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The fact that bitcoin is so divisible might be its true weakness in terms of adoption (given huge value of a single Bitcoin). Imagine prices in shop given as 0

by piokoch 13y ago

The fact that bitcoin is so divisible might be its true weakness in terms of adoption (given huge value of a single Bitcoin). Imagine prices in shop given as 0.000132 BTC, 0.000123 BTC, 0.0000132 BTC or even worst 0.0009999, 0.000999, 0.009999 - looks similar and it is easy to be mislead and pay for something much more then expected. People would need to get use to count zeros after decimal point. This hardly matters with any real currency.

grey-area 13y ago
That's really not a big deal. If it was truly popular and highly priced relative to everyday purchases, we'd just invent names for fractions thereof, and use those for pricing, as we do in reverse for currencies like dollars or pounds. They already have satoshis etc. Far more important limitations: Built in deflation - that it is seen as a one-way bet with ever-increasing value and an ever more limited supply would cause problems if used as a currency (though not obviously as a store of value). The problem for it as a store of value is that the value is entirely predicated on it being a successful currency. Volatility - if prices change rapidly, that would make use in retail almost impossible, and as a store of value dangerous. Many of the places which say they take Bitcoin right now simply move the money immediately to another currency to avoid this issue - that's not going to work if it is actually used as a currency and to store value long-term. Imagine it replacing the USD for example and remaining volatile... Time to process transactions - takings minutes to verify a transaction is not going to work -it'd need to be on the order of seconds, and for a digital currency it really should be as fast as the network. Lack of regulation - again retailers/consumers should be nervous if their financial institutions have no regulations or guarantees that the money they say they hold actually exists at all. Some exchanges have reported a massive theft and walked away with no liability, others impose arbitrary limits on withdrawals etc - this really is wild-west finance and in a crash or bubble you can expect extreme fraud to go on undetected because there are no independent auditors, regulations or laws which govern these activities. Lack of ties to identity - without verified accounts it's far too easy to commit fraud or theft - very like paper money which everyone is moving away from. Lack of reversibility - it doesn't let you roll back transactions, though one could work around this by keeping a ledger and rolling the ledger positions back by transferring coins back and forth. If you're going to do that though and trust the bank/exchange to regulate transactions, why bother with the cryptocurrency bit at all? Lack of transparency in the management process - who decides on the rules of the game here? If the official clients suddenly change rules in concert - existing bitcoin holders would have to just go along with this if the majority voted with it - when large amounts of money are involved, this sort of thing becomes very important. e.g. we hit the existing 21m limit, and those controlling the software decide to up the limit to 30m - suddenly lots of assumptions about value would be questioned. I'd be very nervous about the lack of regulated control. Lack of backing by a government, corporation or trading bloc - when the market attacks government currencies, governments are able to expend extreme resources to mitigate outright panic and collapse. When the market sharks get interested in Bitcoin and attack it in the same way as they attack say the Euro, there will be no such backup, just a freely floating rate which is open to manipulation and depends entirely on public confidence. I do think it has some interesting properties and is a useful experiment, but have extreme reservations about this being the actual digital currency which makes it into use as a global exchange mechanism.
- Jd 13y ago
  What additional properties do you think are necessary to have a "digital currency which makes it into use as a global exchange mechanism." ? (full disclosure: I work on such a project)
  - grey-area 13y ago
    Personally I think it requires identity verification and secure reversible transactions, and probably some central point of control rather than a distributed network (so that confirmation can be almost instant). That's what I get with current fiat currencies and I wouldn't want to give it up. I also find the deflation built into Bitcoin worrying, esp. accompanied by the unquestioning cheerleading from many proponents of it. I had a look at your website, and it looked really interesting - http://evr.gr/ http://evr.gr/.
    - dllthomas 13y ago
      "Personally I think it requires identity verification and secure reversible transactions" Aren't those two just a layer on top of bitcoin?
      - grey-area 13y ago
        If they are built separately, as I said in the OP, there isn't much point in the cryptographic nature of bitcoin. If you require people to trust those holding the ledgers of transactions you could just use any unit of account, as we do with national currencies.
        dllthomas 13y ago
        Bitcoin would permit bridging of trust networks.
    - Jd 13y ago
      That's basically what passed through my mind a year ago when I started working on my own project. It seems crossing the channel from "good idea" to secure, trusted payment mechanism is more difficult than I thought, but I'm still convinced it's the right way forward. Feel free to email me for more details if interested.
abollaert 13y ago
I'd gather you won't be counting in BTC directly then. 0.000132 is 132 microbits (or yu-bits). Bitcoins are divisable up to satoshi's, which is 10^-8. https://bitcointalk.org/index.php?topic=14438.msg195287#msg195287 https://bitcointalk.org/index.php?topic=14438.msg195287#msg1...
conanite 13y ago
You don't have to represent BTC amounts as fractions of a whole. 0.000132 BTC is 132 µBTC, 0.0000132 BTC is 13.2 µBTC, or 1320 satoshi. It's likely we'll be seeing more talk of milli-BTC and micro-BTC, and hey why not nano-BTC while we're at it ...
terhechte 13y ago
Well, there're actually names for that: 1 mBTC = 0.001 BTC 1 mBTC = 100,000 Satoshis 1 uBTC = 0.000001 BTC 1 μBTC = 100 Satoshis 1 Satoshi = 0.00000001 BTC 100 Satoshis = 0.000001 BTC 1,000 Satoshis = 0.00001 BTC 10,000 Satoshis = 0.0001 BTC 1 BTC = 100,000,000 Satoshis 1 BTC = 100,000 μBTC 1 BTC = 1000 mBTC So 0.000132 BTC would be labelled in a shop as 0.132 mBTC

