Hacker News Reader

Comment by doggosphere | Hacker News Reader

However three years on, crypto still does not have a "killer app" and is 99.99% used for speculation.

The killer app is decentralized, permissionless, open source, and censorship resistant network.

Bitcoin's narrative has had to morph from "digital currency" to "digital gold".

Gold morphed from worthless rocks in the the ground, to coins traded by traveling merchants, to stores of value that were eventually centralized and monopolized by governments.

RE: Tether I don't trust them either, but we need more evidence of this alleged printing. We saw that they did remove the 1:1 peg briefly when Crypto Capital in Panama (?) froze a few hundred million of their USD.

Bitcoin now finds itself a high tech manifestation of the very thing that Satoshi sought to address.

Bitcoin is sound. The centralized exchange layer built on top of it is dirty.

View on HN

> The killer app is decentralized, permissionless, open source, and censorship resistant network.

That’s like saying the killer app of the internet is the internet.

The web gives me access to information quicker and easier than going to a library or bookshop. Email and IM means I can communicate with people in other countries quicker and easier than I could by post. Crypto doesn’t change anything.

A few drug dealers and some people living in countries with hyperinflation may care about “permissionlessness” and “censorship* resistance”, but for most people, actual money is far, far more convenient.

* That’s some Orwellian newspeak, btw. If someone defrauds me and a court of law ensures that I am restituted, the reversal of that fraudulent transaction isn’t “censorship” because stealing money isn’t “speech” or “expression”.

Digital gold is the kill app. That is enough to justify its market cap.

For example, Chinese can use bit coin to exchange large amount of funds to other currency, although this can only be done in private because the official ban.

You cannot. There is no exchange from CNY to Bitcoin.

CNY buys mining rigs and electricity which makes bitcoins.

Come on, it was banned, but there is plenty of underground channel... Why is that even needed to be mentioned...

Maybe I should be more clear in the OP.

There are underground channels for USD - CNY as well haha

> The killer app is decentralized, permissionless, open source, and censorship resistant network.

That's the "how" part, not the "what". What's the killer app implemented using that network? What do we do with it?

Lots of examples in this thread.

A replacement for gold is one.

> A replacement for gold is one.

Gold is relatively stable and has physical backing. BTC does not.

Gold is relatively stable and has physical backing.

Up to 4% of China's gold reserves could be fake. Gold fraud article: https://economictimes.indiatimes.com/news/international/worl...

Bitcoin is open source and completely auditable in an instant.

As the price of gold goes up, the quantity supplied goes up. Bitcoin's issuance protocol is fixed and unchangeable unless the network agrees.

The cost of securing or transporting $1b of gold bars is magnitudes higher than the cost of securing $1b of Bitcoin.

Securing $1 billion of bitcoin? Who needs to secure $827 million of Bitcoin? Securing $937 million of Bitcoin is not a killer app.

In all seriousness, securing the value of Bitcoin is the problem that is not easily solved.

Bitcoin is bits of data on a network. It does exactly what its supposed to do; a dictionary for strings to integers.

Securing external value to people is not a goal or responsibility of Bitcoin. That's simply a consequence to how we as humans choose to use scarce assets.

> Securing external value to people is not a goal or responsibility of Bitcoin.

Fair enough, but then your comparison to physical gold is meaningless. Physical gold is generally used to store value, not to transfer it.

For that purpose, you have paper money (or paper gold such as futures) which is cheap to transfer.

Gold has had thousands of years to equalize in value.

Bitcoin is about 12 years old.

Alright, then maybe in a hundred years your gold comparison will be meaningful, but not today.

Disruptive technology is disruptive.

Tell someone from the past to imagine having godlike computing power in your pocket, and they'd say "why would anyone want that?"

I'm not sure what your point is right now. Sure, it's "disruptive technology", that doesn't mean it can be used to store value into the future.

Computers that are decades old, which were "disruptive technology" at the time, are scrapped today - for their gold.

Bitcoin is relatively stable and has a mathematical backing. Gold does not.

The hurdle for bitcoin is finding a way for people to turn it into a currency they can use. This is where you end up with a centralized exchange layer built on top of it.

I can make a $12,000,000 transaction for $.35 but if I actually want to get the money, I have to pay 2.5% to a legit exchange or take my chances on some janky ass exchange. Why not just transfer the money via ACH and pay the small fee and save myself the headache?

2.5% is way too much.

I pay 0.15% and the exchange has been around for a decade without ever losing funds. It's even now licensed as a bank in the U.S.

You can start by asking people to take bitcoin for various transactions. For example, my friends and I all use it settle debts between each other.

The barriers to entry, usage, and understanding are just too high for average Joe. That and how the value of their money fluctuates compared to fiat makes it more difficult to use as a daily currency. Also, when things go wrong there's nobody to turn to in most cases.

> The barriers to entry, usage, and understanding are just too high for average Joe.

Mentioned in another thread[0], the Phoenix wallet more or less solves this on the Lightning Network.

[0] https://news.ycombinator.com/item?id=25706312

Bet you don't lend one another bitcoin though

In a long enough time frame, people transact with cryptoassets directly and don't need to exchange into fiat. We are early in this development, money as we know it is changing.

Over a long enough time frame the chances that you get hacked, scammed or make a fatal mistake and lose all your cryptos is high. Putting anything more than pocket money in this is idiotic.

What kind of an exchange charges 2.5%?

> The killer app is decentralized, permissionless, open source, and censorship resistant network.

