particularly the section "The Global Spot Markets Underlying the Bitcoin ETPs are Marred by Fraud and Manipulation, Concentrated, and Without Adequate Oversight
This is so sad. Crypto (including Bitcoin) serves as a money funnel while takes from economically insecure middle class retail investors and pours it into the pockets of the tremendously wealthy.
Not exactly the same. Fiat currency like the USD redistribute a lot of wealth from users into the pockets of the central bank/government through unlimited base inflation, which they control. Bitcoin does not have that, its inflation rate is fixed by the protocol and only ever falling. In April this year it will fall to 0.875%.
Monetary inflation (i.e. in it's purest form increasing the monetary base by "printing" more) is not necessarily the same as what you probably mean by 'inflation rate'. You're probably talking about price inflation, using CPI. Those are linked but not the same.
Bitcoin "prints" around 1.74% currently and it's going to drop below 1% in April. The USD, although one of the more stable fiat currencies, is worlds apart from that. Looking at official Fed data you can see the base has been inflated by massive amounts just in the past 3 years alone! An increase of way over 60%!
Exactly. "Inflation rate" usually denotes price inflation not change in monetary base or similar measures. More money in circulation can mean price inflation, but it doesn't need to.
Sure. It's just that it generally does since the market as a whole understands scarcity value. The fact that having a much larger supply of something decreases the value of the individual unit is intuitively understood by most. The general public tends to price everything in relation to their home country's currency. They don't see the value of the currency falling, they view it as goods getting "more expensive". They do not usually think of fiat currency as a thing that's traded globally against other currencies and goods, but traders and businesses understand this.
Of course, the fact that the recent spike in monetary inflation coincided with a large hike in consumer prices over the past three years (which working class people have definitely noticed) as well as an asset price explosion, could have just been coincidence ;)
That assumes that in increase in monetary base is not matched by an increase in goods and services - you cannot just ignore that part. Also, scarcity as such has no value whatsoever.
FX rate evolution is linked to many things (and sort of a random walk anyway) - I'd say you typically need quite high inflation/rates to see devaluation in line with uncovered interest rate parity type views, short-term it could also work the other way around at times.
I think they suck just like crypto, these are all mechanisms rigging the economy in favor of the already wealthy. If we don't unrig it we will eventually get civil war. Popular immiseration eventually leads to upheaval.
Checkout the book - End Times: Elites, Counter-Elites, and the Path of Political Disintegration by Peter Turchin
I don't really want to start a debate on how HFT produces real-world value, but just consider that if these things you talk about are really useful and valuable, they might also provide competitive salaries to attract people?
What pays the most only loosely correlates with what produces the most value for society. It's easy to skim a percent here and there off hundreds of billions in volume shuffling around without the owners of those billions caring much, but it's much more difficult to see how that, on the whole, actually improves the condition of your neighborhood.
What if the work these folks do to increase market efficiency does produce real-world value, as slower verifiable economic information would increase periods of uncertainty and price slippages?
Or the HFT engineers producing research and products that speed up general compute, such as accelerating SHA and ED25519 signature verification, so that their trading shops get information faster?
I wonder if there are actually a lot of third-order, downstream effects that society gets by paying engineers to just make computers and telecommunications faster.
Slippage in the price of cabbages at my corner market? I don't think so.
There's very good evidence that as the finance sector grows to be a larger portion of the economy (which it very much is compared to 50 years ago) that increasing inequality goes along with it, as the profits made in the finance sector are mostly rent seeking from the rest of the economy. You could also interpret it as a private tax on all other economic activity.
Just look at UK... Largely based on finance sector and it does look pretty bleak for those outside... And I am not even sure if that is yet the end state...
There is some value there, but the cut they get is likely too large already. Then again it is all just fake numbers...
Crypto is one of many. Just like SPACs, crowdfunding and the entire VC landscape are always finding millions of ways to dump on retail after they made their 100x on unprofitable startups (90% of them have failed) founded by their friends racing to the IPO finishing line.
This is why they have to continuously raise money and breathlessly celebrate it on social media and even on this site as if "raising capital" into the Series H is a good thing.
Sorry to disappoint you but it isn't going to stop.
At least with SPACs, they're securities and you can see their finances before you invest. They're also regulated by the SECs and audited.
With the vast majority of crypto, people who start them don't intend for them to be useful. People who start them intend to scam retailers. That's it. They make up a shitcoin, throw flashy parties, spend on marketing, and then sell their shitcoin on retail. Retail knows it's all a scam too but it's a game of musical chair.
How does bitcoin "take" money from anybody? How would you classify an economically insecure investor? If they are economically insecure, where do they get the money to invest?
Food for thought, when there is currency inflation where do you suppose all the wealth goes and who is it taken from? Here I think we can use the word "take".
I agree with your point, but I do think he raised something you're not addressing. Because i'm paid, bank, etc. in USD inflation means someone else (whoever is given the first access to the new money) is in effect stealing some of my wealth. I don't really see how this is true with Bitcoin. Nobody is forced to engage with it
I think nobodyn is forced to engage with it precisely because it's not the popular currency. If it were, than the same would be true of bitcoin: its inflation would mean someone is stealing from you (your boss, for adjusting your wage too slowly).
You just described the current fiat system, where the top gets to benefit from the money printer while the middle class loses its purchasing power over time
In the hypothetical case that a Bitcoin ETF gets hacked and its wallet(s) emptied, what happens? Is it any different from, say, a gold ETF having its physical gold stolen?
this has been a major part of the application revisions, you’ll have to read each ETF before you purchase, or, you know, contact a financial advisor before every trade lol
When Cathie Wood was asked by Bloomberg, she called 21Shares staff who replied they have cold wallets. She didnt reply "oh ofc we're insured"... 21Shares staff didnt either...
Expect a shitstorm in case of hack (or lost keys) with these clowns.
If said ETF did their homework properly, their handling of a fork should be described in detail in their prospectus.
Not that I would ever buy a BTC ETF since it precisely negates what I believe Bitcoin to be useful for, but if I had to, I'd pick the one that would convert the forked coins back to BTC immediately after the fork.
If enough ETFs actually promise to apply this policy in their statutes, that would make it quite a hump to get over for a would-be forker, knowing the immediate price hit the forked coin would take because of the ETF immediately dumping it.
> Not that I would ever buy a BTC ETF since it precisely negates what I believe Bitcoin to be useful for, but if I had to, I'd pick the one that would convert the forked coins back to BTC immediately after the fork.
Would it actually be clear which fork is the winning one?
Wow, this actually is a critical point, and I'm surprised at what the outcome is. Essentially, it seems to me that these ETFs are saying they will abandon any rights to forked coins. That seems insane to me, though, so perhaps I'm misunderstanding? I mean, if there is a hard fork, some percentage of total value will go with one chain and some percentage to the other - that's basically exactly what happened with the Bitcoin Cash fork - so how can the ETFs just say they'll abandon coins in the forked chain.
> Shareholders will not receive the benefits of any forks or airdrops.
> The Bitcoin Network operates using open-source protocols, meaning that any user can download the software, modify it and then propose that the users and miners of Bitcoin adopt the modification. When a modification is introduced and a substantial majority of users and miners’ consent to the modification, the change is implemented and the network remains uninterrupted. However, if less than a substantial majority of users and miners’ consent to the proposed modification, and the modification is not compatible with the software prior to its modification, the consequence would be what is known as a “hard fork” of the Bitcoin Network, with one group running the pre-modified software and the other running the modified software. The effect of such a fork would be the existence of two versions of Bitcoin running in parallel, yet lacking interchangeability. In addition to forks, a digital asset may become subject to a similar occurrence known as an “airdrop.” In an airdrop, the promotors of a new digital asset announce to holders of another digital asset that such holders will be entitled to claim a certain amount of the new digital asset for free, based on the fact that they hold such other digital asset. We refer to the right to receive any benefits arising from a fork, airdrop of similar event as an “Incidental Right” and any such virtual currency acquired through an Incidental Right as “IR Virtual Currency.”
> With respect to any fork, airdrop or similar event, the Sponsor will cause the Trust to irrevocably abandon the Incidental Rights and any IR Virtual Currency associated with such event. As such, shareholders will not receive the benefits of any forks, and the Trust is not able to participate in any airdrop.
> In the event the Sponsor seeks to change the Trust’s policy with respect to Incidental Rights or IR Virtual Currency, an application would need to be filed with the SEC by NYSE Arca seeking approval to amend its listing rules to permit the Trust to distribute the Incidental Rights or IR Virtual Currency in-kind to an agent of the shareholders for resale by such agent. However, there can be no assurance as to whether or when the Sponsor would make such a decision, or when NYSE Arca will seek or obtain this approval, if at all.
> Even if such regulatory approval is sought and obtained, shareholders may not receive the benefits of any forks, the Trust may not choose, or be able, to participate in an airdrop, and the timing of receiving any benefits from a fork, airdrop or similar event is uncertain. Any inability to recognize the economic benefit of a hard fork or airdrop could adversely affect the value of the Shares.
Here's a theory: If they promise to capture value of forks then anyone can fork Bitcoin (it's pretty easy to do) and force the custody providers to do a bunch of work to support that fork. By preemptively disclaiming all forks, they also reduce the motivation to fork. (Stablecoins have the same effect on Ethereum.)
It's hard to make that promise too, what happens when the fork requires that you expose 200 bits of your private key to make a transaction?
What happens when the fork snapshotted the chain at some arbitrary point in the past such that it's not possible to match it up with ownership of the ETF?
There have been 'forks' of altcoins made where the 'official' software was expressly backdoored. They even lead to some fringe exchanges being robbed.
There was a brief flurry of forks when exchanges felt compelled to list them-- they were a way for altcoin creators to avoid the huge listing bribes demanded by exchanges (which also has made it so that only premined altcoins are viable to create anymore)... but after exchanges decided to stop listing them (and esp Archer v Coinbase established that exchanges could just keep the fork coins, if that was their policy) most of the fork creation stopped.
(somewhat to my saddness: diligently dumping fork coins made me a lot of money...)
I remember Gemini crediting me with my BCH eventually. (Unfortunately, long after the peak to $4k.) LocalBitcoins gave some classic BTC credit to make up for it.
I believe that fears of a similar situation are what led a lot of people to temporarily pull ETH off of exchanges and out of smartcontracts over the time of the ETH switch from PoW to PoS, as that spawned another fork.
Not that I would ever buy a BTC ETF since it precisely negates what I believe Bitcoin to be useful for
Yeah I know what you mean, although one competitive advantage of the fund is it can be invested in a tax-free savings accounts not subject to capital gains tax (I haven't seen a practical way to do the same with the raw commodity).
Sure, being able to rebalance without incurring a tax bill is nice, as is not having to worry about procuring the right type of tax forms since your brokerage does most of the work for you.
But is there actually a difference for pure buy-and-hold investors in most jurisdictions?
I know of at least one jurisdiction where an ETF is actually disadvantaged against physically holding cryptocurrency.
You can hold raw Bitcoin in a self-directed IRA. You just hold it and do the paperwork. You can hold just about anything in a self-directed IRA, including beanie babies.
You think the political willpower across all superpowers would be substantial enough to allow for "error correction" forking (nicest way to put this), to the benefit of individual superpowers who made an error like that?
Many TradFi custodians ignore/do not support (publicly) forks of client assets held, sometimes just until they reach some arbitrary level of social traction.
Lol this comment is funny because you clearly don't understand how Bitcoin works but are convinced it will be a problem. Owning the most bitcoin (or even a majority of the bitcoin) doesn't mean you control the network......
The bitcoin network is ultimately controlled by the economic weight of its largest holders. If the big funds control enough bitcoin, they will have the power to pick which fork holds value. Miners and node operators can operate on whichever fork they want, but that doesnt mean Coinbase or Fidelity or whoever is going to recognize that fork.
> Miners and node operators can operate on whichever fork they want, but that doesnt mean Coinbase or Fidelity or whoever is going to recognize that fork.
Mate that isn't how it work. If Coinbase or Fidelity don't recognise the real blockchain then they no longer have real bitcoin, they have a forked coin (because they are not on the true bitcoin chain). The Bitcoin chain is determined by consensus of the majority of miners/nodes (not bitcoin holders!) and if they break from that they now have a substantially devalued asset (look up the price of BCH and BTG these days).
You seem to be under a misapprehension that owning the most bitcoin gives an institution or individual power over the network. It does not.
Bitcoin, by definition, cannot exist on two separate chains. If an institution attempted what you are saying all they will have done is reverse alchemy: turned gold (bitcoin) into lead (an unrecognised chain with no mining occurring, no recognition by nodes etc).
not even that. the miners follow the nodes. if fidelity holds all transactions andbonly show them to their private miners, they will always mine with more transactions then the others, hence the 51 attack is based on transactions not miners nor nodes.
again, the cheerleaders who might know math (usually not even that) forget about the ruthless of business
Lol that isn't what a 51% attack is...The confidence people on this thread are speaking about something they have no clue about is staggering. A 51% is ALL about miners and nodes.
Noone has forgot a thing just aren't clowns like you who think businesses are some substitute god who can't be beat. Fidelity doesn't "hold" the transactions. Transactions to be relevant MUST be broadcast to the network and if this doesn't happen then the blockchain plods along as if they didn't happen.
Honestly, learn a bit more about how this stuff actually works before commenting.
> fidelity et all have all the dollars. if there's a fork, they will probably own 51pct alone. you will be asking about THEIR fork.
I have read this comment five times, and I simply cannot make heads or tails of it.
What is "THEIR fork"? If there's a fork, everyone has keys which underpin addresses on both forks. How do you know which fork belongs to "fidelity et all"?
And more importantly, why is that relevant? Isn't the longest chain the only determiner of canon? Or has that changed recently?
Yes everyone with keys will have access to addresses on both forks. Which is why people have access to both “Bitcoin” and forked “Bitcoin Cash” addresses with one set of keys
I will note that the ETFs are using Coinbase, Gemini, and Fidelity for custody. These companies have been providing Bitcoin custody for years without being hacked AFAIK.
not sure why this is being down voted. as someone who worked "internal recovery" at banks in the 90s, you'd be surprised how much stolen money is not reported anywhere
if the law was iffy for freaking banks then, imagine how it is for btc
I wonder if there's a relevant difference between a fractional-reserve bank and a full-reserve custodian. I guess it doesn't matter as long as insurance pays out...
Makes me wonder if coinbase has the whole Dudes With Big Guns layer of protection that you see at e.g. the fed in NY (where all the gold is) or the bank of England (where all the other gold is)
all it took was a judge declaring the SEC’s prior view toward bitcoin ETFs to be arbitrary and capricious
and the SEC thinking about appealing but realizing this absolutely based SCOTUS would delete the SEC like Thanos if they ever get taken beyond circuit appeals court by the private sector
regarding how the SEC circumvents the 7th amendment in how they fine people
regarding whether Congress even delegated that discretion to the SEC whether the 7th amendment circumvention stands or not
and regarding whether their in-house, on-staff, judges can be exempt from removal
there are plenty more deeper questions to bring before the supreme court, about this specific agency. this SCOTUS has expressed interest in taking out the remaining vestiges of the New Deal, which were mostly found unconstitutional in the late 1930s, with the remaining things simply being difficult to find standing for - hard to take to court. The SEC's main behaviors being one of those things. this SCOTUS has expressed interest in how the interstate commerce clause is interpreted at all, which is also a core tenant of the New Deal. Could possibly reshape our entire relationship with the Federal Government. The SEC would take the biggest L while the capital markets would be fine.
The death of crypto was written endlessly on HN. The investor activity is much more bullish over last 6 months. I think the only hot VC right now in all of tech is AI and blockchain.
Now a lot of people here will be investing in Bitcoin without even knowing it, as their passive fund investments begin accumulating. The sweet victory against the no coiners.
People in HN are in a massive bubble; you see it with other topics too. It's nice to look here for some tech sentiment and interesting article sometimes, but for most cutting edge stuff this forum is always full of naysayers.
A lot of people in software industry have tendency to reflexive negativity*, as people selected to become software developer often have a tendency to seeing things in their own limited scope, and not the in the scope of others.
Well, HN is so deep in their own reality distortion bubble that they are still not noticing that "AGI" is actually about lining some-else's pockets over a sci-fi dream sold to them through hype after trampling over laws and regulations.
Those on HN who believed that such a complete ban on crypto was feasible were always delusional. The cat is out of the bag for both AI and crypto, but in the end, the legal system always gets them to pay up and the regulators for both AI or crypto will get them as well.
People who aren’t in the tech/VC or crypto echo chambers can see that it’s (still) overhyped and mostly scams. They don’t really care or have more positive sentiment than HN.
Ok and from my anecdotal experience the opposite is true, so I guess we're at a crossroads here. Either way doesn't have bearing on how HN views crypto
There's a difference between being bearish and being fully anti crypto and just spreading conjecture. Being bearish is very normal, being rabidly anti crypto on every crypto thread on HN like a couple folks who are in this very thread is being in a bubble.
Some people are just like that. The same thing happens on the other side of the fence alarmingly often, where someone will claim Bitcoin is the second coming of Christ and sell their home before knowing basic technical details about the network. Or people who fully understand the system, and deliberately lie about a coin's functionality for petty gain. On either side there are people promoting altruistic regulation and acceleration, but at a larger scale we're mostly describing greedy businesses (on either side) and... put politely, "government dissidents".
So, as is the case with any meaningful investment, you have to ask "cui bono?" with cryptocurrency. Very plainly, you're risking normal money on a venture that doesn't promote anything other than greed and black market transactions. The hackers on this site will oppose it in favor of information freedom and a less money-influenced internet, and the greedy bastards will oppose it because they'd prefer one party owns everything from the start. It's a nuanced situation with lots of different people, good-faith or not, who will oppose or support cryptocurrency for the wrong or right reasons. It's straightforward and non-predatory to say that most people are better off keeping their pay-stub out of the alternative currency market.
> Very plainly, you're risking normal money on a venture that doesn't promote anything other than greed and black market transactions.
You could quite say the same about any privacy or encryption or really anything that protects you from a centralized entity taking your rights/property. It’s a bit absurd that people are really that blind that they think this is all there is to crypto. Your same logic would apply to dollars in that case as well.
I could say the same about privacy or encryption. It's probably why the average person doesn't care about either of those things when pressed.
Ideologically I'm not opposed to Bitcoin or the idea of it existing for the base it serves. It's too volatile to suggest for serious investment though, and it's reached an uncomfortable echelon of "nerd joke gone too far" for my taste. Real people do not need to waste life-hours learning about this when their local government invests in a clear and immediately fungible form of currency for them already. Investors should not be wasting life-hours learning about a perpetually-irrational investment when other industries are both safer investments and arguably more innovative.
> Your same logic would apply to dollars in that case as well.
It would, mostly. Most people who oppose the online adoption of crypto probably object to the same level of microtransaction in any currency.
I don't believe for a second that Bitcoin or any other DLT will be the world's reserve currency.
But the amount of hubris and preoccupation about this here on HN is really something else. I've long learned not to try to engage in any kind of serious discussion about possible interesting aspects.
I've been around cryptocurrency since around 2014, and I don't think the problem is hubris and preoccupation. People genuinely don't want cryptocurrency in their internet. The opportunity to spend more money online is not attractive to anyone. Conceptually Bitcoin and a lot of other networks can be nerd porn, but socially they are an unmitigated disaster. Self-custody wallets are like banks where individuals control their own money; a great idea until the scammers come by. By using managed-custody, you're not even owning P2P currency anymore and still exposing yourself to risk from a centralized institution. The broken "ownership" model caused thousands of people to lose their NFTs and tokens when exchanges went under or social engineers found their phone number.
Additionally, there are a lot of companies on HN that will try to sell you a terminal in an Electron webview for $9.99/month. Users on HN have to be diligent, so a lot of people will lash out against benign technology. Some of them probably also correctly identified scams and ran their owner out of town on a rail. That might be hubris, but I more think that both the investors and the inventors on HN are tired of reading "Yet Another Money Solution" after 10+ years of watching the old one collapse.
HN had a hate boner for crypto back in 2015 when I read about Ethereum here. Nothing has changed, it's a simple lack of curiosity and old men yelling at changes in the world.
It's not just crypto though, the same saturated dullness is shining through in other discussions as well.
Crypto failed to deliver in any area and it is still a solution in search of a problem. The only real use-case is is money transfer to/from sanctioned countries and other dark markets - not that much of a "bleeding-edge" technology we are enthusiastic about )))
There's a fair amount of ill-placed arrogance. It seems that the majority on this board confidently and incorrectly believe that they know all there really is to know about bitcoin. Essentially that it's a scam that wastes energy.
If you try to help them understand, you're generally attacked as if you are shill, and then they continue along in their ignorant bubble. It's a shame, but their attitude isn't conducive to me losing any sleep.
It's not arrogance and not just that it is scammy or wasteful to the environment. Bitcoin is another mechanism the increases inequality.
I think Bitcoin is one of the many way that the economy is rigged against economically insecure retail investors. The more money that gets funneled from the middle class into Michael Saylor and crew's pocket the closer it brings us to civil war.
Checkout
End Times: Elites, Counter-Elites, and the Path of Political Disintegration by Peter Turchin
Ironically this is exactly what bitcoin fixes. Fiat currency is the main cause of these issues (look up the Cantillon effect as an example). It's a cancer on the world, slowly destroying it.
I highly recommend reading "The Creature from Jekyll Island" which explains everything that's wrong with central banking/fiat currencies and will help you understand the devastating effect it is having on the world.
Sure, there is a transfer of wealth while bitcoin is monetizing. But you buy bitcoin at the price you deserve. Michael Saylor deserves everything he's going to get. He's a visionary with balls of steel - he's laid it all on the line. If you try to avoid making bitcoin whales richer by not buying bitcoin, you'll simply be cutting off your nose to spite your face.
Bitcoin itself is a scam that wastes energy. Without custodial ownership, scam transactions are resolved no different than legitimate ones. Without diligent regulation, Bitcoin's power usage can easily balloon beyond what any single institution would consider appropriate. Both of those things are demonstrably true, and providing Bitcoin ETFs via regulated exchanges changes neither one.
Lol power usage is such a strawman argument. 1% of all electricity in USA is used watching Netflix but you don't hear people complaining. But running a global permissionless decentralised store of value currency network should supposedly be "super cheap" or it's an environmental disaster and must be stopped.
The reason that bitcoin's energy usage is a philosophical nightmare is because it's a system where energy consumption is the product. As opposed to industries which are "merely" energy-intensive, let's take aluminum refining for example, spending more energy to refine aluminum does not create more demand for aluminum, but spending more energy on bitcoin increases the price of bitcoin, which induces more demand, which increases the price, which incentivizes mining, which costs more energy, and so on in a vicious cycle. Proof of work is a problem; it's conspicuous consumption on a hyper-industrial scale, and it's coming at the absolute worst time in human history for us to be wasting energy, let alone to be inventing the optimal machine for wasting energy at an increasing rate.
Proof of Work is an energy-intensive solution to a very deep and old social problem: how do you verify transactions between parties over a great distance/online without a trusted intermediary?
Proof of work is enormously socially valuable and will change the world. Bitcoin may not be the PoW application to do it (although it also might be) but proof of work is here to stay because of the huge advantages it has over the existing system where individuals/institutions insert themselves between transactions to their own profit.
RE energy, not here to argue philosophy. Just going to point out that if that is your concern luckily the world is going over to renewables so that particular objection will be gone soon anyway.
> Just going to point out that if that is your concern luckily the world is going over to renewables so that particular objection will be gone soon anyway.
This is dangerously missing the peril of the current situation.
The problem with our current energy makeup is not "there's not enough renewables".
The problem with our current energy makeup is "there are too many carbon emissions".
As a first-order effect, it does not matter how many renewables we bring online. What matters is taking fossil fuels offline. It does not matter if renewables make up an ever-increasing percentage of an increasing energy market, because the problem is not the relative market share of fossil fuels, it is the absolute amount of emissions, which is already more than our planet can handle. And the increasing demand for energy makes taking fossil fuel plants offline less viable than it otherwise would be, and bitcoin is a nontrivial component of that and it threatens to grow at an exponential pace, which makes it an existential threat to mankind.
Please trust me when I say that I do not give a damn about the price of bitcoin. What I care about is stopping runaway energy consumption, and from that perspective proof-of-work is the biggest existential threat to humanity since the atom bomb.
> Please trust me when I say that I do not give a damn about the price of bitcoin. What I care about is stopping runaway energy consumption, and from that perspective proof-of-work is the biggest existential threat to humanity since the atom bomb.
Bitcoin energy usage accounted for 0.11% of global energy usage and you think it is the biggest threat to humanity since the A-Bomb? Bitcoin is entirely irrelevant to the grand scheme of things re climate emissions.
So you are wrong on this point:
> bitcoin is a nontrivial component of that and it threatens to grow at an exponential pace
Bitcoin IS a trivial component of overall emissions and even with an insane ramp up would not be close to being the biggest issue re emissions.
> Bitcoin energy usage accounted for 0.11% of global energy usage and you think it is the biggest threat to humanity since the A-Bomb? Bitcoin is entirely irrelevant to the grand scheme of things re climate emissions.
GP already explained why he thinks that and you did not spend a word addressing that. Here is what GP said:
> The reason that bitcoin's energy usage is a philosophical nightmare is because it's a system where energy consumption is the product. As opposed to industries which are "merely" energy-intensive, let's take aluminum refining for example, spending more energy to refine aluminum does not create more demand for aluminum, but spending more energy on bitcoin increases the price of bitcoin, which induces more demand, which increases the price, which incentivizes mining, which costs more energy, and so on in a vicious cycle.
Basically, for BTC to "go to the moon" its energy consumption must also "go to the moon".
I didn't address that point because it is conceptually and factually incorrect. But I will breakdown why for your benefit:
> The reason that bitcoin's energy usage is a philosophical nightmare is because it's a system where energy consumption is the product.
False. The "Product" is a permissionless global peer to peer financial network using a (relatively) non-depreciating commodity. Energy consumption is a side-effect of providing this product/service. I'm sure if you thought about it for a bit you would have to agree here. Noone is mining bitcoin for the sake of it, they are mining it for profit and the only reason bitcoin has value is other attributes of the network/commodity itself. So not a good start from OP.
> As opposed to industries which are "merely" energy-intensive, let's take aluminum refining for example, spending more energy to refine aluminum does not create more demand for aluminum, but spending more energy on bitcoin increases the price of bitcoin, which induces more demand, which increases the price, which incentivizes mining, which costs more energy, and so on in a vicious cycle.
This is factually incorrect and easy to see why. Here is a link to an overlapping chart showing the hashrate for bitcoin against the market cap (https://bitinfocharts.com/comparison/hashrate-marketcap-btc....). You'll notice the lack of connection between the market cap (overall price) and the hashing rate. This is an empirical fact based on the data we have so op is wrong once again.
It is true that price increases do incentivise more mining but the price increases aren't DRIVEN by increases in the mining. Otherwise it would be possible for anyone anywhere to spin up bitcoin farms and make guaranteed profit because the price would rise to a level commensurate with the energy expended. It is the other values of the network (peer-to-peer permissionless decentralised finance with an eventually depreciating commodity) that drive the price. Those are being priced by the market currently and more and more people are deciding to store wealth in the Bitcoin network as opposed to the Fiat network or other assets like property/gold/etc because they feel it gives a better combination of:
1. Store of value (or possibility for profit)
2. Functionality
Bitcoin mining is very often not profitable if you don't have cheap energy or do it collectively which is why it is moves around so much to find cheap energy sources (often using the cheapest forms of energy available which is burn off/extra gen that has no otherwise in grid) and miners pool to take a portion of the gains from mining the next block and getting the bitcoin that come with it.
OP's view of Bitcoin and proof of work is a very slanted one at best, completely factually inaccurate at worst.
Harnessing energy is the basis for civilization. The amount of energy used is highly correlated to the level of civilization.
Using energy is not an issue, it's how we produce it that matters. This applies to all forms of energy use of which bitcoin is just a tiny fraction.
Bitcoin will not compete with current energy demand which is geographically constrained. Bitcoin miners can operate at any location in the world and are incentivised to use free, unwanted, waste energy. Any miners that try to increase the demand of current energy supplies will be uneconomical and go out of business.
Also miners using more energy does not directly increase the price of bitcoin. Ultimately the amount of (otherwise wasted) energy used by the network will be limited by the transaction fees which are a free market.
All sound money has been proof of work since the start of time. It is fundamental to a lasting and fair monetary system. We currently have a fiat system where the population have to work for it, while the elite can effortlessly print it, becoming ever more unjustly powerful as a result. They are looting the world.
Even today, gold miners are working to dig up their proof of work which they can sell into the market. If the work they did was worth more than the gold they found, they'd stop. And if was worth less, more miners would mine, increasing the supply and devaluing the gold.
The only difference with bitcoin is that the work is abstracted. It's simply anchoring the creation of a digital token to work in the physical domain. At the same time, the work performed is protecting the network from attack - it's what makes the blockchain immutable. The work is not wasted - it is being stored as "walls" on top of each block. The further down the block chain you go the more walls of protection you would have to break. It's breathtakingly beautiful.
The main problem here is that you're looking at the energy use as a waste. It's absolutely not, but in order to understand why, you need to understand what's wrong with the current monetary system and the terrible effects it is having on the world.
You're also missing that bitcoin's game theory means that it will ultimately only use unwanted/wasted energy. Bitcoin miners can mine anywhere in the world and those trying to use energy that's in demand by the general population won't be economical.
> but in order to understand why, you need to understand what's wrong with the current monetary system and the terrible effects it is having on the world.
Are we about to find out why, or do I have to pay for your memoir to understand? I've been dying to hear you expand on this for a while now.
It's an abstraction of work. All sound money requires equivalent value work to produce. And the work done is stored as protective "walls" in the blockchain, one on top of each block, piled higher and higher as time goes on, to become impenetrable. It's quite beautiful.
This is out-of-touch on so many levels. What about people born in ten years? What about people born in ten years in developing countries? The only thing crypto“currencies” have done is increase the wealth disparity and greed.
The people born in 10 years will have access to a hard money that is time proven, more stable and less risky than it was 10 years ago. They will also see the price of their bitcoin go up relative to fiat. The same goes for people born in 300 years time.
Regarding developing countries, bitcoin provides anyone with a phone access to a bank, and one that offers better savings accounts than any fiat account.
Go and study it for 100hrs and if you combine that with a bit of intelligence, you'll be in the same position as the "lucky" bitcoiners who get wealthy buying it earlier.
