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Comment by spicyusername | Hacker News Reader

I've never understood the initial arguments about Bitcoin, no matter how many times they've been explained to me.

The block chain is, and always was, an extremely inconvenient database. How anyone, especially many intelligent people, thought it was realistic to graft a currency on top of such a unwieldy piece of technology is beyond me. Maybe it goes to show how few people understand economics and anthropology and how dunning-krueger can happen to anyone.

Now the uninformed gambling on futuristic sounding hokum? THAT is easy to understand.

That being said, I'm sorry the author had to go through this experience, the road of life is often filled with unexpected twists and turns.

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It's an ingenious solution to achieve a "trustless" currency that prevents double-spending without a central authority. Unfortunately, this solves the wrong problem. Spending money usually involves getting a good or service in return, which inherently requires "trust" (as does any human interaction). Your fancy blockchain is not going to help you if you order something with Bitcoin and no package arrives.

> Unfortunately, this solves the wrong problem. Spending money usually involves getting a good or service in return, which inherently requires "trust" (as does any human interaction). Your fancy blockchain is not going to help you if you order something with Bitcoin and no package arrives.

That problem already has solutions. The problems cryptocurrency is supposed to solve are, I want to buy subversive literature from someone I already trust not to rip me off, or for an amount I'm not worried about losing, without anyone requiring me to give them a government ID. Or I want to sell it to people without requiring them to give anyone an ID. I want to donate money to Wikileaks. I want to commission art or software from someone in South America who doesn't have access to US banks. I have the same name as someone on a list and I want a way to move money without the government ruining my life. I live in an oppressive country and I want to finance the rebellion, or buy contraception or some other thing which is banned by the baddies when it ought not to be.

It's for doing the things where the existing system fails you, not the things where it works. But it can do those things too. Cash works the same way. You're not worried about a restaurant stealing your money because by the time you pay them you've already eaten. You're not worried about Newegg sending you a brick with "lol" written on it instead of a GPU because they're a well-known company and if they did that it would cost them more in damage to their reputation than they'd gain from the theft and people would sue them independent of payment method.

You don't always need your trust in other people to come from the payment system when it can come from a dozen other things instead.

> > Your fancy blockchain is not going to help you if you order something with Bitcoin and no package arrives.

> That problem already has solutions

The solution to that problem is "the court orders the bank to send the funds back to my account", including all the way up to clawing back any funds the scammer spent. This is possible when the government controls the currency. It is not possible with crypto.

The only remaining purpose of crypto is funding crime. Some crime you might approve of (buying subversive literature), but that's dwarfed 100000:1 by ransomware, scams, and much more nefarious activity (drugs, sex trafficking, etc.)

>The solution to that problem is "the court orders the bank to send the funds back to my account"

I see this as a very naive statement. A big story in Russia - popular singer sold her appartment, then told court she was scammed to sell appartment and have sent all money to scammers. Appartment returned to the singer, court suggested the buyer to get money from unidentified scammers.

So much for court orders :))) Poor buyer has lost > $1M. There are over 3000 similar cases all across Russia. Appartment sellers get their apartments back in court without compensating buyers. This madness is going to be resolved someday, next will appear immediately.

Another story - a prosecutor's office tells that largest pasta producer in Russia was actually illegally bought from the government some 20 years ago. Boom, entire business goes to government (to prosecutor friends, really). I can go on and on, there are literally hundreds such stories just in Russia just in the past couple of years.

The point is - having certain independence from the government is good. For the majority of world population (China, Middle Wast, all Africa) government is not a friend but either an unpredictable force of nature or a foe.

Of course it's possible with crypto, it just means you can only deal with people with a known physical presence if you want any prayer of getting it back.

A judge can order a lien or seizure of their assets. I presume people that deal in crypto still want a car, a place to stay, some nice chairs or maybe to stay out of a cage when a judge determines they are willfully avoiding a court order to pay the money back.

Of course if they have no tangible assets or the entire operation is out of jurisdiction then that's an issue, but for a random joe are you really that worse off than trying to get the Chinese government to refund you for that knockoff you bought on aliexpress?

> It's for doing the things where the existing system fails you, not the things where it works. But it can do those things too.

Only as long as its use for the former doesn't outweigh its use for the latter. Trying to resist a government by using a digital currency is putting the cart before the horse. The dollar is an abstraction and an accounting convenience over the genuine temporal powers of the consensus that issues it.

> Only as long as its use for the former doesn't outweigh its use for the latter.

That's just a self-fulfilling prophecy. Obviously the early adopters are going to be the people for whom the existing system fails, but if you use that as an excuse to ban it or otherwise make it an insurmountable inconvenience for ordinary use through regulatory suppression then you're just preventing people from using it to buy lunch, not preventing them from using it to buy drugs. Which is useless and spiteful, especially when you're not going to address any of the problems that caused people to want it to begin with.

> I want to buy subversive literature from someone I already trust not to rip me off

Subversive literature printed on blotter paper.

Outside of buying sex and drugs the only uses for cryptocoins are, and always has been, ransoms, scams and gambling.

Okay, tell me how I buy something over the internet without tying the purchase to my government ID.

Your argument seems like "only criminals want privacy" which is a no.

>Outside of buying sex and drugs the only uses for cryptocoins are, and always has been, ransoms, scams and gambling

That is a very shallow take. There are real non-criminal uses for crypto that people in stable, wealthy countries often overlook. Millions rely on it simply to move money between family members across borders when traditional banking is slow, blocked, or outright inaccessible due to politics. In several countries, people use crypto to buy food, medicine, or basic goods because their local currency is collapsing or their banking system is dysfunctional, or their entire nation has been cut off from the global financial system as a decision of few politics persons.

Its fine to criticise the scams and speculation — there is plenty of that — but pretending thats the only use case ignores the people who depend on it for everyday survival.

> I want to buy subversive literature from someone I already trust not to rip me off, or for an amount I'm not worried about losing, without anyone requiring me to give them a government ID. Or I want to sell it to people without requiring them to give anyone an ID. I want to donate money to Wikileaks. I want to commission art or software from someone in South America who doesn't have access to US banks.

So literally 0.1% of the financial needs of the average person. What a revolution

> So literally 0.1% of the financial needs of the average person.

"Thing that solves some problems for some people doesn't solve all problems for all people" is not a very useful criticism.

It is when people are trying to act like Bitcoin is an enormous source of value to the market like several JP Morgans and not a Hallmark level of value provided

The blockchain and every transaction being public effectively disproves your entire supposed usecase.

But wallets aren't associated with a real person by default, unless it's created through some service that does KYC. If you can get anonymous tokens in an anonymous wallet, who cares if the transactions are public?

Depends on the blockchain. There are plenty of ways to have private transactions.

Bitcoin came about to solve the trustless component and provides weak anonymity.

Then Monero, ZCash, etc built on that to add privacy and anonymity.

If you use bitcoin nowadays and expect anonymity or privacy you are clearly mistaken but there are plenty of platforms built for privacy and anonymity on extensions of that same underlying technology.

Like basically every vendor that accepts cryptocurrency and values privacy/anonymity is going to offer monero as an option.

> You're not worried about a restaurant stealing your money because by the time you pay them you've already eaten.

But the restaurant is worried about you stealing their food and dashing off without paying.

Any transaction requires some level of trust to function. Crypto is a pipe dream for people who want to participate in society without confronting their pathological aversion to trusting and depending on others.

> But the restaurant is worried about you stealing their food and dashing off without paying.

Except that they serve you before collecting payment regardless of which payment method you use.

And even if they didn't, having the customer pay at the same time they receive the food isn't a trust problem for the restaurant or the customer, because the customer gets the food before the restaurant gets the money but the restaurant gets the money before the customer eats the food. And if someone comes into your kitchen to steal food without paying, that isn't really a payment system issue to begin with.

Fairly niche things for which the market size nowhere near bears the investment in the technology?

The investment in terms of speculation is primarily of interest to the speculators.

I’m all for bitcoin but your examples are essentially I want to do all these generally illegal things that I cannot within the current legal framework.

Some of them are, when the country you're in is oppressive. But having something that can do that is good.

And many of them aren't things that are illegal, they're false positives or limitations that the existing system doesn't care about because they affect minorities or disenfranchised people instead of anyone with significant political power. It's not illegal to have the same name as someone on a list. In the US it's not illegal to buy many things but people are still deterred from doing it if they know it won't be private. Prohibiting donations to Wikileaks was never claimed as an official government requirement -- probably because it would've been unconstitutional -- but the major payment networks still did it. Transferring money to someone in South America isn't inherently illegal, the existing system just makes it a pain through normal channels.

It does the things the existing system doesn't. Which isn't always because they're illegal. Sometimes it's just because the existing system sucks and doesn't care about you.

That (freedom of payments) may have been the idea. But there are two problems with it:

1. Payments which you can't make today inside a legal system are two types. And if you enable system you automatically enable both types. For libertarians that is a clear 100% positive. For regular centrist citizens, not so much. At minimum it's a topic for debate.

2. BTC and a few other tokens actually make this problem worse. Since blockchain is public, you can always trace "bad" or real bad payment to the source wallet. That i one issue, and another is that since BTCs are non-fungible, the tokens used in such payments are forever tainted. Even in the current anarchic and almost unregulated environment some exchanges are blacklisting some of the tokens, to limit own exposure.

> Payments which you can't make today inside a legal system are two types. And if you enable system you automatically enable both types. For libertarians that is a clear 100% positive. For regular centrist citizens, not so much.

The problem with this argument is that cryptocurrency now exists whether it's legal or not and using it for illegal things is already illegal. Drug dealers are committing a felony by selling drugs and if that hasn't deterred them then neither will making something else they're doing a crime too.

So all of the negative uses are going to happen regardless of whether you also ban the positive uses. At which point, what are you gaining by making it illegal or inconvenient for innocent people to use it for something that isn't otherwise illegal?

> Since blockchain is public, you can always trace "bad" or real bad payment to the source wallet. That i one issue, and another is that since BTCs are non-fungible, the tokens used in such payments are forever tainted.

People keep making this claim and it keeps not making sense.

You don't need someone's permission to send them Bitcoin. Meanwhile large exchanges keep billions of dollars in a single wallet and have single wallets that do billions of dollars in transactions over a short period of time.

So let's consider the two possible ways this can work: First, if you get coins directly from a tainted wallet then you get in trouble, but if it was several steps back then it doesn't matter. This is, of course, useless, because then people would just transfer the coins through a couple of other wallets first.

Second, any wallets that receive any tainted coins become tainted forever. Then immediately the vast majority of the chain is tainted because the coins have made the rounds through a large exchange at some point. Worse, it's pointless to try to defend against it by refusing tainted funds, because you can't actually refuse funds. Your billion dollar wallet or freshly mined Bitcoin can be tainted by any troll who sends you a dollar from a tainted wallet without your permission, and trying to treat coins as non-fungible is probably a good way to get someone to troll you like that.

