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I’m not sold on Bitcoin but I don’t agree with your definition of what it needs to be successful. There is no reason that actual bitcoin end-users need to deal

I’m not sold on Bitcoin but I don’t agree with your definition of what it needs to be successful. There is no reason that actual bitcoin end-users need to deal directly in bitcoin. If Bitcoin were to ever become a major currency, a big if, there would be financial institutions (banks) issuing instruments (physical or digital notes) backed by real bitcoins held by those institutions. Real bitcoin transactions would be mostly performed between such institutions, or anyone else willing to pay the higher transaction fees. Most people would have their needs perfectly served by relying on bitcoin banks, at least for performing frequent transactions. Though they might very well seek to hold large sums directly in BTC.

spookthesunset 9y ago
Bitcoin and The Blockchain are only useful when you absolutely can't trust anybody but yourself. Why would financial institutions need Bitcoin and its immense overhead when they all can use the law as a tool to ensure adequate trust? If they can trust each other at that level, all they need is a simple database. In other words, "financial institutions" have no need for the blockchain. Want proof? You think the NASDAQ uses anything more than a (fancy, probably very high priced, extremely robust) database to store its stuff? They deal with all kinds of people who are actively trying to fuck them over every day and every second. They have no need for the blockchain. Neither does any other "financial institution".
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- pseudozach 9y ago
  What if russia and china decide to start their own global trade system based on something. http://www.zerohedge.com/news/2017-12-02/russia-china-and-brics-new-gold-trading-network http://www.zerohedge.com/news/2017-12-02/russia-china-and-br... And they don't trust eachother because well why would they. Would they have a use for a global, distributed, trustless system to keep inventory?
theWatcher37 9y ago
This defeats the entire purpose of bitcoin. The goal is a decentralized currency that isn’t controlled by shady political interests, and can reasonably replace normal currency. Why would you want Bank 2.0?
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- maehwasu 9y ago
  Bank 2.0 could also run its ledger of debts and credits on a public/easily auditable blockchain, and make a lot of guarantees that Bank 1.0 can't.
- marcoperaza 9y ago
  There will always be derivatives of underlying assets. Preventing that is not the “entire point” of bitcoin. Replacing the underlying asset, currently fiat currency, is the point.
- PKop 9y ago
  No it doesn't. The purpose of Bitcoin is sound money.. A finite currency immune to governments' and central banks' desire to devalue currency for debt financing. Bitcoin is more scarce and therefore better store of value than any fiat currency could ever be. Do you not understand second layer solutions do not put your Bitcoin at risk? You commit to a payment channel which defaults to closing the channel according to original amounts when opened.. if the other party doesn't follow through. Again, your funds are not at risk so it's not like a bank, and there's no fractional reserve nor devaluing, so the SOV use case is preserved. Not at all like current fiat money system.
  - marcoperaza 9y ago
    You can certainly have fractional reserve banking in a Bitcoin financial system, just as we did under the gold standard. Banks would give you an incentive to deposit BTC with them (could be interest rates or lower transactions fees) and then lend out some percent of those deposits. Voila, FRB and money supply growth.

spookthesunset 9y ago

Bitcoin and The Blockchain are only useful when you absolutely can't trust anybody but yourself. Why would financial institutions need Bitcoin and its immense overhead when they all can use the law as a tool to ensure adequate trust? If they can trust each other at that level, all they need is a simple database. In other words, "financial institutions" have no need for the blockchain. Want proof? You think the NASDAQ uses anything more than a (fancy, probably very high priced, extremely robust) database to store its stuff? They deal with all kinds of people who are actively trying to fuck them over every day and every second. They have no need for the blockchain. Neither does any other "financial institution".

deleted 9y ago
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pseudozach 9y ago
What if russia and china decide to start their own global trade system based on something. http://www.zerohedge.com/news/2017-12-02/russia-china-and-brics-new-gold-trading-network http://www.zerohedge.com/news/2017-12-02/russia-china-and-br... And they don't trust eachother because well why would they. Would they have a use for a global, distributed, trustless system to keep inventory?

theWatcher37 9y ago

This defeats the entire purpose of bitcoin. The goal is a decentralized currency that isn’t controlled by shady political interests, and can reasonably replace normal currency. Why would you want Bank 2.0?

deleted 9y ago
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maehwasu 9y ago
Bank 2.0 could also run its ledger of debts and credits on a public/easily auditable blockchain, and make a lot of guarantees that Bank 1.0 can't.
marcoperaza 9y ago
There will always be derivatives of underlying assets. Preventing that is not the “entire point” of bitcoin. Replacing the underlying asset, currently fiat currency, is the point.
PKop 9y ago
No it doesn't. The purpose of Bitcoin is sound money.. A finite currency immune to governments' and central banks' desire to devalue currency for debt financing. Bitcoin is more scarce and therefore better store of value than any fiat currency could ever be. Do you not understand second layer solutions do not put your Bitcoin at risk? You commit to a payment channel which defaults to closing the channel according to original amounts when opened.. if the other party doesn't follow through. Again, your funds are not at risk so it's not like a bank, and there's no fractional reserve nor devaluing, so the SOV use case is preserved. Not at all like current fiat money system.
- marcoperaza 9y ago
  You can certainly have fractional reserve banking in a Bitcoin financial system, just as we did under the gold standard. Banks would give you an incentive to deposit BTC with them (could be interest rates or lower transactions fees) and then lend out some percent of those deposits. Voila, FRB and money supply growth.