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The financial world is absolutely ripe for an overthrow... People don't seem to want to think or talk about that though.. Means embracing a certain cryptocurren

The financial world is absolutely ripe for an overthrow... People don't seem to want to think or talk about that though.. Means embracing a certain cryptocurrency that everyone wants to hate. Cognitive dissonance casts a strange aura over the future that many don't enjoy confronting. The ones who have overcome it are always just sitting and waiting for everyone else to catch on.. (think social media). Takes a while of digesting and overcoming misunderstandings.

kordless 10y ago
Dissonance and causality are related. Not sure how yet, but they are.
grey-area 10y ago
Bitcoin is fundamentally flawed, not in its technology, but because it solves the wrong problems - most consumers want verified identity, reversible transactions, accountability, a centralised source of truth, central insurance, and real-time transactions. They don't want a federated pseudo-anonymous crypto-currency, just anonymous enough for theft without consequences, which requires them to hoard tokens on their home computer or a trusted server with extraordinary security measures as if they were gold coins and then pay a variable fee and wait a variable length of time (10 minutes!) to actually verify a transaction. I suppose gold bugs might be happy with it as a replacement for gold or stacks of cash under the mattress but as a currency it has glaring shortcomings. I don't think many people hate bitcoin, they just find the hype for it and its blockchain overblown and myopic. It's an interesting experiment, but it's unlikely to replace the currencies we have, I suspect that will happen at the transaction layer, not the currency layer (the underlying currency to a transaction is in many ways uninteresting). The financial industry may well be ripe for disruption (indeed some startups in the UK have started), but the founding tenets of bitcoin are such that it is not a suitable replacement.
- mahyarm 10y ago
  Bitcoin or some derivative is better as a foundational bank reserve currency or wire transfer replacement than the actual direct thing you use. Someone else will build the next equivalent of visa on top of it.
  - te_chris 10y ago
    The banks already are working on blockchain based interchange, at least from what I hear in the UK
  - grey-area 10y ago
    Someone else will build the next equivalent of visa on top of it. For the reasons given above I find that highly unlikely. Proof of work and distributed consensus are at odds with the requirements of a global real-time processing network.
    - deleted 10y ago
      [deleted]
  - daemin 10y ago
    I don't like the fact that bitcoin basically relies trading electricity for money in a nonsensical way. Having large exchanges built on it seems like a terrible idea, where financial places will be required to gobble up immense amounts of energy just to operate. It just won't make financial sense to do this as I can see it now.
    - CyberDildonics 10y ago
      Mining resources are not correlated to scaleability. Once again, whatever people's views on bitcoin at least realize that mining hashes don't dictate how many transactions can be processed by a miner. They mine a block, then they include as many transactions as they think they can get away with and keep the latency low enough to propagate. Right now they are capped by a block size limit which is the real next hurdle. Some people think there should be no block size limit - latency already becomes a limit in itself. To hammer it home - someone using bitcoin does not need to use any more electricity than a computer and internet connection. The miners use the electricity and the amount of transactions they process is not directly linked in any way.
    - stale2002 10y ago
      The amount of money spent on electricity is a rounding error on top of a rounding error, when compared to how much wealth/money the current financial system uses to make it run.
- 666_howitzer 10y ago
