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Comment by harryh | Hacker News Reader

You know what's definitely going to be valuable in a post collapse world where people are making heavy use of bug-out bunkers stashed with food and guns? A digital currency that requires a sophisticated global computer network to function.

Ya. That makes a lot of sense.

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In Argentinian or Russian style currency defaults the computer networks continued to function. We are talking about the dollar no longer being the world reserve currency here, not a total societal collapse. It will happen when a more attractive alternative is found by the global markets.

Currently the excess dollars created are absorbed by the foreign economies. This keeps the US from inflation caused by this creation. For example, Brazil has to buy dollars with its goods to then use them for purchases of IT equipment from China. At some point Brazil and China will find a direct medium of exchange.

Here is what Ray Dalio has to say: https://youtu.be/7WxfQ2zKXeA?t=1076

This idea has been going on for literally decades, with no real progress. Iran started allowing Euro trades for oil (keep in mind the EU imports way way more oil than the US) in 2003. Result = everyone still trades oil in dollars.

The first effect maybe that the increasing dollar creation rate needed to sustain the functioning of American economy may exceed the ability of foreign countries to absorb them.

This is just more of the usual "The Fed has really done it this time and here comes it's inevitable collapse".

There will likely be inflation but it's considered better than the alternative right now which is stagflation.

The space between "The dollar is no longer the world's reserve currency" and "total societal collapse" is very narrow, given how many countries rely on the dollar to back-stop their own currencies.

I think there's a decent risk that in the interim, people run out of money to pay for telecommunications links and BTC-farming datacenters.

A more charitable approach would be to consider that bitcoin and "bug out bags" can be things you have for separate or related contingencies.

We live in wonderfully complex societies and history shows us there are a lot of failure modes well short of apocalypse.

To be clear I'm not a "bug out bag" kind of person but I do believe that some disaster preparation is useful. I also believe that there's a modest chance of serious financial turmoil in the medium to long term future.

Bitcoin is likely to hold some value in the event of a localised financial collapse.

What’s the advantage of bitcoin against holding a diversified bundle of global equities or foreign currency in the event of a localised financial collapse?

Bitcoin can be sent and received anywhere in the world needing no than a raspi's worth of computing power.

Not many banking hoops to jump through, sanctions aren't at play, very difficult / impossible for a non-superpower country to exert control.

Greece and Venezuela are both recent examples of countries where people who owned Bitcoin faired substantially better than their peers who did not.

Did people in Greece and Venezuela fair substantially better than peers that had holdings of multiple foreign currencies?

Yes, easily, though the crisis in Greece started about the same time Bitcoin was created and lasted a few years after that.

The capital appreciation on this basket of global currencies has not moved an inch, interest rates worldwide are even lower today.

Meanwhile BTC has averaged 250% gains annually.

Not necessarily anything, but collapse of the dollar would have systemic impact, it wouldn't localised. And I suppose there is always some counter party risk with bank accounts or brokerage accounts, unless you hold the gold - or private keys

Why would bitcoin be spared this systemic impact?

I am trying to imagine how you can fit bitcoin in a bugout bag.

https://coinstop.io/products/billfodl

My (poorly worded) point is that without the internet, bitcoins in your bag don't have any immediate value.

One can expect the internet to eventually come back, maybe even in form of ham radio (in a post-apocalyptic world there would not be FCC to enforce ban on encryption).

Of course, in a post-apocalyptic world there would also not be an FCC to enforce bans on signal jamming...

The bitcoin protocol isn't encrypted. You can use the protocol over Ham radio as it is now.

The world reserve currency can collapse without all of society collapsing to the extent you are suggesting.

One of the things that makes Bitcoin so interesting is that you don't actually need that much sophistication to keep it going. In theory you should be able to run all of Bitcoin on a bunch of raspi's connected to HAM radio towers. As long as you can get blocks around the world, those raspi's should be enough to keep it running.

If the bitcoin network were ever reduced to that, there would be significant risk of a dedicated miner coming online being able to do a 50% attack.

Why? If the attacker can get that much hash then so can the miners.

> In theory you should be able to run all of Bitcoin on a bunch of raspi's

If suddenly the computing power available in the world was reduced to a bunch of raspi's, the Bitcoin network would be dead because it would take an inordinately long amount of time to reach the next difficulty adjustment. Only a hard fork could survive.

There's a few pretty far along mesh network projects that are designed to keep internet/crypto functional over portable radio networks.

And you think the average non-technical person is going to trust that over... trading for actual goods like food/fuel/livestock? On what planet does the government-backed virtual currency fail and then non-technical people suddenly trust a darknet currency backed by... imaginary computer algorithms that they don't understand and don't want to understand?

Its not like all people understand the monetary system. If something works over some period people will build trust and use it

Some day every phone may have a bitcoin “wallet” that connects to nearby towers using the phones antennas. Everything will “just work” as far as regular users are concerned. You would be able to pay for good just by scanning a QR code on the other party’s phone, for example.

I would imagine that that the point is less the practicalities of how it would than exist rather that commodities will become (as they always have done) the mechanism of trade. Before there was money there was just normal trade. In apocalypse land who are you going to let into your group of survivors, the guy with 10,000 bitcoin on a usb stick or the guy with 10ton of rice?

The neat thing about 10,000 bitcoins is that it can exist in your pocket.

> A digital currency that requires a sophisticated global computer network to function.

That's stretching it a bit. While Bitcoin looks sophisticated to the average Joe, it is actually a very simple protocol and require very little bandwidth. It's possible to run mining operations from all over the world on very limited connection (in fact you might need to connect only a few times per day). Processing transactions also consume very little bandwidth.

The crypto-folks have come up with something for you: https://blockstream.com/satellite/

So now even if your local infrastructure burned, you can still transact in bitcoin. Granted, there should be some guys somewhere doing the mining to ensure that the network is secure enough.

They're not saying that bitcoin is sophisticated (it's not), but the entire backbone of the internet is.

In some post-apocalyptic dystopia, people aren't going to be using their phones and laptops to make payments with bitcoin, they're going to use whatever is backed by the local authority.

Venezuela/Brazil/North-Africa disagrees with this.

Over half the transactions in Venezuela are in US Dollar cash now, not Bolivar or Bitcoin. That's not an example of a dystopia switching to Bitcoin.

Mesh networks over HAM radio, to tie it back to the article. ;-)

Ham radio fixes Bitcoin

That requires electricity, which is spotty in a dystopia. Best to stick to encrypted smoke signals.

Bartering would be far simpler, given the certainty that if the US financial system collapses, the impact on the effective price of bitcoin would make it unusable for practical matters.

Do you think those satellites stay in their proper orbit without any intervention? Do you suppose they will not need to be replace? Starlinks, for instance, will have a life span of 5 years. Further, do you suppose people will expend precious energy powering mining rigs rather than cooking food and lighting their mud huts?

I am struggling to imagine a bitcoin mining operation going anywhere without connecting at least once per minute, lest its tiny share of global hashpower is entirely wasted on futile progress on outdated side chains.

You can passively listen to new blocks via satellite or ham radio. You only ever need to connect actively to broadcast your own blocks.

Without global connectivity providing the opportunity to cross-check a sampling of independent nodes' ideas of the latest blocks, this sounds like a loser's game. Either you need a million independent satellites and HAM stations in range, or you are just begging to be spoon-fed malicious and/or outdated blockchain data. No way any mining operation can be competitive in such an environment.

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