Making big $$$, obviously.
It's very clear that the whole decentralization tech angle failed a long time ago. I had a passing interest, but completely lost it around 2017-ish, when BTC blocks started filling up.
It seemed completely clear to me that a "Peer-to-Peer Electronic Cash System" couldn't tolerate such dysfunction. Usage as cash wasn't working. In the end capacity had to be promptly increased, or obviously there'd be huge problems for everyone.
The first nail in the coffin was that blocks weren't expanded. The second one was that while there were plenty alternatives, BTC retained dominance, and that even forks that theoretically were superior because they did what they were supposed to do far better, BTC still won out.
So clearly I was wrong, BTC wasn't functioning as a "cash system", and this obviously didn't matter to the BTC users, and didn't matter to the world at large either.
Thus eventually it dawned on me that there were maybe a few people out there that had some interest in a "Peer-to-Peer Electronic Cash System" and the "tech", but the vast majority out there were only interested in a world-wide game of hot potato, where the only point is to accumulate coins early, then sell them to some fool on the top, and cash out.
If a fork or alternative to Bitcoin doesn’t get enough people to think of it as money, then it doesn’t really matter if it is ‘superior’. It won’t win against the thing that a very large number of people think is money.
Edit: punctuation.
A good speculative instrument is also definitionally a bad currency, even aside from the technical “barriers” BTC faces.
Perhaps they thought it was an asset that others would pay money for, like a pyramid scheme. They were buying shares of Bitcoin, essentially. People were buying financial instruments linked to worthless real estate in the 2000s; they thought they were (sufficiently liquid) assets, not money.
What evidence do we have that people thought Bitcoin was currency and not an investment instrument? I know there's some Bitcoin-as-cash going on, but how much, and how much today?
Even Bitcoin proponents now longer propose "using Bitcoin" but "holding Bitcoin" and cashing out to fiat if they have to use money.
And that's a huge problem, because the whole point of Bitcoin was decentralization and lack of need to trust anyone. And yet it seems the winner is simply whoever plays the PR game best and has the most inertia.
There are many more requirements than that for an artefact to become money
Bitcoin misses out on most
Yes, this was the last straw for a ton of people actually interested in developing the technology, and it's when a lot of people moved their primary focus to Ethereum.
In 2017, the Bitcoin developer community did a hard pivot away from "electronic cash" and towards this "store of value" obsession, where Bitcoin is meant to replace gold. This was an incredibly noisy and disruptive pivot that tore the community in half. These were the "Blocksize Wars", and I could rant for hours about them, but obviously not here.
The thing is, Bitcoin up until that point was functioning very well as cash. Starting in 2013 I was regularly using it to buy coffee from coffee shops, and pay my bill at restaurants, and with literally a one line change it could have kept enabling the cash use case easily for another decade, and with maybe a 20 line change proposed by Jeff Garzik in 2015, it could have easily scaled forever.
The focus on serving the financial industry over everyday users was a very deliberate one. It wasn't a bad move, tactically, just very disappointing.
Except we know as software engineers that solutions to problems at scale are never that simple. The "just increase the block size limit bro" solution doesn't consider the externalities that increasing it would have on the network performance and decentralization. This is the same line of reasoning about this whole thread, compromising decentralization compromises the ability to use a credibly peer-to-peer (cash) system.
If you're referring to the blocksize wars, you aren't looking at a long enough time horizon. No system can afford to keep settlement records of every transaction processed by VISA/Mastercard for the rest of eternity. In order for bitcoin to finish displacing existing payment systems some sort of off-chain settlement is unavoidable.
Refusing to increase the blocksize forced people to start working on this instead of just kicking the can yet again. And hey, guess what, five years later I can use Lightning to upvote posts on https://stacker.news (without even waiting for the next block to be mined!).
We've seen the alternative play out in forks that have become completely centralized as a result of ignoring the tradeoffs with the technology in use, and as a result have been undermined with "functionality" like confiscation transactions (transactions that let miners take any coins they choose).
What bitcoin isn't is a paypal clone. That already exists and it's not of substantial value to the world to add another centralized high volume payments rail. It's absolutely fine that people also want to use it that way, but optimizing for that case can't come at the expense of the security properties that make Bitcoin interesting in the first place. Alternatives that make different tradeoffs do exist, and I think the results speak for themselves.
So once all the coins are mined and if there are not many p2p transactions occurring, then what incentive is there to mine and support the network?
Will coin owners just mine their own private blocks whenever they need to move coin?
Curious if this has already been considered by the bulls or bears. Seems like bitcoin will need to increase the upper limit of coins to continue to work.
I'm more curious how they plan to handle a drop in popularity from a security standpoint. Will the total compute always need to remain high enough to keep a bad actor from dominating? As popularity wanes that sounds expensive.
Is this a bitcoin you have in a cold wallet somewhere? Are you running a connected node with the intention of exchanging your bitcoins with someone else? Or is your "bitcoin" just an entry in an exchange's ledger somewhere, in that case is it a bitcoin or just faith in that exchange?
Is a bitcoin a store of value in the same way a bag of uncut diamonds is a store of value?
Decentralization was the original tech angle. Email, HTTP, the basic Internet infrastructure is all decentralized with only the minimal necessary coordination. Decentralized money is iffy when it isn't a real thing with intrinsic value like a metal coin or trading commodities directly.
Everything else though can absolutely be decentralized, somebody just needs to be happy about writing open standards and giving people the means to have systems that use them.