  Bitcoin supports reversible transaction, if you don't trust the vendor, it's not that hard to use a trusted escrow service. I agree bitcoin does have its flaws, economically bitcoin behaves like a commodity, which might hinder consumer adoption. There are ways to get around that, you could potentially issue a anonymous currency of sorts backed by bitcoin, with a fixed exchange change rate. So, the prices could remain relatively stable. May be that could drive consumer adoption. TBH, I don't know what bitcoin is going to look like in the next 10 years. It's like the internet all over again. Just like the internet, bitcoin value doesn't necessarily come from the underlying utility as a transaction platform or in case of the internet TCP/IP, but from its distributed , permissionless and decentralized nature of governance. We know for a fact, that's what drives innovation.
  - hueving 10y ago
    >permissionless and decentralized nature of governance. I was under the impression that more than 50% of the mining power is controlled by a very small set of Chinese miners. Could they not wreak major havoc by deciding to tweak the protocol themselves or not adopt certain features? Similarly, what happens if the few bitcoin core developers decided to do something nefarious with the client. Surely they would be caught right away, but then how would the community decide on what software/protocol to use?
    - CyberDildonics 10y ago
      I think the reason it is working and has worked so far is aligned incentives - doing something nefarious or selfish will ultimately work against you as people abandon and avoid you. There is no doubt though that cryptocurrencies are potentially fragile. I do think though that pandora's box has been opened. Maybe bitcoin will stand the test of time like jpeg, C, C++, http, TCP/UDP/IP, zip, bittorrent, fortran, x86, SMTP, unix, RTSP, vi, javascript, etc that have been good enough and persisted with a huge network effect. Or it could end up being a jumping off point for something that smooths out the rough edges needed for mass adoption.
- douche 10y ago
  10 minutes seems like the blink of an eye next to how long it takes money to show up in my bank accounts from ACH or wire transactions. Usually it's at least two days, sometimes three or four - apparently computers take bank holidays too...
  - ropiku 10y ago
    But that's only the US. UK/EU has shown that you can have instant free bank transfers.
    - majewsky 10y ago
      Hue? I'm in Germany, and SEPA transfers usually show up in the recipient's account on the next business day.
      - plafl 10y ago
        Same in Spain
      - foldr 10y ago
        Transfers are instant in the UK now, and have been for a few years.
  - grey-area 10y ago
    Faster payments transfers take seconds, and debit/credit cards usually under 1 second. Those are the competing technologies.
akg_67 10y ago
> The financial world is absolutely ripe for an overthrow... The implosion currently going on in fintech indicates otherwise: Lending (Square, Lending Club, OnDeck) and Investment (Robo Advisors) both are unraveling. A currency backed by no one is unlikely to earn the trust of many.
- cableshaft 10y ago
  What's the internet backed by? You could argue ICANN but that's not absolutely necessary to have an internet, and in fact other countries want their own version of that. You could argue "the infrastructure of a bunch of ISP companies", but then you can argue that about Bitcoin as well. The infrastructure of a bunch of (eventually) more trusted companies built around the currency (like Coinbase, etc), and the computing power of the miners propogating the blockchain, plus the entire ledger being public and independently verifiable, could earn the trust of many (it might not, but it could). There are obstacles getting in the way of that, though, including it being such a new and different concept that most people can't wrap their heads around it.
- bogomipz 10y ago
  I dont agree, its backed by everyone that participates. This is just FUD that is propagated by those with vested interests for preserving the status quo. A currency policy that is constantly being manipulated and a money supply that is constantly tinkered with(quantitative easing?) is unlikely to keep the trust of many when there are alternatives.
