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A number of voices from government and surveillance circles, like Thiel et al, have come forward lately to caution about "big problems" with Bitcoin. I have to

A number of voices from government and surveillance circles, like Thiel et al, have come forward lately to caution about "big problems" with Bitcoin. I have to conclude that Bitcoin is actually winning, and these people are just spreading FUD in an effort to crush something they can't control.

boc 6y ago
Just to bring some perspective, JP Morgan alone transfers the equivalent of the U.S. real gross domestic product each week. $2.8T per day, just by one bank. Bitcoin+all of crypto combined is nowhere close to that scale. Bitcoin sees around 300k transactions per day. It's miniscule.
- er4hn 6y ago
  Minor nit, but you are comparing amount transferred vs number of transactions. Yes, there is a difference of several orders of magnitude, in favor of usd.
  - boc 6y ago
    Fair - it's hard to get accurate info on the sum value of the transactions. Even if every transaction was a full bitcoin, it's still only $17B per day. Or still just six tenths of one percent of what JPM processes daily.
    - borg_ 6y ago
      No it's not hard to get some idea of the transaction volume, at least on chain transactions: https://www.blockchain.com/charts/estimated-transaction-volume-usd https://www.blockchain.com/charts/estimated-transaction-volu.... It stands though that it's orders of magnitudes less than USD. We will never find out such data for USD anyway, where do you verify for yourself that the claimed 2.7T is accurate?
      - deleted 6y ago
        [deleted]
- cblconfederate 6y ago
  what if each of those BTC trasactions will be $1M ? btc is not going to be used to buy groceries obviously, and its slow tech will not become an issue for international trasactions. Banks still take days to clear their own international transactions and it hasnt stopped their adoption
908087 6y ago
"Everything critical of my get-rich-quick scheme is FUD"
Barrin92 6y ago
When the US government declares you a problem and is serious about it you're many things, but winning is probably not one of them. It's pretty trivial to make Bitcoin virtually useless. Pass some laws that effectively render it useless to corporate entities and it's basically banished to the shadow realm. Won't stop criminals from using it, but you can regulate crypto to hell for 99% of the population.
- betwixthewires 6y ago
  So is cocaine, and cocaine is big business. The government cannot make bitcoin worthless through legislation. The government can make bitcoin worthless through an attack that costs less than 1% of the DoD budget though.
  - boc 6y ago
    Cocaine is a highly inelastic good. Bitcoin is highly elastic. It's trivial to ban goods with elastic demand.
    - logicchains 6y ago
      > Cocaine is a highly inelastic good. Bitcoin is highly elastic. It's trivial to ban goods with elastic demand. What do people use Bitcoin for? Buying drugs online! If the demand for drugs is inelastic, then presumably the demand for a way to buy them online is somewhat inelastic too?
      - vincnetas 6y ago
        I would think that BTC is not used only for buying drugs. If my numbers are correct daily BTC transaction volume is 290K or 15B€ or 750 tones of cocaine at 20€/g. Thats a lot of cocaine. In 2018 its estimayed that worldwide 1.7k tones were produced totally.
        lodovic 6y ago
        This assumes that the end users buy their cocaine straight from the big drug kingpin. These drugs are paid for many times.
danuker 6y ago
It is winning as internet gold, but not as internet money. The fees are as large as banks', if not larger. The only advantage over fiat is the theoretical purchasing power stability due to algorithmic supply.
- runeks 6y ago
  > The fees are as large as banks', if not larger. The fee does not depend on transaction value, so the greater the value transferred the smaller the fee in percent. Bank transfer fees are a percentage of value transferred, in my experience.
  - danuker 6y ago
    Yeah, so it discourages small payments relative to large ones. Strictly looking at this, it is somewhat more unfair to poorer people compared to banks.
baby 6y ago
Whenever someone talks about Bitcoin you know that they’re full of shit, because they could be talking about more modern cryptocurrencies but instead decided to talk about a legacy one.
- tomcooks 6y ago
  Username omen
- simiones 6y ago
  You mean they could be talking about even more niche financial products?
cblconfederate 6y ago
The US is the only country that has a vested interest in keeping the dollar as the one and only reserve currency, so these reactions were expected. However, bitcoin is winning in the sense that even the US cannot afford to miss out now.
- spiralx 6y ago
  The US has been trying to reduce the usage of the USD as a reserve currency (it's the largest such currency but not the only one - EUR, GBP and JPY are also used) due to it not having any real benefit to the US while exposing its economy to the effects of financial crises around the world, which tend to lead to countries purchasing dollars and driving the price up which makes imports more expensive. --- Ben Bernanke (ex-FED Chairman) - The dollar’s international role: An “exorbitant privilege”? https://www.brookings.edu/blog/ben-bernanke/2016/01/07/the-dollars-international-role-an-exorbitant-privilege-2/ https://www.brookings.edu/blog/ben-bernanke/2016/01/07/the-d... > A great deal of U.S. currency is held abroad, which amounts to an interest-free loan to the United States. However, the interest savings are probably on the order of $20 billion a year, a small fraction of a percent of U.S. GDP, and that “seigniorage,” as it is called, would probably still exist even if the dollar lost ground to other currencies... > The safe haven aspect of the dollar is actually a negative for U.S. firms, since it implies that they become less competitive (the dollar is stronger) at precisely the times that global economic conditions are most difficult.
spats1990 6y ago
Thiel recently said something to the effect that it's possible bitcoin could be a tool for China to threaten the stability of the US dollar. Interestingly, he is an investor in a crypto startup[1] that (if its intents are read uncharitably) aims, with a stablecoin, to do something similar to the economy of Venezuela and other South American countries that have extremely inflation-prone currencies/have experienced hyperinflation. Mass adoption in Venezuela is the current goal of this project. At least as far as I can see, success for this project would mean some significant chunk of the Venezuelan population transacting in a currency controlled by a company based in California. [1] https://reserve.org/ https://reserve.org/
SkyBelow 6y ago
Couldn't it be the opposite? Bitcoin is losing, so they say this to get people to think Bitcoin is good so they'll use it instead of much harder to analyze crypto?

