9 ms·

Bitcoin and other cryptocurrencies are useless

76 points by tombrossman 8y ago

tootie 8y ago
James Mickens has a pretty good breakdown of why blockchain isn't a good solution for most real-world problems: https://youtu.be/15RTC22Z2xI https://youtu.be/15RTC22Z2xI
- poisonborz 8y ago
  Wow, that was a rather dumb presentation. Basic arguments are like "anonymous nodes are bad because I can't sue them", "smart contracts are unneeded as we mostly just need to store static data" (supplied by authorities), "too much security is paranoid given real life trust with legal enforcement".
  - BenoitP 8y ago
    I believe all these would be for regular already working uses cases that people are trying to shoehorn blockchains onto.
- Chromozon 8y ago
  A while ago, I talked with some guys from a blockchain technology company. They are doing mostly prototyping work for a variety of companies in different industries. However, one of the devs said that most of the problems they have been asked to solve could easily be done with a simple SQL database + logging. But since blockchain is the new, cool technology, everyone wants to be using it. I think blockchain has a lot of potential, but I haven't seen many companies really grasp how to use it correctly.
- BenoitP 8y ago
  That is quite a good vulgarization of the various properties that are at play between business cases and a blockchain; and a much better resources than OP's economist article. I wish he talked more about properties for the currency use case -which is its most useful usage-. ---- On another note, a vast majority of the targeted use cases would benefit from well engineered solutions; having redundant persistence, availability, immutability, ordering, tamper-resistance, non-repudiation. But all this is could be simply achieved with Kafka + PKI signing. Anyway, hyperledger fabric uses Kafka internally for the ordering... which leads me to say: If lighting candles in the dark and saying 'blockchain' 3 times is all it takes to make a VC appear and help you build good Kafka + PKI infrastructures to tackle real problems; then I'm all for maintaining this white lie based on all the wrong reasons (which would attention seeking? unspoken implicit promises of riches?). -Just my 2 Quantum Blockchain 2.0 AI Scalable cents.
daviddahl 8y ago
LOL. The establishment Economist magazine says it - it must be so.
bitlax 8y ago
Strong buy signal
- EduardoBautista 8y ago
  Until people go from buying crypto to spending crypto, I will have to agree with The Economist.
- geofft 8y ago
  If I'm reading the article right, the entire claim is that Bitcoin is useless as a day-to-day currency and is only useful for investment/speculation, so "Time to invest" isn't actually contradicting the article at all.
  - rkeene2 8y ago
    However not all cryptocurrencies share the same issues as Bitcoin and the article lumps them all together. I'm a developer on a cryptocurrency called Nano whose goal is to be usable as day-to-day money. I think we are successful to a large degree.
    - madeofpalk 8y ago
      > I think we are successful to a large degree. Where, and how, can I use Nano?
      - rkeene2 8y ago
        Anywhere Nano is accepted, just like every unit of money. There are various mechanism for doing so, including phone-based apps, Internet based payment gateways, and hardware systems. If your question is rather on the current number of places which do accept this currency, probably the best place to look is online and Venezuela, which has been left without a local currency in effect.
        madeofpalk 8y ago
andrewflnr 8y ago
I love how the subtitle flatly contradicts the actual title. What happened there? Did some editor feel the need to damp the article's criticism but lack the resolve to go farther than the title?
- geofft 8y ago
  I don't think they contradict each other—the article also talks about non-currency uses of blockchains.
- jjxw 8y ago
  No, there's a distinction between cryptocurrency and the underlying blockchain technology. There are a number of applications of blockchain that are promising such as in settling financial contracts that don't require issuing a speculative token to go along with it.
  - andrewflnr 8y ago
    I see, I didn't read closely enough. Oops.
vidoc 8y ago
They happen to be extremely useful for buying recreational drugs on the internet. The author overlooks that.
- akvadrako 8y ago
  Exactly - without Bitcoin or alternatives I'm not sure these marketplaces would be feasible.
r32a_ 8y ago
I'm happy its been added to the list: https://99bitcoins.com/bitcoinobituaries/ https://99bitcoins.com/bitcoinobituaries/
- madeofpalk 8y ago
  Really, articles like this are good for Bitcoin.
mjfl 8y ago
