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This whole thread is interesting:

My personal WAG, at the moment, is that Elon is somehow in a Dunning-Kruger bubble (it happens even to him):
he's in love with his first-principle "model" on money (see Paypal), he thinks it's still solid and that he can transform Doge to reach that ideal model.
All of this can be true, but I'm not sure about the last part: crypto is a highly specialized domain with a lot of technicalities and moving targets.
Watch for example the founder of Ada "explaining" to him how to fix Doge:

There are tons of competitors to Doge in the field, which have tried to solve all the issues. From what I understand, Doge is very behind technologically, other coins have much better tech but of course nobody knows which ones will win in the end.
Musk, of course, has demonstrated he can do many "impossible" tasks: but not without throwing himself at the problem with all his sheer force and weight. I'll change my mind when he'll hire a great team of devs with a clearer roadmap.
We know Tesla works on technicalities with battery chemistry, or FSD. Reaching impossible tasks means grinding, a lot.
At the moment, there is no grinding at all, for Doge. Others in the field have done their homework, but not Doge.

(As a side note: I just don't understand why he's so obsessed with Doge, if not a matter of pursuing a joke/meme and proving others wrong. Doge has even a bad distribution of coins among some insiders, so it's not even a "people's coin").
 
This whole thread is interesting:

My personal WAG, at the moment, is that Elon is somehow in a Dunning-Kruger bubble (it happens even to him):
he's in love with his first-principle "model" on money (see Paypal), he thinks it's still solid and that he can transform Doge to reach that ideal model.
All of this can be true, but I'm not sure about the last part: crypto is a highly specialized domain with a lot of technicalities and moving targets.
Watch for example the founder of Ada "explaining" to him how to fix Doge:

There are tons of competitors to Doge in the field, which have tried to solve all the issues. From what I understand, Doge is very behind technologically, other coins have much better tech but of course nobody knows which ones will win in the end.
Musk, of course, has demonstrated he can do many "impossible" tasks: but not without throwing himself at the problem with all his sheer force and weight. I'll change my mind when he'll hire a great team of devs with a clearer roadmap.
We know Tesla works on technicalities with battery chemistry, or FSD. Reaching impossible tasks means grinding, a lot.
At the moment, there is no grinding at all, for Doge. Others in the field have done their homework, but not Doge.

(As a side note: I just don't understand why he's so obsessed with Doge, if not a matter of pursuing a joke/meme and proving others wrong. Doge has even a bad distribution of coins among some insiders, so it's not even a "people's coin").

Yes, even Elon can be in a Dunning-Kruger bubble, as he has shown (and finally admitted his faulty judgement indirectly live on SNL) regarding covid.

However, in this case he seems on to something.

I am not a bitcoin expert, but it seems that all (or most) of the weaknesses raised in the video also apply to bitcoin itself - old tech, slow, inefficient etc. So bitcoin does not seem the correct solution to the problems with fiat currencies.

Other coins ARE better, but bitcoin is the ONE due to mostly being first, and directed at crucial points by Satoshi himself. Thus when what seems to me to have been a very reasonable and good request to significantly increase the bitcoin block size tenfold (which would have avoided the excessive energy usage that bothers Elon), Satoshi came out of his retirement and killed that initiative. There seems to be in fact financial incentives to have a small block size, and bitcoin leaders like Adam Back (who very very probably is Satoshi) profit form this.

Thus bitcoin has numerous drawbacks (longterm showstoppers perhaps), many in fact explained in the video about doge drawbacks, but there is no will to change them. Thus Elon's frustration - he knows a crypto currency is needed in today's world, he will need one for the future Mars colony, but a much better bitcoin is needed. Doge is probably an attempt to get there indirectly, because the bitcoin community is hard set in its religious fervor. Why Doge, and not some of the other coins which have in fact addressed many of the bitcoin drawbacks (Bitcoin cash, Monero, ETH, XRP,....)? Probably to not make it explicit he plans to have a new currency leader instead of bitcoin, especially as he still does not know if it can be done/how can it be done/does he really want it done - i.e. buying time at this point. I suspect he has a team of crypto experts analysing this carefully.
 
Thus when what seems to me to have been a very reasonable and good request to significantly increase the bitcoin block size tenfold (which would have avoided the excessive energy usage that bothers Elon), Satoshi came out of his retirement and killed that initiative.
You have any source for this?

Here is a quote by satoshi:

BitcoinTalk

Re: [PATCH] increase block size limit

2010-10-04 19:48:40 UTC - Original Post - View in Thread

It can be phased in, like:

if (blocknumber > 115000)
maxblocksize = largerlimit

It can start being in versions way ahead, so by the time it reaches that block number and goes into effect, the older versions that don't have it are already obsolete.

