Comment by siwatanejo | Hacker News Reader

Comment by siwatanejo | Hacker News Reader

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> How do I get some Bitcoin?

There are bitcoin-only exchanges, e.g. Bitaroo. There are also P2P exchanges that don't hold user's funds, like LN2bot (this one is very handy because it supports Lightning, so fees are ridiculously low, and trades very fast for not being a SPOT exchange).

> I can't afford to mine it anymore.

Right, it's a professional industry now; hobbyists can still do it, but at a loss.

> What if I want to buy some more? Or sell some of what I have?

See the aforementioned exchanges above, in my first answer.

> What can I spend Bitcoin on?

Anything, really. For example you can buy flights & book hotels with travala.com. Or buy things in Amazon with a discount thanks to purse.io .

> What does Bitcoin solve for me?

Not being affected by events like SVB closures (or worse: smaller banks that may not be bailed out[1]); not being affected by QE in the medium-long term (e.g. put your savings in it and forget about for 4 years[2]).

[1] If you don't believe it, watch this: https://twitter.com/Stromens/status/1664977520750370816

[2] Try to find 2 points in the historic data of a BTCUSD chart, which differ by 4 years, the oldest point is never higher value than the newest point.

> There are also P2P exchanges that don't hold user's funds, like LN2bot.

The only search result in Google for '"Ln2bot" crypto exchange' is this article.

I think this is it https://lnp2pbot.com/

Ah. That's helpful.

It's peer to peer, but not trustless. There's a moment in the transaction at which one party can default. So they need a reputation and dispute resolution system.[1]

You'd think there would be trustless decentralized exchanges by now. Ones have been proposed.[2] Some even exist. It's possible to have a truly trustless exchange where orders are smart contracts on a blockchain, transactions are atomic swaps, and at no moment does a third party have custody of anything. This is called an "on-chain order book". It's rarely seen, because it's slow, lacks liquidity providers, and is subject to front-running. Also, nobody makes a billion dollars running one. Most so-called "decentralized exchanges" turn out not to be totally trustless inside.

[1] https://lnp2pbot.com/learn/common-problems-and-solutions.htm...

[2] https://www.smartcontractresearch.org/t/research-summary-tex...

Sorry but, do you know exactly what trustless means?

This concept applies to custody, not to fiat-to-crypto exchanges. Because a fiat-to-crypto exchange is an on/off ramp into/outside crypto. And as fiat cannot be held in a trustless way, the most "trustless" way to make a swap without the exchange holding the fiat amount is by using an escrow system. If the escrow system can only be moved to party A or party B during a trade-dispute, then it's the most trustless thing you can get, my friend.

PS: Your 2nd link seems to suggest that you're saying "DEXes are better than p2p exchanges!", well, DEXes don't have fiat-to-crypto pairs, only crypto-to-crypto. Nice try.

I was going to write the same post. All you need is escrow and no, escrow is not as dangerous as cryptoexchanges holding onto fiat deposits because you don't give them your money ahead of time, you only give them exactly how much you want to transfer for any given transaction down to the cent. If they screw you over, they will lose their payment service provider license and go out of business.

There’s a neat paper showing that you can have trustless decentralised exchanges only for on-chain assets, ie exchanging one crypto for another. Real world assets (including fiat) cannot be securely bought on blockchains.

Irrationality, Extortion, or Trusted Third-parties: Why it is Impossible to Buy and Sell Physical Goods Securely on the Blockchain

https://arxiv.org/abs/2110.09857

Yeah sorry, typo there. @bibabaloo FTFY

> Anything, really.

I tried to bring my bitcoin to the grocery store to buy some brownie mix and cheese slices but they wouldn't take any coins from my Trezor.

I had a similar experience. I brought a gold bar to Jumbo and tried to buy a croissant, and the cashier just looked at me funny and asked for my card. That's when I realized gold is worthless

I know. I keep baseball cards instead.

Wrong grocery store man, how about choose one located in El Salvador.

But this is the more nuanced argument: https://twitter.com/BitcoinPierre/status/1666865701330595840

Explaining why it is not useful does not make it useful.

> not being affected by QE in the medium-long term (e.g. put your savings in it and forget about for 4 years[2]

Sure, why care about the possibility that cashing out early might mean you lose half your money? Trust instead in the long long long history of BTC as a stable currency.

> Trust instead in the long long long history of BTC as a stable currency.

You perceive it as unstable because you're using USD as a unit-of-account. As a thought exercise, if you were using BTC as the unit of account, what you would perceive unstable is the US dollar. And what you would see is that the USD value would be trending down against BTC, especially if you choose a time-frame equal or higher than 4 years.

So yeah mate, nothing to see here, keep holding your cash.

No, you will perceive each and every other currency in the world fluctuating against BTC pretty much in sync. Which suggests it's the BTC volatility that is the invariant in the system.

Until it doesn't.

The point is that, so far, BTC is objectively extremely volatile. That it might not be in some future is not an argument to rely on it today.

The volatility of it is trending down year after year.

With Bitcoin you have to think in terms of the exchange rate. To the extent that you can buy things in it most of that would be based off a dollar conversion. I doubt you can buy much denominated in Bitcoins at a stable price.

Give it time.

Why does everyone always compare BTC to USD when it comes to "holding". That's not the only alternative! You're not supposed to hold large amounts of USD over long time periods. It loses value by design. You're supposed to put excess money to more productive uses, e.g. invest it.

No one ever suggests using some S&P500 ETF shares as money even though it also trends up vs the USD. Just like BTC it's also more volatile than money. Unlike BTC it represents something real though.

Except that BTC has outperformed S&P500 for years.

That's not the point. You can cherry pick stocks that have outperformed the S&P500 too.

The point is that USD isn't for holding. It's for spending. BTC is more like a stock or asset than money. Money isn't supposed to be volatile and it's not supposed to appreciate in value.

The discussion was about perceiving bitcoin as stable or not. I brought up BTCUSD contrast, but I can bring BTCSP5 instead (with the same point), without your concerns about USD not being "holdable".

As a thought experiment, if I use BTC as the unit of account, then the prices of all the stuff I want to buy denominated in Bitcoin vary wildly from month to month.

And if I choose a time frame of, say, 25 months or 19 months instead of 4 years, my savings lost more than half their purchasing power, which is far worse than anything QE has done to cash over equivalent time frames (ironically over a timescale which has been exceptionally bad for cash and exceptionally favourable to a notional "safe asset" alternative)

>As a thought exercise, if you were using BTC as the unit of account, what you would perceive unstable is the US dollar.

No, you would literally have to negotiate prices every single day. The vast majority of currencies have less volatility than Bitcoin. People don't think the dollar is unstable in the euro area.

My point is that I'm relying on an exchange to perform most of the functions you say. How do I know those exchanges are any safer than Binance?

And Bitcoin absolutely tanked with rising interest rates, just like the equity markets. Can't say it's not responding to QE.

> How do I know those exchanges are any safer than Binance?

Did you miss the part where I recommended an exchange that doesn't hold user's funds?

> And Bitcoin absolutely tanked with rising interest rates, just like the equity markets.

Right, and where's the value of it 4 years after each value-tank event?

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