Bitcoin is more like ham radio than the early internet(jpkoning.blogspot.com)
jpkoning.blogspot.com
Bitcoin is more like ham radio than the early internet
http://jpkoning.blogspot.com/2020/07/bitcoin-is-more-like-ham-radio-than.html
309 comments
You know what's definitely going to be valuable in a post collapse world where people are making heavy use of bug-out bunkers stashed with food and guns? A digital currency that requires a sophisticated global computer network to function.
Ya. That makes a lot of sense.
Ya. That makes a lot of sense.
In Argentinian or Russian style currency defaults the computer networks continued to function. We are talking about the dollar no longer being the world reserve currency here, not a total societal collapse. It will happen when a more attractive alternative is found by the global markets.
Currently the excess dollars created are absorbed by the foreign economies. This keeps the US from inflation caused by this creation. For example, Brazil has to buy dollars with its goods to then use them for purchases of IT equipment from China. At some point Brazil and China will find a direct medium of exchange.
Here is what Ray Dalio has to say: https://youtu.be/7WxfQ2zKXeA?t=1076
Currently the excess dollars created are absorbed by the foreign economies. This keeps the US from inflation caused by this creation. For example, Brazil has to buy dollars with its goods to then use them for purchases of IT equipment from China. At some point Brazil and China will find a direct medium of exchange.
Here is what Ray Dalio has to say: https://youtu.be/7WxfQ2zKXeA?t=1076
This idea has been going on for literally decades, with no real progress. Iran started allowing Euro trades for oil (keep in mind the EU imports way way more oil than the US) in 2003. Result = everyone still trades oil in dollars.
The first effect maybe that the increasing dollar creation rate needed to sustain the functioning of American economy may exceed the ability of foreign countries to absorb them.
This is just more of the usual "The Fed has really done it this time and here comes it's inevitable collapse".
There will likely be inflation but it's considered better than the alternative right now which is stagflation.
There will likely be inflation but it's considered better than the alternative right now which is stagflation.
The space between "The dollar is no longer the world's reserve currency" and "total societal collapse" is very narrow, given how many countries rely on the dollar to back-stop their own currencies.
I think there's a decent risk that in the interim, people run out of money to pay for telecommunications links and BTC-farming datacenters.
I think there's a decent risk that in the interim, people run out of money to pay for telecommunications links and BTC-farming datacenters.
A more charitable approach would be to consider that bitcoin and "bug out bags" can be things you have for separate or related contingencies.
We live in wonderfully complex societies and history shows us there are a lot of failure modes well short of apocalypse.
To be clear I'm not a "bug out bag" kind of person but I do believe that some disaster preparation is useful. I also believe that there's a modest chance of serious financial turmoil in the medium to long term future.
Bitcoin is likely to hold some value in the event of a localised financial collapse.
We live in wonderfully complex societies and history shows us there are a lot of failure modes well short of apocalypse.
To be clear I'm not a "bug out bag" kind of person but I do believe that some disaster preparation is useful. I also believe that there's a modest chance of serious financial turmoil in the medium to long term future.
Bitcoin is likely to hold some value in the event of a localised financial collapse.
What’s the advantage of bitcoin against holding a diversified bundle of global equities or foreign currency in the event of a localised financial collapse?
Bitcoin can be sent and received anywhere in the world needing no than a raspi's worth of computing power.
Not many banking hoops to jump through, sanctions aren't at play, very difficult / impossible for a non-superpower country to exert control.
Greece and Venezuela are both recent examples of countries where people who owned Bitcoin faired substantially better than their peers who did not.
Not many banking hoops to jump through, sanctions aren't at play, very difficult / impossible for a non-superpower country to exert control.
Greece and Venezuela are both recent examples of countries where people who owned Bitcoin faired substantially better than their peers who did not.
Did people in Greece and Venezuela fair substantially better than peers that had holdings of multiple foreign currencies?
Yes, easily, though the crisis in Greece started about the same time Bitcoin was created and lasted a few years after that.
The capital appreciation on this basket of global currencies has not moved an inch, interest rates worldwide are even lower today.
Meanwhile BTC has averaged 250% gains annually.
The capital appreciation on this basket of global currencies has not moved an inch, interest rates worldwide are even lower today.
Meanwhile BTC has averaged 250% gains annually.
Not necessarily anything, but collapse of the dollar would have systemic impact, it wouldn't localised. And I suppose there is always some counter party risk with bank accounts or brokerage accounts, unless you hold the gold - or private keys
Why would bitcoin be spared this systemic impact?
I am trying to imagine how you can fit bitcoin in a bugout bag.
My (poorly worded) point is that without the internet, bitcoins in your bag don't have any immediate value.
One can expect the internet to eventually come back, maybe even in form of ham radio (in a post-apocalyptic world there would not be FCC to enforce ban on encryption).
Of course, in a post-apocalyptic world there would also not be an FCC to enforce bans on signal jamming...
The bitcoin protocol isn't encrypted. You can use the protocol over Ham radio as it is now.
The world reserve currency can collapse without all of society collapsing to the extent you are suggesting.
One of the things that makes Bitcoin so interesting is that you don't actually need that much sophistication to keep it going. In theory you should be able to run all of Bitcoin on a bunch of raspi's connected to HAM radio towers. As long as you can get blocks around the world, those raspi's should be enough to keep it running.
> In theory you should be able to run all of Bitcoin on a bunch of raspi's
If suddenly the computing power available in the world was reduced to a bunch of raspi's, the Bitcoin network would be dead because it would take an inordinately long amount of time to reach the next difficulty adjustment. Only a hard fork could survive.
If suddenly the computing power available in the world was reduced to a bunch of raspi's, the Bitcoin network would be dead because it would take an inordinately long amount of time to reach the next difficulty adjustment. Only a hard fork could survive.
There's a few pretty far along mesh network projects that are designed to keep internet/crypto functional over portable radio networks.
And you think the average non-technical person is going to trust that over... trading for actual goods like food/fuel/livestock? On what planet does the government-backed virtual currency fail and then non-technical people suddenly trust a darknet currency backed by... imaginary computer algorithms that they don't understand and don't want to understand?
Its not like all people understand the monetary system. If something works over some period people will build trust and use it
Some day every phone may have a bitcoin “wallet” that connects to nearby towers using the phones antennas. Everything will “just work” as far as regular users are concerned. You would be able to pay for good just by scanning a QR code on the other party’s phone, for example.
I would imagine that that the point is less the practicalities of how it would than exist rather that commodities will become (as they always have done) the mechanism of trade. Before there was money there was just normal trade. In apocalypse land who are you going to let into your group of survivors, the guy with 10,000 bitcoin on a usb stick or the guy with 10ton of rice?
The neat thing about 10,000 bitcoins is that it can exist in your pocket.
> A digital currency that requires a sophisticated global computer network to function.
That's stretching it a bit. While Bitcoin looks sophisticated to the average Joe, it is actually a very simple protocol and require very little bandwidth. It's possible to run mining operations from all over the world on very limited connection (in fact you might need to connect only a few times per day). Processing transactions also consume very little bandwidth.
The crypto-folks have come up with something for you: https://blockstream.com/satellite/
So now even if your local infrastructure burned, you can still transact in bitcoin. Granted, there should be some guys somewhere doing the mining to ensure that the network is secure enough.
That's stretching it a bit. While Bitcoin looks sophisticated to the average Joe, it is actually a very simple protocol and require very little bandwidth. It's possible to run mining operations from all over the world on very limited connection (in fact you might need to connect only a few times per day). Processing transactions also consume very little bandwidth.
The crypto-folks have come up with something for you: https://blockstream.com/satellite/
So now even if your local infrastructure burned, you can still transact in bitcoin. Granted, there should be some guys somewhere doing the mining to ensure that the network is secure enough.
They're not saying that bitcoin is sophisticated (it's not), but the entire backbone of the internet is.
In some post-apocalyptic dystopia, people aren't going to be using their phones and laptops to make payments with bitcoin, they're going to use whatever is backed by the local authority.
In some post-apocalyptic dystopia, people aren't going to be using their phones and laptops to make payments with bitcoin, they're going to use whatever is backed by the local authority.
Mesh networks over HAM radio, to tie it back to the article. ;-)
That requires electricity, which is spotty in a dystopia. Best to stick to encrypted smoke signals.
Ham radio fixes Bitcoin
Venezuela/Brazil/North-Africa disagrees with this.
Over half the transactions in Venezuela are in US Dollar cash now, not Bolivar or Bitcoin. That's not an example of a dystopia switching to Bitcoin.
Do you think those satellites stay in their proper orbit without any intervention? Do you suppose they will not need to be replace? Starlinks, for instance, will have a life span of 5 years. Further, do you suppose people will expend precious energy powering mining rigs rather than cooking food and lighting their mud huts?
I am struggling to imagine a bitcoin mining operation going anywhere without connecting at least once per minute, lest its tiny share of global hashpower is entirely wasted on futile progress on outdated side chains.
You can passively listen to new blocks via satellite or ham radio. You only ever need to connect actively to broadcast your own blocks.
Without global connectivity providing the opportunity to cross-check a sampling of independent nodes' ideas of the latest blocks, this sounds like a loser's game. Either you need a million independent satellites and HAM stations in range, or you are just begging to be spoon-fed malicious and/or outdated blockchain data. No way any mining operation can be competitive in such an environment.
Bartering would be far simpler, given the certainty that if the US financial system collapses, the impact on the effective price of bitcoin would make it unusable for practical matters.
I think that most hardcore Bitcoin aficionados (the group that's still in it, even now that the bubble has burst and you can't get rich off of it)
Um… you do know Bitcoin is up 75% since mid-March, right? You certainly could haven gotten rich from that [1].
There doesn't have to be catastrophic collapse… the US government is doing devaluing the dollar all on its own. The dollar has lost 40% of its value since 1985 and 80% since 1970 [2].
And now with COVID-19, we’re printing trillions of dollars to keep the country and the global economy afloat. The pandemic is out of control in large chunk of the US; we're hitting new daily infection rates nearly everyday.
If you look at the big picture, we're experiencing a slow-motion economic collapse. The Fed and the other central banks are trying to land this 747 without crashing while the plane is on fire and and the equipment ain't working so good.
Meanwhile, the only asset that can't be manipulated or inflated is Bitcoin and that's going to be looking pretty good once we land… remember, any landing you can walk away from is a good one.
[1]: https://www.bloomberg.com/news/articles/2020-06-12/jpmorgan-...
[2]: https://seekingalpha.com/article/137051-the-dollars-20th-cen...
Um… you do know Bitcoin is up 75% since mid-March, right? You certainly could haven gotten rich from that [1].
There doesn't have to be catastrophic collapse… the US government is doing devaluing the dollar all on its own. The dollar has lost 40% of its value since 1985 and 80% since 1970 [2].
And now with COVID-19, we’re printing trillions of dollars to keep the country and the global economy afloat. The pandemic is out of control in large chunk of the US; we're hitting new daily infection rates nearly everyday.
If you look at the big picture, we're experiencing a slow-motion economic collapse. The Fed and the other central banks are trying to land this 747 without crashing while the plane is on fire and and the equipment ain't working so good.
Meanwhile, the only asset that can't be manipulated or inflated is Bitcoin and that's going to be looking pretty good once we land… remember, any landing you can walk away from is a good one.
[1]: https://www.bloomberg.com/news/articles/2020-06-12/jpmorgan-...
[2]: https://seekingalpha.com/article/137051-the-dollars-20th-cen...
,,If Bitcoin becomes successful, something seriously bad has happened to the monetary system.''
I'm a hardcore Bitcoin believer, and I believe something similar, although not exactly the same:
Something seriously bad happened to the monetary system (in 1971), therefore I believe Bitcoin will become successful (in the next 10-20 years).
I'm a hardcore Bitcoin believer, and I believe something similar, although not exactly the same:
Something seriously bad happened to the monetary system (in 1971), therefore I believe Bitcoin will become successful (in the next 10-20 years).
As a bitcoin believer, what do you think about Tether, and the reports that the run-up of Bitcoin and other cryptocurrencies in 2017 was essentially due to price manipulation via the injection of billions of dollars worth of faked value into the system?
Tether is probably not backed 1:1, but at the same time I believe it is closer to 1:1 than it is to 0:1 just because the entity that runs it is literally a money-printing machine (Bitfinex is extraordinarily profitable) and there is evidence for some large quantity of people using Tether (they had 500m seized no?)
End of the day imo crypto is still a small fish when we look at the absolute numbers comparative to stocks. Manipulation is expected to a certain degree but I still lean towards a positive correlation in perceived value and price. Also I believe it is treated the same as every other market, fake it until you make it or implode.
I mean I view it very much like Tesla in that in only gets is value from the "possible end state", but the reality is that BTC doesn't need much capital in the schema of the financial world to multiple even at current levels.
End of the day imo crypto is still a small fish when we look at the absolute numbers comparative to stocks. Manipulation is expected to a certain degree but I still lean towards a positive correlation in perceived value and price. Also I believe it is treated the same as every other market, fake it until you make it or implode.
I mean I view it very much like Tesla in that in only gets is value from the "possible end state", but the reality is that BTC doesn't need much capital in the schema of the financial world to multiple even at current levels.
The best explanation for the timings of the bubbles that I know of is the stock to flow model by PlanB (which suggests that the next one is coming soon, as Bitcoin is getting almost as valuable as gold, and in 5 years more valuable as a scarce store of value).
Regarding Tether I think the amount of Tether is really manipulated (and not 100% backed by real USD), but that Bitcoin's 2017 bubble has nothing to do with that. To me it was similar to previous bubbles that I experienced, with similar rollercoaster feelings (though I was much calmer and was much more used to it).
Regarding Tether I think the amount of Tether is really manipulated (and not 100% backed by real USD), but that Bitcoin's 2017 bubble has nothing to do with that. To me it was similar to previous bubbles that I experienced, with similar rollercoaster feelings (though I was much calmer and was much more used to it).
Not OP, but I would say:
(1) Tether is largely orthogonal to bitcoin. It's a way to trade USD more quickly over the internet, which isn't really related to bitcoin, besides the underlying technology is similar.
(2) I don't know much about the 2017 run-up in terms of price manipulation. I think Ethereum was more impacted than bitcoin, but of course both experienced price surges and crashes. Is there any public info available on this?
(1) Tether is largely orthogonal to bitcoin. It's a way to trade USD more quickly over the internet, which isn't really related to bitcoin, besides the underlying technology is similar.
(2) I don't know much about the 2017 run-up in terms of price manipulation. I think Ethereum was more impacted than bitcoin, but of course both experienced price surges and crashes. Is there any public info available on this?
Tether is largely used to run pump scams on BTC. It's other uses are marginal at best.
It is common for Coiners to remain willfully ignorant about the price manipulation, because y'all don't want to admit how small, fragile, and wildly corrupt your ecosystem is.
It is common for Coiners to remain willfully ignorant about the price manipulation, because y'all don't want to admit how small, fragile, and wildly corrupt your ecosystem is.
I'm just not clear on how Tether usage specifically increases the bitcoin price. My understanding is it's used to transfer money between exchanges, and possibly to fund ICO's. Neither of those really lead to an increased bitcoin price.
It goes something like this:
1. Tether was announced as a "USD equivalent" - i.e. 1 tether == 1 USD which would be deposited somewhere in a bank accouont
2. Billions of dollars worth of tether were created with no USD backing, injecting fake value into the system
3 These tethers were used to buy BTC, thereby giving an artificial value to BTC since it was assumed thes BTC/Tether transactions could be treated as BTC/USD transactions.
Essentially a lot of fake demand was created for BTC, thereby inflating the price massively, and luring retail investors to spend real money for BTC since they saw it as a rapidly appreciating asset.
1. Tether was announced as a "USD equivalent" - i.e. 1 tether == 1 USD which would be deposited somewhere in a bank accouont
2. Billions of dollars worth of tether were created with no USD backing, injecting fake value into the system
3 These tethers were used to buy BTC, thereby giving an artificial value to BTC since it was assumed thes BTC/Tether transactions could be treated as BTC/USD transactions.
Essentially a lot of fake demand was created for BTC, thereby inflating the price massively, and luring retail investors to spend real money for BTC since they saw it as a rapidly appreciating asset.
That makes sense, but is there evidence this is actually happening?
I think for this chain of logic to be true, there would have to be cases of people attempting to convert Tether into USD, and failing. That did happen with Mt Gox, so it’s certainly possible.
I think for this chain of logic to be true, there would have to be cases of people attempting to convert Tether into USD, and failing. That did happen with Mt Gox, so it’s certainly possible.
There is a credible study[0] on the subject.
But your condition does not have to hold for this manipulation to work. Assuming Bitfinex made billions of real dollars in this scheme, they could easily cover the liquidity of cashing out anyone who wants to exchange Tether for USD.
[0]: https://www.wsj.com/articles/large-bitcoin-player-manipulate...
But your condition does not have to hold for this manipulation to work. Assuming Bitfinex made billions of real dollars in this scheme, they could easily cover the liquidity of cashing out anyone who wants to exchange Tether for USD.
[0]: https://www.wsj.com/articles/large-bitcoin-player-manipulate...
Interesting. If the study is indeed correct, and half the previous run-up to ~$20k was due to Tether, then the market has since correct as the price is a little below half that value. Of course there have been a lot of ups/downs since then, with bitcoin hitting as low as $5k recently.
I mean, the fact that the price of this asset has been heavily manipulated in the past and the price has since come down a bit would not be evidence that there is not still manipulation happening, or that the price has reached it's "fair market value"
Except there was no faked value injected anywhere, all tethers are 100% backed by USD in the bank. The reports are fake news. If it were not so, the freely traded tether/USD value would be below 1, but it isn't, it's traded at exactly 1.
skohan(1)
"That statement is absolutely true, as a conditional. But the logical fallacy it represents is "If X happens, that would be unthinkably bad. Therefore, X will not happen." (Similar thinking is behind coronavirus-denial and climate-change denial.)"
This is called "Appeal to Consequences"
"Appeal to consequences, also known as argumentum ad consequentiam (Latin for "argument to the consequence"), is an argument that concludes a hypothesis (typically a belief) to be either true or false based on whether the premise leads to desirable or undesirable consequences."
https://en.wikipedia.org/wiki/Appeal_to_consequences
This is called "Appeal to Consequences"
"Appeal to consequences, also known as argumentum ad consequentiam (Latin for "argument to the consequence"), is an argument that concludes a hypothesis (typically a belief) to be either true or false based on whether the premise leads to desirable or undesirable consequences."
https://en.wikipedia.org/wiki/Appeal_to_consequences
I agree with you, but I don't think the author made a "therefore, X will not happen" claim, at least not a strong one.
The ham radio analogy is quite good, up to a point. Bitcoin as an alternative, backup technology kept alive by enthusiasts. When disaster strikes, bitcoin will be there. It has a good sized market cap. There are some services. It could be used to pay for things or get your salary, it just isn't today because regular money. No need for ham radio while cellphones work, unless you're an enthusiast with your own reasons.
I also think he has a point about narrative. Ham radio is ready to step up when disaster strikes. Bitcoin is ready to cash in. Make what you will of this normatively, but there's truth in the comparison.
Where the analogy breaks down (and where I agree with you) is what happens next. Monetary systems have a history of collapsing, and then being constituted under new rules. Progress, such as it is, proceeds from one disaster to the next. Whether that's currency pegs, gold standard, whatever. Change happens in the wake of failure. If Bitcoin can be such a change, it will need an appropriate disaster.
I do think it's worth examining narratives. Bitcoin has carried a heavy payload of narrative since day one. One such narrative was an organic, "disruption" trajectory. Bitcoin would gradually be adopted for transactions and build up. Maybe online shopping. Maybe remittances. There was much discussion of the roles of money: denomination, value transfer, etc. Bitcoin had a disintermediation narrative, potentially replacing CCs, retail banks and demonopolizing the space. Are these narratives still relevant?
In retrospect, bitcoin's first decade narrative is "speculation." That's what drove interest, market cap, enthusiasm & price. Most users don't need a bitcoin wallet, they just their bank to make it an investable asset like an etfs.
Other than making bitcoin owner rich, what does bitcoin want, these days?
The ham radio analogy is quite good, up to a point. Bitcoin as an alternative, backup technology kept alive by enthusiasts. When disaster strikes, bitcoin will be there. It has a good sized market cap. There are some services. It could be used to pay for things or get your salary, it just isn't today because regular money. No need for ham radio while cellphones work, unless you're an enthusiast with your own reasons.
