Bitcoin’s Greatest Strength: Verifying the Rules Without Central Authority

[suzanne5223]

What do you think is Bitcoin’s strongest long-term advantage, its monetary properties, or the ability for anyone to independently verify the rules without relying on a central authority?

Just as the idioms which says "Two heads are better than one."  Which means two people working together to solve an issue plan better than a single person.
We talk about what gives Bitcoin the strongest long-term advantages and choose to ignore all the properties (its core monetary properties, durability, decentralization, etc.) that work together to make BTC an outstanding asset

Also, explain how Bitcoin is open to manipulation and how it is being manipulated. I am genuinely curious, and I would love to hear an explanation.

Bitcoin is open to manipulation due to many reasons, but they are mostly surrounding by its potential, market structure, liquidity, FUD/FOMO, ETF decision, etc. An example is the crypto derivatives market is which is huge, and the market's major parties can use high leverage on futures to force liquidations, just like we have the Gold option contract.

[Odogwu-Blockchain]

The ability to auto transact itself and confirmed everything without anyone is a perfect sign of it's potential power to stand like you described above, the independent transaction confirmation ability without needing a centralized entity for any help, that's a great things to look into, or rather to appreciate Satoshi tbh.

[Tamaperdana]

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What do you think is Bitcoin’s strongest long-term advantage, its monetary properties, or the ability for anyone to independently verify the rules without relying on a central authority?

Basically, everything is very good, because Bitcoin is decentralized, and that alone explains that Bitcoin is a very valuable asset, unlike any other. Because, basically, until now, I personally haven't heard of an asset as decentralized as Bitcoin. So, whether it's about independently enforcing regulations or about its price, I think everything is very good. Because, fundamentally, decentralization is what makes all of this great.

So, when the fundamentals of an asset are sound, everything will certainly be very good. So, with that, I am truly proud to be living in the era where Bitcoin exists. This is a stroke of luck for me, because we currently live in an era where inflation continues to rise crazily. But with Bitcoin, I personally can feel calmer, because Bitcoin has proven to be able to consistently combat inflation well. So, Bitcoin is truly extraordinary. May Bitcoin last forever.

[m2017]

The people here mostly say money when describing Bitcoin, but the way I think about it, the most critical aspect is that transaction verification does not depend on anyone having a position of centralized authority. Any node participant can independently scan the blockchain, look at transaction history, and confirm that the nodes followed consensus rules. This seems to contrast quite clearly with the conventional financial system where most users have to trust a financial entity like a bank with history of the system or something like that.

And that is precisely what stripped bitcoin of its privacy. Anyone can view it. Even those whose interests are hostile to yours.

Users must remember how to secure keys, make good decisions about their software, understand the risks associated with sending transactions… But, the protocol has a mechanism to confirm the rules, instead of needing participants to trust somebody that they follow the rules.

What do you mean, no confirmations are needed? What about the miners? The entire BTC-network depends on their "confirmation".

But overall, I follow your line of reasoning. The system turned out to be completely autonomous, with no need for a central "controller".

I’d say the ability to verify the rules is the single strongest element the long-term strength of Bitcoin derives from, more even then the market volatility of it. Rules may change value but verifiability remains a basis of the system.

Do you believe that volatility ensures the long-term strength of bitcoin? Or is it the other way around?

What do you think is Bitcoin’s strongest long-term advantage, its monetary properties, or the ability for anyone to independently verify the rules without relying on a central authority?

But does every single person actually verify these "rules"? I doubt it. The majority use them mindlessly, placing their full trust in the "scripts" rather than a central authority. And most users see the long-term advantage of bitcoin in the appreciation of its price, the opportunity to preserve the value of their "wealth" and grow it.

[Curious T]

Bitcoin is open to manipulation due to many reasons, but they are mostly surrounding by its potential, market structure, liquidity, FUD/FOMO, ETF decision, etc. An example is the crypto derivatives market is which is huge, and the market's major parties can use high leverage on futures to force liquidations, just like we have the Gold option contract.

