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Bitcoin's Use in Commerce Keeps Falling
- jonny_eh 8y agoWhen can we call Bitcoin a failed experiment? And don't tell me it was "always about storing value", that's not in the original paper.
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- err4nt 8y agoA failed experiment to me would be one that wasn't able to run its full course, or from which no information can be gleaned. Bitcoin has run for a long time, we have gleaned a ton of useful information - as far as experiments are concerned this seems like it went bigger and better than expected, so it should be a very GOOD experiment!
- DoofusOfDeath 8y agoRather than questioning if the experiment failed, perhaps we should question if recent participants considered it an experiment in the first place. I.e., I don't think most bitcoin miners / companies / investors saw this as a knowledge-gathering exercise.
- redisman 8y agoI think it's really unfair to call Bitcoin "failed". It has unarguably changed the world. There was way too much hype about it changing everything.
- fstanis 8y ago> It has unarguably changed the world. How so? I see nothing in my day-to-day life that's different because of Bitcoin.
- tboyd47 8y agoAsk again after the next major financial crisis.
- adiusmus 8y agoSo 18 months then. Ok.
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- Meekro 8y agoIf Bitcoin is a failure, I wish some of my projects would fail like that.
- jonny_eh 8y agoI hope my projects never hurt the environment as much as Bitcoin has.
- JustMatthew 8y agoThe energy consumed from bitcoin PoW is used as a frequent rebuttal against the legitimacy of bitcoin, and it is an incontrovertible fact that the energy demands of bitcoin are non-trivial. According to annualized energy forecasts extrapolated out from bitcoin PoW energy demands back in December 2017 (i.e. at the height of the recent crypto bubble frenzy) BTC miners are expected to use 8.27 terawatt-hours this year. That's more energy than 116 countries including the Democratic Republic of Congo. On the other hand, the amount of energy bitcoin is forecast to consume in a year would only last the U.S. 19 hours. Additional the production of the global cash and coin supply will consume an estimated 11 terawatt-hours this year while gold mining will burn the equivalent of 132 terawatt-hours over the same period - and that doesn't include armored trucks, bank bank vaults, security systems etc... I'm not saying it's worth it to burn all that energy to keep bitcoin (arguably) decentralized. I just want to provide some (now probably outdated) perspective to temper arguments, and stimulate others (on both sides) to advance their arguments beyond headline quotes. Sources Pessimistic take: http://www.businessinsider.com/bitcoin-is-ruining-the-planet-2017-12 http://www.businessinsider.com/bitcoin-is-ruining-the-planet... Optimistic takes: https://www.bloomberg.com/view/articles/2017-12-07/bitcoin-is-greener-than-its-critics-think https://www.bloomberg.com/view/articles/2017-12-07/bitcoin-i... & https://blog.bitcoin.org.hk/bitcoin-mining-and-energy-consumption-4526d4b56186 https://blog.bitcoin.org.hk/bitcoin-mining-and-energy-consum...
- keymone 8y agoYou want to join the growing list of Proclaimers that Bitcoin is dead? It’s growing ever since 2011. Edit: typo
- fwip 8y agoWild how consensus forms over time, huh?
- HeadsUpHigh 8y agoI see what you did there.
- jchw 8y agoNot really. Was the goal of Bitcoin ever to be the successor to paper money? We're here today and Bitcoin is a functional payment network. Not only that, it's a fairly large one, and it has become a household name. I don't really use Bitcoin but I think it's hyperbole to consider it a unilateral failure just because it didn't supercede traditional currency.
- acdha 8y agoIt’s a household name because of speculation, however, and statistically almost nobody uses it for the kind of decentralized transactions for which it was originally pitched. The number of vendors accepting it has gone down over time (e.g. Steam, Microsoft) due to the endemic problems and many of the people who claim to use it (even here) are actually using the credit card network with government currencies for the actual transactions so there’d be very little disruption if it disappeared tomorrow.
