Hacker News new | past | comments | ask | show | jobs | submit login
A faster, more efficient cryptocurrency (news.mit.edu)
584 points by salvadormon on Feb 18, 2019 | hide | past | favorite | 815 comments

I have long wondered how cryptocurrency fans would answer the question:

‘Would you be happy if the crypto-utopia you bring up happens in the next 10 years, and all value is stored/transacted through a cryptocurrency, but it was a coin that you do not possess now, nor could you transfer any of you current currencies into it?’

Say tomorrow someone releases the one true coin, but no one notices. All other cryptocurrencies drop to zero value, then a crypto miracle occurs - the one true coin is uncovered and almost overnight becomes the defacto monetary standard. Would crypto fans be satisfied?

This is a long way of asking: do you want cryptocurrency to succeed if you knew that you could not profit from it doing so?

How do you think bitcoin started ? You'd had to be crazy to believe in it 9 years ago, and spend time and energy in the community, nlt to lention monney, to foster the project.

My family and friends said i was stupid, utopist, being conned, wasting my time, and so lany things.

Btc was banana money at first, and only people believing it would be a great thing as a concept made it work. We didn't expect to make banks, it was a happy side effect of a mad naive bet.

All great things start like that. Comics are now the thing, but 20 years ago were still for pationate nerds.

> My family and friends said i was stupid, utopist, being conned, wasting my time, and so lany things. ... All great things start like that.

"But the fact that some geniuses were laughed at does not imply that all who are laughed at are geniuses. They laughed at Columbus, they laughed at Fulton, they laughed at the Wright Brothers. But they also laughed at Bozo the Clown."

-- Carl Sagan


“First they think you're crazy, then they fight you, then you change the world.” - Elizabeth Holmes

Elizabeth Holmes, who is currently on trial for fraud charges for covering up the fact that her magic blood testing machine was too magic to work in the real world.

I think that was the joke (although admittedly sometimes you can’t tell on HN).

I can confirm that that was the joke :)

It's not exactly same but the quote credit goes to https://www.brainyquote.com/quotes/mahatma_gandhi_103630

That's the joke.

I don't think she is the original author of this quote.

Going to share another quote, which I think is relative here -

“Those who are crazy enough to think they can change the world usually do.” - Steve Jobs

If Jobs had been just a little less crazy, he might still be changing the world.

She's not, that's the punchline!

The irony is that she was a Steve Jobs fangirl, or copycat if you will.

Sadly those you think are too crazy to change the world, usually are


I feel like the "usually" is pretty important here.

Did he actually write that piece of the commercial? Or any Apple commercial becomes a Steve Jobs quote.

But they were right to laugh at Columbus. He was right for the wrong reasons.

Of course, if you don't ever try it, you can never be right for any reasons.

Bitcoin is IMO likely somewhere in between. It kickstarted a new concept in IT but money is a really simple (although powerful) usecase. I'm more interested what will be done with the concept in the future.

> But they were right to laugh at Columbus. He was right for the wrong reasons.

He wasn't even right. He was wrong in his estimation of the earth circumference, and lucky that America was there between both oceans...

He didn't say he was a genius. He seemed to imply he's the one laughing at people with all his well-earned money now :)

It's a little ingenuous to use the word 'genius' for people who put gas money into a meme currency 9 years ago

We were talking about being genuine, and here you come implying I brag that I was smart.

That's really rude.

You're rich now, so you have to get used to this.

Bitcoin doesn't work in any meaningful sense. It can't be used for purchases in most contexts and you can't use it as a stable store of value. It is also controlled by dubious actors and mining is a horribly destructive practice, both in terms of environmental waste and the constant nuisance of people stealing CPU time. But you were saying?

If you're saying "Bitcoin doesn't work in any meaningful sense" you simply just haven't used Bitcoin. It works absolutely fine, even great most of the time, and accomplishes what I personally see as its purpose.

In what way?

* Mining has become highly centralized, the opposite of its original intent.

* Transaction fees are too high to justify its use in every day transactions and small transfers.

* Very few merchants accept it for every day transactions, and the number has decreased over time.

Yep. Perfectly fine as tech beanie babies.

As a POC of an alternative medium of paiement.

As an idea, a hope, the starting point for iterating on the future of money.

As a way to make the society think and debate.

And as all that, I think it had been successful.

What exactly are your measures for success?

It can be used for purchases via services like Bitpay which can automatically give a fiat value for the cryptocurrency amount, hence shielding you from price volatility.

Generally though, merchants wouldn't bother accepting it. Alongside the fees and whatnot, adoption is too low, fees are too high, time to confirm is too high, and it can complicate some legal stuff (like issuing VAT invoices).

Mining is the most harmless use of botnets.

It does not really matter how it started but how it is now. I would bet that all these selfless visionary nerds who believed in bitcoin from day 1, now are less than 0.1% of the people who deal with bitcoin today. The rest 99.9% are there for the easy money. At least, this is what I see from my surroundings and the feeling I get from the internet. It might have started great, but it got alienated along the way.

You’re quite noticeably not answering the parent’s question, while simultaneously proving their point.

20 years ago marvel declared bankruptcy because of major missteps following a speculation bubble in the early 90s.

Despite being a dominant force in film, they're selling poorly today.

BTC will always be banana money.

I disagree, one day it will be a footnote in a history book about banana money. Sooner than some think.

Let's add this to the list of Bitcoin obituaries that countless people have declared over the past 9 years. Every year that goes on and the network is still kicking is just building its base value. Bitcoin network will out live Hacker News.

> This is a long way of asking: do you want cryptocurrency to succeed if you knew that you could not profit from it doing so?

That is a brilliant question!

Instead of all the endless bickering between crypto-fans and -haters reaching from technology to fiscal policy to society, it reduces the conflict to one simple test, as a sort of precondition.

Anecdata, but just going through my set of acquaintances, personal profit was always a factor. And I never even thought to question it. In hindsight, however, it seems (1) such an obvious thing to do, and (2) makes it clear to me that my acquaintances probably wouldn't give a damn about crypto if there wasn't a chance to profit from it.

I mean, the only reason Bitcoin went mainstream in the first place is not because of the technology (which existed for a decade), but because there was a extreme bubble (again) and mainstream people wanted to get rich quick.

I always have been excited about Bitcoin because allows me as a developer to do things with money in the internet. I could create a service like PayPal without the need of having deals with hundreds of banks all over the world. A homeless can have a btc wallet but probably not a bank account. I could automate transfers and payments. In countries like Argentina there are a few banks and they're really bad quality, both in terms of services and tech, so there are not things like stripe, etc.

I'm talking just about the positive potential of Bitcoin as a technology. There are many downsides and the current landscape of cryptocurrencies is not so great.

My vision is that crypto is going to be used like credit/debit cards, as a way to use money digitally, but it will backed against fiat.

> I always have been excited about Bitcoin because allows me as a developer to do things with money in the internet. I could create a service like PayPal without the need of having deals with hundreds of banks all over the world. A homeless can have a btc wallet but probably not a bank account. I could automate transfers and payments. In countries like Argentina there are a few banks and they're really bad quality, both in terms of services and tech, so there are not things like stripe, etc.

But the problem is not the technology (it is there and exists for decades), but the laws. Better concentrate on that problem.

It's also the technology, currently outside of crypto you're always going to be connecting to some company's servers using their API after you get their authorization.

There's no way the current system can have a stable and uniform API that works globally.

For me it's like asking, would you want Amazon to succeed if you did not profit from it?* Obviously, if I am not personally invested in Amazon, I don't really care that much. But it still could have value for society for other reasons than getting rich off of speculating.

For example: https://www.coindesk.com/crypto-gaza-west-bank-bitcoin-pales...

* To those people who say, "You can't compare crypto to a company because companies pay dividends," that is specifically why I chose Amazon as an example, a stock that does not pay dividends.

Don't compare a company to a tech.

As an example of a tech, if someone asked me would you want self driving cars to succeed if you could not profit off of them, I would say that's a resounding success. A lot of people are excited about this tech because of the improvement in their daily lives, not because of a profit motive. Compare that to crypto

Tech: would you use git if it wasn't popular?

The right question would be: (assuming that there isn't already a monopoly) would you want one specific VCS to gain a monopoly if it was one you have no experience in it? (and all your mastery of other VCS would so become worthless)

To answer both questions:

1) I would want Amazon-like businesses to succeed -- in the sense of "someone who finds a sustainable way cut the fat out of retailing" -- even if I could not profit as a shareholder. But I still think I would benefit (as a buyer) from that success.

2) I would want decentralized, arbitrary-money-printing-proof cryptocurrencies like Bitcoin to exist as a shield against governments that inflate away their money (like Venezuela or Zimbabwe) or abuse their central bank status for bailouts (in the first world), even if I could not profit as a holder (sorry, HODLer) of the currency. But I still think I would personally benefit as a prudent saver and (non-politically-connected) investor.

I am a cryptocurrency fan and developer who wants to build services on top of cryptocurrency networks.

