Bitcoin Is Time

https://dergigi.com/2021/01/14/bitcoin-is-time/

by taylorwc • 5 years ago

444 1085 5 years ago

dergigi.com

personlurking• 5 years ago

Here's another good one (30 min read): Bitcoin is Venice

https://allenfarrington.medium.com/bitcoin-is-venice-8414dda...

gillesjacobs4• 5 years ago

Funny, I pinned Bitcoin more as the type to honeymoon at the Maldives.

Bitcoin is a Venice, time, a Ponzi scheme, a climate disaster, digital gold, dead (x400), criminal, a bubble...

The half-baked hot takes that reach the frontpage of HN are getting better and better.

tromp4• 5 years ago

With an emission of 1 per second forever, Grin is more like time (I make the case for uncapped supply in [1]).

[1] https://john-tromp.medium.com/a-case-for-using-soft-total-su...

smt88• 5 years ago

Isn't Bitcoin a combination of processing hardware and electricity?

Time, in the human sense, seems somewhat irrelevant because humans can't/don't hash manually.

Disclaimer: This site doesn't work in Firefox on Android for some reason, so I'm asking in total ignorance of the article's content.

imwillofficial• 5 years ago

Bitcoin is time, bitcoin is love, bitcoin is life.

moralsupply4• 5 years ago

Underrated comment

joshsyn3• 5 years ago

Buying bitcoin early would have put me 10 years ahead. Missed, maybe bitcoin cash isn't bad as everyone taints it to be.

joshsyn3• 5 years ago

Only a salty bitch would downvote this comment.

joosters3• 5 years ago

Time is money. Bitcoin is wasted time. And wasted money. And wasted energy.

kneel2• 5 years ago

Negative yielding debt is literally a waste of time. Money is worth less as you move into the future. Fiat is literally a black hole.

Scoundreller• 5 years ago

What percentage of assets are negative yielding?

They can’t all be negative in real terms.

whatever12• 5 years ago

Which is by design, to encourage investments elsewhere. The rise of Bitcoin and the stock market are probably an indication that the policy worked. People indeed are willing to burn their money in crypto rather than keeping them in savings/bonds

Dirlewanger• 5 years ago

Everything on the planet uses energy. Why are people so obsessed with Bitcoin's energy usage in particular?

ttul2• 5 years ago

Because it’s enormous? A colleague just finished putting together a 125MW BTC mining operation. That’s sheer insanity. Nobody has ever been able to explain how Bitcoin saves the world from climate catastrophe by using 0.3% of all electricity.

mopsi• 5 years ago

Concern trolling. A lot of jealousy hides behind environmental concerns these days. You went on a trip or bought a supercar? But MPG yada-yada-yada...

jsheard• 5 years ago

It uses orders of magnitude more energy than the "legacy" financial institutions it competes with, to process a fraction of the transactions, and has tenuous practical benefits unless you're a ransomware gang or an early mover getting rich from the hype.

bitcharmer• 5 years ago

Because Bitcoin requires insane amounts of energy compared to alternatives.

lxgr3• 5 years ago

A lot of resources on our planet are wasted every day, but only very little of that waste is intentional (as opposed to negligent).

chriswarbo2• 5 years ago

The core operating principle of Bitcoin is to waste energy. That's what "mining" is: wasting electricity to find useless numbers, such that the hash of each block starts with a certain number of zeros (a useless task).

This silly task (called HashCash https://en.wikipedia.org/wiki/Hashcash ) was chosen not because those numbers are somehow important to the algorithm or network, but rather as a way to slow down the rate of block creation: forcing people to waste energy on finding these numbers, in order to have their blocks accepted by the network.

It is important for bitcoin's security that the block chain can only grow slowly, since conflicts (like double-spending) are resolved by choosing the longest chain; if someone makes their own block chain that's longer than the main bitcoin chain, the network will switch to that and any payments on the previous chain will be forgotten. Using HashCash to slow down block creation makes this harder to pull off.

The difficulty of the HashCash task (the required number of zeros for the next block's hash) changes depending on how long it took to find the last block, such that it always takes about 10 minutes to find a block, regardless of how much energy is spent on this task, or any technology improvements (e.g. CPU vs GPU vs ASIC). In other words, wasting more energy on mining bitcoin, or making more efficient bitcoin mining hardware, will not find blocks any faster; the mining task will become harder to compensate, so it still takes about 10 minutes per block.

Bitcoin allows transactions to contain a 'fee' with a blank recipient, and each block can also contain a small payment 'from nowhere' as a reward/incentive. Miners create blocks which send these fees and rewards to themselves, then try to solve the HashCash task to make the block valid. Whoever solves it first sends their block to the network, it gets accepted as the longest chain, and hence that miner has received the fees and reward.

Miners can't make more money by solving HashCash faster, since it always takes about 10 minutes for a block's HashCash to be solved, at which point everyone starts looking for a following block (since that will form the longest chain), which may be even harder to find. Instead, wasting more energy on mining makes it more likely that a miner will be the one who finds the next block; since, on average, someone performing X% of all mining will find X% of all new blocks (and hence receive X% of the fees and rewards).

This creates a competition between miners, to try and waste more energy on HashCash than each other. This race-to-the-bottom breaks even when the energy wasted finding a block costs the same as all of the fees and rewards in that block; i.e. when all of those wasted megawatts are being spent for literally nothing (net).

There are other ways to slow down the creation of blocks, or to resolve conflicts which don't incentivise long chains; other cryptocurrencies are experimenting with such things.

dmm• 5 years ago

In the winter I ride my bike down streets lined with cars idling because their owners don't want to ride in the cold for a few minutes.

In a way I appreciate bitcoin for its absurd and unambiguous wastefulness. It's sort of the perfect expression of consumerism, destroying the precious and irreplaceable earth for something immediately disposed of.

arbawk8• 5 years ago

Bitcoin is the most durable money we've had, it can never be disposed of. Lost, perhaps.

Energy consumption != energy production. Bitcoin is incentivizing reusable energy and moving energy to cheaper locations, further from cities. I suggest you look into how it's actually quite positive for the Earth.

ketamine__3• 5 years ago

I think people generally want to enjoy their lives. I have a friend that keeps his house at 60F in the winter. I think you can argue that I'm not going to die at those temperatures or experience hypothermia. It's quite unpleasant nonetheless. During the summer if it's hot indoors I feel miserable and tired.

A lot of us could live a more simple life (i.e. no cars, fewer children). But humans are attracted to comfort and the ability to pursue their dreams.

Applejinx3• 5 years ago

And then when an exploit finally gets worked out, OR the governments being 'replaced' wage war on bitcoin and its ilk sufficient to obliterate its value (largely based on its acceptance in whatever form and the promise that it WILL replace government currency, in time), all the destruction will have been literally for nothing.

It's fiat currency combined with total energy crisis. It only retains value as long as people are willing to tolerate exponential destruction of resources by the already wealthy who can afford to bankroll any possible conversion of energy directly into 'money', no matter what workaround is required.

If it becomes 'the miners run for one second every day' and there is no way to cheat, these are the people who simply take the same amount of energy they were draining before, and come up with a way to store it the whole day… that or the world blacks out every day, because miners.

Bottom line is unless they get everything they want and dream of, including the eradication of government currency, the escalation will inevitably lead to a collapse where all the work becomes meaningless, valueless. All that energy will have been burned for NOTHING.

We just don't know when that will happen. Bitcoin is time, all right: time running out. Don't be caught still holding it when it pops.

leppr3• 5 years ago

It's sort of the perfect expression of consumerism

On the other hand, the finite supply/deflationary aspect of it is also the perfect antithesis of consumerism, in that it favors hoarding (spending less) instead of spending your paycheck as you get it.

naringas• 5 years ago

I don't see it as waste, I see it as the cost of decentralized trust (no such thing as free lunch).

The way I see it, it's either "burn" the energy in proof of work (the machines leave behind only heat and bitcoin) or let a closed institution take this energy to provide this trust.

In the end, it's all tradeoffs and incentives decided by politics and made possible by technologies.

joosters3• 5 years ago

To be less glib, I think the article makes it clear just how inordinately difficult blockchains make their lives when they have to build, from scratch, a reliable definition of time.

If you could have a trusted time source, you could at a stroke get rid of one of the most egregious flaws in bitcoin, its vast wastage of energy, because of its 'proof of work' mining. Bitcoin miners are running at full pelt 24/7, picking random numbers and doing math on them in the hope of striking lucky and discovering the next block. The mining difficult is artificially picked so that blocks are discovered about every ten minutes.

However, imagine if bitcoin miners could all declare a cease-fire, for 9m59s of those ten minutes, i.e. they just do nothing for that long, consuming virtually no energy, and then they all furiously mine at full speed for the last second (with the difficulty adjusted so the global mining should take a second). This process would be just as fair as the current one; if you have more/faster hardware, you will still mine more, in the same proportion as before. The total energy usage would be reduced 600-fold!

But - the reason you can't do this is that there's no way of stopping cheating. Who can tell if the other miners are really idling for those 9:59? This is where the time source comes in. Imagine you have a trusted time source: it could, every ten minutes, broadcast a random number. Miners would have to listen for this number, then mine a block containing it, to prove that they didn't start work early. Problem solved!

Back to the real world: just about everyone can agree on time; we have NTP and can even use certificates to authenticate clock sources, we can even use multiple sources to make it harder for time to be faked. So why can't blockchains do the same thing? Why don't they use multiple time oracles to stop the colossal energy wastage?

And, when bitcoiners tell you that relying on a centralised source, or even a quorum of sources, is completely unacceptable, why then are the same people happy to use smart contracts where the use of centralised oracles is apparently both acceptable and commonplace?

tromp4• 5 years ago

The total energy usage would be reduced 600-fold!

It wouldn't. If X$ worth of bitcoin is handed out every block, then miners competing for that prize are willing to collectively spend up to X$ per block on average.

If they could only mine for part of the time, then they'd simply acquire more hardware and mine at a higher hashrate during the shorter time.

reilly3000• 5 years ago

I think you’re right on, but good luck with provable timestamps. You’re trying to coordinate and validate a measurement which in itself denies the reality of space time physics at least subtly. Time precision across space is hard enough, but adding bad actors and gravitational time dilation into the equation means... well I wouldn’t want that to keep track of my assets.

ryanlol• 5 years ago

why then are the same people happy to use smart contracts where the use of centralised oracles is apparently both acceptable and commonplace?

This just isn’t true. Only a vanishingly small fraction of these people has ever touched smart contracts.

wanderingstan• 5 years ago

This is the problem claimed to be solved by Solana blockchain; proof of ordering, proof of time:

https://solana.com/solana-whitepaper.pdf

The core insight, I think, is this:

Proof of History is a sequence of computation that can provide a way to cryptographically verify passage of time between two events. It uses a cryp- tographically secure function written so that output cannot be predicted from the input, and must be completely executed to generate the output. The function is run in a sequence on a single core, its previous output as the current input, periodically recording the current output, and how many times its been called. The output can then be re-computed and verified by external computers in parallel by checking each sequence segment on a separate core. Data can be timestamped into this sequence by appending the data (or a hash of some data) into the state of the function. The recording of the state, index and data as it was appended into the sequences provides a timestamp that can guarantee that the data was created sometime before the next hash was generated in the sequence. This design also supports horizontal scaling as multiple generators can synchronize amongst each other by mixing their state into each others sequences. Horizontal scaling is discussed in depth in Section 4.4

cwkoss7• 5 years ago

And, when bitcoiners tell you that relying on a centralised source, or even a quorum of sources, is completely unacceptable, why then are the same people happy to use smart contracts where the use of centralised oracles is apparently both acceptable and commonplace?

I think you're largely describing two separate camps within bitcoin hodlers. Some are 'gold-bug' types that value security and individual liberty above all else, and so are very conservative in their attitude towards Bitcoin development. Others are 'cyberpunk' types that value technological capability and functionality, and are much more liberal and exploratory in what they'd like to see Bitcoin become.

When you say "same people", I think they are rare, and this statement makes a bit of a false lack-of-dichotomy.

howmayiannoyyou• 5 years ago

It takes 1/10th the time to initiate a funds transfer via crypto (eg. Bitcoin) as it does to effect the same wire transfer or ACH using most banks's treasury management systems. This, and the fees can be less depending on the token used; but are considerably less if the transfer is cross-currency. The transit time is about the same if BTC is used, less if one were to use XLM (Stellar) for example.

fanf2• 5 years ago

Where I am from, money transfers are free and instant

spiralx11• 5 years ago

Money transfers take less than 10 seconds where I am, don't project your countries antiquated banking systems onto the rest of the world.

mediaman2• 5 years ago

Bitcoin has a strong base of advocacy not based on any logic or utility but solely sprung from the mule stubbornness of those who profited from their speculation.

1. Bitcoin is environmentally damaging. It produces 37 megatons of CO2 per year and consumes 78 terawatt-hours of electricity annually. Much of that electric consumption is powered by coal. Not all energy consumption or CO2 output is bad, but value should be provided commensurately to society for the damage incurred. And yet:

2. It is a terrible currency. Promoters claimed we could pay for things with Bitcoin, that it'd replace fiat currency. But the design of Bitcoin in particular makes it an awful currency. To prevent deflation, a currency should be able to increase its supply to maintain reasonably constant velocity as demand increases for it as a medium of exchange. With its limited number of coins, Bitcoin cannot increase supply to maintain velocity: its only solution is to fractionalize, a form of deflation. And deflation is what we get. Massively: everything you own, and all your income, constantly becomes worth less expressed in Bitcoin, day after day.

3. It's a terrible currency, part two: currencies should have very low transaction costs. Bitcoin transaction costs exceed $20. The response to this is to recentralize it in the form of services that cheaply transact Bitcoin rights management through traditional databases. Eliminating the very value proposition of Bitcoin.

4. After having given up on defending it as a currency, the next claim is that it's a "store of value." But stores of value should have some degree of consistency of value: volatility is not a virtue. Bitcoin supporters are right that fiat currency, to the degree it is exposed to inflation, is at risk of not being the best store of value, which is why we don't normally keep huge amounts of resources piled up as cash. But Bitcoin is an awful store of value because it has no fundamental utility that moderates its price swings. Normal assets - real estate, bonds, gold - have some sort of fundamental utility or cash flow that helps to moderate price action over time. The asset must have some sort of use first, then it can become a good store of value. Because of the above flaws, Bitcoin has no good use, which thusly makes it a poor store of value.

None of this is a fundamental problem of crypto, just Bitcoin. Crypto could be very useful! But with many millionaires minted from a lucky speculation and their entire ego reliant on deceiving themselves that their speculation was clairvoyance, critiques of Bitcoin are invariably met with a flea market of intellectually mangy defenses that ultimately boil down to saying "well, look at its price!"

BTCOG3• 5 years ago

You have many severely fundamentally misunderstood ideas about Bitcoin.

Bitcoin is "money" and not a "currency." Bitcoin works very wonderfully as money.

Bitcoin is not very wasteful in energy, contrary to the pushed narrative by those that want everyone to believe this is truth. Bitcoin uses a tiny fraction, currently around 7-9% of the electricity that the global banking system currently uses. Bitcoin uses a very large portion of renewable energy sources, and will continue to balance it's energy use towards efficiency and optimizations.

Your part 2/3 etc, it's not a currency. Bitcoin is pure money. We also do not really ever use gold for currency. It is money. Bitcoin is a better money than gold. Once you stop drumming on the wrong path, you'll more easily understand the differences and stop banging your head about how it's a bad currency. It's not a great currency, while it is the very best form of money.

