5 ms·

So I'm late to the digital currency game. What are the regular use cases for digital currency? Who accepts it? Is it mostly for person-to-person trading?

by lesiva 9y ago

heifer2822 9y ago
The utility is that it's a trust-less transfer of value between two parties. Essentially, it's like being able to send cash, anonymously if you chose, to someone else, without an intermediary, in a way that everyone can see and nobody can challenge the legitimacy of. It seems to me a lot of it is tied up in speculative investment. But there are some vendors who accept it and some countries (eg: Japan) where it's more popular and widely accepted.
iDemonix 9y ago
Depends on the currency. Bitcoin is largely just currency, but things like Ethereum introduce concepts such as smart contracts. Here's an article explaining Ethereum, but obviously there are tons of cryptocurrencies now that all work in their own way. https://thenextweb.com/contributors/2017/08/10/ultimate-2000-word-plain-english-guide-ethereum/#.tnw_3DXj3qZI https://thenextweb.com/contributors/2017/08/10/ultimate-2000...
- lesiva 9y ago
  Oh, this is super interesting! Thanks!
paulcole 9y ago
lots of people have used it to buy drugs
- ktta 9y ago
  While downvoting this is warranted, this is certainly true. To catch up on the biggest news that has come out of Bitcoin, I'd suggest reading on 'Silk Road' and Ross Ulbricht. Wired has a very good 2-set long form on this[1]. If you don't want such a verbose story, Ars Techica follwed it well too[2] [1]: https://www.wired.com/2015/04/silk-road-1/ https://www.wired.com/2015/04/silk-road-1/ https://www.wired.com/2015/05/silk-road-2 https://www.wired.com/2015/05/silk-road-2 [2]: https://arstechnica.com/series/the-silk-road-trial/ https://arstechnica.com/series/the-silk-road-trial/
  - lightbyte 9y ago
    That is not the most recent or biggest news, the largest (by a very wide margin) successor to the Silk Road, AlphaBay, was busted just a month ago [1] [1]: https://www.forbes.com/sites/thomasbrewster/2017/07/20/alphabay-hansa-dark-web-markets-taken-down-in-massive-drug-bust-operation/#1e6c5f665b4b https://www.forbes.com/sites/thomasbrewster/2017/07/20/alpha...
    - ktta 9y ago
      By volume, sure, AlphaBay was definitely a bigger successor, but Silk Road was unprecedented. Something like AlphaBay was inevitable after Silk Road (Next was Hansa, but turns out was already a honeypot by that time). Silk Road was the first to bring forward the notion of how cryptocurrencies can be used for something much more malicious than coffee. The news it made, and with a face to the organization made it a bigger story, and with Federal Officers involved in a related crime, I will maintain it is a much more important story than AlphaBay. On a sidenote, AlphaBay isn't the all secure operation you think it was, the 'admin' used a clearnet personal email address for some sort of welcome message, and several other stupid mistakes (check out the document posted a couple days ago in detail and a link to a forum in the comments). There will be another market which will be bigger than AlphaBay. Currencies with more privacy oriented features are coming baked in, so it will be harder to catch them too.
      - lightbyte 9y ago
        > isn't the all secure operation you think it was I did not say that at all. Though since you brought it up, the FBI and Dutch Police's explanation for how they busted the site is very suspect. It does not sound legitimate at all, it's much more likely they cracked the site in another (more illegal/unethical) way and used parallel construction to hide what they did.
        ktta 9y ago
        >>> isn't the all secure operation you think it was >I did not say that at all. You didn't, but I said that to show that it didn't earn it's place as the bigger competitor, it was just bound to happen no matter who braved it. >Though since you brought it up, the FBI and Dutch Police's explanation for how they busted the site is very suspect. It does not sound legitimate at all, it's much more likely they cracked the site in another (more illegal/unethical) way and used parallel construction to hide what they did. Mostly agree. But I don't think there's anything illegal about cracking the tor network, AlphaBay's servers or one of its admins' computers. There was probably a warrant for whatever they did, especially since it was at the international level involving multiple agencies. It might also be a vulnerability in the tor network, but I bet we would most likely never know.
fusiongyro 9y ago
