Coinbase mafia shows how tight a circle holds sway over Bitcoin
bloomberg.com
bloomberg.com
Why is the fact they are "mostly men" relevant in any way?
What if they are "mostly jewish"? Or "mostly white"? Or "mostly American"?
Is Bitcoin now a matter of "privilege"?
Are there people out there who fall for this sort of insane narrative?
In any case, feel free to keep all your wealth away from Bitcoin. It's not mandatory to use it -- unlike the US Dollar, which is actually managed by a mafia, which we call "the government", and which will use force against you if you don't use its currency.
Interesting, that was profound.
Before finding that subreddit, I didn't notice how just how commonplace casually insulting men was accepted.
I do understand the power difference that isn't one to one and why this sort of insulting is accepted, in that men are not a real minority like Jewish people are so culturally insulting men is a considered a punching up situation.
Still, I think the proliferation and casual acceptance of the rhetoric people use in this context is not exactly healthy for society.
Both energy intensive mechanisms for enforcing the security of a currency.
So instead you create and support a system that zero chance of penalizing-swaying known bad actors via financial penalty by things like the Magnitsky Act: how do you propose we implement such a tool otherwise? No one answers this when I ask it - it just gets ignored.
How about we fix the system, build trust, get quality leaders into positions of power? It takes work, and yes, Western society has been degenerating and is relatively weak at the moment due to many decades of industrial complexes' regulatory capture and the duopoly that's been structured via those policies.
I really hope you'll answer this question too: you say "which will use force against you if you don't use its currency" - have you thought through what a global, decentralized currency - where you gain more money, wealth, the more people that are using it - doesn't create a group of people aligned [the "army of HODLers" as many call themselves] who want all of global society to adopt Bitcoin? It's known that wealth is transferred from weighted from the latest adopters to the earliest adopters; I'd love to know how the answer to preventing regulatory capture from continuing via the VC-finance-Bitcoin industrial complex [because the VC-finance industrial complex has started to heavily align with Bitcoin].
Elon Musk recently said "Bitcoin is almost as much bs as fiat money" - he hasn't elaborated yet, and sure, maybe it's slightly better than fiat money currently is - but Bitcoin et al allows tyrants to use and transfer funds freely, globally, to whomever with no way to stop them: don't you think that is an very bad unavoidable pitfall that we shouldn't design into or allow into our systems?
Pointing out that it was "mostly Jewish" would not be accepted and would be considered hate speech.
Shall we treat individuals on the basis of generalizations?
Shall we use identity groups and biased historical lenses in order to justify specific narratives?
Because we cannot move forward as a society, together, if we are not willing to confront and make effort to repair the wrongs of our past.
>Shall we treat individuals on the basis of generalizations?
No, but public policy usually requires some generalizations.
>Shall we use identity groups and biased historical lenses in order to justify specific narratives?
No, we should use actual, factual history and follow a correct narrative and we can use identity groups where necessary and justified and in keeping with actual historical fact.
The result is that the number 1 way people get into Bitcoin is through a mechanism that has none of the attributes of Bitcoin.
Of course. All of that is kind of unavoidable if you want to interface with fiat.
Once there are enough people buying and selling for cash, you'll just need to find an old payphone, or some other known meeting place, if popular technical means are legislated away.
https://kelman.law/blog/money-transmitter-licensing-for-u-s-...
The same for selling bitcoins. You can do it a few times but if you make it a business you become a MSB.
Not so. They still allow speculation on BTC price volatility and "get rich quick" gambles is what drove most of Bitcoin growth in the past few years. If anything, the big exchanges make Bitcoin even more suitable for speculation than if it was on the blockchain, since you can trade way more if you don't have to wait several blocks for your trade to be confirmed.
> It is not at all clear to me that having more (relatively uninformed) speculators will lead to less volatility for such an instrument.
I am not sure how we can judge the informedness of the speculators or what we are comparing them against. But, each additional speculator improves the informedness of the market overall.
I don't think that can be true. Leaving bitcoin aside for a moment, if a new speculator comes into the stock market who truly believes (perhaps due to misleading marketing) that "stocks only go up". This is clearly not the case from an objective standpoint. How would the entrance of such a speculator improve the informedness of the market as a whole?
Do Swiss Franks pay dividends or other types of cashflows? If I have 50,000 CHF in a box in my cupboard, what value is it beyond a small amount of fuel to burn? At some point I will hope someone (perhaps someone in Switzerland) will exchange something I want for those pieces of paper.
On the other hand the Swiss Government could decide to make the money almost worthless, practically overnight (India did this with Rupees), by removing the main purpose of having the notes.
There is consistent demand by the Swiss government, in the form of tax collection.
You are so close to understanding the true value of bitcoin.