I want a cheap, fast, decentralized solution for token ownership with a great user experience. I want to build back-end solutions for crypto-tokens representing digital collectables, in-game items, etc.

I need a critical mass of users before these services start to become viable as a business model. Thus I need a cryptocurrency for tokens to succeed in a meaningful way. And I want this regardless of whether I own the native token of this network.

The anarchist in me wants to believe that cryptocurrency will diminish the power of the state but I don't actually have enough faith in humanity that we will come up with something better than crypto-oligarchy.

Why the surprise? BTC is a shallow clone of the bad parts of commodity currency. Nothing new, no new values. Just tightening the same old screws another notch.

We'll just see the same powers that be gain power in any specific crypto except now we have less protection laws in place.

When new technology or some other fundamental change makes enforcement of the rule of law harder, We The People will grant enforcers more privileges to make sure that they are still able to do their job. It's a job We want done. The road to police state is paved with anarchist intentions.

Sort of. Baudrillard seems to argue from a anti-fragility standpoint and asserts that acts of terrorism have the opposite effect as intended and only seeks to strengthen the hold of the incumbent system even more (see PATRIOT act, new TSA screenings). I agree that technology generally amplifies the power of those that already have power, but I wouldn't go as far as you. I think that banking on any one thing is not the way to go, you need to abandon anything that becomes coopted and always seek destabilization in whatever form it appears.

The story of cryptocurrency over the past couple years has been a really interesting case-study in the application of Libertarian principals.

It's interesting how something which was built on the idea of decentralization by design has given way to a clear power structure, where those who have the sway to control the fate of the technology have largely used it to pursue their own personal enrichment over the health and success of the system as a whole.

To me it's evidence that some form of governance is required to build something which can actually serve the greater good. I also would like to see a stateless currency work out, but there are clearly still quite a few problems to be solved before that will even seem like a possibility.

> It's interesting how something which was built on the idea of decentralization by design has given way to a clear power structure, where those who have the sway to control the fate of the technology have largely used it to pursue their own personal enrichment over the health and success of the system as a whole.

Care to elaborate? Some examples?

Well, as one other commenter mentioned, with regard to Bitcoin miners have essentially become a centralized authority, and their decisions on block-size have made Bitcoin less liquid, and less useful as a currency while making transactions more profitable to them.

Another example would be exchanges: a vast majority of people do not use cryptocurrency in a peer-to-peer fashion, but instead go through a small number of centralized exchanges, which have been known to freeze withdrawals, have been riddled with theft, fraud, and a playback of all the financial schemes dreamed up in the last few centuries which have not yet been regulated against in cryptocurrency (pump and dump, Tether etc.).

On top of that, the crypto media sphere seems to be completely unreliable: I've seen many headlines which are deliberately misleading with the intent of stoking a one-sided, glowing narrative about cryptocurrency (I.e. a crypto startup opens their account at Chase bank and the headline reads: "X Coin Begins Partnership with J.P. Morgan Chase", and related online communities are heavily moderated to support the official viewpoint while silencing others.

Long story short, when I bought a little bit of Bitcoin to play with a few years ago, I could buy a coffee with it, and I could even make purchases with it on Amazon. Since then it's gotten much less useful to the average user.

> , with regard to Bitcoin miners have essentially become a centralized authority, and their decisions on block-size have made Bitcoin less liquid, and less useful as a currency while making transactions more profitable to them.

>Another example would be exchanges

Interestingly enough, with regards to bitcoin, there was a huge powerplay that happened a couple years ago. And this debate proved who had the real power.

A couple years about, almost every major exchange, bitcoin company, merchant payment processor, and bitcoin miner, wanted increase the bitcoin blocksize, in order to reduce transactions fees to users and help adoption.

(Even though this directly hurt the miners, the miners still wanted it, because they supported adoption. Crazy, I know)

But, this change didn't pass, because the 4 or 5 people who controlled the bitcoin core github repository, and reference client disagreed with the changes, it prevented it from happening.

And this was in spite of the fact that almost every single major player in the space wanted this change.

So crazily enough, the central authorities of the bitcoin protocol, are the couple people who hold the keys to a github repository.

> But, this change didn't pass, because the 4 or 5 people who controlled the bitcoin core github repository, and reference client disagreed with the changes, it prevented it from happening.

This is blatant re-writing of history.

A fork was written, Bitcoin Cash, but most people/miners/companies didn't want to use it. It was widely known and the differences/advantages/disadvantages were discussed ad nauseum for months/years.

A Github repo can't force people to run it's code instead of another.

> And this was in spite of the fact that almost every single major player in the space wanted this change.

So why did they keep running Bitcoin Core instead of the fork?

> So why did they keep running Bitcoin Core instead of the fork?

Because it turns out that controlling a github repo is a very powerful power.

> A fork was written, Bitcoin Cash

This has nothing to do with Bitcoin Cash. This has to do with 2XSegwit. An initiative that was supported by every single major miner, all of the exchanges (coinbase, gemini, kraken, ect), as well as the major merchant payment processors (IE, bitpay, and all the others).

There are statements after statements made by all of these players, where they stated support for it. Unfortunately, it seems like the people who control the bitcoin protocol, the developers, had too much power, though.

Did you disagree that every major miner, and Bitcoin business like coinbase and BitPay, put out messages in support of the 2X Segwit agreement?

The ten MB block size limit lowers the number of transactions that can occur in a single block therefore inflating what miners can charge for a transaction. Increasing the blocksise would require miners to choose to mine a hard fork. See the DAO hack for what can happen with strong governance.

The Bitcoin block size limit is not 10 MB.

Without a small block size you would end up with a centralization of nodes onto datacenter servers.

We anyway have ended up with a centralization of nodes onto datacenter servers, so it's hard to argue that it would have made a difference.

> design has given way to a clear power structure

Example? Community decision making when forks occur.

> largely used it to pursue their own personal enrichment

I'll let someone else provide examples of that one :)

Sorry to be "that guy", but libertarianism != laissez faire, it's a principle about governance of people. The gold standard is just as libertarian as cryptocurrencies, and that doesn't require governance to function, and governance through a private centralized bank that everyone opts into is also libertarian. Governance certainly helps in making things more convenient, but it's not required or necessarily desired.

For example, if there are problems with scams or whatever (e.g. impure gold scams, or cryptocurrency manipulation), people may choose non-coercive governance, like banks (e.g. through something like GNU Taler with a bank-backed currency). You could do this with any currency you choose, so which currency you use has little impact on the structure of government and how it interacts with the population, provided the government stays out of it. Because of this, fiat and resource-based currencies are equivalently acceptable for libertarianism.

So yeah, maybe cryptocurrency is tangentially related to libertarianism in that many libertarians are interested in them as an alternative to central, coercive banking, but that's about where the relationship ends. Libertarianism doesn't care if you have governance, as long as that governance doesn't use force.

And since cryptocurrencies aren't really used for real transactions, we can't really see how they would fare in a competitive currency market.

> And since cryptocurrencies aren't really used for real transactions, we can't really see how they would fare in a competitive currency market.

They used to be. I made online purchases and bought coffee in real life using Bitcoin just a few years ago. The evolution of Cryptocurrency has been away from any real-world usefulness, and toward its current incarnation as a largely speculative instrument.

And I would argue that in fact this has been the result of a Libertarian experiment playing out. Everything about Bitcoin has been opt-in: in principal anyone is free to own a node, and the community would have been free to opt-in to a governance structure which would have discouraged actions which made Bitcoin less useful to the majority of users, but this is not what happened. Instead power was consolidated in the hands of a few, who chose their own self-interest to the detriment of the larger community.

I am not a fan of coercive government, but I struggle to see how the story of cryptocurrency to this point does not provide evidence that some strategy is needed, beyond maximal personal liberty, to discourage bad actors from causing disproportionate harm to the collective.

your definition of libertarianism is off by a century

> those who have the sway to control the fate of the technology have largely used it to pursue their own personal enrichment over the health and success of the system as a whole

You say this like it's a fact but I feel like it's the opposite. There aren't many compelling examples of this. And to the extent that there are, they exist in a competitive market and their fate is determined by users and investors, who weigh the cost of the greed vs the benefit of the technology and reward/penalize accordingly.

What decentralization of power has occurred in a way that significantly different than any other market? Exchanges presumably control most of the coin. Pump and dumps seem to been extremely likely.

It might not be worse but IMO it hasn't proven to be better.

How are you going to hold any amount of digital money without entrusting another organisation to hold it for you?

That's the decentralisation of power that has occurred.

You don't have to prove your identity. You don't have to prove anything to anyone. You just download some software and generate a private key. Bitcoin is to money what the internet was to book publishing.

Its not anonymous. Its the opposite, in fact. Every transaction is recorded and traceable.

I didn't say anything about anonymous.

Absolutely — I would gladly trade all my gains for a world where governments have no control over the creation and regulation of money.

> I would gladly trade all my gains for a world where governments have no control over the creation and regulation of money.

In that world, there would also be nothing to stop anyone else from just taking your money by force and without any consequences.

The loudest voices against government regulation of finance usually belong to those with the least understanding of it. Most of the regulation is just there to protect market participants.

