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Spot Bitcoin ETF receives official approval from the SEC

Octokiddie
171 replies
16h55m

The strong anti-Bitcoin sentiment on HN is still amusing. It goes way back - 13 years or more.

Having read many of these negative comments, I think part of this sentiment boils down to the commenter seeing no point to Bitcoin. Just this thread has examples. It must be more than a little annoying to feel very strongly that Bitcoin is pointless, but to also notice that it's still here. Year after year.

If that shoe were on my foot, in addition to being annoyed I'd be curious about what I was missing.

Bitcoin doesn't have to do something useful for everyone to survive. It doesn't have to "replace fiat." It doesn't have to be a payment system. It doesn't have to "go to the moon." It doesn't even need an ETF. Bitcoin just needs to fill needs (or wants) not met by anything else. They don't even have to be your needs or wants.

Unlike every other attempt at electronic cash that came before it, Bitcoin also doesn't need the approval of any person, police force, legislative body, military, or government. I'd challenge people who hold negative views on Bitcoin to name some other systems for which this holds true.

I think that's the point that a lot of hostile commenters might be missing.

simonw
37 replies
16h53m

What needs and wants is it fulfilling for you?

rafaelero
22 replies
16h27m

Bitcoin is wealth in the cloud. There's immense utility in being able to digitalize your wealth, including higher mobility and, since it is a decentralized network, assurance that it won't be inflated, confiscated and that you will have the freedom to transact it with whoever you want.

epolanski
15 replies
16h19m

Cool.

Going on GitHub and downloading core code and deploying a new coin based on Bitcoin or some other crypto.

I'll call it HackerNewsCoin.

Didn't know it was that simple to create "wealth".

What a foolishness to think that something that has no intrinsic value can constitute wealth. Don't confuse price with value.

It really is true crypto combines all that people don't understand about economy with all that people don't understand about technology.

rafaelero
6 replies
16h17m

What a foolishness to think that something that has no intrinsic value can constitute wealth.

Honestly, I am also amazed that humans make something like that happen. But we do. Otherwise gold wouldn't have so much value.

epolanski
5 replies
16h1m

Gold is crucial in electronics, jewellery, biochemistry.

Also, can't be forked, cloned or replaced by some gold 2.0 with smart contracts or bigger block size.

Seriously, imagine comparing a currency, let alone a cryptocurrency to gold.

Foolishness never ends.

rafaelero
4 replies
15h57m

Gold was a currency and a store of wealth for a long time for multiple societies (even when most of those use cases you listed didn't exist). If only they had the knowledge and wisdom of epolanski from 2024 they wouldn't have made this mistake...

lmm
3 replies
14h33m

Pretty sure that every society that unilaterally adopted gold used it for jewellery first, and only started using it as a currency and store of wealth once its value had already been established.

rafaelero
2 replies
4h9m

Sure, that's because a good piece of jewelry shares the same property of a good money: its scarcity. Gold was introduced to humanity as an ornament, but eventually humans discovered a better use for it.

epolanski
1 replies
2h58m

Sure, that's because a good piece of jewelry shares the same property of a good money: its scarcity.

That is absolutely FALSE.

Good "money" requires a tiny bit of inflation, otherwise there's no incentive into spending, but hoarding.

When people start hoarding money, rather than spending or investing it, economy starts freezing.

Cryptocurrencies are a living example of that: there is absolutely NO incentive into using them to trade, only to hoard them. Why use them today if price goes up? Non sense. Indeed nobody uses them to trade, ever. There's less people spending Bitcoin for goods today, than there was in 2016 when the amount of people in the sector was a magnitude lower.

In fact, even the narrative on websites like Bitcoin's have long moved from the "currency" to the "store of value" argument.

You're compounding many wrong and false information and building an absolutely distorted idea of how money and finance works.

At the end of the day, that's history repeating itself. As wealthy people accumulate real wealth, poor people chase pieces of paper or ridiculous blockchain hashes.

If you're happy, why stop you.

rafaelero
0 replies
2h45m

Good "money" requires a tiny bit of inflation, otherwise there's no incentive into spending, but hoarding.

The only incentive to spending should be your own needs in relation to opportunity costs, not government's mood.

But if you want to give your government that prerogative over your life, feel free to keep using fiat money.

WXLCKNO
3 replies
16h13m

Plenty of people have done that and captured some value. Bitcoin has the most secure network of its type and that has inherent value, it's also perceived to have value by millions of people around the world as opposed to your random fork.

Not sure if you see that it's your understanding of the world that's off here.

epolanski
2 replies
16h5m

You're simply describing consensus, which was the point you missed in my previous post.

Currencies are not wealth, none of them, cryptocurrencies even less.

Money is worthless, rich people don't have money. They have art, companies, land, bonds, cars, boats, airplanes, but very little money.

The financial illiteracy of crypto cultists really has no end.

mxsjoberg
0 replies
14h57m

art is also worthless. crypto and art is basically the same thing

jonkho
0 replies
15h41m

Money is a social construct. Other social constructs are countries and borders. They only exist due to social consensus and is a pure social construct. Social constructs do have real impact on your individual well-being though and should not be trivialized.

mistercheph
1 replies
15h24m

combines all that people don't understand about economy with all that people don't understand about technology

I agree 100% with this but it is describing you.

epolanski
0 replies
8h50m

And you've done an amazing job educating me on where I'm wrong or debating any of my points, haven't you?

ericd
0 replies
13h17m

BTC's value is the massive network securing it, and the trust in the brand's security and resistance to debasement. Its value lives in peoples' head, similar to many other assets.

cesarvarela
0 replies
15h12m

You can also print dollar bills, and they will have no value either.

vasilipupkin
3 replies
16h24m

What does that mean ? Most wealth is in the cloud, you don’t need Bitcoin for this. I don’t have any paper stock certificates.

TimJRobinson
1 replies
14h55m

And yet if you were to visit Iran and attempt to access that wealth you'd quickly discover how little of that wealth is actually yours.

It's not just that it's in the cloud, it's the only form of wealth you can keep digitally AND only you have access and control over it.

Maybe that's fine because you're a good citizen who follows the rules, but some people are born into places where they don't get the privilege of a fair financial system, or the system changes on them.

vasilipupkin
0 replies
4h47m

But all this is circular logic. You can’t say something is valuable because it’s digital. Why is it wealth in the first place is the question. Wealth is something that represents concrete value.

rafaelero
0 replies
16h21m

Not really. Most wealth is based on physical stuff like houses, factories and offices.

gknapp
1 replies
15h54m

These are some interesting points around its value, but it can absolutely be inflated, no? Given that most of our standards of value are tied to fiats, and that Bitcoin's exchange with said fiats is highly variable, the value of your crypto wealth can totally be out of your control.

Fortunately for most bitcoiners who got in early, it's been variable in a positive direction... But not for everyone.

rafaelero
0 replies
15h47m

Value fluctuation is not the same as asset inflation. The first relates to how much confidence people have on using BTC to represent their wealth in a given moment. The second is a decreasing of the asset's value keeping overall confidence constant.

killerstorm
7 replies
16h14m

It provides an alternative to banks.

Once you realize that banks are very fragile and abusive, just having this alternative is important.

Banks can deny you access to your money on a whim. Compliance, glitch, failure, whatever. You can't use your money. You can't buy food. You can't pay rent. You can't buy tickets. You can't hire a lawyer.

It's nice to have something which is based on completely different principles.

reaperman
4 replies
15h43m

I think you'll be amazed at the extent to which BTC will be able to be controlled by strong central governments. I'd be shocked if in ten years there's not granular control over which wallets contain "tainted" bitcoin and cannot be converted to fiat except through actual money laundering. There's been a lot of consolidation of the exchanges in USA, tons of KYC controls in place now, and old-school options like localbitcoins.com or craigslist have disappeared or been nerfed beyond recognizability.

If people no longer "need" to convert BTC to fiat, this would no longer be a point of a control, but until then, governments can already and will continue to grow how much they can control BTC flow.

Some of it is currently very ham-fisted, but there's a clear intent to devalue off-exchange wallets: https://www.coincenter.org/new-crypto-tax-reporting-obligati...

killerstorm
1 replies
5h44m

Well, it's been 15 years.

The question is more like: Are OK with government control?

Reminder - regulators reviewed SVB reports and found them adequate. Then apparently people found it's insolvent. Does it look adequate?

Do you like a system if bank can become insolvent if people withdraw their money?

That's presumably one of most competent countries in the world.

reaperman
0 replies
3h41m

The question is more like: Are OK with government control?

I simply doubt that my opinion, or even that of the majority of the public, would change the outcome of what the government decides to do. They seem to be on a pro-KYC/AML/FINRA/IRS path regardless of public opinion.

hackernudes
0 replies
12h6m

What about the lightning network? Or Liquid sidechain? There are lots of people working on scaling bitcoin so that it can be used like cash (low fees and anonymous).

When a user receives a payment in Cash App or Strike over the lightning network there is no way to track where that bitcoin came from. I haven't really tested that out yet, but I find the idea that bitcoin can be the rails of transferring value pretty compelling. Most people can still transact in fiat but with trustless interoperability between banks and service providers. And of course if people are happy transacting in units of bitcoin it can all be done in a trust-minimized way (with tradeoffs available for convenience, etc...).

But to your point, the government could crack down on the app stores and service providers to not support this kinda stuff.

AlexandrB
0 replies
14h12m

I remember seeing articles related to this from a few years ago. I wonder what's going on under the hood at places like Coinbase.

https://news.bitcoin.com/industry-execs-freshly-minted-virgi...

aurareturn
1 replies
15h40m

That’s a small fraction of BTC holders. The majority don’t care and leave their coins on exchanges, which act like banks but unregulated.

killerstorm
0 replies
5h52m

People can still choose different jurisdiction, or move when they want, etc, etc.

It might surprise you, but it's way easier to open an exchange account than a bank account.

MuffinFlavored
2 replies
16h51m

Me guessing (as somebody who is anti-crypto): they like how it returns ~50-100% year over year pretty much.

I swear I saw some super highly upvoted comments that read as normal + level-headed in r/CryptoCurrnecy that was like "if it goes from $45k -> $100k this year it isn't even that much"

Do you ever hear Warren Buffet saying "122% yearly returns are meh"?

Timber-6539
1 replies
16h39m

Yep, crypto bros will get in bed with the same banks that screwed them over in 2008 if the end goal means that the price of their coin (ahem) bags.. go up.

The whole Bitcoin 'manifesto' and sticking it to the man is just a ruse.

obviouslynew
0 replies
15h35m

Or the technologists that push these open source projects forward were abandoned by the very communities that used to celebrate disruptive technologies.

latchkey
1 replies
16h7m

I've favorited off this comment for a while now:

https://news.ycombinator.com/item?id=26238410

p4ul
0 replies
15h19m

Thank you so much for sharing this! It's definitely an interesting and valuable perspective.

ericd
0 replies
15h46m

Many governments attempt to force their populations to keep their savings in the nation's currency, while aggressively devaluing the currency. The richer people in those countries tend to try to get out of it via other currency holdings in offshore accounts or real estate, but the poorer set don't generally have that option. The ability to opt out of that in a way that's harder to confiscate than eg physical gold/USD is very helpful to those people.

wlesieutre
22 replies
16h12m

The whole premise of burning energy just for “proof of work” is what I hate.

I work in architecture and year after year the industry is pushing to squeeze every last bit of energy efficiency out of everything. Meanwhile bitcoin is like “BURN SOME COAL TO ACCOMPLISH LITERALLY NOTHING USEFUL! AND KEEP DOING IT FOREVER!”

And the crypto people will always bring up “Mining gold just to make gold bars is a waste of energy too” but guess what I don’t buy gold bars either.

jojobas
12 replies
15h49m

That "nothing useful" bit is where you don't get it.

Is Taylor Swift useful? Sex and the City? Options trading for Tesla stock?

You could eliminate 80% of the US service sector for not being useful. "Somebody wants to pay for it" is the best criterion and bitcoin fits.

wlesieutre
10 replies
15h27m

If people want to say “I’m a bitcoin fanboy” to justify it that’d be one thing, but there’s always this insinuation that any day it’s going to find its killer use case that isn’t already solved better by a centralized system instead of only existing to buy in hopes of the price goes up

738292748
6 replies
14h41m

The killer use case has existed from day 1: remove the middleman. That is banks, or goverments. That's it. There's literally nothing else to it. Speculating on its value, while possible, has nothing to do with its purpose.

AlexandrB
3 replies
14h20m

And yet here we are, discussing a Bitcoin ETF, which involves plenty of corporate middlemen and has no benefit to the Bitcoin community besides increasing Bitcoin's speculative value.

jojobas
1 replies
13h59m

You reckon it's a charity to boost bitcoin holders' wealth? The purpose of this ETF is to extract profit, the rest is unintended.

toenail
0 replies
12h50m

Haha, ok, all successful investments are charities.

wlesieutre
0 replies
31m

And I’m sure plenty of other people were buying and holding in exchanges like Coinbase already, instead of buying bitcoins in direct person-to-person cash transactions like the decentralization advocates imagine they will

npoc
1 replies
11h13m

Its purpose is to provide an escape hatch from fiat currency that steals people's wealth, available to everyone in the world, ultimately shutting down the global scam that is central banking.

It is the hardest money that mankind has ever seen, digital, with an issuance schedule that is set in stone - no select few people have the ability to effortlessly print it, stealing the wealth of the rest and corrupting the world at its core, causing third world poverty, endless wars, corrupt media etc.

the_gastropod
0 replies
1h54m

I think its purpose was to provide fresh blood to the John Birch Society. It seems to be working remarkably well, in that respect.

jojobas
2 replies
14h42m

For one, a bitcoin wallet can't be seized by fiat by any 3-letter agency of any country. A fair amount of it is speculative, but unlike a pure-speculative ponzi scheme it's rooted in some appreciation of intrinsic value.

metw02024
1 replies
11h23m

I'm confused by this comment. What do you mean "seized by fiat"? Custodial wallets can and have been seized by government agencies. Cold wallet storage devices can and have been seized. Bitcoin has no intrinsic value, only imputed value.

jojobas
0 replies
9h32m

Nobody can order the bitcoin network to freeze assets of Johnny Wanted the way they can order banks and other financial institutions. Nobody can stop you getting paid even for non-criminal activities the way Mastercard/Visa do.

If you lose or surrender you private key - fair enough, but that's not the same.

Klonoar
0 replies
12h42m

The first two are pure entertainment and hardly a comparison to an attempt at a new banking system.

latchkey
5 replies
15h47m

I work in architecture and year after year the industry is pushing to squeeze every last bit of energy efficiency out of everything.

So is the entire bitcoin mining industry, it is built into their ROI. Have you not noticed the J/Ghash ratio over the years?

AlexandrB
3 replies
14h52m

Have you not noticed the J/Ghash ratio over the years?

This is completely irrelevant because the protocol is designed to scale difficulty with the hashrate. The only benefit of improving J/Ghash is to get a leg up on other bitcoin miners.

latchkey
2 replies
14h30m

If my operation is earning more ROI, that's my benefit.

AlexandrB
1 replies
14h23m

The post you were replying to was talking about conserving energy, not maximizing ROI in a zero-sum game:

I work in architecture and year after year the industry is pushing to squeeze every last bit of energy efficiency out of everything.
latchkey
0 replies
14h18m

Comparing two apples is boring, it is much more fun to throw an orange into the mix.

Ekaros
0 replies
12h8m

So the whole bitcoin network now uses less energy than when it started? As that is what efficiency means.

stickfigure
0 replies
15h32m

Not just mining gold - think of the security required to simply hold gold. Those Brinks trucks aren't free.

mlrtime
0 replies
15h27m

Architecture isn't useful, it's a waist of resources. Every building should be identical, we just need one type of each building usage type, then we can get rid of the architects.

738292748
0 replies
14h43m

Its for keeping the descentralized network secure, which is of extreme value. So no, "literally nothing useful" is utter bullshit.

xpressvideoz
17 replies
16h49m

What you're missing is something can be criticized even if it fulfills some needs. Drugs, gambling, crimes all satisfy some people's needs but most people have negative view on them.

staplers
10 replies
16h20m

  Drugs, gambling, crimes all satisfy some people's needs
I've seen the exact same people crying about Bitcoin's "drug use" then turn around and applaud marijuana and psychedelics for their medicinal effects.

I call bs on the "drug" scapegoat. People are salty they work in tech and don't understand bitcoin.

kemotep
6 replies
16h15m

Is it possible that you can understand bitcoin and still not like it?

obviouslynew
3 replies
15h36m

Sure as long as you realize its simply an opinion and not act like it's a fact that it's bad. Fundamentally it feels like every time these threads open up on HN 70% of it is bad faith, repeat arguments.

Don't like Bitcoin's Proof of work properties, check out Ethereum. Don't think that everything needs to be on one central ledger? Check out Polkadot. It feels like so many commenters here put their heads in the sand about an entire class of technology because they're caught up in their opinion as fact.

lern_too_spel
0 replies
15h25m

I object to Bitcoin on the fact that governments regulate money, so centralization is guaranteed. Wasting any effort on fake decentralization is objectively inferior because it adds to the cost with no benefit.

kemotep
0 replies
14h11m

An opinion backed by mainstream economic consensus but, yes an opinion. I do not need to utilize heterodox models to justify why a hyper deflationary monetary system is a bad idea. I can base this opinion off economic fundamentals and data points showing the negative impacts such a system would have. But you probably understand this, and have justifications for why the positives outweigh the negatives. I don’t reach that opinion and we likely won’t see eye to eye on that point. You probably made this account specifically to push back on the mainstream opinions of cryptocurrencies.

cesarb
0 replies
4h15m

Don't like Bitcoin's Proof of work properties, check out Ethereum.

Ethereum's move to a Proof-of-Stake system was the best thing to happen to the cryptocurrency world, from an ecological point of view; however, that does not change anything about Bitcoin's energy consumption.

Someone who objects to Bitcoin due to its excessive energy use will not stop disliking Bitcoin just because an unrelated cryptocurrency became better.

toenail
0 replies
12h43m

Sure, then you're a person who doesn't like how some people solve some problems with bitcoin. That's fair, you don't have to like that.

etherael
0 replies
15h33m

I understand it perfectly and loathe it, not for the reasons people typically do, but because what it pretends to be able to do it cannot, and actually does the opposite of.

wsatb
0 replies
15h35m

First, re-read the comment you're replying to. They weren't talking about Bitcoin being used for drugs, they compared Bitcoin to drugs and crime, as the OP said all it needs to do is fulfill a need.

Second, the "you just don't understand it" argument is as old as Bitcoin itself. It's tiring. It's not new, it's not crazy complex...it's understood. It's just useless and ripe with scams.

chii
0 replies
15h39m

People are salty they work in tech and don't understand bitcoin.

i smell sour grapes from those people. They saw bitcoin very early on, and gave it the dismissal way back in 2008/9. That missed "opportunity" continues to bias them into thinking that their initial assessment must still be correct (for dismissing it early), otherwise they'd have to admit their dismissal as being hugely mistaken.

aurareturn
0 replies
15h42m

I hate Bitcoin and weed.

block_dagger
5 replies
16h30m

Drugs and gambling do not hurt others. Throwing “crimes” in makes your reasoning weak. Where are you getting your data on the first two? I’m not sure you’re correct.

npunt
1 replies
16h23m

Drugs and gambling do not hurt others.

Please spend like 30 seconds of analytical thinking trying to poke holes in this. It's remarkably easy to disprove. The challenge is what if anything we choose to do about the harms that they can cause.

chii
0 replies
15h37m

Neither drugs nor gambling, in and of itself, harms anyone but the individual doing it.

However, said individual could harm others in the persuit of drugs and gambling when their own income or savings are unable to satisfy their own cravings. But how is that any different from any other forms of harm from crime conducted for other reasons?

epolanski
1 replies
16h24m

Drugs and gambling do not hurt others.

They ruin families, neighborhoods, cities.

Spivak
0 replies
15h47m

If you ever need an example of how drugs genuinely ruin things on a large scale read absolutely anything about the opium wars.

I do contend that "ruining families" is not a thing we should base policy on because it implies both a crazy amount of government intrusion into individual lives and because it imposes rules on everyone to make the nuclear family work.

quickthrowman
0 replies
15h40m

Drugs and gambling do not hurt others.

The bad things people do to other people to get money for drugs and gambling are included in the blanket statement “drugs and gambling”.

neilv
11 replies
15h26m

I think part of this sentiment boils down to the commenter seeing no point to Bitcoin.

I thought cryptocurrency was an interesting and promising idea. But I got away from it around the time it became clear the entire space was overrun by wall-to-wall scamming. And it's safe to disregard anyone who doesn't acknowledge that.

If someone says "Yeah, it's wall-to-wall scamming, and other than that, the main use of it is for organized crime transactions, but there's this silver lining of X", then I might listen to X briefly, even though it seems irrelevant at this point.

If someone doesn't phrase their advocacy with acknowledging the massive BS, then I assume the person is just another scammer (and they might be even if they acknowledge it).

dcolkitt
7 replies
15h13m

I guess what exactly do you define as scamming? In terms of outright fraud, I agree there's a lot. It shouldn't be super surprising that scammers tend to prefer decentralized permissionless financial rails, for the same reason that political extremists and pornographers were some of the biggest earliest users of the decentralized permissionless publishing rails of the early Internet.

But I wouldn't characterize all, or even most of crypto as scams. Gambling, maybe. Are memecoins a scam? I would say they're more like a massively multiplayer form of gambling. Which you might argue is a bad thing, and certainly is dubious from a social standpoint. But if the code is openly public and autonomous, and there's no outright deceit, I don't think gambling is really gambling.

Even beyond that, there's a lot happening in crypto that most certainly isn't scams. You have stablecoins and payment rails like USDC, stores of value like Bitcoin, smart contract chains like Ethereum, decentralized finance applications like permissionless exchanges and lending markets, social applications like farcaster, decentralized AI, and gaming.

Now you might argue that all of these things are stupid and pointless and wastes of money, but that's a separate debate. Of the large projects in these categories almost none are outright scams. They're teams experimenting with new ways to run financial markets or move payments or train models or hedge inflation. Like most technological experiments most will fail. But if that was the criteria for "scam" then the entire startup sector is also wall-to-wall scams.

lmm
5 replies
14h40m

Are memecoins a scam? I would say they're more like a massively multiplayer form of gambling.

They're practically indistinguishable from penny-stock scams, and they almost always involve a bunch of outright lies in their promotional materials; the only reason you can argue that many buyers aren't deceived is because lying is so rampant and expected in that space that people take it as given that the claims are going to be lies, which is hardly an argument that it's a healthy activity.

Even beyond that, there's a lot happening in crypto that most certainly isn't scams. You have stablecoins and payment rails like USDC, stores of value like Bitcoin, smart contract chains like Ethereum, decentralized finance applications like permissionless exchanges and lending markets, social applications like farcaster, decentralized AI, and gaming.

All of which still fails to add up to anything actually working and useful, 15 years in. The best cases people can come up with are sympathetic criminals like people evading capital controls. What minimal practical use of cryptocurrency there was is already in a clear decline; fewer and fewer stores are accepting it for payment, the few efforts at interesting crypto games have already collapsed...

Like most technological experiments most will fail. But if that was the criteria for "scam" then the entire startup sector is also wall-to-wall scams.

There's a big difference between "most" and "all". The startup sector as a whole has enough successes to balance out the failures and end up as positive ROI (and even then, a lot of startups really are scams - just not all of them).

dcolkitt
3 replies
14h21m

All of which still fails to add up to anything actually working and useful, 15 years in.

The first packet switched network came online in 1969. Fifteen years by 1984 almost all the use cases were hobby, and it'd be another ten years before the Internet really started changing life.

Decentralized consensus is a fundamentally new computing primitive, similar to packet switched networks. Developing applications on top of new primitives is hard and long, and there will be a lot of time required just to build out usable infrastructure.

Turing complete smart contracts are only 7 years old. Layer 2 scaling is only two years old. Decentralized exchanges and other on-chain financial contracts about four years old.

the_gastropod
0 replies
12h18m

This is comically ahistorical

lmm
0 replies
13h8m

The first packet switched network came online in 1969. Fifteen years by 1984 almost all the use cases were hobby, and it'd be another ten years before the Internet really started changing life.

By 1980 CompuServe had thousands of paying subscribers, both home and business - and I suspect they'd invested far less getting there than the amount of VC money that's gone into cryptocurrency. You can say the home users were "hobbyists", but they were getting real value out of the network; online chat or games might not have had a clear business purpose, but they were fun, and that's real value.

I've seen literally one niche for cryptocurrency that people seemed to actually enjoy for its own sake rather than as a crime tool or get rich quick scheme, cryptokitties, and that seems to have proven itself fundamentally unviable (either your collectibles are too cheap to be interesting, or they're too expensive to be fun). Cryptocurrency is not merely wildly unprofitable to date, it's not generating value and there is no indication that it ever will generate value.

ivancho
0 replies
13h31m

Except with packet switching networks I can immediately point to the problem they are solving and can also make a guess how things will change when we create 000s of bigger and better ones. And the timeline is definitely not what you are making up here - the 70s had immense development of networks and protocols, every telco was building new networks across the country, it was most certainly not hobby stuff, there just weren't that many computers until the 80s.

What problem are we solving with decentralized consensus? How will things improve if we have a giant one? Say every mobile phone was a part of the consensus mechanism, churning Turing-complete smart contracts. Billions of nodes. What do we get out of that?

ivancho
0 replies
14h11m

I meet some people in crypto occasionally, and it's hilarious that most of them no longer talk about technologies, projects, applications - all they discuss is sentiment. "Oh, there's a wave of positive outlook", or "new patterns of participation are emerging". At least it's honest, I guess, instead of pretending that we are changing the world with DAOs or whatever, they are just sizing up the next bubble.

AlexandrB
0 replies
15h0m

But if the code is openly public and autonomous, and there's no outright deceit, I don't think gambling is really gambling.

But there's plenty of outright deceit. Many (most?) memecoins are some form of pump & dump. It doesn't really matter whether the code is openly public if the winners are chosen ahead of time by pre-allocating tokens.

Edit: Also actual gambling meets your criteria here. While the source code of slot machines is not public, it is typically audited to ensure it offers the odds that are advertised.

baobun
1 replies
15h15m

And yet, you use e-mail?

amjnsx
0 replies
9h45m

And fiat...!

obviouslynew
0 replies
30m

I agree that Bitcoin is that perfect storm of technological and financial obfuscation that's made the ideal air cover for charlatans.

However, organizations contributing to this space are trying to extend the functionality and utility of these technologies. For example, check out Chainlink https://chainlinklabs.com/research,

But if you would like a less self-serving narrative, check out what the WEF https://www.weforum.org/organizations/chainlink/ & SWIFT https://www.swift.com/news-events/press-releases/swift-unloc... think about their decentralized tech.

Other forms of interesting decentralization applications look no further than IPFS & Filecoin. https://protocol.ai/

You're not wrong; there are scams and a lot of snake oil, but don't let that deafen you to what direction thoughtful applied use of the technology can produce.

cornholio
10 replies
15h46m

Bitcoin just needs to fill needs (or wants) not met by anything else.

That want being, in this case, the need to evade financial regulators and easily move large amounts of money untraceable. There is basically no other thing Bitcoin does better than traditional electronic cash, especially with the transaction fees reaching current values.

Is it a legitimate want? It's a complex question involving personal and political values, but let's just say not everyone who objects about crypto does so because they don't understand its real uses.

chii
6 replies
15h42m

move large amounts of money untraceable.

paradoxically, bitcoin is the worse at this, since addresses are completely public. Unless you, like satoshi, keep the coin in the address and never spend it, any conversion to value that you can spend, such as cash, is going to be tracible.

Is it a legitimate want?

yes. Unless you can prove criminality, there's the assumption of innocence.

cornholio
5 replies
15h13m

addresses are completely public.

Addresses in Bitcoin are pseudoanonymous. Many criminals have evaded prosecution for years (for example, the MtGox thieves) despite moving billions in the clear on the blockchain. You are feigning ignorance about the true nature of Bitcoin which is quite obviously designed to enable very strong privacy, as noted by even by its inventor in the original paper; let's not even discuss things like Monero and ZCash.

ivancho
4 replies
14h27m

MtGox thieves evaded prosecution because no one was doing tracing back then. Chainalysis got started specifically to link all their activity and is now a giant graph connecting all the "pseudonymous" addresses. And the thieves laundered most of their stolen coin through exchanges, not chain transactions, strange how they didn't want that very strong privacy. There's none of that left on Bitcoin, it's been indexed, clustered and mapped.

Obviously there are technologies which enable complete privacy - and like tumblers, any that prove popular will be shut down, there's just too many negative externalities.

cornholio
3 replies
11h43m

The state of bitcoin mixers was also very primitive back then, especially given this volume. Today, criminals can use things like the defunct ChipMixer, which distributes private keys funded in advance. So by definition there is nothing in the blockchain to follow, because the handover is done off chain.

The fact that ChipMixer was busted in an international law enforcement operation should indicate to you the nature of the beast. Just like in the case of SilkRoad, there are a myriad copy cats which are still online. It's a small piece of computer code anyone can run. So money laundry on bitcoin to a nearly untraceable level can be done by any service that can setup some kind of network connection and run a bit of computer code.

This is unprecedented in the history of finance and the main practical benefit of Bitcoin other than speculation.

ivancho
2 replies
5h17m

I disagree with pretty much every point here, wow. ChipMixer provided a little bit of disconnect, but there was a research paper a while back that ran something like 5 transfers through it and managed to identify their mixing transactions with 90% precision. Law enforcement is most likely constantly tracking those, similar to how the NSA runs some significant percentage of Tor entry/exit nodes. Second, recognize the enormous amount of trust required here - that the mixer will actually do proper randomization, that there will be a large number of participants, that they won't keep the logs, that they won't just up and leave with all the money. There's plenty of examples of somewhat established mixers that fail on some or all of these, and you're telling me that instead people will just send their money to be mixed by anyone that can setup a network connection and a bit of code?

cornholio
1 replies
4h3m

I'm going to need more context here on the ChipMixer claims. Let's say a tracked party deposits amount A in CM style mixer, and then receives private keys corresponding to amounts B, C, D, E, F, G, previously deposited in the blockchain, which happen to add up to A minus a random 0 to 4% mixing fee. You have full view of A and know that it's being deposited to CM with 100% confidence.

As long as nothing moves on the blockchain, and the trust requirement you mention is fulfilled, I hope you agree that, save from some bug in the implementation, you will have no idea what private keys were received by the original owner of A. It's logically impossible, since CM has already pre-deposited many more other funded private keys (in fact, the entire previous volume of their laundry) and by the definition you don't know which ones of those were disclosed to the client A. The number of combinations is a factorial of the number previous clients, the vast majority you won't know.

So the attack scenario has to be more convoluted than that, perhaps the client immediately consolidates his received keys into a single address, perhaps we assume the attacker has perfect information over all amounts A deposited, which is clearly not practical etc. But that's another discussion altogether that deals with breaking a certain implementation of finding a launderer with a certain behavior. Research papers always make bold claims to raise interest, and often deliver crypto style failures, that require "only" 2^64 attempts, so the system is "broken".

But the issue we debated above - address pseudoanonymity enabling untraceable off chain asset swaps - is already settled if you agree to the second paragraph.

ivancho
0 replies
2h48m

But we don't have to search for those keys in all of the deposits that CM ever made - only in the ones that stopped churning and mixing. Maybe they try to control the dynamics of their lots to be statistically indistinguishable from the withdrawals - but that requires a vastly larger pool of capital and continuous operational effort, and I have a hunch they do not in fact do that.

Furthermore, if you are a client, how long are you willing to keep your money in private keys that you know CM also has? Even if you don't mistrust them, you still need to worry about the exact scenario that happened - they get busted and all their private keys get seized. So chances are those amounts leave the CM network of addresses pretty quickly, even if they don't get added up in a single address. So now all that combinatorial explosion drops down to a pretty tractable k-NN classification problem.

