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It's become beyond obvious that existing Bitcoin blockchain technology has no real ability to scale, function as a long-term store of value, or withstand even m

by themgt 11y ago

It's become beyond obvious that existing Bitcoin blockchain technology has no real ability to scale, function as a long-term store of value, or withstand even moderate attacks by bad actors. The hype has gotten in the way of building something that makes sense, and the continued belief in "Bitcoin" as the answer rather than some mew - perhaps maybe with a lot of further innovation - blockchain inspired tech, seems mostly tied up in the "investors" left who spent real dollars for the bits they're now watching depreciate, and can't bring themselves to admit an interesting, failed technology's digital coins are worth about as much as old Pokemon trading cards.

javert 11y ago
> some mew - perhaps maybe with a lot of further innovation - blockchain inspired tech There is no other way to get a decentralized global ledger. Well, if there is, it would be a huge discovery, just like bitcoin was. > It's become beyond obvious that existing Bitcoin blockchain technology has no real ability to scale Once you have the ledger, you don't need to put every transaction on it. Lots of them can happen off the chain. So yeah, your "obvious" is another word for "wrong".
- aliakhtar 11y ago
  > Once you have the ledger We've had ledgers for quite a while, bitcoin wasn't the first digital ledger. I still don't understand the use case of a decentralized ledger, other than for illegal uses.
  - natrius 11y ago
    You're in for a treat, then. A blockchain is a world computer. Each program on the computer has its own storage that nothing else can write to, so anyone sending a transaction to the computer knows exactly what the result will be. (Most blockchains only have one program, like Bitcoin. Others have multiple programs that can call each other, like Ethereum.) This shared, unforgeable platform can be used to coordinate interactions between individuals, corporations, or other entities. This technology gives mankind a new superpower: we can interact with anyone on the planet with predictable results and near-zero transaction costs. Interactions that only involve information, like financial markets, can be guaranteed to follow the rules of the blockchain, which will eliminate all financial middlemen you pay fees to today. Real world interactions can't be governed by software, but they can be guided by software. Reputation systems that run on blockchains will tell you exactly how likely you are to be satisfied with a real world interaction, so you can interact with complete strangers who live anywhere on the planet. I think most trade will be blockchain-mediated in the near future.
    - aliakhtar 11y ago
      Great essay. Now, can you point out which of those use cases can't be done with regular USD, if someone like Paypal released an API? Edit: I also disagree with 'reputation based blockchain'. Reputation based anything online is easy to beat, and given the massive amount of scams in bitcoin, it clearly doesn't work.
      - natrius 11y ago
        PayPal collects fees. They also restrict access to their platform and funds held on the platform. I am not talking about currency. Let's pretend the world will run on dollars indefinitely. Blockchains grease the skids of trade. You will trade with far more individual strangers than you do today. You will trade in new ways that weren't possible before blockchains let us encode the rules for interactions in a world computer. Blockchains will reshape our world. I think our currencies will be defined by blockchains as well, but don't get distracted just because you don't believe that particular bit. Blockchains are bigger than currency.
        deleted 11y ago
        [deleted]
        aliakhtar 11y ago
        > PayPal collects fees. So do miners. Again, you haven't really given me any specific use cases, you've just made some vague statements about how blockchains will revolutionize everything. If you mean smart contracts, they can be done more efficiently with a centralized service, without using a decentralized blockchain.
  - javert 11y ago
    It lets you keep track of who has what bitcoins without having to trust a third party (bank, PayPal, etc.). That eliminates counterparty risk, which is a big deal. In particular, it creates an international payment system that is resilient to government interference. Also, that there is a strict cap of 21 million bitcoins. All governments eventually manipulate their currency by expanding the supply, so that's a big deal in terms of the unique financial properties it has as an asset.
