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Comment by rantwasp | Hacker News Reader

the author strikes me as ignorant TBH. Here is what people want when it comes to money: ability to exchange the money for goods. That’s it.

Money is valuable because it can be exchanged and everyone has 1) accepted that you can exchange it 2) is using it for this exchange.

What bitcoin is is captured in its name: bit coin == digital money. It’s not complicated. Also, breaking news: most money (like 90%+) today only exist in electronic form (in that sense the dollar is a digital currency with a paper form and so on)

People hate bitcoin because they don’t understand what it is and perceive it as being somewhat of a threat. It’s not. The ultimate success or failure of bitcoin will depend on how many people use it and what it’s used for.

Also, as a side note, the blockchain idea is revolutionary. Distributed consensus in a zero trust environment? yup. Has this been done before at this scale?

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Too bad that bitcoin can't actually be used as money at the grocery store, to purchase a car, to buy fertilizer, or in any of a billion other ways that money can be used.

Not here to defend bitcoin, but that's not true. You can buy all three of those (to varying degrees in different countries).

i will bet you real bitcoin that given enough time you'll be able to make all those transactions. there is absolutely no reason for someone to not accept bitcoin when they can literally turn around and convert it in fiat if they don't like holding it immediately.

Time is a problem. If you lose value in time it takes to convert its not good. Most businesses don't care if the value increases nearly as much as it decreasing. Bitcoin volatility does not help it's case. I guess we trust banks will always be available to get dollars out when needed.

You should rethink that phrasing. That's a heads I win tails you lose kind of proposal.

There are loads of reasons why people will not deal in bitcoins. One reason is what happened at Poly Network since you posted your comment.

Bitcoin and Crypto in general are filled with thieves and scam artists. Just because some ethical people can navigate that minefield at relatively low dollar transactions - that doesn't mean many people or businesses want to stake their livelihoods on it not failing.

The important thing is that I can't buy them where I live, and neither can anyone I know. No - people cannot use bitcoin as a real-world currency to perform daily tasks. Can you right now stop all transactions in dollars or other currency and do everything in bitcoin? My guess is that no you cannot.

> People hate bitcoin because they don’t understand what it is and perceive it as being somewhat of a threat.

I dislike Bitcoin because (a) it's causing quite a bit of environmental damage and (b) it has revolutionized kidnapping and ransomware.

This is supposed to be a fair trade-off for letting people circumvent e.g. onerous drug laws. I'm not convinced it's worth it.

yes. bitcoin is the worst /s

you know what’s the preferred currency for crime? the USD.

If you look at how something, a tool, is used and declare it bad I’m not sure you’re seeing the big picture.

A hammer can be used in construction or to bash someone’s brains out. Nobody ever mentions banning hammers because someone used one in a f’ed up way.

for the environmental damage part: in a free market you cannot really control what people are doing with energy. You use the energy, you pay the bill. End of story. If the profit you’re making from the activity is greater that the money you are putting in people will do that activity.

> A hammer can be used in construction or to bash someone’s brains out. Nobody ever mentions banning hammers because someone used one in a f’ed up way.

A hammer is no better suited for killing people than thousands of other common household (or natural!) objects. Bitcoin is uniquely suited for ransoms of all types.

Guns are perhaps a better analogy than hammers here. Not a perfect analogy, but a better one.

> for the environmental damage part: in a free market you cannot really control what people are doing with energy. You use the energy, you pay the bill. End of story. If the profit you’re making from the activity is greater that the money you are putting in people will do that activity.

That's not a rebuttal, it's a description of the problem.

> It’s not. The ultimate success or failure of bitcoin will depend on how many people use it and what it’s used for.

Bitcoin has already failed as money. Even most coiners admit that nowadays.

> Distributed consensus in a zero trust environment?

The whole cryptocurrency environment still relies on plenty of trust (exchanges, programmers, apis...). It's just less regulated, and this is why it is full of scams (https://www.rekt.news/).

the environment does not rely on trust. When you make a transaction you make a transaction without needing to trust anyone.

Exchanges are needed only in the world where you need to transform bitcoins into other currencies.

Relying on programmers, api, etc: if you want to go down that rabbit hole, you can literally take the code and verify it yourself. It’s out in the open and it’s backed by cryptographically sound primitives.

Bitcoin has failed as money? Most coiners? Where is this coming from? Do you have anything to support these assertions?