- jchw 8y agoI can use Bitcoin today, right now, right here. I actually do occasionally, it's how I pay for VPN service. So is it a failure? No. It's a successful payment network. It didn't cause a libertarian Utopia or whatever, but that's a pretty lofty goal for a conceptual currency based on cryptographic hashing. I have nothing else to say here.
- acdha 8y agoThat nicely demonstrates my point: you’re a supporter and you use it infrequently with apparently one company. That does not sound like the revolution in personal finance we were breathlessly promised.
- jchw 8y agoI'm a supporter? By what definition of supporter? This may very well be the first time I've ever discussed Bitcoin in a forum. I don't support Bitcoin the same way I don't support Hanes clothing. It's just a thing I causally use. It works. Why are you trying to pigeon hole me personally? Who promised you this revolution, did Satoshi personally?
- beaner 8y agoWe're a pretty long way off, I'm sorry. Bitcoin is more popular than ever. The payments network (Lightning) being built on top of the financial sovereignty base layer is just getting started.
- adiusmus 8y agoAnother fork of bitcoin. So not actually bitcoin but still bitcoin at the same time. This appears to be an issue with cryptos. Nothing stops another fork later. It’s like people find a problem with a currency and start printing money in another one. I can see blockchain currency being useful when it is backed by something solid. But right now it’s still just wasted electricity. Eg MasterCard and friends could easily create a currency and use it for exchange. If I can’t actually use a currency to buy/sell or store value then what is it for? Or am I wrong?
- sgeisler 8y ago> Another fork of bitcoin. That's factually wrong. Lightning is a protocol on top of Bitcoin (like HTTP is built on TCP) and not a fork. It has a different set of trade offs: transactions on it are instant, but one should only store small amounts on it (like what you would carry in your purse) since your money on it can be stolen if you are offline for too long (and you did not pay someone to monitor the network for you). But as long as you are online often enough your funds are secure. If someone is curious how it works: https://lightning.network/ https://lightning.network/
- dj43nq 8y agoWhat is backing bitcoin? Gold? Cpu cycles?
- scotty79 8y agoAlgorithm thay decides how many bitcoins exist. Bitcoin is backed by same thing art and collectibles are backed by. Scarcity.
- dj43nq 8y agoI don’t buy burgers with art or collectibles. And holding bitcoin doesn’t help me in long or short term. Right now I’m hoping more people will buy bitcoin so I can dump the remainder of mine.
- grubles 8y agoBarring a catastrophic vulnerability in SHA256 or ECDSA, Bitcoin is going nowhere. Bitcoin has been a wild success. At this point, the goal is simply educating newcomers on its advantages (immutability, trustlessness, sound money).
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- yborg 8y agoFailed in what sense, and for whom? Some people made and are making a lot of (real) money from it (especially the thieves that have executed the numerous heists from exchanges, wallets, etc.) There is a definite ecosystem here that has players profiting from it that would want it to continue.
- jonny_eh 8y agoIn the original sense, a faster/cheaper alternative to wire transfers.
- nicky0 8y ago> When can we call Bitcoin a failed experiment? When nobody is mining blocks any more?
- DINKDINK 8y ago>that's not in the original paper. Bitcoin the protocol != bitcoin the paper. The main point of the paper was show that you can solve the byzantine generals problem in a completely untrusted. This contribution built on prior distributed-system designs such as Paxos. >don't tell me it was "always about storing value" Bitcoin was always about a fixed-scarcity asset/currency given that the controlled supply algorithm was in the very first version. Bitcoin doesn't need people's interpretations of bitcoin to be positive to come to trustless consensus. >When can we call Bitcoin a failed experiment? If you think that Bitcoin's value is $0 long term, why not go short and make reams of money? After 10 years the market has shown that owning 100 btc has preserved more purchasing power than owning 100 USD, What's your call for the next 10 years?
- dman 8y agoHow does one short Bitcoin?
- singularity2001 8y agoI'd call it a successful experiment that is soon over.
- lawn 8y agoEveryone should differ between Bitcoin the idea and Bitcoin the coin, only one of many cryptocurrencies. I don't think cryptocurrencies are ever going away. It's simply too good to be able to accept digital money anywhere from anyone quickly and with low fees. Dark markets for example will always use cryptocurrencies.
