21 ms·

Sure, there are better systems in privacy terms. However, the bigger story is that the world is changing fast: a huge percentage of the world's population - in

Sure, there are better systems in privacy terms. However, the bigger story is that the world is changing fast: a huge percentage of the world's population - in China - now lives a reality of instant mobile payment. If you accept that the general population will always gravitate toward functional, reliable, cheap, centralized payment systems unless they have specific needs such as anonymity/illegality, and that those systems are improving rapidly in features and distribution, then the real challenge to future decentralized currency is getting anyone to give a damn.

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Barrin92 8y ago
I still don't understand what problem decentralised currency is supposed to solve. As you say, I want cheap, convenient transaction at low cost, and specifically concerning privacy I want to know who I send my money, and I want legal recourse should anything fishy happen. The privacy proposal of crypto in my opinion is bizarre. I am supposed to lay out my entire financial history in a public wallet (which I don't want), but trade with people who I don't know (which I don't want), and have all of it supervised by 'smart contracts', which are anything but smart and make it necessary to essentially put myself under surveillance?
- ftlio 8y ago
  It's trying to solve the problem of having to involve a 3rd party in on-line transactions. Chargebacks are expensive to deal with. Jurisdictions are expensive to deal with. Standing up a multinational e-commerce site requires a lot of lawyers and accountants. Will the risk presented by crypto always be greater than the risk of involving trusted third parties? Maybe. Maybe not.
  - walrus01 8y ago
    Counterpoint: There's a lot of people who will stop buying stuff online with such a system, once they have been bitten by a system that has truly irrevocable payments. Part of the reason why I trust buying random $25 used video games from eBay (using Paypal) is that I know I'm about 99% certain to get my money back if it never arrives, or arrives in poor condition. I can buy a used Cisco 48-port 1000BaseT/PoE switch on eBay and know that I have some degree of buyer protection. Or I can go to Newegg and buy a new $700 monitor and trust that if something goes terribly wrong with the transaction, Visa's buyer protection/chargeback system can be engaged. Moving to irrevocable online payments is basically the equivalent of handing a wad of cash to some stranger in a parking lot selling "new, sealed!" ipads out of the trunk of a car.
    - CamTin 8y ago
      I totally agree with you in practical terms, but what you're really saying is that you prefer the governance offered by Paypal and the credit card networks to the governance provided by the government: IOW, it wouldn't even occur to you (or most sane people) to file a claim in court over a $25 Atari cart you tried to buy online. In the society these courts are designed to serve (peasant agricultural economies), the courts were where these issues were hashed out, and a fair bit of the "state-iness" of the state derived from its ability to solve these kinds of problems for people. Increasingly, this kind of justice is inaccessible to ordinary people except through "customer support" mechanisms at institutions like Amazon or Paypal or by tweeting at their CEOs. One of the very real problems that cryptocurrency enthusiasts are concerned about (but IMO totally failing to actually solve) is that it seems like a really bad idea to leave such basic functions of state in the hands of difficult-or-impossible-to-regulate transnational enterprises. When will these players realize that they've got more "state-iness" than most actual states, and how will they use it?
      - mantas 8y ago
        You won't need a claim either. Chargeback is easy. So in CryptoWorld, people should go to court and try get their money back from anonymous seller? That'd be a field day for scammers.
- esotericn 8y ago
  > I am supposed to lay out my entire financial history in a public wallet Not at all. The fact that some transactions on some cryptocurrencies function in this way is a flaw, no-one actually desires that.
- SquishyPanda23 8y ago
  A lot of people are interested in it because they have a particular view of economics. In particular, they like that Bitcoin (1) has a fixed monetary supply, and (2) is difficult to regulate and tax.
  - village-idiot 8y ago
    Oh no, bitcoin is insanely easy to tax and regulate, they’ve just not bothered yet. A permanent ledger of all transactions is the tax man’s Dream.
    - SquishyPanda23 8y ago
      I think the difficulty largely comes from not being able to associate a public key with an individual.
      - village-idiot 8y ago
        De-anonymization is something that we already have a lot of experience with, specifically tying a device to an individual. There’s nothing special about a public key that makes this harder.
    - glitch003 8y ago
      I can't say I agree. A gov can't pry the secret key to my coins from my brain (yet). You can much more easily freeze a bank account and garnish whatever you wish. Additionally, Satoshi himself advised to never re-use a bitcoin address. It's foolish and makes it easy to link your transactions to a single entity (you). If you use a HD wallet, which almost every bitcoin wallet software supports, and is the default in the majority of them, you will not reuse an address. This is because it becomes impossible to tell if you sent money to yourself or another person.
      - village-idiot 8y ago
        Correct me if I’m wrong, but I believe the following two things are true about bitcoin addresses: 1. Once I know your public key, it’s trivial to prove that an address belongs to you, since an address is nothing more than the hash of a public key. 2. If I don’t know your public key when you receive funds, figuring it out is impossible. But once you spend that money, I now know the public key that received those funds, since only the private key associated with the original address could sign a new transactions. Those two alone should make recreating the tree of transactions a purely mechanical process, with a much lower cost than what it took to create the original chain. At this point it’s a bit like any other de-anonymizes toon attack, with the benefit of some entities being known and coercable, and some users helpfully posting addresses on their social media accounts. On the garnishment front: this kind of depends on scope. But the one thing we’ve seen is that all monetary security goes out the window when the attacker can take possession of you. This is why using technical solutions to such scenarios have always struck me as a bit silly.
- hakfoo 8y ago
  It seems like there are different messages for different audiences. The appeal of a trustless network is stronger in places with a history of surprise currency and banking-industry failures-- no one person can crash the system by fiat. OTOH, the use window is small-- situations where the currency is being undermined but electric/networking is reliable enough to do a large scale backup Bitcoin economy are pretty narrow. Venezuela might be the poster child for this. For another audience, the thought of "geographic independence" was appealing. It would cost the same and take basically the same time to pay someone in St. Petersberg, Russia or St. Petersberg, Florida. Really, this is still a space that conventional banking has been troublesome with. Things like the SEPA network help, but there are still loads of cases where it's cheapest to put cash in an envelope. Unfortunately, Bitcoin as-is is still pretty slow and expensive for that.
- PycptN2MH 8y ago
  The inventor said it well: "The root problem with conventional currency is all the trust that's required to make it work. The central bank must be trusted not to debase the currency, but the history of fiat currencies is full of breaches of that trust. Banks must be trusted to hold our money and transfer it electronically, but they lend it out in waves of credit bubbles with barely a fraction in reserve. We have to trust them with our privacy, trust them not to let identity thieves drain our accounts. Their massive overhead costs make micropayments impossible." Most agree that Bitcoin privacy is currently unsatisfactory. If it is not improved it should not be adopted generally. Legal recourse and low-cost transactions are layered onto the base protocol.
  - arcticbull 8y ago
    The inventor was trivially wrong, though. This was all born out of looking at a complex system, failing to understand it, declaring you've got a better idea, then learning over the course of a decade why the current system exists and that in fact you did not have a better idea. (1) Trust is not a problem, it's a huge optimization. The sheer power consumption of cryptocurrencies is hard, demonstrable proof that trust is an efficiency. (2) Debasing money (aka inflation) is a feature. It's a regular haircut for unproductive capital, and is, as designed, completely irrelevant to people who invest their capital. Even in most people's biggest investment, their own homes. (3) Banks are trusted and regulated. Exchanges are totally unrelated fly-by-night banks set up because being your own bank sucks. This is not an improvement. (4) Fractional reserve lending is fine because the FDIC guarantees the funds in the event of a run. This is a further efficiency, allowing the economy to move faster with freer access to capital. (5) Identity thieves draining your account at a traditional bank has recourse. As we've seen in crypto, that's where this is a real risk - you've got nobody to hold accountable. (6) Micropayments aren't something people want as it turns out.
