For a reference point, when I was unemployed and between jobs, I got involved with Neovim for fun, and after some contributions, I eventually tried some full(ish)-time paid work. I wrote the native lua LSP client (:h vim.lsp, and the nvim-lspconfig repo) for Neovim in a few weeks for about $3k USD (circa 2019)? This amount could fund quite a lot of work to be sure.
I’ve read so many news stories of people gone missing who had been know to have sole access to bitcoin wallets with large amount of bitcoins in them.
I wonder how people at large crypto exchanges handle that. Perhaps shamir share the access to the pkey password and store parts at secure places like a bank? And make official access protocol akin to dnssec, but simplified?
I worked at a crypto exchange, yes we used shamir shares. But probably not as sophisticated as you're thinking, there was basically one big "break glass" text document with all the keys. And then a hand-rolled software on each person's laptop to distribute the plain text and run / practice the 3/5 recovery ceremony. So anyone losing their device would be equivalent to someone quitting and require its own ceremony to reissue a key, but I don't think that ever actually happened.
We explored using smart contracts to have logic perform the 3/5 consensus rather than a cryptosystem, but that was never rolled out while I was there. Social recovery wallets in general did not take off, which was a big learning moment for me that very few people actually cared about the technology and what they really wanted was an app with as many gambling features as possible that uploaded their keys to google drive.
> Social recovery wallets in general did not take off, which was a big learning moment for me that very few people actually cared about the technology and what they really wanted was an app with as many gambling features as possible that uploaded their keys to google drive.
People who are not HN-profile never care about the technology, and always care about usable, convenient features. The shocker is: most HN-profile people feel the same way.
Yes, I do agree with this. What rubbed me the wrong way was all the cynical people who would talk endlessly about how revolutionary the tech was and all the possibilities it opened to get others invested, but ran companies that were just casinos and actually could have simpler operations without the crypto parts! Most people in pre-NFT crypto has someone in their network who worked on an outright Ponzi scheme.
> but ran companies that were just casinos and actually could have simpler operations without the crypto parts
Creating a product for the sake of using a technology is a flawed order of operations. However, the glitz and glamour of a new money for a new internet is enticing with a lot of promise. I'm a crypto bro, but my crypto confidence has waned recently. My confidence in the USD has also waned.
Improving or standardizing the approach is all well and good, but if it's not natively integrated into MEW / MM / Coinbase Wallet / Phantom it's sort of irrelevant. Argent was the best attempt but they failed so bad commercially that they pivoted to a google drive recovery mechanism and changed their name.
The other day a neighbor asked me about AI. I said I wasn’t really up to date with things anymore. They asked: like what things? And then I said: like the Astra model that OpenAI released yesterday, I know nothing about it. And they were like: “bro, yesterday?! And you feel you’re not up to date?! Pfff”
A better solution (than Shamir secret sharing) are threshold signatures.
The difference is that with Shamir you have to reconstruct the private key in one place before you can sign. With threshold signatures multiple servers can collaboratively sign without ever reconstructing the private key in a single place.
For chains like Solana, Aptos, SUI that use ed25519 (schnorr signature), there's a pretty clean solution called FROST.
For Bitcoin and Ethereum/EVMs that use ECDSA it's a bit trickier but there's been a lot of research recently, so there are solutions.
Large exchanges handle this very simply: If they have the keys, it goes to the inheritor(s) once they get a court order. If they do not, it goes nowhere
There are plenty of legends of old wallets "waking up" due to the person getting out of prison, as it seems the only plausible way someone can sit on 30 BTC for 10-15 years, through all the news and price movements, without touching it once. One would only expect to hear about the successful seizures law enforcement makes.
Pretty much everyone. There's a reason people lost money with ftx, Mt gox and other scams.
Managing your private keys is cumbersome, error prone, requires some computer literacy, the list goes on.
Tbh I have been kind of impressed by how fast L2 businesses brought back centralisation in every possible way. I guess it's more efficient for them.
In the same way, the internet was supposed to be decentralised, everyone being in charge of their own servers. But in practice nobody has the time to set up their own MX servers.
It is an interesting fact about Bitcoin in general. There are 21M tokens in total AND some percentage are lost every year. Run this simulation long enough and there will be very few active Bitcoins remaining.
21M is the theoretical cap. At the moment there are 20M and more are constantly being mined. Miners have to convert bitcoin into real currency to pay for their electricity both for mining and transaction fees. This means that there is always a supply of bitcoin for sale. Which is fine if there is still demand for new bitcoin, but who's buying bitcoin these days? It has underperformed both the S&P 500 and gold over the last 5 years. I expect bitcoin inflation to continue. (AKA the bitcoin price to continue to go down).
Worth pointing out that the monetary policy of bitcoin is not written in stone; all you need to change it is a majority of hashpower. The current chain of bitcoin mainnet includes hard forks, like this one due to miners' manual intervention over a software bug that was exploited: https://en.bitcoin.it/wiki/Common_Vulnerabilities_and_Exposu...
> all you need to change it is a majority of hashpower
Or rather the majority of actual users. Hard forks occur because people install and use the updated clients. If 90% of the miners decide to mine on the “bad” chain, but 90% of users switch to the “good” one instead, the “good” would likely still win out in terms of market cap and recognition (and the miners would naturally have to follow).
Because difficulty does not adapt dynamically, if the miners do not move then the fork will be defunct because it will take literally days to weeks to mine a block, and to mine the 216 blocks that would trigger a difficulty adjustment would also take proportionately longer. So transactions would sit in the mempool and the currency would be mostly useless.
Agree. Bitcoin is more of a social concept / weighted democracy than an algorithm. If the participants decide that a new / incompatible hashing algo is needed (e.g. post quantum), it will be forked and everyone will use that.
The odd part is, the governance model is not defined. At the end of the day, some person or group has to decide what the new "real" Bitcoin is and the average holder just has to go along with it.
I think for most bitcoin users, the main usability concern wrt forks is being on the most secure chain; i.e. hashpower. If you're willing to trade being on the most secure, most historic chain for specific technical features then you're probably on an altchain already. In practice every hard fork in history the chain with the most hashpower has retained the ticker, meanwhile the users are never organized enough to do anything but follow that decision.
> every hard fork in history the chain with the most hashpower has retained the ticker
The opposite is also true – most miners have stayed on the “official” chain :-) I do agree that having more hashpower helps, but ultimately all users (including miners) determine the price on the market.
Deflation is a good thing, it rewards delayed gratification.
Those evil Keynesians have convinced the world a little bit of inflation is good. It isn’t. Losing purchasing power on your money is a bug.
Nothing wrong with putting money under a mattress for 100y if the value of money is not evaporating.
For most of human history the money was stable. It’s the disasters of 20th century wars that eroded the value, and 21st century lack of monetary discipline that keeps driving it down now.
It's nice when I do it. Not so nice when everyone else does it. If sitting on the money has better returns than running a supermarket, why run a supermarket? Any investment has to beat deflation. Why hire people? In fact maybe I should fire everyone to hold on to more capital and spend as little as possible...
> If sitting on the money has better returns than running a supermarket, why run a supermarket?
First of all, because not everyone starts with inherited wealth. Also because ideally running a supermarket should give you more money even in a deflationary world. Worst thing is that you gain less money on day N+100 vs day N, but it does not mean you lose money or stop gaining it.
> First of all, because not everyone starts with inherited wealth.
So how are you going to build the supermarket?
> Also because ideally running a supermarket should give you more money even in a deflationary world.
If it needs to give you more money than just saving the investment (which it should, you need to be rewarded for the risk or you would just save the money), obviously the profit margin has to be higher than it currently is, which would increase prices.
> First of all, because not everyone starts with inherited wealth.
So then you need an investment; you're going to have to return a multiple of the deflation rate since the risk of your supermarket shutting down is probably higher than the currency changing course.
But a deflationary system rewards inherited wealth. It's a pyramid scheme where the person at the top splits their big piles up into smaller piles, selling them to newer people, who then sell their smaller piles to newer people...
So you'd be working for 0.000000000000000001 coins per day at the amazon warehouse, while Bezos has 500000 coins because he was born with them. There would never be a way for you to get 500000 coins, because there are only 20m coins in existence.
