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> i think the biggest deficiency is it's not being backed by many trustworthy people Is the current global financial system backed by many trustworthy people?

by Mtinie 11y ago

> i think the biggest deficiency is it's not being backed by many trustworthy people Is the current global financial system backed by many trustworthy people? Who qualifies as "trustworthy" in this case? Central Banks, commercial banks, corporate executives? I'm not attempting to be snarky, though it probably could be read like I am. I'm really curious if it's true that digital currencies lack a "trust" factor (perception, no trust-less ledgers) or if it is that many people are turning a blind eye to the horrible things that go on in our legacy banking and financial systems.

JoshTriplett 11y ago
In the eyes of the majority of people, the current financial system is safe. People believe that their funds are safe (backed by things like FDIC), and that they have certain types of protection. I'm a fan of cryptocurrency for a variety of reasons, but most of the problems that cryptocurrencies solve are not widely perceived as problems by most people.
- Dylan16807 11y ago
  Yeah, I pretty much can't imagine a situation where I would lose the money in my bank account but at the same time my bitcoins would be safe. It's not that it's absolutely safe, it's that bitcoin has no advantage on that front.
  - JoshTriplett 11y ago
    > Yeah, I pretty much can't imagine a situation where I would lose the money in my bank account but at the same time my bitcoins would be safe. I can imagine such situations, but they're the kind where you're more worried about your stockpiles of ammunition and canned goods, not bitcoins. Short of total economic failure, banks are "safe" in well-defined ways. (On the other hand, erosion of wealth in traditional currencies due to inflation is just as real as fluctuation of wealth in cryptocurrencies.)
    - Dylan16807 11y ago
      In those situations I would not call my bitcoins safe. If I'm in physical danger, my possessions and passwords are in danger too.
      - davidgerard 11y ago
        Fortunately, reliable TCP/IP networking and chip foundries producing ASICs are expected to remain readily available in the post-apocalyptic Mad Max gasolinepunk future.
  - Karunamon 11y ago
    It becomes a lot easier when people make the connection that "bitcoin == cash, but online". It's just that everyone is used to credit cards being the primary way to pay for things on the internet, and they think the model is the same, when it's radically different. What happens when you give cash to someone for something and it turns out they scammed you? Your cash is gone. Involve the authorities or just eat it. What happens when you lose your wallet in real life? The cash inside is gone, you don't get it back. What happens when someone steals your wallet? The cash is gone. Etc, etc, etc.
    - dragonwriter 11y ago
      Of course, all these things are reasons that many people prefer credit cards for in person transactions even though cash is available for them. So, I'm not sure that replicating all the problems of cash for online transactions is a great selling point for bitcoin.
  - yellowapple 11y ago
    > Yeah, I pretty much can't imagine a situation where I would lose the money in my bank account Those who witnessed the Great Depression (or similar events involving bank runs and financial crashes) probably could.
    - mpyne 11y ago
      There's a reason the Great Depression pre dates the things that were mentioned like FDIC. I'll leave alone for now the fact that it was the government boogeyman that implemented the changes that make things like bank crashes wiping out a family's meager savings a historical artifact.
      - yellowapple 11y ago
        I'm well aware that the Great Depression is the reason why banks are insured in the modern age. That insurance has limits, though; not only is the amount limited, but the U.S. government - like all non-fictional things - has finite budget/capital (no matter how much Congress likes to pretend otherwise).
return0 11y ago
they trust them because many paragons are overseeing the system and occasionally , for example, fine the banks that rig the FX rates. it's hard to trust a commodity with a history of drugs, theft and the winklevosses. bitcoin may have almost solved the security issue but it has raised bigger trust issues.
- Mtinie 11y ago
  If we're using those as the criteria for trust[1,2], I'm totally going to stop using Wall Street-backed products :) You've got me on the third point, however. The Winklevoss brothers do have an EFT in the works[3], but I don't think it's fair to use them as a symbol of financial malfeasance. ----- [1] http://www.npr.org/sections/parallels/2014/03/20/291934724/awash-in-cash-drug-cartels-rely-on-big-banks-to-launder-profits http://www.npr.org/sections/parallels/2014/03/20/291934724/a... [2] http://www.chicagotribune.com/business/breaking/chi-hackers-bank-heist-20150215-story.html http://www.chicagotribune.com/business/breaking/chi-hackers-... [3] https://winklevosscapital.com/ https://winklevosscapital.com/