Bitcoin's Use in Commerce Keeps Falling(bloomberg.com)
bloomberg.com
Bitcoin's Use in Commerce Keeps Falling
https://www.bloomberg.com/news/articles/2018-08-01/bitcoin-s-use-in-commerce-keeps-falling-even-as-volatility-eases
368 comments
> The miners will not sell for less than their electricity costs, which makes the smaller piece of the block reward they receive have a higher price.
That's not how it works. If you spent $100 in electricity and you have an asset that's worth $50, you can either sell it for $50 and only be down $50 on your electricity, or you can not sell it at all and be down $100 on your electricity.
Electricity cost of mining does not set a price floor. The price floor is 0.
That's not how it works. If you spent $100 in electricity and you have an asset that's worth $50, you can either sell it for $50 and only be down $50 on your electricity, or you can not sell it at all and be down $100 on your electricity.
Electricity cost of mining does not set a price floor. The price floor is 0.
> That's not how it works.
Obivously, the meaning of the original sentence is that miners will turn off the mining equipment when they decide that it's more profitable to leave it off than leave it on.
> …you can either sell it for $50 and only be down $50 on your electricity, or you can not sell it at all and be down $100 on your electricity.
This is a false dilemma, the question is not just whether you sell the coins, but also how many, with what timing, on what markets, and in exchange for what. The “either sell it and make some money back, or don’t sell it and eat the loss” is only true if you are paying for your electricity in Bitcoin to begin with, or if you know that the asset you have will only depreciate in value. If I spent $10,000 on a car that I don’t need, selling it for $8,000 might be a good deal because if I wait I will only get less. For Bitcoin, the exchange rate fluctuates, and you can divide it and sell parts at different times.
Obivously, the meaning of the original sentence is that miners will turn off the mining equipment when they decide that it's more profitable to leave it off than leave it on.
> …you can either sell it for $50 and only be down $50 on your electricity, or you can not sell it at all and be down $100 on your electricity.
This is a false dilemma, the question is not just whether you sell the coins, but also how many, with what timing, on what markets, and in exchange for what. The “either sell it and make some money back, or don’t sell it and eat the loss” is only true if you are paying for your electricity in Bitcoin to begin with, or if you know that the asset you have will only depreciate in value. If I spent $10,000 on a car that I don’t need, selling it for $8,000 might be a good deal because if I wait I will only get less. For Bitcoin, the exchange rate fluctuates, and you can divide it and sell parts at different times.
Are you claiming that the cost of electricity sets a lower bound on what the price of 1 BTC can possibly go to? If not, you haven't really disagreed with what I said.
You said,
> …you can either sell it for $50 and only be down $50 on your electricity, or you can not sell it at all and be down $100 on your electricity.
This is what I disagree with.
> …you can either sell it for $50 and only be down $50 on your electricity, or you can not sell it at all and be down $100 on your electricity.
This is what I disagree with.
> Obivously, the meaning of the original sentence is that miners will turn off the mining equipment when they decide that it's more profitable to leave it off than leave it on.
This doesn't cause a price floor either as fewer miners does not correspond to a drop in supply. The cost for miners has no causal effect on the price of Bitcoin because the new supply of Bitcoin is constant.
Note that this is somewhat counterintuitive compared to "physical" mining (of gold, copper, oil, etc), where fewer miners correspond to less supply (which usually causes an increase in price).
TLDR: there is no price floor for Bitcoin based on the mining price
This doesn't cause a price floor either as fewer miners does not correspond to a drop in supply. The cost for miners has no causal effect on the price of Bitcoin because the new supply of Bitcoin is constant.
Note that this is somewhat counterintuitive compared to "physical" mining (of gold, copper, oil, etc), where fewer miners correspond to less supply (which usually causes an increase in price).
TLDR: there is no price floor for Bitcoin based on the mining price
Selling requires a buyer. Seller can set whatever price they like, unless the buyer is ready to pay for it, its really not worth much.
In the same way if all the buyer wants to pay is 50% of what the seller is quoting, and there are no other buyers around or they too want it for a 50% discount, 50% discounted price is what the price is.
In the same way if all the buyer wants to pay is 50% of what the seller is quoting, and there are no other buyers around or they too want it for a 50% discount, 50% discounted price is what the price is.
This is ridiculous at face value. Selling requires a buyer, but it is also true that buying requires a seller! Neither the seller nor the buyer has any kind of special power to affect market value that the other party lacks, in some symmetrical way. This should be pretty obvious if you're thinking about currency transactions (which we are) because in currency transactions neither party can really be identified as a "buyer" or "seller". Am I selling BTC? Or am I buying USD? Either statement is equally true.
> In the same way if all the buyer wants to pay is 50% of what the seller is quoting, and there are no other buyers around or they too want it for a 50% discount, 50% discounted price is what the price is.
Let's say I want to sell for $10 but you're the only "buyer" and you only want to pay $5.
You are saying that the actual price is $5... this is not true. There is no actual price, because there is no transaction. I am not a seller, because I haven't sold anything (I've only offered to sell). You're not a buyer, because you haven't bought anything (you've only offered to buy). The "bid price" is $5 and the "ask price" is $10. The "actual price" does not exist until there is an actual transaction.
> In the same way if all the buyer wants to pay is 50% of what the seller is quoting, and there are no other buyers around or they too want it for a 50% discount, 50% discounted price is what the price is.
Let's say I want to sell for $10 but you're the only "buyer" and you only want to pay $5.
You are saying that the actual price is $5... this is not true. There is no actual price, because there is no transaction. I am not a seller, because I haven't sold anything (I've only offered to sell). You're not a buyer, because you haven't bought anything (you've only offered to buy). The "bid price" is $5 and the "ask price" is $10. The "actual price" does not exist until there is an actual transaction.
> Obivously, the meaning of the original sentence is that miners will turn off the mining equipment when they decide that it's more profitable to leave it off than leave it on.
Well, it all depends on price of electricity in your region. If you mine for almost free using solar/other renewable energy/your energy is subsidized by government then you will still make profit while miners in high cost electricity regions will stop mining. If they stop mining difficulty will drop, which means you will get more money for mining.
This is self regulating mechanism, as long as bitcoin will have value it will be profitable to mine for someone.
Well, it all depends on price of electricity in your region. If you mine for almost free using solar/other renewable energy/your energy is subsidized by government then you will still make profit while miners in high cost electricity regions will stop mining. If they stop mining difficulty will drop, which means you will get more money for mining.
This is self regulating mechanism, as long as bitcoin will have value it will be profitable to mine for someone.
Even with subsidies, there's an effective price floor.
Even with renewable energy there's an opportunity cost - you can sell it back to the grid. Plus the fixed costs of buying the solar panels and mining equipment in the first place.
Even with renewable energy there's an opportunity cost - you can sell it back to the grid. Plus the fixed costs of buying the solar panels and mining equipment in the first place.
> Even with renewable energy there's an opportunity cost - you can sell it back to the grid. Plus the fixed costs of buying the solar panels and mining equipment in the first place.
In many cases this doesn't matter, as it 's being paid by someone else. Millions of teenagers mining crypto on their GPUs, their parents pay for electricity, what about enthusiasts? They will mine even if price is higher than the value of the bitcoin, there are bitcoin mines that steal electricity from the grid etc.
And as I wrote before, this is self regulating mechanism, difficulty is adjusted every 2016 blocks. Less miners? then less power needed to mine the block, which means less resources/money needed to mine the block. Price of electricity dosen't matter.
In many cases this doesn't matter, as it 's being paid by someone else. Millions of teenagers mining crypto on their GPUs, their parents pay for electricity, what about enthusiasts? They will mine even if price is higher than the value of the bitcoin, there are bitcoin mines that steal electricity from the grid etc.
And as I wrote before, this is self regulating mechanism, difficulty is adjusted every 2016 blocks. Less miners? then less power needed to mine the block, which means less resources/money needed to mine the block. Price of electricity dosen't matter.
More than just power, you have depreciating assets (mining chips, servers, buildings) that are effectively losing money constantly. Operating them at a small loss is better than leaving them idle for a huge loss.
You see similar economics when farmers sell crops at a net loss.
You see similar economics when farmers sell crops at a net loss.
This is only relevant if your clearing bit coins above the cost of the electricity. If not, you’re losing more turning them on than off.
In economic terms, suppliers will continue producing so long as the sale price is greater the marginal cost of production. The average cost is irrelevant in the short run because it includes sunk costs.
The comment you were responding to was about electricity, which is clearly a highly linearly correlated marginal cost. I am not sure why you're bringing up average costs at all.
And the comment you replied to did not even mention the other marginal costs that Bitcoin faces (employee costs, land rental, networking costs, etc).
And the comment you replied to did not even mention the other marginal costs that Bitcoin faces (employee costs, land rental, networking costs, etc).
I was restating what they were getting at in a way that could be easily traced back to widely studied economic theories. It was an elaboration, not a disagreement.
Note: Farming in that manner regularly is not sustainable. Also, at a certain loss point, you might as well compost the crop back into the soil to contribute to next year's crop as fertilizer. That stuff is expensive.
Hell, the entire economy makes no guarantees at being sustainable in the long run. The unsustainability period just shows all indications of being longer than a human lifespan, thereby making it easy for people to write off as not their problem.
Hell, the entire economy makes no guarantees at being sustainable in the long run. The unsustainability period just shows all indications of being longer than a human lifespan, thereby making it easy for people to write off as not their problem.
So slightly negative margins but making it up in volume?
Think of it more as cutting your losses. You've already lost the money, so even if you can't make it all back you can make back part of it by selling the product at a loss.
No, it's positive margins offseting negative fixed costs.
That's how you lock up your Series A. For the next round of funding you'll need to upgrade to "large negative margins but hockey stick volume". The Saudi Sovereign Wealth Fund will accept nothing less.
It kinda does set a price floor, the cost of operation of the cheapest miner is the price floor. No miner will want to sell below as it would be a loss and considering Bitcoin is deflationary in nature, it is likely worthwhile to just hold the coins and earn the deflationary interest on them until the price adjusts.
Assuming you can only either sell or loose the money fails to take temporal effects into account, ie the fact that there is such a thing as time progressing that changes variables.
Assuming you can only either sell or loose the money fails to take temporal effects into account, ie the fact that there is such a thing as time progressing that changes variables.
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You can sell at a loss if the asset is dying off, but for the most part an actor isn't going to sell for less than their costs.
What do you mean? That the miners will sell at a loss?
I disagree with several of your statements. First, bitcoin has a monetary policy, and the key is that it cant be changed, which is very appealing: more appealing that storing gold vs fiat, since gold has a less predictable monetary policy. Gold had been chosen as currency for most of history, across cultures and languages. In countries where the currency breaks down, things like chocolate, potatoes or corn get into circulation. Also bonds and other papers of different calibers.
It is not the deflationary policy that makes bitcoin less adoptable: being deflationary predictably is better than unpredictably inflationary. Specially in this day and age, where bitcoin prices can be tracked to the second and prices changed accordingly across the board. Its interesting to see there's research talking about how the ability to price things faster has changed the effect of monetary policy on prices at all.
The rest, I agree. It has a very speculative value, and its best usecase is pass-through. But pass through is still a good use-case. Argentina, 3 years ago, would pay up to 5% of funds to transfer money in-out of the country: bitcoin would have been easier and cheaper. And its still used as a way to evade controls. The use of bitcoin can severely reduce the government's capacity to levy taxes, as it is way harder to track down than bank/card transfers. Whether that's moral or good will be secondary to the fact that it can do that. If its use case is to sell drug money and reduce taxes, it will have value.
It is not the deflationary policy that makes bitcoin less adoptable: being deflationary predictably is better than unpredictably inflationary. Specially in this day and age, where bitcoin prices can be tracked to the second and prices changed accordingly across the board. Its interesting to see there's research talking about how the ability to price things faster has changed the effect of monetary policy on prices at all.
The rest, I agree. It has a very speculative value, and its best usecase is pass-through. But pass through is still a good use-case. Argentina, 3 years ago, would pay up to 5% of funds to transfer money in-out of the country: bitcoin would have been easier and cheaper. And its still used as a way to evade controls. The use of bitcoin can severely reduce the government's capacity to levy taxes, as it is way harder to track down than bank/card transfers. Whether that's moral or good will be secondary to the fact that it can do that. If its use case is to sell drug money and reduce taxes, it will have value.
> and the key is that it cant be changed, which is very appealing
This is only very appealing if:
- It is never necessary to change monetary policy.
- The same monetary policy is appropriate for all nations.
- The monetary policy that was chosen by the bitcoin dev team is exactly the right one.
This is only very appealing if:
- It is never necessary to change monetary policy.
- The same monetary policy is appropriate for all nations.
- The monetary policy that was chosen by the bitcoin dev team is exactly the right one.
> The same monetary policy is appropriate for all nations
you're conflating. the concept of nation has nothing to do with the concept of money.
you're conflating. the concept of nation has nothing to do with the concept of money.
Sure it is. Hard money advocates see the Fed as some kind of parasitic liability on America, but it's quite the opposite. It's a weapon of war. A sovereign currency that can be manipulated is an instrument of empire. Eliminating it in a world where everyone has one would be akin to unilateral disarmament.
Generally speaking libertarian idealism is unthinkable until we have had at least 50 years with no war. It won't work in a violent, power-hungry world ruled by warlords and sociopaths. Getting rid of our warlords sounds great until you realize there are others.
Generally speaking libertarian idealism is unthinkable until we have had at least 50 years with no war. It won't work in a violent, power-hungry world ruled by warlords and sociopaths. Getting rid of our warlords sounds great until you realize there are others.
* > [Money] is a weapon of war.*
This point is so true and so important it deserves special emphasis. If you imagine two societies at war, one with currency and other without, who wins? Clearly, the one with currency, because you can collaborate far better than the other, and war is won primarily by scale, which money can maintain.
And as for those that want to abolish currency, or nation-states, this is naive idealism: anyone who demolishes their nation-state will just get invaded and absorbed into one of the remaining nation-states. Peace lovers would do better to plot a course for peaceful subsuming of states into a larger entity, something like the EU model.
This point is so true and so important it deserves special emphasis. If you imagine two societies at war, one with currency and other without, who wins? Clearly, the one with currency, because you can collaborate far better than the other, and war is won primarily by scale, which money can maintain.
And as for those that want to abolish currency, or nation-states, this is naive idealism: anyone who demolishes their nation-state will just get invaded and absorbed into one of the remaining nation-states. Peace lovers would do better to plot a course for peaceful subsuming of states into a larger entity, something like the EU model.
> Clearly, the one with currency, because you can collaborate far better than the other, and war is won primarily by scale, which money can maintain.
this is a weird hypothetical. i can't imagine a nation-state without currency and i don't think you can either. so how is it clear who wins?
i highly doubt isolated regime can somehow improve it's sustainability simply by manipulating money. Venezuela just had a massive devaluation - did it make Venezuela richer? did it improve it's economy or GDP? no, it's still the same corrupt country on a brink of collapse.
this is a weird hypothetical. i can't imagine a nation-state without currency and i don't think you can either. so how is it clear who wins?
i highly doubt isolated regime can somehow improve it's sustainability simply by manipulating money. Venezuela just had a massive devaluation - did it make Venezuela richer? did it improve it's economy or GDP? no, it's still the same corrupt country on a brink of collapse.
Venzuela is a great example of my point! If V got into a war right now, let's say with Columbia, how would that go? If the money is worthless in V, then how do you pay troops; how do you pay for the food for the troops; how do you pay for the gas to get the troops where they need to be; how do you pay for the weapons? If you don't pay for that stuff, how do you get it? Will people volunteer? How long can they do that until they starve? Or will you use coercion? Coercion requires troops, and also suffers from the starvation end-game, at both ends.
Basically, V can't fight a war until they get their money situation in order.
Basically, V can't fight a war until they get their money situation in order.
> an instrument of empire
i don't see the word "nation" in here. do you?
i don't care about empires losing their weapons. i would very much invite such an event and would do everything in my power to enable it.
i don't see the word "nation" in here. do you?
i don't care about empires losing their weapons. i would very much invite such an event and would do everything in my power to enable it.
The problem is when your empire loses its weapons but all the others still have theirs. Think China's trade policy is unfair now? Imagine if we had no tools for monetary policy. There would be much laughter in Beijing.
Only multilateral disarmament works for game theoretic reasons. I don't think soft disarmament in areas like aggressive monetary policy can be done until hard disarmament happens, so I write that stuff off until we've had at least 50 years with no major war anywhere on Earth. (Most smaller wars are proxy wars between major powers.)
Like most major innovations Bitcoin is ahead of its time. Maybe on Mars...
Only multilateral disarmament works for game theoretic reasons. I don't think soft disarmament in areas like aggressive monetary policy can be done until hard disarmament happens, so I write that stuff off until we've had at least 50 years with no major war anywhere on Earth. (Most smaller wars are proxy wars between major powers.)
Like most major innovations Bitcoin is ahead of its time. Maybe on Mars...
i totally understand your argument and agree that it is valid.
the difference here is that cryptocurrencies undermine isolated regimes even more than they do developed economies. being able to own something a government can't debase or manipulate is extremely useful for everybody.
the difference here is that cryptocurrencies undermine isolated regimes even more than they do developed economies. being able to own something a government can't debase or manipulate is extremely useful for everybody.
Well, if they picked a policy that is very good, and the degree to which it falls short of the exact correct policy is small enough that the possibility of improving it doesn't outweigh the risks of it being changed for the worse, then the policy being unchanging could be a genuine advantage over other alternatives that aren't unchanging.
Right?
Right?
I think thats attempting to put the burden of a states monetary policy to a virtual currency. I dont think its necessary for bitcoin to fullfill some of the roles monetary policy does: bitcoin doesn't care about unemployment. At the same time it does not have the benefits typical monetary policy has: that it can force people to take the money, meaning that monetary policy in itself would be limited in effect.
> being deflationary predictably is better than unpredictably inflationary.
Unpredictable deflation is what bitcoin does, and with a fixed policy it can never do anything else. The amount of wealth generated by an economy grows in an unpredictable manner, and fixed monetary policy translates that fluctuation directly into the value of the currency. We learned this with metal currency. It didn’t go well.
Unpredictable deflation is what bitcoin does, and with a fixed policy it can never do anything else. The amount of wealth generated by an economy grows in an unpredictable manner, and fixed monetary policy translates that fluctuation directly into the value of the currency. We learned this with metal currency. It didn’t go well.
Did we? The history of monetary policy crisis were not related to the metal as much as to the instability of banking. Bitcoin cant go broke like a bank can.
You can still have crises that aren't banking-related. When the New World was conquered, the mountains of silver and gold flowing back to Spain in particular caused inflation, no bankers involved.
I'm not sure if there's a direct equivalent for Bitcoin. My first thought is that there are probably a few large stashes of coins that the market assumes are "out of circulation" and priced accordingly.
I'm not sure if there's a direct equivalent for Bitcoin. My first thought is that there are probably a few large stashes of coins that the market assumes are "out of circulation" and priced accordingly.
Its true the metal created inflation, but I assure you it created less inflation issues that any paper ever, and could never create hyperinflation as we know it unless it rained gold or something.
Im unaware of big crisis stemming from that inflation, although I find it very amusing when Adam Smith or Ricardo talk about it without having the word in their arsenal. I loved knowing they were trying to define inflation without knowing what it was.
