What do you think of adding a low% of crypto allocation

[Telecaster]

I keep saying "everyone" because . . .

But you were supposedly 'quoting' my words back at me, so I corrected you - I did not say it.

using "quotes" doesn't mean I quote you, that's

quote

.

That just means "air quotes", IE not actually. As in "value" of BTC, since it doesn't actually have any value, and using the phrase is stupid.
"everyone", just means a lot of people adopts BTC (and it will finally be useful.). A number somewhere between laterally everyone, and a sufficiently high number that it makes BTC actually useful. Shortened to everyone in mocking quotes.. 

See definition of "air quotes, capture it pretty well, though maybe I didn't use it 100% correctly every time;

indicate that what is being said is ironic or mocking,

When a conversation gets to this level of quoteback, it has usually run it's course.

Definitely true. My post is clearly devoid of any value.

I do appreciate that latestarter actually responds and explain their reasoning, it's interesting at least. And more than we usually get from crypto fans

+1

[MustacheAndaHalf]

Coinbase?  The money launderers?

https://www.theverge.com/2023/1/4/23538731/coinbase-fine-crypto-money-laundering-laws-new-york

Preventing thefts and stealing are two different things.

New York regulators found that Coinbase had “wide-ranging and long-standing failures” in the company’s anti-money laundering program, potentially putting the platform at risk of “series criminal conduct” ...

[GuitarStv]

Coinbase?  The money launderers?

https://www.theverge.com/2023/1/4/23538731/coinbase-fine-crypto-money-laundering-laws-new-york

Preventing thefts and stealing are two different things.

New York regulators found that Coinbase had “wide-ranging and long-standing failures” in the company’s anti-money laundering program, potentially putting the platform at risk of “series criminal conduct” ...

Money laundering isn't theft.  It's the concealment of the origins of illegally obtained money.  If they're not following the rules to check if the money they're dealing with is legally obtained, they're behaving in an ethically dubious manner that puts their entire legitimate arm of the business at risk.  That's why they agreed to pay the 50 million dollar penalty for not following money laundering laws.

Doesn't speak well for the whole industry if that's the least shady and most law abiding crypto exchange you can come up with.

[MustacheAndaHalf]

Coinbase?  The money launderers?

https://www.theverge.com/2023/1/4/23538731/coinbase-fine-crypto-money-laundering-laws-new-york

Preventing thefts and stealing are two different things.

New York regulators found that Coinbase had “wide-ranging and long-standing failures” in the company’s anti-money laundering program, potentially putting the platform at risk of “series criminal conduct” ...

Money laundering isn't theft.  It's the concealment of the origins of illegally obtained money.  If they're not following the rules to check if the money they're dealing with is legally obtained, they're behaving in an ethically dubious manner that puts their entire legitimate arm of the business at risk.  That's why they agreed to pay the 50 million dollar penalty for not following money laundering laws.

Doesn't speak well for the whole industry if that's the least shady and most law abiding crypto exchange you can come up with.

Above you falsely called them "money launderers", and here you're clarifying the penalty was "for not following money laundering laws", which was the point of my metaphor.

[maizefolk]

Doesn't speak well for the whole industry if that's the least shady and most law abiding crypto exchange you can come up with.

Let's start working down the list of the biggest banks in North America.

USA:
#1 Chase. https://www.justice.gov/opa/pr/jpmorgan-chase-co-agrees-pay-920-million-connection-schemes-defraud-precious-metals-and-us
#2 Bank of America https://www.justice.gov/opa/pr/bank-america-pay-1665-billion-historic-justice-department-settlement-financial-fraud-leading
#3 Citibank https://www.reuters.com/article/us-citigroup-fine/citibank-fined-70-million-for-anti-money-laundering-compliance-shortcomings-idUSKBN1ET25A/
And so on.

Canada:
#1 RBC https://financialpost.com/news/fp-street/royal-bank-of-canada-bahamas-unit-faulted-in-probe-of-tax-fraud-money-laundering
#2 TB Bank https://www.reuters.com/business/finance/td-expects-penalties-us-probes-money-laundering-2023-08-24/
#3 Bank of Nova Scotia https://www.justice.gov/opa/pr/bank-nova-scotia-agrees-pay-604-million-connection-commodities-price-manipulation-scheme
And so on.

If the worst you can say about coinbase is that they've had to pay a fine to regulators (like almost any bank of any significant size), that's sounds like pretty good news to me.

[GuitarStv]

Doesn't speak well for the whole industry if that's the least shady and most law abiding crypto exchange you can come up with.

Let's start working down the list of the biggest banks in North America.

USA:
#1 Chase. https://www.justice.gov/opa/pr/jpmorgan-chase-co-agrees-pay-920-million-connection-schemes-defraud-precious-metals-and-us
#2 Bank of America https://www.justice.gov/opa/pr/bank-america-pay-1665-billion-historic-justice-department-settlement-financial-fraud-leading
#3 Citibank https://www.reuters.com/article/us-citigroup-fine/citibank-fined-70-million-for-anti-money-laundering-compliance-shortcomings-idUSKBN1ET25A/
And so on.

Canada:
#1 RBC https://financialpost.com/news/fp-street/royal-bank-of-canada-bahamas-unit-faulted-in-probe-of-tax-fraud-money-laundering
#2 TB Bank https://www.reuters.com/business/finance/td-expects-penalties-us-probes-money-laundering-2023-08-24/
#3 Bank of Nova Scotia https://www.justice.gov/opa/pr/bank-nova-scotia-agrees-pay-604-million-connection-commodities-price-manipulation-scheme
And so on.

If the worst you can say about coinbase is that they've had to pay a fine to regulators (like almost any bank of any significant size), that's sounds like pretty good news to me.

Fair point!  Banks are apparently pretty shady businesses.

[LateStarter]

"Bitcoin/PoW is designed to waste energy" ??

The problem with this statement is:
   (i) it is ambiguous - it conflates the objective and the method.
   (ii) it takes zero account of output value, so it conflates 'consume' and 'waste'.

The objective of Bitcoin/PoW is decentralised and secure digital property = true.
The method of Bitcoin/PoW consumes a lot of energy = true.

Does consume = waste ?

 All energy consumption includes wasting energy = uninteresting truism.
  Breathing wastes energy but breathing is clearly not 'a waste of energy'.
  The only interesting question is whether something is 'a waste of energy'.

 'a waste of energy' = total input energy > output value   (and output value is subjective)
  Bitcoin is ‘a waste of energy' if you don't, subjectively, value Bitcoin = another uninteresting truism.

 'a waste of energy' = using methodA instead of equally effective and more energy-efficient methodB.
 
  Is Proof of Stake an equally effective and more energy-efficient method than PoW ?
   No. PoS is not equally effective at all. PoS is not decentralised. PoS requires trust in the big stakeholders, and they can't be deposed by the masses. Jason Lowery provides a good explanation of PoW vs PoS from first principles.
   Proof of Work is the only effective method we have for 'decentralised and secure' digital property.

