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Bitcoin and blockchain enthusiasts have been claiming that bitcoin (or etherum) is going to take the world by storm any day now, yet all I ever see anywhere are

Bitcoin and blockchain enthusiasts have been claiming that bitcoin (or etherum) is going to take the world by storm any day now, yet all I ever see anywhere are big claims (revolutionizing payments, disrupting remittance, ending wars, freeing the people, destroying the banks etc, ad nauseam) with very little substance and lots of scams, frauds and dead-end ventures. Dark markets, internet gambling and a handful of other novelty and niche communities can extract genuine utility from bitcoin, and that should continue into the foreseeable future, but the general population just has no use for it. None. Despite all the hand wringing about having to endure the treachery of big banks, pull style payments, and entering long credit card numbers, bitcoin is still harder to use, even harder to keep secure, and without any guarantees, assurances or consumer protections. Bitcoin is an interesting novelty at best, and everyone knows it, even many bitcoin enthusiasts. Now, in recent months, we're suddenly hit with a bevy of stories about big name financial brands and famous VCs pouring cash and research into the blockchain, and just like that, the goalposts have shifted. This is what we've all been waiting for; this is what will really bring bitcoin into the mainstream, there has to be something big here when you look at all the colossal mountains of cash that have been dumped into the bitcoinverse... yet somehow, we're still at a loss as to exactly how the "x but with blockchains" formula is meant to revolutionize everything. If the 100 million dollar investment into 21inc's vision of putting a bitcoin miner in every refrigerator is any indication of what we're to expect from all this investor cash, I think we can safely assume that what we're witnessing is simply the hyperbolic bitcoin hype machine functioning within normal parameters. Of course, I'm probably just an idiot who doesn't "get" bitcoin, it's pretty difficult to understand, since even after all these years I just can't grasp the amazing potential of bitcoin. What other explanation could there be?

