6 ms·

> What exactly does bitcoin offer the world today? Aside from perhaps gold, bitcoin is the most successful currency in the world not associated with a central

by hx8 1y ago

> What exactly does bitcoin offer the world today? Aside from perhaps gold, bitcoin is the most successful currency in the world not associated with a central bank and state. It's the most liquid asset that is not issued by a central bank. At any point you can issue a transaction to anyone else in the world, without the possibility of a third party intervention. I've had issues pulling cash out of banks, or limited sizes available for money orders, or having debt/credit card transactions incorrectly flagged as fraudulent and blocked.

wqaatwt 1y ago
> successful currency Calling it a currency is a huge stretch. It’s an extremely successful token/“asset” but it’s about as much as a currency as gold is these days if not less (based on what most people use it for).
- kragen 1y ago
  Last week I happened to visit a grocery store that accepts Bitcoin payments.
  - MangoToupe 1y ago
    Huh. Were you in El Salvador by any chance?
    - kragen 1y ago
      Argentina. I didn't try it because I don't have Lightning set up.
      - MangoToupe 1y ago
        Argentina also makes sense. Solidarity.
      - Lerc 1y ago
        That's the case where I think it will pick up. If the reason for its lack of use is perception based, then instances where its utility outweighs perception will gain ground. There are numerous places and times around the world that you can look at the situation that occurred and see that Bitcoin would have been a boon had it been established at that time. Future instances will exist like that, and perhaps that's a good enough role for it to exist on it's own. It can be the candle that provides light when the power goes out. The irony of course that it doesn't work if the power goes out, but that's another degree of infrastructure damage entirely. It might even be sufficient to ensure the power doesn't go out during some crisis.
        kragen 1y ago
        Bitcoin in particular can remain operational in extremely degraded conditions. Its relatively long average block interval (10 minutes) and strictly limited maximum block size limit the total bandwidth requirement for a full node to a few kilobits per second, and you can easily run that on a laptop that consumes a few watts, easily supplied from a relatively inconspicuous solar panel or handheld gasoline generator run at a 1% duty cycle. Blockstream supplies a satellite feed of the blockchain that requires no internet connection, just a groundstation that costs less than a laptop and uses slightly more power. Outbound bandwidth requirements from the place where the power has gone out are many orders of magnitude smaller. A Bitcoin transaction is a few hundred bytes, so outbound bandwidth requirements for transmitting one transaction at a time are a few bits per second without adding significant delay, and because the transaction is valid indefinitely in the absence of double-spending, potentially down to a small fraction of a bit per second if further delays of hours or days can be tolerated. Now, it's true that power needs to stay on somewhere for the miners to keep running, and the miners need to be able to transmit their mined blocks to the rest of the network fast enough to avoid many orphaned forks, which requires bursts of somewhat higher bandwidth. But keeping the power on somewhere is much more likely than keeping it on everywhere. I don't understand LN2 well enough to do this kind of analysis on it, but I'd expect it to be less tolerant of such extreme infrastructure degradation.
        wqaatwt 1y ago
        > would have been a boon had it been established at that time. USD and/or EUR depending on the continent would have been used instead in such countries which have failing monetary systems. Problem is that governments in those countries (like Argentina) often impose capital controls making it hard to acquire foreign currency. Bitcoin is almost always only a solution to that specific problem (i.e. government restrictions not currency instability).
- Lerc 1y ago
  I wouldn't call it successful as a currency given its state at the moment either. I would say that much of the reason for that is because of the perception of the currency that is widely held. It's not much good because people think it's not much good. I bought a few things online years ago with Bitcoin and it worked pretty much the way it should, but most of those places that accepted it stopped . Mostly they stopped due to the public perception. I do wonder if it has a chance to become useful once it is old enough to not be considered interesting, and the idea of holding something while it increases in value dies.
  - wqaatwt 1y ago
    Even if places accept bitcoin they almost universally price their goods in $/€/£/.. meaning that bitcoin is only a transfer mechanism. So it’s not really a “currency” in that situation either. I mean if somebody accepts precious metals, jewels etc. as payment in lieu of actual money that doesn’t mean those things suddenly become a currency.
    - hx8 1y ago
      When I said "most successful" I didn't mean it was a complete success, just that this is the best we've done without a state. Currencies are hard, history is full of them failing. Maybe when an asset is liquid enough, it becomes like a currency.
      - wqaatwt 1y ago
        Gold/silver worked reasonably well for thousands of years and unlike bitcoins they functioned as an actual currency. Even if you can pay for stuff with bitcoin it’s not a currency until people actually start setting prices based on it. > liquid enough I’m sure I could find people who would accept Apple’s stock in lieu of actual money, that wouldn’t make it a currency
littlestymaar 1y ago
- It's not a currency. - It can absolutely blocked by third parties (either the exchange you use or the mining cartels can). - in practice its liquidity is tied to the liquidity of the ”stablecoins” (USDT and the likes) and as such it's not “the most liquid” since the liquidity of those stablecoins is higher.
- kragen 1y ago
  I don't use an exchange, and the mining pools (which are not cartels) cannot block a transaction, only delay it until a different pool mines a block, typically ten minutes later. I don't think this sort of intervention by a pool has ever been observed. The stablecoins you mention are arguably more liquid than Bitcoin, but, except for DAI, they're issued by central-bank-like institutions such as Binance and Coinbase. You're right that they're not officially central banks, but that just means you get all the drawbacks of central banks without the advantages.
  - littlestymaar 1y ago
