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Comment by zaptheimpaler | Hacker News Reader

This could be a catastrophe. Since BTC is still too unstable to use as an everyday currency, citizens will likely use BTC only as a payment rail and convert to USD. The government will end up net long BTC. Any BTC whale in the world could dump BTC and destroy an entire countries economy. They are trading being beholden to the US for being beholden to anonymous BTC whales. Some fucking VCs just took over an entire country. My heart goes out to Salvadorans, i really hope im wrong and this works out well.

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> Any BTC whale in the world could dump BTC and destroy an entire countries economy

This is true for every single currency ever and so doesn't make sense to invoke strictly for this one. Even your original claim (that it can't be used as an everyday currency) is already demonstrably untrue as there are plenty of goods that can be bought using purely bitcoin.

> This is true for every single currency ever and so doesn't make sense to invoke strictly for this one

It does, actually because the large holders of fiat currencies are governments. Their holdings are public. El Salvador can atleast identify, talk to and negotiate with them. They are at least somewhat transparent and accountable to their own citizens.

The large holders of BTC are completely unknown. You morons are empowering a global mafia. We don't know who they are, they have zero accountability to anyone but themselves.

Please wake the fuck up, this is not about number go up, you are fucking with global politics without even knowing it, happily complicit because it makes you money.

In a decade, holding crypto will be a black stain on your soul like holding shares in the East India Company or giving money to dictators.

>The large holders of BTC are completely unknown. You morons are empowering a global mafia.

Are you suggesting that "the large holders of BTC" are part of a criminal organization?

> We don't know who they are, they have zero accountability to anyone but themselves.

Less accountability, less control. Bitcoin holders are just that, holders. They don't control the network or the monetary policy. The fed on the other hand can print money as it pleases.

> Are you suggesting that "the large holders of BTC" are part of a criminal organization?

No, i’m saying whoever they are, they have unchecked power. Which, historically leads to evil. Which is why we created democracy in the first place.

Most bitcoin holders have little power, but bitcoin miners absolutely do control the network. 30% of the capacity of bitcoin went down when there was a power outage in China. It only takes a few large holders to control the network. Bitcoin mining is extremely energy and capital intensive. Whoever holds the electricity & equipment holds the power. It is only transferring power from democratic governments to whatever shadowy figures happen to be able to generate the most electricity. Its not going to be you or me, it will be an informal, shifting, unaccountable cartel of whatever countries happen to ally and form a >50% control of mining capacity.

This fantasy story about decentralized power is false. Many terrible regimes begin with promises of utopia.

>but bitcoin miners absolutely do control the network.

Again, what type of control? They can determine what gets confirmed and possibly revert transactions (at great expense, given enough confirmations), but they can't affect monetary policy.

That's already a lot of control no? They can block any transaction. They can create and confirm fraudulent transactions.

In a world where BTC is on par with any other currency, where people are paid and save in BTC, what would it look like if they decide to rob someone and the network has to fork? In economic terms, it would be identical to previous cases of the currency being destroyed. For example, when El Salvador originally dollarized and people lost half their purchasing power overnight.

>They can block any transaction

Not exactly. Any miner can arbitrarily exclude transactions from the blocks they're working on, but that won't do much because it can still be confirmed via another miner. To full censor transactions you need to perform a 51% attack, ie. form a cartel of miners controlling 51+% of the hashpower, and refusing to build on top of other miner's blocks. such attacks would be plainly visible, cause the network to slow down (because hashing power is halved), and would decrease confidence in the network (which is the cost that miner pays for doing it).

>They can create and confirm fraudulent transactions.

No they can't. Confirming fraudulent transactions (ie. ones with invalid signatures) would produce invalid blocks that are rejected by the rest of the network.

>what would it look like if they decide to rob someone and the network has to fork

I doubt this will occur. The precedence for this exists in ethereum (ie. DAO hack), but not in bitcoin.

>In economic terms, it would be identical to previous cases of the currency being destroyed.

That happens in fiat demonetizations (eg. india) because the old currency is deemed worthless and you must exchange your old currency for new ones (via official channels and subject to arbitrary limits, of course). In contrast this doesn't happen with forks because you end up owning coins on both sides of the fork.

My entire point is that power over mining is derived from power over energy. Nations do have the power to use energy and build miners. Multiple nations working together can form a cartel just like the oil cartel of previous years.

I understand what you're saying, re: txns and forks. My point is everything rests on this idea of 51% attacks being impossible. They are not at all impossible or even unlikely. Nations can form alliances or control huge parts of the mining capacity. The blockchain cannot magically solve the problems of politics and centralized power because that power can be used to control the chain too.

Use proof of work and miners can collude to launch attacks or manipulate prices. Use proof of stake and large stakeholders can do the same.

Owning crypto in an anonymous wallet, or running your own node cannot save you from a dictator with a gun. Mining may be decentralized but they can't escape crackdowns from a government with guns either.

There is fundamentally no purely technological solution to political problems in the real world. It's a distraction from the real frustration we have with democracy and centralized power in the real world.

It reminds me of when people thought social networks would unite the world.. instead they only mirror its problems. I feel like crypto is so far up in the digital land you have forgotten there is a real world out here..

>Multiple nations working together can form a cartel just like the oil cartel of previous years.

Is there a wheat cartel? Coal cartel? Oil cartels are only a thing because it's geographically concentrated to a few countries. Oil could be used to generate electricity, but it's by no means the only way, or the cheapest.

>My point is everything rests on this idea of 51% attacks being impossible. [...] The blockchain cannot magically solve the problems of politics and centralized power because that power can be used to control the chain too.

The possibility of 51% attacks is acknowledged in the original whitepaper, so what you're describing isn't exactly a revelation. Moreover, the presence of a flaw doesn't mean it's absolutely useless. It simply means users think the possibility is low enough that it doesn't outweigh the other benefits.

>Owning crypto in an anonymous wallet, or running your own node cannot save you from a dictator with a gun

The most advanced military in the world lost wars against a bunch of goat herders and rice farmers. Being impervious to all attacks isn't a necessary feature.

>There is fundamentally no purely technological solution to political problems in the real world. It's a distraction from the real frustration we have with democracy and centralized power in the real world.

What's your opinion on encryption, then? Is working on e2e apps a distraction from advocating for better data privacy laws? What about VPNs? Are VPNs a distraction from petitioning the government to uncensor websites? I think technological solutions have their place alongside political ones.

> You morons

This is not a very wise way to phrase your argumentation if you want me to engage with what you're saying.

Pioneers are often mocked like this, I salute El Salvador ♥

I don't mean to mock anyone, this scares the hell out of me.

I just want to call out what I see here in the hope that some of you might reconsider the implications of what is happening.

Everything branded as "new and shiny" or pioneering technology is not automatically better.

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