  - smaddox 10y ago
    Any currency that has a supply decoupled from the macroeconomy is doomed to failure as a currency, either through deflation or inflation. Deflation results in hording, at which point there is insufficient exchange and another currency replaces it. Inflation results in divestiture, at which point another currency replaces it. Maintaining a currency requires threading a needle. Only strong governments have ever been successful at it. Perhaps there is a technological solution, but it's not bitcoin or any of its brethren, because their growth rate is decoupled from the economy.
jsemrau 10y ago
> The financial world is absolutely ripe for an overthrow... No it is not. Regulation in Financial Services exists for a very good reason. To protect you the customer against the various kinds of risks. When you run a company and borrow a significant amount of money from a lender you do not want that this lender changes terms half-way through because they are in trouble re-financing their portfolio. The same applies to due-diligence in credit underwriting. Social scoring was hailed as the future of credit origination but it does not work at all (yet). No social characteristic is correlating at to defaults. What if you deposit your life savings or life insurance with a fintech startup and they do not survive (for whatever reason). Then what? There are a lot of businesses out there relying on a stable financial systems. Fintech companies will work with established players to bring faster technical implementations and MVP's for banks to implement. After they have done their technical due diligence. Beyond that I am more than doubtful.
- linker3000 10y ago
  You argument is based on 'finance' continuing to exist and trying to regulate it into some notional form of sanity. Can you wrap your head around getting rid of the system completely? 'Money' is an artificial numerical system of tokenised management that fundamentally limits our progression as a race. We can't repair roads, fund disease treatment, build structures to house our sick or educate our children, distribute food to the needy because the 'numbers' don't let us. The concept of finance is thrust upon us from birth and we're all but incapable of seeing what a stupid system it really is.
  - petewailes 10y ago
    Fundamental misunderstanding of what money is. It's an abstracted version of time and labour, allowing for transmission of from one person to another. Example. I work x hours and get paid y tokens. y tokens thus equals x hours of my work. I now go and buy a cutlery set. That was produced by n people over m hours, and is sold with p profit. My y tokens is equal to n * m + p, which is equal to x * y. Money exists to make the n * m + p = x * y things workable. It's an abstracted barter system, where rather than having to work in Sony's programming department to earn a new TV, I can write code for other people, get paid something, and then pay it to Sony, who can equate it to the cost of a TV. The doing all the things you talked about in the second paragraph is a management and distribution of labour issue, which is down to society and governance. There's many nations that manage those things fine, and have financial systems. The issue is with a society that isn't able to provide those things, because the values held and the outcomes desired are fundamentally opposed. If you want to fix something, get involved in local politics and make a difference.
gaius 10y ago
Outsiders radically underestimate the complexity of what banks actually do. A fintech firm that isn't 90% ex-bankers is extremely unlikely to succeed.
- collyw 10y ago
  The reason its complex is because if it was simpler the masses would see how much its ripping them off.
  - gaius 10y ago
    Ironically one of tne reasons is regulatory compliance and reporting...
forgetsusername 10y ago
>The ones who have overcome it are always just sitting and waiting for everyone else to catch on.. Yep, that's the problem with BitCoin alright: a bunch of people sitting on coins because they got in "early", thinking everyone is going to climb aboard and make them rich. Probably not gonna happen.

