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Comment by karpierz | Hacker News Reader

The core issue I've seen that goes unanswered is what problem does BTC solve? The answers I've seen so far are:

1. Avoiding Venezuelan hyper-inflation - it is a use-case, but doesn't really apply to the United States for example.

2. Store of value - volatility is way too high and there are much better alternatives (Treasury bonds)

3. Evading capital controls - it is a use-case, but not really applicable to most citizens in the US, and is unlikely to be applicable in the future.

4. Settlement layer for banks - banks already have a settlement layer that works for them.

The downsides of a decentralized system vs. a centralized system are an increased cost (in energy, computation, time, money, etc.) of transaction. So what justifies the cost?

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> The core issue I've seen that goes unanswered is what problem does BTC solve?

To me, it's trustless money. I don't need to trust the US gov, I don't care about who they will elect or which wars they are gonna start or which banks they are gonna bailout.

You can verify everything through code and math. If that's not valuable to you, maybe there's some other use case you're interested. If you've done your research and there's really no use case that excites you, then you can just ignore it.

It's NOT trustless money. Instead of trusting the US gov, you are trusting that this decentralized ledger will gain acceptance by the whole world. Which one is more of a leap of faith?

> you are trusting that this decentralized ledger will gain acceptance by the whole world.

Bitcoin itself is inherently trustless, that's the whole point of it. You can trust that there will never be more than 21M Bitcoins, you can trust that there will never be a double-spend, you can trust that it will run 24/7, etc.

Whether it will gain worldwide acceptance is another matter (btw, adoption is increasing at very fast pace now), as long as there's a subset of the world that accepts it, that's good enough for me.

> Bitcoin itself is inherently trustless, that's the whole point of it. You can trust that there will never be more than 21M Bitcoins, you can trust that there will never be a double-spend, you can trust that it will run 24/7, etc.

No it isn't. If the Bitcoin devs and miners agree on a change (for instance, to increase the cap), it'll happen, so you have to trust them.

They can't implement those changes uni-laterally, it would cause a hard-fork. In addition to devs and miners, you need users, network nodes and exchanges to agree to it as well.

And even if that change were to go through, there will still be people running the old chain (Ethereum Classic is still alive). So those parameters would only change if they improve the network for most stakeholders, otherwise, most people would stay on the old chain.

> They can't implement those changes uni-laterally, it would cause a hard-fork. In addition to devs and miners, you need users, network nodes and exchanges to agree to it as well.

Sure, but the devs do have the "Bitcoin" name, which would leave them well-positioned to market their changes. Bitcoin Classic may stick around, but like Etherium Classic, it may not be very healthy: https://www.coindesk.com/ethereum-classic-blockchain-subject...

Nobody owns the "Bitcoin" name, people collectively decide which chaintip to call Bitcoin and that's it. The devs own "Bitcoin Core" which is just one implementation of the network.

This is where the difference between theory and practice comes in. Who is 'people' here? Billions of people today have no idea what bitcoin is and will have no say in 'collectively' deciding which chain tip to call 'Bitcoin'. BTC is decentralized in theory, but with literally .0001% of the population owning like 99% of BTC it can't get more centralized..

> Who is 'people' here?

People in the Bitcoin ecosystem.

For example, when the Bitcoin/Bitcoin Cash split happened, you had people dumping one for the other to manipulate the price in their favor, you had miners that decided which one they wanted to mine, exchanges that decided which one they wanted to put under BTC ticker and some people that just stayed on the sidelines waiting to see which chain would prevail.

For a brief moment, Bitcoin Cash was actually close (in price, adoption, etc), but then eventually people chose the original chain as Bitcoin and we know the rest.

Nitpick, Cash was the “original chain” as the split happened because what became the BCH portion of the network declined to adopt a proposed update

Just goes to show it’s not necessarily clear cut what’s considered “original” at every point in time.

Canonically, Bitcoin considers the longest chain in terms of accumulative difficulty (roughly translatable to hash power) the “real one

>Nitpick, Cash was the “original chain” as the split happened because what became the BCH portion of the network declined to adopt a proposed update

AFAIK adopting segwit is a soft-fork (existing clients will continue to work, only miners need to update), but raising the block limit is a hard-fork (all clients need to update).

