What's wrong with Bitcoin, and can it be improved?

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Not to enter the debate here but just to add that … with paypal and visa moving to adopt BTC (and other cryptos down the track), as payment options - wherein you keep the BTC as a store of value on their network and then use it to pay for goods and services at businesses that their networks are connected too … this bodes very well for BTC, not just as a store of value but as a form of money.

While I believe that SaNT’s are technically much better, getting people to move to new networks is hard and will take a lot of time - sure they may all be using SN to store data and to farm … but that’s a far cry from using it as money in the general economy AND I think most would agree that it can be reasonably argued that governments are really not going to like SN or SaNT’s and may work to prevent them from being integrated into intermediary networks like paypal/visa.

That doesn’t imply that SaNT’s will fail as a means of payment long term … just that depending on the actions of forces we have little to no control over, it could take a long time and we may have to build a lot of infrastructure on SN in order to bypass those who won’t like the huge competitive advantages of SaNT’s and the direction they (and SN) will move society in the longer term.

BTC can and will be improved over time. The BTC devs move very conservatively though, so I don’t think many changes will happen very quickly - in short it will not keep pace with newer technology IMO.

Is BTC “digital gold” … ATM, it seems the closest analog and given financial markets are slow to change, I believe it will probably remain the closest analog for at least another decade. During which time, it’s growth will probably IMO see it move higher than gold’s marketcap - thus cementing the analogy.

Speaking in terms of multiple decades, or hundreds or thousands of years is not worth the effort IMO, as technology beyond our current imagining is likely to manifest over such scales. Hence I don’t think BTC or SaNT’s will reign for too long … if we are lucky SaNT’s will be around for 50 years or more … at least that is my hope.

BTC will maintain some value for a long time to come as well, but just as gold is losing it’s luster for investors as BTC’s star rises, so BTC will have the same fate. Does that mean it loses it’s stance relative to the dollar though? Not at all. Fiat’s collapse is practically guaranteed - as history shows all fiat eventually fails, so BTC, SaNT’s, etc … relative to fiat - all to the moon and then infinity beyond in terms of fiat value. At some point we will have to start seriously measuring them relative to each other and no longer against fiat.

Have I rambled enough … probably so.

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Betamax was technologically superior to VHS but VHS won the market. The best technology doesn’t always win. Sometimes belief is enough.

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Need to watch this one though. I dug into this and yes what you say is 100% correct in terms of the tape head. BetaMax went on to be the choice for high quality video, making movies etc.

What happened was BetaMax was limited to approx half a movie. VHS heads were able to eventually “fit a whole movie on a tape” and this was the winning element of the vhs/beta wars!

So betamax was the “best technology” in relation to quality of recording/playback.

VHS was the best technology for user adoption.

Many marketing folks use the vhs/beta thing to say best tech is not important, it’s all marketing etc. etc. and that in itself is just marketing itself, but marketing the marketing industry (with bent truth).

It’s one of my bugbears when I hear it :slight_smile:

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As things currently stand, arguing against bitcoin seems daft.

It may not be the fastest or most scalable for every day transactions, but many miss the fact it:

  • will always be the first,
  • will have been running the longest (giving people the most trust)
  • has been designed to go up in value (in a world with endless money printing and deflationary technology)
  • is becoming very easy for everyone to buy (average Joe to huge corporations)
  • has over a trillion dollars market cap (10% of gold)
  • has over $50 billion in daily volume
  • is probably the most secure blockchain.
  • almost everyone in the world has heard of it
  • is becoming a hedge against inflation for huge companies and individuals in a perfect storm scenario of high global inflation

For another crypto currency to get all them attributes and levels of early adoption is not easy, and any other coin, including ethereum is a long way behind it.

With Tesla, Morgan Stanley, PayPal, Goldman Sachs, Visa etc all moving in on BTC in a big way the game is over fighting against it. It’s here to stay, and it’s just a watch and see how much it can get adopted now. I’m predicting central banks will eventually hold it as a reserve asset.

One thing I think we should learn from bitcoin is that the huge force of greed can massively speed up adoption. It is one of the biggest drivers of world capitalism. Satoshi was very clever in realising that, and also timing the halvings just before the USA elections, which in history has shown recessions usually come just after that time.

We may think adoption will come of the safe network for its privacy and freedom use cases, but we also want adoption to happen quickly which will give those that want to fight it very little time to work out what is happening, and by the time they do it will be too late. I’m assuming the bigger the network the more secure it will be too? So technically it may also makes sense to grow quickly?