Why do governments have to simultaneously be in the business of (1) securing people’s property and (2) creating money and regulating the monetary supply?

Because regulating it is an important part of securing it. They're not separate things.

If I am a victim of fraud and lose my money, I have the concept of the rule of law to help me get my money back. In a decentralized world there is no way to get my money back.

Besides, it is the government's job to help society function well, in part by making the economy successful. Money is just a tool to do that.

> If I am a victim of fraud and lose my money, I have the concept of the rule of law to help me get my money back.

The governments ability to print money has absolutely nothing to do with its police force.

If someone steals money from others, then the police should go in and arrest them. The police don't need a printing press to do their job.

It is perfectly possible for the rule of law to exist, and for decentralized currencies, to also exist at the same time.

The government doesn't have to supply my shoes for me to be able to go to the police when someone steals them.

They have to supply the money so that they can have something which can be collected with reliable value for taxes. If your government allows you to pay taxes with monopoly money, then Hasbro becomes King. If the government supplies the money, there is no external organization which can inflate the supply to gain control.

Because to most people, stability of said property is just as important as possession of it.

> without any consequences

there are going to be consequences. It's just that they will be enforced by smart contracts instead of governments..

> by force and without any consequences.

if that 's the only problem with cryptocurrencies, it can easily be solved with insurance

A predetermined monetary policy would be great when a financial crisis or credit crunch hit, causing a collapse in the velocity of money /s

While I have invested in crypto and believe it has great potential, one of its touted benefits by its supporters is also one of its biggest pitfalls, namely that its money supply is predetermined. The inability to actively manage a money supply given exogenous shocks to the economy is a big problem.

I 100% disagree, the central planning of money is (1) what causes inflation, and (2) greatly exacerbates (and in many cases creates) financial crises.

Any supply of money will do, the idea that money should increase in supply along with population growth (or some other arbitrary metric) otherwise we’ll permanently live in a deflationary disaster is an imagined monster — we live in the here and now, therefore people have to spend some amount of money to live (food, housing, entertainment, etc) regardless of whether they perceive the purchasing power of money to increase in the future. By centrally planning (and thus inflating) the amount of money in circulation during financial crises the only thing that is accomplished is a re-inflation of the bubble — essentially they’re sowing the seeds of destruction again, causing the next bubble in an attempt to cure the last one.

Please read this explanation of the financial crisis, I’d be happy to comment further if you have specific critiques on this article (and no I didn’t write it):


A low, but positive, inflation rate is of critical importance.

> Any supply of money will do.

That is just nonsense. If you have a fixed money supply, given that economic growth is happening, would result in a naturally deflationary currency. That is a terrible place to be for the system as a whole as no one has any incentives to spend or invest in anything as money itself will simply gain value over time just sitting as cash. Thus, that money isn't being used / circulated. Having a ideal velocity of money has significant multiplier effects and deflationary currencies are fundamentally flawed.

The problem then is: if you want a low rate of inflation but there is a natural variation in the growth rate due to the cyclic nature of the economy, then how to create a system that could do that without a monetary authority.

>That is a terrible place to be for the system as a whole as no one has any incentives to spend or invest in anything as money itself will simply gain value over time just sitting as cash. Thus, that money isn't being used / circulated. Having a ideal velocity of money has significant multiplier effects and deflationary currencies are fundamentally flawed.

In what world is this true? Time preference is a real thing, and it is unrealistic to assume that 100% of the population will put off non-essential consumption and investment because the price of a Ferrari will decrease by 2.353% next year. Time is a very important factor in the consumption/investment decisions that people take, and modern mainstream economics neglect this fact both on the micro-level and on the macro-level, which is why crazy theories about the neccessity of inflation-rate targeting are able to arise. Most people put their savings in a bank account which the bank lends out to businesses to invest in projects - if anything more savings will lead to more investment than otherwise, which is more important to the bedrock of an economy than spending on consumption.

Also worth pointing out that the period during which the United States experienced its most significant economic growth (mid to late 1800s) was during a period of severe deflation of the dollar.

Keynesian economics (and more generally monetary policy) and inflation-targeting (i.e. the neccessity of having a positive inflation rate) is both theoretically disproven by the existence of time preference (a time preference of zero is literally impossible, it means starving to death) and its heterogenous distribution in a population, as well as empirically by looking at the periods of deflation in the U.S. dollar during the 1800s and the associated economic growth.

Nice to see a handful of people have seen through the Keynesian idiocy they inculcate everyone with in public education!

Prove it, show me the world where we had a stable monetary supply that resulted in people having no incentive to invest in anything — where’s the experiment?

Again, you HAVE to spend money to live (otherwise you die). It’s impossible to live without food and water, most people want to live in a house, most people want entertainment, etc. None of those things can be had without spending money.

Also, if your argument is correct, why don’t people put 100% of their money into the stock market (which reliably goes up over long periods of time) and instead choose to spend it?

Money is fundamentally used for two different things, as currency to help trade and to store value.

Once it becomes too useful as a value store, it stops being used for trade, which hurts the economy.

So therefore some inflation is a good thing, it means the money keeps moving. If you want to store value you do that with assets other than money.

I think it makes sense. You have an economy built on an economic model rather than an economic model based on an economy.

With the latter you're constantly guessing and tweaking the model and roughly every 10 years there's a crash and the economists say okay, NOW we have it perfect and we'll never get it wrong again.

Why do you need an unlimited money supply? The only thing causing these shocks is that the economy is doing whatever it wants and then the economic model collapses.

Economic growth is very heavily tied to increases in the money supply less inflation for developed countries. Without this debt, the cost of doing anything in our economy would be way too large and it would be very difficult for our society to operate. Additionally the need for economic solvency to protect the current social structure is what necessitates government involvement.

Exactly, any supply of money will do, no need to permanently increase the amount in circulation — this is why the market settled on gold (which has an inherently low inflation rate due to the difficulties of mining) and impossible to pass off counterfeit gold at scald.

You need inflation for proper incentives. It's like a tax on the entire network to keep it supported. Without proper incentives, the game theory collapses.

The difference here is that inflation is predetermined and set instead of printing money on demand like we do in the traditional financial system.

“You need inflation for proper incentives. It's like a tax on the entire network to keep it supported. Without proper incentives, the game theory collapses.”

What, specifically, do you think the consequences of a stable money supply are?

Deflation, which given a growing population would always be a given. In turn deflation makes the entire debt system collapse , which is the backbone of economic growth especially in the developed world.

Why should debt support an economy? Without such massive inflation people wouldn’t need to take on much debt to make large purchases such as cars/houses because the prices of cars/houses would be much, much lower.

It only makes sense to take on debt if you have a productive way to put that money to use (Eg a business) that has a higher rate of return than the interest rate.

Debt is the backbone of US GDP growth, money enters the economy as debt, is used to purchase something like a car or a house, subsequently it then reenters the banking system as the person who is being paid deposits their check, and then gets re-loaned out only to often immediately end back up in another domestic bank account that then loans out even more money.

This cycle can continue forever, and the faster this cycle occurs the higher our GDP.

No incentive to support the network if there's no block rewards. The transaction fees are not sufficient and just meant to prevent spam. It's also better to tax the network as a whole (through this set inflation) than to tax for each usage.

I misunderstood you at first.

That’s an interesting speculation, but it remains to be seen what will happen when inflation is near zero.

If people value transacting on the network, then they will pay the necessary fees to keep it running. If they don’t then it will go down.

I suspect this isn’t the big issue people think it is, regardless there’s no way to “prove” that transaction fees won’t be enough — everyone from miners to speculators by owning mining equipment and Bitcoin are specifically betting that transaction fees will be enough.

There's an assumption here that the network will be used and valuable.

If the network is used more it will be more valuable, which means the reward value will increase as the inflation decreases. If nobody uses the network then it'll be worthless, which at that point it doesn't matter since nobody is using it.

There are crypto currencies with built in inflation.

The market has settled on gold? For money? What?

The market moved on to other forms of money centuries ago.

This is categorically false. The gold standard (albeit a reduced version of it established under the Bretton-Woods monetary regime) was abolished in the United States as recently as 1971. In Switzerland this link was abolished in the early 2000's AFAIK.

It was only loosely linked to gold even at that point, fractional reserve banking has been going on for a long, long time!

Yes, but using it as a symbolic backing of fiat currency is not the same as using it as money.

>this is why the market settled on gold

Gold, which, by the way, has an extraordinarily high energy and environmental cost to extract.

That’s not a bug, it’s a feature — if it were easy to extract (like aluminum), it would have been much more inflationary and thus not a “good” choice for money.

I didn't claim it was a bug. I was trying to make the point that all the tree huggers that scream bloody murder because of Bitcoin mining costs never look at the actual environmental cost of existing systems.

Gold is a fringe commodity valued by a similar small subset of the population that values bitcion. And yeah, I'd say that those people are also causing similar problems to bitcoin because they incentivize significant environmental destruction. Even worse than bitcoin, they also increase the costs of real commercial use cases for gold.

> Gold is a fringe commodity valued by a similar small subset of the population that values bitcion.


