Topic: Dear Satoshi Nakamoto - page 2. (Read 3733 times)

You don't get my point absolutely

Let's assume that you have 1000 users and just 1 bank (or a payment processing company like MasterCard) that processes payments. If the number of users increases 1000x and reaches 1M the processing capacity of the bank will likely get quickly overwhelmed. Even if it doesn't, the same 1 bank will have to process 1000x more transactions. Now imagine that 1 of every 10 users can process transactions in a decentralized way, and what will happen if the total number of users increases the same 1000x. The processing capacity will increase just as much since the scalability is built in (this is the crucial point here) in the system itself and it comes at no cost at all since the same 1 user will process transactions for the same 10 people as before


You talk as if you have been frozen for the last ten years, and when you are told about Bitcoin, you say that it is impossible

He's still actively involved in the community, just under a different aliases.

Well, central control is usually an advantage when it comes to scaling.  Central control, and distributed treatment, is usually the most scalable solution.


Huh ?  It is up and running for years.  How many people have credit cards, bank cards, things like that ?  Any decentralized solution can always also be implemented easier and cheaper by a distributed, centralized system, because there are central points of trust, which resolve a lot of issues that are difficult to solve in a decentralized system.  So it is almost a theorem that if a decentralized system can attain a given performance, a similar, centralized distributed system can reach the same performance.


I have the surreal experience here that you are explaining that what is happening every day, cannot happen and will be too expensive ?  Most buying online *is already* done with normal banking.  All of Amazon's business is pure credit card stuff.  Hello ?  It *will be too expensive* ?

You don't see the forest for the trees

Payment cards are as centralized as anything that comes from a single company. The final settlement of payments made via such cards still takes a few days, you should not forget that. And this system is not as scalable as many erroneously think. It cannot be smoothly scaled up with a lot of new users joining the system. And what is most important here, scalability is not an inherent and integral part of the system so it will be expensive. You would need more banks to scale up efficiently. It is different with Bitcoin since potentially every Bitcoin user can set up a payment channel. In this way, the system becomes even more scalable with further expansion. In other words, scalability is built in and this is really fascinating. This is the concept of money accomplished in practice

Well, that's already what happens essentially with credit card payments, so what would move people to leave those for crypto ?  One always talks about the internet revolution, but there WASN'T such a network in place, and internet offered a lot of totally new possibilities to people. 

I see it like PC systems.  Windows rules, and there was also Apple.  When linux started to become usable for non-geeks (early 2000 or so at best), the place was taken.  Linux didn't overtake the PC.  I use linux at home and everywhere, but I'm pretty much alone.  Linux broke through because there was an entirely new application world, mobile devices, and it got there through a centralized industrial force: Google with android.   People are much much more wary with financial stuff than with their PC.  The law is much more wary with everything financial than with your PC (for the moment).  In other words, I think the place has been taken, and it is a firmly held place by the most powerful forces in the world.  Crypto doesn't offer much to the mainstream that isn't already provided for.

You can say, my credit card costs some money. True, but you do get a service in return, from legal protection, to insurance, to a legal framework that you can turn to when you think you are being scammed.  As I said elsewhere, what banks take, is small beer to what the state takes as taxes.

So I don't see crypto go mainstream as a means of payment.  Most people around me know of bitcoin.  I'm not aware of anyone wanting to use it. It is not that they never heard of it.  They simply are at best, neutral with respect to it, but most are outright hostile about it.  Most say it is to do things that are illegal, and I'm one of the few people who is actually a proponent of illegal things.  Most people in my environment are openly hostile to anything that is illegal or could give the means to do illegal things even if not intended that way.

But could it actually come that way in the end?

As to me, the major Bitcoin drawback as of now (barring rogue miners of course, but they are conceptually rogue, not technically, which is what I'm concerned here with) are slow confirmation times and high fees (let's assume miners have nothing to do with that), so if we remove these hurdles and make transactions ping-time fast as well as scalable without limits and cheap as dirt at that (or even cheaper), we would see a spike in real world usage of Bitcoin. Right now you make a payment, pay a sizable fee, and then wait, wait and wait till your payment finally comes through

I really don't think that most people HODL bitcoin for "saving", that is, keeping the same value over a long time (maybe with a very modest increase).  "putting aside for later".  I think most people hodling bitcoin do so because they expect/hope for/ a spectacular rise in price "when bitcoin will replace he world's gold" or "when bitcoin will replace the world's fiat", because "only 21 million coins for all that wealth, makes for a huge price, hell, with my 20 bitcoins aside, I'll be almost a billionaire !".

In fact, this is the wet dream of re-living what early adopters of bitcoin could see: from 10 000 BTC for a bloody pizza to $1000 for a BTC !  "imagine I was the guy selling the pizza !".  The belief that "it is still just the beginning" and that still a big factor is in view (when all the gold will be replaced by bitcoin, or when all fiat will be replaced by bitcoin, when bitcoin will be the world's mainstream currency).

