Antonopulos: "How do we measure the success of Bitcoin?"

Brendan Burgess

Brendan Burgess

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Update: The talk is now on Youtube https://youtu.be/mPMsbgWl9p4

This was the topic of AA's excellent talk last night. I didn't bring a notebook, so if one of the other attendees wants to expand or correct this.

It was a capacity crowd - probably around 300. For a group which does not like centralised control, it was a very well organised gig.

AA was a superb speaker. He had no slides and no notes and kept the audience captivated and amused.

I am using "Bitcoin" as shorthand for the "decentralised open blockchain, bitcoin and other open cryptocurrencies"

When he asks people how will they know when Bitcoin is successful, he gets a few answers.

It's not "when it goes to the Moon".
This should not be a measure of its success. If you are investing in Bitcoin to make money, you are doing so for the wrong reasons and it's likely that you will be disappointed.

There is no point in measuring Bitcoin by its market capitalisation or "dominance ratio". Cash will always have a higher market capitalisation.

It's not "when it's adopted by the mainstream"

He gave a very interesting history of the way Linux has replaced Unix. I missed the relevance of this though, as this seemed to indicate the opposite of what he was saying. Maybe Ant Dec or Leo can clarify.

He spoke about the way the internet has gone mainstream. For many people Facebook is the internet. He does not regard this as a measure of success. He sees no point in replacing Rupert Murdoch with Mark Zuckerberg.

If Facebook announces a "Facecoin" in the morning, it will be much more widely adopted than Bitcoin. That will not make it a success.

"Bitcoin will be successful when the 5 core principles are widely adopted"

These are(I think)
  • privacy
  • open source
  • borderless
  • decentralisation
  • lack of censorship
That will be the measure of success.
 
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There was a question and answer session answered.

One very insightful contributor, a fair bit more than the average age of those attending, asked "When Bitcoin falls to zero, will you still consider it a success as long as it adheres to the 5 principles?"

He replied that Bitcoin would not work at zero. But he ran his business when Bitcoin was worth $3. I got the impression that it was easier to run at $3. He got paid less for his work, but paid less for things as well. He genuinely does not seem to care about the value of Bitcoin as long as it has some value.

Another question was a complaint about the organisers not accepting crypto payments for the event. AA took full responsibility for this decision himself. He had written a program which was used in Chicago to allow payment by Crypto. Few people used it and it didn't work.
He insists that everyone pays the same price, that no one can tout tickets and that there are full refunds up a short time before the gig. That did not seem compatible with payment by Crypto. ( One cynic suggested to me afterwards that the transaction costs for a $25 payment by Bitcoin would wipe out all his income and/or a fall in price of Bitcoin between the time of booking and the event could mean that he was speaking for free.)

He was asked about the energy use. His view was that the source of energy was the problem not the use. Why do we not complain about the amount of energy used to play Angry Birds? If we run coal-fired stations to generate energy for Bitcoin, that is a problem with the abuse of our planet. Many miners use Green energy and that make Bitcoin mining cheaper.

He was asked what he thought about hardware wallets. I would have thought that most people there knew all about them - about 90% had transacted in cryptocurrencies. So I wasn't sure about the point of the question. I assumed from the bit I have seen discussed, is that they are essential.

There was a question about some criticism by Edward Snowden that the public ledger was its biggest flaw. He seemed to agree that it was a problem but that they were working on it. ( I don't claim to understand this argument.)
 
It was a very good point that measuring bitcoin's success via market capitalisation makes little sense.
When FacebookCoin, FedCoin or EUcoin comes out, banks / governments will pump so much money into it that it will eclipse all the open cryptos. Market-cap wise.


Regarding Linux, he was pointing how a free open-source project, starting from nothing grew so popular and powerful.
Everyone can go and clone the code and build on it to improve it. And they did so, many of them for free.

Bitcoin development happens in a very similar way. It's an open-source project.
If a developer wants to change something in the protocol he can write the code, submit it for peer review and testing and the community either accepts the changes or doesn't. Of course its pretty hard to change something on the base layer.

