[nuerow]

> Soooo. . . you're saying a tiny fraction of the population controls the vast majority of the resource? You mean just like every other major resource on the planet? :)

I understand the need to try to dismiss this problem, specially from those who have a dog in the race, but the dream of having a magical pseudo-currency that solves all problems and unexplainably makes everyone richer and richer just falls out flat if there are actually men behind the curtain manipulating it's value to screw everyone over in order to benefit themselves.

[anonporridge]

> magical pseudo-currency that solves all problems and unexplainably makes everyone richer and richer

That's not what's exciting about bitcoin. What's exciting is that it is the first digital, global money that isn't protected by the proof of violence of the state. The US dollar is the world reserve currency because the United States is the best in the world at deploying destructive power, and the British and French currency before that when they were at the height of their power.

It's a neutral currency that every nation state on the planet can be ok with, because the system is completely agnostic to who the participants are. The only thing it requires is that you have hash power and internet connectivity. Nation states will have proportional power in the system based on their respective abilities to deploy energy and compute power to the security of the network.

[ildon]

> The only thing it requires is that you have hash power and internet connectivity.

Your argument is a bit naive and this sentence I quoted is the one that shows the reason. Proof of Work is a energy intensive activity, not to mention the specialized tech it requires.

Access to energy today is more than ever a sign of the power (including military power) of a nation, so much that energy itself could be regarded as the ultimate currency [1]. Who has more energy is richer. In short that is because nations with abundance of energy enable all sort of activities. In nations in which energy is scarce, opportunities are constrained by the cost of energy.

Because energy in the world is still a relatively scarce resource, powerful nations control natural resources needed to produce energy in any way they can. The obvious example is oil, but also land itself can be seen as a means to produce energy: think of the space needed for solar.

So in the end when talking about Bitcoin we are back at square one. Even if it was the only currency of the world, it would still be controlled by those with more power.

In short: Bitcoin is governed by spending energy and CPU -> ability to produce energy and CPU -> control over means of production of energy and CPU -> international strength ensuring control over natural resources and IP.

[1] https://youtu.be/dcIQdlud88c

[throwaway248329]

> Even if it was the only currency of the world, it would still be controlled by those with more power.

You don't have to be a miner to use Bitcoin and miners don't control Bitcoin. Miners can't force a protocol change, no matter how much hash power they have.

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

[Valakas_]

Bitcoin is not governed by spending energy and CPU. In fact all miners on earth could disappear except a guy with a Pentium IV on his basement doing all the BTC mining on the world, and it would still work. The difficulty of the hashing would adjust so that it would be possible for his weak slow guesses to send a block every 10 min.

[FabHK]

And, like deployment of military power ("proof of violence by the state"), proof of work has significant harmful externalities.

[TeMPOraL]

> What's exciting is that it is the first digital, global money that isn't protected by the proof of violence of the state.

You say this as if it was a good thing. But is it? Look at it from the other direction: it's a tremendous optimization. Imagine a world of Bitcoin, where someone comes and proposes: "Look, we can all keep spending almost all of the world's energy production on scaling basic trade, or... we can just agree that I'll beat up anyone not playing ball, and we can put all that energy to productive use - like farming, medicine, construction, entertainment, science". Does it sound like a bad deal now?

Also, the only reason there isn't much threats of violence[0] associated with Bitcoin yet is because cryptocurrencies are tiny. Barely anyone in the real economy cares about crypto[1]. If, by some scary miracle of a trickster god, the economy starts caring for real, cryptocurrencies will get quickly integrated into the mainstream by regulatory means - and regulations are backed by proof of violence. And almost everyone will want that, too, because people will be tired of getting robbed or cheated out of their money. You can't correct an act of violence without another act of violence[2].

(It's not even that hard to rein in Bitcoin. All it would take is for the US govt to announce which chain is considered legitimate by them for the purpose of paying taxes, and that the rest is considered counterfeit money.)

