I couldn't read the article, but I think part of the significance is that bitcoin is believed by some to be a new gold standard that investors would fly to as a store of value and medium of exchange when other markets are failing. But the reality is that it performs no differently than a volatile tech investment, and in doing do negates a big part of it's putative value proposition.

I agree with everything in your comment, I just think it's worse than an energy intensive, non contributing tech stock, it also doesn't do any of the things that people talk up as reasons to buy it.

At least when Apple was circling the drain back in the late 1990's it had assets that more or less meant there was a floor for its stock price.

I see no floor for crypto.

It does have the natural floor that it's unlikely for your personal holdings to somehow turn into debt, at least. That's ... better than some assets you could hold.

>it had assets

That doesn't mean there is a floor. If there is no demand for any of those assets they would be worth nothing.

USD doesn't have a floor either. One day everyone could just decide it's worthless scraps of cloth.

USD is fundamentally different from cryptocurrency. For one thing, there will always be demand for USD because Americans have to pay taxes in dollars. If you’re an American and you make $X in a year, you have to buy ~1/3 of that in USD to pay your taxes, no matter what.

Bitcoin by that logic will also always have demand because you will have to pay your ransoms in it.

It sounds like a joke, but yes, it is the things you can buy that determine a currency’s utility:

Drugs, remittance, ransom, exiting a crashing fiat, and a 21st century gambling experience.

So exiting a crashing fiat is like a fire extinguisher or a pistol, worthless until such a moment it is the only thing that isn't worthless.

Drugs, too, I defend the actions of the victims of the opioid epidemic in seeking drugs, they were actively tortured for most of their waking hours by a multi-level-marketing pharmaceutical scam. Those drugs weren't recreational, they were an anaesthetic in response to malpractice. Like the Sacklers are literally hard drug dealers, they literally have a monopoly on legal heroin and cocaine. Or should I say OxyContin and Adhansia. They did that through legal bribes as a cover for additional fully illegal bribes, inviting doctors to hedonistic islands to get compromat, treating the FDA like their personal lapdog, disgusting acts of philanthropy with their ill-gotten gains, medical media, and the ordinary media.

So like if they are cornering the market and intentionally cheating the patients out of antidote while increasing the doses of poison, you know what, don't tell me black is white. The legal market is shit and the illegal market is superior. And in fact the only limit to their cheating their patients out of medicine is presented by the black market, that's the resistance and why the problem wasn't even worse.

This response seems more related to the morality of drug addiction (through big pharma or dark web). I don't think you can say that the illegal market is superior. There's a lot of downside: Buying heroin and getting fentanyl is an example. My only claim is that cryptocurrencies are useful for things that are at odds with national governments (circumventing their legislation, or dealing with the fact that they're dysfunctional), since in those situations, fiat doesn't work well.

Do your homework, fuck. You can buy kits to test drugs for purity on those same black markets. It's playing with fire, use your judgment.

I would say fentanyl sounds disgusting, but OxyContin is even worse, because at least fentanyl you're not being tortured for ten hours a day. The dealer isn't gaslighting you about dosage. There are opioids that strong and there are like jeweler's scales you can use to mete them out.

So in particular I never had an interest in hard street drugs, just sounded highly unattractive. Like falling into a black hole. To feel happy? Come on.

You probably have a better chance of convincing your hackers to accept Monero than the US government to accept anything other than USD.

The fact that there is forced demand does not matter because the supply is potentially infinite. Look towards any episode of hyperinflation to see this on full display. You need both limited supply and non-zero demand to guarantee scarcity and thus value.

That's no how money works, money is mostly created by demand (93 to 97% in developped countries with efficient banking system). And that money is easy to destroy too, you could destroy 93% of existing dollars by reimbursing the debt owned by household, companies and US government.

How can you just ignore dozens of hyperinflation episodes? Clearly there are situations where supply becomes infinite.

Sorry, i should have said: that's not how money works in modern economies.

I'm not ignoring hyperinflation, but clearly it has nothing to do with Zimbabwe or Venezuela. The only comparison could be the Weimar republic, as this disaster was caused too by production deficits (France invading the Ruhr valley+ loosing colonial income), but obviously similarities stop there.

America could get rid of taxes or stop existing altogether. There always exists a risk of demand drying up.

In that scenario, I don't think anybody is using Bitcoins either.

