In Defense of Bitcoin Maximalism(vitalik.ca)
vitalik.ca
In Defense of Bitcoin Maximalism
https://vitalik.ca/general/2022/04/01/maximalist.html
226 comments
It seems that Vitalik decided to write the best defense he could of Bitcoin and publish it on April 1st. And that's the joke.
That's a very Vitalik thing to do.
For all the heat he gets from Bitcoiners I consider it a net negative that crypto split up into so many different camps.
I wonder how the crypto space would have looked like if the Bitcoin space allowed people like Vitalik to work within it instead of being driven away.
For all the heat he gets from Bitcoiners I consider it a net negative that crypto split up into so many different camps.
I wonder how the crypto space would have looked like if the Bitcoin space allowed people like Vitalik to work within it instead of being driven away.
When you see Bitcoin and Dogecoin being staked on ETH contracts and services (now) I feel like we haven't lost!
You're praising bridge contracts just a few days after a bridge contract has been drained by hundreds of millions of dollars? :)
Also, who is "we"? Bitcoiners, Etherians, crypto people in general, or some other crypto group?
Also, who is "we"? Bitcoiners, Etherians, crypto people in general, or some other crypto group?
Not every L2 is created equal.
"The crypto space"
Meta-irony, I love it
So the author points to a link claiming 12% of Ukrainians own crypto, yet triple-a creates a circular reference in trying to substantiate this claim:
- The author refers to: https://triple-a.io/crypto-ownership-ukraine/
- This link calls it an estimate: "It is estimated that over 5.5 million people, 12.7% of Ukraine’s total population, currently own cryptocurrency.(1)"
- Link (1) points to https://triple-a.io/crypto-ownership/
- The link under "Ukraine" in that list points back to the first claim: https://triple-a.io/crypto-ownership-ukraine/
At the bottom of their data page: "The data contained or reflected herein are proprietary of TripleA."
- The author refers to: https://triple-a.io/crypto-ownership-ukraine/
- This link calls it an estimate: "It is estimated that over 5.5 million people, 12.7% of Ukraine’s total population, currently own cryptocurrency.(1)"
- Link (1) points to https://triple-a.io/crypto-ownership/
- The link under "Ukraine" in that list points back to the first claim: https://triple-a.io/crypto-ownership-ukraine/
At the bottom of their data page: "The data contained or reflected herein are proprietary of TripleA."
This is literally an april fools joke...
So all of the data for https://triple-a.io/crypto-ownership/ is fake?
It might or might not be fake. All we can say is that it can't be substantiated by anything on their website (they aren't referring to external sources), and that they are pretending that their data has been independently substantiated (presumably hoping nobody actually follows the citation links).
It is quite a sight to watch someone explain to someone else that something that they read on the internet, might not be believable.
Given the work he put into it, I took it as a serious steelman argument regardless so I figured he'd give his all for making the case.
True, and the concerning thing is that it’s indistinguishable from the normal PR and marketing pieces. The Matt Damon commercials are ridiculous.
People still don't understand cryptocurrencies, and at this point it seems more like intentional obtuseness for political reasons.
At the same time, cryptocurrencies still haven't provided a killer app that shuts everyone up. So, IMO that's the only real thing that matters. Either you build something with it that's useful - or it isn't useful.
I understand that it's difficult because of all the infrastructure required (much of which still doesn't exist), but that's where all efforts should be. Create a consumer service that people want.
Otherwise, if the idea is that it's simply a trade-off of the speed/efficiency for otherwise mundane services in order to make them decentralized, then stop hyping it and let it become a parallel structure - or underground system that some people use.
At the same time, cryptocurrencies still haven't provided a killer app that shuts everyone up. So, IMO that's the only real thing that matters. Either you build something with it that's useful - or it isn't useful.
I understand that it's difficult because of all the infrastructure required (much of which still doesn't exist), but that's where all efforts should be. Create a consumer service that people want.
Otherwise, if the idea is that it's simply a trade-off of the speed/efficiency for otherwise mundane services in order to make them decentralized, then stop hyping it and let it become a parallel structure - or underground system that some people use.
Bitcoin started in 2008, 14 years ago.
The Internet was opened to commercial use, in 1993. That is 29 years ago.
Bitcoin is half the age of the commercial Internet, so Bitcoin is no longer new.
14 years after the opening of the Internet to commercial use, Google was well established, Facebook and Twitter were rising rapidly, MySpace and Digg had already peaked but still had huge audiences. Amazon had already become a behemoth.
How many more years can people continue to claim "crypto is so new, it hasn't had time yet to establish a killer app"?
All of these industries had become major industries within 14 years of their discovery:
telephones, 1876, big industry by 1890
automobiles, 1886, big industry by 1900
The industry with the longest struggle to get the technology "good enough" was perhaps radio with modulation to carry the human voice, 1906 first proof of concept, the industry took off in 1920.
The point is, 14 years after their discovery, everyone could easily tell you what cars, telephones and commercial radio was for. The utility was obvious to everyone. But cryptocurrencies are still struggling to come up with a straightforward use case that people can understand.
The Internet was opened to commercial use, in 1993. That is 29 years ago.
Bitcoin is half the age of the commercial Internet, so Bitcoin is no longer new.
14 years after the opening of the Internet to commercial use, Google was well established, Facebook and Twitter were rising rapidly, MySpace and Digg had already peaked but still had huge audiences. Amazon had already become a behemoth.
How many more years can people continue to claim "crypto is so new, it hasn't had time yet to establish a killer app"?
All of these industries had become major industries within 14 years of their discovery:
telephones, 1876, big industry by 1890
automobiles, 1886, big industry by 1900
The industry with the longest struggle to get the technology "good enough" was perhaps radio with modulation to carry the human voice, 1906 first proof of concept, the industry took off in 1920.
The point is, 14 years after their discovery, everyone could easily tell you what cars, telephones and commercial radio was for. The utility was obvious to everyone. But cryptocurrencies are still struggling to come up with a straightforward use case that people can understand.
They really aren’t. The store of value is the use case. Now you may not have confidence that the social contract for that value will persist. I personally don’t have a high degree of confidence. But to continue to ignore that this itself isn’t the value add is obtuse to the realities of political turmoil.
> The store of value is the use case.
And how practical is that, given the wide swings (e.g., relative to USD) that are often seen?
And how practical is that, given the wide swings (e.g., relative to USD) that are often seen?
>14 years after the opening of the Internet to commercial use, Google was well established, Facebook and Twitter were rising rapidly, MySpace and Digg had already peaked but still had huge audiences. Amazon had already become a behemoth.
Difference is the things you listed are free services that had massive marketing budgets.
Bitcoin has zero marketing budget, grew from 0 organically, and adoption requires converting a percentage of your networth, which is a major ask. For this and many other technical/educational reasons the barrier to entry is much higher which makes this a bad comparison.
Difference is the things you listed are free services that had massive marketing budgets.
Bitcoin has zero marketing budget, grew from 0 organically, and adoption requires converting a percentage of your networth, which is a major ask. For this and many other technical/educational reasons the barrier to entry is much higher which makes this a bad comparison.
“The migration of the ARPANET to TCP/IP was officially completed on flag day January 1, 1983, when the new protocols were permanently activated.”
https://en.wikipedia.org/wiki/Internet_protocol_suite
https://en.wikipedia.org/wiki/Internet_protocol_suite
The ARPANET itself went live in September 1969:
* https://en.wikipedia.org/wiki/ARPANET
In 1983, with-in 14 years, it was widely successful for the academic and research institutions it was originally built for. It then started getting 'mainstream' attention.
ARPANET was opened up to commercial use in 1993, which is with-in ten years from TCP/IP go-live: again with-in 14 years.
* https://en.wikipedia.org/wiki/ARPANET
In 1983, with-in 14 years, it was widely successful for the academic and research institutions it was originally built for. It then started getting 'mainstream' attention.
ARPANET was opened up to commercial use in 1993, which is with-in ten years from TCP/IP go-live: again with-in 14 years.
Blockchains require systemic buy-in to reveal their instrinsic value. That means government implementation and enforcement, or at least some widespread system that recognizes a particular blockchain as law. It's coming, but slowly.
You talk about it as if there's a well-worn path that every viable technology must follow to succeed. Cue discussions about the first automobiles, the internet, the smart phone, etc. But history rhymes, it doesn't repeat. The internet's rise itself is a unique phenomenon. I'm more concerned with dealing with blockchains as a reality, not deciding whether or not they're actually happening. In my experience, almost every "nothing is happening, y'all are crazy" argument in the past 10 years has revealed itself to be toxic coping. Who does this denial actually help? So far, Western society is collapsing, finance is getting more centralized, global warming is coming along just fine, corporations are making decisions for us, and the internet is getting more and more totalitarian. All good?
Don't be surprised when the infrastructure magically appears and every asset you own is indexed and tracked on a blockchain. Oops! This is really not the time to be talking shit about cryptocurrencies as a concept, because they're going to be part of your life whether you like it or not. What you should be focusing on is helping shape them in your favor - because they're currently not.
So, let's assume it is, in fact, happening. The technology should also enable certain services which weren't possible before, but I'm not sure what those are. We see the corpos going into the "metaverse", and central banks going for CBDCs, which I suppose could work (for them), but if there was a pro-consumer service that can be deployed now it'd end discussions like this.
You talk about it as if there's a well-worn path that every viable technology must follow to succeed. Cue discussions about the first automobiles, the internet, the smart phone, etc. But history rhymes, it doesn't repeat. The internet's rise itself is a unique phenomenon. I'm more concerned with dealing with blockchains as a reality, not deciding whether or not they're actually happening. In my experience, almost every "nothing is happening, y'all are crazy" argument in the past 10 years has revealed itself to be toxic coping. Who does this denial actually help? So far, Western society is collapsing, finance is getting more centralized, global warming is coming along just fine, corporations are making decisions for us, and the internet is getting more and more totalitarian. All good?
Don't be surprised when the infrastructure magically appears and every asset you own is indexed and tracked on a blockchain. Oops! This is really not the time to be talking shit about cryptocurrencies as a concept, because they're going to be part of your life whether you like it or not. What you should be focusing on is helping shape them in your favor - because they're currently not.