The usefulness of cryptocurrency is not abstract: cryptocurrencies are useful for sending value over the internet and over international borders. Doing so without cryptocurrencies is very difficult and costly, requires large banks and multinational law firms.
- rullelito 8y ago
  Are you counting electricity or fees? Both are higher for cryptos of what I can remember.
  - mjfl 8y ago
    I don't know how to quantify the electricity/carbon use of large banks and multinational law firms, but it probably isn't small? The current "safelow" gas price on Ethereum is 2.6 gWei, or $0.016. https://ethgasstation.info/ https://ethgasstation.info/ Stripe/Paypal both charge more than $0.30, or 15-30 times more.
    - village-idiot 8y ago
      Best estimates are that Bitcoin consumes a ton of power, more than Ireland or Israel at this point. Current estimates, and estimating this stuff is very hard, but the range we're looking at is in the 56-73TWh per year. Handily enough, we know exactly how much electricity Visa used in 2017, and it's about 0.19TWh[0]. Now obviously Visa alone isn't the end of the financial system, bank branches, payment processors, and other actors are involved. Personally, I highly doubt that they add up to another 55-72TWh, but if you can prove that, be my guest. Of course, at this point we're also missing a very important factor: transaction volume. Comparing financial systems in terms of total energy usage is very misleading, a far better way is to measure energy per transaction. And this is the point where it really falls apart for Bitcoin. As of today, bitcoin is averaging about 180,000 transactions a day. That's about 100 seconds of Visa's average volume[1]. Comparing fees is a terrible way to measure transaction cost in terms of kWh. First of all, Stripe and Paypal employ a lot of people, and people are quite expensive. Second, bitcoin miners are being compensated by the expected rewards of finding a block (or participating in a pool that finds one). This means that the transaction fee and the amount of electricity used simply may not be related at all, since the fee might drop below the electricity cost so long as the expected reward is bigger still. 0. https://usa.visa.com/dam/VCOM/download/corporate-responsibility/visa-2017-corporate-responsibility-report.pdf https://usa.visa.com/dam/VCOM/download/corporate-responsibil... 1. 150,000,000 transactions per day[2] / 86400 2. https://usa.visa.com/run-your-business/small-business-tools/retail.html https://usa.visa.com/run-your-business/small-business-tools/.... Theoretical (and heavily advertised) capacity is 24k, but a more prosaic 1.8k/s is more in line with a typical daily load.
PacifyFish 8y ago
I’m no bitcoin maximalist, but boy was that a lazy write-off: “Economists define a currency as something that can be at once a medium of exchange, a store of value and a unit of account. Lack of adoption and loads of volatility mean that cryptocurrencies satisfy none of those criteria... as things stand there is little reason to think that cryptocurrencies will remain more than an overcomplicated, untrustworthy casino.“ That bitcoin is a poor medium of exchange and unit of account is hard to argue against at this stage of adoption. But store of value? I’m more confident in the maintained value of Bitcoin than that of a Venezuelan Bolívar. That’s not a strong enough reason for me to hold bitcoin, but if I lived in Venezuela it sure as hell would be! Moving from the realm of currency to usefulness, there’s no faster & cheaper way to transfer money across national borders. Viewed in this light it’s just a younger, more easily stored, more fungible, more easily transferable gold. Now I do hold more gold than bitcoin (in USD, combined about 6% of my portfolio atm) because certainly risks remain. But to say it has no utility is just crazy! I guess precious metals are useless too. What’s their market cap again?
- inimino 8y ago
  Precious metals look cool and have held value in human society for thousands of years. Bitcoins are immaterial numbers in a distributed database that a tiny fraction of humanity has been interested in for a tiny fraction of human history. That the best use cases for cryptocurrencies found in ten years of trying are illegal doesn't say much for its utility.
  - hd4 8y ago
    What other use cases are you expecting at this stage of adoption, considering it has been derided by all "serious concerns" as a fad and all established financial institutions have blockaded it? You are parroting the same dismissive media tune made by the people with a vested interest in the status quo remaining the status quo. The bitcoin logo also looks cool.
    - inimino 8y ago
      The use cases of cryptocurrencies are the same as any currency: paying for stuff. If enthusiasts think that paying for stuff with cryptocurrencies is going to become popular, I don't think it's just a "dismissive media tune" to point out that after ten years, it hasn't happened.
