Accepting Bitcoin as a Small Business – 4 Years In, No Customers(seymour-locksmiths.co.uk)
seymour-locksmiths.co.uk
Accepting Bitcoin as a Small Business – 4 Years In, No Customers
https://seymour-locksmiths.co.uk/bitcoin-locksmith/
245 comments
I have a better analogy: Bitcoin has the same sort of issues as TCP/IP. It's weird that people are expected to interact with it on the protocol level.
I think the term "cryptocurrency" is the "Big Data" of 2018. The term itself has been somewhat tarnished, but the underlying technology is super useful and will find its way into a lot of applications.
And no, I don't mean "blockchain". I mean Bitcoin... it's rather nice as a business or individual to be able to send large amounts of money around the world without snaking through the nightmare that is international banking. Inherent in that idea is the notion that the coin itself has value independent of a particular application.
I think the term "cryptocurrency" is the "Big Data" of 2018. The term itself has been somewhat tarnished, but the underlying technology is super useful and will find its way into a lot of applications.
And no, I don't mean "blockchain". I mean Bitcoin... it's rather nice as a business or individual to be able to send large amounts of money around the world without snaking through the nightmare that is international banking. Inherent in that idea is the notion that the coin itself has value independent of a particular application.
Most of the issues with "international banking" are infact just issues with North American banks.
I can transfer large sums of money around Europe and it will arrive in few days at the very latest. Within the same country transfers mostly arrive the same day (often it's under 1 hour), and sometimes that happens internationally too. Oh and I don't need to pay anything for that.
A few years ago I was working in the Middle East, and before I moved back I transferred my savings from there (~€50k) back to Europe without any questions from either bank. I just did the transfer online, and it arrived in a few days.
Now I'm working for a US company, and it took them a few weeks to setup paying me with their bank. It usually takes at least a week from when they tell the bank to pay me, until I receive the money in my account - to a USD account also in the US.
I can transfer large sums of money around Europe and it will arrive in few days at the very latest. Within the same country transfers mostly arrive the same day (often it's under 1 hour), and sometimes that happens internationally too. Oh and I don't need to pay anything for that.
A few years ago I was working in the Middle East, and before I moved back I transferred my savings from there (~€50k) back to Europe without any questions from either bank. I just did the transfer online, and it arrived in a few days.
Now I'm working for a US company, and it took them a few weeks to setup paying me with their bank. It usually takes at least a week from when they tell the bank to pay me, until I receive the money in my account - to a USD account also in the US.
> Most of the issues with "international banking" are infact just issues with North American banks.
This. Whenever someone says that Cryptocurrencies solve money transfer problems, I look where they are based and 99% of the cases it is the US. In Europe, transferring money is the same internationally as it is nationally. Type in the IBAN and the name of the recipient and they get it the same day, or latest the next day. I made seven figure international payments that went through in 24 hours.
This is not a technical problem that Cryptocurrencies are somehow uniquely placed to solve. Technically, a money transfer could take miliseconds - updating a couple of database rows. National payments in Europe at least are actually pretty much instant since they are now fully automated. International payments can take up to a day due to an actual human checking the correctness (and perhaps doing due diligence for money laundering).
This. Whenever someone says that Cryptocurrencies solve money transfer problems, I look where they are based and 99% of the cases it is the US. In Europe, transferring money is the same internationally as it is nationally. Type in the IBAN and the name of the recipient and they get it the same day, or latest the next day. I made seven figure international payments that went through in 24 hours.
This is not a technical problem that Cryptocurrencies are somehow uniquely placed to solve. Technically, a money transfer could take miliseconds - updating a couple of database rows. National payments in Europe at least are actually pretty much instant since they are now fully automated. International payments can take up to a day due to an actual human checking the correctness (and perhaps doing due diligence for money laundering).
So? There's a huge amount of currency flowing to and from North America to Europe, Asia, etc. Just because the euro zone has standardized their banking system doesn't mean a) that America will ever do the same (cough the metric system cough), or b) that all movement of money across borders should be strictly the purview of banks.
In Canada alone people send $23.3B/year back to their country of origin in the form of remittances (China, India, the Philippines, etc.). Historically they've been massively overcharged for the privilege of doing so because they're held captive to our oligopolistic banking system - sometimes upwards of 20% because they regularly send smaller amounts to minimize risk.
In Canada alone people send $23.3B/year back to their country of origin in the form of remittances (China, India, the Philippines, etc.). Historically they've been massively overcharged for the privilege of doing so because they're held captive to our oligopolistic banking system - sometimes upwards of 20% because they regularly send smaller amounts to minimize risk.
Nobody mentioned the Euro Zone before you did; they're talking about Europe "as a continent", for the most part.
Living in the UK, national payments are instant, with very few exceptions. And having lived in both Switzerland (where they use CHF), and Germany (Euros), I can say it's much the same across Europe.
International payments within Europe are fast too; a couple of days if you're changing currencies, and faster if both sides are in the Euro Zone.
Banks don't have to be slow. The only real issue I have is that the bank's exchange rates are criminal!
Living in the UK, national payments are instant, with very few exceptions. And having lived in both Switzerland (where they use CHF), and Germany (Euros), I can say it's much the same across Europe.
International payments within Europe are fast too; a couple of days if you're changing currencies, and faster if both sides are in the Euro Zone.
Banks don't have to be slow. The only real issue I have is that the bank's exchange rates are criminal!
> The only real issue I have is that the bank's exchange rates are criminal!
Exchange fees show up in a number of different places. I have a Capital One card that I got specifically for the advertised "no foreign exchange fees". In reality, it consistently charges me about 1% more than the official exchange rate at any given point. 1% doesn't seem like a terrible fee. I wish it would itemize it, though.
Many merchants will not bill the card in their local currency -- instead, because it's a US card, they refuse to bill it in anything other than USD. That means they end up making me pay extra to cover their exchange costs, which are always exorbitant, maybe 10 times as much. They appear to have something worked out with their local bank, where the bank accepts payment in USD and gives them payment in CNY or HKD. Here, the bank is teaming up with the merchant to screw the customer without even benefiting the merchant.
I recently ordered something from Amazon's Canada site, and they generously offered to let me have them bill me in USD -- they would cover currency exchange themselves. Left unstated was that they would charge, again, an order of magnitude more for the service than my card would. At least they gave me the option to say "no, bill me in CAD".
The best option I generally have for transacting in China is to pull cash from an ATM (paying Capital One's 1%ish fee), and pay cash even for very large purchases. It's quite possible that banks aren't where you're getting hit by exorbitant fees -- transact directly with a bank, and you should be able to get low fees.
Exchange fees show up in a number of different places. I have a Capital One card that I got specifically for the advertised "no foreign exchange fees". In reality, it consistently charges me about 1% more than the official exchange rate at any given point. 1% doesn't seem like a terrible fee. I wish it would itemize it, though.
Many merchants will not bill the card in their local currency -- instead, because it's a US card, they refuse to bill it in anything other than USD. That means they end up making me pay extra to cover their exchange costs, which are always exorbitant, maybe 10 times as much. They appear to have something worked out with their local bank, where the bank accepts payment in USD and gives them payment in CNY or HKD. Here, the bank is teaming up with the merchant to screw the customer without even benefiting the merchant.
I recently ordered something from Amazon's Canada site, and they generously offered to let me have them bill me in USD -- they would cover currency exchange themselves. Left unstated was that they would charge, again, an order of magnitude more for the service than my card would. At least they gave me the option to say "no, bill me in CAD".
The best option I generally have for transacting in China is to pull cash from an ATM (paying Capital One's 1%ish fee), and pay cash even for very large purchases. It's quite possible that banks aren't where you're getting hit by exorbitant fees -- transact directly with a bank, and you should be able to get low fees.
> Living in the UK, national payments are instant, with very few exceptions.
Well, anything within the same bank is instant. There is a commonly used mechanism in business accounts called "Faster Payments" which tend to settle even across banks in the UK within 2h.
Very recently - as in, in the last 4-6 weeks - a system called "SMS" was rolled out. Despite the name, it has nothing to do with text messaging. It's a new cross-bank settlement mechanism which promises to settle the transfer in 20 minutes within UK.
The reality is that SMS transfers don't work reliably across all the banks. Our payments and customer service teams had a bad week after we enabled SMS payments. When a supposedly faster transfer takes 5-6 days and you have to chase the bank(s) about payment states, there's clearly a fault somewhere.
Well, anything within the same bank is instant. There is a commonly used mechanism in business accounts called "Faster Payments" which tend to settle even across banks in the UK within 2h.
Very recently - as in, in the last 4-6 weeks - a system called "SMS" was rolled out. Despite the name, it has nothing to do with text messaging. It's a new cross-bank settlement mechanism which promises to settle the transfer in 20 minutes within UK.
The reality is that SMS transfers don't work reliably across all the banks. Our payments and customer service teams had a bad week after we enabled SMS payments. When a supposedly faster transfer takes 5-6 days and you have to chase the bank(s) about payment states, there's clearly a fault somewhere.
>bank's exchange rates are criminal!
Transferwise is easy and are about 0.3% off interbank.
Interactive Brokers are a pain to set up but some tiny amount off like 0.02%
Transferwise is easy and are about 0.3% off interbank.
Interactive Brokers are a pain to set up but some tiny amount off like 0.02%
I love TransferWise. I live in Canada, and had 2k USD sitting in a Canadian bank account. I was going to convert it to CAD, but the bank's exchange rate is atrocious. So I opened a free US-based account with my bank's US division, transferred all my USDs there 1:1, then sent it through TransferWise to my Canadian account. A bit convoluted, but I saved close to $100 and it didn't take long to set up.
I see this point about remittance fees being made frequently. For payments from Canada to the Philippines, Xoom (bought out by Paypal) charges $2.99 to send $200 (1.5%) and $21.49 to send $1000 (2.2%). That's not anywhere near 20%.
I've worked in this industry in the past. Historically yes, poor people have been overcharged. The way they dealt with it was to develop networks of people who they could pay to carry the money with them on trips back home and set up a pickup. It's crude, but it's a system that persists in India and Pakistan, especially for unskilled migrants in the Middle East who don't have access to local banking services. Not really a target market for bitcoin given the steep learning curve.
For computer-literate migrants who work in developed countries and are OK with using banks, paypal etc, the fees are pretty reasonable.
I've worked in this industry in the past. Historically yes, poor people have been overcharged. The way they dealt with it was to develop networks of people who they could pay to carry the money with them on trips back home and set up a pickup. It's crude, but it's a system that persists in India and Pakistan, especially for unskilled migrants in the Middle East who don't have access to local banking services. Not really a target market for bitcoin given the steep learning curve.
For computer-literate migrants who work in developed countries and are OK with using banks, paypal etc, the fees are pretty reasonable.
Their exchange rates are terrible deals and blatantly taking advantage of people who only see the upfront fee and don't think further than that.
Get the feeling they'd have no problem making money with zero fees but that would suddenly make customers think twice about it.
Get the feeling they'd have no problem making money with zero fees but that would suddenly make customers think twice about it.
How does your point relate to the usefulness of Bitcoin? I highlighted that the quagmire of international payments is not a problem that Bitcoin can uniquely solve. It is not a technical problem at all!
Bitcoin has nothing special about it that would allow these countries to make payments between each other smoother. That is apart from sidestepping the existing regulatory framework.
It might have the beneficial side effect of competition, but that's not a virtue of Bitcoin as a concept. Perhaps the space is ripe for a new fintech startup that streamlines payments between these destinations.
Bitcoin has nothing special about it that would allow these countries to make payments between each other smoother. That is apart from sidestepping the existing regulatory framework.
It might have the beneficial side effect of competition, but that's not a virtue of Bitcoin as a concept. Perhaps the space is ripe for a new fintech startup that streamlines payments between these destinations.
It's a distributed protocol with wide adoption and enough liquidity to be easily traded anywhere in the world.
That makes it great as a medium of common exchange... I can easily convert from Canadian Dollars to BTC in Canada, then convert from BTC to Pesos in the Philippines so long as there's enough liquidity on either end.
Both parties still have to act within their respective legal frameworks, but it sidesteps the need to add even more parties into the mix, each of which take their own fees. International wire transfers are a great example of how opaque, slow and costly that can be.
You can go customer -> Canadian Company -> Filipino company -> customer.
The traditional way would be customer -> Canadian Company -> Canadian bank -> Intermediary bank(s) -> Filipino bank -> Filipino company -> Customer
I'm simplifying somewhat... obviously banks are involved in any domestic fiat transfers, but they're not involved in international transmittal (which they usually charge quite a bit for).
That makes it great as a medium of common exchange... I can easily convert from Canadian Dollars to BTC in Canada, then convert from BTC to Pesos in the Philippines so long as there's enough liquidity on either end.
Both parties still have to act within their respective legal frameworks, but it sidesteps the need to add even more parties into the mix, each of which take their own fees. International wire transfers are a great example of how opaque, slow and costly that can be.
You can go customer -> Canadian Company -> Filipino company -> customer.
The traditional way would be customer -> Canadian Company -> Canadian bank -> Intermediary bank(s) -> Filipino bank -> Filipino company -> Customer
I'm simplifying somewhat... obviously banks are involved in any domestic fiat transfers, but they're not involved in international transmittal (which they usually charge quite a bit for).
I understood bitcoin transfers could take days. If so, that's not really very liquid?
It depends really. Transactions are usually processed based on the fee associated with them. If the network is exceptionally busy and you send a transaction with a low fee, yeah it'll take a while, but when creating the transaction you can adjust the fee (and most wallets will give you a few options) to make your transaction more valuable to miners, so it will be picked up more quickly.
Bitcoin from wallet A to wallet B usually only takes about 20 minutes but fiat -> bitcoin and bitcoin -> fiat can take a while, typically a day or so each and more if backlogged.
Cryptocurrencies have failed to make any inroads in this because A) People trust the existing services, and B) They're nowhere near as expensive as you say.
At this point it's just yet another talking point for enthusiasts, enthusiasts who have no idea about real-world use-cases.
At this point it's just yet another talking point for enthusiasts, enthusiasts who have no idea about real-world use-cases.
There appears to be plenty of competition in the "send money abroad" market
https://www.money.co.uk/money-transfers.htm
https://www.money.co.uk/money-transfers.htm
An ACH transaction between two North American banks usually arrives on the next business day (if you place it before the cut-off time). In fact, ACH supports multiple settlements per day now so if that feature is supported by your bank ACH transfers can even arrive on the same business day. There are a few banks that are slower, but that's not the fault of ACH - don't use slow banks and you're not running into that issue.
That's very similar to SEPA transactions, with the exception that some European banks support real-time settlements for SEPA. For banks that don't support this yet funds usually arrive on the next business day.
Transfers between the US banking system and the European system are usually slow and expensive as those two systems aren't directly linked to each other. So you your bank needs to send the funds to a correspondent bank which forwards the funds to the final destination. But if you use 3rd party services such as TransferWise those transfers are significantly faster and cheaper. My last transfer from my US bank account to my European account (via TransferWise) arrived on the next business day and cost something like 0.36% on top of the mid-market rate.
That's very similar to SEPA transactions, with the exception that some European banks support real-time settlements for SEPA. For banks that don't support this yet funds usually arrive on the next business day.
