The chain of blocks is really just a ledger saying who has Bitcoins and who has paid Bitcoins to whom. The initial ledger could just say that that Satoshi feller owned one million BTC.
I watched a pretty good YouTube about this kind of question the other day. I’m going to watch it a couple of more times:
True, but that’s not actually how it happened. The first million-ish BTC were mined by Satoshi.
The difficulty isn’t related to how many have been mined, rather it gets more difficult as the payback for success increases. They want new blocks to be added at a more or less constant rate - about one every 10 minutes as I recall - so as the value of bitcoin increases and more and more people are willing to invest more resources to mine them, the difficulty is adjusted to keep the rate steady.
It’s adjusted every 2,016 blocks to keep it at a rate of 1 every 10 minutes. It’s not related to the “payback for success,” just the speed at which they’d been mined for the past 2,016 blocks. That could be because bitcoin is more valuable or because hashing power has improved through technological improvements. The network doesn’t know or care what the dollar value of the coin is.
I think that’s what’s driving crypto madness: it’s like the 2021 version of dot com.
“The new economy” lololol
Yeah, remember all that e-commerce shit people were talking about in the late 90s? Nile.com or something? And some goo-goo.com advertising site? Well that certainly never went anywhere.
Remember the dot com bubble?
My point is that despite the bubble, anyone betting against the internet back then would have lost out big time. Although there were more pets.com disasters than amazon.com type successes, the ones that did succeed did so massively. And so only a couple decades later we have multiple trillion-dollar businesses built on the web.
Of course, I don’t think cryptocurrencies are anything like this–the internet has significant underlying value. I just think the dot com bubble was a particularly bad example that argues for the exact opposite of what asahi had intended. That bubble was really just an early shakeout in an enormous nascent industry. Happens with every big industry: cars, planes, CPUs, etc… People that rode out the downturn did very well.
Well, they are legal tender. The government has to accept them for taxes etc. The govt can tell you where to stuff your bitcoins.
They can and have been lost.
No, the government would have to accept it.
In theory banks would also, but currently there is no penalty if they dont. Buried deep in Various Bank Secrecy regs, patriot act etc, are such regs but there is no way to enforce them currently as the government knows they dont need to. Banks are pretty much all federally regulated, but there are a couple exceptions.
However, yes, the local shopkeeper can require gold, bitcoin, bacon, Euros, credit cards or whatever legal item (not cocaine or blowjobs), and there is nothing to stop him at this time.
Oh and the Feds could put some regs and teeth into those regs and say you all have to accept US dollars. They see no need to. They could also decide that trading in it in the USA and accepting it was illegal. Bitcoin would quickly be worth very little.
Can Satoshi make anyone take Bitcoin?
There were two very different sorts of companies that came about in the dotcom bubble. A few of them, like Amazon and eBay, came up with a product or service that people were willing to pay for, and then made them pay for it. Many of these companies succeeded (not all, as evidenced by pets.com, but then, not all brick-and-mortar companies succeed, either). Most of the new companies, however, didn’t do that: They weren’t built on their own business model; they were built on riding the hype. This is where you found companies with business models like “Let’s give away free cars!”. Any attempt at profit (if they even made an attempt at all) came from advertising, most of which also came from other companies with the same vaporous models. The few real companies like Amazon weren’t enough to support all of the vapor.
And that’s the same sort of bubble that bitcoin has. Almost nobody wants bitcoin for what they can do with it; they just want bitcoin because other people want it, and the other people want it for the same reason.
I want dollars because I can use them to pay my rent and buy groceries and so on. In fact, practically speaking, dollars are the only way I can do those things. As long as I continue to want an apartment and food and so on, I’ll need dollars. What’s the comparable “I want bitcoins because…”?
Yeah. If you went back in time, remembering only “The Internet is going to be huge,” your odds of a successful investment are pretty small - you could have hit on Google or Amazon, but more likely on one of the tens of thousands of other Internet startups that went nowhere. If we look today only at the Internet companies from the 1990s that are still around, the success rate looks amazing - but that’s survivorship bias. A similar thing happened with railroads - hundreds of them were started, and a couple of them made huge amounts of money, but almost all of them went broke.
It’s possible that one digital currency will become a huge success and that anyone who invests in it now will become a multibillionaire, but no one knows which currency that is.
Shakeouts do happen, but people were betting on the latest dot com because they thought then, as now, that if people think a particular stock has value, then it has value. Mark Cuban essentially made that comment in reference to GME and AMC.
Sure, that’s true – until it isn’t. Real investing is based on more than just making a bet that the value will take off. Anything to the contrary is gambling, plain and simple. And over the long haul, gamblers always lose.
Only when the house has the edge. Venture capitalists expect that 9 out of 10 bets will go to zero, but the final one will grow 100x. Sometimes they lose anyway, of course. Which means it helps to be rich if you’re a VC, since you can take bigger risks. The rest of us need to look at the broader market.
The NASDAQ was 5050 at its peak in 2000. A couple years later, it dipped to 1200. Anyone that bought high and sold low lost 75% of their money. Today, it’s at 14,000. Anyone that bought at the dot-com peak has almost tripled their money. That’s still a pretty good return (5% annualized) for buying at the absolute top of the bubble. If you bought at a more reasonable level (neither at the peak nor the bottom), you did even better.
I don’t know yet whether there’s anything fundamental to the crypto boom. I think it was pretty obvious that there would be winners to the dot-com boom even if you couldn’t say whom.
The “House”, in this case, is the masses of speculators who believe in digital unicorns.
And to be clear, what I was responding to initially was your dismissal, based on the previous dot-com bubble:
It’s a weird statement since it’s undeniable now that the internet and a constellation of related technologies are in fact “the new economy”. And if you invested in a broad spectrum of companies (instead of betting it all on an unknown few), you made out pretty well in the long run.
I think it’s a bad analogy to cryptocurrencies since the fundamental value of the internet is obvious, even if we didn’t quite know then how it would play out, vs. crypto where even the fundamental value is not so obvious.
Dude, I was never betting against the internet; it was obvious to me as early as 1995 that this was the next big thing. And I had no idea about investing back then. No, I was betting against the idea that cutepuppies dot com was worth $300/share because…reasons.
Fine, but webvan.com and pets.com also crashed. Today, we have equivalents to those that are successful. The fundamental business model worked, it just wasn’t quite the right thing at the right time, or maybe the companies were just poorly run.
The dot-com shakeout left a few survivors, as we might expect since the fundamentals were there. The upcoming crypto shakeout may not leave any survivors.