We're talking about Bitcoin, not any other market. I asked because he made it look as if it's easy to manipulate the market, and I wanted to know what he meant. A market of 1.5 trillion dollars is not easily manipulated. People talk about Bitcoin market manipulation like it's something that anybody with money can do. Right now, I'm not sure if 500 million dollars can move the market. Buying or selling Bitcoin worth 500 million would not significantly change the price of Bitcoin. I'm not saying there won't be a drop or an increase, but it won't be significant enough to make anybody want to manipulate the market. The market has grown so much, and the more it continues to grow, the more difficult it would be to manipulate.

[#CapsLOck]

I believe that Texac hit on an important point, that the two monetary properties and verifiability are not really competing properties. By making the monetary rules verifiable, people can determine whether they are followed and by providing economic incentives, miners, node operators and holders will have an incentive to keep the monetary rules valuable.

If not verified, the 21 million figure would largely be a pipe dream. If there are no economic motives to keep the network secure, then a set of rules alone may not be sufficient for maintaining a secure network. Interesting is that both of these properties work together, not as independent properties.

[Muba20]

What do you think is Bitcoin’s strongest long-term advantage, its monetary properties, or the ability for anyone to independently verify the rules without relying on a central authority?

It has limited supply and is completely decentralized, which is why it is natural to be interested in Bitcoin more than any other asset. But limited supply or decentralized system is not the only strength of Bitcoin. Another important among its features is that only in the case of Bitcoin, a person can understand and verify any transaction and the actual situation without the help of anyone else. For example, in conventional financial transactions, a general central institution can monitor it, but Bitcoin is an asset where there is no single control over anyone and it is definitely a power for the user. There is an opportunity to verify it yourself without relying on the government or any central authority.

Bitcoin is now the most valuable asset for people for various reasons, including decentralized assets, fixed supply, convenience of verifying transactions, transparency, protection from inflation. No one is safe in the conventional financial system. Although there is a possibility of losing assets in any unforeseen situation, those who use Bitcoin can be free from central control and are able to provide proper security for their assets, which is not possible with any other asset.

[suzanne5223]

Bitcoin is open to manipulation due to many reasons, but they are mostly surrounding by its potential, market structure, liquidity, FUD/FOMO, ETF decision, etc. An example is the crypto derivatives market is which is huge, and the market's major parties can use high leverage on futures to force liquidations, just like we have the Gold option contract.

We're talking about Bitcoin, not any other market.

Yes, i know we're talking about the Bitcoin market, but i used the Gold option contract as an example, which is something we also have in Bitcoin ever since the year 2016, while CME Group started the regulated institutional trading  BTC option contract on January 13, 2020.

I asked because he made it look as if it's easy to manipulate the market, and I wanted to know what he meant. A market of 1.5 trillion dollars is not easily manipulated.

Yes, it is easy to manipulate the market; it only depends on the person that execute the manipulation and the involved parties. Do you know how many times President Trump manipulated the market using Iran and tariff changes?
This is why it's good to understand the market and use any market manipulation for our own benefit.

[MisFoxie]

.. and its biggest weakness is that the rules aren't fixed and are open to manipulation, though not as arbitrary as fiat money.

Can you explain what you mean by "the rules aren't fixed"? Fixed as in they are not constant or they don't fix a problem? Please explain.

Also, explain how Bitcoin is open to manipulation and how it is being manipulated. I am genuinely curious, and I would love to hear an explanation.

Not a single person or group can manipulate Bitcoin. Bitcoin's rules are not completely fixed because the software can be updated when the Bitcoin network agrees as happened during the Taproot upgrade. That doesn't mean that anyone can change them whenever they want.

For example changing Bitcoin's 21m max limit would require a large amount of agreement from the ecosystem. Node operators can easily reject software when it breaks the rules they follow.

[notocactus]

Not a single person or group can manipulate Bitcoin. Bitcoin's rules are not completely fixed because the software can be updated when the Bitcoin network agrees as happened during the Taproot upgrade. That doesn't mean that anyone can change them whenever they want.

Even Satoshi Nakamoto as a Bitcoin founder does not have any power to manipulate Bitcoin. The founder can not change Bitcoin protocol individually but because of his reputation, people will look at him, listen to him and perhaps expect big effects from his opinion but it's like psychological effect. Any technical upgrade can not be done only by Satoshi Nakamoto or any developer, as it needs to be supported by Bitcoin community and Bitcoin nodes.

