10 ms·

What's the use for Bitcoin?

77 points by scottyli 12y ago

davidgerard 12y ago
1. There will continue to be nothing that Bitcoin does better than existing systems, apart from money laundering and purchasing illicit goods. 2. No, not remittances. The expensive bit of Western Union is in fact that last mile. http://www.reddit.com/r/Buttcoin/comments/2ne03g/the_buttcoin_remittance_challenge/ http://www.reddit.com/r/Buttcoin/comments/2ne03g/the_buttcoi... 3. It will remain difficult to turn your Bitcoins into conventional currency (which is the only reason there's such a spread between exchanges). http://www.thebtcindex.com/ http://www.thebtcindex.com/ 4. It will get even harder to turn your conventional currency into Bitcoins, as any exchange not being run by blatant crooks puts you through the anti-money-laundering mill. 5. The protocol problems will continue not to be fixed, unless most of the hashing power and Mircea Popescu can be convinced to go along with the Bitcoin Foundation. No 20-meg blocks for you! 6. 99% of current hashing power came online in 2014; this will be very price-sensitive http://www.coindesk.com/bitcoin-mining-firm-cointerra-files-chapter-7-bankruptcy/ http://www.coindesk.com/bitcoin-mining-firm-cointerra-files-... and much will go offline as the price drops, maybe coming back next hash adjustment. 7. Miners will continue to sell their coins immediately to cover costs: we are circling equilibrium, where the cost of mining 1 BTC is about 1 BTC. The pool of money to pay for them comes from new Greater Fools. 8. Transaction irreversibility will remain Bitcoin's sticking point, as speculators who are insufficiently computer-savvy keep getting burnt. "No chargebacks" will continue to repel customers and not attract businesses. 9. More exchanges will get hacked and/or just take everyone's money. (e.g. just in January: BitStamp, 796, LocalBitcoins, EgoPay.) 10. Everyone who bought in the last year and held is a bagholder. Their claims and speculation will get increasingly frenzied. Ask for non-Bitcoinsphere numbers supporting all claims. 11. The bagholders and gambling addicts will continue to be taken by obvious scams, e.g. the two Ponzi scheme sites in just January. 12. Sidechains will continue to be vaporware and not in fact a thing that exists, let alone solves any problems. Bitcoiners will still talk about them as if they exist in the present, therefore you should ignore that altcoins are possible. (OTOH, pettycoin might get finished this year.) 13. Altcoins will continue to be even scammier than the Bitcoin ecosphere, boggled as I was to realise this. 14. The price is presently being held up by speculation and wishful thinking. No new reason will come along. The "fundamentals" are a castle in the air. 15. Nobody actually wants smart contracts. They know that the plot of Dr. Strangelove is literally an unstoppable smart contract going wrong. Real customers want problems to be fixable when circumstances change, real companies want to retain the option of lawyering out of a stupid deal. The only people who would want smart contracts are businesses looking to screw over their customers even more than "mandatory arbitration" clauses do. This is about as appealing to customers as no chargebacks, for the same reason. 16. Blockchains, even if by some remarkable wrinkle they turn out useful for something, will not lug Bitcoiners' 33 GB of SatoshiDice penny shavings with them. Bitcoiners will continue to bring up "blockchain technologies" as a reason to bother with Bitcoin regardless, because that's literally all they have. (Bitcoiners misunderstand that when a techie calls something "interesting" they don't necessarily mean "useful", "feasible" or "practical" — often they mean "what the hell even is that" or "I ain't even mad, that's amazing". The blockchain, particularly as implemented in Bitcoin, is very much the last.)
Mikeb85 12y ago
There really is no use for it. Banks have made transactions dirt simple and convenient (especially those outside the US), as well as safe. The only real use for Bitcoin is for anonymous, difficult to trace transactions (ie. black markets), and speculation. With my regular bank account and credit card, I can buy products from China to NA to Europe and just about anywhere, can change my funds into a myriad of currencies, and since I have an investment account, can also invest in 19(? have to check with my broker) different countries' stock markets. The problems Bitcoin claims to be trying to solve were already solved by the banks a while back. Plus banks will insure a fairly large amount of cash (more than most of us will have at any given time).
- cporios 12y ago
  > The problems Bitcoin claims to be trying to solve were already solved by the banks a while back. Bitcoin (according to its website) claims to provide instant P2P transactions and very low processing fees. International bank transactions take days or weeks and have very high fees. But even more importantly, bitcoins do not require a bank account. All it requires is internet or text messaging access. This is very important for the developing world where many people do not have bank accounts.
  - Mikeb85 12y ago
    > International bank transactions take days or weeks and have very high fees. Not really. I mean, I'm sure they can if you're moving millions, but small transactions are pretty much instant, even internationally, at least between modern banks in 2 countries. And the fees (if there even are any) are negligible. Anyhow, that's my experience with my bank. I do know that American banks can be behind the times a bit...
    - evbots 12y ago
      ACH bank transfers in the united states take on average 2-3 days to clear. Instant may mean the funds are available at your bank, but the clearing process may not be complete.
    - 12y ago
borgia 12y ago
I would tend to agree with the author here. I can't see Bitcoin ever emerging as something legal and useful to the average person. >Bitcoin enthusiasts disagree, claiming illicit activity is practically non-existent. Instead, they preach decentralization, trustlessness and smart contracts - none of which are benefits but merely features. Bitcoin enthusiasts preach an awful lot of things, particularly preaching about how others should adopt Bitcoin as a currency while they themselves sit on their stacks of it hoping to see its price rise and cash in. Indeed, it is these Bitcoin "enthusiasts", or more accurately lay speculators, that are likely one of Bitcoin's largest issue. They've turned what was designed to be a currency into an investment/speculation instrument and it's not transcending beyond that because of it, with the exception of people using it for illegal purposes. So you've two sides to Bitcoin in reality - speculators praying other people adopt it as a currency and those using it for nefarious purposes - both of which are off-putting to any normal person who'd consider using Bitcoin for purchases. I see no real future for Bitcoin personally. Gambling, perhaps, but even Bitcoin poker at the moment is mainly already skilled, dedicated players using Bitcoin Poker to play since they can't in the US, and that's not going to attract many casual players in itself to create a sustainable ecosystem, nevermind the Bitcoin barriers to getting on to the site in the first place.
- SCAQTony 12y ago
  If every Satoshi could be tracked along the blockchain for tax purposes I suspect the technology would become the de facto standard currency in the US and especially France. ;-)
- malka 12y ago
  I agree with you. I don't think Bitcoin will ever be mainstream. However, the features it has should be a huge source of inspiration for the banking system imo.
- Goronmon 12y ago
  So you've two sides to Bitcoin in reality - speculators praying other people adopt it as a currency and those using it for nefarious purposes - both of which are off-putting to any normal person who'd consider using Bitcoin for purchases. Don't forget the anarchists.
bdamm 12y ago
Useful but not on his list: * Bitcoin is excellent as a charity funding mechanism. Often I may wish to give to a charity, but don't want to give out my credit card number. I give up my tax credit, but for small handouts that's quite alright. * Micropayments. There is simply no other infrastructure that does this as well as Bitcoin does, because processing fees dominate.
- random28345 12y ago
  > Micropayments. There is simply no other infrastructure that does this as well as Bitcoin does, because processing fees dominate. You mean aside from currency conversion fees, the transaction fees (https://blockchain.info/charts/transaction-fees https://blockchain.info/charts/transaction-fees) and the massive $6,000 to $25,000 block reward? If you do the math, bitcoin is easily the most expensive currency to transact in, and least economically efficient currency relative to legitimate economic activity generated.
  - bdamm 12y ago
    Transaction fees are typically less than the equivalent of a penny. If I want to give 100 people each a nickel, how much would that cost in Bitcoin, and how much would that cost in USD via Visa? Hint: You can't even do it over Visa, because the receiver is liable for the transaction fees, which have minimums much higher than a nickel.
    - dragontamer 12y ago
      Which is why the article mentions Dwolla as the micropayment structure. Answer to your question btw, is $0 if you give less than $10 to everyone. You can easily send $5 to 5000 different people in Dwolla, since it takes advantage of the ACH system already in place in the US. I think he has a very strong point about micropayments. Afterall, DOGE outcompeted BTC due to those transaction fees and carved out a niche within the alt-coins explicitly because BTC's fees are a bit high IIRC.
  - IkmoIkmo 12y ago
    The costs of bitcoin you describe are systemic costs, not transaction fees. At 0 or 1 trillion transactions, the block rewards would be the same, which means they're not marginal costs, i.e. fees per transaction. They're unrelated. They pertain to money supply, a necessary force to get a currency out into the world. That causes inflation, which is not a direct price people pay (the transaction fees are a direct price, and those are a few pennies). Inflation is an indirect price. But if you look at bitcoin's history, its price is thousands of percent higher than just a few years ago, meaning that the cost is not actually incurred by those who use and transact or receive bitcoin. In the long-run, this inflation will stop, and part of the fees will be covered by a larger amount of transactions that each cost pennies. If 50 million people used bitcoin in a decade, you can still pay pennies per transaction but cut block rewards without a drop in security. If you do the math, bitcoin is easily the cheapest currency to transact in, which is why companies like Bitpesa exist undercutting remittance, and why Bitpay offers a 0% Saas payment processing fee, and why other merchant processors like Coinbase all undercut any creditcard, or Stripe, or Square, or Paypal, and why Paypal, Stripe and Square all have implemented bitcoin options into their services, and why companies like Microsoft accept bitcoin and keep more profits than they otherwise would if they had accepted the payment through e.g. a CC or Paypal.
deleted 12y ago
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aboutus 12y ago
