It has grown as a speculation vehicle, but how much has it grown as an actually used means of exchanging value? (How much outside of toy usages? How much outside of immoral usage?)
HN used to be (and for the most part is) a place for people excited about new ideas that could transform the world not blind derision and mockery. But every time this topic comes up you see the same predictable responses with nothing interesting or unique to add.
Ps. He wasn't saying anything about the environment and it's also what I'm thinking :)
Eg. You call it Ponzi, i call it money printing with tether..
And courts actually seem to agree on a lot of those things. We'll see how coinbase fares, but it's already obvious they can't do some things that others do. Because they care more about regulations.
Eg. Even the first Bitcoin discussion on the original board mentioned it would be a bad currency. Let's not pretend it's a good one and throw 100 of years of economic lessons out of the window.
I mostly see proponents don't do their research and see them influenced by plain greed.
Eg. Here, you didn't even reply on topic on the original comment and added a lot of other things out of thin air here. Lol
No one was even talking about Ponzi or environmental issues. They wanted to see actual applications for it, selling avatars isn't one fyi.
The general population of HN posters think that cryptocurrency hype is not justified by the tech. That does not mean that the forum is against discussing new ideas. It just means that they disagree with you about this idea.
Consider the discussion of OOP every time it comes up. It is the same conversation over and over. But I think it'd be silly for somebody who prefers inheritance as a design choice to declare that HN is just filled with incurious people because they don't like inheritance.
What's the most recent leverage policy of most exchanges? Who offers the most leverage? Are those exchanges the ones that get hit first as positions liquidate? Did all exchanges drop approximately the same? Is there a whale that unloaded?
There are a million things interesting things that could be discussed and I wish someone with more in-depth knowledge could comment. But instead I see these low effort 'cryptocurrency bad' posts.
If a new technology comes out, and tons of people on HN all evaluated it and found tons of fundamental flaws, readers generally engage and are appreciative of it. They're glad for the analysis, their glad they didn't end up using it on their job and all the problems it will cause. They see those same problems and realize a different approach is needed because that tech is flawed. Sharing of concerns is seen as a positive, and appreciated by the community.
However when that same process happens with one specific tech, the exact opposite response occurs. People appear to become upset when others helpfully point out the fundamental flaws. And while I can't guarantee intent behind that response, the fundamental difference to me appears to be that those who don't like to hear the criticisms are those who would personally profit if the tech worked out. Not exactly unbiased observers.
If HN criticized some Big Tech company's new tech, and the people defending it and ignoring the arguments and responding in HN saying "that flaw isn't true", or "stop being so negative" were the PR people the work for Big Tech, the HN response would be similar.
Reasonable criticism on HN usually leads to appreciation and understanding. Reasonable criticism of crypto, leads to people who would profit getting upset and complaining about "the negativity" and "why don't the just believe."
And all of that is without even getting into the issue of all the negative externalities of crypto that most tech doesn't have. It's not only that its impacting those in it, but via fraud, electricity, gpus, poor capital allocation,... it will have significant negative real world impact.
Lots of users casually and incorrectly use Ponzi scheme to describe crypto as shorthand for speculative "asset".
And while I'm pulling a number out of thin air, I argue after excluding people doing wash sales and using it to simply move to other crypto, 90%+ of the owners of the most popular crypto currency Bitcoin are 'buy and hold'. Ie speculating on price appreciation and nothing more. I'd love to see a number to prove that wrong.
And also out of thin air, 90% of crypto created, while I can't describe intent have followed the exact pattern of a pump and dump. Including the majority of their volume being wash sales by early insiders to inflate their value. Again please show me if this is completely wrong.
The majority of price movement in smaller alt-coins is driven by memes, hype and social media pushes and not due to sudden changes in fundamentals or revisions they made in their technology post launch.
Proof of work is here to stay. No matter how much 'greener' supposed alternatives like 'proof of stake' are. Who has any own to eliminate proof of work? Not add an alternative - but to get the people deeply financially invested in POW to move off of POW to their financial detriment to an alternative like POS? Motivated by the egalitarian nature against their financial interests? The mamy people who have argued againstvand downplayed in environmental impact of crypto for so long are suddenly going to want to lose money to be greener?
The belief the exponential growth in electricity consumption isn't a loaded gun. Every person who responds 'oh but is only 1% of world energy usage' that appears to show no idea of how exponential growth works.
Finally, those who believe in democracy and are very concerned by the outsized influence the money has in for example American democracy, and how much the current declininh state of the US has been due to the growing impact of money in the country. How money via influence, lobbying and similar gets way more votes in politics than those without. How they use that influence for regulatory capture by setting the rules in their favor to accumulate more wealth in a feedback loop. To reach the point where instead of one person one vote it's effectively one dollar one vote.