Ah gotcha, misunderstood your comment — good point!

> The inability to actively manage a money supply given exogenous shocks to the economy is a big problem.

Have we seen this to be a problem within the context of Bitcoin?

> I would gladly trade all my gains for a world where governments have no control over the creation and regulation of money.

Indeed. And not just because they're absolutely terrible at it: giving control over money creation to a government is like giving a drug addict the keys to the heroin factory.

Don’t know why you’re getting downvoted, your comment is spot on. Governments can’t be trusted with money, the incentive to cheat is too great.

What would you call the near-daily exit scams, pump and dumps and ponzi schemes in the "crypto" world if not "cheating"?

They're the same, but when your government does it, it's not really opt-in, unlike with all the crypto frauds.

I've never once been forced into anything resembling a pump and dump, ponzi scheme or exit scam by the government.

If you do live in a country where there are compulsory contribution to a retirement system, then you are forced to contribute to a ponzi scheme. You may just not realize it.

You realize people do that with fiat money too, right?

Bitcoin is giving heroin dealers the keys to the money factory, which is obviously much better.

Outside of what others replied to you with, there is another aspect I find about it, that truly resonates and excites me, despite not being a holder. To me, Bitcoin is also a large experiment where laws and rules are written as open source code, which any1 code fork and run their own version of it, or any1 can submit a proposal for.

This is what traditionally legal system with the power of violence used to deal with before. Now we see it implemented as a code. This part is more exciting to me than trying to sidestep whatever misguided government (not just US) rules and actions are.

EDIT: Perhaps proof of work based on burning energy, which is expensive and tends to bring centralized parties, is not the best way to ensure rules are enforced, but the fact the whole thing is open source is great in my opinion.

I don't accept this assessment of how Bitcoin's consensus fundamentally works. Yes, anyone can fork the code, but consensus comes only when the miners choose a fork.

As far as I can see, there's no significant incentive to mine other than money, so miners want money, so you can persuade them with money.

The "consensus" is fundamentally an auction.

Unless people really use bitcoin to pay for stuff. Then, whatever token can be exchanged for something of value is the one everyone wants, doesn't matter if the miners fork

Unfortunately bitcoin becomes steadily less useful for actually using and paying for stuff as time goes on. Back in the day, it could be used on amazon, buy a coffee etc. Now its just a bizzare experiment in markets without consumers.

yep and therein lies some power. There have been a few wars within bitcoin already. In the real world, people would have died. In the coin world, people just voluntarily chose different pastures.

Yes. I think there's value in reducing the politically privileged's means to dominate their power over the general populace. It is my personal belief that people are in poverty because they are politically disposessed, as opposed to the opposite causality arrow (ok obviously it goes both ways but my belief is that it's mostly the other direction).

> I think there's value in reducing the politically privileged's means to dominate their power over the general populaced

Cryptocurrency doesn't do this.

Cryptocurrency hasn’t done this yet but it certainly has the potential to do exactly this.


The simple fact that you ask this question tells me you don't live in india, where a few years ago the government straight up deleted quite a lot of personal wealth by declaring the two largest notes worthless with mere hours of warning:


The original statement was:

> I think there's value in reducing the politically privileged's means to dominate their power over the general populaced

We can argue whether there's value in that. But if you're asking /how/ bitcoin et al can do that, the answer is that it removes direct control over the currency from nations and parliaments.

They may still be able to wield indirect control through a variety of other means, but that /is/ less control than simply being able to declare 500 and 1000 rupee notes valueless.

As long as you can't buy food or pay your electricity bill with any cryptocurrency, you haven't achieved any of these things.

So the question becomes, why should the supermarket or the utility company accept crypto payments instead of dollars, when they know the former can lose 20%-99% of its value overnight, while the value of the latter is guaranteed to be kept stable by the government?

The key word in this discussion is potential.

Ah, but you don't need crypto to have that potential. Anyone could issue their own currency, and try to convince people to use it for actually buying and selling stuff. But that convincing part is really the key, and crypto very explicitly doesn't solve the problem that businesses will need to trust the issuing entity before they switch to using a new currency.

People and companies want to have a central, stable issuing authority they can trust.

>Anyone could issue their own currency, and try to convince people to use it for actually buying and selling stuff. But that convincing part is really the key

Absolutely true, see EcoCash. It's a fascinating case study.

>and crypto very explicitly doesn't solve the problem that businesses will need to trust the issuing entity before they switch to using a new currency.

Trust is a relative thing. EcoCash is issued by a mobile phone provider. That should be crazy (who would trust verizon to issue currency?) except that _literally no one_ trusts the Zimbabwean government to issue currency any more, so the phone provider won by dint of a) being in the right place at the right time and b) being relatively more trustworthy.

Actively building trust is something you need to do if you've got a pile of venture capital burning down that you need to pay back before you go broke. However, cryptocurrencies are usually not VC-backed products, and therefore don't have time-bombs strapped to them. Bitcoin is doing extremely well in Venezuela right now as faith in the bolivar drops through the floor. Cryptocurrencies are at this point extremely well position to be conveniently accessible any time people's faith in their national currency drops enough for them to start looking elsewhere. This is a slow burn situation.

>People and companies want to have a central, stable issuing authority they can trust.

I'd love to see a citation on that. People trust a wide array of deities and insist that the deities other people trust don't exist. This is a Homo economicus argument, it seems unlikely that we can quantify what people want and how they trust so easily. My anecdotal observation is that people want to have something that sounds plausible enough that they feel comfortable not researching the details. If people wanted a central stable issuing authority they wouldn't accept fractional reserve banking.

> > People and companies want to have a central, stable issuing authority they can trust.

> I'd love to see a citation on that.

Didn't you just provide two examples yourself (Zimbabwe and Venezuela) that alternative currencies are being adopted precisely due to the lack of a stable central issuing authority?

It's not just the stability but also the direction of the change.

Where I live is irrelevant to my reasoning so I'm not sure why you brought that up.

Cryptocurrency doesn't diminish a government's ability to enact financial policies within their sovereign borders.

Typically, states control the money supply, and typically in the direction of impoverishing laborers to fill the pockets of privileged interests. Diminishing this power alone could be transformative.

Cryptocurrency doesn't cause a government to lose control of its money supply.

It doesn't, but it does bring competition to the government controlled money monopoly. Competition is generally seen as a good thing for the majority of people

I guess it technically qualifies as competition because it exists, but in reality it isn't at all competitive. If it were, and the government cared to stop it, it could just make its use illegal. That wouldn't kill it, but most people wouldn't use it because there's nothing to gain using it and only to lose (unless you were doing something illegal already).

Good question. Definitely yes. Why would I pay middlemen (banks) when there is no need to? Also why would I trust them, when there is no need to?

> Why would I pay middlemen (banks) when there is no need to? Also why would I trust them, when there is no need to?

Payments are only relative small function of financial sector. Much more important is to act in credit markets, i.e take deposits and issue loans. How did you think that crypto removes need for fees (interest rate) and trust in those applications?

I see this as a disadvantage of using banks. They act as if you can freely access your money in your account, but actually you can't. That money is loaned out for the most part, and it's a trick that keeps the current system going. But once you have a bank run, reality will kick in on how banks really work. At least the cryptocurrency that you own is really yours today. The numbers on your bank account are yours some day.

Most people I've spoken with about crypto prefer the way banks work. The idea that losing your keys means losing your money, with no recourse, terrifies them.

> no recourse


- Backed up dat file - Backed up wallet password - Recovery phrase

There, now you have 3 separate ways to not lose your btc!

you also have 3 ways for someone to steal it !

> The idea that losing your keys means losing your money, with no recourse, terrifies them.

All the more incentive to not lose them!

So, how would you then like to arrange your mortgage if banks are not allowed as intermediaries managing the credit risk between depositors and yourself?

Banks could still lend out cryptocurrency, but in that case you know it is lended out (because you don't have it).

In other words, banks multiply money right now, but you cannot multiply cryptocurrency.

It's much more honest and clear.

But I would still as a depositor have the promise from the bank that the bank will give me back my cryptocurrency when I want?

If I do, there is practically zero difference how banks would work with crypto and fiat. And that promise can be used as money just like it can now with fiat. Thus banks would be able to monetarily multiply crypto at will as well.

If not, well, how exactly are you planning to stop me and my bank making such a contract? You know, the bank can pay me some interest on my savings is I let them lend the money forward, so both banks amd my incentive is to allow the lending of my deposit.

In practice, there would be 1 big difference: payments are made in cryptocurrency, not in bank credits. And this difference has an impact on all the rest.

We use bank money now because it's more convenient than paying with gold. But imagine that paying with gold was more convenient and preferred. In that case, we would see money in the bank as an investment, not as a wallet.

Your employer does not wire transfers money to your bank, but to your wallet. He pays you "in gold" so to speak. Same when you go shopping etc. There is no bank involved in transferring money anymore.

If you put money on the bank, you cannot use those credits to pay other people, as you are able to do now. Because people expect "gold", not bank credits.

