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In my view bitcoin's challenges are a bit deeper than just the implementation. What these challenges are, depends a bit what you think bitcoin is: -as an inves

In my view bitcoin's challenges are a bit deeper than just the implementation. What these challenges are, depends a bit what you think bitcoin is: -as an investment, bitcoin is fundamentally a ponzi scheme. someone may argue that it is a challenge only if you are too late in the game, but for me, that is a reason I am not touching it as an investment. -as a money (store of value and measure of value), there is a fundamental issue that there exists no mechanism whatsoever that would stabilize it's value (against neither a typical consumption basket, nor USD or any other currency) -as a currency (means to make transactions). You might argue that it is only about implementation that the network can handle a couple of transactions a second. But a widely used currency should handle _lot_ more than that. Assuming one billion transactions a day means roughly one transaction per person per ten days globally. Every single byte you need to store a transaction implies a gigabyte of data per day into the however implemented network. I would call that a challenge beyond just implementation.

gnaritas 10y ago
> -as an investment, bitcoin is fundamentally a ponzi scheme. I don't believe you know what a ponzi scheme is if you think this because it's not remotely true. From google: a form of fraud in which belief in the success of a nonexistent enterprise is fostered by the payment of quick returns to the first investors from money invested by later investors. There is no fraud in bitcoin, no phony investment with lying and paying out returns from later investor money. Absent fraud and a nonexistent fake "investment", something isn't a ponzi scheme. Early investors making money from the rise in value of something does not make something a ponzi scheme, that's how all investments work. There is nothing fraudulent about bitcoin and thus it is not remotely a ponzi scheme. > s a money (store of value and measure of value), there is a fundamental issue that there exists no mechanism whatsoever that would stabilize it's value (against neither a typical consumption basket, nor USD or any other currency) Absolutely true, but by design, they don't want a stable value, they want a fixed amount of currency and want value to fluctuate via supply and demand. Bitcoin is inherently anti-keynesian by design. This is why it'll never be more than a commodity.
- TylerE 10y ago
  > There is no fraud in bitcoin, no phony investment with lying and paying out returns from later investor money. Say what? There are so many ponzi schemes in Bitcoin many of them actually advertise that they are ponzi schemes.
  - gnaritas 10y ago
    > There are so many ponzi schemes in Bitcoin many of them actually advertise that they are ponzi schemes. I think you misinterpreted what I'm saying. Of course people run schemes using bitcoin just as they run schemes using USD; when I said "no fraud in bitcoin", I mean in bitcoin itself, the blockchain, the protocol, the currency. Bitcoin is a currency, and like any currency, fraudsters can and will use it, that doesn't make bitcoin fraudulent.
- beefield 10y ago
  Maybe I should have used "essentially" instead of "fundamentally". What I meant was that the only way your investment in bitcoin will return a profit, is if there are more people after you willing to invest in the scheme. This is identical to a ponzi scheme. Now, you can argue that this is true for all commodities. But all other commodities have some other utility backing the value of the commodity. Bitcoin has practically none, as discussed in my other points of the challenges of bitcoin as money. And even that bitcoin as fixed amount of currency theory is a bit questionable. There is no reason why a fractional reserve bitcoin bank could not pop up and create bitcoin-as-payment-money out of thin air, as the current financial sector does with fiat money. (This would obviously allow a mechanism to regulate the total bitcoin money supply, but then bitcoin would lose it's whole raison d'etre. Catch-22.)
  - mathiasrw 10y ago
    > the only way your investment in bitcoin will return a profit, is if there are more people after you willing to invest in the scheme Think of bitcoins as tokens or as tulip bulbs - it can be used for something - but the prices is not the main idea. If you buy them for the price rise you are creating your own "ponzi scheme" > bitcoin as fixed amount of currency theory is a bit questionable. The total amount ot bitcoins is not questionable. > There is no reason why a fractional reserve bitcoin bank could not pop up and create bitcoin-as-payment-money out of thin air If a bank lend out x times the value of the bitcoin deposited, they will not be able to pay them out as bitcoins. If you dont have access to your bitcoins as bitcoins, but only as a bank statement about how much they owe you, you effectivly traded your bitcoins to an IOU.

gnaritas 10y ago

> -as an investment, bitcoin is fundamentally a ponzi scheme. I don't believe you know what a ponzi scheme is if you think this because it's not remotely true. From google: a form of fraud in which belief in the success of a nonexistent enterprise is fostered by the payment of quick returns to the first investors from money invested by later investors. There is no fraud in bitcoin, no phony investment with lying and paying out returns from later investor money. Absent fraud and a nonexistent fake "investment", something isn't a ponzi scheme. Early investors making money from the rise in value of something does not make something a ponzi scheme, that's how all investments work. There is nothing fraudulent about bitcoin and thus it is not remotely a ponzi scheme. > s a money (store of value and measure of value), there is a fundamental issue that there exists no mechanism whatsoever that would stabilize it's value (against neither a typical consumption basket, nor USD or any other currency) Absolutely true, but by design, they don't want a stable value, they want a fixed amount of currency and want value to fluctuate via supply and demand. Bitcoin is inherently anti-keynesian by design. This is why it'll never be more than a commodity.

TylerE 10y ago
> There is no fraud in bitcoin, no phony investment with lying and paying out returns from later investor money. Say what? There are so many ponzi schemes in Bitcoin many of them actually advertise that they are ponzi schemes.
- gnaritas 10y ago
  > There are so many ponzi schemes in Bitcoin many of them actually advertise that they are ponzi schemes. I think you misinterpreted what I'm saying. Of course people run schemes using bitcoin just as they run schemes using USD; when I said "no fraud in bitcoin", I mean in bitcoin itself, the blockchain, the protocol, the currency. Bitcoin is a currency, and like any currency, fraudsters can and will use it, that doesn't make bitcoin fraudulent.
beefield 10y ago
Maybe I should have used "essentially" instead of "fundamentally". What I meant was that the only way your investment in bitcoin will return a profit, is if there are more people after you willing to invest in the scheme. This is identical to a ponzi scheme. Now, you can argue that this is true for all commodities. But all other commodities have some other utility backing the value of the commodity. Bitcoin has practically none, as discussed in my other points of the challenges of bitcoin as money. And even that bitcoin as fixed amount of currency theory is a bit questionable. There is no reason why a fractional reserve bitcoin bank could not pop up and create bitcoin-as-payment-money out of thin air, as the current financial sector does with fiat money. (This would obviously allow a mechanism to regulate the total bitcoin money supply, but then bitcoin would lose it's whole raison d'etre. Catch-22.)
- mathiasrw 10y ago
  > the only way your investment in bitcoin will return a profit, is if there are more people after you willing to invest in the scheme Think of bitcoins as tokens or as tulip bulbs - it can be used for something - but the prices is not the main idea. If you buy them for the price rise you are creating your own "ponzi scheme" > bitcoin as fixed amount of currency theory is a bit questionable. The total amount ot bitcoins is not questionable. > There is no reason why a fractional reserve bitcoin bank could not pop up and create bitcoin-as-payment-money out of thin air If a bank lend out x times the value of the bitcoin deposited, they will not be able to pay them out as bitcoins. If you dont have access to your bitcoins as bitcoins, but only as a bank statement about how much they owe you, you effectivly traded your bitcoins to an IOU.