I also think he has a point about narrative. Ham radio is ready to step up when disaster strikes. Bitcoin is ready to cash in. Make what you will of this normatively, but there's truth in the comparison.
Where the analogy breaks down (and where I agree with you) is what happens next. Monetary systems have a history of collapsing, and then being constituted under new rules. Progress, such as it is, proceeds from one disaster to the next. Whether that's currency pegs, gold standard, whatever. Change happens in the wake of failure. If Bitcoin can be such a change, it will need an appropriate disaster.
I do think it's worth examining narratives. Bitcoin has carried a heavy payload of narrative since day one. One such narrative was an organic, "disruption" trajectory. Bitcoin would gradually be adopted for transactions and build up. Maybe online shopping. Maybe remittances. There was much discussion of the roles of money: denomination, value transfer, etc. Bitcoin had a disintermediation narrative, potentially replacing CCs, retail banks and demonopolizing the space. Are these narratives still relevant?
In retrospect, bitcoin's first decade narrative is "speculation." That's what drove interest, market cap, enthusiasm & price. Most users don't need a bitcoin wallet, they just their bank to make it an investable asset like an etfs.
Other than making bitcoin owner rich, what does bitcoin want, these days?
Short answer: lots of people wanted Bitcoin to be decentralized PayPal… but those people lost.
Bitcoin is a store of value; it's base money. It's the rainy day stash for when things go to shit. Not necessary a global economic collapse but bad nonetheless.
Here's a rational prodcast description of the store of money vs. payment rails: https://stephanlivera.com/episode/185/
Bitcoin is a store of value; it's base money. It's the rainy day stash for when things go to shit. Not necessary a global economic collapse but bad nonetheless.
Here's a rational prodcast description of the store of money vs. payment rails: https://stephanlivera.com/episode/185/
>The difference is that most hardcore Bitcoin investors also accept the premise that something seriously bad is going to happen to the monetary system.
If something seriously bad happens to the monetary system what on earth makes you think bitcoin will even be a thing? If civilization collapses, who is going to keep the electricity flowing? What on earth makes you think anarchists won't attack that first? Without electricity, what use is bitcoin?
If something seriously bad happens to the monetary system what on earth makes you think bitcoin will even be a thing? If civilization collapses, who is going to keep the electricity flowing? What on earth makes you think anarchists won't attack that first? Without electricity, what use is bitcoin?
There is a way for people who have imagination like you to get rich in the current world though - turn this into a Netflix movie or series :)
I'm not a crypto aficionado, but BTC is back to 10k USD which isn't that much worse then individual stocks going thru hard times (albeit very volatile against broad stock indexes). The balloon has deflated but it's far from being to the ground (albeit it did achieve scary lows for bagholders, which could be said of many riskier assets and stocks).
I experienced hyperinflation and the government did not collapse nor did the population become anarchist, just poorer.
You said: "can't get rich on it anymore" All of Bitcoins bubble bursts have been great opportunities. So far Bitcoin has been up 2,000,000x from $0.01. Yet it's dripped 94.29%, 93.7%, 80.91%, 86.08%, 84.07% and 71.51% in 10 years.
It's up 75% since mid-March of 2020; you certainly could get rich from that.
It's generally easy to find two time points for a volatile asset with a wide price disparity. You could also get rich playing roulette, but to do so reliably would require some mechanism for predicting future values.
What's the minimum number of bitcoin nodes needed for it to continue operating and is it reasonable to think that post collapse that many PCs will remain online?
Seems unlikely to me.
Seems unlikely to me.
Minimum? 1.
That is, however, not the problem. The problem is that in the event of sudden loss of significant fraction of compute power block times skyrocket, because significantly reduced compute power still has to solve problem of previous difficulty. As a consequence block times become so high that transactions are effectively blocked and the only solution to keep the network functional is a fork. Unless you imagine a scenario where everyone goes offline except for a small group and everyone slowly reconnects to the small group, most likely there would be highly partitioned network with its own bitcoin fork with enough of transaction history that a reconnect would mean collapse of local-economy.
That is, however, not the problem. The problem is that in the event of sudden loss of significant fraction of compute power block times skyrocket, because significantly reduced compute power still has to solve problem of previous difficulty. As a consequence block times become so high that transactions are effectively blocked and the only solution to keep the network functional is a fork. Unless you imagine a scenario where everyone goes offline except for a small group and everyone slowly reconnects to the small group, most likely there would be highly partitioned network with its own bitcoin fork with enough of transaction history that a reconnect would mean collapse of local-economy.
The difficulty will adjust for the reduced compute power
1. Block times adjust, but there is an upper limit to adjustment per block. Low-pass filter, sort of.
2. In the event of compute power loss, prior to adjustment you still have to mine blocks of previous difficulty.
3. In the event of compute power loss, block times increase and there is no other solution than to wait it out or fork.
4. In the event of sudden and significant compute power loss block times increase to such a level that running the network under previous difficulty and waiting it out becomes impractical, therefore the only practical solution is a fork.
AFAIK it adjusts after a fixed number of blocks have been mined. So if 99.999% of your compute power is gone, you won't be mining enough blocks to adjust the difficulty for a very long time.
The adjustment happens every 2 weeks. It's unlikely that miners would go offline simultaneously across the globe to the extent that it would completely grind the network to a halt.
No, the adjustment happens every 2016 blocks. If you lose 99.99% of global hash rate, those 2016 blocks will take a million years, instead of two weeks, to compute.
Good point, I had taken the mechanism for granted.
So the scenario is that miners drop off at a pace where you don't reach the next adjustment?
Taking that into account, the "mining death spiral" theory doesn't seem too far fetched? In bad circumstances, if the network drops a substantial amount of hash rate early in the adjustment, and price took a hit, you could see some major disruption from the miners following suit.
So the scenario is that miners drop off at a pace where you don't reach the next adjustment?
Taking that into account, the "mining death spiral" theory doesn't seem too far fetched? In bad circumstances, if the network drops a substantial amount of hash rate early in the adjustment, and price took a hit, you could see some major disruption from the miners following suit.
It will take about 400 years to adjust difficulty in such case, but not a million years.
Like Unbreakablecoin lmao
> The adjustment happens every 2 weeks.
...assuming very slow change in hash rate, yes. A rapid increase makes it happen sooner, a rapid loss can stretch it out.
...assuming very slow change in hash rate, yes. A rapid increase makes it happen sooner, a rapid loss can stretch it out.
2 powered raspberry pis and a moderately functioning internet is the answer.
The network adjusts it's requirement for power based on the total power thrown at it. This is called "difficulty adjustment". Beyond total world collapse that would set society back a century, I cannot imagine a scenario where you couldn't continue running Bitcoin as long as a few people had the motivation.
The network adjusts it's requirement for power based on the total power thrown at it. This is called "difficulty adjustment". Beyond total world collapse that would set society back a century, I cannot imagine a scenario where you couldn't continue running Bitcoin as long as a few people had the motivation.
If they had the motivation, yes. However, why would the have the motivation instead of simply using well-known limited physical currencies, such as cigarettes, gold etc? Especially since you'd need to make the money using power and if power is sparse, you'd probably need the bit you get for refrigeration or cooking.
Solar flare?
If the hypothetical crisis divides up the Internet so, for example, U.S. users only can connect to U.S. nodes, and connect to U.S. miners -- and the same is true for Iceland and China and South Africa etc., it would become extremely perilous to trade value for the currency anywhere in the world, right? Because the geographically-separate chains cannot synchronize in any reasonable way.
A breakdown of the Internet by geography is definitely a crisis that should be on radar screens, and it wouldn't require anything like a total societal breakdown.
Then HAM TOR and whatever else would become essential to keep the network stable.
A breakdown of the Internet by geography is definitely a crisis that should be on radar screens, and it wouldn't require anything like a total societal breakdown.
Then HAM TOR and whatever else would become essential to keep the network stable.
If the hypothetical crisis divides up the Internet so, for example, U.S. users only can connect to U.S. nodes, and connect to U.S. miners
You know that's not how TCP/IP works, right? It originally was a defense department research project that had the requirement of surviving a nuclear attack. Unless every undersea cable is severed and every satellite up-link destroyed, the internet will continue to operate in the event something bad happens.
I live in New England; I'm closer to Iceland than I am to California for network purposes.
Every full node has copy of the entire blockchain going back to the genesis block created on January 3, 2009. The blockchain may fork, but the longest chain wins and the majority of the mining power will pick that and bitcoin keeps on going. Full nodes will continue to verify those blocks.
Nearly all miners are in data centers with redundant power and networking, so many of them will stay online. Many of them are using hydroelectricity, so unless rivers stop flowing, most of them should be good to go.
Bitcoin already has a peer-to-peer exchange running on Tor; folks will still be able to exchange Bitcoin for fiat, to the extent that remains useful [1]. I’d imagine the software would be modified to support things other than fiat that would be useful to exchange. With a link-local IPv6 "subnet", you could have thousands of machines on a make-shift mesh network and all you'd need is an uplink to the internet to transact.
[1]: https://bisq.network/
You know that's not how TCP/IP works, right? It originally was a defense department research project that had the requirement of surviving a nuclear attack. Unless every undersea cable is severed and every satellite up-link destroyed, the internet will continue to operate in the event something bad happens.
I live in New England; I'm closer to Iceland than I am to California for network purposes.
Every full node has copy of the entire blockchain going back to the genesis block created on January 3, 2009. The blockchain may fork, but the longest chain wins and the majority of the mining power will pick that and bitcoin keeps on going. Full nodes will continue to verify those blocks.
Nearly all miners are in data centers with redundant power and networking, so many of them will stay online. Many of them are using hydroelectricity, so unless rivers stop flowing, most of them should be good to go.
Bitcoin already has a peer-to-peer exchange running on Tor; folks will still be able to exchange Bitcoin for fiat, to the extent that remains useful [1]. I’d imagine the software would be modified to support things other than fiat that would be useful to exchange. With a link-local IPv6 "subnet", you could have thousands of machines on a make-shift mesh network and all you'd need is an uplink to the internet to transact.
[1]: https://bisq.network/
> "If X happens, that would be unthinkably bad. Therefore, X will not happen."
or "If X happens, that would be unthinkably bad. Therefore planning for X is futile."
or "If X happens, that would be unthinkably bad. Therefore planning for X is futile."
Could the bitcoin network actually be used by everone in the world in five years? No. At seven transactions per second, and 157,680,000 seconds, the network doesn't have enough capacity in a five year period for every person in north america and europe to do one transaction.
No. At seven transactions per second, and 157,680,000 seconds, the network doesn't have enough capacity in a five year period for every person in north america and europe to do one transaction.
There's plenty of capacity to transact via the Lightning Network—over 13,000 nodes and 37,000 channels: https://1ml.com/statistics
There's plenty of capacity to transact via the Lightning Network—over 13,000 nodes and 37,000 channels: https://1ml.com/statistics
I agree on the fallacy, but arguably that also aligns with some of the HAM radio community?
Maybe this stereotype isn't true, but I thought at least a part of the HAM radio community was preparing for the collapse of civilization/communication networks.
Maybe this stereotype isn't true, but I thought at least a part of the HAM radio community was preparing for the collapse of civilization/communication networks.
I think it does apply to much of the HAM radio community. Probably not all though.
Also, their preparedness actually has paid off in past natural disasters - 9/11, Hurricane Katrina, the Andaman Islands tsunami, and Hurricane Maria in Puerto Rico all had robust HAM radio community responses.
Also, their preparedness actually has paid off in past natural disasters - 9/11, Hurricane Katrina, the Andaman Islands tsunami, and Hurricane Maria in Puerto Rico all had robust HAM radio community responses.
But ham radio is independent of infrastructure, in a way that internet technologies are not.
For HF radio over large distances (hundreds of kms at least), all you need is for the physical properties of the ionosphere to remain constant, and a smallish amount of electrical power.
For HF radio over large distances (hundreds of kms at least), all you need is for the physical properties of the ionosphere to remain constant, and a smallish amount of electrical power.
The preparedness of "I'll be able to help if that situation happens" is a very different kind of preparedness than "I'll be rich if that happens". There may be a few people that are interested in bitcoin for reasons that are similar to those found in HAM radio, but it's impossible to disentangle bitcoin from the associated greed.
There are a lot of fallacies in this thread, that I could not address even if I wanted to expend the time, as most HN users are convinced of their belief the equates Bitcoin, and perhaps all of Cryptocurrency, to some nefarious end that challenges their way of Life. All while undermining that some of the prominent people in this Space are Jack Dorsey and the Winklevoss twins, not to mention some other well known VCs.
To that end, I think this is worth challenging:
> I think that most hardcore Bitcoin aficionados (the group that's still in it, even now that the bubble has burst and you can't get rich off of it) would accept the above premise. If Bitcoin becomes successful, something seriously bad has happened to the monetary system.
I'm that 'aficionado' and I disagree with this premise: I do, however, think something has gone terribly wrong with the monetary system; not just in the US but in regards to all fiat currencies for a very long time. There was a time I was proponent of the PM backed State sanctioned systems back in my Mises book thumping days, but I've come to realize that it's just an archaic model and doesn't suit the 21st century model of how commerce is conducted at best, and that Fiat is a system with a disastrous inevitability at worst, which is the most common outcome as most fiat currencies have an average lifespan of 40 years when Nation-States are involved in managing a currency. The Internet has enabled a much larger collective of Humanity to come together than any other time in History, and while that may have some horrible implications (the cesspool that is Social media comes to mind) it also has a large Freedom enhancing component that most cannot actualize as they're limited in finding ways to obtain financial autonomy in doing so, which is why the Internet needs a Native currency irrespective of irrelevant things like Nationality, Gender or political identity.
With that said, I think you're undermining something very significant here, that is, the amount of transactions in global commerce that Square currently handles could all operate on the back-end on Bitcoin's LN for faster settlement, and require less security measures, like payment holdings for those customers deemed 'higher risk.' And this could be further increased as Jack [1] has made a commitment to reside in Africa to address this onboarding challenge.
This is a real usecase, that I personally have very intimate knowledge of as I did Fintech in the Industrial Hemp space and used Bitcoin to overcome the egregious financial censorship they faced before the Farm Bill made Hemp 50 State legal in the US.
Bank account seizures were the norm and having all your savings or operating capital taken from you because of a perceived threat can be entirely mitigated in a system that is fully audited by default, that is to say, you cannot incur the losses of a charge-back scam if/when you swipe your CC for a purchase you're on-boarded onto the LN and you're none the wiser of what just took place as you received your goods-services just as you would with any CC transaction made elsewhere. And this is just one of the benefits of using the LN to transact on, the others being instant settlement times, and near 0 tx fees, as opposed to Main-net costs and transactions settlement times (new block).
I think that is what is likely to happen with Square/CASH, as Jack has been one of the main investors in Lightening Labs. This alone disproves the notion that the World would have had to collapse to achieve the goal that goal--something that has admittedly kept me awake at night, and I have spoken to several developers and entrepreneurs about throughout my time in Bitcoin.
After nearly 9 years in this space, and that time has flown by, I think it's a Crypto Nerd's wet-dream/panacea to think that everyone wants to be their own Bank, or simply be unbanked because those that need it the most are almost entirely unfamiliar with the concept entirely, and they will some how decide to run their own nodes they run on a meshnet based protocol and are using a Blockstream satelite to verify and update the Blockchain with.
It's theoretically possible but entirely unrealistic because its far more time and effort than most people want to expend, and the reality is many would prefer to make MANY compromises to just have system that 'works' without worrying about the mechanics of it all and have the guesswork taken out and have a turn-key solution.
I equate to how people are almost entirely unaware of how an ICE works, or electricity running through the wires runs and powers all of the devices in their homes. It's up to entrepreneurs and engineers to not just create a superior product in this case a monetary system, which I would argue we have had for some time, but also to create an interface that ensures the least amount of friction to onboard the rest of the 'non-initiated,' and I argue we've been in this phase since about 2016 or so.
Bitcoin will have truly succeeded and fulfilled it's true potential for the masses when it's users are entirely unaware they are using it is my new benchmark for success, because for the initiated its already pretty damn seamless from where it was 8-9 years ago if you're already within it and that was just scratching the surface of what it's capable of doing within a very small, albeit determined demographic, which has had significant disruption all over the World already. I'm excited of the World(s) it could create (as Bitcoin remain one of the few viable options for a Multi-planetary monetary system) and is one of the main reasons why I remain optimistic despite all the calamity we see in the World.
1: https://www.cnn.com/2019/11/29/tech/jack-dorsey-africa-futur...
To that end, I think this is worth challenging:
> I think that most hardcore Bitcoin aficionados (the group that's still in it, even now that the bubble has burst and you can't get rich off of it) would accept the above premise. If Bitcoin becomes successful, something seriously bad has happened to the monetary system.
I'm that 'aficionado' and I disagree with this premise: I do, however, think something has gone terribly wrong with the monetary system; not just in the US but in regards to all fiat currencies for a very long time. There was a time I was proponent of the PM backed State sanctioned systems back in my Mises book thumping days, but I've come to realize that it's just an archaic model and doesn't suit the 21st century model of how commerce is conducted at best, and that Fiat is a system with a disastrous inevitability at worst, which is the most common outcome as most fiat currencies have an average lifespan of 40 years when Nation-States are involved in managing a currency. The Internet has enabled a much larger collective of Humanity to come together than any other time in History, and while that may have some horrible implications (the cesspool that is Social media comes to mind) it also has a large Freedom enhancing component that most cannot actualize as they're limited in finding ways to obtain financial autonomy in doing so, which is why the Internet needs a Native currency irrespective of irrelevant things like Nationality, Gender or political identity.
With that said, I think you're undermining something very significant here, that is, the amount of transactions in global commerce that Square currently handles could all operate on the back-end on Bitcoin's LN for faster settlement, and require less security measures, like payment holdings for those customers deemed 'higher risk.' And this could be further increased as Jack [1] has made a commitment to reside in Africa to address this onboarding challenge.
This is a real usecase, that I personally have very intimate knowledge of as I did Fintech in the Industrial Hemp space and used Bitcoin to overcome the egregious financial censorship they faced before the Farm Bill made Hemp 50 State legal in the US.
Bank account seizures were the norm and having all your savings or operating capital taken from you because of a perceived threat can be entirely mitigated in a system that is fully audited by default, that is to say, you cannot incur the losses of a charge-back scam if/when you swipe your CC for a purchase you're on-boarded onto the LN and you're none the wiser of what just took place as you received your goods-services just as you would with any CC transaction made elsewhere. And this is just one of the benefits of using the LN to transact on, the others being instant settlement times, and near 0 tx fees, as opposed to Main-net costs and transactions settlement times (new block).
I think that is what is likely to happen with Square/CASH, as Jack has been one of the main investors in Lightening Labs. This alone disproves the notion that the World would have had to collapse to achieve the goal that goal--something that has admittedly kept me awake at night, and I have spoken to several developers and entrepreneurs about throughout my time in Bitcoin.
After nearly 9 years in this space, and that time has flown by, I think it's a Crypto Nerd's wet-dream/panacea to think that everyone wants to be their own Bank, or simply be unbanked because those that need it the most are almost entirely unfamiliar with the concept entirely, and they will some how decide to run their own nodes they run on a meshnet based protocol and are using a Blockstream satelite to verify and update the Blockchain with.
It's theoretically possible but entirely unrealistic because its far more time and effort than most people want to expend, and the reality is many would prefer to make MANY compromises to just have system that 'works' without worrying about the mechanics of it all and have the guesswork taken out and have a turn-key solution.
I equate to how people are almost entirely unaware of how an ICE works, or electricity running through the wires runs and powers all of the devices in their homes. It's up to entrepreneurs and engineers to not just create a superior product in this case a monetary system, which I would argue we have had for some time, but also to create an interface that ensures the least amount of friction to onboard the rest of the 'non-initiated,' and I argue we've been in this phase since about 2016 or so.
Bitcoin will have truly succeeded and fulfilled it's true potential for the masses when it's users are entirely unaware they are using it is my new benchmark for success, because for the initiated its already pretty damn seamless from where it was 8-9 years ago if you're already within it and that was just scratching the surface of what it's capable of doing within a very small, albeit determined demographic, which has had significant disruption all over the World already. I'm excited of the World(s) it could create (as Bitcoin remain one of the few viable options for a Multi-planetary monetary system) and is one of the main reasons why I remain optimistic despite all the calamity we see in the World.
1: https://www.cnn.com/2019/11/29/tech/jack-dorsey-africa-futur...
