Comment by ProllyInfamous | Hacker News Reader

Comment by ProllyInfamous | Hacker News Reader

Background: I am personally a long-term value investor (a la Sir Templeton or Buffet †), but annually breakfast with a retired "numbers guy" (who's currently building his short-term trading strategy). For decades he worked finance for among the largest accounting firms in the world...

Since 2016, our mutual friend and I have been adamently suggesting he look into "this bitcoin thing" — his response was typically [disinterested].

At a recent breakfast, it was explained how "talking with ChatGPT finally convinced [him] that you guys have been correct about Bitcoin all along."

When asked "what did ChatGPT explain to you that we two humans could not?!"

His response was simply "I never got embarrassed asking the computer any finance questions, even stupid/simple ones; I've always been the finance guy with answers so I forgot how to be humble in unexplored topics."

Pretty damn humbling, indeed; now if only he had listened back in 2016 =D

†: "Time in the market beats timING the market."

> His response was simply "I never got embarrassed asking the computer any finance questions, even stupid/simple ones; I've always been the finance guy with answers so I forgot how to be humble in unexplored topics."

I think I'm the opposite. My feeling is that anything I type into ChatGPT gets stored in a database, ready to be leaked at some future date, or read by prying eyes without my knowledge. I'm more careful about what I type into it than what I say out loud in front of my friends.

Or maybe I'm just paranoid?

https://rabbitu.de/articles/security-disclosure-1

Doesn't it count as paranoia if it already happened?

Wow! Great disclosure! I find it hard to read though, since the text doesn't properly capitalize the start of sentences. Messes up with the natural language parser I have in my head :)

Except it doesn't; that's not OpenAI, that's some random get-rich-quick startup built on top of OpenAI API. Never trust those.

That's true, although the pain of giving up privacy is less sharp than the pain of social embarrassment.

Sorta like not wearing a helmet on a motorcycle. Or not using condoms. Or not getting vaccinated.

On my newest Toyota, they finally made it so you cannot disable the seatbelt chime.

As a decades-long seatbelt-FORGETTER (I'm not anti-seatbelt, literally forgot!), not being able to change the vehicle's behavior actually led to a change in mine [I always "buckle up" before even unparking]..!

Same , not interested

Time in the markets beats timing the market if you actually have capital to throw around to gleam a decent 5% yearly return. If you don't have much capital, you have to time the market like hell to build up your capital to a level where 5% yoy actually is a decent amount of money.

5% is decent? The index made about 10% on average, Peter Lynch about 30%, and Buffett in the ‘60s was at 40-50%.

5% return is a pretty common estimate for passive investing. I certainly didn't come up with it, smarter people than me did and spread it all over financial news media.

Maybe it’s inflation-adjusted?

If timing the market works at a small scale, why stop?

If it worked, wouldn't everyone do it?

Your risk tolerance changes. If you are living on $4000/month and have $500 to invest, you may as well bet those $500 on black. If you have a sizable investment that you hope will pay for your retirement you might want to go for the solid 10% yoy. Similarly if you manage other people's money they might be unhappy with you making 50/50 bets with that money.

It's the same logic that causes people to buy lottery tickets. Winning big in the lottery is unlikely, but getting rich by saving two lottery tickets worth of money each month is impossible. The risky strategy with the worse expected outcome is the only one that leads to your goal.

Time scale yeah. I may do a bond tent when I get closer to retiring. But given the same amount of time and different amounts of money, if my cost of living is covered either way, why use a different strategy?

It does work at small scale and people don't stop, make careers and billions out of it, see high frequency trading. You can play market timer yourself just by using some game theory and keeping up with the chart.

I don't feel like competing with hft though lol

> now if only he had listened back in 2016 =D

So your investments could be used to screw other people out of their money who are similarly financially illiterate/insecure?

It’s kind of crazy to me that there are somehow still staunch cryptocurrency proponents out there who have somehow ignored all the negative press it has received.

Even if you're very conventionally minded, it shouldn't be that crazy to you that not everyone adopts dominant media narratives

By dominant media narratives you mean a self evident train of scams and security incidents? There's no conspiracy or undue effort to make crypto look bad, that happened in a decentralized manner.

You were the one that brought up the media (nobody said conspiracy?)

Media narratives and conspiracies are often used interchangeably, I can't read your mind so I included both. Also in your original comment you brought up the media, it's right there, so...

dude the comment i responded to is from you saying "cryptocurrency proponents out there who have somehow ignored all the negative press it has received."

In fairness, that was actually me. May want to double check the usernames. Both start with ch - easy mistake to make.