The easiest thing for people to do in that situation is just create another Bitcoin. The person that has the 500K original Bitcoin is free to trade with themselves. This is why Bitcoin is much more of a social network than an algorithm.
> Also because ideally running a supermarket should give you more money even in a deflationary world.
Running a super market involves owning physical goods for some period of time. With deflation, the price you can sell those goods for drops while you are holding them. In fact most economic activity involves paying for inputs (labor, materials, etc) and then later getting paid for your outputs. Deflation directly impacts profitability and can cause losses.
Since deflation causes demand to drop as economic actors wisely choose to start hoarding currency and buying less, this causes a feedback loop where deflation can spiral.
Similarly, inflation causes demand to increase since holding currency is unwise and it is better to spend or invest that currency than hold onto it.
These two patterns mean that the neutral state (no inflation or deflation) is unstable as any deviation above or below starts a feedback loop until things fall apart. This is the boom and bust economic cycle that modern monetary management is supposed to ameliorate.
Given that you want economic growth, the best solution is to try to stabilize around a small fixed amount of inflation. Arguing for the end of inflation is arguing for the end of economic growth.
My family needs food though. Perhaps a supermarket is a poor example. I think people might purchase fewer luxury goods in a deflationary world which TBH I'm not sure is a bad thing.
To put it another way, the model you're presenting reads well in an economics textbook and I'm sure is exactly how we justify our MMT social policy but it doesn't fully account for actual human behavior. I'll buy necessities (house/food/water/electric/communication) even in a deflationary economy.
When was the last time you went to the grocery store and thought "I better buy this milk today because my money will have less spending power tomorrow"?
An economy driven only by spending on bare essentials would be worse than Great Depression level malaise and stagnation. Where are you imagining growth would come from?
The point of money is not to reward delayed gratification. The point of money is to efficiently tabulate human preferences, and deflation directly counteracts this by introducing potentially unbounded latency at every step. That's why it destroys economies, as it has throughout history.
The problems with using physical gold as currency are very well known. When population would increase, or when someone would hoard it, it would cause deflation. Likewise, when a new deposit of gold was found, it would cause inflation.
This is, in part, why there were expeditions to find gold.
The Japanese economy is not, in any sense, destroyed. It doesn't get the infinite exponential growth unhinged economists want, but life on the ground is stable, wealth inequality is low, cost of living is low, average quality of life is very high. It is the perfect counterexample to the doctrine of chasing line go up.
This is a almost entirely oversimplified take on the Great Depression to the point of meaninglessness
For a decade before Black Thursday,there had been many things that were signs that the economy was having trouble even if the "Roaring Twenties" made it seem like everything was fine.
IMO the largest issue was that American farm sector was teetering on the edge because of the dramatic drop in crop prices. This deflation screwed over farmers who mechanized with lots of debt, which because of said deflation, became impossible to pay off.
The fed also implemented rate hikes to curb speculation right before 1929 which froze up credit contributing to deflation
The problem of the Great Depression was NOT the stock market crash, it arguably wasn't even the real start, just the most "spectacular" one. The problem was that with the entire economy deflating, it caused a massive downward spiral that the Fed did not really have the tools to fix, because of Gold Standard and lack of legal authorization.
This was why the Govt went to extreme lengths to try and figure out how to raise prices, which is why you get programs to pay farmers to NOT grow food, and mass killings of pigs and cows and other farm animals, even as the farmers who raised those lifestock went hungry.
So no, speculation was not the problem, it just sparked the key issue of the fact that the economy was deflation uncontrolled, but was just hidden.
This is a complex topic and I think you have done a good job of summarizing the main issues. To add a little context:
>...that the Fed did not really have the tools to fix, because of Gold Standard and lack of legal authorization.
This was just bad policy by the Fed. The Fed had the legal authority to be the lender of last resort and could have prevented the bank failures. Many explanations have been given over the years as to why the Fed didn't provide liquidity. Because the Fed failed to supply emergency liquidity, the U.S. money supply plummeted by nearly 30% over the next couple of years, which essentially turned what likely would have been a recession into the Great Depression.
This is not to say the gold standard was not a problem. During the 1930's, leaving the gold standard was one of the few good moves done to help the economy by the federal government.
The idea that you can put away an amount of money under your bed that buys 1,000 loaves of bread or one GPU, leave it there for decades, and then have it buy exactly the same number of loaves of bread or GPUs is a fantasy. You can hold onto the shiny rock but you cannot stop the world rotating around you and changing all its relative prices.
> For most of human history the money was stable
Achieved by a combination of restrictions on trade, price stability laws, occasional crippling shortages, and quietly shaving bits off old coins. A much poorer world.
This would be more convincing if it wasn't from a site trying to sell me gold. Do people really believe that the mechanization of clothing production in the industrial era has made no difference to "real" prices?
I think deflation-based economy could produce some interesting capital-allocation environemnt. Investment offering a 2% real return becomes unattractive if cash itself earns 2% real purchasing-power yearly. You could argue this raises the hurdle rate for investment and eliminates low-quality projects. And the counterargument is exactly the same: it raises the hurdle rate for investment and therefore some potentially good projects would never receive funding. And thats probably where the intellectually interesting argument really lives, rather than in inflation good deflation bad
The right thing would be to have 0 change in the value of money as long as the right amount of money exists.
The right maount of money is the amount of money we as normal humans need to work with (buying and selling stuff).
Inflation and deflation are results of too much money or too little money in comparision to the production capability of a society.
If i save today for my retirement and money gets less valuable when i'm retired, i have to give more 'saved' capacity back to get the real capacity (people taking care of me) and if i have more value, the others have to do more for me.
Controlling this is 'work' from experts and is not solved by bitcoin btw.
The normal term would be “velocity” of money, btw. Its a key consideration in addition to total supply whenever you need to evaluate inflation or manias.
Why does everyone assume that we're the ones keeping money under the mattress, not the ones who would have been paid by money otherwise not spent? All transactions have two sides, no?
> Deflation is a good thing, it rewards delayed gratification.
"Delayed gratification" is also provided by investments producing returns. An economy with lots of investors will outperform one where people stuff their cash into their mattress, and deflation makes it very hard for potential investments to beat that strategy.
> For most of human history the money was stable.
[citation needed]
The Spanish empire was driven to collapse by hyperinflation. Even in the US, there were financial collapses in the 19th and 18th century. Bank runs have been a thing for as long as banks have: https://en.wikipedia.org/wiki/Bank_run
Your premise is based on faulty assumptions. The existence of credit itself is what causes monetary instability, and without credit the world would look very different.
Money is destroyed when a loan is paid back. Private credit does not expand the monetary supply permanently. Only the state can increase the money supply.
Your understanding of monetary theory is somewhere between 110 and 5,000 years off. Furness had a pretty cogent explanation of a monetary system without central authority or functional currency about 100 years ago with the Yap. They even managed to have bouts of inflation without the concept of a bank or state.
credit does provide a kind of flexibility that is sometimes needed, though. However, predatory lending, and the endless stacking of recursive loans, and government money printers are a massive stability issue that we're running into globally, and have (as you say) run into multiple times, historically.
My thought on this would be a dynamicaly stable currency. estimate debt and transaction activity, and the more debt and more liquid activity there is, the more deflationary currency should be. the less debt there is, and the less of a percentage of the money is actually in-use, the more inflationary the currency should be. this, though, is fairly off-the-cuff.
If you have a brilliant technical solution that requires throwing out all conventional economics, you don't have a brilliant technical solution. Bitcoin is rotten to its core and every excuse you make for it proves the point.
>For most of human history the money was stable.
Absolutely ridiculous. People have been counterfeiting and debasing money for as long as there has been money.
That only makes sense if money is a durable good destroyed by use. But money is improved by use and lost when put under a mattress. In economics terms, MV=PQ, and your proposal sets V low, which harms Q (goods available for sale)
No, no. The issuer of your money is really, really happy when you don't use the money. Because that means they can issue more money, without causing inflation to spike.
..and, you think that covers both individual and collective good?