- titto 8y agoBetter believe it could be like last year https://dailycoinprice.com/live/bitcoin https://dailycoinprice.com/live/bitcoin
- joering2 8y agoBitcoin advocates have long suggested the virtual money would one day replace fiat currencies as a means of doing business That's not the case anymore either. We have few powerful miners than own more than 50%. Sure they separate entity per se, but if they talk and agree together, they can do whatever they want. They whole premise that crypto is free and decentralized and "banks cannot control it" is a good idea.. unless you quickly realize the flaw that biggest miners can get together and form a "crypto mob" if you will, and control currency future anyways.
- lern_too_spel 8y agoThe whole system consists of flaws the authors would have forseen if they understood economic thinking. Instead, they pretended that all the tenets of economics magically go away if you apply a little cryptography. The flaw you're pointing out is that whoever has access to cheap electricity and scale will be able to control the system. There is not sufficient incentive for others to jump in to a money losing proposition.
- dnomad 8y agoI propose Bitcoin and most other extra-legal (ie non state supported) currencies are going to zero. That said we can be grateful that the experiment was done and data was gained.
- BonesJustice 8y agoOver time, power always consolidates amongst a privileged few. That’s pretty much a universal constant. It doesn’t really matter what the unit of power is, be it dollars, hash rate, or political capital.
- glup 8y agoUnless the privileged few choose to build institutions to limit the accumulation of capital or power, e.g. https://en.wikipedia.org/wiki/Fabian_Society https://en.wikipedia.org/wiki/Fabian_Society. To call it a universal constant is a convenient abdication of responsibility.
- KasianFranks 8y agoBitcoin (and crypto) is not a currency, commodity, stock or bond. It's a combination which makes it a completely new and different kind of asset class. It's a programmable asset that primarily serves as a 'trading vehicle' in the mind of traders and Wall St. Understanding this helps to understand why Goldman and others are stepping over themselves to setup trading desks for most crypto now and in the future.
- glup 8y agoI totally agree with the assertion that it doesn't fall into existing asset type (or-- maybe that it can move between asset types in a novel way), but what do you mean by "programmable"? Isn't the simpler explanation or enthusiasm on the part of Goldman et al. just classic FOMO?
- KasianFranks 8y agoWhen you can engineer sophisticated scripts or wrappers around a globally accessible immutable tradable asset it increases functionality and innovation in financial products which includes autonomous machines trading crypto with one another in exchange for data. I think we're in for a world of fun.
- grubles 8y agoBitcoin uses smart contracts for its transactions. Meaning, you can program a transaction to occur if certain conditions are met. One example is a multisignature-required transaction. A multisig transaction is only valid and spendable if n-of-m signatures are present.
- socrates1998 8y agoIt sounds weird, but I think a big part of Bitcoin's, and other crypto's value, isn't in the day to day ability to use it to buy and sell things, it's the inability of the government to devalue it. This isn't as big a problem in many richer countries with relatively stable currencies, but I sure as hell would prefer Bitcoin to anything the Venezuelan government or the Argentinian government would issue. The kinks are still getting worked out for Bitcoin, but I still think it is a big game changer.
- grubles 8y agoYou hit the nail on the head. Hodling is, in some cases, the best use case for Bitcoin.
- pg_bot 8y agoThere is a reason why an investor that holds a security until it is worthless is called a "bag holder". It makes no sense to "invest" in any currency when you can own productive assets instead. If you are concerned about the government seizing your assets, I would suggest emigrating to a country that respects private property rights. Countries that undergo hyperinflation are fairly rare, and the citizens of those countries tend to not tolerate it for very long. (Research dollarization of Ecuador and Zimbabwe)
- dmichulke 8y agoYour argument is also applicable to gold yet it doesn't hold there
- pg_bot 8y agoMy argument holds for gold as well. Do some research on ROI for gold against the stock market for the past 80 years. You will find that it has a pitiful return when compared to owning stocks. Gold is a non productive asset, just because people buy it when there is a market panic doesn't make it a wise decision (people do dumb things during market panics). If you hoard gold you also run the risk of someone finding a lot of gold and ruining your investment. It's a commodity just like coal, copper, or wheat. If someone told you to hold all of your money in coal, the advice would be just as valid as those who tell you to put money in gold. At the end of the day if you have no productive use for the asset, why hold it?