Your whole bit about meandering into defending it's value as currency or store of value, is just highlighting your total misunderstanding of the value of gold, or the new digital version of gold as money. Money IS a store of value.

Lastly, Bitcoin really has no fundamental problems. Nobody that knows about bitcoin gives a flying fuck about the price.

BTCOG3• 5 years ago

Absolute lies. @ Jooster's parent comment.

Furthermore, there are not "blockchains," there is one blockchain, and then there are a thousand or more scams trying ride Bitcoin's shoulders. They are entirely pointless systems that are not made to solve anything, they don't solve anything, and they were not made by mathematicians or cryptographers.

JxLS-cpgbe02• 5 years ago

Lots of small though-terminating clichés there. Any comments about this article?

phyro4• 5 years ago

Thank you for sharing this! I wrote a much shorter article on why I believe Grin is the closest to "time is money" here https://phyro.github.io/what-is-grin/grin_emission.html

Bitcoin can be thought of as a clock, but the unit that is being transfered can't be thought as time because for it to be mappable to time, you need a linear function and Bitcoin's emission is exponential because of the halvings.

hanniabu2• 5 years ago

How is Bitcoin's admission exponential? Isn't it a stepped linear emission?

tromp4• 5 years ago

It's inverse exponentially approaching the 21 million limit, which it can never reach [1].

[1] https://medium.com/amberdata/why-the-bitcoin-supply-will-nev...

eigenvalue• 5 years ago

It’s about the number of blocks though, not the amount of the mining block reward. I think you are conflating two different things.

phyro4• 5 years ago

I'm glad you mentioned this. Indeed, there are two different things. First is the linearity of blocks and the second is the linearity of the emission of units with which we transact. Bitcoin has the former, but does not have the latter. You can't unambiguously say "I'm going to buy an hour of Bitcoin" because this hour depends on _when_ you plan on buying them - the emission over any time interval (including one hour) changes over time due to the halvings. This is why I think coins with a constant emission (especially Grin where 1 coin is emitted every second) can bring to life the saying "time is money" because money becomes time. There is no difference between calling your 100 Grins "100 Seconds" and buying an hour of Grin. So yes, you're correct that the article talks about the "block time", but I think this can be pushed further where you not only have a global clock for events, but your unit of money is time itself.

P.S. I prefer thinking of a blockchain as a "drunk" clock, because of the variance that comes with the finding of a valid PoW. It might sway a bit left and right, but it mostly goes in the straight line in the end.

olah_114• 5 years ago

Thanks for linking the Grin article! Now you've sent me on a rabbit hole reading about different emission strategies and ideas. (I follow Beam development, so I love to read about both projects).

Doesn't the consistent emission of Grin depend upon the number of users and transactions also rising at the same consistent rate? Can we really count on that like we can count on the ticking of time?

phyro4• 5 years ago

Glad to hear that. In Grin, each block creates 60 coins. The time to mine a block is set to be 1 minute on average, so it will average out as 60 coins each minute and hence 1 coin per second. This won't be _exact_ of course due to the variance in block times so you definitely can't count on that - just like you can't count on Bitcoin getting exactly 24*6 blocks each day. But these systems are defined such that if the blocks start coming in too fast, they make them come slower and if they are coming in too slow, they make sure to make the puzzle easier to solve so the blocks can come faster. I think this follows the models they have good enough.

Taek3• 5 years ago

I don't think Grin does this but you can adjust the emission schedule based on the clock time (Sia does) so that the number of total coins produced on a given date is within a very tight bound of its expected amount, regardless of how much the hashrate has changed.

samatman6• 5 years ago

For what it's worth, I agree with you that Grin's emission scheme is the 'correct' one.

The effect of adding one coin to a pool of coins, on a steady schedule, results in inflation along a logarithmic curve. Inflation is about how much money is created relative to how much exists, so the second minute of Grin is 100% inflation, the third minute is 66%, and so on.

Also, people lose their cybercoins. It might average out that Grin hits a steady state, or even deflates a bit, depending on how frequently people or corporations lose their keys, die without heirs, send to a nonexistent address, and so on.

But even without this, the mining reward remains consistent even as overall inflation becomes negligible. Inflation never stops, but it does hit a point where it may as well have.

Bitcoin, by contrast, is guaranteed to be deflationary, and in fact the property that everyone holding BTC gets a permanent bump in asset value every time a bit of the ledger is lost strikes me as... moderately hazardous to the health of those who hold large allocations of the ledger.

I don't think this has much bearing on the article though, just wanted to tip the hat to another Grin respecter.

SideburnsOfDoom12• 5 years ago

Bitcoin is entropy.

Sheer wasted electricity.

arbawk8• 5 years ago

You didn't read the article, did you?

SideburnsOfDoom12• 5 years ago

I have ahem lost more than enough time on articles about Bitcoin, and its tiresome wide-eyed fanatics. The comments are bad enough.

UncleMeat13• 5 years ago

This kind of post is against HN rules.

Dzugaru• 5 years ago

Good read. Is there a similar take on how proof-of-stake can work (for example current sketch of Ethereum Casper protocol)?

gt565k2• 5 years ago

Check out Cardano's papers. Its PoS protocol has been live on mainnet for a while. Native token support just rolled out to mainnet yesterday and smart contracts are coming in Q2 this year.

It was founded by ETH co-founder Charles, who formed an academia network of CS PhD researchers to deal with 3rd gen blockchain problems and solutions.

It is 3rd gen blockchain built to handle the problems of ethereum and other blockchains that came prior.

https://docs.cardano.org/en/latest/explore-cardano/relevant-...

DennisP3• 5 years ago

Here are the two papers on Casper:

Casper the Friendly Finality Gadget: https://arxiv.org/abs/1710.09437

Combining GHOST and Casper: https://arxiv.org/abs/2003.03052

A very simple summary is that it's a fairly traditional consensus protocol, in which if anyone breaks the rules it's possible to prove who did it and penalize them by burning their stake. It achieves scale by using aggregated signatures.

johndoe42377• 5 years ago

Honestly, what kind of bullshit is this?

knodi• 5 years ago

Bitcoin has turned in a joke.

SideburnsOfDoom12• 5 years ago

When, if ever, was it serious?

joshsyn3• 5 years ago

A 1.5 trillion dollar joke. Thanks to the Fed who pumped trillions of dollars back in 2008

moralsupply4• 5 years ago

I'm certainly laughing with how much purchase power Bitcoin provided me so far.

I'll be laughing at your comment in 5 years time once a single Bitcoin will be valued above $1M USD while your fiat currency savings will have lost at least 50% of its current purchase power.

Screenshot this.

blobster2• 5 years ago

You're predicting >12% yearly inflation? That seems like a pretty bold prediction. I'm curious if you have any sources that would back your prediction.

hodder• 5 years ago

This is the most nonsense article Ive read in a long time. The leap after leap of bias is amazing.

capableweb5• 5 years ago

I'm not saying you're wrong, but if you're here to discuss, you might as well do it properly. I'd love to hear what exactly is nonsense (or if it's easier for you, what's not nonsense). Also pointing out the exact flaws regarding "leap of bias" would be helpful.

afc2• 5 years ago

I agree. I believe strongly in Bitcoin, but I think this article was just a bunch of pompous poetry without any substance. "The difficulty adjustment makes sure that the ticks of Bitcoin’s internal metronome are somewhat constant. It is the conductor of the Bitcoin orchestra. It is what keeps the music alive." Blah blah blah blah! So much fluff to say so little...

capableweb5• 5 years ago

I feel like your expectations are a bit off. What did you expect from a blogpost titled "Bitcoin Is Time"? A serious whitepaper on how Bitcoin actually is what we consider time? Of course it's gonna be fluffy poetry, it's right there in the title!

iamcurious• 5 years ago

He presents bitcoin as a way of knowing if some event happened after some other event, that is a clock, where are all the bias leaps?

keiferski• 5 years ago

Nothing is less material than money. . . . Money is abstract, I repeated, money is future time. It can be an evening in the suburbs, it can be the music of Brahms, it can be maps, it can be chess, it can be coffee, it can be the words of Epictetus teaching us to despise gold. Money is a Proteus more versatile than the one on the island of Pharos.

—Jorge Luis Borges, “The Zahir”

https://longreads.com/2016/06/14/borges-and-money/

zitterbewegung• 5 years ago

Nearly any currency when used in commerce is primarily used as an IOU for time. Due how the POW is designed to ensure immutability of the blockchain it also is dependent on how cheap it is to generate energy for the people who mine.

Comparing it to a bank with fiat a bank usually ensures the consistency of transactions so miners perform this action (and also developers of bitcoin if there are security holes) and your wallet is an account and bitcoin have a transaction cost which is like using a debit card associated with an account.

73737373732• 5 years ago

Richard Dawkins said in an offhand comment in The Selfish Gene that “Money is a formal token of delayed reciprocal altruism.” - https://nakamotoinstitute.org/reciprocal-altruism-in-the-the...

dnautics2• 5 years ago

This isn't too far off from the point that David graeber makes in debt: the first 5000 years

seph-reed2• 5 years ago

This is an amazingly refined definition.

octocop• 5 years ago

Thanks for the link, really interesting stuff.

Sebastian_09• 5 years ago

Along these lines, there is an excellent book by John Kenneth Galbraith - Money: Whence It Came, Where It Went (1975) that covers the whole history of money, with much details & wit

snarf21• 5 years ago

I've always thought about it this way: We trade our time (work) for money and later trade that money for time (other's work). We see this manifestation in lots of places: bus is cheap but also costs time vs limousine is expensive but uses minimum time. Growing food is dirt cheap but also costs time vs buying produce is expensive but uses minimum time. This exchange has also allowed the producers to invest in efficiencies and economies of scale. All told, this is why I generally have a rule to not spend money on anything that doesn't buy me time, it is my most limited resource.

tachyonbeam2• 5 years ago

That sounds almost poetic. I wish people who mindlessly rail against capitalism on twitter actually took the time to understand how these systems work. I think many of them would like to believe that we can all live in a system without currency. They don't realize that much of the freedom we enjoy today comes from capitalism. The ability to start your own business, and more fundamentally, to decide how your money (and time) is spent. Communism and centralized control over resource utilization necessarily results in less freedom.

randomopining• 5 years ago

Bitcoin is deflationary thus by nature it lets you lock in your time-value.

gt565k2• 5 years ago

Why are we still talking about bitcoin and first gen blockchain tech. Yes it's old, yes it's slow, yes it wastes resources. It is legacy software after all.

PoS solves the problem of mining and wasted energy.

Cardano's Ouroboros is a provable and secure Proof-of-Stake blockchain protocol.

https://docs.cardano.org/en/latest/explore-cardano/relevant-...

ksm1717• 5 years ago

I wonder the same thing about people that still talk about cars. Electric cars solve all the problems with cars. Why do we even bother to talk about cars?

user-the-name8• 5 years ago

PoS solves the problem of mining and wasted energy.

For a value of "solves" that doesn't actually include anyone solving anything YET. Maybe in 18 months!

olah_114• 5 years ago

I'm not saying this is you, but many people on HN will cry out "Use Boring Tech!" while also not understanding why Bitcoin is king.

Bitcoin is old, secure, proven, and most importantly _simple_.

Of course what you sacrifice with Proof of Stake is sovereignty. A random person cannot participate in the network unless they have X amount of existing resources. So that's the trade-off as I understand it. Depends on where your values align. No doubt that existing financial institutions would prefer to be core partners with a performant PoS chain.

vekker• 5 years ago

Doesn't the same hold for PoW systems, except the X amount is in the form of mining resources? This is why people argue PoS blockchains are (besides being more eco-friendly) actually more decentralized.

Erlich_Bachman11• 5 years ago

Your point could be truth in theory, and/or in the future.

However, in practice, it seems that it almost works the other way around.

To mine on BTC, you cannot enter the game with 10$ to your name. You can't buy a mining rig, it is way too wasteful to mine on your existing CPU, etc.

However if we look for example at staking in Ethereum, there are decentralized (no trust required) pools that allow you to stake however little amount of ETH. The chain itself will require at least 32ETH to run a single meaningful staking contract, but through pooling this is directly practically accessible to anyone with even small amount of ETH.

casi3• 5 years ago

pretty weird seeing this recent trend of hn going from crypto-resistant, to cardano pumping. out of all the blockchains cardano? thats where you see the future? really?

bizarre.

Erlich_Bachman11• 5 years ago

Pretend that someone is really reading and trying to understand for a moment ;).

What do you see in Cardano that makes it a poor candidate for a future blockchain? Governance? Functionality? Algorithms? Investment?

UncleMeat13• 5 years ago

Why are we still talking about bitcoin and first gen blockchain tech.

Because it doesn't seem to be going away faster than the newer generations. There is a real chance that if cryptocurrency ends up being a thing forever that BTC is the winner. And that is an environmental disaster until we get to 100% clean energy worldwide.

Applejinx3• 5 years ago

Even then. This stuff produces heat.

The way the scaling operates, as it goes along, even if you had FREE energy piped from a hyperspatial link in the heart of the Sun… eventually the ASIC farms themselves will begin to cook the planet.

It doesn't stay alive and profitable unless it keeps burning energy MORE. The fact that the energy's going to come from the dirtiest and most dangerous (cheapest) possible fuels, is certainly a problem and will continue to be one for as long as such fuels exist, but in the literal absence of fuel and cost of fuel, the exponential-growth thing just switches to the computers turning (now free and infinite) energy into calculation.

There is always a bigger server farm, because such a thing costs money, and those with money are the ones who can and will make more of it. With cryptocurrency, that's just literal, and their profitability is always a perfect and direct match with how hard they can cheat or abuse any possible rule there to constrain them. The end result, perfectly untraceable and fungible, as long as the system is allowed to continue.

Disaster will always be more profitable, in cryptocurrency-land. I mean, I suppose you could play nice and barely make any money…

SkipperCat• 5 years ago

Bitcoin is only popular because tech workers get paid a lot and have the ability to speculate, we live in a world of massive asset bubbles created by government fiscal policies and Bitcoin is excellent for buying drugs on-line.

Most people want security in their assets, which is why a majority of folks read articles about bitcoin but never touch one.

All of these articles are great examples of creative writing. I do kind of enjoy them.

arbawk8• 5 years ago

Actually it's pretty important for many: https://www.youtube.com/watch?v=xLYYh4aPXAM

It's being widely adopted in countries with inflating currencies: Nigeria, Vietnma, and Argentina made it to #3 today (this link is slightly old). https://www.statista.com/chart/18345/crypto-currency-adoptio...

bena• 5 years ago

I see this being thrown about as a talking point a lot, but I think it ignores what's fundamentally happening here.

Bitcoin is essentially a proxy for another currency. Mostly the USD. These people need a way to protect their assets from what their own governments are doing to the value of their native currencies.

They cannot buy securities or foreign currencies for various reasons.

Bitcoin gives them a way. A way to convert their native currencies into USD, a stronger currency.

So while it's a good use-case for Bitcoin, it's not exactly a situation that's applicable to the world at large.

PragmaticPulp5• 5 years ago

Ironically, the number of people who use Bitcoin directly (that is, on the blockchain with their own address) is significantly smaller.

Most people use Bitcoin via exchanges, where they keep the coins. The average crypto user from Nigeria has zero interest in paying $10+ transaction fees every time they need to do anything with their money.