..balance in all things. Neither being completely stingy, individually, nor being excessively spendy will benefit us, individually or collectively. ..but there are times for either.
I wonder if there's a way to quantify that and put a variable on the conditions, and have an inflationary/deflationary currencynthat is dynamically stable depending on conditions.
..i mean, individually, most people will eventually spend, if they have much saved and it benefits them to do so. but occasionally, we do need a kick in the pants. whenever the economynis in gridlock, that's the time for inflation. ..but when people are spending excessively, it's a time for deflation, which discourages taking on debt, and pushes the economy towards real wealth. rewarding long-term thinkers is valuable, and has a very broad effect on society.
This can be said about many conflicts between the individual and society, though. In many ways we are prevented from just taking what we want and “keep us in shape” because if everyone did the same it would be a problem.
Hahahaha, oh my. You think the world was some idyll halcyon pre bretton woods? My man Enmentrna is going to come back and declare a jubilee for your great revelation. When has any historic monetary system been “stable” for an appreciable amount of time. Debasement is a very literal ancient word and problem.
Even your straw man 20th century cut off is hilarious where you just kind of forget about 1873? Or maybe that decade is your shining example of the benefits of deflation. So much joy and global prosperity the peasants just forgot how to eat. Its cool, Bismarks destruction of the bimetallic system really helped usher in that age of stabikity from the international gold standards.
Wildly inaccurate, thanks to forgery and coin shaving - sometimes even governments officially reduced the silver or gold content to make more money out of their coin reserves. Even when proto-banks began issuing letters of credit, the quasi-fiat letters were subject to loss of confidence.
However, the availability and quasi-fungibility of other silver/gold currencies meant that if you didn't trust Edward's penny, you could use a Dutch penning instead. That provided an alternate path to dampen inflation, as long as the dominant currency was coinage.
But it was equally hard to buy a pig or a new suit with silver pennies by the 20th century. Bank notes, even when theoretically backed by exchange for their value in precious metals (the Gold Standard), were even easier to forge, and suffered from "loss of faith" inflation (runs on banks meaning they couldn't practically be exchanged for 14 pounds of silver pennies).
The idea that deflation is built into Bitcoin is exactly equivalent to saying "the real value of bitcoin will always increase" which is an absurd premise.
Bitcoin is deflationary only in a hybrid Keynsian - Austrian worldview. In the Keynsian worldview it cannot by definition be deflationary because that would mean that the value is always increasing which is just kind of a mad thing to believe. In the Austrian worldview it is not deflationary because the amount of Bitcoin is always increasing by design. Only if you accept the Austrian framing of "deflation is when you decrease the money supply" together with the Keynsian framing of "money supply is measured in real terms not nominal" do you arrive at the idea that it could be deflationary, and there are exactly zero economists who believe both of these things.
I suspect it was a deliberate strategy to create scarcity, allowing the original creators to massively cash out. If you make an inflationary distributed currency, it may work better but it's a bit harder to get rich on it.
During much of the industrial revolution, gold also rose in real price. But people still did business in gold standard countries.
(Hint: the gold might be under a mattress or in a vault, but you can still an almost arbitrary amount of gold denominated debts and loans and deposits.)
There is zero evidence that deflation has any effect on spending.
At the micro level, the change in price is too small for every day purchases. Would you starve yourself for one day because the pizza will be one cent cheaper tomorrow?
At the macro level, every interest rate will be adjusted based on the base inflation/deflation rate, so the net effect is zero. Banks will offer a higher profit rate for their savings account to entice people to deposit their money in the bank instead of their mattress.
It's not silly, it harnesses some of the mechanics behind ponzi schemes to encourage viral spread. Early entrants are incentivized to evangelize it to newer ones
That depends on whether the public key has been exposed.
Bitcoin addresses encode the ripemd160 hash of the public key, so by default when payments are made to new addresses they are not quantum crackable.
But when someone spends from an address they publish the public key to the chain as part of the spend. From then on, any new deposits sent to the same address are at risk of quantum attack
Suppose I make a paper wallet on an offline PC, write down the address and discard both keys. If I now send some BTC to this address, how does the client figure out the public key?
Taxing capital assets by taking large portions of their value destroys value by forcing liquidity events. Think forcing sales of farms, factories and domain names.
I much prefer land value taxes (and similar taxes on non capital wealth like jewellery) and leisure taxes (ideally taxing people for every hour they don't work). Of course these are difficult to administer in practice, but British business rates and US overtime tax discounts effectively approximate this.
I had the same reaction. It also seems easy to pull apart. What about disabled people who are unable to work?
I think something more like "investment income should be taxed at a higher rate than income earned through labor," accomplishes similar goals but is more intuitive and less problematic.
This is a false dichotomy. Laborers could just as easily invest in job-creating endeavors as passive income earners. All taxes cause economic drag, not _just_ business and investment income taxes. The economy includes every participant, and laborers are not an externality.
I'm sorry, I don't follow. Yes, people who are labourers could also somehow creating funding pools that are big enough to start companies, but so what? That doesn't negate the fact that they will be disincentivised to do so by a tax on investment income.
Not as dystopian as the ability to get wealthier without working and pay no taxes (and even IF you sell to realize gains, your tax liability is still lower than someone who made money through labour)
Your definition of "wealthier" is stupid, though, because it relies on a measure that doesn't actually apply to the person in question. A share's price is just "the last sale price of the same type of share", and that is multiplied by the person's shareholding to get their "wealth". However they don't have any more money by this happening - it's just a huge assumption that the share price would stay the same across all their shares if they sold right now.
The time we actually know what money they would make, making it concrete for tax, is when they sell. And we already do this.
In an ideal world, the government would sell some of whatever shares it gets at good times to pay off debt, for example when interest is high just before a tranche of government bonds expire
Apparently not. Googling, no one seems to actually do it in spite of some politicians talking about it.
It seems quite a bad idea from a practical point of view.
Not so much because it's socialist but it leads to all sorts of extra paperwork for no good reason. Like say you buy some utility company share for your retirement in 20 years and it fluctuates. Do you want to be valuing it and paying tax and then claiming it back when it goes down every year for 20 years or just declare the gain at the end?
Really? How? Show me a country that taxes wealth and is prosperous. Taxing unrealized gains results in owing tax on money you don’t have and makes starting a funded company impossible.
Why not? We tax property every year on it's assessed value. I think it's pretty clear that the wealthy will need to pay more taxes throughout the world to deal with an aging population.
I'm a little tired of billionaires 'buy, borrow, dying' to get around the paltry taxes they're currently subject to. We need a harder tax to dodge.
Why would taxing the wealthy be relevant to an aging population? Do you think that we tax stuff? We just tax money to buy stuff. If a nation produces less stuff, then spending more will just cause prices to go up, but will not result in the production of more stuff to go around.
Because our current social safety nets all work by assuming the next generation pays for the care of the current elderly. Those elderly do need 'stuff' they need doctors and nurses and nursing homes. Thus taxes will have to go up, and if it has to, it may as well be progressive.
Do we have an estimate on the number of people capitalism has killed? Serious question.
Include deaths due to poverty and lack of affordable healthcare under capitalism, overworking and dangerous working conditions, and all wars and counter-insurgency waged on alternative economic systems globally.
You'd need a definition of capitalism first. Since for most people, it's just the default mode of living -- e.g. the very term "capital" comes from "head", as in "head of an ox", as early cattle culture practiced capitalism, so it predates the agricultural revolution and was practiced by nomadic groups.
A lot of the language, for example "interest" comes from cattle culture. If you think about it, a cow produces other cows, so it bears interest. You can eat the cow (consume capital) or let the cow produce a stream of milk. Ownership of cows gave you great power.
So asking "the number of people killed by capitalism" is like asking "how many people were killed by everything that's not communism", which is pretty inane, since the point of communism is that it is an ideology, and mass killing for an ideology (that's not religion) is a part of the modern world, not the traditional world of cows and capital. The first ideological genocide was the slaughter of the Vendee peasants by the French revolutionaries, but it was merely the first of many times that urban ideologues slaughtered rural farmers.
