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I have spent the better part of a decade looking for legitimate uses. By which I mean legal, value-creating activities that aren't served better by some other t

I have spent the better part of a decade looking for legitimate uses. By which I mean legal, value-creating activities that aren't served better by some other technology. The very best I've found is that it's good for some light financial crime. Some money laundering, some ransomware, various sorts of scams and fraud. When I compare Bitcoin's paltry real-world use versus, say, M-Pesa and Venmo, which target the same initial uses as Bitcoin, I think it's especially easy to see that the legitimate problems were long ago solved pretty well. So a decade in, I'm comfortable saying the actual value is near enough to zero that it makes no practical difference.

godelski 4y ago
I think there is real value in having digital cash. That is, a digital currency that is both private and secure. I'm thinking something along the lines of zcash though, not bitcoin. I agree that there are other technologies that solve a lot of the same problems cryptocurrencies serve, but I think your search criteria is wrong. You're looking for legitimate users instead of looking for legitimate usecases. Since the tech is new the only legitimate users you're going to find are fanboys and geeks. This is going to tell us very little about real world usages. If we judged a technology's use case by the number of legitimate users then we'd never invent new technologies because there are never legitimate users using technology that doesn't exist (and very few when it is new). So I don't understand your search criteria. There are many big fin companies investigating and using different cryptocurrencies though. Whether you call these legitimate users or not is very debatable though.
- wpietri 4y ago
  I think this shows a very poor understanding of technology adoption cycles: > If we judged a technology's use case by the number of legitimate users then we'd never invent new technologies because there are never legitimate users using technology that doesn't exist (and very few when it is new). This is definitely not true. Take the internet as an example. From its earliest days it was practical for its initial users. Then there was a long virtuous cycle of increasing capability and increasing users. Along the way, many of the new technologies had plenty of plausible initial users. E.g., look at the initial proposal for the WWW: http://info.cern.ch/hypertext/WWW/Proposal.html http://info.cern.ch/hypertext/WWW/Proposal.html You might also read "Crossing the Chasm", which describes the typical tech adoption lifecycle, who early users tend to be, and how one gets from there to a real success. > I think there is real value in having digital cash. That is, a digital currency that is both private and secure. I'm thinking something along the lines of zcash though, not bitcoin. I believe you think that. But I don't think the evidence bears you out. For most people digital cash already exists, and has since the days debit cards became popular. Bitcoin's actual use is a rounding era compared with M-Pesa's transaction volume, let alone debit and credit card use. > There are many big fin companies investigating and using different cryptocurrencies though. Whether you call these legitimate users or not is very debatable though. Sorry, but no, there's no real debate. It's true that many of them have investigated, because some VP saw something buzzy enough that a pilot project would give him a career advantage. But it's also true that real financial companies are actually doing very little with cryptocurrencies, and it's less over time. One could argue that's because major financial companies just don't get it. But I think the more plausible explanation is that they see a lot of risk, especially reputational risk and regulatory risk, with comparatively little offsetting reward.
  - godelski 4y ago
    > For most people digital cash already exists, and has since the days debit cards became popular. I don't think exchanging money that is tracked and the data is sold is privacy preserving and akin to cash. Honestly, I feel like you didn't read my comment but just ranted because I said cryptocurrencies might have some value (after stating that the vast majority of it is scams).
    - wpietri 4y ago
      I read your comment. I just think you're wrong. I understand that for you, being able to secretly use your money has value. Setting aside the extent to which that may not make sense (money is inherently social), it's still not something most people care about. In the US, use of actual cash is declining rapidly, going from over 30% of payments to under 20% in less than a decade. In many countries, it's lower still. I get that there are some people who have practical needs to hide their transactions. E.g., criminals. And there are some people who, as you, have an emotional or ideological desire for financial secrecy. But I don't think either group is sufficient to drive real adoption of cryptocurrency as a common payment mechanism. The former group is self-limiting; they attract police attention and regulatory scrutiny and create branding problems. And I think the latter group is too niche to matter enough to the rest of the payment market. Maybe I'm wrong, of course, but after a decade of asking for real uses and getting back handwaving, I'm not sweating this one.

godelski 4y ago

I think there is real value in having digital cash. That is, a digital currency that is both private and secure. I'm thinking something along the lines of zcash though, not bitcoin. I agree that there are other technologies that solve a lot of the same problems cryptocurrencies serve, but I think your search criteria is wrong. You're looking for legitimate users instead of looking for legitimate usecases. Since the tech is new the only legitimate users you're going to find are fanboys and geeks. This is going to tell us very little about real world usages. If we judged a technology's use case by the number of legitimate users then we'd never invent new technologies because there are never legitimate users using technology that doesn't exist (and very few when it is new). So I don't understand your search criteria. There are many big fin companies investigating and using different cryptocurrencies though. Whether you call these legitimate users or not is very debatable though.

wpietri 4y ago
I think this shows a very poor understanding of technology adoption cycles: > If we judged a technology's use case by the number of legitimate users then we'd never invent new technologies because there are never legitimate users using technology that doesn't exist (and very few when it is new). This is definitely not true. Take the internet as an example. From its earliest days it was practical for its initial users. Then there was a long virtuous cycle of increasing capability and increasing users. Along the way, many of the new technologies had plenty of plausible initial users. E.g., look at the initial proposal for the WWW: http://info.cern.ch/hypertext/WWW/Proposal.html http://info.cern.ch/hypertext/WWW/Proposal.html You might also read "Crossing the Chasm", which describes the typical tech adoption lifecycle, who early users tend to be, and how one gets from there to a real success. > I think there is real value in having digital cash. That is, a digital currency that is both private and secure. I'm thinking something along the lines of zcash though, not bitcoin. I believe you think that. But I don't think the evidence bears you out. For most people digital cash already exists, and has since the days debit cards became popular. Bitcoin's actual use is a rounding era compared with M-Pesa's transaction volume, let alone debit and credit card use. > There are many big fin companies investigating and using different cryptocurrencies though. Whether you call these legitimate users or not is very debatable though. Sorry, but no, there's no real debate. It's true that many of them have investigated, because some VP saw something buzzy enough that a pilot project would give him a career advantage. But it's also true that real financial companies are actually doing very little with cryptocurrencies, and it's less over time. One could argue that's because major financial companies just don't get it. But I think the more plausible explanation is that they see a lot of risk, especially reputational risk and regulatory risk, with comparatively little offsetting reward.
- godelski 4y ago
  > For most people digital cash already exists, and has since the days debit cards became popular. I don't think exchanging money that is tracked and the data is sold is privacy preserving and akin to cash. Honestly, I feel like you didn't read my comment but just ranted because I said cryptocurrencies might have some value (after stating that the vast majority of it is scams).
  - wpietri 4y ago
    I read your comment. I just think you're wrong. I understand that for you, being able to secretly use your money has value. Setting aside the extent to which that may not make sense (money is inherently social), it's still not something most people care about. In the US, use of actual cash is declining rapidly, going from over 30% of payments to under 20% in less than a decade. In many countries, it's lower still. I get that there are some people who have practical needs to hide their transactions. E.g., criminals. And there are some people who, as you, have an emotional or ideological desire for financial secrecy. But I don't think either group is sufficient to drive real adoption of cryptocurrency as a common payment mechanism. The former group is self-limiting; they attract police attention and regulatory scrutiny and create branding problems. And I think the latter group is too niche to matter enough to the rest of the payment market. Maybe I'm wrong, of course, but after a decade of asking for real uses and getting back handwaving, I'm not sweating this one.