Fair point.

Stocks have real assets and intellectual property, USD has the USA army and economy.

Real assets aren't inherently more valuable than digital ones. I've spent much more on digital assets in my life than on physical assets. Cosmetics in video games are much more valuable to me than like clothes in real life. To me buying physical stuff is mostly a waste of money.

The USA army could be dissolved and the economy could switch to use something else. Of course these events have a low probability of happening but if someone wants to say something else doesn't have a floor because demand could dry up you can't say something else does have a floor even though demand could dry up just the same.

You've spent more in your life on digital assets than food+clothes+rent+etc. together? I doubt it.

Yes, that is correct. In the physical world I live minimalistically because I don't value physical things as much compared to digital things.

I cannot understand this point of view. In what world will you keep enjoying your digital cosmetics after the USA army is dissolved?

They were independent statements. But yes, if for some reason the USA dissolved their army I would still enjoy playing video games.

Maybe that was a bit facetious, my point was that there are no digital assets without a physical guarantee

I don't quite understand what you are getting at. Could you explain a little more of what you mean? If I have a CSGO knife why would I care about anything physical?

Because CS had physical offices and servers behind that digital knife. Lacking a physical security guarantee like the army, some armed group or nation state can simply take or destroy the physical things from CS and there goes your digital possessions too.

It's hard to imagine, but basically a state does need some level of force to be able to protect property rights. Without that you can't have much of an economy period, nevermind a digital economy.

How old are you to have spent more on digital than physical? Do you not buy furniture or tech?

Early 20s. Physical goods are worthless to me compared to digital ones. My hardware is pretty much the only physical thing I invest into because it's the portal to the digital world for me.

I'm biased but I'll say that as you age you'll value much more the physical world - a partner, children, your house, a pet. The best things in life are offline.

At one point Sun had more in cash than its market cap?

> also doesn't do any of the things that people talk up as reasons to buy it

Which is ironic because every time it fails to do that people come up with a new raison d’être.

Cash replacement, ownership ledger, replacement for the existence of fiat, probably a ton more.

Pseudo-gold/store of value is just one of the more recent ones.

It hasn't failed for anyone following a moderately informed buy-and-hold strategy. I bought some bitcoin in August '17 and thought 'we'll see in ten years'. It has remained greener than any of my other investments.

That's the thing though. The utility is what informs the perceived long-term value. It isn't meant to be an investment, it is meant to be a currency. Beanie Babies weren't a currency or an investment, they were a toy.

does gold swing 10% a day in price?

I have all the same concerns regarding pollution, but Bitcoins rise has made me think a lot about the 'value part' in other stocks.

If Bitcoin's price can get this high without the 'intrinsic value' or producing something, then this effect probably also exists for other stocks. And this made me wonder: how big of a factor is this in other tech companies.

The more I think about it, the more I feel that it must be the majority for many of them. Many companies operate at a loss and are just pumped up to push up metrics, just so someone else will pay more for it in the next round.

Yeah, people have bought stocks on future expectations - specifically, future expectations of being able to sell it for more than they bought it, and for more than if they bought something else instead - for quite a long time, compared to buying just on what has already happened.

But they still use concrete financials (e.g. growth of revenue is just the derivative of revenue) to make those decisions, and are assuming that the future buyers will be looking at similar numbers that are based in the same real economic business process.

The fundamental case for bitcoin-as-an-investment[0] is much less well-defined, and differs far more depending on who you ask.

[0] bitcoin-as-currency is a different frequently-talked-about potential future state, but not as relevant to the "acting like a tech stock" discussion

The concrete financials are still dependent on an assumption that someone else will buy a product that the company makes. It seems inescapable that the bedrock of any definition of value is what someone else is willing to pay for something. As an example, you could assume that bitcoin should have zero value, but apply concrete financials to derive a non-zero value of a bitcoin mining company. To get the valuation of anything, you ultimately have to make an assumption about what people will value in the future.

> But they still use concrete financials (e.g. growth of revenue is just the derivative of revenue) to make those decisions, and are assuming that the future buyers will be looking at similar numbers that are based in the same real economic business process.

This makes sense to me, but I wonder how many VCs will pump money into a business, having a pretty good hunch that the business model will never make that much sense at a meaningful scale, but the numbers will probably look good enough for a return of investment until the pyramid collapses after the series C.