Alternatively wait until every man and his dog already have it and the price has stabilised and it's a no brainer (say 10 or 20 years)
Its so annoying that Non-WBA holder around here keep arguing with me. I try and explain to them why Walgreens Boots Alliance stock is the future of investing but they are kept in their non WBA bubble.
Good luck buying WBA stock at a higher price in the future!
First of all there never was anything "cutting edge". It was a nice prototype of p2p application for large and slow decentralized payments - a very niche thing for very niche audience with a questionable mechanism in the form of Proof-of-work. But at least the argument of "unregulated currency" made sense to regular folk. The get-rich-quick hype that followed killed any reason or logic in this area. The following NFTs was a joke even to those who believed in the "next currency" idea. The following ideas of pyramids that mint you money while you stake your coins (I think) got even the most gullible ones reject it )))
Yeah, crypto people want to recreate the current system but with themselves in charge. It's not about decentralization. They want to carbon copy the current economy but putting a small number of holders to lord over the "nocominers"
So "winning" for Bitcoin has now come to mean becoming a boring traditional security that doesn't do much of anything else? That's awfully different from what 99.9% of Bitcoin optimists have spent years claiming the future would be.
Authorizing Bitcoin ETFs does absolutely nothing to revolutionize payments or finance, and is the only positive crypto story I have seen in many months.
You can’t win with HN no coiners. The ETF doesn’t prevent all the decentralized benefits. It just adds regulatory legitimacy from the world’s most important financial regulator. It also helps regular people put their retirement money in, which is great
I think this is the huge part - letting retirement accounts dabble in crypto.
For those young enough (or foolish enough) to operate a high-risk/high-growth retirement portfolio, holding crypto can be a large boon. Just the past 365 days of BTC has 162% increase in value.
Buying and holding crypto isn't that complex for tax purposes (although it could still be easier). The craziness comes in when people get into DeFi but ETFs don't let you do that anyway.
For the very same reason that (for example) pension or union fund managers can't just allocated x% of their portfolio to blackjack or rolling the dice.
Crypto is still INCREDIBLY high volatility and high risk. Crypto is also a pretty shitty instrument with regard to hedging, as they all follow the same movement.
Mitigating risk in crypto is very much a hands-on job.
UX with hardware wallets (which you can get for like $60) is pretty decent these days and it eliminates a lot of stress in the workflows you typically use. There's still a huge room for improvement with seedphrase backup and "social recovery", but it's easier now than it's been in the past.
How does the average person back these up in a secure, yet durable way that lasts decades and can easily be discovered by (and only by) their ultimate heirs?
I think everyone will have different behavior sec for their funds, with the options now ranging from simply committing a 12 or 24 word seed phrase to memory and buying ETF shares.
There is shamir secret splitting, multisig, MPC, secure enclaves with biometerics, etc...
I think how one handles their wallets will be much like how people make their espressos. Some will just stick k-cup in a machine and hit a button, others will become full-blown coffee enthusiasts that carefully measure their beans, de-static their grinds, and extract for the exact right amount of time.
> simply committing a 12 or 24 word seed phrase to memory
That's absolutely out of the question for almost any human being, especially given the timeframes involved.
> There will be phones like Saga [...] There will be apps like Fuse wallet: [...]
Again, we're talking about a timeframe of decades. How many of these will even still boot up after that amount of time? None of these seem safe to just throw in a bank safe deposit box.
> make their espressos. Some will just stick k-cup in a machine and hit a button
I'm really not a coffee connoisseur by any meaning of the word, but even I know that what comes out of a k-cup machine is brewed coffee, not espresso.
> I'm really not a coffee connoisseur by any meaning of the word, but even I know that what comes out of a k-cup machine is brewed coffee, not espresso.
Many banks don't offer them anymore, and in some countries they have a disturbing tendency of getting robbed, with absolutely no recourse for the depositors (since contents are usually unverified and uninsured).
Given that people probably don't arrange their life around the ability to safeguard physical assets, I think you've just given several good arguments against self-custody:
Many people don't own a home. Not all of those that do want to expose themselves to the liability of storing valuables there. The safety situation between homes even within the US varies greatly, and even more so internationally. Banks with safety deposit boxes aren't ubiquitous.
If it works for you, great! I'm just saying that you might be in the minority here.
That's what the "social recovery" ideas are for. It's a framework for doing key management across multiple trusted parties under controlled conditions in the hypothetical case your primary keys are inaccessible. You could have your executor hold a key, for example.
I will own up to trolling slightly to draw attention to the fact that exhanging bitcoin as a digital currency is not something which would occur to most people who own it. The only thing most people will do with their bitcoin is exchange it for fiat.
But what’s the point of Bitcoin then? They might as well put anything in these ETFs and it’d be the same thing then: the flat rocks in my garden are limited in number and very scarce, wanna put some in an etf?
Maybe, but my rocks are better, faster, and more scalable!
Frankly we could probably get our rock ETF's approved more quickly. Regardless of how you feel about Bitcoin, it's not (or shouldn't be) the SEC's place to play nanny and dictate the particular assets/commodities/etc. in which you're allowed to invest your money. Incidentally even one of SEC commissioners agrees https://www.sec.gov/news/statement/peirce-statement-spot-bit...
Well as a matter of fact btc is none of these things compared to any other crypto, which are themselves not particularly any of these things.
But I agree with the fact it’s not the SEC’s role to tell us the merit of btc.
I do have some worries on the Tether scam still going on for example though, which has been manipulating BTC for years.
One bitcoin is very much distinguishable from another bitcoin as they can be traced through transactions and wallets, with the outcome that some bitcoins might be rejected by recipients that are uncomfortable with certain source wallets or mixers.
Yes but you could refuse to deliver whatever the sender is paying for. I mean you need to wait for 6 confirmations or whatever anyway before "approving" the payment transaction.
Bitcoin's value lies in its potential as a secure means of payment for microtransactions and its integration with advanced technologies like the Lightning Network. Its worth is tied to its perceived future utility in various domains, particularly in facilitating transactions over APIs. The recent ETF news contributes to its liquidity and stability, essential for its role in digital transactions. As the technology and applications around Bitcoin continue to evolve, its true value might become more apparent, potentially transforming the landscape of digital commerce and AI interactions.
It's not really that hard, and the tools are continually evolving to be more user friendly (e.g. Last year Trezor added hardware support to simplify Shamir backup).
Of course the ability to hit "buy now" in the same marketplace you manage all your other investments is pretty low friction and I'm sure this decision will bring fresh investment out of the woodwork.
The mob always wins in the end, but I never understood why many on HN have been so cynical about Bitcoin. At least Satoshi tried, whoever they were. They gave a gift to the world, but it sadly got co-opted and taken over first by small-time grifters and now by the big boys at Wall Street. In hindsight it was probably bound to happen, because money buys influence and a casual decentralized group of coders can never win against banks and governments.
Anyway, digital gold is still better than nothing. It's still an innovation as a store of value, even if the payments idea is basically history (some Bitcoin maxis just don't understand that yet). Also Bitcoin has inspired a whole ecosystem of other blockchains. If you want the original concept of a peer-to-peer electronic cash system, Monero is probably one of the best to check out currently. Governments are btw currently going after Monero, because unlike the common myth about Bitcoin, it actually enables anonymous payments - just like cash. And so of course we can't have that. Multiple exchanges already announced they were forced to delist XMR.
The aesthetic and industrial applications of gold are what makes it intrinsically valuable - that being the key distinction, and distinct from Bitcoin. If you ignore the useful aspects, of course it's no different from any useless thing.
The time period is part of it, but I think the physicality matters too. You can debate gold's inherent value as you can with bitcoin, but you can't argue that it's not even a thing that exists. You also can't create more of it - which some would argue you can't with bitcoin either, but all it would take is consensus. Plus one could argue that other coins are equivalent goods.
>... but I never understood what many on HN have been so cynical about Bitcoin.
Eh, I think you actually might! Hell, you said it yourself - the mob always wins in the end. It doesn't matter what Satoshi made, the mob took it and made it into something else. It's what Bitcoin turned into that HN is collectively cynical about.
What Bitcoin has been turned into is still revolutionary, but not in the way it was supposedly intended. The original intention as per Satoshi's whitepaper and posts was to empower people and give them an alternative to banks. It was supposed to be a cash system run by the people for the people. The democratization of money.
Ignoring that this idea was mocked by many from the start for reasons we can only speculate about, it seems there's a lot of confusion about what Bitcoin currently is as well. Mocking the idea that poor people in Congo will be saved by Bitcoin - sure. Making fun of laser-eyed Bitcoin maxis telling you we'll all totally use Bitcoin for payments (have you heard of the Lightening Network bruh?) - of course, I joke about them too.
But what you have is the first time in the history of the planet that there is a public ledger that can be used by anyone, transparently and permissionlessly, to store and transfer value. It's not in the hand of any bank or government. Nobody can freeze your account because you're fully in control. You can run your own node to push transactions if you wish to. It can absolutely not be falsified, unlike cash or book money. This is still extremely valuable. Especially when you add programmability, which Bitcoin only has in a rudimentary form, but other "smart contract" platforms already do much better. Because now you can automate transactions and those transactions don't necessarily have to be about money.
BTC ETF in in a 401K/IRA can be contributed, grow, or possibly be withdrawn tax-free depending on how you set it up. Coinbase reports your gains and you owe taxes on them. (Don't think Coinbase has an IRA/401K option for custody. Yet.)
I was referring to the capital gains tax you pay for selling BTC on an exchange. I was thinking specifically about Roth IRAs, where any gains are tax free, but a 401k or similar would work too.
How would that be better than holding gold? Fees for large transactions of btc are getting higher than the cost of physically moving gold anyway, and the chances to lose it or get it stolen are higher.
I do it every week. It's free (Zelle), or it's incredibly cheap. It has predictable cost and timeframe, too, unlike Bitcoin, with no customer service and no way to remediate errors and fraud! So, even if I pay to the banks, it covers people and insurance - unlike with Bitcoin, which just burns fossil fuels so that Chinese miners can get richer and richer stealing subsidized electricity!
That's like Robinhood users telling me they pay zero trading fees. Then how does RobbingHood make money?
Think about it, running an exchange has costs. I really don't understand how people can be so easily tricked by "free" offers that are actually more expensive when you do the math. PFOF (i.e. legal theft), unfavorable spread, etc... They get their money one way or another. It can technically make sense when you're trading something like $50 worth of a stock, because of course that would not be reasonable with a brokerage using a traditional fee structure. But frankly trading such low figures is silly. You have to invest a lot of time (=money) in research when stock picking, else you're guaranteed to lose sooner or later. But the reward simply isn't there. Even if you make 100% profit you now have $100. Better put that money into an index fund savings plan and forget about active trading. You're guaranteed to receive a better reward on your investment just getting a part time job selling fast food or something like that.
I pay for Coinbase One - more than I've ever paid to any bank for a year. And what's my benefit? Almost none, because I still have to pay the immense fees!
In crypto, the margins are much wider than in any traditional financial services, which rely on volume and wide adoption!
Coinbase is a centralized exchange, the trading does not happen onchain so the trading itself has nothing to do with crypto, it's fundamentally just like a stock exchange. Onchain trading would be using a decentralized exchange, and that's much cheaper now on Ethereum L2 for example (although still in the experimental phase, slowly getting there). Coinbase is btw one of the more expensive CEX, but I guess you're there paying the higher fees and not with the competition, because they're reputable and unlikely to steal or lose your funds, correct?
The great thing about cryptocurrency is you can trade it any way you like. You can take your tokens in self custody. You can in theory trade with a random guy on the street, without any third party involvement and with zero fees. I know a guy who does this because he's worried about a coming police state, so he buys everything with cash during meetups.
I think the high fees CEX are currently charging, which you're right about, has multiple reasons. One is it's a completely new and largely unregulated space. There are a lot of risks, they need to set aside a lot for litigation. FTX had very low fees for example while stealing customer funds to lobby Washington ;) Coinbase is legit but has to spend a lot on legal fees and compliance, because they're in it for the long run. Also a huge part of the reason is surely simply because they can. Crypto traders are making so much money that they're more likely to accept paying high fees than the average stock trader. That won't last forever, it's just because the market is new and volatility is crazy.
> That's like Robinhood users telling me they pay zero trading fees. Then how does RobbingHood make money?
I was reading a book about that recently, it boils down to: "You're not [just] the customer, you're [also] the product."
Key term: Payment For Order Flow (PFOF) [0], with the book-paragraphs I was thinking of down below:
____________
> Retail investors have one hugely attractive property when considered by a professional – they’re dumb money. Not only are they unlikely to have private information, a lot of the time they haven’t taken care to consider all the public information. When the party on the other side of the trade is a small investor (or a lot of orders from small investors all over the country, ‘bundled’ by a retail stockbroker), you can be reasonably sure that you’re not taking too big a risk that the person selling stock to you knows something about it that you don’t.
> This makes retail orders very valuable to the market. One of the reasons why stock brokerage commissions are so cheap these days is that retail brokers have actually realised how valuable they are. They charge a quite substantial fee to players like the high-frequency traders for the privilege of dealing against their order flow, and they rebate some of this fee to their customers. But the retail orders would eventually dry up if the customers lost too much or felt that they weren’t being given a fair chance. And without a steady flow of ‘dumb money’ lubricating the wheels, the professionals would find it a lot harder to trade, as they’d always suspect each other’s motives for buying or selling.
Simply divide your BTC into paper wallets in a variety of sizes from $5 to $100, and when you need to make a transaction, mail the right combination of wallets to the person you want to pay.
Mailing costs money, too; it's slow, and there's no proof that I've made the transfer. Plus, if that person wants to consolidate their funds, they will have to pay the crazy costs still, i.e. they will put it into their pricing model! How about comparing apples to apples?!
The bitcoin network is best suited for storing and moving large amounts of monetary energy. Compared to any other monetary system, it does this the most efficiently (i.e. with the least amount of energy loss), both during storage and during transfer.
Note that the transfer of monetary value/energy is final settlement (i.e. it's not just an IOU that will be settled at later date, like most bank payments).
Ultimately the base layer network will be used for settlement between banks, national reserve asset/currency etc. and faster, cheaper payment rails will be built on top of it (e.g. the Lightning Network)
The Lightning Network isn’t working as intended and the devs have basically admitted it’s never going to though. I don’t think blockchain as it is built for the btc network is as scalable as you think it can be.
Coinbase is a joke as an exchange. Other behemoths exchanges support it, such as Kraken or Binance. But I recommend you p2p exchanges, which don't require KYC, e.g. RoboSats or LNP2Pbot.
I offered the Lightning Network as a single example. I don't agree with you, but it's largely irrelevant at this stage.
The fact is that Bitcoin is very likely to absorb a vast percentage of the worlds value simply as it is. Once this has happened its value will stabilise and it will become useful as a unit of account/day-to-day currency. By this point, there will be far more motivation to focus on developing solutions (such as Lightning) to allow smaller and faster transactions.
> The fact is that Bitcoin is very likely to absorb a vast percentage of the worlds value simply as it is.
You present this as a fact, but the actual valuation of Bitcoin doesn't seem to support this claim. John McAfee bet (and proverbially lost) his testicles on broad estimations of Bitcoin's continued growth. Without extraordinary evidence, you can't make claims of extraordinary provenience.
> there will be far more motivation to focus on developing solutions (such as Lightning) to allow smaller and faster transactions.
If you need an L2 transaction layer to solve an issue inherent to an L1 chain, you're kinda just admitting that the base layer is flawed. Why use Bitcoin at all if we need mediators to settle regular transactions?
The "we'll fix it later" mentality works for shitty altcoins that have nothing to lose by reinventing themselves, but I'm not convinced Bitcoin can change. I was mining Bitcoin about a decade ago now, hearing people say "Lightning will work soon" or "a good interchain bridge will exist eventually" in 2024 leaves me convinced nothing has changed. It's a race between the economics and the technology to see which becomes outdated first.
> If you need an L2 transaction layer to solve an issue inherent to an L1 chain, you're kinda just admitting that the base layer is flawed.
On a similar note, TCP is an admission that IP is flawed. And HTTP is proof that the entire networking stack is a scam.
Clearly, any decent networking protocol would handle any and all information interchange anyone could ever need.
The fact that HTTP is on its third iteration, and it’s still built in top of the same Internet Protocol from 1974, proves that _nothing_ has changed. /s
None of what you said is inherently wrong. Much like the OSI model, if you reinvented Bitcoin today it would look much different.
Unlike the OSI model, Bitcoin's solution to finance is not modular or all-encompassing. If it's not going to adapt to modern demands, it will get replaced. There's no point in keeping around a financial solution that is impossible to fix when it breaks.
The fact is that Bitcoin is very likely to absorb a vast percentage of the worlds value simply as it is.
Your prediction for the future that a ledger with the throughput of a 28.8 modem will absorb the world's value is "fact"?
By this point, there will be far more motivation to focus on developing solutions (such as Lightning) to allow smaller and faster transactions.
It has been in the works for a decade and no one wants it. Why would someone use that when any other cryptocurrency (except for ethereum) already do small and fast transactions?
> Your prediction for the future that a ledger with the throughput of a 28.8 modem will absorb the world's value is "fact"?
Yes, the base layer network is ideally suited for storing extremely large amounts of wealth, for large amounts of time. No other asset has qualities that come close, they all leak value compared to bitcoin.
Where did you read this and why did you believe it? There is no technical reason this is true of course, for many reasons, including that many of the earliest coins are clones of bitcoin.
Are you copying some talking points or can you explain on a fundamental level why you believe this?
Fundamentally it comes down to perfect scarcity. If you increase supply, the value in your share leaks into the new supply.
As far as clones. Network effect takes care of that. They would have to be substantially better than bitcoin to beat it and that is extremely unlikely to happen as bitcoin is close to perfect.
All the money in the world will end up in bitcoin, even though it has about 4.5 transactions per second and the throughput of a 28.8 modem, because it was made first? How would this make any sort of logistical or technical sense?
You realize that ethereum already surpasses bitcoin in transactions and litecoin and even dogecoin do too right?
Also you still haven't linked where you are getting these ideas. When you believe in predictions of the future with no evidence and no possibility in reality, that's called religion.
Bitcoin refuses to increase their throughput and at the current rate, everyone on earth gets a single transaction every 50 years. What part of this actually makes sense to you?
I realise everything that you say - I learnt that in the first 5% of my journey learning about bitcoin.
First off, the transactions on the main bitcoin network will be the largest transactions in the world.
All the smaller transactions will take place on different bitcoin networks. Lightning is a decentralised example, VISA and Paypal are centralised examples.
You aren't answering my questions, you're just making the same claims over and over without any explanation.
This sounds like you have been soaked in /r/bitcoin propaganda. You realize that subreddit is completely censored so that anyone who goes against the narrative of more throughput or the absurdity of the lightning network gets banned right? Try going there an questioning the common narrative to experiment for yourself then see what happens.
You aren't confronting why anyone would do what you're saying. Why would anyone transfer money onto a network where they have to pay huge amounts of money to move it around? What problem does that solve? It isn't like people can't already move money around much cheaper than a bitcoin transaction.
The lightning network has been promised for over a decade now. No one uses it because you have to make a little cluster of transactions that have no impact on the actual chain until you pay the enormous fees. That's like a little village coming up with their own currency of swapping IOUs with everyone else and not being able to use their money until they pay $12-$37 to convert it something Other people will use. If your IOU is less that the transaction amount, it's frozen. It's an absurd idea that no one wants.
Most of all you aren't confronting why anyone would put themselves through all this when they could either use traditional finance or other cryptocurrencies. Bitcoin is right now useful for and used for only speculation and nothing else. Knowing that why would anyone put their money into unless they were speculating on it?
That's what it boils down to - Bitcoin is nothing it promised to be; it's like the equivalent of penny stocks... except that it's quite the opposite in terms if pricing.
Using Bitcoin network to move small amounts of money is akin to using a jumbo jet to go grocery shopping. There are better blockchains out there for small money transfers.
So, I have to go through a multitude of swaps, i.e losses, if Bitcoin is the real deal?! I've tried it, it's even more expensive than doing it directly!
If Bitcoin is a wealth store and I need to convert Bitcoin to USDC, let's say, just to make a payment, or if I get paid in USDC and have to convert it back to Bitcoin to store, then I still need to pay even more than just the Bitcoin fees if I pay directly in Bitcoin or get paid directly in Bitcoin! Often the margin on the crypto currency conversion is higher than the Bitcoin network fees.
True, which is why you do not convert Bitcoin to USDC for each micropayment. You batch all the USDC transactions until you have a sizeable amount to touch Bitcoin network.
Ultimately, I see Bitcoin as Gold. You do not touch your gold savings for buying your daily coffee. For that, you have USDs in your wallet. But you still transact with Gold once in a while when it makes sense.
So, if wires are chaeper in EUR (thanks to SEPA), than even if I want to store my wealth in USD, I need to always sell USD for EUR just to do wires?! That's crazy! It's a patchwork an a scheme, not an alternative to fiat, gold, or stocks!
> So, if wires are chaeper in EUR (thanks to SEPA), than even if I want to store my wealth in USD, I need to always sell USD for EUR just to do wires?! That's crazy!
Indeed it is crazy. Who is advocating for that though?
"Large" here meaning physically large in terms of bytes, it's irrespective of the amount transferred in the tx. If you have high volume in a relatively low number of transactions and are relatively good with input/output hygiene then the actual fees paid probably won't break the bank.
It's accurate to say that lightning makes it's own tradeoffs, but it's not accurate to say it's not Bitcoin.
Every lightning transaction is just a regular bitcoin transaction that could be posted to the chain at any time-- you just don't have to, because the scripting functionality has been used so that if a counterparty posts an earlier state you can effectively cancel it.
The switch to deferring updates unless there is a dispute gives a massive advantage to scaling (e.g. number of tx per second possible goes up the more users there are rather than being a global constant), instantaneouness of transaction irreversability (as fast as the involved parties can make a couple round trips, vs an hour for multiple confirmations), and potentially privacy (since not every update is globally broadcast). But these benefits come at a considerable cost of requiring a degree of active monitoring so if a counterparty posts an outdated state your software can respond, along with additional software complexity, etc.
For some applications the benefits are well worth the costs, for others they aren't.
To say it's not bitcoin is like saying multisignature transactions aren't bitcoin. In both cases they're ways of using the existing functionality. In both cases they require some additional software and different approaches. In both cases they use functionality built into the protocol which was intended for their purposes (payment channels being a concept originally described by Satoshi, and specifically accommodated in the transaction format). And in both cases they change the tradeoff surface somewhat.
> Have you looked at the economy in the last two years?
Try the last 3 years. Or last 4. Or last 40 years.
They are desperately trying to control money printing (oops sorry, quantitative easing) with high interest rates, but I'm sure they'll be forced to bend to political pressure in an election year.
U.S. needs an extremely tight monetary regime for two decades, to be viable long term. And the big funds will hedge. BTC is one of those hedges.
Some people own bitcoin only because they expect its value to increase due to demand from others. There is nothing inherently invalid about this-- speculation occurs in all kinds of valuable assets and it serves the public good of creating a demand buffer.
For those parties, bitcoin's general properties are not very relevant and a centeralized list maintained by DTCC may well better serve their particular needs. To the extent that it does: more power to them!
Sure, any kind of relatively short duration dividend/interest yielder, to give an example. Though it's possible to make extra money with t-bills by trading against rates, no one can say thats a primary driver. Likewise for much of the bond market.
Gold did at one point in history have an actual use case apart from speculation and being pretty: it is almost uniquely suitable as currency and store of value (along with silver) because it is hard to create, easy to purify and non-destructively measure the purity of, fungible, and can be easily split and recombined into units of any desired weight
as far as having an actual historic or present day use case, blockchain snake oil is still in search of a problem only it can solve to this day
Cryptocurrency still works the same as it ever did. I would be more concerned that the average bitcoin transactions costs over $11 dollars (down from over $37 USD a month ago)
If only. It's not off chain when you open a channel, rebalance a channel, or close a channel. On-chain Fees need to be paid at every step of the way.
High BTC fees impede the Lightning Network from being a true scaling solution, an obvious fact that has been dismissed for many years by adherents of absurdly small block sizes.
If you want an actual transaction on the actual chain that can actually be spent then you need to pay the giant bitcoin transaction fee. Why would anyone put up with the extreme convoluted nonsense of the lightning network when they could use any other cryptocurrency and have almost no fees because they aren't constraining their block sizes to sell a second layer?
There is no technical reason to do this, it was purely a political propaganda based move.
Before you respond with "but disk" or "but network" or "but cpu" look at the actual bitcoin throughput (about 700KB every 10 minutes) and look at how much hard drive space you can buy for the cost of one transaction. Then realize that individuals don't even need to sync with the chain to use cryptocurrencies. This is a well worn road.
You pay a lot in credit card fees, only that the true cost is obfuscated into the prices of the goods and services.
Also, bank transfers aren't cheap. For example, in Costa Rica, to transfer any amount from an account in bank A to another account in bank B, you pay a fee in the range of 1$-3$, irrespective of the transferred amount. If you consider transfer across countries, then you enter into 50+$ transfer fees.
I didn't think anyone would actually try to defend bitcoin's astronomical and completely unnecessary transaction fees. Cryptocurrencies can be a solution to everything you mentioned, just not bitcoin. Litecoin, Dogecoin and Bitcoin Cash are all bitcoin clones with more throughput and their transaction fees are a few cents to fractions of a cent while their transaction counts are on average in the same ballpark as bitcoin with a lot more headroom.
The bigger irony will be when the US Government steps in and seizes all BTC & ETH within their reach so that they can create their very own crypto-backed central bank digital currency (CBDC) as the new "gold standard" a la Executive Order 6102 in 1933:
Incidentally: When you look at currencies (and governments) on long enough time scales, you'll see that they're pretty ephemeral -- e.g. very few currencies or governments around today were around in (roughly) the same form 200 years ago. I consider it a benefit that we might have a way of persisting wealth that doesn't involve rent extraction or digging shiny metal out of the ground -- though I admit to not being a fan of the "wastefulness" of PoW in the midst of energy decarbonization.
If you want a fun watch: The History of Paper Money on Youtube is a fascinating look at how currencies, banks, central banks, and fiat money all came into existence. TLDR: Our "modern" approach to money was a giant "too big to fail" ponzi scheme largely perpetrated (multiple times) by John Law. Wild.
Btw I know comments like that are fun when talking to friends or whatever. We just have that guideline because of how they influence discussion on a large internet forum...not for any ethical reason or anything like that.
For the Gary Genler's comment (and the opinion of a lot of commenters on Hacker News):
> Though we’re merit neutral, I’d note that the underlying assets in the metals ETPs have consumer and industrial uses, while in contrast bitcoin is primarily a speculative, volatile asset that’s also used for illicit activity including ransomware,[4] money laundering,[5] sanction evasion,[6] and terrorist financing.[7]
You can find how this was addressed in the approval:
> See, e.g., Kling Letter (stating that the bitcoin futures price is beholden to the spot price, and the spot price has always been, and continues to be, manipulated by bad actors); Better Markets Letter I at 2 and 4-9 and Better Markets Letter II at 4-6 (stating that spot bitcoin ETPs are extremely vulnerable to manipulation by bad actors because spot bitcoin markets (1) have a history of artificially inflated trading volumes due to rampant manipulation and wash trading, (2) are highly concentrated, and (3) rely on a select group of individuals and entities to maintain the bitcoin network); Letter from John Palmer, dated Aug. 11, 2023, regarding SR-CboeBZX-2023-028 (stating that 75% of the bitcoin in circulation is controlled by a small minority who use market makers to pump and dump); Daniel Smith Letter (“[t]he history of crypto is a never-ending history of frauds and scams”); Letter from Billy Jensen, dated Sept. 5, 2023, regarding SR- CboeBZX-2023-028 (stating that bitcoin is a digital Ponzi, and that approving a spot ETF “will bring greater unsuspecting fools into the pyramid scheme”); Letter from The Registered Principal, dated Aug. 9, 2023, regarding SR-CboeBZX-2023-038, SR-CboeBZX-2023-040, SR-CboeBZX-2023-042, SR- CboeBZX-2023-044, SR-NASDAQ-2023-016, SR-NASDAQ-2023-019, and SR-NYSEARCA-2023-44 (“[t]here are no verifiable entities or persons as points of ultimate origin of [b]itcoin which makes it very likely to be a major fraud operation”); Letter from Joseph, dated July 18, 2023, regarding SR-CboeBZX- 2023-044 (“[a] cartel of organized crime and money-launders [sic] actively manipulate the price of [b]itcoin through the use of Tether and other crypto-ponzi schemes”); Letter from Avinash Shenoy, dated Oct. 18, 2023, regarding SR-NASDAQ-2023-016 (stating that manipulation in the bitcoin marketplace has not gone away); Letter from Winston Wood, dated Oct. 19, 2023, regarding SR-NASDAQ-2023-016 (stating that the bitcoin market is manipulated and has a history rife with scams and criminal activity); Letter from Greg Steven, dated Oct. 19, 2023, regarding SR-NASDAQ-2023-016 (“Steven Letter”) (stating that bitcoin is wash traded on platforms outside of U.S. jurisdiction); Letter from Neil Fulton, dated Oct. 20, 2023, regarding SR-NASDAQ-2023-016 (recommending that spot bitcoin ETPs be disapproved until bitcoin wash trading is minimized); Letters from Micah Warren, Associate Professor of Mathematics, University of Oregon, dated Oct. 27, 2023, regarding SR-NASDAQ-2023-016, and dated Dec. 15, 2023, regarding SR-CboeBZX-2023-072 (“Warren Letters”) (explaining how the bitcoin ledger, which is maintained by for-profit mining entities, could become significantly less diverse and less costly to manipulate). Some commenters also assert that the bitcoin asset itself is a manipulation or fraud. One commenter states that “the complete lack of knowledge of who the operators of the bitcoin network are means that it is impossible to implement sufficient control measures to ensure a fair market that is free from manipulation of both token trades, actions of the operators, or even the fundamental properties of the asset itself.” See Letter from Brandon B., dated Oct. 25, 2023, regarding SR-NASDAQ-2023-016 (“Brandon Letter”), at 4. Another commenter asserts that the questions the Commission has been asking about fraud and manipulation are misguided because “they are predicated on the idea that [b]itcoin is something legitimate which could possibly serve the public interest.” This commenter claims that “[b]itcoin is, a...
Yes, the push against crypto is a partisan issue in the US: Democrats hate crypto after they accepted stolen campaign donation money from Sam Bankman-Fried of FTX. The worst thing you can do for politicians is to make them look bad.
