[toomuchequate]

If it is pegged to USD, there is no investment potential. It is just as bad as cash.

The idea behind bitcoin is that you don't need to rely on the US government for storing value. There are 21,000,000 BTC ever ever, you can't print more.

That article did not address this at all. This is the most compelling reason to buy bitcoin.

[nosuchthing]

No one should have to buy Bitcoin when you can mine it, oh wait it's all being printed in warehouses owned by wealthy capital holders.

Surely this is Satoshi's design goal.

Also don't worry about the exchanges operating out of obscure off shore islands, they probably arn't operating fractional reserves.

[AgentME]

Bitcoin mining wasn't invented just to be an egalitarian "everyone can earn money from their computer" sort of thing. The decentralized design that Bitcoin uses needs people to do lots of processing work, the people doing this work need to be incentivized somehow to keep doing that, and then somehow the units of the new currency need to be distributed out, presumably in a way fairer than just starting Satoshi out with a large balance. Mining solves these issues.

[nas]

I hate the term "mining" for that reason. It is not like mining gold. I would have preferred if they called it "digital notary service". That's what the miners are doing. They are notarizing transactions so people can agree on the ledger and so that double-spends cannot happen. Early in the life of the system, the notary service is subsidized by inflation. Later (after many halving of rewards), they will be compensated with transaction fees.

If someone can devise a way to perform the notary service without proof-of-work, I'm pretty sure Bitcoin will move to it. Right now, no other system has been shown to actually work. Proof-of-stake systems are in the works but, as far as I know, none of them are considered trustworthy at this point.

Edit: I would like to also say that I'm sympathetic to the opinion that Bitcoin mining is too wasteful of resources (i.e. electricity). I think the system is perhaps flawed in terms of the connection between Bitcoin price and the economic drivers of difficulty. When the price is high, the mining rewards are such that there is huge pressure to increase mining costs. Do we actually need that level of security? OTOH, hard to blame Satoshi for the design since it is hard to foresee how quickly the system gets adopted.

[nosuchthing]

  "The decentralized design that Bitcoin uses needs people to do lots of processing work"

You should try reading Satoshi's white paper which explains what that processing work is. (hint: there's not really any processing outside of generating a bunch of random worthless nonces in the hope that one nonce will be accepted as a winning lottery number)

The Proof of Work "algorithm" is completely unnecessary for processing transactions, and it's actually quite simple. To the point, PoW simply asks for a random number for the purpose of creating a lottery. If you want Bitcoins, you need to waste more real world energy and capital on hardware to print more lottery tickets (nonces).

The Bitcoin network and all the transactions on the network could easily be run on cheap hardware, a raspberry pi even. The PoW filter is a psychological tool for "governance" (write access) to the database, granted now exclusively to wealthy capital holders. Effectively granting the Bitcoin / PoW network to the wealthiest speculators who can devote resources to be sacrificed in return for digital lottery printers, which in turn give a chance to generate numbers in the cryptocoin database.

Curious why someone would design a currency system in objection to the financial plutocracy, when the design inevitably restricts control of the entire network only to existing capital?

It's no mistake Satoshi owns at least 1,148,800 BTC.

[DINKDINK]

>The Proof of Work "algorithm" is completely unnecessary for processing transactions

The Distributed Systems community awaits your proposal for a solution to Byzantine Fault Tolerance in open, decentralized, adversarial networks. Why would you withhold an alternative solution to PoW?

>The PoW filter is a psychological tool for "governance" (write access) to the database, granted now exclusively to wealthy capital holders.

No amount of PoW allows a block producer to write data to a node that a node operator hasn't consented to accept by their choice of consensus rules. Your argument is "capital holders" can force consumers to purchase whatever they produce. Consumers induce producers. Producers cannot induce consumers. Producers can /speculate/ that latent consumption may exist but without purchasing consumers, production will eventually end.

>why someone would design a currency system in objection to banks, that inevitably restricts control of the entire network only to existing capital?

Money warehouses and credit creators (banks) are not capital. Capital is the product of work / R&D / creation.