In this scenario, when do people cash out.
It seems like if people starting cashing out in large numbers, some folks are going to end up losing money.^1
1. Assuming they spent any money to acquire their Bitcoin.
https://bitinfocharts.com/comparison/bitcoin%20cash-transact...
BCH has plenty spare capacity, but the actual usage shows it's not taking off. The idea of buying coffee with crypto is dead.
Or, people will flood out to someone who hasn't been hit by that "contagion", because the entire point is to have unregulated money.
[Edited for some horrible mobile autocorrect attrocities]
Crypto is easy to make both transparent and regular.
For some vanishingly small percentage of crypto-faithful, maybe. For the vast majority, the point is to turn (regulated) fiat money into more (regulated) fiat money. Or lose it all trying.
Great reference, I found it at: https://ens-paris-saclay.fr/sites/default/files/Laboratoires...
Reading it right now.
TLDR there is always a throat to choke in meatspace.
Most private crypto coins are private by declaration rather than robust mathematical proofs (often because proving the absence of side channels is very difficult)
However, a significant volume is being traded today on DEXs (ie: uniswap). The OP fails to mention that. Uniswap did around $1bn in volume on a Saturday. These amount are very hard to fake as uniswap fees are simply brutal comparing to CEXs. This means a part of the market has moved off-grid and it’s significant. I don’t think the article argument can ignore that fact.
Yes, there's the SAR lookback, but no one reads those anyways and probably won't give the government much because criminals routinely use accounts registered with fake or stolen IDs. Binance still accepts customers from countries like Venezuela, Nigeria, Zimbabwe, etc that "respected" financial institutions wouldn't touch with a 39.5 foot pole. There are still people making $50,000 USDT -> cash transactions every day with Binance P2P.
I've been reading about how that is imminent here for 3 years now.
Theranos seemed ultra sketchy for a long time before something actually happened.
I think we are completely missing something in the discussion of stable coins such as Tether and USDC even if they are not equal: while the currency is fixed toward the dollar in the blockchain, they receive interest on the real money they have (whatever real balance it is). This could make them very profitable with time.
That and they are fully cooperating with regulators (ie: they have blacklist functionality in their smart contract)
They also use it for OTC transactions, which are typically also hedged on centralized markets due to their uncertainty.
The centralized markets also function as banks, where you can borrow or cross-margin your positions.
So it works, it's just that only using blockchain is not good enough to deal with speculation needs and market volatility.
The decentralization aspect was mostly necessary in the early days to avoid being shut down by government. Now that crypto is widespread, it is not as important. What is important though are things that are missing from our current fiat monetary system; transparency and reliability.
While the fiat monetary system appears to be very reliable for the individual, it is in fact extremely unreliable due to its lack of transparency. Governments can easily manipulate the supply (and therefore the true value) of currency behind the scenes without your knowledge and that is one of the primary mechanisms via which it steals wealth from individuals and deprive them of opportunities.
Arguments against cryptocurrency are essentially saying that these individuals who are being robbed and deprived of opportunities don't matter because the system only needs to work for rich people and fool the poor into thinking that it doesn't harm them.
Unfortunately, many poor people understand exactly how the system robs them.
- It devalues our salary contracts via inflation of buying power.
- Centralized currency creation centralizes opportunities due to the Cantillon Effect and this creates an asymmetric playing field which unfairly benefits corporations and large organizations.
- Given that income tax is levied against each transfer between individuals, newly issued currency cannot travel very far from the government money printers as each hop away from the printers incurs a significant additional tax in the remaining untaxed amount which keeps shrinking. This exacerbates the Cantillon Effect and punishes regional areas and individuals who are far from the centers of money printing. It keeps all economic activity on a very short leash which is held tightly by the government.
None of those have panned out. Reliability and transparency aren't there either, because the state of crypto so far is that people keep on falling for scam after scam and getting screwed.
No, just like with the original concept of "Peer-to-Peer Electronic Cash System", there's very few true believers that are into it for any such reasons like decentralization, reliability or transparency.
The vast, vast majority just wants to get rich. It's that simple. The technical merits or characteristics of the underlying system are completely unimportant to the vast majority.
In any case, individuals should be allowed to choose their monetary system and not be coerced into a specific scam which is what the fiat system is. If people could choose who their scammer is, that is already progress from what we have now.
Can you provide an example? Central bank fucking with interest rates or doing QE is broadcast widely to the public. If one believes such moves will de-value the currency, there are ways to hedge against that - including the old standby: gold. And what does "true value" mean in this case? The value of anything is what someone is willing to trade for it. There's no "true value" the government can set that won't show up in the market somewhere.
The government has historically benefited those who understood the system, but it doesn't benefit them now. Quite the opposite. The system is now working against those who understand it most. That's why we're seeing a decline in the west.
Obviously the number of big macs you can buy per unit currency.
This certainly has not been the case with 'big tech' or 'big insurance'. Regulation amounts to slaps on the wrist, fines. Not being shut down or the key people arrested.
Mandate that all government spending use a block chain so that all citizens can see government spending. All public finances visible to all citizens.
I think we have got it backwards trying to use the technology as untraceable peer to peer currency, instead focus on visibility into government finances to combat corruption and nepotism.
https://fiscaldata.treasury.gov/americas-finance-guide/feder...
I’m not really buying the sociological/political angle in the article. The centralizing force is attention.
If only we could limit problems to death, and not taxes! And I got paid interest rates!
