War On Cryptocurrencies [LWN.net]

War On Cryptocurrencies

Posted Jan 12, 2018 10:10 UTC (Fri) by Garak (guest, #99377)
In reply to: War On Cryptocurrencies by anselm
Parent article: Welcome to 2018

If a cryptocurrency ever becomes acceptable for everyday usage (think “grocery shopping”), it's unlikely to be Bitcoin because Bitcoin can't handle the transaction volume.

And what makes you think the bitcoin developers wouldn't copy the features of whatever fork or competitor defeats it technically, and call the resulting thing 'bitcoin'. I agree with you that bitcoin as it is today isn't going to last forever. And odds are the longer term winners won't be called bitcoin. But by the time a bitcoin competitor becomes usable for grocery shopping, what makes you think the bitcoiners won't adopt those features/designs to remain competitive? Again, I agree with you basically. There will be lots of competitors. I'm not thinking in terms of caring what the long term successful ones are named. I'm more concerned with thinking about what it means that there will be long term successful cryptocurrencies. Bitcoin is a name, a current design, implementation, and deployment. To say that bitcoin, as it is today, if it doesn't evolve further, will not thrive, is true, but not insightful.

I don't think the comparison to Linux makes a lot of sense because at the end of the day Linux is just a software program, and in principle anyone can write a software program, especially if one is doing it in one's spare time and can't go bankrupt doing it. Especially when it was new, Linux wasn't doing anything, on a technical level, that others weren't doing already. Bitcoin, OTOH, is trying to break entirely new ground.....

At the end of the day Bitcoin is just a software program, and in principle anyone can fork it, with zero or any number of modifications (just like Linux, FOSS is FOSS, Linux and Bitcoin both are FOSS). And when bitcoin, or any past or future fork of bitcoin or any cryptocurrency starts out, it isn't doing anything on a technical level that others weren't doing already. Bitcoin isn't breaking entirely new ground. People were pondering cryptocurrency long before bitcoin became the first majorly successful implementation and deployment. And that was hardly overnight. Any of the inevitably many new cryptocurrencies will have the same trajectory. Starts as a small project, and to the extent it succeeds in doing anything useful, it achieves and reaches critical mass. The real difference between cryptocurrencies and FOSS projects in general is that the financial benefits that drive development are less indirect. So I think cryptocurrencies will have a more accelerated path of advancement than Linux or other FOSS projects.

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War On Cryptocurrencies

Posted Jan 12, 2018 13:34 UTC (Fri) by NAR (subscriber, #1313) [Link] (6 responses)

"what makes you think the bitcoiners won't adopt those features/designs to remain competitive?"

As far as I understand, the core concept of bitcoin is the proof of work. It has to be computationally hard, otherwise forks would remain for a long time. On the other hand, in order to speed up the transactions, the proof of work must be solved quickly. Do you see the contradiction? There are blockchains/cryptocurrencies without proof of work, but they are conceptually different from bitcoin.

At the end of the day Bitcoin is just a software program

Most definitely not. Bitcoin is a database that contains who have how much "money". How do you fork data? Each fork would double the amount of money people have? You'd soon have different amount of money on the different sides of the fork. It would be a nightmare.

War On Cryptocurrencies

Posted Jan 12, 2018 14:22 UTC (Fri) by excors (subscriber, #95769) [Link] (5 responses)

> Each fork would double the amount of money people have?

Why not? The Bitcoin Cash fork appears to be reasonably stable so far, and has increased every Bitcoin-holder's money by about a factor of 1.2 when converted to USD. Obviously that's insane, but cryptocurrencies transcend the petty limits of rationality.