deet 11y ago
It's very difficult to dispute your assertions that Bitcoin currently provides very little utility outside niche markets, that a lot of the investments being made are laughable, and that the shifting goalposts phenomenon is in full effect. But remember, a lot of things we use the internet and mobile phones for today were envisioned and promised in the late 90s but failed to materialize in a practical, mainstream way until very recently, over a decade later. Who knows what cryptocurrencies, or the concepts behind them, will mean in another 5, 10, or 20 years. Maybe nothing, maybe a lot. It's still too early to tell. (I'm skeptical myself, especially in actual currency applications, but open minded.)
gogopuppygogo 11y ago
I like the following statement as a good way of explaining the slow adoption of BitCoin: Bitcoin is growing 25% faster than the internet in its early years. http://www.ibtimes.co.uk/bitcoin-growing-25-faster-internet-its-early-years-1512717 http://www.ibtimes.co.uk/bitcoin-growing-25-faster-internet-... http://insidebitcoins.com/news/investment-dollars-bitcoin-today-versus-the-internet-1995/26382 http://insidebitcoins.com/news/investment-dollars-bitcoin-to...
- adventured 11y ago
  1996 wasn't the Internet's early years. Raising more venture capital in non-inflation adjusted terms, is not the same as growing faster. Those are completely different concepts. Also, adjust that for almost 20 years of inflation, and it's half as much. Not to mention that figure only includes a portion of the total VC raised by Internet companies in 1996, it's intentionally misleading in just about every way possible. Even comparing the VC raised, in inflation adjusted terms, would be comically simplistic. What were interest rates in 1996? Beyond that, Bitcoin better grow drastically faster than the Web in 1996: bitcoin gets to ride on top of trillions in investment having already been made into infrastructure and computing. Even if it were true that it's only growing 25% faster than the Web in 1996, I'd say it's moving too slow by a factor of x200. Imagine the laugh we'd be having, if you were to say that the iPhone today was only 25% larger than the Palm Pilot after seven years on the market, despite all the market / infrastructure / Internet advantages that the iPhone gets to enjoy today.
Ologn 11y ago
> Of course, I'm probably just an idiot who doesn't "get" bitcoin Two more "idiots" who don't get Bitcoin are Warren Buffett and Charlie Munger. Munger says Bitcoins are "rat poison". It's possible they're just old fuddy duddies who "don't get it". It's also possible that, both being born during or before Herbert Hoover's presidency, that they've had decades of experience sniffing out what's valuable and what's not.
- brianclements 11y ago
  what's valuable today, perhaps. Blockchain tech might surprise us all yet. I don't think the possibilities are overblown, just the timeline. It really is a financial solution for a different world then what we currently live in, and only extreme global circumstances can even come close the momentum needed to spark a change such as that in our financial system.
- m-i-l 11y ago
  The article makes an analogy with the internet in 1994, which is when experienced technology "experts" such as Bill Gates were dismissing the internet as a "fad". In my experience, the people who don't "get" it often don't distinguish between Bitcoin itself and the underlying technologies. It would be like identifying the internet in 1994 with one particular web browser, or web site, or startup. The transformative elements in this case are things like the distributed ledger for decentralised trust, the possibilities for automated micropayments by devices rather than people, and so on. For example, as per my other comment on this thread, most of the large finance companies which are investigating blockchain technologies are investigating private blockchains rather than the Bitcoin blockchain, but this distinction is often missed by the press in their reporting (indeed isn't an entirely clear distinction in this article).
Meekro 11y ago
You're not an idiot -- the things you described are very real. I've heard about tons of scams and quite a few dead-end ventures. The 21inc thing sounds pretty bizarre to me as well, but there is more going on in the bitcoin world than just that. I'm involved with a VPS hosting company called ChunkHost, and we've accepted bitcoin for many years. We're not criminals, and we don't tolerate criminals on our network, and nonetheless bitcoin has served us well as a means of payment. We've written on our blog[1] about how bitcoin payments are 20-30% of our revenue. Another interesting company is purse.io -- they let you get something like a 20% discount on your Amazon purchases by paying in bitcoin. coffee.foldapp.com lets you get 20% off your Starbucks purchases by paying with bitcoin. Again, this is not a scam -- I use it and it works. Don't you think this is a real benefit that real people could appreciate? I'm curious how long you've been following bitcoin. I've been interested in it since 2009/2010, and have seen the goalposts move a great deal: every time a goal is reached, the critics change it so they can declare bitcoin a failure. First it was that "you can't buy anything for it," which was true until a pizza was sold for 10,000 bitcoins in mid-2010. Then it was "no store accepts it" -- which was true until a few months later when you could buy things like web hosting from tiny bitcoin-only companies. Then it became "no large company will ever accept it." That remained true for a while, but eventually Wordpress became the first large company to do so. Others like Newegg, Overstock, and even Microsoft followed soon after. "Nobody will ever pay with it" was another one, and that was shattered once those companies started posting bitcoin revenue which, despite being a tiny share of their overall revenue, showed that people were consistently spending their coins. I'm not saying that grandma will be buying gas with bitcoin anytime soon (or ever) -- just that there is substance there: merchants accepting it, consumers spending it, and interesting things like purse.io that couldn't exist without it. [1] https://chunkhost.com/blog/17%2Fbitcoin_revenue_in_2014 https://chunkhost.com/blog/17%2Fbitcoin_revenue_in_2014