1. You mentioned loans, and I mentioned debts. Debts matter at least as much as taxes as a source of demand for fiat currency, since the government can "reassign" the ownership of property if debts are not repaid and the government will always determine debt payments in terms of its fiat currency.
2. Suppose the money is only distributed to citizens in the form of salaries. What do they do with it? Why does anyone they do business with -- merchants, landlords, whoever -- want it? One of the reasons why taxes and debt laws work well is that they are immediately relevant to almost everyone in a country (anyone who owns property owes property tax; anyone with a business loan must make their loan payments; etc.).
3. Suppose a country relies on resource wealth to stimulate demand for its currency. That country will compete in the global market for those resources and the demand for its currency, and thus the value of the currency, will fluctuate according to market forces. The price volatility would be a huge problem for the citizens of the country as they tried to use the currency in their daily lives.
So while in theory, under very particular circumstances, such a thing would be possible, in practice it would probably not last long. Volatility, weird distortions in demand, and other issues would render the currency hard to use and reduce its value in the local market.
My actual investments are in economically productive assets.
>At some point I will hope someone (perhaps someone in Switzerland) will exchange something I want for those pieces of paper.
The amount of businesses accepting Bitcoin as a means of payment is very small. The incentives to do so are almost nonexistent. Everyone is converting it back to a valuable currency, this is why the price of Bitcoin is highly volatile. There is no minimum demand for the currency. There is no economic system that is dependent on Bitcoin being less volatile.
The Swiss government creates minimum demand for the currency through taxation. The people living in Switzerland decide to adopt the currency and thus there is an economic system that needs the Swiss Frank to roughly maintain its value. Heck, small amounts of inflation are necessary because a currency that is generating a return is highly undesirable as a means of payment. Since it's losing value over time you are discouraged from using it as a store of value. The existence of an economy that is constantly exchanging currency for goods is thus ensured.
>On the other hand the Swiss Government could decide to make the money almost worthless, practically overnight (India did this with Rupees), by removing the main purpose of having the notes.
Yes and the beauty is that everyone would consider the currency worthless. With Bitcoin there would be extremists clinging to the belief that it would retain its value.
They are (foreign currency reserves), hence the swiss banks charging to store swiss franks. Indeed Hedge Funds (darlings of HN) make a killing out of currency speculation -- Black Wednesday and Brexit in the UK for example.
There's 61 currency funds listed here, I'm sure some are betting on swiss franks.
This is of course true, but it's also true for oil, buildings, pork bellies, and any other kind of property.
When everyone's prospecting for gold, sell shovels.
Inheritance. Donations.
So, you do not have to spend everything while alive.
Not unless all economic growth stops, too. More people in the world + fixed number of bitcoins = deflation. More cars/computers/thingys made + fixed number of bitcoins = deflation.
As more goods get made relative to bitcoin, and more people come to exist, the prices of goods & services must come down relative to bitcoin in order to avoid liquidity crises - especially since the number of bitcoin is set to be capped (while population and goods aren't). Bitcoin instead was designed to handle this problem via trading in fractions such as satoshi's.
Sure, but 95% of people don't care about that. They just want an asset they will go up. Everything else is just a story people tell themselves so they're not putting 20% of their net worth in trading cards.
Gold was the best portable and fungible speculative bet for a very long time.
Bonds are speculation that a country will continue to be productive and well managed enough to pay their debts without resorting to massive inflation.
Stocks are a speculation that a company will continue to be competitive and profitable for long enough to recoup your investment.
Real estate is a speculation that an area will continue to be a desirable place to live or useful for some industry.
Rare art is a speculation that people will still be willing to pay millions for your original Picasso and that we won't be able to produce undetectable copies with better technology.
Bitcoin is a speculation that people want a digital, neutral store of value like gold was that they can park excess money in that they don't have a better use for right now.
Namely Bitcoin generates no returns but everyone expects it to. Since everything is speculation we are still allowed to rate the speculation by how risky it is. Surviving long enough to finish writing this comment has a 99.9999% chance or more. So this type of speculation isn't risky at all. Meanwhile betting that Bitcoin will go up or down is inherently risky since there is no driving force behind Bitcoin other than human behavior itself.
That human behavior is more reliable than anything else when you're working with a Nash equilibrium
My ultimate point with the comment above, is that dismissing bitcoin as nothing more that a rampant speculative bubble is not a good argument against it.
Everything we value is a speculative bubble that can eventually pop if conditions that cause us to value it change. The bitcoin bubble can pop (and has many times) but so can the 'trust in the US government' bubble.
You've reduced his argument to ridiculousness. That's kind of low-effort, so in that spirit: It's true, nothing is in fact certain. Telling yourself otherwise is a convention that makes it easier to live and be resilient.