So, let's assume it is, in fact, happening. The technology should also enable certain services which weren't possible before, but I'm not sure what those are. We see the corpos going into the "metaverse", and central banks going for CBDCs, which I suppose could work (for them), but if there was a pro-consumer service that can be deployed now it'd end discussions like this.
> cryptocurrencies are still struggling to come up with a straightforward use case that people can understand.
Speak for yourself.
Speak for yourself.
I think as you start to hear about stories from people in (just as an example) Ukraine escaping and being able to take their wealth with them, you're seeing the principal "killer app". It's the same "killer app" as burying gold in a secret location. It only comes up in emergencies.
If that is the only killer app crypto can produce then it's not useful to most people and will stay a niche technology forever.
It's not useful to people almost all the time but it's vital and one-of-a-kind for that certain scenario.
Though I could similarly throw in dissidents earning money and financing. I could just repeat what's in the article.
In the mean time, sure, it would be smart to find other use cases.
Though I could similarly throw in dissidents earning money and financing. I could just repeat what's in the article.
In the mean time, sure, it would be smart to find other use cases.
I'm not sure if it really is one of a kind. Having a bit of money on PayPal would cover almost all scenarios equally well and even have less friction actually using your money.
The combination of PayPal and Gold doesn't seem to justify to me the valuation of a market cap of 800 billion dollars or in other words, a daily budget of 40 million dollars for securing the blockchain.
The combination of PayPal and Gold doesn't seem to justify to me the valuation of a market cap of 800 billion dollars or in other words, a daily budget of 40 million dollars for securing the blockchain.
> Having a bit of money on PayPal would cover almost all scenarios equally well
Unless you're...Ed Snowden?
Or Paypal takes a dislike to you for their own reasons?
etc
Unless you're...Ed Snowden?
Or Paypal takes a dislike to you for their own reasons?
etc
To be fair, political persecution is another application. And maybe I should have started with that.
IMO there's a couple of networks that have provided a killer app, but Bitcoin maximalism and ETH dominance completely overshadow them. I've followed loosely since 2009, never got into it because I knew the UX would be a problem, but little did I realize markets don't always evaluate technology on merit (an important lesson). It's wild to me now to see networks that have solved the UX problem, but other networks are so entrenched people ignore it or downplay it because it's a risk to their existing investment.
Because everyone agreeing on the same handful of L1s is almost a working definition of cryptocurrency adoption.
> People still don't understand cryptocurrencies, and at this point it seems more like intentional obtuseness for political reasons.
Your assumption that the only reason to hate cryptocurrencies is ignorance is not reasonable.
> in order to make them decentralized
"Decentralized" and "blockchain" are not synonyms. Blockchain technology is a wildly, insanely expensive way to decentralize an application: https://www.usenix.org/publications/loginonline/web3-fraud
Your assumption that the only reason to hate cryptocurrencies is ignorance is not reasonable.
> in order to make them decentralized
"Decentralized" and "blockchain" are not synonyms. Blockchain technology is a wildly, insanely expensive way to decentralize an application: https://www.usenix.org/publications/loginonline/web3-fraud
Do you have a better way to decentralize digital money?
Why would he need that tomfoolery when he has Apple Watch Touch'n'Go Pay at his local store!
> At the same time, cryptocurrencies still haven't provided a killer app that shuts everyone up.
I disagree. The killer app is cash and that use case was intentionally killed by the bitcoin maximalists.
I disagree. The killer app is cash and that use case was intentionally killed by the bitcoin maximalists.
Have you used the Lightning Network?
Who would have thought Vitalik would have been the first human(?) to pass an Intellectual Turing Test of mimicking his ideological opponent? Laudably, he seeks only to remove the beam from his own eye [0], and turns criticism not only on his own public persona, but his own team's legacy and design decisions, and even steelmans the more "seedy" aspects of bitcoin culture.
It's hard not to see the massive influence of Scott Alexander in the way Vitalik presents his ideas and structures his essay. One SSC meme that kept coming up in my mind as I read the essay is that "ideas are soldiers" [1] is certainly in play with the blockchain wars. It's refreshing to see we have leaders in this space that can recognize the bravery of the enemy's soldiers. At least for today!
[0]: https://biblehub.com/matthew/7-5.htm
[1]: https://www.lesswrong.com/tag/arguments-as-soldiers
It's hard not to see the massive influence of Scott Alexander in the way Vitalik presents his ideas and structures his essay. One SSC meme that kept coming up in my mind as I read the essay is that "ideas are soldiers" [1] is certainly in play with the blockchain wars. It's refreshing to see we have leaders in this space that can recognize the bravery of the enemy's soldiers. At least for today!
[0]: https://biblehub.com/matthew/7-5.htm
[1]: https://www.lesswrong.com/tag/arguments-as-soldiers
So the creator of Ethereum makes (imo) a very impressive steelman argument against Ethereum (and most other coins). He clearly took some time with this. Pretty interesting take on the April Fools joke.
I sincerely understand Bitcoin maximalism now better than I have before.
I sincerely understand Bitcoin maximalism now better than I have before.
Keep in mind, before he started Ethereum, back in 2011 Vitalik started Bitcoin Magazine.
Also keeping in mind, Vitalik has always loved Bitcoin he just doesn't care for the maximalist culture so much. Vitalik created Ethereum after raking in tons of Bitcoin, loving the idea but choosing to take it in another direction with the smart contracting that had been disabled within the Bitcoin code.
> Blockchains sacrifice privacy, requiring even crazier and more expensive technology to get that privacy back.
The Mimblewimble protocol [0] bucks that trend, providing more privacy at the base layer while being less expensive in terms of the historical size of transactions [1].
> a focus on simplicity and deep mathematical purity: a 1 MB block size, a 21 million coin limit
A supply of 50/(2^{height/210000}) coins every 10 minutes is not particularly simple or pure. One coin per second forever seems preferable, even if it takes a century to get inflation down to 1% [2].
> The protocol design must be easy to justify decades and centuries down the line; the technology and parameter choices must be a work of art.
This is where Ethereum fails miserably.
> The second ingredient is the culture of uncompromising, steadfast minimalism.
Even bitcoin is not that minimal if you consider the complexities of bitcoin script. Much of that functionality can be achieved with scriptless scripts [3].
[0] https://web.archive.org/web/20190312100102/https://www.circl...
[1] https://forum.grin.mw/t/scalability-vs-privacy-chart
[2] https://john-tromp.medium.com/a-case-for-using-soft-total-su...
[3] https://medium.com/scalar-capital/scriptless-scripts-25e18fd...
The Mimblewimble protocol [0] bucks that trend, providing more privacy at the base layer while being less expensive in terms of the historical size of transactions [1].
> a focus on simplicity and deep mathematical purity: a 1 MB block size, a 21 million coin limit
A supply of 50/(2^{height/210000}) coins every 10 minutes is not particularly simple or pure. One coin per second forever seems preferable, even if it takes a century to get inflation down to 1% [2].
> The protocol design must be easy to justify decades and centuries down the line; the technology and parameter choices must be a work of art.
This is where Ethereum fails miserably.
> The second ingredient is the culture of uncompromising, steadfast minimalism.
Even bitcoin is not that minimal if you consider the complexities of bitcoin script. Much of that functionality can be achieved with scriptless scripts [3].
[0] https://web.archive.org/web/20190312100102/https://www.circl...
[1] https://forum.grin.mw/t/scalability-vs-privacy-chart
[2] https://john-tromp.medium.com/a-case-for-using-soft-total-su...
[3] https://medium.com/scalar-capital/scriptless-scripts-25e18fd...
There's also something to be said about extreme design simplicity and resilience to change. Bitcoin is already really good at this, but when the system design is so simple that any change looks invasive, it ossifies even sooner and makes changes even less likely. Removing opportunities for discussion (e.g. scripting support and opcode discussions) also removes opportunity for conflicts regarding a protocol feature. Simpler design may come at the cost of slightly less expressivity, but at the benefit of being naturally more resilient to change.
''Eth fails miserably ''
Ethereum failed already at beginning. A blockchain; Mutable ,premined and ICO is already there. Eth is the target for regulations and censorship sooner or later. And i agree with that scalability is very important part of decentralization. Privacy and scalability well balanced in MimbleWimble.
Ethereum failed already at beginning. A blockchain; Mutable ,premined and ICO is already there. Eth is the target for regulations and censorship sooner or later. And i agree with that scalability is very important part of decentralization. Privacy and scalability well balanced in MimbleWimble.
Well Ethereum has enabled a sea of scams and a carnage of Web3 hype, ICOs, NFTs, Tokens, DAOs, DeFi rug-pulls and everything else using so-called 'smart contracts' (that are not what they say they are) that all ruined it from the very start.
90% of the creations on Ethereum are useless and there is little there that is worth looking at. From the start, it was not designed to scale at all hence its sluggish throughput and high fees. Now it is going to become even more centralized when it moves to PoS.
Might as well drop the decentralization claims then.
90% of the creations on Ethereum are useless and there is little there that is worth looking at. From the start, it was not designed to scale at all hence its sluggish throughput and high fees. Now it is going to become even more centralized when it moves to PoS.
Might as well drop the decentralization claims then.
> 90% of the creations on Ethereum are useless and there is little there that is worth looking at. From the start, it was not designed to scale at all hence its sluggish throughput and high fees.
Sounds like early internet BBS boards!
RE: ETH decentralization, they've prioritized decentralization of the settlement layer over the decentralization of money in the world, which does somewhat reflect the current state of the world.
Sounds like early internet BBS boards!
RE: ETH decentralization, they've prioritized decentralization of the settlement layer over the decentralization of money in the world, which does somewhat reflect the current state of the world.
Proof of Stake in general also failed in the very early days in concept and allows for easy restructuring of block rewards and monetary policy. Ethereum has been able to change monetary policy about six times now and is tantamount to a fiat currency with even more despotic bent.
> Eth is the target for regulations and censorship sooner or later.
Same for Bitcoin — but it'll never happen.
Same for Bitcoin — but it'll never happen.
