[HN Gopher] Sleeping beauty Bitcoin wallets wake up after 14 yea...
___________________________________________________________________
Sleeping beauty Bitcoin wallets wake up after 14 years to the tune
of $2B
Author : aorloff
Score : 183 points
Date : 2025-07-04 18:41 UTC (1 days ago)
(HTM) web link (www.marketwatch.com)
(TXT) w3m dump (www.marketwatch.com)
| ETH_start wrote:
| April 2011 is not Satoshi era. Satoshi had dropped out of public
| Bitcoin forums by late 2010.
| IncreasePosts wrote:
| Imagine finding a file on an old laptop from when you were just
| futzing around 15 years ago. And it was worth $9 billion.
| bravoetch wrote:
| It's not that. These are addresses with 10k BTC each. That's
| very intentional storage even for 2011.
| bombcar wrote:
| Wasn't 10k bitcoin the price of a pizza or something back
| then?
| qqqult wrote:
| BTC ranged between $0.30 and $27 back in 2011 so not quite
| canucker2016 wrote:
| 10K BTC for two Papa John's large pies. see
| https://marketrealist.com/what-is-the-bitcoin-pizza-
| transact...
|
| That's about US$500M per pie these days ( 1BTC ~= US$100K )
| mattlondon wrote:
| Maybe that guy who was digging up a landfill to find his old HDD
| finally found it!
|
| Seriously though, what are the odds that someone has been quietly
| spending 10s/100s of millions in cloud compute to brute force the
| keys for old wallets?
| bravoetch wrote:
| I would say the odds are zero because that's the likelihood of
| being able to brute-force anything in the key space.
| handfuloflight wrote:
| It's not zero. https://lbc.cryptoguru.org/trophies
| onlyrealcuzzo wrote:
| It's close enough.
|
| There are 200 million+ BTC wallets.
|
| They've found 54 out of 200 million+ or about 0.00002% of
| wallets - in how many years?
| handfuloflight wrote:
| How does the equation change with $100m of cloud or GPU
| compute as GP speculated? These are all hobbyists.
| onlyrealcuzzo wrote:
| It changes that if you attempt to liquidate that much
| BTC, BTC crashes and you've got 90% less money than you
| hoped for.
| handfuloflight wrote:
| Do you really think they have no notion of liquidity? Why
| would they attempt to liquidate it all at once?
| cj wrote:
| They could also do a private party transaction to sell
| the coins outside of an exchange, in order to hide the
| sale and also hide the price of the tokens sold.
|
| This is common practice in the stock market, called "dark
| pools" [0]
|
| > Dark pools came about primarily to facilitate block
| trading by institutional investors who did not wish to
| impact the markets with their large orders and obtain
| adverse prices for their trades.
|
| [0] https://www.investopedia.com/articles/markets/050614/
| introdu...
| phil21 wrote:
| The vast majority of BTC transactions are done this way.
| Anything of any size is traded via OTC desks or other
| more private avenues.
| usrusr wrote:
| Outside, as in off the blockchain? That would mean that
| after the transaction, both sides would know the key to
| the wallet and there would be a race about who lights up
| a transaction first.
| cj wrote:
| After the transaction, you can still send the bitcoin to
| the purchaser's wallet.
|
| But since the purchase itself happens off exchange,
| there's no record of how much the coins were sold for, so
| no impact on market price.
| sokoloff wrote:
| A large wallet that's been dormant for years suddenly
| becoming active will tend to pressure the price lower
| from the implied increase in liquid supply and fear that
| the wallet will continue to distribute coins.
|
| It's not just the printing of transaction price that can
| affect the market.
| onlyrealcuzzo wrote:
| Just the fear of future liquidation would eventually
| severely crash BTC.
| handfuloflight wrote:
| Like it's crashing now on this news?
| onlyrealcuzzo wrote:
| There's ~$188B in Satoshi era wallets.
|
| While ~$8B is huge news, due to the potential that all
| ~$188B might be in play, when most investors probably
| expected it was not prior to this - or at least the
| probability was low enough to barely factor, it's
| unlikely to crash BTC.
|
| Further, moving BTC is one thing. Showing signs of
| liquidation is another.
|
| That much _should_ be able to get liquidated
| intelligently without moving the market.
| paulpauper wrote:
| It depends how it's sold. Market orders would have more
| impact than OTC .
| paulpauper wrote:
| yeah, people think it's the selling that makes the price
| fall. it is the anticipation . markets are forward
| looking
| beefnugs wrote:
| Because maybe this isn't satoshi waking up, but finally
| those kidnappers hit that poor guy in the latest "we
| found satoshi" documentary
| paulpauper wrote:
| if someone could brute force a key, they would target
| small inactive wallets , rather than big wallets and
| drawing attention to it
| nottrueatallz wrote:
| Not true at all! Everyone knows there are holes in the
| crypto algorithms and implementations which agencies use
| to achieve any objective they may have. On top of that
| there are also holes across the software and hardware
| stacks of various implementations. Just because they run
| all the researchers and fund a lot of it does not mean
| there are no holes.
|
| Especially now with AI, I wouldn't be surprised if an
| amateur kicked a bunch of tires and got lucky.
|
| Just because they are not published, does not mean they
| are not using them, someone else found them and are using
| them. Or they just have the keys from back in the day.
|
| Can't wait to follow this story as it unfolds. The other
| risk is Quantum... That is going to be real fun when it
| starts making leaps above Moores Law.
|
| There needs to be a industry wide effort NOW! That
| researches and generates keys in unconventional ways,
| different than the ways they are being generated now.
| Because Quantum is a beast. Those keys will need to be
| Quantum proof, which means that even if the agent knows
| the algorithm that is used to generate the keys they
| cannot duplicate the keys that were generated the first
| instance it was run. Or you can start doing Hashing
| across fingerprint, eye and dna data. That is coming my
| folks!
| celticninja wrote:
| You dont understand bitcoin or the math or the
| cryptography ehind it.
| cluckindan wrote:
| Can you look me in the eye and state that you understand
| Bitcoin and the math and the cryptography behind it?
|
| Even if you do, there could in theory still be a way to
| narrow down the key space or find some other shortcut to
| a wallet key, even if nobody has figured it out yet.
| celticninja wrote:
| I understand the math and crypto behind it to a degree. I
| don't profess expert knowledge however. But I know enough
| to know the GP is wrong and I'm happy to point that out.
| If I thought there was any value in correcting GP claim
| by claim I would do so. But in reality it will just end
| up in me wasting my time trying to educate someone who
| doesn't want to be educated, and if they did they could
| go and research the math and cryptography for themselves.
|
| As someone once said, I can explain it to you, but I
| can't understand it for you.
| onlyrealcuzzo wrote:
| It would take approximately 6B H100 GPU days to crack
| every active BTC wallet.
|
| So if you had 10,000 H100s running, it'd only take ~1500
| years.
|
| You'd have a high probability to find key in under ~1000
| years, though.
|
| Even if I'm off by 3 orders of magnitude, it would take a
| decade and cost billions, and not make financial sense.
| paulpauper wrote:
| Active addresses have less entropy too
| FabHK wrote:
| Why? Are you hypothesizing that they used bad RNGs?
| 1oooqooq wrote:
| *at most ... years.
|
| People always forget those numbers are worst case
| scenarios. I mean, you can get luck on the very first
| guess too.
| relaxing wrote:
| If that's the plan you can guess a number for free, no
| outlay needed.
| kelseyfrog wrote:
| If your guess is generated by a QRNG and many worlds is
| true, than one version of you is very happy although the
| expected value is 1.03x10-66 USD.
| FabHK wrote:
| How do you get that?
|
| BTC private key space is 256 bit. Let's say a billion
| wallets, that's 30 bits, so you need to check 226 bits to
| hit one wallet.
|
| A H100 does about 1000 TFLOPS at the very most, that's
| 10^15 or 50 bits per second (generously assuming we can
| check on key per FLOP).
|
| 6B days of that will give you an additional 50 bits (6 =
| 8 = 3 bits, B = 1000^3 = 30 bits, day = 10^5 seconds = 17
| bits).
|
| Now we're talking 100 bits. But as discussed above, you
| need to check 220 bits to hit a key. There's still quite
| a gap.
|
| For comparison, the entire Bitcoin network (using 1% of
| world electricity) does about 1000 EH/s at the moment,
| that's 10^21 or 70 bits per second (so, roughly
| equivalent to a million of H100, using the rough
| overestimating sketch above).
|
| Per year, that's 70+25 = 95 bits. Still far.
| kristopolous wrote:
| People are actively doing it. Mostly using clore.ai on
| their 4090x bundles.
|
| I used to work in the gpu rental space up to about a
| month ago.
|
| I talked to multiple people dropping hundreds of
| thousands of dollars on looking for those keys.
|
| I'd put house odds at say 20:1 that someone cracked it
| over someone holding for 14 years and deciding now is
| strike time.
|
| Also if it's a true crack, then Bitcoin price _could_
| collapse swiftly if someone just snatched a wallet for
| 200k of compute or whatever.
|
| That's always been the real existential risk. I talked
| about it as the DES problem over a decade ago. Let's see
| if this is it
| adastra22 wrote:
| Those people were wasting their money. They could be
| running those GPUs from now until the end of the universe
| and still have approximately 0% chance of finding a
| single used key.
| kristopolous wrote:
| Right. Those were the ones I talked to, just by random
| chance. It means that there are a lot of them.
|
| This implicates a few things - (1) people win the lottery
| every day and (2) it's highly unlikely that the best
| techniques are publicly known.
|
| Perhaps there's something that requires $1,000,000 in
| investment to yield a 1:100 chance of finding a
| particular targeted wallet using some clever shortcuts.
|
| The other explanation is very implausible: a human sits
| on wallets without splitting up the funds or derisking
| exposure, has wallets with a billion dollars sitting it
| in.
|
| Now I only have a few million, but even I have something
| like 6 brokerages and 12 banks. Even when I was a btc
| holder, I didn't keep over $100k in a single wallet.
|
| The snatching theory requires no new revolutionary math,
| no substantial breakthroughs, just some clever people
| with a lot of resources and a goal.
|
| Either explanation is speculative. I think the "lucky
| researchers at some University" theory is more likely
| then the "let's wait 14 years until this $1,000 becomes
| $1,000,000,000."
|
| Especially because (1) we're not exactly at some high
| water mark and (2) if this was just a person with a
| wallet trying to do something like pay for life's
| uncertainties, you can do basically 100% of that with
| like 4btc.
|
| However if you successfully snatched the wallet, you're
| on a clock before someone else gets it. This is exactly
| the kind of movement you'd be doing
|
| Also if some old bitcoiner comes out and says "hey that
| was me", we're still up in the air. If I had snatched a
| billion dollar wallet, the first thing I'd do is payoff
| an old btc'er to claim its there's to prevent market
| panic.
| adastra22 wrote:
| This isn't like lottery odds. The space of keys here is
| vast. Like unimaginably so. 2^256 is a lot of keys.
|
| If someone had a faster method for breaking elliptic
| curve keys, fast enough to have a realistic chance on
| GPUs, the repercussions for that would be waaaaaay larger
| than merely stealing some bitcoin. This is the same math
| upon which nearly all digital security in common use
| today is based. It'd be full-on cryptopocalypse.
| jjmarr wrote:
| "larger than merely stealing some Bitcoin"
|
| It's US$2 billion. I can't imagine a better way of
| monetizing such an exploit than to convert it into cash
| by using Bitcoin.
|
| The US govt can't pay you US$2 billion without it showing
| up as a line item in the federal budget. That's like 20%
| of the NSA's funding. You'd have to get authorization
| from the President and hold some emergency session of
| Congress. Other governments would pay less.
|
| Hacking the normal banking system is also challenging. If
| you steal US$2 billion someone is going to notice and
| simply undo the transaction because banking doesn't
| believe in "code as law".
| kristopolous wrote:
| You're looking at it wrong. There doesn't need to be a
| generalizable, embarrassingly parallel, computationally
| lower class, key reduction.
|
| Just this specific implementation with these specific
| wallets maybe using a version of the btc code with a
| small recently discovered bug that existed say for 3
| months in 2011
|
| You can have something extremely localized and get this
| result. And this is exactly the behavior people have long
| game theoried would happen under such a scenario.
|
| You're implicitly making the claim that just because you
| can't find something widely discussed in literature than
| any optimization of any kind is impossible and nobody
| would ever _dare_ to keep an advantage in stealing
| bitcoin wallets secret.
|
| Stuxnet is way less plausible than this yet that
| happened.
|
| People have been trying to do this for a decade and have
| in aggregate thrown probably north of $100 million into
| it through separate efforts. The idea of someone finally
| succeeding is kind of expected.
|
| Again the only claim I'm making here is that this is not
| only a non-zero chance, but, in my mind, an over 90%.
| logsr wrote:
| the most likely weakness is in the ECC implementation. i
| don't understand the math (who does?) but what the debate
| over https://safecurves.cr.yp.to/ tells me is that very
| few people know what a "weak curve" is but people agree
| that they exist. this has always made me sketch on ECC in
| general, especially since it is also used in Tor. Another
| possibility is compromising the RNG used for creating the
| pvt sig? which since these are early addresses they would
| have been from a very early version of the software, and
| might have used a shitty RNG. If this is a crack it could
| definitely be state level actors (who has the US pissed
| off lately? who have they not?). Whether it is
| state/private the goal would be to extract as much real
| money as possible before creating a panic, so will be
| interesting to see where the money goes.
| adastra22 wrote:
| FYI the "safe curves" charts are garbage self-promotion
| for his own crypto algorithms. I generally respect DJB,
| but he didn't even try to be unbiased with that analysis.
| HeartStrings wrote:
| It's the quantum computer.
| dperrin wrote:
| Just speculating here, but isn't it quite possible
| someone wasn't intentionally sitting on it for 14 years
| and instead just couldn't access it? For example, if
| they've been sitting in prison this whole time. Something
| like that seems (statistically anyway) more plausible to
| me than getting lucky on guessing a key.
| volfonibros wrote:
| For anyone else who's been vaguely following the story as it
| popped up every few years, the latest news came out a few days
| ago : he finally gave up.
| xdfgh1112 wrote:
| Source?
|
| https://x.com/howelzy
| volfonibros wrote:
| I went back to the (french) articles making that claim in
| headlines and it turns out to be false, thanks.
|
| He lost his appeal in his case against the city authority
| to search the landfill, so he can't ever search for it.
| It's a bit buried in his feed in between the announcements
| about tokenizing part of these legally inaccessible coins.
| nixass wrote:
| > he finally gave up
|
| Sounds like something someone who found few billion USD on a
| thumb drive would say :)
| stavros wrote:
| I wouldn't say anything.
| hinkley wrote:
| Has he opened a bar instead?
| volemo wrote:
| He named it Puzzles.
| nothrabannosir wrote:
| That's definitely also what I would publicize if I actually
| found the HDD. :)
| rtkwe wrote:
| He lost his court battle to force the local government
| running the dump to allow him to dig the last I heard. So I
| doubt it, he wasn't even allowed to really try.
| londons_explore wrote:
| Good chance those coins are 100% traceable. They were lost
| in the days before good privacy tools like mixers, and the
| database of the biggest exchange MtGox was fully leaked so
| everyone knows the real name, email, bank details, and date
| of birth of the owner of every old coin.
|
| Very pleased I disposed of all mine long ago, and the
| Blockchain shows that so nobody tries to kidnap me for the
| keys.
| bbarnett wrote:
| In the early days, a pentium 486 in your garage could
| have made these coins in a few months.
|
| And you don't need an exchange to transfer coins.
|
| No one knows who owns these wallets... yet. That's why
| they are mysterious.
| londons_explore wrote:
| Plenty of address reuse happened back then
| improbableinf wrote:
| That's what someone who hasn't disposed all of the coins
| would say.
| throw310822 wrote:
| > what are the odds that someone has been quietly spending
| 10s/100s of millions in cloud compute to brute force the keys
| for old wallets?
|
| Even if that were possible, you could brute force one wallet.
| Not eight wallets closely related to each other.
| Scoundreller wrote:
| Keys created with an RNG that turned out to be a little too
| predictable?
|
| Or some other flaw found in a wallet's key generation?
|
| Kinda like what happened here:
| https://news.ycombinator.com/item?id=6195493
|
| (Or exactly that but nobody tried to attack this again with
| moar power?)
| pyman wrote:
| One of my students believes Elon Musk and Peter Thiel
| created Bitcoin. Here's the summary of the 5 page doc he
| presented:
|
| In 2000, according to Peter Thiel, he met with the E-Gold
| team in Anguilla.
|
| Around 2001, Elon and Peter were at PayPal, and they had
| plans to build a similar digital currency.
|
| In 2002, PayPal was sold, and that pretty much ended the
| digital currency plan. Instead, PayPal let users link their
| bank accounts and cards to make payments. This created a
| bigger dependency on banks.
|
| By 2004, there were over a million E-Gold accounts. Banks
| weren't happy about it. Meanwhile, Elon and Peter
| understood exactly how much potential this new kind of
| digital currency had.
|
| In 2007, the banks took the founders of E-Gold to court for
| running an unlicensed money-transmitting business. That
| same year, the E-Gold engineers were out of work.
|
| Bitcoin was invented in 2008, the same year Elon was broke
| and busy trying to save both SpaceX and Tesla from going
| bankrupt.
|
| His theory is that Elon and Peter hired the smartest
| engineers from the E-Gold team and asked them to build
| blockchain so they could create their own version of
| E-Gold. The team worked on Bitcoin from 2007 to 2010 under
| the alias of Nakamoto.
| FireBeyond wrote:
| > Around 2001, Elon and Peter were at PayPal, and they
| had plans to build a similar digital currency.
|
| > In 2002, PayPal was sold, and that pretty much ended
| the digital currency plan. Instead, PayPal let users link
| their bank accounts and cards to make payments. This
| created a bigger dependency on banks.
|
| This doesn't hold up to scrutiny.
|
| Except PayPal wasn't invented by Elon or Peter. It was
| Elon's company's plan to build the digital bank but they
| were failing quite spectacularly at it.
|
| They merged with Confinity who'd already built PayPal,
| had a working prototype, etc.
|
| Elon lasted four months as CEO of PayPal, trying to
| convert it from Java to ASP until the Board didn't ask
| him to resign, but fired him, the morning he left on his
| honeymoon after getting married.
|
| PayPal is a complete red herring there. Elon had no
| participation in ideas on digital currency there.