Im unaware of big crisis stemming from that inflation, although I find it very amusing when Adam Smith or Ricardo talk about it without having the word in their arsenal. I loved knowing they were trying to define inflation without knowing what it was.
> Specially in this day and age, where bitcoin prices can be tracked to the second and prices changed accordingly across the board. Its interesting to see there's research talking about how the ability to price things faster has changed the effect of monetary policy on prices at all.
isn't this true for all currencies, virtual or not?
isn't this true for all currencies, virtual or not?
The Fed can easily replicate the benefits of cryptocurrency in seconds. They simply need to come out and say "We will only print X number of dollars, every Y number of months".
There you go. All the benefits of Bitcoin replicated in the USD, which is a far more widespread and versatile currency?
So why doesn't the Fed do it? Because it really is a terrible idea. It's like pegging your currency to gold, which was a terrible idea (although good for its time) and the delay in moving away from it probably cost tons of money and lives.
There you go. All the benefits of Bitcoin replicated in the USD, which is a far more widespread and versatile currency?
So why doesn't the Fed do it? Because it really is a terrible idea. It's like pegging your currency to gold, which was a terrible idea (although good for its time) and the delay in moving away from it probably cost tons of money and lives.
> say "We will only print X number of dollars, every Y number of months"
Easily said. Not so easily verified. Verifiable emission remains a big advantage of cryptocurrencies.
Easily said. Not so easily verified. Verifiable emission remains a big advantage of cryptocurrencies.
Bitcoin monetary policy can be changed. If there is a significant consensus then you can move to any set of rules. Bitcoin monetary policy cannot be unilaterally changed.
Consensus is difficult and slow, but when it comes to the world economy, that's probably the least-bad solution.
Consensus is difficult and slow, but when it comes to the world economy, that's probably the least-bad solution.
> Bitcoin monetary policy can be changed
People can fork bitcoin with a different monetary policy. I, and many others will continue to support the monetary policy as set out in the original white paper. Not much in bitcoin is sacrosanct, but 21 million coins is what makes it bitcoin for me.
People can fork bitcoin with a different monetary policy. I, and many others will continue to support the monetary policy as set out in the original white paper. Not much in bitcoin is sacrosanct, but 21 million coins is what makes it bitcoin for me.
Bitcoin automatically adjusts the difficulty of mining, targeting ten minutes per block. If the price drops, then some miners will find themselves unprofitable and shut down, blocks will take longer to produce, and the difficulty will drop. Mining effort follows price, not the other way around.
Price follows buyers and sellers. It is not some magical property that miners are chasing. They produce a product for costs and aim to sell it above those costs.
They're a small minority of the total selling. In the past 24 hours the volume listed on coinmarketcap was 500K bitcoins. The number of bitcoins produced by miners was 12.5 every 10 minutes, or 1800 coins.
Due to difficulty adjustment, they also have no ability to change the overall level of production. They can choose not to sell immediately, but for most large miners their costs prevent them from waiting too long. But since they're only 0.4% of overall daily sales, it won't matter to the price either way.
Due to difficulty adjustment, they also have no ability to change the overall level of production. They can choose not to sell immediately, but for most large miners their costs prevent them from waiting too long. But since they're only 0.4% of overall daily sales, it won't matter to the price either way.
> For example, a fixed reward split between a growing group of miners will also cause a rising price floor. The miners will not sell for less than their electricity costs, which makes the smaller piece of the block reward they receive have a higher price.
No that's not how markets work.
Miners will sell at the best prive they can get. If they cannot cover their costs, they'll stop mining and the difficulty will drop until mining is profitable again.
The resulting mining rate may be too low though to secure the network, bug that's a different topic.
No that's not how markets work.
Miners will sell at the best prive they can get. If they cannot cover their costs, they'll stop mining and the difficulty will drop until mining is profitable again.
The resulting mining rate may be too low though to secure the network, bug that's a different topic.
> For example, a fixed reward split between a growing group of miners will also cause a rising price floor. The miners will not sell for less than their electricity costs, which makes the smaller piece of the block reward they receive have a higher price.
There is one group of miners for whom electricity costs and Bitcoin price don't really matter much: home miners in cold regions whose homes used electrical resistance heating. Almost all of the energy consumed by a computer ends up as heat released directly into the room. A computer is, for most practical purposes, an electrical space heater that is as efficient as a "real" space heater [1]. It's just more complicated and the power consumption (and hence heat output) tends to vary a lot depending on what computation it is doing.
I wonder if this will result in mining eventually becoming mostly a home activity again, as it was when Bitcoin was starting out?
[1] https://www.pugetsystems.com/labs/articles/Gaming-PC-vs-Spac...
There is one group of miners for whom electricity costs and Bitcoin price don't really matter much: home miners in cold regions whose homes used electrical resistance heating. Almost all of the energy consumed by a computer ends up as heat released directly into the room. A computer is, for most practical purposes, an electrical space heater that is as efficient as a "real" space heater [1]. It's just more complicated and the power consumption (and hence heat output) tends to vary a lot depending on what computation it is doing.
I wonder if this will result in mining eventually becoming mostly a home activity again, as it was when Bitcoin was starting out?
[1] https://www.pugetsystems.com/labs/articles/Gaming-PC-vs-Spac...
This logic is flawed because it doesn't consider the fact that we have more efficient heaters than electric space heaters. In particular, the two main alternatives are gas (more efficient because you skip inefficient fuel -> electricity steps) and heat pumps (more efficient because you draw in heat from outside). Compared to these alternatives, Bitcoin miners make very, very inefficient heaters.
> Compared to these alternatives, Bitcoin miners make very, very inefficient heaters
...which is why I specifically talked about people "whose homes used electrical resistance heating". Many areas do not have gas available by pipe, and having it delivered by truck in liquid form is often expensive. People living in rental units may not be allowed to install a heat pump, and heat pumps have a high up front cost that keeps out many people who aren't blocked by any other restrictions.
Also, even people with other, more efficient, heat sources might have situations where electrical resistance heat makes sense. For example, it may save money at night to turn down a whole house heat pump to a level that would be uncomfortably cold, and use an electrical space heater to just keep your bedroom warmer.
...which is why I specifically talked about people "whose homes used electrical resistance heating". Many areas do not have gas available by pipe, and having it delivered by truck in liquid form is often expensive. People living in rental units may not be allowed to install a heat pump, and heat pumps have a high up front cost that keeps out many people who aren't blocked by any other restrictions.
Also, even people with other, more efficient, heat sources might have situations where electrical resistance heat makes sense. For example, it may save money at night to turn down a whole house heat pump to a level that would be uncomfortably cold, and use an electrical space heater to just keep your bedroom warmer.
Currency that is guaranteed to be deflationary sure has its problems. But taking ideology and using it for every day stuff aside, why wouldn't you want to own some?
Exactly: own some. Not spend some, hence the problem with using it as a currency.
I'm not sure that is a real problem. You own some, then when you want to spend, you spend. The fact that it is deflationary means you might postpone your purchase, but ultimately, you will need to eat/travel/etc more than you need to "own" currency. Or are there other problems?
The issue is that, in a smoothly deflating currency, all but the most essential consumption will be postponed indefinitely, as will investment of that currency in anything that expects to return less than the rate of deflation. This is bad for an economy denominated entirely in that currency, as the deduction in economic activity can increase the rate of deflation, which reduces economic activity further, and so on.
Obviously bitcoin is not the primary currency for any economy, so the feedback effect isn't a concern, but the deflationary pressure is (per TFA) reducing actual economic activity denominated in bitcoin.
Obviously bitcoin is not the primary currency for any economy, so the feedback effect isn't a concern, but the deflationary pressure is (per TFA) reducing actual economic activity denominated in bitcoin.
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Pardon my french but what the fuck do you do with a number that you "own"? The whole point of a currency is to be spent as opposed to be "owned".
> For example, a fixed reward split between a growing group of miners will also cause a rising price floor. The miners will not sell for less than their electricity costs
Sure they will. They’ll have to if there are more sellers than buyers. Sellers are poor things at creating “floors” unless they’re in collusion. Bitcoin is famously decentralized so good luck with that.
Sure they will. They’ll have to if there are more sellers than buyers. Sellers are poor things at creating “floors” unless they’re in collusion. Bitcoin is famously decentralized so good luck with that.
Fantastic assessment. I hadn't thought about it in these terms before, but agree strongly.
> A currency with no mechanism for monetary policy is not going to be adopted.
...except that bitcoin has been adopted, just not widely. Your basic premise is false.
...except that bitcoin has been adopted, just not widely. Your basic premise is false.
Bitcoin has only been around for a decade, and for most of that time its adoption was driven more by ideological support by libertarians and anarchists than by technical or economic advantages. After ideological reasons the next biggest driver was misunderstanding of its technical features by people who thought they were getting anonymity. Even ignoring the criminals and ideologically-driven adopters, you do not really have large-scale acceptance, because most businesses that claim to accept Bitcoin are only doing so via services that immediately convert the payments to fiat currencies (i.e. these supposed "adopters" are really accepting fiat currency and have no particular desire to receive, use, or hold Bitcoin).
The basic premise of Bitcoin as a currency has always been questionable. With each passing year the premise has become more questionable -- there is the extreme volatility, the enormous energy tax, the inability of anyone to respond to liquidity or credit crunches (and the deflationary nature that encourages such problems) and the ever unclear driver of BTC demand (why would I want a BTC payment, especially when I need to make certain legally-mandated payments that are only payable in my nation's fiat currency?).
The basic premise of Bitcoin as a currency has always been questionable. With each passing year the premise has become more questionable -- there is the extreme volatility, the enormous energy tax, the inability of anyone to respond to liquidity or credit crunches (and the deflationary nature that encourages such problems) and the ever unclear driver of BTC demand (why would I want a BTC payment, especially when I need to make certain legally-mandated payments that are only payable in my nation's fiat currency?).
> it is always deflationary
Except for the fact that it is currently, and always has been, inflationary.
You need to learn more about economics.
Inflation/Deflation is a separate phenomenon than rising/falling value — though they are sometimes related.
Except for the fact that it is currently, and always has been, inflationary.
You need to learn more about economics.
Inflation/Deflation is a separate phenomenon than rising/falling value — though they are sometimes related.
It is by definition deflationary due to its restricted supply. This would not be so much of a problem at the moment, if it wasn't for the fact that people started treating it as an asset in its own right, rather than an experimental medium of exchange. Most people have lost sight of the fact that it is the first iteration of a series of experiments to create a decentralised mechanism of value transfer. It wasn't going to be right the first time round.
Sometimes I feel that criticising Bitcoin for it's failures is like criticising Edison based on his first attempt at inventing the light bulb!
Sometimes I feel that criticising Bitcoin for it's failures is like criticising Edison based on his first attempt at inventing the light bulb!
I think of Bit<oin as the MS-DOS of e1e<troni< <urren<ies.
MS-DOS was successful. Perhaps CPM is a better choice?
Well CPM wasn’t a failure because MS-DOS was better technically. It was more down to other factors like IBM selling it for a much lower price than CPM for the IBM-PC.
So to the original comment I think the poster means it’s like MS-DOS, but Windows or some such will come next and bring it to the mainstream.
So to the original comment I think the poster means it’s like MS-DOS, but Windows or some such will come next and bring it to the mainstream.
Bit<oin is a1so su<<essfu1. And a few years 1ater, we're 1eft wondering how we managed with 8.3 fi1enames.
It sounds weird, but I think a big part of Bitcoin's, and other crypto's value, isn't in the day to day ability to use it to buy and sell things, it's the inability of the government to devalue it.
This isn't as big a problem in many richer countries with relatively stable currencies, but I sure as hell would prefer Bitcoin to anything the Venezuelan government or the Argentinian government would issue.
The kinks are still getting worked out for Bitcoin, but I still think it is a big game changer.
This isn't as big a problem in many richer countries with relatively stable currencies, but I sure as hell would prefer Bitcoin to anything the Venezuelan government or the Argentinian government would issue.
The kinks are still getting worked out for Bitcoin, but I still think it is a big game changer.
I mean, what advantage does it have over gold?
Advantages of gold vs. Bitcoin:
- gold is pretty easy to find, not that hard to buy for the average consumer; BTC is anything but
- gold is physical in form and securing it is not hard; BTC is not physical, exchanges get hacked with losses to accounts, in the event of a natural disaster or some event where power generation and internet is lost you lose access to BTC. (Someone can come break in and loot your gold, but people could also do that with your BTC wallet credentials, and if people are doing that you have worse things to worry about)
- gold at least has some kind of floor value, since it does have uses other than a currency store; the same is not true for BTC
Advantages of gold vs. Bitcoin:
- gold is pretty easy to find, not that hard to buy for the average consumer; BTC is anything but
- gold is physical in form and securing it is not hard; BTC is not physical, exchanges get hacked with losses to accounts, in the event of a natural disaster or some event where power generation and internet is lost you lose access to BTC. (Someone can come break in and loot your gold, but people could also do that with your BTC wallet credentials, and if people are doing that you have worse things to worry about)
- gold at least has some kind of floor value, since it does have uses other than a currency store; the same is not true for BTC
Maybe its a generational thing, but i have no clue how i would go about buying/trading gold and i dont think anyone in my friend group does either. Bitcoin is far more accessible.
You can literally go to a gold dealer shop; it's like forex for gold. Even in my moderately sized American city there are twenty that show up in Google Maps within a twenty minute drive. And you buy gold and it's physically in your possession; verifying it is easy, and the best part is you can verify it at some other gold dealer if you're super paranoid.
With BTC, you have to find a trusted exchange and a trusted wallet. The average consumer doesn't really know anything beyond a google search and the first two results.
With BTC, you have to find a trusted exchange and a trusted wallet. The average consumer doesn't really know anything beyond a google search and the first two results.
> verifying it is easy
Actually, it's not. It's nearly impossible to non-destructively distinguish gold from tungsten wrapped in gold.
Actually, it's not. It's nearly impossible to non-destructively distinguish gold from tungsten wrapped in gold.
Actually, not that hard. The speed of sound in tungsten is easily twice that of gold, hitting it with a hammer and analyzing the response on the other hand will easily tell you that it's tungsten or gold. In theory, a smartphone app could do it.
You can also test shear forces on the bar, a test you can perform easily at the bank itself (or any of the other material forces tests really). Those do usually require a bit of machinery.
Lastly, you can measure electric resistance. A gold bar will have a different resistance than a tungsten bar, especially if you compare a frequency sweep AC resistance vs DC resistance (if there is a difference, which should be about 20nOhm/m vs 50nOhm/m for Gold/Tungsten, you know the material has a core that is different from the outside).
You can also test shear forces on the bar, a test you can perform easily at the bank itself (or any of the other material forces tests really). Those do usually require a bit of machinery.
Lastly, you can measure electric resistance. A gold bar will have a different resistance than a tungsten bar, especially if you compare a frequency sweep AC resistance vs DC resistance (if there is a difference, which should be about 20nOhm/m vs 50nOhm/m for Gold/Tungsten, you know the material has a core that is different from the outside).
> Lastly, you can measure electric resistance. A gold bar will have a different resistance than a tungsten bar, especially if you compare a frequency sweep AC resistance vs DC resistance (if there is a difference, which should be about 20nOhm/m vs 50nOhm/m for Gold/Tungsten, you know the material has a core that is different from the outside).
Electric current mostly travels on the surface of a material. Gold-plated tungsten might not have sufficiently different resistance from pure gold, if the plating is thick enough.
Electric current mostly travels on the surface of a material. Gold-plated tungsten might not have sufficiently different resistance from pure gold, if the plating is thick enough.
This is only the case in AC (skin effect). DC penetrates the entire conductor.
The higher the frequency the less you penetrate the material (self-induction in the material forces the electrons outwards).
This enables you to effectively do a sweep of material composition by increasing frequency and measuring the resistance. In theory you could even tell if the core was not conductive at all (due to the resistance not changing despite lower frequency).
So even if the plating was thick, you would be able to tell because the resistance curve begins to change at lower frequencies due to Tungsten having a higher resistance.
If your device is really accurate you could even measure the rough area of the core since skin effect is proportional to the square of the resistivity.
The higher the frequency the less you penetrate the material (self-induction in the material forces the electrons outwards).
This enables you to effectively do a sweep of material composition by increasing frequency and measuring the resistance. In theory you could even tell if the core was not conductive at all (due to the resistance not changing despite lower frequency).
So even if the plating was thick, you would be able to tell because the resistance curve begins to change at lower frequencies due to Tungsten having a higher resistance.
If your device is really accurate you could even measure the rough area of the core since skin effect is proportional to the square of the resistivity.
That's why it makes senss to only buy gold cast in a thin shape (like a coin). It's much harder to cast in any meaningfully large tungsten core and it significantly raises the likelihood of that fake core being discovered as one can verify the authenticity of the gold piece by scraping away a millimeter or two of gold using basic hand tools.
Considering how expensive gold is per ounce, it's not like any of us will be buying it by the bar.
Considering how expensive gold is per ounce, it's not like any of us will be buying it by the bar.
Maybe not those massive bars, but if we’re talking about being in a country where you can’t trust the government at all with the currency, wouldn’t you want to store most of your savings in gold or something similar? So just thousands of coins I guess? Arr me matey
> where you can’t trust the government at all with the currency
Executive Order 6102.
If you're in a country where you can't trust the government, you lost. The government can take away your gold, your government can take away your bitcoins.
If "the government has become the enemy" is a problem, then you've got bigger problems at hand.
Executive Order 6102.
If you're in a country where you can't trust the government, you lost. The government can take away your gold, your government can take away your bitcoins.
If "the government has become the enemy" is a problem, then you've got bigger problems at hand.
Any SEM with an EDS system will tell you non-destructively if you have tungsten wrapped in gold. X-Ray diffractometry would also do the same. Rutherford Backscattering spectrometry too. All three of these techniques are non-destructive and the first two are quite common to find at universities.
I guess you and I have different intuitions about the meaning of the word "easy".
That's quite a leap from "you can verify at some other gold dealer" though.
It is also a very large leap from “let’s just drill it at random locations” that an actual gold dealer will try first if they suspect something like this. The drill bit not going through the bar like butter at the location will probably be the first tip-off.
meanwhile verifying bitcoin is trivial. hackernews is the one demographic i was hoping would understand that. has something changed?
Do you have any first hand experience with buying gold from local dealers? I've never really looked into it but the vast majority of gold dealers in my city are also pawn shops geared toward purchasing gold rather than selling it. While I'm unsure as to their exact pricing model for selling gold, the way in which pawn shops are known to buy precious metals leads me to believe I'd be paying significantly more than whatever the current spot price is if I was to buy through them.
The safest way to buy physical gold is directly from a mint like the US or Canadian mint (obviously assuming you trust the government/mint in question).
The next best is to use a trusted dealer and buy the mint products that have verifiable serial numbers. For example:
https://www.apmex.com/product/98353/1-oz-gold-bar-royal-cana...
Canadian Mint 1oz bar, at a small mark-up over the price of gold. Comes sealed and has a serial number.
The next best is to use a trusted dealer and buy the mint products that have verifiable serial numbers. For example:
https://www.apmex.com/product/98353/1-oz-gold-bar-royal-cana...
