Does Bitcoin have any negative tradeoffs or is it just all positive? \ stacker news ~bitcoin

Does Bitcoin have any negative tradeoffs or is it just all positive?

6745 sats \ 50 comments \ @kepford 30 Aug 2023 bitcoin

For a long time I have tried to explain the impact of Bitcoin upon the world by comparing it to the Internet. Then I usually say I think its impact will be greater. This morning I was thinking about the tradeoffs with the Internet. On the whole I think it is good for humanity but there are some tradeoffs that are negative. I would guess almost everyone can agree with that statement. We might disagree on specifics but not the generalization.

So with this in mind I started to think, what are the negative impacts of Bitcoin? I have observed in the tech space at least there are to few that think about tradeoffs. The fact that so many bitcoiners do think about this and the multitude of things that could go wrong is a major factor that drew me further into bitcoin.

A couple of quotes I really like about the subject fit well here.

"Programmers know the benefits of everything and the tradeoffs of nothing." ~ Rich Hickey

"There are no solutions, only trade-offs" ~ Thomas Sowell

So, what are some of the negative tradeoffs for Bitcoin?

Shitcoins (Scam copy-cats)
Privacy implications of digital money

What else?

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90 sats \ 4 replies \ @frostdragon 30 Aug 2023

I think most of the "cons" of bitcoin stem from people not understanding it, and not taking the initiative to understand it.

People who develop and buy shitcoins see bitcoin as a cool new innovation to build on top of.
People who see bitcoin as a threat rather than an opportunity will try to fight against it.
People who see bitcoin as a trend (the tulip argument) will overlook it completely.
People who see bitcoin as an investment hold their bitcoin in exchanges, waiting for the right time to sell.
People who self-custody bitcoin without learning how properly secure their funds will lose access to their wallets, or be scammed out of their bitcoin.

There will be a lot of fallout from all of the above.

Additionally, schools of economics are just theories about how the world works, and how to live accordingly. Eventually the current theory will be proven right or wrong, and bitcoin is an accelerant to this experiment. There will a lot of fallout when the current prevalent economic systems are proven incorrect.

And lastly, we don't know what the process of separating money and state will be like, and it's likely it will be painful. We don't know what global unregulated money looks like in our world. We focus on the freedom aspect of it, but we don't think about how much we depend on government money for daily "comforts", (which some would argue are necessities). Historically, those comforts come at the cost of eventual hyper inflation, but it'll be interesting to see what pros and cons the world has to offer when we go to bitcoin instead of another fiat system.

TL;DR - I think the main "trade off" for bitcoin is, you have to responsibly manage and self-custody your bitcoin or the natural consequences will be more severe than they are now. Not just for the individual, but for businesses and governments. And... There aren't a lot of responsible people out there.

70 sats \ 0 replies \ @DarthCoin 30 Aug 2023

And lastly, we don't know what the process of separating money and state will be like, and it's likely it will be painful.

Exactly painful... for many clueless NPCs not prepared

50 sats \ 2 replies \ @kepford OP 30 Aug 2023

This!

There aren't a lot of responsible people out there.

The flip side of this is that when people aren't responsible they pay a cost for it. Usually freedom, knowledge, and options. You can see how different people that live in places with harsh conditions vs. people that live in cities. Or people that live in developed countries vs. poor countries. The transition will be painful. They almost always are painful. I believe we'd have a better world if people HAD to be more responsible for their own actions. But yeah, the transition is gonna suck for many. Best get prepared.

In the past few years it occurred to me how many "freedom" loving people are really just fakes. Its more of a fetish with the idea of freedom vs actual freedom. I see this in bitcoin circles as well. I don't think people realize how the world really works.

40 sats \ 0 replies \ @frostdragon 30 Aug 2023

yuuup ^

0 sats \ 0 replies \ @kepford OP 30 Aug 2023

I should add that I realized that I wasn't living what I believed. I saw myself as being dishonest with myself. Sure I made plenty of excuses but the truth hit me in the face.

62 sats \ 6 replies \ @carlosfandango 30 Aug 2023

Inequality of access (intellectual and physical) - it not only requires a level of financial and technological knowledge to interact with it requires access to electronic devices and consistent energy to power them. These could be a choke point for the poorest people and they end up relying on centralised services (shared mobile telephones, internet markets/cafes, insecure connections etc).