| FabHK wrote:
| > They merged with Confinity who'd already built PayPal,
| had a working prototype, etc.
|
| Interesting, need to read about it. So similar story as
| with Tesla? Existing opinion nicely confirmed.
| Suppafly wrote:
| I've got a Confinity Paypal tshirt from a job fair I went
| to in 2000 or 2001 from back when they envisioned people
| using palm pilots to transfer money. I always think it's
| hilarious that people give Elon any credit for doing
| anything at the company.
| pyman wrote:
| The people who give him credit are the same people who
| sold PayPal for $1.5 billion in July 2002:
|
| Peter Thiel, Max Levchin, Luke Nosek, Reid Hoffman, David
| Sacks, Ken Howery, Jeremy Stoppelman, Russel Simmons.
|
| Elon was removed as CEO in 2000, but he remained the
| largest individual shareholder when PayPal went public.
| kragen wrote:
| I saw people using PalmPilots to transfer money on PayPal
| in 02001.
| bostik wrote:
| Some of the history between the two companies is covered
| in a book, "Paypal Wars.[0]
|
| Among other things it happens to spotlight Musk's
| fascination with having "X" as the company name,
| especially for a bank.
|
| 0: https://en.wikipedia.org/wiki/The_PayPal_Wars
| pyman wrote:
| So you are contradicting what Luke Nosek, the co-founder
| of PayPal, said?
|
| Luke: "Many people don't know this, but the initial
| mission of PayPal was to create a global currency that
| was independent of interference by these, you know,
| corrupt cartels of banks and governments that were
| debasing their currencies."
|
| Why should we believe you and not the person who created
| PayPal?
|
| https://finance.yahoo.com/news/paypal-originally-aimed-
| creat...
| FireBeyond wrote:
| Uhhh... nothing I said contradicts Luke Nosek.
|
| Elon was working on a digital bank, not a global
| currency. His company was failing miserably.
|
| Confinity, who made PayPal, and had a first version
| working, merged with them.
|
| Elon gets no credit for a 'global currency' idea (nor do
| I think he and Thiel invented Bitcoin[1]), because
| Confinity was already working on that idea when they
| merged and became PayPal properly, in the four months
| before he was ousted.
|
| My argument was that Elon wasn't all about the global
| currency.
|
| [1] And Elon definitely didn't invent BitCoin. His ego
| would never permit him to have kept that a secret for a
| month, let alone a decade plus.
| pyman wrote:
| Context matters.
|
| The PayPal mafia (Musk, Nossk, Thiel, Levchin, Sacks, and
| the rest) spent years working closely, obsessing over
| banks, money, payments, and how to move value on the
| internet, questioning everything: What is money? Who
| controls it? How do you make it more efficient, global,
| and digital?
| AdamJacobMuller wrote:
| Perhaps plausible until you mention that they hired a
| team to build it.
|
| There's no way, even if it was a single-digit number of
| people team that they would remain silent. If it was just
| Elon/Thiel I could perhaps believe it.
|
| Also keep in mind that there were some very desperate
| years for Elon where his companies were extremely close
| to bankruptcy, wouldn't he have tapped into that bitcoin
| if he had access to it?
| PUSH_AX wrote:
| Because Elon is so humble...
| DoesntMatter22 wrote:
| Seems fairly humble to me in that he's always thanking
| the team and giving them most of the credit.
| quinndexter wrote:
| The definition of humility is not "doing the bare
| minimum."
| DoesntMatter22 wrote:
| Can you name me a self made billionaire who is more
| humble?
| pyman wrote:
| > wouldn't he have tapped into that bitcoin if he had
| access to it?
|
| That's not how business works. You borrow, then borrow
| some more, and focus on having a long term plan to cover
| the interest, so you don't upset the banks or end up
| broke again.
|
| Doesn't Elon sell Bitcoin whenever he needs a few hundred
| million these days?
|
| The fact that we don't understand how someone could've
| come up with something like PayPal or Bitcoin might be
| exactly why Elon and Peter are the richest people on the
| planet.
|
| > There's no way, even if it was a single-digit number of
| people team that they would remain silent.
|
| JPMorgan moves $10 trillion a day. Would you sleep at
| night knowing you publicly admitted being involved in a
| project whose only mission is to bring them down?
| yellow_lead wrote:
| My counterpoint is that if Elon were involved in any way
| at all, he would have taken credit for it publicly by
| now.
| pyman wrote:
| JPMorgan moves $10 trillion a day, according to Jamie
| Dimon. So there's the unwritten rule: you never upset the
| banks because that's the last thing you'll ever do.
|
| So why would the richest person on earth do that? He's
| not crazy.
| notahacker wrote:
| Back in the real world, plenty of people publicly
| associated with running major cryptocurrencies (and Craig
| Wright!) are walking around talking about how they
| invented the cryptocurrency and how it revolutionises
| banking, and plenty of people inventing _infrastructure_
| for promoting Bitcoin are doing deals with banks, whilst
| Elon is the sort of guy who goes to extreme lengths to
| piss off _both_ political parties in the country that he
| and his businesses and his lucrative government contracts
| are based in, including ranting into the void about the
| most powerful _and most sensitive_ man in the Western
| world is in the Epstein files when they had a fallout...
| latexr wrote:
| > So there's the unwritten rule: you never upset the
| banks because that's the last thing you'll ever do.
|
| What are they going to do? Whack him mafia style and make
| it look like an accident? Here's a more realistic rule:
| "If you owe the bank $100, that's your problem. If you
| owe the bank $100 million, that's the bank's problem".
|
| https://www.goodreads.com/quotes/214064-if-you-owe-the-
| bank-...
|
| > So why would the richest person on earth do that? He's
| not crazy.
|
| You mean the guy who is so insecure he constantly lies,
| even about the most inconsequential things...
|
| https://archive.ph/20250127023632/https://www.nytimes.com
| /20...
|
| The guy who is so uninformed and gullible he falls for
| any conspiracy theory...
|
| https://www.techdirt.com/2024/10/25/lies-damned-lies-and-
| elo...
|
| https://www.youtube.com/watch?v=3u8_fp1TtJE
|
| The guy who jeopardised billions by buying into a random
| tweet accusing a business partner without proof...
|
| https://voz.us/en/world/250308/21932/mexican-tycoon-
| carlos-s...
|
| The guy who invested all his time and energy electing
| someone like him, only to then (predictably) have a
| falling out...
|
| https://en.wikipedia.org/wiki/Trump%E2%80%93Musk_feud
|
| I mean, _maybe_ he isn't crazy, but that isn't really an
| effective defense. Crazy people at least have an excuse.
| razemio wrote:
| I do not think that Elon would not claim he is the
| inventor by now. The team theory makes this entirely
| unbelievable. Something like this can only be pulled of
| by 1-2 person's whith exceptional self-restraint.
| pyman wrote:
| Peter Thiel said in one of his podcast he believes it was
| the E-Gold team who created Bitcoin under the alias of
| Nakamoto. He also confirmed he knew the team. But no one
| knows the names of the engineers or who financed them.
|
| All we know is that Elon and Peter revolutionised the
| finance industry with PayPal.
| qoqpop wrote:
| Video where he said he knew the team? In the main video,
| he just speculates that some people at the conference
| made bitcoin. Never provided even a claim to having
| evidence.
| pyman wrote:
| You've just created an account to ask that question? Wow
| :D
|
| https://kqmarkets.co.uk/article/did-peter-thiel-meet-
| satoshi...
|
| https://protos.com/is-peter-thiel-inner-circle-behind-
| the-sa...
|
| https://www.bloomberg.com/news/articles/2021-10-21/peter-
| thi...
|
| "Peter Thiel met with the e-gold team in February 2000 on
| the Caribbean island of Anguilla to discuss making PayPal
| interoperable with e-gold. The goal was to challenge
| central banks by creating a system where PayPal and
| e-gold could work together. Thiel believed this
| collaboration could spark a revolution against
| traditional financial institutions."
|
| Actions speak louder than words.
|
| - Thiel met with digital currency pioneers in 2000.
|
| - Thiel chose not to partner with E-Gold because he
| needed to stay compliant and bank-friendly.
|
| - A few years later, Bitcoin quietly appears, solving the
| exact problems E-Gold ran into.
|
| - No names. No funding trail. No way for banks to know
| who the enemy is. Just Bitcoin wallets full of money.
|
| It doesn't sound like a bunch of idealistic cypherpunks
| building tech to save the world. It sounds like a few
| smart, well-connected people who understood how money
| moves, got frustrated with the banking system and their
| fees, and built a way to create wealth and move value
| without paying commissions.
|
| The cypherpunks laid the groundwork for the encryption
| banks, governments, and corporations now depend on. They
| were never interested in dodging taxes or avoiding bank
| fees.
| l0ng1nu5 wrote:
| It was jack.
| AuryGlenz wrote:
| Fun personal fact - the only reason I didn't invest more
| in Bitcoin (which would have definitely been enough to be
| FU money) was because I had some E-Gold when it was shut
| down.
| DoesntMatter22 wrote:
| Worse fun personal fact. I was planning to buy 5000
| bitcoins on a Friday after work. A coworker convinced me
| and it made sense. Bitcoin was less than 2 a coin at that
| point.
|
| Then I go down the elevator in my building and there is a
| huge crowd of people. It ended up being 50 cent the
| rapper and a few other famous people.
|
| It was so surreal and unexpected I completely forgot
| about Bitcoin for a few months. And by then I could stand
| the fact it had tripled (or something) and I had missed
| it.
|
| Would have been hundreds of millions. Could have lost the
| hdd or had sold later but I'd always hold some.
|
| Lol so now I blame 50 cent that I didn't buy Bitcoin
| tony69 wrote:
| You would've sold it way before it became FU money
| bbarnett wrote:
| Indeed. That's what so many miss.
|
| One of the doge creators sold all his early doge for a
| used car. He'd hit the jackpot, a $5k return on something
| he rolled out in under a day's work, for fun.
|
| He didn't make the wrong decision. All his coin was worth
| 5 bucks, then 5900. What would you do?
| DoesntMatter22 wrote:
| I doubt it, Ive held my Tesla shares since the beginning.
| jasonvorhe wrote:
| If this at least involved Len Sassaman somehow, I'd find
| it at least worthy of digging in to this. Pass. Musk and
| Thiel being true cypherpunks? Come on. Musk hasn't had a
| single idea on his own, Thiel is way too busy coming up
| with ways to enslave everyone. No way they had anything
| to do with creating Bitcoin.
| pyman wrote:
| Nick Szabo, Hal Finney, Peter Todd, and Adam Back were
| definitely part of the team after the paper was
| published. But Len Sassaman? I don't think so.
|
| > Musk and Thiel being true cypherpunks?
|
| Even cypherpunks had bills to pay.
|
| And who was hiring in 2007? The same people who disrupted
| the banking and oil industry with PayPal and Tesla.
| xoralkindi wrote:
| People always forget about the great Wei Dai, who like
| Nakamoto is already sort of pseudonymous, he also created
| Bmoney which is allot like Bitcoin. He is also the
| creator of the Crypto++ cryptography library for C++
| (bitcoin is written in C++) From all the OG Cypherpunks
| he ticks allot of the boxes.
| pyman wrote:
| True. Nothing gets built in isolation. Bitcoin was the
| result of decades of work by cryptographers, economists,
| investors, and engineers
| kragen wrote:
| Len went on for years about what a stupid idea Bitcoin
| was.
| pyman wrote:
| Agree. He was not impressed with Bitcoin
| bbarnett wrote:
| Any team involved would have long ago spilled the beans.
|
| Conspiracies are impossible to maintain, once more than
| one or two people are involved.
| kragen wrote:
| Except for the secrecy of Colossus, Crypto AG, the 9/11
| hijackings, Bill Cosby drugging and raping dozens of
| women, Peter Thiel funding lawsuits against Gawker, the
| Manhattan Project, the CIA-funded coup against Mossadegh,
| Stuxnet, the Five Families, most of what the NSA does,
| the Stealth Bomber, and so on.
|
| Almost all of those remained secret longer than the 17
| years we're talking about here, and due to selection
| bias, I am forced to omit the much more successfully kept
| secrets, because I don't know about them yet.
| bbarnett wrote:
| The selection bias, is discounting the endless
| conspiracies exposed daily.
|
| People go to jail, are caught out, fired, relationships
| break up, governments fall, because conspiracies of even
| a few people fall apart. It's a regular thing.
|
| You're mentioning some things, of which some were known
| during the time. The FBI had reports of the 9/11
| hijackers, Bill Cosby was known by many but the women
| were paid off with cash or jobs (until they rightfully
| went public), and things such as the CIA and the
| Manhattan project are laced with highly patriotic people,
| and the death penalty or life in jail, along with people
| sequestered and watched by immense security.
|
| Secrets are very difficult to keep.
|
| The things you think of were enormously unusual in that
| they were kept.
|
| They were the exception to the rule.
| kragen wrote:
| Very plausibly the identity of Satoshi is already known
| to more people than Cosby's rapes or the 9/11 hijacking
| plans, before everybody knew about them. The hijacking
| plans weren't even well-known inside the FBI! And it's
| also very plausible that the people involved in Bitcoin
| were either strongly idealistic, facing death penalties
| for disclosure (for example, if they work for the
| Mossad), or both.
|
| I agree with your weakened claim that secrets are very
| difficult to keep, but much of modern society is built on
| institutions that are very good at keeping them: armies,
| intelligence agencies, and even companies with trade
| secrets.
|
| I agree that Satoshi was probably just one or two people,
| and the difficulty in keeping secrets with more than a
| few people is one of my reasons for that. But you said it
| was _impossible_ , not difficult, which is much too
| extreme to be justifiable.
|
| (I think it's about 50% likely that it's one of a couple
| of dozen people I've met personally, but I wouldn't be
| able to convince anyone else. So you might be talking to
| one of the people in the position of Bill Cosby's friends
| before the news came out.)
| franktankbank wrote:
| This is the dumbest idea I ever hear smart people say.
| OtherShrezzing wrote:
| Just applying Occams Razor here, this whole story makes
| more sense if the E-Gold engineers just bootstrapped this
| project without Musk/Thiel involvement.
|
| E-Golds most talented 1-2 engineers weren't poor people,
| and could definitely afford a 5 year career break.
| HeartStrings wrote:
| It's quantum computer.
| mattlondon wrote:
| Yeah - assuming this was not the rightful owner (which it
| might well be), my gut is that perhaps someone found an
| implementation flaw/quirk in some old wallet
| code/keygen/RNG that effectively reduced the keysize down
| to something more manageable for brute-forcing. In ye olden
| days Bitcoin was still something of a curio for geeks and
| nerds and not the industry it is now, so it would not be
| unreasonable IMO for there to be some slightly-less-than-
| perfect implementations floating around from hobbyists or
| open source etc - the stakes were lower then.
|
| If there was say a vulnerability in a specific wallet
| version it would be quite possible to narrow down search
| space to only the wallets/addresses around that point in
| time etc as well, making it easier to target your brute-
| forcing efforts.
|
| It will be interesting to see if any other dormant wallets
| from around the same era wake up too.
| taneq wrote:
| > closely related to each other.
|
| Like, sequential? Because if you were brute forcing...
| bbarnett wrote:
| Better odds: old man theory.
|
| Some dude had the wallets on a usb drive. Maybe he mined in
| the very early days, never really thought of it, and ended up
| aged and not cognitively aware, his memory wonky.
|
| Recently, he just passed on.
|
| His offspring cleaned out his garage or whatever, found a usb
| stick, looked on it for photos, and found this.
| paulpauper wrote:
| this would be highly improbable. the odds of only remembering
| enough of the key to brute force it, is slim.
|
| guessing a whale's key? zero
| whatsupdog wrote:
| He had only 7500. The recent move involves 60,000 according to
| some Reddit threads
| qwertox wrote:
| > what are the odds that someone has been quietly spending
| 10s/100s of millions in cloud compute to brute force the keys
| for old wallets?
|
| I've been wondering the same. But in this case it's multiple
| wallets, so it's very unlikely.
| hsbauauvhabzb wrote:
| At that scale self-hosted compute probably offers a decent roi.
| cm2187 wrote:
| Or maybe someone just got out of prison!
| max_ wrote:
| Ross Ulbricht?
| monster_truck wrote:
| Being seriously serious, if it was even statistically
| unreasonable to accomplish this once in this amount of time, it
| would be apocalyptic. A whole lot more than bitcoin would
| crumble.
|
| I've personally always been a fan of the idea that the only
| reason it exists in the first place is to be a 2-trillion-pound
| canary for sha256
| msgodel wrote:
| Martin Shkreli has been spending the past month or so on
| Discord streaming himself doing literally exactly that.
| xoralkindi wrote:
| Bitcoin is designed with clever incentives to prevent this kind
| of thing. If you can afford to bruteforce wallets the incentive
| would be to just mine bictoin which is more probable and it
| also help secure the network. If you can bruteforce wallets
| bitcoin is effectively worthless. Or you could even use all of
| that compute to mine something else for example Monero.
| cyrillite wrote:
| As Bitcoin increases in value, the reward for breaking into
| wallets grows. Satoshi's is the ultimate target here, followed
| by wallets used to burn currencies. Some of these look like
| they'd only be brute forceable and that takes more time and
| energy than we think is plausible, but I suspect people will
| find the system isn't as secure as expected in some weird and
| wacky ways as this bounty grows.
|
| Although, I wonder if emptying the wallet is actually harder
| than breaking in, in some ways. Let's say you get into
| Satoshi's wallet (or they still have access), how do you move
| anything without spooking the entire market?
| coolspot wrote:
| Someone just got out of jail.
| jedberg wrote:
| Ross Ulbricht got out a few months ago. Could be his.
| paulpauper wrote:
| he only had $40 million . if he had $1 billion the feds would
| have known about it
| 1oooqooq wrote:
| lol. Did you read the whole wired piece on how the feds
| couldn't find anything under their nose on that case?
| ur-whale wrote:
| > he only had $40 million
|
| How could you possibly know?
|
| Or anyone else for that matter, including the thugs who
| sent him to jail?
| Workaccount2 wrote:
| An old friend of mine died 11 years ago from an overdose, and I
| am almost certain he used darknet markets to buy other drugs.
|
| It's very likely there is a wallet forever lost with many
| Bitcoin in it from his passing. No way his family would have
| known anything about it (Bitcoin/dark markets)or cared much
| anyway circa 2014. I'll admit I have pondered ways to check
| this, but it's too far fetched.