bufferoverflow 8y ago
I find them useful. Bitcoin maybe not as much, but Ethereum, Bitcoin Cash and many others are great. The easiest way to pay for things without getting screwed on the fees and silly local government controls.
- prolikewh0a 8y ago
  >silly local government controls. Like what?
  - dd36 8y ago
    Criminal law.
    - TheSpiceIsLife 8y ago
      Tax law too.
  - rusk 8y ago
    Capital controls I presume is what’s meant
- dewey 8y ago
  How are Bitcoin fees lower than traditional fiat transfers?
wggff 8y ago
Useless ? The primary function is to protect individual wealth against central banker meddling and corruption. My btc are up 1000x since 2011. It isn't a smooth ride but its definitely working great.
quickthrower2 8y ago
Useless? Useless like Paypal or Stripe? I forgot to get the memo and I have purchased products with great satisfaction with Bitcoin - oops. Oh and I found the page hard to read with ads and popups, so: https://outline.com/yaRUTm https://outline.com/yaRUTm
dougyoung 8y ago
I'm over my article limit with the Economist. If only there was a way I could pay for a subscription without a bank account.
- chrisco255 8y ago
  Seriously, it would be nice if someone invented a way to make microtransactions on the internet a reality!
  - BenoitP 8y ago
    https://brave.com/ https://brave.com/ And btw they're currently having a BAT giveaway on the Desktop version. I currently have my 15 giveaway BATs in it (3.37 USD), and it is supposed to give them to site I use? I'd give some of them to open some paywalls, but not to the economist if they continue to write such vacuus articles. Maybe give them to open the paywall, then be able to relinquish that payment after having consumed it and it was of low quality.
- TheSpiceIsLife 8y ago
  Could you purchase one of those pre-paid debit cards?
- diegocerdan 8y ago
  Just clear your cookies.
chrisco255 8y ago
Dead tree currency's days are numbered. Crypto is a huge innovation, with plenty of benefits over fiat. Articles like this are looking sillier and sillier as Bitcoin et al continue to innovate, improve, scale, and defy all critics.
- themagician 8y ago
  I mean, the critics seem to be more and more right. A few years ago you had companies starting to accept bitcoin as payment. Most of them have gotten rid of that now because it failed.
  - seibelj 8y ago
    8 months ago BTC was $19k. Now it’s $7k but that’s still a 7x gain in 18 months. People criticize crypto every year, nothing new.
    - themagician 8y ago
      From a consumer perspective, BTC is something that came and went. Companies small and large got onboard, tried to actually use it as a currency, and then it all fell apart. The reality is the stability provided by a centralized monetary system is what most people want above all else. The only way cryptocurrency ever really becomes a transactsble currency is if it provides the same (or greater) stability. The cryptocurrency that will likely succeed is the one tied to a fiat currency and managed by a central authority. To not see that is to be pretty blind to the social reality of money.
      - chrisco255 8y ago
        Not really. Some people dabbled during the last boom, but the baseline for BTC looks like it's well above $5K. Like previous baselines, BTC looks to grow another order of magnitude from here over the next few years. Lightning network is a solid scalability solution that makes retail applications of BTC practical, ETFs are looking more and more likely, NYSE owner launching Bakkt for 401K deposits, etc. The tech is maturing quite rapidly. Meanwhile, the chain itself is highly available, highly resilient, and keeps on chugging along at 100% availability. Retail will come back to BTC, and then some. ETH will continue to advance the idea of a world computer (as will other chains) and what that implies. What we saw last year was a single season of a decades-long shift to crypto currency. Central authorities, by the time they make a move into this space, may be obsolete.
asenna 8y ago
I'm a digital nomad and I travel around a lot. Recently I'd lost my one main debit/ATM card, I was in Budapest and was running out of cash. I'd never used crypto ATMs before as I never felt the need based in the states but for the first time I looked up a BTC ATM (5 mins walk from my hostel), transferred some BTC over from my Coinbase account, withdrew cash within 20 mins. No Transferwise/WesternUnion, no calling up friends or family and figuring things out. This was the smoothest way I've ever received cash in a foreign country. I'm not commenting about price speculation of crypto, etc. But if this experience is possible right now, I bet there's going to be a lot more use-cases within 5 years with actual users.
