Bitcoin not for me, says Bill Gates(bbc.com)
bbc.com
Bitcoin not for me, says Bill Gates
https://www.bbc.com/news/technology-56195869
182 comments
You can think of Bitcoin more as a settlement layer. Think of it differently: while sending $5 for a $30 fee makes no sense, sending $1B for a $30 fee makes a ton of sense. The average consumer does not necessarily need the settlement functionality afforded with an individual ledger entry in a global blockchain. Consumer payments will take place on 2nd layer solutions like the Lightning Network or on centralized platforms (like Cash App), but those platforms themselves will settle balances on the Bitcoin blockchain.
But now, because of Bitcoin, you as an individual can interact with, audit, and build technology within the world of finance without going through the traditional gatekeepers of our current financial system.
But now, because of Bitcoin, you as an individual can interact with, audit, and build technology within the world of finance without going through the traditional gatekeepers of our current financial system.
So build a non-distributed trust-based system based over top BTC instead of something else? Gold would be a much better thing to do that with?
" without going through the traditional gatekeepers of our current financial system. "
You can make create a bank anytime you want and rules are in place for regulatory reasons. If BTC ever becomes important, the same rules will apply.
So:
1) Currency -> Too expensive. 2) 2cnd layer -> Gold is better. 3) Store of value -> almost every classical store of value is better.
These are are all 'how we can make BTC possibly useful' instead of 'why BTC is useful'.
It doesn't tick any of the boxes.
There will be public ways to short BTC soon I wonder what kind of effect that will have.
" without going through the traditional gatekeepers of our current financial system. "
You can make create a bank anytime you want and rules are in place for regulatory reasons. If BTC ever becomes important, the same rules will apply.
So:
1) Currency -> Too expensive. 2) 2cnd layer -> Gold is better. 3) Store of value -> almost every classical store of value is better.
These are are all 'how we can make BTC possibly useful' instead of 'why BTC is useful'.
It doesn't tick any of the boxes.
There will be public ways to short BTC soon I wonder what kind of effect that will have.
We used to have that system on top of gold but we killed it a bit over 40 years ago. It was called the gold standard and most of the world ran on it.
We need a version of it where the powers can't just say screw it, let's can it and make a bunch of new money out of thin air and you're all forced to accept it and use it.
We need a version of it where the powers can't just say screw it, let's can it and make a bunch of new money out of thin air and you're all forced to accept it and use it.
Yes, of course.
The notion of making a currency based on a precious metal has one advantage only: fixed supply. And this is not much of an advantage.
As far as currencies go, if you want such a currency, then based one off of Gold, not BTC.
If you want a store of value, that's easy - just buy gold if that's what you want.
If you don't trust the Central Bank wherever you are, the don't hold that currency. Buy other currencies, real estate, commodities etc.
There's no point in BTC.
The notion of making a currency based on a precious metal has one advantage only: fixed supply. And this is not much of an advantage.
As far as currencies go, if you want such a currency, then based one off of Gold, not BTC.
If you want a store of value, that's easy - just buy gold if that's what you want.
If you don't trust the Central Bank wherever you are, the don't hold that currency. Buy other currencies, real estate, commodities etc.
There's no point in BTC.
Have fun staying poor if you gonna short Bitcoin.
All of these discussions always devolve to “to the moon”. That’s not exactly a compelling response to technical concerns.
See my other comment which can be summarized for this response as: technical/fundamental superiority has never been, and is currently not, a silver bullet to proliferation of a technology, or the success of a company. That is at an all time low, I believe.
> you as an individual can interact with, audit, and build technology within the world of finance without going through the traditional gatekeepers of our current financial system.
A big reason there are gatekeepers is the regulation. I get the appeal of framing it as if the little guy can now participate, but isn't it irresponsible to not even ask oneself why financial markets are regulated in the first place?
A big reason there are gatekeepers is the regulation. I get the appeal of framing it as if the little guy can now participate, but isn't it irresponsible to not even ask oneself why financial markets are regulated in the first place?
>but isn't it irresponsible to not even ask oneself why financial markets are regulated in the first place?
That's an entirely political question that has nothing to do with efficacy of a financial system or cryptocurrency.
That's an entirely political question that has nothing to do with efficacy of a financial system or cryptocurrency.
So that the rich have more control than the poor, under the guise of protecting the little guy mostly, nowadays.
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This is an intentional decision on the part of the developers of Bitcoin Core, although I do not understand why.
The original plan for Bitcoin envisioned larger blocks to keep transactions fees down.
This plan has been realized in "Bitcoin Cash" which, although technically a fork, strays less from the original bitcoin design than Core now does.
The original plan for Bitcoin envisioned larger blocks to keep transactions fees down.
This plan has been realized in "Bitcoin Cash" which, although technically a fork, strays less from the original bitcoin design than Core now does.
That is indeed the claim made by Bitcoin Cash promoters. However it’s not particularly convincing to treat Satoshi’s vision as the ultimate truth, and borders on religious. Shouldn’t developers who have now worked with this technology for a decade have a greater understanding, now? One of Bitcoin’s greatest attributes is that it can evolve and be updated!
Furthermore BCH has seen virtually no transactions, especially compared to bitcoin, so all it’s claims of superiority are untested. This makes people who proclaim them as facts quite suspect.
For example - since you don’t understand why - big blocks centralize. “Just make the blocks bigger” means more and more storage of a permanent ledger, which means less and less people can run a node. Of course, since there have historically been virtually no transactions on BCH, it’s easy to throw this consideration to the wind and claim the solution is infallible.
Is that the future we want, when even when pushed to it’s maximum vanilla on-chain cryptocurrency struggles to compete with Visa or Coinbase for usability? Or should we strive to maximize what cryptocurrency really delivers on: uncensorable settlement of a stateless store of value?
Furthermore BCH has seen virtually no transactions, especially compared to bitcoin, so all it’s claims of superiority are untested. This makes people who proclaim them as facts quite suspect.
For example - since you don’t understand why - big blocks centralize. “Just make the blocks bigger” means more and more storage of a permanent ledger, which means less and less people can run a node. Of course, since there have historically been virtually no transactions on BCH, it’s easy to throw this consideration to the wind and claim the solution is infallible.
Is that the future we want, when even when pushed to it’s maximum vanilla on-chain cryptocurrency struggles to compete with Visa or Coinbase for usability? Or should we strive to maximize what cryptocurrency really delivers on: uncensorable settlement of a stateless store of value?
You don't really need to believe in anyone's "vision", you just need to look at what's happening, right now. BTC's transactions fees are very high, and transactions are often stuck in the mempool for quite some time.
That does not happen with BCH.
It's all very well claiming that BTC is more "decentralized", but if you can't actually use it to cheaply and quickly transact, then what is the point?
That does not happen with BCH.
It's all very well claiming that BTC is more "decentralized", but if you can't actually use it to cheaply and quickly transact, then what is the point?
That doesn’t happen with BCH because they haven’t saturated their blocks. That doesn’t mean it’s a better approach.
I can decide to spend all my retirement savings over the next two years and, for a while, it would be quite nice. Should I then ask why anyone even bothers to save?
I can decide to spend all my retirement savings over the next two years and, for a while, it would be quite nice. Should I then ask why anyone even bothers to save?
Why do you think the BCH blocks aren't filling up?
Maybe it has something to do with the increased block size?
Maybe it has something to do with the increased block size?
Bitcoin Cash and Ethereum both exceed bitcoin's transaction throughput now. Ethereum has around 3x the transaction throughput.
https://bitinfocharts.com/comparison/transactions-btc-eth-bc...
https://bitinfocharts.com/comparison/transactions-btc-eth-bc...
> “Just make the blocks bigger” means more and more storage of a permanent ledger, which means less and less people can run a node."
This argument was already debunked by the Bitcoin community from the beginning before the hard fork even happened though - Moore's Law. Disk space rises and price goes down as time goes by - it really wasn't ever an issue. Even 2mb, 4mb would've been enough for the next few years.
This argument was already debunked by the Bitcoin community from the beginning before the hard fork even happened though - Moore's Law. Disk space rises and price goes down as time goes by - it really wasn't ever an issue. Even 2mb, 4mb would've been enough for the next few years.
If the blocks just keep increasing in size to accommodate small fees then there won't by any (or just a tiny) reward for miners once the block-reward runs out. This will make the hashrate go down significantly and make Bitcoin as a blockchain very unsecure and vurnable.
There was a site that ran the calculations. Assuming terabyte sized blocks you would be able to fund multiple $20 million dollar data centers per year. By fund I mean build new ones.
We’re outpacing Moore’s law
2mb or 4mb would have helped, yes. I don’t think it would have been too big of a problem, but I don’t think it would help much either. We’d just be back against the limit.
If we want to really succeed we need innovation.
2mb or 4mb would have helped, yes. I don’t think it would have been too big of a problem, but I don’t think it would help much either. We’d just be back against the limit.
