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It was already tried. It was called Bitcoin. It failed spectacularly. At least this looks like it could work. I trust my government more than I trust these com

by jrvxo 7y ago

It was already tried. It was called Bitcoin. It failed spectacularly. At least this looks like it could work. I trust my government more than I trust these companies so I will keep using fiat, but this may be an option for other people.

sins 7y ago
Could you elaborate on what Bitcoin failed at?
- ianai 7y ago
  Conception. It’s pitched as a replacement for government backed, fiat currency. But I’ve never heard or seen a convincing, coherent explanation that makes it clear this is a currency. For one, a currency can’t be reliant on an internet connection for validity. My 1$ bill in my wallet absolutely does not rely on that. In fact, there’s an entire country validating that dollars usefulness. A gold coin essentially answers the usual doubts in fiat currency.
  - lawn 7y ago
    > But I’ve never heard or seen a convincing, coherent explanation that makes it clear this is a currency Cryptocurrencies is a better type of money for a few reasons: * More acceptable than other digital money (banks and payment processors might say no) * More easily divisible than for example gold coins and gold bars * It's sound money whereas fiat is not (nobody can arbitrarily increase the supply) * Much more portable. You can send any amount to anyone in the world, as long as they have internet. To be clear, cryptocurrencies are like cash but in digital form. It's a great medium exchange, but it suffers from low adoption meaning it's a bad store of value (but so is fiat) and a bad unit of account (but so is gold). > For one, a currency can’t be reliant on an internet connection for validity. My 1$ bill in my wallet absolutely does not rely on that So you don't consider digital fiat currencies then? Me not having internet for a period of time doesn't invalidate my cryptocurrency holdings. I just need internet to spend it (a fair constraint for digital money). > A gold coin essentially answers the usual doubts in fiat currency. Except for the fact that you can't send gold coins digitally. Also, it's much more difficult to check for gold coins. And difficult to transport. It's easy with cryptocurrencies.
    - ianai 7y ago
      Here’s an interesting discussion of why a fixed currency supply hinders the market from clearing (and other ailments) https://economics.stackexchange.com/questions/166/from-an-economics-perspective-what-are-the-ramifications-of-a-currency-with-fix/168#168 https://economics.stackexchange.com/questions/166/from-an-ec... You also can’t spend your bitcoins while you’re offline.
      - lawn 7y ago
        Bitcoin uses a fixed currency supply, but it's not inherent to all cryptocurrencies. > You also can’t spend your bitcoins while you’re offline. Is that supposed to invalidate my points? Especially since I placed emphasis on them being a digital currency and I even said so in my comment?
    - ubercow13 7y ago
      >nobody can arbitrarily increase the supply Why is this good? This seems like a missing feature
      - lawn 7y ago
        This isn't about deflationary vs inflationary money, because you can encode any type of currency policy. Instead it's about no single entity can suddenly decide "let's issue trillions of dollars to repay our debt!", which erodes any savings you have and can in the worst case collapse the economy (see hyperinflation). What I guess you're after is having the ability to respond to the economic climate by stimulating the economy? Then let me introduce you to the concept of sound money and what Austrian economists have to say about it.[1] The basic point is it's impossible for a single actor to predict the market behavior, it's why a planned economy doesn't work, because the market consists of actors who only act in their own best interest and don't have perfect knowledge. [1]: https://mises.org/library/principle-sound-money https://mises.org/library/principle-sound-money Edit: It is indeed possible to change the currency policy... If the community agrees, which is a very tall order.
        7y ago
- jrvxo 7y ago
  On being a currency, since its price fluctuates too much to be taken seriously, so it's used as an investment instead.
  - moccachino 7y ago
