
Satoshi was wrong - qznc
https://medium.com/@homakov/satoshi-was-wrong-cd06d2877128
======
zero_k
Sure, he was wrong. So was Newton. Einstein fixed some of it, and then a lot
of others fixed some of the remaining parts, etc. Writing "Satoshi was wrong"
as a headline, is misleading at best. Why would someone talk about Satoshi
with such disrespect? I don't get it. Can somone explain?

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0xcde4c3db
I think the simple answer is that it's clickbait. A while back there was a
relatively well-known pop science magazine with a cover story "Darwin Was
Wrong". I'm having trouble finding the actual article now since the title is
such a common phrase. It turned out to be something like him being wrong about
the "tree of life" because genetic studies proved that horizontal gene
transfer was extremely common in the earliest generations, hence there's no
single common ancestor or "trunk". Not, as any reasonable person might
conjecture from that headline, a debunking of the overall theory of evolution
by natural selection.

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emodendroket
I don't see how crypto-currency dogma is on the same level with evolution. It
seems to me a lot of the criticisms have been borne out. Bitcoins are worth a
lot to speculators but they remain infrequently used as an actual currency.

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0xcde4c3db
> I don't see how crypto-currency dogma is on the same level with evolution.

That's not a claim I have any interest in. I'm just drawing the parallel of an
article "debunking" someone while actually agreeing with their central thesis.

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subverter
> 1\. A cap at 21M. It made the currency deflationary by nature. Ask an
> economist, no one thinks it’s a good idea long term
> [http://www.investopedia.com/articles/personal-
> finance/030915...](http://www.investopedia.com/articles/personal-
> finance/030915/why-deflation-bad-economy.asp)

Most economists, not all economists. And most of those economists are the ones
destroying economies, in my opinion.

If you're interested in reading a counter-viewpoint on why deflation is
actually good – it's the policies aimed at countering it that are really
what's bad – here you go: [https://mises.org/blog/deflation-always-good-
economy](https://mises.org/blog/deflation-always-good-economy)

~~~
AnthonyMouse
> [https://mises.org/blog/deflation-always-good-
> economy](https://mises.org/blog/deflation-always-good-economy)

That article is just _bad_. It spends a lot of time talking about reduction in
prices, but the real problem with currency deflation is that it results in a
reduction in wages.

If computers cost half as much as they did ten years ago meanwhile everyone is
making the same amount of money, that's great. But if people are also making
half as much money then it's useless, or worse than useless because then
people are making less money but still have the same mortgage they took out
ten years ago. Which is what happens with currency-generated deflation (as
opposed to efficiency-generated consumer price deflation).

> The economic effect of money that was created out of thin air is exactly the
> same as that of counterfeit money — it impoverishes wealth generators.

Except that the created money can go to the government which it can spend in
lieu of collecting more taxes, which would otherwise have come from "wealth
generators" regardless.

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apple4ever
Nope, its good. It may reduce wages, but prices will be much lower, so who
cares?

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AnthonyMouse
It's not about the stuff that just cancels out, it's about everything that
doesn't.

Money you already owe becomes more expensive to pay back.

It turns the currency into an investment vehicle that competes with
economically productive activity for investment. If cash in a mattress
predictably appreciates by 4% a year then nobody will be willing to invest in
anything that produces less than that in real returns, so all of that
productive activity disappears out of the economy to be replaced by currency
speculation. Or is forced to pay the higher returns to investors by paying
lower wages to employees or charging higher prices to customers, and _is able
to_ because less available investment means less competition when your would-
be competitors don't get funded.

When most of the currency is held by speculators it causes high volatility in
the currency value, which interferes with normal businesses using it as a
currency because the value can fluctuate wildly even for those who only hold
the currency temporarily. Which leads to economic inefficiency and less
competition again.

Everything about it causes unearned wealth to go to people who uselessly hoard
currency at the expense of everyone else.

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codegladiator
Very poorly written article. Throwing a lot of shit at someone and
discrediting them for some mistakes.

~~~
k__
If we can finally accept that Bitcoin was made by the CIA it doesn't feel too
bad ;)

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cflynnus
I would classify this article as typical FUD that consistent observers of the
Bitcoin/cryptocurrency space see quite often.

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quadcore
The post seems at least decent but the title is terrible I think.

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andrewla
> 1\. A cap at 21M. It made the currency deflationary by nature. Ask an
> economist, no one thinks it’s a good idea long term
> [http://www.investopedia.com/articles/personal-
> finance/030915...](http://www.investopedia.com/articles/personal-
> finance/030915/why-deflation-bad-economy.asp)

Most economists thought that "Chancellor on brink of second bailout for banks"
The Times 03/Jan/2009 was a good thing, but many, including Satoshi, disagree
on this.

As for Bitcoin being deflationary, that's a more subtle point. Nobody (to a
reasonable approximation) thinks that there is a direct link between monetary
base and inflation/deflation. There is a relationship, but total money supply
is generally considered more important, and that includes liquid monetary
instruments (like demand deposits, etc.) that are not reflected in the
monetary base.

