7 ms·

Bitcoin and Thoughts from Bill Gates

37 points by treblig 13y ago

harrystone 13y ago
I had more optimism for Bitcoin before I saw people so aggressively evangelize it. I think it has great potential as a digital currency but some people are making into what's almost a totem.
- deleted 13y ago
  [deleted]
- officialjunk 13y ago
  i am not familiar with the phrase "totem." care to elaborate?
  - ssdfsdf 13y ago
    I think he means a symbol of worship. Something that is worshiped because of the desire to worship something, not because of any deep understanding of it's intrinsic worth...
  - fennecfoxen 13y ago
    "A totem is a being, object, or symbol representing an animal or plant that serves as an emblem of a group of people, such as a family, clan, group, lineage, or tribe, reminding them of their ancestry." -- Wikipedia. They may have spiritual/shamanastic uses in certain contexts. In this context, Bitcoin has been purported to be an emblem of freedom, liberty, anarchy, libertarianism, decentralization, etc.
  - harrystone 13y ago
    By totem I mean a symbol of belonging to a group. It seems to me that a lot of the Bitcoin community shares a vaguely similar idea of what the future of money should be and the way to achieve that is via technology, not politics. I think that's very naive, or maybe it's nothing more than just a reaction to what seems like an impossible task. Either way, I see a lot of emotion wrapped up in what's supposed to be just a digital currency. It seems like a political movement that wants nothing to do with politics.
  - Xdes 13y ago
    I think 'icon' fits better.
    - harrystone 13y ago
      I think you're right, icon is a better choice.
      - oscargrouch 13y ago
        Particularly, I think Totem is a better choice.. you are backed by giants like Freud: http://en.wikipedia.org/wiki/Totem_and_Taboo http://en.wikipedia.org/wiki/Totem_and_Taboo
- dcc1 13y ago
  Well it is an innovative technology/platform that ranks up there with HTTP, html, tcp/ip, usenet, bittorent Nothing as interesting has come out since 90s, all we had since are "social networks" and "flappy bird" sigh
  - gnaritas 13y ago
    Yup, unfortunately libertarians and anarcho-capitalists have jumped on it like it's the solution to all bad government and a way to avoid taxation and have become religious about it. They're wrong, and completely nuts, but this isn't Bitcoin's fault.
    - dcc1 13y ago
      They are wrong, the blockchain is public, it is very likely that a bitcoin like technology be used by state actors in future to create tightly controlled currencies! Imagine a state being able to charge sales tax at the point of each transaction! Or more disturbingly know exactly who buys what for how much and when if tied together with government issued ids and wallets. Or instantly calculate taxes due on income. Its actually quite scary :( In fact bitcoin technology or derivative could be used unfortunately to take even more control from people and economies! Its probably a good thing that in most countries politicians would balk at this since they wont be able to get brown envelopes if everyone in the state uses coins
      - ewoodrich 13y ago
        > instantly calculate taxes due on income Uh, sign me up? The political complications of tax reform aside, return free filing would save millions of hours required for tax preparation, and it is estimated that between 8 and 60 million taxpayers would not need to file a return at all. And for the rest it would streamlined. Of course, the IRS already knows 90% of your income information, without Bitcoin, because of 1099s, W-2s, etc.
        dcc1 13y ago
        Which is how state controlled bitcoin like currencies will be pushed onto people, claiming it would save time/money etc, be more safe and secure etc. Tho' I highly doubt bureaucrats in IRS or similar would rollover so quickly and put themselves out of a job! Giving the state (or 3rd parties) even more control over currency and every day use that could be gained by a state run bitcoin like currency is very scary proposition IMHO giving them even more power.