Transfers between the US banking system and the European system are usually slow and expensive as those two systems aren't directly linked to each other. So you your bank needs to send the funds to a correspondent bank which forwards the funds to the final destination. But if you use 3rd party services such as TransferWise those transfers are significantly faster and cheaper. My last transfer from my US bank account to my European account (via TransferWise) arrived on the next business day and cost something like 0.36% on top of the mid-market rate.
But you cannot deposit money into any arbitrary U.S. bank account using ACH. For every account that you want to make transfers to, you first need to sign a bunch of forms. With the European IBAN system, no permissions or forms are needed to make deposits to a new arbitrary account.
Almost all of the US banks allow you to add other ACH accounts that you control. Just confirm the two trial deposits and you can push or pull money from that account.
A few banks also allow to send ACH transfers to third-party accounts that you don't control - for example with USAA that's possible. This still doesn't 100% match how transfers work in Europe (you first need to add the account, then wait 1-2 days, then you can send funds to it), but it's definitely better than "signing a bunch of forms".
A few banks also allow to send ACH transfers to third-party accounts that you don't control - for example with USAA that's possible. This still doesn't 100% match how transfers work in Europe (you first need to add the account, then wait 1-2 days, then you can send funds to it), but it's definitely better than "signing a bunch of forms".
> An ACH transaction between two North American banks usually arrives on the next business day (if you place it before the cut-off time).
I keep hearing this, but out of the many banks I've tried I've never once seen this happen. I just looked at a recent transaction; email shows I initiated it at 9:18am PST on Jan 30 (which could be past the cutoff if it was noon EST), the withdrawal account shows the money deducted on Jan 31, and the deposit account shows it landing on Jan 1--one business day, right? Nah, or at least I'm not informed of them on those days. I don't see them show up for another day or two. When the money does show up in the account, it's often "not available" for another day or two. I'm just one dude who happens to have a few different banks for savings and my wife's account and tries to pay bills on time. This was also a thing when I was pooling money for a mortgage downpayment. I can't imagine running a business.
It frustrates me that for a country that deifies financial markets and capitalism will ignore liquidity like this (even between accounts owned by the same entity). 1 business day (before the cutoff!) still isn't that great. The docs I found about same-day ACH said it was approved in 2015 and only rolled out last year...and it looks like they charge a fee per transaction[1][2]
[1] https://web.nacha.org/system/files/resource/2017-08/Same-Day...
[2] https://content.capitalone.com/TMgmt/images/Same_Day_ACH_%20...
I keep hearing this, but out of the many banks I've tried I've never once seen this happen. I just looked at a recent transaction; email shows I initiated it at 9:18am PST on Jan 30 (which could be past the cutoff if it was noon EST), the withdrawal account shows the money deducted on Jan 31, and the deposit account shows it landing on Jan 1--one business day, right? Nah, or at least I'm not informed of them on those days. I don't see them show up for another day or two. When the money does show up in the account, it's often "not available" for another day or two. I'm just one dude who happens to have a few different banks for savings and my wife's account and tries to pay bills on time. This was also a thing when I was pooling money for a mortgage downpayment. I can't imagine running a business.
It frustrates me that for a country that deifies financial markets and capitalism will ignore liquidity like this (even between accounts owned by the same entity). 1 business day (before the cutoff!) still isn't that great. The docs I found about same-day ACH said it was approved in 2015 and only rolled out last year...and it looks like they charge a fee per transaction[1][2]
[1] https://web.nacha.org/system/files/resource/2017-08/Same-Day...
[2] https://content.capitalone.com/TMgmt/images/Same_Day_ACH_%20...
* infact just issues with North American banks.*
Yup, same experience here. It takes at least 10 days to send a paltry 1000 USD for me and yes, there is a fee. The bank is probably making money on the exchange rate too, not sure. At one point, I was asked all kinds of documentation - passport etc. All this to send very small amounts of money (I don't remember sending more than 3K, 50K Euros without questions is amazing to me).
Edit: Many comments here mention that Europe is way ahead of the US i the money transfer space. Can someone talk about why the US is lagging behind?
Yup, same experience here. It takes at least 10 days to send a paltry 1000 USD for me and yes, there is a fee. The bank is probably making money on the exchange rate too, not sure. At one point, I was asked all kinds of documentation - passport etc. All this to send very small amounts of money (I don't remember sending more than 3K, 50K Euros without questions is amazing to me).
Edit: Many comments here mention that Europe is way ahead of the US i the money transfer space. Can someone talk about why the US is lagging behind?
There's a pretty good Planet Money episode on this issue:
https://www.npr.org/sections/money/2018/01/10/576879734/epis...
https://www.npr.org/sections/money/2018/01/10/576879734/epis...
It's weird that slow banking is something that makes credit cards more useful.
And credit card transfers earn more money ( just putting 1 and 2 together)
And credit card transfers earn more money ( just putting 1 and 2 together)
If I would receive $50k in Kazakhstan from foreign country, they will be put on hold for a few months for security investigations and I'll have to provide all the documents about that money before I could have them. And even then someone corrupted might invent something to steal them from me. I definitely don't trust banks for anything but pocket money.
>Most of the issues with "international banking" are infact just issues with North American banks.
This is true only for transfers between and within Europe, north America and couple of exceptions in Asia. The world is bigger...
This is true only for transfers between and within Europe, north America and couple of exceptions in Asia. The world is bigger...
> I can transfer large sums of money around Europe and it will arrive in few days at the very latest.
I can do the same in the US, except it’s instantaneous, not sure what you are talking about.
I can do the same in the US, except it’s instantaneous, not sure what you are talking about.
One surprise for me, as a European, is that in America people seem to regard bank account numbers as secret - I dwell on forums for landlords, etc, and people expect to collect cash/cheques from their tenants, rather than sharing bank details.
Unrelated to your alleged speed, but another odd perception of the American banking systems.
(Lots of other people in this thread seem to suggest you're an outlier; I don't know enough to guess either way.)
Unrelated to your alleged speed, but another odd perception of the American banking systems.
(Lots of other people in this thread seem to suggest you're an outlier; I don't know enough to guess either way.)
Your account number is on every checks. Checks are usually prefered because in the US you can cash them immediately and online.
Of course, YMMV. I've experienced both the US bank system and the EU (France) bank system. Even if Americans are very critical of our banks, no fee (usually) for anything, reduced red tape, and credit cards that are on your side won me over. When you take account of cash back and interests on checking, you've usually a cash positive relationship with you bank. Good luck finding that in Europe.
Of course, YMMV. I've experienced both the US bank system and the EU (France) bank system. Even if Americans are very critical of our banks, no fee (usually) for anything, reduced red tape, and credit cards that are on your side won me over. When you take account of cash back and interests on checking, you've usually a cash positive relationship with you bank. Good luck finding that in Europe.
I have a better analogy. Bitoin has the same issues as Flooz. It’s a more complicated and convoluted solution to a nonexistent problem.
The only people who have problems with spending money the normal way that are serious enough to accept the horrible user experience and unreliability of bitcoin are those conducting illegal transactions or evading currency controls. The market has no reason to rise beyond that narrow use case despite mass speculation to the contrary.
The only people who have problems with spending money the normal way that are serious enough to accept the horrible user experience and unreliability of bitcoin are those conducting illegal transactions or evading currency controls. The market has no reason to rise beyond that narrow use case despite mass speculation to the contrary.
That's just ill-informed. "If you don't accept the banking oligopoly you're clearly trying to launder money" is the kind of nonsense that tries to shut down legitimate concerns over self-determination.
Money is an essential input to freedom. If you can't make an income, pay rent, buy food, pay for transportation, etc. you are not very free. I'd also go so far as to say that the right to transact anonymously should be part and parcel to a free society.
Money is an essential input to freedom. If you can't make an income, pay rent, buy food, pay for transportation, etc. you are not very free. I'd also go so far as to say that the right to transact anonymously should be part and parcel to a free society.
You're arguing an is with an ought. People ought to be able to to transact anonymously and without any middle-men. In reality, most people are only willing to put up with the inconveniences of bitcoin because it lets them side-step the law.
Wow, no...
I'm just a computer consultant trying to get paid. Bank payments to/from the US is an absolute, unmitigated train-wreck.
Even with the spectacular deficiencies of the Bitcoin/Ethereum user experience, it is already a vast improvement over the Bank transfer debacle.
The next generation of Cryptocurrencies (that solve most of the complexity/risk of creating, securing, managing and recovering public/private keys) and improve the transaction thruput and cost by 4+ orders of magnitude? These are going to kick the banks to curb.
I'm just a computer consultant trying to get paid. Bank payments to/from the US is an absolute, unmitigated train-wreck.
Even with the spectacular deficiencies of the Bitcoin/Ethereum user experience, it is already a vast improvement over the Bank transfer debacle.
The next generation of Cryptocurrencies (that solve most of the complexity/risk of creating, securing, managing and recovering public/private keys) and improve the transaction thruput and cost by 4+ orders of magnitude? These are going to kick the banks to curb.
> send large amounts of money around the world without snaking through the nightmare that is international banking
This has little to do with technology but with regulation. If you think bitcoin can solve this then you either envision a future where these regulations don't apply (in some sort of technologically independent anarchistic society) or you expect bitcoin to cause a reduction in the high regulation surrounding international asset transfers - which is very unlikely, regulators around the world are pushing for more stringent AML policies.
This is where a blockchain (the technology) could actually come in handy. If every asset is tokenized and controllable through some smart contract (and every transfer needs to be authorized by the responsible financial regulator) then such a system would make any kind of international asset transfer much more frictionless. But of course this runs contrary to the idea of most current crypto currencies (whose proponents mostly hope for the aforementioned scenario).
This has little to do with technology but with regulation. If you think bitcoin can solve this then you either envision a future where these regulations don't apply (in some sort of technologically independent anarchistic society) or you expect bitcoin to cause a reduction in the high regulation surrounding international asset transfers - which is very unlikely, regulators around the world are pushing for more stringent AML policies.
This is where a blockchain (the technology) could actually come in handy. If every asset is tokenized and controllable through some smart contract (and every transfer needs to be authorized by the responsible financial regulator) then such a system would make any kind of international asset transfer much more frictionless. But of course this runs contrary to the idea of most current crypto currencies (whose proponents mostly hope for the aforementioned scenario).
I would say Bitcoin has the same issues as TCP/IP in 1984. It's just 10 years old. Developers know what to do (Eltoo, Schnorr signatures, better multisig for hardware wallets, watchtowers, better routing, AMP, Lightning support for exchanges), but implemention speed is limited, and just simply adding more developers or even complaining about lack of UX won't make it faster. Also people with Bitcoin don't accept the ,,move fast and break things'' mantra, because it's money. I like the cautious speed of development, it helps build my trust in Bitcoin.
I don't understand the TCP analogy. TCP is incredibly straightforward and scales from a knowledge-required level of almost nothing to very advanced usage like paying attention to ECN markings. Most of the layers above TCP have, over the last 20+ years, had many many problems that related directly to people not wanting to understand TCP, from RMI and similar RPC schemes to things like BEEP/BXXP where the head-of-line blocking problem somehow surprised people.
In the end people working with technologies do need to understand their semantics. I don't mean you should be able to write a competent TCP implementation from scratch, but you do need to understand how the protocol layer makes itself an issue in every layer above it in practice.
In the end people working with technologies do need to understand their semantics. I don't mean you should be able to write a competent TCP implementation from scratch, but you do need to understand how the protocol layer makes itself an issue in every layer above it in practice.
A closer analogy might be credit card transactions, it's a protocol that tons of people use on a daily basis but the complexity has been wrapped up into a product offered by a several companies
> underlying technology is super useful and will find its way into a lot of applications.
I can't think of any other use cases other than illegal black markets.
I can't think of any other use cases other than illegal black markets.
It's worse than that; there is no compelling reason to use it for the vast majority of people. It's a strictly worse experience in nearly all respects compared to centralized options except in the case of dark net commerce where it's the only option.
>centralized options
This seems to be the crux of all of these discussions and why they inevitably go nowhere.
For a small but passionate core of libertarian-minded crypto/Bitcoin boosters, decentralization is a good unto itself. All other issues caused by it are irrelevant.
Hard for normal people to use? But it's decentralized! Not useful for anything normal people want to do? But it's decentralized! Massive price fluctuations render it largely unusable? But it's decentralized! Rife with scams and fraud? But it's decentralized!
This makes it impossible to discuss because this small group's focus is so different from everyone else's. Unfortunately, this small group also has outsize influence in the crypto scene so the concerns of users will probably never get addressed, since they don't matter from that POV.
This seems to be the crux of all of these discussions and why they inevitably go nowhere.
For a small but passionate core of libertarian-minded crypto/Bitcoin boosters, decentralization is a good unto itself. All other issues caused by it are irrelevant.
Hard for normal people to use? But it's decentralized! Not useful for anything normal people want to do? But it's decentralized! Massive price fluctuations render it largely unusable? But it's decentralized! Rife with scams and fraud? But it's decentralized!
This makes it impossible to discuss because this small group's focus is so different from everyone else's. Unfortunately, this small group also has outsize influence in the crypto scene so the concerns of users will probably never get addressed, since they don't matter from that POV.
>This makes it impossible to discuss because this small group's focus is so different from everyone else's.
Well, if people don't value decentralization, there's not much need for them to use Bitcoin. There's a lot of problems that come with decentralization.
I feel this is like comparing car seating to couches. Car seat fans only seem to care about going places! Car seats are small and don't let you lie down? But it gets places! They need a seat buckle and don't let you sit freely? But it gets places! They shake a bit and are usually surrounded by noise? But it gets places!
Some of the complaints can have some incremental improvements, but they're unlikely to be solvable and the fact that someone might rate the complaints highly relative to the goal implies that they're not in the target market for the thing and its large trade-offs.
/overly general point. Some specific responses:
Some of the goals you mention (not useful, massive price fluctuations) are generally only solvable with more people using it. If there were easier more direct solutions, people would've done them.
>Hard for normal people to use?
Most wallet software I've used was super easy. If you want to receive money, you give someone one of your addresses. If you want to send some money, you put in their address. (A billion times easier than figuring out what banking numbers you have to put in to your bank's website to send someone money, and then them worrying about whether that lets you withdraw from their account too.) The main problem is that some wallet clients are full clients that need to download the whole blockchain first, but being patient or switching to a lightweight client solves that.
It was a bit hard to first get bitcoin, but that's because of the hoops companies have to jump through to deal with the banking system. I'm not sure how an open decentralized system can make this part easier. That's up to the exchanges and banks. It doesn't make much sense to blame crypto-enthusiasts for being close-minded and ignoring issues they could work on.
Well, if people don't value decentralization, there's not much need for them to use Bitcoin. There's a lot of problems that come with decentralization.
I feel this is like comparing car seating to couches. Car seat fans only seem to care about going places! Car seats are small and don't let you lie down? But it gets places! They need a seat buckle and don't let you sit freely? But it gets places! They shake a bit and are usually surrounded by noise? But it gets places!
Some of the complaints can have some incremental improvements, but they're unlikely to be solvable and the fact that someone might rate the complaints highly relative to the goal implies that they're not in the target market for the thing and its large trade-offs.