You are correct that in a cryptocurrency world, banks could still have fractional reserves. But the main difference is that there will be a clear distinction between "real money", which is cryptocurrency, and "bank notes", which are a promise of the bank to pay you cryptocurrency. Right now, you cannot make the distinction between the two.

This is also the reason why they were able to let the gold standard disappear, because nobody would notice. If everyone trades in gold, the gold standard cannot just be abolished.

Basically a cryptocurrency world is a gold standard, where gold is the preferred way of paying.

This would also mean that banks will go back to how they operated when there was no central bank. And even further back than that, because payments are more conveniently made with "gold".

Basically everything you just said is already possible with USD instead of Bitcoin. You could demand your employer pay you real cash instead of bank credit, and so on.

The reason nobody does this is because there is no good reason to -- banks in the US are extremely reliable and trustworthy.

I live in Europe, so no, I do not have USD in my bank account.

What if my real employer doesn't live close to me because he's in a different country? Should he send cash in an envelope? Which cash? The one from my country? From his country?

What if you live in Venezuela, would you still trust the government money?

So no, this is not possible with USD bills.

> banks in the US are extremely reliable and trustworthy


"Massive bail-outs of financial institutions and other palliative monetary and fiscal policies were employed to prevent a possible collapse of the world financial system."

Cryptocurrencies are not a replacement for banks; they are a replacement for gold.

If cryptocurrencies ever become mainstream, banking services will be built on top of them, just as they were originally built on top of gold.

The only thing I can think of that cryptos let you do cheaper than banks is rapid, relatively frictionless funds transfer, so I’ll admit their utility there. But other than that, what banking services do cryptos give you?

Loans, money transfer, storing your money are all things that can be replaced. Seems like a decent chunk.

Loans no, not at all. Money transfer for coin is extremely inefficient. Volatility makes crypto a terrible place to keep money.

Besides, you're paying for the legal and institutional protection anyway. If crypto made money transfer more efficient, they'd use it and still have the value add of a large institution backing transactions.

I thought we were talking about the hypothetical situation where crypto becomes amazing and not at the current state? Of course, crypto can't replace banks as it is now…

> Loans no, not at all.


$80M DAI issued so far...

That's only useful as a hedge for ETH. A mortgage where you have to put down 373% of the value of the house in liquid currency as collateral is not competitive in the slightest.


Sure, but I'm responding to the disingenuity or possibly the ignorance of saying "no loans, at all."

absolute control over your money

Again, nothing stops you from keeping gold under your bed. The reason people don’t do this is because most people don’t actually need, want, or care about having absolute control over their money. And the probability of your home being robbed is much higher than that of your bank (and the FDIC) becoming insolvent.

A government can steal your gold an outlaw it, as the US government did in 1933.

They can also try to outlaw bitcoin, but they have a bit more trouble stealing it.

> Again, nothing stops you from keeping gold under your bed.

Can I transmit my gold in any quantity that I want to anyone in the world with an Internet connection for a few dollars in fees?

> Also why would I trust them, when there is no need to?

Because your alternative is to trust the crypto infrastructure, which is far less trustworthy.

what do you mean by crypto infrastructure? you mean the code or the miners?

actually banks have failed in the past, this infrastructure not yet

>actually banks have failed in the past, this infrastructure not yet

Man, what are you talking about? There's a new "$100 million in coins go missing" story every 6 months.

Crypto 101: never let anyone have your private key. No-one who religiously followed that rule has ever had their crypto stolen.

Coins go missing from exchanges, which break the basic private key rule. People use exchanges for convenience because as clever as cryptocurrency is, it has no answer to the exchange problem.

> never let anyone have your private key. No-one who religiously followed that rule has ever had their crypto stolen.

Bullshit. No "religious" following of rules can protect you against a zero day exploit somewhere in your system.

I didn't say it always will, just that it has so far.

>it has no answer to the exchange problem

Actually, there are smart contracts which act as exchanges. Not for all currency pairs yet, but it's on the way.

Crypto 102: regular people will never use cryptocurrencies if they have to guard their private keys without a fallback in place.

The infrastructure of both payments for goods and services, and for storing your assets.

As of now, paying for goods and services with cryptocurrencies is relatively risky; it's hard to get recourse if you're scammed; and the standard credit card infrastructure with chargebacks and fraud protection is comparably more trustworthy.

As of now, storing cryptorcurrencies is risky. And I'm not even talking about the shady brokers/exchanges that can steal or lose their customer's money. You can store it yourself as well as you can - but, as it turns out, most people aren't that good at storing it securely, so all kinds of risks and breaches (e.g. hacking your devices to get access to your secrets) are more common than for bank accounts but, also, the consequences are more severe - if your bank account gets drained in an identity theft attack, very often these funds are recovered or compensated, not so with crypto. So again, the existing financial infrastructure with regulation, FDIC or similar insurance in case of fraud or insolvency, mandated consumer protection in case of scammed credentials - it's more trustworthy than the commonly used processes&procedures&infrastructure of crypto storage.

I don't understand you are talking about theft? like what happens to banks and jewelry stores? like what was happening every day with dollars on far west? and somehow this invalidated the cryptocurrency narrative? how?

I mean all of it in aggregate, and it has failed many, many times.

First link on Google for "Bitcoin Hack":


I believe they were talking about the Bitcoin network and protocol, not an exchange that someone built.

But muh decentralization! /s

In reality most of the exchanges and sites dealing with crypto were (and probably still are) built by absolute amateurs with no checks and balances on their apps from a security perspective. Its scary as hell that people trust those sites with their actual money.

The recent QuadrigaCX fiasco shows this very clearly. The entire exchange (one of the biggest in Canada) was somehow just running on the encrypted laptop of this one guy, and after he suddenly died in December, there is 250 million Canadian Dollars owed to 100k+ customers that nobody can recover, because the guy with the password is dead.

Minor correction: the exchange wasn’t running on a laptop. It was run on systems you’d expect it to run on.

What was stored on the encrypted laptop was all of the cold storage wallets containing the majority of the digital assets.

No less idiotic, but an important factual distinction.

Aha, this makes sense. (Wikipedia states that the exchange was running on his laptop, which I did indeed find curious/impressive.)

I'd answer in the negative here.

Most cryptocurrency fans seem to be optimistic investors looking to join in on the massive returns seen by investors in 2016-2017. Most of them care more for generating 'hype' and seeing an increase in the value of the coin they hold, just so they can dump their holdings later. I don't think they'd be too interested in a coin that inflated in value that they didn't hold (they'd probably instead promote something they did hold). Most cryptocurrency fans do not hold one particular coin, and generally change which coin they advocate for pretty often.

Cryptocurrency communities are generally pretty toxic and non-constructive environments. I've been part of a couple, and I've noticed multiple times a massive decline in the quality of the community (and, sometimes, in development as well) as the cryptocurrency got more popular (and more people joined the community).

Yes, as far as I am concerned. There has been a nontrivial number of instances of the payment processor oligopoly wielding its power against things that I care about (by preventing certain companies/institutions/organisations from using it) in the past decade, and I want that sort of thing to become impossible.

Why does everyone, especially within crypto, seem to believe a One Coin theory?

Plurality is the name of the game. History has endless examples. Yes nothing would last but...the better monies would move to a better monies. It's called competition. There is very little competition when it comes to monetary policies. Crypto will foster more of it. It can get messy but hopefully it won't get deadly.

The question also presumes that all cryptocurrency fans want cryptocurrency to replace fiat currency in general. I mainly want cryptocurrency to get a niche like what PayPal has. A decentralized PayPal sounds good. It doesn't need to overthrow governments in order to useful.

Yes, although ironically I might not end up using it much if at all. But it'd be good to have it even so.

The reason is that I think that while governments can be better at monetary policy, they need competition to keep them in check. Other currencies technically provide that competition, but they can be suppressed via legislation in a given jurisdiction, and this is, in fact, commonly done precisely where such competition would have practical sense (e.g. countries with hyperinflation often try to regulate and even outright ban currency exchange; or the various historical bans on private ownership of bullion gold in many countries).

Bitcoin is always there, available to anyone who has Internet access and can get past "great firewalls" (and when people's money are at stake, they are surprisingly good at learning such things). Consequently, the government can only do so much to its own money before it starts losing that competition - Venezuela is one ongoing example.

Anyone who answers no isn't a fan of cryptocurrency; you're asking the wrong people. Those people are just fans of getting rich on the latest fad.

Those of us who have been here since the beginning just want cryptocurrency to succeed and flourish and fulfill its roles, and we already know Bitcoin won't be the answer so we're all waiting on The One True Coin.

Looks like a True Scotsman to me (https://rationalwiki.org/wiki/No_True_Scotsman)

I mean, if your thesis is something like "the embarrassing truth is that the vast majority of Scotsmen is actually people born and raised in Kazakhstan", then yes, you will get the response that Kazakhs are not true Scotsmen and there is nothing particularly fallacious about it.

No, there is a real distinction here.

