Just ask the poor slobs in Russia or Venezuela who can’t sell their software and feed their families, or in Canada who threw $50 to support their trucker buddy and got their bank account frozen.
Also - there is easily $7B of “stranded” energy in flare gas and hydro “rotating reserve” available to secure Bitcoin and similar systems. Besides, the limiting factor for a successful 51% attack isn’t the energy — it’s the capacity to actually create the hash capacity to execute the attack. Not even the NSA could do that, let alone some non-state attacker.
The cost of securing bitcoin is not just in electricity, it is also in the depreciation cost of ASIC hardware.
I guess it would be easy for the NSA to pull off the 51% attack if they are able to backdoor the handful of ASIC manufacturers.
At least, speaking as a European, this is where the large majority of my tax euros go. If your government spends your tax on less useful things then maybe the solution is to work towards a better government, rather than trying to hide your savings in untaxable havens.
(Actually I have no idea how easy it is to hide money from the tax collectors using crypto, but I assume that's one of the appeals).
EDIT: user above me edited their comment to reference Russia and Venezuela. My comment about working towards a better government still stands although I recognize it's not an easy task.
Depends on which one but let's take pure bitcoin because that's what the post is about.
Governments have 3 main tools, tracing, freezing and recovering. The breakdown is different in crypto vs fiat.
In BTC, the blockchain contains all previous transactions, everything is public. If you send your BTC through middlemen it'll be mixed in with their assets but you can still follow the trail perfectly. So tracing is easier with BTC than fiat, because you won't have to convince some Cayman island bank to hand over the cash.
Next, there's freezing, which is harder. You can't block transactions to Iran on the chain, but you can block entry and exit points when trading with fiat, on most exchanges. Since freezing is technically equal to censoring, it's a feature.
Recovery is almost impossible, to the point of you can even lose your own private key, let alone someone who stole from you. The government can't produce a valid private key any more than your quad-core IOT fridge.
TL;DR avoiding tax is hard to do for retail people, simply because the regulators are watching the entry and exit points. So even if you tornado cashed and zcash yadda yadda and your funds are untraceable you eventually need to buy fiat for them, because you'll need the fiat for the Lamborghini.
> rather than trying to hide your savings in untaxable havens.
Kinda OT, but why suddenly is tax evasion a problem with retail crypto of all things? We have institutionalized tax avoidance for the biggest players (megacorps & ultra rich) to the point where nobody raises an eyebrow anymore. Seems inconsistent to me.
Actually this isn't true. your tax euros go to paying down the debt on loans taken out to pay for these things. Under this system ultimately one of two things happens -- it's either unsustainable and you lose those niceties, or, the euro gets devalued and the only way you get those niceties is by absolutely routing the lower class (even under European gas and water socialism the divide between rich and poor is increasing. Get ready for a big hike in this divide over the next five years as the euro loses its PPP and needs to start defense spending to safeguard trading relationships). Especially hurt will be underprivileged Europeans, like stateless Turks in Germany or immigrants living in banlieues in France.
I don't see why. The current value of BTC mined in a year is around $6.5 billion. Hardware lasts, let's be generous, 2 years. No one will mine BTC at a loss, so the total cost of mining BTC for 2 years must be less than $13 billion. So for less than $13 billion, the NSA can create a new BTC mining network at 50%. That seems well within their budget. And if they sell their BTC, they can probably be cashflow positive before destroying the network.
The NSA doesn't go to the NVIDIA store to buy $13 billion of GPUs. Measuring only the monetary value conveniently ignores the bottleneck of underlying resources to build the hardware to do the mining. Where does the NSA find $13 billion worth of top-shelf GPUs or ASICs? Having money is not enough if there is no one to sell you.
That hardware takes natural resources, knowledge know-how found only in a few companies and a non-negligible amount of rare earth minerals to build. That's a serious bottleneck and not something you can stealthily enter in in that capacity, NSA or not.
Leaving aside the fact that they could have private secret production capability and I would believe it, the market is probably being flooded now as BTC is tanking. GPUs are apparently getting cheap again.
The name, of course, tells you, but people seem to think that "currency conversion" is some transformative process where rubles just become bitcoin.
Which is of course: false. To turn rubles into bitcoin, someone who wants to buy rubles has to be willing to buy them for bitcoin. This means someone local, who can transact in rubles, needs to have a supply of bitcoin.