  Is Visa an equally effective and more energy-efficient solution than Bitcoin ?
   No. Visa is in no way equivalent to Bitcoin. Bitcoin is final settlement vs Visa's entries on temporary ledgers. Moreover, Bitcoin is a standalone system vs Visa's multitude of dependencies on other systems.
   In just security terms, Visa is like a Post-It note with your name on it stuck to a dollar bill. That's only secure if it's in a safe that's in a vault that's in a trusted bank that's in a well-policed neighbourhood that's in a nation that's protected by a legal system that's supported by a government that's protected by a powerful military, etc. - and all those dependencies consume a vast amount of energy. Bitcoin is independent of all of that.


"But it still seems so wasteful. All those TWh consumed making pointless guesses at a pointless solution to some pointless problem!"
It can seem wasteful to a casual observer as the outcome is invisible and intangible. The outcome, and the whole point of PoW, is a 'wall of energy' behind which Bitcoin is secure. It, necessarily, requires substantial energy to create a substantial 'wall of energy'. Every one of those 'pointless' guesses is like a brick in Bitcoin's version of a Fort Knox wall.

Bitcoin's 'wall of energy' is directly equivalent to the Fort Knox 'walls of energy'.
Both, necessarily, cost a significant amount of energy to build and maintain.
Breaching either would, necessarily, require a (generally, prohibitively) significant amount of energy.

There is no low-energy security solution that will reliably protect from high-energy attacks.
There is a reason why Fort Knox walls aren't low-energy fences.
There is a reason why Bitcoin isn't low-energy Proof of Stake.
It's the same reason.

[deborah]

The main issue for me is that cryptocurrencies, because of the way they’re designed (not tied to any particular country, anyone can create them…), are extremely attractive to criminals and rogue states. North Korea has stolen millions of dollars in normal currency, and several billions of dollars in cryptocurrency, because it’s easier, and less traceable. The spread of fentanyl is being enhanced by the use of cryptocurrencies by the criminals and governments concerned.

They are also designed to consume enormous amounts of energy in their creation, and since this is mainly not renewable energy (partly because rogue states are creating a lot), it generates a lot of CO2 emissions.

[MustacheAndaHalf]

@LateStarter - Fair point about "proof of stake" making control of Ethereum centralized.  In the past, the entire Bitcoin Core Team worked for the same start-up company that was developing the Lightning Network.  Having that group's salaries controlled by one CEO seems centralized to me.  Expanding the block size could have made their work less relevant, so all of them were opposed to it.  Seeing the alignment of their personal incentives and what they decided for Bitcoin gave me the impression of centralized group think for Bitcoin development.  I'm open to contrary evidence.

[MustacheAndaHalf]

There's several news articles about North Korea's criminal activity via Bitcoin.  Of the largest cyrpto exchanges, Binance international and Binance U.S. both make the top five.  They recently got fined for a lack of anti-money laundering practices by the SEC, with other government agencies being part of this settlement:
https://www.justice.gov/opa/pr/binance-and-ceo-plead-guilty-federal-charges-4b-resolution

Just this week, the SEC announced it was going after Kraken (#3 exchange) for being unregistered.  No mention of anti-money laundering, which I think was dealt with in a prior settlement.
https://www.sec.gov/news/press-release/2023-237

North Korea's thefts via crypto is a problem.  The trend I see is new anti-money laundering practices at the largest crypto exchanges, which will make it harder for North Korea to launder stolen crypto.

[seattlecyclone]

  Is Visa an equally effective and more energy-efficient solution than Bitcoin ?
   No. Visa is in no way equivalent to Bitcoin. Bitcoin is final settlement vs Visa's entries on temporary ledgers. Moreover, Bitcoin is a standalone system vs Visa's multitude of dependencies on other systems.
   In just security terms, Visa is like a Post-It note with your name on it stuck to a dollar bill. That's only secure if it's in a safe that's in a vault that's in a trusted bank that's in a well-policed neighbourhood that's in a nation that's protected by a legal system that's supported by a government that's protected by a powerful military, etc. - and all those dependencies consume a vast amount of energy. Bitcoin is independent of all of that.

You've brought up this point a few times now and I just have to say it's extremely unpersuasive. Yes, it's true that most of our global financial system is secured not just by computers and cryptography, but also by piles of contracts and regulations and national governments that have the power to enforce such things. Governments use a lot of energy, yes, but it's disingenuous to suggest that dividing this energy usage by the number of Visa transactions is at all a relevant comparison with Bitcoin. Governments predate electronic banking, and securing the modern banking system is but one of the many purposes for which we have a military and court system and all the other government functions.

You know what else is facilitated by our existing set of strong governments? The international telecommunications network (aka "internet") that transmits blockchain transactions around the world, as well as the data centers and power plants that do most of the mining. Hard to make a Bitcoin mining operation price-competitive in a country where reliable network connections and power supply can't be counted on and you need to build all that from scratch before you can run your first hash.

[LateStarter]

  Is Visa an equally effective and more energy-efficient solution than Bitcoin ?
   No. Visa is in no way equivalent to Bitcoin. Bitcoin is final settlement vs Visa's entries on temporary ledgers. Moreover, Bitcoin is a standalone system vs Visa's multitude of dependencies on other systems.
   In just security terms, Visa is like a Post-It note with your name on it stuck to a dollar bill. That's only secure if it's in a safe that's in a vault that's in a trusted bank that's in a well-policed neighbourhood that's in a nation that's protected by a legal system that's supported by a government that's protected by a powerful military, etc. - and all those dependencies consume a vast amount of energy. Bitcoin is independent of all of that.

You've brought up this point a few times now and I just have to say it's extremely unpersuasive. Yes, it's true that most of our global financial system is secured not just by computers and cryptography, but also by piles of contracts and regulations and national governments that have the power to enforce such things. Governments use a lot of energy, yes, but it's disingenuous to suggest that dividing this energy usage by the number of Visa transactions is at all a relevant comparison with Bitcoin. Governments predate electronic banking, and securing the modern banking system is but one of the many purposes for which we have a military and court system and all the other government functions.

I'm, of course, not suggesting that the entire costs/energies of safes and vaults and banks and policing and legal and governments and militarys should be applied to Visa. However, Visa is built on top of all those things and is dependent on all those things - all those things use vast energies and we all pay handsomely for them through other channels. It is disingenuous to compare Bitcoin with Visa without considering a (probably incalculable) proportion of all those significant additional costs/energies.

The main point is that Bitcoin and Visa are very different animals - comparison is mostly pointless and meaningless.
A Lightning transaction is a reasonable comparison to a Visa transaction. Like Visa, Lightning is not final settlement and it's dependent on a big supporting infrastructure. Like Visa, Lightning is the tip of an iceberg.

You know what else is facilitated by our existing set of strong governments? The international telecommunications network (aka "internet") that transmits blockchain transactions around the world, as well as the data centers and power plants that do most of the mining. Hard to make a Bitcoin mining operation price-competitive in a country where reliable network connections and power supply can't be counted on and you need to build all that from scratch before you can run your first hash.

Bitcoin is 'dependent' on internet and energy supplies but it's extremely flexible and agnostic about where it finds them. Bitcoin is not dependent on any specific corner of the internet, nor any specific power plant, nor any country/government, etc. Micro-generation and Starlink, etc. are all increasingly available and further decentralise Bitcoin's infrastructure dependencies.

I'm not claiming that Bitcoin is entirely independent of infrastructure but it's dependencies are in no way comparable with those of Visa.

