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In the beginning, there was this wonderful vision of making Bitcoin the currency of the future. I loved that. Now it's just all greed. Bitcoin will go the moon,

by sunseb 9y ago

In the beginning, there was this wonderful vision of making Bitcoin the currency of the future. I loved that. Now it's just all greed. Bitcoin will go the moon, that's all that matters now. Guess what, you can't create value out of thin air. Bitcoin is useless, you can't do anything with it, except buying and waiting that others buy after you so the price rises up: that's pretty much the definition of speculation.

deleted 9y ago
[deleted]
callahad 9y ago
> Bitcoin is useless, you can't do anything with it There's a cafe down the street from me that accepts Bitcoin. I could literally buy a meal with it right now. It may not be rational, but it has actual utility.
- testvox 9y ago
  But with a 4 dollar transaction fee why would you use Bitcoin for such things?
  - mrweasel 9y ago
    Why is there a transaction fee on Bitcoins? Who get the money? One of the argument for Bitcoin originally was no transaction fee, because there's no middleman.
    - megous 9y ago
      It was not the original argument. Search the original bitcoin paper for a word fee, the first occurance explains it.
    - apexalpha 9y ago
      Once all Bitcoin will be created the 'fee' will be what miners get for verifying transaction blocks. They also do now, but coupled with the creation of new bitcoins.
    - testvox 9y ago
      No there are middlemen they just aren't centralized. The miners get the fee, it's their incentive to mine (well that and new coin creation but new coin creation slows down and eventually stops so fees are the long term incentive).
  - nrhk 9y ago
    Say you wanted to transfer $100,000. That transfer fee stays the same.
    - beefield 9y ago
      To be more precise, you want to transfer $100,000 worth (subject to value changes during the transaction) of BTC. If you want to transfer $100,000 using BTC, my current understanding is that you end up paying more (note also bid-ask spread in the market) and transacting more slowly than wire transfer all while taking exchange risk against BTC for a non-trivial amount of time.
      - nrhk 9y ago
        Depends on the state of the bitcoin network but the fee is the same. If you have 100k of bitcoin right now and needed to transfer it to someone, you can do it in one go with one flat fee that is the same regardless of your transaction amount. I pay no fee's to obtain bitcoin, ether but that shouldn't matter. We're talkign dollar to dollar transfers, btc to btc transfers, eth to eth transfers. Doing it in dollars is objectively worse. It takes more time, more money and raises more scrutiny. I've recently used ether to transfer over 5k to a friend with a fee a few cents and a transaction time of 40 seconds. You can't do that with dollars.
- sunseb 9y ago
  Like this man? "10,000 bitcoin bought 2 pizzas in 2010 — and now it'd be worth $20 million": http://mashable.com/2017/05/23/bitcoin-pizza-day-20-million http://mashable.com/2017/05/23/bitcoin-pizza-day-20-million
  - patrickaljord 9y ago
    It's worth $100 million now.
  - Yizahi 9y ago
    If he put for sale 10000 BTC today he would very likely receive a price of 2 pizza in USD.
- sanmon3186 9y ago
  Given that BTC transactions take time (and high fee), how does it work for cafes or any micro transactions of this kind?
  - tom_mellior 9y ago
    It's been a while since I last used it in a physical place, but basically the store's or restaurant's payment system accepted the payment as soon as the transaction was broadcast over the network. In other words, payment was instantaneous. The system did not wait for a confirmation block. That's not unreasonable, since every transaction with nonzero fees was eventually confirmed, in those early days before the network got clogged up. Not sure how it would work now, but I think even now chances are that the transaction would eventually be confirmed, so the POS system could gamble on that and "accept" it if it includes some minimal fee.
  - callahad 9y ago
    I don't have any BTC on hand, so I genuinely don't know. The barista I spoke with mentioned that they get four or five transactions per week, and they had a physical POS terminal for Bitcoin transactions, similar to the one CoinKite was producing a few years ago: http://blog.coinkite.com/post/76526284739/did-you-know-that-with-the-coinkite-terminal-you http://blog.coinkite.com/post/76526284739/did-you-know-that-...
  - timfrietas 9y ago
    How it (generally) works now: intermediaries pay the restaurant in fiat the equivalent price in BTC on the time/day of the transaction. They facilitate the trade without the restaurant needing to worry about price fluctuations or digital currency exchanges. How it may work in the future: Off-blockchain processing solutions like the Lightning network (1) have been proposed to decentralize some degree of transactions. However, this inevitably takes some of the power away from the miners/those who make money off every transaction fee. This has in essence been the struggle/division behind many of the most recent forks or proposed forks; a tradeoff between scale and economics for those that are generating coins or facilitating transactions. The Bitcoin drama is far from over, and for it to be anything other than (primarily) a store of value in the longer term will require significant technical changes. In fact, at this point, no existing cryptocurrency can support the scale of, say, VISA. It's early days and the race to solve this problem (or fail) is a fascinating drama to watch. 1. https://cointelegraph.com/explained/lightning-network-explained https://cointelegraph.com/explained/lightning-network-explai...