--

[0] - Criminal activity notwithstanding.

[1] - No, noises made by large banks about running their own blockchains isn't caring - it's just exploring new potential areas of growth and profit.

[2] - At least if we generalize "violence" enough, to encompass credible threats of violence. If me stealing your money at gunpoint is an act of violence, then so is the court ordering me to give it back under threat of forcing me into prison.

[qeternity]

> What's exciting is that it is the first digital, global money that isn't protected by the proof of violence of the state.

I completely agree that the US govt and all super powers before it have made many mistakes, and shed much blood.

But the world isn't a utopian bubble free of conflict. The US military doesn't bestow value to the dollar because it goes around nuking every country in sight...it bestows value because it this huge potential of force keeps more peace than we would otherwise have. It's the same rationale for why a 51% attack on bitcoin is so unlikely: those with the ability to attack, also have the most to lose. Mutually assured destruction was not a new concept that started and ended with the cold war. It's fundamentally game theoretic and is why cooperative strategies are so powerful.

If you take into consideration all of the atrocities of the past 50 years, even the truly horrific scars on the US military industrial complex, this has been the most peaceful and prosperous period in all of humanity by a large margin. Could it be better? Of course, and we should strive for that.

But the same underlying reasons that the dollar is considered safe are the same forces that allow bitcoin to be successful. The fact that the world has come together and cooperated on a massive information sharing network called the internet is an example of something that, ignoring the tech advancements, would have been unfathomable mere centuries ago.

[pcwalton]

I really would like to see a defense of Bitcoin that doesn't rest on the assumption that I want to live in Galt's Gulch.

[fsflover]

https://news.ycombinator.com/item?id=29010965

[EdwardDiego]

> . The US dollar is the world reserve currency because the United States is the best in the world at deploying destructive power,

Orrrrr.... because its value is backed by the world's largest economy?

[nuerow]

> Orrrrr.... because its value is backed by the world's largest economy?

There's also the fact that oil is quoted in US dollars, and about 65 countries, about a third of all the countries in the world, peg their currency to the US dollar[1].

[1] https://www.investopedia.com/articles/forex/040915/countries...

[JumpCrisscross]

> oil is quoted in US dollars

As a former trader, this claim cracks me up. It makes the times I quoted crude contracts in euros and loonies and yen seem so subversive…

The truth is, until recently, dollars were easy to transfer. The Fed started moving money electronically in 1915; by 1918, a national wire system was established [1]. Between the USSR and U.S., only one embraced free movement of capital. As a result, when Lufthansa bought Airbus jets, they settled in dollars, and trades quoted in pounds would be settled in New York in dollars. That has since changed; so has how oil is traded.

The last time the petrodollar hypothesis was remotely true was in the early 1980s.

[1] https://en.wikipedia.org/wiki/Fedwire

[hnbad]

Sure but why do you think that is. What currency oil is quoted in has more to do with foreign policy than economics. Regardless of what reasons the US may have had to invade Iraq in 2001, Saddam Hussein was literally on record in 2000 for planning to switch away from quoting Iraqi oil in US dollars to the Euro[0].

There was a ton of talk about the 2001 invasions being about the US oil reserves for itself but that's based on a very simplistic understanding of US foreign policy. The US didn't annex the oil fields, it disrupted the national oil company's monopoly to allow privatization of the market and invite international (especially US and US-friendly) investors. It was really more of a hostile takeover backed by the world's largest military.

Again, I'm not claiming that this was the sole reason behind the invasion or the primary motivator, but the US has a history of privatizing nationalized industries of countries it successfully invades, overthrows or interferes in the elections of.

[0]: Not a conspiracy theory. Here's an article from Nov 2000: http://content.time.com/time/subscriber/article/0,33009,9985...

[leesalminen]

Just to be clear, the US invaded Iraq in 2003, not 2001.

https://en.m.wikipedia.org/wiki/Iraq_War

[hnbad]

I stand corrected. Post-9/11 was a weird time and it kind of all blurs together.