I derided Bitcoin and cryptocurrencies in general until I seriously looked into it, and then I could hardly sleep for days because of the huge implications of it. Bitcoin allows people who are unbanked, especially in developing countries, to hold and transmit money across the world at practically zero cost. Since bitcoin is decentralized, there are no middlemen like banks to take a cut or freeze your account. Besides, there are a lot more crimes being perpetrated with fiat and credit cards by financial institutions and governments. And with new allegations that it was the US Feds that stole the money from Mt. GOX users (and not Mark Karpeles), I wonder if there isn't a nasty propaganda campaign against bitcoin going on. This article is close to clueless. But then, for a time so was I.
- random28345 12y ago
  Bitcoin is for Criminals, Cowards, and Crazies. Criminals, who find it useful as a mechanism for transferring and storing income from illegal activities. Cowards, who want to hide behind a cryptocurrency to protect themselves from social and government problems that can only be solved through education and democracy. And crazies who think that Obama is a secret atheist muslim who is fighting a secret war of confiscation and redistribution against America. > new allegations that it was the US Feds that stole the money from Mt. GOX users Which category do you most identify with?
  - jjbiotech 12y ago
    Physical currency such as gold or cash is for Criminals, Cowards, and Crazies. Criminals, who find it useful as a mechanism for transferring and storing income from illegal activities. Cowards, who want to hide behind physical currency to protect themselves from social and government problems that can only be solved through education and democracy. And crazies who think that Obama is a secret atheist muslim who is fighting a secret war of confiscation and redistribution against America. > new allegations that it was the US Feds that stole the money from Mt. GOX users Which category do you most identify with?
    - barce 12y ago
streptomycin 12y ago
The conclusion ("It’s incorrect to say Bitcoin doesn’t have a use case. It does. It’s just illegal in the US.") seems strange given that there is a big section of the article on semi-illegal things - basically things that are legal but traditional financial companies don't want to touch. The article says "mostly gambling, marijuana, and porn" but I'd also add politically controversial things, like when all the payment processors decided they didn't want to handle donations to Wikileaks after the US government asked them to make that change. These are real and legal use cases.
- random28345 12y ago
  > when all the payment processors decided they didn't want to handle donations to Wikileaks after the US government asked them to make that change. On the face of it, this seems like the one legal use of Bitcoin, to circumvent situations where the government uses influence to block certain economic activity through words (a request to payment processors) instead of the threat of force (new laws). However, the only reason that Bitcoin has any value to Wikileaks is because it can be exchanged for dollars to fund Wikileaks activity, and the only reason Bitcoin can be exchanged for dollars is because it is a medium of exchange for drugs. Without the drug market, Bitcoin would have little value, making it pointless to donate to Wikileaks.
  - deleted 12y ago
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  - JTF195 12y ago
    If I want to, I can buy my next motherboard from Newegg using Bitcoin. There are TONS of websites that accept Bitcoin, and a growing number of brick and mortar stores accept it also. You assert that black markets are the only factor that drive value in Cryptocurrencies, how about you back up that assertion with some evidence.
    - random28345 12y ago
      > If I want to, I can buy my next motherboard from Newegg using Bitcoin. Close. You can pay for your motherboard in bitcoin, which is then converted to dollars and remitted to Newegg. Newegg eats the conversion costs as a transaction fee, and handles the transaction like any other dollar-denominated sale. However, you aren't going to pay for your next motherboard with bitcoin. You're going to pay for web hosting for your drug sales or copyright infringement site with bitcoin, which is then sold for dollars by the shady web hosting company to people who want to buy drugs. Just because Coinbase paid Newegg a marketing fee to run a bunch of promotions doesn't mean people execute everyday transactions in bitcoin. Bitcoin is still (statistically) only for criminal activity and speculation.
paulsutter 12y ago
> Bitcoin is great for illegal goods/services > Tax evasion and escaping capital controls are also possible with Bitcoin Bitcoin is about as useful as lucky sunglasses for illegal transactions. Just ask Ross William Ulbricht. I don't engage in illegal transactions. But if I did, I wouldn't use a mechanism that leaves a permanent, publicly available record just waiting to be de-anonymized. > Bitcoin is powerful because it allows people to circumvent regulations, as it does not rely on the traditional banking system. False. Regulations do not limit themselves to the traditional banking system. Bitcoin is about as useful as lucky sunglasses for avoiding regulation. Sure you can get away with it a few times,....
- olalonde 12y ago
  > Just ask Ross William Ulbricht. Ross William Ulbricht wasn't caught because of Bitcoin. I read the FBI report and there was absolutely no mention of the blockchain if I recall correctly.
  - paulsutter 12y ago
    Shouldn't Bitcoin have given him magic immunity? All the people who transacted on Silk Road, do you think they should sleep well at night? Or do they all nervously await the statute of limitations expiration? You don't think the FBI has the blockchain loaded into Palantir where they can map all those transactions against all the other data they have? The more traces you leave behind the greater the chance for that one slip up that links it all together. Maybe the seller slips up and orders a pizza from the wrong wallet. Now they have him, and using the post office scan data they got you. Add as much complexity as you like, there's a way to unravel it. And you can't go back and take it out of the blockchain.
    - deleted 12y ago
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    - olalonde 12y ago
      > Shouldn't Bitcoin have given him magic immunity? No, why do you think that'd be the case? > All the people who transacted on Silk Road, do you think they should sleep well at night? Probably not. But certainly not because the FBI will track them through the blockchain, that's just ridiculous. There's absolutely no way to prove someone owns Bitcoins unless you get access to their wallet.
natrius 12y ago
Bitcoin's killer app is its function as a store of value. It's hard to see this when there are plenty of things that are storing value better at the moment, like traditional currencies and assets. But I don't think that will hold indefinitely (especially given our asset bubble), and that will lead people to look for ledgers with predictable supply, like gold and Bitcoin. Then again, maybe I'm crazy.
- dwaltrip 12y ago
  Spot on. Used with its full potential (multi-sig, time-lock, etc), and due to its fixed supply, bitcoin offers the most secure (but not the least volatile) way to store units of account. It provides the by far the most protection against malicious actors who would attempt to wrest control from the asset holder. How much this actually matters to most people (and thus its affect on the price of BTC) is an open question.
- tptacek 12y ago
  Isn't extreme volatility a very bad attribute for a store of value?
  - natrius 12y ago
    Buy low, sell high. For now, at least. Play out the end of an asset bubble in your head. Lots of people sell their assets, and now have dollars. The job of our policy makers is to make sure dollars don't increase in value at all, and don't decrease in value too quickly. But if lots of people are exchanging assets for dollars, the demand for dollars makes the value go up. Our policy makers will take a variety of actions to make their value go down by up to 2% a year. If we're lucky, they'll be able to stave off deflation. So if you've sold your assets and want to store your value, you really want some sort of ledger with a predictable supply so your value can go up, not stay the same or decrease by 2%. Gold is traditional the ledger that people seek when these sorts of things happen. But enough people will choose Bitcoin to raise the price significantly, which will make others choose it as well. Gold might be the right bet, but Bitcoin is a more functional ledger (easy to store, easy to transfer, etc.), and the upside is higher. But again, maybe I'm crazy.
AlexMuir 12y ago
I just wrote a post at lunch about this. Right now for most people Bitcoin is the only way to leave your wallet at home and pay for things with your mobile phone. http://alexmuir.com/bitcoins-practical-use http://alexmuir.com/bitcoins-practical-use
- mikeyouse 12y ago
  I can guarantee the following; 1. More people have Applepay than have a Bitcoin wallet 2. More stores and restaurants accept Applepay than Bitcoin 12.2M people had used Applepay at least once between launch and the end of February -- Some significant portion more than once. There were only 12.263M bitcoin transactions in the same time period -- many of which were basically dust / micro-transactions of a few pennies worth of BTC. There are only 1.5M bitcoin addresses with more than $2.50 in them.. 97% of addresses have less than .001 bitcoin.
  - AlexMuir 12y ago
    Good points. It doesn't address the fact that Apple Pay is currently only usable in the US. And it will be forever limited to those with the latest iOS device and credit cards. My point is that Bitcoin provides more functionality than Apple Pay today for the 99.9% of the world who aren't holding an iPhone 6 in the US.
cporios 12y ago
According to this half the world's population is unable to get a bank account: http://mckinseyonsociety.com/half-the-world-is-unbanked/ http://mckinseyonsociety.com/half-the-world-is-unbanked/ Bitcoin allows for anyone with internet or even text-messaging access to hold, receive and send money. To me, this seems revolutionary. I don't know how the author can ignore this.
- dragonwriter 12y ago
  I suspect that the half of the word's population that is unable to get a bank account has a sizable overlap with the fraction that doesn't have internet or even text-messaging access.
  - cporios 12y ago
    Even if that's true bringing internet or text messaging to the third world is easier than expanding bank coverage.
    - random28345 12y ago
      > Even if that's true bringing internet or text messaging to the third world is easier than expanding bank coverage. Bringing internet or text messaging to the third world has the net effect of expanding bank coverage.
    - maxerickson 12y ago
      The mobile phone operators are well positioned to offer payment services, and they do: http://en.wikipedia.org/wiki/M-Pesa http://en.wikipedia.org/wiki/M-Pesa (I don't know how many others there are, that's one of the big ones)
  - patcon 12y ago
    I feel you suspect wrong, and your suspection with get wronger fast :) http://data.worldbank.org/indicator/IT.CEL.SETS.P2?order=wbapi_data_value_2013+wbapi_data_value+wbapi_data_value-last&sort=desc http://data.worldbank.org/indicator/IT.CEL.SETS.P2?order=wba...
chisleu 12y ago