- beefield 9y ago
  Out of curiosity, how much that would cost and how long it would take for the transaction confirm? I know, you can't know that for sure beforehand (what a wonderful property for a currency), but current best guess? (The last numbers I heard and may have misunderstood were more than 10 dollars and hours to confirm. That is negative utility to me, as in that case someone would need to literally pay me to use bitcoin for buying my coffee.)
  - Klathmon 9y ago
    The dream of "buying a cup of coffee" with bitcoin is not realized right now. While it's not as bad as you point out, it's still not ideal. Fees for an average transaction regardless of the amount of bitcoin are $1-$2 USD unless you manually set fees lower, and time to confirm isn't normally an issue for most vendors, as they are fine with zero-confirmation transactions for small things (as long as it shows up in the mempool and the fee is high enough that it's probable it will eventually be confirmed, it's fine). And that's all assuming we don't hit a massive amount of congestion like happens every now and then. However in the future the lightning network will really solve this problem hopefully once and for all. Read the overview about how it works at [0] but the gist is that you can create a network of trustless "deferred" payments that you and another party can agree on new balances for each of you off the blockchain, and at any point either of you can "settle" the latest balance on the blockchain. And by building a network of these "deferred" payment channels, you can pay parties that you don't even have a direct channel with by routing it through others that you do have a channel with. It was a pretty mindblowing idea once I was able to grasp it. I really encourage anyone that is even a little curious about it to read the website at [0]. The abstract is very approachable, and the actual paper does a good job walking you through the details. [0] http://lightning.network/ http://lightning.network/
    - beefield 9y ago
      In addition to assuming that Lightning will one day materialize, you also need to assume that people are willing to store non-trivial amount of their wealth in an inherently volatile asset whose only reason to appreciate in value (by definition) is there to be more people willing to buy and hold the asset with even higher prices (cough, ponzi, cough). (Because if the people are not willing to store their wealth in bitcoin, lightning will make the problme worse by needing more than one transaction in blockchain to achive one actual transaction)
- chrischen 9y ago
  I could probably pay for it in backrubs too, but that doesn't make backrubs a useful currency.
  - slumberlust 9y ago
    That depends greatly on the quality of your rubs.
- stupidcar 9y ago
  The problem is, the utility has not grown by anything like enough, whereas the speculative side has exploded. And the more Bitcoin is used as speculative instrument, the worse it becomes as an actual currency or a long-term store of value. As a regular consumer, you need to know that the money in your wallet one day is going to be worth roughly the same the next. Likewise, you need to know the gold you're buying to put in your vault isn't being sold at a price 1000x its long-term worth. Yes, in the short term, it's nice if you have some Bitcoins and they keep increasing in value, but does anybody really think the current surges are anything other than a bubble? If you accept that, then you have to accept that there will eventually be a correction. In which case, accepting Bitcoin in lieu of traditional currencies is like a a cafe letting customer pay for goods using a collateralised debt obligation or some other risky security. If Bitcoin is going to make it as a digital currency, or even just as the "digital gold" that some of its adherents now seem to settling for, then it needs to get past this bubble phase. And the quicker the better, because the harder the correction, the more wary people are going to be of going anywhere near it afterwards, and the more likely that governments are to introduce hefty regulation to avoid a second bubble.
sschueller 9y ago
I see bitcoin as the foundation stone, paving the way for better blockchains like ethereum. Bitcoin itself will never be practical enough for daily transactions, it is more like gold, a store of value.
- deleted 9y ago
  [deleted]
0xcafecafe 9y ago
Exactly, it is the tulip craze of our time and a textbook case of https://en.wikipedia.org/wiki/Greater_fool_theory https://en.wikipedia.org/wiki/Greater_fool_theory
- patrickaljord 9y ago
  There never was a real tulip fever. https://www.smithsonianmag.com/history/there-never-was-real-tulip-fever-180964915/ https://www.smithsonianmag.com/history/there-never-was-real-...
- 0bsidian 9y ago
  If it's so obvious, why don't you buy a futures contract to short it and reap your rewards in a year or two? You can make millions of dollars if you're right.
  - 0xcafecafe 9y ago
    I cannot as the market can remain irrational for a far longer time than I can remain solvent.
    - aws_ls 9y ago
      But that's an issue. I agree nobody really knows. But the believers at least have small holdings. Where as skeptics give reasons, which may be true, but only time will tell. May be search for an Ethereum contract, which allows betting against Bitcoin. Solidity new hack discovery permitting, you can make a small killing. Would be nice way of making a point with some skin in the game.
      - 0bsidian 9y ago
        You don't even need a smart contract, the CME will be starting to sell cash settled BTC futures in two weeks: http://www.cmegroup.com/media-room/press-releases/2017/10/31/cme_group_announceslaunchofbitcoinfutures.html http://www.cmegroup.com/media-room/press-releases/2017/10/31...