I would advise against making strong statements like "logically impossible" about things that seem to require a lot of very narrow conditions like perfect actor behavior and strong stationarity in order to be true.

obviouslynew
2 replies
15h41m

By your logic then, Signal is just a method for terrorists and child predators to communicate? Do you hold that opinion of Signal?

lmm
0 replies
14h36m

Signal definitely makes life easier for terrorists and child predators; the question is whether it has decent uses whose benefits outweigh that cost. (And, while I'm cautiously in favour of cryptography, I don't think that question is by any means trivial). Cryptocurrency has no such positive use cases; the only case where it has an advantage over regular payment methods is crime.

cornholio
0 replies
15h21m

So you are comparing communication privacy to financial privacy for very large money transfers? As I've said, it's a question of political values, but I think you will find the vast majority of people not sharing that point of view.

Also, unlike Bitcoin, Signal ads strong privacy on top of a very functional base product.

Aunche
10 replies
16h16m

I view Bitcoin the same way I view Herbalife. I don't have any issue with the product. I'm bothered by the misleading claims made by proponents to benefit themselves.

dghlsakjg
6 replies
15h13m

This is really what it comes down to.

I really didn't mind bitcoin before the price exploded, it was a curiosity and interesting experiment.

Since then, it has been used to transfer a lot of wealth using outright fraud, cons, and other criminal means.

I get paid a lot of money (fiat) to program digital payment systems, and have spent time understanding the underlying technology, as well as a holding a degree in economics. I get what crypto is and how it works, and I won't go near it.

Bitcoin isn't inherently dangerous, but the way that the crypto ecosystem convinces people to gamble on a zero sum game they don't understand is absolutely dangerous. For every bitcoin millionaire, there's someone that pumped real dollars into the system. Very real harms have, and continue, to be caused by bitcoin and crypto.

toenail
2 replies
12h52m

For every bitcoin millionaire, there's someone that pumped real dollars into the system

Are you blaming bitcoin for gambling addiction and bad investing now? That's funny. There more of that with the USD, by several orders of magnitude.

dghlsakjg
1 replies
12h24m

Are you blaming bitcoin for gambling addiction and bad investing now?

No. I’m explicitly not blaming bitcoin. I’m blaming the humans that take advantage of others using the technical complexity of the crypto ecosystem to convince people that it is something that it isn’t.

The fact that you can wreck your life in Vegas or day-trading on Robinhood using dollars isn’t something I like either.

The whole point of the sentence you quoted is that bitcoin isn’t some magical wealth creator as it is frequently sold as. It’s to point out that it is a zero sum game; for every dollar someone has gotten out of the system, someone else has put a dollar in.

toenail
0 replies
12h15m

for every dollar someone has gotten out of the system, someone else has put a dollar in.

That's a feature and in the fiat economy the same is almost true. If Bitcoin is a "zero sum game" then fiat is a "negative sum game" for the vast majority of participants whose money is debased.

mlcrypto
2 replies
13h9m

For every boomer retiree there's a young person pumping new money into the S&P and social security

dghlsakjg
1 replies
12h16m

That’s not how stocks work outside of daytrading/short term holding.

My ownership of a stock is a claim on a portion of a company’s assets and future productive addition to the economy. The stock market is a positive sum game. If I buy a share of ABC Gold mining company, it’s because I expect them to dig some actual gold out of the ground and expanding the economy. They can distribute a dividend to me after then selling that gold. No one has added any money to the stock market, but I am wealthier.

npoc
0 replies
10h4m

Same applies to bitcoin - no more net value needs to be invested into bitcoin and the USD price will continue to increase at ~7%, which is the rate at which the USD is being devalued through supply inflation over the last 100 years.

If I lent my bitcoin to ABC Gold Mining like you have, then I could expect to additionally receive interest on my loan.

obviouslynew
1 replies
15h18m

Well Herbalife is a corporate entity, that has governing leadership that you can challenge its 'claims' because the corporate entity makes them, sells it to people who don't know better etc. Conceptually, that means that Herbalife gives people false information, they take that and perpetuate it in their MLM for their benefit.

Bitcoin, is piece of open source software that was released on the internet 13 years ago running all over the world. With no central governing entity, all driven by software consensus mechanisms.

Would you consider that you just don't like some of the organizations that have built themselves around this network making misleading claims? Rather than the technology itself?

Aunche
0 replies
14h34m

I used a leaky analogy, so I'll explain more precisely what I mean. When someone tries to sell their MLM, they pretend that they want to help you get rich, but it's obvious that they just want to help themselves. I get the same vibe from Bitcoin enthusiasts. For example, they'll claim that Bitcoin will help the poor in countries with hyperinflation but that seems disingenuous. Perhaps it's not fair to expect the regular Bitcoin holder to actively help the unbanked thousands of miles away, but there doesn't even seem to be a curiosity in the entire Bitcoin community about whether it's actually it's actually used that way, let alone how to encourage adoption and what the macroeconomic implications of this.

cableshaft
0 replies
15h29m

Perfectly valid view in my opinion. There are a lot of misleading claims out there, to be sure.

clpmsf
7 replies
16h32m

People will always have a want for more ways/things to bet/gamble on - it just seems to be something in our nature.

elif
6 replies
16h1m

The only losers in bitcoin are the ones that stopped. Any 5+ year holding has been ridiculously profitable.

In gambling, the longer you continue, the more certain it is that you will lose. Bitcoin is a uniquely ironic form of gambling if it's gambling at all.

koolba
3 replies
15h48m

We’re still below the all time highs of about $68K so will need 3 more years to see if that theory plays out.

guiambros
1 replies
15h18m

That's silly. Anyone who's dollar cost averaging bitcoin buys over a long period of time has been incredibly well rewarded. BTC is up 146% over the last 12 months, and up 15x (!) over the last 5 years.

Even if you were slow and naïve and only jumped at the 2021 all-time high, and kept buying during the next 12 months (as one should when an asset you like goes down), you'd have made your money back and then some.

koolba
0 replies
14h52m

Dollar cost averaging and “Any 5+ year holding” are not the same thing.

IG_Semmelweiss
0 replies
15h24m

I think timing may not work , but given the strict limited supply, this works in the long term.

Of course, this is highly dependent on the "coin"

czl
1 replies
15h11m

Any 5+ year holding has been ridiculously profitable.

The more remarkable a short history the more likely it is not sustainable: Beanie babies, tulips, etc.

In a zero sum investment for every win there is a loss. Bitcoin however is highly negative sum. For every win there are far more losses. Who do you suppose pays hourly train loads of coal turned into CO2? How many years now?

elif
0 replies
14h22m

Your two examples, beanie babies(4-5 yrs bubble) and tulip mania (16 months) did not even last long enough for a 5 year comparison. Bitcoin is turning 15 this year.

mlcrypto
6 replies
16h31m

It's hard for humans to put ego aside and admit they were wrong. Also hard to put emotion aside and forget the pain of missing out from $100 to $45k.

I think there's still an easy 10X to match Gold and 100X is possible if it becomes the world's preferred reserve asset

epolanski
2 replies
16h12m

Imagine thinking you can prove that an argument is settled due to price movements.

Bitcoin may go to a billion and it won't change the fundamental premise:

You can have ALL the Bitcoin in the world, all of it, and if there's no buyer outside, nobody willing to trade anything for it you have nothing.

Now use the same argument with all the land in US, all the crop in India, all the fish in the Pacific, all the gold in Russia, all the wine in France, all the bakeries in Palermo, all the cars in Sydney.

You farm, you eat, you can make jewellery and tech, you drive.

And yes, it applies to US dollars too (albeit to a minor extent). If nobody wants it you can just stare at dead national heroes on paper, or burn it idk.

Wealth does not come from money, and of all the money, you choose to speculate on the exchange price of a virtual one.

The premise will never change and crypto cultists keep fooling themselves and finding many weak and illiterate to join their ranks.

But any price movement will not change the fundamental issue.

toenail
0 replies
12h47m

Bitcoin may go to a billion and it won't change the fundamental premise:

Haha, bitcoin never even attempted to solve your "fundamental premise", and never made any such promise. Bitcoin is like fiat money in that regard, and different in other regards.

mlcrypto
0 replies
13h20m

Luckily Bitcoin can be sold on a Sunday afternoon at market price with plenty of liquidity in seconds. Good luck lining up a deal like that with the items you listed.

AlexandrB
1 replies
14h16m

I think there's still an easy 10X to match Gold and 100X is possible if it becomes the world's preferred reserve asset

Whats the logic connecting BTC to gold? Why would the two prices be connected in the way you're suggesting?

mlcrypto
0 replies
13h18m

Since gold reached 10 trillion market cap I am very confident BTC will too. Mainly due to the inflation hedge trade

danbruc
0 replies
16h4m

Zero sum money transfer from suckers that think that Bitcoin will one day have a breakthrough or are driven by fear of missing out and greed - of course there is another factor of ten and you also can become rich without doing any work - to early[er] adopters. A pyramid scheme.

1vuio0pswjnm7
5 replies
15h18m

There's probably more comments promoting and defending Bitcoin on HN than ones questioning it.

The question I have is why do commenters feel the need to respond to any comment about Bitcoin that is not a (sometimes subtle) promotion or defense of it.

A reasonable person might think it's because Bitcoin is only valuable if increasingly more and more people buy it. If it's not increasingly popular or if, God forbid, everyone holding Bitcoin were to try to sell, all at once, it's Game Over. (Some folks will lose money and all Hell will break loose.)

If the first statement is false, and Bitcoin is valuable if it's unpopular, then there should be no logical reason why anyone would try to "defend" Bitcoin on HN. Why would anyone care. It's valuable even if no one is buying, right. If it lacks popularity, then this is of no consequence. Ignore it.

Alas, there is no way to test if second statement is true, i.e., it is Game Over if everyone cashes out their Bitcoin, other than this actually happening. Even still, there is no logical reason anyone would need to "defend" Bitcoin on HN if someone else believes this to be true. Why would it matter if other people hold or sell their Bitcoin.

And yet, there are consistently HN voters and commenters who seek to "defend" Bitcoin from anyone who has doubts or asks questions. That, in and of itself, may raise suspicions even more.

"Bitcoin doesn't have to do something useful for everyone to survive. It doesn;t have to "replace fiat". It doesn't have to be a payment system. It doesn't have to "go to the moon". It doesn't even need an ETF."

But somehow it needs to be constantly defended in every electronic discussion. It needs constant promotion. It needs hype.

No one can simply state "I am not interested in Bitcoin" in a discussion without triggering some "response". Regardless of the merits of Bitcoin, or absence of them, that is fscked up. Red flag.

In case anyone gets confused, I am not suggesting that any commenter literally states "I am not interested in Bitcoin" and nothing else. I am using a hypothetical example of a seemingly benign statement to illustrate the idea that _all_ comments about crypto which are not positive are quickly "countered" by Bitcoin true believers. Here is perhaps a better example. Someone states, in so many words, that Bitcoin requires large amounts of electricity. Is this untrue. It is explicitly negative. It seems quite benign yet this sort of comment will almost invariably trigger a "defense". To some, that is a red flag that there is something suspicous about these "arguments" that people feel compelled to make about Bitcoin.

Check out the film "Bitconned" if you can. Slow start but hilarious in the end. What happens when some petty criminals accidentally come in contact with hordes of "true believers". online. If I am not mistaken this was the SEC's first successful prosecution re: crypto.

738292748
2 replies
14h33m

Well yeah, there's no need to defend it. Literally nothing would change. I'm just against bullshit arguments such as

"any random shitcoin did this, therefore BTC goes in the same bag," or

"no! We should absolutely live in a totalitarian dystopia and have governments that track every move we make. God forbid <money launderers> <terrorists> <some other bullshit>"

AlexandrB
1 replies
14h25m

no! We should absolutely live in a totalitarian dystopia and have governments that track every move we make.

Ironically, cryptocurrency will usher in governments tracking every penny we spend since it's all public on a distributed ledger.

1vuio0pswjnm7
0 replies
14h10m

More likely, so-called "tech" companies will be the ones most interested in tracking every move/transaction, a practice already familiar to them, as they can put that information to commercial use, selling online ad services. Unlike the government, they have invested in the infrastructure to gather personal information about citizens and use that information _for profit_. Nor are they bound by the same restrictions on use of collected data from citizens and laws that can potentially protect citizens against government spying. If a government wants the data from "track every move" it's guaranteed they will, to the extent they feel the need, try to have Big Tech provide them with the information they seek. History has shown they have already been quite successful at getting the information they want with Big Tech's assistance. It's only going to get continually easier as more and more information becomes centralised in a few Big Tech companies.

samsin
0 replies
14h57m

No one can simply state "I am not interested in Bitcoin" in a discussion without triggering some "response". Regardless of the merits of Bitcoin, or absence of them, that is fscked up. Red flag.

If the topic is some positive news about a technology (Bitcoin or otherwise), and your only contribution is "I am not interested in this" then you'll probably trigger a response. Might also be time to revisit the commenting guidelines.

TapWaterBandit
0 replies
14h47m

No one can simply state "I am not interested in Bitcoin" in a discussion without triggering some "response". Regardless of the merits of Bitcoin, or absence of them, that is fscked up. Red flag.

Lol this is ridiculous. If you popped up on a hacker news thread about abortion rights and said "I am not interested in abortion rights" would you also say it is a "red flag" regardless of the merits (or lack of merits) of abortion?

If you truly have no interest then lurk. But if you choose to talk (noone is forcing you to!) then don't be surprised at responses.

hn_throwaway_99
4 replies
16h41m

Unlike every other attempt at electronic cash that came before it, Bitcoin also doesn't need the approval of any person, police force, legislative body, military, or government.

But then can't you see the irony of writing that sentence when the article title is literally "Spot Bitcoin ETF receives official approval from the SEC".

That's the thing that's so baffling to me - if you're saying BTC is so great that it doesn't need the support of government and social institutions, why the push so hard to get an ETF (multiple in fact!) when the rallying cry for crypto has always been "distributed, trustless currency".

david_shi
2 replies
16h34m

This is circular reasoning. It doesn't need the approval, what it shows is official capitulation to a "distributed, trustless currency".

That's the big news.

metw02024
0 replies
10h19m

On the contrary... bitcoin desperately needs this approval. The current (and future) price of BTC is absolutely predicated upon the greater fool theory.

The network is dependent on miners. Miners earn bitcoin but spend dollars to create it. They're dependent on price appreciation to provide the liquidity that sustains their business. Without this approval, who is going to continue to pay more for bitcoin?

etherael
0 replies
15h28m

Or what it shows is official acknowledgment that the rubes bought this narrative whilst if you look at the details, it's effectively a CBDC.

psychlops
0 replies
15h35m

It wasn't a push, it was a pull.

stefan_
2 replies
16h42m

It must be peak irony to write this on the topic of a Bitcoin ETF. None of the technology, all of the speculation.

FactKnower69
1 replies
15h39m

What Bitcoin is really missing before it can finally take off is yet another layer of fees and rent seeking; can't wait to pay 1.5%(!) of my portfolio every year in expenses :)

mlrtime
0 replies
15h12m

Blackrock's BTC ETF is .12% for the first year, SPY (The largest ETF) is .09%

You know, if all the BTC haters actually knew what they were talking about we could have intelligent discussions on HN.

miohtama
2 replies
10h58m

Hacker News was pro-crypto circa 2015 when Coinbase launched.

The change of the tone here is mainly because of the changed audience. Hacker News was originally a forum for founders and hackers. Now it is a general forum for salarymen software developers.

zubairq
0 replies
10h15m

I didn’t know that the hacker news demographic had changed so much. Are there any stats on this anywhere or is it a general feeling that you have?

And if so then where do all the hackers hang out now?

tromp
0 replies
9h34m

HN was pro crypto when it was still an interesting new technology. That changed when it became a speculative vehicle and breeding ground for scams.

david_shi
2 replies
16h36m

The OG hacker spirit is still alive in the crypto community

AlexandrB
1 replies
14h44m

The cryptography community, yes. The cryptocurrency community is a bunch of Wall St. bros looking for a new pay day.

david_shi
0 replies
13h42m

The two are more interconnected than you might think.

CPLX
2 replies
16h50m

Not really.

Most people who are observant are well aware that there’s deep and enduring demand for ways to gamble and speculate.

It’s really easy to recognize Bitcoin filling that role like the neighborhood numbers game, pachinko, online poker, and tulip investing all have at various times in history.

We just don’t like it.

waprin
0 replies
16h26m

The gambling known as business looks with austere disfavor upon the business known as gambling.

ric2b
0 replies
16h44m

The tulip bubble is wildly misunderstood, it's actually quite an interesting story about the origin of futures contracts.

It lasted only a few months, there was no long term investing on tulips.

demondemidi
1 replies
12h3m

Nah. You’re over speculating. The real reason for the negative sentiment is that HN is mostly smart people.

lkt
0 replies
11h28m

That's absolutely not the case, HN is mostly people who think they're geniuses because they can program computers. Read the comments on any post about a topic you know a lot about and you'll see it's full of people talking very confidently about things they know very little about. There are of course some very smart people mixed in, but it's hard to pick those people out from the noise.

TheCapeGreek
1 replies
12h50m

Bitcoin also doesn't need the approval of any person, police force, legislative body, military, or government.

If you start from scratch with a non-exchange wallet and get paid in BTC for something to it, sure. But if you want to get in with any fiat, you're going through an exchange, which means KYC, which means you definitely need the approval of the exchange (and by proxy your local government/tax authority).

It was a simple solve by governments to get crypto controlled centrally by proxy for most users this way.

cesarb
0 replies
4h20m

If you start from scratch with a non-exchange wallet and get paid in BTC for something to it, sure.

I believe the original idea was that, to start from scratch, you would just leave the Bitcoin software running on your computer for a while, since that software not only hosted your wallet but also contained a miner. After a while, you would get lucky and receive 50 Bitcoins.

Of course, that stopped working once mining moved to FPGA and then to ASIC; even with GPU mining software, an individual user has no hope of mining any relevant amount of Bitcoin. That bootstrap mechanism is now completely dead, and the only way to get new Bitcoins is to get them from someone, buy them in an exchange, or invest lots of money in specialized Bitcoin mining hardware.

PascLeRasc
1 replies
16h24m

You don't seem as curious as you say you'd be, framing all criticism as hostility or simple antagonism. I don't think you've considered what you're missing not trying to understand why people don't care about bitcoin.

mlrtime
0 replies
15h16m

They care enough to enter every HN thread that has positive news on the industry to shit on it. Valid criticism is fine, but insightful crypto criticism on HN is rare.

Fine, you don't like crypto. Say something new or insightful or skip the comment section.

NicoJuicy
1 replies
16h14m

?

Most of us don't see it as a replacement of cash.

This ETF doesn't mean it's a replacement of cash either.

Just so many people are holding it and there's a lot of money in it, but still less than it's peak. It will probably just go down again without news, as it did before.

It's not that the BTC futures ( since 2018) changed much, I expect a similar end result of this.

Note : I went out in 2017 as I didn't saw it's original purpose being fulfilled and it still isn't after 14 years.

Nobody is talking about paying things with crypto anymore, as far as I know.

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

https://bitcoinmagazine.com/culture/why-bitcoin-failed-in-ca...

It should still be popular for criminal purpose though. But that's Monero and some other privacy coins.

NicoJuicy
0 replies
46m

And as expected.

There was so much hype for the ETF, that there's no interest anymore from others to actually buy crypto ( for now)

yieldcrv
0 replies
15h2m

HN should be a place where bitcoin improvement protocols are routinely discussed

There should have been taproot and schnorr discussions on the frontpage for years

What people are building as betas, there should be ordinals and inscription discussions about their technical implementation

But instead we get these surface level discussions about bitcoin or crypto for over a decade now. People completely missing that there are others who had the exact same information and said “okay this is how I can improve it to more closely fulfill that vision” instead of “harumph! that will never work and I dont like it so there’s that!

the_gastropod
0 replies
15h11m

It must be more than a little annoying to feel very strongly that Bitcoin is pointless, but to also notice that it's still here. Year after year. If that shoe were on my foot, in addition to being annoyed I'd be curious about what I was missing.

There are MLM’s that have been around for over 100 years. I feel strongly that they’re all complete scams, yet they live on. Maybe I’m closed minded for not joining Amway. But I think I’m just being sensible, tbh.

seydor
0 replies
10h45m

hn is all about the vc ecosystem which deals in dollars, so this is understandable. same with banks

paulpauper
0 replies
16h17m

Unlike every other attempt at electronic cash that came before it, Bitcoin also doesn't need the approval of any person, police force, legislative body, military, or government. I'd challenge people who hold negative views on Bitcoin to name some other systems for which this holds true.

For it to be useful it does. How else does one convert from fiat to btc and back again?

lern_too_spel
0 replies
15h30m

Nobody ever said that regulators move quickly. Bitcoin's only advantages come from temporary underregulation. After the regulation catches up, all that is left is the disadvantages.

The idea that Bitcoin can continue to operate with the disapproval of a functioning government is naive.

jron
0 replies
16h25m

"People want you to do well but not better than them."

gonzo41
0 replies
16h8m

Real money, like USD or Pounds etc are social in their construct. People trust them. And they don't like, but will trust banks. btc and other coins are 'trustless', yet hostile to use, and the ecosystem is filled with the most shady people on the planet all looking to scam our parents.

No one really trusts bitcoin. And that's on of the big bitcoin problems.

Also, it doesn't live up to any of it's hype. But others have enumerated all of those faults.

etherael
0 replies
15h46m

Unlike every other attempt at electronic cash that came before it, Bitcoin also doesn't need the approval of any person, police force, legislative body, military, or government. I'd challenge people who hold negative views on Bitcoin to name some other systems for which this holds true.

This isn't actually true, BTC requires a certain amount of subsidy every ten minutes from the global economy. If that subsidy is not forthcoming it ceases to function. That subsidy is constantly increasing in terms of purchasing power.

Further, the regulatory authorities of the world have complete power over the transactions that take place on the ledger, and pretty much full visibility into and out of the ledger when it comes to their controlled fiat currencies.

Neither of the above hold true for many other cryptocurrencies, but I'm not interested in shilling for them, because the entire cryptosphere as a whole is a wretched hive of scum and villainy, largely because of attempts to force the above status quo from BTC onto the remainder, which given the multitude thereof, and the ability for them to endlessly replicate and spawn, is basically doomed to failure.

Note: I am well aware that the popular opinion of BTC is not aware of much of the above, but I didn't say "people believe x" I just said "x".

epolanski
0 replies
16h25m

I'd challenge people who hold negative views on Bitcoin to name some other systems for which this holds true.

Pointless challenge, those aren't good qualities. Also money is worthless, unless you like looking at pieces of paper depicting death national heroes, it's worthless, don't understand why are bitcoiners fixated giving money value.

It's just meant to be traded not hoarded. It had a value when it was pegged to gold. Rich people have companies, real estate, airplanes, art, jewellery, bonds, but relatively little money.

Anyway, literally any other cryptocurrency share these properties. Some even technologically better, yet completely ignored.

cowthulhu
0 replies
10h5m

My struggle with it is mainly that it doesn’t seem to accomplish any of its goals very well, while having really big downsides. A few examples:

It’s difficult to use it for circumventing government controls, since so many of the on and off ramps are subject to regulation and it’s difficult (and expensive) to transact truly anonymously.

It sucks as a store of value since it’s so volatile.

Similar to the point above, it’s increasing subject to government regulation (namely the US) in a de facto sense.

The UX sucks, and mistakes can be super punishing. If you make a mistake then you have no recourse and everyone will applaud the code working as intended, unless the mistake is really big in which case the “code as law” folks will fork the network to rollback the mistake.

In the same vein as the item above, scams are rampart and there is very little recourse once scammed. As a result, it’s tough to see actual widespread adoption as a currency (and not just a speculative asset sitting in a brokerage account somewhere) since the level of technical sophistication needed to use it as a currency without risking wiping yourself out puts it way out of reach of most people.

It sucks for transactions, since the fees are so high and make small transactions bit feasible.

Proof of work sucks and is super wasteful.

There are probably plenty of other ways it misses the mark I’m missing as well. It frustrates me because it feels so fatally flawed, but people take it so seriously. If popular sentiment was that BTC was just a fun thing to speculate on, in the same realm as TSLA or buying short dated calls on the VIX, I would be totally on board! But trying to act like it’s a serious currency that can compete with USD or whatever just seems somewhat delusional. I think blockchain and ETH style smart contracts are super cool tech, and could have super productive applications that legitimately make the world a better, more efficient place, but BTC in its current form doesn’t check that box for me.

chpatrick
0 replies
14h59m

I think a big component is definitely the bitterness that comes from tech savvy people being aware of when it was just getting started and watching it go from pennies to tens of thousands without buying any. I remember when it was on Slashdot all the time in the late 2000s, the hivemind agreed that it would never lead anywhere, and so I dismissed it as well. There were even Bitcoin Faucet sites where you could go and just get 5 BTC for free, no questions asked.

I still don't own any and don't want to, but there is the demon at the back of my head telling me that I could've just mined some or clicked the button on the faucet. After all we all knew about it. I know that most people wouldn't have held onto it for 14 years, but it's not a rational feeling.

738292748
0 replies
14h46m

This, 100%. Bitcoin has proven its value already, and it's the only tool we have against authoritarian governments that print money and steal as much as possible with taxes. You can ask people in Argentina or Venezuela about that.

pavlov
124 replies
11h42m

My prediction is that Bitcoin will become fully institutionalized within twenty years, to the point that the “Bitcoin” held by investors are entirely disconnected from the theoretical blockchain.

A similar thing happened with stocks. Not so long ago they used to be physical pieces of paper. You could trade shares peer-to-peer and even anonymously by handing over the share certificate to someone in person. For dividends, there was a coupon that you could cut off with scissors and use to claim the income.

Imagine you show up today at a Charles Schwab office with a 1977 Apple Computer stock certificate, and ask to sell it. That piece of paper is theoretically worth more than a Bitcoin (thanks to stock splits). But the Schwab branch surely won’t buy it, they’ll send you away. Getting your piece of paper recognized as stock that you can actually trade in modern systems is a separate process.

That’s how it will be with Bitcoin in 2050. You contact Coinbase’s customer service AI and tell them you have an actual Bitcoin on the chain and you’d like to sell it. They’ll politely redirect you to the compliance department that will inform you that it may take up to six months to verify the provenance of your quaint original Bitcoin that’s not registered in the modern custodial systems - assuming your coin has no history with mixers and other addresses of interest to law enforcement, of course.

roenxi
85 replies
11h9m

The possibility of change exists, but one of the hardest promises Bitcoin makes is that you can't change the rules mid-game like what happened with stocks. That is one of the most attractive things about this asset class - if the US regulators want to change how a crypto is traded ... tough biscuits. They have to convince the market participants, globally, to trade the new way. The bar might be orders of magnitude higher than for getting rid of stock certificates.

People underestimate, I think, how much nudging happens at the institutional level which cryptocurrencies might shut down. It is a really exciting experiment from that perspective.

Nursie
34 replies
10h1m

if the US regulators want to change how a crypto is traded ... tough biscuits

They can happily regulate on and off ramps, and enforce traceability etc for anything that touches the 'real' economy though, should they wish.

npoc
27 replies
8h57m

Decentralised exchanges provide a solution, but if a country tries to stifle bitcoin like this, then the bitcoiners can just leave and live somewhere else, taking their wealth with them as 12 words in their head.

History shows that societies with the hardest money win.

amanaplanacanal
15 replies
8h44m

History shows that societies with the hardest money win.

I think I’d like that to be true, but I don’t see much evidence of it. Do you have some examples?

npoc
14 replies
8h26m

The simple fact that there's no societies left using shells, beads, Rai stones, etc. Only the hardest money survived - gold.

However although gold is hard, it fair to say that it was beaten somewhat by soft fiat money, simply due to the overwhelmingly better other monetary qualities of fiat (e.g. portability and divisibility) especially in the digital age.

Bitcoin is a hard money that takes the best monetary qualities of both fiat and gold, improves them, and combines them into a single asset with which neither fiat or gold (or shells or beads for that matter) can compete.

It would have been more accurate for me to have said "societies with the _best_ money win"

RandomLensman
8 replies
8h14m

What does it means that a society "wins"?

Gold isn't money - it's a commodity. It isn't even a great store of value over that last thousand years or so.

npoc
7 replies
7h54m

What does it means that a society "wins"?

It grows stronger/more efficient compared to others.

Gold isn't money - it's a commodity. It isn't even a great store of value over that last thousand years or so.

I don't want to argue semantics, but yes gold certainly isn't great at storing value - its supply doubles every 40 years and over the last 100+ years has been slowly demonetised as economic value moved into fiat.

RandomLensman
6 replies
7h47m

"Stronger" is tricky to measure. "Efficient" is bit better to measure. The introduction of standardized (and "policed") coins certainly opened up commerce a few thousand years back, but in the end it did not stop the Romans from taking over the Greek world, for example.

There is a lot more to societies than money. Can you do huge damage to societies from hyperinflation - for sure, but outside of catastrophic failures of money, not so sure there is a strong link.

npoc
5 replies
7h20m

The introduction of standardized (and "policed") coins certainly opened up commerce a few thousand years back, but in the end it did not stop the Romans from taking over the Greek world, for example.

Yes I'm assuming all else equal or when studied over a long period of time. Nowadays we can use our knowledge and intelligence to simply start using better money in advance.

Can you do huge damage to societies from hyperinflation - for sure, but outside of catastrophic failures of money, not so sure there is a strong link.

I don't think you appreciate the damage that has already been caused by fiat. Look at USA, the UK and compare them to just 50 years ago. We think we are rich but it's just an illusion caused by devalued money. An average man used to be able to own a home, and support a wife and kids on his salary. Those days are long gone. The bankers are unjustly getting more and more powerful (far more powerful than the governments) while the people are becoming weaker and weaker.

RandomLensman
4 replies
7h14m

People are using it in advance, for example, by holding equity and other assets. Those who just want to store value in money haven't quite understood an economic system that isn't design to store but rather to produce.

I struggle to see shifts in earning power as a fiat issue. Why isn't it weaker unions in the US or UK, for example? Why not (de-)regulation or any other long list of things. The shifts in power are not a result of fiat or devaluation (why were only a few powerful in times with very hard money?). You can have places where less GDP is in the financial sector and still lower earnings cohorts had a miserable history (or even the median earner). Germany has a rather smaller banking sector than the US, but real earnings over that last 25 years have only moved a little (so has productivity).

The hope that somehow by changing the money a complex set of problems goes away is in error, I believe, and not helpful in addressing those issues. (You can also look at monetary reforms and see that those didn't magically solve all problems.)

npoc
3 replies
6h34m

The underlying cause is the illusion created by fiat. It's a trick.

People have been unknowingly getting pay cuts each year for the last 50+ years. They are unaware because they receive more currency units each year and are still able to afford the same everyday consumables.

They don't realise that the consumables have been getting cheaper and cheaper over the decades (through efficiencies of production) because currency devaluation causes prices to actually go up.

It's only when they try to buy hard assets like real estate that have retained their value and find them impossibly expensive, without understanding why.

Then you've got all the devalued pensions and savings, and other stealth wealth transfer through "capital gains" tax (the more the bankers print themselves money to lend out, the capital gains tax we have to pay) and income tax bands that don't track nominal wage increases etc.

GDP appears to increase, but it's just an illusion caused by the devaluation of the units it's measured in. In the US it has been going down for decades.

It is a slow transfer of wealth from the population to the bankers. People work harder, but find themselves increasingly struggling to survive. They become unmotivated and ultimately when the deterioration in living standards becomes too much, revolt.

And that's only within the country that's printing the money. For other countries using that currency, the effect is even worse as the entire country is stealthily looted.

All the time, the bankers are acquiring all this wealth and are becoming richer and more powerful than many people could imagine. Able to control governments and mass media alike.

This is why Satoshi Nakamoto created bitcoin.

RandomLensman
2 replies
6h19m

People certainly were and are not unaware.

Also, certainly it is not the bankers that are the super rich or even in control etc. (Btw., that also holds for the gilded age in terms of wealth).

npoc
1 replies
4h54m

A few people, most not. The vast, vast majority people think real estate in the US has gone up in value over the last 50 years.

