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Comment by postalrat | Hacker News Reader

What's the cryptocurrency endgame? Everyone has keys in cold storage waiting for the day we have the mathematics that destroys them?

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> What's the cryptocurrency endgame?

To not be the one stuck holding the bag.

The Greater Fool theory of investing

and Tulip Mainia! (did we cover all the tired crypto takes?)

watching marks get fleeced is never tiring.

The endgame is a payments system as originally described in the Bitcoin whitepaper.

99.9% of all "advances" and developments in the space hasn't moved us towards the endgame, if anything it's taking us further away.

I agree. I held Bitcoin Cash since it forked, because it is superior technically. But I am disappointed with its limited adoption.

BCH allows more transactions. BTC would take 18 years for 4B people to perform a single transaction each. And it costs ridiculous amounts of resources for a ridiculous amount of constant security.

BCH is just kicking the can down the road a bit further. If it were to gain massive adoption rapidly, the only way it could scale if they follow their current ideology is by hosting the nodes on bigger and bigger server racks, eventually reaching the point where there is only one or two real nodes hosted in a cloud provider datacenter somewhere. I don't know what the perfect block size is, but quadrupling down on on block size and turning down all alternatives is not a good long term plan.

BCH had slow block times and slow transfer times just like BTC. ETH and many altcoins were more performant.

> I don't know what the perfect block size is, but quadrupling down on on block size and turning down all alternatives is not a good long term plan.

BTC's 1 MB (or a bit more with segwit accounting) is just hopelessly obsolote, we could easily handle multiples without any issue whatsoever, and it would require a massive increase there after to reach the state of "one or two nodes".

Further, BCH isn't "turning down alternatives". It's a permissionless system after all, and it does have malleability fixes if you want to have layer two for it.

It's BTC who is blocking any on-chain scaling and bet everything on the experimental Lightning Network (that's still experimental mind you).

BCH's block size is also hopelessly obsolete. You simply cannot fix the system by making the blocksize bigger, so BCH is a pointless exercise.

It's not pointless, it's necessary although not sufficient on its own.

eventually reaching the point where there is only one or two real nodes hosted in a cloud provider datacenter somewhere

Ironically this is what is described in the original bitcoin satoshi whitepaper (not 'one or two' obviously), but the math doesn't work out.

Right now bitcoin has a throughput of about 1 KB/s, which is slower than a 14.4 dialup modem. The entire 13 year chain fits on a $40 thumb drive with room to spare. Even 32MB blocks (53 KB/s) maxed out for another 7 years would fit on single $220 12TB hard drive.

Running a node is only really necessary for miners, exchanges or any other major service but it will be trivial for anyone who can watch a youtube video or stream netflix for at least another decade.

Hopefully we won't end up on the slippery slope of centralization.

But even if there were a reduction in the amount of nodes, and in security vs. 51% attacks (looking at miners' profitability), BCH has shown its willingness to consider tradeoffs and changes.

There will be opportunity to backpedal if the community considers centralization is a bigger risk than adoption difficulty.

I fear BTC's downfall will be caused by its brittleness resulting from the fixed rules.

> The endgame is a payments system as originally described in the Bitcoin whitepaper.

This seems to be contradicted by the deflationary design of Bitcoin. The fact that Bitcoin is deflationary probably also exacerbates the speculative interest from investors that makes Bitcoin more volatile and less useful as a currency. It's possible that Bitcoin was technological sound, but economically destined to fail at its stated goals.

The endgame is regulation. The US Treasury launches a digital dollar and declares other USD-demoninated stablecoins as illegal, crushing the on and off ramps for most exchanges. Adoption by banks and brokerages removes the need for separate crypto exchanges. KYC/AML requirements crush whatever remains.

> crushing the on and off ramps for most exchanges

That exchanges don't need help with that

... and assuming that is successful: something else emerges.

The emergence of crypto coincided with the final snuffing of bearer bonds and certificates and most anonymous bank accounts. The death of crypto will coincide with something else. The regulators of the world continue to pick and choose where to place their fingers in the cracks of the dam. Money that cannot efficiently or legally pass through KYC/AML will find a way.

There is no end game. You use it in your daily life to obtain or achieve things then you die.

Don't you keep it in cold storage so three generations from now you offspring can bring it back out for significant wealth gains or alternatively a reminder of funny things humans do?

Then the end game would be to be something useful that people use in their daily lives.

I think that's what was meant when calling it digital currency.

But now it's heading down a different path.

Having a savings account is not useful in daily life?

Cryptocurrencies look to be a particularly bad substitute for a savings account to me. Or even just keeping cash in a shoebox under your bed.

A savings account is generally a no-risk or low-risk investment vehicle. This usually means that you could withdraw the balance on any given day and not suffer a realized loss. Even if you assume that Bitcoin's value will always recover long-term, having short term volatility in the 50% range might mean that the money in a Bitcoin "savings account" will not be available when you actually need it.

Why crypto v dollars or another existing currency?

There is no real benefit besides instant* cross border settlement.

On the one hand, I can understand this. On the other: as a US citizen, I use it in my daily life, then I file an 8949 every year listing every single purchase I made that year, along with tracking of cost bases? I realize that this is a legal, rather than fundamental, aspect of cryptocurrency, but it does make the idea of using cryptocurrency as a quotidian currency rather frustrating compared to essentially any other method, like cash or a credit card.

Hold my beer I'll build a tool to track that

No need to. Luckily every transaction has been recorded for you on a public blockchain that is easily traceable to your RL identity! Makes life a lot easier for the IRS and also means your employer can check whethee you've developed a penchant for donkey porn!

That fact that they can find it out doesn't mean you don't have to report it accurately. Most countries around the world know how much salaried employees make and still require them to declare it in a yearly tax submission and if they do it wrong, they'll get fined. The government knowing has nothing to do with you still needing to accurately report it.

I don’t know if “most countries” is correct. The USA certainly does this, but most European countries will prepare an automatic tax return for everyone based on the data they receive from employers, banks and brokerages.

Your doomsday scenario affects all online security equally. The only outcome you are partially vindicated in is one with a quantum miracle in the short term, which even then is not catastrophic for protocols which make the necessary hard forks.

Currently in development is decentralized social recovery systems. A lite version of this already exists with gnosis safes where one wallet has multiple key holders and n/m voting.

There are already multisig wallets, both Bitcoin and Ethereum. You do not need Gnosis for that.

What's the endgame of a savings account? Are folks just going to sit on their money until it eventually collapses?

The endgame is the same as Beenie Babies (or tulip bulbs). Everyone realises it was just a mania and goes home. No more money goes into the system, so no more money goes out. People forget about it.

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