There are some vendors who take it; the New Mexico Tea Company for instance—and I buy tea from them because it's good tea, not because they take Bitcoin (I usually use a credit card to check out anyway). https://www.nmteaco.com https://www.nmteaco.com I have also used it to transfer money to friends, because being able to do that in-browser without involving Paypal seemed pretty great. I would like to get my family using it for this reason too, but most of them are not tech savvy enough to handle it (and some probably would have trouble with Coinbase's verification).
DiNovi 9y ago
it's all being sorted out rn, thus the gold rush
0x4f3759df 9y ago
Use cases (Escaping currency controls,Cannot be seized by government, Asset Speculation, Purchasing legal and illegal things, Money laundering, Donating to people like wikileaks) Bitpay allows you to use bitcoin with a VISA card https://bitpay.com/ https://bitpay.com/ Some merchants accept it, Overstock being a famous one.
- zjaffee 9y ago
  Many of these things are no different than holding large amounts of normal cash(of any currency really) or something such as gold, with the exception of their being a ledger of all trades that have occurred. Also bitcoins can certainly be seized by the government should they size control over any accounts you hold coins in, take your computers, ect (it's just harder to do so). Also I think your missing the biggest use case, abet one that isn't frequently discussed, and it is that crypto currencies are by far the best digital payment solution when it comes to the time it takes for transactions to clear. There is no dispute process, and there is no waiting on the fed for their ACA system to clear your transactions. However, I think a lot of people prefer credit cards for cash back and to have the option to charge back, but certainly cryptos are better for sellers (and potentially will give discounts to those who use them in the future).
  - pedrocr 9y ago
    >crypto currencies are by far the best digital payment solution when it comes to the time it takes for transactions to clear Isn't paypal much faster than crypto currencies at doing the same? The normal banking system is quite slow (in part for good reasons) but the digital currencies that came before the crypto currencies are much better at this already, and better than bitcoin will ever be.
    - fpgaminer 9y ago
      You missed the salient word: "clear" PayPal transactions never really clear. You can probably reverse a 3 year old PayPal transaction... But Bitcoin payments are irreversible after only 1 hour. There are no other systems that accomplish that online.
aphextron 9y ago
As a nitpick the proper term is "cryptocurrency", not "digital currency". A cryptocurrency does not necessarily have to be stored or generated digitally.
- lesiva 9y ago
  Makes sense. Coinbase's website is plastered with the term "digital currency" so that seemed the safest to use since I'm not too familiar with that market :)
  - discombobulate 9y ago
    They do that for their benefit, & for the benefit of their regulator bedfellows (I think). The SEC, for example, dare not mutter the word 'crypto', confirming that Bitcoin et al do actually exist!
- avian 9y ago
  > A cryptocurrency does not necessarily have to be stored or generated digitally. How would a non-digital cryptocurrency work? While signal scramblers, an analog equivalent to digital cryptography, did exist, I have a hard time imagining an analog blockchain.
  - 45h34jh53k4j 9y ago
    a block is just a header, a ref to the previous block, a set of tx's and a nonce to satisfy the work function. It being digital is just its encoding. An analog cryptocurrency could be carved into trees or anything.
    - avian 9y ago
      Are you confusing digital with electronic? Ones and zeros carved into a tree are still a digital record. Digital refers to the fact the you operate on a set of discrete values, in contrast to a continuum of values. Medium is irrelevant. Just to be clear. I do agree with the argument above that "cryptocurrency" is a much more fitting term than "digital currency".
the_common_man 9y ago
> So I'm late to the digital currency game Many of us haven't even started !
happypants23 9y ago
Another use case is fungibility, privacy and anonymity. These are features which are for the most part missing in our current financial system. Monero (https://getmonero.org/ https://getmonero.org/) is a good example of a cryptocurrency which focuses on getting these things right.
xiphias 9y ago
You're quite early even by talking about it
discombobulate 9y ago
It's 'crypto currency'. It's not centralised M-Pesa (African digital currency created by Vodafone), or PayPal. If you don't understand what it is, you may buy the wrong crypto asset. I think it's fair to say it's a good idea to know what you're investing in!