> Which one is more of a leap of faith?

Governments of course. Anything is better than trusting governments.

Ha ha good one

>To me, it's trustless money. I don't need to trust the US gov, I don't care about who they will elect or which wars they are gonna start or which banks they are gonna bailout.

If there is nothing to spend your Bitcoin it's worthless. If there is no US economy that is begging to exchange "worthless" dollars to Bitcoin then your Bitcoin will not amount to much. Really, when people are betting on Bitcoin or gold they assume that in the future there will be a bigger pie and thanks to their ownership stake in Bitcoin or gold they receive the same percetage portion of the bigger pie. If the pie shrinks because of a war then guess what? Your Bitcoin will be just as worthless as the dollar.

Trustless is bad. Humans need trust without it we get genocide and other bad things. Trustless is another way of expressing a desire for a fantasy world where people are not interdependent and each hacker can live in their own bubble with no obligations to society. At some point the militias you pay to kill and protect you will kill you hoping to find your treasure hoard

This is not to refute your comment, but would you have been able to foresee what problems the internet will solve when ARPANET had 15 sites in 1971? I mean if someone would have told you back then that you'd be able to stream a movie in 4K from more or less anywhere in the world, you'd probably have laughed that person out of the room. So look at ARPANET back then and look at the internet today and how much innovation has happened on top of it. And I'm sure there will be a lot more innovation on the good ol' internet for many more years to come.

In a similar way, BTC will evolve. It arguable already has. All the money flowing into cryptocurrencies and the crypto tech stack drives more and more competition (and yes - also corruption and bad behaviour) and some of it will be meaningful. Just like some tech startups were/are scams, some are kind of useless but harmless and a few changed the world. I personally don't know what problem(s) crypto will solve, but I can see that the technology summons a lot of creative energy. Creative energy that gets empowered through capital and channeled through competition will eventually produce breakthroughs somewhere. Let mankind's creativity run wild and let yourself surprise by the unexpected outcomes!

I use it as a store of value.

Because I expect that it will continue to significantly appreciate (it has gone up 10X or more in the last year!), I couldn't care less about its volatility. I expect that as its exponential rise slows down (like all exponential growth, it must come to an end, perhaps after a few more halving cycles), the volatility will decrease accordingly.

You're right that there are other systems to store value, but it doesn't follow that Bitcoin doesn't have value as one. It does for me, today. I've used it (together with some other systems to store value) in a very real sense to store portions of my salary and, months later, consume it, acquiring tangible assets. I couldn't care less about having to convert it to Euros first, that doesn't make it any less useful to me.

> I use it as a store of value. Because I expect that it will continue to significantly appreciate

Then you don't use it as a store of value; you use it as a speculative investment.

Meh, not really. At the end of the day, same as gold, bonds, stocks, fiat and real estate, I use it just to park the outputs of my production today, with what I think is a reasonable expectation that I'll be able to get it back in the future (which I use together with other similar asset types). So far, it has greatly fulfilled my expectations and I have little doubts that it'll continue to do so. I consider it very useful.

But sure, you're free call it whatever you want and continue to push your world view, and miss the point that, for me, today, it is very useful.

Do you feel all crytocurrencies (or crtyptostoreofvalues) deserve the same status as bitcoin? If not what makes bitcoin special?

Yeah the cost of decentralization is so high that you really need to be gaining something from it. I’ve long said that if drugs were legal it would remove most of bitcoins usage.

Money is ultimately a reflection of power, and decentralization is merely a tool for when those power structures limit the market.

The core issue that Bitcoin resolves is transferring power from MBAs to nerds.

I'd say it's more transfer of power from politicians to the the people, but we can always disagree.

well, MBAs here is a catch all phrase that includes politicians (even though they are usually lawyers).

You seem to have a very US centric view. There are other 7.5 billion people in the World.

The main issue with BTC being a store of value is that it's already hyper hoarded. Look it up -- it's far, far more concentrated in a few hands than any real-world currency or any real-world asset.

It solves so far the problem of how do I own an asset that only goes up? That is pretty much it

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