Mastering Bitcoin 3rd Edition (2023)
github.com
github.com
The bx maintainer Eric Voskull (who added these instructions to the book in the first place) insisted this was not a bug.
His side of the story is he crippled entropy intentionally, expecting users would read the related source and doc changes, and instinctively understand this as advice to switch to using dice.
This choice has resulted in the loss of millions of dollars in value across many chains.
Interpret that as you will.
It is possibly the first example of a supply chain attack targeting a book.
Details: https://milksad.info
Even it goes to zero, I think I'll still enjoy playing with it (like I do with other FOSS projects).
Some other blockchains feature a purely even distribution of coins by fixing the block reward, making sure that later generations also get their fair share (in bitcoin each next 20-yr generation gets 32x less).
If somebody launches a new blockchain today and put it in "Show HN" it is very probable that almost nobody will put their efforts in that project even if it will succeed years later.
There was.this article a few days ago how people start to game the system because all transactions land in blocks every 10 minutes.
Now if I want to trade, someone can game it and do transactions before mine to make something for them.
Same hidden super specialized trading stuff like in normal just because it's open it's still hidden in complexity
Front running on the blockchain can also be combatted through various approaches like a commit and reveal scheme, but that slows down the market and hasn't been adopted widely
Bitcoin didn't solve any of this.
Frontrunning is far more transparent on decentralized exchanges than anywhere else.
So much stupidity behind it. So much misery.
It motivates to convert energy to heat were the local energy price is the lowest while trading globally.
It connects two markets which greatly suffer from this and with a medium which is as sacred as water.
It also takes power away from governments to continually apply hidden taxes that disproportionately affect the poor: inflation.
At the end of the day, yes, BTC is powered by decentralized energy production, but that feels a lot better than the credit/debit+fiat system, powered by centrally controllef violence.
The current system is a low bar to upgrade. Come up with a better proof of work than energy. Maybe Chia works. Until then BTC is the best thing we have for the problems it solves.
Whenever energy is cheap and available Bitcoin will just consume it.
And we see this. We see were energy gets blindly stolen in China, we see were a old gas power plant gets turned ON again in NY. We see that in Texas they paid the Bitcoin miners money to stop mining when they needed the energy
We need taxes. Poor people especially for social services. No one benefits proportional more from taxes than poor. And if a poor person can take advantage of anonymous money, the rich have done it already.
Proof of work is shit and Bitcoin doesn't solve a single issue. You still can get robbed of Bitcoin now just much easier than before, it's still not anonymous because of the ledger and the amount of energy and hardware garbage it produces hurts normal people more than it ever helped.
We have the perfect system which has more features (a lot more) and has grown to what it is. It's our current proof of stake. Bitcoin doesn't solve inflation/Deflation at all. The new Bitcoin amount which gets added to the system is not controlled which is necessary to have the right amount of money in it to be useful.
I can go to a bank and recover my money.
I can exchange my money with other countries.
We have some type of protection for inflation and Deflation .
You really need to learn to understand our current currency system.
That is like saying all bandwidth will be consumed by porn, when in reality porn helped create demand for an abundance of cheaper bandwidth for everyone that is now put to many other uses.
> We see were energy gets blindly stolen in China, we see were a old gas power plant gets turned ON again in NY.
It is almost never economical to mine bitcoin except on renewables, unless of course that energy is stolen. Stolen energy is indeed something that should be solved, but that is a local legal problem, not a Bitcoin problem. All valuable things will have people trying to steal them. People steal the equipment to make their own fiat currency too
> We see that in Texas they paid the Bitcoin miners money to stop mining when they needed the energy
Good! That makes total sense. No one should be mining bitcoin when energy supply is limited. I wholeheartedly support legislation to ban the mining of Bitcoin on limited municipal sources needed to support life. Ideally desert areas like Texas legislate people to build solar farms on their own property to supply their mining energy needs. If that creates demand to bring down the cost of solar panel production, everyone wins.
> We need taxes. Poor people especially for social services. No one benefits proportional more from taxes than poor. And if a poor person can take advantage of anonymous money, the rich have done it already.
Also 100% agree. I am more or less financially secure today and gladly vote to pay more taxes when I have the chance. I am formerly homeless and made heavy use of taxpayer paid services like free library internet.
Where we probably disagree, is that I think we should tax the rich proportionally more than the poor to support them but in fact fiat currency forces the opposite.
Inflation is a tax that disproportionately is paid by the poor. Rich people have most of their net worth in assets. For the poor, they hold small amounts of cash. When inflation goes up, the value of the little cash the poor are trying to save goes down. Meanwhile the value of non-fungible assets held by the rich, is stable, or goes up. They do not pay the inflation tax at all on most of their wealth.
> Bitcoin doesn't solve a single issue.