[LateStarter]

@LateStarter - Fair point about "proof of stake" making control of Ethereum centralized.  In the past, the entire Bitcoin Core Team worked for the same start-up company that was developing the Lightning Network.  Having that group's salaries controlled by one CEO seems centralized to me.  Expanding the block size could have made their work less relevant, so all of them were opposed to it.  Seeing the alignment of their personal incentives and what they decided for Bitcoin gave me the impression of centralized group think for Bitcoin development.  I'm open to contrary evidence.

The block size war was before my time - I'm a relative newcomer. I don't know who comprised the core team then but I know it's pretty diverse now.

My understanding is that the drive for retaining small blocks was that small blocks are easy for a cheap node to manage = more nodes = more decentralisation. This is a key aspect of Bitcoin and it's something that Bitcoiners value highly. Thus, Lightning was developed (by small block supporters) to permit the required increased transactions, albeit offchain, while retaining small blocks. This all makes good sense to me.
I hadn't heard the version where small nodes were retained just to protect Lightning - in effect, hobbling Bitcoin against it's better interests for no good reason other than to defend their pet Lightning project. It's not impossible, but it seems a bit of a stretch to me.
On balance, the first version makes waaay more sense to me, though I concede that it's also what I would like to be true.

Ultimately though, whilst a few core developers are undoubtedly influential, it is the many miners and nodes that vote and decide what code/fork/parameters prevail - that's the point. And anyone with a little interest can set up a node and vote. If the majority miners/nodes want small blocks, then small blocks it is - developers be damned. The big block solutions are out there for anyone that wants to participate and promote them but, so far, they're a bit of a sideshow.

[seattlecyclone]

I'm, of course, not suggesting that the entire costs/energies of safes and vaults and banks and policing and legal and governments and militarys should be applied to Visa. However, Visa is built on top of all those things and is dependent on all those things - all those things use vast energies and we all pay handsomely for them through other channels. It is disingenuous to compare Bitcoin with Visa without considering a (probably incalculable) proportion of all those significant additional costs/energies.

Another way to look at it is that a stable government with a military strong enough to repel most foreseeable invasions is something most people would want to have even if our financial transactions were still settled by transporting bits of silver and gold around. Once you have a stable government, the ability to have secure electronic financial transactions without using a large city's worth of electricity seeking the lucky hash of the hour is one of many things we get "for free."

So...the question of whether the Bitcoin energy consumption is a "waste" or not comes down to whether you believe we can count on having a reasonably stable government to live under. If we can, then all that hashing is unnecessary and you can use the lower-energy systems that a stable government enables.

[FINate]

So...the question of whether the Bitcoin energy consumption is a "waste" or not comes down to whether you believe we can count on having a reasonably stable government to live under. If we can, then all that hashing is unnecessary and you can use the lower-energy systems that a stable government enables.

This is very well put.

[LateStarter]

I'm, of course, not suggesting that the entire costs/energies of safes and vaults and banks and policing and legal and governments and militarys should be applied to Visa. However, Visa is built on top of all those things and is dependent on all those things - all those things use vast energies and we all pay handsomely for them through other channels. It is disingenuous to compare Bitcoin with Visa without considering a (probably incalculable) proportion of all those significant additional costs/energies.

Another way to look at it is that a stable government with a military strong enough to repel most foreseeable invasions is something most people would want to have even if our financial transactions were still settled by transporting bits of silver and gold around. Once you have a stable government, the ability to have secure electronic financial transactions without using a large city's worth of electricity seeking the lucky hash of the hour is one of many things we get "for free."

So...the question of whether the Bitcoin energy consumption is a "waste" or not comes down to whether you believe we can count on having a reasonably stable government to live under. If we can, then all that hashing is unnecessary and you can use the lower-energy systems that a stable government enables.

What??  You're missing the point by a country mile if you think the objective is 'a reasonably stable government to live under'.
The objective is to have an independent, decentralised, uncensorable, immutable, hard money, etc. etc. - a money that can't be debased at will by Govs and Central Banks.

That has significant value to me, so Bitcoin is absolutely not 'a waste of energy' in my view.

We're back to my main point that; with regard to energy & waste, the only interesting question is whether or not Bitcoin is 'a waste of energy', and the answer is subjective.

[seattlecyclone]

I'm, of course, not suggesting that the entire costs/energies of safes and vaults and banks and policing and legal and governments and militarys should be applied to Visa. However, Visa is built on top of all those things and is dependent on all those things - all those things use vast energies and we all pay handsomely for them through other channels. It is disingenuous to compare Bitcoin with Visa without considering a (probably incalculable) proportion of all those significant additional costs/energies.

Another way to look at it is that a stable government with a military strong enough to repel most foreseeable invasions is something most people would want to have even if our financial transactions were still settled by transporting bits of silver and gold around. Once you have a stable government, the ability to have secure electronic financial transactions without using a large city's worth of electricity seeking the lucky hash of the hour is one of many things we get "for free."

So...the question of whether the Bitcoin energy consumption is a "waste" or not comes down to whether you believe we can count on having a reasonably stable government to live under. If we can, then all that hashing is unnecessary and you can use the lower-energy systems that a stable government enables.

What??  You're missing the point by a country mile if you think the objective is 'a reasonably stable government to live under'.

The objective is to have a way to conduct business electronically. If you can assume a stable government to enforce various contracts and regulations, you end up with a group of centralized payment processors like Visa that just have numbers in a database on the backend and aren't dragged down by all the computational overhead inherent in a decentralized solution. If you don't assume your government will enforce the agreements surrounding the transactions you want to make, you'll end up with something more like Bitcoin. Decentralization is less efficient than centralization and should therefore not be expected to come into common use except for cases where a centralized solution is inadequate or unavailable.

The objective is to have an independent, decentralised, uncensorable, immutable, hard money, etc. etc. - a money that can't be debased at will by Govs and Central Banks.

That may be an objective that you have, but most people don't care. They'll pay for their everyday goods using the most convenient method available to them. And for the millionth time, "debasement" of currency (inflation) may be a reason not to hold piles of that currency as a long-term investment, but it isn't sufficient reason to avoid using that currency as a unit of exchange or unit of account. For those things you want to have the value of the currency you're using to be predictable over the short to medium term. Whether that value is predictably trending lower or staying flat is a secondary concern.

We're back to my main point that; with regard to energy & waste, the only interesting question is whether or not Bitcoin is 'a waste of energy', and the answer is subjective.

And my point is that the subjectivity mostly resolves to the question of how much you think the existing centralized solutions can be relied upon (i.e. how stable is the government). A less-efficient alternative system is only valuable to the extent that it is actually necessary. For most of us, it just isn't.

[GuitarStv]

Since bitcoin is useless in practice as a currency, and nearly every transaction needs to be transformed back into real money . . . the full energy costs of the banking system are required in addition to hashing costs to support it.  Comparing bitcoin energy costs without them is nonsensical.

[LateStarter]

I'm, of course, not suggesting that the entire costs/energies of safes and vaults and banks and policing and legal and governments and militarys should be applied to Visa. However, Visa is built on top of all those things and is dependent on all those things - all those things use vast energies and we all pay handsomely for them through other channels. It is disingenuous to compare Bitcoin with Visa without considering a (probably incalculable) proportion of all those significant additional costs/energies.