- nhaehnle 13y ago
  Evangelizing was basically the only path for Bitcoin-the-currency to become valuable, so that's a bit of an odd complaint ;-)
hft_throwaway 13y ago
I think this is a lousy defense of Bitcoin. I cringe whenever I read "oh it's new technology of course people will be scared!" or worse yet, "you must be jealous because you didn't get in on the ground floor." I think it's a really cool technology but the economics don't make a lot of sense. There are a few major issues I see: -What problem does it solve? Many claim that it's a more efficient way to transfer money, but after paying high spreads & fees on illiquid exchanges or a place like coinbase, it doesn't look so good. International wires are expensive but paying 30 bps each way in exchange fees plus enormous spread concessions to trade even relatively small amounts like $1mm USD are much more expensive. -What backs it other than speculation? Scarcity itself does not imply value. I don't see a significant "bitcoin economy" out there. Yes, you can buy things with them, but most of these things are priced in dollars. Sellers are accepting bitcoins only because they can sell them for USD, EUR, etc. to speculators. They have no particular attachment to bitcoins themselves and could just as easily accept another crypto currency provided speculators were active enough in the market. How many people are paid a salary or renting an apartment for a fixed amount of BTC per month? -Many bad actors in the market with little regulation. There have been numerous scams and untrustworthy exchanges out there. It's like taking a trip back to the depression-era bucket shops. -Consumer unfriendly: the average "man on the street" can't secure his wallet file and even many technically sharp people have been ripped off. Non-reversible transactions aren't a positive for most users and requiring traders to use an escrow service further increases costs. Network can't handle high transaction volumes and sellers need to wait for confirmations or risk fraud, so the use case of everyone buying their morning coffee with bitcoin seems shaky. -Extreme volatility and lack of liquidity make it a poor store of value or unit of record, two things that are extremely important in a currency. Yes most government issued currencies experience inflation, but I can keep my paycheck in the bank for months or years without its value changing wildly, and I know what a loaf of bread costs in USD within a tight range. Some of these are fixable and I see some growth potential in micropayments or as a money transfer mechanism for people who don't have access to traditional financial institutions, but what is the general purpose use case? What can I do with bitcoin that I can't with paypal or even a bank account (many let you instantly transfer money these days for no/low fees to pay friends, landlords, etc.)?
- ewoodrich 13y ago
debacle 13y ago
The problem with bitcoin is that no one is using it for its intended purpose - to buy things. People are using it as an investment or are speculating on it, which is not the purpose of a currency. What you end up with is the anemic system that exists right now, where no one is advancing the actual bitcoin cause, everyone is just setting up exchanges to make money from transactions.
lingben 13y ago
Benjamin, you're conflating bitcoin the protocol with bitcoin the 'currency'. This is an all too common mistake, so please don't feel too too bad about it. Bitcoin protocol does have some interesting things to offer us and I'm sure it will be built upon in novel ways. Bitcoin 'currency' on the other hand is a non-starter and as time goes on we will see it discarded. I hope more people would concentrate on the protocol but about 99% of what you hear and the energy of people is set on bitcoin 'currency'.
