Richard Bucker

Bitcoin What's Wrong With This Picture?

Posted at — Dec 29, 2021

Actually there is plenty wrong with Bitcoin. To start; because there is an incentive to promoting bitcoin as a cult it’ll operate as a ponzi scheme thus benefiting early adopters regardless of what happens next.

There is no protection from usary fees and interest rates. This model rests on top of the dollar not in the dollar. The same for inflation. In the credit card business you pay less fees based on the business type and the historical fraud in that industry, city, state, etc… Standard credit cards protect the cardholder and paypal, zelle, venmo protect the business. Just as the consumer does not know the retail fees that the merchant pays now that fee is paid directly by the consumer and is also opaque.

Some of the technical problems have novel solutions… like you do not actually hold the coin. You hold a key in your wallet. Furthermore, the unspent coins are not actually coins but fractions of coins. A collection of unspent fractions of coins have a serial number-ish and ownership. Once the UTX0 is spent it returns to the unspent with different ownership and serial number (same for any change).

Regardless of the medium… if you fail to pay your pills they will reposes your car, foreclose on your house, and throw you in jail for not paying your taxes. Saying your broke will not protect you.

But the real problem is trust. Institutional banks and the Fed do a lot of work to prove that they can be trusted. Going into bitcoin means trusting a long list of individuals:

And when things go wrong you cannot even get a hug.

Lastly, the bitcoin whitepaper does not describe any of this. To say that is does just means people are not reading it. For example STAS and UTX0 are simply never mentioned. This code is complex and poorly written and documented. How is anyone supposed to understand it all and validate/authenticate that it can be trusted?

UPDATE - speaking of trust… one of the holy grail(s) of security crypto is computing a complete list of reverse hashs in order to make is exponentially easier to guess user passwords. This would be one way to get the combined compute power of the world to do it free of cost and as a general side effect.