Not really. My first econ professor equated regular investing in stocks is more like buying a a loan (at the absolute most basic level).
You can keep it, and hopefully get more money out of it than you put in, or risk getting less or none of it if the underlying borrower wasn't the best and goes in to default.
Or you can sell it to someone else for more or less depending on the borrowers performance.
Buying partial ownership (shares) in a real company that makes a product or service profitably, or loaning money to a person or business that will be paid back with interest, are both ways to invest capital which can increase in value with no "greater fool".
Apple stock isn't worth more today than in 1990 because people arbitrarily agreed upon a bigger number, it's worth more because they've innovated and grown and now sell expensive products to a billion customers around the world.
Crypto tokens, NFTs, beanie babies, rare coins, paintings only increase in value if some greater fool comes along to pay more than you paid for it. At least with a painting or a beanie baby you could display it in your house, I guess.
The use case for the NFT thing has been so sad. I thought it would give rise to some sort of decentralized ID tech, but all it amounted to in the real world was mutant gorilla pictures.
And then you have a bunch of competing blockchains with significantly different underlying code, so how does anything get standardized?
It's the same fundamental thing. Apple stock is worth more because future people believe it to be worth more. The 'why' behind that is also the same: people believe that the product has value. Even deeper, people believe that their life has value. It's all the same fundamentally.
Your dad didn't understand the philosophy of Bitcoin. It is more about to fool the unbanked and to unbank the fooled. Not the other way around, remember!
> What other products that are as known-to-be-risky-and-associated-with-fraud are backed by an ETF?
Government bonds. There were ETFs holding Greek gov bonds for example. Greek cheated to enter the EU (by fudging its numbers, with the help of big accounting firms and banks). And government bonds are known to be risky, seen that throughout times many government have simply grown their public debt and then defaulted.
Fun fact: US public debt grew from $33 trillion (with a 't') to $34 trillion in ... drumroll ... 100 days.
Woot!
P.S: I'm not sure your question is correctly phrased... 3% to 5% of the world's entire GDP is linked to crime. By now it's not even clear if 3% to 5% of all the Bitcoin transactions are linked to crime.
I should've added this comment from the SEC, the entity that just authorized this ETF:
"""
Though we’re merit neutral, I’d note that the underlying assets in the metals ETPs have consumer and industrial uses, while in contrast bitcoin is primarily a speculative, volatile asset that’s also used for illicit activity including ransomware,[4] money laundering,[5] sanction evasion,[6] and terrorist financing.[7]
I should've added this comment from the SEC, the entity that just authorized this ETF:
"""
Though we’re merit neutral, I’d note that the underlying assets in the metals ETPs have consumer and industrial uses, while in contrast bitcoin is primarily a speculative, volatile asset that’s also used for illicit activity including ransomware,[4] money laundering,[5] sanction evasion,[6] and terrorist financing.[7]
The fact that Spot Bitcoin ETFs were ever contemplated into existence just shows the general insanity of crypto. After all, if you believe that cryptocurrencies, with "the code is the law" ethos and non-reputable transactions, are the wave of the future, just transact in BTC directly. If you believe crypto is actually too risky to manage individually (e.g. hacked/stolen keys) then you'd want the benefit of something like an ETF to manage your ownership. But buying an ETF that itself just holds crypto assets is either an exercise in futility or a "worst of all worlds" situation. But I guess a middle man needs to make a buck somehow...
Agreed - I think the little cryptographer in all of us regards this as a sad day.
It's going to take real courage to leave the economic systems of predation and extraction behind. Whether or not you think crypto is likely to be a large part of that motion (I do, but some reasonable folks disagree), there's nothing about this action that feels like it's part of it.
> The fact that Spot Bitcoin ETFs were ever contemplated into existence just shows the general insanity of crypto.
Why is it the insanity of crypto? The action is entirely established interests putting a wrapper around crypto.
How do you suppose a large fund should purchase bitcoin? They specialize in markets, not wallet management. Many also do not hold their own cash individually and entrust institutions.
> Many also do not hold their own cash individually and entrust institutions.
Because literally the entire point of crypto is to not have to "entrust institution". Like the entire bitcoin protocol is built around the concept of trustlessness. If you're going to start "trusting institutions", you can do away with a huge part of the complexity (and gargantuan energy usage) of Bitcoin.
Bitcoin isn't directing companies to start ETF's, nor is it trusting institutions. It's just a protocol. Institutions came, bought Bitcoin and are selling it to investors.
I suppose if those institutions were worthy of trust then there wouldn't be such high demand for Bitcoin's gargantuan energy usage in the first place.
Irony of the millenium! Wasn't Bitcoin supposed to "free" us from the banks, "speculative" finanacial institutions and centralised control? Guess human greed trumps everything!
The only thing I am concerned about is "paper bitcoin" and rehypothecation. Is there anything published about how ETF entities might prove they have custody of the amount of bitcoin they claim (in other words, proof of reserves)?
I guess what I'm asking is do they have to do it? I haven't tried reading any of the filings, etc... I'm wondering if someone has already done the work for me to say if this issue has been addressed by the SEC and/or individual ETFs.
You can, but it's not simple in the context of an ETP, due to all the infrastructure in between the parties with an ownership interest and the assets.
If we ignore that:
Dumbest version: You give everyone a list of all the liabilities. They make sure they are in there themselves. Anyone left out isn't entitled to the assets in an insolvency, so there is an incentive to check.
This isn't very efficient, giving everyone the whole list. But make a hash tree with each node carrying a hash and the sum of liabilities below it. Show each user their log2() sized proof. Much more efficient.
This leaks information about the distribution of ownership. Replace the values with pedersen commitment (and range proofs on their sums), and only open the top and bottom ones.
(Archive.org link because Zak died a couple years ago stomach cancer at age 40 due to an undetected chronic H. pylori infection, and his website didn't out survive him for long)
Suppose you have 1 bitcoin, you can now show to a dozen different people that you have it. Convincing them to buy your ETF or whatever you are selling.
This should actually be quicker and easier to prove than something like gold ETFs (e.g. SPDR) or other commodity ETFs.
The custody provider (e.g. Coinbase is the custody provider for most of these ETFs) should be able to simply show wallet addresses for all the Bitcoin they hold.
>>> finally reaches its ultimate form of a centralised list maintained by the DTC
> simply show wallet addresses for all the Bitcoin they hold
DTC's database is not where the Bitcoin is. It's still on Bitcoin's decentralized blockchain, just like always. That's the ultimate authority no matter how many centralized forms you stack on top of it.
At least with this structure, there are separate, distinct entities for custody, market making, transfer agent, etc. to reduce the incentives to self-deal and print fake paper securities and commodities.
So a huge improvement on the current state of affairs, where FTX or Binance handles all of these functions, with no segregation.
if they diverge because an economic shitstorm has started and everybody is buying food for survival with bitcoin, but the rump government still wants its cut of your new mad gainz, bitcoin in the ETF and bitcoin out of the ETF might maintain independent values, FEC vs RMB
Talking about extreme situations, here is another possible scenario - if electricity is then rationed and works only for two hours a day, people with cigarettes or gold may actually buy the food, while people with Bitcoin go hungry, and the value may plummet.
A trade like this (partly) is what blew up 3AC. Borrowing has cost and if futures funding premium turns against you and your perceived arb, along with a further divergence against you, it’s game over. Funnily enough that GBTC gap basically closed today; it was a >30% discount when 3AC died. Very nice if you get paid to hedge! Not so nice when you’re paying 0.1% in hourly funding premium.
You don't need futures to arb this. You can demand a payout in cash if the ETF price is higher than the Bitcoin price. There will be market makers jumping on that.
I'm not familiar with what happened at 3AC but it sounds like there was leverage involved. The arb opportunity i'm talking about is something that exists with all ETFs and keeps them in line with the underlying asset.
3AC was doing the same arb on GBTC (with an extended lock-in before redemption), but GBTC had no mechanism for selling BTC once their premium reversed.
With ETFs, you don't need to be concerned with reserves. I can buy the ETF, go to the market-makers, and ask them to exchange the ETF for either bitcoin, or a cash equivalent. If they can't deliver, they're in trouble.
There's a two way arb in ETFs which keeps the price tracking accurate:
- if the ETF trades higher than bitcoin on crypto exchanges: the market makers can simply buy bitcoin on exchange, sell the ETF on traditional exchanges: do this enough and the price difference narrows.
- if the ETF trades lower than bitcoin on crypto exchanges: I can just buy the ETF, ask to redeem to bitcoin and pocket the difference. Sooner or later this price discrepancy goes away.
How are you protected against losing your investment if they can not deliver?
> Price tracking
Does Bitcoin support a high enough frequency of transactions for long enough to make this possible for years into the future? Does it not become too hard to mine at some point?
Can you quote the relevant parts then, since you have apparently read all the prospectuses? I am wondering the same thing. Will they publish the custody addresses?
GBTC is becoming an ETF, so shortly the answer will be "nothing". But, currently it's not an ETF or equivalent because you can't redeem the shares of the ETF for the underlying asset. This has resulted in the price of GBTC diverging significantly from the price of bitcoin since you don't have that natural ability to arbitrage away and price differences with redemptions
2 will be solved by arbitrage (the discount will evaporate). 1 can be solved by competition, assuming GBTC holders actually switch to lower fee ETFs once they see the discrepancy in fees.
It will track the price now that it is an ETF, that's solved. Fees are still insane so it will slowly dwindle as people sell it in favor of other options, but it will still exist for a long time because people can't sell their existing holdings without triggering huge capital gains taxes.
The strong anti-Bitcoin sentiment on HN is still amusing. It goes way back - 13 years or more.
Having read many of these negative comments, I think part of this sentiment boils down to the commenter seeing no point to Bitcoin. Just this thread has examples. It must be more than a little annoying to feel very strongly that Bitcoin is pointless, but to also notice that it's still here. Year after year.
If that shoe were on my foot, in addition to being annoyed I'd be curious about what I was missing.
Bitcoin doesn't have to do something useful for everyone to survive. It doesn't have to "replace fiat." It doesn't have to be a payment system. It doesn't have to "go to the moon." It doesn't even need an ETF. Bitcoin just needs to fill needs (or wants) not met by anything else. They don't even have to be your needs or wants.
Unlike every other attempt at electronic cash that came before it, Bitcoin also doesn't need the approval of any person, police force, legislative body, military, or government. I'd challenge people who hold negative views on Bitcoin to name some other systems for which this holds true.
I think that's the point that a lot of hostile commenters might be missing.
Me guessing (as somebody who is anti-crypto): they like how it returns ~50-100% year over year pretty much.
I swear I saw some super highly upvoted comments that read as normal + level-headed in r/CryptoCurrnecy that was like "if it goes from $45k -> $100k this year it isn't even that much"
Do you ever hear Warren Buffet saying "122% yearly returns are meh"?
Yep, crypto bros will get in bed with the same banks that screwed them over in 2008 if the end goal means that the price of their coin (ahem) bags.. go up.
The whole Bitcoin 'manifesto' and sticking it to the man is just a ruse.
Or the technologists that push these open source projects forward were abandoned by the very communities that used to celebrate disruptive technologies.
Bitcoin is wealth in the cloud. There's immense utility in being able to digitalize your wealth, including higher mobility and, since it is a decentralized network, assurance that it won't be inflated, confiscated and that you will have the freedom to transact it with whoever you want.
And yet if you were to visit Iran and attempt to access that wealth you'd quickly discover how little of that wealth is actually yours.
It's not just that it's in the cloud, it's the only form of wealth you can keep digitally AND only you have access and control over it.
Maybe that's fine because you're a good citizen who follows the rules, but some people are born into places where they don't get the privilege of a fair financial system, or the system changes on them.
But all this is circular logic. You can’t say something is valuable because it’s digital. Why is it wealth in the first place is the question. Wealth is something that represents concrete value.
Gold was a currency and a store of wealth for a long time for multiple societies (even when most of those use cases you listed didn't exist). If only they had the knowledge and wisdom of epolanski from 2024 they wouldn't have made this mistake...
Pretty sure that every society that unilaterally adopted gold used it for jewellery first, and only started using it as a currency and store of wealth once its value had already been established.
Sure, that's because a good piece of jewelry shares the same property of a good money: its scarcity. Gold was introduced to humanity as an ornament, but eventually humans discovered a better use for it.
> Sure, that's because a good piece of jewelry shares the same property of a good money: its scarcity.
That is absolutely FALSE.
Good "money" requires a tiny bit of inflation, otherwise there's no incentive into spending, but hoarding.
When people start hoarding money, rather than spending or investing it, economy starts freezing.
Cryptocurrencies are a living example of that: there is absolutely NO incentive into using them to trade, only to hoard them. Why use them today if price goes up? Non sense. Indeed nobody uses them to trade, ever. There's less people spending Bitcoin for goods today, than there was in 2016 when the amount of people in the sector was a magnitude lower.
In fact, even the narrative on websites like Bitcoin's have long moved from the "currency" to the "store of value" argument.
You're compounding many wrong and false information and building an absolutely distorted idea of how money and finance works.
At the end of the day, that's history repeating itself. As wealthy people accumulate real wealth, poor people chase pieces of paper or ridiculous blockchain hashes.
> Sure, that's because a good piece of jewelry shares the same property of a good money: its scarcity.
There are all sorts of scarce things that we don't use for jewellery or see as particularly valuable. Gold has physical properties that make it specifically useful for jewellery (easy to work, doesn't tarnish, shiny, etc.).
Plenty of people have done that and captured some value. Bitcoin has the most secure network of its type and that has inherent value, it's also perceived to have value by millions of people around the world as opposed to your random fork.
Not sure if you see that it's your understanding of the world that's off here.
Money is a social construct. Other social constructs are countries and borders. They only exist due to social consensus and is a pure social construct. Social constructs do have real impact on your individual well-being though and should not be trivialized.
BTC's value is the massive network securing it, and the trust in the brand's security and resistance to debasement. Its value lives in peoples' head, similar to many other assets.
These are some interesting points around its value, but it can absolutely be inflated, no? Given that most of our standards of value are tied to fiats, and that Bitcoin's exchange with said fiats is highly variable, the value of your crypto wealth can totally be out of your control.
Fortunately for most bitcoiners who got in early, it's been variable in a positive direction... But not for everyone.
Value fluctuation is not the same as asset inflation. The first relates to how much confidence people have on using BTC to represent their wealth in a given moment. The second is a decreasing of the asset's value keeping overall confidence constant.
Once you realize that banks are very fragile and abusive, just having this alternative is important.
Banks can deny you access to your money on a whim. Compliance, glitch, failure, whatever. You can't use your money. You can't buy food. You can't pay rent. You can't buy tickets. You can't hire a lawyer.
It's nice to have something which is based on completely different principles.
I think you'll be amazed at the extent to which BTC will be able to be controlled by strong central governments. I'd be shocked if in ten years there's not granular control over which wallets contain "tainted" bitcoin and cannot be converted to fiat except through actual money laundering. There's been a lot of consolidation of the exchanges in USA, tons of KYC controls in place now, and old-school options like localbitcoins.com or craigslist have disappeared or been nerfed beyond recognizability.
If people no longer "need" to convert BTC to fiat, this would no longer be a point of a control, but until then, governments can already and will continue to grow how much they can control BTC flow.
What about the lightning network? Or Liquid sidechain? There are lots of people working on scaling bitcoin so that it can be used like cash (low fees and anonymous).
When a user receives a payment in Cash App or Strike over the lightning network there is no way to track where that bitcoin came from. I haven't really tested that out yet, but I find the idea that bitcoin can be the rails of transferring value pretty compelling. Most people can still transact in fiat but with trustless interoperability between banks and service providers. And of course if people are happy transacting in units of bitcoin it can all be done in a trust-minimized way (with tradeoffs available for convenience, etc...).
But to your point, the government could crack down on the app stores and service providers to not support this kinda stuff.
> The question is more like: Are OK with government control?
I simply doubt that my opinion, or even that of the majority of the public, would change the outcome of what the government decides to do. They seem to be on a pro-KYC/AML/FINRA/IRS path regardless of public opinion.
Many governments attempt to force their populations to keep their savings in the nation's currency, while aggressively devaluing the currency. The richer people in those countries tend to try to get out of it via other currency holdings in offshore accounts or real estate, but the poorer set don't generally have that option. The ability to opt out of that in a way that's harder to confiscate than eg physical gold/USD is very helpful to those people.
Most people who are observant are well aware that there’s deep and enduring demand for ways to gamble and speculate.
It’s really easy to recognize Bitcoin filling that role like the neighborhood numbers game, pachinko, online poker, and tulip investing all have at various times in history.
What you're missing is something can be criticized even if it fulfills some needs. Drugs, gambling, crimes all satisfy some people's needs but most people have negative view on them.
Drugs and gambling do not hurt others. Throwing “crimes” in makes your reasoning weak. Where are you getting your data on the first two? I’m not sure you’re correct.
If you ever need an example of how drugs genuinely ruin things on a large scale read absolutely anything about the opium wars.
I do contend that "ruining families" is not a thing we should base policy on because it implies both a crazy amount of government intrusion into individual lives and because it imposes rules on everyone to make the nuclear family work.
Please spend like 30 seconds of analytical thinking trying to poke holes in this. It's remarkably easy to disprove. The challenge is what if anything we choose to do about the harms that they can cause.
Neither drugs nor gambling, in and of itself, harms anyone but the individual doing it.
However, said individual could harm others in the persuit of drugs and gambling when their own income or savings are unable to satisfy their own cravings. But how is that any different from any other forms of harm from crime conducted for other reasons?
Sure as long as you realize its simply an opinion and not act like it's a fact that it's bad. Fundamentally it feels like every time these threads open up on HN 70% of it is bad faith, repeat arguments.
Don't like Bitcoin's Proof of work properties, check out Ethereum. Don't think that everything needs to be on one central ledger? Check out Polkadot. It feels like so many commenters here put their heads in the sand about an entire class of technology because they're caught up in their opinion as fact.
I object to Bitcoin on the fact that governments regulate money, so centralization is guaranteed. Wasting any effort on fake decentralization is objectively inferior because it adds to the cost with no benefit.
An opinion backed by mainstream economic consensus but, yes an opinion. I do not need to utilize heterodox models to justify why a hyper deflationary monetary system is a bad idea. I can base this opinion off economic fundamentals and data points showing the negative impacts such a system would have. But you probably understand this, and have justifications for why the positives outweigh the negatives. I don’t reach that opinion and we likely won’t see eye to eye on that point. You probably made this account specifically to push back on the mainstream opinions of cryptocurrencies.
> Don't like Bitcoin's Proof of work properties, check out Ethereum.
Ethereum's move to a Proof-of-Stake system was the best thing to happen to the cryptocurrency world, from an ecological point of view; however, that does not change anything about Bitcoin's energy consumption.
Someone who objects to Bitcoin due to its excessive energy use will not stop disliking Bitcoin just because an unrelated cryptocurrency became better.
I understand it perfectly and loathe it, not for the reasons people typically do, but because what it pretends to be able to do it cannot, and actually does the opposite of.
> People are salty they work in tech and don't understand bitcoin.
i smell sour grapes from those people. They saw bitcoin very early on, and gave it the dismissal way back in 2008/9. That missed "opportunity" continues to bias them into thinking that their initial assessment must still be correct (for dismissing it early), otherwise they'd have to admit their dismissal as being hugely mistaken.
First, re-read the comment you're replying to. They weren't talking about Bitcoin being used for drugs, they compared Bitcoin to drugs and crime, as the OP said all it needs to do is fulfill a need.
Second, the "you just don't understand it" argument is as old as Bitcoin itself. It's tiring. It's not new, it's not crazy complex...it's understood. It's just useless and ripe with scams.
What Bitcoin is really missing before it can finally take off is yet another layer of fees and rent seeking; can't wait to pay 1.5%(!) of my portfolio every year in expenses :)
> Unlike every other attempt at electronic cash that came before it, Bitcoin also doesn't need the approval of any person, police force, legislative body, military, or government.
But then can't you see the irony of writing that sentence when the article title is literally "Spot Bitcoin ETF receives official approval from the SEC".
That's the thing that's so baffling to me - if you're saying BTC is so great that it doesn't need the support of government and social institutions, why the push so hard to get an ETF (multiple in fact!) when the rallying cry for crypto has always been "distributed, trustless currency".
On the contrary... bitcoin desperately needs this approval. The current (and future) price of BTC is absolutely predicated upon the greater fool theory.
The network is dependent on miners. Miners earn bitcoin but spend dollars to create it. They're dependent on price appreciation to provide the liquidity that sustains their business. Without this approval, who is going to continue to pay more for bitcoin?
The only losers in bitcoin are the ones that stopped. Any 5+ year holding has been ridiculously profitable.
In gambling, the longer you continue, the more certain it is that you will lose. Bitcoin is a uniquely ironic form of gambling if it's gambling at all.
That's silly. Anyone who's dollar cost averaging bitcoin buys over a long period of time has been incredibly well rewarded. BTC is up 146% over the last 12 months, and up 15x (!) over the last 5 years.
Even if you were slow and naïve and only jumped at the 2021 all-time high, and kept buying during the next 12 months (as one should when an asset you like goes down), you'd have made your money back and then some.
I didn't say buy-and-hold for 5 years. Feel free to do the math; dollar cost averaging over 5 years would still be one of the best investments in modern times.
> Any 5+ year holding has been ridiculously profitable.
The more remarkable a short history the more likely it is not sustainable: Beanie babies, tulips, etc.
In a zero sum investment for every win there is a loss. Bitcoin however is highly negative sum. For every win there are far more losses. Who do you suppose pays hourly train loads of coal turned into CO2? How many years now?
Your two examples, beanie babies(4-5 yrs bubble) and tulip mania (16 months) did not even last long enough for a 5 year comparison. Bitcoin is turning 15 this year.
Imagine thinking you can prove that an argument is settled due to price movements.
Bitcoin may go to a billion and it won't change the fundamental premise:
You can have ALL the Bitcoin in the world, all of it, and if there's no buyer outside, nobody willing to trade anything for it you have nothing.
Now use the same argument with all the land in US, all the crop in India, all the fish in the Pacific, all the gold in Russia, all the wine in France, all the bakeries in Palermo, all the cars in Sydney.
You farm, you eat, you can make jewellery and tech, you drive.
And yes, it applies to US dollars too (albeit to a minor extent). If nobody wants it you can just stare at dead national heroes on paper, or burn it idk.
Wealth does not come from money, and of all the money, you choose to speculate on the exchange price of a virtual one.
The premise will never change and crypto cultists keep fooling themselves and finding many weak and illiterate to join their ranks.
But any price movement will not change the fundamental issue.
Luckily Bitcoin can be sold on a Sunday afternoon at market price with plenty of liquidity in seconds. Good luck lining up a deal like that with the items you listed.
> Bitcoin may go to a billion and it won't change the fundamental premise:
Haha, bitcoin never even attempted to solve your "fundamental premise", and never made any such promise. Bitcoin is like fiat money in that regard, and different in other regards.
Zero sum money transfer from suckers that think that Bitcoin will one day have a breakthrough or are driven by fear of missing out and greed - of course there is another factor of ten and you also can become rich without doing any work - to early[er] adopters. A pyramid scheme.
> I'd challenge people who hold negative views on Bitcoin to name some other systems for which this holds true.
Pointless challenge, those aren't good qualities. Also money is worthless, unless you like looking at pieces of paper depicting death national heroes, it's worthless, don't understand why are bitcoiners fixated giving money value.
It's just meant to be traded not hoarded. It had a value when it was pegged to gold. Rich people have companies, real estate, airplanes, art, jewellery, bonds, but relatively little money.
Anyway, literally any other cryptocurrency share these properties. Some even technologically better, yet completely ignored.
You don't seem as curious as you say you'd be, framing all criticism as hostility or simple antagonism. I don't think you've considered what you're missing not trying to understand why people don't care about bitcoin.
They care enough to enter every HN thread that has positive news on the industry to shit on it. Valid criticism is fine, but insightful crypto criticism on HN is rare.
Fine, you don't like crypto. Say something new or insightful or skip the comment section.
Unlike every other attempt at electronic cash that came before it, Bitcoin also doesn't need the approval of any person, police force, legislative body, military, or government. I'd challenge people who hold negative views on Bitcoin to name some other systems for which this holds true.
For it to be useful it does. How else does one convert from fiat to btc and back again?
I view Bitcoin the same way I view Herbalife. I don't have any issue with the product. I'm bothered by the misleading claims made by proponents to benefit themselves.
Well Herbalife is a corporate entity, that has governing leadership that you can challenge its 'claims' because the corporate entity makes them, sells it to people who don't know better etc. Conceptually, that means that Herbalife gives people false information, they take that and perpetuate it in their MLM for their benefit.
Bitcoin, is piece of open source software that was released on the internet 13 years ago running all over the world. With no central governing entity, all driven by software consensus mechanisms.
Would you consider that you just don't like some of the organizations that have built themselves around this network making misleading claims? Rather than the technology itself?
I used a leaky analogy, so I'll explain more precisely what I mean. When someone tries to sell their MLM, they pretend that they want to help you get rich, but it's obvious that they just want to help themselves. I get the same vibe from Bitcoin enthusiasts. For example, they'll claim that Bitcoin will help the poor in countries with hyperinflation but that seems disingenuous. Perhaps it's not fair to expect the regular Bitcoin holder to actively help the unbanked thousands of miles away, but there doesn't even seem to be a curiosity in the entire Bitcoin community about whether it's actually it's actually used that way, let alone how to encourage adoption and what the macroeconomic implications of this.
I really didn't mind bitcoin before the price exploded, it was a curiosity and interesting experiment.
Since then, it has been used to transfer a lot of wealth using outright fraud, cons, and other criminal means.
I get paid a lot of money (fiat) to program digital payment systems, and have spent time understanding the underlying technology, as well as a holding a degree in economics. I get what crypto is and how it works, and I won't go near it.
Bitcoin isn't inherently dangerous, but the way that the crypto ecosystem convinces people to gamble on a zero sum game they don't understand is absolutely dangerous. For every bitcoin millionaire, there's someone that pumped real dollars into the system. Very real harms have, and continue, to be caused by bitcoin and crypto.
That’s not how stocks work outside of daytrading/short term holding.
My ownership of a stock is a claim on a portion of a company’s assets and future productive addition to the economy. The stock market is a positive sum game. If I buy a share of ABC Gold mining company, it’s because I expect them to dig some actual gold out of the ground and expanding the economy. They can distribute a dividend to me after then selling that gold. No one has added any money to the stock market, but I am wealthier.
Same applies to bitcoin - no more net value needs to be invested into bitcoin and the USD price will continue to increase at ~7%, which is the rate at which the USD is being devalued through supply inflation over the last 100 years.
If I lent my bitcoin to ABC Gold Mining like you have, then I could expect to additionally receive interest on my loan.
> Are you blaming bitcoin for gambling addiction and bad investing now?
No. I’m explicitly not blaming bitcoin. I’m blaming the humans that take advantage of others using the technical complexity of the crypto ecosystem to convince people that it is something that it isn’t.
The fact that you can wreck your life in Vegas or day-trading on Robinhood using dollars isn’t something I like either.
The whole point of the sentence you quoted is that bitcoin isn’t some magical wealth creator as it is frequently sold as. It’s to point out that it is a zero sum game; for every dollar someone has gotten out of the system, someone else has put a dollar in.
> for every dollar someone has gotten out of the system, someone else has put a dollar in.
That's a feature and in the fiat economy the same is almost true. If Bitcoin is a "zero sum game" then fiat is a "negative sum game" for the vast majority of participants whose money is debased.
This ETF doesn't mean it's a replacement of cash either.
Just so many people are holding it and there's a lot of money in it, but still less than it's peak. It will probably just go down again without news, as it did before.
It's not that the BTC futures ( since 2018) changed much, I expect a similar end result of this.
Note : I went out in 2017 as I didn't saw it's original purpose being fulfilled and it still isn't after 14 years.
Nobody is talking about paying things with crypto anymore, as far as I know.
The whole premise of burning energy just for “proof of work” is what I hate.
I work in architecture and year after year the industry is pushing to squeeze every last bit of energy efficiency out of everything. Meanwhile bitcoin is like “BURN SOME COAL TO ACCOMPLISH LITERALLY NOTHING USEFUL! AND KEEP DOING IT FOREVER!”
And the crypto people will always bring up “Mining gold just to make gold bars is a waste of energy too” but guess what I don’t buy gold bars either.
If people want to say “I’m a bitcoin fanboy” to justify it that’d be one thing, but there’s always this insinuation that any day it’s going to find its killer use case that isn’t already solved better by a centralized system instead of only existing to buy in hopes of the price goes up
For one, a bitcoin wallet can't be seized by fiat by any 3-letter agency of any country.
A fair amount of it is speculative, but unlike a pure-speculative ponzi scheme it's rooted in some appreciation of intrinsic value.
I'm confused by this comment. What do you mean "seized by fiat"? Custodial wallets can and have been seized by government agencies. Cold wallet storage devices can and have been seized. Bitcoin has no intrinsic value, only imputed value.
Nobody can order the bitcoin network to freeze assets of Johnny Wanted the way they can order banks and other financial institutions. Nobody can stop you getting paid even for non-criminal activities the way Mastercard/Visa do.
If you lose or surrender you private key - fair enough, but that's not the same.
The killer use case has existed from day 1: remove the middleman. That is banks, or goverments. That's it. There's literally nothing else to it.
Speculating on its value, while possible, has nothing to do with its purpose.
And yet here we are, discussing a Bitcoin ETF, which involves plenty of corporate middlemen and has no benefit to the Bitcoin community besides increasing Bitcoin's speculative value.
And I’m sure plenty of other people were buying and holding in exchanges like Coinbase already, instead of buying bitcoins in direct person-to-person cash transactions like the decentralization advocates imagine they will
Its purpose is to provide an escape hatch from fiat currency that steals people's wealth, available to everyone in the world, ultimately shutting down the global scam that is central banking.
It is the hardest money that mankind has ever seen, digital, with an issuance schedule that is set in stone - no select few people have the ability to effortlessly print it, stealing the wealth of the rest and corrupting the world at its core, causing third world poverty, endless wars, corrupt media etc.
It's very healthy to listen to both sides of an argument and theorise about conspiracies. It's the close-minded people programmed to laugh at them who need to self-reflect.
> Have you not noticed the J/Ghash ratio over the years?
