
Speculation About The Eventual Death Of Bitcoin - bascule
http://tonyarcieri.com/the-death-of-bitcoin
======
GigabyteCoin
My hope for the Bitcoin blockchain died a few months ago when I realized that
all of the Bitcoin proponents on reddit were laughing at the re-design of an
old Bitcoin mining website. One I used to mine on before mining became
unprofitable for everybody but a few large-scale miners. "Too little, too
late!" they all chanted in unison. "Mining websites are dead!" they all
laughed. And then it hit me...

The fact that the fair distribution of the coin is dead means that the entire
blockchain will die imho. Bitcoin's price really exploded when the mining
scene was lucrative for everybody interested in the coin. It tapered off
rather quickly once mining became impossible for all but the few.

Why would anybody buy into Bitcoin now that one of it's original pomises of
decentralized mining has been broken?

Why would anybdoy buy into Bitcoin when it means only fattening the pockets of
a few (already rich) mining syndicates?

I certainly wouldn't, and I was a massive Bitcoin proponent for most of it's
life.

Many ideas that Bitcoin brought with it will live on, but the Bitcoin
blockchain in it's current implementation will "die" sooner rather than later
imho.

The fact that one can transfer value from point A to point B for next to
nothing and without government oversight is amazing. The fact that the
majority of Bitcoins that will ever exist are held by a few individuals (and
always will be while mining for the layman is dead) is not.

~~~
yc1010
You view bitcoin as as "investment" not a "tool" there in lies your problem.

"Why would anybdoy buy into Bitcoin when it means only fattening the pockets
of a few (already rich) mining syndicates?"

Replace Bitcoin with USD in above sentence and "mining syndicates" with
"banks"

~~~
GigabyteCoin
Nobody has to buy into the USD, it's already there, established. Bitcoin has
to be better than the established norm in order to succeed. It is in some
ways, don't get me wrong, that's true. But it still isn't perfect, and I
personally think a better implementation will succeed in the future.

Namely, one where the majority of "little people" can mine the coin. Or one
with a fair and equal distribution to at least hundreds of millions of people
(preferably billions) before the coin is launched.

Those were some of the founders original ideas, that anybody with a CPU could
mine the coin. And technology slowly took over...

------
dperfect
Most successful technologies didn't succeed because they are and always were
perfect; they succeeded because they were _good enough_ at the right time.

Who knows whether or not Bitcoin is past that threshold - time will tell. But
I have to wonder: is it really worse than the financial system we use right
now? Any argument against the use of Bitcoin is also indirectly arguing that
something else is better. What is better in this case? An altcoin? If so, I
haven't seen it yet - at least not in a way that puts Bitcoin in inadequate-
without-a-doubt territory.

Could you really write a bullet-proof case for using our current financial
system instead, especially if the roles were switched and we were coming from
something Bitcoin-like to a proposal for using fiat currency?

~~~
yc1010
The whole article seems written around "Stellar good, Bitcoin bad" premise,
when the author ignores that Stellar is basically Ripple with another name,
and we know how that ended up eh

~~~
skeuomorf
nitpick: While Stellar is a fork of Ripple, they have different consensus
protocols underneath. Stellar uses the (Stellar Consensus Protocol) [0] while
Ripple uses probabilistic voting. [1]

[0] [https://www.stellar.org/papers/stellar-consensus-
protocol.pd...](https://www.stellar.org/papers/stellar-consensus-protocol.pdf)

[1]
[https://ripple.com/files/ripple_consensus_whitepaper.pdf](https://ripple.com/files/ripple_consensus_whitepaper.pdf)

------
kushti
Bitcoin is far away from ideal from tech point of view:

1\. Transactions model with multiple inputs/outputs & scripts attached to both
sides is heavy(& scripting language had some critical bugs, see Bitcoins' CVE)

2\. Bitcoin's proof-of-work is far away from ideal Sybil-resistant anonymous
Byzantine Agreement solution as well.

3\. Bitcoin is centralized in all aspects. You need to trust ~10 mining
parties to join the network, centralization of holding also takes place(early
birds/central exchanges), development is highly centralized as well.

So eventually it will be replaced with successor(s). After all, even Satoshi
thought Bitcoin is experiment, not the final solution to 1000s problems.

