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The author's post is full of misguided opinions, and inaccuracies. "Reason 1: Bitcoin will not replace retail payment systems" Bitcoin is more of an enabler t

by mrb 12y ago

The author's post is full of misguided opinions, and inaccuracies. "Reason 1: Bitcoin will not replace retail payment systems" Bitcoin is more of an enabler than a replacer. There are many financial transactions that do not take place because current financial platforms do not let them happen. For example with Bitcoin I could in theory pay an artist in Namibia who makes little sculptures and ships them to worldwide. This economic activity does not exist today because there is no safe/efficient way to pay some random guy in Namibia who does not have a bank account. "Scenario 2 [transaction count must increase 250 folds] and 3 [Price increases 250 folds to $65000/BTC] are not likely to occur" So the author hand-waves that and says it cannot continue to happen with zero reasons? To see a combined 250 fold increase all we need to see is a number of transactions increasing by 25x (which will happen with the upcoming block size increase) and a price increasing by 10x. Consider that: - the number of transactions has already increased 1,000 fold (and more) in the past few years, and there is no sign of it slowing down: https://blockchain.info/charts/n-transactions?showDataPoints=false&show_header=true&daysAverageString=7&timespan=all&scale=0&address= https://blockchain.info/charts/n-transactions?showDataPoints... - the price has already increased 1,000 fold (and more) in the past few years: https://blockchain.info/charts/market-price?showDataPoints=false&show_header=true&daysAverageString=7&timespan=all&scale=1&address= https://blockchain.info/charts/market-price?showDataPoints=f... So the author ought to explain to us why he thinks such increases would suddenly stop. "Fiat conversion makes Bitcoin transactions even more expensive" The author completely ignores the economic incentive of transactions within the Bitcoin economy itself. When I give 1 BTC to my father, he can spend 1 BTC on Dell.com. No fiat conversion takes place. "Reason 2: Bitcoin will not end the need for trusted central parties" I agree with this, but I do not see at all why the author listed this as a reason why Bitcoin will not succeed. In some cases having a central trusted party does make sense, in others it does not. "When is censorship resistance so important that it is worthwhile to make those trade offs? The answer is: illegal use cases" Or: oppressive governments who seize the bank accounts of dissidents, Paypal when they decide to shut down the accounts of donation receivers (because their fraud system incorrectly interprets such sudden flows of money as fraud), etc. You see, the world is bigger than you. There are many instances where censorship resistance is important and is needed for legal use cases. "Whereas most Bitcoin users are primarily using Bitcoin as a speculative asset and illegal transactions" The author provides no source for the "illegal transactions", because he has no data to back this up, because this claim is false. In fact the biggest illegal shops have been shut down (SR 1.0, SR 2.0). And the number of legit merchants continues to increase (now surpassing 100,000 merchants accepting Bitcoin worldwide). "Internet did not make design trade-offs to primarily focus on censorship resistance at the expense of other qualities (such as speed)" Yes it did make trade-offs. Internet was designed to be decentralized to make it resilient (which is similar to censorship resistance), at the expense of complexity (it took decades to develop a stack that works well: BGP / IP / TCP / UDP / DNS / HTTP). "If online gambling were to become legal and widely accepted by banks, Bitcoin would not be used to gamble online" Another flawed argument. Let me try this: "if online reselling were to become legal and widely accepted by banks, Bitcoin would not be used by online merchants". Yet 100,000 merchants are using Bitcoin... "However, Bitcoin has shown us the promise of blockchain technologies" The author does not understand that Bitcoin's block chain technology simply cannot exist without Bitcoin (the currency): why would miners mine if they received no bitcoins rewards? For the block chain technology to succeed, Bitcoin needs to succeed, and vice versa.

