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The volatility alone wouldn't be a huge problem if the transactions were quick, apart from having to constantly re-price the goods (not a big deal with an autom

• colordrops 9y ago
  > I think this is what will ultimately bring Bitcoin down People have been saying that for years. It serves purposes other than buying and selling goods, and in fact almost no one uses it to buy things.
  • i_cant_speel 9y ago
    What other purposes is it used for?
    • efdee 9y ago
      Gambling.
      • posterboy 9y ago
        gambling is a good, a bad good, mostly, but nevertheless.
    • deleted 9y ago
      [deleted]
    • deadmetheny 9y ago
      Buying drugs and ransomware.
    • disordinary 9y ago
      Right now it's only use apart from being an investment medium is to convert currency to alt coins, alt coins is where the innovation is and where the real use of distributed ledgers come into play.
    • colordrops 9y ago
      International money transfer and store of value that can't be meddled with by another entity.
      • johncolanduoni 9y ago
        Various governments have done a pretty good job of meddling with it thus far.
        • colordrops 9y ago
          How exactly have they meddled with it?
          • MarkMc 9y ago
            By threatening to send people who trade Bitcoin to jail: https://www.coindesk.com/bangladesh-outlaw-bitcoin-jail/ https://www.coindesk.com/bangladesh-outlaw-bitcoin-jail/
            • colordrops 9y ago
              That's meddling with the person, not the transaction. The protocol is unassailable. Anyway, if you really want there are mechanisms for anonymous transactions over BTC.
  • jsmthrowaway 9y ago
    That’s an entirely different narrative about Bitcoin, though, then what was presented to us when it was seeking adoption. The messaging was literally: use this to buy things. Maybe we all got it wrong, but a lot of people did, then; we must never forget the infamous Bitcoin pizzas. https://twitter.com/bitcoin_pizza https://twitter.com/bitcoin_pizza I’ve noticed this trend lately of rewriting what Bitcoin is for because I assure you, it was presented as the new cash for a long, long time. We were supposed to see Bitcoin ATMs and paying for daily sundries with Bitcoin. Then that became difficult, we are starting to see the brave adopters drop out of using it that way, and suddenly it’s an investment vehicle and store of value and nobody really buys anything with it and that’s been the intent all along. People were saying those things for years because Bitcoin proponents were telling us. It’s not like people arrived at that conclusion erroneously.
    • colordrops 9y ago
      I don't think most reputable proponents have been saying that for years though. In any case, the internet was designed as a communication medium that could survive nuclear war. That's how it was sold by its proponents. So what.
      • jsmthrowaway 9y ago
        > I don't think most reputable proponents have been saying that for years though. Define reputable. > Announcing the first release of Bitcoin, a new electronic cash system http://web.archive.org/web/20090131115053/http://bitcoin.org:80/ http://web.archive.org/web/20090131115053/http://bitcoin.org... > Instant transactions for points-of-sale http://web.archive.org/web/20130805223235/http://bitcoin.org/en/bitcoin-for-businesses http://web.archive.org/web/20130805223235/http://bitcoin.org... (That verbiage lasted most of 2013, but was removed a couple days after this capture, presumably because payments were starting to become less "instant.") > Bitcoin is a new payment system, independent from the traditional financial sector, and this could provide resilience to the economy in case of a crisis, as it creates a parallel payment system. Understanding Bitcoin: Cryptography, Engineering, and Economics by Pedro Franco, 2010, pp. 26. > You can purchase video games, gifts, books, servers, and alpaca socks. [...] Bitcoins are a great way for small businesses and freelancers to get noticed. It doesn't cost anything to start accepting them [...] and you'll get additional business from the Bitcoin economy. https://www.youtube.com/watch?v=Um63OQz3bjo https://www.youtube.com/watch?v=Um63OQz3bjo Bitcoin has literally been presented as a replacement for cash payments since day 1. I could go on, and on. That history is now being rewritten, and I think it’s important to understand why. Bitcoin set out to do one thing, is failing at that one thing, and I’m discouraged to see people rewrite the narrative rather than own it and say it didn’t work for that. And you've mixed up your history: the research grants into the Internet were funded for that purpose, but it quickly morphed into an alternative usage once the new abilities were seen. Nobody went out and pulled out full page newspaper ads with that intent for its design, or otherwise heralded the Internet as such.
• vxNsr 9y ago
  Right, that is really the other side of what I didn't say. I don't expect Steam to be holding onto bitcoin for very long but if even for the short amount of time they're holding it the price is fluctuating and doesn't offer an equivalent price in USD from the time the user presses pay to the time the transaction is processed, on top of what can amount to a 20% fee it's simply not currency. They'd be better off allowing people to pay them in stocks sold on the NYSE and NASDAQ.
