Disconnect a country from the Internet (or filter the traffic) and you're forking the chain. Spend on both networks by buying other (unfiltered) crypto. There are states (even large ISPs) that can do that.
Also, the first thing to go in case of global conflict is the global Internet. Countries will try to damage opponent's internet links to gain strategic advantage.
Crypto currencies will be useless in this case, losing all of their value.
There's always the concern of a bug in the protocol, a solution to the hash function or plain old human stupidity that can crash the currency.
I guess my point is: be careful, this is still very much experimental, don't invest everything you have in them.
Are countries exchanging actual loads of gold and/or cash around? If the answer is no, then isn't it all just data on a hard-drive?
In that case damaging internet links will have the same effect all around, though information can probably still go in/out in different ways with some effort. Is there some aspect of crypto currency that makes it different (honest question)?
Bitcoins however doesn't really have a intrinsic "rest" value. Anybody can (and many do) spawn a new blockchain out of thin air. Ironically Bitcoin is entirely about trust at the core. The trust that the other participants in the bitcoin economy won't lose faith in the currency and dump it. That trust is the only thing that gives the coin value.
It doesn't mean they would not be affected by internet going down. They would be hit hard. But they would not disapear.
But, it wouldn't take too many parties having access to both networks to prevent the fork in the first place. The miners who control such things are very highly incentivized to keep their operation on the main or largest fork.
The alternative for the miners would be doing work on a fork that has the distinct risk of being worthless as soon as the network issues resolve.
There are very distinct risks. But ones that have "real world" parallels. Think bars of gold becoming less valuable than antibiotics now worth pennies. Or Marlboros. In the shit-hits-the-fan scenario, values of everything goes crazy not just cryptocurrencies. $1000 smartphones without electricity or networks become paperweights.
Not hard at all. Have a second uplink to the world wide net, e.g. via sat.
It's like a USB stick but it stores inside a Bitcoin private key that's not revealed to the user unless they visibly break a part of the stick. This basically allows you to "load" bitcoins on the stick and give to others while being relatively certain of the "transaction" while of course being offline.
I assume it's probably possible in theory that with an electronic microscope or something similar a skilled engineer will be able to read that private key, but I haven't read of any reports that it has happened yet, but it all depends on the value contained to make it worth the effort and even then we won't know.
This basically allows off-chain & off-internet transacting which is really cool and enables the use in some more cases.
Personally I know that Bitcoin is not perfect, it has strengths and weaknesses but it's good enough for a lot of use-cases at the moment and it will keep getting better. There are quite a lot of talented engineers & cryptographers actively working on Bitcoin and cryptocurrencies that will move things forward quite a lot. Unlike Gold, Bitcoin can be upgraded to do more thing and evolve, be it Bitcoin or some other cryptocurrency, unless we live on an age of having govs ban a technology it will find its place on our daily lives.
Less so than in the past: https://blockstream.com/satellite/menu/
> I guess my point is: be careful, this is still very much experimental, don't invest everything you have in them.
Well, that much is obvious.
Here Adam Back said: "With a perpetual generator out back with a satellite dish, a Raspberry Pi by the generator, a local wi-fi hot spot, and the necessary software set up, you could be transacting globally with bitcoin."
Anyone can explain me why is the need for a local wifi hot spot here? And how much does it normally cost to setup a satellite dish?
Not to mention countries do have the ability to jam satellite signals. Here's the first article I find on google search: http://www.spiegel.de/international/world/silencing-unwanted...
Furthermore unless I'm missing something these satellites broadcast the blockchain but don't relay new transactions. That means that if I'm stuck in some place without internet access I can use the satellite network to keep my copy of the blockchain up to date but I still can't make new transactions, effectively making it useless. I guess they could expand their services to allow for satellite transaction relay but that sounds very expensive.
