6 ms·

The blockchain represents trust-less global concensus, the first time such a thing has occurred in history. From remittances to microtransactions to voting ther

by Aqueous 11y ago

The blockchain represents trust-less global concensus, the first time such a thing has occurred in history. From remittances to microtransactions to voting there are very few economic and political problems that the blockchain can say nothing about. The current market capitalization of BitCoin is $3.7 billion. Did all that money just appear out of thin air because blockchains are worth nothing and solve no problems?

zakk 11y ago
The market capitalization of Bitcoin has NOTHING to do with the value of its technical solutions. A low tech solution like the good old check (ink on a piece of paper) can be worth more than all Bitcoins.
- Aqueous 11y ago
  Really? Nothing? If the technical solutions were worth nothing wouldn't the value tend towards zero? Surely sustaining a market cap in the billions says something about the economic value it represents.
  - zakk 11y ago
    > If the technical solutions were worth nothing wouldn't the value tend towards zero? Nonsense. The value of Bitcoins is not the value of the algorithms behind it. People agree to trade Bitcoin for that amount of money and that's it. Market laws. Just like the value of cash is not determined by the technical solution behind it (essentially colored inks on a piece of paper).
    - deleted 11y ago
      [deleted]
    - Aqueous 11y ago
      So all market valuations exist in a vacuum, and say absolutely nothing about how much something is actually worth? And how do you think this economic theory applies to the stock market or commodities markets? Are shares in companies and commodities inherently worth nothing but the price people agree to pay for them? Don't they say something about their collective belief in that asset's future? Market valuations can become decoupled from intrinsic value, but that doesn't mean the intrinsic value is zero. In the long term if something really repesents zero value its market valuation will approach that.
      - debacle 11y ago
        Bitcoin is a cryptocurrency. Bitcoin is also a technology. You're conflating the two. You could have a cryptocurrency without a block chain and you can have a block chain that has nothing to do with cryptocurrency.
        Aqueous 11y ago
        They are very much linked to one another. If BitCoin didn't offer anything novel over and above other media of exchange, like fiat currency, its value would approach zero. Its differentiating quality is the blockchain and peer-to-peer distributed concensus. You could have a cryptocurrency without a block chain Perhaps, but then you'd need to solve the problem of trust-less peer-to-peer Byzantine concensus a different away, using a different mechanism. And that's exactly why the blockchain is novel.
      - fleitz 11y ago
        Yes. What something is worth depends entirely on its context and available substitutes (aka. supply/demand), for example a generator isn't worth that much under normal conditions as people have the grid as a substitute. After a hurricane or something else that removes the grid as a substitute the generator is worth substantially more. Ask yourself how much you think a lion would pay for your gold ring, house, or anything else you think has intrinsic value. The nature of trade incentivizes individuals to find resources that are less valued by one person and more valued by another. For example starbucks finds coffee beans from farmers who don't find them terribly valuable, and sells them back to consumers who find them much more valuable, especially in conjunction with their value adds. Coffee beans are worth different amounts to different people, only when we make a transaction do we start to discover price.
    - aethertap 11y ago
      > Just like the value of cash is not determined by the technical solution behind it (essentially colored inks on a piece of paper). The value of paper money is actually pretty intimately entangled with the quality of its anti-counterfeiting technology. If anybody could just print viable currency on their home printers, cash would be useless.
      - joosters 11y ago
        The counterfeit rate of UK pound coins is 2.5%, yet you can easily exchange ten of them for a £10 note. If what you state was true, people would not be willing to give as much as £1 per coin. http://www.royalmint.com/discover/uk-coins/counterfeit-one-pound-coins http://www.royalmint.com/discover/uk-coins/counterfeit-one-p...
        aethertap 11y ago