- briatx 8y agoIt has been clear for a while now that Bitcoin is an inferior payment system for the consumer: * The fees are higher. * The risk to the consumer is higher. * The difficulty of use is higher. * It is accepted at an extremely low amount of vendors and even that is falling. So you really how to wonder why people ever thought consumers would use it en masse.
- wycs 8y agoAlso, money works pretty well. Bitcoin is not 10x better. Maybe 0.1x. Bitcoin is not even useful for illicit transactions anymore.
- keymone 8y agoBy money you mean what exactly? Anything in a bank account is not money but promise of money that can be taken away without your knowledge. Any specific currency is subject to whim of corresponding central bank. Sure, some are safer than others but still. Even the right to participate is not a given as you can be banned from opening a bank account. Bitcoin is orders of magnitude better money than anything else in every aspect except convenience, but it’s getting there.
- cortesoft 8y agoYes, there are risks with banks, central banks, and government backed currencies. These risks are well known and commonly hedged against, which is why currency trading is a thing. Bitcoin also has risks; it could also collapse, have security vulnerabilities, you could lose access to your keys or if you choose to use an exchange it could be compromised or seized by authorities. Now, it is true that the risks are different than for other currencies, but you can’t just act like bitcoin doesn’t have risks or that they are a priori less risky than other currencies.
- Swizec 8y ago> in every aspect except convenience And yet convenience is the only aspect 99.9999% of consumers care about because they never have and never will experience any of the other problems you mention.
- jfaucett 8y agoThe primary utility of money is this: it is the good that best lends itself to exchanges for other goods. Its been clear to me for some time now, and I'm not alone in this, that as the properties of Bitcoin have moved further away from its primary function as a useful unit of exchange that its usage would decline. There are other crypto-currencies which are now much better suited as a medium of exchange, which ones people will prefer as time progresses remain to be seen, but unless Bitcoin takes a major corrective path, I would be quite surprised to find Bitcoin in that final set of widely utilized currencies.
- andrewmcwatters 8y agoIsn’t this issue inherent in its design? If you can only have 21 million Bitcoins, the value will skyrocket until the currency is worthless.
- ttoinou 8y agoIt's more than 21 millions since bitcoins can be divided. And no, it could serve as a digital gold / long term investment, and others crypto currencies could be used for day to day transaction
- grubles 8y agoBitcoin can serve as both digital gold and cash. The Lightning Network (a network of bi-directional payment channels) supports instant sub-1-cent micropayments.
- BitcoinIsCash 8y agoThe Lightning Network is not settlement. It's like an IOU, that depends on the eventually-settled state of all associated channels.
- grubles 8y agoIt's not like an IOU. They are literally signed (by both parties of the channel) transactions that have yet to be broadcasted and included into blocks. You aren't sending something that is worthless to the counterparty. You both agree what the channel balance is. If there is a disagreement to the state of the channel, the base layer is the ultimate arbiter. It's a smart contract between two parties.
- TACIXAT 8y agoA currency with no mechanism for monetary policy is not going to be adopted. Bitcoin is purely deflationary for more reasons than just people losing their keys. For example, a fixed reward split between a growing group of miners will also cause a rising price floor. The miners will not sell for less than their electricity costs, which makes the smaller piece of the block reward they receive have a higher price. So you have this asset you call a currency but it is always deflationary. No one will set prices in that. Think of it in terms of setting a salary. One month you are paying the equivalent of 1000 dollars, the next you are paying 2000. Since this has no way of stabilizing it will never become a true base currency. Instead, at best, it serves as a pass through to a fiat currency. So it is acting as a payment processor but very inefficiently. Slow transaction speeds, expensive, difficult to acquire. The price is driven by speculative demand. It honestly is more like a digital collectible than a currency (sign up to receive one of 21 million e coins, be part of history).
