Comment by Qasaur | Hacker News Reader

Comment by Qasaur | Hacker News Reader

"The root problem with conventional currency is all the trust that’s required to make it work. The central bank must be trusted not to debase the currency, but the history of fiat currencies is full of breaches of that trust. Banks must be trusted to hold our money and transfer it electronically, but they lend it out in waves of credit bubbles with barely a fraction in reserve." - Satoshi Nakamoto

- 1721 Mississippi bubble (https://en.wikipedia.org/wiki/Mississippi_Company)

- 1813-1836 Second Bank of the United States (https://en.wikipedia.org/wiki/Second_Bank_of_the_United_Stat...)

- 1933 FDR gold confiscation (https://en.wikipedia.org/wiki/Executive_Order_6102)

- 1939 UK gold confiscation under guise of national security (https://en.wikipedia.org/wiki/Operation_Fish)

- 1971 unilateral termination of gold convertibility (https://en.wikipedia.org/wiki/Nixon_shock)

- 2008-present ECB/Fed/BoJ/BoE/global QE (https://en.wikipedia.org/wiki/Quantitative_easing)

I don't know about the author but I have a feeling that the track record of central banks isn't exactly stellar, and I'd much rather trust a decentralised system with zero ability for sustained debasement than trust a small centralised group of people who have time and time again abused that trust.

Satoshi vanished more than a decade ago. He didn't get to comment on what became of his creation.

The current state is:

* Bitcoin (BTC) development is driven by a very small development team.

* Main discussion spaces (eg, /r/bitcoin) are owned by a small team.

* NFTs are almost exclusively sold on centralized marketplaces with the capability of banning a NFT from it if they don't like it.

* Miners aggregated into something like a dozen relevant mining pools.

* The main way of obtaining BTC is at large, centralized exchanges. Who often hold your balance in a database and not in the blockchain, because BTC transactions are expensive.

Yup, he completely fixed it. Rather than trusting an elected government in BTC people put their trust in whoever now gets to commit to the github repo.

And how is the track record of decentralized "currencies"? Buying drugs, money laundering, rampant speculation, rug pulls, fraud, high fees, inefficiency, horrible UX, irreversible SFYL, and destroying the climate.

People do all these things with fiat as well. I don't get your point

>Buying drugs, money laundering, rampant speculation, rug pulls, fraud, high fees, inefficiency, horrible UX, irreversible SFYL, and destroying the climate.

Every one of these charges happens every day and in some of them to a much greater scale in fiat, especially climate destruction due to inflationary monetary policy, which encourages consumption and waste and punishes thrift and savings.

It's much harder to do ransomware payments with non-crypto.

Sure, but ransomware is just extortion and that is a concept that has existed for time immemorial. I think ransomware is a relatively small part of the global volume of generalised extortion which is almost certainly mostly settled in fiat and not crypto.

And knives can kill people

Ransomware would be eliminated if we just banned computers and made the internet illegal.

I find it strange that so many cryto people get so emotional when such comments are made. It makes it rather difficult to have an actual discussion on the issues.

It's difficult to have an actual discussion when the same old platitudes keep reappearing in every crypto discussion.

I can rephrase as a question: Should we stop using groundbreaking and individual-empowering technologies just because some criminals benefit? Every single technology is exploted by criminals. I fail to see how that is an argument for its disavowal. If anything, we need to normalise privacy and encryption among virtuous everyday individuals.

You'd get emotional too, if somebody started calling out the pyramid scheme you out your money in.

This is just another form of the "we should ban encryption because criminals use it" argument.

Criminals and wrongdoers will always exist. Statists and financiers are just another category of them, who have a system that conveniently covers their crimes. I will put all my weight behind anything that weakens their power over me: I.e cryptography and cryptocurrency.

Have you not ever read financial history and what things were like without central banks?

No one that knows what they are talking about can possibly think we were better off without central banks. It is a childish and clueless view.

House Of Morgan, History of Interest Rates from Wiley. Try reading some books instead of looking up things on wiki to back up your already nonsense beliefs. You can not read those books and come away thinking getting rid of central banks is a good idea.

You are just making the old clueless gold bug argument repacked in digital form.

Have you?

Financial crises have been more severe, longer, and more sustained since the introduction of central banking. Let us also not forget that the industrial revolution and the extraordinary growth of Western economies in the late 1800s were mostly conducted under free banking without a central buyer and lender of last resort, and in some jurisdictions where a central bank existed it was regulated to follow a strict gold standard.

> Financial crises have been more severe, longer, and more sustained since the introduction of central banking.

I admit that I'm not willing to even look into your argument too deeply, although I have severe doubts about its validity. The reason is you omit one order-of-magnitudes factor: The economy has increased exponentially beginning with the industrial revolution, and world population similarly. So of course any disaster, including natural ones, without anything else impacts ever more people and is ever more complex to solve.

This is the major factor that you have to address before any other, but you simply ignore it. Like all the pro-crypto arguments, they always leave out extremely easily accessible points that are not hard to find, which I find strange, and which makes these discussions so tiresome.

And by the way, when it was new I looked into blockchains to the point of even taking programming courses for it, so it's not like I'm completely "armchair" about it. I rejected it only after doing active research.

"The root problem with conventional currency is all the trust that’s required to make it work."

Trust is required to make cryptos work too. Yes, a blockchain is "immutable", as long as the network isn't hacked w/ e.g., a 51% attack in Bitcoin's case. However, the price of Bitcoin isn't really anchored to anything, i.e., there's no natural demand for it like there is for fiat currencies (since people must pay their taxes in fiat), so basically, only the collective trust and hope of people is making it valuable.

In addition to that, current cryptos are lacking in either decentralization, efficiency, or both, nevermind the various decentralized applications that operate like any traditional company, which you'll have to trust in order to use the app. So as of now, a truly decentralized and efficient blockchain network is only a dream.

I'm not saying fiat currencies are without problems though -- they very much aren't. The regulation is problematic, but the bigger underlying issue stems from the expectation of infinite growth. Money in the modern economy is basically debt, whose interests are paid off with newly created debt. This cycle works only if the loan money is, on average, invested profitably, i.e., (in very rough terms) the GDP rises along with the money supply. This is difficult to begin with, but since compounding interests grow exponentially, it means that the GDP should rise exponentially too, which, since exponentially growing curves approach infinity relatively fast, means that the planet is fucked due to exponentially growing demand of energy and natural resources.

To make an analogy, long distance travel also has a checkered history over the past 300 years. Today, most people hop on a plane or a bus with little thought about its safety, and manageable concerns about its arrival time. Likewise most of us expect our salary to hold steady in between payday and when we spend it, with manageable expectations about what it will be worth in six months.

Isn't the answer to Nakamoto's quote _more_ regulation instead of no regulation?

Not if regulation is a smoke screen and the real cause

Yes, but the crypto crowd stems from the libertarian scene, which is averse to regulation in any form.

It's a political stance first, the technological "solution" is selected just because it fits the ideology.

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