- TylerE 11y ago
  There is tons of anecdotal evidence that Purse.io exists primarily as a way to monetize stolen credit cards.
  - 2drew3 11y ago
csomar 11y ago
Relevant Comment: https://news.ycombinator.com/item?id=10139978 https://news.ycombinator.com/item?id=10139978 You are not an idiot. You are just underestimating how large the "fraud" economy is, at a global scale. Think SilkRoad, Ponzi Schemes and Capital fleeing overseas. Bitcoin can be huge in these industries and this can drive it to be huge overall and then it might become successful on the mainstream use.
mrb 11y ago
"all I ever see anywhere are big claims with very little substance" Bitcoin is certainly growing. Consider that in 6 years: it went from zero to over 100 000 merchants accepting it (including big names like Microsoft, Dell, Expedia, Newegg, Overstock, etc), from zero to millions of users worldwide, from a market cap of zero to over $3 billion dollars, etc. If someone had predicted Bitcoin would reach these milestones within 6 years when the software was first released in 2009, you would have called that person a lunatic. Yet this happened. Reflect on this for a minute before saying you see nothing. Bitcoin is a good example of a disruptive technology. If it succeeds, it will happen slowly over time (5, 10, 20 years...) and there will be no special "that's-the-day-bitcoin-won" moment. So don't hold your breath for one. "the general population just has no use for it" It has many real-world practical benefits: http://www.coindesk.com/information/why-use-bitcoin/ http://www.coindesk.com/information/why-use-bitcoin/ I would be curious to hear your counter-argument for each of these points. For example a person in China can instantaneously send bitcoins to his relative living in the US, who can then spend them within minutes on electronics or house stuff on Newegg or Overstock. This is, in itself, incredible. This is fast, reliable, and avoids stupid limits or problems of legacy financial systems, like wire transfers taking days, China exerting capital controls, Paypal suddenly freezing your account because the large amount being transferred triggered a false fraud alert, etc. Another example: I can't even pay my $2700 monthly rent to my landlord electronically even though we both have checking accounts at the same bank (Wells Fargo), because they limit internet transfers to $2000 a month due to a policy chosen by their fraud and risk analysts. How annoying! Bitcoin lets me pay my landlord without problems because no one is here to tell me how much of my own money I am allowed to spend. I am not saying that I want to use Bitcoin for every single transaction, eg. paying my lunch at the restaurant, but for certain types of needs like the two examples above, Bitcoin is very useful.
- throwawayaway 11y ago
  I've seen you make numerous posts in support of bitcoin in the past that are far better than the article you have linked. In fact I find in the search for 'bitcoin plusses' people often put forward contradictory aspects of it, to support their agenda of presenting it in positive light. For example, full traceable, vs. anonymous. Deflationary vs. mine your own. Being a jack of all trades system, "money", money transfer, ledger based, anonymous, store of value and alternative banking system - means that it is internally conflicted. > For example a person in China can instantaneously send bitcoins Once they have bitcoins. Getting bitcoins without using local bitcoins requires use of the traditional financial system. It can also involve snake like middle men if the would be bitcoin user is not very savvy. 1. It's fast compared to international transfers, it's a little slow compared to using cash to buy things or bank transfers. 2. It's cheap - it's cheaper than western union, it's expensive when something goes wrong - you can't reverse/dispute transactions. 3. Central governments can’t take it away. Central governments have all the guns and can make up any laws provided they can be passed. Bitcoin is not a runaway success in Russia for example. 4. There are no chargebacks - this is a bug and a feature. 5. People can’t steal your payment information from merchants - they just go after the middle men - instead of TK Maxx getting hacked, one of the middle men will be. Or indeed the middle man runs away with the goods. That the middle men continue to exist points to inherent difficulties in managing your own wallet. 6. It isn’t inflationary - the number of bitcoins minted every year grows faster than inflation - ultimately it will stop. Then it will be deflationary because coins will be lost. 7. You don’t need to trust anyone else - au contraire - in every transaction you need trust, the same is true in bitcoin as any other system. 8. You own it - it works better as a transfer medium than a 'store of value' because the price fluctuates. In addition the network operators can decide to fork. 9. You can create your own money - sure, so can other people - yet somehow it's not inflationary.
ufo 11y ago
The other explanation is that people invested in bitcoin want you to jump in order to increase the price of bitcoins. Anyway, for me the biggest argument against bitcoin is that there is no way that its intentionally wasteful proof-of-work system can be actually cheaper and faster than the alternatives. Currently, this cost is hidden because blockchain maintenance is subsidized by newly-minted bitcoins being handed out to miners. If you take out this subsidy then each bitcoin transaction would actually cost around $10 worth of energy, which probably came from burning fossil fuels in China.