    - jammygit 8y ago
      Good points, but I would argue that micropayments would be great if they required micro effort and no overhead. They would transform the ability of non profits to fundraise. Not that bitcoin offers that iirc, just saying.
- LowLevelHacker 8y ago
  Good God you sound stupid.
- anigbrowl 8y ago
  Central banks and government in general. It is government which guarantees the validity of fiat currency, so if you want to undermine governmental authority then attacking the monopoly on currency issuance is an obvious place to start. I'm just describing this rather than endorsing it btw.
- masonicb00m 8y ago
  Debasement.
- TACIXAT 8y ago
  I'm a pretty huge bitcoin critic because I view it from the problems that I want to solve. I want fast, low fee micro transactions and it doesn't serve that need. If you look at another perspective though, of people whose economies are collapsing, or people living under authoritarian regimes, it serves a need.
  - solotronics 8y ago
    have you seen Lightning network? it is a second layer on top of Bitcoin that allows near instantaneous transactions for basically zero fee. people are using it today to buy stuff although it is still in beta testing.
    - Nursie 8y ago
      It's a huge failure. It's difficult to use, it requires always-on nodes, there appear to be multiple failure modes where funds can be lost to the counterparty with no recourse, and it requires the commitment of large amounts of currency to fund its channels and make the system work. It's basically a joke at this point.
      - ric2b 8y ago
        > It's difficult to use Not _that_ difficult. It's more complex to set-up than using Bitcoin directly but with an analogy to savings and checking accounts I think most people would be able to use it. > it requires always-on nodes First of all it's not always on, a phone that connects once a day or once a week is fine (the period depends on the channel parameters that your wallet software uses). And even then that's only if you want to 100% trustlessly receive funds. To send you don't need to do it and by using watch-towers you can receive without having to periodically go online as well. > and it requires the commitment of large amounts of currency to fund its channels and make the system work. Only as much as you want to send. > It's basically a joke at this point. To people that haven't tried it or are overly critical of an in-development protocol with a small network of interested volunteers behind it.
  - zhoujianfu 8y ago
- ghostinmachine 8y ago
  I'm not sure why it wasn't the first thing that was said, but let me say it. It's to give freedom. Freedom to make and distribute your own currency without borders, rules or monopoly. An outcome of this would be elimination of an artificial recession. There's a reason why Bitcoin paper was published in 2008. Another outcome would be reduction in the authority of banks and governments. There's a reason why all the banking institutions and governments are quick to call it evil. Reason is that control of money grants banks and governments great control over citizenry. There's no denying that it's far from perfect and has to be updated to solve all the bugs, many resembling to fiats.
  - not_kurt_godel 8y ago
    An outcome of cryptocurrency would not be elimination of artificial recession as evidenced by the repeated losses of 75% of value practically overnight. Seriously, do you even understand the words you are saying or are you just blindly parrotting something you read on the Internet?
    - ghostinmachine 8y ago
      I do understand. It's not an outcome of specifically cryptocurrency but distributed nature of it. The losses that we see are because of the uncertainty surrounding it. It's a form of currency and should be used as one. In the current market it's being used as more like trading stocks than currency. Currently it's not completely distributed, from the people hoarding it to the ICOs to the whales and to centralized exchanges, it all needs to be taken into account, those would be bugs. I would like the idea of limiting amount of money one can hold and spend in a limited period to avoid such disasters. This would limit the freedom too. But we will have to talk about how much freedom does one person/entity need, (yours ends where mine begins). It's not perfect yet, but it's a nice idea. If perfected it would a lot harder to artificially manipulate than the current system. At the very least, a lot many people would be responsible for any disaster instead of a few.
      - adwn 8y ago
        > I would like the idea of limiting amount of money one can hold and spend in a limited period to avoid such disasters. This would limit the freedom too. But we will have to talk about how much freedom does one person/entity need, (yours ends where mine begins). And yet, two posts up you complained about control of people's freedom: >>> Reason is that control of money grants banks and governments great control over citizenry. Do you no see the irony in that contradiction? > If perfected [...] Hah! What a huge "if" you're smuggling into your hypothesis right there.
- stale2002 8y ago
  The problem is a way to send censorship resistant financial transactions. If you don't find this to be useful, then you should consider yourself fortunate and privileged. In the same way that if you do not need TOR for your life, then you are also fortunate. But there are literally billions of people in the world, right now, who are living under what I'd describe as authoritarian regimes.
- kakarot 8y ago
  Bitcoin doesn't solve anything. Its mission has been completely subverted by external financial interests, and its leadership relies on censorship and FUD to survive. Cryptocurrency in general, however, solves the problem of payment processors strangling businesses and individuals at the whim of CorpGov. It allows entities who are operating within what they believe to be moral and ethical bounds to do commerce without needing the blessing of a totalitarian state like China or the US.
  - sekai 8y ago
    What leadership? BTC has no leadership. If you mean developers, you really overestimate their influence.
    - kakarot 8y ago
      Sounds like you aren't very familiar with Bitcoin. I'm talking about Core, and Blockstream. If you were truly familiar with what's been going in with Bitcoin for the last couple of years, those names alone would be enough. Considering they maintain the /r/Bitcoin subreddit and pay millions of dollars towards astroturfing campaigns and subversion tactics, considering how they have completely transformed the Bitcoin community into a mob with half a dozen talking points and bone to pick with every single other coin out there, I don't know how you could say I'm overestimating their influence. I strongly suggest reading a few of the links in the first paragraph of this post[0] to get an idea of what has been going on. [0] https://old.reddit.com/r/btc/comments/9lfjrb/frequently_asked_questions_and_information_thread/ https://old.reddit.com/r/btc/comments/9lfjrb/frequently_aske...
- rapnie 8y ago
  > I still don't understand what problem decentralised currency is supposed to solve. I agree with all your other points, but e.g. in China people may soon wish they still had a decentralized payment system. Especially if you have a low social credit score, and the government starts to decide in detail what you can and cannot buy.
  - pryce 8y ago
    No one except power companies and current holders of large amounts of cryptocurrency benefits by the staggering amount of energy being poured into this completely asinine model. If cryptocurrency is supposed to bring the benefits of decentralization to the masses and usher in an era where the "little guy" is more free, it needs to solve that equation somehow.
    - glitch003 8y ago
      There are many things being worked on to solve the energy usage. Proof of Stake is one, and different types of it are already in use at scale (dPoS on EOS, etc)
  - bsder 8y ago
    > e.g. in China people may soon wish they still had a decentralized payment system. As there will be no way back from a bad social score, this is coming. The key problem to solve is how to create an exchange that the authorities can't shut down.
    - lb1lf 8y ago
      -And that problem is difficult to solve even in a well-functioning democracy. When visiting Sweden recently, I was surprised to find a number of bars, coffee shops and the like only accepting digital payments - no cash. While this makes lots of sense from the vendor's perspective - handling cash is expensive and inconvenient - a customer may feel different about it. These vendors presumably decided that the benefits of not having to handle cash outweighed the risk of alienating a small percentage of their customers (As 'everybody' in Sweden carries debit cards and cell phones with e-payment solutions, few people rely on cash exclusively). Now imagine what happens if the authorities also held the power to say that you WOULD not accept cash. That would make anyone assisting someone with a low social score buy items normally not available to them an accessory to subversion of the state (or something similarly eerie-sounding). Not good. Unless you are The State.