This is completely irrelevant because the protocol is designed to scale difficulty with the hashrate. The only benefit of improving J/Ghash is to get a leg up on other bitcoin miners.
Architecture isn't useful, it's a waist of resources. Every building should be identical, we just need one type of each building usage type, then we can get rid of the architects.
Bitcoin is doing more to accelerate the adoption of wasted energy than any corporation on the planet. It is the buyer of last resort, open to anyone.
Compare that to the fiat system, do you get to vote for who runs the Federal Reserve? Can you verify the current supply of the US dollar or the maximum limit of dollars that can be printed?
Very privileged take to assume Bitcoin doesn't "ACCOMPLISH LITERALLY NOTHING USEFUL", when millions of people are using it to save and send for 15 years, and over 100 TRILLION dollars has been settled on the network.
Real money, like USD or Pounds etc are social in their construct. People trust them. And they don't like, but will trust banks.
btc and other coins are 'trustless', yet hostile to use, and the ecosystem is filled with the most shady people on the planet all looking to scam our parents.
No one really trusts bitcoin. And that's on of the big bitcoin problems.
Also, it doesn't live up to any of it's hype. But others have enumerated all of those faults.
> Unlike every other attempt at electronic cash that came before it, Bitcoin also doesn't need the approval of any person, police force, legislative body, military, or government. I'd challenge people who hold negative views on Bitcoin to name some other systems for which this holds true.
This isn't actually true, BTC requires a certain amount of subsidy every ten minutes from the global economy. If that subsidy is not forthcoming it ceases to function. That subsidy is constantly increasing in terms of purchasing power.
Further, the regulatory authorities of the world have complete power over the transactions that take place on the ledger, and pretty much full visibility into and out of the ledger when it comes to their controlled fiat currencies.
Neither of the above hold true for many other cryptocurrencies, but I'm not interested in shilling for them, because the entire cryptosphere as a whole is a wretched hive of scum and villainy, largely because of attempts to force the above status quo from BTC onto the remainder, which given the multitude thereof, and the ability for them to endlessly replicate and spawn, is basically doomed to failure.
Note: I am well aware that the popular opinion of BTC is not aware of much of the above, but I didn't say "people believe x" I just said "x".
> Bitcoin just needs to fill needs (or wants) not met by anything else.
That want being, in this case, the need to evade financial regulators and easily move large amounts of money untraceable. There is basically no other thing Bitcoin does better than traditional electronic cash, especially with the transaction fees reaching current values.
Is it a legitimate want? It's a complex question involving personal and political values, but let's just say not everyone who objects about crypto does so because they don't understand its real uses.
paradoxically, bitcoin is the worse at this, since addresses are completely public. Unless you, like satoshi, keep the coin in the address and never spend it, any conversion to value that you can spend, such as cash, is going to be tracible.
> Is it a legitimate want?
yes. Unless you can prove criminality, there's the assumption of innocence.
Addresses in Bitcoin are pseudoanonymous. Many criminals have evaded prosecution for years (for example, the MtGox thieves) despite moving billions in the clear on the blockchain. You are feigning ignorance about the true nature of Bitcoin which is quite obviously designed to enable very strong privacy, as noted by even by its inventor in the original paper; let's not even discuss things like Monero and ZCash.
MtGox thieves evaded prosecution because no one was doing tracing back then. Chainalysis got started specifically to link all their activity and is now a giant graph connecting all the "pseudonymous" addresses. And the thieves laundered most of their stolen coin through exchanges, not chain transactions, strange how they didn't want that very strong privacy. There's none of that left on Bitcoin, it's been indexed, clustered and mapped.
Obviously there are technologies which enable complete privacy - and like tumblers, any that prove popular will be shut down, there's just too many negative externalities.
The state of bitcoin mixers was also very primitive back then, especially given this volume. Today, criminals can use things like the defunct ChipMixer, which distributes private keys funded in advance. So by definition there is nothing in the blockchain to follow, because the handover is done off chain.
The fact that ChipMixer was busted in an international law enforcement operation should indicate to you the nature of the beast. Just like in the case of SilkRoad, there are a myriad copy cats which are still online. It's a small piece of computer code anyone can run. So money laundry on bitcoin to a nearly untraceable level can be done by any service that can setup some kind of network connection and run a bit of computer code.
This is unprecedented in the history of finance and the main practical benefit of Bitcoin other than speculation.
I disagree with pretty much every point here, wow. ChipMixer provided a little bit of disconnect, but there was a research paper a while back that ran something like 5 transfers through it and managed to identify their mixing transactions with 90% precision. Law enforcement is most likely constantly tracking those, similar to how the NSA runs some significant percentage of Tor entry/exit nodes.
Second, recognize the enormous amount of trust required here - that the mixer will actually do proper randomization, that there will be a large number of participants, that they won't keep the logs, that they won't just up and leave with all the money. There's plenty of examples of somewhat established mixers that fail on some or all of these, and you're telling me that instead people will just send their money to be mixed by anyone that can setup a network connection and a bit of code?
I'm going to need more context here on the ChipMixer claims. Let's say a tracked party deposits amount A in CM style mixer, and then receives private keys corresponding to amounts B, C, D, E, F, G, previously deposited in the blockchain, which happen to add up to A minus a random 0 to 4% mixing fee. You have full view of A and know that it's being deposited to CM with 100% confidence.
As long as nothing moves on the blockchain, and the trust requirement you mention is fulfilled, I hope you agree that, save from some bug in the implementation, you will have no idea what private keys were received by the original owner of A. It's logically impossible, since CM has already pre-deposited many more other funded private keys (in fact, the entire previous volume of their laundry) and by the definition you don't know which ones of those were disclosed to the client A. The number of combinations is a factorial of the number previous clients, the vast majority you won't know.
So the attack scenario has to be more convoluted than that, perhaps the client immediately consolidates his received keys into a single address, perhaps we assume the attacker has perfect information over all amounts A deposited, which is clearly not practical etc. But that's another discussion altogether that deals with breaking a certain implementation of finding a launderer with a certain behavior. Research papers always make bold claims to raise interest, and often deliver crypto style failures, that require "only" 2^64 attempts, so the system is "broken".
But the issue we debated above - address pseudoanonymity enabling untraceable off chain asset swaps - is already settled if you agree to the second paragraph.
But we don't have to search for those keys in all of the deposits that CM ever made - only in the ones that stopped churning and mixing. Maybe they try to control the dynamics of their lots to be statistically indistinguishable from the withdrawals - but that requires a vastly larger pool of capital and continuous operational effort, and I have a hunch they do not in fact do that.
Furthermore, if you are a client, how long are you willing to keep your money in private keys that you know CM also has? Even if you don't mistrust them, you still need to worry about the exact scenario that happened - they get busted and all their private keys get seized. So chances are those amounts leave the CM network of addresses pretty quickly, even if they don't get added up in a single address. So now all that combinatorial explosion drops down to a pretty tractable k-NN classification problem.
I would advise against making strong statements like "logically impossible" about things that seem to require a lot of very narrow conditions like perfect actor behavior and strong stationarity in order to be true.
The point is, if law enforcement needs for the launderer to mess up after the invisible off chain transfer, or for the mixer to betray them, you have already conceded that address pseudoanymity is a strong, sometimes unremovable layer of privacy. Forensics exist even for physical cash, you can trace banknote serial numbers, lift physical fingerprints or DNA etc. Yet, that doesn't mean it's a good idea to leave people cross borders with sacks of money, there is wide agreement in our society that cash offers a privacy that is very conducive to anti-social actions. Bitcoin privacy is much, much stronger than physical cash, and pushed to 11 for things like Monero or Zcash.
In the restricted scenario provided, it really is logically impossible to know the ownership transfer happened. Your attack requires knowing all inputs into the laundry, which you won't have in the general case, they'll look like any other transfers in the blockchain.
Even if a mixer is busted, I can be pretty sure they abide by their public claim to not keep any history older than a few hours after the mixing is complete, secret keys and all, because it's not in their interest for such evidence of crimes to exist.
I have not conceded anything. Many crimes would be perfectly unsolvable if everyone did everything perfectly, and yet.. You are again using "logically impossible" while insisting on a very specific condition, "not knowing all inputs into the laundry", which is very much solvable to a high degree of certainty - CM mixes so hard that their addresses are all connected to each other - I just need to send them a single transfer, watch it tumble, then connect the dots, and then list all transactions leading into that giant hairball of connections. Just read the Justice Dept complaint against CM - it has an extensive inventory of specific customers and crime proceeds, using "Company A [..] tracking approximately 118,500 bitcoin addresses associated with ChipMixer". Now how would they do that if it was so logically impossible?
And why would having a private key to an output address that no one else has touched be an evidence to a crime? They probably only delete them after the user has transferred the funds out, if they even bother.
I don't know why you are so bought into Bitcoin privacy specifically, but it holds as much water as the privacy statements in the App Store - anyone with sufficient motivation and data analysis skills can poke right through it. Monero is likely stronger, but if it can't be cracked, then as soon as it becomes big enough it will get blocked.
Ah, I see, the real ChipMixer had a major flaw. I had no idea how the entire system operated, I used it just as an example to illustrate off-chain custody handovers. My "logically impossible" scenario was that the mixer has an array of addresses on the chain funded by previous customers, and when a new customer comes in it just runs a knapsack on that set and assigns them a subset of keys. Perhaps add a single layer of coinjoins to dilute each "really bad" incoming transaction, so clients won't directly get the bitcoins laundered by kidnappers and it's transparent to the whoever is doing the tracking that the coins have been laundered.
> why would having a private key to an output address that no one else has touched be an evidence to a crime?
An address is a hash over an ECDSA public key and a public key is a computational derivation of the random private key. If you have the private key, you can derive the associated address which is publicly connected on the blockchain to known proceeds of crime that have been laundered. That they were spent or not (by an another customer than the criminal) is irrelevant, it proves that you handled them.
So you are comparing communication privacy to financial privacy for very large money transfers? As I've said, it's a question of political values, but I think you will find the vast majority of people not sharing that point of view.
Also, unlike Bitcoin, Signal ads strong privacy on top of a very functional base product.
Signal definitely makes life easier for terrorists and child predators; the question is whether it has decent uses whose benefits outweigh that cost. (And, while I'm cautiously in favour of cryptography, I don't think that question is by any means trivial). Cryptocurrency has no such positive use cases; the only case where it has an advantage over regular payment methods is crime.
Nobody ever said that regulators move quickly. Bitcoin's only advantages come from temporary underregulation. After the regulation catches up, all that is left is the disadvantages.
The idea that Bitcoin can continue to operate with the disapproval of a functioning government is naive.
> I think part of this sentiment boils down to the commenter seeing no point to Bitcoin.
I thought cryptocurrency was an interesting and promising idea. But I got away from it around the time it became clear the entire space was overrun by wall-to-wall scamming. And it's safe to disregard anyone who doesn't acknowledge that.
If someone says "Yeah, it's wall-to-wall scamming, and other than that, the main use of it is for organized crime transactions, but there's this silver lining of X", then I might listen to X briefly, even though it seems irrelevant at this point.
If someone doesn't phrase their advocacy with acknowledging the massive BS, then I assume the person is just another scammer (and they might be even if they acknowledge it).
I guess what exactly do you define as scamming? In terms of outright fraud, I agree there's a lot. It shouldn't be super surprising that scammers tend to prefer decentralized permissionless financial rails, for the same reason that political extremists and pornographers were some of the biggest earliest users of the decentralized permissionless publishing rails of the early Internet.
But I wouldn't characterize all, or even most of crypto as scams. Gambling, maybe. Are memecoins a scam? I would say they're more like a massively multiplayer form of gambling. Which you might argue is a bad thing, and certainly is dubious from a social standpoint. But if the code is openly public and autonomous, and there's no outright deceit, I don't think gambling is really gambling.
Even beyond that, there's a lot happening in crypto that most certainly isn't scams. You have stablecoins and payment rails like USDC, stores of value like Bitcoin, smart contract chains like Ethereum, decentralized finance applications like permissionless exchanges and lending markets, social applications like farcaster, decentralized AI, and gaming.
Now you might argue that all of these things are stupid and pointless and wastes of money, but that's a separate debate. Of the large projects in these categories almost none are outright scams. They're teams experimenting with new ways to run financial markets or move payments or train models or hedge inflation. Like most technological experiments most will fail. But if that was the criteria for "scam" then the entire startup sector is also wall-to-wall scams.
> But if the code is openly public and autonomous, and there's no outright deceit, I don't think gambling is really gambling.
But there's plenty of outright deceit. Many (most?) memecoins are some form of pump & dump. It doesn't really matter whether the code is openly public if the winners are chosen ahead of time by pre-allocating tokens.
Edit: Also actual gambling meets your criteria here. While the source code of slot machines is not public, it is typically audited to ensure it offers the odds that are advertised.
> Are memecoins a scam? I would say they're more like a massively multiplayer form of gambling.
They're practically indistinguishable from penny-stock scams, and they almost always involve a bunch of outright lies in their promotional materials; the only reason you can argue that many buyers aren't deceived is because lying is so rampant and expected in that space that people take it as given that the claims are going to be lies, which is hardly an argument that it's a healthy activity.
> Even beyond that, there's a lot happening in crypto that most certainly isn't scams. You have stablecoins and payment rails like USDC, stores of value like Bitcoin, smart contract chains like Ethereum, decentralized finance applications like permissionless exchanges and lending markets, social applications like farcaster, decentralized AI, and gaming.
All of which still fails to add up to anything actually working and useful, 15 years in. The best cases people can come up with are sympathetic criminals like people evading capital controls. What minimal practical use of cryptocurrency there was is already in a clear decline; fewer and fewer stores are accepting it for payment, the few efforts at interesting crypto games have already collapsed...
> Like most technological experiments most will fail. But if that was the criteria for "scam" then the entire startup sector is also wall-to-wall scams.
There's a big difference between "most" and "all". The startup sector as a whole has enough successes to balance out the failures and end up as positive ROI (and even then, a lot of startups really are scams - just not all of them).
> All of which still fails to add up to anything actually working and useful, 15 years in.
The first packet switched network came online in 1969. Fifteen years by 1984 almost all the use cases were hobby, and it'd be another ten years before the Internet really started changing life.
Decentralized consensus is a fundamentally new computing primitive, similar to packet switched networks. Developing applications on top of new primitives is hard and long, and there will be a lot of time required just to build out usable infrastructure.
Turing complete smart contracts are only 7 years old. Layer 2 scaling is only two years old. Decentralized exchanges and other on-chain financial contracts about four years old.
Except with packet switching networks I can immediately point to the problem they are solving and can also make a guess how things will change when we create 000s of bigger and better ones. And the timeline is definitely not what you are making up here - the 70s had immense development of networks and protocols, every telco was building new networks across the country, it was most certainly not hobby stuff, there just weren't that many computers until the 80s.
What problem are we solving with decentralized consensus? How will things improve if we have a giant one? Say every mobile phone was a part of the consensus mechanism, churning Turing-complete smart contracts. Billions of nodes. What do we get out of that?
> The first packet switched network came online in 1969. Fifteen years by 1984 almost all the use cases were hobby, and it'd be another ten years before the Internet really started changing life.
By 1980 CompuServe had thousands of paying subscribers, both home and business - and I suspect they'd invested far less getting there than the amount of VC money that's gone into cryptocurrency. You can say the home users were "hobbyists", but they were getting real value out of the network; online chat or games might not have had a clear business purpose, but they were fun, and that's real value.
I've seen literally one niche for cryptocurrency that people seemed to actually enjoy for its own sake rather than as a crime tool or get rich quick scheme, cryptokitties, and that seems to have proven itself fundamentally unviable (either your collectibles are too cheap to be interesting, or they're too expensive to be fun). Cryptocurrency is not merely wildly unprofitable to date, it's not generating value and there is no indication that it ever will generate value.
I meet some people in crypto occasionally, and it's hilarious that most of them no longer talk about technologies, projects, applications - all they discuss is sentiment. "Oh, there's a wave of positive outlook", or "new patterns of participation are emerging". At least it's honest, I guess, instead of pretending that we are changing the world with DAOs or whatever, they are just sizing up the next bubble.
I agree that Bitcoin is that perfect storm of technological and financial obfuscation that's made the ideal air cover for charlatans.
However, organizations contributing to this space are trying to extend the functionality and utility of these technologies. For example, check out Chainlink https://chainlinklabs.com/research,
Other forms of interesting decentralization applications look no further than IPFS & Filecoin. https://protocol.ai/
You're not wrong; there are scams and a lot of snake oil, but don't let that deafen you to what direction thoughtful applied use of the technology can produce.
There's probably more comments promoting and defending Bitcoin on HN than ones questioning it.
The question I have is why do commenters feel the need to respond to any comment about Bitcoin that is not a (sometimes subtle) promotion or defense of it.
A reasonable person might think it's because Bitcoin is only valuable if increasingly more and more people buy it. If it's not increasingly popular or if, God forbid, everyone holding Bitcoin were to try to sell, all at once, it's Game Over. (Some folks will lose money and all Hell will break loose.)
If the first statement is false, and Bitcoin is valuable if it's unpopular, then there should be no logical reason why anyone would try to "defend" Bitcoin on HN. Why would anyone care. It's valuable even if no one is buying, right. If it lacks popularity, then this is of no consequence. Ignore it.
Alas, there is no way to test if second statement is true, i.e., it is Game Over if everyone cashes out their Bitcoin, other than this actually happening. Even still, there is no logical reason anyone would need to "defend" Bitcoin on HN if someone else believes this to be true. Why would it matter if other people hold or sell their Bitcoin.
And yet, there are consistently HN voters and commenters who seek to "defend" Bitcoin from anyone who has doubts or asks questions. That, in and of itself, may raise suspicions even more.
"Bitcoin doesn't have to do something useful for everyone to survive. It doesn;t have to "replace fiat". It doesn't have to be a payment system. It doesn't have to "go to the moon". It doesn't even need an ETF."
But somehow it needs to be constantly defended in every electronic discussion. It needs constant promotion. It needs hype.
No one can simply state "I am not interested in Bitcoin" in a discussion without triggering some "response". Regardless of the merits of Bitcoin, or absence of them, that is fscked up. Red flag.
In case anyone gets confused, I am not suggesting that any commenter literally states "I am not interested in Bitcoin" and nothing else. I am using a hypothetical example of a seemingly benign statement to illustrate the idea that _all_ comments about crypto which are not positive are quickly "countered" by Bitcoin true believers. Here is perhaps a better example. Someone states, in so many words, that Bitcoin requires large amounts of electricity. Is this untrue. It is explicitly negative. It seems quite benign yet this sort of comment will almost invariably trigger a "defense". To some, that is a red flag that there is something suspicous about these "arguments" that people feel compelled to make about Bitcoin.
Check out the film "Bitconned" if you can. Slow start but hilarious in the end. What happens when some petty criminals accidentally come in contact with hordes of "true believers". online. If I am not mistaken this was the SEC's first successful prosecution re: crypto.
>No one can simply state "I am not interested in Bitcoin" in a discussion without triggering some "response". Regardless of the merits of Bitcoin, or absence of them, that is fscked up. Red flag.
If the topic is some positive news about a technology (Bitcoin or otherwise), and your only contribution is "I am not interested in this" then you'll probably trigger a response. Might also be time to revisit the commenting guidelines.
> No one can simply state "I am not interested in Bitcoin" in a discussion without triggering some "response". Regardless of the merits of Bitcoin, or absence of them, that is fscked up. Red flag.
Lol this is ridiculous. If you popped up on a hacker news thread about abortion rights and said "I am not interested in abortion rights" would you also say it is a "red flag" regardless of the merits (or lack of merits) of abortion?
If you truly have no interest then lurk. But if you choose to talk (noone is forcing you to!) then don't be surprised at responses.
Well yeah, there's no need to defend it. Literally nothing would change. I'm just against bullshit arguments such as
"any random shitcoin did this, therefore BTC goes in the same bag," or
"no! We should absolutely live in a totalitarian dystopia and have governments that track every move we make. God forbid <money launderers> <terrorists> <some other bullshit>"
More likely, so-called "tech" companies will be the ones most interested in tracking every move/transaction, a practice already familiar to them, as they can put that information to commercial use, selling online ad services. Unlike the government, they have invested in the infrastructure to gather personal information about citizens and use that information _for profit_. Nor are they bound by the same restrictions on use of collected data from citizens and laws that can potentially protect citizens against government spying. If a government wants the data from "track every move" it's guaranteed they will, to the extent they feel the need, try to have Big Tech provide them with the information they seek. History has shown they have already been quite successful at getting the information they want with Big Tech's assistance. It's only going to get continually easier as more and more information becomes centralised in a few Big Tech companies.
> It must be more than a little annoying to feel very strongly that Bitcoin is pointless, but to also notice that it's still here. Year after year.
If that shoe were on my foot, in addition to being annoyed I'd be curious about what I was missing.
There are MLM’s that have been around for over 100 years. I feel strongly that they’re all complete scams, yet they live on. Maybe I’m closed minded for not joining Amway. But I think I’m just being sensible, tbh.
HN should be a place where bitcoin improvement protocols are routinely discussed
There should have been taproot and schnorr discussions on the frontpage for years
What people are building as betas, there should be ordinals and inscription discussions about their technical implementation
But instead we get these surface level discussions about bitcoin or crypto for over a decade now. People completely missing that there are others who had the exact same information and said “okay this is how I can improve it to more closely fulfill that vision” instead of “harumph! that will never work and I dont like it so there’s that!
I think a big component is definitely the bitterness that comes from tech savvy people being aware of when it was just getting started and watching it go from pennies to tens of thousands without buying any. I remember when it was on Slashdot all the time in the late 2000s, the hivemind agreed that it would never lead anywhere, and so I dismissed it as well. There were even Bitcoin Faucet sites where you could go and just get 5 BTC for free, no questions asked.
I still don't own any and don't want to, but there is the demon at the back of my head telling me that I could've just mined some or clicked the button on the faucet. After all we all knew about it. I know that most people wouldn't have held onto it for 14 years, but it's not a rational feeling.
This, 100%. Bitcoin has proven its value already, and it's the only tool we have against authoritarian governments that print money and steal as much as possible with taxes. You can ask people in Argentina or Venezuela about that.
>Bitcoin also doesn't need the approval of any person, police force, legislative body, military, or government.
If you start from scratch with a non-exchange wallet and get paid in BTC for something to it, sure. But if you want to get in with any fiat, you're going through an exchange, which means KYC, which means you definitely need the approval of the exchange (and by proxy your local government/tax authority).
It was a simple solve by governments to get crypto controlled centrally by proxy for most users this way.
> If you start from scratch with a non-exchange wallet and get paid in BTC for something to it, sure.
I believe the original idea was that, to start from scratch, you would just leave the Bitcoin software running on your computer for a while, since that software not only hosted your wallet but also contained a miner. After a while, you would get lucky and receive 50 Bitcoins.
Of course, that stopped working once mining moved to FPGA and then to ASIC; even with GPU mining software, an individual user has no hope of mining any relevant amount of Bitcoin. That bootstrap mechanism is now completely dead, and the only way to get new Bitcoins is to get them from someone, buy them in an exchange, or invest lots of money in specialized Bitcoin mining hardware.
> the only way to get new Bitcoins is to get them from someone, buy them in an exchange, or invest lots of money in specialized Bitcoin mining hardware.
Have you heard of this new technology called a "J.O.B"? It enables people to trade labor for currency.
The next ten years will be about how to earn Bitcoin through skilled labor, not mining on your PC.
That's absolutely not the case, HN is mostly people who think they're geniuses because they can program computers. Read the comments on any post about a topic you know a lot about and you'll see it's full of people talking very confidently about things they know very little about. There are of course some very smart people mixed in, but it's hard to pick those people out from the noise.
Hacker News was pro-crypto circa 2015 when Coinbase launched.
The change of the tone here is mainly because of the changed audience. Hacker News was originally a forum for founders and hackers. Now it is a general forum for salarymen software developers.
More like people are getting tired of being reminded of missing the boat year over year but they will always be missing the boat thinking it's the top this time.
Or those people who suffered loss buying it at the top need reasons that Bitcoin should suck.
I have a feeling Bitcoin discussions can get quite more interesting in here if it had no monetary values but people can be sensitive when money is involved.
My struggle with it is mainly that it doesn’t seem to accomplish any of its goals very well, while having really big downsides. A few examples:
It’s difficult to use it for circumventing government controls, since so many of the on and off ramps are subject to regulation and it’s difficult (and expensive) to transact truly anonymously.
It sucks as a store of value since it’s so volatile.
Similar to the point above, it’s increasing subject to government regulation (namely the US) in a de facto sense.
The UX sucks, and mistakes can be super punishing. If you make a mistake then you have no recourse and everyone will applaud the code working as intended, unless the mistake is really big in which case the “code as law” folks will fork the network to rollback the mistake.
In the same vein as the item above, scams are rampart and there is very little recourse once scammed. As a result, it’s tough to see actual widespread adoption as a currency (and not just a speculative asset sitting in a brokerage account somewhere) since the level of technical sophistication needed to use it as a currency without risking wiping yourself out puts it way out of reach of most people.
It sucks for transactions, since the fees are so high and make small transactions bit feasible.
Proof of work sucks and is super wasteful.
There are probably plenty of other ways it misses the mark I’m missing as well. It frustrates me because it feels so fatally flawed, but people take it so seriously. If popular sentiment was that BTC was just a fun thing to speculate on, in the same realm as TSLA or buying short dated calls on the VIX, I would be totally on board! But trying to act like it’s a serious currency that can compete with USD or whatever just seems somewhat delusional. I think blockchain and ETH style smart contracts are super cool tech, and could have super productive applications that legitimately make the world a better, more efficient place, but BTC in its current form doesn’t check that box for me.
> That's only a good thing in dictatorships, not in democracies.
Yes, Bitcoin allows you to be a dictator of your personal finances, compared to fiat, a "democratic" system, where people you never voted into power get to press a button and print as much money as they deem necessary to "stimulate" the economy.
I mean, it is the best performing asset of the last 10 years, so yeah, it seems pretty great to anyone who has a brain.
A 98% cash and 2% Bitcoin would beat the SPY returns for any 4 year period since inception. When making investments, its important to have a long term outlook. Do you just live day to day without any planning?
well, or it's tied into all other segments of the economy and those segments have moved up and down due to their own economic forces, and markets balance that with prices.
for bitcoin to move up or down $1000 a day has a variance: call me when we're outlying
Imagine you were leveraged long ETF news, then the fake news started then descended in liquidation,your long leverage has been closed and you have no more money to buy now.
That fake news cleaned up a lot of leveraged bets up and down.
> Weird how the price went to 48k on fake news, with the potential to go even higher until revealed to be fake, but only 47k on the real news?
It makes sense if you figure that the ETF is probably just another FTX-like scam (except now by competitors of FTX who are even better at regulatory capture).
All it means is that you now have a security that tracks Bitcoin's price, but is probably backed by very little actual Bitcoin.
TLDR: money is going to flow out of real Bitcoin and into this fake Bitcoin ETF causing the price of real Bitcoin to go down eventually. That's without even considering insane possibilities of naked shorting by a certain owner of a certain large hedge fund that is co-owner/founder of this ETF and also owner of the US's largest market maker.
I think investors were spooked by the hack. The tweet situation was so unprofessional that they thought “something is wrong, ETF launch will be delayed by months”
It has survived by changing the narrative and getting people to buy the stories.
It was going to replace money, but then it didn't because the network slowed down to the point where it was unusable. Nobody was going to wait 30 min for a transaction to complete.
So then the message was flipped and Bitcoin was now 'an asset', not a currency, further supported by IRS's decision to tax it like an asset, so it was advertised as a store of value, "like gold".
It didn't deliver on the currency promise, even with all the lightening and proof-of-stake talks.
It is actively hurting the entire planet at this scale by generating useless heat.
And last, but not least, KYC lets governments track all your bitcoin purchases forever to an extent impossible to do with cash, including deanonymizing transactions retroactively decades later.
A digital currency will not give us more freedom, it will only take more of it away, which is why I personally no longer support Bitcoin, and I don't think others should either.
This global warming rhetoric against bitcoin is nonsense right? The current financial system doesn't run off as many or more computers in datacenters around the globe? I don't have objective numbers but I'd lay money credit card processing alone dwarfs bitcoin by a pretty good margin.
There's not really a problematic upper bound for global transaction volume on transactions per second with the lightning network. There are other problems in terms of adoption and infrastructure etc, but the actual potential for humankind to have a single currency global low-barrier payment system is there. But this is more like the early days of the internet. The internet seemed pointless to most people even as late as the 90's.
A future global system could have settlement on the blockchain.
Like the current system does at far less regular intervals than the processing power of non-settled transactions.
> There's not really a problematic upper bound for global transaction volume on transactions per second with the lightning network
There unfortunately is, to open a channel you have to make a Bitcoin transaction, and you can't use lightning without opening a channel. Bitcoin processes a max of ~220M transactions per year so to onboard the world onto lightning with only one channel each would take a few decades.
A real layer 2 could solve it, or having some trustless way to use BTC on other chains
It's possible I'm too optimistic on this point. I feel I have a good grasp of how bitcoin works, but when it gets to layer 2 it gets fuzzier.
The initial discussions sounded really promising, as they seemed to mirror HTTP on top of TCP/IP. And we all know how much of a slow burning revolution that turned out to be.
But http seems simpler than what I've read about lightning more recently.
Total wild speculation follows:
As for the channels problem, it feels to me like you have something like ISPs or AOL being the thing that's needed to kickstart it.
And perhaps the ISPs or AOL in this world are the employers and lightning banks. So yes you need bitcoin to open it, but with an employer you have the potential to have an entity with bitcoin resources and with a reason to send bitcoin to an individual.
Perhaps HD wallets with lightning kickstarter funds apportioned to new employees. This feels similar to the needing a bank account or national insurance number in the UK (social security number? in the US) to start getting paid, or similar to needing an internet connection. Yes you could choose to get paid in bitcoin and have the fees come out of your wage, and this would be similar to getting paid in physical cash today. Or you could get over the slight roadbump to get you onto the lightning network.
What would a real layer 2 look like in your opinion?
A real layer 2 would look more like something built on Ethereum (can see all its L2s at https://l2beat.com).
Essentially it's a separate network that every few minutes takes every transaction and compresses it into a data blob that it saves on Ethereum along with a proof that the computation was done correctly. The Ethereum L1 nodes then only need to verify the proof instead of re-executing all transactions that happened on the L2.
