Tuesday, December 18, 2018

Why bitcoin will survive the firey hell that fiat cannot

The other night I read a post on hacker news that just seems overly angry at the success of the bitcoin community. Bitcoin cannot, should not, and will not die in a fiery hell. There are a lot of reasons for this, and despite recent volatility there are lots of reasons why bitcoin is great.

It’s a new system, new systems tend to attract lots of hate and loathing from those who are uninitiated. In the case of the author I’m referencing I think he’s just plain jealous of those of us who are winning I’m not sure why (s)he dislikes bitcoin with such fervour. Bitcoin provides a tool that humanity as a whole has never seen before. We have never been able to build our own infrastructure at such a massive scale. In the case of finance this is something that many have dreamt of but in the end they are segregated to the kiddie pool while the big guys swim laps.

With a host of misconceptions the author goes on a tirade about how (s)he “hates” bitcoin, how anyone can really hate a protocol is beyond me. Bitcoin has many uses, both legitimate and less than legitimate. US currency is similar in many regards except that is it much more difficult to trace. I’d like to take a moment and respond to some of these inaccuracies:

“Mining BtC has a carbon footprint from hell (as they get more computationally expensive to generate, electricity consumption soars). This essay has some questionable numbers, but the underlying principle is sound.”

Funny, I’ve been mining bitcoin since before ASICS were really available… Guess what? My energy consumption has gone down with time. We’ve ever turned off or re-purposed some of our first gen rigs because they are no longer efficient enough to compete. NEXT!

“Bitcoin mining software is now being distributed as malware because using someone else’s computer to mine BitCoins is easier than buying a farm of your own mining hardware.”

Yea, yea, there’s malware in the world. It sucks. As the nerd amongst my friends I clean up a fair bit of it. At the end of the day there are many things more malignant than mining malware. I’ll even offer to bolster his case, bitcoin powered randsomware makes a fare better example.

“Bitcoin violates Gresham’s law: Stolen electricity will drive out honest mining. (So the greatest benefits accrue to the most ruthless criminals.)”

The OP clearly has never tried to steal electricity. People die trying, it’s not easy and I certainly wouldn’t risk jail time to juice up my miners.

“Bitcoin’s utter lack of regulation permits really hideous markets to emerge, in commodities like assassination (and drugs and child pornography).”

This one really boils my blood. It’s akin to saying “People to bad things with bitcoin, therefore bitcoin must be bad”. This sort of thing is horrible but it’s also unavoidable until we fix humanity. This is like solving the drug war by arresting everyone with a tainted bill. I have some, and so do you.

“It’s also inherently damaging to the fabric of civil society. You think our wonderful investment bankers aren’t paying their fair share of taxes? Bitcoin is pretty much designed for tax evasion. Moreover, The Gini coefficient of the Bitcoin economy is ghastly, and getting worse, to an extent that makes a sub-Saharan African kleptocracy look like a socialist utopia, and the “if this goes on” linear extrapolations imply that BtC will badly damage stable governance, not to mention redistributive taxation systems and social security/pension nets if its value continues to soar (as it seems designed to do due to its deflationary properties).”

And to this one I say “kindly go fuck yourself”. I am paying more taxes now than ever before. Again this is the whole good versus evil thing. It’s not about bitcoin or no bitcoin, this is an intrinsic human problem.

I hope he got a lot of traffic for bashing the bitcoin world in the skull with a ball hammer while it was already on the ground, but guess what? Prices jumped back up 25% today, will we see the other 25% in the next month? You better believe it.

To sum up the headline, my bitcoin will be here even if North America is erased from world maps tomorrow. That’s something that no other currency or store of value can do.

Market Price: $702

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