Excited to show off something that we've been working on: the Bitcoin Note. The Bitcoin Note is a cash instrument that is backed by Bitcoin via multisig. Each note is printed with beautiful, currency-grade elements that use secure printing techniques typically reserved for government documents like microtext, raised print and foil. More importantly, each note includes a secure NFC chip which is where a multisig lives that allows you to claim the Bitcoin at any time.
We were heavily inspired by OG Bitcoin physical money like Casascius coins, however, we wanted to created a design whereby (1) anyone can spend, gift and share the Bitcoin for years to come without having to worry a sophisticated attacker who extracts a private key from under a label or scratch off and (2) trust was minimized on that part of the printer (us).
This lead us to the design we landed on for the Bitcoin Note
1) An NFC chip readable by nearly all modern smartphones
2) A two part multisig where (1) we write an encrypted private key to the note (and don't keep a copy and (2) you write a user key to the note in plaintext and then load the note
3) We only release the decryption key when someone cuts the note and reports this via an authenticated and encrypted way to our server
4) The multisig reverts to only your key after a printed expiration date on the note
5) You can re-key the user key on the note you receive if you want to hold it for a long time
We believe that the result of this design achieves the goal of Bitcoin that's incredibly easy to use - like cash - but still preserves the important quality of self-custody. Take a look at http://bitcoinnote.com/ to learn more and reserve a spot in line for our release later this summer.
So I guess you have to...buy the bills? Which seems odd. But if they're not super expensive relative to their denominated value it could make sense. I might pay $1-2 per $20 bill for the novelty factor.
This definitely seems more convenient than performing a 10m blockchain transaction. But what's the value prop over USD cash? Just novelty?
The toy version of this is like buying a hardware wallet with the Bitcoin in escrow. The eventual flow is more like an ATM. There one kind of already "buys" cash in the form of a service charge (often refunded by one's own bank). Cash is the most common form of peer to peer payment. Bitcoin is the best form of peer to peer money. This combines the two.
It allows for instant, anonymous settlement in regions with poor connectivity (El Salvador, Ukraine.) Lower barrier to entry for very old and very young users. Skips the complicated process of onboarding people into learning about key management - everyone already knows how to keep cash secure. Getting self-custody of Bitcoin is important but usability has always been a challenge. This attempts to solve for some of those problems, particularly in cash economies where Bitcoin adoption as a medium exchange is more popular.
Basically let's get everybody using self-custodial, multi-sig hardware wallets with really, really good privacy properties but make them not intimidating by presenting them in a skeuomorphic cash form.
I love the idea behind this! Having said that, it will take a lot to convince experienced users to trust these over on-chain transactions. The info on your website is pretty sparse - there's not nearly enough info there to work out the security properties of these notes. I'm piecing together how it works from your various comments here, but you really want to have all that info in one place. I'm sure you know this already and I'm sure you're working on the website behind the scenes, and I look forward to reading when it's done!
What's your business model? Do you plan to recoup costs by selling the physical notes, or is there some other plan?
"depending on who gives you the note you might trust that they have done this for you"
There is absolutely no way I would trust that - because even if I trusted that person's integrity I would also need to trust that they themselves had the technical knowledge to reliably make that confirmation. And that they hadn't made a mistake.
There is one case, which I believe is a common one where I would argue this might not be true -- a crypto savvy family member is the first person to purchase and load the notes before gifting them to you.
But, fair point. I would always err on the side of recommending someone scan a note rather than not.
No; this is a fantastic question and why the notes consist of a multisig with a timelock. After the timelock expires only the user key on the note can retrieve the funds. So in the worst case scenario where we go away or refuse to validate notes day 1, you will be able to retrieve the funds after expiration (Jan 3 2029).
Credit cards are pretty meh for people that accept them. A % of your money disappears. The customer can say, for 60 days, "nah I didn't want that" and the money is taken away from you, no questions asked.
There was this big push in retail a few years ago to get customers to stop using credit cards. I knew it was going to fail, but merchants are looking for alternatives here.
That seems contrary to the trend I have seen here, which is more and more stores going 'cashless', and only accepting credit cards. The cost to handle cash is more expensive than the percentage that the credit cards take.
I think the fact that it never got off the ground shows that the ask is pretty impossible... it is really hard and expensive to securely run a payment system like that.
If you aren't charging merchants fees, how do you sustain it?
This is not a fundamental property of credit cards. It is a method of dispute resolution.
Retailers dislike dispute resolution processes that favor the consumer by default. Their alternative, for the most part, is a process wherein they simply control the whole process and can decide in favor of themselves on a whim.
> Credit cards are pretty meh for people that accept them. A % of your money disappears.
> There was this big push in retail a few years ago to get customers to stop using credit cards.
Really, says what retailers? EDIT: saw your note below about MCX. Noted.
- Your revenues go up because people are spending money they may or may not have in the future
- You don't lose out on a sale because someone is a 5c, 12c, 18c, etc. short
- You don't have to deal with physical cash (armored transportation to banks, miscounting, theft, etc.)
I personally think CC fees are egregious, but pretending they add little to no value to the extent that they aren't useful for the merchant is pretty myopic.
Stores easily make up for the CC fees on volume because it is so much easier for consumers to impulse buy. In fact stores are now happily offering "buy now, pay later" deals that cost them much more in fees than CCs because it boosts volume even more than CCs. CC companies are scrambling to catch up there.
Merchants grumble because that's what merchants do, but they are coming out way ahead anyway. There was (maybe still is) a cash only restaurant/bar in Boulder back when I lived there. The food and beer were great. They probably could have done an order of magnitude more business if they charged $0.18 more per burger and took CCs. Instead they had an ATM that probably charged the customer 10%. They weren't sticking it to the man, but they sure were sticking it to their customers.
> Then you could ask how many people can easily detect fake bills?
Most people can, unless the fake is high quality. There are a ton of easily checked security features that don't require any tool or network access. These bills do not have any of those.
> But either way, checks aren't credit even if you say it is...
If you are accepting the check, you are extending short term credit to the person who gives you the check... they are promising to pay the amount at a later date, even if that later date is only the few days that it takes for a cashed check to be settled. That is credit.
At this point it would be a better question to ask who DOES accept checks. In the US, most grocery stores still accept them, but I don't know of any other stores that do.
In Germany I have a hard time of thinking of a place that does accept checks as payment. I did get a check a couple years ago from an insurance company that reimbursed me. But besides that I haven't ever used a check in Germany.
Can't you instantly run the check electronically since the routing/account numbers are right there. I suppose you would need to pay for a POS terminal that does that, which might not be worth it.
Yeah -- similar. Open Dime is focused on securing a single key until it's tampered with; we use a multisig with timelock instead for a couple reasons; (1) the chips we use are simpler and entirely powered via NFC (2) our notes are intended for broad circulation over a long period of time.
The world has apparently gone full crazy, as we're now back to where we started, with the (rather big) difference that we've replaced sovereign-backed currencies with ... what exactly?
Except of course, that most central banks function perfectly adequately despite the nation in question having very limited military power, and it isn't as if Bitcoin mining operations don't depend on there being enough use of force behind the rule of law for property to still be enforceable.
I don't think it's irrational to disagree with your personal beliefs about monetary systems. There's evidence both for modern practices being beneficial as well as detrimental so I'd reserve judgement until it plays out.
Besides that, what's wrong with a private entity issuing its own scrip? It's how our current system of currency got its start with private banks issuing promissory notes which were eventually adopted by the state. You probably personally hold quite a lot of it in the form of debt or reward programs. This goes a little further in that it is redeemable for an alternate form of currency not backed by a state but that's not really an argument against it, historically people have used all kinds of alternate currencies. It really just comes down to what two individuals agree is an appropriate medium of exchange whether it's bitcoin, dollars or cigarettes.
We don't hold any Bitcoin key material; all of it lives on the note. One of the keys you contribute, the other one is encrypted by a key that we store (and release when the note is cut).
If the note expires then only the user key on the note can claim. However, this is an important risk to consider -- if you have notes on hand that have expired and you haven't re-keyed them, there will likely be a race at expiration to claim for anyone has encountered the note.
We recommend that if you don't plan on spending a note right away (as cash) that you re-key first to ensure that you're the only one who can claim at the point of expiration.
What does that re-keying process do exactly? Surely it’s not just updating the key on the device itself, because then it wouldn’t do anything to stop people claiming encountered notes at the point of expiration, if I’m understanding this correctly. But it can’t be moving the funds to a new wallet either, because you don’t have control of the second private key yet. So… what exactly happens there?
Thanks for the kind words -- it was incredibly fun to go through the design process of something like cash since we're all intimately familiar with the end product.
It was a pleasure to work with an actual banknote designer, Tom Badley, to accomplish this.
I like the "portrait" layout of the currency, compared to "landscape" for regular currency.¹ It makes it clear that there's something unusual about this money, a feature that I'd always taken for granted but suddenly is different.
¹Does anyone know of a country use portrait layout?
The construction of the multisig is such that (1) the key we generate and store encrypted on the note can never access the funds alone -- and we don't store it because we don't want to be custodians and (2) the end users load the notes, we never touch BTC.
I think you need a better explanation of the multisig procedure and how you are not a central authority, capable of spending the bitcoin, etc. I've seen multiple comments here confused by this.
3. What are the steps to receive it, including verification.
4. Convince me I won't lose my funds by accident.
5. Convince me I won't lose my funds by hack of protocol.
6. Convince me I won't lose funds if a hacker gains access to your centralized system.
7. What happens if I lose the note(s)?
8. Processing fees.
9. Can I give someone a note and avoid the Bitcoin transaction fee? (I am guessing yes as nothing needs to happen on the chain. But if I receive a note can I be sure I won't be swindled).
Frankly it seems weird you even need this pointed out to you.
If I wasn't giving you the benefit of the doubt, it really smells like your typical crypto scam to trick people that don't understand the technology fully into giving you money.
Cool idea, and the notes themselves look really nice. How does it work if I were to give someone one of these notes? To 'claim' the BTC (assuming they aren't passing the note around between people indefinitely) do they need the private key from the original owner of the note?
All key material for the note must be written to the note so that it is fully bearer (otherwise it's invalid and our app will reflect as such).
So, just like cash you can hand the note to someone and using the app they (1) can tap the note to see the public keys and verify it is loaded and (2) cut the note to claim (the fact that the note is cut is sent to us at which point we respond with a decryption key to unlock the second private key that lives on the note).
How can I ensure that the Bitcoin on the note isn't corrupted in some way such that it might not be accepted by certain exchanges - Bitcoin that has been through a tumbler for example. Will your mobile apps by able to perform those kinds of checks for me, or will that require me to take extra steps?
Note: I have very little exposure to the crypto ecosystem.
I either don't understand the specifics of the keying or it doesn't make sense.
There's some kind of private key. Makes sense. But there appears to be some kind of second key. At some point the note will "expire" and only the person who owns the second key can redeem the Bitcoin?
If I understand right, either the person who physically holds the note can update the key (in which case what purpose does it serve) or the key needs to be transferred along with physical possession of the note (in which case what purpose does the product serve).
Also what does it mean for the note to be "cut"? Like with scissors?
Is this product just intended for hardcore crypto folks or is it intended for regular people too?
> Also what does it mean for the note to be "cut"? Like with scissors?
Yes, exactly. There is a spot indicated on the note to cut it. This "tampers" the associated chip which can be reported back to us so that we release the encryption key to decrypt the local key.
> Is this product just intended for hardcore crypto folks or is it intended for regular people too?
Regular people too! The UX of our app will simplify a big part of this by indicating to folks the state of a note and their options with respect to claiming Bitcoin.
Once the tamper circuit it tripped you cannot reverse it. But sure, one could try to carefully do this and pass off a note to someone who doesn't verify it electronically.