- mrhappyunhappy 8y ago
  I recommend you look into privacy coins because your comment makes it clear you are not aware of them. Crypto is about immutable transactions where no single entity can deny you your freedom by simply altering your balances. Right now, your bank can click a mouse and your money is gone. You can try to prove you had it but unless you have indisputable proof you’re at the mercy of the bank. Crypto has big challenges for sure, such as legal recourse, stability, reversible transactions and other issues but the problems it seeks to solve are real. They may not affect you personally, perhaps not now, but there is always that possibility that money could disappear and your rights denied. This already happens every day- just google PayPal freezes.
- koonsolo 8y ago
  Which bank is going to make the world currency?
- thefounder 8y ago
  Some people want to use digital cash and that's what crypto coins are. As far as I'm concerned they should be stable(pegged to a known currency) and fast to transact to solve this problem. Bitcoin just doesn't make sense for paymenys due its volatility.
  - mkirklions 8y ago
    This sounds great until an irresponsible government prints money.
    - thefounder 8y ago
      Not all the goverments are irresponsible. Just use a different currency(i.e eur). It's pretty clear to me now that in practice goverments do a better work(stability wise) than the free market.
- decentralised 8y ago
  The problem it solves is that it enables two parties to exchange digital values automatically and without interference. The problem manifests itself in full view in situations where citizens are asked to leave their money or possessions in a country before they are allowed to leave or in situations where the inflation rate makes surviving on a fiat currency next to impossible (ie: Venezuela). In the western world, the problem of interference in your ability to do commerce with whoever you wish might be harder to detect but just recently SWIFT decided to enact the US government's capital controls on Iran for EU companies, despite the EU having declared they would stand by the agreement... For a EU based company or individual there is now very little chance to do legal commerce in Iran, Venezuela, Cuba, North Korea, Syria, Myanmar and a few other countries because of the US's influence on the money markets.
- LoSboccacc 8y ago
  > what problem decentralised currency is supposed to solve. for example the central european bank deciding to devalue the euro, making us all 20% poorer in a few short months of 2016 not that bitcoin solves the fluctuation issue, but it's one of the issues that having a central bank gives us the people in our microeconomics when the politicians go all in on macroeconomics
  - ricardoreis 8y ago
    So the question was: "What problem does X solve?" And your answer is: "Well, problem Y. Except it doesn't solve it." Or am I missing something?
    - LoSboccacc 8y ago
      Decentralized might solve problem Y. Bitcoin which is a subset of decentralized currency doesn't solve Y. Other currencies might, depending on how their value is anchored.
- jasode 8y ago
  >I still don't understand what problem decentralised currency is supposed to solve. The problem(s) that proponents hope decentralized cryptocurrency will solve have grown and evolved. So far, Bitcoin doesn't seem to fully solve them but these are some of the bullet points the idealists want: (1) real (not nominal) "buying power" wealth protection : A currency that government couldn't inflate seemed to be the original and biggest motivation from the perspective of Satoshi Nakamoto. The genesis block[0] of Bitcoin has an embedded comment about government bailout (debasement) because of the 2008 financial crash. (2) transactions of buying and selling without intermediaries: The charitable version of this scenario would be sellers accepting payments without paying fees and rent to bank-owned networks like VISA/Mastercard. Or transfer funds between accounts without bank wire fees. Sellers can also sell controversial items without being "approved" by companies like PayPal or Stripe. (What some call "censorship" or "deplatforming" by denying access to the payments infrastructure.) The uncharitable version of this scenario is buying & selling illegal things like drugs on Silk Road. (3) privacy of transactions: This is somewhat related to (2) because of no intermediaries. If a shopper uses Google Checkout, Amazon Payments, Apple Pay, or VISA/Mastercard to make a payment, that information can be used against them. This doesn't necessarily have to be illegal drugs. Some people are worried that buying a legitimate item such as a certain book can be unfairly used against them. The age of pervasive data collection and machine learning means buying "50 Shades of Gray" could result in insurance companies charging you higher rates or employment background checking firms lowering your "hiring" score. The Chinese "social credit" system using pervasive data about its citizens might be an example. (4) bypass government currency controls: citizens of restrictive countries like Venezuela want to protect their savings from corruption by converting it into a cryptocurrency. This is related to (1). (5) universal basic income : I just threw this last one in here because HN front page sometimes has a proposal to use decentralized cryptocurrency as a way to implement UBI. I'm skeptical of cryptocurrencies promises but I wanted to try to fairly lay out its aspirations. Are there any more I missed? In any case, different participants of cryptocurrency have different priorities as to the benefits of decentralized trustless currency. Some prioritize wealth protection more than censorship-free payments. Or vice versa. [0] https://en.bitcoin.it/wiki/Genesis_block#Raw_block_data https://en.bitcoin.it/wiki/Genesis_block#Raw_block_data
  - 8y ago
- tsukikage 8y ago
  There are many problems cryptocurrencies solve. You can make a list just by noting where actual turnover in the real-world crypto economies goes in practice: * How do I receive payment for illegal goods I am selling without going through traditional regulated entities that want to attach my real-world identity to the payment in their records? * How do I provide gambling services to customers in jurisdictions that prohibit this? * How do I profit from people willing to put their money into transparent pyramid schemes or straight-up scams, without risk of recourse from traditional police / legal systems? * How do I launder money? * How do I skim from the shadow economy i.e. in entities engaged in all of the above activities, without committing an obvious crime myself? Legal oversight can be an unwanted transaction overhead that introduces risk, and laws restrict freedom. Ask instead what problems decentralised currency is supposed to solve that are legal and moral to solve and cannot be solved more cheaply through traditional systems involving a regulated third party subject to the rule of law.
  - mkirklions 8y ago
    You didnt mention that governments print money. Lots of money. Thats my number 1.
    - umanwizard 8y ago
      Why's that a bad thing?
      - sparkie 8y ago
        Because a dollar is not always worth a dollar. A bitcoin is always worth a bitcoin. The dollar doesn't have a "reference rate," as it is subject to arbitrary inflation. The dollar has had several reference rates in the past, based on weight in silver, and later, gold. The purchasing power of a dollar has declined rapidly since these reference rates were abandoned. A bitcoin has a reference rate which is eventually 1 in 21M. There is an initial inflationary period until it reaches that, but we're already 1 in ~18M, so most of the inflation has already occurred. We will be very close to the 21M in another 13 years, and after that we will only be adding small fractions. If you had a dollar in 1918, it would be worth only a small fraction of a dollar today. 1/16 or 1/40, depending on what estimations you use. If past performance is anything to go off, then a dollar in 2118 will be worth 1/16th of a dollar today. If you hold onto 16 dollars today, they will have the purchasing power of 1 dollar in 2118. On the other hand, if you hold 16 bitcoin today, you have 16 of 18M of the bitcoin supply. In 2118, you will have 16 of the ~21M total supply. In the same 100 years, bitcoin will inflate by most 16%. The dollar will inflate by 160% in the same period, if the past century is anything to go off (it isn't, this century will be much much worse). Or put it in to shorter timeframe. If inflation is approximately linear over the 100 years, then every 6 1/4 years, your bitcoin will lose 1% of its purchasing power. In the same timescale, your dollar will lose 10%. Which of these are you going to save money with? The above is based on the assumption that demand for bitcoin will not increase in relation to demand for the dollar. Given Gresham's Law, this is highly unlikely.
- arendtio 8y ago
  I don't think you want to know who send your money. In fact, you don't even care. All you want to know is what the money is for. Online as well as in a supermarket, you are rarely even asked for an ID (age-restricted goods aside).
