Comment by patio11 | Hacker News Reader

Comment by patio11 | Hacker News Reader

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I've got an 8k word essay that I've been working on for a while about the engineering case against Bitcoin. I'd promise it in the near future but it isn't quite ready yet and I try to space publishing things out, partly to avoid wearing out my welcome with my audience and partially to make sure that I don't spend too much time on this sort of stuff relative to all the other stuff I have to do or could be doing.

I'm still left not really understanding either what Stellar seeks to achieve

If you trust me to speak on behalf of stellar advocates, then my good faith belief is that they'd describe it as something like "We want stellar to be TCP/IP for money." (People who like Bitcoin qua the protocol or blockchain technology rather than qua an asset also sometimes use that metaphor, for what it's worth.) The implication is that "TCP/IP is a fundamentally important technology which allowed other technologies which changed the face of the world" and "money is a crosscutting concern of many extremely important problem domains which you care about."

> I've got an 8k word essay ...

I hope it won't be a Gish gallop. It indicates that there probably is not one single big case against Bitcoin but many small cases. There is an interesting essay about that here: http://www.gwern.net/Bitcoin%20is%20Worse%20is%20Better

I wish I could upvote this twice. I spent a long time trying to write a similar comment and eventually deleted it; yours is better. Of course Bitcoin isn't perfect and it's entirely possible that it doesn't stand the test of time+. But people who insist on behaving like it's a joke or a toy when there is a multi-billion dollar economy around it and enormous chunks of pretty smart VC money (not to mention Stripe's investments in the ecosystem--they seem to know a thing or two about exchanging money on the internet) end up looking pretty stupid.

+ I can certainly appreciate the opinion that Bitcoin won't survive in its present form, but I think it's becoming more and more obvious that cryptocurrency in general won't be leaving us any time soon, and I think ignoring Bitcoin's role in that development is extremely foolish.

And if you notice, they aren't ignoring Bitcoin's role, they're attacking it! So in a sense, they are helping crypto by admitting Bitcoin's faults and attempting their own solution.

For those who don't know what a Gish Gallop is: http://rationalwiki.org/wiki/Gish_Gallop

It is incredibly obnoxious to pre-insult an essay you couldn't possibly have read. The subtext you've managed to communicate is that your mind can't easily accommodate the idea that a long essay on flaws in Bitcoin could be anything other than a rhetorical strategy to hide the truth.

He made a strong case on a single argument against bitcoin several times - which is the need to wait for the better part of half an hour to confirm a transaction.

I still don't understand how bitcoin will ever overcome that obstacle for casual transactions (as opposed to ones in which a 30 minute delay isn't a problem)

That is a mediocre argument against one narrow use case.

A valid transaction which is widely seen in the network will be part of the blockchain with a high degree of certainty, even if it is just a few seconds old. That is not perfect, but the risk of accepting unverified transactions with low volume is very low.

It is important to remember that most systems that we use today have serious flaws, including payment systems like credit cards and cash. Bitcoin doesn't have to be perfect in order to succeed.

Every single person I've discussed Bitcoin with has identified the requirement to wait 3 confirmations, or 30 minutes as the fatal flaw for casual commerce. In fact, we spend quite a bit of time spitballing coming up with systems to overcome it (Giving your wallet some sort of "reputation" is common - but then requires you always spend from the same wallet, and also leaves the system open to a wholesale attack in which a common wallet app might double spend from a lot of people at the same time)

If someone could come up with a response to that single flaw, I think most of the others (increasing transactions per second, size of the block chain, etc...) can be overcome.

How likely is it that a valid transaction that is seen by a large part of the network won't be included in the blockchain?

How likely a credit card chargeback?

Re: "How likely is it that a valid transaction that is seen by a large part of the network won't be included in the blockchain?"

My understanding is that if you don't wait for multiple confirmations, then it's not particularly challenging to double spend bitcoins. That's why vendors don't accept a transaction as "good" until multiple transactions have occurred.