Man I always love the straw men you guys stand up to fight this. More taxes = socialism, and not nordic socialism, no, actually, communism. Therefore mass death / genocide. Ok. Sure jan.
Nordics are not socialist[0]. Socialism is central planning and control, sometimes created out of mass killings[1] [2], and often creating many deaths just from incompetent central mismanagement[2] [3] or grisly bureacratic rules[4].
If you tax unrealised gains, say Elon Musk's SpaceX shares, all that means in practice is the government takes a certain percentage ownership stake in SpaceX every year until he has nothing left to tax, or he sells it to someone else and pays tax on that sum (but who would buy anything if it's going to be taxed away?)
What a nonsensical argument. Yes, that's why we're all living in government owned housing, because if you tax something, it inevitably gets taken away, and nobody wants to buy houses, cause the government is just gonna take it away...what?
If your wealth is 100% ownership of Tesla, say, and the government imposes a 5% wealth tax, you have to sell 5% each year of your ownership stake (because the lie of all this is it isn't wealth being taxed, it's ownership) and give it to the government. Until you don't own it any more.
And if you think "well, it doesn't have to go to the government", who else will take it? Who would buy something that they would have to sell 5% of each year? The government, being the only thing that wouldn't be affected by a wealth tax, would become the de facto buyer.
Communism is not socialism. What Stalin, Mao and Kim Il-sung did was wrong because they did basically the exact opposite of a socialist policy, centralizing power out of workers hands and taking all surplus value into the central government instead of distributing it.
They all turned into paranoid dictators who did everything they could to stay in power, except for Mao who got lied to by other party leaders and regretted it in his final years. None of them represent what socialism really is. Tankies who worship them are a small minority.
Someone says they're going to make everything equal and they just need enough power to do it. Trouble is, that requires all the power, and a) the halfwits who end up in power are nowhere near as good as the people doing the work and taking the risks at deciding what to do and how to do it and b) the people who want all the power can just say that and the credulous believe them.
Edit: it seems perfectly acceptable and ideal even for society to say there is a cost to wealth. As others have mentioned Neovim is in the US is likely mostly tax exempt so this hypothetical doesn't even apply to them.
We slid down that slope a long time ago. Taxes are good and pay for my important things, up until the moment they pay for someone else's important things, then it is theft.
Taxes on unrealized gains are good? Are you nuts? No sane country has them, and it is one of the stupidest ideas that NL came up with. Way to squeeze middle class even more.
I checked their official donation channel is OpenCollective. I think the Bitcoin address is no longer being used and they just forgot to update the footer
I mean, it's the opposite of that; it's forced illiquidity when people lose access to their keys. There is no way to gain access to those coins and you cannot "force" liquidity on the bitcoin protocol.
In Germany at least if you've held the coin(s) for 7 years before selling you don't need to pay tax on the profit.
Not sure how this applies to donations though, and of course this will almost certainly be changed in the future, .nl is leading the way in taxing _unrealised_ gains; we are sure to follow!
For a reference point, when I was unemployed and between jobs, I got involved with Neovim for fun, and after some contributions, I eventually tried some full(ish)-time paid work. I wrote the native lua LSP client (:h vim.lsp, and the nvim-lspconfig repo) for Neovim in a few weeks for about $3k USD (circa 2019)? This amount could fund quite a lot of work to be sure.
> wrote the native lua LSP client ... in a few weeks for about $3k USD (circa 2019)
That extrapolation is missing the 1000s (thousands) of commits + person-years of work spent on maturing vim.lsp since those few weeks.
Hope to see you around again norcalli.
Thank you, built in LSP is invaluable.
I’ve read so many news stories of people gone missing who had been know to have sole access to bitcoin wallets with large amount of bitcoins in them.
I wonder how people at large crypto exchanges handle that. Perhaps shamir share the access to the pkey password and store parts at secure places like a bank? And make official access protocol akin to dnssec, but simplified?
I worked at a crypto exchange, yes we used shamir shares. But probably not as sophisticated as you're thinking, there was basically one big "break glass" text document with all the keys. And then a hand-rolled software on each person's laptop to distribute the plain text and run / practice the 3/5 recovery ceremony. So anyone losing their device would be equivalent to someone quitting and require its own ceremony to reissue a key, but I don't think that ever actually happened.
We explored using smart contracts to have logic perform the 3/5 consensus rather than a cryptosystem, but that was never rolled out while I was there. Social recovery wallets in general did not take off, which was a big learning moment for me that very few people actually cared about the technology and what they really wanted was an app with as many gambling features as possible that uploaded their keys to google drive.
> Social recovery wallets in general did not take off, which was a big learning moment for me that very few people actually cared about the technology and what they really wanted was an app with as many gambling features as possible that uploaded their keys to google drive.
People who are not HN-profile never care about the technology, and always care about usable, convenient features. The shocker is: most HN-profile people feel the same way.
Also see: https://m.xkcd.com/2501/
Yes, I do agree with this. What rubbed me the wrong way was all the cynical people who would talk endlessly about how revolutionary the tech was and all the possibilities it opened to get others invested, but ran companies that were just casinos and actually could have simpler operations without the crypto parts! Most people in pre-NFT crypto has someone in their network who worked on an outright Ponzi scheme.
> but ran companies that were just casinos and actually could have simpler operations without the crypto parts
But during the big buzz, the crypto parts were what got those companies any exposure at all.
Yes. It really was a toxic mess wasn't it?
Has cryptocurrency gone away?
A lot of the hype has, certainly the hype that propped up the companies the thread starter was referring to.
Ding ding! Crypto still exists, but the tech grifters have all pivoted to AI and been replaced by MAGA grifters.
> but ran companies that were just casinos and actually could have simpler operations without the crypto parts
Creating a product for the sake of using a technology is a flawed order of operations. However, the glitz and glamour of a new money for a new internet is enticing with a lot of promise. I'm a crypto bro, but my crypto confidence has waned recently. My confidence in the USD has also waned.
> Social recovery wallets in general did not take off
ERC7093 has finally added this
Improving or standardizing the approach is all well and good, but if it's not natively integrated into MEW / MM / Coinbase Wallet / Phantom it's sort of irrelevant. Argent was the best attempt but they failed so bad commercially that they pivoted to a google drive recovery mechanism and changed their name.
> Also see: https://m.xkcd.com/2501/
The other day a neighbor asked me about AI. I said I wasn’t really up to date with things anymore. They asked: like what things? And then I said: like the Astra model that OpenAI released yesterday, I know nothing about it. And they were like: “bro, yesterday?! And you feel you’re not up to date?! Pfff”
A better solution (than Shamir secret sharing) are threshold signatures.
The difference is that with Shamir you have to reconstruct the private key in one place before you can sign. With threshold signatures multiple servers can collaboratively sign without ever reconstructing the private key in a single place.
For chains like Solana, Aptos, SUI that use ed25519 (schnorr signature), there's a pretty clean solution called FROST.
For Bitcoin and Ethereum/EVMs that use ECDSA it's a bit trickier but there's been a lot of research recently, so there are solutions.
Worse when crypto exchange bosses go missing https://archive.is/lPpRz
Or this. https://www.osc.ca/quadrigacxreport/
:'(
Large exchanges handle this very simply: If they have the keys, it goes to the inheritor(s) once they get a court order. If they do not, it goes nowhere
but what sort of people keep their bitcoins on the exchange ? the whole point is about not being seizable by dirty governments...
Traders; low information investors; people who are not 100% confident in their personal infosec and not willing to lose their bitcoins on their own.
"Not being seizable" hasn't really worked out for bitcoiners who've been arrested. Or for that matter robbed at gunpoint.
> "Not being seizable" hasn't really worked out for bitcoiners who've been arrested. Or for that matter robbed at gunpoint.
This seems orthogonal to the ability to seize assets.
There are plenty of legends of old wallets "waking up" due to the person getting out of prison, as it seems the only plausible way someone can sit on 30 BTC for 10-15 years, through all the news and price movements, without touching it once. One would only expect to hear about the successful seizures law enforcement makes.
Pretty much everyone. There's a reason people lost money with ftx, Mt gox and other scams.