        That's very interesting and surprising (I would have guessed much less than 2.5%), but I don't see how it refutes my point that any currency's value is related to how easily it can be counterfeited. There's probably a threshold or two involved, where the convenience of having simple exchange rates between forms of the same currency compensates for losses to counterfeiting as long as the counterfeit rate is low enough. I don't think you're actually arguing that I could build a currency that scales beyond a tribal scope out of something that's trivial to copy, but that's the point I'm trying to make. If it's too easy to cheat, people will stop trusting the currency and will use something else; therefore the technology behind the currency does affect its value.
        joosters 11y ago
        Yeah, I do get your point, I think though that the value of currency is more to do with trusting the backers/issuers of the money, rather than any direct relation to counterfeiting. If counterfeiting becomes too rife, then that will start to damage the trust of the money issuers. The relationship is complicated though. The UK £1 counterfeit rate is almost unbelievably high, but the key point is that individuals aren't really affected by it. The coins are all 'good enough' that you are unlikely to ever have any rejected by a shop, so the end result is no-one cares about it. (Incidentally, it's actually harmful to check your own cash for counterfeits, since spending counterfeit money is a crime, but ignorance is an accepted defence.) (I don't know where the buck stops. Do banks check for counterfeit coins and reject them from shop's cash deposits? I'm absolutely not trying to say that counterfeiting coins is a victimless crime, just wondering whether everyone shares the cost or whether it eventually catches up with one unlucky party)
    - dmihal 11y ago
      > People agree to trade Bitcoin for that amount of money and that's it. Yes, however Bitcoin is still not used very much for traditional goods-and-services trade. Many people are buying Bitcoin as an investment in the ecosystem. They see the value in Bitcoin technology, and believe that it is promising enough to increase in value.
  - deleted 11y ago
    [deleted]
  - joosters 11y ago
    There are countless altcoins with the same or more advanced technology than Bitcoin, and they have tiny marketcaps. So the marketcap is provably unrelated to the technology.
    - deleted 11y ago
      [deleted]
seiji 11y ago
BitCoin is $3.7 billion. That's about 1/14th of an Uber. It's literally nothing on a global scale. The value of all "bitcoin companies" is larger than the value of all bitcoins themselves. there are very few economic and political problems that the blockchain can say nothing about. That's just crazy talk.
- Aqueous 11y ago
  Yes, $3.7 billion is less than some things are worth, but it is more than most things are worth. The valuation of Uber means people believe Uber has future growth potential. Similarly, the high valuation of BitCoin companies means people believe BitCoin has future growth potential. Rightly or wrongly, I guess the future will tell in both cases. Obviously I think rightly. That's just crazy talk. Ok.
debacle 11y ago
I didn't say block chains are worth nothing. Just because something solves one problem does not mean it solves all problems.
- CyberDildonics 11y ago
  But when something is a decentralized immutable ledger and global consensus, it tends to solve problems of decentralized immutable ledgers and global consensus.
  - jtuente 11y ago
    >decentralized immutable ledger and global consensus These aren't problems, they're potential solutions to problems. Bitcoin and Blockchains are solutions to specific problems in currency and trust.
    - CyberDildonics 11y ago
      They are the structure of of decentralized systems. A comment system can be seen as (and is possibly already implemented as) an immutable ledger of transactions - adding comments, voting, edits etc. So decentralizing those things that can be represented at their core as a ledger of transactions is very much a problem which blockchains solve.
ssharp 11y ago
Bitcoin is horrible for microtransactions. I don't know if there's another blockchain besides Bitcoin's that's better for microtransacations, but Bitcoin ain't it. The transaction bandwidth for Bitcoin is laughably small, the ability for bandwidth to be added is limited (see how long current block size debate has gone on), and transaction fees required to get placed into a block add substantial fixed fees that represent a large % fee for micro transactions. If a Bitcoin microtransaction service ever hit it big, it would immediately cripple the entire network.
this_user 11y ago
> The current market capitalization of BitCoin is $3.7 billion. By definition only publicly traded companies have a market capitalization. BitCoin is not a publicly traded company and therefore does not have one.