41 sats \ 5 replies \ @kepford OP 30 Aug 2023

I don't see that as something bitcoin is creating, quite the opposite. Many including me see bitcoin as an opportunity for those in poor nations. A life raft. They are already screwed by fiat and oppression. Bitcoin is a net positive IMO. Also the lack of energy is a key issue in poor nations and it seems to few in the developed world care about this. They are oppressed with reducing energy usage when it is the key to humans thriving.

31 sats \ 3 replies \ @carlosfandango 30 Aug 2023

Apologies - not sure if I was clear in my thoughts. It’s not that Bitcoin is creating the problem it’s just that people need access to cheap electricity, internet and devices to utilise it. Access to those is the trade off.

As an example Kerosene is still a key source of light in sub-Saharan Africa - the benefits of the existing system (cheap, portable, storable) with its significant health risks outweigh the availability of a healthier technology with its initial and ongoing costs.

A life raft is only a life raft if you are able to climb aboard.

0 sats \ 2 replies \ @kepford OP 30 Aug 2023

I see. On this note, Gridless is doing interesting things in relation to access to energy.

10 sats \ 1 reply \ @carlosfandango 30 Aug 2023

Absolutely - supplemental energy to towns etc from their mining I think?

Estimates are that 1 billion people do not have access to electricity.

10 sats \ 0 replies \ @DarthCoin 30 Aug 2023

Indeed, without electricity and communication access, Bitcoin is useless. Yes, there are offline solutions, but also those, some time needs access to "unload" online what they charged offline. and is not so handy.

0 sats \ 0 replies \ @DarthCoin 30 Aug 2023

agreed

15 sats \ 1 reply \ @birdeye21 30 Aug 2023

we'll essentially be giving up the world's way of life as it is today, if that's a trade off

that's to come with much nostalgia, but the world bitcoin ushers in will be much better

21 sats \ 0 replies \ @kepford OP 30 Aug 2023

The way I look at that is the world's way of life is constantly changing. Bitcoin is a better path. Many see the "cashless" society as a negative and it can be but it will not be stopped. It can be improved with bitcoin.

21 sats \ 6 replies \ @DarthCoin 30 Aug 2023

"trade-off" is another buzzword... ignore it.

The ONLY danger /attack vector for Bitcoin is custody by 3rd parties. That's all. All the rest is just noise.

72 sats \ 3 replies \ @kepford OP 30 Aug 2023

It can be used as a buzzword for sure but its also very real. Here's an example, the politicians never mention tradeoffs. They say we will fix your problem but don't even mention the 100 negative side effects. Obviously I'm not suggesting we should drop bitcoin. Where this is coming from is thinking in the negative to harden bitcoin and fight against its enemies. Also, if there are negative tradeoffs how can we minimize them?

Example, privacy is one that many are working on.

21 sats \ 2 replies \ @DarthCoin 30 Aug 2023

In this sense, I think Bitcoin is just the beginning of something inimaginable for human race. Something like I described here https://darthcoin.substack.com/p/bitcoin-the-2nd-fire-discovery

Also there's NO turning point from here. Only forward.

0 sats \ 1 reply \ @kepford OP 30 Aug 2023

Fire! Yeah that is a good analogy.

So Bitcoin is inevitable?

1 sat \ 0 replies \ @DarthCoin 30 Aug 2023

Is a human evolution. Also is a natural selection. Only the brave and intelligent will use it. All the rest will just die in misery. At this level, I care less for shitcoiners and deniers... HFSP. Is almost about survival. Who will adopt it and use it as money , will thrive. Who will still ignore it, will be forgotten and became obsolete.

231 sats \ 1 reply \ @Rock 30 Aug 2023

What an incredibly naive viewpoint. You really just say the same shit over and over again. How is this adding to the conversation at all.

You're not making yourself any more credible.

Go ahead post one of your articles for me to read to tell me how I'm obviously not smart enough to understand.

In b4 some stupid gif of darth vader

0 sats \ 0 replies \ @DarthCoin 30 Aug 2023

sorry I do not understand idiots language. I can't talk with stupid rocks. Your avatar say it all about you....

15 sats \ 0 replies \ @orthwyrm 30 Aug 2023

Bitcoin will accelerate the demise of the fiat standard, which in turn will bring all sorts of destabilization and chaos.

10 sats \ 6 replies \ @drdoom 30 Aug 2023

It further encourages idolotry of money.