The site mentions the decryption key is released when the note is "cut". Does that mean there's something enclosed in the bill, and you have to physically cut it open to extract it?
I'm guessing it means you need to destroy the note in order to redeem it which makes sense as a way of remotely "redeeming" the note with the issuer. I'm interested in how secure this process is since the entire system would hinge on it.
This feels like a Rick and Morty episode to me. They just reinvented cash money, with extra steps.
Only, without the oversight of a central bank.. Without the means to keep the exchange rate in check. They can't change the rate of interest or anything else.
So far with crypto the only use cases seems to be criminal. To buy illegal stuff and for ransomware. Maybe it could be useful in countries where the currency is devalued like some in South-America. But then all the extra steps seem to be a big hurdle to me.
> Only, without the oversight of a central bank.. Without the means to keep the exchange rate in check. They can't change the rate of interest or anything else.
You seem to have nailed the use case well. This is exactly why'd someone use something like this.
I'm not saying it's a good idea (nor a bad one), just that those things are "features" in the eyes of the cryptocurrency users and proponents, not bugs.
"for the crypto enthusiasts, the problem with the legacy financial markets wasn't that they were manipulated, it's that they weren't in on it." (reproduced here from memory)
I don't know. The people I know that said "I really want my currency to have an unchecked exchange rate, that would do a lot for me" is 0. I also don't feel that's an honest representation of why anyone has gotten into btc (although I am sure some claim that's why they did it)
The one I know who actually want to use Bitcoin et al and/or work in the space (not outside "investors" who just want to earn as much money as soon as possible), don't consider the exchange rate important at all and couldn't care less about it, as Bitcoin is not for exchanging it to USD/EUR/whatever.
But presumably they care if bitcoin is still exchangeable to something (maybe goods and services?). The exchange rate to currencies determines the exchange rate to everything else. If they don’t care about exchanging bitcoin for currencies or goods or services then what is the purpose of BTC? Both currency and store of value use cases depend on exchangability.
There is a concept called Bitcoin maximalism that means, in my understanding, that the whole world would switch to BTC so that the exchange rates to other currencies wouldn’t matter anymore.
It’s easy to get paid in BTC if you land a crypto job, but it’s the groceries part that I can’t really imagine yet.
But even maximalists care to be able to use bitcoin to buy goods and services (eg be able to spend it). Since other currencies are also capable of being exchanged for good and services then the exchange rate to other currencies determines how much goods btc can buy (or there will be an arbitrage opportunity).
One of the few avenues for entertainment remaining on social media are watching BTC maxis and ETH bagholders argue that the other is completely useless.
So given the trilemma then, it sounds like Bitcoin maximalism means fixed exchange rates (since all countries use BTC), and free flow of capital (since that's the BTC ideal), which means no country can set independent monetary policy.
So you essentially have the Eurozone problems but across the entire world. Seems like many countries would try to avoid picking that side of the trilemma.
But even in a purely BTC universe, wouldn’t the relative value of goods/services stay the same? You’d still need more BTC, the same way you need more fiat today.
That's not an accurate description of BTC maximalism.
Usually a BTC maximalist means that within the context of crypto, they are BTC only and aggressively and passionately reject every other crypto token. This is what you call call a common maximalist stance.
Out of that group, a small minority is a believer in "hyperbitcoinization". This is an event where BTC becomes the dominant asset class, at the expense of gold, bonds, etc, with a market cap prediction for BTC ranging from 10-100T.
Even people with that (unlikely) hope, do not claim any currency replacement, only an asset shift.
Libertarian maxis seem to think that negative externalities won't affect them personally.
In lieu of an elected government and sane central bank, monetary policy will be controlled by a cartel of your locality's most powerful gangs and paramilitaries.
There's a reason the example quoted is always Star Trek and not Somalia.
I used dash to buy food for people in Venezuela during the height of the Maduro conflict (still ongoing really but this is while it kicked off) when all other methods had failed.
It was farmer that turned his farm into direct sales, used an Uber like service to deliver and used DASH as point of sale and store of value...is what I did illegal??
There are a ton of uses cases out there where blockchain tech can provide a faster better solution, not every single case but it's there.
Even the 'criminal' side is nothing compared to the USD and how it's used. That same argue applies even stronger to fiat currencies.
A bankless note isn't a new idea, ops solution is novel and well thought out and there are markets that it solves pain points.
I am not sure the alternative (traditional banking) is so co2 neutral. As far as I know they all have plenty of huge buildings with hundreds of people wasting their time & resources working for them.
Don't get me wrong I am sure bitcoin is worse in terms of power usage, but not every crypto is automatically worse than what we have right now.
You can see it as an idiotic PoW for all those people working in those banks.
It's easy to make it renewable with benefits to us. The solar panel on a bank building is giving energy to people.
And I'm not saying that the current banking system is perfect (it actually optimizes itself quite well) but it has much more features while Bitcoin/crypto doesn't have real solutions for huge issues.
Fraud, scams, money laundry, investment tools, sepa, bank account recovery, global market regulations, sanctions Support etc.
And it does all of that with billions and billions of assets.
While Bitcoin consumes energy.
In an utopian society we don't need banks and no PoW crypto but that's not what is critical now.
Besides aluminum smelter, due to high energy costs there are other critical industry affected as well: paper making and glass making. Bottles for example.
Money needs to be reinvented since politics has hijacked it and used it as a tool to deliver policy (at the expense of money's functions). I think it's evil to harvest the wallets of poor people for scraps, pile it together and give it to the richest, which is effectively what inflation is.
Isn't moving money around with APIs just moving money around by sending messages, which is what we can do already by sending a check in the mail?
How many hundreds of billions or even trillions of dollars of market cap is dedicated to providing: bank accounts, transfer services, security brokerage, options trading, credit default swaps, and other derivatives. You can easily implement the entire functionality of the entire global banking system on the blockchain. Rather than require hundreds of thousands of specialized bankers, you can do it with miners running nodes in the block chain. This is a huge efficiency improvement and allows for a more democratized system. You can think this is cool, or stupid, or dangerous, or all three. But if you aren't interested in the tech, why bother commenting on it?
Except when someone who can program better than you can pick that money right out of your pocket (or so called "smart" contracts.)
I identify as a hacker, and I don't think all things should be programmable. Votes should not be programmable or hackable. I'm almost certain that at certain point money shouldn't be either, given how rife the abuse can be.
It's a non-sovereign store of value (potentially). It's not meant to substitute completely for fiat credit for day to day commerce or transactions, just to be used a store of value to hedge currency debasement which is coming due to so much sovereign debt. It's gold in a more transmittable form.
You spend and transact mostly in fiat, you borrow in fiat. You save some percent of your earnings in more finite stores of value (you and everyone else already do this so the concept is not controversial).
I'm curious about those numbers for both cases myself, but I know that only one of them you can actually get the numbers from (although only the number of coins in wallets, not coins belonging to users, as a user can have many wallets), the other one is completely in the dark as no one can really say who has what.
Since we can't know the numbers for fiat, we can at least try to understand it for Bitcoin. As far as I can tell, sources seem to point towards the number being closer to ~2% of wallets hold ~70% of all Bitcoin.
If this is a better/worse distribution than fiat, we will never know.
Without looking at details too much, it's seems significantly different than paper claims on a separate physical asset held by a custodian 3rd party subject to counter-party risk.
The control of the BTC is maintained with possession of the private key stored in the bearer asset cash.
Holding gold certificates does not enforce any fundamental claim or control of the actual asset the backs the paper; possession of the physical gold does. You need to trust somehow that the holder will exchange the gold for the paper in the future, as well as actually have the gold at that time.
Well, here you need to trust that their app will exist next year. And perhaps also that something will happen when you cut the notes, but I'm not sure I got that part...
I don't know if it exactly like gold certificates, but it sounds pretty close to "I'll pay you with cashews" to me. It's not terrible - I bet a many people exchange goods like this every day.
As long as Federal reserve keeps tightening monetary conditions, nothing will beat cash. The argument is though that they cannot continue down this path as the amount of debt in the system will result in everything breaking as a result of this tightening.
Also, you do realize this point of view "muh down YTD" is a meme comment yes? Stare at any 6month period of any chart and you can make any argument you want. Are stocks not inflation hedges generally? Yet they are down YTD too. In the period of monetary expansion from 2020 through 2021, did not BTC do just fine hedging this monetary expansion? Even in Wiemar Germany, gold did not go up in a straight line, it was extremely volatile. BTC is more volatile than almost anything else that still long term has worked to hedge expansion of liquidity. BTC moves in line with growth or contraction of liquidity better than anything else. Just look at the charts.
Additionally, my point is this is the framework. It can also be a failed experiment. But there is no scenarios where a finite asset can replace fiat currency. There is theoretical basis for same asset to replace other forms of scarce stores of value. In principle, BTC is a SoV asset, not a transaction currency or unit of account by virtue of its technical fundamentals (un-inflatable supply, expensive to transact, slow).
Because some portion of cost of living will expand with it..housing prices, other financial assets and therefore wealth of those investing in them, and in the future, costs of commodities and other consumption items as investors drain the stored energy in these "liquidity capacitors" and the money flows into the real economy.
"mitigate the potential negative effects of" I guess..
>How is it a hedge if it moves in line with liquidity?
I don't know what you're asking? Liquidity expansion inflates assets, and BTC inflates more than almost anything, especially over a multi-year time frame.
It hedges just holding cash. It hedges the opportunity cost of not investing while invest-able assets are going up in value, and wages on a relative basis are not.
>Why is expansion of liquidity is something one would need to hedge against?
Sort of a philosophical question lol. Maybe you don't. If one wants to invest at all (why though?) this is a framework for thinking about that process.
What the everloving fuck are you talking about? Bitcoin is deflationary to the point that nearly everyone uses it as an "investment" vehicle, not to actually transfer money. Do you even know what inflation is?
Its price inflates. Prior to 2021 when people talk of the Federal reserve keeping rates low, general price inflation was low, but there was "inflation" in asset prices. This is what I'm referring to. Monetary inflation existed and it flowed into financial assets.
> Someone enlighten me on the merits of this idea.
Currency that can't be manipulated or devalued by the state or central banks. In other words: eliminates the potential for exactly what's taking place worldwide right now.
With inflation at the rate it's at, I can't help but laugh at "crypto is so volatile!" That argument made sense in the endless bull markets - but these days? What's not volatile? I-Bonds?
The idea that the US Dollar is the eternal pinnacle of stability always seemed naive in principle, but now its clearly naive in practice.
Yes, because tying deflation and inflation to the rate of 'how quickly do we mine gold' is a brilliant way to run an economy.
Don't open enough gold mines? Here comes the deflationary spiral of death to strangle the economy. Too many gold mines? Inflation, inflation, inflation.
Can we do anything to dampen either one? Nope.
> 2. Use it as a geopolitical weapon.
Sure as hell beats getting involved in an actual shooting war.
This was exactly the history of the American economy in the 19th century. Rapid episodes of deflation would regularly bankrupt farmers, who couldn't sell their crops for enough to repay their loans.
I'm not really sure why people opine about not using the gold standard.
Especially crypo-enthusiasts or even libertarians (I consider my self tangent to both these groups).
Gold is terrible for the following reasons.
* Supply is unknown so your market cap value is volatile to any sudden prospected windfall. This one is ESPECIALLY bad if you are a central government. Why would a central bank want to be beholden (with respect to purchasing power) to some random gold find that devalues the currency unexpectedly? (see wiki article about Mansa Musa who just went around destroying local economies because he just literally threw his gold around.)
* Gold is not very divisible, in that there are real costs to trying to divide the mint.
* Gold comes with high storage/security costs (especially if it is your currency back).
