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bitcoin appears to have just become another asset that rich people on wall street are hoarding with no real attention or interest in the actual payment mechanis

by tempsy 6y ago

bitcoin appears to have just become another asset that rich people on wall street are hoarding with no real attention or interest in the actual payment mechanism at all. it might as well just be some trading cards being shuffled around.

vmception 6y ago
there will be plenty of articles for you to post that copypasta on, this article isnt about that
crumbshot 6y ago
A highly wasteful one too, in terms of energy consumption. And the negative environmental impact that has. As we head towards a burgeoning climate catastrophe, no-one should be using Bitcoin.
- KronisLV 6y ago
  Are there any statistics of how much of the total CO2 that's produced by year is caused by computer equipment? Are there any estimates, what percentage of that is caused by mining bitcoins or other cryptocurrencies? What about things like machine learning or rendering video footage? I'm afraid that i couldn't find anything comprehensive, but something like that would be very interesting to explore!
headmelted 6y ago
Which is a shame, as the technology always has been as impressive as claimed. There was for a long while talk of whether or not the blockchain would ultimately be adopted for state currencies going forward but it's not clear that this is even an ideal use case. As an example, I would personally view it as a good thing (and I know others have different views on this) that the government for tax and law enforcement purposes can view the global transaction log (it would certainly simplify taxes while increasing compliance), but is it a good thing that everyone else can view the transaction log too? Ideally I would like the police and the tax man to know that people are not up to anything nefarious without everyone in the world knowing when you buy birth control or a pregnancy test. The other issue is obviously money supply. Governments like to be able to manage the supply of currency, but deflationary issuances like Bitcoin are clearly incompatible with that goal.
- skohan 6y ago
  I would argue that claims about the revolutionary potential of blockchain as a technology have been largely exaggerated, but I agree that it's hard to imagine it replacing the financial system in its current state. It just doesn't seem like it could possibly scale to the number of transactions which have to be made globally every second. That's not to say there aren't technical solutions to some of these problems, but currently it seems like even if less than 1% of the population tried to start using bitcoin as their only currency, the system would collapse under its own weight. I actually think it might be interesting for something like voting. Here having a completely public, verifiable record would add a lot to what is currently a very opaque system in a lot of places.
  - headmelted 6y ago
    I thought about how it would be good for voting in the past - again though, not as a public transaction log (how you vote being public could get you killed in some places).
    - skohan 6y ago
      I'm not an expert, but it seems as if you could make this process both anonymous and verifiable. I.e. the number and authenticity of votes is verifiable through cryptography, but the identity of the voter is not accessible.
skohan 6y ago
Even that is an extremely charitable interpretation. From what I can tell, Bitcoin seems largely to be an engine for fraud: fake value is injected into the system via dollar-pegged tokens like Tether, retail "investors" pile in to chase rising asset prices, and then the bottom drops out, amidst "liquidity issues" at major exchanges which prevent people from pulling out at the top. Or at least that is what happened in 2017. I don't see any evidence that institutional wall street investors are adopting bitcoin in any real way.
- headmelted 6y ago
  There does appear to be some evidence of this, but again, you can be an institutional fund manager and still speculating. It's simultaneously described as a currency for exchange, a store of value and a speculative asset, but logically it cannot be all of these things simultaneously. As an example, it fell quite sharply the other day while gold and stocks treaded water. Is it going to $1 or $1 billion? I have no idea. But whatever is, it's certainly not reliably static.
- Wh1zz 6y ago
  PayPal will be supporting BTC payments soon. BlackRock just announced providing exposure to BTC in some of their funds very soon.
  - skohan 6y ago
    Again, there are some institutional investors dabbling in this, but I would like to see evidence that this is more than a rounding error in terms of Bitcoin's total market cap.
  - imtringued 6y ago
    Why would I want to pay capital gains taxes on things I order online? There is also the obvious problem that spending your Bitcoin is foolish because it is deflationary. Remember the Bitcoin pizza?
wcoenen 6y ago
The dream of using bitcoin as p2p digital cash does seem to be dead for now, the fees are too high for that[1]. Lightning hasn't really taken off for that use case either, the number of bitcoins in Lightning channels appears to have stopped growing.[2] But it looks like bitcoin can still be very useful as an alternative settlement layer for international payments. Either directly for large payments, or under the hood for something like Strike[3]. [1] https://ycharts.com/indicators/bitcoin_average_transaction_fee https://ycharts.com/indicators/bitcoin_average_transaction_f... [2] https://bitcoinvisuals.com/ln-capacity https://bitcoinvisuals.com/ln-capacity [3] https://jimmymow.medium.com/announcing-strike-global-2392b908f611 https://jimmymow.medium.com/announcing-strike-global-2392b90...
- skohan 6y ago
  As someone who lives my life in two currencies, my main hope for Bitcoin circa 2014 was that it would make for simpler and cheaper international transactions and currency conversions. I don't know if the situation has gotten any better, but around 2015/2016 this seemed untenable due to high transaction costs, and volatility. I'm not sure I understand what would be the value of using cryptocurrency under the hood for something like Strike. If they are settling the payments themselves, why not just use a simple database to reconcile their transactions?
  - wcoenen 6y ago
    > I'm not sure I understand what would be the value of using cryptocurrency under the hood for something like Strike. If they are settling the payments themselves, why not just use a simple database to reconcile their transactions? A multi-country payment service can indeed just update their database. But If there is a net flow of value between countries, then they will still have to move that value over slower and more expensive traditional systems. If they implement fast transfers for their users on top of those slow systems, then that means they need idle capital waiting in each destination country so that they can front the money to the receiver. This adds cost and complexity: interface with traditional systems, capital opportunity cost, need to forecast demand, need to do currency hedging, ... Transfering via bitcoin and converting via exchanges on both ends eliminates that problem. It also makes it easy to partner with other payment services that do the same, while minimizing the need for trust.
joshxyz 6y ago
At this state its not really intended for micro txs. Its large txs and the energy spent (yes, spent, not wasted) on the math is what secures it. Your keys, your bitcoin. 1 USD = 0.99 USD tomorrow. 1 BTC will always be 1 BTC.
- diegocg 6y ago
  No, 1 USD = 1 USD tomorrow The actual value of 1 USD may change. But so does the value of 1 BTC
  - joshxyz 6y ago
    No, because humans can print USD, which inherently decreases the buying power of all existing USD. Can't do that with BTC.