Money is not used in nature by any other living organism yet humans use it everyday and many worship it. Lot's of people lead a life of following one belief system to another without doing the work to understand the underlying premise or proofs and many of those kind land on Bitcoin. The maxis become their new priests telling them what to think and what to do.

In 30 years if Bitcoin overtakes fiat as the common currency we are still at square 1; same dillemma with fiat: a mass of idolotards using a system they don't understand but use based on belief.

0 sats \ 1 reply \ @kepford OP 30 Aug 2023

If bitcoin overtakes fiat we have killed a huge source of issues. Surely you can see that. It doesn't solve greed but fiat sure has made a mess of things. Much worse than before fiat. Bitcoin cannot fix the human heart but it can remove a tool of control and oppression used by evil men.

0 sats \ 0 replies \ @drdoom 30 Aug 2023

Oh for sure, this thread is about negative tradeoffs so it is simply the first thing that jumps out to me on that regard. Totally Bitcoin is far better solution to currency than fiat. I think the gig is still out on whether or not it will become extremely monopolized (by those who will corner the market via buying up the available quantities while fiat still has purchasing power and likewise investing/gaining majority receivership of newly minted coins by doing the same to mining) in the meantime today it represents an exciting propsect of shift in financial dominance. Evil men will at least have less levers to pull even if they do gain a monopoly control.

0 sats \ 3 replies \ @rybka 30 Aug 2023

Humans are nature too.

Besides, one of the points of money is to store value for later. Bodies work similarly with fat, nutrients etc. You don't really see anyone being a "priest" of fiat in the same way bitcoin maxis communicate. Saying "many worship money" does not mean people spend their days shilling online on the benefits of inflationary, centralized systems. Other people obsess over stacking sats, there is no difference in this regard.

I do nonetheless agree the idolatry is toxic, but I imagine it is inevitable in the beginnings of something really gamechanging. And you can't expect that everyone understands every black box of technology honestly, I don't think not completely understanding blockchain is a major hurdle to adopting the tech, as long as the UX is good and the system just works better.

0 sats \ 2 replies \ @drdoom 30 Aug 2023

Yeah the body is a great analogy there. I guess to nitpick the issue is collection/storage of things that are not necessarily needed for the body to function as intended. Too much of something will kill the body. Adding things to the body it does not need (ie- that you want ) hastens our inevitable path to death.

So as you might agree then belief is like a festering cancer to the mind. Rejection of all belief might then result in being better adapted to the reality of one's situation such as an approaching predator or a sky being contaminated with metallic particulate.

If indeed rejection of all beliefs is the most prudent path then we could apply that to trade as well and thus remove all currency units from the equation since they represent a belief that the units will exchangeable at some point in the future. This takes us 'back' to a traditional real goods/services based barter system. And before someone says this is stoneage behavior what's to stop us from building sophisitcated technical improvements to an otherwise ancient tool like we did with money.

Anyway props to your last point as well - it's true no-one can understand-all and if the car drives faster, safer, smoother it's probably a better car regardless of what's under the hood.

0 sats \ 1 reply \ @rybka 31 Aug 2023

Human civilization stands on belief though. Belief can be very beneficial in many scenarios. Removing it from money is helpful, but I'd find it hard to live without believing in anything – be it in my partner, family, culture, and so on. A society where all trust / belief / values / whatever are automated is a society of robots.

0 sats \ 0 replies \ @drdoom 31 Aug 2023

Imagine if nobody 'believed' the media. So it's not just money where this would be useful.

In fact, human civilization as we know it seems to be crumbling around us - while being consolidated by a few.

Those few are managing the collapse. How do they do that? Because they have the masses believing things detrimental to their own potential. If the masses did not believe in things the few would not be able to manage the many.

I too would like to 'take a leap of faith' to my partner - you're right on that it's the one person you should believe in when it counts - and hopefully he/she will always be there to lend that hand. Not sure however I would believe a 6 year old or an alchoholic cousin so even amongst family belief is always a potential for detriment.

A society where all trust / belief / values / whatever are automated is a society of robots.

Agreed, belief in automation or delegated systems of trust is just as detrimental - removing belief entirely doesn't turn us into robots it makes us resilient to self destruction via third party.

10 sats \ 4 replies \ @Rock 30 Aug 2023

The most obvious tradeoff in my opinion is irreversibility of transactions. I think it's a good thing overall, but scams might be harder to deal with for average people.

