There were many attempts to create virtual money which cannot be shit down, and all of them dated before Bitcoin failed due to government intervention. Bitcoin solved that, and the simplest solution was the wasteful proof of work.
Of course, when someone is using the same principle for something centrally controlled, which can be done by a database, that is a different story.
He was looking for ways to use blockchain to help regions with unstable currencies. Well, he was doing his Ph.D, actually on that topic.
So he would approach people and suggest they all meet up and have this think-tank somewhere in North London.
Now imagine you've got about 20-30 people sitting in the same room: and they are all engineers, regional managers, financiers. Not a single person has _any_ idea what blockchain is.
They were all meeting weekly to have this hours-long discussion about how they could possibly apply this thing blockchain to solving issues in the third world countries.
> There were many attempts to create virtual money which cannot be shit down, and all of them dated before Bitcoin failed due to government intervention. Bitcoin solved that, and the simplest solution was the wasteful proof of work.
One of his ideas was to create virtual money. But they forget that _secure_ proof-of-work-based money would require the same amount of initial investment (mining hardware) as if you simply went and bought several tons of gold and then issued a currency supported by that gold.
The security of the Bitcoin network isn't a function of its hashrate or the number of nodes, though these things correlate; it's a function of the cost of running it.
Regardless of whether the network is run on specialized hardware, old desktops, or TI-83s, the network is only secure so long as it costs enough to run that any motivated attacker would have to spend more money than they can leverage to attack it.
https://thenextweb.com/hardfork/2018/05/30/heres-how-much-it...
But do you actually want to do that? Who are you providing a service for by doing that?
We know the answer: Scammers and criminals, by and large. Everyone else is better served by a centralised service.
Just pointing out that "scammers and criminals" is clearly not the only ones benefitting from Bitcoin, and I would suspect it is also minority.
Commodities can be sold and consumed for some real economic purpose. Cryptocurrencies can't. It's like gold except you can't see it or make jewellery from it or use it for anything.
- prevent or reverse any of my transactions
- confiscate my bitcoin, or even find out how much I have
You can't, and never will.
Some cryptocurrencies are scams. But if you're saying all cryptocurrencies are scams, you're simply saying math and economics are a scam.
I read a great question here on HN a while back to enthusiasts:
If you were the last person in earth to receive coins, would you still like them and endorse them?
So many comments can be traced to the idea of becoming richer. Compare this to the Euro: When the Euro was introduced as a currency in the EU in 2001, people gave zero fucks whether they were first to exchange their old currency for the new one or the last.
This is a bad necessary condition for considering something a currency.
I definitely cannot pay my taxes in USD. Does that mean USD is not a currency?
Or did you mean that you have to be able to pay taxes with it somewhere? So, hypothetically, if someone founded a microstate which allowed paying taxes in Bitcoin, then it would become a currency? But that seems ridiculous given that it would have exactly zero impact on me unless I moved there so I don't think you meant that.
As a matter of fact, I often (read: most of the time) cannot buy things using USD in my country. Yet I am a holder of USD and spend it when buying things in my country quite often. How so? Well, I sell the USD in exchange for my country's currency at the point of sale, just like Bitcoin.
On the contrary!
'Money' is just IOU notes. What gives these IOU notes value is that governments use them for paying welfare and civil servant salaries, and in turn take them back when collecting taxes.
> So, hypothetically, if someone founded a microstate which allowed paying taxes in Bitcoin, then it would become a currency?
Yes. But with a caveat: the wealth of a government's welfare/civil servant class and the threat of its tax collectors is what gives currency value. The blockchain here is entirely superfluous, this hypothetical currency would be just as valuable regardless of whether a cryptocurrency scheme is used.
So then the various cryptocurrencies fit the bill because a lot of people are willing to treat them as IOU notes among themselves.
> What gives these IOU notes value is that governments use them for paying welfare and civil servant salaries, and in turn take them back when collecting taxes.
But if some people are willing to treat a cryptocurrency as IOU notes, then that cryptocurrency is exchangeable for a currency like USD, EUR, etc, again allowing me to pay those taxes. This is no different than the case of me using USD to produce money for paying taxes to my own country which doesn't acknowledge USD, which you haven't addressed.
> Yes. But with a caveat: the wealth of a government's welfare/civil servant class and the threat of its tax collectors is what gives currency value.
I disagree. I agree with your initial point, though: money is just IOU notes. As long as there is someone willing to buy those IOU notes off of you, it's valuable.