Another way to look at it is that a stable government with a military strong enough to repel most foreseeable invasions is something most people would want to have even if our financial transactions were still settled by transporting bits of silver and gold around. Once you have a stable government, the ability to have secure electronic financial transactions without using a large city's worth of electricity seeking the lucky hash of the hour is one of many things we get "for free."

So...the question of whether the Bitcoin energy consumption is a "waste" or not comes down to whether you believe we can count on having a reasonably stable government to live under. If we can, then all that hashing is unnecessary and you can use the lower-energy systems that a stable government enables.

What??  You're missing the point by a country mile if you think the objective is 'a reasonably stable government to live under'.

The objective is to have a way to conduct business electronically. If you can assume a stable government to enforce various contracts and regulations, you end up with a group of centralized payment processors like Visa that just have numbers in a database on the backend and aren't dragged down by all the computational overhead inherent in a decentralized solution. If you don't assume your government will enforce the agreements surrounding the transactions you want to make, you'll end up with something more like Bitcoin. Decentralization is less efficient than centralization and should therefore not be expected to come into common use except for cases where a centralized solution is inadequate or unavailable.

The objective is to have an independent, decentralised, uncensorable, immutable, hard money, etc. etc. - a money that can't be debased at will by Govs and Central Banks.

That may be an objective that you have, but most people don't care. They'll pay for their everyday goods using the most convenient method available to them. And for the millionth time, "debasement" of currency (inflation) may be a reason not to hold piles of that currency as a long-term investment, but it isn't sufficient reason to avoid using that currency as a unit of exchange or unit of account. For those things you want to have the value of the currency you're using to be predictable over the short to medium term. Whether that value is predictably trending lower or staying flat is a secondary concern.

We're back to my main point that; with regard to energy & waste, the only interesting question is whether or not Bitcoin is 'a waste of energy', and the answer is subjective.

And my point is that the subjectivity mostly resolves to the question of how much you think the existing centralized solutions can be relied upon (i.e. how stable is the government). A less-efficient alternative system is only valuable to the extent that it is actually necessary. For most of us, it just isn't.

But we're just back to discussing Means of Exchange as if it's all-important again. It's not an issue and is not the use-case for us wealthy fortunates in stable nations. I was only drawn into it to dispute the Visa-energy comparison.
In any case, if/when Bitcoin as everyday MoE does become a thing, it will not be high-energy onChain Bitcoin - it will be on low-energy Lightning or similar.
I watch the MoE developments in the tougher parts of the world with great interest, but it's of very little direct interest to me - and I wouldn't expect it be of much interest to you either. I spend GBP via Visa & Mastercard all the time without much concern.

The issue, for me, is that fiat debasement forces us all to take risks with our hard-earned capital in an effort to retain our purchasing power. I've got some in Index Funds, just like a good Mustachian - it's, at best, a sticking plaster solution. I've also got some in Bitcoin - it's potentially a cure.

[MustacheAndaHalf]

The Lightning Network isn't Bitcoin.  As mentioned, proof of work secures the Bitcoin Blockchain.  If Ethereum's flaw is not using proof of work, doesn't that mean the Lightning Network is flawed by not using proof of work?

As to the block size debate, Bitcoin hobbled itself with small block sizes, and Bitcoin Core Developers did nothing to change it.  When the developers all joined the company making the Lightning Network, that became a conflict of interest.  Their pre-IPO stock options and salaries came from one company, which directly benefits from a lack of progress on Bitcoin's block size.  For different reasons, miners benefit: limited transactions means a bidding war, with the transaction fees all going to the miner of the next block.  If users don't like it... well, they still need a transaction to sell their Bitcoin.

In practical terms, the Lightning Network carries 0.0% of the transaction volume of Bitcoin.  $78.2M in August means $2.52 million/day.
"In August 2023, Lightning Network processed a transaction volume of $78.2 million"

Bitcoin's blockchain is measured in billions per day.  Much like crypto itself, Lightning Network represents a potential technology that has not proven itself yet.
"Bitcoins sent last 24h 193,820 BTC ($7,238,880,278) 0.9912% market cap
https://bitinfocharts.com/bitcoin/

[LateStarter]

The Lightning Network isn't Bitcoin.  As mentioned, proof of work secures the Bitcoin Blockchain.  If Ethereum's flaw is not using proof of work, doesn't that mean the Lightning Network is flawed by not using proof of work?

Of course Lightning is not Bitcoin.
Lightning is not comparable to Ethereum either. If Lightning claimed to be a foundational base layer for a money, as Ethereum does, it would be flawed. Clearly, it claims no such thing.

As to the block size debate, Bitcoin hobbled itself with small block sizes, and Bitcoin Core Developers did nothing to change it.  When the developers all joined the company making the Lightning Network, that became a conflict of interest.  Their pre-IPO stock options and salaries came from one company, which directly benefits from a lack of progress on Bitcoin's block size.  For different reasons, miners benefit: limited transactions means a bidding war, with the transaction fees all going to the miner of the next block.  If users don't like it... well, they still need a transaction to sell their Bitcoin.

Yes, I see the CoI risk, but the version I provided a few posts back still makes the most sense to me.
I don't see Bitcoin as hobbled. Small blocks = more decentralisation. That's more important to me than a high throughput of transactions.
Bitcoin onChain should be reserved for significant transactions - keep it simple, even if that means it's too clunky and expensive for buying a coffee.
Put all the complexity, easy access, clever features, etc. etc. etc. etc. on Layer2 and above. Simplicity is hard enough to do right, but complexity is way harder by definition, and complexity ALWAYS includes bugs. Let those bugs exist in Lightning and on Layer3's, etc. sitting on top it. Problems WILL occur - but they won't threaten the foundational base layer, and that's what's really important - imo.

In practical terms, the Lightning Network carries 0.0% of the transaction volume of Bitcoin.  $78.2M in August means $2.52 million/day.
"In August 2023, Lightning Network processed a transaction volume of $78.2 million"

Bitcoin's blockchain is measured in billions per day.  Much like crypto itself, Lightning Network represents a potential technology that has not proven itself yet.
"Bitcoins sent last 24h 193,820 BTC ($7,238,880,278) 0.9912% market cap
https://bitinfocharts.com/bitcoin/

I think the "general trend" is a better guide than the old "not happened yet" - which is pointlessly obvious and says nothing about the likelihood of it happening in the future.

How long do you think it should take for a radical new concept (digital property?? - WTF??!!) and the associated technology to be widely understood and adopted by the masses ? Currently, for most, Bitcoin = regular crypto-scam warnings from their banks, SBF/FTX headlines in the news, and that's about about it . . .

Things take time. I can wait. Especially while the general trend is in the right direction.

[GuitarStv]

How long do you think it should take for a radical new concept (digital property?? - WTF??!!) and the associated technology to be widely understood and adopted by the masses ?

When the technology is obviously useful and provides needed solutions?  Mass adoption time should be a couple years, maybe a decade at the outside.  When the technology doesn't solve any problems or provide anything of benefit?  Mass adoption time should approach infinity (which doesn't mean zero adopters - there will always be a percentage of people susceptible to confidence scams).

[maizefolk]

Comparing dollar values between lightning and bitcoin is probably not the right criteria.

