Bitcoin Killed the King and Now Network Effects Will Determine Its Future | Hacker News Reader

Bitcoin Killed the King and Now Network Effects Will Determine Its Future

nfx.com

38 pointsdomrdy24 comments

Geez... yeah sure, "The King" who still controls all the world's bombs is dead, and Bitcoin rules all. Incidentally, I'm watching the backstabbing mini-world of Squid Game. Without those "kings", what's stopping your neighbor from robbing you?

And the old comparing of market worth to "Hey look we're almost worth as much as Amazon", geez, does that MLM trick still work?

A cryptocurrency skeptic wrote in a good essay once (and I paraphrase imprecisely), of course people who've bought crypto are bullish about it, they've put money in it. And of course they think it's going to go up, because otherwise why would they've put their hard earned money in it. And one way for it to go up is for them to start preaching about it so others would want to buy into it...

You are right, crypto is Ponzi, HYIP, MLM or whatever people want to call it. The technology behind crypto coins is valuable not the crypto coins itself.

And the coin is the reward for those keeping the chain going and validating, so they are not necessarily disconnected when the underlying blockchain provides a purpose, like Ethereum.

Also, those people that bought houses in cash due to the value they derived are examples of real value being realized.

Most are ponzis, but some have fundamental value - those that allow holders to receive fees (or other monetization of users) in some form.

> I'm watching the backstabbing mini-world of Squid Game. Without those "kings", what's stopping your neighbor from robbing you?

I have not seen Squid Game. Has the show influenced your preferences or outlooks in terms of governance or social dynamics?

IMHO, Mainly it made people realize how bad the status quo is all over the world. It's a global hit for a reason.

I think the show is a metaphor of how cruel we can be in society, in the show they'd do handshake deals with each other but they're still not sure they can trust each other, in this capitalistic/neo-liberalist world we also want things on paper with signatures to make sure whatever deal we're doing the other party doesn't screw us over, but still a lot of people do try to take maximum advantage, even if it means ruin (in the show: death) for the other side.

haha funny also when the crypto goes belly up or a deal goes sideways they run straight to "the king" for help

Bitcoin's hierarchical king is network consensus and you forgot to mention the most important belief behind centralized fiat currency that is law. Constitution and laws protect money and finance of citizens, companies and public institutions.

The thing with Crypto/DeFi is that creators of this software solutions think code is law but crypto is yet to be regulated. Therefore there are billion dollar scams left and right in the crypto industry.

The article is sort of good but it is leaning more towards hyping up and promoting something the author likes atm not what he shares values with.

Cryptocurrency can obviously work, but bitcoin is not realistically going to be widely useful.

For the last three months it has had a throughput of 195 bytes per second.

https://bitinfocharts.com/comparison/size-btc.html#3m

There is no universe where the fact that everyone in the world will get about three transactions on the main chain for their entire life will give people the dream of sending money to each other directly electronically. If you start using apps and side chains for everything you are back to centralization and aren't much better off than venmo.

This is why during heavy use single transactions cost more than the hard drive space needed to store the entire chain. It just doesn't make sense to think the entire world can run on 700KB every 10 minutes. Every other decentralized cryptocurrency is more viable.

hey did you know about lightning network? for few month now growing and it is specifically for this, using btc for small transactions.

I've been following it for seven years now. Why would someone do that when every other cryptocurrency can just have way more throughput? Outside of the propaganda bubble of /r/bitcoin anyone who takes a practical look at it thinks it is ridiculous.

None of the math about having 700KB once every 3600 seconds works out. Any cryptocurrency that is actually going to be used needs way more throughput. No one would think this is a problem if the people that are trying to sell you a second layer weren't constantly curating /r/bitcoin to ban anyone who questions why throughput wouldn't be increased first.

The only way any "second layer" nonsense works is if you can stop people from questioning why it is needed in the first place.

>For the hierarchical pack animal we are, hierarchy with an alpha King on top is a stable and understandable structure.

Yikes.

Really isn't true either. Both an anthropologist and an architect would cringe at that claim.

See that's what people just don't get, pyramids are very understandable structures.

>Money is simply a belief held by a lot of people. A collective trance. Money is simply the distillation of a shared confidence in the future.

This is the fundamental lie used to market bitcoin. Money has nothing to do with beliefs. People are forced to buy dollars to pay taxes. That's the actual origin of money and what's it backed by. Because they need it for taxes, they start selling stuff for it and are willing (or even forced) to borrow it. Fiat currencies fail when backing enforced by the state fails: states try to demand more real wealth that they can actually get, whether because they are too weak to enforce it, or there's simply not enough wealth to go around.

Gold (and other metals) was an early technology for state-backed money. For the first time since thousands of years gold isn't backed by any state - and the ancient meme 'gold is money' is already almost dead in less than 100 years.

Bitcoin isn't backed by anything so it can't be money, ever. It's irrelevant how popular it is and how many people think it can work as money - billions of people can think magic works and yet it still doesn't work. As a group, bitcoin holders collectively lose money relative to everyone else - and within that group, early entrants gain at the expense of later entrants, ensuring it's eventually self-extinguishing.

Without centralized force, only commodity money can exist: things that are useful in itself. The most obvious fundamental unit of value in the universe is energy which can be transformed into everything: maybe in the future intelligent entities trade antimatter packets, assuming practical storage, or some even better energy form. On lower tech levels it becomes heterogenous: shares/bonds, salt, seeds, oil etc, traded both directly and as IOUs. Just as hundreds of currencies currently exist, a true free market economy would have thousands of inherently valuable units being used as a unit of exchange, account and as a store of value, with popularity and liquidity varying both in time and location.

Anecdotally, younger people are much more likely to get into newer coins/tokens instead of bitcoin - wealth transfer attempt by older holders is too obvious when it's something where 'they' generated majority of supply for themselves when you were only a young teen (or even a kid) and now tell you to buy from them because of reasons.

The historical aspect of the article is mostly accurate. The issue seems to be with using Bitcoin as a currency for every day transactions. The transaction rate still hasn’t been solved. Bitcoin still has a role to play in international finance, it can replace the need for a reserve currency at all due to the distributed ledger. In this way, look for it to replace the functions of the Bond market first. It is ideal for keeping track of large transactions over time between nations and companies. Also, the key to a reserve currency since Bretton Woods has partially been that energy has been priced in U.S. dollars. Another advantage for crypto, for those same energy interests that seem to own everything already, is that more energy is consumed as financial activity happens creating a sort of symbiotic relationship that the U.S. dollar had for some time. This inherent fact might be why it continues to survive various crashes.

Bitcoin Killed Elvis huh? Weird...

Tulips killed the King and Now Merchant Networks will determine its future

Maybe. Belief in the value of the dollar is also a network effect due to global supply chains. The U.S. couldn’t prevent countries from using dollars how they do by fiat.

Sure, but for bitcoin it's also a trust that the money supply mechanism is very hard to change.

It is possible to do so (by votes of user nodes), but it's not in the interest of the users.

Exactly. Here comes the massive deflation, right according to white paper. It would've been the greatest pyramid scheme in history if Satoshi weren't earnest in his goals. And if he didn't lose his keys.

I'd contend that economically motivated / forced conversions aren't beliefs. The hegemony of U.S. Petrodollars isn't equivalent to "belief" in their value, but rather acquiescence of it.

https://www.lynalden.com/fraying-petrodollar-system/

Or, Currier and the VCs are able to hodl BTC now.

And they're very excited about it, and have had the time to spell out their narrative.

Disclosure: NFX alum.

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