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.
- 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.