With this design users can go straight from an exchange like Coinbase onto the L2 and never need to use Ethereum, and fees are 10x cheaper because of the data compression. Fees will soon be 100x cheaper as Ethereum is adding extra space just for these L2 data blobs that is much cheaper than normal Ethereum data space.
Unfortunately it can't be done on Bitcoin right now because Bitcoin nodes don't have Turing complete scripting and so can't verify the proof that an L2 posts to Bitcoin.
YouTube is one of those things that consumes more energy than bitcoin.
That is bad, but it doesn't seem part of the public narrative that YouTube is bad because of global warming.
Also the general narrative posits that electric cars are good. They also use a lot of energy.
There's nothing inherent about EVs versus bitcoin that suggests one uses clean energy versus another.
They both use a lot of electricity.
But so does the banking sector. And entertainment, farming, travel and a lot of the other things 8 billion people choose to do or depend on.
Any usage of fossil fuels should rightfully be a target and held to the same standards.
There is another narrative that we need continual growth and that inflation aids this.
And deflationary currencies are bad because they don't help growth.
This seems so ingrained in modern politics and economics that I slightly hesitate to question it in public.
Well maybe unbounded growth and exponential usage of resources is the actual problem.
I hope we reach the social limit on unbounded growth before it destroys everything we have.
It's literally in physical terms unsustainable.
My only hope here is that nuclear fusion gives us a respite for a hundred years or so.
But we'd still have the same problem at a different scale if we used that to grow to a trillion people.
I can see that a deflationary global currency could be part of the solution to the problem.
And I can see why suggesting deflation is good can be seen as a threatening thing to those that have resources.
So I feel in that light, the bitcoin = global warming narrative is really convenient, even if a little ironic.
While Bitcoin is designed to reward high energy consumption the opposite is true for the fiancial system, since lower energy costs would make the different processing entities earn higher margins.
Thus, the financial system provides much more utility for the energy it consumes than bitcoin does.
If people only knew that a card transaction is the equivalent of a 0 confirmation transaction between two “trust me bro” parties and that said card transaction takes days and a lot of institutional resources to clear…
Last time i checked it's still gonna suffer from 51% attack? Or its ECDSA implementation might have NSA backdoor?
There is no stats how many people were robbed, how many accounts where hijacked, how many keys were guessed (due to crap implementations) etc. I think there was no other technology in the world that lost so much of people's cash with no responsibility of any kind.
Yeah, just like gold - if you lived in 860 AC and thought copper was gold too - then it's a valid comparison!
This should also solve the scalability issues quite a bit by reducing the need to record as many transactions in the first place once the exchanges hold most of the coins.
Finally this should reduce the long-term potential in mining as the block reward keeps reducing exponentially with lower expectations of transaction fees.
Sometimes regulatory solutions do fix hard technical problems.
Is this the kind of solution where you aren't actually using the blockchain, and are just ending up trusting a 3rd party that acts like a bank but is not regulated?
I very highly doubt that trading ETFs has lower fees than Bitcoin.
As monetary system Bitcoin, even more crypto in general, is still the one and only method to move money internationally in realtime with very low fees.
Yeah, ARKB, for example, charges 0.75% management fee. Meaning they charge that every year on total holdings. So the ETF is clearly more expensive than simply holding BTC. I think OP believes this will lead to lower BTC fees due to lower volume.
Does this sound you like a solution? There is no another tech invented for reducing gas fees and increase the speed. They just now have acceess to create new fake bitcoins like 'money' and have authorize over it. What is the difference betweeen this new printed bitcoin and the money?
Congrats you just made another currency that is explicitly not Bitcoin. And it's better at being a currency than Bitcoin. Which isn't very difficult because Bitcoin absolutely sucks as a currency.
I think it's easy to be cynical. But one major reason I'm a believer in decentralized consensus is because I think it can make the silo'd financial systems of the world as seamlessly interoperable as the Internet made the silo'd telecommunication systems of the world.
It feels a lot like when AOL first started supporting email in 1993. It's easy to dismiss AOL and Nasdaq as highly centralized systems that don't align with the ethos of decentralization. But the other way to look at it is a previously maximally centralized system is interfacing with a decentralized one in a way that gives the users of the former slightly more freedom and the latter wider user base and legitimacy.
I think this is a large part of why many Americans in particular don't understand crypto. They already have access to the world's best financial system and all the protections of the state when using it.
Living in Australia and trying to invest in financial markets overseas is like pulling teeth sometimes, because every country has their own incompatible systems and local rules and regulations. And this is a developed well integrated country!
Crypto is the first time we have a global financial system that everyone can join without any one country being able to set the rules and control the system. This is extremely beneficial for countries that don't trust each other to be able to integrate and trade.
Because blockchain, bitcoin and cryptography! You just don't lose money with bitcoin. It's mathematically impossible. Even if you lose money with bitcoin - it's good for bitcoin. It's free currency. Democracy. Bank the unbanked.
I agree this is philosophically unaligned with the ethos of Bitcoin. But it's still fascinating to watch isn't it? SEC Approves an ETF of a digital currency created by an anonymous open source developer(s). When has something like that happened before in software?
Bitcoin exists to solve the principal-agent problem that comes with delegating control of the money supply to singular institutions.
If you look at the history of empires, from the Romans to the Han, it is littered with instances of societal decline as a direct result of inflation and overspending. This unilateral currency debasement is much harder if the collective (and global) definition of money is determined by distributed networks of computers.
Maybe Bitcoin itself isn't the final form, but the fact that distributed systems and cryptography tech is out there means the cat is out of the bag.
Even if your view on the crypto industry is negative, it's important to take some time to understand why millions of people around the world are involved in it. It's not only because of the appeal of ponzi schemes.
"Maybe Bitcoin itself isn't the final form, but the fact that distributed systems and cryptography tech is out there means the cat is out of the bag."
The bitcoiner argument would be that only bitcoin has reached a level of decentralization to survive, and the powers that be stand ready to crush any would-be stronger substitutes before they reach critical mass.
Bitcoin is far too slow and far too energy intensive to ever pose a real threat to a centralized system. I do think there is truth in that the future of currency is decentralized though!
I said millions because of every day crypto usage in countries like Argentina and Turkey, where inflation makes it challenging to save money, and in countries where there are high remittance rates.
More builders are definitely needed to improve the crypto user experience across a range of categories.
If you think that a business can remain in business after its revenue shrinks by a factor of 8 without wage costs adjusting accordingly, you need a reality check.
It is the best asset to hold if you local currency goes -5% every day. Easy to buy (officially and not), easy to liquidate, can be used as unofficial currency for trade
Not by any stretch of the imagination. A highly volatile asset isn't suitable for storing value reliably. This is because the chances of you having to liquidate your position at a loss are very high.
i trade bitcoin with other people here in argentina several times a year; it's by far the easiest and safest way to send money either into or out of the country, and it's widely used by money changers
remember that this is a country where the police take dollar-bill-sniffing dogs onto river ferryboats to prevent people from taking usd or eur across the river to their bank in uruguay
someone in a [dead] comment said, 'The most traded crypto assets in Argentina, by far, are dollar-pegged crypto-currencies.' this is absolutely correct, and from my point of view it's a total plague. also virtually everybody has their bitcoins in binance. but most of those people will still buy and sell bitcoin if that's what you want
We have as many reasons to believe that the legacy of the Roman Empire, through the Catholic Church, still exists today and is a billion people strong as we do why it fell at any one particular day for any one particular reason.
i can't parse your comment, but it seems to presuppose that the roman empire fell on one particular day; there seem to be a lot of candidates, though. which one do you mean
it probably makes more sense to argue that the byzantine empire is the continuation of rome, but in a broader sense, all of human civilization is the continuation of the indus valley civilization
The point being there isn’t a single cause to the fall of Rome and there are even a few arguments that Rome continued in various forms, some of which still exist today.
> If you look at the history of empires, from the Romans to the Han, it is littered with instances of societal decline as a direct result of inflation and overspending.
Not only was the decline of the Roman empire too slow and variegated to attribute to a single cause, "inflation and overspending" isn't even on the shortlist. If we're oversimplifying, it was more akin to the opposite of the sentiment that you're shooting for here: the decline of Rome was due to the erosion of centralized authority, which increased factionalism and caused the elites to at best become apathetic to the plight of the empire and at worst actively pursue its destruction for their own gain, leaving Rome ripe for disruption from without. A blockchain wouldn't have saved Rome.
The Romans were only able to fund the expansion of the empire by overextending their resources. This meant that the empire became too expensive to maintain without relying on tactics like currency debasement, subsequently triggering many of the other symptoms of decline that you listed.
Of course, we aren't living in the Roman Empire today. But what is consistent is that delegating monetary policy to a third party means that they can overspend and inflate the currency base, charitably for reasons of national interest, cynically for their own gain.
The rise of cryptocurrencies like Bitcoin is a sign that many people want to reduce their personal exposure to this.
> The Romans were only able to fund the expansion of the empire by overextending their resources.
No, they never ran out of the resources needed to expand. It just became more individually profitable to spend those resources on internal competition, and eventually civil war, than on growing the pie.
> This meant that the empire became too expensive to maintain without relying on tactics like currency debasement, subsequently triggering many of the other symptoms of decline that you listed.
Even if we take this at face value, that doesn't sound like currency debasement causing the collapse - if anything it allowed them to stave it off at least for a time. Businesses renegotiating their loans/bonds is normally a precursor to going bankrupt, but that doesn't mean renegotiating your loans/bonds causes bankruptcy; if you took your loans/bonds in a form where you can't renegotiate them, that only makes you more likely to go bankrupt sooner.
(Traditional currencies are in many ways like a slightly odd bond that doesn't pay interest)
Also if you want to attribute the decline of Rome to any monetary policy, deflation is much more likely. Periods of deflation in the 4th and 5th centuries led to hoarding and burying of coins rather than productive use of wealth, leading to declines and further deflation. Rome never escaped from this deflationary trap and many of these coin hoards were never dug up.
Ironically bitcoin attempts to replicate this failed monetary policy.
Explain how Bitcoin, which for the next 100 years will continue to print new coins, is attempting to replicate deflation. Maybe inadvertently, by people losing access to their Bitcoins for various reasons, but the design itself certainly isn't deflationary. Not even in its final form, the supply will merely be constant.
Also I find it humorus when people complain about deflation, which pretty much is the natural condition of the world. New techniques and improvements will unenviably lead to products costing less. The problematic factor has always been the current ruling money being controlled by a central authority who will debase it.
Constant supply creates deflation because population/usage increases. You're right that products will cost less - which is exactly what deflation is.
The reason it's because taboo in modern times is ostensibly because it creates a disincentive to investment. Why invest in something that might return 5% with some risk, if your money will be worth an almost guaranteed 5% more in a year anyhow? IMO the "real" reason is because it's a proxy for politics. Governments spending trillions of dollars sends inflation skyrocketing - the US is only slightly guarded against this because of our unique ability to 'export our inflation' - a web search can elaborate more on the term if one is unfamiliar with it. So opposing inflation is largely a proxy for opposing excessive spending which is one of the main political divides, which is odd because both parties spend like maniacs - but one pretends to not want to.
If by creating a "disincentive to investment" you mean a disincentive to gamble their hard earned money on the stock market, then yes. The current situation where (at least before interest rate was somewhat high) the average man had to spend time and effort by going to the stock market with their money is not healthy. You shouldn't have to gamble your money just so it doesn't lose value by merely holding it. Investments will of course still exist, it will just be of a higher quality/yield. Because now there's actually an alternative to "investing" on stocks.
Commodity currency does have a "disincentive to investment" which has a measurable negative effect on the economic climate. This was first identified and studied by Silvio Gesell in the early 20th century, then John Maynard Keynes a few decades later. Removing this disincentive is what ushered in the post-WW2 period of prosperity and growth that we're still living in today.
The part your analysis is missing is that for a commodity currency there is a whole segment of productive, non-risky investments which cannot raise capital in a deflationary environment. If deflation is 5% and a civic works project with an effectively guaranteed 3% return is fundraising, who in their right mind would put money into that? Better to hodl than to invest in your community. There is, btw, a deep tie between this result and Henry George's analysis of the impact of rents, if you're familiar with that.
This basic phenomenon of the risk-free interest rate being non-zero, and its ramifications for the economy, is one of the most confirmed results of 20th century economic research. If you could get the risk-free interest rate to zero, it would boost the economy and lower unemployment with absolutely no ill effects whatsoever.
The USD was a 'commodity currency' up until 1971 thanks to Bretton Woods. It was convertible to gold at a fixed rate, and other currencies were, in turn, pegged to the USD. The idea was to have the stability/security of a backed currency, with the convenience of a fiat one. The security was intended to come from the fact that if the US printed too many dollars, devaluing the USD, then other countries would buy up those dollars and convert them to gold - both making profit, and punishing poor fiscal behavior.
It was a self-protecting system. The problem is it assumed the US would keep to its word. Instead we got everybody hooked on the USD, started printing a bunch of money anyhow, and then just defaulted on our obligations when other countries tried to convert it to gold, and withdrew from Bretton Woods. This led to the famous quote from Nixon's Treasury Secretary: "The dollar is our currency, but your problem."
So you're only looking from 1971 onward. This not only doesn't look especially pretty [1] in countless sociopolitical aspects, but the tremendous economic gains we have seen can also be largely attributed to a complete tech explosion that reshaped the entire world's economy, which we ended up being the natural epicenter of owing to a relatively large population, English being the defacto global language of science, and the fact that we were left entirely untouched by WW2.
The current completely free floating global fiat experiment may end up being the shortest lived economic experiment in our entire history should it turn out that we're just blowing up the mother of all bubbles. And it sure does feel that way!
Hahah, I can see you now furiously searching for 'wtfhappenedin1971 debunked.' Of course there is no debunking it as the site's just a collection of data, primarily from the US government. The data just happens to be quite inconvenient for pro inflation economic arguments.
I actually used to be of the same mindset as yourself, but it increasingly seems to me that the general preference for inflation based economics is much more of a status quo bias than something as strongly supported by data as one would think. There's also a simple logical problem you run into. When you give government the power to freely print infinite money, who do you think they're going to disproportionately direct that money towards?
Recent times actually provide one of the clear illustrations of the problem. Mega corporations take on multi billion dollar contracts from the government at way beyond market rate markups, then the moment the economic weather shifts even slightly they start large layoffs. The reason is not because the integrity of the company is threatened or anything of the sort, but simply to continue maximizing value for shareholders. It's not hard to see how with monopoly money economics you start an exponential increase in many things, like income inequality.
The question was not if Bitcoin overall is deflationary. The comment said it was by design, which it arguably isn't because by design it's actually inflationary.
Once all bitcoin is issued, there will never be any more. That is intrinsically deflationary.
I really don't see how you can argue that bitcoin is inflationary by design when the period of inflation is a temporary necessity for the initial issuance, and then never repeats[1].
> Explain how Bitcoin, which for the next 100 years will continue to print new coins, is attempting to replicate deflation.
The supply of bitcoins is limited. It's harder and harder to print new coins. It means that 100 years from now the new generations will have to make do with 0.0000000000000001 of a bitcoin while people who hoarded just 1 bitcoin 100 years prior would be infinitely rich.
The only incentive in bitcoin is to hold on to it as long as possible. And we've literally seen this already.
You're conflating the consequences of modern and ancient inflation, which were extremely different. In modern times when we want to print money, it just involves a mixture of worthless sheets of paper or even more worthless entries in a database. So we have the luxury of being able to just pull trillions of dollars out of thin air, devaluing all of the other preexisting dollars in the process.
But in the past, money was made of materials that themselves had major value - like silver. And so you couldn't just print more money, because you had to have the valuable resources that it was made of to do so. So the way the Empire dealt with this was by simply reducing the percent of those values. Wiki has a table showing the composition of the Roman Denarius over time here. [1] The original denarius, from the 3rd century BC was 95%+ pure silver. By the 3rd century AD it was down to 5% silver. So the process of printing money in ancient times, ended up making the old money worth more, which is the exact opposite of what happens now a days!
A good analog here is the US penny. We've been debasing it over time, but all the way up until 1982, the penny was made with at least 95% copper. [2] So old pennies are actually worth more than $0.01 in raw materials, which is why it's currently illegal to melt pennies (and nickels) or sell them for their material value. So there are plenty of people hoarding these, waiting for the government to eventually declare them obsolete - enabling them to melt them down and make a large profit. It's a nice investment because your upside is uncapped and your max loss is $0, if you can get them at around the fiat rate.
Now imagine if 225 pennies was a year's salary, as was the case for e.g. Julius Caesar's professional soldiers and Denarii. It creates a huge motivation for hooooold, precisely caused by the government spending. Same today where the more we inflate the currency, the more old pennies become worth.
I don’t think you understood my comment, at all. Debasement in the late Roman Empire was triggered by deflationary conditions. They needed to inject more money and couldn’t (because there literally wasn’t more silver), so they debased it. But why did they need to inject more money? The deflationary spiral I mentioned.
The reason they ran out of money is because they were spending more than they had - and then spending even more, exactly the same as today. That has nothing to do with deflation. For instance one obvious cause is that the Roman Empire kept increasing the size of its military. By the time it collapsed, it had its largest military ever, by a wide margin. Again, table [1] here. Note also that is just nominal forces, it doesn't include the e.g. Barbian forces Rome also began integrating into its military machine to try to keep everything going just a bit longer.
Bitcoin just like capitalism is a horrible failure making life worse for humanity and no proof exists it made anything better. Both accelerate the destruction of the planet and humanity.
It’s ridiculous to claim any of this is good just because you think you have a chance to get some imaginary part of the big cake.
The whole thing is basically parasitic in nature, and would de without and banking system behind it. The value is hiding money, the motivation is mostly committing crime, fraud, etc. The majority is owned by conservative people willing to send us back into feudalism.
Censorship seems to be a property of any system, see the US. To this day, they are so stupid they censor nipples.
Capitalism has its problems, for sure, but it is the only system in history that has raised the majority of people out of abject poverty. Even Marx recognized this, which is why capitalism is a necessary step on the path to Marx's communism.
And of course Marx was seeing capitalism before it had done the majority of the good it has done over the past ~200 years.
I lived in capitalism for 50 years. I’ve seen hyper capitalism reduce or remove education, devalue income and Labor, force people to work two or three jobs to survive barely. That’s in a western society where capitalism is supposed to work.
If anyone thinks the good it did is anything but an accident I expect some people will be really surprised when it turns out how bad things are.
At this point it’s ignorant to not see how much damage it has done. But okay. Keep riding the dead horse.
I apologize if I'm wrong, but "3 jobs to survive" sounds like you're living in the US. I don't think equating the US political and economic system with "capitalism" is particularly useful - it is a capitalistic society, for sure, but it is far from the only one.
The US is, for whatever reason, accepts extremes of both wealth and poverty. Many other capitalistic societies choose a different mix, sacrificing the upper extremes to protect against the lower extremes.
First it giveth, then it taketh away.....Well it's all relative to where and when. From the perspective of someone in PRC, participating in markets and having some form of capitalism helped. Deng literally lifted China out from Up the Mountains down to the Countryside into the cities and into everyones homes. We've just lived long enough to see things deteriorate.
Nothing goes straight up forever, life is stochastic.
Speaking of Bitcoin specifically, if this is your view then you should take some time to understand the severe societal and economic problems that come with persistent deflation. And more generally, determining the optimal level of the money supply to match the needs of a dynamic economy is not trivial — there is no simple formula involving straightforwardly measurable variables that I am aware of.
Bitcoin and BFT consensus primarily solve the principal-agent problem, and give us a better means to experiment.
Personally, I don't think a deflationary global reserve currency is the precise answer, but I do believe that these experiments in monetary governance (like Ethereum's burn and mint model) will allow us to move closer to it.
Bitcoin has no governance mechanism for managing the money supply. If it was adopted as money, governments would have to implement some mechanism to manage the bitcoin supply, just like they did under the gold standard. Therefore it doesn't solve any principal-agent problem.
> And more generally, determining the optimal level of the money supply to match the needs of a dynamic economy is not trivial
No, we don't need some grand wizards in an ivory tower to finely tune the amount of money in the economy, that idea is absurd. The economy has worked fine for thousands of years before they started doing that. In fact, since they started doing it we've seen ever growing boom and bust cycles.
Bitcoin is not a deflationary asset yet. It is a disinflationary asset until around year 2140 (with the rate decreasing every ~4 years and trending towards 0, at which point it will be deflationary).
For now its supply still inflates by ~1.7% a year.
Neither you, nor I will live to see that moment when the last bitcoin will be mined (as long as miners keep mining in our lifetime).
Bitcoin exists as an option to a lot of very inflationary assets (currencies which not that long ago almost reached 2 digit inflation rates) and having different kind of assets should be welcomed in my opinion, as it seems like a good way to diversify the risk you can't "straightforwardly measure".
I like to hold at least one asset for which I can almost guarantee a supply/emission won't change... better yet I can trustlessly verify it. If these propositions are not attractive to you or others, they don't have to acquire this asset either, it is completely opt-in, unlike the fiat money which your government forces you to acquire to pay their taxes.
Uhhh but what about the Keynesian tools we need to get us out of jams that a fixed money supply doesn’t afford us? They apparently worked great the last two crises.
I know, I know… it’s all part of one of Dalio’s big cycles, and I just haven’t seen it play out yet, I’m naive and all that. Bitcoin save us.
When I learned about the limited supply of Bitcoin, I thought, "Great, no more rampant currency printing!" But then they developed the fork technology, which can split one Bitcoin into countless pieces. I guess I underestimated the extent of human greed. Thankfully, it's all digital and our math can handle it.
No, weird that you’re comment is so high up, but shows how little crypto knowledge is around in HN.
A Bitcoin is a Bitcoin, but it consists of smaller units called Satoshis. Like Dollar and Cents. Since the beginning of Bitcoin.
A fork is a copy of the underlying source code of Bitcoin, which in itself has no value at all. You would also need to find people who run nodes for your fork and start convincing exchanges that your fork should be supported too…so no, this is not splitting Bitcoin
If you fork the bitcoin blockchain you have now two ledgers, each one telling you that a certain number of bitcoins really exist. Who is to say that one is right and the other is wrong? In this scenario, it's debatable how many bitcoins are in existence.
You might want to read the Bitcoin whitepaper. There is zero ambiguity in the situation you describe. That is the essence of the proof-of-work (or proof-of-stake, take your pick) solution to the Byzantine generals problem.
> If you look at the history of empires, from the Romans to the Han, it is littered with instances of societal decline as a direct result of inflation and overspending.
There is little evidence to support this. There is an abundance of evidence of empires responding to the crisis of a population overburdened by debt by cancellation, though, if we're going by history to dictate what our current state should do....
Are you saying all those talented individuals who were crypto experts and became LLM/AI experts overnight and promoted both with the same zeal are actually concerned about societal decline and not just schemers? Faith in humanity restored.
I wonder what happens when an unregulated market that can be easily manipulated is connected to a 'normal' stock exchange through instruments like Bitcoin ETF.
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[ 2.5 ms ] story [ 510 ms ] threadhttps://www.sec.gov/news/statement/crenshaw-statement-spot-b...
particularly the section "The Global Spot Markets Underlying the Bitcoin ETPs are Marred by Fraud and Manipulation, Concentrated, and Without Adequate Oversight
Bitcoin "prints" around 1.74% currently and it's going to drop below 1% in April. The USD, although one of the more stable fiat currencies, is worlds apart from that. Looking at official Fed data you can see the base has been inflated by massive amounts just in the past 3 years alone! An increase of way over 60%!
https://fred.stlouisfed.org/series/BOGMBASE
Of course, the fact that the recent spike in monetary inflation coincided with a large hike in consumer prices over the past three years (which working class people have definitely noticed) as well as an asset price explosion, could have just been coincidence ;)
FX rate evolution is linked to many things (and sort of a random walk anyway) - I'd say you typically need quite high inflation/rates to see devaluation in line with uncovered interest rate parity type views, short-term it could also work the other way around at times.
Checkout the book - End Times: Elites, Counter-Elites, and the Path of Political Disintegration by Peter Turchin
Or the HFT engineers producing research and products that speed up general compute, such as accelerating SHA and ED25519 signature verification, so that their trading shops get information faster?
I wonder if there are actually a lot of third-order, downstream effects that society gets by paying engineers to just make computers and telecommunications faster.
There's very good evidence that as the finance sector grows to be a larger portion of the economy (which it very much is compared to 50 years ago) that increasing inequality goes along with it, as the profits made in the finance sector are mostly rent seeking from the rest of the economy. You could also interpret it as a private tax on all other economic activity.
There is some value there, but the cut they get is likely too large already. Then again it is all just fake numbers...
This is why they have to continuously raise money and breathlessly celebrate it on social media and even on this site as if "raising capital" into the Series H is a good thing.
Sorry to disappoint you but it isn't going to stop.
At least with SPACs, they're securities and you can see their finances before you invest. They're also regulated by the SECs and audited.
With the vast majority of crypto, people who start them don't intend for them to be useful. People who start them intend to scam retailers. That's it. They make up a shitcoin, throw flashy parties, spend on marketing, and then sell their shitcoin on retail. Retail knows it's all a scam too but it's a game of musical chair.
Food for thought, when there is currency inflation where do you suppose all the wealth goes and who is it taken from? Here I think we can use the word "take".
US dollar inflation has never been 60% per year AFAIK.
FTFY
But I have a feeling like it will take an incident like the one you describe to happen first before that becomes mandatory.
Expect a shitstorm in case of hack (or lost keys) with these clowns.
Now, that is a very interesting question.
If said ETF did their homework properly, their handling of a fork should be described in detail in their prospectus.
Not that I would ever buy a BTC ETF since it precisely negates what I believe Bitcoin to be useful for, but if I had to, I'd pick the one that would convert the forked coins back to BTC immediately after the fork.
If enough ETFs actually promise to apply this policy in their statutes, that would make it quite a hump to get over for a would-be forker, knowing the immediate price hit the forked coin would take because of the ETF immediately dumping it.
Would it actually be clear which fork is the winning one?
https://forkdrop.io/how-many-bitcoin-forks-are-there
My understanding taken from:
1. https://www.nasdaq.com/articles/bitcoin-etf-hurdles%3A-cash-... "In the event of a fork diverting from the main chain, trusts associated with the ETFs are expected to relinquish any entitlements."
2. Grayscale prospectus, https://www.sec.gov/Archives/edgar/data/1588489/000119312524...:
> Shareholders will not receive the benefits of any forks or airdrops.
> The Bitcoin Network operates using open-source protocols, meaning that any user can download the software, modify it and then propose that the users and miners of Bitcoin adopt the modification. When a modification is introduced and a substantial majority of users and miners’ consent to the modification, the change is implemented and the network remains uninterrupted. However, if less than a substantial majority of users and miners’ consent to the proposed modification, and the modification is not compatible with the software prior to its modification, the consequence would be what is known as a “hard fork” of the Bitcoin Network, with one group running the pre-modified software and the other running the modified software. The effect of such a fork would be the existence of two versions of Bitcoin running in parallel, yet lacking interchangeability. In addition to forks, a digital asset may become subject to a similar occurrence known as an “airdrop.” In an airdrop, the promotors of a new digital asset announce to holders of another digital asset that such holders will be entitled to claim a certain amount of the new digital asset for free, based on the fact that they hold such other digital asset. We refer to the right to receive any benefits arising from a fork, airdrop of similar event as an “Incidental Right” and any such virtual currency acquired through an Incidental Right as “IR Virtual Currency.”
> With respect to any fork, airdrop or similar event, the Sponsor will cause the Trust to irrevocably abandon the Incidental Rights and any IR Virtual Currency associated with such event. As such, shareholders will not receive the benefits of any forks, and the Trust is not able to participate in any airdrop.
> In the event the Sponsor seeks to change the Trust’s policy with respect to Incidental Rights or IR Virtual Currency, an application would need to be filed with the SEC by NYSE Arca seeking approval to amend its listing rules to permit the Trust to distribute the Incidental Rights or IR Virtual Currency in-kind to an agent of the shareholders for resale by such agent. However, there can be no assurance as to whether or when the Sponsor would make such a decision, or when NYSE Arca will seek or obtain this approval, if at all.
> Even if such regulatory approval is sought and obtained, shareholders may not receive the benefits of any forks, the Trust may not choose, or be able, to participate in an airdrop, and the timing of receiving any benefits from a fork, airdrop or similar event is uncertain. Any inability to recognize the economic benefit of a hard fork or airdrop could adversely affect the value of the Shares.
Here's a list of 45(!) Bitcoin forks and 11 airdrops that have happened so far: https://forkdrop.io/how-many-bitcoin-forks-are-there
What happens when the fork snapshotted the chain at some arbitrary point in the past such that it's not possible to match it up with ownership of the ETF?
There have been 'forks' of altcoins made where the 'official' software was expressly backdoored. They even lead to some fringe exchanges being robbed.
There was a brief flurry of forks when exchanges felt compelled to list them-- they were a way for altcoin creators to avoid the huge listing bribes demanded by exchanges (which also has made it so that only premined altcoins are viable to create anymore)... but after exchanges decided to stop listing them (and esp Archer v Coinbase established that exchanges could just keep the fork coins, if that was their policy) most of the fork creation stopped.
(somewhat to my saddness: diligently dumping fork coins made me a lot of money...)
Earlier discussion from 2017, when customers wanted to sue Coinbase for keeping the Bitcoin Cash (BCH) fork corresponding to their deposits:
https://news.ycombinator.com/item?id=14910822
I remember Gemini crediting me with my BCH eventually. (Unfortunately, long after the peak to $4k.) LocalBitcoins gave some classic BTC credit to make up for it.
Some silly analogies I made: https://news.ycombinator.com/item?id=14913261
I believe that fears of a similar situation are what led a lot of people to temporarily pull ETH off of exchanges and out of smartcontracts over the time of the ETH switch from PoW to PoS, as that spawned another fork.
Yeah I know what you mean, although one competitive advantage of the fund is it can be invested in a tax-free savings accounts not subject to capital gains tax (I haven't seen a practical way to do the same with the raw commodity).
But is there actually a difference for pure buy-and-hold investors in most jurisdictions?
I know of at least one jurisdiction where an ETF is actually disadvantaged against physically holding cryptocurrency.
This seems unlikely.
Many TradFi custodians ignore/do not support (publicly) forks of client assets held, sometimes just until they reach some arbitrary level of social traction.
