6 ms·

Wow, people still stuck on this tulip bulb thing ... How about a little analogy? In the mid fifties a trucker conceived the idea of having his trucks' cargo

by justAsking2017 9y ago

Wow, people still stuck on this tulip bulb thing ... How about a little analogy? In the mid fifties a trucker conceived the idea of having his trucks' cargo loaded directly onto a ship, thus inventing the container ship, which essentially revolutionized the shipping industry. Nobody moves cargo the old way anymore, unless they are completely insane. Moving value using distributed consensus systems based on pure mathematics is a similar revolution. However, it is likely to be at least an order of magnitude more significant. It might be a good time to invest.

foepys 9y ago
Loading the cargo onto ships was only the next logical step because it has almost not disadvantages. Blockchains, especially Bitcoin, have multiple fundamental flaws that only wait until they are exploited. Bitcoin for example is the most inefficient way of handling payments ever invented. The whole system is based on the fact that not someone with a higher hashrate comes along. State-level actors might be not be a threat to the system right now but wait until it gets more and more popular. Most of the miners (and the hashrate) are in China and the Chinese government will not sit with their hands in their laps while a unregulated currency becomes widely adopted in the country.
lmm 9y ago
Value already resides almost entirely in distributed consensus systems such as Visa, the international banking system, etc. That revolution has already happened. A zero-trust distributed database is kind of cool. A distributed database that can do 6 transactions/second with a commit time of about 30 minutes and an enormous energy consumption is not very cool. The only people for whom bitcoin is valuable are people for whom the former outweighs the latter, i.e. people for whom trust is extremely costly and zero-trust extremely valuable. Basically, criminals. There's a decent population of those, but it's still a small fraction of society and shrinking every day; drug legalization and the collapse of capital controls in the few places that still have them will destroy most of bitcoin's value.
- Jabanga 9y ago
  >The only people for whom bitcoin is valuable are people for whom the former outweighs the latter, i.e. people for whom trust is extremely costly and zero-trust extremely valuable. Basically, criminals. There's a decent population of those, but it's still a small fraction of society and shrinking every day; drug legalization and the collapse of capital controls in the few places that still have them will destroy most of bitcoin's value. In the developed world, capital controls are definitely increasing. Financial regulations in general are increasing. Mass-surveillance of people's personal finances, and in particular, private transactions, is increasing as well, as cash gets replaced by identity-linked electronic accounts controlled by larger trusted third parties. There is demand for a cash-like electronic currency. In the developing world, there are billions who are unbanked, and with one-third of children being born without a birth certificate [1], and the trend toward increasing centralisation and regulation of banking making government identity documents increasingly necessary to get a bank account, there will likely continue to be a large number of unbanked in the world for whom a permissionless and censorship resistant electronic currency is extremely valuable. [1] http://www.independent.co.uk/news/world/politics/220-million-children-who-dont-exist-a-birth-certificate-is-a-passport-to-a-better-life-so-why-cant-8735046.html http://www.independent.co.uk/news/world/politics/220-million...
- mrb 9y ago
  Lots of flawed arguments and logic in your post. The "commit time" (time until a transaction is considered irreversible) is 60 days for Visa, but 10-60 minutes for Bitcoin. The "notification time" (time until a transaction is announced to recipient) is < 1 second for both systems. The "processed time" (time until a received transaction is spendable) is next-business-day for Visa, and 10 minutes for Bitcoin. Bitcoin miners consume less energy than the annual electricity consumption of decorative Christmas lights in the US, which process 0 transactions and do nothing other than looking shiny: http://blog.zorinaq.com/bitcoin-electricity-consumption/ http://blog.zorinaq.com/bitcoin-electricity-consumption/ The people for whom Bitcoin is valuable include notably (1) senders/recipients who needs to send/receive money quickly (10-60 minutes) to/from anybody around the world, and (2) recipients who want to eradicate fraudulent and eventually reversed payments. Definitely more than "just criminals." Just because Bitcoin may not be useful to you in your life does not mean others will not need the utility it provides.
monkbent 9y ago
Maybe read the article
deleted 9y ago
[deleted]
dsacco 9y ago
> However, it is likely to be at least an order of magnitude more significant. Why?
aptwebapps 9y ago
Did you read the article? 1. The author starts out by relating how the standard story about the tulip crash may be a myth. 2. The author does not think that the above myth is a good analogy for cryptocurrencies. I'm going to go ahead and paste the closing paragraphs here: The problem, of course, is that while blockchain applications make sense in theory, the road to them becoming a reality is still a long one. That is why I suspect the better analogy for blockchain-based applications and their associated cryptocurrencies is not tulips but rather the Internet itself, specifically the 1990s. Marc Andreessen is fond of observing, most recently on this excellent podcast with Barry Ritholtz, that all of the dot-com failures turned out to be viable businesses: they were just 15 years too early (the most recent example: Chewy.com, the spiritual heir of famed dot-com bust Pets.com, acquired earlier this year for $3.35 billion). As the aphorism goes, being early (or late) is no different than being wrong, and that’s true in a financial sense. As I noted above, I would not be surprised if the ongoing run-up in cryptocurrency prices proves to be, well, a bubble. However, bubbles of irrationality and bubbles of timing are fundamentally different: one is based on something real (the latter), and one is not. That is to say, one is a myth, and one is merely a fable — and myths can lift an entire species.
- codingmyway 9y ago
  Bubbles have their uses. An enormous amount of money and effort is thrown at a new technology in the hope of getting the bit that sticks. Most will lose and go broke but a lot of infrastructure gets left behind that later, more considered, businesses build on. True of the railways, the automobile, telecoms and the internet. Most crypto currencies will be worthless but systems be created to allow me to buy shares from you with no broker or stock exchange, to track the ownership of patents and property publicly, to enforce government spending to prevent cronyism and uses that nobody has yet thought of. Best investment is to learn the skills.