  • em3rgent0rdr 9y ago
    I wish someone invented a currency that was a percentage of the stock market index. Maybe blockchain could help with this...
    • adambyrtek 9y ago
      That's more or less what ETFs do.
      • em3rgent0rdr 9y ago
        I know what an ETF and an Index Fund is (and that is where most of my money is held). My point was that would be great if had such a currency (i.e. is fungible, commonly accepted as a medium of exchange, and is easy to carry & transact) as opposed to something stuck in your brokerage account.
      • astura 9y ago
        ETFs are not currency...
  • Laforet 9y ago
    Steam does not hold onto BTC, BitPay collect the user's payment, tells Steam to release the order and writes a USD.cheque to Valve once in a while after taking their cut. The system worked until network congestion and market volatility made it impractical. The only major online retailer that actually keep their own BTC is Overstock.
• epicide 9y ago
  Serious question: even if a currency is only good for exchanging for other currencies, doesn't that still make it a currency? In other words, even if you can't go buy clothing or games or hosting with BTC, doesn't the fact that you can exchange it for $LOCAL_CURRENCY (which can be used to buy those things) give it value? Basically, a meta-currency or currency of currencies, if you will. Edit: I realize we are saying the problem is a delay and pinning down the real value at a given time, but it sounds like that doesn't matter so much as the volatility itself, which should eventually settle. If delay were really a problem, then I would think stocks wouldn't be a thing.
  • drabiega 9y ago
    Where then, would you draw the line between a currency and a non-currency asset?
    • azernik 9y ago
      Liquidity, probably - how fast can you exchange how much of it. Though I do personally think there's a lot more to a currency than that.
    • stephengillie 9y ago
      Everything is a currency, if you barter hard enough.
      • librvf 9y ago
        Barter is, by definition, an exchange of goods without using money. In other words if you have to barter to get rid of it, it's not currency.
    • librvf 9y ago
      When it hits all of: Acceptability Durability Divisibility Stability Portability (Elasticity) If you can't spend it easily, it's not a (functioning) currency. If it spoils or decays within your lifetime it's not a currency. If it's not something you can divide in order to make payments of a more-or-less arbitrary amount, it's not a currency. If you can't predict how much of the asset you will need to pay your bills next month, it's not a currency If you can't bring it with you to the place where the exchange takes place, it's not a currency. If you can't obtain capital investment in a currency because the currency itself is more valuable than anything you could produce, then it's not a (good long term) currency. This last one is in parens because it one only matters in a growing economy. A deflationary currency can still otherwise function as a viable medium of exchange, but eventually, lack of availability for new entrants will mean that entrepreneurs will begin looking to do business in alternate currencies.
• webkike 9y ago
  If the transactions were quick and Bitcoin were usable, I'd argue that the price wouldn't be fluctuating
• spmurrayzzz 9y ago
  >However, getting the transaction confirmed can take many hours at the times of high demand and then it still fails because thanks to the volatility, the transaction fees have gone up in the meantime. That is creating unsustainable problems for the customer support and makes BTC unusable for actual payments. This is precisely what Lightning aims to solve, and at least anecdotally so far, has done so in the case of LTC. (Though its hard to compare LTC to a chain with a market cap of over $200b even if the former has a skyrocketing trade volume)
  • jordigh 9y ago
    Having used bitcoins as money, I really want the confirmation times and transaction fees to go back to what they were a year or two ago. I keep hearing that this mythical lightning will fix things, and I sure hope it does. I want internet money. I want to be able to send money to anyone, anywhere in the world, at the drop of a hat, as easy as email. I don't care about speculation or getting rich or avoiding taxes or sticking it to the man or anything like that. I just want to have a convenient way to get tipped on IRC by anyone at any time and to be able to repay in kind, to anyone at any time.
    • Jach 9y ago
      10 minutes isn't really the drop of a hat. But why do you need your first confirmation in approximately the next 10 minutes so badly anyway, especially when it shows up in the mempool pretty much immediately? I paid around 20 cents on an approximately $200 transaction a couple weekends ago, it got verified after about 4 hours but I was expecting longer, it would have been fine. In the last 24 hours, 36,332 transactions were verified with at most 30 cents in fees. (https://bitcoinfees.earn.com/ https://bitcoinfees.earn.com/) The estimated time bounds for a transaction in that pool are 25 minutes to 14 hours.
      • TD-Linux 9y ago
        Just knowing it's in your mempool isn't a very strong guarantee that the payment will go through. Probably fine for reversible digital goods, but not much else. Some systems pay miners to look at their block templates to get a better assurance it will confirm (and that it won't be replaced), but it's still not very good, and given that Lightning is now running on mainnet there's little value in continuing in that direction.
• m3kw9 9y ago
  If you treat it like gold(store of value) then having a service that makes it liquid is just a bonus. Is like expecting to be able to purchase something using stock.