Managing your private keys is cumbersome, error prone, requires some computer literacy, the list goes on.
Tbh I have been kind of impressed by how fast L2 businesses brought back centralisation in every possible way. I guess it's more efficient for them.
In the same way, the internet was supposed to be decentralised, everyone being in charge of their own servers. But in practice nobody has the time to set up their own MX servers.
> but what sort of people keep their bitcoins on the exchange ? the whole point is about not being seizable by dirty governments...
For most people, cryptocurrency is just another stock market / betting app.
Most people don't care about that at all
"Number go up" people
Hype vibe investors, probably.
> not being seizable by dirty governments
If you believe that, I have some land to sell you
People who want to be scammed.
I hope they still have the private key.
It is an interesting fact about Bitcoin in general. There are 21M tokens in total AND some percentage are lost every year. Run this simulation long enough and there will be very few active Bitcoins remaining.
21M is the theoretical cap. At the moment there are 20M and more are constantly being mined. Miners have to convert bitcoin into real currency to pay for their electricity both for mining and transaction fees. This means that there is always a supply of bitcoin for sale. Which is fine if there is still demand for new bitcoin, but who's buying bitcoin these days? It has underperformed both the S&P 500 and gold over the last 5 years. I expect bitcoin inflation to continue. (AKA the bitcoin price to continue to go down).
Worth pointing out that the monetary policy of bitcoin is not written in stone; all you need to change it is a majority of hashpower. The current chain of bitcoin mainnet includes hard forks, like this one due to miners' manual intervention over a software bug that was exploited: https://en.bitcoin.it/wiki/Common_Vulnerabilities_and_Exposu...
> all you need to change it is a majority of hashpower
Or rather the majority of actual users. Hard forks occur because people install and use the updated clients. If 90% of the miners decide to mine on the “bad” chain, but 90% of users switch to the “good” one instead, the “good” would likely still win out in terms of market cap and recognition (and the miners would naturally have to follow).
Because difficulty does not adapt dynamically, if the miners do not move then the fork will be defunct because it will take literally days to weeks to mine a block, and to mine the 216 blocks that would trigger a difficulty adjustment would also take proportionately longer. So transactions would sit in the mempool and the currency would be mostly useless.
Fair point. Maybe you could hardcode a lower difficulty in the fork for the next couple dozen blocks, and schedule an adjustment after that?
Agree. Bitcoin is more of a social concept / weighted democracy than an algorithm. If the participants decide that a new / incompatible hashing algo is needed (e.g. post quantum), it will be forked and everyone will use that.
The odd part is, the governance model is not defined. At the end of the day, some person or group has to decide what the new "real" Bitcoin is and the average holder just has to go along with it.
I think for most bitcoin users, the main usability concern wrt forks is being on the most secure chain; i.e. hashpower. If you're willing to trade being on the most secure, most historic chain for specific technical features then you're probably on an altchain already. In practice every hard fork in history the chain with the most hashpower has retained the ticker, meanwhile the users are never organized enough to do anything but follow that decision.
> every hard fork in history the chain with the most hashpower has retained the ticker
The opposite is also true – most miners have stayed on the “official” chain :-) I do agree that having more hashpower helps, but ultimately all users (including miners) determine the price on the market.
Seems pretty silly to build in deflation into a currency. It incentivises putting your money in a mattress for 100 years.
Deflation is a good thing, it rewards delayed gratification. Those evil Keynesians have convinced the world a little bit of inflation is good. It isn’t. Losing purchasing power on your money is a bug.
Nothing wrong with putting money under a mattress for 100y if the value of money is not evaporating.
For most of human history the money was stable. It’s the disasters of 20th century wars that eroded the value, and 21st century lack of monetary discipline that keeps driving it down now.
It's nice when I do it. Not so nice when everyone else does it. If sitting on the money has better returns than running a supermarket, why run a supermarket? Any investment has to beat deflation. Why hire people? In fact maybe I should fire everyone to hold on to more capital and spend as little as possible...
> If sitting on the money has better returns than running a supermarket, why run a supermarket?
First of all, because not everyone starts with inherited wealth. Also because ideally running a supermarket should give you more money even in a deflationary world. Worst thing is that you gain less money on day N+100 vs day N, but it does not mean you lose money or stop gaining it.
> First of all, because not everyone starts with inherited wealth.
So how are you going to build the supermarket?
> Also because ideally running a supermarket should give you more money even in a deflationary world.
If it needs to give you more money than just saving the investment (which it should, you need to be rewarded for the risk or you would just save the money), obviously the profit margin has to be higher than it currently is, which would increase prices.
> First of all, because not everyone starts with inherited wealth.
So then you need an investment; you're going to have to return a multiple of the deflation rate since the risk of your supermarket shutting down is probably higher than the currency changing course.
But a deflationary system rewards inherited wealth. It's a pyramid scheme where the person at the top splits their big piles up into smaller piles, selling them to newer people, who then sell their smaller piles to newer people...
So you'd be working for 0.000000000000000001 coins per day at the amazon warehouse, while Bezos has 500000 coins because he was born with them. There would never be a way for you to get 500000 coins, because there are only 20m coins in existence.
The easiest thing for people to do in that situation is just create another Bitcoin. The person that has the 500K original Bitcoin is free to trade with themselves. This is why Bitcoin is much more of a social network than an algorithm.
But if sitting on a pile of cash provides returns, eventually all money will accumulate into the hands of a few ultra wealthy individuals. (Hmm...)
> Also because ideally running a supermarket should give you more money even in a deflationary world.
Running a super market involves owning physical goods for some period of time. With deflation, the price you can sell those goods for drops while you are holding them. In fact most economic activity involves paying for inputs (labor, materials, etc) and then later getting paid for your outputs. Deflation directly impacts profitability and can cause losses.
Since deflation causes demand to drop as economic actors wisely choose to start hoarding currency and buying less, this causes a feedback loop where deflation can spiral.
Similarly, inflation causes demand to increase since holding currency is unwise and it is better to spend or invest that currency than hold onto it.
These two patterns mean that the neutral state (no inflation or deflation) is unstable as any deviation above or below starts a feedback loop until things fall apart. This is the boom and bust economic cycle that modern monetary management is supposed to ameliorate.
Given that you want economic growth, the best solution is to try to stabilize around a small fixed amount of inflation. Arguing for the end of inflation is arguing for the end of economic growth.
My family needs food though. Perhaps a supermarket is a poor example. I think people might purchase fewer luxury goods in a deflationary world which TBH I'm not sure is a bad thing.
To put it another way, the model you're presenting reads well in an economics textbook and I'm sure is exactly how we justify our MMT social policy but it doesn't fully account for actual human behavior. I'll buy necessities (house/food/water/electric/communication) even in a deflationary economy.
When was the last time you went to the grocery store and thought "I better buy this milk today because my money will have less spending power tomorrow"?
An economy driven only by spending on bare essentials would be worse than Great Depression level malaise and stagnation. Where are you imagining growth would come from?
Surely most of the people putting their money under the mattress would still need to use a little of that money to buy food.
Yep, exactly why Bitcoin people dont understand their own system.
The point of money is not to reward delayed gratification. The point of money is to efficiently tabulate human preferences, and deflation directly counteracts this by introducing potentially unbounded latency at every step. That's why it destroys economies, as it has throughout history.
Can you provide an example of deflation destroying an economy in history? There are many more examples of inflation destroying economies.
The problems with using physical gold as currency are very well known. When population would increase, or when someone would hoard it, it would cause deflation. Likewise, when a new deposit of gold was found, it would cause inflation.
This is, in part, why there were expeditions to find gold.
Wasn't the great crisis in first half of 20th century caused by deflation?
Japan in living memory, I believe? I'm not a history buff. Google should have many examples.
The Japanese economy is not, in any sense, destroyed. It doesn't get the infinite exponential growth unhinged economists want, but life on the ground is stable, wealth inequality is low, cost of living is low, average quality of life is very high. It is the perfect counterexample to the doctrine of chasing line go up.
Are you kidding me? Have you heard of a tiny event called the Great Depression?
The Japanese Lost Decade?