If we want to really succeed we need innovation.
The innovation already happened.
There is no technical reason why multiple orders of magnitude more transactions couldn't be on the bitcoin chain if it wasn't intentionally crippled.
If your internet connection had the throughput of bitcoin it would take you 36 minutes to load reddit.com
Anyone can rent a VPS for $10 USD that can download the entire chain in under an hour and a half.
There are 14TB single hard drives out now, which would be able to store the bitcoin chain for the next 300 years. One hard drive, 300 years.
The only part that doesn't work is the $31.50 average transaction fee.
There is no technical reason why multiple orders of magnitude more transactions couldn't be on the bitcoin chain if it wasn't intentionally crippled.
If your internet connection had the throughput of bitcoin it would take you 36 minutes to load reddit.com
Anyone can rent a VPS for $10 USD that can download the entire chain in under an hour and a half.
There are 14TB single hard drives out now, which would be able to store the bitcoin chain for the next 300 years. One hard drive, 300 years.
The only part that doesn't work is the $31.50 average transaction fee.
Wow, I just checked - you weren’t kidding. 14TB for ~300 USD. Any person living in a third world country and bought BTC 2 years ago would be able to afford that - decentralization isn’t an issue. But yeah, this just further proves what a weak argument it was for BTC to go with small blocks.
> big blocks centralize
This math never checks out. I see this said and no one can ever show me numbers where it makes sense.
900KB Every 10 minutes is the actual throughput. This works out to 47.3GB per year.
For the cost of -5 transactions-, you can buy a hard drive that will last -184 years- before it fills up. The only people that even need the full chain are miners, exchanges and online wallets.
5 transactions -> enough space to store the current throughput for 184 years. $31 average transaction fees make bitcoin useless for anything other than speculation.
Bitcoin Cash already sustains more transactions than bitcoin. Ethereum has 3x the transaction throughput consistently. What math are you doing where you think any of this is a problem?
This math never checks out. I see this said and no one can ever show me numbers where it makes sense.
900KB Every 10 minutes is the actual throughput. This works out to 47.3GB per year.
For the cost of -5 transactions-, you can buy a hard drive that will last -184 years- before it fills up. The only people that even need the full chain are miners, exchanges and online wallets.
5 transactions -> enough space to store the current throughput for 184 years. $31 average transaction fees make bitcoin useless for anything other than speculation.
Bitcoin Cash already sustains more transactions than bitcoin. Ethereum has 3x the transaction throughput consistently. What math are you doing where you think any of this is a problem?
And this nonsense doublespeak is why Ethereum 2.0 (proof of stake, sharding for real scaling) will get all my investment for the next cycle and why it will eventually be the dominant cryptocurrency.
Bitcoin was a beautiful idea but it was ruined when it refused to scale. Like Brian Armstrong, the ceo of Coinbase has said, Bitcoin broke my heart when it chose that path.
https://cryptodaily.co.uk/2017/11/bitcoin-broke-coinbase-ceo...
Bitcoin was a beautiful idea but it was ruined when it refused to scale. Like Brian Armstrong, the ceo of Coinbase has said, Bitcoin broke my heart when it chose that path.
https://cryptodaily.co.uk/2017/11/bitcoin-broke-coinbase-ceo...
BCH has actually been doing more transactions than Bitcoin recently.
If Bitcoin can evolve and be updated, one would hope it could evolve to a larger block size.
Maybe super super large blocks would add some centralizing forces. But 8/16/32MB? Not at all.
If Bitcoin can evolve and be updated, one would hope it could evolve to a larger block size.
Maybe super super large blocks would add some centralizing forces. But 8/16/32MB? Not at all.
Bitcoin added 66GB to it’s permanent ledger in the last year. Saturated 16Mb blocks would add a Tb a year.
It’s hard to see how that won’t be centralizing after a few years and people need 3TB just to get started. Not to mention the task of syncing and transferring on a less than perfect connection. Yes, storage does get cheaper, but cryptocurrency is outpacing it dramatically.
And even with these big blocks, we’d have nowhere near a competitive solution, less than 7% of Visa volume. “Raise the block size again” would only get so far. We need something better. I’m not sure lightning is the answer, but at least it shows such a thing is possible. We don’t need big blocks.
And even with these big blocks, we’d have nowhere near a competitive solution, less than 7% of Visa volume. “Raise the block size again” would only get so far. We need something better. I’m not sure lightning is the answer, but at least it shows such a thing is possible. We don’t need big blocks.
That's fine. Not every home user needs to run a full node. That is a, frankly obvious, misconception that the current maintainers have saddled themselves with.
As others have alluded to, Satoshi specifically predicted that bitcoin would be run by large datacenters. Is it "religion" to prefer the vision of the inventor of one of the most brilliant innovations of a century? A vision that has proven itself against all reason and criticism (often coming from the very same people who are now the maintainers).
With all due respect to the core developers, they are a bunch of crypto geeks (which is fine), but Satoshi was a genius who also understood economy, psychology and a bunch of other stuff, which is why bitcoin exists and is an incredible success.
As others have alluded to, Satoshi specifically predicted that bitcoin would be run by large datacenters. Is it "religion" to prefer the vision of the inventor of one of the most brilliant innovations of a century? A vision that has proven itself against all reason and criticism (often coming from the very same people who are now the maintainers).
With all due respect to the core developers, they are a bunch of crypto geeks (which is fine), but Satoshi was a genius who also understood economy, psychology and a bunch of other stuff, which is why bitcoin exists and is an incredible success.
When you say that Satoshi predicted that Bitcoin would be run by large datacenters, are you referring to the mining? Or the nodes? Anyways, I'd like to see this actual post you're referencing (look at https://satoshi.nakamotoinstitute.org/). I've read a lot of his posts and never seen this mentioned. It also seems very anti-Bitcoin.
I'm not saying that every home user needs to run a full node though.
I'm not saying that every home user needs to run a full node though.
Nodes. https://bitcointalk.org/index.php?topic=532.msg6306#msg6306
"The current system where every user is a network node is not the intended configuration for large scale. That would be like every Usenet user runs their own NNTP server. The design supports letting users just be users. The more burden it is to run a node, the fewer nodes there will be. Those few nodes will be big server farms. The rest will be client nodes that only do transactions and don't generate."
"The current system where every user is a network node is not the intended configuration for large scale. That would be like every Usenet user runs their own NNTP server. The design supports letting users just be users. The more burden it is to run a node, the fewer nodes there will be. Those few nodes will be big server farms. The rest will be client nodes that only do transactions and don't generate."
1.5KB/s
That's the current throughput of bitcoin. When the ridiculousness of that is pointed out, why do people start talking about Visa's volume?
Bitcoin is unusable for regular transactions.
A single transaction costs as much as an -entire hard drive- that can store the current chain multiple times over. After 11 years the chain takes up $6 of hard drive space.
The only people that need to sync with the chain are miners, exchanges, online wallets and enthusiasts.
That's the current throughput of bitcoin. When the ridiculousness of that is pointed out, why do people start talking about Visa's volume?
Bitcoin is unusable for regular transactions.
A single transaction costs as much as an -entire hard drive- that can store the current chain multiple times over. After 11 years the chain takes up $6 of hard drive space.
The only people that need to sync with the chain are miners, exchanges, online wallets and enthusiasts.
Both choices lead to “centralizing”. With the existing throughput of BTC, were it to be adopted by the entire world, each person would get one transaction per several decades. This means that virtually all transactions must be done off chain through hubs.
I think it is important to realize how these huge policy decisions are left in the hands of a few individuals too.
I think it is important to realize how these huge policy decisions are left in the hands of a few individuals too.
Citation needed, last time I looked into this, the internet could handle 8mb blocks before a significant number of nodes %4 percent wouldn't be able to mint blocks in time.
What's the current research show?
What's the current research show?
> The original plan for Bitcoin envisioned larger blocks to keep transactions fees down.
The plan was always for security to be provided by transaction fees in the long term, as block subsidy dwindles to insignificance. But you just can't get reasonable security from 1-cent tx fees.
The plan was always for security to be provided by transaction fees in the long term, as block subsidy dwindles to insignificance. But you just can't get reasonable security from 1-cent tx fees.
Well, traditional payment systems provide sufficient security for lower fees (though not 1 cent, i believe).
Hundreds of millions of transactions a day at 25 cent in fees per tx lead to much higher total fees than 300,000 transactions at $30 fees per tx.
Here is a proposal for terabyte blocks:
https://blog.vermorel.com/journal/2017/12/17/terabyte-blocks...
It works out just fine and there will enough profit from sub cent transaction fees to have thousands of competing data centers. At that point you could even declare the system to be more cost effective than any other kind of financial infrastructure.
Any complaints against Bitcoin's excessive energy consumption would be void, except this is not the future that Bitcoin HODLers want so it's incredibly difficult to see how their theories would become true in the future.
https://blog.vermorel.com/journal/2017/12/17/terabyte-blocks...