Well the banks are collecting interest on every single dollar in existence. All created by them out of thin air. Currently that's in the region of $80T and it's been going in for decades, centuries even.

https://www.usdebtclock.org/

RandomLensman
0 replies
4h37m

US banks' net interest income is quite a bit lower, more like $700B per annum currently (https://fred.stlouisfed.org/series/QBPQYNTIY#).

As far as house price inflation is concerned, depending on what your basket is, prices increased quite a bit more than the CPI basket (so up in value), if you hold the S&P next to it, not do much difference.

qwytw
4 replies
8h19m

Bitcoin is a hard money that takes the best monetary qualities of both fiat and gold

Not it doesen't. Also bitcoin is not money (why do people keep claiming this?), it's a speculative asset.

npoc
3 replies
7h6m

Not it doesen't.

Okay

qwytw
2 replies
6h21m

Why would you expect anyone to waste time making any substantive arguments against silly claims like "Bitcoin is money"..

mlrtime
1 replies
5h14m

"Money is any item or verifiable record that is generally accepted as payment for goods and services and repayment of debts, such as taxes, in a particular country or socio-economic context.[1][2][3] The primary functions which distinguish money are: medium of exchange, a unit of account, a store of value and sometimes, a standard of deferred payment."

I have purchased items and payed off loans using BTC. So have millions of other people. You calling it not money doesn't make it so. Sorry.

amanaplanacanal
0 replies
4h0m

It’s certainly not “generally accepted”. There are very few places that accept it. I don’t know any retailer that would accept it where I live, though there must be at least a few. I can’t use it for repayment of debts or taxes.

qwytw
10 replies
8h21m

just leave and live somewhere else, taking their wealth with

Wealth can't really use to purchase anything with is not real wealth. If you can't convert bitcoin to $/€ it becomes effectively worthless

History shows that societies with the hardest money win.

Objectively not true. Look at what happened with Britain after 1918 when tried doing everything they could to stick with "hard" money and avoid devaluation/dropping the gold standard.

npoc
2 replies
7h49m

You can always convert bitcoin to fiat and vice versa. Other countries/currencies exist and regardless, we have decentralised exchanges like Bisq.

Look at what happened with Britain after 1918 when tried doing everything they could to stick with "hard" money and avoid devaluation/dropping the gold standard.

Soft money wins in the short term. Hard money wins in the long term.

qwytw
1 replies
6h15m

Soft money wins in the short term. Hard money wins in the long term.

What do you mean by that? Repeatedly saying the same thing multiple times doesn't make it any more accurate. The type of "hard" money you're talking about only work in mostly static economies with untrustworthy and ineffective governments, under other conditions it inhibits growth and causes all sort of economic instability and much deeper boom and bust cycles (mainly for the "bust" part, Fiat money is the opposite).

It "wins in the long term" because it's sort of a fallback option when there are no other alternatives (i.e. most of human history) but far from the optimal one.

npoc
0 replies
5h19m

Soft money is like a credit card that takes money from the population without them realising. You can use this money to produce a short term effort but you (or should I say, _they_) pay the consequences later. Just look at what has happened to most of the west over the last 50 years.

Hard money is fair money. Populations thrive when built on a fair foundations.

Does the stealth taking of my wealth and giving it to the bankers benefit or harm society?

fidelramos
2 replies
8h7m

Wealth can't really use to purchase anything with is not real wealth. If you can't convert bitcoin to $/€ it becomes effectively worthless

I agree, that is why Bitcoin was supposed to be electronic cash, you were supposed to be able to pay for everything with it.

Bitcoin (BTC) doesn't scale today to this purpose, but you can still use it to pay directly for some products and services as long as the other party will accept it. For those wanting Fiat money you could exchange BTC to stablecoins, even in a decentralized way like with ThorChain [0].

What's missing is some seamless bridge between stablecoins and Fiat payment methods and bank accounts. Then you could pay for anything. However I would argue that Bitcoin was meant to become the payment method, as Satoshi Nakamoto described in the whitepaper [1].

[0] https://thorchain.com/

[1] https://www.bitcoin.com/satoshi-archive/whitepaper/

qwytw
0 replies
6h13m

pay directly for some products and services as long as the other party will accept it.

You can but generally you don't want to. Besides the technical issues it's a very volatile asset which means that you don't want to hold it for any extended period of time (IF you're only using it to pay for stuff).

liaukovv
0 replies
5h29m

And how would seller pay taxes? They didnt get any fiat, they can't off-ramp it presumably(otherwise buyer would have done it), and now guy with a gun comes and demands his share, what happens?

JustinGoldberg9
1 replies
6h7m

They didn't try to stick with the Gold standard. They secretly left it altogether, while robbing its value to anyome buying bonds. Post WWI, they tried to stop gold from leaving Britain, which had the effect of hastening it leaving :-)

You could say that they would have lost WWI without leaving the gold standard (other world governments followed suit by leaving the gold standard after Britain did) but imho the war would have ended sooner. Lyn Alden talks and writes about this quite a bit in her books and blog.

qwytw
0 replies
5h41m

they would have lost WWI without leaving the gold standard (other

I mainly meant their attempts to get back on the gold standard in the 1920s. Unlike e.g. France and the other European countries which didn't really have a choice and had to devalute. It put Britain industry and economy at a disadvantage during the 20s (on the brightside Britain didn't suffer from the Great Depression as much..).

e.g. between 1910 and 1930 inflation in Britain only averaged 3.0%.

And between 1920 and 1930 it was negative (with 3.7% deflation, which is huge..) while the Franc lost ~50% of its value during those years.

As a consequence in Britain unemployment stayed high and there was hardly any growth in the 1920s. While France recovered much faster despite suffering much more during WW1: https://cdn.theatlantic.com/media/mt/business/112712krugman2...

JustinGoldberg9
1 replies
6h8m

Bitcoin is the ultimate answer to the coincidence of wants (of which money arose from).

"You have some pigs and I have some chickens, but I don't want pigs right now"

On top of that, it is the first global currency, that is internet native. It's an upgrade like going from papyrus/parchment to the printing press. The first printing presses were smuggled throughout Europe. But hey, stick with your evil fiat holy roman empire that steals from you. Don't ever question why inflation exists.

Don't want to give out your credit card to an untrustworthy or unknown website, but you still want to buy their ebook? Use Bitcoin. With credit cards, the private keys are used in every transaction.

Wytwwww
0 replies
5h33m

Don't want to give out your credit card to an untrustworthy or unknown website

Or you know... switch to a bank that allows you to get an unique card number for any transaction with a click of a button. Or use SEPA, or many other similar alternatives which (and I'm not overstating this) are 100-1000 times more efficient that Bitcoin.

AnthonyMouse
5 replies
8h16m

They can happily regulate on and off ramps, and enforce traceability etc for anything that touches the 'real' economy though, should they wish.

But what good is that? All you get is traceability for people with nothing to hide. You can't actually prevent on and off ramps because anybody could go to the black market digital currency dealer (whose operations are conveniently situated near the local drug dealer) and exchange digital currency for anything that can be easily pawned, or cash, and the people you'd actually be interested in tracing just do that.

Which makes the KYC/AML rules de facto optional for anyone already breaking the law, but you're still inconveniencing anyone abiding the law because you e.g. can't have an anonymous vending machine because the machine would be required by law to verify your identity before accepting your money. Which is ridiculous when the vending machine sells candy bars and perverse when it sells contraceptives.

Nursie
3 replies
7h20m

That Bitcoin becomes un-resellable as it has gone through un-sanctioned addresses.

roenxi
0 replies
6h30m

No argument there; but if you're interested the tech does exist to solve that problem. https://www.getmonero.org/ . It is obfuscated to the point where transactions and ownership can't be tracked.

genge
0 replies
6h33m

How exactly would it become un-ressellable. Agreed, you would have to remain in the black market, but you cannot censor a transaction.

JustinGoldberg9
0 replies
6h18m

There will always be other exchanges or micro exchanges or something like lightning stores which will accept the tainted Bitcoin.

_heimdall
0 replies
5h34m

All you get is traceability for people with nothing to hide

Have we officially abandoned the original goal of privacy/anonymity with bitcoin? Privacy isn't only a good thing when you have something to hide.

You can't actually prevent on and off ramps because anybody could go to the black market

On and off ramps are generally meant to only include the legal avenues for buying and selling bitcoin. The government can absolutely regulate those, the black market is a separate concept. If you are left only with black market trades, the available market for the currency is drastically reduced and the potential value would be a fraction if what it otherwise could be.

pyvpx
30 replies
10h6m

this assumes USD hegemony is a distant memory. does bitcoin have the largest weapons cache and standing military in the history of humanity?

best of luck to your imagined future; but it reads very naive to me.

amjnsx
16 replies
10h3m

So what, it's "play by our rules or get bombed" ?

ibz
14 replies
9h58m

It is. It always was.

npoc
13 replies
9h3m

Bitcoin equalises this. USD is going to hyper-inflate to 0 relative to bitcoin, and bitcoin will ultimately be the world reserve asset.

qwytw
7 replies
8h24m

world reserve asset.

Except it's extremely unsuited for this purpose despite of what some delusional people might be thinking. No (at at least semi stable) country ever will use bitcoin as their primary reserve asset...

npoc
5 replies
7h45m

Because you say so?

qwytw
4 replies
6h11m

My argument is just as substantive as the pro-bitcoin ones and spending any meaningful amount of effort arguing with these people is just like fighting windmills.

But no, not because I say so but because it's obvious if you have at least a cursory understanding of the international monetary system works.

npoc
3 replies
5h43m

Fair enough - your "no" vote is duly counted.

But no, not because I say so but because it's obvious

Okay, so not because you say so but because you think so :)

qwytw
2 replies
5h36m

Okay, so not because you say so but because you think so :)

Well.. I mean it's a bit like the "climate change is fake" or "5G causes cancer" people. Getting into a serious argument with them only legitimizes their viewpoints and makes them seem just as valid for not good reason..

peyton
0 replies
2h21m

You can build a monetary system atop Bitcoin using convertibility. I don’t see what’s so crazy about that. I mean, right now I get paid in fiat controlled by septuagenarians that’s guaranteed to lose value unless I use it to buy assets they own. Plus they tax half. It’s a pretty bad deal for most people.

ForkMeOnTinder
0 replies
5h18m

- climate change is fake

- 5G causes cancer

- bitcoin is a scam

Your substantive and well-reasoned argument fits right in with that list ;)

JustinGoldberg9
0 replies
6h22m

John Nash has a great essay which predicted Bitcoin.

https://onlinelibrary.wiley.com/doi/abs/10.1002/j.2325-8012....

bobim
4 replies
8h47m

And mostly all in the pockets of a few whales.

pixelpoet
3 replies
6h45m

As opposed to the US dollar, or euro, or ruble or ...?

I will never understand how people fault crypto for not somehow magically solving the world's financial ills, as if humanity has ever had another (successful) plan for wealth distribution. How's that communism working out?

Crypto is meant to solve the trustless distributed ledger problem, nothing more, nothing less. Expecting human nature to somehow change because of this technology is ridiculous.

bobim
2 replies
6h13m

Exactly the point, it’s not bringing any value to the society beyond what any currency is already providing.

pixelpoet
1 replies
5h41m

Simply asserting something doesn't make it true; concretely, before crypto, we had no means to trustlessly distribute a ledger, now we do and could start working towards a practical solution that doesn't let random banks and governments mess with currencies as much as they like. I'm not an economist but that seems like a pretty big deal.

I'm not a bitcoin proponent by the way, and am well aware that it has massive downsides like the proof of work energy usage (addressed by proof of stake but often ignored because of bitcoin always taking the spotlight). I'm just sick of people naysaying without understanding the fundamental problem it actually does solve, and pretending there's no value or potential in the technology at all.

npoc
0 replies
5h31m

Proof of stake is not really any different to fiat.

History has proven time and time again that sound money requires equivalent work to create.

gpderetta
0 replies
9h3m
roenxi
10 replies
9h5m

The US really dropped the hammer on Russia last year and yet Russian troops kept advancing. There isn't much proof-in-the-pudding right now that they can stop a top-10 global economy. This isn't the 90s and it isn't clear how much the US can throw their weight around.

qwytw
3 replies
8h26m

Russian troops kept advancing

Did they? The war is in a stalemate. Militarily this isn't that different than the proxy wars of the Cold War EXCEPT Russia has suffered more casualties by a magnitude or two than the USSR did in Afghanistan or the US in Vietnam. For the Russian regime this war is now 100% an existential threat.

For the US from an entirely a real-politik point of view, if the end goal is to defeat Russia dragging the war on might even be a preferable option. After this is over Russian will be militarily crippled for the next 10-20 years due to massive and unsustainable manpower and economic costs. The balance of power will tip even further towards NATO making any further Russian expansion in Eastern Europe impossible (especially now that Finland and Sweden have joined).

Of course Ukraine is caught in between...

roenxi
2 replies
6h51m

For the Russian regime this war is now 100% an existential threat.

For everyone this war is an existential threat. It is unusual for governments that come in after a revolution to be more stable than their predecessors and any successor to Putin will still have the worlds largest nuclear weapons stockpile. There is an outside chance of a literal replay of Germany WWI -> WWII if the Russians collapse. Not to mention the risk of armageddon from the current war; I'd still expect to get another Able Archer style story to add to the near misses out of this conflict.

And from a realpolitik perspective, sure the US is coming off better than Russia here. But the US isn't coming off well; it's military looks a bit wheezy through all this. If they can't deter the world's 11th largest economy from going to war in NATO's sphere of influence; what can they deter? If they can't muster the resources to turn back the Russians in 2023, what are they going to be able to pull in Africa, the middle east and APAC region?

EDIT Bearing in mind we're talking about someone trading Bitcoin in a way they don't like. "this assumes USD hegemony is a distant memory. does bitcoin have the largest weapons cache and standing military in the history of humanity?" is just bunk. They don't have that sort of power these days.

qwytw
0 replies
5h55m

There is an outside chance of a literal replay of Germany WWI -> WWII if the Russians collapse

True but "only" because Russia has nukes (you certainly have an extremely valid point about that). However despite WWI Germany was still one of the (or the) economically strongest powers in Europe and the whole world. Besides oil and other raw resources the Russian economy is a joke. Due to their demographic issues and the mass casualties in this war they wouldn't even have the manpower to pull off something even remotely similar to what Germany did. So their only tool they'll have left is "do what we want or we'll blow up the entire world" (and you can only get so far with that..)

it's military looks a bit wheezy through all this

It it their military itself or rather their "soft"/diplomatic power? It doesn't really matter how strong your conventional army is if you and your opponents know that you won't/can't use it?

in NATO's sphere of influence

Prior to 2014 Ukraine was certainly in Russia's sphere of influence. This whole thing started because Ukraine (mostly peacefully) was trying to leave it and US/NATO didn't really want to get involved that much into the whole situation until it was too late. So I'm not sure it's that clear cut.

Bearing in mind we're talking about someone trading Bitcoin in a way they don't like. "this assumes USD hegemony is a distant memory. does bitcoin have the largest weapons cache and standing military in the history of humanity?" is just bunk. They don't have that sort of power these days.

I don't agree with the whole premise. The ability of the US to project military power these days is only somewhat tangentially related to its (and the Dollar's) global economic and financial dominance. They most certainly can more or less stop "trading Bitcoin in a way they don't like" without firing a shot it's just the the cost of doing that is not (yet) worth the effort. AFAIK China is not that eager to switch to bitcoin either (and without China, US, Europe and their allies you only have non particularly economically relevant third tier countries/economies left).

ben_w
0 replies
4h47m

any successor to Putin will still have the worlds largest nuclear weapons stockpile

Possibly. Given how much of the rest of the Russian forces turned out to be paper tigers, I wouldn't be surprised if 80% of the missiles' flight computers are missing something flight critical and 80% of the warheads have unenriched (or even outright depleted) uranium instead of weapons grade uranium or plutonium, with the real stuff having been lost (or never made in the fist place) due to corruption, and the SLBMs… well, thinking of replaying history, the Kursk comes to mind.

And while I don't think much of the promises of western anti-ICBM defences, they're probably still at least a bit better than the Russian delivery mechanisms.

Certainly possible that we'll see a repeat of Germany WWI -> WWII when the Russians collapse, I think that fear was why the west tried to be supportive of Russia when the USSR collapsed.

"this assumes USD hegemony is a distant memory. does bitcoin have the largest weapons cache and standing military in the history of humanity?" is just bunk.

Sure. "Largest weapons cache" is too vague anyway — anyone can tell that the number of longbows don't matter too much any more, but sometimes we get people surprised that battleships also don't matter any more.

(Also: I thought the largest standing army was China, anyway?)

pjc50
3 replies
8h6m

The US is not at war with Russia and no US forces are engaging Russian forces. This is actually an important distinction. It's much less of a conflict than the Iraq war.

It does show two things: US hegemony over certain European countries that might want to take Russian money and gas is weak, and the US foreign policy coherence is weak as Ukraine policy is at risk from cranks.

roenxi
2 replies
6h49m

If they can't win the not-war they're fighting against Russia, what is their huge military stockpile supposed to do? If it isn't useful here, they can't use it.

pjc50
1 replies
4h7m

The US military stockpile is staffed by Americans, not Ukranians, and there's no political will to transfer some of the really expensive stuff which requires extensive training like F35s. The transfers of Patriot anti-missile batteries, HIMARS, Bradley vehicles etc have been extremely effective in pushing back the Russian line of control from the initial invasion, but now it's a nasty question of assaulting well defended positions without air superiority.

https://crsreports.congress.gov/product/pdf/IF/IF12040

• 39 High Mobility Artillery Rocket Systems (HIMARS);

• 12 National Advanced Surface-to-Air Missile Systems (NASAMS); 1 Patriot air defense battery; other air defense systems; and 21 air surveillance radars;

• 31 Abrams tanks, 45 T-72B tanks and 186 Bradley infantry fighting vehicles;

• 300 M113 and 189 Stryker Armored Personnel Carriers;

• 2,000+ Stinger anti-aircraft missiles;

• 10,000+ Javelin and 90,000+ other anti-armor systems;

• Phoenix Ghost, Switchblade, and other UAS;

• 198 155 mm and 72 105 mm Howitzers and artillery;

• 227 mortar systems;

• Remote Anti-Armor Mine (RAAM) Systems;

• 9,000+ Tube-Launched, Optically-Tracked, Wire- Guided (TOW) missiles;

• High-speed anti-radiation missiles (HARMs) and laser- guided rocket systems;

• 35,000+ grenade launchers and small arms;

• communications, radar, and intelligence equipment; and

• training, maintenance, and sustainment.

(What's NOT on that list? Aircraft. What's the US doctrine way of winning a war, such as OIF? Air power.)

uzbit
0 replies
1h22m

Wow, nice find with the evidence right there! Comments like this is why I read HN. The US may not be fighting with troops, but definitely fighting proxy with it's m.i.c.

Edit: Do you think no aircraft because they'd have to use US trained pilots?

pyvpx
0 replies
2h6m

lend-lease isn’t even lifting a finger to find the hammer. there is more “hammer” droning eastern Africa surreptitiously than direct US force in Ukraine.

_heimdall
0 replies
5h43m

Sending some funding and weapons is considered dropping the hammer? What do we call it when the US actually commit troops to an engagement?

We're all lucky that the US hasn't dropped the hammer on Russia. A hot war between two major nuclear powers wouldn't / won't end well for anyone.

ericd
1 replies
8h59m

What do you imagine the US could do with its weapons cache to demand global compliance? Even extremely authoritarian governments that have tried to stamp out crypto usage internally have been unsuccessful, so it's not like the USG could just lean on other governments to demand compliance.

pyvpx
0 replies
2h8m

any sovereign state or multinational needs to deal in dollars. and the USG controls that rail. well.

call me when you can trade and refine oil purely in bitcoin. no one accepting bitcoin to buy things is holding that bitcoin.

I beg every blockchain as money people to please, please obsess over monetary theory first!!

petesergeant
7 replies
10h14m

but one of the hardest promises Bitcoin makes is that you can't change the rules mid-game

Am I misremembering or did the other blockchain do exactly that in response to the DAO hack?

roenxi
4 replies
10h0m

Compare that to the ease of rolling back a transaction in USD. I think we'll find the cost was orders of magnitude higher.

petesergeant
3 replies
9h57m

That doesn’t sound like a “hard promise”

lucw
1 replies
8h52m

You need support of the miners to effect a change on bitcoin, they won't support a change which is contrary to their interests.

Psychoshy_bc1q
0 replies
8h7m

not Miners, Users. The Users with their own Node govern the rules of Bitcoin. The Miners are bending to our will.

ericd
0 replies
8h58m

Wasn't that on Ethereum? My impression is that it has very different governance/promises.

Psychoshy_bc1q
1 replies
8h8m

That was Ethereum, not Bitcoin.

LikesPwsh
0 replies
5h37m
tsimionescu
4 replies
10h3m

Aren't the vast majority of market participants already operating outside the blockchain, relying on exchanges and sometimes on so-called "L2" networks like Lightning? I think the majority of Bitcoin and Ethereum proponents are already talking about them as "digital gold" instead of digital currency. The mining pools have also blocked any attempt to make the Bitcoin blockchain more efficient at transactions (by keeping the block size small), so on-chain trading is doomed to remain an extremely low-rate event for the foreseeable future. Is it still at 7-10 transactions/second globally?

So overall it seems quite easy to force the matter and implement KYC and AML for msot legal Bitcoin transactions.

xiphias2
1 replies
7h14m

While you're right that Lightning L2 transactions generally aren't published on the blockchain, while following the lightning protocol, real Bitcoin transactions are passed between network participants that can be published by any of the participants if another other party doesn't follow the lightning channel rules.

yuvadam
0 replies
6h33m

Force closed channels are an edge case that usually occurs due to unresolved HTLCs during network disconnects, and hardly ever due to malice. Channels can also be closed cooperatively between nodes at any time. Lightning transactions themselves never hit the blockchain - channel opens and closes do.

rfoo
0 replies
7h27m

So overall it seems quite easy to force the matter and implement KYC and AML for msot legal Bitcoin transactions.

At that point people would seriously have more interest in the so-called "L1 scaling solutions" which mining pools blocked. And mining blocks can't block such things anymore given that there is enough interest.

LikesPwsh
0 replies
5h43m

Seven TPS was a theoretical maximum, it normally ranges from three to six.

injeolmi_love
2 replies
3h15m

There’s a very small number of mining pools that control Bitcoin. All the USA has to do to force a hard fork is order them to run alternative mining software.

psychlops
0 replies
2h12m

I guess they'd enjoy running their expensive hardware on a worthless fork while the rest of the planet used bitcoin.

peyton
0 replies
2h29m

Ethereum miners weren’t very successful at stopping the proof-of-stake transition. Why would Bitcoin miners be any different?

beambot
2 replies
6h52m

Doesn't the ETF completely bypass such rules? Now you aren't trading actual Bitcoin -- you're trading entitlements at the DTC, managed on their own settlement system and centralized databases. All you need to do is look into RegSHO to see all the ways that system can be gamed.

genge
1 replies
6h36m

It doesn't bypass the rule. It just creates an alternative american market for it. You can still buy bitcoin following the rules of bitcoin if you chose so.

_heimdall
0 replies
5h38m

Its a totally different market though if you aren't buying actual bitcoin.

People can play around with derivatives all they want, there's nothing wrong with that. But to even call these a bitcoin ETF is disingenuous at best. All this is is a new fiat money with a "bitcoin" sticker slapped in the box.

zubairq
12 replies
11h13m

Actually a huge amount of Bitcoin that people bought from large institutions over the last 5 - 10 years was already not on the blockchain.

(1) a customer would go to an exchange’s website and purchase 1 Bitcoin

(2) the exchange would add 1 to an internal counter representing the Bitcoin balance for that customer on their internal SQL database

(3) the exchange would use / trade that money sent by the customer to try to make a profit before the customer sold their Bitcoin and withdrew their money

This is how big scandals like FTX and others disasters happened. Also known as “fractional banking”

pavlov
8 replies
10h36m

The popularity of these scammy exchanges despite the massive red flags shows that this is actually what customers want. They don't want the theoretical advantages of permissionless blockchains and private keys, they just want penny stocks that trade 24/7 and are called "crypto" because it sounds cool.

So institutions will take advantage of that desire for convenience and work with regulators to turn "crypto" into just another product on their menu, with the vast majority of customers having no other way to access it.

petesergeant
4 replies
10h12m

They don't want the theoretical advantages

Surely only a fool would want advantages that were theoretical only?

fidelramos
2 replies
8h19m

But they are not theoretical, users who have their own crypto wallets have been unaffected by all the failed exchanges (MtGox, FTX, etc.)

There are other actual advantages that some people today benefit from, like avoiding confiscation and uncensorable transactions ( which would have been appreciated by the Canadian truckers when they were debanked), or protection against high inflation (like many Venezuelans and Argentinians do).

This is not to say that the UX of cryptocurrencies is not good enough for the majority of people, but that is a separate criticism.

akoboldfrying
1 replies
8h2m

You're absolutely right, though I took the parent's main point to be that it's incredible how little people seem to care about these actually-very-practical advantages. (The advantages must seem purely theoretical to people so willing to throw them away.)

fidelramos
0 replies
7h47m

I agree with that point, most people don't seem to care about the advantages until they themselves get bitten by the status quo.

pavlov
0 replies
9h17m

The greater fool theory is the only mechanism for converting crypto to dollars, so this is a feature.

troupo
0 replies
9h1m

They don't want the theoretical advantages of permissionless blockchains and private keys

Because none of these theoretical advantages make any sense for the absolute vast majority of people, and don't make sense for about 99.99999999999% of things for which the advantage is claimed.

iraqmtpizza
0 replies
5h49m

Or maybe it's just that they aren't illiterate and know that US taxes must be paid in USD by law. If you want to call not going to federal prison "convenience" then make that argument explicitly instead of dancing around it.

akoboldfrying
0 replies
8h7m

This is right on the money.

It's incredible to think about really: the one technical feature that truly differentiates crypto from all other forms of currency -- namely, a cryptographically strong guarantee that no one else can touch your money -- gets thrown away routinely and no one minds at all.

kortilla
2 replies
10h32m

That’s not at all fractional banking. That’s called a bucket shop.

zubairq
0 replies
10h23m

Yes you’re right, “fractional banking” may have been a bad choice of words on my part. The point I was trying to get across was that assets given to a crypto exchange would be lent out and used, instead of custodied.

This is the same as a bank. When you give them money they lend it out and use it for other purposes which is why “bank runs” exist if everyone asks for their money back at the same time

In fact the US regulators have been very hostile in recent years to banks where you give them money and they just custody it for you safely, even for a fee

LikesPwsh
0 replies
5h35m

Any cryptocurrency investment is a bucket shop, not just exchanges. There's no underlying positive cash flow to return to investors.

npoc
10 replies
9h7m

The difference is that they can never stop you custodying the bitcoin yourself.

Bitcoin won't become "quaint" - it will always sit there as the hardest money mankind has ever seen (and likely ever will). If they try and create tokens that don't represent bitcoin i.e. creating them out of thin air, then they will go down in value relative to bitcoin, just as we are seeing with fiat currencies and people will move their wealth back into bitcoin.

Decentralised exchanges like Bisq mean that people will always be able to get their hands on the real thing.

Wytwwww
5 replies
8h16m

hardest money mankind has ever seen

Except it's not really money is it? It's a speculative asset.

The difference is that they can never stop you custodying the bitcoin yourself.

Except if you can no longer convert it to real money ($/€/etc.) it becomes effectively worthless or at least start trading at massive discount.

Also the delusional/quasi-religious rhetoric is getting old. Can't you actually try to think of any rational and/or substantiative arguments?

npoc
4 replies
7h28m

Let's not argue semantics.

With bitcoin you don't need "real money", you can exchange it directly person to person. In any case other countries that embrace bitcoin will always exist.

It sounds like you need to learn what money really is. Try and figure out why mankind chose shells and beads as money, then gold and then fiat. It will help you understand why it will choose bitcoin next.

notahacker
2 replies
5h24m

Some of us figured out that mankind ceased to use shells and beads (and many other things much more fixed in supply than Bitcoin) aeons ago because few people were required to settle their debts or taxes in them, and therefore their future value was entirely dependent on volatile collector sentiment rather than a broad segment of society needing them. I wonder when Bitcoiners will catch up...

npoc
1 replies
3h20m

No. Good attempt, but that's not the right answer.

At least it was better than "because you can make jewellery out of gold and it's got some industrial uses".

Let's look at it another way. Why did the people/government choose to make bank notes legal tender, when they already had gold as legal tender?

Why was gold legal tender in the first place? Why not beads?

I wonder when you'll catch up with bitcoiners?

notahacker
0 replies
2h42m

Why did the people/government choose to make bank notes legal tender, when they already had gold as legal tender

The notes came into play because of demand for credit, and the monopolist of legal force in the territory preferred to legislate legal tender as something they had control over and earned seigniorage from, which was incidentally also easier to maintain a balance of supply and demand in (if they were minded to do so).

What states absolutely aren't looking to denominate debt in is a volatile synthetic asset whose limited supply is mostly in the hands of shady, unproductive foreigners, which was created out of explicit hostility to credit markets but is now propped up entirely by a speculative asset bubble.

Now that you understand that, you can finally catch up with non-Bitcoiners!

Wytwwww
0 replies
5h29m

With bitcoin you don't need "real money",

Maybe you don't (almost) everyone else does.

In any case other countries that embrace bitcoin will always exist.

Doubtful. None exist and unlikely any will exist in the future (at least not the type of countries many people would want to live int)

It sounds like you need to learn what money really is. Try and figure out why mankind chose shells and beads as money, then gold and then fiat. It will help you understand why it will choose bitcoin next.

I'm sorry but you sound pretty much like the "flat earth" people... (maybe that was the point?)

pjc50
0 replies
8h6m

If they try and create tokens that don't represent bitcoin i.e. creating them out of thin air, then they will go down in value relative to bitcoin,

Tether remains inexplicably popular.

lxgr
0 replies
5h40m

What would prevent any government from passing a law making it illegal to touch cryptocurrencies?

Sure, that doesn’t make it impossible to self-custody, but it would surely have some impact on most people‘s willingness to do so.

egorfine
0 replies
6h46m

they can never stop you custodying the bitcoin yourself.

They can and will stop you from actually using real bitcoin stored onchain. It's a strong trend and one that is quite troubling.

RandomLensman
0 replies
6h41m

When push came to shove, pretty much all money (and assets) dropped hard in value vs stuff that is critically needed. Hardness of money is really only situational. Really hard money does not exist that is why things like productive assets are where wealth goes - not into other non-productive monies. For example, equity is already used as money at times (M&A, salaries).

cturner
2 replies
8h33m

There is an important difference between shares and crypto: US shares exist as a result of US legislation. Hence, it is straightforward to make regulatory or legislative changes for the operation of a share market. This is not true of crypto.

Crypto is more like a currency than a share. It is transnational - if one jurisdiction applies regulatory burden, activity will flow somewhere else without that changing the operation of the market. Hence, it would be far harder for the US to coax changes into the crypto market, and it would require heavy cooperation from other governments.

The US government has leverage against crypto to these limits: (1) some companies that operate as exchanges operate there; (2) some people with US bank accounts want to exchange cash for crypto; (3) the US has some extradition reach against non-US firms who have US customers.

In the last twenty years the US government has extended its legislative reach for banking matters into other developed countries. Their mechanism for doing this: they offer cheap lending (free money) to banks who sign up to their rules. This could change. The London eurodollar trade happened despite the wishes of the US gvt, and such things can happen again. The security environment will be significant in how things change.

In a US-overreach scenario, I would look to India as a place that could emerge as a crypto haven. India is distinct from the Russia/China axis, which lack rule of law - the state can disappear you on a whim. India is comfortably distinct from the US security block, where security agreements can be used as leverage for legislative reach. Several south american countries could run plays also.

rmbyrro
1 replies
8h27m

Nothing prohibit the US from legislating bitcoin.

cturner
0 replies
8h17m

This is true. But it would be a mistake to see the legislative options for the US towards crypto to be as straightforward as its options for its own share market. With crypto, there is far more potential for unintended consequences that would push activity off-shore. That would result in reduced control.

sharperguy
1 replies
7h3m

I won't argue what is going to happen. I do think if bitcoin were to go this way it would lose most of its fundamental value. As border restrictions, sanctions, KYC, tracking are all applied to the institutional coin, there would be little advantage in comparison to other instruments which generate yield or are more liquid.

