Escape from the Blockchain
January 14, 2016 5:53 PM Subscribe
Prominent Bitcoin developer Mike Hearn writes an epitaph for Bitcoin: "Bitcoin is an experiment and like all experiments, it can fail."
I'm not saying the sky couldn't fall, but it is not yet falling.
Been falling for several years now. Although I guess that fact hasn't stopped a bunch of /r/bitcoin basement dwellers wringing their hands over why everyone who hasn't adopted Bitcoin is so stupid and ignorant about economics, man.
posted by Jimbob at 6:25 PM on January 14, 2016 [15 favorites]
Been falling for several years now. Although I guess that fact hasn't stopped a bunch of /r/bitcoin basement dwellers wringing their hands over why everyone who hasn't adopted Bitcoin is so stupid and ignorant about economics, man.
posted by Jimbob at 6:25 PM on January 14, 2016 [15 favorites]
Dunning-Krugerrands, for sure. Kind of amazing that the collapse he's talking about is your standard, classic-model free-software colony collapse, though. Only slightly about Bitcoin per se, mostly about the community's aggressively self-imposed paralysis in the face of structural failures.
posted by mhoye at 6:31 PM on January 14, 2016 [22 favorites]
posted by mhoye at 6:31 PM on January 14, 2016 [22 favorites]
Yeah, it's surprising the end has come due to the typical open-source bickering, rather than the complete lack of understanding of both economics and human motivation.
posted by Jimbob at 6:35 PM on January 14, 2016 [32 favorites]
posted by Jimbob at 6:35 PM on January 14, 2016 [32 favorites]
I admire Hearn's post for the data he produced. I don't know the politics + tech well enough to know whether his proposal for larger blocks is the solution. But he definitely identified a real problem. And it's been there since the beginning. The theoretical 7 transactions / second Bitcoin was designed with is laughably small for a real global payment system. And as he says and his data suggests, the actual practical limit is smaller than that. People keep saying the limit can be raised but so far, there's been no actual solution.
posted by Nelson at 6:52 PM on January 14, 2016
posted by Nelson at 6:52 PM on January 14, 2016
Cryptocurrency as an asset and/or blockchains as ledgers and networks will be a thing, and are a thing.
Bitcoin Classic, FX or it's forks probably won't be it for the long run like most first implementations of technologies. While it has been fairly stable on paper compared to "fiat" or "metal" the interface and liquidity and retail/consumer adoption are all lacking, and it's all really just tulips as watts of busywork-as-proof in the buy-in that is the blockchain, really, and there are now way too many invested speculators and opposing interests at a fragile time for it to ever be truly adopted as a consumer currency.
It did unleash a very dynamic, world changing concept of accountability, network peering, proof of work as value and more that isn't likely to go away.
posted by loquacious at 7:11 PM on January 14, 2016 [6 favorites]
Bitcoin Classic, FX or it's forks probably won't be it for the long run like most first implementations of technologies. While it has been fairly stable on paper compared to "fiat" or "metal" the interface and liquidity and retail/consumer adoption are all lacking, and it's all really just tulips as watts of busywork-as-proof in the buy-in that is the blockchain, really, and there are now way too many invested speculators and opposing interests at a fragile time for it to ever be truly adopted as a consumer currency.
It did unleash a very dynamic, world changing concept of accountability, network peering, proof of work as value and more that isn't likely to go away.
posted by loquacious at 7:11 PM on January 14, 2016 [6 favorites]
Bitcoin can never fail. It can only be failed by mere mortals who are inadequate to comprehend the might of blockchain technology.
posted by fifteen schnitzengruben is my limit at 7:19 PM on January 14, 2016 [28 favorites]
posted by fifteen schnitzengruben is my limit at 7:19 PM on January 14, 2016 [28 favorites]
Bitcoins have an intrinsic limitation in that the cost of "printing" each one increases almost exponentially (no idea the actual rate). A penny costs about a nickle to make, well a bit less but more than a penny, but if each penny cost a couple dollars and kept increasing rapidly a new method of allocating gum balls would soon be found.
But some kind of cryptocurrency will be worked out. One that allows governments to manage the money supply and have the advantages of difficulty counterfeiting will be devised.
Start mining your dogecoins.
posted by sammyo at 7:28 PM on January 14, 2016 [1 favorite]
But some kind of cryptocurrency will be worked out. One that allows governments to manage the money supply and have the advantages of difficulty counterfeiting will be devised.