    Without an exchange your bitcoin is not a liquid asset, it's even less liquid than most commodity for which there are digital exchange marketplace. You can sell it over the counter, but that makes it an asset comparable to real estate in terms of liquidity. The fact that the pools haven't intervene until now doesn't change the fact that they can definitely do it, and would if pressured by governments. Economic sanctions using the US dollar weren't a thing until they were. And you only need to have leverage against 50% of the mining power to make that happen, which is pretty straightforward given how centralized the power structure of bitcoin is (although less centralized than for most crypto, for which the developer has full control).
    - kragen 1y ago
      The other day I walked up to a newsstand and asked the newsguy if he wanted to buy US$100 of Bitcoin. He said sure, checked the price, did some calculations on his cellphone, and proposed an amount including a commission for him. I agreed, scanned his QR code on my phone, and posted my transaction to the network. I walked to a nearby shopping mall to pee, and then saw that the transaction was confirmed. I walked back to the newsstand. He handed me a US$100 bill. I didn't sign anything, make any appointments, buy any insurance, walk into any offices, present any identification, or even tell the guy my name. The total time involved was about 20 minutes, but only because I wasn't using Lightning. I had a similarly informal and short, but more argumentative, experience with the previous transaction, at a winery whose owner loudly insisted that he hadn't received the money... until he realized he was checking the wrong phone. You are so full of shit comparing this to a real estate transaction that I am at a loss for words. You're about as full of shit as the winery guy. He, too, was blathering all sorts of nonsense at me about Bitcoin that showed he didn't have the faintest idea what he was talking about. The scenario you're talking about is a 51% attack where big mining pools collude to ensure that nobody else can ever mine a block (because it might allow the laundering of tainted coins). That would be a global and extremely obvious disaster for the Bitcoin network, and it would be remedied by whatever measures were necessary to end the attack, possibly including a hard fork or strategic bombing. Remember that the world's investor class now has 2 trillion dollars tied up in Bitcoin, and they do not want to see it collapse, and such a successful attack would greatly undercut investor confidence in the value of the asset. The Bitcoin crowd has enough pull that they extracted a pardon for Ross Ulbricht and got a friendly SEC head this year. Even before that, when one or another pool would grow to the point where it might be able to mount a 51% attack, it would get hit by DDoS attacks to bring it down. You're comparing that to a bank declining a credit card transaction because you're in another city. Governments have been pressuring Bitcoin miners for over 15 years; it's outright illegal in many countries. The hashrate dropped by more than half when the PRC outlawed Bitcoin mining. The effect on the functioning of the network has been pretty much undetectable.
raggles 1y ago
I don't really follow bitcoin, but last I checked over 75% of block confirmations came from the top 3-5 mining pools. That seems a hell of a lot more centralized than the traditional finance system.
- cyphertruck 1y ago
  The traditional finance system is that a single central bank, owned by a cartel of rich banks- chase, jpm, etc-- issue the currency, charge us to use it and get first dibs on the benefits of monetary inflation -- google "cantillon effect". The now much more diverse mining space is much better than completely centralized in one entity current system. And bitcoin community has a way of working to fix weaknesses wherever they find it... there is active campaigns to diversify mining, as you pointed out those are pools-- and pools are being made obsolete. behind those pools are thousands or tens of thousands of mining operators, of all sizes, as it's viable at industrial as well as individual scale-- many use it to heat their house for less than the alternative, the earnings don't have to cover the full cost to be beneficial to people.
  - Shaanie 1y ago
    FED is owned by private corporations?..
    - aziaziazi 1y ago
      OP mixed the "central bank" as an unique one (it doesn’t exists, although MFI could be representative for the west) and the multiple national ones (FED for the US). They arguments doesn’t hold as the national ones creates money and the are much more numerous and diverse in interest around the world than the ~5 bitcoin pools mentioned ahead. The FED is quite powerful and US strongly influence many other banks but that’s by situation, not by design.
      - dotancohen 1y ago
        Same could be said for the large bitcoin pools. That happened to come about by situation, not by design.
MangoToupe 1y ago
> currency Well given that you basically can't spend bitcoin anywhere, it's definitely not a currency.
- diggan 1y ago
  > Well given that you basically can't spend bitcoin anywhere Grand statement coming from someone who hasn't been everywhere.
- tim333 1y ago
  I did manage to use some to buy an eSIM. Still not a very good currency.
anileated 1y ago
The difference between a currency and store of value is not an exact line, but however vague that line is it is somewhat clear on which side Bitcoin is, and it is not the currency side.
paulryanrogers 1y ago
> At any point you can issue a transaction to anyone else in the world, without the possibility of a third party intervention. With KYC and other regulations ramping up, how true is this in practice? I guess you can get some of that benefit with a wallet only you control. But most folks can barely handle using a custodial wallet. Transactions are also public by default, for better and worse.
mystified5016 1y ago
Almost nobody uses it as a currency. The vast majority of people cannot buy daily goods, food, gas with bitcoin. It is an investment vehicle, not a functional currency. For most people you can't use it as a currency if you tried.
jowea 1y ago
> It's the most liquid asset that is not issued by a central bank. At any point you can issue a transaction to anyone else in the world, without the possibility of a third party intervention. I've had issues pulling cash out of banks, or limited sizes available for money orders, or having debt/credit card transactions incorrectly flagged as fraudulent and blocked. Issuing a transaction may be easy, but I don't think that's meaningful when people get hit with issues similar to "pulling cash out of banks, or limited sizes available for money orders, or having debt/credit card transactions incorrectly flagged as fraudulent and blocked" on the on and off-ramps.