by Aqueous 11y ago

zakk 11y ago

The market capitalization of Bitcoin has NOTHING to do with the value of its technical solutions. A low tech solution like the good old check (ink on a piece of paper) can be worth more than all Bitcoins.

Aqueous 11y ago
Really? Nothing? If the technical solutions were worth nothing wouldn't the value tend towards zero? Surely sustaining a market cap in the billions says something about the economic value it represents.
- zakk 11y ago
  > If the technical solutions were worth nothing wouldn't the value tend towards zero? Nonsense. The value of Bitcoins is not the value of the algorithms behind it. People agree to trade Bitcoin for that amount of money and that's it. Market laws. Just like the value of cash is not determined by the technical solution behind it (essentially colored inks on a piece of paper).
  - deleted 11y ago
    [deleted]
  - Aqueous 11y ago
    So all market valuations exist in a vacuum, and say absolutely nothing about how much something is actually worth? And how do you think this economic theory applies to the stock market or commodities markets? Are shares in companies and commodities inherently worth nothing but the price people agree to pay for them? Don't they say something about their collective belief in that asset's future? Market valuations can become decoupled from intrinsic value, but that doesn't mean the intrinsic value is zero. In the long term if something really repesents zero value its market valuation will approach that.
    - debacle 11y ago
      Bitcoin is a cryptocurrency. Bitcoin is also a technology. You're conflating the two. You could have a cryptocurrency without a block chain and you can have a block chain that has nothing to do with cryptocurrency.
      - Aqueous 11y ago
        They are very much linked to one another. If BitCoin didn't offer anything novel over and above other media of exchange, like fiat currency, its value would approach zero. Its differentiating quality is the blockchain and peer-to-peer distributed concensus. You could have a cryptocurrency without a block chain Perhaps, but then you'd need to solve the problem of trust-less peer-to-peer Byzantine concensus a different away, using a different mechanism. And that's exactly why the blockchain is novel.
    - fleitz 11y ago
      Yes. What something is worth depends entirely on its context and available substitutes (aka. supply/demand), for example a generator isn't worth that much under normal conditions as people have the grid as a substitute. After a hurricane or something else that removes the grid as a substitute the generator is worth substantially more. Ask yourself how much you think a lion would pay for your gold ring, house, or anything else you think has intrinsic value. The nature of trade incentivizes individuals to find resources that are less valued by one person and more valued by another. For example starbucks finds coffee beans from farmers who don't find them terribly valuable, and sells them back to consumers who find them much more valuable, especially in conjunction with their value adds. Coffee beans are worth different amounts to different people, only when we make a transaction do we start to discover price.
  - aethertap 11y ago
    > Just like the value of cash is not determined by the technical solution behind it (essentially colored inks on a piece of paper). The value of paper money is actually pretty intimately entangled with the quality of its anti-counterfeiting technology. If anybody could just print viable currency on their home printers, cash would be useless.
    - joosters 11y ago
      The counterfeit rate of UK pound coins is 2.5%, yet you can easily exchange ten of them for a £10 note. If what you state was true, people would not be willing to give as much as £1 per coin. http://www.royalmint.com/discover/uk-coins/counterfeit-one-pound-coins http://www.royalmint.com/discover/uk-coins/counterfeit-one-p...
      - aethertap 11y ago
        That's very interesting and surprising (I would have guessed much less than 2.5%), but I don't see how it refutes my point that any currency's value is related to how easily it can be counterfeited. There's probably a threshold or two involved, where the convenience of having simple exchange rates between forms of the same currency compensates for losses to counterfeiting as long as the counterfeit rate is low enough. I don't think you're actually arguing that I could build a currency that scales beyond a tribal scope out of something that's trivial to copy, but that's the point I'm trying to make. If it's too easy to cheat, people will stop trusting the currency and will use something else; therefore the technology behind the currency does affect its value.
        joosters 11y ago
        Yeah, I do get your point, I think though that the value of currency is more to do with trusting the backers/issuers of the money, rather than any direct relation to counterfeiting. If counterfeiting becomes too rife, then that will start to damage the trust of the money issuers. The relationship is complicated though. The UK £1 counterfeit rate is almost unbelievably high, but the key point is that individuals aren't really affected by it. The coins are all 'good enough' that you are unlikely to ever have any rejected by a shop, so the end result is no-one cares about it. (Incidentally, it's actually harmful to check your own cash for counterfeits, since spending counterfeit money is a crime, but ignorance is an accepted defence.) (I don't know where the buck stops. Do banks check for counterfeit coins and reject them from shop's cash deposits? I'm absolutely not trying to say that counterfeiting coins is a victimless crime, just wondering whether everyone shares the cost or whether it eventually catches up with one unlucky party)
  - dmihal 11y ago
    > People agree to trade Bitcoin for that amount of money and that's it. Yes, however Bitcoin is still not used very much for traditional goods-and-services trade. Many people are buying Bitcoin as an investment in the ecosystem. They see the value in Bitcoin technology, and believe that it is promising enough to increase in value.
- deleted 11y ago
  [deleted]
- joosters 11y ago
  There are countless altcoins with the same or more advanced technology than Bitcoin, and they have tiny marketcaps. So the marketcap is provably unrelated to the technology.
  - deleted 11y ago
    [deleted]

seiji 11y ago

BitCoin is $3.7 billion. That's about 1/14th of an Uber. It's literally nothing on a global scale. The value of all "bitcoin companies" is larger than the value of all bitcoins themselves. there are very few economic and political problems that the blockchain can say nothing about. That's just crazy talk.

Aqueous 11y ago
Yes, $3.7 billion is less than some things are worth, but it is more than most things are worth. The valuation of Uber means people believe Uber has future growth potential. Similarly, the high valuation of BitCoin companies means people believe BitCoin has future growth potential. Rightly or wrongly, I guess the future will tell in both cases. Obviously I think rightly. That's just crazy talk. Ok.

debacle 11y ago

I didn't say block chains are worth nothing. Just because something solves one problem does not mean it solves all problems.

CyberDildonics 11y ago
But when something is a decentralized immutable ledger and global consensus, it tends to solve problems of decentralized immutable ledgers and global consensus.
- jtuente 11y ago
  >decentralized immutable ledger and global consensus These aren't problems, they're potential solutions to problems. Bitcoin and Blockchains are solutions to specific problems in currency and trust.
  - CyberDildonics 11y ago
    They are the structure of of decentralized systems. A comment system can be seen as (and is possibly already implemented as) an immutable ledger of transactions - adding comments, voting, edits etc. So decentralizing those things that can be represented at their core as a ledger of transactions is very much a problem which blockchains solve.

ssharp 11y ago

Bitcoin is horrible for microtransactions. I don't know if there's another blockchain besides Bitcoin's that's better for microtransacations, but Bitcoin ain't it. The transaction bandwidth for Bitcoin is laughably small, the ability for bandwidth to be added is limited (see how long current block size debate has gone on), and transaction fees required to get placed into a block add substantial fixed fees that represent a large % fee for micro transactions. If a Bitcoin microtransaction service ever hit it big, it would immediately cripple the entire network.

this_user 11y ago

> The current market capitalization of BitCoin is $3.7 billion. By definition only publicly traded companies have a market capitalization. BitCoin is not a publicly traded company and therefore does not have one.