[CerealFounder]

Hah, its all protected by the proof of violence state. When someone is physically trying to take your assets, your going to convert that currency as fast as possible into physical force or protection.

The problem is a deep misunderstanding of currency. The structure of currency is a tool humans use to exert and identify power within groups. The idea that a decentralized currency will change human nature or goals to control miss the forrest for the trees.

We are animals the violence, control and waning and waxing dominance is the only predictable outcome.

[csomar]

That's a darker picture than what actually it is. Violence is mostly driven by lack of resources. When humans can co-operate for better outcomes, they usually do (or at least the successful societies).

> The problem is a deep misunderstanding of currency. The structure of currency is a tool humans use to exert and identify power within groups. The idea that a decentralized currency will change human nature or goals to control miss the forrest for the trees.

I agree with this. Most people see currency as money or wealth when, in reality, it's a representation of the structure of the system. That's why some countries are experiencing high inflation: It's not the printing of money but rather a symptom of deep internal problems within their economy. See Argentina for example.

[CerealFounder]

Sure, we arent always violent, but there always be people wanting what others have and imbalance otherwise there would be no relative value established.

Great example. I dont think its a bug that crypto is almost fully adopted by people who come from means. People are living in very different systems even in the US currently

[rhinoceraptor]

Bitcoin isn't a currency, it doesn't function as such. It can only support at most a few dozen transactions per second.

It's a speculative instrument, and its value is propped up by Tether, which pretty much everyone agrees is incredibly fraudulent.

[RedBeetDeadpool]

The Dollar isn't money, it doesn't function as such. It can't store value very well. Its a federal instrument, and its value is adjusted by the Federal Reserve, which pretty much everyone agrees is incredibly fraudulent.

[namaria]

Let's play a game. You get one bitcoin and I get the dollar value. Let's see who can obtain more goods in 1 hours with it.

[RedBeetDeadpool]

Let's play a game. You get one dollar and I get the bitcoin value. Let's see who can obtain more goods in 20 years with it.

[rsj_hn]

Let's play a different game. I get a dollar and you get the bitcoin value. Then each year, a random number is generated between 0 and 1, and if the number is more than e^(-1.5t), then each of us spends the dollar on a basket of goods and the game stops. We compare, after fees, who ends up getting more goods to decide the winner.

Average velocity of money is 1.5.

https://www.thebalance.com/velocity-of-money-3306130

If you want to compare the usefulness of a bitcoin as an investment locked up for 20 years, then don't compare it to cash, which is used for day to day expenses. The whole point of cash is to spend it whenever you want.

It's fine if you view bitcoin as an investment. But then your alternatives are other investments.

[danbruc]

What's exciting is that it is the first digital, global money that isn't protected by the proof of violence of the state.

I really like the idea of trying to build at least some part of society on top of mathematics instead of the laws of physics, but I am not really convinced that cryptocurrencies are an example or that this is even possible. The entire Bitcoin system is still made up of humans and hardware, there are still a lot of ways in which the laws of physics could overrule mathematics. Being distributed admittedly makes this harder but I think it is far from to point of being really effective.

[hnbad]

Except crypto isn't currency, it's an artificial resource with no inherent usefulness beyond exchange.

States won't give up their currencies because that would put all of them in the position of, say, Liberia, rather than the position of the US, EU or China who can literally print money to pay.

And even if all state currencies vanished over night, this would change nothing for individuals because the vast majority of wealth is claimed by a minority of individuals and the only thing guaranteeing their claim is the exact monopoly of violence of the state that also backs its currency.

You don't have a private yacht because the state guarantees the value of your money with violence against foreign nation state actors. You have a private yacht because the state will ruthlessly punish anyone other than itself trying to take it away from you.

