Comment by jerf | Hacker News Reader

Comment by jerf | Hacker News Reader

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It isn't a criticism of the protocol. It's a threat to the current system. A centrally-controlled, government-sanctioned/mandated fork of the protocol that removes the bulk of the desirable properties could starve the "good" BitCoin by stealing away the vast bulk of the users that BitCoin needs for long-term effectiveness, and long-term protection from the charge that it is only useful for money laundering and drug deals. That charge needs to be visibly false for it to stand a chance.

The best way to guarantee that this threat manifests is to just poo-poo it as an impossibility, and not prepare for it. No matter how you slice it, BitCoin faces an uphill battle to get to the point where it has enough acceptance to dodge the laundering charge, and a quasi-religious denial of the problems because "BitCoin is just too awesome to be affected by anything bad!" is a quick path to total failure.

One entity dominating the network may not be a serious threat. A cartel damn well is. The article is correct, the resources are not centrally distributed and you don't need anything like 50% of the humans to cooperate to end up possession 50%+ of the network power, especially if you've got the men-with-guns backing you and even modest cleverness.

I've seen a couple of dismissals of this possibility, linked elsewhere in this comment section, but it's like the BitCoin proponents suddenly forget they're up against men with guns, despite starting out with this understanding, not just some people who want to play modestly unfairly and merely "collaborate when they shouldn't", but otherwise follow the rules. Effort bent towards breaking BitCoins will be proportionate to the size of the BitCoin economy.

A "centrally-controlled, government-sanctioned/mandated fork of the protocol" would steal few users from the BitCoin economy, because the kind of people that would move to the new system were probably using fiat currencies to begin with.

Men-with-guns haven't brought down p2p file sharing yet.

If the BitCoin economy is mostly only applicable to libertarians, it won't be all that large.

I'm not a libertarian, yet I like BitCoin better than fiat currencies and centrally manipulated monetary systems.

If other people are happy with whatever features of BitCoin remain under centralized control, more power to them. I see no problem.

But you're saying we have to fear that someone will start effectively issuing p2p dollars. I think it kind of defeats the purpose, but I can't see why that's a more of a threat to the principles of Bitcoin than plain old USD.

Because of loss of value. Without backing there would be nothing guaranteeing the BitCoins in your wallet would hold close to the same purchasing power from before the time the network split.

It would not be so much a network split as a network copy. Every user of the original network would have, to begin with, identical balances in both. Until inflation adjusted things, there would be an ephemeral increase in purchasing power.

If the new network implemented inflationary logic, as a modern state is wont to do, I can't exactly see people rushing to convert their old (relatively stable, perhaps deflationary) money to the new one. Therefore, I can't see many businesses stopping to accept the old bitcoin.

And after whatever adjustments are made, it will be business as usual. Bitcoin will remain the network for people that want a decentralized currency. Not necessarily of libertarians, but of anyone with distrust or disillusion with their governments and the banking system. Which I don't think is such a small demographic.

I can't exactly see people rushing to convert their old (relatively stable, perhaps deflationary) money to the new one. Therefore, I can't see many businesses stopping to accept the old bitcoin.

Rushing to convert "old network" BitCoins into the new network (or dollars, or whatever), and businesses stopping acceptance of them is exactly what will happen. Don't forget the primary function of money is to allow people to trade it for things they want. Unless you're a staunch ideological libertarian you will want as much of your "money" as you can get in whatever system offers the most goods and services. Otherwise you have lost value. That system will certainly not be the one containing only sparsely geographically spaced libertarians.

> Men-with-guns haven't brought down p2p file sharing yet.

But they have brought down or kept down every single digital currency to date, save for those that were merely scams to begin with.

P2P file sharing is not perceived as a threat to the revenue model of government, and is not especially attractive to mobsters and scammers. P2P currencies are.

We already have "A centrally-controlled, government-sanctioned/mandated fork of the protocol". It's called the federal reserve system and it is very networked, efficient, etc. and has almost none of the features of bitcoin because it doesn't need them. All the features of bitcoin are there so it isn't possible for any one entity to centrally control it. It would be ridiculous for a fork to be created that would be centrally controlled. It would be like saying someone should fork open office and turn it into a submarine control system.

How would this centrally-controlled, government-sanctioned fork differ from existing fiat currencies like the dollar? If we assume that a large number of people start using Bitcoins, why would this network be threatened by a competing currency that has no advantage over existing currencies?

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