by tempsy 6y ago

vmception 6y ago

there will be plenty of articles for you to post that copypasta on, this article isnt about that

crumbshot 6y ago

A highly wasteful one too, in terms of energy consumption. And the negative environmental impact that has. As we head towards a burgeoning climate catastrophe, no-one should be using Bitcoin.

KronisLV 6y ago
Are there any statistics of how much of the total CO2 that's produced by year is caused by computer equipment? Are there any estimates, what percentage of that is caused by mining bitcoins or other cryptocurrencies? What about things like machine learning or rendering video footage? I'm afraid that i couldn't find anything comprehensive, but something like that would be very interesting to explore!

headmelted 6y ago

Which is a shame, as the technology always has been as impressive as claimed. There was for a long while talk of whether or not the blockchain would ultimately be adopted for state currencies going forward but it's not clear that this is even an ideal use case. As an example, I would personally view it as a good thing (and I know others have different views on this) that the government for tax and law enforcement purposes can view the global transaction log (it would certainly simplify taxes while increasing compliance), but is it a good thing that everyone else can view the transaction log too? Ideally I would like the police and the tax man to know that people are not up to anything nefarious without everyone in the world knowing when you buy birth control or a pregnancy test. The other issue is obviously money supply. Governments like to be able to manage the supply of currency, but deflationary issuances like Bitcoin are clearly incompatible with that goal.

skohan 6y ago
I would argue that claims about the revolutionary potential of blockchain as a technology have been largely exaggerated, but I agree that it's hard to imagine it replacing the financial system in its current state. It just doesn't seem like it could possibly scale to the number of transactions which have to be made globally every second. That's not to say there aren't technical solutions to some of these problems, but currently it seems like even if less than 1% of the population tried to start using bitcoin as their only currency, the system would collapse under its own weight. I actually think it might be interesting for something like voting. Here having a completely public, verifiable record would add a lot to what is currently a very opaque system in a lot of places.
- headmelted 6y ago
  I thought about how it would be good for voting in the past - again though, not as a public transaction log (how you vote being public could get you killed in some places).
  - skohan 6y ago
    I'm not an expert, but it seems as if you could make this process both anonymous and verifiable. I.e. the number and authenticity of votes is verifiable through cryptography, but the identity of the voter is not accessible.