These companies are restructured for increase of perceived value, not multi-decade sustainability. Bitcoin to me is just the purest form of this culture.

I would bet money that this has happened a TON over the last decade, just as you say. Especially post-Uber where "hypergrowth" to get market dominance was all the rage even in extremely cost-heavy, lower-margin industries where scaling was always gonna be a big challenge.

If there's good news, though, it's that this appears to be slowing down. Lot of folks getting disillusioned with WeWork, Uber, etc now that those exits happened and went nowhere. I'm assuming investors are realizing they won't be able to play that trick too many more times.

>concrete financials laughing in adjusted ebitda

But really, I'd hardly call QE-driven financials "concrete". We Work, anyone?

How was WeWork QE-driven? It's financials were just plain bad, no? The story was that "scale + tech = magic" would happen at some point. The story didn't work. Everyone knew that it hadn't happened yet, though, as far as I recall.

You saying "I don't trust an adjusted ebidta metric" is perfectly valid, of course, but that number was there and the business processes behind it were there. A bit different from "i'm a bunch of bits stored on a computer."

QE drove investors to riskier returns and an inappropriate focus on growth companies that promise the future. This is a fundamental effect of low interest rates on valuation.

Suppose you open a spreadsheet right now, discount 100 years of cash flows, and measure each cash flow as a % contribution to the sum (aka npv). You will find that at medium to higher rates years 0-20 make up the greatest percentage of the npv by far. But as you lower them, that relationship flips and cash flows for years 20 to 100 become the lion's share of the valuation.

WeWork isn't the only 'ridiculous promise-the-future' company we saw over QE, just the first I could name off the top of my head. But through the lens I described above, all those weird 'how could investors be so stupid' situations make more sense because the valuation math was slanted to favor such situations.

It’s mostly looking at comparables… I don’t the crypto is substantially different in that regard.

Why do any comparables have value?

In the stock market, because if everyone in the world wanted to sell all their stock in some companies, some folks would snap up the opportunity to take control of at least most of those companies. Yes, this is several levels obfuscated by the time you get to retail investors (and if you look just at news media sources targeted at retail investors, it's almost all short-term reactionary bullshit), but ultimately that's the fallback for the system that is gonna keep prices non-zero. Very recent tangible example: Elon Musk willing to pay real money to take control of Twitter.

In the crypto market... what's the ultimate backing? Hope of various sorts of a future new world financial infrastructure, reserve currency, store of value? I've heard a thousand stories, none of them are true yet though.

Sure, if you believe in one of those futures, you should invest in the appropriate crypto tokens. You'll be better off if fewer of the rest of us believe in it now when you're about to buy, after all. ;) But if your analysis of where to put your money - trying to figure out what's likely to hold or gain value vs lose it - comes down to "eh it's all the same yolo" then just recognize that it's a gamble to invest in crypto - saying "I believe that it's also a gamble to invest in stocks" doesn't really make it a better gamble.

When you realize what dollars are, you're really going to freak out.

same thing happened in March 2000 - browsers with no products and domains with no users were public - https://www.youtube.com/watch?v=25_WjiZnvQk

first dot com crash tech learned you actually need a product when the markets go south - now (second) tech is learning you need an actual good product when the markets go south --

The article is written as a response to claims that Bitcoin is an asset (class) different enough from stocks to be useful to diversify a portfolio. It's pointing out that, at a correlation of 0.86, it really isn't.

The headline doesn't quite convey this meaning.

Which is a reasonable point. It really follows tech stocks pretty closely.

But in my mind it’s still an unfair comparison because tech stocks generally have some kind of fundamental tangible value. It may be worth 1/500th what the market cap is, but it’s there.

I don’t see that with Bitcoin. Just insane wastes of resources and pollution creation.

It uses more energies than entire countries, just like every industry that uses orders of magnitude more than bitcoin.

Energy =/= pollute

Focus on the bad actors that are polluting, occasionally you’ll find a miner

Bitcoin's energy use is pollution in the strictest sense: it is quite literally wasted as part of the proof scheme. Some of that energy might come from renewable sources, but plenty of it is coming from coal and dinosaur juice.

This is true of lots of industries, but even our most wasteful (raw aluminum processing?) or grossly extractive (gold mining?) industries produce actual materials of value.