Which gives you two alternatives again. The first is that all coins can be tainted by trolls, which will in practice cause exactly that to happen and thereby make the premise meaningless. The second is that you can try to say that it doesn't count if someone sent them without your permission, but now you can't tell if something is tainted by looking at the chain because it can't tell you which transactions were unauthorized by the recipient, and moreover you would then have a mechanism for getting dirty coins into a clean wallet.

In other words, when anyone can send you money without your permission, your options are "everything is dirty" or "everything is clean".

Reading your comment made me think of an ad i saw several years ago.

It was an ad that started off like a typical quality coffee ad, nice pictures of beans, people harvesting, some roasting etc. But than it switched to the topic if making sure that "fair trade" was really applied - switching to IBM Blockchain and claiming that through the use of Blockchain there is safety that everything went fair trade.....

And i just thought.... sure... your blockchain approves that those workers harvesting got paid fair... or does it? All it actually does is proof that someone inserted the information that they got paid fair. If it really happend? Noone knows. Therefor Blockchain is a representation of what you feed into it nothing more and nothing less. At the moment it touches real life - as in the fair trade/payment for coffee bean harvesting - especially in countries where alot of payment is still for dayjob/cash - there's no way the Blockchain can assure that everything went the way it is stored as.

Yes. The oracle problem. Because of it, the only blockchain use case is basically crypto (and other purely on-chain stuff, such as NFTs (well, they typically link to off-chain sources by URL, haha) and crypto kittens).

I have not seen this scenario, but I assume that a blockchain could more reliably and believably be made public, recording all the way down to the farmer, then could other technologies.

Blockchain enables transparency from the farmer to the consumer. It does not ensure that the farmer was not coerced.

To make it simple to understand:

For example, international conglomerate using exclusively slave labor inputs "these bananas are small farmers fair trade bananas" into blockchain.

That's it. That is the "transparency".

Right. That's a forgery - a lie. No blockchain could prevent that type of lie. What a blockchain could enable is honest transparency.

An attempt to pass off a lie as truth would be much more damaging to a company's reputation than would be just not addressing an issue. By addressing the issue and introducing a channel for transparency, the company is demonstrating that they are willing to put their reputation on the line.

I would agree that as a regulatory measure, this would not solve any problem. But as a self-imposed measure, it builds consumer trust.

I believe the “trustless” part is not having to trust a central authority that makes the transaction possible, not about not having to trust the person you are transacting with.

With crypto you don’t need to trust the authority that holds your digital money, the authority that executes the transaction, or the authority that manages the issuance of currency and other factors that may affect its value (interest rates, fixed exchange rates…).

That being said, I agree that in practice this is a rather niche problem to solve, and among the people with this problem, there are far more bad faith ones that good faith ones.

And it is never completely trustless anyway, for most crypto you need to trust a single dodgy implementation, the issuance policy of the founders hoarding the vast majority of the tokens, and whatever backdoors they have put in place for disaster recovery or other purposes. And then there are all the surrounding systems that make crypto actually practical to use, like exchanges, that are absolutely not trustless.

It’s absurd how the top exchanges keep their customers crypto in big joint accounts that the exchange controls and transactions mostly just happen in their closed database outside the blockchain, canceling out most advantages of crypto anyway.

Neither will cash. Thats what a third party escrow is for. You get that as part of what you pay for a credit card. Not trying to come down on either side of this i personally hold near zero crypto, your statement was just wrong.

Indeed, most societies ended up inventing a mandatory trusted third party escrow called a "legal system" as part of a "state". They usually issue hard-to-copy tokens, solving the double spending problem.

They also confiscate those hard-to-copy tokens if you acquire a sufficiently large quantity and attempt to leave the country with them.

I see a lot of hand wringing about this; but for 99.99% of people the banking layer and bureaucracy of modern monetary systems is a feature that protects them from fraudulent transactions, people stealing their credit card number, and businesses charging them and not delivering goods. These are generally good things.

Yes it is possible for the state to inflict violence on you, and if the state wants to, it probably will do so. Putting your money into internet tokens instead of state backed money will probably just get you tortured more until you give up the keys, or die. Crypto isn't some "one weird trick" to prevent the state from taking your property and possessions.

And put people in jail they catch making and using fake ones.

Putting absolute trust and surrendering too much agency to the state has been proven a mistake many times throughout history. Citizens need fallbacks when the state fails them. Concrete example where crypto achieves this: many trans people in places with an inadequate medical system or hostile government turn to buying gray-market DIY hormones online, facilitated by crypto.

Sure, but approximately zero of the actual crypto space/hype was built around facilitating this kind of thing. In fact for that use case, it would’ve been better if Bitcoin never got nearly as big as it has (since that lead to much more government scrutiny, all over the world). Ideally it would’ve gotten large enough that there were enough reputable-ish exchanges that you could move fiat in and out, and then stopped there. Like some sort of digital Hawala.

I also use crypto to bypass government prohibition on unprescribed self-medication. Is it still noble if I'm buying cocaine?

Most states still haven't created digital versions of these hard-to-copy tokens meaning that there needs to be an alternate provided by a 3rd party which is where cryptocurrency comes in.

The Fed has had a wire service (Fedwire) for banks, allowing them to transfer their balances on the Fed’s balance sheet to another bank during settlement, since before the dollar moved off the gold standard. It was initially done with literal telegraphs - not sure at what point it became digital.

It obviously has no pseudo anonymity, is literally the least democratized banking system in existence, and is subject to the government’s whims in a whole host of ways. But it is a digital ledger of massive sums of real dollars (the banks can ask for it in cash if need be), and you couldn’t really steal the money even if you managed to create an unauthorized transfer on some bank’s master account.

Most states have in fact invented bank transfers for that purpose.

The states (or rather the national banks of said states) are usually the ones running the central clearing system. That's the place where all the different banks report their net change in relation to all the other banks, and settle that change on their account with the central bank.

Believe it or not, banks don't ferry around cash to each other. It's all just numbers in a computer.

I love watching the HN comment hivemind speedrun the history of blockchain innovation every time this comes up. You just reinvented smart contracts on Ethereum, keep going :-)

No amount of smart contracts can solve the situation where one party says "I shipped you the widgets you ordered; pay me" and the other says "I received a box with a brick in it" -- you need some trusted third party to decide based on reasonable heuristics who is trying to commit fraud, based on e.g. is this the first or the tenth time this has happened.

That's exactly the point of smart contracts.

The contract can hold the money in escrow such that it can only be sent either to the seller or returned to buyer.

The seller and buyer can then both walk the contract through a state machine on agreement (i.e. confirm shipping, confirm delivery, potentially also confirmation for a return process) and when the buyer and seller come to a disagreement (ex: seller attests they've shipped the product and it should be delivered but the buyer asserts they havent/the tracking on shipping is invalid) or one of the participants is non-responsive for a certain amount of time then the contract moves into arbitration.

In arbitration one or more third parties then step in to serve as arbiters/oracles that decide in the favor of one party or the other and commit those decisions to the contract and the contract then derives consensus from those decisions and proceeds to the corresponding state/action of the contract (i.e. refund vs close).

Now your arbiters/oracles/third parties have reputations and you can reason about how trustworthy they are before you enter into the contract.

This means all parties can evaluate their risk tolerance and trust levels before entering the contract/on agreement.

-------

TLDR: Trust is inherent to any system reliant on the physical world. The point of smart contracts, etc is to formally encode those trust assumptions and the procedures of the contract in as trustless of a way as possible and to allow distribution of that trust across parties with most of the coordination overhead being automated/abstracted away.

And importantly smart contracts provide an extremely low friction happy path. In the happy path where all parties are satisfied, it's extremely efficient and responsive. But in every other path, the conflicts, incentives, and resolution procedures are clearly defined for all parties involved.

That’s just a bad contract. Now consider one that mints you an NFT

Smart contracts can only enforce things which happen on the chain.

No smart contract can prove you were not actually delivered your goods without trusting someone else.

Yes, it's called an oracle on the blockchain.

I love watching cryptobros speedrun the history of finance :-)

smart contracts need some link to reality that has to be.... trusted.

> Not trying to come down on either side of this i personally hold near zero crypto, your statement was just wrong.

Umm, you are agreeing with the person you are responding to.

The issue isn't that it solves the wrong problem.

The issue is that crypto boosters (including a few already here) claim it solves a whole host of other problems without thinking things through, kind of like some communists. Then if you argue enough they'll point out that things can be fixed ... but bitcoin is now indistinguishable from any other currency, other than its payment system that will no longer be widely used.

Like, you can make it easy to use if there are banks. And those banks will be subject to regulations. Boom, now you have banks and regulations.

You can get a loan from those banks. Now there's fractional reserve banking, with something like a virtual gold standard.

If it ever gets big enough, the fed can write bitcoin denominated bonds, and it's now prerty much a fiat currency, not even virtual gold.

Yes you still have a shadow sector where you can use bitcoin to buy drugs or dodge the taxman. But all the other supposed benefits have gone.

> Yes you still have a shadow sector where you can use bitcoin to buy drugs or dodge the taxman. But all the other supposed benefits have gone.

You use monero to do those things or zano or freedomusd and similar things for these but I didnt understand the conclusion of this statement

Basically you are saying crypto is just an less regulated fiat nowadays?

A legal curry of tech jargon just meant to replace laws and regulations?

Pretty much. People say it's meant to replace laws and regulations, but if it's successful then it won't.

The US has a large bitcoin strategic reserve. Banks offer bitcoin accounts (in some countries). You can get a loan backed by your bitcoin.

We're not yet at the point where you can get a credit card and 60 year home loan denominated in bitcoin, with the fed writing bonds or even issuing fiat to stabilise rates, but if it was more popular then is there any technical reason we couldn't get there?

What purpose does a bitcoin strategic reserve serve?

Your argument here appears to be "crypto is no better than fiat, because you can build the same systems on top of them."

What you put on top is not the core value proposition of cryptocurrencies? It's what's underneath that's different, that was always the point. Fiat currency is built on a foundation of gov't control, whether it's the physical currency or the money in your bank account. Cryptocurrencies, fundamentally, are under no such control. If you're stupid enough to go get a 5mil loan in bitcoin from a bank who is only holding 1.7mil, and the delivery of said bitcoin is a slip of paper saying "iou btc lol" that's not the currency failing you, it's you acting stupidly.

No; the argument is much closer to "if you don't make cryptocurrency basically the same as fiat, by building the same systems on top of it, it's useless to the vast majority of people."

That is just an observation, not an argument against building, improving, and using crypto.

