Spot Bitcoin ETF receives official approval from the SEC
cointelegraph.com
cointelegraph.com
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.
(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”
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.
Surely only a fool would want advantages that were theoretical only?
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.
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.
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.
It's like watching someone buy a padlock to secure something, but then immediately cut through it with a boltcutter "to make it easier to get my stuff out".
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
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.
Am I misremembering or did the other blockchain do exactly that in response to the DAO hack?
https://news.bitcoin.com/bitcoin-history-part-10-the-184-bil...
best of luck to your imagined future; but it reads very naive to me.
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.
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.
History has proven time and time again that sound money requires equivalent work to create.
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...
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.
> But no, not because I say so but because it's obvious
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..
- 5G causes cancer
- bitcoin is a scam
Your substantive and well-reasoned argument fits right in with that list ;)
That what you said, please don't put words into my mouth. My only point is that bitcoin (or crypto in general) would make a horrible currency if widely adopted. And it has nothing to do with any technical limitations related to bitcoin, extremely deflationary tokens just make a horrible currency (unless no growth, deflation and a permanent economic depression).
> Your substantive and well-reasoned argument
It certainly wasn't intended to be perceived as such.
(trying to make well-reasoned arguments when arguing with quasi-religious fanatics is a waste of time.. ).
Bitcoin is extremely deflationary. Imagine (or read a history book) a society in which almost all wealth/income is derived from land (a "deflationary" asset the value of which only increases as population grows and 95%+ of it is inherited).
Bitcoin is that just much worse because unlike in the case of land you don't need labor and significant capital investment to make any money from it you can just hoard it get richer without doing anything, which means:
- no economic growth (why invest in anything economically productive but risky when you can just get richer by doing nothing)
- eventually 90%+ of all wealth will become inherited and people who were born poor/disadvantage will remember these times as a lost utopia.
> It’s a pretty bad deal for most people.
Yes and even if bitcoin is a "better deal" for you it will be a significantly worse deal long term for the people who follow you..
If you have a growing economy (of course not a concern it bitcoin would replace Fiat currencies) it's extremely deflationary. The supply of money has to grow at least at the same pace as the demand for it, otherwise bad things happen...
https://onlinelibrary.wiley.com/doi/abs/10.1002/j.2325-8012....
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...
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.
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).
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?)
Are these the missiles that Russia ran out of in March 2022, March 2023 and then in June 2023 or the other ones?
I suspect that people are a little more cautious about corruption whenever the results are regularly tested, e.g. if they think the missile they make this month gets shipped to the front line next month, and if it doesn't launch they will be personally posted to a flood-prone trench near a dam in the Dnipro river.
ICBMs are supposed to not get launched outside of tests, they're meant to defend a country by their mere existence threatening mutually assured destruction. This doesn't work so well if people (like me) openly doubt they work. It also means that corruption is much easier to hide, which in turn means it's much more likely to happen. (This latter point also applies to the USA's arsenal, FWIW, but that only matters to the extent that anyone fears the USA collapsing into its second real civil 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.
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.)
Edit: Do you think no aircraft because they'd have to use US trained pilots?
Now I've got 2 persapectives here. There is "largest weapons cache and standing military in the history of humanity" from pyvpx and there is this rather smaller list from yourself. I'm inclined to go with your list - I don't think the US is in a position to deploy the largest weapons cache in the history of humanity.
The evidence we have is that the US is broke and only capable of bullying people with this rather less impressive list of ad-hoc assembled gear with no air support. Which is not nothing, but has observably failed to turn back the Russians. They don't have the industrial or financial foundations to project do-what-I-say strength overseas any more against larger economies like Russia.
It is pretty obvious they don't have that capability, or they'd have used it.
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.
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!!
So the US controls those international settlement rails, what does it do with that power to control BTC? Like I said, they can lean on governments, but those governments don't really have the power to ban it internally, so what can it really do with that leverage?
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.
They can happily regulate on and off ramps, and enforce traceability etc for anything that touches the 'real' economy though, should they wish.
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?
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"
Not it doesen't. Also bitcoin is not money (why do people keep claiming this?), it's a speculative asset.