[beaner]

Miners have to sell their coin to remain profitable. This distributes the coin well, and ensures a highly liquid market.

The largest brokerage is US-based (coinbase) and the largest exchange is Binance, which has most of its funds auditable on various blockchains.

Also just hold your own keys if you're worried about it. The ability to opt-out of custodianship is kind of the point.

[gamblor956]

Miners have to sell their coin to remain profitable.

No, they don't. They just have to sell a notation in their database that a coin is owed to someone. This is what MtGox did, and it's what Coinbase still does. The trick is to maintain just enough coin to be able to transfer out coins on request (as MtGox tried to do), or to just claim that it will take a few days to process the transaction (as Coinbase does).

Binance, which has most of its funds auditable on various blockchains.

A company owned by Binance audited Binance's books. And posted the results of the audit online...but not the underlying data. This is useful from the POV of conducting a third-party audit...

[beaner]

You're conflating miners and brokerages and they don't operate nearly anything like each other.

Miners do not custody funds. Large miners that control a farm can't run on empty, they need to pay for space, hardware, and electricity - they need to sell through crypto through a brokerage to end users to make a profit. The brokerage (e.g. Coinbase) may then custody those funds on behalf of brokerage users, but the miner no longer has it.

Mining pools directly pay out the pool contributors in crypto who then themselves decide to either save or spend.

There are some "cloud mining" services but they don't account for a lot of power and most end users play with them at a loss.

A brokerage does not own or generate new coin, it simply holds it on behalf of users and enables exchanges between users via the market.

"[Coinbase] claim that it will take a few days to process the transaction" -> This is very vague. When you withdraw crypto it generally happens near instantly. If you're talking about a purchase which involves processing a fiat withdrawal from a bank, that's not the same thing.

Re: Binance, you can audit it yourself at addresses like this: https://www.blockchain.com/btc/address/34xp4vRoCGJym3xR7yCVP...

[kinghajj]

For the blockchain to be as secure as possible, a large amount of capital must be invested into mining it, far more than the average individual possesses.

There are plenty of exchanges in reliable jurisdictions (Coinbase, Bitstamp, etc.), why do a few shady ones matter?

[drexlspivey]

You can rent their hardware via Nicehash etc and mine it yourself if that's your thing.

[root_axis]

> There are 21,000,000 BTC ever ever, you can't print more

Untrue. More could easily be printed if that is what the leadership/community wanted.

[jbusma]

Let's take a vote!

Who votes to increase the 21M cap, devaluing your own holdings?

Sir, it appears the nays have it..

[nosuchthing]

It only takes one veto (bug) to nullify the entire network, CVE-2018-17144 for example.

https://en.bitcoin.it/wiki/Common_Vulnerabilities_and_Exposu...

[jbusma]

this is actually really cool!

thank you for sharing I didn't know something this critical had been found in recent years

[root_axis]

Unforeseen future circumstances could make people more amenable to any kind of changes imaginable. Either way, saying that it's impossible to print more is just not true.

[bduerst]

Unforeseen future circumstances could make people less amenable. Saying "we just don't know what the future may hold" in support of a claim is an argument from ignorance.

[root_axis]

> Unforeseen future circumstances could make people less amenable

True, but irrelevant. It doesn't matter either way. The point is that it can be done if that is what conventionial wisdom dictates is desirable at the time.

[bduerst]

Conventional wisdom also dictates that it is desirable for Bitcoin to handle more than 7 transactions a second - and yet that problem isn't possible for Bitcoin to solve either.

Again, it's an argument from ignorance and gross oversimplification to claim "the future wisdom of the community" will solve problems for bitcoin.

[pojzon]

I dont think anyone with such possibility would put it to vote. They would just do it because they can.

[jbusma]

You would essentially "vote" with which fork you were choosing to acknowledge with your own node, should you be running one.

Also I'm fairly certain a majority of hashpower, not just users would need to be on board with the change.