Greece Debt Crisis?
Those are credit bubbles bursting, not the result of hard money.
This is a almost entirely oversimplified take on the Great Depression to the point of meaninglessness
For a decade before Black Thursday,there had been many things that were signs that the economy was having trouble even if the "Roaring Twenties" made it seem like everything was fine.
IMO the largest issue was that American farm sector was teetering on the edge because of the dramatic drop in crop prices. This deflation screwed over farmers who mechanized with lots of debt, which because of said deflation, became impossible to pay off.
The fed also implemented rate hikes to curb speculation right before 1929 which froze up credit contributing to deflation
The problem of the Great Depression was NOT the stock market crash, it arguably wasn't even the real start, just the most "spectacular" one. The problem was that with the entire economy deflating, it caused a massive downward spiral that the Fed did not really have the tools to fix, because of Gold Standard and lack of legal authorization.
This was why the Govt went to extreme lengths to try and figure out how to raise prices, which is why you get programs to pay farmers to NOT grow food, and mass killings of pigs and cows and other farm animals, even as the farmers who raised those lifestock went hungry.
So no, speculation was not the problem, it just sparked the key issue of the fact that the economy was deflation uncontrolled, but was just hidden.
This is a complex topic and I think you have done a good job of summarizing the main issues. To add a little context:
>...that the Fed did not really have the tools to fix, because of Gold Standard and lack of legal authorization.
This was just bad policy by the Fed. The Fed had the legal authority to be the lender of last resort and could have prevented the bank failures. Many explanations have been given over the years as to why the Fed didn't provide liquidity. Because the Fed failed to supply emergency liquidity, the U.S. money supply plummeted by nearly 30% over the next couple of years, which essentially turned what likely would have been a recession into the Great Depression.
This is not to say the gold standard was not a problem. During the 1930's, leaving the gold standard was one of the few good moves done to help the economy by the federal government.
Yes, this often happens in pairs: the overcorrection after excessive credit results in a deflationary money market, destroying any chance at recovery.
> Losing purchasing power on your money is a bug.
The idea that you can put away an amount of money under your bed that buys 1,000 loaves of bread or one GPU, leave it there for decades, and then have it buy exactly the same number of loaves of bread or GPUs is a fantasy. You can hold onto the shiny rock but you cannot stop the world rotating around you and changing all its relative prices.
> For most of human history the money was stable
Achieved by a combination of restrictions on trade, price stability laws, occasional crippling shortages, and quietly shaving bits off old coins. A much poorer world.
Except that this is literally what Gold does.
The ratio of one ounce of gold to one productive beef cow has held for a hundred years, and plausibly for around 5,000 years.
A single ounce of gold could purchase a quality tunic, sandals, and belt in Ancient Rome and still buys a fine tailored suit in the modern era.
https://findbullionprices.com/blog/gold-purchasing-power-wha...
This would be more convincing if it wasn't from a site trying to sell me gold. Do people really believe that the mechanization of clothing production in the industrial era has made no difference to "real" prices?
(Rome definitely had inflation crises!)
I think deflation-based economy could produce some interesting capital-allocation environemnt. Investment offering a 2% real return becomes unattractive if cash itself earns 2% real purchasing-power yearly. You could argue this raises the hurdle rate for investment and eliminates low-quality projects. And the counterargument is exactly the same: it raises the hurdle rate for investment and therefore some potentially good projects would never receive funding. And thats probably where the intellectually interesting argument really lives, rather than in inflation good deflation bad
The right thing would be to have 0 change in the value of money as long as the right amount of money exists.
The right maount of money is the amount of money we as normal humans need to work with (buying and selling stuff).
Inflation and deflation are results of too much money or too little money in comparision to the production capability of a society.
If i save today for my retirement and money gets less valuable when i'm retired, i have to give more 'saved' capacity back to get the real capacity (people taking care of me) and if i have more value, the others have to do more for me.
Controlling this is 'work' from experts and is not solved by bitcoin btw.
The normal term would be “velocity” of money, btw. Its a key consideration in addition to total supply whenever you need to evaluate inflation or manias.
Why does everyone assume that we're the ones keeping money under the mattress, not the ones who would have been paid by money otherwise not spent? All transactions have two sides, no?
> Deflation is a good thing, it rewards delayed gratification.
"Delayed gratification" is also provided by investments producing returns. An economy with lots of investors will outperform one where people stuff their cash into their mattress, and deflation makes it very hard for potential investments to beat that strategy.
> For most of human history the money was stable.
[citation needed]
The Spanish empire was driven to collapse by hyperinflation. Even in the US, there were financial collapses in the 19th and 18th century. Bank runs have been a thing for as long as banks have: https://en.wikipedia.org/wiki/Bank_run
Your premise is based on faulty assumptions. The existence of credit itself is what causes monetary instability, and without credit the world would look very different.
> The existence of credit itself is what causes monetary instability, and without credit the world would look very different.
Indeed. Credit is money; ultimately anyone can expand the money supply with an IOU.
Money is destroyed when a loan is paid back. Private credit does not expand the monetary supply permanently. Only the state can increase the money supply.
Your understanding of monetary theory is somewhere between 110 and 5,000 years off. Furness had a pretty cogent explanation of a monetary system without central authority or functional currency about 100 years ago with the Yap. They even managed to have bouts of inflation without the concept of a bank or state.
You are neglecting interest paid. It doesn't matter who issues the credit - the Medici family or the US Federal Reserve.
credit does provide a kind of flexibility that is sometimes needed, though. However, predatory lending, and the endless stacking of recursive loans, and government money printers are a massive stability issue that we're running into globally, and have (as you say) run into multiple times, historically.
My thought on this would be a dynamicaly stable currency. estimate debt and transaction activity, and the more debt and more liquid activity there is, the more deflationary currency should be. the less debt there is, and the less of a percentage of the money is actually in-use, the more inflationary the currency should be. this, though, is fairly off-the-cuff.
If you have a brilliant technical solution that requires throwing out all conventional economics, you don't have a brilliant technical solution. Bitcoin is rotten to its core and every excuse you make for it proves the point.
>For most of human history the money was stable.
Absolutely ridiculous. People have been counterfeiting and debasing money for as long as there has been money.
That only makes sense if money is a durable good destroyed by use. But money is improved by use and lost when put under a mattress. In economics terms, MV=PQ, and your proposal sets V low, which harms Q (goods available for sale)
No, no. The issuer of your money is really, really happy when you don't use the money. Because that means they can issue more money, without causing inflation to spike.
..and, you think that covers both individual and collective good?
..balance in all things. Neither being completely stingy, individually, nor being excessively spendy will benefit us, individually or collectively. ..but there are times for either.
I wonder if there's a way to quantify that and put a variable on the conditions, and have an inflationary/deflationary currencynthat is dynamically stable depending on conditions.
..i mean, individually, most people will eventually spend, if they have much saved and it benefits them to do so. but occasionally, we do need a kick in the pants. whenever the economynis in gridlock, that's the time for inflation. ..but when people are spending excessively, it's a time for deflation, which discourages taking on debt, and pushes the economy towards real wealth. rewarding long-term thinkers is valuable, and has a very broad effect on society.
Historically, as far as I am aware, there was never a situation when deflation coincided with good things happening.
A healthy amount of inflation keeps the economy going.
That's like saying stray dogs keep you in shape / running … because you don't want to be bitten.
This can be said about many conflicts between the individual and society, though. In many ways we are prevented from just taking what we want and “keep us in shape” because if everyone did the same it would be a problem.
I mean, cardio is Rule #1 of the zombie apocalypse in Zombieland.
Hahahaha, oh my. You think the world was some idyll halcyon pre bretton woods? My man Enmentrna is going to come back and declare a jubilee for your great revelation. When has any historic monetary system been “stable” for an appreciable amount of time. Debasement is a very literal ancient word and problem.
Even your straw man 20th century cut off is hilarious where you just kind of forget about 1873? Or maybe that decade is your shining example of the benefits of deflation. So much joy and global prosperity the peasants just forgot how to eat. Its cool, Bismarks destruction of the bimetallic system really helped usher in that age of stabikity from the international gold standards.