And that somebody in crypto came along and said hey, that's surely a good idea, let's name it proof of stake. And somehow thought that was an egalitarian action! No matter how wealthy someone was they never controlled the money supply. You think you had issues with the 1% of the 1% before, wait till they buy into POS and their votes literally define the rules of the money you're using.
All of the above I'd love to hear responses to and not vague 'the problem will just go away', or minimizing their importance which is usually what crypto supporters do when their isn't and answer. And definitely please not redherring arguments about the word 'Ponzi'.
The flaws in most of the arguments in favor of cryptos are quite apparent. When you don't have a personal financial interest in it! Some of these arguments only continue bc people have ALOT of money tied up in its success.
More money, more legitimacy. Cause that's how finance works. The dollar is only the dollar cause people BELIEVE it's a dollar. Tech don't work like that. People have arguments based on (usually) honest intellectual and observable evidence.
Bitcoin chose a set of parameters designed to ensure sufficient security budget to protect the network, while optimizing for decentralization thereby limiting transaction throughput on layer 1 as the tradeoff. Lightning and other layer-2 provide the scalability by leveraging the security of layer-1.
Bitcoin layer-1 is ideal for sending large payments (say >$1000USD today): It currently costs ~$1USD to post a transaction on the Bitcoin layer-1 blockchain. For that I can send an arbitrary amount with no upper limit of value, enjoy payment finality in about 6 blocks (~1hr) and I never have to pay any more to store the value associated with my Bitcoin address. Security for the life of the network is included in my $1 transaction fee.
Bitcoin layer-2 (Lightning) is ideal for small payments (<$1000USD today): It currently costs a small fraction of a penny to send funds across the Lightning network with near instant finality (seconds) and very good anonymity.
The two technologies complement one another to provide an example to the world of what a sound-money system could mean if it was truly decentralized and immune from manipulation by centralized actors (central banks, governments, etc).
Prove me wrong. Is there another form of money that:
- is virtually guaranteed to be immune to manipulation by central actors?
- allows you to transmit any amount of value to anyone (censorship resistance) anywhere in the world within about an hour for about $1USD and know with confidence that the payment will go through with finality?
- allows you to send smaller amounts for fractions of a penny in seconds to anyone anywhere?
Point 1) there are more bad actors wash trading, manipulating markets and pump & dump scams involved in crypto than any other markets. (Even ignoring Tether, the common DAO exploits involving $xx,xxx,xxx+ of losses)
Point 2/3 are the same. There isn't an easy, well known way to do this for no fee to any country. WU is expensive and PayPal will block your account. Egold tried to solve this in the past, until fraud caused it to shutter. There are niche Fintech startups that likely address this for sub 0.5% fees, without the learning curve and exposure to currency exchange volatility. Gas and BTC fees show that they weren't really built with this consideration in mind, they just added hacky pseudo-solutions at a later date. I'm lost as to the "anonymous" part, since I had to do all types of AML/KYC stuff when I've opened accounts with popular exchanges, so there is likely an element of discoverability.
- wash trading: tell me who, how, and why is doing wash trading on Bitcoin? I would argue the only entities capable of moving markets with wash trading are major centralized exchanges, not whales. The Bitcoin market is too large to be meaningfully manipulated by whales via wash trading. If exchanges are wash trading, please cite evidence. I'm not saying it doesn't happen in other cryptocurrencies, just that it doesn't happen with Bitcoin.
- manipulating market: again not sure what your claim is here related to Bitcoin? Who manipulates the Bitcoin market? How do they manipulate it? For what purpose?
- pump & dump scams: again, what does this have to do with Bitcoin? Agree there is a lot of pump-n-dump activity in low-cap altcoins, just like there are pump-n-dumps in low-cap OTC stocks. For pump-n-dumps to work the market cap needs to be small enough for manipulators to manipulate. Who is capable of manipulating the $1 Trillion dollar Bitcoin market?
Point 2/3) I may be misunderstanding what you mean (please correct me). If you are saying that digital payments and remittances are not a solved problem even with Bitcoin, well today I can send Bitcoin or Bitcoin over Lightning to anyone anywhere for less than an ATM fee. I could also send stablecoins instead or convert Bitcoin to Stablecoins and back without KYC using a self-custody wallet.
Please help me understand what you mean by Point 2/3. Did I understand you comment correctly?
Disclosure: I work for a startup (www.liquality.io) that has built tech into a self-custody wallet that allows you to swap any crypto to any other without KYC or added fees. We have several competitors so this space is rea
Most of the security is paid for by the block subsidy. That will change within a few decades though, as the block subsidy keeps halving every 4 years.
