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Comment by tikwidd | Hacker News Reader

But the upkeep cost of protecting the gold is continuous in the same way as bitcoin mining. If you want to own some gold you need to protect it (usually with the state apparatus of violence, which has massive externalities).

In other words, if you just mine a physical gold block, you don't really have an asset without the state's (or your own) continual upkeep that keeps it protected from attacks.

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Those same apparatus are also needed to maintain a global internet without which Bitcoin is useless. You can also just bury gold to keep people from finding it, which is one of the reasons it’s maintained value throughout history.

Upkeep of gold doesn't scale at the same rate as Bitcoin. If we suddenly had 1000 tons more gold, we could put it in existing vaults and very little increased cost.

> But the upkeep cost of protecting the gold is continuous in the same way as bitcoin mining.

This completely misses the point, which was one of magnitude:

>> The upkeep cost for Bitcoin is, and by necessity must be, PROPORTIOANAL TO THE VALUE REPRESENTED by Bitcoin.

Also, that upkeep cost is 100.00% to protect the value of existing bitcoin.

C.f., gold:

> If you want to own some gold you need to protect it (usually with the state apparatus of violence, which has massive externalities).

I don't need continuous mining of bitcoin to protect my non-bitcoin stuff.

However, I do need the "state apparatus of violence" to protect my non-gold stuff, including things like my house and my body, and oh yeah, my fucking mining rig!

If all gold disappeared tomorrow, would anything about the "state apparatus of violence" change? No, of course not. That is absurd.

I never understood the "violence" argument against government. In that sense of the word "violence", there is no alternative that does not at some level also come down to the threat of force. The "state apparatus of violence" won't look so bad after you've dismantled the state in favor of something approaching anarcho-capitalism and are then close to Hobbe's state of nature: nasty, british, and short.

brutish?

Although as a Brit myself it's amusing to consider myself some kind of atavistic archetype of humanity

>you don't really have an asset without the state's (or your own) continual upkeep that keeps it protected from attacks.

This describes Bitcoin too.

I think it's facially absurd to claim that the existing financial system (including military, police, etc) costs anywhere near what bitcoin does, but even if it does, it's irrelevant because bitcoin doesn't provide the same things. Bitcoin is a virtual bar of gold or piece of currency, not a financial system.

"Of the existing 18.5 million Bitcoin, around 20 percent — currently worth around $140 billion — appear to be in lost or otherwise stranded wallets, according to the cryptocurrency data firm Chainalysis"

"“Even sophisticated investors have been completely incapable of doing any kind of management of private keys,” said Diogo Monica, the co-founder of a start-up called Anchorage, which helps companies handle cryptocurrency security. Mr. Monica started the company in 2017 after helping a hedge fund regain access to one of its Bitcoin wallets."

"“This whole idea of being your own bank — let me put it this way, ‘Do you make your own shoes?’” he said. “The reason we have banks is that we don’t want to deal with all those things that banks do.”

Like remembering where the money is!"

https://www.bloomberg.com/opinion/articles/2021-01-12/don-t-...

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