Canadian Mint 1oz bar, at a small mark-up over the price of gold. Comes sealed and has a serial number.
Now that is an actually reasonable markup. I guess my only concern there would be shipping, which can be insured but gets a bit pricey when you're insuring $1,200. Thanks for the link!
American Eagle Gold coins are US-Government issued, serial-number stamped official Gold coins of the US Government.
Created by the US Mint, you have strong assurances that you are recieving in fact, 91.67% gold / 22 karat (an alloy, because pure gold is too soft for the typical consumer).
If you do want 99.99% Gold / 24 karat, the US Mint also makes the Buffalo coin. But that's usually harder to store.
American Eagle coins are super easy to obtain and trade. Just go to any gold shop and ask for an American Eagle gold coin.
Created by the US Mint, you have strong assurances that you are recieving in fact, 91.67% gold / 22 karat (an alloy, because pure gold is too soft for the typical consumer).
If you do want 99.99% Gold / 24 karat, the US Mint also makes the Buffalo coin. But that's usually harder to store.
American Eagle coins are super easy to obtain and trade. Just go to any gold shop and ask for an American Eagle gold coin.
1 oz gold spot is $1210 per ounce [1]
1 oz American Eagle coin direct from the mint? $1,490 [2]
That's a 23% "transaction fee". You'll get much much lower buying gold (or bitcoin) from somebody else.
[1] http://www.kitco.com/charts/livegold.html
[2] https://catalog.usmint.gov/american-eagle-2018-one-ounce-gol...
1 oz American Eagle coin direct from the mint? $1,490 [2]
That's a 23% "transaction fee". You'll get much much lower buying gold (or bitcoin) from somebody else.
[1] http://www.kitco.com/charts/livegold.html
[2] https://catalog.usmint.gov/american-eagle-2018-one-ounce-gol...
You certainly don't buy gold coins directly from the mint.
You buy them at only a bit higher than spot price from 3rd party distributors. For example: https://www.apmex.com/product/1/1-oz-gold-american-eagle-bu-...
American Eagle coins have a slight premium, due to their guarentee by the USA Mint itself. If you don't care about serial numbers and want to just have bullion, you can buy other gold coins. But American Eagles are great because they are enforced by the powers of the US Government itself. So you get a bit of security (and therefore, the price of the coin is slightly higher compared to gold).
But not much higher. Really, it isn't. Checkout 3rd party sites like apmex or your local gold shop if you don't believe me.
You buy them at only a bit higher than spot price from 3rd party distributors. For example: https://www.apmex.com/product/1/1-oz-gold-american-eagle-bu-...
American Eagle coins have a slight premium, due to their guarentee by the USA Mint itself. If you don't care about serial numbers and want to just have bullion, you can buy other gold coins. But American Eagles are great because they are enforced by the powers of the US Government itself. So you get a bit of security (and therefore, the price of the coin is slightly higher compared to gold).
But not much higher. Really, it isn't. Checkout 3rd party sites like apmex or your local gold shop if you don't believe me.
The Gold Eagles sold direct to consumers by the mint are either "proofs" -- struck with a special finish, or a special minting targeted towards collectors. You're paying a premium for the "W" mint-mark and fancy box.
They also make a non-collector version and sell them to bullion dealers, who then mark them up modestly for retail. To get access to them direct, you're probably buying hundreds of coins at a time.
They also make a non-collector version and sell them to bullion dealers, who then mark them up modestly for retail. To get access to them direct, you're probably buying hundreds of coins at a time.
There are currency exchangers in every major city who trade BTC for paper cash, same as gold dealers.
Friend of mine had like 3 kgs of silver. He bought it at UBS - first wandering in asking about buying silver got him some strange looks (he looks like a programmer) but when he said how much silver he needs clerks became more friendly. He stored it in an old plastic supermarket bag in his clothes closet.
It’s pretty easy to just buy $GLD with any brokerage account if you just want gold exposure. If you don’t trust the ETFs to honor your claims when the apocalypse arrives things are harder of course.
You are but one google search away from discovering the local coin shop - if you live in US at least. Other countries may be different, in some it would indeed be a challenge. Bitcoin is accessible as far as you trust middlemen, having local bitcoin setup with a secure wallet is not something average consumer would feel comfortable with, last time I checked.
You can buy bullion at close to spot prices on eBay from trusted sellers (APMEX or Kitco or JM Bullion)
You just Google for "buy gold" just like you would for anything else.
I would say the same about bitcoin.
Bitcoin advantage: easily and instantly divisible. Gold not so much.
Bitcoin advantage: weighs nothing, highly transportable. Gold not so much.
Bitcoin advantage: weighs nothing, highly transportable. Gold not so much.
> Bitcoin advantage: easily and instantly divisible. Gold not so much.
Not so important for a store of value.
> Bitcoin advantage: weighs nothing, highly transportable. Gold not so much.
Yet requires an order of magnitude more skill and overhead to handle.
Not so important for a store of value.
> Bitcoin advantage: weighs nothing, highly transportable. Gold not so much.
Yet requires an order of magnitude more skill and overhead to handle.
Hardware wallets are stupid simple to use for BTC.
Stupid simple for you maybe. The average person in the developed world would disagree, ignoring people in a third world country like Venezuela (the example that prompted this comment thread) who likely don't even have a computer.
(bangs head on the wall)
> what advantage does it have over gold?
can you point me to words "store", "of" and "value" in the above question?
> order of magnitude more skill and overhead to handle
only if you assume handling gold means dropping the gold bar in your basement and never touching it again?
> what advantage does it have over gold?
can you point me to words "store", "of" and "value" in the above question?
> order of magnitude more skill and overhead to handle
only if you assume handling gold means dropping the gold bar in your basement and never touching it again?
> can you point me to words "store", "of" and "value" in the above question?
Bitcoin is up the past couple of weeks. So inevitably, the BTC community will be calling it a store of value.
I think the general community is just reacting to the moving goalposts. When BTC's value is up, its a store of value. When its value is down, BTC's value is its transactions.
Bitcoin is up the past couple of weeks. So inevitably, the BTC community will be calling it a store of value.
I think the general community is just reacting to the moving goalposts. When BTC's value is up, its a store of value. When its value is down, BTC's value is its transactions.
the question was what advantages bitcoin has over gold. one of the answers was divisibility. that answer was rejected by GP's comment because "irrelevant to store of value aspect" i'm just pointing out that this reason for rejection of a valid argument is plain dumb.
Gold bar? The example that prompted this thread was Venezuela. The average Venezuelan can maybe afford some gold jewelry that has been passed down through the family, much less an entire gold ingot.
In this context, it's much harder to protect gold from the government (if it decides it wants to take it away).
Plus buying stuff online is more tricky.
I could envision alternative reality though, where there are companies specializing in providing tokens that have 100% coverage in gold. You would need to trust them and their software, but some trust is always involved. The problem is those would be an easy target with physical holdings (so the problem of the gov comes back, but they could choose under which gov to operate). In that scenario, if the problem gets big enough the gov will take care of it, no matter where on the planet is that gold. In the case of Bitcoin though, while temporarily it can be hampered very easily, it's quite impossible to make it completely go away.
The biggest point for gold IMO which you didn't mention, since all value comes from people and their beliefs, is thousands of years vs 10 years.
Plus buying stuff online is more tricky.
I could envision alternative reality though, where there are companies specializing in providing tokens that have 100% coverage in gold. You would need to trust them and their software, but some trust is always involved. The problem is those would be an easy target with physical holdings (so the problem of the gov comes back, but they could choose under which gov to operate). In that scenario, if the problem gets big enough the gov will take care of it, no matter where on the planet is that gold. In the case of Bitcoin though, while temporarily it can be hampered very easily, it's quite impossible to make it completely go away.
The biggest point for gold IMO which you didn't mention, since all value comes from people and their beliefs, is thousands of years vs 10 years.
> In this context, it's much harder to protect gold from the government (if it decides it wants to take it away).
If you're to the point where some authority is forcefully taking your assets away, I'd much rather have physical possession of gold than Bitcoin. You can bury gold somewhere and pretend you don't have it. Bitcoin, on the other hand, takes place on a public ledger, so they can, in theory, always track it down. And a thug who's willing to take your gold at gunpoint will be equally happy to take your wallet keys at gunpoint.
In terms of @#*%ing up the economy, governments are just as able to trash the Bitcoin economy as they were to trash the gold economy 100 years ago. Using exactly the same methods, too.
If you're to the point where some authority is forcefully taking your assets away, I'd much rather have physical possession of gold than Bitcoin. You can bury gold somewhere and pretend you don't have it. Bitcoin, on the other hand, takes place on a public ledger, so they can, in theory, always track it down. And a thug who's willing to take your gold at gunpoint will be equally happy to take your wallet keys at gunpoint.
In terms of @#*%ing up the economy, governments are just as able to trash the Bitcoin economy as they were to trash the gold economy 100 years ago. Using exactly the same methods, too.
It's much more practical to obfuscate ownership of BTC (buy it pseudononymously with paper cash, send it through a mixer or XMR) than it is to bury gold.
The buried gold is hard to access, not portable, and you would have to be damn sure some hobo didn't see you bury it.
The buried gold is hard to access, not portable, and you would have to be damn sure some hobo didn't see you bury it.
I mean, if the government is trying to take gold away, they're probably not that far from trying to take BTC away. And governments are more than willing to do things like cut off external internet access, power, and all the other necessary infrastructure for BTC. Gold has less infrastructure requirement than BTC; and if your government is willing to beat you bloody for your gold, they're probably also willing to beat you bloody for your BTC wallet credentials.
If the government wants your gold or private key, they’re going to get it. How long are you going to hold out against their proverbial $5 rubber hose? Solitary confinement? Mundane legal threats?
How does it know you have one? You can use brain wallet[1], you can use trezor with multiple passphrases. You can give up some of your bitcoins and if you manage your wallets properly then no one can prove you have some more.
1. Don't use brain wallets, unless you really understand security
1. Don't use brain wallets, unless you really understand security
It doesn’t work that way. You spend a week in a cold dirty room with insects, hungry, isolated, misinformed with worst fears and perspectives. Occasionally you speak with an interrogator who can bet on the time of your mental breakdown by simply looking at you for a minute. This is a well-known procedure that doesn’t even require a knowledge of what should be revealed. Trained people can stand it if stakes are high (military high, not your extra BTC), but don’t overestimate yourself. You will break down not even being touched by a finger.
Gee, that got pretty dark. We are just comparing options here. Physical things are easier to get from you. It's hard to argue otherwise since information can be represented as a physical thing, but it gives you more options. You can split your private key between 5 friends you trust and make 3 of 5 required (+ password why not) and in general get pretty creative.
If you are spending a week in a cold dirty room etc., and especially if some gov got you there, I don't think it matters much how guilty you are or what wealth do you have. They own you.
If you are spending a week in a cold dirty room etc., and especially if some gov got you there, I don't think it matters much how guilty you are or what wealth do you have. They own you.
Because at some point you have to pay taxes, or break the law. They nailed Al Capone, and you’re not Al Capone. I suppose you could buy it in secret and never liquidate it, spend it, or declare it... and therefore never benefit from it. I guess that’s a “win” in some books? Otherwise the answer to your question is pretty obvious, and ends with you in prison.
I don't see how taxes are in any way relevant to this discussion. Definitely do pay your taxes. I was answering to a specific question, the bad guy here can just as well be somebody who is trying to rob you.
But if it helps you, think about some other government, not necessarily the US one. Do you think they all do the right thing? Should you or should you not be able to help your starving family in Venezuela?
They really can't all be doing "the right thing" because they have wars between each other. And those are legal in their books. But you probably want to play along however imperfect rules your government sets, that is until you want to escape the country and you don't want it to be your government anymore. Because e.g. you don't feel like killing every Jew you know and that just became the law.
But if it helps you, think about some other government, not necessarily the US one. Do you think they all do the right thing? Should you or should you not be able to help your starving family in Venezuela?
They really can't all be doing "the right thing" because they have wars between each other. And those are legal in their books. But you probably want to play along however imperfect rules your government sets, that is until you want to escape the country and you don't want it to be your government anymore. Because e.g. you don't feel like killing every Jew you know and that just became the law.
The US Government has the ability to extract money from you legally. It holds the power of taxation.
If the US Government, tomorrow, declares a 100% tax on Bitcoin, they can legally posess all of your BTC or... make you a criminal.
See Executive Order 6102 for historical precedent. FDR declared Gold to be illegal and took it from most Americans. At which point, you either gave up your gold, or became a gold smuggler. The US functioned as such until Nixon removed the executive order.
If the US Government, tomorrow, declares a 100% tax on Bitcoin, they can legally posess all of your BTC or... make you a criminal.
See Executive Order 6102 for historical precedent. FDR declared Gold to be illegal and took it from most Americans. At which point, you either gave up your gold, or became a gold smuggler. The US functioned as such until Nixon removed the executive order.
I’m not concerned about rubber hoses on me as much as I’m concerned about threats to my friends and family. I wouldn’t hold out very long at all.
[deleted]
https://www.deepdotweb.com/2014/07/29/vendor-xanaxking-anti-...
> To date, agents have seized over $200,000 in cash and $25,000 in Bitcoins from Defendant’s operation.
> …It is critical to note, however, that this figure represents a small fraction of the proceeds that were flowing to Defendant. The cash seized came only from funds that Defendant had on hand on May 28, 2014, and from an earlier limited seizure of packages. As discussed above, Defendant’s operation was high-volume and lucrative, and agents do not know where Defendant has hidden the rest of the money.
> While agents made a limited seizure of only $25,000 in Bitcoins from Defendant, it is possible that he has access to significantly greater quantities of this currency.
https://www.deepdotweb.com/2018/01/11/darknet-vendor-dutchki...
> The ex-boyfriend may have earned even more money, but he told the court that he had forgotten the passwords needed to access one of his laptops.
https://www.theguardian.com/uk-news/2018/mar/21/manchester-s...
> The value of their sales was at least £812,000, the court heard, but their profits are likely to have grown exponentially due to the rise in the value of bitcoin over the period. Prosecutors have so far been unable to trace Assaf’s bitcoin.
There are hundreds of other cases in which they didn't seize 100% of the suspect's BTC.
The cases in which they do seize 100% get more media attention, but they are actually in the minority.
> To date, agents have seized over $200,000 in cash and $25,000 in Bitcoins from Defendant’s operation.
> …It is critical to note, however, that this figure represents a small fraction of the proceeds that were flowing to Defendant. The cash seized came only from funds that Defendant had on hand on May 28, 2014, and from an earlier limited seizure of packages. As discussed above, Defendant’s operation was high-volume and lucrative, and agents do not know where Defendant has hidden the rest of the money.
> While agents made a limited seizure of only $25,000 in Bitcoins from Defendant, it is possible that he has access to significantly greater quantities of this currency.
https://www.deepdotweb.com/2018/01/11/darknet-vendor-dutchki...
> The ex-boyfriend may have earned even more money, but he told the court that he had forgotten the passwords needed to access one of his laptops.
https://www.theguardian.com/uk-news/2018/mar/21/manchester-s...
> The value of their sales was at least £812,000, the court heard, but their profits are likely to have grown exponentially due to the rise in the value of bitcoin over the period. Prosecutors have so far been unable to trace Assaf’s bitcoin.
There are hundreds of other cases in which they didn't seize 100% of the suspect's BTC.
The cases in which they do seize 100% get more media attention, but they are actually in the minority.
>where power generation and internet is lost you lose access to BTC
You don't need the internet nor the power grid to use bitcoin.
To use bitcoin via the Lightning Network minimally, you need a CPU and a method to transmit data.
CPU: phone
Transmit Data: Bluetooth, QR code/camera.
Electricity for your phone: Cheap emergency solar panel
You don't need the internet nor the power grid to use bitcoin.
To use bitcoin via the Lightning Network minimally, you need a CPU and a method to transmit data.
CPU: phone
Transmit Data: Bluetooth, QR code/camera.
Electricity for your phone: Cheap emergency solar panel
> You don't need the internet nor the power grid to use bitcoin.
> To use bitcoin via the Lightning Network minimally, you need a CPU and a method to transmit data.
How do you verify that your opposing party actually has bitcoins to send to you?
> To use bitcoin via the Lightning Network minimally, you need a CPU and a method to transmit data.
How do you verify that your opposing party actually has bitcoins to send to you?
The Lightning Network? Really?
It’ll save us all - and work perfectly without the internet too!
How are gold bars easier to secure and transport than private keys?
Securing bitcoin is much easier than securing gold. Gold can be confiscated easily; bitcoin is much harder, especially with things like brainkeys.
Additionally, gold does not have a built in global teleporter. Bitcoin does. I can send basically an unlimited quantity of value to anyone with internet access in minutes with bitcoin; the same is not possible with gold.
If bitcoin is only useful for global remittance and bypassing the long-distance-money-transfer cartels of the world, it is an insanely valuable tool. My estimation is that it is valuable for at least that, and probably several other things as well (e.g. online payments for physical goods that are subject to high chargeback risk, et c).
Additionally, gold does not have a built in global teleporter. Bitcoin does. I can send basically an unlimited quantity of value to anyone with internet access in minutes with bitcoin; the same is not possible with gold.
If bitcoin is only useful for global remittance and bypassing the long-distance-money-transfer cartels of the world, it is an insanely valuable tool. My estimation is that it is valuable for at least that, and probably several other things as well (e.g. online payments for physical goods that are subject to high chargeback risk, et c).
> I mean, what advantage does it have over gold?
It's electronic. That is the only advantage, but it's a huge one considering that virtually all (yes, virtually all) money transfers are done electronically today.
It's electronic. That is the only advantage, but it's a huge one considering that virtually all (yes, virtually all) money transfers are done electronically today.
The fact that you can use it electronically.
Can't figure out if this is sarcasm...
I'm surprised about the downvotes, for me the following arugments can't be taken seriously?
"gold is pretty easy to find, not that hard to buy for the average consumer; BTC is anything" ... You can buy BTC with your credit card no KYC needed or you can mine it yourself. Are you gonna start mining gold? If you want to buy to gold you need a trading account, or you order gold and it gets delivered to you, not as simple as buying BTC at all.
"gold is physical in form and securing it is not hard" ... You need a safe and/or insurance, much more complicated then using a password/cold wallet.
"gold at least has some kind of floor value" ... The floor value is really small if you remove the speculative aspect of gold.
"gold is pretty easy to find, not that hard to buy for the average consumer; BTC is anything" ... You can buy BTC with your credit card no KYC needed or you can mine it yourself. Are you gonna start mining gold? If you want to buy to gold you need a trading account, or you order gold and it gets delivered to you, not as simple as buying BTC at all.
"gold is physical in form and securing it is not hard" ... You need a safe and/or insurance, much more complicated then using a password/cold wallet.
"gold at least has some kind of floor value" ... The floor value is really small if you remove the speculative aspect of gold.
I'll add to this -
As someone who's country is actively looking at expropriation of white-owned land a bank account that NO ONE can access without your permission is hugely appealing. If you're living in a country with functioning institutions you take this for granted
As someone who's country is actively looking at expropriation of white-owned land a bank account that NO ONE can access without your permission is hugely appealing. If you're living in a country with functioning institutions you take this for granted
> If you're living in a country with functioning institutions you take this for granted
people in developed world don't even realize how many things they take for granted.
people in developed world don't even realize how many things they take for granted.