By design, lightning should be getting used for small value transactions (i.e. buying a cup of coffee). Lightning doesn't make sense for four figure, five figure, or more transactions where paying the transaction fee to have a transaction included on the blockchain is <0.1% of the total value being transferred.

Credit cards in the USA are used in approximately 5 trillion worth of in transactions/year. That's less than 10% of $55+ trillion of ACH transfers performed each year in the USA. But credit cards are used for far more total transactions than ACH. The average dollar value per transaction is just a lot lower.

[blue_green_sparks]

General distrust in our institutions does not bode well for any society. It is only these institutions that grant and provide us with rights and protection under the law. Once this facade of protection is gone...well, we have plenty of historical examples of what always happens. This 'anti-institution' mind-set occurs when people lucky enough to have enjoyed these benefits for a long time and become artificially entitled. We are "gonna stick it to the man". It is ridiculous. And of course, the unregulated "de-fi" arena is a basket of scams, rip-offs, rug pulls, volatility, money laundering, energy wasting, Ponzi pump and dump and a whole lot of crypto-babble mainly for obfuscation purposes.

If it stays unregulated long enough, Quantum computers/AI become will be able to hack into crypto. That should be the end of it. Trad financial institutions will have the same problem, but at least the law is there to help, and they will have the technical growth in security that only large institutions with many very smart people working together can provide.

[Glenstache]

If I'm understanding it correctly, the selling point is that BTC or equivalents are stores of wealth where the value proposition is that it is funcitonally finite and not controlled by a central bank with the ability to adjust monetary policy. The selling point is not that it is an efficient means of conducting daily transactions.

This seems to fit a libertarian philosophy in which less control and more free market is better at the macro level. I do wonder about the implications of a meaningful amount of money shifting into BTC though since it would effectivley be out of circulation and out of use. There is a societal value in having money in circulation and being used for transactions. Having financial tools like banks that can take that money that- for an individual- is in reserve/savings and put it to use to fund mortgages and small business loans and the like is better for the economy in my opinion. Having a store of wealth that takes that money out of circulation is not a selling point for a better economy. It just feels like hoarding. Or am I missing some hidden ability of BTC to be used in these ways?

[MustacheAndaHalf]

Alibaba planned to raise money from the IPO of its cloud business, which it called off owing to tensions between the U.S. and China.  They decided to dump their quantum computing research - not reduce, but end the entire thing.  I'm not an expert in quantum computing, but this sounds like a company with experience deciding it lacks promise when they did cost cutting.

maizefolk - Your example shows a roughly 10x gap between ACH and credit card transaction volume, where the smaller credit card transactions are at a disadvantage.  For Bitcoin and Lightning Network, transaction size may be one factor, but it is not enough by itself to explain a roughly 3000x difference in transaction volume.

[GuitarStv]

Alibaba planned to raise money from the IPO of its cloud business, which it called off owing to tensions between the U.S. and China.  They decided to dump their quantum computing research - not reduce, but end the entire thing.  I'm not an expert in quantum computing, but this sounds like a company with experience deciding it lacks promise when they did cost cutting.

maizefolk - Your example shows a roughly 10x gap between ACH and credit card transaction volume, where the smaller credit card transactions are at a disadvantage.  For Bitcoin and Lightning Network, transaction size may be one factor, but it is not enough by itself to explain a roughly 3000x difference in transaction volume.

Bitcoin has many mining pools, where large groups of miners transfer fractions of bitcoin back and forth among each other when they find a block (generating many transactions with zero economic value).

[MustacheAndaHalf]

The Lightning Network isn't Bitcoin.  As mentioned, proof of work secures the Bitcoin Blockchain.  If Ethereum's flaw is not using proof of work, doesn't that mean the Lightning Network is flawed by not using proof of work?

Of course Lightning is not Bitcoin.
Lightning is not comparable to Ethereum either. If Lightning claimed to be a foundational base layer for a money, as Ethereum does, it would be flawed. Clearly, it claims no such thing.

I thought we were talking about secure transactions.  I never brought up "foundational base layer for a money" before quoting you in this sentence.  My "as mentioned" referred to a post of yours (*).  If you agree the only way to secure digital assets is with proof of work... and Lightning Network doesn't use proof of work... how do you resolve that difference?  In your view, can Lightning Network ever be secure if it does not use proof of work?

"Bitcoin/PoW is designed to waste energy" ??
...
Jason Lowery provides a good explanation of PoW vs PoS from first principles.
   Proof of Work is the only effective method we have for 'decentralised and secure' digital property.

As to timeframe, my comment is deliberately ambiguous.  It tries to represent both crypto detractors and fans in the same sentence - saying potential is there, but it has not been realized as of now.

My comments on Lightning Network were intended to separate it from Bitcoin.  The value of Bitcoin transferred consists of 0.0% transfers by the Lightning Network.  Bitcoin's shortcomings, at this time, can't be written off by pointing to the Lightning Network.  That said, on its own, the Lightning Network has potential and is growing quite fast.  Once it hits bugs/problems and growth stabilizes, it will be interesting to see where it ends up.

Visa/MC should not be worried about Bitcoin, which isn't innovating much.  They should be worried about the Lightning Network, which is growing extremely fast.

[LateStarter]

How long do you think it should take for a radical new concept (digital property?? - WTF??!!) and the associated technology to be widely understood and adopted by the masses ?

When the technology is obviously useful and provides needed solutions?  Mass adoption time should be a couple years, maybe a decade at the outside.  When the technology doesn't solve any problems or provide anything of benefit?  Mass adoption time should approach infinity (which doesn't mean zero adopters - there will always be a percentage of people susceptible to confidence scams).

And there will always be a percentage of people too blinkered by the constraints of today's conventions to see the potential for the future. Often, it's those that you might expect to be in exactly the right place and with exactly the right knowledge to see it clearly.
Here's a few humorous examples for entertainment. They are, undoubtedly, carefully curated extreme examples (and they're probably not all true) but it's probably wise to keep them in mind when confidently asserting the dismal prospects of a new technology:

“This ‘telephone’ has far too many shortcomings to be taken seriously as a means of communication. It has objectively no value.” William Orton, President of Western Union, 1876.

“Fooling around with alternating current (AC) is just a waste of time. Nobody will ever use it.” Thomas Edison, famous inventor and holder of more than 1,000 patents. 1889.

“Heavier than air flying machines are physically impossible”. Lord Kelvin, British Mathematician and Physicist, 1895.

“Airplanes are interesting toys, but of no military value.” Ferdinand Foch, Supreme Commander of All Allied WWI Forces, 1911.

“There is not the slightest indication that nuclear energy will ever be attainable. It would mean the atom would have to be shattered at will”. Albert Einstein, 1932.

“Television will never hold onto an audience. People will very quickly get bored of staring at a plywood box every night”. Darryl Zanuck, 20th Century Fox, 1946.

“Why would we make this? The global potential market for copying machines is 5,000 at absolute most”. IBM, to the guys who would eventually found Xerox, 1959.

“There is practically no chance satellites will ever improve telephone, television or radio reception within the United States.” T. Craven, FCC Commissioner, 1961.

“Remote shopping, while entirely feasible, will certainly flop. It has no chance of success.” Time Magazine, 1966.