I'm seriously considering a career pivot to being a freelance editor for cryptocurrency bloggers as not-having one appears to be one of the few things crypto millionaires can no longer afford.
Given it's April Fools day, I think this may be GPT-3 trained on crypto subreddits and rationalist blogs.
Given it's April Fools day, I think this may be GPT-3 trained on crypto subreddits and rationalist blogs.
[deleted]
Reads very much like written by GPT-3
Well, Vitalik is a robot...
Vitalik is such a gigachad big brain 4D chess rotator that he can still manage to write an extremely insightful commentary even when it’s as an April Fool’s joke.
All the arguments here for BTC maximalism are actually better arguments for Monero, which is also MORE decentralized and is unparalleled in privacy.
Monero has some strong points, but it's actually LESS decentralized than Bitcoin. A Monero confidential transaction is 1.5kb while a Bitcoin transaction which is only around 300 bytes. For the argument of decentralization, it doesn't matter that it doesn't blind the amounts or add decoys inputs, the 5x size of a transaction itself means that the chain is much bigger than Bitcoin under the same load which makes it less decentralized due to much higher storage requirements for a full node. It's also much slower to verify the history because of all the rangeproofs that need to be validated for all outputs that have been ever created.
Honest question because I don't know much about Monero: can you build layered networks like Lighting on top of Monero as you can with Bitcoin? If not, then Monero seems a non-starter for a global currency/payment system.
Why is uncensorable money worth the risk of permanently losing your money because you forgot a password or lost a thumb drive?
In my view, how you earn your money affects how you value it.
Many with cryptocurrency haven't had to do any hard honest work to obtain it, e.g. the early joiners who have just had to wait as their "wealth" accrues from later joiners, or even newer joiners who have made their "wealth" from scams or rugpulls or wash trading to artificially inflate the value of their NFTs or whatever. These people tend not to value their "wealth" in the same way as the "greater fools" who have had to work hard at honest jobs to earn their fiat prior to converting it to cryptocurrency, and so don't have such a problem with the constant risk of losing everything via loss or theft or market crash or whatever.
Many with cryptocurrency haven't had to do any hard honest work to obtain it, e.g. the early joiners who have just had to wait as their "wealth" accrues from later joiners, or even newer joiners who have made their "wealth" from scams or rugpulls or wash trading to artificially inflate the value of their NFTs or whatever. These people tend not to value their "wealth" in the same way as the "greater fools" who have had to work hard at honest jobs to earn their fiat prior to converting it to cryptocurrency, and so don't have such a problem with the constant risk of losing everything via loss or theft or market crash or whatever.
Putting a significant amount of money into something that the vast majority of "intelligent" people say is a scam (as you do), is reward for taking risk. No different than an investor looking at small cap stocks to pick winners and throwing a lot of money in. It seems you are criticizing the concept of investing.
Something is only a sound investment if you know all sides are bound by rule of law. If you were to put money into a shell game at the local unlicenced market, then that would not be classed as a sound investment (even if you did know how to "beat the system" there's a good chance an accomplice would mug you for your winnings after you walked away). Or if you received a cold call from someone claiming to be a stockbroker with "insider knowledge" encouraging you to buy shares that they "know" are about become very valuable, that would not be classed as a sound investment.
With cryptocurrency it is the same. The combination of zero consumer protection and anonymity is the perfect breeding ground for fraud. If you were being charitable, you could call converting fiat money into cryptocurrency a gamble, but certainly not a sound investment. The only people who will try to convince you otherwise are those set to gain from the fraud.
With cryptocurrency it is the same. The combination of zero consumer protection and anonymity is the perfect breeding ground for fraud. If you were being charitable, you could call converting fiat money into cryptocurrency a gamble, but certainly not a sound investment. The only people who will try to convince you otherwise are those set to gain from the fraud.
I don't think it's "rule of law" here, but information parity.
How you become sure you have as much information about the subject as the person you're dealing with (i.e., whether that's because it is required by law and you expect to have some recourse if it's violated, or because you are confident that you've had access to the relevant information for some other reason) isn't really important.
How you become sure you have as much information about the subject as the person you're dealing with (i.e., whether that's because it is required by law and you expect to have some recourse if it's violated, or because you are confident that you've had access to the relevant information for some other reason) isn't really important.
I don’t know that this is a good analogy.
They’re both inherently high risk, but the value derives from different things. With small caps, it’s the idea that one or more may grow to produce outsize returns in the future, whereas the other is hoping someone will come along later with more money to take you out of your position.
(The small caps for the most part aren’t attracting money based on popularity or memes, so are closer to high-risk investing than gambling on speculative assets).
They’re both inherently high risk, but the value derives from different things. With small caps, it’s the idea that one or more may grow to produce outsize returns in the future, whereas the other is hoping someone will come along later with more money to take you out of your position.
(The small caps for the most part aren’t attracting money based on popularity or memes, so are closer to high-risk investing than gambling on speculative assets).
I don't think that's what they're claiming at all. The "no different than" is doing the work here but I don't think it's warranted.
An investor in that situation has to (presumably, and I'm ignorant so maybe not) do work in doing research, having enough domain and industry knowledge to evaluate what a "winner" looks like in a given industry, understand how valuations are formed and what can make them wrong, etc etc.
Some of that is done by crypto people sure, but the difference between a big success and losing your money there seems a lot more luck-based than in normal investing.
People have been making the argument that investing is gambling for decades at this point, and I don't think that's completely wrong but it is very hard to draw the line. I am comfortable putting crypto trading on the gambling side of that line, and most forms of professional investing probably on the non-gambling side.
They are possibly a lot closer than I think they are, but I don't think that speaks well for either activity!
An investor in that situation has to (presumably, and I'm ignorant so maybe not) do work in doing research, having enough domain and industry knowledge to evaluate what a "winner" looks like in a given industry, understand how valuations are formed and what can make them wrong, etc etc.
Some of that is done by crypto people sure, but the difference between a big success and losing your money there seems a lot more luck-based than in normal investing.
People have been making the argument that investing is gambling for decades at this point, and I don't think that's completely wrong but it is very hard to draw the line. I am comfortable putting crypto trading on the gambling side of that line, and most forms of professional investing probably on the non-gambling side.
They are possibly a lot closer than I think they are, but I don't think that speaks well for either activity!
So it's cool if you take part in a pyramid scheme because you're taking on risk?
I don't think crypto is a pyramid scheme and your statement is an opinion not a fact.
Literally the only way you can profit with crypto is if people keep buying in at higher prices. It's the perfect instantiation of a pyramid scheme.
Literally the only way you can profit with real estate is if people keep buying in at higher prices. It's the perfect instantiation of a pyramid scheme.
Literally the only way you can profit with stocks is if people keep buying in at higher prices. It's the perfect instantiation of a pyramid scheme.
Literally the only way you can profit with stocks is if people keep buying in at higher prices. It's the perfect instantiation of a pyramid scheme.
> Literally the only way you can profit with real estate is if people keep buying in at higher prices. It's the perfect instantiation of a pyramid scheme.
Except, of course, if you live in it, rent it out or use it as businesses asset. Good luck doing that with crypto.
> Literally the only way you can profit with stocks is if people keep buying in at higher prices. It's the perfect instantiation of a pyramid scheme.
Except, of course, that you as a shareholder can influence the direction of the company and earn dividends. Good luck doing that with crypto.
Except, of course, if you live in it, rent it out or use it as businesses asset. Good luck doing that with crypto.
> Literally the only way you can profit with stocks is if people keep buying in at higher prices. It's the perfect instantiation of a pyramid scheme.
Except, of course, that you as a shareholder can influence the direction of the company and earn dividends. Good luck doing that with crypto.
What does that have to do with the original point?
- Real estate has real-world use cases
- Stocks have real-world use cases
- Bitcoin has real-world use cases
It's meaningless to describe any of these as pyramid schemes because "to profit you must be able to sell at a higher price to someone else". That's true of buying or selling anything.
- Real estate has real-world use cases
- Stocks have real-world use cases
- Bitcoin has real-world use cases
It's meaningless to describe any of these as pyramid schemes because "to profit you must be able to sell at a higher price to someone else". That's true of buying or selling anything.
Actually you can rent out crypto (to short sellers).
Or by staking for loans, other transactions.
A nice example of how the winners in the gold rush aren’t the suckers but the people selling stuff to the suckers.
You can live in real estate and get dividends from stocks. Cryptocurrencies are more similar to commodities: gold, wheat, coal. (You can consume wheat and coal, yes, but that consumes them and then you don't have them anymore; that's not profit.)
Yes, except gold, wheat, and coal have inherent value as physical items whereas crypto does not.
You see no value in having a currency that can't be inflated on a whim by your government? As in, the printing of money that reduces the purchasing power of the money sitting in your bank account. Really?
There is some value in having assets immune to inflationary money printing; indeed there are countless examples of such assets available for purchase such as stocks and real estate. My question remains: why is risk of permanently losing your money worth the alleged benefits of crypto? I am willing to accept 2% fees from Amex built into my purchases because such purchases are insured against fraud and deceptive business practice. Crypto provides none of that but it does provide a substantial non-zero risk of permanently losing access to your money because you forgot your password or lost your coke storage.
Stocks and real estate also pose a risk of permanently losing your money; for example, the company might go bankrupt, the real estate might be expropriated via adverse possession, or the government might freeze trade in the market until after you die, as has happened in a large number of cases since the Russian invasion of Ukraine. Even without government freezes, Ukrainian refugees whose savings were invested in Ukrainian real estate cannot spend them now (they are illiquid) and may lose them.
I recommend not storing your password with your coke.
I recommend not storing your password with your coke.
Bitcoin is not and never can be currency.
It's a currency now, for dozens of nations and hundreds of millions of humans.
I'm afraid your comment doesn't make much sense.
I'm afraid your comment doesn't make much sense.
That which can be asserted without evidence, can be dismissed without evidence.
Commodity traders couldn't care less, and the vast majority of the use of gold is purely commerce, unrelated to its inherent value for plating electrical contacts or coating mirrors.
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> Literally the only way you can profit with crypto is if people keep buying in at higher prices. It's the perfect instantiation of a pyramid scheme.