The notion that Bitcoin is worthless because it is deflationary is self-
contradictory -- if it increases in value it cannot decrease in value. The
contradiction here is that the price of Bitcoin will fluctuate with market
forces just like everything else, but if supply chains begin to materialize
denominated in Bitcoin, then by necessity the output and intermediate products
of that supply chain will be stable in value relative to Bitcoin itself.

> 2\. He offered a system where the inputs/outputs blockchain is the state
> itself, and in order to prune your chain you need to store UTXO set.

Agreed here; this was definitely a design flaw. I'm not totally sold on the
ETH solution, which depends strongly on transactions being ordered properly,
and has some odd race conditions that are a pain to deal with (that is, a
transaction which is not currently valid may "become" valid, either by
advancing the nonce or increasing the momentary balance at an address). One
problem with the UTXO solution is that offline (air-gapped) signing solutions
are very complex, because you need to locate UTXOs, rather than just signing
"send X bitcoins from this address to this address".

> 3\. He didn’t oversee the idea of Root of Trust

Eh; this seems like an independent problem to me. If you want to trust
someone, by all means trust them, and use whatever web of trust primitives you
want to expand that trust into trusting their software. But putting it in the
blockchain means that the chain of custody becomes suspect; what if an
individual (or their key) is compromised? That extends the surface area of any
attack significantly. That's not to say that it wouldn't be nice to have some
notion of trust, but so far I haven't seen any ideas that seem even a little
attractive for solving this problem. Satoshi didn't cure cancer either.

> 4\. He offered “new payment — new address” as a rule

This rule still makes sense for a lot of situations just because there's no
"receipt" mechanism. I sell widgets, and a customer buys a widget -- did they
send the money or not? If I have a single payment address, all I see are
hundreds of payments for .01 BTC.

On an individual level, using a new address for the change from a transaction
doesn't seem to add a lot of value, but since Bitcoin tracks UTXO, not address
balances, there's relatively little bloat associated with this.

> 5\. He never defined clearly threat model of Bitcoin. Who’s the attacker?
> ... The one and only real attacker ... is ... governments.

The threat model, on the contrary, was extremely well defined. The only threat
that Satoshi took seriously is the threat of double spend attacks.

The nation-state threat model is more subtle -- currency controls and police
actions against users and miners. That's a little out of scope of a software
project.

If a nation-state chooses to take over mining, then all they do is increase
the security of the network by adding hash power. If they try to use their
hash power to facilitate double-spending (for some reason?) then that's easily
detectable by humans. But mainly it just doesn't make sense as an attack,
especially for a nation-state with a police force and a justice system, which
can be used to enforce arbitrary rules much more cheaply than building a huge
mining farm can.

> 6\. Complete lack of governance was sold to us as a good thing. What we got
> now? There’s nothing Bitcoin can do that Ethereum can’t, there’s no clear
> strategy or way of resolution of conflicts when one side whats 2x of blocks
> and another wants to keep it 1 Mb.

Better to have the debate, and have the forking and contention, than just
sticking with a bad policy set by a bad policy maker. This is just inefficient
democracy vs. efficient totalitarianism -- your mileage may vary, but I side
pretty hard with the inefficient here.

As for Ethereum, I love a lot of what it brings to the table, but in the end,
it brings too much, at the cost of a huge amount of complexity that makes
trust decisions, already complex, exponentially worse. Also, I don't
understand what Ethereum has to do with a governance failure of Bitcoin.
Ethereum has not yet taken over from Bitcoin in the space that Bitcoin was
designed for, so I don't think we can count it as proof of Satoshi's mistakes.

> 7\. Lack of vision what Bitcoin would do when transactions reach maximum of
> capacity. In fact Satoshi himself envisioned it as a constantly growing
> onchain without any second layers. It’s only now when people realized that
> increasing onchain further is ridiculously stupid idea since it’s already
> way too hard to be a full node. And utopian hot-patches with completely
> broken incentives models like Lightning Network are another proof Satoshi
> had no idea how to fit all people onchain.

The whitepaper says nothing about block sizes or off-chain settlement. Satoshi
went away before block sizes became a contentious issue, so we'll never know
if whatever he thought was right or wrong. And frankly, although I'm a "big-
blocker" myself, I don't think the answer here is settled. Whether on-chain
can scale as storage costs drop and light-weight payment verification becomes
more common and full nodes rarer, or whether we need a formal off-chain
solution like LN or an informal off-chain solution like "some company
maintains a ledger", the jury is still out.

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tardo99
What actual real world problem does bitcoin solve other than foreign exchange
transfers and black market operations?

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homero
With more civil asset forfeiture, bitcoin is the only easy to store value,
gold can be seized

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jrimbault
"They" need only seize _you_ and beat you with a wrench to get your
passphrase/convoluted security mechanism(s) protecting your private key(s).

Or just pass a law requiring you comply or else.

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homero
True but I can have a hidden bigger wallet

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tardo99
The size of your wallet doesn't matter when you're in prison or dead.

