Yeah, it's a privacy nightmare. The exchanges refuse our money if it has ever passed through a privacy service and they continue to track what we do with it even after it's been withdrawn from our accounts. Nice to have a collection of examples I can point to whenever someone says bitcoin is fungible.
It makes no sense to me how bitcoin is still number one cryptocurrency despite it's garbage fundamentals. Failed at everything it was supposed to do.
Because the intersection of the stated goals and the actual goals is essentially empty. The actual goal isn't to be useful, it's to make the early adopters rich.
It's such a bizarre industry because I think the technical issues are really interesting and the potential for cryptocurrency is huge, but in practice it's 99% about speculators trying to get rich quick. That's really boring!
"The technical issues are really interesting" is how you know it's a scam. It's like working for Facebook; they keep everyone interested by having them write unnecessary but interesting projects like new build systems and new PHP runtimes. Except that every contribution makes the price of ETH go up, and FB pays you.
It is, but there's probably more actual interesting development and design activity going on than you realize.
There's simply a real discovery problem, because of the aforementioned gold rush. Participants have too many incentives to bury accurate information that speaks against their investment, spread misinformation that embellishes it, suppress information about projects they want to invest in but didn't yet, ...
The argumentation of typical crypto fan is like the motte and bailey fallacy mounted on a helicopter rotor, constantly oscillating between some noble goals (decentralisation, freedom, privacy, anti-inflation, anti-fractional banking) and the "have fun staying poor" snark.
that's an ignorant statement. There is a ton of development and deployment happening to make the Lightning Network be a high-throughput, low cost way to move bitcoin around the world. A lot of people are working to make bitcoin more useful to more people.
To be fair, we have given Bitcoin more than enough time to mature into the ideals Nakamoto had envisioned. Can we just call it a failed project and move on to cryptos that actually deliver on the promise.
> It makes no sense to me how bitcoin is still number one cryptocurrency despite it's garbage fundamentals. Failed at everything it was supposed to do.
It doesn't matter that bitcoin failed in everything it set out to do (and more) because people don't "hodl" bitcoin for the things bitcoin set out to solve. They do so because the want to go "to the moon". If your only interest in crypto is speculative investment, then you aren't interested in the fact that bitcoin is broken beyond belief: The important thing is the market-recognition since that maximises the chance for high demand, which induces hyper-deflation, which sends you to the moon.
Nobody, or very few people, care about crypto for any of its features and the people that tell you they do probably "hodl" substantial amounts of crypto and hope to drag you into the pump.
There's not a single problem crypto solves without inducing a new party with equal amounts of leverage (i.e. you don't need VISA, but you do need exchanges) because at the end of the day, crypto is built to change the people that control the money rather than remove control structures entirely because that's impossible: there are always going to be people that facilitate the interaction of the blockchain with the real world and these interpreters/resolvers are the powers in crypto.
However, that doesn't matter: nobody buys crypto the currency, they buy crypto the investment and from that POV bitcoin is still the non-plus-ultra in speculative hyper-deflations.
> crypto is built to change the people that control the money
Yep, crypto is a revolution being staged to replace the establishment (central banks and traditional finance) with a new one (crypto/defi founders and adopters). The goal is to use the new marketing to draw people to the new system and become the new rich. The earlier and more you buy into it, the more incentive you have to spread the word.
This is why it makes sense to rebuild everything in crypto despite it being less efficient. It needs to be done, so that the new system (that replaces all parts of the old) is ready for people to be drawn into it.
its less efficient because decentralized things are less efficient by design. they sacrifice efficiency for the authoritiless nature. That is the goal - to remove authority from money. Money should just exist and have rules and thats it. That's what cryptocurrencies are.
to me, its that even if what is happening is that some new ruling class is being established, the difference is that the new ruling class won't be able to fundamentally change the rules anymore. Currently our monetary system is managed by rooms of Very Smart People that can change things at a whim and the cracks are starting to show.
but yeah, things are interesting though.... there is a recent upswell of proof of stake, which is just central banking all over again. So the new system might end up looking the same as the old system if these PoS coins become more common. The difference is though is that bitcoin is unstoppable. Like, its price could be 40k, its price could be 400k. The protocol will still work. The old system has no choice but to adapt or whatever.
If you compare to Monero, you see that Monero isn't even allowed on these exchanges. So, it seems that you can't really have privacy combined with high exchange liquidity.
Monero is on Kraken US. Coinbase and Gemini, acting as companies choosing to add the coin they're mutually invested in Zcash instead of Monero, is a dumb indicator to use of what's "allowed," especially when there are obvious compliant examples in the US (Kraken, DV Chain, etc).
Not answering to the question, just correcting your last phrase:
Uniswap has wrapped monero (WXMR) which is not quite the same as Monero, and with a ridiculous liquidity of ~200k$ currently (https://geckoterminal.com/eth/pools/0x14c10b4bdccd9d3f8940fb...)
From what I've understood, coins are wrapped to enable cross-chain movements. Let's say you have X BTC, but you want to take advantage of ERC-20 features. You can "move" your BTC to Ethereum blockchain by depositing your X BTC in Wrapped BTC (WBTC) smart contract. It'll lock your BTC, and give you the equivalent amount of WBTC tokens, which are ERC20 tokens on the Ethereum chain.