/overly general point. Some specific responses:
Some of the goals you mention (not useful, massive price fluctuations) are generally only solvable with more people using it. If there were easier more direct solutions, people would've done them.
>Hard for normal people to use?
Most wallet software I've used was super easy. If you want to receive money, you give someone one of your addresses. If you want to send some money, you put in their address. (A billion times easier than figuring out what banking numbers you have to put in to your bank's website to send someone money, and then them worrying about whether that lets you withdraw from their account too.) The main problem is that some wallet clients are full clients that need to download the whole blockchain first, but being patient or switching to a lightweight client solves that.
It was a bit hard to first get bitcoin, but that's because of the hoops companies have to jump through to deal with the banking system. I'm not sure how an open decentralized system can make this part easier. That's up to the exchanges and banks. It doesn't make much sense to blame crypto-enthusiasts for being close-minded and ignoring issues they could work on.
The problem with your analogy is that people understand car seats and couches are and do different things. Crypto enthusiasts seems to want Bitcoin (or something else) to become widely adopted and used but are highly resistant or indifferent to the myriad problems that prevent such adoptions on ideological grounds.
To use your analogy, it would be like someone believing that car seats should replace couches everywhere but ignoring all of the complaints you listed.
>Most wallet software I've used was super easy.
Do you have a technical background such that you are familiar and comfortable with using even complicated technology? I often find that since crypto boosters are developers or engineers, their ideas of simplicity and ease are wildly different from your average Joe.
To use your analogy, it would be like someone believing that car seats should replace couches everywhere but ignoring all of the complaints you listed.
>Most wallet software I've used was super easy.
Do you have a technical background such that you are familiar and comfortable with using even complicated technology? I often find that since crypto boosters are developers or engineers, their ideas of simplicity and ease are wildly different from your average Joe.
> if people don't value decentralization, there's not much need for them to use Bitcoin
Correct. That is the reason why most people don't need and will never need bitcoin.
Correct. That is the reason why most people don't need and will never need bitcoin.
I think decentralization is important. I think the benefits of it should be argued to get people to use Bitcoin, instead of crypto-enthusiasts trying to get people to use Bitcoin because it's "easier" or lower fees, which aren't always true.
If email didn't exist and people mainly used Facebook messages, I'd want to help agitate for something open and decentralized like email to become popular. It wouldn't be because I thought email was easier than Facebook messages. It's because there's benefits to the competition that comes from an open ecosystem.
If email didn't exist and people mainly used Facebook messages, I'd want to help agitate for something open and decentralized like email to become popular. It wouldn't be because I thought email was easier than Facebook messages. It's because there's benefits to the competition that comes from an open ecosystem.
It could be easier for tourism, online transactions, and person to person transactions. However, it's not, largely because of a chicken and egg problem similar to that which plagues Linux.
People don't use Bitcoin because it's complicated and unstable. It's complicated and unstable because the types of people that use it want to speculate with it or use it for illegal purposes. Just making it more approachable won't fix the stability issues, so it likely won't increase the number of users in a meaningful enough way to get it to take off.
The same is true for desktop Linux. And installing Linux is often easier than installing another OS (Windows or macOS). Take Ubuntu or Mint, for example. They're the most popular among users new to Linux, and installation is as easy or easier than Windows since drivers come preinstalled and the user is prompted if proprietary drivers are available. The problems arise when trying to use software not deigned for Linux (e.g. MS Office), and this is getting better all the time with investment into the Windows compatibility layer by Valve.
However, the chicken and egg problem will always be there. A decentralized system like Bitcoin can't really be saved by investment from a third party since it can't solve the volatility problem without centralization.
For this reason, I think looking at centralized, but not government run, systems is interesting. For example, GNU Taler is a centralized cryptocurrency that can be used for anything (one example was currency used at conferences) with incredibly low transaction costs. I think it's interesting because it gets people used to using something digital (and not government provided/managed) to make transactions, but without having to deal with volatility inherent in cryptocurrencies, and once cryptocurrencies stabilize, perhaps they can be a drop-in replacement.
I really want decentralized currencies to work out (largely to make traveling less of a pain), but nothing I've seen is worth making more user-friendly.
People don't use Bitcoin because it's complicated and unstable. It's complicated and unstable because the types of people that use it want to speculate with it or use it for illegal purposes. Just making it more approachable won't fix the stability issues, so it likely won't increase the number of users in a meaningful enough way to get it to take off.
The same is true for desktop Linux. And installing Linux is often easier than installing another OS (Windows or macOS). Take Ubuntu or Mint, for example. They're the most popular among users new to Linux, and installation is as easy or easier than Windows since drivers come preinstalled and the user is prompted if proprietary drivers are available. The problems arise when trying to use software not deigned for Linux (e.g. MS Office), and this is getting better all the time with investment into the Windows compatibility layer by Valve.
However, the chicken and egg problem will always be there. A decentralized system like Bitcoin can't really be saved by investment from a third party since it can't solve the volatility problem without centralization.
For this reason, I think looking at centralized, but not government run, systems is interesting. For example, GNU Taler is a centralized cryptocurrency that can be used for anything (one example was currency used at conferences) with incredibly low transaction costs. I think it's interesting because it gets people used to using something digital (and not government provided/managed) to make transactions, but without having to deal with volatility inherent in cryptocurrencies, and once cryptocurrencies stabilize, perhaps they can be a drop-in replacement.
I really want decentralized currencies to work out (largely to make traveling less of a pain), but nothing I've seen is worth making more user-friendly.
There is no chicken-egg problem. There is no chicken. There is no reason for anyone to use bitcoin except for a tiny niche.
The comparison to Linux Desktop is correct but for the wrong reasons. Like with bitcoin, nobody has any reason to switch to a Linux Desktop since the existing solutions already do everything people want. If you're non-technical and are already comfortable with Windows or Mac, you gain nothing by switching to a linux desktop.
The comparison to Linux Desktop is correct but for the wrong reasons. Like with bitcoin, nobody has any reason to switch to a Linux Desktop since the existing solutions already do everything people want. If you're non-technical and are already comfortable with Windows or Mac, you gain nothing by switching to a linux desktop.
How can it get any easier than one of the 87 different mobile apps that let you send money to another person with a few taps?
The fact alone that are 87 different mobile apps makes it difficult. Which one do you use? Is there a difference?
Having one single, well-branded app is easier to use than 87 random no-name apps.
Having one single, well-branded app is easier to use than 87 random no-name apps.
> Having one single, well-branded app is easier to use than 87 random no-name apps.
But there's no need for this to be a cryptocurrency app, that's the point.
These amazing things that cryptocurrency enthusiasts tell us could be made possible using their magic beans - millions of people are already doing them just fine.
But there's no need for this to be a cryptocurrency app, that's the point.
These amazing things that cryptocurrency enthusiasts tell us could be made possible using their magic beans - millions of people are already doing them just fine.
While this is true, Bitcoin does nothing to solve that problem. It just adds even more choices to the pile.
It's easier because it doesn't require any sign-up. You simply download some compatible software and you're ready to run. Every other of the 87 services requires sign-up, which means filling out forms and uploading photos of ID. If you're lucky to be in a well-developed country with proper ID, you might be able to get an account!
It takes about a minute to sign up with these apps. No ID needed.
You need to sign up for a bank account if you want to use bitcoin in practice. Meeting up with random people in the streets to trade money for digital currency is definitely not easier than signing up for Venmo.
Venmo has the prerequisite that you have a bank account. That excludes a massive portion of the human population from the get go, and puts various obstacles in people's way depending on their background.
Acquiring bitcoin will become incredibly simple with services like azte.co, which work in pretty much the same way that most people used to top up their pay-to-go phone less than 20 years ago. People forget how rapidly things move.
If you think at the level of "this is how it works now", you will never comprehend the potential of Bitcoin. The exchanges which operate in the bitcoin space now will be about as relevant as phone booths were as a means of making phone calls remotely. People will forget they ever existed.
The way most people will acquire Bitcoin in future is the way they currently acquire fiat money - in exchange for their time and labor. There won't be any other "exchange" process.
Acquiring bitcoin will become incredibly simple with services like azte.co, which work in pretty much the same way that most people used to top up their pay-to-go phone less than 20 years ago. People forget how rapidly things move.
If you think at the level of "this is how it works now", you will never comprehend the potential of Bitcoin. The exchanges which operate in the bitcoin space now will be about as relevant as phone booths were as a means of making phone calls remotely. People will forget they ever existed.
The way most people will acquire Bitcoin in future is the way they currently acquire fiat money - in exchange for their time and labor. There won't be any other "exchange" process.
> It’s the lack of user focus. Setting up a bitcoin account, understanding the security implications, hardware wallet, secret keys, the whole enchilada is too big for an average consumer to digest.
I respectfully disagree. Bitcoin solves problems that the average consumer didn't care about, plus it introduces new problems.
I would never make an everyday purchase with Bitcoin. If I don't get the product I was promised, I can file a dispute with my credit card company. If the product I purchased breaks, it may be covered by a warranty from my card company. If my card number is stolen, I get reimbursed for the fraudulent charges and get a new card in the mail. None of these conveniences come with cryptocurrency. Cryptocurrency solved a problem with moving money ~anonymously with no interference from authorities. Most average folks want the exact opposite of that.
I respectfully disagree. Bitcoin solves problems that the average consumer didn't care about, plus it introduces new problems.
I would never make an everyday purchase with Bitcoin. If I don't get the product I was promised, I can file a dispute with my credit card company. If the product I purchased breaks, it may be covered by a warranty from my card company. If my card number is stolen, I get reimbursed for the fraudulent charges and get a new card in the mail. None of these conveniences come with cryptocurrency. Cryptocurrency solved a problem with moving money ~anonymously with no interference from authorities. Most average folks want the exact opposite of that.
>I would never make an everyday purchase with Bitcoin.
I used to think the same, but there is a coffee / snack shop nearby that accepts bitcoin/bcash/ethereum, and offers $1 off if you pay with it. A surprising number of people pay via cryptocurrency.
For a small purchase like that, cryptocurrency is perfect. Amounts are small enough that you don't need to wait for blockchain confirmations, risk is low. Credit card fees are high in-part because they are providing that fraud protection. For a purchase like this, both the merchant and I save money by not having to worry about transaction reversals and fraud.
I used to think the same, but there is a coffee / snack shop nearby that accepts bitcoin/bcash/ethereum, and offers $1 off if you pay with it. A surprising number of people pay via cryptocurrency.
For a small purchase like that, cryptocurrency is perfect. Amounts are small enough that you don't need to wait for blockchain confirmations, risk is low. Credit card fees are high in-part because they are providing that fraud protection. For a purchase like this, both the merchant and I save money by not having to worry about transaction reversals and fraud.
This is a really good comparison that I had never thought of. You are 100% right, the user experience for BTC is terrible and not likely to get a whole lot better. Even coinbase can be a PITA sometimes, it's really the Ubuntu of the crypto-currency world IMHO.
Also quick question: When was the last time you thought about the swipe-fees for your CC? I'll answer for you: Never. Yet with BTC and other crypto's this is a concern. And please, don't even talk about "Oh it's gotten better with the lightning network" or "The new QRS spec will speed this up", it's really just embarrassing.
Also quick question: When was the last time you thought about the swipe-fees for your CC? I'll answer for you: Never. Yet with BTC and other crypto's this is a concern. And please, don't even talk about "Oh it's gotten better with the lightning network" or "The new QRS spec will speed this up", it's really just embarrassing.
Depends on the industry. For very large transactions, like if you are paying a home improvement contractor for something, they will often make you eat the fees if you want to pay with a credit card. So you end up having to figure out where your checkbook is (probably collecting dust in a box somewhere).
I give Bitcoin and LN a continuous pass on UX for now. We're in the infrastructure phase -- growing trust and improving reliability matters far more than UX. Before you know it, there will be 20 years of development and battle-testing behind the tech. The UX can come at any point in the future, while a breach of trust would be fatal. It's a question of ruthless prioritization. Thankfully, the open source devs behind these projects are long-term thinkers, not ponzi-scheme enablers.
Lastly, the UX need not come from Bitcoin/LN. They are a protocol, not a product.
I give Bitcoin and LN a continuous pass on UX for now. We're in the infrastructure phase -- growing trust and improving reliability matters far more than UX. Before you know it, there will be 20 years of development and battle-testing behind the tech. The UX can come at any point in the future, while a breach of trust would be fatal. It's a question of ruthless prioritization. Thankfully, the open source devs behind these projects are long-term thinkers, not ponzi-scheme enablers.
Lastly, the UX need not come from Bitcoin/LN. They are a protocol, not a product.
> So you end up having to figure out where your checkbook is (probably collecting dust in a box somewhere).
Are you based in the US? Because almost everywhere else in the world when you say checkbook, people picture movies from the 1970s.
When paying a home improvement contractor, they send me an invoice where they have an IBAN. I point my banks app at it, it pops up a screen where I just type in the amount that I wish to pay (and sometimes it fills that in automatically too), and within 5 minutes the contractor has the money on their account. Neither I nor the contractor pay any fees for this transaction.
Are you based in the US? Because almost everywhere else in the world when you say checkbook, people picture movies from the 1970s.
When paying a home improvement contractor, they send me an invoice where they have an IBAN. I point my banks app at it, it pops up a screen where I just type in the amount that I wish to pay (and sometimes it fills that in automatically too), and within 5 minutes the contractor has the money on their account. Neither I nor the contractor pay any fees for this transaction.
That's not limited to large payments such as home improvements, either. I do the same thing to pay the guy who comes to tune our piano; I even did it to pay each of the individual cleaners who did a few hours end-of-tenancy cleaning for us the last time we moved.
Checking my chequebook, I see it's well over a year since I last used it.
Checking my chequebook, I see it's well over a year since I last used it.
It's been 20ish years since local grocery-stores, supermarkets, and most shops stopped accepting cheques in the UK.
I've written less than 50 in my life, mostly for mail-order stuff back 15 years. In the past 15 years I've never even owned a cheque-book, the banks just don't give them out.
I've written less than 50 in my life, mostly for mail-order stuff back 15 years. In the past 15 years I've never even owned a cheque-book, the banks just don't give them out.
Yes. I pay my window cleaner this way.
While I can agree about the lack of user focus, I disagree with the precise way in which lack of user focus is the failure point for both Linux Desktop and Bitcoin.
See, neither of these things can be presented to a user as a tool that can make their lives better, which is what users actually want. Strip away all the hype and math and crypto jargon and what is Bitcoin to someone? An inconvenient currency they can't pay taxes with and have to jump through hoops to use for nebulous benefit. Where did Bitcoin actually find traction amongst users? As a way of transferring money overseas, because it could do it with a lot less hassle than traditional methods.
See, neither of these things can be presented to a user as a tool that can make their lives better, which is what users actually want. Strip away all the hype and math and crypto jargon and what is Bitcoin to someone? An inconvenient currency they can't pay taxes with and have to jump through hoops to use for nebulous benefit. Where did Bitcoin actually find traction amongst users? As a way of transferring money overseas, because it could do it with a lot less hassle than traditional methods.
> See, neither of these things can be presented to a user as a tool that can make their lives better
Did you read the article?
Quoting: "In 2014 a large school of thought suggested that the main breakthrough use case for Bitcoin would be peer to peer transactions. That being customers and businesses paying for goods and services directly between one another without having to rely on payment networks such as Visa."