deet 11y ago

It's very difficult to dispute your assertions that Bitcoin currently provides very little utility outside niche markets, that a lot of the investments being made are laughable, and that the shifting goalposts phenomenon is in full effect. But remember, a lot of things we use the internet and mobile phones for today were envisioned and promised in the late 90s but failed to materialize in a practical, mainstream way until very recently, over a decade later. Who knows what cryptocurrencies, or the concepts behind them, will mean in another 5, 10, or 20 years. Maybe nothing, maybe a lot. It's still too early to tell. (I'm skeptical myself, especially in actual currency applications, but open minded.)

gogopuppygogo 11y ago

I like the following statement as a good way of explaining the slow adoption of BitCoin: Bitcoin is growing 25% faster than the internet in its early years. http://www.ibtimes.co.uk/bitcoin-growing-25-faster-internet-its-early-years-1512717 http://www.ibtimes.co.uk/bitcoin-growing-25-faster-internet-... http://insidebitcoins.com/news/investment-dollars-bitcoin-today-versus-the-internet-1995/26382 http://insidebitcoins.com/news/investment-dollars-bitcoin-to...

adventured 11y ago
1996 wasn't the Internet's early years. Raising more venture capital in non-inflation adjusted terms, is not the same as growing faster. Those are completely different concepts. Also, adjust that for almost 20 years of inflation, and it's half as much. Not to mention that figure only includes a portion of the total VC raised by Internet companies in 1996, it's intentionally misleading in just about every way possible. Even comparing the VC raised, in inflation adjusted terms, would be comically simplistic. What were interest rates in 1996? Beyond that, Bitcoin better grow drastically faster than the Web in 1996: bitcoin gets to ride on top of trillions in investment having already been made into infrastructure and computing. Even if it were true that it's only growing 25% faster than the Web in 1996, I'd say it's moving too slow by a factor of x200. Imagine the laugh we'd be having, if you were to say that the iPhone today was only 25% larger than the Palm Pilot after seven years on the market, despite all the market / infrastructure / Internet advantages that the iPhone gets to enjoy today.

Ologn 11y ago

> Of course, I'm probably just an idiot who doesn't "get" bitcoin Two more "idiots" who don't get Bitcoin are Warren Buffett and Charlie Munger. Munger says Bitcoins are "rat poison". It's possible they're just old fuddy duddies who "don't get it". It's also possible that, both being born during or before Herbert Hoover's presidency, that they've had decades of experience sniffing out what's valuable and what's not.

brianclements 11y ago
what's valuable today, perhaps. Blockchain tech might surprise us all yet. I don't think the possibilities are overblown, just the timeline. It really is a financial solution for a different world then what we currently live in, and only extreme global circumstances can even come close the momentum needed to spark a change such as that in our financial system.
m-i-l 11y ago
The article makes an analogy with the internet in 1994, which is when experienced technology "experts" such as Bill Gates were dismissing the internet as a "fad". In my experience, the people who don't "get" it often don't distinguish between Bitcoin itself and the underlying technologies. It would be like identifying the internet in 1994 with one particular web browser, or web site, or startup. The transformative elements in this case are things like the distributed ledger for decentralised trust, the possibilities for automated micropayments by devices rather than people, and so on. For example, as per my other comment on this thread, most of the large finance companies which are investigating blockchain technologies are investigating private blockchains rather than the Bitcoin blockchain, but this distinction is often missed by the press in their reporting (indeed isn't an entirely clear distinction in this article).

Meekro 11y ago

You're not an idiot -- the things you described are very real. I've heard about tons of scams and quite a few dead-end ventures. The 21inc thing sounds pretty bizarre to me as well, but there is more going on in the bitcoin world than just that. I'm involved with a VPS hosting company called ChunkHost, and we've accepted bitcoin for many years. We're not criminals, and we don't tolerate criminals on our network, and nonetheless bitcoin has served us well as a means of payment. We've written on our blog[1] about how bitcoin payments are 20-30% of our revenue. Another interesting company is purse.io -- they let you get something like a 20% discount on your Amazon purchases by paying in bitcoin. coffee.foldapp.com lets you get 20% off your Starbucks purchases by paying with bitcoin. Again, this is not a scam -- I use it and it works. Don't you think this is a real benefit that real people could appreciate? I'm curious how long you've been following bitcoin. I've been interested in it since 2009/2010, and have seen the goalposts move a great deal: every time a goal is reached, the critics change it so they can declare bitcoin a failure. First it was that "you can't buy anything for it," which was true until a pizza was sold for 10,000 bitcoins in mid-2010. Then it was "no store accepts it" -- which was true until a few months later when you could buy things like web hosting from tiny bitcoin-only companies. Then it became "no large company will ever accept it." That remained true for a while, but eventually Wordpress became the first large company to do so. Others like Newegg, Overstock, and even Microsoft followed soon after. "Nobody will ever pay with it" was another one, and that was shattered once those companies started posting bitcoin revenue which, despite being a tiny share of their overall revenue, showed that people were consistently spending their coins. I'm not saying that grandma will be buying gas with bitcoin anytime soon (or ever) -- just that there is substance there: merchants accepting it, consumers spending it, and interesting things like purse.io that couldn't exist without it. [1] https://chunkhost.com/blog/17%2Fbitcoin_revenue_in_2014 https://chunkhost.com/blog/17%2Fbitcoin_revenue_in_2014

TylerE 11y ago
There is tons of anecdotal evidence that Purse.io exists primarily as a way to monetize stolen credit cards.
- 2drew3 11y ago

csomar 11y ago

Relevant Comment: https://news.ycombinator.com/item?id=10139978 https://news.ycombinator.com/item?id=10139978 You are not an idiot. You are just underestimating how large the "fraud" economy is, at a global scale. Think SilkRoad, Ponzi Schemes and Capital fleeing overseas. Bitcoin can be huge in these industries and this can drive it to be huge overall and then it might become successful on the mainstream use.

