5 ms·

The (practical) End of Bitcoin

26 points by fraserharris 15y ago

vessenes 15y ago
For all the short blogs, there are very few, if any short options written or listed at bitoption.org. I made a little bit of money on mild shorts there this week, essentially betting against major price increases, but I just don't see any like $2 puts being listed for end of the year.
- deleted 15y ago
  [deleted]
malandrew 15y ago
What people who argue argue bitcoin don't seem to get is that you don't need the participation of banks at all. If an individual offers any good or service in exchange for bitcoins they can get bitcoins so long as the people with bitcoins wants that good or service. There was a perfect example here on HN the other day. Someone would purchase electronics products from Newegg for HNers in other countries in exchange for bitcoin. The cost in bitcoins was equal to the cost of the product in USD converted to bitcoins plus an operating margin. The flatter the World gets the more likely that bitcoin is likely to have utility. All the naysayers keep harping on about how bitcoin will never gain mainstream acceptance in the US. They're partially right. The mainstream US is not the target market. Bitcoin will probably enjoy some mainstream acceptance in the US, but it will probably be a long time from now and occur well after it enjoys mainstream success in some foreign market. The key global feature that makes bitcoin viable is a functioning and reliable postal service. Beyond that all that is necessary is a robust reputation management system. With those two features, you can transact easily and simply with anyone in the World without ever dealing with US banks. That's the key piece to get here. In the long-term, regulation of US banks prohibiting bitcoin will hurt banks more than bitcoin, because it just means that they won't be able to participate. The key to a functioning bitcoin economy is not the middlemen such as banks. The key are enough endpoints so that there are enough goods and services you want to buy in bitcoin that uses charge in bitcoin and then maintain the currency until they spend it on a good or service they want. Everyone focuses on the banks and intermediaries, but it's the quantity and diversity endpoints (buyers/sellers) that truly matter.
- drivebyacct2 15y ago
  I want to believe this, but I don' think there is a congruent market for legal goods that are willing to take BitCoins online. If buy an eighth from my dealer, he can go buy milk and bread. If I buy an eighth from someone on SilkRoad, they can... buy electronics on NewEgg (which would stop if USD exchange stopped)... and that's about it.
  - malandrew 15y ago
    You are assuming that your dealer will always be in the US and local. AFAIK small amounts of many drugs for personal use are not hard to send through the postal service. From what I read on the Gawker article, Silk Road permits Americans to buy from a dealer they've never met before from anywhere in the world based solely on reputation. No one in their right mind would pay a dealer via a bank transfer because of the paper trail it leaves, but they probably wouldn't be too concerned with transferring bitcoins. For many, you may have a greater risk of being defrauded, but you've eliminated risk associated with dealing with drug dealers in person. For some people this is an acceptable tradeoff in risk, especially since people have been robbed at gun-point by dealers. Interestingly, services like Silk road have the potential to eliminate much of the violence associated with the drug trade because physical proximity of the counter-parties is eliminated. You can't get beat up and shot by someone you never have to meet. In my opinion the number one threat to the mainstream adoption of bitcoin in the US would be the legalization of Marijuana. Marijuana is so widely used that it is the one commodity that prevents the social graph of potential bitcoin users in the US from being full of wholes.
    - drivebyacct2 15y ago
      The only part of that sentence that I found terribly relevant was the first. I'm just not sure that there will be enough dealers that are not just located outside of the United States, but located outside of ANY foreign country that would likely hop on an anti-BTC bandwagon. Additionally you have to worry about customs, etc. Honestly, I'm just not sure that many users are using SilkRoad for ganja. Like you said, it's so widely used. Granted, I'll eat my words in a few months, but it's easy enough to get your hands on that I certainly would have to be in a very uncomfortable spot to risk having weed mailed to me. I'm not really into anything else, though HN keeps me intrigued about LSD, and even then I'm sure I could ask 2-3 people and get that, so I'm not really sure.
pavel_lishin 15y ago
This whole thing reminds me of Daemon/FreeedomTM and the darknet credits.
- nissimk 15y ago
  Yes, I agree, and "Anonymous" reminds me a lot of the daemon network. The only thing we don't have is Hari Seldon, er I mean Matthew Sobol. Daniel Suarez is awesome.
  - pavel_lishin 15y ago
    Funny that you bring up Hari Seldon - you have to kind of suspend a lot of disbelief to be convinced that someone could basically single-handedly foresee everything that could potentially happen. But I guess that's why it's fiction.
    - cubicle67 15y ago
      except - he knew he couldn't foresee everything, hence the line of similarly trained followers, all of who worked to expand the science - he was wrong anyway. Things happened that he didn't/couldn't have forseen
      - pavel_lishin 15y ago
        I think you're talking about Seldon for this one, and you're definitely right - the Mule was unforseen, and unforseeable, and he did have spiritual successors. I don't think Sobol really did - definitely not in the Daemon novel, anyway, every operative was following the AI's instructions. The darknet became (or at least, was shown to be) more self-sufficient later on, when there was less focus on murdering people and more on building communities. I just didn't think it was particularly realistic to skip from A to B without everything falling apart in between - especially considering that there wasn't anything like psychohistory in Suarez's book to wave your hands around.
Kurtz79 15y ago
This article is short but nails the biggest bitcoin hurdle I can see at the moment. The intrinsic value of currency is given by the services and tangible products it can buy. With a USD (or EUR or GBP or whatever) you can buy virtually everything (except, maybe, love and happiness :)), while it it wasn't for the possibility to exchange bitcoins for "actual" money, the amount of things you could buy with them would be virtually nothing, as of today. Want to buy an Ipod from an Apple store ? You can't. Renew your WoW account ? You can't. Buy at Amazon ? You can't. The only way to do that is to either go through middlemen that offers the same, or similar, products/services secondhand or exchange bitcoins for cash. And both services will disappear in a blink, if they will find they can't exchange their bitcoins for cash. The only way I can see bitcoins to take off indefinitely is that its economy of services/products you can buy with them will grow to a point that its intrinsic value will be enough for the people to stick with them, regardlessly of the possibilit to exchange them. But we are talking years, I doubt they will be given such breathing space.