- ataturk 8y ago
  I can't believe I'm defending cryptos because I think they're a giant scam in their current form, but here goes: Millions of Chinese would like to have their wealth outside of the totalitarian control of their own government. That's probably the #1 use case--you can't trust government. Just because you grew up in a time in the West where everything has been fairly civil towards the average citizen, please understand that this has been largely an anomaly (also largely an illusion). This is why I support keeping cash around and why cash should still be necessary. If crytocurrency is worth anything, it has to be as portable and easy to use as cash is today. And governments tend to seize cash they find moving across borders and so forth, because portable wealth is dangerous to the elites.
- pteredactyl 8y ago
  Remove government monopoly of money.
- dwild 8y ago
  I keep saying this but personally I see bitcoin as a good way to transfer value, nothing else. As soon as you consider it that way, it does solve every issue you got with it. You buy bitcoin > You send bitcoin > He get bitcoin > He sell bitcoin, all that hopefully happens in less than a few hours, to avoid market fluctuation the most. The only wallet is at the exchange, hopefully for them, it's moving quickly too. > I am supposed to lay out my entire financial history in a public wallet Don't hold bitcoin, you make a wallet, you buy, you send, you scrap the wallet. > trade with people who I don't know Cryptocurrencies doesn't solve that, HTTPS solve that, you solve that by trust. Sure the old ways to transfer money require less trust from you because you can always revert it by calling your bank, but then it's the other side that need to trust you (and he has much less to works with).
  - UncleMeat 8y ago
    If you are going to go through an exchange anyway, how is BTC helping you? Both parties still need to trust coinbase or whatever and ultimately the transaction is identical to using venmo.
    - dwild 8y ago
      I can't use Venmo, thus I can't exchange anything between you and me. Cryptocurrencies is this neutral third party that won't care about borders. Venmo could be your exchange, while mine would be something else. That's the beauty of it. We are lucky, we have ways to handle money transfer relatively easily between US and Canada (my country) so that's not so much an issue, but that issue exist.
      - UncleMeat 8y ago
        Okay. So a bank. I bank with foo and can happily send money to you if you bank with bar. How does this function differently?
- mbreedlove 8y ago
  > I am supposed to lay out my entire financial history in a public wallet (which I don't want) Monero offers an obfuscated public ledger that prevents others from spying on the source, amount, or destination of the transaction.
8bitsrule 8y ago
There are many dangers to de-anonymized purchases. And, associating that 'specific need' with 'illegality' is non-productive. 'Money' is a very funny idea. Wrapping it in paternalism only layers on another real threat.
Mengkudulangsat 8y ago
China / US / Europe are not good proving grounds for Bitcoin. Those are large single markets served by a single currency. Southeast Asia on the other hand, is fragmented across 10 financial systems. What Bitcoin offers, that centralized payment systems cannot in Southeast Asia; is the prospect of having an overlay on top of the local financial systems that is open and interoperable by any startup looking to provide local solutions to the payment puzzle. A wallet app developed in Vietnam for example, can easily receive Bitcoins but cannot easily receive Rupiah. The only requirement is to have proliferation of Bitcoin-fiat exchanges across the region so people can jump in and out of the Bitcoin ecosystem when the need arises. This part of Bitcoin development is not rocket science, just requires time and hard work.
- twblalock 8y ago
  > The only requirement is to have proliferation of Bitcoin-fiat exchanges across the region No, that's not the only requirement. Other requirements include teaching large numbers of nontechnical people what the heck a cryptocurrency is, how to get and secure a wallet, how to get an account on an exchange, how to convert Bitcoin to and from their local currency, why they can't carry Bitcoin around in their pocket like cash, and who they should talk to if their Bitcoins get stolen or their exchange gets hacked. Or, they could just get a WeChat or Alipay account, which are going to be available in southeast Asia pretty soon. Boom, done.
  - Mengkudulangsat 8y ago
    WeChat and Alipay are here already, but the market is already fragmented when they arrive. They also pose the risk of vendor-lock, which is worrisome to local businesses and regulators due to their links to China. It's one thing to have a locally-approved payments monopoly, it's another thing if that monopoly is foreign-owned. If Southeast Asia wants to produce a region-wide equivalent to WeChat / Alipay, then an open, neutral & interoperable platform is the best way to do it, politically speaking.
    - wingerlang 8y ago
evantahler 8y ago
https://www.merit.me/ https://www.merit.me/
deafcalculus 8y ago
It solves the problem of not having to rely on a central bank to maintain the value of currency. It may seem unnecessary in the US, but pretty damn useful in countries like Zimbabwe where the privilege to print money has been abused. The opposite problem of deflation (a la Japan) seems more likely to hit the US. As population declines (and with it the demand for housing), it'll become necessary to destroy money with negative interest rates to reach the target inflation, boost investment, and check unemployment. But that's damn difficult with currency notes. And there'll be political opposition to any effort to target higher inflation or fiscal policy that has the government borrowing and spending more. The behaviour of UK and EZ governments and their austerity policies (especially towards Greece) do not inspire much confidence. An alternative currency might start looking attractive when that happens. Bitcoin is even more deflationary and won't help. But some other cryptocurrency could. It's also a matter of principle. There are some who don't like the idea of central bank monopoly. A competing currency could be beneficial even if the only thing it accomplishes is keeping central bankers more vigilant and honest.
- dustingetz 8y ago
  ...is hypothesized to solve. Do we know of any actual economist who endorses cryptocurrency as a soln to central banks? I listen to macro voices. They pointed out that wealth is so sharply concentrated in bitcoin that if all the cash in the world was replaced by crypto equivalent, it would instantly mint an oligarchy of cryptokings with nationstate levels of resources and it would cause a world war. Obviously the current world order would resist that.
  - deafcalculus 8y ago
    Nope! Most cryptocurrencies are even more deflationary and are designed to benefit the protocol designers and early investors. That doesn't mean we should stop trying! I haven't seen any good arguments for why a cryptocurrency cannot possibly work. Once the dot-com phase of crypto ends, there may be more serious efforts to make a currency that's actually useful. I'd argue that people in Greece could use one right now if there was a sane way to bootstrap the process.
writepub 8y ago
Centralised payments is a massive problem, that you aren't aware of unless you're a merchant. Merchants end up subsidising the 2-3% cash back deals peddled by the Visa/AmEx of the world. They have little negotiating power against entrenched monopolies, just look up the AmEx case recently ruled on by the supreme court, or the million other online complaints of merchants unable to reduce the cost of accepting payments. PayPals, Squares, Braintrees of the world routinely blacklist legitimate merchants, because an error in their system might just be a blip on their operations, while it bankrupts small businesses reliant on cash flow. The more recent trend of banning businesses for appeasement of the social media lynchmobs is yet another reason for decentralisation. We need a payments solution that is fair, reliable and free of censorship for merchants to really feel safe in a world increasingly moving online. If such a decentralised system removes the 5% milked by middlemen who add little value, and lowers prices of goods for the end user, while putting more money into merchants' accounts, I'd call it a massive win for everyone. Bitcoin is only the first iteration, a viable proof of concept of you will. In a few years, you'll have every feature that Visa provides, including protections for the end user, without a Central monopoly keeping all the wealth actually created by merchants and consumers
Brian_K_White 8y ago
The system Stallman approves of in this article is not decentralized.
frnkshin 8y ago
Didn't China gravitate towards mobile payment due to counterfeit money? And also the centralized mobile payment system makes Chinese government to track every purchases that are made in the country.
pteredactyl 8y ago
When govCoin says you can't leave the country or buy a home because your friend said something against the government, then you may want a decentralized currency. China is doing this with their social credit (sesame) system. Are you affiliated with China? Do you live there or do business there?