Someone who is a fan of cryptocurrency itself is a fan of the ideas behind it and what it can bring to the table. People who are only satisfied in the outcome if they become rich are clearly not interested in the real benefits of cryptocurrency. So asking fans of cryptocurrency this question is a waste of time because the answer should be the same.

The point of my comment was to highlight to OP that they have a categorization problem. Just because a division exists doesn't mean you get to call No True Scotsman.

Yes, if it means that my government cannot create inflation anymore.

Why do you think moderate inflation is bad?

I don't think the issue is controlled inflation. I think the fear is of rapid inflation caused by governments struggling to make interest payments, which could cause the value of any cash or bond positions you have to effectively go to 0.

Similar reason people find gold appealing I suppose.

Intentional debasement is one way of getting out of very serious national financial problems. It is unpleasant, but it's chosen (or, more likely, can't be prevented) because the alternatives are worse. If you make this option impossible for your government, you're setting up your country for some very bad consequences the next time in some economic disaster it would have needed to have that rapid inflation, but can't have it.

Hyperinflation is a symptom of economic problems, not the origin of it. If you find a way to prevent nominal inflation by crypto, it doesn't prevent the related problems. There's a good reason why we got rid of the gold standard, which had all the same problems as a crypto-based economy would have, and was unsustainable because of that.

Since you mention bond positions, if they'd were denominated in non-inflationary crypto, in any such scenario they'd drop anyway - if it wouldn't be possible by inflation, then it'd happen by defaults. Which would also mean a default of all credit institutions. Which would then mean the disruption of most businesses who rely on these institution. Which would then mean nonpayment of salaries. Which would then cause a lack of demand, causing even more economic problems. Compared to that, a semi-orderly inflation (up to the extent that is required) is preferable to a cascade of defaults. The vast majority of the money in economy is anyway in the "I owe you" form, and crypto doesn't change that; even if all the economy would move to a cryptocurrency, only something like 2-5% of it could be in the form of "hard coin that I control" and the rest of it is in debt relationships between various businesses.

It sucks to get paid in some paper that's now nearly worthless - however, the alternative isn't to get paid in hard crypto, in such a scenario the possibility to get paid in full doesn't exist. So if we don't have the possibility to get paid in a devaluated currency, then people either don't get paid at all, or have to suddenly invent a new worthless paper currency and build an infrastructure for it, at a time when they don't really have the time and resources to do it. This isn't a hypothetical example - such "currencies" have developed in e.g. various long-term conflict zones.

> Intentional deflation is one way of getting out of very serious national financial problems.

How so? For a net debtor, deflation is potentially ruinous.

My bad, I meant intentional debasement or "printing extra money" or intentional hyperinflation scenarios, not deflation.

Why do you think his government stopped at "moderate"?

Because moderate inflation can very easily turn into high inflation or out of control inflation if left up to imperfect humans.

you can create a crypto with some pre-set amount of inflation to make up for e.g. lost coins. or create inflating derivative securities. though, having inflation in a single globalized market doesn't make much sense, as there are no competing economies.

YES!! Emphatically Yes! I travel quite a bit. I would much rather have 1 wallet no matter the digital currencies than have 10 physical currencies at dubious future value.

Generalizing to be applicable to any utopias: ‘Would you be happy if the utopia you bring up happens in the next 10 years, but you lose some or most of your savings?’

When Bitcoin first appeared I thought it was some fly by night scam. Their talk of it being anonymous seemed to be at odds with the technology that put every transaction on the public record forever. Like you could buy drugs with the money, but as soon as you tried to convert it to real money you'd be busted. Or if you ran it through one of those money laundering services, then you'd still be busted as soon as you withdrew the laundered money. For that matter, I expected at least one of the laundering services to be run by the feds so they could get a wealth of data about the people who need to launder money and where it is coming from and going to.

I guess I put too much faith in law enforcement.

I think that's a fair question; A good litmus test is people who had bitcoins prior to 2012 (arbitrary date), I had friends who mined bitcoins because they thought it was "cool" and because they liked the idea, not because it was an investment.

Personally the computational overhead makes me weep a fair amount; we're simultaneously trying to save the planet while making our payment methods several orders of magnitude more expensive in terms of power. But if there was a "coin" that was comparative in terms of energy expenditure with what currently exists then I'd be more than happy to "lose" my wealth in other coins. That is a very low price to pay for such a system.

There’s definitely a net loss from mining (at least while PoW coins are still en vogue), but I think it might not be as large as you’d think, since there’s a rather large energy reduction in the form of criminals and others who move money around without governments’ consent, no longer requiring secret boats and planes and air-conditioned vaults to transport physical cash in.

Proof of stake is likely to make that energy expenditure obsolete over the next several years.

It's not like gold's price went to 0 (more precisely, to the level of other noble metals) after the end of the gold standard. Bitcoin might well remain forever as a sort of digital gold with its (entirely stochastic) ups and downs. And why would people invest in a currency just because it is circulating? People invest in dollars because it's stable, not because it circulates a lot (more accurately, in derived products such as bonds, anchored to the US State, not on the dollar printing machines).

and yes i think most cryptocoin loonies want any one of them to succeed , the potential is so crazy high, that wishing otherwise would be foolish

This articulates pretty well something that I've tried to express about how I feel about cryptocurrency before. I don't own any, even though I've worked on a distributed application based on Ethereum and love the concepts because I was worried that by owning any coins I would be less trustworthy as a true believer. On the other hand, without any, I'm worried that I may seem as if I don't really believe in it, as I haven't put my money where my mouth is.

Anyway, I would love cryptocurrency to succeed, and in an efficient manner (say we get all the problems worked out of proof of stake).

Great point, not to mention the fact that big banks and investment corporations have dabbled in existing crypto. Those big organizations are even less likely to support the one true coin you speak of.

I'm into cryptocurrencies (Bitcoin, actually) because it solves a very specific problem that might apply only to my country.

So, anecdote: I live in Argentina, work for an UK based company. been doing that for the last 10 years.

Before I could trade bitcoin in an almost frictionless way (I.e., before I discovered Localbitcoin.com) my routine was to go to the ATM after the payment got into my european bank account, do a few extracts per day, rinse and repeat until I got all the money I needed.

Rate per extraction was around a few euros if I didn't hit minimum, to a certain % (That at times could be 5%, but can't quite recall as last time was 6 or so years ago). Minimum depended on the current economic situation of my country at the time (I suppose I don't need to explain that).

So, why not wire the money to your local bank account, you might ask?

Well, last time I checked (I moved a year ago to Buenos Aires and haven't checked how it goes here because I don't need to) the process for wiring money to my local bank account was as follows:

(Argentina is not inserted into the international SWIFT system !!!) I had to wire the money to a specific bank account in the US, that belonges normally to the bank I was checking, but couldn't really say. I had to wire the money there from my european bank account with certain conditions, so it could be recognizable that the money belonged to me.

Then, after some time (Could be as short as 2 weeks, but no bank would assure it would work like that every time, and wait times of 1 month or more were totally possible, considering how the Argetinian banks operate, i.e., mob-like) I would get my money _in the local currency_ with the corresponding loss due to exchange rates. AND (that's kind a really big AND, I need bigger caps) the "charge" for the operation was around 100 bucks. PER OPERATION.

"Thats too much" I said. "Yeah, people tend to group operations in half years so transfer is justified" was the answer I got.

I tested this at 3 different banks, got the same reply in all 3. Seriously.

So, now I trade bitcoin. I buy them in the UK, transfer them to my wallet, and use a broker to get the money in my account. The broker takes 2% on all operations, plus their rate is around 2% below of the current BTC price, but I don't mind. At least I'm getting ripped by somebody I want to get ripped by.

And then we have the speed issue: Since Segwit, it can take as little as half an hour to do the whole operation.

2 months ago I woke up with the money in my EU bank account (I'm not an early raiser, may I say), and by noon I had completed all operations and was just waiting for the broker to deposit the money in my local bank account.

BTW, the reason for me using a broker, is that minimum operation volume in LocalBTC is 0.2 BTC, and with the price hike at the middle of 2017 that became a problem; that, plus mostly everybody in Argentina that deals in BTC are fucking histerical trying to do a quick buck, so they start getting nervous if they don't close the operation in under 30 minutes.

And just in case you want to know how the banks operate here, another anecdote:

The dollar fucking doubled it's rate between May and September last year. The measure the gobernment used to stop the rate rise was to take the credit rate to above 70% (Yes, that's a seven followed by a zero).

Then, a lot of people here manage their finances both with credit and debit cards, because it's a lot easier (Unless you want to be carrying a lot of bills in your pockets).

So, what do banks do? They fuck merchants over, by delaying as much as they can transferring the money, because they put that in the financial market (We're speaking in the weeks here, above 3 of them). Even with the fines and shit, they are making shitloads of money. So, that mean that merchants get fucked over twice: they don't get the money in time, and when they get it prices might have changed a lot, so in a lot of cases they end up losing money.

Regarding the questions re:cryptocurrency I'm here for a long time, not a fun time. I mean, I have no problem if I have some fun with it, but it's not the end goal. And it's going to be fun if crypto takes off, as countries / governments are going to have to deal with the implied loss of power.

