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Comment by thesausageking | Hacker News Reader

> it means that bitcoin is ultimately not, as is often claimed, protected by mathematics or physics or even economics, but rather by the social cohesion, cooperation, and (dare I say it?) trustworthiness of the mining community

This isn't a dig. Bitcoin's value does come from the community and authority of the chain.

If it were just math, you could fork Bitcoin and have a competing currency that had the exact same code as Bitcoin. It wouldn't have any value because miners, exchanges, and users wouldn't believe it did. They believe in Bitcoin because it's been around a long time (it's Lindy) and the community around it has proven very resilient to all sorts of different kinds of attacks over the years.

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> Bitcoin's value does come from the community and authority of the chain

Agree it isn’t a dig. But it’s a refutation of a common argument in favour of crypto, namely, that it’s protected by math, not custom.

What's protected by math is the custody of the coins. The system is a delicate balancing act of incentives, math and social consensus. It's common among detractors to want to flippantly dismiss it as "only having value because of shared belief." That's not entirely accurate. All of the components are necessary to give Bitcoin its interesting properties which allow it to function as the first currency not managed by centralized control and these properties are inherently valuable.

But there has been changes to the way bitcoin works, and even forks because of it, eg bitcoin cash.

Now, irrelevant of what you think of those, the community can, and has changed the way Bitcoin works.

And, as such, it can also change what math it uses, if it so wishes. So the math ultimately depends on the community.

You get to decide what fork you run.

Yes, but if nobody else values the output of your particular fork, it hardly matters.

The community ultimately chooses which fork you run if you want to actually participate in a monetary system. Really, that's all this argument is -- any currency exists within a monetary system that is willed into existence by its participants, and no amount of maths will ever change that. It's not like gold had much use for the majority of its history, and yet it became the dominant currency.

I mean, it solves the byzantine general's problem, which requires two thirds honest participants. I'm not aware of anyone who's ever claimed that bitcoin "mathematically protects" you even when everyone else is lying.

It is still protected by math. The value is found between trustless entities. Math prevents fraud. The group can change the math.

There isn't one true coin protected by math. An unlimited number of coins can be created between different groups of people. Math protects each coin.

It's protected by both. So ommitting one factor isn't wrong.

If you say flu is caused by a virus, it's not wrong. But flu is also caused by weak immune system, human interaction, lack of UV lights everywhere, evolution, among other reasons.

Bitcoin is very much protected by math. Transactions require cryptographic signatures. That's math!

Obviously not talking about the Nash equilibrium but still relevant.

The important distinction is who (or what) is being trusted. It's always possible that a compromised bank employee commits fraud against me, or a capricious treasury secretary causes runaway inflation with stupid monetary policy (this was actually one of the main motivations behind bitcoin, as immortalized in the Genesis block "The Times 03/Jan/2009 Chancellor on brink of second bailout for banks"). These vulnerabilities aren't really possible with Bitcoin, because you place your trust in a massive community rather than a few key individuals.

There's several aspects to trust in Bitcoin.

1. The miners won't just up and leave, or are regulated out of existence.

2. The developers (and/or miners) have your best interest (and not theirs) at heart.

3. Hodlers won't suddenly do a run on BTC bringing down the value dramatically. Diamond Hands often turn into Bag Holders (with out diamonds in the bag, btw).

4. The government won't prosecute you for holding BTC or exchanging it for goods and services, or say, dollars.

5. There's nothing propping up the value of BTC other than the good will of hodlers. There's no FDIC, Federal Reserve, or other large entity that can inject capital to stabilize the price.

6. Your public wallet tied to your real name/bank account won't get tied to a money laundering/human trafficking case accidentally. Why? Because you accepted BTC from a known bad wallet!

Do you think the President of USA has your best interest (and not his) at heart?

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