It works out just fine and there will enough profit from sub cent transaction fees to have thousands of competing data centers. At that point you could even declare the system to be more cost effective than any other kind of financial infrastructure.
Any complaints against Bitcoin's excessive energy consumption would be void, except this is not the future that Bitcoin HODLers want so it's incredibly difficult to see how their theories would become true in the future.
Increasing the block size makes the blockchain harder to decentralize, and in the end, it doesn't solve the problem, but just kicks the can down the road. It just doesn't make sense to store every coffee payment forever in the blockchain. That's why the focus is on security and decentralization, and let second layer solutions deal with the payments problem (privacy, latency, throughput). That's the plan for now, until someone comes up with a better idea.
The point of Bitcoin now is not really payments. But it is a store of value. In that case, 30$ is not much for ability to send it anywhere in the world within minutes and store it for free as long as you want. Compare that with gold, or any other asset.
People supporting Bitcoin "Cash" are of the view that Bitcoin should be used for everyday transactions. They are really minority.
People supporting Bitcoin "Cash" are of the view that Bitcoin should be used for everyday transactions. They are really minority.
> The point of Bitcoin now is not really payments. But it is a store of value.
Let's stop calling it crypto "currency" then since the point of any currency is to act as a medium of exchange.
> In that case, 30$ is not much for ability to send it anywhere in the world within minutes and store it for free as long as you want. Compare that with gold, or any other asset.
You can trade assets much more easily on highly sophisticated futures markets, much faster, cheaper and with higher liquidity. Too complex? You can buy an ETF that tracks a single asset like gold or a mix of assets like bonds, equities etc. There is nothing that bitcoin claims to be that isn't done better by existing financial instruments, except "decentralization".
Let's stop calling it crypto "currency" then since the point of any currency is to act as a medium of exchange.
> In that case, 30$ is not much for ability to send it anywhere in the world within minutes and store it for free as long as you want. Compare that with gold, or any other asset.
You can trade assets much more easily on highly sophisticated futures markets, much faster, cheaper and with higher liquidity. Too complex? You can buy an ETF that tracks a single asset like gold or a mix of assets like bonds, equities etc. There is nothing that bitcoin claims to be that isn't done better by existing financial instruments, except "decentralization".
Cryptocurrency is probably more of a third bucket - it's kind of like a hybrid.
You have fiat - dollars, etc.
You have gold, silver, etc.
You have cyptocurrencies like Bitcoin. Some are more like fiat, some are more like gold, some are hybrids, like Bitcoin.
Gold can be used as a medium of exchange for example and as a currency.
You have fiat - dollars, etc.
You have gold, silver, etc.
You have cyptocurrencies like Bitcoin. Some are more like fiat, some are more like gold, some are hybrids, like Bitcoin.
Gold can be used as a medium of exchange for example and as a currency.
The problem with Bitcoin is that there is literally no competition between currency and store of value except the block size. If anything, Bitcoin being used as a currency adds legitimacy and thus would strengthen Bitcoin over the long term. People who dismiss usage of a cryptocurrency as a means of payment really don't have the long term picture of the currency in mind. They're just in it to make a quick buck.
>> People who dismiss usage of a cryptocurrency as a means of payment really don't have the long term picture of the currency in mind.
Maybe. Currently Bitcoin is not suitable for using it as currency or medium of exchange. Second layer solutions can help with the speed (10 minutes confirmation time) and throughput issues (transactions per second). That and the fact that it is not very user friendly makes it difficult to be used as replacement for fiat at this time.
Maybe. Currently Bitcoin is not suitable for using it as currency or medium of exchange. Second layer solutions can help with the speed (10 minutes confirmation time) and throughput issues (transactions per second). That and the fact that it is not very user friendly makes it difficult to be used as replacement for fiat at this time.
Historically, I am not long cryptocurrency, for the record.
But I disagree. What makes "Bitcoin", or, if you'll allow, cryptocurrency keep becoming more popular isn't just hype. There's a lot, but I feel like there'd be more.
No, it's because everyone has their own reason for using it. Some people want to hedge against x, and use Bitcoin. Some want to get paid but not subject their users to ads, and use BAT.
Some want to exchange small amounts with friends on the net, or for food, and use Bitcoin Cash, or Litecoin, or whatever's currently got a stable-ish price, because it's that easy to swap in and out of cryptocurrencies.
Cardano, for all of its technical flaws, has sentiment behind it to stand stable. Perhaps like Bitcoin this will come at the dismay of the technical community - or perhaps more people will realize with the current speed of information proliferation, we truly do live in a partially post-truth world. Sentiment is ALL that matters for these matters.
But I disagree. What makes "Bitcoin", or, if you'll allow, cryptocurrency keep becoming more popular isn't just hype. There's a lot, but I feel like there'd be more.
No, it's because everyone has their own reason for using it. Some people want to hedge against x, and use Bitcoin. Some want to get paid but not subject their users to ads, and use BAT.
Some want to exchange small amounts with friends on the net, or for food, and use Bitcoin Cash, or Litecoin, or whatever's currently got a stable-ish price, because it's that easy to swap in and out of cryptocurrencies.
Cardano, for all of its technical flaws, has sentiment behind it to stand stable. Perhaps like Bitcoin this will come at the dismay of the technical community - or perhaps more people will realize with the current speed of information proliferation, we truly do live in a partially post-truth world. Sentiment is ALL that matters for these matters.
Why the hell would you want a store of value that's perceived "value" fluctuates so much?
Why would you join the website when it has no members and its whole value proposition is that with a lot of members it would be very useful?
Blockchain is currently being bootstrapped, but it's been criticized for not already having been bootstrapped.
Blockchain is currently being bootstrapped, but it's been criticized for not already having been bootstrapped.
Bitcoin is over 12 years old. It's not being bootstraped. It's instability is inherent to the fact that it's value is based entirely on speculation
> Bitcoin is over 12 years old. It's not being bootstraped.
That's just your (incorrect) opinion. Bitcoin's price discovery is clearly not done.
Even if you thought it is nothing but a complete scam, well then its true value is zero, and since it hasn't reached that, its price discovery is still going on.
That's just your (incorrect) opinion. Bitcoin's price discovery is clearly not done.
Even if you thought it is nothing but a complete scam, well then its true value is zero, and since it hasn't reached that, its price discovery is still going on.
> Compare that with gold, or any other asset.
Depends on what you're trying to do of course. If you're looking to physically send gold somewhere, you're spot on.
I can buy and sell GLD at a zero transaction cost. I can buy $100,000 of GLD at zero transaction cost, then sell it, then repeat that a hundred times.
What will Coinbase charge for the same thing in Bitcoin for $10 million worth of transactions?
I can also store that virtual gold purchase at a low cost indefinitely (GLD has a 0.4% annual fee that it extracts; IAU is 0.25%). After you account for fees, that is likely to compare well with using a service like Coinbase to store your Bitcoin.
Depends on what you're trying to do of course. If you're looking to physically send gold somewhere, you're spot on.
I can buy and sell GLD at a zero transaction cost. I can buy $100,000 of GLD at zero transaction cost, then sell it, then repeat that a hundred times.
What will Coinbase charge for the same thing in Bitcoin for $10 million worth of transactions?
I can also store that virtual gold purchase at a low cost indefinitely (GLD has a 0.4% annual fee that it extracts; IAU is 0.25%). After you account for fees, that is likely to compare well with using a service like Coinbase to store your Bitcoin.
Coinbase ≠ the Bitcoin network.
Ask the fees it would cost if years you were buying from someone, 1:1, privately.
Ask the fees it would cost if years you were buying from someone, 1:1, privately.
I am in that minority.
It breaks my heart the way Blockstream was brought in to intentionally kneecap Bitcoin.
It breaks my heart the way Blockstream was brought in to intentionally kneecap Bitcoin.
You can choose to pay any fee you want. The higher you pay the more likely it is for a miner to pick your transaction for the next block. You can pay $3 right now to have your on-chain transaction confirmed within a day.
Then there's the lightning network, which allows you to transact BTC an infinite amount of times off-chain for next to 0 fees. I've used it countless time this year and the prior and have probably spent less than a dollar in fees total. A lot of crypto exchanges are implementing it too, which will drastically lower the fees on the overall network. Bitfinex has support for it right now. Kraken will support it this year
Then there's the lightning network, which allows you to transact BTC an infinite amount of times off-chain for next to 0 fees. I've used it countless time this year and the prior and have probably spent less than a dollar in fees total. A lot of crypto exchanges are implementing it too, which will drastically lower the fees on the overall network. Bitfinex has support for it right now. Kraken will support it this year
The Lightning Network has no chance of gaining mass-adoption. It has high start up and capital lock-up costs, proportional to on-chain transaction fees, which only grow as Bitcoin/LN adoption ramps up.
It has high upkeep costs, requiring you to have your LN node online to receive payments, and for your node to have access to the LN funds via a connection to the private keys, which is a security liability.