------
drcode
This article confuses a lot of things by never defining what it means for
Bitcoin to "die"...

Is it possible that the current Bitcoin clients will be replaced by better
Bitcoin clients using the same ledger? sure. But would that mean that Bitcoin
has "died"?

Is it possible that the consensus algo for Bitcoin is replaced by a better
one? Conceivably, but would that actually mean Bitcoin has "died"?

Is it possible the monetary value currently on the Bitcoin blockchain is
shifted to other blockchains? Sure, but if most of the monetary value is
preserved, does it really mean anything has "died"?

~~~
astrodust
If you change the blade on an axe, and then later the handle, is it the same
axe?

~~~
GigabyteCoin
If by axe you mean an idea, instead of a tangible object, then yes.

------
Animats
Bitcoin seems to be over. Bitcoin peaked in Google Trends in early 2014, and
is now about 1/4 of that level there. So is the price. The few major merchants
who started accepting Bitcoin transactions haven't seen much volume. Newegg's
site says "Promotion has expired".[1]

It's not a technical problem. It's that the use cases for Bitcoin turned out
to be drug dealing and evading China's exchange controls. After Bitcoin
stopped working for both of those, the bottom fell out of the price.

It doesn't help that Bitcoin is a scam magnet. Anonymous, irrevocable money
transfer is the con man's dream. Now you can con people who can't get back at
you. That feature of Bitcoin has been very popular.

Right now, Bitcoin is in "meh" mode. For 2015, so far the price is flat, and
volume is flat.[2] The "altcoin" world is in even worse shape. About 2200
different altcoins were created. About 8 of them still have enough market cap
that you might be able to sell a reasonable sized block of them.

It was amusing while it lasted.

[1] [http://www.newegg.com/bitcoin](http://www.newegg.com/bitcoin) [2]
[https://blockchain.info/charts/n-transactions-excluding-
chai...](https://blockchain.info/charts/n-transactions-excluding-chains-
longer-than-10)

~~~
davidgerard
> evading China's exchange controls.

I do see that use case (buy electricity in yuan, sell bitcoins for dollars),
and I strongly suspect it's a thing that happened, but I don't have any data
on to what degree this was a thing that happened. Would you have any? Cheers
:-)

~~~
Animats
That was what caused the big Bitcoin run-up to $1000 in 2013. For a few
months, people in China could buy Bitcoins using funds in yuan, transferred
normally through the banking system in China. Then they could sell the
Bitcoins for dollars outside China. Then the People's Bank of China (roughly
equivalent to the US Fed and the US Treasury as a regulator) forbade that, and
stopped all the Bitcoin exchanges in China from connecting to the banking
system.

For those of you who don't know, China has currency controls - it's difficult
to convert yuan to dollars from within mainland China. There are ways around
that, such as physically carrying yuan notes to Hong Kong, which is allowed up
to some limit. But Chinese can't just do a wire transfer to a bank outside
China. Going through Bitcoin, for a brief period, allowed such moves.

After the PBC clamped down, it took a while for the Bitcoin community to get
over its delusion that the PBC couldn't do that. Then Bitcoin crashed.

Bitcoin mining in China may be an extension of that currency movement. From
the standpoint of China's financial system, Bitcoin mining looks like an
export manufacturing business. That's encouraged. It's OK to make stuff in
China, sell it outside China, and keep the currency used to pay for it.
Bitcoin mining is inherently limited; only US$800K a day is generated, which
is far too little to affect China's exchange rate. So there's been no effort
to crack down on that.

~~~
davidgerard
> That was what caused the big Bitcoin run-up to $1000 in 2013.

I thought that was the Willybot.

------
kordless
> I don’t want to be entirely grim, despite this post’s title. This isn’t
> intended to be some “Bitcoin is dying”-style FUD piece.

That's EXACTLY what he was going for, and he knows it. Saying you weren't
doing something you were doing is just confirmation you were doing it.

------
yellowapple
> If a retailer were to let a customer leave before confirming receipt of a
> payment, they would be opening themselves up to fraud

This is already the case with credit/debit transactions, which can often take
upwards of 24 hours to finalize.

The 10 minutes required for a Bitcoin transaction to complete mostly deal with
peer verification. The actual _publication_ of that to peers is much quicker,
and said publication is usually when a retailer would interpret a payment as
having been "received".

The only way to speed this up further - with either fiat or cryptographic
currency - is to distribute it physically. In the case of fiat, this would be
cash. In the case of cryptographic, this would be a paper wallet with a
verifiable balance and totally-secret private key, not known to even the
person who's paying with it (which is feasible, hypothetically, by using a
machine that could print paper wallets with the private key obscured by
"scratcher" film like what lottery tickets use; said machine, however, would
need to be entirely disconnected from any form of telecommunications, generate
truly-(pseudo)random (i.e. not pregenerated) keys, and have no means of
storing keys on non-volatile memory in order to be trustworthy, however, but
all three of these things are possible with today's technology by not
including a NIC, using a PNRG (in software or hardware), and using ROM and a
RAMdisk exclusively, respectively). Upon receipt, the recipient can either
hang onto it as physical currency or "cash it in" by scratching off the
concealing film and extracting the funds.