Bitcoin has many benefits for the average man, provided it is in wide use. Currently it isn't, so the advantages are not yet substantive. For one thing, the government doesn't control the inflation of bitcoin like it does with dollars. The fed aims for ~2.5-3% "inflation" every year, however this is inflation beyond the massive deflation that occurs year over year due to technology and efficiency increases... The supercomputer that cost millions in 1970 dollars cost you a couple hundred (and fits in your pocket to boot.) The inflated 1970's million USD is gigantic in today's dollars, but only because of the inflation created by the fed because they believe it is the only way to keep the fiat money system working. If people realized the deflationary power by simply not spending, the consumer driven economy would crash and burn quickly. What bitcoin offers is an escape from that inflationary cycle. If it's use spreads, it will allow people to protect their money in banks (although, they will be more like safety deposit boxes.) Banks can still offer loans, but it will be at a real rate in the market place. Fractional reserve banking will be a thing of the past. Federal (debt-backed) subsidies will no longer apply. The inflationary spiral that keeps reducing wealth for anyone who wants to save without participating in the inflated stock market will end. I see bitcoin as the cure to the woes of today. We have a real problem with the environment, and I believe much of it would be better if the money supply were not manipulated to support the consumer-driven economy. We would still have smart phones, but we probably wouldn't have throw away cases that we changed out with every outfit..
- Frondo 12y ago
  "the government doesn't control the inflation of bitcoin like it does with dollars"-- This is exactly the thing about Bitcoin that concerns me most; it has economic implications baked into its design and operation, but We, the People, have no voice in deciding those implications. What if We, the People, want to change the inflationary/deflationary properties of the money? If we're on bitcoin, someone else made that choice for you, and you have no recourse. I'm not at all comfortable giving away that kind of agency; after such a long arc toward greater democracy, it's hard to see bitcoin as anything but a substantial step away from democratic governance.
  - chisleu 12y ago
spectrum1234 12y ago
Bitcoin is all about the underlying PROTOCOL, not the currency itself. Note that the currency only has value because the protocol is sound. What is the protocol? Basically it allows you to trust a network in which you don't have to trust any participants. Think about that for a minute - THIS IS A PHENOMENAL ACHIEVEMENT. Use cases for bitcoin? Who cares. Use cases for the protocol? Countless. Just give it time. Its existed only for ~6 years people!
- spectrum1234 12y ago
  Also, does anyone else find it hilarious that so many of these articles talk about bitcoin in the "now" even though it was invented yesterday in the grand scheme of things? If you aren't gonna at least address this there is no way I'm respecting your critique sorry.
- barce 12y ago
  Yes, the protocol is revolutionary. I can put data into the blockchain that nobody can censor: http://bitcoin.stackexchange.com/questions/4315/how-can-i-insert-an-arbitrary-sha256-hash-into-the-blockchain/4316#4316 http://bitcoin.stackexchange.com/questions/4315/how-can-i-in... It would be possible to create an image service free of Instagram's tyranny via the blockchain.
jerguismi 12y ago
Why is not speculation/wealth storage not an use case?
chatmasta 12y ago
I don't understand why we even need to discuss the usefulness of Bitcoin beyond the fact that it's decentralized. Its decentralized nature, alone, is its most important attribute. Bitcoin cannot be stopped. Period. As long as multiple people can run a program on a set of computers that can connect to each other, Bitcoin can exist. If you want to receive it anonymously, you can perform services anonymously and take payment in Bitcoin. After that, yes your transactions are on the blockchain, but if nobody knows you provided the services to receive the original Bitcoin, then they cannot trace your subsequent transactions back to you without relying on outside variables. Yes, the regulatory environment and legal status of Bitcoin will affect its adoption as a mainstream currency. If large online merchants begin accepting it, and the price stabilizes to encourage spending, we will naturally see Bitcoin emerge as a useful payment platform. However, neither regulation nor legal status has any impact on the resiliency of the Bitcoin network. Bitcoin is decentralized and mathematical. It cannot be stopped or regulated with any real promise of enforcement. Bitcoin, by its very nature, is here to stay. Either we can adopt it into the mainstream and build tooling around it to make criminal activity inadvisable, or we can regulate it, discourage innovation, and let the criminals take over the network. Either way, the network remains. Bitcoin is decentralized! It only requires software and network connections.
- random28345 12y ago
  > Its decentralized nature, alone, is its most important attribute. Bitcoin cannot be stopped. Period. It's just as decentralized as tulip bulbs (http://en.wikipedia.org/wiki/Tulip_mania http://en.wikipedia.org/wiki/Tulip_mania), and Bitcoin will be "stopped" when a) it is illegal to transmit or receive a blockchain (unlikely), or b) when people realize the only value Bitcoin has is in the belief that Bitcoin has value. All it takes for Bitcoin to be worthless is the belief that Bitcoin is worthless. Therefore, if you hold any Bitcoin, you are incentivized to be a Bitcoin evangelist. Bitcoin isn't a currency, it's a religion; you need to create "converts" to make your investment of time and belief worthwhile.
  - pavel_lishin 12y ago
    > All it takes for Bitcoin to be worthless is the belief that Bitcoin is worthless. Isn't this true for every currency that isn't literally a physically scarce and useful resource (gold, grain, uranium, gold-pressed latinum?)
CJefferson 12y ago
One of my biggest problems with bitcoin is that half the bitcoins which will ever be created are already in circulation. That means the rise of bitcoin is just going to create a new "1%", who own the majority of the currency.
- deleted 12y ago
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- greenwireless 12y ago
  Actually we just passed two thirds of all coins mined.
Throwaway1224 12y ago
As an American, I prefer for the USA to be in charge of the "world's" currency... Just saying..........................
latchkey 12y ago
A globally distributed trusted timestamp. Applications: identification / existence, copyright, trademark, notary, escrow and proof of service.
njharman 12y ago
This is a miss-guided question. We can't predict the future, therefor we can't imagine the uses for new tech/thing. In fact disruptive new tech creates it's own uses. Asking what the use of Arpanet back in the day totally misses what the Internet has become.
- reganrob 12y ago
  How can you be optimistic about the future if no one thinks about it or builds for it? This guy has obviously thought about it and listed it in the "Internet of things protocol" using the blockchain. I don't agree necessarily though because IEEE already working on something.
ThomPete 12y ago
To me the trick about Bitcoin is to think about it as a protocol before you think about it as a currency or a ledger. Then think about how the TCP/IP protocol have managed to move way beyond it's original purpose. Bitcoin/Cryptocurrency might very well be a way to get around the issue we currently have where technology is moving faster than legislation. And so by using cryptotechnology we will be able to circumvent the political process but still maintain accountability. We are still some way from that but to be critical about it's future at this point is not just unwarranted IMHO it's also counterproductive. Just from the top of my heads here are a couple of ideas I had with regards to bitcoin/crypto: Digital Pokemón Cards. Basically the ability to create digital collectors items. E-books and other digital assets that could gain value. You could sell ebooks at a premium and allow people to re-sell them. Because the history of their ownership is recorded you could even see them gaining value if they had been owned by a celebrity. Private but public healthcare records. For research and usage. Store the health-records publicly as personas but allow individuals people to link it with their identity. This would help with research in completely new ways. Voting made public but anonymous Make it impossible to fake voting results by making the results available for everyone. Artificial Intelligence Using the protocol to create automated consensus models for how prioritize. Companies without owners Build a company with a political purpose without any owner. It doesn't need to be 100% fool proof it just needs to be good enough for a majority of people just like everything else and I don't see anything that stands in the way of it being good enough.
atlih 12y ago
This is the shittiest article I've read on HN to date. Remittance not useful because of currency exchange spreads? Well then no currencies are useful for remittance. As for the illegal part, are US dollars not useful for Drugs, Gambling, Tax Evasion and Escaping capital controls anymore? So then, when was the last time some one used US Dollars for any of the illegal activities above? The news didn't reach me.
- exelius 12y ago
  I think the argument against the remittance case is that if you're going USD->BTC->EUR, you're probably better off just going USD->EUR because it doesn't expose you to the risk of BTC. I actually disagree with this; the remittance case can be quite useful when the government has an artificial exchange rate that disagrees with reality. Maybe that falls under the "illegal" category. But as for illegal uses, the US dollar is useful for drugs, gambling, etc. specifically because it's very useful in legal transactions as well. There's a chicken and egg problem: most people don't engage in illegal activity, but right now if you use BTC it's a red flag that something illegal is going on. If you want BTC to be really useful for illegal transactions, it needs to be useful for legal ones and gain wider adoption. That was my reading of it, anyway.
  - pbreit 12y ago
    USD to EUR is not interesting at all. It's the thousands of combinations of the other 200 currencies that are.
    - exelius 12y ago
      Right, but what is the upside of using XXX->BTC->YYY instead of XXX->USD->YYY? In the instances where there is no liquid market of XXX or YYY to USD, it is highly unlikely that there will be a liquid market of XXX or YYY to BTC. If conversion between XXX and USD is illegal, then BTC is essentially being used to avoid local laws, and falls under the "illegal" category the author described. BTC would be a great intermediary currency if there wasn't one already in the form of USD. I just don't see any advantage that BTC would offer over USD, even in the presence of high levels of BTC liquidity (assuming nothing catastrophic happens to the USD, of course).
lordnacho 12y ago