You could argue that as the primary beneficiaries of such a change (increase cap => increased distribution to miners) they would be for it, but I think most rational actors see the catch 22 of trying to profit by removing one of the core attributes that makes bitcoin valuable (it's scarcity)

[plokiju]

Bitcoin works by consensus though. Nobody can be in that position. the best you can do is make a fork. Those who don't agree with the rule change will keep mining with the old rules in place

[h1d]

That is no longer Bitcoin, just a forked alt coin. See how well they did in the past. Unless there's some serious flaws preventing further adoption, why bend the rule everyone has been agreeing on?

[GenerocUsername]

That would result in a fork, split adoption, and is not nearly as easy as you imply.

[empath75]

There have been multiple forks.

[bduerst]

Many of which are considered failures, which is the point.

[russdpale]

Yeh and they all fuckin suck. I wonder why? Its because they compromise on the quixotic properties that make bitcoin valuable.

[root_axis]

What is the substantive meaning behind "fuckn suck"? As an example, most exchanges and processors have both BTC and BCH so if you're not a speculator there isn't much functional difference. (I know there are technical differences, but those differences don't change the fact that they are fungible blockchain tokens)

[russdpale]

There isn't that much difference from a functional perspective. However, they will never achieve the value of bitcoin because many of them have forsaken the properties that give bitcoin its value.

There is too much argument over which chain will win, imo, its like asking which nation will win- it doesn't have an answer. We are humans, we excel at patchworked cooperation, which is why we have so many nation states and governing systems. There will be more than enough room for users to have many choices when it comes to blockchains for the foreseeable future.

[polyomino]

the functional difference is that BCH doesn't have a meaningful portion of the SHA256 hashrate, so it's vulnerable to 51% attack all the time. But, it's basically worthless so nobody cares.

[BinaryResult]

BCH usage is laughable. See for yourself.

https://txhighway.com/

[root_axis]

It is as easy as I imply since I specifically said if the leadership/community desire such a change. Saying "you can't print more" is 100% wrong.

[bduerst]

Oh well if it's that simple then why has it been so hard just to do something as simple as increase the block size?

[root_axis]

Is it possible to increase the block size?

[bduerst]

Anything is Possible with Bitcoin ᵗᵐ

Except something as simple as increasing the block size to allow Bitcoin to process more than 7 transactions a second (Visa handles 42,000 tx/s comparatively). Theoretically it is possible, but the way Bitcoin is designed puts changes in control of people who stand to profit from preventing certain changes (i.e. Tragedy of the commons) like block size increases - and they are blocking it. The point is that Bitcoin isn't some piece of software that you can magically push any necessary changes to.

[root_axis]

So is that a "yes, it's possible" or "no, it's impossible"? "Theoretically it's possible" sounds like it's possible. Saying "here are some examples of things that didn't happen" doesn't prove that they, or anything else, can't happen.

[bduerst]

It's as possible as a number of rational actors collectively acting irrational. It's economics, not technology - so it's theoretically not impossible, just very highly improbable.

[onion-soup]

Yes it is possible and it is already done on Bitcoin SV (original bitcoin). Recently 128 MB block were mined as a proof that bitcoin can scale to hundreds of thousands of transactions per second

[cdiddy2]

if the commons actually wanted larger blocks there was an opportunity with the bitcoin cash hardfork, but that chain has less value and less hashrate now. So when given the opportunity people didn't move to the chain with more transaction space, so it seems the votes are in.

[polyomino]

Go back and read the whitepaper that's not how this works.

[Blackthorn]

There's lots of things in Bitcoin that aren't in the whitepaper. The BTC chain is just what most people are agreeing on at the time. It is extremely mutable. The BTC mining limit is as mutable as anything else in the network.

[thefounder]

>> It is just as bad as cash.

You mean that it is as good as cash. Bitcoin become a failed project, a big internet casino. Some people want to use digital money to make payments and get paid, you know?

The success of the facebook coins depends by the ways to redeem the tokens(i.e do other shops accept it, can they be cashed out at atm, can you use it with 3rd party wallets etc)

[maxlybbert]

Quoting the animated Dilbert TV show when Dilbert buys his mom a gift card: “you’ve exchanged your money for something like money, but less useful.”