kordless 10y ago

Dissonance and causality are related. Not sure how yet, but they are.

grey-area 10y ago

Bitcoin is fundamentally flawed, not in its technology, but because it solves the wrong problems - most consumers want verified identity, reversible transactions, accountability, a centralised source of truth, central insurance, and real-time transactions. They don't want a federated pseudo-anonymous crypto-currency, just anonymous enough for theft without consequences, which requires them to hoard tokens on their home computer or a trusted server with extraordinary security measures as if they were gold coins and then pay a variable fee and wait a variable length of time (10 minutes!) to actually verify a transaction. I suppose gold bugs might be happy with it as a replacement for gold or stacks of cash under the mattress but as a currency it has glaring shortcomings. I don't think many people hate bitcoin, they just find the hype for it and its blockchain overblown and myopic. It's an interesting experiment, but it's unlikely to replace the currencies we have, I suspect that will happen at the transaction layer, not the currency layer (the underlying currency to a transaction is in many ways uninteresting). The financial industry may well be ripe for disruption (indeed some startups in the UK have started), but the founding tenets of bitcoin are such that it is not a suitable replacement.

mahyarm 10y ago
Bitcoin or some derivative is better as a foundational bank reserve currency or wire transfer replacement than the actual direct thing you use. Someone else will build the next equivalent of visa on top of it.
- te_chris 10y ago
  The banks already are working on blockchain based interchange, at least from what I hear in the UK
- grey-area 10y ago
  Someone else will build the next equivalent of visa on top of it. For the reasons given above I find that highly unlikely. Proof of work and distributed consensus are at odds with the requirements of a global real-time processing network.
  - deleted 10y ago
    [deleted]
- daemin 10y ago
  I don't like the fact that bitcoin basically relies trading electricity for money in a nonsensical way. Having large exchanges built on it seems like a terrible idea, where financial places will be required to gobble up immense amounts of energy just to operate. It just won't make financial sense to do this as I can see it now.
  - CyberDildonics 10y ago
    Mining resources are not correlated to scaleability. Once again, whatever people's views on bitcoin at least realize that mining hashes don't dictate how many transactions can be processed by a miner. They mine a block, then they include as many transactions as they think they can get away with and keep the latency low enough to propagate. Right now they are capped by a block size limit which is the real next hurdle. Some people think there should be no block size limit - latency already becomes a limit in itself. To hammer it home - someone using bitcoin does not need to use any more electricity than a computer and internet connection. The miners use the electricity and the amount of transactions they process is not directly linked in any way.
  - stale2002 10y ago
    The amount of money spent on electricity is a rounding error on top of a rounding error, when compared to how much wealth/money the current financial system uses to make it run.
666_howitzer 10y ago
Bitcoin supports reversible transaction, if you don't trust the vendor, it's not that hard to use a trusted escrow service. I agree bitcoin does have its flaws, economically bitcoin behaves like a commodity, which might hinder consumer adoption. There are ways to get around that, you could potentially issue a anonymous currency of sorts backed by bitcoin, with a fixed exchange change rate. So, the prices could remain relatively stable. May be that could drive consumer adoption. TBH, I don't know what bitcoin is going to look like in the next 10 years. It's like the internet all over again. Just like the internet, bitcoin value doesn't necessarily come from the underlying utility as a transaction platform or in case of the internet TCP/IP, but from its distributed , permissionless and decentralized nature of governance. We know for a fact, that's what drives innovation.
- hueving 10y ago
  >permissionless and decentralized nature of governance. I was under the impression that more than 50% of the mining power is controlled by a very small set of Chinese miners. Could they not wreak major havoc by deciding to tweak the protocol themselves or not adopt certain features? Similarly, what happens if the few bitcoin core developers decided to do something nefarious with the client. Surely they would be caught right away, but then how would the community decide on what software/protocol to use?
  - CyberDildonics 10y ago
    I think the reason it is working and has worked so far is aligned incentives - doing something nefarious or selfish will ultimately work against you as people abandon and avoid you. There is no doubt though that cryptocurrencies are potentially fragile. I do think though that pandora's box has been opened. Maybe bitcoin will stand the test of time like jpeg, C, C++, http, TCP/UDP/IP, zip, bittorrent, fortran, x86, SMTP, unix, RTSP, vi, javascript, etc that have been good enough and persisted with a huge network effect. Or it could end up being a jumping off point for something that smooths out the rough edges needed for mass adoption.
douche 10y ago
10 minutes seems like the blink of an eye next to how long it takes money to show up in my bank accounts from ACH or wire transactions. Usually it's at least two days, sometimes three or four - apparently computers take bank holidays too...
- ropiku 10y ago
  But that's only the US. UK/EU has shown that you can have instant free bank transfers.
  - majewsky 10y ago
    Hue? I'm in Germany, and SEPA transfers usually show up in the recipient's account on the next business day.
    - plafl 10y ago
      Same in Spain
    - foldr 10y ago
      Transfers are instant in the UK now, and have been for a few years.
- grey-area 10y ago
  Faster payments transfers take seconds, and debit/credit cards usually under 1 second. Those are the competing technologies.

akg_67 10y ago

> The financial world is absolutely ripe for an overthrow... The implosion currently going on in fintech indicates otherwise: Lending (Square, Lending Club, OnDeck) and Investment (Robo Advisors) both are unraveling. A currency backed by no one is unlikely to earn the trust of many.