This is probably the most coherent, well thought out post I've read about Bitcoin in a long time.
When I was in high school, to make an icon or a sprite, I had to make what was called a shape table on the Apple II [1].
You had to use graph paper, then translate it to hex and then either use a series of POKE statements to stick it in memory or go into the 6502 monitor, sorta like the command line for entering assembler op codes [2].
Eventually, we got programs that did all of this grunt work for us.
Bitcoin is just leaving the Apple II entering hex op codes by hand phase. Certainly some of the Lightning Network client are quite slick and a lot closer to mainstream fintech apps like Venmo and PayPal. Just for buying and selling Bitcoin, Cash App is great.
There will be a point when all of the bells and whistles Bitcoin offers—n of m multisig, pre-signed transactions, the ability to use mixing services, etc. will be accessible to regular people.
[1]: https://en.wikipedia.org/wiki/Shape_table
[2]: http://www.easy68k.com/paulrsm/6502/MONREF.HTM
When I was in high school, to make an icon or a sprite, I had to make what was called a shape table on the Apple II [1].
You had to use graph paper, then translate it to hex and then either use a series of POKE statements to stick it in memory or go into the 6502 monitor, sorta like the command line for entering assembler op codes [2].
Eventually, we got programs that did all of this grunt work for us.
Bitcoin is just leaving the Apple II entering hex op codes by hand phase. Certainly some of the Lightning Network client are quite slick and a lot closer to mainstream fintech apps like Venmo and PayPal. Just for buying and selling Bitcoin, Cash App is great.
There will be a point when all of the bells and whistles Bitcoin offers—n of m multisig, pre-signed transactions, the ability to use mixing services, etc. will be accessible to regular people.
[1]: https://en.wikipedia.org/wiki/Shape_table
[2]: http://www.easy68k.com/paulrsm/6502/MONREF.HTM
[deleted]
cryptica(1)
Very good insight. I agree 100%. My hypothesis is that the massive injection of new cash into the stock market during the pandemic response is a foundational play for the end of the US dollar. I'm not sure of the steps between the cash injection and the adoption of cryptocurrency/ies as the de facto currency/ies but I am certain that this is a calculated attempt to debase the US dollar in order to disarm the unprepared and grab power through the creation a right-libertarian techno dystopia. This is exactly the type of play Steve Bannon would make.
FWIW I hold no crypto so I'm not coming at this from the crypto-bro skin in the game angle.
FWIW I hold no crypto so I'm not coming at this from the crypto-bro skin in the game angle.
> but I am certain that this is a calculated attempt to debase the US dollar in order to disarm the unprepared and grab power through the creation a right-libertarian techno dystopia
What makes you think this is more plausible than the Fed printing money to keep millions of people from starving/getting evicted and businesses to stay afloat amid one of the worst financial crises in history?
What makes you think this is more plausible than the Fed printing money to keep millions of people from starving/getting evicted and businesses to stay afloat amid one of the worst financial crises in history?
Because 1) of who got the money and 2) how it was spent. If they were serious about what you describe they'd provide a basic income directly to the people.
That's kinda what they did - they gave $600/week to every unemployed American, on top of what the state was giving them. Problem was, a lot of it just went into the stock market, and from there into the pockets of wealthy stockholders.
Author is trying to convince noone else but himself.
I've added him to my crypto revenge bookmarks, which is full of toxi maxis, salty nocoiners and other crypto nay sayers.
Will taunt in a few decades once bitcoin has successfully eaten the world.
I've added him to my crypto revenge bookmarks, which is full of toxi maxis, salty nocoiners and other crypto nay sayers.
Will taunt in a few decades once bitcoin has successfully eaten the world.
Not all bitcoiners are crazy. The crazy ones will eventually leave Bitcoin. I think Bitcoin can succeed without world collapse. Bitcoin has been a niche currency. The missing piece is adoption. There're proposals to address this problem. Lightning Network is one. But the hype dies down quite a bit.
I think one missing piece is inflation. I focus my effort in this direction. Check out my project:
https://bitflate.org/
I think one missing piece is inflation. I focus my effort in this direction. Check out my project:
https://bitflate.org/
> The missing piece is adoption
Here's the thing, in 2014 I was playing around a bit with Bitcoin, and at that point adoption seemed better than it is today. I could buy a cup of coffee with it, and many reputable online storefronts were already experimenting with accepting it as payment option. Later, long transaction times and high fees made it almost impossible to actually use BTC as a currency.
My perception is that Bitcoin used to be a serious currency project, but got co-opted by speculators, miners and scammers wishing to use it to accumulate fiat currencies quickly.
Here's the thing, in 2014 I was playing around a bit with Bitcoin, and at that point adoption seemed better than it is today. I could buy a cup of coffee with it, and many reputable online storefronts were already experimenting with accepting it as payment option. Later, long transaction times and high fees made it almost impossible to actually use BTC as a currency.
My perception is that Bitcoin used to be a serious currency project, but got co-opted by speculators, miners and scammers wishing to use it to accumulate fiat currencies quickly.
I've got a problem lightning, I used to very bullish on the technology, but after trying wallets and reading about, the following make me think it can't succeed:
Easy fiat onboard do not exist, and none seem to be coming. All of them you need to do KYC and interact with the main chain, its super unuser-friendly, or require debit cards.
Taxable events get triggered when transacting with bitcoin. Really hard to manage and a really undesirable side-effect for a consumer.
The need for watch towers and inbound-outbound capacity make the technology hard to understand not usable by mainstream.
The lightning network seems to be heading toward centralization, then what it the point? Is the delta of Credit card transaction fees with lnd fees that big that it warrants it? especially if credit card fees drop with time.
Easy fiat onboard do not exist, and none seem to be coming. All of them you need to do KYC and interact with the main chain, its super unuser-friendly, or require debit cards.
Taxable events get triggered when transacting with bitcoin. Really hard to manage and a really undesirable side-effect for a consumer.
The need for watch towers and inbound-outbound capacity make the technology hard to understand not usable by mainstream.
The lightning network seems to be heading toward centralization, then what it the point? Is the delta of Credit card transaction fees with lnd fees that big that it warrants it? especially if credit card fees drop with time.
I think there will be centralization on 2nd layers like the Lightning Network. Bitcoin's mainchain is slow. Running full node is expensive. Decentralization comes with tradeoffs.
Lightning tries to live up with Bitcoin's ethos. It's designed with decentralized nodes. We end up with 2 decentralized networks trying to talk to each other. The result is a very complicated 2nd layer. I think centralization can simplify a lot of things. As a user, I don't have a problem with it. Exchanges are already centralized. We just need more options to choose.
I'm excited about 2nd layers. I think they would enable Bitcoin to interact with other technologies. I created Bitflate based on Bitcoin. We can mix Bitflate and Bitcoin to create hybrid coins. Some level of centralization is fine. It's a tradeoff for lower cost and better UX.
Lightning tries to live up with Bitcoin's ethos. It's designed with decentralized nodes. We end up with 2 decentralized networks trying to talk to each other. The result is a very complicated 2nd layer. I think centralization can simplify a lot of things. As a user, I don't have a problem with it. Exchanges are already centralized. We just need more options to choose.
I'm excited about 2nd layers. I think they would enable Bitcoin to interact with other technologies. I created Bitflate based on Bitcoin. We can mix Bitflate and Bitcoin to create hybrid coins. Some level of centralization is fine. It's a tradeoff for lower cost and better UX.
> The lightning network seems to be heading toward centralization, then what it the point? Is the delta of Credit card transaction fees with lnd fees that big that it warrants it? especially if credit card fees drop with time.
There is a massive difference between temporary centralization for convenience vs. fundamental centralization. See email. Gmail basically has the entire market, but that is a world of difference from email being a proprietary private Google protocol. People can switch at any time. If a provider misbehaves they can be abandoned. The users have the power. The same holds for complaints against coinbase, the internet in general, etc.
There is a massive difference between temporary centralization for convenience vs. fundamental centralization. See email. Gmail basically has the entire market, but that is a world of difference from email being a proprietary private Google protocol. People can switch at any time. If a provider misbehaves they can be abandoned. The users have the power. The same holds for complaints against coinbase, the internet in general, etc.
I'm surprised the author didn't complete the analogy -- if Bitcoin and ham radio are both "clunky and old-fangled," what was the internet at its inception?
The internet didn't start in "1991" it started in 1966 with ARPANET and it was so hard and expensive to use it would make using Bitcoin feel like using a toy.
The tone of this article gives me Krugman-on-internet vibes: "By 2005, it will become clear that the Internet’s impact on the economy has been no greater than the fax machine’s"
The internet didn't start in "1991" it started in 1966 with ARPANET and it was so hard and expensive to use it would make using Bitcoin feel like using a toy.
The tone of this article gives me Krugman-on-internet vibes: "By 2005, it will become clear that the Internet’s impact on the economy has been no greater than the fax machine’s"
It's pretty easy to see why ARPANET took a while to develop and turn into the internet we know today. Youtube didn't exist in the 1960's not because people though that streaming video was a dumb idea but rather because it was simply technically impossible to do at that time. In order for the internet to develop it required massive progress in hardware and infrastructure. To this day many places in rich countries still have crappy internet access.
What's Bitcoin's excuse? Where is the technical limitation? Do we need nuclear fusion or 100Terabyte internet links for it to become usable? Do we need high speed data transmission to Mars?
The only thing standing in the way of Bitcoin is people finding compelling use cases for it in order to drive adoption. 10+ years and billions of dollars later it's still only useful as a tool for gambling and scams or to buy drugs and other illegal things online.
Also, ARPANET was already very useful by the mid-1970s (it was declared "operational" in 1975, 9 years after its inception). It was not the internet we know today of course, but it wasn't really meant to be. It was a defence project after all.
What's Bitcoin's excuse? Where is the technical limitation? Do we need nuclear fusion or 100Terabyte internet links for it to become usable? Do we need high speed data transmission to Mars?
The only thing standing in the way of Bitcoin is people finding compelling use cases for it in order to drive adoption. 10+ years and billions of dollars later it's still only useful as a tool for gambling and scams or to buy drugs and other illegal things online.
Also, ARPANET was already very useful by the mid-1970s (it was declared "operational" in 1975, 9 years after its inception). It was not the internet we know today of course, but it wasn't really meant to be. It was a defence project after all.
> What's Bitcoin's excuse?
Existing currency solutions exist. There was no technology or infrastructure displaced by the (early) internet. No industries or governments (who realized they should feel) threatened by the internet.
The internet was backed by nuclear weapons and aircraft carriers. Is that really a fair comparison? Just think if there was never a person in the room to say "but what will regulators say?" when cryptocurrency came up.
Finally the internet as we know is unrecognizable compared to its initial incarnation. The network protocols we now have are layers upon layers of innovation that were all required steps to allow YouTube and Netflix to operate. And many or these innovations are solutions to problems the early engineers hadn't even encountered yet.
> Do we need nuclear fusion or 100Terabyte internet links for it to become usable? Do we need high speed data transmission to Mars?
I think it's fair to say that there are unknown innovations in our future that will drive cryptocurrency adoption. I think it's unfair to insist that we must predict those right now or abandon all work on the technology.
Existing currency solutions exist. There was no technology or infrastructure displaced by the (early) internet. No industries or governments (who realized they should feel) threatened by the internet.
The internet was backed by nuclear weapons and aircraft carriers. Is that really a fair comparison? Just think if there was never a person in the room to say "but what will regulators say?" when cryptocurrency came up.
Finally the internet as we know is unrecognizable compared to its initial incarnation. The network protocols we now have are layers upon layers of innovation that were all required steps to allow YouTube and Netflix to operate. And many or these innovations are solutions to problems the early engineers hadn't even encountered yet.
> Do we need nuclear fusion or 100Terabyte internet links for it to become usable? Do we need high speed data transmission to Mars?
I think it's fair to say that there are unknown innovations in our future that will drive cryptocurrency adoption. I think it's unfair to insist that we must predict those right now or abandon all work on the technology.
So basically you're saying that cryptocurrencies don't work currently because there are established solutions that already solve the problem it attempts to solve but it's totally going to work eventually due to unknown unknowns and it's unfair to point that out somehow?
Come on. Apply that logic to literally anything else and see how that sounds.
>The internet was backed by nuclear weapons and aircraft carriers. Is that really a fair comparison
The comparison was made by cryptozealots to begin with to justify the lack of results after many years of development and billions of dollars sunk into them. "How useful was the internet 3/5/7 years after its inception?!". Now that even this incredibly silly comparison fails to justify this waste of resources for so little results, cryptozealots have turned their back on it.
What's next, the timescale of the evolution of life on Earth? Who knows, maybe in a billion years Bitcoins will finally serve a purpose beyond buying cocaine online. HODL!
Come on. Apply that logic to literally anything else and see how that sounds.
>The internet was backed by nuclear weapons and aircraft carriers. Is that really a fair comparison
The comparison was made by cryptozealots to begin with to justify the lack of results after many years of development and billions of dollars sunk into them. "How useful was the internet 3/5/7 years after its inception?!". Now that even this incredibly silly comparison fails to justify this waste of resources for so little results, cryptozealots have turned their back on it.
What's next, the timescale of the evolution of life on Earth? Who knows, maybe in a billion years Bitcoins will finally serve a purpose beyond buying cocaine online. HODL!
> I think it's fair to say that there are unknown innovations in our future that will drive cryptocurrency adoption
This isn't an argument, it's a statement of faith. Innovations such as what? What innovations? What technology? What is missing from society today that would suddenly make bitcoin useful if it existed? What problem exists preventing people from using bitcoin that would be solved with a new invention?
I believe there are unknown innovations in our future that will drive everyone to adopt my toenail clippings as currency, is that a good enough argument for you to start investing in Anarion's Toenails LTD?
If you asked somebody in 1975, "What is preventing people from making mass utility out of ARPAnet?" they would say "a connection to it". Because that's literally all it took: access. When the internet went public in 1993, Ebay, Amazon, Netscape, Yahoo, Altavista, and Geocities were all founded and seeing substantial usage within months.
This isn't an argument, it's a statement of faith. Innovations such as what? What innovations? What technology? What is missing from society today that would suddenly make bitcoin useful if it existed? What problem exists preventing people from using bitcoin that would be solved with a new invention?
I believe there are unknown innovations in our future that will drive everyone to adopt my toenail clippings as currency, is that a good enough argument for you to start investing in Anarion's Toenails LTD?
If you asked somebody in 1975, "What is preventing people from making mass utility out of ARPAnet?" they would say "a connection to it". Because that's literally all it took: access. When the internet went public in 1993, Ebay, Amazon, Netscape, Yahoo, Altavista, and Geocities were all founded and seeing substantial usage within months.
> What's Bitcoin's excuse?
Bitcoin has already worked as a Store of Value. It can survive on this narrative without other use cases. I think of Bitcoin is a piece in the future money puzzle. We need to find the other missing pieces. One of the missing pieces is inflation. I wrote an article on this:
https://bitflate.org/post/2019/08/26/bitcoin-missing-link-to...
Bitcoin has already worked as a Store of Value. It can survive on this narrative without other use cases. I think of Bitcoin is a piece in the future money puzzle. We need to find the other missing pieces. One of the missing pieces is inflation. I wrote an article on this:
https://bitflate.org/post/2019/08/26/bitcoin-missing-link-to...
>What's Bitcoin's excuse? Where is the technical limitation?
Block propagation? Non-shit 2nd layer? If all BTC transactions fees only cost .00001 USD to settle and that was consistent you think it wouldn't be more widely adopted? Fees are clearly a function of technical limitation.
Block propagation? Non-shit 2nd layer? If all BTC transactions fees only cost .00001 USD to settle and that was consistent you think it wouldn't be more widely adopted? Fees are clearly a function of technical limitation.
Didn't Doug Engelbart do video streaming in the 60's?
The video streaming technology used in NLS was based on analog CRT television technologies. Later, videoconferencing was done digitally over dedicated phone connections/calls.
It took a while before doing real-time video over the packet-switched internet became feasible.
This article doesn't make a claim about the future that you can prove wrong retrospectively. It could make a claim about how much impact Bitcoin will have by some specific moment in some measurable way, but it doesn't.
Krugman's prediction is funny because it more or less explains why it's wrong right in the text. Krugman thinks Metcalfe's Law isn't true. But it is! Metcalfe's Law is just the Network Effect, which has already proved itself twice before on a global scale, plus Bob Metcalfe's successful self-branding.
By 1998 when he wrote that, the Internet is already the Network. Its competitors (both other networks using protocols like X.25 and "Walled gardens" like MSN) are dying or have been cheerfully integrated into the Internet exactly as the Network Effect would predict.
Coiners should actually be flattered that people think there's a way for Bitcoin to remain as relevant as amateur radio. There really might not be.
Krugman's prediction is funny because it more or less explains why it's wrong right in the text. Krugman thinks Metcalfe's Law isn't true. But it is! Metcalfe's Law is just the Network Effect, which has already proved itself twice before on a global scale, plus Bob Metcalfe's successful self-branding.
By 1998 when he wrote that, the Internet is already the Network. Its competitors (both other networks using protocols like X.25 and "Walled gardens" like MSN) are dying or have been cheerfully integrated into the Internet exactly as the Network Effect would predict.
Coiners should actually be flattered that people think there's a way for Bitcoin to remain as relevant as amateur radio. There really might not be.
Except that ham radio has been around for much longer(1909!) and hasn't exploded like the internet.
Honestly that's the one thing that I like about it, it hasn't been heavily monetized in a way that's brought in large actors. I don't know if you can say the same of bitcoin.
Honestly that's the one thing that I like about it, it hasn't been heavily monetized in a way that's brought in large actors. I don't know if you can say the same of bitcoin.
If Bitcoin is ham radio the ILP (Interledger Protocol) is arguably "the internet" then.
ILP is for money what TCP/IP is for data. Whatever the internet want to do with data it does so with a protocol build on top of TCP/IP. If you want to do something with money/balances/escrows/swapping/path finding etc. etc. that could be build on top of ILP. Its completely independent of a currency because its just a protocol it doesn't care what you send over it just like TCP/IP doesn't.
I'd suggest also taking a look at the Blocknet Protocol which is similar.
Sadly its focused on communication between blockchains. Its one of these projects that I think is completely lost in the crypto bubble^^
ILP however is for the real world, where almost nothing is running on a blockchain and in the future most likely communication will be required between legacy systems and blockchains to integrate them.
It's not just between blockchains, it also supports communication with off-chain. I know the documentation doesn't directly reflect that now but they're in the process of redoing and expanding the website, docs, and content in general to more accurately reflect and better explain all this.
You can tell the author is not a ham when he says hams "broadcast" their radio message. They don't broadcast (per FCC rule), they make transmissions.
I can see where the author is going here, but the analogy seems a little weird. It also ignores that there is an overlap in the bitcoin and ham world, namely the "prepper" types that assume someday the entire world will implode on itself. These tend to be a vocal minority though (at least in the ham world, I can't speak to bitcoin as much).
The comparison seems flawed though because ham radio has never been about money (except maybe saving on long distance charges in the 70's/80's), and when money is involved (in whatever form) it certainly has an outsized influence on behavior (good or bad). As such I'm not sure you can draw and realistic comparisons between bitcoin and ham radio without stretching the analogy.
I can see where the author is going here, but the analogy seems a little weird. It also ignores that there is an overlap in the bitcoin and ham world, namely the "prepper" types that assume someday the entire world will implode on itself. These tend to be a vocal minority though (at least in the ham world, I can't speak to bitcoin as much).
The comparison seems flawed though because ham radio has never been about money (except maybe saving on long distance charges in the 70's/80's), and when money is involved (in whatever form) it certainly has an outsized influence on behavior (good or bad). As such I'm not sure you can draw and realistic comparisons between bitcoin and ham radio without stretching the analogy.
What's the difference between broadcasting and transmitting? It's not like the "transmission" is some directed line-of-sight thing.
The FCC definition of broadcasting (per Part 97) is "Transmissions intended for reception by the general public, either direct or relayed."
This is not allowed on ham bands, as these are not frequencies for general public use. Broadcasting implies one-way communication only. Hams expect to receive responses to their transmissions, thus the distinction.
This is not allowed on ham bands, as these are not frequencies for general public use. Broadcasting implies one-way communication only. Hams expect to receive responses to their transmissions, thus the distinction.
Transmitting implies an exchange of messages. Broadcast implies
indiscriminately ... broadcasting.
Transmitting and receiving implies an exchange. Transmitting just means sending.