- comboy 8y agoCurrency that is guaranteed to be deflationary sure has its problems. But taking ideology and using it for every day stuff aside, why wouldn't you want to own some?
- kristjansson 8y agoExactly: own some. Not spend some, hence the problem with using it as a currency.
- amatic 8y agoI'm not sure that is a real problem. You own some, then when you want to spend, you spend. The fact that it is deflationary means you might postpone your purchase, but ultimately, you will need to eat/travel/etc more than you need to "own" currency. Or are there other problems?
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- Tim_cas 8y agoHow Google is entering the crypto space is https://blog.usejournal.com/google-entering-the-blockchain-space-f418793e1cb4 https://blog.usejournal.com/google-entering-the-blockchain-s... very telling. Bitcoin is not going away. Get over it.
- jeromegv 8y agoCrypto space doesn't necessarily mean Bitcoin, could be another better technology that eventually becomes mainstream.
- hk__2 8y agoGoogle is not entering the crypto space. Quoting from the article: > Google finally officially entered the blockchain space, announcing on its blog just before the Google Cloud Next ’18 conference in San Francisco in July 24–26, to be supporting distributed ledger technology, aka blockchain Adding a blockchain service to your cloud platform offering is far from "entering the crypto space".
- octopod 8y agoBitcoin != despite the wearisome and over-blown emotional 'bitcoin is bad see i told you so!' mentality on HN.
- wgerard 8y agoBy no means am I a bitcoin-enthusiast, but I've shared this story before: > We had to send a payment to someone who lives in a commonwealth country - what a pain in the ass that was. For the first time I actually saw a use for bitcoin, but the volatility and my general desire not to run afoul of any weird money laundering laws got the better of me. I do think there's a legitimate case for bitcoin as a means of getting around FX and just the general inaneness of international banking. That being said, I'm sure that there are plenty of reasons why that'll never come to fruition (e.g. as I noted, AML rules).
- wslh 8y ago> We had to send a payment to someone who lives in a commonwealth country I use it for that purpose all the time. In general, People in developed countries don't have a clue about how painful and time consuming an international payment can be. Even with credit cards banks put very low limits that are unrealistic for someone who travel often and consume cloud services like AWS or Google Cloud. That is why I think the Bitcoin narrative is misleading, the main point was to make P2P transfer, not holding. In this context stable coins like DAI are currently one of the killer use cases.
- wgerard 8y ago> I use it for that purpose all the time. Not to dig into your business too much, but: Any weird tax/legal implications around that? I didn't want to dig into it too much (just because often these things are rabbit holes with unclear answers), but I'm really curious about it for the next time we have to send a payment. > In general, People in developed countries don't have a clue about how painful and time consuming an international payment can be. I can definitely say I had no idea until I had to do it myself. Trying to figure out how to do a wire transfer to someone in another country was a huge boondoggle (and expensive).
- tom_ 8y agoIn the UK a capital gain (or loss) may occur when you use Bitcoin to buy something, whatever that thing is. (Buying something with Bitcoin is effectively selling Bitcoin for that thing. The thing has a value, and that is some evidence that the Bitcoin is worth that much.) This is a taxable event and if the gain is large enough then you'll need to pay the tax on it. I imagine many countries have rules that are quite similar.
- ttul 8y agoWhen I was starting a BTC ASIC company (don’t worry - it failed to attract investment) in 2011, one of the things that always spooked investors was the slide showing transaction volume. Even in those early days, one had to really stretch one’s imagination to believe that Bitcoin could one day take over from Visa/MasterCard as a payment method of choice. But we did understand its value as an alternative store of wealth, and potentially as a way to transfer money across borders more cheaply. I think the former utility has been somewhat dented by the steady drop in value since its peak. And the latter isn’t really all that amazing of a value prop when you consider that regular old PayPal isn’t that expensive and the set of situations in which it does not work is really small. Not to mention that SWIFT is really ancient but also works well and can be endlessly improved...
