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So, I'm just a guy, been a software engineer most of my life, from age 7 or so when dad first showed me how to punch some commands in DOS. Probably like many of

by voz_ 5y ago

So, I'm just a guy, been a software engineer most of my life, from age 7 or so when dad first showed me how to punch some commands in DOS. Probably like many of you here. So, when you read what I am about to write, please don't attack me, please read it with an inquisitive, truth seeking perspective. I come in peace, if even you don't like what I am about to say. When I first got into tech, the technology amazed me, not the problems it solved. The tech was enough, it was not a means to an end, it just was. As I got older, and started owning projects, managing teams, etc, I realized that technology should be in service of something, not just a thing to exist in and of itself. So, how does that relate to this? One question I have constantly asked, and never gotten an answer to - What problem does Bitcoin (Or blockchain, if you prefer, I'll take either answer), solve? What problem does it solve that no other distributed system does as well, if not better? I've yet to see the answer. inb4 payments: Payments has been the closest answer, but then you realize that payments infra is bogged down by regulation, not by technology, and that any technology that goes to replace existing tech will get regulated down into the same place.

gassius 5y ago
I would say this, as someone who was deep into Bitcoin until 2012 or so, got out but still use it ocasionally as payment method. For me, coming from a country ravaged by corrupt politicians, that controlled the Central Bank, and destroyed the country with years of hyperinflation, among other tools of destruction, the biggest problem Bitcoin seems to solve is Economic Dependency on Public Policy
AlchemistCamp 5y ago
> "So, how does that relate to this? One question I have constantly asked, and never gotten an answer to - What problem does Bitcoin (Or blockchain, if you prefer, I'll take either answer), solve? What problem does it solve that no other distributed system does as well, if not better? I've yet to see the answer." https://en.wikipedia.org/wiki/Byzantine_fault https://en.wikipedia.org/wiki/Byzantine_fault
FpUser 5y ago
>"I realized that technology should be in service of something, not just a thing to exist in and of itself." While for me technology is just a tool to help me make what I want I do realize one can just practice / enjoy it as an art form. Nothing is wrong with it.
- voz_ 5y ago
  In service of art is still a legitimate and important use case! Not sure that's what crypto is for though.
mrb 5y ago
«What problem does Bitcoin solve» Easy: it's censorship-resistant. You send a transaction and no middleman, no financial organization, no one can prevent you from sending it. You can transact with anyone, anywhere, 24/7/365, however much you want, $100 or $100 million. No other system does this. On the other hand, with legacy systems, Paypal can freeze your account, Zelle limits your sends to $2500/month, a credit card company can deny your transaction, a bank chooses to not process your international wires on "weekends and holidays", etc. Limits everywhere.
- SideburnsOfDoom 5y ago
  > Easy: it's censorship-resistant. You send a transaction and no middleman, no financial organization, no one can prevent you from sending it. Devil's advocate here: How is a state not going to see that as a bug not a feature? Do you think that governments will let the loophole stand and grow? Won't there inevitably be a choice eventually: get regulation and oversight like any other mass payment method, or be banned outright, and driven to the margins of society?
- wldcordeiro 5y ago
  > bogged down by regulation... Except for this bit though. Eventually it too gets regulated and has been.
- voz_ 5y ago
  1) You're right, and perhaps its a position of privilege to say this, but this does not seem to be a real problem worth solving? I've transacted a lot of money, both ingress and egress, buying a modest home, a car or two, paying off student loans, etc. No one has ever tried to censor me. 2) Beyond censorship, one needs safety. It may not be censored, but its certainly traceable, so how useful is the lack of censorship without anonymity? 3) If we take it that it solves this (both 1 and 2), then moving on to the other part of the question, how does it solve it better than any other distributed infrastructure? You could build a censorship resistant payment system without the insanely excessive hoarding of base wealth (like the gold mining analogy in the payment article), and without the insane environmental impact. 4) Let's say it solves 1, and 2, but we can't do better and I am wrong in 3. Is this problem worth the massive environmental cost to solve?
azth 5y ago
> What problem does Bitcoin, solve? Moving away from an inflationary currency that the government is able to keep printing more of and devaluing everyone's hard work, to something closer to the gold standard. Of course, things are very volatile now, but hopefully in the future the price of the major crypto currencies stabilizes.
- erehweb 5y ago
  We already have gold, though.
  - oceanghost 5y ago
    But not a gold standard. The powers that be have manipulated the price of gold such that its an open secret that it will never be worth anything.
  - koonsolo 5y ago
    Gold is heavy, needs to be physically sent, and where do you store loads of it? Crypto seems more practical to own and trade. Or do you mean owning a document that is backed by gold? Not the same is it?
    - foepys 5y ago
      You don't actually own cryto currencies either. You own the key, equivalent to the document you mentioned. If something happened to the blockchain, your key would be worthless. Much like a bank that got robbed. Storing crypto currencies is also very expensive, at least for all popular ones. Proof of Work requires to chrun out hashes to secure the network from external threats and in the car of Bitcoin it costs billions each year. Compared to the relatively low number of users it's very expensive and resource intensive.
      - keymone 5y ago
        this is just false. the document is just assignment of rights while they key is literal asset. trying to equate the two means you either don't understand or you have some agenda.
tern 5y ago
This is like asking "what problem do computers solve?" I recommend you have a look at the ecosystem where literally thousands of problems are being solved in new ways, and more every day than it's possible to keep up with.
- voz_ 5y ago
  Please be kind, and don't snipe or deride my question. Instead of hand waiving a recommendation, can you provide some answers?
  - tern 5y ago
    Sorry, after awhile I've started to feel frustrated with the dominant narrative on HN. When I'm interested to get a feel for the range of crypto projects with significant traction, I sometimes start here: https://snapshot.org/#/ https://snapshot.org/#/ But it's hard to point to a single place. There are many worlds in crypto. Twitter is a portal to some. One must go on an adventure. Here's something a friend works on: https://www.regen.network/ https://www.regen.network/ For me, crypto enables experimenting with new kinds of corporate structures. That's what I work on. I think we have a decent shot at replacing the current model—basically psychopathic projections of sick humans minds—with something that won't destroy Earth. It's very hard to do that without programmable money.
    - koonsolo 5y ago
      Oh the irony. First gives a short answer. Other poster is not satisied with that. Then apologizes and gives a longer more informative answer. Then gets downvoted to hell. I wonder if next time, you will still give a longer answer, or just not bother anymore. Welcome to the club.
      - CTmystery 5y ago
        Perhaps the downvotes were harsh (I was not one of them, can't downvote :), but the question was "what problem does bitcoin solve?". I'm having a hard time seeing any problem in the parent's comment. Instead of identifying a problem, poster is encouraging us to go on an adventure.
pizza 5y ago
It’s sort of a genie in a bottle proof of concept. It becomes whatever its desiderants wish for, about half the time, maybe. I think if you really want to understand why it has become so powerful, then you have to change the question of “how does this solve a problem people have and therefore empower people?”, to “but how does it apparently empower its worshippers without solving a problem at all?” I am basically not talking about the merits of its technical design; I am talking about the impact of having a software that a nontrivial minority of society view as a money pump whose only input resource constraint is lines of code + cheap hash compute. In a way you can reframe it like this: when you learn lisp, you realize, code is just data. Bitcoin had some people conclude, code could also be money. Then the ethereum fans have another epiphany: money can be computation etc and so on w the others. I think it’s less so fidelity to being the optimal remedy for the present’s ailments, and more being wedded to the inpouring of dedication of a few talented coders being caught up in a style of financialized mass sociotechnological engagement that was not really possible to witness until fairly recently w the modern internet