- gaius 8y ago
  I bet there's going to be a lot more uses within 5 years. 99.99% of people will get a backup bank card before they get into bitcoin.
  - slededit 8y ago
    That's 760,000 people. I think BTC already has higher market penetration.
    - village-idiot 8y ago
      For speculation? Probably. For use as a regular means of transacting? I'd be surprised.
      - slededit 8y ago
        Speculate and you get the backup account for free.
        village-idiot 8y ago
        Or you lose all your money because speculation is quite risky.
  - 8y ago
emilfihlman 8y ago
Just based on the title, since it's paywalled: Cryptocurrencies are definitely not useless. Most of them just suffer from pretty shitty negatives, like ridiculous distribution of ownership, ridiculous manipulation, shitty security, infeasible settings, ... This includes pretty much all current cryptocurrencies. All it would take for a cryptocurrency (yes, a single per market pretty much, crypto-(euro|dollar|...) to take hold is for the central market to push it and be controllable by them (almost fully). The issue against that is that international laws and treaties prevent it.
stockkid 8y ago
> Blockchain advocates have yet to prove that the underlying technology can live up to the grand claims made for it. I agree with this sentiment. Since blockchain was introduced I have seen many people building solutions on top of it, but not many people actually using those solutions. Instead, it seems that the most prevalent use of blockchain technology or crypto currency is to boost the speculative wealth of their stakeholders.
- nyolfen 8y ago
  to me this seems like dismissing the web as a novelty in the 90s. we're in early days yet, and still assembling the ideas and fundamental components for what it makes possible.
  - acdha 8y ago
    By 1995, the web had clear and significant business value. Online commerce was rolling, access to information and services was driving a big rounds of investment at all sorts of companies, ordinary people were starting to use things (news, forums, dating, fantasy football, etc.) on a daily basis, etc. That was despite computers and network access being very expensive and horrible by modern standards – remember dialup and navigating at 14.4k? In contrast, we’re a decade into blockchain hype, adoption is far easier than getting online was, and yet the only reason most people know about it is ransomware, drug purchases, or speculation. The number of people who have any need to use it on a daily basis is still a tiny fraction of the population and only the speculators would be inconvenienced if it suddenly stopped working tomorrow.
dh303 8y ago
"The Economist and other magazines are useless" would be a better article...
dh303 8y ago
"The Economist and other magazines are useless" would be a better article.
21 8y ago
The Economist used to have more thoughtful and insightful articles. This article is about the quality you would find in a local general newspaper.
village-idiot 8y ago
Pretty level headed analysis. I'm still highly skeptical of the applications of blockchain technologies, it seems to me that the costs and incentive structures are all kinds of wacky, but anyone who thinks that BTC is going to become a mass-adopted currency is just deluding themselves at this point.
enterx 8y ago
By having the contracts transparent there will be much less need for public sector. Economist in general. ;)
FrozenVoid 8y ago
The real flaws with cryptocoins(partially excluding monero and similar projects that fix some of the flaws). 1.They're not anonymous(IP addresses are exposed). Less private than a bank(where each transaction is not viewed by every other bank user). 2.They're not providing fungibility(unlike gold), each transaction can be traced to source(via blockchain viewer). 3.They're requiring absurd amounts of electricity to generate(esp. Bitcoin which consumes enough electricity to power several countries) 4.They're not fast enough for real-time transaction and real-time finance/trade. Long confirmation times ruin potential to customer-centric interaction. 5.Volatility of value: coins depend on the market trend dictated by big spenders/owners who control vast majority of coins in a cryptocurrency. 6.Concentration of wealth: early adopters and cryptofarming facilities owners hold most of wealth(see point 5). 7.Lack of security: despite being protected by blockchain, most cryptowallets are at risk of being hacked due websites hosting them being far less secure than banks. Lots of cryptocurrency theft doesn't inspire confidence in it. 8.Limited goods market: cryptocurrency is still not adopted enough to be a worthwhile investment, majority of commercial use is for unregulated casinos, illegal goods/services, and donations.