> For most of human history the money was stable.
Wildly inaccurate, thanks to forgery and coin shaving - sometimes even governments officially reduced the silver or gold content to make more money out of their coin reserves. Even when proto-banks began issuing letters of credit, the quasi-fiat letters were subject to loss of confidence.
However, the availability and quasi-fungibility of other silver/gold currencies meant that if you didn't trust Edward's penny, you could use a Dutch penning instead. That provided an alternate path to dampen inflation, as long as the dominant currency was coinage.
But it was equally hard to buy a pig or a new suit with silver pennies by the 20th century. Bank notes, even when theoretically backed by exchange for their value in precious metals (the Gold Standard), were even easier to forge, and suffered from "loss of faith" inflation (runs on banks meaning they couldn't practically be exchanged for 14 pounds of silver pennies).
Bitcoin is more like an asset than a currency. Unless a country makes Bitcoin its only currency it doesn't really matter that it is deflationary.
I like the alternative even less, as it incentivises spending more than you would and taking on debt you don't really need.
Well, countries have experienced moderate inflation and moderate deflation, ask the ones who lived through both which one they preferred.
Moderate deflation is fine, it's good even. But only as long as nominal GDP stays stable.
See the so called 'Long Depression' in the 19th century. Which was only a depression of the price level, everything else did well.
For a more sectoral example, see how computer hardware used to get cheaper and cheaper all the time, but total spending on hardware went up.
That is https://en.wikipedia.org/wiki/Jevons_paradox
> taking on debt you don't really need.
How does that work? When inflation goes to 18%, borrowing rates go to 23%.
The idea that deflation is built into Bitcoin is exactly equivalent to saying "the real value of bitcoin will always increase" which is an absurd premise.
Bitcoin is deflationary only in a hybrid Keynsian - Austrian worldview. In the Keynsian worldview it cannot by definition be deflationary because that would mean that the value is always increasing which is just kind of a mad thing to believe. In the Austrian worldview it is not deflationary because the amount of Bitcoin is always increasing by design. Only if you accept the Austrian framing of "deflation is when you decrease the money supply" together with the Keynsian framing of "money supply is measured in real terms not nominal" do you arrive at the idea that it could be deflationary, and there are exactly zero economists who believe both of these things.
I suspect it was a deliberate strategy to create scarcity, allowing the original creators to massively cash out. If you make an inflationary distributed currency, it may work better but it's a bit harder to get rich on it.
The other option is to make everyone gamblers, either speculate on properties or stocks. Pick your poison.
During much of the industrial revolution, gold also rose in real price. But people still did business in gold standard countries.
(Hint: the gold might be under a mattress or in a vault, but you can still an almost arbitrary amount of gold denominated debts and loans and deposits.)
There is zero evidence that deflation has any effect on spending.
At the micro level, the change in price is too small for every day purchases. Would you starve yourself for one day because the pizza will be one cent cheaper tomorrow?
At the macro level, every interest rate will be adjusted based on the base inflation/deflation rate, so the net effect is zero. Banks will offer a higher profit rate for their savings account to entice people to deposit their money in the bank instead of their mattress.
It's not silly, it harnesses some of the mechanics behind ponzi schemes to encourage viral spread. Early entrants are incentivized to evangelize it to newer ones
Tail emissions and infinite divisibility are proposals to address this.
Well, they are infinitely divisible in principle, so it doesn't matter too much.
(At the moment, there's a smallest fraction you can send on the network, but they can change that.)
Can't the change the 21M?
Yes, they could change that, too.
However I expect that adding more decimal places will actually happen, but adding extra bitcoins won't.
No they are not. There are only 8 decimal places, not infinite.
AFAIK it can be changed later.
Really hope so too. Would be devastating
Eventually with quantum computing we will be able to recover those wallets right? (Technically)
That depends on whether the public key has been exposed.
Bitcoin addresses encode the ripemd160 hash of the public key, so by default when payments are made to new addresses they are not quantum crackable.
But when someone spends from an address they publish the public key to the chain as part of the spend. From then on, any new deposits sent to the same address are at risk of quantum attack
The hash is merely a convenience, the _actual_ public key used in transactions is present in the ledger and available to anybody who wants it.
Only if there has been an outgoing transaction from that account. If the address has only received deposits then only the hash is available.
How does that work?
Suppose I make a paper wallet on an offline PC, write down the address and discard both keys. If I now send some BTC to this address, how does the client figure out the public key?
Technically it might be more profitable to mine extraterrestrial diamonds.
at this point bitcoin will be worthless
well, I just emailed the project just to see if they're aware of it
part of me feels like this is most likely a defunct wallet and nobody involved with the project has the keys anymore
If so they better take it off their site footer so donations don’t get wasted. Let us know if they respond
At least a part of it should go to Kibaale Children's Centre imho.
I got the Bram Moolenar reference.
Loved the time of Bram’s belligerent dictatorship (BDFL)
What happens if some of those tax the unrealized gains bills pass in some country where they have obligations?
They would have to either pay the tax on gains or write off losses.
Neovim’s current donation page says that funds are managed by OpenCollective — a 501c6 organization in the US. 501c6’s are tax exempt.
So assuming they are the holders of the bitcoin as well, there would be no tax liability.
then they would sell some of the bitcoin and pay the taxes. If they don't have the wallet anymore then they don't pay any taxes.
Surely only an absolute lunatic would pass that sort of law. And by then it's too late, because it's Socialism with extra steps.
Doesn't Switzerland do this instead of capital gains? Makes sense IMO, much better to tax wealth than discourage transactions.
Taxing capital assets by taking large portions of their value destroys value by forcing liquidity events. Think forcing sales of farms, factories and domain names.
I much prefer land value taxes (and similar taxes on non capital wealth like jewellery) and leisure taxes (ideally taxing people for every hour they don't work). Of course these are difficult to administer in practice, but British business rates and US overtime tax discounts effectively approximate this.
The idea of taxing people for not working an hour sounds incredibly dystopian.
I had the same reaction. It also seems easy to pull apart. What about disabled people who are unable to work?
I think something more like "investment income should be taxed at a higher rate than income earned through labor," accomplishes similar goals but is more intuitive and less problematic.
If your goal is to reduce investment that creates jobs for labour, then you should do that.
This is a false dichotomy. Laborers could just as easily invest in job-creating endeavors as passive income earners. All taxes cause economic drag, not _just_ business and investment income taxes. The economy includes every participant, and laborers are not an externality.
I'm sorry, I don't follow. Yes, people who are labourers could also somehow creating funding pools that are big enough to start companies, but so what? That doesn't negate the fact that they will be disincentivised to do so by a tax on investment income.
What will they think of next? tying healthcare to employment that you lose the moment you get fired to meet quarterly profits? Madness i tell you!
Not as dystopian as the ability to get wealthier without working and pay no taxes (and even IF you sell to realize gains, your tax liability is still lower than someone who made money through labour)
Your definition of "wealthier" is stupid, though, because it relies on a measure that doesn't actually apply to the person in question. A share's price is just "the last sale price of the same type of share", and that is multiplied by the person's shareholding to get their "wealth". However they don't have any more money by this happening - it's just a huge assumption that the share price would stay the same across all their shares if they sold right now.
The time we actually know what money they would make, making it concrete for tax, is when they sell. And we already do this.
> Makes sense IMO, much better to tax wealth than discourage transactions.
It's much, much worse to tax wealth.
I disagree with you in the other thread, so I want to balance that by saying that I strongly agree with you here.
If the government forced transfer of ownership %, instead of forcing a sale, it would be not as bad?
It's identical really. It's just instituting the nationalisation over time of all businesses.
In an ideal world, the government would sell some of whatever shares it gets at good times to pay off debt, for example when interest is high just before a tranche of government bonds expire
They could accept either I suppose
Apparently not. Googling, no one seems to actually do it in spite of some politicians talking about it.
It seems quite a bad idea from a practical point of view.
Not so much because it's socialist but it leads to all sorts of extra paperwork for no good reason. Like say you buy some utility company share for your retirement in 20 years and it fluctuates. Do you want to be valuing it and paying tax and then claiming it back when it goes down every year for 20 years or just declare the gain at the end?