In such a world the demand for a truly sovereign bitcoin would still exist, although using it may be out of reach for most, depending on how things play out.

The battle is on, in terms of finding ways to scale bitcoins sovereign transaction limit, and find ways to transact that can't easily be prevented with the wave of a regulator's pen.

egorfine
0 replies
6h49m

if bitcoin were to go this way

It is already strongly headed this way. I have recently seen an auction by the respected house (Sotheby's? maybe) that was heavily marketed as the first one with crypto currencies accepted.

Turns out, as it is customary with marketingspeak, in their terms and conditions they mean something entirely else: payments are only accepted from a couple of US crypto exchanges. So, no blockchain and no crypto at all.

isoprophlex
1 replies
11h14m

How will they implement tracking of bitcoin provenance in their new systems? Maybe they can use some proof-of-work blockchain tech for that, I heard it is a really good fit for those use cases :^)

pavlov
0 replies
10h41m

Same way as they track the trillions of dollars worth of stocks and bonds that are traded every day. No need to reinvent the wheel with a much slower and less power-efficient system.

sjducb
0 replies
7h12m

It would be like trying to legislate to affect the value of gold.

Many countries try to do this. It has had almost no effect on the value of gold.

For example in the US in 1933 private ownership of gold bullion was punishable by 10 years imprisonment.

shudza
0 replies
9h11m

I've got a newsflash for you... US IS NOT THE WORLD. Stocks (companies) are US based and Bitcoin isn't. So while you are not entirely wrong, you missed the most important difference between stocks and Bitcoin in your comparison.

pjc50
0 replies
7h59m

My prediction: it'll do a Gamestop. Huge initial interest, followed by a gradual fade. Regulating out the gambling and the exchanges cheating customers makes it less volatile, and therefore less interesting.

jowea
0 replies
20m

Will we get the next steps of gold to gold certificate money to fiat too?

JustinGoldberg9
0 replies
6h42m

Lol, Bitcoin is p2p.

Ignore this at your peril.

Ekaros
0 replies
11h37m

You know, those coins that satoshi mined are too high risk for our blockchain and bitcoin. So we just blacklisted all of them. And basically also all that haven't moved in 1 year from the date we did. Sorry your coins are forever dirty and no miner will include transactions with them in a block...

127
0 replies
5h38m

I think that's complete nonsense because how the (theoretical) underlying worth of Bitcoin is based on its network and utility. Sure, you can get pretty wild speculative bubbles, but eventually there has to be come to Jesus moment.

The tech will keep improving, there will be better and simpler user front-ends. Adoption will increase. People will be more aware of their various options.

Not your keys, not your coins. Stock performance is measured with earnings. Bitcoin performance is measured on metrics that happen on the blockchain and in the real world people holding and transferring actual Bitcoin.

fancyfredbot
118 replies
20h39m

Satoshi's dream of a decentralised ledger finally reaches its ultimate form of a centralised list maintained by the DTC. Rejoice!

ur-whale
52 replies
20h34m

While I agree with the sentiment, please remember that actually buying BTC directly and doing self-custody is still an option.

fancyfredbot
33 replies
20h21m

So much more hassle though. Nobody's going to bother with that now - what's the point?

treyd
13 replies
20h16m

UX with hardware wallets (which you can get for like $60) is pretty decent these days and it eliminates a lot of stress in the workflows you typically use. There's still a huge room for improvement with seedphrase backup and "social recovery", but it's easier now than it's been in the past.

lxgr
12 replies
17h46m

How does the average person back these up in a secure, yet durable way that lasts decades and can easily be discovered by (and only by) their ultimate heirs?

transcriptase
5 replies
17h21m

Same as anything else really: A sheet of paper and a safety deposit box.

You die, your heir or executor takes the appropriate paperwork to the bank, and then they get the contents of the box.

lxgr
4 replies
17h14m

How many people even have a safety deposit box?

Many banks don't offer them anymore, and in some countries they have a disturbing tendency of getting robbed, with absolutely no recourse for the depositors (since contents are usually unverified and uninsured).

transcriptase
3 replies
17h7m

Then buy a large fire safe, bolt it to your floor inside a closet, and fill it with 10 lb barbell plates until it requires a forklift to move.

If your threat model includes someone inside your home with power tools and you can’t trust a bank… you might want to consider moving.

fragmede
1 replies
16h43m

That's cool. What do I do when I move every few years because I'm a renter and can't afford to own a home in this economy?

transcriptase
0 replies
13h24m

You tell me.

lxgr
0 replies
16h58m

Given that people probably don't arrange their life around the ability to safeguard physical assets, I think you've just given several good arguments against self-custody:

Many people don't own a home. Not all of those that do want to expose themselves to the liability of storing valuables there. The safety situation between homes even within the US varies greatly, and even more so internationally. Banks with safety deposit boxes aren't ubiquitous.

If it works for you, great! I'm just saying that you might be in the minority here.

jekrb
3 replies
17h22m

I think everyone will have different behavior sec for their funds, with the options now ranging from simply committing a 12 or 24 word seed phrase to memory and buying ETF shares.

There is shamir secret splitting, multisig, MPC, secure enclaves with biometerics, etc...

There will be apps like Fuse wallet: https://www.fusewallet.com/

There will be phones like Saga: https://solanamobile.com/hardware

I think how one handles their wallets will be much like how people make their espressos. Some will just stick k-cup in a machine and hit a button, others will become full-blown coffee enthusiasts that carefully measure their beans, de-static their grinds, and extract for the exact right amount of time.

lxgr
2 replies
17h17m

simply committing a 12 or 24 word seed phrase to memory

That's absolutely out of the question for almost any human being, especially given the timeframes involved.

There will be phones like Saga [...] There will be apps like Fuse wallet: [...]

Again, we're talking about a timeframe of decades. How many of these will even still boot up after that amount of time? None of these seem safe to just throw in a bank safe deposit box.

make their espressos. Some will just stick k-cup in a machine and hit a button

I'm really not a coffee connoisseur by any meaning of the word, but even I know that what comes out of a k-cup machine is brewed coffee, not espresso.

k12sosse
0 replies
16h22m

I'm really not a coffee connoisseur by any meaning of the word, but even I know that what comes out of a k-cup machine is brewed coffee, not espresso.

No, that's his passphrase

jekrb
0 replies
17h1m

My point is there are thousands of ways to handle your wallets, I don't think there will be one average way.

The ETF is probably the equivalent of this "espresso style" k-cup https://www.keurig.com/Beverages/Dark-Roast/Espresso-Style-C...

treyd
0 replies
17h20m

That's what the "social recovery" ideas are for. It's a framework for doing key management across multiple trusted parties under controlled conditions in the hypothetical case your primary keys are inaccessible. You could have your executor hold a key, for example.

akgoel
0 replies
17h28m

Passphrase in a bank safe deposit box.

bob_malrey
9 replies
20h10m

But what’s the point of Bitcoin then? They might as well put anything in these ETFs and it’d be the same thing then: the flat rocks in my garden are limited in number and very scarce, wanna put some in an etf?

rkagerer
3 replies
19h38m

Maybe, but my rocks are better, faster, and more scalable!

Frankly we could probably get our rock ETF's approved more quickly. Regardless of how you feel about Bitcoin, it's not (or shouldn't be) the SEC's place to play nanny and dictate the particular assets/commodities/etc. in which you're allowed to invest your money. Incidentally even one of SEC commissioners agrees https://www.sec.gov/news/statement/peirce-statement-spot-bit...

dovakin
2 replies
19h32m

Well as a matter of fact btc is none of these things compared to any other crypto, which are themselves not particularly any of these things.

But I agree with the fact it’s not the SEC’s role to tell us the merit of btc. I do have some worries on the Tether scam still going on for example though, which has been manipulating BTC for years.

rvnx
1 replies
18h49m

No matter if it is a scam or not, at the end it worked. Similar to banks which don't have enough capital.

Now Tether owns tons of money, and can buy treasuries that bring few % of interests, and these interests are not paid back to USDT holders.

As a result, overtime, they'll be able to fill-in any potential gaps or money accidentally lost.

teh_infallible
0 replies
16h43m

Impressive, isn’t it? They bootstrapped a stablecoin!

Edit: spelling

jabits
3 replies
19h7m

I don’t think you quite understand. One ounce of gold or one bitcoin is indistinguishable from any other, i.e. fungible.

Also, limited in number and scarcity only partly define value. In addition to these properties, other people must agree with you.

If your flat rocks are scarce and people want to invest in them, by all means…

0x0
2 replies
17h27m

One bitcoin is very much distinguishable from another bitcoin as they can be traced through transactions and wallets, with the outcome that some bitcoins might be rejected by recipients that are uncomfortable with certain source wallets or mixers.

fragmede
1 replies
16h38m

There's no way for a wallet to block incoming transfers. If someone sends Bitcoin to an address, the transfer will be processed by the network.

0x0
0 replies
8h5m

Yes but you could refuse to deliver whatever the sender is paying for. I mean you need to wait for 6 confirmations or whatever anyway before "approving" the payment transaction.

kordlessagain
0 replies
17h38m

Bitcoin's value lies in its potential as a secure means of payment for microtransactions and its integration with advanced technologies like the Lightning Network. Its worth is tied to its perceived future utility in various domains, particularly in facilitating transactions over APIs. The recent ETF news contributes to its liquidity and stability, essential for its role in digital transactions. As the technology and applications around Bitcoin continue to evolve, its true value might become more apparent, potentially transforming the landscape of digital commerce and AI interactions.

hn_throwaway_99
2 replies
20h11m

Nobody's going to bother with that now - what's the point?

This is actually a great comment that I think applies well to the crypto world as a whole, even if that wasn't your original intent.

fancyfredbot
1 replies
19h50m

I will own up to trolling slightly to draw attention to the fact that exhanging bitcoin as a digital currency is not something which would occur to most people who own it. The only thing most people will do with their bitcoin is exchange it for fiat.

tempestn
0 replies
17h5m

That and hodl it, hoping it'll someday be worth more.

miohtama
1 replies
18h34m

Everyone who does not have access to the US financial system will keep doing it. Which is 7/8B people on this planet.

lxgr
0 replies
17h44m

Are you missing some other somewhat relevant financial systems here by any chance?

The EU (higher population than the US) has had Bitcoin ETFs for a while now.

rkagerer
0 replies
19h41m

It's not really that hard, and the tools are continually evolving to be more user friendly (e.g. Last year Trezor added hardware support to simplify Shamir backup).

Of course the ability to hit "buy now" in the same marketplace you manage all your other investments is pretty low friction and I'm sure this decision will bring fresh investment out of the woodwork.

houseatrielah
0 replies
19h29m

Save approx. 1% on fees annually is the point.

brucethemoose2
0 replies
20h13m

I love this scenario.

"Why is Bitcoin a great asset?"

"Because its the future of currency! Its great and everyone will use it!"

"Then why don't you just get it directly?"

"Uh, its too much of a hassle. For me. A professional finance worker."

TheDudeMan
0 replies
16h52m

Your question is equivalent to asking the point of bitcoin (avoid centralization).

trompetenaccoun
9 replies
20h16m

The mob always wins in the end, but I never understood why many on HN have been so cynical about Bitcoin. At least Satoshi tried, whoever they were. They gave a gift to the world, but it sadly got co-opted and taken over first by small-time grifters and now by the big boys at Wall Street. In hindsight it was probably bound to happen, because money buys influence and a casual decentralized group of coders can never win against banks and governments.

Anyway, digital gold is still better than nothing. It's still an innovation as a store of value, even if the payments idea is basically history (some Bitcoin maxis just don't understand that yet). Also Bitcoin has inspired a whole ecosystem of other blockchains. If you want the original concept of a peer-to-peer electronic cash system, Monero is probably one of the best to check out currently. Governments are btw currently going after Monero, because unlike the common myth about Bitcoin, it actually enables anonymous payments - just like cash. And so of course we can't have that. Multiple exchanges already announced they were forced to delist XMR.

loceng
4 replies
17h51m

It's only worth something if someone else values it vs. physical gold.

snapcaster
1 replies
17h47m

Of course, this is also true of physical gold though. If all non-industrial use of gold were to end the price would collapse

losteric
0 replies
16h48m

That's a tautology....

The aesthetic and industrial applications of gold are what makes it intrinsically valuable - that being the key distinction, and distinct from Bitcoin. If you ignore the useful aspects, of course it's no different from any useless thing.

sapphicsnail
1 replies
17h41m

Gold's value is mostly disconnected from it's utility. We've just decided it's valuable for a longer period of time so less people question it.

tempestn
0 replies
17h1m

The time period is part of it, but I think the physicality matters too. You can debate gold's inherent value as you can with bitcoin, but you can't argue that it's not even a thing that exists. You also can't create more of it - which some would argue you can't with bitcoin either, but all it would take is consensus. Plus one could argue that other coins are equivalent goods.

jjulius
1 replies
17h40m

... but I never understood what many on HN have been so cynical about Bitcoin.

Eh, I think you actually might! Hell, you said it yourself - the mob always wins in the end. It doesn't matter what Satoshi made, the mob took it and made it into something else. It's what Bitcoin turned into that HN is collectively cynical about.

trompetenaccoun
0 replies
16h58m

What Bitcoin has been turned into is still revolutionary, but not in the way it was supposedly intended. The original intention as per Satoshi's whitepaper and posts was to empower people and give them an alternative to banks. It was supposed to be a cash system run by the people for the people. The democratization of money.

Ignoring that this idea was mocked by many from the start for reasons we can only speculate about, it seems there's a lot of confusion about what Bitcoin currently is as well. Mocking the idea that poor people in Congo will be saved by Bitcoin - sure. Making fun of laser-eyed Bitcoin maxis telling you we'll all totally use Bitcoin for payments (have you heard of the Lightening Network bruh?) - of course, I joke about them too.

But what you have is the first time in the history of the planet that there is a public ledger that can be used by anyone, transparently and permissionlessly, to store and transfer value. It's not in the hand of any bank or government. Nobody can freeze your account because you're fully in control. You can run your own node to push transactions if you wish to. It can absolutely not be falsified, unlike cash or book money. This is still extremely valuable. Especially when you add programmability, which Bitcoin only has in a rudimentary form, but other "smart contract" platforms already do much better. Because now you can automate transactions and those transactions don't necessarily have to be about money.

heresie-dabord
0 replies
17h11m

I never understood why many on HN have been so cynical [...]

You ask the question and then proceed to answer it.

Satoshi [...] gave a gift to the world, but it sadly got co-opted [...] In hindsight it was probably bound to happen, because money buys influence

Because anything of value and fungible will invite exploitation by monied interests.

and taken over first by small-time grifters and now by the big boys at Wall Street.

There is ample evidence to indicate that the predominant grifters are not small-time operators.

georgeplusplus
0 replies
17h24m

Satoshi might not even be real.

It might be funded by intel agencies for all we know.

maxioatic
7 replies
20h8m

But then I have to pay taxes on it.

Time to full send my retirement accounts into these ETFs so I can retire early. /s

Actually though I might consider allocating a tiny percentage (1-3%) to these. Seems like fairly low risk with enough upside, but who knows.

anonu
3 replies
17h28m

These are cash creates not in kind creates. So there is no escaping taxes. You will be paying capital gains just by holding spot Bitcoin ETFs

Edit: after further research it appears that the cash create mechanism doesn't cause a tax event for shareholders as it does with mutual funds. See https://www.grayscale.com/blog/legal-topics/addressing-poten...

We will have to see how every Bitcoin ETF is structured. YMMV depending on this structure and how you get taxed.

tempestn
2 replies
17h11m

I think the parent is talking about buying the ETF inside a tax sheltered account.

maxioatic
0 replies
16h49m

Indeed I was, thanks for clarifying.

anonu
0 replies
4h52m

Ok. Not a terrible idea to be in high growth/high return assets in qualified accounts.

siwatanejo
2 replies
17h38m

What do you mean? self-custodying BTC is still unrealized gains until you sell, so no tax either.

maxioatic
0 replies
16h42m

I was referring to the capital gains tax you pay for selling BTC on an exchange. I was thinking specifically about Roth IRAs, where any gains are tax free, but a 401k or similar would work too.

ghshephard
0 replies
17h28m

BTC ETF in in a 401K/IRA can be contributed, grow, or possibly be withdrawn tax-free depending on how you set it up. Coinbase reports your gains and you owe taxes on them. (Don't think Coinbase has an IRA/401K option for custody. Yet.)

factorialboy
40 replies
20h26m

Sarcasm aside, this is the ultimate endorsement.

The likes of Blackrock could use BTC as a hedge if the Feds keep on printing USD under political pressure.

bob_malrey
34 replies
20h24m

How would that be better than holding gold? Fees for large transactions of btc are getting higher than the cost of physically moving gold anyway, and the chances to lose it or get it stolen are higher.

shawabawa3
27 replies
20h21m

Fees for storing and moving bitcoin are absolutely not approaching the costs for gold

Try moving $10M of gold from one end of the world to another for under $100

nikolay
26 replies
20h18m

Well, how about trying to move $200 in Bitcoin - it's the most expensive funds transfer. You cannot "move" $50 as it's cost-prohibitive!

npoc
11 replies
19h42m

The bitcoin network is best suited for storing and moving large amounts of monetary energy. Compared to any other monetary system, it does this the most efficiently (i.e. with the least amount of energy loss), both during storage and during transfer.

Note that the transfer of monetary value/energy is final settlement (i.e. it's not just an IOU that will be settled at later date, like most bank payments).

Ultimately the base layer network will be used for settlement between banks, national reserve asset/currency etc. and faster, cheaper payment rails will be built on top of it (e.g. the Lightning Network)

dovakin
10 replies
19h27m

The Lightning Network isn’t working as intended and the devs have basically admitted it’s never going to though. I don’t think blockchain as it is built for the btc network is as scalable as you think it can be.

npoc
6 replies
17h55m

I offered the Lightning Network as a single example. I don't agree with you, but it's largely irrelevant at this stage.

The fact is that Bitcoin is very likely to absorb a vast percentage of the worlds value simply as it is. Once this has happened its value will stabilise and it will become useful as a unit of account/day-to-day currency. By this point, there will be far more motivation to focus on developing solutions (such as Lightning) to allow smaller and faster transactions.

smoldesu
2 replies
16h54m

The fact is that Bitcoin is very likely to absorb a vast percentage of the worlds value simply as it is.

You present this as a fact, but the actual valuation of Bitcoin doesn't seem to support this claim. John McAfee bet (and proverbially lost) his testicles on broad estimations of Bitcoin's continued growth. Without extraordinary evidence, you can't make claims of extraordinary provenience.

there will be far more motivation to focus on developing solutions (such as Lightning) to allow smaller and faster transactions.

If you need an L2 transaction layer to solve an issue inherent to an L1 chain, you're kinda just admitting that the base layer is flawed. Why use Bitcoin at all if we need mediators to settle regular transactions?

The "we'll fix it later" mentality works for shitty altcoins that have nothing to lose by reinventing themselves, but I'm not convinced Bitcoin can change. I was mining Bitcoin about a decade ago now, hearing people say "Lightning will work soon" or "a good interchain bridge will exist eventually" in 2024 leaves me convinced nothing has changed. It's a race between the economics and the technology to see which becomes outdated first.

thinkmassive
1 replies
14h34m

If you need an L2 transaction layer to solve an issue inherent to an L1 chain, you're kinda just admitting that the base layer is flawed.

On a similar note, TCP is an admission that IP is flawed. And HTTP is proof that the entire networking stack is a scam.

Clearly, any decent networking protocol would handle any and all information interchange anyone could ever need.

The fact that HTTP is on its third iteration, and it’s still built in top of the same Internet Protocol from 1974, proves that _nothing_ has changed. /s

smoldesu
0 replies
13h55m

None of what you said is inherently wrong. Much like the OSI model, if you reinvented Bitcoin today it would look much different.

Unlike the OSI model, Bitcoin's solution to finance is not modular or all-encompassing. If it's not going to adapt to modern demands, it will get replaced. There's no point in keeping around a financial solution that is impossible to fix when it breaks.

CyberDildonics
2 replies
13h16m

The fact is that Bitcoin is very likely to absorb a vast percentage of the worlds value simply as it is.

Your prediction for the future that a ledger with the throughput of a 28.8 modem will absorb the world's value is "fact"?

By this point, there will be far more motivation to focus on developing solutions (such as Lightning) to allow smaller and faster transactions.

It has been in the works for a decade and no one wants it. Why would someone use that when any other cryptocurrency (except for ethereum) already do small and fast transactions?

https://bitinfocharts.com/comparison/transactionfees-doge-lt...

npoc
1 replies
11h4m

Your prediction for the future that a ledger with the throughput of a 28.8 modem will absorb the world's value is "fact"?

Yes, the base layer network is ideally suited for storing extremely large amounts of wealth, for large amounts of time. No other asset has qualities that come close, they all leak value compared to bitcoin.

CyberDildonics
0 replies
4h11m

Where did you read this and why did you believe it? There is no technical reason this is true of course, for many reasons, including that many of the earliest coins are clones of bitcoin.

Are you copying some talking points or can you explain on a fundamental level why you believe this?

nikolay
1 replies
18h44m

Is this why Coinbase does not support it?

siwatanejo
0 replies
17h30m

Coinbase is a joke as an exchange. Other behemoths exchanges support it, such as Kraken or Binance. But I recommend you p2p exchanges, which don't require KYC, e.g. RoboSats or LNP2Pbot.

jazzyjackson
0 replies
18h56m

huh, can you give me some context? I never used lightning but it sounded like it was maturing, what went wrong?

mratsim
6 replies
20h9m

Try moving $50 in a private bank. Fees for stocks start at $200.

nikolay
5 replies
20h2m

I do it every week. It's free (Zelle), or it's incredibly cheap. It has predictable cost and timeframe, too, unlike Bitcoin, with no customer service and no way to remediate errors and fraud! So, even if I pay to the banks, it covers people and insurance - unlike with Bitcoin, which just burns fossil fuels so that Chinese miners can get richer and richer stealing subsidized electricity!

trompetenaccoun
4 replies
18h33m

That's like Robinhood users telling me they pay zero trading fees. Then how does RobbingHood make money?

Think about it, running an exchange has costs. I really don't understand how people can be so easily tricked by "free" offers that are actually more expensive when you do the math. PFOF (i.e. legal theft), unfavorable spread, etc... They get their money one way or another. It can technically make sense when you're trading something like $50 worth of a stock, because of course that would not be reasonable with a brokerage using a traditional fee structure. But frankly trading such low figures is silly. You have to invest a lot of time (=money) in research when stock picking, else you're guaranteed to lose sooner or later. But the reward simply isn't there. Even if you make 100% profit you now have $100. Better put that money into an index fund savings plan and forget about active trading. You're guaranteed to receive a better reward on your investment just getting a part time job selling fast food or something like that.

nikolay
1 replies
17h56m

I pay for Coinbase One - more than I've ever paid to any bank for a year. And what's my benefit? Almost none, because I still have to pay the immense fees!

In crypto, the margins are much wider than in any traditional financial services, which rely on volume and wide adoption!

trompetenaccoun
0 replies
17h29m

Coinbase is a centralized exchange, the trading does not happen onchain so the trading itself has nothing to do with crypto, it's fundamentally just like a stock exchange. Onchain trading would be using a decentralized exchange, and that's much cheaper now on Ethereum L2 for example (although still in the experimental phase, slowly getting there). Coinbase is btw one of the more expensive CEX, but I guess you're there paying the higher fees and not with the competition, because they're reputable and unlikely to steal or lose your funds, correct?

The great thing about cryptocurrency is you can trade it any way you like. You can take your tokens in self custody. You can in theory trade with a random guy on the street, without any third party involvement and with zero fees. I know a guy who does this because he's worried about a coming police state, so he buys everything with cash during meetups.

I think the high fees CEX are currently charging, which you're right about, has multiple reasons. One is it's a completely new and largely unregulated space. There are a lot of risks, they need to set aside a lot for litigation. FTX had very low fees for example while stealing customer funds to lobby Washington ;) Coinbase is legit but has to spend a lot on legal fees and compliance, because they're in it for the long run. Also a huge part of the reason is surely simply because they can. Crypto traders are making so much money that they're more likely to accept paying high fees than the average stock trader. That won't last forever, it's just because the market is new and volatility is crazy.

WrongAssumption
0 replies
16h10m

You have no idea how PFOF works

Terr_
0 replies
17h38m

That's like Robinhood users telling me they pay zero trading fees. Then how does RobbingHood make money?

I was reading a book about that recently, it boils down to: "You're not [just] the customer, you're [also] the product."

Key term: Payment For Order Flow (PFOF) [0], with the book-paragraphs I was thinking of down below:

____________

Retail investors have one hugely attractive property when considered by a professional – they’re dumb money. Not only are they unlikely to have private information, a lot of the time they haven’t taken care to consider all the public information. When the party on the other side of the trade is a small investor (or a lot of orders from small investors all over the country, ‘bundled’ by a retail stockbroker), you can be reasonably sure that you’re not taking too big a risk that the person selling stock to you knows something about it that you don’t.

This makes retail orders very valuable to the market. One of the reasons why stock brokerage commissions are so cheap these days is that retail brokers have actually realised how valuable they are. They charge a quite substantial fee to players like the high-frequency traders for the privilege of dealing against their order flow, and they rebate some of this fee to their customers. But the retail orders would eventually dry up if the customers lost too much or felt that they weren’t being given a fair chance. And without a steady flow of ‘dumb money’ lubricating the wheels, the professionals would find it a lot harder to trade, as they’d always suspect each other’s motives for buying or selling.

-- Lying For Money by Dan Davies

[0] https://www.investopedia.com/terms/p/paymentoforderflow.asp

michaelt
2 replies
20h6m

Simply divide your BTC into paper wallets in a variety of sizes from $5 to $100, and when you need to make a transaction, mail the right combination of wallets to the person you want to pay.

/s

nikolay
1 replies
20h0m

Mailing costs money, too; it's slow, and there's no proof that I've made the transfer. Plus, if that person wants to consolidate their funds, they will have to pay the crazy costs still, i.e. they will put it into their pricing model! How about comparing apples to apples?!

blep_
0 replies
16h31m

And the receiver has no guarantee that I didn't photocopy the paper before mailing it.

yreg
1 replies
19h42m

Probably not a worry for Blackrock.

nikolay
0 replies
18h44m

That's what it boils down to - Bitcoin is nothing it promised to be; it's like the equivalent of penny stocks... except that it's quite the opposite in terms if pricing.

RestlessMind
1 replies
19h22m

Using Bitcoin network to move small amounts of money is akin to using a jumbo jet to go grocery shopping. There are better blockchains out there for small money transfers.

nikolay
0 replies
18h48m

So, I have to go through a multitude of swaps, i.e losses, if Bitcoin is the real deal?! I've tried it, it's even more expensive than doing it directly!

factorialboy
2 replies
19h43m

Strawman. I never claimed Bitcoin is the only hedge. Certainly gold has it s place.

Lightning network fees are negligible. So that argument doesn't hold either.

Workaccount2
1 replies
19h38m

Lighting network isn't really bitcoin though. More like an optional bolt on peripheral network with it's own set of issues.

nullc
0 replies
19h10m

It's accurate to say that lightning makes it's own tradeoffs, but it's not accurate to say it's not Bitcoin.

Every lightning transaction is just a regular bitcoin transaction that could be posted to the chain at any time-- you just don't have to, because the scripting functionality has been used so that if a counterparty posts an earlier state you can effectively cancel it.

The switch to deferring updates unless there is a dispute gives a massive advantage to scaling (e.g. number of tx per second possible goes up the more users there are rather than being a global constant), instantaneouness of transaction irreversability (as fast as the involved parties can make a couple round trips, vs an hour for multiple confirmations), and potentially privacy (since not every update is globally broadcast). But these benefits come at a considerable cost of requiring a degree of active monitoring so if a counterparty posts an outdated state your software can respond, along with additional software complexity, etc.

For some applications the benefits are well worth the costs, for others they aren't.

To say it's not bitcoin is like saying multisignature transactions aren't bitcoin. In both cases they're ways of using the existing functionality. In both cases they require some additional software and different approaches. In both cases they use functionality built into the protocol which was intended for their purposes (payment channels being a concept originally described by Satoshi, and specifically accommodated in the transaction format). And in both cases they change the tradeoff surface somewhat.

treyd
0 replies
20h18m

"Large" here meaning physically large in terms of bytes, it's irrespective of the amount transferred in the tx. If you have high volume in a relatively low number of transactions and are relatively good with input/output hygiene then the actual fees paid probably won't break the bank.

nullc
0 replies
19h31m

Gold has an inferior tax treatment.

Gold has considerable storage/security costs compared to Bitcoin.

Gold has considerable fake risks/costs compared to Bitcoin.

The supply of gold is continually inflated by mining (also true for Bitcoin though the mining rate in bitcoin decreases over time).

houseatrielah
0 replies
19h28m

World gold supply inflates at 2% per year due to mining. That's an key point of the Stock2Flow model.

lxgr
3 replies
17h41m

As a hedge of what against what?

if the Feds keep on printing USD under political pressure

Have you looked at the economy in the last two years? The Fed has been burning USD at an unprecedented rate!

siwatanejo
1 replies
17h33m

Have you looked at the economy in the last 80 years? The fed and other central banks have been stealing purchasing power non-stop from the people.

lxgr
0 replies
3h45m

If you think that the Fed's primary objective is preserving purchasing power, I'd suggest taking a look at the Federal Reserve Act.

Access to a risk-free investment vehicle that preserves your purchasing power perfectly across decades is not a universal right.

factorialboy
0 replies
4h19m

Have you looked at the economy in the last two years?

Try the last 3 years. Or last 4. Or last 40 years.

They are desperately trying to control money printing (oops sorry, quantitative easing) with high interest rates, but I'm sure they'll be forced to bend to political pressure in an election year.

U.S. needs an extremely tight monetary regime for two decades, to be viable long term. And the big funds will hedge. BTC is one of those hedges.

nikolay
0 replies
20h24m

Nobody uses Bitcoin. It's not an alternative to fiat.

CyberDildonics
9 replies
17h29m

Cryptocurrency still works the same as it ever did. I would be more concerned that the average bitcoin transactions costs over $11 dollars (down from over $37 USD a month ago)

https://bitinfocharts.com/comparison/bitcoin-transactionfees...

earnesti
4 replies
17h22m

What about Lightning Network?

thefourthchime
2 replies
17h6m

That's off chain and should be nearly free

ric2b
0 replies
16h43m

It is nearly free.

SamPatt
0 replies
16h57m

If only. It's not off chain when you open a channel, rebalance a channel, or close a channel. On-chain Fees need to be paid at every step of the way.

High BTC fees impede the Lightning Network from being a true scaling solution, an obvious fact that has been dismissed for many years by adherents of absurdly small block sizes.

CyberDildonics
0 replies
16h50m

If you want an actual transaction on the actual chain that can actually be spent then you need to pay the giant bitcoin transaction fee. Why would anyone put up with the extreme convoluted nonsense of the lightning network when they could use any other cryptocurrency and have almost no fees because they aren't constraining their block sizes to sell a second layer?

There is no technical reason to do this, it was purely a political propaganda based move.

Before you respond with "but disk" or "but network" or "but cpu" look at the actual bitcoin throughput (about 700KB every 10 minutes) and look at how much hard drive space you can buy for the cost of one transaction. Then realize that individuals don't even need to sync with the chain to use cryptocurrencies. This is a well worn road.

neodypsis
1 replies
16h5m

You pay a lot in credit card fees, only that the true cost is obfuscated into the prices of the goods and services.

Also, bank transfers aren't cheap. For example, in Costa Rica, to transfer any amount from an account in bank A to another account in bank B, you pay a fee in the range of 1$-3$, irrespective of the transferred amount. If you consider transfer across countries, then you enter into 50+$ transfer fees.