> Today the world’s gold stock is about 170,000 metric tons. If all of this gold were melded together, it would form a cube of about 68 feet per side. (Picture it fitting comfortably within a baseball infield.) At $1,750 per ounce – gold’s price as I write this – its value would be $9.6 trillion. Call this cube pile A.
> Let’s now create a pile B costing an equal amount. For that, we could buy all U.S. cropland (400 million acres with output of about $200 billion annually), plus 16 Exxon Mobils (the world’s most profitable company, one earning more than $40 billion annually). After these purchases, we would have about $1 trillion left over for walking-around money (no sense feeling strapped after this buying binge). Can you imagine an investor with $9.6 trillion selecting pile A over pile B?
> ...
> A century from now the 400 million acres of farmland will have produced staggering amounts of corn, wheat, cotton, and other crops – and will continue to produce that valuable bounty, whatever the currency may be. Exxon Mobil will probably have delivered trillions of dollars in dividends to its owners and will also hold assets worth many more trillions (and, remember, you get 16 Exxons). The 170,000 tons of gold will be unchanged in size and still incapable of producing anything. You can fondle the cube, but it will not respond.
--Warren Buffett https://www.berkshirehathaway.com/letters/2011ltr.pdf
(emphasis added in the final paragraph)
Exxon Mobile is a speculation that they'll be able to pivot their business out of carbon fuel long term. Even monster companies falter and fail. Exxon in particular is down 50% from its peak in 2014.
Income generating assets are fantastic, but owning them requires work to constantly re-assess the landscape that makes them capable of generating income. Some people like Buffett are really good at that game. Winners like him start to win even more when they have hundreds of billions of wealth to slosh around which gives them the power to create self fulfilling prophecies with their investments that you and I don't have individually.
This is why people have started using passive index funds as savings accounts, which seems to be starting to distort the market and has a lot of people worried that it will lead to a housing bubble like crash, especially with Boomers withdrawing their retirement savings from the market while Millennials and Gen X might not earn enough to outpace the withdrawals. A demographic bomb.
Do we really want a world where doctors feel compelled to waste valuable time and attention playing the stock market game because a savings account doesn't even pretend to protect your money from inflation anymore? People from all walks of life with money to protect are increasingly riddled with anxiety that the wealth they've worked hard to save is getting washed out from under them, and it's making us all a neurotic mess of a society.
That merely reduces the potential return, it doesn't eliminate the potential for return entirely, which is something Bitcoin suffers from.
>Exxon Mobile is a speculation that they'll be able to pivot their business out of carbon fuel long term. Even monster companies falter and fail. Exxon in particular is down 50% from its peak in 2014.
Or I can just buy their stock with the expectation that they pay dividends or engage in stock buyback programs that return value to investors. Bitcoin has no potential for returns.
>Income generating assets are fantastic, but owning them requires work to constantly re-assess the landscape that makes them capable of generating income.
The inability to generate a return reduces the potential for gains significantly.
>This is why people have started using passive index funds as savings accounts, which seems to be starting to distort the market
There are thousands of index funds using completely different strategies. I don't know how you expect that to distort the market. The reason why small retail investors should just stick with a standard index is that they simply do not have high enough capital and thus returns to justify spending money or time on complex analysis or engage in manual rebalancing of their portfolio which involves taxes and order fees. Index replicating ETF are just a cost saving strategy for small investors. If you believe that small investors are distorting the market then institutional funds would rejoice and take advantage of the greater volatility and deploy more capital because of the almost risk free return that such a "distortion" would bring with itself. Since the return of a managed fund exceeds the return of an algorithmic fund people would switch their strategy until both strategies have an equal return on investment.
>and has a lot of people worried that it will lead to a housing bubble like crash
If a lot of people are worried about a crash then why are they investing in a way that perpetuates a crash? They would have to blame themselves for their risky strategies. Stop getting interest only mortgages. Stop buying GME. Stop buying Bitcoin and so on.
>especially with Boomers withdrawing their retirement savings from the market while Millennials and Gen X might not earn enough to outpace the withdrawals. A demographic bomb.
You mean well deserved inflation and full employment? Who is going to shed a tear because of that? Are Millenials going to complain to Boomers that they gave them too many jobs and too much pay?
>Do we really want a world where doctors feel compelled to waste valuable time and attention playing the stock market game because a savings account doesn't even pretend to protect your money from inflation anymore? People from all walks of life with money to protect are increasingly riddled with anxiety that the wealth they've worked hard to save is getting washed out from under them, and it's making us all a neurotic mess of a society.
You can send your complaints to your central bank. They are following a pretty stupid strategy that is counterproductive to their own declared goals. It's pretty simple, if the supply side is saturated simply stimulate the demand side (fiscal policy). Supply and demand have to be kept in balance. It's pretty ironic how Bitcoin anti inflation warriors complain how inflation erodes savings yet they are eroding even faster in a low inflation economy.