When we're near the cutoff block number, I can put an alert to old versions to make sure they know they have to upgrade.



Imo it was pretty clear that Satoshi intended to increase the blocksize, the limit was a temporary fix to prevent spamming the blockchain back when Bitcoin was still vulnerable to this. Unfortuneately satoshi left Bitcoin(my guess is that he died) before the patch could be implemented. He handed over Bitcoin to Gavin who wrote this post:

Unfortuneatly there was coup and Gavin was kicked out by the Bitcoin Foundation who had been taken over by the small blockers. This happened when Gavin made a small mistake by posting a blog post that he had seen what he at the time thought was cryptographic proof that Craig was Satoshi. He happened to be mistaken and this was a good enough reason for Bitcoin Foundation to kick him out.
 
You have any source for this?

Yes -
(link should start at 20:16).

Basically, it is about Satoshis last known mail, in 2015, where he explicitly shot down efforts to increase block size through bitcoin XT (Gavin Andreson and Mike Hearn proposal).

According to this, the block size extension to 8Mb was killed so that the Blockstream company (under Adam Back/Satoshi according to the video) could reap in a lot more profits.

Seems pretty convincing, but of course could be completely wrong.
 
Yes -
(link should start at 20:16).

Basically, it is about Satoshis last known mail, in 2015, where he explicitly shot down efforts to increase block size through bitcoin XT (Gavin Andreson and Mike Hearn proposal).

According to this, the block size extension to 8Mb was killed so that the Blockstream company (under Adam Back/Satoshi according to the video) could reap in a lot more profits.

Seems pretty convincing, but of course could be completely wrong.
There is a lot of debate regarding that email. Satoshis other email was hacked. Then he was inactive for 4years. That other email account can be claimed by another person if it has been inactive for 1 year.

If you go back to the posts at that time it was a civil war. Many places banned every user even mentioning Bitcoin XT, so it might seem like there was consensus, but that was not the case.

Here is the mail anyway:

I have been following the recent block size debates through the mailing list. I had hoped the debate would resolve and that a fork proposal would achieve widespread consensus. However with the formal release of Bitcoin XT 0.11A, this looks unlikely to happen, and so I am forced to share my concerns about this very dangerous fork.

The developers of this pretender-Bitcoin claim to be following my original vision, but nothing could be further from the truth. When I designed Bitcoin, I designed it in such a way as to make future modifications to the consensus rules difficult without near unanimous agreement. Bitcoin was designed to be protected from the influence of charismatic leaders, even if their name is Gavin Andresen, Barack Obama, or Satoshi Nakamoto. Nearly everyone has to agree on a change, and they have to do it without being forced or pressured into it. By doing a fork in this way, these developers are violating the "original vision" they claim to honour.

They use my old writings to make claims about what Bitcoin was supposed to be. However I acknowledge that a lot has changed since that time, and new knowledge has been gained that contradicts some of my early opinions. For example I didn't anticipate pooled mining and its effects on the security of the network. Making Bitcoin a competitive monetary system while also preserving its security properties is not a trivial problem, and we should take more time to come up with a robust solution. I suspect we need a better incentive for users to run nodes instead of relying solely on altruism.

If two developers can fork Bitcoin and succeed in redefining what "Bitcoin" is, in the face of widespread technical criticism and through the use of populist tactics, then I will have no choice but to declare Bitcoin a failed project. Bitcoin was meant to be both technically and socially robust. This present situation has been very disappointing to watch unfold.

Satoshi Nakamoto


In that email he expresses that he doesn’t want Bitcoin to hardfork. He doesn’t say that he wants 1M to remain forever.

My guess is that this was not satoshi but rather someone pro Blockstream who had claimed the email account. But we can never know this, satoshi didn’t pgp-sign the email(which he never did so that is not an argument for its validity).

Fwiw at the time I was pro hardforking. I don’t think a network that cannot stand a few hardforks should be winning anyway. Since then we have had hardforks of Bitcoin twice, Ethereum once etc and still they keep reaching new ATH and increased transactions per second etc. Clearly hardforks are not that terrible. They might even make the community more antifragile or kill that which was fragile to begin with. So imo fork every chain often and hard. But I would not invest in chains that fails to gain traction.
 
Seems relevant to the thread :)

Hehe he still doesn’t get it. Sure crypto is still small and used by few, but it’s still growing and rapidly. And if you are gonna bootstrap a currency from zero you need to go through all those steps and some of those steps might seem pointless for a lvl1 thinker. Example accepting Bitcoin but converting to dollar at sale, is that even creating demand for bitcoins? Yes it is, but you need to be a lvl2 thinker to understand that.