Yes, but the 'crypto' part is unnecessary. You can just store these IOU's in some Postgres database, and the effect would be the same.
And you can pay your taxes with crypto: https://thenextweb.com/hardfork/2019/07/16/canadian-town-pay...
Nothing is going to replace fiat overnight, but crypto is far from "not a currency"
At least gold has real uses in jewellery and industrial applications to put a floor under its value.
You're bartering for heaps of stuff. I get heaps of stuff by offering services or other stuff in exchange. Yet my services or other stuff are not a currency. And some towns accept taxes in form of community work for example which is also not a currency.
> crypto is far from "not a currency"
It's explicitly called "not a currency" by both Fed and the ECB as far as I know. Now it all boils down to whether you prefer your personal definition of currency over the one coming from central banks and laws.
Alternative currencies are the same as alternative facts or alternative truth. They can have the same effect as the real thing and be used successfully achieve the same purpose. But they shouldn't be confused.
We're on a highly technical site so I would expect the same degree of accuracy when using terms from other fields as you expect when talking computers.
In this example, bitcoin can be exchanged for goods and services, much like an approved currency,so the end user doesn't care what you call it just that it works,and in that respect bitcoin does work.
Some critics seem to like making frankly ill conceived semantic arguments about the academic definition of a currency (or on your case, appeals to authority), but it really has no relation to whether Bitcoin is going to succeed or not succeed.
Therefore cigarettes are currency. Liking something is not an argument.
> frankly ill conceived semantic arguments about the academic definition of a currency
My argument is ill conceived because it's "just" based on the academic (legal) definition of currency? We truly do live in a world of "alternative truths” and “alternative facts” where using the actual definition of something in a relevant context is frowned upon.
The arguments that people usually make about Bitcoin not fitting the legal definition of money are ill-conceived because they are semantic. Apparently, money is: a means of exchange, a store of wealth, a unit of account. It is clearly all of that to some people, so it undoubtedly fits the definition. But just because it fits into the academic definition of money, doesn't it can't be considered an asset. It fits the definition of an asset as well. Coincidentally, Wikipedia says about the term asset: "It covers money [...] belonging to a business or person".
Of course, now we are talking about money, not currency? What's the difference between money and currency?
These are all very interesting questions for linguists. But if you want to have an actual argument about something other than semantics, your discussion has to be grounded in why you care about one term or the other being applied.
We can either take the “everything is a currency” route but that gets us nowhere, or accept the official, legal, and recognized definition. The “ill conceived” argument based “only” on facts so to speak.
The definition used by economists includes much more than just fiat money. The definition in most dictionaries includes anything used a medium of exchange. Paper money isn't even the most common form of currency these days (beaten by credit cards, checks, and electronic funds transfer).
Most (important) national central banks as mentioned in my original comment.
The only major central bank that is truly dabbling in crypto is the PBC (that's People's Bank of China) and I think the consensus among people in the sector is that it's really a speculative move, just like most ICOs.
Edited for courtesy. It initially felt like one of the classic methods of arguing a fact on HN: request citations worthy of a PhD thesis for every single word. It's unfortunately all too common here to deter anyone from contradicting.
[0] https://www.pymnts.com/cryptocurrency/2019/eu-central-bank-s...
I asked the question hoping to learn something, and I did. So thanks for that, if not for the attitude.
Also because I noticed only now, whether currency is paper, electronic, or any other material is not actually what tells currencies apart. But while classic legal tender is backed by the goods and services of the country that uses it (I know this part is a bit arguable but let's go with it), crypto is more or less backed by nothing but the trust that the blockchain can't be hacked. One bad hack and the value of BTC becomes 0, something very hard to do with a classic currency but catastrophic if it happens. It's also very susceptible to volatile bouts, as seen before. BTC could be a "real" currency but it would be an overall bad one that could not replace the classic currencies in it's current form. It doesn't mean it can't become one but it would have to change in ways that would take it away from the current BTC.
Take a hypothetical CMU (Close04 Monetary Unit) backed by the value of my belongings. That's a token that goes up and down in value as I buy more stuff or my house gets more expensive, or as I issue more tokens (inflation). But it's only as valuable as the trust you have in me and the laws that prop up that trust. If I sell all my stuff and disappear your token is worth nothing and there's very little you can do. There are no protections, there's no legal mechanism that prevents me from selling my stuff. For a coin to become a proper currency it needs some of those props. Unfortunately most people are internet educated in these aspects so they only understand once they get swindled. Every time a cryptocoin is abused, an exchange goes bust, you see a lot of converts and crypto regulation starts to sound better.