At this point, it doesn't matter if they own BTC or ETH or DOGE or whatever. They just want whatever allows them to move money around. The exchanges could simply keep balances in a database and reconcile them amongst each other via contracts, and it wouldn't make any difference as far as the end users are concerned (There are examples of this happening between exchanges).

dcist2• 5 years ago

I fail to see how something with wildly fluctuating value like bitcoin can ever serve as a stable currency or medium of exchange.

Maybe it's a "less terrible" solution in poor countries with inflation challenges, but I don't see that as a strong proposition for the utility of bitcoin. Cigarettes are used as a medium of exchange in prison. That doesn't serve as a strong argument for using cigarettes as currency.

neilwilson3• 5 years ago

"we live in a world of massive asset bubbles created by government fiscal policies"

Do we? Or have we lived in a world where asset prices were suppressed due to artificial intervention by central banks.

Interest rate setting is a market intervention. If left to its own devices the market rate would be driven down towards zero.

flurben2• 5 years ago

If left to its own devices the market rate would be driven down towards zero.

How do you figure?

lolsal2• 5 years ago

Being driven down to zero I think means people would lend at 0% interest - I would think thousands of years of anecdotal evidence would speak to the contrary - how would it ever get to zero? Who would lend like that? What would their motivation be?

capableweb5• 5 years ago

Bitcoin is excellent for buying drugs on-line.

Out of all cryptocurrencies that exist today, Bitcoin is probably the worst one for buying drugs online. It's pseudo-anonymous at best (compared to Zcash that is actually anonymous), slower than many others and if government agencies have tracking tools in the cryptocurrency space, Bitcoin is probably the most popular target for those tools.

vocatus_gate2• 5 years ago

Zcash is not anonymous; cloaked transactions are optional and hardly anyone uses them (so they stick out like a sore thumb). It also requires trust that the founders aren't printing hidden coins (due to its flawed "trusted initialization" procedure used at the coins inception).

Monero/XMR is the only 100% private, fungible cryptocurrency. All transactions enforced private by default, with no option to send an un-private transaction.

tootahe45• 5 years ago

I'm pretty sure it's primarily poor people buying into crypto, not tech workers. Go to r/cryptocurrency and read the posts, does it look like HN (primarily tech people)? are there any technical discussions, or is it just full of get-rich-quick hopers?

hint: posts mostly consist of "<famous guy> tweeted about <my favourite shitcoin>, this is good for the price of <my favourite shitcoin>".

vocatus_gate2• 5 years ago

Correct. If anything, tech workers like we find on HN tend to be more openly against Bitcoin (specifically) and cryptocurrency in general. The people I see buying it on /r/cryptocurrency are the ones posting "finally managed to get 0.01 BTC!"

olah_114• 5 years ago

This is the article that made things finally click with me. Thinking about the pre-WWI gold standard and the issues that existed there and the improvements that Bitcoin brings around time, consensus, etc.

The baseless negative comments with no interaction with the article content confirms for me that Bitcoin is on to something. Sour grapes syndrome is a result of pride, I think.

user-the-name8• 5 years ago

There is nothing baseless in saying that using 0.1% of the entire world's energy in order to do 3 transactions per second is beyond ludicrous, and an environmental disaster of massive proportions.

olah_114• 5 years ago

using 0.1% of the entire world's energy in order to do 3 transactions per second is beyond ludicrous

In comparison to what?

What do we get in return? Many consider the benefits to be worth it.

arbawk8• 5 years ago

Now do the gold mining industry, and then how USD is backed by armies. And then you can research Lightning Network on top of Bitcoin and how it can process an unlimited number of transactions.

doomroot3• 5 years ago

Here me out. What if it was the only way to defund the US military? Would you be interested then? Why do we waste so much energy building killing machines? Why is there not a daily hackernews thread complaining about the energy consumption of the US military?

Because it’s a necessary to ensure you can buy and sell things when you want to.

toto4444• 5 years ago

Sour grapes syndrome is a result of pride, I think.

Or maybe it comes from people who have read an Econo101 textbook and who have spent a lot of time trying to explain a crowd of Bitcoin enthusiasts why their reasoning is wrong but no one has been listening to them so far so they are bored.

Back in the time I used to spend my days on a forum about Economics. Every other week there was a random guy who signed up just to explain us his grand new theory about money. It seems that tech has enabled a grand new theory about money to be implemented.

That does not make it less true that money does not have magical properties and bitcoin will not create a new world order.

Erlich_Bachman11• 5 years ago

That does not make it less true that money does not have magical properties and bitcoin will not create a new world order.

Is anyone really claiming that? The OP's post doesn't seem to be in this spirit anyway. It's more like "Bitcoin has true usefulness, it will keep some meaningful value for a long time, enable other use cases that didn't even exist before.". Nobody is saying that it is going to replace all other forms of money.

ballofrubber17• 5 years ago

Would you care to share your Econo101 knowledge?

I'm not an economist, but nothing has convinced me yet that bitcoin is not the best form of money.

phroobster• 5 years ago

Someone reading an econ101 textbook and immediately deciding that Bitcoin is unnecessary is an amusing example of Dunning-Kruger :)

jakeva• 5 years ago

I'm close with a person holding a Ph.D. in economics (close as in she's my girlfriend), and she would absolutely enjoy arguing with you.

thebean112• 5 years ago

Do you really think it's feasible everyone else is simply missing some entry level economics knowledge? That's more likely than you missing something, or misunderstanding that very econ 101 knowledge?

I took more than 101, and not sure what you refer to there.

hfsp5• 5 years ago

Or maybe it comes from people who have read an Econo101 textbook and who have spent a lot of time trying to explain a crowd of Bitcoin enthusiasts why their reasoning is wrong

The market decides. Not an economics "expert", nor fitting btc to an arbitrary theoretical definition of money.

It seems that tech has enabled a grand new theory about money to be implemented.

Are you aware of the Austrian school of economics?

thewarrior• 5 years ago

I recently decided to think deeply about Bitcoin and I think my initial skepticism about Bitcoin was wrong. Most of the criticisms of Bitcoin are centered around the fact that Bitcoin has a very low throughput. However this is not necessarily a problem. And here is one hypothetical example of how we can overcome this issue:

When countries owe each other money they used to transfer gold back and forth or trust someone else to do it for them. So all transactions within a country would happen in a local currency and then once in a while "settlement" would happen.

Bitcoin is digital gold for settlements among digital currencies. For eg I could start a new Stable coin called MyDogeCoin HQed in Switzerland and each MyDogeCoin is backed by 1 Bitcoin. Anyone who trusts me can transact in MyDogeCoins and can convert their MyDogeCoins into Bitcoins if they are willing to wait and pay a sizable fee to account for Bitcoins slowness. However most people don't need this it just needs to be possible. Now anyone using MyDogeCoin can send money to each other quickly as long as they trust me. This isn't any different to how you trust a country. And many countries like Zimbabwe aren't trust worthy at all. This has BTC behind it.

Now suppose you want to send MyDogeCoin to MyMemeCoin HQed in Singapore and is similar. We trust each other and hence we do the transfer. Once in a while we do a "settlement" on the BTC blockchain. This way we don't need that many TPS. And large untrusted nodes can use the BTC blockchain as a trustless settlement layer.

Since BTC is the final trustless layer its a foundation. Now I realized how BTC can have long term value and it could be around even a 100 years from now. Doesn't mean its not over priced now but it will have a non zero value over the long term and is revolutionary. Unless the government goes to war against it. The US government used to use gold and then basically defaulted and forced everyone to accept dollars by force. Thats not sustainable.

inter_netuser4• 5 years ago

And down the rabbit hole we fall.

nickysielicki4• 5 years ago

Bitcoin is digital gold for settlements among digital currencies.

What are the implications of this on the network stability wrt mining? Doesn't bitcoin need transaction volume to remain a stable network?

My read is that the incentive structure changes. Right now, miners are motivated by block rewards. In the future, they'll be motivated by transaction fees. If transactions are rare, mining profitably is going to become much more difficult. Pair this with 51% attacks, and the long ramp-up of mining capabilities starts to look like it will regress after the the rewards go to zero. Can the network survive that?

cyphertruck26• 5 years ago

In Bitcoin, the “local currency” equivalent to your “MyDogeCoin” example is called The lightning network.

Simplifying a bit to support your analogy:

Bitcoin lets you lock coins on the chain for a certain amount of time. Two people can do this, then trade bitcoin transactions back and forth without submitting them.

For example, I lock coins and give my coworker a bitcoin transaction I have signed giving him $10 worth of bitcoin for my share of the days lunch. Next day he fives me one for $13 for his share, and I give the restaurant $43 for the bill— all these transactions are literally trading bitcoin IOUs, but in a nearly trustless way.

This means a great deal of transactions can happen off chain without the risk of theft.

UncleMeat13• 5 years ago

That's all fine, but the argument isn't that BTC has some use case. The argument is that BTC has some use case that is so valuable that the combined value of all BTC should be in the tens or hundreds of trillions of dollars.

Geee4• 5 years ago

There are also trustless ways to do that. Bitcoin's Lightning Network does exactly this in trustless way, and it's feeless, instant and private. Every "Lightning bitcoin" is cryptographically backed by real bitcoin. In the end, all transactions are settled on the Bitcoin main chain.

Then there are centralized credit networks backed by Bitcoin. Paypal and Visa (with a custodian / bank) already provide this, in combination with a seamless exchange to local currency that is accepted by the merchant. For custodians, it's possible to algorithmically prove reserves, so that every user can verify that their "bitcoin IOU" is backed by actual bitcoin, but no one currently provides this afaik.

nerdkid93• 5 years ago

then basically defaulted and forced everyone to accept dollars by force

I found 3 instances of "defaults" over the history of the U.S. Federal Government[0], and I cannot figure out to which of those occurrences you might be referring. Bretton Woods was the agreement that made the USD the world's reserve currency, and that lasted for 30ish years while the U.S. was still on the gold standard.

[0] Has the U.S. Government Ever "Defaulted"? https://fas.org/sgp/crs/misc/R44704.pdf

ori_b2• 5 years ago

Why are you so excited about a really inefficient clearing house? We already have those.

krrrh• 5 years ago

One of the properties of gold that roughly held true for centuries was a stable value. When gold threatened to become too scarce for a growing economy the incentive to mine, explore, and develop new mining technology increased. Goldbugs often point out that an ounce of gold has always been close to the price of a nice suit (admittedly a fuzzy measure, and it’s sometimes a really nice suit, and sometimes just a really nice jacket).

Bitcoin has gone from pennies, to around $100 for a year, to around $1000 for a year or two, to between $20000 and $3000 for a few years, and now to $50-60k.

I guess you could argue that this is just going to take a few decades to stabilize, but that’s a pretty big bet, and a pretty weird way to design the next monetary framework.

There was a pretty interesting Clubhouse discussion on the weekend where Eric Weinstein praised the genius of Bitcoin but bemoaned the stupidity of its design (“a QWERTY problem”), and Lex Fridman tried to charitably compare Bitcoin to JavaScript as a flawed tech that had great distribution and has been making the best of it since then. They were both rudely dismissed by a group of Bitcoin maximalists as “not getting it”.

The question I’ve asked since the start is, if this is a functional idea, why is the dumb beta version still the dominant implementation? There’s a bizarre religiousity and post hoc rationalizations for some of the weirdest decisions in its design, and mistaking speculative mania and nominal price for success, while proposed uses for Bitcoin and the blockchain have been quietly discarded. Bitcoin’s valuation is more of a symptom of post-2008 monetary conditions than a long-term challenge to them.

svachalek2• 5 years ago

This idea is a big one behind the development of modern crypto currencies. Ideas like "Layer 2", "Zero Knowledge Rollups", and "Parachains" are all built on the idea that not everything that happens needs to be on the main blockchain.

Personally I suspect that eventually a more modern blockchain will become the base level of record, or more likely that we may never settle on a single one, but indeed with proper layering it could all be BTC in the end.

rax0m• 5 years ago

Good takeaway.

Sounds like something straight out of The Bitcoin Standard [1].

[1] https://www.goodreads.com/book/show/36448501-the-bitcoin-sta...

stjohnswarts2• 5 years ago

But why use bitcoin? It is completely inferior to a lot of the coin technology that came after which can be used as "moneY' and not a store of value. I think that ultimately this will be its downfall and something else will replace it. Unlike gold it doesn't have any inherent value and isn't necessarily forever. It's almost impossible to lose a few tons of gold, whereas bitcoin can be wiped out (on a national "store" level) with one dumb (or insane) wallet holder(government official)

noxer17• 5 years ago

Bitcoin is onto something

What if it "was"?

The "hate" people express against bitcoin especially here on HN is often towards the implementation. People clearly see the flaw in PoW if they are not emotionally attached to it because they have no money at stake. You should not misinterpret that as hate because they missed the train to richness.

Objectively PoW does not scale. Objectively we have DLTs (blockchains) with Federated Byzantine Agreement (FBA) instead of PoW/PoS that can do everything Bitcoin can and more without the most severe downsides that come with PoW/PoS. The future will probably bring even better tech and if we learned something from the past then its that better solution always take over the old worse solutions. Bitcoin ultimately has to fail because its not a system that could be upgraded. Its most fundamental core properties are intentionally not changeable.

Erlich_Bachman11• 5 years ago

But did you really include Lightning Network in your mental calculations? If so, care to elaborate on what exactly would stop it from working? (I mean it already works now, there is nothing technical that is going to stop it from scaling)?

cloakandswagger• 5 years ago

People clearly see the flaw in PoW if they are not emotionally attached to it because they have no money at stake. You should not misinterpret that as hate because they missed the train to richness.

The vitriol that Bitcoin evokes from HN commenters can really only be explained by jealousy, the environmental concern is just a cover for covetousness.

cyphertruck26• 5 years ago

As an engineer with twenty years experience in this space and nearly as long studying the economics of it, I have yet to see a replacement for PoW that solves the problem that PoW solves.

Proof of Work is trustless decentralization.

Proof of stake is trusting the dudes who premined the coin and sold you a “fix for bitcoins inherent problem” to hype their ICO.

If you were right, after 10 years one of those PoS currencies would be winning. Can you even remember the proof of stake currencies from 2011?

Why did they fail? After all they had a huge economic advantage over bitcoin mining as they cost effectively zero electricity.

Can you answer that question?

loceng3• 5 years ago

Lazy people who don't read an article and comment becomes a proof point that Bitcoin is onto something? That's an extremely weak argument point.

And arguably there's a much larger mob of people who haven't critically thought through any of Bitcoin - who own Bitcoin - but that are financially incentivized to promote Bitcoin or are biased to want Bitcoin to become something.

Convincing yourself that someone commenting negatively about Bitcoin is simply jealous is also a common thing I've seen many Bitcoin owners use to justify ignoring legitimate counter-narratives of a lot of propaganda.

Aunche6• 5 years ago

Bitcoin is nothing like gold. Gold has inherent value. If I buy 100% of the world's gold, gold would still be valuable. If I buy 100% of the world's bitcoin, it's the same as owning no Bitcoin. Gold would be immensely valued during an extreme global crisis (WWIII, massive solar flare, etc) whereas bitcoin would be entirely useless.

olah_114• 5 years ago

If I buy 100% of the world's gold, gold would still be valuable

Sure, yes. It would be valuable in the way that a barrel of oil is valuable. It has a number of practical uses in electronics, medicine, etc. Valuable as a currency or means of transferring wealth? Not as much. It's cumbersome for that role.