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Barrin92 8y ago

I still don't understand what problem decentralised currency is supposed to solve. As you say, I want cheap, convenient transaction at low cost, and specifically concerning privacy I want to know who I send my money, and I want legal recourse should anything fishy happen. The privacy proposal of crypto in my opinion is bizarre. I am supposed to lay out my entire financial history in a public wallet (which I don't want), but trade with people who I don't know (which I don't want), and have all of it supervised by 'smart contracts', which are anything but smart and make it necessary to essentially put myself under surveillance?

ftlio 8y ago
It's trying to solve the problem of having to involve a 3rd party in on-line transactions. Chargebacks are expensive to deal with. Jurisdictions are expensive to deal with. Standing up a multinational e-commerce site requires a lot of lawyers and accountants. Will the risk presented by crypto always be greater than the risk of involving trusted third parties? Maybe. Maybe not.
- walrus01 8y ago
  Counterpoint: There's a lot of people who will stop buying stuff online with such a system, once they have been bitten by a system that has truly irrevocable payments. Part of the reason why I trust buying random $25 used video games from eBay (using Paypal) is that I know I'm about 99% certain to get my money back if it never arrives, or arrives in poor condition. I can buy a used Cisco 48-port 1000BaseT/PoE switch on eBay and know that I have some degree of buyer protection. Or I can go to Newegg and buy a new $700 monitor and trust that if something goes terribly wrong with the transaction, Visa's buyer protection/chargeback system can be engaged. Moving to irrevocable online payments is basically the equivalent of handing a wad of cash to some stranger in a parking lot selling "new, sealed!" ipads out of the trunk of a car.
  - CamTin 8y ago
    I totally agree with you in practical terms, but what you're really saying is that you prefer the governance offered by Paypal and the credit card networks to the governance provided by the government: IOW, it wouldn't even occur to you (or most sane people) to file a claim in court over a $25 Atari cart you tried to buy online. In the society these courts are designed to serve (peasant agricultural economies), the courts were where these issues were hashed out, and a fair bit of the "state-iness" of the state derived from its ability to solve these kinds of problems for people. Increasingly, this kind of justice is inaccessible to ordinary people except through "customer support" mechanisms at institutions like Amazon or Paypal or by tweeting at their CEOs. One of the very real problems that cryptocurrency enthusiasts are concerned about (but IMO totally failing to actually solve) is that it seems like a really bad idea to leave such basic functions of state in the hands of difficult-or-impossible-to-regulate transnational enterprises. When will these players realize that they've got more "state-iness" than most actual states, and how will they use it?
    - mantas 8y ago
      You won't need a claim either. Chargeback is easy. So in CryptoWorld, people should go to court and try get their money back from anonymous seller? That'd be a field day for scammers.
esotericn 8y ago
> I am supposed to lay out my entire financial history in a public wallet Not at all. The fact that some transactions on some cryptocurrencies function in this way is a flaw, no-one actually desires that.
SquishyPanda23 8y ago
A lot of people are interested in it because they have a particular view of economics. In particular, they like that Bitcoin (1) has a fixed monetary supply, and (2) is difficult to regulate and tax.
- village-idiot 8y ago
  Oh no, bitcoin is insanely easy to tax and regulate, they’ve just not bothered yet. A permanent ledger of all transactions is the tax man’s Dream.
  - SquishyPanda23 8y ago
    I think the difficulty largely comes from not being able to associate a public key with an individual.
    - village-idiot 8y ago
      De-anonymization is something that we already have a lot of experience with, specifically tying a device to an individual. There’s nothing special about a public key that makes this harder.
  - glitch003 8y ago
    I can't say I agree. A gov can't pry the secret key to my coins from my brain (yet). You can much more easily freeze a bank account and garnish whatever you wish. Additionally, Satoshi himself advised to never re-use a bitcoin address. It's foolish and makes it easy to link your transactions to a single entity (you). If you use a HD wallet, which almost every bitcoin wallet software supports, and is the default in the majority of them, you will not reuse an address. This is because it becomes impossible to tell if you sent money to yourself or another person.
    - village-idiot 8y ago
      Correct me if I’m wrong, but I believe the following two things are true about bitcoin addresses: 1. Once I know your public key, it’s trivial to prove that an address belongs to you, since an address is nothing more than the hash of a public key. 2. If I don’t know your public key when you receive funds, figuring it out is impossible. But once you spend that money, I now know the public key that received those funds, since only the private key associated with the original address could sign a new transactions. Those two alone should make recreating the tree of transactions a purely mechanical process, with a much lower cost than what it took to create the original chain. At this point it’s a bit like any other de-anonymizes toon attack, with the benefit of some entities being known and coercable, and some users helpfully posting addresses on their social media accounts. On the garnishment front: this kind of depends on scope. But the one thing we’ve seen is that all monetary security goes out the window when the attacker can take possession of you. This is why using technical solutions to such scenarios have always struck me as a bit silly.
hakfoo 8y ago
It seems like there are different messages for different audiences. The appeal of a trustless network is stronger in places with a history of surprise currency and banking-industry failures-- no one person can crash the system by fiat. OTOH, the use window is small-- situations where the currency is being undermined but electric/networking is reliable enough to do a large scale backup Bitcoin economy are pretty narrow. Venezuela might be the poster child for this. For another audience, the thought of "geographic independence" was appealing. It would cost the same and take basically the same time to pay someone in St. Petersberg, Russia or St. Petersberg, Florida. Really, this is still a space that conventional banking has been troublesome with. Things like the SEPA network help, but there are still loads of cases where it's cheapest to put cash in an envelope. Unfortunately, Bitcoin as-is is still pretty slow and expensive for that.
PycptN2MH 8y ago
The inventor said it well: "The root problem with conventional currency is all the trust that's required to make it work. The central bank must be trusted not to debase the currency, but the history of fiat currencies is full of breaches of that trust. Banks must be trusted to hold our money and transfer it electronically, but they lend it out in waves of credit bubbles with barely a fraction in reserve. We have to trust them with our privacy, trust them not to let identity thieves drain our accounts. Their massive overhead costs make micropayments impossible." Most agree that Bitcoin privacy is currently unsatisfactory. If it is not improved it should not be adopted generally. Legal recourse and low-cost transactions are layered onto the base protocol.
- arcticbull 8y ago
  The inventor was trivially wrong, though. This was all born out of looking at a complex system, failing to understand it, declaring you've got a better idea, then learning over the course of a decade why the current system exists and that in fact you did not have a better idea. (1) Trust is not a problem, it's a huge optimization. The sheer power consumption of cryptocurrencies is hard, demonstrable proof that trust is an efficiency. (2) Debasing money (aka inflation) is a feature. It's a regular haircut for unproductive capital, and is, as designed, completely irrelevant to people who invest their capital. Even in most people's biggest investment, their own homes. (3) Banks are trusted and regulated. Exchanges are totally unrelated fly-by-night banks set up because being your own bank sucks. This is not an improvement. (4) Fractional reserve lending is fine because the FDIC guarantees the funds in the event of a run. This is a further efficiency, allowing the economy to move faster with freer access to capital. (5) Identity thieves draining your account at a traditional bank has recourse. As we've seen in crypto, that's where this is a real risk - you've got nobody to hold accountable. (6) Micropayments aren't something people want as it turns out.
  - jammygit 8y ago
    Good points, but I would argue that micropayments would be great if they required micro effort and no overhead. They would transform the ability of non profits to fundraise. Not that bitcoin offers that iirc, just saying.
LowLevelHacker 8y ago
Good God you sound stupid.
anigbrowl 8y ago
Central banks and government in general. It is government which guarantees the validity of fiat currency, so if you want to undermine governmental authority then attacking the monopoly on currency issuance is an obvious place to start. I'm just describing this rather than endorsing it btw.
masonicb00m 8y ago
Debasement.
TACIXAT 8y ago
I'm a pretty huge bitcoin critic because I view it from the problems that I want to solve. I want fast, low fee micro transactions and it doesn't serve that need. If you look at another perspective though, of people whose economies are collapsing, or people living under authoritarian regimes, it serves a need.
- solotronics 8y ago