Yes, but what can I do with that other than toot/tweet/twit at other people and buy LSD tabs?

Here are a few projects that use Ethereum to do things that have nothing to do with acquiring chemicals or crypto asset speculation.

https://www.nucypher.com https://filecoin.io https://alice.si https://www.augur.net

I can do all that right now without inserting a power-wasting cryptocoin layer.

Go ahead subscribe to Pornhub with your credit card. Or donate to Wikileaks with your paypal.

Why would I pay for Porn? But on that note, the PH website still accepts several types of credit cards.

Whatever Wikileaks originally was, it is now a Russian propaganda tool. Go ahead and try to post leaks critical of Russia on Wikileaks, or for that matter, of Donald Trump. Why would I want to donate to a website that is openly seeking the destruction of my country?

With Bitcoin you own property that can never be confiscated or debased by any government.

With IPFS you can host and access files that can't be censored. (same level of censorship resistance as torrents)

With Monero you can transact free from surveillance.

The biggest applications on Ethereum right now is decentralized finance, with billions of dollars locked in.

> With Bitcoin you own property that can never be confiscated or debased by any government.

Private keys can be confiscated like anything else. They won't do you much good if you're thrown in prison for not turning them over if legally compelled. Sure you can try to hide your ownership, but my point is that actual cryptocurrencies are only one layer of very deep opsec you need to resist state actors. For the common illegal goods consumer it's unlikely to do much more than provide a false sense of security due to other opsec failures (use of phones, use of cookies, use of mailing addresses, use of non-e2e chat, using a hosted wallet, lack of anonymous vpn, etc etc etc).

> The biggest applications on Ethereum right now is decentralized finance, with billions of dollars locked in.

Interesting use of "dollars." How much is actually Tether? How much is manipulated market cap (through wash trading or more convoluted defi mechanisms)? How much is actually liquid USD?

A wrench attack will always be the easiest vector. That said, there is no other asset in history that gives you this level of security for such marginal cost. The cost of securing $100 is essentially the same as the cost of securing $100m.

The chances of loosing $100 is essentially the same as the chances of loosing $100m. If you loose your private key nobody can help you recover your money.

I would hope that someone with $100m in crypto is smart enough to not leave their seed words on a piece of paper on their coffee table.

Your exactly correct that nobody can help you recover your money if you lose your keys.

Bitcoins have been confiscated by many governments. A quick Google search reveals many instances of that.

Lets clarify semantics.

Can the government seize Bitcoin directly? No.

Can the government seize your bank account directly? Yes.

Can they threaten you with jail if you don't hand over your Bitcoin? Yes

Can the government seize Bitcoin directly? No.

Yes, it can. The U.S. government has in fact seized Bitcoin directly and sold it at auction several times. It is arguably the single largest non-exchange seller of Bitcoin in Bitcoin's history.

It can only be taken in these events:

1) Seed phrases are discovered (ie. plaintext document or physical artifact).

2) Seed phrases are handed over by willing party.

If #1 doesn't exist, then #2 is the only option.

This is the same as with cash money.

Money can only be seized if the safe is found. And the combination is handed over by a willing party.

The difference is that money is actually more secure because you don't have a public ledger telling you that it exists and who owns it and how much of it they own as you do with the public cryptos like Bitcoin and Ethereum.

Cash needs to be accessible to be useful.

Crypto is magnitudes more accessible. I can travel to any country in the world with an encrypted usb drive of my seed words, and no one is wiser. OR even upload a file to the internet and forego carrying anything at all. A government can try to censor transactions belonging to an address, but we don't have good precedent to see how the network will behave. Miners in other jurisdictions have no reason to follow someone else's censorship.

> Can the government seize Bitcoin directly? No.

A government could seize miners, and given that ~50% of the world's Bitcoin mining capacity appears to be located in one country, that might give them considerable leeway to rewrite the blockchain to their liking.

Yes. The solution to this is a software fork.

Did you mean "soft fork", or are you thinking of a different concept I'm not familiar with?

Forks can and have been used to deal with isolated malicious incidents, but do you think they can be successful against an actor in extended control of a substantial part of the hash rate?

You can alter the hashing algorithm to one that is more ASIC resistant. Monero did this.

> With Bitcoin you own property that can never be confiscated or debased by any government.

So the killer app for bitcoin is owning bitcoin?

> RE: Tether I don't trust them either, but we need more evidence of this alleged printing. We saw that they did remove the 1:1 peg briefly when Crypto Capital in Panama (?) froze a few hundred million of their USD.

Tether's page (https://wallet.tether.to/transparency) claims $23.6 billion in total assets. Despite their claims to transparency, I see no report of what those assets are, how risky those assets are, or any audit that assets they even own those assets. Their front page has a big link saying "Proof of funds", which leads to an audit published 2½ years ago, claiming only $2.5 billion in cash in two bank accounts with unnamed banks.

For a company that claims to be "always fully transparent," that is shockingly opaque.

Especially considering their last auditor walked away from the situation, I'd say the whole project reeks.

I find this a little bit too biased. The Bitcoin universe is waving between a lot of reason why to love bitcoin and it shifts often.

I stopped following the money side of it (atm and sites accepting btc) but a vast majority of btc and cryptos attention right now.. is simply better yearly returns than other kinds of possessions.

> The killer app is decentralized, permissionless, open source, and censorship resistant network.

That's not an app. That's meaningless advertising lingo.

Reply on news.ycombinator.com