[cryptography] (off-topic) Bitcoin is a repeated lesson in cryptography applications - was "endgame"

Benjamin Kreuter brk7bx at virginia.edu
Sat Feb 25 10:18:39 EST 2012


On Sat, 25 Feb 2012 13:36:50 +1000
"James A. Donald" <jamesd at echeque.com> wrote:

> On 2012-02-25 12:53 PM, ianG wrote:
>  > It is also a singular lesson in the emotive power of cryptography
>  > to encourage large numbers of people to hash their intelligent
>  > thought processes. What we are seeing is otherwise rational people
>  > invest much time & effort into what amounts to a ponzi or bubble
>  > or pyramid scheme.
> 
> As Moldbug says, money is a bubble that never deflates.
> 
> Fact is, you can buy stuff today with Bitcoin.  Its value is not in
> that people hope that tomorrow they can exchange it for more, but
> that today they can exchange it for something.

You left out, "...and that they can eventually exchange it for their
nation's currency."  The demand for Bitcoin as a currency is driven by
its properties as a digital cash system; people still need to get their
nation's currency at some point (e.g. to pay their taxes, to repay
debts, to satisfy requirements imposed by courts, etc.).

Unfortunately, rather than bill Bitcoin as a system for making online
payments, people have been billing Bitcoin as a way to escape unpopular
laws and regulations, unpopular financial institutions, and as a
cure-all for fears about governments mismanaging their currency.  That
is where the alarms should start going off -- whenever someone promises
a cure-all for anything, you know they are either deluded or trying to
take advantage of you.  Given the cycle we saw with Bitcoin, where lots
of media attention allowed early adopters to sell tokens for big
profits, I suspect it is the latter.

-- Ben



-- 
Benjamin R Kreuter
UVA Computer Science
brk7bx at virginia.edu
KK4FJZ

--

"If large numbers of people are interested in freedom of speech, there
will be freedom of speech, even if the law forbids it; if public
opinion is sluggish, inconvenient minorities will be persecuted, even
if laws exist to protect them." - George Orwell
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