- petermelias 5y ago
  I like this framing. I think there's a rebellious undertone to some of the aforementioned "worshippers" -- and at least as many are definitely there for the money-pump effect.
nightski 5y ago
A decentralized, global currency that makes sending/receiving money cheap & easy anywhere in the globe. I do think payments will come in time as well with Visa & Square both heavily invested in the space. It doesn't need to be optimal or better than any of the other solutions. Because the above is enough. Something like that takes time. Like you said it's not just about the technology (which itself has evolved a lot). It's about momentum, knowledge and trust. We now have the crypto.com stadium in LA (ex Staples Center). It's gaining momentum with the public, corporations, and financial institutions. The decentralized nature has made it so far resilient to bans & attacks. It's fine if crypto gets heavily regulated. In fact in my opinion that would only build trust in it. The space does not need to be the wild west. But people take more time to change than technology.
- riantogo 5y ago
  Won't regulations make it expensive? I don't think the technical aspects of money causes the high transaction cost. The regulations does.
- grey-area 5y ago
  Current fees are very high: eth $81!, Bitcoin $2.78 Time to confirmation varies from 300-600 seconds compared with ~ 1-3 seconds on traditional networks. I’m afraid it is neither cheap nor easy.
  - keymone 5y ago
    0 fees on bitcoin with lightning. confirmation as fast as your internet latency. no tradeoff in security or underlying asset - it's still bitcoin.
  - pcthrowaway 5y ago
    There are other blockchains without those issues. I'm not naming names but if you care to research the space at all you'll find many, with various strengths and tradeoffs.
  - TimJRobinson 5y ago
    zksync, Optimism, Arbitrum, DyDx, Loopring are all available now, have instant confirmations, and cost <$1 for transactions. They are layer 2's on top of Ethereum. This is why Visa and other major financial firms are building on Ethereum.
kipchak 5y ago
I suppose the classic answer to the problem it solves is the Byzantine general's problem, or in other words the combination of incentives and rules to allow records to be made on a distributed system that isn't actively managed by anyone.
- ALittleLight 5y ago
  But what problem does that solve?
  - kipchak 5y ago
    Debts and units of account are arguably a foundational part of civilization. In David Graeber's 'Debt the first 5000 years' he argues that debit and credit appeared before money and barter. Regardless of which came first writing seems to have emerged out of a need to keep a ledger - so and so owes 5 loaves of bread and is owed 2 clay pots.[1] The downside to such a system is that it either requires a central authority to manage the contracts, and have some sort of stick it can hit you with, or it can physically be changed. With a clay tablet contract for example I could destroy the tablet, or it could be held by the third Mesopotamian government and enforced by them to throw me in debtors prison or something if I refused to pay. This necessitates a central authority with something like "legitimate state monopoly over the means of violence" in a best case scenario to keep bad actors from violating their agreements. In a less than best case scenario, such a monopoly allows for exploitation of it's power. A decentralized ledger allows for agreements to be made without the risk of the agreement being broken by the other person or the central authority. Precious metals fulfilled the same role previously, as an ounce of silver is an ounce of silver, regardless of what may happen in the future. Frankly I have no idea if anything will come of it in favor of existing systems. Perhaps on the whole the existing system is more effect. But personally it's pretty exciting from a historical/economic perspective. [1]https://www.bbc.com/news/business-39870485 https://www.bbc.com/news/business-39870485
beambot 5y ago
"Crypto" is a general set of fundamental primitives for decentralized infrastructure. (1) A decentralized, "trustless" ledger. There are a ton of use cases here -- akin to databases, but without having to trust a central authority to not go in and just tweak the rows. Good examples: Land registries, stock ownership (current status quo with entities such as DTCC are "interesting" in the loopholes), etc. Bitcoin made this datastructure popular, but it has become (effectively) a Digital Gold; I do not think it will "win" the day due to some key limitations around Proof of Work. (2) Futures contracts on compute power. Ethereum is a good example. Each "smart contract" lives on the blockchain and is akin to a perpetual AWS Lamda-style program. You can spend ETH to publish or execute programs. By owning ETH, you have a futures contract on said computation. (3) Futures contract on file storage. The most prominent examples are IPFS/Filecoin & AR Weave. People earn tokens by storing files & spend tokens to have someone host files. Owning tokens gives you the ability to store files in the future. (4) Decentralized governance (DAOs). These are new ways for people to organize and control the direction of projects. It makes things like voting trivial & verifiable. See recent US elections for examples of how this is beneficial. (5) Decentralized Finance (DeFi): Combining the above, you can do amazing things in finance without relying on centralized institutions. For example: DEXs (decentralized exchanges) are marvelous -- you can convert between virtually any pair of crypto currencies automatically without restriction. (6) You can build incentivization structures to enable microtransactions. A good example is Helium -- a LoRa wireless network (900MHz, super-low datarate IoT) ecosystem that covers vast areas. You earn Helium by providing area coverage & transferring data. You spend Helium by using bandwidth. All of it is done without a big central authority (e.g. legacy telcos). Currently in the process of supporting cellular & wifi. Using these primitives, you can build a host of valuable applications. E.g. rideshare is really just a giant decentralized auction on moving things from A->B -- doesn't matter if it's Uber, Lyft, taxis, autonomous cars, or random people with a vehicle -- you could implement the auction via smart contracts and have "perfect" balance of supply, demand & pricing. I would liken the state of crypto today to the internet in 1995-1998 -- bubble & all. My suggestion: Try not to judge the www by your experiences with usenet. The "toys" of today could very well become the most valuable institutions on the planet in 20 years. And above all, remember that in the scope of humanity, money is not that old -- and fiat less the gold standard even less so: https://www.youtube.com/watch?v=-nZkP2b-4vo https://www.youtube.com/watch?v=-nZkP2b-4vo
csallen 5y ago
> What problem does Bitcoin (Or blockchain, if you prefer, I'll take either answer), solve? I'll bite. Currently, digital goods are relatively useless, which disincentivizes their creation and usage. NFTs change this, by making digital goods far more useful, which will encourage the creation of innovative digital goods we've never seen before, and add useful new functionality to apps/websites/games. What's a digital good? It's basically any data stored in a database: tweets, forum posts, upvotes, badges, items in video games, etc. These goods aren't very useful for numerous reasons. For example, they're typically leased rather than owned. If Twitter were to close its doors tomorrow, you would quickly find out that "your" tweets are really their tweets, and they can delete them from their database if they want to. Also, digital goods aren't portable. There's no real way for you to take your HN points with you to another website. Instead, that website would have to ping HN's API (if it even has one) with your credentials to ask how many points you have. Imagine if the real world worked this way. If you went to buy alcohol from a restaurant or a store, you wouldn't actually own a driver's license that you could carry around with you. Instead, each establishment you patronize would have to call up the DMV and ask them to check their database to see if they have your license on file and if you're above the legal age to drink. This would obviously be a shitty way for goods to behave. But that's how they work online. By making use of the blockchain, NFTs are a decentralized way to track ownership of digital goods. In essence, your crypto wallet(s) can serve as a "digital backpack" for you to store digital goods (NFTs) that you've acquired from apps, games, websites, or other people. That means real ownership -- none of your goods disappear just because the entity that gave them to you disappeared, nor can anyone tell you what you can and can't do with your goods. It also means portability. Today when you show up to a new app/website, they have no idea who you are. In the future, you'll show up with your digital backpacks in tow, and you can reveal their contents to the service you're using, and they can see what you have and react accordingly. That's what portability means, and it's obviously quite useful. For example: - Let's say Reddit granted you an NFT