The Rise of Whatever

Cool post, but:

> And the only real hope I have here is that someday, maybe, Bitcoin will be a currency, and circulating money around won’t be the exclusive purview of Froot Loops. Christ

PLEASE NO. The only thing this will lead to is people who didn't get rich with this scheme funding the returns of people who bought in early.

Whatever BTC becomes, everyone who advocates for funneling public money of people who actually work for their salary into Bitcoin is a fraud.

I don't think the blog author actually wants this, but vaguely calling for Bitcoin to become "real money" indirectly will contribute to this bailout.

And yes, I'm well aware that funneling pension funds money etc into this pyramid scheme is already underway. Any politician or bank who supports this should be sued if you ask me.

Yeah, I think for crypto to actually turn into something net-positive, Bitcoin needs to lose a lot of value. It would almost certainly be some other network that would actually solve this problem, given Bitcoin's essentially frozen in a half-completed state now (Ethereum still seems to be trying to make something that scales to a point that would be usable, but it is also the nexus of a lot of the scams for the same reason)

Would it change your view if they mined instead of buying?

If you were to create a decentralized and limited supply currency, how would you distribute it so that it's “fair”?

Sounds a bit like if the world was running only on proprietary software created by Microsoft and you criticized the move to open source because that would enrich Linus Torvalds and other code creators/early adopters.

Are people better off by continuing to use centralized broken software that they have to pay a subscription for (inflation) than if they did a lump sum buy of a GNU/Linux distro copy from a random guy and become liberated for the rest of their life?

But can't you see what he actually wants?

He wants normal banking and money transfer... but just to anybody, and for any reason. As an example, he'd like people to be able to pay him to draw bespoke furry porn for them. Or as another example, why can't a US citizen pay an Iranian citizen to do some work for them? (e.g. write a computer program)

That is totally possible. The only thing that stands in his way, and drives him into the arms of the cryptocurrency frauds, are moralising and realpolitiking governments that intentionally use their control of banks to control what bank customers can do with their money.

In an ideal world, government would only regulate banks on fiscal propriety and fair-dealing, and would not get in the way of consenting adults exchanging money for goods and services. But because government does fuck with banks, and sometimes the banks just do the fuckery anyway and government doesn't compel them to offer services to all (e.g. Visa/Mastercard refuse to allow porn merchants?), normal people start listening to the libertarians, the sovereign citizens, and the pump-and-dump fraudsters hyping cryptocurrencies.

He wants decentralised digital cash. How can it be done, if not Bitcoin et al?

> Bitcoin needs to lose a lot of value

Why is that? You can just buy 0.00000001 BTC.

Use the a similar protocol with better properties (less energy consumption, better transaction usability) and start from zero.

Also, I'm not sure if a radical lack of regulation / full decentralization is a good thing when we are talking about money.

In my opinion, money should be regulated by governments.

But this discussion tends to escalate and the arguments have been made ad nauseam, so I'm tuning out here, sorry.

Having currency is only meaningful if the amount of currency someone has correlates, at least loosely, to some kind of merit or work.

Let's say me and my friends agree to carve off 0.00002 BTC supply and pretend that is the whole world of currency. We could run a whole country using that 0.00002 BTC as money. Except that anyone who has 1 BTC can break into our walled garden and, with a tiny fraction of their holdings, buy the entire walled garden, and there's no way to prevent this as long as our money is fungible with theirs. It's the same reason you wouldn't use immibiscoins as a currency: I could just grant myself a zillion of them and buy everything you have. Except that in the case of bitcoin the grant is pre-existing.

Deflationary currencies are fundamentally unstable, just like currencies that one guy can print at will, because they decorrelate quantity and merit.

It's such a shame that the premier cryptocurrency chose a speculation friendly emission that concentrated wealth on early adopters (its creator included) rather than a speculation resistant pure linear emission (no halvings) that would give future generations their fair share to mine.

It's more fair if every generation gets to mine the same amount. You want supply to be predictable and for the inflation rate to go steadily down, but there's not much point in limiting the supply [1].

[1] https://tromp.github.io/blog/2020/12/20/soft-supply

It's by design. Either the inventor knew what he was doing, or was tricked by someone who knew what they were doing. Perhaps it was invented by someone who made a lot of money speculating on gold so they knew how the model worked.

Luckily there's more than one cryptocurrency. Many of the current generation have asymptotically constant tail emissions, which doesn't really solve the underlying mismatch between emission and demand, but at least doesn't make it deliberately bad.

Well, there was one that tried to maintain a constant US$ price by cross-leveraging all of the risk onto a sister currency, but that crashed pretty hard (partly by the algorithm not working as well as thought, and partly by deliberate rugpull).

One that I'm aware of is radically different and allows both positive and negative balances that decay towards zero; although I don't really like that one's implementation, that feels like an idea worth exploring. It's pretty much incompatible with any traditional currency though.

Last time I named specific cryptocurrencies I got downvotes for advertising so I won't.

I mean, bitcoin needs to not be the biggest cryptocurrency by market cap. It's a comment on the utility of bitcoin compared to other networks, not about how it can be subdivided. As long as bitcoin is the most valuable coin, the cryptocurrency market is unconcerned with utility for everyday transactions and far more concerned with line go up by finding more and larger bag holders.

Not sure. IMO the best thing that could happen for the next generation is to be born in a Bitcoin standard were politicians don't control money, people are incentivized to save, and the world does not need to use housing and stocks as a way of saving and protecting against inflation.

Technological progress makes the world deflationary. Your money should be able to buy more every time as we improve the productive efficiency of everything. And for poor countries, the best thing they could get is a censor resistant and value preserving tool.

Even if there was a tail emission, newer generations wouldn't have the capital needed for mining rigs. That's not just something unique to this case, same happens with stocks, real state or any other investment asset.

Eevee is she, not he. See the website footer and the home page.

Mea culpa, I'll keep it in mind for next time (though the real Eevee is a Pokemon)

> money should be regulated by governments

It should, but nobody can quite agree on exactly what should and shouldn't be allowed. Fraud, everyone agrees no. Porn, drugs, guns, gambling, foreign work, etc. everyone has a different opinion; governments abuse their power to prohibit transacting "harmless" goods/services, the people who transact those things reject the prohubition and turn to grey and black markets, then suffer from the lack of strong regulation therein.

My point was not primarily money from illegal activities. While you are probably right about most of the liquidity in BTC coming from illegal activities (with the type of illegality often being secondary, by means of being almost universally agreed on).

I was getting at the valuation and the value extraction that is derived solely from the sigmoid-like climb of value in cryptocurrency, which is driven by speculation on BTC as an asset, not just by increasing adoption for regular economic transactions backed by external value.

Sure, the more traction and trust this system gains, the last part of my sentence (BTC backing "real value") might increasingly become true, making my argument moot. But the almost feudalistic problems of "initial" allocation are not unimportant, in my view.