The state may be holding a gun to your head to be able to take away what's yours at any time, but it also holds a gun to everyone else's head to prevent them from taking it first. This is why the extremely rich spend so much time, money and energy influencing politics. Not because they want to dismantle the state, but because they want to keep it from using the gun against them while still keeping it pointed at everyone else.

Without a state threatening violence to protect your claims on "private property" you'd literally have to raise your own private army to defend it. This is why leftists call anarcho-capitalism "feudalism with extra steps".

[jessaustin]

States won't...

El Salvador is considered by many to be a state.

[hnbad]

It's interesting that you didn't correct me on Liberia, which actually merely had its currency pegged to the US dollar temporarily. I must have mixed up Liberia with another country.

El Salvador is a fun case because they didn't exactly switch to the US dollar because their economy was doing so great but because it was either that or massively devaluing their already dodgy currency because they are a very small country and their economy heavily relies on international trade.

They introduced Bitcoin as "legal tender" on top of the US dollar against the will of the majority of their citizens but the law was part of a program to lure in foreign investments. This too followed earlier economic problems, so it's more of a cashgrab than a genuine interest in crypto currencies.

El Salvador replaced its currency with the US dollar. It did not replace its currency with Bitcoin. It also didn't replace the US dollar with Bitcoin, it just added it as a form of legal tender. It also suffered almost immediate consequences when the price of Bitcoin crashed and they had to dump additional money into it to compensate for this.

It's too early to say but at the moment this doesn't sound like a wise political move for El Salvador rather than a risky publicity stunt for the president.

[corobo]

That would have been the case if crypto had been used as a currency instead of as any other stock asset

You can't use it anywhere as currency! I guess you can buy weed with it online, but that's about it

[leppr]

I pay for my VPS, VPN, and Netflix subscriptions with BTC. I bought my camera, and various other gadgets with BTC at BicCamera in Japan. I sold my VR kit for BTC. I save and spend my RAI anywhere that accepts Visa with an Eidoo debit card.

[corobo]

In that case you should be writing articles, I'd read! :)

[nuerow]

> You can't use it anywhere as currency! I guess you can buy weed with it online, but that's about it

The same can be said about jugs of Tide detergent, but somehow that's not presented as disruptive technology of the future.

[corobo]

Man I've never had a dealer take Tide detergent

[troyvit]

Bitcoin uses a lot of energy. Power is (arguably, and not always)[0] gained or exercised through violence, if not of the state then of the large entities that generate that power, be it coal, natural gas, hydro or even solar.

[0] https://hbr.org/2021/05/how-much-energy-does-bitcoin-actuall...

[namaria]

Bitcoin has no currency. I can't pay taxes with it, I can't buy groceries with it. It's an asset at best. A wallet has a claim on a number stored in distributed database. No more no less.

[nuerow]

> That's not what's exciting about bitcoin. What's exciting is that it is the first digital, global money that isn't protected by the proof of violence of the state.

No, not really. At all. You're trying to make it sound like everyone is just an anarchist activist trying to fight the power, when in reality it's just people scrambling to make a quick buck.

Let's be real and put it in perspective: do you feel that people such as the Winklevoss twins give a damn about theoretical concepts such as "proof of violence by the state"?

[spiorf]

Motivation of participants is irrelevant. Bitcoin is working because its participants are greedy and behave as such.

[nuerow]

> Motivation of participants is irrelevant. Bitcoin is working because its participants are greedy and behave as such.

The key problem you're trying to glance over is the fact that not all participants have the same degree of influence or control.

A greedy participant who is in a position to manipulate the market to fit his goals is in an entirely different position than a greedy participant who is completely powerless and vulnerable to this manipulation.

Is it ok if someone participating in a Ponzi scheme is fleeced just because you accuse him of being greedy?

[hnbad]

> Is it ok if someone participating in a Ponzi scheme is fleeced just because you accuse him of being greedy?

I know this is counter-intuitive, but yes. Yes, they think that.