That's not how I saw my "savings account" when I was young.  I wasn't expecting when I put the equivalent of $20,- in it, to be one day a millionaire.   I really don't think that most people buying bitcoin, want to get out "about the same buying power they put in - saving" 20 years from now.

In fact, any money which is de facto (1) backed up by some worthy asset or directly represented by that asset, for example, by gold. Europe was full of silver in Medieval times while gold was rather scarce back in the day (at least, before the outbreak of the Black Death in the mid-14th century when both metals heavily lost their value due to total population "depreciation"). So people were using silver as a means of exchange while gold as a store of value. Not surprisingly, that kings and other rulers demanded taxes to be paid in pure gold. They were not fools!

(1) Certainly not like the US dollar which was only de juro backed up by gold after the Bretton Woods conference of 1944

In fact, I also think that Bitcoin as it is today (with rogue miners still sticking around) is not quite on par with any decent currency specifically as a currency. That said, I don't think that LN would turn Bitcoin into something entirely alien and different. Indeed, it will be a different Bitcoin, but it will still remain Bitcoin, anyway. If what you say were truly applicable, we would already be using something which is not Bitcoin (since today's Bitcoin differs substantially from "canonical" Bitcoin as it was conceived by "Satz"). Further, I differentiate between US dollars and Swiss francs in relative terms, not in absolute value. In other words, the latter would be better as a store of value, while the former as a means of payment, but that doesn't mean that you should necessarily store your wealth only in Swiss francs. Fiat money is not a very good store of value as such due to the lack of what can be loosely called intrinsic value

Apart from transactional utility, of course

Well, when I was still enthusiastic about bitcoin, I thought that too.  Now I understood that it won't.  If ever, it would not be bitcoin, but a bitcoin-backed banking layer (LN looks like that).  But I don't think there is the slightest bit of demand or application of bitcoin-backed banking, because normal banking works quite well to do payments.


I think the only sensible monetary applications of crypto are those where fiat cannot go, is difficult, expensive, or dangerous.  For instance, in hostage taking, terrorist financing, dark markets, subversive action, secret weapon and disruptive technology development financing, free speech political actions, fiscal hiding of value production and income etc... I have to say that this is the only aspect of crypto I'm interested in, and the only aspect where I think it has true economic value.    However, I'm not sure that all of these aspects will be covered by one and the same crypto, because of the dangers that would go with that.


I'm not so sure about that.  After all, with each kind of money comes a certain policy, which you can like or dislike.  The dollar is the de facto world currency, which means that you would *denominate prices* in that currency, but that's not necessarily the reason to USE that currency.  Of course there is a certain friction in exchanges, but on the other hand, a monetary system is a belief system, and beliefs may cost some (friction) money.


I don't think so, because long term investments are not "money".  They must have an economic backing, like a company that produces value (stock), or real estate or something that is backed by that (derivatives).     A monetary asset that only serves as a store of value, is most probably a bubble (I think most crypto is).  That said, it can be a slow bubble.  This, in a difference with a true currency, where Fisher's formula sustains its value (the demand for it, in order to be able to PAY FOR STUFF, is what gives it value) ; or, in another way, where the economy that uses it, is in a way "backing" it.  If people's salaries, if grocery prices etc... are not only *expressed* but also *paid* in that currency, then the value of this is what makes up (through Fisher's formula), the market cap of the currency at hand.
Of course, you can, as a side effect, try to use a part of that currency as a long term store of value.  The Swiss franc is, in other words, backed by whatever you can buy with Swiss francs (the Swiss economy, including its banking), and the fact that the Swiss government is not very powerful, with the Swiss direct democracy, so there's little chance that politics in Swiss screws up the Swiss national banking policy.  This is also what makes the Euro a quite good currency: the fact that many states use it, make that the individual political influence on the European central bank is limited.  The Euro would become much weaker, if there were a stronger European government.  The US dollar is strong because even though it is highly politicized, it works still as a world reserve currency, and especially, you buy oil with dollars.
But nobody is using nor dollars, nor Swiss francs, as a long-term investment.   (as a store of value, to hide it from sticky fiscal fingers, yes, until recently the Swiss franc served at that, but that is because it is dark money mostly - what I thought was going to be replaced by crypto).

A currency, though, that is "backed" mainly by "store of value in the long term" (and not, where this store of value is a side-effect from the value of that currency as a real currency) is, in my opinion, most of the time, a bubble.  The only thing that is not like that, throughout history, is gold.  But gold is special.