How does that differ from other commodities trading? The only way to profit in the futures market is to buy low and sell high, too, for instance.
How does that differ from other commodities trading? The only way to profit in the futures market is to buy low and sell high, too, for instance.
Commodities are eventually consumed or used. Traders don't buy wheat futures for the joy of collecting wheat futures, they buy them because eventually some business wants to buy and use the actual wheat.
The "and use" phrase is what differentiates commodities from cryptocurrency.
The "and use" phrase is what differentiates commodities from cryptocurrency.
Sure corporations use futures to ensure stable prices but there are also traders that specifically just trade futures without any hope for receiving the underlying commodity.
> differ from other commodities trading
It doesn’t. Trading is zero sum. It supports the extraction, processing and delivery of useful things, however, which is positive sum.
It doesn’t. Trading is zero sum. It supports the extraction, processing and delivery of useful things, however, which is positive sum.
Trading is only zero sum at an instant in time and space. Moving or holding commodities can change the sum of the trade.
> Trading is only zero sum at an instant in time and space. Moving or holding commodities can change the sum of the trade.
Trading between financial participants is, cetiris paribus, always zero sum. Irrespective of the timeline.
Buyer's gains are the seller's opportunity cost; buyer's losses were avoided by the seller. (Paribus violation is when parties have different funding costs.)
Moving commodities around isn't trading per se; it's logistics. Again, value adding.
Trading between financial participants is, cetiris paribus, always zero sum. Irrespective of the timeline.
Buyer's gains are the seller's opportunity cost; buyer's losses were avoided by the seller. (Paribus violation is when parties have different funding costs.)
Moving commodities around isn't trading per se; it's logistics. Again, value adding.
>Trading between financial participants is, cetiris paribus, always zero sum.
Only if you consider the trade in the quantity of the goods traded, and not in a prevailing unit of accounting.
Only if you consider the trade in the quantity of the goods traded, and not in a prevailing unit of accounting.
> Only if you consider the trade in the quantity of the goods traded, and not in a prevailing unit of accounting
Nope, this is microeconomics. If you and I have the same funding costs and we trade a commodity derivative, any gain you have is a gain I gave up. Any loss you have is one I avoided.
This is true irrespective of the unit of account of point in time at which one measures it; it's an identity. The only
Nope, this is microeconomics. If you and I have the same funding costs and we trade a commodity derivative, any gain you have is a gain I gave up. Any loss you have is one I avoided.
This is true irrespective of the unit of account of point in time at which one measures it; it's an identity. The only
> Putting a significant amount of money into something that the vast majority of "intelligent" people say is a scam (as you do), is reward for taking risk.
I don't think this is any more a fact than my statement. I'm merely trying to point out that you seem to be saying it's ok to invest in what people perceive as a scam (my example was pyramid schemes) because it's an investment.
I don't think this is any more a fact than my statement. I'm merely trying to point out that you seem to be saying it's ok to invest in what people perceive as a scam (my example was pyramid schemes) because it's an investment.
No, they are just describing the well known mentality of "easy come, easy go".
Trade offs - bitcoin is not a free lunch.
If you want to be fully sovereign with your wealth, you have to accept full responsibility of that wealth. If that is not a responsibility you want bc you believe it is too risky, then do not buy bitcoin.
Or, you can trust centralized authority (a bank) with that responsibility; obviously, the trade off is you lose full control of your wealth.
Additionally, how you approach ownership of your wealth is not binary. Nothing is stopping you from putting some proportion of each in either bank or bitcoin.
If you want to be fully sovereign with your wealth, you have to accept full responsibility of that wealth. If that is not a responsibility you want bc you believe it is too risky, then do not buy bitcoin.
Or, you can trust centralized authority (a bank) with that responsibility; obviously, the trade off is you lose full control of your wealth.
Additionally, how you approach ownership of your wealth is not binary. Nothing is stopping you from putting some proportion of each in either bank or bitcoin.
What does being fully sovereign mean for something that's only used as a medium of exchange? It's value is always only meaningful when at least two people agree on it's value. At best you only control half of the equation.
> It's value is always only meaningful when at least two people agree on it's value.
Is it not totally obvious that bitcoin has market value?
If not, consider these points - bitcoin was not created by MIT and Uchicago STEM and econ PhDs, it was born out of an anonymous internet "white paper." It proved itself as a type of "money" in the internet dark markets, and continues to do so. It wasn't "lab tested," it was tested in the real world. When China banned crypto, the price of bitcoin did not crash. Only authoritarian countries have banned it, while some US lawmakers hold bitcoin and Gensler (chairmen of the SEC) taught a class at MIT about crypto.
These should be very compelling aspects of bitcoin.
Is it not totally obvious that bitcoin has market value?
If not, consider these points - bitcoin was not created by MIT and Uchicago STEM and econ PhDs, it was born out of an anonymous internet "white paper." It proved itself as a type of "money" in the internet dark markets, and continues to do so. It wasn't "lab tested," it was tested in the real world. When China banned crypto, the price of bitcoin did not crash. Only authoritarian countries have banned it, while some US lawmakers hold bitcoin and Gensler (chairmen of the SEC) taught a class at MIT about crypto.
These should be very compelling aspects of bitcoin.
What about the sovereign part? No one has total power over their money because its utility is always based in another's willingness to participate in the transaction.
If bitcoin existed before the Civil Rights movement in the US, it would not have helped people of color spend their money in "whites only" establishments or buy houses in white neighborhoods when (prior to 1948) a covenant could legally exclude a person of color from owning certain homes. And after 1948 the legal system could still be weaponized against such purchases, or if all else failed the buyer harassed or worse.
These are more extreme examples, but that sort of thing does still go on in places both in the US and elsewhere. Bitcoin or other crypto fall short of solving monetary censorship.
Separately, why does it matter where bitcoin was created? (especially given that we really don't know who created it anyway).
If bitcoin existed before the Civil Rights movement in the US, it would not have helped people of color spend their money in "whites only" establishments or buy houses in white neighborhoods when (prior to 1948) a covenant could legally exclude a person of color from owning certain homes. And after 1948 the legal system could still be weaponized against such purchases, or if all else failed the buyer harassed or worse.
These are more extreme examples, but that sort of thing does still go on in places both in the US and elsewhere. Bitcoin or other crypto fall short of solving monetary censorship.
Separately, why does it matter where bitcoin was created? (especially given that we really don't know who created it anyway).
Market value is having someone else have control over the value of what you control. Market value may not be centralized, but it is the definition of something you do not control. This is my point. You cannot have full control over something that's value is dictated by an external entity, the entity being the market in this case. The concept of having "full sovereignty" over something that you don't control the value of, and the only purpose is to exchange for something of value, is non-sensical.
> bitcoin was not created by MIT and Uchicago STEM and econ PhDs
How do you know?
How do you know?
Bc there is no way academics would not take credit for it. That's like expecting a fish not to swim.
The comparison isn't reasonably between "sovereign control of your wealth" and "in total control of what everyone else values." That doesn't even make sense.
The question worth asking is about how controlling your own wealth, but having to trust the value of it to a giant swath of people over which no one entity has any significant control, compares to not having any control of your own wealth, AND having the value of any wealth you do have dependent entirely on the will of some unelected bureaucrat.
The question worth asking is about how controlling your own wealth, but having to trust the value of it to a giant swath of people over which no one entity has any significant control, compares to not having any control of your own wealth, AND having the value of any wealth you do have dependent entirely on the will of some unelected bureaucrat.
I’d argue that the first rule of growing and preserving wealth is to avoid quasi-religious entanglements with it.
Arguments about sovereignty and control are all ultimately specious, as they depend on a global infrastructure paid for by “fiat” dollars to exist. Your “sovereignty” over a random number is meaningless without the network that facilitates its transfer.
To date, crypto has proven to be a uniquely awful store of wealth. It was initially a magical way to transfer value cheaply, but the growth of it got rid of the “cheap” part.
Arguments about sovereignty and control are all ultimately specious, as they depend on a global infrastructure paid for by “fiat” dollars to exist. Your “sovereignty” over a random number is meaningless without the network that facilitates its transfer.
To date, crypto has proven to be a uniquely awful store of wealth. It was initially a magical way to transfer value cheaply, but the growth of it got rid of the “cheap” part.
> To date, crypto has proven to be a uniquely awful store of wealth.
This is a striking claim about the asset class that has gone up in value more than any other in the years since its creation.
This is a striking claim about the asset class that has gone up in value more than any other in the years since its creation.
Tomorrow, it could be 50% less valuable than it is today.
It's a highly speculative investment at best, and a pyramid scheme at worst.
It's a highly speculative investment at best, and a pyramid scheme at worst.
How many days in the last 5 years has Bitcoin done a 50% change in a 24hr period?
On how many of those occasions was there no opportunity, within say 3-12 months, to sell for higher afterward?
and if you don't have the answer to this...
On how many of those occasions was there no opportunity, within say 3-12 months, to sell for higher afterward?
and if you don't have the answer to this...
That does not matter. If you bought at the peak in 2017 you would have had to wait 3 years later to come to equal and you would have been down 75% at the low in 2020. I would not consider this a store of value whatsoever. You are literally speaking to the volatility of btc by referencing the massive changes in value over short periods of time. Lets be honest, the majority of btc investors buy because they hope/believe more people will follow after them in a chase for massive gains. Not because the see intrinsic value in the product.
You can use a multisig service that allows you to keep control and makes it really hard lose your keys. Even still, if you're in a first world country and well off, it might not be for you. At least right now. But it's been hugely useful for Ukraine:
https://www.bloomberg.com/news/articles/2022-03-31/ukraine-s...
https://www.bloomberg.com/news/articles/2022-03-31/ukraine-s...
You could make the same argument against cash. You could easily lose your cash or have it stolen. That doesn't mean we should force everyone on a centralized digital ledger. You would be given some assurances in case of stolen funds through reversals. But there's a difference between accidentally losing your wallet and having your funds stolen because someone in power doesn't like you. The answer is to allow for both.
Who keeps a large percentage of their wealth in cash?
~22% of the US population if you equate being unbanked or underbanked with holding your wealth in cash.