Cryptocurrency doesn't need to do everything for everyone at all times to be a useful thing to have in the world. It only needs to be helpful to a subset of people, in a subset of situations, some of the time.

I'm happy paying by card for ~100% of my daily transactions, but I want cryptocurrency to exist should the need arise. The rise of authoritarian governments and policies across the world should've made that obvious by now. What's legal and perfectly moral today can become a crime tomorrow.

The financial system being under government control is the only proposition consistent with reality.

We, the people, make the rules. Replacing our democratic processes with finance controlled by the one with the most computing power, control of the software, or having horded the most of the tokens, is in no way desirable or realistic.

Even if the proposition wasn't borderline idiotic in the first place, there is no clear explanation how such a system should reward early adopters and allow them to cash out at a profit many times exceeding inflation.

It's all a scam.

I'm gonna first of all disagree with the notion that our entire democracy rests on control of the financial system, secondly point out that you seem to make some wild leaps about how decentralized currencies work, and thirdly ask how the hell you're getting the idea that early adopters would need to be "cashed out at a profit many times exceeding inflation"(Participation in the new system is the point of adopting it, how is this unclear).

Finally:

  We, the people, make the rules.

If you truly believe that, you are (and I realize this is not the level of discourse I should strive for on HN) beyond redemption.

> We, the people, make the rules.

Since when? We merely vote for politicians who promise to enact laws and regulations that are beneficial for us but they almost universally fail to do that, succumbing to self-interests and corruption.

If a government implements authoritarian measures that curb our freedom in an unpopular manner, "we the people" can't do anything about it. In a few years we may or may not vote them out, and the people who replace them may (or may not) do what we, the people, want.

You might have formulated things a bit unclearly, but I fundamentally agree that money, like everything else, should be under democratic control of the people. Not controlled by some crypto bros that are happy to interfere with the protocol if it suits them (The DAO hack, two 20+ block rollbacks of Bitcoin), but not if massive crime happens on it.

Ultra-capitalist libertarians are communists... riiiiiight...

btw I was banned from r/bitcoin Discord for saying that exchanges are banks.

Both are idealists, doomed to be forced to recreate worse versions of the solutions they think are problems if their dreams ever progess far enough to come into contact with reality.

Things like banks and governments. Or incentives and heirarchy.

I always thought it was actually an ingenious solution to elections. There's absolutely no reason that a driver's license can't derive a hash that can only be proven and not reversed (for identity); and provides a one-time contribution to a blockchain that contains your vote - which you then receive your block's information when you finish voting.

ANYONE can calculate the sums, anyone can verify and proof hashes, identity is kept secret, trust is installed with hash checks for each and every voter - etc etc etc.

It's certainly more airtight than the solution we have today - where trust and efficiency can both be compromised fairly easy.

Others have shown why most of your other points are wrong or don't need blockchain, but this is also important:

> ANYONE can calculate the sums, anyone can verify and proof hashes

This is completely false. In fact, at the scale of a country, almost no one can actually do this. 95+% of the population doesn't have the knowledge required to do something like this and understand why it works. And while in principle they could learn to do it, they don't have the time and energy and other resources to spend on this.

And this is a deal breaker, as having the population believe and easily able to convince themselves that their elections are free is an extremely important part of democracy, especially when things are not that rosy.

If you want that just use zero knowledge proofs and cryptographic accumulators. No block chain needed.

Typically one of the properties people want from elections is the inability to prove to soneone how you voted, e.g. to stop someone from going, prove you voted for my candidate or i beat you up (or dont give you the bribe). Your scheme wouldn't support that.

Who validates the driver's license?

How do you stop inauthentic licenses?

Perhaps some sort of central authority?

This is the main problem with most of the blockchain/crypto issues is that its all fine until a dispute, and then we all fall back to the state to sort it out (ie the legal system)

You're describing a transparency log, which doesn't require a blockchain.

What if one doesn't have a car and a driver's license?

> identity is kept secret,

Except to anyone who sees your driver license.

There are schemes for this, but it requires much more than just a hash. You need not only asymmetric cryptography, but some sort of Zero Knowledge Proof if you don’t want to be able to identify the person who voted.

you can also juststore hashes in a normal database.

Why should the method of payment solve that problem? A reputation system for sellers and service providers makes more sense to be entirely separate.

except currently the main usecases for cryptocoins are to buy illicit goods and services online. I remember when OpenBazaar was a thing. It even somehow managed to get an iOS app despite it being ridiculously easy to find listings for lbs of cocaine

> Spending money usually involves getting a good or service in return, which inherently requires "trust"

Indeed. Good paper driving the point home:

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

http://arxiv.org/abs/2110.09857

Blockchain is a very inconvenient database, for sure, but there is a good reason Bitcoin uses it. It had to solve to double spend problem and create a trustless p2p digital cash, while being censorship resistant and having no central authority.

Some people around a decade ago started using blockchain for everything where a SQLite db would have been better, because blockchain was the buzzword around that time, and they were charlatans who wanted funding and hype, or signal how cutting edge they are (kind of how the last two years everybody became an AI company).

It doesn’t mean that Bitcoin using blockchain is stupid.

> and they were charlatans who wanted funding and hype, or signal how cutting edge they are

Interesting that those same hucksters and shysters who spread the gospel of the blockchain immediately jumped on th AI bandwaggon when this was the shiny new thing.

Or, maybe, 40 years working in IT turned me slightly cynical.

LLM has more tangible benefits for companies and consumers.

If you mentioned NFTs though you’d be spot on

> spread the gospel of the blockchain immediately jumped on th AI bandwaggon

There were also a few months of super conductors, don't forget :-)

Skipped the metaverse, slotted between the two

It may be money, but it is definitely not cash. Cash is completely anonymous, BTC is not.

Cash is not completely anonymous, but hard enough and not enough parties track it. Bills are serialized and you could take photos of coins and likely identify them based on scratch patterns.

Still, whole thing is saved by not enough people actually tracking it to that level.

And on other side, BTC tracks every single transaction ever. Which is also detriment, that is we keep everything stored forever in lot of places... Which kind seems massive waste.

It's stupid because blockchains don't scale. In most other respects they're quite clever.

In theory a L2 network coukd solve the scaling problem, but every time I've looked at L2 solutions theve had terrible UX.

The anonymity aspect of it always confused me. If anything, bitcoin and almost all other cryptos are the ultimate surveillance state currency. Every single bitcoin, no matter how many fractions it is broken into, is traceable through every single transaction it has ever participated in, all the way back to when the coin was first mined.

Early on bitcoin was thought to be pseudoanonymous. Like sure, it's all public, but what's public is "bc1qxy2kgdygjrsqtzq2n0yrf2493p83kkfjhx0wlh", not "John Smith, age 43, living in Florida".

Then two things happened: people figured out that it's actually very easy to connect the dots, particularly if somebody ever does something like: "donate here: (hash)".

And, Bitcoin is hard to get into. As soon as difficulty went up, making yourself some went out of the window. Now you have to buy it. And its characteristics mean that anyone selling any online wants to be really, really sure of your identity. Thus near everyone ends up creating accounts at Coinbase or wherever with very accurate identity verification, and now we've got real names connected to those random looking numbers.

That visibility could be considered a feature for some use cases. We could use more transparency in many areas, particularly government.

When you start transacting on Bitcoin Lightning network (which is essentially sending pre-signed bitcoin transactions in a smart way, without submitting them on the main chain), then you no longer see each transaction. Lightning introduces decent privacy, not perfect, but decent.

It's also not guaranteeing double spend protection (especially not passively), and is not actually using Bitcoin, except occasionally and optionally.

Technically there is no such thing as a bitcoin. Just unspent transaction outputs. Those get spent as an input of a transaction and then are gone forever. There is no concept of the output of a transaction being the same "bitcoin" as what comes from the input of the transaction. This means if you had 2 inputs and 2 outputs of the same amount there is no way to trace which input became which output. At best you can find which outputs potentially came from an input.

That is called tracing. It’s also not hard - every node does it to verify blocks.

When blocks are verified it just needs to validate that sum of the outputs isn't more than the sum of the inputs. It doesn't care about tracking what went where.

Except I can literally pull up a full node and see a wallets current balance - which is because it traces all the transactions through the blockchain, verifying all of them.

Literally the only way anyone can see their wallet balance is by doing this.

It isn't anonymous. Anybody who says bitcoin is anonymous either doesn't understand bitcoin or doesn't understand anonymity. It's pseudonymous.

But you (theoretically) cannot know who mined the coin, or who is actually the holder of the coin, thus the anonymity. Though currently this is getting restricted as governments require more ID verification from businesses dealing with crypto, which links up your coin to a real person.

The correct term here is pseudonimity - you know the immutable, stable wallet id of who mined the coin, which is a pseudonym for a real person. Anonymous systems are ones in which it's impossible to associate an identity with the work item.

For example, if I send cash through the post office, and I don't sign the envelope, that is a form of anonymous payment - it's impossible to tell who sent the payment (assuming there is no footage of the post box where I deposited the envelope, and I left no DNA on it, etc). If you receive a second payment, it's impossible to tell whether it came from the same person or someone else.

How is the serial number on cash any more anonymous than bitcoin addresses?

Because it's attached to the bill itself, not the owner or the wallet.

If I give you a dollar bill with the serial number 100100, it's impossible for you to prove that bill came from me (unless you have forensic evidence of me giving it to you, of course - but that's equivalent to having photo evidence of me typing in my private key to a BTC wallet) . If you find a dollar bill on the street, it's now yours, you can't know anything about its previous owner.

In contrast, a BTC address is a unique identifier for someone who owns the BTC. The blockchain stores all addresses that it ever interacted with, so even if you create thousands of wallets, they can all be-anonymized quite easily if one is, as you can track how money was sent between them.

You are confusing anonymity and privacy. Bitcoin can be anonymous, but not private.

> The block chain is, and always was, an extremely inconvenient database.

That's the entire point when the goal is to achieve a public, immutable, decentralized ledger that prevents double-payments without needing to trust a third-party to adjudicate properly. It being inconvenient makes it exceptionally difficult to edit history.

Whether that's a useful goal is less clear when nearly all of modern society relies on trusting parties at some point along the way (will the thing you bought be delivered to you? Will the service you purchased actually be rendered? etc).

> Maybe it goes to show how few people understand economics and anthropology

A financial process being unwieldy hasn't really been an issue historically. Why are most publicly issued stocks in the US owned by Cede and Company for example? No one that has stocks really thinks about the underlying system (the fact that they have contractual rights to stocks rather than actually owning stocks), as long as it ultimately works.

Where things have broken down in my opinion is how centralized the systems have become with massive exchanges being the only realistic way to interact with them. In the same way that a bicycle wasn't designed to be a moving van, these systems weren't designed to be centralized. With that being the reality though, the entire blockchain backbone is mostly useless, and at that point it really is an inconvenient database.