Amazingly, not really. Bitcoin is a currency that's built to be disaster-proof, including world-ending scenarios like nuclear war between superpowers. You really just need 3 things:
1. A computer that can validate the chain.
2. The longest chain. This can be given to you via usb stick if the Internet is down.
3. Some way to send and receive blocks and transactions as the network continues building the longest chain.
A lot of work has gone into being able to achieve number 3 without full internet infrastructure. The example of a satellite beaming blocks to the world has already been brought up (though this is receive only, not send-capable for most people). However, people have also written software that can transmit blocks over HAM radio. You can't download the full blockchain over HAM relay, but you can relay blocks and transactions in real time, because the whole network is bottlenecked to about 2 MB per 10 minutes.
If you have wifi routers, you can set up point-to-point relay and broadcast systems as well. A point-to-point system can get well over 100 miles per hop. If the Interent were to suddenly fail, it may take a few weeks to connect everything together, but you could get Bitcoin up and running long before you could get anything like email working again.
> There are states (even large ISPs) that can do that.
While there are states that can split you from the main Internet, all you need is one relay that the state can't control to keep the Bitcoin network connected. It's not like a website where people have to keep asking a central server for data - once one person has relayed a block into an isolated network, the whole isolated network has that block. You can't keep the network isolated unless it's perfectly isolated, and on the scale of a country you are of course going to have people listening to the satellite broadcasts, setting up wifi relay points, or maybe even doing something less sophisticated like usb-smuggling which means it effectively takes a few days to be certain that a transaction has been confirmed by the broader network.
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TL;DR: Bitcoin is far more resilient than you give it credit, and it can survive the Internet going down. As long as you still have an ad-hoc way to transmit blocks to major areas, you can keep everyone fully in consensus. The infrastructure requirements of Bitcoin are far less than that of email, sms, or traditional website based, centralized infrastructure.
What's the verification mechanism if you're given two or three USB sticks all swearing they have the latest and greatest blockchain?
Is there more mining capacity inside China than outside China?
If so, and the Chinese government used their well-known firewall against Bitcoin for a matter of days to weeks, would Chinese miners have the longer chain? And thus the chain?
I guess what I'm wondering is if the government of China has the ability to DOS Bitcoin as a payment system outside China at will.
The chain will fork, and after Bitcoin + Bitcoin Cash and Ethereum Classic + Ethereum it's reasonable to assume both versions will co-exist to some degree.
Pedantic nitpick - there are crytpocurrencies which are not distributed proof-of-work blockchains, and would not necessarily lose all of their value.
Not that much. Most refugee camps have cell coverage and people there use btc as it's the only money they have access to.
> I guess my point is: be careful, this is still very much experimental, don't invest everything you have in them.
Also experimental: Central banking and fiat currency. The lifetime of these non-crypto backed coins isn't that great either. Also they tend to be devalued in times of war. Not sure I'd want to be holding onto paper money.
Yeah, a currency that strongly depends on a stable and free internet is much better in times of war. /s
That argument never made any sense to me. What's the fundamental value of $1?
People assign value to all things based on how desirable they are (the demand). There are rare exceptions, like when a government ties their national currency to something like the dollar, but that immediately creates a black market, where it trades for its real value, and because of that, the government exchange only works one way (to buy or to sell). See Bolivar as a current example.
I think that the same argument could be held for digital currencies, they were created for a similar purpose and then would also have fundamental value. The value that digital currencies has is far more tenuous than fiat currencies or gold.
But don't get me started on the value of gold. Gold has the same issues as fiat, it's just more likely to be stable after the complete breakdown of society.
The fundamental value of cryptocurrencies is a shared agreement of value amongst investors.
I imagine some snotty 14-year old would argue that there is no fundamental distinction between the two but that's not being economically serious.
If people stopped believing in America, the dollar would go. How little would have to fail for Bitcoin to have the same problem. I've heard that if the person who owns the large stake in Bitcoin were to transact even one of their coins, all hell would break loose. That doesn't spell stability to me. Neither does "forking" the currency.
It's quite clear to me which one is a more moral system.
Again, based on your own definitions.