Fast Fashion is pollution then as well, and that’s absolutely horrible environmentally and in regards to factory conditions. There aren’t any BTC sweat shops as far as I know.

I don't understand this response. Why would you think that I would be in favor of fast fashion or sweatshops? These are bad things.

That being said, I wouldn't rest on your "Bitcoin is free of slave labor" laurels so quickly[1].

[1]: https://qz.com/1978807/bitcoin-has-a-xinjiang-problem/

At least "fast fashion" also pollutes the world with clothing.

Some industries use more energy but do more useful things.

The question is what’s the minimum to do something. Bitcoin uses more energy than the alternatives.

A wood burning stove is wasteful, a heat pump, not so much. Why? Because what’s important is the difference in energy between the action taken and the most efficient action to complete a task.

This discussion will go nowhere. Clearly the pro-Bitcoin crowd thinks proof of work is the most efficient way to get a permissionless, trustless, decentralised currency. And the anti-Bitcoin crowd either thinks

1. It's not the most efficient way and there's an alternative (e.g. Proof of Stake)

or

2. It may or may not be the most efficient way, but Bitcoin doesn't provide the value to justify the carbon emissions ('just tax carbon commensurate to its negative externalities and let people decide for themselves', he says helplessly)

This deserves to be the top posted comment, but will certainly never be.

Controversial Take:

There is effectively no ceiling on the value potential of Bitcoin.

If you live in a hyperinflationary environment, of which there are tons of examples in the last 100 years, the value is known. To people living with the $dollar and expecting endless monetary superiority, it is hard to recognize.

It's important to note, there is incentive for miners to use renewable energy. Vast amounts of capital have propped up renewables that languish for lack of a proper demand. Wind isn't on demand, nor is solar. But there's never any discussion of the waste and pollution that subsidized unproductive green energy solutions produce. Mining can utilize 100% of that supply. It acts as a reinforcing mechanism for investment in clean energy. How is this lost on people?

I’m mostly avoiding the utility argument because the stranded energy reality is so much better

As its not taking away from another use of energy and it’s reducing pollution, and is more likely to be the majority kind of bitcoin mining

Energy != pollute

Typically this desire for any other use of energy to occur relies on not understanding why that wasnt occurring beforehand

Energy does not come from nothing. A large amount of it comes from polluting sources. In those cases there is a very direct relationship between the creation of energy and pollution.

Clean energy is obviously better, but suffers from a fundamental problem: energy is fungible.

If mining takes up 10 MWh of juice, anyone else who would have used that energy can’t. So they have to use other energy. Often fossil fuel based energy has to make up the difference. For all intents and purposes the mining used that fossil fuel energy.

If mining only used excess electricity produced by clean power plants, there would be no problem. But it’s not incentivized to use extra energy, it’s incentivized to use cheap energy. If energy can be generated by fossil fuels cheaper than what you can earn from mining, miners will use that energy. Producing pollution that wouldn’t have otherwise existed.

Even if mining only used spare energy generated from clean sources, using that energy means it can’t be stored to be used later, like at night. Possibly necessitating polluting generation later. (I know storage isn’t common today.)

If you can explain how mining either does or feasibly could given real incentives use only spare non-polluting energy I would love to know.

Energy is most definitely not fungible. The availability of energy and demand for energy can vary by greatly location. For it to be fungible, energy would need to be free to transport, or demand for energy would need to be location insensitive.

Bitcoin actually does a lot of good things here because it is location insensitive. For stranded energy, say methane flare gas, there is not an economical way to use the energy of this gas because transport is too expensive and demand is too far away. In this way, the bitcoin mining is consuming energy that wouldn't actually otherwise be marketable. It is also greatly reducing greenhouse emissions without demand for the energy, the methane would be burned, which has much worse emissions than when consumed in a generator.

Sure, the flare gas sites that are (or arent) connected to the grid are exactly a case where bitcoin mining is taking from no other use, and actually reducing very quantifiable pollution

There are likely several gigawatts of this kind of energy in north america and the amount of energy used this way and for mining in total will continue to increase without causing more pollution

This is due completely to market forces as well, which is worth saying because more mining will migrate to this without it being some altruistic response to environmental outcry

Before Bitcoin no one was wasting energy doing redundant calculations on an astronomical scale.