Nothing stops you from creating something on an additional layer though. You can make a wallet for people with special needs, that may have a hard time dealing with PIN codes.
Or a very convenient app for coffee shop merchants to accept fast payment in all the cryptos ( apparently buying your morning latte with bitcoin is a very popular measure of success :rolleyes:).
You can do those things without permission, but try to change the ATM pin input to accept images or make some changes to the POS terminal.


And about the event accepting crypto, Andreas' plan is to have it sent to Coinbase straight away, likely to be sold for USD.
He believes it is the most responsible thing to do that will not upset the event operations.
There is nothing wrong with using centralised services, like Eventbrite, Visa/Mastercard and Coinbase. In this case it is his choice, and he does it because they help him get the job done.
The bad things happen when there are no alternatives, no competition and the centralised services start overcharging, be it money, privacy or some other thing.

Some people want Andreas, and others, working with exclusively with crypto. Well, we are not there yet and we may never even get there.
I believe he was asked something similar and he said that Bitcoin becoming mainstream, the dominant mainstream financial instrument is highly unlikely and would not even be possible for maybe 3 generations.
( I may have taken that last point out of context, I am not certain... Edited video transcripts should be out in a week or two)
 
Brendan Burgess said:
There was a question about some criticism by Edward Snowden that the public ledger was its biggest flaw. He seemed to agree that it was a problem but that they were working on it. ( I don't claim to understand this argument.)
Click to expand...
Edward Snowden referred to Bitcoin in a recent interview within the last couple of months (available on youtube). For obvious reasons, Snowden has a keen interest in all things privacy related. In the earlier days of bitcoin, some people bought into the fallacy that bitcoin was anonymous. The truth is that (for the most part) it's quite the opposite. The bitcoin blockchain provides an immutable record of all transactions. If you can be linked to one transaction, then a whole trail of transactions are associated with you - and plain for all to see.

There are coins which are truly anonymous eg. zcash, monero, dash, verge, etc. Additionally, it is possible that changes can be implemented within the bitcoin project to facilitate privacy. I suspect this was what he was referring to. I'd imagine though that no such change will be implemented for the foreseeable. I'm sure there could be regulatory blowback were they to implement at this time.


Brendan Burgess said:
He genuinely does not seem to care about the value of Bitcoin as long as it has some value.
Click to expand...
Yes, that sounds like Antonopoulos. He doesn't get drawn in on the whole speculative aspect. That to him is not helpful to the bitcoin project. It's logical too. Bitcoin settling at a price just above zero may be a disaster for speculators. However for the functioning of Bitcoin as it was intended, so long as the price settles anywhere above zero, then it can function.
 
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Hi Ant

Thanks for the additional comments and clarifications.

Brendan Burgess said:
"Bitcoin will be successful when the 5 core principles are widely adopted"

These are(I think)
  • privacy
  • open source
  • borderless
  • decentralisation
  • lack of censorship
Click to expand...


Did I get the 5 principles correct?

Linux and Wikipedia are a huge success and they are free of charge. On a local scale, it's the same with Askaboutmoney. Most things are not judged by financial metrics.

I was impressed by the low entry fee yesterday and the fact that they allowed cancellation. He seems to be financed by crowd-funding as well. But I doubt if most people who have bought Bitcoin would share AA's philosophical outlook.

If Bitcoin settled down at a valuation of $1, and maintained those principles, do you think that many of the faithful would consider it a success?

Maybe AA would be glad to see them gone.

Brendan
 
Brendan Burgess said:
If Bitcoin settled down at a valuation of $1, and maintained those principles, do you think that many of the faithful would consider it a success?
Maybe AA would be glad to see them gone.
Click to expand...
Without a doubt, he'd be glad to see them gone. Antonopoulos always talks in terms of investing in skills (associated with building the blockchain) as opposed to price speculation. As has been discussed on here, the speculative aspect adds nothing to achieving those 5 core principles....it's a side show.
The bulk of the speculation has happened in the past year or so. Those that had an interest in Bitcoin before that were a different set - and were truly interested in what the crypto could achieve for society (as per those 5 principles).
Having said that, pricing has resulted in either enriching or emptying peoples pockets - so it's hard to ignore.
 