Okay
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.
I can exchange grain or aluminum for other goods and services and pay back my debts in them if the other party agrees. Does that those commodities money? If you think so and then yeah you're right about bitcoin too. Otherwise, it's not. Sorry.
[1] SEC vs. Shavers followed by FBI vs. Shavers
DOJ victim emails are neat!
This whole ETF thing has been a long time coming in terms of precedent at the legal level. Court cases are how things happen in America unfortunately.
Gold isn't money - it's a commodity. It isn't even a great store of value over that last thousand years or so.
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.
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.
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.
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.)
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.
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).
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.
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.
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.
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].
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).
> There will always be more volatility to the upside
That's a very strong statement.
The price of a house used to be 100 bitcoin, then 10, now it's 5. Wait 10 years and it'll be 0.5. Meanwhile, hold dollars and the price keeps going up. You are defacto forced to put your saving in an investment vehicle to keep up with inflation, taking on risk.
Yes. You got it. That's how you get economic growth. Instead of stagnation and deflation when you hoard gold or bitcoin. It's not exactly fair from the individual people perspective but for the society as whole it's objective the superior option.
> To the contrary
I know that reading comprehension is hard (even if the "IF" was in very big letters..). If your income is in $ and you buy stuff priced in $ AND you don't want to use crypto as an investment instrument but only for buying/selling good holding it for extended periods of time is not smart (same applies to foreign currencies in general they are just not as volatile).
[0] https://www.mail-archive.com/cryptography@metzdowd.com/msg09...
> 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.
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.
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?
"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.
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.
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.
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...
Right. Like sticking to the nonsense that was the gold standard.
Inherently deflationary virtual token make an objective horrible currency. Believing otherwise puts you on part with the flat earth people.
Why's that then?
Deflation significantly inhibits economic growth, making borrowing much more risky and would result in significantly more wealth inequality than we even have now.
Why invest into anything when you can just hoard money and get richer by not risking anything?
> priced gold at its true value
Which is determined how and by whom? If you let the market do it's that basically (while not technically) Fiat...
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.
Laundering crypto is extremely easy and cheap. You trade it on a crypto-only exchange (no KYC there) and trade it back. You can go further by doing both trades on different platform and using Monero. Now your dirty BTC belong to the exchange and will get spread out to everyone.
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.
But if you have something to hide and the official on ramps and off ramps don't allow you to hide it, you can just use the black market, so the only people using the official system in that context are the people who believe themselves to be uninteresting to the government. Which naturally excludes nearly all the people the government is legitimately interested in, making the KYC requirements a pointless burden on innocent people.
> 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.
Generally speaking government regulations only work when at least one of the buyer or seller wants the regulations, e.g. you buy your medication from the pharmacy and not a drug dealer because you want the quality controls the government imposes, even if the seller would rather not. So the openly operated pharmacy outcompetes the black market for aspirin.
When both the buyer and the seller have no interest in the rules, neither of them reports the other for violating them and then they're basically unenforceable. Which is hot garbage, because the costs of the rules still fall on the people they weren't meant to constrain, and the vig on the transactions funds other black market activities, and the inability of the parties to resolve disputes through the legal system begets violence etc.
Oh I'd be all for getting rid of KYC laws and similar, no complaints here.
> you buy your medication from the pharmacy and not a drug dealer because you want the quality controls the government imposes
Personally if I were buying prescription meds I'd go to a pharmacy simply because I don't went to be caught and charged with illegally buying a controlled substance. I don't have much faith in the pharmaceutical industry or its regulation.
> When both the buyer and the seller have no interest in the rules, neither of them reports the other for violating them and then they're basically unenforceable.
This is where you lose me a bit. The laws are enforceable if they catch you. Catching you will be harder on the black market, but you absolutely can be charged if they do.
My original point was more about the limited market if you have to go black market. Fewer potential customers to transact with means demand goes down, in all likelihood the value of bitcoin would be much lower if there were no legal uses for it.
I'm not entirely sure why we still have them. They're expensive and inconvenient, studies have shown that they're extraordinarily ineffective, as far as I can tell they persist because people have the perception that they're important and then resist getting rid of them.