    Of all the bizarre phenomenons in the world, I think the Bitcoin-as-an-investment takes the cake. People spend a ton of energy (that could otherwise to actual useful things) on shifting around bits that they then claim are very valuable. You could make a similar claim about fiat money except that actually makes commerce easier. Bitcoin is not a good way to transfer value since like you said it's too volatile for a currency. So it's built on nothing, it does nothing and underpins nothing, it wastes huge amounts of otherwise useful energy and that makes it a good investment? Maybe I'm just too dumb to see the genius of it.
    - lawn 7y ago
      You know, I too really dislike the investment focus of most people. If it's not usable, it's just a bigger-fools-game. And price volatility is a definite concern. Yet many do use it as a currency, volatility isn't a showstopper. Just look at the use in darknet markets, most serious VPNs and VPS services offer it and you can buy all sorts of stuff on for example Webhallen or Inet (two of the biggest Swedish online computer stores). > So it's built on nothing, it does nothing and underpins nothing And this is wrong. It's secured by cryptography and game theory. The big thing it does is fairly simple: It enables digital payments without a trusted third party. It's relevant for businesses who cannot accept credit cards and there are thousands of stories where startups gets their accounts frozen, for arbitrary reasons, which may tank their business. I wrote about this and more here: https://whycryptocurrencies.com/ https://whycryptocurrencies.com/ > it wastes huge amounts of otherwise useful energy Actually most of the energy comes from renewable sources, which would be wasted otherwise. The Bitcoin mining industry is so competitive, it wouldn't be profitable otherwise. I don't want to wave away the concerns as nothing, because it is a valid concern, but there are tons of other things we waste much more energy on.
      - 7y ago
- hjk05 7y ago
  I tried to buy a cup of coffee recently at a bitcoin only cafe. Though I didn’t end up paying with bitcoin because it took a day for the bitcoin atm deposit to clear. So I asked a friend who worked in the building to spot me a cup of coffee, and he paid... by making a line on a piece of paper they used to do bookkeeping denoted in fiat because no-one wanted to go through the hassle of bitcoin transfers and no one had enough trust in the currency to keep prices in bitcoins, so they just tracked the costs in fiat. All of this in a “bitcoin only” cafe. Bitcoin as a penny-stock investment opportunity still seems successful, but as a viable currency it seems to have failed. And now cue the people saying that bitcoin was never actually intended to be used like a digital coin...
  - asah 7y ago
    Don't forget high transaction costs for BTC.
    - sowbug 7y ago
      Currently about 12 cents US.
      - ricanare 7y ago
        12 cents is a lot, since it is static regardless of the transaction size. Small transactions at 12 cents fee are ridiculously expensive. You need low fee + 0-conf for small transactions (e.g. BCH). 12 cents is negligible for large transactions, hence why people call it a store of value. And since bitcoin doesn't scale, transaction costs will skyrocket again to crazy transaction fees of 50-100$ easily if it starts being used.
      - joshuahedlund 7y ago
        Where are you getting this? Why does bitinfocharts.com show a Median transaction fee of $1.85 ?
        eric_cc 7y ago
        It's definitely not $1.85 lol. You can try sending a few sats between your own wallets to test it if you're genuinely curious.
- M2Ys4U 7y ago
  Everything, pretty much.
- navigatesol 7y ago
  >Could you elaborate on what Bitcoin failed at? I wouldn't say it's failed, but I don't see it succeeding, either. Is Bitcoin more or less mainstream than it was 2 years ago? Are transactions faster? Is it used at more retailers? I don't see any of that. It seems like it's only a tool for speculation.
- sonnyblarney 7y ago
  "Could you elaborate on what Bitcoin failed at?" BTC failed to be a currency that could be used for practical purposes. There's really nowhere to spend BTC today that matters. If Amazon, Costco and AirBnB etc. allowed BTC, well, others might join, and we'd possibly see real circulation. For whatever reason, it was never meant to be.
entropea 7y ago
The government is heavily lobbied by these companies, so essentially the government is mostly just these companies.
- jrvxo 7y ago
  I said "my government", which for obvious reasons doesn't have to be the one the US has
  - entropea 7y ago
    I didn't specify a government. The same holds true for most western countries. We have fairly global neoliberalism.
sctb 7y ago
We detached this subthread from https://news.ycombinator.com/item?id=20210979 https://news.ycombinator.com/item?id=20210979 and marked it off-topic.