Most countries, like the US, have no digital payment system, and certanly none with privacy equivalent to cash. We have outsouced this deficiency in fiat monetary systems to companies like Stripe, Visa, Mastercard, and we make those companies rich in transaction fees, but worse, we make them rich by letting them know things like what drugs we buy at the pharmacy, so they can sell data to insurance companies. Visa and Mastercard are not taxpayer paid services, and they are acting in the interests of shareholders, not the public.
I pay my sales tax, but Bitcoin allows me to buy things online without paying extra fees to private companies like stripe, visa, etc, and starves the these surveillance capitalism engines of data to sell, particularly if I obtain the Bitcoin anonymously.
Also Bitcoin is a way for unbanked to avoid carrying all their value on their person and flashing it all the time making them more targeted. It is much easier to hide bitcoin than cash to protect yourself.
> Bitcoin doesn't solve inflation/Deflation at all. The new Bitcoin amount which gets added to the system is not controlled which is necessary to have the right amount of money in it to be useful.
The Bitcoin production rate is just a set of text rules every participant agrees to when they enter the system. They can also vote to change the rules if the majority of participants agree the rules are no longer in their interest. Bitcoin is something like a digital global democratic nation state in this regard.
If greater than 50% of the public of the US wanted to change the inflation rate of USD, they cannot do it. Our money supply is closer to authoritarian rule than democratic. Meanwhile if > 50% of Bitcoin users want to change the rules, then they can change them, at any time.
Bitcoin serves the will of the users, as there is no central party making the rules. The code is the law.
> I can go to a bank and recover my money.
Some people are uneligible to use banks and put cash under the matress and others use banks. Some people store bitcoin in exchanges so exchanges can recover for them, and others store bitcoin on a flash drive under a matress.
There is functionally no difference in bitcoin and fiat in these regards except that bitcoin allows you to make offsite backup copies of value under your matress to protect you if your house burns down, but with cash you are only allowed one set of paper with a single point of failure
> I can exchange my money with other countries.
I have traveled around the world with bitcoin and bought food, drinks, and services in several countries, without having to exchange for local currency. Sure, it is not -widely- supported, but almost every country has bitcoin ATMs that allow me to get bitcoin converted to local currency.
> You really need to learn to understand our current currency system.
I have been studying it for years, but if I got something wrong above, by all means let me know
The fiat system is far from perfect, and excessive inflation of USD has IMO done a lot more harm than good: https://wtfhappenedin1971.com/
Yes Bitcoin consumes a lot of renewable and often limited renewable energy. Like water energy in Canada or solar panels etc. Just because they consume renewable it's not helping us.
The amount of free or cheap energy we have around the globe is limited. Your Bitcoin miner makes more money than anyone who just needs to consume it.
And the natural gas plant in NY IS NOT renewable!
Regarding my example in Texas, you not just ignored my natural gas power plant which got turned on again for Bitcoin you also ignore that for the Texas grid having to PAY Bitcoin miners to stop is horrible for consumers.
There is no inherant motivation for a Bitcoin miner to play nice. The opposite happens even if they just consume random energy they just use even more because they don't move that heat to someone to heat with but use AC to blow it out of their buildings.
Bitcoin is not stable. It moves around as any speculative asset. When inflation was low, prices spiked because people started to gamble. As of now Bitcoin has not proofen to be stable in any way. It's therefore NOT helping the poor as you suggest.
You say Bitcoin is a great alternative for Visa and co. Just that 1. Bitcoin fees vary and I have payed plenty! Of fees. Often enough more than I ever paid for visa. Your argument is again invalid.
And sure let's create a proper digital us dollar to optimize it. Why not? But Bitcoin is not doing this at all!
Btw do you also know what visa does but Bitcoin actually can't? It does insurance and fraud protection. Bitcoin has none if it. If I transfer super securely Bitcoin to a seller and the seller doesn't give me my goods, I will not have anything.
The way smart contracts try to solve this is ridiculous: I would need to block the same amount of value on a smart contract and get it after the transaction. A rich person could literally bankrupt a poor person.
Guess what a solution for this would be? Escrow. What is escrow? Trust. What is trust? Proof of stake.
No one wants to change the inflation rule. No normal person should ever be able to control this. The expertise for it is a sub field in itself. If everyone would vote, everyone would get cheap money until the system breaks...
What the central banks do is critical and has not been magically be solved by Bitcoin at all.
An exchange is not the same as a bank. And normal Bitcoin bros tell you to NOT use exchanges. Why? Because everyone will run to the same few, which then again need to be regulated as we have seen . You basically would then replace the existing finetunes and regulated banking system with an regulated and finetunes exchange system. You wouldn't have won anything.
I'm traveling around the world too. I have not seen anyone accepting Bitcoin in the last 20 restaurants at my current rural France holiday. Where do you do holiday? Srsly? Tell me at least 5 places which took Bitcoin directly.
The current fiat system is not perfect but it's the best proof of stake system with a ton of features, it's finetunes by all of us for over a century now and it works.
I exchanged my euros in Iran for their currency. No one of those people had a smartphone to do Bitcoin transactions.