|
| I can't help but wonder if the wave of fentanyl that made
| optiate addict deaths skyrocket, left a huge wake of forever
| lost Bitcoin. I know there was a lot of overlap between addicts
| and darknet market users.
| Stevvo wrote:
| Most addicts would likely not hold Bitcoin in wallet, but
| spend it on getting their next fix as soon as they buy it.
| It's not like you're thinking long-term, invest in Bitcoin so
| you can buy more drugs down the line. There would be leftover
| change but not big amounts.
| Xss3 wrote:
| You'd be surprised how many of these addicts would be
| buying for multiple other less tech savvy addicts and
| essentially becoming small time dealers themselves to fund
| their own habit. If they got locked up or ODd at the right
| time there could've been a few thousand usd in btc in a
| wallet at a time when each btc was worth less than 10usd.
| Workaccount2 wrote:
| He wouldn't heroin from darknet markets and I doubt many
| addicts do, they need that on tap locally. But he, and many
| others like him, just like drugs in general and have a
| heroin addiction they picked up. So the darknet is more for
| getting lsd, MDMA, mushrooms, or whatever else.
| jedberg wrote:
| If you have $8B in BTC, is there any reasonable way to turn that
| into any fiat currency? USD, EUR, anything? Can you even buy that
| much USDC?
| nandomrumber wrote:
| Loans using the BTC as collateral.
|
| Buy good / commodities with BTC and resell them.
|
| Sell the BTC.
|
| Probably not all $8 gigadollars at once, but is there any
| reason you would immediately need that much?
| jedberg wrote:
| > but is there any reason you would immediately need that
| much?
|
| Because you worry that BTC will crash and want it in
| something more stable?
| PoshBreeze wrote:
| BTC is volatile but it isn't going to crash tomorrow or any
| time soon at least not by the amount that would make sense
| to sell with a wallet this old.
| mindcandy wrote:
| Compared to the "Magnificent Seven", Bitcoin's volatility
| has put it in the middle, while it's performance puts it
| at or near the top depending on the time window.
|
| https://www.fidelitydigitalassets.com/research-and-
| insights/...
|
| https://www.fool.com/investing/2024/03/06/bitcoin-has-
| been-a...
| lottin wrote:
| I find it odd that someone would make a comparison
| between bitcoin and other financial assets, as if bitcoin
| was just another financial asset and its theoretical
| price wasn't zero... which is a pretty big market
| anomaly. Normally, when you find a market anomaly, you
| try to explain it. But these analysts, they pretend that
| there's no anomaly. They just don't talk about it, in the
| hopes that nobody will notice.
| nandomrumber wrote:
| Well, one way to lower the price would be to put eight
| billion on the market all at once.
| bgwalter wrote:
| If the Bitcoin Sovereign Wealth Fund scam that was announced
| after Trump's election is launched, there will be a price
| bottom that is financed by public funds.
|
| I'm not sure what has come of it. Trump is doing well with his
| own coins:
|
| https://www.reuters.com/business/finance/uae-fund-buys-100-m...
|
| https://www.bloomberg.com/news/features/2025-07-02/donald-tr...
| pawelduda wrote:
| Sure you can. If you do it over a few months, it will get
| absorbed by market because there are buyers (as of today).
| Though this is kind of unprecedented, so markets could find
| this kind of event bearish and front run your sells which tanks
| the price. But I can't imagine I'd care if I held for 14 years.
| There is also USDT which is much bigger than USDC.
| diggan wrote:
| Also if you approach Coinbase/Kraken/$exchange and tell them
| you have X million to offload, they'll probably let you do it
| off-market, so no one (except for the ledger, obviously)
| would really notice.
| yieldcrv wrote:
| yes, that's why the exchanges are nearly $100bn companies
|
| between multiple corporations buying $1bn per week, retail, and
| nation states, there is a large appetite for this amount with a
| few phone calls
| paulpauper wrote:
| nah, they are worth that much because of inflated valuations
| FabHK wrote:
| Yes. And note that Coinbase for example charges retail
| around 1.5% or so on average, but only a few basis points
| to institutional clients last time I ran the numbers.
| Surprise.
| dist-epoch wrote:
| If you don't want to bother, you can auction it and some hedge
| fund which wants to buy will take it from your hand.
| bravesoul2 wrote:
| Start an ETF?
| jabroni_salad wrote:
| Seems like a "buy borrow die" type of scenario to me.
| Thorrez wrote:
| Why are you asking about $8B when the article is about $2B?
| p0w3n3d wrote:
| F word is what caught my eye first
| duttish wrote:
| Whoever got these wallets better sell them and get a good
| security company on rotation quickly before anyone find out who
| they are. Seems like wrench attacks been been happening a lot
| more the last year.
| yieldcrv wrote:
| looking at the address types this just looks more like a
| security rotation to a stronger hashing method
| Marsymars wrote:
| I don't really get these; there's not a ton of difference
| between using a wrench to threaten someone with a bunch of
| Bitcoin vs using a wrench to threaten someone with a bunch of
| any other liquid asset that could be used to buy bitcoins.
| andylynch wrote:
| Bitcoin doesn't ask questions when you unexpectedly want to
| make a very large transfer to a new payee. Your banker will.
| paulpauper wrote:
| But exchanges will if you deposit that much, and will
| freeze your $ if they don't like your response.
| udev4096 wrote:
| Why would you even use a central exchange? It makes no
| sense. The person holding an absurd amount of coins would
| not be stupid to throw it all away like that
| paulpauper wrote:
| then there is no way to liquate anything close to that
| much without a centralized exchange
| BJones12 wrote:
| If I had 8 billion in cash in my bank account and put in a
| transfer order, they'd block it, call me, make me come into a
| branch, make sure there weren't any burly guys with wrenches
| escorting me in, and maybe call the FBI if anything seemed
| off.
|
| And if it was still legit after that, there would be days or
| weeks of waiting for the transfer to actually happen, during
| which time I could call and cancel.
| onlyrealcuzzo wrote:
| Also, for the rest of your life, you'd be able to get the
| people arrested who stole the money.
|
| So they'd either to kill you after, and it would be obvious
| why, and there'd be an easy lead on who.
|
| Your odds of getting away with stealing that kind of money
| conventionally are essentially zero.
| yieldcrv wrote:
| > And if it was still legit after that, there would be days
| or weeks of waiting for the transfer to actually happen
|
| or you get a better bank to begin with
|
| most banks that call their slow processes "security
| purposes" are actually just putting up barriers to maintain
| liquidity. the banks that go bust are the ones that got
| clientele based on making it convenient to transfer
| paulpauper wrote:
| But the criminal's stolen BTC are tainted. Exchanges will
| not accept them. procession of them is a crime
| jhasse wrote:
| Mixers will though.
| paulpauper wrote:
| and then those bitcoin are tainted too due to association
| with the mixer
| FabHK wrote:
| How fortunate that exchanges are centralized institutions
| that can be held accountable by law.
| Marsymars wrote:
| Alright, so I can see it as a matter of scale.
|
| Recently there was a local case of someone extorting people
| by leaving threats in the mailboxes to not burn people's
| houses down in exchange for $1k in bitcoin.
|
| But who would keep $8B in bitcoin without some protections
| in place to ensure that it can't be easily transferred
| away, given the associated upside/downside? That's...
| roughly as foolish as keeping $8B in actual cash/gold/gems
| (notwithstanding the logistical problems with the
| size/weight) under your mattress.
| jedberg wrote:
| This is the other edge of that double edged sword of "no
| regulations". It's a lot easier to steal bitcoin with no
| consequence because there isn't an entire financial system
| backed by people with guns to help you if you are wronged.
| dist-epoch wrote:
| You are confused. The people with guns will come for you if
| you steal bitcoin and they know who you are.
|
| > Bitcoin thief sentenced to 5 years in prison for stealing
| $1 billion in crypto and laundering it with his social-
| media rapper wife 'Razzlekhan'
|
| https://fortune.com/crypto/2024/11/15/bitcoin-thief-
| sentence...
| paulpauper wrote:
| No, he was changed with laundering.
| diggan wrote:
| > there isn't an entire financial system backed by people
| with guns to help you if you are wronged
|
| It's not the "financial system" that comes and hunts
| criminals with guns, but police, acting based on what laws
| they seen has been broken. And stealing $3 billion is as
| illegal if it was Bitcoins, as if it was Euro or USD.
| Larrikin wrote:
| There are essentially no criminals that are stealing
| crypto where the police will have jurisdiction. It's main
| use case outside of speculation is committing
| international fraud and theft with no consequences.
| hnaccount_rng wrote:
| The point isn't about a change of legality. It's about a
| change of enforceability! In the normal regulated
| financial system _every_ entity you can interact with is
| known to someone who is a) good at keeping paper traces
| and b) extremely motivated to provide them, given
| appropriate motivation, i.e. a properly formed request by
| authorised parties. And that limits the number of times
| you can do anything scammy to "few" before you need to
| switch identities
|
| So in your scenario: The 3 billion will reappear at some
| point and they will raise flags. And at that point there
| is a convenient rendezvous point between law enforcement
| and the perpetrators. And we can all quibble about
| whether the authorisation is appropriate or not (not all
| "requests" are requests and most won't even need anything
| close to a court order). But it's damn convenient to
| follow the money
| bravesoul2 wrote:
| What does Micheal Saylor do?
| sampl3username wrote:
| You just need to swap them for monero and then monero for
| litecoin or bitcoin again. Now you have anonymous, untraceable
| coins.
| onlyrealcuzzo wrote:
| I doubt there's enough liquidity to swap that kind of
| money...
| drexlspivey wrote:
| Monero daily volume is like $50m lol
| cedws wrote:
| Not quite that simple, that's vulnerable to an Eve-Alice-Eve
| attack. If $1B in BTC moves around in short succession the
| TXs can be linked easily. You need a mixer that splits up the
| amount to be paid out, and even then it needs to be done
| piecemeal.
| dzhiurgis wrote:
| Do all outputs from exchange are automatically trusted?
| Seems like any should be tainted forever. Or is it
| impossible to tell whats from mixer?
| cedws wrote:
| There are companies (Chainalysis) that track blockchains
| and 'grade' wallets according to who they've transacted
| with. If enough of a wallet's funds are from a mixer it
| may be scored a grade lower than the exchange's KYC rules
| allow to do business with.
| udev4096 wrote:
| Someone actually did that, a few months ago. 320M in BTC was
| converted to monero and the price of monero increased by 50%
| [0]
|
| [0] - https://slashdot.org/story/25/04/28/198238/monero-
| likely-pum...
| creatonez wrote:
| > Satoshi-era
|
| Not true in the slightest. Satoshi was already gone by 2010, and
| in 2011 there were ~8000 transactions per day from folks outside
| of Satoshi's circle.
| udev4096 wrote:
| What? Satoshi's last publicly known email was on April, 2011 to
| Gavin [0], stating the following:
|
| "I wish you wouldn't keep talking about me as a mysterious
| shadowy figure, the press just turns that into a pirate
| currency angle. Maybe instead make it about the open source
| project and give more credit to your dev contributors; it helps
| motivate them."
|
| Also, let's not forget, it took BTC ~1.5 years to gain any
| amount of traction at all. Nakamoto was in for a long run and
| his sudden disappearance is always going to be mysterious
|
| [0] - https://www.bitcoin.com/satoshi-archive/emails/gavin-
| andrese...
| MaxPock wrote:
| It pains me because I learnt about bitcoin way back in 2010 and
| sixQuarks wrote:
| I learned about it here, but everyone said it was a scam and
| not to buy
| CamperBob2 wrote:
| A superposition of wrong and right if there ever was one.
| SoftTalker wrote:
| Easy to kick yourself in retrospect but if we could see the
| future we'd all be millionaires. AAPL was $0.28 in 2002
| (adjusted for splits, something like $12 at the time).
| rasz wrote:
| It is still a scam. Its just that critical mass of delusional
| people bought into it like Gamestop or Tesla stock. Even
| super obvious scams like Nikola take years to register price
| wise.
| charlieyu1 wrote:
| I learned about it from my friend, but couldn't bother with
| downloading a wallet client and mining etc
| pixelpoet wrote:
| ... and? What is happening with people's attention span?
| AndrewDucker wrote:
| You're supposed to be able to fill in the second half of the
| sentence based on context. They consider it to be obvious
| from the first half.
| pixelpoet wrote:
| They must be an expert in number theory. I have a marvelous
| continuation of this sentence which
| paulpauper wrote:
| You probably would have sold or lost them anyway. Probably a
| tiny percentage of people from 2011 still held
| zoklet-enjoyer wrote:
| As someone who has been into crypto since 2012 and isn't
| rich, yep
| toenail wrote:
| Why pain? Bitcoin is still there for you.
| throw0101d wrote:
| Personally I think that this can be considered on the "bug" side
| of Bitcoin's finite number coins: if, over time, they are lost,
| then there's a smaller quantity+ of currency that is useable to
| actually do stuff with.
|
| This can make the 'rate of deflation' that occurs worse:
|
| * https://en.bitcoin.it/wiki/Deflationary_spiral
|
| * https://isps.yale.edu/news/blog/2014/06/the-perils-of-bitcoi...
|
| * https://crypto.bi/deflationary/
|
| + I am aware of satoshis.
| serial_dev wrote:
| When I listen to Bitcoin discussions, one of the advantages
| people bring up is that there is a limited number of it and you
| can't just "print" more.
|
| Considering this, while it is true that all this makes
| deflation worse, I'd assume most bitcoin hodlers would not mind
| this.
| doublerabbit wrote:
| What happens when all bitcoin is mined, societal collapse?
| cjbgkagh wrote:
| It will go from the near totality of people acquiring their
| bitcoins through purchase to actual totality.
| Hamuko wrote:
| We have other coins too.
| throw0101d wrote:
| > _When I listen to Bitcoin discussions, one of the
| advantages people bring up is that there is a limited number
| of it and you can't just "print" more._
|
| Which can limit economic growth. When money was based the
| amount of gold available, there were long periods of economic
| stagnation because of liquidity issues:
|
| * https://en.wikipedia.org/wiki/Long_Depression
|
| * https://en.wikipedia.org/wiki/Great_Bullion_Famine
|
| The stagnation only ended when new sources of shiny rocks
| were found (California; New World).
|
| I find it a dumb idea what whether or not people can get
| credit to start/expand businesses would be dependent of
| solving math problems. Yes, credit creation can be "too easy"
| and become a problem, but making it "too hard" (or
| physically/mathematically impossible) is even more dumb.
| logicchains wrote:
| >there were long periods of economic stagnation
|
| During the "long depression" GDP was still growing at 3-4%
| so it was hardly stagnation.
| throw0101d wrote:
| > _During the "long depression" GDP was still growing at
| 3-4% so it was hardly stagnation._
|
| I don't know of many things that are viewed positively
| that have been given a label with "depression" in it.
|
| > _Figures from Milton Friedman and Anna Schwartz show
| net national product increased 3 percent per year from
| 1869 to 1879 and real national product grew at 6.8
| percent per year during that time frame.[32] However,
| since between 1869 and 1879 the population of the United
| States increased by over 17.5 percent,[33] per capita NNP
| growth was lower. Following the end of the episode in
| 1879, the U.S. economy would remain unstable,
| experiencing recessions for 114 of the 253 months until
| January 1901.[34]_
|
| > _The dramatic shift in prices mauled nominal wages - in
| the United States, nominal wages declined by one-quarter
| during the 1870s,[14] and as much as one-half in some
| places, such as Pennsylvania.[35] Although real wages had
| enjoyed robust growth in the aftermath of the American
| Civil War, increasing by nearly a quarter between 1865
| and 1873, they stagnated until the 1880s, posting no real
| growth, before resuming their robust rate of expansion in
| the later 1880s.[36] The collapse of cotton prices
| devastated the already war-ravaged economy of the
| southern United States.[17]_
|
| > _Thousands of American businesses failed, defaulting on
| more than a billion dollars of debt.[35] One in four
| laborers in New York were out of work in the winter of
| 1873-1874[35] and, nationally, a million became
| unemployed.[35]_
|
| * https://en.wikipedia.org/wiki/Long_Depression#United_St
| ates
|
| Seems like a grand-ol time.
| ghghgfdfgh wrote:
| If Congress had not demonetized silver in 1873, the
| metal's decreasing value would have curbed the deflation
| of the time. I believe that this was one of the US
| Government's greatest mistakes ever, because the reaction
| to the economic crisis in the 1870's had a profound
| effect on the failure of Reconstruction. Friedman wrote a
| paper on this, called "The Crime of 1873."
| fpoling wrote:
| In US in 19th century stocks of banks that went bankrupt
| were used as a sort of paper money to solve the problem of
| money availability.
|
| So the finite amount of base money would just mean that
| derivative products would be used as practical money.
| mindcandy wrote:
| > I find it a dumb idea what whether or not people can get
| credit to start/expand businesses would be dependent of
| solving math problems.
|
| That's quite a mischaracterization. We can at least agree
| that Bitcoin's supply is set up to increase at a pre-set
| rate over time. The math problems are the means to enforce
| that rate. Not the controlling factor.
| strogonoff wrote:
| It is under-appreciated that inflation actually is desirable
| in a working economy.
|
| Look at it this way. If your money (in money form) is worth
| less tomorrow than today, you are incentivised to spend it,
| thus fueling economic activity of all sorts (from going out
| and buying a drink to buying a car, traveling, investing). If
| your money is worth more tomorrow, then you are incentivised
| to tighten your belt and not spend for as long as you can. At
| scale, this negatively affects production, economic mobility,
| and so forth; the rich get richer and hoard the money. I do
| not believe any of today's economies can be healthy and
| competitive (or even functional) with a deflationary
| currency.
| mkleczek wrote:
| More and more people claim this system of stimulated growth
| is actually wrong and the root cause for global warming.
| strogonoff wrote:
| Sources who claims this, and details as to how?
|
| I disagree that it is the cause.
|
| The mechanism does not distinguish between "bad economic
| activity" and "good economic activity". I.e., the same
| mechanism applies to positive progress (carbon dioxide
| sequestration, more expensive technology and techniques
| reducing environmental impact, etc.), it just requires
| proper incentive alignment and accounting for bad faith
| actors via regulation.
|
| A deflationary system with limited supply makes kings and
| ultimately defeats itself, as your money is decreasingly
| evidence of your effort and work and increasingly
| evidence of you having held to it for a while. (It is
| also a quality of the current system, but less so, and it
| should be even less so, not more so.)
| amjnsx wrote:
| This argument falls apart when you consider technology
| though. And even daily essentials. No one would not buy
| food and water because they can get more in future. They
| need it now.