Bitcoin tries to be two things: A currency. And a way to reliably account for who owns what, with no central authority. As a currency, it has the problem that there's no natural demand for it. Nobody needs it to pay their taxes, and it's not widespread enough to be worth having for the common person. Naturally this could change, but until then you've got a game theory problem. The protocol side is what makes it interesting. The protocol is basically a way for us to collectively scribble on a giant wall that grows every 10 minutes. And that wall cannot be changed, thanks to the clever incentive system that makes the primary use to account for who owns which bitcoins. The technology would still work if you used it to scribble love letters, but nobody would have an interest in keeping the system going. So is this protocol useful? It very well could be. For instance, any number of currency-like things could be (and are) accounted for. You could put the whole land registry on the blockchain, and then you'd always be able to verify some person owned a parcel. You can put documents (or hashes of documents) in it and prove it existed at some time. The list goes on. The big question is whether this protocol is economical and convenient enough to actually displace what's there already. We already have a land registry. We already have notaries. There also needs to be some thought put in about how the infrastructure will be paid for. If the currency is useless, why do miners want to keep mining? Sure, there's the potential it won't be useless in the future, but how long can you string along an operation like that for? How do you plan if the price is so volatile it might be zero or a million in five years? Each price implies a very different level of investment. One strategy might be a slightly different altcoin system (many, many altcoins have been invented) that tries to share the cost evenly, so no one economic actor has a special position. Another thing you could do is pass real money instead of BTCs. But I think the protocol core is here to stay.
greenwireless 12y ago
Use it and you will find out.
kordless 12y ago
"These make up a significant portion of transactions." That's a bullshit statement. Prove it, or shut up.
- mod_alec 12y ago
  It can be inferred from SilkRoad's revenue. Plus, about ~50% of blockchain transactions were gambling related before they all moved offchain. You could tell because all the gambling addresses were labeled on blockchain.info Hard to get gambling numbers now because it's all private and offchain.
2drew3 12y ago
OP needs to check out https://purse.io https://purse.io Use case for consumers: discounts on Amazon. Use case for earners (mostly unbanked): earn Amazon gift cards as payment and convert to fiat through bitcoin. Blog showcasing counterargument: https://medium.com/@PurseIO/10-use-cases-for-bitcoin-c6b7182aa1b9 https://medium.com/@PurseIO/10-use-cases-for-bitcoin-c6b7182...
williamcotton 12y ago
I'm a big fan of both Sidney and Scott and the great work they did building Helloblock, one of the better Bitcoin API providers. It's a shame that they couldn't find a market for their product. What's a bigger shame is that they've both written articles disparaging Bitcoin technology now that they've decided to move on to other challenges. We have a brand new data storage technology that allows for equal access read and write privileges on data that is permanent and shared equally across all nodes. It acts as a decentralized single point-of-truth. There has never been anything like this. A simple ledger that operates as a type of currency is most basic thing that can be built. Blockchain tech will disrupt almost every part of our industry. We won't need centralized identity providers like Facebook. We can start to treat digital media as property and build up a viable economic system. We can actually account for people's data use and the value of their contributions instead of this blind air gap between advertising and operation costs. We can create and transfer digital assets that represent all sorts of things. Writers, photographers, musicians and anyone else who makes the content that fuels the advertising engines of Silicon Valley are becoming increasingly dissatisfied with how they publish work on the Internet. Putting something on a web page isn't publishing. Posting something on Facebook or Twitter isn't publishing. The act of publishing needs to be public and it needs to be permanent. Can you reliably quote from a blog or a tweet? No, you can't, because the content could change. You can reliably quote from the second printing of a physical text because it would be almost impossible for someone to go through and change every copy. All of this on a unified platform that isn't controlled by anyone meaning there's no danger of a private entity limiting access to APIs and destroying the hard work of developers, which Twitter has been doing for years. I really hate to call them out because they've been very nice and incredibly helpful over the last year, but guys, come on, there's no need to burn bridges. Just because you can't see the possibilities doesn't mean that they aren't there.
mmuro 12y ago
This is a broad generalization that it's used for illegal purposes. My (very legal) business accepts Bitcoin. I don't have many customers using that form of payment, but chances are I may not have them if I didn't accept it. I don't really care what form of payment you want to use.
bcook 12y ago
Bitcoin has also pushed the art of cryptographic hash calculation forward. This helps us better understand how to protect ourselves from large-scale (government) brute-forcing of password hashes, for example. As others have said; Bitcoin is more than just a currency.
nicholas1849 12y ago
The honest answer: tax evasion and money laundering.
kpcyrd 12y ago
There is no such thing as "semi-illegal". It's either legal or illegal.
canvia 12y ago
I think bitcoin will be incredibly useful in the digital goods economy. Global digital marketplaces need payment solutions that transcend nationalities. If you create an album of music and want to sell digital copies online you should be able to accept payments from customers anywhere in the world using any currency. Bitcoin allows that to happen. If you want to create a video content channel and let people pay a monthly subscription there should not be any type of restriction because of what country the viewer lives in. All of these borders and constraints are artificial and unnecessary in a digital economy. If you want to create a digital service that operates entirely on the internet, why should you be restricted to using a subset of currencies? Bitcoin can be the transaction layer that makes all the human constraints irrelevant. Digital goods also offer essentially no cost of replication so the only real limitation on the size of the digital economy is the number of agents participating in it, which increases daily. The tools needed to create and consume digital products are becoming cheaper every year and more people are gaining access to them globally. IMO the future of the world economy is going to be increasingly digital, and increasingly created by independent producers. Games, books, education, movies, short format shows, PC and mobile applications, web services, photography, art, comics, all will be available to anyone in the world at very low cost and with no necessity for restriction. As I see it the only thing holding back this digital revolution is that consumers are largely ignorant as to it's existence and continue to support antiquated development and delivery systems. I do not think that the rising young generations have this impediment in their habits. What really seems to be missing is a global system for independent content discovery. I'd like to see a universal amazon style digital product aggregation and distribution system that only uses digital currency. The store would provide discovery and distribution (maybe digital currency exchange as well) to a global audience for a transaction fee that beats traditional payment methods. A wiki style product information page that allows users to provide additional product details and translations for localization would be interesting to see (while difficult to moderate). tl;dr with bitcoin anyone in the world can create a digital product with nearly zero replication or distribution costs and sell it to anyone else in the world basically instantly. That infrastructure exists today but is underutilized.
Animats 12y ago
That's a good article on Bitcoin. Bitcoin had two big runups. The first was driven by Silk Road (the drugs use case), and the second was driven by China's exchange controls. For a few months in 2013, it was legal in China to buy Bitcoins with a debit card in yuan. The Bitcoins could then be sold outside China for dollars or euros. China has exchange controls. Ordinarily, it's quite difficult to convert yuan to dollars or euros from inside China. Bitcoin made it possible. Then the People's Bank of China (roughly equivalent to the US Fed plus the US Treasury) cracked down, and in 2014 the price of Bitcoin went into a dive from $1100 down to the current $240. That's how we got here. Bitcoin mining in China may also be a way to bypass exchange controls. China encourages exports. China's government has no problem with someone setting up a business, making something, selling it outside China, and keeping the proceeds outside China. That doesn't violate exchange controls, because no yuan have left China. A Bitcoin mine fits that model. If you have a successful business in some interior province and want to get out enough dollars for a villa on the Riviera, a share in a Bitcoin mine is a good option. This may be driving much Bitcoin mining activity.
CyberDildonics 12y ago
Surely people here are not so short sited that they actually think these 'not useful' cases are really not useful or that these are the only use cases. Right now you could travel around Thailand and bring only your phone and passport. There is a service that allows you to give btc and get a code that can be used at any ATM of a major bank and get cash. You can cut down the 8% spread of changing money at the airport to 1/3rd of that at least. That is something you can do right this second. Not only that but paying for something online is fantastic. No excessive information, no transactions cancelled because of a companies' opaque fraud protection system, no chance of your card number being stolen, no need to generate a temporary card number, no need to worry about your bank's opaque fraud protection... Seriously, if you think bitcoin isn't useful, try using it.
- ostikk 12y ago
  With your Thailand example, the author made the point that it's actually cheaper through P2P model (like Hawala) without the need to eat the exchange spread/fees by changing BTC. And yeah, fraud is still a huge problem for e-commerce, but how does Bitcoin solve that? As stated in the article, it just pushes more responsibility to the user. Multi-sig doesn't solve that either, you still need a 3rd party escrow provider, who will charge a fee.
  - CyberDildonics 12y ago
    P2P? Meaning you have to go find people also on a service that I've never heard of until seeing is plugged in this thread? And why would people in Thailand want to buy a specific currency someone is selling anyway. Even USD or Euros would be rare, but every other currency would be hugely exotic. The service right now allows you to take out cash from bank ATMs that are everywhere. How does Bitcoin solve fraud? It is devoid of fraud. It doesn't 'just push responsibility to the user' it avoids the broken concept of giving someone all the information necessary to charge money to you at will. The fraud you are describing would be fraud from a business not delivering which isn't on the same level as credit card fraud that is happening on a massive scale.
swswsw 12y ago
Bitcoin network is the first truly-open financial/transaction/value network that allows developer to innovate on top of it. What if you think it this way? I also want to point out that bitcoin might have a shot at being a global currency.
stevedekorte 12y ago
Monetary gold is just a physical implementation of a secure ledger with very limited inflation, and at a $6T market cap, it's clear that such a ledger has value for more than just black and grey market uses. Bitcoin is a digital version of a secure ledger (with long term zero monetary inflation) but solves gold's transport, secure storage, divisibility, verifiability, etc issues.