by hx8 1y ago

wqaatwt 1y ago

> successful currency Calling it a currency is a huge stretch. It’s an extremely successful token/“asset” but it’s about as much as a currency as gold is these days if not less (based on what most people use it for).

kragen 1y ago
Last week I happened to visit a grocery store that accepts Bitcoin payments.
- MangoToupe 1y ago
  Huh. Were you in El Salvador by any chance?
  - kragen 1y ago
    Argentina. I didn't try it because I don't have Lightning set up.
    - MangoToupe 1y ago
      Argentina also makes sense. Solidarity.
    - Lerc 1y ago
      That's the case where I think it will pick up. If the reason for its lack of use is perception based, then instances where its utility outweighs perception will gain ground. There are numerous places and times around the world that you can look at the situation that occurred and see that Bitcoin would have been a boon had it been established at that time. Future instances will exist like that, and perhaps that's a good enough role for it to exist on it's own. It can be the candle that provides light when the power goes out. The irony of course that it doesn't work if the power goes out, but that's another degree of infrastructure damage entirely. It might even be sufficient to ensure the power doesn't go out during some crisis.
      - kragen 1y ago
        Bitcoin in particular can remain operational in extremely degraded conditions. Its relatively long average block interval (10 minutes) and strictly limited maximum block size limit the total bandwidth requirement for a full node to a few kilobits per second, and you can easily run that on a laptop that consumes a few watts, easily supplied from a relatively inconspicuous solar panel or handheld gasoline generator run at a 1% duty cycle. Blockstream supplies a satellite feed of the blockchain that requires no internet connection, just a groundstation that costs less than a laptop and uses slightly more power. Outbound bandwidth requirements from the place where the power has gone out are many orders of magnitude smaller. A Bitcoin transaction is a few hundred bytes, so outbound bandwidth requirements for transmitting one transaction at a time are a few bits per second without adding significant delay, and because the transaction is valid indefinitely in the absence of double-spending, potentially down to a small fraction of a bit per second if further delays of hours or days can be tolerated. Now, it's true that power needs to stay on somewhere for the miners to keep running, and the miners need to be able to transmit their mined blocks to the rest of the network fast enough to avoid many orphaned forks, which requires bursts of somewhat higher bandwidth. But keeping the power on somewhere is much more likely than keeping it on everywhere. I don't understand LN2 well enough to do this kind of analysis on it, but I'd expect it to be less tolerant of such extreme infrastructure degradation.
      - wqaatwt 1y ago
        > would have been a boon had it been established at that time. USD and/or EUR depending on the continent would have been used instead in such countries which have failing monetary systems. Problem is that governments in those countries (like Argentina) often impose capital controls making it hard to acquire foreign currency. Bitcoin is almost always only a solution to that specific problem (i.e. government restrictions not currency instability).
Lerc 1y ago
I wouldn't call it successful as a currency given its state at the moment either. I would say that much of the reason for that is because of the perception of the currency that is widely held. It's not much good because people think it's not much good. I bought a few things online years ago with Bitcoin and it worked pretty much the way it should, but most of those places that accepted it stopped . Mostly they stopped due to the public perception. I do wonder if it has a chance to become useful once it is old enough to not be considered interesting, and the idea of holding something while it increases in value dies.
- wqaatwt 1y ago
  Even if places accept bitcoin they almost universally price their goods in $/€/£/.. meaning that bitcoin is only a transfer mechanism. So it’s not really a “currency” in that situation either. I mean if somebody accepts precious metals, jewels etc. as payment in lieu of actual money that doesn’t mean those things suddenly become a currency.
  - hx8 1y ago
    When I said "most successful" I didn't mean it was a complete success, just that this is the best we've done without a state. Currencies are hard, history is full of them failing. Maybe when an asset is liquid enough, it becomes like a currency.