To monitor for fraudulent channel closes in order to be able to react in time to challenge them, it also requires you to have an always on-line node, or a trusted third party delegated to do that on your behalf. And if you want rapid/automated reaction to fraudulent channel closes, that node needs to have access to the private keys to your LN funds.
Then there are routing issues when the topography of the network changes with every transaction, and where the existence of routes is dependent on sufficient capital being locked up in channels.
There's a reason why there's 100 times more BTC locked up for use in Ethereum dApps than for use in the LN. Ethereum-based scalability solutions could, ironically, provide BTC with the scalability needed to gain mass-adoption as an instrument for peer-to-peer payments.
To monitor for fraudulent channel closes in order to be able to react in time to challenge them, it also requires you to have an always on-line node, or a trusted third party delegated to do that on your behalf. And if you want rapid/automated reaction to fraudulent channel closes, that node needs to have access to the private keys to your LN funds.
Then there are routing issues when the topography of the network changes with every transaction, and where the existence of routes is dependent on sufficient capital being locked up in channels.
There's a reason why there's 100 times more BTC locked up for use in Ethereum dApps than for use in the LN. Ethereum-based scalability solutions could, ironically, provide BTC with the scalability needed to gain mass-adoption as an instrument for peer-to-peer payments.
Can you be a miner & process your own payment?
Thanks! Genuinely didn’t know about these
>Can we stop pretending it’s a future payment system?
This is technology, why talk about it like it can't change and be improved upon? Bitcoin has serious flaws like having zero privacy but it has demonstrated a working foundation - transacting without an intermediary and being able to hold your own money is absolutely revolutionary. Even the way things are now, $30 is a low price to be able to avoid storing your net worth in malicious banks and government/corporation property
This is technology, why talk about it like it can't change and be improved upon? Bitcoin has serious flaws like having zero privacy but it has demonstrated a working foundation - transacting without an intermediary and being able to hold your own money is absolutely revolutionary. Even the way things are now, $30 is a low price to be able to avoid storing your net worth in malicious banks and government/corporation property
> My bank charges less for an international wire transfer.
This is a rich persons point of view, you have rich persons financial accounts and knowledge.
Also Australian's largest Bank's fees are often more in total than $30, perhaps you are transferring to your motherland of England? A small town in Africa is hard and costly.
https://www.commbank.com.au/international/fees-charges.html
This is a rich persons point of view, you have rich persons financial accounts and knowledge.
Also Australian's largest Bank's fees are often more in total than $30, perhaps you are transferring to your motherland of England? A small town in Africa is hard and costly.
https://www.commbank.com.au/international/fees-charges.html
> A small town in Africa is hard and costly.
And what does BTC solve in this case exactly? You think places that lack the infrastructure to receive a SWIFT transfer will use BTC for anything practical?
And what does BTC solve in this case exactly? You think places that lack the infrastructure to receive a SWIFT transfer will use BTC for anything practical?
BTC seems to have found a use in Nigeria as a means of dealing with inflation, and a USD shortage in the country.
https://finance.yahoo.com/news/nigeria-one-bitcoin-cost-68-2...
https://finance.yahoo.com/news/nigeria-one-bitcoin-cost-68-2...
It's 2.67 USD for a transaction to be confirmed quickly as of right now.
You misunderstand how the current economic system is built and functions. Bitcoin isn't the equivalent of VISA. Bitcoin is the equivalent of the fedwire.
1) it’s not 30$ for all transactions
2) how much time does your international wire transfer take to clear? can you do this transaction anywhere in the world where you have an internet connection?
For your last question, not only is the answer "Yes", I think the wire transfer wins on flexibility because there's several fallback options for when you don't have an internet connection.
If you want the ability to globally transfer funds the answer is no. Within a single relatively homogeneous economic zone, sure it is easy. Once you move beyond that it becomes a huge PITA.
When I bought my house here in the US, the wire transfer was quicker than it took me to drive across town to my real estate agent's office, and I sent it via fax.
hah. try sending a wire transfer from the US to Asia
For large transactions like buying a Tesla does it matter that the fees is $30. I wouldn’t use it for buying a coffee of course. But for high value products. Why not.
It certainly matters. Wiring 50k to buy a car or 500k to buy a house costs me literally zero, and maybe a few cents on the receiving end. Why would anyone be willing to pay 100x more?
You are comparing to someone paying with fiat money. For someone owning bitcoins suddenly paying with bitcoins for a Tesla becomes attractive.
No homo economicus would be willing to pay $500,030 for a house when they could pay $500,000.30. 99.99% of humans would be fine with that.
Go to a car dealership or real-estate agent and tell them they'll now have to pay $30 on every transaction, and see how it goes.
They would never pay it, they would just pass the cost on to the customer.
So the customer goes to another dealer? Knowing this the dealer doesn’t use it in the first place
> Why would anyone be willing to pay 100x more?
Transferring money across geographies is one of the prime use-cases for crypto these days.
Transferring money across geographies is one of the prime use-cases for crypto these days.
No, it is not. I've lived in several countries/continents in the past decade. So did many friends. We used traditional banks and newer players like Transferwise. Using BTC or any other shitcoin would have been less practical, riskier and more expensive, when not downright illegal (some countries control and limit capital outflows).
Riskier only because of the lack of experience of the people involved, and the UX gaps still being filled in - cryptocurrency is a very early-stage success(?) story of what will be a 1,000+ year journey.
You sound like a high priest of Bitcoin lol... “1000+ year journey”
How do you imagine money in 50, 500, 5000 years?
Lightning Network : https://www.coinhouse.com/coinhouse-academy/bitcoin/what-is-...
Come to think of it, do institutional stakeholders have an incentive to reduce these costs when they can value-add with lower tranasction fees within their platform for unified wallets on their platform?
I gladly make Bitcoin transactions regularly online for the same reason I use cash in person: privacy.
Everyone is selling data but they can't sell what they don't know. That is worth a premium to me.
Everyone is selling data but they can't sell what they don't know. That is worth a premium to me.
Can you explain the privacy argument to me?
Bitcoin is a massive public ledger, I have a local copy of literally every transaction ever made. How is that better for privacy?
You are anonymous until you are linked to your wallet.
Anyone who has transacted with you can do that, so then anything sent/received from that wallet address is linked to you.
You can get around this by having many wallets. If you don't reuse those wallets, then a counterparty cant directly identify your other transactions. That means you need to have your balance distributed among many wallets, in denominations small enough that they would be consumed in a single spend.
But - you need to get the funds into those wallets in the first place. You cant simply split up your wallet, as these wallets would be linked to each other via a common ancestor. Instead, you would need to receive from a 3rd party, but then they would be able to identify the transaction from that wallet as coming from you...
So to remain anonymous, you simply never transact with anyone other than yourself ;)
Anyone who has transacted with you can do that, so then anything sent/received from that wallet address is linked to you.
You can get around this by having many wallets. If you don't reuse those wallets, then a counterparty cant directly identify your other transactions. That means you need to have your balance distributed among many wallets, in denominations small enough that they would be consumed in a single spend.
But - you need to get the funds into those wallets in the first place. You cant simply split up your wallet, as these wallets would be linked to each other via a common ancestor. Instead, you would need to receive from a 3rd party, but then they would be able to identify the transaction from that wallet as coming from you...
So to remain anonymous, you simply never transact with anyone other than yourself ;)
Is this FUD or just a lack of understanding? Staying anonymous is very easy. You can choose between a number of ways to move coins into a separate address in an untraceable way. E.g. (1) CoinJoin transactions (which are natively supported in the protocol), (2) through Lightning, which is also an official extension, usable in production right now, or (3) using a third-party mixing service. Those are just off the top of my head.
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Knowledge a few years out of date I guess. Still counterparty issues with mixers, somewhat with coinjoin too, but lightning seems pretty cool.
Yes you can have privacy with bitcoin only if you never transact with it... lol
You're thinking of Monero. It is extremely difficult, risk-prone and expensive to be private with bitcoin.
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Move 2 million dollars.
> Can we stop pretending it’s a future payment system?
Exactly. There are other alt-coins that are better suited to this purpose, unlike Bitcoin is a complete failure in regards to this.
Exactly. There are other alt-coins that are better suited to this purpose, unlike Bitcoin is a complete failure in regards to this.
Downvoters: So is it better to send lots of Bitcoin including the high network fees all over the network then and also waste that money? There is a reason I said 'in regards to this'
While I am bullish on bitcoin and some cryptocurrencies in general, I've known that several HN folks here have been very bearish on cryptocurrencies since they always refer it to another ponzi scheme or a general scam. I guess on HN, one bad ICO spoils the bunch.
But at least give a response to this claim or a reason as to why this is 'wrong', rather than simply downvoting without a counter argument.
While I am bullish on bitcoin and some cryptocurrencies in general, I've known that several HN folks here have been very bearish on cryptocurrencies since they always refer it to another ponzi scheme or a general scam. I guess on HN, one bad ICO spoils the bunch.