They think that human nature is to be greedy and screw other people over to your own advantage. This is what they mean that capitalism is natural because it builds on human nature. Nevermind that for most of history human societies have been built on gift economies or that humans always cooperate in times of extreme crisis unless there are external influences explicitly preventing it.

Social interactions are transactional to them and if you luck out by participating in a Ponzi scheme early that's good and righteous but if you lose by coming in late and being fleeced, it's your own fault. Luck justifies the spoils of success.

[nuerow]

> Nevermind that for most of history human societies have been built on gift economies or that humans always cooperate in times of extreme crisis unless there are external influences explicitly preventing it.

The key point here is that in BTC, or any crypto or unregulated market, there is no external influence preventing it. In fact, there are only external influences ensuring that they will screw up the little guy and fleece them out of their hard-earned money.

With real money, we have central banks actively working to both stabilize it's value and increase economic growth. That's as close there is to "cooperating in times of extreme crisis" there is at a national or even regional scale.

With crypto in general and BTC in particular, the name of the game is pumping it and let everyone else end up holding the bag.

[bart_spoon]

> Bitcoin is working

It isn't working though. It isn't practically useful for anything. They only people getting value out of bitcoin are doing so by converting it back to fiat. You can't buy virtually anything with Bitcoin.

If Bitcoin was meant to be a pyramid scheme where you get rich by convincing others to prop it up long enough for you to cash out, it is working. As a currency, its a total failure.

[derangedHorse]

This is a false statement, communities have found value in Bitcoin. El Salvador being the go-to example but we're also seeing adoption in other places, exemplified by the acceptance of Bitcoin at the Venezuelan airport. In addition to that we're seeing companies dedicated to the ad-hoc conversion of crypto to local currencies using specialized debit/credit card. This will effectively help facilitate the move to the ubiquitous spending of crypto.

[koonsolo]

> do you feel that people such as the Winklevoss twins give a damn about theoretical concepts such as "proof of violence by the state"?

They of course do give a damn about theoretical concepts such as "The Great Monetary Inflation"

They make a pretty good case for bitcoin at https://winklevosscapital.com/the-case-for-500k-bitcoin/

But don't worry about all of this, I'm sure you can just dismiss this all. Meanwhile our investments are going through the roof :P

[nuerow]

> They of course do give a damn about theoretical concepts such as "The Great Monetary Inflation"

It seems you tried to shift the subject mid-discussion and thus move the goalpost. The point being discussed was "proof of violence by the state", but somehow you've tried to change subject mid-discussion to inflation and how they argue that going long in BTC is a profitable investment.

In fact, the Winklevoss Capital article you quoted even praise the US dollar as "a reliable store of value" and even go as far as praising the Federal Reserve and it's "comparatively good management".

This doesn't sound like "fight the power" to me. In fact, it just reads as a marketing brochure selling an investment.

[koonsolo]

> the Winklevoss Capital article you quoted even praise the US dollar as "a reliable store of value"

Haha, you must be blind. Nowhere in the article did they say that. I quote: "we believe there are fundamental problems with gold, oil, and the U.S. dollar as stores of value going forward". Then they go on to explain how the dollar is mismanaged.

Have fun living in your own world.

[nuerow]

> Haha, you must be blind. Nowhere in the article did they say that.

Second paragraph. Hard to miss by anyone who clicked on the link. Be my guest and check it out.

> I quote: "we believe there are fundamental problems with gold, oil, and the U.S. dollar as stores of value going forward".

Somehow you managed to skip just enough of the text to glance over the part I quoted and you claimed it doesn't exist. That isn't very honest of you.

Anyway, it seems you also failed to notice that the thesis of that article is that the economic stimulus programs adopted by not only the US but also essentially the whole world, like any Keynesian policy applied to an economic downturn, involves policies that devalue the dollar through inflation.

They also argue that they believe that gold is immune but has a fixed supply that can accompany increases in demand.

Based on these points, they proceed to argue that Bitcoin is a better long term investment because, unlike gold and the US Dollar, it's supply is capped, thus it's value is bound to grow faster than inflation and gold prices, provided that demand continues to grow.