Energy==pollute, actually. Energy is fungible and most of it comes from fossil fuels.

even if all the sources were green, and they're not, the energy is being poured into the atmosphere as heat, which is still pollution.

What is your definition of pollution which includes any heat? Is a hurricane pollution?

where can I read about that, could potentially change my view, in some circumstances I think the pollution reduction is greater and I also think dissipation is different than hydrocarbon presence

That pollution is what protects the integrity. It's not waste. It's like a standing army patrolling a bank. In fact those miners are the number one private security of any currency or bank in the world, by orders of magnitude.

And second, every dollar blockchain companies make is a dividend of that army patrolling the bank.

Not a whole lot of counterfeit bitcoins going around, unlike some currencies I could mention. Treasuries also spend a lot of money protecting their currency, the Secret Service for instance, which works for the Treasury of USG, is mandated to stop counterfeiting. Who gets better results for the money, bitcoin or the Treasury?

How many resources do the employees and resources of Visa and Mastercard consume?

BTC at least has very few humans, and humans consume resources and create waste.

So, what does a more comprehensive measure than core time look like wrt global warming and payments?

I’m not sure the answer, but I’m also sure it is not simple.

How many? I keep hearing this question as if asking it was a valid argument in itself. (Though, to be fair, you do underline that you don't know the answer.)

Regarding your question: whatever they do, those humans will consume resources and create waste. We can't delete them if we do away with Visa :). Sure, they, in theory, would be able to work on something else, freeing up their resources, but that wouldn't decrease the resource use of humanity.

Also, people keep comparing BTC's current resource use to the bank system (I think that includes the CC companies as well). However, very few transactions are done with BTC compared to the world financial system (or even just Visa). And if adoption grows, BTC price grows and if BTC price grows (or, in other words everything devalues relative to BTC) then mining rewards grow (measured in other assets) and if mining rewards grow then new miners will join and that means using more energy.

I think I've seen a comparison between Visa and BTC measuring how much energy each used for doing a single transaction (or for moving a set amount). Visa was 10 or 100 fold more efficient. Even back then.

Removing the human factor is not just about comparing energy and resource efficiency. There is a social and political impact. Intermediaries like banks infringe on our basic freedoms to hold our own money, to have privacy, and transact with each other as we wish. Therefore there will always be value to such a system that allows us to transact directly peer-to-peer; it is unstoppable that people will seek this, regardless of anything, even legality.

In terms of automating away humans, aren't we building society to improve human life? You're wasting human life by requiring labor, what is more valuable than that? At least as a heuristic, looking at human history it seems obvious that automation is the best way forward when people don't want or need a personable, smiling face serving them. I need to go apply for a bank account right now and know it is going to take weeks and several meetings, I passionately hate this.

>if mining rewards grow then new miners will join and that means using more energy.

The block reward continually decreases with time, so it isn't clear that more adoption will increase energy usage. I'd say the opposite seems likely - I worry how bitcoin will incentivise miners to secure the chain in the long term.

>I think I've seen a comparison between Visa and BTC measuring how much energy each used for doing a single transaction (or for moving a set amount). Visa was 10 or 100 fold more efficient. Even back then.

One on-chain transaction can be a settlement of many off-chain lightning network transactions, so in future the efficiency should increase dramatically.

Like the other poster I don't know the quantitative answer when it comes to efficiency and expected energy usage, but I'm again pointing out that there are other factors.

"A system that allows us to transact directly, peer-to-peer" is "unstoppable that people will seek this, regardless of anything, even legality"

It's a serious indictment of this generation that they talk about useless, wasteful distributed hash functions in the way previous generations talked about things that matter(ed).

Also your essay has nothing to do with issue of the posts above.

I don't follow, but you communicated your animosity.

The topics of the thread have everything to do with each other as I read it: the value of the technology, human resources and efficiency (waste vs value).

I thought past generations valued freedom and privacy even more.

But the parent was talking about energy and resource efficiency. You're bringing in new arguments without reacting to the original train of thought. This can go on forever. (And usually does, as with any loaded topic.)

> The block reward continually decreases with time, so it isn't clear that more adoption will increase energy usage.

