But instead it turned into a game of "hodl" to get rich.
Scams were openly perpetrated in the forums.
I became completely disillusioned. What exactly does bitcoin offer the world today?
Aside from perhaps gold, bitcoin is the most successful currency in the world not associated with a central bank and state.
It's the most liquid asset that is not issued by a central bank. At any point you can issue a transaction to anyone else in the world, without the possibility of a third party intervention. I've had issues pulling cash out of banks, or limited sizes available for money orders, or having debt/credit card transactions incorrectly flagged as fraudulent and blocked.
- It can absolutely blocked by third parties (either the exchange you use or the mining cartels can).
- in practice its liquidity is tied to the liquidity of the ”stablecoins” (USDT and the likes) and as such it's not “the most liquid” since the liquidity of those stablecoins is higher.
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.
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.
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.
The top comment on /r/AskEconomics is:
"The cantillon effect doesn't really exist in any significant capacity. Central banks nowadays announce their actions well ahead of time, that means before the actual expansion of the money supply, people know this expansion will happen, and markets price in that expansion. So there really isn't much benefiting from being "early".
Beyond that there really isn't much empirical evidence on the cantillon effect to exist in any significant capacity."
Since I know little about this topic I'd appreciate HN's view.
The FED is quite powerful and US strongly influence many other banks but that’s by situation, not by design.
Well given that you basically can't spend bitcoin anywhere, it's definitely not a currency.
The fact that the pools haven't intervene until now doesn't change the fact that they can definitely do it, and would if pressured by governments. Economic sanctions using the US dollar weren't a thing until they were.
And you only need to have leverage against 50% of the mining power to make that happen, which is pretty straightforward given how centralized the power structure of bitcoin is (although less centralized than for most crypto, for which the developer has full control).
I didn't sign anything, make any appointments, buy any insurance, walk into any offices, present any identification, or even tell the guy my name. The total time involved was about 20 minutes, but only because I wasn't using Lightning. I had a similarly informal and short, but more argumentative, experience with the previous transaction, at a winery whose owner loudly insisted that he hadn't received the money... until he realized he was checking the wrong phone.
You are so full of shit comparing this to a real estate transaction that I am at a loss for words. You're about as full of shit as the winery guy. He, too, was blathering all sorts of nonsense at me about Bitcoin that showed he didn't have the faintest idea what he was talking about.
The scenario you're talking about is a 51% attack where big mining pools collude to ensure that nobody else can ever mine a block (because it might allow the laundering of tainted coins). That would be a global and extremely obvious disaster for the Bitcoin network, and it would be remedied by whatever measures were necessary to end the attack, possibly including a hard fork or strategic bombing.
Remember that the world's investor class now has 2 trillion dollars tied up in Bitcoin, and they do not want to see it collapse, and such a successful attack would greatly undercut investor confidence in the value of the asset. The Bitcoin crowd has enough pull that they extracted a pardon for Ross Ulbricht and got a friendly SEC head this year. Even before that, when one or another pool would grow to the point where it might be able to mount a 51% attack, it would get hit by DDoS attacks to bring it down.
You're comparing that to a bank declining a credit card transaction because you're in another city.
Governments have been pressuring Bitcoin miners for over 15 years; it's outright illegal in many countries. The hashrate dropped by more than half when the PRC outlawed Bitcoin mining. The effect on the functioning of the network has been pretty much undetectable.
> the "ownership" of the Reserve Banks by the commercial banks is symbolic; they do not exercise the proprietary control associated with the concept of ownership nor share, beyond the statutory dividend, in Reserve Bank "profits." … Bank ownership and election at the base are therefore devoid of substantive significance, despite the superficial appearance of private bank control that the formal arrangement creates.
https://en.wikipedia.org/wiki/Federal_Reserve#Legal_status_o...
See also https://www.atlantafed.org/about/federal-reserve-system/just...
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.
Your personal experience may be different and we are willing to hear it but don't treat it as the final truth. I am pretty sure that it was damn awkward asking.
Here I am in my country where I don't even ask for UPI payments to cash because its sometimes awkward and this guy is loading bitcoin of all things and saying its liquid lmaoo and like if it wasn't awkward.
Saying truth cut you so bad that you had to bad mouth the other person for the sake of it. Grow up at this point, man. This is highly against everything the ethos of hacker-news stands for.
With KYC and other regulations ramping up, how true is this in practice?
I guess you can get some of that benefit with a wallet only you control. But most folks can barely handle using a custodial wallet.
Transactions are also public by default, for better and worse.
It is an investment vehicle, not a functional currency. For most people you can't use it as a currency if you tried.
I mean if somebody accepts precious metals, jewels etc. as payment in lieu of actual money that doesn’t mean those things suddenly become a currency.
The fact that it wasn't a lot is precisely why this is a good example of Bitcoin being more liquid than real estate. You can't sell US$100 of real estate, not even here in Argentina.
What "cuts" me is not people uttering uncomfortable truths but people confidently spewing total bullshit with evidently no concern for its truth-value or even verisimilitude. It's even worse when it seems to be motivated by partisan struggle, as in this case. Both confident bullshit and partisan struggle are enormously corrosive to the collective epistemic endeavor.
Really? You can’t imagine any process which would take 40x less time than 20 minutes?