77 points by scottyli 12y ago

1. There will continue to be nothing that Bitcoin does better than existing systems, apart from money laundering and purchasing illicit goods. 2. No, not remittances. The expensive bit of Western Union is in fact that last mile. http://www.reddit.com/r/Buttcoin/comments/2ne03g/the_buttcoin_remittance_challenge/ http://www.reddit.com/r/Buttcoin/comments/2ne03g/the_buttcoi... 3. It will remain difficult to turn your Bitcoins into conventional currency (which is the only reason there's such a spread between exchanges). http://www.thebtcindex.com/ http://www.thebtcindex.com/ 4. It will get even harder to turn your conventional currency into Bitcoins, as any exchange not being run by blatant crooks puts you through the anti-money-laundering mill. 5. The protocol problems will continue not to be fixed, unless most of the hashing power and Mircea Popescu can be convinced to go along with the Bitcoin Foundation. No 20-meg blocks for you! 6. 99% of current hashing power came online in 2014; this will be very price-sensitive http://www.coindesk.com/bitcoin-mining-firm-cointerra-files-chapter-7-bankruptcy/ http://www.coindesk.com/bitcoin-mining-firm-cointerra-files-... and much will go offline as the price drops, maybe coming back next hash adjustment. 7. Miners will continue to sell their coins immediately to cover costs: we are circling equilibrium, where the cost of mining 1 BTC is about 1 BTC. The pool of money to pay for them comes from new Greater Fools. 8. Transaction irreversibility will remain Bitcoin's sticking point, as speculators who are insufficiently computer-savvy keep getting burnt. "No chargebacks" will continue to repel customers and not attract businesses. 9. More exchanges will get hacked and/or just take everyone's money. (e.g. just in January: BitStamp, 796, LocalBitcoins, EgoPay.) 10. Everyone who bought in the last year and held is a bagholder. Their claims and speculation will get increasingly frenzied. Ask for non-Bitcoinsphere numbers supporting all claims. 11. The bagholders and gambling addicts will continue to be taken by obvious scams, e.g. the two Ponzi scheme sites in just January. 12. Sidechains will continue to be vaporware and not in fact a thing that exists, let alone solves any problems. Bitcoiners will still talk about them as if they exist in the present, therefore you should ignore that altcoins are possible. (OTOH, pettycoin might get finished this year.) 13. Altcoins will continue to be even scammier than the Bitcoin ecosphere, boggled as I was to realise this. 14. The price is presently being held up by speculation and wishful thinking. No new reason will come along. The "fundamentals" are a castle in the air. 15. Nobody actually wants smart contracts. They know that the plot of Dr. Strangelove is literally an unstoppable smart contract going wrong. Real customers want problems to be fixable when circumstances change, real companies want to retain the option of lawyering out of a stupid deal. The only people who would want smart contracts are businesses looking to screw over their customers even more than "mandatory arbitration" clauses do. This is about as appealing to customers as no chargebacks, for the same reason. 16. Blockchains, even if by some remarkable wrinkle they turn out useful for something, will not lug Bitcoiners' 33 GB of SatoshiDice penny shavings with them. Bitcoiners will continue to bring up "blockchain technologies" as a reason to bother with Bitcoin regardless, because that's literally all they have. (Bitcoiners misunderstand that when a techie calls something "interesting" they don't necessarily mean "useful", "feasible" or "practical" — often they mean "what the hell even is that" or "I ain't even mad, that's amazing". The blockchain, particularly as implemented in Bitcoin, is very much the last.)

Mikeb85 12y ago

There really is no use for it. Banks have made transactions dirt simple and convenient (especially those outside the US), as well as safe. The only real use for Bitcoin is for anonymous, difficult to trace transactions (ie. black markets), and speculation. With my regular bank account and credit card, I can buy products from China to NA to Europe and just about anywhere, can change my funds into a myriad of currencies, and since I have an investment account, can also invest in 19(? have to check with my broker) different countries' stock markets. The problems Bitcoin claims to be trying to solve were already solved by the banks a while back. Plus banks will insure a fairly large amount of cash (more than most of us will have at any given time).

cporios 12y ago
> The problems Bitcoin claims to be trying to solve were already solved by the banks a while back. Bitcoin (according to its website) claims to provide instant P2P transactions and very low processing fees. International bank transactions take days or weeks and have very high fees. But even more importantly, bitcoins do not require a bank account. All it requires is internet or text messaging access. This is very important for the developing world where many people do not have bank accounts.
- Mikeb85 12y ago
  > International bank transactions take days or weeks and have very high fees. Not really. I mean, I'm sure they can if you're moving millions, but small transactions are pretty much instant, even internationally, at least between modern banks in 2 countries. And the fees (if there even are any) are negligible. Anyhow, that's my experience with my bank. I do know that American banks can be behind the times a bit...
  - evbots 12y ago
    ACH bank transfers in the united states take on average 2-3 days to clear. Instant may mean the funds are available at your bank, but the clearing process may not be complete.
  - 12y ago

borgia 12y ago

I would tend to agree with the author here. I can't see Bitcoin ever emerging as something legal and useful to the average person. >Bitcoin enthusiasts disagree, claiming illicit activity is practically non-existent. Instead, they preach decentralization, trustlessness and smart contracts - none of which are benefits but merely features. Bitcoin enthusiasts preach an awful lot of things, particularly preaching about how others should adopt Bitcoin as a currency while they themselves sit on their stacks of it hoping to see its price rise and cash in. Indeed, it is these Bitcoin "enthusiasts", or more accurately lay speculators, that are likely one of Bitcoin's largest issue. They've turned what was designed to be a currency into an investment/speculation instrument and it's not transcending beyond that because of it, with the exception of people using it for illegal purposes. So you've two sides to Bitcoin in reality - speculators praying other people adopt it as a currency and those using it for nefarious purposes - both of which are off-putting to any normal person who'd consider using Bitcoin for purchases. I see no real future for Bitcoin personally. Gambling, perhaps, but even Bitcoin poker at the moment is mainly already skilled, dedicated players using Bitcoin Poker to play since they can't in the US, and that's not going to attract many casual players in itself to create a sustainable ecosystem, nevermind the Bitcoin barriers to getting on to the site in the first place.

SCAQTony 12y ago
If every Satoshi could be tracked along the blockchain for tax purposes I suspect the technology would become the de facto standard currency in the US and especially France. ;-)
malka 12y ago
I agree with you. I don't think Bitcoin will ever be mainstream. However, the features it has should be a huge source of inspiration for the banking system imo.
Goronmon 12y ago
So you've two sides to Bitcoin in reality - speculators praying other people adopt it as a currency and those using it for nefarious purposes - both of which are off-putting to any normal person who'd consider using Bitcoin for purchases. Don't forget the anarchists.

bdamm 12y ago

Useful but not on his list: * Bitcoin is excellent as a charity funding mechanism. Often I may wish to give to a charity, but don't want to give out my credit card number. I give up my tax credit, but for small handouts that's quite alright. * Micropayments. There is simply no other infrastructure that does this as well as Bitcoin does, because processing fees dominate.

random28345 12y ago
> Micropayments. There is simply no other infrastructure that does this as well as Bitcoin does, because processing fees dominate. You mean aside from currency conversion fees, the transaction fees (https://blockchain.info/charts/transaction-fees https://blockchain.info/charts/transaction-fees) and the massive $6,000 to $25,000 block reward? If you do the math, bitcoin is easily the most expensive currency to transact in, and least economically efficient currency relative to legitimate economic activity generated.
- bdamm 12y ago
  Transaction fees are typically less than the equivalent of a penny. If I want to give 100 people each a nickel, how much would that cost in Bitcoin, and how much would that cost in USD via Visa? Hint: You can't even do it over Visa, because the receiver is liable for the transaction fees, which have minimums much higher than a nickel.
  - dragontamer 12y ago
    Which is why the article mentions Dwolla as the micropayment structure. Answer to your question btw, is $0 if you give less than $10 to everyone. You can easily send $5 to 5000 different people in Dwolla, since it takes advantage of the ACH system already in place in the US. I think he has a very strong point about micropayments. Afterall, DOGE outcompeted BTC due to those transaction fees and carved out a niche within the alt-coins explicitly because BTC's fees are a bit high IIRC.
- IkmoIkmo 12y ago
  The costs of bitcoin you describe are systemic costs, not transaction fees. At 0 or 1 trillion transactions, the block rewards would be the same, which means they're not marginal costs, i.e. fees per transaction. They're unrelated. They pertain to money supply, a necessary force to get a currency out into the world. That causes inflation, which is not a direct price people pay (the transaction fees are a direct price, and those are a few pennies). Inflation is an indirect price. But if you look at bitcoin's history, its price is thousands of percent higher than just a few years ago, meaning that the cost is not actually incurred by those who use and transact or receive bitcoin. In the long-run, this inflation will stop, and part of the fees will be covered by a larger amount of transactions that each cost pennies. If 50 million people used bitcoin in a decade, you can still pay pennies per transaction but cut block rewards without a drop in security. If you do the math, bitcoin is easily the cheapest currency to transact in, which is why companies like Bitpesa exist undercutting remittance, and why Bitpay offers a 0% Saas payment processing fee, and why other merchant processors like Coinbase all undercut any creditcard, or Stripe, or Square, or Paypal, and why Paypal, Stripe and Square all have implemented bitcoin options into their services, and why companies like Microsoft accept bitcoin and keep more profits than they otherwise would if they had accepted the payment through e.g. a CC or Paypal.