But at least give a response to this claim or a reason as to why this is 'wrong', rather than simply downvoting without a counter argument.
You're referring to the BTC fork, which has artificially limited itself to 3-7 transactions per second.
I suggest you look into the BCH fork, which has 3,000 tps, and can scale much further as needed.
I suggest you look into the BCH fork, which has 3,000 tps, and can scale much further as needed.
Bitcoin is the solution for the biggest problem of mankind: inflation.
While economists are talking about how good it is, everybody else is complaining about prices of everything going up.
While economists are talking about how good it is, everybody else is complaining about prices of everything going up.
Inflation isn't a problem, it's a benefit.
With inflation it starts making sense to invest into human labor and knowledge instead of tangible physical things.
Progress accelerates and income distribution becomes less of a power law.
Inflation benefits you unless you're in the top 1 percent.
With inflation it starts making sense to invest into human labor and knowledge instead of tangible physical things.
Progress accelerates and income distribution becomes less of a power law.
Inflation benefits you unless you're in the top 1 percent.
> it starts making sense to invest into human labor and knowledge
Because that's definitely what happens when people hold a lot of money. They invest into human labour and knowledge.
Because that's definitely what happens when people hold a lot of money. They invest into human labour and knowledge.
>v when people hold a lot of money.
The point is that they don't. Money is supposed to be itchy. You're supposed to spend it.
When you spend money you are paying someone else's salary and that someone can spend money on things you provide and pay for your salary.
With deflation you basically get the minimum possible economy, which means lots of unemployed people. Their work isn't needed and by extension the person itself isn't needed either so we would be better off with the minimum number of people possible. That means heading straight to 0.
The point is that they don't. Money is supposed to be itchy. You're supposed to spend it.
When you spend money you are paying someone else's salary and that someone can spend money on things you provide and pay for your salary.
With deflation you basically get the minimum possible economy, which means lots of unemployed people. Their work isn't needed and by extension the person itself isn't needed either so we would be better off with the minimum number of people possible. That means heading straight to 0.
This sounds like trickle-down economics, which is a load of nonsense.
"Inflation benefits you unless you're in the top 1 percent."
Not really - inflation generally means wages go down relative to wages and those who spend a higher portion of their income on 'stuff' are generally worse off.
Inflation is targeted at 2% to keep a tiny bit of wage deflation in the economy, and to stay safely away from deflation which is a little scarier.
Not really - inflation generally means wages go down relative to wages and those who spend a higher portion of their income on 'stuff' are generally worse off.
Inflation is targeted at 2% to keep a tiny bit of wage deflation in the economy, and to stay safely away from deflation which is a little scarier.
There is an obvious problem with the Fed and ECB going overboard with crazy policies. I mean come on, it's pretty laughable that these giant institutions are unable to do their job. They should be a laughing stock and people should stop taking them seriously because they can't even do something as simple as hit 2% inflation.
Yes, all the best bankers in the world are idiots?
They are not idiots, the only question is strategy.
Inflation is actually in check, which is odd because they are spending a lot.
The concern right now is not inflation or deflation, it's the amount they are spending and the huge amounts on their balance sheet. That's the worry.
They are not idiots, the only question is strategy.
Inflation is actually in check, which is odd because they are spending a lot.
The concern right now is not inflation or deflation, it's the amount they are spending and the huge amounts on their balance sheet. That's the worry.
Can you provide more details or share a link where this is explained?
I don't get this: If purchasing power decreases - how does that benefit us?
I don't get this: If purchasing power decreases - how does that benefit us?
Let's say the money is deflationary: the more you sit on it, the more you have. Why create a company or invest in one when you're sure that you will still get richer by doing nothing? Just keep cash under your pillow and wait!
Now let say your parents died when you were young and all the inheritance was used for your phd in math. Who will pay you when the ROI on math discovery is so low? Every dollar you receive will make your employer poorer. You will have to become a teacher, but then, who will you teach? Other future teacher?
Us had deflationary events. From 1930 to 1933 an 2007-2008 more recently.
Now let say your parents died when you were young and all the inheritance was used for your phd in math. Who will pay you when the ROI on math discovery is so low? Every dollar you receive will make your employer poorer. You will have to become a teacher, but then, who will you teach? Other future teacher?
Us had deflationary events. From 1930 to 1933 an 2007-2008 more recently.
If you pay less for goods the salary of the producer has to be compensated downwards to match the fall in price. Essentially your salary is going down every year. Your highest salary will be in your 20s and from that point on you will earn less and less.
Now imagine that your dad is a wealthy business man in the 20th century. He keeps all his wealth in dollars and never does anything with the wealth. You inherit his dollars and will become more wealthy than your father will ever be just from deflation alone, without having to do anything to earn the additional wealth.
Here's the irony. Old people are entirely dependent on the work of young people. Once old people retire and decide to spend their money it will be worthless because there won't be enough young workers to provide for all their spending.
It's simply not possible to buy enough apples and water in your 20s to last until your 80s. The ability to save money over long periods of time would imply that such a thing is possible.
A dollar is basically the promise that someone, somewhere in the US will work for you and provide you with a service or good. The value of the dollar is entirely dependent on the existence of an economy that lets you exchange the dollar for a service or good.
In short, the dollar is backed by the economy of the US. If that economy disappears or shrinks then so does the value of your dollar. By having an inflationary currency you basically promise that future income will be greater than current income. Businesses love growing incomes and grow their business accordingly and employ workers along the way. Thus the existence of an economy that allows you to exchange dollars for goods and services is guaranteed.
It's quite easy to see how deflation is bad for business. You put money into resource inputs and transform them into goods. With deflation you want to buy as late as possible and sell as early as possible. The obvious problem with this is that you must produce before you sell. It's not possible to buy inputs after selling the product. Any company that keeps an inventory of goods is discouraged to do so because the value of the goods is constantly going down.
Now imagine that your dad is a wealthy business man in the 20th century. He keeps all his wealth in dollars and never does anything with the wealth. You inherit his dollars and will become more wealthy than your father will ever be just from deflation alone, without having to do anything to earn the additional wealth.
Here's the irony. Old people are entirely dependent on the work of young people. Once old people retire and decide to spend their money it will be worthless because there won't be enough young workers to provide for all their spending.
It's simply not possible to buy enough apples and water in your 20s to last until your 80s. The ability to save money over long periods of time would imply that such a thing is possible.
A dollar is basically the promise that someone, somewhere in the US will work for you and provide you with a service or good. The value of the dollar is entirely dependent on the existence of an economy that lets you exchange the dollar for a service or good.
In short, the dollar is backed by the economy of the US. If that economy disappears or shrinks then so does the value of your dollar. By having an inflationary currency you basically promise that future income will be greater than current income. Businesses love growing incomes and grow their business accordingly and employ workers along the way. Thus the existence of an economy that allows you to exchange dollars for goods and services is guaranteed.
It's quite easy to see how deflation is bad for business. You put money into resource inputs and transform them into goods. With deflation you want to buy as late as possible and sell as early as possible. The obvious problem with this is that you must produce before you sell. It's not possible to buy inputs after selling the product. Any company that keeps an inventory of goods is discouraged to do so because the value of the goods is constantly going down.
> Bitcoin is the solution for the biggest problem of mankind: inflation.
Wow. I've heard some really narrow and privileged perspectives in my time, but that one is really something.
Wow. I've heard some really narrow and privileged perspectives in my time, but that one is really something.
If you had said deflation then I would have agreed. If you want a well functioning economy with full employment then you do need a bit of inflation. The problem with the current central bank strategies is that they don't serve anyone, not even the central bank. QE and low or even negative interest rates are supply side economics. Supply side economics are becoming increasingly less relevant as globalization marches on, foreign markets expand, automation causes skill churn and the economy shifts to higher skill professions.
>While economists are talking about how good it is, everybody else is complaining about prices of everything going up.
If prices are going up that's a price signal for a growing industry. It means it becomes easier for companies to expand and thus employ more people. Of course, in practice local governments have made it almost impossible for markets to provide for basic needs like housing. It's really shocking to me how many people see a housing boom and their first response is to stop building more housing. It's like shutting an oil well down because oil has become too profitable.
>While economists are talking about how good it is, everybody else is complaining about prices of everything going up.
If prices are going up that's a price signal for a growing industry. It means it becomes easier for companies to expand and thus employ more people. Of course, in practice local governments have made it almost impossible for markets to provide for basic needs like housing. It's really shocking to me how many people see a housing boom and their first response is to stop building more housing. It's like shutting an oil well down because oil has become too profitable.
Can you explain why you think inflation is the biggest problem of mankind?