CyberDildonics
0 replies
13h25m

I didn't think anyone would actually try to defend bitcoin's astronomical and completely unnecessary transaction fees. Cryptocurrencies can be a solution to everything you mentioned, just not bitcoin. Litecoin, Dogecoin and Bitcoin Cash are all bitcoin clones with more throughput and their transaction fees are a few cents to fractions of a cent while their transaction counts are on average in the same ballpark as bitcoin with a lot more headroom.

https://bitinfocharts.com/comparison/transactions-btc-eth-do...

https://bitinfocharts.com/comparison/transactionfees-doge-lt...

TheDudeMan
1 replies
16h55m

Why concerned? It’s a free market. That is the going rate. Long term, it’s a good thing because it keeps miners incentivized.

CyberDildonics
0 replies
16h48m

I would be concerned if I was a proponent of bitcoin as a worthwhile cryptocurrency, but I'm not.

nullc
4 replies
19h34m

Some people own bitcoin only because they expect its value to increase due to demand from others. There is nothing inherently invalid about this-- speculation occurs in all kinds of valuable assets and it serves the public good of creating a demand buffer.

For those parties, bitcoin's general properties are not very relevant and a centeralized list maintained by DTCC may well better serve their particular needs. To the extent that it does: more power to them!

miohtama
3 replies
18h35m

Note that the same is for gold. Most people own gold ETFs, not physical gold, and most gold’s value is speculation (not industrial use).

vasco
1 replies
17h51m

Are there any asset classes in public markets that aren't driven primarily by speculation?

nullc
0 replies
17h34m

Sure, any kind of relatively short duration dividend/interest yielder, to give an example. Though it's possible to make extra money with t-bills by trading against rates, no one can say thats a primary driver. Likewise for much of the bond market.

FactKnower69
0 replies
15h45m

Gold did at one point in history have an actual use case apart from speculation and being pretty: it is almost uniquely suitable as currency and store of value (along with silver) because it is hard to create, easy to purify and non-destructively measure the purity of, fungible, and can be easily split and recombined into units of any desired weight

as far as having an actual historic or present day use case, blockchain snake oil is still in search of a problem only it can solve to this day

beambot
3 replies
16h17m

The bigger irony will be when the US Government steps in and seizes all BTC & ETH within their reach so that they can create their very own crypto-backed central bank digital currency (CBDC) as the new "gold standard" a la Executive Order 6102 in 1933:

https://en.wikipedia.org/wiki/Executive_Order_6102

Incidentally: When you look at currencies (and governments) on long enough time scales, you'll see that they're pretty ephemeral -- e.g. very few currencies or governments around today were around in (roughly) the same form 200 years ago. I consider it a benefit that we might have a way of persisting wealth that doesn't involve rent extraction or digging shiny metal out of the ground -- though I admit to not being a fan of the "wastefulness" of PoW in the midst of energy decarbonization.

If you want a fun watch: The History of Paper Money on Youtube is a fascinating look at how currencies, banks, central banks, and fiat money all came into existence. TLDR: Our "modern" approach to money was a giant "too big to fail" ponzi scheme largely perpetrated (multiple times) by John Law. Wild.

https://www.youtube.com/watch?v=-nZkP2b-4vo

david_shi
2 replies
16h15m

If they try to pull this off, human civilization will have entered full 1984 territory

beambot
1 replies
16h13m

My grandfather said something similar about the actions taken in 1933... though a bit more colorful & without the reference to 1984.

david_shi
0 replies
15h38m

I have to believe that history isn't just cyclical, and that somehow we breakthrough these cycles of violence. Maybe that's called faith.

dang
1 replies
15h2m
fancyfredbot
0 replies
10h51m

Genuinely mortified. I'll resist the urge in future. Thanks for keeping HN such a great site Dan.

neodypsis
0 replies
16h10m

I think you misunderstand the purpose of ETFs.

mrinfinite
0 replies
17h10m

Satoshi Nakamoto means Central Intelligence Agency LITERALLY!!!! Just the facts

anonu
0 replies
17h30m

Spot on. DeFi relies heavily on CeFi.

david_shi
70 replies
15h12m

Bitcoin exists to solve the principal-agent problem that comes with delegating control of the money supply to singular institutions.

If you look at the history of empires, from the Romans to the Han, it is littered with instances of societal decline as a direct result of inflation and overspending. This unilateral currency debasement is much harder if the collective (and global) definition of money is determined by distributed networks of computers.

Maybe Bitcoin itself isn't the final form, but the fact that distributed systems and cryptography tech is out there means the cat is out of the bag.

Even if your view on the crypto industry is negative, it's important to take some time to understand why millions of people around the world are involved in it. It's not only because of the appeal of ponzi schemes.

kibwen
15 replies
14h42m

> If you look at the history of empires, from the Romans to the Han, it is littered with instances of societal decline as a direct result of inflation and overspending.

Not only was the decline of the Roman empire too slow and variegated to attribute to a single cause, "inflation and overspending" isn't even on the shortlist. If we're oversimplifying, it was more akin to the opposite of the sentiment that you're shooting for here: the decline of Rome was due to the erosion of centralized authority, which increased factionalism and caused the elites to at best become apathetic to the plight of the empire and at worst actively pursue its destruction for their own gain, leaving Rome ripe for disruption from without. A blockchain wouldn't have saved Rome.

adastra22
12 replies
12h54m

Also if you want to attribute the decline of Rome to any monetary policy, deflation is much more likely. Periods of deflation in the 4th and 5th centuries led to hoarding and burying of coins rather than productive use of wealth, leading to declines and further deflation. Rome never escaped from this deflationary trap and many of these coin hoards were never dug up.

Ironically bitcoin attempts to replicate this failed monetary policy.

Kathula
8 replies
11h45m

Explain how Bitcoin, which for the next 100 years will continue to print new coins, is attempting to replicate deflation. Maybe inadvertently, by people losing access to their Bitcoins for various reasons, but the design itself certainly isn't deflationary. Not even in its final form, the supply will merely be constant.

Also I find it humorus when people complain about deflation, which pretty much is the natural condition of the world. New techniques and improvements will unenviably lead to products costing less. The problematic factor has always been the current ruling money being controlled by a central authority who will debase it.

tromp
3 replies
10h6m

for the next 100 years will continue to print new coins

The new coin supply (block subsidy) is reducing at an exponential rate and will soon not be able to even compensate for the rate of lost coins.

Kathula
1 replies
8h10m

The question was not if Bitcoin overall is deflationary. The comment said it was by design, which it arguably isn't because by design it's actually inflationary.

adastra22
0 replies
1h7m

Once all bitcoin is issued, there will never be any more. That is intrinsically deflationary.

I really don't see how you can argue that bitcoin is inflationary by design when the period of inflation is a temporary necessity for the initial issuance, and then never repeats[1].

[1] Well, ignoring BIP42 that is.

adastra22
0 replies
9h34m

Arguably we’re already at that point.

somenameforme
2 replies
11h37m

Constant supply creates deflation because population/usage increases. You're right that products will cost less - which is exactly what deflation is.

The reason it's because taboo in modern times is ostensibly because it creates a disincentive to investment. Why invest in something that might return 5% with some risk, if your money will be worth an almost guaranteed 5% more in a year anyhow? IMO the "real" reason is because it's a proxy for politics. Governments spending trillions of dollars sends inflation skyrocketing - the US is only slightly guarded against this because of our unique ability to 'export our inflation' - a web search can elaborate more on the term if one is unfamiliar with it. So opposing inflation is largely a proxy for opposing excessive spending which is one of the main political divides, which is odd because both parties spend like maniacs - but one pretends to not want to.

Kathula
1 replies
7h49m

If by creating a "disincentive to investment" you mean a disincentive to gamble their hard earned money on the stock market, then yes. The current situation where (at least before interest rate was somewhat high) the average man had to spend time and effort by going to the stock market with their money is not healthy. You shouldn't have to gamble your money just so it doesn't lose value by merely holding it. Investments will of course still exist, it will just be of a higher quality/yield. Because now there's actually an alternative to "investing" on stocks.

adastra22
0 replies
58m

Commodity currency does have a "disincentive to investment" which has a measurable negative effect on the economic climate. This was first identified and studied by Silvio Gesell in the early 20th century, then John Maynard Keynes a few decades later. Removing this disincentive is what ushered in the post-WW2 period of prosperity and growth that we're still living in today.

The part your analysis is missing is that for a commodity currency there is a whole segment of productive, non-risky investments which cannot raise capital in a deflationary environment. If deflation is 5% and a civic works project with an effectively guaranteed 3% return is fundraising, who in their right mind would put money into that? Better to hodl than to invest in your community. There is, btw, a deep tie between this result and Henry George's analysis of the impact of rents, if you're familiar with that.

This basic phenomenon of the risk-free interest rate being non-zero, and its ramifications for the economy, is one of the most confirmed results of 20th century economic research. If you could get the risk-free interest rate to zero, it would boost the economy and lower unemployment with absolutely no ill effects whatsoever.

troupo
0 replies
8h54m

Explain how Bitcoin, which for the next 100 years will continue to print new coins, is attempting to replicate deflation.

The supply of bitcoins is limited. It's harder and harder to print new coins. It means that 100 years from now the new generations will have to make do with 0.0000000000000001 of a bitcoin while people who hoarded just 1 bitcoin 100 years prior would be infinitely rich.

The only incentive in bitcoin is to hold on to it as long as possible. And we've literally seen this already.

somenameforme
2 replies
11h44m

You're conflating the consequences of modern and ancient inflation, which were extremely different. In modern times when we want to print money, it just involves a mixture of worthless sheets of paper or even more worthless entries in a database. So we have the luxury of being able to just pull trillions of dollars out of thin air, devaluing all of the other preexisting dollars in the process.

But in the past, money was made of materials that themselves had major value - like silver. And so you couldn't just print more money, because you had to have the valuable resources that it was made of to do so. So the way the Empire dealt with this was by simply reducing the percent of those values. Wiki has a table showing the composition of the Roman Denarius over time here. [1] The original denarius, from the 3rd century BC was 95%+ pure silver. By the 3rd century AD it was down to 5% silver. So the process of printing money in ancient times, ended up making the old money worth more, which is the exact opposite of what happens now a days!

A good analog here is the US penny. We've been debasing it over time, but all the way up until 1982, the penny was made with at least 95% copper. [2] So old pennies are actually worth more than $0.01 in raw materials, which is why it's currently illegal to melt pennies (and nickels) or sell them for their material value. So there are plenty of people hoarding these, waiting for the government to eventually declare them obsolete - enabling them to melt them down and make a large profit. It's a nice investment because your upside is uncapped and your max loss is $0, if you can get them at around the fiat rate.

Now imagine if 225 pennies was a year's salary, as was the case for e.g. Julius Caesar's professional soldiers and Denarii. It creates a huge motivation for hooooold, precisely caused by the government spending. Same today where the more we inflate the currency, the more old pennies become worth.

[1] - https://en.wikipedia.org/wiki/Denarius#Value,_comparisons_an...

[2] - https://en.wikipedia.org/wiki/Penny_(United_States_coin)#His...

adastra22
1 replies
9h50m

I don’t think you understood my comment, at all. Debasement in the late Roman Empire was triggered by deflationary conditions. They needed to inject more money and couldn’t (because there literally wasn’t more silver), so they debased it. But why did they need to inject more money? The deflationary spiral I mentioned.

somenameforme
0 replies
6h50m

The reason they ran out of money is because they were spending more than they had - and then spending even more, exactly the same as today. That has nothing to do with deflation. For instance one obvious cause is that the Roman Empire kept increasing the size of its military. By the time it collapsed, it had its largest military ever, by a wide margin. Again, table [1] here. Note also that is just nominal forces, it doesn't include the e.g. Barbian forces Rome also began integrating into its military machine to try to keep everything going just a bit longer.

[1] - https://en.wikipedia.org/wiki/Size_of_the_Roman_army

david_shi
1 replies
13h23m

The Romans were only able to fund the expansion of the empire by overextending their resources. This meant that the empire became too expensive to maintain without relying on tactics like currency debasement, subsequently triggering many of the other symptoms of decline that you listed.

Of course, we aren't living in the Roman Empire today. But what is consistent is that delegating monetary policy to a third party means that they can overspend and inflate the currency base, charitably for reasons of national interest, cynically for their own gain.

The rise of cryptocurrencies like Bitcoin is a sign that many people want to reduce their personal exposure to this.

lmm
0 replies
12h43m

The Romans were only able to fund the expansion of the empire by overextending their resources.

No, they never ran out of the resources needed to expand. It just became more individually profitable to spend those resources on internal competition, and eventually civil war, than on growing the pie.

This meant that the empire became too expensive to maintain without relying on tactics like currency debasement, subsequently triggering many of the other symptoms of decline that you listed.

Even if we take this at face value, that doesn't sound like currency debasement causing the collapse - if anything it allowed them to stave it off at least for a time. Businesses renegotiating their loans/bonds is normally a precursor to going bankrupt, but that doesn't mean renegotiating your loans/bonds causes bankruptcy; if you took your loans/bonds in a form where you can't renegotiate them, that only makes you more likely to go bankrupt sooner.

(Traditional currencies are in many ways like a slightly odd bond that doesn't pay interest)

qualifiedai
13 replies
14h54m

Millions are involved precisely because of the appeal of get rich fast and ponzi schemes.

Tens of thousands are invoved because of its technological promise and appeal which you've described.

This imbalance is the main problem crypto industry needs to solve before it truly reaches its potential.

david_shi
12 replies
14h45m

This is definitely true in the West.

I said millions because of every day crypto usage in countries like Argentina and Turkey, where inflation makes it challenging to save money, and in countries where there are high remittance rates.

More builders are definitely needed to improve the crypto user experience across a range of categories.

democracy
9 replies
13h6m

...another fairytale about people in poor countries using crypto ))))

Nothing beats good old USD or EURO as an asset if you live in a country with hyperinflation.

david_shi
4 replies
13h1m

USD and Euro are great assets to hold if you have the ability to access banking services that support them, which isn't universal.

Are you questioning the data?

https://www.statista.com/statistics/1202468/global-cryptocur...

lottin
2 replies
12h36m

"The data" that you link to doesn't support your assertion that people in third world countries use bitcoin to protect themselves from hyperinflation.

Also USD and Euro are NOT great assets to hold. People only hold cash because they need it for transactions purposes.

democracy
1 replies
6h13m

It is the best asset to hold if you local currency goes -5% every day. Easy to buy (officially and not), easy to liquidate, can be used as unofficial currency for trade

lottin
0 replies
1h58m

Not by any stretch of the imagination. A highly volatile asset isn't suitable for storing value reliably. This is because the chances of you having to liquidate your position at a loss are very high.

democracy
0 replies
6h15m

sometimes your "forex banking services" are dodgy people on the street - that's how late USSR functioned...

toenail
2 replies
13h3m

Did the USD or EURO gain +7000% in the last decade? Didn't think so.

lottin
1 replies
12h23m

If it did, your salary must have shrunk by 87.5% (or the company that you work for would have gone out of business).

toenail
0 replies
12h10m

Because in reality all salaries went up exactly the right amount to compensate for inflation? Hm, the system doesn't seem to work like that.

kragen
0 replies
12h52m

i trade bitcoin with other people here in argentina several times a year; it's by far the easiest and safest way to send money either into or out of the country, and it's widely used by money changers

remember that this is a country where the police take dollar-bill-sniffing dogs onto river ferryboats to prevent people from taking usd or eur across the river to their bank in uruguay

someone in a [dead] comment said, 'The most traded crypto assets in Argentina, by far, are dollar-pegged crypto-currencies.' this is absolutely correct, and from my point of view it's a total plague. also virtually everybody has their bitcoins in binance. but most of those people will still buy and sell bitcoin if that's what you want

chemicalnovae
1 replies
13h5m

Isn't crypto used in these places simply a more convenient form on pinning to the USD than due to any inherent properties of the crypto itself?

solumunus
0 replies
11h59m

Convenience is a property.

marenkay
11 replies
14h38m

Bitcoin just like capitalism is a horrible failure making life worse for humanity and no proof exists it made anything better. Both accelerate the destruction of the planet and humanity.

It’s ridiculous to claim any of this is good just because you think you have a chance to get some imaginary part of the big cake.

a_gnostic
5 replies
14h32m

Bitcoin saved my cousin from starvation. Can the same be said for anti-capitalism, eg. Communism? Nope, because Holodomor.

marenkay
2 replies
14h11m

At the price of putting someone else into starvation which you ignored…

MacsHeadroom
1 replies
11h12m

Markets are not zero sum. Value is "created* in a growing market.

milutinovici
0 replies
10h31m

Except Bitcoin market is zero sum. No value is being created.

paulryanrogers
1 replies
14h15m

Bitcoin is more like communism than autocratic regimes that starve people through malice or incompetence.

The answer to states that cannot manage their own money supply isn't outsourcing to ecologically disastrous shit coins limping along at 7 TPS.

All that said, hope your cousin is safe and well fed.

marenkay
0 replies
14h10m

Because it puts the power into the hands of a ruling class which takes everything? Yeah, it’s like real communism not like the theories…

Yodel0914
4 replies
13h9m

Capitalism has its problems, for sure, but it is the only system in history that has raised the majority of people out of abject poverty. Even Marx recognized this, which is why capitalism is a necessary step on the path to Marx's communism.

And of course Marx was seeing capitalism before it had done the majority of the good it has done over the past ~200 years.

marenkay
3 replies
12h53m

I lived in capitalism for 50 years. I’ve seen hyper capitalism reduce or remove education, devalue income and Labor, force people to work two or three jobs to survive barely. That’s in a western society where capitalism is supposed to work.

If anyone thinks the good it did is anything but an accident I expect some people will be really surprised when it turns out how bad things are.

At this point it’s ignorant to not see how much damage it has done. But okay. Keep riding the dead horse.

Yodel0914
1 replies
12h3m

I apologize if I'm wrong, but "3 jobs to survive" sounds like you're living in the US. I don't think equating the US political and economic system with "capitalism" is particularly useful - it is a capitalistic society, for sure, but it is far from the only one.

The US is, for whatever reason, accepts extremes of both wealth and poverty. Many other capitalistic societies choose a different mix, sacrificing the upper extremes to protect against the lower extremes.

marenkay
0 replies
4h17m

Nope, we are talking about Europe.

wesapien
0 replies
12h0m

First it giveth, then it taketh away.....Well it's all relative to where and when. From the perspective of someone in PRC, participating in markets and having some form of capitalism helped. Deng literally lifted China out from Up the Mountains down to the Countryside into the cities and into everyones homes. We've just lived long enough to see things deteriorate. Nothing goes straight up forever, life is stochastic.

shock-value
9 replies
14h28m

Speaking of Bitcoin specifically, if this is your view then you should take some time to understand the severe societal and economic problems that come with persistent deflation. And more generally, determining the optimal level of the money supply to match the needs of a dynamic economy is not trivial — there is no simple formula involving straightforwardly measurable variables that I am aware of.

toenail
4 replies
13h0m

And more generally, determining the optimal level of the money supply to match the needs of a dynamic economy is not trivial

No, we don't need some grand wizards in an ivory tower to finely tune the amount of money in the economy, that idea is absurd. The economy has worked fine for thousands of years before they started doing that. In fact, since they started doing it we've seen ever growing boom and bust cycles.

cortesoft
2 replies
12h57m

This is the OPPOSITE of the truth. Boom and bust cycles were much worst in the pre-central bank world.

toenail
1 replies
12h40m

Are you saying the global financial crisis was MUCH smaller than previous busts?

Ekaros
0 replies
12h24m

I would say that... Sure stock values and other over valued assets dropped. But how many people actually starved to death?

kragen
0 replies
12h51m

...there were a lot of boom and bust cycles before the federal reserve

david_shi
1 replies
13h44m

Bitcoin and BFT consensus primarily solve the principal-agent problem, and give us a better means to experiment.

Personally, I don't think a deflationary global reserve currency is the precise answer, but I do believe that these experiments in monetary governance (like Ethereum's burn and mint model) will allow us to move closer to it.

lottin
0 replies
12h12m

Bitcoin has no governance mechanism for managing the money supply. If it was adopted as money, governments would have to implement some mechanism to manage the bitcoin supply, just like they did under the gold standard. Therefore it doesn't solve any principal-agent problem.

throw101010
0 replies
12h21m

Bitcoin is not a deflationary asset yet. It is a disinflationary asset until around year 2140 (with the rate decreasing every ~4 years and trending towards 0, at which point it will be deflationary).

For now its supply still inflates by ~1.7% a year.

Neither you, nor I will live to see that moment when the last bitcoin will be mined (as long as miners keep mining in our lifetime).

Bitcoin exists as an option to a lot of very inflationary assets (currencies which not that long ago almost reached 2 digit inflation rates) and having different kind of assets should be welcomed in my opinion, as it seems like a good way to diversify the risk you can't "straightforwardly measure".

I like to hold at least one asset for which I can almost guarantee a supply/emission won't change... better yet I can trustlessly verify it. If these propositions are not attractive to you or others, they don't have to acquire this asset either, it is completely opt-in, unlike the fiat money which your government forces you to acquire to pay their taxes.

Eliezer
0 replies
13h33m

Grow per capita nominal GDP by a 6%/year level target. (NGDPLT.)

0raymond0
6 replies
12h36m

When I learned about the limited supply of Bitcoin, I thought, "Great, no more rampant currency printing!" But then they developed the fork technology, which can split one Bitcoin into countless pieces. I guess I underestimated the extent of human greed. Thankfully, it's all digital and our math can handle it.

fearface
5 replies
12h27m

No, weird that you’re comment is so high up, but shows how little crypto knowledge is around in HN. A Bitcoin is a Bitcoin, but it consists of smaller units called Satoshis. Like Dollar and Cents. Since the beginning of Bitcoin. A fork is a copy of the underlying source code of Bitcoin, which in itself has no value at all. You would also need to find people who run nodes for your fork and start convincing exchanges that your fork should be supported too…so no, this is not splitting Bitcoin

lottin
2 replies
11h58m

If you fork the bitcoin blockchain you have now two ledgers, each one telling you that a certain number of bitcoins really exist. Who is to say that one is right and the other is wrong? In this scenario, it's debatable how many bitcoins are in existence.

sowbug
1 replies
11h11m

You might want to read the Bitcoin whitepaper. There is zero ambiguity in the situation you describe. That is the essence of the proof-of-work (or proof-of-stake, take your pick) solution to the Byzantine generals problem.

lottin
0 replies
3h32m

The ambiguity has to do with the fact that we don't know for sure which blockchain will prevail, because the protocol is unenforceable.

wesapien
1 replies
12h18m

I thought it was the reverse. Satoshi is the unit at the code level and Bitcoin is just a representation for UX reasons.

zubairq
0 replies
10h18m

Yes this is accurate, satoshi is the unit and Bitcoin is more of a UX thing

marricks
5 replies
14h45m

societal decline as a direct result of inflation and overspending

Really? Direct? Pretty sure the Roman’s had many other things happening upstream of overspending.

Many things were going wrong.

kemotep
4 replies
13h55m

We have as many reasons to believe that the legacy of the Roman Empire, through the Catholic Church, still exists today and is a billion people strong as we do why it fell at any one particular day for any one particular reason.

kragen
3 replies
12h50m

i can't parse your comment, but it seems to presuppose that the roman empire fell on one particular day; there seem to be a lot of candidates, though. which one do you mean

kemotep
2 replies
8h38m

There are several days that could be candidates for the day Rome fell.

There are several reasons we could argue that the Roman Catholic Church is the continuation of Rome and so Rome never truly fell.

That is what I was trying to say in the previous comment.

kragen
1 replies
7h55m

it probably makes more sense to argue that the byzantine empire is the continuation of rome, but in a broader sense, all of human civilization is the continuation of the indus valley civilization

kemotep
0 replies
6h53m

The point being there isn’t a single cause to the fall of Rome and there are even a few arguments that Rome continued in various forms, some of which still exist today.

jtwoodhouse
1 replies
15h6m

"Maybe Bitcoin itself isn't the final form, but the fact that distributed systems and cryptography tech is out there means the cat is out of the bag."

The bitcoiner argument would be that only bitcoin has reached a level of decentralization to survive, and the powers that be stand ready to crush any would-be stronger substitutes before they reach critical mass.

ijustlovemath
0 replies
14h41m

Bitcoin is far too slow and far too energy intensive to ever pose a real threat to a centralized system. I do think there is truth in that the future of currency is decentralized though!

johnwheeler
0 replies
13h57m

Uhhh but what about the Keynesian tools we need to get us out of jams that a fixed money supply doesn’t afford us? They apparently worked great the last two crises.

I know, I know… it’s all part of one of Dalio’s big cycles, and I just haven’t seen it play out yet, I’m naive and all that. Bitcoin save us.

imjonse
0 replies
12h21m

Are you saying all those talented individuals who were crypto experts and became LLM/AI experts overnight and promoted both with the same zeal are actually concerned about societal decline and not just schemers? Faith in humanity restored.

JeffSnazz
0 replies
12h28m

If you look at the history of empires, from the Romans to the Han, it is littered with instances of societal decline as a direct result of inflation and overspending.

There is little evidence to support this. There is an abundance of evidence of empires responding to the crisis of a population overburdened by debt by cancellation, though, if we're going by history to dictate what our current state should do....

monero-xmr
58 replies
20h43m

The death of crypto was written endlessly on HN. The investor activity is much more bullish over last 6 months. I think the only hot VC right now in all of tech is AI and blockchain.

Now a lot of people here will be investing in Bitcoin without even knowing it, as their passive fund investments begin accumulating. The sweet victory against the no coiners.

ESTheComposer
45 replies
20h39m

People in HN are in a massive bubble; you see it with other topics too. It's nice to look here for some tech sentiment and interesting article sometimes, but for most cutting edge stuff this forum is always full of naysayers.

npoc
27 replies
19h31m

There's a fair amount of ill-placed arrogance. It seems that the majority on this board confidently and incorrectly believe that they know all there really is to know about bitcoin. Essentially that it's a scam that wastes energy.

If you try to help them understand, you're generally attacked as if you are shill, and then they continue along in their ignorant bubble. It's a shame, but their attitude isn't conducive to me losing any sleep.

You buy bitcoin at the price you deserve.

smoldesu
19 replies
18h52m

Bitcoin itself is a scam that wastes energy. Without custodial ownership, scam transactions are resolved no different than legitimate ones. Without diligent regulation, Bitcoin's power usage can easily balloon beyond what any single institution would consider appropriate. Both of those things are demonstrably true, and providing Bitcoin ETFs via regulated exchanges changes neither one.

TapWaterBandit
18 replies
14h50m

Lol power usage is such a strawman argument. 1% of all electricity in USA is used watching Netflix but you don't hear people complaining. But running a global permissionless decentralised store of value currency network should supposedly be "super cheap" or it's an environmental disaster and must be stopped.

kibwen
17 replies
14h32m

The reason that bitcoin's energy usage is a philosophical nightmare is because it's a system where energy consumption is the product. As opposed to industries which are "merely" energy-intensive, let's take aluminum refining for example, spending more energy to refine aluminum does not create more demand for aluminum, but spending more energy on bitcoin increases the price of bitcoin, which induces more demand, which increases the price, which incentivizes mining, which costs more energy, and so on in a vicious cycle. Proof of work is a problem; it's conspicuous consumption on a hyper-industrial scale, and it's coming at the absolute worst time in human history for us to be wasting energy, let alone to be inventing the optimal machine for wasting energy at an increasing rate.

npoc
9 replies
11h24m

The main problem here is that you're looking at the energy use as a waste. It's absolutely not, but in order to understand why, you need to understand what's wrong with the current monetary system and the terrible effects it is having on the world.

You're also missing that bitcoin's game theory means that it will ultimately only use unwanted/wasted energy. Bitcoin miners can mine anywhere in the world and those trying to use energy that's in demand by the general population won't be economical.

guappa
6 replies
10h31m

The main problem here is that you're looking at the energy use as a waste. It's absolutely not

It is. Mining is literally bruteforcing…

npoc
5 replies
8h37m

It's an abstraction of work. All sound money requires equivalent value work to produce. And the work done is stored as protective "walls" in the blockchain, one on top of each block, piled higher and higher as time goes on, to become impenetrable. It's quite beautiful.

guappa
4 replies
7h56m

It's literally doing busywork just to assign a value to the mining. It's beautiful if you're a business major who has no regard to real world.

npoc
3 replies
5h57m

What do think happens if you let people create money without doing the equivalent work?

guappa
1 replies
5h5m

Why do we let people create money where the work is "waste energy" instead of create money where the work is "build something we need"?

npoc
0 replies
44m

Because then you are monetizing the work in other ways and you still end up creating the money for free.

smoldesu
0 replies
3h2m

You waste less energy? Ethereum seemed to figure this out despite being entirely dysfunctional.

smoldesu
1 replies
11h11m

but in order to understand why, you need to understand what's wrong with the current monetary system and the terrible effects it is having on the world.

Are we about to find out why, or do I have to pay for your memoir to understand? I've been dying to hear you expand on this for a while now.

olalonde
0 replies
10h59m

https://wtfhappenedin1971.com/ is a good starting point.

TapWaterBandit
6 replies
13h44m

Proof of Work is an energy-intensive solution to a very deep and old social problem: how do you verify transactions between parties over a great distance/online without a trusted intermediary?

Proof of work is enormously socially valuable and will change the world. Bitcoin may not be the PoW application to do it (although it also might be) but proof of work is here to stay because of the huge advantages it has over the existing system where individuals/institutions insert themselves between transactions to their own profit.

RE energy, not here to argue philosophy. Just going to point out that if that is your concern luckily the world is going over to renewables so that particular objection will be gone soon anyway.

kibwen
4 replies
13h17m

> Just going to point out that if that is your concern luckily the world is going over to renewables so that particular objection will be gone soon anyway.

This is dangerously missing the peril of the current situation.

The problem with our current energy makeup is not "there's not enough renewables".

The problem with our current energy makeup is "there are too many carbon emissions".

As a first-order effect, it does not matter how many renewables we bring online. What matters is taking fossil fuels offline. It does not matter if renewables make up an ever-increasing percentage of an increasing energy market, because the problem is not the relative market share of fossil fuels, it is the absolute amount of emissions, which is already more than our planet can handle. And the increasing demand for energy makes taking fossil fuel plants offline less viable than it otherwise would be, and bitcoin is a nontrivial component of that and it threatens to grow at an exponential pace, which makes it an existential threat to mankind.

Please trust me when I say that I do not give a damn about the price of bitcoin. What I care about is stopping runaway energy consumption, and from that perspective proof-of-work is the biggest existential threat to humanity since the atom bomb.

TapWaterBandit
2 replies
12h52m

Please trust me when I say that I do not give a damn about the price of bitcoin. What I care about is stopping runaway energy consumption, and from that perspective proof-of-work is the biggest existential threat to humanity since the atom bomb.

Mate, this is ridiculous.

Global energy usage was 179000 Twh (terawatt hours) in 2022. (https://ourworldindata.org/energy-production-consumption)

Bitcoin energy usage was at its highest in 2022 at 200 Twh. (https://www.statista.com/statistics/881472/worldwide-bitcoin...)

So 200/179000 * 100 = 0.11%

Bitcoin energy usage accounted for 0.11% of global energy usage and you think it is the biggest threat to humanity since the A-Bomb? Bitcoin is entirely irrelevant to the grand scheme of things re climate emissions.

So you are wrong on this point:

bitcoin is a nontrivial component of that and it threatens to grow at an exponential pace

Bitcoin IS a trivial component of overall emissions and even with an insane ramp up would not be close to being the biggest issue re emissions.

Kbelicius
1 replies
10h8m

Bitcoin energy usage accounted for 0.11% of global energy usage and you think it is the biggest threat to humanity since the A-Bomb? Bitcoin is entirely irrelevant to the grand scheme of things re climate emissions.

GP already explained why he thinks that and you did not spend a word addressing that. Here is what GP said:

The reason that bitcoin's energy usage is a philosophical nightmare is because it's a system where energy consumption is the product. As opposed to industries which are "merely" energy-intensive, let's take aluminum refining for example, spending more energy to refine aluminum does not create more demand for aluminum, but spending more energy on bitcoin increases the price of bitcoin, which induces more demand, which increases the price, which incentivizes mining, which costs more energy, and so on in a vicious cycle.

