Satoshi's dream of a decentralised ledger finally reaches its ultimate form of a centralised list maintained by the DTC. Rejoice!
Btw I know comments like that are fun when talking to friends or whatever. We just have that guideline because of how they influence discussion on a large internet forum...not for any ethical reason or anything like that.
For those parties, bitcoin's general properties are not very relevant and a centeralized list maintained by DTCC may well better serve their particular needs. To the extent that it does: more power to them!
as far as having an actual historic or present day use case, blockchain snake oil is still in search of a problem only it can solve to this day
https://bitinfocharts.com/comparison/bitcoin-transactionfees...
Also, bank transfers aren't cheap. For example, in Costa Rica, to transfer any amount from an account in bank A to another account in bank B, you pay a fee in the range of 1$-3$, irrespective of the transferred amount. If you consider transfer across countries, then you enter into 50+$ transfer fees.
https://bitinfocharts.com/comparison/transactions-btc-eth-do...
https://bitinfocharts.com/comparison/transactionfees-doge-lt...
There is no technical reason to do this, it was purely a political propaganda based move.
Before you respond with "but disk" or "but network" or "but cpu" look at the actual bitcoin throughput (about 700KB every 10 minutes) and look at how much hard drive space you can buy for the cost of one transaction. Then realize that individuals don't even need to sync with the chain to use cryptocurrencies. This is a well worn road.
High BTC fees impede the Lightning Network from being a true scaling solution, an obvious fact that has been dismissed for many years by adherents of absurdly small block sizes.
Time to full send my retirement accounts into these ETFs so I can retire early. /s
Actually though I might consider allocating a tiny percentage (1-3%) to these. Seems like fairly low risk with enough upside, but who knows.
Edit: after further research it appears that the cash create mechanism doesn't cause a tax event for shareholders as it does with mutual funds. See https://www.grayscale.com/blog/legal-topics/addressing-poten...
We will have to see how every Bitcoin ETF is structured. YMMV depending on this structure and how you get taxed.
There is shamir secret splitting, multisig, MPC, secure enclaves with biometerics, etc...
There will be apps like Fuse wallet: https://www.fusewallet.com/
There will be phones like Saga: https://solanamobile.com/hardware
I think how one handles their wallets will be much like how people make their espressos. Some will just stick k-cup in a machine and hit a button, others will become full-blown coffee enthusiasts that carefully measure their beans, de-static their grinds, and extract for the exact right amount of time.
That's absolutely out of the question for almost any human being, especially given the timeframes involved.
> There will be phones like Saga [...] There will be apps like Fuse wallet: [...]
Again, we're talking about a timeframe of decades. How many of these will even still boot up after that amount of time? None of these seem safe to just throw in a bank safe deposit box.
> make their espressos. Some will just stick k-cup in a machine and hit a button
I'm really not a coffee connoisseur by any meaning of the word, but even I know that what comes out of a k-cup machine is brewed coffee, not espresso.
The ETF is probably the equivalent of this "espresso style" k-cup https://www.keurig.com/Beverages/Dark-Roast/Espresso-Style-C...
No, that's his passphrase
You die, your heir or executor takes the appropriate paperwork to the bank, and then they get the contents of the box.
Many banks don't offer them anymore, and in some countries they have a disturbing tendency of getting robbed, with absolutely no recourse for the depositors (since contents are usually unverified and uninsured).
If your threat model includes someone inside your home with power tools and you can’t trust a bank… you might want to consider moving.
Many people don't own a home. Not all of those that do want to expose themselves to the liability of storing valuables there. The safety situation between homes even within the US varies greatly, and even more so internationally. Banks with safety deposit boxes aren't ubiquitous.
If it works for you, great! I'm just saying that you might be in the minority here.
"Why is Bitcoin a great asset?"
"Because its the future of currency! Its great and everyone will use it!"
"Then why don't you just get it directly?"
"Uh, its too much of a hassle. For me. A professional finance worker."
Of course the ability to hit "buy now" in the same marketplace you manage all your other investments is pretty low friction and I'm sure this decision will bring fresh investment out of the woodwork.
Frankly we could probably get our rock ETF's approved more quickly. Regardless of how you feel about Bitcoin, it's not (or shouldn't be) the SEC's place to play nanny and dictate the particular assets/commodities/etc. in which you're allowed to invest your money. Incidentally even one of SEC commissioners agrees https://www.sec.gov/news/statement/peirce-statement-spot-bit...