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I’m trying to get people used to the idea of saving in crypto.

I don’t think you need to put a large amount in to crypto monthly to out perform what the banks offer.
Maybe a maximum of £50 per month, and as fiat is designed to fall in value long term that £50 will be worth much much more.

Countries with unstable local currencies used to save in dollars or the German mark, I think crypto is now that safe haven for all of us.

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also timing the halvings just before the USA elections, which in history has shown recessions usually come just after that time.

I hadn’t heard that before but you’re right - 3 times more likely according to this article.
Seems to be a pretty strong correlation with Republican wins too.

image

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The point still stands though. Bitcoin doesn’t need to be the best technology to be a winner.

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I agree, but over time I am not so certain? I feel we do evolve and find the most efficient ways over time.

What I am not clear of is there a precedent for a worse technology (for it’s purpose) to succeed?

BTW I feel this goes for all invention/tech, so I include Safe so not to be pro/anti bitcoin.

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Bitcoin’s death spiral is technological. Proof of work is a race to consume more energy and as the price rises this intensifies. Maybe that will level off at some point - because cost of energy balances rewards, but it is already unsustainable at very low performance and scale.

Bitcoin cannot scale using the current model, hence the moves towards intermediaries and hypothecation. If you still regard that as bitcoin, then yes it will be around for a long time. But that would be BINO (bitcoin in name only) :wink:

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How much energy have we used to mine gold to date. How much will we use to continue mining it?
I think bitcoin stands a better faster chance of going green.

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I agree but I think bitcoin has become less about the technology and more about a store of value. I only talk about it as a store of value/energy because I don’t think it will be anything else for all the reasons you give.

Gold was inferior to fiat in many ways. Hard to move, hard to split and hard to secure but gold was adopted by enough people as a store of wealth over the long term.

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I do cringe a bit when anyone describes Bitcoin as a store of energy though, it may be a lot of things, but it’s not that.

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Is there any evidence that bitcoin has reduced gold mining? Mining gold will continue just the same; but bitcoin energy requirements run in parallel.

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I was not suggesting that it has reduced gold mining.
I have yet to see a comparison in energy consumption.
Everyone piles in on bitcoin using too much energy.
I’d love to know how much energy goes into gold.

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If I can store purchasing power into the future then I’m storing energy. I use my energy to earn money and I store that energy in bitcoin/gold or whatever is a store.
I can then use that energy to pay a person to use there energy. If you hold fiat the energy value goes down. Maybe it’s an engineer’s thing but I like that viewpoint

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Hypothetically speaking mining gold gets more expensive over time and as the cost of gold mining is covered by the price of gold … if BTC prevents the price of gold from rising as fast, then the ability to continue to mine gold decreases over time … hypothetically.

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It’s a point worth considering, and I don’t know the answer. It doesn’t though affect what I’m calling the death spiral.

In bitcoin there is a built in incentive but only to use more energy to mine it as the price rises, but to use the maximum amount of energy (to maximise chance of rewards through PoW).

The problem there is twofold. Firstly you do as much work as possible (expend maximum energy), secondly if there were massive improvements in efficiency of solving those calculations, the technological advance can become a threat to bitcoin itself, to the mechanism which secures the data. If solving cryptographic puzzles becomes much easier, bitcoin becomes less secure.

This is the most fundamental issue, but there are others. Centralisation of mining, difficulties with scaling etc.

P.S. I agree that bitcoin Safe etc will probably not be around for thousands of years, but that also means they are not digital gold.

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No you’re not. Bitcoin is literally physically incapable of storing energy.

This argument comes quite a bit, and its an odd one. It goes something like, “miner in country X mines bitcoin using up some energy, then sends it across the globe as BTC to person in country Y, who cashes it in for the energy.” Energy stored and transmitted!

Except it’s not. The person in country Y still has to have that energy generated locally somehow. So energy is generated in X and Y locations.

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Yes, so the genius of satoshi wasn’t just the invention of the decentralised blockchain, but also understanding world economics and human psychology, giving it the best chance to succeed.

Just look at the timing of the covid crises and economic turmoil that’s happening now. The BTC halving was almost bang on the money. It’s almost like satoshi was from the future.

And we may bash BTC but it has provided pretty much all of the crypto space a way to fund and attract money in. Without it, I doubt we would be here right now.

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It’s not a way of storing energy, but a way of controlling future energy use (among other things such as human labour).

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