  have you seen Lightning network? it is a second layer on top of Bitcoin that allows near instantaneous transactions for basically zero fee. people are using it today to buy stuff although it is still in beta testing.
  - Nursie 8y ago
    It's a huge failure. It's difficult to use, it requires always-on nodes, there appear to be multiple failure modes where funds can be lost to the counterparty with no recourse, and it requires the commitment of large amounts of currency to fund its channels and make the system work. It's basically a joke at this point.
    - ric2b 8y ago
      > It's difficult to use Not _that_ difficult. It's more complex to set-up than using Bitcoin directly but with an analogy to savings and checking accounts I think most people would be able to use it. > it requires always-on nodes First of all it's not always on, a phone that connects once a day or once a week is fine (the period depends on the channel parameters that your wallet software uses). And even then that's only if you want to 100% trustlessly receive funds. To send you don't need to do it and by using watch-towers you can receive without having to periodically go online as well. > and it requires the commitment of large amounts of currency to fund its channels and make the system work. Only as much as you want to send. > It's basically a joke at this point. To people that haven't tried it or are overly critical of an in-development protocol with a small network of interested volunteers behind it.
- zhoujianfu 8y ago
ghostinmachine 8y ago
I'm not sure why it wasn't the first thing that was said, but let me say it. It's to give freedom. Freedom to make and distribute your own currency without borders, rules or monopoly. An outcome of this would be elimination of an artificial recession. There's a reason why Bitcoin paper was published in 2008. Another outcome would be reduction in the authority of banks and governments. There's a reason why all the banking institutions and governments are quick to call it evil. Reason is that control of money grants banks and governments great control over citizenry. There's no denying that it's far from perfect and has to be updated to solve all the bugs, many resembling to fiats.
- not_kurt_godel 8y ago
  An outcome of cryptocurrency would not be elimination of artificial recession as evidenced by the repeated losses of 75% of value practically overnight. Seriously, do you even understand the words you are saying or are you just blindly parrotting something you read on the Internet?
  - ghostinmachine 8y ago
    I do understand. It's not an outcome of specifically cryptocurrency but distributed nature of it. The losses that we see are because of the uncertainty surrounding it. It's a form of currency and should be used as one. In the current market it's being used as more like trading stocks than currency. Currently it's not completely distributed, from the people hoarding it to the ICOs to the whales and to centralized exchanges, it all needs to be taken into account, those would be bugs. I would like the idea of limiting amount of money one can hold and spend in a limited period to avoid such disasters. This would limit the freedom too. But we will have to talk about how much freedom does one person/entity need, (yours ends where mine begins). It's not perfect yet, but it's a nice idea. If perfected it would a lot harder to artificially manipulate than the current system. At the very least, a lot many people would be responsible for any disaster instead of a few.
    - adwn 8y ago
      > I would like the idea of limiting amount of money one can hold and spend in a limited period to avoid such disasters. This would limit the freedom too. But we will have to talk about how much freedom does one person/entity need, (yours ends where mine begins). And yet, two posts up you complained about control of people's freedom: >>> Reason is that control of money grants banks and governments great control over citizenry. Do you no see the irony in that contradiction? > If perfected [...] Hah! What a huge "if" you're smuggling into your hypothesis right there.
stale2002 8y ago
The problem is a way to send censorship resistant financial transactions. If you don't find this to be useful, then you should consider yourself fortunate and privileged. In the same way that if you do not need TOR for your life, then you are also fortunate. But there are literally billions of people in the world, right now, who are living under what I'd describe as authoritarian regimes.
kakarot 8y ago
Bitcoin doesn't solve anything. Its mission has been completely subverted by external financial interests, and its leadership relies on censorship and FUD to survive. Cryptocurrency in general, however, solves the problem of payment processors strangling businesses and individuals at the whim of CorpGov. It allows entities who are operating within what they believe to be moral and ethical bounds to do commerce without needing the blessing of a totalitarian state like China or the US.
- sekai 8y ago
  What leadership? BTC has no leadership. If you mean developers, you really overestimate their influence.
  - kakarot 8y ago
    Sounds like you aren't very familiar with Bitcoin. I'm talking about Core, and Blockstream. If you were truly familiar with what's been going in with Bitcoin for the last couple of years, those names alone would be enough. Considering they maintain the /r/Bitcoin subreddit and pay millions of dollars towards astroturfing campaigns and subversion tactics, considering how they have completely transformed the Bitcoin community into a mob with half a dozen talking points and bone to pick with every single other coin out there, I don't know how you could say I'm overestimating their influence. I strongly suggest reading a few of the links in the first paragraph of this post[0] to get an idea of what has been going on. [0] https://old.reddit.com/r/btc/comments/9lfjrb/frequently_asked_questions_and_information_thread/ https://old.reddit.com/r/btc/comments/9lfjrb/frequently_aske...
rapnie 8y ago
> I still don't understand what problem decentralised currency is supposed to solve. I agree with all your other points, but e.g. in China people may soon wish they still had a decentralized payment system. Especially if you have a low social credit score, and the government starts to decide in detail what you can and cannot buy.
- pryce 8y ago
  No one except power companies and current holders of large amounts of cryptocurrency benefits by the staggering amount of energy being poured into this completely asinine model. If cryptocurrency is supposed to bring the benefits of decentralization to the masses and usher in an era where the "little guy" is more free, it needs to solve that equation somehow.
  - glitch003 8y ago
    There are many things being worked on to solve the energy usage. Proof of Stake is one, and different types of it are already in use at scale (dPoS on EOS, etc)
- bsder 8y ago
  > e.g. in China people may soon wish they still had a decentralized payment system. As there will be no way back from a bad social score, this is coming. The key problem to solve is how to create an exchange that the authorities can't shut down.
  - lb1lf 8y ago
    -And that problem is difficult to solve even in a well-functioning democracy. When visiting Sweden recently, I was surprised to find a number of bars, coffee shops and the like only accepting digital payments - no cash. While this makes lots of sense from the vendor's perspective - handling cash is expensive and inconvenient - a customer may feel different about it. These vendors presumably decided that the benefits of not having to handle cash outweighed the risk of alienating a small percentage of their customers (As 'everybody' in Sweden carries debit cards and cell phones with e-payment solutions, few people rely on cash exclusively). Now imagine what happens if the authorities also held the power to say that you WOULD not accept cash. That would make anyone assisting someone with a low social score buy items normally not available to them an accessory to subversion of the state (or something similarly eerie-sounding). Not good. Unless you are The State.
mrhappyunhappy 8y ago
I recommend you look into privacy coins because your comment makes it clear you are not aware of them. Crypto is about immutable transactions where no single entity can deny you your freedom by simply altering your balances. Right now, your bank can click a mouse and your money is gone. You can try to prove you had it but unless you have indisputable proof you’re at the mercy of the bank. Crypto has big challenges for sure, such as legal recourse, stability, reversible transactions and other issues but the problems it seeks to solve are real. They may not affect you personally, perhaps not now, but there is always that possibility that money could disappear and your rights denied. This already happens every day- just google PayPal freezes.
koonsolo 8y ago
Which bank is going to make the world currency?
thefounder 8y ago
Some people want to use digital cash and that's what crypto coins are. As far as I'm concerned they should be stable(pegged to a known currency) and fast to transact to solve this problem. Bitcoin just doesn't make sense for paymenys due its volatility.
- mkirklions 8y ago
  This sounds great until an irresponsible government prints money.
  - thefounder 8y ago
    Not all the goverments are irresponsible. Just use a different currency(i.e eur). It's pretty clear to me now that in practice goverments do a better work(stability wise) than the free market.
decentralised 8y ago