As for the rest of your question, the people give them the power as part of the democratic process. Many people realized that whether they like it or not the little protection they get from a government is better than nothing. And it's enough to look at people's reaction when they get swindled out of their completely unregulated coin: ask the government to fix it and punish the swindlers.
Sometimes I cannot buy legitimate stuff without them. Just today, I bought some books for which US credit/debit cards refused to work. And I see that every week.
> you can’t pay taxes with them
https://techcrunch.com/2018/11/25/ohio-becomes-the-first-sta...
In the end I stumbled upon a shop that accepted bitcoin and got my PSN card in the time it took to get one network confirmation.
So I can use them as a currency. It's like duck typing. If it looks like a currency and behaves like a currency, it'd a currency! (Overly simplistic I know, but I'd challenge the idea that it outright can't be a currency)
You're paying not in bitcoin, but in the value of those bitcoins converted to a legal currency.
Otherwise those businesses are just avoiding taxes, it would be better to pay in gold, at least it has a stable price.
Paying in Bitcoin is the same way you just described as "paying in gold".
If I was the last person on earth, I wouldn’t care for gold, precious metals diamonds, stock, bonds, cash and a whole lot of other assets (+ other last person on earth issues)
They are soft at touch, you can make origamis out of them or even eat them
Are you being serious when you're asking that question? That question seems to be a product of an echo chamber.
Anyways to answer your question, yes, why wouldn't you still receive and endorse them? The idea behind cryptocurrencies is follows:
* Bitcoin is the cryptocurrency which is aimed to be the perfect store of value. Because it's fixed in supply and has the maximum network security, it serves as a backbone of the cryptocurrency ecosystem. Govts and pro-intervention economists don't like it, but Libertarians and (real) pro-free market economists love it. Even if you're the last person to receive bitcoin, it's still a better option because now you can save in a non-inflationary currency.
* Ethereum and other smart contract platforms allow creation of decentralized contracts between people, this facilitates creation of a system which isn't tied or dependant on the state to enforce it. Even if you're the last person to receive Ethers or Tezos or Cardano, etc, you're acquiring it in order to use the network. It's like asking would you like to be the last person to receive the arcade machine tokens.
Bitcoin was a product made to make rich people richer like Ponzi schemes or multilevel marketing.
>It’s impossible to count how many of those abandoned transactions were successfully replayed on the new chain
To detect if transactions were double spent, you would need some sort of database. Like a data base with _really_ good integrity. Maybe with periodic and limited deltas. Increase the some of the integrity with decentralized time stamping, sleeping-beauty hashed chaining. hmmm I wonder if there is anything like that...
Cheekiness aside, it's possible a node could ascertain whether or not transactions were replayed and definitely not impossible. The steel-man reply is: node software doesn't have great resources to do it.
Nodes in Bitcoin do not care if these transactions were reversed across chains, they only care about the transactions on the one most work valid chain, where "valid" is a set of rules expressed in the software binary that node is running. Two nodes can disagree on validity rules and literally never find out. Or a block can trigger a fork in the 2 nodes and then we need developers to tell us which chain is valid Bitcoin (see 2017 fork). While this is happening, transactions can go from being settled in a valid most-work chain to suddenly being considered invalid because everyone else is rejecting that chain.
It's a faulty design for a global payment network. We'd expect it to be predictable in how it handles transaction reversal and for human entities to be held accountable for ruleset changes.
A) >It’s impossible to count how many of those abandoned transactions were successfully replayed on the new chain
now it's
B) >nodes don't know if re-org's are happening elsewhere in the network
Claim A is false as it is indeed entirely possible:
I have a chain of height 100. It is fully synced. I am sent a series of blocks diverging at height 80. I have all the information I need to ascertain which of the transactions in the two competing chains are being replayed or have been doublespent.
Claim B is true
The comment I was replying to claimed that transactions can never be reversed. I'm just highlighting how this represents a poor understanding of how Bitcoin really works.
'The market' is a handful of powerful miners anyway. As if your 1 vote could do anything about some fork abandonment or whatever. Also, do you monitor the whole network constantly? You have to sleep at some point. You know who does constantly monitor the flow of currency to a somewhat trustworthy degree? Banks and governments do.