But I agree with the fact it’s not the SEC’s role to tell us the merit of btc. I do have some worries on the Tether scam still going on for example though, which has been manipulating BTC for years.
Now Tether owns tons of money, and can buy treasuries that bring few % of interests, and these interests are not paid back to USDT holders.
As a result, overtime, they'll be able to fill-in any potential gaps or money accidentally lost.
Edit: spelling
Also, limited in number and scarcity only partly define value. In addition to these properties, other people must agree with you.
If your flat rocks are scarce and people want to invest in them, by all means…
The EU (higher population than the US) has had Bitcoin ETFs for a while now.
This is actually a great comment that I think applies well to the crypto world as a whole, even if that wasn't your original intent.
Anyway, digital gold is still better than nothing. It's still an innovation as a store of value, even if the payments idea is basically history (some Bitcoin maxis just don't understand that yet). Also Bitcoin has inspired a whole ecosystem of other blockchains. If you want the original concept of a peer-to-peer electronic cash system, Monero is probably one of the best to check out currently. Governments are btw currently going after Monero, because unlike the common myth about Bitcoin, it actually enables anonymous payments - just like cash. And so of course we can't have that. Multiple exchanges already announced they were forced to delist XMR.
You ask the question and then proceed to answer it.
> Satoshi [...] gave a gift to the world, but it sadly got co-opted [...] In hindsight it was probably bound to happen, because money buys influence
Because anything of value and fungible will invite exploitation by monied interests.
> and taken over first by small-time grifters and now by the big boys at Wall Street.
There is ample evidence to indicate that the predominant grifters are not small-time operators.
The aesthetic and industrial applications of gold are what makes it intrinsically valuable - that being the key distinction, and distinct from Bitcoin. If you ignore the useful aspects, of course it's no different from any useless thing.
Eh, I think you actually might! Hell, you said it yourself - the mob always wins in the end. It doesn't matter what Satoshi made, the mob took it and made it into something else. It's what Bitcoin turned into that HN is collectively cynical about.
Ignoring that this idea was mocked by many from the start for reasons we can only speculate about, it seems there's a lot of confusion about what Bitcoin currently is as well. Mocking the idea that poor people in Congo will be saved by Bitcoin - sure. Making fun of laser-eyed Bitcoin maxis telling you we'll all totally use Bitcoin for payments (have you heard of the Lightening Network bruh?) - of course, I joke about them too.
But what you have is the first time in the history of the planet that there is a public ledger that can be used by anyone, transparently and permissionlessly, to store and transfer value. It's not in the hand of any bank or government. Nobody can freeze your account because you're fully in control. You can run your own node to push transactions if you wish to. It can absolutely not be falsified, unlike cash or book money. This is still extremely valuable. Especially when you add programmability, which Bitcoin only has in a rudimentary form, but other "smart contract" platforms already do much better. Because now you can automate transactions and those transactions don't necessarily have to be about money.
It might be funded by intel agencies for all we know.
https://en.wikipedia.org/wiki/Executive_Order_6102
Incidentally: When you look at currencies (and governments) on long enough time scales, you'll see that they're pretty ephemeral -- e.g. very few currencies or governments around today were around in (roughly) the same form 200 years ago. I consider it a benefit that we might have a way of persisting wealth that doesn't involve rent extraction or digging shiny metal out of the ground -- though I admit to not being a fan of the "wastefulness" of PoW in the midst of energy decarbonization.
If you want a fun watch: The History of Paper Money on Youtube is a fascinating look at how currencies, banks, central banks, and fiat money all came into existence. TLDR: Our "modern" approach to money was a giant "too big to fail" ponzi scheme largely perpetrated (multiple times) by John Law. Wild.
The likes of Blackrock could use BTC as a hedge if the Feds keep on printing USD under political pressure.
> if the Feds keep on printing USD under political pressure
Have you looked at the economy in the last two years? The Fed has been burning USD at an unprecedented rate!
Try the last 3 years. Or last 4. Or last 40 years.
They are desperately trying to control money printing (oops sorry, quantitative easing) with high interest rates, but I'm sure they'll be forced to bend to political pressure in an election year.
U.S. needs an extremely tight monetary regime for two decades, to be viable long term. And the big funds will hedge. BTC is one of those hedges.
Access to a risk-free investment vehicle that preserves your purchasing power perfectly across decades is not a universal right.
Try moving $10M of gold from one end of the world to another for under $100
Note that the transfer of monetary value/energy is final settlement (i.e. it's not just an IOU that will be settled at later date, like most bank payments).