That's why I'm mostly referring to future

Namely, when Bitcoin becomes money (if ever). In other words, only one cryptocoin (at max two, at best three coins) can become full-fledged money. If there were a free market for all money existing right now out there (i.e. without artificial limits and restrictions imposed by national governments), we would quickly move in that direction as well. So, in a few years, we would likely have the US dollar as a means of payment ("bad" money in Gresham's terms) and the Swiss franc as a store of value ("good" money). Obviously, until the respective governments decided to devalue these currencies

This is true, and all crypto I know of is of the "store of value" kind because of their deflationary emission schemes, but given that they are a riskier store of value than classical stores of value like gold, real estate, stock, etc... they also become "investments with high return" (if there is risk, there must be return).  However, there being no intrinsic value creation in a crypto coin (in fact, if it is a PoW coin, there is only value FLOWING OUT), it becomes only sustained by newcomers flowing in: greater fool game.
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Well, this is obviously empirically not the case, apart from the historical case of gold. 

The empirical proof to the contrary of your thesis is here:

http://coinmarketcap.com/charts/#btc-percentage

The reason is that bitcoin, and most crypto, is not money.  It is "greater fool" game for most of its market cap, the "money" part of it is really, really tiny.  And in a greater fool game, what counts is the upward belief space, versus the downward belief space.

So in this kind of game, the higher is a coin, the lower is its upward belief space.  The belief in "a factor upward of 100" for bitcoin becomes harder to sustain ; but a factor 100 upward for litecoin, for instance, is easily understandable, it would be only 2.5 times more than bitcoin now.   Of course, you can take an obscure coin down the list, and then its upward room is potentially higher, but its chance to go to 0, too.

As you go up the list in coinmarketcap, you have less and less upward room, but less and less risk that it goes totally to 0 also.  When you go down the list, there is more and more upward room, but chances that you will end up at 0 increase, too.  So somewhere around the 10th position must be the "best gambler's coin": not a total shitcoin that will disappear, and still small enough to have an upward force.

The higher you are in the list, the more "secure" (in the middle term) is your "investment", but the less hope there is for the kind of spectacular riches that the early bitcoin holders had.  What keeps crypto still up, is this dream, of what happened once, the early adopters of bitcoin that bought thousands of coins for some shit, and are now millionaires.... it will take several years before people realise that that was a once-in-a-lifetime happening, and it is this illusion that pumps up most of crypto for still a while.  So the higher in the list, the less incentive there is to gamble on it. 

So as long as crypto is driven by greater-fool dreams, more and more coins will get pumped against the ceiling where the dream of cheap coins that will make me rich in 10 years, starts fading away.

My impression is that bitcoin is slowly reaching that ceiling.  It can still move up, but not as fast as those beneath it.  When the first in the cue go slower than the rest, you get a traffic jam

Crypto is not money.  It was set up to be money, but it is hardly money.  It is mostly a gambler's token.  Because most crypto is based upon sound money doctrine, which induces deflationary spirals ("price rise of coins") and gambling.

Bryan narrowly avoided a class b felony 10 year prison sentence for running Seals with Clubs. Nevada gaming raided his house and confiscated his computers. After that he ran to Antigua with his wife and kid. He had to return to Nevada to live, pay a $25,000 fine and serve a probation term. If he breaks probation he will end up in jail. I expect he's still in Nevada serving out his probation.

Edit: From what I've been told FreeMoney and Bryan Micon are not the same people. The above is not what happened to FreeMoney.

In some of the very old posts being discussed in this thread I saw some old posts by FreeMoney.  Does anyone have any idea what happened to him?  Since this is off topic you can respond to me in IM if you think that would be better.

As I see it, there can be two basic types of coins

Since there are two primary functions of money which are mutually exclusive. These are the exchange function and store of value function. It is conceptually impossible to combine these functions in their pure form, without compromising either of these functions. If someone tries that the result will be neither here nor there. So we could have two major coins, one for circulation, the other for holding. They could be conditionally called as "bad" money and "good" money (according to Gresham's Law). Obviously, the "bad" money will be used for daily expenses while the "good"one for holding your wealth in and paying for expensive things

whether satoshi nakamoto still alive? If yes where can I find it?
about altcoin and bitcoin. why you do not agree with altcoin. If you have any solution how to get bitcoin? Please let us know your great idea

I agree somewhat.
People are used to only using one currency, their local currency, and might only use another currency when they go abroad. Multiple payment cryptos are a hard sell for mass adoption.
There are other crypto's that provide a useful service beyond a mass consumer payment service. People might buy these coins when they need the service that these crypto's provide. That's not going to be the mass populous.

Only one shall prevail

I remember I had been discussing this issue with someone, though this is unlikely to be you. I basically claim that in the long run there will necessarily remain just a tiny group of coins even if we assume a free market competition between them. How come? For example, some folks love Rembrandt, others dislike cordially Bosch, but both are well known and famous. This is understandable, but this is not applicable to money simply because money is purely utilitarian. In other words, some may love Dash of its name, some may hate Bitcoin exactly for the same reason. But as the proverb goes (and here it fits absolutely), when money talks bullshit walks. So people will just stick to most popular coin, while the rest will get quickly abandoned and forgotten