Inspired in the recently thread created by @Steamtyme,
theymosisms - A collection of posts for reference , I decided to create this one.
About a year ago I discovered
theymos' reddit account, where he engage in some discussions mostly
r/Bitcoin.
I think this collection is complementary of Steamtyme topic, as his collection of theymos' posts is basically about the forum, such as ban, rules, ip ban . This collection is about Bitcoin discussions. As bitcoin discussion board is a sea of spam, I decided to put this in
Beginners & Help board (as some of his posts are not fully technical for Technical Discussion board). Moved to Reputation, as Lucius suggestion.
I will quote some of the best posts I could find (he writes a lot lol)
I am a 21-year-old computer science student in the US and an avid bitcoiner since early 2010. I am the head admin of the Bitcoin Forum and the top mod here, though I didn't create either community. I wrote Bitcoin Block Explorer and ran it for a long time, but it is now run by Liraz Siri. I am one of very few people with a copy of the Bitcoin Alert Key.
What is the one Bitcoin service you would like to see developed?
A decentralized Bitcoin exchange. This is a lot more difficult than some might think, but I think that it's possible.
How did you discover Bitcoin and why did you decided to get involved as you did?
I saw a post about Bitcoin on 4chan. The poster was complaining about how long it was taking to download the blockchain.
I just started participating on the forum and never lost my interest.
Mining is too centralized, and many of the major miners are clearly bad actors. But a PoW change looks like a net negative currently. Calling for a PoW change now is kind of like calling for a block-size increase: you see a problem, and you see a big red button labeled "solve problem", but you fail to look at what the button actually does.
First of all, it's important to recognize that Bitcoin is not ruled by miners. If it was, then Bitcoin would already be lost, since the majority of miners have long been incompetent and/or totally opposed to the ideals of Bitcoin. If miners try any attack, a response can be custom-tailored to it by the economy in order to stop the attack and undo any damage. In case of attack, it would absolutely not be necessary to accept whatever the miners are doing.
Secondly, the major miners (especially Bitmain and associates) are major miners because they have access to high-quality chip fabrication technology/infrastructure. If you changed the PoW to eg. SHA-3, this would be a massive boon to Bitmain, since they would be in a better position than anyone on Earth to create new hardware.
Thirdly, pure PoS has been totally discredited. A combination PoW+PoS might not be a terrible idea IMO, but the idea is fairly unpopular among experts for technical and philosophical reasons.
Finally, it's easy to say that you want to create an "ASIC-proof" PoW function, but doing so is much more difficult. Recall that "democratizing mining" was one of the goals of Litecoin's usage of scrypt, but Bitmain is now producing Litecoin ASICs. X11 was another attempt at an ASIC-proof PoW, and ASICs were produced for that one as soon as the altcoins which used it became valuable enough to make doing so profitable. You can think up whatever ultra-complex, apparently-CPU-unique thing you want, but:
Probably you will fail to create something that actually requires a true CPU rather than some more-efficient-than-CPUs ASIC, as doing so is very difficult. (To do so would require attacking the problem rigorously & mathematically, not just willy-nilly doing things that look hard for ASICs.)
If you somehow do create one, congrats: you've now given a monopoly on Bitcoin mining hardware to Intel and (to a much lesser extent) AMD, the only two companies with the technology for creating efficient x86 CPUs.
There's been some research on creating a memory-hard PoW function rather than a CPU-hard function, but this is an experimental area. The best candidate function we have, cuckoo, is not proven to be memory-hard (ie. maybe more analysis could someday allow for eliminating the memory-hardness). Furthermore, even if we had a well-tested and proven memory-hard PoW, it is not clear that this would result in less mining centralization. Maybe the economies of scale would end up even more pronounced here, or maybe mining would be taken over by a couple of giant botnets. (I actually think that this is the most promising direction for solving mining centralization long-term, but there are serious questions and challenges which probably won't be well-addressed anytime soon.)
So my position has been and continues to be that:
The PoW should absolutely be changed if miners do any sort of attack (the most likely of which is censoring "dubious" transactions rather than anything more obviously evil). In that scenario, the miners must be fired or Bitcoin is dead, so a high-cost, risky PoW change is worthwhile. And if the first PoW change fails to keep those miners away, you keep changing the PoW until they've created so many ASIC paperweights that they've run out of money.
While I would like to replace the current miners, in the absence of any attack, a PoW change is a high-cost, high-risk move which is unlikely to actually improve things in the long-run anyway. It's not worth it.
https://www.reddit.com/r/Bitcoin/comments/7zvit8/cobra_miners_are_evil_we_need_to_get_rid_of_them/dus9tuq/
Bitcoin is not governed. If there is disagreement in the hard rules of the system, then you by definition end up with two separate & incompatible currencies. In just a few minutes you could modify the code so that it produces unlimited coins, and nobody could stop you. But since your rules are different from everyone else's rules, you've actually created a separate currency. At that point you have to convince everyone else to switch to your currency and call it Bitcoin. There is no majority rule, central authority, or other form of governance: you have to convince everyone to switch if you don't want some people to continue using old-Bitcoin. Realistically, it's never going to happen for something like changing the money supply. For actually-reasonable changes which are not fundamentally opposed to Bitcoin, it could be done in a slow process over the course of a couple years.