[maxlybbert]

I finally found a real source, and as usual, my memory leaves much to be desired (ultimately Dilbert gets a gift certificate):

Alice: A gift certificate is completely different from cash.

Dilbert: No, it's not. They're both pieces of paper you can exchange for goods and services.

Alice: You're missing the point.

Dilbert: Actually, a gift certificate is worse than cash, because you can only use it in one place.

Wally: And it expires.

Alice: At least it shows some thought.

Dilbert: It shows defective thought. You're trading perfectly good money for something that does the same thing, only not as well.

Facebook’s currency may not expire or be limited to one place, but it does seem to me that “it does the same thing [as money], only not as well.”

[dwild]

> Facebook’s currency may not expire or be limited to one place, but it does seem to me that “it does the same thing [as money], only not as well.”

I don't know but each time I try to show my cash into the computer... nothing happen.

Libra does the same thing as "Paypal" would be more fitting, but then you forget that not everyone can use Paypal and that's where your logic fail.

Venmo is always my best example for that, because I do have a Visa card, I do have a Paypal account. I'm in a developed country, thus I don't have issues to do transactions online. I still wouldn't be able to use Venmo though. If you were to only accept my transaction from Venmo, because you didn't like Visa and Paypal (yeah I know Venmo is owned by Paypal but you understands the point). Now imagine this world, but without any of theses.

- Anyone can own a Libra wallet, me, you, someone in the middle of a third world country.

- Anyone can transfer from a Libra wallet, to another, me, you, someone in the middle of a third world country included.

That means that anyone can arbitrage values of Libra, anywhere in the world, whether Visa, Mastercard or Paypal decide that market worth it or not.

Thus, anyone can pay using Libra, which make Paypal, "the same thing [as Libra], only not as well."

[thefounder]

Well, you can't send physical money over optical/copper cables, can you?

[maxlybbert]

Personally, I believe PayPal, Western Union, banks, etc. have come up with decent ways to send money electronically.

[dwild]

> Personally

That's the whole issue. You forget about everyone else that don't have access to Paypal or Western Union, or even wire transfer.

[jrvxo]

That series was brilliant. I don't know what happened to it :(

[russian_bot]

No, it's worse than cash. Cash has the ability to be anonymous, be used for regulation arbitrage, and is untraceable.

This "facebook coin" likely has none of these properties.

[hanniabu]

Bitcoin has not failed. I know several people personally that are paid in it. They can also use it to buy things.

[cycrutchfield]

And when they buy things, are those things denominated in fiat currency or in bitcoin?

[VRay]

I guess Bitcoin is turning out to be the Esperanto of money

[CaptainZapp]

Somehow I don't think that you mean that as a compliment.

[Lordarminius]

> are those things denominated in fiat currency or in bitcoin

By your logic if I exchange dollars for euros to spend on a vacation somewhere that means the dollar has failed ?

[thefounder]

Bitcoin is volatile. That's the main issue. You can't say that about the dollar or euro.

Now imagine you get paid in bitcoin, save every month for a holiday or a high value purchase. When the time comes to make the purchase you find out that your savings are worth less than 10%. How does it feel using bitcoin?

I tried to use bitcoin(as a merchant) but due its volatility it makes no sense to use it(as merchant or buyer).

[Lordarminius]

Its volatile because it is relatively new and not backed by a government. Market forces are having their way.It will stabilize

[411mrc]

At this point, it's a feature to have things denominated in $. I'm likely going to buy a Purism laptop with bitcoin, but of course denominated in $. I spent a couple hundred on BTC years ago, which has generated a nice return. This will be my first purchase, and I'll have plenty of BTC left over. Holding a deflationary currency while the world operates on an inflationary one is fine by me.