Start mining your dogecoins.
posted by sammyo at 7:28 PM on January 14, 2016 [1 favorite]
Bitcoins have an intrinsic limitation in that the cost of "printing" each one increases almost exponentially (no idea the actual rate).Right, that's by design. There can never be more than 21,000,000 bitcoin.
posted by ArmandoAkimbo at 7:33 PM on January 14, 2016
Bitcoin's reliance on cheap power, political stability/ignorance in some networked nations and politely letting it happen for now by others, the vested self-interest of the larger players and the so-far unwillingness of anyone with a large CPU footprint to end it all suggest that bitcoin may, in fact, fail.
posted by mhoye at 7:35 PM on January 14, 2016 [4 favorites]
posted by mhoye at 7:35 PM on January 14, 2016 [4 favorites]
-
posted by ArmandoAkimbo at 7:36 PM on January 14, 2016 [1 favorite]
posted by ArmandoAkimbo at 7:36 PM on January 14, 2016 [1 favorite]
This is... is g-g-great news... for...
sighs, picks up dogeared copy of Snow Crash, trudges out of room
posted by Halloween Jack at 7:39 PM on January 14, 2016 [6 favorites]
sighs, picks up dogeared copy of Snow Crash, trudges out of room
posted by Halloween Jack at 7:39 PM on January 14, 2016 [6 favorites]
Reminder that this is, has been, and always will be true.
posted by Sternmeyer at 7:45 PM on January 14, 2016 [16 favorites]
posted by Sternmeyer at 7:45 PM on January 14, 2016 [16 favorites]
Google says Bitcoin went from about zero in 2013 to $1,200 in 2014 and now it's about $500. Stable? gimme a break. The dollar didn't fluctuate that much in 50 years.
and politely letting it happen for now by others
Seriously. Edward Snowden already showed us everything, everywhere is being monitored. The instant this thing is a threat it will be obliterated. How naive are these people?
posted by mrbigmuscles at 7:46 PM on January 14, 2016 [1 favorite]
and politely letting it happen for now by others
Seriously. Edward Snowden already showed us everything, everywhere is being monitored. The instant this thing is a threat it will be obliterated. How naive are these people?
posted by mrbigmuscles at 7:46 PM on January 14, 2016 [1 favorite]
RAND Corporation - National Security Implications of Virtual Currency
posted by save alive nothing that breatheth at 7:57 PM on January 14, 2016 [3 favorites]
posted by save alive nothing that breatheth at 7:57 PM on January 14, 2016 [3 favorites]
I'm not saying the sky couldn't fall, but it is not yet falling.
But what if the sky wasn't there in the first place?
posted by gwint at 8:06 PM on January 14, 2016 [2 favorites]
But what if the sky wasn't there in the first place?
posted by gwint at 8:06 PM on January 14, 2016 [2 favorites]
But is the sky the color of television, tuned to a dead channel?
posted by Wretch729 at 8:10 PM on January 14, 2016 [33 favorites]
posted by Wretch729 at 8:10 PM on January 14, 2016 [33 favorites]
blue?
posted by ryanrs at 8:14 PM on January 14, 2016 [12 favorites]
posted by ryanrs at 8:14 PM on January 14, 2016 [12 favorites]
ArmandoAkimbo: “I'm not saying the sky couldn't fall, but it is not yet falling.”
Uh – so I'm an open-minded dude who loves the idea of cryptocurrency plenty, and who is not going to make snarky comments about how anyone who likes BitCoin is stupid, but – is Mike Hearn right about what he says in this article? Maybe he's biased, okay – that would not be a good thing, I agree. But is he right that lag time on BitCoin transactions is actually ranging anywhere from a few minutes to fourteen hours sometimes? That congestion is only getting worse? That there's no way to fix that without raising the block size limit, and that there's nobody anywhere who thinks that's going to happen? And is he right that there's now a setting that allows all CoinBase users to walk out of a store and then instantly nullify their payments at whim?
I mean – sure, maybe he's biased, like I said. But if that stuff is true, then yes: the sky is indeed falling for BitCoin. There is no way a currency could survive those things.
posted by koeselitz at 8:24 PM on January 14, 2016 [3 favorites]
Uh – so I'm an open-minded dude who loves the idea of cryptocurrency plenty, and who is not going to make snarky comments about how anyone who likes BitCoin is stupid, but – is Mike Hearn right about what he says in this article? Maybe he's biased, okay – that would not be a good thing, I agree. But is he right that lag time on BitCoin transactions is actually ranging anywhere from a few minutes to fourteen hours sometimes? That congestion is only getting worse? That there's no way to fix that without raising the block size limit, and that there's nobody anywhere who thinks that's going to happen? And is he right that there's now a setting that allows all CoinBase users to walk out of a store and then instantly nullify their payments at whim?
I mean – sure, maybe he's biased, like I said. But if that stuff is true, then yes: the sky is indeed falling for BitCoin. There is no way a currency could survive those things.
posted by koeselitz at 8:24 PM on January 14, 2016 [3 favorites]
Don't forget how the main currency exchange for half of bitcoin's history was a magic the gathering e card store.
posted by mikek at 8:37 PM on January 14, 2016 [13 favorites]
posted by mikek at 8:37 PM on January 14, 2016 [13 favorites]
I don't follow bitcoin closely enough to say anything cogent about how valid the article is, but one thing that struck me was that if a person who has dealt with the culture of the bitcoin community for five whole years now believes that it's become so awful that they can't cope with it any longer, it must be getting really, really bad.
posted by phooky at 8:50 PM on January 14, 2016 [2 favorites]
posted by phooky at 8:50 PM on January 14, 2016 [2 favorites]
This is good for bitcoin.
posted by Going To Maine at 9:13 PM on January 14, 2016 [4 favorites]
posted by Going To Maine at 9:13 PM on January 14, 2016 [4 favorites]
I love that the first post is a vague allegation of conspiracy against cryptocurrency and the promise of yet another new venture that will surely save everything.