Bitcoin's value is not "coins". It is valuable for what it does (transfer wealth). It's a ledger, not really "coins".

Did you read the original article? It's actually worth the read if you didn't yet.

ssss112• 5 years ago

Yes, you're right. It's very common for people to refuse to attempt to understand something new and change their mind on a topic. At the same time, crypto has the potential to change the status quo for everyone and those invested in the existing financial systems don't want their pride hurt, adding to the refusal to impartially analyse crypto and make their own decision.

kozak• 5 years ago

If you liked this article, you will probably also enjoy "Mysteries of Modern Physics: Time" by Sean Carroll (I listened to it as an audiobook, I don't know what other formats it is available in).

A12-B• 5 years ago

The article implies bitcoin could be something other than money, in that it is just a really useful ledger.

gillesjacobs4• 5 years ago

Proof-of-history using verifiable delay functions (VDF) is a valid consensus mechanism that scales of PoS and PoW networks [1]. Solana is build on top of it and it looks very promising as a fast consensus mechanism.

OP pretty much explains the intuition behind why history as a sequence of events in a blockchain works, but Bitcoin PoW is different from PoH as maintaining order is the main work done and not a side-effect.

1. https://medium.com/solana-labs/proof-of-history-a-clock-for-...

bearerofgarbage• 5 years ago

what problem of value does it solve?

every post including cryptocoin here gets a generic comment like yours about some other cryptocoin that is 'very promising'

jtms• 5 years ago

It appears that it solves the problem of there needing to be yet another cryptocurrency

gillesjacobs4• 5 years ago

I wanted to share a cool algorithm related to the time as consensus. My intention was not to shill a specific project.

I follow alternative consensus algorithms and trustless decentralized app tech in the blockchain space because I think it is interesting and democratizing tech. I do not own half of the coins I follow and couldn't care less for speculation. Technologically, cryptocurrency is still an exiting domain and scepticism is in place, but the blind hate for anything blockchain on HN is a bit OTT.

Erlich_Bachman11• 5 years ago

Maybe try reading the post again? I have no affiliation or even opinion about that coin, but it is painfully clear for that post only that the proposed problem of value is

"valid consensus mechanism that scales of PoS and PoW networks".

Half of the comments on this page complain about how Bitcoin uses too much energy and how PoW is wasteful. This is a direct (allegedly, if what they write is correct) solution to exactly that.

dandanua4• 5 years ago

Bitcoin network is constantly readjusting mining complexity, so that every new block will be mined in approximately 10 minutes. Then, they substitute the notion of time with the sequence of Bitcoin blocks. Yeah, well done!

Bitcoin proponents are becoming more and more insane.

Vecr5• 5 years ago

It's always been like this, I'm not sure what you mean by "becoming". According to this article, the concept comes from a series of papers from the 1990s.

olalonde3• 5 years ago

Bitcoin proponents are becoming more and more insane.

Don't give them too much credit. The notion of time in distributed systems has been defined "insanely" since at least 1978[0].

[0] https://en.wikipedia.org/wiki/Lamport_timestamp

dandanua4• 5 years ago

EDIT: To be honest, knowledge of the hash of a block can be used as a proof that something has happened AFTER a particular event (similarly to a picture of a hostage with the newspaper).

But you can't prove that something has happened BEFORE a particular event using Bitcoin hashes.

Also, this "feature" is unrelated to Bitcoin being a cryptocurrency. You can have cryptocurrencies without "global time" (e.g. NANO).

mtve• 5 years ago

But you can't prove that something has happened BEFORE a particular event using Bitcoin hashes.

https://opentimestamps.org/

ravenstine• 5 years ago

Or is it the detractors that are becoming more and more insane? Perhaps it's both. There are so many detractors who seem to have the need to go "hurmph!" every time someone mentions Bitcoin, and often times they have knowledge gaps that destroy their credibility. In every Bitcoin related thread here on HN, there's tons of detractors who make ridiculous claims around the utility and mechanics of Bitcoin that it's hard to take them seriously. Why are they so invested in shouting down Bitcoin in the first place? If someone doesn't like Bitcoin, they can simply not use it. There's nothing wrong with healthy criticism, but it's there's an air of emotional insecurity in these people that makes me wonder whether they're former Bitcoin supporters who got burned after 2017 because of their misconceptions.

dandanua4• 5 years ago

What kind of misconceptions and knowledge gaps are you talking about? Do you have examples of some unfair criticism of Bitcoin?

Geee4• 5 years ago

I think the insane people are getting louder. :)

option_greek• 5 years ago

HN comments on articles like this remind me of a fun t-shirt quote:

There are 10 kinds of people in the world. The ones who understand binary and the ones that do not.

You can obviously replace binary with bitcoin :). The ones who do not get bitcoin, will continue to not get bitcoin.

mdoms2• 5 years ago

Yes you can replace "binary" with "bitcoin", if you absolutely don't understand the joke, at all.

greggturkington• 5 years ago

And hopefully we can keep the discussion a bit more insightful than "a fun t-shirt quote" prior to Eternal September

justicezyx• 5 years ago

Not the first time I whine about the elusiveness of human writing: I could not find what's the article talking about after scrolling one screen...

agumonkey2• 5 years ago

Talking about that I see a few projects throwing the idea generalized of time limited currency. I find the idea a bit interesting and weird at the same time.

gnrlst• 5 years ago

I'm ready to be downvoted to oblivion, especially by all the Bitcoin purists, but I hope my message sparks at least some curiosity.

Bitcoin is getting "weaker" every year for several reasons:

- emerging centralization due to economies of scale. If this trend continues the mining power will be so consolidated that a 51% attack will be likely. The Nakamoto coefficient is already at 4, and tending towards 3.

- energy usage due to Proof of Work is growing astronomically, and the higher the price of bitcoin, the less incentive there is to use renewable energy. Bitcoin uses more energy than the country of Argentina.

- transaction times are SLOW, and expensive. The lightning network is incredibly buggy and won't actually solve the problems it's promising.

There is a better alternative. RaiBlocks, named nano since 2018. It got a bad rap due to the BitGrail hack, but it's picking up steam again. The developer community is great, the main dev team on the Nano protocol has been consistently chugging along regardless of the 3 years of crypto winter on a shoestring budget and the nano community is made up of users, not speculators.

This article sums it up quite nicely: https://senatusspqr.medium.com/why-nano-is-the-ultimate-stor...

I'm happy to receive downvotes, but all I ask in return is that you give it a read with an open mind.

mmastrac• 5 years ago

The lightning network is incredibly buggy and won't actually solve the problems it's promising

I'm curious to know why this is the case. I don't know much about it - ELI5 or a good link to read more?

rawtxapp4• 5 years ago

It's not, it's fully functional and there are many users. Only people who haven't actually tried using it says things like "it's incredibly buggy".

paulmd• 5 years ago

The lightning network is incredibly buggy and won't actually solve the problems it's promising.

it's actually worse than that - lightning only works in the context of centralized banking. It presumes there is some other entity with whom you can hold a channel open, who you do roughly equivalent amounts of deposits and withdrawals from. If that criterion is not met, then you have to keep closing channels and re-opening new ones, each of which incurs a new transaction fee just like if you did it yourself. So it is still expensive to send arbitrary transactions, it is just now relatively cheap to do "banking" with a single entity.

That entity sending money for you may still be expensive as well. If they have another entity who they do roughly equal amounts of transactions and withdrawals from then yes, they can nominally transact that for free, but they will still probably charge you for the service, and having that bank send a payment to an arbitrary user with whom they don't have balanced deposits/withdrawals incurs the normal bitcoin transaction fee. You can see where all of this is going - Lightning doesn't really solve anything, it still is only optimized for transactions between large, centralized entities.

Oh, and if you ever lose power or internet then your channel has to be closed and resolved, then reopened if you want to do further business. So you have to pay a transaction fee every time you lose internet (or there is a routing problem somewhere on the net) or power.

rawtxapp4• 5 years ago

you have to keep closing channels and re-opening new ones, each of which incurs a new transaction fee just like if you did it yourself.

Channel factories will significantly reduce the need to go to the blockchain to open and close channels.

if you ever lose power or internet then your channel has to be closed and resolved

This is complete non-sense, your channel lives on as long as you don't close it, if you're concerned about counterparty risk, you can use a watchtower.

la_fayette• 5 years ago

This is not true! RTFM

varajelle• 5 years ago

It presumes there is some other entity with whom you can hold a channel open, who you do roughly equivalent amounts of deposits and withdrawals from.

I don't get how you go from there to "centralised banking". Contrary to a bank, you do not need to trust this entity with your money. Also it is not centralised, there can be many such entity and they connect together.

pwm2• 5 years ago

This is incorrect and highly misleading. You don't have to open and close channels like that. Instead you keep them open and do circular rebalances when your channels are imbalanced. As an experiment I've been running an lnd node for the last 6 months. During this time I've routed 1445 transactions totalling 4.68249963 BTC (~223K USD currently) and only closed a handful of channels, using single digit sat/vB as it's not urgent. Lightning transaction fees in general are negligible at today's btc price. You transact with all your peers for free while you usually pay a fraction of a cent for sending transactions anywhere in the graph. Transactions are pretty much instant.

After running it for 6 months, I could certainly criticise various aspects of lnd but none of what you have written falls into the valid criticism category.

yholio2• 5 years ago

So it's a 100% premine that already pushes on 1 billion market capitalization. How is that any different from the Bitcoin bubble?

keymone4• 5 years ago

Valid observation. The difference is that bitcoin isn’t a premine.

jes5199• 5 years ago

can you explain your point about renewable energy? I'm not sure I see how that follows

diego• 5 years ago

It doesn't follow. Bitcoin chases cheap energy, so wherever green is cheaper than carbon that's where Bitcoin will be mined. Eventually carbon will be more expensive everywhere.

aeturnum• 5 years ago

I think the idea is that, as mining fees and power generation requirements increase, you have less incentive to build the most efficient power generation (renewables) and increasing incentives to build financially reliable proven technologies. Coal power plants, though less efficient than solar, have a much better known lifecycle and are easier to plan around.

Sparkyte• 5 years ago

There is also no meaningful contribution for the work. Imagine if there was a blockchain crypto attached to folding@home it would work that has value.

monkeydust• 5 years ago

Isn't that Gridcoin (GRC)

Franciscouzo• 5 years ago

That's by design, if you use a proof of work that's validated outside of the blockchain, the work could be valid for multiple forks, thus being a really bad proof of work system.

birdsbirdsbirds• 5 years ago

From the article:

they [the central banks] can expand the money supply to keep the system propped up.

They have to expand money supply to keep the value of the currencies stable as long as most money is not spent. The economy depends not on the supply of money but on the stability of the money.

By which force do central banks have to keep increasing the money supply once people start spending? There is no reason to do so and thus no reason for fiat currencies to collapse.

It's more likely that they increase interest rates when people start spending again, and thus reduce supply and as a consequence, keep the value of money stable.

spiralx11• 5 years ago

The economy depends not on the supply of money but on the stability of the money.

The supply of money is adjusted to match how much is needed, it's the entire reason why countries switched to fiat currencies. Everything else being equal, if the GDP is growing 5% each year you need 5% more money each year to keep the same velocity of money i.e. how much is being used in the economy.

https://www.investopedia.com/terms/v/velocity.asp

benlivengood• 5 years ago

There's also the other Bitcoin, BCH, which suffers from basically none of the problems you listed.

If a 51% attack was actually lucrative then shouldn't at least some miners attempt it given that BTC hash-power is about 100X that of BCH?

xirbeosbwo1234• 5 years ago

It suffers from all the same problems. The only advantage it has is that they chose a slightly larger arbitrary constant. It still does not and can not scale. One order of magnitude makes little difference when we're dealing with something that is four orders of magnitude slower and four orders of magnitude more power-hungry than the competition.

100 maximum transactions per second is still orders of magnitude too low to be useful on a daily basis outside of niche uses (read: drugs). Ten minutes confirmation time is still orders of magnitude worse than credit cards or cash.

Obviously, what we need is the REAL Bitcoin from the confirmed legitimate Satoshi Nakamoto: Bitcoin SV.

WanderPanda• 5 years ago

But a 51% attack (with e.g. a double spend) will be easily spotted by the community, right? What would be the incentive for an actor with such a vast amount of specialised hardware just for Bitcoin mining, to undermine its security? Its not that I'm saying it is not possible but its your usage of "likely" that I would argue against

betterunix29• 5 years ago

You are assuming that the attacker would not gain more from a general loss of faith in Bitcoin than they would gain from controlling Bitcoin itself. That is a bad assumption. What if the attacker is trying to push a competing system? What if the attacker holds short Bitcoin futures contracts?

vngzs• 5 years ago

I see the ideological foundation for a theoretical 51% attack more aligned with causing mass disruption & chaos than some kind of financial gain. Yes, it would likely be detected. But it would undermine BTC, lots of people would lose lots of money, lots of businesses would go under, portions of the global banking system would be disrupted and likely pushed back to more centralized alternatives. The most likely threat actor for such an attack would therefore be a nation-state.

China is the only country pushing that kind of hash rate at the moment, so we should analyze whether the move would be beneficial to them in order to determine the risk.

PragmaticPulp5• 5 years ago

But a 51% attack (with e.g. a double spend) will be easily spotted by the community, right?

The real problem is that if it happens once, it's proven to be both possible and practical. And once it's proven to be possible and practical, how do you know it won't happen again and again?

What would be the incentive for an actor with such a vast amount of specialised hardware just for Bitcoin mining, to undermine its security?

Most mining hardware is specific to hashing, not Bitcoin specifically.

The obvious attack is something like this: Imagine someone invents a Bitcoin competitor that is somehow more resistant to these types of attacks, yet can use the same mining hardware. To convince everyone to switch to their new alternative (which they have accumulated significant amounts of, similar to Satoshi), they spend the money to crash Bitcoin, while advertising themselves as the more secure alternative to Bitcoin.

csomar• 5 years ago

The difference is that Bitcoin success was largely accidental. People are very touchy about others getting a head start. Miners got their Bitcoins by burning electricity, this makes it a "fair deal" despite destroying the environment. Satoshi disappeared and never moved his coins, which removes the "pre-mine" aspect.

tarsinge• 5 years ago

The lightning network is incredibly buggy and won't actually solve the problems it's promising.

Not an expert but I found that a readable summary of different layer 2 scaling strategies and why Ethereum developers prefer Rollups instead of Channels (like Lightning):

https://vitalik.ca/general/2021/01/05/rollup.html

westurner• 5 years ago

"Bitcoin scalability problem" could link to the Ethereum design docs: https://en.wikipedia.org/wiki/Bitcoin_scalability_problem

The Ethereum design docs could link to direct-listed premined [stable] coins as a solution for Proof of Work and TPS reports: https://github.com/flare-eng/coston#smart-contracts-with-xrp

(edit) re: n-layer solutions: The https://interledger.org/ RFCs and something like Transaction Permission Layer (TPL) will probably be helpful for interchain compliance.

Interledger is not tied to a single company, blockchain, or currency.

From https://tplprotocol.org/ :

The challenge: Current blockchain-based protocols lack an effective governance mechanism that ensures token transfers comply with requirements set by the project that issued the token.
Projects need to set requirements for a variety of reasons. For instance, remaining compliant with securities laws, limiting transfer to beta testers, or limiting transfer to a particular geo-spatial location. Whatever your reason, if a requirement can be verified by a third-party, TPL will be able to help.