It's weird. You quoted the very end of the sentence that contains the explanation why I say that the rewards grow. The part that you didn't quote literally is a response to what you have just said: "And if adoption grows, BTC price grows and if BTC price grows (or, in other words everything devalues relative to BTC) then mining rewards grow (measured in other assets)"

In other words, while the block reward (denominated in BTC) does decrease, its value keeps increasing while adoption keeps growing. (Value here means either other currencies, or, if you think they will cease to exist, then the goods you can buy for the BTCs you get as a block reward.)

It's pretty obvious, this is, actually, part of the reason why people buy BTC: because they think its price will increase due to increased adoption. And it has to, because BTC is deflationary (again, yet another property that the proponents see as a selling point). You have 21M coins and those should replace who knows how many trillions of USD. (It depends on what level of adoption we're talking about.) IIUC, 90% has already been mined, but the adoption is pretty minimal, so the value of the coins will increase substantially with adoption. Halving seems to occur every ~3 years. I've checked and the earliest I could easily find a price for, happened in 2013. Then one BTC was ~16USD, the block reward went down to 25BTC, so $400. Now it's 6.25BTC, with today's rate that's $181k(!) as of now. To get back to $400, you'd need 8-9 other halvings if the BTC value (price) didn't increase. But it has to, if adoption grows, because demand will grow and supply can only grow minimally.

> In terms of automating away humans, aren't we building society to improve human life

Again, the comment I've responded to talked about the resource use. Also, you'd need a pretty strong proof that VISA (and/or the banking system) cannot be automated, made more efficient without BTC and/or crypto in general.

> so in future the efficiency should increase dramatically.

Well, maybe you should start making claims (or starting arguments) about the efficiency when you have the data. At least as an estimate, for which you'd need to know how the system will work.

> There is a social and political impact. Intermediaries like banks infringe on our basic freedoms to hold our own money,

Nope. They provide a service. You can hold your own money, of course. Competition, thanks to automation(!) should also continue driving down the price of digital banking services.

> to have privacy,

It's the state, not the banks that want to have the right to look into your transactions in well defined cases. And it is the very interest of the society. Complete, unbreakable anonymity sounds good as long as you only think about yourself. It stops being a good idea when you realize that there are criminals, tax avoiders, etc. (Unless, you are one of them, of course.)

> and transact with each other as we wish. Therefore there will always be value to such a system that allows us to transact directly peer-to-peer;

Maybe. I'm not so sure about this. There will definitely always be some demand for this. But let's face it: debit cards and digital bank accounts are a pretty reasonable user experience. It's not that expensive either. (Esp. if you go with these up and coming service providers, like Revolut, Wise, N26 - whichever makes sense for you.)

> it is unstoppable that people will seek this, regardless of anything, even legality.

Sure, there are use cases where legality doesn't matter. :) For most people it does, though.

I actually think you give the parent argument just a tad too little credit. If crypto was useful as a currency (and, as you point out, if it is comparably as energy efficient as visa), that would be an effective refutation to the energy consumption argument; freeing up human resources to do something else would be a substantial net benefit of the system for society.

However, crypto does not behave to act effectively as a currency; it would be an awful idea to replace the global financial infrastructure with crypto thus the energy costs are here to stay.

Well, it's not enough to be useful. It should be better to justify the extra energy consumption. Especially given the climate change. Also, you forget that we actually don't yet know (no one has estimated, as far as I'm aware) the realistic consumption that we'd see with wide spread adoption. And without that, it's very hard to argue and say that it's worth it because of the usefulness. Because we don't know how much we're talking about.

So I think the energy argument fails on it's own. Also, it should come at least with strong supporting arguments claiming the actual benefits. But I do agree that cryptos are worse than the currencies we have and existing block chains (I'm aware of) don't make sense even as a distributed transaction tracking system for fiat currencies.

You can disagree, but this comment really isn't helpful. If you have a point, then please argue it. Ad hominem attacks are not a valid rebuttal

Look at the narratives you’re regurgitating yourself in this very thread.

Bitcoin and proof of work are one of the most important innovations in human history.

Proof of work existed long before bitcoin, and I haven't seen any evidence that bitcoin is an important innovation despite it being 13 years old. Send it to zerooo

Bitcoin is very smart. When I first learned about it, I thought it was so cool how it all came together, the combination of cryptographic security, distributed trust, even a Forth-like mini language built in. I made my own coin, I played with the source code, I made my own nonstandard protocol that used a bitcoin blockchain (unfortunately I never bought any bitcoin, but at any given time it's a terrible investment, even if it's paid off retrospectively).

