buying bitcoins there, illegal foreign exchange of fiat currencies is still happening somewhere in the system (maybe you don't see it).
TIL: The currency of Uzbekistan is the So'm / сўм.
People used to earn Bitcoins using GPU mining rigs. ASIC miners made that obsolete. GPU mining is no longer profitable but the average person does not know or understand that.
I've seen stores like Microcenter sell out of expensive GPUs and expensive power supplies to power them. My son last year had to build a new gaming PC after his old one blew out. His GTX video card was $240 last year, but now sells for $640.
If Bitcoin is the new gold rush, the people selling shovels and supplies to miners at higher than normal prices will sell GPUs power supplies and high end Clubs and motherboards.
I am using Coinbase since the new year. I invested $1 in Bitcoin and $1 in Litecoin. They are only worth 75% as much now. It was just dipping my toe in the waters before jumping in. I am not going to jump in until I learn more about it. Buy low and sell high and don't invest any money you can't afford to lose or do without before it raises back up to sell for a profit.
Why put money in a gold rush after the rush? Can you explain the logic behind it? Like, have you never heard about it before 2018?
Honestly if Bitcoin stabilizes around $300/coin it's still a huge profit to the people who started it and invested early (I bout around $90/coin). $12k/coin certainly is ridiculous. But I don't understand why people would even put a single dollar into something at such a point.
because they think it will go higher