So I'm late to the digital currency game. What are the regular use cases for digital currency? Who accepts it? Is it mostly for person-to-person trading?

by lesiva 9y ago

So I'm late to the digital currency game. What are the regular use cases for digital currency? Who accepts it? Is it mostly for person-to-person trading?

heifer2822 9y ago

The utility is that it's a trust-less transfer of value between two parties. Essentially, it's like being able to send cash, anonymously if you chose, to someone else, without an intermediary, in a way that everyone can see and nobody can challenge the legitimacy of. It seems to me a lot of it is tied up in speculative investment. But there are some vendors who accept it and some countries (eg: Japan) where it's more popular and widely accepted.

iDemonix 9y ago

Depends on the currency. Bitcoin is largely just currency, but things like Ethereum introduce concepts such as smart contracts. Here's an article explaining Ethereum, but obviously there are tons of cryptocurrencies now that all work in their own way. https://thenextweb.com/contributors/2017/08/10/ultimate-2000-word-plain-english-guide-ethereum/#.tnw_3DXj3qZI https://thenextweb.com/contributors/2017/08/10/ultimate-2000...

lesiva 9y ago
Oh, this is super interesting! Thanks!

paulcole 9y ago

lots of people have used it to buy drugs

ktta 9y ago
While downvoting this is warranted, this is certainly true. To catch up on the biggest news that has come out of Bitcoin, I'd suggest reading on 'Silk Road' and Ross Ulbricht. Wired has a very good 2-set long form on this[1]. If you don't want such a verbose story, Ars Techica follwed it well too[2] [1]: https://www.wired.com/2015/04/silk-road-1/ https://www.wired.com/2015/04/silk-road-1/ https://www.wired.com/2015/05/silk-road-2 https://www.wired.com/2015/05/silk-road-2 [2]: https://arstechnica.com/series/the-silk-road-trial/ https://arstechnica.com/series/the-silk-road-trial/
- lightbyte 9y ago
  That is not the most recent or biggest news, the largest (by a very wide margin) successor to the Silk Road, AlphaBay, was busted just a month ago [1] [1]: https://www.forbes.com/sites/thomasbrewster/2017/07/20/alphabay-hansa-dark-web-markets-taken-down-in-massive-drug-bust-operation/#1e6c5f665b4b https://www.forbes.com/sites/thomasbrewster/2017/07/20/alpha...
  - ktta 9y ago
    By volume, sure, AlphaBay was definitely a bigger successor, but Silk Road was unprecedented. Something like AlphaBay was inevitable after Silk Road (Next was Hansa, but turns out was already a honeypot by that time). Silk Road was the first to bring forward the notion of how cryptocurrencies can be used for something much more malicious than coffee. The news it made, and with a face to the organization made it a bigger story, and with Federal Officers involved in a related crime, I will maintain it is a much more important story than AlphaBay. On a sidenote, AlphaBay isn't the all secure operation you think it was, the 'admin' used a clearnet personal email address for some sort of welcome message, and several other stupid mistakes (check out the document posted a couple days ago in detail and a link to a forum in the comments). There will be another market which will be bigger than AlphaBay. Currencies with more privacy oriented features are coming baked in, so it will be harder to catch them too.
    - lightbyte 9y ago
      > isn't the all secure operation you think it was I did not say that at all. Though since you brought it up, the FBI and Dutch Police's explanation for how they busted the site is very suspect. It does not sound legitimate at all, it's much more likely they cracked the site in another (more illegal/unethical) way and used parallel construction to hide what they did.
      - ktta 9y ago
        >>> isn't the all secure operation you think it was >I did not say that at all. You didn't, but I said that to show that it didn't earn it's place as the bigger competitor, it was just bound to happen no matter who braved it. >Though since you brought it up, the FBI and Dutch Police's explanation for how they busted the site is very suspect. It does not sound legitimate at all, it's much more likely they cracked the site in another (more illegal/unethical) way and used parallel construction to hide what they did. Mostly agree. But I don't think there's anything illegal about cracking the tor network, AlphaBay's servers or one of its admins' computers. There was probably a warrant for whatever they did, especially since it was at the international level involving multiple agencies. It might also be a vulnerability in the tor network, but I bet we would most likely never know.

fusiongyro 9y ago

There are some vendors who take it; the New Mexico Tea Company for instance—and I buy tea from them because it's good tea, not because they take Bitcoin (I usually use a credit card to check out anyway). https://www.nmteaco.com https://www.nmteaco.com I have also used it to transfer money to friends, because being able to do that in-browser without involving Paypal seemed pretty great. I would like to get my family using it for this reason too, but most of them are not tech savvy enough to handle it (and some probably would have trouble with Coinbase's verification).