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aboutus 12y ago

I derided Bitcoin and cryptocurrencies in general until I seriously looked into it, and then I could hardly sleep for days because of the huge implications of it. Bitcoin allows people who are unbanked, especially in developing countries, to hold and transmit money across the world at practically zero cost. Since bitcoin is decentralized, there are no middlemen like banks to take a cut or freeze your account. Besides, there are a lot more crimes being perpetrated with fiat and credit cards by financial institutions and governments. And with new allegations that it was the US Feds that stole the money from Mt. GOX users (and not Mark Karpeles), I wonder if there isn't a nasty propaganda campaign against bitcoin going on. This article is close to clueless. But then, for a time so was I.

random28345 12y ago
Bitcoin is for Criminals, Cowards, and Crazies. Criminals, who find it useful as a mechanism for transferring and storing income from illegal activities. Cowards, who want to hide behind a cryptocurrency to protect themselves from social and government problems that can only be solved through education and democracy. And crazies who think that Obama is a secret atheist muslim who is fighting a secret war of confiscation and redistribution against America. > new allegations that it was the US Feds that stole the money from Mt. GOX users Which category do you most identify with?
- jjbiotech 12y ago
  Physical currency such as gold or cash is for Criminals, Cowards, and Crazies. Criminals, who find it useful as a mechanism for transferring and storing income from illegal activities. Cowards, who want to hide behind physical currency to protect themselves from social and government problems that can only be solved through education and democracy. And crazies who think that Obama is a secret atheist muslim who is fighting a secret war of confiscation and redistribution against America. > new allegations that it was the US Feds that stole the money from Mt. GOX users Which category do you most identify with?
  - barce 12y ago

streptomycin 12y ago

The conclusion ("It’s incorrect to say Bitcoin doesn’t have a use case. It does. It’s just illegal in the US.") seems strange given that there is a big section of the article on semi-illegal things - basically things that are legal but traditional financial companies don't want to touch. The article says "mostly gambling, marijuana, and porn" but I'd also add politically controversial things, like when all the payment processors decided they didn't want to handle donations to Wikileaks after the US government asked them to make that change. These are real and legal use cases.

random28345 12y ago
> when all the payment processors decided they didn't want to handle donations to Wikileaks after the US government asked them to make that change. On the face of it, this seems like the one legal use of Bitcoin, to circumvent situations where the government uses influence to block certain economic activity through words (a request to payment processors) instead of the threat of force (new laws). However, the only reason that Bitcoin has any value to Wikileaks is because it can be exchanged for dollars to fund Wikileaks activity, and the only reason Bitcoin can be exchanged for dollars is because it is a medium of exchange for drugs. Without the drug market, Bitcoin would have little value, making it pointless to donate to Wikileaks.
- deleted 12y ago
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- JTF195 12y ago
  If I want to, I can buy my next motherboard from Newegg using Bitcoin. There are TONS of websites that accept Bitcoin, and a growing number of brick and mortar stores accept it also. You assert that black markets are the only factor that drive value in Cryptocurrencies, how about you back up that assertion with some evidence.
  - random28345 12y ago
    > If I want to, I can buy my next motherboard from Newegg using Bitcoin. Close. You can pay for your motherboard in bitcoin, which is then converted to dollars and remitted to Newegg. Newegg eats the conversion costs as a transaction fee, and handles the transaction like any other dollar-denominated sale. However, you aren't going to pay for your next motherboard with bitcoin. You're going to pay for web hosting for your drug sales or copyright infringement site with bitcoin, which is then sold for dollars by the shady web hosting company to people who want to buy drugs. Just because Coinbase paid Newegg a marketing fee to run a bunch of promotions doesn't mean people execute everyday transactions in bitcoin. Bitcoin is still (statistically) only for criminal activity and speculation.

paulsutter 12y ago

> Bitcoin is great for illegal goods/services > Tax evasion and escaping capital controls are also possible with Bitcoin Bitcoin is about as useful as lucky sunglasses for illegal transactions. Just ask Ross William Ulbricht. I don't engage in illegal transactions. But if I did, I wouldn't use a mechanism that leaves a permanent, publicly available record just waiting to be de-anonymized. > Bitcoin is powerful because it allows people to circumvent regulations, as it does not rely on the traditional banking system. False. Regulations do not limit themselves to the traditional banking system. Bitcoin is about as useful as lucky sunglasses for avoiding regulation. Sure you can get away with it a few times,....

olalonde 12y ago
> Just ask Ross William Ulbricht. Ross William Ulbricht wasn't caught because of Bitcoin. I read the FBI report and there was absolutely no mention of the blockchain if I recall correctly.
- paulsutter 12y ago
  Shouldn't Bitcoin have given him magic immunity? All the people who transacted on Silk Road, do you think they should sleep well at night? Or do they all nervously await the statute of limitations expiration? You don't think the FBI has the blockchain loaded into Palantir where they can map all those transactions against all the other data they have? The more traces you leave behind the greater the chance for that one slip up that links it all together. Maybe the seller slips up and orders a pizza from the wrong wallet. Now they have him, and using the post office scan data they got you. Add as much complexity as you like, there's a way to unravel it. And you can't go back and take it out of the blockchain.
  - deleted 12y ago
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  - olalonde 12y ago
    > Shouldn't Bitcoin have given him magic immunity? No, why do you think that'd be the case? > All the people who transacted on Silk Road, do you think they should sleep well at night? Probably not. But certainly not because the FBI will track them through the blockchain, that's just ridiculous. There's absolutely no way to prove someone owns Bitcoins unless you get access to their wallet.

natrius 12y ago

Bitcoin's killer app is its function as a store of value. It's hard to see this when there are plenty of things that are storing value better at the moment, like traditional currencies and assets. But I don't think that will hold indefinitely (especially given our asset bubble), and that will lead people to look for ledgers with predictable supply, like gold and Bitcoin. Then again, maybe I'm crazy.

dwaltrip 12y ago
Spot on. Used with its full potential (multi-sig, time-lock, etc), and due to its fixed supply, bitcoin offers the most secure (but not the least volatile) way to store units of account. It provides the by far the most protection against malicious actors who would attempt to wrest control from the asset holder. How much this actually matters to most people (and thus its affect on the price of BTC) is an open question.
tptacek 12y ago
Isn't extreme volatility a very bad attribute for a store of value?
- natrius 12y ago
  Buy low, sell high. For now, at least. Play out the end of an asset bubble in your head. Lots of people sell their assets, and now have dollars. The job of our policy makers is to make sure dollars don't increase in value at all, and don't decrease in value too quickly. But if lots of people are exchanging assets for dollars, the demand for dollars makes the value go up. Our policy makers will take a variety of actions to make their value go down by up to 2% a year. If we're lucky, they'll be able to stave off deflation. So if you've sold your assets and want to store your value, you really want some sort of ledger with a predictable supply so your value can go up, not stay the same or decrease by 2%. Gold is traditional the ledger that people seek when these sorts of things happen. But enough people will choose Bitcoin to raise the price significantly, which will make others choose it as well. Gold might be the right bet, but Bitcoin is a more functional ledger (easy to store, easy to transfer, etc.), and the upside is higher. But again, maybe I'm crazy.

AlexMuir 12y ago

I just wrote a post at lunch about this. Right now for most people Bitcoin is the only way to leave your wallet at home and pay for things with your mobile phone. http://alexmuir.com/bitcoins-practical-use http://alexmuir.com/bitcoins-practical-use

mikeyouse 12y ago
I can guarantee the following; 1. More people have Applepay than have a Bitcoin wallet 2. More stores and restaurants accept Applepay than Bitcoin 12.2M people had used Applepay at least once between launch and the end of February -- Some significant portion more than once. There were only 12.263M bitcoin transactions in the same time period -- many of which were basically dust / micro-transactions of a few pennies worth of BTC. There are only 1.5M bitcoin addresses with more than $2.50 in them.. 97% of addresses have less than .001 bitcoin.
- AlexMuir 12y ago
  Good points. It doesn't address the fact that Apple Pay is currently only usable in the US. And it will be forever limited to those with the latest iOS device and credit cards. My point is that Bitcoin provides more functionality than Apple Pay today for the 99.9% of the world who aren't holding an iPhone 6 in the US.

cporios 12y ago

According to this half the world's population is unable to get a bank account: http://mckinseyonsociety.com/half-the-world-is-unbanked/ http://mckinseyonsociety.com/half-the-world-is-unbanked/ Bitcoin allows for anyone with internet or even text-messaging access to hold, receive and send money. To me, this seems revolutionary. I don't know how the author can ignore this.

dragonwriter 12y ago
I suspect that the half of the word's population that is unable to get a bank account has a sizable overlap with the fraction that doesn't have internet or even text-messaging access.
- cporios 12y ago
  Even if that's true bringing internet or text messaging to the third world is easier than expanding bank coverage.
  - random28345 12y ago
    > Even if that's true bringing internet or text messaging to the third world is easier than expanding bank coverage. Bringing internet or text messaging to the third world has the net effect of expanding bank coverage.
  - maxerickson 12y ago
    The mobile phone operators are well positioned to offer payment services, and they do: http://en.wikipedia.org/wiki/M-Pesa http://en.wikipedia.org/wiki/M-Pesa (I don't know how many others there are, that's one of the big ones)
- patcon 12y ago
  I feel you suspect wrong, and your suspection with get wronger fast :) http://data.worldbank.org/indicator/IT.CEL.SETS.P2?order=wbapi_data_value_2013+wbapi_data_value+wbapi_data_value-last&sort=desc http://data.worldbank.org/indicator/IT.CEL.SETS.P2?order=wba...