> Personally if I were buying prescription meds I'd go to a pharmacy simply because I don't went to be caught and charged with illegally buying a controlled substance.
Aspirin isn't a controlled substance. In theory someone who didn't have to comply with regulations could supply it for a lower price. But the drug store's price isn't particularly excessive and risking your life on your distant acquaintance's chemistry skills generally isn't worth saving $0.50.
If the price difference was much higher or the pharmacy wasn't allowed to sell it to you at all then many people would do exactly that, as we've seen.
> The laws are enforceable if they catch you. Catching you will be harder on the black market, but you absolutely can be charged if they do.
You have to consider how catching you generally happens.
Suppose you have a law requiring merchants to offer a 30 day warranty. This is easy to enforce -- the customer goes to have the merchant honor the warranty and if they don't the customer reports them to the government.
Now suppose the law prohibits certain types of transactions, even if neither party is deceiving the other and both are entering into the transaction with informed consent and of their own free will. Well then they're just going to do it and not tell anybody about it, and how is anybody going to find out?
The government can try to enforce laws like that. But their ability to depends on the perpetrator's willingness to do business with strangers who are really undercover law enforcement. In general the higher level operators avoid doing that and the low level pawns are disposable and arresting them doesn't make a dent.
Trying to do that with digital currency is possibly the hardest of any of them because by its nature it's fungible and can be transferred across the internet. If someone set up a foreign site where anyone could exchange cryptocurrency for bullion or some other commodity, what does KYC enforcement look like? The party intended to be doing it would be outside the jurisdiction and the most visible artifact would be a package with some non-contraband fungible commodity going through the mail.
> Fewer potential customers to transact with means demand goes down, in all likelihood the value of bitcoin would be much lower if there were no legal uses for it.
The premise isn't that there are no legal uses, it's that the legal uses would have to do KYC. So the people not breaking any laws would do the KYC and the people breaking laws would not.
Also, the value of Bitcoin only really matters to people holding non-trivial amounts of it or making contracts denominated in it, i.e. speculators. It makes little difference to anyone using nominal amounts as a currency.
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.
Except that it can with an update
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.
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?
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.
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?)
El Salvador has already made Bitcoin a legal tender. I assume your no-true-scotsman addition of "any country somebody would want to live in" is meant to disqualify it? That's rather disrespectful to the 6 million people who live there in addition to being wrong.
In my opinion more countries will adopt it in the coming years and convert a small portion of their reserves to Bitcoin. Time will tell which of us is correct.
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?
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!
Tether remains inexplicably popular.
They can and will stop you from actually using real bitcoin stored onchain. It's a strong trend and one that is quite troubling.
Only if you're given permission. It's not natively productive like Ethereum.
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.
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.
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.
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.
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.
Ignore this at your peril.
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.
Very much already there. Fiat in, fiat out, with no transactions on the blockchain. Their "Bitcoin" is little more than rows in a private database.
When I realized I had them, and tried to deposit them in etrade, it all went well, except the certificates were returned "no longer valid eschewed to the state of delaware".
The bummer is that the stock was running at about $80 then, and is running at around $150 now.
sigh.
So they will be valid, but there will paths that will "expire them".
https://www.bloomberg.com/news/articles/2024-01-03/bitcoin-s... https://archive.ph/y3H2y
https://www.sec.gov/news/statement/crenshaw-statement-spot-b...
particularly the section "The Global Spot Markets Underlying the Bitcoin ETPs are Marred by Fraud and Manipulation, Concentrated, and Without Adequate Oversight
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.
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.
Never heard or used Lightning Network? Try it out on Cash App or run a node on an old laptop if you want to learn more.
> once the exchanges hold most of the coins
Exchanges hold a single digit percentage of coins, price will have to go to six or seven (or four) figures before they will hold most of the coins.
> Sometimes regulatory solutions do fix hard technical problems.
Sometimes regulatory bodies bend the knee and are last to the party, 15 years in this case. At least they are ahead of 98% of HN'ers!