|
| The same goes for technology. We all know next year's
| iPhone will be better than this year but we still buy
| them...because we need them now.
|
| I'd argue inflation's incentives are worse - the constant
| need to invest/spend so that your money doesn't lose value.
| It means money flows into anything and everything like
| zombie companies, over consumption, property. Those on the
| poorest end are just trapped because as soon as they get
| any money it starts depreciating.
| strogonoff wrote:
| > We all know next year's iPhone will be better than this
| year but we still buy them
|
| Next year's iPhone will not only be better, but also
| (even with the same price tag) cost more, inflation-
| adjusted. That factors into the decision to buy now.
|
| > I'd argue inflation's incentives are worse - the
| constant need to invest/spend so that your money doesn't
| lose value.
|
| It is a problem when it is at extreme, like in unstable
| countries where money can be a liability to unhealthy
| degree. However, I'd argue it _should_ be a liability to
| a smaller degree.
|
| What you highlight is the ever-present conflict between
| personal benefit and societal benefit. _Obviously_ for an
| individual it is more preferable that the value of their
| money increases; I would never argue that. However, for
| society as a whole it is more preferable if the value of
| money decreases at a stable rate.
|
| Perhaps this is why all major economies settled on the
| idea that an amount inflation is crucial to have.
| amjnsx wrote:
| I do not buy into the idea that "everyone did it then it
| must have been a good idea".
|
| We've already seen the negative side of fiat currencies
| in how they eventually collapse (Zimbabwe, Venezuela,
| Argentina) and even in more developed countries wages
| have not kept up with inflation. Money is trending to
| zero People are trending to destitution.
|
| We saw it recently in the UK - where public sector
| workers were not given pay rises because the government
| argued it would fuel inflation. So how does that even
| make sense.
| strogonoff wrote:
| Let's continue this discussion when you show me a
| successful economy with a deflationary currency.
|
| The only reason you can provide examples of failed states
| with inflationary currencies is because _all currencies
| are inflationary_. This is not a coincidence, perhaps
| because deflation does not correlate with things going
| well. For some famous examples of deflations, read on The
| Great Depression in US and Lost Decades in Japan.
| kragen wrote:
| The US currencies were either literal precious metals, or
| gold-backed and/or silver-backed, throughout the 19th
| century until the Great Depression, except for a couple of
| brief suspensions. Consequently the average rate of
| inflation was zero. That was the period that it went from a
| fractious group of rebel colonies to the center of world
| economic development. So, while I'm sympathetic to the idea
| that a fiat currency with a predictable inflation rate
| might stimulate the economy, I think you are making an
| unjustifiably strong case for it.
| strogonoff wrote:
| Britain coming off the gold standard made the pound more
| competitive. Prior to that, when pound was backed by
| metals, they increasingly suffered high unemployment,
| runs on gold and everything.
|
| In the US it was nothing good either after a few years
| since WWI: manufacturing fell, unemployment rose[0], etc.
| I guess it did not help that Britain ended the gold
| standard which helped their exports, and US adopted
| protectionist policy which tanked its trade. I don't need
| to retell this all but basically the depression ended
| with the US abandoning the gold standard and entering
| controlled inflation.
|
| Perhaps the reason for these rosy takes on deflationary
| currencies in the US is that not many people are still
| alive who lived through the depression...
|
| By the way, the US did suspend the gold standard during
| WWI. Why, you ask? Well, it so happened that some debt
| was due, plus people from across the pond were selling
| stocks in US companies, and so what happens at that point
| (when you don't have much monetary control) is ships full
| of US gold floating off into the misty ocean.
|
| Correct me if I am wrong, of course.
|
| [0] "Did you know that every 1% the unemployment goes up,
| 40 000 people _die_?" -- The Big Short.
| kragen wrote:
| As far as I know, you're right about those historical
| facts, but both of us can see only a small part of the
| picture. There are hundreds or thousands of countries in
| the world over eight thousand years since money was
| invented, and we've discussed a 225-year period in two of
| them. That doesn't seem like good justification for
| strong generalizations.
| rufus_foreman wrote:
| >> If your money is worth more tomorrow, then you are
| incentivised to tighten your belt and not spend for as long
| as you can. At scale, this negatively affects production,
| economic mobility, and so forth
|
| By your logic, bonds are bad for the economy.
| strogonoff wrote:
| Care to write more than a sentence and explain your
| logic?
| rufus_foreman wrote:
| When you invest in bonds, they are worth more tomorrow
| than they are today. So you would have the same incentive
| to put off spending as long as you could as you would
| owning a deflationary currency. If that is bad for the
| economy when you're holding a deflationary currency, it
| should be bad for the economy when you're holding an
| appreciating asset.
| walls wrote:
| > the rich get richer and hoard the money
|
| Well thankfully we're safe from that!
| strogonoff wrote:
| Definitely, if anything we need more of it, right?
| spankalee wrote:
| This is one reason why Bitcoin isn't a good currency.
| Deflationary trends give holders a lot of incentive to keep
| holding and never spend.
| foogazi wrote:
| You can buy a lot of pizzas with it now
| cmdli wrote:
| You can't buy a single pizza with it now. Only by
| exchanging it for an actual, better currency
| mindcandy wrote:
| You can buy a pizza from me with Bitcoin now.
|
| I'm not a vendor or even a chef. But, anything is
| negotiable.
| andrewmcwatters wrote:
| Bitcoin is the world's number one store of value for
| converting young, impressionable men's wages into thin air
| and moving those dollars to other people instead.
|
| It's a compelling rival to multi-level marketing for women in
| that both prospects entice low-socioeconomic standing peoples
| into thinking they are building value instead of consuming
| it.
| latchkey wrote:
| It's a solid store of value. One can borrow against that held
| BTC, and as it appreciates over time, the loan-to-value ratio
| improves, without having to do anything. Also avoids capital
| gains taxes since you're not spending it.
| crystaln wrote:
| Deflation is what you want for investment assets. Btc is
| primarily a value store and commodity like gold, not a
| currency. Deflation is a good thing when you are parking value.
| mrbombastic wrote:
| The original bitcoin whitepaper was titled: "a peer to peer
| electronic cash system"
| throw0101d wrote:
| >> _Btc is primarily a value store and commodity like gold,
| not a currency. Deflation is a good thing when you are
| parking value._
|
| > _The original bitcoin whitepaper was titled: "a peer to
| peer electronic cash system"_
|
| The goalposts, they move.
| solumunus wrote:
| The initial intention does not change the practical
| reality.
| throw0101d wrote:
| > _Deflation is a good thing when you are parking value._
|
| And is deflation a good or bad thing for the livelihood and
| well-being of human beings?
|
| How many people in the US has a mortgage or some kind of debt
| (student, medical)? Inflation makes the burden of debt
| easier, deflation makes it worse.
|
| And the Top (0.)1% already has an easy enough time with
| parking/generating value. Deflation would only help them more
| (and make things hard for everyone under them).
| logicchains wrote:
| Inflation punishes savers and rewards debtors, i.e. it
| disincentivises the more economically productive behaviour.
| thunderfork wrote:
| Isn't saving (i.e. sitting on assets) _less_ economically
| productive than spending? Inflation rewards productivity
| by making productive use of money the only way to avoid
| loss over time?
| NeutralCrane wrote:
| Saving isn't economically productive, on a societal
| level. Spending is. Investing is.
|
| Deflation inherently disincentivizes doing _anything_
| with the currency other than sitting on it. Want to buy
| something? You'd be better off waiting and buying it
| tomorrow because it will be worth less in your
| deflationary currency at that point. No one has an
| incentive to lend their money to others to use it more
| productively, so no growth occurs. No one buys anything,
| producers can't sell anything, and no one can get capital
| to start any business ventures. The sole, viable way to
| accumulate wealth is to take the currency and stuff it
| under the mattress.
|
| This results in a society much like Europe described in a
| Jane Austen novel, where wealth is simply inherited and
| the upper class doesn't actually serve an economic
| function. They just exist to perpetuate their wealth and
| dole out subsistence wages to those who work their
| estates and have absolutely no chance of improving their
| station.
|
| It's an inherently broken system and a perfect example of
| Chesterton's fence by tech types assuming they know
| better than everyone else.
| throw0101d wrote:
| > _Inflation punishes savers and rewards debtors, i.e. it
| disincentivises the more economically productive
| behaviour._
|
| Quite the opposite.
|
| Deflation encourages hoarding of cash because it just
| sits there and increases in value. "If you want to retain
| the purchasing power of your money, it should participate
| in society via investment." -- Nick Maggiulli
| rufus_foreman wrote:
| >> How many people in the US has a mortgage or some kind of
| debt (student, medical)?
|
| Approximately zero of them have debt denominated in
| Bitcoin. Meaning that the main drawback of deflation does
| not apply to Bitcoin.
| TheDudeMan wrote:
| Losing some bitcoin is effectively equivalent (over the long
| term) to distributing it to all other holders (proportionally).
| So this is fine.
| nosefurhairdo wrote:
| Which is equivalent to deflation, which parent suggests is
| harmful to bitcoin's viability. In order to claim that "this
| is fine" you would need to refute the claim that deflation is
| bad.
| hn_throwaway_99 wrote:
| > Which is equivalent to deflation, which parent suggests
| is harmful to bitcoin's viability.
|
| Deflation is built into Bitcoin _by design_ and is one of
| its most notable features regarding its coin growth
| schedule. This pros and cons of that approach have been
| discussed ad infinitum in the crypto community.
| agumonkey wrote:
| I wonder when did cypherpunks started to discuss this
| kind of mechanisms for digital currency. Was it obvious
| from day one or an idea that came later in the design
| phases.
| logicchains wrote:
| There were early attempts at inflationary
| cryptocurrencies too but they didn't catch on; all other
| things being equal, people prefer to hold currencies that
| gain value over time, not lose value.
| jimkleiber wrote:
| And the word currency, or current, implies movement, no?
|
| So I think it's the issue of thinking people will use it
| as a currency, not that it is not a valuable asset
| lumost wrote:
| The finite nature of btc, low transaction volume, and
| increasing cost of mining made deflation a given. The
| original designers simply did not solve this problem.
| BTC's dominance in the crypto community suggests that
| this trait was advantageous for BTCs growth as existing
| holders are incentivized to add additional use
| cases/transaction volume.
| throw0101d wrote:
| > _Was it obvious from day one or an idea that came later
| in the design phases._
|
| The Bitcoin paper came out in 2009, and the deflationary
| criticism was already recorded in 2010:
|
| * https://en.bitcoin.it/w/index.php?title=Deflationary_sp
| iral&...
|
| 2014 article:
|
| * https://isps.yale.edu/news/blog/2014/06/the-perils-of-
| bitcoi...
| wmf wrote:
| Cypherpunks were discussing digital gold and Austrian
| economics in the 1990s. I wouldn't say there was any kind
| of consensus but the ideas were out there.
| kragen wrote:
| Not only were they already discussing it when I joined
| the list in 01992, cryptocurrency was a major, if
| implicit, part of Tim May's crypto-anarchist manifesto
| which I think he presented at Hackers in 01988: https://g
| roups.csail.mit.edu/mac/classes/6.805/articles/cryp...
|
| He wasn't specifically calling it out as having a fixed
| money supply or even fungible tokens, though. And it
| wasn't until Satoshi figured out how to do without a
| central issuer like Xanadu, Digicash, or e-gold that we
| realized it was possible. At the time that Satoshi cut
| the knot, we were all convinced it was impossible because
| of Zooko's Triangle.
|
| Chaum founded DigiCash in 01989, incidentally, based on a
| paper he wrote in 01982 presenting a cryptocurrency
| design for untraceable payments, but backed with dollars
| by a central issuer, like Tether.
|
| However, there was always a strong association between
| cypherpunks and right-libertarian free-market ideology,
| which is where you find gold bugs and Austrian
| economists. You may remember that one of the minor plot
| points in _Atlas Shrugged_ was that Galt 's Gulch went
| back to specie money (tiny pennies stamped from gold)
| because its value wasn't dependent on government fiat.
| DonHopkins wrote:
| Given the context, "this is fine" is obviously an ironic
| reference to the cartoon dog sitting on a chair at the
| dining room table with a mug of coffee in a burning house
| meme.
| echion wrote:
| Normally I would say you're right, but I read the context
| opposite to you; I read the "fine" as a straight/literal
| statement: the author of "this is fine" is disputing the
| author's parent's statement that "this can be considered
| [a bug]".
| throw0101d wrote:
| > _Losing some bitcoin is effectively equivalent (over the
| long term) to distributing it to all other holders
| (proportionally). So this is fine._
|
| To those that have, more will be given. What about those that
| do not have?
| wmf wrote:
| Slavery.
| slavik81 wrote:
| You can't actually know if they are truly lost or not,
| though. Any dormant wallet could reactivate at any time, just
| like the wallets in this story.
| oleganza wrote:
| I love how people bring up deflationary spiral as a "peril"
| while the prerequisite for it is the universal and smashing
| success of Bitcoin.
|
| The only "problem" Bitcoin poses for economies is for
| governments to fine-tune their local economies via currency
| production and related controls. In that sense, we should watch
| how events unfold in Turkey.
|
| * among major "regular" economies, Turkey has the highest % of
| people holding crypto ([?]20%). Second only to special zones
| UAE and Singapore (31%, 24%).
|
| * Turkish lira is steadily inflated over the last 30-40 years,
| well over 10% and recently over 50%.
|
| * Turkey does not have mandate for pricing goods in local
| currency: you can pay in dollars or euros, along the local
| lira.
|
| * When you enter Istanbul airport, Every. Single. Gate. is
| marked with BTCTurk ad, inside and outside - the major crypto
| exchange in the country.
|
| * Istanbul city market is full of traders who use USDT on Tron.
|
| The experiment of social game "Bitcoin" boils down to this:
| will the people self-organize the functioning economy with
| monetary freedom, while the gov loses its grip on it; or will
| the economy collapse without government's regulation and
| protective management?
| ars wrote:
| > and smashing success of Bitcoin.
|
| It's a success today, we haven't gotten to when they stop
| issuing any more, and mining is funded by transaction fees. I
| suspect there are going to be some problems then.
| latchkey wrote:
| Like what? As far as I can tell, it will solidify its store
| of value.
| throw0101c wrote:
| > _Like what? As far as I can tell, it will solidify its
| store of value._
|
| Which is the bug:
|
| > _No currency should be able to buy the same basket of
| goods over very long timespans through hoarding. If you
| want to retain the purchasing power of your money, it
| should participate in society via investment._
|
| * https://twitter.com/dollarsanddata/status/1592651809750
| 79833...
| oleganza wrote:
| That's a "hot take" that people take as an axiom. What if
| it isn't? What is the precise definition of
| "participating in society"? What level of earning and
| spending is considered morally good and who's to decide
| that? (Meta questions arise when discussing conflicts of
| interest of the deciders.)
| throw0101d wrote:
| > _Turkish lira is steadily inflated over the last 30-40
| years, well over 10% and recently over 50%._
|
| Because the authoritarian government took over the previously
| independent central bank and lowered interest rates. Higher
| inflation was predicted by mainstream economists, and they
| were right.
|
| * https://www.aljazeera.com/news/2021/3/20/turkeys-erdogan-
| sac...
|
| * https://en.wikipedia.org/wiki/Currency_interventions_under_
| E...
| dialup_sounds wrote:
| Thank God that would never happen in the US.
| tootie wrote:
| This is just a convenient way to access stable western
| currency. Having been to Russia and Argentina during their
| worst inflation years before crypto, they solved their issues
| by asking for US paper dollars. Crypto is just saving them
| currency exchange fees.
|
| And there's no way Turkiye is behind the value of BTC. It's
| still driven by speculators.
| amelius wrote:
| > useable to actually do stuff with
|
| You mean actually buy stuff? Come on, everybody knows that BTC
| is used mostly for speculation ...
| patrickhogan1 wrote:
| Fair point. It seems largely that bitcoin is a store of value
| rather than a currency that you do stuff with at this point.
| Gigachad wrote:
| I don't think that's much of an issue for usage. Since a
| bitcoin can be divided in to 100,000,000 satoshis. There would
| only need to be a handful of coins left accessible for the
| system to be usable.
|
| Being deflationary I agree is a problem, but not the idea that
| there aren't enough usable coins left.
| globular-toast wrote:
| Everyone always repeats the "deflationary bad" mantra, but I
| wonder if it really would be. Is the world really going to
| come crashing down if people only spend on things they need
| rather than endlessly cycling through shit they don't?
| kragen wrote:
| The concern is that capitalism allocates resources to the
| production of socially valuable goods because corporations
| can raise money to buy the means of production of those
| goods before producing them by selling shares in their
| future profits to investors who are willing to accept some
| risk of bankruptcy in exchange for those future profits,
| which result from consumers' rational judgment that the
| goods are sufficiently valuable to them to be worth buying
| at a price higher than the cost of goods sold.
|
| None of the links in this chain is perfect+, but one of the
| weaker ones is where investors are willing to accept risk.
| A guaranteed deflationary currency is a risk-free way to
| get a return on your investment, so companies have to offer
| a higher rate of return, narrowing the set of goods that
| can justify such investment.
|
| But the same criticism can be leveled at Treasury bonds and
| (to many people's minds) real estate, so I'm skeptical of
| it, and anyway "risk-free" is not a good description of
| Bitcoin.
|
| ______
|
| + Consumers knowingly buy socially harmful goods such as
| cigarettes, they unintentionally buy worthless goods
| because producers lie to them, investors are largely
| speculators driven by herd mentality rather than rational
| assessors of future returns, corporations cheat investors
| due to principal-agent problems, and externalized costs and
| benefits such as pollution aren't measured at all. Still,
| it's a damn sight better at organizing economic production
| than the Great Leap Forward, the Southern slave
| plantations, or the medieval guilds.
| wqaatwt wrote:
| There is plenty of empirical evidence from the 1800 to
| 1930s showing how a deflationary currency affects the
| economy. Amongst other things getting stuck in permanent
| boom and bust cycles wasn't that great.
|
| > But the same criticism can be leveled at Treasury bonds
|
| Not to the same extent. Bond returns are usually barely
| above inflation. e.g. back in the second half of the
| 1800s you'd get 4% interest plus 1.5-2% average yearly
| deflation (since the economy was growing due to
| technological progress/etc. yet money was relatively very
| scarce).
| walls wrote:
| It's only a problem for capitalism.
