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Ah, the weekly Bitcoin hype thread. That there is still future for BTC other than a specific niche. The make believe story. In case there are still people not f

Ah, the weekly Bitcoin hype thread. That there is still future for BTC other than a specific niche. The make believe story. In case there are still people not fooled yet. Don't get me wrong, I like BTC. But this speculation driven value investment is not the right way.

ThomPete 12y ago
Replace bitcoin in what you just said with internet, VOIP, airplanes, ipod and you got a pretty solid template for historic underestimations of technology in the long run.
- bdcravens 12y ago
  Bitcoin is a duality, something with utility while being traded. All of your examples provided a utility which drove revenue; Bitcoin tends to be reversed.
- danbruc 12y ago
  All the things you mention have value. But what is the value of using Bitcoins for the average person? Where are Bitcoins so obviously better than a credit card that switching is a good decision?
  - nickthemagicman 12y ago
    I was trying to think of a good answer but you're right. The key advantages are decentralization and anonymity and to the average person who just wants a simple secure payment solution a credit card has all the advantages.
    - daveytea 12y ago
      Bitcoin is not anonymous and not meant to be. It never will be and shouldn't be to gain widespread adoption. For the average person, I can list a few reasons: - near immediate transfer of money across international borders - close to zero fees or greatly reduced fees when transferring money internationally - safe and secure store of value (for the unbanked) Then there are the future killer apps that will be created - tipping on the internet (changeTip / Coinbase) - programatic money - smart contracts - pure play digital banking - ?? It's hard to see how bitcoin could apply to the general public sitting at your computer in a first world country. But keep in mind there are nearly 5 billion unbanked or unserved people in the world where bitcoin (or similar) will change their life.
      - danbruc 12y ago
        Fast transfer, agreed. Cost per transaction is currently between 10 and 20 dollars and has been close to 100 dollars. I don't know what a wire transfer costs but I don't think the advantage is huge if you are only transferring a couple hundred or a few thousand dollars. Safe and secure store - taking malware, hacked exchanges, price fluctuations and the like into account, I am not sure it looks really bright. Future killer apps - let's talk again, when they are real. And tipping, for example, does not look like it could work - transactions are way to expensive to be used to tip a dollar. And when it comes to unbanked people I am not sure that it would be better or easier for them to adopt Bitcoin instead of a traditional banking system.
  - ghshephard 12y ago
    Bitcoin is awesome for anybody who needs to send money to family back home. And there are a lot of people who do that - and it's very expensive.
    - pbreit 12y ago
      They are good for a range of things including cross-border and micro txns.
    - idiotclock 12y ago
      I think this is a great observation. Middle men make big money off of migrant workers.
  - natrius 12y ago
    Bitcoin transactions are cheaper than credit card transactions. Using the card networks exposes merchants to chargeback fraud, but since the internet now has cash, many merchants can transact with wide swaths of the globe that they previously avoided. Remittances. Capital controls. No one's telling you to switch to Bitcoin, but it's clear that lots of people are going to use it.