  • deleted 9y ago
    [deleted]
  • masklinn 9y ago
    The point of a store of value is to have a stable, well, value. Either because the value is entirely intrinsic or because the demand is very stable. Bitcoin is no more a store of value than tulips were. Bitcoin is a speculative product, not a store of value.
  • greenhouse_gas 9y ago
    A store of value is something which you can be sort-of sure that people will want it in X years (with the longer the X, the better). Gold has been valued since, I don't know, before the Greeks. What are the chances that tomorrow gold will go completely out of style (say gold will be worth no more than copper)? What about BitCoin? Can you put money in BC and hide it away?
• tbabb 9y ago
  > The volatility wouldn't be a huge problem I am having trouble fathoming why you think that.
• pera 9y ago
  Does Valve really needs more than 0 confirmations? double-spending doesn't seems like a big issue for them since Steam is DRM and they have some level of control over the software people have in their libraries (and total control in the case of online games). If the concern is whether some people would just download games, double-spend before getting one confirmation and then keep Steam offline forever (or copy the game files from the steam folder), I think people can already do something similar as they let users "return" games during the firsts 24 hours after the purchase.
  • thinkloop 9y ago
    The problem with zero conf now is that the transaction may never get through. Blocks are full so often that if the fee isn't high enough the tx might stay stuck in the mempool for weeks until the machine is rebooted and the tx is lost forever.
    • pera 9y ago
      Extremely low tx fees may never get into a block, but I just checked the the current price for a target of 24hs max (the same window time that fiat users currently have for returns) and it shouldn't be more than $0.35 USD for a simple 1 to 1 transaction (14 sat/byte). I know that this still isn't good, specially when you may be sending just $5 for some cheap game, but it's not that terrible either in my opinion...
      • Laforet 9y ago
        Problem is that the minimum fee for 24hr target could change a lot in an hour or less because some news story happened or simply when enough people noticed a lull in fees and decided to move their fees when it's still cheap. In that event 24hrs coild easily turn to days. Wallet developers and payment portals gets a lot of flak for overcharging fees, but ultimately it is still preferrable to using a conservative estimate and deal with the likely support call when the payment fails to confirm, and there is nothing they can do but watch it get bounced between nodes.
• makomk 9y ago
  It's actually impossible to reliably get a transaction confirmed in the 15 minutes that BitPay (who they used) is willing to lock in an exchange rate for, regardless of load on the network. The earliest a transaction can confirm is on the next block, and there's about a 25% chance no block will be mined by then.
• derriz 9y ago
  Eh? The volatility is a HUGE problem for bitcoin as a currency. If I run a small business, accepting payment in bitcoin just creates risk. The state of my business not only depends on the quality and success of my product/service but also on the volatility of bitcoin because by accepting bitcoin I am forced to effectively take a long position on BTC. The price could crash by 25% before I sell the bitcoin and now I've a cash-flow problem - struggling to pay wages and rent - even though my business is successful in that I made a profit on selling my products or services. The purchaser of my services is effectively on the other side of this trade and is exposed to the opposite risk wrt to BTC/USD. The only way for the two parties to minimize this risk would be for the customer to convert fiat currency into bitcoin just before paying, and then for the vendor to convert the bitcoin back immediately on receipt. With high spreads and transaction costs, using bitcoin in this manner is incredibly expensive and makes no business sense.
  • Bromlife 9y ago
    Exactly. Until we pay rent, wages & stock with Bitcoin, it's essentially just digital gold bullion. You'd be an idiot to pay for any service with Bitcoin. A million dollar pizza makes for a great news story, but it would suck knowing that you effectively let go of millions of dollars just to buy a pizza. Bitcoin holders are disincentivized from spending it.
    • ForHackernews 9y ago
      It's almost like being inherently deflationary is a negative property for a currency to have...but that can't be true, because lots of cryptobugs have explained to me at great length why this is actually Good For Bitcoin.
      • deleted 9y ago
        [deleted]
  • totalZero 9y ago
    How does one take a short position in Bitcoin?
• BoiledCabbage 9y ago
  > and makes BTC unusable for actual payments How ironic..
• LsDmT 9y ago
  People seem to forget Bitcoin is still in early "alpha" stages. Transaction times, fees, and even stable price will come IF it proves to be a long lasting means of exchange. This time next year tx times and fees will be solved with the lightning network - today the first text was done on chain. This is still early times
• mr_toad 9y ago
  The possibility of goods or services being returned or disputed at a later date creates risk even when the initial transactions are instant.
• puranjay 9y ago
  My biggest issue with BTC and the reason why I've never been bullish on them, despite owning a couple early on
• teekert 9y ago
  It's just a sign that there are technical challenges. This can be solved with adaptations in the protocol (forks) I guess.