But they don't have to worry, the 401k their company manages for them will make sure there is an allocation to a Bitcoin ETF
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)
for bitcoin to move up or down $1000 a day has a variance: call me when we're outlying
That fake news cleaned up a lot of leveraged bets up and down.
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.
Most of these old ones seem to be listed in Germany and Paris.
I guess in the end they are all fully dependent on Coinbase.
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)
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.
> 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.
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.
Can only redeem to cash.
https://www.etfcentral.com/news/two-important-things-need-kn...
How are you protected against losing your investment if they can not deliver?
> Price tracking
Does Bitcoin support a high enough frequency of transactions for long enough to make this possible for years into the future? Does it not become too hard to mine at some point?
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.
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.
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!
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 ...
Also not your keys, not your coins. If you can write 12 words, you can secure your own funds.
That can be a positive sum solution for those in cold climates, who are already paying hundreds or thousands a month to stay warm!
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.
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
I get your point but without bitcoin being an actual real thing the whole ETF thing won't last either.
"Nobody Goes There Anymore, It’s Too Crowded"
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.
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.
Yes, this is just so easy to do in war torn dictatorship! Just get your often undemocratically elected government that has never done anything for you to change everything about itself!
But more likely, people in our generations will still be working until they are 70+, and their 401k will have some allocation to a Bitcoin ETF.
Regularly sunk in joint exercises and simulations:
https://theaviationist.com/2015/03/05/us-aircraft-carrier-su...
https://www.eurasiantimes.com/entire-us-carrier-battle-group...
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.
Also, the more regulation, the easier it will be to hold and use BTC to buy stuff.
Please explain how!
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.
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.
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.
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.
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
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.
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.
In fact the opposite of this is happening. We are in a discussion about how the SEC was ordered by the courts to further integrate Bitcoin into the existing financial system. Despite their protests and attempts to impose their own will on the rights of the people.
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.
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.
The rest of your long rant is basically useless, because the last 2 words above have strictly no meaning when put together
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.
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.
I'm surprised this comment still shows up. The intrinsic value is literally all of the energy spent ensuring the validity of the blockchain via expensive PoW. If you want to point at something with no intrinsic value, look to the fiats.
Wow, you must be rich and retired from Bitcoin right?
You had the opportunity to by at single/double digits and you secured generational wealth? Hoping this is true :)
But I have a feeling like it will take an incident like the one you describe to happen first before that becomes mandatory.
Expect a shitstorm in case of hack (or lost keys) with these clowns.
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.
Would it actually be clear which fork is the winning one?
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.
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
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...)
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.
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).
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.
This seems unlikely.
Many TradFi custodians ignore/do not support (publicly) forks of client assets held, sometimes just until they reach some arbitrary level of social traction.
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).
again, the cheerleaders who might know math (usually not even that) forget about the ruthless of business
https://www.investopedia.com/terms/1/51-attack.asp
> forget about the ruthless of business
Noone has forgot a thing just aren't clowns like you who think businesses are some substitute god who can't be beat. Fidelity doesn't "hold" the transactions. Transactions to be relevant MUST be broadcast to the network and if this doesn't happen then the blockchain plods along as if they didn't happen.
Honestly, learn a bit more about how this stuff actually works before commenting.
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?
They just sold the coins on the inferior chain and gave a one time dividend.
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 :)
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.
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)
How about a WBTC ETF?
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.
That’s a shame :( computer graphics is a very interesting topic and I always love to read things about it
https://www.linkedin.com/pulse/reflexive-negativity-jess-mac...
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.
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.
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.
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.
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.
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.
It's not just crypto though, the same saturated dullness is shining through in other discussions as well.
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.
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...
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.
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.
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.
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.
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".
> 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.
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.
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.
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.
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.
It is. Mining is literally bruteforcing…
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.
Regarding developing countries, bitcoin provides anyone with a phone access to a bank, and one that offers better savings accounts than any fiat account.
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.
Good luck buying WBA stock at a higher price in the future!
Authorizing Bitcoin ETFs does absolutely nothing to revolutionize payments or finance, and is the only positive crypto story I have seen in many months.