Where are they getting it from? They can't buy it overseas because if you could exchange rubles with foreigners then you could also just buy USD. They could mine it, but that still means they need to be willing to accept rubles for their bitcoin, and yet the scenario presented suggests there's a path to exchange rubles for USD which is more favorable.
In fact at every step of the process, you have the problem that the only way to get Bitcoin from your stranded currency, is to buy it from another party locally.
It's just Forex concerns, and you're going to be paying out the nose constantly on a "what if". Of course, while there's no sanctions, you could also just buy USD directly.
After you want to leave, the situation flips on you - as the only sort of person who would have local Bitcoin, you (the royal you) are the only potential source of it to people who want to leave, but now you want to retain it.
And there's the other side of the equation as well: once you leave, your situation flips again: you, and if there were actually a lot of people doing this you'd be in trouble - now have a desperate need to exchange Bitcoin into whichever local currency you actually land in, and you have to do so urgently in order to purchase food/shelter etc.
This is the fundamental problem with an unpegged exchange currency: the optimum rate of exchange is either 0, or infinite. Market factors, imperfect information etc. are why this isn't the case, but it is why Bitcoin swings wildly compared to any properly managed currency.
P.S. This is excluding other practical issues, like Bitcoin needing computers and internet access to work but in a time of instability access to banking is going to be extremely limited. Even if satellite internet is a thing, you're no longer going to have escrow services to conduct currency exchange - transacting in Bitcoin in a warzone involves taking a bunch of your actual resources in hand and somehow ensuring you don't get screwed in the exchange - and vice versa.
This is what I saw as incomplete:
> This means someone local, who can transact in rubles, needs to have a supply of bitcoin. [...] In fact at every step of the process, you have the problem that the only way to get Bitcoin from your stranded currency, is to buy it from another party locally.
There are global markets (original example being software services) where you can get paid in Bitcoin. This possibility was omitted. Address that.
I would assume it to be possible to find contract work that's paid in Bitcoin. But in the end I don't know these markets well.
Wait why are they slobs?
https://news.ycombinator.com/item?id=32854528
Considering that a USD payment company can literally destroy a business without a reason, how confident are you about that "little or no guaranteed demand" part?
A $25 trillion economy, a massive payments ecosystem, a large payments company in Stripe, and you're talking about isolated examples. Even if there are ten examples, it's ten in tens of thousands of counter examples where businesses aren't having that problem.
The obvious point being: all those other businesses aren't worried because your premise is so rare. And for the small number of businesses that end up in the negative scenario, they're not prominent enough to matter as a warning sign to everybody else.
You'd need a very big, very common problem to spur the kind of adoption premise you're suggesting. It doesn't exist at present. A big share of Stripe's customers (along with other processors) would need to be suffering like that example.
Blockchain, for all it's promises of decentralization, has rapidly centralized on a few players who's interpretation of the chain are practically law, and thus, is subject to the same problems as any other centrally governed system. The many differences include that stripe (and it's competitors) can handle millions of transactions whereas bitcoin struggles on a few thousand.
More specifically, policies like "know your customer" are great in theory but very hard to implement in practice, which is why companies like Stripe tend to be ruthless with their merchants.
Crypto tries to sidestep this entirely by arguing that it's trustless from the ground up. The problem with this is that it facilitates the creation of an unstable marketplace full of interconnected players and nobody knows who is legit and who is a complete crook. Projects like Terra show that when the crypto market recedes, entire segments of the blockchain ecosystem are at risk of being wiped out because there is no transparency to their underlying operation. It's all gravy in a boom cycle, but the bust always happens.
Crypto and its derivative products can only truly thrive in an environment that is free of market downturns because there's absolutely nobody at the wheel making sure that these companies are actually doing what they claim to be doing.
Using the argument of what happened to one coin as a proof that blockchain is necessarily bad is like saying the Internet is useless because there are scams that happen online.
OpenSea and NFTs have nothing to do with Bitcoin nor blockchain, the technology.
Those who use centralized custody services are not using Bitcoin. They are aping. They are posing. They have no clue what they are doing.
This is literally extrapolating from outliers (notable news stories about fraud or mishaps) to make predictions about whole data sets (reliability of transactions using the US Dollar).
No one can prove to you that dollars are safe if you don't believe it. But no one has come up with a more reliable alternative yet, and BTC is laughably far down the list of challengers.