~~~
davidgerard
> The 10 minutes required for a Bitcoin transaction to complete

We've been seeing longer and longer transaction times of late, into the hours.

> with either fiat

This Bitcoin misuse of the term "fiat" is irritating. It means any currency
without a physical backing. This includes Bitcoin. In practice, conventional
currencies are considerably better-backed than Bitcoin.

(This misuse of "fiat" originates in early goldbug pamphlets and was
cut'n'pasted into the Bitcoin memetic sphere.)

~~~
yellowapple
> We've been seeing longer and longer transaction times of late, into the
> hours.

The longest I've seen so far was _maybe_ two hours. That's still 12 times
faster than most credit/debit transactions.

Now granted, if confirmation time keeps growing like it has been, then yes,
the Bitcoin folks will need to figure out some kind of solution (it's not like
other cryptocurrencies haven't already found such solutions). Keeping it under
24 hours, however, means it's still on par with expectations for credit/debit
transactions, which was my point.

> It means any currency without a physical backing.

Wikipedia [0] disagrees with you on the definition of fiat:

"Fiat money is currency which derives its value from government regulation or
law."

I'm too lazy right now to go corroborate that with a dictionary.

Bitcoin - unlike fiat currencies - isn't based on a government declaring its
value. It's much closer to commodity or representative money (the defitions of
neither requiring the "commodity" in question to be a _physical_ commodity -
just one that's difficult to reproduce, a trait which blockchain entries
possess).

[0]:
[https://en.wikipedia.org/wiki/Fiat_money](https://en.wikipedia.org/wiki/Fiat_money)

------
amelius
> The rest is history: AC scaled where DC did not, and the polyphase AC
> electrical system continues to be the primary means of distributing
> electrical power over long distances.

Interestingly, this may become incorrect, [1].

[1] [http://en.wikipedia.org/wiki/High-
voltage_direct_current](http://en.wikipedia.org/wiki/High-
voltage_direct_current)

~~~
hackcasual
HVDC has been around since the 30's. It's useful in some situations, but has a
lot of tradeoffs.

------
Synaesthesia
I have wondered mostly about what if there was a global, probably US-led,
concerted effort to ban Bitcoin on a governmental level. I also thought if
they made it completely illegal, ordinary people really wouldn't want to take
that risk. Or potentially ot could have the opposite effect.

~~~
mpyne
Why ban it? At 2.7 transactions per second all a government would need to do
would be to flood the one and only centralized Bitcoin blockchain with
meaningless transactions.

It's hard to pay for your child porn if you can't ever bid up your transaction
high enough to be accepted into a mined block, and it wouldn't be expensive at
all to accomplish this feat for even a small national government, let alone
the U.S.

------
eruditely
Bitcoin is a marked advancement and will go down in the history books as an
important event, whether the ecosystem of today will survive is a separate but
important question.

Bitcoin is forever.

------
jostmey
A major complaint about bitcoin is the wastefulness of mining. But that is
precisely what makes bitcoin a commodity. If it were easy to generate bitcoins
then people would start printing forgeries. I don't see a way around it.

~~~
DenisM
A currency should be scarce, but scarcity does not have to come at the cost of
spending energy.