OP's point wasn't about preventing decentralized benefits, I believe they were saying the ETFs don't help them in any way.
Also, no one is going to end up accidentally investing in crypto, these ETFs are going to be super niche products.
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.
Most of funds by AUM are now passive index funds.
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.
This fight only exists in your head.
Hope you can buy yourself one when you grow up!
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?
Hence, “not your keys, not your coins”
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.
Bitcoin still is a lot more than just that
The only alternatives are western union and other private companies with 10+% fees or hidden private banking networks like 'Hawala'.
Stocks are just a weak entitlement (not ownership) to some property that will ultimately be significantly "backed" by the bitcoin on its balance sheet
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.
You can't just print money without side effects.
> 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.”
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
[EDIT]: looks like no, saying "a based judge" actually has meaning in English.
(used to express approval or respect, especially in response to a social media post): Based. At least somebody shows some spine on this forum.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.
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.
This is one reason amongst a few to be bearish on bitcoin over longer timescales, even as a 'store of value'.
- 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
Like airplanes falling from the sky and national power grid outages type of problems.
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.
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.
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.
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.
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
Can someone short bitcoin with this ETF?
But there have existed regulated CME Bitcoin Futures instruments to short Bitcoin more than a half decade now.
for Bitcoin critics
Any sort of currency seems to bring out the worst, maybe currencies in general is the problem?
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.
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.
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.
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.
Nothing beats good old USD or EURO as an asset if you live in a country with hyperinflation.
Are you questioning the data?
https://www.statista.com/statistics/1202468/global-cryptocur...
Also USD and Euro are NOT great assets to hold. People only hold cash because they need it for transactions purposes.
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
Really? Direct? Pretty sure the Roman’s had many other things happening upstream of overspending.
Many things were going wrong.
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.
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.
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.
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)
Ironically bitcoin attempts to replicate this failed monetary policy.
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.
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.
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.
It was a self-protecting system. The problem is it assumed the US would keep to its word. Instead we got everybody hooked on the USD, started printing a bunch of money anyhow, and then just defaulted on our obligations when other countries tried to convert it to gold, and withdrew from Bretton Woods. This led to the famous quote from Nixon's Treasury Secretary: "The dollar is our currency, but your problem."
So you're only looking from 1971 onward. This not only doesn't look especially pretty [1] in countless sociopolitical aspects, but the tremendous economic gains we have seen can also be largely attributed to a complete tech explosion that reshaped the entire world's economy, which we ended up being the natural epicenter of owing to a relatively large population, English being the defacto global language of science, and the fact that we were left entirely untouched by WW2.
The current completely free floating global fiat experiment may end up being the shortest lived economic experiment in our entire history should it turn out that we're just blowing up the mother of all bubbles. And it sure does feel that way!
Top answer here is good.
Sorry someone posting a link to the absolutely insane conspiracy-tinged 1971 site gets an auto-ignore from me. Have a good life.
I actually used to be of the same mindset as yourself, but it increasingly seems to me that the general preference for inflation based economics is much more of a status quo bias than something as strongly supported by data as one would think. There's also a simple logical problem you run into. When you give government the power to freely print infinite money, who do you think they're going to disproportionately direct that money towards?
Recent times actually provide one of the clear illustrations of the problem. Mega corporations take on multi billion dollar contracts from the government at way beyond market rate markups, then the moment the economic weather shifts even slightly they start large layoffs. The reason is not because the integrity of the company is threatened or anything of the sort, but simply to continue maximizing value for shareholders. It's not hard to see how with monopoly money economics you start an exponential increase in many things, like income inequality.
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.
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.
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.
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...
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.
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.
The value is immutability –not something censor-horny commies value, I'll give you that.
Censorship seems to be a property of any system, see the US. To this day, they are so stupid they censor nipples.
And of course Marx was seeing capitalism before it had done the majority of the good it has done over the past ~200 years.
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.
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.
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.
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.
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.
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.
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....
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.
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.
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.
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.
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.
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
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?
Essentially it's a separate network that every few minutes takes every transaction and compresses it into a data blob that it saves on Ethereum along with a proof that the computation was done correctly. The Ethereum L1 nodes then only need to verify the proof instead of re-executing all transactions that happened on the L2.