Are you sure Argentina isn't part of SWIFT? That's insane if true. A quick google search suggests otherwise:


OK, right. You are totally right, I under explained. Even thought _theoretically_ Argentina is part of SWIFT, it's not being activelly used. I.e., bank accounts do not get assigned a number in the SWIFT system, thus making it impossible to receive an international transfers.

The banks where I checked where #52, #55 and #77

All in all, I received the same information in all 3, even thought they all have a SWIFT code assigned (So that probably mean they don't even have a registered account for the bank).

Here's a page from a rather large bank, where the process is exposed:


It's in spanish, but if you click in either "Dólares" or "Euros" you get some bank icons below (3 in "dólares", 2 in "euros") with the details of the bank accounts where you could send the money. For any other currency, you have to call to get the instructions.

Can't get any more clearer.

Here are 2 other documents form another bank. These are pdf documents, the 2nd page of each document is in english:

Deposit in euros [1] Deposit in dollars [2]

[1] https://www.santanderrio.com.ar/banco/wcm/connect/d475bed5-9...

[2] https://www.santanderrio.com.ar/banco/wcm/connect/08c65dcd-d...

Transferwise does £ to pesos. Fees for £1000, £11.88. Rate 50.06 vs google saying the market rate is 50.07.

By the way if you are buying BTC, Kraken is much cheaper than 2% (more like 0.2%) and I think they take GBP.

It does sound like the banks are iffy.

Transferwise does £ to pesos, to where. As stated, bank accounts in the country do not have a SWIFT code assigned. You have to triangulate the money (Please check my other comments below). Re: Kraken, the 2% I'm talking about is in the local broker I'm using to convert BTC to pesos. I doubt Kraken can help me there. Not to mention that that Kraken is an exchange. A completelly different bussiness model to Localbitcoins.

To Argentina https://transferwise.com/gb/send-money/send-money-to-argenti...

I'm not sure you need a swift code, probably just a bank account number/sort code.

>The recipient gets money in their currency directly from TransferWise''s local bank account.

I have not tried Argentina as I have no business there but have sent money to Indonesia which is another tricky place and it worked fine. Fair enough re Kraken - they do GBP to BTC, not BTC to pesos.

> probably just a bank account number/sort code.

Dude. Each country has their own way to sort stuff internally. For instance "sort code" is not something you find in countries like Spain (I have a bank account there; sort code is something found in the UK).

Nor are they found in this country. Here, we have what it's called CBU (Uniform bank key).

Again, when you go to a bank branch, _IF_ there's any relation between your bank account and a SWIFT account, they never tell you that information

And, considering that even in the cases you agree to do the transfer, you do not do that to a bank account in the SWIFT system that belongs to the branch but to a bank account in another country, I doubt we are integrated.

You can call me a fan, I at least think they are cool and clever, and I like the idea. If a magic coin comes along and is the one true coin that elegantly solves all current problems, I'd think that was great. I don't currently hold any amount of crypto with any hope of getting rich off it.. so it wouldn't really matter to me.

Absolutely. When I first read about Bitcoin back in 2010 I loved the concept but didn't buy in until 2013. I've happily supported and followed other crypto projects. I've bought into about 5 but follow about 10-15 of them closely.

An overnight crypto miracle won't happen, by the way. Money is too important and requires too much trust for an overnight success to occur.

Every year that the BTC network runs without a major exploit, is another year of confidence in the network protocol's security. Unlike some software categories that are prone to rapid disruption, money is not one of those things.

Disruption occurs a lot slower for very important reasons. People have to trust in a crypto currency in order to store value in it and exchange value for it. That takes time, to test in production if any major exploits exist.

It's not trivial what Bitcoin has accomplished this far.

I would be fine with that, but I am not hugely into crypto. I have a bit of BTC somewhere. I considered the money gone as soon as I got it. Had gotten a chunk of money and wanted some of it to go somewhere where it could theoretically make me money. I did increase it at one point by going from BTC to Tether after prices went up, then back again on a dip. I don't even check its worth anymore, it's $100 or less I think. Just a little fun thing. Crypto as a concept still seems interesting to me even if it's not a major interest of mine. Similarly I think ipfs and freenet and such are cool, but have yet to get involved with them.

That's fine with me as long as it maintains the purpose of the original; to disintermediate the state and political authority from money, and to create a ledger which they cannot tamper with, confiscate, or spy on.

>This is a long way of asking: do you want cryptocurrency to succeed if you knew that you could not profit from it doing so?

You seem to be assuming that anyone interested in crypto is in it for the money.

I assure you, that's not the case. To me, getting the money supply out of the clutches of governments is the most important aspect of crypto-currencies.

To answer your question: Which crypto wins and how much it'll be worth are the last of my concern, as I will profit, along with all of society, from getting the govt to surrender management of something they're basically terrible at.

You don't have to ask that question. If they really cared about the tech, they would make sure their tokens are not deflationary.

Deflationary tokens are not much good as a currency but they are good as a Ponzi scheme.

I think here's your answer: It isn't just about the tech.

This is what most "blockchain" enthusiasts get wrong. They think it is just about technology, and thus, they can come up with "a better bitcoin."

They're missing that the predetermined monetary policy is the key innovation of Bitcoin, and that by creating a new "blockchain" which prints new money, they are shooting themselves in the foot, because they can't ever be "a superior bitcoin" when they have inflation as part of the parcel.

A free market does not really care about whether some people have the opinion that deflation is bad. At the end of the day, nobody can change Bitcoin's monetary policy, and it will be left to the free market to decide whether or not they are going to put their money in this, or whether they're going to bet on inflation.

A predetermined monetary policy is fine but the fact that it is predetermined to be deflationary is a fatal flaw.

I would have much more faith in a cryptocoin's potential as a currency if the predetermined monetary policy was something like Friedman's k-percent rule: https://en.wikipedia.org/wiki/Friedman%27s_k-percent_rule

Of course this would vastly reduce the Ponzi aspect for early owners which might remove most of the appeal.

And I still wouldn't have much faith in it since I doubt being decentralized is enough of a benefit for people to switch away from government currency and normal banking.

> At the end of the day, nobody can change Bitcoin's monetary policy

A majority of hashing power in the network could change Bitcoins monetary policy.

No it couldn't.

A majority of hashing power attempting to change monetary policy spins off a forked coin which does not have economic value because it does not have economic users.

If the overwhelming majority of bitcoin users (98%+) wished to do so, they could possibly change the monetary policy. Of course this will never happen, because there are die-hards like myself who will always stick with the non-inflationary bitcoin.

And then, the market decides whether to stick with the non-inflationary coin, or to use an inflationary one.

The worst that a majority of miners could do the the non-inflationary bitcoin is temporary denial of service, or attempted double spending of their own money. It's going to cost them an awful lot in electricity to try either, and they're not going to get that money back unless they're generating coins that are in demand to buy.

People need to stop misusing "Ponzi scheme" for anything they think is a scam. A Ponzi scheme is quite specific, if you're just thinking of people trying to sell something to "the next idiot", call it a Pyramid scheme (although I still disagree that it applies to Bitcoin).

Yes, and I'm heavily vested, mainly in ethereum. I would be bummed, don't get me wrong, but it would give me hope for us all to get along more internationally.

The counter is that if that crypto really became that used, you'd begin being paid in it.

There was a brief moment where companies began paying employees in crypto.

you are describing an impossible scenario where nobody notices but overnight it becomes a global standard. if you actually make a scenario that is possible you will see most people would have time to switch to the other and the original will slowly fade. no problem with that. dollar will sometime fade too for something else as all other currencies have done in the past (google some charts online)

Yes. I'd be quite happy with that. I can generate value; the hard part is keeping that value safe. That is what crypto offers.

> do you want cryptocurrency to succeed if you knew that you could not profit from it doing so?

If the cryptocurrency was at least somewhat open and efficient, then I would be extremely happy. If it was more like a payment layer that only a few large banks could use, I would be still be happy, but much less so.

I would assume you would get mixed responses as cryptocurrency "fans" are not of one mind.

Can we focus on an interesting discussion instead of the usual

That highly depends on the amount (in USD) at stake:

$100: Absolutely.

$1000: Tough, but I'd do it if it meant the promised change to financial services

$10000: Unlikely, I'd rather keep my non-perfect coins

$100000: No way.

I would be delighted because imho it would make the world a better place.

However if there is a slight chance I might profit from it, I'll gladly take those odds.

Speculation is not really a point. It's a temporary method of popularization, because people can't be reasoned with in other ways.

Yes of course! But it needs to be a proper cryptocurrency. Which means worldwide, feeless, instant transactions.

Yes, a million times yes.

Most of us involved since early times ( <$1 / BTC ) were intially attracted to the libertarian ideal of a decentralized currency. Like gold, it's truly yours, and nobody can take it from you if you control the private keys.

I want a cryptocurrency which is egalitarian - evenly distributed among people in the world, rather than one in which a few people own the majority and profit hugely.

Yes! And I think there is one aspect of Bitcoin that is precisely backwards in relation to both this and the energy crisis: proof of work is a substitute for proof of identity so it can be anonymous.

