Surely this is Satoshi's design goal.
Also don't worry about the exchanges operating out of obscure off shore islands, they probably arn't operating fractional reserves.
If someone can devise a way to perform the notary service without proof-of-work, I'm pretty sure Bitcoin will move to it. Right now, no other system has been shown to actually work. Proof-of-stake systems are in the works but, as far as I know, none of them are considered trustworthy at this point.
Edit: I would like to also say that I'm sympathetic to the opinion that Bitcoin mining is too wasteful of resources (i.e. electricity). I think the system is perhaps flawed in terms of the connection between Bitcoin price and the economic drivers of difficulty. When the price is high, the mining rewards are such that there is huge pressure to increase mining costs. Do we actually need that level of security? OTOH, hard to blame Satoshi for the design since it is hard to foresee how quickly the system gets adopted.
"The decentralized design that Bitcoin uses needs people to do lots of processing work"
The Proof of Work "algorithm" is completely unnecessary for processing transactions, and it's actually quite simple. To the point, PoW simply asks for a random number for the purpose of creating a lottery. If you want Bitcoins, you need to waste more real world energy and capital on hardware to print more lottery tickets (nonces).
The Bitcoin network and all the transactions on the network could easily be run on cheap hardware, a raspberry pi even. The PoW filter is a psychological tool for "governance" (write access) to the database, granted now exclusively to wealthy capital holders. Effectively granting the Bitcoin / PoW network to the wealthiest speculators who can devote resources to be sacrificed in return for digital lottery printers, which in turn give a chance to generate numbers in the cryptocoin database.
Curious why someone would design a currency system in objection to the financial plutocracy, when the design inevitably restricts control of the entire network only to existing capital?
It's no mistake Satoshi owns at least 1,148,800 BTC.
The Distributed Systems community awaits your proposal for a solution to Byzantine Fault Tolerance in open, decentralized, adversarial networks. Why would you withhold an alternative solution to PoW?
>The PoW filter is a psychological tool for "governance" (write access) to the database, granted now exclusively to wealthy capital holders.
No amount of PoW allows a block producer to write data to a node that a node operator hasn't consented to accept by their choice of consensus rules. Your argument is "capital holders" can force consumers to purchase whatever they produce. Consumers induce producers. Producers cannot induce consumers. Producers can /speculate/ that latent consumption may exist but without purchasing consumers, production will eventually end.
>why someone would design a currency system in objection to banks, that inevitably restricts control of the entire network only to existing capital?
Money warehouses and credit creators (banks) are not capital. Capital is the product of work / R&D / creation.
The largest brokerage is US-based (coinbase) and the largest exchange is Binance, which has most of its funds auditable on various blockchains.
Also just hold your own keys if you're worried about it. The ability to opt-out of custodianship is kind of the point.
No, they don't. They just have to sell a notation in their database that a coin is owed to someone. This is what MtGox did, and it's what Coinbase still does. The trick is to maintain just enough coin to be able to transfer out coins on request (as MtGox tried to do), or to just claim that it will take a few days to process the transaction (as Coinbase does).
Binance, which has most of its funds auditable on various blockchains.
A company owned by Binance audited Binance's books. And posted the results of the audit online...but not the underlying data. This is useful from the POV of conducting a third-party audit...
Miners do not custody funds. Large miners that control a farm can't run on empty, they need to pay for space, hardware, and electricity - they need to sell through crypto through a brokerage to end users to make a profit. The brokerage (e.g. Coinbase) may then custody those funds on behalf of brokerage users, but the miner no longer has it.
Mining pools directly pay out the pool contributors in crypto who then themselves decide to either save or spend.
There are some "cloud mining" services but they don't account for a lot of power and most end users play with them at a loss.
A brokerage does not own or generate new coin, it simply holds it on behalf of users and enables exchanges between users via the market.
"[Coinbase] claim that it will take a few days to process the transaction" -> This is very vague. When you withdraw crypto it generally happens near instantly. If you're talking about a purchase which involves processing a fiat withdrawal from a bank, that's not the same thing.
Re: Binance, you can audit it yourself at addresses like this: https://www.blockchain.com/btc/address/34xp4vRoCGJym3xR7yCVP...
There are plenty of exchanges in reliable jurisdictions (Coinbase, Bitstamp, etc.), why do a few shady ones matter?
Untrue. More could easily be printed if that is what the leadership/community wanted.