Crypto makes perfect sense if you just understand it's for doing illegal stuff.

No moral judgement, but the only viable use case for the blockchain is doing things with money that the authorities don't want you to do.

Other than that, no, there is no use for a distributed database because doing financial transactions with people you can't even trust to abide by the law is generally a bad idea.

I am a dual citizen. I wanted to buy a condo near my parents where I spend my summers with my family. I have never in my entire life felt like a criminal more than trying to buy something, with the money I made with my wife, going through regular financial system. after weeks of feeling like a criminal over coffee with my cousin who owns the company that was selling me the condo I was like “can I just fucking give you two bitcoins on a thumbdrive…”

I would never own a crypto but working with the current financial system can make you feel like a criminal more than crypto at times… :)

Foreign property ownership is not like buying an Armani bag when you visit Italy. The financial regulations are complementary to the legal ones. Besides, even if you just sent 2 bitcoins, what about all the remaining documentation? It's not gonna fill out itself

And this is [part of] why Dubai has the highest per capita influx of high net worth individuals.

You can call them a dystopic theocracy, which is a bit true, but you can literally just fly over and buy a condo in a neighborhood with basically zero violent crime, with 2 bitcoins with essentially no questions asked.

Dubai is the Bitcoin of cities, so I guess the example fits.

Fine, let's just give up civilization and praise the disneyland for oligarch and rich brats, build and maintained by slave like labor.

What made you feel like a criminal? Buying a home is fairly straightforward and has almost no state verification of any piece of it, at least in the US.

Was it something the state enforced, or something being done by the agents of the transaction (ie the mortgage company)?

> Buying a home is fairly straightforward and has almost no state verification of any piece of it, at least in the US.

you mean the purchase deed isn't registered anyplace?

or you mean that the mortgage company didn't do a credit/background check on the buyer before granting the mortgage? Which includes some level of providing a state-backed identity card?

Or do you mean it's easy to buy a house for cash without hassle in the US? Just a suitcase of $100 bills? I'm assuming you've tried this recently?? (and the house cost more than 150K?

Only one of those things is a state enforced requirement (the deed) and everything else are system requirements that do not get solved with bitcoin. What mortgage company is going to loan you a million dollars ("in btc" whatever) without figuring out if you're a good risk? That's not the currency of choice making you get cross examined, it's the nature of the thing you are trying to do.

Maybe the suitcase of anonymous cash bit is easier but only because you're doing that to dodge taxes... In which case feeling like a criminal might be a bit on point.

That is because you’re working in the same financial system.

Now try buying some property in South America. Or Eastern Europe. Or Asia.

Be prepared for a similar experience OP documents.

It's incredibly common in Argentina to buy a property with a suitcase of cash. In fact I think it's about the only way it's done. Argentina has a tax on bank transfers, plus by various measures the tax on profit of business can be above 100% so no one actually uses the traditional finance system for more than a minority fraction of their use.

Just owning this much money feels criminal. Suddenly a lot of institutions start asking questions about where they came from.

If your funds are clean there is zero reason for the (unfounded) anxiety. Just follow through the motion.

A local agent on a flat fee will probably make things easier.

I bought a vehicle early this year. In the UK we have supposedly instant BACs transfers.

However because opaque anti-fraud stuff, that I am not informed about, I was stuck in the middle of a field trying to convince someone in a call centre that the car I could see with my own eyes (and I had done all the appropriate checks) does indeed exist. This whole process took almost an hour because their anti-fraud team has a two hour response time.

There are obstacles in the banking system that make doing legal transactions difficult.

> If your funds are clean there is zero reason for the (unfounded) anxiety.

Nonsense. Your funds can be frozen with no recourse even if you're innocent. No-one will tell you what you supposedly did wrong. Everyone who hears about your predicament will make up reasons to believe that you'd done something wrong because they want to believe that the system doesn't make mistakes.

Most token holders use exchanges, where freezing accounts and just keeping the tokens is a daily occurrence.

That's not something solved by cryptocurrency in its current form.

> after weeks of feeling like a criminal over coffee with my cousin who owns the company that was selling me the condo I was like “can I just fucking give you two bitcoins on a thumbdrive…”

and he said no, because you also can't do this. Bitcoin has not solved any problem there.

Actually, in many places it would work fine. Some it would be immediate jail time.

In the places it would work fine, so would a traditional transfer, though. Again, Bitcoin hasn't solved any issue here.

This utility is what helps stabilise its value, but the side effect of that is that it is a good store of wealth. These two facts make BTC go up. People say Bitcoin isn’t used for anything when in reality it’s being used every day to store and move wealth between big financial players (many of them being organised crime). Why wouldn’t they continue using this useful technology and therefore why won’t its value hold/increase? Is it moral to piggy back off this? That’s for you to decide. It’s worth considering that many major banks have been involved with organised crime since forever…

You could also say that the bad guys are "piggy-backing" off the good people who hold it.

What should you do? Censor their transactions? Who gets to say who gets censored?

Like democracy, bitcoin is for everyone, including your enemies.

You're clearly someone who doesn't agree with the quantitive theory of money.

> Crypto makes perfect sense if you just understand it's for doing illegal stuff.

What happens when a country's banking system fails?

In what circumstance could the banking system collapse but leave the electric grid and all other infrastructure which supports the internet intact?

The internet is more resilient than that. I wouldn't want to live in a country where the banking system has collapsed, and one of the reasons is because I expect that this correlates with unreliability of the power grid; but you can run a lot of useful pieces of software on a computer powered by solar panels and batteries in the wilderness with a satellite uplink, including a bitcoin node.

Ah yes. And everyone in a country that suffers a banking collapse lives in a wilderness with solar power and a sattelite uplink.

One where the president prints trillions of dollars to bail out his AI cronies.

++1

Venezuela?

Do Venezuelans _actually_ have much documented usage of crypto, or are they simply using foreign fiat like the USD and Euro?

Yeah and even more crazy: all other applications of blockchains are even more stupid. Haven't seen another application that wouldn't have been better, faster, cheaper implemented in a "classical" way.

Agree. Blockchain is good for nothing but crypto (by virtue of the oracle problem, among others), and crypto is good for nothing but crime.

It's funny, people speak as if decentralisation was a good thing, but very few bother to explain why. Typically, if you dig into it, they cite advantages that you can already get from good old permissioned distributed tech. The only thing that decentralisation gets you (at enormous cost) is that it's harder to regulate.

This was already evident 9 years ago: https://medium.com/@kaistinchcombe/ten-years-in-nobody-has-c...

Gambling.

You can do gambling easier without blockchains. (Not that you should do any gambling at all, on neither side, if you ask me.)

Not really, because the government freezes your bank account and takes your money.

> Haven't seen another application ...

You need to get out more.

Git

Am I misinterpreting you or are you saying Bitcoin would make a better, faster, cheaper Git?

If you are, I am already laughing.

They're saying git would not have been better or faster or cheaper if implemented in a classical centralized way.

Isn't git most of the time used centralized? And that offers better user experience than doing it some decentralized way? It seems to me like most prefer centralized use of git. Be it private server or some large server.

If we compare the traffic of Github vs Bitcoin, Github is likely doing 1,000+ writes per second and Bitcoin is doing what, 5-7 maybe higher with specialized stuff?

Github is nowhere near the world's "central and only" service for Git, so what am I missing to not laugh about?

The downside of a global distributed database (no matter what) is the speed of light, if you need ordering in any transaction you are in trouble, and no classic service requires that for all transactions in its scope, we figured out partitions, row locks, and shards a long time ago.

That's the thing about blockchain/"distributed". They are such vauge terms they can apply or not apply to anything depending on what point you need to make in your argument.

Git is nice distributed tech. It's permissioned, though. Good old permissioned distributed tech. Which predates Bitcoin (obviously, as git is older than Bitcoin).

Yeah, and I always say git with commit signing is a cryptographic block chain in the loosest sense. But in this context I was of course referring to the proof of work/stake BS. In git the proof of work is the work you put into writing the source code. There is actual value in it, not just fictional speculative value.

Simply put:

Bitcoin was to be an alternative to FIAT, but it ended up being nothing more then a meme-stock that consumes more energy than Poland or Argentina.

Its sad really. But the greed in people turned it into shit.

A different metric of comparison isn't Bitcoin's energy consumption compared to other countries but compared to the existing banking system it's trying to replace, which burns more energy than Bitcoin and allegedly burns more energy funding wars with fiat. Mining gold instead of Bitcoin burns more energy than Bitcoin too.

Compared to that for energy consumption, Bitcoin is superior really.

> compared to the existing banking system it's trying to replace

I don't think it's appropriate to compare it to the existing banking system (whose featureset goes far beyond payments and managing account balances).

It's appropriate to compare it to existing payment and account systems. And on that front, compared to e.g. Mastercard, there's no way Bitcoin is more efficient. TXs/watt, $/watt, however you want to measure it.

> there's no way Bitcoin is more efficient

No way? You studied this personally and can prove it?

Transaction Fees On Bitcoin Lightning Network Are 1,000 Times Cheaper Than Visa And MasterCard

https://www.binance.com/en/square/post/447705

I have no numbers but i would assume the global "FIAT market" is orders of magnitude larger than bitcoin, so ofc it consumes more. I would want to se a chart of how much 1USD/EUR "consumes" compared to 1BTC.

You should not compare bitcoin to "the banking industry", but instead to say a stock. Apple is worth more than the entire crypto industry, but for arguments sake lets say they are the same.

So you should instead compare bitcoin to APL stock. How much energy is APL (and APL alone) stock using? This is hard to measure, but probably a fraction of a fraction of the bitcoin energy use.

A bitcoin transaction costs around $100 (in invisible money supply increase, paid by everyone that holds Bitcoin, but received by the miners).

There's no way a fiat transfer costs that much.

The comparison is moot because Bticoin barely functions as a currency. Banking system provides a lot of other functionality beyond just money.

I never understood why bitcoin is winning popularity/pricing over ie. ethereum - which doesn't burn energy anymore and you can actually do programming on it, not just moving money from a to b.

Because it's based on narratives. Bitcoin has the strong narrative and the "network effect". Because bitoin keeps surviving, the narrative reinforces itself. At this point surely most people know, even if they're unwilling to admit or fooling themselves, the utility value is basically dead.

The utility value is now a pure gamble that a person tomorrow will pay me more than I paid for it today, thinking that a person in the future will pay them more than they paid. And that can be a powerful enough narrative to keep it going.

But if bitcoin disappeared today, 99.99999% of the world wouldn't even notice, that is how little of a problem it solves.