- damontal 13y ago
  why is it a nonstarter as a currency? is it because it can't scale if widely adopted? or because it's difficult to keep secure? any other reasons?
- VMG 13y ago
  You can't use the Bitcoin protocol in any meaningful way without using the Bitcoin currency. Alternative crypto-currencies are less secure because they have less dedicated mining power and less developer support.
- hendzen 13y ago
  The protocol and the currency are actually inseparable: http://timothyblee.com/2014/03/01/heres-why-bitcoin-the-network-needs-bitcoin-the-currency/ http://timothyblee.com/2014/03/01/heres-why-bitcoin-the-netw...
davesque 13y ago
Very misleading. Contains no actual statements made by Bill Gates about Bitcoin. It certainly tries to grab your attention by suggesting otherwise.
clienthunter 13y ago
The absurdity of this kind of thought is just profound. Thinking like this may be useful as a means of encouraging hope when all hope is lost, but Bitcoin is nowhere near there yet. Most of all this kind of talk smacks of deep desperation - "why won't people love me?" I understand fully why one might feel so desperate. Bitcoin may have the potential to be truly revolutionary. Bitcoin solves the problem of orchestrating an international currency in a manner that limits the implementation details to the design, not banking/payment industry/political types who historically - for one reason or another - end up building in significant rigidities to the system. It doesn't take a PhD in Economics to see the potential benefits of eradicating PayPal and consumer banks (although it may take one to see the potential pitfalls). More than this though, Bitcoin opens the door to truly free capital flow. It is possible to work in the Western world for a month or two and move, say, far East, and live like a king on the savings for a year or more. Why can't we just buy the stuff over there cheaply and consume it at home? One major reason is the rigidities in capital flow - it is hard, risky business in the current system. As a large company in a Bitcoin world you don't have to worry about a great class of risks of international trade, dumping money into the Cambodian economy is no longer a question of FX risk and "can I get it back out?" This is a great step forward on the way to homogenising international capital stores i.e. ceteris paribus, rich people buy where things are cheapest, like in Cambodia, thereby flowing capital to, and driving up prices in, Cambodia. Cambodians get richer and the West gets poorer. Bitcoin has the vague potential to be the great equalizer. We have seen some evidence of this at work in the EU with the Euro, if you look past the troubling dynamics of transition. Imagine how very different the US would be if every state had a different currency and payment processing rules, the diversity in income would be profound. An educated economist will see a great many problems with this utopian vision, but will likely agree the aim is noble and that the basis - Bitcoin - is the closest thing we have so far to a workable solution. Bitcoin may be as revolutionary as the fanboys want it to be, even if they don't understand why. My personal thought is that Bitcoin will soon be seen as the thing that started it all, but the solution won't be Bitcoin itself. There are too many problems - no matter how many times you read that a fixed supply currency is the greatest thing since sliced bread, it really isn't. It's also woefully easy to steal and the mining/verification mechanism is far too resource intensive and encouraging of looney speculation making its value at any point in time completely impossible to reason about. If you love BTC today, don't spout bullshit strings of meaningless words in some grandiose display of being ahead of the times. Make it stronger and better because if you don't history will judge this whole thing very severely in 10 years time, when it really is just a way of buying drugs and hitmen.