* Gold isn't really that transferable, the stuff is a pain in the ass to actually move around.
Gold has two things going for it.
1. It has manufacturing uses that provide real world value
2. Through out time people have a perception that it should have value. This perception spans across cultures and geography.
There's no opining about it. It was the best solution at the time and removing it eliminated the last remaining dam preventing absolute corruption of our money by the state.
The collapse of the Bretton-Woods system was really bad. It got so bad that Nixon had to temporarily suspend exchange of notes for gold. It eventually dragged all currencies into a death-spiral. You can read all about it in the history books. Why should it be repeated?
The Austrian school of economics radically simplifies economic theory to an absurd degree (I assume that's what you're signalling you follow given your statements). It treats empirical evidence as heresy. The only driving force behind all of their conspiracy theories and racist/anti-semitic dog-whistling is a belief that governments are evil and all inflation is bad. It's really reductive and anti-intellectual.
Inflation isn't inherently bad and not all inflation is the same.
In terms of geopolitics the collapse of the Bretton-Woods system has had many benefits. Much of the world eventually recovered by the mid-80s by the economic crises of the late-60s. Also in the history books.
War and debt are bedfellows. Everyone knows this. Also well known are the economic consequences of creating such debt by going to war. It turns out mostly authoritarian psychopaths will go to war or make crypto-currencies official currencies despite the economic consequences and impacts it would have on their citizens.
Because fiat enables them to be as much. If you can print money, you don't need public consent to go blow people out of the water, nor to justify obscene spending on the military. Every war the U.S. has been involved in since Vietnam has been a banker war, not a state war.
What's reductive and anti-intellectual is deluding people into believing that giving the government (or even worse, "economists" or central bankers) authority over their wealth is, somehow, going to multiply or protect it when we have ample examples to the contrary.
To your point, governments historically are evil and inflation is bad (it's arguably an inherent property of government as you're giving absolute power to the unproductive class). The idea that it's not (MMT) is the rationalization of a failed economic strategy that's put everyone's well-being in the crosshairs.
The idea that any of that is untrue is a result of unrelenting propaganda and indoctrination (or, in certain cases, someone who has directly benefited from the scheme). Any way you shake it, to think that what's happening isn't the result of malfeasance is denial, wholesale.
Mayer Rothschild codified the potential for this way of thinking with his Economic Inductance theory:
> Currency, or deposit loan accounts, has the required appearance of power that could be used to induce people into surrendering their real wealth in exchange for a promise of greater wealth (interests). When applied gradually, the public adapts to its presence and learns to tolerate its encroachment on their lives until the pressure (psychological via economic) becomes too great and they crack up, depending on their resilience capacity.
Flip on the television if you need insight into what people do when they "crack up."
It sounds to me like you believe in conspiracy theories about finance and banking and the threatening powers that control them. I suppose you also take Ezra Pound's later obscenities about global finance and the reasons for war to heart. And therein lies the problem with the goldbug: the path to fascism.
All inflation is bad is a highly reductive argument. It is much more complicated than that and most economic models indicate that a certain amount of inflation is a good thing for overall growth. This is why, in the US, the Federal Reserve targets 2% inflation. There are a lot of positive effects to inflation and trying to control it so that it grows moderately is a good thing. There are decades of research as to why this is the case even though I suspect it won't sway you I suggest you try reading it if you are seriously interested in educating yourself about what you're talking about.
Do I believe the current economic conditions are the result of a scheme among elite bankers? No. A conspiracy involving more than two people is not sustainable and not a conspiracy. Financial regulation is managed in most Western countries by democratic representation. In the US they created the Federal Reserve system. If you want to see what they get up to they publish their board meeting notes, research, reports, results of votes, etc. It's open information.
If Americans have a problem with the system they're free to vote for representation that will introduce laws that will change the way the Federal Reserve is run... although in my experience very few people even know what the Fed does or that they have a website.
I don't need the thought experiments of a long-dead banker who didn't live to see the formation of the Federal Reserve. The quote you're citing is antiquated. Banks today don't make money on deposits like they did in this Rothschild's day and people aren't worried about runs on a bank's reserves anymore.
Although if they're invested in crypto via Tether or any other stable coin they ought to be.
> It sounds to me like you believe in conspiracy theories about finance and banking[...]
Yeah, dude.
> Do I believe the current economic conditions are the result of a scheme among elite bankers? No.
You're their ideal customer.
> A conspiracy involving more than two people is not sustainable and not a conspiracy.
You, like many people, highly underestimate the role of hierarchy in a conspiracy. The people at the top don't have to tell you it's a conspiracy or explain why they're having you do what you're doing. They just say "hey, manager, go do this" (who wants to keep their job and will do something, even if it's irrational) and then that edict trickles down till you get to a lower-level worker who's only concern is "will I get my paycheck?"
It's why it's possible and why it works. Most people are timid cattle that are deathly afraid of their "superiors" and this logic enables psychopathic behavior quite well. Couple that with folks like yourself who are desperate to explain away evil in the world and you have a pretty kick ass machine for corruption.
Decide for yourself. Mayer Rothschild died 100 years before the creation of the Federal Reserve. Banking in his time was extremely different.
Monetary policy in the US is federally regulated by the Federal Reserve. Their meeting minutes, votes, etc are all public information. We all benefit from this regulation. Because of it, banks are forced to disclose their finances as part of their SEC filings. Ever notice how they claim to care about the environment and the Paris Agreements and yet their investments in oil and gas have increased in the last couple of years?
Some people have because regulation does work some times.
I'd offer a less technical criticism on the economic and monetary system you defend.
At the end of the day, now matter what happens, somehow the system always calibrates to ensure that the typical human being is a wage slave for life. Spectacular improvements in productivity and technology are somehow never returned to the worker, the system then just increases the cost of living, or creates new jobs, many of no real purpose.
It's a system to both maximize work and consumption, which is as anti-economical as it gets. It's also a system that crashes when it doesn't grow. It's also a system that completely ignores every externality and wrecks everything in its path.
But yes, I'm sure you're right that from within this system, everything you say is technically correct.
> For we are opposed around the world by a monolithic and ruthless conspiracy that relies primarily on covert means for expanding its sphere of influence--on infiltration instead of invasion, on subversion instead of elections, on intimidation instead of free choice, on guerrillas by night instead of armies by day. It is a system which has conscripted vast human and material resources into the building of a tightly knit, highly efficient machine that combines military, diplomatic, intelligence, economic, scientific and political operations.
You don't understand how Bitcoin works, and that's okay, but you need to do your homework before you make foolish comments like this.
Bitcoin's supply is regulated via a timed algorithm, meaning, it doles out an increasingly diminished amount of Bitcoin on a pre-timed cycle that will end in ~2140. In order to get that Bitcoin, "miners" need to perform work (via calculation of a nonce which as an auto-adjusting difficulty of computation—the "proof of work") that can't be faked or manipulated.
The beauty of that is that, unlike a central bank, no one can go and change a variable in a database to say "omg we have more money now!"
Looking at how Bitcoin's price has fluctuated over the years, it should be pretty obvious by now that manipulating, inflating, and devaluing a currency doesn't only happen through releasing new notes. Bitcoin isn't immune from manipulation just because the supply is pre-decided.
Bitcoin's price has fluctuated because of the same market dynamics that play out everywhere.
Most people are panicky and hair-triggered, very few are patient. Especially with a new technology that has the potential to make outsized returns early on, of course, you're going to get a lot of gamblers entering and exiting the market.
This is why you see dips when headlines like "China bans mining!" or "Crypto is doomed, look at Luna!" are printed. It conflates things and uses people's ignorance against them (not unlike traditional financial markets/instruments).
Correct, and all of that stuff is subject to manipulation, often by powerful actors behind the scenes or by grifters playing off of people's insecurities, fear of missing out, etc...
Controlling the supply of a coin does not mean the coin's actual value can't be manipulated by dedicated actors, and in the case of cryptocurrency, the "mystique" of the tech behind it, the ease of creating new systems on top of it that are complicated for ordinary users to understand, and the general fear people have of missing out on a speculative investment (as well as the general fear they have that they might be in a speculative bubble) make coins like Bitcoin particularly vulnerable to specific kinds of social manipulation, scams, and phishing, all of which end up affecting the price of the coin.
The fed can't release new Bitcoins, sure, but in exchange, now random celebrities on Twitter can cause sell-offs and spikes in value; random Discord groups can pump coins so they can sell off and make a profit before they crash. You haven't gotten rid of currency manipulation, you've just changed who's doing it.
> The fed can't release new Bitcoins, sure, but in exchange, now random celebrities on Twitter can cause sell-offs and spikes in value; random Discord groups can pump coins so they can sell off and make a profit before they crash.
This is why anything that isn't Bitcoin is referred to as a shitcoin, and why the conflating of Bitcoin with everything else is so problematic. The former is designed to prevent that manipulation, the latter leverages it.
Then we get back to looking at Bitcoin's price chart, and I still think looking at the level of volatility in Bitcoin's price over time shows that it is not really immune from the kind of manipulation you're saying it resists.
I mean, if nothing else, shitcoins crashing/spiking regularly cause Bitcoin's price to adjust as well. Tera isn't Bitcoin, but that didn't make Bitcoin immune from volatility when Tera's price crashed; the manipulation techniques that work on shitcoins seem to fairly regularly have knock-on effects on Bitcoin as well.
I don't buy that social manipulation has no influence on Bitcoin.
The focus on price relative to USD is too short-term of thinking. The reason I hold the opinion I do is related to scale. A system like Bitcoin if adopted at a standard-level (i.e., long-term prospects) would not see fluctuations in price because it wouldn't be able to—the market would naturally stabilize as people would be able to use it to pay bills, buy groceries, and the sheer scale of the market couldn't be dictated by a single "whale." Technically that can happen today, but there's a massive psychological gap that needs to be crossed.
I'm curious how you expect Bitcoin to obsolete every single alternative currency/value-store we have today including longstanding systems like gold, when you're telling me that Bitcoin's price stabilizing is reliant on it being the only possible currency that people can use.
> I'm curious how you expect Bitcoin to obsolete every single alternative currency
I didn't say that.
> you're telling me that Bitcoin's price stabilizing is reliant on it being the only possible currency that people can use
Nor did I say that.
---
Obsoletion of the incumbent options will come through a few means:
1. Hyperinflation (where I think we're headed). Basically, what happened in Germany in the 1920s. Instead of a Rentenmark, though, we'll get CBDCs which are a hyper-limited, state-issued digital currency that's used as a political weapon. They'll give it to people for "free" to encourage adoption (because they can mint as much as they want) but not tell them that it expires or can't be used for certain purchases the regime disagrees with. This will create a financial caste system where free/wealthy people use Bitcoin and the proletariat use the CBDC (i.e, they become slaves of the state). I think this is most likely as state power will fight to the death to not give up control of money (that's their only control against the people) but they will tolerate an "elite" class that can bribe their way out of control.
2. Natural transition. As more options for accepting Bitcoin (e.g., if Square/Block add lightning payments to their terminals, circumventing Visa/MC/etc.) become available and people understand it, they'll be incentivized to use it via discounts, perks, etc. Think early days of "order online" and how a lot of people scuffed at that.
It would be unfortunate then if there was a large amount of evidence that Bitcoin's price was partially tied to the stock market's health, and that global volatility and market issues in general affected the value of cryptocurrency just like they affect the price/value of everything else.
> 2. Natural transition
I think this is what a lot of us are getting at; Bitcoin as it stands is worse at transactions then pretty much every other currency and platform today. It's not competitive with those platforms for most people. That's not to say that it has no usecase at all, but for mass-market adoption and for the average person's use-case, Bitcoin is an awful transaction method.