The problem it solves is that it enables two parties to exchange digital values automatically and without interference. The problem manifests itself in full view in situations where citizens are asked to leave their money or possessions in a country before they are allowed to leave or in situations where the inflation rate makes surviving on a fiat currency next to impossible (ie: Venezuela). In the western world, the problem of interference in your ability to do commerce with whoever you wish might be harder to detect but just recently SWIFT decided to enact the US government's capital controls on Iran for EU companies, despite the EU having declared they would stand by the agreement... For a EU based company or individual there is now very little chance to do legal commerce in Iran, Venezuela, Cuba, North Korea, Syria, Myanmar and a few other countries because of the US's influence on the money markets.
LoSboccacc 8y ago
> what problem decentralised currency is supposed to solve. for example the central european bank deciding to devalue the euro, making us all 20% poorer in a few short months of 2016 not that bitcoin solves the fluctuation issue, but it's one of the issues that having a central bank gives us the people in our microeconomics when the politicians go all in on macroeconomics
- ricardoreis 8y ago
  So the question was: "What problem does X solve?" And your answer is: "Well, problem Y. Except it doesn't solve it." Or am I missing something?
  - LoSboccacc 8y ago
    Decentralized might solve problem Y. Bitcoin which is a subset of decentralized currency doesn't solve Y. Other currencies might, depending on how their value is anchored.
jasode 8y ago
>I still don't understand what problem decentralised currency is supposed to solve. The problem(s) that proponents hope decentralized cryptocurrency will solve have grown and evolved. So far, Bitcoin doesn't seem to fully solve them but these are some of the bullet points the idealists want: (1) real (not nominal) "buying power" wealth protection : A currency that government couldn't inflate seemed to be the original and biggest motivation from the perspective of Satoshi Nakamoto. The genesis block[0] of Bitcoin has an embedded comment about government bailout (debasement) because of the 2008 financial crash. (2) transactions of buying and selling without intermediaries: The charitable version of this scenario would be sellers accepting payments without paying fees and rent to bank-owned networks like VISA/Mastercard. Or transfer funds between accounts without bank wire fees. Sellers can also sell controversial items without being "approved" by companies like PayPal or Stripe. (What some call "censorship" or "deplatforming" by denying access to the payments infrastructure.) The uncharitable version of this scenario is buying & selling illegal things like drugs on Silk Road. (3) privacy of transactions: This is somewhat related to (2) because of no intermediaries. If a shopper uses Google Checkout, Amazon Payments, Apple Pay, or VISA/Mastercard to make a payment, that information can be used against them. This doesn't necessarily have to be illegal drugs. Some people are worried that buying a legitimate item such as a certain book can be unfairly used against them. The age of pervasive data collection and machine learning means buying "50 Shades of Gray" could result in insurance companies charging you higher rates or employment background checking firms lowering your "hiring" score. The Chinese "social credit" system using pervasive data about its citizens might be an example. (4) bypass government currency controls: citizens of restrictive countries like Venezuela want to protect their savings from corruption by converting it into a cryptocurrency. This is related to (1). (5) universal basic income : I just threw this last one in here because HN front page sometimes has a proposal to use decentralized cryptocurrency as a way to implement UBI. I'm skeptical of cryptocurrencies promises but I wanted to try to fairly lay out its aspirations. Are there any more I missed? In any case, different participants of cryptocurrency have different priorities as to the benefits of decentralized trustless currency. Some prioritize wealth protection more than censorship-free payments. Or vice versa. [0] https://en.bitcoin.it/wiki/Genesis_block#Raw_block_data https://en.bitcoin.it/wiki/Genesis_block#Raw_block_data
- 8y ago
tsukikage 8y ago
There are many problems cryptocurrencies solve. You can make a list just by noting where actual turnover in the real-world crypto economies goes in practice: * How do I receive payment for illegal goods I am selling without going through traditional regulated entities that want to attach my real-world identity to the payment in their records? * How do I provide gambling services to customers in jurisdictions that prohibit this? * How do I profit from people willing to put their money into transparent pyramid schemes or straight-up scams, without risk of recourse from traditional police / legal systems? * How do I launder money? * How do I skim from the shadow economy i.e. in entities engaged in all of the above activities, without committing an obvious crime myself? Legal oversight can be an unwanted transaction overhead that introduces risk, and laws restrict freedom. Ask instead what problems decentralised currency is supposed to solve that are legal and moral to solve and cannot be solved more cheaply through traditional systems involving a regulated third party subject to the rule of law.
- mkirklions 8y ago
  You didnt mention that governments print money. Lots of money. Thats my number 1.
  - umanwizard 8y ago
    Why's that a bad thing?
    - sparkie 8y ago
      Because a dollar is not always worth a dollar. A bitcoin is always worth a bitcoin. The dollar doesn't have a "reference rate," as it is subject to arbitrary inflation. The dollar has had several reference rates in the past, based on weight in silver, and later, gold. The purchasing power of a dollar has declined rapidly since these reference rates were abandoned. A bitcoin has a reference rate which is eventually 1 in 21M. There is an initial inflationary period until it reaches that, but we're already 1 in ~18M, so most of the inflation has already occurred. We will be very close to the 21M in another 13 years, and after that we will only be adding small fractions. If you had a dollar in 1918, it would be worth only a small fraction of a dollar today. 1/16 or 1/40, depending on what estimations you use. If past performance is anything to go off, then a dollar in 2118 will be worth 1/16th of a dollar today. If you hold onto 16 dollars today, they will have the purchasing power of 1 dollar in 2118. On the other hand, if you hold 16 bitcoin today, you have 16 of 18M of the bitcoin supply. In 2118, you will have 16 of the ~21M total supply. In the same 100 years, bitcoin will inflate by most 16%. The dollar will inflate by 160% in the same period, if the past century is anything to go off (it isn't, this century will be much much worse). Or put it in to shorter timeframe. If inflation is approximately linear over the 100 years, then every 6 1/4 years, your bitcoin will lose 1% of its purchasing power. In the same timescale, your dollar will lose 10%. Which of these are you going to save money with? The above is based on the assumption that demand for bitcoin will not increase in relation to demand for the dollar. Given Gresham's Law, this is highly unlikely.
arendtio 8y ago
I don't think you want to know who send your money. In fact, you don't even care. All you want to know is what the money is for. Online as well as in a supermarket, you are rarely even asked for an ID (age-restricted goods aside).
ataturk 8y ago
I can't believe I'm defending cryptos because I think they're a giant scam in their current form, but here goes: Millions of Chinese would like to have their wealth outside of the totalitarian control of their own government. That's probably the #1 use case--you can't trust government. Just because you grew up in a time in the West where everything has been fairly civil towards the average citizen, please understand that this has been largely an anomaly (also largely an illusion). This is why I support keeping cash around and why cash should still be necessary. If crytocurrency is worth anything, it has to be as portable and easy to use as cash is today. And governments tend to seize cash they find moving across borders and so forth, because portable wealth is dangerous to the elites.
pteredactyl 8y ago
Remove government monopoly of money.
dwild 8y ago
I keep saying this but personally I see bitcoin as a good way to transfer value, nothing else. As soon as you consider it that way, it does solve every issue you got with it. You buy bitcoin > You send bitcoin > He get bitcoin > He sell bitcoin, all that hopefully happens in less than a few hours, to avoid market fluctuation the most. The only wallet is at the exchange, hopefully for them, it's moving quickly too. > I am supposed to lay out my entire financial history in a public wallet Don't hold bitcoin, you make a wallet, you buy, you send, you scrap the wallet. > trade with people who I don't know Cryptocurrencies doesn't solve that, HTTPS solve that, you solve that by trust. Sure the old ways to transfer money require less trust from you because you can always revert it by calling your bank, but then it's the other side that need to trust you (and he has much less to works with).
- UncleMeat 8y ago
  If you are going to go through an exchange anyway, how is BTC helping you? Both parties still need to trust coinbase or whatever and ultimately the transaction is identical to using venmo.
  - dwild 8y ago
    I can't use Venmo, thus I can't exchange anything between you and me. Cryptocurrencies is this neutral third party that won't care about borders. Venmo could be your exchange, while mine would be something else. That's the beauty of it. We are lucky, we have ways to handle money transfer relatively easily between US and Canada (my country) so that's not so much an issue, but that issue exist.
    - UncleMeat 8y ago
      Okay. So a bank. I bank with foo and can happily send money to you if you bank with bar. How does this function differently?
mbreedlove 8y ago
> I am supposed to lay out my entire financial history in a public wallet (which I don't want) Monero offers an obfuscated public ledger that prevents others from spying on the source, amount, or destination of the transaction.