    - danbruc 12y ago
      Bitcoin transactions are way more expensive than you think, currently between 10 and 20 dollars.
      - natrius 12y ago
        Let's say I'm buying an Overstock rug with bitcoins. I do an instant buy with Circle and and send the bitcoins over. Am I paying $10-$20? Is Overstock? Block rewards have no effect on whether people will use Bitcoin, especially since there are other digital currencies that don't have that issue. Inasmuch as it's a problem, it's fixable.
        danbruc 12y ago
        Who do you think pays for the electricity bills needed to keep a 250 PH/s network online?
        natrius 12y ago
        Bitcoin speculators. The folks who hook up their bank accounts to the Bitcoin network don't hold bitcoins or pay the block rewards.
        danbruc 12y ago
        250 PH/s, 1 W/GH/s, 0.1 $/kWh and you get 219 million dollars per year to run the Bitcoin network. At 75.000 transactions per day this yields 8 dollars per transaction. And these are real costs somebody has to pay for. Maybe most of that is currently covered by the influx of new money but this is not going to last forever. And once the block reward is gone this has to be covered by the fees. Neither lowering the hash rate nor reducing the the mining costs is an option because it undermines the security of the system. The only option is to process more transactions per block and this is not without problems on its own.
  - cheald 12y ago
    I'm no bitcoin apologist, but off the top of my head: 1. Due to Bitcoin's cash-esque nature, you don't hand over your account keys when you make a transaction. Every time I hand my credit card to a 16-year-old waiter I'm trusting that he's not going to take a quick picture of it with his cell phone to go shopping with online later. Since a Bitcoin transaction encodes a specific transfer of a specific amount from one address to another, I don't have to worry that that transaction is going to get leaked down the road (/stolen at an ATM/gas station/POS terminal) and end up putting my entire financial stability at risk. 2. Credit card processing fees inhibit a lot of services that could be microtransaction-based from becoming reality, because they aren't financially viable to run once you consider transaction fees. Bitcoin opens opportunities for a huge range of services that are only viable with minimal transaction fees to become reality.
    - danbruc 12y ago
      Not sure about the situation elsewhere but here in Germany credit card usages usually requires a PIN or a signature. And the credit card company will pay for abuse if you are not responsible. With transaction costs currently between 10 and 20 dollars per transaction and with a record of close to 100 dollars it does not really look like a good way to implement micro transactions.
      - lostsock 12y ago
        Where are you getting the transaction costs of between 10 and 20 dollars? For bitcoin? If so I think you need to take another look at your numbers.[1] [1] http://i.imgur.com/DgQk0og.png http://i.imgur.com/DgQk0og.png
        danbruc 12y ago
        Not fees, transaction costs. See one of my other comments, I don't want to type it out once again.
  - ThomPete 12y ago
    They didn't have value for the average person they GOT value with time. Who ever needed TCP/IP besides the governments? Well as it turns out the whole world did and not in any way it was originally intended. The difference between short term hype and long term implications are always hard but I think when it comes to bitcoin I think its fair to say that we haven't even begun to see the implications.

