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I think part of it is a bootstrapping problem. Bitcoin solved an interesting technical problem, so people started using it. Once people started getting interest

I think part of it is a bootstrapping problem. Bitcoin solved an interesting technical problem, so people started using it. Once people started getting interested, companies popped up to sell it, but notably there was a base of users prior to that. By contrast, the barrier to entry for a new system denominated in USD is much higher. People can't really start using it until there's a company around to support it, and starting a company to run a payments platform isn't for the faint of heart. Still, I've been keeping an eye on GNU Taler[0], which seems to be tackling the technical side of that problem. I'm unclear on some of the technical details, but it's the closest thing I've found so far to digital cash. [0] https://taler.net/en/ https://taler.net/en/

cheez 7y ago
Taler's demo doesn't even work
why_only_15 7y ago
Seems like it could be interesting in theory, but I'm not sure very many people are seriously working on it, and it doesn't look like there's been an update for a year and a half.
codexon 7y ago
Bitcoin (and all other cryptocoins) are just not usable for mass transactions. Buying anything with bitcoin takes over 10 minutes, often times over an hour for shops that are paranoid and require 3+ confirmations. During the peak bubble time, I remember buying something with bitcoin taking 2 hours!! This technical problem has not been solved and the "lightning network" just turns exchanges like Coinbase into a bank or Paypal that can be shut down or run away with your money, which basically ruins the entire point of using Bitcoin. Until Bitcoin can scale without "lightning network", I don't see people using it outside illegal activities. And from what I can see, the core concept of Bitcoin (and other cryptocoins) is fundamentally at odds with fast transactions. If you make confirmations 2x faster, then it just becomes 2x easier to fake a transaction. So paranoid merchants will just require double the confirmations.
- kadoban 7y ago
  That does not sound correct on the lightning network. I cannot find any reason it would allow someone to run off with your funds. Can you explain the attack?
  - codexon 7y ago
    In order to use the lightning network, you are making a smart contract on the normal slow bitcoin ledger with another party. You need to insert a pre-determined amount of money into this system to be able to spend it. Most consumers will not want to do this because they don't know who they will be buying from and don't know how much they are going to spend. If they decide they want to buy from random website Z one day, making a lightning network connection between themselves and that website will be useless because establishing a lightning network connection needs to go on the regular slow block chain, so it'll take as long as a regular payment. The only way it works is if a major exchange like Coinbase sets up lightning network agreements between other major exchanges. Then the user puts bitcoin into Coinbase and uses the Coinbase website to make lightning network payments on your behalf. This means you will probably put all your money into an exchange like Coinbase who can then run off with your money.
    - kadoban 7y ago
      Okay, but the lightning network is not just "here's all my money, please don't run off". There's crypto around it, a multisig protocol designed to prevent exactly that, no? If it was just some crap exchange, why would anyone be bothering, and especially why would it be taking so long?
      - codexon 7y ago
        Um no, you deposit all your bitcoin into Coinbase's bitcoin wallet so there's no crypto enforcement that you own the bitcoin anymore. That's the only way Coinbase can safely use your bitcoin on their lightning network connections. They need to commit regular bitcoin into a lightning network channel on the main blockchain before they can spend it.

cheez 7y ago

Taler's demo doesn't even work

why_only_15 7y ago

Seems like it could be interesting in theory, but I'm not sure very many people are seriously working on it, and it doesn't look like there's been an update for a year and a half.

codexon 7y ago

Bitcoin (and all other cryptocoins) are just not usable for mass transactions. Buying anything with bitcoin takes over 10 minutes, often times over an hour for shops that are paranoid and require 3+ confirmations. During the peak bubble time, I remember buying something with bitcoin taking 2 hours!! This technical problem has not been solved and the "lightning network" just turns exchanges like Coinbase into a bank or Paypal that can be shut down or run away with your money, which basically ruins the entire point of using Bitcoin. Until Bitcoin can scale without "lightning network", I don't see people using it outside illegal activities. And from what I can see, the core concept of Bitcoin (and other cryptocoins) is fundamentally at odds with fast transactions. If you make confirmations 2x faster, then it just becomes 2x easier to fake a transaction. So paranoid merchants will just require double the confirmations.

kadoban 7y ago
That does not sound correct on the lightning network. I cannot find any reason it would allow someone to run off with your funds. Can you explain the attack?
- codexon 7y ago
  In order to use the lightning network, you are making a smart contract on the normal slow bitcoin ledger with another party. You need to insert a pre-determined amount of money into this system to be able to spend it. Most consumers will not want to do this because they don't know who they will be buying from and don't know how much they are going to spend. If they decide they want to buy from random website Z one day, making a lightning network connection between themselves and that website will be useless because establishing a lightning network connection needs to go on the regular slow block chain, so it'll take as long as a regular payment. The only way it works is if a major exchange like Coinbase sets up lightning network agreements between other major exchanges. Then the user puts bitcoin into Coinbase and uses the Coinbase website to make lightning network payments on your behalf. This means you will probably put all your money into an exchange like Coinbase who can then run off with your money.
  - kadoban 7y ago
    Okay, but the lightning network is not just "here's all my money, please don't run off". There's crypto around it, a multisig protocol designed to prevent exactly that, no? If it was just some crap exchange, why would anyone be bothering, and especially why would it be taking so long?
    - codexon 7y ago
      Um no, you deposit all your bitcoin into Coinbase's bitcoin wallet so there's no crypto enforcement that you own the bitcoin anymore. That's the only way Coinbase can safely use your bitcoin on their lightning network connections. They need to commit regular bitcoin into a lightning network channel on the main blockchain before they can spend it.