The quantity is irrelevant, the exchange rate that reaches equilibrium is what is relevant
[1] There are marginal second order effects with human psychology (people feeling like they got more of something)/ brokerage arrangements (1 share being the smallest divisible portion of ownership that a SE will clear causing share subdivisions needed to be cleared by a broker)
If a company simply turned each share into two shares, then the market cap would be the same but the fractions of the markteshare that can be traded are smaller.
If the company suddenly issued the entire stock on the market again, the price would plummet to half.
In practice, this does not seem like a large problem.
Bitcoin's public ledger is especially vulnerable to FBI "follow the money" investigation. Only one end is required to be known, and the entire trail is easily followed.
The federal agent who stole a portion of Dread Pirate Roberts' Bitcoin was quickly tracked and prosecuted.
The funds are transferred to a wallet, they are mixed with many other coins, and then they are paid out in different sized transactions to the recipient.
Assuming you have a busy enough pool, it should be technically untraceable.
If we’re talking about number of projects then I can’t disagree, there’d be no argument.
It's scams all the way down.
Because they deliver what they promise, and I get from them exactly what they say they’re going to give me.
Bitcoin doesn’t advertise itself as getting rich. It says it’s a digital ledger and wallet. I can use it like that. Ethereum, a platform for creating tokens and contracts. I can use it to do that. XRP, well that’s one for the banks so I’m taking a punt, but they’re doing real settlement.
Bitcoin, Ethereum, and XRP aren’t scamming me. The guy asking for Bitcoin on telegram, yes.
The technical layer is entirely separated from the business layer.
If someone wants to rob you of all your bitcoin, they can hold a gun to your head until you give it to them. A bank, on the other hand, has transaction limits.
If I buy something online with a credit card and soon after discover it's fraudulent (which has happened to me on multiple occasions), I can reverse that too.
But what we want is that once transactions are recorded to a ledger, that it's not possible to remove that record.
This durability is a highly valuable property for financial transactions and other things where non-repudiation is desired. However, it's a possibly scary property, too (what if something copyrighted or illegal ends up in the forever-durable and public ledger?)
A "revolution". They just applied SSS. Hardly rocket science.
But as soon as you make a transaction, in or out, the transaction history of those coins is exposed. And as soon as you make an infosec mistake, you're at risk of loss.
Kin has more in common with banking than crypto. It was just a blatant money grab by a company with low enough morals and the stupidity to do so and think they were above the law and wouldn’t be punished for blatant disregard for securities law.
I understand that in particular cases (e.g., hyperinflation), you may prefer cryptocurrency, but for the vast majority of people, official currencies and regulated banks are much safer and practical.
I converted all my fiat back in the days to crypto. I didn't feel safer back then, but later on as the value skyrocketed and I diversified crypto gains to all kinds of assets my comfort level increased very nicely. I still have good stake of crypto, now I wouldn't feel safe not having some amount.
Given that our government is democratically elected and all laws have a democratic foundation what you call freedom I would call criminal.
In that regard cryptocurrencies have a problem.
No, cryptocurrencies don't have a problem if some random guy on internet thinks nonsense.
Now I have a suspicion who was that mysterious Satoshi who had remarkably good industry-grade software skills.
Take gold for example, people believe that it has value and trade in it. The price of gold is decided on the basis of market forces of demand and supply. Similarly, a cryptocurrency's worth is decided by the demand for it. If enough people trade in it, then it can be used as a bartering currency. Heck, even if enough people decide to use eagle's feathers as a token to buy and sell goods in exchange for, it is valid currency for those set of people. The larger the set, the more accepted the currency.
Gold has superior chemical and physical features, quantum computers are built from gold. One third of the demand comes from jewellery which helps inflate the price, but even without that you hold some of industrial value, just the price would be 1/3 less.
No, cryptocurrencies are not a "commodity," "digital gold," "store of value" and they aren't valuable because "hey, dollar has no value." This is all nonsense.
When you have a humanitarian catastrophe or a conflict first thing enemy does is cut out the energy. Bitcoins are useless.
Physical gold can allow you to travel out with your family. Oil will have value, antibiotics, food, guns, jewellery like Rolex will have some value.
These are commodities.
Yesterday I had to wait one day for my transaction because my gas fee wasn't high enough. Lost 10% too. I get cross-border payments that are instant and without a fee and volatility.
