> I knew of bitcoin early on due to this guy, but even then I had no interest and considered it bullshit. Then when I saw what this guy did it just solidified my opinion that it can't be trusted.

But isn't it instead an early lesson in "not your keys not your coin" maxim that Bitcoin advocates preach?

> If the value of gold crashes it still has an inherent value because it's a useful physical good (looking pretty is not the only application of gold). a bitcoin has ZERO inherent value.

Yes, but: 1) it's very difficult to self-custody gold (it's bulky, needs a safe place for storage — and if you put it in a bank, you need to be able to trust that you can get it out again); 2) it's very difficult to transfer, especially cross borders, especially in large amounts; 3) it's very difficult to use as an actual money, whereas bitcoin could conceivably be used as such (especially with Lightning).

If you want to purchase gold to protect your money from inflation (which you probably shouldn’t) then you probably buy it through some insured exchange—maybe even through your bank—that will keep it for you, if you don’t trust any exchange, that is your problem. If you need to transfer your money, or use it, then you’re not protecting it against inflation anymore are you? So you will just use regular money for that.

Anyway, you shouldn’t buy gold to protect your money from inflation. Instead you probably should just risk an inflation and keep your money in a savings account, or buy secure government bonds for it, or something.

I keep seeing this phrase crop up throughout the past several days of cryptocurrency news, and something always rubbed me the wrong way about it, but I couldn't put my finger on it until today.

It's demanding a change in human nature to accommodate the system, rather than changing the system to accommodate human nature.

It's really not that different than the people who, 15 years ago, were saying, "Well, of course your accounts got hacked, because you didn't create a separate 27-character totally random password for every single account you need, like I do, and never store those passwords anywhere except your head!"

People don't want to deal with a hardware token every single time they want to do anything with their money...and the only reason they have to, with cryptocurrency, is because its proponents think an unregulated "decentralized" financial system where the only law is code is a good idea. (Of course, it was never going to stay unregulated forever. None of the aspects of cryptocurrency that rely on the government not paying attention can last more than another few years.)

>"Well, of course your accounts got hacked, because you didn't create a separate 27-character totally random password for every single account you need, like I do, and never store those passwords anywhere except your head!"

The keys can be recorded as a seed phrase. Typically this is a sequence of dictionary words. Look into it before you dismiss it so flippantly. Things have come a long way to make things easier for the user. There are also dedicated hardware wallet devices for key storage.

If you're not transacting or conducting business with cryptocurrency, why do you care so much? It is literally none of your business. Nobody is forcing you to pay taxes or finance wars with BTC.

And "dedicated hardware wallet devices" are exactly the kind of thing that I'm talking about here. There is no way those are going to be appealing to mainstream users; thus, if cryptocurrency were ever to genuinely enter the mainstream, the vast, vast majority of users would be keeping their crypto on exchanges.

Y'know, exactly the way the vast, vast majority of people keep their money in regular bank accounts. Which don't require this kind of rigamarole, and never result in regular people (ie, not the very wealthy) losing money, because it's all regulated and insured by the government.

(Yes, I know FDIC insurance has a limit. The limit is high enough that regular people will never even have to care that it exists.)

There are a few more reasonable options here.

1) Create or advocate for a cryptocurrency with reversible transactions and all of the regulatory features you desire. Let the market decide how large that niche is.

2) Loosen or advocate for loosening the existing regulations on traditional financial products so that they are competitive with some of the features of cryptocurrency. See also, Zelle. Another product HN seemed to hate.

Yesterday someone was arguing that Peter Thiel is a super villain. Another full page of comments was decrying one of PayPal's policies necessitated by regulations. People are generally unhappy with PayPal's fee structure, but they continue to use it. The fees and draconian policies are largely required to comply with regulations. Want more personable human support? That also costs money.

The argument for regulating cryptocurrency is basically an argument for creating a captured and gatekept ecosystem. Of course, I get it. "Think of the children", "Think of the helpless normies", same story. What we will get instead will be more PayPals.

As for scams and outright Ponizis, it is worth noting that those go on under the watchful eye of the regulatory state you love so well. Bernie Madoff was similarly connected and even served on regulatory boards. SBF, the disgraced FTX head had direct connections to the SEC and chairman Gary Gensler. SBF even testified, asking for more regulation.

I'm doubtful, but still hopeful for the possibility of a good faith discussion. Regulation is not a pancea against fraud. Instead it creates an atmosphere were connected insiders can create greater frauds. The FTX debacle is illustrative of this. Yet here we are hearing the same appeals for more regulation from would be saviors of normies. Posters who themselves do not use cryptocurrency and insist that it has no legitimate use.