Sure bitcoin is more liquid than real estate. That’s rather obvious and not a particularly high bar. It’s not particularly liquid compared to actual money or many other financial instruments though.
Even if you can pay for stuff with bitcoin it’s not a currency until people actually start setting prices based on it.
> liquid enough
I’m sure I could find people who would accept Apple’s stock in lieu of actual money, that wouldn’t make it a currency
Rebutting the grandparent's claim that Bitcoin was no more liquid than real estate was one of the main objectives of my comment. I am glad that you agree that their claim is obviously false, but I think it's unfortunate that you didn't respond to their comment to say so.
I agree that Bitcoin is less liquid than dollars, which is why I was making the exchange, actually. For other financial instruments, it depends on who you are, and whether you have an account with a stockbroker. You can't open an Interactive Brokers trading account with US$100, and it's going to be challenging if you are in Venezuela. You are going to have a hard time finding newsstands that will accept your SPY shares, but they are more liquid than Bitcoin in the sense that, given that IB account, you pay much less to convert them into dollars even if you have to cross the spread, and if you're willing to wait 20 minutes, you have an excellent chance of earning the spread instead of paying it.
But none of that compares for convenience with a guy handing me a US$100 bill.
Issuing a transaction may be easy, but I don't think that's meaningful when people get hit with issues similar to "pulling cash out of banks, or limited sizes available for money orders, or having debt/credit card transactions incorrectly flagged as fraudulent and blocked" on the on and off-ramps.
There are numerous places and times around the world that you can look at the situation that occurred and see that Bitcoin would have been a boon had it been established at that time.
Future instances will exist like that, and perhaps that's a good enough role for it to exist on it's own. It can be the candle that provides light when the power goes out.
The irony of course that it doesn't work if the power goes out, but that's another degree of infrastructure damage entirely. It might even be sufficient to ensure the power doesn't go out during some crisis.
We're talking about this quote:
> Without an exchange your bitcoin is not a liquid asset, it's even less liquid than most commodity for which there are digital exchange marketplace. You can sell it over the counter, but that makes it an asset comparable to real estate in terms of liquidity.
There is nothing in the tone of this utterance that suggests that it's joking, sarcastic, or hyperbolic; it's a series of apparently serious, sincere, literal claims which simply happen to be completely unrelated to reality.
Its relatively long average block interval (10 minutes) and strictly limited maximum block size limit the total bandwidth requirement for a full node to a few kilobits per second, and you can easily run that on a laptop that consumes a few watts, easily supplied from a relatively inconspicuous solar panel or handheld gasoline generator run at a 1% duty cycle. Blockstream supplies a satellite feed of the blockchain that requires no internet connection, just a groundstation that costs less than a laptop and uses slightly more power.
Outbound bandwidth requirements from the place where the power has gone out are many orders of magnitude smaller. A Bitcoin transaction is a few hundred bytes, so outbound bandwidth requirements for transmitting one transaction at a time are a few bits per second without adding significant delay, and because the transaction is valid indefinitely in the absence of double-spending, potentially down to a small fraction of a bit per second if further delays of hours or days can be tolerated.
Now, it's true that power needs to stay on somewhere for the miners to keep running, and the miners need to be able to transmit their mined blocks to the rest of the network fast enough to avoid many orphaned forks, which requires bursts of somewhat higher bandwidth. But keeping the power on somewhere is much more likely than keeping it on everywhere.
I don't understand LN2 well enough to do this kind of analysis on it, but I'd expect it to be less tolerant of such extreme infrastructure degradation.
> do all sorts of other shit
There's not much shit they can do, without breaking the fundamental cryptographic primitives that make it work. They can't steal money. They can double spend, as above, or they can delay transactions with a probability proportional to their ownership of compute, integrated over a period of time. If they own 80% of the compute, and they really really don't want you to perform a transaction, then they can block it for 10 minutes with 80% chance, 20 minutes with 64% chance, 30 minutes with 51%, an hour with 26%.
Compare that with Visa which has blocked transactions it doesn't like (e.g., porn) for years.
And even this blocking is economically disincentivized. If you want to get a transaction through and the "mafia" don't want it, you can offer a higher transaction fee. Either the "mafia" will have to accept your transaction, or give up the enticing fee to someone else. Transaction processing is a free market.
And compute dominance is something that needs to be maintained indefinitely. Obtaining compute dominance does not guarantee future dominance (unlike with proof of stake systems, which is IMO one reason why proof of work is superior).
"It exists" is correct
"It doesn't exists" is incorrect, exists becomes exist, "it doesn't exist"
the "does" in "doesn't" absorbs subject-verb the conjugation, does is now the verb that needs to agree with the subject, it. Exists returns to it's infinitive (unconjugated) form, exist.
"They arguments doesn’t hold" typo they ought to be the, those or their, not sure what you meant. Since arguments is plural you want don't, not doesn't, alternately "the argument [singular] doesn't hold"
'national ones creates money' subject verb agreement again, either one creates or ones create
"and the are" s/the/they
"bitcoin pools mentioned ahead": ahead doesn't quite apply to comment threads, like on a road you have cars in front (ahead) and in back (behind), but with comments it's above and below, because you scroll up and down, not forward and backward. You could also say aforementioned referring to something mentioned earlier.