boc 6y ago

Just to bring some perspective, JP Morgan alone transfers the equivalent of the U.S. real gross domestic product each week. $2.8T per day, just by one bank. Bitcoin+all of crypto combined is nowhere close to that scale. Bitcoin sees around 300k transactions per day. It's miniscule.

er4hn 6y ago
Minor nit, but you are comparing amount transferred vs number of transactions. Yes, there is a difference of several orders of magnitude, in favor of usd.
- boc 6y ago
  Fair - it's hard to get accurate info on the sum value of the transactions. Even if every transaction was a full bitcoin, it's still only $17B per day. Or still just six tenths of one percent of what JPM processes daily.
  - borg_ 6y ago
    No it's not hard to get some idea of the transaction volume, at least on chain transactions: https://www.blockchain.com/charts/estimated-transaction-volume-usd https://www.blockchain.com/charts/estimated-transaction-volu.... It stands though that it's orders of magnitudes less than USD. We will never find out such data for USD anyway, where do you verify for yourself that the claimed 2.7T is accurate?
    - deleted 6y ago
      [deleted]
cblconfederate 6y ago
what if each of those BTC trasactions will be $1M ? btc is not going to be used to buy groceries obviously, and its slow tech will not become an issue for international trasactions. Banks still take days to clear their own international transactions and it hasnt stopped their adoption

908087 6y ago

"Everything critical of my get-rich-quick scheme is FUD"

Barrin92 6y ago

When the US government declares you a problem and is serious about it you're many things, but winning is probably not one of them. It's pretty trivial to make Bitcoin virtually useless. Pass some laws that effectively render it useless to corporate entities and it's basically banished to the shadow realm. Won't stop criminals from using it, but you can regulate crypto to hell for 99% of the population.