“There is no reason an individual would ever want a computer in their home”. Ken Olsen, founder of Digital Equipment Corp, 1977.

“Mobile phones will absolutely never replace the wired telephone”. Marty Cooper, inventor of the mobile phone, 1981.

“The idea of a personal communicator in every pocket is nothing more than a pipe-dream fuelled by greed.” Andy Grove, CEO of Intel, 1992.

“I predict that the internet will go spectacularly supernova, and in 1996 it will catastrophically implode”. Robert Metcalf, inventor of Ethernet, 1995.

“The internet will fade away because most people have nothing to say to each other. By 2005 it will be clear that the internet’s impact on the global economy has been no greater than the fax machine.” Paul Krugman, renowned Economist, 1998.

“Subscription models for music are bankrupt. I think you could make the Second Coming of Jesus himself available on subscription and it wouldn’t be successful.” Steve Jobs, CEO of Apple, 2003.

“I don’t know… there just aren’t that many videos I want to watch.”  Steve Chen, founder of YouTube, expressing doubts about YouTube’s viability as a company. 2005.

[blue_green_sparks]

Alibaba planned to raise money from the IPO of its cloud business, which it called off owing to tensions between the U.S. and China.  They decided to dump their quantum computing research - not reduce, but end the entire thing.  I'm not an expert in quantum computing, but this sounds like a company with experience deciding it lacks promise when they did cost cutting.

With computing, the advances are exponential with or without the Chinese. In a June report, 20 supercomputer centers around the world reported their AI results, three of them delivering more than an exaflop. That's a quintillion or a billion-billion operations per second. I was reading how Bitcoin has a vulnerability window just waiting to be exploited. There will be a fierce race between encryption and hacking as supercomputing costs come down, access to AI becomes mainstream and the field of cyber-security will explode for sure. How can a static technology of BTC implementation keep up with all of this, I do wonder about that. I am sure there is some decentralized agency looking at it, LOL.

[MustacheAndaHalf]

Alibaba planned to raise money from the IPO of its cloud business, which it called off owing to tensions between the U.S. and China.  They decided to dump their quantum computing research - not reduce, but end the entire thing.  I'm not an expert in quantum computing, but this sounds like a company with experience deciding it lacks promise when they did cost cutting.

maizefolk - Your example shows a roughly 10x gap between ACH and credit card transaction volume, where the smaller credit card transactions are at a disadvantage.  For Bitcoin and Lightning Network, transaction size may be one factor, but it is not enough by itself to explain a roughly 3000x difference in transaction volume.

Bitcoin has many mining pools, where large groups of miners transfer fractions of bitcoin back and forth among each other when they find a block (generating many transactions with zero economic value).

"zero econonomic value" is your opinion - not a fact.  Up above I cited sources for my data - can you do the same for your claim of "zero economic value"?

The reality is that groups of miners earn a blockchain reward together, and then divide the profits.

Since bitcoin is useless in practice as a currency, and nearly every transaction needs to be transformed back into real money . . . the full energy costs of the banking system are required in addition to hashing costs to support it.  Comparing bitcoin energy costs without them is nonsensical.

p.s.
I liked this post of yours, GuitarStv, but I didn't comment since I didn't want to join the debate about how much of a country's infrastructure is needed for banks vs Bitcoin.

[LateStarter]

The Lightning Network isn't Bitcoin.  As mentioned, proof of work secures the Bitcoin Blockchain.  If Ethereum's flaw is not using proof of work, doesn't that mean the Lightning Network is flawed by not using proof of work?

Of course Lightning is not Bitcoin.
Lightning is not comparable to Ethereum either. If Lightning claimed to be a foundational base layer for a money, as Ethereum does, it would be flawed. Clearly, it claims no such thing.

I thought we were talking about secure transactions.  I never brought up "foundational base layer for a money" before quoting you in this sentence.  My "as mentioned" referred to a post of yours (*).  If you agree the only way to secure digital assets is with proof of work... and Lightning Network doesn't use proof of work... how do you resolve that difference?  In your view, can Lightning Network ever be secure if it does not use proof of work?

"Bitcoin/PoW is designed to waste energy" ??
...
Jason Lowery provides a good explanation of PoW vs PoS from first principles.
   Proof of Work is the only effective method we have for 'decentralised and secure' digital property.

Yes, "secure transactions" but not "digital property" as mentioned in my quote. Lightning doesn't establish "digital property" (for which, imo, PoW is a requirement) - it just ships it around.
And I agree that Lightning is less secure than Bitcoin. Security and Convenience tend to be inversely correlated. Bitcoin is very secure and less convenient. Lightning is less secure and more convenient.
Likewise, my conventional stash is sealed away behind 2FA and a week's notice, whereas my spending money is rattling around in my pocket.

As to timeframe, my comment is deliberately ambiguous.  It tries to represent both crypto detractors and fans in the same sentence - saying potential is there, but it has not been realized as of now.

My comments on Lightning Network were intended to separate it from Bitcoin.  The value of Bitcoin transferred consists of 0.0% transfers by the Lightning Network.  Bitcoin's shortcomings, at this time, can't be written off by pointing to the Lightning Network.  That said, on its own, the Lightning Network has potential and is growing quite fast.  Once it hits bugs/problems and growth stabilizes, it will be interesting to see where it ends up.

Visa/MC should not be worried about Bitcoin, which isn't innovating much.  They should be worried about the Lightning Network, which is growing extremely fast.

In that case, I completely agree.
Bitcoin not innovating much is a very good thing imo, as described above.
Lightning, and not onChain Bitcoin, is absolutely the competitor to Visa/MC.

[GuitarStv]

Alibaba planned to raise money from the IPO of its cloud business, which it called off owing to tensions between the U.S. and China.  They decided to dump their quantum computing research - not reduce, but end the entire thing.  I'm not an expert in quantum computing, but this sounds like a company with experience deciding it lacks promise when they did cost cutting.

maizefolk - Your example shows a roughly 10x gap between ACH and credit card transaction volume, where the smaller credit card transactions are at a disadvantage.  For Bitcoin and Lightning Network, transaction size may be one factor, but it is not enough by itself to explain a roughly 3000x difference in transaction volume.

Bitcoin has many mining pools, where large groups of miners transfer fractions of bitcoin back and forth among each other when they find a block (generating many transactions with zero economic value).

"zero econonomic value" is your opinion - not a fact.  Up above I cited sources for my data - can you do the same for your claim of "zero economic value"?

The reality is that groups of miners earn a blockchain reward together, and then divide the profits.

I get that.

I'm saying that these transactions generate churn for bitcoin, but it's a closed loop.  Miners group together, find a bitcoin, split it among themselves.  Zero economic value because no economic action has taken place.  Nothing has been bought, sold, or traded.  It's an ouroboros.

[MustacheAndaHalf]

Alibaba planned to raise money from the IPO of its cloud business, which it called off owing to tensions between the U.S. and China.  They decided to dump their quantum computing research - not reduce, but end the entire thing.  I'm not an expert in quantum computing, but this sounds like a company with experience deciding it lacks promise when they did cost cutting.