Basically, for BTC to "go to the moon" its energy consumption must also "go to the moon".

TapWaterBandit
0 replies
9h31m

I didn't address that point because it is conceptually and factually incorrect. But I will breakdown why for your benefit:

The reason that bitcoin's energy usage is a philosophical nightmare is because it's a system where energy consumption is the product.

False. The "Product" is a permissionless global peer to peer financial network using a (relatively) non-depreciating commodity. Energy consumption is a side-effect of providing this product/service. I'm sure if you thought about it for a bit you would have to agree here. Noone is mining bitcoin for the sake of it, they are mining it for profit and the only reason bitcoin has value is other attributes of the network/commodity itself. So not a good start from OP.

As opposed to industries which are "merely" energy-intensive, let's take aluminum refining for example, spending more energy to refine aluminum does not create more demand for aluminum, but spending more energy on bitcoin increases the price of bitcoin, which induces more demand, which increases the price, which incentivizes mining, which costs more energy, and so on in a vicious cycle.

This is factually incorrect and easy to see why. Here is a link to an overlapping chart showing the hashrate for bitcoin against the market cap (https://bitinfocharts.com/comparison/hashrate-marketcap-btc....). You'll notice the lack of connection between the market cap (overall price) and the hashing rate. This is an empirical fact based on the data we have so op is wrong once again.

It is true that price increases do incentivise more mining but the price increases aren't DRIVEN by increases in the mining. Otherwise it would be possible for anyone anywhere to spin up bitcoin farms and make guaranteed profit because the price would rise to a level commensurate with the energy expended. It is the other values of the network (peer-to-peer permissionless decentralised finance with an eventually depreciating commodity) that drive the price. Those are being priced by the market currently and more and more people are deciding to store wealth in the Bitcoin network as opposed to the Fiat network or other assets like property/gold/etc because they feel it gives a better combination of:

1. Store of value (or possibility for profit)

2. Functionality

Bitcoin mining is very often not profitable if you don't have cheap energy or do it collectively which is why it is moves around so much to find cheap energy sources (often using the cheapest forms of energy available which is burn off/extra gen that has no otherwise in grid) and miners pool to take a portion of the gains from mining the next block and getting the bitcoin that come with it.

OP's view of Bitcoin and proof of work is a very slanted one at best, completely factually inaccurate at worst.

npoc
0 replies
9h49m

Harnessing energy is the basis for civilization. The amount of energy used is highly correlated to the level of civilization.

Using energy is not an issue, it's how we produce it that matters. This applies to all forms of energy use of which bitcoin is just a tiny fraction.

Bitcoin will not compete with current energy demand which is geographically constrained. Bitcoin miners can operate at any location in the world and are incentivised to use free, unwanted, waste energy. Any miners that try to increase the demand of current energy supplies will be uneconomical and go out of business.

Also miners using more energy does not directly increase the price of bitcoin. Ultimately the amount of (otherwise wasted) energy used by the network will be limited by the transaction fees which are a free market.

npoc
0 replies
9h32m

All sound money has been proof of work since the start of time. It is fundamental to a lasting and fair monetary system. We currently have a fiat system where the population have to work for it, while the elite can effortlessly print it, becoming ever more unjustly powerful as a result. They are looting the world.

Even today, gold miners are working to dig up their proof of work which they can sell into the market. If the work they did was worth more than the gold they found, they'd stop. And if was worth less, more miners would mine, increasing the supply and devaluing the gold.

The only difference with bitcoin is that the work is abstracted. It's simply anchoring the creation of a digital token to work in the physical domain. At the same time, the work performed is protecting the network from attack - it's what makes the blockchain immutable. The work is not wasted - it is being stored as "walls" on top of each block. The further down the block chain you go the more walls of protection you would have to break. It's breathtakingly beautiful.

CynicusRex
3 replies
9h32m

You buy bitcoin at the price you deserve.

This is out-of-touch on so many levels. What about people born in ten years? What about people born in ten years in developing countries? The only thing crypto“currencies” have done is increase the wealth disparity and greed.

https://www.cynicusrex.com/file/cryptocultscience.html

npoc
2 replies
8h41m

The people born in 10 years will have access to a hard money that is time proven, more stable and less risky than it was 10 years ago. They will also see the price of their bitcoin go up relative to fiat. The same goes for people born in 300 years time.

Regarding developing countries, bitcoin provides anyone with a phone access to a bank, and one that offers better savings accounts than any fiat account.

CynicusRex
1 replies
2h27m

So merely by luck of being born earlier you deserve to be wealthier than any future generations?

npoc
0 replies
48m

Go and study it for 100hrs and if you combine that with a bit of intelligence, you'll be in the same position as the "lucky" bitcoiners who get wealthy buying it earlier.

Alternatively wait until every man and his dog already have it and the price has stabilised and it's a no brainer (say 10 or 20 years)

You buy bitcoin at the price you deserve.

moose_man
1 replies
19h10m

It's not arrogance and not just that it is scammy or wasteful to the environment. Bitcoin is another mechanism the increases inequality.

I think Bitcoin is one of the many way that the economy is rigged against economically insecure retail investors. The more money that gets funneled from the middle class into Michael Saylor and crew's pocket the closer it brings us to civil war.

Checkout

End Times: Elites, Counter-Elites, and the Path of Political Disintegration by Peter Turchin

https://www.amazon.com/End-Times-Counter-Elites-Political-Di...

npoc
0 replies
17h42m

Ironically this is exactly what bitcoin fixes. Fiat currency is the main cause of these issues (look up the Cantillon effect as an example). It's a cancer on the world, slowly destroying it.

I highly recommend reading "The Creature from Jekyll Island" which explains everything that's wrong with central banking/fiat currencies and will help you understand the devastating effect it is having on the world.

Sure, there is a transfer of wealth while bitcoin is monetizing. But you buy bitcoin at the price you deserve. Michael Saylor deserves everything he's going to get. He's a visionary with balls of steel - he's laid it all on the line. If you try to avoid making bitcoin whales richer by not buying bitcoin, you'll simply be cutting off your nose to spite your face.

drdrek
0 replies
5h24m

Its so annoying that Non-WBA holder around here keep arguing with me. I try and explain to them why Walgreens Boots Alliance stock is the future of investing but they are kept in their non WBA bubble.

Good luck buying WBA stock at a higher price in the future!

dgreensp
11 replies
20h0m

People who aren’t in the tech/VC or crypto echo chambers can see that it’s (still) overhyped and mostly scams. They don’t really care or have more positive sentiment than HN.

ESTheComposer
10 replies
19h57m

Ok and from my anecdotal experience the opposite is true, so I guess we're at a crossroads here. Either way doesn't have bearing on how HN views crypto

dgreensp
8 replies
17h27m

Well the claim is that if HN isn’t bullish on crypto in 2024 it must be inside a strange “negativity bubble.”

ESTheComposer
7 replies
17h15m

There's a difference between being bearish and being fully anti crypto and just spreading conjecture. Being bearish is very normal, being rabidly anti crypto on every crypto thread on HN like a couple folks who are in this very thread is being in a bubble.

smoldesu
6 replies
15h38m

Some people are just like that. The same thing happens on the other side of the fence alarmingly often, where someone will claim Bitcoin is the second coming of Christ and sell their home before knowing basic technical details about the network. Or people who fully understand the system, and deliberately lie about a coin's functionality for petty gain. On either side there are people promoting altruistic regulation and acceleration, but at a larger scale we're mostly describing greedy businesses (on either side) and... put politely, "government dissidents".

So, as is the case with any meaningful investment, you have to ask "cui bono?" with cryptocurrency. Very plainly, you're risking normal money on a venture that doesn't promote anything other than greed and black market transactions. The hackers on this site will oppose it in favor of information freedom and a less money-influenced internet, and the greedy bastards will oppose it because they'd prefer one party owns everything from the start. It's a nuanced situation with lots of different people, good-faith or not, who will oppose or support cryptocurrency for the wrong or right reasons. It's straightforward and non-predatory to say that most people are better off keeping their pay-stub out of the alternative currency market.

iSnow
2 replies
7h37m

I don't believe for a second that Bitcoin or any other DLT will be the world's reserve currency.

But the amount of hubris and preoccupation about this here on HN is really something else. I've long learned not to try to engage in any kind of serious discussion about possible interesting aspects.

smoldesu
1 replies
2h45m

I've been around cryptocurrency since around 2014, and I don't think the problem is hubris and preoccupation. People genuinely don't want cryptocurrency in their internet. The opportunity to spend more money online is not attractive to anyone. Conceptually Bitcoin and a lot of other networks can be nerd porn, but socially they are an unmitigated disaster. Self-custody wallets are like banks where individuals control their own money; a great idea until the scammers come by. By using managed-custody, you're not even owning P2P currency anymore and still exposing yourself to risk from a centralized institution. The broken "ownership" model caused thousands of people to lose their NFTs and tokens when exchanges went under or social engineers found their phone number.

Additionally, there are a lot of companies on HN that will try to sell you a terminal in an Electron webview for $9.99/month. Users on HN have to be diligent, so a lot of people will lash out against benign technology. Some of them probably also correctly identified scams and ran their owner out of town on a rail. That might be hubris, but I more think that both the investors and the inventors on HN are tired of reading "Yet Another Money Solution" after 10+ years of watching the old one collapse.

iSnow
0 replies
1h17m

HN had a hate boner for crypto back in 2015 when I read about Ethereum here. Nothing has changed, it's a simple lack of curiosity and old men yelling at changes in the world.

It's not just crypto though, the same saturated dullness is shining through in other discussions as well.

ESTheComposer
2 replies
13h19m

Very plainly, you're risking normal money on a venture that doesn't promote anything other than greed and black market transactions.

You could quite say the same about any privacy or encryption or really anything that protects you from a centralized entity taking your rights/property. It’s a bit absurd that people are really that blind that they think this is all there is to crypto. Your same logic would apply to dollars in that case as well.

smoldesu
0 replies
12h53m

I could say the same about privacy or encryption. It's probably why the average person doesn't care about either of those things when pressed.

Ideologically I'm not opposed to Bitcoin or the idea of it existing for the base it serves. It's too volatile to suggest for serious investment though, and it's reached an uncomfortable echelon of "nerd joke gone too far" for my taste. Real people do not need to waste life-hours learning about this when their local government invests in a clear and immediately fungible form of currency for them already. Investors should not be wasting life-hours learning about a perpetually-irrational investment when other industries are both safer investments and arguably more innovative.

Your same logic would apply to dollars in that case as well.

It would, mostly. Most people who oppose the online adoption of crypto probably object to the same level of microtransaction in any currency.

guappa
0 replies
10h17m

How do bitcoins protect you from centralization when they are mostly used via coinbase and the likes?

democracy
0 replies
13h17m

Crypto failed to deliver in any area and it is still a solution in search of a problem. The only real use-case is is money transfer to/from sanctioned countries and other dark markets - not that much of a "bleeding-edge" technology we are enthusiastic about )))

pixelpoet
1 replies
20h36m

I've learnt not to talk about crypto or computer graphics (?!) here, so much vitriol.

codetrotter
0 replies
19h14m

computer graphics

That’s a shame :( computer graphics is a very interesting topic and I always love to read things about it

rvz
0 replies
20h15m

Well, HN is so deep in their own reality distortion bubble that they are still not noticing that "AGI" is actually about lining some-else's pockets over a sci-fi dream sold to them through hype after trampling over laws and regulations.

Those on HN who believed that such a complete ban on crypto was feasible were always delusional. The cat is out of the bag for both AI and crypto, but in the end, the legal system always gets them to pay up and the regulators for both AI or crypto will get them as well.

No escaping that.

miohtama
0 replies
20h33m

A lot of people in software industry have tendency to reflexive negativity*, as people selected to become software developer often have a tendency to seeing things in their own limited scope, and not the in the scope of others.

https://www.linkedin.com/pulse/reflexive-negativity-jess-mac...

democracy
0 replies
13h23m

First of all there never was anything "cutting edge". It was a nice prototype of p2p application for large and slow decentralized payments - a very niche thing for very niche audience with a questionable mechanism in the form of Proof-of-work. But at least the argument of "unregulated currency" made sense to regular folk. The get-rich-quick hype that followed killed any reason or logic in this area. The following NFTs was a joke even to those who believed in the "next currency" idea. The following ideas of pyramids that mint you money while you stake your coins (I think) got even the most gullible ones reject it )))

SilverBirch
4 replies
20h33m

A Bitcoin ETF is literally the antithesis of the crypto project. It’s a centralised, highly regulated trad-fi product.

Also, no one is going to end up accidentally investing in crypto, these ETFs are going to be super niche products.

koolba
2 replies
20h30m

It’s also the only way for most to get crypto exposure in an IRA. Avoiding the insanity that is crypto tax filings may be worth the risks and fees.

wmf
0 replies
19h59m

Buying and holding crypto isn't that complex for tax purposes (although it could still be easier). The craziness comes in when people get into DeFi but ETFs don't let you do that anyway.

Alupis
0 replies
20h26m

I think this is the huge part - letting retirement accounts dabble in crypto.

For those young enough (or foolish enough) to operate a high-risk/high-growth retirement portfolio, holding crypto can be a large boon. Just the past 365 days of BTC has 162% increase in value.

miohtama
0 replies
18h31m

Not by accidentally, but many index funds will, and then people will indirectly through their pensions.

Most of funds by AUM are now passive index funds.

rurp
2 replies
20h34m

So "winning" for Bitcoin has now come to mean becoming a boring traditional security that doesn't do much of anything else? That's awfully different from what 99.9% of Bitcoin optimists have spent years claiming the future would be.

Authorizing Bitcoin ETFs does absolutely nothing to revolutionize payments or finance, and is the only positive crypto story I have seen in many months.

monero-xmr
1 replies
20h29m

You can’t win with HN no coiners. The ETF doesn’t prevent all the decentralized benefits. It just adds regulatory legitimacy from the world’s most important financial regulator. It also helps regular people put their retirement money in, which is great

iamthirsty
0 replies
20h19m

The ETF doesn’t prevent all the decentralized benefits.

OP's point wasn't about preventing decentralized benefits, I believe they were saying the ETFs don't help them in any way.

RandomLensman
1 replies
20h36m

Why would it be in passive funds or do mean it will become part of the asset allocation of pension funds and the like?

moose_man
0 replies
20h34m

Yeah, crypto people want to recreate the current system but with themselves in charge. It's not about decentralization. They want to carbon copy the current economy but putting a small number of holders to lord over the "nocominers"

TrackerFF
0 replies
8h28m

Funds have guidelines to follow.

For the very same reason that (for example) pension or union fund managers can't just allocated x% of their portfolio to blackjack or rolling the dice.

Crypto is still INCREDIBLY high volatility and high risk. Crypto is also a pretty shitty instrument with regard to hedging, as they all follow the same movement.

Mitigating risk in crypto is very much a hands-on job.

Gazoche
0 replies
4h14m

The sweet victory against the no coiners.

This fight only exists in your head.

helsinkiandrew
38 replies
11h48m

I can't help thinking that Bitcoin ETFs could mark "Peak Bitcoin". When lots of people are trading it at their high street broker in their regular account, Bitcoin becomes just a number in a box - a crypto currency without crypto - with nothing underlying it.

TrackerFF
19 replies
8h38m

There is no underlying value. No intrinsic value.

The value is purely a function of speculative demand. And while previously people anticipated the demand would go up "organically" because of actual real-world usage, you know to pay for stuff and such, that hasn't really materialized in the way we hoped. How many actually use BTC for things like that? At its BEST it has usage to purchase other coins - but that's about it.

It is digital gold, but with seemingly less IRL usage. When I started with BTC 12 years ago, the community was really optimistic on the potential use cases - but mostly the aspect of it replacing expensive wire transfers, potential for being a digital currency you could use in your daily life.

After each hype cycle that belief diminished, and it became more apparent that people only buy it to get richer by the means of speculation.

The days of BTC 1000x'ing are long gone. Even if 1 BTC is to go for $1MM, that's "only" a 21.5x increase, and it would mean that BTC alone has a 21 trillion cap. That's half of the entire S&P500 market cap. And you'd still have a slew of other safe coins that competes against BTC for the same money.

So, my point is: While BTC is still the king of crypto, it lives in a financial market that is mostly driven by speculation and expectations of huge returns. The very same investors can earn a lot more by gambling on "lesser" coins.

There's still money to be made, but that boils down to people buying and selling between the various boom and bust cycles. We're 15 years into this now.

npoc
13 replies
8h11m

The IRL usage is as a savings account.

As more people understand its fundamental qualities (or even just see number go up) and save their wealth in it, it's value will become less volatile and it will become more useful as a unit of account and day-to-day medium of exchange. It will be >$10M/BTC before that'll start to happen though.

TrackerFF
11 replies
7h45m

If we're going to look at it from a fundamental perspective - what drives people to purchase BTC?

I don't know about you, but close to 100% of everyone I know that have bought BTC (and other coins, for that matter) the past 5-10 years have done it in hopes of it going to the moon. The bitcoin maxis are at this point a fringe movement, a distant past, really.

If you put all your savings on index funds, there is some predictability and underlying assets to reason for. What is the best predictor for whether crypto goes up or down? How can you possibly predict what triggers its price, if there's little to none real-life usage?

Unless we see widespread adaption of some sort, for actual concrete applications, it is just going to be pure speculation.

But I agree on volatility - ETFs can certainly reduce volatility if there's enough growth.

npoc
10 replies
7h15m

I have all my savings stored in bitcoin. I do it because I've spent 100s of hours learning what money really is and can see that bitcoin is the best form of it, certainly the best long term store of value. I also know that the best long term store of value will ultimately be where the world's stored value is moved to.

Gareth321
7 replies
6h54m

I like your courage, but you really should diversify. Life is long and none of us have a crystal ball. If you don't trust USD, get some other currencies, including crypto. Get some property. Gold. Bonds. Stocks. Savings. Shit happens and you need to defend your portfolio as well as maximise profits.

npoc
6 replies
5h40m

No way. I came for the gains but I'm staying for the revolution.

It doesn't take resolve, only 100s of hours of learning and contemplation.

I'll die on this hill, and there's many more like me.

TrackerFF
3 replies
4h21m

Your money, your call.

But I'm wondering - why wouldn't you invest in business? Business are, after all, the drivers of economy.

While cryptocurrencies could theoretically grow to "infinite" (finite supply and all. combined with fiat monetary policies), there must be some realistic limit to the growth, where the price starts to converge. For BTC, that price is somewhere in the single digit millions. Could make a long post of how I came up with that figure, but basically assume that everyone owning any assets in the world manage to liquidate those, and go all in on BTC, nothing else. Combined with investing newly minted fiat into BTC. (Never mind the economical consequences of public companies being worth close to zero $, and people only spending their money on BTC)

So let's say that BTC "only" has a theoretical maximum of, say, 100x increase from the current price. (but more realistically 10x-20x)

If you really wanted to make a killing, wouldn't it be better to also invest in revolutionary companies? NVIDIA has jumped 100x the past 10 years. There will likely be other NVIDIAs out there.

Obviously this wouldn't mean as much if you're a longtime holder, but from the perspective of a fresh investor, that's where one stands right now.

npoc
2 replies
4h4m

None of them offer the probability of bitcoin. It's the most asymmetrical bet I've ever seen.

The only reason it's not already $10M/BTC is that noone understands what it is - many people think they do, but they don't. As someone who has studied the subject for 100s of hours, I haven't come across a single valid argument for why it won't absorb all the stored value in the world over time. The hardest part is just being patient while everyone figures it out.

The supply halving every 4 years helps to bring it to their attention :)

Regarding potential value, this article offers food for thought: https://t.co/eLqJCYeCKW

TrackerFF
1 replies
3h20m

I'll try:

For BTC to absorb all stored value in the world, it would need to be the only currency in the world. That is the only way all assets in the world are bought/sold with BTC.

But that alone is, IMO, a non-starter. It assumes that all countries in the world would more or less give up control of their own currency and economy - if BTC is the only currency worth anything, why would anyone own or get paid in anything other than BTC? Which brings me to the next point...

This is not directed at you, but I think the BTC maxis severely underestimate the power and control that governments hold over these things. They can (and will) force you to pay your faxes, fees, and whatever they want in their currency, and have to power to use force if you chose not to.

If crypto poses a legitimate threat to that power and control, it is much easier to remove the threat than to adapt your system to it.

npoc
0 replies
9m

It does pose an extremely legitimate threat to their power, but there is nothing they can do about it. They can't stop it. They either embrace bitcoin or suffer economic collapse.

The only reason there are so many fist currencies is because no country wants to be using a currency that another is printing for free.

With bitcoin, that's not an issue and countries like El Salvador, Argentina would happily use it as the basis for a currency and thrive because of it. Over time, societies that use the best money win.

Gazoche
1 replies
4h18m

You sound like you are in a cult.

npoc
0 replies
3h56m

Well, I certainly passionately believe in something that a lot of people think is garbage. I'll agree with that. The thing is, I used to think like them until I put in the time to seriously learn. Now I'm enlightened (yep, I just made it worse)

Personally I think it's one of mankind's most important discoveries. It will improve the world more than most people could imagine. And it's going up forever.

shaman1
1 replies
4h22m

Are you hoping for it to remain the same or are you hoping for an increase compared to usd? Asking because you mentioned stored. What if you could buy shares with btc? If value just sits there and is not used in a productive way - things companies try to do - you're subscribing to a very static world view. It might make sense if you are close to retirement - where people usually move to stable assets - but generally you want your assets to be used in a productive way rather than hidden away.

npoc
0 replies
26m

Remain the same value or price?

If it remains the same value its USD price will increase at the rate of devaluation of the dollar which is 7% on average (value halves every decade)

If I wanted to make my bitcoin "productive", I could lend it to businesses and then receive interest on top - so bitcoin would go up in price at 7% and then I'd also receive back 5 to 10% more bitcoin per year.

No other asset will ever come close to this, without taking on risk or extra work. Which is why bitcoin will very likely also go up 2000% in value over the next decade.

davedx
0 replies
7h19m

That might have been interesting during ZIRP but these days many people have very non-zero interest on their savings account. If you hold Bitcoin its value may well go down not up. It's more like holding penny stocks than a saving account.

ur-whale
2 replies
7h20m

No intrinsic value

The rest of your long rant is basically useless, because the last 2 words above have strictly no meaning when put together

TrackerFF
1 replies
5h50m

If you invest in a company that produces disinfectants, during a pandemic, you can reasonably assume that there's both demand, and that the value of the company is a function of their ability to produce disinfectant, how much inventory they have etc. - in fact, this can be measured / inferred through their financial reporting.

Likewise, if you invest in a pharma company that produces insulin, and there's a insulin shortage, same principle applies.

Or maybe you want to invest in some heavy machinery company, so naturally the valuation depends on how much their assets are worth. And how much they're making off their services in sales.

In any case, for all the above, there is some base value - some intrinsic value, which is possible to calculate.

Hell, even gold is predictable. If there's physical demand for gold (which there is), you can come up with how much physical gold is needed, at minimum.

But how do you calculate that for, say, bitcoin? I'm having a hard time coming up with anything. I can't point to any application which would require people to strictly use bitcoin, and thus driving up demand. No policies that require people to pay with bitcoin.

I guess one could argue that the hardware needed to mine bitcoin has a value, which could set some minimum for what miners are willing to sell BTC for - but otherwise it seems to be only supply and demand. It is the "demand" part which I find difficult.

ur-whale
0 replies
3h7m

I am only saying that there is no such thing as intrinsic value.

Or to put it differently, it is an idea that has little to no predictive power and therefore is of no great value.

There is only one very reliable principle to reason with in that space: supply and demand.

It has been observed to work every time for thousands of years, and therefore very much akin to what physicist like to call a postulate or a law (as in the second law of thermodynamics, yet to be actually proven from other principles, but observed to work every single time in the real world).

Go back to all of the examples you listed above, and dig deep enough, you will see that every single item's vaunted intrinsic value boils down to one thing : there is a demand for these things or the product they put out in the market, therefore they have value.

I repeat : there is no such thing as intrinsic value, there is just supply and demand.

Intrinsic value is a delusion.

And in the case of Bitcoin, there is clearly demand for it. Therefore it has value.

Why there is demand for it is not something you can easily analyze, because you'd have to get inside the brain of every market participant, each of which has followed a different line of reasoning to get to a conclusion about the value of Bitcoin. Some of these will be rational. Some won't. It doesn't matter. Only the aggregate outcome does matter.

You are trying to claim that you don't understand why there is a demand for Bitcoin and you don't because in your world, things have to have "intrinsic value" for there to be demand for it.

    a) your premises are clearly incorrect: the current market price for Bitcoin clearly indicates that there is demand for it. Therefore it has value. Therefore the notion of "intrinsic value" is clearly of little practical use.

    b) the *reason* why there is demand for it may very well be hard for you to understand based on *your* postulate that things must have "intrinsic value" (no such thing, remember?) for there to be demand for something.
Just abandon the idea that intrinsic value is a valuable concept, get back to supply and demand, and the world will start making sense again.

Galanwe
1 replies
8h28m

Bitcoin has no day to day usage because of its volatility. The more ETFs like that appear, the lower it's volatility, and thus you will be able to see real world usage pop up.

Also, the more regulation, the easier it will be to hold and use BTC to buy stuff.

garydevenay
0 replies
8h9m

I use Bitcoin almost every day. Using fiat rails is painful.

gigatexal
12 replies
11h16m

Here’s hoping bitcoin goes to zero

spaceman_2020
10 replies
11h8m

Bitcoin didn’t go to zero with people buying it through shady exchanges operated out of tax havens, and you think Bitcoin will go to zero AFTER its available to every investor in the US through every finance app and is being sold by giant hedge funds?

helsinkiandrew
6 replies
10h48m

and you think Bitcoin will go to zero AFTER its available to every investor in the US through every finance app and is being sold by giant hedge funds?

The reasoning is (I'm not saying I believe this will happen just that it is an interesting thought experiment) that if people quit the shady exchanges and start trading Bitcoin ETF in substantial numbers it could begin to starve the crypto network of transaction fees and the exchanges and other crypto companies of customers.

If Bitcoin ETFs become the main way bitcoin is traded then purchasing bitcoin is just for speculation and not an 'investment in crypto and the future of finance', in that case it's much easier for the bubble to burst.

herbst
5 replies
8h50m

Why would ETFs become a main way? Bitcoin is still a currency, can I trade, holdl or spend my ETFs?

gigatexal
2 replies
7h12m

By definition you can do all 3. Spend by selling convert to fiat and then buy whatever you want. "Holdl"(sic) just say long despite what sanity or logic says. Trade buy/sell like anything else.

herbst
1 replies
6h18m

I can sell the art on my wall and spend the earned money. That doesn't make art a currency or spendable. Trading and holding sure sounds possible :)

gigatexal
0 replies
2h44m

it sure does. wanna launder money? sell your art -- sounds like it's a currency to me ;-)

helsinkiandrew
1 replies
6h44m

Why would ETFs become a main way?

About 70% of the S&P 500 stocks are held by mutual funds or ETFs rather than individually held.

If you trade stocks and would like to buy bitcoin (as an investment) are you going to do it with an ETF through your broker where the money is protected fairly well by law and insurance, or manually and make sure you don't loose it, or through an unregulated crypto exchange?

Use of Bitcoin as a currency (for buying things) has dropped from 57% in 2019 to 32% in 2023, the rest is speculation and inter exchange transfers

gigatexal
0 replies
2h43m

where's the stat about btc being used to buy things from?

gigatexal
2 replies
9h12m

cryptocurrencies are primarily a tool for grift, crime, other shady purposes. their existence is a net negative hence my hope bitcoin and with it the whole market for currencies to go to zero.

but what about cash you might ask? cash has always been used for everything of course both good and bad but transporting millions of some fiat currency in a briefcase is a lot harder than stealing some wallet with monkey jpegs or tokens worth 45k usd.

spaceman_2020
1 replies
6h5m

This is a very first world, privileged perspective. There are billions of people in the world who don't have access to stable local currencies or payment systems. I've personally hired people in Africa and Phillippines who prefer being paid in stablecoins than their local currencies (not that there is an easy way to pay them in their local currencies).

gigatexal
0 replies
2h45m

oh it very much is a priviledged take -- but the solution isn't to replace something when it's broken but fix the existing thing and the thing here would be governments and their policies towards their money and central banks if they have them.

the fiat system of currencies has worked and could work but wholehearted replacement of them is akin to just throwing up one's hands and not vying to fix the underlying problem. doing so would do far more good than just making it easier to pay someone but would mean an overall more stable government for the people long term.

npoc
0 replies
8h9m

The lower it goes, the more of the hardest money mankind had ever seen I can buy.

p4bl0
3 replies
10h23m

"Nothing underlying it" is a pretty good description of crypto tokens in general.

jesusthatsgreat
2 replies
9h17m

Or fiat currency in general. Let's not pretend modern fiat is backed by something solid. The only thing backing it these days is the promise of our grandchildren & their grandchildren being good to pay back debt, eventually.

davedx
1 replies
7h8m

Aircraft carrier groups seem pretty solid to me

xwolfi
0 replies
11h24m

It's hot air all the way down !

moose_man
36 replies
20h45m

This is so sad. Crypto (including Bitcoin) serves as a money funnel while takes from economically insecure middle class retail investors and pours it into the pockets of the tremendously wealthy.

maxioatic
17 replies
20h35m

Haven't heard this take before. What are your thoughts on high frequency trading shops and the regular stock market?

moose_man
10 replies
20h32m

I think they suck just like crypto, these are all mechanisms rigging the economy in favor of the already wealthy. If we don't unrig it we will eventually get civil war. Popular immiseration eventually leads to upheaval.

Checkout the book - End Times: Elites, Counter-Elites, and the Path of Political Disintegration by Peter Turchin

reisse
9 replies
20h24m

Already wealthy? I don't think you know the scene well. HFT probably pulled more physics and math grads out of poverty than any other field.

treyd
8 replies
20h12m

It's also pulled those grads away from more typical jobs they'd have building useful things and actually producing new real-world value.

jekrb
2 replies
17h12m

What if the work these folks do to increase market efficiency does produce real-world value, as slower verifiable economic information would increase periods of uncertainty and price slippages?

Or the HFT engineers producing research and products that speed up general compute, such as accelerating SHA and ED25519 signature verification, so that their trading shops get information faster?

I wonder if there are actually a lot of third-order, downstream effects that society gets by paying engineers to just make computers and telecommunications faster.

treyd
1 replies
16h23m

Slippage in the price of cabbages at my corner market? I don't think so.

There's very good evidence that as the finance sector grows to be a larger portion of the economy (which it very much is compared to 50 years ago) that increasing inequality goes along with it, as the profits made in the finance sector are mostly rent seeking from the rest of the economy. You could also interpret it as a private tax on all other economic activity.

Ekaros
0 replies
11h41m

Just look at UK... Largely based on finance sector and it does look pretty bleak for those outside... And I am not even sure if that is yet the end state...

There is some value there, but the cut they get is likely too large already. Then again it is all just fake numbers...

reisse
1 replies
20h1m

I don't really want to start a debate on how HFT produces real-world value, but just consider that if these things you talk about are really useful and valuable, they might also provide competitive salaries to attract people?

treyd
0 replies
17h22m

What pays the most only loosely correlates with what produces the most value for society. It's easy to skim a percent here and there off hundreds of billions in volume shuffling around without the owners of those billions caring much, but it's much more difficult to see how that, on the whole, actually improves the condition of your neighborhood.

oliveshell
0 replies
16h58m

The fact that this comment was grey from downvotes when I found it is the most HN thing on the planet.

mratsim
0 replies
20h3m

Real world value for which they'll be paid post-doc/PhD wages and be carrying student debt like Sisyphus carries his boulder for all eternity.