Who votes to increase the 21M cap, devaluing your own holdings?
Sir, it appears the nays have it..
https://en.bitcoin.it/wiki/Common_Vulnerabilities_and_Exposu...
thank you for sharing I didn't know something this critical had been found in recent years
True, but irrelevant. It doesn't matter either way. The point is that it can be done if that is what conventionial wisdom dictates is desirable at the time.
Again, it's an argument from ignorance and gross oversimplification to claim "the future wisdom of the community" will solve problems for bitcoin.
The technical properties of bitcoin can be modified, saying that it is impossible to change them is wrong.
Also I'm fairly certain a majority of hashpower, not just users would need to be on board with the change.
You could argue that as the primary beneficiaries of such a change (increase cap => increased distribution to miners) they would be for it, but I think most rational actors see the catch 22 of trying to profit by removing one of the core attributes that makes bitcoin valuable (it's scarcity)
There is too much argument over which chain will win, imo, its like asking which nation will win- it doesn't have an answer. We are humans, we excel at patchworked cooperation, which is why we have so many nation states and governing systems. There will be more than enough room for users to have many choices when it comes to blockchains for the foreseeable future.
A subjective opinion that is also irrelevant to the point. It doesn't matter how likely you think a fork is to succeed, the argument that computer software is impossible to change because "nobody would ever agree to those changes" is incorrect.
Except something as simple as increasing the block size to allow Bitcoin to process more than 7 transactions a second (Visa handles 42,000 tx/s comparatively). Theoretically it is possible, but the way Bitcoin is designed puts changes in control of people who stand to profit from preventing certain changes (i.e. Tragedy of the commons) like block size increases - and they are blocking it. The point is that Bitcoin isn't some piece of software that you can magically push any necessary changes to.
Just that the network known as Bitcoin can't do that. The block mined just 10 minutes ago was capped at 0.904 MB.
Anyone can mine a gigabyte sized block on their own computer, but that doesn't make it Bitcoin (even when branded as Bitcoin SV).
So you just pulling facts out of your ass? Read the white paper then come back
Is the full context.
Cherry picking the sentence to be patronizing doesn't work very well when the context is actually your own example...
You mean that it is as good as cash. Bitcoin become a failed project, a big internet casino. Some people want to use digital money to make payments and get paid, you know?
The success of the facebook coins depends by the ways to redeem the tokens(i.e do other shops accept it, can they be cashed out at atm, can you use it with 3rd party wallets etc)
Alice: A gift certificate is completely different from cash.
Dilbert: No, it's not. They're both pieces of paper you can exchange for goods and services.
Alice: You're missing the point.
Dilbert: Actually, a gift certificate is worse than cash, because you can only use it in one place.
Wally: And it expires.
Alice: At least it shows some thought.
Dilbert: It shows defective thought. You're trading perfectly good money for something that does the same thing, only not as well.
Facebook’s currency may not expire or be limited to one place, but it does seem to me that “it does the same thing [as money], only not as well.”
I don't know but each time I try to show my cash into the computer... nothing happen.
Libra does the same thing as "Paypal" would be more fitting, but then you forget that not everyone can use Paypal and that's where your logic fail.
Venmo is always my best example for that, because I do have a Visa card, I do have a Paypal account. I'm in a developed country, thus I don't have issues to do transactions online. I still wouldn't be able to use Venmo though. If you were to only accept my transaction from Venmo, because you didn't like Visa and Paypal (yeah I know Venmo is owned by Paypal but you understands the point). Now imagine this world, but without any of theses.
- Anyone can own a Libra wallet, me, you, someone in the middle of a third world country.
- Anyone can transfer from a Libra wallet, to another, me, you, someone in the middle of a third world country included.
That means that anyone can arbitrage values of Libra, anywhere in the world, whether Visa, Mastercard or Paypal decide that market worth it or not.
Thus, anyone can pay using Libra, which make Paypal, "the same thing [as Libra], only not as well."
That's the whole issue. You forget about everyone else that don't have access to Paypal or Western Union, or even wire transfer.
This "facebook coin" likely has none of these properties.
By your logic if I exchange dollars for euros to spend on a vacation somewhere that means the dollar has failed ?
Now imagine you get paid in bitcoin, save every month for a holiday or a high value purchase. When the time comes to make the purchase you find out that your savings are worth less than 10%. How does it feel using bitcoin?