For example changing Bitcoin's 21m max limit would require a large amount of agreement from the ecosystem. Node operators can easily reject software when it breaks the rules they follow.

The cap of Bitcoin total supply can be changed but who want that?
People only want to see higher value, higher price, bigger trading volume of Bitcoin so that they will become richer with bitcoins.
Increasing total supply cap does not provide any of such things.

How is the 21 million Bitcoin cap defined and enforced?
Who controls Bitcoin Core?
Can Bitcoin's hard cap of 21 millions be changed?

[Btcdeybodi]

What do you think is Bitcoin’s strongest long-term advantage, its monetary properties, or the ability for anyone to independently verify the rules without relying on a central authority?

It's just a direct answer which is volatility. As bitcoin continues to grow, the long term advantage it has is the ability to rise and fall. When the price of bitcoin rises, it gives investors who have been holding for a long-term the advantage to take or maximise profits by buying more bitcoins while when the price falls it also give new investors the opportunity to buy at a lesser rate thereby making it easier for every bitcoin investor to benefit. Though another long-term advantage is its decentralised nature which is also one of the reasons why there are many bitcoin investors today. If bitcoin was created with no volatility and no decentralization, a lot of people wouldn't have invested but these reasons are the long term benefits.

[Mr Reporter]

What do you think is Bitcoin’s strongest long-term advantage, its monetary properties, or the ability for anyone to independently verify the rules without relying on a central authority?

It's just a direct answer which is volatility. As bitcoin continues to grow, the long term advantage it has is the ability to rise and fall. When the price of bitcoin rises, it gives investors who have been holding for a long-term the advantage to take or maximise profits by buying more bitcoins while when the price falls it also give new investors the opportunity to buy at a lesser rate thereby making it easier for every bitcoin investor to benefit. Though another long-term advantage is its decentralised nature which is also one of the reasons why there are many bitcoin investors today. If bitcoin was created with no volatility and no decentralization, a lot of people wouldn't have invested but these reasons are the long term benefits.

I don’t see Bitcoins monetary properties and verifiability competing with each other, but they work together. Looking at the example of the 21 million supply, this only meaningful because it for anyone, you can verify the rules and you see the Network is following them. Having Verification only is not enough, because node operators, miners and users  do need economic incentives also to be able to keep the network secure.

So from my own view Bitcoin real strength it coming from how this different properties do support themselves…

[Saltysugar99]

What do you think is Bitcoin’s strongest long-term advantage, its monetary properties, or the ability for anyone to independently verify the rules without relying on a central authority?

It's just a direct answer which is volatility. As bitcoin continues to grow, the long term advantage it has is the ability to rise and fall. When the price of bitcoin rises, it gives investors who have been holding for a long-term the advantage to take or maximise profits by buying more bitcoins while when the price falls it also give new investors the opportunity to buy at a lesser rate thereby making it easier for every bitcoin investor to benefit. Though another long-term advantage is its decentralised nature which is also one of the reasons why there are many bitcoin investors today. If bitcoin was created with no volatility and no decentralization, a lot of people wouldn't have invested but these reasons are the long term benefits.

I agree with your opinion on the decentralization of bitcoin, but if the price of Bitcoin increases, the profit of long-term holders is not maximized because the actual profit cannot be analyzed according to the short-term price situation. If the price increases, the value of existing holdings increases. But then when he buys new Bitcoin, he is buying at a higher price. That may be part of future accumulation, but not immediate profit maximization. And the price drop does not benefit everyone. Suppose someone has accumulated 5 BTC for many years. If the price drops by 30%, he may be able to buy some extra sats for $100 or $500, but at the same time the dollar value of his existing holdings has decreased a lot. For those who are in the accumulation stage, a price decrease creates an opportunity. I agree with you more on the point of decentralization. If control of Bitcoin was in a company, government or small group, then Bitcoin would not be much different from the traditional financial system. So to me, the real long-term strength of Bitcoin is that no matter where the price goes, Bitcoin's monetary rules remain the same.