So when people tell me that I need to think long term, I'm curious how they expect to get to the long term given that in the short term Bitcoin is basically awful for mass-market usage and isn't going to be adopted by ordinary people for ordinary transactions until after its fundamental problems like volatility are solved. So it all feels pretty circular.
You're telling me that stabilization requires increased use. In your words, "a system like Bitcoin if adopted at a standard-level (i.e., long-term prospects) would not see fluctuations in price because it wouldn't be able to".
I am telling you that Bitcoin won't get increased use if it doesn't (at least) stabilize. So it doesn't really matter whether Bitcoin would have fluctuations at that point, because nobody who's not a speculative investor, dedicated to the cause, or an extremely niche user wants to deal with the fluctuations in order to use it as a currency today.
The effect of those concepts are the same, and pretty much no end user cares about the difference.
And it's worse than just that the currency pair BTC/USD is manipulable. USD prices have a loose mapping to actual value, the relationship between BTC/USD isn't just arbitrary numbers. It's not just that the exchange rate between BTC and USD is changing, independent of the USD the actual market value represented by a Bitcoin is changing.
In other words, you do not need to manipulate the supply of a currency in order to manipulate the amount of purchasing power or value that each "unit" of that currency represents.
Bitcoin proponents often try to bring up supply manipulation like it's some kind of unique category, but it's really not. Currency manipulation does not require control of the supply.
The purchasing power of a Bitcoin changes. That's the only thing an end-user cares about.
Do you think that people care about inflation because there are more dollars in existence? No, they care because they can't make the same level of purchases with the dollars they're holding.
Bitcoin's price relative to the dollar indicates what you can buy with it; when that price changes it's no comfort to people that technically the same number of coins exist. They care about what the coin is worth, and Bitcoin's worth can be manipulated regardless of what its supply is.
If Tether collapses, you can certainly expect a panic in all cryptocurrency markets, but it has no direct means of manipulating Bitcoin.
Only 6.02% of their reserves are held in "digital tokens," the rest are held in traditional assets and cash: https://tether.to/en/transparency/#reports (scroll down to "Reserves Breakdown").
Direct or not, in that scenario the Bitcoin price is still being artificially increased for the benefit of a private malevolent actor.
If you want to call that something other than manipulation, then :shrug:, more power to you. But my main takeaway is still going to be that banannaise's original comment seems to be mostly accurate.
> But my main takeaway is still going to be that banannaise's original comment seems to be mostly accurate.
I'd highly recommend taking the time to rethink that position. The systems being implemented now will permanently enslave you. Bitcoin is the only escape. And no, I'm not being hyperbolic.
> The systems being implemented now will permanently enslave you.
Recognizing that there are significant problems with current financial systems does not automatically imply that Bitcoin in specific is a reasonable or feasible alternative to those systems.
Candy bars are unhealthy for me, and I can recognize that, but that doesn't mean I'm obligated to eat dirt. In other words, it's not enough for Bitcoin proponents to point out that traditional fiat systems have problems, they need to prove that Bitcoin meaningfully solves those problems or improves upon them. All of you've done so far in this thread is argue about how narrowly people should apply the word "manipulation", you haven't demonstrated that banannaise's original comment is wrong in a way that ordinary currency users would care about.
I think most of the real-world evidence we have shows that Bitcoin and other cryptocurrencies are just as manipulable as existing systems regardless of whether or not they have a fixed supply, and in fact are currently somehow impossibly managing to be regularly manipulated to an even higher degree than existing fiat systems.
- "you can certainly expect a panic in all cryptocurrency markets"
- "but it has no direct means of manipulating Bitcoin."
How do square these two parts of the sentence? The ability to cause a panic in the Bitcoin space on command by crashing another cryptocurrency sounds a lot like manipulation to me.
As an end user, why should I care about a technicality over how exactly someone is manipulating a currency that I own? Why does it matter whether manipulation is direct or indirect?
If the claim is that Bitcoin is only immune to specifically direct manipulation (where direct is a narrow sub-category of manipulation techniques), then... sure, maybe that's true, but it's also not that impressive and doesn't change all that much about the end-user's risks, since the more general forms of currency manipulation still seem to be entirely possible.
> You can cause panic in traditional finance markets, too. It's the exact same principle at play.
I don't think that's being debated, people are just pointing out that Bitcoin's price can be still be manipulated by powerful actors.
Bitcoin's price, yes, but not the actual currency itself. That will be the major psychological void to fill in for people: thinking about Bitcoin as a currency, not an investment or gambling device.
I expect that to take decades as the government/media are and will continue to attack Bitcoin and influence public opinion as it directly interferes with their business model.
First BTC has to do better than USD at transactions. It clearly isn't there now, and I'm not sure I see a path where it achieves that. USD will continue to exist as long as the US Government does, and if that falls, then, well, I've got other problems more pressing.
> Bitcoin's price, yes, but not the actual currency itself.
Again, as a user, who the heck cares? The Bitcoin in your wallet changes how much it's worth, it's the same outcome as normal currency manipulation. If the effects are the same, and the changes to the value of the currency are the same, then the specific details about how that effect was caused don't matter to end users.
Second:
> That will be the major psychological void to fill in for people: thinking about Bitcoin as a currency, not an investment or gambling device.
I just finished talking to someone a day ago on this very site who argued with me for ages that Bitcoin was a store of value and shouldn't be thought of a currency and accused me of not understanding the history of the coin because I pointed out correctly that many early proponents of Bitcoin were pushing it as a currency for regular everyday transactions.
And I am so not willing to have the same exact conversation a second time just with the the details and direction swapped out. All of these arguments always being with, "hah, people should research Bitcoin more before criticizing it", even though everyone in the community who says that is constantly making contradictory claims while arguing that they represent some kind of community consensus or coordinated effort.
But to summarize the problems with the specific claim being made this time around:
Bitcoin is bad at everyday transactions for a dozen reasons that have been already explored in depth over and over again in the past and that are easy to research. If your goal is to make an everyday transactable currency, Bitcoin is a bad choice for that, for obvious reasons -- even without getting into the technical reasons why a deflationary asset is in general a bad fit for transactions, all you need to do is look at the history of Bitcoin's price; that's not a chart that indicates a healthy currency intended to be used for normal purchases. Honestly, the characterization of Bitcoin as a rarely-transferred store of value is a stronger argument, and even that isn't a particularly strong argument.
Stock markets aren’t manipulated at the technology level either - it’s large flows of capital, insider trading, pumping dumping, and other shady business.
In this particular instance, yes. With this specific use case, there isn't. But adoption of Bitcoin in general is a net positive (I think of something like these notes being a gateway drug to self-custody).
I was reading an email exchange from Atari employees in 1984. There was one comment.. computers are not useful for anything but playing games. It's all marketing fluff.
Here we are 40 years later communicating with computers. I wonder if in 40 years someone will read your comment and wonder how clueless some were in this era.
They laughed at Columbus and they were right!
Columbus said "I think the earth is like half the size everyone else says it is and I'm going to sail around it" and everyone with reputable mathematicians said "Nope"
If America didn't exist, and Columbus was relying on his plan, they all would have starved to death roughly where the East Coast is
> I wonder if in 40 years someone will read your comment and wonder how clueless some were in this era.
Hindsight is 20/20, so of course someone will still make that mistake 40 years down the road. We can barely predict with any meaningful accuracy what will happen next year. The idea that we can predict 40 years out is the very height of hubris.
> So far with crypto the only use cases seems to be criminal. To buy illegal stuff and for ransomware.
Given that E2EE encrypted messaging apps such as Signal give criminals, extremists and scammers a hiding place such that the messages are totally unreadable by anyone else, does that mean we should tell Google and Amazon to ban Signal off of their servers because they are enabling such a communication service that benefits these criminals, extremists and scammers?
Also how does one 'hide' their transactions on a transparent ledger for everyone to see and trace even if they do use it for ransomware or illegal stuff? Is that why regulators haven't banned those cryptocurrencies yet and instead have targeted privacy-coins in new regulations requiring exchanges to de-list them? [0]
Seems like Stripe [1], Moneygram [2], Checkout.com [3] etc still seem to see that some of them have a use case. Perhaps that explains why they also waited for regulations before proceeding to use them [0].
In 2011, you could buy coffee and pizza w/ BTC (at non-conformist boutique shops but still). Now, not even those stores would accept it as a method of payment, and you'd be stupid to spend it on goods and services anyway, because BTC's value is wrapped up in the idea that it's a 'digital asset' instead of a currency.
>So far with crypto the only use cases seems to be criminal. To buy illegal stuff and for ransomware.
This just keeps getting trotted out again and again on HN as if it were a dying circus horse, but with no real merit. Even analysis by companies that spend all day, every day tracking cryptocurrency use and transactions estimate that only something like 2% of them are criminal. Even if we add in fraudulent/criminal funds that were laundered well enough to hide their origin and purpose from these tracking services, the percentage is still almost certainly a small minority.
Add to that a couple things: First, that not all "criminal" transactions are morally wrong just because they're illegal. No doubt there are anti-Putin Russians right now trying to get their money out of country with crypto and breaking a law or two. Are they scum?
Secondly, yes, there are many, many normal people using crypto for many things. I personally know many who do this, for work payments, difficult transactions because of some regulatory bullshit, remittances and even in one case as payment for contemporary dance services while living overseas. Anecdotes, but I have no doubt that they're extremely widespread, because my friend circle isn't one of crypto bros and money launderers. It's of ordinary people.
How fucking tedious to see a so-called hacker site shit so much and with so much categorically dismissive ignorance on something many of its readers emotionally dislike.
Thanks for the feedback. Ideally we would have opened up sales right away rather than a waiting list (we have the notes manufactured), but we are waiting to wrap up a few key pieces like the mobile apps.
We highlight the low serial notes as we know numismatists like to collect this sort of thing.
> we are waiting to wrap up a few key pieces like the mobile apps
Interesting approach but this Show HN got some decent attention. Are mobile apps even necessary? Doesn't waiting for them blow the attention you're getting via HN today?
We're going to showcase the physical notes in person at Consensus, which is arguably the last major Bitcoin conference of the year (certainly for US market).
We've found that having notes in person helps folks to understand the concept more easily.
The biggest challenge we have with stablecoins is justifying why when US Dollars are ubiquitous and "free".
I think there are some good arguments for stablecoins in markets that desire dollars, but they are hard to get -- or for high denomination notes, however, we suspect there would be additional regulatory challenges here.
In maybe the far future, when a larger proportion of the population holds digital assets, I see a potential functional value in having this type of note - it's harder to digitally fake these notes, and "burning" might be harder than just ripping up the piece of paper.
This made me wonder, money has been around for a long time, so it's hard to ask about a specific event, but say the first minting of USD, was there ... a line to get it? Did the fed just dump huge sacks of the stuff at post offices with a note saying "you can use this instead of doubloons"?
Guess I am just curious if the same kind of effect was observed, I suppose banks would have been trying to "secure their spot" for some first release of $CURRENCY notes/coins? Hard to imagine Joe Homesteader lining up at 9AM.
I can’t speak to real life but if you want to read an enjoyable depiction of how society might react to novel currencies, check out Going Postal and Making Money by Terry Pratchett.
I'm going to go full science fiction here: if someone were to let off an EMP (so beloved by 1990s action movies) would any of these notes within range irreversibly lose access to the associated crypto?
Yes, probably. I would also recommend carrying the notes in an EMF protected wallet.
We have considered a feature which explicitly lets you back up the user keys from notes so that you have this as a fallback claim, but this might also encourage people to just "mine" notes in the hope that someone doesn't re-key. Given there is nothing we can do to prevent this...we might build it.
How easy is it to attack this by cutting the specific part of the note that releases the key but making it look like it's whole? Couldn't I cut the note in half and tape it together again and fool someone who doesn't know much about it? Or couldn't I cut the specific bit with an Xacto knife, take the funds and still circulate the bill?