badge for being a moderator. When you sign up for Hacker News, you could share your digital backpack, and HN could look inside and see the moderator badge NFT you got from Reddit, and decide you're worth trusting more than the average Joe. Maybe HN would give you downvote privileges without making you earn the points first? Who knows. But one could imagine lots of trust-based use cases like this. What if colleges gave students NFT-representations of their degrees? - I believe Lyft employees get $400 in free rides every month. Imagine if that was handled via an NFT: new employees get an NFT, and Lyft gives anyone who owns that NFT the free rides. Most would just keep it. But some employees might choose to sell, trade, or give it away. After all, it's their NFT that they own, not just some row in Lyft's database. You could apply this to other perks and awards as well. Suddenly, perks are granular and portable. - What if games give you NFT representations of the items you earn? Then other games can see that you earned those items, and if their developers choose to, they can represent the items in their games, too. Perhaps if I get an NFT showing that I'm a grandmaster in StarCraft 2, some other game can skip me ahead in the ladder so I don't have to grind my way up. Or if I earn a magical sword in World of WarCraft, another game might give me their version of that sword just because they know I'll think it's cool. - Every time I sign up for a new social network, forum, or dating site, I have to reenter my biographical information from scratch. This is tedious. What if I could just write down my bio and keep it in one of my backpacks as an NFT? Now every time I sign up for a website, I can show them my backpack, and they can autofill my bio. - etc. If this technology becomes ubiquitous, it's difficult to imagine what types of digital goods will be created 5 or 10 years from now, just like nobody imagined Airbnb or Uber back in 1993 when the web was new. What this essentially does is transform the internet into a metaverse. Instead of a bunch of silo'd apps that store all their data in silo'd databases, we as individuals own and control our own data, that we take with us from place to place. Instead of apps having to make NxM API calls to interact, there's one global API (the blockchain) that every app can write to and read from. Suddenly, everything on the internet is interoperable. > What problem does it solve that no other distributed system does as well, if not better? I've yet to see the answer. This doesn't matter that much. Is HTML the best technology imaginable to build web apps front ends? Certainly not. But it's the one that won, so that's what we have. Similarly, blockchains are winning handily. For various reasons, they're gaining mass adoption. It's quite likely that the internet of the future will be built on top of blockchains. In fact it's already happening.
moksly 5y ago
I worked in the public sector for decades and we did so many proof of concepts on block chains, exactly because successful consultants and university researchers (the sort of people we trust) tried to sell us various ideas. It never stuck in my country, I think it did for a while in Sweden for their land ownership systems, but never here. It never stuck because it’s just a terribly inefficient database. There is a use case for decentralised landownership, maybe not in a low corrupt country like Sweden, but I’m sure you can think of places where total transparency in land ownership and the transfer of land ownership would matter. The problem blockchain doesn’t solve is that even with perfect transparency, your claim of ownership means nothing to the people with guns. Which means it doesn’t actually help you in countries that aren’t big like Sweden. The same is true for all its use cases, including money. Because even money relies more on the established system more than any crypto fan will ever care to admit to themselves.
- Kinrany 5y ago
  What problem does blockchain solve there? Land is expensive and not exchanged often, it wouldn't be a problem to require every operation to be submitted to a government agency, right?
  - sokoloff 5y ago
    You only need to have any widely trusted entity. A government entity is not always widely trusted, nor trustworthy everywhere globally.
    - katbyte 5y ago
      I think that comes back to “the people with guns don’t have to care what the blockchain says” - and places without a widely trusted entity are likely to have the people with the guns.
    - n_time 5y ago
      If you don't have a system that enforces private ownership then who cares what a blockchain says? Screenshots NFT
onion2k 5y ago
What problem does Bitcoin (Or blockchain, if you prefer, I'll take either answer), solve? Blockchains solve an unusual problem of how to get trust between untrustworthy parties. The underlying problem is "how do you make a secure distributed ledger that all parties can agree on". Using the previous entries to sign new entries is a good solution. The problem is that Bitcoin has nothing to do with that problem.
- Jensson 5y ago
  > Blockchains solve an unusual problem of how to get trust between untrustworthy parties. People keep repeating this, but this isn't true. It doesn't solve this problem for the general case, it only solve this under very special circumstances and it has yet to be proven that these circumstances allows blockchain to be useful for anything but as a currency. This is what the crypto proponents doesn't understand, they think like you do here that you can just slap blockchain on stuff and now it is trustworthy. The interesting thing is that it is people believing that blockchain makes something trustworthy that is its real value. If you can slap blockchain on a scam to make people believe it is trustworthy, now that is worth many billions of dollars! That is the true value of blockchain. And it wont be valuable as anything other than as a scam as long as people can't tell the difference between a blockchain scam and a real blockchain business, and since it seems basically nobody who is pro-crypto can do this I don't see a bright future for it.
  - onion2k 5y ago
    People keep repeating this, but this isn't true. It doesn't solve this problem for the general case Why not? A signed distributed ledger isn't a complicated thing, so it's hard to see how a blockchain would fail in. Cryptocurrencies are an application of blockchain as a technology. They may or may not need to use one. That doesn't have any impact on the use of blockchain in other areas, like supply chain validation for example.
    - Jensson 5y ago
      > A signed distributed ledger isn't a complicated thing, so it's hard to see how a blockchain would fail in. Right, but a signed distributed ledger doesn't inherently provide any trust, so that is where your thinking fails. > Cryptocurrencies are an application of blockchain as a technology. They may or may not need to use one. That doesn't have any impact on the use of blockchain in other areas, like supply chain validation for example. Certificate authorities for signing things like products or documents already exists for many things, blockchain isn't a new solution to that.
otabdeveloper4 5y ago
> What problem does Bitcoin (Or blockchain, if you prefer, I'll take either answer), solve? Getting techies without connections to Big Finance rich. A case could be made why that's a good thing for society. (Would you rather some entity like HSBC hoard the wealth instead?)
wsc981 5y ago
At this point I kinda feel it’s a pointless to try to explain anyone on the values of crypto-currencies (and Bitcoin in particular). In many online discussions I’ve brought up the values that I see in Bitcoin and then the discussion partner says most of these values are (in their view) not valid. So I guess people have just dramatically different views on the values of cryptocurrencies that cannot be reconciled. In the end it doesn’t really matter. I keep investing in Bitcoin and other people don’t. Live and let live. I don’t really see a need to try to convince other people to buy cryptos.
deleted 5y ago
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opportune 5y ago
Payments may very well be held back by regulation. But because crypto currencies are essentially permissionless protocols, they can kind of just…ignore all of that, which makes them useful but also of dubious legality. And it definitely results in adverse selection because then of course people who want to avoid the regular banking/payment system will use the next best thing available. Still, it’s utility, even if it’s grey market (of course it can be used for black market stuff, but it’s a protocol agnostic of that). For me I have purchased legal stuff with crypto that regular payment processors had essentially banned, so crypto was actually a better option than alternatives like e-check.
- bradwood 5y ago
  Yeah. Let's ban the internet because of kiddie porn and hackers and drug dealers on the dark net. /s
  - opportune 5y ago
    Clearly HTTP is the problem here. Nobody would be committing crimes if they were limited to mail.
nostrademons 5y ago