    - aliakhtar 11y ago
      > In particular, it creates an international payment system that is resilient to government interference. There we are back to what I said, > I still don't understand the use case of a decentralized ledger, other than for illegal uses.
      - dragonwriter 11y ago
        Not all acts of government are legal (even by the laws applicable to that government); often there is a remedial mechanism available for illegal government interference, but parties may still prefer a process which is resistant to such interference from the outset, particularly when engaging in activities (even lawful ones) where one or more of the governments involved have shown an interest in interference in the past. With international actions, there is also the additional concern that, with illegal (from the point of view of the law applicable where the transaction occurs) interference by some governments with actions involving foreigners that occur in other jurisdictions, there is less (if any) effective individual remedy than there would be with purely-domestic interference, and any remedy would be state-to-state with significant geopolitical ramifications. I'm not a bitcoin fan, but I can certainly see at least conceptual utility in a mechanism which is resilient against interference by outside parties (or failure or compromise of any single of the parties providing infrastructure.)
        aliakhtar 11y ago
        So, you are dumping tons of real CO2 into the atmosphere, to run an extremely inefficient ledger, which is largely used for illegal activities, because of some hypothetical dystopian future.
ghshephard 11y ago
I use bitcoin, a lot. I use it primarily to move money between countries quickly, and inexpensively. Doing a bank transfer takes 3 days, and a $20 cable fee. Using Bitcoin is pretty much instant, and costs a few pennies. I've been using it for about 9 months, and I've yet to run into any snags. If Bitcoin performed exactly as it does today, from now on, I couldn't be any happier.
- cherioo 11y ago
  How do you do that? Last time I checked major bitcoin exchanges takes several to withdraw money. Coinbase has a instant buy/sell but I thought that only works in US. Also, does it really cost pennies? Do you really lose nothing going from fiat to bitcoin to fiat?
  - ghshephard 11y ago
    You are right that I lose 1.9% fee (coinhacko) purchasing bitcoin. Would be great to see more competition there. xfers is pretty instant in singapore with a FAST transfer from the local banks. The bitcoin transfer itself is pennies, but the challenge is getting local currency into bitcoin for a small amount of money. Though - the spread on simply buying US currency is pretty big as well.
- wsxcde 11y ago
  What do you do with your bitcoins after you "move them to another country"? It would seem you still have to convert to normal currency and that is by no means instant. What about the volatility? If you really want quick transfers you have to "hodl" bitcoins and that means you have lost something like 40% in the last 9 months.
  - corv 11y ago
    Works fine for me without holding. The price doesn't change much in the 30 minutes it takes to exchange. The swings of EUR/USD are larger in the days it takes to make a traditional transaction. Converting to currency is instant here and so are intranational bank transactions. It's also possible to pay utilities with BTC. Cheaper and faster is enough to win me over regardless of historical price development.
brighton36 11y ago
Because blockchains work, there is an incentive to join the longest chain. Since Bitcoin was first, all other competing blockchains merely exist for miners to sell tokens to greater fools. Thus, Bitcoin FTW. If you need immutability for your app, you'll be getting it by building on top of bitcoin. The transaction counts, market cap, and energy consumption of the Blockchain market reflect this view
- davidgerard 11y ago
  > Since Bitcoin was first, all other competing blockchains merely exist for miners to sell tokens to greater fools. Please explain how this argument does not also apply to Bitcoin, 'cos as far as I can tell at present it does. That altcoins are even scammier does not somehow mean Bitcoin is free of the same problems despite being first.
colordrops 11y ago
You haven't really said anything at all to support your comment. You merely trash bitcoin then leave it at that without any explanation or facts.

