> That seems a hell of a lot more centralized than the traditional finance system

Most countries/systems have one central bank, even if we assume there are only 2 mining pools and they "control the network", wouldn't a central bank still be more centralized?

Besides, the mining pools don't "own" the network, anyone can participate, which kind of makes the whole "more centralized than a central bank" argument kind of weak.

The traditional finance system is that a single central bank, owned by a cartel of rich banks- chase, jpm, etc-- issue the currency, charge us to use it and get first dibs on the benefits of monetary inflation -- google "cantillon effect".

The now much more diverse mining space is much better than completely centralized in one entity current system.

And bitcoin community has a way of working to fix weaknesses wherever they find it... there is active campaigns to diversify mining, as you pointed out those are pools-- and pools are being made obsolete. behind those pools are thousands or tens of thousands of mining operators, of all sizes, as it's viable at industrial as well as individual scale-- many use it to heat their house for less than the alternative, the earnings don't have to cover the full cost to be beneficial to people.

I wouldn't call it successful as a currency given its state at the moment either.

I would say that much of the reason for that is because of the perception of the currency that is widely held. It's not much good because people think it's not much good. I bought a few things online years ago with Bitcoin and it worked pretty much the way it should, but most of those places that accepted it stopped . Mostly they stopped due to the public perception.

I do wonder if it has a chance to become useful once it is old enough to not be considered interesting, and the idea of holding something while it increases in value dies.

Last week I happened to visit a grocery store that accepts Bitcoin payments.

I did manage to use some to buy an eSIM. Still not a very good currency.

> Well given that you basically can't spend bitcoin anywhere

Grand statement coming from someone who hasn't been everywhere.

I don't use an exchange, and the mining pools (which are not cartels) cannot block a transaction, only delay it until a different pool mines a block, typically ten minutes later. I don't think this sort of intervention by a pool has ever been observed.

The stablecoins you mention are arguably more liquid than Bitcoin, but, except for DAI, they're issued by central-bank-like institutions such as Binance and Coinbase. You're right that they're not officially central banks, but that just means you get all the drawbacks of central banks without the advantages.

> Bitcoin holders as a group are constantly losing money by definition

Modulo market cap representing unrealized PnL, but yes otherwise. Miners and exchanges take a good cut.

Indeed. The Economist estimates the modern scam industry to be as large as the illicit drug trade by now, around $500 bn annually in revenue. Enabled in large part by crypto (pig butchering, ransomware, rug pulls were not a huge thing before crypto).

As it is with cash.

exactly this. these people dont understand that their own speculatory practices are what makes this a terrible store of value. its unstable, they even have to rely on literal stable-coins but they still dont see the problem

for the sake of argument, is there any way to introduce monetary policy into crypto currency so as to correct for unwanted inflation/deflation? without compromising on its decentralization promise

We know it's not a large fraction, or anyway wasn't a large fraction a year ago, because the fraction of all mined Bitcoin that hasn't moved in the last year is only about 25%.

That would be a different (forked) currency then.

If the goal is to hoard a currency itself instead of use it as the exchange between real investments then this makes perfect sense, but those people shouldn't be upset when we tell them we don't directly accept their "currency".

This sentiment models a correction to a complaint I first heard with people who tell us everything fell apart since we ended the gold standard. They ignore that we raised all boats rapidly when we didn't pin everything to governments ability to fight gold hoarders for small amounts of gold entering the market. Even gold hoarders are better off in terms of what the market has created to exchange for their gold because that exchange ceased to be limiting on market expansion.

One could say the US economy was exponential both before and after the currency change, but as with Moore's Law, it gets harder to remain exponential if as few as one limiting factor is emerging.

Not to mention this will effectively be an overestimate given loss of bitcoin to wallets whose owners lost the key.

Let me clarify that I dont think any of what I described is a given. I think its one of the more likely outcomes of our future. I think its prudent to own a small amount of Bitcoin (or basket of cryptocurrencies) in order to hedge against that future or someting close to it.

