💾 Archived View for vi.rs › bitcoin-critique captured on 2020-09-24 at 01:23:37. Gemini links have been rewritten to link to archived content
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█▀ atoshi never solved the discovery, coherence, trust, privacy, and
▄█ coordination problems in a decentralized way. Bitcoin uses a list of hard
coded IP addresses—just like the Tor network—to solve the discovery and
coherence problems. When you start up a node and want to (re-)connect, it
connects to one of those hard-coded IP addresses to link to the network. This
is a fundamental weakness in Bitcoin's resistance to state sponsored attack,
which we can anticipate if Bitcoin ever becomes a serious competitor to a fiat
sovereign currency such as the USD.
The other primary problem with Bitcoin is the exchange of Bitcoin addresses
between users that wish to send bitcoins (i.e. coordination). There is no
secure in-band solution provided by the Bitcoin network. This forces users to
invent their own means for handling the communication. Also, there is no way to
comply with financial regulations without exchange of KYC credentials and OFAC
check proofs (i.e. trust). There's no way to trust those credentials without
secure communications (i.e. privacy) with anchored DIDs (i.e. trust). The
Bitcoin never was never really designed to support proof-based compliance of
any/all regulations. At some point it will need to if it wants to avoid legal
sanction and banning when it becomes the only stable currency left.
This non-decentralized and non-solutions for the distributed systems problems
makes large Bitcoin exchanges such as Coinbase inevitable. By not addressing
those problems, Coinbase has cornered the market for casual Bitcoin
investors and is now valued at more than $8B.
Without fully decentralized solutions, Bitcoin is exposed to both state-
sponsored attack as well as corporate capture by corporations like Coinbase
that threatens the independence of the network and harms the sovereignty of
Bitcoin users. There's a real possibility that the governments of the world
will plunge us into a global economic meltdown with hyperinflationary fiat
currencies *before* Bitcoin gets properly hardened to withstand the innevitable
government attacks. History may overtake Bitcoin if we don't harden it today.
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