I would have participated more in the discussion but HN is telling me I’m posting too fast so I’m guessing a moderator didn’t like some of my harsh tone.

haha okay that explains it, yes i just didn't read and assumed it was same person

AGI has been achieved internally.

> a self evident train of scams and security incidents

Because a bunch of bad people jumped on the bandwagon to exploit others.

Bitcoin != “crypto”

Bitcoin was the original and it’s still here. And it will continue to be here.

The goal of bitcoin is not to “make money”. Bitcoin is money. A new kind of money. One that no central entity can control. One of which there will only ever be 21,000,000. No one can print more Bitcoin. Unlike fiat, which the government and the ruling class use to screw people over right in front of their faces all in broad daylight.

Bitcoin can not be diluted. Bitcoin can not be inflated. Bitcoin can not be controlled. Bitcoin can not be stopped.

Fiat is weak money. Fiat is bad money. Bitcoin is strong money. Bitcoin is good money.

Bitcoin is a force of nature.

OTOH, Bitcoin can be subject to liquidity crises which no entity could intervene to resolve.

Is that true? I don't doubt it but can you describe what that would look like in practice?

Sure, any currency can experience a liquidity crunch. This is a macroeconomic phenomenon. The main purpose of a central bank's massive currency reserves are to provide liquidity in the event of a liquidity crunch.

For simplicity imagine that there are just a few institutions that hold the majority of Bitcoin. Now imagine all of them are incredibly over leveraged on risky financial assets that suddenly all go to zero. Each of these institutions needs to suddenly pay off massive debts that they can't afford, and they start to spend their full Bitcoin reserves to pay. Investors notice the institutions are going belly up and simultaneously try and withdraw all their bitcoin deposits. There simply aren't enough Bitcoins to go around and the financial institutions holding bitcoin collapse.

When this happens in normal currency markets, the Federal Reserve steps in and provides a bail out of temporary liquidity to cover some of the debts involved for long enough to calm down investors so that everyone isn't simultaneously trying to cover massive debts with the same insufficient supply of currency. This is an absolutely critical part of modern macroeconomic stability. Every liquidity crisis that has happened would have been massively worse if not for this "monetary stimulus."

> Bitcoin can not be controlled.

> The world's top Bitcoin mining pools mainly come from China, with five pools being responsible for more than half of the cryptocurrency's total hash.

https://www.statista.com/statistics/731416/market-share-of-m...

They dont control anything. If they left the network would readjust difficulty after 10 minutes and continue on the same way.

Seriously educate yourself. You're being the guy in the op comment.

It's not about them leaving the network, it's a matter of whether they could be coerced by an authoritarian government to alter transactions.

They cannot alter transactions, only deny/duplicate them. Their node would be blacklisted by those working around censorship.

Guys cmon its really childish the boring same issues thrown around when theyve been answered and addressed a million times.

For a forum of "hackers" most are just hacks.

I don’t think that answers the question. Denying transactions is certainly an issue. If it is true that the majority of mining power is in China, only a minority is outside of it. What mechanism does Bitcoin have for a minority of nodes to deny the transactions of a majority of nodes?

Majority of verification nodes are not in China.

No single jurisdiction approaches anywhere close to majority, with #1)USA@21% †

†: https://bitnodes.io/

The "verification" nodes don't do anything to prevent censorship by miners.

The threshold isn't quite 50%+. If one of the 49% nodes mines a block with a would-be censored transaction, the censoring notes have to make an economic decision to try to mine a replacement block and then a second block on top of that to rewrite the chain. At 100% this is easy, but at just 51% it's a costly gamble that will frequently fail at a huge dollar cost.

A block costs $200k at current prices. At just over 50% of the network, you are gambling at least two blocks to force a rewrite.

Finally a comment that is informed thank you

>The "verification" nodes don't do anything to prevent censorship by miners.

Absolutely agreed; however, eventually some non-hostile miner will randomly generate an acceptable `nonce` [entire point of hashing/energy-usage] which DOES include the censored-by-some transaction.

An additional function of the node-verification network (which uses essentially no energy, relative to mining) it to maintain the entirety of `mempool`, which is where unaccepted transaction-attempts live until mined into a block [which is then "accepted/denied" by same node-pool].

tl;dr: as far a probabilities go, unless you own exactly 100% of mining pool, it is impossible to censor a tx from the node's mempool; all you can do with <100% is DELAY transactions.

They can’t alter them? Can’t they do whatever they want if they collude to execute a 51% attack?

no, txns are cryptographically impossible to alter. The 51% problem is simply a double spend problem.

I am US-based and run one of ~8,000 global bitcoin verification nodes (i.e. not a miner). No majority of these nodes are based in any specific country †.