76 points by tombrossman 8y ago

James Mickens has a pretty good breakdown of why blockchain isn't a good solution for most real-world problems: https://youtu.be/15RTC22Z2xI https://youtu.be/15RTC22Z2xI

poisonborz 8y ago
Wow, that was a rather dumb presentation. Basic arguments are like "anonymous nodes are bad because I can't sue them", "smart contracts are unneeded as we mostly just need to store static data" (supplied by authorities), "too much security is paranoid given real life trust with legal enforcement".
- BenoitP 8y ago
  I believe all these would be for regular already working uses cases that people are trying to shoehorn blockchains onto.
Chromozon 8y ago
A while ago, I talked with some guys from a blockchain technology company. They are doing mostly prototyping work for a variety of companies in different industries. However, one of the devs said that most of the problems they have been asked to solve could easily be done with a simple SQL database + logging. But since blockchain is the new, cool technology, everyone wants to be using it. I think blockchain has a lot of potential, but I haven't seen many companies really grasp how to use it correctly.
BenoitP 8y ago
That is quite a good vulgarization of the various properties that are at play between business cases and a blockchain; and a much better resources than OP's economist article. I wish he talked more about properties for the currency use case -which is its most useful usage-. ---- On another note, a vast majority of the targeted use cases would benefit from well engineered solutions; having redundant persistence, availability, immutability, ordering, tamper-resistance, non-repudiation. But all this is could be simply achieved with Kafka + PKI signing. Anyway, hyperledger fabric uses Kafka internally for the ordering... which leads me to say: If lighting candles in the dark and saying 'blockchain' 3 times is all it takes to make a VC appear and help you build good Kafka + PKI infrastructures to tackle real problems; then I'm all for maintaining this white lie based on all the wrong reasons (which would attention seeking? unspoken implicit promises of riches?). -Just my 2 Quantum Blockchain 2.0 AI Scalable cents.

daviddahl 8y ago

LOL. The establishment Economist magazine says it - it must be so.

bitlax 8y ago

Strong buy signal

EduardoBautista 8y ago
Until people go from buying crypto to spending crypto, I will have to agree with The Economist.
geofft 8y ago
If I'm reading the article right, the entire claim is that Bitcoin is useless as a day-to-day currency and is only useful for investment/speculation, so "Time to invest" isn't actually contradicting the article at all.
- rkeene2 8y ago
  However not all cryptocurrencies share the same issues as Bitcoin and the article lumps them all together. I'm a developer on a cryptocurrency called Nano whose goal is to be usable as day-to-day money. I think we are successful to a large degree.
  - madeofpalk 8y ago
    > I think we are successful to a large degree. Where, and how, can I use Nano?
    - rkeene2 8y ago
      Anywhere Nano is accepted, just like every unit of money. There are various mechanism for doing so, including phone-based apps, Internet based payment gateways, and hardware systems. If your question is rather on the current number of places which do accept this currency, probably the best place to look is online and Venezuela, which has been left without a local currency in effect.
      - madeofpalk 8y ago

andrewflnr 8y ago

I love how the subtitle flatly contradicts the actual title. What happened there? Did some editor feel the need to damp the article's criticism but lack the resolve to go farther than the title?

geofft 8y ago
I don't think they contradict each other—the article also talks about non-currency uses of blockchains.
jjxw 8y ago
No, there's a distinction between cryptocurrency and the underlying blockchain technology. There are a number of applications of blockchain that are promising such as in settling financial contracts that don't require issuing a speculative token to go along with it.
- andrewflnr 8y ago
  I see, I didn't read closely enough. Oops.

vidoc 8y ago

They happen to be extremely useful for buying recreational drugs on the internet. The author overlooks that.

akvadrako 8y ago
Exactly - without Bitcoin or alternatives I'm not sure these marketplaces would be feasible.

r32a_ 8y ago

I'm happy its been added to the list: https://99bitcoins.com/bitcoinobituaries/ https://99bitcoins.com/bitcoinobituaries/

madeofpalk 8y ago
Really, articles like this are good for Bitcoin.