Anyway, the point is, imagine the scenario if ethereum overtook bitcoin in value. What will this actually do to the ecosystem? In my view, it would be catastrophic to the value of all coins, because it suddenly destroys the narrative of a "store of value" (the last lingering narrative). Any other coin could just overtake ethereum, and out of all the thousands of coins, which one? At that point, I think the whole thing comes down.

One interpretation of this comment, if viewed from an adversarial angle, is that comments like this, although perhaps not this comment specifically, are designed to dissuade people from buying crypto days before a bull-run starts.

Accurate data illuminate a lot of things.

I would benefit enormously from people buying crypto to keep the price going up. I've owned bitcoin for 9 years. I bought it when I realised that the narrative was strong enough to overcome any technical arguments and I wanted to profit from that. One day I'm assuming it help me retire.

(I just wish I'd bought more)

Bitcoin has a longer proof-of-work history, which is the only thing that secures any blockchain.

Stake also secures blockchain and doesn't waste energy.

One theory backed with proprietary data is that it's because bitcoin was created by the US government and money printed by the Fed goes in bitcoin so the government will one day pay its projected $113T of debt by dumping on everyone.

To understand the initial arguments, look no further than the Genesis block, which includes this text:

The Times 03/Jan/2009 Chancellor on brink of second bailout for banks

In many rich countries, all signs point to nasty inflation for the foreseeable future. Bitcoin is inflation-proof because there is no central bank that can print more Bitcoin. Having a secure system with that property means accepting some tradeoffs in terms of usability and efficiency, compared to a centralized database.

> there is no central bank that can print more Bitcoin

It turns out this doesn't matter: you can't hear the inflation argument over the volatility. The amount of goods you can buy per Bitcoin changes dramatically on a month by month basis. It's just that everyone loved it while it was going up, but that's not actually guaranteed!

Also, you can't print more Bitcoin, but that doesn't matter: you can fork it (people have, BCH), or you can just endlessly spawn new token chains, or you can have things which both sides regard as abominations but are somehow immensely popular: stablecoins. These give you the legal stability of crypto tied to the price stability of the dollar. It turns out that what people actually wanted was several hundred billion dollars of virtual poker chips.

but there's no compounding interest. no dividend based on future cashflows.

holding stocks of a diverse index seems better on the long run, no?

Check out how $100 put in bank deposits or S&P500 have done versus gold over the last 50 years. You will find that these do not generate real returns when measured against sound currency either.

I'm not sure how you reached this conclusion. I did as you suggested. $100 invested 50 years ago into gold would be worth $3000 today. $100 invested into the S&P500 50 years ago would be worth $6870.

https://www.macrotrends.net/2324/sp-500-historical-chart-dat... https://www.macrotrends.net/1333/historical-gold-prices-100-...

$100 put into S&P 500 in 1975 would be about $7500 today, or about $1250 in 1975 dollars.

$100 put into gold in 1975 would be about $2600 today, or about $440 in 1975 dollars.

S&P 500 would have had 3x the returns of gold.

Usually, yes. But the government can still tank the economy in all sorts of ways. It happens more frequently in some countries than others, but it can happen anywhere.

Indeed. The crypto crowd seems to assume that the options for your savings are cash or bank deposits, or crypto. That's nonsense. A balanced portfolio of stocks (with some bonds maybe to reduce vol and improve your Sharpe Ratio) handily beats inflation. Heck, even bonds alone have mostly had positive real yields.

This also supports and funds the productive economy, unlike crypto.

Not using your cash also helps the economy. More exchange of money means more velocity means decrease of value of the money.

By not using your cash (by for example holding crypto) you’re making the money that circulates higher value

Until you hold a passport of one of the US enemy states, which are plenty of and have permanent risk of getting your account frozen and money stolen.

Crypto doesn't have this issue.

If you only care about inflation, real-estate in desirable locations is also inflation-proof. You can't print more land in San Francisco, London or Hong Kong.

Clearly crypto is more accessible to more people than is San Francisco, London, or Hong Kong real estate.

Yeah but you can also have a disaster strike in that place (say, a nuclear accident) that will obliterate your real-estate value. Or general society changes that will make a city much less desirable (see the "rust belt"). Of course, nothing is without risk - so in that sense, it's not surprising that real-estate has risks. But that's what I wanted to underline, nothing is "inflation-proof". There's no guaranteed way to preserve wealth (much less increase it). None.

While there is no bulletproof way to preserve wealth real-estate is one of the most sound one compared to others. A nuclear accident can be insured and general social decline happens over many years or even decades that gives plenty of time to react.

Way less liquidity and way more administrative overhead, but sure

At least for me, the big selling point was being able to send money fast and relatively cheap. Back then you either had PayPal, or wire transfer. PP could easily freeze and hold your money over whatever issues, while bank transfer was slow.

And, mind you, I only purchased/sold legal stuff.

Yep, that's what I thought nano had done:

https://nano.org/en

instant, fee's a fraction of a cent, I thought this was it, international payments that don't rely on visa/mastercard!

and then it just went no where :\

Turns out nobody is actually interested in transacting with crypto otherwise Nano would have been a winner. I also love Banano, a Nano fork where you mine by folding proteins. Work that has actual value.

Because in practice services like TransferWise solved this problem using fiat currencies with fees low enough not to make it worth bothering with crypto.

I duno, I still can't make a payment on the net without Visa or Mastercard, still a problem to be solved to me

Looks like other people still trying to solve as well:

> Earlier this year, Coinbase changed online payments forever with a new protocol called x402. But could this technology really usher in a new age of 'machine to machine' payments? Let's run it...

https://www.youtube.com/watch?v=S6wc6yvoZLY

For larger amounts it makes sense to use the bitcoin rails for international transfers. I'm doing bank to bank international transfers and using bitcoin saves around 3% compared to Wise and you get the money immediately (or within 1hr, depending on what you use).

Man they don't solve it for me. They charge much more for using a credit card vs a checking account, especially when going across currencies, and I consider it pretty dumb to share my checking account information around when I can control things much more easily with a credit card. And literally any fee they charge is more than what nano charges. It's just that nobody takes nano :(

Every time I try to use TramsferWise, I end up jumping through KYC hoops for hours - days. Sending crypto is much simpler and faster.

Almost every cryptocurrency starts out with low fees and then fees increase when it gets popular and runs into processing limits.

Okay full disclosure, I believe in stablecoins only but what are your thoughts on nano. It has zero fees and I worked using its zero fees to store data/timestamps in it by nanotimestamps

Personally I prefer usdc on polygon

Nano is pretty amazing, but, yeah, the interest is in profit not the technology, so it's fading into the background. Pity.

This is only a selling point in places like USA. Even before moving to the USA 13 years ago I was able to send money via wire transfer domestically for free, and it settled within 1 business day (to me that's fast enough). IIUC nowadays intra-EU wire transfers also are free (but I kinda view them as "domestic"), however I'm not sure how quickly they settle. The way how banking worked in the US was definitely one of the biggest culture shocks I've experienced when moving (and not in a positive way).

Less than 10 seconds for SEPA Instant. Still some stragglers, but I have understood coverage starts to be pretty good.

....coverage is obliged by ECB since of 01.10.2025 :-) (for 100% implementation, some banks had earlier already the option to receive them but it was not widely used as nearly no one was able to send before the regulatory forces stepped up to enforce support for it)

well actually, you could build a network on top of that (expensive) database... hmm... it's kind of starting to sound like SWIFT.

but you have: no rollbacks, no refunds, no governance to stop bad actors you do gain: immunity from government decisions, theft by state and independence

as unpopular as it might sound like, bitcoin is great for criminals, yes you could say "who decides what is a criminal", well let's make this simple: people who murder and steal.

edit: by "murder and steal" I generally mean something that is "lawfully and/or morally disallowed"

> bitcoin is great for criminals

Never understood this soundbite, and I used to be a criminal. Bitcoin is horrible because literally everything is tracked, with minor benefits compared to just dealing with cash or still the best, using the banks you know who look to the side when you need to clean your cash.

The tricky part remains to wash the money, and bitcoin doesn't make that easier, it makes that part harder. But "Bitcoin is great for criminals" is a nice little signal that the person echoing that soundbite probably don't actually know what they're talking about.

it becomes significantly easy to store money and launder it whenever, it's what all indian scammers do: get it out of the banking system into crypto

> and launder it whenever

Again, there is no "LaunderBTCAndTurnIntoUSD" function in the Bitcoin protocol...

> get it out of the banking system into crypto

And please describe how you do so without involved A) banks who look the other way and B) registered companies who handle the on/off-ramping from/to BTC.

When people argue that it makes it so much easier to launder money, please spend at least a minute to actually figure out how that will work in practice, and you'll understand that Bitcoin makes the laundering HARDER than what it is with cash, not easier...

Ok you seem to be pretty outdated I won't blame you for that so I'll catch you up to speed and when I refer to bitcoin I generally refer to any tier 1 crypto currency:

There is actually a BitcoinToUSDPipeline. The real problem is that the exchange crypto transactions are NON REFUNDABLE as you know, that means once it leaves the banking system (via making victim register a coinbase or kraken account, or register it for them using their credential information and compromised webcam for liveliness checks) you have an unlimited amount of time to do whatever. There are also various real life ways of bitcoin atm, using card to buy <1k giftcards (no kyc).

Okay you have your money in bitcoin, now what? Well, welcome to dex - decentralized exchanges. Using smart contracts you can wrap your btc into eth-btc, using etc-btc you can now trade it to any other crypto currency no strings attached and the most popular currently is tron.

Tron has tons of merchants which will simply swap from a to b from two different liquidity pools and those transactions are done off-chain and exist only on their database, since there are usually dozens of transactions mixed it becomes increasingly difficult to continue your investigation without having to use the slow legal route which is especially difficult if the merchant is offshore often ending up in a dead-end, at that point only INTERPOL really has the power and resources to trace it. Liquidity pools are used for perfectly legal reasons and it is not like tornado cash.

Now you have two choices: just spend the money directly (in Georgia (the country) everyone accepts crypto), buy giftcards or if you don't really care and aren't doing anything interpol would be interested in just deposit to binance and withdraw to your bank account, depending on your local government they might not even care.

1) I mean, also great for anyone who sells stuff on places like Craigslist, where the recommendation is to take cash? Taking the standpoint "the consumer is always always correct and refunds should be trivial" sort of works for larger companies that can amortize scams, but you enable a different form of crime (fraud) by adding that feature to small-scale transactions. Hell: many of the modern payment rails you now have to use to buy stuff from vendors at fairs don't have user-accessible refund mechanisms, including Zelle.

