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> Bitcoin is turning 10. It all depends on where you start counting. In 2008 it was just Satoshi and a few cypherpunks. I would argue it looked a lot like Arp

> Bitcoin is turning 10. It all depends on where you start counting. In 2008 it was just Satoshi and a few cypherpunks. I would argue it looked a lot like Arpanet [0]. So Fast forward 10 years from 1973 ... and was the internet really useful in 1983? On January 1st 1983, "every machine connected to ARPANET had to use TCP/IP. TCP/IP became the core Internet protocol and replaced NCP entirely." [1] ... hardly a huge commercial success at that point. [0] https://en.wikipedia.org/wiki/ARPANET https://en.wikipedia.org/wiki/ARPANET [1] https://www.davesite.com/webstation/net-history2.shtml https://www.davesite.com/webstation/net-history2.shtml

acdha 9y ago
I don't think that comparison holds so tightly, but if it did it seems to make it worse: ARPANET had significant dependency delays in availability since computers cost a fortune, modems were slow, and you had to pay by the minute for phone calls. In contrast, despite Bitcoin being available to everyone on the first day most people have never had a reason to use it other than speculation. That said, there were still plenty of ARPANET users in the early days if you look at the subset of people for whom network access was an option. The benefits of email were obvious and group forums like Usenet (1980[1]) had similar quick adoption, at least in technical or academic fields where communicating with people outside of your location was important. Similarly, FTP (1980[2]) had clear value and the pricing made sense more often than it might have seemed since all of the other alternatives cost money, too. The other thing to remember is that this wasn't happening in a vacuum — while the internet was emerging, there was popular mainstream usage for companies like The Source, CompuServ, etc. starting in the late 1970s[3] and so again there was clearly a business opportunity if you could bring the access costs down. The number of people willing to pay by the minute to chat, shop, etc. suggested that an even large number of people would be interested as that per-minute rate dropped. It's that last part which makes me question the current valuations: even if you assume that all of the operational problems were solved with Bitcoin, it's hard to see what value it has to the ordinary person beyond possibly reclaiming the ~3% overhead of a credit card transaction — and that's assuming that VISA, et al. wouldn't just lower their rates to beat whatever the operational cost + fraud insurance costs ended up being for Bitcoin. 1. https://en.wikipedia.org/wiki/Usenet#History https://en.wikipedia.org/wiki/Usenet#History 2. https://tools.ietf.org/html/rfc765 https://tools.ietf.org/html/rfc765 3. There's a great series starting with https://www.filfre.net/2017/10/a-net-before-the-web-part-1-the-establishment-man-and-the-magnificent-rogue/ https://www.filfre.net/2017/10/a-net-before-the-web-part-1-t...
- krrrh 9y ago
  > and that's assuming that VISA, et al. wouldn't just lower their rates They easily could, their current rates contribute a lot toward cashback and points rewards and other marketing programs. Australia regulated a cap on rates at 0.4% iirc, and Visa still covered its costs.
  - acdha 9y ago
    Their profit margins seem like a good estimate for how low they could go without much pain, and given the size of the revenue stream I’m sure they could go lower.
    - krrrh 9y ago
      It’s not just their profits because they spend a good portion of their revenue on customer acquisition and retention. We may have a more stable economy if there was less customer acquistiin in the consumer credit space.
- alphydan 9y ago
  It seems we are both cherry picking to back up our beliefs. Just to show the other side of the coin: > the number of [Usenet] hosts nearly doubled to 940 in 1984. More than 100 newsgroups existed, more than 20 devoted How does that compare to the number of Bitcoin miners today? or the number of nodes (11,000)? or the number of users (>30M)? > people have never had a reason to use it other than speculation. I did. I paid small amounts for small jobs in various countries of the world with nearly zero fees. (Back in 2013). Had I used Paypal, 50% of the amount sent would have been eaten up by the exchange rate and fees. Bank transfers between these countries cost 100% of the transaction. I also use it to buy hosting, domains, vpns, etc. > there was clearly a business opportunity if you could bring the access costs down. Well, guess what? If you can bring the fees down in Bitcoin and Ethereum, there are clear business opportunities. And yet, still in the 90s people said "People will never shop online. You need to go to the store to see and try the stuff."

acdha 9y ago

I don't think that comparison holds so tightly, but if it did it seems to make it worse: ARPANET had significant dependency delays in availability since computers cost a fortune, modems were slow, and you had to pay by the minute for phone calls. In contrast, despite Bitcoin being available to everyone on the first day most people have never had a reason to use it other than speculation. That said, there were still plenty of ARPANET users in the early days if you look at the subset of people for whom network access was an option. The benefits of email were obvious and group forums like Usenet (1980[1]) had similar quick adoption, at least in technical or academic fields where communicating with people outside of your location was important. Similarly, FTP (1980[2]) had clear value and the pricing made sense more often than it might have seemed since all of the other alternatives cost money, too. The other thing to remember is that this wasn't happening in a vacuum — while the internet was emerging, there was popular mainstream usage for companies like The Source, CompuServ, etc. starting in the late 1970s[3] and so again there was clearly a business opportunity if you could bring the access costs down. The number of people willing to pay by the minute to chat, shop, etc. suggested that an even large number of people would be interested as that per-minute rate dropped. It's that last part which makes me question the current valuations: even if you assume that all of the operational problems were solved with Bitcoin, it's hard to see what value it has to the ordinary person beyond possibly reclaiming the ~3% overhead of a credit card transaction — and that's assuming that VISA, et al. wouldn't just lower their rates to beat whatever the operational cost + fraud insurance costs ended up being for Bitcoin. 1. https://en.wikipedia.org/wiki/Usenet#History https://en.wikipedia.org/wiki/Usenet#History 2. https://tools.ietf.org/html/rfc765 https://tools.ietf.org/html/rfc765 3. There's a great series starting with https://www.filfre.net/2017/10/a-net-before-the-web-part-1-the-establishment-man-and-the-magnificent-rogue/ https://www.filfre.net/2017/10/a-net-before-the-web-part-1-t...

krrrh 9y ago
> and that's assuming that VISA, et al. wouldn't just lower their rates They easily could, their current rates contribute a lot toward cashback and points rewards and other marketing programs. Australia regulated a cap on rates at 0.4% iirc, and Visa still covered its costs.
- acdha 9y ago
  Their profit margins seem like a good estimate for how low they could go without much pain, and given the size of the revenue stream I’m sure they could go lower.
  - krrrh 9y ago
    It’s not just their profits because they spend a good portion of their revenue on customer acquisition and retention. We may have a more stable economy if there was less customer acquistiin in the consumer credit space.
alphydan 9y ago
It seems we are both cherry picking to back up our beliefs. Just to show the other side of the coin: > the number of [Usenet] hosts nearly doubled to 940 in 1984. More than 100 newsgroups existed, more than 20 devoted How does that compare to the number of Bitcoin miners today? or the number of nodes (11,000)? or the number of users (>30M)? > people have never had a reason to use it other than speculation. I did. I paid small amounts for small jobs in various countries of the world with nearly zero fees. (Back in 2013). Had I used Paypal, 50% of the amount sent would have been eaten up by the exchange rate and fees. Bank transfers between these countries cost 100% of the transaction. I also use it to buy hosting, domains, vpns, etc. > there was clearly a business opportunity if you could bring the access costs down. Well, guess what? If you can bring the fees down in Bitcoin and Ethereum, there are clear business opportunities. And yet, still in the 90s people said "People will never shop online. You need to go to the store to see and try the stuff."