mjfl 8y ago

The usefulness of cryptocurrency is not abstract: cryptocurrencies are useful for sending value over the internet and over international borders. Doing so without cryptocurrencies is very difficult and costly, requires large banks and multinational law firms.

rullelito 8y ago
Are you counting electricity or fees? Both are higher for cryptos of what I can remember.
- mjfl 8y ago
  I don't know how to quantify the electricity/carbon use of large banks and multinational law firms, but it probably isn't small? The current "safelow" gas price on Ethereum is 2.6 gWei, or $0.016. https://ethgasstation.info/ https://ethgasstation.info/ Stripe/Paypal both charge more than $0.30, or 15-30 times more.
  - village-idiot 8y ago
    Best estimates are that Bitcoin consumes a ton of power, more than Ireland or Israel at this point. Current estimates, and estimating this stuff is very hard, but the range we're looking at is in the 56-73TWh per year. Handily enough, we know exactly how much electricity Visa used in 2017, and it's about 0.19TWh[0]. Now obviously Visa alone isn't the end of the financial system, bank branches, payment processors, and other actors are involved. Personally, I highly doubt that they add up to another 55-72TWh, but if you can prove that, be my guest. Of course, at this point we're also missing a very important factor: transaction volume. Comparing financial systems in terms of total energy usage is very misleading, a far better way is to measure energy per transaction. And this is the point where it really falls apart for Bitcoin. As of today, bitcoin is averaging about 180,000 transactions a day. That's about 100 seconds of Visa's average volume[1]. Comparing fees is a terrible way to measure transaction cost in terms of kWh. First of all, Stripe and Paypal employ a lot of people, and people are quite expensive. Second, bitcoin miners are being compensated by the expected rewards of finding a block (or participating in a pool that finds one). This means that the transaction fee and the amount of electricity used simply may not be related at all, since the fee might drop below the electricity cost so long as the expected reward is bigger still. 0. https://usa.visa.com/dam/VCOM/download/corporate-responsibility/visa-2017-corporate-responsibility-report.pdf https://usa.visa.com/dam/VCOM/download/corporate-responsibil... 1. 150,000,000 transactions per day[2] / 86400 2. https://usa.visa.com/run-your-business/small-business-tools/retail.html https://usa.visa.com/run-your-business/small-business-tools/.... Theoretical (and heavily advertised) capacity is 24k, but a more prosaic 1.8k/s is more in line with a typical daily load.

PacifyFish 8y ago

I’m no bitcoin maximalist, but boy was that a lazy write-off: “Economists define a currency as something that can be at once a medium of exchange, a store of value and a unit of account. Lack of adoption and loads of volatility mean that cryptocurrencies satisfy none of those criteria... as things stand there is little reason to think that cryptocurrencies will remain more than an overcomplicated, untrustworthy casino.“ That bitcoin is a poor medium of exchange and unit of account is hard to argue against at this stage of adoption. But store of value? I’m more confident in the maintained value of Bitcoin than that of a Venezuelan Bolívar. That’s not a strong enough reason for me to hold bitcoin, but if I lived in Venezuela it sure as hell would be! Moving from the realm of currency to usefulness, there’s no faster & cheaper way to transfer money across national borders. Viewed in this light it’s just a younger, more easily stored, more fungible, more easily transferable gold. Now I do hold more gold than bitcoin (in USD, combined about 6% of my portfolio atm) because certainly risks remain. But to say it has no utility is just crazy! I guess precious metals are useless too. What’s their market cap again?

inimino 8y ago
Precious metals look cool and have held value in human society for thousands of years. Bitcoins are immaterial numbers in a distributed database that a tiny fraction of humanity has been interested in for a tiny fraction of human history. That the best use cases for cryptocurrencies found in ten years of trying are illegal doesn't say much for its utility.
- hd4 8y ago
  What other use cases are you expecting at this stage of adoption, considering it has been derided by all "serious concerns" as a fad and all established financial institutions have blockaded it? You are parroting the same dismissive media tune made by the people with a vested interest in the status quo remaining the status quo. The bitcoin logo also looks cool.
  - inimino 8y ago
    The use cases of cryptocurrencies are the same as any currency: paying for stuff. If enthusiasts think that paying for stuff with cryptocurrencies is going to become popular, I don't think it's just a "dismissive media tune" to point out that after ten years, it hasn't happened.