Never change, BitCoin.
posted by Sangermaine at 9:39 PM on January 14, 2016 [11 favorites]
Never change, BitCoin.
posted by Sangermaine at 9:39 PM on January 14, 2016 [11 favorites]
FEDORAS JUMPING FROM THEIR BASEMENT APARTMENT WINDOWS
posted by tantrumthecat at 10:41 PM on January 14, 2016 [14 favorites]
posted by tantrumthecat at 10:41 PM on January 14, 2016 [14 favorites]
"Start mining your dogecoins."
Dogecoins are the only cryptocurrency that has actually worked for me to buy and sell things in. I haven't fired up the wallet in forever, but a while back a MeFi member bought a photo print from me with dogecoin, and I was able to turn those into some art supplies from some online shop. After that, in trying to help my wife with some tablecards and labels, I found out that the official Avery templates were basically broken because they used an outdated version of Word, so I laid out new ones using InDesign and put 'em up on dogemarket for, like, 10 doges, and have had enough people buy them that I could… get more art supplies.
So, sure, they're ultimately more like coupons or scrip at this point than actual money — I haven't seen any doge-to-dollar exchanges that seem even halfway worth giving a bunch of personal info — but the much lower value seems to encourage people to actually use them, as opposed to Bitcoin, which seems like (especially once SilkRoad went down) it has always performed about exactly like you'd expect with an intentionally deflationary currency, which will always encourage hoarding.
In a weird way, I'm kinda hoping for a massive Bitcoin collapse, because one of the things that I've been (pretty passively) working at for a while is an art project making bills for a single unit of each, and 1 BTC would require far more investment than I'm willing to make. I find the idea of virtual, crypto-currency incredibly interesting, and it's fun to think about how to reify that, but not $500 fun for me.
posted by klangklangston at 11:33 PM on January 14, 2016 [4 favorites]
Dogecoins are the only cryptocurrency that has actually worked for me to buy and sell things in. I haven't fired up the wallet in forever, but a while back a MeFi member bought a photo print from me with dogecoin, and I was able to turn those into some art supplies from some online shop. After that, in trying to help my wife with some tablecards and labels, I found out that the official Avery templates were basically broken because they used an outdated version of Word, so I laid out new ones using InDesign and put 'em up on dogemarket for, like, 10 doges, and have had enough people buy them that I could… get more art supplies.
So, sure, they're ultimately more like coupons or scrip at this point than actual money — I haven't seen any doge-to-dollar exchanges that seem even halfway worth giving a bunch of personal info — but the much lower value seems to encourage people to actually use them, as opposed to Bitcoin, which seems like (especially once SilkRoad went down) it has always performed about exactly like you'd expect with an intentionally deflationary currency, which will always encourage hoarding.
In a weird way, I'm kinda hoping for a massive Bitcoin collapse, because one of the things that I've been (pretty passively) working at for a while is an art project making bills for a single unit of each, and 1 BTC would require far more investment than I'm willing to make. I find the idea of virtual, crypto-currency incredibly interesting, and it's fun to think about how to reify that, but not $500 fun for me.
posted by klangklangston at 11:33 PM on January 14, 2016 [4 favorites]
And a good LOL was had by all
posted by vibratory manner of working at 12:31 AM on January 15, 2016
posted by vibratory manner of working at 12:31 AM on January 15, 2016
This reminded me that I should exchange the rest of my bitcoins for dogecoins. While looking into how to go about doing so just now, I saw that the bitcoin seems to have dropped by 8% today. Also, my bitcoin wallet is "98 weeks behind" and dogecoin has 0 connections to the network, so it seems like it's gonna take some time and effort to even exchange my $6 worth of bitcoins (which I acquired in the early days when there were websites just handing out 0.02 BTC to whoever asked).
posted by NMcCoy at 5:36 AM on January 15, 2016
posted by NMcCoy at 5:36 AM on January 15, 2016
Bitcoin is currency. People desire currency and they're willing to do unpleasant things to get it, like cheat or steal. Why would bitcoin be any different?
posted by tommasz at 6:11 AM on January 15, 2016 [1 favorite]
posted by tommasz at 6:11 AM on January 15, 2016 [1 favorite]
What if it isn't, like, BitCoin that's not working anymore, but, like, money that's not working anymore man?
What if a cynic was someone who knew the price of everything but, like, they were wrong, y'know?
Henhhn. Far out.
posted by petebest at 6:22 AM on January 15, 2016
What if a cynic was someone who knew the price of everything but, like, they were wrong, y'know?
Henhhn. Far out.
posted by petebest at 6:22 AM on January 15, 2016
Currency just didn't have enough drama in the fiat days...
posted by Ogre Lawless at 7:12 AM on January 15, 2016
posted by Ogre Lawless at 7:12 AM on January 15, 2016
Ahhhhh Jahaza this bit from that NYT piece is why so many people in the tech world make me want to tear my hair out and scream.