by themgt 11y ago

javert 11y ago

> some mew - perhaps maybe with a lot of further innovation - blockchain inspired tech There is no other way to get a decentralized global ledger. Well, if there is, it would be a huge discovery, just like bitcoin was. > It's become beyond obvious that existing Bitcoin blockchain technology has no real ability to scale Once you have the ledger, you don't need to put every transaction on it. Lots of them can happen off the chain. So yeah, your "obvious" is another word for "wrong".

aliakhtar 11y ago
> Once you have the ledger We've had ledgers for quite a while, bitcoin wasn't the first digital ledger. I still don't understand the use case of a decentralized ledger, other than for illegal uses.
- natrius 11y ago
  You're in for a treat, then. A blockchain is a world computer. Each program on the computer has its own storage that nothing else can write to, so anyone sending a transaction to the computer knows exactly what the result will be. (Most blockchains only have one program, like Bitcoin. Others have multiple programs that can call each other, like Ethereum.) This shared, unforgeable platform can be used to coordinate interactions between individuals, corporations, or other entities. This technology gives mankind a new superpower: we can interact with anyone on the planet with predictable results and near-zero transaction costs. Interactions that only involve information, like financial markets, can be guaranteed to follow the rules of the blockchain, which will eliminate all financial middlemen you pay fees to today. Real world interactions can't be governed by software, but they can be guided by software. Reputation systems that run on blockchains will tell you exactly how likely you are to be satisfied with a real world interaction, so you can interact with complete strangers who live anywhere on the planet. I think most trade will be blockchain-mediated in the near future.
  - aliakhtar 11y ago
    Great essay. Now, can you point out which of those use cases can't be done with regular USD, if someone like Paypal released an API? Edit: I also disagree with 'reputation based blockchain'. Reputation based anything online is easy to beat, and given the massive amount of scams in bitcoin, it clearly doesn't work.
    - natrius 11y ago
      PayPal collects fees. They also restrict access to their platform and funds held on the platform. I am not talking about currency. Let's pretend the world will run on dollars indefinitely. Blockchains grease the skids of trade. You will trade with far more individual strangers than you do today. You will trade in new ways that weren't possible before blockchains let us encode the rules for interactions in a world computer. Blockchains will reshape our world. I think our currencies will be defined by blockchains as well, but don't get distracted just because you don't believe that particular bit. Blockchains are bigger than currency.
      - deleted 11y ago
        [deleted]
      - aliakhtar 11y ago
        > PayPal collects fees. So do miners. Again, you haven't really given me any specific use cases, you've just made some vague statements about how blockchains will revolutionize everything. If you mean smart contracts, they can be done more efficiently with a centralized service, without using a decentralized blockchain.
- javert 11y ago
  It lets you keep track of who has what bitcoins without having to trust a third party (bank, PayPal, etc.). That eliminates counterparty risk, which is a big deal. In particular, it creates an international payment system that is resilient to government interference. Also, that there is a strict cap of 21 million bitcoins. All governments eventually manipulate their currency by expanding the supply, so that's a big deal in terms of the unique financial properties it has as an asset.
  - aliakhtar 11y ago
    > In particular, it creates an international payment system that is resilient to government interference. There we are back to what I said, > I still don't understand the use case of a decentralized ledger, other than for illegal uses.
    - dragonwriter 11y ago
      Not all acts of government are legal (even by the laws applicable to that government); often there is a remedial mechanism available for illegal government interference, but parties may still prefer a process which is resistant to such interference from the outset, particularly when engaging in activities (even lawful ones) where one or more of the governments involved have shown an interest in interference in the past. With international actions, there is also the additional concern that, with illegal (from the point of view of the law applicable where the transaction occurs) interference by some governments with actions involving foreigners that occur in other jurisdictions, there is less (if any) effective individual remedy than there would be with purely-domestic interference, and any remedy would be state-to-state with significant geopolitical ramifications. I'm not a bitcoin fan, but I can certainly see at least conceptual utility in a mechanism which is resilient against interference by outside parties (or failure or compromise of any single of the parties providing infrastructure.)
      - aliakhtar 11y ago
        So, you are dumping tons of real CO2 into the atmosphere, to run an extremely inefficient ledger, which is largely used for illegal activities, because of some hypothetical dystopian future.

ghshephard 11y ago

I use bitcoin, a lot. I use it primarily to move money between countries quickly, and inexpensively. Doing a bank transfer takes 3 days, and a $20 cable fee. Using Bitcoin is pretty much instant, and costs a few pennies. I've been using it for about 9 months, and I've yet to run into any snags. If Bitcoin performed exactly as it does today, from now on, I couldn't be any happier.

cherioo 11y ago
How do you do that? Last time I checked major bitcoin exchanges takes several to withdraw money. Coinbase has a instant buy/sell but I thought that only works in US. Also, does it really cost pennies? Do you really lose nothing going from fiat to bitcoin to fiat?
- ghshephard 11y ago
  You are right that I lose 1.9% fee (coinhacko) purchasing bitcoin. Would be great to see more competition there. xfers is pretty instant in singapore with a FAST transfer from the local banks. The bitcoin transfer itself is pennies, but the challenge is getting local currency into bitcoin for a small amount of money. Though - the spread on simply buying US currency is pretty big as well.
wsxcde 11y ago
What do you do with your bitcoins after you "move them to another country"? It would seem you still have to convert to normal currency and that is by no means instant. What about the volatility? If you really want quick transfers you have to "hodl" bitcoins and that means you have lost something like 40% in the last 9 months.
- corv 11y ago
  Works fine for me without holding. The price doesn't change much in the 30 minutes it takes to exchange. The swings of EUR/USD are larger in the days it takes to make a traditional transaction. Converting to currency is instant here and so are intranational bank transactions. It's also possible to pay utilities with BTC. Cheaper and faster is enough to win me over regardless of historical price development.

brighton36 11y ago

Because blockchains work, there is an incentive to join the longest chain. Since Bitcoin was first, all other competing blockchains merely exist for miners to sell tokens to greater fools. Thus, Bitcoin FTW. If you need immutability for your app, you'll be getting it by building on top of bitcoin. The transaction counts, market cap, and energy consumption of the Blockchain market reflect this view

davidgerard 11y ago
> Since Bitcoin was first, all other competing blockchains merely exist for miners to sell tokens to greater fools. Please explain how this argument does not also apply to Bitcoin, 'cos as far as I can tell at present it does. That altcoins are even scammier does not somehow mean Bitcoin is free of the same problems despite being first.

colordrops 11y ago

You haven't really said anything at all to support your comment. You merely trash bitcoin then leave it at that without any explanation or facts.