| jMyles wrote:
| > Is the world really going to come crashing down if people
| only spend on things they need rather than endlessly
| cycling through shit they don't?
|
| In broad strokes, this is perhaps the most important
| question of environmental sustainability which stems from
| monetary policy.
|
| Second most important is the matter of how much energy is
| spent on security (eg, in the case of bitcoin, the
| horrifying amounts of power spent on SHA256 hashing, and in
| the case of USD, the perhaps even more horrifying energy
| consumption of the global petrodollar empire).
|
| We spend so much deliberation on this second question that
| we often ignore the first: what monetary policies will make
| us chill out on the whole importing-plastic-shit-we-
| don't-need-from-the-other-side-of-the-earth thing?
| throw0101d wrote:
| Perhaps also see the linked page "Top Dormant for 5 years Bitcoin
| Addresses":
|
| * https://bitinfocharts.com/top-100-dormant_5y-bitcoin-address...
| jedberg wrote:
| https://news.ycombinator.com/item?id=44466896
| gnabgib wrote:
| Discussion landed in another thread (74 points, 32 comments)
| https://news.ycombinator.com/item?id=44466896
| dzhiurgis wrote:
| Can they be spending sidechain coins quietly or is that visible
| too?
| tromp wrote:
| You can visibly send BTC to the Liquid federated side-chain,
| where amounts in txs are hidden.
| EGreg wrote:
| I have been saying for a decade
|
| Satoshi isnt gonna move wallets 1 through 10
|
| But he probably had wallet 55, 182 and 281-290 and has been
| spending this whole time. Any founder of a crypto project can do
| that.
| EGreg wrote:
| On a side note, if quantum algorithms break elliptic curve
| cryptography, then wouldn't Satoshi's wallets and others be
| flooding the market with coin transfers?
|
| The BTC network will need to require all addresses with large
| Bitcoin UTXOs to send them to new wallets, that are quantum-
| resistant, by a certain date, or lose the ability to move that
| money.
| notnullorvoid wrote:
| Someone please correct me if I'm wrong, but there's no proof
| that a general solution to elliptic curve discrete logarithm
| problem can't be found.
|
| It's reasonable to assume that a solution hasn't been found yet
| though, otherwise that would be the world's best kept secret.
| wmf wrote:
| That's downstream of P vs NP.
| xoralkindi wrote:
| Shor's algorithm, originally designed for integer
| factorization, can also be adapted to solve the discrete
| logarithm problem in polynomial time on a quantum computer.
| There is also the less efficient Grover's algorithm can also
| be used for unstructured search problems on a quantum
| computer.
| notnullorvoid wrote:
| I was thinking more along the lines of solving in
| polynomial time on a conventional computer.
| bix6 wrote:
| Where did they transfer them? I see fck in a few lol.
| barkingcat wrote:
| Probably North Korea.
| paulpauper wrote:
| Price is dumping today, i wonder how much of a role this is
| playing. those coins will be hitting an exchange likely. This has
| always been the problem with bitcoin.. the implicit assumption is
| that many coins are lost , but if the early adopters start
| cashing out, prices will fall fast. Institutional buying and
| retail is still small relative to the early adopters. There are
| many people , miners who are quietly siting on huge fortunes.
| Scoundreller wrote:
| And it's a major US holiday, whatever that indicates.
| alecsm wrote:
| I wish I had access to my old wallet. I mined around 1.5BTC with
| my laptop and I deleted the wallet after a while because it was
| worthless.
| paulpauper wrote:
| you probably would have sold it at $100 or something anyway
| freedomben wrote:
| Yep. I used to pay my Dish Network bill with BTC. Youth is
| wasted on the young and hindsight is 20/20
| twright wrote:
| This is definitely something I remind myself of for any
| investment I sell and later on explodes. For bitcoin there
| were way too many highs that I definitely would have sold at.
| alecsm wrote:
| I know, that's why I'd like to have the wallet now :)
|
| Even if BTC hits 1 million in the future, 150k now would be
| life changing.
| userbinator wrote:
| I think many others, including me, have also the same
| experience of mining a few and then either forgetting or
| deleting them because they thought it'd never turn out to be
| worth anything.
| qingcharles wrote:
| Same. I mined 32 BTC circa ~2010-2011. Then I did a clean
| install and forgot I had everything saved on the HDD and
| nothing written down. I remember them being worth about $1 a
| pop at the time and thought "fuck it", but I never bothered
| minting any more.
| amjnsx wrote:
| Has it ever been worthless (post pizza guy). There's always
| been someone who will give you some fiat for them.
| andy99 wrote:
| Most interesting to me is that people are worried about a $2B
| transaction moving the market.
|
| How does that compare to the market depth of actual currencies or
| commodities? BTC, being objectively worthless, must be much more
| sensitive to people wanting to sell I'd expect.
| bboygravity wrote:
| How is BTC objectively worthless (I'm guessing you mean
| "intrinsicly worthlesss"?) as opposed to USD or other major
| currencies?
| anothernewdude wrote:
| Other currencies get their value because the governments that
| provide them make people pay taxes. If you want to pay the
| tax the US government charges you, you're going to need some
| USD - so there's guaranteed demand, and hence intrinsic
| worth.
|
| There's also other debt that the US government provides in
| USD - which provides value as well, in the form of bonds.
|
| BTC has no such driver of wealth. Except perhaps money
| laundering/transfers without AML provisions.
| nwienert wrote:
| People value a way to store money securely in a place that
| can't be physically robbed, that can be sent
| internationally with low fees quickly.
|
| You don't need anything else.
|
| For years the haters on here would screech "but it's
| volatile" - not really anymore. I wonder what they'll
| decide to hate it for now, rather than changing priors.
| FabHK wrote:
| According to your theory, all the thousands of shitcoins
| are valuable. But they're not.
|
| There must be further reasons, then, that the price of
| Bitcoin is so high. And they're purely sentiment, I'd
| argue. If that changes, there's little to prevent the
| price from going down very far very fast. Unlike fiat.
| samdoesnothing wrote:
| No, according to their theory a coin _can_ be valued for
| its intrinsic properties, not that it _will_ be.
| nwienert wrote:
| I mean i mentioned its volatility has gone down.
|
| People use stablecoins as well for the same reasons.
| Shitcoins are different.
| logicchains wrote:
| >Other currencies get their value because the governments
| that provide them make people pay taxes
|
| That's demonstrably false, because countries like Zimbabwe
| and Venezuela experienced hyperinflation (the complete
| devaluation of a currency) in spite of the fact that their
| governments were still forcing people to pay taxes with
| those currencies. So clearly that alone is not enough to
| provide intrinsic worth to a currency.
| PartiallyTyped wrote:
| The reason for that devaluation is that trust was eroded.
| GP's premise is correct, that fiat has value because of
| governments, but the reasoning here is not fully correct.
| The value is in the trust that the government and the
| institutions will continue to function properly.
| notahacker wrote:
| Countries like Zimbabwe and Venezuela printed those
| currencies in vast quantities to pay bills _instead_ of
| raising [most of] that money through taxes. Taxes owed in
| previous quarters were worthless compared with the new
| trillion dollar notes Zimbabwe 's central bank issues to
| pay government officials, and most private transactions
| were black market so they weren't seeing them returned in
| taxes. Zimbabwe and Venezuela are the defining example of
| how a currency which isn't backed by mountains of debt
| and taxes is reliant entirely on speculators'
| confidence...
| andy99 wrote:
| Yeah bitcoin is (at best[0]) a kind of consensual
| hallucination, worth something because people believe it
| is. Fiat is someone with a Navy telling you it's worth
| money, it's very different.
|
| [0] in practice there's a difference between the idea of a
| distributed digital currency and the ponzi schemes they
| give rise to I'm real life. Bitcoin is some greater fool
| thing, it's not a medium of exchange.
| analog31 wrote:
| This doesn't explain why the currencies of different
| countries behave differently.
|
| In my view, money is a technology. People use a technology
| if they find it to be useful. I know this sounds circular,
| but bear with me. A "major" currency is designed to be
| useful as a medium of exchange, temporary store of value,
| and tool of government economic policy. For it to serve
| these purposes, a government has to moderate its own
| behavior to some extent.
|
| Thus my view is that the value of a major currency is
| based, not on the expectation of paying taxes in the
| future, but on more general expectations of the future
| behavior of the government.
|
| With that said, paying taxes is good use for money that's a
| short term store of value, because you rarely need to hold
| onto your tax money for more than a year before paying it.
| PartiallyTyped wrote:
| It's not backed by a government, and while some may say
| that's a good thing, I think it is not.
|
| Without institutional backing, crypto is just a number in a
| database that people agree is worth something--for now.
|
| If that collective belief evaporates, there's no court, no
| army, no tax base, and no GDP to catch it. Contrast this with
| fiat currency, which--while not backed by gold--is backed by
| coercive power and taxation.
|
| Let's start from something even more fundamental. How do you
| bootstrap trust? Suppose two pseudonymous entities online
| want to exchange money for services. Such a system will
| likely need a reputation system to establish the
| trustworthiness of entities. That system needs to be tolerant
| to Sybil attacks (i.e., forging multiple identities), while
| also ensuring the service provider isn't exploited by a buyer
| who refuses to pay after receiving the work.
|
| But this exposes a deeper issue: trust cannot be bootstrapped
| from scratch. It needs either: A shared
| history (which pseudonyms lack), An external
| authority (which decentralization avoids), or A
| system of credible, enforceable consequences (which requires
| identity or stake).
|
| Without these, any trust system collapses into a prisoner's
| dilemma. Each actor is incentivized to defect (cheat) unless:
| There's a future cost to cheating (reputation loss that
| matters), There's a benefit to cooperation over
| time (e.g. recurring jobs), Or there's a
| credible mechanism to enforce fairness (e.g. escrow and
| arbitration).
|
| But even escrow only works when dispute resolution is
| possible and trusted. And dispute resolution requires either
| a neutral arbitrator (who must have their own identity and
| incentives) or hard-coded, binary rules, which rarely capture
| the complexity of creative or service work.
|
| More fundamentally, trust-based systems are built on
| recursive assumptions: You trust X because
| X has a good rep. X has a good rep because
| others say so. You trust those others
| because...?
|
| Eventually, without a root of trust--whether a state, a
| court, a verified identity, or long-standing social capital--
| the entire structure becomes circular. There's no ground
| truth. Just reputation built on sand.
|
| And so, the real limitation isn't crypto per se--it's that
| trustless systems don't exist. At best, we shift trust: from
| institutions to code, from names to keys, from legal
| consequences to probabilistic deterrents. But the requirement
| for trust itself never goes away.
|
| In a pseudonymous setting, the cost of betrayal is minimal. A
| buyer can stiff a seller and vanish. A seller can deliver
| garbage or nothing. Reputation can be reset at will unless
| there's an expensive cost to identity creation or a strongly
| linked personal history--which violates pseudonymity.
|
| Thus, bootstrapping trust in such environments is not just
| technically hard--it is philosophically incoherent without
| compromising at least one of the pillars: privacy,
| decentralization, or enforceability.
|
| It follows that if you can't bootstrap trust, you can't
| bootstrap anything that depends on it--including money.
| Money, at its core, is a social contract, a belief system
| upheld by collective trust. We accept currency in exchange
| for goods or services because we trust that others will
| accept it from us in turn. That belief is reinforced by
| institutional structures: central banks, governments, legal
| systems, and ultimately, enforcement mechanisms.
|
| But the moment that trust breaks down, the system unravels.
| If people no longer trust that their money will hold value
| tomorrow, they will try to offload it as fast as possible,
| converting it into hard goods, foreign currency, or anything
| perceived as more stable. This behavior accelerates inflation
| --sometimes catastrophically.
|
| We've seen this repeatedly in history: In
| Weimar Germany, the collapse of political and institutional
| trust after WWI led to hyperinflation, with prices doubling
| every few days. In Zimbabwe, trust in government
| policy collapsed alongside the economy, and the currency
| became worthless. In Venezuela, rampant
| inflation was fueled not just by bad economic policy but by
| the public's loss of faith in any institutional ability to
| right the course.
|
| The underlying mechanism is always the same: money ceases to
| function as a store of value when the population no longer
| trusts the system that issues and manages it. Once the shared
| illusion cracks, even fiat currency--backed by laws, taxes,
| and armies--can become just colored paper.
|
| Now contrast that with crypto. Cryptocurrencies claim to
| solve this by removing central authorities and placing trust
| in mathematics and distributed consensus. But this is not
| true trustlessness--it's merely replacing institutional trust
| with collective belief in code and game theory. And the
| cracks are showing: when confidence drops, as in market
| crashes or protocol failures, value disappears just as
| quickly--if not faster--than in fiat regimes.
|
| So the uncomfortable truth is this: Money
| only works if you believe it will still work tomorrow.
|
| Without enforceable trust, money becomes unstable. Without
| shared trust, money becomes meaningless.
|
| And that brings us back to the core issue: you cannot build a
| functioning economy without some root of trust. Whether that
| root is institutional, social, or cryptographic, it must be
| anchored, persistent, and costly to betray. If it's not, the
| system becomes inherently fragile.
|
| The reason I used pseudonymous here is exactly because we
| assumed govs are bad. If govs are good, then crypto
| degenerates to just a slower system for transactions.
| FabHK wrote:
| > Money only works if you believe it will still work
| tomorrow.
|
| Yeah. When crypto goes down, it'll be epic.
|
| > If govs are good, then crypto degenerates to just a
| slower system for transactions.
|
| That's how I see crypto: an inefficient and ill-regulated
| substitute for money, though suitable for crime. If
| governments turn bad, stable money is just one tiny part of
| the problem.
| lottin wrote:
| The expected discounted value of all bitcoin's future cash
| flows is zero. This is because the only cash flow that a
| bitcoin investor can expect from an investment in bitcoins is
| the revenue from selling the bitcoins in the market... and
| the market value of something that has no use case and is
| held for speculative purposes only (i.e. has no intrinsic
| value) will tend to zero in the long run.
|
| A fiat currency that is issued by the government has no
| intrinsic value either, but there's one crucial difference
| compared to a cryptocurrency: in the case of a government-
| issued fiat currency the central bank will intervene the
| market, by making use of its prerogative to conduct monetary
| policy, to ensure price of the currency doesn't drop to zero.
| amjnsx wrote:
| And this has proven successful in many countries such as
| Zimbabwe, Venezuela, and Argentina
| lottin wrote:
| Generally speaking it has been successful, more so than
| the gold standard. It's true that sometimes states fail,
| but that's not something a monetary system can prevent
| from happening, or insure against.
| immibis wrote:
| And the Bitcoin blockchain is just another state, with
| just another monetary system, which you can diversify
| into or not, and it can fail or not.
| lottin wrote:
| A blockchain is not a state. A state is a political
| entity that rules a territory through the monopoly of
| violence.
| immibis wrote:
| https://write.as/no-time-like-tomorrow/a-blockchain-is-a-
| sta...
| lottin wrote:
| Sorry to say, but you're deluded. A blockchain is made of
| "information". Information has no coercive power. A
| blockchain can't enforce laws. It can't stop illegitimate
| violence. It can't perform any of the functions of a
| state. Not even remotely.
| samdoesnothing wrote:
| Leaving the gold standard has been so successful, as
| evidenced by the inflation crisis leading to rising cost
| of living and housing shortages in every western country.
| lottin wrote:
| Inflation and a rise in the cost of living are different
| things. Inflation means an increase in the (nominal)
| price level, whereas the cost of living is measured in
| _real_ prices, specifically real wages.
| FabHK wrote:
| A fiat currency is indeed just an accounting unit, but it
| has some floor against falling to zero, as it can legally
| extinguish any debt, and is needed to pay taxes.
|
| Even so, sometimes they fall to basically zero. What
| chance does crypto have when sentiment turns against it?
| ur-whale wrote:
| Your definition of "worthiness" is entirely flawed. It
| seems to be base on some random economics textbook
| definition of "value".
|
| I am getting tired of repeating the exact same thing on HN,
| but TL;DR: . there is no such thing as
| intrinsic value, it is a fundamentally flawed concept.
| . the only reliable tenet in economics (as in: having
| always be observed to work) is the law of supply and
| demand, which "value" derives from: if demand>supply, value
| appears. End of story. . why there is demand
| in the first place is a many-colored and complex affair,
| which economist recurrently (and predictably) fail to
| analyze and forecast.
| lottin wrote:
| Asset pricing theory is a well established field within
| economics. Of course it comes down, in the end, to the
| law of supply and demand, but that doesn't mean that we
| have to stop here. The law of supply and demand doesn't
| explain why there's a supply and a demand in the first
| place.
|
| https://en.wikipedia.org/wiki/Asset_pricing
| lrhegeba wrote:
| My house also doesnt generate cash flow/interest by itself,
| must have an intrinsic value of zero. Surprisingly it can
| be used as collateral for a loan as long as other people
| assign a (however disputable) value to it. So, of course
| you could be right when _all_ (not just you) other people
| decide that BTC has a value of zero. Meanwhile i use my
| BTCs as collateral. Value is more of a social judgment, not
| a law of nature. Hence the misconception?
| lottin wrote:
| Houses do generate income, called "rent". Either you rent
| out your property and get paid an explicit rent, or you
| live in the house in which case you get paid in kind. So,
| bad example!
| tasuki wrote:
| Agreed. How much future cash flow does a kilogram of gold
| generate?
|
| Gold has very little "intrinsic" (industrial) value. Most
| of its value is pure speculation. Would you say gold and
| bitcoin are rather similar then?
| lottin wrote:
| Like bitcoin, gold is too a "bubble asset", but unlike
| bitcoin, gold is a physical object with use value and
| limited availability.
|
| The thing about gold is that its price appears to to be
| negatively correlated with the economic cycle. Because of
| this some people argue that it makes sense to include it
| in a portfolio of stocks and bonds, so that the
| volatility of the portfolio is reduced, although
| personally I would advise against it.
| monster_truck wrote:
| It's only 0.09% of what's been mined so far. There's ~2.4T USD
| in circulation? So pretty similar
| ur-whale wrote:
| > being objectively worthless
|
| Since we're on the topic of being objective, how is,
| objectively, something that trades at close to 110k USD per
| token, "worthless"?
|
| I believe the word "objective" does not, objectively, have the
| same objective meaning for everyone.
| dofubej wrote:
| The day Satoshi finally decides to move some btc around, I wonder
| how many automatic emails, api calls, etc will be performed
| because of so many people setting up alerts.