Anyway, I say all this because I really find it clever, and I really wanted it to be able to do something useful, but the reality is, it doesn't. It's never going to be useful, it's been adopted by scammers and mountebanks, it has no utility and will cause so much harms in the scams that it supports.

So while it seems like a cool innovation, and from a purely technological standpoint it is, in reality it's poison. In that regard, it has (sorry for the tired analogy) a lot in common with communism. Cool idea, doesn't work at all, destroys lives. We need to let it go.

>"When I first learned about it, I thought it was so cool how it all came together, the combination of cryptographic security, distributed trust, even a Forth-like mini language built in."

Interesting, could you elaborate on the Forth bit? Where does this fit in? This is the first I've heard of it but admittedly I don't know that much about Bitcoin.

See the link below. It includes a stack based scripting language (essentially a subset of Forth) for processing transactions so you can do some customization in how transactions unfold. As I understand it (and I don't know much about Ethereum) a big difference is that Eth has a Turing complete scripting language that can run code as part of transaction, while bitcoin only has a subset that doesn't include e.g. looping.

https://en.bitcoin.it/wiki/Script

Ah this is neat. I was definitely not aware of this. Thanks for the link.

Wow, exactly how I feel. Never seen this take put so eloquently before. Kudos, mate.

Bitcoin/blockchain brings nothing new to the table. It's a waste on nearly every facet.

Can you explain why you think that, exactly? I've read tons about this stuff and have definitely not come to the same conclusion.

Bitcoin and PoW not really, but the core idea of cryptocurrency stuff is distributed byzantine-fault-tolerant consensus where honest behavior is economically incentivized. That sounds kind of abstract and bitcoin itself is not very useful (throughput is too low), but if it can be made to scale it’s very powerful. First of all, it allows computation that no one can control, which is most obviously applicable to finance with things like automatic market makers.

But more compelling to me is that it allows you to do what bittorrent did but in general - with bittorrent anyone can host a file and a static link can help you find those people and download the file (with no need to trust that the person serving the file hasn’t replaced it with some other file). This is possible because of cryptographic primitives like hashes that let you use a few bytes to uniquely identify the contents of any file, distributed hash tables that let you come to agreement on which IP addresses are serving which files, etc. (If you don’t think bittorrent is useful, that’s fine, but me and many others think it is.)

There’s still a lot of work to be done, but we’re approaching a point where you can “bittorrent-ize” a much broader class of services. Bittorrent works only for serving files whose hashes you already know, but doing the same for a service like HN is much more difficult. You need to allow posts from many different people and know when they were submitted, and maintain vote counts, but a distributed ledger is perfect for this. It’s not practical to do this on any decentralized cryptocurrency right now, but we’re slowly getting there.

Like I said, scaling this is a very difficult problem, for example you need to have data sharding so that not every node has to store the full ledger, but over the last few years cryptocurrency people have come up with very good data sharding systems like danksharding (which will hopefully be implemented on Ethereum in the next decade).

You also don’t want every node to have to redo all the computation, but ZK-proofs (which were basically only used in academia before cryptocurrencies came along and poured billions of dollars of funding into making them practical) make that unnecessary at the cost of some significant overhead when performing the computation. Despite that cost, we already have really good layers on top of Ethereum called ZK-rollups that lower the transaction cost to almost zero and introduce no new trust assumptions.

You also want state expiry or state rent so the network state doesn’t grow monotonically, but that’s also being developed and in the past few years we’ve also developed some really good state expiry schemes.

You also want fast finality so that you don’t have to wait 10 minutes for the contents of the ledger to stabilize, but we finally have scalable permissionless byzantine fault tolerant consensus schemes that have very fast finality (<30s), one of which is being implemented on ethereum (called casper).

There’s other cool stuff too, but I think this direction is one of the most exciting ones.

Disclosure: I’m a protocol developer for a major cryptocurrency (although not ethereum or bitcoin)

I don't think it breaks the top 100, much less the top 1000. Public-key cryptography might, but not this fun-house mirror stuff.

…well, even if you don’t consider naturally occurring phenomena like fire to be a human innovation, I’d argue things like “the written word” or “mathematical notation” or “formal logic” are perhaps a bit more important, and one might even say foundational to Bitcoin.