> What about the other thousands of other public blockchains, many of which are extremely similar (DOGE, BCH, LTC, ...)?

They are simply not as secure and could be attacked by well funded actors. Perhaps in time another blockchain will win out.

>... Metaverse anytime now.

Just curious. Do we disagree about where this (technological progress) is headed, or is it the timeline? I think its quite likely that we will spend more and more time in vitual or augmented reality. For good or ill.

> Personally, I think there is much more value in trusted systems.

I prefer the absence of a central authority. Perhaps im cynical.

> ... because the world didn't work at all prior to 2009?

We dont need crypto right now either. I simply think that the only good outcome of our digital future is a trustless one, and I think blockchain will play a central role there.

> Solutions to this problem might well involve digital signatures and hardware enclaves in cameras (installed by trusted centralized camera producers which could publish the public keys of each sold camera once), but I don't see how public blockchains would add any value. The signature of the picture embedded in the picture speaks for itself.

The value of blockchain is in the absence of a trusted centralized camera producer that can be pressured.

> Apart from the fact that I don't see the benefit of that, the oracle problem makes this impossible, I fear.

The oracle problem is solved in the same way the camera problem is solved. By digital signatures of real world interactions of the machines in the production chain.

I think the world will lean into trustless systems over trusted systems, lets see. That is not to say that I dont think the world would continue to function on trusted systems, I just think it makes dystopian outcomes more likely.

Not to mention the fact that you can hold Bitcoin trustlessly, and you can transfer it to someone else trustlessly, but then you have to trust that they send to you in return what they promised.

See Goharshady, Amir Kafshdar: Irrationality, Extortion, or Trusted Third-Parties: Why It Is Impossible to Buy and Sell Physical Goods Securely on the Blockchain. arXiv:2110.09857, arXiv, 19 Oct. 2021. arXiv.org, http://arxiv.org/abs/2110.09857.

It's not the how but the why. If you know you need bitcoin you know. If everything seems fine without it why would you bother?

No mortgages or funding of productive enterprises in crypto land anyway.

I have sent money overseas, fast, cheap, securely, with fiat.

The externalities of the bad US retail banking system are enormous. First we got PayPal with Thiel and Elon, then crypto. :-/

I wouldn't say anything.

Has he opened a bar instead?

He lost his court battle to force the local government running the dump to allow him to dig the last I heard. So I doubt it, he wasn't even allowed to really try.

Good chance those coins are 100% traceable. They were lost in the days before good privacy tools like mixers, and the database of the biggest exchange MtGox was fully leaked so everyone knows the real name, email, bank details, and date of birth of the owner of every old coin.

Very pleased I disposed of all mine long ago, and the Blockchain shows that so nobody tries to kidnap me for the keys.

I went back to the (french) articles making that claim in headlines and it turns out to be false, thanks.

He lost his appeal in his case against the city authority to search the landfill, so he can't ever search for it. It's a bit buried in his feed in between the announcements about tokenizing part of these legally inaccessible coins.

Yeah - assuming this was not the rightful owner (which it might well be), my gut is that perhaps someone found an implementation flaw/quirk in some old wallet code/keygen/RNG that effectively reduced the keysize down to something more manageable for brute-forcing. In ye olden days Bitcoin was still something of a curio for geeks and nerds and not the industry it is now, so it would not be unreasonable IMO for there to be some slightly-less-than-perfect implementations floating around from hobbyists or open source etc - the stakes were lower then.

If there was say a vulnerability in a specific wallet version it would be quite possible to narrow down search space to only the wallets/addresses around that point in time etc as well, making it easier to target your brute-forcing efforts.

It will be interesting to see if any other dormant wallets from around the same era wake up too.

One of my students believes Elon Musk and Peter Thiel created Bitcoin. Here's the summary of the 5 page doc he presented:

In 2000, according to Peter Thiel, he met with the E-Gold team in Anguilla.

Around 2001, Elon and Peter were at PayPal, and they had plans to build a similar digital currency.