And then Bitcoin is accepted in tens (maybe hundreds) of thousands of online stores.
Also only something like 10% of gold is used industrially, the rest is regular hoarding.
And Bitcoin has other uses as well.
But even if you ignore all that, you still can't answer what the fundamental value of 1kg of gold is - it's value is determined by the supply/demand, and has a lower limit, which is it's mining cost, which also changes all the time due to depletion, fuel costs, technological advanvements, land costs, etc.
You can settle $1 of government debt with $1.
If someone owes you $1, you can offer to take other amounts of other goods or currency, but you are required to take cash dollars.
I can wipe my butt with a dollar bill. I can use that dollar bill to snort a line of cocaine. I can make a paper football out of it. I can use it to help roll a joint. I can fold it into a small coin purse to hold change and keep it from rattling in my pocket.
The dollar bill, being a physical object, has some utility, and thus some value.
Can you do any of those things mentioned above with a Bitcoin?
If a competitor is able to fix some of Bitcoin's serious problems, it deserves to win. Though I can understand if you're worried about competitors that lack some of Bitcoin's key properties.
So perhaps one day a new coin will overtake Bitcoin, but my guess is that the coin will need a very distinct advanatge to gain traction.
The deflationary aspect of Bitcoin will probably get in the way at some point - hypothetically, if you owned BTC and USD today, why would you ever spend a BTC? Spending even costs you money (in transaction fees), while saving doesn't. It's the system that rewards hoarding.
There is no such thing as an objective theory of value. ALL value is subjective (meaning each person values the same thing differently). The more you learn about what money is, the more you realize that there are qualities of money that make it valuable/appealing to be used AS money (e.g. fungibility, low to no inflation, difficult to counterfeit, scarce, easy to verify authenticity). This is why things like sand and hair make for poor money, and this is why the free market essentially chose gold as money before governments co-opted, confiscated, and controlled it. Gold would most likely be the primary money today if people had been free to transact using gold as money [0].
Governments stopped the use of gold as money because they can use fiat currencies to fund the operation of the government (by increasing the supply of fiat and buying their own debt with it), reducing the purchasing power of their own currency and acting as a tax on savers. Bitcoin is a serious threat to that because unlike gold, it is orders of magnitude more difficult for governments to confiscate and control.
[0] https://en.m.wikipedia.org/wiki/Liberty_dollar_(private_curr...
EDIT: Spelling
Dollars are "guaranteed" to have value because they are "legal tender," ie you can pay your taxes and buy things with them. As long as the US government has power, that will continue to be the case.
I can definitely see btc being a viable currency in situations where a government's power is limited but, for stable countries, it seems more like a commodity, and that's definitely (at least it seems to me) how people are treating it.
Dollars (and all fiat for that matter) have value because once upon a time paper money was tied to a specific weight of gold / silver stored in a bank vault. Over the past 100-ish years that link was slowly eroded until the point where there was no backing whatsoever. Inertia is the only thing keeping fiat currencies going, and it's not going to last forever now that alternatives (like cryptocurrency) exist and governments can't shut them down (like they did with the Liberty Dollar [1]).
After a couple more financial crises in the West and bank bailouts I suspect ALL governments will have limited power in this domain, people aren't going to let their savings be inflated into oblivion for the rest of eternity.
[0] https://en.wikipedia.org/wiki/Hyperinflation_in_Zimbabwe
[1] https://en.wikipedia.org/wiki/Liberty_dollar_(private_curren...
Nonsense. Nothing stops China from seizing all of the largest bitcoin mining operations tomorrow, and building some additional miners to conduct a 51% attack. They would then effectively control the network. Bitcoin is actually easier to control than fiat currency or gold because it requires network access.
> What, though, is the value of a digital currency?
> It's a fair question, but one that could equally be leveled at gold. Since Richard Nixon ended the fixed $35 an ounce convertibility of gold in 1971, its value has risen at times (the 1970s, the 2000s) and fallen at others. The best argument to justify investing in gold these days is not that it's an eternal "store of value" but that its very weirdness makes it special: According to modern portfolio theory, you should buy the shiny stuff not for its superior investment returns, but because it doesn't correlate much to other asset classes such as stocks, bonds and commodities.