sharpneli 12y ago
> So the author ought to explain to us why he thinks such increases would suddenly stop Because they have already stopped. The price of bitcoin has only dropped for the last year. You should give a reason why the drop should stop and it would start to rise again. > The author completely ignores the economic incentive of transactions within the Bitcoin economy itself. When I give 1 BTC to my father, he can spend 1 BTC on Dell.com. No fiat conversion takes place. Dell does not accept bitcoin. Dell accepts dollars from bitpay. The expense is paid by bitpay having a worse exchange rate than the normal bitcoin exchanges. So yeah there is fiat transfer happening. Out of curiosity do you know any single big retailer that actually accepts bitcoin in the sense that they are not being actually paid in fiat? > Yet 100,000 merchants are using Bitcoin... Merchants might use bitcoin. But customers unfortunately are not. Wordpress just stopped accepting bitcoin because they got only 2 purchases per week using it. Data from overstock suggests that it's far more common phenomenon. Thanks to bitpay there is not really any reason for merchants not to accept it though. They get paid in fiat and they don't get any expenses from accepting it.
- vanzard 12y ago
  > Because they have already stopped No, tx/block certainly NEVER stopped increasing: https://blockchain.info/charts/n-transactions?showDataPoints=false&show_header=true&daysAverageString=7&timespan=all&scale=0&address= https://blockchain.info/charts/n-transactions?showDataPoints... And price is cyclical. After the bubble of June 2011, it took 21 months to surpass its previous high of $30. What makes you think this bubble and price correction is different? In fact, Bitcoin is on the rise since its $150 bottom on January 14th so it would indicate the drop in fact did stop. > Dell does not accept bitcoin This is irrelevant to the point the OP was making: transactions that remain within Bitcoin incur no fiat exchange fees. I sell something on craigslist for bitcoins, I use these bitcoins to pay back lunch money to my coworker, he gifts the bitcoins to his brother, his brother sends the bitcoin to his son overseas for remittance, etc. All this with zero fiat exchanges. > But customers unfortunately are not Growth is not through-the-roof, but it certainly is there: http://avc.com/2014/10/bitcoin-adoption-metrics/ http://avc.com/2014/10/bitcoin-adoption-metrics/ You cannot quote 2 anecdotes and infer an industry-wide trend. The plural of anecdotes is not data. Anyway it's again irrelevant to the point the OP was making: the blog post's argument is flawed, not everybody who uses Bitcoin is doing it for illegal purposes.

by mrb 12y ago

sharpneli 12y ago

> So the author ought to explain to us why he thinks such increases would suddenly stop Because they have already stopped. The price of bitcoin has only dropped for the last year. You should give a reason why the drop should stop and it would start to rise again. > The author completely ignores the economic incentive of transactions within the Bitcoin economy itself. When I give 1 BTC to my father, he can spend 1 BTC on Dell.com. No fiat conversion takes place. Dell does not accept bitcoin. Dell accepts dollars from bitpay. The expense is paid by bitpay having a worse exchange rate than the normal bitcoin exchanges. So yeah there is fiat transfer happening. Out of curiosity do you know any single big retailer that actually accepts bitcoin in the sense that they are not being actually paid in fiat? > Yet 100,000 merchants are using Bitcoin... Merchants might use bitcoin. But customers unfortunately are not. Wordpress just stopped accepting bitcoin because they got only 2 purchases per week using it. Data from overstock suggests that it's far more common phenomenon. Thanks to bitpay there is not really any reason for merchants not to accept it though. They get paid in fiat and they don't get any expenses from accepting it.

vanzard 12y ago
> Because they have already stopped No, tx/block certainly NEVER stopped increasing: https://blockchain.info/charts/n-transactions?showDataPoints=false&show_header=true&daysAverageString=7&timespan=all&scale=0&address= https://blockchain.info/charts/n-transactions?showDataPoints... And price is cyclical. After the bubble of June 2011, it took 21 months to surpass its previous high of $30. What makes you think this bubble and price correction is different? In fact, Bitcoin is on the rise since its $150 bottom on January 14th so it would indicate the drop in fact did stop. > Dell does not accept bitcoin This is irrelevant to the point the OP was making: transactions that remain within Bitcoin incur no fiat exchange fees. I sell something on craigslist for bitcoins, I use these bitcoins to pay back lunch money to my coworker, he gifts the bitcoins to his brother, his brother sends the bitcoin to his son overseas for remittance, etc. All this with zero fiat exchanges. > But customers unfortunately are not Growth is not through-the-roof, but it certainly is there: http://avc.com/2014/10/bitcoin-adoption-metrics/ http://avc.com/2014/10/bitcoin-adoption-metrics/ You cannot quote 2 anecdotes and infer an industry-wide trend. The plural of anecdotes is not data. Anyway it's again irrelevant to the point the OP was making: the blog post's argument is flawed, not everybody who uses Bitcoin is doing it for illegal purposes.