8bitsrule 8y ago

There are many dangers to de-anonymized purchases. And, associating that 'specific need' with 'illegality' is non-productive. 'Money' is a very funny idea. Wrapping it in paternalism only layers on another real threat.

Mengkudulangsat 8y ago

China / US / Europe are not good proving grounds for Bitcoin. Those are large single markets served by a single currency. Southeast Asia on the other hand, is fragmented across 10 financial systems. What Bitcoin offers, that centralized payment systems cannot in Southeast Asia; is the prospect of having an overlay on top of the local financial systems that is open and interoperable by any startup looking to provide local solutions to the payment puzzle. A wallet app developed in Vietnam for example, can easily receive Bitcoins but cannot easily receive Rupiah. The only requirement is to have proliferation of Bitcoin-fiat exchanges across the region so people can jump in and out of the Bitcoin ecosystem when the need arises. This part of Bitcoin development is not rocket science, just requires time and hard work.

twblalock 8y ago
> The only requirement is to have proliferation of Bitcoin-fiat exchanges across the region No, that's not the only requirement. Other requirements include teaching large numbers of nontechnical people what the heck a cryptocurrency is, how to get and secure a wallet, how to get an account on an exchange, how to convert Bitcoin to and from their local currency, why they can't carry Bitcoin around in their pocket like cash, and who they should talk to if their Bitcoins get stolen or their exchange gets hacked. Or, they could just get a WeChat or Alipay account, which are going to be available in southeast Asia pretty soon. Boom, done.
- Mengkudulangsat 8y ago
  WeChat and Alipay are here already, but the market is already fragmented when they arrive. They also pose the risk of vendor-lock, which is worrisome to local businesses and regulators due to their links to China. It's one thing to have a locally-approved payments monopoly, it's another thing if that monopoly is foreign-owned. If Southeast Asia wants to produce a region-wide equivalent to WeChat / Alipay, then an open, neutral & interoperable platform is the best way to do it, politically speaking.
  - wingerlang 8y ago

evantahler 8y ago

https://www.merit.me/ https://www.merit.me/

deafcalculus 8y ago

It solves the problem of not having to rely on a central bank to maintain the value of currency. It may seem unnecessary in the US, but pretty damn useful in countries like Zimbabwe where the privilege to print money has been abused. The opposite problem of deflation (a la Japan) seems more likely to hit the US. As population declines (and with it the demand for housing), it'll become necessary to destroy money with negative interest rates to reach the target inflation, boost investment, and check unemployment. But that's damn difficult with currency notes. And there'll be political opposition to any effort to target higher inflation or fiscal policy that has the government borrowing and spending more. The behaviour of UK and EZ governments and their austerity policies (especially towards Greece) do not inspire much confidence. An alternative currency might start looking attractive when that happens. Bitcoin is even more deflationary and won't help. But some other cryptocurrency could. It's also a matter of principle. There are some who don't like the idea of central bank monopoly. A competing currency could be beneficial even if the only thing it accomplishes is keeping central bankers more vigilant and honest.

dustingetz 8y ago
...is hypothesized to solve. Do we know of any actual economist who endorses cryptocurrency as a soln to central banks? I listen to macro voices. They pointed out that wealth is so sharply concentrated in bitcoin that if all the cash in the world was replaced by crypto equivalent, it would instantly mint an oligarchy of cryptokings with nationstate levels of resources and it would cause a world war. Obviously the current world order would resist that.
- deafcalculus 8y ago
  Nope! Most cryptocurrencies are even more deflationary and are designed to benefit the protocol designers and early investors. That doesn't mean we should stop trying! I haven't seen any good arguments for why a cryptocurrency cannot possibly work. Once the dot-com phase of crypto ends, there may be more serious efforts to make a currency that's actually useful. I'd argue that people in Greece could use one right now if there was a sane way to bootstrap the process.

writepub 8y ago

Centralised payments is a massive problem, that you aren't aware of unless you're a merchant. Merchants end up subsidising the 2-3% cash back deals peddled by the Visa/AmEx of the world. They have little negotiating power against entrenched monopolies, just look up the AmEx case recently ruled on by the supreme court, or the million other online complaints of merchants unable to reduce the cost of accepting payments. PayPals, Squares, Braintrees of the world routinely blacklist legitimate merchants, because an error in their system might just be a blip on their operations, while it bankrupts small businesses reliant on cash flow. The more recent trend of banning businesses for appeasement of the social media lynchmobs is yet another reason for decentralisation. We need a payments solution that is fair, reliable and free of censorship for merchants to really feel safe in a world increasingly moving online. If such a decentralised system removes the 5% milked by middlemen who add little value, and lowers prices of goods for the end user, while putting more money into merchants' accounts, I'd call it a massive win for everyone. Bitcoin is only the first iteration, a viable proof of concept of you will. In a few years, you'll have every feature that Visa provides, including protections for the end user, without a Central monopoly keeping all the wealth actually created by merchants and consumers

Brian_K_White 8y ago

The system Stallman approves of in this article is not decentralized.

frnkshin 8y ago

Didn't China gravitate towards mobile payment due to counterfeit money? And also the centralized mobile payment system makes Chinese government to track every purchases that are made in the country.

pteredactyl 8y ago

When govCoin says you can't leave the country or buy a home because your friend said something against the government, then you may want a decentralized currency. China is doing this with their social credit (sesame) system. Are you affiliated with China? Do you live there or do business there?