DiNovi 9y ago

it's all being sorted out rn, thus the gold rush

0x4f3759df 9y ago

Use cases (Escaping currency controls,Cannot be seized by government, Asset Speculation, Purchasing legal and illegal things, Money laundering, Donating to people like wikileaks) Bitpay allows you to use bitcoin with a VISA card https://bitpay.com/ https://bitpay.com/ Some merchants accept it, Overstock being a famous one.

zjaffee 9y ago
Many of these things are no different than holding large amounts of normal cash(of any currency really) or something such as gold, with the exception of their being a ledger of all trades that have occurred. Also bitcoins can certainly be seized by the government should they size control over any accounts you hold coins in, take your computers, ect (it's just harder to do so). Also I think your missing the biggest use case, abet one that isn't frequently discussed, and it is that crypto currencies are by far the best digital payment solution when it comes to the time it takes for transactions to clear. There is no dispute process, and there is no waiting on the fed for their ACA system to clear your transactions. However, I think a lot of people prefer credit cards for cash back and to have the option to charge back, but certainly cryptos are better for sellers (and potentially will give discounts to those who use them in the future).
- pedrocr 9y ago
  >crypto currencies are by far the best digital payment solution when it comes to the time it takes for transactions to clear Isn't paypal much faster than crypto currencies at doing the same? The normal banking system is quite slow (in part for good reasons) but the digital currencies that came before the crypto currencies are much better at this already, and better than bitcoin will ever be.
  - fpgaminer 9y ago
    You missed the salient word: "clear" PayPal transactions never really clear. You can probably reverse a 3 year old PayPal transaction... But Bitcoin payments are irreversible after only 1 hour. There are no other systems that accomplish that online.

aphextron 9y ago

As a nitpick the proper term is "cryptocurrency", not "digital currency". A cryptocurrency does not necessarily have to be stored or generated digitally.

lesiva 9y ago
Makes sense. Coinbase's website is plastered with the term "digital currency" so that seemed the safest to use since I'm not too familiar with that market :)
- discombobulate 9y ago
  They do that for their benefit, & for the benefit of their regulator bedfellows (I think). The SEC, for example, dare not mutter the word 'crypto', confirming that Bitcoin et al do actually exist!
avian 9y ago
> A cryptocurrency does not necessarily have to be stored or generated digitally. How would a non-digital cryptocurrency work? While signal scramblers, an analog equivalent to digital cryptography, did exist, I have a hard time imagining an analog blockchain.
- 45h34jh53k4j 9y ago
  a block is just a header, a ref to the previous block, a set of tx's and a nonce to satisfy the work function. It being digital is just its encoding. An analog cryptocurrency could be carved into trees or anything.
  - avian 9y ago
    Are you confusing digital with electronic? Ones and zeros carved into a tree are still a digital record. Digital refers to the fact the you operate on a set of discrete values, in contrast to a continuum of values. Medium is irrelevant. Just to be clear. I do agree with the argument above that "cryptocurrency" is a much more fitting term than "digital currency".

the_common_man 9y ago

> So I'm late to the digital currency game Many of us haven't even started !

happypants23 9y ago

Another use case is fungibility, privacy and anonymity. These are features which are for the most part missing in our current financial system. Monero (https://getmonero.org/ https://getmonero.org/) is a good example of a cryptocurrency which focuses on getting these things right.

xiphias 9y ago

You're quite early even by talking about it

discombobulate 9y ago

It's 'crypto currency'. It's not centralised M-Pesa (African digital currency created by Vodafone), or PayPal. If you don't understand what it is, you may buy the wrong crypto asset. I think it's fair to say it's a good idea to know what you're investing in!