With computing, the advances are exponential with or without the Chinese. In a June report, 20 supercomputer centers around the world reported their AI results, three of them delivering more than an exaflop. That's a quintillion or a billion-billion operations per second. I was reading how Bitcoin has a vulnerability window just waiting to be exploited. There will be a fierce race between encryption and hacking as supercomputing costs come down, access to AI becomes mainstream and the field of cyber-security will explode for sure. How can a static technology of BTC implementation keep up with all of this, I do wonder about that. I am sure there is some decentralized agency looking at it, LOL.

Quantum computing theory goes back 55 years according to Wikipedia, and actual qubit computers at least 25 years.  If the "advances are exponential" for 25+ years, why hasn't it moved beyond research projects to something useful?

"1998 ... A working 2-qubit NMR quantum computer"
https://en.wikipedia.org/wiki/Timeline_of_quantum_computing_and_communication

Are you aware Bitcoin mining uses specialized hardware?  Supercomputers aren't getting more powerful in isolation - they benefit from advances in chip technology.  The same advances also benefit Bitcoin miners, who use newer specialized hardware to get the most power for the least electricity.  After a number of years, old Bitcoin hardware simply isn't competitive.

The vulnerability of Bitcoin is well known - you don't need AI to figure it out.  It's called a 51% attack.  A newcomer would need to exceed the entire computing power of all miners in order to take control of Bitcoin.  But consider the financial incentive of someone in this situation:
(1) send themselves all Bitcoin because they can out-hash everyone else.  People would abandon Bitcoin, or rewrite the code to ignore the new cheater.  Either way, the cheater winds up with nothing for their effort.
(2) they join the existing blockchain, and get half of all block rewards, which is worth $6 billion/year at present (half of 6.25 x 6/hour x 24/day x 365 x $37k/BTC).

[LateStarter]

Alibaba planned to raise money from the IPO of its cloud business, which it called off owing to tensions between the U.S. and China.  They decided to dump their quantum computing research - not reduce, but end the entire thing.  I'm not an expert in quantum computing, but this sounds like a company with experience deciding it lacks promise when they did cost cutting.

With computing, the advances are exponential with or without the Chinese. In a June report, 20 supercomputer centers around the world reported their AI results, three of them delivering more than an exaflop. That's a quintillion or a billion-billion operations per second. I was reading how Bitcoin has a vulnerability window just waiting to be exploited. There will be a fierce race between encryption and hacking as supercomputing costs come down, access to AI becomes mainstream and the field of cyber-security will explode for sure. How can a static technology of BTC implementation keep up with all of this, I do wonder about that. I am sure there is some decentralized agency looking at it, LOL.

Quantum computing theory goes back 55 years according to Wikipedia, and actual qubit computers at least 25 years.  If the "advances are exponential" for 25+ years, why hasn't it moved beyond research projects to something useful?

"1998 ... A working 2-qubit NMR quantum computer"
https://en.wikipedia.org/wiki/Timeline_of_quantum_computing_and_communication

Are you aware Bitcoin mining uses specialized hardware?  Supercomputers aren't getting more powerful in isolation - they benefit from advances in chip technology.  The same advances also benefit Bitcoin miners, who use newer specialized hardware to get the most power for the least electricity.  After a number of years, old Bitcoin hardware simply isn't competitive.

The vulnerability of Bitcoin is well known - you don't need AI to figure it out.  It's called a 51% attack.  A newcomer would need to exceed the entire computing power of all miners in order to take control of Bitcoin.  But consider the financial incentive of someone in this situation:
(1) send themselves all Bitcoin because they can out-hash everyone else.  People would abandon Bitcoin, or rewrite the code to ignore the new cheater.  Either way, the cheater winds up with nothing for their effort.
(2) they join the existing blockchain, and get half of all block rewards, which is worth $6 billion/year at present (half of 6.25 x 6/hour x 24/day x 365 x $37k/BTC).

Exactly right.

Also, if Bitcoin is exploitable by a new tech, then all digital security is exploitable the same tech. A bad actor could wreak havoc across all digital finance, across all digital everything.

Also, the chance of a fully-formed Quantum Bitcoin Miner suddenly plugging in out of the blue seems extremely remote to me. It seems very likely that there would be time for some pre-emptive defensive action.

[maizefolk]

The issue of quantum computing has a lot less to do with mining and a lot more to do with the potential to crack the private keys of many bitcoin wallets given knowledge of their public keys.

Once you have the private key for a bitcoin wallet you can spend the money however you like. And, unlike a 51% attack, it won't be at all obvious to anyone other than the person whose bitcoins you took that anything untoward has happened. You could probably go quite a while just targeting high balance wallets from the early bitcoin era (wallets that no one has touched in a decade indicating they likely forgot the wallet existed or lost access to the private key) before anyone really noticed.

That said, achieving that in reasonable amounts of time would require quantum computers with hundreds of thousands to millions of qubits. In 25 years the number of qubits in the fastest quantum computers have grown about 500x. But we're still at least three orders of magnitude away from quantum computers that would actually be a problem for bitcoin.

[LateStarter]

The issue of quantum computing has a lot less to do with mining and a lot more to do with the potential to crack the private keys of many bitcoin wallets given knowledge of their public keys.

Once you have the private key for a bitcoin wallet you can spend the money however you like. And, unlike a 51% attack, it won't be at all obvious to anyone other than the person whose bitcoins you took that anything untoward has happened. You could probably go quite a while just targeting high balance wallets from the early bitcoin era (wallets that no one has touched in a decade indicating they likely forgot the wallet existed or lost access to the private key) before anyone really noticed.

That said, achieving that in reasonable amounts of time would require quantum computers with hundreds of thousands to millions of qubits. In 25 years the number of qubits in the fastest quantum computers have grown about 500x. But we're still at least three orders of magnitude away from quantum computers that would actually be a problem for bitcoin.

That's a fair point. I disagree that nobody would notice transactions from long-dormant wallets though. The onChain analysts would instantly be all over it with much excitement.

[LateStarter]

If I'm understanding it correctly, the selling point is that BTC or equivalents are stores of wealth where the value proposition is that it is funcitonally finite and not controlled by a central bank with the ability to adjust monetary policy. The selling point is not that it is an efficient means of conducting daily transactions.

This seems to fit a libertarian philosophy in which less control and more free market is better at the macro level. I do wonder about the implications of a meaningful amount of money shifting into BTC though since it would effectivley be out of circulation and out of use. There is a societal value in having money in circulation and being used for transactions. Having financial tools like banks that can take that money that- for an individual- is in reserve/savings and put it to use to fund mortgages and small business loans and the like is better for the economy in my opinion. Having a store of wealth that takes that money out of circulation is not a selling point for a better economy. It just feels like hoarding. Or am I missing some hidden ability of BTC to be used in these ways?

My position on this is as follows (described here in terms of what WILL happen' - just to be concise):

Bitcoin has the potential to be a complete money, ie. a Store of Value, a Unit of Account and a Means of Exchange.

SoV:
Bitcoin adoption will be an S-curve. We are well down in the lower regions of the S so it's no surprise that things are quite volatile and jumpy. As progress is made up the S, and especially as things start to flatten out along the top, volatility will reduce. This will make it a much more appealing SoV to a much wider audience. For some it's ok now, for most it's not.

UoA:
As Bitcoin's purchasing power becomes more stable, and as adoption widens, it will naturally make sense to start valuing things in BTC.