> When you make a transaction you make a transaction without needing to trust anyone.

For the transaction to actually take place it means that it needs to be appended to the blockchain, and whether it is appended or not is not up to you. Instead you have to rely entirely on others for that to occur. This is the very definition of trust.

nah. no offense but you don’t understand how it works.

there is nothing preventing you from running your own node or miner.

also, you are overextending the meaning of trust. Do you trust air when you’re breathing? Do you trust traffic lights? Do you trust you’re going to eliminate excess water through pee?

The point is that if you have a series of established rules and a way to verify that they are actually applied as designed, it does not really matter who applies them.

One miner cannot become a bad actor and invent its own rules.

I wouldn't say running your own miner is necessarily the way to not "trust anyone (else)", because at the current global hashrate the chance that your individual miner will get to mint a block with your transaction in it is basically zero.

The more correct answer is that your transaction has fees, which is why other miners are motivated to include it in their next block. (And also why a majority of the hashrate being centralized into a single entity with a singular will is a doomsday scenario for bitcoin.)

Exactly, and fees are only an incentive. There's nothing stopping miners from discarding your transaction. Therefore trust that miners won't discard your transaction is required.

Fees being an incentive == trust is a strange definition of trust. But if that's the definition you want to roll with, sure distributed currencies rely on trust.

the "only" part before "an incentive" was important. They weren't saying because the fees are an incentive there is therefore trust, but rather, that one is trusting that, essentially, that this incentive will be enough.

Of course, the concern that some particular miner might just have it out for you to a degree that outweighs this incentive, or who has some other incentive to not include your transaction, is more mitigated when there are more separate/independent miners/pools .

also, in case of asteroid impact you will lose all your money. what's your point?

why would the miners discard a transaction and not another one given that the value they extract is the same?

I don't know why they would discard a transaction. The point is that they can discard transactions, which appears to invalidate the claim that bitcoin payments are "uncensorable" and "trustless".

> the environment does not rely on trust. When you make a transaction you make a transaction without needing to trust anyone.

Ah yes. Because I don't have to trust anyone that the order from BitcoinAmazon will arrive. Or that the house I bought on BitcoinZillo will actually be mine. Or...

I understand what it is. I hate it because it's literally wasting more electricity than some countries for no reason and has also led to ridiculous demand for GPUs making them near impossible to source at MSRP.

you know what else is wasting electricity? the whole financial system. I'm gonna bet you real bitcoin that they waste way more. Also guess what? They close at 5PM and during weekends. So there is that.

The energy consumption and the high prices of GPU comes down to capitalism and freedom of choice. Who are you to decide on what we should spend energy on and what we should not spend energy on? If an activity yields more money that it consumes (even if it's in the form of an electrical bill) people are going to do that activity.

> People hate bitcoin because they don’t understand what it is and perceive it as being somewhat of a threat. It’s not.

For those paying higher prices for electricity or GPUs it's rational to see Bitcoin as a threat.

isn’t this “the dream”? a free market where the price is dictated by supply and demand?

You see it as a threat? Fine. But if you’re gonna be rational focus on all the things that impact you - don’t just listen to propaganda parroting the same things over and over again.

On a side note: at least for BTC GPUs have not been a viable option is quite a while. also, mining happens in areas with low electricity prices - so not sure either of these arguments have legs.

The bitcoin price is correlated with the price of other cryptocurrencies. Greater bitcoin price -> greater other-cryptocurrencies-price -> greater motivation for people to mine these other cryptocurrencies -> greater demand for GPUs for mining.

Well, I suppose I'm conflating correlation with causation here. Are the two correlated because a higher bitcoin price produces a higher other-cryptocurrencies price, or the other way around, or another thing which causes both of them, or maybe some mix of some of these 3?

historically the rallies in btc triggered rallies in other cryptos

Thanks

The bitcoin consensus mechanism is literally a lottery in which the winner gets to decide what the "consensus" is. I don't know about "revolutionary"...

is it though?

the “lottery winner” in your case assembles a block with transactions from the transaction pool (ie you don’t just make shit up. you are taking useful transaction that people are making them and capturing them into the chain) So the winner does not decide much, except maybe what transactions to select (spoiler alert: the transactions with the highest fees are normally selected).