> What problem does Bitcoin solve? "Other people are rich and I'm not." It's a Ponzi scheme, but it's a Ponzi scheme that is legal for now, worldwide, can be participated in from the comfort of your own home or mobile phone, and should be good for the next 120 years or so. It's had a lot of help from inflation, state failure, low interest rates and resulting high asset prices, and shortages of fundamental goods like housing and health care that lead people to believe that they'll never have them without getting rich. But fundamentally people invest in Bitcoin because they want to redirect other people's wealth into their wallets, and believe that they'll be the ones receiving wealth rather than losing it. It's a cynical take, but fundamentally "other people are rich and I'm not" has been a prime driver of human behavior for millennia.
- oblio 5y ago
  I don't think there's been any purely financial Ponzi scheme that lasted more than 50. And definitely not on this scale. At some point you run out of suckers :-) I'm curious when this crash will happen and we see the hype go away and see some valid blockchain uses.
  - caf 5y ago
    Bitcoin needs even more fresh meat than the average "purely financial" scheme because there's an unavoidable amount of value leaving the scheme every day just to pay for electricity to keep the whole show rolling.
    - pcthrowaway 5y ago
      Bitcoin yes, but the cryptocurrency market as a whole is moving towards proof of stake cryptocurrencies which don't have this specific issue. In 4-10 years I don't think Bitcoin will still be the most valuable cryptocurrency by market cap.
- samhw 5y ago
  I think the problem is that the current nature of Bitcoin and its community is so silly, and so far from what it was intended to be, that it blinds people to its real potential. It is a good implementation of digital cash which could solve the problems that digital cash intends to solve, if it sorts out a few of its issues (computational inefficiency, latency, storage ineffiency). TLDR: Bitcoin is a clever and nearly-adequate solution to the problem it meant to solve, which is being drastically misused, and yet that doesn't reflect on Bitcoin itself (any more than tulip mania reflected on the merits of tulips).
codingclaws 5y ago
I think it facilitates the construction of non-hierarchical organizations where the participants don't have to know each other. In other words, it seems feasible to build companies that have low politics, low backstabbing and minimal profit siphoning. Of course, it will probably take some sophisticated code and some time.
- deleted 5y ago
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wallacoloo 5y ago
> One question I have constantly asked, and never gotten an answer to - What problem does Bitcoin (Or blockchain, if you prefer, I'll take either answer), solve? i just can’t tell if these comments are in good faith or not anymore. every thread on HN that even brushes up against crypto has about a million comments explaining what problems these things solve. you can disagree with the solutions, you can find it hard to relate to the problems being solved, but don’t play the “i’ve never gotten an answer to <x>“ game here, because you absolutely have.
- acdha 5y ago
  > every thread on HN that even brushes up against crypto has about a million comments explaining what problems these things solve. More accurately, they have plenty of people with a financial stake saying that the technology can solve a particular problem. It’s exceedingly rare that they can discuss the problem at a level of detail demonstrating real understanding of the problem, the systems currently being used, or, especially, non-hypothetical ways to deal with the limitations of the proposed system.
- 6gvONxR4sf7o 5y ago
  > “i’ve never gotten an answer to <x>“ game here, because you absolutely have. How about “i’ve never gotten a satisfactory answer to <x>?“
johanneskanybal 5y ago
The double spend problem. That enabled decentralised trust and interchange of value. You could tank the value of bitcoin or ethereum by imposing tough regulations to it but it will still be around regardless of what you do as long as we're here. The implications for what that means for banks and governments of today is huge. In the meantime though what people actually use it for today: - To get richer because the price is going up - To get richer because it's an unregulated market so you can be a market maker today or dive into all the other trading variants programable money enables that don't have any counter-part in traditional finance. - To get richer starting a small project with no experience and getting overfunded. - To transact because you're part of the 1.7 billion unbanked - To keep your wealth because you're part of the masses that don't agree with your governments restrictions on your money (china comes to mind but you could expand it to westerners too that don't agree) - (less than 5% probably?) build stuff, experiment, learn, try to come up with the financial system of tomorrow.
xunn0026 5y ago
> When I first got into tech, the technology amazed me, not the problems it solved. The tech was enough, it was not a means to an end, it just was. As I got older, and started owning projects, managing teams, etc, I realized that technology should be in service of something, not just a thing to exist in and of itself. This reminds me when somebody on an old project said: "well, Git is almost the same as our Subversion..." But, in the end, why not be amazed by the technology? Why can we gamble but not crypto trade? It's not logical. Let's take smokers. They are burning their cash plus getting themselves sick, getting others to breathe their smoke and loading our universal healthcare through their individual addictions. What problem does smoking solve?
- scns 5y ago
  For the individual? Depends. The percentage of individuals with ADD smoking is 10x higher than in neurotypicals (whatever that may be). Dopamine deficiency may be one "problem" people self medicating with nicotine might try to "fix" (treating symptoms).
specialist 5y ago
Mid 2000s, I was interested in using rolling hash logging for tamper evident audit logs. For use cases in healthcare (medical records) and election integrity (did someone change the tally). One logical extension (expansion of scope) would be sharing these audit logs, mostly intra-organizations. aka blockchains. Once potential extension is to do accounting and finance on top of blockchains, potentially supplanting IRL trust relations with digital trust. Meaning doing biz with people you don't know. Voila! Cryptocurrency! -- IMHO, the central conceit (deceit) of cryptocurrency is that it's a decentralized system that replaces IRL trust relations. That'd be really cool if true. But it's not. And I'm not sure any wholly digital (financial) system can ever be decentralized, trustful, or both. Theoretically or practically.
game_the0ry 5y ago
> What problem does Bitcoin (Or blockchain, if you prefer, I'll take either answer), solve? My opinion - the most significant problem bitcoin (and, historically, gold) solves is it is a store of value that is difficult (arguably, technically impossible) to inflate - there will only be 21M bitcoin, ever. We all trust the fiat USD as a store of value bc we have trust that the US treasury and central bank will not start to fund government operations by "printing" more money.[1] However, that is effectively what is happening.[2] This is a really hard pill for people to swallow bc it fundamentally changes our worldview - "the US government is the most trustworthy, I have saved all my money in USD, how could they do that to me?" That emotional response will look like anger, hate, denial, etc. So, what the fed and the treasury are doing is very bad for everyone. Hopefully, the majority of Americans will come to that conclusion before it is forced upon them. How does bitcoin solve this? Bitcoin does the same thing gold did (except a lot better in a couple ways [3]). When I dig up a gold nugget, I worked to create it, which is another way of saying I spent some energy and that energy is represented in that nugget I hold in my hand.[4] Bitcoin is the nugget in electronic form. Digging those nuggets is hard bc they are rare, so I don't worry about more people competing with me with more nuggets.[5] Now the dollar has a competitor. I hope that bitcoin keeps the stewards of the USD honest, bc people can trade their dollars for bitcoin - that is the problem is solves. [1] I am not a fan of the word "printing" when describing the mechanics of what's going on today. It's an over-simplification, but analogous enough for people who do not have the intellectual inclination to go into the specifics. Most people get bored very fast when I try to talk about economics. [2] https://www.youtube.com/watch?v=csf4fdV-EOQ https://www.youtube.com/watch?v=csf4fdV-EOQ [3] It weighs as much as the thing that holds the private keys, takes up almost no space, is divisible, can use it for a payment very quickly, very divisible, bitcoins supply is known, etc. [4] If you take away anything from this post, please let it be this - energy is the master resource. [5] This is the best starting point for people to dig deeper (trigger warning, Jordan Peterson is in it) - https://www.youtube.com/watch?v=FXvQcuIb5rU&t=65s https://www.youtube.com/watch?v=FXvQcuIb5rU&t=65s
- scatters 5y ago
  21M bitcoin, and 21M Bitcoin Cash, and however many ether, and doge, and shiba, and Floki, etc... Will all of these retain their current valuation? If not, why should any of them?