2) To the extent to which you really want those features, they are no different than any other in their ability to be built on top of a decentralized database, but now can be done in a way where the rules can be open and anyone can experiment: as an example, you could put your funds into a smart contract that only can transfer money to other people through an escrow mechanism which holds onto the funds for a net-30 period and pays a small fee to the protocol; you then could have the people who own the protocol governance token (and would receive the fees) vote on members to sit on a refund arbitration council (which needs to be somewhat fair or people will stop using the network, crashing the fees they are paid, aligning the incentives in a similar manner to a centralized business doing the same).

> let's make this simple: people who murder and steal.

So many Western governments and their elected officials? The US? Israel?

What about the people in international waters Trump keeps bombing and calling drug criminals? I'm so confused about how you're able to make the delineation of those who "murder and steal" to mean criminals, given that such a distinction puts the government square in the spotlight, and many of the people whom they spend relatively insane amount of resources to target target: drug users/pushers, political activists, immigrants, etc.

Distributed ledgers are good for... targeted activists, people who don't want the government to have the power to arbitrarily weaken their buying power, people seeking safe drugs and medicines, just about anyone needing to be anonymous, and regular people who don't need to justify their economic transactions or risk their wealth being diluted. This "criminals" angle is just farcical, ignorant, and also very tired... you're not the first to suggest it.

you could call them criminals, many do, activists are also criminals from the view of politicans I generally just used "who murder and steal" as a basic notion of "it's good for people who are in trouble with the law"

Legal and morally right are two different things though.

criminals are not always bad people: https://www.youtube.com/watch?v=VrFs2_uhz-o

and to break it down lawfully or/and morally bad:

  lawfully bad, morally bad = bad and crypto is one of the major tools in your arsenal

  lawfully bad, morally good = neutral, but you are a prosecuted criminal, crypto is helpful for you but there are alternatives

  lawfully good, morally bad = bad, but not a prosecuted criminal, crypto is not that useful for you

  lawfully good, morally good = you are not a criminal, crypto is not that useful for you

Laws at least have the advantage of being written down. Morals are different for everyone and not constant in time even in a single individual.

>I've never understood the initial arguments about Bitcoin, no matter how many times they've been explained to me.

>Proceeds to provide their opinion.

At this point you are wayyyy behind schedule, even if you hold an anti-crypto position like me, you recognize the benefits of Bitcoin, otherwise you would claim that even the most popular/first/best coin is completely useless.

I'd invite you to seek to understand the initial arguments on Bitcoin instead of trying to convince us of your views on Bitcoin. Like, the topic is very deep and you are stuck in the first step.

Ideology can be blinding. It was never about the technology.

It might have been for first few months. And then it kinda got into becoming rich or kings of future world...

Or a more charitable explanation; the ecosystem was initially filled with people caring about the ideology and technology, but as money got involved, people who cared more about accumulating money started taking over more and more of the ecosystem.

The initial people still exist, although they are few compared to the money people who've infected the ecosystem.

People cared about money from the beginning, firstmost. You do not create such a new kind of currency if money is not what you care about.

As the original article says:

> The cypherpunk ethos attracted me. I was enamored by the whole idea of Bitcoin being a private bank for wealthy individuals. Being able to walk across the border with a billion dollars in your head is and always will be a powerful idea to me.

People sure had a "cypherpunk ethos" but they built cryptocurrencies, not tor network or signal. The author's dream was to be rich and untouchable. Imo the author is not that far away from the ethos of modern crypto as they think they are.

> Now the uninformed gambling on futuristic sounding hokum? THAT is easy to understand.

Yes... During a hype rush, sell memes.

https://en.wikipedia.org/wiki/Extraordinary_Popular_Delusion...

Apparently, some fraction of the population is willing to believe whatever makes them rich.

> The block chain is, and always was, an extremely inconvenient database.

It's the cost of it being out of control of any single party. Efficiency and convenience are worth nothing if you have a system someone can just wipe out or manipulate.

Have you experienced hyperinflation in your lifetime? Have the generational assets of your family been seized by totalitarian government? I think you'd understand better if you lived through events where your wealth very painfully was just an "entry" in the efficient system someone else controls (badly).

I can send a billion dollars to someone in Uganda with no intermediary or oversight. This was not only impossible before but most likely would never have been a possibility. Being able to hold massive amounts of value in the ether and control it from anywhere, you don’t find that impressive? Sure, this is mostly used for nefarious activities, but let’s not pretend it’s solving no problems. It’s incredibly difficult to transfer money into a third world country without incurring massive fees, unless you use crypto.

Okay, let's image that I've sent you 100 BTC. Now, can you tell me how exactly you would convert the "money" I've sent you into bread and milk?

Because, most of the time people say that just in the context of the blockchain. In that sense I can also say that you can control vast majority of money by just having knife and glove skins in Steam (for the game Counter Strike). You also can trade/send/receive. But the moment you decide that you want to convert to "food" all sorts of problems arise that are worse than what banks offer.

I'm telling you as a person who received salary in crypto while living under sanctioned country

There is no conversion of money into goods, only exchange of money for goods.

I'll give you some bread and milk for 100 BTC if you want. I'll even fly to your country to personally deliver them to your house.

Yes, you convert them into bread and milk the same way you convert little pieces of paper into bread and milk: You find someone who's willing to give you bread and milk in return for them.

Good luck finding someone who will accept btc for literal bread and milk

How exactly can you send a billion dollars to someone in Uganda using Bitcoin?

Purchase and sale of bitcoin is highly regulated and obviously tracked - and the blockchain itself provides little privacy - I’m guessing state-level actors have already attached identities to most of the wallet addresses out there.

So if I hand you access to $1 billion dollars - cash or in a bank account - how could I practically get $1 billion dollars to an individual in Uganda so that they could spend the dollars?

There are people that hold billions in Bitcoin and they could send it to someone in Uganda without friction, do you dispute this? You’re being pedantic, stick to the hypothetical. Change the example to $1,000 and yes it’s trivial to do and will be cheaper and quicker than using traditional systems.

A lot of countries don't have access to bank-accounts, by not having valid id's for example. But they do have cellphones so they can download crypto apps to accept payment for jobs etc. And then there is the money receiving from relatives in other countries, yes.

What do you mean? Technically it works, no?

it is an incovenient database, for sure, but the fact that people can trust it enough that they put billions of dollars in it is remarkable.

I wouldn’t put my house in an S3 bucket…

You wouldn’t put your house “in a blockchain”, either. What is it you think you’re saying, here?

I meant an amount of money that’s equivalent to the value of my house…

Someone called J.Powell decides the price of US dollar. Bitcoin fixes this by inserting an algorithmic monetary policy, never seen in human history before.

How does Jerome Powell decide the price of a dollar? How does an algorithm fix that? What is being fixed?

Jerome Powell sets the future price of the dollar by setting a goal that is achieved by the Fed creating dollars and buying bonds (or selling bonds).

> What is being fixed?

A small group of people decide how much currency is circulated and can be used as debt, which creates inflation or deflation. Also there is no democratic process that can be used to control this small group of people, other than a repeal of the Federal Reserve Act of 1913.

> How does an algorithm fix that?

As an example, Bitcoin's algorithm has a fixed schedule in which new BTC is created. People can voluntarily use or not use BTC as a currency based on this currency creation schedule (vs. arbitrary creation that comes with fiat currency). This algorithm can only change by actors that take hashing majority on the Bitcoin network.

Maybe in their head it's still back before 1976 where we have the Bretton Woods system, there's no foreign exchange market and policymakers set the price of dollars against gold?

Dude, you might not belong to our civilization. Sorry.

If by “price of the US dollar” you mean “direction of financial sentiment”, then yes.

But that’s a big mistake.

I guarantee you that blockchain tech can solve a real, extremely important problem, though it's only a problem for some people. If you're connected to the money printers, then it's useless to you. Just like if you worked for a company like Enron which was cooking the books, 'honest accounting' would not be a solution for you; 'honest accounting' would be a problem for a company like Enron and everyone who works for Enron.

Proof of Work is highly inefficient and inconvenient. I agree to this.

Cryptocurrency sector is mostly a scam; or at the very least, a kind of casino. I Agree to this; though my understanding is that it has been corrupted by mainstream financial interests; just like Africa is kept corrupt and poor by some of those same interests. Then the plebs basically blame African people for 'choosing this'.

I've worked for some very successful crypto founders who became corrupt. I saw the change happening. The desire to improve things turned into self-sabotage. It was unlike any other company I ever worked for; nothing made sense. Yet I know for a fact that government regulators gave their approval. I witnessed the EU commission give grants to scam projects with nothing behind it, then these same founders got funding again and again after failed projects. It was all announced publicly though it took some time to understand that the projects were scams from the beginning... But like they got money from a government entity and they didn't build anything AT ALL. Then they got more funding on their next project... Weird right?

Proof of Stake is actually highly efficient; it's basically a ledger with dynamic runtime replication ability.

Unless you fully understand the current mechanism of how money is created globally; including the Eurodollar system and how stablecoins, derivatives and other financial constructs could be used for legal counterfeiting, you should not speak about the utility of blockchain.

I never got the whole larger "crypto" economy. The number of meaningless alt coins. That come and go most of the time, build on zero any type but speculative value. Worse than any fiat.

And then stable coins. Fancy IOUs of fiat. Which might or might not have actual assets backing them. Which you might or might not be able to redeem. Say if Russian government had a billion in whatever stable coin. Could they redeem them and get real dollars transferred to some account they own?

I think the second line is touching on something. The implication is that there may be a kind of legal cross-nation counterfeiting happening. Stablecoins likely play a part. When I worked in crypto back in 2017, all the successful people would tell me that they thought there was something really wrong with Tether and they all believed it was propping up Bitcoin. They expected it to collapse any day... But here we are 8 years later.

Ideally, countries should only be allowed to issue their own currency. It's not hard to see why a country being able to print another country's currency would pose a problem... With all money being digital and stored on thousands of distinct bank ledgers which basically don't have consensus, it would be very difficult to track with manual audits and with the current incentives in place. It would be trivial to hide these transactions under legitimate names as various forms of international payments.

What is there to get? Do you get sports betting or lotteries? People play games. They invent arbitrary rules with real consequences and try to "win".

Back in school we used to do things like "dare" people to do something or bet on a coin toss or something with the stakes being a snack or a desirable bit of stationery. I feel like everyone believes there is some clear boundary where things suddenly become "grown up" and "real". Do you remember when you became "grown up"? No? Nobody does. The secret is it never happens. The only difference is children have no "real" assets to play with.

What makes some derivative traded on Wall Street, like a "synthetic CDO", any more or less meaningful than alt coins?

> you should not speak about the utility of blockchain.

But most of the engineering around blockchain was to improve throughput (ie off chain transactions)

Its not like you can really do fractional reserve banking on the blockchain, well not practically. this means that you can't treat it like "money" ie the ever increasing supply of non-central bank controlled cash (ie your eurodollar, yen etc.)