It destroys savings of people, they work for nothing. Most people in the world need savings that they can be used if they have some health issue, or lose their job. But as their savings lose value all the time, they become slaves to their own savings. I had the same thing happening to me before I started using Bitcoin as my savings account. Now I am able to offer every expensive cancer treatment to my girlfriend (TIL therapy) if her cancer doesn’t respond to her treatment (she’s in stage 4 :( )
Most people have no savings to speak of and that is not the fault of inflation, so that is not a problem. And anyhow, I don't really see why the work of my grandparents should be valued equally by society as work that happens now.
It’s because your grandfather sacrificed himself so that you can have a better life. One of the most noble thing a person can do to his grandson.
And I personally saw Bitcoin change people from a non-saver to saver. Also I know many poor people who save all the time without access to markets.
And I personally saw Bitcoin change people from a non-saver to saver. Also I know many poor people who save all the time without access to markets.
Last deflation in the us was 2007 to 2008, and the one prior to that was 1930 to 1933
>It’s because your grandfather sacrificed himself so that you can have a better life.
That's a pretty stupid argument. Why should everyone's life get worse from that point on, if it can get better for everyone involved?
That's a pretty stupid argument. Why should everyone's life get worse from that point on, if it can get better for everyone involved?
>It destroys savings of people, they work for nothing.
That's not true. Interest rates are usually slightly above inflation. Back when inflation was high you could get decent interest rates on your bank account to compensate. Nowadays with super low inflation the Fed is getting desperate and consumer banks are handing out money to anyone. I got two unwanted credit offers from two banks this week. Three years ago none of them would want to even talk with me, back when I really needed the money.
>Now I am able to offer every expensive cancer treatment to my girlfriend (TIL therapy) if her cancer doesn’t respond to her treatment (she’s in stage 4 :( )
If Bitcoin merely stays ahead of inflation then you would expect a return of 3% per year. What you are seeing is more of a bubble fueled by the belief that the central bank will pump money into the markets forever. However, I'm glad that the bubble money is getting put to good use. Bitcoin is probably a more effective wealth equalizer than the Fed will ever be.
That's not true. Interest rates are usually slightly above inflation. Back when inflation was high you could get decent interest rates on your bank account to compensate. Nowadays with super low inflation the Fed is getting desperate and consumer banks are handing out money to anyone. I got two unwanted credit offers from two banks this week. Three years ago none of them would want to even talk with me, back when I really needed the money.
>Now I am able to offer every expensive cancer treatment to my girlfriend (TIL therapy) if her cancer doesn’t respond to her treatment (she’s in stage 4 :( )
If Bitcoin merely stays ahead of inflation then you would expect a return of 3% per year. What you are seeing is more of a bubble fueled by the belief that the central bank will pump money into the markets forever. However, I'm glad that the bubble money is getting put to good use. Bitcoin is probably a more effective wealth equalizer than the Fed will ever be.
It sounds like not having social safety nets are a bigger problem than inflation then.
it seems there are more than enough commenters representing the other side of this argument so i'll just say i'm sorry to hear about your girlfriend's diagnosis :(
Clearly isn’t, but while inflation means more wealth to productive people, it slack increases the wealth of asset holders.
Your cash goes down in value, your debt reduces, but your house increases in value, the rent you can charge goes up.
Inflation helps those in debt with fixed interest payments which is great. It doesn’t effect those owning assets though.
Your cash goes down in value, your debt reduces, but your house increases in value, the rent you can charge goes up.
Inflation helps those in debt with fixed interest payments which is great. It doesn’t effect those owning assets though.
Even if inflation is a problem, there is no chance it is even close to the biggest. Climate change? War? Starvation? Malaria?
Naw, my libertarian utopia is more important.
Further, btc is currently inflating faster than usd and will continue to inflate for a century.
Naw, my libertarian utopia is more important.
Further, btc is currently inflating faster than usd and will continue to inflate for a century.
Bitcoin has no inherent value, it is a string of characters.
At least with gold, you can hire artists to create amazing interior design works of art.
The outer electrons in the gold atom are moving at relativistic speeds, and you have to account for this to predict its chemical qualities; namely, its unique ability to resist oxidation at room temperature (copper turns green).
BTC Will work as a store of value so long as there are a stream of other people who also believe it is a store of value.
If everyone tries to exit on the same week or month the value goes to zero.
Large banking institutes who purchased billions of dollars in bitcoin will be incentivized to simply hold, or else they would have to admit to their shareholders they paid billions of dollars for a string of characters.
One event that would be a ‘black swan’ for bitcoin would be a North Korean hack on coinbase. If you disrupt trust in a mainstream bitcoin bank, people would flee.
At least with gold, you can hire artists to create amazing interior design works of art.
The outer electrons in the gold atom are moving at relativistic speeds, and you have to account for this to predict its chemical qualities; namely, its unique ability to resist oxidation at room temperature (copper turns green).
BTC Will work as a store of value so long as there are a stream of other people who also believe it is a store of value.
If everyone tries to exit on the same week or month the value goes to zero.
Large banking institutes who purchased billions of dollars in bitcoin will be incentivized to simply hold, or else they would have to admit to their shareholders they paid billions of dollars for a string of characters.
One event that would be a ‘black swan’ for bitcoin would be a North Korean hack on coinbase. If you disrupt trust in a mainstream bitcoin bank, people would flee.
> Bitcoin has no inherent value, it is a string of characters.
So is any digital "good". If you value things that way, nothing on the computer is valuable.
> At least with gold, you can hire artists to create amazing interior design works of art.
Gold's primary value is from it's rarity. Very few cultures value gold for it's artistic attributes, India being the primary one. How often do you see someone wear gold jewelry in western countries?
> BTC Will work as a store of value so long as there are a stream of other people who also believe it is a store of value.
True for anything that is considered rare. The moment people deem it's not good enough or rare enough, it becomes useless. Paintings by famous artists are expensive purely because a certain group of people place high value on them. Otherwise it's just old paint on a canvas.
> If everyone tries to exit on the same week or month the value goes to zero.
If everyone goes to a bank at the same time and try to withdraw, there's no way any bank has the liquidity to be able to process this. Historically countries have placed withdrawal limits to curb this during mania.
> Large banking institutes who purchased billions of dollars in bitcoin will be incentivized to simply hold, or else they would have to admit to their shareholders they paid billions of dollars for a string of characters.
They are incentivized because the value keeps doing up due to it's fixed supply. If I gave you a rock, and I told you every year it's going to go up in value, wouldn't you be incentivized to hold it?
> One event that would be a ‘black swan’ for bitcoin would be a North Korean hack on coinbase. If you disrupt trust in a mainstream bitcoin bank, people would flee.
Yea, that would be disastrous. Unfortunately there's no way to recover stolen bitcoins, and due to it's inherently virtual nature, it makes it extremely susceptible to hacking. From everything you've mentioned this is the only real criticism, and I'm not sure we should let a fear of a black swan event drive us away from a potentially revolutionary financial system.
So is any digital "good". If you value things that way, nothing on the computer is valuable.
> At least with gold, you can hire artists to create amazing interior design works of art.
Gold's primary value is from it's rarity. Very few cultures value gold for it's artistic attributes, India being the primary one. How often do you see someone wear gold jewelry in western countries?
> BTC Will work as a store of value so long as there are a stream of other people who also believe it is a store of value.
True for anything that is considered rare. The moment people deem it's not good enough or rare enough, it becomes useless. Paintings by famous artists are expensive purely because a certain group of people place high value on them. Otherwise it's just old paint on a canvas.
> If everyone tries to exit on the same week or month the value goes to zero.
If everyone goes to a bank at the same time and try to withdraw, there's no way any bank has the liquidity to be able to process this. Historically countries have placed withdrawal limits to curb this during mania.
> Large banking institutes who purchased billions of dollars in bitcoin will be incentivized to simply hold, or else they would have to admit to their shareholders they paid billions of dollars for a string of characters.
They are incentivized because the value keeps doing up due to it's fixed supply. If I gave you a rock, and I told you every year it's going to go up in value, wouldn't you be incentivized to hold it?
> One event that would be a ‘black swan’ for bitcoin would be a North Korean hack on coinbase. If you disrupt trust in a mainstream bitcoin bank, people would flee.
Yea, that would be disastrous. Unfortunately there's no way to recover stolen bitcoins, and due to it's inherently virtual nature, it makes it extremely susceptible to hacking. From everything you've mentioned this is the only real criticism, and I'm not sure we should let a fear of a black swan event drive us away from a potentially revolutionary financial system.
> Bitcoin has no inherent value, it is a string of characters.
>So is any digital "good". If you value things that way, nothing on the computer is valuable.
That's a bad analogy because other digital goods contain information that is useful in its own right, without any agreement on that usefulness being necessary. My music and pictures of my dog are useful to me in a way that transcends their usefulness to other people.
To put it another way: people "love" their bitcoin like they "love" their health insurance: only because they are being held hostage by its value.
>So is any digital "good". If you value things that way, nothing on the computer is valuable.
That's a bad analogy because other digital goods contain information that is useful in its own right, without any agreement on that usefulness being necessary. My music and pictures of my dog are useful to me in a way that transcends their usefulness to other people.