Imagine a currency that everyone is born with a certain amount of, with the only price of admission your ability to prove your identity. Suddenly, we have solved the problem of proof of work for allowing this to be a distributed ledger since the trust can be based on reputation. Also, we can impose limits such as perhaps a logarithmic scale of wealth interpretation, where ten million dollars isn't all that much more than one million, if it's all in the hands of one person.

The digital age could be an age of fairness, if we choose to use these tools to design a fair game instead of an unfair one. Note that I mean "fair" not in the sense of two people starting out exactly equal, but where the winner can use their advantage to win more over time until the "match" is over, but one that tends towards a fairness equilibrium, where the advantages gained by one person or group over others are minimized over time or at extreme scales.

This is how I write when I have gotten less than 4 hours of sleep, but hey, I can dream. :)

Okay, let's "imagine a currency that everyone is born with a certain amount of". Assuming that I predict that this currency is going to be valuable, then I can invest $100,000 to organize a shipment of rice to some poor African areas where this thing isn't gaining traction yet, and offer to trade everything that they've been born with for a hot meal. And it (or similar strategies) would plausibly succeed to some extent. See the biblical example of Esau's birthright for an obvious analogy.

Would that be a new age of fairness?

I don't think you could possibly have a decentralized proof of identity though.

The discussion is not about cryptocurrency anymore at this point

Actually Dogecoin was a major hit.

An early adopter will always have an advantage over somebody who gets on board later. The only way you could prevent this is by actively punishing early adopters. Good luck achieving adoption if you try this.

It suffices to not punish the late adopters (something that admittedly the vast majority of cryptocurrencies do).

Bitcoin doesn't punish late adopters, it just does not give them the same advantage as the earlier adopters. Somebody who adopts Bitcoin today will still have a major advantage over somebody who adopts it in 10 years from now, but it might not be of the same magnitude as the people who adopted it 10 years ago have over the people who adopt it today.

The decline in rate of inflation is what prevents punishment of the older adopters. Inflation is inherently punishing of people who are saving an asset, because it steals value from them, or at least would do if demand didn't outpace supply.

If bitcoin offered the same reward to newcomers as it did to the people who adopted it 10 years ago, then nobody would've adopted it 10 years ago, and the result would be that everybody is punished, because the world at large would've ignored a great innovation.

You can't have both! Either you punish the savers by taking value from them and giving it to newcomers, or you let savers keep their value which pushes up the price for newcomers as demand increases. Socialist ideology fails to understand economics as usual.

Now you might argue that the rate of bitcoin's reduction of inflation is just too high, and should've been more gradual, or over a longer period of time. There might be some merit to that idea, but nobody could've accurately guessed the rate at which adoption would occur for a brand new technology.

After everyone is aware of what Bitcoin is, it doesn't really matter how long you make the halving. There will still be risk-takers and there will still be laggards. Some of the laggards will leave it until they can no longer go around with their eyes closed and must acquire some Bitcoin in order to make some purchases. Others will acquire it now (and 10 years ago) even when it is an extremely risky investment. Most people are somewhere in between.

So you have the option right now that you can either: Acquire some Bitcoin while it is apparently still cheap (relative to where it may be in a few years)

Or you can: Chose not to acquire some bitcoin because you think it is overpriced, and in a few years, complain again that bitcoin is overpriced, when it is worth significantly more than it is today.

Late adopters punish themselves by ignoring economic reality, either intentionally (because they are driven by ideology), or accidentally (because they don't take the time out to learn). Once you grasp it, there is only one direction which bitcoin can go over the long term.

What happens on Day Two?

The people with businesses get a lot of the new currency from the people that need to work for a living and we're back on track to be right where we started.

A currency is just a measurement device, it's not a replacement for resources, I don't know why people forget that so often.

Way to hit at the heart of so many issues.

A problem, imo is that these cryptocurrencies are pieces of software developped by anybody.

This means a new one popping up every month... Which in turn means that they are useless as currency.

Just like clone of Facebook is instantly as valuable as Facebook?

Are cryptocurrencies any use as currencies? No.

Exactly. Cryptocurrencies are a pipe dream unless they can be effectively and fairly distributed first.

Care to link those two unrelated concepts together a bit better?

Money isn't effectively and fairly distributed and it's obviously not a pipe dream.

money have replaced values already owned by people

it didn't pop-up from nothing

crypto currencies need to be acquired using either real currencies or through some form of mining, that requires real currencies to acquire the resources needed to bootstrap it

the crypto space is already a place where rich got richer, less rich got sometimes more rich, most of the times nothing changed for them, really poor individuals from really poor countries couldn't even get started

Couldn't get started on what?

The point of cryptocurrencies wasn't to make people rich. Anyone can buy in at market value and start using coins for their stored value. That is the point. Your anger in the fact that crypto didn't magically create money where there was none before is misplaced.

Really poor individuals from poor, economically wrecked countries had quite a lot to gain from the accessibility of cryptocurrency. Look at Venezela's attitude towards Bitcoin.

> Couldn't get started on what?

On owning them.

> Anyone can buy in at market value and start using coins for their stored value

Not everybody can, that's the point.

Almost nobody can, expanding the first point.

It's not really a democratic and open process.

It involves a lot of prerequisites that are usually not met by the general population.

> Look at Venezela's attitude towards Bitcoin.

You mean Maduro's?

AFAIK Maduro made bitcoin mining illegal in Venezuela and arrested more than a few miners.

Or do you mean the Petro Coin (a total scam currency) that Maduro tried to force down Venezuelan's throats?

> Almost nobody can, expanding the first point.

Now expand on this point. What about crypto is preventing people from owning some that isn't also preventing them from owning regular money?

> You mean Maduro's?

It's pedantic to differentiate between a State and its actors when discussing policy like this. I mean Venezuela.

I'm talking the Petro Coin, the raids, everything. The whole policy was a response to fears of increased economic freedom for Venezuela's poorest citizens at a time when the government was trying to offload the pain of its bad economic decisions onto them.

> The whole policy was a response to fears of increased economic freedom for Venezuela's poorest

No, it was a scam.

Money is more fairly distributed than cryptocurrencies.

Credit Suisse found that 97% of bitcoin is held by 4% of addresses (though some may belong to exchanges): http://www.businessinsider.com/bitcoin-97-are-held-by-4-of-a...

Addresses do not necessarily correspond to people or institutions. Those 4% of addresses could represent any number of holders. The other 96% of addresses could be someone's buggy script gone wild.

If you compared apples to apples, then, instead of people "all legal entities", aka corporations and sovereigns, would your analysis hold up?

And the top 1% of the American population controls around 40% of the wealth. In accordance with the power law, the top 20% of the population owned 86% of the country's wealth.

Still doesn't seem like a pipe dream.

Wealth, not money.

Money is heavily regulated.

Crypto are not.

That's circular logic. Wealth is equivalent to money.

Not really, the vast majority of wealth isn't in the form of money (cash or direct debt), it's in the form of ownership of non-money assets such as real estate and productive companies.

What is fairly distributed in this world?

[Using U.S. law as a convenient set of terms of art, not to be geocentric.]

The internet is a technical embodiment of the First Amendment (freedom of speech, freedom of press, freedom of religion, right of peaceable assembly, right to complain about the government).

Bitcoin is a technical embodiment of some of the Fifth Amendment (due process -- protection against deprivation of property, and even life/liberty if you accept the unremarkable proposition that it's hard to live freely if you can't buy anything).

Having these technical protections in place are important regardless of their impact on or benefit to any one person.

> Bitcoin is a technical embodiment of some of the Fifth Amendment (due process -- protection against deprivation of property, ...)

How is it in any way different than having money in your bank account? If the government wants to, they can decide to take all your money from all your account, but they can also decide to throw you in jail until you hand over the keys to your Bitcoins. In the end there is no difference.

In the second case, the money didn't move, and the government didn't get it.

Meanwhile, the Technological Singularity people are working on the other half of the problem you describe.

Ok, so how is it any different than having your money in a numbered account in Panama or Switzerland, which the government can't seize?

And what's this Singularity nonsense of which you speak?

No need for the hostility.

And if you want to have a discussion whether there are alternative ways to achieve specific valuable outcomes, count me out. This thread is about whether cryptocurrencies have any potential valuable outcomes besides the potential of lottery-style winnings for early adopters.

Sorry if I seemed hostile, but I couldn't find any better word than nonsense to describe what I presume you meant to invoke by "Technological Singularity". It's about as realistic and scientific as religious extremists telling us to repent and prepare for the Rapture.

Ah, but this unwillingness to consider "why couldn't we do this without crypto", leading to rejection of study of centuries of useful economic and monetary theory development, is precisely what predicates the failure of cryptocurrencies to achieve potentially valuable outcomes.

That's precisely why I bring it up. If a thing is a) valuable/useful and b) possible without cryptocurrencies, why has it not been done before? The fact that it has not, suggests that either a) or b) is false.

Guidelines | FAQ | Lists | API | Security | Legal | Apply to YC | Contact