Mate that isn't how it work. If Coinbase or Fidelity don't recognise the real blockchain then they no longer have real bitcoin, they have a forked coin (because they are not on the true bitcoin chain). The Bitcoin chain is determined by consensus of the majority of miners/nodes (not bitcoin holders!) and if they break from that they now have a substantially devalued asset (look up the price of BCH and BTG these days).
You seem to be under a misapprehension that owning the most bitcoin gives an institution or individual power over the network. It does not.
Bitcoin, by definition, cannot exist on two separate chains. If an institution attempted what you are saying all they will have done is reverse alchemy: turned gold (bitcoin) into lead (an unrecognised chain with no mining occurring, no recognition by nodes etc).
again, the cheerleaders who might know math (usually not even that) forget about the ruthless of business
https://www.investopedia.com/terms/1/51-attack.asp
> forget about the ruthless of business
Noone has forgot a thing just aren't clowns like you who think businesses are some substitute god who can't be beat. Fidelity doesn't "hold" the transactions. Transactions to be relevant MUST be broadcast to the network and if this doesn't happen then the blockchain plods along as if they didn't happen.
Honestly, learn a bit more about how this stuff actually works before commenting.
I have read this comment five times, and I simply cannot make heads or tails of it.
What is "THEIR fork"? If there's a fork, everyone has keys which underpin addresses on both forks. How do you know which fork belongs to "fidelity et all"?
And more importantly, why is that relevant? Isn't the longest chain the only determiner of canon? Or has that changed recently?
They just sold the coins on the inferior chain and gave a one time dividend.
if the law was iffy for freaking banks then, imagine how it is for btc
Pays out in what though?
https://www.linkedin.com/pulse/day-163-zubair-2015-bitcoin-p...
My timeline for when things will happen in Bitcoin were way too optimistic though :)
Ther Trust itself would be a target of cyber crime and could try to pursue the thieves through Computer Abuce Act(s) around the world.
These two happen independently of each other.
and the SEC thinking about appealing but realizing this absolutely based SCOTUS would delete the SEC like Thanos if they ever get taken beyond circuit appeals court by the private sector
markets win
[EDIT]: looks like no, saying "a based judge" actually has meaning in English.
regarding whether Congress even delegated that discretion to the SEC whether the 7th amendment circumvention stands or not
and regarding whether their in-house, on-staff, judges can be exempt from removal
there are plenty more deeper questions to bring before the supreme court, about this specific agency. this SCOTUS has expressed interest in taking out the remaining vestiges of the New Deal, which were mostly found unconstitutional in the late 1930s, with the remaining things simply being difficult to find standing for - hard to take to court. The SEC's main behaviors being one of those things. this SCOTUS has expressed interest in how the interstate commerce clause is interpreted at all, which is also a core tenant of the New Deal. Could possibly reshape our entire relationship with the Federal Government. The SEC would take the biggest L while the capital markets would be fine.
Now a lot of people here will be investing in Bitcoin without even knowing it, as their passive fund investments begin accumulating. The sweet victory against the no coiners.
That’s a shame :( computer graphics is a very interesting topic and I always love to read things about it
https://www.linkedin.com/pulse/reflexive-negativity-jess-mac...
Those on HN who believed that such a complete ban on crypto was feasible were always delusional. The cat is out of the bag for both AI and crypto, but in the end, the legal system always gets them to pay up and the regulators for both AI or crypto will get them as well.
No escaping that.
So, as is the case with any meaningful investment, you have to ask "cui bono?" with cryptocurrency. Very plainly, you're risking normal money on a venture that doesn't promote anything other than greed and black market transactions. The hackers on this site will oppose it in favor of information freedom and a less money-influenced internet, and the greedy bastards will oppose it because they'd prefer one party owns everything from the start. It's a nuanced situation with lots of different people, good-faith or not, who will oppose or support cryptocurrency for the wrong or right reasons. It's straightforward and non-predatory to say that most people are better off keeping their pay-stub out of the alternative currency market.
You could quite say the same about any privacy or encryption or really anything that protects you from a centralized entity taking your rights/property. It’s a bit absurd that people are really that blind that they think this is all there is to crypto. Your same logic would apply to dollars in that case as well.
Ideologically I'm not opposed to Bitcoin or the idea of it existing for the base it serves. It's too volatile to suggest for serious investment though, and it's reached an uncomfortable echelon of "nerd joke gone too far" for my taste. Real people do not need to waste life-hours learning about this when their local government invests in a clear and immediately fungible form of currency for them already. Investors should not be wasting life-hours learning about a perpetually-irrational investment when other industries are both safer investments and arguably more innovative.
> Your same logic would apply to dollars in that case as well.
It would, mostly. Most people who oppose the online adoption of crypto probably object to the same level of microtransaction in any currency.
But the amount of hubris and preoccupation about this here on HN is really something else. I've long learned not to try to engage in any kind of serious discussion about possible interesting aspects.
Additionally, there are a lot of companies on HN that will try to sell you a terminal in an Electron webview for $9.99/month. Users on HN have to be diligent, so a lot of people will lash out against benign technology. Some of them probably also correctly identified scams and ran their owner out of town on a rail. That might be hubris, but I more think that both the investors and the inventors on HN are tired of reading "Yet Another Money Solution" after 10+ years of watching the old one collapse.
It's not just crypto though, the same saturated dullness is shining through in other discussions as well.
If you try to help them understand, you're generally attacked as if you are shill, and then they continue along in their ignorant bubble. It's a shame, but their attitude isn't conducive to me losing any sleep.
You buy bitcoin at the price you deserve.
I think Bitcoin is one of the many way that the economy is rigged against economically insecure retail investors. The more money that gets funneled from the middle class into Michael Saylor and crew's pocket the closer it brings us to civil war.
Checkout
End Times: Elites, Counter-Elites, and the Path of Political Disintegration by Peter Turchin
https://www.amazon.com/End-Times-Counter-Elites-Political-Di...
I highly recommend reading "The Creature from Jekyll Island" which explains everything that's wrong with central banking/fiat currencies and will help you understand the devastating effect it is having on the world.
Sure, there is a transfer of wealth while bitcoin is monetizing. But you buy bitcoin at the price you deserve. Michael Saylor deserves everything he's going to get. He's a visionary with balls of steel - he's laid it all on the line. If you try to avoid making bitcoin whales richer by not buying bitcoin, you'll simply be cutting off your nose to spite your face.
Proof of work is enormously socially valuable and will change the world. Bitcoin may not be the PoW application to do it (although it also might be) but proof of work is here to stay because of the huge advantages it has over the existing system where individuals/institutions insert themselves between transactions to their own profit.
RE energy, not here to argue philosophy. Just going to point out that if that is your concern luckily the world is going over to renewables so that particular objection will be gone soon anyway.
This is dangerously missing the peril of the current situation.
The problem with our current energy makeup is not "there's not enough renewables".
The problem with our current energy makeup is "there are too many carbon emissions".
As a first-order effect, it does not matter how many renewables we bring online. What matters is taking fossil fuels offline. It does not matter if renewables make up an ever-increasing percentage of an increasing energy market, because the problem is not the relative market share of fossil fuels, it is the absolute amount of emissions, which is already more than our planet can handle. And the increasing demand for energy makes taking fossil fuel plants offline less viable than it otherwise would be, and bitcoin is a nontrivial component of that and it threatens to grow at an exponential pace, which makes it an existential threat to mankind.
Please trust me when I say that I do not give a damn about the price of bitcoin. What I care about is stopping runaway energy consumption, and from that perspective proof-of-work is the biggest existential threat to humanity since the atom bomb.
Mate, this is ridiculous.
Global energy usage was 179000 Twh (terawatt hours) in 2022. (https://ourworldindata.org/energy-production-consumption)
Bitcoin energy usage was at its highest in 2022 at 200 Twh. (https://www.statista.com/statistics/881472/worldwide-bitcoin...)
So 200/179000 * 100 = 0.11%
Bitcoin energy usage accounted for 0.11% of global energy usage and you think it is the biggest threat to humanity since the A-Bomb? Bitcoin is entirely irrelevant to the grand scheme of things re climate emissions.
So you are wrong on this point:
> bitcoin is a nontrivial component of that and it threatens to grow at an exponential pace
Bitcoin IS a trivial component of overall emissions and even with an insane ramp up would not be close to being the biggest issue re emissions.
GP already explained why he thinks that and you did not spend a word addressing that. Here is what GP said:
> The reason that bitcoin's energy usage is a philosophical nightmare is because it's a system where energy consumption is the product. As opposed to industries which are "merely" energy-intensive, let's take aluminum refining for example, spending more energy to refine aluminum does not create more demand for aluminum, but spending more energy on bitcoin increases the price of bitcoin, which induces more demand, which increases the price, which incentivizes mining, which costs more energy, and so on in a vicious cycle.
Basically, for BTC to "go to the moon" its energy consumption must also "go to the moon".
> The reason that bitcoin's energy usage is a philosophical nightmare is because it's a system where energy consumption is the product.
False. The "Product" is a permissionless global peer to peer financial network using a (relatively) non-depreciating commodity. Energy consumption is a side-effect of providing this product/service. I'm sure if you thought about it for a bit you would have to agree here. Noone is mining bitcoin for the sake of it, they are mining it for profit and the only reason bitcoin has value is other attributes of the network/commodity itself. So not a good start from OP.
> As opposed to industries which are "merely" energy-intensive, let's take aluminum refining for example, spending more energy to refine aluminum does not create more demand for aluminum, but spending more energy on bitcoin increases the price of bitcoin, which induces more demand, which increases the price, which incentivizes mining, which costs more energy, and so on in a vicious cycle.
This is factually incorrect and easy to see why. Here is a link to an overlapping chart showing the hashrate for bitcoin against the market cap (https://bitinfocharts.com/comparison/hashrate-marketcap-btc....). You'll notice the lack of connection between the market cap (overall price) and the hashing rate. This is an empirical fact based on the data we have so op is wrong once again.
It is true that price increases do incentivise more mining but the price increases aren't DRIVEN by increases in the mining. Otherwise it would be possible for anyone anywhere to spin up bitcoin farms and make guaranteed profit because the price would rise to a level commensurate with the energy expended. It is the other values of the network (peer-to-peer permissionless decentralised finance with an eventually depreciating commodity) that drive the price. Those are being priced by the market currently and more and more people are deciding to store wealth in the Bitcoin network as opposed to the Fiat network or other assets like property/gold/etc because they feel it gives a better combination of:
1. Store of value (or possibility for profit)
2. Functionality
Bitcoin mining is very often not profitable if you don't have cheap energy or do it collectively which is why it is moves around so much to find cheap energy sources (often using the cheapest forms of energy available which is burn off/extra gen that has no otherwise in grid) and miners pool to take a portion of the gains from mining the next block and getting the bitcoin that come with it.
OP's view of Bitcoin and proof of work is a very slanted one at best, completely factually inaccurate at worst.
Using energy is not an issue, it's how we produce it that matters. This applies to all forms of energy use of which bitcoin is just a tiny fraction.
Bitcoin will not compete with current energy demand which is geographically constrained. Bitcoin miners can operate at any location in the world and are incentivised to use free, unwanted, waste energy. Any miners that try to increase the demand of current energy supplies will be uneconomical and go out of business.
Also miners using more energy does not directly increase the price of bitcoin. Ultimately the amount of (otherwise wasted) energy used by the network will be limited by the transaction fees which are a free market.
Even today, gold miners are working to dig up their proof of work which they can sell into the market. If the work they did was worth more than the gold they found, they'd stop. And if was worth less, more miners would mine, increasing the supply and devaluing the gold.
The only difference with bitcoin is that the work is abstracted. It's simply anchoring the creation of a digital token to work in the physical domain. At the same time, the work performed is protecting the network from attack - it's what makes the blockchain immutable. The work is not wasted - it is being stored as "walls" on top of each block. The further down the block chain you go the more walls of protection you would have to break. It's breathtakingly beautiful.
You're also missing that bitcoin's game theory means that it will ultimately only use unwanted/wasted energy. Bitcoin miners can mine anywhere in the world and those trying to use energy that's in demand by the general population won't be economical.
Are we about to find out why, or do I have to pay for your memoir to understand? I've been dying to hear you expand on this for a while now.
It is. Mining is literally bruteforcing…
This is out-of-touch on so many levels. What about people born in ten years? What about people born in ten years in developing countries? The only thing crypto“currencies” have done is increase the wealth disparity and greed.
https://www.cynicusrex.com/file/cryptocultscience.html
Regarding developing countries, bitcoin provides anyone with a phone access to a bank, and one that offers better savings accounts than any fiat account.
Alternatively wait until every man and his dog already have it and the price has stabilised and it's a no brainer (say 10 or 20 years)
You buy bitcoin at the price you deserve.
Good luck buying WBA stock at a higher price in the future!
Authorizing Bitcoin ETFs does absolutely nothing to revolutionize payments or finance, and is the only positive crypto story I have seen in many months.
OP's point wasn't about preventing decentralized benefits, I believe they were saying the ETFs don't help them in any way.
Also, no one is going to end up accidentally investing in crypto, these ETFs are going to be super niche products.
For those young enough (or foolish enough) to operate a high-risk/high-growth retirement portfolio, holding crypto can be a large boon. Just the past 365 days of BTC has 162% increase in value.
Most of funds by AUM are now passive index funds.
For the very same reason that (for example) pension or union fund managers can't just allocated x% of their portfolio to blackjack or rolling the dice.
Crypto is still INCREDIBLY high volatility and high risk. Crypto is also a pretty shitty instrument with regard to hedging, as they all follow the same movement.
Mitigating risk in crypto is very much a hands-on job.
This fight only exists in your head.
There is shamir secret splitting, multisig, MPC, secure enclaves with biometerics, etc...
There will be apps like Fuse wallet: https://www.fusewallet.com/
There will be phones like Saga: https://solanamobile.com/hardware
I think how one handles their wallets will be much like how people make their espressos. Some will just stick k-cup in a machine and hit a button, others will become full-blown coffee enthusiasts that carefully measure their beans, de-static their grinds, and extract for the exact right amount of time.
That's absolutely out of the question for almost any human being, especially given the timeframes involved.
> There will be phones like Saga [...] There will be apps like Fuse wallet: [...]
Again, we're talking about a timeframe of decades. How many of these will even still boot up after that amount of time? None of these seem safe to just throw in a bank safe deposit box.
> make their espressos. Some will just stick k-cup in a machine and hit a button
I'm really not a coffee connoisseur by any meaning of the word, but even I know that what comes out of a k-cup machine is brewed coffee, not espresso.
The ETF is probably the equivalent of this "espresso style" k-cup https://www.keurig.com/Beverages/Dark-Roast/Espresso-Style-C...
No, that's his passphrase
You die, your heir or executor takes the appropriate paperwork to the bank, and then they get the contents of the box.
Many banks don't offer them anymore, and in some countries they have a disturbing tendency of getting robbed, with absolutely no recourse for the depositors (since contents are usually unverified and uninsured).
If your threat model includes someone inside your home with power tools and you can’t trust a bank… you might want to consider moving.
Many people don't own a home. Not all of those that do want to expose themselves to the liability of storing valuables there. The safety situation between homes even within the US varies greatly, and even more so internationally. Banks with safety deposit boxes aren't ubiquitous.
If it works for you, great! I'm just saying that you might be in the minority here.
"Why is Bitcoin a great asset?"
"Because its the future of currency! Its great and everyone will use it!"
"Then why don't you just get it directly?"
"Uh, its too much of a hassle. For me. A professional finance worker."
This is actually a great comment that I think applies well to the crypto world as a whole, even if that wasn't your original intent.
Frankly we could probably get our rock ETF's approved more quickly. Regardless of how you feel about Bitcoin, it's not (or shouldn't be) the SEC's place to play nanny and dictate the particular assets/commodities/etc. in which you're allowed to invest your money. Incidentally even one of SEC commissioners agrees https://www.sec.gov/news/statement/peirce-statement-spot-bit...
But I agree with the fact it’s not the SEC’s role to tell us the merit of btc. I do have some worries on the Tether scam still going on for example though, which has been manipulating BTC for years.
Now Tether owns tons of money, and can buy treasuries that bring few % of interests, and these interests are not paid back to USDT holders.
As a result, overtime, they'll be able to fill-in any potential gaps or money accidentally lost.
Edit: spelling
Also, limited in number and scarcity only partly define value. In addition to these properties, other people must agree with you.
If your flat rocks are scarce and people want to invest in them, by all means…
Of course the ability to hit "buy now" in the same marketplace you manage all your other investments is pretty low friction and I'm sure this decision will bring fresh investment out of the woodwork.
The EU (higher population than the US) has had Bitcoin ETFs for a while now.
Anyway, digital gold is still better than nothing. It's still an innovation as a store of value, even if the payments idea is basically history (some Bitcoin maxis just don't understand that yet). Also Bitcoin has inspired a whole ecosystem of other blockchains. If you want the original concept of a peer-to-peer electronic cash system, Monero is probably one of the best to check out currently. Governments are btw currently going after Monero, because unlike the common myth about Bitcoin, it actually enables anonymous payments - just like cash. And so of course we can't have that. Multiple exchanges already announced they were forced to delist XMR.
The aesthetic and industrial applications of gold are what makes it intrinsically valuable - that being the key distinction, and distinct from Bitcoin. If you ignore the useful aspects, of course it's no different from any useless thing.
Eh, I think you actually might! Hell, you said it yourself - the mob always wins in the end. It doesn't matter what Satoshi made, the mob took it and made it into something else. It's what Bitcoin turned into that HN is collectively cynical about.
Ignoring that this idea was mocked by many from the start for reasons we can only speculate about, it seems there's a lot of confusion about what Bitcoin currently is as well. Mocking the idea that poor people in Congo will be saved by Bitcoin - sure. Making fun of laser-eyed Bitcoin maxis telling you we'll all totally use Bitcoin for payments (have you heard of the Lightening Network bruh?) - of course, I joke about them too.
But what you have is the first time in the history of the planet that there is a public ledger that can be used by anyone, transparently and permissionlessly, to store and transfer value. It's not in the hand of any bank or government. Nobody can freeze your account because you're fully in control. You can run your own node to push transactions if you wish to. It can absolutely not be falsified, unlike cash or book money. This is still extremely valuable. Especially when you add programmability, which Bitcoin only has in a rudimentary form, but other "smart contract" platforms already do much better. Because now you can automate transactions and those transactions don't necessarily have to be about money.
It might be funded by intel agencies for all we know.
You ask the question and then proceed to answer it.
> Satoshi [...] gave a gift to the world, but it sadly got co-opted [...] In hindsight it was probably bound to happen, because money buys influence
Because anything of value and fungible will invite exploitation by monied interests.
> and taken over first by small-time grifters and now by the big boys at Wall Street.
There is ample evidence to indicate that the predominant grifters are not small-time operators.
Time to full send my retirement accounts into these ETFs so I can retire early. /s
Actually though I might consider allocating a tiny percentage (1-3%) to these. Seems like fairly low risk with enough upside, but who knows.
Edit: after further research it appears that the cash create mechanism doesn't cause a tax event for shareholders as it does with mutual funds. See https://www.grayscale.com/blog/legal-topics/addressing-poten...
We will have to see how every Bitcoin ETF is structured. YMMV depending on this structure and how you get taxed.
The likes of Blackrock could use BTC as a hedge if the Feds keep on printing USD under political pressure.
Try moving $10M of gold from one end of the world to another for under $100
Think about it, running an exchange has costs. I really don't understand how people can be so easily tricked by "free" offers that are actually more expensive when you do the math. PFOF (i.e. legal theft), unfavorable spread, etc... They get their money one way or another. It can technically make sense when you're trading something like $50 worth of a stock, because of course that would not be reasonable with a brokerage using a traditional fee structure. But frankly trading such low figures is silly. You have to invest a lot of time (=money) in research when stock picking, else you're guaranteed to lose sooner or later. But the reward simply isn't there. Even if you make 100% profit you now have $100. Better put that money into an index fund savings plan and forget about active trading. You're guaranteed to receive a better reward on your investment just getting a part time job selling fast food or something like that.
In crypto, the margins are much wider than in any traditional financial services, which rely on volume and wide adoption!
The great thing about cryptocurrency is you can trade it any way you like. You can take your tokens in self custody. You can in theory trade with a random guy on the street, without any third party involvement and with zero fees. I know a guy who does this because he's worried about a coming police state, so he buys everything with cash during meetups.
I think the high fees CEX are currently charging, which you're right about, has multiple reasons. One is it's a completely new and largely unregulated space. There are a lot of risks, they need to set aside a lot for litigation. FTX had very low fees for example while stealing customer funds to lobby Washington ;) Coinbase is legit but has to spend a lot on legal fees and compliance, because they're in it for the long run. Also a huge part of the reason is surely simply because they can. Crypto traders are making so much money that they're more likely to accept paying high fees than the average stock trader. That won't last forever, it's just because the market is new and volatility is crazy.
I was reading a book about that recently, it boils down to: "You're not [just] the customer, you're [also] the product."
Key term: Payment For Order Flow (PFOF) [0], with the book-paragraphs I was thinking of down below:
____________
> Retail investors have one hugely attractive property when considered by a professional – they’re dumb money. Not only are they unlikely to have private information, a lot of the time they haven’t taken care to consider all the public information. When the party on the other side of the trade is a small investor (or a lot of orders from small investors all over the country, ‘bundled’ by a retail stockbroker), you can be reasonably sure that you’re not taking too big a risk that the person selling stock to you knows something about it that you don’t.
> This makes retail orders very valuable to the market. One of the reasons why stock brokerage commissions are so cheap these days is that retail brokers have actually realised how valuable they are. They charge a quite substantial fee to players like the high-frequency traders for the privilege of dealing against their order flow, and they rebate some of this fee to their customers. But the retail orders would eventually dry up if the customers lost too much or felt that they weren’t being given a fair chance. And without a steady flow of ‘dumb money’ lubricating the wheels, the professionals would find it a lot harder to trade, as they’d always suspect each other’s motives for buying or selling.
-- Lying For Money by Dan Davies
[0] https://www.investopedia.com/terms/p/paymentoforderflow.asp
/s
Note that the transfer of monetary value/energy is final settlement (i.e. it's not just an IOU that will be settled at later date, like most bank payments).
Ultimately the base layer network will be used for settlement between banks, national reserve asset/currency etc. and faster, cheaper payment rails will be built on top of it (e.g. the Lightning Network)
The fact is that Bitcoin is very likely to absorb a vast percentage of the worlds value simply as it is. Once this has happened its value will stabilise and it will become useful as a unit of account/day-to-day currency. By this point, there will be far more motivation to focus on developing solutions (such as Lightning) to allow smaller and faster transactions.
You present this as a fact, but the actual valuation of Bitcoin doesn't seem to support this claim. John McAfee bet (and proverbially lost) his testicles on broad estimations of Bitcoin's continued growth. Without extraordinary evidence, you can't make claims of extraordinary provenience.
> there will be far more motivation to focus on developing solutions (such as Lightning) to allow smaller and faster transactions.
If you need an L2 transaction layer to solve an issue inherent to an L1 chain, you're kinda just admitting that the base layer is flawed. Why use Bitcoin at all if we need mediators to settle regular transactions?
The "we'll fix it later" mentality works for shitty altcoins that have nothing to lose by reinventing themselves, but I'm not convinced Bitcoin can change. I was mining Bitcoin about a decade ago now, hearing people say "Lightning will work soon" or "a good interchain bridge will exist eventually" in 2024 leaves me convinced nothing has changed. It's a race between the economics and the technology to see which becomes outdated first.
On a similar note, TCP is an admission that IP is flawed. And HTTP is proof that the entire networking stack is a scam.
Clearly, any decent networking protocol would handle any and all information interchange anyone could ever need.
The fact that HTTP is on its third iteration, and it’s still built in top of the same Internet Protocol from 1974, proves that _nothing_ has changed. /s
Unlike the OSI model, Bitcoin's solution to finance is not modular or all-encompassing. If it's not going to adapt to modern demands, it will get replaced. There's no point in keeping around a financial solution that is impossible to fix when it breaks.
Your prediction for the future that a ledger with the throughput of a 28.8 modem will absorb the world's value is "fact"?
By this point, there will be far more motivation to focus on developing solutions (such as Lightning) to allow smaller and faster transactions.
It has been in the works for a decade and no one wants it. Why would someone use that when any other cryptocurrency (except for ethereum) already do small and fast transactions?
https://bitinfocharts.com/comparison/transactionfees-doge-lt...
Yes, the base layer network is ideally suited for storing extremely large amounts of wealth, for large amounts of time. No other asset has qualities that come close, they all leak value compared to bitcoin.
Are you copying some talking points or can you explain on a fundamental level why you believe this?
As far as clones. Network effect takes care of that. They would have to be substantially better than bitcoin to beat it and that is extremely unlikely to happen as bitcoin is close to perfect.
You realize that ethereum already surpasses bitcoin in transactions and litecoin and even dogecoin do too right?
https://bitinfocharts.com/comparison/transactions-btc-eth-lt...
Also you still haven't linked where you are getting these ideas. When you believe in predictions of the future with no evidence and no possibility in reality, that's called religion.
Bitcoin refuses to increase their throughput and at the current rate, everyone on earth gets a single transaction every 50 years. What part of this actually makes sense to you?
First off, the transactions on the main bitcoin network will be the largest transactions in the world. All the smaller transactions will take place on different bitcoin networks. Lightning is a decentralised example, VISA and Paypal are centralised examples.
This sounds like you have been soaked in /r/bitcoin propaganda. You realize that subreddit is completely censored so that anyone who goes against the narrative of more throughput or the absurdity of the lightning network gets banned right? Try going there an questioning the common narrative to experiment for yourself then see what happens.
You aren't confronting why anyone would do what you're saying. Why would anyone transfer money onto a network where they have to pay huge amounts of money to move it around? What problem does that solve? It isn't like people can't already move money around much cheaper than a bitcoin transaction.
The lightning network has been promised for over a decade now. No one uses it because you have to make a little cluster of transactions that have no impact on the actual chain until you pay the enormous fees. That's like a little village coming up with their own currency of swapping IOUs with everyone else and not being able to use their money until they pay $12-$37 to convert it something Other people will use. If your IOU is less that the transaction amount, it's frozen. It's an absurd idea that no one wants.
Most of all you aren't confronting why anyone would put themselves through all this when they could either use traditional finance or other cryptocurrencies. Bitcoin is right now useful for and used for only speculation and nothing else. Knowing that why would anyone put their money into unless they were speculating on it?
https://bitinfocharts.com/comparison/transactions-btc-eth-et...
Ultimately, I see Bitcoin as Gold. You do not touch your gold savings for buying your daily coffee. For that, you have USDs in your wallet. But you still transact with Gold once in a while when it makes sense.
Indeed it is crazy. Who is advocating for that though?
Lightning network fees are negligible. So that argument doesn't hold either.
Every lightning transaction is just a regular bitcoin transaction that could be posted to the chain at any time-- you just don't have to, because the scripting functionality has been used so that if a counterparty posts an earlier state you can effectively cancel it.
The switch to deferring updates unless there is a dispute gives a massive advantage to scaling (e.g. number of tx per second possible goes up the more users there are rather than being a global constant), instantaneouness of transaction irreversability (as fast as the involved parties can make a couple round trips, vs an hour for multiple confirmations), and potentially privacy (since not every update is globally broadcast). But these benefits come at a considerable cost of requiring a degree of active monitoring so if a counterparty posts an outdated state your software can respond, along with additional software complexity, etc.
For some applications the benefits are well worth the costs, for others they aren't.
To say it's not bitcoin is like saying multisignature transactions aren't bitcoin. In both cases they're ways of using the existing functionality. In both cases they require some additional software and different approaches. In both cases they use functionality built into the protocol which was intended for their purposes (payment channels being a concept originally described by Satoshi, and specifically accommodated in the transaction format). And in both cases they change the tradeoff surface somewhat.
Gold has considerable storage/security costs compared to Bitcoin.
Gold has considerable fake risks/costs compared to Bitcoin.
The supply of gold is continually inflated by mining (also true for Bitcoin though the mining rate in bitcoin decreases over time).
> if the Feds keep on printing USD under political pressure
Have you looked at the economy in the last two years? The Fed has been burning USD at an unprecedented rate!
Access to a risk-free investment vehicle that preserves your purchasing power perfectly across decades is not a universal right.
Try the last 3 years. Or last 4. Or last 40 years.
They are desperately trying to control money printing (oops sorry, quantitative easing) with high interest rates, but I'm sure they'll be forced to bend to political pressure in an election year.
U.S. needs an extremely tight monetary regime for two decades, to be viable long term. And the big funds will hedge. BTC is one of those hedges.
For those parties, bitcoin's general properties are not very relevant and a centeralized list maintained by DTCC may well better serve their particular needs. To the extent that it does: more power to them!
as far as having an actual historic or present day use case, blockchain snake oil is still in search of a problem only it can solve to this day
https://bitinfocharts.com/comparison/bitcoin-transactionfees...
High BTC fees impede the Lightning Network from being a true scaling solution, an obvious fact that has been dismissed for many years by adherents of absurdly small block sizes.
There is no technical reason to do this, it was purely a political propaganda based move.
Before you respond with "but disk" or "but network" or "but cpu" look at the actual bitcoin throughput (about 700KB every 10 minutes) and look at how much hard drive space you can buy for the cost of one transaction. Then realize that individuals don't even need to sync with the chain to use cryptocurrencies. This is a well worn road.
Also, bank transfers aren't cheap. For example, in Costa Rica, to transfer any amount from an account in bank A to another account in bank B, you pay a fee in the range of 1$-3$, irrespective of the transferred amount. If you consider transfer across countries, then you enter into 50+$ transfer fees.
https://bitinfocharts.com/comparison/transactions-btc-eth-do...
https://bitinfocharts.com/comparison/transactionfees-doge-lt...
https://en.wikipedia.org/wiki/Executive_Order_6102
Incidentally: When you look at currencies (and governments) on long enough time scales, you'll see that they're pretty ephemeral -- e.g. very few currencies or governments around today were around in (roughly) the same form 200 years ago. I consider it a benefit that we might have a way of persisting wealth that doesn't involve rent extraction or digging shiny metal out of the ground -- though I admit to not being a fan of the "wastefulness" of PoW in the midst of energy decarbonization.
If you want a fun watch: The History of Paper Money on Youtube is a fascinating look at how currencies, banks, central banks, and fiat money all came into existence. TLDR: Our "modern" approach to money was a giant "too big to fail" ponzi scheme largely perpetrated (multiple times) by John Law. Wild.
https://www.youtube.com/watch?v=-nZkP2b-4vo
https://news.ycombinator.com/newsguidelines.html
Btw I know comments like that are fun when talking to friends or whatever. We just have that guideline because of how they influence discussion on a large internet forum...not for any ethical reason or anything like that.