Transmitting implies transmitting and receiving which implies an exchange of messages.
The important part is that broadcasting is not exchanging messages.
This must be some nonstandard definition of transmitting.
What was the purpose of your original question? Was it to further your understanding or to open an opportunity to be fastidious?
Are you still incapable of seeing that broadcasting is a specific action?
Are you still incapable of seeing that broadcasting is a specific action?
It was to further my understanding. But responses like "well, actually transmitting means transmitting AND receiving" don't really do that.
> If five years from now everyone in the world has become a bitcoin user, that could only be because something very very bad has happened to the regular monetary system. Perhaps hostile aliens have enslaved us and are using the payments system to control what we can buy, sort of like Margaret Atwood's Compucounts in her dystopic Handmaid's Tale. And so bitcoin has gone mainstream, but only because we have all been forced to become under-the-table bitcoin users in order to buy stuff we need.
I'm not sure the author is paying attention to what really is happening to money around the world.
- Local currencies are being weaponized in various ways from countries to individuals, including surveillance, sanctions, and civil asset forfeiture.
- Physical currency is being withdrawn incrementally around the world, forcing citizens into electronic payment networks with greater weaponization potential.
- The dollar's position as global reserve currency and asset have placed unprecedented stresses on the US financial/political system. there are only two options: default on the national debt(s) or devaluation. It's not going to be default. So, for as long as the global dollar short squeeze[1] rages, the Fed's balance sheet will expand, fuel devastating bubbles, and cause rational people to look for alternatives in the strangest places.
- Gold is increasingly becoming problematic if held abroad. Venezuela recently discovered that gold stored in UK vaults can be stolen by men in 3-piece suits. This makes the picture around gold as a settlement asset increasingly murky.
Bitcoin may or may not offer solutions here. But to brush off obvious problems with the world's financial system at this moment in time seems rather short-sighted.
[1] https://www.lynalden.com/global-dollar-short-squeeze/
I'm not sure the author is paying attention to what really is happening to money around the world.
- Local currencies are being weaponized in various ways from countries to individuals, including surveillance, sanctions, and civil asset forfeiture.
- Physical currency is being withdrawn incrementally around the world, forcing citizens into electronic payment networks with greater weaponization potential.
- The dollar's position as global reserve currency and asset have placed unprecedented stresses on the US financial/political system. there are only two options: default on the national debt(s) or devaluation. It's not going to be default. So, for as long as the global dollar short squeeze[1] rages, the Fed's balance sheet will expand, fuel devastating bubbles, and cause rational people to look for alternatives in the strangest places.
- Gold is increasingly becoming problematic if held abroad. Venezuela recently discovered that gold stored in UK vaults can be stolen by men in 3-piece suits. This makes the picture around gold as a settlement asset increasingly murky.
Bitcoin may or may not offer solutions here. But to brush off obvious problems with the world's financial system at this moment in time seems rather short-sighted.
[1] https://www.lynalden.com/global-dollar-short-squeeze/
> there are only two options: default on the national debt(s) or devaluation
I disagree that these are the only two options. There are quite a few other options:
(1) Limit deficit spending and continue paying down the current debt
(2) Raise taxes to eliminate the deficit, and continue paying down the current debt
(3) Sell US government assets to pay down the current debt (land holdings, gold)
(4) A combination of the above policies
I disagree that these are the only two options. There are quite a few other options:
(1) Limit deficit spending and continue paying down the current debt
(2) Raise taxes to eliminate the deficit, and continue paying down the current debt
(3) Sell US government assets to pay down the current debt (land holdings, gold)
(4) A combination of the above policies
Bitcoin is an amazing project. And in fairness, has survived 11 years as a target for every malicious actor and curious mind out there.
That said from both an applied cryptographic point of view, and from an economic perspective I think Monero is just fabulous.
Given its fungible and private, its a lot closer to “money” than Bitcoin.
I think it has a strong probability of becoming an important part of global payment options. Its daily transaction count is also at an all time high.
That said from both an applied cryptographic point of view, and from an economic perspective I think Monero is just fabulous.
Given its fungible and private, its a lot closer to “money” than Bitcoin.
I think it has a strong probability of becoming an important part of global payment options. Its daily transaction count is also at an all time high.
One of my side businesses is https://icryptonode.com/ that sells monero-specific hardware and software. Monero is even clunkier to user than Bitcoin for a bunch of reasons, but over the years has been getting easier.
Unfortunately, a lot of the ways to make it easier (remote nodes, fully-synced transaction history by a cloud service) severely curtail the privacy element. But it still makes it easier to invest and transact in, if you aren't super worried about privacy.
All being said, I love Monero, and its community is exceptional. If you go to DEFCON in Las Vegas, be sure to visit the Monero room!
Unfortunately, a lot of the ways to make it easier (remote nodes, fully-synced transaction history by a cloud service) severely curtail the privacy element. But it still makes it easier to invest and transact in, if you aren't super worried about privacy.
All being said, I love Monero, and its community is exceptional. If you go to DEFCON in Las Vegas, be sure to visit the Monero room!
The Feds archive all encrypted communication, including supposedly untraceable Monero ring signatures, so that they can decrypt it sometime in the future when they have (and they will at some point) a strong enough quantum or a cryptanalytic exploit. It may be safe enough for pragmatic reasons to want secrecy like selling drugs, but if you want secrecy for philosophical reasons then you should know that even Monero won't really give you it.
No privacy is perfect. Monero is evolving. It’s state of the art currently.
Does Monero have a upper limit of issued coins like Bitcoin?
It doesn't. I see here https://www.coingecko.com/en/coins/monero
Circulating Supply: 17,630,237 / ∞
Circulating Supply: 17,630,237 / ∞
It drains to a trickle and then continues indefinitely. The supply is less than bitcoins until 2040.
Still, like Bitcoin, the vast majority of all Monero emitted in the first century, is emitted in the first few years.
Grin has the simplest possible emission, at 1 Grin per second forever. They're all disinflationary, i.e. the yearly inflation rate goes down to 0.
«No, bitcoin isn't going to become a mainstream kind of money. It's too awkward for most people.»
This strikes me as something written by someone who is fundamentally not a problem solver. It's like someone seeing the first cars in the late 19th and early 20th century: awkward, unreliable, etc, and thinking "clearly, cars are NEVER going to become mainstream".
Really? You can't think of any way the technology and tools could improve to make using Bitcoin less awkward?
«Crazy price gyrations are far too wicked for the regular money-using public to tolerate»
Objectively, volatility has significantly decreased over the last 11 years, and will continue to decrease, which is perfectly expected with maturing financial markets.
This strikes me as something written by someone who is fundamentally not a problem solver. It's like someone seeing the first cars in the late 19th and early 20th century: awkward, unreliable, etc, and thinking "clearly, cars are NEVER going to become mainstream".
Really? You can't think of any way the technology and tools could improve to make using Bitcoin less awkward?
«Crazy price gyrations are far too wicked for the regular money-using public to tolerate»
Objectively, volatility has significantly decreased over the last 11 years, and will continue to decrease, which is perfectly expected with maturing financial markets.
Cars however did mature. Bitcoin does not. It just forks whenever someone wants to do significant changes. Also at that point no change could ever get it anywhere close to what other projects achieved with similar but better tech. The fundamentals in Bitcoins are de-facto unchangeable and very much outdated.
«Bitcoin does not»
This statement betrays you have not paid attention to the numerous improvements made to the Bitcoin infrastructure over the last 11 years: wallets, nodes, exchanges, payment processors, vaults, blockchain upgrades, basically all the BIPs https://github.com/bitcoin/bips : segwit, P2SH, lightning, M-of-N keys, deterministic wallets, etc. Using Bitcoin in 2020 is nothing at all like it was in 2009.
This statement betrays you have not paid attention to the numerous improvements made to the Bitcoin infrastructure over the last 11 years: wallets, nodes, exchanges, payment processors, vaults, blockchain upgrades, basically all the BIPs https://github.com/bitcoin/bips : segwit, P2SH, lightning, M-of-N keys, deterministic wallets, etc. Using Bitcoin in 2020 is nothing at all like it was in 2009.
Just because there are people coding on it and made improvements doesn't mean it matured. I know very well that there where changes but none of them made any relevant progress to get rid of the growing centralization, very slow speed, limited throughput. etc. etc. Next bullrun Bitcoin will hit the ceiling again and people will says Lightning and what not will solve this soon(TM) while it clearly does not. Bitcoin itself is outdated tech incapable of delivering what it promised 10 years ago and there is nothing being done to change that.
> Really? You can't think of any way the technology and tools could improve to make using Bitcoin less awkward?
I can, I just don't see things trending in that direction. ATMs were supposed to make it easy for anyone to participate; now they are best known as a place for scammers to direct victims to. Lightning network was supposed to increase the transaction rate, where is it now? It's been a few years since I've seen a "Bitcoin accepted here" decal in real life, and they are much sparser online too.
Funny enough, I checked my history and I made a similar comment to yours when Bitcoin first hit $4[1]. But I hardly see the case for optimism lately.
1. https://news.ycombinator.com/item?id=2501153
I can, I just don't see things trending in that direction. ATMs were supposed to make it easy for anyone to participate; now they are best known as a place for scammers to direct victims to. Lightning network was supposed to increase the transaction rate, where is it now? It's been a few years since I've seen a "Bitcoin accepted here" decal in real life, and they are much sparser online too.
Funny enough, I checked my history and I made a similar comment to yours when Bitcoin first hit $4[1]. But I hardly see the case for optimism lately.
1. https://news.ycombinator.com/item?id=2501153
"Lightning network was supposed to increase the transaction rate, where is it now?"
Lightning network is deployed and increasing the transaction rate. Did someone say otherwise?
Lightning network is deployed and increasing the transaction rate. Did someone say otherwise?
I'm mostly just inferring from the fact that the volume on LN chatter seems to have died down; I don't follow super closely but I've been unable to find any transaction rate stats for LN, are they out there?
Bitcoin volatility has not decreased. There was a big drop in March 2020. Bitcoin's limited supply makes its price volatile. I don't think volatility will ever go away. It's a property. I chart some data from BitMex here:
https://vida.io/dashboards/ckamz2w9n00000vkzp471j0md
https://vida.io/dashboards/ckamz2w9n00000vkzp471j0md
when cars were invented it was clear pretty quickly that the car is faster than a horse-carriage.
Bitcoin if anything is clunkier, slower, more expensive than regular tools and we're a already well more than a decade into this.
And worse a lot of this is by design to make the economics of decentralised systems work, because if there's no authority you need to put up some kind of cost to keep the system intact.
Crypto wasn't ever about problem-solving but primarily ideology driven libertarian project which has little appeal in most parts of the world. The problem crypto solves are mostly problems that crypto itself has invented.
Bitcoin if anything is clunkier, slower, more expensive than regular tools and we're a already well more than a decade into this.
And worse a lot of this is by design to make the economics of decentralised systems work, because if there's no authority you need to put up some kind of cost to keep the system intact.
Crypto wasn't ever about problem-solving but primarily ideology driven libertarian project which has little appeal in most parts of the world. The problem crypto solves are mostly problems that crypto itself has invented.
Slower than regular tools?
In Australia we have some of the most profitable banks on Earth. If I send $20 to my friend on a long weekend Friday morning it won't reach him until midday Tuesday. The fee is $2, 10% charge, 4 days wait.
It's been a decade since bitcoin was created and they only just got around to realtime payments, though still not all banks have implemented it.
The alternatives offered by the banking system is hardly a shining beacon of innovation for an industry that takes so much and has the government footing the bill for whenever it fails.
In Australia we have some of the most profitable banks on Earth. If I send $20 to my friend on a long weekend Friday morning it won't reach him until midday Tuesday. The fee is $2, 10% charge, 4 days wait.
It's been a decade since bitcoin was created and they only just got around to realtime payments, though still not all banks have implemented it.
The alternatives offered by the banking system is hardly a shining beacon of innovation for an industry that takes so much and has the government footing the bill for whenever it fails.
anglosphere banking systems seem particularly slow but then just use venmo or cashapp, paypal, doesn't even have any fees.
Or wechat pay and alipay etc.. frictionless money exchange is basically already done without resorting to crypto. The things crypto adds mostly general users don't really care about.
Or wechat pay and alipay etc.. frictionless money exchange is basically already done without resorting to crypto. The things crypto adds mostly general users don't really care about.
These posts always seem to focus on Bitcoin which of course is easy to dismiss and isn't likely to make any major changes anytime soon. If you want to talk about a financial network and something end users would actually use then articles should focus on something like Ethereum which does support decentralized finance applications and has easy to use interfaces such as Argent that normal people can use without technical knowledge.
>Crazy price gyrations are far too wicked for the regular money-using public to tolerate
This is what stablecoins such as DAI and USDC are for. People will use stablecoins for their everyday lives as it's built for being a medium of exchange.
>It's too awkward for most people
This is still true to an extent but most people would have no problem using Argent.
Average people need easy to use savings accounts. Easy ways to save and invest their money for the future. One click ways to purchase products. These can't happen on Bitcoin but they already exist on Ethereum and DeFi. All possible in a trustless way.
There's a lot of development happening on web3 right now but if you focus entirely on Bitcoin you will miss the important parts of what make this space interesting.
>Crazy price gyrations are far too wicked for the regular money-using public to tolerate
This is what stablecoins such as DAI and USDC are for. People will use stablecoins for their everyday lives as it's built for being a medium of exchange.
>It's too awkward for most people
This is still true to an extent but most people would have no problem using Argent.
Average people need easy to use savings accounts. Easy ways to save and invest their money for the future. One click ways to purchase products. These can't happen on Bitcoin but they already exist on Ethereum and DeFi. All possible in a trustless way.
There's a lot of development happening on web3 right now but if you focus entirely on Bitcoin you will miss the important parts of what make this space interesting.
"This article about Bitcoin only focuses on Bitcoin".
Totally agree. The amount of innovation in defi over the past year is stunning, the people still dismissing cryptocurrency as as some bubble/fad are missing out on really interesting tech both in finance and governance.
A lot of people in the space made a lot of money a couple years back (on what was a bubble) but that means they are now are set for life and can dedicate themselves fully to working on the tech, and its all starting to click together.
You don't have to buy into it with your money if you dont want too, you can still explore the tech.
https://www.radicalxchange.org/concepts/ https://gitcoin.co/
A lot of people in the space made a lot of money a couple years back (on what was a bubble) but that means they are now are set for life and can dedicate themselves fully to working on the tech, and its all starting to click together.
You don't have to buy into it with your money if you dont want too, you can still explore the tech.
https://www.radicalxchange.org/concepts/ https://gitcoin.co/
> These can't happen on Bitcoin but they already exist on Ethereum and DeFi. All possible in a trustless way.
In reality, just about every DeFi platform is not trustless nor are the usecases possible in a trustless way. Uniswap is one exception that comes to mind.
The parallel is that you can have the existing financial systems replicated on Bitcoin, Ethereum, with some additional properties and tradeoffs. I don't think you could make that kind of comparison with ham radio?
In reality, just about every DeFi platform is not trustless nor are the usecases possible in a trustless way. Uniswap is one exception that comes to mind.
The parallel is that you can have the existing financial systems replicated on Bitcoin, Ethereum, with some additional properties and tradeoffs. I don't think you could make that kind of comparison with ham radio?
>In reality, just about every DeFi platform is not trustless nor are the usecases possible in a trustless way
While this is true in these early days where developers need the ability to upgrade contracts and quickly fix bugs it is not the long term state of these projects and all of the major ones have defined paths to full decentralization. It's important to note that even today all of these services are non-custodial which is already a huge step up from the status quo. The amount of centralization is also variable with some projects able to upgrade certain portions of their systems but not all of it and other projects simply having an emergency kill switch they can use in case of a critical bug but can't actually change the contract.
It's definitely not perfect right now but it's already better than traditional systems with things becoming more trustless over time. Eventually these services will be as fixed as Uniswap/Balancer/etc as things get more stable.
While this is true in these early days where developers need the ability to upgrade contracts and quickly fix bugs it is not the long term state of these projects and all of the major ones have defined paths to full decentralization. It's important to note that even today all of these services are non-custodial which is already a huge step up from the status quo. The amount of centralization is also variable with some projects able to upgrade certain portions of their systems but not all of it and other projects simply having an emergency kill switch they can use in case of a critical bug but can't actually change the contract.
It's definitely not perfect right now but it's already better than traditional systems with things becoming more trustless over time. Eventually these services will be as fixed as Uniswap/Balancer/etc as things get more stable.
"The path to decentralisation" for these projects are usually very primitive and don't actually arrive at the broad claims. Too often it's just putting wall paper over the hole in the wall. A DAO it self doesn't bring you decentralisation, the hardest problem is how you determine the members of the DAO. With how this is being played (tokens) you arrive at oligarchy or a federation, not decentralisation. The developers know this. That's why you don't see anything but baby steps forward with regards to decreasing their power over the protocols.
Ditto on the non custodial claims, I can count on one hand the amount of times I've seen this term used to describe a product and for it to actually be the case.
Ditto on the non custodial claims, I can count on one hand the amount of times I've seen this term used to describe a product and for it to actually be the case.
Since you guys seem to know your stuff and can see past all the marketing bullshit meant to intentionally mislead people, you might be interested in Blocknet and Block DX (DEX powered by Blocknet). Unlike Uniswap which is Ethereum/account based, Block DX is UTXO based (ETH integration in the works) with every component decentralize. Non-custodial, order books are p2p, order matching is p2p, and verifications are performed locally, and settlement via atomic swaps. Trades are also extremely fast (3-10s) with trade times independent of block times. Also in regards to Blocknet as a whole, they also offer decentralize oracles. Anyway, I'll stop here because I think I may be coming off as a shill, but I just figured you'd enjoy taking a peak since you could appreciate what they're doing for the ecosystem.
Stablecoins are either actually unstable or fully centralized. They aren’t germane to this discussion.
There are multiple decentralized stablecoins out there. DAI is the most well known and works pretty well. sUSD also works well. mStable is the best of both worlds and uses both decentralized and centralized stablecoins in a basket to form an even more stable, stable coin.
They are very relevant to the discussion as stablecoins will be the primary way people interact with decentralized services and decentralized stablecoins retain the decentralized and trustless properties that make BTC and ETH valuable.
They are very relevant to the discussion as stablecoins will be the primary way people interact with decentralized services and decentralized stablecoins retain the decentralized and trustless properties that make BTC and ETH valuable.
No decentralized stablecoin actually makes economic sense. Several have collapsed. https://cointelegraph.com/news/breaking-the-peg-every-stable...
DAI is made by pegging on Ethereum. Ethereum is a volatile asset due to its limited supply. DAI is inherently volatile. Its peg can fail. No amount of algorithm and automation can fix the problem. To be digital native, you need to accept some level of volatility. DAI promises the impossible. I wrote about this issue.
https://bitflate.org/post/2020/03/14/the-problem-with-dai.ht...
https://bitflate.org/post/2020/03/14/the-problem-with-dai.ht...
As a Bitcoin Core contributor[1] and recent Ham radio adopter, the author mistakes a key point:
> This lack of a gate keeper means that there is no one to soften the user experience.
This is true of Ham radio[2], but it is not the case with Bitcoin. Like the internet, and unlike Ham radio, Bitcoin as a system/protocol is open to people creating centralized resources atop it and serving as gatekeepers.
The fact is that today a significant amount[3] of Bitcoin is stored in centralized exchange accounts, controlled by gatekeepers by way of hosted exchange wallets. Likewise, hosted web and mobile wallets are a significant element of the ecosystem, for example, while work on refining self-sovereign/non-custodial lightning network wallets continues, hosted/custodial mobile lightning network wallets are simpler to use, because the hosted gatekeeper can obviate concerns such as opening channels and managing liquidity. Several of the top lightning network wallets[4] are custodial gatekeepers.
Yes, Bitcoin enthusiasts are often hobbyist tinkerers of the sort you might see in Ham radio. At the same time the broader community is served via institutional exchanges and custodial wallets with no such effort required. Often it's the tinkerers who end up running the service providers.
While this decentralized tinkering is an initial hurdle to overcome - it would certainly be easier to have a single company build out all of the initial infrastructure, rather than a host of companies - the result is much more robust against the single failure or control of any one participant. Bitcoin benefits from each service provider, but isn't dependent on any of them. Like the internet, and unlike Ham radio.
[1] https://github.com/bitcoin/bitcoin/commits?author=Empact
[2] Largely due to the peculiarities of antenna installation and frequency selection.