One can argue about the validity of the "gold is equally worthless" argument, but I was just impressed that the article didn't shy away from these hard questions.
But I'm tired of the BS line that "gold has no value" continues to be repeated as nauseam. If people value it, then it has value. If people don't, then it doesn't. End of story. Things don't have value because some Minister of Value makes a proclamation about what has value and what doesn't (USSR tried that, didn't work!)
I go to shop and pay $0.5 for 2kg of potatoes (or a bottle of beer), and pay $4.3 fee, and wait 1 hour for confirmations?
Why is this meme constantly getting repeated? As I said yesterday (https://news.ycombinator.com/item?id=15176214), paying 10+ satoshis per kB gets your transaction in the next block most of the time. It's still true as of today https://jochen-hoenicke.de/queue/#8h.
For better or worse, Bitcoin has evolved into a financial-scale product, no longer something one would use to buy $0.50 of potatoes.
(P.S. $0.50 for 2kg of potatoes or a bottle of beer? both of those are a great deal)
Who wants to wait _any_ number of blocks for a payment to clear, anyways? Blockchains provide a trust anchor that serves well as a settlement system, but they aren't intrinsically payment networks in and of themselves — the ideal experience is of course an _instant_ payment, and waiting for confirmations just doesn't cut it.
This is why so much effort is going into building payment rapid networks on _top_ of Bitcoin, using "rapidly-adjusted micropayment channels" [0] and routing protocols to build things like Lightning [1].
And you're pumping IOTA in this same post? Unbelievable, these days.
Current fee experience of Bitcoin: https://twitter.com/alansilbert/status/905106387260370945 Historical fees: https://bitcoinfees.21.co/
[0]: https://en.bitcoin.it/wiki/Contract#Example_7:_Rapidly-adjus... [1]: https://medium.com/lightning-resources
It's got one of the most exciting whitepapers I've read. Also has a great Board of Directors and some really great advisers behind it.
People seem to get caught up on the word "value" and then rush to defend Bitcoin's use cases and unique technology as making it valuable. I don't think it's a diss when people say Bitcoin has no fundamental value. A thing having use cases or unique properties is not what "value" means in an exchange market sense. "Fundamental value" is also known as "intrinsic value" and is based on the BUILT IN return potential of an asset. So stocks and bonds have an intrinsic value because they generate a return, based on dividends or interests rates they pay.
A thing is only worth what someone will give you for it. So EVERY value needs to be in terms of something else.
An ounce of Gold, 1 bitcoin, 1 US dollar, have NO intrinsic value because you can hold them forever and they will never pay you a dividend or make a coupon payment on their own. Gold has a few practical uses in jewelry and industry but that's not why it's important. Bitcoin and the dollar have ZERO "value" beyond being a place to store something else's value. Well back in the day a dollar in the bank might earn you a small interest rate but hello 21st century. Bitcoin doesn't even offer an interest rate. Gold is not a good long term investment. But Gold is good to have in case of emergency. I imagine bitcoin will be similar. Bitcoin and gold COST you money to own them. The people who make money off gold are the miners and then forever after the banks and security companies who store physical gold for you at great expense. Bitcoin should be similar in this sense as Bitcoin can create a spread income over the energy costs and the transaction fees it generates every 10 minutes.
My guess is since 90% of the bitcoins that will ever be mined will be mined within the next 2-3 years. And there will be lost coins. So maybe 15 million coins will be around long term and that number will slowly shrink. The fees will start to be more important.
I don't think Bitcoin is a Ponzi scheme. Bitcoin has a ton of great uses and tech features. And most importantly it has signaling properties. While Bitcoin is unlikely to be the main digital currency people on a daily basis as the 1 MB limit does appear to cause issues. It would be very bad for all digital currencies if bitcoin went away.