But then that kind of invalidates the "offline" claim, I don't think they'd make it if they needed the app? Then again, maybe you need the app but it doesn't need network access.
I'm also unclear whether being cut is truly the only way to trigger the release. Could the note be damaged in other ways to get it to think it's been cut? The website is extremely light on details.
If authoritarian governments want to take away cash, this gives an
incentive and mechanism for privately minted cash that will change the
dynamic. I wonder though, how to mitigate against physical forgery. I
get the feeling that this could work out much more trustable than
even the best anti-counterfeit technologies presently used for cash
currency.
Thank you -- as another commenter noted we cannot act as the Secret Service to remove counterfeit notes from circulation, so the implication probably is that folks need to get into the habit of scanning notes prior to acceptance.
> If authoritarian governments want to take away cash
If an authoritarian government is taking away cash they've already passed the step at which making/importing this kind of object is illegal
And if you can import this kind of privately minted note then you can also import foreign cash whose value people can trust without having to destroy it and for which they don't have to remember a password (for each note I imagine, it's not clear from the website how any part of it works)
There are use cases for these kind of tokens but I can't find one which is efficiently solving a problem not uniquely tailored to rich free countries
Just in case, by tokens I am (in this comment) just referring to the notes, not the concept of bitcoin in general
Either you can use the internet than you don't need that note.
You need internet to actually verify and take ownership of the value of it.
It only helps if the giver doesn't have internet.
And sure it's easier to smuggle this one note over a border than a suitcase bout you could smuggle actually anything with an offline wallet in it like USB stick, CD etc.
First the company. The fact that startups have realised a future of
cash involving different hybrid physical technologies is important.
Activity in this space shows that people take cash and its unique
social properties seriously and will invest in it.
Secondly, the advance in cash technologies generally. Super thin
"smart textiles" open up a new world for cash. If you think about it
the technology that already goes into bank notes is amazing, but it's
mostly aimed at anti-counterfeit. We had a brainstorm over here to few
months ago to talk about hybrid physical cash. Ideas like using e-ink
to display the current stored value, "paper" notes that could be
debited, zero knowledge proofs to show the bearer has funds and title
while both parties remain anonymous, ways to turn GNU Taler into
hybrid cash, "contactless cash"... and much more.
Lastly, while I am not a fan of Bitcoin for environmental reasons, I
think that visible/tangible forms of cryptocurrency are an important
piece of the jigsaw in bringing widespread acceptance and usage of
next generation cryptocurrencies, because they have important social
implications for freedom and democracy.
As it is, it may not be a success (the phone verification is already a
show-stopper for me precisely because I want digital cash that works
independently of smartphones) - but first movers lay the groundwork
for the future, so I'll be watching this.
I'm not sure if your first point is a necessity for other perhaps good ideas.
They will either not make those notes or only do one batch due to it just being a novelty in it's current state.
For me it feels like 'blind entrepreneur + we want to ship + we need to ship for more funding'.
I would even like to support weird ideas if it wouldn't promote Bitcoin usage :-(
I think your second point is more interesting: why do you think this digital to analog transition will be a thing?
Even in Zimbabwe they already have 50% smartphones and those are only getting cheaper and cheaper and will continue to flood the market.
My future imagines a smartphone only world for everything. From money, to house and car key. Germany now allows your passport or driver license on your phone.
I think it will be much more interesting how we can make smartphone theft obsolete and phone recovery easy. Like how do I regain my phone's state when I loose it while traveling.
> I think your second point is more interesting: why do you think this
digital to analog transition will be a thing?
It's not digital to analogue so much as changing forms of digital
technology. Digital technology can exist in many different ways. For
example bus tickets in Budapest used a matrix of holes punched out of
paper a grid because a brilliant Hungarian mathematician worked out a
way to make digital combinations in rows and columns allow multiple
journeys but allow an inspector to see if the passenger had punched
their ticket by adding the holes in some row and column. Like a
primitive QR code that's a digital technology.
A single function "digital banknote" that uses practically zero-cost
static patterning would hopefully operate much like a paper note, with
added anti-counterfeit benefits; I could put it in drawer for 10
years, pass it to a friend as a gift, no batteries to charge, no
network to go down, no virus or malware to corrupt it, no remote
kill-switch built in by MegaGigaCom.
Having gone to the currency printing industry events the environmental impact of polyethylene currencies appears to be lower and the plastic currencies appear to last longer.
Not as much, but the most common modern currency substrate is PET which is probably the most recyclable plastic. There are a lot of 'wtf' moments when one gets a glimpse behind the veil of an otherwise super secretive industry but this part at least is actually surprisingly mundane.
We used Greco-Roman god statues -- Apollo, Venus, Minerva and Neptune (some of the model statues were Greek, others Roman).
We decided that because of the anonymity of Bitcoin it didn't feel right to 'select' portraits of real people representative of Bitcoin, but rather choose aspirational portraits of mythical figures.
I have to trust the bill is valid and that the person passing along the bill is honest. There is no central authority who will go after those that make counterfeit bills, like the FBI. There is no central bank that I can go to exchange the bill.
Those producing the bills seems like a power grab. If people were to trust in a central authority to produce the bills, then that company has a whole lot of power over a decentralized currency.
If you don't trust the bill, scan it to validate the multisig, re-key the note or
cut the note to claim the Bitcoin. If you can't validate the note, don't accept it.
We don't store key material. We have 0 capability to spend any Bitcoin from the notes.
I don't think you read the website. You can verify the funds aren't spent via NFC chip and the blockchain itself. You then rotate the user key so only you can spend it after receiving the bill.
A bit cumbersome but your criticism about trust is incorrect.
485 comments
[ 4.0 ms ] story [ 243 ms ] threadWe were heavily inspired by OG Bitcoin physical money like Casascius coins, however, we wanted to created a design whereby (1) anyone can spend, gift and share the Bitcoin for years to come without having to worry a sophisticated attacker who extracts a private key from under a label or scratch off and (2) trust was minimized on that part of the printer (us).
This lead us to the design we landed on for the Bitcoin Note
1) An NFC chip readable by nearly all modern smartphones
2) A two part multisig where (1) we write an encrypted private key to the note (and don't keep a copy and (2) you write a user key to the note in plaintext and then load the note
3) We only release the decryption key when someone cuts the note and reports this via an authenticated and encrypted way to our server
4) The multisig reverts to only your key after a printed expiration date on the note
5) You can re-key the user key on the note you receive if you want to hold it for a long time
We believe that the result of this design achieves the goal of Bitcoin that's incredibly easy to use - like cash - but still preserves the important quality of self-custody. Take a look at http://bitcoinnote.com/ to learn more and reserve a spot in line for our release later this summer.
This definitely seems more convenient than performing a 10m blockchain transaction. But what's the value prop over USD cash? Just novelty?
The toy version of this is like buying a hardware wallet with the Bitcoin in escrow. The eventual flow is more like an ATM. There one kind of already "buys" cash in the form of a service charge (often refunded by one's own bank). Cash is the most common form of peer to peer payment. Bitcoin is the best form of peer to peer money. This combines the two.
It allows for instant, anonymous settlement in regions with poor connectivity (El Salvador, Ukraine.) Lower barrier to entry for very old and very young users. Skips the complicated process of onboarding people into learning about key management - everyone already knows how to keep cash secure. Getting self-custody of Bitcoin is important but usability has always been a challenge. This attempts to solve for some of those problems, particularly in cash economies where Bitcoin adoption as a medium exchange is more popular.
Basically let's get everybody using self-custodial, multi-sig hardware wallets with really, really good privacy properties but make them not intimidating by presenting them in a skeuomorphic cash form.
What's your business model? Do you plan to recoup costs by selling the physical notes, or is there some other plan?
What percentage of your orders come from such disadvantaged regions?
For folks who want to hold/save/gift Bitcoin over USD, this is an easy way to do it.
We will have iOS and Android apps available (and we will open source them for peer review as well).
There is absolutely no way I would trust that - because even if I trusted that person's integrity I would also need to trust that they themselves had the technical knowledge to reliably make that confirmation. And that they hadn't made a mistake.
But, fair point. I would always err on the side of recommending someone scan a note rather than not.
How can you know someone hasn't transferred the money out of their bank account when they hand you a check?
1) Credit cards with transaction fees (which crypto people hate) that protect against this and have replaced the needs for checks
2) You take checks from people you trust
3) You have banks that compete with each other for storing your dollars and provide services to protect against fraud.
There was this big push in retail a few years ago to get customers to stop using credit cards. I knew it was going to fail, but merchants are looking for alternatives here.
Obviously, this was the best of both worlds; a payment network with no fees to the merchants, and no cash to handle.
As for things like SaaS, the alternative to credit cards is a signed contract and ACH.
If you aren't charging merchants fees, how do you sustain it?
Retailers dislike dispute resolution processes that favor the consumer by default. Their alternative, for the most part, is a process wherein they simply control the whole process and can decide in favor of themselves on a whim.
> There was this big push in retail a few years ago to get customers to stop using credit cards.
Really, says what retailers? EDIT: saw your note below about MCX. Noted.
- Your revenues go up because people are spending money they may or may not have in the future
- You don't lose out on a sale because someone is a 5c, 12c, 18c, etc. short
- You don't have to deal with physical cash (armored transportation to banks, miscounting, theft, etc.)
I personally think CC fees are egregious, but pretending they add little to no value to the extent that they aren't useful for the merchant is pretty myopic.
This is a gross misunderstanding on how chargebacks work and is factually incorrect.
Merchants grumble because that's what merchants do, but they are coming out way ahead anyway. There was (maybe still is) a cash only restaurant/bar in Boulder back when I lived there. The food and beer were great. They probably could have done an order of magnitude more business if they charged $0.18 more per burger and took CCs. Instead they had an ATM that probably charged the customer 10%. They weren't sticking it to the man, but they sure were sticking it to their customers.
But either way, checks aren't credit even if you say it is...
Most people can, unless the fake is high quality. There are a ton of easily checked security features that don't require any tool or network access. These bills do not have any of those.
> But either way, checks aren't credit even if you say it is...
It is a form of credit if you think about it.
It is a piece of paper that promises the payment of money from one person to another person... the technical term is "Negotiable Instrument" (https://en.wikipedia.org/wiki/Negotiable_instrument).
If you are accepting the check, you are extending short term credit to the person who gives you the check... they are promising to pay the amount at a later date, even if that later date is only the few days that it takes for a cashed check to be settled. That is credit.
Besides that, what's wrong with a private entity issuing its own scrip? It's how our current system of currency got its start with private banks issuing promissory notes which were eventually adopted by the state. You probably personally hold quite a lot of it in the form of debt or reward programs. This goes a little further in that it is redeemable for an alternate form of currency not backed by a state but that's not really an argument against it, historically people have used all kinds of alternate currencies. It really just comes down to what two individuals agree is an appropriate medium of exchange whether it's bitcoin, dollars or cigarettes.
Nothing 'wrong' with it, per se. But the whole concept reads like a bad Saturday Night Live skit.
If the note expires then only the user key on the note can claim. However, this is an important risk to consider -- if you have notes on hand that have expired and you haven't re-keyed them, there will likely be a race at expiration to claim for anyone has encountered the note.
We recommend that if you don't plan on spending a note right away (as cash) that you re-key first to ensure that you're the only one who can claim at the point of expiration.
And what is a "sewer" in your world? (Edit: I think it's a typo for "server.")
It was a pleasure to work with an actual banknote designer, Tom Badley, to accomplish this.
¹Does anyone know of a country use portrait layout?
https://www.blogto.com/city/2018/11/10-dollar-bill-canada/
Wondering if this requires a money transfer agent license in the US, since you are holding funds in custody and issuing scrip?