The use case is certainly for consumers. Direct consumers. Same with Linux Desktop. Just go to Ubuntu.com - what are they pitching?
In my view, there is no question whether there is a lack of user focus. It is one of the major reasons (if not the top reason) for lack of traction.
Did you read the article?
Quoting: "In 2014 a large school of thought suggested that the main breakthrough use case for Bitcoin would be peer to peer transactions. That being customers and businesses paying for goods and services directly between one another without having to rely on payment networks such as Visa."
The use case is certainly for consumers. Direct consumers. Same with Linux Desktop. Just go to Ubuntu.com - what are they pitching?
In my view, there is no question whether there is a lack of user focus. It is one of the major reasons (if not the top reason) for lack of traction.
> That being customers and businesses paying for goods and services directly between one another without having to rely on payment networks such as Visa.
We already have cash for that! It completely ignores the reasons why people use payment networks like Visa instead of just exchanging cash. There are fraud protections, credit, reward points, etc. What bitcoin brings to the table is simply not something very many people actually want for the tradeoffs involved.
We already have cash for that! It completely ignores the reasons why people use payment networks like Visa instead of just exchanging cash. There are fraud protections, credit, reward points, etc. What bitcoin brings to the table is simply not something very many people actually want for the tradeoffs involved.
I’m with you. They’re not designed for consumer use. The core of the argument of this thread is - these technologies are being marketed and pitched towards consumers despite of what you’re highlighting.
I don't think you are wrong, but in the case of Bitcoin I think a lack of user focus is a secondary problem. The primary problem is that Bitcoin's economics don't work.
If it becomes popular, its nominal value explodes due to deflationary effects. This makes it inconvenient to use for money and rewards speculation and Ponzi type behavior. This drives people away from using it as money and it crashes. Repeat.
Bitcoin was getting some adoption in 2016 and early 2017, but the late 2017 bubble led to many retailers dropping it due to price instability. The late 2017 Bitcoin bubble was actually a deflationary collapse of the currency. After it there were only speculators left holding bags and trying to gradually get out before other speculators realized it was time to get out. That's where we still are today.
If it becomes popular, its nominal value explodes due to deflationary effects. This makes it inconvenient to use for money and rewards speculation and Ponzi type behavior. This drives people away from using it as money and it crashes. Repeat.
Bitcoin was getting some adoption in 2016 and early 2017, but the late 2017 bubble led to many retailers dropping it due to price instability. The late 2017 Bitcoin bubble was actually a deflationary collapse of the currency. After it there were only speculators left holding bags and trying to gradually get out before other speculators realized it was time to get out. That's where we still are today.
Yet today, half the world with computer access uses Linux, directly. And the entire world uses it indirectly.
But ~0% of them know or care that they use Linux, it's either is a functional device for them or has a rebranded OS (Android)
It's branding, it's more about perception than raw usage statistics.
I wouldn't call my Android phone or smart TV a Linux box, and when I browse a website there's no "served by Linux" logo :) end users simply have no idea nor care about any of this.
I wouldn't call my Android phone or smart TV a Linux box, and when I browse a website there's no "served by Linux" logo :) end users simply have no idea nor care about any of this.
Nobody is disputing that Linux became an overwhelming success.
spectramax was comparing it to Linux on the desktop (which never really became mainstream).
spectramax was comparing it to Linux on the desktop (which never really became mainstream).
He's specifically talking about Linux on the Desktop, which is hovering around 2% market share ( http://gs.statcounter.com/os-market-share/desktop/worldwide/... )
It might be that bitcoin is similar to linux - used as a backbone, but not customer friendly enough to ever be used directly by customers. Like maybe banks use it to transfer large amounts of money between each other or something.
It might be that bitcoin is similar to linux - used as a backbone, but not customer friendly enough to ever be used directly by customers. Like maybe banks use it to transfer large amounts of money between each other or something.
Almost 3%, if combined with ChromeOS. IMHO, it is huge success, even if we forget about Linux domination in market of supercomputers, servers, smartphones, and large segment of market in IoT and robotics.
Bitcoin is far far away from such success.
Bitcoin is far far away from such success.
> It might be that bitcoin is similar to linux - used as a backbone, but not customer friendly enough to ever be used directly by customers.
That's my point; I think this is a possible and not unreasonable outcome for Bitcoin.
That's my point; I think this is a possible and not unreasonable outcome for Bitcoin.
Bitcoin has a lot of problems which are individually fatal to the whole enterprise. It would be a terrible idea even if it were so intuitive a goldfish could use it.
The other issue which kills wide adoption is price fluctuation.
People using it as a regular currency need their account value to remain what they expect it to be. High viability strongly repels regular users and attracts high risk speculators. And maybe that is a fun outcome but it does make it unusable as currency.
It's still worth accepting on principle of course.
People using it as a regular currency need their account value to remain what they expect it to be. High viability strongly repels regular users and attracts high risk speculators. And maybe that is a fun outcome but it does make it unusable as currency.
It's still worth accepting on principle of course.
At Scribophile, I set up an option to pay for a membership upgrade directly with Bitcoin, i.e., without an intermediary to USD like Coinbase. Customers would be given a Bitcoin address to send a certain amount of Bitcoin to for a 1-year upgrade purchase, and once the transaction was verified, their account would be upgraded.
In the ~5 years we had the option, I think we had about 3 purchases with Bitcoin.
I kept it as an option for a long time because I was mildly interested in the philosophy of Bitcoin. That is, its use as an alternate currency for everyday transactions, not its use as an intermediary for USD transactions or its use as a Ponzi scheme to separate the stupid from their savings.
But with such a poor sales rate I finally removed it some time last year. It was interesting while it lasted but Bitcoin is clearly nowhere near being useful for e.g. buying a bag of flour.
After some thought I decided that the entire cryptocurrency space, in its current pump-and-dump/outright scam incarnation, is mostly stupid, and unethical at best and criminal at worst. I could have kept Bitcoin payment as an option indefinitely--it's not hard to keep a static page up--but I felt that doing so would be in some small way promoting an unethical industry. (Unethical not because of what people are buying with crypto, but because today crypto is being used as a thinly-veiled scam to trick gullible people out of their investment money.)
In the ~5 years we had the option, I think we had about 3 purchases with Bitcoin.
I kept it as an option for a long time because I was mildly interested in the philosophy of Bitcoin. That is, its use as an alternate currency for everyday transactions, not its use as an intermediary for USD transactions or its use as a Ponzi scheme to separate the stupid from their savings.
But with such a poor sales rate I finally removed it some time last year. It was interesting while it lasted but Bitcoin is clearly nowhere near being useful for e.g. buying a bag of flour.
After some thought I decided that the entire cryptocurrency space, in its current pump-and-dump/outright scam incarnation, is mostly stupid, and unethical at best and criminal at worst. I could have kept Bitcoin payment as an option indefinitely--it's not hard to keep a static page up--but I felt that doing so would be in some small way promoting an unethical industry. (Unethical not because of what people are buying with crypto, but because today crypto is being used as a thinly-veiled scam to trick gullible people out of their investment money.)
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It's about time we admit the emperor has no clothes. BTC/ETH/XYY/123 can store value (I don't care to get into the fluctuations right now) and moving it around can be a lot easier than outdated systems like ACH but they are terrible for paying for things. Maybe something like the lightning network or similar will be able to solve part of that but accepting BTC has always been more of a fad/PR-move than an actual business decision.
Unless you are running in the gray/dark web (Silk Road-type, Torrent/nzb trackers, seedboxes, etc) your customers are not going to jump through the hoops required to spend BTC.
Unless you are running in the gray/dark web (Silk Road-type, Torrent/nzb trackers, seedboxes, etc) your customers are not going to jump through the hoops required to spend BTC.
> moving it around can be a lot easier than outdated systems like ACH
To be specific: a lot easier than outdated systems in the United States.
If you do any work outside the United States, this is much less of a thing.
To be specific: a lot easier than outdated systems in the United States.
If you do any work outside the United States, this is much less of a thing.
Gray/dark web stuff is different in America/most European countries than in other parts of the world though.
Just because something is perfectly legal here, doesn't mean that it's the same elsewhere.
Just because something is perfectly legal here, doesn't mean that it's the same elsewhere.
Users that already have a Bitcoin wallet don't have to jump through any hoops to spend BTC. It's just as easy as any kind of digital money transfer.
Obviously using BTC to pay for anything is a huge hassle if you don't already have a wallet with some BTC in it. But that's like saying Apple Pay is inconvenient because your customers have to go to and buy an iPhone first.
Obviously using BTC to pay for anything is a huge hassle if you don't already have a wallet with some BTC in it. But that's like saying Apple Pay is inconvenient because your customers have to go to and buy an iPhone first.
except i don't need to wait for blockchain confirmations on apple pay, it's instant.
Most merchants I've dealt with accept a transaction in the mempool as enough confirmation of payment, which makes it nearly instant.
If you want more strict safety/guarantees, sidechain solutions are starting to reach viability: https://medium.com/gitcoin/burner-wallet-at-ethdenver-was-fa...
Technical solutions to problems like slow block times exist, but the engineering part is hard. Just like there's no technical reason why Linux can't be succesful for desktops, it takes time to implement all the details that make it a smooth experience. We'll get there eventually.
If you want more strict safety/guarantees, sidechain solutions are starting to reach viability: https://medium.com/gitcoin/burner-wallet-at-ethdenver-was-fa...
Technical solutions to problems like slow block times exist, but the engineering part is hard. Just like there's no technical reason why Linux can't be succesful for desktops, it takes time to implement all the details that make it a smooth experience. We'll get there eventually.
It's also reversible.
With bitcoin, it might take a bit longer, but transaction are non-reversible after a few confirmations.
Any other system can reverse payments even 6 months down the line. Sucks for businesses.
With bitcoin, it might take a bit longer, but transaction are non-reversible after a few confirmations.
Any other system can reverse payments even 6 months down the line. Sucks for businesses.
I've heard this argument a few times now and while yes this is true for Bitcoin, there is nothing stopping another project from implementing this feature. Smart contracts, for example, make this type of feature open to any developer who wishes to code it.
In my view, Bitcoin is like MySQL and cryptocurrency/blockchain is SQL. Sure bitcoin has specific limitations but any other generic cryptocurrency doesn't have to implement features in the same way.
In my view, Bitcoin is like MySQL and cryptocurrency/blockchain is SQL. Sure bitcoin has specific limitations but any other generic cryptocurrency doesn't have to implement features in the same way.
"Blockchain" is a database, but bitcoin is much more than its storage backend. The reason you can't simply replicate it is due to the monetary policy. In a world where anyone can make their own cryptocurrency, and we have "bluejellybeanBucks" and "sparkieSterling", how much value are these silly currencies going to have?
Their value will converge towards zero as more of them are printed and less of them are actually useful for representing value. The whole point of Bitcoin was to solve this inflation problem. If you don't care about inflation, you don't need a "blockchain" to begin with.
Bitcoin has the network effects, and it also required the creation (inflation) of some initial set of distributed digital asset because it was the first of its kind, and could not piggyback off of some other scarce, verifiable asset. Every other "cryptocurrency" that came afterwards, could piggyback of a scarce digital asset and avoid the inflation problem. They had Bitcoin to piggyback off.
In future, all "blockchain" projects will be implemented as sidechains to bitcoin, or as payment networks which transact in Bitcoin and therefore don't create inflation by design. Things like the Liquid sidechain, Sidechain One (drivechains), Rootstock, Lightning network, etc. These are the "implementations" which will be competing for users, but they'll all be functioning on the same currency, because any currency other than Bitcoin is destined to lose value with time, due to the inflation they designed into their system.
Their value will converge towards zero as more of them are printed and less of them are actually useful for representing value. The whole point of Bitcoin was to solve this inflation problem. If you don't care about inflation, you don't need a "blockchain" to begin with.
Bitcoin has the network effects, and it also required the creation (inflation) of some initial set of distributed digital asset because it was the first of its kind, and could not piggyback off of some other scarce, verifiable asset. Every other "cryptocurrency" that came afterwards, could piggyback of a scarce digital asset and avoid the inflation problem. They had Bitcoin to piggyback off.
In future, all "blockchain" projects will be implemented as sidechains to bitcoin, or as payment networks which transact in Bitcoin and therefore don't create inflation by design. Things like the Liquid sidechain, Sidechain One (drivechains), Rootstock, Lightning network, etc. These are the "implementations" which will be competing for users, but they'll all be functioning on the same currency, because any currency other than Bitcoin is destined to lose value with time, due to the inflation they designed into their system.
>"Blockchain" is a database, but bitcoin is much more than its storage backend.
Blockchain in this context is referring to a specific set of implementation details to create a database. They are similar but not the same, a blockchain is a database but a database is not a blockchain.
>The reason you can't simply replicate it is due to the monetary policy.
I’m not fully grasping what you are implying here, mind explaining further?
> In a world where anyone can make their own cryptocurrency, and we have "bluejellybeanBucks" and "sparkieSterling", how much value are these silly currencies going to have?
This world already exists and the value of each should be somewhat independent, “bluejellybeanBucks” may have a feature that creates far more value than “sparkieSterling” for example. I would postulate that the majority of the currencies created will be low value but I don’t really see this as an issue with cryptocurrency in general.
> Their value will converge towards zero as more of them are printed and less of them are actually useful for representing value.
I don’t actually see an issue with this as market forces can handle this. If I have a street with a single Starbucks (bitcoin) serving the population adequately I can still open 20 more shops. The value will converge towards zero as more stores open, thus the closure of failed stores should occur.
>The whole point of Bitcoin was to solve this inflation problem. If you don't care about inflation, you don't need a "blockchain" to begin with.
Do you have a source for this claim? Although a touted difference between fiat and bitcoin, the idea of deflation isn’t limited to bitcoin. I could create bluejellybeanBucks to include the same mechanism that bitcoin does. I could also decide to print the currency at specific times or even give control to a central authority that will print money when deemed fit.
> Bitcoin has the network effects, and it also required the creation (inflation) of some initial set of distributed digital asset because it was the first of its kind, and could not piggyback off of some other scarce, verifiable asset.
While true Bitcoin does had the network effects, this does not mean another contender will be unable to rise to the top. Any cryptocurrency that one chooses to create can implement it in a way that mirrors bitcoin or piggyback off of some asset.
> Every other "cryptocurrency" that came afterwards, could piggyback of a scarce digital asset and avoid the inflation problem. They had Bitcoin to piggyback off. Well, they didn’t have to and again, this is a choice in the development of each specific asset.
> In future, all "blockchain" projects will be implemented as sidechains to bitcoin, or as payment networks which transact in Bitcoin and therefore don't create inflation by design.
This is a little absurd to me and I don’t really see this future happening. In anycase, any predictions of the future here is mainly speculation.
> Things like the Liquid sidechain, Sidechain One (drivechains), Rootstock, Lightning network, etc. These are the "implementations" which will be competing for users, but they'll all be functioning on the same currency, because any currency other than Bitcoin is destined to lose value with time, due to the inflation they designed into their system.
Sure, the implementations you described are on bitcoin, but again, solutions of this sort can be applied generally to other cryptocurrencies. Any currency other than Bitcoin is NOT destined to lose value with time. If you are specifically talking about a currency that has inflation built in, sure I would agree, but when discussing a currency this isn’t necessarily the case.