It's a useful commodity resource. It can be use for industry, science, dentistry, jewelry, etc.
But I do think the store of value use case where you arbitrarily hoard this useful commodity in a vault so you can sell it later is starting to die. Nation states and companies that need it for it's actual utility will still hoard it as a strategic reserve, like we do with crude oil, helium, uranium, water, grain, maple syrup, etc. But that's a complex risk assessment decision that depends on a lot of variables from predictions of future supply flow to geopolitics that individuals won't be able to evaluate.
I think bitcoin will replace gold as the long term money battery, where you can arbitrarily store value that you don't know what to do with yet for a long time. It might take decades of continued volatility and growth to get to that steady state.
Bitcoin as a working system has a value.
It won't inflate aways like fiat.
It requires no upkeep like buildings and other property.
It requires less intuition and research than fine art.
It is more portable and storable than gold.
It is more readily accessible than most things.
It is less dependent on products, market fit and changes, executive changes, etc. than companies.
It will take some value from each of the other stores of value based on investors' preferences and abilities.
I suspect the physical footprint required to keep the Bitcoin network running is actually quite significant. Considering estimated power usage of all the "mining" operations.
The inflation/deflation curve of US fiat has been much more predictable than BTC. You're statement "just another store of value" is almost a tautology, as any tangible or intangible item in the universe can potentially fit that definition. What matters for a useful currency is that it is a stable store of value.
As long as you admit that BTC is a speculative commodity rather than a currency, we're fine. But this isn't how it was marketed to all of us for the past 10 years. "coin" == "item of currency". Now the narrative has changed to "digital gold" because that's what's selling right now.
And you should further admit that for the past 10 years we've been promised a decentralized currency with lower transaction fees than mastercard/visa/escrow/forex-fees and faster transaction times, and none of those things have happened.
There is risk involved in both, but they aren't identical.
Bitcoin by contrast isn't a productive asset, has no fundamental property like gold does, that exists outside of its original purpose, and its maintenance requires constant usage of energy just to jog in place. Switch off the BTC network, and value goes to zero, which isn't true for gold.
An electronics manufacturer that uses gold is an income generating asset. Gold is a commodity that does nothing on its own.
Some even have better features (think Ethereum or Monero or Zcash).
Nothing is stopping people from launching bitcoin2,bitcoin3, etc and having the same technology available - yet BTC is the major player skyrocketing.
This is an example of the market being irrational longer than expected, in my book.
The problem with Facebook is that it's not exclusive - there are tons of alternatives.
Some even have better features (think Twitter or TikTok or Discord).
Nothing is stopping people from launching Facebook2, Facebook3, etc and having the same technology available - yet Facebook is the major player skyrocketing.
This is an example of the market being irrational longer than expected, in my book.
The way I look at it: people create things, these things have certain effects. That's all there's to it. I don't mind that it's almost 100% against the idealism of Bitcoin, the fact that centralized exchanges were created and used is interesting in itself. Moreover, it's not necessarily incompatible with decentralization since trading Bitcoin on an exchange (centralized) is something else than exchanging Bitcoin via the blockchain (decentralized).
What are you talking about? When you purchase coins on Coinbase, they go into a wallet that you can easily deposit to through another means or withdraw to another wallet. This is the same with Binance, Kraken, CashApp, and so on. Exceptions would be Paypal or Rob-in-'hood where they have total custody, which has advantages if the user doesn't care about actually owning the coins themselves.
Don't like the centralization of Coinbase? Then just don't use it. There's plenty of other options for purchasing bitcoins. Buying them P2P is easy as hell. Local Coin Swap and Local Bitcoins allow you to buy crypto directly from individuals with an escrow system.
By the way, not everyone is interested in the same advantages of Bitcoin. One of the reasons Bitcoin has been on he rise the last year is that it has far greater potential than a savings account to grow in value and, unlike gold or silver, doesn't take up physical space. Not everyone cares about decentralization or is averse to risk.
Its potential may be offset by its environmental impact and lack of any fundamental value.
What are the other options? Using an exchange is risky (or at least seems risky to me, a person with almost zero crypto experience). Bitcoin ATMs? I know they exist, I've never personally seen one. Handing cash to a stranger? Definitely risky.
But once you have your cyrpto, you can move it to your own wallet, or anywhere else you'd like. I can't do that with fiat currency.
But if you want to interact with legacy banking systems then of course you need an exchange that's hooked into all that. I don't see why that should surprise anyone.
Also, if we're pointing fingers, the influence Coinbase has on Bitcoin is insignificant compared to the Chinese mining conglomerates. The US is not the rest of the world.