At that point, you'll be paying closer to $100 to transact on-chain with the same security that you enjoy today.
Whatever the fee - whether $1/tx as it is today or $100/tx, once the fee is paid, the Bitcoin funds on that address are secured for no additional charge until such time as the funds are moved to another address via an on-chain transaction. So you could be paying $100 to store $1000 or $1 million in Bitcoin for 1 day or 20 years for the same fixed price.
Seems like a good deal to me.
You're going to have to be more specific. Real money is a big place. LMAX does more transactions per second than all of BTC does in a week.
In many cases, instant final settlement is a liability, not a feature. Being able to reverse and compensate bad transactions is part of what provides confidence in the system we have today.
If all credit card transactions were immediate, final and non-negotiable, I suspect it would have a chilling effect on consumer behavior.
The current system requires us to trust that politicians and central bankers won't give in to the temptation to debase the currency by money printing out of thin air. As a result this exposes them to spend more public funds without the traditional constraint of having to raise taxes on the populace.
In short, Bitcoin was designed to offer an alternative monetary system to those who understand that the current fiat-based system is a scam and has been since the governments all moved off the gold standard. You may argue that this assumption is incorrect, but it is clear to me that Satoshi was solving the problem of trust in the creation of money.
Satoshi found a way to create digital value by minting a form of scarce digital money that does not rely on any government to give it value and makes it virtually impossible for any centralized actor to cheat the system and print more Bitcoin out of thin air.
Satoshi's vision was about honest money not high transaction throughput.
As for payment finality, I believe there is room in the market for multiple options and offering more options to the market is almost always good.
I agree that credit card transactions have their place in society and offer real and compelling benefits for consumers, but they are a nightmare in many ways for merchants. As a merchant, you cannot really rely on credit card payment receipts to be final for ~6 months if you must be certain there will be zero chargebacks. Try managing cashflow of a business if you have to be sure you will keep all the money you received via credit cards in the past 6 months.
For merchants who wish to have an option to receive payments with clear unambiguous and immutable fast final settlement of funds with no risk of chargebacks, there really is no alternative to Bitcoin in my opinion.
tl;dr Bitcoin offers the world an option to use honest money that cannot be manipulated. Can LMAX do that?
I don't buy this for a second. You are telling me there is no way for some entity to effectively manipulate the actual value of Bitcoin?
Please provide evidence that the ~13% drop in value recently was caused by market manipulation, or retract your statement.
All three of Bitcoin / Lightning / Stablecoins offer “Decentralized trustable currencies” as well as a unique type of immutable, censorship-resistant, unreversible, fast-finality payments over the internet. These are net new novel currently and payment innovations that have never existed before.
Bitcoin and Stablecoins combined as a currency are a truly great asset class. Other altcoins (including Ethereum) are not trying to be a real reserve currency for the internet. They are speculative investments in new technologies.
Bitcoin is special. Bitcoin fixes problems we didn’t realize we had.
Care to share why you are negative on Bitcoin?
I believe most people confuse Bitcoin as an alternate means of payment instead of what it really is which is an honest sound digital money system, with a transparent monetary policy from now to infinity AND a censorship-resistant payment network built on the most secure distributed computer network ever created by humans.
Bitcoin is not competing with Visa or Mastercard. It is competing with all fiat currencies, as well as any other security or property that is used as a store of value (stocks, bonds, real estate, etc).
Tl;dr: are you strongly opposed to technology advocacy in general or are you simply anti-bitcoin?
I think it is arbitrary and capricious to declare that the store of value use case and/or increasing the value of your investment use case are not valid?
Do you believe that when one exchanges cash for shares in Tesla or Google they are not exchanging value?
Let's be honest, most of us work for a living to earn money to provide for a lifestyle for ourselves and our families.
Bitcoin solves the unique problem that all other fiat-based monetary systems allow those at the top to manipulate the money supply and print money out of thin air thereby diluting (inflating away) the value of all existing holders of the currency. This is Bitcoin's value proposition - sound money, honest money with a transparent monetary policy from now to infinity.
The temptation to print money instead of raising taxes is too great as we are seeing in the US with a multi-trillion dollar Build Back Better plan that politicians claim will not cost taxpayers anything.
Can you explain that math without disclosing that the money is costing taxpayers by way of monetary inflation?
Also I just checked the median transaction amount on Bitcoin and it's something about $200. So it's reasonable to assume that at least half of all transactions are actual purchases of things and services.
(I agree though, that was impressive mental gymnastics.)
No it isn’t.
https://finance.yahoo.com/u/yahoo-finance/watchlists/crypto-...