Blockchain in this context is referring to a specific set of implementation details to create a database. They are similar but not the same, a blockchain is a database but a database is not a blockchain.
>The reason you can't simply replicate it is due to the monetary policy.
I’m not fully grasping what you are implying here, mind explaining further?
> In a world where anyone can make their own cryptocurrency, and we have "bluejellybeanBucks" and "sparkieSterling", how much value are these silly currencies going to have?
This world already exists and the value of each should be somewhat independent, “bluejellybeanBucks” may have a feature that creates far more value than “sparkieSterling” for example. I would postulate that the majority of the currencies created will be low value but I don’t really see this as an issue with cryptocurrency in general.
> Their value will converge towards zero as more of them are printed and less of them are actually useful for representing value.
I don’t actually see an issue with this as market forces can handle this. If I have a street with a single Starbucks (bitcoin) serving the population adequately I can still open 20 more shops. The value will converge towards zero as more stores open, thus the closure of failed stores should occur.
>The whole point of Bitcoin was to solve this inflation problem. If you don't care about inflation, you don't need a "blockchain" to begin with.
Do you have a source for this claim? Although a touted difference between fiat and bitcoin, the idea of deflation isn’t limited to bitcoin. I could create bluejellybeanBucks to include the same mechanism that bitcoin does. I could also decide to print the currency at specific times or even give control to a central authority that will print money when deemed fit.
> Bitcoin has the network effects, and it also required the creation (inflation) of some initial set of distributed digital asset because it was the first of its kind, and could not piggyback off of some other scarce, verifiable asset.
While true Bitcoin does had the network effects, this does not mean another contender will be unable to rise to the top. Any cryptocurrency that one chooses to create can implement it in a way that mirrors bitcoin or piggyback off of some asset.
> Every other "cryptocurrency" that came afterwards, could piggyback of a scarce digital asset and avoid the inflation problem. They had Bitcoin to piggyback off. Well, they didn’t have to and again, this is a choice in the development of each specific asset.
> In future, all "blockchain" projects will be implemented as sidechains to bitcoin, or as payment networks which transact in Bitcoin and therefore don't create inflation by design.
This is a little absurd to me and I don’t really see this future happening. In anycase, any predictions of the future here is mainly speculation.
> Things like the Liquid sidechain, Sidechain One (drivechains), Rootstock, Lightning network, etc. These are the "implementations" which will be competing for users, but they'll all be functioning on the same currency, because any currency other than Bitcoin is destined to lose value with time, due to the inflation they designed into their system.
Sure, the implementations you described are on bitcoin, but again, solutions of this sort can be applied generally to other cryptocurrencies. Any currency other than Bitcoin is NOT destined to lose value with time. If you are specifically talking about a currency that has inflation built in, sure I would agree, but when discussing a currency this isn’t necessarily the case.
> I’m not fully grasping what you are implying here, mind explaining further?
Bitcoin catches the interest of low time preference people who want to be able to store assets (accumulate capital) in a way that a government could not come and steal their money. Inflation is one form of theft, it's a hidden tax on savers, continually picking small amounts of their stored value. The "blockchain" is interesting technology to achieve this, but if there were an alternative which provided the same security guarantees then it too would be just as good. It's not the "blockchain" which is the interesting development, but the innovation of censorship resistant, permissionless, non-inflationary money. A blockchain is really just an application of a Merkle-Tree, something which has been around for decades and is used in many systems already.
> This world already exists and the value of each should be somewhat independent, “bluejellybeanBucks” may have a feature that creates far more value than “sparkieSterling” for example. I would postulate that the majority of the currencies created will be low value but I don’t really see this as an issue with cryptocurrency in general.
I think it's a mistake to look at a cryptocurrency as "creating value". They do nothing of the kind. Money does not create value. Lending money can create value by allowing enterprises to expand in exchange for some of the profits, but in order to lend money, it needs to be worth something to begin with.
Imagine if I went around lending "Hasbro Monopoly Money" to people and expecting them to "create value" from it. It's absurd. Cryptocurrencies in general are no different from Monopoly money. Printing your own money does not create any value at all, because anyone can do it. Cryptocurrencies have precisely the same problem, that anyone can create one. Nobody has a leading edge, because the ideas can be copied too. Cryptocurrencies are trying to forcibly grab some network effect to make them appear to be more than Monopoly money, but they only attract speculators and gamblers who want to make a few bucks. Nobody is interested in the "technology" behind Dogecoin. It's hype + marketing + memes.
As the hype dies down and reality gets a hold, these cryptocurrencies will all be competing for a share of the declining "dumb money" which comes into the crypto space. Lets say we had some objective measure of value of this value, call it V. If we have one cryptocurrency, then the value of each of its tokens will be a function of V over the total supply of its currency. When you introduce a second cryptocurrency, it doesn't increase "V". It merely increases the number of tokens which V is split among. Each token will therefore hold less of a portion of V than before. Keep adding cryptocurrencies and splitting V further, the only outcome is that they become worth effectively 0.
The mistake cryptocurrency proponents believe is that V will increase due to their "innovation," and not just because they're collecting easy (gambled) money. Far from creating value, they do nothing but extract value from laymen and enrich their creators. There is nothing in economic history which suggests that new value will be created merely by the creation of a new money. Even Bitcoin didn't "create" value in itself, it relied on people exchanging it for other value initially. Bitcoin has created value in industries surrounding it, but this doesn't increase the value of bitcoin itself unless people are willing to exchange some other value for it.
> I don’t actually see an issue with this as market forces can handle this. If I have a street with a single Starbucks (bitcoin) serving the population adequately I can still open 20 more shops. The value will converge towards zero as more stores open, thus the closure of failed stores should occur.
I'm not contesting that the market will deal with it. I'm just telling you the market's outcome in advance, because it is inevitable. Either Bitcoin will come out as the winner, or all decentralized cryptocurrencies will become worthless and we'll end up with digital fiat.
> Do you have a source for this claim? Although a touted difference between fiat and bitcoin, the idea of deflation isn’t limited to bitcoin. I could create bluejellybeanBucks to include the same mechanism that bitcoin does.
It was hinted in the Bitcoin whitepaper (the removal of inflation altogether), and other texts written by Satoshi Nakamoto. However, it was implied to the cypherpunks who were already interested in digital money, because it was a fundamentally unsolved problem. Various digital monies had come and gone before it, but it wasn't until Bitcoin that both the removal of trusted entities and the removal of inflation had been achieved together. This is what made Bitcoin successful, and it's a success that cannot possibly be repeated, because it already happened. You can't invent the wheel a second time, it was already done.
Because their value is measured in terms of Bitcoin (due to bitcoin being the ramp by which alts are obtained), new cryptocurrencies which print their own money (ie, Litecoin) are simply adding inflation to the (overall) digital currency system. There are 21M bitcoins and 84M litecoins. If one Litecoin is worth (via speculation) 0.013BTC, then 84M of them is ~1M BTC of value. In effect, there are now "22M worth of BTC" in tokens, because people who don't understand economics think that LTC has some tangible advantage that Bitcoin doesn't provide.
As above, there is still a finite amount of value being put into cryptocurrency, V. The value of a bitcoin is now V/22M. If we now create XCoin, YCoin and ZCoin, each printing many millions, then you're just increasing the denominator but you're not actually increasing the numerator, V. People are going to stop putting money into bitcoin (or cryptocurrency in general) because it will become a terrible store of value, worse than fiat, because no cryptocurrency can hold value whilst there is no cap on inflation. This means V will acttually decrease rather than increase, and the value of each coin will decrease in response.
The failure of people to understand economics and look at Bitcoin as merely a technical system means that no decentralized currency is going to have any value at all, unless only one of them does (to fix the inflation problem). People would have more faith in centralized shitcoins pushed out by Facebook et al than they'd have with an ecosystem of coins which cannot hold value.
> While true Bitcoin does had the network effects, this does not mean another contender will be unable to rise to the top. Any cryptocurrency that one chooses to create can implement it in a way that mirrors bitcoin or piggyback off of some asset.
If anyone can create a cryptocurrency, then there is nothing that can set one cryptocurrency ahead of the others. If there is some interesting technology, that same technology can be reused by somebody else as a bitcoin sidechain, and then you'd have the same technology, plus the "inflation fix" of Bitoin. It would be superior to the coin which printed its own token. This is why it is extremely unlikely that any "flippening" will occur. Bitcoin has the network effects and the developers who are most focused on the principles behind it (financial autonomy etc). The thousands of others have a few developers who are trying to strike it rich by selling to people like yourself, or themselves, because most of the developers themselves have no grasp of economics.
That isn't to say that there isn't some use in other currencies. Monero is an example of one which has a real tangible use-case, for anonymous payments which Bitcoin doesn't provide yet. It's very likely that Bitcoin will get this functionality at some point, and since Monero is inflationary by design, it will probably not retain value. It's use case will eventually be assimilated by something pegged to Bitcoin. The same is true for other coins, although I'm not aware of any other currency besides Bitcoin or Monero which does offer a real tangible use case.
> Sure, the implementations you described are on bitcoin, but again, solutions of this sort can be applied generally to other cryptocurrencies.
Put this into reverse perspective. If any solutions can be applied generally, then they can be applied to Bitcoin too, and take advantage of Bitcoin's larger network effect. Who is going to win then? The die has already been cast and Bitcoin is leading the charge by a very large margin. Loss of faith in Bitcoin would imply a loss of faith in cryptocurrency as a concept, meaning that if people decide to drop Bitcoin, it's unlikely they'll be replacing it with some snakeoil competitor of it.
Bitcoin catches the interest of low time preference people who want to be able to store assets (accumulate capital) in a way that a government could not come and steal their money. Inflation is one form of theft, it's a hidden tax on savers, continually picking small amounts of their stored value. The "blockchain" is interesting technology to achieve this, but if there were an alternative which provided the same security guarantees then it too would be just as good. It's not the "blockchain" which is the interesting development, but the innovation of censorship resistant, permissionless, non-inflationary money. A blockchain is really just an application of a Merkle-Tree, something which has been around for decades and is used in many systems already.
> This world already exists and the value of each should be somewhat independent, “bluejellybeanBucks” may have a feature that creates far more value than “sparkieSterling” for example. I would postulate that the majority of the currencies created will be low value but I don’t really see this as an issue with cryptocurrency in general.
I think it's a mistake to look at a cryptocurrency as "creating value". They do nothing of the kind. Money does not create value. Lending money can create value by allowing enterprises to expand in exchange for some of the profits, but in order to lend money, it needs to be worth something to begin with.
Imagine if I went around lending "Hasbro Monopoly Money" to people and expecting them to "create value" from it. It's absurd. Cryptocurrencies in general are no different from Monopoly money. Printing your own money does not create any value at all, because anyone can do it. Cryptocurrencies have precisely the same problem, that anyone can create one. Nobody has a leading edge, because the ideas can be copied too. Cryptocurrencies are trying to forcibly grab some network effect to make them appear to be more than Monopoly money, but they only attract speculators and gamblers who want to make a few bucks. Nobody is interested in the "technology" behind Dogecoin. It's hype + marketing + memes.
As the hype dies down and reality gets a hold, these cryptocurrencies will all be competing for a share of the declining "dumb money" which comes into the crypto space. Lets say we had some objective measure of value of this value, call it V. If we have one cryptocurrency, then the value of each of its tokens will be a function of V over the total supply of its currency. When you introduce a second cryptocurrency, it doesn't increase "V". It merely increases the number of tokens which V is split among. Each token will therefore hold less of a portion of V than before. Keep adding cryptocurrencies and splitting V further, the only outcome is that they become worth effectively 0.
The mistake cryptocurrency proponents believe is that V will increase due to their "innovation," and not just because they're collecting easy (gambled) money. Far from creating value, they do nothing but extract value from laymen and enrich their creators. There is nothing in economic history which suggests that new value will be created merely by the creation of a new money. Even Bitcoin didn't "create" value in itself, it relied on people exchanging it for other value initially. Bitcoin has created value in industries surrounding it, but this doesn't increase the value of bitcoin itself unless people are willing to exchange some other value for it.
> I don’t actually see an issue with this as market forces can handle this. If I have a street with a single Starbucks (bitcoin) serving the population adequately I can still open 20 more shops. The value will converge towards zero as more stores open, thus the closure of failed stores should occur.
I'm not contesting that the market will deal with it. I'm just telling you the market's outcome in advance, because it is inevitable. Either Bitcoin will come out as the winner, or all decentralized cryptocurrencies will become worthless and we'll end up with digital fiat.
> Do you have a source for this claim? Although a touted difference between fiat and bitcoin, the idea of deflation isn’t limited to bitcoin. I could create bluejellybeanBucks to include the same mechanism that bitcoin does.
It was hinted in the Bitcoin whitepaper (the removal of inflation altogether), and other texts written by Satoshi Nakamoto. However, it was implied to the cypherpunks who were already interested in digital money, because it was a fundamentally unsolved problem. Various digital monies had come and gone before it, but it wasn't until Bitcoin that both the removal of trusted entities and the removal of inflation had been achieved together. This is what made Bitcoin successful, and it's a success that cannot possibly be repeated, because it already happened. You can't invent the wheel a second time, it was already done.
Because their value is measured in terms of Bitcoin (due to bitcoin being the ramp by which alts are obtained), new cryptocurrencies which print their own money (ie, Litecoin) are simply adding inflation to the (overall) digital currency system. There are 21M bitcoins and 84M litecoins. If one Litecoin is worth (via speculation) 0.013BTC, then 84M of them is ~1M BTC of value. In effect, there are now "22M worth of BTC" in tokens, because people who don't understand economics think that LTC has some tangible advantage that Bitcoin doesn't provide.
As above, there is still a finite amount of value being put into cryptocurrency, V. The value of a bitcoin is now V/22M. If we now create XCoin, YCoin and ZCoin, each printing many millions, then you're just increasing the denominator but you're not actually increasing the numerator, V. People are going to stop putting money into bitcoin (or cryptocurrency in general) because it will become a terrible store of value, worse than fiat, because no cryptocurrency can hold value whilst there is no cap on inflation. This means V will acttually decrease rather than increase, and the value of each coin will decrease in response.
The failure of people to understand economics and look at Bitcoin as merely a technical system means that no decentralized currency is going to have any value at all, unless only one of them does (to fix the inflation problem). People would have more faith in centralized shitcoins pushed out by Facebook et al than they'd have with an ecosystem of coins which cannot hold value.
> While true Bitcoin does had the network effects, this does not mean another contender will be unable to rise to the top. Any cryptocurrency that one chooses to create can implement it in a way that mirrors bitcoin or piggyback off of some asset.
If anyone can create a cryptocurrency, then there is nothing that can set one cryptocurrency ahead of the others. If there is some interesting technology, that same technology can be reused by somebody else as a bitcoin sidechain, and then you'd have the same technology, plus the "inflation fix" of Bitoin. It would be superior to the coin which printed its own token. This is why it is extremely unlikely that any "flippening" will occur. Bitcoin has the network effects and the developers who are most focused on the principles behind it (financial autonomy etc). The thousands of others have a few developers who are trying to strike it rich by selling to people like yourself, or themselves, because most of the developers themselves have no grasp of economics.