1. What are the steps to purchase it.
2. What are the steps to spend it.
3. What are the steps to receive it, including verification.
4. Convince me I won't lose my funds by accident.
5. Convince me I won't lose my funds by hack of protocol.
6. Convince me I won't lose funds if a hacker gains access to your centralized system.
7. What happens if I lose the note(s)?
8. Processing fees.
9. Can I give someone a note and avoid the Bitcoin transaction fee? (I am guessing yes as nothing needs to happen on the chain. But if I receive a note can I be sure I won't be swindled).
If I wasn't giving you the benefit of the doubt, it really smells like your typical crypto scam to trick people that don't understand the technology fully into giving you money.
So, just like cash you can hand the note to someone and using the app they (1) can tap the note to see the public keys and verify it is loaded and (2) cut the note to claim (the fact that the note is cut is sent to us at which point we respond with a decryption key to unlock the second private key that lives on the note).
isn't that a counter to the whole point of a cash-currency?
I either don't understand the specifics of the keying or it doesn't make sense.
There's some kind of private key. Makes sense. But there appears to be some kind of second key. At some point the note will "expire" and only the person who owns the second key can redeem the Bitcoin?
If I understand right, either the person who physically holds the note can update the key (in which case what purpose does it serve) or the key needs to be transferred along with physical possession of the note (in which case what purpose does the product serve).
Also what does it mean for the note to be "cut"? Like with scissors?
Is this product just intended for hardcore crypto folks or is it intended for regular people too?
Yes, exactly. There is a spot indicated on the note to cut it. This "tampers" the associated chip which can be reported back to us so that we release the encryption key to decrypt the local key.
> Is this product just intended for hardcore crypto folks or is it intended for regular people too?
Regular people too! The UX of our app will simplify a big part of this by indicating to folks the state of a note and their options with respect to claiming Bitcoin.
The site mentions the decryption key is released when the note is "cut". Does that mean there's something enclosed in the bill, and you have to physically cut it open to extract it?
Once the trace is cut the app can report that fact to us at which point we release the decryption key.
Only, without the oversight of a central bank.. Without the means to keep the exchange rate in check. They can't change the rate of interest or anything else.
So far with crypto the only use cases seems to be criminal. To buy illegal stuff and for ransomware. Maybe it could be useful in countries where the currency is devalued like some in South-America. But then all the extra steps seem to be a big hurdle to me.
Someone enlighten me on the merits of this idea.
You seem to have nailed the use case well. This is exactly why'd someone use something like this.
I'm not saying it's a good idea (nor a bad one), just that those things are "features" in the eyes of the cryptocurrency users and proponents, not bugs.
Everyone's a fiat incumbent in the long run.
It’s easy to get paid in BTC if you land a crypto job, but it’s the groceries part that I can’t really imagine yet.
So given the trilemma then, it sounds like Bitcoin maximalism means fixed exchange rates (since all countries use BTC), and free flow of capital (since that's the BTC ideal), which means no country can set independent monetary policy.
So you essentially have the Eurozone problems but across the entire world. Seems like many countries would try to avoid picking that side of the trilemma.
Usually a BTC maximalist means that within the context of crypto, they are BTC only and aggressively and passionately reject every other crypto token. This is what you call call a common maximalist stance.
Out of that group, a small minority is a believer in "hyperbitcoinization". This is an event where BTC becomes the dominant asset class, at the expense of gold, bonds, etc, with a market cap prediction for BTC ranging from 10-100T.
Even people with that (unlikely) hope, do not claim any currency replacement, only an asset shift.
In lieu of an elected government and sane central bank, monetary policy will be controlled by a cartel of your locality's most powerful gangs and paramilitaries.
There's a reason the example quoted is always Star Trek and not Somalia.
It was farmer that turned his farm into direct sales, used an Uber like service to deliver and used DASH as point of sale and store of value...is what I did illegal??
There are a ton of uses cases out there where blockchain tech can provide a faster better solution, not every single case but it's there.
Even the 'criminal' side is nothing compared to the USD and how it's used. That same argue applies even stronger to fiat currencies.
A bankless note isn't a new idea, ops solution is novel and well thought out and there are markets that it solves pain points.
Ordering food online vs. Terrawatts of energy wasted, Asics hardware and GPU prices and the created co2 of all of that.
Mmhhh difficult very difficult
Don't get me wrong I am sure bitcoin is worse in terms of power usage, but not every crypto is automatically worse than what we have right now.
It's easy to make it renewable with benefits to us. The solar panel on a bank building is giving energy to people.
And I'm not saying that the current banking system is perfect (it actually optimizes itself quite well) but it has much more features while Bitcoin/crypto doesn't have real solutions for huge issues.
Fraud, scams, money laundry, investment tools, sepa, bank account recovery, global market regulations, sanctions Support etc.
And it does all of that with billions and billions of assets.
While Bitcoin consumes energy.
In an utopian society we don't need banks and no PoW crypto but that's not what is critical now.
Besides aluminum smelter, due to high energy costs there are other critical industry affected as well: paper making and glass making. Bottles for example.
Lol, compare and contrast apples to apples first and you'll see the cost in energy is negligible.
Also what do when POS drops and ruins your current strawman argument.
There was zero other way to pay for it, people were literally walking over to Columbia to get money they could use.
Anyway I can see your a bad faith actor, GLHF!
How many hundreds of billions or even trillions of dollars of market cap is dedicated to providing: bank accounts, transfer services, security brokerage, options trading, credit default swaps, and other derivatives. You can easily implement the entire functionality of the entire global banking system on the blockchain. Rather than require hundreds of thousands of specialized bankers, you can do it with miners running nodes in the block chain. This is a huge efficiency improvement and allows for a more democratized system. You can think this is cool, or stupid, or dangerous, or all three. But if you aren't interested in the tech, why bother commenting on it?
I identify as a hacker, and I don't think all things should be programmable. Votes should not be programmable or hackable. I'm almost certain that at certain point money shouldn't be either, given how rife the abuse can be.
You spend and transact mostly in fiat, you borrow in fiat. You save some percent of your earnings in more finite stores of value (you and everyone else already do this so the concept is not controversial).
The idea is explained here: Ctrl + F "two monies"
http://fofoa.blogspot.com/2011/05/return-to-honest-money.htm...
Since we can't know the numbers for fiat, we can at least try to understand it for Bitcoin. As far as I can tell, sources seem to point towards the number being closer to ~2% of wallets hold ~70% of all Bitcoin.
If this is a better/worse distribution than fiat, we will never know.
Bitcoin is a nice mirror to look into. We need to eliminate money, go full star trek post scarcity utopia.
Could you source that claim? I find it absurd that you think such studies haven’t considered crypto exchange wallets in their analysis…
It's all public knowledge.
Electricity is scarce, and unholy amounts of it are needed to create this post-money utopia.
The control of the BTC is maintained with possession of the private key stored in the bearer asset cash.
Holding gold certificates does not enforce any fundamental claim or control of the actual asset the backs the paper; possession of the physical gold does. You need to trust somehow that the holder will exchange the gold for the paper in the future, as well as actually have the gold at that time.
I don't know if it exactly like gold certificates, but it sounds pretty close to "I'll pay you with cashews" to me. It's not terrible - I bet a many people exchange goods like this every day.
You're honestly going to claim that an asset that is down more than 40% YTD is a hedge against inflation?
Also, you do realize this point of view "muh down YTD" is a meme comment yes? Stare at any 6month period of any chart and you can make any argument you want. Are stocks not inflation hedges generally? Yet they are down YTD too. In the period of monetary expansion from 2020 through 2021, did not BTC do just fine hedging this monetary expansion? Even in Wiemar Germany, gold did not go up in a straight line, it was extremely volatile. BTC is more volatile than almost anything else that still long term has worked to hedge expansion of liquidity. BTC moves in line with growth or contraction of liquidity better than anything else. Just look at the charts.
Additionally, my point is this is the framework. It can also be a failed experiment. But there is no scenarios where a finite asset can replace fiat currency. There is theoretical basis for same asset to replace other forms of scarce stores of value. In principle, BTC is a SoV asset, not a transaction currency or unit of account by virtue of its technical fundamentals (un-inflatable supply, expensive to transact, slow).
> BTC moves in line with growth or contraction of liquidity better than anything else.
> In the period of monetary expansion from 2020 through 2021, did not BTC do just fine hedging this monetary expansion?
How is it a hedge if it moves in line with liquidity?
Why is expansion of liquidity is something one would need to hedge against?
"mitigate the potential negative effects of" I guess..
>How is it a hedge if it moves in line with liquidity?
I don't know what you're asking? Liquidity expansion inflates assets, and BTC inflates more than almost anything, especially over a multi-year time frame.
It hedges just holding cash. It hedges the opportunity cost of not investing while invest-able assets are going up in value, and wages on a relative basis are not.
>Why is expansion of liquidity is something one would need to hedge against?
Sort of a philosophical question lol. Maybe you don't. If one wants to invest at all (why though?) this is a framework for thinking about that process.
What the everloving fuck are you talking about? Bitcoin is deflationary to the point that nearly everyone uses it as an "investment" vehicle, not to actually transfer money. Do you even know what inflation is?
Yes, that's a good thing.
> Someone enlighten me on the merits of this idea.
Currency that can't be manipulated or devalued by the state or central banks. In other words: eliminates the potential for exactly what's taking place worldwide right now.
The idea that the US Dollar is the eternal pinnacle of stability always seemed naive in principle, but now its clearly naive in practice.
1. Unpeg it from a gold standard.
2. Use it as a geopolitical weapon.
The power and greed were too intoxicating.
Don't open enough gold mines? Here comes the deflationary spiral of death to strangle the economy. Too many gold mines? Inflation, inflation, inflation.
Can we do anything to dampen either one? Nope.
> 2. Use it as a geopolitical weapon.
Sure as hell beats getting involved in an actual shooting war.
Until it backfires and creates the potential for a nuclear war.
Especially crypo-enthusiasts or even libertarians (I consider my self tangent to both these groups).
Gold is terrible for the following reasons.
* Supply is unknown so your market cap value is volatile to any sudden prospected windfall. This one is ESPECIALLY bad if you are a central government. Why would a central bank want to be beholden (with respect to purchasing power) to some random gold find that devalues the currency unexpectedly? (see wiki article about Mansa Musa who just went around destroying local economies because he just literally threw his gold around.)
* Gold is not very divisible, in that there are real costs to trying to divide the mint.
* Gold comes with high storage/security costs (especially if it is your currency back).
* Gold isn't really that transferable, the stuff is a pain in the ass to actually move around.
Gold has two things going for it.
1. It has manufacturing uses that provide real world value
2. Through out time people have a perception that it should have value. This perception spans across cultures and geography.
https://wtfhappenedin1971.com/
A website showing charts that demonstrate a shift in data since 1971 is not a conspiracy theory. That requires...an actual theory.
The Austrian school of economics radically simplifies economic theory to an absurd degree (I assume that's what you're signalling you follow given your statements). It treats empirical evidence as heresy. The only driving force behind all of their conspiracy theories and racist/anti-semitic dog-whistling is a belief that governments are evil and all inflation is bad. It's really reductive and anti-intellectual.
Inflation isn't inherently bad and not all inflation is the same.
In terms of geopolitics the collapse of the Bretton-Woods system has had many benefits. Much of the world eventually recovered by the mid-80s by the economic crises of the late-60s. Also in the history books.
War and debt are bedfellows. Everyone knows this. Also well known are the economic consequences of creating such debt by going to war. It turns out mostly authoritarian psychopaths will go to war or make crypto-currencies official currencies despite the economic consequences and impacts it would have on their citizens.