Which country is this?
South Africa I presume
Yup
Well, the issue is complex and not as clear cut as Trump or Fox News would say. For example, land seized during apartheid has to be returned. Of course this would mean some white farmers would have to give back some of their land.
That's not what's being tabled up for discussion - land forcefully taken during apartheid already has an existing process and that land is mostly urban.
What's being discussed is forcible taking of white owned land 'just because' - there is no subtle point. That is the entire discussion.
What's being discussed is forcible taking of white owned land 'just because' - there is no subtle point. That is the entire discussion.
The biggest part is plain and simple speculation. Betting on bitcoin and other crypto is like betting on human greed. Bitcoin could possibly be worth 1 million dollar, that is the main attractor. It is gambling, but in a fairly transparent and decentralized manner. I don't think it is fair to call it a ponzi (which it is not by definition because of the lack of a central actor) and also not a pyramid scheme (because it has genuine valid use cases).
It is just a market of buyers and sellers, extremely volatile and in a very immature and experimental state.
It is just a market of buyers and sellers, extremely volatile and in a very immature and experimental state.
I used to think that, but bitcoin didn't go up despite the currency collapse there. The problem is the vast majority of Venezuelans are too poor to buy even a fraction of a bitcoin. Hyperinflation destroys wealth very quickly, so often everyone it too poor by the time they can do anything. The wealthier people put their money overseas or in gold.
When I was there (20 years ago though), diamonds, gold nuggets and hundred dollar bills were fairly common forms of portable wealth. The banks and cash were never trusted (they were shut down when I was there), and the country mines gold.
> inability of the government to devalue it.
This sounds like it seriously underestimates just how much influence a government can have.
First and foremost, they can make it illegal. This would immediately make the fact it can't be devalued moot, as people who'd use it become criminals by default.
This sounds like it seriously underestimates just how much influence a government can have.
First and foremost, they can make it illegal. This would immediately make the fact it can't be devalued moot, as people who'd use it become criminals by default.
It is weird, if you can't buy and sell with bitcoin daily(whatever that means) what value does it have for you?
Illiquid investments can still have value if they’re out of the reach of governments. (Governments can’t decide the exchange rate, or tax/confiscate them)
This is a stretch in the US, but less so elsewhere.
I’m not a holder because it’s too speculative an investment for me.
This is a stretch in the US, but less so elsewhere.
I’m not a holder because it’s too speculative an investment for me.
So what happens when one actually does wants to liquidate?
Go into another currency. (Yes it’s risky, but not compared to cash in Venezuela)
How does one liquidate an illiquid asset into another currency?
You hit the nail on the head. Hodling is, in some cases, the best use case for Bitcoin.
There is a reason why an investor that holds a security until it is worthless is called a "bag holder". It makes no sense to "invest" in any currency when you can own productive assets instead. If you are concerned about the government seizing your assets, I would suggest emigrating to a country that respects private property rights. Countries that undergo hyperinflation are fairly rare, and the citizens of those countries tend to not tolerate it for very long. (Research dollarization of Ecuador and Zimbabwe)
Your argument is also applicable to gold yet it doesn't hold there
My argument holds for gold as well. Do some research on ROI for gold against the stock market for the past 80 years. You will find that it has a pitiful return when compared to owning stocks. Gold is a non productive asset, just because people buy it when there is a market panic doesn't make it a wise decision (people do dumb things during market panics).
If you hoard gold you also run the risk of someone finding a lot of gold and ruining your investment. It's a commodity just like coal, copper, or wheat. If someone told you to hold all of your money in coal, the advice would be just as valid as those who tell you to put money in gold. At the end of the day if you have no productive use for the asset, why hold it?
If you hoard gold you also run the risk of someone finding a lot of gold and ruining your investment. It's a commodity just like coal, copper, or wheat. If someone told you to hold all of your money in coal, the advice would be just as valid as those who tell you to put money in gold. At the end of the day if you have no productive use for the asset, why hold it?
> There is a reason why an investor that holds a security until it is worthless is called a "bag holder". It makes no sense to "invest" in any currency when you can own productive assets instead.
The price of gold is nonzero for a good amount of years (2k+), so a lot of people buy/hold it and in that sense your theory is incorrect.
Also productivity is not everything, sometimes "keeping what you have" is much more important.
Finally, there are situations where you cannot
- just emigrate to a country that respects your property rights (see migrant crisis)
- buy US or other stocks
> Do some research on ROI for gold against the stock market for the past 80 years. You will find that it has a pitiful return when compared to owning stocks
Of course, do your research on X and you will find a time when X > stocks > Y. Hell, do it on bitcoin, it outperforms stocks during the last 10 years :-P
> At the end of the day if you have no productive use for the asset, why hold it?
Cheap/anonymous remittance and storing value without trusting a 3rd party are valuable, even if it's not productive.
If you're really convinced about what you say, short gold and bitcoin. You'll get rich if you're correct and wiser if you're not.
The price of gold is nonzero for a good amount of years (2k+), so a lot of people buy/hold it and in that sense your theory is incorrect.
Also productivity is not everything, sometimes "keeping what you have" is much more important.
Finally, there are situations where you cannot
- just emigrate to a country that respects your property rights (see migrant crisis)
- buy US or other stocks
> Do some research on ROI for gold against the stock market for the past 80 years. You will find that it has a pitiful return when compared to owning stocks
Of course, do your research on X and you will find a time when X > stocks > Y. Hell, do it on bitcoin, it outperforms stocks during the last 10 years :-P
> At the end of the day if you have no productive use for the asset, why hold it?
Cheap/anonymous remittance and storing value without trusting a 3rd party are valuable, even if it's not productive.
If you're really convinced about what you say, short gold and bitcoin. You'll get rich if you're correct and wiser if you're not.
Just wait for a day when there is a central banker that simultaneously has half a brain cell and tiniest set of balls. That day you see price of gold crashing in a way that has never seen before. Really, there is no more reason for a modern central bank to hold gold reserves than there is reason to hold ponzicoin reserves.
> Just wait for a day when there is a central banker that simultaneously has half a brain cell and tiniest set of balls.
You do realize that you just implicitly said that you're basically much smarter and more courageous than every central banker in the world. I assume there are more than 10000, so that's not exactly humble.
I'd bet against you but if you're short BTC or gold, we're already betting against each other anyway.
You do realize that you just implicitly said that you're basically much smarter and more courageous than every central banker in the world. I assume there are more than 10000, so that's not exactly humble.
I'd bet against you but if you're short BTC or gold, we're already betting against each other anyway.
I did not imply I would have those balls either.
It has been clear for a while now that Bitcoin is an inferior payment system for the consumer:
* The fees are higher.
* The risk to the consumer is higher.
* The difficulty of use is higher.
* It is accepted at an extremely low amount of vendors and even that is falling.
So you really how to wonder why people ever thought consumers would use it en masse.
* The fees are higher.
* The risk to the consumer is higher.
* The difficulty of use is higher.
* It is accepted at an extremely low amount of vendors and even that is falling.
So you really how to wonder why people ever thought consumers would use it en masse.
One of your points is of dubious validity: fees may not be higher.
Fees went very high when the network became congested; but when it’s not congested, they’re much lower than credit card systems are for normal businesses.
https://bitcoinfees.earn.com/ suggests that right now, what equates to about nine US cents is sufficient for a basic transaction. And if you’re happy to wait an hour, then two cents ought to do you fine.
I’m not sure whether this is a typical rate; I haven’t been keeping an eye on it, and https://core.jochen-hoenicke.de/queue/#30d is hard to read casually. But by the looks of it, a very substantial fraction of transactions have been going through at what will be under ten cents if they’re simple transactions.
Your standard sorts of base rates for accepting credit card transactions are 30¢ + 1.75–2.9%, depending on certain conditions like country and card type.
Fees went very high when the network became congested; but when it’s not congested, they’re much lower than credit card systems are for normal businesses.
https://bitcoinfees.earn.com/ suggests that right now, what equates to about nine US cents is sufficient for a basic transaction. And if you’re happy to wait an hour, then two cents ought to do you fine.
I’m not sure whether this is a typical rate; I haven’t been keeping an eye on it, and https://core.jochen-hoenicke.de/queue/#30d is hard to read casually. But by the looks of it, a very substantial fraction of transactions have been going through at what will be under ten cents if they’re simple transactions.
Your standard sorts of base rates for accepting credit card transactions are 30¢ + 1.75–2.9%, depending on certain conditions like country and card type.
I agree. It's almost hilariously counterintuitive. I recently needed to send a moderate sum of money (4 figures) to someone who lives across the country. There's no obvious reason why this should cost me anything or not happen in the same day. However,
* Checks / ACH takes days to close, plus in many situations you might have to actually mail the person a check
* EFT seems reliable, but takes days and requires having been previously set up and authenticated (which borders on impossible if you don't own both accounts).
* Wiring seems like the obvious solution, but depending on your combination of banks fees are going to be >1% for transactions of my size. I also failed to get a wire to happen in <24 hours online for reasons I still don't understand.
* Using a money sending service like Google Pay sounds reasonable enough, but even assuming you're under the transaction limit and have already set up everything necessary to satisfy their fraud prevention systems, any large amount will still take multiple days to fully clear.
On the other hand, while Bitcoin's slow transaction times are a pain for in-person merchant payments, being able to send even large sums of money reliably in less than an hour for (comparatively) a small fee seems almost miraculous. It's true that if you need to go USD -> BTC -> USD it takes much longer, but that's more a problem with currency exchange than an inherent limitation of the currency itself.
* Checks / ACH takes days to close, plus in many situations you might have to actually mail the person a check
* EFT seems reliable, but takes days and requires having been previously set up and authenticated (which borders on impossible if you don't own both accounts).
* Wiring seems like the obvious solution, but depending on your combination of banks fees are going to be >1% for transactions of my size. I also failed to get a wire to happen in <24 hours online for reasons I still don't understand.
* Using a money sending service like Google Pay sounds reasonable enough, but even assuming you're under the transaction limit and have already set up everything necessary to satisfy their fraud prevention systems, any large amount will still take multiple days to fully clear.
On the other hand, while Bitcoin's slow transaction times are a pain for in-person merchant payments, being able to send even large sums of money reliably in less than an hour for (comparatively) a small fee seems almost miraculous. It's true that if you need to go USD -> BTC -> USD it takes much longer, but that's more a problem with currency exchange than an inherent limitation of the currency itself.
Last week I needed to make a highly time-sensitive transfer of ~20k that had to clear the same day. Chase charged me a flat fee of $25 for the wire (and Ally Bank would have been happy to do it for $20). Chase temporarily froze my account since the payment was so large it was immediately flagged, but I spoke to someone on the phone within a few minutes, verified it was all legitimate, and the transfer was then processed without issue.
I fail to see how Bitcoin could have helped any of this.
I fail to see how Bitcoin could have helped any of this.
I had to do similar a month ago, around $20k as well. It was from my account at BofA to an account at a different bank. I did it all online, and it cost $10 and cleared the next day, so within 24 hours. I did this all online without talking to any person, though I did have to 2FA into my account.
I get that some banks might not be as competent yet, but signs look like they'll all get there in the end.
I get that some banks might not be as competent yet, but signs look like they'll all get there in the end.
is this sarcasm?
> I fail to see how Bitcoin could have helped any of this.
how about:
- not having to pay $25 (btc fee of $0.03 is confirming within an hour, $0.10 is almost guaranted to confirm in 10m)
- "frozen account" is not even a thing
- not having to speak to anyone on the phone
you must be joking.
> I fail to see how Bitcoin could have helped any of this.
how about:
- not having to pay $25 (btc fee of $0.03 is confirming within an hour, $0.10 is almost guaranted to confirm in 10m)
- "frozen account" is not even a thing
- not having to speak to anyone on the phone
you must be joking.
With the price fluctuations, maybe that 20k arrives as 19k. Don’t leave it in bitcoin for too long either. Might turn into 15k.
You're fortunate that it was processed without issue. Banks and governments have vested interest in large money transfers and it could just have easily gone the other way; they could have suspected the money and witheld the transfer and the money until you provided paper documentation of its legitimacy.
Average person pays fees twice. One buying the currency, and a second time at sale. On top of that exchanges have even more fees so, consumers are paying more than just one block chain fee.
That's not a big of a deal as you're making it out to be. I can say this because I use bitcoin regularly in commerce. I pay 3 cents equivalent (typical fast fee over the last handful of months) plus maybe 20 cents if I'm silly and use something like coinbase to purchase bitcoin initially.
And then my transaction clears in 10-20 minutes instead of a day or two like the banks' ACH network.
And then my transaction clears in 10-20 minutes instead of a day or two like the banks' ACH network.
For 0 cents, my bank does overnight transactions.
For 10 cents they do it in under 10 seconds.
SEPA Inst is a thing now.
For 10 cents they do it in under 10 seconds.
SEPA Inst is a thing now.
One benefit of crypto might be that it lights a fire under the ass of banks to improve their services. There is no technical reason why banks can’t match or exceed the convenience of crypto for making money transfers. They just haven’t had enough competition to make it happen yet.
Yes. Here in Sweden we now have a system called Swish[1] that, after some initial setup, lets people make more or less instantaneous transfers to each other and to businesses. It works quite well, is very popular and, for now, is free to use for private individuals. I think one reason we have this system is the fear of bitcoin. (The other is the banks' wish for everyone to stop using cash.)
[1] https://en.wikipedia.org/wiki/Swish_(payment)
[1] https://en.wikipedia.org/wiki/Swish_(payment)
SEPA Inst is planned to offer <10 second transactions for most SEPA banks by end of the year. The transaction costs about 10 cents at my bank (normal SEPA is free).
Yes. But don't forget credit cards offer others services, such as charge refund and fraud protection
I am only quibbling on the statement about fees, not the rest.
Are you talking about credit cards or debit cards? There is a big difference when making a comparison to bitcoin.
The reason why bitcoin doesn't have these features is that there isn't a bank sitting between the two parties doing business. To exchange a bitcoin with somebody, you are essentially trading "in cash". When you do business with somebody directly in cash, the same kind of shortcomings are involved, especially when it's not a transaction with a vendor that has a policy that allows you to return and refund the products you bought using cash when you can provide the receipt.
In fact once you lose the receipt, in most places, if they allows you to return the items you bought, they won't give you back your cash. Rather they will give you the ability to exchange what you returned for something of equal value within the store. They still get to keep the cash you gave them in that scenario.
When it comes to being able to dispute charges on a debit/credit transaction, like I said before, that is only because there is a middle man bank that is holding the funds in escrow. While I am not up to date on the way things are currently regulated with regards to bitcoin, there is nothing technologically getting in the way of somebody being able to build a banking/brokerage type system around bitcoin exchange if they wanted such guarantees.
The reason why bitcoin doesn't have these features is that there isn't a bank sitting between the two parties doing business. To exchange a bitcoin with somebody, you are essentially trading "in cash". When you do business with somebody directly in cash, the same kind of shortcomings are involved, especially when it's not a transaction with a vendor that has a policy that allows you to return and refund the products you bought using cash when you can provide the receipt.
In fact once you lose the receipt, in most places, if they allows you to return the items you bought, they won't give you back your cash. Rather they will give you the ability to exchange what you returned for something of equal value within the store. They still get to keep the cash you gave them in that scenario.
When it comes to being able to dispute charges on a debit/credit transaction, like I said before, that is only because there is a middle man bank that is holding the funds in escrow. While I am not up to date on the way things are currently regulated with regards to bitcoin, there is nothing technologically getting in the way of somebody being able to build a banking/brokerage type system around bitcoin exchange if they wanted such guarantees.
Both credit and debit?
The reason why bitcoin doesn't have these features is that there isn't a bank sitting between the two parties doing business
Point of formatting: please don’t use indentation for quotes, as it renders them much less usable everywhere. Just use the old email convention, a leading “> ”.
> when it’s not congested, they’re much lower than credit card systems are for normal businesses
So, it sounds like it only works if nobody uses it.
Sure, you can say we now have <insert name here> which is like Bitcoin, but solves this problem. This, however, is similar to pointing out there are credit cards with lower fees than what you mentioned (e.g. national ones), it's just the major ones that are expensive.
So, it sounds like it only works if nobody uses it.
Sure, you can say we now have <insert name here> which is like Bitcoin, but solves this problem. This, however, is similar to pointing out there are credit cards with lower fees than what you mentioned (e.g. national ones), it's just the major ones that are expensive.
> but when it’s not congested, they’re much lower than credit card systems are for normal businesses.
It's extremely americanocentric to assume All Of The World either uses credit cards or x-gen Kriegerands.
It's extremely americanocentric to assume All Of The World either uses credit cards or x-gen Kriegerands.
I’m Australian. There are sometimes other options (PayPal and BPAY being the most common two), but Visa/Mastercard are typically the only advertised option for online commerce.
Also, money works pretty well. Bitcoin is not 10x better. Maybe 0.1x. Bitcoin is not even useful for illicit transactions anymore.
By money you mean what exactly? Anything in a bank account is not money but promise of money that can be taken away without your knowledge. Any specific currency is subject to whim of corresponding central bank. Sure, some are safer than others but still. Even the right to participate is not a given as you can be banned from opening a bank account.
Bitcoin is orders of magnitude better money than anything else in every aspect except convenience, but it’s getting there.
Bitcoin is orders of magnitude better money than anything else in every aspect except convenience, but it’s getting there.
It's becoming clear that people who say what you just said sound more like the loons parroting Sovereign Citizen manifestos than rational individuals who actually understand international monetary policies. Instead of screaming about flags with yellow fringes, and "Am I being detained?", you will be screaming about how POW works and "Is BTC illegal?!".
Whether you want to believe it or not, enough people are not having their money "stolen", "without their knowledge" in the real world that anything you said after that would make sense to them. In fact, you gloss over how the one thing everyone fears in crypto is - having their money taken away without their knowledge!
I mean hot storage, cold storage, private keys, public keys... your online trading company being hacked... Do you honestly think that anything in crypto is safer or 10X better or easier than a regular bank that everyone in America or the modern western world, has access to?
Whether you want to believe it or not, enough people are not having their money "stolen", "without their knowledge" in the real world that anything you said after that would make sense to them. In fact, you gloss over how the one thing everyone fears in crypto is - having their money taken away without their knowledge!
I mean hot storage, cold storage, private keys, public keys... your online trading company being hacked... Do you honestly think that anything in crypto is safer or 10X better or easier than a regular bank that everyone in America or the modern western world, has access to?
His point is the fundamental principles of fractional reserve are flawed, and the system will alwayssuffer from the looming threat of a bank run.
It's rather disingenuous to say that people having money stolen from them isn't a problem when you have a system that cyclically chucks out an Enron or Sub-Prime mortgage crisis every ten years or so that typically ends up getting resolved on the taxpayer's dime.
The definition of insanity is doing the same thing over and over again and expecting a different result. If you're going to downvote someone, prove them wrong. Ad hominem let's you nowhere.
Also, you are right on Bitcoin though. It has a higher chance of someone just taking your the ball and going home, something any nationally backed currency has measures in place to prevent.
It's rather disingenuous to say that people having money stolen from them isn't a problem when you have a system that cyclically chucks out an Enron or Sub-Prime mortgage crisis every ten years or so that typically ends up getting resolved on the taxpayer's dime.