[3] https://news.bitcoin.com/new-list-claims-1-9-million-bitcoin...
[4] https://blog.bitrefill.com/top-11-lightning-network-wallets-...
> This lack of a gate keeper means that there is no one to soften the user experience.
This is true of Ham radio[2], but it is not the case with Bitcoin. Like the internet, and unlike Ham radio, Bitcoin as a system/protocol is open to people creating centralized resources atop it and serving as gatekeepers.
The fact is that today a significant amount[3] of Bitcoin is stored in centralized exchange accounts, controlled by gatekeepers by way of hosted exchange wallets. Likewise, hosted web and mobile wallets are a significant element of the ecosystem, for example, while work on refining self-sovereign/non-custodial lightning network wallets continues, hosted/custodial mobile lightning network wallets are simpler to use, because the hosted gatekeeper can obviate concerns such as opening channels and managing liquidity. Several of the top lightning network wallets[4] are custodial gatekeepers.
Yes, Bitcoin enthusiasts are often hobbyist tinkerers of the sort you might see in Ham radio. At the same time the broader community is served via institutional exchanges and custodial wallets with no such effort required. Often it's the tinkerers who end up running the service providers.
While this decentralized tinkering is an initial hurdle to overcome - it would certainly be easier to have a single company build out all of the initial infrastructure, rather than a host of companies - the result is much more robust against the single failure or control of any one participant. Bitcoin benefits from each service provider, but isn't dependent on any of them. Like the internet, and unlike Ham radio.
[1] https://github.com/bitcoin/bitcoin/commits?author=Empact
[2] Largely due to the peculiarities of antenna installation and frequency selection.
[3] https://news.bitcoin.com/new-list-claims-1-9-million-bitcoin...
[4] https://blog.bitrefill.com/top-11-lightning-network-wallets-...
The mind boggles at the absurdity of this comparison.
The amount of social good, emergency preparedness, advancement of technology and just plain fun is what ham radio is about. Bouncing signals off the moon, communicating across the world with just 10 watts--these are common activities.
Can you compare the energy consumption of a ham radio conversation with the amount of energy bitcoin requires to buy a pizza? Many orders of magnitude.
Insofar as being old and clunky, digital modes such as FT8, FT4, Olivia and associated technology is far from clunky.
If there is a disaster that affects the financial system, bitcoin is not going to help--it will be just as paralyzed as the rest of it.
One is expensive fantasy, the other has an ongoing practical use with social benefit.
The amount of social good, emergency preparedness, advancement of technology and just plain fun is what ham radio is about. Bouncing signals off the moon, communicating across the world with just 10 watts--these are common activities.
Can you compare the energy consumption of a ham radio conversation with the amount of energy bitcoin requires to buy a pizza? Many orders of magnitude.
Insofar as being old and clunky, digital modes such as FT8, FT4, Olivia and associated technology is far from clunky.
If there is a disaster that affects the financial system, bitcoin is not going to help--it will be just as paralyzed as the rest of it.
One is expensive fantasy, the other has an ongoing practical use with social benefit.
Not saying there aren't big problems with Bitcoin, but I think that's it something more than an expensive fantasy. I recently bought a service with Bitcoin for a 10% discount, which seems to suggest it helps that company process payments with lower cost. The engima with cryptocurrencies is that the zealots seem to significantly overvaul it while some outsiders seem to undervalue it.
And I think that's what the point of this article is: that Bitcoin/cryptocurrencies can be useful without replacing the USD.
And I think that's what the point of this article is: that Bitcoin/cryptocurrencies can be useful without replacing the USD.
Blockchain is a database. Bitcoin is a blockchain database with an cryptographic identity layer where transactions are mostly immutable. If all of the people who run Bitcoin don’t all agree on governance then the database is formed into two versions where the transactions before the fork are kept but after the fork the second group will have a different set of transactions (like bitcoin gold) . Ethereum has a super set of features which adds the ability to run a stored procedure which enforce a contract that will be run on the network but have the resources of a microcontroller .
Since the hello world of your own cryptocurrency can be done on ethereum it makes it popular in that respect. Stablecoins are coins pinned to currency values because of the volatility of the underlying coin poses unique issues due to people paying each other in bitcoin or any altcoin.
Bitcoin is the most mature implementation of a blockchain due to being in existence longer . Ethereum has had unique security challenges and transaction issues but since databases are hard to make correctly it will win out due to age .
Bitcoin has proven itself to be able to support speculative investment and faster transaction times than a SWIFT transfer . Ethereum has been used to implement altcoins and stable coins and also encompasses bitcoins feature set too).
Since the hello world of your own cryptocurrency can be done on ethereum it makes it popular in that respect. Stablecoins are coins pinned to currency values because of the volatility of the underlying coin poses unique issues due to people paying each other in bitcoin or any altcoin.
Bitcoin is the most mature implementation of a blockchain due to being in existence longer . Ethereum has had unique security challenges and transaction issues but since databases are hard to make correctly it will win out due to age .
Bitcoin has proven itself to be able to support speculative investment and faster transaction times than a SWIFT transfer . Ethereum has been used to implement altcoins and stable coins and also encompasses bitcoins feature set too).
It does not encompass Bitcoin's feature of being Bitcoin. Should majority of digital wealth ever be transferred to another Technology, I think it is most probable that this transfer is going to be discussed a lot even before it happens in orderly fashion, e.g. by forking or airdropping. Else, most Bitcoin holders probably won't move on.
> If five years from now everyone in the world has become a bitcoin user, that could only be because something very very bad has happened to the regular monetary system
If you ask a bitcoin “true believer,” many will tell you that something terrible has already happened to the regular monetary system. This crowd is typically very concerned with the level of debt in society, especially US government debt, and the devaluation of the dollar during WW2 and the Vietnam War.
If you ask a bitcoin “true believer,” many will tell you that something terrible has already happened to the regular monetary system. This crowd is typically very concerned with the level of debt in society, especially US government debt, and the devaluation of the dollar during WW2 and the Vietnam War.
We're in the middle of a pandemic with no end in sight. We're having a high unemployment rate. The stock market is also at all time high. That's something terrible about this economy. Bitcoiners assign the cause to the monetary system. I think that's reasonable.
Or the fact that just holding capital has better returns than most any other economic activity. That's a recipe for extreme income disparity.
It appears our current government is handing out billions in "relief" to churches in an attempt to offset that income disparity.
I don't disagree, but Bitcoin is deflationary by nature so it's effectively worse on that count. You have zero incentive to spend or invest bitcoins since by design they increase in value as time goes by.
You have incentive to spend, since the point of life is not to die with as many bitcoins as possible, but to spend your wealth on things that you enjoy and matter. I think it is a great thing that BTC makes disincentivizes unnecessary spending.
>You have incentive to spend, since the point of life is not to die with as many bitcoins as possible, but to spend your wealth on things that you enjoy and matter.
Do we live in the same world? Do you think Jeff Bezos has hoarded all this money to buy himself nice clothes, ice cream and trips to the beach? Dying with as much money (i.e. power) as possible is very much the endgame for many people.
And note that it's not just individuals that accumulate a lot of wealth, it's also corporations and governments. Do you think Fort Knox is just a piggy bank for when the citizens of the US decide to go on a collective vacation in Thailand?
>I think it is a great thing that BTC makes disincentivizes unnecessary spending.
Investing into the economy is not unnecessary spending. Every time you hear about a funding round or somebody making a loan, that's somebody else investing money. Fractional reserve is also about reinvesting money instead of letting it sit idly in a coffer.
The fact that these Econ 101 points have to be made again and again in cryptocurrency discussions is probably the best evidence as to why they're doomed to fail. If you don't even understand what inflation is about how can we have a reasonable discussion about currencies?
Do we live in the same world? Do you think Jeff Bezos has hoarded all this money to buy himself nice clothes, ice cream and trips to the beach? Dying with as much money (i.e. power) as possible is very much the endgame for many people.
And note that it's not just individuals that accumulate a lot of wealth, it's also corporations and governments. Do you think Fort Knox is just a piggy bank for when the citizens of the US decide to go on a collective vacation in Thailand?
>I think it is a great thing that BTC makes disincentivizes unnecessary spending.
Investing into the economy is not unnecessary spending. Every time you hear about a funding round or somebody making a loan, that's somebody else investing money. Fractional reserve is also about reinvesting money instead of letting it sit idly in a coffer.
The fact that these Econ 101 points have to be made again and again in cryptocurrency discussions is probably the best evidence as to why they're doomed to fail. If you don't even understand what inflation is about how can we have a reasonable discussion about currencies?
> Dying with as much money (i.e. power) as possible is very much the endgame for many people
At which point, if they didn't provide their private keys to their heirs, the UTXO become unusable, and everybody is a bit richer thanks to these thrifty people generous sacrifice.
> Fractional reserve is also about reinvesting money instead of letting it sit idly in a coffer
Environmentalists seem to dislike investment for investment sake. I don't think they will be too sad if we collectively think it's better to have fun times and let money sit idly in wallets.
> probably the best evidence as to why they're doomed to fail
Doomed to fail, yet continuously succeeded, for over 10 years now, from less than 1 cent apiece to over 10 grands apiece.
It took me a while to realize HN is not fundamentally different from other social networks, like facebook. There is social pressure, and external reality doesn't matter as much as conforming to what the peer group says. Here, ever since BTC original announcement, the majority opinion has been mostly negative, with people actively trying to steer other away from BTC.
The majority has been consistently proven wrong, but social pressure has made that a non issue.
Meanwhile, those who learned how to dissent and did the opposite of what everyone else recommended are set for life. A few people tried to warn us. There was someone who announced here many years ago he put all of his retirement savings in BTC, after which we never heard from him again.
Yet the sour grapes keep complaining. Just for fun, try to read this 2013 thread, and ask yourself what state of reality it will take to consider the possibility you may be wrong: https://news.ycombinator.com/item?id=6927637
At which point, if they didn't provide their private keys to their heirs, the UTXO become unusable, and everybody is a bit richer thanks to these thrifty people generous sacrifice.
> Fractional reserve is also about reinvesting money instead of letting it sit idly in a coffer
Environmentalists seem to dislike investment for investment sake. I don't think they will be too sad if we collectively think it's better to have fun times and let money sit idly in wallets.
> probably the best evidence as to why they're doomed to fail
Doomed to fail, yet continuously succeeded, for over 10 years now, from less than 1 cent apiece to over 10 grands apiece.
It took me a while to realize HN is not fundamentally different from other social networks, like facebook. There is social pressure, and external reality doesn't matter as much as conforming to what the peer group says. Here, ever since BTC original announcement, the majority opinion has been mostly negative, with people actively trying to steer other away from BTC.
The majority has been consistently proven wrong, but social pressure has made that a non issue.
Meanwhile, those who learned how to dissent and did the opposite of what everyone else recommended are set for life. A few people tried to warn us. There was someone who announced here many years ago he put all of his retirement savings in BTC, after which we never heard from him again.
Yet the sour grapes keep complaining. Just for fun, try to read this 2013 thread, and ask yourself what state of reality it will take to consider the possibility you may be wrong: https://news.ycombinator.com/item?id=6927637
Bitcoin is part of the same problem we have with other asset classes like real property.
The biggest challenge for the next decade will be mitigating stagnation.
The biggest challenge for the next decade will be mitigating stagnation.
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That's fine, because the US government can't print Bitcoin and hand it to megachurches and wealthy corporations every time there's an economic downturn.
As someone who works at a large cryptocurrency business, and who's welfare is thus bound to the ongoing success of cryptocurrencies, I would like to state my unequivocal support of the notion presented in this article.
I think the potential of life improvement for many unbanked people in non-first world countries extends a little beyond the life improving characteristics of ham radio, but overall his sentiment on how inaccurate the "BTC is basically 90's internet" people are, is entirely correct.
I think the potential of life improvement for many unbanked people in non-first world countries extends a little beyond the life improving characteristics of ham radio, but overall his sentiment on how inaccurate the "BTC is basically 90's internet" people are, is entirely correct.
Ham radio is often pretty critical during natural disasters.
>But when regular service is restored, it becomes a hobby again. And that's fine.
A hobby that burns 1% of the words electricity and costs literally Millions of dollars every day. If that should stay like that It would need to be a very very popular hobby. Like watching soccer matches popular. The thing is 99.9% do not participate in Bitcoin as a hobby on alternative money. They speculate on gains in the regular money. If there is no more uptrend and crazy gains it cant sustain as a small hobby with only a fraction of the people left paying for the actual running costs which are now still payed by the block reward.
A hobby that burns 1% of the words electricity and costs literally Millions of dollars every day. If that should stay like that It would need to be a very very popular hobby. Like watching soccer matches popular. The thing is 99.9% do not participate in Bitcoin as a hobby on alternative money. They speculate on gains in the regular money. If there is no more uptrend and crazy gains it cant sustain as a small hobby with only a fraction of the people left paying for the actual running costs which are now still payed by the block reward.
> A hobby that burns 1% of the words electricity and costs literally Millions of dollars every day.
70-80% of mining is using renewable energy or reducing pollution, and isn't pulling away from other use cases.
But you didn't know where the energy came from, only how much was being used I guess? You should be able to corroborate this, let me know!
70-80% of mining is using renewable energy or reducing pollution, and isn't pulling away from other use cases.
But you didn't know where the energy came from, only how much was being used I guess? You should be able to corroborate this, let me know!
Your pollution non-argument It's completely irrelevant. I never mentioned pollution anyway. They could get the energy from clean fusion reactors or magic unicorn generators. Someone still has to pay for it. The hobbyist would collectively need to pay millions per day just for the energy. Even today with probably around 100 Million Bitcoin owners that would lead to several dollars per person per day. That half the Netflix user base paying their monthly subscription every day. Do you seriously thing people will do that? For a funny alternative money hobby thing. It's absurd. Its entirely running on its own printed bitcoins which slowly fade to zero block reward.
okay I misunderstood, whats the problem with people paying millions of dollars for something they want to do to the person providing power?
There is no problem. It's just highly unrealistic that such people can be found. And if they cant be found the end result is quite clear. Hashrate will drop to the point where attacks are possible and will occur. Or more likely non-profitable miners will do the final double spend scam before turning their hardware off. Or they go bankrupt and someone buys the hardware cheap to do the double spend after the difficultly adjusted. Either way BTC can not become the ham radio niche thing. Its endless growth or fatal failure.
Last time I checked you didn't need to buy special equipment, study for a test, pass that test and register with the government to buy or hold cryptocurrency.
While the clunky UX and low speed of bitcoin and other cryptocurrencies definitely remind me of packet radio of early 90s, it was pretty amazing to transmit data wirelessly like that, and now we have 4g (and soon 5g and satellite internet) everywhere. I definitely don't think we are at early IRC/netscape/email level experiences yet.
I think you can also only stretch the analogy so far through, and like others have commented I think the future of decentralised cryptocurrencies has more to do with the actions of central banks and the phase of the fiat mega cycle we are coming to.
There has to be a stable store of value that also works well as a currency, and these days it has to be digital. I don't know if it will bitcoin - it's too volatile and not particularly good as currency - but there will be something. Perhaps it will be backed by something physical with finite supply, or perhaps by just algorithms - we will find out. Sometimes I wonder what advanced enough AI would use as a medium of exchange and a store of value - if anything?
I think you can also only stretch the analogy so far through, and like others have commented I think the future of decentralised cryptocurrencies has more to do with the actions of central banks and the phase of the fiat mega cycle we are coming to.
There has to be a stable store of value that also works well as a currency, and these days it has to be digital. I don't know if it will bitcoin - it's too volatile and not particularly good as currency - but there will be something. Perhaps it will be backed by something physical with finite supply, or perhaps by just algorithms - we will find out. Sometimes I wonder what advanced enough AI would use as a medium of exchange and a store of value - if anything?
I completely disagree. The amount of c02 dumped in the atmosphere from this product is unfathomable. HN is full of environmentalists and I don't understand why they don't speak out against bitcoin and like technologies that are doing tremendous damage to the planet.
The internet burns more. Why haven't you gone offline yet?
Source: https://www.forbes.com/sites/christopherhelman/2016/06/28/ho...
Source: https://www.forbes.com/sites/christopherhelman/2016/06/28/ho...
Maybe because the internet actually provides tremendous value to society in exchange for that energy, unlike Bitcoin.
Or maybe because there's no inherent reason why the internet couldn't be made more energy efficient, also unlike Bitcoin.
Or maybe because there's no inherent reason why the internet couldn't be made more energy efficient, also unlike Bitcoin.
the internet actually provides tremendous value to society
Because it's not an 'unfathomable' source of pollution, it's a fraction of a fraction.
Maybe focus on the source of the problem - energy production. As long as the energy is being produced with renewable resources, it doesn't matter how much is used to mine.
Maybe focus on the source of the problem - energy production. As long as the energy is being produced with renewable resources, it doesn't matter how much is used to mine.
Whether intentionally or not the article entrenches some narrow ideas of what blockchain is. At this point talking about Bitcoin as _the_ blockchain is an ancient narrative and does not see wood for the trees. Bitcoin fulfills a certain goal but the world of blockchain (and related to them) systems has become extremely diverse, with many systems racing to fill many niches in various ways. We should drop the Bitcoin == blockchain narrative. It's a narrative for non-technical people and maximalists. We should even stop using the word "cryptocurrency".
Let's take Baseline project as an example of one that defies our ideas of what blockchain is meant to do. Baseline is a protocol developed by a few parties, in particular EY and Microsoft, that means to reduce friction in _communication_ between business entities. If, say, a factory needs more parts delivered it's SAP system communicates with the supplier's Oracle system through a public mainnet protocol encrypted via Zero-Knowledge Proofs. Yes, the system could potentially also handle transfer of value, but it's more than that. It's not bitcoin, it's not a currency, transfer of values isn't even the main point, it's a system of record and communication.
Let's take Baseline project as an example of one that defies our ideas of what blockchain is meant to do. Baseline is a protocol developed by a few parties, in particular EY and Microsoft, that means to reduce friction in _communication_ between business entities. If, say, a factory needs more parts delivered it's SAP system communicates with the supplier's Oracle system through a public mainnet protocol encrypted via Zero-Knowledge Proofs. Yes, the system could potentially also handle transfer of value, but it's more than that. It's not bitcoin, it's not a currency, transfer of values isn't even the main point, it's a system of record and communication.
What's so wrong with a HTTPS REST API call that you need a Zero-Knowledge proof posted on a public mainnet protocol?
I think you are vastly underestimating the complexity of communication across businesses. I am not an expert in what it takes for, say, two ERP systems to sync (EY are, though). But if you have two separate companies trying to order things from each other:
* You need to decide on a protocol
* You need to run servers (if separate from ERP)
* You need to decide on a method of authentication
* Your REST API needs to be very secure (in blockchain you need to keep your keys secure, yes)
* If the other party is unreachable then you need to start queuing transactions and in theory they might be lost, the system falling out of sync without paper trail. Actually they could be lost in any case, cause the other party might be buggy and "forget" to record.
* Which brings to: you need secure logging of your transactions for paper trail.
* You need a method of resolution in case values on each side do not match ("Billion dollar question" Baseline people refer to it as. Immutable ledgers are perfect for this.)
* Probably lots more I cannot think of right now or just do not know.
Using smart contracts as your protocol solves all of those plus:
* You can effectively transfer value over the wire as well. No need to keep an extra payment system in sync. But yes you would need to eventually convert to fiat.
* A standard protocol. If you wanted to talk to yet another company you don't need to set up yet another system and get a team to negotiate auth, security, method of audit, conflict resolution, etc.
The process is, at least in theory, simpler, cheaper, more secure and reliable.
* You need to decide on a protocol
* You need to run servers (if separate from ERP)
* You need to decide on a method of authentication
* Your REST API needs to be very secure (in blockchain you need to keep your keys secure, yes)
* If the other party is unreachable then you need to start queuing transactions and in theory they might be lost, the system falling out of sync without paper trail. Actually they could be lost in any case, cause the other party might be buggy and "forget" to record.
* Which brings to: you need secure logging of your transactions for paper trail.
* You need a method of resolution in case values on each side do not match ("Billion dollar question" Baseline people refer to it as. Immutable ledgers are perfect for this.)
* Probably lots more I cannot think of right now or just do not know.
Using smart contracts as your protocol solves all of those plus:
* You can effectively transfer value over the wire as well. No need to keep an extra payment system in sync. But yes you would need to eventually convert to fiat.