Because fiat enables them to be as much. If you can print money, you don't need public consent to go blow people out of the water, nor to justify obscene spending on the military. Every war the U.S. has been involved in since Vietnam has been a banker war, not a state war.
What's reductive and anti-intellectual is deluding people into believing that giving the government (or even worse, "economists" or central bankers) authority over their wealth is, somehow, going to multiply or protect it when we have ample examples to the contrary.
To your point, governments historically are evil and inflation is bad (it's arguably an inherent property of government as you're giving absolute power to the unproductive class). The idea that it's not (MMT) is the rationalization of a failed economic strategy that's put everyone's well-being in the crosshairs.
The idea that any of that is untrue is a result of unrelenting propaganda and indoctrination (or, in certain cases, someone who has directly benefited from the scheme). Any way you shake it, to think that what's happening isn't the result of malfeasance is denial, wholesale.
Mayer Rothschild codified the potential for this way of thinking with his Economic Inductance theory:
> Currency, or deposit loan accounts, has the required appearance of power that could be used to induce people into surrendering their real wealth in exchange for a promise of greater wealth (interests). When applied gradually, the public adapts to its presence and learns to tolerate its encroachment on their lives until the pressure (psychological via economic) becomes too great and they crack up, depending on their resilience capacity.
Flip on the television if you need insight into what people do when they "crack up."
All inflation is bad is a highly reductive argument. It is much more complicated than that and most economic models indicate that a certain amount of inflation is a good thing for overall growth. This is why, in the US, the Federal Reserve targets 2% inflation. There are a lot of positive effects to inflation and trying to control it so that it grows moderately is a good thing. There are decades of research as to why this is the case even though I suspect it won't sway you I suggest you try reading it if you are seriously interested in educating yourself about what you're talking about.
Do I believe the current economic conditions are the result of a scheme among elite bankers? No. A conspiracy involving more than two people is not sustainable and not a conspiracy. Financial regulation is managed in most Western countries by democratic representation. In the US they created the Federal Reserve system. If you want to see what they get up to they publish their board meeting notes, research, reports, results of votes, etc. It's open information.
If Americans have a problem with the system they're free to vote for representation that will introduce laws that will change the way the Federal Reserve is run... although in my experience very few people even know what the Fed does or that they have a website.
I don't need the thought experiments of a long-dead banker who didn't live to see the formation of the Federal Reserve. The quote you're citing is antiquated. Banks today don't make money on deposits like they did in this Rothschild's day and people aren't worried about runs on a bank's reserves anymore.
Although if they're invested in crypto via Tether or any other stable coin they ought to be.
Yeah, dude.
> Do I believe the current economic conditions are the result of a scheme among elite bankers? No.
You're their ideal customer.
> A conspiracy involving more than two people is not sustainable and not a conspiracy.
You, like many people, highly underestimate the role of hierarchy in a conspiracy. The people at the top don't have to tell you it's a conspiracy or explain why they're having you do what you're doing. They just say "hey, manager, go do this" (who wants to keep their job and will do something, even if it's irrational) and then that edict trickles down till you get to a lower-level worker who's only concern is "will I get my paycheck?"
It's why it's possible and why it works. Most people are timid cattle that are deathly afraid of their "superiors" and this logic enables psychopathic behavior quite well. Couple that with folks like yourself who are desperate to explain away evil in the world and you have a pretty kick ass machine for corruption.
> The quote you're citing is antiquated.
Who decides that? You?
Monetary policy in the US is federally regulated by the Federal Reserve. Their meeting minutes, votes, etc are all public information. We all benefit from this regulation. Because of it, banks are forced to disclose their finances as part of their SEC filings. Ever notice how they claim to care about the environment and the Paris Agreements and yet their investments in oil and gas have increased in the last couple of years?
Some people have because regulation does work some times.
At the end of the day, now matter what happens, somehow the system always calibrates to ensure that the typical human being is a wage slave for life. Spectacular improvements in productivity and technology are somehow never returned to the worker, the system then just increases the cost of living, or creates new jobs, many of no real purpose.
It's a system to both maximize work and consumption, which is as anti-economical as it gets. It's also a system that crashes when it doesn't grow. It's also a system that completely ignores every externality and wrecks everything in its path.
But yes, I'm sure you're right that from within this system, everything you say is technically correct.
I am criticizing the implication that the banking system is run by vast conspiracy and that the gold standard was a better system.
> John F. Kennedy, 1961
Kennedy was talking about the Cold War and the need for and limits of secrecy in governance during times of war.
Bitcoin's supply is regulated via a timed algorithm, meaning, it doles out an increasingly diminished amount of Bitcoin on a pre-timed cycle that will end in ~2140. In order to get that Bitcoin, "miners" need to perform work (via calculation of a nonce which as an auto-adjusting difficulty of computation—the "proof of work") that can't be faked or manipulated.
The beauty of that is that, unlike a central bank, no one can go and change a variable in a database to say "omg we have more money now!"
Most people are panicky and hair-triggered, very few are patient. Especially with a new technology that has the potential to make outsized returns early on, of course, you're going to get a lot of gamblers entering and exiting the market.
This is why you see dips when headlines like "China bans mining!" or "Crypto is doomed, look at Luna!" are printed. It conflates things and uses people's ignorance against them (not unlike traditional financial markets/instruments).
Controlling the supply of a coin does not mean the coin's actual value can't be manipulated by dedicated actors, and in the case of cryptocurrency, the "mystique" of the tech behind it, the ease of creating new systems on top of it that are complicated for ordinary users to understand, and the general fear people have of missing out on a speculative investment (as well as the general fear they have that they might be in a speculative bubble) make coins like Bitcoin particularly vulnerable to specific kinds of social manipulation, scams, and phishing, all of which end up affecting the price of the coin.
The fed can't release new Bitcoins, sure, but in exchange, now random celebrities on Twitter can cause sell-offs and spikes in value; random Discord groups can pump coins so they can sell off and make a profit before they crash. You haven't gotten rid of currency manipulation, you've just changed who's doing it.
This is why anything that isn't Bitcoin is referred to as a shitcoin, and why the conflating of Bitcoin with everything else is so problematic. The former is designed to prevent that manipulation, the latter leverages it.
I mean, if nothing else, shitcoins crashing/spiking regularly cause Bitcoin's price to adjust as well. Tera isn't Bitcoin, but that didn't make Bitcoin immune from volatility when Tera's price crashed; the manipulation techniques that work on shitcoins seem to fairly regularly have knock-on effects on Bitcoin as well.
I don't buy that social manipulation has no influence on Bitcoin.
What is the incentive for Average Joe to use BTC for transactions while USD exists?
The average Joe will be the last person to use it daily, just like every other technological invention. That's why they're average.
I didn't say that.
> you're telling me that Bitcoin's price stabilizing is reliant on it being the only possible currency that people can use
Nor did I say that.
---
Obsoletion of the incumbent options will come through a few means:
1. Hyperinflation (where I think we're headed). Basically, what happened in Germany in the 1920s. Instead of a Rentenmark, though, we'll get CBDCs which are a hyper-limited, state-issued digital currency that's used as a political weapon. They'll give it to people for "free" to encourage adoption (because they can mint as much as they want) but not tell them that it expires or can't be used for certain purchases the regime disagrees with. This will create a financial caste system where free/wealthy people use Bitcoin and the proletariat use the CBDC (i.e, they become slaves of the state). I think this is most likely as state power will fight to the death to not give up control of money (that's their only control against the people) but they will tolerate an "elite" class that can bribe their way out of control.
2. Natural transition. As more options for accepting Bitcoin (e.g., if Square/Block add lightning payments to their terminals, circumventing Visa/MC/etc.) become available and people understand it, they'll be incentivized to use it via discounts, perks, etc. Think early days of "order online" and how a lot of people scuffed at that.
It would be unfortunate then if there was a large amount of evidence that Bitcoin's price was partially tied to the stock market's health, and that global volatility and market issues in general affected the value of cryptocurrency just like they affect the price/value of everything else.
> 2. Natural transition
I think this is what a lot of us are getting at; Bitcoin as it stands is worse at transactions then pretty much every other currency and platform today. It's not competitive with those platforms for most people. That's not to say that it has no usecase at all, but for mass-market adoption and for the average person's use-case, Bitcoin is an awful transaction method.
So when people tell me that I need to think long term, I'm curious how they expect to get to the long term given that in the short term Bitcoin is basically awful for mass-market usage and isn't going to be adopted by ordinary people for ordinary transactions until after its fundamental problems like volatility are solved. So it all feels pretty circular.
You're telling me that stabilization requires increased use. In your words, "a system like Bitcoin if adopted at a standard-level (i.e., long-term prospects) would not see fluctuations in price because it wouldn't be able to".
I am telling you that Bitcoin won't get increased use if it doesn't (at least) stabilize. So it doesn't really matter whether Bitcoin would have fluctuations at that point, because nobody who's not a speculative investor, dedicated to the cause, or an extremely niche user wants to deal with the fluctuations in order to use it as a currency today.
Bitcoin's supply cannot be manipulated, unlike fiat. The currency pair BTC/USD is very much manipulated, as is pretty much any asset paired to USD.
These are two different concepts.
And it's worse than just that the currency pair BTC/USD is manipulable. USD prices have a loose mapping to actual value, the relationship between BTC/USD isn't just arbitrary numbers. It's not just that the exchange rate between BTC and USD is changing, independent of the USD the actual market value represented by a Bitcoin is changing.
In other words, you do not need to manipulate the supply of a currency in order to manipulate the amount of purchasing power or value that each "unit" of that currency represents.
Bitcoin proponents often try to bring up supply manipulation like it's some kind of unique category, but it's really not. Currency manipulation does not require control of the supply.
Do you think that people care about inflation because there are more dollars in existence? No, they care because they can't make the same level of purchases with the dollars they're holding.
Bitcoin's price relative to the dollar indicates what you can buy with it; when that price changes it's no comfort to people that technically the same number of coins exist. They care about what the coin is worth, and Bitcoin's worth can be manipulated regardless of what its supply is.
Only 6.02% of their reserves are held in "digital tokens," the rest are held in traditional assets and cash: https://tether.to/en/transparency/#reports (scroll down to "Reserves Breakdown").
Imagine I am the director of Tether.
I print $1 billion in Tether out of thin air.
I then buy bitcoin with it on a UST/BTC exchange.
Bitcoin price goes up.
If you want to call that something other than manipulation, then :shrug:, more power to you. But my main takeaway is still going to be that banannaise's original comment seems to be mostly accurate.
I'd highly recommend taking the time to rethink that position. The systems being implemented now will permanently enslave you. Bitcoin is the only escape. And no, I'm not being hyperbolic.
Recognizing that there are significant problems with current financial systems does not automatically imply that Bitcoin in specific is a reasonable or feasible alternative to those systems.
Candy bars are unhealthy for me, and I can recognize that, but that doesn't mean I'm obligated to eat dirt. In other words, it's not enough for Bitcoin proponents to point out that traditional fiat systems have problems, they need to prove that Bitcoin meaningfully solves those problems or improves upon them. All of you've done so far in this thread is argue about how narrowly people should apply the word "manipulation", you haven't demonstrated that banannaise's original comment is wrong in a way that ordinary currency users would care about.
I think most of the real-world evidence we have shows that Bitcoin and other cryptocurrencies are just as manipulable as existing systems regardless of whether or not they have a fixed supply, and in fact are currently somehow impossibly managing to be regularly manipulated to an even higher degree than existing fiat systems.
I already did but you didn't like my answer.
- "but it has no direct means of manipulating Bitcoin."
How do square these two parts of the sentence? The ability to cause a panic in the Bitcoin space on command by crashing another cryptocurrency sounds a lot like manipulation to me.
These are indirect effects as they are events that occur outside of Bitcoin but cause people who have Bitcoin to sell or trade it.