No! People have different values, and goals, and perspectives. People want different things. The world is not black and white!
posted by Wretch729 at 7:59 AM on January 15, 2016 [14 favorites]
“It never occurred to me that the thing could just fall apart because of people getting crazy and having fundamental political disagreements over the goals of the project,” Mr. Hearn said in a Skype interview from his apartment. “It’s really shaken my faith in humanity.”Have you ever met humanity? Political disagreement is kind of our thing? This enraging naïve technocratic view of the world is so common in tech (though of course isn't unique to it) and it just drives me up the wall. "Politics is so broken man. If everyone would just get together and be reasonable we wouldn't have these problems. Perople are so irrational."
No! People have different values, and goals, and perspectives. People want different things. The world is not black and white!
posted by Wretch729 at 7:59 AM on January 15, 2016 [14 favorites]
Heh. Yeah, in that vein, this bit from the main linked article above sort of stuck out to me:
In the span of only about eight months, Bitcoin has gone from being a transparent and open community to one that is dominated by rampant censorship and attacks on bitcoiners by other bitcoiners. This transformation is by far the most appalling thing I have ever seen, and the result is that I no longer feel comfortable being associated with the Bitcoin community.
If "by far the most appalling thing" you've ever seen – in this day and age – is a cryptocurrency's online community getting fighty and splintered, then... well, I envy you your ability to avoid news programs.
That kind of hyperbole would predispose me against Mr Hearn, probably, if (a) I weren't in tech and didn't hear the same thing from programmers and engineers all the time, and (b) every single other person who talks about BitCoin these days weren't similarly hyperbolic.
posted by koeselitz at 8:16 AM on January 15, 2016 [1 favorite]
In the span of only about eight months, Bitcoin has gone from being a transparent and open community to one that is dominated by rampant censorship and attacks on bitcoiners by other bitcoiners. This transformation is by far the most appalling thing I have ever seen, and the result is that I no longer feel comfortable being associated with the Bitcoin community.
If "by far the most appalling thing" you've ever seen – in this day and age – is a cryptocurrency's online community getting fighty and splintered, then... well, I envy you your ability to avoid news programs.
That kind of hyperbole would predispose me against Mr Hearn, probably, if (a) I weren't in tech and didn't hear the same thing from programmers and engineers all the time, and (b) every single other person who talks about BitCoin these days weren't similarly hyperbolic.
posted by koeselitz at 8:16 AM on January 15, 2016 [1 favorite]
And Hearn is supposedly the one arguing for a more "democratic" approach, or at least was until he gave up and ran off to R3 CEV. All this seemingly with little awareness that the point of democracy is not to provide legitimizing window dressing for your technocratic policy choices. Read Maxwell's comments, he's not a raving villain; he just wants Bitcoin to be a different thing than Hearn does.
This is going to happen in many forms for many aspects of anything humans do! Bitcoin can be laughed off as an amusing sideshow but there are a lot of very wealthy entrepreneurs taking this blindness into other areas, like government.
posted by Wretch729 at 8:20 AM on January 15, 2016 [2 favorites]
This is going to happen in many forms for many aspects of anything humans do! Bitcoin can be laughed off as an amusing sideshow but there are a lot of very wealthy entrepreneurs taking this blindness into other areas, like government.
posted by Wretch729 at 8:20 AM on January 15, 2016 [2 favorites]
If "by far the most appalling thing" you've ever seen – in this day and age – is a cryptocurrency's online community getting fighty and splintered, then... well, I envy you your ability to avoid news programs.
I wouldn't take that too seriously. I'm sure, if asked, he would readily admit that there are worse things. I think that's just the natural overstatement that comes from someone talking about the eminent collapse of something to which they have devoted years of their life.
On the other hand, I think anyone who took a utopian view of bitcoin is really naive. That comes out of the kind of libertarianism that just can't compute the idea that The Market can be ruinously unfair.
posted by Edgewise at 8:22 AM on January 15, 2016 [2 favorites]
I wouldn't take that too seriously. I'm sure, if asked, he would readily admit that there are worse things. I think that's just the natural overstatement that comes from someone talking about the eminent collapse of something to which they have devoted years of their life.
On the other hand, I think anyone who took a utopian view of bitcoin is really naive. That comes out of the kind of libertarianism that just can't compute the idea that The Market can be ruinously unfair.
posted by Edgewise at 8:22 AM on January 15, 2016 [2 favorites]
Can't we just agree on Green Stamps?
posted by petrilli at 8:51 AM on January 15, 2016 [1 favorite]
posted by petrilli at 8:51 AM on January 15, 2016 [1 favorite]
Bitcoin Is Dead, Long Live Bitcoin, by Fred Wilson, a smarter-than-usual venture capital partner in New York.