The definition of insanity is doing the same thing over and over again and expecting a different result. If you're going to downvote someone, prove them wrong. Ad hominem let's you nowhere.
Also, you are right on Bitcoin though. It has a higher chance of someone just taking your the ball and going home, something any nationally backed currency has measures in place to prevent.
I have no idea how switching to bitcoin for currency would prevent Enron.
Or something like a bank run. If everyone started cashing out their BTC then.. the price would crash. I guess you'd still have your 0$ in the real world bitcoins as consolation.
I'm not saying it would. I was using Enron as an example of a case where people ended up losing a ton of value in terms of life savings disappearing.
Bitcoin if anything exacerbates the "poof' likelihood of value.
Bitcoin if anything exacerbates the "poof' likelihood of value.
> I'm not saying it would. I was using Enron as an example of a case where people ended up losing a ton of value in terms of life savings disappearing.
You mean like MT. Gox?
Because people are still losing tons of money over Bitcoin.
You mean like MT. Gox?
Because people are still losing tons of money over Bitcoin.
you lost me at ad hominem.
>Bitcoin is orders of magnitude better money than anything else in every aspect except convenience, but it’s getting there.
Firstly, if you think money exists for any reason other than convenience, you fundamentally misunderstand why money exists. Its whole purpose is convenience, to make trade easier.
Secondly, the points above are more than just convenience. You have no recourse in cases of fraud or crime when it comes to bitcoin. It costs more to use. And it can be used in much fewer businesses. Those aren't just conveniences; those are fundamental issues of interest to consumers.
Firstly, if you think money exists for any reason other than convenience, you fundamentally misunderstand why money exists. Its whole purpose is convenience, to make trade easier.
Secondly, the points above are more than just convenience. You have no recourse in cases of fraud or crime when it comes to bitcoin. It costs more to use. And it can be used in much fewer businesses. Those aren't just conveniences; those are fundamental issues of interest to consumers.
Fiat currency is not convenient when it comes to international trade. And it is not convenient as a method of storing large masses of wealth.
The fact is, if you were once super rich in Venezuela and you had all your wealth in stacks of Venezuelan money, now you are no longer rich.
Which is why most rich people in other countries like to exchange their tangible money for other nation's currency. Because in the event that their country's economy goes belly up then at least not all of their money has become worthless.
The problem is that not everybody might be willing to exchange your country's currency for theirs. Which is why the US dollar is the international standard for currency exchange.
The big problem the designer of bitcoin saw is the fact that when one country has the ability to make money that everybody wants, we end up in a situation where that country has an unfair advantage to strong arm other nations into a mode of compliance. Like all the US has to do is say that nobody from the US is allowed to exchange their money for Venezuela's money, nor are they allowed to exchange their money for somebody else's money when said person has a history of exchanging currency with Venezuela.
The fact that a few countries can get away with such behavior, means in the end that countries are placed into an economic ladder and nobody is allowed to take a step up if that comes at the expense of somebody higher up on the rung having to take a step down.
In other words, the US has become a monopoly on all other countries when our dollar is in the middle of international trade.
Bitcoin in theory is supposed to replace the dollar role in this sense where no one nation gains the ability to strong arm other nations into behaving in a way that might be contrary to their best interest.
The fact is, if you were once super rich in Venezuela and you had all your wealth in stacks of Venezuelan money, now you are no longer rich.
Which is why most rich people in other countries like to exchange their tangible money for other nation's currency. Because in the event that their country's economy goes belly up then at least not all of their money has become worthless.
The problem is that not everybody might be willing to exchange your country's currency for theirs. Which is why the US dollar is the international standard for currency exchange.
The big problem the designer of bitcoin saw is the fact that when one country has the ability to make money that everybody wants, we end up in a situation where that country has an unfair advantage to strong arm other nations into a mode of compliance. Like all the US has to do is say that nobody from the US is allowed to exchange their money for Venezuela's money, nor are they allowed to exchange their money for somebody else's money when said person has a history of exchanging currency with Venezuela.
The fact that a few countries can get away with such behavior, means in the end that countries are placed into an economic ladder and nobody is allowed to take a step up if that comes at the expense of somebody higher up on the rung having to take a step down.
In other words, the US has become a monopoly on all other countries when our dollar is in the middle of international trade.
Bitcoin in theory is supposed to replace the dollar role in this sense where no one nation gains the ability to strong arm other nations into behaving in a way that might be contrary to their best interest.
Convenience is a matter of development effort. Things like control over ownership, transparency, censorship and oppression resistance are not, they must be the fundamentals the system is built on.
That Bitcoin is used for shady stuff and is harder to track is a red herring for all 10 years of its existence. Come back when Bitcoin’s usage for said stuff is within order of magnitude of USD’s market share.
That Bitcoin is used for shady stuff and is harder to track is a red herring for all 10 years of its existence. Come back when Bitcoin’s usage for said stuff is within order of magnitude of USD’s market share.
GP was not talking about using Bitcoin for crime, but rather the (extremely common) crime of having your money stolen via fraud or whatever. In USD you have recourse there to be made whole. In btc, you do not.
You have no recourse when your cash is stolen unless you’re insured against that. You have some recourse when stuff from your bank account is stolen because you’re paying the insurance in bank fees and taxes.
Those are products you’re paying for. Similar products (and much more flexible/advanced) can be built for bitcoin.
Those are products you’re paying for. Similar products (and much more flexible/advanced) can be built for bitcoin.
Yes, there are risks with banks, central banks, and government backed currencies. These risks are well known and commonly hedged against, which is why currency trading is a thing.
Bitcoin also has risks; it could also collapse, have security vulnerabilities, you could lose access to your keys or if you choose to use an exchange it could be compromised or seized by authorities.
Now, it is true that the risks are different than for other currencies, but you can’t just act like bitcoin doesn’t have risks or that they are a priori less risky than other currencies.
Bitcoin also has risks; it could also collapse, have security vulnerabilities, you could lose access to your keys or if you choose to use an exchange it could be compromised or seized by authorities.
Now, it is true that the risks are different than for other currencies, but you can’t just act like bitcoin doesn’t have risks or that they are a priori less risky than other currencies.
> in every aspect except convenience
And yet convenience is the only aspect 99.9999% of consumers care about because they never have and never will experience any of the other problems you mention.
And yet convenience is the only aspect 99.9999% of consumers care about because they never have and never will experience any of the other problems you mention.
And the maximum transaction rate is 7 per second, so en masse is impossible.
https://en.wikipedia.org/wiki/Bitcoin_scalability_problem
https://en.wikipedia.org/wiki/Bitcoin_scalability_problem
no longer the case since payment channels and routing between them are the option.
p2p channel payments is only limited by network bandwidth and cpu power between participants. routed channel payments are limited by routing network connectivity and capacity, which is not amazing yet but far better than 7tps.
p2p channel payments is only limited by network bandwidth and cpu power between participants. routed channel payments are limited by routing network connectivity and capacity, which is not amazing yet but far better than 7tps.
All of your points are problems that can, and will eventually be, solved by engineering.
The main problem is to believe that Bitcoin will be the solution for markets that have their banking system and governments functioning perfectly.
The reality is that most of the world does not have this efficiency found in the US and Europe. Opening a bank account is not a trivial task in every corner of the world. Acquiring a loan, importing or exporting a product, sending values to a person, organization or company in another country. All these activities are extremely difficult to do for more than 80% of the world's population.
Not being centralized is an advantage that entails enormous difficulties. But none of them kills the initial purpose.
The main problem is to believe that Bitcoin will be the solution for markets that have their banking system and governments functioning perfectly.
The reality is that most of the world does not have this efficiency found in the US and Europe. Opening a bank account is not a trivial task in every corner of the world. Acquiring a loan, importing or exporting a product, sending values to a person, organization or company in another country. All these activities are extremely difficult to do for more than 80% of the world's population.
Not being centralized is an advantage that entails enormous difficulties. But none of them kills the initial purpose.
Fees are only higher in Bitcoin which the developers have crippled. Look at Bitcoin Cash or other cryptocurrencies for much lower fees.
Here are some reasons why cryptocurrencies is a superior payment system, even for the consumer:
* The fees are lower (VISA and PayPal fees are priced into the cost, and they are much higher)
* It's anonymous (see Monero for example)
* You can send money easily to anywhere in the world (lookup EatBCH which is a charity providing food in Venezuela)
* You don't need a bank's permission. There are many unbanked people in the world.
Here are some reasons why it's a superior payment system for the merchant:
* Eliminates credit charge back fraud, which is a very big problem
* The fees are lower, especially important for low margin businesses
* Nobody can freeze your accounts, like PayPal has done on numerous occasions
* Any business can accept money digitally, for example porn sites and marijuana businesses have had a lot of problems accepting credit cards
A permissionless and trustless digital payment system has so obvious benefits I really wonder why people have trouble seeing them.
Is it ready yet? No. Are there problems? Yes. But the benefits are there.
Here are some reasons why cryptocurrencies is a superior payment system, even for the consumer:
* The fees are lower (VISA and PayPal fees are priced into the cost, and they are much higher)
* It's anonymous (see Monero for example)
* You can send money easily to anywhere in the world (lookup EatBCH which is a charity providing food in Venezuela)
* You don't need a bank's permission. There are many unbanked people in the world.
Here are some reasons why it's a superior payment system for the merchant:
* Eliminates credit charge back fraud, which is a very big problem
* The fees are lower, especially important for low margin businesses
* Nobody can freeze your accounts, like PayPal has done on numerous occasions
* Any business can accept money digitally, for example porn sites and marijuana businesses have had a lot of problems accepting credit cards
A permissionless and trustless digital payment system has so obvious benefits I really wonder why people have trouble seeing them.
Is it ready yet? No. Are there problems? Yes. But the benefits are there.
Some counterpoints:
* You don't need a bank's permission. There are many unbanked people in the world.
Do we imagine those unbanked people being likely to have bitcoin wallets?
* Eliminates credit charge back fraud, which is a very big problem
That a problem, for sure, but in exchange consumers have no recourse if they legitimately need to chargeback a vendor. This is an anti-consumer feature of bitcoin.
* Nobody can freeze your accounts, like PayPal has done on numerous occasions
Unless you can somehow always keep your money in bitcoin until you exchange it for goods and services, you'll need an exchange to your currency of choice, at which point governments have all the ability in the world to effectively freeze your assets.
* Any business can accept money digitally, for example porn sites and marijuana businesses have had a lot of problems accepting credit cards
There isn't any technical reason that websites can't accept bitcoin today, and yet the number of websites that are offering bitcoin payments is shrinking, for well discussed reasons. I feel it's fair to say that that business have had more (and different) problems accepting bitcoins.
* You don't need a bank's permission. There are many unbanked people in the world.
Do we imagine those unbanked people being likely to have bitcoin wallets?
* Eliminates credit charge back fraud, which is a very big problem
That a problem, for sure, but in exchange consumers have no recourse if they legitimately need to chargeback a vendor. This is an anti-consumer feature of bitcoin.
* Nobody can freeze your accounts, like PayPal has done on numerous occasions
Unless you can somehow always keep your money in bitcoin until you exchange it for goods and services, you'll need an exchange to your currency of choice, at which point governments have all the ability in the world to effectively freeze your assets.
* Any business can accept money digitally, for example porn sites and marijuana businesses have had a lot of problems accepting credit cards
There isn't any technical reason that websites can't accept bitcoin today, and yet the number of websites that are offering bitcoin payments is shrinking, for well discussed reasons. I feel it's fair to say that that business have had more (and different) problems accepting bitcoins.
> Do we imagine those unbanked people being likely to have bitcoin wallets?
Yes, mobile phones far outnumber bank accounts in much of the developing world.
Also unbanked people exist in the developed countries. Ex convicts, immigrants and homeless for example.
> That a problem, for sure, but in exchange consumers have no recourse if they legitimately need to chargeback a vendor. This is an anti-consumer feature of bitcoin.
Yes it's one of the drawbacks.
You could argue that it's easier to have recourse against a business than against an individual.
> you'll need an exchange to your currency of choice, at which point governments have all the ability in the world to effectively freeze your assets.
You're imagining a world-wide all powerful and all knowing government which can freeze your funds. There are exchanges all over the world and you can even sell your coins for physical cash. Also you need to be able to trace all coins and then try to freeze them, which isn't practical if you use Monero or a good mixing service.
That's assuming you actually sell your coins for fiat instead of buying things or services instead. Or if you just hold the coins.
This is very different from holding the actual wallet and being able to freeze it at any time.
> yet the number of websites that are offering bitcoin payments is shrinking
Do you have any source that the number of porn websites are accepting cryptocurrencies less?
Cause that doesn't seem to be the case at all. Pornhub for example has partnered with other cryptocurrencies (bad move IMO but still). Playboy was working on it but apparently got screwed by their contractor. There are other smaller sites that have begun accepting cryptocurrencies recently.
This is also not a technical argument against cryptocurrencies. With time adoption will increase since the technology is here.
Yes, mobile phones far outnumber bank accounts in much of the developing world.
Also unbanked people exist in the developed countries. Ex convicts, immigrants and homeless for example.
> That a problem, for sure, but in exchange consumers have no recourse if they legitimately need to chargeback a vendor. This is an anti-consumer feature of bitcoin.
Yes it's one of the drawbacks.
You could argue that it's easier to have recourse against a business than against an individual.
> you'll need an exchange to your currency of choice, at which point governments have all the ability in the world to effectively freeze your assets.
You're imagining a world-wide all powerful and all knowing government which can freeze your funds. There are exchanges all over the world and you can even sell your coins for physical cash. Also you need to be able to trace all coins and then try to freeze them, which isn't practical if you use Monero or a good mixing service.
That's assuming you actually sell your coins for fiat instead of buying things or services instead. Or if you just hold the coins.
This is very different from holding the actual wallet and being able to freeze it at any time.
> yet the number of websites that are offering bitcoin payments is shrinking
Do you have any source that the number of porn websites are accepting cryptocurrencies less?
Cause that doesn't seem to be the case at all. Pornhub for example has partnered with other cryptocurrencies (bad move IMO but still). Playboy was working on it but apparently got screwed by their contractor. There are other smaller sites that have begun accepting cryptocurrencies recently.
This is also not a technical argument against cryptocurrencies. With time adoption will increase since the technology is here.
Yes, right now this is true (for those with easy access to credit cards and bank accounts at least). But the same criticisms could have been made about pretty much any technology in the early days of its adoption. A lot of smart, well funded, groups of people are working hard on these problems. It will only get better.
And the BTC people made darn sure to make it harder and more expensive to use.
Not a surprise commerce will turn to other coins, including BCH
Not a surprise commerce will turn to other coins, including BCH
I am not surprised. I am a programmer with decades of experience under my belt, and I have no idea how to install bitcoin in a way that would allow me convenient use of it. No, I can install the apps, and I can spend a month or two waiting until it downloads the whole 40+G of current blockchain, or I can trust some site that says it'd fix it for me, or I can open an account on any of the exchanges and pray to cryptogods it's not the one that is going to be robbed or go bust next. But why would I?
Now, if I would plan to trade in commodities that local government is frowning upon, or speculatively invest in assets that make Las Vegas look like index funds, it would be worth my while. But I don't, so it isn't.
Now make a step from myself - the experienced professional who actually knows what Bitcoin is and can probably explain how it works without wading too far from the truth - to a person who doesn't know the difference between "browser" and "internet". Why on earth would they go through this trouble - and more importantly, why on earth anybody who cares about them would advice them to go there at all? My advice to anybody who is not an agressive risk investor or a person with interests misaligned with current law would be "not with a ten foot pole". Right now it's so ripe with opportunities for both unintentional screwups and intentional skullduggery that I don't see how people can do consumer commerce with it.
Now, if I would plan to trade in commodities that local government is frowning upon, or speculatively invest in assets that make Las Vegas look like index funds, it would be worth my while. But I don't, so it isn't.
Now make a step from myself - the experienced professional who actually knows what Bitcoin is and can probably explain how it works without wading too far from the truth - to a person who doesn't know the difference between "browser" and "internet". Why on earth would they go through this trouble - and more importantly, why on earth anybody who cares about them would advice them to go there at all? My advice to anybody who is not an agressive risk investor or a person with interests misaligned with current law would be "not with a ten foot pole". Right now it's so ripe with opportunities for both unintentional screwups and intentional skullduggery that I don't see how people can do consumer commerce with it.
exaggerating a bit? bitcoin syncs within couple hours unless you run it on the computer you'd gain your decades of experience on :)
every mobile bitcoin app is a lightweight client - it only syncs block headers, much faster but not great for large sums of money.
so for a person that can't tell "browser" from "internet" there's no difference between introducing them to paypal or to bitcoin - it's just an app on your phone and you can press the "send" button.
every mobile bitcoin app is a lightweight client - it only syncs block headers, much faster but not great for large sums of money.
so for a person that can't tell "browser" from "internet" there's no difference between introducing them to paypal or to bitcoin - it's just an app on your phone and you can press the "send" button.
> it only syncs block headers
I think what the parent comment is trying to say is: who cares about this? Not even many of us technical people care.
It's like saying, "Just get the mobile app, it just synchroaligns the ledger manifest distributable intra-block metadata! Duh! Simple!"
It's not accessible to people, and not even engineers who aren't familiar with the tech.
I don't need to understand the minting process to know how to use a dollar, but for some reason the Bitcoin community expects you to understand blocks, difficulty, ledgers, exchanges, and many other concepts that are relatively advanced and take time and effort to understand. A dollar is a dollar.
This continually seems to fall on deaf ears.
I think what the parent comment is trying to say is: who cares about this? Not even many of us technical people care.
It's like saying, "Just get the mobile app, it just synchroaligns the ledger manifest distributable intra-block metadata! Duh! Simple!"
It's not accessible to people, and not even engineers who aren't familiar with the tech.
I don't need to understand the minting process to know how to use a dollar, but for some reason the Bitcoin community expects you to understand blocks, difficulty, ledgers, exchanges, and many other concepts that are relatively advanced and take time and effort to understand. A dollar is a dollar.
This continually seems to fall on deaf ears.
this is just weird.. i was addressing GP's concern about performance of syncing. of course i wouldn't bother explaining how bitcoin works and what are the modes of operation and performance differences between them to a lay person. they don't care. they care that it's just an app.
so what exactly did you want to say?
so what exactly did you want to say?
It's missing the forest for the trees.
With paypal, if someone gives you trouble, you can call support and reverse the payment. And they have protection policies. With bitcoin, if anything happens, you're the idiot who bought into the hype and now getting what was coming you you. For consumer, there's a huge difference - that's why "ZERO FRAUD LIABILITY" is written on every credit card conditions in big friendly letters. Are there any zero fraud liability bitcoin instruments? Are they even possible?
paypal is a product built on top of existing currency. bitcoin is a currency on top of which you can build paypal-like product. there are many things trivially done in bitcoin that are absolutely impossible in bare usd. one can use multisig escrow accounts to implement paypal-like dispute resolution but also limiting the influence middleman (paypal) has - can't run away with your money, can't block the transaction against will of both participants, etc.
this tech is a decade old but it's still in it's infancy especially regarding UX side.
this tech is a decade old but it's still in it's infancy especially regarding UX side.