People are motivated to talk and report based on a myriad of things, but lately this perception of "power" has been center stage. If you ask these people I imagine they would tell you that when Bitcoin hits a high it makes those people, and Bitcoin, very powerful while when it's $8 they're just nobodies wasting time in a dark room and coming up with memes like HODL.
[edit] David Gerard comes to mind - author of Attack of the 50 Foot Blockchain and Libra Shrugged - and HN user (dgerard I think) (https://davidgerard.co.uk/)
More recently Amy Castor, also an HN user (amycastor) (https://amycastor.com/)
And of course Bitfinex’d is back and public again on Twitter. (https://twitter.com/Bitfinexed)
As such it gets a lot of pro-crypto folks participating to get a different perspective. It’s not high brow HN level discourse but to your point a lot of serious stuff ends up there.
Considering the topic it’s pretty balanced.
Before 2017 the price of Bitcoin was stable as it wasn't worth anything.
From 2017 to 2021 the price of bitcoin has changed every year by: 1,300%, 71%, 75%, 328%
Compared to the DJIA, which over the same years changed every year by: 25%, 8%, 21%, 11%
In the last four years, two of those years have had price changes in the hundreds of percent, and the other two years the change was still 300% the greatest change in the DJIA across any of those four years.
You live in an alternate reality.
Pre 2017 was crazy volatile and unstable. It's still crazy, especially compared to regulated, national markets, but it does seem to be gradually smoothing out from the wildness of it's youth. https://www.buybitcoinworldwide.com/volatility-index/
But even then you could see that Bitcoin wouldn't scale. Most people couldn't run full nodes, block sizes were getting bigger and bigger. Bitcoin worked great when you had a few hundred thousand people using it but with 10s of millions it doesn't work well.
Can you elaborate on that? I checked few years ago and it was possible to run full node. What would prevent me from running full node right now?
Call of Duty: Modern Warfare is 231 GB, the bitcoin chain is 381 GB.
Call of Duty + Red Dead Redemption 2 = bitcoin's entire chain.
This is about $6 USD of hard drive space. The throughput of bitcoin is about 1.5 -kilobytes- per second. At that speed reddit.com would take 36 minutes to load.
Also no it doesn't. It takes a fraction of a second on a single core for each block. It's 900KB for a full block. The only reason it would take a long time is a particular client using CPUs extremely inefficiently and leaving them idle most of the time.
Even a leftover smartphone from yesteryear should be capable of running a full node, as long as you scale storage appropriately.
I synced a full BTC node from scratch on budget hardware last week, took about 2 days total.
Meanwhile, a full tracing archive ETH node took >4 months on a dedicated 8c16t CPU, 64GiB DDR4 RAM and tiered NVMe + SATA SSD for the 8TiB.
All of this moved over to Ethereum long ago but those outside of the crypto space might not know that. Thousands of hackers have created little neat experiments and projects for others to use and build on and more are released everyday.
Some of my favorites are https://dontbuymeme.com/, https://aavegotchi.com/, and https://quadraticvote.co/. There's too many to list (like the internet itself) but a lot of communities for specialized topics have formed such as art people flocking to NFTs, meme lovers creating self funding and self organized communities, and lots of cool governance tools for voting and organizations like https://daohaus.club/, https://colony.io/, and https://aragon.org/.
It really does feel like the early internet and I can barely keep up with all of the cool stuff being shipped.
Add to that experimental unpegged stablecoin projects[1], and you realize the dream of a "P2P electronic cash system" is alive and well. It's just being worked on by different groups than originally (because if you own a big bitcoin stash now, it's hard to resist the temptation of pushing the SoV/ponzi narrative).
i'll also add in https://clr.fund/ as its relevant to the bigger question of "how do we fund open source public goods" that might be relevant to hackernews readers.
> The continuously high Ethereum gas fees cause betting fees and operation costs to skyrocket. Hence, we decided to postpone the next race until further notice. We're currently working on a 2nd-layer scaling solution.
A shame that Ethereum gas fees are limiting enough to stop such a fun project.
"Less than 2% of the anonymous ownership accounts that can be tracked on Bitcoin’s blockchain control 95% of the digital asset" - at first I thought this was really astonishing. Now, I'm not so sure. My first interpretation was that 2% of bitcoiners have 95% of the bitcoin - but now I wonder how many addresses a typical person has. e.g. If I create an address every time someone buys illegal drugs from me over the 5 years I sell them on the darknet, and later coalesce all my earnings into some address, does that mean that my X empty addresses are counted in the 98% of have-nots and my one coalesced address in the 2% of haves?
Depending on how many addresses people typically use, and given the multi-year history of bitcoin, it actually seems somewhere between not surprising and incomprehensible to me. Like, I guess that's a percentage it could be, but I don't know how to interpret it. I think a better news article would provide context on stats like this so the reader could understand rather than just leaving the reader to figure out the meaning for themselves.