That isn't to say that there isn't some use in other currencies. Monero is an example of one which has a real tangible use-case, for anonymous payments which Bitcoin doesn't provide yet. It's very likely that Bitcoin will get this functionality at some point, and since Monero is inflationary by design, it will probably not retain value. It's use case will eventually be assimilated by something pegged to Bitcoin. The same is true for other coins, although I'm not aware of any other currency besides Bitcoin or Monero which does offer a real tangible use case.
> Sure, the implementations you described are on bitcoin, but again, solutions of this sort can be applied generally to other cryptocurrencies.
Put this into reverse perspective. If any solutions can be applied generally, then they can be applied to Bitcoin too, and take advantage of Bitcoin's larger network effect. Who is going to win then? The die has already been cast and Bitcoin is leading the charge by a very large margin. Loss of faith in Bitcoin would imply a loss of faith in cryptocurrency as a concept, meaning that if people decide to drop Bitcoin, it's unlikely they'll be replacing it with some snakeoil competitor of it.
Confirmations are pretty quick now. And with Lightning is instant.
ACH is slow by design. It could take milliseconds if desired.
>Maybe something like the lightning network or similar will be able to solve part
The article mentions they also take Dash which transacts pretty much instantly for less than 1c but still hasn't taken off apart from maybe a few outlets in Venezuela.
The article mentions they also take Dash which transacts pretty much instantly for less than 1c but still hasn't taken off apart from maybe a few outlets in Venezuela.
Many posts here about how Bitcoin is not user friendly, and how it can't compete with existing (digital) payment solutions in terms of UX. My experience with it is quite the opposite, and I prefer paying with Bitcoin/cryptocurrencies in most (but not all) situations.
My phone has a wallet app with some small amount of Bitcoin on it. If I have to pay for something, all it takes is opening the app, scanning a QR code, and clicking ok. For paying beers at a bar (which I have done) the setup is slightly less convenient than NFC touch-to-pay solutions but not significantly worse. But for things like purchasing digital goods or other items online, the process is sometimes significantly better than alternatives. If I purchase something from an online vendor it's the same process; QR code shows up, I scan it with my app, and press ok. For this scenario it is almost always more convenient than having to enter some payment information, or logging in to some payment processor like PayPal or whatever solution my bank has implemented.
The downsides are that my phone effectively has a bundle of cash strapped to it, and when I lose the phone my cash is gone too. Getting the money onto my phone is also not the most convenient process as I need some external service like an exchange to acquire the coins first.
Not all the problems have been solved, but things are slowly getting better. Just like Linux on the Desktop, people will keep repeating the same story that it's never going to happen, but the reality is that modern Linux distributions have nearly the same install-and-go ergonomics as Windows, with many happy users.
My phone has a wallet app with some small amount of Bitcoin on it. If I have to pay for something, all it takes is opening the app, scanning a QR code, and clicking ok. For paying beers at a bar (which I have done) the setup is slightly less convenient than NFC touch-to-pay solutions but not significantly worse. But for things like purchasing digital goods or other items online, the process is sometimes significantly better than alternatives. If I purchase something from an online vendor it's the same process; QR code shows up, I scan it with my app, and press ok. For this scenario it is almost always more convenient than having to enter some payment information, or logging in to some payment processor like PayPal or whatever solution my bank has implemented.
The downsides are that my phone effectively has a bundle of cash strapped to it, and when I lose the phone my cash is gone too. Getting the money onto my phone is also not the most convenient process as I need some external service like an exchange to acquire the coins first.
Not all the problems have been solved, but things are slowly getting better. Just like Linux on the Desktop, people will keep repeating the same story that it's never going to happen, but the reality is that modern Linux distributions have nearly the same install-and-go ergonomics as Windows, with many happy users.
> The downsides are that my phone effectively has a bundle of cash strapped to it, and when I lose the phone my cash is gone too.
you should have the root mnemonic of the wallet stored separately, in which case you would be able to regenerate the private keys and access your funds again.
i can recommend the eclair wallet, by acinq, for android. as well as traditional on-chain transactions, it also supports spend-only lightning channels. receive functionality is being tested on testnet and should arrive on mainnet soon.
you should have the root mnemonic of the wallet stored separately, in which case you would be able to regenerate the private keys and access your funds again.
i can recommend the eclair wallet, by acinq, for android. as well as traditional on-chain transactions, it also supports spend-only lightning channels. receive functionality is being tested on testnet and should arrive on mainnet soon.
It's exactly narratives like that, "you have to store this passphrase somewhere secure or you risk losing all your money", that makes anything in this space so much less accessible to normal people.
You can choose to ignore those complexities and just treat a wallet like a simple app that just sends and recieves money without understanding anything about how it works, and the UX is way better. You just have to live with the consequence that your money is gone if you lose the phone (which is the same as losing the cash in your physical wallet when you lose that). In my experience that narrative works much better for onboarding people, because it doesn't place any burden on them to do anything. They just have to choose their level of acceptable risk, which is something they are familiar with (carrying cash in their physical wallet).
You can choose to ignore those complexities and just treat a wallet like a simple app that just sends and recieves money without understanding anything about how it works, and the UX is way better. You just have to live with the consequence that your money is gone if you lose the phone (which is the same as losing the cash in your physical wallet when you lose that). In my experience that narrative works much better for onboarding people, because it doesn't place any burden on them to do anything. They just have to choose their level of acceptable risk, which is something they are familiar with (carrying cash in their physical wallet).
> For paying beers at a bar
So you order the beer, wait for an hour or so to get 6 confirmations, then drink the beer? Sounds like a great recipe to limit your alcohol intake.
So you order the beer, wait for an hour or so to get 6 confirmations, then drink the beer? Sounds like a great recipe to limit your alcohol intake.
I find accepting it & having to pay US taxes to be a pain unless I convert it into USD immediately. Otherwise I have to use special software to figure out the USD price at the time of receipt & then the USD price at the time of conversion into anything else.
I would imagine for large businesses this probably isn't to big of a concern. I also wonder if they could get away with making significant amounts of money by picking the price highs & lows of the day of receipt and day of conversion to USD when reporting taxes.
On the consumer side, I can't imagine keeping track of BTC prices to pay for stuff if I used it as an every day form of currency. I would need special software to help me file taxes. It would need to keep track of every purchase of BTC and then the price of BTC/USD whenever I purchased something. To me this is a huge issue & would create a giant spreadsheet to turn in with my taxes. On the bright side, if more people did this maybe we would have different tax laws regarding cryptocurrencies in the US.
I would imagine for large businesses this probably isn't to big of a concern. I also wonder if they could get away with making significant amounts of money by picking the price highs & lows of the day of receipt and day of conversion to USD when reporting taxes.
On the consumer side, I can't imagine keeping track of BTC prices to pay for stuff if I used it as an every day form of currency. I would need special software to help me file taxes. It would need to keep track of every purchase of BTC and then the price of BTC/USD whenever I purchased something. To me this is a huge issue & would create a giant spreadsheet to turn in with my taxes. On the bright side, if more people did this maybe we would have different tax laws regarding cryptocurrencies in the US.
> I would imagine for large businesses this probably isn't to big of a concern. I also wonder if they could get away with making significant amounts of money by picking the price highs & lows of the day of receipt and day of conversion to USD when reporting taxes.
Nope. The daily spot price is determined and that's the value you need to use in your accounting with currency conversion for tax purposes. It's set by taking the value at a particular time of the day, and that's the value set for the day. That also happens to be the busiest time of day in the Fx markets, unsurprisingly, as minor fluctuations in the price can have massive positive (or negative) impacts on banks businesses.
Nope. The daily spot price is determined and that's the value you need to use in your accounting with currency conversion for tax purposes. It's set by taking the value at a particular time of the day, and that's the value set for the day. That also happens to be the busiest time of day in the Fx markets, unsurprisingly, as minor fluctuations in the price can have massive positive (or negative) impacts on banks businesses.
Good to know. I was under the assumption you were to use the price at the time of the transaction.
The daily spot price seems like a huge risk for businesses.
The daily spot price seems like a huge risk for businesses.
I'm more up on the UK system than the US but how it kind of works here is technically the liability is the price at the time of the transaction but they don't mind you estimating or using approximate prices if it doesn't have a large effect on the tax liability.
> The daily spot price seems like a huge risk for businesses.
You factor it into your pricing models. Take the daily spot price from the day before, go +/- 3 cents in your favour, and you're probably fine. Unless you're dealing with a hugely volatile currency, you're unlikely to see more than a 1 or 2 cent variation on a day by day basis.
You factor it into your pricing models. Take the daily spot price from the day before, go +/- 3 cents in your favour, and you're probably fine. Unless you're dealing with a hugely volatile currency, you're unlikely to see more than a 1 or 2 cent variation on a day by day basis.
This should come as no surprise, but not for the reasons the author thinks.
>I could list 50 different reasons why but for us it boils down to two main facts. A very small percentage of our customers posses Bitcoin in a hot wallet ready to transfer and secondly, Bitcoin can be slow and expensive for small payments.
The main reason is that no one needs to use Bitcoin to pay for their locksmithing. Bitcoin is not your neighborhood Visa competitor. Bitcoin is your last resort payment method/store of value--for when you don't have access to traditional financial infrastructure (for whatever reason). This article is a signal only that people are not ideologically using Bitcoin as a payment (which is a good thing, I don't care to store payments on my node that would be better served by Visa).
>I could list 50 different reasons why but for us it boils down to two main facts. A very small percentage of our customers posses Bitcoin in a hot wallet ready to transfer and secondly, Bitcoin can be slow and expensive for small payments.
The main reason is that no one needs to use Bitcoin to pay for their locksmithing. Bitcoin is not your neighborhood Visa competitor. Bitcoin is your last resort payment method/store of value--for when you don't have access to traditional financial infrastructure (for whatever reason). This article is a signal only that people are not ideologically using Bitcoin as a payment (which is a good thing, I don't care to store payments on my node that would be better served by Visa).
> Bitcoin is your last resort payment method/store of value
This is what people have traditionally held gold for. It feels to me like there are very few use cases that aren't already served by physical gold.
This is what people have traditionally held gold for. It feels to me like there are very few use cases that aren't already served by physical gold.
You can't use gold online in an trust-minimized way. One counterexample are industries with high chargeback/fraud rates. Bitcoin is perfect for merchants exposed to friendly fraud, it completely removes the leverage customers have over them.
But accepting only Bitcoin is hardly an option even for those merchants.
Regardless of what it was, it is really cool to see someone do a follow up on their experience being an early adopter of a technology in their business.
You see so many "why we're choosing this" and not so many "how it went a few years down the line" posts.
You see so many "why we're choosing this" and not so many "how it went a few years down the line" posts.
Agreed. I love retros too. Amazing that some people in this thread don't want to hear it.
Bitcoin is more like gold or diamonds. Expensive to mine. Interesting as an investment and to store wealth outside normal currencies.
But nobody pays in the store with diamonds or gold. It's not practical.
But nobody pays in the store with diamonds or gold. It's not practical.
Great analogy, I'll remember that one. BTC is only really useful to me when other payment methods surpass ~$100 of effort. For example, when paying contractors tens of thousands of $ internationally, it's impossible to avoid $50-300 fees from bank wires, TransferWise, or Xoom. So if both parties are fine with sitting down and figuring out how to send/receive BTC on their computer, only then it is worth my time.
I'm reminded of the guy who lost $400k by trying to do an international transfer of his own money through Quadriga at the point they collapsed.
If only he was using a trustless cryptocurrency rather than a "trusted" custodial entity, he would never have had that problem.
My friend lost trustless cryptocurrency that would be worth well over $400k today by forgetting about it and formatting his hard drive.
He clearly didn't value it highly enough at the time.
You're implying that if he didn't accidentally lose his private keys, he would've had the nerve to hodl it till now and wouldn't have cashed out when it was valued less on the USD markets.
Some banks will shut your account after a long enough period of activity. There are statutes of limitations which may prevent you from claiming any assets you had lodged in the bank if you suddenly remembered you had the bank account N years later.
There are pros and cons to both Bitcoin and the traditional banking system. With Bitcoin, you can at least chose for yourself, whereas the decisions are made for you when you use custodians.
You're implying that if he didn't accidentally lose his private keys, he would've had the nerve to hodl it till now and wouldn't have cashed out when it was valued less on the USD markets.
Some banks will shut your account after a long enough period of activity. There are statutes of limitations which may prevent you from claiming any assets you had lodged in the bank if you suddenly remembered you had the bank account N years later.
There are pros and cons to both Bitcoin and the traditional banking system. With Bitcoin, you can at least chose for yourself, whereas the decisions are made for you when you use custodians.
He minded it on his mac back in 2010 or so when it wasn't really worth anything much and then forgot it was there when the machine malfunctioned. Easy come easy go I guess and it wasn't worth much at the time but would be now.
> Otherwise please use the original title, unless it is misleading or linkbait; don't editorialize.
https://news.ycombinator.com/newsguidelines.html
Actual title is "Accepting Bitcoin as a Small Business – 4 Years In"
https://news.ycombinator.com/newsguidelines.html
Actual title is "Accepting Bitcoin as a Small Business – 4 Years In"
Since that day over four years ago and the time of writing, we have not had one customer ask to pay in Bitcoin, Dash or any other cryptocurrency.
I viewed it as a useful summary of the article, quoting from the article, not editorializing.
I viewed it as a useful summary of the article, quoting from the article, not editorializing.
> Should my small business accept Bitcoin?
> We think accepting Bitcoin is a positive move for your small business. While you may not get anyone paying in it now, it does come with other added benefits
The change of title clearly misrepresents author's message by picking a single fact without context. It doesn't matter if you agree with the author, the message conveyed in modified title is very different from what the article talks about. Don't like the message? Write your own blog post. But don't misrepresent others' intentions.
> We think accepting Bitcoin is a positive move for your small business. While you may not get anyone paying in it now, it does come with other added benefits
The change of title clearly misrepresents author's message by picking a single fact without context. It doesn't matter if you agree with the author, the message conveyed in modified title is very different from what the article talks about. Don't like the message? Write your own blog post. But don't misrepresent others' intentions.
The actual title is link bait. On HN, people don't want to have to read through the whole article to reach a conclusion. In this case, it's perfectly valid to include the main point of the article - Bitcoin failed.
Do I sense another ulterior motive for you to force the title to change? I've definitely seen this behavior on Reddit.
Do I sense another ulterior motive for you to force the title to change? I've definitely seen this behavior on Reddit.
It misrepresents the point of the actual author, the author focuses on everything other than the lack of transactions with crypto. The focus on the number was given by the submitter.
If the case is valid for the rule, motives or biases like mine, yours or anyone's are irrelevant.
If the case is valid for the rule, motives or biases like mine, yours or anyone's are irrelevant.
> It misrepresents the point of the actual author
It doesn't? The moral of the story is bitcoin hasn't been adopted as much as the bitcoin fanboys will scream.
It doesn't? The moral of the story is bitcoin hasn't been adopted as much as the bitcoin fanboys will scream.
IMO, UX is a minor issue. Why would anyone spend hard money before fiat money? (Gresham's law) Also each spending could trigger a separate taxable event (depending on your jurisdiction) and that would be a serious accounting nightmare if done willy-nilly for casual payments.