In 2002, PayPal was sold, and that pretty much ended the digital currency plan. Instead, PayPal let users link their bank accounts and cards to make payments. This created a bigger dependency on banks.

By 2004, there were over a million E‑Gold accounts. Banks weren’t happy about it. Meanwhile, Elon and Peter understood exactly how much potential this new kind of digital currency had.

In 2007, the banks took the founders of E-Gold to court for running an unlicensed money‑transmitting business. That same year, the E-Gold engineers were out of work.

Bitcoin was invented in 2008, the same year Elon was broke and busy trying to save both SpaceX and Tesla from going bankrupt.

His theory is that Elon and Peter hired the smartest engineers from the E-Gold team and asked them to build blockchain so they could create their own version of E-Gold. The team worked on Bitcoin from 2007 to 2010 under the alias of Nakamoto.

It’s quantum computer.

It's close enough.

There are 200 million+ BTC wallets.

They've found 54 out of 200 million+ or about 0.00002% of wallets - in how many years?

Also, for the rest of your life, you'd be able to get the people arrested who stole the money.

So they'd either to kill you after, and it would be obvious why, and there'd be an easy lead on who.

Your odds of getting away with stealing that kind of money conventionally are essentially zero.

Alright, so I can see it as a matter of scale.

Recently there was a local case of someone extorting people by leaving threats in the mailboxes to not burn people’s houses down in exchange for $1k in bitcoin.

But who would keep $8B in bitcoin without some protections in place to ensure that it can’t be easily transferred away, given the associated upside/downside? That’s... roughly as foolish as keeping $8B in actual cash/gold/gems (notwithstanding the logistical problems with the size/weight) under your mattress.

But the criminal's stolen BTC are tainted. Exchanges will not accept them. procession of them is a crime

> And if it was still legit after that, there would be days or weeks of waiting for the transfer to actually happen

or you get a better bank to begin with

most banks that call their slow processes "security purposes" are actually just putting up barriers to maintain liquidity. the banks that go bust are the ones that got clientele based on making it convenient to transfer

> there isn't an entire financial system backed by people with guns to help you if you are wronged

It's not the "financial system" that comes and hunts criminals with guns, but police, acting based on what laws they seen has been broken. And stealing $3 billion is as illegal if it was Bitcoins, as if it was Euro or USD.

You are confused. The people with guns will come for you if you steal bitcoin and they know who you are.

> Bitcoin thief sentenced to 5 years in prison for stealing $1 billion in crypto and laundering it with his social-media rapper wife ‘Razzlekhan’

https://fortune.com/crypto/2024/11/15/bitcoin-thief-sentence...

But exchanges will if you deposit that much, and will freeze your $ if they don't like your response.

Do all outputs from exchange are automatically trusted? Seems like any should be tainted forever. Or is it impossible to tell whats from mixer?

My house also doesnt generate cash flow/interest by itself, must have an intrinsic value of zero. Surprisingly it can be used as collateral for a loan as long as other people assign a (however disputable) value to it. So, of course you could be right when all (not just you) other people decide that BTC has a value of zero. Meanwhile i use my BTCs as collateral. Value is more of a social judgment, not a law of nature. Hence the misconception?

And this has proven successful in many countries such as Zimbabwe, Venezuela, and Argentina

Your definition of "worthiness" is entirely flawed. It seems to be base on some random economics textbook definition of "value".

I am getting tired of repeating the exact same thing on HN, but TL;DR:

    . there is no such thing as intrinsic value, it is a fundamentally flawed concept.

    . the only reliable tenet in economics (as in: having always be observed to work) is the law of supply and demand, which "value" derives from: if demand>supply, value appears. End of story.

    . why there is demand in the first place is a many-colored and complex affair, which economist recurrently (and predictably) fail to analyze and forecast.

> Money only works if you believe it will still work tomorrow.

Yeah. When crypto goes down, it'll be epic.

> If govs are good, then crypto degenerates to just a slower system for transactions.

That's how I see crypto: an inefficient and ill-regulated substitute for money, though suitable for crime. If governments turn bad, stable money is just one tiny part of the problem.