Consider how much was probably lost in the early days, from dead hard drives and such. For one specific example, bitcoin creator Satoshi Nakamoto appears to have ~1 million bitcoin sitting untouched [0] - that alone seems to be ~5% of all existing bitcoin [1] owned by one person, with an estimated 11-16% more just "lost" [also 1].
[0] https://decrypt.co/34810/how-many-bitcoin-does-its-inventor-...
[1] https://www.buybitcoinworldwide.com/how-many-bitcoins-are-th...
My impression was that they don't and that a lot of transactions are actually settled within the exchange using good ol' relational databases and not the blockchain.
If that's the case, then all of these people will get lumped into just a few exchange controlled adresses, which will give an exaggerated impression of concentration.
Definitely not. Exchanges that aren't stupid keep the vast majority of their funds in cold storage, which is held in a small number of addresses.
Most people store their bitcoin on exchanges, even though that's a pretty bad idea. Not your keys not your coins.
The article is massively misleading. It should say "95% of bitcoin is controlled by a small number of entities, most of which are exchanges". That's still not good, but at least it's not deceptive.
Yeah, that's exactly what I felt as well. Thanks for clarifying.
That sounds dumb on their part, as that money isn't doing work that it could. Perhaps they should invest it in the meanwhile. But since it's users' money, maybe set up a provision that only a part of the funds is invested, and the rest stay put, to give them back to the users on demand. Most people don't regularly take out all their coins at once, so the exchange won't need to have them all on hand, most of the time.
"a close group of people who are involved in similar activities and who help and protect each other, sometimes to the disadvantage of others"
Actually, it's far worse in the fiat financial world.
If you look at Bitcoin and Ethereum you find concentrations of power, information, and etc at many levels; centralization. Even at the technical level the solution to controlling change is often to have minority steering groups whose membership necessarily suggests a concentration of power enabling them to exert influence.
How in the world can you call Bitcoin a "money network"? Unless I'm missing something obvious there's no more network effect to it than to any other popular currency or security.
But yes, Bitcoin has already eclipsed all but a handful of stocks with a market cap clocking in at $800B-$1T, a daily volume of $50B+ and its more liquid than any stock since it trades 24/7 and can be remitted without intermediaries.
Decentralized finance, while originally designed to give more power directly to the people (Nakamoto’s “one CPU one vote”), is now clearly shown to be beholden to an oligopoly of private interests. It’s important to point out the reality behind the fallacious narrative of “the people are in control,” so that people wake up and realize that DeFi without govt. intervention is a bad thing.
An individual has zero say in Bitcoin prices. At least with fiat currency, if they don’t like what’s happening, they can change the govt. to one that is more aligned with their collective fiscal view.
To change the Bitcoin price, vote with your dollars, going long or shorting. You will materially impact the order book and resulting price. Other ways exist: starting a company like the ones mentioned in the article.
In contrast, in federal elections you have a vanishingly small chance of casting a deciding vote between two participants in an actual oligopoly (more specifically, a duopoly), who are themselves primarily allied with powerful interests which include the banking sector. Does anyone really believe their reps are responsive to them on issues like monetary policy?
Be careful what you wish for. Unless you're secretly Bezos or another of the billionaires' club, in a plutocracy you and I and countless others are just peons. At least in democracy you have a voice, regardless of your bank balance. Democracy may suck as a system, but it's definitely better than the alternatives :) I'll venture further and say those who say otherwise have either never actually lived in the alternative, or secretly harbour delusions of grandeur.
Is democracy better? Why did our founders have such a negative opinion of it? The history of unrestrained Democracy is one of failure, e.g. voting oneself into poverty via socialism, or a French-style democratic revolution in which heads roll. So yeah, maybe take your notion of democracy down a notch, it's not so noble.
Anarchy only works for the person on top, and they know it, that's why in every real anarchy, the ones on top spend most of their resources trying to stay on top. For everyone else, it's a universally miserable experience.
Uh, no, the Fed didn't.
The US Treasury did because Congress directed (not asked) it to. Congress can make non-binding requests, but neither round of stimulus checks was a product of such a nonbinding request, and neither was executed by the Fed.
> It was unprecedented in US history
The size was bigger, but broad individual stimulus checks based on past tax filings are not unprecedented in US history. They were done in 2001, for instance.
> Under what circumstances would that be possible with Bitcoin?