foepys 9y ago

Loading the cargo onto ships was only the next logical step because it has almost not disadvantages. Blockchains, especially Bitcoin, have multiple fundamental flaws that only wait until they are exploited. Bitcoin for example is the most inefficient way of handling payments ever invented. The whole system is based on the fact that not someone with a higher hashrate comes along. State-level actors might be not be a threat to the system right now but wait until it gets more and more popular. Most of the miners (and the hashrate) are in China and the Chinese government will not sit with their hands in their laps while a unregulated currency becomes widely adopted in the country.

lmm 9y ago

Value already resides almost entirely in distributed consensus systems such as Visa, the international banking system, etc. That revolution has already happened. A zero-trust distributed database is kind of cool. A distributed database that can do 6 transactions/second with a commit time of about 30 minutes and an enormous energy consumption is not very cool. The only people for whom bitcoin is valuable are people for whom the former outweighs the latter, i.e. people for whom trust is extremely costly and zero-trust extremely valuable. Basically, criminals. There's a decent population of those, but it's still a small fraction of society and shrinking every day; drug legalization and the collapse of capital controls in the few places that still have them will destroy most of bitcoin's value.

Jabanga 9y ago
>The only people for whom bitcoin is valuable are people for whom the former outweighs the latter, i.e. people for whom trust is extremely costly and zero-trust extremely valuable. Basically, criminals. There's a decent population of those, but it's still a small fraction of society and shrinking every day; drug legalization and the collapse of capital controls in the few places that still have them will destroy most of bitcoin's value. In the developed world, capital controls are definitely increasing. Financial regulations in general are increasing. Mass-surveillance of people's personal finances, and in particular, private transactions, is increasing as well, as cash gets replaced by identity-linked electronic accounts controlled by larger trusted third parties. There is demand for a cash-like electronic currency. In the developing world, there are billions who are unbanked, and with one-third of children being born without a birth certificate [1], and the trend toward increasing centralisation and regulation of banking making government identity documents increasingly necessary to get a bank account, there will likely continue to be a large number of unbanked in the world for whom a permissionless and censorship resistant electronic currency is extremely valuable. [1] http://www.independent.co.uk/news/world/politics/220-million-children-who-dont-exist-a-birth-certificate-is-a-passport-to-a-better-life-so-why-cant-8735046.html http://www.independent.co.uk/news/world/politics/220-million...
mrb 9y ago
Lots of flawed arguments and logic in your post. The "commit time" (time until a transaction is considered irreversible) is 60 days for Visa, but 10-60 minutes for Bitcoin. The "notification time" (time until a transaction is announced to recipient) is < 1 second for both systems. The "processed time" (time until a received transaction is spendable) is next-business-day for Visa, and 10 minutes for Bitcoin. Bitcoin miners consume less energy than the annual electricity consumption of decorative Christmas lights in the US, which process 0 transactions and do nothing other than looking shiny: http://blog.zorinaq.com/bitcoin-electricity-consumption/ http://blog.zorinaq.com/bitcoin-electricity-consumption/ The people for whom Bitcoin is valuable include notably (1) senders/recipients who needs to send/receive money quickly (10-60 minutes) to/from anybody around the world, and (2) recipients who want to eradicate fraudulent and eventually reversed payments. Definitely more than "just criminals." Just because Bitcoin may not be useful to you in your life does not mean others will not need the utility it provides.

monkbent 9y ago

Maybe read the article

deleted 9y ago

[deleted]

dsacco 9y ago

> However, it is likely to be at least an order of magnitude more significant. Why?

aptwebapps 9y ago

Did you read the article? 1. The author starts out by relating how the standard story about the tulip crash may be a myth. 2. The author does not think that the above myth is a good analogy for cryptocurrencies. I'm going to go ahead and paste the closing paragraphs here: The problem, of course, is that while blockchain applications make sense in theory, the road to them becoming a reality is still a long one. That is why I suspect the better analogy for blockchain-based applications and their associated cryptocurrencies is not tulips but rather the Internet itself, specifically the 1990s. Marc Andreessen is fond of observing, most recently on this excellent podcast with Barry Ritholtz, that all of the dot-com failures turned out to be viable businesses: they were just 15 years too early (the most recent example: Chewy.com, the spiritual heir of famed dot-com bust Pets.com, acquired earlier this year for $3.35 billion). As the aphorism goes, being early (or late) is no different than being wrong, and that’s true in a financial sense. As I noted above, I would not be surprised if the ongoing run-up in cryptocurrency prices proves to be, well, a bubble. However, bubbles of irrationality and bubbles of timing are fundamentally different: one is based on something real (the latter), and one is not. That is to say, one is a myth, and one is merely a fable — and myths can lift an entire species.

codingmyway 9y ago
Bubbles have their uses. An enormous amount of money and effort is thrown at a new technology in the hope of getting the bit that sticks. Most will lose and go broke but a lot of infrastructure gets left behind that later, more considered, businesses build on. True of the railways, the automobile, telecoms and the internet. Most crypto currencies will be worthless but systems be created to allow me to buy shares from you with no broker or stock exchange, to track the ownership of patents and property publicly, to enforce government spending to prevent cronyism and uses that nobody has yet thought of. Best investment is to learn the skills.