[hanniabu]

Both

[thefounder]

I guess they have the shopping list ready by the time they get paid otherwise chances are they end-up with less(or more, it becomes a gable) value by the next day. Not to mention the exchange rate(i.e the employer uses a rate, the merchant a different one...). In the real life people don't like to gamble their wages every single day. They want and need a stable currency and low fees. Bitcoin failed to offer any.

[nutjob2]

The bar for success in your mind is suspiciously low.

[hanniabu]

What would your bar for success be? I was merely responding in a way that met the parents comments.

[hanniabu]

Would love to know why I was downvoted

[ivalm]

Because to claim that bitcoin succeeded as a payment/salary method is ridiculous. Vast majority of bitcoin volume is just speculation on exchanges. The massive price volatility is a testament to why it cannot be used as a currency -- who would want to make a services/job contract that in a matter of a year could change its value by an order of magnitude. The whole point of these contracts is to hedge against future volatility. Remember, if bitcoin goes up then the employer gets screwed, if bitcoin goes down then the employee gets screwed; there is no direction that is good for everyone, only stability is good.

Furthermore, good currency should encourage investment (into things) which means it needs to be (slightly) deflationary (to introduce a cost to not investing into production). Otherwise you get into a paradoxical/toxic situation where NOT producing useful things becomes financially advantageous.

[411mrc]

You're arguing for a demurrage currency, not a fiat, debt- leveraged fractional reserve one.

[ivalm]

I am arguing against bitcoin, not for something. I definitely am not arguing for fiat.

[travisjungroth]

> There are 21,000,000 BTC ever ever, you can't print more.

This is not true. Forks exist, and anyone can make 21 million bitcoin at a time. It’s still a question of if people will accept the forks, but it is an option

[hanniabu]

If it's a fork then it's not BTC

[travisjungroth]

But what is “BTC”? It’s the version of bitcoin code that people generally accept. Every update to the code is a fork.

[hanniabu]

That's correct, so anything that isn't generally accepted doesn't have the same support or value. To date there have not been any legitimate forks that I'm aware of.

[travisjungroth]

Whether you consider it legitimate or not, Bitcoin Cash has about 4% of the value of BTC.

Here’s my point. Is it theoretically possible for some group of people in the physical world to take actions so that what we generally call Bitcoin has 1 more coin? I strongly believe yes. So the world isn’t as black and white as some people like to say it is.

[hanniabu]

Just as the stock market can only have 1 AAPL ticker, there can only be 1 BTC. Is it possible that in the future that BTC can have a change in emission and cap? Yes. I don't agree with that part of the parents statement. But there is in no way for there to be more than 1 BTC chain.

[empath75]

Who decides what's a legitimate fork? There have already been several forks, some of which maintain trading value.

[hanniabu]

The first part is consensus. The most supported one maintains the original name. The second part is support and use. Even though other forks have a cost, does not mean they are legitimate. I'm not sure if you've heard of Craig Wright, Calvin Ayre, and Roger Ver, but they are majority holders of these forks and control supply and therefore price. I will not go into a huge lengthy discussion about this here, if you Google this there are others that can provide more information and explain this much better than me.

[Blackthorn]

BTC forks all the time. Almost every new version of the code is technically a fork. It's just the forks usually have a single branch.

[drexlspivey]

That is not what a fork means

[Blackthorn]

Yes it is.

[root_axis]

By that definition ETH doesn't exist. Yet, clearly when someone says "ETH" we all know what they're talking about.

[hanniabu]

If it is known as ETH then it is the main chain, not the fork.

[root_axis]

Right. That's my point. Even though ETH hard forked to undo transaction history, the fork is still considered "ETH" because that is what the leaders decided (and the community agreed to that decision). If Vitalik had made a different decision then the "ETC" chain would still be called "ETH" today.

[cdiddy2]

whats missing here I think is the value of social consensus. None of these coins have any staying power without the social consensus that makes them the main chain. Its why there can't be clones with the same value popping up every day, there is clout that the dominant chains maintain

[spookthesunset]

Which fork is the real bitcoin?