With this design users can go straight from an exchange like Coinbase onto the L2 and never need to use Ethereum, and fees are 10x cheaper because of the data compression. Fees will soon be 100x cheaper as Ethereum is adding extra space just for these L2 data blobs that is much cheaper than normal Ethereum data space.
Unfortunately it can't be done on Bitcoin right now because Bitcoin nodes don't have Turing complete scripting and so can't verify the proof that an L2 posts to 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.
Thus, the financial system provides much more utility for the energy it consumes than bitcoin does.
[1] https://www.theguardian.com/technology/2022/feb/18/bitcoin-m...
What, per transaction?
Depends on the transaction. To buy coffee? Of course not, but there are transactions that can take hours or days to clear.
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!
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.
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"?
The whole Bitcoin 'manifesto' and sticking it to the man is just a ruse.
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.
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.
Honestly, I am also amazed that humans make something like that happen. But we do. Otherwise gold wouldn't have so much value.
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.
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.
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.
There are all sorts of scarce things that we don't use for jewellery or see as particularly valuable. Gold has physical properties that make it specifically useful for jewellery (easy to work, doesn't tarnish, shiny, etc.).
Not sure if you see that it's your understanding of the world that's off here.
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.
I agree 100% with this but it is describing you.
Fortunately for most bitcoiners who got in early, it's been variable in a positive direction... But not for everyone.
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.
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...
https://news.bitcoin.com/industry-execs-freshly-minted-virgi...
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.
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.
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.
But, not all people, and many such regimes have crumbled.
Somehow you found energy to spread FUD on this forum, but you don't have energy to form an opinion and defend it. Sad.
It might surprise you, but it's way easier to open an exchange account than a bank account.
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.
It lasted only a few months, there was no long term investing on tulips.
They ruin families, neighborhoods, cities.
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.
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.
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?
The bad things people do to other people to get money for drugs and gambling are included in the blanket statement “drugs and gambling”.
Drugs, gambling, crimes all satisfy some people's needs
I call bs on the "drug" scapegoat. People are salty they work in tech and don't understand bitcoin.
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.
Wasting any effort on fake decentralization is objectively inferior because it adds to the cost with no benefit.
Go make a fork "fixing" these problems you speak of. Demonstrate its utility and people might adopt it.
It's opt-in yet you speak of it as an authoritarian power.. when in reality government currency is literally this.
why a hyper deflationary monetary system
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.
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.
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.
You know, if all the BTC haters actually knew what they were talking about we could have intelligent discussions on HN.
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".
That's the big news.
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?
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.
Of course, this is highly dependent on the "coin"
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.
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?
I think there's still an easy 10X to match Gold and 100X is possible if it becomes the world's preferred reserve asset
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.
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.
Whats the logic connecting BTC to gold? Why would the two prices be connected in the way you're suggesting?
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.
How do you live life if you think money is worthless?
Fine, you don't like crypto. Say something new or insightful or skip the comment section.
For it to be useful it does. How else does one convert from fiat to btc and back again?
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?
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.
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.
If I lent my bitcoin to ABC Gold Mining like you have, then I could expect to additionally receive interest on my loan.
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.
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.
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.
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.
There was so much hype for the ETF, that there's no interest anymore from others to actually buy crypto ( for now)
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.
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.
If you lose or surrender you private key - fair enough, but that's not the same.
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.
So is the entire bitcoin mining industry, it is built into their ROI. 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.
> I work in architecture and year after year the industry is pushing to squeeze every last bit of energy efficiency out of everything.
Compare that to the fiat system, do you get to vote for who runs the Federal Reserve? Can you verify the current supply of the US dollar or the maximum limit of dollars that can be printed?
Very privileged take to assume Bitcoin doesn't "ACCOMPLISH LITERALLY NOTHING USEFUL", when millions of people are using it to save and send for 15 years, and over 100 TRILLION dollars has been settled on the network.
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.
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".
COPE
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.
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.
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.
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.
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.
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.
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.