Worldwide, the percentage is similar.
Of course being unbanked isn’t equivalent but it’s likely very nearly so.
Not to mention, the chances of being unbanked are higher for vulnerable populations, especially those who might benefit from uncensorable money.
Worldwide, the percentage is similar.
Of course being unbanked isn’t equivalent but it’s likely very nearly so.
Not to mention, the chances of being unbanked are higher for vulnerable populations, especially those who might benefit from uncensorable money.
Given the required internet access, transaction fees, and general tech sophistication required to use crypto (even more to use it safely), does it seem like it would be a good fit for those people?
I know a lot of "those people" who are using Bitcoin already, but I would never refer to unbanked people as "those people," being for all practical purposes one of them. We mostly aren't using it safely (a lot of us don't know the difference between Binance and Bitcoin) but we are using it.
The last transaction fee I paid was 33¢, and the average transaction in the last Bitcoin block was 913 bytes, so your internet access speed isn't an obstacle to sending a transaction as long as it's above about 20 bits per second; if you want to run a full node you need at least 17000 bits per second of internet access unless you're using the Blockstream satellite.
Typically I pay US$5 a month for cellphone internet access when I have it, but more commonly I use Wi-Fi in various places.
The last transaction fee I paid was 33¢, and the average transaction in the last Bitcoin block was 913 bytes, so your internet access speed isn't an obstacle to sending a transaction as long as it's above about 20 bits per second; if you want to run a full node you need at least 17000 bits per second of internet access unless you're using the Blockstream satellite.
Typically I pay US$5 a month for cellphone internet access when I have it, but more commonly I use Wi-Fi in various places.
How long before there's safe tech for relaying your transactions via other people's connections, as a cooperative distributed mesh, to improve confirmation and delivery speed of your own packets?
That's been part of Bitcoin since it was invented in 02008.
I hate to see this repeated argument, because it seems to indicate an unimaginative, or perhaps altruistic?, perspective regarding the future of tech's role in society.
Centralized internet is not long for this world. The Internet is being fractured, both ideologically and physically, right now, by world war.
This only gets worse before it gets better, which probably means mesh networks will be adopted soon enough. Anyway,
This is why adopting distribution of responsibilities is so important in projects like Ethereum — your offline handhelds will be able to make provable transactions without having immediate communication with every star in the constellation, so to speak.
Centralized internet is not long for this world. The Internet is being fractured, both ideologically and physically, right now, by world war.
This only gets worse before it gets better, which probably means mesh networks will be adopted soon enough. Anyway,
This is why adopting distribution of responsibilities is so important in projects like Ethereum — your offline handhelds will be able to make provable transactions without having immediate communication with every star in the constellation, so to speak.
The fit of alternatives was not the focus of the comment I was replying to.
The fact is that many people hold their wealth in cash, and many of the same people are part of vulnerable populations.
One shouldn’t remove another’s alternatives simply because it’s assumed that the other lacks access or sophistication. Even if true, both potential deficiencies are fully reparable and do not permanently negate the benefits of uncensorable money.
The fact is that many people hold their wealth in cash, and many of the same people are part of vulnerable populations.
One shouldn’t remove another’s alternatives simply because it’s assumed that the other lacks access or sophistication. Even if true, both potential deficiencies are fully reparable and do not permanently negate the benefits of uncensorable money.
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I don't know, but they're comparable in sophistication and foresight to people who keep a large percentage of their crypto wealth in a single-signature wallet. Neither one is a good idea.
It isn't difficult to set up multisignature wallets, where you can lose some subset of the keys and still retain access to the funds. (It's not easy either, but it's not difficult, and there are companies like Casa and Unchained making it easier.)
Just like someone might keep a couple hundred dollars in their wallet/on their person, a couple percent of their wealth in a home safe, and the majority of their wealth distributed across multiple locations with various failsafes to access it, someone might keep a couple hundred bucks worth of BTC in a wallet on their phone, another percent or two of their BTC in a single-sig hardware wallet in a safe at home, and the majority of their BTC in a 3-of-5 multisig setup with only two keys at home, one in a safety deposit box, one in a trusted family member's home, and one in the custody of their attorney.
It isn't difficult to set up multisignature wallets, where you can lose some subset of the keys and still retain access to the funds. (It's not easy either, but it's not difficult, and there are companies like Casa and Unchained making it easier.)
Just like someone might keep a couple hundred dollars in their wallet/on their person, a couple percent of their wealth in a home safe, and the majority of their wealth distributed across multiple locations with various failsafes to access it, someone might keep a couple hundred bucks worth of BTC in a wallet on their phone, another percent or two of their BTC in a single-sig hardware wallet in a safe at home, and the majority of their BTC in a 3-of-5 multisig setup with only two keys at home, one in a safety deposit box, one in a trusted family member's home, and one in the custody of their attorney.
> It isn't difficult to set up multisignature wallets
I don't think setting up the wallet is the hardest part. The hardest part would be to get into a legally binding agreement with the other parties, that you depend on from now on to access your "wealth", the very situation that crypto-currencies were supposed to avert.
I don't think setting up the wallet is the hardest part. The hardest part would be to get into a legally binding agreement with the other parties, that you depend on from now on to access your "wealth", the very situation that crypto-currencies were supposed to avert.
How is that any harder than getting into a legally binding agreement with anyone else about anything else under the existing system?
You can make sure they don't have enough of the keys to move your funds without your consent. Making a legally binding agreement that they have to give you access to the key they have if/when you demand it is no more complex a legal task than any other instance where you trust someone to custody something for you.
You can make sure they don't have enough of the keys to move your funds without your consent. Making a legally binding agreement that they have to give you access to the key they have if/when you demand it is no more complex a legal task than any other instance where you trust someone to custody something for you.
> How is that any harder than getting into a legally binding agreement with anyone else about anything else under the existing system?
I never said it was harder. I'm merely pointing out that the proposed solution to this particular usability issue that crypto-currencies suffer from involves reverting back to a web of mutual obligations enforced by courts of justice, which entirely defeats the purpose of using a crypto-currency.
I never said it was harder. I'm merely pointing out that the proposed solution to this particular usability issue that crypto-currencies suffer from involves reverting back to a web of mutual obligations enforced by courts of justice, which entirely defeats the purpose of using a crypto-currency.
Did you see the videos of Russians lining up all day to try to withdraw tiny amounts of cash from an ATM?
But I'm not in Russia and it feels I have to do
A) huge amount of research
B) huge amount of risk / personal responsibility
C) and Still trust some or multiple 3rd party services to practically obtain or withdraw bitcoin, which have same or more power or likelihood to cut me off
I (think) understand the dream. I don't see the reality of seamlessly easily practically safely cheaply transacting bitcoin. As a mediocre techie, every time I ponder getting some bitcoin for giggle, I get lost in conolex how tos and run screaming away from complexity and risk.
A) huge amount of research
B) huge amount of risk / personal responsibility
C) and Still trust some or multiple 3rd party services to practically obtain or withdraw bitcoin, which have same or more power or likelihood to cut me off
I (think) understand the dream. I don't see the reality of seamlessly easily practically safely cheaply transacting bitcoin. As a mediocre techie, every time I ponder getting some bitcoin for giggle, I get lost in conolex how tos and run screaming away from complexity and risk.
I find it takes even more effort to continually understand the situation of the traditional financial system and the current status of geopolitics. I don't know when my country could became the next Russia. It's a hostile world out there; effort is required to survive, and risk is unavoidable
That's fair; but I was talking about strictly logistics of having cash and withdrawing cash, compared to having bitcoin and using/withdrawing bitcoin.
Luckily, there are already mitigations for risk of loss, notably backups and multi-signature wallets. Both have tradeoffs and additional mitigations. Backups are additional single points of failure but can be protected by passphrases. Multi-signature is more complicated but has no single point of failure and redundancy.
Future developments like covenants (restricting future spending of a coin) will create even more secure storage, systems that allow you to claw back stolen funds using backup keys for example.
Future developments like covenants (restricting future spending of a coin) will create even more secure storage, systems that allow you to claw back stolen funds using backup keys for example.
> systems that allow you to claw back stolen funds using backup keys for example
Doesn't that remove the trust in the transaction? Isn't the one of the promised joys of these things that, short of a fork, the transaction is immutable and that people don't have to worry about fraud in the form of charge backs or their money disappearing once they have it?
Doesn't that remove the trust in the transaction? Isn't the one of the promised joys of these things that, short of a fork, the transaction is immutable and that people don't have to worry about fraud in the form of charge backs or their money disappearing once they have it?
Not necessarily.
If you know the mechanism for potential reversal of the transaction and trust the process responsible for making the decision about when to reverse a transaction, you've known the rules and the context from the start.
It would have to be a well-designed process to earn your trust, but it's not an unsolvable problem.
To my knowledge, there aren't any smart contracts that have implemented such a system really well yet, but I might just not have heard about them, or they may just not have been tried yet.
If you know the mechanism for potential reversal of the transaction and trust the process responsible for making the decision about when to reverse a transaction, you've known the rules and the context from the start.
It would have to be a well-designed process to earn your trust, but it's not an unsolvable problem.
To my knowledge, there aren't any smart contracts that have implemented such a system really well yet, but I might just not have heard about them, or they may just not have been tried yet.
Well, I'd be interest in how this turns out - the only way I can envision it is either both parties need to agree to a return (which can already be done by agreement), one party has to agree (taking agency away from the other), or a "higher power" needs to agree (removing the freedom from governance that these technologies propose to offer). In most of these cases there's self-determination being lost.
The third party has to demonstrate trustworthiness, but isn't that always how arbitration of a disagreement works? Even in the existing monetary system with all its clawbacks, someone has to decide whether you're actually eligible to get your money back.
At least in this system, you could have whole services that build a track record based on publicly identifiable information. You can't flood them with reviews to skew the results because you can cryptographically verify whether the reviewer was party to the disputed transaction.
There are a thousand theoretical variants on the same basic idea, but it's at least no worse than the existing system.
At least in this system, you could have whole services that build a track record based on publicly identifiable information. You can't flood them with reviews to skew the results because you can cryptographically verify whether the reviewer was party to the disputed transaction.
