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[flagged] How to Destroy Bitcoin (stephendiehl.com)
31 points by hudon on July 13, 2021 | hide | past | favorite | 31 comments



Author isn't wrong, just missing the point which is that regulators and politicians of COURSE know how to crush Bitcoin. The issue is that the "powers that be" WANT crypto to succeed and that's why you're seeing the kind of regulation that legitimizes crypto instead of the kind that destroys it.

Specifically: - the intelligence community loves crypto because it gives them more "digital trail" to monitor people and populations.

- policymakers love the idea of a central bank digital currency (CBDC) because it provides fine grained monetary control. Everybody would love to see a federally backed stablecoin replace USDT etc.

- the taxation authorities like crypto because it's a lot of net new revenue - millions of people are agreeing to tax themselves, and since transactions are all public, it's hard to hide.

https://www.forbes.com/sites/stevenehrlich/2021/04/13/janet-...


Bitcoin still has an important, legitimate use case: supporting legal businesses that have been ditched by the Visa and Mastercard circuits. Gab is one of them and, as much as you can hate it, it's still a very legal business that can't do business (if it wasn't supported by Bitcoin) because two private entities decided it can't do business.


Watch out, a horde of unwavering crypto supporters who still believe that it can somehow disrupt banking and change the world are currently converging on this location.


You don't believe it can? In some places, it already has.


I have two serious examples of interactions between the "legitimate" market and Bitcoin:

1. The Bitcoin ETF: https://cointelegraph.com/news/debut-canadian-bitcoin-etf-ne... 2. The CME Bitcoin Futures market: https://www.cmegroup.com/markets/cryptocurrencies/bitcoin/bi...

Also, it provides protection against hyperinflation for some, be it legal or not:

https://www.bbc.com/news/business-47553048

Not everything illegal is immoral. But I agree that there is an absurd amount of energy use and scams in the crypto ecosystem.


I read the first few paragraphs and he doesn't say why Bitcoin needs to be destroyed.

I don't think it needs to be destroyed. It will forever exist in the peripheries because it can not be used to pay government taxes and fees which need to be paid by every adult under threat of force and violence.


Stephen, I'm worried about you buddy. This is an obsession -- but it is one borne of your own ignorance. How someone can be so obsessed with something without actually understanding it is deeply troubling.

"There is no legitimate economy that transacts in bitcoin." Vastly, Deeply incorrect.

You are spouting authoritarian nonsense. Its not too late to open your eyes and see the damage you causing to yourself. Bitcoin, like the honey badger, does not care.


> Vastly, Deeply incorrect.

Sorry to be trite, but can you provide any evidence that there are legitimate economies transacting in Bitcoin?

As far as I can tell, Stephen is passionate because he recognizes various problems with Bitcoin: ecological damage, pyramid schemes, gambling, money laundering, ransomware, etc., and he doesn't see any actual economies benefitting from it that could overshadow all the negatives. Your comment seems to be more like gaslighting, trying to make him feel crazy while he's trying to make things right.



You're moving the goalposts... The question is: do you have evidence of legitimate economies transacting in Bitcoin today? The question isn't about potential use cases, it's about data supporting the story that Bitcoin is actually used today to support the exchange of legitimate goods and services.

Again, not links to white papers, ".io" startups, articles filled with "it is revolutionary" and such buzzwords, etc. The hype wagon is getting heavy. Where are the results? Where are the "Use of Bitcoin has been skyrocketing in X market" headlines, where X is not "ransomware"?


> The question is: do you have evidence of legitimate economies transacting in Bitcoin today?

So Coinbase Commerce [0] enabling thousands of Shopify [1] stores to accept Bitcoin and the like isn't a legitimate use-case?

[0] https://commerce.coinbase.com/

[1] https://help.shopify.com/en/manual/payments/alternative-paym...


My top two hits were that one and an article about scams, your Google mileage may vary.

Sorry, if you go through and read that article, it doesn't look good at all. No, cryptocurrency will not help us go green, just to single out the worst whopper. It was written in 2017 and suggests that payment using cryptocurrency for travel, online publication, etc will be widespread. Four years later, nope.


