Quote:
Originally Posted by lio45
Truenorth is totally correct that the main appeal of Bitcoin is to evade taxes and sanctions, and finance crimes. The untraceability/anonymity is THE salient feature of crypto that makes it noteworthy and useful -- to criminals. Otherwise, as acottawa points out, they're just virtual Dutch tulip bulbs.
Also, I'm going to warn you to refrain from insulting him as he really did not say anything incorrect there; he's a knowledgeable forumer (and an engineer; not like he's clueless about tech) and pretty much never talks through his hat. (At least you did edit your post this morning, so, thanks for that.)
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The criminal activity narrative has been proven to be false. The share of crypto transactions involved in illicit activities has been found to be less than that in the broader economy.
https://www.forbes.com/sites/haileyl...h=4f140e173432
https://en.wikipedia.org/wiki/Cryptocurrency_and_crime
Also, Bitcoin isn't anonymous. It is a public ledger that anyone can access at anytime. It doesn't list your name, but it does show IP addresses which can and do get traced regularly. Police traced bitcoin donations back to individuals during the trucker convoy for example. Police have also seized Bitcoin.
Another false statement that was made was that "Mt Gox is proof that the network can get hacked". This is also factually incorrect. Mt Gox was an exchange that got hacked (they basically stored bitcoin on others' behalf). The Bitcoin network itself did not get hacked as was claimed, just Mt Gox's various wallets got hacked due to poor password protection.
https://www.investopedia.com/terms/m/mt-gox.asp
To hack the bitcoin network would require you to rewrite transactions on the public ledger, of which separate duplicate copies are stored on computers all over the world. The network is designed so that 50% of the network must agree on all the transactions on the ledger. If one or a few of the ledgers don't align with the 50%, then they are immediately known to be false.
So the only way to hack to hack the bitcoin network would be to control more than 50% of the computing power used for mining. As of November, the network used as much electricity as the entire country of Ukraine. So to hack the network you must have as much electricity as half of Ukraine, and then direct all of it to making new ledgers with duplications of transactions, so that it outweighs all the legitimate ledgers.
This would be insanely expensive to do, and it would also immediately be noticed, which would result in either the crash of the network (resulting in the value of Bitcoin to drop to zero), or a separate ledger being created for the legitimate one. In either case there would be no return on that investment, which is why there is no incentive to hack the network.
When people say the network is the most secure in the world, this is what they mean. And the larger the network grows (and the more computer power gets added), the more difficult it gets to hack the network. I've heard that quantum computing might be the technology that makes the Bitcoin network hackable. We will see.
Crypto exchanges and wallets are a different story though. When you make a bitcoin transaction you get a private passkey, which is confidential, and should not be shared with anyone. It is the failure of passkey storage which results in people getting hacked.
For the record, I am also an engineer and have spent close to a thousand hours studying Bitcoin and Blockchain technology. I also have nothing to gain by speaking about Bitcoin as I don't own any myself (I don't make speculative investments, and view Bitcoin as a storehold of wealth, rather than a wealth creation device, so I'd rather invest money back into my business). The only purpose of my post was to correct false statements - my tone could have been more mature I'll admit.
The likely longterm use case for Bitcoin isn't as a currency, as it is likely to be too deflationary against technology. It is capped at 21M bitcoin, a sizeable chunk gets lost every year, and the world's population grows every year - so the bitcoin per person shrinks every year = currency deflation, which makes it impractical as a currency in the longrun, in my opinion. However it is an excellent storehold of wealth, and it can be transferred to anyone in the world with incredible ease, so it is still a good asset to own as part of a broader portfolio.