37 points by treblig 13y ago

I had more optimism for Bitcoin before I saw people so aggressively evangelize it. I think it has great potential as a digital currency but some people are making into what's almost a totem.

deleted 13y ago
[deleted]
officialjunk 13y ago
i am not familiar with the phrase "totem." care to elaborate?
- ssdfsdf 13y ago
  I think he means a symbol of worship. Something that is worshiped because of the desire to worship something, not because of any deep understanding of it's intrinsic worth...
- fennecfoxen 13y ago
  "A totem is a being, object, or symbol representing an animal or plant that serves as an emblem of a group of people, such as a family, clan, group, lineage, or tribe, reminding them of their ancestry." -- Wikipedia. They may have spiritual/shamanastic uses in certain contexts. In this context, Bitcoin has been purported to be an emblem of freedom, liberty, anarchy, libertarianism, decentralization, etc.
- harrystone 13y ago
  By totem I mean a symbol of belonging to a group. It seems to me that a lot of the Bitcoin community shares a vaguely similar idea of what the future of money should be and the way to achieve that is via technology, not politics. I think that's very naive, or maybe it's nothing more than just a reaction to what seems like an impossible task. Either way, I see a lot of emotion wrapped up in what's supposed to be just a digital currency. It seems like a political movement that wants nothing to do with politics.
- Xdes 13y ago
  I think 'icon' fits better.
  - harrystone 13y ago
    I think you're right, icon is a better choice.
    - oscargrouch 13y ago
      Particularly, I think Totem is a better choice.. you are backed by giants like Freud: http://en.wikipedia.org/wiki/Totem_and_Taboo http://en.wikipedia.org/wiki/Totem_and_Taboo
dcc1 13y ago
Well it is an innovative technology/platform that ranks up there with HTTP, html, tcp/ip, usenet, bittorent Nothing as interesting has come out since 90s, all we had since are "social networks" and "flappy bird" sigh
- gnaritas 13y ago
  Yup, unfortunately libertarians and anarcho-capitalists have jumped on it like it's the solution to all bad government and a way to avoid taxation and have become religious about it. They're wrong, and completely nuts, but this isn't Bitcoin's fault.
  - dcc1 13y ago
    They are wrong, the blockchain is public, it is very likely that a bitcoin like technology be used by state actors in future to create tightly controlled currencies! Imagine a state being able to charge sales tax at the point of each transaction! Or more disturbingly know exactly who buys what for how much and when if tied together with government issued ids and wallets. Or instantly calculate taxes due on income. Its actually quite scary :( In fact bitcoin technology or derivative could be used unfortunately to take even more control from people and economies! Its probably a good thing that in most countries politicians would balk at this since they wont be able to get brown envelopes if everyone in the state uses coins
    - ewoodrich 13y ago
      > instantly calculate taxes due on income Uh, sign me up? The political complications of tax reform aside, return free filing would save millions of hours required for tax preparation, and it is estimated that between 8 and 60 million taxpayers would not need to file a return at all. And for the rest it would streamlined. Of course, the IRS already knows 90% of your income information, without Bitcoin, because of 1099s, W-2s, etc.
      - dcc1 13y ago
        Which is how state controlled bitcoin like currencies will be pushed onto people, claiming it would save time/money etc, be more safe and secure etc. Tho' I highly doubt bureaucrats in IRS or similar would rollover so quickly and put themselves out of a job! Giving the state (or 3rd parties) even more control over currency and every day use that could be gained by a state run bitcoin like currency is very scary proposition IMHO giving them even more power.
nhaehnle 13y ago
Evangelizing was basically the only path for Bitcoin-the-currency to become valuable, so that's a bit of an odd complaint ;-)

hft_throwaway 13y ago

I think this is a lousy defense of Bitcoin. I cringe whenever I read "oh it's new technology of course people will be scared!" or worse yet, "you must be jealous because you didn't get in on the ground floor." I think it's a really cool technology but the economics don't make a lot of sense. There are a few major issues I see: -What problem does it solve? Many claim that it's a more efficient way to transfer money, but after paying high spreads & fees on illiquid exchanges or a place like coinbase, it doesn't look so good. International wires are expensive but paying 30 bps each way in exchange fees plus enormous spread concessions to trade even relatively small amounts like $1mm USD are much more expensive. -What backs it other than speculation? Scarcity itself does not imply value. I don't see a significant "bitcoin economy" out there. Yes, you can buy things with them, but most of these things are priced in dollars. Sellers are accepting bitcoins only because they can sell them for USD, EUR, etc. to speculators. They have no particular attachment to bitcoins themselves and could just as easily accept another crypto currency provided speculators were active enough in the market. How many people are paid a salary or renting an apartment for a fixed amount of BTC per month? -Many bad actors in the market with little regulation. There have been numerous scams and untrustworthy exchanges out there. It's like taking a trip back to the depression-era bucket shops. -Consumer unfriendly: the average "man on the street" can't secure his wallet file and even many technically sharp people have been ripped off. Non-reversible transactions aren't a positive for most users and requiring traders to use an escrow service further increases costs. Network can't handle high transaction volumes and sellers need to wait for confirmations or risk fraud, so the use case of everyone buying their morning coffee with bitcoin seems shaky. -Extreme volatility and lack of liquidity make it a poor store of value or unit of record, two things that are extremely important in a currency. Yes most government issued currencies experience inflation, but I can keep my paycheck in the bank for months or years without its value changing wildly, and I know what a loaf of bread costs in USD within a tight range. Some of these are fixable and I see some growth potential in micropayments or as a money transfer mechanism for people who don't have access to traditional financial institutions, but what is the general purpose use case? What can I do with bitcoin that I can't with paypal or even a bank account (many let you instantly transfer money these days for no/low fees to pay friends, landlords, etc.)?

