How Bitcoin Ends | Hacker News Reader

How Bitcoin Ends

fastcompany.com

This article makes pretty blatant errors:

> We thought the net would break the monopoly of top-down, corporate media. But as business interests took over it has become primarily a delivery system for streaming television to consumers, and consumer data to advertisers.

Weird thing to say about an era where traditional publishers and news networks have been entirely disrupted by random folks posting on twitter/facebook.

> At its core, bitcoin is just an extension of the old PGP, or Pretty Good Privacy encryption protocol.

I've never seen the word "just" do so much work. Bitcoin, notably, solved the Double Spending problem[0] seventeen years after PGP was created.

> In essence, bitcoin is money built and maintained by nerds, based on the premise that good nerds will outnumber the bad nerds.

This is patently false. The _entire_ point of bitcoin is that miners and node operators acting in _their own self-interest_ will secure the protocol, not "good nerds". You can argue if the system fails this will be the case, but not that this is the premise.

[0] https://en.wikipedia.org/wiki/Double-spending

Yeah I'm also pretty critical of their narrative of how centralized currency came about. Their timeline is wildly wrong. The author makes it seem like states started minting coinage in the middle ages, when the advantages of a standardized coin with a mandated-by-fiat face value (possibly different from the actual value) were well-known - and famously used to great effect by - even the early Roman Empire.

Then there's this sentence, which is just nonsense:

> All money was borrowed from the central treasury, at a rate of interest set by the king.

> At its core, bitcoin is just an extension of the old PGP, or Pretty Good Privacy encryption protocol.

Grampa Simpson: "Oh, everything's stolen nowadays. Why, the fax machine is nothing but a waffle iron with a phone attached!"

I have no doubt that Bitcoin will end someday, most likely from QC breaking ECDSA, but this is perhaps the most illiterate and uninformed takedown I have ever read on the subject.

That's not really a problem. Addresses aren't the entire ECDSA public key, but a hash digest of it. The entire public key is only revealed once a transaction is made from an address to another. So an address that has only received coins, but never sent any, is entirely immune from QC. (This, by the way, is why you're never supposed to reuse addresses, since once you move coins from an address once, it's possible for someone offline to try and break the key.)

It is a real problem. Millions of BTC are locked in addresses with known public key, due to either the formerly popular Pay-to-Public-Key script, or the ever popular practice of addresses re-use that you also mentioned.

I mean, everything ends eventually, right?

Aside from the flaws of the article, there are something to be said about how centralized bitcoin has become. Most of the bitcoins are held by centralized exchanges, or "qualified" custodian (locked up in ETF and other exchanges). They essentially act like centralized banks, the exact thing we're trying to avoid. The only saving grace is we can send to native wallet, giving us some freedom from the institutions.

This is how Bitcoin ends up...

* Bitcoin and Ethereum are grandfathered into not requiring KYC and AML. They are the rare currency with zero friction.

* All new currencies require KYC and AML. This is happening right now

* Other currencies can have some positives (backed by revenue generating assets, etc.). But they can be confiscated by governments

* Bitcoin always has a place, as the zero friction, no-KYC currency.

EXAMPLE: I did a wire transfer from the USA to India. Since it was sent in Indian rupees, the receiving bank kept rejecting it. They claimed it didn't pass AML. The real reason is that they wanted to take huge fees for the USD to Rupees conversion on their receiving side. So they kept rejecting it, until it is sent in US Dollars and they can scalp me on the conversion rate. I had 8 weeks of failed transfers.

That AML hostage taking can happen across all currencies BUT Bitcoin and Ethereum.

In the future, people in China are taking their money out in bitcoin. People across Africa, South America, also often move it into Bitcoin. They can cross justidictions with nobody to stop them. There is a place to cut around the hostage stakers at the AML level.

Have you tried TransferWise? I just tested in app, and they’ll convert $1000 USD to INR for $9 USD immediately.

I have their Borderless account and hold balances in several currencies at once, with access using a debit card, wires, ACH (US), SWIFT (EU) etc. Highly recommend!

There is plenty of services like this nowadays. I recall TrensferGO and Revolut. There is even a service for fees comparison amongst those services, developed be hackernews fellow reader: https://news.ycombinator.com/item?id=20819538

Excellent resource!

So much nonsense in this article, don't know where to start...

Yeah I stopped reading after this:

> At its core, bitcoin is just an extension of the old PGP, or Pretty Good Privacy encryption protocol.

This is also about getting out of being "locked into" a larger overall economy run for the benefit of a few and creating local economies.

People with land and/or skills could create new economies by trading directly with each other with what they produce and opt out altogether..

In a way it is the final defence of a people against control and oppression or insane hyperinflation, but is more dificult to do if you are stuck in a city or additcted to modern technology.

Are they trying to say Bitcoin will not remain a totally unregulated, totally compromised and idealistic cryptoanarchocapitalist utopia forever? Are they trying to say that Bitcoin won't solve all of the world's problems and bringing on a new utopian era??

I refuse to believe it. Because if that were true bitcoin would surely vanish into thin air.

This article makes a good case about Bitcoin but even the original Bitcoin enthusiasts and crypto community as a whole has admitted that it was a great experiment but is now obsolete and settling in for a temporary (years) store of value role.

I would like to see these same discussions after understanding the Ethereum ecosystem which solves most of the problems listed in articles like these. There's a stable form of value in DAI, high velocity and cheap money transfers, and decentralized financial protocols that replace traditional gatekeepers like banks and payment processors.

A long but interesting article by David Hoffman really sums it up in the best way possible and is worth a read: https://thedefiant.substack.com/p/ether-is-the-best-model-fo...

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