    - wqaatwt 1y ago
      Gold/silver worked reasonably well for thousands of years and unlike bitcoins they functioned as an actual currency. Even if you can pay for stuff with bitcoin it’s not a currency until people actually start setting prices based on it. > liquid enough I’m sure I could find people who would accept Apple’s stock in lieu of actual money, that wouldn’t make it a currency

littlestymaar 1y ago

- It's not a currency. - It can absolutely blocked by third parties (either the exchange you use or the mining cartels can). - in practice its liquidity is tied to the liquidity of the ”stablecoins” (USDT and the likes) and as such it's not “the most liquid” since the liquidity of those stablecoins is higher.

kragen 1y ago
I don't use an exchange, and the mining pools (which are not cartels) cannot block a transaction, only delay it until a different pool mines a block, typically ten minutes later. I don't think this sort of intervention by a pool has ever been observed. The stablecoins you mention are arguably more liquid than Bitcoin, but, except for DAI, they're issued by central-bank-like institutions such as Binance and Coinbase. You're right that they're not officially central banks, but that just means you get all the drawbacks of central banks without the advantages.
- littlestymaar 1y ago
  Without an exchange your bitcoin is not a liquid asset, it's even less liquid than most commodity for which there are digital exchange marketplace. You can sell it over the counter, but that makes it an asset comparable to real estate in terms of liquidity. The fact that the pools haven't intervene until now doesn't change the fact that they can definitely do it, and would if pressured by governments. Economic sanctions using the US dollar weren't a thing until they were. And you only need to have leverage against 50% of the mining power to make that happen, which is pretty straightforward given how centralized the power structure of bitcoin is (although less centralized than for most crypto, for which the developer has full control).
  - kragen 1y ago
    The other day I walked up to a newsstand and asked the newsguy if he wanted to buy US$100 of Bitcoin. He said sure, checked the price, did some calculations on his cellphone, and proposed an amount including a commission for him. I agreed, scanned his QR code on my phone, and posted my transaction to the network. I walked to a nearby shopping mall to pee, and then saw that the transaction was confirmed. I walked back to the newsstand. He handed me a US$100 bill. I didn't sign anything, make any appointments, buy any insurance, walk into any offices, present any identification, or even tell the guy my name. The total time involved was about 20 minutes, but only because I wasn't using Lightning. I had a similarly informal and short, but more argumentative, experience with the previous transaction, at a winery whose owner loudly insisted that he hadn't received the money... until he realized he was checking the wrong phone. You are so full of shit comparing this to a real estate transaction that I am at a loss for words. You're about as full of shit as the winery guy. He, too, was blathering all sorts of nonsense at me about Bitcoin that showed he didn't have the faintest idea what he was talking about. The scenario you're talking about is a 51% attack where big mining pools collude to ensure that nobody else can ever mine a block (because it might allow the laundering of tainted coins). That would be a global and extremely obvious disaster for the Bitcoin network, and it would be remedied by whatever measures were necessary to end the attack, possibly including a hard fork or strategic bombing. Remember that the world's investor class now has 2 trillion dollars tied up in Bitcoin, and they do not want to see it collapse, and such a successful attack would greatly undercut investor confidence in the value of the asset. The Bitcoin crowd has enough pull that they extracted a pardon for Ross Ulbricht and got a friendly SEC head this year. Even before that, when one or another pool would grow to the point where it might be able to mount a 51% attack, it would get hit by DDoS attacks to bring it down. You're comparing that to a bank declining a credit card transaction because you're in another city. Governments have been pressuring Bitcoin miners for over 15 years; it's outright illegal in many countries. The hashrate dropped by more than half when the PRC outlawed Bitcoin mining. The effect on the functioning of the network has been pretty much undetectable.