I personally believe we will see a fork accepted by the mining community at some point this year. And that will come with a new set of core developers and some governance about how decisions are made among that core developer team. But it could well take a massive collapse in the price of Bitcoin, breakdowns in the Bitcoin network, or worse to get there. ... I expect that there will be some rationality, brought on by capitalist behavior, that will emerge or maybe is already emerging.posted by Nelson at 9:40 AM on January 15, 2016
> Fred Wilson, a smarter-than-usual venture capital partner in New York
I did a spit take before realizing that maybe that's an indirect slam on all VCs. If so, that's some very dry wit, right there. (Fred Wilson has famously been arguing that AAPL is doomed for many years now, dumping his holdings in 2009 at $13, split-adjusted. AAPL trades around $100 today.)
Likewise, I think his position on Bitcoin is pretty dumb ("Sometimes it takes a crisis to get everyone in a room ... So if we are going to have a crisis, let’s get on with it. Who even talks like that?) but he's actually invested in Bitcoin, so at least he's been putting his money where his mouth is.
posted by RedOrGreen at 11:13 AM on January 15, 2016 [3 favorites]
I did a spit take before realizing that maybe that's an indirect slam on all VCs. If so, that's some very dry wit, right there. (Fred Wilson has famously been arguing that AAPL is doomed for many years now, dumping his holdings in 2009 at $13, split-adjusted. AAPL trades around $100 today.)
Likewise, I think his position on Bitcoin is pretty dumb ("Sometimes it takes a crisis to get everyone in a room ... So if we are going to have a crisis, let’s get on with it. Who even talks like that?) but he's actually invested in Bitcoin, so at least he's been putting his money where his mouth is.
posted by RedOrGreen at 11:13 AM on January 15, 2016 [3 favorites]
Jimbob: "Yeah, it's surprising the end has come due to the typical open-source bickering, rather than the complete lack of understanding of both economics and human motivation."
In fairness, one could argue that the typical open-source bickering is itself the result of a complete lack of understanding of both economics and human motivation.¹
¹ ...and also technology.
posted by Riki tiki at 11:30 AM on January 15, 2016 [1 favorite]
In fairness, one could argue that the typical open-source bickering is itself the result of a complete lack of understanding of both economics and human motivation.¹
¹ ...and also technology.
posted by Riki tiki at 11:30 AM on January 15, 2016 [1 favorite]
Why is the mining horsepower so dominated by Chinese individuals/teams/organization? Based on what I understand of the tech and the rhetoric, I would have expected there to be a lot more widely distributed processing power.
posted by He Is Only The Imposter at 11:36 AM on January 15, 2016
posted by He Is Only The Imposter at 11:36 AM on January 15, 2016
Based on what I understand of the tech and the rhetoric, I would have expected there to be a lot more widely distributed processing power.
This just illustrates another flaw in the whole bitcoin theory. What you have is a classic monopoly. Once you have one or a couple participants dominate the market, the barrier to entry (cost) for competitors becomes so high that further consolidation is inevitable. No one else can compete with the giants that get there faster and cheaper.
You need an external force, government, to break up such monopolies for the welfare of society. But since government is anathema to the 20-something libertarians behind bitcoin, that will never happen.
posted by JackFlash at 11:56 AM on January 15, 2016 [3 favorites]
This just illustrates another flaw in the whole bitcoin theory. What you have is a classic monopoly. Once you have one or a couple participants dominate the market, the barrier to entry (cost) for competitors becomes so high that further consolidation is inevitable. No one else can compete with the giants that get there faster and cheaper.
You need an external force, government, to break up such monopolies for the welfare of society. But since government is anathema to the 20-something libertarians behind bitcoin, that will never happen.
posted by JackFlash at 11:56 AM on January 15, 2016 [3 favorites]
Actually, it's about ethics in cryptocurrencies.
posted by malocchio at 1:08 PM on January 15, 2016 [2 favorites]
posted by malocchio at 1:08 PM on January 15, 2016 [2 favorites]
Likewise, I think his position on Bitcoin is pretty dumb ("Sometimes it takes a crisis to get everyone in a room ... So if we are going to have a crisis, let’s get on with it. Who even talks like that?) but he's actually invested in Bitcoin, so at least he's been putting his money where his mouth is.Since Bitcoin has no intrinsic value except for the social consensus, I'd say he's trying to get us to put our money where his mouth is. Those gambles only pay off if enough people believe that they need to not only to use a cryptocurrency at all but this one in particular.
(This seems to me like the most likely end game for Bitcoin: speculators and true believers take a bath when either a credit card company lowers fees a bit or a few large banks launch a distributed ledger with neither the inefficiency of the blockchain nor the gold-bug economic model. The baked-in deflationary model actively discourages anyone new jumping in by now since they'd just be making someone else rich.)
posted by adamsc at 2:55 PM on January 15, 2016
Yeah the role that the deflationary aspect of Bitcoin has played has been interesting. I think the appeal to speculators and ideological goldbugs really helped the system catch on the the early days, so making it deflationary it may have actually been a smart design decision in a way. It's also a decision that ultimately makes it quite unsuitable for use as a "real" currency and is very unattractive to late adopters. So I do think it will eventually dwindle and be replaced by other cryptocurrency designs - except for some of the really crazy people.
posted by atoxyl at 4:03 PM on January 15, 2016
posted by atoxyl at 4:03 PM on January 15, 2016
So, while browsing reddit and hitting a few bitcoin posts, I just had an idea that might have some validity, so I'm going to cross post an edited version of the idea.