To put it another way: people "love" their bitcoin like they "love" their health insurance: only because they are being held hostage by its value.
Gold is certainly more popular in India then the western world but most married people are walking around wearing a wedding ring and id guess the majority of those are gold?
Gold also has very practical industrial applications which give it value, like you say most of the value boils down to scarcity but it is both desirable as a status symbol and for functional applications
Gold also has very practical industrial applications which give it value, like you say most of the value boils down to scarcity but it is both desirable as a status symbol and for functional applications
>Gold's primary value is from it's rarity. Very few cultures value gold for it's artistic attributes, India being the primary one. How often do you see someone wear gold jewelry in western countries?
Gold derives its status as the store of value element from it's physical properties. They are universal in the literal sense. If martians were real and there was gold on Mars martians would come to value gold for the exact same reasons we value gold. The exact value is still fictional but the point is that gold is a natural shelling point. The shelling point property will not disappear in the future.
Bitcoin derives its shelling point property from being the first cryptocurrency with the largest mining network. There is a real risk that it will be replaced by something else.
Gold derives its status as the store of value element from it's physical properties. They are universal in the literal sense. If martians were real and there was gold on Mars martians would come to value gold for the exact same reasons we value gold. The exact value is still fictional but the point is that gold is a natural shelling point. The shelling point property will not disappear in the future.
Bitcoin derives its shelling point property from being the first cryptocurrency with the largest mining network. There is a real risk that it will be replaced by something else.
> So is any digital "good". If you value things that way, nothing on the computer is valuable.
Hence why they are not a store of "value".
> Gold's primary value is from it's rarity. Very few cultures value gold for it's artistic attributes, India being the primary one. How often do you see someone wear gold jewelry in western countries?
Gold primary value is that it is useful. Jewelry is very useful, but it is not is gold's only use.
Hence why they are not a store of "value".
> Gold's primary value is from it's rarity. Very few cultures value gold for it's artistic attributes, India being the primary one. How often do you see someone wear gold jewelry in western countries?
Gold primary value is that it is useful. Jewelry is very useful, but it is not is gold's only use.
> Bitcoin has no inherent value, it is a string of characters.
Dollar bills have no inherent value either. It's just that people believe they have value. This is basic economics.
Dollar bills have no inherent value either. It's just that people believe they have value. This is basic economics.
Dollar bills are backed by the existence of an economy that exchanges dollar bills for physical goods and services. Right now anyone who uses Bitcoin converts it back to dollars and then uses the dollars to buy stuff. If Bitcoin were accepted directly you might have a point but the low transaction rate kind of prevents such a usage and existing holders of Bitcoin like it that way even though adoption of Bitcoin as a currency would drive its value up even further.
People also keep their money in stocks, real estate and precious metals. Precious metals specifically were used at some point as a currency, but that's no longer the case. Bitcoin, like the dollar, it's just another "layer of indirection".
Dollars have the backing of the US military.
But does that matter? Would bitcoin being backed by the US military change the fact that it's just a string of characters?
Just because dollar is backed doesn't mean that it can't lose its value or crash. Unless you use the same military to force everyone at gunpoint to do what you want and even then it's probably still not guaranteed.
Just because dollar is backed doesn't mean that it can't lose its value or crash. Unless you use the same military to force everyone at gunpoint to do what you want and even then it's probably still not guaranteed.
>Just because dollar is backed doesn't mean that it can't lose its value or crash.
Yes but as I said earlier the value of your dollars is backed by the existence of an economy that accepts dollars. If the value of the dollar goes down then that would directly imply that the economy that is backing the dollar is much smaller than the number of dollars in circulation. What many people confuse is that hyperinflation isn't caused by central banks and governments printing an excessive amount of money. It's caused by economic collapse and the often resulting inability to service obligations denoted in foreign currencies. Hyperinflation is the result of your government being bankrupt and the solution is to build an economy that can support itself. That's pretty difficult to do if you have lost a war and surrendered and are now on the hook for reparations or being put under economic sanctions.
Is this the case for Europe and the US? Hell no.
Yes but as I said earlier the value of your dollars is backed by the existence of an economy that accepts dollars. If the value of the dollar goes down then that would directly imply that the economy that is backing the dollar is much smaller than the number of dollars in circulation. What many people confuse is that hyperinflation isn't caused by central banks and governments printing an excessive amount of money. It's caused by economic collapse and the often resulting inability to service obligations denoted in foreign currencies. Hyperinflation is the result of your government being bankrupt and the solution is to build an economy that can support itself. That's pretty difficult to do if you have lost a war and surrendered and are now on the hook for reparations or being put under economic sanctions.
Is this the case for Europe and the US? Hell no.
I'm not quite sure what are you getting at. Would you say the same about gold or silver? Gold is not backed by anything, in itself it has absolutely no use for me, I can't really buy a piece of bread with it, but it's still valuable.
> Is this the case for Europe and the US? Hell no.
You've basically described Post-WW1 Germany and similar is true of Eastern Europe under Soviets, so it's recent stuff.
> Is this the case for Europe and the US? Hell no.
You've basically described Post-WW1 Germany and similar is true of Eastern Europe under Soviets, so it's recent stuff.
It kind of does. In case you haven't noticed yet, the guys that create and enforce laws have a lot of power. Power that can be used against bitcoin if they want for example.
Dollars are also under control of the Fed. More than 20% of all USD that have ever existed were printed in the last year. Next year they could double or triple the money supply, and that decision is up to a tiny group of individuals. How does that make you feel?
At least with cryptos, you have an opportunity to participate in the decision making, and it's not just 5 rich people with political connections who decide to make your bank account worthless.
At least with cryptos, you have an opportunity to participate in the decision making, and it's not just 5 rich people with political connections who decide to make your bank account worthless.
And bitcoin has a distributed machine army. Both pretty useless for the end user.
> Dollar bills have no inherent value either. It's just that people believe they have value. This is basic economics.
Hence why the dollar is not referred to as a store of value.
Hence why the dollar is not referred to as a store of value.
The meaningful difference with real money is that if your real money get stolen, you can be reimbursed.
With bitcoin there is nothing you can do.
I prefer when the supply of money is under control.
If bitcoin exchangers can agree to a fixed rate between dollar and btc, maybe people will care.
With bitcoin there is nothing you can do.
I prefer when the supply of money is under control.
If bitcoin exchangers can agree to a fixed rate between dollar and btc, maybe people will care.
If you can be reimbursed, you can also be denied your funds. This happens in plenty of scenarios (a fun institutional example was Citibank recently).
There are different use cases where sometimes you would like being able to revert transactions and sometimes you don't want it to happen.
The supply of money is most under control with BTC, to be clear. The price is now very volatile, but volatile up is way better than stable down to me.
There are different use cases where sometimes you would like being able to revert transactions and sometimes you don't want it to happen.
The supply of money is most under control with BTC, to be clear. The price is now very volatile, but volatile up is way better than stable down to me.
There is an argument that there will be bitcoin banks to act as custodians for people like you. Personally I find it outrageous to not be in control of my own money and would rather set up my own security solutions (how will someone steal from a wallet that has never been connected to the internet, is protected by a password with a decoy wallet, and nobody knows how much I own?)
>There is an argument that there will be bitcoin banks to act as custodians for people like you.
Paypal, Visa and Mastercard are trying to corner this market.
Paypal, Visa and Mastercard are trying to corner this market.
Likewise, policy like the Magnitsky Act can't be implemented - and so known bad actors can't then be punished financially to help sway them away from continuing their bad behaviour. This unavoidable pitfall never gets answered when I bring it up in conversation with a Bitcoin owner.
how do you get your money back when you get mugged or scammed?
You are usually not carrying your life savings in cash so getting mugged sucks but it's week altering not life altering.
Getting scammed can happen with bitcoin just as easily except, depending on the scam, you have a chance of getting your dollars back.
Getting scammed can happen with bitcoin just as easily except, depending on the scam, you have a chance of getting your dollars back.
By deactivating your credit card. I lost my card once, took all of 60 seconds to dial an automated line, confirm my ID and cancel the card.
> that he would "short" it if he could
This takes on a new meaning in light of GameStop's massive naked short selling, with buyers never really possessing hard shares [1].
I'm not saying a short selling infrastructure can't be built to target Bitcoin. I'm saying that, unlike trading shares, you can physically own Bitcoin. You're not at the mercy of your broker only selling you an IOU instead of a share.
Point number 2: to actually build a Bitcoin short selling infrastructure, you're going to need first to acquire some amount of Bitcoin liquidity. You can't go fully naked. And this will drive Bitcoin price's further up.
[1] https://prospect.org/power/gamestop-mess-exposes-the-naked-s...
This takes on a new meaning in light of GameStop's massive naked short selling, with buyers never really possessing hard shares [1].
I'm not saying a short selling infrastructure can't be built to target Bitcoin. I'm saying that, unlike trading shares, you can physically own Bitcoin. You're not at the mercy of your broker only selling you an IOU instead of a share.