Crypto is not even ready to handle scale, that will take another year or two. But then we will have deflationary tokens, deflationary tokens with interest, stable tokens etc with near zero transactions fees and near unlimited transaction per second and then legacy fiat currency will start to seem like a pretty bad value proposition. But to get there we needed all those silly inbetween steps without any lvl1 value. Krugman will keep being surprised by Bitcoins irrational growth, just like analysts keep being surprised by Tesla’s irrational growth. Because they refuse to update their own mental models when they get contradictory new data
 
Hehe he still doesn’t get it.

Yeah I mean WTF does that author know about economics, who the heck is Paul Krugman anyway right?

He's just *checks notes*...the 2008 Nobel Prize winner in Economics...having also taught at MIT, Princeton, and the London School of Economics, published over 2 dozen books, and over 200 peer reviewed papers....

So basically an idiot.

Doubtless your own resume is far more impressive.



BTW, I've not seen Krugman comment extensively on Tesla, but the little he has has generally been entirely positive. He seems to understand just fine a new innovative solution to an actual problem, which Tesla certainly is.

Possibly you didn't actually read the article, just assuming what it says- but he specifically points out he has yet to find anyone who can tell him what problem cryptocurrency actually fixes that doesn't already have better solutions though- and he's asked a LOT of people.

If you think you've got a compelling answer I'm sure he'd love to hear from you.
 
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Don’t want to derail the thread with Krugman discussion. But there are plenty of people who disagrees with him about Bitcoin being evil.

If you wonder what problem Bitcoin solves, I suggest to start with the whitepaper:

Commerce on the Internet has come to rely almost exclusively on financial institutions serving as trusted third parties to process electronic payments. While the system works well enough for most transactions, it still suffers from the inherent weaknesses of the trust based model. Completely non-reversible transactions are not really possible, since financial institutions cannot avoid mediating disputes. The cost of mediation increases transaction costs, limiting the minimum practical transaction size and cutting off the possibility for small casual transactions, and there is a broader cost in the loss of ability to make non-reversible payments for non- reversible services. With the possibility of reversal, the need for trust spreads. Merchants must be wary of their customers, hassling them for more information than they would otherwise need. A certain percentage of fraud is accepted as unavoidable. These costs and payment uncertainties can be avoided in person by using physical currency, but no mechanism exists to make payments over a communications channel without a trusted party.
What is needed is an electronic payment system based on cryptographic proof instead of trust, allowing any two willing parties to transact directly with each other without the need for a trusted third party.
 
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If you wonder what problem Bitcoin solves, I suggest to start with the whitepaper:

Commerce on the Internet has come to rely almost exclusively on financial institutions serving as trusted third parties to process electronic payments.


That's literally how most commerce (at least 80% by most estimates) in person works in nations with electricity too.

While the system works well enough for most transactions, it still suffers from the inherent weaknesses of the trust based model. Completely non-reversible transactions are not really possible, since financial institutions cannot avoid mediating disputes.

That's not a weakness, that's a feature.

If someone defrauds you, fails to deliver, or a myriad of other things, you'd WANT to be able to reverse the transaction.

The cost of mediation increases transaction costs

BTC transaction costs are massively higher than VISAs.

Weird given the lack of mediation. But it's an example of the solution being worse than the thing it's trying to replace.

(not to mention the much slower speed of those transactions with BTC since it can do so few transactions per second in comparison, like a couple orders of magnitude less)


limiting the minimum practical transaction size and cutting off the possibility for small casual transactions


Uh... you sure you're talking about the normal transaction system and not bitcoin?

If wanna spend $10 at a restaurant VISA is gonna eat maybe 25-30 cents of that. Some processors even less.

The average transaction cost for BTC yesterday? $23.13

That's a pricey lunch! (and checkout is gonna take a lot longer too)

Imagine if I'd just bought a pack of gum!


I mean- not that 99.99% of places that sell food or gum take BTC anyway... and the above is part of why they never will.


With the possibility of reversal, the need for trust spreads. Merchants must be wary of their customers, hassling them for more information than they would otherwise need. A certain percentage of fraud is accepted as unavoidable.

The great news is- the consumer isn't responsible for any of it.

If someone makes fraud purchases with my credit card, I'm on the hook for $0.00.

If someone hacks into your crypto account, it's irreversible. That stuffs just gone. And there's no shortage of that having happened to people.

Of course you can store it "safely unhackable" offline, right?