> bitcoin is a currency on top of which you can build paypal-like product
I can't, I don't have time. No, I understand you mean "somebody might build" - but so far, nobody did. When it changes, the evaluation changes too. So far, we aren't there by no means.
> there are many things trivially done in bitcoin that are absolutely impossible in bare usd
Sure. How many of them are necessary to a typical credit card/cash user?
> one can use multisig escrow accounts to implement paypal-like dispute resolution
You seem to be under impression dispute resolution is a technical problem in search of suitable algorithm. It's not - it is a social/service problem which needs careful balance between trust to various parties and careful calculation of how expensive each tweak to trust levels would be and how to keep fraud in check without pissing off too many people. It's not an algorithmic problem (at least not until we have strong AI).
> can't run away with your money
Which also means no possibility to curtail fraud - if the middle-man can't reverse transaction, what prevents me from selling you an iphone, sending a brick instead and leaving with the money? Or, alternatively, what prevents me from buying an iphone and claiming I got a brick instead, and getting my money back and a free iphone?
> can't block the transaction against will of both participants
Which also means feds close it after a month because it is being used to trade drugs. And seize all the funds there (if you're adventurous, you can sue the federal government for the return of the funds - maybe in 10 years you'll even succeed!)
I can't, I don't have time. No, I understand you mean "somebody might build" - but so far, nobody did. When it changes, the evaluation changes too. So far, we aren't there by no means.
> there are many things trivially done in bitcoin that are absolutely impossible in bare usd
Sure. How many of them are necessary to a typical credit card/cash user?
> one can use multisig escrow accounts to implement paypal-like dispute resolution
You seem to be under impression dispute resolution is a technical problem in search of suitable algorithm. It's not - it is a social/service problem which needs careful balance between trust to various parties and careful calculation of how expensive each tweak to trust levels would be and how to keep fraud in check without pissing off too many people. It's not an algorithmic problem (at least not until we have strong AI).
> can't run away with your money
Which also means no possibility to curtail fraud - if the middle-man can't reverse transaction, what prevents me from selling you an iphone, sending a brick instead and leaving with the money? Or, alternatively, what prevents me from buying an iphone and claiming I got a brick instead, and getting my money back and a free iphone?
> can't block the transaction against will of both participants
Which also means feds close it after a month because it is being used to trade drugs. And seize all the funds there (if you're adventurous, you can sue the federal government for the return of the funds - maybe in 10 years you'll even succeed!)
> No, I understand you mean "somebody might build" - but so far, nobody did.
there are plenty of products on top of bitcoin. but i guess it's important for you to believe that there are none?
> Sure. How many of them are necessary to a typical credit card/cash user?
gee, i don't know, what do you think, does typical credit card/cash user do this thing called "transacting with other people"? sigh.
> You seem to be under impression dispute resolution is a technical problem in search of suitable algorithm
when you're not sure it's wise to ask rather than to make assumptions.
> if the middle-man can't reverse transaction, what prevents me from selling you an iphone, sending a brick instead and leaving with the money
what prevents you is smart application of cryptography. maybe you should inform yourself on the topic before arguing? https://en.bitcoin.it/wiki/Multisignature#Multisignature_App...
> feds close it after a month because it is being used to trade drugs
quick, somebody tell feds most of drug deals are done in USD, make them close USD!
this is depressing.
there are plenty of products on top of bitcoin. but i guess it's important for you to believe that there are none?
> Sure. How many of them are necessary to a typical credit card/cash user?
gee, i don't know, what do you think, does typical credit card/cash user do this thing called "transacting with other people"? sigh.
> You seem to be under impression dispute resolution is a technical problem in search of suitable algorithm
when you're not sure it's wise to ask rather than to make assumptions.
> if the middle-man can't reverse transaction, what prevents me from selling you an iphone, sending a brick instead and leaving with the money
what prevents you is smart application of cryptography. maybe you should inform yourself on the topic before arguing? https://en.bitcoin.it/wiki/Multisignature#Multisignature_App...
> feds close it after a month because it is being used to trade drugs
quick, somebody tell feds most of drug deals are done in USD, make them close USD!
this is depressing.
Just use the mobile wallets? It's very easy.
There's no need for end users to store the whole blockchain.
There's no need for end users to store the whole blockchain.
Run SPV wallet like Electrum. It's the same size as a regular desktop application and takes about a minute to setup.
Doesn't it require essentially trusting Electrum server with your money (and your transactions)?
lmpostor(1)
When I was starting a BTC ASIC company (don’t worry - it failed to attract investment) in 2011, one of the things that always spooked investors was the slide showing transaction volume. Even in those early days, one had to really stretch one’s imagination to believe that Bitcoin could one day take over from Visa/MasterCard as a payment method of choice.
But we did understand its value as an alternative store of wealth, and potentially as a way to transfer money across borders more cheaply. I think the former utility has been somewhat dented by the steady drop in value since its peak. And the latter isn’t really all that amazing of a value prop when you consider that regular old PayPal isn’t that expensive and the set of situations in which it does not work is really small.
Not to mention that SWIFT is really ancient but also works well and can be endlessly improved...
But we did understand its value as an alternative store of wealth, and potentially as a way to transfer money across borders more cheaply. I think the former utility has been somewhat dented by the steady drop in value since its peak. And the latter isn’t really all that amazing of a value prop when you consider that regular old PayPal isn’t that expensive and the set of situations in which it does not work is really small.
Not to mention that SWIFT is really ancient but also works well and can be endlessly improved...
What does it take to actually make BTC ASICs?
In my understanding, the hash functions are quite simple and just do things like XOR, and SHIFT, and perhaps ADD/SUB, but not multiply or divide. So the main difficulty would be to do everything at the lowest possible amount of power.
But I could be wrong.
In my understanding, the hash functions are quite simple and just do things like XOR, and SHIFT, and perhaps ADD/SUB, but not multiply or divide. So the main difficulty would be to do everything at the lowest possible amount of power.
But I could be wrong.
You are correct. The ASIC engineering was routine. It was all about justifying the enormous NRE costs... back in early 2011, BTC was a curiosity and not well known at all. Investors were not easy to convince.
yes, we stopped making application specific integrated circuits (ASIC) back in 1980 in favor of general purpose processors that do all applications decently fast.
there is no rocket science to making an ASIC because we already know how to, and its economically viable again to dust off that knowledge
there is no rocket science to making an ASIC because we already know how to, and its economically viable again to dust off that knowledge
When can we call Bitcoin a failed experiment? And don't tell me it was "always about storing value", that's not in the original paper.
A failed experiment to me would be one that wasn't able to run its full course, or from which no information can be gleaned. Bitcoin has run for a long time, we have gleaned a ton of useful information - as far as experiments are concerned this seems like it went bigger and better than expected, so it should be a very GOOD experiment!
Rather than questioning if the experiment failed, perhaps we should question if recent participants considered it an experiment in the first place.
I.e., I don't think most bitcoin miners / companies / investors saw this as a knowledge-gathering exercise.
I.e., I don't think most bitcoin miners / companies / investors saw this as a knowledge-gathering exercise.
Not really. Was the goal of Bitcoin ever to be the successor to paper money? We're here today and Bitcoin is a functional payment network. Not only that, it's a fairly large one, and it has become a household name. I don't really use Bitcoin but I think it's hyperbole to consider it a unilateral failure just because it didn't supercede traditional currency.
It’s a household name because of speculation, however, and statistically almost nobody uses it for the kind of decentralized transactions for which it was originally pitched. The number of vendors accepting it has gone down over time (e.g. Steam, Microsoft) due to the endemic problems and many of the people who claim to use it (even here) are actually using the credit card network with government currencies for the actual transactions so there’d be very little disruption if it disappeared tomorrow.
>nobody uses it for the kind of decentralized transactions for which it was originally pitched
You're misinterpreting absence of evidence as evidence of absence which is a logical fallacy. clearly there's enough of a market for trustless wealth storage enough to support a $100 Billion dollar market cap. Maybe you think that the world will need less and less trustless wealth storage in the future and you're short bitcoin; it looks like the market is betting against you though.
You're misinterpreting absence of evidence as evidence of absence which is a logical fallacy. clearly there's enough of a market for trustless wealth storage enough to support a $100 Billion dollar market cap. Maybe you think that the world will need less and less trustless wealth storage in the future and you're short bitcoin; it looks like the market is betting against you though.
1. Before accusing other people of logical errors, check to make sure you’re not making one of your own, such as assuming that the current market cap of something is completely backed by real value. Pets.com and Webvan had plenty of market cap right until they didn’t - and a pure fiat currency like Bitcoin has a floor of zero because the only value is the network of people who continue paying to operate it.
2. If a significant number of people were using Bitcoin to replace currency usage, as per the original manifesto, they’d leave evidence behind. You’d see retail transactions, it’d show up in financial reports, the network having problems would make the news because of the inconvenience to businesses, PayPal and western union would be reporting lower usage, etc.
2. If a significant number of people were using Bitcoin to replace currency usage, as per the original manifesto, they’d leave evidence behind. You’d see retail transactions, it’d show up in financial reports, the network having problems would make the news because of the inconvenience to businesses, PayPal and western union would be reporting lower usage, etc.
Pasted from another thread:
If you think that Bitcoin's value is $0 long term, why not go short and make reams of money? After 10 years the market has shown that owning 100 btc has preserved more purchasing power than owning 100 USD, What's your call for the next 10 years?
> If you think that Bitcoin's value is $0 long term, why not go short and make reams of money?
"Markets can remain irrational a lot longer than you and I can remain solvent."
"Markets can remain irrational a lot longer than you and I can remain solvent."
Small correction: Microsoft still accepts Bitcoin.
https://support.microsoft.com/en-us/help/13942/microsoft-acc...
https://support.microsoft.com/en-us/help/13942/microsoft-acc...
I can use Bitcoin today, right now, right here. I actually do occasionally, it's how I pay for VPN service. So is it a failure? No. It's a successful payment network. It didn't cause a libertarian Utopia or whatever, but that's a pretty lofty goal for a conceptual currency based on cryptographic hashing. I have nothing else to say here.
That nicely demonstrates my point: you’re a supporter and you use it infrequently with apparently one company. That does not sound like the revolution in personal finance we were breathlessly promised.
I'm a supporter? By what definition of supporter? This may very well be the first time I've ever discussed Bitcoin in a forum. I don't support Bitcoin the same way I don't support Hanes clothing. It's just a thing I causally use. It works. Why are you trying to pigeon hole me personally? Who promised you this revolution, did Satoshi personally?
Oksy, supporter may be too strong. The aspect I had in mind was that even someone who’d gone to the trouble of learning about it and getting setup to use it didn’t really have a need to, whereas for years here and almost everywhere else fanboys were telling us it was going to replace Visa.
That's also a goal bestowed on Bitcoin by 3rd parties. I don't think the original paper mentioned anything about libertarian wet dreams.
> Was the goal of Bitcoin ever to be the successor to paper money?
Yes, blatantly and repeatedly.
Yes, blatantly and repeatedly.
If Bitcoin is a failure, I wish some of my projects would fail like that.
I hope my projects never hurt the environment as much as Bitcoin has.
The energy consumed from bitcoin PoW is used as a frequent rebuttal against the legitimacy of bitcoin, and it is an incontrovertible fact that the energy demands of bitcoin are non-trivial.
According to annualized energy forecasts extrapolated out from bitcoin PoW energy demands back in December 2017 (i.e. at the height of the recent crypto bubble frenzy) BTC miners are expected to use 8.27 terawatt-hours this year. That's more energy than 116 countries including the Democratic Republic of Congo.
On the other hand, the amount of energy bitcoin is forecast to consume in a year would only last the U.S. 19 hours. Additional the production of the global cash and coin supply will consume an estimated 11 terawatt-hours this year while gold mining will burn the equivalent of 132 terawatt-hours over the same period - and that doesn't include armored trucks, bank bank vaults, security systems etc...
I'm not saying it's worth it to burn all that energy to keep bitcoin (arguably) decentralized. I just want to provide some (now probably outdated) perspective to temper arguments, and stimulate others (on both sides) to advance their arguments beyond headline quotes.
Sources
Pessimistic take: http://www.businessinsider.com/bitcoin-is-ruining-the-planet...
Optimistic takes: https://www.bloomberg.com/view/articles/2017-12-07/bitcoin-i... & https://blog.bitcoin.org.hk/bitcoin-mining-and-energy-consum...
According to annualized energy forecasts extrapolated out from bitcoin PoW energy demands back in December 2017 (i.e. at the height of the recent crypto bubble frenzy) BTC miners are expected to use 8.27 terawatt-hours this year. That's more energy than 116 countries including the Democratic Republic of Congo.
On the other hand, the amount of energy bitcoin is forecast to consume in a year would only last the U.S. 19 hours. Additional the production of the global cash and coin supply will consume an estimated 11 terawatt-hours this year while gold mining will burn the equivalent of 132 terawatt-hours over the same period - and that doesn't include armored trucks, bank bank vaults, security systems etc...
I'm not saying it's worth it to burn all that energy to keep bitcoin (arguably) decentralized. I just want to provide some (now probably outdated) perspective to temper arguments, and stimulate others (on both sides) to advance their arguments beyond headline quotes.
Sources
Pessimistic take: http://www.businessinsider.com/bitcoin-is-ruining-the-planet...
Optimistic takes: https://www.bloomberg.com/view/articles/2017-12-07/bitcoin-i... & https://blog.bitcoin.org.hk/bitcoin-mining-and-energy-consum...
>that's not in the original paper.
Bitcoin the protocol != bitcoin the paper.
The main point of the paper was show that you can solve the byzantine generals problem in a completely untrusted. This contribution built on prior distributed-system designs such as Paxos.
>don't tell me it was "always about storing value"
Bitcoin was always about a fixed-scarcity asset/currency given that the controlled supply algorithm was in the very first version.
Bitcoin doesn't need people's interpretations of bitcoin to be positive to come to trustless consensus.
>When can we call Bitcoin a failed experiment?
If you think that Bitcoin's value is $0 long term, why not go short and make reams of money? After 10 years the market has shown that owning 100 btc has preserved more purchasing power than owning 100 USD, What's your call for the next 10 years?
Bitcoin the protocol != bitcoin the paper.
The main point of the paper was show that you can solve the byzantine generals problem in a completely untrusted. This contribution built on prior distributed-system designs such as Paxos.
>don't tell me it was "always about storing value"
Bitcoin was always about a fixed-scarcity asset/currency given that the controlled supply algorithm was in the very first version.
Bitcoin doesn't need people's interpretations of bitcoin to be positive to come to trustless consensus.
>When can we call Bitcoin a failed experiment?
If you think that Bitcoin's value is $0 long term, why not go short and make reams of money? After 10 years the market has shown that owning 100 btc has preserved more purchasing power than owning 100 USD, What's your call for the next 10 years?
How does one short Bitcoin?
We're a pretty long way off, I'm sorry. Bitcoin is more popular than ever. The payments network (Lightning) being built on top of the financial sovereignty base layer is just getting started.
Another fork of bitcoin. So not actually bitcoin but still bitcoin at the same time. This appears to be an issue with cryptos. Nothing stops another fork later. It’s like people find a problem with a currency and start printing money in another one.
I can see blockchain currency being useful when it is backed by something solid. But right now it’s still just wasted electricity. Eg MasterCard and friends could easily create a currency and use it for exchange.
If I can’t actually use a currency to buy/sell or store value then what is it for? Or am I wrong?
I can see blockchain currency being useful when it is backed by something solid. But right now it’s still just wasted electricity. Eg MasterCard and friends could easily create a currency and use it for exchange.
If I can’t actually use a currency to buy/sell or store value then what is it for? Or am I wrong?
> Another fork of bitcoin.
That's factually wrong. Lightning is a protocol on top of Bitcoin (like HTTP is built on TCP) and not a fork.
It has a different set of trade offs: transactions on it are instant, but one should only store small amounts on it (like what you would carry in your purse) since your money on it can be stolen if you are offline for too long (and you did not pay someone to monitor the network for you). But as long as you are online often enough your funds are secure.
If someone is curious how it works: https://lightning.network/
That's factually wrong. Lightning is a protocol on top of Bitcoin (like HTTP is built on TCP) and not a fork.
It has a different set of trade offs: transactions on it are instant, but one should only store small amounts on it (like what you would carry in your purse) since your money on it can be stolen if you are offline for too long (and you did not pay someone to monitor the network for you). But as long as you are online often enough your funds are secure.
If someone is curious how it works: https://lightning.network/
And having money stolen from my wallet because I haven’t logged in recently is NOT useful for a currency.
It's a technical caveat that exists now, but there's nothing categorically preventing additional technology to help users prevent this fate without much work.
One thing I don't understand is why so many people seem to have this "Bitcoin CAN not, therefore it WILL not" attitude. Bitcoin is software, it is editable, it is being actively developed. Most of us here, I thought, were familiar with the process of improving software over time by working on it, providing solutions we didn't have before.
We don't write code once and say, "welp, software cannot do this thing, because it doesn't already do this thing." What?? People would think you're an idiot.
Yet this is the most common type of argument against crypto, even here on HN.
One thing I don't understand is why so many people seem to have this "Bitcoin CAN not, therefore it WILL not" attitude. Bitcoin is software, it is editable, it is being actively developed. Most of us here, I thought, were familiar with the process of improving software over time by working on it, providing solutions we didn't have before.
We don't write code once and say, "welp, software cannot do this thing, because it doesn't already do this thing." What?? People would think you're an idiot.
Yet this is the most common type of argument against crypto, even here on HN.
I think anything that wants to be called a currency should be useful for buying and selling goods and useful for storing value. Cash right now can do this. Bitcoin right now can’t, and lightning on top can’t do it as per your comment about it having a vulnerability if you don’t log in.
I’m sure I’ll get downvoted for that statement as well.
This is simple bullying by a mob of people who don’t understand what a currency is actually useful for. And are happy to bully and attack someone for even mentioning an issue.
I’m sure I’ll get downvoted for that statement as well.
This is simple bullying by a mob of people who don’t understand what a currency is actually useful for. And are happy to bully and attack someone for even mentioning an issue.
Nobody's bullying you, you just say inaccurate things or bring up things that were not your original argument. Even this response disregards my point.
Everyone agrees with you that being able to handle payments is important for Bitcoin to become a more widely-adopted currency. That's why they're working on improving it so that it can be that way.
Everyone agrees with you that being able to handle payments is important for Bitcoin to become a more widely-adopted currency. That's why they're working on improving it so that it can be that way.
Wrong. I can’t see any evidence of others agreeing with me.
People definitely disagreed with my statement “And having money stolen from my wallet because I haven’t logged in recently is NOT useful for a currency.” Disagreeing with that doesn’t bode well for the future of commerce.
The only possibly incorrect statement was “Another fork of bitcoin”. The person who told me I was wrong introduced a different project. I was accused of "moving the goal posts’’ when I clarified what I was referring to and got a snarky reply when I did so. So my statement about lightning being a “Another fork of bitcoin” is actually factually correct.
References: Lightning as bitcoin fork http://lightningbitcoin.io/ Lightning as protocol https://lightning.network/
People definitely disagreed with my statement “And having money stolen from my wallet because I haven’t logged in recently is NOT useful for a currency.” Disagreeing with that doesn’t bode well for the future of commerce.