Bitcoin is a store of value and a payment rail for significant sums. Currently it is not suitable for casual/small retail payments.
In near/mid-term future I expect new banking services to allow people to stay in bitcoin for "savings accounts" and offering traditional fiat credit in "current account" for daily spending (backed by bitcoin in savings account as a collateral). Settlement and transfers between savings and current account to be less frequent and easily trackable for tax purposes. This would allow a person to completely stay out of fiat while still having access to fiat payment infrastructure - this would cost some interest on borrowed fiat which I expect to go pretty low thanks to collateral (bitcoin) liquidity. See companies like BlockFi which are getting close to this model.
Bitcoin is a store of value and a payment rail for significant sums. Currently it is not suitable for casual/small retail payments.
In near/mid-term future I expect new banking services to allow people to stay in bitcoin for "savings accounts" and offering traditional fiat credit in "current account" for daily spending (backed by bitcoin in savings account as a collateral). Settlement and transfers between savings and current account to be less frequent and easily trackable for tax purposes. This would allow a person to completely stay out of fiat while still having access to fiat payment infrastructure - this would cost some interest on borrowed fiat which I expect to go pretty low thanks to collateral (bitcoin) liquidity. See companies like BlockFi which are getting close to this model.
I think Gresham's Law explains it. I could pay a locksmith in bitcoin, but I would rather keep my bitcoin and pay with USD. Bitcoin is harder to get and can be used for purposes that USD cannot (e.g.: donating to financially censored people and organizations).
The biggest argument against bitcoin, in my mind is this:
Regulators really only get involved in allowing/prohibiting innovations very late in the game. I'm thinking of how Air BNB and Uber were allowed to grow really huge despite being blatantly in violation of a lot of laws in a lot of places (for example restrictions around subletting in contracts between tenants and landlords, regulations around running businesses that are hotels or taxis, etc). Only after they had gotten really big did regulators start to think about whether or not they like what's going on, and then they shut down large parts of the sharing economy.
For bitcoin there are only two scenarios in my mind: Either it dies right now for the problems it is facing right now (network externalities around lack of merchants/customers outside darknet/illegal stuff, volatility etc), or it overcomes those problems, gets really big, and is then killed by regulators.
For the most part the trend in regulation of financial services and financial reporting has been: erosion of banking secrecy (even Switzerland and tax havens in the Carribean are now sharing data with law enforcement), anti-money laundering regulation tightened (FATCA/CRS), increased requirements around creating transparency about ownership of legal entities in cross-border corporate structures (e.g. "persons of significant control" register introduced in the U.K. and many European countries), increased reporting obligations around cash transactions even for small businesses (parts of Europe are now mandating the introduction of electronic cash-registers capable of reporting on a transaction-by-transaction basis even for small businesses like a self-employed taxi driver), etc. etc.
Allowing bitcoin to happen would not fit into that regulatory trend AT ALL.
It's just that bitcoin isn't big enough yet for regulators to even be thinking about it. But it'll happen.
Regulators really only get involved in allowing/prohibiting innovations very late in the game. I'm thinking of how Air BNB and Uber were allowed to grow really huge despite being blatantly in violation of a lot of laws in a lot of places (for example restrictions around subletting in contracts between tenants and landlords, regulations around running businesses that are hotels or taxis, etc). Only after they had gotten really big did regulators start to think about whether or not they like what's going on, and then they shut down large parts of the sharing economy.
For bitcoin there are only two scenarios in my mind: Either it dies right now for the problems it is facing right now (network externalities around lack of merchants/customers outside darknet/illegal stuff, volatility etc), or it overcomes those problems, gets really big, and is then killed by regulators.
For the most part the trend in regulation of financial services and financial reporting has been: erosion of banking secrecy (even Switzerland and tax havens in the Carribean are now sharing data with law enforcement), anti-money laundering regulation tightened (FATCA/CRS), increased requirements around creating transparency about ownership of legal entities in cross-border corporate structures (e.g. "persons of significant control" register introduced in the U.K. and many European countries), increased reporting obligations around cash transactions even for small businesses (parts of Europe are now mandating the introduction of electronic cash-registers capable of reporting on a transaction-by-transaction basis even for small businesses like a self-employed taxi driver), etc. etc.
Allowing bitcoin to happen would not fit into that regulatory trend AT ALL.
It's just that bitcoin isn't big enough yet for regulators to even be thinking about it. But it'll happen.
Bitcoin and cryptocurrencies are an active issue for regulators right now. Statements have come out from several parties that confirm networks like Bitcoin and Ethereum are not securities. The SEC is actively shutting down ICO schemes that are deemed securities. Things are moving slowly because it's a complicated topic, but we are seeing more and more guidance from regulators like the SEC and others.
AirBnB and Uber are doing pretty fine for companies that got killed by regulators.
AirBnB and Uber are doing pretty fine for companies that got killed by regulators.
I did not say AirBnB and Uber "got killed" by regulators. I said that it had, at one point, reached a level that was clearly beyond what was within legal limits, and that afterwards "large parts" of that got shut down. BTW: This is a trend that is still ongoing and we have by no means reached the end of it, especially in Europe where there is a lot more regulation around who gets to be a taxi or a hotel (see Madrid taxi strike raising awareness about Uber's illegal role in the market there)
The SEC ruling that bitcoin is not a security is not really saying anything much as there are many facets to it (should the law treat it as being somehow equivalent to cash? equivalent to transactions carried out by banks?). It's also not saying anything about this pesky little thing that Americans keep forgetting about called "the rest of the world" and even if bitcoin is not in voilation of any laws that exist now, that doesn't mean that new laws won't be brought in to outlaw bitcoin etc. etc.
The SEC ruling that bitcoin is not a security is not really saying anything much as there are many facets to it (should the law treat it as being somehow equivalent to cash? equivalent to transactions carried out by banks?). It's also not saying anything about this pesky little thing that Americans keep forgetting about called "the rest of the world" and even if bitcoin is not in voilation of any laws that exist now, that doesn't mean that new laws won't be brought in to outlaw bitcoin etc. etc.
It's fairly hard to buy Bitcoin or ETH for fiat without uploading your passport and then subsequent transactions are logged on the public blockchain so it's not that bad for the regulators.
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I also run a small clothing business. We have received about bitcoin 6 sales over 5 years. Only 1 was offline though.
Bitcoin is too valuable to spent. Hopefully something like Grin or Dai will make more sense for spending day-to-day.
Bitcoin is too valuable to spent. Hopefully something like Grin or Dai will make more sense for spending day-to-day.
How many sales were purchased through gold bars? Probably only like 1 or 2 per year.
A handful of people have requested that I add Bitcoin as a payment option to my store. But when I offered these people to purchase my app with Bitcoin, none of them actually bought a license.
As much as I like the idea of Bitcoin, it just doesn't seem like people really use it for buying legal things.
As much as I like the idea of Bitcoin, it just doesn't seem like people really use it for buying legal things.
We got a regular trickle of three to ten orders per month for about three years, until the rally to 5-digits broke the system because transaction costs started to surpass our order values.
...which was excellent, because we had forgotten the entire system even existed. We had accrued a few hundred orders in the $80 range, many paid at exchange rates < $100.
...which was excellent, because we had forgotten the entire system even existed. We had accrued a few hundred orders in the $80 range, many paid at exchange rates < $100.
Bitcoin is the most expensive method of payment when you factor the difference between exchangers and merchant gateways(i.e try using bitpay). It is more expensive than gift cards. Not to mention that the volatitlity puts the clients in a pretty bad situation.
Are the drawbacks of Bitcoin (massive global electricity usage, makes email/malware extortion scamming much easier) worth the advantages (the ability to anonymously buy things online at a small number of places) overall?
I'm of the opinion that Bitcoin is a net negative (Bitcoin mining has wiped out all of the gains we've made from the recent renewable energy boom), but perhaps there a useful purpose that I'm unaware of.
I'm of the opinion that Bitcoin is a net negative (Bitcoin mining has wiped out all of the gains we've made from the recent renewable energy boom), but perhaps there a useful purpose that I'm unaware of.
Bitcoin is going to drive research into renewable (cheaper) energies faster than all of the G20 combined. The reason is simple: Mining profitability is measured in Hashes per Joule. Increasing hashes means bringing down the price of mining equipment, which is happening already, and it is reaching the limit of Moore's Law, meaning that the mining equipment will have a much longer lifetime, and the amount of energy it will burn in that lifetime will dwarf the cost of the chip. In effect, the "Hashes" in the above equation will become negligible - mining profit will be measured solely in Joules.
If miners want to remain competitive, their profit will be the difference between the bitcoin reward and the cost of their electricity. The mining reward is unpredictable, but the subsidy is going to decline over time. The clear path to increasing profitability then, is to reduce expenditure on energy!
Miners have an absolute requirement to invest in cheaper energies, because if they don't their competition will, and they will go out of business. Industrial mining is a race to see who can develop the cheapest, most abundant, lowest maintenance energy solutions.
If miners want to remain competitive, their profit will be the difference between the bitcoin reward and the cost of their electricity. The mining reward is unpredictable, but the subsidy is going to decline over time. The clear path to increasing profitability then, is to reduce expenditure on energy!
Miners have an absolute requirement to invest in cheaper energies, because if they don't their competition will, and they will go out of business. Industrial mining is a race to see who can develop the cheapest, most abundant, lowest maintenance energy solutions.
It shows your customers that you are a forward thinking company.
Bit of a loaded assumption that; accepting bitcoin has nothing to do with being forward thinking.
Bitcoin appeals to human greed, that's it. The comments comparing this to Linux and TCP/IP is apples and oranges.
Why would I as a hard working member of my society with a house and kids invest money into a system completely unregulated. I'm all ears.
Bit of a loaded assumption that; accepting bitcoin has nothing to do with being forward thinking.
Bitcoin appeals to human greed, that's it. The comments comparing this to Linux and TCP/IP is apples and oranges.
Why would I as a hard working member of my society with a house and kids invest money into a system completely unregulated. I'm all ears.
>Bitcoin appeals to human greed, that's it
Much of the motivation of the founders and enthusiasts was that governments and existing financial systems are flawed so it may be valuable to have a peer to peer financial system outside of that.
Much of the motivation of the founders and enthusiasts was that governments and existing financial systems are flawed so it may be valuable to have a peer to peer financial system outside of that.
at a base level its regulation is completely transparent and algorithmic, unlike the closed-door regime of central banking.
You invest in bitcoin and lose your key or it's stolen.. how does that work out in the end?
Edit: don't get me wrong, I have crypto currency I've blown many a kw/h on. But you can not as a society rely on a currency with such flaws. Hell maybe insurance startups will popup to handle the issue but I'm not holding my breath.
Edit: don't get me wrong, I have crypto currency I've blown many a kw/h on. But you can not as a society rely on a currency with such flaws. Hell maybe insurance startups will popup to handle the issue but I'm not holding my breath.
because it's not your society. it's that of your elites.
The distribution and concentration of bitcoin and its mining resources makes even decidedly unequal societies look like socialist utopias.
"Why does no one want to pay their local locksmith with Bitcoin?"
The reasons given (few customers have it in a hot wallet ready to use, slow and expensive for small payments) are not the reasons! Even if many people had it, and the expense was lower -- few people would use it.
The real reason? Gresham's law: a monetary principle stating that "bad money drives out good".
Given 2 forms of commodity money in circulation, the more valuable commodity will eventually disappear from circulation.
A fixed-issuance token is designed to Deflate (go up in value), if its uptake and utilization increases. Hence, Bitcoin will "disappear from circulation" as money, vs. almost any alternative form of money!
Who's going to spend something that the believe is likely (barring catastrophic failure) to go up in value?
It is astonishing to me that this topic is even a question that people actually have...
The reasons given (few customers have it in a hot wallet ready to use, slow and expensive for small payments) are not the reasons! Even if many people had it, and the expense was lower -- few people would use it.
The real reason? Gresham's law: a monetary principle stating that "bad money drives out good".
Given 2 forms of commodity money in circulation, the more valuable commodity will eventually disappear from circulation.
A fixed-issuance token is designed to Deflate (go up in value), if its uptake and utilization increases. Hence, Bitcoin will "disappear from circulation" as money, vs. almost any alternative form of money!
Who's going to spend something that the believe is likely (barring catastrophic failure) to go up in value?
It is astonishing to me that this topic is even a question that people actually have...
You're mixing up two things. Gresham's law applies when the conversation rate is fixed, not when it is set by the market. It's not the same as a currency being deflationary.
Hayek wrote about the confusion: https://fee.org/resources/denationalization-of-money/#VI.%20...
Hayek wrote about the confusion: https://fee.org/resources/denationalization-of-money/#VI.%20...
Its original application was to coinage with a fixed face value and a fluctuating inherent (market) value, of course.
The "spirit" of Gresham's law applies to any money that is (or is likely) to become more valuable in the future than it currently it. The same mental process applies in the holder of the money: "why would I spend this potentially more valuable money, when I have this other less valuable money to spend?"
edit: the article mentions the German Weimar inflation as a counterexample; in fact, it is a prime example of this concept: if a vendor accepts either the Weimar Papiermark or the US Dollar as payment, who in their right mind would pay that vendor with US Dollars? That vendor would probably never see a single US Dollar in payment! Bad money would have totally chased out good, from their perspective.
The real issue is not fixed exchange; in a free market, where vendors accept multiple forms of payment: unless forced, payors will always pay with "bad" money, and will keep the "good" money for themselves.
The "spirit" of Gresham's law applies to any money that is (or is likely) to become more valuable in the future than it currently it. The same mental process applies in the holder of the money: "why would I spend this potentially more valuable money, when I have this other less valuable money to spend?"
edit: the article mentions the German Weimar inflation as a counterexample; in fact, it is a prime example of this concept: if a vendor accepts either the Weimar Papiermark or the US Dollar as payment, who in their right mind would pay that vendor with US Dollars? That vendor would probably never see a single US Dollar in payment! Bad money would have totally chased out good, from their perspective.
The real issue is not fixed exchange; in a free market, where vendors accept multiple forms of payment: unless forced, payors will always pay with "bad" money, and will keep the "good" money for themselves.
If the vendor is free to set the conversation rate, and it is generally acknowledged that the value of the Papiermark is falling, they will require more of it for the equivalent of a dollar. The aggregate effect of everyone doing this may inflate the Papiermark out of existence, but it has nothing to do with Gresham's law. In fact, it's the opposite effect, since the dollar would remain in circulation.
If the vendor had to accept the Papiermark at a 1:1 rate, then nobody would pay with the dollar and then it would drive out the dollar. That would be Gresham's law.
If the vendor had to accept the Papiermark at a 1:1 rate, then nobody would pay with the dollar and then it would drive out the dollar. That would be Gresham's law.
The only time I ever paid with bitcoin was for likely-illegal pharmaceuticals. And that’s only because that’s all the online pharmacy accepted.
I can’t imagine it’s much useful as a payment system for much other than that.
I can’t imagine it’s much useful as a payment system for much other than that.
Because Bitcoin is optimized for speculative investment, not as an actual currency.
A shift in consumer habits require orders of magnitude in improvement over previous solutions to achieve mass adoption and become the new true "normal".
