[ExI] bitcoin again

[spike at rainier66.com]

...> On Behalf Of BillK via extropy-chat

> _______________________________________________


...

A lot of people think crypto is worth something.
A lot of people think bitcoin is worth something.
Most people in each community think fiat currency has major problems.
And they all believe in the cross fungibility of cryptocurrency and fiat.

Which is why they are missing a huge point about FTX.

The broad crypto community can’t even imagine the perspective of someone who thinks all of crypto (and BTC) is a bunch of bullshit.
And it is from that perspective where our story is told.
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BillK

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Cool, cryptocurrency poetry.

For those in a hurry, that last paragraph down there is the punchline.

BillK, more than twenty five years ago on this forum (I think it was about 1996 to about 1998 or so) I was doing Prime 95.  I introduced the notion in a math subgroup on ExI-chat that any prole could set up an arbitrary number of idle computers to run background processes using free public domain software developed by Prime95, which could discover a Mersenne prime, which would enable the discoverer to go on the Mersenne Prime forum and offer the number for sale.  She could write up a contract, get a third party to hold the money, tell the buyer the number, the buyer verifies the number, reports it not to PrimeNet but to a science journal.  Then... Prime95 reads that, verifies, the buyer's name goes in the record book forever as having discovered that number.  It doesn't matter if the seller writes her memoirs about discovering and selling her Mersenne prime.

Hal Finney did his Hal magic: he Finneyed the idea into applying blockchain to allow a number with inherent value (such as a record prime number) to be subdivided, bought and sold.  Anyone who watched all that knows that a number can have inherent value IF... and only if... IFF... there is some kind of control over the quantity of those numbers.  

I argued at the time using paintings.  Consider a list of investment quality painters or artists: Rembrandt, Picasso, Warhol, Biden, Van Gogh, that Italian feller what's his name, Michael Angelo I think.  Look at that list and tell me which one doesn't belong, even though his paintings are selling for a cool fortch?  Ja, the one who is still living, because the quantity is arbitrary.  The others we know exactly how much of their art will ever ever ever be produced.

Fiat currency is based on kind of a promise that the government issuing that currency will limit its production, but that promise can always be broken, as we saw in Zimbabwe and Venezuela.  Now... we see that the USA and Russia are in a position where they will likely need to spin out arbitrary quantities of their currencies in order to meet their obligations.  

>From that, I would argue that the inherent value of cryptocurrency is in the control of quantity.  It doesn't matter what is behind it, for we saw in the painting example, the only thing backing those paintings is a piece of canvas.

Hal Finneyed that notion to BitCoin (I am to this day convinced he was a co-inventor of that.)  I agree it has inherent value.  I agree that the exchanges have inherent value.  I agree that governments will fight it and try to introduce their own, but every time they do introduce their own, every government which attempts it will take away two critical aspects of cryptocurrency: the possibility of secret transactions and the solid as a law of nature guarantee of control of supply.  

I predict, based on the above history and reasoning, that any government which produces any cryptocurrency or backs any cryptocurrency or that exchanges cryptocurrency will create the currency and do the exchanges in such a way that that government can track all transactions and can produce that cryptocurrency arbitrary quantities, which it then owns, to meet its own needs.  I further predict that all governments which create cryptocurrency will fight against its competitors in that market.  My grim predictions on FTX and Sam Bankman Fried are based on the reasoning above.  Nothing I have read on this forum dissuades me in the least.  I believe we are saying the same thing really, just with different takes on it.

spike