There are a thousand theoretical variants on the same basic idea, but it's at least no worse than the existing system.
It doesn't, because the systems I'm talking about don't require trust, they're built from the Bitcoin scripting language (well, proposed changes to it).
https://utxos.org/uses/vaults/
https://utxos.org/uses/vaults/
That is an inherently subjective question, possibly with different answers for people in different circumstances and with different risk appetites.
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This is similar to losing your wallet full of cash. Simply do not lose your cash. Don't store every dollar of your cash in one place so easily to lose, either.
you are welcome to offload that responsibility to a hosted wallet if you don't think you can handle it
Or an attorney.
Or five different parties you trust.
Or five different parties you trust.
This has been solved with X-of-N multisig since 2012, but its opt-in.
Because you have a choice of how to custody it.
the reason you lost your money is more important than whether you have any money
The answer to that question was demonstrated quite clearly in Canada just two months ago.
The Defense of Toxicity section reads to me like a defense of Linus Torvalds or Richard Stallman.
Torvalds has apologized for past toxic and the damage it incurred, behavior and has vowed to do better from then on.
Vitalik proposed a theory that the toxicity is a valid and perhaps even necessary defense mechanism.
I don't pretend to know whether Vitalik's theory is true, but it certainly seems plausible. And defending linux from bad actors is a herculean task. If Torvald's toxicity helped him in that endeavor, his apology would be a negative development.
Interestingly, the Rust community has had incredible success being explicitly anti-toxic. It's a wonderful community that I enjoy. Rust is also now reaching a level importance that it will be a target to be coopted as described by Vitalik, as prominent members of the Rust community have expressed concern over [0].
[0] https://twitter.com/steveklabnik/status/1437441118745071617
I don't pretend to know whether Vitalik's theory is true, but it certainly seems plausible. And defending linux from bad actors is a herculean task. If Torvald's toxicity helped him in that endeavor, his apology would be a negative development.
Interestingly, the Rust community has had incredible success being explicitly anti-toxic. It's a wonderful community that I enjoy. Rust is also now reaching a level importance that it will be a target to be coopted as described by Vitalik, as prominent members of the Rust community have expressed concern over [0].
[0] https://twitter.com/steveklabnik/status/1437441118745071617
It seems to me the threat model of Rust is a magnitude safer than that of Bitcoin under assumption that Bitcoin was to become a global store of wealth. Toxicity acts as a shield to protect against social attacks from the big players which may try to, in some way, capture control of the network or influence its direction. And there are very good incentives to try and do that. It's also why it's important for the protocol to ossify over time and become even more conservative. Rust, as well as the vast majority of open source communities, doesn't really need that these levels of toxicity to survive in the long run because the attack vectors aren't on the same level (although still very important to deflect attacks because there are other incentives in play). At least it seems to me to be this way, I'll gladly listen to a counter-argument.
> Vitalik proposed a theory...
That is not at all original to Vitalik. It pre-exists in the bitcoin community and maybe is even older than that.
That is not at all original to Vitalik. It pre-exists in the bitcoin community and maybe is even older than that.
[deleted]
Uh oh
We've been hearing for years that the future is blockchain, not Bitcoin.
They're wrong. The future is smart contracts, and moving off blockchains in favor of other distributed systems. Blockchains is what's holding the entire space back.
These are the three things that need to be done to make crypto go mainstream: https://intercoin.org/proposal.pdf
They're wrong. The future is smart contracts, and moving off blockchains in favor of other distributed systems. Blockchains is what's holding the entire space back.
These are the three things that need to be done to make crypto go mainstream: https://intercoin.org/proposal.pdf
Perhaps before commenting today, look at the date.
geez people it's an April Fools joke!!
Vitalik Buterin is the founder of Ethereum.
Vitalik Buterin is the founder of Ethereum.
And also, probably lesser known, he’s the founder of Bitcoin Magazine
It's no coincidence that some of the strongest criticism against cryptocurrency happens here, in a community mostly of banked, relatively prosperous people in stable countries.
May you never personally experience being unbanked or otherwise financially oppressed.
May you never personally experience being unbanked or otherwise financially oppressed.
Not that you're wrong about anything that you've said, but your implication (and that of the blockchain punditry) is that somehow crypto is the solution here, without ever exaplaining "how".
The idea that crypto is "out of reach" of governments, regulators, law and oppressive regimes is one of the fairy tales that crypto pundits believe that is simply not true.
In a country that is unbanked and financially oppressed, even if you were loaded with BTC, and even if all your suppliers of food, housing, energy, clothing, schooling etc were somehow setup to transact in BTC, no-one explains how they'll just "bypass" the financial system, tax system, government regulators or the people with guns. There is a naive certainty that people can "sidestep" the formal system and no-one will ever come knocking. In unbanked, oppressed countries? This fairy tale that the "system" will just keep working but the "nasty government" will throw its hands up and go "YOLO BTC what are you gonna do lol carry on everyone". Please. It's the easiest thing in the world to pass laws outlawing this stuff, and then lean on infrastructure, network providers, suppliers, etc etc..
Nevermind the transaction fees that make this untenable anyway. Perhaps the poor oppressed can just write everything down on paper to settle accounts at the end of the month/quarter/year/never and dodge tx fees. Of course, L2 networks, problem solved.
Anyway. I suppose BTC growth has to come from somewhere. So why not exploit the global south further under the aegis of yet another colonial missionary expedition to save them from themselves. This may make life worse in the end for the savages but hey, a bunch of us will get richer.
The idea that crypto is "out of reach" of governments, regulators, law and oppressive regimes is one of the fairy tales that crypto pundits believe that is simply not true.
In a country that is unbanked and financially oppressed, even if you were loaded with BTC, and even if all your suppliers of food, housing, energy, clothing, schooling etc were somehow setup to transact in BTC, no-one explains how they'll just "bypass" the financial system, tax system, government regulators or the people with guns. There is a naive certainty that people can "sidestep" the formal system and no-one will ever come knocking. In unbanked, oppressed countries? This fairy tale that the "system" will just keep working but the "nasty government" will throw its hands up and go "YOLO BTC what are you gonna do lol carry on everyone". Please. It's the easiest thing in the world to pass laws outlawing this stuff, and then lean on infrastructure, network providers, suppliers, etc etc..
Nevermind the transaction fees that make this untenable anyway. Perhaps the poor oppressed can just write everything down on paper to settle accounts at the end of the month/quarter/year/never and dodge tx fees. Of course, L2 networks, problem solved.
Anyway. I suppose BTC growth has to come from somewhere. So why not exploit the global south further under the aegis of yet another colonial missionary expedition to save them from themselves. This may make life worse in the end for the savages but hey, a bunch of us will get richer.
Real-world situations aren’t binary. They don’t just automatically go to the extreme edge case. It’s a common mistake of programmers whose brains are trained to think that way (mine included!)
So when the government is bad people who have guns, it might be tempting to think “There is no mitigation for this because they have guns! They can just exert infinite leverage at any point to squelch any mitigation to their corruption!”
But reality is there are only so many bad guys with guns and they can’t be everywhere all the time. Every additional tool people have to circumvent corruption helps.
Can they access the internet and read content from free countries? Educate themselves? It helps. Even if it invites persecution, it helps.
Can they access some way of storing value their corrupt leaders can’t just steal or print away? It helps. Sure someone can come to the door with a gun and demand your wallet key, but until then, it helps.
So when the government is bad people who have guns, it might be tempting to think “There is no mitigation for this because they have guns! They can just exert infinite leverage at any point to squelch any mitigation to their corruption!”
But reality is there are only so many bad guys with guns and they can’t be everywhere all the time. Every additional tool people have to circumvent corruption helps.
Can they access the internet and read content from free countries? Educate themselves? It helps. Even if it invites persecution, it helps.
Can they access some way of storing value their corrupt leaders can’t just steal or print away? It helps. Sure someone can come to the door with a gun and demand your wallet key, but until then, it helps.
Using cryptocurrency to avoid financial oppression is only really viable when it's obscure. If a small number of people are using a crypto black market, it isn't really worth the effort for a government to try and shut it down. The more popular it becomes, the bigger the target, and the more likely it will be shut down.
An obscure cryptocurrency black market is the only one that can really exist for any length of time. However, an obscure crypto ecosystem is also one that is difficult to actually use. It doesn't matter how much Bitcoin you've hidden from the government, if you can't actually spend it on anything.
An obscure cryptocurrency black market is the only one that can really exist for any length of time. However, an obscure crypto ecosystem is also one that is difficult to actually use. It doesn't matter how much Bitcoin you've hidden from the government, if you can't actually spend it on anything.
It's the cost of enforcement, both politically and financially, that decides this, not much else.
looks like that until you can instantly pay by winking to each other at 0 fees for 100% of your use cases on a proof-of-orphans-being-adopted or proof-of-cancer-being-cured blockchain, crypto deniers won't be satisfied.
the system doesn't have to be perfect and you don't have to be 100% invested for it to work, you can still be helped by crypto in a financially oppressed country even if you don't use it for everyday transactions, even if you don't use for all your money, even if you use it once per year.
like any other options, you use the best one for each situation, and crypto fills a huge gap here, fees included.
the system doesn't have to be perfect and you don't have to be 100% invested for it to work, you can still be helped by crypto in a financially oppressed country even if you don't use it for everyday transactions, even if you don't use for all your money, even if you use it once per year.
like any other options, you use the best one for each situation, and crypto fills a huge gap here, fees included.
> no-one explains how they'll just "bypass" the financial system, tax system, government regulators or the people with guns
Here's one explanation - when the people with guns realize they are paid in a fiat currency that their bosses keep inflating for their own benefit, what do you think they will do?
Another - who will the people with guns shoot at when they can't identify an anonymous crypto wallet?
Here's one explanation - when the people with guns realize they are paid in a fiat currency that their bosses keep inflating for their own benefit, what do you think they will do?
Another - who will the people with guns shoot at when they can't identify an anonymous crypto wallet?
> when the people with guns realize they are paid in a fiat currency that their bosses keep inflating for their own benefit, what do you think they will do?