The only possibly incorrect statement was “Another fork of bitcoin”. The person who told me I was wrong introduced a different project. I was accused of "moving the goal posts’’ when I clarified what I was referring to and got a snarky reply when I did so. So my statement about lightning being a “Another fork of bitcoin” is actually factually correct.
References: Lightning as bitcoin fork http://lightningbitcoin.io/ Lightning as protocol https://lightning.network/
Goal post moving. You claimed Lightning was a fork of bitcoin which is patently false. You lost your debate.
Incivility and snark will get you banned here, regardless of how wrong someone else is. Please don't post like this again.
https://news.ycombinator.com/newsguidelines.html
https://news.ycombinator.com/newsguidelines.html
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Lighting as a bitcoin fork is at:
http://lightningbitcoin.io/
Which is what I was talking about. No goal post moving.
Have a nice day, bully boy.
Have a nice day, bully boy.
You crossed into incivility in this thread, as well as broke the site guidelines by complaining about downvotes. Please review https://news.ycombinator.com/newsguidelines.html and follow the rules when posting here. I know it's hard when downvotes feel unfair, but those rules all exist for good reason and we ban accounts for breaking them, regardless of how wrong someone else was.
Different Lightning.
So have a look at this: https://chat.lbtc.io/topic/37-faq/
So have a look at this: https://chat.lbtc.io/topic/37-faq/
What makes you think that's what the post you replied to talked about?
Lighting as a bitcoin fork is at: http://lightningbitcoin.io/
You want to join the growing list of Proclaimers that Bitcoin is dead? It’s growing ever since 2011.
Edit: typo
Edit: typo
Everyone should differ between Bitcoin the idea and Bitcoin the coin, only one of many cryptocurrencies.
I don't think cryptocurrencies are ever going away. It's simply too good to be able to accept digital money anywhere from anyone quickly and with low fees. Dark markets for example will always use cryptocurrencies.
I don't think cryptocurrencies are ever going away. It's simply too good to be able to accept digital money anywhere from anyone quickly and with low fees. Dark markets for example will always use cryptocurrencies.
Barring a catastrophic vulnerability in SHA256 or ECDSA, Bitcoin is going nowhere. Bitcoin has been a wild success. At this point, the goal is simply educating newcomers on its advantages (immutability, trustlessness, sound money).
Failed in what sense, and for whom? Some people made and are making a lot of (real) money from it (especially the thieves that have executed the numerous heists from exchanges, wallets, etc.) There is a definite ecosystem here that has players profiting from it that would want it to continue.
In the original sense, a faster/cheaper alternative to wire transfers.
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I'd call it a successful experiment that is soon over.
> When can we call Bitcoin a failed experiment?
When nobody is mining blocks any more?
When nobody is mining blocks any more?
What is backing bitcoin? Gold? Cpu cycles?
Algorithm thay decides how many bitcoins exist. Bitcoin is backed by same thing art and collectibles are backed by. Scarcity.
I don’t buy burgers with art or collectibles. And holding bitcoin doesn’t help me in long or short term.
Right now I’m hoping more people will buy bitcoin so I can dump the remainder of mine.
Right now I’m hoping more people will buy bitcoin so I can dump the remainder of mine.
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First, use in commerce peaked when transaction fees went too high in 2017, and consumers didn't try the shitty user experience again
okay, temporary problem
the payment processor's user experience kind of sucks and the network didn't help that
better UX and lightning network will help with that. There are also some BIPs regarding signing transactions differently, as well as smaller transactions coming. This year, 2018, more people already use another form of smaller transactions and also combine them. Bitcoin would handle a lot more load this year.
Secondly, M1 is a tiny fraction of the supply used for goods and services, M2 and M3 are illiquid stores of value. Bitcoin isn't functioning differently to currencies in this regard so its a weird standard to put it at to proclaim it isn't a good value transfer mechanism.
okay, temporary problem
the payment processor's user experience kind of sucks and the network didn't help that
better UX and lightning network will help with that. There are also some BIPs regarding signing transactions differently, as well as smaller transactions coming. This year, 2018, more people already use another form of smaller transactions and also combine them. Bitcoin would handle a lot more load this year.
Secondly, M1 is a tiny fraction of the supply used for goods and services, M2 and M3 are illiquid stores of value. Bitcoin isn't functioning differently to currencies in this regard so its a weird standard to put it at to proclaim it isn't a good value transfer mechanism.
Fundamentally, though, a consumer in a developed economy with high degree of e-commerce has access to a credit card / PayPal / AliPay -like set of tools, that allow for
* cash back (and similar incentives like airline miles)
* transaction reversal
* consumer protection in case a purchased iPhone X arrives broken due to an unscrupulous seller
* custom perks, like extended warranties for consumer electronics, travel insurance or additional coverage for a rented vehicle
Even if you have a better UX, what are the incentives for consumer to switch away into BTC? A 2% discount compared to credit card payment?
The higher the item price, the stronger is the incentive to employ some consumer protection mechanisms.
* cash back (and similar incentives like airline miles)
* transaction reversal
* consumer protection in case a purchased iPhone X arrives broken due to an unscrupulous seller
* custom perks, like extended warranties for consumer electronics, travel insurance or additional coverage for a rented vehicle
Even if you have a better UX, what are the incentives for consumer to switch away into BTC? A 2% discount compared to credit card payment?
The higher the item price, the stronger is the incentive to employ some consumer protection mechanisms.
> better UX and lightning network will help with that.
Lightning appears to be a bit of a joke - routing payments is almost impossible, lots of attempts seem to fail, and there also appear to be requirements like keeping a node up constantly.
Lightning appears to be a bit of a joke - routing payments is almost impossible, lots of attempts seem to fail, and there also appear to be requirements like keeping a node up constantly.
yeah I read and repeated all of that stuff without investigating too, at one point.
they aren't fundamental flaws to the concept. just like with tcp/ip packets, routing will improve with robustness of the network. I saw a couple of work in progress efforts to address the full node requirements.
they'll be growing pains but bitcoin is interesting because the protocol doesn't go away, even as the payment processing companies themselves run out of money. so a different company or group of efforts will implement it with merchants when its better.
they aren't fundamental flaws to the concept. just like with tcp/ip packets, routing will improve with robustness of the network. I saw a couple of work in progress efforts to address the full node requirements.
they'll be growing pains but bitcoin is interesting because the protocol doesn't go away, even as the payment processing companies themselves run out of money. so a different company or group of efforts will implement it with merchants when its better.
It's different than TCP/IP in that every transaction changes the topography of a payment channel network, by changing the maximum amount that can be sent across various channels. This is a fundamental difference.
Moreover, even if LN worked as a full substitute for on-chain transactions (all indications point to only a very centralized hub and spoke LN model working efficiently), Bitcoin's three transactions per second limit makes the maximum proportion of the global population that could participate in a LN very limited.
Afterall, LN payment channels do still need on-chain transactions to set up, and do need to be replaced from the time to time. Given every user would need, at the very least, a few payment channels, the math for global adoption of the LN with a 3 tps limit doesn't work.
Moreover, even if LN worked as a full substitute for on-chain transactions (all indications point to only a very centralized hub and spoke LN model working efficiently), Bitcoin's three transactions per second limit makes the maximum proportion of the global population that could participate in a LN very limited.
Afterall, LN payment channels do still need on-chain transactions to set up, and do need to be replaced from the time to time. Given every user would need, at the very least, a few payment channels, the math for global adoption of the LN with a 3 tps limit doesn't work.
Yes this is something I'm following too.
So although Bitcoin has a low transaction per second limitation, the database Transaction objects can contain hundreds of transactions between users. This is what batching does. Segwit further helps lower the size of Transaction objects. And further proposals also lower that further.
So although Bitcoin has a low transaction per second limitation, the database Transaction objects can contain hundreds of transactions between users. This is what batching does. Segwit further helps lower the size of Transaction objects. And further proposals also lower that further.
>>the database Transaction objects can contain hundreds of transactions between users.
Can you elaborate or provide a link?
If you're referring to off-chain transactions through LN that are 'batched' on chain: these cannot set up payment channels. On-chain transactions for payment channel set up are the necessary minimum for the LN, and even to do just this, Bitcoin's block size limit doesn't come close to being adequate.
As for Segwit, it's a one time limit increase to something like 1.67 MB per 10 minutes (~2 KB/s). The limit needs a couple order of magnitude increase to make Bitcoin viable as a global currency.
Can you elaborate or provide a link?
If you're referring to off-chain transactions through LN that are 'batched' on chain: these cannot set up payment channels. On-chain transactions for payment channel set up are the necessary minimum for the LN, and even to do just this, Bitcoin's block size limit doesn't come close to being adequate.
As for Segwit, it's a one time limit increase to something like 1.67 MB per 10 minutes (~2 KB/s). The limit needs a couple order of magnitude increase to make Bitcoin viable as a global currency.
A "transaction" on the bitcoin blockchain can contain many peer to peer actions which are also colloquially called transactions.
I'm not referring to lightning. This is basic day-one functionality of bitcoin. I don't feel compelled to provide a link to this at this point. Many popular services' implementation of bitcoin wasn't doing this, and now they are, this is called batching.
I'm not referring to lightning. This is basic day-one functionality of bitcoin. I don't feel compelled to provide a link to this at this point. Many popular services' implementation of bitcoin wasn't doing this, and now they are, this is called batching.
A lot of software projects fail. Why the blind faith that LN will inevitably get better?
ICOs are like this too. Billions of dollars are rallied for technologies that don't exist, for founders who don't exist (their headshots are usually pilfered from stock photos), for problems that don't exist. And yet, funding!
This insanity would never happen if cryptocurrency wasn't involved. The multilevel marketing energy of crypto turns off critical thinking.
ICOs are like this too. Billions of dollars are rallied for technologies that don't exist, for founders who don't exist (their headshots are usually pilfered from stock photos), for problems that don't exist. And yet, funding!
This insanity would never happen if cryptocurrency wasn't involved. The multilevel marketing energy of crypto turns off critical thinking.
I don't have blind faith LN will get better. It already has gotten better from the first time I thought it was irrevocably broken.
There are also parallel scaling proposals.
All while on-chain transactions are extremely cheap and user experience improvements would help handle much more load than last year.
There are also parallel scaling proposals.
All while on-chain transactions are extremely cheap and user experience improvements would help handle much more load than last year.
I've investigated.
AFAICT your only response there is "It will get better". I personally don't believe it will or that it can, given factros like having to tie up BTC in the network to facilitate channels, and race conditions/contention on payments.
It's far from trustless and decentralised, and it appears to be far from functional.
AFAICT your only response there is "It will get better". I personally don't believe it will or that it can, given factros like having to tie up BTC in the network to facilitate channels, and race conditions/contention on payments.
It's far from trustless and decentralised, and it appears to be far from functional.
The primary utility of money is this: it is the good that best lends itself to exchanges for other goods.
Its been clear to me for some time now, and I'm not alone in this, that as the properties of Bitcoin have moved further away from its primary function as a useful unit of exchange that its usage would decline.
There are other crypto-currencies which are now much better suited as a medium of exchange, which ones people will prefer as time progresses remain to be seen, but unless Bitcoin takes a major corrective path, I would be quite surprised to find Bitcoin in that final set of widely utilized currencies.
Its been clear to me for some time now, and I'm not alone in this, that as the properties of Bitcoin have moved further away from its primary function as a useful unit of exchange that its usage would decline.
There are other crypto-currencies which are now much better suited as a medium of exchange, which ones people will prefer as time progresses remain to be seen, but unless Bitcoin takes a major corrective path, I would be quite surprised to find Bitcoin in that final set of widely utilized currencies.
Isn’t this issue inherent in its design? If you can only have 21 million Bitcoins, the value will skyrocket until the currency is worthless.
It's more than 21 millions since bitcoins can be divided.
And no, it could serve as a digital gold / long term investment, and others crypto currencies could be used for day to day transaction
What? That's like saying it's okay if there's only 21 million US dollars, they can be divided into pennies.
Bitcoin has no intrinsic value. Gold does. There's no long-term investment there when even pizza places and Steam think the "currency" is bunk.
It's one thing if Goldman Sachs thinks the currency is worthless, but another issue entirely if the digital equivalent of Circle-K won't accept your virtual dollary-doos.
Let's see, would I rather invest in a company like Intel whose processors are in every American home, or McDonalds whose an international brand, or in Bitcoin whose sole usage is relegated to druggies and sole investment limited to grandmas and millennials who think they're going to strike it rich?
It's pogs for adults.
Bitcoin has no intrinsic value. Gold does. There's no long-term investment there when even pizza places and Steam think the "currency" is bunk.
It's one thing if Goldman Sachs thinks the currency is worthless, but another issue entirely if the digital equivalent of Circle-K won't accept your virtual dollary-doos.
Let's see, would I rather invest in a company like Intel whose processors are in every American home, or McDonalds whose an international brand, or in Bitcoin whose sole usage is relegated to druggies and sole investment limited to grandmas and millennials who think they're going to strike it rich?
It's pogs for adults.
I didn't say it was "okay". It was not an argument. The fact that there are max 21 millions bitcoins is known to everybody but doesn't say much about the total supply since it can be divided. And it cannot be divided into infinity, the smallest unit is the satoshi, so why not talk about the max number of satoshis if you want to make an argument about the max supply of unit of currency ?
Given that it’s a pure fiat currency, why would it retain value if it cannot be used as a currency? The early adopters who get rich if enough people buy in want that but that’s a tiny number of people and for everyone else it’s cheaper and easier to use something which actually solves a problem.
Bitcoin can serve as both digital gold and cash. The Lightning Network (a network of bi-directional payment channels) supports instant sub-1-cent micropayments.
The Lightning Network is not settlement. It's like an IOU, that depends on the eventually-settled state of all associated channels.
It's not like an IOU. They are literally signed (by both parties of the channel) transactions that have yet to be broadcasted and included into blocks. You aren't sending something that is worthless to the counterparty. You both agree what the channel balance is. If there is a disagreement to the state of the channel, the base layer is the ultimate arbiter.
It's a smart contract between two parties.
It's a smart contract between two parties.
By no means am I a bitcoin-enthusiast, but I've shared this story before:
> We had to send a payment to someone who lives in a commonwealth country - what a pain in the ass that was. For the first time I actually saw a use for bitcoin, but the volatility and my general desire not to run afoul of any weird money laundering laws got the better of me.
I do think there's a legitimate case for bitcoin as a means of getting around FX and just the general inaneness of international banking.
That being said, I'm sure that there are plenty of reasons why that'll never come to fruition (e.g. as I noted, AML rules).
> We had to send a payment to someone who lives in a commonwealth country - what a pain in the ass that was. For the first time I actually saw a use for bitcoin, but the volatility and my general desire not to run afoul of any weird money laundering laws got the better of me.
I do think there's a legitimate case for bitcoin as a means of getting around FX and just the general inaneness of international banking.
That being said, I'm sure that there are plenty of reasons why that'll never come to fruition (e.g. as I noted, AML rules).
> We had to send a payment to someone who lives in a commonwealth country
I use it for that purpose all the time. In general, People in developed countries don't have a clue about how painful and time consuming an international payment can be. Even with credit cards banks put very low limits that are unrealistic for someone who travel often and consume cloud services like AWS or Google Cloud.
That is why I think the Bitcoin narrative is misleading, the main point was to make P2P transfer, not holding. In this context stable coins like DAI are currently one of the killer use cases.
I use it for that purpose all the time. In general, People in developed countries don't have a clue about how painful and time consuming an international payment can be. Even with credit cards banks put very low limits that are unrealistic for someone who travel often and consume cloud services like AWS or Google Cloud.
That is why I think the Bitcoin narrative is misleading, the main point was to make P2P transfer, not holding. In this context stable coins like DAI are currently one of the killer use cases.
> I use it for that purpose all the time.
Not to dig into your business too much, but: Any weird tax/legal implications around that? I didn't want to dig into it too much (just because often these things are rabbit holes with unclear answers), but I'm really curious about it for the next time we have to send a payment.
> In general, People in developed countries don't have a clue about how painful and time consuming an international payment can be.
I can definitely say I had no idea until I had to do it myself. Trying to figure out how to do a wire transfer to someone in another country was a huge boondoggle (and expensive).
Not to dig into your business too much, but: Any weird tax/legal implications around that? I didn't want to dig into it too much (just because often these things are rabbit holes with unclear answers), but I'm really curious about it for the next time we have to send a payment.
> In general, People in developed countries don't have a clue about how painful and time consuming an international payment can be.
I can definitely say I had no idea until I had to do it myself. Trying to figure out how to do a wire transfer to someone in another country was a huge boondoggle (and expensive).
In the UK a capital gain (or loss) may occur when you use Bitcoin to buy something, whatever that thing is. (Buying something with Bitcoin is effectively selling Bitcoin for that thing. The thing has a value, and that is some evidence that the Bitcoin is worth that much.) This is a taxable event and if the gain is large enough then you'll need to pay the tax on it.
I imagine many countries have rules that are quite similar.
I imagine many countries have rules that are quite similar.
Interesting - so wait, if I send someone in the UK bitcoin and they sell it immediately for GBP, does that count as a capital gain?
Or just if the price changes between when they receive it and convert it to GBP?
EDIT: I guess it doesn't really matter in this case since presumably short-term capital gains rate is similar (or equal) to the income tax rate, but just curious for my own sake.
Or just if the price changes between when they receive it and convert it to GBP?
EDIT: I guess it doesn't really matter in this case since presumably short-term capital gains rate is similar (or equal) to the income tax rate, but just curious for my own sake.
The gain is the difference between the value when they got it and the value when they sold it, so probably nothing if they do both on the same day. I guess you may have made a gain when you gave the Bitcoin away, since it's treated as a disposal at the market rate... maybe? I don't know the rules for this.
(Regarding speed of selling - there's no short-term CGT rate in the UK, but there are rules about quick turnaround that may apply. Consult an accountant.)
(Regarding speed of selling - there's no short-term CGT rate in the UK, but there are rules about quick turnaround that may apply. Consult an accountant.)
> Not to dig into your business too much, but: Any weird tax/legal implications around that?
You have the typical two options but generally speaking In non-developed countries the concept of taxes or evasion is relative, ethically speaking.
You have the typical two options but generally speaking In non-developed countries the concept of taxes or evasion is relative, ethically speaking.
Bitcoin advocates have long suggested the virtual money would one day replace fiat currencies as a means of doing business
That's not the case anymore either. We have few powerful miners than own more than 50%. Sure they separate entity per se, but if they talk and agree together, they can do whatever they want.
They whole premise that crypto is free and decentralized and "banks cannot control it" is a good idea.. unless you quickly realize the flaw that biggest miners can get together and form a "crypto mob" if you will, and control currency future anyways.
That's not the case anymore either. We have few powerful miners than own more than 50%. Sure they separate entity per se, but if they talk and agree together, they can do whatever they want.
They whole premise that crypto is free and decentralized and "banks cannot control it" is a good idea.. unless you quickly realize the flaw that biggest miners can get together and form a "crypto mob" if you will, and control currency future anyways.
The whole system consists of flaws the authors would have forseen if they understood economic thinking. Instead, they pretended that all the tenets of economics magically go away if you apply a little cryptography.