Point number 2: to actually build a Bitcoin short selling infrastructure, you're going to need first to acquire some amount of Bitcoin liquidity. You can't go fully naked. And this will drive Bitcoin price's further up.
[1] https://prospect.org/power/gamestop-mess-exposes-the-naked-s...
I don't think that's an inherent attribute of bitcoin, it's based entirely on what types of deals brokers and traders are willing to engage in.
If you buy a stock and actually take possession of it instead of letting your broker hold onto it for you, then your shares can't be lent out. People generally don't do that because it makes it harder to buy and sell and there is usually not a realistic chance of your share being lent out actually hurting you.
If you buy bitcoin and let a broker hold onto it for you, then they could lend it out. Off-chain transactions like this are becoming increasingly popular as people look to avoid increasing transaction fees.
If you buy a stock and actually take possession of it instead of letting your broker hold onto it for you, then your shares can't be lent out. People generally don't do that because it makes it harder to buy and sell and there is usually not a realistic chance of your share being lent out actually hurting you.
If you buy bitcoin and let a broker hold onto it for you, then they could lend it out. Off-chain transactions like this are becoming increasingly popular as people look to avoid increasing transaction fees.
"Elon has tonnes of money and he's very sophisticated, so I don't worry that his Bitcoin will sort of randomly go up or down."
I feel like if an American is being quoted, American spelling should be used. It's weird to imagine Bill Gates saying "tonnes".
I feel like if an American is being quoted, American spelling should be used. It's weird to imagine Bill Gates saying "tonnes".
I was curious so I did a bit of a search - it doesn’t seem like this particular situation is really handled by style guides, but it seems that the convention from both American and British publications is to use the standard spelling of the publisher for quotes of speech.
Yeah, I mean you wouldn't use either version of English in a Spanish paper. You quote people in your native language.
They're quoting what he said, not what he wrote. It's a British news site, so using British spelling seems fine.
xiphias2(1)
> The billionaire said he did not choose his investments on the basis of whether they would be worth more to others.
Entertain the notion, just for one second (even if you don't think it will happen), that people are envisioning a future where the bitcoin is just, you know... used? In that context, it's worth more to _them_, not "others".
Also, didn't these people take a risk to earn their level of wealth? Starting a company can absolutely destroy people and their families, yet we encourage people to take these kinds of calculated risks everyday.
Entertain the notion, just for one second (even if you don't think it will happen), that people are envisioning a future where the bitcoin is just, you know... used? In that context, it's worth more to _them_, not "others".
Also, didn't these people take a risk to earn their level of wealth? Starting a company can absolutely destroy people and their families, yet we encourage people to take these kinds of calculated risks everyday.
Starting a company has the potential to create something of value for people outside the company, though. Buying some Bitcoin and it increasing in value doesn’t really change anything in the world but the amount of money the person who bought it has. It’s not like Bitcoin use is very widespread or likely ever will be due to its slowness, power inefficiency, and government distaste. Bitcoin goes up in value mostly because more people think they’ll earn money from buying it and it subsequently increasing in value, not because it has become more useful.
So if BTC's value goes up 50%, then down 20% in a matter of days, what is the delta in the number of people that are envisioning this future?
He is trying to push his own digital currencies in developing countries that compete with Bitcoin. So obviously, he tries to defend his position.
This article is junk. Is it a just a jumping point for peoples random thoughts on Bitcoin or Gates? Do we need an article every-time Gates says the world Bitcoin?
The Bloomberg video is a little bit more interesting. https://www.bloomberg.com/news/videos/2021-02-23/bill-gates-...
He makes the good point on the need to solve the remittance problem and we need to do something while we wait.
Otherwise he's not committal. If money means a lot to you, don't bet it. Blah, blah. Smart non committal words.
The Clubhouse interview is here - https://www.youtube.com/watch?v=VQFNb93q3CI
The Bloomberg video is a little bit more interesting. https://www.bloomberg.com/news/videos/2021-02-23/bill-gates-...
He makes the good point on the need to solve the remittance problem and we need to do something while we wait.
Otherwise he's not committal. If money means a lot to you, don't bet it. Blah, blah. Smart non committal words.
The Clubhouse interview is here - https://www.youtube.com/watch?v=VQFNb93q3CI
Of course Bill hates it, he never got it, he never really got the internet. His vision was a home PC on every desk. "Peer to Peer? Free Software? How will we ever charge licensing on that?"
I don't agree. I just watched a talk from Gates in 2008:
https://www.youtube.com/watch?v=nsonKu4STzM
I thought it was totally wild how much he predicted correctly, e.g. personalized ads, big data analytics, internet of things, increased pervasiveness of screens throughout life, explosion in phone ownership, smart mirrors.
Some of that stuff was obvious by 2008, but his vision was always miles ahead in my opinion.
I thought it was totally wild how much he predicted correctly, e.g. personalized ads, big data analytics, internet of things, increased pervasiveness of screens throughout life, explosion in phone ownership, smart mirrors.
Some of that stuff was obvious by 2008, but his vision was always miles ahead in my opinion.
[deleted]
Bill wrote the book "The Road Ahead" in the 90s. It heavily references an Information Superhighway and widespread PDA use (aka the modern Internet and smartphones).
The book even predicts a future digital wallet based payment system.
The book even predicts a future digital wallet based payment system.
The book was written without mentioning the internet at all. He famously had to go back and add in the internet parts after it was already a sure thing. '95 was still early, but back then techies weren't ready to give BillG the benefit the doubt about anything.
> After the book was written, but before it hit bookstores, Gates recognized that the Internet was gaining critical mass, and on December 7, 1995 — just weeks after the release of the book — he redirected Microsoft to become an Internet-focused company; in retrospect he had "vastly underestimated how important and how quickly the internet would come to prominence".[3] Then he and coauthor Rinearson spent several months revising the book, making it 20,000 words longer and focused on the Internet.[citation needed] The revised edition was published in October 1996 as a trade paperback,[6] with the subtitle "Completely revised and up-to-date.".[3]
https://en.wikipedia.org/wiki/The_Road_Ahead_(Gates_book)
> After the book was written, but before it hit bookstores, Gates recognized that the Internet was gaining critical mass, and on December 7, 1995 — just weeks after the release of the book — he redirected Microsoft to become an Internet-focused company; in retrospect he had "vastly underestimated how important and how quickly the internet would come to prominence".[3] Then he and coauthor Rinearson spent several months revising the book, making it 20,000 words longer and focused on the Internet.[citation needed] The revised edition was published in October 1996 as a trade paperback,[6] with the subtitle "Completely revised and up-to-date.".[3]
https://en.wikipedia.org/wiki/The_Road_Ahead_(Gates_book)
Correct, it mentioned the Information Superhighway instead; that was the revision.
I have and read the first (hardback) edition, and still feel it is sufficiently foretelling. I encourage you to verify this for yourself because the [citation needed] here is telling!
I have and read the first (hardback) edition, and still feel it is sufficiently foretelling. I encourage you to verify this for yourself because the [citation needed] here is telling!
Bill Gates is making the argument that Bitcoin's speculative value outweighs its moral efficacy as an investment vehicle. I think it's a fair argument whether or not he "understands" the internet.
You can’t dismiss somebody’s opinions because of the mind reading you did about their subconscious motives
Underestimate the importance of the world wide web (different from the internet) once in the early 90s, and the entire world will never let you forget it.
Does that relate to Bitcoin?
Gates is the victim of some aggressive messaging from the Ripple crew in 2017 or so. His early comments on Bitcoin were very positive; in fact, he called the Satoshi a paper a “technical tour-de-force” a few years prior.
However, Ripple’s go-to-market strategy in that era was to attack Bitcoin as a darknet currency. Their board and partners at that time were stacked with ‘traditional banking’ types and others as part of an attempt to be the ‘safer Bitcoin’, and they pitched the mutability and reversability of their chain as a key feature that had a social good.
There were a few key meetings with Ripple folks brokered at the Gates foundation, and after those his message has stayed pretty much on point: the four horsemen are bad, and therefore Bitcoin is bad, we should use other systems.
In this, I think he’s wrong - tech that comes under the same regulatory regime as existing payment and monetary systems doesn’t add much to the world.
However, Ripple’s go-to-market strategy in that era was to attack Bitcoin as a darknet currency. Their board and partners at that time were stacked with ‘traditional banking’ types and others as part of an attempt to be the ‘safer Bitcoin’, and they pitched the mutability and reversability of their chain as a key feature that had a social good.
There were a few key meetings with Ripple folks brokered at the Gates foundation, and after those his message has stayed pretty much on point: the four horsemen are bad, and therefore Bitcoin is bad, we should use other systems.
In this, I think he’s wrong - tech that comes under the same regulatory regime as existing payment and monetary systems doesn’t add much to the world.
Can we stop pretending it’s a future payment system?