by voz_ 5y ago

gassius 5y ago

I would say this, as someone who was deep into Bitcoin until 2012 or so, got out but still use it ocasionally as payment method. For me, coming from a country ravaged by corrupt politicians, that controlled the Central Bank, and destroyed the country with years of hyperinflation, among other tools of destruction, the biggest problem Bitcoin seems to solve is Economic Dependency on Public Policy

AlchemistCamp 5y ago

> "So, how does that relate to this? One question I have constantly asked, and never gotten an answer to - What problem does Bitcoin (Or blockchain, if you prefer, I'll take either answer), solve? What problem does it solve that no other distributed system does as well, if not better? I've yet to see the answer." https://en.wikipedia.org/wiki/Byzantine_fault https://en.wikipedia.org/wiki/Byzantine_fault

FpUser 5y ago

>"I realized that technology should be in service of something, not just a thing to exist in and of itself." While for me technology is just a tool to help me make what I want I do realize one can just practice / enjoy it as an art form. Nothing is wrong with it.

voz_ 5y ago
In service of art is still a legitimate and important use case! Not sure that's what crypto is for though.

mrb 5y ago

«What problem does Bitcoin solve» Easy: it's censorship-resistant. You send a transaction and no middleman, no financial organization, no one can prevent you from sending it. You can transact with anyone, anywhere, 24/7/365, however much you want, $100 or $100 million. No other system does this. On the other hand, with legacy systems, Paypal can freeze your account, Zelle limits your sends to $2500/month, a credit card company can deny your transaction, a bank chooses to not process your international wires on "weekends and holidays", etc. Limits everywhere.

SideburnsOfDoom 5y ago
> Easy: it's censorship-resistant. You send a transaction and no middleman, no financial organization, no one can prevent you from sending it. Devil's advocate here: How is a state not going to see that as a bug not a feature? Do you think that governments will let the loophole stand and grow? Won't there inevitably be a choice eventually: get regulation and oversight like any other mass payment method, or be banned outright, and driven to the margins of society?
wldcordeiro 5y ago
> bogged down by regulation... Except for this bit though. Eventually it too gets regulated and has been.
voz_ 5y ago
1) You're right, and perhaps its a position of privilege to say this, but this does not seem to be a real problem worth solving? I've transacted a lot of money, both ingress and egress, buying a modest home, a car or two, paying off student loans, etc. No one has ever tried to censor me. 2) Beyond censorship, one needs safety. It may not be censored, but its certainly traceable, so how useful is the lack of censorship without anonymity? 3) If we take it that it solves this (both 1 and 2), then moving on to the other part of the question, how does it solve it better than any other distributed infrastructure? You could build a censorship resistant payment system without the insanely excessive hoarding of base wealth (like the gold mining analogy in the payment article), and without the insane environmental impact. 4) Let's say it solves 1, and 2, but we can't do better and I am wrong in 3. Is this problem worth the massive environmental cost to solve?

azth 5y ago

> What problem does Bitcoin, solve? Moving away from an inflationary currency that the government is able to keep printing more of and devaluing everyone's hard work, to something closer to the gold standard. Of course, things are very volatile now, but hopefully in the future the price of the major crypto currencies stabilizes.

erehweb 5y ago
We already have gold, though.
- oceanghost 5y ago
  But not a gold standard. The powers that be have manipulated the price of gold such that its an open secret that it will never be worth anything.
- koonsolo 5y ago
  Gold is heavy, needs to be physically sent, and where do you store loads of it? Crypto seems more practical to own and trade. Or do you mean owning a document that is backed by gold? Not the same is it?
  - foepys 5y ago
    You don't actually own cryto currencies either. You own the key, equivalent to the document you mentioned. If something happened to the blockchain, your key would be worthless. Much like a bank that got robbed. Storing crypto currencies is also very expensive, at least for all popular ones. Proof of Work requires to chrun out hashes to secure the network from external threats and in the car of Bitcoin it costs billions each year. Compared to the relatively low number of users it's very expensive and resource intensive.
    - keymone 5y ago
      this is just false. the document is just assignment of rights while they key is literal asset. trying to equate the two means you either don't understand or you have some agenda.

tern 5y ago

This is like asking "what problem do computers solve?" I recommend you have a look at the ecosystem where literally thousands of problems are being solved in new ways, and more every day than it's possible to keep up with.

voz_ 5y ago
Please be kind, and don't snipe or deride my question. Instead of hand waiving a recommendation, can you provide some answers?
- tern 5y ago
  Sorry, after awhile I've started to feel frustrated with the dominant narrative on HN. When I'm interested to get a feel for the range of crypto projects with significant traction, I sometimes start here: https://snapshot.org/#/ https://snapshot.org/#/ But it's hard to point to a single place. There are many worlds in crypto. Twitter is a portal to some. One must go on an adventure. Here's something a friend works on: https://www.regen.network/ https://www.regen.network/ For me, crypto enables experimenting with new kinds of corporate structures. That's what I work on. I think we have a decent shot at replacing the current model—basically psychopathic projections of sick humans minds—with something that won't destroy Earth. It's very hard to do that without programmable money.
  - koonsolo 5y ago
    Oh the irony. First gives a short answer. Other poster is not satisied with that. Then apologizes and gives a longer more informative answer. Then gets downvoted to hell. I wonder if next time, you will still give a longer answer, or just not bother anymore. Welcome to the club.
    - CTmystery 5y ago
      Perhaps the downvotes were harsh (I was not one of them, can't downvote :), but the question was "what problem does bitcoin solve?". I'm having a hard time seeing any problem in the parent's comment. Instead of identifying a problem, poster is encouraging us to go on an adventure.

pizza 5y ago

It’s sort of a genie in a bottle proof of concept. It becomes whatever its desiderants wish for, about half the time, maybe. I think if you really want to understand why it has become so powerful, then you have to change the question of “how does this solve a problem people have and therefore empower people?”, to “but how does it apparently empower its worshippers without solving a problem at all?” I am basically not talking about the merits of its technical design; I am talking about the impact of having a software that a nontrivial minority of society view as a money pump whose only input resource constraint is lines of code + cheap hash compute. In a way you can reframe it like this: when you learn lisp, you realize, code is just data. Bitcoin had some people conclude, code could also be money. Then the ethereum fans have another epiphany: money can be computation etc and so on w the others. I think it’s less so fidelity to being the optimal remedy for the present’s ailments, and more being wedded to the inpouring of dedication of a few talented coders being caught up in a style of financialized mass sociotechnological engagement that was not really possible to witness until fairly recently w the modern internet

petermelias 5y ago
I like this framing. I think there's a rebellious undertone to some of the aforementioned "worshippers" -- and at least as many are definitely there for the money-pump effect.