Wrapped tokens enable use across otherwise incompatible blockchains.
Wrapped tokens are facilitated through a bridge. The bridge contract(s) lock the tokens on one blockchain, and re-issue wrapped tokens on a second blockchain. At a 1:1 peg.
That way the wrapped tokens can be used in Defi or Dapps on the second blockchain, and later (if desired) sent back through the bridge to be “unwrapped” into their original form, on the original blockchain.
Just note that for now, most of those bridges are custodian. AFAIK at the moment the only trustless one is RenBTC. The more popular WBTC and others are essentially just some trusted entity issuing IOUs when you give them your BTC.
It really does seem like the main purpose Bitcoin is succeeding at is sort of a digital gold. It's not good as cash, privacy, or anything else. Lightning seems like a joke compared to the types of efforts happening on Ethereum.
Appreciate this thorough analysis of problems with cryptocurrency.
In what way is Lightning a joke compared to what's happening on ethereum? People are using Lightning to get more remittance money to their families, while over in ethereum folks are speculating on jpegs and yield farming ever-more-unsound token schemes.
Can you expand on "Lightning seems like a joke compared to the types of efforts happening on Ethereum" ? I was just in El Salvador and Lightning was a faster and more convenient experience than credit cards...
To answer your question, what I've read about Lightning it sounded convoluted. The need to have a watcher keeping a channel open, invoices, just seems overly complex. I have tried receiving sats from online Lightning faucets and that part was impressive.
Ethereum's L1 growth and improvements seem more logical to me.
Is there a good place to go to track the adoption of Lightning?
Kind of strange to call Lightning convoluted and then cite Ethereum as a foil. Lightning is much simpler than what Ethereum is trying to do, and evidently so when you compare progress on each so far.
Lack of fungibility makes Bitcoin worse than gold in that area. Gold doesn’t have a “permanent record” like Bitcoin. It’s more like a virtual deed to a plot of land that you can’t rent or use
As gold price increases, more mining can be afforded. This helps stabilize its price because of increased supply.
As BTC price increases, more mining is still afforded, but this does not result in an increased supply and stabilized price, only in unmitigated high price and more energy spending.
One project I'm following is Aztec Protocol. It's an Ethereum L2 (so faster & cheaper transactions, similar to Lightning) but it supports any Ethereum asset (ETH, USDC, WBTC) and is fully private.
The only thing that goes for Ethereum is the fact that it's used for creating worthless numerous other pump and dump crypto currencies on top of its blockchain where Shiba Inu is the latest glorious example. Solves nothing, serves no purpose but increases the demand for Ethereum transactions which ultimately drives the cost of Ethereum. All those poor sods who have invested in Shiba Inu? Plain idiots to put it mildly.
Oh, and NFTs as well. Another worthless crap just to create more Ethereum transactions. Why worthless? Because ... Ethereum is just one of multiple crypto currencies/block chains and tell me again why your particular NFT on top of Ethereum is worth more than the same object on another blockchain? And how many times can the same object be (re)sold on all other blockchains? Do you need to own all of them? Or Ethereum NFT is somehow better?
No affiliation with Aztec, but it's absurd to lump them in the same bucket as Shiba.
> pump and dump crypto currencies
Aztec has been in development since 2017, and has solved some real problems in cryptography in order to accomplish their goals. Besides, it doesn't have its own token, so there's nothing to pump.
> Solves nothing, serves no purpose
It allows Ethereum users to transact in private.
> but increases the demand for Ethereum transactions which ultimately drives the cost of Ethereum
It does the opposite, since it's a rollup - the transactions happen off-chain.
> It makes no sense to me how bitcoin is still number one cryptocurrency despite it's garbage fundamentals. Failed at everything it was supposed to do.
Peer-to-peer, permissionless, trustless (i.e. not controlled by any one entity), known issuance schedule, fixed maximum supply, and unyielding consensus parameters all still hold up today. Seems to be doing just fine at what it was "supposed to do".
> It makes no sense to me how bitcoin is still number one cryptocurrency despite it's garbage fundamentals. Failed at everything it was supposed to do.
It hasn't failed at not being controlled by people which fiat currencies have failed completely. Do you control the inflation rate? Do you control how much currency is being minted? And tons of other things.
> Do you control the inflation rate? Do you control how much currency is being minted?
Exchanges are essentially banks. They offer bitcoin loans, essentially creating new coins out of nowhere. Fixed money supply is utterly powerless before the inflationary power of debt.
Like a marshland for tidal water, stock is best inflation hedge working by sponging the overflowing inflational liquidity, and no wonder that Bitcoin behave similarly.
> stock is best inflation hedge working by sponging the overflowing inflational liquidity, and no wonder that Bitcoin behave similarly
Agree on the mechanics. Equities are a classic inflation hedge. But the reality is that if three people, in the last year, attempted an inflation hedge, one with TIPs or Series I bonds; one with equities; and one with Bitcoin, the last gained little over the middle. Both likely lost value relative to the first.
