There were bunch of threads about getting interest from your crypto holding, what is the difference between those and deposits in a bank account? You’d have to unwind your balance sheet quickly (which sounds like a bank run).
Finance and money came hand in hand. And they helped us massively speed up progress (without lending, without financial stability, many ventures become impossible or extremely complicated).
Read a decent book about the history of economics and politics (e.g. Fukuyama), and you’ll learn that none of the innovation and consequent prosperity we‘re benefiting from today would have existed in a world without that same political order you’re criticizing.
A system without government controlled currency would likely be a totally different kind of political system. Throughout the history of mankind groups have attempted to seize power (not to the benefit of most), and system changes are great opportunities for that.
Know what you wish for. 
Nobody proposes creating a whole with “only one” centrally-controlled currency (yeah, I dropped the “local”). There’s many currencies and you’re free to use others - even in Switzerland. You are free to pay in EUR, if you and the payee agree.
There is, however, some proponents of disallowing certain unregulated currencies (coins).
Society seems to have agree that the benefits of cars and knives outweigh the benefits of restricting or banning them.
Some societies seem to agree that the benefits of having access to firearms outweight the ones (or costs) of banning them.
The jury’s still out on Bitcoin.
I assume a sizeable part of the population would agree that the overall social benefits of Bitcoin are low.
That one I can answer. There are two kinds of interest here:
There might be some kind of counterparty risk though, even if it’s not obvious (e.g. hidden through layers in the contract, maybe with the oracle?)
Edit: after some research seems like there’s well known risks on liquidity evaporating (https://scfab.github.io/2020/FAB2020_p5.pdf)
By the way another example of loaded balance sheet that might have trouble unwinding are stable coins. They are pretty close to money market funds and would suffer from similar issue (e.g. runs) with no lender of last resort
And while we are speaking, $750’000’000m were moved OFF exchanges in just 10 minutes. As far as I know this is the biggest outflows ever.
Knowing that Palantir wants to buy and that both Coinbase ($1.25b) and Square ($2b) are raising cash through debts…I have some ideas on what is happening behind the scene.
This ain’t the end of bitcoin.
Yes, you enter a contract built on cryptonomics. They can be ill-defined. Or the flaw may be trade-off for something else. Additionally their cyptographic or economic basis can potentially fail.
Then again, critical failure can happen even with the presence of a central bank. Such systems can for example also fail politically. Also you could make some kind of central bank for your coin too. You could make it strictly rules based, controlled by voting, or even designate someone responsible for making decisions.
Hm yes, deep in IOU territory here. I do wonder if it would be possible to create a purely synthetic stable coin? Maybe once the cryptonomic bridges to the real world have become robust enough?
I see your point. Well the 64 shards are kind of the step in that way. You have a separate ledger and separate verifiers, and if you want to transfer anything between the ledgers, it’s complicated.
Btw making transactions on mars would mean sending order to Earth and waiting for execution. Also I’m not sure if BTC lightning network does not address this issue.
I did not study eth2.0 in detail, but there will be exactly 64 independent shards, don’t know what you mean with island. It could be that the shards will be regionally split, don’t know. For coordination there is sth called the beacon.
Regarding mars, I still don’t see what you mean. You want to spend your utxos, you sign a transaction with your private key and send it to earth, where it gets added to the pending transaction pool. There it gets added to the blockchain. Nobody would run a node on Mars as it can’t realistically mine any blocks. But yeah, the delay would be an inconvenience. I see the use case for separated ledgers. Or, simply, Mars would run its own currency.
Don’t you think that you are being a tad too dramatic?
Well, they at least heavily incentivize making sure you are not in a lag island and instead form a connected network. It’s you who has to ensure that. Else you get slashed/lose completed proof of work/have transactions reset. For example if China shuts the GFW then one side will have the majority. The other side will immediately notice that they are making minority desicions. They will stop processing or face named consequences. Not perfect at all, but more than nothing.
Lag island does not exist and does not mean anything… If China is disconnected for some reasons, you still have other miners pool. If all miner pools are disconnected somehow, the mining difficulty will adjust and anyone will be able to start mining bitcoin with any device connected to internet just like in the early days. Check “difficulty adjustment” for more info.
Also blocks are randomly created and discovered by miners, so if a miner is disconnected, then he won’t discover the block. And if it happens while mining, another miner will take over and gets the reward.
