The r0ach report 18: The great PoW lie

in bitcoin •  2 years ago  (edited)

I made a statement that no cryptocurrency created thus far (and likely ever) improves upon the noble metals as a form of sound money. Some cryptocurrency fanatics didn't like this statement because they bought into the hype that bitcoin will become the world reserve currency and take over the universe or something. Here are the facts about the dominant forms of cryptocurrency today.

Proof of stake and proof of work are both centralized rent seeking usury systems. In proof of stake, you deploy your capital then continuously centralize further through interest as your capital creates more capital for no reason while on auto-pilot. In proof of work the exact same thing; you deploy your capital and continuously collect the same usury fees on auto-pilot while parlaying all profits into expansion until something resembling full monopoly in order to leverage the vig higher.

Proof of work is just externalized proof of stake in practice. The key symptom that makes both systems rent seeking usury schemes is the ability to extract money on auto-pilot, otherwise known as interest. Unless you're PoW mining for 0 profit or at a loss, you're accruing interest. This is the big lie about PoW; it's not "work", you're doing no kind of work. Being forced to solve a captcha manually is work. When something requires no manual intervention at all, you're just accumulating interest and recreating the same rent seeking usury systems that already exist in the world.

In case you don't understand, I leave you with this picture:

(picture source: pravda, my annotation - original picture author unknown)

Authors get paid when people like you upvote their post.
If you enjoyed what you read here, create your account today and start earning FREE STEEM!
Sort Order:  

Actually, this was the reason I invested in Crypto knowing that they will be more centralised than the central banks we have today. The people who run the show behind the scenes will make this succeed for this reason only, this is very unfortunate but true. even steemit runs in the same way somehow. But i still do invest in Metals heavily (more in silver), so let's see how far this can go.

Well, in that case you're left with very few benefits of using such a system. One benefit would be the hope they can't expand the money supply and are forced to stay within 21 million units, but bitcoin security weakens the lower the base block reward goes to the point where even this may not be a given:

  ·  2 years ago (edited)

I am not in for the benefit of using it or not, I am more in to make money and convert the money to real assets and metals, so as long as it is sustained, I will be making more purchases like the below one I did from some of the profits. the below silver cost me one Bitcoin only. if at a later stage i can buy more silver or lets say gold, land with my bitcoin investment, then i consider my self wining,

Hey man, you don't have to convert me, that's exactly what I do lol. The value of cryptocurrencies right now is entirely due to regulatory arbitrage, but the state will eventually bring the hammer down and kill much of that value proposition.

I imagine they will attempt to co-opt bitcoin with some type of mandatory fixed address alias system wrapper or you'll be considered a launderer, then some random "anon" coins like Monero might take over the black market/regulatory arbitrage sector.

While we both love and agree on metals, I think the state will do exactly the opposite and send cash on the other hand to a black hole. The state does love cryptos and hates cash for the reason that crypto will be easily trackable and centralised while cash and metals are not.

Well, that's what I mean. They will let cryptocurrency proliferate and then ring fence it all in with extreme regulation where it's basically the same thing as using fiat and probably take over most of it via the legal system in the process.

I mean, assuming this stuff continued on into the future, mining pools would even be regulated by entities like the EPA to the point where only favored minions of the state can even mine at all.

I loved your graphic the most. It really says the best about transaction fee. Loved it from my heart.

Thanks For the information based post !! @r0achtheunsavory

This post receiver 99% upvote from @xdark21 really good job man you will be a millionaire son. Great post

  ·  2 years ago (edited)

Which is why I like blackcoin : started off PoW, then turned to pure PoS, so a fair distribution. No ICO/hype, humble community and dedicated devs. PoS interest is a meagre 1% per year (in a process called staking which uses a fraction of your bandwidth. ) and that minimizes the "centralization factor" better than most other currencies

  ·  2 years ago (edited)

Check Blackcoin rich list and tell me if it is really a fair distribution, there is no fair distribution in any coin or metal out there, most things are owned by few people whether it is crypto, metals. stocks, or cash.
Disclaimer: I do own 15k blackcoin, so I do not have anything against the coin itself. I am just stating that there is no fair game here.

Fair distribution in the sense that there was no premine/ instamine or ICOs AND it was only PoW at a time when an average person could mine without requiring mining farms. Now, if only a few people mined and it turned centralized as a result, you can't not call it a "fair distribution".

most things are owned by few people whether it is crypto, metals. stocks, or cash.

of course this is true in the absolute sense, but what we're not talking about completely eliminating centralization through a distribution process, but merely reducing it to a degree. Even bitcoin had Satoshi mining 1 million coin before anyone knew, this is of course, centralization, but it's still acceptable.

Some coins on the market these days are 75% (of the total projected supply)or more pre mined by the dev, or for PoS, mined just about enough that their interest rates would push their share to 75% or greater very soon. This amount of centralization, however, is not acceptable. You get the idea

And not to mention the centralization aspect takes over even metals, can you or I mine for metals without govt permit? lol :D

criminal endeavor of choice

I didn't see any slave labor silver mines, so that's bullish for silver since cost of production wouldn't be negatively impacted. Unless there are illegal copper/lead mines where silver is the byproduct heh.

Because that I love monero