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Correct me if I'm wrong, but hasn't the history of Bitcoin also exposed issues with not having a central bank? Theft that can't be reversed, digital wallets tha

Correct me if I'm wrong, but hasn't the history of Bitcoin also exposed issues with not having a central bank? Theft that can't be reversed, digital wallets that can't be unlocked, value that can't be insured, etc. Currency fundamentally requires trust - at the very least it requires trust that the asset you are receiving is roughly equivalent in worth to the asset you're giving as part of the transaction. In the case of centralized banks, you have to trust the bank to help ensure the value of the currency. In the case of bitcoin, you have to trust the network, its participants, the exchanges, etc. Knowing that your transaction itself is secure is only a part of the actual, practical issue. You also have to be confident you can then use that asset to purchase an item of equivalent worth in the near term future. Trust doesn't stop, it simply moves. Centralized banks have made mistakes most certainly. They have also been around for hundreds of years. Bitcoin has perhaps fewer disappointments (although certainly not zero). It has also been around for a tiny fraction of that. How much of the extra confidence in Bitcoin is purely attributed to its otherwise relatively limited history as a store or exchange of value? I won't opine on which one is "better" (if such a description even makes sense). However, it does seem at times that people rail against central banks while turning a convenient blind eye to the challenges of decentralized banks. Is it the case that only decentralized banking problems can be solved, and centralized banking problems cannot?

bushbaba 6y ago
> it requires trust that the asset you are receiving is roughly equivalent in worth to the asset you're giving Checkout uniswap. Which is a decentralized exchange which the smart contract ensuring you get X asset for Y btc.
- colinmorelli 6y ago
  Sure, but again, this is only part of the problem. I also need to have confidence that I can do something with the BTC before its value wildly fluctuates. And either way, again, it still requires trust (in this case, trust in uniswap and its network). My point is not to say that the problem can't be solved on a technical level. It's that it still requires trust. That problem doesn't get eliminated, it simply moves.
  - nihonde 6y ago
    “... I also need to have confidence that I can do something with the BTC before its value wildly fluctuates.” Fluctuates relative to what? If BTC becomes the unit of account (as it already apparently has in certain channels of international trade), then it’s only fiat money doing the fluctuating, while goods and services are priced in BTC.
    - colinmorelli 6y ago
      That's a huge if, and in order for that if to become true, I already have to be past the hurdle of believing this to be true; thus it's a bit circular. In other words: the mass public is unlikely to become Bitcoin-first until they can gain confidence in the stability of Bitcoin. This is notwithstanding the fact that stable governments likely will not accept BTC as a national currency, meaning citizens will still need USD/EUR/GBP/their local currency for paying taxes and transacting with the government. It feels as though your post just handwaved away all of the practical issues with actually making the world BTC-first and then asked why I cared about them. Because, in order for the world you're proposing to exist, we almost certainly have had to solve them.
    - kortilla 6y ago
      Until some major goods start being priced in Bitcoin as the base currency instead of a fiat, then it’s always going to be secondary. When the amount of goods and services you can buy in any country swings by 10% in a day, you’re nowhere near being treated like a currency.
    - swagonomixxx 6y ago
      Goods and services will never be priced in BTC because BTC fluctuates by the hour and will probably continue to do so for the foreseeable future. The only way I can see this happening is if you literally eliminate all other currencies, including other cryptocurrencies, because there will always be currencies competing with BTC (and not without good reason). Classic example of buying a good using BTC: say it costs 100 satoshis. By the time I click and purchase, and by the time the BTC arrives at the seller's address, the value may have changed for the better (BTC price goes down - hence I paid "less") or for the worse (BTC price goes up - hence I paid "more"). For the most extreme example, imagine how people that bought a pizza with Bitcoin when it was worth 5$ feel right now. A 15$ pizza in 2009 or whatever is worth ~150K USD now.
- te_chris 6y ago
  And on the ETH network, a whole new world of extortionate fees.

bushbaba 6y ago

> it requires trust that the asset you are receiving is roughly equivalent in worth to the asset you're giving Checkout uniswap. Which is a decentralized exchange which the smart contract ensuring you get X asset for Y btc.

colinmorelli 6y ago
Sure, but again, this is only part of the problem. I also need to have confidence that I can do something with the BTC before its value wildly fluctuates. And either way, again, it still requires trust (in this case, trust in uniswap and its network). My point is not to say that the problem can't be solved on a technical level. It's that it still requires trust. That problem doesn't get eliminated, it simply moves.
- nihonde 6y ago
  “... I also need to have confidence that I can do something with the BTC before its value wildly fluctuates.” Fluctuates relative to what? If BTC becomes the unit of account (as it already apparently has in certain channels of international trade), then it’s only fiat money doing the fluctuating, while goods and services are priced in BTC.
  - colinmorelli 6y ago
    That's a huge if, and in order for that if to become true, I already have to be past the hurdle of believing this to be true; thus it's a bit circular. In other words: the mass public is unlikely to become Bitcoin-first until they can gain confidence in the stability of Bitcoin. This is notwithstanding the fact that stable governments likely will not accept BTC as a national currency, meaning citizens will still need USD/EUR/GBP/their local currency for paying taxes and transacting with the government. It feels as though your post just handwaved away all of the practical issues with actually making the world BTC-first and then asked why I cared about them. Because, in order for the world you're proposing to exist, we almost certainly have had to solve them.
  - kortilla 6y ago
    Until some major goods start being priced in Bitcoin as the base currency instead of a fiat, then it’s always going to be secondary. When the amount of goods and services you can buy in any country swings by 10% in a day, you’re nowhere near being treated like a currency.
  - swagonomixxx 6y ago
    Goods and services will never be priced in BTC because BTC fluctuates by the hour and will probably continue to do so for the foreseeable future. The only way I can see this happening is if you literally eliminate all other currencies, including other cryptocurrencies, because there will always be currencies competing with BTC (and not without good reason). Classic example of buying a good using BTC: say it costs 100 satoshis. By the time I click and purchase, and by the time the BTC arrives at the seller's address, the value may have changed for the better (BTC price goes down - hence I paid "less") or for the worse (BTC price goes up - hence I paid "more"). For the most extreme example, imagine how people that bought a pizza with Bitcoin when it was worth 5$ feel right now. A 15$ pizza in 2009 or whatever is worth ~150K USD now.
te_chris 6y ago
And on the ETH network, a whole new world of extortionate fees.