raggles 1y ago

I don't really follow bitcoin, but last I checked over 75% of block confirmations came from the top 3-5 mining pools. That seems a hell of a lot more centralized than the traditional finance system.

cyphertruck 1y ago
The traditional finance system is that a single central bank, owned by a cartel of rich banks- chase, jpm, etc-- issue the currency, charge us to use it and get first dibs on the benefits of monetary inflation -- google "cantillon effect". The now much more diverse mining space is much better than completely centralized in one entity current system. And bitcoin community has a way of working to fix weaknesses wherever they find it... there is active campaigns to diversify mining, as you pointed out those are pools-- and pools are being made obsolete. behind those pools are thousands or tens of thousands of mining operators, of all sizes, as it's viable at industrial as well as individual scale-- many use it to heat their house for less than the alternative, the earnings don't have to cover the full cost to be beneficial to people.
- Shaanie 1y ago
  FED is owned by private corporations?..
  - aziaziazi 1y ago
    OP mixed the "central bank" as an unique one (it doesn’t exists, although MFI could be representative for the west) and the multiple national ones (FED for the US). They arguments doesn’t hold as the national ones creates money and the are much more numerous and diverse in interest around the world than the ~5 bitcoin pools mentioned ahead. The FED is quite powerful and US strongly influence many other banks but that’s by situation, not by design.
    - dotancohen 1y ago
      Same could be said for the large bitcoin pools. That happened to come about by situation, not by design.

MangoToupe 1y ago

> currency Well given that you basically can't spend bitcoin anywhere, it's definitely not a currency.

diggan 1y ago
> Well given that you basically can't spend bitcoin anywhere Grand statement coming from someone who hasn't been everywhere.
tim333 1y ago
I did manage to use some to buy an eSIM. Still not a very good currency.

anileated 1y ago

The difference between a currency and store of value is not an exact line, but however vague that line is it is somewhat clear on which side Bitcoin is, and it is not the currency side.

paulryanrogers 1y ago

> At any point you can issue a transaction to anyone else in the world, without the possibility of a third party intervention. With KYC and other regulations ramping up, how true is this in practice? I guess you can get some of that benefit with a wallet only you control. But most folks can barely handle using a custodial wallet. Transactions are also public by default, for better and worse.

mystified5016 1y ago

Almost nobody uses it as a currency. The vast majority of people cannot buy daily goods, food, gas with bitcoin. It is an investment vehicle, not a functional currency. For most people you can't use it as a currency if you tried.

jowea 1y ago

> It's the most liquid asset that is not issued by a central bank. At any point you can issue a transaction to anyone else in the world, without the possibility of a third party intervention. I've had issues pulling cash out of banks, or limited sizes available for money orders, or having debt/credit card transactions incorrectly flagged as fraudulent and blocked. Issuing a transaction may be easy, but I don't think that's meaningful when people get hit with issues similar to "pulling cash out of banks, or limited sizes available for money orders, or having debt/credit card transactions incorrectly flagged as fraudulent and blocked" on the on and off-ramps.