Fiscal stimulus would be just as possible with a Bitcoin monetary system as a fiat one; the difference is that the divide between fiscal and monetary policy, which MMT correctly points out is artificial in a fiat system, would be a hard divide in a Bitcoin system, which would mean that where in fiat securing financing such as by selling debt is not strictly required for deficit spending, though traditionally done because of the strength of the belief in the fiscal metaphor, in a Bitcoin system there would be hard constraints which would require financing of deficit spending. This would probably drive up the cost of borrowing, since while lenders don't want borrowers to monetize debt, the fact that they ultimately can reduces default risk since it is impossible for a debtor whose debts are denominated in its own fiat to be forced to default through insolvency.
This article in the MIT Technology Review seems to disagree: https://www.technologyreview.com/2018/04/10/3060/bitcoin-wou...
> Are paywalls ok?
> It's ok to post stories from sites with paywalls that have workarounds.
> In comments, it's ok to ask how to read an article and to help other users do so. But please don't post complaints about paywalls. Those are off topic.
More details:
https://news.ycombinator.com/item?id=10178989
You can get around Bloomberg's free article limit by clearing their cookies (or using a browser extension like uMatrix that automatically blocks them).
Their articles are also readable if you submit them to an archive site. For example, someone posted this link in another comment: https://archive.is/AqtRg
Literally only one line in this article lines up with the headline: "Less than 2% of the anonymous ownership accounts that can be tracked on Bitcoin’s blockchain control 95% of the digital asset, according to researcher Flipside Crypto."
Then its a story about bitcoin beginnings and the lead up to coinbase. Does the article imply that the Coinbase owners own 95% of the digital asset? Who knows, article never says. Who is the "Coinbase Mafia"? Who knows, i guess its just every person who was named in the article. Who holds sway over bitcoin? Find another article cuz this one wont tell you.
People want to believe just a little longer.
There is no unique creation of value anywhere in the Bitcoin life cycle. Any liquidity or anonymity externality that doesn't equally apply to USD is probably accruable only by criminals and traffickers.
The transactions are slow and costly, and there's no guarantee that some governmental research agency hasn't already broken the cryptographic underpinnings.
That will be quite a day!
It's not that the information is incorrect. It probably is and it does tell us something about some of the big players around Coinbase.
But the whole bitcoin 'ecosystem' is essentially a collective criminal organization, with some players being closer to the dirty parts than others. (I'm leaving out everyday holders of bitcoin, just talking about insider types.) These big Coinbase players might not 'touch the poo' directly, but their hands still get stinky.
The price action in bitcoin is determined across a network of exchanges, most of which do not use real dollars (or other govt currency). They use crypto only for trading, including the fake 'stable-coin' tether.
Tether (the company who issues the currency tether) has been shown definitively to be running a scam and are completely dishonest.) They have issued $35Billion worth of their fake dollars. Until recently they were issuing on the order of $1B per week!
Tether is a sister company to the exchange Bitfinex with the same owners and management. So essentially the same company. They just signed an agreement with the New York Attorney General where they paid a fine of $18.5M (notice difference in scale). The agreement spells out exactly how they have been scamming people. This is based on information coming from the company itself. This is not FUD, just FACT. (interestingly since they signed this agreement ~10 days ago, they stopped issuing tether.)
One of the central players in this ongoing criminal operation who has been taken out is Crypto Capital Corp. They ran a shadow banking system for many of the big exchanges, including Bitfinex and Binance. The Feds seized $850M from CCC for money laundering, which precipitated a crisis for these entities and intensified the criminal activity of the many industry insiders connected through this shadow bank.
My guess is that Tether issued $35B in fake USDT (tether) almost exclusively without dollar collateral backing. (the original premise of tether was each would only be issued on receipt of a true USD by tether, and therefor each USDT was pegged to a USD, the peg holds for now but the dollar backing is not there, that's another story.)
Most of this $35B was issued over the last year when we have seen a huge rise in bitcoin price. The tether currency only has one purpose, to buy cryptocurrency. So this is a huge amount of liquidity introduced into the market. (Compare to the hype around Tesla's $1.5B bitcoin purchase.)
It is the price appreciation that drives this whole market, including the business of Coinbase, even though they do not deal with tether.
The OP article mentions none of this! Sure, it reveals some insiders, perhaps on the more legit side, but ignores the real engine of this speculative bubble/fraud.
It has the effect of 'white-washing' this dirty game.
It's really gross.
I noticed this too and am very curious if they will ever do so again. If the Tether theory is true, the transparency terms of the settlement would seemingly make it legally risky for Tether to issue new tokens unless they were truly backed by US dollars.
We'll find out soon enough.
Zoom out.
EDIT: it might be a lawyerspeak, but it is still a good advice: there's a reason why Bitcoin has been down $14k this week and that reason is the settlement with NYAG in the Tether lawsuit. Situation has changed, there's one fewer scam company there to artificially inflate Bitcoin price, so expect downward trend for at least the next few months.