bufferoverflow 8y ago

I find them useful. Bitcoin maybe not as much, but Ethereum, Bitcoin Cash and many others are great. The easiest way to pay for things without getting screwed on the fees and silly local government controls.

prolikewh0a 8y ago
>silly local government controls. Like what?
- dd36 8y ago
  Criminal law.
  - TheSpiceIsLife 8y ago
    Tax law too.
- rusk 8y ago
  Capital controls I presume is what’s meant
dewey 8y ago
How are Bitcoin fees lower than traditional fiat transfers?

wggff 8y ago

Useless ? The primary function is to protect individual wealth against central banker meddling and corruption. My btc are up 1000x since 2011. It isn't a smooth ride but its definitely working great.

quickthrower2 8y ago

Useless? Useless like Paypal or Stripe? I forgot to get the memo and I have purchased products with great satisfaction with Bitcoin - oops. Oh and I found the page hard to read with ads and popups, so: https://outline.com/yaRUTm https://outline.com/yaRUTm

dougyoung 8y ago

I'm over my article limit with the Economist. If only there was a way I could pay for a subscription without a bank account.

chrisco255 8y ago
Seriously, it would be nice if someone invented a way to make microtransactions on the internet a reality!
- BenoitP 8y ago
  https://brave.com/ https://brave.com/ And btw they're currently having a BAT giveaway on the Desktop version. I currently have my 15 giveaway BATs in it (3.37 USD), and it is supposed to give them to site I use? I'd give some of them to open some paywalls, but not to the economist if they continue to write such vacuus articles. Maybe give them to open the paywall, then be able to relinquish that payment after having consumed it and it was of low quality.
TheSpiceIsLife 8y ago
Could you purchase one of those pre-paid debit cards?
diegocerdan 8y ago
Just clear your cookies.

chrisco255 8y ago

Dead tree currency's days are numbered. Crypto is a huge innovation, with plenty of benefits over fiat. Articles like this are looking sillier and sillier as Bitcoin et al continue to innovate, improve, scale, and defy all critics.

themagician 8y ago
I mean, the critics seem to be more and more right. A few years ago you had companies starting to accept bitcoin as payment. Most of them have gotten rid of that now because it failed.
- seibelj 8y ago
  8 months ago BTC was $19k. Now it’s $7k but that’s still a 7x gain in 18 months. People criticize crypto every year, nothing new.
  - themagician 8y ago
    From a consumer perspective, BTC is something that came and went. Companies small and large got onboard, tried to actually use it as a currency, and then it all fell apart. The reality is the stability provided by a centralized monetary system is what most people want above all else. The only way cryptocurrency ever really becomes a transactsble currency is if it provides the same (or greater) stability. The cryptocurrency that will likely succeed is the one tied to a fiat currency and managed by a central authority. To not see that is to be pretty blind to the social reality of money.
    - chrisco255 8y ago
      Not really. Some people dabbled during the last boom, but the baseline for BTC looks like it's well above $5K. Like previous baselines, BTC looks to grow another order of magnitude from here over the next few years. Lightning network is a solid scalability solution that makes retail applications of BTC practical, ETFs are looking more and more likely, NYSE owner launching Bakkt for 401K deposits, etc. The tech is maturing quite rapidly. Meanwhile, the chain itself is highly available, highly resilient, and keeps on chugging along at 100% availability. Retail will come back to BTC, and then some. ETH will continue to advance the idea of a world computer (as will other chains) and what that implies. What we saw last year was a single season of a decades-long shift to crypto currency. Central authorities, by the time they make a move into this space, may be obsolete.

asenna 8y ago

I'm a digital nomad and I travel around a lot. Recently I'd lost my one main debit/ATM card, I was in Budapest and was running out of cash. I'd never used crypto ATMs before as I never felt the need based in the states but for the first time I looked up a BTC ATM (5 mins walk from my hostel), transferred some BTC over from my Coinbase account, withdrew cash within 20 mins. No Transferwise/WesternUnion, no calling up friends or family and figuring things out. This was the smoothest way I've ever received cash in a foreign country. I'm not commenting about price speculation of crypto, etc. But if this experience is possible right now, I bet there's going to be a lot more use-cases within 5 years with actual users.