| cedws wrote:
| I really wonder if Satoshi's fortune is gone forever. Maybe the
| CIA found his real identity and uncovered his keys. Dumping that
| much BTC on the market would crash the market and probably even
| tank other financial markets.
| changoplatanero wrote:
| Why would the cia want to crash the market?
| ekianjo wrote:
| the CIA actively relies on many means, including BTC, to
| organize their activities.
| swarnie wrote:
| Why would they throw a dozen South American coups, import
| tonnes of crack to the inner cities, conduct illegal human
| experimentation or attempt the assassination of multiple
| democratically elected world leaders?
|
| Honestly no idea, they seem a little fash-y for any logical
| reasoning that i can comprehend.
|
| Maybe they had another insurgency to fund and didn't want it
| going through the vast ^official^ books?
| wmf wrote:
| My theory was always that Satoshi burned the coins from the
| beginning. There never was any fortune.
| amjnsx wrote:
| I see it as the ultimate honeypot. If those coins haven't
| moved yet the network is secure.
| monster_truck wrote:
| I think you mean canary. Honeypots are decoys by definition
| josu wrote:
| He may have burned the keys, not the coins. The process of
| burning the coins is by sending them to an address such as:
| 1111111111111111111114oLvT2
| ekianjo wrote:
| did the rumor that Satoshi was Paul Leroux go anywhere? since
| he is now in the hands of the intelligence services for a while
| this could be a good explanation for Satoshi not being able to
| access its coins.
| udev4096 wrote:
| Satoshi disappeared right after Gavin announced that he was
| going to give a talk about bitcoin at CIA, just one of the many
| conspiracy theories
| msgodel wrote:
| Is this why Martin Shkreli quit streaming? Did he actually crack
| them?
| fusionadvocate wrote:
| Quantum shorts got to him first.
| ProllyInfamous wrote:
| Trivia: there are only five publicly-traded companies with
| marketcaps larger than bitcoin's:
|
| nVidia Microsoft Apple Amazon Google
|
| BTC's marketcap is also larger than _all the silver in the
| world_...
| wredcoll wrote:
| Wait til you see the market cap of the shitcoin I just
| released!
| dsp_person wrote:
| Just a hair under google, it crossed earlier this week I think.
| This list is fun to look at https://8marketcap.com
| FabHK wrote:
| Though their market cap is somewhat meaningful, and reflective
| of some value created (flawed as that measure may be). Unlike
| Bitcoin.
| globular-toast wrote:
| Bitcoin (capital B) is valuable. An individual BTC is not,
| but that's true of any currency. We can argue until the cows
| come home about how valuable these things _really_ are.
| Speculation in these markets makes it too difficult to judge.
| People will bet on these things not because they are
| delivering lots of value to us right now or in the future,
| but just because they think they 'll still be around in the
| future. That gives monopolists like the ones above the
| advantage, regardless of value delivered.
| bravesoul2 wrote:
| Might be the Pizza guy! The other thing they may have a small
| fortune in forked coins too. Like Bitcoin Cash.
| m3kw9 wrote:
| The guy found his hd at the dump?
| smeeger wrote:
| why did i not mine bitcoin in 2010? fuck
| rexpop wrote:
| Because it's a stupid waste of resources, and you had better
| things to do.
| arthurcolle wrote:
| Imagine you have one of these addresses precomputed and you see
| it in a flashed alert
|
| Do you sweep to a new address or what?
|
| EDIT: Hypothetically, not running on Majorana-2
| HeartStrings wrote:
| Chinese quantum computer just broke Bitcoin address.
| rlt wrote:
| What makes you think that?
| udev4096 wrote:
| They successfully broke 22 bit RSA [0], which is definitely
| something to worry about
|
| [0] - https://www.earth.com/news/china-breaks-rsa-encryption-
| with-...
| Synaesthesia wrote:
| I was also around when bitcoin just started out. Many people
| wanted it to be a global revolution in finance.
|
| But instead it turned into a game of "hodl" to get rich.
|
| Scams were openly perpetrated in the forums.
|
| I became completely disillusioned. What exactly does bitcoin
| offer the world today?
| dovys wrote:
| Speculation, get rich quick schemes and scams. They will exist
| no matter what. At least the barrier to entry to get scammed is
| higher with crypto than just online payments
| Synaesthesia wrote:
| No, scamming people is much easier with crypto. The
| transactions are irreversible, for one.
| akritrime wrote:
| As it is with cash.
| superjan wrote:
| And crypto scamming is anonymous, low risk and can be
| automated. Scamming people for cash requires you to get
| close to each of your victims.
| PartiallyTyped wrote:
| Cash is backed by a government, which can coerce parties
| into following the law.
| FabHK wrote:
| Indeed. The Economist estimates the modern scam industry to
| be as large as the illicit drug trade by now, around $500
| bn annually in revenue. Enabled in large part by crypto
| (pig butchering, ransomware, rug pulls were not a huge
| thing before crypto).
| t1E9mE7JTRjf wrote:
| > They will exist no matter what
|
| Ok, so then they're not a bitcoin thing then right?
| lifty wrote:
| A fixed supply, digital bearer asset. It's nobody's debt. Not
| that many of those. And US debt, even though it's still the
| predominant reserve asset, things are slowly changing. And
| yeah, btc is still not a proper currency.
| wqaatwt wrote:
| A hyper deflationary asset cannot ever be a proper currency.
| samrus wrote:
| exactly this. these people dont understand that their own
| speculatory practices are what makes this a terrible store
| of value. its unstable, they even have to rely on literal
| stable-coins but they still dont see the problem
|
| for the sake of argument, is there any way to introduce
| monetary policy into crypto currency so as to correct for
| unwanted inflation/deflation? without compromising on its
| decentralization promise
| qqqult wrote:
| > for the sake of argument, is there any way to introduce
| monetary policy into crypto currency so as to correct for
| unwanted inflation/deflation
|
| yeah and you don't even need to change bitcoin - just use
| a stablecoin over-collateralized by BTC built on the
| bticoin network. In essence these systems work with $1 of
| the stablecoin backed by $N dollars (N > 1.6) of the the
| backing asset (BTC). Then they use a smart contract
| system of price oracles, liquidations & interest rate
| curves to balance supply, demand and risk parameters.
| It's pretty much an over-collateralized lending protocol
| that issues its own asset that is pegged to $1
|
| This has worked well for the past 11 years with MakerDAO
| on Ethereum and it's stablecoin DAI. I think at its peak
| the DAI stablecoin had around $7 billion in circulation
| and was about 5-10% the size of USDT, now it's about half
| that. However, high treasury interest rates and low
| interest in decentralized stablecoins have made more
| "traditional" stablecoins like USDT, USDC vastly more
| profitable and successful. In recent times even DAI has
| been trying to become more like USDC and USDT with
| treasuries held in intermediaries
| adultorata wrote:
| You can move $2 billion worth of capital PERMISSIONLESS with a
| click of a button, the only thing you need is the private key,
| are you being disingenuous on purpose or what?
| Synaesthesia wrote:
| Yeah that is awesome, it's great technology but it's still
| not anywhere close to a revolution.
| hx8 wrote:
| > What exactly does bitcoin offer the world today?
|
| Aside from perhaps gold, bitcoin is the most successful
| currency in the world not associated with a central bank and
| state.
|
| It's the most liquid asset that is not issued by a central
| bank. At any point you can issue a transaction to anyone else
| in the world, without the possibility of a third party
| intervention. I've had issues pulling cash out of banks, or
| limited sizes available for money orders, or having debt/credit
| card transactions incorrectly flagged as fraudulent and
| blocked.
| wqaatwt wrote:
| > successful currency
|
| Calling it a currency is a huge stretch. It's an extremely
| successful token/"asset" but it's about as much as a currency
| as gold is these days if not less (based on what most people
| use it for).
| Lerc wrote:
| I wouldn't call it successful as a currency given its state
| at the moment either.
|
| I would say that much of the reason for that is because of
| the perception of the currency that is widely held. It's
| not much good because people think it's not much good. I
| bought a few things online years ago with Bitcoin and it
| worked pretty much the way it should, but most of those
| places that accepted it stopped . Mostly they stopped due
| to the public perception.
|
| I do wonder if it has a chance to become useful once it is
| old enough to not be considered interesting, and the idea
| of holding something while it increases in value dies.
| wqaatwt wrote:
| Even if places accept bitcoin they almost universally
| price their goods in $/EUR/PS/.. meaning that bitcoin is
| only a transfer mechanism. So it's not really a
| "currency" in that situation either.
|
| I mean if somebody accepts precious metals, jewels etc.
| as payment in lieu of actual money that doesn't mean
| those things suddenly become a currency.
| hx8 wrote:
| When I said "most successful" I didn't mean it was a
| complete success, just that this is the best we've done
| without a state. Currencies are hard, history is full of
| them failing. Maybe when an asset is liquid enough, it
| becomes like a currency.
| wqaatwt wrote:
| Gold/silver worked reasonably well for thousands of years
| and unlike bitcoins they functioned as an actual
| currency.
|
| Even if you can pay for stuff with bitcoin it's not a
| currency until people actually start setting prices based
| on it.
|
| > liquid enough
|
| I'm sure I could find people who would accept Apple's
| stock in lieu of actual money, that wouldn't make it a
| currency
| kragen wrote:
| Last week I happened to visit a grocery store that accepts
| Bitcoin payments.
| MangoToupe wrote:
| Huh. Were you in El Salvador by any chance?
| kragen wrote:
| Argentina. I didn't try it because I don't have Lightning
| set up.
| MangoToupe wrote:
| Argentina also makes sense. Solidarity.
| Lerc wrote:
| That's the case where I think it will pick up. If the
| reason for its lack of use is perception based, then
| instances where its utility outweighs perception will
| gain ground.
|
| There are numerous places and times around the world that
| you can look at the situation that occurred and see that
| Bitcoin would have been a boon had it been established at
| that time.
|
| Future instances will exist like that, and perhaps that's
| a good enough role for it to exist on it's own. It can be
| the candle that provides light when the power goes out.
|
| The irony of course that it doesn't work if the power
| goes out, but that's another degree of infrastructure
| damage entirely. It might even be sufficient to ensure
| the power doesn't go out during some crisis.
| kragen wrote:
| Bitcoin in particular can remain operational in extremely
| degraded conditions.
|
| Its relatively long average block interval (10 minutes)
| and strictly limited maximum block size limit the total
| bandwidth requirement for a full node to a few kilobits
| per second, and you can easily run that on a laptop that
| consumes a few watts, easily supplied from a relatively
| inconspicuous solar panel or handheld gasoline generator
| run at a 1% duty cycle. Blockstream supplies a satellite
| feed of the blockchain that requires no internet
| connection, just a groundstation that costs less than a
| laptop and uses slightly more power.
|
| Outbound bandwidth requirements from the place where the
| power has gone out are many orders of magnitude smaller.
| A Bitcoin transaction is a few hundred bytes, so outbound
| bandwidth requirements for transmitting one transaction
| at a time are a few bits per second without adding
| significant delay, and because the transaction is valid
| indefinitely in the absence of double-spending,
| potentially down to a small fraction of a bit per second
| if further delays of hours or days can be tolerated.
|
| Now, it's true that power needs to stay on _somewhere_
| for the miners to keep running, and the miners need to be
| able to transmit their mined blocks to the rest of the
| network fast enough to avoid many orphaned forks, which
| requires bursts of somewhat higher bandwidth. But keeping
| the power on somewhere is much more likely than keeping
| it on everywhere.
|
| I don't understand LN2 well enough to do this kind of
| analysis on it, but I'd expect it to be less tolerant of
| such extreme infrastructure degradation.
| littlestymaar wrote:
| - It's not a currency.
|
| - It can absolutely blocked by third parties (either the
| exchange you use or the mining cartels can).
|
| - in practice its liquidity is tied to the liquidity of the
| "stablecoins" (USDT and the likes) and as such it's not "the
| most liquid" since the liquidity of those stablecoins is
| higher.
| kragen wrote:
| I don't use an exchange, and the mining pools (which are
| not cartels) cannot block a transaction, only delay it
| until a different pool mines a block, typically ten minutes
| later. I don't think this sort of intervention by a pool
| has ever been observed.
|
| The stablecoins you mention are arguably more liquid than
| Bitcoin, but, except for DAI, they're issued by central-
| bank-like institutions such as Binance and Coinbase. You're
| right that they're not officially central banks, but that
| just means you get all the drawbacks of central banks
| without the advantages.
| littlestymaar wrote:
| Without an exchange your bitcoin is not a liquid asset,
| it's even less liquid than most commodity for which there
| are digital exchange marketplace. You can sell it over
| the counter, but that makes it an asset comparable to
| real estate in terms of liquidity.
|
| The fact that the pools haven't intervene until now
| doesn't change the fact that they can definitely do it,
| and would if pressured by governments. Economic sanctions
| using the US dollar weren't a thing until they were.
|
| And you only need to have leverage against 50% of the
| mining power to make that happen, which is pretty
| straightforward given how centralized the power structure
| of bitcoin is (although less centralized than for most
| crypto, for which the developer has full control).
| kragen wrote:
| The other day I walked up to a newsstand and asked the
| newsguy if he wanted to buy US$100 of Bitcoin. He said
| sure, checked the price, did some calculations on his
| cellphone, and proposed an amount including a commission
| for him. I agreed, scanned his QR code on my phone, and
| posted my transaction to the network. I walked to a
| nearby shopping mall to pee, and then saw that the
| transaction was confirmed. I walked back to the
| newsstand. He handed me a US$100 bill.
|
| I didn't sign anything, make any appointments, buy any
| insurance, walk into any offices, present any
| identification, or even tell the guy my name. The total
| time involved was about 20 minutes, but only because I
| wasn't using Lightning. I had a similarly informal and
| short, but more argumentative, experience with the
| previous transaction, at a winery whose owner loudly
| insisted that he hadn't received the money... until he
| realized he was checking the wrong phone.
|
| You are so full of shit comparing this to a real estate
| transaction that I am at a loss for words. You're about
| as full of shit as the winery guy. He, too, was
| blathering all sorts of nonsense at me about Bitcoin that
| showed he didn't have the faintest idea what he was
| talking about.
|
| The scenario you're talking about is a 51% attack where
| big mining pools collude to ensure that nobody else can
| ever mine a block (because it might allow the laundering
| of tainted coins). That would be a global and extremely
| obvious disaster for the Bitcoin network, and it would be
| remedied by whatever measures were necessary to end the
| attack, possibly including a hard fork or strategic
| bombing.
|
| Remember that the world's investor class now has 2
| trillion dollars tied up in Bitcoin, and they do not want
| to see it collapse, and such a successful attack would
| greatly undercut investor confidence in the value of the
| asset. The Bitcoin crowd has enough pull that they
| extracted a pardon for Ross Ulbricht and got a friendly
| SEC head this year. Even before that, when one or another
| pool would grow to the point where it might be able to
| mount a 51% attack, it would get hit by DDoS attacks to
| bring it down.
|
| You're comparing that to a bank declining a credit card
| transaction because you're in another city.
|
| Governments have been pressuring Bitcoin miners for over
| 15 years; it's outright illegal in many countries. The
| hashrate dropped by more than half when the PRC outlawed
| Bitcoin mining. The effect on the functioning of the
| network has been pretty much undetectable.
| Imustaskforhelp wrote:
| See people like you are the reason why I wouldn't even
| want to ever invest in bitcoin because atleast you, are
| so full of yourself that you called someone full of shit
| just because he said that bitcoin is highly illiquid
| which is true.
|
| Your personal experience may be different and we are
| willing to hear it but don't treat it as the final truth.
| I am pretty sure that it was damn awkward asking.
|
| Here I am in my country where I don't even ask for UPI
| payments to cash because its sometimes awkward and this
| guy is loading bitcoin of all things and saying its
| liquid lmaoo and like if it wasn't awkward.
|
| Saying truth cut you so bad that you had to bad mouth the
| other person for the sake of it. Grow up at this point,
| man. This is highly against everything the ethos of
| hacker-news stands for.
| kragen wrote:
| I hope your social anxiety problems improve, but I can
| assure you I don't share them, as you have assumed I do.
| It sounds like you also might not understand what the
| word "liquidity" means in a financial context.
|
| What "cuts" me is not people uttering uncomfortable
| truths but people confidently spewing total bullshit with
| evidently no concern for its truth-value or even
| verisimilitude. It's even worse when it seems to be
| motivated by partisan struggle, as in this case. Both
| confident bullshit and partisan struggle are enormously
| corrosive to the collective epistemic endeavor.
| wqaatwt wrote:
| > He handed me a US$100 bill.
|
| Seems like an extremely inconvenient process and it's
| unlikely you'd easily find that many people to agree to
| this unless without a significant premium (>5-10%).
|
| Also $100 is not a lot.
| kragen wrote:
| I can't imagine what process of transferring cash could
| be _less_ inconvenient than someone handing me a small
| piece of paper? And the commission was less than 5%.
|
| The fact that it wasn't a lot is precisely why this is a
| good example of Bitcoin being more liquid than real
| estate. You can't sell US$100 of real estate, not even
| here in Argentina.
| wqaatwt wrote:
| > can't imagine
|
| Really? You can't imagine any process which would take
| 40x less time than 20 minutes?
|
| Sure bitcoin is more liquid than real estate. That's
| rather obvious and not a particularly high bar. It's not
| particularly liquid compared to actual money or many
| other financial instruments though.
| kragen wrote:
| You seem to be selectively quoting me in a way calculated
| to give the false impression that I said something
| obviously false instead of what I actually did say, which
| was obviously true. What motivates this extremely
| discourteous behavior?
|
| Rebutting the grandparent's claim that Bitcoin was no
| more liquid than real estate was one of the main
| objectives of my comment. I am glad that you agree that
| their claim is obviously false, but I think it's
| unfortunate that you didn't respond to their comment to
| say so.
|
| I agree that Bitcoin is less liquid than dollars, which
| is why I was making the exchange, actually. For other
| financial instruments, it depends on who you are, and
| whether you have an account with a stockbroker. You can't
| open an Interactive Brokers trading account with US$100,
| and it's going to be challenging if you are in Venezuela.
| You are going to have a hard time finding newsstands that
| will accept your SPY shares, but they are more liquid
| than Bitcoin in the sense that, given that IB account,
| you pay much less to convert them into dollars even if
| you have to cross the spread, and if you're willing to
| wait 20 minutes, you have an excellent chance of earning
| the spread instead of paying it.
|
| But none of that compares for convenience with a guy
| handing me a US$100 bill.