* A standard protocol. If you wanted to talk to yet another company you don't need to set up yet another system and get a team to negotiate auth, security, method of audit, conflict resolution, etc.
The process is, at least in theory, simpler, cheaper, more secure and reliable.
The money use case is cool, but only really that helpful if you want to evade the law. A much broader use case is building applications. This will not work for all apps (eg social networks that produce massive amounts of data), but many apps in the business world (eg accounting systems) do not produce a lot of data.
The advantages are that it will be easier to build apps this way because no outside server is needed. This is great for prototyping and bootstrapping. Apps built on Bitcoin have other advantages like maintaining data provenance (useful for audit purposes), managing data ownership (who is allowed to update a piece of data), or storing cryptocurrency atomically with data.
Frameworks along these lines are starting to pop up. One example is the Bitcoin Computer (http://bitcoincomputer.io/): It allows you to write an app entirely as frontend code and gives you simple provisions for persisting data on chain with a single line of JS code.
The advantages are that it will be easier to build apps this way because no outside server is needed. This is great for prototyping and bootstrapping. Apps built on Bitcoin have other advantages like maintaining data provenance (useful for audit purposes), managing data ownership (who is allowed to update a piece of data), or storing cryptocurrency atomically with data.
Frameworks along these lines are starting to pop up. One example is the Bitcoin Computer (http://bitcoincomputer.io/): It allows you to write an app entirely as frontend code and gives you simple provisions for persisting data on chain with a single line of JS code.
I don't get the dogma that bitcoin as a currency is all about lawlessness.
What if I just want to make an electronic transaction and maintain the same privacy I have with physical currency? Am I an outlaw because electronic transactions are usually completely tracked?
(And I understand that physical currency transactions do not have absolute privacy. I can be physically tracked or recorded, etc. Just as my computer can be bugged before I make a cryptocurrency transaction.)
My fear is that the answer very soon will be: only criminals want to use physical currency -- what are you hiding?
What if I just want to make an electronic transaction and maintain the same privacy I have with physical currency? Am I an outlaw because electronic transactions are usually completely tracked?
(And I understand that physical currency transactions do not have absolute privacy. I can be physically tracked or recorded, etc. Just as my computer can be bugged before I make a cryptocurrency transaction.)
My fear is that the answer very soon will be: only criminals want to use physical currency -- what are you hiding?
Where the legal money use case really shines is in micro transactions. If the amount you want to send is really low it makes a difference if your fee is 30 cents on paypal vs a fraction of a cent with bch, bsv, or ltc. The problem is that it is very hard to monetize apps with micropayments: you need a massive user base because you only earn a fraction of each micropayment. It is hard to convince a massive user base to go through the hassle of obtaining Bitcoin.
I do not want to discourage the use of Bitcoin for that, I think there will be awesome businesses built on micropayments and payments in general. I just want to point out that there is an opportunity to use Bitcoin to make application development faster and cheaper.
I do not want to discourage the use of Bitcoin for that, I think there will be awesome businesses built on micropayments and payments in general. I just want to point out that there is an opportunity to use Bitcoin to make application development faster and cheaper.
I think it comes down to convenience.
Paying in bitcoin is significantly more of a hassle than paying with a card, and it has much less recourse for a buyer that isn't careful (e.g. no chargebacks). Thus few people use bitcoin just as a means of exchange unless they have some specific reason for doing so that outweighs the inconvenience.
You thus end up with a fairly heavy concentration of criminals, fans of the ideology (libertarians and goldbugs), and very privacy-minded people. Of these three categories, the former draws a lot more attention than the other two, and thus bitcoin becomes associated with crime.
Physical currency is still convenient, and the state can go after fraudsters and thieves, so there's more recourse as well. In addition, it's the original form of money, so it has an established user base (so to speak) who aren't criminals. A closer analog to bitcoin would be very large denomination bills, which are both risky to carry and has little wider use; and, indeed, the EU is retiring its 500 euro note on suspicion it's mainly used by criminals.
Paying in bitcoin is significantly more of a hassle than paying with a card, and it has much less recourse for a buyer that isn't careful (e.g. no chargebacks). Thus few people use bitcoin just as a means of exchange unless they have some specific reason for doing so that outweighs the inconvenience.
You thus end up with a fairly heavy concentration of criminals, fans of the ideology (libertarians and goldbugs), and very privacy-minded people. Of these three categories, the former draws a lot more attention than the other two, and thus bitcoin becomes associated with crime.
Physical currency is still convenient, and the state can go after fraudsters and thieves, so there's more recourse as well. In addition, it's the original form of money, so it has an established user base (so to speak) who aren't criminals. A closer analog to bitcoin would be very large denomination bills, which are both risky to carry and has little wider use; and, indeed, the EU is retiring its 500 euro note on suspicion it's mainly used by criminals.
Replace "Bitcoin" with "Ethereum" in everything that @clemensley said, and it will make even more sense.
Since the original post is about Bitcoin I wanted to point out that you can do these things on Bitcoin now. Of course this can be done on Ethereum as well.
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What this article misses is that Bitcoin is not a protocol but a name. You might say a currency. Let me explain:
The dollar started as a gold backed piece of paper with a certain type of look.
At that time, nobody would have accepted a payment via credit card with today's fiat dollars.
But today, we still pay in "Dollar". Even when no paper at all changes hands.
The same can happen to Bitcoin. All kinds of future protocolls might be used to transfer "Bitcoins". These future "Bitcoins" might coexist with current "Bitcoins" during the transition phases.
In fact, in the early days, the Bitcoin protocol did change. But the "wealth" of each holder was preserved.
Saying "Bitcoin isn't going to become a mainstream kind of money. It's too awkward for most people." is like someone 30 years ago saying the dollar must be replaced with a different currency because eventually people will pay digitally instead of moving paper around.
"Bitcoins" are not bound to a certain technology.
"Ham radio" is a technology.
The dollar started as a gold backed piece of paper with a certain type of look.
At that time, nobody would have accepted a payment via credit card with today's fiat dollars.
But today, we still pay in "Dollar". Even when no paper at all changes hands.
The same can happen to Bitcoin. All kinds of future protocolls might be used to transfer "Bitcoins". These future "Bitcoins" might coexist with current "Bitcoins" during the transition phases.
In fact, in the early days, the Bitcoin protocol did change. But the "wealth" of each holder was preserved.
Saying "Bitcoin isn't going to become a mainstream kind of money. It's too awkward for most people." is like someone 30 years ago saying the dollar must be replaced with a different currency because eventually people will pay digitally instead of moving paper around.
"Bitcoins" are not bound to a certain technology.
"Ham radio" is a technology.
This is a failed argument. Internet is already decentralized; there's no need for ham radios. This comparison would make some sense if there was just a single website controlled by the government, and ham radio was the only solution for freedom of information. Current money systems are centralized and controlled by the governments. Bitcoin fixes that.
The internet is not decentralized. The internet is controlled by the government to the same extent that money systems are centralized and controlled by the government. Maybe more actually.
Ham radio allows for communication without the internet or really anyone's permission. It is worth looking into possibilities that the internet may not always be as free or as available. Ham radio fixes Bitcoin.
Ham radio allows for communication without the internet or really anyone's permission. It is worth looking into possibilities that the internet may not always be as free or as available. Ham radio fixes Bitcoin.
Here's a telling fact about the Bitcoin community: this article is auto-censored in a prominent online Bitcoin forum.
It's both hilarious and sad that the bitcoin subreddit that's about uncensorable money is also one of the most censored places on reddit. And many other cryptocurrency subreddits are similar.
It's sad that there is an ongoing dilution of the term "censorship" which is really referring to moderatorship of online forums.
I would still call it censorship when you constantly violate the moderation rules you supposedly follow.
Just look at their "no altcoin discussion rule". Altcoin discussion is allowed if it makes Bitcoin look good, but you'll get banned if you point out benefits of other coins over Bitcoin (or pointing out any flaws with Bitcoin at all).
Or how discussion about the Lightning Network and the centralized sidechain Liquid is allowed and even encouraged, while discussion on a blocksize increase has been bannable for years. Even before Bitcoin forked discussion of full node clients such as Bitcoin XT, which followed all the rules of Bitcoin, were blocked because it was "an altcoin" (which is was not).
Explaining away the countless of unjustly banned users with "moderation" is part of the problem.
Just look at their "no altcoin discussion rule". Altcoin discussion is allowed if it makes Bitcoin look good, but you'll get banned if you point out benefits of other coins over Bitcoin (or pointing out any flaws with Bitcoin at all).
Or how discussion about the Lightning Network and the centralized sidechain Liquid is allowed and even encouraged, while discussion on a blocksize increase has been bannable for years. Even before Bitcoin forked discussion of full node clients such as Bitcoin XT, which followed all the rules of Bitcoin, were blocked because it was "an altcoin" (which is was not).
Explaining away the countless of unjustly banned users with "moderation" is part of the problem.
The r/btc subreddit started as a censorless (or perhaps less censored) community alternative to r/bitcoin, but eventually turned into it's own kind of toxic echo chamber when it became the defacto Bitcoin Cash community.
Reddit is all about creating and maintaining echo chambers these days.
Of course, because a geeky hobby will never go to $100K or $1M.
Not all cryptocurrency content is a scam, but there's a ton of scams in the cryptocurrency space, so it's not surprising that places in the cryptocurrency space might be heavily moderated to try to counter that and have some false positives.
I have yet to see evidence of that. Bitcoin seems the biggest scam of all.
We don't need the entire system to collapse for bitcoin to become mainstream. This can occur with slow integration. It's probably a good thing the halvings occur every 4 years since these tend to drive bull cycles, and are spaced out enough to give time for the technology to catch up with the market cap.
The difference between Bitcoin and ham radio is money. Money is an extremely powerful technology that has changed the world, but one of the most profound ways it’s done so is to distort the minds of those trying to harness it.
When your intellect is a servant of your lust for shiny digital metal, something has gone badly wrong.
When your intellect is a servant of your lust for shiny digital metal, something has gone badly wrong.
Wow the old "bitcoin is an energy hog" argument. (kidding)
Terrible jokes aside, I like this take, but from the standpoint that Bitcoin is a "primitive", almost analogue type technology. But it demonstrates clear innovations over the old existing "normal" payment systems. So the conclusion, in my opinion, that Bitcoin is only for hobbyists in extreme circumstances, includes a fallacy, and one piece of evidence is the increased efficiency in using Bitcoin for intl settlement / remittance.
But Bitcoin is not the end-all of cryptocurrencies. It has flaws and its iteration is relatively frozen.
We need a sound settlement layer first and that settlement layer will need to obtain some degree of generalization in programmability.
Terrible jokes aside, I like this take, but from the standpoint that Bitcoin is a "primitive", almost analogue type technology. But it demonstrates clear innovations over the old existing "normal" payment systems. So the conclusion, in my opinion, that Bitcoin is only for hobbyists in extreme circumstances, includes a fallacy, and one piece of evidence is the increased efficiency in using Bitcoin for intl settlement / remittance.
But Bitcoin is not the end-all of cryptocurrencies. It has flaws and its iteration is relatively frozen.
We need a sound settlement layer first and that settlement layer will need to obtain some degree of generalization in programmability.
Bitcoin is still under active development and conservatively and very carefully adding new features.
Source: Attended one dev group meeting.
That said, I do think that it's like the DOS of cryptocurrencies.
Source: Attended one dev group meeting.
That said, I do think that it's like the DOS of cryptocurrencies.
Bitcoin is not under fully free "active" development when its technical spec is constrained by its social contract.
Besides, privacy is the important thing (no fungibility), and you will not be able to hide all that metadata anymore.
Besides, privacy is the important thing (no fungibility), and you will not be able to hide all that metadata anymore.
Bitcoin is an incredible technology. It can survive on its own. Bitcoin is an important piece of future money. Bitcoin is not the new internet protocol. The system is slow moving and hard to change. Bitcoin can be compared to ham radio. But it can interact with other systems. This is how Bitcoin is different from ham radio.
I see Bitcoin as the first puzzle piece. We're searching for more pieces to construct the future of money puzzle. I think a missing piece is a crypto with inflation. I started a project to explore this:
https://bitflate.org/
I see Bitcoin as the first puzzle piece. We're searching for more pieces to construct the future of money puzzle. I think a missing piece is a crypto with inflation. I started a project to explore this:
https://bitflate.org/
This does fit with what I think is the most interesting use case of bitcoin that I'd read about: A Ukrainian living in the Russian controlled portion of the country getting out with his wealth intact.
The border was controlled by corrupt Russian guards that would steal things of value. You could pass the border occasionally to visit family on the other side, but it was risky to take anything.
He put all his wealth into bitcoin, memorized his wallet seed words like his life depended on it, crossed the border with nothing, and then regenerated his wallet on the other side (and then presumably transferred the money back into a usable fiat currency/bank account).
I thought that was pretty cool.
It'd be interesting if the community put a guide together to make it easy for people that need to escape hostile countries with their wealth intact to do so, something I might try to do if I find some time to write it up.
The border was controlled by corrupt Russian guards that would steal things of value. You could pass the border occasionally to visit family on the other side, but it was risky to take anything.
He put all his wealth into bitcoin, memorized his wallet seed words like his life depended on it, crossed the border with nothing, and then regenerated his wallet on the other side (and then presumably transferred the money back into a usable fiat currency/bank account).
I thought that was pretty cool.
It'd be interesting if the community put a guide together to make it easy for people that need to escape hostile countries with their wealth intact to do so, something I might try to do if I find some time to write it up.
Sounds like a fake propaganda story (oh look, those corrupt Russian siloviks! every single one of them!). There is A TON of Ukrainian workers (zarobitchane) in Russia who not always work legally and they trivially wire funds back to their relatives. (Fun fact: currently foreign workers is one of the most important income sources of foreign currency for the Ukrainian state) Even if we assume that Crimean border guards were indeed so corrupt, it's trivial to go from Crimea (I assume you talk about it) to the Russian mainland, since there are virtually no checks between them, and then back to Ukraine.
One possibility which could make this story more trustworthy is that those funds were illegal (e.g. bribes accumulated during Ukraninan rule), so the person would want to transfer them as discretely as possible. I think Bitcoin is widely used for similar purposes in China, as it's (was?) one of the best ways to move abroad illegally acquired funds.
One possibility which could make this story more trustworthy is that those funds were illegal (e.g. bribes accumulated during Ukraninan rule), so the person would want to transfer them as discretely as possible. I think Bitcoin is widely used for similar purposes in China, as it's (was?) one of the best ways to move abroad illegally acquired funds.
I found where I think I had originally read it: https://www.forbes.com/sites/tatianakoffman/2020/06/13/why-b...
It sounded plausible enough to me.
Relevant quote is below:
"""
Bitcoin is a protest against corruption.
Naval Ravikant, founder of Angelist once tweeted: "Bitcoin is a tool for freeing humanity from oligarchs and tyrants, dressed up as a get-rich-quick scheme."
With this perspective in mind, it’s no surprise that Bitcoin has a much higher rate of adoption in countries that have a history of government oppression - Germany, China, Venezuela - and a lower rate of adoption in the U.S. Americans are much more likely to have faith in their U.S. Dollar than a new cryptocurrency.
One story was shared with me anonymously by a Ukranian software engineer - let’s call him Greg. In 2014, what began as a peaceful protest in Ukraine quickly grew into a civil war, riddling the country with violence and unrest. As expected, due to political instability, the local currency was devalued by 70%. Greg lost his job and was looking for a way to escape the rebellion.
“There was nothing left for me there, I was surrounded by death and destruction. I started plotting an escape.”
Airports and roads were guarded by soldiers to prevent people from fleeing - temporary visits to family, however, were permitted by car. It was well known that many of the officials charged with guarding the borders were corrupt and would confiscate money and valuables at checkpoints. And so Greg, having kept most of his savings in USD, decided to trade it all for Bitcoin. He memorized the 12 words from his seed phrase like “his life depended on it” and ran, with nothing but a small backpack on his person, managing to escape with all of his wealth intact.
[For anyone new to Bitcoin, you can access a Bitcoin wallet from anywhere on the internet as long as you know your seed phrase.]
There are countless stories like Greg’s. Tales of people fleeing persecution in Eastern Europe, South America and Africa, using Bitcoin as a means to carry value with them. For many, Bitcoin is what saved their wealth and, by extension, their life.
Skeptics often use the argument that Bitcoin “isn’t backed by anything.” But this is an inherently privileged North American view. Bitcoin is backed by a demand for financial freedom, for an asset outside the control of governments, and one that cannot be confiscated easily.
"""
It sounded plausible enough to me.
Relevant quote is below:
"""
Bitcoin is a protest against corruption.
Naval Ravikant, founder of Angelist once tweeted: "Bitcoin is a tool for freeing humanity from oligarchs and tyrants, dressed up as a get-rich-quick scheme."
With this perspective in mind, it’s no surprise that Bitcoin has a much higher rate of adoption in countries that have a history of government oppression - Germany, China, Venezuela - and a lower rate of adoption in the U.S. Americans are much more likely to have faith in their U.S. Dollar than a new cryptocurrency.
One story was shared with me anonymously by a Ukranian software engineer - let’s call him Greg. In 2014, what began as a peaceful protest in Ukraine quickly grew into a civil war, riddling the country with violence and unrest. As expected, due to political instability, the local currency was devalued by 70%. Greg lost his job and was looking for a way to escape the rebellion.
“There was nothing left for me there, I was surrounded by death and destruction. I started plotting an escape.”
Airports and roads were guarded by soldiers to prevent people from fleeing - temporary visits to family, however, were permitted by car. It was well known that many of the officials charged with guarding the borders were corrupt and would confiscate money and valuables at checkpoints. And so Greg, having kept most of his savings in USD, decided to trade it all for Bitcoin. He memorized the 12 words from his seed phrase like “his life depended on it” and ran, with nothing but a small backpack on his person, managing to escape with all of his wealth intact.
[For anyone new to Bitcoin, you can access a Bitcoin wallet from anywhere on the internet as long as you know your seed phrase.]
There are countless stories like Greg’s. Tales of people fleeing persecution in Eastern Europe, South America and Africa, using Bitcoin as a means to carry value with them. For many, Bitcoin is what saved their wealth and, by extension, their life.
Skeptics often use the argument that Bitcoin “isn’t backed by anything.” But this is an inherently privileged North American view. Bitcoin is backed by a demand for financial freedom, for an asset outside the control of governments, and one that cannot be confiscated easily.
"""
You wrote "in the Russian controlled portion of the country" and "corrupt Russian guards", while the cited paper does not even contain word "Russia" in it and instead it rightfully mentions a "civil war". And as far as gossips go, when you pass between LNR/DNR controlled territory and Ukrainian controlled one shakedown can easily happen on both sides (and it was especially true in chaotic 2014).
And it looks a bit strange for this "anonymous software engineer" to keep all his savings in USD cache. Usually you get paid via bank transfers and don't bother with retrieving cache from ATMs, so his funds would be automatically accessible on Ukraninan side. And even if he does not trust his domestic banking system (which arguably a good decision), then it's fairly easy to open an account in an EU bank (e.g. in Estonia). Also he would have to find those willing to trade cache USD for Bitcoins in the midst of a developing military conflict (which is in itself a very risky transaction).
And it looks a bit strange for this "anonymous software engineer" to keep all his savings in USD cache. Usually you get paid via bank transfers and don't bother with retrieving cache from ATMs, so his funds would be automatically accessible on Ukraninan side. And even if he does not trust his domestic banking system (which arguably a good decision), then it's fairly easy to open an account in an EU bank (e.g. in Estonia). Also he would have to find those willing to trade cache USD for Bitcoins in the midst of a developing military conflict (which is in itself a very risky transaction).
Just as a warning to people that might want to try this, a lot of work has gone into monitoring the addresses tied to private keys created from potential words.
For example, if you use a word in the (infamous) rockyou wordlist as your private key & send money to the corresponding public key, it will not be your money for long.
If it were me, I think I'd be sneaking out an SD card in a condom in my prison wallet.
For example, if you use a word in the (infamous) rockyou wordlist as your private key & send money to the corresponding public key, it will not be your money for long.
If it were me, I think I'd be sneaking out an SD card in a condom in my prison wallet.
BIP39 (https://github.com/bitcoin/bips/blob/master/bip-0039.mediawi...) mnemonics are the industry standard for deriving keys. If you use enough words (the standard will not let you use less than 12), then you are completely fine.
The problem is if you come up with the words yourself, you are most likely to screw up. So people should be aware that they should use a random number generator.