> Though we’re merit neutral, I’d note that the underlying assets in the metals ETPs have consumer and industrial uses, while in contrast bitcoin is primarily a speculative, volatile asset that’s also used for illicit activity including ransomware,[4] money laundering,[5] sanction evasion,[6] and terrorist financing.[7]
You can find how this was addressed in the approval:
> See, e.g., Kling Letter (stating that the bitcoin futures price is beholden to the spot price, and the spot price has always been, and continues to be, manipulated by bad actors); Better Markets Letter I at 2 and 4-9 and Better Markets Letter II at 4-6 (stating that spot bitcoin ETPs are extremely vulnerable to manipulation by bad actors because spot bitcoin markets (1) have a history of artificially inflated trading volumes due to rampant manipulation and wash trading, (2) are highly concentrated, and (3) rely on a select group of individuals and entities to maintain the bitcoin network); Letter from John Palmer, dated Aug. 11, 2023, regarding SR-CboeBZX-2023-028 (stating that 75% of the bitcoin in circulation is controlled by a small minority who use market makers to pump and dump); Daniel Smith Letter (“[t]he history of crypto is a never-ending history of frauds and scams”); Letter from Billy Jensen, dated Sept. 5, 2023, regarding SR- CboeBZX-2023-028 (stating that bitcoin is a digital Ponzi, and that approving a spot ETF “will bring greater unsuspecting fools into the pyramid scheme”); Letter from The Registered Principal, dated Aug. 9, 2023, regarding SR-CboeBZX-2023-038, SR-CboeBZX-2023-040, SR-CboeBZX-2023-042, SR- CboeBZX-2023-044, SR-NASDAQ-2023-016, SR-NASDAQ-2023-019, and SR-NYSEARCA-2023-44 (“[t]here are no verifiable entities or persons as points of ultimate origin of [b]itcoin which makes it very likely to be a major fraud operation”); Letter from Joseph, dated July 18, 2023, regarding SR-CboeBZX- 2023-044 (“[a] cartel of organized crime and money-launders [sic] actively manipulate the price of [b]itcoin through the use of Tether and other crypto-ponzi schemes”); Letter from Avinash Shenoy, dated Oct. 18, 2023, regarding SR-NASDAQ-2023-016 (stating that manipulation in the bitcoin marketplace has not gone away); Letter from Winston Wood, dated Oct. 19, 2023, regarding SR-NASDAQ-2023-016 (stating that the bitcoin market is manipulated and has a history rife with scams and criminal activity); Letter from Greg Steven, dated Oct. 19, 2023, regarding SR-NASDAQ-2023-016 (“Steven Letter”) (stating that bitcoin is wash traded on platforms outside of U.S. jurisdiction); Letter from Neil Fulton, dated Oct. 20, 2023, regarding SR-NASDAQ-2023-016 (recommending that spot bitcoin ETPs be disapproved until bitcoin wash trading is minimized); Letters from Micah Warren, Associate Professor of Mathematics, University of Oregon, dated Oct. 27, 2023, regarding SR-NASDAQ-2023-016, and dated Dec. 15, 2023, regarding SR-CboeBZX-2023-072 (“Warren Letters”) (explaining how the bitcoin ledger, which is maintained by for-profit mining entities, could become significantly less diverse and less costly to manipulate). Some commenters also assert that the bitcoin asset itself is a manipulation or fraud. One commenter states that “the complete lack of knowledge of who the operators of the bitcoin network are means that it is impossible to implement sufficient control measures to ensure a fair market that is free from manipulation of both token trades, actions of the operators, or even the fundamental properties of the asset itself.” See Letter from Brandon B., dated Oct. 25, 2023, regarding SR-NASDAQ-2023-016 (“Brandon Letter”), at 4. Another commenter asserts that the questions the Commission has been asking about fraud and manipulation are misguided because “they are predicated on the idea that [b]itcoin is something legitimate which could possibly serve the public interest.” This commenter claims that “[b]itcoin is, a...
But I must admit that using your actual dad as the source of authority is quite a stretch.
So no, it's not an argument from authority.
It's their dad
FTFY: anyone investing
You can keep it, and hopefully get more money out of it than you put in, or risk getting less or none of it if the underlying borrower wasn't the best and goes in to default.
Or you can sell it to someone else for more or less depending on the borrowers performance.
Buying partial ownership (shares) in a real company that makes a product or service profitably, or loaning money to a person or business that will be paid back with interest, are both ways to invest capital which can increase in value with no "greater fool".
Apple stock isn't worth more today than in 1990 because people arbitrarily agreed upon a bigger number, it's worth more because they've innovated and grown and now sell expensive products to a billion customers around the world.
Crypto tokens, NFTs, beanie babies, rare coins, paintings only increase in value if some greater fool comes along to pay more than you paid for it. At least with a painting or a beanie baby you could display it in your house, I guess.
And then you have a bunch of competing blockchains with significantly different underlying code, so how does anything get standardized?
Bitcoin requires an ever-growing list of rubes to buy in.
You should listen to him!
https://www.justetf.com/en/etf-profile.html?isin=IE00B4X9L53...
Government bonds. There were ETFs holding Greek gov bonds for example. Greek cheated to enter the EU (by fudging its numbers, with the help of big accounting firms and banks). And government bonds are known to be risky, seen that throughout times many government have simply grown their public debt and then defaulted.
Fun fact: US public debt grew from $33 trillion (with a 't') to $34 trillion in ... drumroll ... 100 days.
Woot!
P.S: I'm not sure your question is correctly phrased... 3% to 5% of the world's entire GDP is linked to crime. By now it's not even clear if 3% to 5% of all the Bitcoin transactions are linked to crime.
I should've added this comment from the SEC, the entity that just authorized this ETF:
"""
Though we’re merit neutral, I’d note that the underlying assets in the metals ETPs have consumer and industrial uses, while in contrast bitcoin is primarily a speculative, volatile asset that’s also used for illicit activity including ransomware,[4] money laundering,[5] sanction evasion,[6] and terrorist financing.[7]
"""
- https://www.sec.gov/news/statement/gensler-statement-spot-bi...
What other ETF exists for an asset that the SEC closes its statements about like this?
"""
Though we’re merit neutral, I’d note that the underlying assets in the metals ETPs have consumer and industrial uses, while in contrast bitcoin is primarily a speculative, volatile asset that’s also used for illicit activity including ransomware,[4] money laundering,[5] sanction evasion,[6] and terrorist financing.[7]
"""
- https://www.sec.gov/news/statement/gensler-statement-spot-bi...
What other ETF exists for an asset that the SEC closes its statements about like this?
It's going to take real courage to leave the economic systems of predation and extraction behind. Whether or not you think crypto is likely to be a large part of that motion (I do, but some reasonable folks disagree), there's nothing about this action that feels like it's part of it.
Why is it the insanity of crypto? The action is entirely established interests putting a wrapper around crypto.
How do you suppose a large fund should purchase bitcoin? They specialize in markets, not wallet management. Many also do not hold their own cash individually and entrust institutions.
Because literally the entire point of crypto is to not have to "entrust institution". Like the entire bitcoin protocol is built around the concept of trustlessness. If you're going to start "trusting institutions", you can do away with a huge part of the complexity (and gargantuan energy usage) of Bitcoin.
I suppose if those institutions were worthy of trust then there wouldn't be such high demand for Bitcoin's gargantuan energy usage in the first place.
If we ignore that:
Dumbest version: You give everyone a list of all the liabilities. They make sure they are in there themselves. Anyone left out isn't entitled to the assets in an insolvency, so there is an incentive to check.
This isn't very efficient, giving everyone the whole list. But make a hash tree with each node carrying a hash and the sum of liabilities below it. Show each user their log2() sized proof. Much more efficient.
This leaks information about the distribution of ownership. Replace the values with pedersen commitment (and range proofs on their sums), and only open the top and bottom ones.
There is a fine writeup on the subject here: https://web.archive.org/web/20170928054354/https://iwilcox.m...
(Archive.org link because Zak died a couple years ago stomach cancer at age 40 due to an undetected chronic H. pylori infection, and his website didn't out survive him for long)
The custody provider (e.g. Coinbase is the custody provider for most of these ETFs) should be able to simply show wallet addresses for all the Bitcoin they hold.
> simply show wallet addresses for all the Bitcoin they hold
DTC's database is not where the Bitcoin is. It's still on Bitcoin's decentralized blockchain, just like always. That's the ultimate authority no matter how many centralized forms you stack on top of it.
At least with this structure, there are separate, distinct entities for custody, market making, transfer agent, etc. to reduce the incentives to self-deal and print fake paper securities and commodities.
So a huge improvement on the current state of affairs, where FTX or Binance handles all of these functions, with no segregation.
There's a two way arb in ETFs which keeps the price tracking accurate: - if the ETF trades higher than bitcoin on crypto exchanges: the market makers can simply buy bitcoin on exchange, sell the ETF on traditional exchanges: do this enough and the price difference narrows. - if the ETF trades lower than bitcoin on crypto exchanges: I can just buy the ETF, ask to redeem to bitcoin and pocket the difference. Sooner or later this price discrepancy goes away.
Can only redeem to cash.
https://www.etfcentral.com/news/two-important-things-need-kn...
How are you protected against losing your investment if they can not deliver?
> Price tracking
Does Bitcoin support a high enough frequency of transactions for long enough to make this possible for years into the future? Does it not become too hard to mine at some point?
1. fees are absolutely insane 2. it doesn't actually track Bitcoin price
A proper ETF which aims to be competitive might be much closer to actual BTC ownership
Having read many of these negative comments, I think part of this sentiment boils down to the commenter seeing no point to Bitcoin. Just this thread has examples. It must be more than a little annoying to feel very strongly that Bitcoin is pointless, but to also notice that it's still here. Year after year.
If that shoe were on my foot, in addition to being annoyed I'd be curious about what I was missing.
Bitcoin doesn't have to do something useful for everyone to survive. It doesn't have to "replace fiat." It doesn't have to be a payment system. It doesn't have to "go to the moon." It doesn't even need an ETF. Bitcoin just needs to fill needs (or wants) not met by anything else. They don't even have to be your needs or wants.
Unlike every other attempt at electronic cash that came before it, Bitcoin also doesn't need the approval of any person, police force, legislative body, military, or government. I'd challenge people who hold negative views on Bitcoin to name some other systems for which this holds true.
I think that's the point that a lot of hostile commenters might be missing.
I swear I saw some super highly upvoted comments that read as normal + level-headed in r/CryptoCurrnecy that was like "if it goes from $45k -> $100k this year it isn't even that much"
Do you ever hear Warren Buffet saying "122% yearly returns are meh"?
The whole Bitcoin 'manifesto' and sticking it to the man is just a ruse.
It's not just that it's in the cloud, it's the only form of wealth you can keep digitally AND only you have access and control over it.
Maybe that's fine because you're a good citizen who follows the rules, but some people are born into places where they don't get the privilege of a fair financial system, or the system changes on them.
Going on GitHub and downloading core code and deploying a new coin based on Bitcoin or some other crypto.
I'll call it HackerNewsCoin.
Didn't know it was that simple to create "wealth".
What a foolishness to think that something that has no intrinsic value can constitute wealth. Don't confuse price with value.
It really is true crypto combines all that people don't understand about economy with all that people don't understand about technology.
Honestly, I am also amazed that humans make something like that happen. But we do. Otherwise gold wouldn't have so much value.
Also, can't be forked, cloned or replaced by some gold 2.0 with smart contracts or bigger block size.
Seriously, imagine comparing a currency, let alone a cryptocurrency to gold.
Foolishness never ends.
That is absolutely FALSE.
Good "money" requires a tiny bit of inflation, otherwise there's no incentive into spending, but hoarding.
When people start hoarding money, rather than spending or investing it, economy starts freezing.
Cryptocurrencies are a living example of that: there is absolutely NO incentive into using them to trade, only to hoard them. Why use them today if price goes up? Non sense. Indeed nobody uses them to trade, ever. There's less people spending Bitcoin for goods today, than there was in 2016 when the amount of people in the sector was a magnitude lower.
In fact, even the narrative on websites like Bitcoin's have long moved from the "currency" to the "store of value" argument.
You're compounding many wrong and false information and building an absolutely distorted idea of how money and finance works.
At the end of the day, that's history repeating itself. As wealthy people accumulate real wealth, poor people chase pieces of paper or ridiculous blockchain hashes.
If you're happy, why stop you.
The only incentive to spending should be your own needs in relation to opportunity costs, not government's mood.
But if you want to give your government that prerogative over your life, feel free to keep using fiat money.
There are all sorts of scarce things that we don't use for jewellery or see as particularly valuable. Gold has physical properties that make it specifically useful for jewellery (easy to work, doesn't tarnish, shiny, etc.).
Not sure if you see that it's your understanding of the world that's off here.
Currencies are not wealth, none of them, cryptocurrencies even less.
Money is worthless, rich people don't have money. They have art, companies, land, bonds, cars, boats, airplanes, but very little money.
The financial illiteracy of crypto cultists really has no end.
I agree 100% with this but it is describing you.
Fortunately for most bitcoiners who got in early, it's been variable in a positive direction... But not for everyone.
Once you realize that banks are very fragile and abusive, just having this alternative is important.
Banks can deny you access to your money on a whim. Compliance, glitch, failure, whatever. You can't use your money. You can't buy food. You can't pay rent. You can't buy tickets. You can't hire a lawyer.
It's nice to have something which is based on completely different principles.
If people no longer "need" to convert BTC to fiat, this would no longer be a point of a control, but until then, governments can already and will continue to grow how much they can control BTC flow.
Some of it is currently very ham-fisted, but there's a clear intent to devalue off-exchange wallets: https://www.coincenter.org/new-crypto-tax-reporting-obligati...
https://news.bitcoin.com/industry-execs-freshly-minted-virgi...
When a user receives a payment in Cash App or Strike over the lightning network there is no way to track where that bitcoin came from. I haven't really tested that out yet, but I find the idea that bitcoin can be the rails of transferring value pretty compelling. Most people can still transact in fiat but with trustless interoperability between banks and service providers. And of course if people are happy transacting in units of bitcoin it can all be done in a trust-minimized way (with tradeoffs available for convenience, etc...).
But to your point, the government could crack down on the app stores and service providers to not support this kinda stuff.
The question is more like: Are OK with government control?
Reminder - regulators reviewed SVB reports and found them adequate. Then apparently people found it's insolvent. Does it look adequate?
Do you like a system if bank can become insolvent if people withdraw their money?
That's presumably one of most competent countries in the world.
I simply doubt that my opinion, or even that of the majority of the public, would change the outcome of what the government decides to do. They seem to be on a pro-KYC/AML/FINRA/IRS path regardless of public opinion.
But, not all people, and many such regimes have crumbled.
Somehow you found energy to spread FUD on this forum, but you don't have energy to form an opinion and defend it. Sad.
It might surprise you, but it's way easier to open an exchange account than a bank account.
https://news.ycombinator.com/item?id=26238410
Most people who are observant are well aware that there’s deep and enduring demand for ways to gamble and speculate.
It’s really easy to recognize Bitcoin filling that role like the neighborhood numbers game, pachinko, online poker, and tulip investing all have at various times in history.
We just don’t like it.
It lasted only a few months, there was no long term investing on tulips.
They ruin families, neighborhoods, cities.
I do contend that "ruining families" is not a thing we should base policy on because it implies both a crazy amount of government intrusion into individual lives and because it imposes rules on everyone to make the nuclear family work.
Please spend like 30 seconds of analytical thinking trying to poke holes in this. It's remarkably easy to disprove. The challenge is what if anything we choose to do about the harms that they can cause.
However, said individual could harm others in the persuit of drugs and gambling when their own income or savings are unable to satisfy their own cravings. But how is that any different from any other forms of harm from crime conducted for other reasons?
The bad things people do to other people to get money for drugs and gambling are included in the blanket statement “drugs and gambling”.
I call bs on the "drug" scapegoat. People are salty they work in tech and don't understand bitcoin.
Don't like Bitcoin's Proof of work properties, check out Ethereum. Don't think that everything needs to be on one central ledger? Check out Polkadot. It feels like so many commenters here put their heads in the sand about an entire class of technology because they're caught up in their opinion as fact.
Go make a fork "fixing" these problems you speak of. Demonstrate its utility and people might adopt it.
It's opt-in yet you speak of it as an authoritarian power.. when in reality government currency is literally this.
Ethereum's move to a Proof-of-Stake system was the best thing to happen to the cryptocurrency world, from an ecological point of view; however, that does not change anything about Bitcoin's energy consumption.
Someone who objects to Bitcoin due to its excessive energy use will not stop disliking Bitcoin just because an unrelated cryptocurrency became better.
i smell sour grapes from those people. They saw bitcoin very early on, and gave it the dismissal way back in 2008/9. That missed "opportunity" continues to bias them into thinking that their initial assessment must still be correct (for dismissing it early), otherwise they'd have to admit their dismissal as being hugely mistaken.
Second, the "you just don't understand it" argument is as old as Bitcoin itself. It's tiring. It's not new, it's not crazy complex...it's understood. It's just useless and ripe with scams.
You know, if all the BTC haters actually knew what they were talking about we could have intelligent discussions on HN.
But then can't you see the irony of writing that sentence when the article title is literally "Spot Bitcoin ETF receives official approval from the SEC".
That's the thing that's so baffling to me - if you're saying BTC is so great that it doesn't need the support of government and social institutions, why the push so hard to get an ETF (multiple in fact!) when the rallying cry for crypto has always been "distributed, trustless currency".
That's the big news.
The network is dependent on miners. Miners earn bitcoin but spend dollars to create it. They're dependent on price appreciation to provide the liquidity that sustains their business. Without this approval, who is going to continue to pay more for bitcoin?
In gambling, the longer you continue, the more certain it is that you will lose. Bitcoin is a uniquely ironic form of gambling if it's gambling at all.
Of course, this is highly dependent on the "coin"
Even if you were slow and naïve and only jumped at the 2021 all-time high, and kept buying during the next 12 months (as one should when an asset you like goes down), you'd have made your money back and then some.
The more remarkable a short history the more likely it is not sustainable: Beanie babies, tulips, etc.
In a zero sum investment for every win there is a loss. Bitcoin however is highly negative sum. For every win there are far more losses. Who do you suppose pays hourly train loads of coal turned into CO2? How many years now?
I think there's still an easy 10X to match Gold and 100X is possible if it becomes the world's preferred reserve asset
Bitcoin may go to a billion and it won't change the fundamental premise:
You can have ALL the Bitcoin in the world, all of it, and if there's no buyer outside, nobody willing to trade anything for it you have nothing.
Now use the same argument with all the land in US, all the crop in India, all the fish in the Pacific, all the gold in Russia, all the wine in France, all the bakeries in Palermo, all the cars in Sydney.
You farm, you eat, you can make jewellery and tech, you drive.
And yes, it applies to US dollars too (albeit to a minor extent). If nobody wants it you can just stare at dead national heroes on paper, or burn it idk.
Wealth does not come from money, and of all the money, you choose to speculate on the exchange price of a virtual one.
The premise will never change and crypto cultists keep fooling themselves and finding many weak and illiterate to join their ranks.
But any price movement will not change the fundamental issue.
Haha, bitcoin never even attempted to solve your "fundamental premise", and never made any such promise. Bitcoin is like fiat money in that regard, and different in other regards.
Whats the logic connecting BTC to gold? Why would the two prices be connected in the way you're suggesting?
Pointless challenge, those aren't good qualities. Also money is worthless, unless you like looking at pieces of paper depicting death national heroes, it's worthless, don't understand why are bitcoiners fixated giving money value.
It's just meant to be traded not hoarded. It had a value when it was pegged to gold. Rich people have companies, real estate, airplanes, art, jewellery, bonds, but relatively little money.
Anyway, literally any other cryptocurrency share these properties. Some even technologically better, yet completely ignored.
How do you live life if you think money is worthless?
Fine, you don't like crypto. Say something new or insightful or skip the comment section.
For it to be useful it does. How else does one convert from fiat to btc and back again?
Bitcoin, is piece of open source software that was released on the internet 13 years ago running all over the world. With no central governing entity, all driven by software consensus mechanisms.
Would you consider that you just don't like some of the organizations that have built themselves around this network making misleading claims? Rather than the technology itself?
I really didn't mind bitcoin before the price exploded, it was a curiosity and interesting experiment.
Since then, it has been used to transfer a lot of wealth using outright fraud, cons, and other criminal means.
I get paid a lot of money (fiat) to program digital payment systems, and have spent time understanding the underlying technology, as well as a holding a degree in economics. I get what crypto is and how it works, and I won't go near it.
Bitcoin isn't inherently dangerous, but the way that the crypto ecosystem convinces people to gamble on a zero sum game they don't understand is absolutely dangerous. For every bitcoin millionaire, there's someone that pumped real dollars into the system. Very real harms have, and continue, to be caused by bitcoin and crypto.
My ownership of a stock is a claim on a portion of a company’s assets and future productive addition to the economy. The stock market is a positive sum game. If I buy a share of ABC Gold mining company, it’s because I expect them to dig some actual gold out of the ground and expanding the economy. They can distribute a dividend to me after then selling that gold. No one has added any money to the stock market, but I am wealthier.
If I lent my bitcoin to ABC Gold Mining like you have, then I could expect to additionally receive interest on my loan.
Are you blaming bitcoin for gambling addiction and bad investing now? That's funny. There more of that with the USD, by several orders of magnitude.
No. I’m explicitly not blaming bitcoin. I’m blaming the humans that take advantage of others using the technical complexity of the crypto ecosystem to convince people that it is something that it isn’t.
The fact that you can wreck your life in Vegas or day-trading on Robinhood using dollars isn’t something I like either.
The whole point of the sentence you quoted is that bitcoin isn’t some magical wealth creator as it is frequently sold as. It’s to point out that it is a zero sum game; for every dollar someone has gotten out of the system, someone else has put a dollar in.
That's a feature and in the fiat economy the same is almost true. If Bitcoin is a "zero sum game" then fiat is a "negative sum game" for the vast majority of participants whose money is debased.
Most of us don't see it as a replacement of cash.
This ETF doesn't mean it's a replacement of cash either.
Just so many people are holding it and there's a lot of money in it, but still less than it's peak. It will probably just go down again without news, as it did before.
It's not that the BTC futures ( since 2018) changed much, I expect a similar end result of this.
Note : I went out in 2017 as I didn't saw it's original purpose being fulfilled and it still isn't after 14 years.
Nobody is talking about paying things with crypto anymore, as far as I know.
https://en.m.wikipedia.org/wiki/Bitcoin_in_El_Salvador
https://bitcoinmagazine.com/culture/why-bitcoin-failed-in-ca...
It should still be popular for criminal purpose though. But that's Monero and some other privacy coins.
There was so much hype for the ETF, that there's no interest anymore from others to actually buy crypto ( for now)
I work in architecture and year after year the industry is pushing to squeeze every last bit of energy efficiency out of everything. Meanwhile bitcoin is like “BURN SOME COAL TO ACCOMPLISH LITERALLY NOTHING USEFUL! AND KEEP DOING IT FOREVER!”
And the crypto people will always bring up “Mining gold just to make gold bars is a waste of energy too” but guess what I don’t buy gold bars either.
Is Taylor Swift useful? Sex and the City? Options trading for Tesla stock?
You could eliminate 80% of the US service sector for not being useful. "Somebody wants to pay for it" is the best criterion and bitcoin fits.
If you lose or surrender you private key - fair enough, but that's not the same.
It is the hardest money that mankind has ever seen, digital, with an issuance schedule that is set in stone - no select few people have the ability to effortlessly print it, stealing the wealth of the rest and corrupting the world at its core, causing third world poverty, endless wars, corrupt media etc.
So is the entire bitcoin mining industry, it is built into their ROI. Have you not noticed the J/Ghash ratio over the years?
This is completely irrelevant because the protocol is designed to scale difficulty with the hashrate. The only benefit of improving J/Ghash is to get a leg up on other bitcoin miners.
> I work in architecture and year after year the industry is pushing to squeeze every last bit of energy efficiency out of everything.
Compare that to the fiat system, do you get to vote for who runs the Federal Reserve? Can you verify the current supply of the US dollar or the maximum limit of dollars that can be printed?
Very privileged take to assume Bitcoin doesn't "ACCOMPLISH LITERALLY NOTHING USEFUL", when millions of people are using it to save and send for 15 years, and over 100 TRILLION dollars has been settled on the network.
No one really trusts bitcoin. And that's on of the big bitcoin problems.
Also, it doesn't live up to any of it's hype. But others have enumerated all of those faults.
This isn't actually true, BTC requires a certain amount of subsidy every ten minutes from the global economy. If that subsidy is not forthcoming it ceases to function. That subsidy is constantly increasing in terms of purchasing power.
Further, the regulatory authorities of the world have complete power over the transactions that take place on the ledger, and pretty much full visibility into and out of the ledger when it comes to their controlled fiat currencies.
Neither of the above hold true for many other cryptocurrencies, but I'm not interested in shilling for them, because the entire cryptosphere as a whole is a wretched hive of scum and villainy, largely because of attempts to force the above status quo from BTC onto the remainder, which given the multitude thereof, and the ability for them to endlessly replicate and spawn, is basically doomed to failure.
Note: I am well aware that the popular opinion of BTC is not aware of much of the above, but I didn't say "people believe x" I just said "x".
COPE
That want being, in this case, the need to evade financial regulators and easily move large amounts of money untraceable. There is basically no other thing Bitcoin does better than traditional electronic cash, especially with the transaction fees reaching current values.
Is it a legitimate want? It's a complex question involving personal and political values, but let's just say not everyone who objects about crypto does so because they don't understand its real uses.
paradoxically, bitcoin is the worse at this, since addresses are completely public. Unless you, like satoshi, keep the coin in the address and never spend it, any conversion to value that you can spend, such as cash, is going to be tracible.
> Is it a legitimate want?
yes. Unless you can prove criminality, there's the assumption of innocence.
Addresses in Bitcoin are pseudoanonymous. Many criminals have evaded prosecution for years (for example, the MtGox thieves) despite moving billions in the clear on the blockchain. You are feigning ignorance about the true nature of Bitcoin which is quite obviously designed to enable very strong privacy, as noted by even by its inventor in the original paper; let's not even discuss things like Monero and ZCash.
Obviously there are technologies which enable complete privacy - and like tumblers, any that prove popular will be shut down, there's just too many negative externalities.
The fact that ChipMixer was busted in an international law enforcement operation should indicate to you the nature of the beast. Just like in the case of SilkRoad, there are a myriad copy cats which are still online. It's a small piece of computer code anyone can run. So money laundry on bitcoin to a nearly untraceable level can be done by any service that can setup some kind of network connection and run a bit of computer code.
This is unprecedented in the history of finance and the main practical benefit of Bitcoin other than speculation.
As long as nothing moves on the blockchain, and the trust requirement you mention is fulfilled, I hope you agree that, save from some bug in the implementation, you will have no idea what private keys were received by the original owner of A. It's logically impossible, since CM has already pre-deposited many more other funded private keys (in fact, the entire previous volume of their laundry) and by the definition you don't know which ones of those were disclosed to the client A. The number of combinations is a factorial of the number previous clients, the vast majority you won't know.
So the attack scenario has to be more convoluted than that, perhaps the client immediately consolidates his received keys into a single address, perhaps we assume the attacker has perfect information over all amounts A deposited, which is clearly not practical etc. But that's another discussion altogether that deals with breaking a certain implementation of finding a launderer with a certain behavior. Research papers always make bold claims to raise interest, and often deliver crypto style failures, that require "only" 2^64 attempts, so the system is "broken".
But the issue we debated above - address pseudoanonymity enabling untraceable off chain asset swaps - is already settled if you agree to the second paragraph.
Furthermore, if you are a client, how long are you willing to keep your money in private keys that you know CM also has? Even if you don't mistrust them, you still need to worry about the exact scenario that happened - they get busted and all their private keys get seized. So chances are those amounts leave the CM network of addresses pretty quickly, even if they don't get added up in a single address. So now all that combinatorial explosion drops down to a pretty tractable k-NN classification problem.
I would advise against making strong statements like "logically impossible" about things that seem to require a lot of very narrow conditions like perfect actor behavior and strong stationarity in order to be true.
In the restricted scenario provided, it really is logically impossible to know the ownership transfer happened. Your attack requires knowing all inputs into the laundry, which you won't have in the general case, they'll look like any other transfers in the blockchain.
Even if a mixer is busted, I can be pretty sure they abide by their public claim to not keep any history older than a few hours after the mixing is complete, secret keys and all, because it's not in their interest for such evidence of crimes to exist.
And why would having a private key to an output address that no one else has touched be an evidence to a crime? They probably only delete them after the user has transferred the funds out, if they even bother.
I don't know why you are so bought into Bitcoin privacy specifically, but it holds as much water as the privacy statements in the App Store - anyone with sufficient motivation and data analysis skills can poke right through it. Monero is likely stronger, but if it can't be cracked, then as soon as it becomes big enough it will get blocked.
> why would having a private key to an output address that no one else has touched be an evidence to a crime?
An address is a hash over an ECDSA public key and a public key is a computational derivation of the random private key. If you have the private key, you can derive the associated address which is publicly connected on the blockchain to known proceeds of crime that have been laundered. That they were spent or not (by an another customer than the criminal) is irrelevant, it proves that you handled them.
Also, unlike Bitcoin, Signal ads strong privacy on top of a very functional base product.
The idea that Bitcoin can continue to operate with the disapproval of a functioning government is naive.
I thought cryptocurrency was an interesting and promising idea. But I got away from it around the time it became clear the entire space was overrun by wall-to-wall scamming. And it's safe to disregard anyone who doesn't acknowledge that.
If someone says "Yeah, it's wall-to-wall scamming, and other than that, the main use of it is for organized crime transactions, but there's this silver lining of X", then I might listen to X briefly, even though it seems irrelevant at this point.
If someone doesn't phrase their advocacy with acknowledging the massive BS, then I assume the person is just another scammer (and they might be even if they acknowledge it).
But I wouldn't characterize all, or even most of crypto as scams. Gambling, maybe. Are memecoins a scam? I would say they're more like a massively multiplayer form of gambling. Which you might argue is a bad thing, and certainly is dubious from a social standpoint. But if the code is openly public and autonomous, and there's no outright deceit, I don't think gambling is really gambling.