chisleu 12y ago

Bitcoin has many benefits for the average man, provided it is in wide use. Currently it isn't, so the advantages are not yet substantive. For one thing, the government doesn't control the inflation of bitcoin like it does with dollars. The fed aims for ~2.5-3% "inflation" every year, however this is inflation beyond the massive deflation that occurs year over year due to technology and efficiency increases... The supercomputer that cost millions in 1970 dollars cost you a couple hundred (and fits in your pocket to boot.) The inflated 1970's million USD is gigantic in today's dollars, but only because of the inflation created by the fed because they believe it is the only way to keep the fiat money system working. If people realized the deflationary power by simply not spending, the consumer driven economy would crash and burn quickly. What bitcoin offers is an escape from that inflationary cycle. If it's use spreads, it will allow people to protect their money in banks (although, they will be more like safety deposit boxes.) Banks can still offer loans, but it will be at a real rate in the market place. Fractional reserve banking will be a thing of the past. Federal (debt-backed) subsidies will no longer apply. The inflationary spiral that keeps reducing wealth for anyone who wants to save without participating in the inflated stock market will end. I see bitcoin as the cure to the woes of today. We have a real problem with the environment, and I believe much of it would be better if the money supply were not manipulated to support the consumer-driven economy. We would still have smart phones, but we probably wouldn't have throw away cases that we changed out with every outfit..

Frondo 12y ago
"the government doesn't control the inflation of bitcoin like it does with dollars"-- This is exactly the thing about Bitcoin that concerns me most; it has economic implications baked into its design and operation, but We, the People, have no voice in deciding those implications. What if We, the People, want to change the inflationary/deflationary properties of the money? If we're on bitcoin, someone else made that choice for you, and you have no recourse. I'm not at all comfortable giving away that kind of agency; after such a long arc toward greater democracy, it's hard to see bitcoin as anything but a substantial step away from democratic governance.
- chisleu 12y ago

spectrum1234 12y ago

Bitcoin is all about the underlying PROTOCOL, not the currency itself. Note that the currency only has value because the protocol is sound. What is the protocol? Basically it allows you to trust a network in which you don't have to trust any participants. Think about that for a minute - THIS IS A PHENOMENAL ACHIEVEMENT. Use cases for bitcoin? Who cares. Use cases for the protocol? Countless. Just give it time. Its existed only for ~6 years people!

spectrum1234 12y ago
Also, does anyone else find it hilarious that so many of these articles talk about bitcoin in the "now" even though it was invented yesterday in the grand scheme of things? If you aren't gonna at least address this there is no way I'm respecting your critique sorry.
barce 12y ago
Yes, the protocol is revolutionary. I can put data into the blockchain that nobody can censor: http://bitcoin.stackexchange.com/questions/4315/how-can-i-insert-an-arbitrary-sha256-hash-into-the-blockchain/4316#4316 http://bitcoin.stackexchange.com/questions/4315/how-can-i-in... It would be possible to create an image service free of Instagram's tyranny via the blockchain.

jerguismi 12y ago

Why is not speculation/wealth storage not an use case?

chatmasta 12y ago

I don't understand why we even need to discuss the usefulness of Bitcoin beyond the fact that it's decentralized. Its decentralized nature, alone, is its most important attribute. Bitcoin cannot be stopped. Period. As long as multiple people can run a program on a set of computers that can connect to each other, Bitcoin can exist. If you want to receive it anonymously, you can perform services anonymously and take payment in Bitcoin. After that, yes your transactions are on the blockchain, but if nobody knows you provided the services to receive the original Bitcoin, then they cannot trace your subsequent transactions back to you without relying on outside variables. Yes, the regulatory environment and legal status of Bitcoin will affect its adoption as a mainstream currency. If large online merchants begin accepting it, and the price stabilizes to encourage spending, we will naturally see Bitcoin emerge as a useful payment platform. However, neither regulation nor legal status has any impact on the resiliency of the Bitcoin network. Bitcoin is decentralized and mathematical. It cannot be stopped or regulated with any real promise of enforcement. Bitcoin, by its very nature, is here to stay. Either we can adopt it into the mainstream and build tooling around it to make criminal activity inadvisable, or we can regulate it, discourage innovation, and let the criminals take over the network. Either way, the network remains. Bitcoin is decentralized! It only requires software and network connections.

random28345 12y ago
> Its decentralized nature, alone, is its most important attribute. Bitcoin cannot be stopped. Period. It's just as decentralized as tulip bulbs (http://en.wikipedia.org/wiki/Tulip_mania http://en.wikipedia.org/wiki/Tulip_mania), and Bitcoin will be "stopped" when a) it is illegal to transmit or receive a blockchain (unlikely), or b) when people realize the only value Bitcoin has is in the belief that Bitcoin has value. All it takes for Bitcoin to be worthless is the belief that Bitcoin is worthless. Therefore, if you hold any Bitcoin, you are incentivized to be a Bitcoin evangelist. Bitcoin isn't a currency, it's a religion; you need to create "converts" to make your investment of time and belief worthwhile.
- pavel_lishin 12y ago
  > All it takes for Bitcoin to be worthless is the belief that Bitcoin is worthless. Isn't this true for every currency that isn't literally a physically scarce and useful resource (gold, grain, uranium, gold-pressed latinum?)

CJefferson 12y ago

One of my biggest problems with bitcoin is that half the bitcoins which will ever be created are already in circulation. That means the rise of bitcoin is just going to create a new "1%", who own the majority of the currency.

deleted 12y ago
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greenwireless 12y ago
Actually we just passed two thirds of all coins mined.

Throwaway1224 12y ago

As an American, I prefer for the USA to be in charge of the "world's" currency... Just saying..........................

latchkey 12y ago

A globally distributed trusted timestamp. Applications: identification / existence, copyright, trademark, notary, escrow and proof of service.

njharman 12y ago

This is a miss-guided question. We can't predict the future, therefor we can't imagine the uses for new tech/thing. In fact disruptive new tech creates it's own uses. Asking what the use of Arpanet back in the day totally misses what the Internet has become.

reganrob 12y ago
How can you be optimistic about the future if no one thinks about it or builds for it? This guy has obviously thought about it and listed it in the "Internet of things protocol" using the blockchain. I don't agree necessarily though because IEEE already working on something.

ThomPete 12y ago

To me the trick about Bitcoin is to think about it as a protocol before you think about it as a currency or a ledger. Then think about how the TCP/IP protocol have managed to move way beyond it's original purpose. Bitcoin/Cryptocurrency might very well be a way to get around the issue we currently have where technology is moving faster than legislation. And so by using cryptotechnology we will be able to circumvent the political process but still maintain accountability. We are still some way from that but to be critical about it's future at this point is not just unwarranted IMHO it's also counterproductive. Just from the top of my heads here are a couple of ideas I had with regards to bitcoin/crypto: Digital Pokemón Cards. Basically the ability to create digital collectors items. E-books and other digital assets that could gain value. You could sell ebooks at a premium and allow people to re-sell them. Because the history of their ownership is recorded you could even see them gaining value if they had been owned by a celebrity. Private but public healthcare records. For research and usage. Store the health-records publicly as personas but allow individuals people to link it with their identity. This would help with research in completely new ways. Voting made public but anonymous Make it impossible to fake voting results by making the results available for everyone. Artificial Intelligence Using the protocol to create automated consensus models for how prioritize. Companies without owners Build a company with a political purpose without any owner. It doesn't need to be 100% fool proof it just needs to be good enough for a majority of people just like everything else and I don't see anything that stands in the way of it being good enough.

atlih 12y ago

This is the shittiest article I've read on HN to date. Remittance not useful because of currency exchange spreads? Well then no currencies are useful for remittance. As for the illegal part, are US dollars not useful for Drugs, Gambling, Tax Evasion and Escaping capital controls anymore? So then, when was the last time some one used US Dollars for any of the illegal activities above? The news didn't reach me.

exelius 12y ago
I think the argument against the remittance case is that if you're going USD->BTC->EUR, you're probably better off just going USD->EUR because it doesn't expose you to the risk of BTC. I actually disagree with this; the remittance case can be quite useful when the government has an artificial exchange rate that disagrees with reality. Maybe that falls under the "illegal" category. But as for illegal uses, the US dollar is useful for drugs, gambling, etc. specifically because it's very useful in legal transactions as well. There's a chicken and egg problem: most people don't engage in illegal activity, but right now if you use BTC it's a red flag that something illegal is going on. If you want BTC to be really useful for illegal transactions, it needs to be useful for legal ones and gain wider adoption. That was my reading of it, anyway.
- pbreit 12y ago
  USD to EUR is not interesting at all. It's the thousands of combinations of the other 200 currencies that are.
  - exelius 12y ago
    Right, but what is the upside of using XXX->BTC->YYY instead of XXX->USD->YYY? In the instances where there is no liquid market of XXX or YYY to USD, it is highly unlikely that there will be a liquid market of XXX or YYY to BTC. If conversion between XXX and USD is illegal, then BTC is essentially being used to avoid local laws, and falls under the "illegal" category the author described. BTC would be a great intermediary currency if there wasn't one already in the form of USD. I just don't see any advantage that BTC would offer over USD, even in the presence of high levels of BTC liquidity (assuming nothing catastrophic happens to the USD, of course).