In the restricted scenario provided, it really is logically impossible to know the ownership transfer happened. Your attack requires knowing all inputs into the laundry, which you won't have in the general case, they'll look like any other transfers in the blockchain.
Even if a mixer is busted, I can be pretty sure they abide by their public claim to not keep any history older than a few hours after the mixing is complete, secret keys and all, because it's not in their interest for such evidence of crimes to exist.
And why would having a private key to an output address that no one else has touched be an evidence to a crime? They probably only delete them after the user has transferred the funds out, if they even bother.
I don't know why you are so bought into Bitcoin privacy specifically, but it holds as much water as the privacy statements in the App Store - anyone with sufficient motivation and data analysis skills can poke right through it. Monero is likely stronger, but if it can't be cracked, then as soon as it becomes big enough it will get blocked.
> why would having a private key to an output address that no one else has touched be an evidence to a crime?
An address is a hash over an ECDSA public key and a public key is a computational derivation of the random private key. If you have the private key, you can derive the associated address which is publicly connected on the blockchain to known proceeds of crime that have been laundered. That they were spent or not (by an another customer than the criminal) is irrelevant, it proves that you handled them.
Also, unlike Bitcoin, Signal ads strong privacy on top of a very functional base product.
The idea that Bitcoin can continue to operate with the disapproval of a functioning government is naive.
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).
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.
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.
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).
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.
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?
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.
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.
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.
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.
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.
"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>"
Ironically, cryptocurrency will usher in governments tracking every penny we spend since it's all public on a distributed ledger.
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.
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!
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.
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.
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.
Have you heard of this new technology called a "J.O.B"? It enables people to trade labor for currency.
The next ten years will be about how to earn Bitcoin through skilled labor, not mining on your PC.
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.
And if so then where do all the hackers hang out now?
I have a feeling Bitcoin discussions can get quite more interesting in here if it had no monetary values but people can be sensitive when money is involved.
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.
That's only a good thing in dictatorships, not in democracies.
=> I really don't care. It's not a pro in my life and my continent ( Europe)
Additionally, Bitcoin is super duper easy to track
Yes, Bitcoin allows you to be a dictator of your personal finances, compared to fiat, a "democratic" system, where people you never voted into power get to press a button and print as much money as they deem necessary to "stimulate" the economy.
Ok. So when nothing special happens in your perfect currency, it divides by 3 or 4 in value in a year.
Yeah, that seems great! Go for it!
I mean, it is the best performing asset of the last 10 years, so yeah, it seems pretty great to anyone who has a brain.
A 98% cash and 2% Bitcoin would beat the SPY returns for any 4 year period since inception. When making investments, its important to have a long term outlook. Do you just live day to day without any planning?
Could you tell me who Satoshi is?
Could you explain how you can track who paid you a Lightning Network invoice?
Have you ever written down a seed phrase or made a Bitcoin transaction on chain?
Nope, because he's been inactive for 14 years. ( 70% of all accounts are inactive anyways - https://www.coindesk.com/markets/2023/11/23/bitcoin-supply-i... )
> Lightning Network
You mean the SQLite database at third parties in some cases? Or the ones hosted at the cloud providers? https://watcher.guru/news/amazon-google-cloud-host-49-of-bit...
I'm not a government, in case you were wondering. I can't track the edge-cases. I don't have access to KYC
Fyi, noticed the mixing services going offline? https://en.wikipedia.org/wiki/Tornado_Cash
If Bitcoin is so easy to track people why don't you find him?
> You mean the SQLite database at third parties in some cases?
Didn't answer my question, but you know you can run a lightning node at home, right?
> Links to an ETH project
What does that have to do with Bitcoin?
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.
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.
The ETF is probably the equivalent of this "espresso style" k-cup https://www.keurig.com/Beverages/Dark-Roast/Espresso-Style-C...
No, that's his passphrase
You die, your heir or executor takes the appropriate paperwork to the bank, and then they get the contents of the 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).
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.
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.
"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."
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.
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...
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.
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.
Edit: spelling
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…
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.
The EU (higher population than the US) has had Bitcoin ETFs for a while now.
