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So annoying to see triumphant declarations of victory of bitcoin, based solely on the price increasing. Speaking as a bitcoin owner and proponent, there is zer

by aedron 9y ago

So annoying to see triumphant declarations of victory of bitcoin, based solely on the price increasing. Speaking as a bitcoin owner and proponent, there is zero (actually negative) market uptake of bitcoin as a payment platform (which I happen to believe is bitcoin's primary use case). This is because no work has gone into scaling up transaction throughput, which has predictably suffered as a result of increased mainstream interest (even with practically no merchant adoption). The narrative has shifted recently that bitcoin is now a 'settlement layer', only that makes the situation even worse, because there is no 'payment layer' on top of it, only pie-in-the-sky designs. So yeah, I don't share in the exhilaration over $4000+ bitcoins.

Udik 9y ago
> there is zero (actually negative) market uptake of bitcoin as a payment platform ... This is because no work has gone into scaling up transaction throughput No, or only partly so. The other, more fundamental reason why bitcoin will never be a payment platform, is that it doesn't behave as a currency, but as a commodity. The hard limit on the number of bitcoin is both the guarantee of its value and what makes it an intrinsically deflationary good. Its monstrous current price proves it, and it can only go up (almost) indefinitely or go bust. With these characteristics, nobody will ever want to use it as a payment method. You don't want to pay with a bitcoin, when you know that in the future that same bitcoin will be worth n times its value today. If you have used bitcoins in the past for transactions- you might have paid 50 bitcoins for a book in 2011- I'm sure you're sorely regretting it now.
- ckastner 9y ago
  Initially I perceived Bitcoin to be a payment platform, but I too now believe that it now behaves more like a commodity. Which is odd, because without any other utility, what's the point in choosing this commodity over others?
  - aerique 9y ago
    The only reason I can think of is entirely human: because others are using it.
- VMG 9y ago
  > With these characteristics, nobody will ever want to use it as a payment method. People have used gold as a payment method for millenia. If holding bitcoin is as attractive as you say it is, businesses will give discounts for bitcoin payment which can compensate the effect you describe. In other words, if bitcoin is as attractive as you say it is, you would convert to fiat only when you want purchase something, and the merchant would immediately convert from fiat to bitcoin. Why would both parties in the transaction chose to transact in such an inefficient way?
- marcosscriven 9y ago
  I’ve seen forums posts from the early days where people have mentioned giving a tenth or so of a Bitcoin as a tip to thank them for an answer. Quite a tip now!
novalis78 9y ago
It clearly seems to solve a much bigger problem and hence the increase in price: a store of value in a time where the Feds balance sheet increases with the same velocity as Bitcoins price. On the other hand - it is still being used for payments. Though I am not a friend of the settlement layer idea myself. Time will tell how BCH will fare.
- uncletammy 9y ago
  BCH might be Bitcoin's only hope. The upcoming Segwit2x fork (Segregated Witness + 2x block size increase) would have been fine 2 years ago. If it succeeds now I'm afraid all of Bitcoin will suffer and only Ethereum will benefit. While I love all the developments happening on Ethereum, it's not the censorship proof money that I was promised.
dreit1 9y ago
There is a sense of victory because millions of people view Bitcoin as a good place to park their money over fiat currency. Unfortunately no one runs news stories on the growth of unique addresses in the bitcoin network
- TeMPOraL 9y ago
  Do they now? I feel people still see Bitcoin mostly as a high-risk/high-reward no-barriers-to-entry alternative to the stock market.
  - dreit1 9y ago
    Exactly my point, given the option of storing their money as fiat, or storing their money in BTC. Millions are choosing BTC, everyone's rationale for it will be different, but it is happening. However yes I agree the past couple of months at least has been filled with rabid noobs, but HODL culture does a decent job of counteracting this
  - speedplane 9y ago
    I understand buying and selling BTC-backed securities that are backed by a trustworthy bank... but keeping your life savings on your laptop is just cray cray.
    - marcosscriven 9y ago
      I read a story of people losing a huge amount to theft: https://medium.com/@CodyBrown/how-to-lose-8k-worth-of-bitcoin-in-15-minutes-with-verizon-and-coinbase-com-ba75fb8d0bac https://medium.com/@CodyBrown/how-to-lose-8k-worth-of-bitcoi...
    - slamdance 9y ago
      yes. But they also have credit card accounts, hardware wallets as well as paper wallets. If you keep your coins offline (if you're holding), they won't get hacked.
  - pzs 9y ago
corford 9y ago
>no work has gone into scaling up transaction throughput You lost me after this. A huge amount of work is going into scaling across the entire crypto coin space. The issue among the various factions is disagreement over what approach to take and how aggressively to implement it.
VMG 9y ago
> [..] there is no 'payment layer' on top of it, only pie-in-the-sky designs. That is completely false. Development of Lightning Network and other solutions by multiple teams has been steady and robust. To cite a few working on LN: * https://github.com/ElementsProject/lightning https://github.com/ElementsProject/lightning * https://github.com/acquia/lightning https://github.com/acquia/lightning * https://github.com/lightningnetwork/lnd https://github.com/lightningnetwork/lnd
- Laforet 9y ago
  > * https://github.com/acquia/lightning https://github.com/acquia/lightning This project is a web development tool and has nothing to do with crypto. Back to your comments on the state of LN development, I would not call it robust when the current implementation requires every client to monitor the blockchain 24/7 just in case a node attempts to cheat the system, and there is a good chance the cheater will succeed when the settlement layer becomes congested. For now they are very much pie in the sky.
  - VMG 9y ago
    Sorry, I was thinking of https://github.com/ACINQ/eclair https://github.com/ACINQ/eclair (probably because of the letters a c q) Channel monitoring will be outsourced. I did not claim everything was finished, but it is far from pie-in-the-sky. Off-chain scaling is the only way to scale bitcoin as a day-to-day payment system, and always has been. This must have been clear to everybody from the start.

