The other day I walked up to a newsstand and asked the newsguy if he wanted to buy US$100 of Bitcoin. He said sure, checked the price, did some calculations on his cellphone, and proposed an amount including a commission for him. I agreed, scanned his QR code on my phone, and posted my transaction to the network. I walked to a nearby shopping mall to pee, and then saw that the transaction was confirmed. I walked back to the newsstand. He handed me a US$100 bill.
I didn't sign anything, make any appointments, buy any insurance, walk into any offices, present any identification, or even tell the guy my name. The total time involved was about 20 minutes, but only because I wasn't using Lightning. I had a similarly informal and short, but more argumentative, experience with the previous transaction, at a winery whose owner loudly insisted that he hadn't received the money... until he realized he was checking the wrong phone.
You are so full of shit comparing this to a real estate transaction that I am at a loss for words. You're about as full of shit as the winery guy. He, too, was blathering all sorts of nonsense at me about Bitcoin that showed he didn't have the faintest idea what he was talking about.
The scenario you're talking about is a 51% attack where big mining pools collude to ensure that nobody else can ever mine a block (because it might allow the laundering of tainted coins). That would be a global and extremely obvious disaster for the Bitcoin network, and it would be remedied by whatever measures were necessary to end the attack, possibly including a hard fork or strategic bombing.
Remember that the world's investor class now has 2 trillion dollars tied up in Bitcoin, and they do not want to see it collapse, and such a successful attack would greatly undercut investor confidence in the value of the asset. The Bitcoin crowd has enough pull that they extracted a pardon for Ross Ulbricht and got a friendly SEC head this year. Even before that, when one or another pool would grow to the point where it might be able to mount a 51% attack, it would get hit by DDoS attacks to bring it down.
You're comparing that to a bank declining a credit card transaction because you're in another city.
Governments have been pressuring Bitcoin miners for over 15 years; it's outright illegal in many countries. The hashrate dropped by more than half when the PRC outlawed Bitcoin mining. The effect on the functioning of the network has been pretty much undetectable.
Seems like an extremely inconvenient process and it’s unlikely you’d easily find that many people to agree to this unless without a significant premium (>5-10%).
I can't imagine what process of transferring cash could be less inconvenient than someone handing me a small piece of paper? And the commission was less than 5%.
The fact that it wasn't a lot is precisely why this is a good example of Bitcoin being more liquid than real estate. You can't sell US$100 of real estate, not even here in Argentina.
Really? You can’t imagine any process which would take 40x less time than 20 minutes?
Sure bitcoin is more liquid than real estate. That’s rather obvious and not a particularly high bar. It’s not particularly liquid compared to actual money or many other financial instruments though.
You seem to be selectively quoting me in a way calculated to give the false impression that I said something obviously false instead of what I actually did say, which was obviously true. What motivates this extremely discourteous behavior?
Rebutting the grandparent's claim that Bitcoin was no more liquid than real estate was one of the main objectives of my comment. I am glad that you agree that their claim is obviously false, but I think it's unfortunate that you didn't respond to their comment to say so.
I agree that Bitcoin is less liquid than dollars, which is why I was making the exchange, actually. For other financial instruments, it depends on who you are, and whether you have an account with a stockbroker. You can't open an Interactive Brokers trading account with US$100, and it's going to be challenging if you are in Venezuela. You are going to have a hard time finding newsstands that will accept your SPY shares, but they are more liquid than Bitcoin in the sense that, given that IB account, you pay much less to convert them into dollars even if you have to cross the spread, and if you're willing to wait 20 minutes, you have an excellent chance of earning the spread instead of paying it.
But none of that compares for convenience with a guy handing me a US$100 bill.
I notice you haven't answered my question. What motivated you to treat me in this extremely discourteous way?
We're talking about this quote:
> Without an exchange your bitcoin is not a liquid asset, it's even less liquid than most commodity for which there are digital exchange marketplace. You can sell it over the counter, but that makes it an asset comparable to real estate in terms of liquidity.
There is nothing in the tone of this utterance that suggests that it's joking, sarcastic, or hyperbolic; it's a series of apparently serious, sincere, literal claims which simply happen to be completely unrelated to reality.
I don't agree with your implicit assertion that selectively quoting me in a way calculated to give a false impression that I said something obviously false is comparable in its level of discourtesy to me telling you that you are full of shit.
> The other day I walked up to a newsstand and asked the newsguy if he wanted to buy US$100
We are talking about the liquidity of an asset, $100 is change money.
Now try doing the same for $100k or $500k, without an exchange your options are very limited and the process is going to be very tedious (obviously you're not going to leave the guy to pee after moving a full bitcoin to their wallet without very strong guarantees that you will end up with the money in the end), and comparable to selling real estate. So of course it's not exactly equivalent to real estate because it's fungible and very small amount of bitcoin have some higher liquidity, it's still a very illiquid asset without an exchange compared to pretty much any other financial assets.
> The scenario you're talking about is a 51% attack where big mining pools collude to ensure that nobody else can ever mine a block
No, you just need to signal you'd mine on top of any block containing the transaction you want to block, and then no further block will ever be mined with the said transaction as other miner will follow suit. You just don't understand bitcoin except superficially and it shows.