And waiting for 30 minutes to pay your restaurant bill would kind of suck.

> My understanding is that if you don't wait for multiple confirmations, then it's not particularly challenging to double spend bitcoins.

That's incorrect, there is a significant cost associated with executing a double-spend attack. For small transactions, it's uneconomical to mine an alternate chain in order to execute a double-spend attack.

If you trust the miner a little bit, you can assume that a zero-confirmation transaction be part of the common blockchain. Now it's not advisable to do that when selling somebody a Ferrari and letting them drive off, but it's probably less risky than accepting a credit card payment.

Regarding reputation: I don't quite understand the point. You'd just have to sign your tx with a private key that has a corresponding public key with some reputation attached to it. This is pretty independent of bitcoin itself. You could even build a system where you deposit some amount with a third party (or multiple third parties using a MULTISIG tx), which will reimburse the vendor with that amount if a double spend is executed.

Regarding reputation - the theory would be that you would be willing to accept transactions (that were on the blockchain, of course), from a particular wallet, after that person had some type of reputation (either because they had provided identification, or had a track record, or some other method of proving that transactions from this wallet don't always have to be confirmed three times, particularly for small amounts of BTC.

But I think your system would work as well - but it then needs more than just a bitcoin transaction from my wallet.

I'm just trying to think of how we can encourage Restaurants and Grocery stores to start accepting BTC, without getting scammed by double-spends.

I've got an 8k word essay that I've been working on for a while about the engineering case against Bitcoin.

I'll be looking foward to seeing it Patrick. I've got my own rant about why BitCoin is (mostly) a terrible, terrible idea but haven't committed any of it to written form as yet.

Although we are all quivering in anticipation of all these 8 thousand word essays, the fact remains that bitcoin is being used and works well.

I think the question is why is it used and what do we mean works well?

It does solve the Byzantium generals problem rather neatly, which is good. But I doubt that is why it is used. It is used partly because it suddenly became free money for a lucky subset of people who found you could exchange something you got for free for something valuable (drugs sex etc) - and those were at such high rates that the people receiving the bitcoins were also basically being given free money (when one read the official exchange rates)

This managed to fuel an interesting cycle. I would be interested in seeing if bitcoins exchange slips have affected it's purchasing power at exactly the same ratio or if it is being used as a barter not a currency (in these dark corners of the drug dealing world)

I would also suggest that (afaik) real drug dealers who do real big deals work on serious guarantees of trust. Things like knowing the person you are dealing with, and where their children go to school. So things like trustless currencies in these environments are not trustless - quite the opposite.

What's with the focus on drugs?

Your comment about trustlessness also isn't quite correct; Bitcoin is trustless in the sense that it does not require personal trust for its operation (like eg. the USD does).

That's unrelated to whether trust in the other party is a component in a transaction or not - which, realistically, doesn't have anything to do with the currency being used.

Because the parent was talking about drugs (well illicit transactions) as the proof that bitcoin worked well as a currency. I'm unconvinced. And tired hence the rambling.

I suggest that anything will work as a medium of exchange especially if you have the threat of death to back up your trust needs. All that is needed is the belief on both sides that bitcoin (or a fleet of Porsches) will hold it's value long enough to complete both this transaction and enough similar transactions to expend the bitcoins received.

So bitcoins don't seem special in this regard - they just seem like cash. And that I don't think is a valid proof they can become a real currency as used in the "trust" economy.

I do accept that trusting the other side won't run off with my drugs is different from trusting the Bank of England won't inflate away my value. But the vast majority of transactions in USD don't have that worry on any sensible timescale either. (Not true of say Zimbabwe)

Thank you - and apologies for commenting whilst tired.

Edit: well the parent (toasted) was commenting up thread on drugs, but now that's massively down thread and this making my comments on drugs pretty weird. I see

None of this post really makes much sense...

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