Well, it is socialist in that the government basically gets to own more of everything you own every year.
Really? How? Show me a country that taxes wealth and is prosperous. Taxing unrealized gains results in owing tax on money you don’t have and makes starting a funded company impossible.
and on the other hand we have trillionaires who spend their wealth on fascist party propaganda and censorship
Why not? We tax property every year on it's assessed value. I think it's pretty clear that the wealthy will need to pay more taxes throughout the world to deal with an aging population.
I'm a little tired of billionaires 'buy, borrow, dying' to get around the paltry taxes they're currently subject to. We need a harder tax to dodge.
Why would taxing the wealthy be relevant to an aging population? Do you think that we tax stuff? We just tax money to buy stuff. If a nation produces less stuff, then spending more will just cause prices to go up, but will not result in the production of more stuff to go around.
Because our current social safety nets all work by assuming the next generation pays for the care of the current elderly. Those elderly do need 'stuff' they need doctors and nurses and nursing homes. Thus taxes will have to go up, and if it has to, it may as well be progressive.
We already have giant amounts of tax everywhere, all the time. What makes you think we have no money for this?
Oh, no, not Socialism! That's worse than attending a Macklemore concert!
Macklemore concerts didn't kill 100 million people at minimum.
Do we have an estimate on the number of people capitalism has killed? Serious question.
Include deaths due to poverty and lack of affordable healthcare under capitalism, overworking and dangerous working conditions, and all wars and counter-insurgency waged on alternative economic systems globally.
No, people who die as a direct result of capitalist economics are not counted because that would be inconvenient and wouldn't fit the CIA's narrative.
You'd need a definition of capitalism first. Since for most people, it's just the default mode of living -- e.g. the very term "capital" comes from "head", as in "head of an ox", as early cattle culture practiced capitalism, so it predates the agricultural revolution and was practiced by nomadic groups.
A lot of the language, for example "interest" comes from cattle culture. If you think about it, a cow produces other cows, so it bears interest. You can eat the cow (consume capital) or let the cow produce a stream of milk. Ownership of cows gave you great power.
So asking "the number of people killed by capitalism" is like asking "how many people were killed by everything that's not communism", which is pretty inane, since the point of communism is that it is an ideology, and mass killing for an ideology (that's not religion) is a part of the modern world, not the traditional world of cows and capital. The first ideological genocide was the slaughter of the Vendee peasants by the French revolutionaries, but it was merely the first of many times that urban ideologues slaughtered rural farmers.
Man I always love the straw men you guys stand up to fight this. More taxes = socialism, and not nordic socialism, no, actually, communism. Therefore mass death / genocide. Ok. Sure jan.
Nordics are not socialist[0]. Socialism is central planning and control, sometimes created out of mass killings[1] [2], and often creating many deaths just from incompetent central mismanagement[2] [3] or grisly bureacratic rules[4].
[0] https://www.investors.com/politics/commentary/denmark-tells-...
[1] https://en.wikipedia.org/wiki/Excess_mortality_under_Joseph_...
[2] https://en.wikipedia.org/wiki/Khmer_Rouge
[3] https://historyincharts.com/chinese-death-totals-great-leap-...
[4] https://www.bbc.co.uk/news/world-asia-china-34667551
What does taxing unrealized gains have to do with "central planning and control"?
Nothing, hence my point about it being a straw man :^)
If you tax unrealised gains, say Elon Musk's SpaceX shares, all that means in practice is the government takes a certain percentage ownership stake in SpaceX every year until he has nothing left to tax, or he sells it to someone else and pays tax on that sum (but who would buy anything if it's going to be taxed away?)
What a nonsensical argument. Yes, that's why we're all living in government owned housing, because if you tax something, it inevitably gets taken away, and nobody wants to buy houses, cause the government is just gonna take it away...what?
If your wealth is 100% ownership of Tesla, say, and the government imposes a 5% wealth tax, you have to sell 5% each year of your ownership stake (because the lie of all this is it isn't wealth being taxed, it's ownership) and give it to the government. Until you don't own it any more.
And if you think "well, it doesn't have to go to the government", who else will take it? Who would buy something that they would have to sell 5% of each year? The government, being the only thing that wouldn't be affected by a wealth tax, would become the de facto buyer.
Communism is not socialism. What Stalin, Mao and Kim Il-sung did was wrong because they did basically the exact opposite of a socialist policy, centralizing power out of workers hands and taking all surplus value into the central government instead of distributing it.
They all turned into paranoid dictators who did everything they could to stay in power, except for Mao who got lied to by other party leaders and regretted it in his final years. None of them represent what socialism really is. Tankies who worship them are a small minority.
You've got spot the pattern though, right?
Someone says they're going to make everything equal and they just need enough power to do it. Trouble is, that requires all the power, and a) the halfwits who end up in power are nowhere near as good as the people doing the work and taking the risks at deciding what to do and how to do it and b) the people who want all the power can just say that and the credulous believe them.
The fascism we CURRENTLY HAVE is far more preferable
Sounds good.
Edit: it seems perfectly acceptable and ideal even for society to say there is a cost to wealth. As others have mentioned Neovim is in the US is likely mostly tax exempt so this hypothetical doesn't even apply to them.
So you want a non profit to pay taxes on money it seems they do not have access to and have never touched.
Great.
Theft is good? What?
We slid down that slope a long time ago. Taxes are good and pay for my important things, up until the moment they pay for someone else's important things, then it is theft.
Taxes on unrealized gains are good? Are you nuts? No sane country has them, and it is one of the stupidest ideas that NL came up with. Way to squeeze middle class even more.
I'm not sure what argument you're making? Taxes are theft? Consensus on that type of thinking seems to be hard to come by.
consensus is easy. its that people want to not pay taxes and still use public infrastructure anyway. thats the real theft.
> Taxes are theft?
Taxing unrealized gains is theft and stupidity.
I checked their official donation channel is OpenCollective. I think the Bitcoin address is no longer being used and they just forgot to update the footer
Yeah, someone probably deposited an amount a long time ago and it's sat there earning interest.
Bitcoin doesn’t pay interest. And that’s a good thing.
I love vim and neovim. Thank you
Rainy day fund. Everybody needs one. Love neovim for living under their means, great program!
The project no longer uses that Bitcoin wallet for bounties.
What does that mean for that donation, and why is the wallet still listed on the website?
I think that a large part of the priced in "value" of Bitcoin is just lots and lots of Bitcoin that nobody can access anymore.
Bitcoin's supposed to be "liquid" but I'm wondering what happens when there's a forced liquidity event.
What do you mean by forced liquidity event?
If people are trading bitcoin on margin or if Strategy is forced to sell a large percentage of its holdings.
I mean, it's the opposite of that; it's forced illiquidity when people lose access to their keys. There is no way to gain access to those coins and you cannot "force" liquidity on the bitcoin protocol.
This could become the premise of a near-cyberpunk heist movie..
Similar to Swordfish? :)
I imagine they might wait, to make sure it’s legally obtained Bitcoin.
In which country would waiting help?
In Germany at least if you've held the coin(s) for 7 years before selling you don't need to pay tax on the profit.
Not sure how this applies to donations though, and of course this will almost certainly be changed in the future, .nl is leading the way in taxing _unrealised_ gains; we are sure to follow!
It's one year, unless something changed recently.
1 year
One year yes, and politics wants to change it..
Something that takes 5 seconds with bitcoin, faster than any other property type, is something you rationalize as taking 7 years
Why does HN collectively tolerate this level of understanding when it comes to crypto
> Something that takes 5 seconds with bitcoin, faster than any other property type, is something you rationalize as taking 7 years
> Why does HN collectively tolerate this level of understanding when it comes to crypto
Well that's really funny. Because the 7 years are about tax liabilities not the speed of bitcoin transactions.
So maybe you made a statement about crypto advocates here...
Legally obtained bitcoin is what the person I responded to said, suggesting anti money laundering concerns which are the concerns I responded to
And the tax liability sister comments all disagree with each other
Notably, the parent commenter hasn’t replied at all yet