martinko 9y ago
> Bitcoin is useless, you can't do anything with it, except buying and waiting that others buy after you so the price rises up: that's pretty much the definition of speculation. a) How is that different that how it was in the beginning? and b) I beg to disagree - Instantaneous global transfer of value as well as a store of value that cannot be (easily) confiscated seems like something that could amount to something useful.
- tigershark 9y ago
  Instantaneous? Are you really using bitcoin?In that case, are you spending 100$ per transaction?
  - nmj 9y ago
    You can easily be confirmed within approximately 10 minutes (the fastest possible time) for about $4 USD. The volume of Bitcoin (on chain) and competition to enter a block is healthy. It is nowhere near $100.
- chrischen 9y ago
  for b) centralized stores of value such as PayPal also offer instantaneous global transfer (at least among PayPal accounts). And Bitcoin current is not even instantaneous. As far as "easily confiscated" this is not true for fiat currencies. If you hold your cash in fiat currencies and use an account such as PayPal to hold small amounts for actual (even global) transactions, it's practically superior to Bitcoin.
  - moduspol 9y ago
    There's nothing instantaneous about PayPal. It just has the appearance of being instant. If they can revoke funds you've sent or received at any time (and they do), you haven't actually sent or received them. If it then takes days to get the funds where PayPal can't indiscriminately take them, then it takes days to actually send or receive money. Also--if you're going to hold your cash in fiat, be sure it's not in Venezuela, Zimbabwe, Cyprus, or India. And keep telling yourself issues like theirs can't happen with the fiat currency you're using.
cup-of-tea 9y ago
I share your disappointment as somebody else who wants a trustless electronic currency for the future. But what you describe is no different from any other investment. Why do people buy shares in a company? It could be because they want to influence the company's direction, but it's more likely that they want to sell those shares at some point in the future. Any system which lets you do this over a long period of time has value. Otherwise how would we save for pensions etc. when we can no longer work?
- alex_duf 9y ago
  At least when you buy a share you literally own part of the company. If you were to sell all of it, including all the possessions of the company, you would still get a share. Because a company has a value. I'm still struggling to define what's the value of BTC
  - cup-of-tea 9y ago
    Why does a company have value? Why does a currency have value? It's always just a bet that someone will buy it from you in the future. Yes, you get a share of the company, but if nobody wants to buy the company or its stock, then you have a share of something that nobody will buy.
- alexasmyths 9y ago
  "as somebody else who wants a trustless electronic currency for the future." + Uhm, why? Our current currencies are very useful as currencies. Nobody wants VISA charges, but that's a secondary issue, nothing to do with decentralization. "But what you describe is no different from any other investment." + No - not at all. Putting money in BTC is just speculation, it's not investing. It's not the same as buying stocks, bonds or real estate. When we invest, we make assertions about the future value of the stock. Also - can possibly take control over the company and direct it to create greater value.
  - cup-of-tea 9y ago
    > When we invest, we make assertions about the future value of the stock. Which is exactly how you described people "speculating" with Bitcoin. There is no difference.
koonsolo 9y ago
The people in Zimbabwe seem to be paying premium prices for Bitcoin just to get out of their hyperinflation.
189723423424 9y ago
>you can't create value out of thin air Wait, we are creating currency, not value. Do you know how the federal reserve works? It puts more money into the system from nowhere. >Bitcoin is useless, you can't do anything with it You can buy things with it, that is the point of money. The more it is adopted, the more you will be able to buy.
- alexasmyths 9y ago
  " we are creating currency, not value" + The point of any new tool or innovation is to add value. Without currency, we could not have an economy, ergo, currency creates value. + "Do you know how the federal reserve works? It puts more money into the system from nowhere." This is false and misleading. The Fed exchanges TBils for USD. It pulls one kind of asset off the market, and exchanges it with another, which is more liquid. It does this with specific objectives in mind. "You can buy things with it, that is the point of money." You can't buy jack with BTC. It can be used as a currency, but it is not, and never will be.
  - analog31 9y ago
    Without currency, we could not have an economy, ergo, currency creates value. In my view, this is a huge point. I hope this doesn't sound like quibbling, but I would expand the point by speculating that the functioning of a money system influences the overall prosperity of an economy. In other words, one economy could be more prosperous than another, simply based on which one has a "better" money system. In addition, like any other technology, people will use whatever money system is available to them, that works best for what they want to do. In countries with dysfunctional money systems, people try to move their wealth into assets that are denominated in dollars, euro's, or something like that. If someone doesn't believe that their local money, or dollars, will function for them under some scenario, they might move to bitcoins or gold. I suspect that bitcoins could fill in that void for some people. We don't know what our economy would look like without the major government money systems as they currently function.