In the US, S-Corps can't have international or more than n shareholders, for example; so if firms even wanted to issue securities on a first-layer network, they'd need an extra-chain compliance mechanism to ensure that their issuance is legal pursuant to local, sovereign, necessary policies. Re-issuing stock certificates is something that has to be done sometimes. When is it possible to cancel outstanding tokens?

wmf• 5 years ago

Talking about different layer 2 scaling strategies implicitly ignores much simpler layer 1 scaling, e.g. Avalanche.

sphix0r• 5 years ago

It's really sad to see the current state of bitcoin. We can't really justify the current energy consumption while mainly being used as a financial instrument to speculate on.

Nano has been on my eye for a while now. I hope Nano will get the attention it deserves. Sub second feeless money settlement transactions is such a game changer. Nano just works.

akudha• 5 years ago

Any thoughts on Cardano? They seem to be moving slow, but they also seem to be taking a more rigorous approach.

domatic1• 5 years ago

- 51% attack is unlikely, pools have mining power but every miner on the pool has to agree to the attack so it is still decentralized.

- energy usage of gold is worse, that's not a good argument. What is the energy use of air conditioners?

- transactions are slow yes but bitcoin is now used as a store of value

- I'm sorry but nano doesn't have the network effect Bitcoin has and never will.

lxgr3• 5 years ago

every miner on the pool has to agree to the attack so it is still decentralized

Do you think most miners are continuously auditing the blocks they are solving?

Yes, long-term they'd switch away from a dishonest/non-value-aligned pool, but the damage might already be done at that point.

imhoguy• 5 years ago

51% attack is unlikely, pools have mining power but every miner on the pool has to agree to the attack so it is still decentralized.

Ok, what if they agree somehow either by govt order or massive worm hack (Stuxnet like)?

fwiwm2c7• 5 years ago

Stop shilling. And to have the galls to say something like Nano has the ability to take on Bitcoin just indicates that you very new to this market - and thus want to make a quick buck by shilling your random shitcoin. The thing which Bitcoin has, and that few others can match, is acceptability from a large swatch of investors and predictable security/emission schedule.

And, just fyi, Nano is not made of users. Go to its reddit and you will see everyone shilling it and having price targets on it. Stop giving such these weak arguments - most of us are in here for the money and don't give two hoots of the technology.

swagonomixxx• 5 years ago

And, just fyi, Nano is not made of users. Go to its reddit and you will see everyone shilling it and having price targets on it.

Not saying you're wrong, but this feels like every subreddit dedicated to a crypto.

Judgmentality• 5 years ago

most of us are in here for the money

This seems a little ironic after complaining about shilling.

koonsolo• 5 years ago

The Nano reddit is split up because of this reason:

You have NanoTrade where these things are discussed, and you have NanoCurrency where Nano itself and adoption is discussed.

zepto13• 5 years ago

most of us are in here for the money and don't give two hoots of the technology

Given that the technology determines the timeframe over which you can make money, this seems like a weird position to take.

the_local_host• 5 years ago

What's wrong with shilling?

iameli• 5 years ago

most of us are in here for the money and don't give two hoots of the technology.

Nice to hear someone say the quiet part loud. Could you tell all the rest of the most-of-us to be honest about that too? It'd save me a lot of time in conversations where people refuse to consider any Bitcoin alternatives because they'd lose money if people started to switch.

matheusmoreira4• 5 years ago

most of us are in here for the money and don't give two hoots of the technology

Monero's technology enables private and untraceable transactions. It's amazing and I own some just because of that property. Seems to be the only cryptocurrency that still aims to be an actual currency.

You're right about the altcoins though.

ironman1478• 5 years ago

This is a bit off topic, but if you were here for the money shouldn't you just be in the stock market? It seems like the people who really try and analyze it (like in quantitative trading) do extremely well and if you don't have the time for that (who does outside of work), then mutual funds have a great return on investment and are significantly less risky and have a way lower barrier to entry. I am a bit ignorant on the economics of bitcoin (though I have built a miner and did all the merkle tree stuff), but its unclear how bitcoin is better unless you have a lot of capital already and can stomach the risk.

agumonkey2• 5 years ago

People should be Giving Ada a Chance

dang2• 5 years ago

Attacking another user like this will get you banned here. Accusations of shillage are not ok unless you have specific evidence and in that case you should be sending it to hn@ycombinator.com so we can investigate. Internet cheap shots about astroturfing and shillage are explicitly against the site guidelines because they're so common, so toxic, and typically so completely wrong.

https://news.ycombinator.com/newsguidelines.html

hfsp5• 5 years ago

The market has spoken: https://www.tradingview.com/symbols/NANOBTC/.

pcthrowaway• 5 years ago

I'd take a look at Cardano: https://coinlib.io/en/compare/2020-06-01/ADA/NANO

kache_• 5 years ago

Is it really getting this easy to create a shill account and bot it on hnews?

aeternum3• 5 years ago

Suppose I create a new coin that I also call Nano. I create a bunch of bots and websites and post on message boards so it looks like my version is more popular and has more participants.

How will people tell the difference?

fwiwm2c7• 5 years ago

You won't. This is why Bitcoin is valuable since it has stood the test of time and has gained more acceptability. Nanos and other nonsense coins are just trying to attack the emperor in the hope that they come close to it and thus make the speculators a lot of money.

barnbuilder• 5 years ago

There are people and organizations attempting to do this with Bitcoin right now. How do people tell the difference? Sometimes they don't and they get scammed.

matheusmoreira4• 5 years ago

Bitcoin is technologically obsolete but that doesn't matter. As the very first coin, its history is the main reason it's still relevant today. It's very well known and that makes its position as the number one cryptocurrency extremely hard to shake even though we have much better coins now such as Monero.

Nursie10• 5 years ago

Bitcoin is technologically obsolete but that doesn't matter.

Which just underlines how much of this whole phenomenon is brand and hype.

trts• 5 years ago

What is the incentive for a 51% attack (on Bitcoin specifically)

Wouldn't it take a large number of resources and coordinated effort to do this? And then the result of a successful attack means that the value essentially drops to zero ... so why invest the effort?

Seems like the only entity to have this incentive would be central banks / fiat regimes.

TobyBrull• 5 years ago

Given that Bitcoin has become quite liquid, there might also be ways to short it. But yes, governments doing it for political reasons would seem like the most obvious incentive.

tablespoon2• 5 years ago

What is the incentive for a 51% attack (on Bitcoin specifically)

Besides trying to destroy bitcoin, couldn't such an attack be used to simply drive up transaction fees for anyone who wanted to use it? For instance, if they refuse to process transactions with a fee below a threshold, they'd leave money on the table in the sort term, but eventually the higher fee requirement would have to be discovered and transactions reissued to pay it.

keymone4• 5 years ago

Nano is a scam. Nano fanboys don’t even get the concept of latency on the internet, forget anything more complex like recovery from network partitions. There are reasons behind most of the things that you consider drawbacks in bitcoin, shitcoin proponents don’t understand those reasons and simply copy bitcoin with some parameter changed, completely oblivious to the fact that it makes their shitcoin worthless.

splintercell2• 5 years ago

Leave it to the bitcoin maxis to make the term "scam" meaningless. If bitconnect and nano are both scams, then the word has no meaning.

companyhen2• 5 years ago

If you want to see a real Decentralized Central Bank I highly recommend digging into SORA Network.

It's a self-funded project by the founder (No VC's, No ICO, No Presale, etc.) with a fair launch and the team has already developed a live central bank digital currency called Bakong in Cambodia.

https://sora.org/

https://sora.org/blog/

https://sora.org/soratokens/

https://soramitsu.co.jp/

superbcarrot• 5 years ago

The sibling comments show just how difficult it is to talk constructively about these things even at a place like HN. I have no idea about the technical merits of Nano but the emotionally charged reactions with little argumentation aren't helping anyone. Is there a place online where people actually discusss cryptocurrencies on a technical/economic merit? That kind of discussion certainly isn't happening on reddit, and sadly not on HN either.

companyhen2• 5 years ago

That is why someone created https://www.reddit.com/r/CryptoTechnology/

Solvitieg2• 5 years ago

energy usage due to Proof of Work is growing astronomically, and the higher the price of bitcoin

Not true. The energy used to power the bitcoin network has been stable for a few years.

https://digiconomist.net/bitcoin-energy-consumption

crazypython2• 5 years ago

"The Nakamoto coefficient is a way to quantify the decentralization of a blockchain or other decentralized system. It's the number of entities you need to compromise at least one essential subsystem."

If a 51% attack occurs, the bitcoin full nodes are still fundamentally in control. Full nodes decide whether or not to accept a blockchain, they socially decide whether to accept a 51% attack. They can hard fork and change the hashing algorithm, firing all current miners.

How does Nano prevent me from setting up two servers, sending the money to different nodes, and double-spending the money?

BLKNSLVR5• 5 years ago

Yep, Nano is all the things bitcoin was attempting to be initially. Using Nano is a breeze, it feels like the future, especially compared to bitcoin in terms of speed.

drdeca2• 5 years ago

not sure what you mean by "weaker". If you mean the security, then, I would think that would be a result of energy use going down, not energy use going up. (but as someone else pointed out, the power use seems to be steady, and neither trending up nor down)

(that being said, it becoming more centralized might be an issue for security, yes. I don't know how (de)centralized it currently is though)

Also, isn't there a rule or guideline or something discouraging talking about how getting downvoted?

chairmanwow1• 5 years ago

Bitcoin transactions are super fast compared to modern banks.

abledon• 5 years ago

I'm curious how 70% of mining of BTC is done by China... how USA will react to allow BTC to take over their financial territory? Can governments step in and do some sort of play on this to not lose out on their value?

moralsupply4• 5 years ago

Check again. 70% of the mining pools are in China

The majority of the hash rate is produced in the USA

f4302• 5 years ago

You mean bitcoin is a ticking time bomb kept afloat by an unbacked asset that is now the target of Federal agencies?

shoshino• 5 years ago

Tether's impact on the price of Bitcoin is grossly misreported and without basis.

The only "Federal agency" targeting Tether was the New York Attorney General's office, however the investigation was settled last month with with no admission of guilt from Tether.

f4302• 5 years ago

did you even read the settlement?

anthropodie12• 5 years ago

That was an excellent read!

Every time I read about Bitcoin here, I see the "Energy" arguments. Bitcoin was designed to solve a specific problem and it solves that. Even Satoshi himself would not have foreseen the energy requirements for PoW.

If we had argued about energy requirements in late 60s we would have never reached Moon or built the LHC. Technological advancements will always need energy. We should be discussing about how to efficiently harness that big fiery ball in space instead of shutting down technological advancements.

raziel27012• 5 years ago

What problem did bitcoin solve?

anthropodie12• 5 years ago

Did you read the article?

aeternum3• 5 years ago

It allows one to store a relatively liquid form of wealth using only one's mind

openfuture• 5 years ago

The Byzantine generals problem.

tim3334• 5 years ago

Distributed digital money.

seph-reed2• 5 years ago

IMO, the energy requirement aspect is tragic because it scales. Even as we unlock greater and greater sources of power, Bitcoin will scale to take more and more energy. It's almost like a parasite for electricity.

Right now it's not so bad, but the trajectory is a real problem.

zepto13• 5 years ago

If we had argued about energy requirements in late 60s we would have never reached Moon or built the LHC.

This is not even close to true.

The energy requirements for the Saturn program and for the LHC were calculated and understood in precise detail, and did not depend on any assumption that there would be new energy sources in the future.

anthropodie12• 5 years ago

The study that raised concerns regarding Bitcoin's energy usage also suggests the amount of electricity consumed every year by always-on but inactive home devices in the US alone could power the entire Bitcoin network for a year[1].

I am not trying to undermine Bitcoin's energy problem. We need more discussion and awareness on this than just labeling "Bitcoin bad" because it consumes more energy.

[1] https://www.bbc.com/news/technology-56012952

boredpandas7772• 5 years ago

Let me fix that title. Happy to be downvoted into negative territory. I only have 11 points. Go ahead.

"Bitcoin Is A Waste of Time (and Resources)"

What Bitcoin has done is that it taught people they can come together in a sustained flash mob (like an on-the-fly hedge fund operation) and manipulate the price of speculative assets by creating artificial short-term pump-n-dump type demand. Bitcoin has trained our collective neural network to do this.

The huddled masses can take their new superpower and apply it to stock, crypto, commodities on the commodity exchange, and all kinds of speculative assets, especially the virtual kind.

It's taken a gambling-friendly society with feverish lust for winning (think for-profit fantasy sports, online poker, day trading, Vegas et al) and turned us into a giant decentralized casino.

reader_mode• 5 years ago

Interest rates are negative - if you're saving in cash you're losing money. Everyone is happy to gamble in assets and commodities because the money has to go somewhere and it's not like there's infinite opportunities the money can go into, so it's "to the moon" on the markets.

epx3• 5 years ago

This is one of the few positives about Bitcoin - if people choose to sink money into it, effectively redistributing weatlh to people that bought these useless hashes when they were sold at $100, real estate, gold and other useful things we want will not appreciate as fast as if it didn't exist :)

imtringued17• 5 years ago

Yes this is true. What people want is a less risky investment/inflation hedge and the Fed is forcing people to accept more risk. That's not a good thing because there are better ways to utilize the stimulus money.

anthropodie12• 5 years ago

Happy to be downvoted into negative territory.

I see another comment on top doing the same. Why do people start with this? If you don't bother you should not even brought that up. Seems like an underhanded way of getting more points. Do people even fall for this?

screaminghawk• 5 years ago

Yes. It's a common pattern on reddit (and probably other sites) to let people know your intentions, thoughts and feelings to give context to the content of your post

renewiltord3• 5 years ago

It's a very effective meme. Like most such memes, it worms itself inside, and the vehicle doesn't consciously know of its presence. These people aren't thinking "I'll do this. It'll get me votes". It is unconscious mimetic memetics, if you will :)

Some of these memes become elevated into conscious actions. For instance, people cynically exploit "Linux can't do X" to get help for X. But some memes are unconscious and I think "I'll be downvoted for this" or "Get out of here with your facts and reason" or "Source?" are definitely examples of these.

Personally, I think many of the privacy and security comments are also memes that propagate through mimicry of success, but that's its own thing.

edem• 5 years ago

I happily downvoted just because of this.

olalonde3• 5 years ago

It's against HN's guidelines. I systematically downvote any comment that does it.

Igelau5• 5 years ago

For most other topics, I'd probably agree. In the case of crypto currencies it's important to point out that you'd rather hear compelling counterarguments rather than the all too frequent "You're right but I wish you weren't" downvotes.

samatman6• 5 years ago

I have a personal policy, which, if treated as a Kantian imperative, would eliminate this.

Any invitation to downvotes, I take. Any comment about downvotes, means at the least that I won't upvote that comment. Meta-comments about downvotes are exempt, I would probably upvote this comment if I saw it from someone else.

Every person who adopts this policy improves the discourse by discouraging this behavior, please consider it!

guardiangod• 5 years ago

For the last 4 months I auto down vote whenever a post mentions 'downvote me', then I read the comment and see if it merits unvote.

So far I have reverted only once on HN.

byset3• 5 years ago

given how much HN hates bitcoin, it's curious that anyone would assume anti-bitcoin boilerplate would get downvoted here

Aunche6• 5 years ago

Do people even fall for this?