The idea is that Satoshi intentionally designed the initial network to be a speculator's holiday with built in deflation and (temporarily) increasing theoretical value. Yet obviously poorly-scaling with regards to transactions/time/cost metrics and some pretty key points of fragility specifically as a marketing/delivery vehicle to get the blockchain idea itself deeply embedded in the world.
And that Satoshi knew that it wasn't the Bitcoin network itself that would succeed as a currency or commodity that would change the world, but the idea of the blockchain and peered network as a transactional and ledgering system itself, that it would mutate and become a better thing.
I actually think that Satoshi designed the initial bitcoin network values to be deflationary specifically in order to drive the price up from low to high and keep them there briefly (a few years to a decade) to dangle a shiny carrot in front of early adopters in order to make it much more attractive and direct that attention to the blockchain itself, to get it out there.
Because if it didn't have that crazy ramp up from pennies per bitcoin to hundreds of dollars, likely not many people would have actually noticed Bitcoin's blockchain technology, or invested time/money into mining it or running nodes, or developing the core and aux code - because people probably would have just thought "Oh, yawn, another weird encrypted network scheme, yay."
Further, I think that Satoshi probably designed the network purposefully so that it wouldn't scale well beyond that initial hype, that it would self-destruct and have to be re-invented, because Satoshi is obviously very smart, and he would probably realize that the first adoption of it would be a gold rush and rife for attack and manipulation before it became a true service or protocol that was end-user friendly.
I would further suppose that Satoshi intentionally made the network to be vulnerable to DDoS and 51% attacks (as well as fragmentation via hard forks) to ensure that it was eventually abandoned or deprecated, to intentionally ensure that it, itself, would not survive.
But that the idea would survive. Because of speculation and hype driving the initial attention, for free.
If so it's brilliant, really. Make a bunch of people pay for your marketing and dev, and even generate a weird amount of spendable value for the early birds, then unleash one hell of a viral idea on the world. That's some Grade A superhero/villain shit right there.
posted by loquacious at 6:19 PM on January 15, 2016 [2 favorites]
The idea is that Satoshi intentionally designed the initial network to be a speculator's holiday with built in deflation and (temporarily) increasing theoretical value. Yet obviously poorly-scaling with regards to transactions/time/cost metrics and some pretty key points of fragility specifically as a marketing/delivery vehicle to get the blockchain idea itself deeply embedded in the world.
And that Satoshi knew that it wasn't the Bitcoin network itself that would succeed as a currency or commodity that would change the world, but the idea of the blockchain and peered network as a transactional and ledgering system itself, that it would mutate and become a better thing.
I actually think that Satoshi designed the initial bitcoin network values to be deflationary specifically in order to drive the price up from low to high and keep them there briefly (a few years to a decade) to dangle a shiny carrot in front of early adopters in order to make it much more attractive and direct that attention to the blockchain itself, to get it out there.
Because if it didn't have that crazy ramp up from pennies per bitcoin to hundreds of dollars, likely not many people would have actually noticed Bitcoin's blockchain technology, or invested time/money into mining it or running nodes, or developing the core and aux code - because people probably would have just thought "Oh, yawn, another weird encrypted network scheme, yay."
Further, I think that Satoshi probably designed the network purposefully so that it wouldn't scale well beyond that initial hype, that it would self-destruct and have to be re-invented, because Satoshi is obviously very smart, and he would probably realize that the first adoption of it would be a gold rush and rife for attack and manipulation before it became a true service or protocol that was end-user friendly.
I would further suppose that Satoshi intentionally made the network to be vulnerable to DDoS and 51% attacks (as well as fragmentation via hard forks) to ensure that it was eventually abandoned or deprecated, to intentionally ensure that it, itself, would not survive.
But that the idea would survive. Because of speculation and hype driving the initial attention, for free.
If so it's brilliant, really. Make a bunch of people pay for your marketing and dev, and even generate a weird amount of spendable value for the early birds, then unleash one hell of a viral idea on the world. That's some Grade A superhero/villain shit right there.
posted by loquacious at 6:19 PM on January 15, 2016 [2 favorites]
NY Times: "A Bitcoin believer's crisis of faith"
posted by Jahaza at 7:20 AM on January 15 [+] [!]
Thank you Jahaza, that provided some much needed context.
posted by Tell Me No Lies at 10:55 PM on January 15, 2016
posted by Jahaza at 7:20 AM on January 15 [+] [!]
Thank you Jahaza, that provided some much needed context.
posted by Tell Me No Lies at 10:55 PM on January 15, 2016
The problems in Bitcoin demonstrate the problem in blockchain based tech. Specifically
-It is difficult to maintain consensus and make necessary changes to the protocol as adoption grows.