The social commentary angle can't justify that line either: Bitcoin is a pseudonynous digital currency, that started trading at $0.10, and required nothing more than having a basic windows machine, and downloading the node software, to hold from the start. Very early on, downloading the standard wallet software was also all it took to mine bitcoin. If mostly men own it, it's because mostly men were interested in the concept early on.
In any case, despite containing that line, this was a good article and worth reading.
But as is becoming clear to many, you cant please everyone all of the time, and, especially these days, there are some people you cant please any of the time.
What phrasing would you prefer? "Humans" or just "men"?
Not that it matters, but, expecting the whole world to share the same perversion is a bit too much..
Otherwise you end up propagating stereotypes.
If it's a small group of heretofore unknown people with a major stake in a new, exotic and opaque, 1 Trillion dollar asset pool, then describing them as 'all men' is perfectly reasonable if they are. Just as if they were all American. It's relevant because they are obvious characteristics of the group and not a random outcome.
If there was some women in the group then it wouldn't have been notable.
This is not SJW journalism it's just journalism.
I don't see what the most common gender among the leadership team tells us. What does it matter if they are mostly, partly, or entirely men or women? This article is written in Bloomberg, the four founders of Bloomberg plus their chairmen are all men[1] - does that matter? If I were to put on my "just journalism" hat, maybe I'd think it says something when organizations led entirely by men criticize organizations partly led by women for their social justice bona fides... Or, maybe I'd think that most executives are men, most people in tech are men, most people in crypto are men, so it's really not that surprising or informative that most of coinbase's leadership are men. Or, maybe it does matter for some reason, but the journalist should explain that reason rather than just drop the fact and imply it means something without explanation.
> Most women aren’t as into crypto as men and that’s OK. It’s actually good! Cryptocurrencies consume huge amounts of energy, enable criminality, often lack security, and generally just don't work very well.
> But let's not encourage other women to throw their money away on nonsense. And let's not think that just because a lot of men are doing something, we should do be doing it too.
https://www.ft.com/content/77f34d67-b797-3359-a89d-f9447ca40...
"Women make the majority of the school's Computer Science enrollment which used to be mostly men."
Perhaps a tech savvy community is more aware of the flaws of BTC, and therefore more bearish on it's prospects.
What the technology actually is capable of, and is doing today, these are different things.
I dunno.
I think most HN folks are against it for political reasons to a certain extent. Even if they say they aren't, they are getting their information from and socializing in a bubble with a political bias.
There are some news topics on HN that i will never read the comments of because of how motivated and biased the reasoning is behind them. Bitcoin comments I will still read though, since it's fun to see everyone's tone and reasoning evolve as Bitcoin slowly gets more traction and rises in price over time.
Dabbling in other cryptocurrencies with comparable POW's and blockchains to Bitcoin is basically speculation and gambling. I don't think they have very compelling use cases that Bitcoin+LN doesn't solve already. I assume non-BTC cryptocurrencies will survive in the long run, but who knows which ones, and eventually the LN will make swapping and conversion of currencies trivial and/or automatic.
A recent development is that of NFT's for example. And the smart contracts thing is just understandable for us tech nerds, but if all our customers and entrepeneurs get wind of it.. brace yourself.
Perhaps because it doesn't, and can't produce any "new tech"?
> And the smart contracts thing is just understandable for us tech nerds, but if all our customers and entrepeneurs get wind of it.. brace yourself.
No one will brace themselves. Smart contracts have innumerable problems that cannot be solved, and are inherent in the fact that it's just a piece of technology, and technology by itself can't do anything.
1. They are digital only. And can only govern things that can be programatically checked. So, anything that can't be checked (for example, delivery of physical goods) is out of the question. If you say "but yes, those things can be provided by people", you're back to being no better than regular contracts (which also have a bunch of laws and regulations around them protecting all the parties in the contract).
2. They require all involved parties to understand, vet and audit programs written in any number of esotheric programming languages. Yeah, good luck with getting customers and entrepreneurs getting wind of it.
Assuming the Winklvoss Twins ONLY kept the initial 11,000 BTC they purchased - Those coins are worth 497MM today. reply
It’s kind of ironic that BTC pollutes more than any prior monetary invention while simultaneously having higher levels of internal income inequality.
If your transaction counterparty is within 1250 miles of your house it takes less energy to simply drive there in a Tesla with a brick of gold.
It’s also funny because I suspect the overwhelming majority of those accounts simply lost their keys.
Certain bitcoin criticisms are understandable, but painting the block chain and the whole crypto industry with a broad brush of 'scam', 'shady', 'useless' is just down right moronic and embarrassing.
Many of you claim to be technologists that leverage the power of technology to benefit humanity. Yet you can't plainly see how various projects in the space like ethereum, nano, chain link, cardano etc. have useful applications that will change the landscape of finance and economics forever.
Painfully cynical bunch you lot are.