If you wallet is using the BIP39 standard you just memorize the 12-word phrase. The words come from the key, not vice versa.
Also, you can get by with just memorizing one phrase, because unlimited addresses are tied sequentially to a single phrase.
Also, you can get by with just memorizing one phrase, because unlimited addresses are tied sequentially to a single phrase.
Brainwallets, where you choose the phrase that unlocks the wallet, are a bad idea for this reason. Plenty of people have lost a lot of money from trying clever things like using their favorite line from a piece of media.
However, if you have a seed phrase of 12 randomly-chosen words (that were properly randomly chosen by software, not a person), then that's enough to be safe.
However, if you have a seed phrase of 12 randomly-chosen words (that were properly randomly chosen by software, not a person), then that's enough to be safe.
You could also store your private key on an RFID tag implanted under your skin (also MRI safe).
Security through obscurity is best here. Just shift all the digits of your key by some secret (but very simple) algorithm and store in google drive.
WTF, do not do this.
You can use real encryption, like GPG in symmetric mode with a memorized passphrase that gets properly key-stretched. Then store the resulting uniform random-looking blob in image metadata or whatever.
Obscurity is to prevent them from asking you what's in an obviously encrypted file like "bitcoin_wallet.dat.gpg," it's not for actual protection if they do happen to focus on you.
You can use real encryption, like GPG in symmetric mode with a memorized passphrase that gets properly key-stretched. Then store the resulting uniform random-looking blob in image metadata or whatever.
Obscurity is to prevent them from asking you what's in an obviously encrypted file like "bitcoin_wallet.dat.gpg," it's not for actual protection if they do happen to focus on you.
> Then store the resulting uniform random-looking blob in image metadata or whatever.
Steganography is still security through obscurity. I don't see how it's any more secure than storing a manipulated key in plain text, especially if you are competent. If it were me I would just xor my address with a key of the same length (correcthorsebatterystaple-esque) and then xor it back out on the other side.
How would you even know it was a bitcoin wallet address vs. something else?
Or even write a letter to someone, where the second letter of the first word of every paragraph form the wallet address.
Steganography is still security through obscurity. I don't see how it's any more secure than storing a manipulated key in plain text, especially if you are competent. If it were me I would just xor my address with a key of the same length (correcthorsebatterystaple-esque) and then xor it back out on the other side.
How would you even know it was a bitcoin wallet address vs. something else?
Or even write a letter to someone, where the second letter of the first word of every paragraph form the wallet address.
> Steganography is still security through obscurity.
It doesn't have to be. Maybe that's where our misunderstanding is coming from.
The method I'm suggesting is this:
1) Generate a good passphrase and memorize it.
2) Use a strong key-stretching algorithm like pbkdf2 to generate a symmetric encryption key from the passphrase.
3) Use a strong encryption algorithm like aes-256 to encrypt your bitcoin wallet using the key from step 2.
4) Use steganographic techniques to hide the ciphertext from step 3 in an image, email, executable, pdf, etc.
5) Walk across the border carrying the hidden ciphertext on a computer or a disk, and with the passphrase in your brain.
This is not security through obscurity, this is hiding the fact that you're carrying a bitcoin wallet across a border through obscurity.
The actual wallet is still protected using strong cryptography. You'd be perfectly safe publishing the ciphertext from step 3 online, or mailing a copy to the White House, because the protection comes from the computational guarantees provided by strong cryptography, and by your knowledge that nothing derived from key material was ever published or transmitted.
It's safer to rely on strong cryptography as your fallback in case the steganography is discovered than to assume that the NSA can't figure out why you capitalized every third word in your last twenty emails to yourself. If they're going to do that anyway, let them discover your ciphertext, not your key.
It doesn't have to be. Maybe that's where our misunderstanding is coming from.
The method I'm suggesting is this:
1) Generate a good passphrase and memorize it.
2) Use a strong key-stretching algorithm like pbkdf2 to generate a symmetric encryption key from the passphrase.
3) Use a strong encryption algorithm like aes-256 to encrypt your bitcoin wallet using the key from step 2.
4) Use steganographic techniques to hide the ciphertext from step 3 in an image, email, executable, pdf, etc.
5) Walk across the border carrying the hidden ciphertext on a computer or a disk, and with the passphrase in your brain.
This is not security through obscurity, this is hiding the fact that you're carrying a bitcoin wallet across a border through obscurity.
The actual wallet is still protected using strong cryptography. You'd be perfectly safe publishing the ciphertext from step 3 online, or mailing a copy to the White House, because the protection comes from the computational guarantees provided by strong cryptography, and by your knowledge that nothing derived from key material was ever published or transmitted.
It's safer to rely on strong cryptography as your fallback in case the steganography is discovered than to assume that the NSA can't figure out why you capitalized every third word in your last twenty emails to yourself. If they're going to do that anyway, let them discover your ciphertext, not your key.
> 3) Use a strong encryption algorithm like aes-256 to encrypt your bitcoin wallet using the key from step 2.
bitcoin wallet private key is 256 bits. Why not just sha256 hash a password and xor it with the private key? Seems like a decent one time pad to me and much simpler than your approach.
And before you say how easily sha256 passwords are brute-forced (they aren't if you pick a password longer than, say, 20 characters) the attacker would need to know so many things that it is unreasonable to assume they would even try that. They would need to know a) my bitcoin private key was xored with a OTP b) the OTP was generated using sha256 c) anything else I did
> 4) Use steganographic techniques to hide the ciphertext from step 3 in an image, email, executable, pdf, etc.
If I were the leader of a totalitarian regime, I would almost certainly make my country's great firewall have extensive anti-steganographic measures. Any common file formats used for smuggling information that pass through the great firewall must first have all of its padding bits zeroed before continuing to its destination. If people start abusing metadata, metadata should be zeroed as well.
> 5) Walk across the border carrying the hidden ciphertext on a computer or a disk, and with the passphrase in your brain
Didn't GP say they take everything of value at the border? That would include computers and disks. "You could pass the border occasionally to visit family on the other side, but it was risky to take anything."
bitcoin wallet private key is 256 bits. Why not just sha256 hash a password and xor it with the private key? Seems like a decent one time pad to me and much simpler than your approach.
And before you say how easily sha256 passwords are brute-forced (they aren't if you pick a password longer than, say, 20 characters) the attacker would need to know so many things that it is unreasonable to assume they would even try that. They would need to know a) my bitcoin private key was xored with a OTP b) the OTP was generated using sha256 c) anything else I did
> 4) Use steganographic techniques to hide the ciphertext from step 3 in an image, email, executable, pdf, etc.
If I were the leader of a totalitarian regime, I would almost certainly make my country's great firewall have extensive anti-steganographic measures. Any common file formats used for smuggling information that pass through the great firewall must first have all of its padding bits zeroed before continuing to its destination. If people start abusing metadata, metadata should be zeroed as well.
> 5) Walk across the border carrying the hidden ciphertext on a computer or a disk, and with the passphrase in your brain
Didn't GP say they take everything of value at the border? That would include computers and disks. "You could pass the border occasionally to visit family on the other side, but it was risky to take anything."
> I don't see how it's any more secure than storing a manipulated key in plain text
You don't see how not storing the key is more secure than storing the key? I'm suggesting you memorize the key, and only store the ciphertext.
> I would just xor my address with a key of the same length (correcthorsebatterystaple-esque) and then xor it back out on the other side
This would fail a statistical uniformity test, and your adversary would be able to figure out that something was hiding there, and might even be able to extract parts of your key. In order to do this safely, you'd need to whiten your "correcthorsebatterystaple-esque" key first.
Or better yet, you shoud not even consider doing this and use a key-stretcher instead. Because there are a thousand other mistakes that you won't even know you're making that are completely avoidable.
You don't see how not storing the key is more secure than storing the key? I'm suggesting you memorize the key, and only store the ciphertext.
> I would just xor my address with a key of the same length (correcthorsebatterystaple-esque) and then xor it back out on the other side
This would fail a statistical uniformity test, and your adversary would be able to figure out that something was hiding there, and might even be able to extract parts of your key. In order to do this safely, you'd need to whiten your "correcthorsebatterystaple-esque" key first.
Or better yet, you shoud not even consider doing this and use a key-stretcher instead. Because there are a thousand other mistakes that you won't even know you're making that are completely avoidable.
> You don't see how not storing the key is more secure than storing the key? I'm suggesting you memorize the key, and only store the ciphertext.
And when the border police see encrypted files and demand the key so they can examine further?
> This would fail a statistical uniformity test, and your adversary would be able to figure out that something was hiding there, and might even be able to extract parts of your key. In order to do this safely, you'd need to whiten your "correcthorsebatterystaple-esque" key first.
I'm telling you, I could invent an obscure security scheme that NSA couldn't crack in a million years because they wouldn't even know where to start. Heck, I could do it with a 1 character password
1. select 1 character password p
2. Take sha256(sha1(md5(p))) 1 million times
3. xor result with bitcoin wallet private key
Bam, easy to remember, impossible to crack (unless you know the secret formula, which you won't)
However, all this is moot if the border police demand a key upon seeing encrypted files. So actually I think the best approach is to hide the (encrypted) private key as innocuous words in emails.
And when the border police see encrypted files and demand the key so they can examine further?
> This would fail a statistical uniformity test, and your adversary would be able to figure out that something was hiding there, and might even be able to extract parts of your key. In order to do this safely, you'd need to whiten your "correcthorsebatterystaple-esque" key first.
I'm telling you, I could invent an obscure security scheme that NSA couldn't crack in a million years because they wouldn't even know where to start. Heck, I could do it with a 1 character password
1. select 1 character password p
2. Take sha256(sha1(md5(p))) 1 million times
3. xor result with bitcoin wallet private key
Bam, easy to remember, impossible to crack (unless you know the secret formula, which you won't)
However, all this is moot if the border police demand a key upon seeing encrypted files. So actually I think the best approach is to hide the (encrypted) private key as innocuous words in emails.
> I'm telling you, I could invent an obscure security scheme that NSA couldn't crack in a million years because they wouldn't even know where to start.
Oh, boy.
First of all, you didn't. You invented a broken scheme, and then when I pointed this out, you invented a new one without stopping to think about why your first scheme was broken, or why you didn't catch your mistake the first time.
> easy to remember, impossible to crack (unless you know the secret formula, which you won't)
That's not at all how this works.
You're assuming that your "secret formula" automatically provides an arbitrary amount of secrecy. It doesn't. Every operation that you choose to apply can provide a certain number of equivalent bits of secrecy (it's fewer bits than you think), or, if chosen poorly, can completely wipe away any secrecy you've built up thus far.
Unless you can provide a proof that your method is sound, it isn't. Based on comments you've made elsewhere, I have next to zero confidence in your ability to build a construct like this correctly, save for sheer dumb luck. All you've done is inform everybody here that you've not a cryptographer.
> However, all this is moot if the border police demand a key upon seeing encrypted files. So actually I think the best approach is to hide the (encrypted) private key as innocuous words in emails.
The whole point of this discussion was to point out that you can hide strongly encrypted ciphertext using weak steganographic techniques so that the police aren't going to see encrypted files, and aren't likely to suspect a hidden message.
The point of using strong cryptography is so that even if they do manage to suspect a hidden message:
1) You're not making their job needlessly easy by also giving them the key by mistakenly thinking that you can hide it effectively. You can't.
2) You can get a strong key out of a passphrase that you can easily memorize, so hiding the key isn't even necessary in the first place.
> And when the border police see encrypted files and demand the key so they can examine further?
They're not going to see encrypted files.
Hide ONLY the ciphertext. Memorize the key.
It's simpler, provides more bits of secrecy, and is easier to validate than some harebrained secret-chained-hash scheme.
Oh, boy.
First of all, you didn't. You invented a broken scheme, and then when I pointed this out, you invented a new one without stopping to think about why your first scheme was broken, or why you didn't catch your mistake the first time.
> easy to remember, impossible to crack (unless you know the secret formula, which you won't)
That's not at all how this works.
You're assuming that your "secret formula" automatically provides an arbitrary amount of secrecy. It doesn't. Every operation that you choose to apply can provide a certain number of equivalent bits of secrecy (it's fewer bits than you think), or, if chosen poorly, can completely wipe away any secrecy you've built up thus far.
Unless you can provide a proof that your method is sound, it isn't. Based on comments you've made elsewhere, I have next to zero confidence in your ability to build a construct like this correctly, save for sheer dumb luck. All you've done is inform everybody here that you've not a cryptographer.
> However, all this is moot if the border police demand a key upon seeing encrypted files. So actually I think the best approach is to hide the (encrypted) private key as innocuous words in emails.
The whole point of this discussion was to point out that you can hide strongly encrypted ciphertext using weak steganographic techniques so that the police aren't going to see encrypted files, and aren't likely to suspect a hidden message.
The point of using strong cryptography is so that even if they do manage to suspect a hidden message:
1) You're not making their job needlessly easy by also giving them the key by mistakenly thinking that you can hide it effectively. You can't.
2) You can get a strong key out of a passphrase that you can easily memorize, so hiding the key isn't even necessary in the first place.
> And when the border police see encrypted files and demand the key so they can examine further?
They're not going to see encrypted files.
Hide ONLY the ciphertext. Memorize the key.
It's simpler, provides more bits of secrecy, and is easier to validate than some harebrained secret-chained-hash scheme.
> You're assuming that your "secret formula" automatically provides an arbitrary amount of secrecy. It doesn't
I disagree. My assumption is that sha256 digests are uniformly random. Thus, xor-ing a sha256 digest with something of the same length is equivalent to a one time pad, which is uncrackable. And since I'm only crossing the border once, it works perfectly. Now, I only need to hide the ciphertext and protect the input to the sha256 digest, which I do by selecting an algorithm with sufficient entropy that it will never be guessed.
> Unless you can provide a proof that your method is sound, it isn't.
My method is sound because it's a one time pad[0] which is sound.
> It's simpler, provides more bits of secrecy, and is easier to validate than some harebrained secret-chained-hash scheme.
I disagree that it is simpler. I know how to xor two things together. Downloading openssl CLI or kali linux or whatever I need to do it "the right way" would take hours of research to make sure I got it right. I know I can get xor right.
Don't let perfect be the enemy of good. If this is a one time border crossing... why invest countless hours researching the perfect solution when hiding the key in the words of email using something like black magic[1] works just as well, stays just as hidden, and doesn't break if your country decides to implement stenography purging techniques on files (zeroing out padding bits/metadata on common formats used for steganography).
[0] https://en.wikipedia.org/wiki/One-time_pad
[1] https://www.wikihow.com/Play-Black-Magic
I disagree. My assumption is that sha256 digests are uniformly random. Thus, xor-ing a sha256 digest with something of the same length is equivalent to a one time pad, which is uncrackable. And since I'm only crossing the border once, it works perfectly. Now, I only need to hide the ciphertext and protect the input to the sha256 digest, which I do by selecting an algorithm with sufficient entropy that it will never be guessed.
> Unless you can provide a proof that your method is sound, it isn't.
My method is sound because it's a one time pad[0] which is sound.
> It's simpler, provides more bits of secrecy, and is easier to validate than some harebrained secret-chained-hash scheme.
I disagree that it is simpler. I know how to xor two things together. Downloading openssl CLI or kali linux or whatever I need to do it "the right way" would take hours of research to make sure I got it right. I know I can get xor right.
Don't let perfect be the enemy of good. If this is a one time border crossing... why invest countless hours researching the perfect solution when hiding the key in the words of email using something like black magic[1] works just as well, stays just as hidden, and doesn't break if your country decides to implement stenography purging techniques on files (zeroing out padding bits/metadata on common formats used for steganography).
[0] https://en.wikipedia.org/wiki/One-time_pad
[1] https://www.wikihow.com/Play-Black-Magic
Are you aware that the "my homebrew crypto system is functionally equivalent to a one-time pad, and is therefore perfect" argument is so overused by cranks that it's considered a cliche among actual cryptographers?
[1] https://twitter.com/mattblaze/status/580823914340880384
[2] https://www.schneier.com/crypto-gram/archives/1999/0215.html... (#6)
[3] https://freedom-to-tinker.com/2015/03/25/be-wary-of-one-time...
[4] http://maldr0id.blogspot.com/2015/05/crystalline-cipher-and-...
I don't even know how to respond anymore. You must be trolling.
Key-stretching algorithms are better than your chain-of-hashes because each iteration of a key-stretcher is deliberately CPU and memory intensive, whereas hashes are designed to be fast and efficient. So whatever clever scheme you think you've come up with to turn a single letter into an adequate key using secret combinations of chained hashes -- congratulations... you're doing what a key-stretcher does, but badly, because your scheme is much easier to brute-force.
Look, there are a lot of really subtle things that you need to be aware of when designing cryptosystems that even professional cryptographers get wrong sometimes, and exploiting these mistakes in a way that results in a complete break is way easier and more common than most people think. This is why "Don't roll your own crypto" is considered a best practice. Not because it isn't possible to come up with a simpler scheme. But because DIY secrecy is a siren song, and most people who are tempted by it are clever enough to come up with something that looks like it works, but not clever enough to know how to verify it properly.
Your goal shouldn't be simplicity, or trying to map an algorithm to a one-time pad. Your goal should be to use the standard tools in a way that professional cryptographers think is least likely to be subtly broken.
[1] https://twitter.com/mattblaze/status/580823914340880384
[2] https://www.schneier.com/crypto-gram/archives/1999/0215.html... (#6)
[3] https://freedom-to-tinker.com/2015/03/25/be-wary-of-one-time...
[4] http://maldr0id.blogspot.com/2015/05/crystalline-cipher-and-...
I don't even know how to respond anymore. You must be trolling.
Key-stretching algorithms are better than your chain-of-hashes because each iteration of a key-stretcher is deliberately CPU and memory intensive, whereas hashes are designed to be fast and efficient. So whatever clever scheme you think you've come up with to turn a single letter into an adequate key using secret combinations of chained hashes -- congratulations... you're doing what a key-stretcher does, but badly, because your scheme is much easier to brute-force.
Look, there are a lot of really subtle things that you need to be aware of when designing cryptosystems that even professional cryptographers get wrong sometimes, and exploiting these mistakes in a way that results in a complete break is way easier and more common than most people think. This is why "Don't roll your own crypto" is considered a best practice. Not because it isn't possible to come up with a simpler scheme. But because DIY secrecy is a siren song, and most people who are tempted by it are clever enough to come up with something that looks like it works, but not clever enough to know how to verify it properly.
Your goal shouldn't be simplicity, or trying to map an algorithm to a one-time pad. Your goal should be to use the standard tools in a way that professional cryptographers think is least likely to be subtly broken.
> So whatever clever scheme you think you've come up with to turn a single letter into an adequate key using secret combinations of chained hashes -- congratulations... you're doing what a key-stretcher does, but badly, because your scheme is much easier to brute-force.
Did it get my money across the border without requiring me to get me a master's degree in cyber security? Probably. Will I have to do this smuggling thing a bunch of times? No.
Your attitude is like lambasting someone who writes a quick and dirty python script that gets the job done because it's full of vulnerabilities and wasn't written perfectly in Rust and doesn't scale to 10 million connections. So what.
If I had millions of dollars I was smuggling over the border maybe I'd spend hundreds of hours making sure I got the security perfect using industry standards.
Otherwise, I think just avoiding being the low hanging fruit is "good enough." And yeah, even "crank crypto" is good enough most of the time. You think someone like NSA would spend any significant amount of time/resources trying to crack through imperfect crypto schemes to get at the paltry payouts of individual fortunes?
Did it get my money across the border without requiring me to get me a master's degree in cyber security? Probably. Will I have to do this smuggling thing a bunch of times? No.
Your attitude is like lambasting someone who writes a quick and dirty python script that gets the job done because it's full of vulnerabilities and wasn't written perfectly in Rust and doesn't scale to 10 million connections. So what.
If I had millions of dollars I was smuggling over the border maybe I'd spend hundreds of hours making sure I got the security perfect using industry standards.
Otherwise, I think just avoiding being the low hanging fruit is "good enough." And yeah, even "crank crypto" is good enough most of the time. You think someone like NSA would spend any significant amount of time/resources trying to crack through imperfect crypto schemes to get at the paltry payouts of individual fortunes?
Steganography is for hiding the fact that you're hiding something, it's not for protecting the thing that you're hiding. You still need real cryptography to do that. You can encode a real cryptographic key in a relatively short passphrase that's easy to memorize using key-stretching. You can then use this passphrase to strongly encrypt as much data as you want.