And no the third world person can't just exchange their 'not so good currency ' easy nilly into Bitcoin and no as long as Bitcoin is unstable as shit it's not a good way to get your salary in it.
My friends in Ukraine (8 years ago) were very very happy to have a stable euro income in comparison to their local currency
We -should- make laws here to ensure miners are pushed to energy sources that are not harmful. If they can afford to build warehouses full of miners, then they should also be able to help build water/solar farms to power their objectives as well.
There are always going to be people wanting to use a lot of electricity for things you personally do not value though. The Las Vegas strip is an example where the casinos wanted a lot of power and water to make money, and the local area could not supply it. They had to help fund improving the infrastructure for the whole city in order to meet their profit objectives.
My point is the greedy miners can become allies of public infrastructure and grid improvements if we legislate correctly. This is not a new bitcoin problem as much as it is a classic human and political one.
> You say Bitcoin is a great alternative for Visa and co. Just that 1. Bitcoin fees vary and I have payed plenty! Of fees. Often enough more than I ever paid for visa. Your argument is again invalid.
Bitcoin is more of a replacement for gold, which formerly backed the dollar. It is much easier and cheaper to store and transport bitcoin than gold. Both of these have been used directly for commerce but it does not scale. Visa in the end took on providing a credit system on top of the dollar (which was based on Gold).
In the Bitcoin system the "Visa" is Lightning, though that will take a while to get mature and widely adopted. Still, it uses lines of credit to provide instant transfers with no fees.
> Btw do you also know what visa does but Bitcoin actually can't? It does insurance and fraud protection.
Things provided by private companies that have nothing to do with the underlying currency. This comes with maturation, sure, and it is happening.
You are talking to one of the people who built arguably the first insured, SOC2 certified, and multi-party accountable, custody companies for Bitcoin and other cryptoassets.
Do not assume none of us in this space care about such things.
> And normal Bitcoin bros tell you to NOT use exchanges.
I am not what most would refer to as a "Bitcoin Bro". There is a lot of ignorance on both sides of this for sure.
I have helped build several regulated, tax paying, custody systems, some of which with actual banking charters.
I am on the side of building the infrastructure to ensure cryptoassets can be transferred with all the safety of traditional financial instruments. I hope to see a Digital Dollar use that same plumbing some day too. From there it is up to the public to decide if they want to use inflationary currency or not, with all other things being close to equal.
> No one wants to change the inflation rule. No normal person should ever be able to control this. The expertise for it is a sub field in itself. If everyone would vote, everyone would get cheap money until the system breaks...
So a special few know better than the public so they should make all the rules for us, and be trusted to make those rules with benevolence to benefit the poor and help everyone become successful. Benevolent authoritarianism never lasts, and always ends up benefitting the few over time. Look at the endless graphs I posted. The economy has gotten worse by endless metrics since 1971. The few authoritarian leaders of money screwed over the public in major ways by breaking the gold standard, and we did not get to vote on it.
Bitcoin is fundamentally a rebellion against authoritarian rule of money.
If the end game is we end up with a digital dollar that the public manages democratically to meet the needs Bitcoin does today, great. Until then, Bitcoin will continue to fill that void.
Every user of bitcoin is voting against inflation.
> We have the perfect system
Became
> The current fiat system is not perfect
I will at least take that as one good outcome from this discussion
Nonetheless of what you build or not. You still ignore arguments I brought up in our discussion.
Right now in my opinion you deflect.
As I said before: Bitcoin doesn't even solve the trust problem. The only thing it does it makes sure that one value gets transferred from one crypto endpoint to another.
And the only thing existing are coins. The creation of these coins have fundamental problems:
1. There are very little of them 2. Very little of them get created
Whoever owns Bitcoin right now have in theory such an first mover advantage that no one in their right mind will ever start to transfer over Bitcoin.
And because new coins are not just getting created so slowly they will even become less. In 4 years only 1-2 coins will be made every 10 minutes.
This alone will breaks Bitcoin neck sooner than later.
Changing this would create big value changes for Bitcoin. Whoever owns Bitcoin will experience huge inflation if anyone going to fix this.
All the math just doesn't make sense for Bitcoin at all.
El Salvador Shows how stupidily hard it is to use in real life.
And you argue by wanting laws for Bitcoin? The magical decentralized anonymous crypto? You already want what most don't want.
No one ever wanted crypto to be regulated.
All of this will just incorporate (if even) crypto into our current fiat system.
And no not a single country and me as a citizen want crypto. My family and friends have no clue how crypto works.
Just because you build some company whatever doesn't make you an expert in economics of Bitcoin.
Start arguing my points
Honest question, how do you do this in a way that doesn't cost you any fees to third parties? What are you buying? Here's an example. I need a new white men's dress shirt. I have a private key for a Bitcoin wallet. How could I convert my Bitcoin into a dress shirt without paying fees to private companies?