nightski 5y ago

A decentralized, global currency that makes sending/receiving money cheap & easy anywhere in the globe. I do think payments will come in time as well with Visa & Square both heavily invested in the space. It doesn't need to be optimal or better than any of the other solutions. Because the above is enough. Something like that takes time. Like you said it's not just about the technology (which itself has evolved a lot). It's about momentum, knowledge and trust. We now have the crypto.com stadium in LA (ex Staples Center). It's gaining momentum with the public, corporations, and financial institutions. The decentralized nature has made it so far resilient to bans & attacks. It's fine if crypto gets heavily regulated. In fact in my opinion that would only build trust in it. The space does not need to be the wild west. But people take more time to change than technology.

riantogo 5y ago
Won't regulations make it expensive? I don't think the technical aspects of money causes the high transaction cost. The regulations does.
grey-area 5y ago
Current fees are very high: eth $81!, Bitcoin $2.78 Time to confirmation varies from 300-600 seconds compared with ~ 1-3 seconds on traditional networks. I’m afraid it is neither cheap nor easy.
- keymone 5y ago
  0 fees on bitcoin with lightning. confirmation as fast as your internet latency. no tradeoff in security or underlying asset - it's still bitcoin.
- pcthrowaway 5y ago
  There are other blockchains without those issues. I'm not naming names but if you care to research the space at all you'll find many, with various strengths and tradeoffs.
- TimJRobinson 5y ago
  zksync, Optimism, Arbitrum, DyDx, Loopring are all available now, have instant confirmations, and cost <$1 for transactions. They are layer 2's on top of Ethereum. This is why Visa and other major financial firms are building on Ethereum.

kipchak 5y ago

I suppose the classic answer to the problem it solves is the Byzantine general's problem, or in other words the combination of incentives and rules to allow records to be made on a distributed system that isn't actively managed by anyone.

ALittleLight 5y ago
But what problem does that solve?
- kipchak 5y ago
  Debts and units of account are arguably a foundational part of civilization. In David Graeber's 'Debt the first 5000 years' he argues that debit and credit appeared before money and barter. Regardless of which came first writing seems to have emerged out of a need to keep a ledger - so and so owes 5 loaves of bread and is owed 2 clay pots.[1] The downside to such a system is that it either requires a central authority to manage the contracts, and have some sort of stick it can hit you with, or it can physically be changed. With a clay tablet contract for example I could destroy the tablet, or it could be held by the third Mesopotamian government and enforced by them to throw me in debtors prison or something if I refused to pay. This necessitates a central authority with something like "legitimate state monopoly over the means of violence" in a best case scenario to keep bad actors from violating their agreements. In a less than best case scenario, such a monopoly allows for exploitation of it's power. A decentralized ledger allows for agreements to be made without the risk of the agreement being broken by the other person or the central authority. Precious metals fulfilled the same role previously, as an ounce of silver is an ounce of silver, regardless of what may happen in the future. Frankly I have no idea if anything will come of it in favor of existing systems. Perhaps on the whole the existing system is more effect. But personally it's pretty exciting from a historical/economic perspective. [1]https://www.bbc.com/news/business-39870485 https://www.bbc.com/news/business-39870485

beambot 5y ago

"Crypto" is a general set of fundamental primitives for decentralized infrastructure. (1) A decentralized, "trustless" ledger. There are a ton of use cases here -- akin to databases, but without having to trust a central authority to not go in and just tweak the rows. Good examples: Land registries, stock ownership (current status quo with entities such as DTCC are "interesting" in the loopholes), etc. Bitcoin made this datastructure popular, but it has become (effectively) a Digital Gold; I do not think it will "win" the day due to some key limitations around Proof of Work. (2) Futures contracts on compute power. Ethereum is a good example. Each "smart contract" lives on the blockchain and is akin to a perpetual AWS Lamda-style program. You can spend ETH to publish or execute programs. By owning ETH, you have a futures contract on said computation. (3) Futures contract on file storage. The most prominent examples are IPFS/Filecoin & AR Weave. People earn tokens by storing files & spend tokens to have someone host files. Owning tokens gives you the ability to store files in the future. (4) Decentralized governance (DAOs). These are new ways for people to organize and control the direction of projects. It makes things like voting trivial & verifiable. See recent US elections for examples of how this is beneficial. (5) Decentralized Finance (DeFi): Combining the above, you can do amazing things in finance without relying on centralized institutions. For example: DEXs (decentralized exchanges) are marvelous -- you can convert between virtually any pair of crypto currencies automatically without restriction. (6) You can build incentivization structures to enable microtransactions. A good example is Helium -- a LoRa wireless network (900MHz, super-low datarate IoT) ecosystem that covers vast areas. You earn Helium by providing area coverage & transferring data. You spend Helium by using bandwidth. All of it is done without a big central authority (e.g. legacy telcos). Currently in the process of supporting cellular & wifi. Using these primitives, you can build a host of valuable applications. E.g. rideshare is really just a giant decentralized auction on moving things from A->B -- doesn't matter if it's Uber, Lyft, taxis, autonomous cars, or random people with a vehicle -- you could implement the auction via smart contracts and have "perfect" balance of supply, demand & pricing. I would liken the state of crypto today to the internet in 1995-1998 -- bubble & all. My suggestion: Try not to judge the www by your experiences with usenet. The "toys" of today could very well become the most valuable institutions on the planet in 20 years. And above all, remember that in the scope of humanity, money is not that old -- and fiat less the gold standard even less so: https://www.youtube.com/watch?v=-nZkP2b-4vo https://www.youtube.com/watch?v=-nZkP2b-4vo