For myself I just wanted to run a few online games with payouts for players in cryptocurrency. Now players also want NFT character saves. I've never used a centralized exchange. I don't make big money in this niche. I do have fun. The community is happy. Nobody is crying about valuations. Actual users of cryptocurrency aren't saying, "There outta be a law!". None of my users are claiming, "If only there were a statist savior protecting us from this video game!" or, "This game would be so much better with barriers to entry for developers"

From that perspective, yes I do feel comfortable asking you and the rest of HN's passionate cryptocurrency haters to butt out. You could also go out and build a better alternative in the marketplace of ideas.

I'm not sure how you read my comment as elitist or utopian. All I'm asking here is that paternalists don't ruin it with saviorism, regulatory capture and gatekeeping.

>When something goes mainstream that gets lost.

Isn't this an elitist sentiment?

Our community has fun with people who aren't deep into tech at all. I started it with faucet rewards integrated into an io game. Anyone can install a wallet when transactions are free. Couldn't be further from what you're projecting.

Maybe not, but they have to regardless. Banks force this on users anyway (outside the USA). To pay for things I have to use either a chip card (token), or equivalent embedded in my phone (a token), or log in to e-banking using a chip card PIN pad (token) or my phone again, or auth an online CC tx with a phone app (token).

But no matter what I do the only way to move money around without invoking a hardware cryptographic token at some point, is use paper money and physical coins.

So this isn't really something new. Bitcoin was just ahead of the curve in this regard. Also, it's really hard for banks to reverse transactions outside of the USA. What makes bank money "safe" compared to crypto is simply that:

1. Governments will bail banks out because they're too big to fail. Of course you end up paying for it through inflation anyway.

2. Everything is KYCd/AMLd up the wazoo so even if money is drained from your account in the same way it could be for a cryptocurrency, the perps will find it much harder to evade capture.

None of that has any ethical or sociological consideration inbuilt. It's a simply observation of the system.

Anyway, yes, that means the system is bad. But this is an ethical and sociological consideration.

Slight nitpick, Total gold above the earth's surface is less than a cube with sides 25 metres each.

Copper is much more abundant, over 400x more copper than silver has been mined, but silver is almost as scarce as gold. It really seems like the price spread should be closer.

Then came the "Eternal September" where cryto went mainstream and many people started pitching this formerly niche project as a real investment vehicle. And people bought in thinking it was like any other investment. IMHO cyrpto itself isn't bad, it's all the people that pitched it like an old school investment vehicle.

There's always been an undercurrent of this stuff. The eternal September came years later, after big scams like Mt Gox had already long imploded.

But the wealthy and connected will most certainly have their own way of getting around the system. Whether that means moving their money into physical assets, or onto the market, I don't know. I don't think cash is going to go away, but I do see the government incentivizing regular people to solely use CBDC, and once you're on that system, you are a serf.

Well, if that happens I hope they implement negative interest rates on them because that would end the need for surveillance and political corruption within a decade.

The value of gold is protected by the fact that the majority of it's holdings (at least, according to this[1]) aren't used for speculation. Still, a good chunk of them are, which means there can be pretty huge swings and it's considered a poor investment.

Have tried to say the inherent value of a dollar is because it's backed by the U.S. military, but fundamentally, it's the same reason. Dollars aren't held as speculative assets. The poor returns from the dollar are one of the reasons why people push other investments. If currency does enter into speculative territory, bad things can (and do) happen. See Hot Money[2].

Anything, even if it has inherent value, can be extremely dangerous when there's a large number of speculators. Because no matter the value, speculation can drive the price much, much higher. And it's a snowballing effect - the more an asset rises, the more people want to buy it for speculative reasons, and the more people buy it the more it rises.

And then any inherent value (if it even exists) looses significance - you're in a game of chicken with the other investors, trying to both hold on as long as you can and get out before everyone else does. The winner gets the fortune, the loser is left holding the bag.

The thing is, almost everyone in the crypto space seems interested in speculation. It might be speculation + decentralized voting rights or speculation + digital ownership, but speculation is always at the heart of it. The idea that if you get in early you'll be able to cash out for a big profit. Of course a space almost entirely driven by speculation is going to be inherently dangerous and unstable, and the "opportunities" are the same type as those of a casino.

[1] https://en.wikipedia.org/wiki/Gold_holdings [2] https://en.wikipedia.org/wiki/Hot_money

https://news.ycombinator.com/newsguidelines.html

But let me guess, if I press you on this I'm going to get banned in a week or so for such and such reason.

something something assume good faith?

Sure, but it always feels like the other person started it and did worse—so everybody always argues that.*

Let's assume you are right and the other person is wrong. Posting an unsubstantive snark is the worst way to respond. It poisons the atmosphere, evokes worse from others, and ultimately discredits your own position (which, if you're right, means you're discrediting the truth—and that hurts everyone**).

What you should do instead is one of the following:

(1) respectfully provide correct information, so we can all learn; or

(2) chalk it up to the internet being wrong about everything and just move on.