You should probably better educate on bitcoin protocols/mining before you go spouting off unfamiliar stats.

†: #1)USA #2)Germany #4)France #5)Netherlands #21)China (via bitnodes.io)

> One of which there will only ever be 21,000,000.

This is a good property of something you want to be scarce, but it's a terrible property for money, whose purpose is to exist in the correct amount to keep stable money velocity in a growing economy. (Or a shrinking one.)

We can divide bitcoin into smaller pieces,

All it takes is 100% node concensus (e.g. a hard-fork for any non-agree-ers).

Hell, with Entirety-Approval, we could also increase the 20.99999999 limit (it's just a concensus-node rule; all that's needed is agreement).

As the operator of a node for over a decade, now, I do foresee a day when 1 Satoshi [i.e. 0.00000001 BTC] is no longer the smallest divisible unit... one day, perhaps beyond my lifetime, there may be mille- and eventually even nano- Satoshis.

One can continue Dreaming™

There's a very simple change to the reward function that fixes this: make block reward proportional to difficulty. There's a real implementation called Ergon. I wish everyone wasn't so poisoned against it now that it was possible to talk about interesting ideas without sounding like all the scammers.

The original people who were involved in Bitcoin had gold bug mentality and that directly created the early adopter advantage that makes Bitcoin so unfair.

Except anyone can start a parallel chain, e.g. DogeCoin. The only thing that makes BitCoin special is that it was the first and is still the most well known. It's value is entirely based on network effects and speculation. It's a speculative store of value which can be digitally transfered for a modest fee.

Fiat has the force of the state behind it. This has pros and cons, depending on perspective and use. As a currency, it's superior in many ways. As a store of value, it's in many ways inferior to BitCoin... Until it's not.

Bitcoin is too volatile to be a store of value and too slow and expensive to be useful for transactions. It is public so it is not even great for illicit transactions.

> Fiat is weak money

Try explaining that to the IRS when they ask for taxes in dollars.

> Bitcoin is a force of nature

Asteroids are also a force of nature. That doesn’t make them good.

> Try explaining that to the IRS when they ask for taxes in dollars.

If Bitcoin became the most recognized and popular currency, it is conceivable that tax authorities like the IRS might start accepting taxes in BTC. Of course it would require legislative changes, and lots of effort and work put into valuation and conversion, collection and storage, auditing and compliance, and public education.

Good lord.

Dumbest shit I ever did was cash out my IBEW 401(k), back in 2016.

"Put it all on black [bitcoin]..." dumbest shit I ever did.

Another datapoint that shows that LLMs will simply repeat what everyone is saying and happily give the exact wrong answer.

Can't have been trained on hackernews then, this is the most anti-crypto space I'm aware of besides /r/buttcoin. i'm also softly anti crypto so not criticizing, just pointing out you're literally in an environment where the opinion you're talking about gets eviscerated every time so it can't be what "everyone is saying"

HN just loves novelty, once crypto made mainstream news HN fell out of love.

The pattern has applied to Tesla/Musk, cryptocurrency, language models and probably much more I'm not aware of.

I agree about the love of novelty, but two of your examples (Tesla/Musk, LLMs) are also falling out of favor in mainstream news. Especially Elon since Twitter. LLMs too (or at least the hype surrounding them as AGI) have seen mainstream panning of late, in parallel to mainstream outlets

I don't think it's about novelty - heck people here will praise Unix and C regularly.

It's more that crypto initially had potential, at this point it's been tried and failed to deliver - at least from the value perspective of people here.

  at this point it's been tried and failed to deliver

A trillion dollars of value suggests otherwise.

Imagine if dollar bills appreciated in value thousands of times over by hiding them under your pillow.

Some people do more than just imagine =P

I turn 40 this year, and somehow have managed to entirely not touch my meager HODLings since 2018... it's the only reason I still earn USD (i.e. to not cash out any bitcoin).

I'm not rich, yet... but it's been a WILD. fucking. ride. (even just so far). Personally, I cashed out my entire 401(k) in 2016 and invested half of it into Bitcoin... which helps to not spend anything, viewing it as "my retirement, hit-or-miss..!"

I mean drug trade is also huge but you won't find many people praising it here (the second part of the sentence you quoted)

The drug trade is meeting a market demand. Most people I know have participated in it passively as buyers.

Boring and trite comparison. I'm assuming you've never taken ibuprofen?

fell out of love because it was no longer novel, or because the novel wore off and they realized it wasn't anything special?

I would be curious to hear what information it (ChatGPT) provided that changed his mind?

it sounds like it's more the non-human / non-embarrassing setup than the actual results. The same way I swear at tools or yell at clouds.

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