Moreover cheapair, kickstarter, etc actually price in USD, not BTC, bitcoin may be the mean of transport but it’s not the coin being used. Not a “legitimate economy that transacts in bitcoin”


There is this: https://www.reuters.com/technology/bitcoin-become-legal-tend...

and many other examples. Stephen is just wrong here, like, 6+ years out of date wrong. His arguments hold no water today.


You still haven't provided evidence of "legitimate economies transacting in Bitcoin". El Salvador accepting Bitcoin as legal tender in the future is not evidence that a legitimate economy has been transacting in Bitcoin in the past. One of the criticisms of Bitcoin is that skepticism is always answered with hype and promises, and you're kind of doing the same thing here... Where's the data backing up the success story?


As I understand it, people in the developing world with high inflation are putting their money into crypto. Also, people with money to invest put it in crypto (both the "very rich", but also regular slightly more technical or otherwise inclined folk). Both of these aren't day to day transactions though.


To escape inflation you buy dollars or even gold ingots, as always. Crypto is just a risky investment for that people, not savings.


If the environment is unstable in some developing country, dollars and gold are inconvenient to hold, while crypto is both easy to own, easy to /really/ own and also fast to transfer.

Risky, well I guess - especially in the short term. But long term it appears to have done very well.


USD is used for all the problems you mentioned.

But at least Bitcoin didn't go through a 5.4% inflation this year.

I'm sure people in Zimbabwe would rather try their luck with digital gold than trusting another government with another printable currency.


The average Zimbabwean earns on the order of USD 100/month. It should be pretty obvious they would have no utility for a "currency" where the transaction fee peaked at USD 63 this year.


I use Bitcoin and there is 0 transaction fee.

I keep spending money in layer 2.


Right it didn’t go down 5.4% it went down 50.

Inflation is a measure of buying power. The buying power of Bitcoin went down 30% in A DAY not long ago. Because of a tweet.

I’ll take the USD, thanks.

Also, how do you know what people of Zimbabwe think?


DCA. Don't go all-in at all time highs.

I don't even invest in stocks like that.


If you want to claim that the article is "vastly, deeply incorrect", you should be able to supply counterexamples.


Decentralized money is censorship resistant, it’s okay with me if someone won’t trade me dollars for it, I’ll pay with Sats.


> Tokens which have no corresponding legal entity willing to claim legal liability for development of the product (i.e Dogecoin)

Stephen is implying that there are such entities for Bitcoin development, which I doubt.


Having read Taleb’s Bitcoin Black Paper this guy’s words make total sense, and he puts it really well, very concise, unapologetic writing


Taleb sure made a U-turn when volatility didn't decrease when the value increased as he would have expected.


What do you think about the fact that he made a U-turn?


Before, he was a supporter: https://nassimtaleb.org/2013/03/nassim-taleb-on-bitcoin/

Recently, he said it is worth exactly $0, in the form of a paper no less: https://nassimtaleb.org/2021/06/bitcoin-currencies-bubbles/

I will address one of his comments:

> Comment 1: Why BTC is worth exactly 0

> Gold and other precious metals are largely maintenance free, do not degrade over an historical horizon, and do not require maintenance to refresh their physical properties over time.

> Cryptocurrencies require a sustained amount of inter- est in them.

I believe it's a good argument looking from afar. But Bitcoin's incentives are designed so that when it has low popularity, it requires fewer resources to get rewarded.

This was crucial in the beginning. Initially, the block reward was great, but now it is smaller.

However, the difficulty adjustment mechanism has not changed.

A drop in mining difficulty will lead to more Bitcoin block rewards per kWh spent mining, making it more advantageous to mine and therefore cheaper to transact.


No, banning fiat on-ramps will not kill Bitcoin, although it would suppress the price for several years. No, banning exchanges will no longer work as trading would move to DeFi. Give it up already, your arguments are tired.

I don't think you realize how strong the crypto movement is. Your vision is obscured by all the the snake-oil surrounding it. Government intervention will further legitimize it. This is nothing like the prior movements for alternative currency. Many millions of young people have experience buying and trading cryptocurrency now. It isn't going away.




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