- amelius 8y agoWhat does it take to actually make BTC ASICs? In my understanding, the hash functions are quite simple and just do things like XOR, and SHIFT, and perhaps ADD/SUB, but not multiply or divide. So the main difficulty would be to do everything at the lowest possible amount of power. But I could be wrong.
- gammateam 8y agoyes, we stopped making application specific integrated circuits (ASIC) back in 1980 in favor of general purpose processors that do all applications decently fast. there is no rocket science to making an ASIC because we already know how to, and its economically viable again to dust off that knowledge
- ttul 8y agoYou are correct. The ASIC engineering was routine. It was all about justifying the enormous NRE costs... back in early 2011, BTC was a curiosity and not well known at all. Investors were not easy to convince.
- superkuh 8y agoBloomberg's use in news keeps falling too. They have set up computational paywalls to prevent people from reading their articles. But for some reason people on HN just keep posting them. It's a weird exception to the no-paywalled article status quo.
- paulpauper 8y agoditto. used to be ok but now too much clickbait, low quality content, and now paywalls
- gammateam 8y agoFirst, use in commerce peaked when transaction fees went too high in 2017, and consumers didn't try the shitty user experience again okay, temporary problem the payment processor's user experience kind of sucks and the network didn't help that better UX and lightning network will help with that. There are also some BIPs regarding signing transactions differently, as well as smaller transactions coming. This year, 2018, more people already use another form of smaller transactions and also combine them. Bitcoin would handle a lot more load this year. Secondly, M1 is a tiny fraction of the supply used for goods and services, M2 and M3 are illiquid stores of value. Bitcoin isn't functioning differently to currencies in this regard so its a weird standard to put it at to proclaim it isn't a good value transfer mechanism.
- Nursie 8y ago> better UX and lightning network will help with that. Lightning appears to be a bit of a joke - routing payments is almost impossible, lots of attempts seem to fail, and there also appear to be requirements like keeping a node up constantly.
- gammateam 8y agoyeah I read and repeated all of that stuff without investigating too, at one point. they aren't fundamental flaws to the concept. just like with tcp/ip packets, routing will improve with robustness of the network. I saw a couple of work in progress efforts to address the full node requirements. they'll be growing pains but bitcoin is interesting because the protocol doesn't go away, even as the payment processing companies themselves run out of money. so a different company or group of efforts will implement it with merchants when its better.
- CryptoPunk 8y agoIt's different than TCP/IP in that every transaction changes the topography of a payment channel network, by changing the maximum amount that can be sent across various channels. This is a fundamental difference. Moreover, even if LN worked as a full substitute for on-chain transactions (all indications point to only a very centralized hub and spoke LN model working efficiently), Bitcoin's three transactions per second limit makes the maximum proportion of the global population that could participate in a LN very limited. Afterall, LN payment channels do still need on-chain transactions to set up, and do need to be replaced from the time to time. Given every user would need, at the very least, a few payment channels, the math for global adoption of the LN with a 3 tps limit doesn't work.
- agorabinary 8y agoIt's pretty remarkable that the transaction layer (Lightning network) on top of Bitcoin hasn't garnered any discussion in this comment section - I would expect this to be the primary topic when talking Bitcoin commerce! It's not possible to have an intelligent discussion on Bitcoin commerce without discussing its most relevant tech. From my experience, I see that most apolitical or politically averse techies (a lot of HN) are drawn heavily to Ethereum, which has been falling relative to Bitcoin ever since the January highs. Pretty sure there is a strong correlation between this and HN crypto frustration in general.
- CyberDildonics 8y ago> It's pretty remarkable that the transaction layer (Lightning network) on top of Bitcoin hasn't garnered any discussion in this comment section I would say it's pretty encouraging since it barely works, doesn't deliver on any of its promises and much more convoluted to use that normal crypto-currency.
- agorabinary 8y agoI can send less than a satoshi to someone across the globe for virtually zero fees, anonymously and without any need to wait for block confirmations? And all of this works right now on mainnet? Bitcoin progress has always consisted of overcoming allegedly insurmountable problems, Lightning dev is no different. Next up is solving efficient routing and intermittent nodes.