gaius 8y ago
I bet there's going to be a lot more uses within 5 years. 99.99% of people will get a backup bank card before they get into bitcoin.
- slededit 8y ago
  That's 760,000 people. I think BTC already has higher market penetration.
  - village-idiot 8y ago
    For speculation? Probably. For use as a regular means of transacting? I'd be surprised.
    - slededit 8y ago
      Speculate and you get the backup account for free.
      - village-idiot 8y ago
        Or you lose all your money because speculation is quite risky.
- 8y ago

emilfihlman 8y ago

Just based on the title, since it's paywalled: Cryptocurrencies are definitely not useless. Most of them just suffer from pretty shitty negatives, like ridiculous distribution of ownership, ridiculous manipulation, shitty security, infeasible settings, ... This includes pretty much all current cryptocurrencies. All it would take for a cryptocurrency (yes, a single per market pretty much, crypto-(euro|dollar|...) to take hold is for the central market to push it and be controllable by them (almost fully). The issue against that is that international laws and treaties prevent it.

stockkid 8y ago

> Blockchain advocates have yet to prove that the underlying technology can live up to the grand claims made for it. I agree with this sentiment. Since blockchain was introduced I have seen many people building solutions on top of it, but not many people actually using those solutions. Instead, it seems that the most prevalent use of blockchain technology or crypto currency is to boost the speculative wealth of their stakeholders.

nyolfen 8y ago
to me this seems like dismissing the web as a novelty in the 90s. we're in early days yet, and still assembling the ideas and fundamental components for what it makes possible.
- acdha 8y ago
  By 1995, the web had clear and significant business value. Online commerce was rolling, access to information and services was driving a big rounds of investment at all sorts of companies, ordinary people were starting to use things (news, forums, dating, fantasy football, etc.) on a daily basis, etc. That was despite computers and network access being very expensive and horrible by modern standards – remember dialup and navigating at 14.4k? In contrast, we’re a decade into blockchain hype, adoption is far easier than getting online was, and yet the only reason most people know about it is ransomware, drug purchases, or speculation. The number of people who have any need to use it on a daily basis is still a tiny fraction of the population and only the speculators would be inconvenienced if it suddenly stopped working tomorrow.

dh303 8y ago

"The Economist and other magazines are useless" would be a better article...

dh303 8y ago

"The Economist and other magazines are useless" would be a better article.

21 8y ago

The Economist used to have more thoughtful and insightful articles. This article is about the quality you would find in a local general newspaper.

village-idiot 8y ago

Pretty level headed analysis. I'm still highly skeptical of the applications of blockchain technologies, it seems to me that the costs and incentive structures are all kinds of wacky, but anyone who thinks that BTC is going to become a mass-adopted currency is just deluding themselves at this point.

enterx 8y ago

By having the contracts transparent there will be much less need for public sector. Economist in general. ;)

FrozenVoid 8y ago

The real flaws with cryptocoins(partially excluding monero and similar projects that fix some of the flaws). 1.They're not anonymous(IP addresses are exposed). Less private than a bank(where each transaction is not viewed by every other bank user). 2.They're not providing fungibility(unlike gold), each transaction can be traced to source(via blockchain viewer). 3.They're requiring absurd amounts of electricity to generate(esp. Bitcoin which consumes enough electricity to power several countries) 4.They're not fast enough for real-time transaction and real-time finance/trade. Long confirmation times ruin potential to customer-centric interaction. 5.Volatility of value: coins depend on the market trend dictated by big spenders/owners who control vast majority of coins in a cryptocurrency. 6.Concentration of wealth: early adopters and cryptofarming facilities owners hold most of wealth(see point 5). 7.Lack of security: despite being protected by blockchain, most cryptowallets are at risk of being hacked due websites hosting them being far less secure than banks. Lots of cryptocurrency theft doesn't inspire confidence in it. 8.Limited goods market: cryptocurrency is still not adopted enough to be a worthwhile investment, majority of commercial use is for unregulated casinos, illegal goods/services, and donations.