According to OP's comment, it has received 76 - 11 = 65 karma as of now.

ryanSrich2• 5 years ago

It's a reddit technique to gain more fake internet points.

patcon• 5 years ago

Yes, adversarialist sentence fragments are examples of thought-porn that does very well on HN :)

fredfoobar44• 5 years ago

I've been saying the same damn thing about automobiles man, horses already have self driving even! and they don't pollute like cars.

Look at the mess we're in now! who's laughing?? Cars pollute and need roads, we had to build so many roads and gas stations. We even had to go to war to make sure we have enough oil.

ForHackernews• 5 years ago

I guess the difference is cars are useful.

What can I do with a bitcoin except hope to sell it for more USD later?

claudiulodro• 5 years ago

You're being sarcastic, but honestly you've converted me. :)

foepys• 5 years ago

Horses literally put shit on the streets. Imagine replacing each car with a horse and think about the amount of poop.

Horses are also dangerous. A friend of mine lost almost all of their teeth because their horse kicked them in the face when they cleaned its hooves.

newsbinator• 5 years ago

I agree that cars are a horrible solution to the problem of transporting people and goods.

It's only by virtue of history and our willingness to accept massive loss of life and limb every year that cars, driven at 100 kph by sleepy, angry, elderly or distracted people, are still a thing.

Not to mention the massive loss of life and limb from climate change spurred by cars.

You're making a solid point.

anthropodie12• 5 years ago

I have been trying to convince this in comments here but you did a damn good job with the analogy and now I am gonna use it every time this comes up. Thank you.

Igelau5• 5 years ago

Now that you mention it, if my car was a living creature, I'd probably give a damn about taking care of it...

perfect_kiss4• 5 years ago

I got the feeling this post is a bit sarcastic, because it references horses, as opposed to automobiles.

If you just replace "horses" with "mass public transit", "railroads" and "electrobikes", it suddenly starts to make much more sense.

fredfoobar44• 5 years ago

Now that people are understanding that horses are better, can I turn your attention to concrete?

The manufacture of cement produces about 0.9 pounds of CO2 for every pound of cement. Since cement is only a fraction of the constituents in concrete, manufacturing a cubic yard of concrete (about 3900 lbs) is responsible for emitting about 400 lbs of CO2.

We should stop making things out of concrete, it's destroying our climate, Mud huts are more than enough to protect us from the elements. We have so much land in the US, why can't we all spread out instead of building high rises??

Edit: who's downvoting this? look at the replies below, people know this is a real problem.

bennysonething• 5 years ago

O know this a joke, but the other problem with horses is fuel: endless fields for hay. So wilderness destruction.

_ea1k3• 5 years ago

One of the motivating factors behind late 19th century horseless carriages was the reduction in pollution.

It isn't at all accurate to say that horses don't pollute. In some respects their pollution is worse.

root_axis3• 5 years ago

lol, cars have some tradeoffs as compared to horses, but overall they are a vast improvement to the problem of transportation compared to horses. Bitcoin is generally worse than what came before, despite being a new and otherwise interesting phenomenon unto itself.

glitchc6• 5 years ago

As much as it's funny, this is a false analogy. Horses don't travel as fast as cars, or as far. They also can't pull/carry as much as a car, let alone a truck. How many horses are needed to carry the same load as one 18 wheeler?

Would Amazon be possible without trucks? How about Walmart?

hannasanarion15• 5 years ago

This is accidentally a good analogy.

Because yes, cars have made the world materially worse, not because horses are better, but because dense urban development, public transit, walking, and cycling is better.

Cars are enormously wasteful, much like bitcoin is, not only because it uses way more energy than is necessary for the task it is performing (~90% of the energy used by cars is spent to move the car, not the cargo or people), but also because it takes up space that could be used for more useful things: the average American city has 8 parking spaces per car, that means that each car on the road represents an entire ~1600sqft house that can't be built because a car needs places to park.

FlyingSnake• 5 years ago

I almost typed a snarky remark, but then realized that you make a valid point with that analogy. However the analogy feels a little weak to me:

We even had to go to war to make sure we have enough oil

I don't see countries going to war over BTC (or the mining pool) as they already have cornered all the fiat currencies in a tight system. All they could do is sabotage the BTC system and make it less lucrative for normal public.

AndrewUnmuted• 5 years ago

Horses also have a lifespan of up to 30 years. These days you're lucky if you can get 8 years out of your car.

ssss112• 5 years ago

I love this!

smolder5• 5 years ago

This would be a great analogy if Bitcoin were useful and not just a poor substitute for trust.

Held_der_Arbeit• 5 years ago

Horsecrap everywhere!

We tried that, we switched to automobiles.

epx3• 5 years ago

Two wrongs don't make a right. And there are different levels of being wrong.

temp00345• 5 years ago

If 'cars' as means of transportation are analogous to bitcoin as currency, then the car would cost a fortune and you'd keep it in the garage, while driving around on a horse.

Valakas_• 5 years ago

That analogy could be applied to anything supposedly new. There's many things that failed where you could've barged in and said exactly the same.

thebean112• 5 years ago

Are you implying a cause and effect relationship from crypto to the GME stuff?

I think thats a big "citation needed" from me..seems more likely both are on the "effect" side.

Let me fix that title. Happy to be downvoted into negative territory. I only have 11 points. Go ahead.

How brave..

rafale• 5 years ago

How many "bubbles" you know that have been through multiple boom and bust cycles? The US economy doesn't count.

dgs_sgd2• 5 years ago

Do you think all the institutional investors who have bought billions worth of bitcoin in the last several months see it as a pump-n-dump?

devoutsalsa• 5 years ago

They make money from you when you use their services. If FinancialCo thinks you'll buy Bitcoin, they'll offer it to you for a fee. They'd sell investments in inflatable dinosaurs if they could make enough money from fees for doing so.

nathias• 5 years ago

do you think bitcoin invented capitalism?

jksmith• 5 years ago

In the analog perception of time it takes for me to complain about kids getting on my lawn, a measurable percentage of the pics taken in the 20th century were just now taken digitally.

nightski• 5 years ago

This distinction is so tiring. It's just not interesting calling something gambling as if that is supposed to be bad. Every move we make is a gamble (yes, even storing that precious cash in the bank). Money is all about opportunity cost and choosing to do nothing is just as much of a gamble as doing something like storing it in bitcoin. Sticking ones head in the sand doesn't change the fact that your only choice is to place your bets and gamble.

lxgr3• 5 years ago

Everything is indeed a game, but not all games are zero-sum.

I feel like when people criticize games, they are often implicitly referring to the latter kind, and in that sense, it‘s often constructive criticism.

nexthash• 5 years ago

I think you are the one with your head firmly shoved in the sand. Bitcoin has enormous problems with legality, energy usage, lack of trust, hacking, and slow, expensive transactions that make it a really shitty alternative to fiat. Bitcoin isn't just a gamble - its sole use as of now is as a pump and dump scam. There is no earthly reason why a digital token should be worth $50k a pop. Bitcoin is a shitty bet, and I'd take USD and a bank account any day over it.

thenoblesunfish• 5 years ago

I love when you come to write a comment and someone did it for you :D

99_005• 5 years ago

It's not new. History is full of these schemes. Eventually everyone who wants bitcoin has bought it, and there are no more bids.

Scott_Sanderson• 5 years ago

But yet . . .

Would you say eventually everyone who wants dollars will have enough and the demand for new dollars will be zero?

BLKNSLVR5• 5 years ago

The entire world of finance is built upon there being an infinitely increasing supply of people who want to buy in.

You're effectively saying that the global economy is also a scheme. I wouldn't disagree with that, it's just that what you're describing isn't unique to bitcoin.

oliv__• 5 years ago

I'm genuinely amazed at how you're able to take such an in-depth, thoughtfully written article, and reduce it into a mere "bitcoin is a waste of time, people are gamblers".

Igelau5• 5 years ago

I'm not sure if you're trying to dismiss the parent comment, or if this is a damning observation on "thought" regarding bitcoin. Probably some of both, right?

fwiwm2c7• 5 years ago

He likely didn't read it. People have strong visceral reactions when they hear about Bitcoin - mostly because a lot of them are salty.

matwood• 5 years ago

I was a little disappointed since the poster didn't weave in tulips...

crazydoggers• 5 years ago

I’ve come to realize, that prejudice is amplified online. Prejudice is, at its root, poorly examined opinions based on insufficient evidence.

Prejudice gets amplified because it often seems insightful, and online, barraged by information all day, people click, read these blurbs and one liners, then pass them on.

Prejudice is also emotionally satisfying because typically people believe what is already inline with their beliefs. So taking the time to research and understand topics is not as pleasurable as passing along prejudice.

It’s all around us online, from simple celebrity gossip, to political analysis, on and on.

We’ve somehow as a society got to get our heads around the fact that this form of communication online is brand new to the human experience, and we have to understand it’s impacting us in new ways.

I fear all the ways Prejudice is pushing us apart, and away from fact, understanding, and compassion.

Solvitieg2• 5 years ago

It's easier to parrot a tired critique than it is to contribute a useful thought.

What's concerning is its the top comment on this HN thread.

ryanSrich2• 5 years ago

Hacker News' Law - The most negative comments receive the most amount of votes on any thread related to Bitcoin or Cryptocurrency.

imtringued17• 5 years ago

I'm more amazed that people reach the correct conclusion without thinking too much. Snarky people don't have any right to be this "smart".

If you start off with the stupid explanations of Bitcoin HODLers then it requires a lot of deep thinking to debunk all of it and ultimately reach the same conclusion as those snarky people.

silasdavis• 5 years ago

The idea you could be downvoted on hacker news for being anti-crypto is a novel one

jakupovic5• 5 years ago

I do remember when Linux was the useless technology and didn't have any use case, we already had all the OSes we needed. This wasn't the story on this forum, but it was popular. Same thing here.

ta1234567890• 5 years ago

You just described the stock market. The only difference is that before, there were only a handful of people with the power and tools to manipulate it (ie. Wall Street), whereas now, due to the power of the Internet and social networks, masses of people are able to coordinate to achieve similar effects.

In a way, what has been happening lately, is the democratization of the power to game the system. Which doesn’t mean that now anyone can do it, but rather that it is not limited only to the rich and powerful anymore (until they figure out a way to gate-keep it again).

UncleMeat13• 5 years ago

The stock market is a place to purchase productive assets. That share I own represents actual work done by human beings to produce goods and services. That BTC I own represents an immutable thing that itself does nothing.

imtringued17• 5 years ago

The stock market suffers from the same biases that Bitcoin speculators suffer from. However, Bitcoin only suffers from the biases. At least with the stock market the stock actually represents a company, even if its overvalued. However, when people are talking about the stock market absolutely nobody wants it to be out of whack with reality. All those people who are bullish on Tesla want Tesla to become a huge company that is worth its valuation. The fact that it probably won't happen is just something we have to accept and consider the risk when buying Tesla stock.

People insist on chaos with Bitcoin. It's the only way you can make money off of it.

olalonde3• 5 years ago

Why are no-coiners so obsessed with price? You dismiss a breakthrough technology, and probably skipped on reading a quite interesting article, because you don't like Bitcoin's price graph and the fact it attracts speculators?

hoka-one-one• 5 years ago

Thank you, HN top-comment Bitcoin pessimist blogposter #378

2-tpg• 5 years ago

In my country, bitcoin guards against inflation. Local currency in relation to the dollar, in 2020, I lost 50%. Bitcoin in relation to the dollar, in 2020, did 300%.

Bitcoin here is a wealth transfer from the older generation to the newer generation. The older generation owns and invests the real estate, and this keeps the prices high and exclusive. The newer generation (techn-savvy) can now use crypto profits to fund innovation and progress. Several people I know funded their own startups.

Of course the crypto market attracts tons of scum and shady people too. And the hype can be damaging (older generation buying in at all-time-highs, and panic selling, causing high variance).

Early adopters were far from the huddled masses. Can't really blame them for others jumping on the hype train, just like you can't judge someone holding gold, by all the criminals holding gold or states going to war over it. Forget energy usage for a second, and wonder, "how many people actually die yearly to keep the dollar valuation high?" I feel the "resource waste" is more a feature, than a bug. If you need the electricity of entire countries to attack the network, the network becomes more robust.

And then let the new rich generation use their profits on creating more green or nuclear energy, then keep on mining and holding. Tesla could perhaps help here. Industries where energy is a large part of the budget have the right economic incentives to make renewable energy more cost-effective. Older economies, industries, and hegemonies are married to oil, in aggregate pollute far more, and lack the right incentives.

Poker is a game of skill which will serve you well if trading. Don't judge the game by the drunk pot-splashing tourists, or the risk-averse spectators in the stands, or the regulators looking for a ban after being lobbied by the older generation.

Edit: I stopped bickering about and promoting bitcoin on HN when the price was around 4500$. The very sentiment then: This is a waste, and a hype, and a bubble, and only criminals use it, tulip mania, gambling addicts. All the nay-sayers back then should realize they actually lost people money! I got into Bitcoin and ETH early due to an enthusiastic post on HN. Please think back a few years, has your viewpoint changed? Do you allow yourself to keep commenting negatively, knowing how wrong you were for years now? Are you really doing the HN community a service with your expert hot takes?

19962• 5 years ago

I topped bickering about and promoting bitcoin on HN when the price was around 4500$. The very sentiment then: This is a waste, and a hype, and a bubble, and only criminals use it, tulip mania, gambling addicts. All the nay-sayers back then should realize they actually lost people money!

Same. I did cost me dearly to listen to the loud voices on HN, people so certain about themselves that they just couldn't envision the possibility they could be wrong.

Fortunately, I did not suffer from this hubris, so when confronted to evidence that I was wrong, I changed my mind.

It served me well, but like you I feel so sad these stupid people caused so many hackers to remain poor, and are still hurting the community.

Do you allow yourself to keep commenting negatively, knowing how wrong you were for years now? Are you really doing the HN community a service with your expert hot takes?

These negative people are the reason may bright minds will remain chained to a day job at a FANG selling ads and dopamine, instead of really innovating.

Sad, really sad.

ball_of_lint• 5 years ago

Why do you think young people today are willing to take these extreme risks? Casinos and speculative instruments existed decades ago.

I think it's because of the massive economic inequality that people experience today. Working an unskilled, or even a skilled job doesn't go as far today as it has in the past. Many people have internalized that they will never be as "successful" or as rich as their elders. Given that situation, it's easy to see why these risky asymmetrical bets are attractive. A failed investment pushes you deeper into poverty, but doesn't fundamentally change your situation. A successful one has the potential to change your life and break the cycle of poverty for you.

For someone who's about to declare bankruptcy, a lottery ticket is an excellent deal. For the lower class of America, so are these investments.

tachyonbeam2• 5 years ago

It's not an extreme risk if you only invest a small amount of money. I wouldn't suggest anyone remortgage their house to put that into bitcoin, but I've invested ~$1200 in there and I'm willing to wait and see what happens. If I lose it, it will be a learning experience and I'll be just fine.

imtringued17• 5 years ago

You're absolutely correct. The inability to "make it" through honest work makes people hopeless and thus they would rather lose money because of their gambling decisions than to give up on the potential for massive gains that are otherwise impossible.

I just wish it didn't have to be this way.

eloff• 5 years ago

It's a ten year pump and dump scheme?

I'm also skeptical of bitcoin, but it can't be dismissed so easily anymore. There's clearly something to it, but what? Is it it just speculation about future value, a hedge against inflation and government control? A way around laws and currency export controls?