csallen 5y ago

> What problem does Bitcoin (Or blockchain, if you prefer, I'll take either answer), solve? I'll bite. Currently, digital goods are relatively useless, which disincentivizes their creation and usage. NFTs change this, by making digital goods far more useful, which will encourage the creation of innovative digital goods we've never seen before, and add useful new functionality to apps/websites/games. What's a digital good? It's basically any data stored in a database: tweets, forum posts, upvotes, badges, items in video games, etc. These goods aren't very useful for numerous reasons. For example, they're typically leased rather than owned. If Twitter were to close its doors tomorrow, you would quickly find out that "your" tweets are really their tweets, and they can delete them from their database if they want to. Also, digital goods aren't portable. There's no real way for you to take your HN points with you to another website. Instead, that website would have to ping HN's API (if it even has one) with your credentials to ask how many points you have. Imagine if the real world worked this way. If you went to buy alcohol from a restaurant or a store, you wouldn't actually own a driver's license that you could carry around with you. Instead, each establishment you patronize would have to call up the DMV and ask them to check their database to see if they have your license on file and if you're above the legal age to drink. This would obviously be a shitty way for goods to behave. But that's how they work online. By making use of the blockchain, NFTs are a decentralized way to track ownership of digital goods. In essence, your crypto wallet(s) can serve as a "digital backpack" for you to store digital goods (NFTs) that you've acquired from apps, games, websites, or other people. That means real ownership -- none of your goods disappear just because the entity that gave them to you disappeared, nor can anyone tell you what you can and can't do with your goods. It also means portability. Today when you show up to a new app/website, they have no idea who you are. In the future, you'll show up with your digital backpacks in tow, and you can reveal their contents to the service you're using, and they can see what you have and react accordingly. That's what portability means, and it's obviously quite useful. For example: - Let's say Reddit granted you an NFT badge for being a moderator. When you sign up for Hacker News, you could share your digital backpack, and HN could look inside and see the moderator badge NFT you got from Reddit, and decide you're worth trusting more than the average Joe. Maybe HN would give you downvote privileges without making you earn the points first? Who knows. But one could imagine lots of trust-based use cases like this. What if colleges gave students NFT-representations of their degrees? - I believe Lyft employees get $400 in free rides every month. Imagine if that was handled via an NFT: new employees get an NFT, and Lyft gives anyone who owns that NFT the free rides. Most would just keep it. But some employees might choose to sell, trade, or give it away. After all, it's their NFT that they own, not just some row in Lyft's database. You could apply this to other perks and awards as well. Suddenly, perks are granular and portable. - What if games give you NFT representations of the items you earn? Then other games can see that you earned those items, and if their developers choose to, they can represent the items in their games, too. Perhaps if I get an NFT showing that I'm a grandmaster in StarCraft 2, some other game can skip me ahead in the ladder so I don't have to grind my way up. Or if I earn a magical sword in World of WarCraft, another game might give me their version of that sword just because they know I'll think it's cool. - Every time I sign up for a new social network, forum, or dating site, I have to reenter my biographical information from scratch. This is tedious. What if I could just write down my bio and keep it in one of my backpacks as an NFT? Now every time I sign up for a website, I can show them my backpack, and they can autofill my bio. - etc. If this technology becomes ubiquitous, it's difficult to imagine what types of digital goods will be created 5 or 10 years from now, just like nobody imagined Airbnb or Uber back in 1993 when the web was new. What this essentially does is transform the internet into a metaverse. Instead of a bunch of silo'd apps that store all their data in silo'd databases, we as individuals own and control our own data, that we take with us from place to place. Instead of apps having to make NxM API calls to interact, there's one global API (the blockchain) that every app can write to and read from. Suddenly, everything on the internet is interoperable. > What problem does it solve that no other distributed system does as well, if not better? I've yet to see the answer. This doesn't matter that much. Is HTML the best technology imaginable to build web apps front ends? Certainly not. But it's the one that won, so that's what we have. Similarly, blockchains are winning handily. For various reasons, they're gaining mass adoption. It's quite likely that the internet of the future will be built on top of blockchains. In fact it's already happening.

moksly 5y ago

I worked in the public sector for decades and we did so many proof of concepts on block chains, exactly because successful consultants and university researchers (the sort of people we trust) tried to sell us various ideas. It never stuck in my country, I think it did for a while in Sweden for their land ownership systems, but never here. It never stuck because it’s just a terribly inefficient database. There is a use case for decentralised landownership, maybe not in a low corrupt country like Sweden, but I’m sure you can think of places where total transparency in land ownership and the transfer of land ownership would matter. The problem blockchain doesn’t solve is that even with perfect transparency, your claim of ownership means nothing to the people with guns. Which means it doesn’t actually help you in countries that aren’t big like Sweden. The same is true for all its use cases, including money. Because even money relies more on the established system more than any crypto fan will ever care to admit to themselves.

Kinrany 5y ago
What problem does blockchain solve there? Land is expensive and not exchanged often, it wouldn't be a problem to require every operation to be submitted to a government agency, right?
- sokoloff 5y ago
  You only need to have any widely trusted entity. A government entity is not always widely trusted, nor trustworthy everywhere globally.
  - katbyte 5y ago
    I think that comes back to “the people with guns don’t have to care what the blockchain says” - and places without a widely trusted entity are likely to have the people with the guns.
  - n_time 5y ago
    If you don't have a system that enforces private ownership then who cares what a blockchain says? Screenshots NFT

onion2k 5y ago

What problem does Bitcoin (Or blockchain, if you prefer, I'll take either answer), solve? Blockchains solve an unusual problem of how to get trust between untrustworthy parties. The underlying problem is "how do you make a secure distributed ledger that all parties can agree on". Using the previous entries to sign new entries is a good solution. The problem is that Bitcoin has nothing to do with that problem.

Jensson 5y ago
> Blockchains solve an unusual problem of how to get trust between untrustworthy parties. People keep repeating this, but this isn't true. It doesn't solve this problem for the general case, it only solve this under very special circumstances and it has yet to be proven that these circumstances allows blockchain to be useful for anything but as a currency. This is what the crypto proponents doesn't understand, they think like you do here that you can just slap blockchain on stuff and now it is trustworthy. The interesting thing is that it is people believing that blockchain makes something trustworthy that is its real value. If you can slap blockchain on a scam to make people believe it is trustworthy, now that is worth many billions of dollars! That is the true value of blockchain. And it wont be valuable as anything other than as a scam as long as people can't tell the difference between a blockchain scam and a real blockchain business, and since it seems basically nobody who is pro-crypto can do this I don't see a bright future for it.
- onion2k 5y ago
  People keep repeating this, but this isn't true. It doesn't solve this problem for the general case Why not? A signed distributed ledger isn't a complicated thing, so it's hard to see how a blockchain would fail in. Cryptocurrencies are an application of blockchain as a technology. They may or may not need to use one. That doesn't have any impact on the use of blockchain in other areas, like supply chain validation for example.
  - Jensson 5y ago
    > A signed distributed ledger isn't a complicated thing, so it's hard to see how a blockchain would fail in. Right, but a signed distributed ledger doesn't inherently provide any trust, so that is where your thinking fails. > Cryptocurrencies are an application of blockchain as a technology. They may or may not need to use one. That doesn't have any impact on the use of blockchain in other areas, like supply chain validation for example. Certificate authorities for signing things like products or documents already exists for many things, blockchain isn't a new solution to that.

otabdeveloper4 5y ago

> What problem does Bitcoin (Or blockchain, if you prefer, I'll take either answer), solve? Getting techies without connections to Big Finance rich. A case could be made why that's a good thing for society. (Would you rather some entity like HSBC hoard the wealth instead?)

wsc981 5y ago

At this point I kinda feel it’s a pointless to try to explain anyone on the values of crypto-currencies (and Bitcoin in particular). In many online discussions I’ve brought up the values that I see in Bitcoin and then the discussion partner says most of these values are (in their view) not valid. So I guess people have just dramatically different views on the values of cryptocurrencies that cannot be reconciled. In the end it doesn’t really matter. I keep investing in Bitcoin and other people don’t. Live and let live. I don’t really see a need to try to convince other people to buy cryptos.

deleted 5y ago

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opportune 5y ago

Payments may very well be held back by regulation. But because crypto currencies are essentially permissionless protocols, they can kind of just…ignore all of that, which makes them useful but also of dubious legality. And it definitely results in adverse selection because then of course people who want to avoid the regular banking/payment system will use the next best thing available. Still, it’s utility, even if it’s grey market (of course it can be used for black market stuff, but it’s a protocol agnostic of that). For me I have purchased legal stuff with crypto that regular payment processors had essentially banned, so crypto was actually a better option than alternatives like e-check.

bradwood 5y ago
Yeah. Let's ban the internet because of kiddie porn and hackers and drug dealers on the dark net. /s
- opportune 5y ago
  Clearly HTTP is the problem here. Nobody would be committing crimes if they were limited to mail.

nostrademons 5y ago

> What problem does Bitcoin solve? "Other people are rich and I'm not." It's a Ponzi scheme, but it's a Ponzi scheme that is legal for now, worldwide, can be participated in from the comfort of your own home or mobile phone, and should be good for the next 120 years or so. It's had a lot of help from inflation, state failure, low interest rates and resulting high asset prices, and shortages of fundamental goods like housing and health care that lead people to believe that they'll never have them without getting rich. But fundamentally people invest in Bitcoin because they want to redirect other people's wealth into their wallets, and believe that they'll be the ones receiving wealth rather than losing it. It's a cynical take, but fundamentally "other people are rich and I'm not" has been a prime driver of human behavior for millennia.