If your inflation hedge loses value during inflation because the Fed will raise interest rates because of inflation, yes, there were external factors at play, but no, they’re not to blame, you hedged badly.
I disagree with your assessment that Bitcoin is worthless:
1. Can't get any better for money laundering, just add a sprinkle of Tornado Cash or whatever your favorite tumbler is today.
2. Great speculation token on a par with gambling. Gambling is not illegal as far as I know in the US. It started in Indian reservation but became legit quickly when they cut a deal with each single state (so they can collect taxes)
3. Greatest Ponzi scheme ever. Same with other currencies. Get in early, make a fortune. Get in late, get screwed.
4. Very aspirational. Millions of suckers hate their government and were ripe to gobble up anything that would get them out of their not so exciting future.
5. Unleashed a massive amount of creativity. Just sign up to the top Crypto "thought leaders" on Twitter. Unlimited entertaining.
6. Petty crime and gangs move over, we are in a whole other league here. Rug pulls, scams,...It is just a matter of time before Crypto Bros will face a handgun in the mouth. Hand me the magic keys or we'll cut your kids fingers.
7. Plenty more to come.
(edited spelling)
> Do you control the inflation rate? Do you control how much currency is being minted?
If you're living in a democracy, you do get a say in those things or at least in selecting the people who decide those things, along with all the other voters.
There's one thing that Bitcoin does better than almost any other cryptocurrency right now, and it's being secure against consensus attacks. Ethereum comes close, Chia arguably surpasses it, but otherwise most cryptocurrencies could very easily succomb to collusion and majority attacks.
Proof of stake chains are virtually immune to collusion and majority attacks. A single actor would need to own huge amount of resources and then essentially burn the coins. To purchase such a dominant stake the price would rise very quickly... making it very unlikely to be feasible. In comparison, attacking the larger Proof of work chains only requires a few $100M in hardware (the harder ones) and a MW-scale power source used sparingly. I don't see why PoW is still used...
They are not immune at all. The security assumptions are different.
> A single actor would need to own huge amount of resources and then essentially burn the coins. To purchase such a dominant stake the price would rise very quickly... making it very unlikely to be feasible.
You are assuming here a single-sided market where the existing majority holders are not interested in realizing profits on their holdings. For many cryptocurrencies this is not the case, especially the hyped VC-funded ones.
If you are a large majority holder, selling off to a known exploiter is a very risky move. You might be able to realize great profits of the price increases. But you don't know how much the attacker has gathered from other sources. I think realistically it can happen, but a takeover attempt from buying a large stake should be plainly obvious. The community could even organize price fixing (i.e. "hold", which we've seen on WSB) to fend off the attack. You can even pull off something like forking the chain to invalidate the funds of the attacker -- it would be pretty obvious which stakeholders are responsible for the attack. For a chain where those coins are tainted or deleted from the chain.
Those avenues are not really available for PoW chains... if an attacker gets the necessary hardware, there's not much you can do. You can try changing protocol, changing algorithms, etc. but this has obvious consequences of its own (making all mining hardware so far near worthless)... it's a bit scary to be honest.
It's called "tainted Bitcoin". Basically, you can get a list of all transactions a coin was involved in since it was minted. If any of those transactions contain a blacklisted address, exchanges would refuse the token.
This is... remarkable. Many cryptocurrency advocates have promoted bitcoin by making exaggerated claims regarding fiat currency's centralized control and lack of privacy. Now bitcoin itself exhibits the very characteristics that were often claimed about fiat currency, except it's not an exaggeration.
But the hordes of clueless users who continue to flock to the platform are blissfully ignorant of that fact.
Worse, the fact that coinbase is behaving in a way that's completely violating the spirit of Bitcoin while profiting from it doesn't solve the problem that what they are doing is possible because of a severe limitation of the platform.
I am a big and very long time fan of Bitcoin, but the traceability / fungibility issue has bugged me from day one.
I really wish the dev. community would focus on introducing a fork with an technical solution to this problem instead of polishing the turd with minor stuff no one really cares about like taproot.
It did create and then prove an incredible and utterly novel and important concept.
Your downvotes are invalid.
I don't own and never have owned any btc, or any other crypto, and at this point wouldn't touch btc in particular with a 10' pole for several different reasons.
But the very concept of a distributed ledger that may actually be trusted is both revolutionary and proved.
It's collossal despite all the current degenerate uses and wasteful implementations.
Agreed. When the integrity of the chain is compromised, I'll call it a failure.
In the meantime, I'll leave it to the opinionated pissants on both sides to continue acting like they understand anything about what's to come from a system with so little precedence.
What are you expecting exchanges to do? If you passed through privacy service you need to prove that your money is not associated with crimes. It is completely your fault. I am actually happy to hear that people who are laundering money will have hard time.
On the other hand bitcoin is shitcoin. That is a fact anybody shills bitcoin is possible scammer. Anybody says bitcoin is future is retarded.
It makes no sense to me how bitcoin is still number one cryptocurrency despite it's garbage fundamentals. Failed at everything it was supposed to do.