skohan 6y ago

Even that is an extremely charitable interpretation. From what I can tell, Bitcoin seems largely to be an engine for fraud: fake value is injected into the system via dollar-pegged tokens like Tether, retail "investors" pile in to chase rising asset prices, and then the bottom drops out, amidst "liquidity issues" at major exchanges which prevent people from pulling out at the top. Or at least that is what happened in 2017. I don't see any evidence that institutional wall street investors are adopting bitcoin in any real way.

headmelted 6y ago
There does appear to be some evidence of this, but again, you can be an institutional fund manager and still speculating. It's simultaneously described as a currency for exchange, a store of value and a speculative asset, but logically it cannot be all of these things simultaneously. As an example, it fell quite sharply the other day while gold and stocks treaded water. Is it going to $1 or $1 billion? I have no idea. But whatever is, it's certainly not reliably static.
Wh1zz 6y ago
PayPal will be supporting BTC payments soon. BlackRock just announced providing exposure to BTC in some of their funds very soon.
- skohan 6y ago
  Again, there are some institutional investors dabbling in this, but I would like to see evidence that this is more than a rounding error in terms of Bitcoin's total market cap.
- imtringued 6y ago
  Why would I want to pay capital gains taxes on things I order online? There is also the obvious problem that spending your Bitcoin is foolish because it is deflationary. Remember the Bitcoin pizza?

wcoenen 6y ago

The dream of using bitcoin as p2p digital cash does seem to be dead for now, the fees are too high for that[1]. Lightning hasn't really taken off for that use case either, the number of bitcoins in Lightning channels appears to have stopped growing.[2] But it looks like bitcoin can still be very useful as an alternative settlement layer for international payments. Either directly for large payments, or under the hood for something like Strike[3]. [1] https://ycharts.com/indicators/bitcoin_average_transaction_fee https://ycharts.com/indicators/bitcoin_average_transaction_f... [2] https://bitcoinvisuals.com/ln-capacity https://bitcoinvisuals.com/ln-capacity [3] https://jimmymow.medium.com/announcing-strike-global-2392b908f611 https://jimmymow.medium.com/announcing-strike-global-2392b90...

skohan 6y ago
As someone who lives my life in two currencies, my main hope for Bitcoin circa 2014 was that it would make for simpler and cheaper international transactions and currency conversions. I don't know if the situation has gotten any better, but around 2015/2016 this seemed untenable due to high transaction costs, and volatility. I'm not sure I understand what would be the value of using cryptocurrency under the hood for something like Strike. If they are settling the payments themselves, why not just use a simple database to reconcile their transactions?
- wcoenen 6y ago
  > I'm not sure I understand what would be the value of using cryptocurrency under the hood for something like Strike. If they are settling the payments themselves, why not just use a simple database to reconcile their transactions? A multi-country payment service can indeed just update their database. But If there is a net flow of value between countries, then they will still have to move that value over slower and more expensive traditional systems. If they implement fast transfers for their users on top of those slow systems, then that means they need idle capital waiting in each destination country so that they can front the money to the receiver. This adds cost and complexity: interface with traditional systems, capital opportunity cost, need to forecast demand, need to do currency hedging, ... Transfering via bitcoin and converting via exchanges on both ends eliminates that problem. It also makes it easy to partner with other payment services that do the same, while minimizing the need for trust.

joshxyz 6y ago

At this state its not really intended for micro txs. Its large txs and the energy spent (yes, spent, not wasted) on the math is what secures it. Your keys, your bitcoin. 1 USD = 0.99 USD tomorrow. 1 BTC will always be 1 BTC.

diegocg 6y ago
No, 1 USD = 1 USD tomorrow The actual value of 1 USD may change. But so does the value of 1 BTC
- joshxyz 6y ago
  No, because humans can print USD, which inherently decreases the buying power of all existing USD. Can't do that with BTC.