| wqaatwt wrote:
| > that Bitcoin was no more liquid than real estate
|
| You did take something that was clearly a hyperbole very
| literally.
| kragen wrote:
| I notice you haven't answered my question. What motivated
| you to treat me in this extremely discourteous way?
|
| We're talking about this quote:
|
| > _Without an exchange your bitcoin is not a liquid
| asset, it 's even less liquid than most commodity for
| which there are digital exchange marketplace. You can
| sell it over the counter, but that makes it an asset
| comparable to real estate in terms of liquidity._
|
| There is nothing in the tone of this utterance that
| suggests that it's joking, sarcastic, or hyperbolic; it's
| a series of apparently serious, sincere, literal claims
| which simply happen to be completely unrelated to
| reality.
| raggles wrote:
| I don't really follow bitcoin, but last I checked over 75% of
| block confirmations came from the top 3-5 mining pools. That
| seems a hell of a lot more centralized than the traditional
| finance system.
| cyphertruck wrote:
| The traditional finance system is that a single central
| bank, owned by a cartel of rich banks- chase, jpm, etc--
| issue the currency, charge us to use it and get first dibs
| on the benefits of monetary inflation -- google "cantillon
| effect".
|
| The now much more diverse mining space is much better than
| completely centralized in one entity current system.
|
| And bitcoin community has a way of working to fix
| weaknesses wherever they find it... there is active
| campaigns to diversify mining, as you pointed out those are
| pools-- and pools are being made obsolete. behind those
| pools are thousands or tens of thousands of mining
| operators, of all sizes, as it's viable at industrial as
| well as individual scale-- many use it to heat their house
| for less than the alternative, the earnings don't have to
| cover the full cost to be beneficial to people.
| Shaanie wrote:
| FED is owned by private corporations?..
| aziaziazi wrote:
| OP mixed the "central bank" as an unique one (it doesn't
| exists, although MFI could be representative for the
| west) and the multiple national ones (FED for the US).
| They arguments doesn't hold as the national ones creates
| money and the are much more numerous and diverse in
| interest around the world than the ~5 bitcoin pools
| mentioned ahead.
|
| The FED is quite powerful and US strongly influence many
| other banks but that's by situation, not by design.
| dotancohen wrote:
| Same could be said for the large bitcoin pools. That
| happened to come about by situation, not by design.
| HumanOstrich wrote:
| Reading your comments is rather painful with all the
| typos. I recommend improving your typing and proofreading
| habits.
| aziaziazi wrote:
| May you point them out? Not English native and I'll be
| glad to improvise my writing.
| Matthyze wrote:
| Googling "Cantillon Effect" gives suprisingly few
| results. Out of the top five results, two are Bitcoin-
| related, one is Reddit, and one is the Wikipedia page of
| Richard Cantillon himself.
|
| The top comment on /r/AskEconomics is:
|
| _" The cantillon effect doesn't really exist in any
| significant capacity. Central banks nowadays announce
| their actions well ahead of time, that means before the
| actual expansion of the money supply, people know this
| expansion will happen, and markets price in that
| expansion. So there really isn't much benefiting from
| being "early"._
|
| _Beyond that there really isn 't much empirical evidence
| on the cantillon effect to exist in any significant
| capacity."_
|
| Since I know little about this topic I'd appreciate HN's
| view.
| zer00eyz wrote:
| Cantillon's essay is not terribly difficult of a read and
| the "Cantillon Effect" has to be the least interesting
| part of it. It and Smiths Wealth of Nations are both free
| on the web and well worth the read.
| whoknowsidont wrote:
| What is the point you're trying to make?
| Angostura wrote:
| Your claim is that European, Canadian, UK, Australian
| central banks are 'owned by Chase, JPM etc'?
| FabHK wrote:
| Nonsense. While thousands of commercial banks are
| formally shareholders of the 12 (not one) Federal Reserve
| Banks,
|
| > the "ownership" of the Reserve Banks by the commercial
| banks is symbolic; they do not exercise the proprietary
| control associated with the concept of ownership nor
| share, beyond the statutory dividend, in Reserve Bank
| "profits." ... Bank ownership and election at the base
| are therefore devoid of substantive significance, despite
| the superficial appearance of private bank control that
| the formal arrangement creates.
|
| https://en.wikipedia.org/wiki/Federal_Reserve#Legal_statu
| s_o...
|
| See also https://www.atlantafed.org/about/federal-
| reserve-system/just...
| diggan wrote:
| > That seems a hell of a lot more centralized than the
| traditional finance system
|
| Most countries/systems have one central bank, even if we
| assume there are only 2 mining pools and they "control the
| network", wouldn't a central bank still be more
| centralized?
|
| Besides, the mining pools don't "own" the network, anyone
| can participate, which kind of makes the whole "more
| centralized than a central bank" argument kind of weak.
| raggles wrote:
| Right, but bitcoin is global, not just for one country.
| And while anyone can participate in theory, in practice
| the big mining pools always get their first. And if a
| quorum of mining pools gets together, they can fork the
| blockchain or do all sorts of other shit. Without those
| mining pools confirming transactions you can't even spend
| your bitcoin. As a functional currency, I just can't see
| how this is any better, like in any way. Probably why it
| hasn't actually become a functional currency and is just
| a traded commodity that everyone is hoping like hell
| won't crash and burn one day.
| MangoToupe wrote:
| > currency
|
| Well given that you basically can't spend bitcoin anywhere,
| it's definitely not a currency.
| diggan wrote:
| > Well given that you basically can't spend bitcoin
| anywhere
|
| Grand statement coming from someone who hasn't been
| _everywhere_.
| tim333 wrote:
| I did manage to use some to buy an eSIM. Still not a very
| good currency.
| anileated wrote:
| The difference between a currency and store of value is not
| an exact line, but however vague that line is it is somewhat
| clear on which side Bitcoin is, and it is not the currency
| side.
| paulryanrogers wrote:
| > At any point you can issue a transaction to anyone else in
| the world, without the possibility of a third party
| intervention.
|
| With KYC and other regulations ramping up, how true is this
| in practice?
|
| I guess you can get some of that benefit with a wallet only
| you control. But most folks can barely handle using a
| custodial wallet.
|
| Transactions are also public by default, for better and
| worse.
| mystified5016 wrote:
| Almost nobody uses it as a currency. The _vast_ majority of
| people cannot buy daily goods, food, gas with bitcoin.
|
| It is an _investment vehicle_ , not a functional currency.
| For most people you can't use it as a currency if you tried.
| jowea wrote:
| > It's the most liquid asset that is not issued by a central
| bank. At any point you can issue a transaction to anyone else
| in the world, without the possibility of a third party
| intervention. I've had issues pulling cash out of banks, or
| limited sizes available for money orders, or having
| debt/credit card transactions incorrectly flagged as
| fraudulent and blocked.
|
| Issuing a transaction may be easy, but I don't think that's
| meaningful when people get hit with issues similar to
| "pulling cash out of banks, or limited sizes available for
| money orders, or having debt/credit card transactions
| incorrectly flagged as fraudulent and blocked" on the on and
| off-ramps.
| karel-3d wrote:
| You can get rich by... having it
|
| Sort of like gold I guess.
|
| I have never figured out "lightning network", their "solution"
| for payments. (bitcoin payments are so impractical that they
| have a different, separate system to use for actual payments,
| that works completely differently.) Seems very convoluted. I
| need to pay a huge fee just to make a channel so I can receive
| anything? And there is something about liquidity? I implemented
| bitcoin stuff and still cannot figure lightning out.
|
| bitcoin is mainly for buying it and looking at a chart.
| omnee wrote:
| You can't get rich with gold. And haven't been able to for a
| long long time. It usually preserves wealth due to its long
| term real rate of return of around zero. But as BTC is new
| enough, the early owners have indeed become very rich.
| p2detar wrote:
| > bitcoin is mainly for buying it and looking at a chart
|
| That's what my broker and many others do. They buy a pool of
| crypto and resell to investors. You don't get a wallet, you
| can't transfer your crypto at all. It just sits there until
| you sell it. The most distilled Hodl practice ever.
|
| edit: typo
| LikesPwsh wrote:
| In the long term everything goes to zero, so an asset that
| pays no dividends but has significant storage costs isn't
| much good for investment.
|
| Bitcoin holders as a group are constantly losing money by
| definition. Some of them cash out at a profit, I suppose.
| FabHK wrote:
| > Bitcoin holders as a group are constantly losing money by
| definition
|
| Modulo market cap representing unrealized PnL, but yes
| otherwise. Miners and exchanges take a good cut.
| hx8 wrote:
| I'm trying to figure out what the significant storage costs
| for bitcoin are. It's a bit higher than a Robin Hood stock
| because it costs fees when buying/selling, but it's
| significantly lower than gold/silver which really require
| some investment in physical security or a vaulting service.
| ahazred8ta wrote:
| It's the _miners_ who are hemorrhaging hard currency. It 's
| currently costing $8-10 billion per year to keep the BTC
| blockchain alive, but blockchain fees are paid when
| transacting, not when HODLing, so it's not a storage cost.
| sipsi wrote:
| it's not made in rust
| Quarrelsome wrote:
| they laugh at the guy who spent 10 bitcoin to buy pizza back in
| the early days, but you can't directly buy pizza today with
| bitcoin.
| cinntaile wrote:
| 10000 bitcoin
| thaumasiotes wrote:
| 10 bitcoin? It was 10,000 bitcoin.
| la_fayette wrote:
| > What exactly does bitcoin offer the world today?
|
| It is a highly reliable, global-scale P2P software system, we
| can analyse, experiment with and learn from.
| edhelas wrote:
| .torrent be like: hold my beer
| FabHK wrote:
| Global scale using 1% of world electricity that can do 7
| transactions per second, because the thousands and thousands
| of nodes don't trust each other and all do the same work.
| Lerc wrote:
| Perhaps another way to think of it, is what would it take to be
| less disillusioned?
|
| What was about it that made you think it might be a good thing?
| Have those aspects gone now or is the problem that there are
| new factors that put you off it?
|
| Most importantly, what could be done to get you back onboard
| with the idea? I'm not really a fan of "Bad thing is bad" and
| like to think in terms of "This thing has a bad aspect, what
| could be done to fix it"
|
| To my mind, I was not expecting Bitcoin to increase in value
| this quickly. Few people probably were. On the other hand if
| the end point of Bitcoin was to replace money, then I can see
| how it would have a high value at that endpoint. That
| presupposes that it reaches that endpoint. The perceived value
| (barring the mood based fluctuations of speculation) depends on
| the proportion of people who believe in that outcome and when
| they think it will occur.
|
| When Bitcoin came out I thought that it was indeed like email
| for money, and that it would take a similar amount of time for
| it to be used by people in general. I figured it would be 20 or
| 30 years before the average person had even heard about it.
| Turns out I was quite wrong there.
|
| I don't think Bitcoin is particularly impressive as an
| investment today, the risk when it comes to retaining value is
| some unknowable but probably quite high. The risk of holding
| and retaining your balance adds another layer to that. For the
| value of the mining reward to stay level with an external
| currency there has to be around a 20% increase per year to keep
| up with the halving. Exceeding that rate is what lead to the
| increase in energy expenditure. While it has increased more
| than that so far, the one rule of exponential growth is that it
| cannot continue forever.
|
| It might have a few doublings left in it, but it is slowing
| down and with a risk level where you could probably find a
| lower risk way to double your money in a similar timeframe.
| Maybe it hits a million, but when? If it takes long enough
| you're better off with an index fund.
|
| Bitcoin sits around $100,000 today, that's way higher than its
| current utility. I feel like the value should represent the
| aggregate impression of where Bitcoin will be in the long term.
| I mostly think this is true and bubbles represent the flow and
| ebb of the faith that has no logical support. I used to think
| that nobody could sustain the delusion of value when it is not
| apparent for many years on end. House prices have led me to
| think that maybe people can pretend that their thing is worth
| more than it actually is for many years without faltering.
|
| I guess the world is in a funny place now. For even an index
| fund to be long term stable, some counties have to continue to
| exist, and people are beginning to have doubts about even that.
| sharperguy wrote:
| Explaining bitcoin to someone who has no interest in it is like
| trying to explain to your mother in law that she should remove
| windows and switch to linux. From their perspective it just
| seems unneccesarry and overcomplicated.
| globular-toast wrote:
| Unnecessary and overcomplicated? Compared to what? Have you
| ever taken out a mortgage? Ever tried to send funds overseas?
| Ever wondered how entire cities are built by the people who
| run the money?
|
| Does your mother in law know what fractional reserve banking
| is? A bank run? Can they explain what happened in the 2008
| financial crisis? No? They why would they need to know how
| Bitcoin works beyond just "trust me, it does"?
| sharperguy wrote:
| It's not the how but the why. If you know you need bitcoin
| you know. If everything seems fine without it why would you
| bother?
| FabHK wrote:
| No mortgages or funding of productive enterprises in crypto
| land anyway.
|
| I have sent money overseas, fast, cheap, securely, with
| fiat.
|
| The externalities of the bad US retail banking system are
| enormous. First we got PayPal with Thiel and Elon, then
| crypto. :-/
| _trampeltier wrote:
| When Bitcoin started, a banc transaction was still like 3 days,
| 5 if there was a weekend in between. Also global transaction.
| Still a lot of countrys have different and strange systems.
| ducksinhats wrote:
| >What exactly does bitcoin offer the world today?
|
| I can tell you down to the day how many bitcoin there will be
| decades from now.
|
| Can you do the same for any fiat currency for next week?
|
| It offers stability and a mathematical escape from very
| fallible humans controlling monetary systems.
| user_7832 wrote:
| But what's the (inherent, or even otherwise) benefit of this?
| torbid wrote:
| If the goal is to hoard a currency itself instead of use it
| as the exchange between real investments then this makes
| perfect sense, but those people shouldn't be upset when we
| tell them we don't directly accept their "currency".
|
| This sentiment models a correction to a complaint I first
| heard with people who tell us everything fell apart since
| we ended the gold standard. They ignore that we raised all
| boats rapidly when we didn't pin everything to governments
| ability to fight gold hoarders for small amounts of gold
| entering the market. Even gold hoarders are better off in
| terms of what the market has created to exchange for their
| gold because that exchange ceased to be limiting on market
| expansion.
|
| One could say the US economy was exponential both before
| and after the currency change, but as with Moore's Law, it
| gets harder to remain exponential if as few as one limiting
| factor is emerging.
| josephg wrote:
| > It offers stability
|
| Hahaha what? Bitcoin has insane volatility.
| lolc wrote:
| Funny thing is, we don't know how many keys are lost. They
| say it's deflationary, and I say it's deflating to zero
| through key attrition. And people pay for burning electricity
| meanwhile. Weird game.
| kragen wrote:
| We know it's not a large fraction, or anyway wasn't a large
| fraction a year ago, because the fraction of all mined
| Bitcoin that hasn't moved in the last year is only about
| 25%.
| lolc wrote:
| Where did you get this number? All I can find is much
| higher, showing more than half of the coins have not been
| moved over a year.
|
| https://en.macromicro.me/charts/32355/bitcoin-supply-
| last-ac...
|
| https://charts.bitbo.io/dormant-coins/
|
| Edit: If I understand correctly around 15% of coins has
| not moved in even ten years. So more than 20% of all the
| mined coins up to mid 2015 have not moved since.
| kragen wrote:
| Maybe I remembered it wrong, or maybe I was just out of
| date. Thanks for the correction! Still, that's basically
| pointing at key attrition being a fairly minor
| phenomenon.
| FabHK wrote:
| People complain about 5% inflation, and you call 20% or
| so of money supply gone "fairly minor"?
| kragen wrote:
| Yes; we're talking about 20% or so over 16 years, which
| is 1.25% per year, four times lower than the 5% per year
| inflation you're saying people complain about. And the
| anecdotal data suggests that that key attrition was
| concentrated in the early years, not just before there
| were Bitcoin ETFs, not just before there were exchanges,
| but before even the Bitcoin pizza.
|
| But the big issue from my point of view is not the actual
| key attrition rate but the _uncertainty_ of the money
| supply, because from my point of view, these are the
| important questions about key attrition:
|
| - If Bitcoin goes to zero, what order of magnitude of
| money will the investor class lose? 200 trillion dollars,
| 20 trillion, 2 trillion, 200 billion, 20 billion, or 2
| billion?
|
| - How much money and power has Bitcoin transferred to its
| early adopters: 2 trillion, 200 billion, 20 billion, 2
| billion, or 200 million?
|
| - How much impact could awakening dormant coins have on
| the market? If Satoshi, or for that matter Hal Finney's
| heir or another early participant, started liquidating
| his early coins, would that be a tenth of the usual daily
| trading volume? Ten times? A hundred times?
|
| Questions like these are why lolc brought up key
| attrition in response to ducksinhats saying, "It offers
| stability and a mathematical escape from very fallible
| humans controlling monetary systems."
|
| A key attrition rate of 99% or 90% to date would result
| in very different answers to these questions. But 20% or
| 50% to date is fairly minor in this context.
| throw101010 wrote:
| Even if it was known and it did tend to zero I don't see
| the issue, Bitcoin is divisible, almost infinitely if you
| count L2s system (e.g. Lightning Network operates on a
| millistaoshi base unit instead of satoshi). Inaccessible
| bitcoins mean that the accessible ones are more rare so
| in a way it benefits other holders this way.
|
| They also serve the network as a form of security bounty,
| let's say tomorrow we discover a way to break encryption
| "soon" pepople will be provided with a path to safer
| addresses but these old addresses, the ones for which a
| public key is known, act as an incentive to look for such
| security flaws.
| wqaatwt wrote:
| Point is that it encourages hoarding money instead of
| engaging in anything that's productive. Technical issues
| are secondary.
| throw101010 wrote:
| Nobody prevents you from spending and replacing bitcoins,
| besides maybe the governments that insist on taxing
| smaller transactions as if it wasn't a currency.
|
| You should ask them why they've generated about 58
| million millionaires and 2,700 billionaires worldwide.
| That's some actual "hoarding" you should be concerned
| about, instead of concern trolling about Bitcoin.
| wqaatwt wrote:
| > Nobody prevents you from spending..bitcoins
|
| Well besides common sense.
|
| If you own a deflationary asset/currency which is
| guaranteed to appreciate as long as the economy is
| growing (well it wouldn't if btc became a global currency
| but that's another matter) there is no reason for you to
| invest into anything unless it offers a
| disproportionately high return (or buy goods/services now
| if you can delay buying them)
|
| It would just reduce risk tolerance for investors and
| increase the real cost of borrowing significantly. That's
| how deflationary currencies work (we know that based on
| several hundreds years worth of empirical evidence).