almostApatriot1 9y ago
it's worse than useless. It consumes 30.14TWh a year of electricity for what?
- lamby 9y ago
  Reminds me of digging diamonds out of the ground...
  - deleted 9y ago
    [deleted]
- coffeeaddicted 9y ago
  Most electricity consuming gambling game out there. Join now or you miss all the fun of burning the world!
0bsidian 9y ago
I respectfully disagree with the idea that Bitcoin's killer-app is to be used as a currency for transactional purposes. I can't really think of many reasons why you would use crypto to pay for a coffee or a sandwich if you live in the West (or frankly, even most developing nations). On the other hand, I can definitely see the utility in a censorship-resistant digital medium to store wealth. To me, this latter use case has much, much more potential to serve the unbanked (as well as the banked). Some use cases I can think off the top of my head: (1) You are from Syria and need to flee war and escape into Europe – however bank transfers into Europe are almost impossible if you are a common Syrian. Bitcoin allows you to take your wealth with you, in your brain, as you escape across the border, by just memorising your twelve word private key. (2) You are from Venezuela or Zimbabwe – The government has issued capital controls and is devaluing currency by the day. You transfer your wealth into Bitcoin in order to offset capital erosion due to hyper-inflation. When the situation stabilises, you transfer your Bitcoin back into fiat. (3) You are Saudi billionaire Al-Waleed bin Talal. The government freezes all your assets in a political coup. If you have a portion of your wealth in Bitcoin, you could protect them from government expropriation and anonymously transfer them to associates or family members abroad. (4) You are whistleblower Julian Assance and have been cut off from the financial system as a way to censor your speech. Bitcoin allows you to have an unbreakable digital "Swiss bank account" that the authorities are not able to reach. This reminds me of Peter Thiel's recent words about Bitcoin [1]: "it's like a reserve form of money, it's like gold, and it's just a store of value. You don't need to use it to make payments." Reference: [1]: https://www.cnbc.com/2017/10/26/bitcoin-underestimated-peter-thiel-says.html https://www.cnbc.com/2017/10/26/bitcoin-underestimated-peter...
- timfrietas 9y ago
  Personally, I disagree with your premise and I do think the killer app for Bitcoin is to be transactional--unlike Ethereum you can't build anything on top of it, it's just "money" or "wealth" which do need to be spent, although you can think of the current incantation of Bitcoin as "wire transfers" (a few hours to a couple of days to get your money) instead of a "debit card" (instantaneous transactions). However, I do not at all understand why you are apparently being downvoted for a calm and logical counter argument supported with good use cases.
tardo99 9y ago
The wikipedia article for the "Bitcoin Mania of 2017-?" almost writes itself... c.f. Tulip Mania and The South Sea Bubble.
- cgmg 9y ago
  https://www.smithsonianmag.com/history/there-never-was-real-tulip-fever-180964915/ https://www.smithsonianmag.com/history/there-never-was-real-...
whataretensors 9y ago
A behind-the-scenes exchange could make all crypto accepted anywhere. Trading just needs to be fast and seamless. i.e. you swipe your card/phone, bitcoin(or alt) is subtracted, usd is given to merchant.
mbesto 9y ago
My favorite saying is "bitcoin is gold for millennials"
apexalpha 9y ago
>Guess what, you can't create value out of thin air. Bitcoin is useless, you can't do anything with it, except buying and waiting that others buy after you so the price rises up: that's pretty much the definition of speculation. Change out 'Bitcoin' for 'Gold' and you've just described a 'speculative bubble' that has been going for centuries. Value is arbitrary. Just like gold, Bitcoin might well just keep on rising and rising. Volatile, but valueble.
solean 9y ago
You can't create value out of thin air? What is software then?
panarky 9y ago
> Bitcoin is useless, you can't do anything with it HN used to have tremendous creative energy, with new ideas every day on how to disrupt entire dinosaur industries. We are the ones with the unique combination of ideas, skills and judgment to make it happen. I don't give a shit about the price of Bitcoin, but it's clear that cryptocurrencies and distributed ledgers are world-changing inventions. Wouldn't it be great to talk about how to change the world with these technologies rather than dump on those too short-sighted to see past the current exchange rate?
- ajr0 9y ago
  I wish I read Daemon and Freedom by Daniel Suarez years ago (only finished a month ago). in order for bitcoin to change the world I think it really needs to scale transaction value, I do imagine a world where there is no longer a need to exchange it into any currency because it is more valuable to just keep it in bitcoin and use that as the defacto currency. in regards to eth (Note I know _nothing_ about smart contracts) I was wondering if smart contracts could be used for friends to immediately split bills at restaurants for food so no sorting of anything needs to be done, as soon as the bill is provided the contract is enacted and everyone goes about their way. if this is a worthwhile idea it is free :-)
X86BSD 9y ago
Bitcoin is just a perfect example of the greater foo theory in action. Someone’s going to be left holding the bag.