by jrvxo 7y ago

sins 7y ago

Could you elaborate on what Bitcoin failed at?

ianai 7y ago
Conception. It’s pitched as a replacement for government backed, fiat currency. But I’ve never heard or seen a convincing, coherent explanation that makes it clear this is a currency. For one, a currency can’t be reliant on an internet connection for validity. My 1$ bill in my wallet absolutely does not rely on that. In fact, there’s an entire country validating that dollars usefulness. A gold coin essentially answers the usual doubts in fiat currency.
- lawn 7y ago
  > But I’ve never heard or seen a convincing, coherent explanation that makes it clear this is a currency Cryptocurrencies is a better type of money for a few reasons: * More acceptable than other digital money (banks and payment processors might say no) * More easily divisible than for example gold coins and gold bars * It's sound money whereas fiat is not (nobody can arbitrarily increase the supply) * Much more portable. You can send any amount to anyone in the world, as long as they have internet. To be clear, cryptocurrencies are like cash but in digital form. It's a great medium exchange, but it suffers from low adoption meaning it's a bad store of value (but so is fiat) and a bad unit of account (but so is gold). > For one, a currency can’t be reliant on an internet connection for validity. My 1$ bill in my wallet absolutely does not rely on that So you don't consider digital fiat currencies then? Me not having internet for a period of time doesn't invalidate my cryptocurrency holdings. I just need internet to spend it (a fair constraint for digital money). > A gold coin essentially answers the usual doubts in fiat currency. Except for the fact that you can't send gold coins digitally. Also, it's much more difficult to check for gold coins. And difficult to transport. It's easy with cryptocurrencies.
  - ianai 7y ago
    Here’s an interesting discussion of why a fixed currency supply hinders the market from clearing (and other ailments) https://economics.stackexchange.com/questions/166/from-an-economics-perspective-what-are-the-ramifications-of-a-currency-with-fix/168#168 https://economics.stackexchange.com/questions/166/from-an-ec... You also can’t spend your bitcoins while you’re offline.
    - lawn 7y ago
      Bitcoin uses a fixed currency supply, but it's not inherent to all cryptocurrencies. > You also can’t spend your bitcoins while you’re offline. Is that supposed to invalidate my points? Especially since I placed emphasis on them being a digital currency and I even said so in my comment?
  - ubercow13 7y ago
    >nobody can arbitrarily increase the supply Why is this good? This seems like a missing feature
    - lawn 7y ago
      This isn't about deflationary vs inflationary money, because you can encode any type of currency policy. Instead it's about no single entity can suddenly decide "let's issue trillions of dollars to repay our debt!", which erodes any savings you have and can in the worst case collapse the economy (see hyperinflation). What I guess you're after is having the ability to respond to the economic climate by stimulating the economy? Then let me introduce you to the concept of sound money and what Austrian economists have to say about it.[1] The basic point is it's impossible for a single actor to predict the market behavior, it's why a planned economy doesn't work, because the market consists of actors who only act in their own best interest and don't have perfect knowledge. [1]: https://mises.org/library/principle-sound-money https://mises.org/library/principle-sound-money Edit: It is indeed possible to change the currency policy... If the community agrees, which is a very tall order.
      - 7y ago
jrvxo 7y ago
On being a currency, since its price fluctuates too much to be taken seriously, so it's used as an investment instead.
- moccachino 7y ago
  Of all the bizarre phenomenons in the world, I think the Bitcoin-as-an-investment takes the cake. People spend a ton of energy (that could otherwise to actual useful things) on shifting around bits that they then claim are very valuable. You could make a similar claim about fiat money except that actually makes commerce easier. Bitcoin is not a good way to transfer value since like you said it's too volatile for a currency. So it's built on nothing, it does nothing and underpins nothing, it wastes huge amounts of otherwise useful energy and that makes it a good investment? Maybe I'm just too dumb to see the genius of it.