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.
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.
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.
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.
It might be funded by intel agencies for all we know.
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.
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.
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.
The likes of Blackrock could use BTC as a hedge if the Feds keep on printing USD under political pressure.
Try moving $10M of gold from one end of the world to another for under $100
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.
In crypto, the margins are much wider than in any traditional financial services, which rely on volume and wide adoption!
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.
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
/s
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)
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.
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.
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
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.
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...
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.
Are you copying some talking points or can you explain on a fundamental level why you believe this?
As far as clones. Network effect takes care of that. They would have to be substantially better than bitcoin to beat it and that is extremely unlikely to happen as bitcoin is close to perfect.
You realize that ethereum already surpasses bitcoin in transactions and litecoin and even dogecoin do too right?
https://bitinfocharts.com/comparison/transactions-btc-eth-lt...
Also you still haven't linked where you are getting these ideas. When you believe in predictions of the future with no evidence and no possibility in reality, that's called religion.
Bitcoin refuses to increase their throughput and at the current rate, everyone on earth gets a single transaction every 50 years. What part of this actually makes sense to you?
First off, the transactions on the main bitcoin network will be the largest transactions in the world. All the smaller transactions will take place on different bitcoin networks. Lightning is a decentralised example, VISA and Paypal are centralised examples.
This sounds like you have been soaked in /r/bitcoin propaganda. You realize that subreddit is completely censored so that anyone who goes against the narrative of more throughput or the absurdity of the lightning network gets banned right? Try going there an questioning the common narrative to experiment for yourself then see what happens.
You aren't confronting why anyone would do what you're saying. Why would anyone transfer money onto a network where they have to pay huge amounts of money to move it around? What problem does that solve? It isn't like people can't already move money around much cheaper than a bitcoin transaction.
The lightning network has been promised for over a decade now. No one uses it because you have to make a little cluster of transactions that have no impact on the actual chain until you pay the enormous fees. That's like a little village coming up with their own currency of swapping IOUs with everyone else and not being able to use their money until they pay $12-$37 to convert it something Other people will use. If your IOU is less that the transaction amount, it's frozen. It's an absurd idea that no one wants.
Most of all you aren't confronting why anyone would put themselves through all this when they could either use traditional finance or other cryptocurrencies. Bitcoin is right now useful for and used for only speculation and nothing else. Knowing that why would anyone put their money into unless they were speculating on it?
https://bitinfocharts.com/comparison/transactions-btc-eth-et...
Ultimately, I see Bitcoin as Gold. You do not touch your gold savings for buying your daily coffee. For that, you have USDs in your wallet. But you still transact with Gold once in a while when it makes sense.
Indeed it is crazy. Who is advocating for that though?
Lightning network fees are negligible. So that argument doesn't hold either.
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.
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).
> 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!
Access to a risk-free investment vehicle that preserves your purchasing power perfectly across decades is not a universal right.
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.
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!
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
https://bitinfocharts.com/comparison/bitcoin-transactionfees...
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.
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.
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.
https://bitinfocharts.com/comparison/transactions-btc-eth-do...
https://bitinfocharts.com/comparison/transactionfees-doge-lt...
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.
Btw I know comments like that are fun when talking to friends or whatever. We just have that guideline because of how they influence discussion on a large internet forum...not for any ethical reason or anything like that.
But I must admit that using your actual dad as the source of authority is quite a stretch.
So no, it's not an argument from authority.
It's their dad
FTFY: anyone investing
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.
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.
And then you have a bunch of competing blockchains with significantly different underlying code, so how does anything get standardized?
Bitcoin requires an ever-growing list of rubes to buy in.
You should listen to him!
https://www.justetf.com/en/etf-profile.html?isin=IE00B4X9L53...
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.
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?
"""
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?
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%!
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 ;)
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.
Checkout the book - End Times: Elites, Counter-Elites, and the Path of Political Disintegration by Peter Turchin
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.
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.
There is some value there, but the cut they get is likely too large already. Then again it is all just fake numbers...
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.
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.
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".
US dollar inflation has never been 60% per year AFAIK.
FTFY