War On Cryptocurrencies

Posted Jan 12, 2018 16:24 UTC (Fri) by NAR (subscriber, #1313) [Link] (2 responses)

Well, the rise of the tulip bulb prices were also insane :-)

War On Cryptocurrencies

Posted Jan 12, 2018 22:07 UTC (Fri) by Garak (guest, #99377) [Link] (1 responses)

was the market cap of tulip bulbs comparative to the market cap of cryptocurrencies? If so, then yes, cause for continued skepticism factor. If not, then it's like comparing apples to oranges, or cryptocurrencies to tulip bulbs as it were.

War On Cryptocurrencies

Posted Jan 12, 2018 22:50 UTC (Fri) by Wol (subscriber, #4433) [Link]

Dunno about the market cap, but, in modern terms just one tulip bulb could be worth about £1/4M. OUCH!!!

(Ten times the salary of a skilled worker, said salary being probably in excess of £25K.)

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

Cheers,
Wol

War On Cryptocurrencies

Posted Jan 13, 2018 11:30 UTC (Sat) by smurf (subscriber, #17840) [Link] (1 responses)

Well, in a rational world the Bitcoin A plus Bitcoin B price after the split would be the same as before, but there's no sane way to discover their relative utility (such as there is) beforehand. So the market will be volatile until that sort itself out. And since bitcoin volatility easily exceeds 20% over the course of a day or two …

Bitcoins per se aren't the problem IMHO. The idea itself has a lot of merit. And just like in the early days of industrialization there's a lot of cash and hype floating around, and there's stupid ideas like prohibiting dealing with cryprocurrencies instead of regulating the whole business (let's start with applying existing regulations to it) which is about as dumb, or long-term effective, as requiring a man with a red flag to walk in front of a car. You all know *that* story.

The one major problem I see is that proof-of-work leads to an arms race w/ investing in hardware that gets obsolete as soon as it's deployed. To be fair, nobody had any idea how to do a reasonable proof-of-stake system ten years ago. (Actually, proof-of-work is just proof-of-stake expressed in nonredeemable hardware and energy cost.) These days the Ethereum people are at least working on a viable solution. Bitcoin? not so much.

The other problem, which I'm not holding my breath about it getting resolved without another MtGox-like big crash (except that it's going to be worse), is Tether / Bitfinex. https://www.nytimes.com/2017/11/21/technology/bitcoin-bit...

War On Cryptocurrencies

Posted Jan 18, 2018 2:57 UTC (Thu) by Garak (guest, #99377) [Link]

"which is about as dumb, or long-term effective, as requiring a man with a red flag to walk in front of a car. You all know *that* story."

Actually I must have missed that memo, please elaborate.

"The one major problem I see is that proof-of-work leads to an arms race w/ investing in hardware that gets obsolete as soon as it's deployed. To be fair, nobody had any idea how to do a reasonable proof-of-stake system ten years ago."

This sounds perhaps overfocused on the Bitcoin model. Another model I've been considering for more than a decade is something along the lines of bittorrent/network-file-sharing. I'm sure there have been and will be other quite different models than the bitcoin one (which I may not understand- is it basically about making the recursively generated ledger signature easier (less computationally costly) for the many wallet-nodes to compute?, i.e. is that the useful product of the proven work, or is there some other useful product, or none at all?)

NYTimes - "These days, no exchange is bigger than Bitfinex, an opaque operation that provides no information on its website about where it is or who operates the company."

For anecdotal evidence, I recently made my first (sub$100, entertainment/experimentation value) crytpocurrency buy from Coinbase(tm) because I saw it referenced in some cryptocurrency discussion thread, looked it up as being one of the top few, checked it's wikipedia page and saw it was headquartered in California, so figured it was safe enough. Oddly my visa transaction log shows 'FRGN TRANS FEE-COINBASE CH'. Which seems weird. I wouldn't have done business with them if I had thought it involved a financial transaction with a company in a foreign country. However despite these things, and despite a future with an equal proportion of shenanigans and charlottanism to what we have seen with traditional currency markets, I still would bet on the general future of cryptocurrency. With math discovery epochs along the way. Diversification of risk of course being the common sense wisdom.