Same thing that happens in Venezuela. You pay your army in real assets and hard currency.
> who will the people with guns shoot at when they can't identify an anonymous crypto wallet?
Which is a false assumption, given recent history.
Same thing that happens in Venezuela. You pay your army in real assets and hard currency.
> who will the people with guns shoot at when they can't identify an anonymous crypto wallet?
Which is a false assumption, given recent history.
> Same thing that happens in Venezuela. You pay your army in real assets and hard currency.
Venezuela proves my point - it's a borderline failed state where the government is very, very fragile.
> Which is a false assumption, given recent history.
You may be referring to the Colonial Pipeline hackers. When hackers implement strong crypto opsec, it is impossible to catch them.[1] Dumb and careless criminals get caught all the time, there are a lot more that don't.
[1] Use wasabi or samourai for coinjoins. Run a full node. Use a wallet with coin control and labelling. Buy from Bisq. Or use Monero.
Venezuela proves my point - it's a borderline failed state where the government is very, very fragile.
> Which is a false assumption, given recent history.
You may be referring to the Colonial Pipeline hackers. When hackers implement strong crypto opsec, it is impossible to catch them.[1] Dumb and careless criminals get caught all the time, there are a lot more that don't.
[1] Use wasabi or samourai for coinjoins. Run a full node. Use a wallet with coin control and labelling. Buy from Bisq. Or use Monero.
> hackers implement strong crypto opsec, it is impossible to catch them
Take out the word "crypto" and this statement is equally true. Law enforcement probably won't catch a criminal with good opsec whether they're using cash or Bitcoin or bags of cocaine.
Take out the word "crypto" and this statement is equally true. Law enforcement probably won't catch a criminal with good opsec whether they're using cash or Bitcoin or bags of cocaine.
> Nevermind the transaction fees that make this untenable anyway. ... Of course, L2 networks, problem solved.
We've already agreed on our dominant L1s.
What happens when we've agreed on our dominant L2(s)?
Say, with the UX help of a large corporate entity with financial interest in actually helping their consumer remain financially secure?
We've already agreed on our dominant L1s.
What happens when we've agreed on our dominant L2(s)?
Say, with the UX help of a large corporate entity with financial interest in actually helping their consumer remain financially secure?
> no-one explains how they'll just "bypass" the financial system
The concept you seem to be reaching for is "black market".
The concept you seem to be reaching for is "black market".
Gateway to which can be a 10bps modem and/or a school calculator Bitcoin wallet...
Perhaps it's because the people on a tech forum see the problems of a tech hammer banging on everything it perceives as a nail better than others?
My friend, I worked in the tech side of a big bank that you might have an account with, so I have seen how the sausage is made. I would trust Google, Apple, and many other tech companies with my money.
A better analogy - tech improves the hammer, it does not have to re-invent it. Example: open your phone and marvel at how easily you can send and receive funds from you banking app; 10+ years ago, you would have to go to a bank to do that.
A better analogy - tech improves the hammer, it does not have to re-invent it. Example: open your phone and marvel at how easily you can send and receive funds from you banking app; 10+ years ago, you would have to go to a bank to do that.
My rule of thumb for tech companies is they're all a mess under the covers so every company looks bad from the inside compared to the outside.
> I would trust Google, Apple, and many other tech companies with my money.
When I have a problem and need to call my bank I can usually get an actual person or even go to a branch where I can annoy someone in person, where as Google acts like categorically opposed to support even to people paying or making them money.
> I would trust Google, Apple, and many other tech companies with my money.
When I have a problem and need to call my bank I can usually get an actual person or even go to a branch where I can annoy someone in person, where as Google acts like categorically opposed to support even to people paying or making them money.
Not to mention, if you protest an extensively corrupt government, they could just call up <big-tech-company> and say "Hey, shut 'em down." And they'd happily oblige.
That doesn't happen as easily on the blockchain.
You are fully in control of your funds with cryptocurrency. There is no middleman that can say "no, sorry, you can't use your money today."
That doesn't happen as easily on the blockchain.
You are fully in control of your funds with cryptocurrency. There is no middleman that can say "no, sorry, you can't use your money today."
> You are fully in control of your funds with cryptocurrency. There is no middleman that can say "no, sorry, you can't use your money today."
Don't blockchains rely entirely on transaction processors, i.e. middlemen, to process transactions?
Don't blockchains rely entirely on transaction processors, i.e. middlemen, to process transactions?
Miners could in theory decide to blacklist transactions from particular addresses which are pseudoanonymous. It's a harder coordination problem because miners are less geographically concentrated since the mining ban in China [0] but it's not inconceivable for a country to restrict mining in that way though which would pretty quickly restrict your ability to get transactions included successfully because you'd have a double gamble first on a non-restricted miner including you then on being included on their block (which you could increase by overpaying transaction fees).
[0] https://www.visualcapitalist.com/after-chinas-crypto-ban-who...
[0] https://www.visualcapitalist.com/after-chinas-crypto-ban-who...
Yeah, you can get a person on the phone, who will calmly and patiently explain that they are going to proceed with fucking you because it's their policy to fuck you. Google doesn't pay a human to answer the phone, they just go ahead and fuck you. Either way, you're getting fucked, and the only difference is that if you do it the boomer way you get free phone therapy.
Personally I don't much care for free phone therapy. I think you get what you pay for.
Personally I don't much care for free phone therapy. I think you get what you pay for.
I agree with your point about customer service, but I am more concerned about poor security practices at banks, like the Capital 1 / AWS incident.
> 10+ years ago, you would have to go to a bank to do that
I've been doing 100% online/mail banking for >20 years. I've never actually set foot inside a bank that I was a routine customer of.
I've been doing 100% online/mail banking for >20 years. I've never actually set foot inside a bank that I was a routine customer of.
I meant on a phone app, specifically.
As someone who works in finance and sees the messiness, my takeaway is the exact opposite: the bad tech is evidence that the maintenance of the monetary system is largely not a tech concern, it’s an institutional and societal trust concern. And that’s why banks are actually pretty decent at it.
I’m not saying there aren’t major improvements to be made in fintech, but I think by and large crypto is trying to improve parts of finance that are not actually improved by technology.
I’m not saying there aren’t major improvements to be made in fintech, but I think by and large crypto is trying to improve parts of finance that are not actually improved by technology.
the "hammer" under discussion is bitcoin (and/or cryptocurrency in general). not online banking.
analogies are for when you are trying to explain something to someone who lacks the capacity to understand the high-dimensional representation of the problem.
its like talking to a kid vs talking to a grown-up, to put it in terms you might better be able to grok
its like talking to a kid vs talking to a grown-up, to put it in terms you might better be able to grok
correct me if I'm wrong but people using bitcoin in oppressed countries will basically be rendered penniless by simply cutting off network access. source: https://lukeplant.me.uk/blog/posts/the-technological-case-ag...
"Simply" is a pretty strong word. I live in a coutry where international transfers are pretty much banned. The government can easily freeze my bank account, but disconnect me entirely from the internet is on another level of difficulty.
As long as you know your private key and / or seed phrase, you will always have access to your wallet's funds. As soon as you get network access, you can transact. You literally have to cut off the internet to stop crypto - that is part of what makes it so compelling.
I don't understand your comment. Is there a meaningful difference between having "access to your wallet's funds" and being able to "transact"?
Well the parent claimed they would be rendered penniless. If you're temporarily unable to transact you're not penniless.
Or put another way, you are temporarily penniless. As long as that situation persists (which you may have no control over) you are penniless. You will rely on the charity or labor wages for resources in whatever local currency is used.
please read the linked article and rebut what they are saying.
> Both sides of the Bitcoin network would carry on working (although if there was an unequal divide, one side might be slowed so much that it became unusable). Let’s imagine this carried on for a few days or weeks before connections were properly restored. At this point we would have two divergent “branches” of the blockchain, which is not allowed. By design, there is no way to merge the branches, and Bitcoin will simply pick whichever of the two branches happens to be the longest. For the unlucky half, all transactions that happened during those days or weeks of network partition would be erased.
> Both sides of the Bitcoin network would carry on working (although if there was an unequal divide, one side might be slowed so much that it became unusable). Let’s imagine this carried on for a few days or weeks before connections were properly restored. At this point we would have two divergent “branches” of the blockchain, which is not allowed. By design, there is no way to merge the branches, and Bitcoin will simply pick whichever of the two branches happens to be the longest. For the unlucky half, all transactions that happened during those days or weeks of network partition would be erased.
I have already replied to this in a child comment to your original comment. Cutting off the internet is not realistic, there are ways around it.
No, an authoritarian government can always make it illegal to own crypto and/or to exchange crypto to fiat.
Nearly impossible to fully enforce via tech - there are many ways around a tech ban. Decentralized exchanges, TOR, VPNs, etc. can get a round a tech ban.
A policy ban is also an implicit admission that the government's position on money and finance is weak - if the US bans bitcoin, that implies that the dollar can't compete against bitcoin on its own merit, without the enforcement of violence.
A policy ban is also an implicit admission that the government's position on money and finance is weak - if the US bans bitcoin, that implies that the dollar can't compete against bitcoin on its own merit, without the enforcement of violence.
> policy ban is also an implicit admission that the government's position on money and finance is weak
Every country with capital controls already does this.
Most of them (e.g. Egypt, Iraq, Bangladesh and China) hand banned or heavily restricted (e.g. India) crypto. The same way they restrict hard currencies. America has an open capital account, so the threat is less present.
Every country with capital controls already does this.
Most of them (e.g. Egypt, Iraq, Bangladesh and China) hand banned or heavily restricted (e.g. India) crypto. The same way they restrict hard currencies. America has an open capital account, so the threat is less present.
But can they make it impossible? That's the important question.
The hope of people who believe in a future switch to crypto as the monetary standard are hoping the technology is strong enough to withstand enforcement of laws against it, hoping that all the laws in the world won't be able to stop it.
Whether that happens remains to be seen, but it's important to understand that this is part of the hope and the goal.
The hope of people who believe in a future switch to crypto as the monetary standard are hoping the technology is strong enough to withstand enforcement of laws against it, hoping that all the laws in the world won't be able to stop it.