There is no utility in stablecoins. They are basically joint stock company, but without an income, or case law to help you when it goes pop. Of course they are popular because they have no regulation and can basically do what banks do, but without any of the oversight need for stability/fraud prevention. "we are going to act like an investment bank, and create money, oh no, not by securities, but by word of mouth, that word being pyramid."

The utility of stablecoins is to bypass regulations. I suspect it could potentially be even more shady than that; could be some hack which leverages the Eurodollar system to allow EU entities to print US dollars which can be used inside the US.

The concept of fiat currency is fundamentally flawed. A US dollar in my bank account probably has nothing to do with a US dollar in your bank account besides the name. In reality; your bank uses one ledger, my (different) bank uses a completely different ledger. There is no consensus. It's not even the same currency in reality; only the name is the same.

If I hold a US dollar in a European bank account, it's yet another thing on a different ledger, operating under a different government with different incentives.

There are supposed to be checks and regulations to ensure that Europeans cannot print US dollars and then transfer them into the US for spending (to prevent Eurodollars from physically flooding the US economy), but correspondent banking is extremely complicated and there is no real consensus; one weak link in the chain (one nefarious or neglectful bank out of thousands) could potentially compromise the entire system and currency.

Imagine if some corrupt EU politicians, working with some big finance traders, found a way to digitally 'print' US dollars out of nothing within the EU and then spend them into the US; to redeem real US labor in exchange for these Eurodollars they printed out of nothing. I suspect this is where stablecoins may play a role as they are not as well regulated; some shady firms with minimal licensing and supervision could neglect to segregate Eurodollars from USD behind the scenes; thinking "A dollar is a dollar."

There is a big difference between exchanging currency vs converting currency. If, you were to set up an account which could receive both Eurodollars and USD and teat them both as the same; this isn't an exchange; this is a CONVERSION; it's counterfeiting.

But most people would see this situation and just think "This is just an international account which receives US dollars from both US and Europe; no big deal, nothing nefarious going on." They don't realize that the US Dollars printed by the US are not the same as those printed by Europe. I believe stablecoins may be an additional mechanism to try to blur the boundaries between the two monetary systems to allow counterfeiting.

>> I witnessed the EU commission give grants to scam projects with nothing behind it, then these same founders got funding again and again after failed projects. <<

could you share some links here to these EU-supported projects?

You say this right when your central banks went on a massive money printing spree, shot up inflation beyond their own baseline for years, and have created a frankenstenian K-shaped economy where everyone who is not in the top 10-20% is getting actively poorer

It doesn't take a lot to figure out that hard currencies with some supply cap tend to hold value better. BTC might not be it - it might be gold or silver - but you really can't ignore the inflation issues inherent in fiat currencies anymore.

Deflationary "currencies" like crypto are significantly worse (why spend when you can HODL). Regular crypto "currencies" will have the exact same effects.

> why spend when you can HODL

You touch upon an important point: the entire foundation of our current economic system is built on high velocity of money. You are incentivized to spend rather than hold because without it, there's no mindless conspicuous consumption. A deflationary currency will grind this system to a halt

But the question you need to ask is: has all this mindless consumption really done us any real good? For the handful of genuinely useful things to come out of excessive consumption, there are a gazillion pieces of wasteful crap that clogs homes first, then landfills

A deflationary currency is bad for the current economic system. But that doesn't mean it's bad by itself.

Lol. All you have to do is think about five seconds without going into rants about over consumption.

Let's take Bitcoin. It has a predefined limited supply. That is, it already has an artificial deficit built-in. On top of that, obtaining bitcoin becomes exponentially more expensive over time (until it becomes impossible once all the bitcoin has been "mined"). Now you have to spend many magnitudes more resources to obtain even a tiny fraction of a bitcoin.

So even in the absence of any external world to compare to (e.g. without denominating Bitcoin in USD) why would anyone spend a limited resource they obtained? Especially considering that even today getting even a single bitcoin through traditional mining is nearly impossible except for the filthy rich miners running industrial-scale data centers.

So you are saying there would be a limited resource becoming exponentialy more expensive over time? I guess there might occur a demand for such a resource? And mayhaps in that case the holders might decide to exchange it for some other assets they desire?

(ofc thats not the 100% correct description of bitcoin which depreciated against most other assets ytd but the idea still stands)

my naive self was just looking at a lot of what apps were doing:

    - waiting for users to do very simple things (gather a few fields, expand a template, store)
    - sleep during the night (as their users were sleeping too)
    - emit very small amount of data
    - struggle with security
    - reimplement 70s business but on top of digital network

somehow (and again, i'm naive and not knowledgeable) i felt that a lot of useful processing for society would be better if there was a global encrypted network that would enact the same simple things but without the human layer round trip. you get 24/7 operations, globally, open, encrypted.

in some corners of society this kind of tools (doctor appointments) seemed to be a net benefit, you can now book your GP even if it's 10pm, the system was ready to fire.

and when I see some news on zk parallel vm for smart contracts i feel some valid technical quality..

but maybe it's really just a fools errand i don't know

> I've never understood the initial arguments about Bitcoin, no matter how many times they've been explained to me.

This may not help much, but it's really a (self-)governance thing. That's why they start their article like so:

> I donated to Gary Johnson as a starry-eyed libertarian. On top of being a staunch Randian, I was into computer programming, so crypto was a natural fit for me. The cypherpunk ethos attracted me. (...) Being able to walk across the border with a billion dollars in your head is and always will be a powerful idea to me.

It is also why you keep hearing about crypto transactions being primarily used for illegal stuff. Just like with the uber-free-speech p2p platforms, it primaily benefits those who'd be otherwise hampered. Who, contrary to the usual talking points, are usually not actually so innocent or respectable.

But then we do keep sliding back, so maybe it's only a matter of time the proportions shift, and the claims of these technologies' justness stop being so false and hollow. And maybe these events and processes are further not actually uncorrelated. Trust is at an all time low and dwindling, after all.

I've recently used Bitcoin to pay for several legitimate items because the fiat financial system just decided not to let me pay with my debit card, for no apparent reason.

I agree with the article and I hold 0 crypto right now. But I still think it's amazing that I can hold something limited, something I can exchange for real money, in my head, just based on math. Sure it is extremely inefficient database, and pretty much all the real value needs to be linked with real world banking, but it does have some really unique features that makes me sad that it (predictably) turned to just scams and speculation.

Edit: and the other feature I like is that I could just attach my code to the raw banking backend. People say that anyways everybody just uses exchanges, and that's true, but if you'd ever want to connect to banking backend, you'd get buried in paperwork. With crypto, you'd just run or connect to a node.

> just scams and speculation

The "currency" part is actually the only one that is not a scam, as long as you understand what it is and the trade-offs it makes.

If you do actually have a legitimate reason to use it (because conventional payment rails are not available, or you're doing crime, or need pseudonymity), it is a perfectly fine tool.

So the bitcoin market cap is currently at $1.8 trillion.

You can compare that to USD M0 which is $5 trillion or EUR M0 which is around €4 trillion.

Not bad for an "extremely inconvenient database".

Market cap is pretty hypothetical though - if somebody actually tried to liquidate $50bn of bitcoin into fiat money you'd probably send the BTC price to about zero...

South Sea Company at its height was worth almost 3x British GDP. Not bad for a company "with negligible business activities"!

We've been hearing the story for years already that the Bitcoin value will go to zero.

Slippage yo. Market cap means jack shit if the true order book is thin like a slice of carpaccio.

> The block chain is, and always was, an extremely inconvenient database

The point is to be a database that isn’t controlled by a central authority, rather by the majority of its users.

> The block chain is, and always was, an extremely inconvenient database.

Care to elaborate? I have been using Bitcoin now 10+ to store my wealth and make payments, and it has been very convenient - not much time needed to use it, and I think I've gotten plenty of value for my time-investment.

What kind of database would you recommend to make it more convenient? Maybe you can write a guide how to implement decentralized value transfer and storage system on top of PostgreSQL, so that the amount of tokens is limited to 21 Million, with similar security guarantees?

> extremely inconvenient database

You can wake up with your bank / broker / PayPal balance = 0, what do you do?

regardless, they found a way for two parties to exchange wealth without trusting each other. the failures were letting it diverge from being a currency into a speculation instrument. It failed in being a low-cost wallet that we can pay our restaurant tab with.

I think the sort of libertarian mythos of crypto is very appealing to a lot of people. Escape the big bad man and so on.

The crypto ecosystem though is totally disconnected tho...

To understand why crypto became popular requires understanding that there was a massive anti-America (and by extension, anti-USD) sentiment in the 00s and 10s, mostly on the heels of America's various wars in the Middle East. For some brief period of time, America was the evil imperialist global enemy number one, even in the eyes of many American people. There was practically a patriotism crisis in America around when Trump first came to power.

Russia's invasion of Ukraine completely hard-flipped this overnight. America once again became the good guys of the world, and with it died any serious movements to disrupt the USD and greater financial status quo. More critically it also started the narrative that China might do to Taiwan what Russia is doing to Ukraine. It basically brought the world back into the late-20th-century good guys in the West versus bad guys in the East bipolarity.

I think a lot more important for understanding crypto is learning the first bitcoin was minted in January 2009, months off of the heel of the Lehman Brothers filing for bankruptcy, and more notably the "start" of the 2008 financial crisis

Anti-Americanism was well underway by that point. I think the impetus from both distrust in the American government and in Wall St really gave crypto the runway.

The blockchain is an excellent distributed storage system for anything that should be immutable, such as contract hashes like notarial deeds, vehicle sales, and digital identities, which are not controlled by any central authority (if the blockchain is truly distributed) and are verifiable and tamper-proof. NFTs are the toy experiment that demonstrates this path.

It is therefore also usable as a currency, with fungible tokens, where the transactions per second (TPS) are sufficiently high, not for Bitcoin, therefore, but for example, Solana is already adequate; its performance and economic model are sufficient to pay for your local café.

That, without widespread acceptance, they have limited use, initially for crime, then for speculation, is another matter, but it is not a technical issue. The technical issues are quite different: https://blog.dshr.org/2025/09/the-gaslit-asset-class.html

read the original Satoshi paper

all the 3rd party summaries/interpretations of this paper are problematic. Read the original.

The whitepaper has some problems. Satoshi isn't automatically right and virtually no one uses Bitcoin/crypto the way Satoshi envisioned. Arguably if you judge Bitcoin based on the whitepaper it is a complete failure.

I’m not sure the paper or the character Satoshi himself matter anymore. Once you have a preeminent coin with fiat power behind it, the details of a paper and the wherewithal to reinvent that coin more purely are irrelevant. Once a particular political family signaled that control starting in Sept 2024, keeping close to that family reassured you of a bailout or pardon.