RandomLensman
0 replies
19h59m

Yes, they might create more non-monetary value elsewhere, but that trades off against what non-monetary value the money they make creates now.

bob_malrey
3 replies
20h20m

At least with stocks you actually own cash flows. Cryptos produce nothing.

kinakomochidayo
1 replies
19h22m

Ethereum has a perpetual buy back mechanism via burning and staking currently gives about 2.7% a year without MEV

DennisP
0 replies
16h7m

Someday people will catch on the Ethereum actually has a PE ratio.

ric2b
0 replies
16h22m

They produce financial services. Miners have cash flows from the transaction fees.

arkis22
0 replies
15h24m

If you are upset at trading shops or the stock market as a retail trader, you dont understand the game you are playing.

ESTheComposer
0 replies
20h32m

This guy is in every single crypto thread here spouting anti crypto nonsense. Don't expect an actual in depth take.

mmvvddhh
7 replies
20h43m

Yeah just like USD.

trompetenaccoun
6 replies
20h33m

Not exactly the same. Fiat currency like the USD redistribute a lot of wealth from users into the pockets of the central bank/government through unlimited base inflation, which they control. Bitcoin does not have that, its inflation rate is fixed by the protocol and only ever falling. In April this year it will fall to 0.875%.

RandomLensman
4 replies
20h30m

Not sure I'd call that an inflation rate as it doesn't factor in any baskets of goods and services.

trompetenaccoun
3 replies
19h53m

Monetary inflation (i.e. in it's purest form increasing the monetary base by "printing" more) is not necessarily the same as what you probably mean by 'inflation rate'. You're probably talking about price inflation, using CPI. Those are linked but not the same.

Bitcoin "prints" around 1.74% currently and it's going to drop below 1% in April. The USD, although one of the more stable fiat currencies, is worlds apart from that. Looking at official Fed data you can see the base has been inflated by massive amounts just in the past 3 years alone! An increase of way over 60%!

https://fred.stlouisfed.org/series/BOGMBASE

RandomLensman
2 replies
19h32m

Exactly. "Inflation rate" usually denotes price inflation not change in monetary base or similar measures. More money in circulation can mean price inflation, but it doesn't need to.

trompetenaccoun
1 replies
18h48m

Sure. It's just that it generally does since the market as a whole understands scarcity value. The fact that having a much larger supply of something decreases the value of the individual unit is intuitively understood by most. The general public tends to price everything in relation to their home country's currency. They don't see the value of the currency falling, they view it as goods getting "more expensive". They do not usually think of fiat currency as a thing that's traded globally against other currencies and goods, but traders and businesses understand this.

Of course, the fact that the recent spike in monetary inflation coincided with a large hike in consumer prices over the past three years (which working class people have definitely noticed) as well as an asset price explosion, could have just been coincidence ;)

RandomLensman
0 replies
8h4m

That assumes that in increase in monetary base is not matched by an increase in goods and services - you cannot just ignore that part. Also, scarcity as such has no value whatsoever.

FX rate evolution is linked to many things (and sort of a random walk anyway) - I'd say you typically need quite high inflation/rates to see devaluation in line with uncovered interest rate parity type views, short-term it could also work the other way around at times.

DennisP
0 replies
16h5m

And the Ethereum supply is actually shrinking.

psychlops
3 replies
20h8m

How does bitcoin "take" money from anybody? How would you classify an economically insecure investor? If they are economically insecure, where do they get the money to invest?

Food for thought, when there is currency inflation where do you suppose all the wealth goes and who is it taken from? Here I think we can use the word "take".

wmf
2 replies
20h2m

A lot of people buy in at the top, expecting "generational wealth", then sell at the bottom, losing 60% or more.

US dollar inflation has never been 60% per year AFAIK.

snapcaster
1 replies
17h41m

I agree with your point, but I do think he raised something you're not addressing. Because i'm paid, bank, etc. in USD inflation means someone else (whoever is given the first access to the new money) is in effect stealing some of my wealth. I don't really see how this is true with Bitcoin. Nobody is forced to engage with it

SantalBlush
0 replies
15h44m

I think nobodyn is forced to engage with it precisely because it's not the popular currency. If it were, than the same would be true of bitcoin: its inflation would mean someone is stealing from you (your boss, for adjusting your wage too slowly).

rvz
1 replies
20h31m

Crypto is one of many. Just like SPACs, crowdfunding and the entire VC landscape are always finding millions of ways to dump on retail after they made their 100x on unprofitable startups (90% of them have failed) founded by their friends racing to the IPO finishing line.

This is why they have to continuously raise money and breathlessly celebrate it on social media and even on this site as if "raising capital" into the Series H is a good thing.

Sorry to disappoint you but it isn't going to stop.

aurareturn
0 replies
14h39m

That's just wrong.

At least with SPACs, they're securities and you can see their finances before you invest. They're also regulated by the SECs and audited.

With the vast majority of crypto, people who start them don't intend for them to be useful. People who start them intend to scam retailers. That's it. They make up a shitcoin, throw flashy parties, spend on marketing, and then sell their shitcoin on retail. Retail knows it's all a scam too but it's a game of musical chair.

siwatanejo
0 replies
17h25m

Crypto (excluding bitcoin)

FTFY

paulpauper
0 replies
16h30m

so does many things. Las Vegas for example. even new cars lose most value in a few years. People like to gamble.

factorialboy
0 replies
20h25m

No no, you just described inflation and taxes.

DANmode
0 replies
17h26m

You're describing consumer-accessible internet trading of any kind.

schemescape
33 replies
20h45m

In the hypothetical case that a Bitcoin ETF gets hacked and its wallet(s) emptied, what happens? Is it any different from, say, a gold ETF having its physical gold stolen?

postcynical
21 replies
20h40m

and what would happen during/after a fork?

ur-whale
10 replies
20h38m

and what would happen during a fork?

Now, that is a very interesting question.

If said ETF did their homework properly, their handling of a fork should be described in detail in their prospectus.

Not that I would ever buy a BTC ETF since it precisely negates what I believe Bitcoin to be useful for, but if I had to, I'd pick the one that would convert the forked coins back to BTC immediately after the fork.

If enough ETFs actually promise to apply this policy in their statutes, that would make it quite a hump to get over for a would-be forker, knowing the immediate price hit the forked coin would take because of the ETF immediately dumping it.

rkagerer
3 replies
19h22m

Not that I would ever buy a BTC ETF since it precisely negates what I believe Bitcoin to be useful for

Yeah I know what you mean, although one competitive advantage of the fund is it can be invested in a tax-free savings accounts not subject to capital gains tax (I haven't seen a practical way to do the same with the raw commodity).

MacsHeadroom
1 replies
11h27m

You can hold raw Bitcoin in a self-directed IRA. You just hold it and do the paperwork. You can hold just about anything in a self-directed IRA, including beanie babies.

rkagerer
0 replies
34m

Is there an equivalent in Canada?

lxgr
0 replies
17h37m

Sure, being able to rebalance without incurring a tax bill is nice, as is not having to worry about procuring the right type of tax forms since your brokerage does most of the work for you.

But is there actually a difference for pure buy-and-hold investors in most jurisdictions?

I know of at least one jurisdiction where an ETF is actually disadvantaged against physically holding cryptocurrency.

hn_throwaway_99
3 replies
20h19m

Wow, this actually is a critical point, and I'm surprised at what the outcome is. Essentially, it seems to me that these ETFs are saying they will abandon any rights to forked coins. That seems insane to me, though, so perhaps I'm misunderstanding? I mean, if there is a hard fork, some percentage of total value will go with one chain and some percentage to the other - that's basically exactly what happened with the Bitcoin Cash fork - so how can the ETFs just say they'll abandon coins in the forked chain.

My understanding taken from:

1. https://www.nasdaq.com/articles/bitcoin-etf-hurdles%3A-cash-... "In the event of a fork diverting from the main chain, trusts associated with the ETFs are expected to relinquish any entitlements."

2. Grayscale prospectus, https://www.sec.gov/Archives/edgar/data/1588489/000119312524...:

Shareholders will not receive the benefits of any forks or airdrops.

The Bitcoin Network operates using open-source protocols, meaning that any user can download the software, modify it and then propose that the users and miners of Bitcoin adopt the modification. When a modification is introduced and a substantial majority of users and miners’ consent to the modification, the change is implemented and the network remains uninterrupted. However, if less than a substantial majority of users and miners’ consent to the proposed modification, and the modification is not compatible with the software prior to its modification, the consequence would be what is known as a “hard fork” of the Bitcoin Network, with one group running the pre-modified software and the other running the modified software. The effect of such a fork would be the existence of two versions of Bitcoin running in parallel, yet lacking interchangeability. In addition to forks, a digital asset may become subject to a similar occurrence known as an “airdrop.” In an airdrop, the promotors of a new digital asset announce to holders of another digital asset that such holders will be entitled to claim a certain amount of the new digital asset for free, based on the fact that they hold such other digital asset. We refer to the right to receive any benefits arising from a fork, airdrop of similar event as an “Incidental Right” and any such virtual currency acquired through an Incidental Right as “IR Virtual Currency.”

With respect to any fork, airdrop or similar event, the Sponsor will cause the Trust to irrevocably abandon the Incidental Rights and any IR Virtual Currency associated with such event. As such, shareholders will not receive the benefits of any forks, and the Trust is not able to participate in any airdrop.

In the event the Sponsor seeks to change the Trust’s policy with respect to Incidental Rights or IR Virtual Currency, an application would need to be filed with the SEC by NYSE Arca seeking approval to amend its listing rules to permit the Trust to distribute the Incidental Rights or IR Virtual Currency in-kind to an agent of the shareholders for resale by such agent. However, there can be no assurance as to whether or when the Sponsor would make such a decision, or when NYSE Arca will seek or obtain this approval, if at all.

Even if such regulatory approval is sought and obtained, shareholders may not receive the benefits of any forks, the Trust may not choose, or be able, to participate in an airdrop, and the timing of receiving any benefits from a fork, airdrop or similar event is uncertain. Any inability to recognize the economic benefit of a hard fork or airdrop could adversely affect the value of the Shares.
wmf
1 replies
20h6m

Here's a theory: If they promise to capture value of forks then anyone can fork Bitcoin (it's pretty easy to do) and force the custody providers to do a bunch of work to support that fork. By preemptively disclaiming all forks, they also reduce the motivation to fork. (Stablecoins have the same effect on Ethereum.)

Here's a list of 45(!) Bitcoin forks and 11 airdrops that have happened so far: https://forkdrop.io/how-many-bitcoin-forks-are-there

nullc
0 replies
17h38m

It's hard to make that promise too, what happens when the fork requires that you expose 200 bits of your private key to make a transaction?

What happens when the fork snapshotted the chain at some arbitrary point in the past such that it's not possible to match it up with ownership of the ETF?

There have been 'forks' of altcoins made where the 'official' software was expressly backdoored. They even lead to some fringe exchanges being robbed.

There was a brief flurry of forks when exchanges felt compelled to list them-- they were a way for altcoin creators to avoid the huge listing bribes demanded by exchanges (which also has made it so that only premined altcoins are viable to create anymore)... but after exchanges decided to stop listing them (and esp Archer v Coinbase established that exchanges could just keep the fork coins, if that was their policy) most of the fork creation stopped.

(somewhat to my saddness: diligently dumping fork coins made me a lot of money...)

SilasX
0 replies
11h28m

Since you mention the past disputes over custody and forks:

Earlier discussion from 2017, when customers wanted to sue Coinbase for keeping the Bitcoin Cash (BCH) fork corresponding to their deposits:

https://news.ycombinator.com/item?id=14910822

I remember Gemini crediting me with my BCH eventually. (Unfortunately, long after the peak to $4k.) LocalBitcoins gave some classic BTC credit to make up for it.

Some silly analogies I made: https://news.ycombinator.com/item?id=14913261

I believe that fears of a similar situation are what led a lot of people to temporarily pull ETH off of exchanges and out of smartcontracts over the time of the ETH switch from PoW to PoS, as that spawned another fork.

postcynical
1 replies
20h21m

Not that I would ever buy a BTC ETF since it precisely negates what I believe Bitcoin to be useful for, but if I had to, I'd pick the one that would convert the forked coins back to BTC immediately after the fork.

Would it actually be clear which fork is the winning one?

zubairq
0 replies
10h37m

Yes it would be clear. According to this site there have already been 105 forks of Bitcoin:

https://forkdrop.io/how-many-bitcoin-forks-are-there

ksjskskskkk
6 replies
16h21m

fidelity et all have all the dollars. if there's a fork, they will probably own 51pct alone. you will be asking about THEIR fork.

TapWaterBandit
3 replies
14h53m

Lol this comment is funny because you clearly don't understand how Bitcoin works but are convinced it will be a problem. Owning the most bitcoin (or even a majority of the bitcoin) doesn't mean you control the network......

ac29
2 replies
14h36m

The bitcoin network is ultimately controlled by the economic weight of its largest holders. If the big funds control enough bitcoin, they will have the power to pick which fork holds value. Miners and node operators can operate on whichever fork they want, but that doesnt mean Coinbase or Fidelity or whoever is going to recognize that fork.

TapWaterBandit
1 replies
13h47m

Miners and node operators can operate on whichever fork they want, but that doesnt mean Coinbase or Fidelity or whoever is going to recognize that fork.

Mate that isn't how it work. If Coinbase or Fidelity don't recognise the real blockchain then they no longer have real bitcoin, they have a forked coin (because they are not on the true bitcoin chain). The Bitcoin chain is determined by consensus of the majority of miners/nodes (not bitcoin holders!) and if they break from that they now have a substantially devalued asset (look up the price of BCH and BTG these days).

You seem to be under a misapprehension that owning the most bitcoin gives an institution or individual power over the network. It does not.

Bitcoin, by definition, cannot exist on two separate chains. If an institution attempted what you are saying all they will have done is reverse alchemy: turned gold (bitcoin) into lead (an unrecognised chain with no mining occurring, no recognition by nodes etc).

TarasBob
0 replies
12h52m

Yes, it’s all about the consensus of majority of the nodes! Not miners.

jMyles
1 replies
13h5m

fidelity et all have all the dollars. if there's a fork, they will probably own 51pct alone. you will be asking about THEIR fork.

I have read this comment five times, and I simply cannot make heads or tails of it.

What is "THEIR fork"? If there's a fork, everyone has keys which underpin addresses on both forks. How do you know which fork belongs to "fidelity et all"?

And more importantly, why is that relevant? Isn't the longest chain the only determiner of canon? Or has that changed recently?

zubairq
0 replies
10h44m

Yes everyone with keys will have access to addresses on both forks. Which is why people have access to both “Bitcoin” and forked “Bitcoin Cash” addresses with one set of keys

chollida1
0 replies
16h13m

Well the canadian ones have lived through that.

They just sold the coins on the inferior chain and gave a one time dividend.

DANmode
0 replies
20h16m

You think the political willpower across all superpowers would be substantial enough to allow for "error correction" forking (nicest way to put this), to the benefit of individual superpowers who made an error like that?

This seems unlikely.

DANmode
0 replies
20h13m

Oh, I think I misunderstood your comment.

Many TradFi custodians ignore/do not support (publicly) forks of client assets held, sometimes just until they reach some arbitrary level of social traction.

wmf
5 replies
20h32m

I will note that the ETFs are using Coinbase, Gemini, and Fidelity for custody. These companies have been providing Bitcoin custody for years without being hacked AFAIK.

lxgr
4 replies
17h40m

Most notably, almost all of them seem to be using Coinbase. This makes them a probably unprecedented target for attacks of all kinds...

dmoy
2 replies
14h30m

Makes me wonder if coinbase has the whole Dudes With Big Guns layer of protection that you see at e.g. the fed in NY (where all the gold is) or the bank of England (where all the other gold is)

zubairq
0 replies
10h55m

Bitcoin keys in bank vaults guarded by security guards is exactly what is happening. I wrote about this almost 10 years ago here:

https://www.linkedin.com/pulse/day-163-zubair-2015-bitcoin-p...

My timeline for when things will happen in Bitcoin were way too optimistic though :)

parkerhiggins
0 replies
13h18m

Coinbase had/has job posts for private security.

DennisP
0 replies
16h13m

Coinbase already held a huge amount of cryptocurrency, so that's nothing new.

miohtama
1 replies
20h31m

The Trust holding the asset would have frauded its customers (shareholders) and could be sued.

Ther Trust itself would be a target of cyber crime and could try to pursue the thieves through Computer Abuce Act(s) around the world.

These two happen independently of each other.

tgsovlerkhgsel
0 replies
17h23m

The trust would presumably have no meaningful assets so the "could be sued" would be rather theoretical, correct?

bnchrch
1 replies
20h42m

You would hope they have good security practises + purchase insurance.

But I have a feeling like it will take an incident like the one you describe to happen first before that becomes mandatory.

xwolfi
0 replies
11h18m

When Cathie Wood was asked by Bloomberg, she called 21Shares staff who replied they have cold wallets. She didnt reply "oh ofc we're insured"... 21Shares staff didnt either...

Expect a shitstorm in case of hack (or lost keys) with these clowns.

yieldcrv
0 replies
20h42m

this has been a major part of the application revisions, you’ll have to read each ETF before you purchase, or, you know, contact a financial advisor before every trade lol

hackernudes
22 replies
17h45m

The only thing I am concerned about is "paper bitcoin" and rehypothecation. Is there anything published about how ETF entities might prove they have custody of the amount of bitcoin they claim (in other words, proof of reserves)?

piuantiderp
8 replies
17h24m

This is a valid concern, the actual value of BTC and ETF might diverge wildly. Never a better time to actually own some

lucw
7 replies
16h26m

If they diverge, an arbitrage opportunity will appear which market participants will jump on.

cmcaleer
3 replies
11h13m

A trade like this (partly) is what blew up 3AC. Borrowing has cost and if futures funding premium turns against you and your perceived arb, along with a further divergence against you, it’s game over. Funnily enough that GBTC gap basically closed today; it was a >30% discount when 3AC died. Very nice if you get paid to hedge! Not so nice when you’re paying 0.1% in hourly funding premium.

lucw
1 replies
7h25m

I'm not familiar with what happened at 3AC but it sounds like there was leverage involved. The arb opportunity i'm talking about is something that exists with all ETFs and keeps them in line with the underlying asset.

LikesPwsh
0 replies
5h28m

3AC was doing the same arb on GBTC (with an extended lock-in before redemption), but GBTC had no mechanism for selling BTC once their premium reversed.

iSnow
0 replies
8h1m

You don't need futures to arb this. You can demand a payout in cash if the ETF price is higher than the Bitcoin price. There will be market makers jumping on that.

fsckboy
2 replies
13h54m

if they diverge because an economic shitstorm has started and everybody is buying food for survival with bitcoin, but the rump government still wants its cut of your new mad gainz, bitcoin in the ETF and bitcoin out of the ETF might maintain independent values, FEC vs RMB

kbrkbr
1 replies
11h0m

Talking about extreme situations, here is another possible scenario - if electricity is then rationed and works only for two hours a day, people with cigarettes or gold may actually buy the food, while people with Bitcoin go hungry, and the value may plummet.

jgilias
0 replies
8h32m

This needs to happen worldwide though. And if that’s the case I have a hunch that the value of my investments might just be the least of my concerns.

CyberDildonics
4 replies
17h39m

You sign a message with your private key. This has been solved since day 1 of bitcoin's existence.

jdewerd
1 replies
17h3m

You can prove presence of assets, you can't prove absence of liabilities, and you can't audit the balance sheet without seeing both sides.

nullc
0 replies
11h13m

You can, but it's not simple in the context of an ETP, due to all the infrastructure in between the parties with an ownership interest and the assets.

If we ignore that:

Dumbest version: You give everyone a list of all the liabilities. They make sure they are in there themselves. Anyone left out isn't entitled to the assets in an insolvency, so there is an incentive to check.

This isn't very efficient, giving everyone the whole list. But make a hash tree with each node carrying a hash and the sum of liabilities below it. Show each user their log2() sized proof. Much more efficient.

This leaks information about the distribution of ownership. Replace the values with pedersen commitment (and range proofs on their sums), and only open the top and bottom ones.

There is a fine writeup on the subject here: https://web.archive.org/web/20170928054354/https://iwilcox.m...

(Archive.org link because Zak died a couple years ago stomach cancer at age 40 due to an undetected chronic H. pylori infection, and his website didn't out survive him for long)

hackernudes
0 replies
17h32m

I guess what I'm asking is do they have to do it? I haven't tried reading any of the filings, etc... I'm wondering if someone has already done the work for me to say if this issue has been addressed by the SEC and/or individual ETFs.

fooker
0 replies
14h54m

Suppose you have 1 bitcoin, you can now show to a dozen different people that you have it. Convincing them to buy your ETF or whatever you are selling.

miohtama
3 replies
11h3m

This is described in the every prospectus that was approved today. Prospectuses are public.

johnyzee
2 replies
10h21m

Can you quote the relevant parts then, since you have apparently read all the prospectuses? I am wondering the same thing. Will they publish the custody addresses?

ur-whale
0 replies
7h15m

I thought reading long and boring documents and answering questions about them was what ChatGPT was for, no ?

miohtama
0 replies
8h18m

Sorry, I am not your secretary. You can perfectly fine to go to read those yourself, please do not be lazy.

lucw
1 replies
16h27m

With ETFs, you don't need to be concerned with reserves. I can buy the ETF, go to the market-makers, and ask them to exchange the ETF for either bitcoin, or a cash equivalent. If they can't deliver, they're in trouble.

There's a two way arb in ETFs which keeps the price tracking accurate: - if the ETF trades higher than bitcoin on crypto exchanges: the market makers can simply buy bitcoin on exchange, sell the ETF on traditional exchanges: do this enough and the price difference narrows. - if the ETF trades lower than bitcoin on crypto exchanges: I can just buy the ETF, ask to redeem to bitcoin and pocket the difference. Sooner or later this price discrepancy goes away.

latchkey
0 replies
15h35m

I can just buy the ETF, ask to redeem to bitcoin and pocket the difference.

Can only redeem to cash.

https://www.etfcentral.com/news/two-important-things-need-kn...

jekrb
1 replies
17h34m

This should actually be quicker and easier to prove than something like gold ETFs (e.g. SPDR) or other commodity ETFs.

The custody provider (e.g. Coinbase is the custody provider for most of these ETFs) should be able to simply show wallet addresses for all the Bitcoin they hold.

panarky
0 replies
17h16m

>>> finally reaches its ultimate form of a centralised list maintained by the DTC

simply show wallet addresses for all the Bitcoin they hold

DTC's database is not where the Bitcoin is. It's still on Bitcoin's decentralized blockchain, just like always. That's the ultimate authority no matter how many centralized forms you stack on top of it.

At least with this structure, there are separate, distinct entities for custody, market making, transfer agent, etc. to reduce the incentives to self-deal and print fake paper securities and commodities.

So a huge improvement on the current state of affairs, where FTX or Binance handles all of these functions, with no segregation.

cs702
17 replies
16h12m

The Bitcoin network has survived everything that has been thrown at it.

Nothing has stopped the damn thing. It's always there.

It's one of those things that just keeps on existing, like gold.

It doesn't care what you think. It doesn't care whether you like it or not. It doesn't care if you understand it. It's just always been there.

Might as well make it easier for people and companies to own it and trade Bitcoin, and for governments to tax profits on it.

optymizer
14 replies
13h39m

It has survived by changing the narrative and getting people to buy the stories.

It was going to replace money, but then it didn't because the network slowed down to the point where it was unusable. Nobody was going to wait 30 min for a transaction to complete.

So then the message was flipped and Bitcoin was now 'an asset', not a currency, further supported by IRS's decision to tax it like an asset, so it was advertised as a store of value, "like gold".

It didn't deliver on the currency promise, even with all the lightening and proof-of-stake talks.

It is actively hurting the entire planet at this scale by generating useless heat.

And last, but not least, KYC lets governments track all your bitcoin purchases forever to an extent impossible to do with cash, including deanonymizing transactions retroactively decades later.

A digital currency will not give us more freedom, it will only take more of it away, which is why I personally no longer support Bitcoin, and I don't think others should either.

tekchip
10 replies
13h4m

This global warming rhetoric against bitcoin is nonsense right? The current financial system doesn't run off as many or more computers in datacenters around the globe? I don't have objective numbers but I'd lay money credit card processing alone dwarfs bitcoin by a pretty good margin.

TillE
4 replies
12h43m

The global financial system can handle considerably more than three (3) transactions per second.

markburns
2 replies
12h34m

There's not really a problematic upper bound for global transaction volume on transactions per second with the lightning network. There are other problems in terms of adoption and infrastructure etc, but the actual potential for humankind to have a single currency global low-barrier payment system is there. But this is more like the early days of the internet. The internet seemed pointless to most people even as late as the 90's.

A future global system could have settlement on the blockchain. Like the current system does at far less regular intervals than the processing power of non-settled transactions.

TimJRobinson
1 replies
11h52m

There's not really a problematic upper bound for global transaction volume on transactions per second with the lightning network

There unfortunately is, to open a channel you have to make a Bitcoin transaction, and you can't use lightning without opening a channel. Bitcoin processes a max of ~220M transactions per year so to onboard the world onto lightning with only one channel each would take a few decades.

A real layer 2 could solve it, or having some trustless way to use BTC on other chains

markburns
0 replies
11h10m

It's possible I'm too optimistic on this point. I feel I have a good grasp of how bitcoin works, but when it gets to layer 2 it gets fuzzier. The initial discussions sounded really promising, as they seemed to mirror HTTP on top of TCP/IP. And we all know how much of a slow burning revolution that turned out to be.

But http seems simpler than what I've read about lightning more recently.

Total wild speculation follows:

As for the channels problem, it feels to me like you have something like ISPs or AOL being the thing that's needed to kickstart it. And perhaps the ISPs or AOL in this world are the employers and lightning banks. So yes you need bitcoin to open it, but with an employer you have the potential to have an entity with bitcoin resources and with a reason to send bitcoin to an individual.

Perhaps HD wallets with lightning kickstarter funds apportioned to new employees. This feels similar to the needing a bank account or national insurance number in the UK (social security number? in the US) to start getting paid, or similar to needing an internet connection. Yes you could choose to get paid in bitcoin and have the fees come out of your wage, and this would be similar to getting paid in physical cash today. Or you could get over the slight roadbump to get you onto the lightning network.

What would a real layer 2 look like in your opinion?

irusensei
0 replies
3h9m

You know credit card transactions can take days to actually settle right?

Mariehane
2 replies
12h37m

While Bitcoin is designed to reward high energy consumption the opposite is true for the fiancial system, since lower energy costs would make the different processing entities earn higher margins.

Thus, the financial system provides much more utility for the energy it consumes than bitcoin does.

MacsHeadroom
1 replies
11h10m

Bitcoin rewards energy efficiency by design, which is why the vast majority of bitcoin mining uses excess fully renewable energy.

anpe
0 replies
9h22m

Yeah, like running old coal powered plants to power mining facilities[1].

[1] https://www.theguardian.com/technology/2022/feb/18/bitcoin-m...

markburns
0 replies
12h40m

YouTube is one of those things that consumes more energy than bitcoin.

That is bad, but it doesn't seem part of the public narrative that YouTube is bad because of global warming. Also the general narrative posits that electric cars are good. They also use a lot of energy. There's nothing inherent about EVs versus bitcoin that suggests one uses clean energy versus another. They both use a lot of electricity.

But so does the banking sector. And entertainment, farming, travel and a lot of the other things 8 billion people choose to do or depend on.

Any usage of fossil fuels should rightfully be a target and held to the same standards.

There is another narrative that we need continual growth and that inflation aids this. And deflationary currencies are bad because they don't help growth. This seems so ingrained in modern politics and economics that I slightly hesitate to question it in public.

Well maybe unbounded growth and exponential usage of resources is the actual problem.

I hope we reach the social limit on unbounded growth before it destroys everything we have. It's literally in physical terms unsustainable. My only hope here is that nuclear fusion gives us a respite for a hundred years or so. But we'd still have the same problem at a different scale if we used that to grow to a trillion people.

I can see that a deflationary global currency could be part of the solution to the problem. And I can see why suggesting deflation is good can be seen as a threatening thing to those that have resources.

So I feel in that light, the bitcoin = global warming narrative is really convenient, even if a little ironic.

Hamuko
0 replies
12h17m

I don't have objective numbers but I'd lay money credit card processing alone dwarfs bitcoin by a pretty good margin.

What, per transaction?

amjnsx
2 replies
9h47m

Nobody was going to wait 30 min for a transaction to complete

Depends on the transaction. To buy coffee? Of course not, but there are transactions that can take hours or days to clear.

redox99
0 replies
7h44m

Yeah, 30 min for a BTC tx which is basically guaranteed to go through is amazing compared to the shitfest that is SWIFT.

irusensei
0 replies
3h11m

If people only knew that a card transaction is the equivalent of a 0 confirmation transaction between two “trust me bro” parties and that said card transaction takes days and a lot of institutional resources to clear…

the_gastropod
0 replies
12h37m

I have a sonicare toothbrush older than bitcoin…

democracy
0 replies
13h0m

Last time i checked it's still gonna suffer from 51% attack? Or its ECDSA implementation might have NSA backdoor?

There is no stats how many people were robbed, how many accounts where hijacked, how many keys were guessed (due to crap implementations) etc. I think there was no other technology in the world that lost so much of people's cash with no responsibility of any kind.

Yeah, just like gold - if you lived in 860 AC and thought copper was gold too - then it's a valid comparison!

boeingUH60
15 replies
20h33m

As my Dad told me, anyone investing in crypto is a fool looking to take advantage of another fool. It’s all Greater Fool Theory.

elwell
8 replies
20h25m

anyone investing in crypto

FTFY: anyone investing

bodiekane
5 replies
20h3m

It's sad people are so financially illiterate.

Buying partial ownership (shares) in a real company that makes a product or service profitably, or loaning money to a person or business that will be paid back with interest, are both ways to invest capital which can increase in value with no "greater fool".

Apple stock isn't worth more today than in 1990 because people arbitrarily agreed upon a bigger number, it's worth more because they've innovated and grown and now sell expensive products to a billion customers around the world.

Crypto tokens, NFTs, beanie babies, rare coins, paintings only increase in value if some greater fool comes along to pay more than you paid for it. At least with a painting or a beanie baby you could display it in your house, I guess.

ksjskskskkk
1 replies
16h5m

you missed the point. yeah some numbers to up because company sold products. but everyone who bet on coke instead got richer. go diabetes!

guil177
0 replies
7h45m

There is coca zero.

elwell
1 replies
16h34m

It's the same fundamental thing. Apple stock is worth more because future people believe it to be worth more. The 'why' behind that is also the same: people believe that the product has value. Even deeper, people believe that their life has value. It's all the same fundamentally.

Devasta
0 replies
8h49m

Even if no one on the planet was willing to buy apple shares from you, you still have something generating income through dividends.

Bitcoin requires an ever-growing list of rubes to buy in.

hereme888
0 replies
17h30m

The use case for the NFT thing has been so sad. I thought it would give rise to some sort of decentralized ID tech, but all it amounted to in the real world was mutant gorilla pictures.

And then you have a bunch of competing blockchains with significantly different underlying code, so how does anything get standardized?

iamthirsty
0 replies
20h14m

Not really. My first econ professor equated regular investing in stocks is more like buying a a loan (at the absolute most basic level).

You can keep it, and hopefully get more money out of it than you put in, or risk getting less or none of it if the underlying borrower wasn't the best and goes in to default.

Or you can sell it to someone else for more or less depending on the borrowers performance.

RandomLensman
0 replies
20h19m

Not really.

ur-whale
4 replies
20h27m

https://en.wikipedia.org/wiki/Argument_from_authority

But I must admit that using your actual dad as the source of authority is quite a stretch.

redcobra762
2 replies
20h22m

He's not arguing the position as correct because his dad told it to him. He's not arguing the belief at all, he's just stating it.

So no, it's not an argument from authority.

sharperguy
1 replies
5h44m

Given that he didn't provide any further evidence to his claim, I think it seems reasonable to guess that might have been an attempt.

redcobra762
0 replies
1h20m

More likely he wanted to share with us something his father had said that he felt was relevant.

Lambdanaut
0 replies
20h11m

Usually an argument from authority doesn't hold any weight, but come on.