The block mining time does not change, just the difficulty based on miners hashrate.
I think the question is: what do you do with the transactions that happened outside of the main chain (or, in the example, how do you get China back on the main blockchain once it’s been cut off for some time)? Do you fork China’s chain? Do you cancel all transactions that have happened in China? Is there a way to reconcile the two?
Wrong.
Other miners that will not produce the longest chain.
This is irrelevant. But yes, the difficulty adjusts every 2016 blocks. It will take a while to get there if you lose China miners. Blocks will not be 10 minutes on average in the meantime. If “China” reconnects and it had been mining at the usual hashrate in the meantime, it will be the longest chain and most nodes will accept it.
The following are just my loose thoughts without much research. I’m sure a proper crypto dev would provide a better answer.
If the “lag island” problem was at all possible, I’m sure it would have been attempted by some troll. After all, you just need to disconnect your node from the internet, wait for the difficulty to drop and then mine blocks until you have the longest chain. Yet this has never happened. Why?
Well, it’s not true that the block that belongs to the longest chain wins. The miners go with the block that gives them the most money in the long run. So the block, that is validated by the most miners, wins. If suddenly an exotic chain appears on the network, where some ancient blocks are modified, it will be discarded, as 99% miners have already validated a different block and made money on mining and on fees from subsequent blocks.
Also the problem of a fork does not seem real to me. A miner will know when he’s cut off from the global network and will stop mining, as the using the energy for mining eventually useless blocks makes no economic sense.
If you time the network split with a large wallet doing a double spent might be fun 
I still don’t see the problem. Transactions are validated on the blockchain all the time, only to be discarded a few minutes or even hours later. That’s why you always give yourself a threshold of a number of blocks that your transaction’s block is buried under. I think 2 blocks is usually enough to be sure, but in some rare cases it may be more. That’s an inherent feature of Bitcoin and it’s not even exclusive to situations with network problems. Just a part of the process of working out consensus.
If 999 nodes tell you the block with your transaction is part of the main chain, then it means f*** all what that one corrupt node tells you. If even if we imagined a situation where mining power gets cut-off in a 60-40 split (e.g. China blocks Chinese miners indefinitely), then probably even the Chinese BTC holders would disregard that new forked chain and still rely on their BTC stored in the blockchain maintained by the rest of the World. I wonder if China starts shooting down Starlink satellites, because otherwise there will be plenty ways to bypass the great firewall…
I extended my comment above so please read that if you haven’t yet. Your BTC will be safe on the blockchain maintained by the rest of the World. Just like the rich Chinese like to open accounts in private banks abroad in foreign currency, that China might not respect. This is not sustainable to have such an oppressive government. It’s very scary, and no @anon90991199 I’m not being overly dramatic.
And as mentioned before, I can’t see how can you make the great firewall so tight that nothing can go through. You would have to shoot down Starlink, ban all VPN and HTTPS and then still I’m sure someone would dig a hole under the border and lay an illegal cable because it would be that profitable to give the Chinese people what the government has taken away.
You would be surprised how certain solutions purely reserved for nerds can slip into the mainstream. Nowadays it’s a no-brainer for normies to use VPN while in China, which is illegal, but everybody does it to access Google, YouTube, Facebook etc etc.
I don’t think economic interests are aligned, a large double spent is likely to wipe more value from an existing holder than whatever they can gain (I doubt they can liquidate during that time). Most likely would be someone with some interest in removing trust from bitcoin.
Thanks to Bojack’s comment I realise I don’t understand how lending would work in a future BTC world. Can anyone help?
Example: today I may put 10,000 CHF in my UBS account. UBS aggregate my deposit with others, calculate a reserve and lend the rest out. Some of that lent money is deposited back at the bank again and the process repeats.
UBS is regulated by the central bank which is also the lender of last resort (can print more CHF as a last resort). So depsite UBS lending my money out I have a high degree of confidence they will give me my 10,000 CHF back when I ask for it, plus or minus any interest or fees. Other people have the same confidence and therefore there is little risk of a run on the bank.
In the future, I would put 1 BTC where - in an exchange (?) Can the exchange then lend BTC in the same was as a bank today? If yes doesn’t the risk of a run on the bank still exist?