Only Bitcoin's hard rules (aka consensus rules) get the above treatment. There are less important rules called policy which can be changed more easily. For example, adding support for compact blocks was a policy change.
There are also softforks, which is a way of more quickly making changes to the hard rules when the rules are being tightened. You can't do softforks when the rules are being loosened. For example, reducing the BTC that will be created in the future could be done as a softfork, while increasing the BTC that will be created in the future could not be.
What will quantum resistant private key and seeds look like in the near future? Is it just a larger amount of seed words and/or a longer private key?
The user experience would be roughly the same. I suppose that individual private keys which expert users might handle would probably be about 33 bytes (a 32-byte hash-tree root and 1 byte for the tree height). Addresses would be basically the same as now. You might be able to use your existing seed words, and there'd just be a slightly different way of deriving keys in the backend. The biggest end-user differences would be:
Transaction signatures would be much larger (about 11kB per input), so on-chain transactions would be much more expensive.
You wouldn't be able to infinitely reuse addresses. (You're already discouraged from doing so now, but post-QC it'd become particularly insecure.)
All of your existing addresses would be more-or-less insecure, so you'd have to move all of your BTC off of those addresses into new addresses.
Despite how it's often portrayed, quantum computers powerful enough to endanger real-world crypto does not seem right around the corner.
I wouldn't be surprised if it's still not a threat in even 50 years. So while it could happen sooner if there's a sudden breakthrough, and it's worth thinking about and preparing for to some extent, I wouldn't worry about it too much.
Is it really realistic to think that BTC could reach $1 million someday? (as Mr Mcafee says)
It's possible, but it's ridiculous to just draw a line on a chart and conclude that it's going to happen anytime soon. If Bitcoin reached such high prices, that'd either cause or be caused by world-shaking events: BTC would have a market cap greater than the USD M3 money supply, and quite a few BTC early adopters would have wealth comparable to countries.
The easiest way to reach $1 million will be USD hyperinflation. I think that this will happen sometime in the next 50 years, since it seems to me to be the only plausible outcome for the US's addiction to debt. But this says more about the value of USD than BTC.
To reach $1 million in today's value:
There could be truly extraordinary growth in demand, probably caused by a worldwide lack of faith in fiat or some other major event.
Even in the absence of much growth, if Bitcoin remains the premier cryptocurrency, then I'd expect the value to continuously (but not necessarily quickly) rise in real terms because BTC is highly deflationary.
I think that there's substantial room for growth in demand -- I wouldn't be surprised to see $10k again within a year or two, for example --, but I'm not sure about growth to $1 million in the next couple of decades at least. The fact is that most people are fine with using things like credit cards, bank autopayments, bank-linked payment apps, etc. They're easy enough, and since the payments are reversible, they're highly forgiving of the average person's absolutely abominable security practices. (There are of course many major problems with traditional payments, but the average person doesn't care enough.)
In order to reach $1 million levels anytime soon, we'd need at least:
Hardware infrastructure. Point-of-sale would need the equivalent of credit card terminals, and every person would need secure hardware wallets either on a dedicated device or on their phones. You need to somehow prevent almost all cases of: phishing, malware, wallet bugs, forgotten passwords, mugging someone out of their life savings, etc.
Some off-chain solution would have to be working perfectly. It's unacceptable for the average person to worry about fees or confirmations.
There'd have to be significant pull to BTC (merchants passing on lower costs, maybe) and/or significant push from fiat (eg. hyperinflation, widespread privacy concerns, confiscation, etc.).
Governments can't become too authoritarian. Bitcoin can be made to function even if every country makes it illegal, but that'd make it too difficult for ordinary people to use it. It'd be similar to how most Chinese people don't know how to bypass the Great Firewall, even though it's technically possible.
There are plausible technical solutions for at least the first two points, but we're nowhere near achieving them all.
As for value increases due to deflation: I consider it pretty likely that BTC will still be the premier cryptocurrency in 50 years; maybe an 85% probability. If so, that implies in my mind an on-average-increasing value. But even if the price goes up to $100k in 10 years through growth, I'm not sure that deflation alone will be enough to carry us to $1 million in an additional 40 years
Andreas Antonopolous: ETF's are NOT good for bitcoin as the centralized custodian can decide what to do with the bitcoin they're holding.
Agreed, an ETF will almost certainly turn into a disaster at some point. The coins will be stolen, forks will be handled controversially, there will be issues with fungibility (eg. someone will "trace stolen coins" to the ETF's stash), the world will freak out when a bunch of retirees lose their life savings after doing the equivalent of buying BTC at $20k, etc. etc. It'll also get the sort of people who love regulation more into BTC, which is never good.
But investors want it, so it'll probably happen eventually. In particular, I totally condemn trying to get regulators to interfere in the free market more than they already do by blocking any ETF. (When the SEC was last looking into this, I had actually written a long document that I was going to send to them in order to comment on many technical issues with their proposed Bitcoin ETF regulation, but I decided not to send it because I don't want to have even the slightest hand in regulations.)