oblio 5y ago
I don't think there's been any purely financial Ponzi scheme that lasted more than 50. And definitely not on this scale. At some point you run out of suckers :-) I'm curious when this crash will happen and we see the hype go away and see some valid blockchain uses.
- caf 5y ago
  Bitcoin needs even more fresh meat than the average "purely financial" scheme because there's an unavoidable amount of value leaving the scheme every day just to pay for electricity to keep the whole show rolling.
  - pcthrowaway 5y ago
    Bitcoin yes, but the cryptocurrency market as a whole is moving towards proof of stake cryptocurrencies which don't have this specific issue. In 4-10 years I don't think Bitcoin will still be the most valuable cryptocurrency by market cap.
samhw 5y ago
I think the problem is that the current nature of Bitcoin and its community is so silly, and so far from what it was intended to be, that it blinds people to its real potential. It is a good implementation of digital cash which could solve the problems that digital cash intends to solve, if it sorts out a few of its issues (computational inefficiency, latency, storage ineffiency). TLDR: Bitcoin is a clever and nearly-adequate solution to the problem it meant to solve, which is being drastically misused, and yet that doesn't reflect on Bitcoin itself (any more than tulip mania reflected on the merits of tulips).

codingclaws 5y ago

I think it facilitates the construction of non-hierarchical organizations where the participants don't have to know each other. In other words, it seems feasible to build companies that have low politics, low backstabbing and minimal profit siphoning. Of course, it will probably take some sophisticated code and some time.

deleted 5y ago
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wallacoloo 5y ago

> One question I have constantly asked, and never gotten an answer to - What problem does Bitcoin (Or blockchain, if you prefer, I'll take either answer), solve? i just can’t tell if these comments are in good faith or not anymore. every thread on HN that even brushes up against crypto has about a million comments explaining what problems these things solve. you can disagree with the solutions, you can find it hard to relate to the problems being solved, but don’t play the “i’ve never gotten an answer to <x>“ game here, because you absolutely have.

acdha 5y ago
> every thread on HN that even brushes up against crypto has about a million comments explaining what problems these things solve. More accurately, they have plenty of people with a financial stake saying that the technology can solve a particular problem. It’s exceedingly rare that they can discuss the problem at a level of detail demonstrating real understanding of the problem, the systems currently being used, or, especially, non-hypothetical ways to deal with the limitations of the proposed system.
6gvONxR4sf7o 5y ago
> “i’ve never gotten an answer to <x>“ game here, because you absolutely have. How about “i’ve never gotten a satisfactory answer to <x>?“

johanneskanybal 5y ago

The double spend problem. That enabled decentralised trust and interchange of value. You could tank the value of bitcoin or ethereum by imposing tough regulations to it but it will still be around regardless of what you do as long as we're here. The implications for what that means for banks and governments of today is huge. In the meantime though what people actually use it for today: - To get richer because the price is going up - To get richer because it's an unregulated market so you can be a market maker today or dive into all the other trading variants programable money enables that don't have any counter-part in traditional finance. - To get richer starting a small project with no experience and getting overfunded. - To transact because you're part of the 1.7 billion unbanked - To keep your wealth because you're part of the masses that don't agree with your governments restrictions on your money (china comes to mind but you could expand it to westerners too that don't agree) - (less than 5% probably?) build stuff, experiment, learn, try to come up with the financial system of tomorrow.

xunn0026 5y ago

> When I first got into tech, the technology amazed me, not the problems it solved. The tech was enough, it was not a means to an end, it just was. As I got older, and started owning projects, managing teams, etc, I realized that technology should be in service of something, not just a thing to exist in and of itself. This reminds me when somebody on an old project said: "well, Git is almost the same as our Subversion..." But, in the end, why not be amazed by the technology? Why can we gamble but not crypto trade? It's not logical. Let's take smokers. They are burning their cash plus getting themselves sick, getting others to breathe their smoke and loading our universal healthcare through their individual addictions. What problem does smoking solve?

scns 5y ago
For the individual? Depends. The percentage of individuals with ADD smoking is 10x higher than in neurotypicals (whatever that may be). Dopamine deficiency may be one "problem" people self medicating with nicotine might try to "fix" (treating symptoms).

specialist 5y ago

Mid 2000s, I was interested in using rolling hash logging for tamper evident audit logs. For use cases in healthcare (medical records) and election integrity (did someone change the tally). One logical extension (expansion of scope) would be sharing these audit logs, mostly intra-organizations. aka blockchains. Once potential extension is to do accounting and finance on top of blockchains, potentially supplanting IRL trust relations with digital trust. Meaning doing biz with people you don't know. Voila! Cryptocurrency! -- IMHO, the central conceit (deceit) of cryptocurrency is that it's a decentralized system that replaces IRL trust relations. That'd be really cool if true. But it's not. And I'm not sure any wholly digital (financial) system can ever be decentralized, trustful, or both. Theoretically or practically.

game_the0ry 5y ago

> What problem does Bitcoin (Or blockchain, if you prefer, I'll take either answer), solve? My opinion - the most significant problem bitcoin (and, historically, gold) solves is it is a store of value that is difficult (arguably, technically impossible) to inflate - there will only be 21M bitcoin, ever. We all trust the fiat USD as a store of value bc we have trust that the US treasury and central bank will not start to fund government operations by "printing" more money.[1] However, that is effectively what is happening.[2] This is a really hard pill for people to swallow bc it fundamentally changes our worldview - "the US government is the most trustworthy, I have saved all my money in USD, how could they do that to me?" That emotional response will look like anger, hate, denial, etc. So, what the fed and the treasury are doing is very bad for everyone. Hopefully, the majority of Americans will come to that conclusion before it is forced upon them. How does bitcoin solve this? Bitcoin does the same thing gold did (except a lot better in a couple ways [3]). When I dig up a gold nugget, I worked to create it, which is another way of saying I spent some energy and that energy is represented in that nugget I hold in my hand.[4] Bitcoin is the nugget in electronic form. Digging those nuggets is hard bc they are rare, so I don't worry about more people competing with me with more nuggets.[5] Now the dollar has a competitor. I hope that bitcoin keeps the stewards of the USD honest, bc people can trade their dollars for bitcoin - that is the problem is solves. [1] I am not a fan of the word "printing" when describing the mechanics of what's going on today. It's an over-simplification, but analogous enough for people who do not have the intellectual inclination to go into the specifics. Most people get bored very fast when I try to talk about economics. [2] https://www.youtube.com/watch?v=csf4fdV-EOQ https://www.youtube.com/watch?v=csf4fdV-EOQ [3] It weighs as much as the thing that holds the private keys, takes up almost no space, is divisible, can use it for a payment very quickly, very divisible, bitcoins supply is known, etc. [4] If you take away anything from this post, please let it be this - energy is the master resource. [5] This is the best starting point for people to dig deeper (trigger warning, Jordan Peterson is in it) - https://www.youtube.com/watch?v=FXvQcuIb5rU&t=65s https://www.youtube.com/watch?v=FXvQcuIb5rU&t=65s

scatters 5y ago
21M bitcoin, and 21M Bitcoin Cash, and however many ether, and doge, and shiba, and Floki, etc... Will all of these retain their current valuation? If not, why should any of them?