* https://hn.algolia.com/?dateRange=all&page=0&prefix=false&qu...

** https://hn.algolia.com/?dateRange=all&page=0&prefix=true&sor...

What's happened here is my assumption of good faith with a question got turned into a warning by the mod because they, themselves, did not assume good faith on my part.

So the question becomes, are those guidelines taken seriously by the moderators of this site or not?

If they are, then maybe admit to your error and lets all just move on.

Ironically, the sort of legalistic pleading you're resorting to is a sign of a lack of the good faith you're claiming. So is the style of your reply sequence: never admit or accept a thing, never address what the other person says, and simply bring up a new argument every time. These are troll tactics, whether you're using them that way intentionally or not (https://hn.algolia.com/?dateRange=all&page=0&prefix=true&sor...), and part of how we moderate HN is not to dance that way.

You jumped the gun and have caused more issues than you've avoided. Your warning was more about preparation to ban me than anything related to the actual conversation.

I get it. I understand. Just do it now if you're so inclined, it will save both our time.

Re the word 'troll': I can't blame you if you don't want to look through a bunch of old moderation comments, but the link I provided points to a thwack of explanations of how precisely we use that word. It doesn't have to do with impugning someone's intent (which we have no way of knowing); it has to do with the effects that certain kinds of posts tend to have on the threads (which we have plenty of ways of knowing, as they are externally observable). I'm not accusing you, by implication or otherwise, of anything more than making such a post. That's why I asked you not to do that!

What exactly did he do that was a "strawman"? Why are you so angry? It was an interesting comment thread, and then you are acting as if persecuted by the other commenter and HN moderators.

I asked if they understood my actual point because I was never denying that gold had speculation, but that when that speculation collapses gold still has value due to it's application in the physical world.

They obviously misunderstood me.

This is why I'm sympathetic to those who say its ponzi scheme, it only has value because of new resources continuing to be poured into it.

but I'm in the middle of getting warned and moderated by dang for daring to ask such a question!

>if we turned off all bitcoin miners today, bitcoin would go to zero instantly

isn't true. You couldn't trade them normally with the miners off but you could start mining up the day after - it only takes a couple of computers really.

So if we turn off all the bitcoin miners, it wouldn't be possible to transact. All you could do is look at it, like a read-only excel sheet.

"Well yea you could do that change to tank the value, but imagine if you just undid it huh???"

The point was without mining entirely, there is no value

Once established, the idea is that transaction fees are used and the distributed nature of the network causes a natural competition to be the most efficient so miners can charge the lowest fees while making a profit.

We're very close to this threshold now, given what is happening now and during the next few weeks I would not be surprised if BTC is going below that threshold.

I think it's time to stash a few bottles of champagne.

As it becomes unprofitable miners stop, and the difficulty drops so that it becomes cheaper to mine, until it reaches an equilibrium

The protocol adjusts every 2016 blocks, if it takes longer than two weeks (20160 minutes) to mine the 2016 blocks then the difficulty decreases, if it takes less than two weeks to mine 2016 blocks then the difficulty increases.

In contrast, only speculators would notice bitcoin going offline. They might laugh at the guys who told them they weren’t going to make it but that’d be it. Nothing would break, nobody would be in line ahead of them failing to buy something, etc.

That matters because bitcoin’s floor value is zero: as a very weak fiat currency, the only reason to use it is when you think it’ll be profitable and if that confidence drops miners will stop putting more hard money into the system.

You can be mad that people paid $$$ for Beanie Babies but that does mean that there value is nothing.

There's a big difference between something like a Beanie Baby, which has a base value of whatever someone will pay for a toy (you're not getting rich, but it's not zero), a company whose shares convey fractional ownership of assets and an ongoing revenue stream, and a very weak fiat currency like Bitcoin which has value only to the degree to which your buyer believes they will be able to resell it at a profit.

With a strong fiat currency like the US dollar, that belief is anchored by the size of the related economy and the millions of people who are guaranteed to use USD to pay taxes and other government fees, sell goods and services to the government or be paid by it, and the millions of business relationships specified in dollars. Yes, that could change over time but it's not something which happens quickly except in disaster scenarios where the value of any currency is moot and you wouldn't be running Bitcoin miners in any case.

"Mining" in bitcoin means two different things, creating new coins AND adding transactions to the ledger. If mining reward went to 0 (which will actually happen someday), and new coins stopped being created, miners would still be able get a profit from transaction fees, although it wouldn't be "mining" in the same sense as gold.

Mining is bad for other reasons--it's a huge waste of resources when bitcoin is worth a lot of money.

You talk about this like this is an easy action with profound consequences. It's like saying If everyone killed themselves, there would be no people. This is trivially true, but it's not going to happen.