-Economies of scale leading to eventual monopoly or oligarchy thereby undermining trust in the system.
-Bad actors ruining it for lulz and profit.
Ultimately it is a really inefficient way to maintain a ledger.
posted by humanfont at 11:11 PM on January 15, 2016 [2 favorites]
-It is difficult to maintain consensus and make necessary changes to the protocol as adoption grows.
-Economies of scale leading to eventual monopoly or oligarchy thereby undermining trust in the system.
-Bad actors ruining it for lulz and profit.
Ultimately it is a really inefficient way to maintain a ledger.
posted by humanfont at 11:11 PM on January 15, 2016 [2 favorites]
I actually think that Satoshi designed the initial bitcoin network values to be deflationary specifically in order to drive the price up from low to high and keep them there briefly (a few years to a decade) to dangle a shiny carrot in front of early adopters in order to make it much more attractive and direct that attention to the blockchain itself, to get it out there.
As I said I actually do think this part may be true. The other details of the purported master plan probably not so much.
posted by atoxyl at 1:15 AM on January 16, 2016
As I said I actually do think this part may be true. The other details of the purported master plan probably not so much.
posted by atoxyl at 1:15 AM on January 16, 2016
Since Bitcoin has no intrinsic value except for the social consensus
Nothing has any inherent value except for that it gains by social consensus. That's what "demand" is.
posted by gkhan at 4:18 AM on January 16, 2016
Nothing has any inherent value except for that it gains by social consensus. That's what "demand" is.
posted by gkhan at 4:18 AM on January 16, 2016
gkhan: the value of food, land, etc. is anchored by real-world utility. Oil maybe be cheap now but you have the option of waiting for the price to go up because you know that the entire world won't stop driving or making plastic forever. Gold owes part of its value due to social preference but the price won't stay below its value as an industrial metal for very long and the luxury preference has persisted for all of recorded human history.
In contrast, Bitcoin is the purest of fiat currencies with nothing to cushion the fall to zero. If crypto currencies fail to catch on or even if they do but, as is likely, the world goes with a different one, those bits have no alternate use. A 17th-century Dutch trader could at least plant a tulip garden…
posted by adamsc at 6:50 AM on January 16, 2016 [1 favorite]
In contrast, Bitcoin is the purest of fiat currencies with nothing to cushion the fall to zero. If crypto currencies fail to catch on or even if they do but, as is likely, the world goes with a different one, those bits have no alternate use. A 17th-century Dutch trader could at least plant a tulip garden…
posted by adamsc at 6:50 AM on January 16, 2016 [1 favorite]
In related news, Bitcoin exchange Cryptsy is now insolvent due to a hack from July of 2014 that they covered up by using new deposits. The code is up on github and the backdoor found in March of 2015.
Apparently someone offered to take up maintenance of a defunct project, convinced Cryptsy to run it on their server, and inserted an IRC backdoor. They probably had complete access. Between this and the random.org bug from last year it's really amateur hour.
posted by beowulf573 at 8:32 AM on January 16, 2016
Apparently someone offered to take up maintenance of a defunct project, convinced Cryptsy to run it on their server, and inserted an IRC backdoor. They probably had complete access. Between this and the random.org bug from last year it's really amateur hour.
posted by beowulf573 at 8:32 AM on January 16, 2016
It seems they had a trojan in their wallet.
posted by JackFlash at 9:05 AM on January 16, 2016 [6 favorites]
posted by JackFlash at 9:05 AM on January 16, 2016 [6 favorites]
Interesting response to the article, accepting some but not all of of the criticisms.
posted by TheophileEscargot at 10:29 AM on January 19, 2016
posted by TheophileEscargot at 10:29 AM on January 19, 2016
So apparently most of the response there is basically just that "there is increased pressure to solve" the problems Hearn lists.
I'm not sure I buy that. Money is not a magical thing that gives people incentive to do whatever you think they ought to do. I think the best point Hearn made was that plenty of people in Bitcoin actually have incentive not to see it grow. And that's mighty interesting; it rings true to me. A lot of people love to accept on faith the idea that everyone is going to make intelligent self-interested moves, but most people aren't intelligent, and it's hard even to know what our own interests are. There's a difficult balance, if you and your friends are in control of a significant chunk of mining power: how much spread of the currency should you allow before it's watering down your own market share? Should you allow upgrades to the functioning of the network, if those upgrades carry some economic risk to you? Sure, you want to keep the currency healthy, but you'd rather have it fading slowly enough for you to cash in than for your position to erode and leave you with nothing.
posted by koeselitz at 3:07 PM on January 19, 2016
I'm not sure I buy that. Money is not a magical thing that gives people incentive to do whatever you think they ought to do. I think the best point Hearn made was that plenty of people in Bitcoin actually have incentive not to see it grow. And that's mighty interesting; it rings true to me. A lot of people love to accept on faith the idea that everyone is going to make intelligent self-interested moves, but most people aren't intelligent, and it's hard even to know what our own interests are. There's a difficult balance, if you and your friends are in control of a significant chunk of mining power: how much spread of the currency should you allow before it's watering down your own market share? Should you allow upgrades to the functioning of the network, if those upgrades carry some economic risk to you? Sure, you want to keep the currency healthy, but you'd rather have it fading slowly enough for you to cash in than for your position to erode and leave you with nothing.
posted by koeselitz at 3:07 PM on January 19, 2016
NY Times: "A Bitcoin believer's crisis of faith"
posted by Jahaza at 7:20 AM on January 15 [+] [!]
