<nettime> ***SPAM*** Re: de Jong, Lovink, and Riemens: 10 Bitcoin Myths

[morlockelloi@yahoo.com]

Compared to the trust in traditional currencies, the trust in Bitcoin is 
in the fanaticism end of the scale, due to the simple math - how much 
does it cost to subvert a currency:

Traditional currencies, operated by the state-size actors, lose value 
when the state's economy and the state itself collapse. Why this happens 
is a different topic, but there almost always major losers, who invest a 
lot to prevent this from happening. There can also be major winners (ie. 
invading army) who invest a lot to make this happen. What is are the 
baseline amounts involved in these investments? Most likely not less 
than several hundreds of $MM.

Bitcoin mining is currently reduced to less than 10 operators. There is 
relatively small number of people involved, and none of these seem to 
have a standing army or a navy. How much would it cost to coerce/subvert 
51% of these and do anything with Bitcoin (split hash trees into 
oblivion, etc. etc.)? At worse few $MM, if really expensive first-class 
thugs are hired. This is completely different situation from the early 
days of Bitcoin, when there were thousands of miners, and the cost of 
obtaining control over 51% of those was much closer to the cost of 
subverting state-run currency.


On 11/30/15, 11:06, nettime's_forgotten_password wrote:

> 4. "Bitcoin is not a fiat currency."
>
> In practice, acceptance of Bitcoin payments takes place before the
> (irrevocable) recording of the transaction in the distributed database.
> That is, without formal confirmation of its validity. Apparently, the
> parties involved in payments in bitcoins_believe_  in their eventual
> recording. The payee therefore trusts the_eventual_  availability of
> received funds.
>
> This looks distinctly similar to the way traditional instruments of
> payments, such as coins, banknotes and bank transfers, operate. The
> users trust, based on  experience and social convention, the correct
> operation of the system such that received funds are available for
> further spending. This 'systemic trust' in traditional, fiat, currency
> is underpinned by a mix of technical features such as hard to copy bank
> notes, fraud detection software in financial institutions and government
> imposed and enforced regulations.
>
> Conclusion: Where in practice the 'systemic trust' in Bitcoin is no
> different from that of traditional currencies, Bitcoin operates _de
> facto_ as a fiat currency.


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