anonisko

The idea that raw blockchains would ever be a scalable payment network for the world's population was always a completely absurd idea.

In fact, it's so absurd that it was literally the first public comment Satoshi received. https://satoshi.nakamotoinstitute.org/emails/cryptography/th...

> We very, very much need such a system, but the way I understand your proposal, it does not seem to scale to the required size.

As a simple example, suppose every one of the 7 billion people on the planet make only 1 transaction per day. With a basic transaction size of ~250 bytes, this would require a blocksize of ~12GB per 10 minute block. (check my math)

"But storage is cheap!" I hear some say. Even if you could dismiss the cost of storing an aggregating ~600TB/year, that's not the real bottleneck. Bandwidth and processing power are. You have to broadcast that 12GB block to the entire global bitcoin network as fast as possible to beat other miners to the award. Then all the world's full nodes have to do the work of processing that 12GB of data to validate it. All within an average 10 minute window.

And this is all based on the absurdly conservative assumption that every person only makes 1 transaction per day. It's not even considering the use case that billions of machines might want to transact with each other billions of times a day. Or that you might want to build micropayment systems for metering. e.g. http://andyschroder.com/DistributedCharge/ or https://twitter.com/JackMallers/status/1346869624789463040

And even if you could solve all these problems, it doesn't get around the fact that blockchains as a payment system are a really shitty experience compared to existing solutions. You have to wait an unknown amount of time for your transaction to make it into a block before you're safe from a double spend. That time is 10 minutes on average, but in reality, it could be anywhere from a few seconds to over an hour because mining a valid block is a random search that averages out to 10 minutes based on an ever changing balance of real world hash power and mining difficulty value.

The only way blockchains were ever going to be interesting at scale is as a rock solid, incorruptible settlement layer. Decentralized layer two networks like Lightning are exciting because they have the potential to create a trustless payment network that directly settles to the blockchain. Even more exciting is that lightning can span separate blockchains and sidechains, e.g. BTC<->LTC, BTC<->USDT (and future CBDCs?), or BTC<->lBTC/rBTC. And they can actually scale to an arbitrary number of transactions that don't need to all get recorded forever in the base chain immutable ledger.

Node centralization is a lot less concerning for monero because the privacy by default nature of it makes it very difficult if not impossible to censor transactions. Even if stupid large blocksizes results in only a handful of datacenter sized nodes running the network, there's not much they could do to try to denylist particular coins.

However, node centralization does still carry the concerns about powerful actors being able to arbitrarily change the supply issuance and debase holders without explicit taxation or seizure.

Megacorps are starting to think about creating their own currencies (FB diem).

We stumbled into accepting dictatorships in the emerging virtual realms without even realizing it.

I thought "blocklist" was the replacement for "blacklist".

Too many people support the development of powerful weapons without considering what happens when their enemies get a hold of them.

Depends on whether you agree with what the people in charge define as a 'good thing'.

In a democratic government, you might like how a powerful tool is being wielded when your people are in charge, and be terrified when the 'other' is in charge.

Yup. That's why I say generally.

Even if the paper is correct it seems to fall into the 'moving down the continuum' category.

Dear lord no. I can see how it might come across like that.

More drawing attention to the wider theme that we generally should not take people at their word when we have the option to demand proof of work that can't be faked or mistaken.

Don't trust. Verify.

Basically, the tax code is used by governments as an incentive mechanism to manipulate entities into behaving in ways they want.

"Broken" generally isn't a binary event in cryptography.

It's a continuum from "impossible to do with all the time and energy of the universe and the most advanced computers we have" to "my commodity hardware can crack it in a few minutes".

The same goes for fears of quantum computing breaking current cryptography. It goes from effectively impossible to "yeah, we could break it with a few years of constant computation, which is plenty of time to switch to quantum resistant schemes".

Reminiscent of Craig Wright's claim to be Satoshi.

It doesn't matter what you claim with words if you can't back it up with cryptographic evidence.

Shut up and prove you've done (or can do) the work.

The whole paper is linked, https://eprint.iacr.org/2021/232.pdf

I've got a feeling that Elon is the kind of person who would only be happy with death on a battlefield, bested by a worthy opponent.

A farm is an income generating asset. Farmland is a commodity that does nothing on its own.

An electronics manufacturer that uses gold is an income generating asset. Gold is a commodity that does nothing on its own.

  The problem with Facebook is that it's not exclusive - there are tons of alternatives.
  Some even have better features (think Twitter or TikTok or Discord).
  Nothing is stopping people from launching Facebook2, Facebook3, etc and having the same technology available - yet Facebook is the major player skyrocketing.
  This is an example of the market being irrational longer than expected, in my book.