1 sat \ 3 replies \ @kepford OP 30 Aug 2023

That's a good one. Yeah but this is really solved by escrow services. In this situation you really need a third party "middle man". Reversible transactions have their own set of tradeoffs.

0 sats \ 2 replies \ @Rock 30 Aug 2023

So I have some experience with protocol level escrow stuff, like in lightning channels or even in Bisq, so I think there might be a way to do it without a 3rd party, but regardless adding that middle-man or escrow protocol adds additional complexity and time to complete a transaction. Just throwing out my thoughts.

0 sats \ 0 replies \ @kepford OP 30 Aug 2023

Interesting. I put "middle man" in quotes because I can see it wouldn't have to be a person or group of people. I can see imagine it being a protocol.

0 sats \ 0 replies \ @Rock 30 Aug 2023

I totally agree that reversible transactions have tradeoffs, I mean they cause all kinds of fraud, and costs the banking / financial system much more to deal with.

10 sats \ 8 replies \ @Undisciplined 30 Aug 2023

The main trade offs are that fiat currencies are widely accepted and cash works anonymously without electricity or network access.

There's a bit of a risk tradeoff with respect to gold (or other commodity moneys), because they have organic demand aside from their monetary value, whereas a superior digital money would send Bitcoin to zero.

121 sats \ 3 replies \ @kepford OP 30 Aug 2023

I don't see this as a tradeoff. People prefer electronic money on the whole. That is going to happen regardless of bitcoin. More and more my perspective is that we already have CBDCs. Its called the dollar. If you use the banks, wire transfers, Visa, or Apply Pay you will be using whatever the state decides to use. Bitcoin is the escape hatch.

10 sats \ 1 reply \ @Undisciplined 30 Aug 2023

It's still a tradeoff. You give up the ability to have that type of exchange by using Bitcoin. The question wasn't how significant the tradeoffs are.

21 sats \ 0 replies \ @kepford OP 30 Aug 2023

Fair

0 sats \ 0 replies \ @DarthCoin 30 Aug 2023

Indeed. More people rejecting to use fiat in any form or shape, is closer to full adoption and freedom. For more they still use fiat, they are sustaining it and also sustaining their own slavery.

21 sats \ 3 replies \ @carlosfandango 30 Aug 2023

Agreed. I think we are making a similar point re electricity. I don’t think there is an analogue BTC?

10 sats \ 2 replies \ @Undisciplined 30 Aug 2023

I've seen people occasionally speculate about how to do it, but I don't think a viable version is available yet. Eventually, it will have to be developed because there will always be demand for physical in-person transactions.

21 sats \ 1 reply \ @carlosfandango 30 Aug 2023

Bribing a border guard at 3am with no phone signal? You are going to want an analogue proof of value; gold, diamonds etc.

10 sats \ 0 replies \ @Undisciplined 30 Aug 2023

Not mention the boarder guard probably wants something that wasn't independently seen and verified by millions of other people.

0 sats \ 0 replies \ @edulopesf 31 Aug 2023

The major "problem" so far is not being widely accepted... Here where I live, I could find three places where BTC is accepted. A city with more than 400k people...

0 sats \ 0 replies \ @scottathan 30 Aug 2023

Limited blockspace and expanding chain size. Because blockspace is limited and write-only there will never be quite enough space for all the transactions that people want to make. In addition, the ever growing size of the timechain willvmake it harder to run a node overtime, although drives becoming cheaper should help with that.

This doesn't mean limited blockspace is bad at all, it just is a trade off we need to work around with scaling solutions.

0 sats \ 0 replies \ @guts 30 Aug 2023

Bitcoiners celebrating Blackrock.

0 sats \ 2 replies \ @faithandcredit 30 Aug 2023

It doesent have a king. I'm not sure you can have money/currency without a king. So I consider it an experiment:) a risky one depending on how much you stack

10 sats \ 0 replies \ @kepford OP 30 Aug 2023

Pffft

0 sats \ 0 replies \ @scottathan 30 Aug 2023

Money originally had no government though. Money was invented without anyone organizing its creation, yet it stilled worked just fine. Gold became money and was minted by private businesses before governments ever entered the picture. Cash was invented by Chinese merchants then crowded out when the dynasty started printing some. Money doesn't need a king, in fact, a king may be antithetical to the idea of money

0 sats \ 0 replies \ @endothermicdev 30 Aug 2023

When the machines become sentient, they will also become financially sovereign. 🤔