by sunseb 9y ago

deleted 9y ago

[deleted]

callahad 9y ago

> Bitcoin is useless, you can't do anything with it There's a cafe down the street from me that accepts Bitcoin. I could literally buy a meal with it right now. It may not be rational, but it has actual utility.

testvox 9y ago
But with a 4 dollar transaction fee why would you use Bitcoin for such things?
- mrweasel 9y ago
  Why is there a transaction fee on Bitcoins? Who get the money? One of the argument for Bitcoin originally was no transaction fee, because there's no middleman.
  - megous 9y ago
    It was not the original argument. Search the original bitcoin paper for a word fee, the first occurance explains it.
  - apexalpha 9y ago
    Once all Bitcoin will be created the 'fee' will be what miners get for verifying transaction blocks. They also do now, but coupled with the creation of new bitcoins.
  - testvox 9y ago
    No there are middlemen they just aren't centralized. The miners get the fee, it's their incentive to mine (well that and new coin creation but new coin creation slows down and eventually stops so fees are the long term incentive).
- nrhk 9y ago
  Say you wanted to transfer $100,000. That transfer fee stays the same.
  - beefield 9y ago
    To be more precise, you want to transfer $100,000 worth (subject to value changes during the transaction) of BTC. If you want to transfer $100,000 using BTC, my current understanding is that you end up paying more (note also bid-ask spread in the market) and transacting more slowly than wire transfer all while taking exchange risk against BTC for a non-trivial amount of time.
    - nrhk 9y ago
      Depends on the state of the bitcoin network but the fee is the same. If you have 100k of bitcoin right now and needed to transfer it to someone, you can do it in one go with one flat fee that is the same regardless of your transaction amount. I pay no fee's to obtain bitcoin, ether but that shouldn't matter. We're talkign dollar to dollar transfers, btc to btc transfers, eth to eth transfers. Doing it in dollars is objectively worse. It takes more time, more money and raises more scrutiny. I've recently used ether to transfer over 5k to a friend with a fee a few cents and a transaction time of 40 seconds. You can't do that with dollars.
sunseb 9y ago
Like this man? "10,000 bitcoin bought 2 pizzas in 2010 — and now it'd be worth $20 million": http://mashable.com/2017/05/23/bitcoin-pizza-day-20-million http://mashable.com/2017/05/23/bitcoin-pizza-day-20-million
- patrickaljord 9y ago
  It's worth $100 million now.
- Yizahi 9y ago
  If he put for sale 10000 BTC today he would very likely receive a price of 2 pizza in USD.
sanmon3186 9y ago
Given that BTC transactions take time (and high fee), how does it work for cafes or any micro transactions of this kind?
- tom_mellior 9y ago
  It's been a while since I last used it in a physical place, but basically the store's or restaurant's payment system accepted the payment as soon as the transaction was broadcast over the network. In other words, payment was instantaneous. The system did not wait for a confirmation block. That's not unreasonable, since every transaction with nonzero fees was eventually confirmed, in those early days before the network got clogged up. Not sure how it would work now, but I think even now chances are that the transaction would eventually be confirmed, so the POS system could gamble on that and "accept" it if it includes some minimal fee.
- callahad 9y ago
  I don't have any BTC on hand, so I genuinely don't know. The barista I spoke with mentioned that they get four or five transactions per week, and they had a physical POS terminal for Bitcoin transactions, similar to the one CoinKite was producing a few years ago: http://blog.coinkite.com/post/76526284739/did-you-know-that-with-the-coinkite-terminal-you http://blog.coinkite.com/post/76526284739/did-you-know-that-...
- timfrietas 9y ago
  How it (generally) works now: intermediaries pay the restaurant in fiat the equivalent price in BTC on the time/day of the transaction. They facilitate the trade without the restaurant needing to worry about price fluctuations or digital currency exchanges. How it may work in the future: Off-blockchain processing solutions like the Lightning network (1) have been proposed to decentralize some degree of transactions. However, this inevitably takes some of the power away from the miners/those who make money off every transaction fee. This has in essence been the struggle/division behind many of the most recent forks or proposed forks; a tradeoff between scale and economics for those that are generating coins or facilitating transactions. The Bitcoin drama is far from over, and for it to be anything other than (primarily) a store of value in the longer term will require significant technical changes. In fact, at this point, no existing cryptocurrency can support the scale of, say, VISA. It's early days and the race to solve this problem (or fail) is a fascinating drama to watch. 1. https://cointelegraph.com/explained/lightning-network-explained https://cointelegraph.com/explained/lightning-network-explai...
beefield 9y ago
Out of curiosity, how much that would cost and how long it would take for the transaction confirm? I know, you can't know that for sure beforehand (what a wonderful property for a currency), but current best guess? (The last numbers I heard and may have misunderstood were more than 10 dollars and hours to confirm. That is negative utility to me, as in that case someone would need to literally pay me to use bitcoin for buying my coffee.)
- Klathmon 9y ago
  The dream of "buying a cup of coffee" with bitcoin is not realized right now. While it's not as bad as you point out, it's still not ideal. Fees for an average transaction regardless of the amount of bitcoin are $1-$2 USD unless you manually set fees lower, and time to confirm isn't normally an issue for most vendors, as they are fine with zero-confirmation transactions for small things (as long as it shows up in the mempool and the fee is high enough that it's probable it will eventually be confirmed, it's fine). And that's all assuming we don't hit a massive amount of congestion like happens every now and then. However in the future the lightning network will really solve this problem hopefully once and for all. Read the overview about how it works at [0] but the gist is that you can create a network of trustless "deferred" payments that you and another party can agree on new balances for each of you off the blockchain, and at any point either of you can "settle" the latest balance on the blockchain. And by building a network of these "deferred" payment channels, you can pay parties that you don't even have a direct channel with by routing it through others that you do have a channel with. It was a pretty mindblowing idea once I was able to grasp it. I really encourage anyone that is even a little curious about it to read the website at [0]. The abstract is very approachable, and the actual paper does a good job walking you through the details. [0] http://lightning.network/ http://lightning.network/
  - beefield 9y ago
    In addition to assuming that Lightning will one day materialize, you also need to assume that people are willing to store non-trivial amount of their wealth in an inherently volatile asset whose only reason to appreciate in value (by definition) is there to be more people willing to buy and hold the asset with even higher prices (cough, ponzi, cough). (Because if the people are not willing to store their wealth in bitcoin, lightning will make the problme worse by needing more than one transaction in blockchain to achive one actual transaction)
chrischen 9y ago
I could probably pay for it in backrubs too, but that doesn't make backrubs a useful currency.
- slumberlust 9y ago
  That depends greatly on the quality of your rubs.
stupidcar 9y ago
The problem is, the utility has not grown by anything like enough, whereas the speculative side has exploded. And the more Bitcoin is used as speculative instrument, the worse it becomes as an actual currency or a long-term store of value. As a regular consumer, you need to know that the money in your wallet one day is going to be worth roughly the same the next. Likewise, you need to know the gold you're buying to put in your vault isn't being sold at a price 1000x its long-term worth. Yes, in the short term, it's nice if you have some Bitcoins and they keep increasing in value, but does anybody really think the current surges are anything other than a bubble? If you accept that, then you have to accept that there will eventually be a correction. In which case, accepting Bitcoin in lieu of traditional currencies is like a a cafe letting customer pay for goods using a collateralised debt obligation or some other risky security. If Bitcoin is going to make it as a digital currency, or even just as the "digital gold" that some of its adherents now seem to settling for, then it needs to get past this bubble phase. And the quicker the better, because the harder the correction, the more wary people are going to be of going anywhere near it afterwards, and the more likely that governments are to introduce hefty regulation to avoid a second bubble.