26 points by fraserharris 15y ago

For all the short blogs, there are very few, if any short options written or listed at bitoption.org. I made a little bit of money on mild shorts there this week, essentially betting against major price increases, but I just don't see any like $2 puts being listed for end of the year.

deleted 15y ago
[deleted]

malandrew 15y ago

What people who argue argue bitcoin don't seem to get is that you don't need the participation of banks at all. If an individual offers any good or service in exchange for bitcoins they can get bitcoins so long as the people with bitcoins wants that good or service. There was a perfect example here on HN the other day. Someone would purchase electronics products from Newegg for HNers in other countries in exchange for bitcoin. The cost in bitcoins was equal to the cost of the product in USD converted to bitcoins plus an operating margin. The flatter the World gets the more likely that bitcoin is likely to have utility. All the naysayers keep harping on about how bitcoin will never gain mainstream acceptance in the US. They're partially right. The mainstream US is not the target market. Bitcoin will probably enjoy some mainstream acceptance in the US, but it will probably be a long time from now and occur well after it enjoys mainstream success in some foreign market. The key global feature that makes bitcoin viable is a functioning and reliable postal service. Beyond that all that is necessary is a robust reputation management system. With those two features, you can transact easily and simply with anyone in the World without ever dealing with US banks. That's the key piece to get here. In the long-term, regulation of US banks prohibiting bitcoin will hurt banks more than bitcoin, because it just means that they won't be able to participate. The key to a functioning bitcoin economy is not the middlemen such as banks. The key are enough endpoints so that there are enough goods and services you want to buy in bitcoin that uses charge in bitcoin and then maintain the currency until they spend it on a good or service they want. Everyone focuses on the banks and intermediaries, but it's the quantity and diversity endpoints (buyers/sellers) that truly matter.

