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Comment by DennisP | Hacker News Reader

This idea that the "blockchain" can be divorced from a currency that has value ignores a simple fact: if you don't reward miners with something that has value, few people will mine and the blockchain won't be secure anymore.

(And a mature version of proof-of-stake would have similar issues. There has to be something at stake.)

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Recently, I've been noticing this kind of moving goalposts from bitcoin critics a lot. From outright rejection of Bitcoin a few years ago it went to "blockchain is a great technology but not the currency" or "yes, many places accept bitcoin but they immediately sell it so it doesn't count" or "bitcoin shows great promise but it will soon be superseded by a superior cryptocurrency"

Personally I see it as a gradual acceptance of a new technology by the public.

>immediately sell it so it doesn't count

I don't think that's moving goalposts.

Lots of places take Paypal. Paypal will convert [insert currency] into dollars. That doesn't mean I can claim all those businesses in the US accept [insert currency] in a way that shows that [insert currency] is strong and useful. All I can really argue is that Paypal does so.

Very few companies want to possess bitcoins as a liquid store of value.

> Very few companies want to possess bitcoins as a liquid store of value.

I don't disagree, this is a valid criticism. What I meant by moving goalposts was that the argument changed from "you can't pay with bitcoin anywhere" to "you can pay with bitcoin at Newegg but this doesn't count because their merchant immediately converts them into dollars"

The argument, which you just agreed with, is that "You can't pay with bitcoin at Newegg" just like you can't pay a US company in euros.

The thing is I could always "pay with bitcoins" if I converted them at the point of sale (myself).

So you can technically use a bitcoin at Newegg but it's not Newegg taking the bitcoin. It's the payment processor.

I don't think the incentive structure of mining is fundamentally tied to a "currency", per se. A tradable asset of some sort, yes. But that's arguably a much lower bar to reach. (For instance, a Starbucks gift card makes a perfectly good tradable asset, but not a fabulous currency.)

I highly doubt bitcoin would be where it is today if the payout to the miners was in starbucks gift cards.

Wouldn't a Starbucks gift card be equivalent to currency in this case?

Not really. One of the things that defines a currency is near-universal acceptance. Starbucks fails this because a good number of people won't accept a Starbucks card as an equivalent to its cash value. Most stores won't accept it, my caffeine intolerant housemate won't accept it, etc. It has value, but it's not a ready means of exchange.

That still leaves the possibility that Bitcoin's rules (semi-fixed block reward and 21M BTC limit) are bad and some other altcoin will have much better rules.

Well, that's honestly irrelevant as long as Bitcoin is the only cryptocurrency with any significant market share.

Bitcoin's market share is currently over 15 times larger than the combined market share of the following 10 most popular cryptocurrencies! An altcoin could be much better than Bitcoin technically or economically/philosophically, but it wouldn't matter since Bitcoin would be much better in practical use due to its market penetration.

An altcoin could do some really cool stuff that would in theory make it more secure than Bitcoin, but Bitcoin would be vastly more secure in practice due to its massive network.

And if an objective flaw actually were discovered in Bitcoin, it would be solved pretty quickly.

I don't believe this outcome is possible for anything related to a rules change. Maybe for better functionality, but I have my doubts about that too.

In terms of the rules, it would mean we collectively have learned to solve something like the tragedy of the commons problem or a collective prisoners dilemma.

Market participants would have to en-mass choose an asset which is worse for each of them as individuals (as it loses value) for the sake of the greater good. Without a government forcing the issue, it is my belief this can't happen.

True, but a lot of people have tried building altcoins with modified rules, and so far none have come close to dethroning Bitcoin.

On the other hand, substantially better technology that Bitcoin can't easily adopt might be another matter. Ethereum and Zerocash are a couple interesting candidates.

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