| throw101010 wrote:
| Did you miss the word "replace" that you have removed in
| your quote?
|
| None of what you said applies to what I have suggested.
| satyrun wrote:
| Not to mention you can't have a robust credit market
| built on top of a deflationary currency.
|
| Imagine you take out a 30 year mortgage in 2025 with 12
| periodic payments of .01 BTC a year.
|
| Imagine offering a 10 year bond that will make quarterly
| payments of .01 BTC. What is the price of this bond? It
| is just a meaningless question practically.
| kragen wrote:
| It sounds like you aren't familiar with the anti-
| deflation argument. I've summarized it in
| https://news.ycombinator.com/item?id=44471609, which you
| will probably want to read.
| account-5 wrote:
| I wouldn't describe bitcoin as stable.
| i_cannot_hack wrote:
| > I can tell you down to the day how many bitcoin there will
| be decades from now.
|
| As this story itself demonstrates, you clearly can't, and it
| already has the potiential to affect markets: "18.04 million
| bitcoin sits in dormant accounts. Sizable inactive accounts
| that wake up after years of dormancy draw investor attention
| because of the potential market impact if those coins are
| sold."
|
| It's impossible for you to know if the accounts are dormant
| intentionally or because the owner has died or lost access -
| and in the latter case the coins are effectively lost or
| destroyed in every practical sense. So you can't even say how
| many usable bitcoins exist at this very moment, and it is
| even more impossible for you to tell exactly how many
| accounts will be lost in the future.
| retube wrote:
| > I can tell you down to the day how many bitcoin there will
| be decades from now
|
| So what? if you say "scarcity", that by itself has no value.
| plenty of things are scarce, but are not valuable, no one
| wants it.
|
| And anyway, bitcoin is not even scarce. there are thousands
| of other coins now, anyone can create one, these will / are
| diluting the $$$ going into btc
| MangoToupe wrote:
| Not to mention this will effectively be an overestimate
| given loss of bitcoin to wallets whose owners lost the key.
| tobias3 wrote:
| That's not completely true. If there is consensus among
| participants (especially exchanges) to change Bitcoin (fork)
| they can do it.
|
| Can't do that with Gold.
| msgodel wrote:
| That would be a different (forked) currency then.
| tobias3 wrote:
| Or it would be Bitcoin classic and have less/no value.
| See ETC vs. ETH. All depends on how many (important)
| market participants use which version.
| OtherShrezzing wrote:
| I don't think it really does offer that escape, now that
| there's so much institutional investment in it. It's
| essentially tied to the decisions of 5 or 6 monetary policy
| committees, in the same way APPL is, because the risk free
| rate from the Fed or ECB is still the most significant factor
| in capital flows.
| chupchap wrote:
| > I can tell you down to the day how many bitcoin there will
| be decades from now.
|
| How does that help, when the value it translates to doesn't
| stay the same? Also the conversion value will be impacted by
| changes in fiat currency.
| FabHK wrote:
| Discretion in money supply is a feature, not a bug.
|
| But yeah, put 1% of your savings in each of the 20,000 coins
| with strictly limited supply. Their value must surely rise,
| right.
| wqaatwt wrote:
| > stability
|
| That's the opposite of stability unless you have an entirely
| static economy with no growth.
|
| Adopting an extremely deflationary asset as a "currency" is
| one way to get the no growth part I suppose. It certainly
| wouldn't be stable.
|
| We've (well some, anyway..) learnt that lesson with the gold
| standard and permanent boom and bust cycles prior to the
| 1930s. It was anything but stable in the short/medium term.
| ur-whale wrote:
| > What exactly does bitcoin offer the world today?
|
| I fully agree that Bitcoin did not become what it was
| originally built for (a currency system for the internet), and
| as a matter of fact, for very valid reasons: -
| custody is really hard, and damn near impossible for most
| people, including people who like to think of themselves
| techies and who all end up getting caught with their pants down
| when exchanges get hacked because they forgot the number one
| tenet of Bitcoin. Please repeat the mantra after me: Not Your
| Keys, Not Your coins. - the 10mn confirm thing is a
| pain for small, casual transactions - scalability
| (it won't and was never designed do what eg VISA can do in
| terms of TX/second) - most people are downright
| horrified when they realize the non-reversibility aspect
| - most people don't understand what money actually is and hot
| it works in the first place, so seeing the advantage of BTC is
| damn near impossible - etc...
|
| HOWEVER: that absolutely does not mean that Bitcoin isn't
| amazing and useful.
|
| Bitcoin has simply become something else entirely, a kind of
| financial instrument that had no equivalent up until now and
| which has turned out to be profoundly useful to a very large
| class of people (go ask USA - one of the country with the worse
| divorce laws on the planet - men in the middle of divorce
| proceeding for their opinion on the topic of assets that can't
| be confiscated).
|
| Oh and yes, I already hear the shouts from the back of the
| room: skirting the law!drug dealers! criminals! cyber-ransoms!
| Won't you think of the children!. One single word to counter
| this argument: there is thing called the USD which is used for
| the exact same thing as all the above "use cases" (and worse,
| like toppling foreign governments) and has never been
| considered evil for some reason.
|
| I do understand and feel for folks who looked forward o Bitcoin
| as a replacement for the dollar, lubricating internet commerce
| and why they are disappointed. I was one of them and it took me
| a long time to understand what Bitcoin actually was.
|
| However, if you fall in the category of the disillusioned,
| please consider: something else will come around to solve the
| problem of internet currency. It won't be Bitcoin. It maybe
| layer two stuff, who knows.
|
| But on the other hand, Bitcoin has become something extremely
| useful (and even without trying to analyze the why, the price
| is an inescapably clear proof of that).
|
| Its singular properties as a financial instrument make it
| something that no other thing in tradfi can boast having:
| - demonstrable finite supply, and therefore a rather
| predictable outcome on a long term timeline. -
| first mover advantage (aka network effect). Other cryptos might
| be better and get better all the time technically, might better
| for the environment, but at this point, displacing BTC in terms
| of mindset and allocated capital ... good luck -
| demonstrated long term hedge against inflation (it's been 15
| years, and if you can afford to ignore volatility at the one
| year scale, it's undeniable). On that topic, I can't NOT post
| this link:
|
| https://www.youtube.com/watch?v=XbZ8zDpX2Mg -
| transactions are impossible to censor, be it by corps or
| sovereign entities (for me personally, the number one
| attractive trait, a basic unbreakable defensive guarantor of
| individual freedom). This goes from simply giving you a ton of
| actual leverage in e.g. a divorce, to being able to work your
| way around tyrannical governments (see the Canadian truckers
| who got all their bank accounts frozen for daring to disagree
| with the thugs in charge). - operates 24/7
| trustlessly and outside any jurisdiction - quasi-
| instantaneous transmission of value across borders,
| geographies, distances, etc ... - pseudonymity and
| privacy. While not perfect in this regard, you neighbor could
| be a freaking multi-billionaire and you wouldn't have the first
| clue. - you can physically disappear and travel
| with *ALL* of your wealth at an instant notice. -
| it cannot be confiscated short of physically torturing the
| relevant information out of you. And even then, you can protect
| yourself by not knowing the full secret to accessing your BTC.
| And this assume people know you have them. - etc
| ... the list is long
|
| TL;DR: Bitcoin won't replace Paypal, and that's actually a good
| thing. It has become an entirely different beast, probably as,
| if not more, useful than what it was designed for originally,
| specifically when it comes to being a tool that protects
| individual freedom against the excesses of the group.
| TheCapeGreek wrote:
| All of the "you can anonymously and safely hold tons of
| wealth that can't be taken from you" points you make fall
| apart when the following two are true:
|
| - For the majority of financial transactions you might want
| to make, fiat is still what you need, because realistically
| very little IRL uses any L2 solution. Thus, you need a fiat
| off-ramp... Like an exchange. - Exchanges mandate you
| identify yourself to them - KYC/AML and all. Governments
| might not be able to know which wallet is yours, but they
| sure as hell can and have secure those off-ramps this way.
|
| I've seen plenty of pro-BTC arguments on a technical level
| about privacy, resilience, independence from central banks,
| etc. but fundamentally I've never seen anyone able to come up
| with something that can out "your opponent is the government
| and no technical project can overcome a legal obstacle".
| gexla wrote:
| This! I was around looking for alternative "currencies" before
| Bitcoin even existed. But they were flawed,because they (such
| as Libertycoin) were shady centralized systems. Each of them
| were shut down by the US government. Bitcoin would have been
| the answer, but I lost interest before it became a thing (or it
| was already a thing and I somehow never come across it, because
| I never saw it as an accepted option.) This would have appealed
| to my geek nature. But I think I would have still lost interest
| in it after finding that Bitcoin also wasn't the answer due to
| difficulty in spending it. I likely would have cashed out at
| like $5 per coin to buy a bunch of pizzas.
| Spacecosmonaut wrote:
| Bitcoin is the only immutable peer to peer system ever created
| (barring advances in quantum computing, and even then the
| protocol can be updated). In a world headed toward web 3.0,
| generative AI content & virtual reality, I think there is
| tremendous value in a trustless and immutable peer to peer
| system. In fact, I think we NEED it, and should as a society
| happily bear the power consumption that underpins the security
| of the network.
|
| Controversial, I know. However, already we cannot trust that a
| digital picture is genuine. There is currently no solution to
| this problem. In the near future, I imagine that the raw data
| of your camera will be associated with a token on a blockchain
| (not bitcoin, but a dedicated high-capacity blockchain). Such a
| system would allow us to determine that a picture was indeed
| taken with a physical device, and thus that the events depicted
| have a bearing in the real world.
|
| My bet is that we are headed toward a future where blockchain
| is ubiquitous. Where everything of value is underpinned by a
| specialized blockchain. When you order groceries, the origin of
| the produce and raw ingredients are all embedded in blockchain.
| In virtual reality, every digital product has a specialized
| blockchain. Every kind of transaction; compute, assets, AI,
| will all be underpinned by trustless peer to peer systems.
|
| All these specialized blockchains trade security for
| throughput. My bet is that Bitcoin will act as a security
| guarantor in our future digital society, where the state of
| every blockchain is periodically validated on the Bitcoin
| network. Thus, I bet that every transaction in the future will
| have an associated Bitcoin cost. Thats why I own a small amount
| of Bitcoin.
| PartiallyTyped wrote:
| Bitcoin is not trustless. It has as much value as the
| collective trust in it. Once that trust disappears, the value
| tanks.
|
| Reality is that you can't bootstrap trust.
| FabHK wrote:
| Not to mention the fact that you can hold Bitcoin
| trustlessly, and you can transfer it to someone else
| trustlessly, but then you have to _trust_ that they send to
| you in return what they promised.
|
| See Goharshady, Amir Kafshdar: _Irrationality, Extortion,
| or Trusted Third-Parties: Why It Is Impossible to Buy and
| Sell Physical Goods Securely on the Blockchain._
| arXiv:2110.09857, arXiv, 19 Oct. 2021. arXiv.org,
| http://arxiv.org/abs/2110.09857.
| PartiallyTyped wrote:
| Thanks a lot for the link!
| MattRix wrote:
| It's not clear to me that most of those use cases will be
| served better by a blockchain rather than a regular
| centralized service... but also examples like the camera
| don't really work, because someone could still use the camera
| to photograph a generated image (for example), or hack the
| camera itself.
|
| On top of that, up until this point in time, Bitcoin has been
| the opposite of secure. The entire history of it is filled
| with people constantly losing money and being scammed with no
| real recourse.
| FabHK wrote:
| > Bitcoin is the only immutable peer to peer system ever
| created
|
| What about the other thousands of other public blockchains,
| many of which are extremely similar (DOGE, BCH, LTC, ...)?
|
| > In a world headed toward web 3.0, generative AI content &
| virtual reality
|
| ... Metaverse anytime now.
|
| > there is tremendous value in a trustless and immutable peer
| to peer system.
|
| Personally, I think there is much more value in trusted
| systems.
|
| > In fact, I think we NEED it
|
| ... because the world didn't work at all prior to 2009?
|
| > and should as a society happily bear the power consumption
|
| In contrast, I think if we were to eliminate Bitcoin and
| other crypto, we'd save 1% of electricity with very few
| negative side effects, but a significant reduction in crime,
| frauds, and scams.
|
| > already we cannot trust that a digital picture is genuine.
|
| Solutions to this problem might well involve digital
| signatures and hardware enclaves in cameras (installed by
| trusted centralized camera producers which could publish the
| public keys of each sold camera once), but I don't see how
| public blockchains would add any value. The signature of the
| picture embedded in the picture speaks for itself.
|
| > My bet is that we are headed toward a future where
| blockchain is ubiquitous.
|
| Gott forbid.
|
| > When you order groceries, the origin of the produce and raw
| ingredients are all embedded in blockchain.
|
| Apart from the fact that I don't see the benefit of that, the
| oracle problem makes this impossible, I fear.
| Spacecosmonaut wrote:
| Let me clarify that I dont think any of what I described is
| a given. I think its one of the more likely outcomes of our
| future. I think its prudent to own a small amount of
| Bitcoin (or basket of cryptocurrencies) in order to hedge
| against that future or someting close to it.
|
| > What about the other thousands of other public
| blockchains, many of which are extremely similar (DOGE,
| BCH, LTC, ...)?
|
| They are simply not as secure and could be attacked by well
| funded actors. Perhaps in time another blockchain will win
| out.
|
| >... Metaverse anytime now.
|
| Just curious. Do we disagree about where this
| (technological progress) is headed, or is it the timeline?
| I think its quite likely that we will spend more and more
| time in vitual or augmented reality. For good or ill.
|
| > Personally, I think there is much more value in trusted
| systems.
|
| I prefer the absence of a central authority. Perhaps im
| cynical.
|
| > ... because the world didn't work at all prior to 2009?
|
| We dont need crypto right now either. I simply think that
| the only good outcome of our digital future is a trustless
| one, and I think blockchain will play a central role there.
|
| > Solutions to this problem might well involve digital
| signatures and hardware enclaves in cameras (installed by
| trusted centralized camera producers which could publish
| the public keys of each sold camera once), but I don't see
| how public blockchains would add any value. The signature
| of the picture embedded in the picture speaks for itself.
|
| The value of blockchain is in the absence of a trusted
| centralized camera producer that can be pressured.
|
| > Apart from the fact that I don't see the benefit of that,
| the oracle problem makes this impossible, I fear.
|
| The oracle problem is solved in the same way the camera
| problem is solved. By digital signatures of real world
| interactions of the machines in the production chain.
|
| I think the world will lean into trustless systems over
| trusted systems, lets see. That is not to say that I dont
| think the world would continue to function on trusted
| systems, I just think it makes dystopian outcomes more
| likely.
| p3rls wrote:
| Facilitates scams and has set consumer web tech back a few
| years, but other than that not much.
| sarbanharble wrote:
| The only answer that makes sense to me is this: BitCoin is a
| scam started by the oil industry as a way to tie currency to
| exponentially hungry power consumption.
| mancerayder wrote:
| Potential?
|
| I am trying to buy a property, and I've been moving money
| around to prepare for a down payment. It's July 4th weekend. I
| initiated some moves in the afternoon of July 3. But an ACH
| transaction in the U.S. takes "1-3 business days." First of
| all, why "1-3" and not "1" or "3" or "2"? Secondly, why
| business days? I get paged at night and on the weekend if
| something breaks at work, but the banking laws or customs say
| that computers only move my money 9-5 during holidays?
| Computers are taking non-human-holidays?
|
| I don't get it. If bitcoin won't disrupt this, something else
| should.
|
| I have been trading it weekly/monthly really simply, and it's a
| few K a month of profit. So I think it's useless at the moment
| other than as a scheme to gamble. I think there's a bit of a
| trust issue.
| yladiz wrote:
| This is a US issue. In the EU you can do an instant bank
| transfer below a certain amount at any time, for free (after
| they mandated the fees away recently), and many other
| countries have systems that allow instant bank transfers. You
| don't need a completely different way of dealing with money
| to get improvements to the current system.
| mancerayder wrote:
| Fair point. I don't know how many years we were behind the
| rest of the civilized world in terms of having chips on our
| credit/debit cards. And we still have the magnetic strip.
|
| Well, we also use "feet" and "cups" instead of base 10
| measurement system.
| r33b33 wrote:
| Ah yes, the dreaded Chinese Quantum Stealth attack.
| dandanua wrote:
| Hm, I can't recall when The Sleeping Beauty was making billions
| of dark money. This is some perverted fairy tale. The sleeping
| beauty is our current world, that allow all the scams,
| launderings, murderings to happen.
| ur-whale wrote:
| I find it amazing how much these type of tech articles exert
| themselves to systematically avoid posting any materially useful
| information.
|
| Do you see a BTC address in there? A link to blockchair? Did I
| somehow miss it?
|
| In fact, I've noticed that this is a systematic trend, not just
| with cryptos.
|
| Most tech. journalists systematically talk about stuff without
| ever posting relevant links to the actual event.
| sizzle wrote:
| I remember getting a slick new GPU card and learned about Bitcoin
| mining with my idle gpu power to collect these Bitcoin worth
| cents, like collecting soda cans for recycling type of $ and
| thought it wad a terrible waste of my idle processing power
| compared to harnessing my idle gpu for the noble cause folding
| proteins at foldingathome.org
|
| I downloaded the bitcoin mining client and everything to see how
| it worked and had some faucets slipping me Bitcoin for free...
| yahoozoo wrote:
| tfw when you spent many Bitcoin on Silk Road back when it was
| only $8 a coin
| ksynwa wrote:
| Someone who is involved in crptocurrency explain this to me. If I
| was this person, could I just sell these bitcoins today and get
| something like $2B in cash? Or is it more complicated than that?
| janandonly wrote:
| Yes. Although selling all at once on a small exchange will not
| give you the best price.
|
| Better to sell lump sum. Or call them to make an over-the-
| counter deal. A lot of ETF companies like Blackrock get their
| coins that way.
| bookerjt wrote:
| Think about it: for you to collect your $2b someone has to be
| willing to give it to you and believe they will get it back in
| the future by buying your bitcoin. Who would do that?
|
| Then you just magically deposit $2b into your bank account?
| Riiiight. That'll set off epic levels of warning lights and in
| the US the feds would be up your ass instantly.
|
| I bet it's a freaking nightmare to sell off that much btc.
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