sschueller 9y ago

I see bitcoin as the foundation stone, paving the way for better blockchains like ethereum. Bitcoin itself will never be practical enough for daily transactions, it is more like gold, a store of value.

deleted 9y ago
[deleted]

0xcafecafe 9y ago

Exactly, it is the tulip craze of our time and a textbook case of https://en.wikipedia.org/wiki/Greater_fool_theory https://en.wikipedia.org/wiki/Greater_fool_theory

patrickaljord 9y ago
There never was a real tulip fever. https://www.smithsonianmag.com/history/there-never-was-real-tulip-fever-180964915/ https://www.smithsonianmag.com/history/there-never-was-real-...
0bsidian 9y ago
If it's so obvious, why don't you buy a futures contract to short it and reap your rewards in a year or two? You can make millions of dollars if you're right.
- 0xcafecafe 9y ago
  I cannot as the market can remain irrational for a far longer time than I can remain solvent.
  - aws_ls 9y ago
    But that's an issue. I agree nobody really knows. But the believers at least have small holdings. Where as skeptics give reasons, which may be true, but only time will tell. May be search for an Ethereum contract, which allows betting against Bitcoin. Solidity new hack discovery permitting, you can make a small killing. Would be nice way of making a point with some skin in the game.
    - 0bsidian 9y ago
      You don't even need a smart contract, the CME will be starting to sell cash settled BTC futures in two weeks: http://www.cmegroup.com/media-room/press-releases/2017/10/31/cme_group_announceslaunchofbitcoinfutures.html http://www.cmegroup.com/media-room/press-releases/2017/10/31...