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Yes AA is funded by direct donations and Patreon. I don't think he takes profits from ticket sales.
He was saying he is keeping the price low and also giving out free tickets to students and those who cant afford them.
I am not sure how the last part works when tickets are getting sold out...

Many people buy his books and they are all available for free.
What is interesting is the Internet of Money series. its just a collection of talks (available on Youtube, for free, no ads because scammers were advertising on his channel) with some grammar / math errors corrected, written on a book.
It sells well.
The most interesting this is that the audiobook of that sells even better!

Anyway, about the core principles, i got to admit I cannot accurately recall his choice of words.
Open
Borderless
Permissionless
Censorship Resistant
Decentralized
Immutable

Those come to mind and apart from the fact that they are 6 I am pretty sure someone with better understanding of the terminologies can combine them and end up with 3-4.


And about the price, while it shouldn't be a measure of success I believe it could measure failure.
If it drops to $1 it means pretty much noone cares about the core principles and they are all happy using 'FaceCoin collecting their purple-stars and cashing them out at Starbucks!'
It would mean the userbase has shrunk back to a handful of cypherpunks.
 
Yep, definitely worth going along to.

I was surprised that he mentioned a couple of time that countries like Venezuela, Argentina and other with 'despotic leaders' was where he saw the real use case for cryptos, and that they had little to offer countries like Ireland where banking systems are largely stable and reliable.

He did seem a little defensive on offering crypto payment options on tickets. That may be down to having to admit his solution didn't work, or not wanting to get into challenges of transaction fees & confirmation times being higher than traditional payment methods.

ant dee said:
He was saying he is keeping the price low and also giving out free tickets to students and those who cant afford them.
I am not sure how the last part works when tickets are getting sold out...
Click to expand...

On the night, and in the sales blurb in advance he did make a big deal that his talks had no corporate sponsors buying out all the best seats. I'm not sure there are many companies that would want to get in on that show.

The ticketing site had a link where you could request a subsidised ticket by providing your details and a write up of why you deserved one. It said they "will try hard to accommodate several sponsored guests."
 
You can sponsor him on Patreon.com

One of the benefits is access to a Happy Hour in Dublin, although I am not sure what that is.

Oddly enough, you must pay in real currency and not cryptocurrency.

Brendan

Q: Why aren't you fundraising in bitcoin or another cryptocurrency?
One of the best features about bitcoin is that it isn't suited for recurring payments. With bitcoin, you would need to authorize the payment monthly. Every single month; which is a huge hassle for most people. In the future we might be able to use a smart contract for recurring payments but we're not there yet. For now, Patreon represents the best option for this kind of ongoing fundraising. A consistent, recurring stream of income allows me to budget and plan for the long term.
 
Happy hour is just going out for drinks with the man, having a chat.
We were out the day before the event , 4-5 patrons showed up , it was good fun and we stayed for about 3 hours.

The reccuring payments are a big deal for Andreas. He says that they can make income projections this way, hire more staff with the ability to plan ahead a few months in advance.
One of the first things he did when patreon picked up was to turn of advertisements on YouTube, because the overwhelming majority of ads were from scammers.
Bitconnect had like 80% he said if I remember correctly and it's not possible to control who advertises on your videos.
Although other YouTubers have started manually advertising on their videos, Andreas didn't mention if he would do that.
 
Antonopoulos speaking in Chicago at the end of April - LINK

Should resonate with anyone who has an interest in crypto. However, his recognition of some of the flaws and downsides of the current offering and associated market activity should resonate even more with the crypto skeptics amongst us. I've noticed two points in which he has changed the narrative in recent talks;

1. Yes, btc has an enormous appetite for energy but that there's probably space for one such PoW based crypto given that there is real value in having a totally immutable ledger.