mrb 11y ago

"all I ever see anywhere are big claims with very little substance" Bitcoin is certainly growing. Consider that in 6 years: it went from zero to over 100 000 merchants accepting it (including big names like Microsoft, Dell, Expedia, Newegg, Overstock, etc), from zero to millions of users worldwide, from a market cap of zero to over $3 billion dollars, etc. If someone had predicted Bitcoin would reach these milestones within 6 years when the software was first released in 2009, you would have called that person a lunatic. Yet this happened. Reflect on this for a minute before saying you see nothing. Bitcoin is a good example of a disruptive technology. If it succeeds, it will happen slowly over time (5, 10, 20 years...) and there will be no special "that's-the-day-bitcoin-won" moment. So don't hold your breath for one. "the general population just has no use for it" It has many real-world practical benefits: http://www.coindesk.com/information/why-use-bitcoin/ http://www.coindesk.com/information/why-use-bitcoin/ I would be curious to hear your counter-argument for each of these points. For example a person in China can instantaneously send bitcoins to his relative living in the US, who can then spend them within minutes on electronics or house stuff on Newegg or Overstock. This is, in itself, incredible. This is fast, reliable, and avoids stupid limits or problems of legacy financial systems, like wire transfers taking days, China exerting capital controls, Paypal suddenly freezing your account because the large amount being transferred triggered a false fraud alert, etc. Another example: I can't even pay my $2700 monthly rent to my landlord electronically even though we both have checking accounts at the same bank (Wells Fargo), because they limit internet transfers to $2000 a month due to a policy chosen by their fraud and risk analysts. How annoying! Bitcoin lets me pay my landlord without problems because no one is here to tell me how much of my own money I am allowed to spend. I am not saying that I want to use Bitcoin for every single transaction, eg. paying my lunch at the restaurant, but for certain types of needs like the two examples above, Bitcoin is very useful.

throwawayaway 11y ago
I've seen you make numerous posts in support of bitcoin in the past that are far better than the article you have linked. In fact I find in the search for 'bitcoin plusses' people often put forward contradictory aspects of it, to support their agenda of presenting it in positive light. For example, full traceable, vs. anonymous. Deflationary vs. mine your own. Being a jack of all trades system, "money", money transfer, ledger based, anonymous, store of value and alternative banking system - means that it is internally conflicted. > For example a person in China can instantaneously send bitcoins Once they have bitcoins. Getting bitcoins without using local bitcoins requires use of the traditional financial system. It can also involve snake like middle men if the would be bitcoin user is not very savvy. 1. It's fast compared to international transfers, it's a little slow compared to using cash to buy things or bank transfers. 2. It's cheap - it's cheaper than western union, it's expensive when something goes wrong - you can't reverse/dispute transactions. 3. Central governments can’t take it away. Central governments have all the guns and can make up any laws provided they can be passed. Bitcoin is not a runaway success in Russia for example. 4. There are no chargebacks - this is a bug and a feature. 5. People can’t steal your payment information from merchants - they just go after the middle men - instead of TK Maxx getting hacked, one of the middle men will be. Or indeed the middle man runs away with the goods. That the middle men continue to exist points to inherent difficulties in managing your own wallet. 6. It isn’t inflationary - the number of bitcoins minted every year grows faster than inflation - ultimately it will stop. Then it will be deflationary because coins will be lost. 7. You don’t need to trust anyone else - au contraire - in every transaction you need trust, the same is true in bitcoin as any other system. 8. You own it - it works better as a transfer medium than a 'store of value' because the price fluctuates. In addition the network operators can decide to fork. 9. You can create your own money - sure, so can other people - yet somehow it's not inflationary.

ufo 11y ago

The other explanation is that people invested in bitcoin want you to jump in order to increase the price of bitcoins. Anyway, for me the biggest argument against bitcoin is that there is no way that its intentionally wasteful proof-of-work system can be actually cheaper and faster than the alternatives. Currently, this cost is hidden because blockchain maintenance is subsidized by newly-minted bitcoins being handed out to miners. If you take out this subsidy then each bitcoin transaction would actually cost around $10 worth of energy, which probably came from burning fossil fuels in China.