The value of bitcoin is not in the code, it's in the network. Arguing that the code that runs the network can just be copied is not a very compelling argument.

Proof of work (PoW) vs proof of violence (PoV).

Both energy intensive mechanisms for enforcing the security of a currency.

Everything is speculation.

My ultimate point with the comment above, is that dismissing bitcoin as nothing more that a rampant speculative bubble is not a good argument against it.

Everything we value is a speculative bubble that can eventually pop if conditions that cause us to value it change. The bitcoin bubble can pop (and has many times) but so can the 'trust in the US government' bubble.

Of course.

It's a useful commodity resource. It can be use for industry, science, dentistry, jewelry, etc.

But I do think the store of value use case where you arbitrarily hoard this useful commodity in a vault so you can sell it later is starting to die. Nation states and companies that need it for it's actual utility will still hoard it as a strategic reserve, like we do with crude oil, helium, uranium, water, grain, maple syrup, etc. But that's a complex risk assessment decision that depends on a lot of variables from predictions of future supply flow to geopolitics that individuals won't be able to evaluate.

I think bitcoin will replace gold as the long term money battery, where you can arbitrarily store value that you don't know what to do with yet for a long time. It might take decades of continued volatility and growth to get to that steady state.

Farmland is a speculation that we won't completely degrade the topsoil that makes it useful for agriculture.

Exxon Mobile is a speculation that they'll be able to pivot their business out of carbon fuel long term. Even monster companies falter and fail. Exxon in particular is down 50% from its peak in 2014.

Income generating assets are fantastic, but owning them requires work to constantly re-assess the landscape that makes them capable of generating income. Some people like Buffett are really good at that game. Winners like him start to win even more when they have hundreds of billions of wealth to slosh around which gives them the power to create self fulfilling prophecies with their investments that you and I don't have individually.

This is why people have started using passive index funds as savings accounts, which seems to be starting to distort the market and has a lot of people worried that it will lead to a housing bubble like crash, especially with Boomers withdrawing their retirement savings from the market while Millennials and Gen X might not earn enough to outpace the withdrawals. A demographic bomb.

Do we really want a world where doctors feel compelled to waste valuable time and attention playing the stock market game because a savings account doesn't even pretend to protect your money from inflation anymore? People from all walks of life with money to protect are increasingly riddled with anxiety that the wealth they've worked hard to save is getting washed out from under them, and it's making us all a neurotic mess of a society.

I suppose you mean it's not possible without some sense of the value in relation to existing value networks? And this is the bootstrapping that fiat exchanges provide?

I love the poetry of lines spiraling out of Africa.

A metaphor for the dispersion of our species.

Every store of value that has ever existed and will ever exist is just a game of speculation that it will continue to be valued when you're ready to withdraw your money to do things you've saved for.

Gold was the best portable and fungible speculative bet for a very long time.

Bonds are speculation that a country will continue to be productive and well managed enough to pay their debts without resorting to massive inflation.

Stocks are a speculation that a company will continue to be competitive and profitable for long enough to recoup your investment.

Real estate is a speculation that an area will continue to be a desirable place to live or useful for some industry.

Rare art is a speculation that people will still be willing to pay millions for your original Picasso and that we won't be able to produce undetectable copies with better technology.

Bitcoin is a speculation that people want a digital, neutral store of value like gold was that they can park excess money in that they don't have a better use for right now.

A true cypherpunk would say that everyone should just start earning bitcoin directly to enter.

Yeah, this is a wildly ignorant take.

Pre 2017 was crazy volatile and unstable. It's still crazy, especially compared to regulated, national markets, but it does seem to be gradually smoothing out from the wildness of it's youth. https://www.buybitcoinworldwide.com/volatility-index/

It could get even more interesting if you have some NFT domains that are shared between different virtual realms, like different video games or social media sites.

Imagine owning a username in the form of an NFT, and every MMO game that integrates with that system will ensure that the owner and only the owner of that name can can use it in game.

Related, https://www.epsilontheory.com/taiwan-is-now-arrakis/

We all worship the thing that feeds us.

This right here.

We're in a huge bull run for an emerging asset class with little institutional support. Since no can ever perfectly predict when the herd is going to start to stampede, it's not at all surprising that the exchanges have been overwhelmed by support requests.

Trust is not just in the form of the institution itself being established and trustworthy, though that's important.

It's also whether the institution can effectively do cyber and key security. This is where a non tech first company like Chase would have a lot of trust to build.

Couldn't you make this case for many company stocks?

Jeff Bezos owns 20% of AMZN, most of which he hasn't touched since it's founding. Does that mean that AMZN isn't really a $1.5 trillion company?