- CryptoPunk 8y ago>>Bitcoin progress has always consisted of overcoming allegedly insurmountable problems, Lightning dev is no different. Bitcoin's founder solved one allegedly insurmountable problem: the Byzantine Generals' problem. It's irrational to believe this means Bitcoin Core's development team, who had no part in the original design of Bitcoin, will solve more problems of this class. Bitcoin Core should have fully exploited the existing breakthrough in decentralized consensus, by simply raising the block size limit to provide enough space for the world to use Bitcoin, instead of pushing Bitcoin's luck, and premising its success on an uncertain technology like LN.
- vasili111 8y agoCryptocurrency will never replace fiat money. Corporations will never put their money in a system that is controlled by only one password and that uses transactions that in case of error can't be undone.
- jobserunder 8y agoKeep dreaming. You will see.
- talkingtab 8y agoMy thinking, probably wrong goes like this: what is money? It is a messaging system that allows people to decide what to do in a decentralized fashion. We need more food, the price of food goes up, more people grow food. What happens when you make money from money? Dysfunction. World currencies are increasingly dysfunctional - the most profit comes not from productive economic activity but from speculation, arbitrage, etc. Bitcoins are completely dysfunctional because they are not tied to any productive economic activity, they are completely speculative. The idea of cryptocurrencies is great, but without being tied to real economic activity, they are ... well speculative. Would love some explanations on why this thinking is wrong.
- empath75 8y agoThey’re tied to economic activity — buying drugs, money laundering, paying ransoms, funding intelligence operations. Just nobody is using them to buy legitimate products.
- opticbit 8y ago>And Bitcoin-based transactions can’t be reversed, an issue when a merchant or a consumer comes up against fraud That's the fucking point. Use multisig/escrow if you need it.
- BitcoinIsCash 8y agoWith the small-blocker and big-blocker schism, BTC is not Bitcoin, and is not meant for commerce. If you want fast, cheap, settled transactions, use Bitcoin (BCH).
- mortdeus 8y agoI think what people need to realize about cryptocurrencies is that they aren't going to derive their value from being convertible to fiat currency. Rather cryptocurrencies are going to be revolutionary in the sense of how they can be combined with other technologies. For example, what if World of Warcraft used a cryptocurrency based system for ingame currency? Where the ingame money was actually finite and that in theory the players in the game could suffer from an economic depression. Or a few players could hoard all the wealth in the game. etc. etc. The game would be way different than it is now, which is to say that it just emulates an economy, not actually implements one. This is probably a bad example to get what I am trying to say. So lets imagine a different scenario. Let's say we wanted to build a social network, where we didn't actually want everybody to just be able to say whatever they want without a threat of consequence. What we want is a social network where you have to do something to earn the ability to speak, and once you speak you lose the currency to be able to speak again until you do something once again to earn the ability to speak. What you have to do in order to earn the ability to act depends on the service in question, but the same basic concept of a cryptocurrency is what underlying the system. In that the platform only has value when the ability to act is a limited and highly valued resource.
- mortdeus 8y agoThis is another reason why i think all these crypto based startups that are using ICOs as an alt means of funding are totally delusional and devaluing their product. You take all the value out of your platform if you take away the requirement that people must do some form of work to generate wealth. The fact that the platform acts like the Fed and can print their own currency whenever they want, proves that they don't truly get the point of why cryptocurrency is innovative.
- TheDong 8y ago> For example, what if World of Warcraft used a cryptocurrency based system for ingame currency? Why would they need a distributed system? They already have an in-game currency with a central authority (their trusted servers) and can already limit the rate of currency creation (reduce monster's gold drop rate to zero or whatever). EVE Online shows just how well a central authority can manage a virtual game currency. No crypto or blockchain needed. > Let's say we wanted to build a social network, where we didn't actually want everybody to just be able to say whatever they want without a threat of consequence Cool, so like a reputation system on old forums where you have to have a certain number of positive comments to participate in other private forums, and there's heavy moderation? Oh woah, no crypto, no blockchain. I don't see how cryptocurrencies make the fundamental problems of building such a system any easier btw. Attaching a value to someone in a database is easy, and even distributed social networks like mastodon trust the participating servers (and if you don't, you block the whole server). Cryptocurrencies are a problem looking for another problem, and it turns out rubbing two problems together doesn't make fire. A central database is usually better (the WoW example), and they're often orthogonal to other ideas they're shoved into (reputation system, file storage, whatever).
