Why This Computer Scientist Says All Cryptocurrency Should "Die in a Fire" (2022)
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The breakdown in cost pr. Transaction really drives home what a ludicrous system it is. Bitcoin is a fantastic example of a great invention put to horrible use.
note: i read the comments and all of them argue against it because of its energy consumption. I don't find any of them convincing crypto has been good to me and i want it to be good for others too. The only thing that i care about are pedos and drug dealers which makes very upset because it's very true, they use it and i wish there was a way to track them.
If we were to believe the government, you should not be able to avoid sanctions. So, maybe you should not blindly trust government when it says Bitcoin is ah so bad because it it used by darknet markets.
Most normal currencies are the same as bitcoin/crypto in that they are mostly digital but at least they have some mostly agreed upon value within their system. They don't need to be converted to another currency to find out which goods I can exchange for them.
The Dollar has an agreed-upon value of 1 Dollar per Dollar, the Euro of 1 Euro per Euro and the Bitcoin of 1 Bitcoin per Bitcoin. There are no agreed-upon values in any currency in free market. In socialism, they would dictate that a pound of butter had to cost 1unit of some currency. But in capitalist free markets, the value of a currency is always measured realtive to others things, being it goods (such as a standardized shopping baskets used for CPI) or other currencies or assets. For example, there is no way to determine if the dollar raised or fell - it always has a value of one dollar. But there is the DXY ("dixie") dollar index, where the value of the dollar is measured by its trading price with a basket of other currencies. Now if the DXY falls, you can say the dollar lost value. You could also say, the foreign currencies increased in value. It is always relative.
Plus, 100 dollars bought a whole lot of things 50 years ago, a lot less things 30 years ago, and today the same 100$ buy a lot less than that. There is no agreed upon value, it is supply and demand.
You aren't really believing in math. Doubling the number of Bitcoin in the world is not blocked by mathematics (trivially change the constant in the source code), it is blocked by a consensus of humans believing in the artificial scarcity that a system robustly provides. For instance, if Bitcoin ever adopts post quantum cryptography, the math breaks - it is a technical fork. But, since a vast majority of participants (maintainers, miners and holders) will likely agree that it is a good idea this new fork will be named "Bitcoin" and everyone will be happy. Not math at all, rather a broad consensus among humans.
I'm not suggesting Bitcoin is a bad investment at all, but believing in it because it "is math" is not correct.
My point being, you can have two competing currencies and exchange between them. In Argentinas case, the currency competition was healthy as politicians couldn't conceal their bad financial policies due to the hyper inflated exchange rate for pesos.
Lightning uses so called hashed time locked contract (HTLC) between nodes backed by bitcoin 2-of-2 wallets, with punishment options baked into the transaction script if people try to unilateraly reallocate funds from the channel. The channels between nodes form a payment network, where each node forwards funds (in return for a small fee).
To use a metaphor: bitcoin is the gold, lightning are green dollar notes with a guarantee to exchange those notes for gold anytime - just as our monetary system was before 1971 when Nixon broke that promise. Lightning is built in a way that it is decentralized and that promise can never be broken. And you can send those notes via the internet in sub-seconds.
You still don't grasp lightning fully, and I totally understand because it a complex concept. It is not its own crypto, it is not a token, and lightning does not even use a blockchain. It is a layer 2 network, meaning it builds upon BTC and requires BTC node to run (to monitor the new blocks and publish transactions). So lightning cannot replace bitcoin, it augments it.
Would you agree with me that lightning 'stretches' each BTC transaction by using clever tricks ala. aggregation, checksums, hashing, etc.? I buy that this scales the number of transactions dramatically, especially between a limited number of parties. It might be that this is stretches far enough be make BTC useful as a currency, but I remain very doubtful of that. If that is indeed the case, it seems that BTC has managed to fail as a currency for other reasons.
No, Bitcoin burns that much power because it has become the top speculative asset.
But it only became that after maybe 8 years. Before that it actually functioned more like a currency (amongst other things, for buying illicit goods online).
And what makes Bitcoin ideal for speculation is its capped emission where every 4 years the amount emitted is halved, encouraging FOMO.
I agree most cryptocurrency should die in a fire, including all the ones made to enrich their creators, which is the vast majority of them.
The few that do not allow their creators any financial gain, and those that strongly discourage speculation by having the same amount emitted every year, do not need to die.
https://english.elpais.com/science-tech/2022-07-07/jorge-sto...
I would also highlight that most knowledge and mental models around Bitcoin and the ecosystem seem to be stuck in 2021 - but after the AI hype took over, there have been slow improvements and developments that go mostly unnoticed, also here on HN. I.e. the lightning network is evolving too, making anonyous (to a certain extend), sub-second, off-chain transactions possible at way better efficiency regarding energy. With other developments like Bitcoin Taproot (Schnorr signatures), async and trampoline payments on the horizon fir lightning, we can expect even better anonymity and ease of use for lightning network within the next 1-2 years.
Most comments, reasoning, papers etc. older than 3-4 years should be taken with a grain of salt, as it is a rapidly evolving and changing field. Probably the same applies to AI progress (especially the debatable energy consumption around AI).
(1) can you point to some large important positive uses of Bitcoin at present, or are you just saying that at some point in the future we will see them?
(2) are you saying all the bad things like Ponzi scams, hacking, drug money monitoring, buying csam and ransomware, have stopped, or that at some point in the future they will?
No, not at present - but there will be in the future. Bitcoin is faily new, hard to understand for laymen, and government regulation and the existing financial industry is actively fighting it (with some extend changing in the US right now). The properties bitcoin has allow for lots of benefits and use cases that are superior to our existing financial systems, but they depent on adoption. I am bullish on the bitcoin, the same way I was bullish on the internet in 1994. The internet is great, but not so great if only a couple of thousand people in the world use it. That is the same adoption problem, not an issue with the underlying technology.
> (2) are you saying all the bad things
All the bad things existed before bitcoin, and will exist for eternity. The internet in the early 90s and 00s was also a place full of scams, ponzi scheme emails, phishing, fraud etc. Most crime money today is fiat cash. Some people (especially in the EU) claim a total surveillance state and the removal of cash paired with total money control is needed for a safe and secure society. I am in team liberal democracy, where the freedom of cash and lack of government total control is a benefit to society, ensures perpetual democracy and freedom to the individual. The fact that bitcoin and crypto is used by criminals just as cash is, shouldn't be a reason to not have it. Just as removing cash to prevent illegal activity should not be goal in a free society.
I am bringing all this up because when cybercurrencies were getting started, the people boosting them assured us that they would soon be doing all sorts of wonderful things, and nothing bad would happen. That prediction turned out to be wildly mistaken. And instead of considering that maybe the idea itself is just basically bad, in the years since they keep insisting that soon it will all be fixed.
Can you understand why, given this long history, I would be dubious? Or is it your view that I am under some sort of moral obligation to believe that the approaches to fixing it being worked on at present are absolutely certain to work?
No it does not. See my internet analogy. Asume it is the year 1993, and the WWW is just invented but there are hardly any websites. At that time, you wouldn't say that "No, there are not websites at present - but there will be in the future. Until then, stay away from the Internet". This is of course non-sensical. It is: "There is this new technology that will revolutionize everything, better get started with it early and familiarize yourself with it, the earlier the better". And yes, some people thought the internet is just a temporal phenomenon that will pass by and refused to familiarize themselves with it even after the iPhone came along.
Regarding cybercurrencies: I am myself a "bitcoin only" guy - meaining in my opinion there is bitcoin, and there is the all the rest which is shitcoin. Stay away from all the shitcoins.
Oh it will.