Thank you Jahaza, that provided some much needed context.
That was literally the link in the FPP.
posted by Going To Maine at 11:09 PM on January 19, 2016 [3 favorites]
posted by Jahaza at 7:20 AM on January 15 [+] [!]
Thank you Jahaza, that provided some much needed context.
That was literally the link in the FPP.
posted by Going To Maine at 11:09 PM on January 19, 2016 [3 favorites]
Whattay know, it was. As an FYI to other posters, when you make a person's name a link, I assume that's going to be some general info about the person, probably their Wikipedia page. I don't expect it to be part of the meat of the post, and am unlikely to click on it unless I decide to take a deeper dive into the post.
If you intentionally write your posts that way it is, or course, fine, but it doesn't work well for pointing out that thing on the web for me, and for at least two other people here too.
posted by benito.strauss at 9:42 AM on January 20, 2016
If you intentionally write your posts that way it is, or course, fine, but it doesn't work well for pointing out that thing on the web for me, and for at least two other people here too.
posted by benito.strauss at 9:42 AM on January 20, 2016
No, and it would have fooled me too. (Plus, clearly, Jahazza) It's an interesting story about how threads move beyond their subjects until, eventually, the FPP itself becomes moot.
posted by Going To Maine at 10:41 AM on January 20, 2016
posted by Going To Maine at 10:41 AM on January 20, 2016
koeselitz: To answer your question regarding transaction lag time: no, that is pretty much alarmist BS at this point. It is possible, or even likely, that such delays could arise in the future, but at present it isn't happening to typical users.
Practically speaking, refusing to increase the maximum block size does two things. It limits the number of transactions that can be cleared and pushes transaction fees higher. The first isn't an issue presently since many transactions are just plain spam right now since it is so cheap to get your declaration of undying love immortalized in the blockchain for all eternity. Forcing tx fees higher will just keep people from shitting on the block chain as much.
Increases in transaction fees aren't an issue at present because it still takes a fee of next to nothing to get immediate confirmation. My last transaction was included in the then current block at enormous cost to me. That cost? Less than 5 one hundredths of one percent. Highway robbery*, that one.
*For a definition of highway robbery that includes any amount over literally zero. In reality, that is at least an order of magnitude less than any other unsubsidized electronic payment mechanism in existence today.
posted by wierdo at 11:47 AM on January 22, 2016
Practically speaking, refusing to increase the maximum block size does two things. It limits the number of transactions that can be cleared and pushes transaction fees higher. The first isn't an issue presently since many transactions are just plain spam right now since it is so cheap to get your declaration of undying love immortalized in the blockchain for all eternity. Forcing tx fees higher will just keep people from shitting on the block chain as much.
Increases in transaction fees aren't an issue at present because it still takes a fee of next to nothing to get immediate confirmation. My last transaction was included in the then current block at enormous cost to me. That cost? Less than 5 one hundredths of one percent. Highway robbery*, that one.
*For a definition of highway robbery that includes any amount over literally zero. In reality, that is at least an order of magnitude less than any other unsubsidized electronic payment mechanism in existence today.
posted by wierdo at 11:47 AM on January 22, 2016
To take it a bit further, the idea that Bitcoin is a failure because its blockchain implementation is such that it can't handle Visa's volume if every transaction is made on the public chain (as opposed to many transactions being off chain internal to an exchange) or because transactions are not completely without cost is utter BS. It's like saying a Smart car is a failure as a vehicle because it can't tow an 80,000 pound trailer.
That is clearly not what it was designed to do, so pretending it was and then declaring it failed is just plain stupid. It works fine and will continue to work fine for the relatively low volume trustless peer to peer transactions it was designed to facilitate. Its failure to facilitate the get rich quick schemes many of its supporters would like it to serve is not really a problem.
posted by wierdo at 12:02 PM on January 22, 2016 [1 favorite]
That is clearly not what it was designed to do, so pretending it was and then declaring it failed is just plain stupid. It works fine and will continue to work fine for the relatively low volume trustless peer to peer transactions it was designed to facilitate. Its failure to facilitate the get rich quick schemes many of its supporters would like it to serve is not really a problem.
posted by wierdo at 12:02 PM on January 22, 2016 [1 favorite]
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This thread has been archived and is closed to new comments
Also, the article conveniently ignores the Bitcoin Classic effort, which (1) has a majority of mining power, (2) includes two of the largest exchanges, and (3) has several key developers on board. Miners supporting the project are in agreement on the need to increase the blockchain's block size.
I'm not saying the sky couldn't fall, but it is not yet falling.
posted by ArmandoAkimbo at 6:22 PM on January 14, 2016