> Governments have been pressuring Bitcoin miners for over 15 years; it's outright illegal in many countries
It doesn't matter if shithole countries with no leverage pretend to pressure bitcoin miners (yes it's all about pretending, as long as you don't see targeted assassinations in foreign country, you know the country doesn't really care). In the meantime, bitcoin and other crypto have been subsidized by governments in the Western world for years (through all the fiscal vehicles subsidizing start-up investment). You can be sure that the day a mining pool becomes the target of US sanctions (or has its staff abducted by some intelligence service) the landscape changes dramatically (it won't happen though, as they would cave without a fight).
> Remember that the world's investor class now has 2 trillion dollars tied up in Bitcoin
And they are absolutely uninterested in the ideological aspect of bitcoin, the ability for the US government to censor transactions is the least of their concerns.
I appreciate you engaging in good faith and explaining what you meant, since wqaatwt thought you were engaging in "obvious hyperbole" https://news.ycombinator.com/item?id=44475519 and I was suspecting you of trolling.
It won't surprise you to learn that I haven't had the opportunity to sell US$100k of Bitcoin, but I expect it would be closely comparable to US$100k of US$100 bills, except that I can't zap those across to fixedfloat.com to change to a different cryptocoin or a friend on another continent in 30 seconds. Maybe it wouldn't be prudent to entrust all US$100k to fixedfloat.com in one transaction; maybe you'd want to use a series of smaller transactions of different sizes to reduce the counterparty risk.
But this doesn't seem like an issue of Bitcoin being particularly illiquid. Rather, it seems like exchanges make commodities more liquid, an assertion I don't think is controversial. But most other assets, such as real estate, shares, and even precious metals, are vastly less liquid than Bitcoin in the absence of an exchange. Finding someone on the street willing to buy Bitcoin is enormously easier than finding someone on the street willing to buy your MSFT shares.
I appreciate you explaining your speculations about 51% attacks in more detail. I think the course of action you're outlining would still be very likely to cause chain forks as big exchanges decided whether or not they were going to accept blocks from the compromised mining pools. The world's investor class many be absolutely uninterested in the ideological aspect of bitcoin, but they're very interested in mitigating political risks that threaten permanent loss of their capital.
I do not think your description of the People's Republic of China is a "shithole countr[y] with no leverage" or that it was "pretend[ing] to pressure bitcoin miners". The majority of Bitcoin mining was happening there, the majority of the world's coal was and is burned there, the vast majority of the world's solar panels are made there, the vast majority of the world's other electronics are manufactured there, and virtually all Bitcoin mining hardware is still designed there. But when they prohibited mining, most of the world's Bitcoin mining activity stopped within a few weeks.
See people like you are the reason why I wouldn't even want to ever invest in bitcoin because atleast you, are so full of yourself that you called someone full of shit just because he said that bitcoin is highly illiquid which is true.
Your personal experience may be different and we are willing to hear it but don't treat it as the final truth. I am pretty sure that it was damn awkward asking.
Here I am in my country where I don't even ask for UPI payments to cash because its sometimes awkward and this guy is loading bitcoin of all things and saying its liquid lmaoo and like if it wasn't awkward.
Saying truth cut you so bad that you had to bad mouth the other person for the sake of it. Grow up at this point, man. This is highly against everything the ethos of hacker-news stands for.
I hope your social anxiety problems improve, but I can assure you I don't share them, as you have assumed I do. It sounds like you also might not understand what the word "liquidity" means in a financial context.
What "cuts" me is not people uttering uncomfortable truths but people confidently spewing total bullshit with evidently no concern for its truth-value or even verisimilitude. It's even worse when it seems to be motivated by partisan struggle, as in this case. Both confident bullshit and partisan struggle are enormously corrosive to the collective epistemic endeavor.
I didn't sign anything, make any appointments, buy any insurance, walk into any offices, present any identification, or even tell the guy my name. The total time involved was about 20 minutes, but only because I wasn't using Lightning. I had a similarly informal and short, but more argumentative, experience with the previous transaction, at a winery whose owner loudly insisted that he hadn't received the money... until he realized he was checking the wrong phone.
You are so full of shit comparing this to a real estate transaction that I am at a loss for words. You're about as full of shit as the winery guy. He, too, was blathering all sorts of nonsense at me about Bitcoin that showed he didn't have the faintest idea what he was talking about.
The scenario you're talking about is a 51% attack where big mining pools collude to ensure that nobody else can ever mine a block (because it might allow the laundering of tainted coins). That would be a global and extremely obvious disaster for the Bitcoin network, and it would be remedied by whatever measures were necessary to end the attack, possibly including a hard fork or strategic bombing.
Remember that the world's investor class now has 2 trillion dollars tied up in Bitcoin, and they do not want to see it collapse, and such a successful attack would greatly undercut investor confidence in the value of the asset. The Bitcoin crowd has enough pull that they extracted a pardon for Ross Ulbricht and got a friendly SEC head this year. Even before that, when one or another pool would grow to the point where it might be able to mount a 51% attack, it would get hit by DDoS attacks to bring it down.
You're comparing that to a bank declining a credit card transaction because you're in another city.
Governments have been pressuring Bitcoin miners for over 15 years; it's outright illegal in many countries. The hashrate dropped by more than half when the PRC outlawed Bitcoin mining. The effect on the functioning of the network has been pretty much undetectable.