While I see many interesting and even exciting use-cases for cryptocurrencies and even more for blockchain I'm not too bullish on the 'asset' part.
A dollar for example just represents itself. You can't easily find out how many dollars actually exist, have been traded or how many dollars will there be.
A crypto, on the other hand, is completely transparent. The ledger contains the history of all transactions which can be verified. Also cryptos are produced in a completely deterministic way.
I'm probably late to the party here... but just how many transactions can be handled in current ledgers? I mean... let's say everyone on earth suddenly agreed to use some crypto. You suddenly have lets say 4+ billion people (let's ignore kids) doing transactions per day.. can that be anywhere near supported with any current cryptoscheme?
As are your debit and credit cards, Apple Pay, Google Pay etc.
Semantically, crypto is a "commodity", its just digital. Some also behave like securities, so it get complicated, but BTC can be compared most to gold.
Git cannot provide byzantine fault tolerance. The fault tolerance it can provide is costly in human time.
Senior Engineer: Hi, I'm new here and have built a better blockchain. Let's use a chain of hash digest. It's way more efficient than PoW. It only costs .001/tx
CTO: But we need decentralized time stamping not the smaller set of always-online tamper detection.
SE: It's ok we'll be able to tell if the state updates change by monitoring the chain of hash digests. :>
[Months Later]
SE: Well, some attackers knocked our machines offline.
CTO: How do you know that the state updates between when the attack happened and when you got back online are valid and uncontested? You built some stupid slashing mechanism and if we publish invalid state our business goes under.
SE: We'll I'll have to go in to audit the logs, hopefully find some other people who have logs, and write software to see if maybe we can detect anything.
CTO: Isn't that going to blow up your transaction costs?
SE: I estimate 30k in total costs to do the audit.
CTO: so over our 800k customers that'll increase your tx costs to .038/tx, your hash-digest solution doesn't seem to be a cheaper alternative.
SE: I'm quitting to launch an ICO
CTO: Thank god.
Basically all the ICOs --Kik included-- are fraud: they won't be able to achieve what they claim to be able to do (governed by unavoidable physics, CS, cryptography, DS constraints) and punters have a myopic belief of what they can do. They gain market share by publicizing Bitcoin's very specific limitation. Bitcoin continues to chug along, is very clear about what it can and cannot do.
It's painful to have an appreciation for DS and a view into the cryptocurrency space, in the same way it's painful for a IETF network engineer to have the internet ossify around TCP and UDP. Yes there are drastically better CS primitives to engineer these systems with but the switching costs (social and economic) of transitioning a network are higher than the benefits.
e.g. https://support.mindbodyonline.com/s/article/Best-practices-...
Maybe you haven't encountered a need for BFT in organizations that you've observed but it would be fallacious to say "...and ergo no organization would need BFT" (round-trip fallacy). I agree that an org doesn't need BFT if:
-Their hardware never fails
-Their hardware never goes offline
-Their permission structure never changes / No (permissioned hardware or employee) ever become unpermissioned at the human layer.
-Their hardware is in critical time sync with other system all the time.
-...
I have yet to see such a system but do see many people who don't realize their DS needs. That's fine, most people don't understand the delayed costs in not properly auditing unstable logs. Someone's got to work for bitcoin in the future.
But seriously, sure some people just push blockchain stuff to get money from investors. But I can buy drugs using Bitcoin. I can't buy drugs using git. So there's probably a difference between them.
But regarding using them I am very content using minuscule amounts of them to store computations on other people’s computers
I really like the redundancy and so many witnesses, but thats just my use case.
I find the excess holdings and speculative use cases are wrong, for most people, but without their greed the database and computational log wouldn’t be viable
chx: Scam!
Yes, they are a new kind of scam, a good name suggested is Nakamoto Scheme.
https://prestonbyrne.com/2017/12/08/bitcoin_ponzi/
Also notable: https://davidgerard.co.uk/blockchain/2018/04/05/debunking-bu... which doesn't outright call it a scam but certainly points out
> Git gives you pretty much everything offered by the business case for blockchains. The one thing it doesn’t do is add a ridiculously wasteful proof-of-work mechanism for who’s allowed to add transactions to the <del>blockchain</del> repository. Multiple examples of actually useful software branded “blockchain” turn out to be simplified versions of Git.
> Git was released in 2005, four years before Bitcoin — none of the good ideas in blockchains are new, and none of the new ideas have turned out to be much good.