Whether that happens remains to be seen, but it's important to understand that this is part of the hope and the goal.
Unenforceable laws aren't that relevant here
Regimes cutting off and limiting access to the internet is nothing new and they do it all the time. Many countries only have a few connections to the wider internet. Also 'access' is meaningless without the ability to be included in blocks.
People bypass China's firewall as well, why would this be subject to a different reality? Also even if we were to assume they can't access it, it doesn't mean the funds have disappeared from the wallet.
A single node with a 20kb/s link is all it takes to keep the network in sync in both directions. In a country with 100 million people, surely one or two of them have a satellite dish. You cannot partition an entire population from the sky.
Where would you say that the "unbanked, relatively not prosperous people in unstable countries" stand - in the "really like and benefit from cryptocurrency" camp, or in the "never heard of and don't care about cryptocurrency" camp ?
> May you never personally experience being unbanked or otherwise financially oppressed.
Of course. But this is unrelated, unless you're making the "politician's fallacy": "We must do something (about that). This is something. Therefore, we must do this."
> May you never personally experience being unbanked or otherwise financially oppressed.
Of course. But this is unrelated, unless you're making the "politician's fallacy": "We must do something (about that). This is something. Therefore, we must do this."
If you're going to claim to be speaking for an oppressed group I think you should be specific about which one, and what your relationship to that group is.
My experience with poverty in the US, having both experienced it myself and continuing to associate with many people experiencing it now, is that the main issue faced by poor people is having money, not having access to the money they do have.
Even for the "unbanked" or people who use high fee check cashing and similar products, that is largely a way to avoid unpredictable fees charged by banks, or simply because banks aren't willing to provide the services they need unbundled from other services you need more resources to access.
Plus the neobanks have really changed these dynamics in the last 5 or so years. If you're still working off pre-2018 conceptions of what the intersections of poverty and banking look like that can steer you way wrong here.
But anyway these are policy choices and we could make them different if we decided to. A complex technical solution is a poor first choice for solving this problem.
My experience with poverty in the US, having both experienced it myself and continuing to associate with many people experiencing it now, is that the main issue faced by poor people is having money, not having access to the money they do have.
Even for the "unbanked" or people who use high fee check cashing and similar products, that is largely a way to avoid unpredictable fees charged by banks, or simply because banks aren't willing to provide the services they need unbundled from other services you need more resources to access.
Plus the neobanks have really changed these dynamics in the last 5 or so years. If you're still working off pre-2018 conceptions of what the intersections of poverty and banking look like that can steer you way wrong here.
But anyway these are policy choices and we could make them different if we decided to. A complex technical solution is a poor first choice for solving this problem.
> poverty in the US
Here is where you go in the wrong direction. It's not about poor people in a stable country, it's about rich people in an unstable country. So the use-case is actually the complete opposite.
Here is where you go in the wrong direction. It's not about poor people in a stable country, it's about rich people in an unstable country. So the use-case is actually the complete opposite.
No that's pretty much the point I was making. The person I was responding to implies they have firsthand knowledge of the needs of the unbanked and "financially oppressed" globally.
I don't think knowledge that broad is possible and so it's largely a rhetorical move ("WHAT SO YOU HATE THE POOR & OPPRESSED??"). I have firsthand knowledge of at least one group in this category that isn't helped by this technology so I shared it.
The needs of the rich anywhere aren't an interest of mine so I don't know what their use case is. My point is that there are many use cases, and if you're going to assert one you should be specific about who it applies to.
I don't think knowledge that broad is possible and so it's largely a rhetorical move ("WHAT SO YOU HATE THE POOR & OPPRESSED??"). I have firsthand knowledge of at least one group in this category that isn't helped by this technology so I shared it.
The needs of the rich anywhere aren't an interest of mine so I don't know what their use case is. My point is that there are many use cases, and if you're going to assert one you should be specific about who it applies to.
I have been unbanked and am not open to talking about it publicly at this time.
The unbanked and financially oppressed don't want Bitcoin. They want dollars because that's what the rest of the world uses and it's not crazy volatile. It happens that cryptocurrency services are the best intermediary between dollars and the local currency because they're subsidized by crypto enthusiasts.
The reason people are unbanked is nearly always because they don't have any money.
People with very little money are not going to put it into "some phone app", as they will see it.
I've heard this idea that cryptocurrency is going to help people in poor countries for almost ten years. At this point, absent even one concrete example, I'm comfortable calling it a falsehood.
Trying to guilt us into liking your Dunning-Krugerands by implying we are somehow unsympathetic to the plight of the poor is not very nice. Please stop doing that.
People with very little money are not going to put it into "some phone app", as they will see it.
I've heard this idea that cryptocurrency is going to help people in poor countries for almost ten years. At this point, absent even one concrete example, I'm comfortable calling it a falsehood.
Trying to guilt us into liking your Dunning-Krugerands by implying we are somehow unsympathetic to the plight of the poor is not very nice. Please stop doing that.
> Crypto-assets like Bitcoin have real cultural and structural advantages that make them powerful assets worth holding and using.
Not for me. Why would an asset, which I can lose, have no direct control over it or even better, whose storage places are hacked on a weekly basis, earn my trust? And no, I am not even starting about the energy waste most crypto-assets are.
Not for me. Why would an asset, which I can lose, have no direct control over it or even better, whose storage places are hacked on a weekly basis, earn my trust? And no, I am not even starting about the energy waste most crypto-assets are.
You don't like it because it's possible to lose? Are all of your other physical possessions immune from being lost?
There's a reason people keep their financial assets in a bank or other such institution, rather than cash under the mattress.
IF they live in a place where this is perceived as safe.
How many Canadians are now rethinking that decision after the government banned people from using their own money if they supported a cause the rulers found objectionable? It's not everyone, certainly, but it's also not no one.
Banks are safe until they aren't. If you're lucky enough to live somewhere they are, for now, great! Enjoy that while it lasts.
But recognize that it isn't true everywhere, and it isn't necessarily true always even where it's true presently. Just because it's a reasonable thing for you to do right now, that doesn't make it a reasonable thing for all or even most people to do now, much less indefinitely.
How many Canadians are now rethinking that decision after the government banned people from using their own money if they supported a cause the rulers found objectionable? It's not everyone, certainly, but it's also not no one.
Banks are safe until they aren't. If you're lucky enough to live somewhere they are, for now, great! Enjoy that while it lasts.
But recognize that it isn't true everywhere, and it isn't necessarily true always even where it's true presently. Just because it's a reasonable thing for you to do right now, that doesn't make it a reasonable thing for all or even most people to do now, much less indefinitely.
In which case: do you think it's impossible for a bank to vault Bitcoin with the same level of security as traditional money?
Bitcoin is not a physical possession.
My money right now is (mostly) not a physical possession either. It exists as a non-blockchain ledger entry in bank's computer system, and cannot be lost as easily as crypto currency, even if I make a mistake like forgetting my password.
My money right now is (mostly) not a physical possession either. It exists as a non-blockchain ledger entry in bank's computer system, and cannot be lost as easily as crypto currency, even if I make a mistake like forgetting my password.
Dont worry it will be slowly lost to inflation anyway without you doing anything about it
Which is why people are encouraged not to keep their wealth in money. We can get bogged down in endless discussions about the theory of money, but my view is that money is not meant to be an appreciating asset. It is meant to be an easily fungible currency that discourages hoarding so that it's always put to work.
"Dont" [sic] worry, it's invested, not stagnant.
You have the luxury of living in a high-trust society with a stable banking system. Even if you assume that current stable banking systems will remain that way in perpetuity, half the world's population does not live under these conditions. Their risk calculations will be different from yours. That alone is enough to sustain the value of cryptocurrencies.
Yes, I do. I was addressing the issue of losing physical possessions though, not the sociological aspects of how bitcoin might theoretically scale to solve the monetary problems of half the world.
Bitcoin, just like traditional money, can exist as a non-blockchain ledger entry in bank's computer system. This is how most exchanges and custodial wallets work.
The difference is, you can also self-custody your Bitcoin. Obviously what's in your custody is just a private key; but for all intents and purposes that is self-custody. You are the sole person in control of those coins.
So Bitcoin gives you the choice of how you want to store it. Traditional money does not give you that choice. At a certain point there are physical and practical limits to how much cash you can self-custody (not to mention transport or transfer from one place or person to another).
The difference is, you can also self-custody your Bitcoin. Obviously what's in your custody is just a private key; but for all intents and purposes that is self-custody. You are the sole person in control of those coins.
So Bitcoin gives you the choice of how you want to store it. Traditional money does not give you that choice. At a certain point there are physical and practical limits to how much cash you can self-custody (not to mention transport or transfer from one place or person to another).
Self storage of non crypto assets beyond a certain threshold often end up taking the form of other assets like real estate. Purely from a net worth standpoint it's usually not optimal to have cash (physical or banked) on hand above a certain point.
But I take your meaning and it's a valid point: crypto self storage scales better than traditional cash. If scaling of that sort was an issue for me and self-storage a critical feature I wanted then crypto would fill the need. For the moment I'd still avoid using it for that purpose: I don't consider any coin truly stable at the moment, and if a new one came along tomorrow that appeared to have a rock solid foundation then I'd still want to see a few years of history before trusting it's stability. USDC might come close, but can you have self-custody of it, or trade it outside of the Coinbase ecosystem?
But I take your meaning and it's a valid point: crypto self storage scales better than traditional cash. If scaling of that sort was an issue for me and self-storage a critical feature I wanted then crypto would fill the need. For the moment I'd still avoid using it for that purpose: I don't consider any coin truly stable at the moment, and if a new one came along tomorrow that appeared to have a rock solid foundation then I'd still want to see a few years of history before trusting it's stability. USDC might come close, but can you have self-custody of it, or trade it outside of the Coinbase ecosystem?
You can certainly self-custody USDC -- but unlike Bitcoin, even if you self-custody you still have to trust that the USD backing the coin actually exists somewhere.
Some degree of ETH-maximalism will be required in the future given the sheer number of pretender L-1 blockchains snapping at ETH's heels. Writing about BTC-maximalism sets the foundation for that culture.