drivebyacct2 15y ago
I want to believe this, but I don' think there is a congruent market for legal goods that are willing to take BitCoins online. If buy an eighth from my dealer, he can go buy milk and bread. If I buy an eighth from someone on SilkRoad, they can... buy electronics on NewEgg (which would stop if USD exchange stopped)... and that's about it.
- malandrew 15y ago
  You are assuming that your dealer will always be in the US and local. AFAIK small amounts of many drugs for personal use are not hard to send through the postal service. From what I read on the Gawker article, Silk Road permits Americans to buy from a dealer they've never met before from anywhere in the world based solely on reputation. No one in their right mind would pay a dealer via a bank transfer because of the paper trail it leaves, but they probably wouldn't be too concerned with transferring bitcoins. For many, you may have a greater risk of being defrauded, but you've eliminated risk associated with dealing with drug dealers in person. For some people this is an acceptable tradeoff in risk, especially since people have been robbed at gun-point by dealers. Interestingly, services like Silk road have the potential to eliminate much of the violence associated with the drug trade because physical proximity of the counter-parties is eliminated. You can't get beat up and shot by someone you never have to meet. In my opinion the number one threat to the mainstream adoption of bitcoin in the US would be the legalization of Marijuana. Marijuana is so widely used that it is the one commodity that prevents the social graph of potential bitcoin users in the US from being full of wholes.
  - drivebyacct2 15y ago
    The only part of that sentence that I found terribly relevant was the first. I'm just not sure that there will be enough dealers that are not just located outside of the United States, but located outside of ANY foreign country that would likely hop on an anti-BTC bandwagon. Additionally you have to worry about customs, etc. Honestly, I'm just not sure that many users are using SilkRoad for ganja. Like you said, it's so widely used. Granted, I'll eat my words in a few months, but it's easy enough to get your hands on that I certainly would have to be in a very uncomfortable spot to risk having weed mailed to me. I'm not really into anything else, though HN keeps me intrigued about LSD, and even then I'm sure I could ask 2-3 people and get that, so I'm not really sure.

pavel_lishin 15y ago

This whole thing reminds me of Daemon/FreeedomTM and the darknet credits.

nissimk 15y ago
Yes, I agree, and "Anonymous" reminds me a lot of the daemon network. The only thing we don't have is Hari Seldon, er I mean Matthew Sobol. Daniel Suarez is awesome.
- pavel_lishin 15y ago
  Funny that you bring up Hari Seldon - you have to kind of suspend a lot of disbelief to be convinced that someone could basically single-handedly foresee everything that could potentially happen. But I guess that's why it's fiction.
  - cubicle67 15y ago
    except - he knew he couldn't foresee everything, hence the line of similarly trained followers, all of who worked to expand the science - he was wrong anyway. Things happened that he didn't/couldn't have forseen
    - pavel_lishin 15y ago
      I think you're talking about Seldon for this one, and you're definitely right - the Mule was unforseen, and unforseeable, and he did have spiritual successors. I don't think Sobol really did - definitely not in the Daemon novel, anyway, every operative was following the AI's instructions. The darknet became (or at least, was shown to be) more self-sufficient later on, when there was less focus on murdering people and more on building communities. I just didn't think it was particularly realistic to skip from A to B without everything falling apart in between - especially considering that there wasn't anything like psychohistory in Suarez's book to wave your hands around.

Kurtz79 15y ago

This article is short but nails the biggest bitcoin hurdle I can see at the moment. The intrinsic value of currency is given by the services and tangible products it can buy. With a USD (or EUR or GBP or whatever) you can buy virtually everything (except, maybe, love and happiness :)), while it it wasn't for the possibility to exchange bitcoins for "actual" money, the amount of things you could buy with them would be virtually nothing, as of today. Want to buy an Ipod from an Apple store ? You can't. Renew your WoW account ? You can't. Buy at Amazon ? You can't. The only way to do that is to either go through middlemen that offers the same, or similar, products/services secondhand or exchange bitcoins for cash. And both services will disappear in a blink, if they will find they can't exchange their bitcoins for cash. The only way I can see bitcoins to take off indefinitely is that its economy of services/products you can buy with them will grow to a point that its intrinsic value will be enough for the people to stick with them, regardlessly of the possibilit to exchange them. But we are talking years, I doubt they will be given such breathing space.