Even beyond that, there's a lot happening in crypto that most certainly isn't scams. You have stablecoins and payment rails like USDC, stores of value like Bitcoin, smart contract chains like Ethereum, decentralized finance applications like permissionless exchanges and lending markets, social applications like farcaster, decentralized AI, and gaming.
Now you might argue that all of these things are stupid and pointless and wastes of money, but that's a separate debate. Of the large projects in these categories almost none are outright scams. They're teams experimenting with new ways to run financial markets or move payments or train models or hedge inflation. Like most technological experiments most will fail. But if that was the criteria for "scam" then the entire startup sector is also wall-to-wall scams.
But there's plenty of outright deceit. Many (most?) memecoins are some form of pump & dump. It doesn't really matter whether the code is openly public if the winners are chosen ahead of time by pre-allocating tokens.
Edit: Also actual gambling meets your criteria here. While the source code of slot machines is not public, it is typically audited to ensure it offers the odds that are advertised.
They're practically indistinguishable from penny-stock scams, and they almost always involve a bunch of outright lies in their promotional materials; the only reason you can argue that many buyers aren't deceived is because lying is so rampant and expected in that space that people take it as given that the claims are going to be lies, which is hardly an argument that it's a healthy activity.
> Even beyond that, there's a lot happening in crypto that most certainly isn't scams. You have stablecoins and payment rails like USDC, stores of value like Bitcoin, smart contract chains like Ethereum, decentralized finance applications like permissionless exchanges and lending markets, social applications like farcaster, decentralized AI, and gaming.
All of which still fails to add up to anything actually working and useful, 15 years in. The best cases people can come up with are sympathetic criminals like people evading capital controls. What minimal practical use of cryptocurrency there was is already in a clear decline; fewer and fewer stores are accepting it for payment, the few efforts at interesting crypto games have already collapsed...
> Like most technological experiments most will fail. But if that was the criteria for "scam" then the entire startup sector is also wall-to-wall scams.
There's a big difference between "most" and "all". The startup sector as a whole has enough successes to balance out the failures and end up as positive ROI (and even then, a lot of startups really are scams - just not all of them).
The first packet switched network came online in 1969. Fifteen years by 1984 almost all the use cases were hobby, and it'd be another ten years before the Internet really started changing life.
Decentralized consensus is a fundamentally new computing primitive, similar to packet switched networks. Developing applications on top of new primitives is hard and long, and there will be a lot of time required just to build out usable infrastructure.
Turing complete smart contracts are only 7 years old. Layer 2 scaling is only two years old. Decentralized exchanges and other on-chain financial contracts about four years old.
What problem are we solving with decentralized consensus? How will things improve if we have a giant one? Say every mobile phone was a part of the consensus mechanism, churning Turing-complete smart contracts. Billions of nodes. What do we get out of that?
By 1980 CompuServe had thousands of paying subscribers, both home and business - and I suspect they'd invested far less getting there than the amount of VC money that's gone into cryptocurrency. You can say the home users were "hobbyists", but they were getting real value out of the network; online chat or games might not have had a clear business purpose, but they were fun, and that's real value.
I've seen literally one niche for cryptocurrency that people seemed to actually enjoy for its own sake rather than as a crime tool or get rich quick scheme, cryptokitties, and that seems to have proven itself fundamentally unviable (either your collectibles are too cheap to be interesting, or they're too expensive to be fun). Cryptocurrency is not merely wildly unprofitable to date, it's not generating value and there is no indication that it ever will generate value.
However, organizations contributing to this space are trying to extend the functionality and utility of these technologies. For example, check out Chainlink https://chainlinklabs.com/research,
But if you would like a less self-serving narrative, check out what the WEF https://www.weforum.org/organizations/chainlink/ & SWIFT https://www.swift.com/news-events/press-releases/swift-unloc... think about their decentralized tech.
Other forms of interesting decentralization applications look no further than IPFS & Filecoin. https://protocol.ai/
You're not wrong; there are scams and a lot of snake oil, but don't let that deafen you to what direction thoughtful applied use of the technology can produce.
The question I have is why do commenters feel the need to respond to any comment about Bitcoin that is not a (sometimes subtle) promotion or defense of it.
A reasonable person might think it's because Bitcoin is only valuable if increasingly more and more people buy it. If it's not increasingly popular or if, God forbid, everyone holding Bitcoin were to try to sell, all at once, it's Game Over. (Some folks will lose money and all Hell will break loose.)
If the first statement is false, and Bitcoin is valuable if it's unpopular, then there should be no logical reason why anyone would try to "defend" Bitcoin on HN. Why would anyone care. It's valuable even if no one is buying, right. If it lacks popularity, then this is of no consequence. Ignore it.
Alas, there is no way to test if second statement is true, i.e., it is Game Over if everyone cashes out their Bitcoin, other than this actually happening. Even still, there is no logical reason anyone would need to "defend" Bitcoin on HN if someone else believes this to be true. Why would it matter if other people hold or sell their Bitcoin.
And yet, there are consistently HN voters and commenters who seek to "defend" Bitcoin from anyone who has doubts or asks questions. That, in and of itself, may raise suspicions even more.
"Bitcoin doesn't have to do something useful for everyone to survive. It doesn;t have to "replace fiat". It doesn't have to be a payment system. It doesn't have to "go to the moon". It doesn't even need an ETF."
But somehow it needs to be constantly defended in every electronic discussion. It needs constant promotion. It needs hype.
No one can simply state "I am not interested in Bitcoin" in a discussion without triggering some "response". Regardless of the merits of Bitcoin, or absence of them, that is fscked up. Red flag.
In case anyone gets confused, I am not suggesting that any commenter literally states "I am not interested in Bitcoin" and nothing else. I am using a hypothetical example of a seemingly benign statement to illustrate the idea that _all_ comments about crypto which are not positive are quickly "countered" by Bitcoin true believers. Here is perhaps a better example. Someone states, in so many words, that Bitcoin requires large amounts of electricity. Is this untrue. It is explicitly negative. It seems quite benign yet this sort of comment will almost invariably trigger a "defense". To some, that is a red flag that there is something suspicous about these "arguments" that people feel compelled to make about Bitcoin.
Check out the film "Bitconned" if you can. Slow start but hilarious in the end. What happens when some petty criminals accidentally come in contact with hordes of "true believers". online. If I am not mistaken this was the SEC's first successful prosecution re: crypto.
If the topic is some positive news about a technology (Bitcoin or otherwise), and your only contribution is "I am not interested in this" then you'll probably trigger a response. Might also be time to revisit the commenting guidelines.
Lol this is ridiculous. If you popped up on a hacker news thread about abortion rights and said "I am not interested in abortion rights" would you also say it is a "red flag" regardless of the merits (or lack of merits) of abortion?
If you truly have no interest then lurk. But if you choose to talk (noone is forcing you to!) then don't be surprised at responses.
"any random shitcoin did this, therefore BTC goes in the same bag," or
"no! We should absolutely live in a totalitarian dystopia and have governments that track every move we make. God forbid <money launderers> <terrorists> <some other bullshit>"
Ironically, cryptocurrency will usher in governments tracking every penny we spend since it's all public on a distributed ledger.
There are MLM’s that have been around for over 100 years. I feel strongly that they’re all complete scams, yet they live on. Maybe I’m closed minded for not joining Amway. But I think I’m just being sensible, tbh.
There should have been taproot and schnorr discussions on the frontpage for years
What people are building as betas, there should be ordinals and inscription discussions about their technical implementation
But instead we get these surface level discussions about bitcoin or crypto for over a decade now. People completely missing that there are others who had the exact same information and said “okay this is how I can improve it to more closely fulfill that vision” instead of “harumph! that will never work and I dont like it so there’s that!
I still don't own any and don't want to, but there is the demon at the back of my head telling me that I could've just mined some or clicked the button on the faucet. After all we all knew about it. I know that most people wouldn't have held onto it for 14 years, but it's not a rational feeling.
If you start from scratch with a non-exchange wallet and get paid in BTC for something to it, sure. But if you want to get in with any fiat, you're going through an exchange, which means KYC, which means you definitely need the approval of the exchange (and by proxy your local government/tax authority).
It was a simple solve by governments to get crypto controlled centrally by proxy for most users this way.
I believe the original idea was that, to start from scratch, you would just leave the Bitcoin software running on your computer for a while, since that software not only hosted your wallet but also contained a miner. After a while, you would get lucky and receive 50 Bitcoins.
Of course, that stopped working once mining moved to FPGA and then to ASIC; even with GPU mining software, an individual user has no hope of mining any relevant amount of Bitcoin. That bootstrap mechanism is now completely dead, and the only way to get new Bitcoins is to get them from someone, buy them in an exchange, or invest lots of money in specialized Bitcoin mining hardware.
Have you heard of this new technology called a "J.O.B"? It enables people to trade labor for currency.
The next ten years will be about how to earn Bitcoin through skilled labor, not mining on your PC.
The change of the tone here is mainly because of the changed audience. Hacker News was originally a forum for founders and hackers. Now it is a general forum for salarymen software developers.
And if so then where do all the hackers hang out now?
I have a feeling Bitcoin discussions can get quite more interesting in here if it had no monetary values but people can be sensitive when money is involved.
It’s difficult to use it for circumventing government controls, since so many of the on and off ramps are subject to regulation and it’s difficult (and expensive) to transact truly anonymously.
It sucks as a store of value since it’s so volatile.
Similar to the point above, it’s increasing subject to government regulation (namely the US) in a de facto sense.
The UX sucks, and mistakes can be super punishing. If you make a mistake then you have no recourse and everyone will applaud the code working as intended, unless the mistake is really big in which case the “code as law” folks will fork the network to rollback the mistake.
In the same vein as the item above, scams are rampart and there is very little recourse once scammed. As a result, it’s tough to see actual widespread adoption as a currency (and not just a speculative asset sitting in a brokerage account somewhere) since the level of technical sophistication needed to use it as a currency without risking wiping yourself out puts it way out of reach of most people.
It sucks for transactions, since the fees are so high and make small transactions bit feasible.
Proof of work sucks and is super wasteful.
There are probably plenty of other ways it misses the mark I’m missing as well. It frustrates me because it feels so fatally flawed, but people take it so seriously. If popular sentiment was that BTC was just a fun thing to speculate on, in the same realm as TSLA or buying short dated calls on the VIX, I would be totally on board! But trying to act like it’s a serious currency that can compete with USD or whatever just seems somewhat delusional. I think blockchain and ETH style smart contracts are super cool tech, and could have super productive applications that legitimately make the world a better, more efficient place, but BTC in its current form doesn’t check that box for me.
That's only a good thing in dictatorships, not in democracies.
=> I really don't care. It's not a pro in my life and my continent ( Europe)
Additionally, Bitcoin is super duper easy to track
Yes, Bitcoin allows you to be a dictator of your personal finances, compared to fiat, a "democratic" system, where people you never voted into power get to press a button and print as much money as they deem necessary to "stimulate" the economy.
Ok. So when nothing special happens in your perfect currency, it divides by 3 or 4 in value in a year.
Yeah, that seems great! Go for it!
I mean, it is the best performing asset of the last 10 years, so yeah, it seems pretty great to anyone who has a brain.
A 98% cash and 2% Bitcoin would beat the SPY returns for any 4 year period since inception. When making investments, its important to have a long term outlook. Do you just live day to day without any planning?
Could you tell me who Satoshi is?
Could you explain how you can track who paid you a Lightning Network invoice?
Have you ever written down a seed phrase or made a Bitcoin transaction on chain?
Nope, because he's been inactive for 14 years. ( 70% of all accounts are inactive anyways - https://www.coindesk.com/markets/2023/11/23/bitcoin-supply-i... )
> Lightning Network
You mean the SQLite database at third parties in some cases? Or the ones hosted at the cloud providers? https://watcher.guru/news/amazon-google-cloud-host-49-of-bit...
I'm not a government, in case you were wondering. I can't track the edge-cases. I don't have access to KYC
Fyi, noticed the mixing services going offline? https://en.wikipedia.org/wiki/Tornado_Cash
If Bitcoin is so easy to track people why don't you find him?
> You mean the SQLite database at third parties in some cases?
Didn't answer my question, but you know you can run a lightning node at home, right?
> Links to an ETH project
What does that have to do with Bitcoin?
Bitwise (BITB)
ARK Invest/21Shares (ARKB)
Invesco Galaxy Bitcoin ETF (BTCO)
iShares Bitcoin Trust (IBIT)
VanEck Bitcoin Trust (HODL)
Franklin Bitcoin ETF (EZBC)
Fidelity Wise Origin Bitcoin Trust (FBTC)
WisdomTree Bitcoin Trust (BTCW)
Valkyrie Bitcoin Fund (BRRR)
Hashdex Bitcoin Futures ETF (DEFI)
Grayscale Bitcoin Trust (GBTC)
for bitcoin to move up or down $1000 a day has a variance: call me when we're outlying
That fake news cleaned up a lot of leveraged bets up and down.
It makes sense if you figure that the ETF is probably just another FTX-like scam (except now by competitors of FTX who are even better at regulatory capture).
All it means is that you now have a security that tracks Bitcoin's price, but is probably backed by very little actual Bitcoin.
TLDR: money is going to flow out of real Bitcoin and into this fake Bitcoin ETF causing the price of real Bitcoin to go down eventually. That's without even considering insane possibilities of naked shorting by a certain owner of a certain large hedge fund that is co-owner/founder of this ETF and also owner of the US's largest market maker.
Most of these old ones seem to be listed in Germany and Paris.
I guess in the end they are all fully dependent on Coinbase.
Nothing has stopped the damn thing. It's always there.
It's one of those things that just keeps on existing, like gold.
It doesn't care what you think. It doesn't care whether you like it or not. It doesn't care if you understand it. It's just always been there.
Might as well make it easier for people and companies to own it and trade Bitcoin, and for governments to tax profits on it.
It was going to replace money, but then it didn't because the network slowed down to the point where it was unusable. Nobody was going to wait 30 min for a transaction to complete.
So then the message was flipped and Bitcoin was now 'an asset', not a currency, further supported by IRS's decision to tax it like an asset, so it was advertised as a store of value, "like gold".
It didn't deliver on the currency promise, even with all the lightening and proof-of-stake talks.
It is actively hurting the entire planet at this scale by generating useless heat.
And last, but not least, KYC lets governments track all your bitcoin purchases forever to an extent impossible to do with cash, including deanonymizing transactions retroactively decades later.
A digital currency will not give us more freedom, it will only take more of it away, which is why I personally no longer support Bitcoin, and I don't think others should either.
A future global system could have settlement on the blockchain. Like the current system does at far less regular intervals than the processing power of non-settled transactions.
There unfortunately is, to open a channel you have to make a Bitcoin transaction, and you can't use lightning without opening a channel. Bitcoin processes a max of ~220M transactions per year so to onboard the world onto lightning with only one channel each would take a few decades.
A real layer 2 could solve it, or having some trustless way to use BTC on other chains
But http seems simpler than what I've read about lightning more recently.
Total wild speculation follows:
As for the channels problem, it feels to me like you have something like ISPs or AOL being the thing that's needed to kickstart it. And perhaps the ISPs or AOL in this world are the employers and lightning banks. So yes you need bitcoin to open it, but with an employer you have the potential to have an entity with bitcoin resources and with a reason to send bitcoin to an individual.
Perhaps HD wallets with lightning kickstarter funds apportioned to new employees. This feels similar to the needing a bank account or national insurance number in the UK (social security number? in the US) to start getting paid, or similar to needing an internet connection. Yes you could choose to get paid in bitcoin and have the fees come out of your wage, and this would be similar to getting paid in physical cash today. Or you could get over the slight roadbump to get you onto the lightning network.
What would a real layer 2 look like in your opinion?
Essentially it's a separate network that every few minutes takes every transaction and compresses it into a data blob that it saves on Ethereum along with a proof that the computation was done correctly. The Ethereum L1 nodes then only need to verify the proof instead of re-executing all transactions that happened on the L2.
With this design users can go straight from an exchange like Coinbase onto the L2 and never need to use Ethereum, and fees are 10x cheaper because of the data compression. Fees will soon be 100x cheaper as Ethereum is adding extra space just for these L2 data blobs that is much cheaper than normal Ethereum data space.
Unfortunately it can't be done on Bitcoin right now because Bitcoin nodes don't have Turing complete scripting and so can't verify the proof that an L2 posts to Bitcoin.
That is bad, but it doesn't seem part of the public narrative that YouTube is bad because of global warming. Also the general narrative posits that electric cars are good. They also use a lot of energy. There's nothing inherent about EVs versus bitcoin that suggests one uses clean energy versus another. They both use a lot of electricity.
But so does the banking sector. And entertainment, farming, travel and a lot of the other things 8 billion people choose to do or depend on.
Any usage of fossil fuels should rightfully be a target and held to the same standards.
There is another narrative that we need continual growth and that inflation aids this. And deflationary currencies are bad because they don't help growth. This seems so ingrained in modern politics and economics that I slightly hesitate to question it in public.
Well maybe unbounded growth and exponential usage of resources is the actual problem.
I hope we reach the social limit on unbounded growth before it destroys everything we have. It's literally in physical terms unsustainable. My only hope here is that nuclear fusion gives us a respite for a hundred years or so. But we'd still have the same problem at a different scale if we used that to grow to a trillion people.
I can see that a deflationary global currency could be part of the solution to the problem. And I can see why suggesting deflation is good can be seen as a threatening thing to those that have resources.
So I feel in that light, the bitcoin = global warming narrative is really convenient, even if a little ironic.
Thus, the financial system provides much more utility for the energy it consumes than bitcoin does.
[1] https://www.theguardian.com/technology/2022/feb/18/bitcoin-m...
What, per transaction?
Depends on the transaction. To buy coffee? Of course not, but there are transactions that can take hours or days to clear.
There is no stats how many people were robbed, how many accounts where hijacked, how many keys were guessed (due to crap implementations) etc. I think there was no other technology in the world that lost so much of people's cash with no responsibility of any kind.
Yeah, just like gold - if you lived in 860 AC and thought copper was gold too - then it's a valid comparison!
This should also solve the scalability issues quite a bit by reducing the need to record as many transactions in the first place once the exchanges hold most of the coins.
Finally this should reduce the long-term potential in mining as the block reward keeps reducing exponentially with lower expectations of transaction fees.
Sometimes regulatory solutions do fix hard technical problems.
As monetary system Bitcoin, even more crypto in general, is still the one and only method to move money internationally in realtime with very low fees.
Never heard or used Lightning Network? Try it out on Cash App or run a node on an old laptop if you want to learn more.
> once the exchanges hold most of the coins
Exchanges hold a single digit percentage of coins, price will have to go to six or seven (or four) figures before they will hold most of the coins.
> Sometimes regulatory solutions do fix hard technical problems.
Sometimes regulatory bodies bend the knee and are last to the party, 15 years in this case. At least they are ahead of 98% of HN'ers!
But they don't have to worry, the 401k their company manages for them will make sure there is an allocation to a Bitcoin ETF
It feels a lot like when AOL first started supporting email in 1993. It's easy to dismiss AOL and Nasdaq as highly centralized systems that don't align with the ethos of decentralization. But the other way to look at it is a previously maximally centralized system is interfacing with a decentralized one in a way that gives the users of the former slightly more freedom and the latter wider user base and legitimacy.
Living in Australia and trying to invest in financial markets overseas is like pulling teeth sometimes, because every country has their own incompatible systems and local rules and regulations. And this is a developed well integrated country!
Crypto is the first time we have a global financial system that everyone can join without any one country being able to set the rules and control the system. This is extremely beneficial for countries that don't trust each other to be able to integrate and trade.
If you look at the history of empires, from the Romans to the Han, it is littered with instances of societal decline as a direct result of inflation and overspending. This unilateral currency debasement is much harder if the collective (and global) definition of money is determined by distributed networks of computers.
Maybe Bitcoin itself isn't the final form, but the fact that distributed systems and cryptography tech is out there means the cat is out of the bag.
Even if your view on the crypto industry is negative, it's important to take some time to understand why millions of people around the world are involved in it. It's not only because of the appeal of ponzi schemes.
The bitcoiner argument would be that only bitcoin has reached a level of decentralization to survive, and the powers that be stand ready to crush any would-be stronger substitutes before they reach critical mass.
Tens of thousands are invoved because of its technological promise and appeal which you've described.
This imbalance is the main problem crypto industry needs to solve before it truly reaches its potential.
I said millions because of every day crypto usage in countries like Argentina and Turkey, where inflation makes it challenging to save money, and in countries where there are high remittance rates.
More builders are definitely needed to improve the crypto user experience across a range of categories.
Nothing beats good old USD or EURO as an asset if you live in a country with hyperinflation.
Are you questioning the data?
https://www.statista.com/statistics/1202468/global-cryptocur...
Also USD and Euro are NOT great assets to hold. People only hold cash because they need it for transactions purposes.
remember that this is a country where the police take dollar-bill-sniffing dogs onto river ferryboats to prevent people from taking usd or eur across the river to their bank in uruguay
someone in a [dead] comment said, 'The most traded crypto assets in Argentina, by far, are dollar-pegged crypto-currencies.' this is absolutely correct, and from my point of view it's a total plague. also virtually everybody has their bitcoins in binance. but most of those people will still buy and sell bitcoin if that's what you want
Really? Direct? Pretty sure the Roman’s had many other things happening upstream of overspending.
Many things were going wrong.
There are several reasons we could argue that the Roman Catholic Church is the continuation of Rome and so Rome never truly fell.
That is what I was trying to say in the previous comment.
Not only was the decline of the Roman empire too slow and variegated to attribute to a single cause, "inflation and overspending" isn't even on the shortlist. If we're oversimplifying, it was more akin to the opposite of the sentiment that you're shooting for here: the decline of Rome was due to the erosion of centralized authority, which increased factionalism and caused the elites to at best become apathetic to the plight of the empire and at worst actively pursue its destruction for their own gain, leaving Rome ripe for disruption from without. A blockchain wouldn't have saved Rome.
Of course, we aren't living in the Roman Empire today. But what is consistent is that delegating monetary policy to a third party means that they can overspend and inflate the currency base, charitably for reasons of national interest, cynically for their own gain.
The rise of cryptocurrencies like Bitcoin is a sign that many people want to reduce their personal exposure to this.
No, they never ran out of the resources needed to expand. It just became more individually profitable to spend those resources on internal competition, and eventually civil war, than on growing the pie.
> This meant that the empire became too expensive to maintain without relying on tactics like currency debasement, subsequently triggering many of the other symptoms of decline that you listed.
Even if we take this at face value, that doesn't sound like currency debasement causing the collapse - if anything it allowed them to stave it off at least for a time. Businesses renegotiating their loans/bonds is normally a precursor to going bankrupt, but that doesn't mean renegotiating your loans/bonds causes bankruptcy; if you took your loans/bonds in a form where you can't renegotiate them, that only makes you more likely to go bankrupt sooner.
(Traditional currencies are in many ways like a slightly odd bond that doesn't pay interest)
Ironically bitcoin attempts to replicate this failed monetary policy.
Also I find it humorus when people complain about deflation, which pretty much is the natural condition of the world. New techniques and improvements will unenviably lead to products costing less. The problematic factor has always been the current ruling money being controlled by a central authority who will debase it.
The reason it's because taboo in modern times is ostensibly because it creates a disincentive to investment. Why invest in something that might return 5% with some risk, if your money will be worth an almost guaranteed 5% more in a year anyhow? IMO the "real" reason is because it's a proxy for politics. Governments spending trillions of dollars sends inflation skyrocketing - the US is only slightly guarded against this because of our unique ability to 'export our inflation' - a web search can elaborate more on the term if one is unfamiliar with it. So opposing inflation is largely a proxy for opposing excessive spending which is one of the main political divides, which is odd because both parties spend like maniacs - but one pretends to not want to.
The part your analysis is missing is that for a commodity currency there is a whole segment of productive, non-risky investments which cannot raise capital in a deflationary environment. If deflation is 5% and a civic works project with an effectively guaranteed 3% return is fundraising, who in their right mind would put money into that? Better to hodl than to invest in your community. There is, btw, a deep tie between this result and Henry George's analysis of the impact of rents, if you're familiar with that.
This basic phenomenon of the risk-free interest rate being non-zero, and its ramifications for the economy, is one of the most confirmed results of 20th century economic research. If you could get the risk-free interest rate to zero, it would boost the economy and lower unemployment with absolutely no ill effects whatsoever.
It was a self-protecting system. The problem is it assumed the US would keep to its word. Instead we got everybody hooked on the USD, started printing a bunch of money anyhow, and then just defaulted on our obligations when other countries tried to convert it to gold, and withdrew from Bretton Woods. This led to the famous quote from Nixon's Treasury Secretary: "The dollar is our currency, but your problem."
So you're only looking from 1971 onward. This not only doesn't look especially pretty [1] in countless sociopolitical aspects, but the tremendous economic gains we have seen can also be largely attributed to a complete tech explosion that reshaped the entire world's economy, which we ended up being the natural epicenter of owing to a relatively large population, English being the defacto global language of science, and the fact that we were left entirely untouched by WW2.
The current completely free floating global fiat experiment may end up being the shortest lived economic experiment in our entire history should it turn out that we're just blowing up the mother of all bubbles. And it sure does feel that way!
[1] - https://wtfhappenedin1971.com/
Top answer here is good.
Sorry someone posting a link to the absolutely insane conspiracy-tinged 1971 site gets an auto-ignore from me. Have a good life.
I actually used to be of the same mindset as yourself, but it increasingly seems to me that the general preference for inflation based economics is much more of a status quo bias than something as strongly supported by data as one would think. There's also a simple logical problem you run into. When you give government the power to freely print infinite money, who do you think they're going to disproportionately direct that money towards?
Recent times actually provide one of the clear illustrations of the problem. Mega corporations take on multi billion dollar contracts from the government at way beyond market rate markups, then the moment the economic weather shifts even slightly they start large layoffs. The reason is not because the integrity of the company is threatened or anything of the sort, but simply to continue maximizing value for shareholders. It's not hard to see how with monopoly money economics you start an exponential increase in many things, like income inequality.
The new coin supply (block subsidy) is reducing at an exponential rate and will soon not be able to even compensate for the rate of lost coins.
I really don't see how you can argue that bitcoin is inflationary by design when the period of inflation is a temporary necessity for the initial issuance, and then never repeats[1].
[1] Well, ignoring BIP42 that is.
The supply of bitcoins is limited. It's harder and harder to print new coins. It means that 100 years from now the new generations will have to make do with 0.0000000000000001 of a bitcoin while people who hoarded just 1 bitcoin 100 years prior would be infinitely rich.
The only incentive in bitcoin is to hold on to it as long as possible. And we've literally seen this already.
But in the past, money was made of materials that themselves had major value - like silver. And so you couldn't just print more money, because you had to have the valuable resources that it was made of to do so. So the way the Empire dealt with this was by simply reducing the percent of those values. Wiki has a table showing the composition of the Roman Denarius over time here. [1] The original denarius, from the 3rd century BC was 95%+ pure silver. By the 3rd century AD it was down to 5% silver. So the process of printing money in ancient times, ended up making the old money worth more, which is the exact opposite of what happens now a days!
A good analog here is the US penny. We've been debasing it over time, but all the way up until 1982, the penny was made with at least 95% copper. [2] So old pennies are actually worth more than $0.01 in raw materials, which is why it's currently illegal to melt pennies (and nickels) or sell them for their material value. So there are plenty of people hoarding these, waiting for the government to eventually declare them obsolete - enabling them to melt them down and make a large profit. It's a nice investment because your upside is uncapped and your max loss is $0, if you can get them at around the fiat rate.
Now imagine if 225 pennies was a year's salary, as was the case for e.g. Julius Caesar's professional soldiers and Denarii. It creates a huge motivation for hooooold, precisely caused by the government spending. Same today where the more we inflate the currency, the more old pennies become worth.
[1] - https://en.wikipedia.org/wiki/Denarius#Value,_comparisons_an...
[2] - https://en.wikipedia.org/wiki/Penny_(United_States_coin)#His...
[1] - https://en.wikipedia.org/wiki/Size_of_the_Roman_army
It’s ridiculous to claim any of this is good just because you think you have a chance to get some imaginary part of the big cake.
The answer to states that cannot manage their own money supply isn't outsourcing to ecologically disastrous shit coins limping along at 7 TPS.
All that said, hope your cousin is safe and well fed.
The value is immutability –not something censor-horny commies value, I'll give you that.
Censorship seems to be a property of any system, see the US. To this day, they are so stupid they censor nipples.
And of course Marx was seeing capitalism before it had done the majority of the good it has done over the past ~200 years.
If anyone thinks the good it did is anything but an accident I expect some people will be really surprised when it turns out how bad things are.
At this point it’s ignorant to not see how much damage it has done. But okay. Keep riding the dead horse.
The US is, for whatever reason, accepts extremes of both wealth and poverty. Many other capitalistic societies choose a different mix, sacrificing the upper extremes to protect against the lower extremes.
Personally, I don't think a deflationary global reserve currency is the precise answer, but I do believe that these experiments in monetary governance (like Ethereum's burn and mint model) will allow us to move closer to it.
No, we don't need some grand wizards in an ivory tower to finely tune the amount of money in the economy, that idea is absurd. The economy has worked fine for thousands of years before they started doing that. In fact, since they started doing it we've seen ever growing boom and bust cycles.
For now its supply still inflates by ~1.7% a year.
Neither you, nor I will live to see that moment when the last bitcoin will be mined (as long as miners keep mining in our lifetime).
Bitcoin exists as an option to a lot of very inflationary assets (currencies which not that long ago almost reached 2 digit inflation rates) and having different kind of assets should be welcomed in my opinion, as it seems like a good way to diversify the risk you can't "straightforwardly measure".
I like to hold at least one asset for which I can almost guarantee a supply/emission won't change... better yet I can trustlessly verify it. If these propositions are not attractive to you or others, they don't have to acquire this asset either, it is completely opt-in, unlike the fiat money which your government forces you to acquire to pay their taxes.
I know, I know… it’s all part of one of Dalio’s big cycles, and I just haven’t seen it play out yet, I’m naive and all that. Bitcoin save us.
There is little evidence to support this. There is an abundance of evidence of empires responding to the crisis of a population overburdened by debt by cancellation, though, if we're going by history to dictate what our current state should do....
Can someone short bitcoin with this ETF?
But there have existed regulated CME Bitcoin Futures instruments to short Bitcoin more than a half decade now.