betwixthewires 6y ago
So is cocaine, and cocaine is big business. The government cannot make bitcoin worthless through legislation. The government can make bitcoin worthless through an attack that costs less than 1% of the DoD budget though.
- boc 6y ago
  Cocaine is a highly inelastic good. Bitcoin is highly elastic. It's trivial to ban goods with elastic demand.
  - logicchains 6y ago
    > Cocaine is a highly inelastic good. Bitcoin is highly elastic. It's trivial to ban goods with elastic demand. What do people use Bitcoin for? Buying drugs online! If the demand for drugs is inelastic, then presumably the demand for a way to buy them online is somewhat inelastic too?
    - vincnetas 6y ago
      I would think that BTC is not used only for buying drugs. If my numbers are correct daily BTC transaction volume is 290K or 15B€ or 750 tones of cocaine at 20€/g. Thats a lot of cocaine. In 2018 its estimayed that worldwide 1.7k tones were produced totally.
      - lodovic 6y ago
        This assumes that the end users buy their cocaine straight from the big drug kingpin. These drugs are paid for many times.

danuker 6y ago

It is winning as internet gold, but not as internet money. The fees are as large as banks', if not larger. The only advantage over fiat is the theoretical purchasing power stability due to algorithmic supply.

runeks 6y ago
> The fees are as large as banks', if not larger. The fee does not depend on transaction value, so the greater the value transferred the smaller the fee in percent. Bank transfer fees are a percentage of value transferred, in my experience.
- danuker 6y ago
  Yeah, so it discourages small payments relative to large ones. Strictly looking at this, it is somewhat more unfair to poorer people compared to banks.

baby 6y ago

Whenever someone talks about Bitcoin you know that they’re full of shit, because they could be talking about more modern cryptocurrencies but instead decided to talk about a legacy one.

tomcooks 6y ago
Username omen
simiones 6y ago
You mean they could be talking about even more niche financial products?

cblconfederate 6y ago

The US is the only country that has a vested interest in keeping the dollar as the one and only reserve currency, so these reactions were expected. However, bitcoin is winning in the sense that even the US cannot afford to miss out now.

spiralx 6y ago
The US has been trying to reduce the usage of the USD as a reserve currency (it's the largest such currency but not the only one - EUR, GBP and JPY are also used) due to it not having any real benefit to the US while exposing its economy to the effects of financial crises around the world, which tend to lead to countries purchasing dollars and driving the price up which makes imports more expensive. --- Ben Bernanke (ex-FED Chairman) - The dollar’s international role: An “exorbitant privilege”? https://www.brookings.edu/blog/ben-bernanke/2016/01/07/the-dollars-international-role-an-exorbitant-privilege-2/ https://www.brookings.edu/blog/ben-bernanke/2016/01/07/the-d... > A great deal of U.S. currency is held abroad, which amounts to an interest-free loan to the United States. However, the interest savings are probably on the order of $20 billion a year, a small fraction of a percent of U.S. GDP, and that “seigniorage,” as it is called, would probably still exist even if the dollar lost ground to other currencies... > The safe haven aspect of the dollar is actually a negative for U.S. firms, since it implies that they become less competitive (the dollar is stronger) at precisely the times that global economic conditions are most difficult.

spats1990 6y ago

Thiel recently said something to the effect that it's possible bitcoin could be a tool for China to threaten the stability of the US dollar. Interestingly, he is an investor in a crypto startup[1] that (if its intents are read uncharitably) aims, with a stablecoin, to do something similar to the economy of Venezuela and other South American countries that have extremely inflation-prone currencies/have experienced hyperinflation. Mass adoption in Venezuela is the current goal of this project. At least as far as I can see, success for this project would mean some significant chunk of the Venezuelan population transacting in a currency controlled by a company based in California. [1] https://reserve.org/ https://reserve.org/

SkyBelow 6y ago

Couldn't it be the opposite? Bitcoin is losing, so they say this to get people to think Bitcoin is good so they'll use it instead of much harder to analyze crypto?