MoE:
Bitcoin is a good MoE for signicant value over distance and, especially, across borders.
For small value, Lightning/MoE use is starting in the less stable nations and will spread to the more stable. Not necessarily replacing local fiat currencies, but could crowd out weak fiats.

Depending on your circumstances it could be any and all of those things right now or it could be any and all of those things in the future as things develop along the various paths described.


For me, right now:
It's SoV and a Speculation on wide adoption and consequent big increase in value.
In the future it might become sufficiently widely accepted in my region that I use it as MoE.
In the future it will probably make more sense to me to value things in BTC, ie. use as UoA.
I have a pretty good expectation of these things happening in my lifetime.
I suggest that my adoption path generally applies to most wealthy people in stable nations.

For someone in Nigeria/Venezuela/Argentina, etc.:
It might be useful as MoE right now (vs a weak and/or rapidly-debasing fiat).
It's useful as an SoV even for short-term cash holding in a high inflationary environment.
Maybe no significant Value to Store, so limited SoV at the moment - but, maybe in the future . . .
Likewise UoA.
I suggest this adoption path generally applies to poor people in less stable nations.

Everyone will choose their own adoption path, and all will be different. It will probably be somewhere between the 2 examples above - and most people reading this will probably follow something like my path.


I think the 'hoarding' thing is overblown.
Bitcoin will probably ultimately approx. track global GDP, so big gains won't last forever.
It will still be possible to profitably lend money; either via a trusted bank, or maybe p2p lending takes off, etc.
It will still be profitable to invest in good businesses.

I have every confidence that even the richest die-hard HODLers will want to live well and reap at least some rewards rather than hoard their gains and die mega-rich while living on a pittance. Mustachianism/frugality is even less popular than Bitcoin in the mainstream !

[waltworks]

We need a drinking game for how many times we can go through the same set of arguments.

Actually maybe we don't, I spend enough money on beer already.

-W

[Glenstache]

We need a drinking game for how many times we can go through the same set of arguments.

Actually maybe we don't, I spend enough money on beer already.

-W

And if people talk past each other, you drink a double.

[Telecaster]

If the worst you can say about coinbase is that they've had to pay a fine to regulators (like almost any bank of any significant size), that's sounds like pretty good news to me.

Do you see the logical fallacy here?

[MustacheAndaHalf]

The issue of quantum computing has a lot less to do with mining and a lot more to do with the potential to crack the private keys of many bitcoin wallets given knowledge of their public keys.

Mining, private keys, bank security and government secrets all involve cryptography that - in theory - quantum computing could crack.  In practice, it has been stuck in research labs for 25 years.

Once you have the private key for a bitcoin wallet you can spend the money however you like. And, unlike a 51% attack, it won't be at all obvious to anyone other than the person whose bitcoins you took that anything untoward has happened. You could probably go quite a while just targeting high balance wallets from the early bitcoin era (wallets that no one has touched in a decade indicating they likely forgot the wallet existed or lost access to the private key) before anyone really noticed.

Moving Bitcoin out of Satoshi's wallets would quickly become the leading story on every crypto website.  Targetting early, untouched wallets is actually the worst approach to avoid attention, as people monitor those addresses constantly.

In May, IBM funded $100 million USD of quantum computing research at various universities.  I don't follow how someone secretly passes up well-funded existing research in quantum computing and keeps it 100% secret.

[MustacheAndaHalf]

We need a drinking game for how many times we can go through the same set of arguments.

Actually maybe we don't, I spend enough money on beer already.

-W

"Who's we, sucka?"
https://www.youtube.com/watch?v=4Y16Tzksgko

Or maybe you oversimplify the arguments - in which you're not participating - and that's why you think it is the same argument.  Please remind me of the last discussion of quantum computing hacking Satoshi's early wallets.

[maizefolk]

The issue of quantum computing has a lot less to do with mining and a lot more to do with the potential to crack the private keys of many bitcoin wallets given knowledge of their public keys.

Mining, private keys, bank security and government secrets all involve cryptography that - in theory - quantum computing could crack.  In practice, it has been stuck in research labs for 25 years.

That seems like a weak argument.

The first perceptrons (artificial neural networks) were created in 1958. As recently as 2014, just getting a computer to figure out if a bird was in a picture or not was extremely difficult if not impossible.

So I'm sure that in the ten years after 2014, neural net basted artificial intelligence won't change the way we live in any noticeable way. After all, at this point it has been stuck in research labs for 56 years.

Note: This isn't an argument that quantum computers will change the way we live dramatically. It is an argument that given technology being stuck in research labs for decades isn't convincing evidence to conclude the technology won't change the way we will dramatically.

[tasimo]

At least blockchain development is more educated in cryptography and has active development into quantum resistance. There are chains that advertise being quantum resistant, though I’m not technical enough to understand it. I’m aware of hashgraph having post quantum resistance for hashing and encryption, but not for consensus or key signing. 

https://www.theqrl.org/the-future-of-post-quantum-resistant-blockchains/

[LateStarter]

If the worst you can say about coinbase is that they've had to pay a fine to regulators (like almost any bank of any significant size), that's sounds like pretty good news to me.

Do you see the logical fallacy here?

I only see a levelling of the playing field and a little sarcasm.
The fallacy was holding Coinbase to a higher standard than that typically attained by financial institutions.

[Telecaster]

Not quite.   Coinbase was held up as the least shady because it had only laundered money, not stolen it.  The fact other financial institutions have been caught with the same bad behavior doesn't excuse Coinbase.   The standard shouldn’t be “just as bad as someone else.”   After all, there are plenty of financial institutions that have never been fined for money laundering.  I bank at one.   

[waltworks]

Which major banks have been fined for money laundering?

Or heck, what smaller banks/credit unions?

I'm not saying I don't believe it, but I just don't follow these things so I'm curious. Seems like there at least should be lots of banks without money laundering problems available to hold my money given how many there are.

-W

[maizefolk]

Which major banks have been fined for money laundering?

Or heck, what smaller banks/credit unions?

I'm not saying I don't believe it, but I just don't follow these things so I'm curious. Seems like there at least should be lots of banks without money laundering problems available to hold my money given how many there are.

-W

A modest correction. The post that started this discussion was a link to a news article in which coinbase was fined for not initially having strict enough anti-money laundering provisions, which they had since addressed.

I agreed that sounds bad even with the correction. As a check for how unusual that was, I took was I guessed was the same strategy used to find that article (google NameOfCompany + "money laundering") with the three biggest banks in both the USA and Canada and found similar stories for all six. The key point is this was just going down the list from largest on down, not cherry picking specific banks that worse than usual.

If you can plug NameofCompany + "money laundering" into google news search and find stories about almost any large* financial institution paying a fine at some point, then the fact a poster was able to do that for a particular crypto-exchange isn't a very useful datapoint in trying to identify which organizations are corrupt or untrustworthy.

*I agree there are almost certainly lots of credit unions and small local banks where the same approach would fail. I don't think that is a valid apples-to-apples comparison. Both because the task of compliance is easier at local institutions than multi-national ones and because the SEC/FDIC/DOJ are all going to prioritize enforcement at larger banks with the potential to both have a bigger impact and generate larger fines.

[waltworks]

Yikes, I guess there is a lot of that!

Thanks Maizefolk!

-W