Which gets to the even more hilarious example--

If I lose my credit card- I just call the bank and they send me a new one.

If I forget my online banking password- I can reset it.

My money is still there.


If I lose access to an offline BTC wallet (forget the password to an encrypted drive, physically lose the thing it's stored on, etc)- it's just gone.

No recourse.

By design.


These costs and payment uncertainties can be avoided in person by using physical currency, but no mechanism exists to make payments over a communications channel without a trusted party.
What is needed is an electronic payment system based on cryptographic proof instead of trust, allowing any two willing parties to transact directly with each other without the need for a trusted third party.



So your solution for the problem of a 3rd party payment system like a bank or credit card operator taking a tiny fee on each transaction including the most common, smaller ones- and leaving you with a recourse if you don't get what you paid for, is.... a much slower system that charges a much LARGER fee on all those common small transactions and has NO recourse if you get ripped off?


That's kind of the opposite of a solution.

BTC appears objectively worse in real world use in virtually every way than, you know, actual money including the electronic methods of using it both in person and online.

(for legal stuff anyway- I hear it's quite popular in other circles)


None of this is to say nobody will ever come up with a better, cheaper, faster, safer universal electronic payment system than is in common use today.

But it sure isn't bitcoin.
 
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Yeah I agree with you, Bitcoin did what it set out to do, but too well given its blocksize limitation. Thus transaction cost became too expensive preventing its original goal. Nobody goes there, it’s too crowded. Yeah, it’s too crowded for me, it’s not the revolution I signed up for... That’s why I abandoned Bitcoin and now put my faith in that Ethereum eventually will solve that problem and fulfill the promise of Bitcoin and more...

I’m sad we never got to run the experiment what would have happened if Gavin got his wish of 20MB blocks back in 2015. Bitcoin had such a good story.
 
Yeah I agree with you, Bitcoin did what it set out to do, but too well given its blocksize limitation. Thus transaction cost became too expensive preventing its original goal. Nobody goes there, it’s too crowded. Yeah, it’s too crowded for me, it’s not the revolution I signed up for... That’s why I abandoned Bitcoin and now put my faith in that Ethereum eventually will solve that problem and fulfill the promise of Bitcoin and more...

I’m sad we never got to run the experiment what would have happened if Gavin got his wish of 20MB blocks back in 2015. Bitcoin had such a good story.
You seem wise in the way of cryptocurrencies :) , as well close to the crypto inner circle from its beginnings.
In your opinion, do you think a new, well designed currency introduced and actively promoted and supported by Elon/Tesla/SpaceX could take over the crypto world? Replace bitcoin and be the One? Perhaps ETH based, with Vitalik onboard?
 
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You seem knowledgeable of cryptocurrencies, as well very close to its inner circle from the beginnings.
In your opinion, do you think a new, well designed currency introduced and actively promoted and supported by Elon/Tesla/SpaceX could take over the crypto world? Perhaps ETH based, with Vitalik onboard?
In my estimate ETH2 will be out in about 7months. That should improve scaling slightly and allow L2 solutions. It will also replace inflation with deflation which will be a fun monetary experiment to run. Keynesians are not very keen on running this experiments, but it’s Austrians’ wet dream. I am not sure if Ethereum will be the network or ETH the currency to win, but these seems like good candidates. Another more suitable token on the chain might be better or a separate currency might win. Ether has the benefit that it will more easily be able to interact with contracts on Ethereum, like DeFi etc. And mainly Ethereum has won the developer network effect. Ethereum could gain on Bitcoin because it offered something new. Bitcoin could gain on the dollar because it offered something new. To gain on Ethereum you need to offer something, and given that Ethereum is Turing complete and will likely scale, I have a hard time seeing what can be offered to gain on Ethereum. The window of overtaking on Network effects by being a government etc is rapidly closing.

I don’t see Bitcoin being the main currency for reasons stated previously. But it might be a fine store of value being the first and most famous crypto.

China might release a government coin soon and I think that eventually USA will have to abandon the dollar, it’s mostly a question of when, not if. It will suck to not be able to print currency to tax the people to fund spending. But it’s just not sustainable if there is a much better currency, usage will gravitate to the better currency...

SpaceX releasing a Mars-coin would be interesting, but I think this is slightly too controversial for them. However Elon might just be crazy enough to try it! Not sure if I as a Tesla holder am comfortable with this, it will seriously **** with governments. Think it will either have to be a loose group of people or a government, not any company. See what happened to Facebook when they tried to release Libra.
 