martinko 9y ago

> Bitcoin is useless, you can't do anything with it, except buying and waiting that others buy after you so the price rises up: that's pretty much the definition of speculation. a) How is that different that how it was in the beginning? and b) I beg to disagree - Instantaneous global transfer of value as well as a store of value that cannot be (easily) confiscated seems like something that could amount to something useful.

tigershark 9y ago
Instantaneous? Are you really using bitcoin?In that case, are you spending 100$ per transaction?
- nmj 9y ago
  You can easily be confirmed within approximately 10 minutes (the fastest possible time) for about $4 USD. The volume of Bitcoin (on chain) and competition to enter a block is healthy. It is nowhere near $100.
chrischen 9y ago
for b) centralized stores of value such as PayPal also offer instantaneous global transfer (at least among PayPal accounts). And Bitcoin current is not even instantaneous. As far as "easily confiscated" this is not true for fiat currencies. If you hold your cash in fiat currencies and use an account such as PayPal to hold small amounts for actual (even global) transactions, it's practically superior to Bitcoin.
- moduspol 9y ago
  There's nothing instantaneous about PayPal. It just has the appearance of being instant. If they can revoke funds you've sent or received at any time (and they do), you haven't actually sent or received them. If it then takes days to get the funds where PayPal can't indiscriminately take them, then it takes days to actually send or receive money. Also--if you're going to hold your cash in fiat, be sure it's not in Venezuela, Zimbabwe, Cyprus, or India. And keep telling yourself issues like theirs can't happen with the fiat currency you're using.

cup-of-tea 9y ago

I share your disappointment as somebody else who wants a trustless electronic currency for the future. But what you describe is no different from any other investment. Why do people buy shares in a company? It could be because they want to influence the company's direction, but it's more likely that they want to sell those shares at some point in the future. Any system which lets you do this over a long period of time has value. Otherwise how would we save for pensions etc. when we can no longer work?

alex_duf 9y ago
At least when you buy a share you literally own part of the company. If you were to sell all of it, including all the possessions of the company, you would still get a share. Because a company has a value. I'm still struggling to define what's the value of BTC
- cup-of-tea 9y ago
  Why does a company have value? Why does a currency have value? It's always just a bet that someone will buy it from you in the future. Yes, you get a share of the company, but if nobody wants to buy the company or its stock, then you have a share of something that nobody will buy.
alexasmyths 9y ago
"as somebody else who wants a trustless electronic currency for the future." + Uhm, why? Our current currencies are very useful as currencies. Nobody wants VISA charges, but that's a secondary issue, nothing to do with decentralization. "But what you describe is no different from any other investment." + No - not at all. Putting money in BTC is just speculation, it's not investing. It's not the same as buying stocks, bonds or real estate. When we invest, we make assertions about the future value of the stock. Also - can possibly take control over the company and direct it to create greater value.
- cup-of-tea 9y ago
  > When we invest, we make assertions about the future value of the stock. Which is exactly how you described people "speculating" with Bitcoin. There is no difference.

koonsolo 9y ago

The people in Zimbabwe seem to be paying premium prices for Bitcoin just to get out of their hyperinflation.

189723423424 9y ago

>you can't create value out of thin air Wait, we are creating currency, not value. Do you know how the federal reserve works? It puts more money into the system from nowhere. >Bitcoin is useless, you can't do anything with it You can buy things with it, that is the point of money. The more it is adopted, the more you will be able to buy.

alexasmyths 9y ago
" we are creating currency, not value" + The point of any new tool or innovation is to add value. Without currency, we could not have an economy, ergo, currency creates value. + "Do you know how the federal reserve works? It puts more money into the system from nowhere." This is false and misleading. The Fed exchanges TBils for USD. It pulls one kind of asset off the market, and exchanges it with another, which is more liquid. It does this with specific objectives in mind. "You can buy things with it, that is the point of money." You can't buy jack with BTC. It can be used as a currency, but it is not, and never will be.
- analog31 9y ago
  Without currency, we could not have an economy, ergo, currency creates value. In my view, this is a huge point. I hope this doesn't sound like quibbling, but I would expand the point by speculating that the functioning of a money system influences the overall prosperity of an economy. In other words, one economy could be more prosperous than another, simply based on which one has a "better" money system. In addition, like any other technology, people will use whatever money system is available to them, that works best for what they want to do. In countries with dysfunctional money systems, people try to move their wealth into assets that are denominated in dollars, euro's, or something like that. If someone doesn't believe that their local money, or dollars, will function for them under some scenario, they might move to bitcoins or gold. I suspect that bitcoins could fill in that void for some people. We don't know what our economy would look like without the major government money systems as they currently function.

almostApatriot1 9y ago

it's worse than useless. It consumes 30.14TWh a year of electricity for what?

lamby 9y ago
Reminds me of digging diamonds out of the ground...
- deleted 9y ago
  [deleted]
coffeeaddicted 9y ago
Most electricity consuming gambling game out there. Join now or you miss all the fun of burning the world!