I think block chains are inherently fine. The issue with bitcoin is that it isn't inflationary. Yes, yes, the supply increases over time, but that's also true for gold, and I've yet to hear anyone call gold inflationary. If a declining unit value is not guaranteed over time then it cannot be used as a currency and just becomes a savings vehicle / speculative asset. This is why all central banks aim for inflation. Try telling the true believers this and they'll reply with something about "sound money", seemingly nostalgic for the gold standard or something. It's rather disheartening.

> sound money

Perhaps they're the new incarnation of audiophiles.

Truer words have never been spoken.

Amen. Bitcoin barely manages to continue to function, while currently handling 0.0000001% of the worlds money transfers. The idea that we could base any substantial part of our financial system on a globally serialized transaction ledger is a laughable joke.

As a technical experiment, I love bitcoin, and I have thoroughly enjoyed wasting some of my own time on it. But it's not mainstream, and it never will be.

Most of my transactions go through credit card, that means every time I exchange money for services/goods a private corporation takes a 3% cut. That makes sense to you but the dream of BTC doesn't?

Of course it turned into a gambling scam filled cesspool like most human endeavours, but the initial dream was sound.

TLDR: to understand bitcoin you have to see the problem it's solving - most people are blind to it even though it affects their lives terribly.

https://x.com/saylor/status/1878154748353818932

> "The block chain is, and always was, an extremely inconvenient database. How anyone, especially many intelligent people, thought it was realistic to graft a currency on top of such a unwieldy piece of technology is beyond me."

The answer to your question is humans' inability to resist printing money out of thin air if it's possible to, and the disastrous effects it has on the world. Bitcoin is money that can't be printed out of thin air by anybody. The only way to obtain it is by providing work of equal economic value.

Look up the M2 money supply over the decades and realise that each time it doubles, the value of your wages, savings and pension are halved. Worse still, that value is stolen, sucked out into the hands of the people above you in the fiat pyramid scheme (see the Cantillon Effect).

It's one of the most important inventions in the history of mankind. This is because it shuts down the biggest scam in the history of mankind - central banking. Bitcoin's positive effect on the world is to restore power to the people and end their monetary-based enslavement - the changes will be profound.

Your comment assumes that the purpose of an economic system is to preserve a financial status quo. It isn't, and shouldn't be. Inflation incentivizes people to put their money to productive uses in the economy (capital formation) rather than hoarding resources.

The purposes of money are:

- store of value

- unit of account (a measuring stick for value)

- medium of exchange

Allowing the financial system to inflate the money supply destroys two of those fundamental qualities. The fact it can additionally charge interest on the money funnels the stolen value into its hands.

Interest on money loaned out is the only incentive required for putting money to "productive uses". Nothing about hard money affects that. In fact inflation only causes the people at the top of the pyramid to hoard all of the economic value instead. They are buying up and hoarding the entire world with the wealth they are taking from the people.

Bitcoin was envisioned by its creator to be used as a currency. To buy and sell stuff using it. If you ask today what is bitcoin you'll be told that it is a store of value. The purpose of money is not to be a store of value. It can be, but that is not its purpose which the case of bitcoin clearly illustrates.

> Interest on money loaned out is the only incentive required for putting money to "productive uses".

And what is the incentive to loan money in your system?

Alas, any comments trying to talk about the problem are getting buried. They don't understand the solution because they stick their fingers in their ears when someone tries to show the problem. Of course a solution doesn't make sense if there is no problem.

We have to remember 2008 was 17 years ago. People who were born during the crisis are now adults. The tragedy is there might not necessarily be another huge crisis. We blew it 17 years ago. We didn't fix anything. People stopped talking about financial reform about a decade ago. So now we might just have to live with a system where a few elites are creaming the top of the money supply. A system where the brightest and most talented people go and work for something like Jane Street, spending their days playing games and trading bits of paper with each other, causing real effects for people doing actual work, but adding nothing of value themselves but taking loads.

This Douglas Adams quote explains a lot:

> I've come up with a set of rules that describe our reactions to technologies: 1. Anything that is in the world when you’re born is normal and ordinary and is just a natural part of the way the world works. 2. Anything that's invented between when you’re fifteen and thirty-five is new and exciting and revolutionary and you can probably get a career in it. 3. Anything invented after you're thirty-five is against the natural order of things.

The thing is - the world young people are accustomed to is just a carefully managed matrix. There are glitches.

"Why do house prices endlessly rise?"

"Why am I working so hard in such a technologically advanced world yet can't even afford to raise a family?"

Once you see the reason, you can't unsee it.

We also have Gresham's and Thier's Laws on our side.

Bitcoin is also money printed out of thin air. Bitcoin is also a fiat currency. It may be impossible to change the rate of Bitcoin printing, but it's definitely possible to print more cryptocurrencies (see Ethereum, Monero, Solana, Tron, etc), it's definitely the case that bitcoin's non-deflationary nature is terrible for it as a medium of exchange as it encourages hoarding and destabilises the value, and it's definitely the case that it's impossible for any currency with a fixed issuing rate to maintain a stable value.

Is monopoly money a threat to the dollar? Does Hasbro need to report to the Fed how much it has issued each year?

People will only hoard hard money until they need to buy things after they've run out of the state's fiat tokens to try and sell.

Look up Gresham's and Thier's Laws

What?

> I've never understood the initial arguments about Bitcoin, no matter how many times they've been explained to me.

Bitcoin has a great mythology associated with it. People over emphasize the technical aspects, i think its the "story" that made it succeed. Its about taking back "control" from the man. People love an underdog story, people love a rebellion story. Lots of people in the tech space are anti-establishment or libertarian. Bitcoin is the perfect fulfillment of the dream of that ideology.

When people try to sell bitcoin, they aren't selling merkle-trees, they are selling "freedom".

I think if it was actually just about digital currency, then chaumian ecash would have taken off. It technically has a central party but not in a way that matters. It makes so much more sense than bit coin. But it doesnt have the total freedom story.

> How anyone, especially many intelligent people, thought it was realistic to graft a currency on top of such a unwieldy piece of technology is beyond me.

I mean, it did work. It is a shitty currency no doubt, but you can buy and sell stuff with it. There are bitcoin atms in my neighbourhood. I think the bigger mystery is not how anyone thought it could be a currency, but how the hell something so silly actually sort of became one (albeit bad one)

You say bitcoin is "so silly". Please give me an example of anything better for nation states to hold as reserves and to transact with other nations with.

I'll even allow you an imaginary thing as long as it's constrained by the real world.

Fiat currency. (So-called petro dollar)

Gold.

There is a reason why no countries are using bitcoin as a reserve currency.

Fiat currency: Why would I hold a currency that another nation sucks the value out of by printing it? Even the dollar has half its value stolen every decade.

Gold stock above ground doubles every 40ish years, halving it's value each time. Think how difficult it is to safely move and assay billions of dollars worth.

The reason nations aren't publicly using bitcoin as a reserve is that it's still only the year 2025

It is an amusing and potentially even good concept, but with one caveat - you only consider close enough exchanges with similar peers. To translate that into English - a fully libertarian self-sufficient settlement where people are exchanging home-made stuff between one another. Because everyone was the same and no one could abuse the system, it may even worked. We even seen it in the early criminal communities, when BTCs briefly were a medium of exchange for drugs. And then tokenbros made a leap of faith and magically scaled that to the whole world. Which obviously didn't work in practice. Their famous Lightening L2 is an abomination of hacks and centralization and it still doesn't scale.

The problem of BTC was at the same time overabundance of imagination in one area and a big gap in imagination how the world actually works. They only saw simple isolated scenarios and never a globalized economy.

Because... Nothing else achieves that? Besides a centralised database, which is extremely vulnerable to censorship - as seen when Visa blocked Steam from selling porn games.

> I've never understood the initial arguments about Bitcoin, no matter how many times they've been explained to me.

Because it's a cult, like the "AGI is coming in 2027" cult thinks we're on the brink of skynet level world destruction, it'll come and go and 99% of the people who fell for it will tell you they never really truly actually believed

>How anyone, especially many intelligent people, thought it was realistic to graft a currency on top of such a unwieldy piece of technology is beyond me.

"It is difficult to get a man to understand something, when his salary depends on his not understanding it."

That you don't understand something doesn't mean everyone else is wrong.

No, but it doesn’t mean they’re correct either.

The Emperor was very pleased that everyone was admiring his new clothes, even if he couldn’t see them himself!

It's funny that you think of crypto bros as "everyone", when in reality they are very much the few.

To understand Bitcoin you need to forget the technology and first understand the problem. You need to understand what caused the 2008 financial crisis and how it resulted in us collectively funnelling more value into the hands of useless bankers. You need to understand that there are people who are literally spending their days playing games with each other, trading bits of paper and making silly deals and bets. If you don't understand the word "literally" or don't believe it, read more, study harder. If you don't understand a zero sum game or how this nonsense fucks up the lives of regular people, read more.

Read The Big Short by Michael Lewis. You could even start with the film by Adam McKay who also gets it. Then read Other People's Money by John Kay.

Only once you understand the problem can you begin to understand why a trustless digital cash would be good for us. Bitcoin is simply the first viable solution to the problem. If you can come up with a better one you'll change the world.

OK, suppose the whole world used a trustless digital cash. Now you cannot do monetary policy. Now booms are booms and busts are busts and we are back to the early 1900s. Great.

Actually what would likely happen is that people would be incentivized to opt-in a digital currency with a monetary policy knob, and this would again become the de facto currency that everyone uses.

The problem with 2008 was corruption not monetary policy.

No solution is perfect. Come up with a better one. More regulation, however, is not what we need. We need to decide what we want the financial sector to actually do, and that probably doesn't involve a bunch of children playing games.

Just because no solution is perfect doesn't mean we should adopt a solution worse than the status quo.

"Monetary policy" in reality simply means printing more money than is ever destroyed. It's human nature and always will be.

This means bitcoin's average price will go up forever when priced in fiat tokens. Or anything else for that matter - even gold's above-ground stock doubles every 35 years. How's that for an incentive?

The largest amounts of value will always settle in the best store of value for large amounts of value. Show me one with better fundamentals than bitcoin.

>>The largest amounts of value will always settle in the best store of value for large amounts of value. Show me one with better fundamentals than bitcoin.

Thats Gresham's Law

>How anyone, especially many "intelligent" people, thought it was realistic to graft a currency on top...

However a currency was grafted on, is used by millions and has a $1.7tn market cap. Seems real.

The currency is absolutely not used by anyone serious as currency. Market caps are, quite obviously, representative of nothing, given the current state of the S&P. Let’s be serious.

I used it to buy some airtime on my phone. Not a very good currency maybe.

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