[hanniabu]

If it's a fork then it's not BTC

[spookthesunset]

Sure but that doesn’t mean it isn’t “bitcoin”. Which bitcoin is the real bitcoin? Bitcoin Satoshi’s Vision? Bitcoin Cash? Bitcoin Classic? The fork I just made?

[Shish2k]

> there is no investment potential. It is just as bad as cash

I don't want to invest in money. I want to exchange my money for goods and / or services. It seems that bitcoin is great for the former and not so great at the latter :P

[ForHackernews]

> There are 21,000,000 BTC ever ever, you can't print more.

I see you're unfamiliar with Bitcoin SV, Bitcoin Cash, Bitcoin 2, Bitcoin Segwit...

[beaner]

This is a really stupid thing to say. SV coins are SV coins, not BTC coins. Their chains don't interact and can't inflate each other, so pointing out that there are multiple blockchains doesn't make any sense.

[ForHackernews]

The point is that all of these random tokens are functionally identical from the perspective of most users. If you're claiming there's a hard limit on the number of limited edition funko pop action figures produced, you'd better be able to explain what makes them any different than these other identical clones.

It'd be like if counterfeit designer clothes were actually indistinguishable from the "real" ones, and arguably better made in some cases.

[easymodex]

Yeah but they are not functionally identical as Bitcoin's value comes from it being immutable, decentralized and failure-proof.

Also a better analogy would be that you can make 1000 copies of the Mona Lisa in whatever way you want, they will still be just copies and they will be worthless.

[ForHackernews]

Bitcoin is just a shitcoin that happens to be popular right now. All the other altcoins make the same "immutable, decentralized and failure-proof" claims.

[easymodex]

Bitcoin is the only one with a track record to prove it.

[beaner]

The utility is not just in it's function but since it's money, also in it's purchasing power and it's network.

Your analogy is more like getting the Facebook database and spinning up 100 clones of it, all with 3 billion users. Now "Facebook" has 300 billion users. It could have a trillion or a quintillion right? Or an infinite amount. But what does that even mean if the actual 3 billion people only use the original network? It means Facebook is still Facebook, and forking it, in terms of how it affects the network it its value, is relatively pointless.

You're not making a real point.

[DINKDINK]

>all of these random tokens are functionally identical from the perspective of most users.

If a clone of Bitcoin is identical to Bitcoin then why does Bitcoin trade 25x the price of a clone? Your argument would cary weight if the protocol and price facets were similar. The market says otherwise.

[ForHackernews]

"why does Bitcoin trade 25x the price of a clone?"

Because humans are stupid, faddish creatures.

The market can remain irrational longer than you can remain solvent.

[DINKDINK]

The point was, in fact the bitcoin and bitcoin clones are not "functionally the same thing". If they were, there wouldn't be discrepancies between the two. Clearly the market punished the clone.

[h1d]

You're only looking into quick money but for you there are plenty of alts for that.

[oarabbus_]

You have it completely wrong. Bitcoin is intended to be a cryptoCURRENCY meaning in a proper liquid market there should not be any investment potential at all.

An appreciating asset is the exact opposite of a currency. You want your currency to be stable, or slight inflation/devaluation over time, or the consequences are it will never be used to transact.

[stcredzero]

If it is pegged to USD, there is no investment potential. It is just as bad as cash.

Tether became (at least for a time) a favored method for cryptocurrency investors to shift their positions to USD. I think Facebook has a good chance of doing the job better with Libra than Tether has done. This might put Facebook into an advantaged position in future payments services and cryptocurrency.

(One thing that just occurred to me: would it be possible to alter the operation of a stablecoin, such that parties who are trying to corner the market will automatically expose themselves to other parties who would exploit them?)

What if Facebook also came out with a stablecoin to the Yuan, the Pound, and the Euro, as well as their own non-stablecoin cryptocurrency? I suspect that this would give Facebook the same kind of information advantage currently enjoyed by petroleum multinationals in the petroleum market.

(EDIT: Euro)

[cycrutchfield]

The German Mark? Do they have a time machine too?

[stcredzero]

I'm showing my age. Euro.