  - lawn 7y ago
    You know, I too really dislike the investment focus of most people. If it's not usable, it's just a bigger-fools-game. And price volatility is a definite concern. Yet many do use it as a currency, volatility isn't a showstopper. Just look at the use in darknet markets, most serious VPNs and VPS services offer it and you can buy all sorts of stuff on for example Webhallen or Inet (two of the biggest Swedish online computer stores). > So it's built on nothing, it does nothing and underpins nothing And this is wrong. It's secured by cryptography and game theory. The big thing it does is fairly simple: It enables digital payments without a trusted third party. It's relevant for businesses who cannot accept credit cards and there are thousands of stories where startups gets their accounts frozen, for arbitrary reasons, which may tank their business. I wrote about this and more here: https://whycryptocurrencies.com/ https://whycryptocurrencies.com/ > it wastes huge amounts of otherwise useful energy Actually most of the energy comes from renewable sources, which would be wasted otherwise. The Bitcoin mining industry is so competitive, it wouldn't be profitable otherwise. I don't want to wave away the concerns as nothing, because it is a valid concern, but there are tons of other things we waste much more energy on.
    - 7y ago
hjk05 7y ago
I tried to buy a cup of coffee recently at a bitcoin only cafe. Though I didn’t end up paying with bitcoin because it took a day for the bitcoin atm deposit to clear. So I asked a friend who worked in the building to spot me a cup of coffee, and he paid... by making a line on a piece of paper they used to do bookkeeping denoted in fiat because no-one wanted to go through the hassle of bitcoin transfers and no one had enough trust in the currency to keep prices in bitcoins, so they just tracked the costs in fiat. All of this in a “bitcoin only” cafe. Bitcoin as a penny-stock investment opportunity still seems successful, but as a viable currency it seems to have failed. And now cue the people saying that bitcoin was never actually intended to be used like a digital coin...
- asah 7y ago
  Don't forget high transaction costs for BTC.
  - sowbug 7y ago
    Currently about 12 cents US.
    - ricanare 7y ago
      12 cents is a lot, since it is static regardless of the transaction size. Small transactions at 12 cents fee are ridiculously expensive. You need low fee + 0-conf for small transactions (e.g. BCH). 12 cents is negligible for large transactions, hence why people call it a store of value. And since bitcoin doesn't scale, transaction costs will skyrocket again to crazy transaction fees of 50-100$ easily if it starts being used.
    - joshuahedlund 7y ago
      Where are you getting this? Why does bitinfocharts.com show a Median transaction fee of $1.85 ?
      - eric_cc 7y ago
        It's definitely not $1.85 lol. You can try sending a few sats between your own wallets to test it if you're genuinely curious.
M2Ys4U 7y ago
Everything, pretty much.
navigatesol 7y ago
>Could you elaborate on what Bitcoin failed at? I wouldn't say it's failed, but I don't see it succeeding, either. Is Bitcoin more or less mainstream than it was 2 years ago? Are transactions faster? Is it used at more retailers? I don't see any of that. It seems like it's only a tool for speculation.
sonnyblarney 7y ago
"Could you elaborate on what Bitcoin failed at?" BTC failed to be a currency that could be used for practical purposes. There's really nowhere to spend BTC today that matters. If Amazon, Costco and AirBnB etc. allowed BTC, well, others might join, and we'd possibly see real circulation. For whatever reason, it was never meant to be.

entropea 7y ago

The government is heavily lobbied by these companies, so essentially the government is mostly just these companies.

jrvxo 7y ago
I said "my government", which for obvious reasons doesn't have to be the one the US has
- entropea 7y ago
  I didn't specify a government. The same holds true for most western countries. We have fairly global neoliberalism.

sctb 7y ago

We detached this subthread from https://news.ycombinator.com/item?id=20210979 https://news.ycombinator.com/item?id=20210979 and marked it off-topic.