Yeah bitcoin is (at best[0]) a kind of consensual hallucination, worth something because people believe it is. Fiat is someone with a Navy telling you it's worth money, it's very different.

[0] in practice there's a difference between the idea of a distributed digital currency and the ponzi schemes they give rise to I'm real life. Bitcoin is some greater fool thing, it's not a medium of exchange.

People value a way to store money securely in a place that can’t be physically robbed, that can be sent internationally with low fees quickly.

You don’t need anything else.

For years the haters on here would screech “but it’s volatile” - not really anymore. I wonder what they’ll decide to hate it for now, rather than changing priors.

This doesn't explain why the currencies of different countries behave differently.

In my view, money is a technology. People use a technology if they find it to be useful. I know this sounds circular, but bear with me. A "major" currency is designed to be useful as a medium of exchange, temporary store of value, and tool of government economic policy. For it to serve these purposes, a government has to moderate its own behavior to some extent.

Thus my view is that the value of a major currency is based, not on the expectation of paying taxes in the future, but on more general expectations of the future behavior of the government.

With that said, paying taxes is good use for money that's a short term store of value, because you rarely need to hold onto your tax money for more than a year before paying it.

>Other currencies get their value because the governments that provide them make people pay taxes

That's demonstrably false, because countries like Zimbabwe and Venezuela experienced hyperinflation (the complete devaluation of a currency) in spite of the fact that their governments were still forcing people to pay taxes with those currencies. So clearly that alone is not enough to provide intrinsic worth to a currency.

BTC is volatile but it isn't going to crash tomorrow or any time soon at least not by the amount that would make sense to sell with a wallet this old.

Well, one way to lower the price would be to put eight billion on the market all at once.

Yes. And note that Coinbase for example charges retail around 1.5% or so on average, but only a few basis points to institutional clients last time I ran the numbers. Surprise.

I think you mean canary. Honeypots are decoys by definition

You'd be surprised how many of these addicts would be buying for multiple other less tech savvy addicts and essentially becoming small time dealers themselves to fund their own habit. If they got locked up or ODd at the right time there could've been a few thousand usd in btc in a wallet at a time when each btc was worth less than 10usd.

He wouldn't heroin from darknet markets and I doubt many addicts do, they need that on tap locally. But he, and many others like him, just like drugs in general and have a heroin addiction they picked up. So the darknet is more for getting lsd, MDMA, mushrooms, or whatever else.

> he only had $40 million

How could you possibly know?

Or anyone else for that matter, including the thugs who sent him to jail?

lol. Did you read the whole wired piece on how the feds couldn't find anything under their nose on that case?

> Is the world really going to come crashing down if people only spend on things they need rather than endlessly cycling through shit they don't?

In broad strokes, this is perhaps the most important question of environmental sustainability which stems from monetary policy.

Second most important is the matter of how much energy is spent on security (eg, in the case of bitcoin, the horrifying amounts of power spent on SHA256 hashing, and in the case of USD, the perhaps even more horrifying energy consumption of the global petrodollar empire).

We spend so much deliberation on this second question that we often ignore the first: what monetary policies will make us chill out on the whole importing-plastic-shit-we-don't-need-from-the-other-side-of-the-earth thing?

The concern is that capitalism allocates resources to the production of socially valuable goods because corporations can raise money to buy the means of production of those goods before producing them by selling shares in their future profits to investors who are willing to accept some risk of bankruptcy in exchange for those future profits, which result from consumers' rational judgment that the goods are sufficiently valuable to them to be worth buying at a price higher than the cost of goods sold.

None of the links in this chain is perfect†, but one of the weaker ones is where investors are willing to accept risk. A guaranteed deflationary currency is a risk-free way to get a return on your investment, so companies have to offer a higher rate of return, narrowing the set of goods that can justify such investment.

But the same criticism can be leveled at Treasury bonds and (to many people's minds) real estate, so I'm skeptical of it, and anyway "risk-free" is not a good description of Bitcoin.

