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There's a hidden cost of trust there, though, which vanishes with bitcoin (or at least reduces its cost). Maybe the value of bitcoin is more apparent from the p

by drb91 8y ago

There's a hidden cost of trust there, though, which vanishes with bitcoin (or at least reduces its cost). Maybe the value of bitcoin is more apparent from the perspective of venezuela at the moment, where the risk involved with traditional banks, currency, and security is more apparent. I am emphatically not taking a stance on which I prefer here, I might add, just pointing out that there are more variables here than you're acknowledging.

gamblor956 8y ago
Bitcoin and other cryptocurrencies require even more trust than normal currency. With a normal currency transaction, you need only trust at most 2 other entities entities: your counterpart to the transaction and the government issuing the currency. With a blockchain, you still need to trust the counterparty, but now you also need to trust that the coders have properly designed and programmed the system, and that the miners either don't have the power to corrupt the system or aren't corrupt, and you need to trust whatever exchange you use to get into and out of the cryptocurrency. Plus, you've added in a significant amount of time--at a minimum 20x the time with Bitcoin and significant transaction fees that as a practical matter have exceeded card interchange fees by 2x or more for the past 3 years straight. Your right about their being more variables...with cryptocurrency.
- drb91 8y ago
  I think there are fundamentally different ways we're talking about trust: you "only" need to trust a government, you "only" need to trust a bank, vs trusting a certain proportion of miners to be following the same bitcoin specs you are, as well as trusting that people will value it tomorrow. Both of bitcoin and government-issued currency requires trust, and building that trust is fundamentally difficult, depending on your needs, and comes with tradeoffs. It seems like you're only acknowledging one end of these tradeoffs. One obvious tradeoff you're not considering is that of a criminal getting its assets frozen, for instance. There are less black and white situations where you might prefer bitcoin as well, if you have a little imagination. If you could address that, I'd probably appreciate your comments more.
  - deleted 8y ago
    [deleted]
  - bronson 8y ago
    Let's not use HN as a place to enumerate cryptocoin variables? You can find plenty of that discussion elsewhere.
- marcosdumay 8y ago
  And you need to trust that your government won't take the currency away. There is no escaping from this one.
dragonwriter 8y ago
> There's a hidden cost of trust there, though, which vanishes with bitcoin With fiat, I at least have some idea who I am trusting, and if my trust is betrayed, I have some idea who to work with others to organize to work to inflict punishment. And, the people involved are aware of that. With crypto, I have to trust an anonymous network of people that I have only distant and indirect indications aren't, in overwhelming majority, mutually cooperating agents of a single potentially adverse party, and no idea of who to go after if my trust is betrayed. And the people involved know that, too.
- morogop 8y ago
  in addition to the miners, you also have to trust a largely centralized group of software authors who make the key decisions.
TeMPOraL 8y ago
> There's a hidden cost of trust there Yes, except the trust is free. Bitcoin replaces that trust with burning electricity. It's kind of like standing on the ground. The surface of the Earth stops you from accelerating under gravity for free. But if you want to hover just above it, you have to burn ungodly amounts of energy, because you're now replacing surface with active propulsion. This is the same relationship as Bitcoin has with trust. And yes, flying is occasionally useful. So are trustless systems. But both the ground and trust are features that cut out a lot of unnecessary energy usage from our lives.

by drb91 8y ago

gamblor956 8y ago

Bitcoin and other cryptocurrencies require even more trust than normal currency. With a normal currency transaction, you need only trust at most 2 other entities entities: your counterpart to the transaction and the government issuing the currency. With a blockchain, you still need to trust the counterparty, but now you also need to trust that the coders have properly designed and programmed the system, and that the miners either don't have the power to corrupt the system or aren't corrupt, and you need to trust whatever exchange you use to get into and out of the cryptocurrency. Plus, you've added in a significant amount of time--at a minimum 20x the time with Bitcoin and significant transaction fees that as a practical matter have exceeded card interchange fees by 2x or more for the past 3 years straight. Your right about their being more variables...with cryptocurrency.

drb91 8y ago
I think there are fundamentally different ways we're talking about trust: you "only" need to trust a government, you "only" need to trust a bank, vs trusting a certain proportion of miners to be following the same bitcoin specs you are, as well as trusting that people will value it tomorrow. Both of bitcoin and government-issued currency requires trust, and building that trust is fundamentally difficult, depending on your needs, and comes with tradeoffs. It seems like you're only acknowledging one end of these tradeoffs. One obvious tradeoff you're not considering is that of a criminal getting its assets frozen, for instance. There are less black and white situations where you might prefer bitcoin as well, if you have a little imagination. If you could address that, I'd probably appreciate your comments more.
- deleted 8y ago
  [deleted]
- bronson 8y ago
  Let's not use HN as a place to enumerate cryptocoin variables? You can find plenty of that discussion elsewhere.
marcosdumay 8y ago
And you need to trust that your government won't take the currency away. There is no escaping from this one.

dragonwriter 8y ago

> There's a hidden cost of trust there, though, which vanishes with bitcoin With fiat, I at least have some idea who I am trusting, and if my trust is betrayed, I have some idea who to work with others to organize to work to inflict punishment. And, the people involved are aware of that. With crypto, I have to trust an anonymous network of people that I have only distant and indirect indications aren't, in overwhelming majority, mutually cooperating agents of a single potentially adverse party, and no idea of who to go after if my trust is betrayed. And the people involved know that, too.

morogop 8y ago
in addition to the miners, you also have to trust a largely centralized group of software authors who make the key decisions.

TeMPOraL 8y ago

> There's a hidden cost of trust there Yes, except the trust is free. Bitcoin replaces that trust with burning electricity. It's kind of like standing on the ground. The surface of the Earth stops you from accelerating under gravity for free. But if you want to hover just above it, you have to burn ungodly amounts of energy, because you're now replacing surface with active propulsion. This is the same relationship as Bitcoin has with trust. And yes, flying is occasionally useful. So are trustless systems. But both the ground and trust are features that cut out a lot of unnecessary energy usage from our lives.