I'm not sure.

helen___keller• 5 years ago

Bitcoin obviously offers some value to some people, but I think bitcoin's greatest innovations were social.

The bitcoin community has innovated all sorts of social tools for advocating causes and pumping assets. Could $TSLA have reached $850 post-split without these techniques? Maybe. Could $GME have reached around $350 without an army of "diamond hands" and "to the moon" (read: crypto memes)? Definitely not.

This may feel like a stupid point, but I mean it. Goldbugs have been a thing for forever, but the sort of digital advocacy that bitcoin sees puts them to shame by comparison. Not only is there a hoard of crypto fanatics ready to tell you why sitting out of bitcoin is the worst decision you've been making your entire life, but you can even get several entirely disjoint explanations for why bitcoin is something you should invest in (some at a glance: it's going to make digital payments easy, it's a scarce asset like gold and will only increase in price, it will replace fiat as a global currency, it's a revolutionary technology and nothing else like it has been seen before, etc). Similarly, if you try to critique any one of these, another supporter will instantly take up the fight by moving the goalposts to their preferred explanation on why bitcoin is great. (Oh sure it can't do many transactions, but it's not actually for payments it's digital gold...)

This isn't meant to be derogatory against bitcoin supporters, but rather an expression of wonder. It's clearly not a fluke: bitcoin drops off the radar for most people and comes back every couple of years, clearly whatever the supporters and investors are doing to advocate for it is working.

chrischen• 5 years ago

Just because people use an asset for gambling doesn’t mean it is worthless.

untilHellbanned• 5 years ago

What's the correlation of people who hate on crypto who lost money or missed out on it?

rawtxapp4• 5 years ago

There's a whole subreddit of them at /r/buttcoin.

loceng3• 5 years ago

I just posted this in another comment: "Convincing yourself that someone commenting negatively about Bitcoin is simply jealous is also a common thing I've seen many Bitcoin owners use to justify ignoring legitimate counter-narratives of a lot of propaganda."

loceng3• 5 years ago

Financially aligning people through greed, speculation, is certainly one way to gain "consensus" - however that ignores, attempts to circumvent the harder work - which takes healthy individuals who have genuine community via regular, conversations that go deep - of building trust; Bitcoin is a virus that has spread because our immune system isn't working, we're currently weak due to a lack of real connection, interconnection.

boredpandas7772• 5 years ago

Thank you. Upvoted.

zby• 5 years ago

And yet this is the way to create money - money is what we believe other people will want and will give us something valuable in exchange. It only works because other people also believe in it. It started with shells and gold and other collectibles - and we still collectively manipulate the price of gold in a kind of sustained flash mob. It is all circular - but it works and when you want to create a new kind of money you have to do the same trick again.

Gatsky3• 5 years ago

Well what you say has some merit, but...

Goldrush FOMO is a very powerful force. Not saying this applies to you, but I think some people can’t stand the cognitive dissonance of being a hacker and not getting into bitcoin, missing out on life-changing money. To deal with it, they need to vilify bitcoin often on quasi-moral grounds.

cbozeman2• 5 years ago

That's a fallacy into which they're falling. Not a logical one, just a mental fault in their thinking.

You and everyone else around you are always missing out on life-changing money.

I missed out on GameStop when it was $4. Roaring Kitty was posting on YouTube then... but I didn't know about him. I didn't hear anything about GameStop until it was already in the hundreds of dollars. I missed out on Tesla. I missed out on Microsoft, Apple, Apple's resurgence in the 90s, etc.

There's always going to be some thing that everyone misses out on.

I'm biased, because I've been mining Bitcoin since 2010, starting with an old Asus Core2Duo laptop, then I got a Butterfly Labs Jalapeno miner, and then the Chinese miners took over the scene and I got out because I didn't see the point trying to compete with them.

But I'm still missing out of all kinds of life-changing money scenarios even today. And so is everyone else.

phatfish• 5 years ago

It seems to be the other way round to me. Certain Bitcoin fans can't stand that other "hackers" don't buy into the Bitcoin story as religiously as they do.

As the other comment pointed out, for FOMO to be this "powerful force" everyone would be constantly enraged they didn't buy Tesla shares 10 years ago, or save that collection toys from their childhood that suddenly became valuable, or any number of other things.

FOMO is only a problem if you struggle with envy.

aerosmile• 5 years ago

Gutsy, but it paid off. 86 karma points at the time of this writing.

centimeter• 5 years ago

You're describing the concept known as "money".

suifbwish• 5 years ago

I believe it takes 72 TERAWATTS running for 10 minutes to mine one bitcoin. How is that justifiable when we are slipping deeper into an environmental crisis?

minitech• 5 years ago

I believe it takes 72 TERAWATTS running for 10 minutes to mine one bitcoin.

Some corrections:

- 10 minutes per block, not per bitcoin (block reward is currently 6.25 bitcoin)

- it’s more like 14 GW, not 72 TW

marshmallow_127• 5 years ago

simple answer: i don't have to justify wasting my own money to other people.

rpowers• 5 years ago

I'm really glad someone can articulate what I've bee thinking for a long time. It started when I realized that bitcoin was being used to fuel dark markets then again when I saw that anyone was able to make a coin and pre-mine thousands before sharing with others struck with FOMO.

cyphertruck26• 5 years ago

You can easily make rpowerscoin. But it won’t be bitcoin. And its existence will have negligible impact on bitcoin.

There have been 100,000 clones of bitcoin (according to someone who claimed to have counted)but none are genuinely successful. Even forks if bitcoin fail despite spending millions on propaganda.

Think there might be a reason?

usernamefk2• 5 years ago

thanks for the comment. I totally agree. sadly, we are stuck with it...

malwarebytess• 5 years ago

It's taken a gambling-friendly society with feverish lust for winning (think for-profit fantasy sports, online poker, day trading, Vegas et al) and turned us into a giant decentralized casino.

I agree with your post overall, but I think you'd be foolish to think that it wasn't always this way. The only difference is another strata of folk now can play as well.

oarabbus_• 5 years ago

The most boring, tired take around.

Ignorant people like to call it Dutch Tulips. Was Dutch Tulips a one-tie event? Or did it continue to increase in value and usage with higher highs and higher lows every couple years?

By your "waste of resources" take, which is again so tired - at least Bitcoin is helping Venezuelans and Nigerians and others who have purchased it, unlike video games, which waste FAR more electricity and are a larger waste of resources.

hooande• 5 years ago

Ugh. I appreciate and agree with your perspective, but this isn't related to the content of the article at all. You just responded to the title

mr_toad• 5 years ago

You can’t blame Bitcoin for starting the fire, people have been speculating on financial assets as long as they’ve existed. And not just the huddled masses; smart people like Isaac Newton have been burned by bubbles.

tasssko• 5 years ago

Yes I agree, but I think you miss the point. The reality is folks buying bitcoin are also indirectly betting on the failure of our globalised central banking systems. This was the pitch in the early days and it remains a key value proposition. Think of it like this how much reach does a USD have? It’s limited by some factors but all things equal the reach of a USD is pretty good. I can use USD in most African and Asian countries. However the USD in China has limited reach. I’m using the word reach to loosely describe how usable the currency is in a foreign country. The sterling pound has a very limited reach if I were travelling I would convert it before. So one day in the future when the SHTF and no one wants to trade there will be a currency that is decentralised that has an unlimited reach. The reality is we need to get serious about the predicament of our financial systems or the folks with the BTC will be holding all the cards. I own no crypto and am just a interested observer wanting to share my perspective.

spiralx11• 5 years ago

Your comment would have made more sense before everyone had the ability to use their debit/credit cards almost anywhere in the world, meaning the fact that other countries don't take GBP doesn't matter a huge amount at all. Last few times I was abroad if I needed cash I got it out of an ATM in the local currency.

vmception• 5 years ago

yes, bitcoin was specifically invented to co-opt our consciousness to self-propagate. it is successful in this. some people recognized that capability 10 years ago, some people recognize it today.

hourislate• 5 years ago

The Wolf of Wall St would agree with you. Although I agree with the the following article, I have taken a small position and bought the hype. My intention is to exit long before the jig is up.

https://wolfstreet.com/2021/02/28/the-big-buy-hype-bitcoin-c...

aaron695• 5 years ago

Let me fix that title. Happy to be downvoted into negative territory. I only have 11 points. Go ahead.
"Bitcoin Is A Waste of Time (and Resources)"

The fact this clever whoring works on HN, saying you'll be downvoted then saying something mainstream popular to get upvoted says a lot about the HN community.

Absolutely 100% off topic to the article and painting the garden shed.

Good work to OP turning their claimed karma level from 11 to 177, that's hacking.

wonderwonder5• 5 years ago

You are right. I own Btc and other crypto assets for that very reason. The desire to hit big is the primary motivator and it unfortunately bleeds into other investments such as stocks etc. I very much am attempting to go back to the buy and long term hold mentality but you are right, crypto has mentally ruined it for me.

pascalxus• 5 years ago

bitcoin isn't just for speculators. It's also for longer term buy and hold investors. there's a very real demand for investments that will hold their value against inflation. can you name a single asset class that will do that, other than equities or gold? real estate is out of the question because the overhead of buying and selling it is to expensive, not to mention it's so hard to execute that you'd loose your shirt if you dont know what your doing.

ajarmst3• 5 years ago

I always enjoy conversations with cryptocurrency cognoscenti: "Ok. Assume I have some bitcoin (a bitcoin? bitcoins?). How would I exchange it for, say, a carton of milk?"

Don't get me wrong. I'm a math nerd. I think bitcoin is fascinating as a technical achievement, and hope we keep exploring the blockchain idea. However, I also know that bitcoin mania has literally affected global supply chains of computer components and inflicted a measurable exacerbation of global warming. There is a colourable argument about whether bitcoins have value, but it's very clear that bitcoin has a non-trivial cost.

o_p2• 5 years ago

Personally I see bitcoin more as internet gold, you wouldnt buy a carton of milk with gold either, but you can create commerce services on top of bitcoin who are backed by this descentralized currency

tim3334• 5 years ago

Presently sell bitcoin for cash, swap cash for milk. Same as for stocks, bonds, gold bars, foreign currency and many other time honoured investments.

ajarmst3• 5 years ago

Yes, but that would also apply if what I had was a used car, rather than bitcoin or gold, etc. The requirement for intermediate conversion to another currency in order to realize value implies that bitcoin isn’t (at least yet) a currency (even in the case where foreign currency isn’t local currency, there is a context where it is currency: that foreign country). I can also buy milk by exchanging my car for local currency, and it has at least some intrinsic value. I realize that the currency/money question is far more complex (my car is neither fungible nor easily portable), but I wonder how many of those speculating on bitcoin’s value appreciate that or are capable of explaining why Bitcoin has any advantages over gold or bearer bonds as a repository of value. Or, for that matter, how speculating in Bitcoin in the 20th century is different from speculating in Tulips in the 17th.

Right now, Bitcoin’s primary economic role seems to be as a demonstration of just how many Greater Fools the internet and social media give us access to.

ypeterholmes• 5 years ago

Time is money.. proceeds to write a 3hr read

delaaxe2• 5 years ago

I'd really like to read a similar write-up about proof of stake

drazulay• 5 years ago

Did you mean: bitcoin is _timestamped_? ;)

If I might chip in with my freshly minted 1 karma account.. Bitcoin/"Satoshi" was an incubator of sorts. It brought the brightest minds together to build a new internet that is resistant to tampering by your neighbour or the government. It will in due time make way for the rising stars in that sector (IOHK I'm looking at you!) that will incrementally work toward perfect balance, until it itself is superseded some day.

_Nat_• 5 years ago

tl;dr- The article's a bit confused, so to clarify: Bitcoin's entropy starts maximized, and then miners reduce it. According to the second-law-of-thermodynamics, the net-entropy of the universe tends to increase, so Bitcoin's entropy-reduction is just increasing entropy elsewhere (hence its huge electric consumption). Bitcoin's doing this because its security is based on having a high-entropy barrier against attackers (like a good password), except instead of a legitimate party being whoever has the password (and thus can beat attackers), it's based on whoever can attack the entropy the best (through 51%+ control of mining).

---

Some of the entropy stuff seems a bit confused.

As time goes on, Bitcoin's blockchain's entropy is decreasing, not increasing. The [genesis-block](https://en.bitcoin.it/wiki/Genesis_block) is like a [nucleation-seed](https://en.wikipedia.org/wiki/Seed_crystal), and the blockchain's growing from that genesis-block like ice crystallizing from a nucleation-seed as the surrounding water freezes.

The second-law-of-thermodynamics asserts that entropy tends to increase in the overall system, in a cumulative sense, but not necessarily throughout the entire system. Bitcoin's blockchain's removed entropy tends to imply an increase of entropy in the surrounding environment (leading to the environmental concerns with its energy-consumption).

If Bitcoin's mining-difficulty were reduced and the miner-pool shrunk a lot, then Bitcoin's blockchain would have less entropy removed, but the environment would have less entropy added to it as Bitcoin's power-consumption would be less.

This is by-design. For example, if you want a secure password, then you want it to have [high entropy](https://en.wikipedia.org/wiki/Password_strength#Entropy_as_a...), because then it's harder for an attacker to guess your password. Bitcoin's the same way, except that it doesn't start knowing the password -- instead, Bitcoin asserts that whoever controls the most entropy-removing-power (mining power) is the correct authority. So that's why [Bitcoin sets a high-enough difficulty](https://en.bitcoin.it/wiki/Difficulty): it needs a high-enough difficulty to prevent someone from easily [faking a longer blockchain](https://en.wikipedia.org/wiki/Double-spending#51%_attack).

caycep• 5 years ago

I probably need to read this more closely after work, but have to ask - have there been thermodynamic esp w/r to information theory/shannon entropy, information encoding properties of bitcoin?

geraldbauer• 5 years ago

Reminder: Bitcon is a ponzi. Learn how the investment fraud works. [1]

[1] https://github.com/openblockchains/bitcoin-ponzi

arbawk8• 5 years ago

The very first line is flawed as mining companies are increasingly not selling their mined bitcoin. Why would they? They are obviously mining because they are bullish.

In fact, who is selling bitcoin? Only those that don't believe it won't be an upgrade to base-layer money. Those that would call themselves bitcoiners don't want to sell it. I've never heard of a Ponzi where some people just won't sell!

This page is an embarrassing collection of misinformation.

o_p2• 5 years ago

So the propaganda machine is now trying to smear Bitcoin because of energy, ridiculous! I guess that the smearing it by associating it with criminlals didnt worked well enough.

teatree• 5 years ago

A few questions I need help with -

If bitcoin becomes a store of value / digital gold and people increasingly hold their wealth in Bitcoin countries will lose the ability control and regulate their own economy.

1) Why would any country hand over the reins of its economy to others ? India is already thinking of banning cryptocurrencies, China has similar thoughts too, if many large countries ban it how would Bitcoin sustain ?

2) US has fought wars to retain dollar as the global reserve currency. Why would the US give up this advantage ?

3) Presently, economic sanctions are used to push interests and disincentivize bad behavior. How would this play out in a world of Bitcoin ?

4) If bitcoin exists with fiat and exchange points can be controlled and blocked by governments, what's the point of Bitcoin ?

krupan• 5 years ago

1. They won’t hand it over. Bitcoin and it’s participants are taking it.

2. This is the same question as 1, isn’t it? Again, Bitcoin is people voting with their feet (so to speak) to take power away from governments.