The flaw you're pointing out is that whoever has access to cheap electricity and scale will be able to control the system. There is not sufficient incentive for others to jump in to a money losing proposition.
The flaw you're pointing out is that whoever has access to cheap electricity and scale will be able to control the system. There is not sufficient incentive for others to jump in to a money losing proposition.
I propose Bitcoin and most other extra-legal (ie non state supported) currencies are going to zero. That said we can be grateful that the experiment was done and data was gained.
Over time, power always consolidates amongst a privileged few. That’s pretty much a universal constant. It doesn’t really matter what the unit of power is, be it dollars, hash rate, or political capital.
Unless the privileged few choose to build institutions to limit the accumulation of capital or power, e.g. https://en.wikipedia.org/wiki/Fabian_Society. To call it a universal constant is a convenient abdication of responsibility.
Right, but that group was formed well over 100 years ago, and power and wealth has still concentrated. The argument isn’t that every person will try to accumulate power, but that it will be accumulated by some group.
This is a totally expected consequence of Bitcoin Core abandoning the original plan of raising the block size limit in favor of 'the Lightning Network', which is a technology that does not even work at the conceptual level, let alone being production ready.
A blockchain limited to 3 transactions per second cannot be a global currency. Before Bitcoin came up against its 1 MB per 10 minute (1.67 KB/s) limit, which is its life from launch to 2017, its daily transaction volume was growing exponentially, yoy.
A blockchain limited to 3 transactions per second cannot be a global currency. Before Bitcoin came up against its 1 MB per 10 minute (1.67 KB/s) limit, which is its life from launch to 2017, its daily transaction volume was growing exponentially, yoy.
Cryptocurrency will never replace fiat money. Corporations will never put their money in a system that is controlled by only one password and that uses transactions that in case of error can't be undone.
Keep dreaming. You will see.
My thinking, probably wrong goes like this:
what is money? It is a messaging system that allows people to decide what to do in a decentralized fashion. We need more food, the price of food goes up, more people grow food. What happens when you make money from money? Dysfunction. World currencies are increasingly dysfunctional - the most profit comes not from productive economic activity but from speculation, arbitrage, etc.
Bitcoins are completely dysfunctional because they are not tied to any productive economic activity, they are completely speculative. The idea of cryptocurrencies is great, but without being tied to real economic activity, they are ... well speculative.
Would love some explanations on why this thinking is wrong.
what is money? It is a messaging system that allows people to decide what to do in a decentralized fashion. We need more food, the price of food goes up, more people grow food. What happens when you make money from money? Dysfunction. World currencies are increasingly dysfunctional - the most profit comes not from productive economic activity but from speculation, arbitrage, etc.
Bitcoins are completely dysfunctional because they are not tied to any productive economic activity, they are completely speculative. The idea of cryptocurrencies is great, but without being tied to real economic activity, they are ... well speculative.
Would love some explanations on why this thinking is wrong.
They’re tied to economic activity — buying drugs, money laundering, paying ransoms, funding intelligence operations.
Just nobody is using them to buy legitimate products.
Just nobody is using them to buy legitimate products.
Bitcoin (and crypto) is not a currency, commodity, stock or bond. It's a combination which makes it a completely new and different kind of asset class. It's a programmable asset that primarily serves as a 'trading vehicle' in the mind of traders and Wall St. Understanding this helps to understand why Goldman and others are stepping over themselves to setup trading desks for most crypto now and in the future.
I totally agree with the assertion that it doesn't fall into existing asset type (or-- maybe that it can move between asset types in a novel way), but what do you mean by "programmable"? Isn't the simpler explanation or enthusiasm on the part of Goldman et al. just classic FOMO?
When you can engineer sophisticated scripts or wrappers around a globally accessible immutable tradable asset it increases functionality and innovation in financial products which includes autonomous machines trading crypto with one another in exchange for data. I think we're in for a world of fun.
Bitcoin uses smart contracts for its transactions. Meaning, you can program a transaction to occur if certain conditions are met. One example is a multisignature-required transaction. A multisig transaction is only valid and spendable if n-of-m signatures are present.
With the small-blocker and big-blocker schism, BTC is not Bitcoin, and is not meant for commerce.
If you want fast, cheap, settled transactions, use Bitcoin (BCH).
If you want fast, cheap, settled transactions, use Bitcoin (BCH).
I think what people need to realize about cryptocurrencies is that they aren't going to derive their value from being convertible to fiat currency.
Rather cryptocurrencies are going to be revolutionary in the sense of how they can be combined with other technologies.
For example, what if World of Warcraft used a cryptocurrency based system for ingame currency? Where the ingame money was actually finite and that in theory the players in the game could suffer from an economic depression. Or a few players could hoard all the wealth in the game. etc. etc.
The game would be way different than it is now, which is to say that it just emulates an economy, not actually implements one.
This is probably a bad example to get what I am trying to say. So lets imagine a different scenario. Let's say we wanted to build a social network, where we didn't actually want everybody to just be able to say whatever they want without a threat of consequence. What we want is a social network where you have to do something to earn the ability to speak, and once you speak you lose the currency to be able to speak again until you do something once again to earn the ability to speak.
What you have to do in order to earn the ability to act depends on the service in question, but the same basic concept of a cryptocurrency is what underlying the system. In that the platform only has value when the ability to act is a limited and highly valued resource.
Rather cryptocurrencies are going to be revolutionary in the sense of how they can be combined with other technologies.
For example, what if World of Warcraft used a cryptocurrency based system for ingame currency? Where the ingame money was actually finite and that in theory the players in the game could suffer from an economic depression. Or a few players could hoard all the wealth in the game. etc. etc.
The game would be way different than it is now, which is to say that it just emulates an economy, not actually implements one.
This is probably a bad example to get what I am trying to say. So lets imagine a different scenario. Let's say we wanted to build a social network, where we didn't actually want everybody to just be able to say whatever they want without a threat of consequence. What we want is a social network where you have to do something to earn the ability to speak, and once you speak you lose the currency to be able to speak again until you do something once again to earn the ability to speak.
What you have to do in order to earn the ability to act depends on the service in question, but the same basic concept of a cryptocurrency is what underlying the system. In that the platform only has value when the ability to act is a limited and highly valued resource.
> For example, what if World of Warcraft used a cryptocurrency based system for ingame currency?
Why would they need a distributed system? They already have an in-game currency with a central authority (their trusted servers) and can already limit the rate of currency creation (reduce monster's gold drop rate to zero or whatever).
EVE Online shows just how well a central authority can manage a virtual game currency. No crypto or blockchain needed.
> Let's say we wanted to build a social network, where we didn't actually want everybody to just be able to say whatever they want without a threat of consequence
Cool, so like a reputation system on old forums where you have to have a certain number of positive comments to participate in other private forums, and there's heavy moderation?
Oh woah, no crypto, no blockchain. I don't see how cryptocurrencies make the fundamental problems of building such a system any easier btw. Attaching a value to someone in a database is easy, and even distributed social networks like mastodon trust the participating servers (and if you don't, you block the whole server).
Cryptocurrencies are a problem looking for another problem, and it turns out rubbing two problems together doesn't make fire.
A central database is usually better (the WoW example), and they're often orthogonal to other ideas they're shoved into (reputation system, file storage, whatever).
Why would they need a distributed system? They already have an in-game currency with a central authority (their trusted servers) and can already limit the rate of currency creation (reduce monster's gold drop rate to zero or whatever).
EVE Online shows just how well a central authority can manage a virtual game currency. No crypto or blockchain needed.
> Let's say we wanted to build a social network, where we didn't actually want everybody to just be able to say whatever they want without a threat of consequence
Cool, so like a reputation system on old forums where you have to have a certain number of positive comments to participate in other private forums, and there's heavy moderation?
Oh woah, no crypto, no blockchain. I don't see how cryptocurrencies make the fundamental problems of building such a system any easier btw. Attaching a value to someone in a database is easy, and even distributed social networks like mastodon trust the participating servers (and if you don't, you block the whole server).
Cryptocurrencies are a problem looking for another problem, and it turns out rubbing two problems together doesn't make fire.
A central database is usually better (the WoW example), and they're often orthogonal to other ideas they're shoved into (reputation system, file storage, whatever).
This is another reason why i think all these crypto based startups that are using ICOs as an alt means of funding are totally delusional and devaluing their product. You take all the value out of your platform if you take away the requirement that people must do some form of work to generate wealth. The fact that the platform acts like the Fed and can print their own currency whenever they want, proves that they don't truly get the point of why cryptocurrency is innovative.
The problem with bitcoin as a currency or a store of value is simpler than all these comments.
It is not secure.
If I own gold, I own the gold, nobody can take it from me without physical access to it.
If I own bitcoin, I own a transaction on a ledger. I don't own that ledger. The majority miners control the ledger.
A miner who has 50% of hashing power (actually less, when selfish mining) completely owns and controls the ledger. They can erase any transactions they want, block transactions and double spend.
You don't have that with gold, you actually own the gold.
Bitcoin Gold was the same source code and same ledger as bitcoin (no extra words) and it was double spent in exactly that way.
The whole system was designed to make the people who created the fake money a lot of money, it wasn't designed to run forever. They've made their 100s of millions+ and more. Beyond their wildest dreams. It's a simple pyramid scheme designed to run as long as possible.
It is not a currency. It is not a store of value. It is a worthless asset being traded back and forth by people losing money in a less than zero sum game. Less than zero because money is going to miners and exchanges who facilitate the game.
It is not secure.
If I own gold, I own the gold, nobody can take it from me without physical access to it.
If I own bitcoin, I own a transaction on a ledger. I don't own that ledger. The majority miners control the ledger.
A miner who has 50% of hashing power (actually less, when selfish mining) completely owns and controls the ledger. They can erase any transactions they want, block transactions and double spend.
You don't have that with gold, you actually own the gold.
Bitcoin Gold was the same source code and same ledger as bitcoin (no extra words) and it was double spent in exactly that way.
The whole system was designed to make the people who created the fake money a lot of money, it wasn't designed to run forever. They've made their 100s of millions+ and more. Beyond their wildest dreams. It's a simple pyramid scheme designed to run as long as possible.
It is not a currency. It is not a store of value. It is a worthless asset being traded back and forth by people losing money in a less than zero sum game. Less than zero because money is going to miners and exchanges who facilitate the game.
Selfish mining with less than 50% does not exist. False
Also.... see how they confiscated gold in the USA.
You cannot confiscate bitcoin, anymore than you can confiscate "internet"
Both are networking protocols
Also.... see how they confiscated gold in the USA.
You cannot confiscate bitcoin, anymore than you can confiscate "internet"
Both are networking protocols
> Selfish mining with less than 50% does not exist. False
Incorrect, and this has been well known for nearly five years: http://hackingdistributed.com/2013/11/04/bitcoin-is-broken/
Incorrect, and this has been well known for nearly five years: http://hackingdistributed.com/2013/11/04/bitcoin-is-broken/
Yes, Emin has been pushing that narrative for a while.
But we have not seen an instance of this yet
But we have not seen an instance of this yet
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So many initiatives are currently in development to make it easy to accept crypto. Just wait 2 or 3 years...
>And Bitcoin-based transactions can’t be reversed, an issue when a merchant or a consumer comes up against fraud
That's the fucking point. Use multisig/escrow if you need it.
That's the fucking point. Use multisig/escrow if you need it.
Bitcoin != despite the wearisome and over-blown emotional 'bitcoin is bad see i told you so!' mentality on HN.
Bloomberg's use in news keeps falling too. They have set up computational paywalls to prevent people from reading their articles. But for some reason people on HN just keep posting them. It's a weird exception to the no-paywalled article status quo.
ditto. used to be ok but now too much clickbait, low quality content, and now paywalls
It's pretty remarkable that the transaction layer (Lightning network) on top of Bitcoin hasn't garnered any discussion in this comment section - I would expect this to be the primary topic when talking Bitcoin commerce! It's not possible to have an intelligent discussion on Bitcoin commerce without discussing its most relevant tech.
From my experience, I see that most apolitical or politically averse techies (a lot of HN) are drawn heavily to Ethereum, which has been falling relative to Bitcoin ever since the January highs. Pretty sure there is a strong correlation between this and HN crypto frustration in general.
From my experience, I see that most apolitical or politically averse techies (a lot of HN) are drawn heavily to Ethereum, which has been falling relative to Bitcoin ever since the January highs. Pretty sure there is a strong correlation between this and HN crypto frustration in general.
> It's pretty remarkable that the transaction layer (Lightning network) on top of Bitcoin hasn't garnered any discussion in this comment section
I would say it's pretty encouraging since it barely works, doesn't deliver on any of its promises and much more convoluted to use that normal crypto-currency.
I would say it's pretty encouraging since it barely works, doesn't deliver on any of its promises and much more convoluted to use that normal crypto-currency.
I can send less than a satoshi to someone across the globe for virtually zero fees, anonymously and without any need to wait for block confirmations? And all of this works right now on mainnet?
Bitcoin progress has always consisted of overcoming allegedly insurmountable problems, Lightning dev is no different. Next up is solving efficient routing and intermittent nodes.
Bitcoin progress has always consisted of overcoming allegedly insurmountable problems, Lightning dev is no different. Next up is solving efficient routing and intermittent nodes.
> virtually zero fees
Except when you settle the transactions where you will pay possibly very large fees.
> anonymously
Nope.
> without any need to wait for block confirmations
0-conf is fine for all but the very largest purchases using simple heuristics.
> And all of this works right now on mainnet?
No it's not release ready yet. Did you ignore all the "you may lose funds" warnings?
> Next up is solving efficient routing
Yeah good luck with that... Solving decentralized routing in an adversarial environment is a much harder problem than scaling Bitcoin. Leaving such a detail is idiotic, especially since there's still no idea how to do it.
Also you forgot watchtowers (since you need to be always online to receive funds or you'll get defrauded). Yes that's online with your wallet...
Except when you settle the transactions where you will pay possibly very large fees.
> anonymously
Nope.
> without any need to wait for block confirmations
0-conf is fine for all but the very largest purchases using simple heuristics.
> And all of this works right now on mainnet?
No it's not release ready yet. Did you ignore all the "you may lose funds" warnings?
> Next up is solving efficient routing
Yeah good luck with that... Solving decentralized routing in an adversarial environment is a much harder problem than scaling Bitcoin. Leaving such a detail is idiotic, especially since there's still no idea how to do it.
Also you forgot watchtowers (since you need to be always online to receive funds or you'll get defrauded). Yes that's online with your wallet...
>>Bitcoin progress has always consisted of overcoming allegedly insurmountable problems, Lightning dev is no different.
Bitcoin's founder solved one allegedly insurmountable problem: the Byzantine Generals' problem. It's irrational to believe this means Bitcoin Core's development team, who had no part in the original design of Bitcoin, will solve more problems of this class.
Bitcoin Core should have fully exploited the existing breakthrough in decentralized consensus, by simply raising the block size limit to provide enough space for the world to use Bitcoin, instead of pushing Bitcoin's luck, and premising its success on an uncertain technology like LN.
Bitcoin's founder solved one allegedly insurmountable problem: the Byzantine Generals' problem. It's irrational to believe this means Bitcoin Core's development team, who had no part in the original design of Bitcoin, will solve more problems of this class.
Bitcoin Core should have fully exploited the existing breakthrough in decentralized consensus, by simply raising the block size limit to provide enough space for the world to use Bitcoin, instead of pushing Bitcoin's luck, and premising its success on an uncertain technology like LN.
Ever since LN was first proposed, skeptics have asserted problem after problem as an insurmountable obstacle. And time after time they have been proven wrong.
If you really think that big blocks solve anything, then by all means just use Bcash - though of course Bcash itself is melting down into separate forks as we speak..
If you really think that big blocks solve anything, then by all means just use Bcash - though of course Bcash itself is melting down into separate forks as we speak..
> If you really think that big blocks solve anything, then by all means just use Bcash - though of course Bcash itself is melting down into separate forks as we speak..
Try to look beyond all the censored /r/bitcoin propaganda - bitcoin cash and other cryptocurrencies scale fine with increased blocksizes.
Bitcoin cash is not melting down in separate forks at all. The increased blocksize obviously works without problems and has nothing to do with forking in the first place.
There was never a reason to restrict the blocksize of btc except to sell a complicated and unnecessary promise of a solution to a non-problem. Everyone outside of the /r/bitcoin censorship and propaganda bubble can see this.
Try to look beyond all the censored /r/bitcoin propaganda - bitcoin cash and other cryptocurrencies scale fine with increased blocksizes.
Bitcoin cash is not melting down in separate forks at all. The increased blocksize obviously works without problems and has nothing to do with forking in the first place.
There was never a reason to restrict the blocksize of btc except to sell a complicated and unnecessary promise of a solution to a non-problem. Everyone outside of the /r/bitcoin censorship and propaganda bubble can see this.
That's an over-generalization and concluding from it that LN will fulfil all of its promises is characteristic of the kind of blinders-on thinking within the Bitcoin Core community right now.
Skeptics have thus far been proven right that LN doesn't work as a full substitute for on-chain transactions, and its advocates have continually had to push back the promised date of a usable product.
Big blocks in an age of 30 Mb/s internet connections can and will work. 3,000 tps on-chain was the original scaling plan for Bitcoin. Fortunately, Bitcoin (Cash) carries on that plan.
Skeptics have thus far been proven right that LN doesn't work as a full substitute for on-chain transactions, and its advocates have continually had to push back the promised date of a usable product.
Big blocks in an age of 30 Mb/s internet connections can and will work. 3,000 tps on-chain was the original scaling plan for Bitcoin. Fortunately, Bitcoin (Cash) carries on that plan.
I gave up reading the original article after ctrl+f'ing for it revealed it didn't mention lightning network or plasma. I've never even owned ether or bitcoin but those seem like aspects one would cover when discussing transaction improvements.
How Google is entering the crypto space is https://blog.usejournal.com/google-entering-the-blockchain-s... very telling. Bitcoin is not going away. Get over it.
Google is not entering the crypto space. Quoting from the article:
> Google finally officially entered the blockchain space, announcing on its blog just before the Google Cloud Next ’18 conference in San Francisco in July 24–26, to be supporting distributed ledger technology, aka blockchain
Adding a blockchain service to your cloud platform offering is far from "entering the crypto space".
> Google finally officially entered the blockchain space, announcing on its blog just before the Google Cloud Next ’18 conference in San Francisco in July 24–26, to be supporting distributed ledger technology, aka blockchain
Adding a blockchain service to your cloud platform offering is far from "entering the crypto space".
Crypto space doesn't necessarily mean Bitcoin, could be another better technology that eventually becomes mainstream.
For example, a fixed reward split between a growing group of miners will also cause a rising price floor. The miners will not sell for less than their electricity costs, which makes the smaller piece of the block reward they receive have a higher price.
So you have this asset you call a currency but it is always deflationary. No one will set prices in that. Think of it in terms of setting a salary. One month you are paying the equivalent of 1000 dollars, the next you are paying 2000. Since this has no way of stabilizing it will never become a true base currency.
Instead, at best, it serves as a pass through to a fiat currency. So it is acting as a payment processor but very inefficiently. Slow transaction speeds, expensive, difficult to acquire.
The price is driven by speculative demand. It honestly is more like a digital collectible than a currency (sign up to receive one of 21 million e coins, be part of history).