ThomPete 12y ago

Replace bitcoin in what you just said with internet, VOIP, airplanes, ipod and you got a pretty solid template for historic underestimations of technology in the long run.

bdcravens 12y ago
Bitcoin is a duality, something with utility while being traded. All of your examples provided a utility which drove revenue; Bitcoin tends to be reversed.
danbruc 12y ago
All the things you mention have value. But what is the value of using Bitcoins for the average person? Where are Bitcoins so obviously better than a credit card that switching is a good decision?
- nickthemagicman 12y ago
  I was trying to think of a good answer but you're right. The key advantages are decentralization and anonymity and to the average person who just wants a simple secure payment solution a credit card has all the advantages.
  - daveytea 12y ago
    Bitcoin is not anonymous and not meant to be. It never will be and shouldn't be to gain widespread adoption. For the average person, I can list a few reasons: - near immediate transfer of money across international borders - close to zero fees or greatly reduced fees when transferring money internationally - safe and secure store of value (for the unbanked) Then there are the future killer apps that will be created - tipping on the internet (changeTip / Coinbase) - programatic money - smart contracts - pure play digital banking - ?? It's hard to see how bitcoin could apply to the general public sitting at your computer in a first world country. But keep in mind there are nearly 5 billion unbanked or unserved people in the world where bitcoin (or similar) will change their life.
    - danbruc 12y ago
      Fast transfer, agreed. Cost per transaction is currently between 10 and 20 dollars and has been close to 100 dollars. I don't know what a wire transfer costs but I don't think the advantage is huge if you are only transferring a couple hundred or a few thousand dollars. Safe and secure store - taking malware, hacked exchanges, price fluctuations and the like into account, I am not sure it looks really bright. Future killer apps - let's talk again, when they are real. And tipping, for example, does not look like it could work - transactions are way to expensive to be used to tip a dollar. And when it comes to unbanked people I am not sure that it would be better or easier for them to adopt Bitcoin instead of a traditional banking system.
- ghshephard 12y ago
  Bitcoin is awesome for anybody who needs to send money to family back home. And there are a lot of people who do that - and it's very expensive.
  - pbreit 12y ago
    They are good for a range of things including cross-border and micro txns.
  - idiotclock 12y ago
    I think this is a great observation. Middle men make big money off of migrant workers.
- natrius 12y ago
  Bitcoin transactions are cheaper than credit card transactions. Using the card networks exposes merchants to chargeback fraud, but since the internet now has cash, many merchants can transact with wide swaths of the globe that they previously avoided. Remittances. Capital controls. No one's telling you to switch to Bitcoin, but it's clear that lots of people are going to use it.
  - danbruc 12y ago
    Bitcoin transactions are way more expensive than you think, currently between 10 and 20 dollars.
    - natrius 12y ago
      Let's say I'm buying an Overstock rug with bitcoins. I do an instant buy with Circle and and send the bitcoins over. Am I paying $10-$20? Is Overstock? Block rewards have no effect on whether people will use Bitcoin, especially since there are other digital currencies that don't have that issue. Inasmuch as it's a problem, it's fixable.
      - danbruc 12y ago
        Who do you think pays for the electricity bills needed to keep a 250 PH/s network online?
        natrius 12y ago
        Bitcoin speculators. The folks who hook up their bank accounts to the Bitcoin network don't hold bitcoins or pay the block rewards.
        danbruc 12y ago
        250 PH/s, 1 W/GH/s, 0.1 $/kWh and you get 219 million dollars per year to run the Bitcoin network. At 75.000 transactions per day this yields 8 dollars per transaction. And these are real costs somebody has to pay for. Maybe most of that is currently covered by the influx of new money but this is not going to last forever. And once the block reward is gone this has to be covered by the fees. Neither lowering the hash rate nor reducing the the mining costs is an option because it undermines the security of the system. The only option is to process more transactions per block and this is not without problems on its own.
- cheald 12y ago
  I'm no bitcoin apologist, but off the top of my head: 1. Due to Bitcoin's cash-esque nature, you don't hand over your account keys when you make a transaction. Every time I hand my credit card to a 16-year-old waiter I'm trusting that he's not going to take a quick picture of it with his cell phone to go shopping with online later. Since a Bitcoin transaction encodes a specific transfer of a specific amount from one address to another, I don't have to worry that that transaction is going to get leaked down the road (/stolen at an ATM/gas station/POS terminal) and end up putting my entire financial stability at risk. 2. Credit card processing fees inhibit a lot of services that could be microtransaction-based from becoming reality, because they aren't financially viable to run once you consider transaction fees. Bitcoin opens opportunities for a huge range of services that are only viable with minimal transaction fees to become reality.
  - danbruc 12y ago
    Not sure about the situation elsewhere but here in Germany credit card usages usually requires a PIN or a signature. And the credit card company will pay for abuse if you are not responsible. With transaction costs currently between 10 and 20 dollars per transaction and with a record of close to 100 dollars it does not really look like a good way to implement micro transactions.
    - lostsock 12y ago
      Where are you getting the transaction costs of between 10 and 20 dollars? For bitcoin? If so I think you need to take another look at your numbers.[1] [1] http://i.imgur.com/DgQk0og.png http://i.imgur.com/DgQk0og.png
      - danbruc 12y ago
        Not fees, transaction costs. See one of my other comments, I don't want to type it out once again.
- ThomPete 12y ago
  They didn't have value for the average person they GOT value with time. Who ever needed TCP/IP besides the governments? Well as it turns out the whole world did and not in any way it was originally intended. The difference between short term hype and long term implications are always hard but I think when it comes to bitcoin I think its fair to say that we haven't even begun to see the implications.