3. Economic sanctions punish the common folk more than the evil governments. Bitcoin simultaneously takes power away from evil governments (see 1 and 2) and gives power to common folk.

4. I think you are alluding to one way governments can try to fight what is happening in 1, 2, and 3. If governments really try and crack down on exchanges, people will simply transact directly in Bitcoin. Those who have accumulated it pre-crackdown will purchase goods and services using Bitcoin, people who did not obtain any pre-crackdown and want it will offer goods and services to those who are offering Bitcoin.

In all honesty, these extreme scenarios are far fetched. Governments all ultimately get their authority from the people. If the people are choosing Bitcoin, the governments won’t fight it for long.

arbawk8• 5 years ago

1) Countries economies consist of the individuals within them. In India, where Bitcoin is banned, its exchange rate has since increased. Same in Pakistan. Hyperinflation occurs frequently despite a governments' best efforts. The market is the master and the government is only an actor.

2) This is probably the best piece on that point: https://quillette.com/2021/02/21/can-governments-stop-bitcoi.... The summary is that unlike another country's currency, Bitcoin is significantly harder to attack.

3) Economic sanctions can still exist. You still have to pay your taxes even though many avoid them. What sanctions are you referring to specifically?

4) Look into the Lightning Network to see one among various ways Bitcoin is scaling outside of exchanges. It will continue to develop in interesting ways. In the meantime, governments that enable what a growing number of people want will be rewarded while those that attempt to ban it will suffer. The incentives to do so are not in their favor (also argued in the article above).

spiralx11• 5 years ago

US has fought wars to retain dollar as the global reserve currency. Why would the US give up this advantage ?

Not true, the US has been trying to reduce the usage of the USD as a reserve currency (it's the largest such currency but not the only one) due to it not having any real benefit to the US while exposing its economy to the effects of financial crises around the world.

---

Ben Bernanke (ex-FED Chairman) - The dollar’s international role: An “exorbitant privilege”?

https://www.brookings.edu/blog/ben-bernanke/2016/01/07/the-d...

A great deal of U.S. currency is held abroad, which amounts to an interest-free loan to the United States. However, the interest savings are probably on the order of $20 billion a year, a small fraction of a percent of U.S. GDP, and that “seigniorage,” as it is called, would probably still exist even if the dollar lost ground to other currencies...
The safe haven aspect of the dollar is actually a negative for U.S. firms, since it implies that they become less competitive (the dollar is stronger) at precisely the times that global economic conditions are most difficult.

---

The ‘reserve currency’ myth: The US dollar’s current and future role in the world economy

https://www.ussc.edu.au/analysis/the-reserve-currency-myth-t...

This safe-haven bid for US dollar assets means that the US dollar often behaves in ways that seem counter-intuitive relative to US economic fundamentals. As Figure 2 shows, the US dollar appreciates in response to economic policy uncertainty. A 1 per cent increase in the Global Economic Policy Uncertainty Index raises the real value of the US dollar by 0.2 per cent, controlling for relative interest rate, inflation and economic growth differentials with the rest of the world.
The appreciation exacerbates trade tensions between the United States and the rest of the world by weighing on US export competitiveness, setting in train a protectionist spiral.

---

That the USD's role as a reserve currency isn't really very important doesn't change the fact that Bitcoin is a moderately interesting solution to a niche CS problem, and not the solution to financial problems nobody actually has, either because they were solved decades or centuries ago, or because they're not and never were real problems in the first place.

xtracto• 5 years ago

I'm ready to be downvoted but... nah just following the stupid memes.

The article made thing an interesting point regarding how information cannot be "moved" itself but only copied and then the previous copy destroyed.

I think RIAA, MPAA and other virtual goods creators could benefit from the non-fungible tokens things that are just raising as a use of the blockchain.

u678u2• 5 years ago

One thing that always bothers me about BTC is that the whole blockchain is kept, its like half a terabyte by now. Will they ever agree to just trim off everything older than XXX days or similar? It seems hugely inefficient.

unnouinceput• 5 years ago

If its trimmed and only last xxx blocks are kept (there are no days in bitcoin as the article nicely puts it) then the people who have bitcoins and just hold it before the trimming happened will lose bitcoins or won't be able to spend them.

Every time somebody does a transaction involving bitcoins mined from a long time ago the entire ledger is need it to see the origins of those bitcoins.

u678u2• 5 years ago

OK I see, thanks for the reply. Seems like it'll remain huge for a long time yet.

md20202• 5 years ago

The earlier points in the piece about the distinction between information and physical matter got me thinking. I only have a bachelor's in computer science and not much cryptography knowledge, so please excuse if this question has a simple answer: What fundamentally prevents us from creating a digital analog of gold? Gold (partially) has value because it is scarce, and it's scarce because it's difficult to create--nuclear fusion takes a ton of energy, and gold is one of the heavier naturally occurring elements. As the article mentions, all physical assets can retain value because they're impossible to copy. If I give you my gold, the transfer of value is being held up by the laws of physics. You now have it, and I don't. There's no ledger keeping track of all the gold atoms in the universe, therefore it's trivial to transfer it from one part of space to another. What keeps us from having some cryptographic primitive that enforces the same thing?

Bitcoin got the part of "requiring some difficulty to create", but I feel like the killer cryptocurrency would be the one where no ledger is needed.

crazypython2• 5 years ago

What fundamentally prevents us from creating a digital analog of gold?

You can infinitely copy information. It's in the article.

md20202• 5 years ago

Yeah, I read the article. My question was what really prevents the existence of some cryptographic operation that would allow us to "port" the laws of physics to the digital space, so that when information moves we could enforce that the sender no longer has it and the receiver does.

samatman6• 5 years ago

I think you would enjoy reading Claude Shannon's seminal paper on information theory.

What you are proposing is profoundly silly. But to understand why it's profoundly silly is very much worthwhile!

http://people.math.harvard.edu/~ctm/home/text/others/shannon...

sova2• 5 years ago

Time is the only thing we will never be able to make more of. It is The Ultimate Resource, as Julian Simon points out. This makes Bitcoin the ultimate form of money because its issuance is directly linked to the ultimate resource of our universe: time.

All things equal, BTC has a limited supply, making it unusable as a currency (but great as a deflationary store of value). I suppose the definition of "money" is less specific than "currency," but this notion of "money" goes contrary to the nomenclature of the human realm. Yes, technically anything that is tradable is "money," but then the term becomes rather meaningless.

Money must be backed by a creative asset, such as an orchard or labor or technology. Time alone a currency does not make.

arbawk8• 5 years ago

You should read the Bitcoin Standard or Layered Money to get a sense of what money is and how your notions are quite far from the truth, although delivered with feverish confidence.

BTC is infinitely divisible, and so can be used as currency. Can you give an example where its capped supply would cause an issue?

Bitcoin is backed by proof of work. Money backed by entities are liabilities, which is a bug and not a feature of fiat money. I really suggest thinking about this for a lot longer.

sova2• 5 years ago

I do not disagree that BTC is a great store of value, I disagree that it is a "currency." Which is usually what the term "money" denotes.

BTC in particular has long transaction verification times that are growing longer.

Can you give an example where its capped supply would cause an issue?

To be useful as a day-to-day currency there needs to be a balance between inflation and value.

Currency works best when people are not encouraged to hoard it, because then the economic incentive of using money is there.

If I hold on to a dollar, in <30 years it will have about half that spending power at current inflationary momentum. Thus, it is more prudent to spend the currency on assets or exchange them for necessities. If the currency itself increases in value as time goes on, the incentive to exchange it for goods and services is actually not there.

Currency comes from the word current meaning flow. Hoarding something is the opposite of letting things flow.

BTC is infinitely divisible, and so can be used as currency.

BTC is not "infinitely divisible." There is a smallest unit of BTC known as a satoshi, and transaction fees (the amount you must include to incentivize miners to actually put your transaction into a block) is already greater than the amount of BTC stored in some addresses.

Money backed by entities are liabilities, which is a bug and not a feature of fiat money.

It may be the case that there are unsavory entities between the creative asset and the actual printed bill, but currency is at its basis rooted in the creative yield of branch or brain.

jeofken• 5 years ago

Are there any users of Offset [0] here on HN?

[0] https://www.freedomlayer.org/offset/

bswen• 5 years ago

Have fun staying poor haters

ffggvv• 5 years ago

Bitcoin is a pump and dump. Pump and dumps have legitimate value as long as people pay for them. This will remain true even if it goes to 200k, or 2m. In fact the higher it goes, the more of a pump and dump scheme it is.

how many people would buy it (or even care about it) if they were gauranteed 100% that it would never increase in price? None. this proves its purely a speculative asset with the hope to dump the bags on some other greater fool. if there was some legitimate use then the focus would all be on stablecoins or people would love bitcoin even if it went down in value.

AzzieElbab• 5 years ago

Interesting article, echoing both “The scandal of money” and “Life after google” by George Gilder

SPBS• 5 years ago

This article was a good dive into the technical feats of bitcoin. But this fact still stands:

== Traditional currency ==

- needs central authority

+ energy efficient

== Bitcoin ==

+ doesn't need central authority

- energy intensive

If there already is a central authority you can trust, it doesn't make sense to go through the song and dance of having a trustless currency system designed to work under adversarial conditions. Bitcoin isn't on the cusp of taking over the world, it fulfills a specific niche.

Uptrenda• 5 years ago

I'm so sick of these profound-sounding blog posts that take 1 million words to say precisely jack shit. Yes, the key innovation around Bitcoin was to order events. You can call this 'time' if you want. This is literally the most obvious thing you can say about the system. It's so obvious in fact that it's in the introduction section to the Bitcoin whitepaper. Here is the entire blog post written much shorter and more precisely by Satoshi:

'In this paper, we propose a solution to the double-spending problem using a peer-to-peer distributed timestamp server to generate computational proof of the chronological order of transactions.'

Not trying to be elitist but if you find this topic new then you probably also find Bitcoin's technical workings new. Since it's now more than a decade old I don't find this a very topical inclusion for a 'news' site.

qyi• 5 years ago

It was easier for me. With JS disabled it's just a blank page.

lionhearted• 5 years ago

I'm voting you up, but a respectful disagreement...

I think that sometimes seeing a person meander through related concepts and take a fresh look at them can be quite valuable; likewise, non-technical language can make things accessible.

Even if there's no grand takeaway.

I know, for me, sometimes I quite like this sort of thing and sometimes I find it tiresome. But in the right mood, I find it very valuable.

Likewise, I could send this piece to someone who has no technical background at all and has not the Bitcoin whitepaper or any further analyses, and then have an interesting conversation afterwards.

codeproject• 5 years ago

thank you, I am sure you save a lot of time for a lot of people. There is an interesting conversation in the movie "wall street". Bud Fox tries to make a sale pitch to Gordon Gekko. After awhile, Gordon says: Now tell me something I don't know.

pedroma• 5 years ago

To be fair to most people, they don't know what any of these terms mean: double-spending, peer-to-peer, distributed server, timestamp, computational proof.

teawrecks• 5 years ago

After reading this article, it now seems like BTC is not equipped to to handle general relativity. If we ever become an interstellar species that seriously uses cryptocurrency, I'm not convinced that BTC will be sufficient. The only reason it works on earth is because the "ticks" of its clock are slower than the speed of light, but faster than we need transactions to be settled. If I use BTC to buy a product from a company on Mars, will ~10min be long enough? What kinds of new attacks would bent space give rise to?

These are all things I hadn't considered before reading this article, and I found them enjoyable to think about. If you didn't get anything out of it, that's fine, but don't rain on others' parade.

madacol• 5 years ago

There's tons of conversations about this. People have been speculating about making an alternate blockchain that settles in X days, or X weeks, that way it is "inner solar system"-friendly.

You can increase that time as much as you need

delaaxe2• 5 years ago

I'm so sick off those blog posts that take 1 million words to explain monads with so many empty words. Monads are simply endofunctors coupled with coherence conditionned morphisms. Nothing newsworthy, just be a little smarter

dgreensp• 5 years ago

It's way more interesting to look at the nuance and downsides of how Bitcoin works than to merely marvel, awe-struck at the concept of a distributed ledger.

It's been a few years since I was reading in-depth about Bitcoin, and I don't have references, but off the top of my head:

* It's bad for the environment, "wasting" so much electricity on more and more literal busywork... or is it? Apparently it depends where your electricity is coming from (it had better be cheap if you want to make money mining!) and whether you are actually causing additional electricity to be generated or just consuming surplus, or so I've heard.

* Control and power over Bitcoin is not all that distributed in practice. Mining a block would take prohibitively long for an individual, so there are mining pools where participants share in the spoils. Mining pools and exchanges have a lot of power. Just as the infrastructure of the Internet is run by big telecommunications companies whose routers talk to each other, there are various major players that make Bitcoin run, and there are occasionally decisions affecting the future and fate of Bitcoin, and Bitcoin politics, like disputes over protocols.

* In theory, Bitcoin is hard to fraudulently "take over" because you'd have to have more computing power than the rest of the miners combined, but if you control mining pools, or are China or something, I believe you could do it (and no one would necessarily know?).

* The rise of Bitcoin as a currency (not just a ledger/clock) whose value seems to just go up and up raises a lot of questions (IMO) about whether this is a good property of a distributed ledger system.

porknubbins• 5 years ago

If I ever come to HN and the top comment about Bitcoin is NOT a grumpy “I could build that in a weekend with Aws” style comment I will know the top is finally in. I think the issue is Bitcoin is no longer tech news- its a finance, or social or business topic and for some reason it inspires engineers to try to reanalyze everything from first principles to write angry comments that miss the forest for the trees. I can only imagine how something like NFTs which truly appear to be a baseless speculative mania would go over.

xk_• 5 years ago

I can only imagine NFTs would go over

The recent thread about Nyan Cat's NFT sale is an indicator: https://news.ycombinator.com/item?id=26196027

From the comments: "The comments in this thread resemble comments dismissing BTC in 2011/2012"

Welp, you were right!

debbiedowner• 5 years ago

Wouldn't it be great if there was a proof of work mechanism that took time, but very little energy?

I think there will be a low power processor that can perform unique instructions that are expensive to simulate on CPUs and GPUs, but is amenable to hashing, and is not too expensive to buy. My guess is something neuromorphic.

The first mWpowcoin could then be born.

I do see a downside that people will have to buy a special chip that has little general utility, but from the rise of ASICs that must be ok.

I know proof of stake exists, but clearly it isn't as popular. People like mining?

amitprayal• 5 years ago

Bitcoin is Tulipmania

nadahalli2• 5 years ago

For those who already know about Bitcoin's timestamping really well, it's worth reading about the time-warp attack. David Harding wrote a great answer about it on StackExchange ages ago: https://bitcoin.stackexchange.com/questions/75831/what-is-ti...

ace_of_spades• 5 years ago

While I find decentralized digital ledgers interesting and potentially useful, I am always surprised how people think that they need to jump on bitcoin as it somehow must be the best choice for the future of money. At least to me it seems unlikely that the first feasible solution to a difficult problem is already the best. Several problems with bitcoin provide evidence for this idea.

Thus, it seems like the mechanism which keeps bitcoin running is something similar to the sunk cost fallacy or framed differently attachment to a state of the ledger that is perceived as favorable by the invested community. I hope that people will realize soon enough that bitcoin should probably more be treated like a nice art project - not more, not less.

Bitcoin Is Time

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