Ultimately the base layer network will be used for settlement between banks, national reserve asset/currency etc. and faster, cheaper payment rails will be built on top of it (e.g. the Lightning Network)
The fact is that Bitcoin is very likely to absorb a vast percentage of the worlds value simply as it is. Once this has happened its value will stabilise and it will become useful as a unit of account/day-to-day currency. By this point, there will be far more motivation to focus on developing solutions (such as Lightning) to allow smaller and faster transactions.
You present this as a fact, but the actual valuation of Bitcoin doesn't seem to support this claim. John McAfee bet (and proverbially lost) his testicles on broad estimations of Bitcoin's continued growth. Without extraordinary evidence, you can't make claims of extraordinary provenience.
> there will be far more motivation to focus on developing solutions (such as Lightning) to allow smaller and faster transactions.
If you need an L2 transaction layer to solve an issue inherent to an L1 chain, you're kinda just admitting that the base layer is flawed. Why use Bitcoin at all if we need mediators to settle regular transactions?
The "we'll fix it later" mentality works for shitty altcoins that have nothing to lose by reinventing themselves, but I'm not convinced Bitcoin can change. I was mining Bitcoin about a decade ago now, hearing people say "Lightning will work soon" or "a good interchain bridge will exist eventually" in 2024 leaves me convinced nothing has changed. It's a race between the economics and the technology to see which becomes outdated first.
On a similar note, TCP is an admission that IP is flawed. And HTTP is proof that the entire networking stack is a scam.
Clearly, any decent networking protocol would handle any and all information interchange anyone could ever need.
The fact that HTTP is on its third iteration, and it’s still built in top of the same Internet Protocol from 1974, proves that _nothing_ has changed. /s
Unlike the OSI model, Bitcoin's solution to finance is not modular or all-encompassing. If it's not going to adapt to modern demands, it will get replaced. There's no point in keeping around a financial solution that is impossible to fix when it breaks.
Your prediction for the future that a ledger with the throughput of a 28.8 modem will absorb the world's value is "fact"?
By this point, there will be far more motivation to focus on developing solutions (such as Lightning) to allow smaller and faster transactions.
It has been in the works for a decade and no one wants it. Why would someone use that when any other cryptocurrency (except for ethereum) already do small and fast transactions?
https://bitinfocharts.com/comparison/transactionfees-doge-lt...
Yes, the base layer network is ideally suited for storing extremely large amounts of wealth, for large amounts of time. No other asset has qualities that come close, they all leak value compared to bitcoin.
Are you copying some talking points or can you explain on a fundamental level why you believe this?
As far as clones. Network effect takes care of that. They would have to be substantially better than bitcoin to beat it and that is extremely unlikely to happen as bitcoin is close to perfect.
You realize that ethereum already surpasses bitcoin in transactions and litecoin and even dogecoin do too right?
https://bitinfocharts.com/comparison/transactions-btc-eth-lt...
Also you still haven't linked where you are getting these ideas. When you believe in predictions of the future with no evidence and no possibility in reality, that's called religion.
Bitcoin refuses to increase their throughput and at the current rate, everyone on earth gets a single transaction every 50 years. What part of this actually makes sense to you?
First off, the transactions on the main bitcoin network will be the largest transactions in the world. All the smaller transactions will take place on different bitcoin networks. Lightning is a decentralised example, VISA and Paypal are centralised examples.
This sounds like you have been soaked in /r/bitcoin propaganda. You realize that subreddit is completely censored so that anyone who goes against the narrative of more throughput or the absurdity of the lightning network gets banned right? Try going there an questioning the common narrative to experiment for yourself then see what happens.
You aren't confronting why anyone would do what you're saying. Why would anyone transfer money onto a network where they have to pay huge amounts of money to move it around? What problem does that solve? It isn't like people can't already move money around much cheaper than a bitcoin transaction.
The lightning network has been promised for over a decade now. No one uses it because you have to make a little cluster of transactions that have no impact on the actual chain until you pay the enormous fees. That's like a little village coming up with their own currency of swapping IOUs with everyone else and not being able to use their money until they pay $12-$37 to convert it something Other people will use. If your IOU is less that the transaction amount, it's frozen. It's an absurd idea that no one wants.
Most of all you aren't confronting why anyone would put themselves through all this when they could either use traditional finance or other cryptocurrencies. Bitcoin is right now useful for and used for only speculation and nothing else. Knowing that why would anyone put their money into unless they were speculating on it?
https://bitinfocharts.com/comparison/transactions-btc-eth-et...