Imagine a coin that's tied to how many push-ups you make each day? That's
still scarce, but the side effects are positive, not negative - you get
healthier instead of burning more coal.

~~~
colordrops
> scarcity does not have to come at the cost of spending energy.

But it does until there's a better alternative. Currently there is no
algorithm or technique that can't be gamed or corrupted other than proof of
work.

------
Eleutheria
Here are the deficiencies of bitcoin. I know they will be rebutted till
exhaustion but they're deficiencies nonetheless.

    
    
        - 20 million
        - eight decimals
        - blockchain size
        - cryptic account ids
        - QR codes
        - price instability
        - latency
        - privacy
        - reach
    

The typical responses will be

    
    
        "that's a feature not a bug" 
        "you'll get used to decimals" 
        "qr codes are not that hard" 
        "in a decade everybody will have a petabyte in their phones"
        "ten minutes is not that long"
        "who needs privacy if they're not doing anything wrong"
        "to the moon!"
    

And that's the precise state in which a disrupting technology hits you with
your pants down.

Blindness.

~~~
silverpikezero
You forgot the most damaging one: \- security

It is impossible on a practical basis to secure any significant amount of
cryptocurrency. Even the most secure known methods of storage have been
compromised [1], and computer security has reached a state which means
everything is hackable. Every Bitcoin exchange I can think of has lost some
significant amount of coins to hacks. I see no reasonable solution for this
problem.

[1] [http://leaprate.com/2015/02/is-bitcoin-safe-yet-bter-
exchang...](http://leaprate.com/2015/02/is-bitcoin-safe-yet-bter-exchange-
loses-175-million-in-cold-wallet-hack-ceases-operations-suspends-withdrawals/)

EDIT: I have always liked your posts on bitcointalk.org

~~~
Mtinie
> Every Bitcoin exchange I can think of has lost some significant amount of
> coins to hacks. I see no reasonable solution for this problem.

This is a problem _for_ Bitcoin, but not a problem _of_ Bitcoin.

The major fallout that I see from those hackings isn't so much that they
occurred, but that unlike an attack on accounts held by, say, Bank of America
or Citibank, there's no recourse once the funds have been siphoned out of the
Bitcoin exchange -- they are just gone.

Is that the problem that you're describing when you talk about there being no
"reasonable solution"?

~~~
Dylan16807
And there being no recourse is a problem _of_ bitcoin.

~~~
Mtinie
Agreed.

------
Karunamon
I flagged this for an awful clickbait headline - the article spends 3/4 of its
length explaining how iterative improvements to technology work, and the final
1/4 explaining that, yes, BTC isn't perfect, has some weaknesses, and some
other cryptocurrencies do certain things better.

In other news, water is wet, the sun rises in the morning, and the "death of
bitcoin" has been greatly exaggerated.

~~~
dang
Ok, we changed the title to try to make it more accurate and neutral. We also
turned off flagging on this post. The article might be wrong, but it's
substantive, and doesn't deserve the death penalty just for its title.

~~~
JoshTriplett
(HN meta, unrelated to the article.) What's the rough timeline for the user-
assisted unflagging plan?

~~~
dang
Soon! We're working on it. There turn out to be some technical subtleties that
we want to get right before deploying.

~~~
JoshTriplett
Awesome. Any plans to write about those technical subtleties at some point?

~~~
dang
Not really, but only because any time I have for writing is better spent
writing code—i.e. better for the community, plus I like writing software more
than writing about writing software.

To assuage your curiosity, though, the subtleties have to do with trying to
make sure the design is consistent with itself and with other parts of HN.
There is more than one way to generalize flagging, and some of the ways we
tried led either to unwanted behaviors or unwanted complexity. For example: if
you vouch (that's the word we're using for anti-flagging, i.e. you vouch for a
post if you think it shouldn't have been flagged) for an item and then un-
vouch for it, it should go back to its previous state. Posts that were killed
by software vs. by user flags have slightly different properties, and the
vouch feature needs to preserve those. The way that flagging affects story
rank is different from how it affects the life cycle (dead-or-aliveness) of a
story, and vouching needs to be consistent with both.

When we release this, we'll have a thread about it and can discuss it more if
people want to.

------
bencollier49
"Will this happen to Bitcoin? I don’t know."

Crap title.