The consensus is in the sense that: you wanted to create a transaction and that transaction is captured and everyone in the network sees and agrees that the transact happened. The miner cannot alter your transaction. Other nodes in the network cannot arbitrarily reject it. You cannot simply claim you didn’t do it after the fact.

> everyone in the network sees and agrees that the transact happened

Why would everyone agree that the transaction happened?

everyone == bitcoin nodes that each keep a copy of blockchain locally.

once a block is mined it is propagated through the network and it’s verified by all the nodes that see it. In effect, when you get the block and you append it to your local blockchain after verification you agree that the transaction that happened in that block happened.

Yes, but the question is why would all the nodes agree that the transaction has happened. What's stopping them from disagreeing?

They're welcome to disagree. I can write a node that creates a chain with blocks that only contain some transactions of my choice and then broadcasts it.

For nodes that only have access to my chain, they will also go with my chain. This is why being connected to multiple nodes is important.

For nodes that have access to both my chain and the rest of the world's chain, they will go with the chain that has the most work put into it, because that is the one that is clearly supported by the majority computation power. It's irrational to go with the chain that has less power, because the entities that created the chain with more power can easily overwrite the chain with less power by virtue of having more power.

Unless I happen to have more computation power than the rest of the world, the chain with more work put into it isn't going to be mine, which is why it's important that global computation power isn't consolidated into a single miner.

hmm. it’s not necessary more power. Sometimes it’s luck if you are talking about chains that are the same except the tip where they differ by 1-2 blocks.

> It's irrational to go with the chain that has less power, because the entities that created the chain with more power can easily overwrite the chain with less power by virtue of having more power.

This basically means the entire bitcoin network depends on the entities that have the most computer power behaving correctly, am I wrong?

That is correct. As I wrote in [1], the situation where the majority power becomes irrational is a doomsday scenario for bitcoin.

[1]: https://news.ycombinator.com/item?id=28020592

Right. Though the problem is not so much behaving irrationally as dishonestly. At any rate it's hard to argue that the bitcoin network is more "trustless" than a bank, since we have coercive mechanisms to ensure that a bank will behave honestly, while we don't have the same mechanisms to ensure bitcoin miners will do the same. Bitcoin users have to trust that they will be honest.

No, you still don't understand. It's not dishonesty, it's irrationality.

First you assume that the majority computation power is already colluding. This is not the case.

Let's assume it's the case. As soon as they stop adding all transactions to a block that they would've been expected to, the entire world will notice. In response, the currency will become valueless. That is, it's a public act to abuse your position as a majority power, and the very act of your abuse destroys the thing that you're trying to abuse to your profit.

No, it's you who don't understand. There are many ways someone can profit from bitcoin losing all its value. And there many motivations other than financial profit. Therefore it's more accurate to speak of dishonesty rather that irrationality.

This is key. Profits from Bitcoin or from Bitcoin's losses are not restricted to the Bitcoin ecosystem. In other words, the Bitcoin ecosystem is not closed. For example, Ethereum or Algorand or Avalanche may benefit if bitcoin loses its value, even if those communities may not participate in Bitcoin.

Suppose the majority decides that they won't halve coinbase (the mining reward) after every 210,000 blocks anymore (thus removing the 21m cap). Maybe that's irrational, maybe that's rational. Who is to say?

> The bitcoin consensus mechanism is literally a lottery

It is, but with the probability of winning proportional to the "work" you put in. That is crucial.

Just like any lottery. The more tickets you buy the higher the probability of winning a lottery. In the bitcoin lottery the tickets are cpu power.

not a lottery. in case of a lottery, when you have the winning numbers you go to a central authority that manages the whole thing and you claim the winnings. Also, in case of a lottery the winnings are a share of what has been put into buying the tickets. also, lotteries can go a long time without having a winner for the jackpot. Also for lotteries, usually there is a tiered winning structure and what you win on is fixed (ie the numbers)

for bitcoin there is no central authority. the reward for winning is “fixed” and claiming the said reward is dependent on a network that validates that you indeed have the work that incorporates pending transactions into the blockchain. also, “winning” happens at regular intervals of time (average 10 minutes based on difficulty), and what you’re winning is somewhat fixed (the block reward is fixed + some TX fees var).

so it’s not a lottery.

Right. It's a thing where you have to guess a secret number, and the winner gets a prize, but it's definitely NOT a lottery.

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