0bsidian 9y ago

I respectfully disagree with the idea that Bitcoin's killer-app is to be used as a currency for transactional purposes. I can't really think of many reasons why you would use crypto to pay for a coffee or a sandwich if you live in the West (or frankly, even most developing nations). On the other hand, I can definitely see the utility in a censorship-resistant digital medium to store wealth. To me, this latter use case has much, much more potential to serve the unbanked (as well as the banked). Some use cases I can think off the top of my head: (1) You are from Syria and need to flee war and escape into Europe – however bank transfers into Europe are almost impossible if you are a common Syrian. Bitcoin allows you to take your wealth with you, in your brain, as you escape across the border, by just memorising your twelve word private key. (2) You are from Venezuela or Zimbabwe – The government has issued capital controls and is devaluing currency by the day. You transfer your wealth into Bitcoin in order to offset capital erosion due to hyper-inflation. When the situation stabilises, you transfer your Bitcoin back into fiat. (3) You are Saudi billionaire Al-Waleed bin Talal. The government freezes all your assets in a political coup. If you have a portion of your wealth in Bitcoin, you could protect them from government expropriation and anonymously transfer them to associates or family members abroad. (4) You are whistleblower Julian Assance and have been cut off from the financial system as a way to censor your speech. Bitcoin allows you to have an unbreakable digital "Swiss bank account" that the authorities are not able to reach. This reminds me of Peter Thiel's recent words about Bitcoin [1]: "it's like a reserve form of money, it's like gold, and it's just a store of value. You don't need to use it to make payments." Reference: [1]: https://www.cnbc.com/2017/10/26/bitcoin-underestimated-peter-thiel-says.html https://www.cnbc.com/2017/10/26/bitcoin-underestimated-peter...

timfrietas 9y ago
Personally, I disagree with your premise and I do think the killer app for Bitcoin is to be transactional--unlike Ethereum you can't build anything on top of it, it's just "money" or "wealth" which do need to be spent, although you can think of the current incantation of Bitcoin as "wire transfers" (a few hours to a couple of days to get your money) instead of a "debit card" (instantaneous transactions). However, I do not at all understand why you are apparently being downvoted for a calm and logical counter argument supported with good use cases.

tardo99 9y ago

The wikipedia article for the "Bitcoin Mania of 2017-?" almost writes itself... c.f. Tulip Mania and The South Sea Bubble.

cgmg 9y ago
https://www.smithsonianmag.com/history/there-never-was-real-tulip-fever-180964915/ https://www.smithsonianmag.com/history/there-never-was-real-...

whataretensors 9y ago

A behind-the-scenes exchange could make all crypto accepted anywhere. Trading just needs to be fast and seamless. i.e. you swipe your card/phone, bitcoin(or alt) is subtracted, usd is given to merchant.

mbesto 9y ago

My favorite saying is "bitcoin is gold for millennials"

apexalpha 9y ago

>Guess what, you can't create value out of thin air. Bitcoin is useless, you can't do anything with it, except buying and waiting that others buy after you so the price rises up: that's pretty much the definition of speculation. Change out 'Bitcoin' for 'Gold' and you've just described a 'speculative bubble' that has been going for centuries. Value is arbitrary. Just like gold, Bitcoin might well just keep on rising and rising. Volatile, but valueble.

solean 9y ago

You can't create value out of thin air? What is software then?

panarky 9y ago

> Bitcoin is useless, you can't do anything with it HN used to have tremendous creative energy, with new ideas every day on how to disrupt entire dinosaur industries. We are the ones with the unique combination of ideas, skills and judgment to make it happen. I don't give a shit about the price of Bitcoin, but it's clear that cryptocurrencies and distributed ledgers are world-changing inventions. Wouldn't it be great to talk about how to change the world with these technologies rather than dump on those too short-sighted to see past the current exchange rate?

ajr0 9y ago
I wish I read Daemon and Freedom by Daniel Suarez years ago (only finished a month ago). in order for bitcoin to change the world I think it really needs to scale transaction value, I do imagine a world where there is no longer a need to exchange it into any currency because it is more valuable to just keep it in bitcoin and use that as the defacto currency. in regards to eth (Note I know _nothing_ about smart contracts) I was wondering if smart contracts could be used for friends to immediately split bills at restaurants for food so no sorting of anything needs to be done, as soon as the bill is provided the contract is enacted and everyone goes about their way. if this is a worthwhile idea it is free :-)

X86BSD 9y ago

Bitcoin is just a perfect example of the greater foo theory in action. Someone’s going to be left holding the bag.