lordnacho 12y ago

Bitcoin tries to be two things: A currency. And a way to reliably account for who owns what, with no central authority. As a currency, it has the problem that there's no natural demand for it. Nobody needs it to pay their taxes, and it's not widespread enough to be worth having for the common person. Naturally this could change, but until then you've got a game theory problem. The protocol side is what makes it interesting. The protocol is basically a way for us to collectively scribble on a giant wall that grows every 10 minutes. And that wall cannot be changed, thanks to the clever incentive system that makes the primary use to account for who owns which bitcoins. The technology would still work if you used it to scribble love letters, but nobody would have an interest in keeping the system going. So is this protocol useful? It very well could be. For instance, any number of currency-like things could be (and are) accounted for. You could put the whole land registry on the blockchain, and then you'd always be able to verify some person owned a parcel. You can put documents (or hashes of documents) in it and prove it existed at some time. The list goes on. The big question is whether this protocol is economical and convenient enough to actually displace what's there already. We already have a land registry. We already have notaries. There also needs to be some thought put in about how the infrastructure will be paid for. If the currency is useless, why do miners want to keep mining? Sure, there's the potential it won't be useless in the future, but how long can you string along an operation like that for? How do you plan if the price is so volatile it might be zero or a million in five years? Each price implies a very different level of investment. One strategy might be a slightly different altcoin system (many, many altcoins have been invented) that tries to share the cost evenly, so no one economic actor has a special position. Another thing you could do is pass real money instead of BTCs. But I think the protocol core is here to stay.

greenwireless 12y ago

Use it and you will find out.

kordless 12y ago

"These make up a significant portion of transactions." That's a bullshit statement. Prove it, or shut up.

mod_alec 12y ago
It can be inferred from SilkRoad's revenue. Plus, about ~50% of blockchain transactions were gambling related before they all moved offchain. You could tell because all the gambling addresses were labeled on blockchain.info Hard to get gambling numbers now because it's all private and offchain.

2drew3 12y ago

OP needs to check out https://purse.io https://purse.io Use case for consumers: discounts on Amazon. Use case for earners (mostly unbanked): earn Amazon gift cards as payment and convert to fiat through bitcoin. Blog showcasing counterargument: https://medium.com/@PurseIO/10-use-cases-for-bitcoin-c6b7182aa1b9 https://medium.com/@PurseIO/10-use-cases-for-bitcoin-c6b7182...

williamcotton 12y ago

I'm a big fan of both Sidney and Scott and the great work they did building Helloblock, one of the better Bitcoin API providers. It's a shame that they couldn't find a market for their product. What's a bigger shame is that they've both written articles disparaging Bitcoin technology now that they've decided to move on to other challenges. We have a brand new data storage technology that allows for equal access read and write privileges on data that is permanent and shared equally across all nodes. It acts as a decentralized single point-of-truth. There has never been anything like this. A simple ledger that operates as a type of currency is most basic thing that can be built. Blockchain tech will disrupt almost every part of our industry. We won't need centralized identity providers like Facebook. We can start to treat digital media as property and build up a viable economic system. We can actually account for people's data use and the value of their contributions instead of this blind air gap between advertising and operation costs. We can create and transfer digital assets that represent all sorts of things. Writers, photographers, musicians and anyone else who makes the content that fuels the advertising engines of Silicon Valley are becoming increasingly dissatisfied with how they publish work on the Internet. Putting something on a web page isn't publishing. Posting something on Facebook or Twitter isn't publishing. The act of publishing needs to be public and it needs to be permanent. Can you reliably quote from a blog or a tweet? No, you can't, because the content could change. You can reliably quote from the second printing of a physical text because it would be almost impossible for someone to go through and change every copy. All of this on a unified platform that isn't controlled by anyone meaning there's no danger of a private entity limiting access to APIs and destroying the hard work of developers, which Twitter has been doing for years. I really hate to call them out because they've been very nice and incredibly helpful over the last year, but guys, come on, there's no need to burn bridges. Just because you can't see the possibilities doesn't mean that they aren't there.

mmuro 12y ago

This is a broad generalization that it's used for illegal purposes. My (very legal) business accepts Bitcoin. I don't have many customers using that form of payment, but chances are I may not have them if I didn't accept it. I don't really care what form of payment you want to use.

bcook 12y ago

Bitcoin has also pushed the art of cryptographic hash calculation forward. This helps us better understand how to protect ourselves from large-scale (government) brute-forcing of password hashes, for example. As others have said; Bitcoin is more than just a currency.

nicholas1849 12y ago

The honest answer: tax evasion and money laundering.

kpcyrd 12y ago

There is no such thing as "semi-illegal". It's either legal or illegal.

canvia 12y ago

I think bitcoin will be incredibly useful in the digital goods economy. Global digital marketplaces need payment solutions that transcend nationalities. If you create an album of music and want to sell digital copies online you should be able to accept payments from customers anywhere in the world using any currency. Bitcoin allows that to happen. If you want to create a video content channel and let people pay a monthly subscription there should not be any type of restriction because of what country the viewer lives in. All of these borders and constraints are artificial and unnecessary in a digital economy. If you want to create a digital service that operates entirely on the internet, why should you be restricted to using a subset of currencies? Bitcoin can be the transaction layer that makes all the human constraints irrelevant. Digital goods also offer essentially no cost of replication so the only real limitation on the size of the digital economy is the number of agents participating in it, which increases daily. The tools needed to create and consume digital products are becoming cheaper every year and more people are gaining access to them globally. IMO the future of the world economy is going to be increasingly digital, and increasingly created by independent producers. Games, books, education, movies, short format shows, PC and mobile applications, web services, photography, art, comics, all will be available to anyone in the world at very low cost and with no necessity for restriction. As I see it the only thing holding back this digital revolution is that consumers are largely ignorant as to it's existence and continue to support antiquated development and delivery systems. I do not think that the rising young generations have this impediment in their habits. What really seems to be missing is a global system for independent content discovery. I'd like to see a universal amazon style digital product aggregation and distribution system that only uses digital currency. The store would provide discovery and distribution (maybe digital currency exchange as well) to a global audience for a transaction fee that beats traditional payment methods. A wiki style product information page that allows users to provide additional product details and translations for localization would be interesting to see (while difficult to moderate). tl;dr with bitcoin anyone in the world can create a digital product with nearly zero replication or distribution costs and sell it to anyone else in the world basically instantly. That infrastructure exists today but is underutilized.

Animats 12y ago

That's a good article on Bitcoin. Bitcoin had two big runups. The first was driven by Silk Road (the drugs use case), and the second was driven by China's exchange controls. For a few months in 2013, it was legal in China to buy Bitcoins with a debit card in yuan. The Bitcoins could then be sold outside China for dollars or euros. China has exchange controls. Ordinarily, it's quite difficult to convert yuan to dollars or euros from inside China. Bitcoin made it possible. Then the People's Bank of China (roughly equivalent to the US Fed plus the US Treasury) cracked down, and in 2014 the price of Bitcoin went into a dive from $1100 down to the current $240. That's how we got here. Bitcoin mining in China may also be a way to bypass exchange controls. China encourages exports. China's government has no problem with someone setting up a business, making something, selling it outside China, and keeping the proceeds outside China. That doesn't violate exchange controls, because no yuan have left China. A Bitcoin mine fits that model. If you have a successful business in some interior province and want to get out enough dollars for a villa on the Riviera, a share in a Bitcoin mine is a good option. This may be driving much Bitcoin mining activity.

CyberDildonics 12y ago

Surely people here are not so short sited that they actually think these 'not useful' cases are really not useful or that these are the only use cases. Right now you could travel around Thailand and bring only your phone and passport. There is a service that allows you to give btc and get a code that can be used at any ATM of a major bank and get cash. You can cut down the 8% spread of changing money at the airport to 1/3rd of that at least. That is something you can do right this second. Not only that but paying for something online is fantastic. No excessive information, no transactions cancelled because of a companies' opaque fraud protection system, no chance of your card number being stolen, no need to generate a temporary card number, no need to worry about your bank's opaque fraud protection... Seriously, if you think bitcoin isn't useful, try using it.

ostikk 12y ago
With your Thailand example, the author made the point that it's actually cheaper through P2P model (like Hawala) without the need to eat the exchange spread/fees by changing BTC. And yeah, fraud is still a huge problem for e-commerce, but how does Bitcoin solve that? As stated in the article, it just pushes more responsibility to the user. Multi-sig doesn't solve that either, you still need a 3rd party escrow provider, who will charge a fee.
- CyberDildonics 12y ago
  P2P? Meaning you have to go find people also on a service that I've never heard of until seeing is plugged in this thread? And why would people in Thailand want to buy a specific currency someone is selling anyway. Even USD or Euros would be rare, but every other currency would be hugely exotic. The service right now allows you to take out cash from bank ATMs that are everywhere. How does Bitcoin solve fraud? It is devoid of fraud. It doesn't 'just push responsibility to the user' it avoids the broken concept of giving someone all the information necessary to charge money to you at will. The fraud you are describing would be fraud from a business not delivering which isn't on the same level as credit card fraud that is happening on a massive scale.

swswsw 12y ago

Bitcoin network is the first truly-open financial/transaction/value network that allows developer to innovate on top of it. What if you think it this way? I also want to point out that bitcoin might have a shot at being a global currency.

stevedekorte 12y ago

Monetary gold is just a physical implementation of a secure ledger with very limited inflation, and at a $6T market cap, it's clear that such a ledger has value for more than just black and grey market uses. Bitcoin is a digital version of a secure ledger (with long term zero monetary inflation) but solves gold's transport, secure storage, divisibility, verifiability, etc issues.