______

† Consumers knowingly buy socially harmful goods such as cigarettes, they unintentionally buy worthless goods because producers lie to them, investors are largely speculators driven by herd mentality rather than rational assessors of future returns, corporations cheat investors due to principal–agent problems, and externalized costs and benefits such as pollution aren't measured at all. Still, it's a damn sight better at organizing economic production than the Great Leap Forward, the Southern slave plantations, or the medieval guilds.

It's only a problem for capitalism.

This argument falls apart when you consider technology though. And even daily essentials. No one would not buy food and water because they can get more in future. They need it now.

The same goes for technology. We all know next year’s iPhone will be better than this year but we still buy them…because we need them now.

I’d argue inflation’s incentives are worse - the constant need to invest/spend so that your money doesn’t lose value. It means money flows into anything and everything like zombie companies, over consumption, property. Those on the poorest end are just trapped because as soon as they get any money it starts depreciating.

The US currencies were either literal precious metals, or gold-backed and/or silver-backed, throughout the 19th century until the Great Depression, except for a couple of brief suspensions. Consequently the average rate of inflation was zero. That was the period that it went from a fractious group of rebel colonies to the center of world economic development. So, while I'm sympathetic to the idea that a fiat currency with a predictable inflation rate might stimulate the economy, I think you are making an unjustifiably strong case for it.

More and more people claim this system of stimulated growth is actually wrong and the root cause for global warming.

> the rich get richer and hoard the money

Well thankfully we're safe from that!

>> If your money is worth more tomorrow, then you are incentivised to tighten your belt and not spend for as long as you can. At scale, this negatively affects production, economic mobility, and so forth

By your logic, bonds are bad for the economy.

In US in 19th century stocks of banks that went bankrupt were used as a sort of paper money to solve the problem of money availability.

So the finite amount of base money would just mean that derivative products would be used as practical money.

> I find it a dumb idea what whether or not people can get credit to start/expand businesses would be dependent of solving math problems.

That’s quite a mischaracterization. We can at least agree that Bitcoin’s supply is set up to increase at a pre-set rate over time. The math problems are the means to enforce that rate. Not the controlling factor.

>there were long periods of economic stagnation

During the "long depression" GDP was still growing at 3-4% so it was hardly stagnation.

It will go from the near totality of people acquiring their bitcoins through purchase to actual totality.

We have other coins too.

> Which is equivalent to deflation, which parent suggests is harmful to bitcoin's viability.

Deflation is built into Bitcoin by design and is one of its most notable features regarding its coin growth schedule. This pros and cons of that approach have been discussed ad infinitum in the crypto community.

Given the context, "this is fine" is obviously an ironic reference to the cartoon dog sitting on a chair at the dining room table with a mug of coffee in a burning house meme.

Slavery.

You can't buy a single pizza with it now. Only by exchanging it for an actual, better currency

The initial intention does not change the practical reality.

>> Btc is primarily a value store and commodity like gold, not a currency. Deflation is a good thing when you are parking value.

> The original bitcoin whitepaper was titled: “a peer to peer electronic cash system”

The goalposts, they move.

>> How many people in the US has a mortgage or some kind of debt (student, medical)?

Approximately zero of them have debt denominated in Bitcoin. Meaning that the main drawback of deflation does not apply to Bitcoin.

Inflation punishes savers and rewards debtors, i.e. it disincentivises the more economically productive behaviour.

Thank God that would never happen in the US.

Like what? As far as I can tell, it will solidify its store of value.

I was thinking more along the lines of solving in polynomial time on a conventional computer.

Easy to kick yourself in retrospect but if we could see the future we'd all be millionaires. AAPL was $0.28 in 2002 (adjusted for splits, something like $12 at the time).

[flagged]

They must be an expert in number theory. I have a marvelous continuation of this sentence which

10K BTC for two Papa John's large pies. see https://marketrealist.com/what-is-the-bitcoin-pizza-transact...

That's about US$500M per pie these days ( 1BTC ~= US$100K )

BTC ranged between $0.30 and $27 back in 2011 so not quite