I tried to use bitcoin(as a merchant) but due its volatility it makes no sense to use it(as merchant or buyer).
Furthermore, good currency should encourage investment (into things) which means it needs to be (slightly) deflationary (to introduce a cost to not investing into production). Otherwise you get into a paradoxical/toxic situation where NOT producing useful things becomes financially advantageous.
This is not true. Forks exist, and anyone can make 21 million bitcoin at a time. It’s still a question of if people will accept the forks, but it is an option
Here’s my point. Is it theoretically possible for some group of people in the physical world to take actions so that what we generally call Bitcoin has 1 more coin? I strongly believe yes. So the world isn’t as black and white as some people like to say it is.
This is the bait-and-switch of crypto. People act like it’s all code and messy humans aren’t involved and this just isn’t true.
The original comment I replied to said there will only ever ever be 21,000,000 Bitcoin. I believe this is not fundamentally true because “Bitcoin” is whatever people say it is. If we all agreed to accept a fork with 22mil and call it Bitcoin, then that’s what it is. Sure, that old fork only has 21mil, but who cares? Old forks get dropped all the time.
This all isn’t entirely theoretical. This already happened with the other major part of cryptocurrencies, the immutable blockchain. What we all call ETH has a rollback in it!
No, this hasn’t happened with BTC but there’s no reason it can’t. Every second that the Bitcoin blockchain doesn’t get rolled back, every second that there are only 21 mil possible Bitcoin is because we all collectively agree that’s the case.
I argue that they’re about the same. A corporation is largely numbers in computers and how people feel about them. A cryptocurrency is numbers in computers and how people feel about therm.
Typing this out makes me appreciate gold a bit more. Gold is gold, whether we give it a different name or not. It’s not pure thought-stuff like a corporation. The problem is it only has whatever value we give it, so I’m certainly not arguing it has inherent value or is a better currency.
I would also bet good money that most corporations in the world do not map directly to a business-process-in-action. Most corporations are a layer of abstraction of ownership. There are many more of these than real businesses in the physical world.
However, at least in the US, a company is not allowed to choose a stock ticker already in use by a company publicly traded on a US exchange.
I don't want to invest in money. I want to exchange my money for goods and / or services. It seems that bitcoin is great for the former and not so great at the latter :P
I see you're unfamiliar with Bitcoin SV, Bitcoin Cash, Bitcoin 2, Bitcoin Segwit...
It'd be like if counterfeit designer clothes were actually indistinguishable from the "real" ones, and arguably better made in some cases.
Also a better analogy would be that you can make 1000 copies of the Mona Lisa in whatever way you want, they will still be just copies and they will be worthless.
Your analogy is more like getting the Facebook database and spinning up 100 clones of it, all with 3 billion users. Now "Facebook" has 300 billion users. It could have a trillion or a quintillion right? Or an infinite amount. But what does that even mean if the actual 3 billion people only use the original network? It means Facebook is still Facebook, and forking it, in terms of how it affects the network it its value, is relatively pointless.
You're not making a real point.
If a clone of Bitcoin is identical to Bitcoin then why does Bitcoin trade 25x the price of a clone? Your argument would cary weight if the protocol and price facets were similar. The market says otherwise.
Because humans are stupid, faddish creatures.
The market can remain irrational longer than you can remain solvent.
An appreciating asset is the exact opposite of a currency. You want your currency to be stable, or slight inflation/devaluation over time, or the consequences are it will never be used to transact.
Tether became (at least for a time) a favored method for cryptocurrency investors to shift their positions to USD. I think Facebook has a good chance of doing the job better with Libra than Tether has done. This might put Facebook into an advantaged position in future payments services and cryptocurrency.
(One thing that just occurred to me: would it be possible to alter the operation of a stablecoin, such that parties who are trying to corner the market will automatically expose themselves to other parties who would exploit them?)
What if Facebook also came out with a stablecoin to the Yuan, the Pound, and the Euro, as well as their own non-stablecoin cryptocurrency? I suspect that this would give Facebook the same kind of information advantage currently enjoyed by petroleum multinationals in the petroleum market.
(EDIT: Euro)
The idea behind bitcoin is that you don't need to rely on the US government for storing value. There are 21,000,000 BTC ever ever, you can't print more.
That article did not address this at all. This is the most compelling reason to buy bitcoin.