[xpe]

Your comment is unclear.

> What is surprising is how large the number of techies who don’t get this.

What do you mean by "this"? Do you mean all of the points made by the author in the tweets?

Or do you mean "the following" instead of "this", referring to what you think is most innovative about Bitcoin?

[tzumby]

If you don’t believe that there is value in a distributed self replicating Byzantine tolerant state machine, that’s fair, everybody is entitled to their opinion.

[onlyrealcuzzo]

Considering that it hasn't produced any value of note in 13 years, I'm gonna go out a limb here and say I don't think it's worth 2% of the entire world's wealth - and certainly not 3% of the world's energy.

[xpe]

In this comment, I'm assuming you are talking about Bitcoin.

> I don't think it's worth 2% of the entire world's wealth

Taken literally, if 2% of the world's wealth is in Bitcoin, so isn't that its value, by definition?

I'm not trying to nitpick. I'm trying to push back on what seems to be a glossing over of the fundamentals.

I wonder if what you mean is that you don't think it is _wise_ for people to put so much of their assets in the form of Bitcoin.

Now, if we want to have the discussion of "how has Bitcoin affected the economy?" it is not enough to only look at a snapshot of how wealth is allocated at one instant of time. We should be looking at a differential view; i.e. before and after.

In particular, an economist would ask questions such as...

1. How has Bitcoin changed transaction costs? Who bears these costs? Over what time frame?

2. To what degree does the structure of Bitcoin provide advantages relative to other assets?

3. How does the development of Bitcoin factor into a longer-term view of experimentation and innovation?

4. To what degree has wealth been reallocated due to Bitcoin? To what degree did it disrupt existing wealth patterns?

And so on...

[onlyrealcuzzo]

People paid a lot of money for Enron stock before it exploded. Did that mean it was worth $70B the day before it exploded and suddenly it was worth nothing when people found out it was actually all a fraud?

Enron wasn't actually producing any value. Neither are self-replicating Byzantine fault tolerant systems.

Anything they can do can be done hundreds of orders of magnitude more efficiently. And nothing they are doing /requires/ the inefficiencies.

I mean, obviously people at Enron were doing /something/ in the same way Bitcoin is. And obviously investors were paying a lot of money for that at one point and then stopped paying for it when it became clear that /something/ was mostly fraud.

[xpe]

There are some pitfalls in comparing a particular stock (e.g. Enron) against a class of cash-like assets (e.g. Bitcoin).

If you want to make the comparison, perhaps you could lay out your logic?

So far, I haven't found a clear, direct, fundamental argument in your comments. I see some loosely related examples and some rhetorical questions. I am interested in your justification and terminology.

[xpe]

Market capitalization varies over time, sometimes quite rapidly, because it (partly) depends on human perception.

Am I detecting some conceptual discomfort with how market valuations work? You wouldn't be the first.

[xpe]

What is your definition of value / worth, as used above?

I can see that it is not market capitalization.

[mosheroperandi]

Post-communist Albania offers a interesting parable: https://www.imf.org/external/pubs/ft/fandd/2000/03/jarvis.ht...

Various pyramid-like enterprises sprung up in the new, underregulated markets. At their peak, the schemes were worth upwards of half Albania's GDP, were participated in by 1/3 to 1/2 of the population, and enjoyed support from the government.

For a time, all investors enjoyed good interest payments. But all the popular adoption and shared belief in value couldn't fix their underlying insolvency and the ensuing collapse once new deposits dried up.

Whatever quantifiable value, if any, Bitcoin produces for being a BFT ledger is not nearly enough to offset the constant, massive value drag require to pay for mining costs. That x% of the world's wealth is currently tied up in it is not proof against its fundamental insolvency.

[xpe]

> not nearly enough

Can you estimate (1) Bitcoin's value, as you see it and (2) the mining costs?

Various actors (of varying legality) benefit from Bitcoin to varying degrees.

[xpe]

From what I can tell, much of this discussion seems to be characterized by people miscommunicating.

> Considering that _it_ hasn't produced any value of note in 13 years...

What do you mean by "it"? Do you mean (a) Bitcoin in particular; (b) some/many/most/all cryptocurrencies; (c) a distributed self replicating Byzantine tolerant state machine? Or something else?

The comment by tzumby meant (c). Generally, the HN thread was about (b), best I can tell.

[baby]

You’re barking at the wrong tree. Bitcoin is not bft

[xpe]

I don't think anyone is denying that there is value in any subset of the following:

* distributed systems * self-replicating systems * Byzantine fault tolerant systems * state machines

The tweets by Pinboard are largely talking about social and societal issues. Both technical and societal issues are important. They are intertwined.

[baby]

Pinboard ignores the tech because he doesn’t understand it, yet he talks about societal impact without understanding it as well.

[xpe]

This is a blanket, unsupported statement. It isn't persuasive.

> ignores the tech ...

Not true. He doesn't ignore the technology of Bitcoin.

> because he doesn’t understand it

Please show evidence of this. You are not "in his/her/their head", nor is it likely that you've had a conversation where you can assess. It is more likely that Pinboard disagrees with you largely because of value differences.

[baby]

“Of bitcoin” yet targets all cryptocurrencies

[tzumby]

this = blockchain + proof of work / proof of stake , in my comment. The crypto currencies are a requirement to fulfill the Byzantine tolerance. They need to have value in order for the incentives to make sense

[xpe]

> The crypto currencies are a requirement to fulfill the Byzantine tolerance.

I find this writing to be unclear and/or circular.

Are you saying the following? _If_ the primary goal of a system is Byzantine fault tolerance, using a cryptocurrency is a requirement?

[tzumby]

Sorry, you have a point. I re-read my comment and it's not very clear. We need two things to achieve the Byzantine fault tolerance:

- a way to ensure that users of the system can't cheat by creating a vast number of nodes and inflate their "voting power" (think of a poll where you can get behind a proxy to vote multiple times because the only security is weather or not the IP voted): this is the hash-cash, proof of work computation that ensures you have real hardware behind your "vote"

- an incentive to mine and secure the network: the cryptocurrency. The amount of cryptocurrency you mined is just a translation of the energy and work you did to secure the network the same way as a banknote is a conversion of X number of hours you worked for someone.

The question, like I stated in another comment, is whether or not this distributed ledger is useful. Let's say we haven't discovered the killer use case for this yet (putting my skeptic hat). Is it fair to dismiss it just because of all the scams related to its current use ? Do we do the same for email just because there's so many phishing attacks that happen on the protocol ?

[Graffur]

I've been asking for similar clarification on other comments. I think this whole thread has become useless.