In my estimate ETH2 will be out in about 7months. That should improve scaling slightly and allow L2 solutions. It will also replace inflation with deflation which will be a fun monetary experiment to run. Keynesians are not very keen on running this experiments, but it’s Austrians’ wet dream. I am not sure if Ethereum will be the network or ETH the currency to win, but these seems like good candidates. Another more suitable token on the chain might be better or a separate currency might win. Ether has the benefit that it will more easily be able to interact with contracts on Ethereum, like DeFi etc. And mainly Ethereum has won the developer network effect. Ethereum could gain on Bitcoin because it offered something new. Bitcoin could gain on the dollar because it offered something new. To gain on Ethereum you need to offer something, and given that Ethereum is Turing complete and will likely scale, I have a hard time seeing what can be offered to gain on Ethereum. The window of overtaking on Network effects by being a government etc is rapidly closing.

I don’t see Bitcoin being the main currency for reasons stated previously. But it might be a fine store of value being the first and most famous crypto.

China might release a government coin soon and I think that eventually USA will have to abandon the dollar, it’s mostly a question of when, not if. It will suck to not be able to print currency to tax the people to fund spending. But it’s just not sustainable if there is a much better currency, usage will gravitate to the better currency...

SpaceX releasing a Mars-coin would be interesting, but I think this is slightly too controversial for them. However Elon might just be crazy enough to try it! Not sure if I as a Tesla holder am comfortable with this, it will seriously **** with governments. Think it will either have to be a loose group of people or a government, not any company. See what happened to Facebook when they tried to release Libra.
From what I understand, the jury is still out on many aspects of crypto.
ETH2 will be a fun thing to watch. I still believe there is some place for Cardano (if they release something ;-)) or others.
What seems to be clear, at the moment (and ETH2 is indicative), is that PoW is not sustainable as it is. Maybe some advanced altcoin has some better hashing protocol, but I don't know.
Interesting times.
 
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There is a lot of debate regarding that email. Satoshis other email was hacked. Then he was inactive for 4years. That other email account can be claimed by another person if it has been inactive for 1 year.

If you go back to the posts at that time it was a civil war. Many places banned every user even mentioning Bitcoin XT, so it might seem like there was consensus, but that was not the case.

Here is the mail anyway:

I have been following the recent block size debates through the mailing list. I had hoped the debate would resolve and that a fork proposal would achieve widespread consensus. However with the formal release of Bitcoin XT 0.11A, this looks unlikely to happen, and so I am forced to share my concerns about this very dangerous fork.

The developers of this pretender-Bitcoin claim to be following my original vision, but nothing could be further from the truth. When I designed Bitcoin, I designed it in such a way as to make future modifications to the consensus rules difficult without near unanimous agreement. Bitcoin was designed to be protected from the influence of charismatic leaders, even if their name is Gavin Andresen, Barack Obama, or Satoshi Nakamoto. Nearly everyone has to agree on a change, and they have to do it without being forced or pressured into it. By doing a fork in this way, these developers are violating the "original vision" they claim to honour.

They use my old writings to make claims about what Bitcoin was supposed to be. However I acknowledge that a lot has changed since that time, and new knowledge has been gained that contradicts some of my early opinions. For example I didn't anticipate pooled mining and its effects on the security of the network. Making Bitcoin a competitive monetary system while also preserving its security properties is not a trivial problem, and we should take more time to come up with a robust solution. I suspect we need a better incentive for users to run nodes instead of relying solely on altruism.

If two developers can fork Bitcoin and succeed in redefining what "Bitcoin" is, in the face of widespread technical criticism and through the use of populist tactics, then I will have no choice but to declare Bitcoin a failed project. Bitcoin was meant to be both technically and socially robust. This present situation has been very disappointing to watch unfold.

Satoshi Nakamoto


In that email he expresses that he doesn’t want Bitcoin to hardfork. He doesn’t say that he wants 1M to remain forever.

My guess is that this was not satoshi but rather someone pro Blockstream who had claimed the email account. But we can never know this, satoshi didn’t pgp-sign the email(which he never did so that is not an argument for its validity).

Fwiw at the time I was pro hardforking. I don’t think a network that cannot stand a few hardforks should be winning anyway. Since then we have had hardforks of Bitcoin twice, Ethereum once etc and still they keep reaching new ATH and increased transactions per second etc. Clearly hardforks are not that terrible. They might even make the community more antifragile or kill that which was fragile to begin with. So imo fork every chain often and hard. But I would not invest in chains that fails to gain traction.
Anyone with half a brain knows that was absolutely not from the real Satoshi. They didn’t even spend five minutes trying to be like Satoshi. Not even a slight chance it was him. There was no real “debate“ if this was real. It is absolutely fabricated.
 
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