It's their dad

democracy
0 replies
13h15m

Your dad didn't understand the philosophy of Bitcoin. It is more about to fool the unbanked and to unbank the fooled. Not the other way around, remember!

MuffinFlavored
15 replies
16h46m

Looks like these are the 11 tickers?

Bitwise (BITB)

ARK Invest/21Shares (ARKB)

Invesco Galaxy Bitcoin ETF (BTCO)

iShares Bitcoin Trust (IBIT)

VanEck Bitcoin Trust (HODL)

Franklin Bitcoin ETF (EZBC)

Fidelity Wise Origin Bitcoin Trust (FBTC)

WisdomTree Bitcoin Trust (BTCW)

Valkyrie Bitcoin Fund (BRRR)

Hashdex Bitcoin Futures ETF (DEFI)

Grayscale Bitcoin Trust (GBTC)

paulpauper
7 replies
16h15m

Weird how the price went to 48k on fake news, with the potential to go even higher until revealed to be fake, but only 47k on the real news?

gruez
1 replies
15h21m

priced in, probably.

fsckboy
0 replies
14h28m

well, or it's tied into all other segments of the economy and those segments have moved up and down due to their own economic forces, and markets balance that with prices.

for bitcoin to move up or down $1000 a day has a variance: call me when we're outlying

bagels
1 replies
14h24m

I think a lot of people didn't buy the "hacked" explanation for the tweet that went out. Much more likely to have been an early release.

xwolfi
0 replies
11h20m

Imagine you were leveraged long ETF news, then the fake news started then descended in liquidation,your long leverage has been closed and you have no more money to buy now.

That fake news cleaned up a lot of leveraged bets up and down.

x3n0ph3n3
0 replies
15h59m

I suspect a lot of people corrected their trading bots after the fake news yesterday, so they didn't trade on today's news.

sjducb
0 replies
7h9m

I think investors were spooked by the hack. The tweet situation was so unprofessional that they thought “something is wrong, ETF launch will be delayed by months”

bboygravity
0 replies
14h19m

Weird how the price went to 48k on fake news, with the potential to go even higher until revealed to be fake, but only 47k on the real news?

It makes sense if you figure that the ETF is probably just another FTX-like scam (except now by competitors of FTX who are even better at regulatory capture).

All it means is that you now have a security that tracks Bitcoin's price, but is probably backed by very little actual Bitcoin.

TLDR: money is going to flow out of real Bitcoin and into this fake Bitcoin ETF causing the price of real Bitcoin to go down eventually. That's without even considering insane possibilities of naked shorting by a certain owner of a certain large hedge fund that is co-owner/founder of this ETF and also owner of the US's largest market maker.

treffer
2 replies
11h58m

Most of then operate in Europe already. I am personally holding some already (3 for an extra risk split).

Most of these old ones seem to be listed in Germany and Paris.

tutfbhuf
1 replies
10h13m

"3 for an extra risk split"

I guess in the end they are all fully dependent on Coinbase.

treffer
0 replies
9h51m

Buying is pretty irrelevant, the Custodians are relevant. One if them lists BitGo as their custodian. So nop, doesn't look like it.

mFixman
1 replies
6h57m

What's the difference between those 11 tickers? Shouldn't all of them go up or down the price of bitcoin plus/minus a very small error rate?

shagymoe
0 replies
4h56m

Probably fees, but that's true of the many S&P 500 funds also.

gigatexal
1 replies
11h16m

The blackrock one is missing?

zubairq
0 replies
11h6m

iShares is blackrock

DeathArrow
14 replies
10h53m

So bitcoin became something like money and stocks, just a number in a SQL database? And we can now finally make bitcoins out of thin air?

How long before the amount of bitcoins traded by hedge funds will be larger than the amount of bitcoins that exist in the actual bitcoin network?

amjnsx
6 replies
10h0m

No there is a hard limit of 21m Bitcoins. You can't just "print more".

Yes it's possible to trade "paper bitcoins" but if you don't own the underlying asset you are always at risk of being found out and not being able to cover the amount.

OsrsNeedsf2P
5 replies
9h19m

So the only difference between Bitcoin and stocks in 2024 is that stocks are backed by an actual underlying company. Nice.

herbst
2 replies
8h52m

Can you use stocks to trade with others worldwide in realtime with a super low fee and full control over the payment process?

Bitcoin still is a lot more than just that

soVeryTired
1 replies
8h5m

Traditionally you just use money to do that.

herbst
0 replies
6h19m

You don't. It's illegal to travel with more than $X over boarder Y. Embargos and different banking systems and culture make 'bank transfers' inaccessible to a majority of people in this world.

The only alternatives are western union and other private companies with 10+% fees or hidden private banking networks like 'Hawala'.

npoc
0 replies
8h52m

Nope. Bitcoin is the thing that does the backing.

Stocks are just a weak entitlement (not ownership) to some property that will ultimately be significantly "backed" by the bitcoin on its balance sheet

genge
0 replies
6h24m

The difference is that the US can back one by printing more money, and they can't print more bitcoin.

npoc
2 replies
8h49m

If they fractional reserve too much then they risk going bust as they can't just print more bitcoin in the event of a bank run. Just like the good old days before central banking.

NotYourLawyer
1 replies
6h49m

Print tether then. Same result.

npoc
0 replies
6h16m

If you print tether it will only devalue tether and make the price of bitcoin (in tether) go up further.

zubairq
1 replies
10h50m

The amount of fake bitcoins traded by exchanges and custodians probably exceeded 21 million already over the last 5 years.

Hence, “not your keys, not your coins”

tiku
0 replies
8h47m

Cold storage wallets.

soVeryTired
0 replies
8h55m

ETFs don’t let you create the underlying asset out of thin air. They’re just a wrapper that allows the underlying to trade easily on an exchange.

pnt12
0 replies
9h7m

I'm not a fan of crypto as an investment, but I have no problem with this.

If you are investing with in multiple ETFs and are interested in investing,not owning, in BTC, this makes things simpler - you buy the ETF, the exchange buys the BTC.

If it reaches a point where everyone is just holding for returns, then it could be a timebomb until it all crashes. We could be there already.

benlivengood
10 replies
16h1m

Finally a workaround for high transaction fees!

This should also solve the scalability issues quite a bit by reducing the need to record as many transactions in the first place once the exchanges hold most of the coins.

Finally this should reduce the long-term potential in mining as the block reward keeps reducing exponentially with lower expectations of transaction fees.

Sometimes regulatory solutions do fix hard technical problems.

herbst
2 replies
8h48m

I very highly doubt that trading ETFs has lower fees than Bitcoin.

As monetary system Bitcoin, even more crypto in general, is still the one and only method to move money internationally in realtime with very low fees.

Gareth321
1 replies
7h1m

Yeah, ARKB, for example, charges 0.75% management fee. Meaning they charge that every year on total holdings. So the ETF is clearly more expensive than simply holding BTC. I think OP believes this will lead to lower BTC fees due to lower volume.

xur17
0 replies
5h49m

It depends on what time horizon. Transaction fees are changed every time the bitcoin moves - the management fee is charged 1x / year.

guappa
2 replies
12h9m

Is this the kind of solution where you aren't actually using the blockchain, and are just ending up trusting a 3rd party that acts like a bank but is not regulated?

earnesti
1 replies
12h6m

The majority of people don't want to touch the blockchain.

guappa
0 replies
11h24m

They also greatly benefit from regulations.

x86x87
1 replies
15h38m

There are already L2 solutions like the Lightning Network.

handojin
0 replies
11h40m

I think the joke is sailing over your head?

rahmansahinler1
1 replies
8h11m

Does this sound you like a solution? There is no another tech invented for reducing gas fees and increase the speed. They just now have acceess to create new fake bitcoins like 'money' and have authorize over it. What is the difference betweeen this new printed bitcoin and the money?

tnel77
0 replies
4h28m

Can you elaborate on “new printed Bitcoin?” Are you referring to the block rewards or the new ETF shares?

yieldcrv
7 replies
20h43m

all it took was a judge declaring the SEC’s prior view toward bitcoin ETFs to be arbitrary and capricious

and the SEC thinking about appealing but realizing this absolutely based SCOTUS would delete the SEC like Thanos if they ever get taken beyond circuit appeals court by the private sector

markets win

ur-whale
2 replies
20h37m

based -> biased ?

[EDIT]: looks like no, saying "a based judge" actually has meaning in English.

wmf
0 replies
20h30m
miohtama
0 replies
20h29m

No, it's slang.

    (used to express approval or respect, especially in response to a social media post): Based. At least somebody shows some spine on this forum.

kasey_junk
1 replies
20h34m

The Supreme Court heard arguments in November on the constitutionality of the SEC.

yieldcrv
0 replies
18h31m

regarding how the SEC circumvents the 7th amendment in how they fine people

regarding whether Congress even delegated that discretion to the SEC whether the 7th amendment circumvention stands or not

and regarding whether their in-house, on-staff, judges can be exempt from removal

there are plenty more deeper questions to bring before the supreme court, about this specific agency. this SCOTUS has expressed interest in taking out the remaining vestiges of the New Deal, which were mostly found unconstitutional in the late 1930s, with the remaining things simply being difficult to find standing for - hard to take to court. The SEC's main behaviors being one of those things. this SCOTUS has expressed interest in how the interstate commerce clause is interpreted at all, which is also a core tenant of the New Deal. Could possibly reshape our entire relationship with the Federal Government. The SEC would take the biggest L while the capital markets would be fine.

charlie0
1 replies
14h48m

fr... on god, this BTC ETF is bussin

yieldcrv
0 replies
14h18m

common bitcoin w

ent1ty
7 replies
10h4m

With quantum computing growing rapidly, aren't all blockchains in danger of being decrypted and drained in the future?

tsimionescu
2 replies
9h51m

Quantum computing is not "growing rapidly", it is at best "fast approaching" (and even that is doubtful). There is no quantum computer that does any kind of useful work today at all * - the biggest accomplishment of any quantum computer to date has been to run a simplified version of quantum factoring that calculated the prime factors of 15 are 3 and 5, if I remember correctly (maybe it was 21 = 3 × 7 actually?).

Also, the blockchain is not encrypted, it is cryptographically signed. Any clients "decrypt" it all day every day, that is how you verify it. The security comes from making it hard to find a hash of a block that has the right structure. I don't think it is known whether any quantum algorithm could improve significantly on this problem (there might be a small improvement from using the quantum O(sqrt(n)) Grover's algorithm instead of the classical O(n) searches, but that's not hard to work around). Note that quantum computers are only known to be exponentially faster at a handful of very specific problems, not in the general case. While this is not established fully, it is considered highly likely by those in the field to be the case.

* there are some computers that implement specific quantum algorithms that are sometimes called quantum computers, but those can't do the more interesting algorithms that could break encryption.

rcxdude
0 replies
8h42m

You're forgetting the other very significant part of cryptography on the blockchain: the signing of transactions with wallet keys. If you can crack the public/private key system (and what bitcoin uses is not quantum-resistant), then you can sign transactions on other people's addresses. Now, this is not 100% catastrophic in principle: a break requires an address to have signed a transaction before, so in principle if you are cycling addresses like you're supposed to, you are safe, except you can't publish your transaction to the mempool anymore without risking being sniped by someone else, you need to send it to a miner you trust, which is somewhat damaging to the whole 'trustless' part of the idea.

This is one reason amongst a few to be bearish on bitcoin over longer timescales, even as a 'store of value'.

nadahalli
0 replies
8h42m

The hashing part is kind of orthogonal. The real negative outcome of quantum computers getting reliable and powerful would be that ECDSA would be broken (using Shor's algorithm variants). This would make every coin stealable by anyone with access to such a computer. Some coins would be easier to steal than others (P2PK would be the easiest - and all of Satoshi's coins are P2PK). The Bitcoin network would keep working, but coin-ownership would be meaningless.

metw02024
0 replies
9h55m
iSnow
0 replies
7h50m

If it happens, it won't happen overnight and chains could migrate to different algorithms. IIRC, Monero switched hashing algos, even for unrelated reasons.

genge
0 replies
6h21m

There are quite some papers on making BTC quantum resistent (and some already are). Here a good podcast on it https://www.youtube.com/watch?v=g-Y4PT8va94

fidelramos
0 replies
7h51m

I'm not concerned about quantum computers becoming a threat to cryptocurrencies for several reasons:

- No timeline for working quantum computers of the necessary size yet.

- Blockchains can and will upgrade to newer quantum-resistant cryptographic primitives when needed.

- Bitcoin addresses are only part of the public key, the full public key is only published when a transaction is made. This increases the search space tremendously, as you don't even know the public key you are trying to crack. This is another reason why it is best practice to not reuse Bitcoin addresses, always move coins to fresh ones.

This page in the Bitcoin Wiki [0] has more details about quantum computing threats to Bitcoin.

[0] https://en.bitcoin.it/wiki/Quantum_computing_and_Bitcoin

dpflan
7 replies
20h14m

What other products that are as known-to-be-risky-and-associated-with-fraud are backed by an ETF? Genuinely curious what else is out there...

kobalsky
2 replies
14h43m

THCX the cannabis ETF went from $230 to $16. Maybe it was not known to be risky, but it was a massive rug pull. Does that qualify?

dpflan
1 replies
6h51m

I should've added this comment from the SEC, the entity that just authorized this ETF:

"""

Though we’re merit neutral, I’d note that the underlying assets in the metals ETPs have consumer and industrial uses, while in contrast bitcoin is primarily a speculative, volatile asset that’s also used for illicit activity including ransomware,[4] money laundering,[5] sanction evasion,[6] and terrorist financing.[7]

"""

- https://www.sec.gov/news/statement/gensler-statement-spot-bi...

What other ETF exists for an asset that the SEC closes its statements about like this?

dpflan
0 replies
3h57m

I think you may be right regarding the thc industry in the US, its gray area of existence.

TacticalCoder
1 replies
19h15m

What other products that are as known-to-be-risky-and-associated-with-fraud are backed by an ETF?

Government bonds. There were ETFs holding Greek gov bonds for example. Greek cheated to enter the EU (by fudging its numbers, with the help of big accounting firms and banks). And government bonds are known to be risky, seen that throughout times many government have simply grown their public debt and then defaulted.

Fun fact: US public debt grew from $33 trillion (with a 't') to $34 trillion in ... drumroll ... 100 days.

Woot!

P.S: I'm not sure your question is correctly phrased... 3% to 5% of the world's entire GDP is linked to crime. By now it's not even clear if 3% to 5% of all the Bitcoin transactions are linked to crime.

dpflan
0 replies
6h51m

Your post-script is something to consider.

I should've added this comment from the SEC, the entity that just authorized this ETF:

"""

Though we’re merit neutral, I’d note that the underlying assets in the metals ETPs have consumer and industrial uses, while in contrast bitcoin is primarily a speculative, volatile asset that’s also used for illicit activity including ransomware,[4] money laundering,[5] sanction evasion,[6] and terrorist financing.[7]

"""

- https://www.sec.gov/news/statement/gensler-statement-spot-bi...

What other ETF exists for an asset that the SEC closes its statements about like this?

mratsim
0 replies
20h9m

Stocks of WeWork?

jMyles
0 replies
20h9m

The world's foremost money launderer is a fund provider for several ETFs, eg:

https://www.justetf.com/en/etf-profile.html?isin=IE00B4X9L53...

bluecalm
5 replies
6h51m

Is there any guarantee that if this goes wrong (let's say ETF's are hacked and lose their BTC) then assets in other ETF's are safe? Let's say BlackRock ends up on the hook for billions after their BTC ETF goes wrong. Are my shares in iShares NASDAQ 100 ETF safe?

I want to make sure I don't have any exposure to crypto world by owning stock ETFs. If there is any scenario that I am on the hook for crypto nonsense going south I am going to sell and just own selected stocks instead. I would greatly appreciate someone providing clarity on this issue.

tnel77
0 replies
4h29m

Imagine being this paranoid. I believe you and your money are safe. Have a nice day!

jakupovic
0 replies
5h30m

You should cash out and only use physical cash as then you would be guaranteed 0 exposure to the crypto financial world. As you will not do that, I'm sure, you will be exposed to BTC and other crypto as they will be held by funds and institutions you necessarily own as part of the financial world.

Sorry but not sorry, there is no more BS around BTC being for "bad actors", now everyone is exposed. Your disdain is not warranted and makes you a loser if you go with the cash option and 0 exposure. Again, sorry but but sorry ...

injeolmi_love
0 replies
3h4m

You’re probably right about this issue. BTC is a bearer asset and is inherently difficult to store right- someone has to know the private key, and that someone could always irreversibly steal the funds (hopefully it’s multiple someones with a multisig). Especially with such a large pot of money all state backed hacker groups are going to be actively hunting for vulnerabilities.

helsinkiandrew
0 replies
6h25m

Is there any guarantee that if this goes wrong (let's say ETF's are hacked and lose their BTC) then assets in other ETF's are safe?

They're as safe as any other share or ETF of a company that could be hacked or robbed/suffer a disaster of some kind, or indeed any regulated bank, broker, exchange etc. As the BTC securities would be a small part of the total value of the Organisations holding them - I would assume that they would be capable of making up of any losses to holders due to their screw up (as happened when Nickel was stolen from a warehouse that was used as backing for Nickel futures contracts).

However, any other external crypto nonsense going south would likely cause BTC to drop!

denotational
0 replies
6h46m

I can only speak for EU (Ireland) domiciled ETFs, but there shouldn’t be any possibility of such contagion: something highly liquid like NASDAQ 100 will be 100% physically replicated with the assets held by a custodian. The collapse of a separate ETF that happens to have the same manager will not have an impact on the rights of shareholders of another ETF to the assets backing the fund.

I know nothing about the legal vehicles used for US domiciled ETFs, but I would assume the situation is the same.

Talk to a financial advisor before making decisions based on this information.

jrmg
4 replies
17h16m

What’s the difference between this and e.g. GBTC?

killerstorm
2 replies
16h22m

GBTC has two problems:

1. fees are absolutely insane 2. it doesn't actually track Bitcoin price

A proper ETF which aims to be competitive might be much closer to actual BTC ownership

modeless
0 replies
15h38m

It will track the price now that it is an ETF, that's solved. Fees are still insane so it will slowly dwindle as people sell it in favor of other options, but it will still exist for a long time because people can't sell their existing holdings without triggering huge capital gains taxes.

keenmaster
0 replies
15h48m

2 will be solved by arbitrage (the discount will evaporate). 1 can be solved by competition, assuming GBTC holders actually switch to lower fee ETFs once they see the discrepancy in fees.

snapcaster
0 replies
16h41m

GBTC is becoming an ETF, so shortly the answer will be "nothing". But, currently it's not an ETF or equivalent because you can't redeem the shares of the ETF for the underlying asset. This has resulted in the price of GBTC diverging significantly from the price of bitcoin since you don't have that natural ability to arbitrage away and price differences with redemptions

jcuenod
4 replies
20h50m

For real this time?

paulpauper
2 replies
16h29m

not technically an ETF. an ETP

ikmckenz
1 replies
13h43m

An ETF is a type of ETP

bondarchuk
0 replies
6h17m

all poodles are dogs...

awfml
0 replies
20h49m
hn_throwaway_99
4 replies
20h9m

The fact that Spot Bitcoin ETFs were ever contemplated into existence just shows the general insanity of crypto. After all, if you believe that cryptocurrencies, with "the code is the law" ethos and non-reputable transactions, are the wave of the future, just transact in BTC directly. If you believe crypto is actually too risky to manage individually (e.g. hacked/stolen keys) then you'd want the benefit of something like an ETF to manage your ownership. But buying an ETF that itself just holds crypto assets is either an exercise in futility or a "worst of all worlds" situation. But I guess a middle man needs to make a buck somehow...

psychlops
2 replies
20h2m

The fact that Spot Bitcoin ETFs were ever contemplated into existence just shows the general insanity of crypto.

Why is it the insanity of crypto? The action is entirely established interests putting a wrapper around crypto.

How do you suppose a large fund should purchase bitcoin? They specialize in markets, not wallet management. Many also do not hold their own cash individually and entrust institutions.

hn_throwaway_99
1 replies
16h50m

Many also do not hold their own cash individually and entrust institutions.

Because literally the entire point of crypto is to not have to "entrust institution". Like the entire bitcoin protocol is built around the concept of trustlessness. If you're going to start "trusting institutions", you can do away with a huge part of the complexity (and gargantuan energy usage) of Bitcoin.

psychlops
0 replies
14h49m

Bitcoin isn't directing companies to start ETF's, nor is it trusting institutions. It's just a protocol. Institutions came, bought Bitcoin and are selling it to investors.

I suppose if those institutions were worthy of trust then there wouldn't be such high demand for Bitcoin's gargantuan energy usage in the first place.

jMyles
0 replies
20h5m

Agreed - I think the little cryptographer in all of us regards this as a sad day.

It's going to take real courage to leave the economic systems of predation and extraction behind. Whether or not you think crypto is likely to be a large part of that motion (I do, but some reasonable folks disagree), there's nothing about this action that feels like it's part of it.

Devasta
4 replies
8h50m

A fantastically incompetent decision, just unbelievable.

tiku
3 replies
8h48m

Why? Supply and demand. If there is demand then it's fine. If there isn't any thats ok as well.

Devasta
1 replies
7h34m

Its climate arson.

diggan
0 replies
7h15m

Aren't there oil ETFs or other types of ETFs that have a much higher negative impact on the environment?

Any sort of currency seems to bring out the worst, maybe currencies in general is the problem?

hackerlight
0 replies
6h58m

There's sizeable market failure in the form of externalities, in this case emissions tied to its energy usage.

tnel77
3 replies
4h25m

I’m only here to see the acrobats continuing to claim Bitcoin is a fraud, only for criminals, and “going to die any day now.” Have a nice day everyone! What an awesome achievement for the crypto community!

johnwheeler
2 replies
3h9m

Maybe it’s that it turns morons into financial advisors is why people hate it.

tnel77
0 replies
1h45m

There’s undeniably a lot of plain stupid luck where some people bought, forgot, and now it’s worth millions. I feel like every asset has people who blindly love it (Tesla for example) and will insufferably spout their nonsense to anyone that’ll listen just to drive up the price of their favorite stock/crypto/whatever. I don’t think there’s anything we can do to avoid that.

olalonde
0 replies
1h56m

It's irrational but I believe you are right. See this comment for example: https://news.ycombinator.com/item?id=31356857

bb88
3 replies
13h44m

So here's a question I don't know off hand:

Can someone short bitcoin with this ETF?

somedude895
0 replies
11h46m

There will be inverse ETFs on these in no time, give it a month or so.

miohtama
0 replies
11h2m

No you cannot.

But there have existed regulated CME Bitcoin Futures instruments to short Bitcoin more than a half decade now.

ijhuygft776
0 replies
13h40m

Can't you short it the same way you short all other securities?

wslh
2 replies
20h48m
olalonde
0 replies
10h29m

HODL and BRRR... Nice.

jbverschoor
0 replies
20h24m

Also got 404, so thought it was fake..

sega_sai
2 replies
14h55m

I wonder what happens when an unregulated market that can be easily manipulated is connected to a 'normal' stock exchange through instruments like Bitcoin ETF.

ensocode
0 replies
9h40m

maybe a good way to disrupt the current system

Nursie
0 replies
13h49m

We're all going to find out. It's going to be wild.

rastafarigpu
2 replies
19h47m

Irony of the millenium! Wasn't Bitcoin supposed to "free" us from the banks, "speculative" finanacial institutions and centralised control? Guess human greed trumps everything!

ric2b
0 replies
16h18m

This is like saying that open source fails its purpose if it is also used by companies.

lxgr
0 replies
17h34m

Bitcoin was supposed to be available to anyone. By definition, that also includes banks and speculators.

jbverschoor
2 replies
20h23m

Interestingly, the SEC and Gary did not publish any tweet or press release..

iceIX
1 replies
19h54m
jbverschoor
0 replies
19h49m

Ahh.. and there I was, refreshing press releases, and url-hacking to get the latest (2024-4 and then 2024-5) haha

xur17
1 replies
10h38m

I found this site pretty useful for comparing the different ETF tickers: https://www.btcpricetool.com/etf.html

matijao
0 replies
10h35m

Fees here are very outdated, almost all of them lowered the fee again during the past 2 days

peter_d_sherman
1 replies
12h48m

"The historic approval paves the way for the first regulated exchange-traded product in the U.S. to give investors direct exposure to the price of Bitcoin without requiring them to buy it or worry about self-custody. Investors will buy shares in ETFs holding Bitcoin as its underlying asset."

Interesting!

Looks like we've paved the way for yet another abstracted financial instrument -- which sits on top of yet another abstracted financial instrument...

My only question, at this point in time, were I to have one, would be something like the following:

What's the maximum levels of financial abstraction -- that can be stacked on top of one another?

?

???

Related:

https://en.wikipedia.org/wiki/Financial_instrument

https://en.wikipedia.org/wiki/Abstraction

https://www.joelonsoftware.com/2002/11/11/the-law-of-leaky-a...

https://en.wikipedia.org/wiki/Abstraction_(linguistics)

https://en.wikipedia.org/wiki/Tower_of_Babel

https://www.youtube.com/watch?v=LFrdqQZ8FFc

hereme888
0 replies
11h58m

Lol, good point.

How about a WBTC ETF?

miohtama
1 replies
20h36m

For the Gary Genler's comment (and the opinion of a lot of commenters on Hacker News):

Though we’re merit neutral, I’d note that the underlying assets in the metals ETPs have consumer and industrial uses, while in contrast bitcoin is primarily a speculative, volatile asset that’s also used for illicit activity including ransomware,[4] money laundering,[5] sanction evasion,[6] and terrorist financing.[7]

You can find how this was addressed in the approval:

See, e.g., Kling Letter (stating that the bitcoin futures price is beholden to the spot price, and the spot price has always been, and continues to be, manipulated by bad actors); Better Markets Letter I at 2 and 4-9 and Better Markets Letter II at 4-6 (stating that spot bitcoin ETPs are extremely vulnerable to manipulation by bad actors because spot bitcoin markets (1) have a history of artificially inflated trading volumes due to rampant manipulation and wash trading, (2) are highly concentrated, and (3) rely on a select group of individuals and entities to maintain the bitcoin network); Letter from John Palmer, dated Aug. 11, 2023, regarding SR-CboeBZX-2023-028 (stating that 75% of the bitcoin in circulation is controlled by a small minority who use market makers to pump and dump); Daniel Smith Letter (“[t]he history of crypto is a never-ending history of frauds and scams”); Letter from Billy Jensen, dated Sept. 5, 2023, regarding SR- CboeBZX-2023-028 (stating that bitcoin is a digital Ponzi, and that approving a spot ETF “will bring greater unsuspecting fools into the pyramid scheme”); Letter from The Registered Principal, dated Aug. 9, 2023, regarding SR-CboeBZX-2023-038, SR-CboeBZX-2023-040, SR-CboeBZX-2023-042, SR- CboeBZX-2023-044, SR-NASDAQ-2023-016, SR-NASDAQ-2023-019, and SR-NYSEARCA-2023-44 (“[t]here are no verifiable entities or persons as points of ultimate origin of [b]itcoin which makes it very likely to be a major fraud operation”); Letter from Joseph, dated July 18, 2023, regarding SR-CboeBZX- 2023-044 (“[a] cartel of organized crime and money-launders [sic] actively manipulate the price of [b]itcoin through the use of Tether and other crypto-ponzi schemes”); Letter from Avinash Shenoy, dated Oct. 18, 2023, regarding SR-NASDAQ-2023-016 (stating that manipulation in the bitcoin marketplace has not gone away); Letter from Winston Wood, dated Oct. 19, 2023, regarding SR-NASDAQ-2023-016 (stating that the bitcoin market is manipulated and has a history rife with scams and criminal activity); Letter from Greg Steven, dated Oct. 19, 2023, regarding SR-NASDAQ-2023-016 (“Steven Letter”) (stating that bitcoin is wash traded on platforms outside of U.S. jurisdiction); Letter from Neil Fulton, dated Oct. 20, 2023, regarding SR-NASDAQ-2023-016 (recommending that spot bitcoin ETPs be disapproved until bitcoin wash trading is minimized); Letters from Micah Warren, Associate Professor of Mathematics, University of Oregon, dated Oct. 27, 2023, regarding SR-NASDAQ-2023-016, and dated Dec. 15, 2023, regarding SR-CboeBZX-2023-072 (“Warren Letters”) (explaining how the bitcoin ledger, which is maintained by for-profit mining entities, could become significantly less diverse and less costly to manipulate). Some commenters also assert that the bitcoin asset itself is a manipulation or fraud. One commenter states that “the complete lack of knowledge of who the operators of the bitcoin network are means that it is impossible to implement sufficient control measures to ensure a fair market that is free from manipulation of both token trades, actions of the operators, or even the fundamental properties of the asset itself.” See Letter from Brandon B., dated Oct. 25, 2023, regarding SR-NASDAQ-2023-016 (“Brandon Letter”), at 4. Another commenter asserts that the questions the Commission has been asking about fraud and manipulation are misguided because “they are predicated on the idea that [b]itcoin is something legitimate which could possibly serve the public interest.” This commenter claims that “[b]itcoin is, and has always been, a form of investment fraud” that should be banned, not regulated. See Letter from Sal

Commission acknowledges these concerns. Pursuant to Section 19(b)(2) of the Exchange Act, however, the Commission must approve a proposed rule change filed by a national securities exchange if it finds that the proposed rule change is consistent with the applicable requirements of the Exchange Act.61 For the reasons described above, the Commission finds that the Proposals satisfy the requirements of the Exchange Act, including the requirement in Section 6(b)(5)62 that the Exchanges’ rules be designed to “prevent fraudulent and manipulative acts and practices.”
iSnow
0 replies
7h49m

Sounds like he would have loved to deny again, but the court forced his hand.

democracy
1 replies
15h36m

Because blockchain, bitcoin and cryptography! You just don't lose money with bitcoin. It's mathematically impossible. Even if you lose money with bitcoin - it's good for bitcoin. It's free currency. Democracy. Bank the unbanked.

obviouslynew
0 replies
15h34m

I agree this is philosophically unaligned with the ethos of Bitcoin. But it's still fascinating to watch isn't it? SEC Approves an ETF of a digital currency created by an anonymous open source developer(s). When has something like that happened before in software?

dcolkitt
1 replies
15h45m

I think it's easy to be cynical. But one major reason I'm a believer in decentralized consensus is because I think it can make the silo'd financial systems of the world as seamlessly interoperable as the Internet made the silo'd telecommunication systems of the world.

It feels a lot like when AOL first started supporting email in 1993. It's easy to dismiss AOL and Nasdaq as highly centralized systems that don't align with the ethos of decentralization. But the other way to look at it is a previously maximally centralized system is interfacing with a decentralized one in a way that gives the users of the former slightly more freedom and the latter wider user base and legitimacy.

TimJRobinson
0 replies
14h46m

I think this is a large part of why many Americans in particular don't understand crypto. They already have access to the world's best financial system and all the protections of the state when using it.

Living in Australia and trying to invest in financial markets overseas is like pulling teeth sometimes, because every country has their own incompatible systems and local rules and regulations. And this is a developed well integrated country!

Crypto is the first time we have a global financial system that everyone can join without any one country being able to set the rules and control the system. This is extremely beneficial for countries that don't trust each other to be able to integrate and trade.

Timber-6539
1 replies
16h29m

No Bitcoin, you were meant to destroy them. Not give them an extra avenue to make profits.

0xpgm
0 replies
14h50m

Embrace, extend, extinguish. Though it could work both ways here

superfunny
0 replies
13h23m

Bitcoin makes pets.com look like Berkshire Hathaway

rahmansahinler1
0 replies
8h19m

There is something I'm not sure of about new topics. Bitcoin makes it's value mostly it's aspect of being decentralized. I think new approves does not increase original bitcoin value. Maybe the big guys wants to create another hype loop that will gather people's money.

olalonde
0 replies
10h42m

This is good for Bitcoin.

hospitalJail
0 replies
5h56m

Pretty much endgame level for Bitcoin.

Marazan
0 replies
10h1m

An astonishing poor decision from the SEC.