With this in mind, do you actually understand the sales pitch made by Winklevoss Capital?

[piva00]

> For the last 75 years, the U.S. dollar has also been a reliable store of value. This is a result of its comparatively good management by the Federal Reserve and the strength, resilience, and reputation of the U.S. economy. In fact, it is the most widely held fiat currency in the world and recognized as the global reserve currency, denominating and settling the majority of international trade.

Basically their whole schtick: "we believe that the US dollar has been amazing, now we found this new asset class we believe we can invest and earn money on, this is our marketing piece for why you should believe that too".

They aren't "fighting the man", they are trying to convince others to jump onto the bandwagon which they are heavily invested in to make a profit.

Not sure why you are still caught up on this ideological debate when Bitcoin has long ago left that camp of ideology and got absorbed into the pure financial-capitalist camp...

Bitcoin now is to make money, not to fight the system. Fighting the system is just the marketing fluff being used to capture people like you.

Good luck and godspeed.

[bserge]

Energy and compute power backed by, you guessed it, proof of violence.

[jimbob45]

I have this problem with crypto in general on here where I can’t trust anyone with pushing arguments centered around pathos or ethos because I can never know if they’re just trying to gin up support for crypto in general so that theirs isn’t the final level of the Ponzi scheme.

To everyone I’ve misjudged who genuinely enjoys the theory being crypto: I’m sorry.

[hutzlibu]

"but the dream of having a magical pseudo-currency that solves all problems and unexplainably makes everyone richer and richer "

I never heard that claim from crypto supporters, only from critics.

[EdwardDiego]

You need to read more of their subreddits then.

[mudlus]

That's for he mislead, the normies, the grifters and shitcoiners. Those of us in the small minority "controlling Bitcoin" read stuff like this: https://lists.linuxfoundation.org/mailman/listinfo/bitcoin-d...

[Hermel]

If you think the article provides evidence for any of what you are saying, you should read it again. Do you really believe the 1000 top holders of Bitcoin that control together about 15% of the supply somehow conspired together to manipulate the price?

Yes, there is a lot of small scale shenanigans with crypto currencies, but Bitcoin has become very hard to manipulate due to the sheer size of the market.

[SpicyLemonZest]

I really believe that. Remember that the size of the housing market didn't protect it from manipulation in the early 2000s - having a huge pile of independent market participants doesn't mean they can't all be tricked into trading at the same inflated prices.

[nuerow]

> Do you really believe (...) conspired together to manipulate the price?

> Yes, there is a lot of small scale shenanigans with crypto currencies, but (...).

There are no buts. Either the market is manipulated, or it isn't. You already acknowledged it is manipulated, but somehow the degree of difficulty to pull it off is of any relevance? Why do you feel this matters?

Meanwhile, here's an interesting read.

https://www.bloomberg.com/news/articles/2021-01-14/research-...

[csee]

The subject of those two sentences is different. The first is BTC, the second is smaller coins.

[koonsolo]

> a magical pseudo-currency that solves all problems and unexplainably makes everyone richer and richer

That is not what cryptocurrency enthusiasts believe.

I understand that you have to explain to yourself why others are dumber than you, even though they made crazy amounts of gains.

But maybe in the end, we just see something that you refuse to see.

[EdwardDiego]

> But maybe in the end, we just see something that you refuse to see.

I'm assuming you see an infinite supply of greater fools.

[koonsolo]

That is not what I see. That is what you tell yourself what I see.

[emptyfile]

A chance for a fast buck with much risk and little work? How revolutionary...

[koonsolo]

The best investment is to buy something that is undervalued. That also means you have to see value where others won't.

[joshuaissac]

> if there are actually men behind the curtain manipulating it's value to screw everyone over in order to benefit themselves

The article does not support the claim that the top investors and miners are engaging in cryptocurrency manipulation with bitcoin.