- CryptoPunk 8y agoThis is a totally expected consequence of Bitcoin Core abandoning the original plan of raising the block size limit in favor of 'the Lightning Network', which is a technology that does not even work at the conceptual level, let alone being production ready. A blockchain limited to 3 transactions per second cannot be a global currency. Before Bitcoin came up against its 1 MB per 10 minute (1.67 KB/s) limit, which is its life from launch to 2017, its daily transaction volume was growing exponentially, yoy.
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- smsm42 8y agoI am not surprised. I am a programmer with decades of experience under my belt, and I have no idea how to install bitcoin in a way that would allow me convenient use of it. No, I can install the apps, and I can spend a month or two waiting until it downloads the whole 40+G of current blockchain, or I can trust some site that says it'd fix it for me, or I can open an account on any of the exchanges and pray to cryptogods it's not the one that is going to be robbed or go bust next. But why would I? Now, if I would plan to trade in commodities that local government is frowning upon, or speculatively invest in assets that make Las Vegas look like index funds, it would be worth my while. But I don't, so it isn't. Now make a step from myself - the experienced professional who actually knows what Bitcoin is and can probably explain how it works without wading too far from the truth - to a person who doesn't know the difference between "browser" and "internet". Why on earth would they go through this trouble - and more importantly, why on earth anybody who cares about them would advice them to go there at all? My advice to anybody who is not an agressive risk investor or a person with interests misaligned with current law would be "not with a ten foot pole". Right now it's so ripe with opportunities for both unintentional screwups and intentional skullduggery that I don't see how people can do consumer commerce with it.
- keymone 8y agoexaggerating a bit? bitcoin syncs within couple hours unless you run it on the computer you'd gain your decades of experience on :) every mobile bitcoin app is a lightweight client - it only syncs block headers, much faster but not great for large sums of money. so for a person that can't tell "browser" from "internet" there's no difference between introducing them to paypal or to bitcoin - it's just an app on your phone and you can press the "send" button.
- mr_theopolis 8y agoThe problem with bitcoin as a currency or a store of value is simpler than all these comments. It is not secure. If I own gold, I own the gold, nobody can take it from me without physical access to it. If I own bitcoin, I own a transaction on a ledger. I don't own that ledger. The majority miners control the ledger. A miner who has 50% of hashing power (actually less, when selfish mining) completely owns and controls the ledger. They can erase any transactions they want, block transactions and double spend. You don't have that with gold, you actually own the gold. Bitcoin Gold was the same source code and same ledger as bitcoin (no extra words) and it was double spent in exactly that way. The whole system was designed to make the people who created the fake money a lot of money, it wasn't designed to run forever. They've made their 100s of millions+ and more. Beyond their wildest dreams. It's a simple pyramid scheme designed to run as long as possible. It is not a currency. It is not a store of value. It is a worthless asset being traded back and forth by people losing money in a less than zero sum game. Less than zero because money is going to miners and exchanges who facilitate the game.
- jobserunder 8y agoSelfish mining with less than 50% does not exist. False Also.... see how they confiscated gold in the USA. You cannot confiscate bitcoin, anymore than you can confiscate "internet" Both are networking protocols
- davidgerard 8y ago> Selfish mining with less than 50% does not exist. False Incorrect, and this has been well known for nearly five years: http://hackingdistributed.com/2013/11/04/bitcoin-is-broken/ http://hackingdistributed.com/2013/11/04/bitcoin-is-broken/
- jobserunder 8y agoYes, Emin has been pushing that narrative for a while. But we have not seen an instance of this yet
- PoespasAR 8y agoSo many initiatives are currently in development to make it easy to accept crypto. Just wait 2 or 3 years...