The only thing you should be hiding are the encrypted blocks. If they manage to find these blocks (which they absolutely might! steganography is nowhere near perfect), they should still be encrypted, and they should still look like uniform random noise.
You're not supposed to hide the key!
The only thing you should be hiding are the encrypted blocks. If they manage to find these blocks (which they absolutely might! steganography is nowhere near perfect), they should still be encrypted, and they should still look like uniform random noise.
You're not supposed to hide the key!
Sure, I can agree with that. I probably wouldn't choose image-based steganography though because for all I know the country has a great firewall that scrubs all outgoing image metadata
>How would you even know it was a bitcoin wallet address vs. something else?
The fact you talk about doing that sort of thing would be a big clue.
The benefit of using proper symmetric encryption (like GPG, or even better, age[0]) is that even if you talk about or even fully explain your process, then it's still secure as long as you don't post your key.
[0] https://age-encryption.org/
The fact you talk about doing that sort of thing would be a big clue.
The benefit of using proper symmetric encryption (like GPG, or even better, age[0]) is that even if you talk about or even fully explain your process, then it's still secure as long as you don't post your key.
[0] https://age-encryption.org/
If you use "proper symmetric encryption" you have the same problem as before: how to smuggle the key over the border assuming they will search your person and online accounts ...?
Oh sorry, I think I'd lost that bit of context. This scenario of hiding a password during inspection is probably the main place where "security through obscurity" has validity.
A big benefit of encrypting your cryptocurrency private key with a password and then hiding/obscuring that password instead of the raw private key itself is that good encryption will apply key-stretching to the password, making it harder to brute-force. If an attacker finds a random-looking value in your stuff, and believes that the value might be your bitcoin private key XORed by a short string, they it's very cheap for them to check whether each result is a valid bitcoin private key. There might even be structure in the bitcoin private key format that helps gives away the XOR key. But if they know your bitcoin private key (or something else) is encrypted by Age, and they find a random-looking value that might be your password XORed by a short string, then because Age uses scrypt on the password, then it will take longer for them to verify each attempt against the ciphertext.
A big benefit of encrypting your cryptocurrency private key with a password and then hiding/obscuring that password instead of the raw private key itself is that good encryption will apply key-stretching to the password, making it harder to brute-force. If an attacker finds a random-looking value in your stuff, and believes that the value might be your bitcoin private key XORed by a short string, they it's very cheap for them to check whether each result is a valid bitcoin private key. There might even be structure in the bitcoin private key format that helps gives away the XOR key. But if they know your bitcoin private key (or something else) is encrypted by Age, and they find a random-looking value that might be your password XORed by a short string, then because Age uses scrypt on the password, then it will take longer for them to verify each attempt against the ciphertext.
It's not difficult to memorize one reasonably good passphrase, and there are well-known key-stretching algorithms that are understood to provide however many bits you need of actual security from this passphrase.
> Just shift all the digits of your key by some secret (but very simple) algorithm
You are basically suggesting that people roll their own crypto here. Or pseudo-crypto, or stego, or whatever you want to call it.
Don't tell people to "Just do X" when the ambiguity in the methods that you describe leave >90% odds that the result of their work won't even pass a statistical uniformity test. This leaks the key. Once your adversary realizes that you made some sort of mistake here, they can write software to make their attack orders of magnitude easier than it would otherwise be.
> Just shift all the digits of your key by some secret (but very simple) algorithm
You are basically suggesting that people roll their own crypto here. Or pseudo-crypto, or stego, or whatever you want to call it.
Don't tell people to "Just do X" when the ambiguity in the methods that you describe leave >90% odds that the result of their work won't even pass a statistical uniformity test. This leaks the key. Once your adversary realizes that you made some sort of mistake here, they can write software to make their attack orders of magnitude easier than it would otherwise be.
> Once your adversary realizes that you made some sort of mistake here, they can write software to
"Writing software" takes time, and by then all the money in the wallet would be gone
"Writing software" takes time, and by then all the money in the wallet would be gone
While you're in a gulag?
I don't understand why you're doubling down on this. There's an easy, correct way to do this that doesn't have the same vulnerabilities as the method you're describing. The tools to do this already exist. Don't XOR your fucking key bits into a jpeg... it's more work, and the probability of doing it wrong is super high. You're just asking for trouble here.
I don't understand why you're doubling down on this. There's an easy, correct way to do this that doesn't have the same vulnerabilities as the method you're describing. The tools to do this already exist. Don't XOR your fucking key bits into a jpeg... it's more work, and the probability of doing it wrong is super high. You're just asking for trouble here.
> While you're in a gulag?
Well if you are in a gulag, your Bitcoins should be the least of your concerns.
> There's an easy, correct way to do this that doesn't have the same vulnerabilities as the method you're describing
Sorry, but I don't believe you. What is this "easy, correct" way of smuggling your bitcoins over the border that a) won't raise suspicion and get you thrown into a gulag b) doesn't require you to memorize the entire private key?
Do whatever you want, you have to add obscurity layer(s) to the scheme at some point. It doesn't matter if you are using perfect crypto if said crypto draws attention to you at the border.
What are my chances of being caught if I (for example) encode the private key into several emails using a scheme only I know? Zero. I'm not saying this will work at scale for everyone, but it is 100% guaranteed to work for me.
Well if you are in a gulag, your Bitcoins should be the least of your concerns.
> There's an easy, correct way to do this that doesn't have the same vulnerabilities as the method you're describing
Sorry, but I don't believe you. What is this "easy, correct" way of smuggling your bitcoins over the border that a) won't raise suspicion and get you thrown into a gulag b) doesn't require you to memorize the entire private key?
Do whatever you want, you have to add obscurity layer(s) to the scheme at some point. It doesn't matter if you are using perfect crypto if said crypto draws attention to you at the border.
What are my chances of being caught if I (for example) encode the private key into several emails using a scheme only I know? Zero. I'm not saying this will work at scale for everyone, but it is 100% guaranteed to work for me.
You are wrong, please remove this comment.
Something about this story is fishy. If he could put his money into bitcoin, I'm assuming he needed to digitize his wealth somehow. At that point, why not just do Paypal or ACH?
Paypal is not really in that many countries... And I think ACH is US only?
Also BTC is exchanged to physical cash since the early days. Nowadays BTC ATM count is in the thousands: https://coinatmradar.com/charts/growth/
Also BTC is exchanged to physical cash since the early days. Nowadays BTC ATM count is in the thousands: https://coinatmradar.com/charts/growth/
Yes, ACH is US-only. Other countries have similar systems but they are on-record and the banking system can withhold or deny transfers... or even tax them on behalf of your government.
US or international banking sanctions on the Russian controlled part of Ukraine might make that impossible.
Services such as localbitcoins, where you can buy btc in person are available basically everywhere.
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With BTC that is pretty trivial thing to do... I think I saw guides already 8-9 years ago for that. Haven't really thought about it but I think it still works pretty much the same. Google brainwallet.
Trivial for the average technical person like you and me maybe, but not so trivial for the non-technical person who's trying to escape X authoritarian country.
Even for us the risk of messing up and losing all of your wealth makes it quite scary.
Even for us the risk of messing up and losing all of your wealth makes it quite scary.
Well, if you really need it there are much more incentives to learn it. I wouldn't really be good at explaining it since I don't have much motivation to even learn it myself, because I don't need it.
I don't think the tendency to make mistakes related on the technical skill level, but to a lot of other factors. For example, those who will forget the passphrases are not those for whom it is important, but more for those for who BTC is more like fun side-bet. They have bought some, forgotten about it, and when they’ll actually see the rising price and try to cash out, they have forgot some password or how did they set up the wallet.
I don't think the tendency to make mistakes related on the technical skill level, but to a lot of other factors. For example, those who will forget the passphrases are not those for whom it is important, but more for those for who BTC is more like fun side-bet. They have bought some, forgotten about it, and when they’ll actually see the rising price and try to cash out, they have forgot some password or how did they set up the wallet.
be aware most brainwallets are broken for today as most common passwords have been cracked and there is an upper limit (which clamps the maximum bits)
That cannot be real.
He has access to acquire, and move bitcoin, but not access to move it to an exchange, exchange it and deposit it? What?
This sounds like yet another made-up story about a use case for bitcoin that doesn't actually exist. They like making up stories that are yes technically not impossible, but would be the absolute worst way of doing what they want to accomplish.
Someone told me bitcoin enables negative exchange rates, because they happened to get currency fluctuations while the transaction was pending in bitcoin-intermediary exchange medium. No. That's not what happened. You could just have used CurrencyFair and been equally lucky. And end-to-end (back account to bank account) "old banking" likely would have been faster.
He has access to acquire, and move bitcoin, but not access to move it to an exchange, exchange it and deposit it? What?
This sounds like yet another made-up story about a use case for bitcoin that doesn't actually exist. They like making up stories that are yes technically not impossible, but would be the absolute worst way of doing what they want to accomplish.
Someone told me bitcoin enables negative exchange rates, because they happened to get currency fluctuations while the transaction was pending in bitcoin-intermediary exchange medium. No. That's not what happened. You could just have used CurrencyFair and been equally lucky. And end-to-end (back account to bank account) "old banking" likely would have been faster.
Why not throw the password over the fence? Ie. send it to a known drop or person with encryption.
That's also an option.
The thing that I don't understand is this. If Russia really decides to crack down, can't they just block all bitcoin traffic at the ISP level? Then how do you get BTC for your wealth? If you can't push your decentralized transaction, what do you actually have?
This is actually why they're launching bitcoin network satellites. https://blockstream.com/satellite/
> can't they just block all bitcoin traffic at the ISP level?
Are you serious? That block is trivial to avoid. VPN's are used mostly for porn and that kind of things, but with BTC you have clear financial incentive to work around those blocks.
Are you serious? That block is trivial to avoid. VPN's are used mostly for porn and that kind of things, but with BTC you have clear financial incentive to work around those blocks.
I think the game changed a while ago. It is not Bitcoin mainstream if/when something bad happens to the monetary system anymore.
It is many blockchain building alternatives to the monetary system. With Bitcoin being a digital gold, Ethereum being a decentralized central bank for layer two solutions running decentralized finance system (with stable coins and financial instruments) and perhaps other blockchains with different roles (payments anyone?).
It is many blockchain building alternatives to the monetary system. With Bitcoin being a digital gold, Ethereum being a decentralized central bank for layer two solutions running decentralized finance system (with stable coins and financial instruments) and perhaps other blockchains with different roles (payments anyone?).
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The crypto boom of 2017 was fueled by the launch of new trading platforms making it easy to trade for small investors. Most of those investors graduated to stocks and options, and never looked back. There has not been anything to increase the valuation of Bitcoin as an asset since then. I say this as someone holding >$10k of crypto assets in case I am wrong.
It was also fueled by market manipulation by one major bitcoin holder using Bitfinex[0]
0: https://www.cnbc.com/2019/11/04/study-single-anonymous-marke...
0: https://www.cnbc.com/2019/11/04/study-single-anonymous-marke...
Interesting, and I think I've heard that before, but your source doesn't seem that great.
Here's a report from the WSJ if you don't like CNBC:
https://www.wsj.com/articles/large-bitcoin-player-manipulate...
https://www.wsj.com/articles/large-bitcoin-player-manipulate...
I think you have this partially wrong. The crypto boom of 2017 was mostly fueled by people buying ETH in order to do ICOs.
I completely forgot about that. You are right. That must have been another factor with perhaps a bigger effect.
we still don't have options on bitcoin on major equities trading platforms.
Bitcoin being ham radio rather than the Internet would be problematic, because it is priced as if it's the heir to the Internet.
Bitcoin market cap is 171 billion, to say if that's lot or not so lot is quite hard to say. Personally however I don't think its that much - there are lots of individual companies worth more than that.
How many of them derive most of their revenue from the ham radio market?
Bitcoin market cap is really low if it were to become important to the Internet or the global financial system. 1-5 Trillion USD is a reasonable number if it were to serve a fraction of the world's trade or capitalize certain derivative products.
Like HAM radio, there is an incredible amount of metadata that is necessarily public.
(Seriously, any use case for which Bitcoin is a privacy solution puts Bitcoin up against strictly superior implementations of decentralized BFT value exchange protocols which I will not list as to not come across as a shill but are all things you have probably heard of).
(Seriously, any use case for which Bitcoin is a privacy solution puts Bitcoin up against strictly superior implementations of decentralized BFT value exchange protocols which I will not list as to not come across as a shill but are all things you have probably heard of).
I usually filter out articles when they make arguments like "no, x isn't going to y" either in the title or inside them. It shows that the author is passionately biased against what he is writing and wants also to show how right he is, traits that don't go well with factual realism
Most people think Bitcoin is a gambling chip, but it is first and foremost a new form of money. Let me repeat Bitcoin's benefits:
- You can pay anyone and been paid by anyone without anyone's permission. Not so with government money.
- Can't be counterfeited. You don't need to check the bills under UV light, no need to check if your gold bullion has lead or copper inside.
- Can't be inflated
- No one can take it from you. No one even knows that you have it and how much.
- Safe for merchants. If they got it, they got it, no risk of transaction being reversed because the shopper paid by a stolen credit card. Because of that, merchant doesn't need to ask for your name, phone number, home address and other information required to sue you in case of a fraud. So the shopper in turn enjoys better privacy.
- With second layer solution in place, such as Lightning Network, transactions will be fast, cheap and private. We are not there yet, but will be in a few years.
- You can pay anyone and been paid by anyone without anyone's permission. Not so with government money.
- Can't be counterfeited. You don't need to check the bills under UV light, no need to check if your gold bullion has lead or copper inside.
- Can't be inflated
- No one can take it from you. No one even knows that you have it and how much.
- Safe for merchants. If they got it, they got it, no risk of transaction being reversed because the shopper paid by a stolen credit card. Because of that, merchant doesn't need to ask for your name, phone number, home address and other information required to sue you in case of a fraud. So the shopper in turn enjoys better privacy.
- With second layer solution in place, such as Lightning Network, transactions will be fast, cheap and private. We are not there yet, but will be in a few years.
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I don't use bitcoin because every method of converting fiat to btc (or vice versa) takes an absurdly high fee. It's even worse when buying stablecoins.
I'm just waiting for whatever crypto/digital finance thing that comes along next that actually works and lead them to crash.
crypto is a nice idealistic idea. would work well, on a local level. however, since money is invested into crypto all logical thought goes out of the window, compared to radio operators. now people function by pure emotion. to tell someone they've invested into a bubble, is a personal attack. as we noticed, into the late 2017 crypto bubble.
There are massive flaws in the logic of this piece. In order for JP's metaphors to be accurate, the following would need to be true:
1) CELL PHONES CAUSE HURRICANES. 2) HOSTILE ALIENS ENSLAVE US EVERY YEAR.
First, let's not get hung up on Bitcoin alone. Bitcoin is designed for a specific use case (store of value) while other cryptocurrencies have different use cases (means of transaction, etc.). Bitcoin is also version 1 of a new category. So maybe Bitcoin will end up being like Netscape and will pass the baton to other cryptocurrencies which go on to be successful.
I will use JP's hurricane metaphor against him. He basically compares "mainstream" telecommunications (cell phones, 911 call centers) to fiat currency. He says mainstream telco is preferable to ham radios just like fiat currency is preferable to cryptocurrency. Fine. Here's where the metaphor breaks down:
Mainstream telco doesn't CAUSE hurricanes.
Fiat currency CAUSES (leads to) hyperinflation crises. If mainstream telco usage CAUSED hurricanes, I guarantee alternative communication methods would be given more attention.
JP also claims a breakdown in the fiat system would be similar in magnitude and probability to a situation where "hostile aliens have enslaved us." Wrong again.
There have been 34 episodes of hyperinflation in the LAST 30 YEARS (https://www.cato.org/sites/cato.org/files/pubs/pdf/workingpa...).
Just because you are lucky to live in a place where hurricanes haven't affected you (erm...Canada) doesn't mean hurricanes aren't a problem. Also, these "hurricanes" don't just hit the coast. Argentina had a population of around 30 million people when hyperinflation was raging in 1990, impoverishing millions in a matter of months.
In order for JP's model to be accurate, modern telecommunication equipment would cause hurricanes and hostile aliens would enslave us roughly every year (34 times in the last 30 years).
Bitcoin and other cryptocurrencies fix a little bug in fiat currencies where every so often ALL THE PEOPLE USING THAT CURRENCY ARE SWIFTLY IMPOVERISHED. I think it's worth keeping an eye on crypto.
1) CELL PHONES CAUSE HURRICANES. 2) HOSTILE ALIENS ENSLAVE US EVERY YEAR.
First, let's not get hung up on Bitcoin alone. Bitcoin is designed for a specific use case (store of value) while other cryptocurrencies have different use cases (means of transaction, etc.). Bitcoin is also version 1 of a new category. So maybe Bitcoin will end up being like Netscape and will pass the baton to other cryptocurrencies which go on to be successful.
I will use JP's hurricane metaphor against him. He basically compares "mainstream" telecommunications (cell phones, 911 call centers) to fiat currency. He says mainstream telco is preferable to ham radios just like fiat currency is preferable to cryptocurrency. Fine. Here's where the metaphor breaks down:
Mainstream telco doesn't CAUSE hurricanes.
Fiat currency CAUSES (leads to) hyperinflation crises. If mainstream telco usage CAUSED hurricanes, I guarantee alternative communication methods would be given more attention.
JP also claims a breakdown in the fiat system would be similar in magnitude and probability to a situation where "hostile aliens have enslaved us." Wrong again.
There have been 34 episodes of hyperinflation in the LAST 30 YEARS (https://www.cato.org/sites/cato.org/files/pubs/pdf/workingpa...).
Just because you are lucky to live in a place where hurricanes haven't affected you (erm...Canada) doesn't mean hurricanes aren't a problem. Also, these "hurricanes" don't just hit the coast. Argentina had a population of around 30 million people when hyperinflation was raging in 1990, impoverishing millions in a matter of months.
In order for JP's model to be accurate, modern telecommunication equipment would cause hurricanes and hostile aliens would enslave us roughly every year (34 times in the last 30 years).
Bitcoin and other cryptocurrencies fix a little bug in fiat currencies where every so often ALL THE PEOPLE USING THAT CURRENCY ARE SWIFTLY IMPOVERISHED. I think it's worth keeping an eye on crypto.
If Bitcoin is like ham radio, then Ethereum is more like the early internet.
I think Bitcoin is not at all like ham radio.
I think Bitcoin is a dangerous fad that just conjures money out of the pockets of rubes to enrich a few.
Bitcoin should die, and all the cryptocurrencies with it. They solve no relevant problem but they cost our society dearly.
I think Bitcoin is a dangerous fad that just conjures money out of the pockets of rubes to enrich a few.
Bitcoin should die, and all the cryptocurrencies with it. They solve no relevant problem but they cost our society dearly.
How do you explain decentralized finance and Ethereum? Anyone, anywhere, can have access to a financial system with zero barriers to entry. I'd say that's pretty useful.
Bitcoin is more like an environmentalist's worst nightmare.
Oh the good old "Most active and vocal Bitcoin fans are talking non-sense all the time so the Bitcoin is not that important" narrative.
bitcoin -> ham radio
ethereum -> computer
chainlink -> internet
Perfect analogy. Just like Ham Radio. Pretty cool but of little practical use.
"If five years from now everyone in the world has become a bitcoin user, that could only be because something very very bad has happened to the regular monetary system ... Surely no bitcoiner would actually want such a dark future."
That statement is absolutely true, as a conditional. But the logical fallacy it represents is "If X happens, that would be unthinkably bad. Therefore, X will not happen." (Similar thinking is behind coronavirus-denial and climate-change denial.)
I think that most hardcore Bitcoin aficionados (the group that's still in it, even now that the bubble has burst and you can't get rich off of it) would accept the above premise. If Bitcoin becomes successful, something seriously bad has happened to the monetary system.
The difference is that most hardcore Bitcoin investors also accept the premise that something seriously bad is going to happen to the monetary system. There's a very heavy overlap between folks who hodl Bitcoin and folks who believe that the Fed is going to continue to debase the dollar, we'll get hyperinflation, the government will collapse, and we'll all end up pledging allegiance to a variety of crypto-anarchist communes that conduct commerce through cryptocurrency. Many of them also include guns, stockpiles, and bug-out bunkers in their contingency planning. If you accept that premise, the goal is not "How do I get rich?", it's "How do I minimize the impact of this collapse to myself and give myself a leg up in the post-collapse world?"