ewoodrich 13y ago

debacle 13y ago

The problem with bitcoin is that no one is using it for its intended purpose - to buy things. People are using it as an investment or are speculating on it, which is not the purpose of a currency. What you end up with is the anemic system that exists right now, where no one is advancing the actual bitcoin cause, everyone is just setting up exchanges to make money from transactions.

lingben 13y ago

Benjamin, you're conflating bitcoin the protocol with bitcoin the 'currency'. This is an all too common mistake, so please don't feel too too bad about it. Bitcoin protocol does have some interesting things to offer us and I'm sure it will be built upon in novel ways. Bitcoin 'currency' on the other hand is a non-starter and as time goes on we will see it discarded. I hope more people would concentrate on the protocol but about 99% of what you hear and the energy of people is set on bitcoin 'currency'.

damontal 13y ago
why is it a nonstarter as a currency? is it because it can't scale if widely adopted? or because it's difficult to keep secure? any other reasons?
VMG 13y ago
You can't use the Bitcoin protocol in any meaningful way without using the Bitcoin currency. Alternative crypto-currencies are less secure because they have less dedicated mining power and less developer support.
hendzen 13y ago
The protocol and the currency are actually inseparable: http://timothyblee.com/2014/03/01/heres-why-bitcoin-the-network-needs-bitcoin-the-currency/ http://timothyblee.com/2014/03/01/heres-why-bitcoin-the-netw...

davesque 13y ago

Very misleading. Contains no actual statements made by Bill Gates about Bitcoin. It certainly tries to grab your attention by suggesting otherwise.

clienthunter 13y ago

The absurdity of this kind of thought is just profound. Thinking like this may be useful as a means of encouraging hope when all hope is lost, but Bitcoin is nowhere near there yet. Most of all this kind of talk smacks of deep desperation - "why won't people love me?" I understand fully why one might feel so desperate. Bitcoin may have the potential to be truly revolutionary. Bitcoin solves the problem of orchestrating an international currency in a manner that limits the implementation details to the design, not banking/payment industry/political types who historically - for one reason or another - end up building in significant rigidities to the system. It doesn't take a PhD in Economics to see the potential benefits of eradicating PayPal and consumer banks (although it may take one to see the potential pitfalls). More than this though, Bitcoin opens the door to truly free capital flow. It is possible to work in the Western world for a month or two and move, say, far East, and live like a king on the savings for a year or more. Why can't we just buy the stuff over there cheaply and consume it at home? One major reason is the rigidities in capital flow - it is hard, risky business in the current system. As a large company in a Bitcoin world you don't have to worry about a great class of risks of international trade, dumping money into the Cambodian economy is no longer a question of FX risk and "can I get it back out?" This is a great step forward on the way to homogenising international capital stores i.e. ceteris paribus, rich people buy where things are cheapest, like in Cambodia, thereby flowing capital to, and driving up prices in, Cambodia. Cambodians get richer and the West gets poorer. Bitcoin has the vague potential to be the great equalizer. We have seen some evidence of this at work in the EU with the Euro, if you look past the troubling dynamics of transition. Imagine how very different the US would be if every state had a different currency and payment processing rules, the diversity in income would be profound. An educated economist will see a great many problems with this utopian vision, but will likely agree the aim is noble and that the basis - Bitcoin - is the closest thing we have so far to a workable solution. Bitcoin may be as revolutionary as the fanboys want it to be, even if they don't understand why. My personal thought is that Bitcoin will soon be seen as the thing that started it all, but the solution won't be Bitcoin itself. There are too many problems - no matter how many times you read that a fixed supply currency is the greatest thing since sliced bread, it really isn't. It's also woefully easy to steal and the mining/verification mechanism is far too resource intensive and encouraging of looney speculation making its value at any point in time completely impossible to reason about. If you love BTC today, don't spout bullshit strings of meaningless words in some grandiose display of being ahead of the times. Make it stronger and better because if you don't history will judge this whole thing very severely in 10 years time, when it really is just a way of buying drugs and hitmen.