Ultimately, I see Bitcoin as Gold. You do not touch your gold savings for buying your daily coffee. For that, you have USDs in your wallet. But you still transact with Gold once in a while when it makes sense.
Indeed it is crazy. Who is advocating for that though?
Think about it, running an exchange has costs. I really don't understand how people can be so easily tricked by "free" offers that are actually more expensive when you do the math. PFOF (i.e. legal theft), unfavorable spread, etc... They get their money one way or another. It can technically make sense when you're trading something like $50 worth of a stock, because of course that would not be reasonable with a brokerage using a traditional fee structure. But frankly trading such low figures is silly. You have to invest a lot of time (=money) in research when stock picking, else you're guaranteed to lose sooner or later. But the reward simply isn't there. Even if you make 100% profit you now have $100. Better put that money into an index fund savings plan and forget about active trading. You're guaranteed to receive a better reward on your investment just getting a part time job selling fast food or something like that.
I was reading a book about that recently, it boils down to: "You're not [just] the customer, you're [also] the product."
Key term: Payment For Order Flow (PFOF) [0], with the book-paragraphs I was thinking of down below:
____________
> Retail investors have one hugely attractive property when considered by a professional – they’re dumb money. Not only are they unlikely to have private information, a lot of the time they haven’t taken care to consider all the public information. When the party on the other side of the trade is a small investor (or a lot of orders from small investors all over the country, ‘bundled’ by a retail stockbroker), you can be reasonably sure that you’re not taking too big a risk that the person selling stock to you knows something about it that you don’t.
> This makes retail orders very valuable to the market. One of the reasons why stock brokerage commissions are so cheap these days is that retail brokers have actually realised how valuable they are. They charge a quite substantial fee to players like the high-frequency traders for the privilege of dealing against their order flow, and they rebate some of this fee to their customers. But the retail orders would eventually dry up if the customers lost too much or felt that they weren’t being given a fair chance. And without a steady flow of ‘dumb money’ lubricating the wheels, the professionals would find it a lot harder to trade, as they’d always suspect each other’s motives for buying or selling.
-- Lying For Money by Dan Davies
[0] https://www.investopedia.com/terms/p/paymentoforderflow.asp
In crypto, the margins are much wider than in any traditional financial services, which rely on volume and wide adoption!
The great thing about cryptocurrency is you can trade it any way you like. You can take your tokens in self custody. You can in theory trade with a random guy on the street, without any third party involvement and with zero fees. I know a guy who does this because he's worried about a coming police state, so he buys everything with cash during meetups.
I think the high fees CEX are currently charging, which you're right about, has multiple reasons. One is it's a completely new and largely unregulated space. There are a lot of risks, they need to set aside a lot for litigation. FTX had very low fees for example while stealing customer funds to lobby Washington ;) Coinbase is legit but has to spend a lot on legal fees and compliance, because they're in it for the long run. Also a huge part of the reason is surely simply because they can. Crypto traders are making so much money that they're more likely to accept paying high fees than the average stock trader. That won't last forever, it's just because the market is new and volatility is crazy.
/s
Gold has considerable storage/security costs compared to Bitcoin.
Gold has considerable fake risks/costs compared to Bitcoin.
The supply of gold is continually inflated by mining (also true for Bitcoin though the mining rate in bitcoin decreases over time).
Lightning network fees are negligible. So that argument doesn't hold either.
Every lightning transaction is just a regular bitcoin transaction that could be posted to the chain at any time-- you just don't have to, because the scripting functionality has been used so that if a counterparty posts an earlier state you can effectively cancel it.
The switch to deferring updates unless there is a dispute gives a massive advantage to scaling (e.g. number of tx per second possible goes up the more users there are rather than being a global constant), instantaneouness of transaction irreversability (as fast as the involved parties can make a couple round trips, vs an hour for multiple confirmations), and potentially privacy (since not every update is globally broadcast). But these benefits come at a considerable cost of requiring a degree of active monitoring so if a counterparty posts an outdated state your software can respond, along with additional software complexity, etc.
For some applications the benefits are well worth the costs, for others they aren't.
To say it's not bitcoin is like saying multisignature transactions aren't bitcoin. In both cases they're ways of using the existing functionality. In both cases they require some additional software and different approaches. In both cases they use functionality built into the protocol which was intended for their purposes (payment channels being a concept originally described by Satoshi, and specifically accommodated in the transaction format). And in both cases they change the tradeoff surface somewhat.