by piokoch 13y ago

grey-area 13y ago

That's really not a big deal. If it was truly popular and highly priced relative to everyday purchases, we'd just invent names for fractions thereof, and use those for pricing, as we do in reverse for currencies like dollars or pounds. They already have satoshis etc. Far more important limitations: Built in deflation - that it is seen as a one-way bet with ever-increasing value and an ever more limited supply would cause problems if used as a currency (though not obviously as a store of value). The problem for it as a store of value is that the value is entirely predicated on it being a successful currency. Volatility - if prices change rapidly, that would make use in retail almost impossible, and as a store of value dangerous. Many of the places which say they take Bitcoin right now simply move the money immediately to another currency to avoid this issue - that's not going to work if it is actually used as a currency and to store value long-term. Imagine it replacing the USD for example and remaining volatile... Time to process transactions - takings minutes to verify a transaction is not going to work -it'd need to be on the order of seconds, and for a digital currency it really should be as fast as the network. Lack of regulation - again retailers/consumers should be nervous if their financial institutions have no regulations or guarantees that the money they say they hold actually exists at all. Some exchanges have reported a massive theft and walked away with no liability, others impose arbitrary limits on withdrawals etc - this really is wild-west finance and in a crash or bubble you can expect extreme fraud to go on undetected because there are no independent auditors, regulations or laws which govern these activities. Lack of ties to identity - without verified accounts it's far too easy to commit fraud or theft - very like paper money which everyone is moving away from. Lack of reversibility - it doesn't let you roll back transactions, though one could work around this by keeping a ledger and rolling the ledger positions back by transferring coins back and forth. If you're going to do that though and trust the bank/exchange to regulate transactions, why bother with the cryptocurrency bit at all? Lack of transparency in the management process - who decides on the rules of the game here? If the official clients suddenly change rules in concert - existing bitcoin holders would have to just go along with this if the majority voted with it - when large amounts of money are involved, this sort of thing becomes very important. e.g. we hit the existing 21m limit, and those controlling the software decide to up the limit to 30m - suddenly lots of assumptions about value would be questioned. I'd be very nervous about the lack of regulated control. Lack of backing by a government, corporation or trading bloc - when the market attacks government currencies, governments are able to expend extreme resources to mitigate outright panic and collapse. When the market sharks get interested in Bitcoin and attack it in the same way as they attack say the Euro, there will be no such backup, just a freely floating rate which is open to manipulation and depends entirely on public confidence. I do think it has some interesting properties and is a useful experiment, but have extreme reservations about this being the actual digital currency which makes it into use as a global exchange mechanism.

Jd 13y ago
What additional properties do you think are necessary to have a "digital currency which makes it into use as a global exchange mechanism." ? (full disclosure: I work on such a project)
- grey-area 13y ago
  Personally I think it requires identity verification and secure reversible transactions, and probably some central point of control rather than a distributed network (so that confirmation can be almost instant). That's what I get with current fiat currencies and I wouldn't want to give it up. I also find the deflation built into Bitcoin worrying, esp. accompanied by the unquestioning cheerleading from many proponents of it. I had a look at your website, and it looked really interesting - http://evr.gr/ http://evr.gr/.
  - dllthomas 13y ago
    "Personally I think it requires identity verification and secure reversible transactions" Aren't those two just a layer on top of bitcoin?
    - grey-area 13y ago
      If they are built separately, as I said in the OP, there isn't much point in the cryptographic nature of bitcoin. If you require people to trust those holding the ledgers of transactions you could just use any unit of account, as we do with national currencies.
      - dllthomas 13y ago
        Bitcoin would permit bridging of trust networks.
  - Jd 13y ago
    That's basically what passed through my mind a year ago when I started working on my own project. It seems crossing the channel from "good idea" to secure, trusted payment mechanism is more difficult than I thought, but I'm still convinced it's the right way forward. Feel free to email me for more details if interested.

abollaert 13y ago

I'd gather you won't be counting in BTC directly then. 0.000132 is 132 microbits (or yu-bits). Bitcoins are divisable up to satoshi's, which is 10^-8. https://bitcointalk.org/index.php?topic=14438.msg195287#msg195287 https://bitcointalk.org/index.php?topic=14438.msg195287#msg1...

conanite 13y ago

You don't have to represent BTC amounts as fractions of a whole. 0.000132 BTC is 132 µBTC, 0.0000132 BTC is 13.2 µBTC, or 1320 satoshi. It's likely we'll be seeing more talk of milli-BTC and micro-BTC, and hey why not nano-BTC while we're at it ...

terhechte 13y ago

Well, there're actually names for that: 1 mBTC = 0.001 BTC 1 mBTC = 100,000 Satoshis 1 uBTC = 0.000001 BTC 1 μBTC = 100 Satoshis 1 Satoshi = 0.00000001 BTC 100 Satoshis = 0.000001 BTC 1,000 Satoshis = 0.00001 BTC 10,000 Satoshis = 0.0001 BTC 1 BTC = 100,000,000 Satoshis 1 BTC = 100,000 μBTC 1 BTC = 1000 mBTC So 0.000132 BTC would be labelled in a shop as 0.132 mBTC