An ETF probably will increase the price a lot (until the ETF suffers its near-inevitable catastrophe), which has some pros and cons.
Note that an ETF can't affect Bitcoin itself, just the ETF investors and the market. There is no voting of any sort in Bitcoin, so it's not as if holding a lot of BTC gives you any power over Bitcoin, for example. I do agree with Andreas that the creation of a "corpo-Bitcoin" seems probable, perhaps after the ETF loses a ton of BTC and wants to undo it.
I posted about this just a few months ago, but I feel that it's necessary to repeat. The Bitcoin price is on an unbelievably ridiculous upswing which is rather likely to be a bubble. If you're trying to get rich quick by dumping your retirement funds into BTC at $10k, then your "investment strategy" is not much better than someone betting everything on a game of roulette. High-risk-high-reward investing is not necessarily bad, but you have to seriously look at your thought process to make sure that you're not:
Being blinded by dreams of getting rich quickly, similarly to people who dump money on very-negative-EV lottery tickets.
Getting wrapped up in "HODL" memes, reddit comments, and other groupthink, which is sometimes fun, but absolutely the last appropriate source of investment advice.
Acting based on panic thinking like, "OMG the price is going to $1 million and I will miss my chance forever if I don't buy right now" or "OMG the price is going to $0.01 and I will miss my chance forever to retain some value if I don't sell right now".
Investing more than you can afford to lose. Bitcoin is HIGHLY, HIGHLY speculative. No investment advisor would tell you to put all of your life savings into MSFT or whatever, and MSFT has a market cap 4x larger than Bitcoin. Although I believe that it is very unlikely, there are several ways in which the value could drop precipitously, even to zero. For example, there is no mathematical proof that the cryptographic algorithms used in Bitcoin are actually secure -- they are merely believed to be secure because nobody has been able to break them after many years of intense scrutiny. (I'm not here recommending "diversifying" into altcoins -- altcoins are almost all complete trash, and price-wise they follow BTC but with even more volatility, so they're not really useful for diversification.)
It is entirely possible that the massive price increase of the last year is based on lasting fundamentals. In addition to things like the fairly recent subsidy halving, the defeat of B2X, etc., the world fiat-based economy is in many ways on very shaky ground, and getting worse all the time. There are many good reasons why BTC should have a larger market cap than every fiat currency combined. It's even possible that the price will increase quite a bit more from now. But for goodness sake, don't think that Bitcoin is the first-ever infinite-money generator that will continue to rise exponentially forever (in real terms). I can nearly guarantee that there will be a large and long-lasting crash/downturn at some point. Maybe it will be $10k to $5k, maybe it will be $50k to $30k, who knows. But if you're thinking for example that the current $5k+ price range is absolutely secure after only existing for a few months, then you're traveling blind through very dangerous territory.
Some points to consider:
Buying near the ATH is very risky, and while it can be correct/profitable, it puts you on the wrong footing. You need to buy low and sell high to make money.
On 2013-11-29 (exactly 4 years ago) the peak ATH hit $1163, and then fell to $152 by 2015-01-13. That's a drop of 86.9%. Imagine this happens again: The price drops sharply to $2000 or something and then just continuously decreases down to a low of $1,432 (an 86.9% reduction from today's ATH) over the course of a whole year. I'm not saying that this will happen, but it's happened once and it can happen again. Could you survive this?
Bitcoin is experimental, and it is probably imprudent for someone who is not a true believer in the soul of Bitcoin to invest a lot into it. For example, I personally wouldn't invest more than a few percent of my total assets into ETH even if I felt very confident that it would rise in price because I simply don't believe in its philosophy or long-term value.
To reduce risk, it is frequently recommended to allocate assets by percentage, and rebalance upon large price movements. Eg. If you previously decided that you want to allocate 50% of your wealth in BTC (because you are a super big true believer), but BTC is now 90% of your wealth because the price increased so much, it may generally be advisable to start selling to rebalance your BTC allocation back down to 50%. I'm not saying that it is always absolutely wrong to have 90% of your assets in BTC or whatever, but it should be because you are intentionally choosing to do so, not because the price got away from you and you never really considered that you now have 90% of your wealth riding on one thing.
Avoid panic buys and panic sells. Dollar-cost-averaging over a long period of time is often a good strategy.
Nothing rises in real value to infinity. That's impossible. It is possible that 1 BTC could someday be worth infinite dollars, but that just means that dollars are worthless in that hypothetical scenario. BTC probably does have plenty of room to grow in real value before it completely takes over the world, but keep in mind that there is a ceiling.
If BTC were to reach values like $100k-$250k, that'd probably cause/imply that the prevailing economic regime has completely fallen apart. At some point in that price area, people around the world would probably lose substantial faith in fiat currencies. A good result, but ask yourself: do you expect the prevailing economic regime to go down easily?
I'm not telling you to buy or sell, and I'm not giving financial advice here. I'm just urging everyone to think rationally, not emotionally or recklessly.