cableshaft 10y ago
What's the internet backed by? You could argue ICANN but that's not absolutely necessary to have an internet, and in fact other countries want their own version of that. You could argue "the infrastructure of a bunch of ISP companies", but then you can argue that about Bitcoin as well. The infrastructure of a bunch of (eventually) more trusted companies built around the currency (like Coinbase, etc), and the computing power of the miners propogating the blockchain, plus the entire ledger being public and independently verifiable, could earn the trust of many (it might not, but it could). There are obstacles getting in the way of that, though, including it being such a new and different concept that most people can't wrap their heads around it.
bogomipz 10y ago
I dont agree, its backed by everyone that participates. This is just FUD that is propagated by those with vested interests for preserving the status quo. A currency policy that is constantly being manipulated and a money supply that is constantly tinkered with(quantitative easing?) is unlikely to keep the trust of many when there are alternatives.
- smaddox 10y ago
  Any currency that has a supply decoupled from the macroeconomy is doomed to failure as a currency, either through deflation or inflation. Deflation results in hording, at which point there is insufficient exchange and another currency replaces it. Inflation results in divestiture, at which point another currency replaces it. Maintaining a currency requires threading a needle. Only strong governments have ever been successful at it. Perhaps there is a technological solution, but it's not bitcoin or any of its brethren, because their growth rate is decoupled from the economy.

jsemrau 10y ago

> The financial world is absolutely ripe for an overthrow... No it is not. Regulation in Financial Services exists for a very good reason. To protect you the customer against the various kinds of risks. When you run a company and borrow a significant amount of money from a lender you do not want that this lender changes terms half-way through because they are in trouble re-financing their portfolio. The same applies to due-diligence in credit underwriting. Social scoring was hailed as the future of credit origination but it does not work at all (yet). No social characteristic is correlating at to defaults. What if you deposit your life savings or life insurance with a fintech startup and they do not survive (for whatever reason). Then what? There are a lot of businesses out there relying on a stable financial systems. Fintech companies will work with established players to bring faster technical implementations and MVP's for banks to implement. After they have done their technical due diligence. Beyond that I am more than doubtful.

linker3000 10y ago
You argument is based on 'finance' continuing to exist and trying to regulate it into some notional form of sanity. Can you wrap your head around getting rid of the system completely? 'Money' is an artificial numerical system of tokenised management that fundamentally limits our progression as a race. We can't repair roads, fund disease treatment, build structures to house our sick or educate our children, distribute food to the needy because the 'numbers' don't let us. The concept of finance is thrust upon us from birth and we're all but incapable of seeing what a stupid system it really is.
- petewailes 10y ago
  Fundamental misunderstanding of what money is. It's an abstracted version of time and labour, allowing for transmission of from one person to another. Example. I work x hours and get paid y tokens. y tokens thus equals x hours of my work. I now go and buy a cutlery set. That was produced by n people over m hours, and is sold with p profit. My y tokens is equal to n * m + p, which is equal to x * y. Money exists to make the n * m + p = x * y things workable. It's an abstracted barter system, where rather than having to work in Sony's programming department to earn a new TV, I can write code for other people, get paid something, and then pay it to Sony, who can equate it to the cost of a TV. The doing all the things you talked about in the second paragraph is a management and distribution of labour issue, which is down to society and governance. There's many nations that manage those things fine, and have financial systems. The issue is with a society that isn't able to provide those things, because the values held and the outcomes desired are fundamentally opposed. If you want to fix something, get involved in local politics and make a difference.

gaius 10y ago

Outsiders radically underestimate the complexity of what banks actually do. A fintech firm that isn't 90% ex-bankers is extremely unlikely to succeed.

collyw 10y ago
The reason its complex is because if it was simpler the masses would see how much its ripping them off.
- gaius 10y ago
  Ironically one of tne reasons is regulatory compliance and reporting...

forgetsusername 10y ago

>The ones who have overcome it are always just sitting and waiting for everyone else to catch on.. Yep, that's the problem with BitCoin alright: a bunch of people sitting on coins because they got in "early", thinking everyone is going to climb aboard and make them rich. Probably not gonna happen.