2. Miner centralisation has peaked as they're no longer swapping out kit every few months - which means the smaller guys will catch up. ...but that it will take some time for this to filter through.

Not saying whether right or wrong as I don't really know...just find it interesting - have not come across others with a similar consideration. I'm tending to change my mind on the energy usage aspect...swaying back the way again now that i'm looking at an alternative crypto that has little in the way of usage fees (but I guess the point he's making is that it brings a higher level of immutability).
Have not heard anyone make similar commentary on his second point (or rubbish it)...so not sure if that's the way it is or will play out.

As an aside, people seem to be giving a lot more credence to Bitcoin Cash more recently. Was of a mind to write it off last year but now it seems it's harder to call as it's building some momentum. That said, perhaps Core will go the way of store of value and Bitcoin Cash will plough on - in terms of day to day transactions?
That was the thinking of the Collisons/Stripe when they got out of btc earlier this year.
 
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tecate said:
1. Yes, btc has an enormous appetite for energy but that there's probably space for one such PoW based crypto given that there is real value in having a totally immutable ledger.

2. Miner centralisation has peaked as they're no longer swapping out kit every few months - which means the smaller guys will catch up. ...but that it will take some time for this to filter through.
Click to expand...

You just reminded me, in response to the question on power usage, he did suggest he had some concern for the rise & convergence in mining ASICs and how they could potentially be manipulated to undermine or steal cryptos.

The three recent 51% attacks on Verge and one on Bitcoin Gold show there are challenges with the PoW model.
 
Leo said:
You just reminded me, in response to the question on power usage, he did suggest he had some concern for the rise & convergence in mining ASICs and how they could potentially be manipulated to undermine or steal cryptos.

The three recent 51% attacks on Verge and one on Bitcoin Gold show there are challenges with the PoW model.
Click to expand...
Interesting - had not heard of that. As you say there have been a number of 51% attacks recently - with zencash being the most recent in the last 24 hours. Here's a metric of costs involved in carrying out a 51% attack. They suggest that there isn't enough hashing power readily available to tackle bitcoin - but I guess that's what might come into question in line with what he's suggesting.
 
I had never heard of a 51% attack before. It's frightening stuff.

https://www.investopedia.com/terms/1/51-attack.asp

DEFINITION of '51% Attack'
51% attack refers to an attack on a blockchain – usually bitcoin's, for which such an attack is still hypothetical – by a group of miners controlling more than 50% of the network's mining hashrate, or computing power. The attackers would be able to prevent new transactions from gaining confirmations, allowing them to halt payments between some or all users. They would also be able to reverse transactions that were completed while they were in control of the network, meaning they could double-spend coins.
 
Andreas did talk about this.
The more confirmations you have, the 'more immutable' your transaction is.
A 51% attack on bitcoin still comes with very high electricity cost, you need quite more than 51% cause otherwise your chances of succeeding are, well, around 51%.
Block rewards need 100 confirmations to be spent.
Add to that the immediate collapse of the price after the attack...

We got:
  • electricity cost
  • hardware cost of your mining equipment being more or less useless after you crash the price
  • lost block rewards, between 20 to 100 times 12.5 BTC you will only sell after the attack is revealed and the price crashed
  • luck factor, you can still fail even with 60%
I will keep an eye, probably Andreas' assistant will upload a Q&A on that since its on the news these days.
 
Agreed, the scale of Bitcoin is most definitely a plus in that regard.

The biggest risk in this space will come from hackers/ malware who won't be paying the electricity bills. There was a huge spike in mining malware towards the end of last year, mostly focusing on cryptos other than Bitcoin due to the prevalence & power of mining ASICs. If some of the bigger botnets started to focus more on cryptos than on spam, they could cause problems.

Another problem is the potential of someone discovering and exploiting a flaw in the ASICs.
 
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