by aedron 9y ago

Udik 9y ago

> there is zero (actually negative) market uptake of bitcoin as a payment platform ... This is because no work has gone into scaling up transaction throughput No, or only partly so. The other, more fundamental reason why bitcoin will never be a payment platform, is that it doesn't behave as a currency, but as a commodity. The hard limit on the number of bitcoin is both the guarantee of its value and what makes it an intrinsically deflationary good. Its monstrous current price proves it, and it can only go up (almost) indefinitely or go bust. With these characteristics, nobody will ever want to use it as a payment method. You don't want to pay with a bitcoin, when you know that in the future that same bitcoin will be worth n times its value today. If you have used bitcoins in the past for transactions- you might have paid 50 bitcoins for a book in 2011- I'm sure you're sorely regretting it now.

ckastner 9y ago
Initially I perceived Bitcoin to be a payment platform, but I too now believe that it now behaves more like a commodity. Which is odd, because without any other utility, what's the point in choosing this commodity over others?
- aerique 9y ago
  The only reason I can think of is entirely human: because others are using it.
VMG 9y ago
> With these characteristics, nobody will ever want to use it as a payment method. People have used gold as a payment method for millenia. If holding bitcoin is as attractive as you say it is, businesses will give discounts for bitcoin payment which can compensate the effect you describe. In other words, if bitcoin is as attractive as you say it is, you would convert to fiat only when you want purchase something, and the merchant would immediately convert from fiat to bitcoin. Why would both parties in the transaction chose to transact in such an inefficient way?
marcosscriven 9y ago
I’ve seen forums posts from the early days where people have mentioned giving a tenth or so of a Bitcoin as a tip to thank them for an answer. Quite a tip now!

novalis78 9y ago

It clearly seems to solve a much bigger problem and hence the increase in price: a store of value in a time where the Feds balance sheet increases with the same velocity as Bitcoins price. On the other hand - it is still being used for payments. Though I am not a friend of the settlement layer idea myself. Time will tell how BCH will fare.

uncletammy 9y ago
BCH might be Bitcoin's only hope. The upcoming Segwit2x fork (Segregated Witness + 2x block size increase) would have been fine 2 years ago. If it succeeds now I'm afraid all of Bitcoin will suffer and only Ethereum will benefit. While I love all the developments happening on Ethereum, it's not the censorship proof money that I was promised.

dreit1 9y ago

There is a sense of victory because millions of people view Bitcoin as a good place to park their money over fiat currency. Unfortunately no one runs news stories on the growth of unique addresses in the bitcoin network

TeMPOraL 9y ago
Do they now? I feel people still see Bitcoin mostly as a high-risk/high-reward no-barriers-to-entry alternative to the stock market.
- dreit1 9y ago
  Exactly my point, given the option of storing their money as fiat, or storing their money in BTC. Millions are choosing BTC, everyone's rationale for it will be different, but it is happening. However yes I agree the past couple of months at least has been filled with rabid noobs, but HODL culture does a decent job of counteracting this
- speedplane 9y ago
  I understand buying and selling BTC-backed securities that are backed by a trustworthy bank... but keeping your life savings on your laptop is just cray cray.
  - marcosscriven 9y ago
    I read a story of people losing a huge amount to theft: https://medium.com/@CodyBrown/how-to-lose-8k-worth-of-bitcoin-in-15-minutes-with-verizon-and-coinbase-com-ba75fb8d0bac https://medium.com/@CodyBrown/how-to-lose-8k-worth-of-bitcoi...
  - slamdance 9y ago
    yes. But they also have credit card accounts, hardware wallets as well as paper wallets. If you keep your coins offline (if you're holding), they won't get hacked.
- pzs 9y ago

corford 9y ago

>no work has gone into scaling up transaction throughput You lost me after this. A huge amount of work is going into scaling across the entire crypto coin space. The issue among the various factions is disagreement over what approach to take and how aggressively to implement it.

VMG 9y ago

> [..] there is no 'payment layer' on top of it, only pie-in-the-sky designs. That is completely false. Development of Lightning Network and other solutions by multiple teams has been steady and robust. To cite a few working on LN: * https://github.com/ElementsProject/lightning https://github.com/ElementsProject/lightning * https://github.com/acquia/lightning https://github.com/acquia/lightning * https://github.com/lightningnetwork/lnd https://github.com/lightningnetwork/lnd

Laforet 9y ago
> * https://github.com/acquia/lightning https://github.com/acquia/lightning This project is a web development tool and has nothing to do with crypto. Back to your comments on the state of LN development, I would not call it robust when the current implementation requires every client to monitor the blockchain 24/7 just in case a node attempts to cheat the system, and there is a good chance the cheater will succeed when the settlement layer becomes congested. For now they are very much pie in the sky.
- VMG 9y ago
  Sorry, I was thinking of https://github.com/ACINQ/eclair https://github.com/ACINQ/eclair (probably because of the letters a c q) Channel monitoring will be outsourced. I did not claim everything was finished, but it is far from pie-in-the-sky. Off-chain scaling is the only way to scale bitcoin as a day-to-day payment system, and always has been. This must have been clear to everybody from the start.