>(as its worthless without continuous resources being pumped into it). All forms of transaction has some form of resources put into it. The quantity of resources is what is at issue here. Bitcoin does not need the massive quantity of resources it currently uses to operate. That is an artifact of the high value of Bitcoin coupled with the subsidy of the mining reward.

I'm not sure if the creator(s) of Bitcoin evaluated what kind of value a Bitcoin should have over time, The mining reward halving rate suggests that they were not expecting it to have a continual average rise above 20% per year (which makes sense because that would be insane). To date, however, it _has_ been averaging more than that, resulting in an increase in value of the mining reward relative to other currencies. Should the value drop or simply not increase for a extended period, the mining subsidy becomes less. Then only the most efficient miners can make money mining and the difficulty drops to a new equilibrium as the ones who can no longer make money drop out.

The price might go to zero, though. The price of oil, which is arguably more useful than gold, went negative a couple of years back. Having intrinsic value doesn't necessarily mean it is exchangeable, especially if it needs to be exchanged at a given moment in time.

Which could also be said about Bitcoin. I'm sure someone out there would find some kind of academic interest in looking at Bitcoins or enjoy collecting them. There might be almost no value in Bitcoin, but it would probably never erode completely.

Your scenario here is plot armor.

Sure, if we pretend that gold stops having ANY use outside of being pretty, then when it stops being considered pretty it's value will go to 0.

But the fact is, gold has a myriad of uses besides being pretty and those uses give it an inherent value.

And when you go to sell it, others' use of it is what sets the sell value, not your personal use of it. It doesn't matter that I'm not personally using it for conductivity if the person I'm selling it to is (or someone downstream of them is).

IOW, stop posting fiction.

I fail to see the purpose of this 'pilot amor'. There is no reason why gold would stop being useful beyond being pretty. This fiction you've come up with doesn't even make any sense and certainly has no relevance to the discussion.

However, that doesn't mean there is always a user available. When we saw the price of oil go negative there were still just as many uses for oil as there ever was, but for various reasons there weren't buyers in that moment. Gold is not immune to the same.

In case you are still confused, let me be clear: Price and value are not the same thing.

> IOW, stop posting fiction.

Sage advice.

I used the phrase 'inherent value' to describe what you're referring to as 'use value'. But of course someone decided they had to argue against it by arguing that the trade value between countries went negative at one point (which isn't all that surprising but has nothing to do with the original point).

arguably 'use value' is a better phrase, but given the surrounding explanations, the poster engaged in a clear strawman.

The point with oil is its extraction can't be stoped overnight, and thus has to be stored in case of excessive production, which has itself a cost.

Demand droped significantly when the lockdown occured ; storage facilities where saturated ; and oil was kept in oil tankers which are pretty expensive.

The negative price reflected the cost of storage.

There is no such issue with gold.

You can't use your regular intuition about commodity prices when talking about futures contracts. The negative price was a one-day event, and all it really represents is a higher-than-normal premium on the calendar spread.

See: https://www.marketwatch.com/story/oil-prices-went-negative-a...

A firearm is absolutely, 100% safe as long as no one ever interacts with it.

Because we are humans, in a society, and everything we do relies on human interactions, if Bitcoin (and crypto in general) cannot operate positively and effectively, except in theory, then it is the problem, regardless of the underlying reason.

I am not saying that is good.. I don't know. Tell me why it is bad. Thank you.

However, I don’t get how holding gold – which doesn’t generate dividends and therefore cannot benefit from compound interest – could be a good long term invest, compared to, say, an accumulating ETF.

No financial advice.

It's like saying that sausages are bad, and should go away from existence, because the dog ate them off the kitchen counter.

The real point is that if the value that isn't tied to its usefulness ever goes away, it still has value. bitcoins do not.

At which point I’d turn my miner off and wind the chain back to when I was rich on my private virtual island for one and live happily ever after.

It's just like gold. You give me your gold and I'll take it all right now, saving you from losing it incrementally or at a later date. Not your vault, not your bars. Theft-as-a-Service. /s

Gold has a special status because of how long we've mythologized it, but generally you'd be encouraged to invest/buy futures in things that impact your life and income directly. Your inputs and outputs.

If you produce food from fertilizer and power then those are your three important commodities. Gold isn't a great fit because you can't eat it, fertilize with it, or run a tractor on it. You have to do a gold-to-dollars transaction first which can waste a fair bit of the value.

If you forward packets and consume electricity to do so then holding gold also isn't economically relevant, but by trading proofs of work which were generated by burning electricity you track the value of your commodities and do so natively.

If we used HashCash (or similar) to solve the initial-contact problem then we'd be creating a secondary market in the proofs and they could be used as currency by a related ecosystem like hosting providers with little friction or risk.

Tulips didn't cause the problem, speculators (and scammers) did.