You can cause panic in traditional finance markets, too. It's the exact same principle at play.
If the claim is that Bitcoin is only immune to specifically direct manipulation (where direct is a narrow sub-category of manipulation techniques), then... sure, maybe that's true, but it's also not that impressive and doesn't change all that much about the end-user's risks, since the more general forms of currency manipulation still seem to be entirely possible.
> You can cause panic in traditional finance markets, too. It's the exact same principle at play.
I don't think that's being debated, people are just pointing out that Bitcoin's price can be still be manipulated by powerful actors.
I expect that to take decades as the government/media are and will continue to attack Bitcoin and influence public opinion as it directly interferes with their business model.
> Bitcoin's price, yes, but not the actual currency itself.
Again, as a user, who the heck cares? The Bitcoin in your wallet changes how much it's worth, it's the same outcome as normal currency manipulation. If the effects are the same, and the changes to the value of the currency are the same, then the specific details about how that effect was caused don't matter to end users.
Second:
> That will be the major psychological void to fill in for people: thinking about Bitcoin as a currency, not an investment or gambling device.
I just finished talking to someone a day ago on this very site who argued with me for ages that Bitcoin was a store of value and shouldn't be thought of a currency and accused me of not understanding the history of the coin because I pointed out correctly that many early proponents of Bitcoin were pushing it as a currency for regular everyday transactions.
And I am so not willing to have the same exact conversation a second time just with the the details and direction swapped out. All of these arguments always being with, "hah, people should research Bitcoin more before criticizing it", even though everyone in the community who says that is constantly making contradictory claims while arguing that they represent some kind of community consensus or coordinated effort.
But to summarize the problems with the specific claim being made this time around:
Bitcoin is bad at everyday transactions for a dozen reasons that have been already explored in depth over and over again in the past and that are easy to research. If your goal is to make an everyday transactable currency, Bitcoin is a bad choice for that, for obvious reasons -- even without getting into the technical reasons why a deflationary asset is in general a bad fit for transactions, all you need to do is look at the history of Bitcoin's price; that's not a chart that indicates a healthy currency intended to be used for normal purchases. Honestly, the characterization of Bitcoin as a rarely-transferred store of value is a stronger argument, and even that isn't a particularly strong argument.
Where's the merit?
Here we are 40 years later communicating with computers. I wonder if in 40 years someone will read your comment and wonder how clueless some were in this era.
1. That people have been wildly wrong about various technologies before is not evidence that a given specific technology will succeed.
2. Many critics don't doubt the technical capabilities but instead worry about the social harm of systems developed using cryptocurrencies.
That reminds me of a line from a track by Apollo 440:
"Mick Jagger came up to me and I said 'I've seen the future' and he goes 'Yeah, if there is one...'".
If America didn't exist, and Columbus was relying on his plan, they all would have starved to death roughly where the East Coast is
Hindsight is 20/20, so of course someone will still make that mistake 40 years down the road. We can barely predict with any meaningful accuracy what will happen next year. The idea that we can predict 40 years out is the very height of hubris.
Or Turkey, who's inflation is around 70% right now.
Given that E2EE encrypted messaging apps such as Signal give criminals, extremists and scammers a hiding place such that the messages are totally unreadable by anyone else, does that mean we should tell Google and Amazon to ban Signal off of their servers because they are enabling such a communication service that benefits these criminals, extremists and scammers?
Also how does one 'hide' their transactions on a transparent ledger for everyone to see and trace even if they do use it for ransomware or illegal stuff? Is that why regulators haven't banned those cryptocurrencies yet and instead have targeted privacy-coins in new regulations requiring exchanges to de-list them? [0]
Seems like Stripe [1], Moneygram [2], Checkout.com [3] etc still seem to see that some of them have a use case. Perhaps that explains why they also waited for regulations before proceeding to use them [0].
[0] https://www.europarl.europa.eu/news/en/press-room/20220309IP...
[1] https://stripe.com/blog/expanding-global-payouts-with-crypto
[2] https://www.bloomberg.com/news/articles/2022-05-29/moneygram...
[3] https://www.checkout.com/solutions/crypto#stablecoin
[4] https://www.whitehouse.gov/briefing-room/statements-releases...
In 2011, you could buy coffee and pizza w/ BTC (at non-conformist boutique shops but still). Now, not even those stores would accept it as a method of payment, and you'd be stupid to spend it on goods and services anyway, because BTC's value is wrapped up in the idea that it's a 'digital asset' instead of a currency.
This just keeps getting trotted out again and again on HN as if it were a dying circus horse, but with no real merit. Even analysis by companies that spend all day, every day tracking cryptocurrency use and transactions estimate that only something like 2% of them are criminal. Even if we add in fraudulent/criminal funds that were laundered well enough to hide their origin and purpose from these tracking services, the percentage is still almost certainly a small minority.
Add to that a couple things: First, that not all "criminal" transactions are morally wrong just because they're illegal. No doubt there are anti-Putin Russians right now trying to get their money out of country with crypto and breaking a law or two. Are they scum?
Secondly, yes, there are many, many normal people using crypto for many things. I personally know many who do this, for work payments, difficult transactions because of some regulatory bullshit, remittances and even in one case as payment for contemporary dance services while living overseas. Anecdotes, but I have no doubt that they're extremely widespread, because my friend circle isn't one of crypto bros and money launderers. It's of ordinary people.
How fucking tedious to see a so-called hacker site shit so much and with so much categorically dismissive ignorance on something many of its readers emotionally dislike.
From my perspective as a Bitcoin (and related) skeptic, here's what turns me off, probably an easy fix:
> Secure your spot
> Reserve your spot in line for one of the first 2100 Bitcoin Note packs shipping this summer. ...
...and...
> Limited First Edition
> The first release of the Bitcoin Note will only be 2100 packs of low serial number notes. ...
This turns me off because I hear the same pitch in almost every other ICO-like event: "Get yours now, while it's still juicy and sweet".
We highlight the low serial notes as we know numismatists like to collect this sort of thing.
Interesting approach but this Show HN got some decent attention. Are mobile apps even necessary? Doesn't waiting for them blow the attention you're getting via HN today?
We've found that having notes in person helps folks to understand the concept more easily.
Its a small community but they’ve been around since the Casascius days, long predating crypto asset securities (which predates the ICO)
I think there are some good arguments for stablecoins in markets that desire dollars, but they are hard to get -- or for high denomination notes, however, we suspect there would be additional regulatory challenges here.
In maybe the far future, when a larger proportion of the population holds digital assets, I see a potential functional value in having this type of note - it's harder to digitally fake these notes, and "burning" might be harder than just ripping up the piece of paper.
Guess I am just curious if the same kind of effect was observed, I suppose banks would have been trying to "secure their spot" for some first release of $CURRENCY notes/coins? Hard to imagine Joe Homesteader lining up at 9AM.
We have considered a feature which explicitly lets you back up the user keys from notes so that you have this as a fallback claim, but this might also encourage people to just "mine" notes in the hope that someone doesn't re-key. Given there is nothing we can do to prevent this...we might build it.
If authoritarian governments want to take away cash, this gives an incentive and mechanism for privately minted cash that will change the dynamic. I wonder though, how to mitigate against physical forgery. I get the feeling that this could work out much more trustable than even the best anti-counterfeit technologies presently used for cash currency.
If an authoritarian government is taking away cash they've already passed the step at which making/importing this kind of object is illegal
And if you can import this kind of privately minted note then you can also import foreign cash whose value people can trust without having to destroy it and for which they don't have to remember a password (for each note I imagine, it's not clear from the website how any part of it works)
There are use cases for these kind of tokens but I can't find one which is efficiently solving a problem not uniquely tailored to rich free countries
Just in case, by tokens I am (in this comment) just referring to the notes, not the concept of bitcoin in general
You need internet to actually verify and take ownership of the value of it.
It only helps if the giver doesn't have internet.
And sure it's easier to smuggle this one note over a border than a suitcase bout you could smuggle actually anything with an offline wallet in it like USB stick, CD etc.
Why is this significant in your eyes?
I'm lost
A few reasons.
First the company. The fact that startups have realised a future of cash involving different hybrid physical technologies is important. Activity in this space shows that people take cash and its unique social properties seriously and will invest in it.
Secondly, the advance in cash technologies generally. Super thin "smart textiles" open up a new world for cash. If you think about it the technology that already goes into bank notes is amazing, but it's mostly aimed at anti-counterfeit. We had a brainstorm over here to few months ago to talk about hybrid physical cash. Ideas like using e-ink to display the current stored value, "paper" notes that could be debited, zero knowledge proofs to show the bearer has funds and title while both parties remain anonymous, ways to turn GNU Taler into hybrid cash, "contactless cash"... and much more.
Lastly, while I am not a fan of Bitcoin for environmental reasons, I think that visible/tangible forms of cryptocurrency are an important piece of the jigsaw in bringing widespread acceptance and usage of next generation cryptocurrencies, because they have important social implications for freedom and democracy.
As it is, it may not be a success (the phone verification is already a show-stopper for me precisely because I want digital cash that works independently of smartphones) - but first movers lay the groundwork for the future, so I'll be watching this.
They will either not make those notes or only do one batch due to it just being a novelty in it's current state.
For me it feels like 'blind entrepreneur + we want to ship + we need to ship for more funding'.
I would even like to support weird ideas if it wouldn't promote Bitcoin usage :-(
I think your second point is more interesting: why do you think this digital to analog transition will be a thing?
Even in Zimbabwe they already have 50% smartphones and those are only getting cheaper and cheaper and will continue to flood the market.
My future imagines a smartphone only world for everything. From money, to house and car key. Germany now allows your passport or driver license on your phone.
I think it will be much more interesting how we can make smartphone theft obsolete and phone recovery easy. Like how do I regain my phone's state when I loose it while traveling.
It's not digital to analogue so much as changing forms of digital technology. Digital technology can exist in many different ways. For example bus tickets in Budapest used a matrix of holes punched out of paper a grid because a brilliant Hungarian mathematician worked out a way to make digital combinations in rows and columns allow multiple journeys but allow an inspector to see if the passenger had punched their ticket by adding the holes in some row and column. Like a primitive QR code that's a digital technology.
A single function "digital banknote" that uses practically zero-cost static patterning would hopefully operate much like a paper note, with added anti-counterfeit benefits; I could put it in drawer for 10 years, pass it to a friend as a gift, no batteries to charge, no network to go down, no virus or malware to corrupt it, no remote kill-switch built in by MegaGigaCom.
Is this similar to "plastic" cash like Australian and New Zealand bills? Nearly impossible to tear, don't wear out nearly as fast as US bills.
US bills are a cotton/linen blend, and the larger denominations don't age nearly as quickly. We should embrace $1 coins, but we won't.
Celebrating drug runners, malicious state actors and pirates, and environmental disaster.
We decided that because of the anonymity of Bitcoin it didn't feel right to 'select' portraits of real people representative of Bitcoin, but rather choose aspirational portraits of mythical figures.
I like the concept of multisig being indistuingishable from single sig or other scripts.
I have to trust the bill is valid and that the person passing along the bill is honest. There is no central authority who will go after those that make counterfeit bills, like the FBI. There is no central bank that I can go to exchange the bill.
Those producing the bills seems like a power grab. If people were to trust in a central authority to produce the bills, then that company has a whole lot of power over a decentralized currency.
Why? They go after people copying bits after all... i.e.: movies
We don't store key material. We have 0 capability to spend any Bitcoin from the notes.
There's the centralized trust... How can you prove this?
I primarily state that from the regulatory perspective; we explicitly don't want to be a custodian.
A bit cumbersome but your criticism about trust is incorrect.
There is no singular idea of crypto currencies. You have ideas ranging from BTC to USDC.