The reality is bitcoin and crypto are not much of an improvement (if any) for the avg consumer compared to cash/debit/credit card.
The reality is bitcoin and crypto are not much of an improvement (if any) for the avg consumer compared to cash/debit/credit card.
Back in early 2016 I told myself that if BTC dropped below $200 I would buy one. The lowest I saw was $203. When it went meteor a few years later, I felt Fold remorse. Perhaps it is sour grapes, but every time I walk by the BTC machine at my corner store, I relish in seeing how low it has gone, though still well higher than $200. :/
More on topic, the only action the corner store BTC machine gets, apart from drug addicts, is scams. That I can attest to, twice some tech ignorant soul has walked in, dumped their savings, then asked the cashier for a receipt.
Unless crypto currency can be inoculated from speculation (impossible IMO) it will be some time, if ever, before it becomes a viable mechanism for general economic exchange.
More on topic, the only action the corner store BTC machine gets, apart from drug addicts, is scams. That I can attest to, twice some tech ignorant soul has walked in, dumped their savings, then asked the cashier for a receipt.
Unless crypto currency can be inoculated from speculation (impossible IMO) it will be some time, if ever, before it becomes a viable mechanism for general economic exchange.
What’s a BTC machine? What happened to the money the poor souls dumped into it?
It's a vending machine for exchanging BTC and local currency. Depending on the type it may be linked to an account at an exchange or else rely on scanning QR codes for the receiving address (either the users or the machine's). Some only sell BTC, while others support both buying and selling.
I imagine that this was one of the models that was linked to an exchange account, since the QR-based versions make it fairly obvious where the funds are going and won't work unless you first set up a receiving account and present the QR code for the machine to scan.
I imagine that this was one of the models that was linked to an exchange account, since the QR-based versions make it fairly obvious where the funds are going and won't work unless you first set up a receiving account and present the QR code for the machine to scan.
I see.So the people didn’t just lose their money then, or get scammed out of a portion of it.
Your guess is as good as mine. It looks like a MTO kiosk. It feels like an ATM. According to [redacted] their money went straight ether.
Haha I See. “Straight ether” meaning it went straight to them just losing it? Interesting. Also feel bad for the people, of course.
Of possible interest, Moon, a company in our our accelerator cohort, lets people pay with crypto on any website that accepts credit cards: https://paywithmoon.com/
And why would you choose a slower, more expensive, more cumbersome and less secure method of payment when you can just use a credit card?
Why does it require a Coinbase account?
Most likely because intra-coinbase payments are instant, as they don't occur on the blockchain, but in the coinbase local database only
Are you saying that the most convenient and cheap way to handle a trustless distributed blockchain currency is .. within a single database? /s
Iiuc the requirement holds only for the merchant and is similar to requirements of many credit card payment processors about holding a bank account with their chosen bank. The reason is probably the same (transaction costs).
Oh! So it doesn't let people pay with Bitcoin on any website that accepts credit cards.
It lets any website that accepts credit cards also accept payment in Bitcoin.
There is a big difference.
It lets any website that accepts credit cards also accept payment in Bitcoin.
There is a big difference.
until cryptocurrencies are able to be as accessible, easy to use, and fast as everyday debit or credit cards, i fail to see any significant future for their usage beyond people well versed in tech
They never will be. I think people misunderstand cryptocurrencies because of the mania that surrounds them. Bitcoin, for example, is a protocol, and should be judged as such. The most important thing for the protocol is trust, reliability, and scalability. Not UX and convenience. That could/should come from the layers/products that get built on top of the protocol.
Satoshi Nakamoto did say this:
> The existing Visa credit card network processes about 15 million Internet purchases per day worldwide. Bitcoin can already scale much larger than that with existing hardware for a fraction of the cost.
He clearly expected Bitcoin to cheaper and faster than credit cards and I've often wondered how he could have been so wrong about that.
> The existing Visa credit card network processes about 15 million Internet purchases per day worldwide. Bitcoin can already scale much larger than that with existing hardware for a fraction of the cost.
He clearly expected Bitcoin to cheaper and faster than credit cards and I've often wondered how he could have been so wrong about that.
That's likely because he expected the block size to increase in addition to second layer scaling solutions.
And Bruce Schneier says the trust thing is a bust - it moves trust, rather than eliminating it. Usually to parties that I have far fewer reasons to trust.
The only advantage and attraction of bitcoin to date to the lay person has been capital gains, not so much lately but at least its semi-stabilised to most holders relief.
I suspect that was the secret attraction of most businesses who set up to accept it.
However in real life it is too awkward for the average joe or joan and if you want to "go dark" cash or gold much easier to use and understand.
Cryptocurrencies day will come but not until it is as easy to use as a credit card or cash
I suspect that was the secret attraction of most businesses who set up to accept it.
However in real life it is too awkward for the average joe or joan and if you want to "go dark" cash or gold much easier to use and understand.
Cryptocurrencies day will come but not until it is as easy to use as a credit card or cash
ITT: Bitcoin as a store of value not a medium of exchange.
They should look into decentralized stablecoins like DAI (1 DAI = 1$). Particularly xDAI and BurnerWallet https://medium.com/gitcoin/burner-wallet-at-ethdenver-was-fa... are interesting.
They should look into decentralized stablecoins like DAI (1 DAI = 1$). Particularly xDAI and BurnerWallet https://medium.com/gitcoin/burner-wallet-at-ethdenver-was-fa... are interesting.
I've been given some xDAI at an event, and spent hours trying to get them out of the burner wallet, to no avail. This left a very bad impression to many people there.
They're still stuck there.
They're still stuck there.
xDAI is no more than a few months old, and DAI itself is a little over a year old. Give it some time... Come back in a decade or two if you're looking for super smooth user experiences.
There is still a pretty good chance that with Lightning it will change, because of minimal transaction costs, speed and scalability.
An on-chain transaction is required to create a lightning channel which holds funds.
For every person in the world to open just a single channel in their lifetime, it would take just about 34 years (with 7 transaction per second, 7.5 billion people, and a block every 10 minutes).
This doesn't include the transaction necessary to close the channel to receive the funds back in the Bitcoin wallet.
For every person in the world to open just a single channel in their lifetime, it would take just about 34 years (with 7 transaction per second, 7.5 billion people, and a block every 10 minutes).
This doesn't include the transaction necessary to close the channel to receive the funds back in the Bitcoin wallet.
Lightning does assuage those problems, but it exacerbates the bigger and more relevant problem, which is user experience.
It is still ridiculously hard for a layperson to acquire, secure, and transact with Bitcoin.
It is still ridiculously hard for a layperson to acquire, secure, and transact with Bitcoin.
I've been hearing about Lightning for a couple years now, is this the new Duke Nukem 3d/Perl 6 or what?
No, Lightning has been released. It works. There are multiple implementations. It isn't perfect. Version 1.1 should fix a lot of the shortcomings.
Sounds a lot like if 'early access' was a thing, and duke nukem forever released a half baked first level that was difficult to use, and didn't really amount to anything beyond being able to point to a 'release'
Except that this is a protocol, not a product. And there are multiple teams building implementations.
HTTP 1.0 didn't have some pretty fundamental features like keep-alive.
But regardless of whether or not LN even ever works well, there will be something that does. Maybe not bitcoin, but a lot of smart people are trying a lot of different things. Just cause pong sucked doesn't mean there can't be great games.
HTTP/1.0 (and 1.1) both actually worked in production.
> Just cause pong sucked
Pong was and still is great.
> Just cause pong sucked
Pong was and still is great.
It has routing problems that are unsolvable.
Unsolvable like internet/BGP routing? I guess internet doesn't work either.
Tech evolves, most teams working on LN are working on getting the basic cases to a rock-solid state before doing more R&D on different routing strategies although there are already proposed alternatives on the mailing list.
Layered-strategies are the way to go.
Tech evolves, most teams working on LN are working on getting the basic cases to a rock-solid state before doing more R&D on different routing strategies although there are already proposed alternatives on the mailing list.
Layered-strategies are the way to go.
No, unsolvable like routing payments from A to B requires finding routes from A to B that are well enough funded to allow the payment to go through, but with no knowledge of the funding states of the channels (as this would be a privacy leak)
The Byzantine Generals problem was "unsolvable" until Satoshi Nakamoto sidestepped it to make Bitcoin work. You don't need perfect solutions to have practical applications.
It's such a stupid argument against LN. I can make the same argument that you connecting to Hacker News is unsolveable (there is no mathematical proof that you will be able to connect to HN, because various gateways could drop offline). What does this matter in practice? You can still get here most of the time.
In LN, if the first route from A to B does not have the capacity to make the payment, an alternative route is tried. Many routes can be attempted, because they're usually sub-second negotiations between peers. If it happens that there is no route between A and B with sufficient htlc capacity that can be found in a timely manner, then you might be out of luck. Can always fall-back to an on-chain transaction. A LN invoice already supports a fallback bitcoin address. As the network grows this will become less and less likely because there will be an enormous number of routes to attempt for any payment. Chances of not making a payment will usually indicate your own or the payment destination nodes are the ones lacking capacity to make the payment.
It's such a stupid argument against LN. I can make the same argument that you connecting to Hacker News is unsolveable (there is no mathematical proof that you will be able to connect to HN, because various gateways could drop offline). What does this matter in practice? You can still get here most of the time.
In LN, if the first route from A to B does not have the capacity to make the payment, an alternative route is tried. Many routes can be attempted, because they're usually sub-second negotiations between peers. If it happens that there is no route between A and B with sufficient htlc capacity that can be found in a timely manner, then you might be out of luck. Can always fall-back to an on-chain transaction. A LN invoice already supports a fallback bitcoin address. As the network grows this will become less and less likely because there will be an enormous number of routes to attempt for any payment. Chances of not making a payment will usually indicate your own or the payment destination nodes are the ones lacking capacity to make the payment.
Proof that I will be able to connect to HN is a lot different and less important than payments. It's also far from the only problem LN has.
If the network grows much, people creating and closing channels (two on-chain transactions) will start to gum up the system. If they don't close channels then they need to keep a node online or face various forms of attack. If they delegate that task to someone else, we've got yet another party to trust in a system that's already a failure when it comes to trustlessness. Even before all this, to make it work properly, vast quantities of BTC will need to be committed to the effort. The LN seems to me to be a joke.
And beyond that, well, what's this story about? Nobody really transacting in bitcoin anyway.
If the network grows much, people creating and closing channels (two on-chain transactions) will start to gum up the system. If they don't close channels then they need to keep a node online or face various forms of attack. If they delegate that task to someone else, we've got yet another party to trust in a system that's already a failure when it comes to trustlessness. Even before all this, to make it work properly, vast quantities of BTC will need to be committed to the effort. The LN seems to me to be a joke.
And beyond that, well, what's this story about? Nobody really transacting in bitcoin anyway.
Curious to hear what those are of you have a moment to expand on it
I personally never got into, because it's not private. No regular person can verify their transactions without joining a public vehicle that requires a credit card. Even bitcoin atms require a photograph of your face. Mining is a huge loss of value.
Bitcoin itself was simply never a good idea for most people.
Bitcoin itself was simply never a good idea for most people.
You can verify your transactions on many websites like https://blockchain.info/ ...
You can buy semi-anonymously in-person using something like localbitcoins.com
You can buy semi-anonymously in-person using something like localbitcoins.com
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Solar panels and electric cars are not as prevalent as the media would have us believe either.
Did you comment to the right article?
Bitcoin on-chain transactions are almost on its historical peak again:
https://www.blockchain.com/charts/n-transactions?timespan=al...
This forum has been denying bitcoin since the first time someone posted about it:
first time: https://news.ycombinator.com/item?id=463793
second time: https://news.ycombinator.com/item?id=599852
https://www.blockchain.com/charts/n-transactions?timespan=al...
This forum has been denying bitcoin since the first time someone posted about it:
first time: https://news.ycombinator.com/item?id=463793
second time: https://news.ycombinator.com/item?id=599852
Less than 10 transactions per second while spending more electricity than several medium-sized countries.
Yup. Technology of the future that we are fools to dismiss.
Yup. Technology of the future that we are fools to dismiss.
The technology still evolving. 10 transactions is not and will not be the limit. The Lightning Network already proved that a much higher volume of bitcoin transactions can be made without slowing down the bitcoin network.
I like to think the energy consumption of the bitcoin network is an "idle energy":
10 transations/s = mid-size country
100 transations/s = mid-size country
10.000 transations/s = mid-size country
An increase in transations do not directly increase energy consumption.
I like to think the energy consumption of the bitcoin network is an "idle energy":
10 transations/s = mid-size country
100 transations/s = mid-size country
10.000 transations/s = mid-size country
An increase in transations do not directly increase energy consumption.
> An increase in transations do not directly increase energy consumption.
So far this has always been the case
> The Lightning Network already proved that a much higher volume of bitcoin transactions
It hasn’t proven anything yet, and as already pointed somewhere in this discussion there’s already a new version trying to fix shortcomings and limitations.
So far this has always been the case
> The Lightning Network already proved that a much higher volume of bitcoin transactions
It hasn’t proven anything yet, and as already pointed somewhere in this discussion there’s already a new version trying to fix shortcomings and limitations.
Is there hard evidence that shows the energy consumption of bitcoin? How is that calculated? I do believe it's "a lot" when I see those giant farms churning. And how do we compare it to fiat where the security is via vaults and sharks with lasers and other types of security?
> And how do we compare it to fiat where the security is via vaults and sharks with lasers and other types of security?
You can easily compare. Fiat provides orders of orders of magnitude more value added services on top of just money. Bitcoin is consuming all that energy while struggling to send money between to people at a (often an order of magnitude) higher cost.
Oh. There’s not just bitcoin, of course. There’s the joke called ethereum which was crippled by a game which in real world can be run on a mid-2000-era netbook.
Yup. Incomparable.
—-
Edit: On Singles Day Alipay handled over a billion (yes, a billion) transactions in a day, with a peak of 120 000 transactions per second.
Bitcoin would deplete the Sun attempting the same thing.
You can easily compare. Fiat provides orders of orders of magnitude more value added services on top of just money. Bitcoin is consuming all that energy while struggling to send money between to people at a (often an order of magnitude) higher cost.
Oh. There’s not just bitcoin, of course. There’s the joke called ethereum which was crippled by a game which in real world can be run on a mid-2000-era netbook.
Yup. Incomparable.
—-
Edit: On Singles Day Alipay handled over a billion (yes, a billion) transactions in a day, with a peak of 120 000 transactions per second.
Bitcoin would deplete the Sun attempting the same thing.
The amount of energy used for Bitcoin mining has very little to do with the rate of transactions. The limiting factor is mining profitability, which depends on capital and energy costs on on hand and current and expected Bitcoin prices, the block reward (which decreases over time), and transaction fees on the other. Only the transaction fees increase with more transactions, and for now they're insignificant compared to the block reward.
A billion Bitcoin transactions would be about 250-500 GiB, depending on the transaction size. If we were willing to accept block sizes of 1.5 to 3.5 GiB then we could handle that many transactions per day using no more energy than the current system. Of course, you'd need a 50+ Mbit dedicated downlink and some fairly capable hardware just to keep up with all the traffic, which is why we don't permit such large blocks.
A billion Bitcoin transactions would be about 250-500 GiB, depending on the transaction size. If we were willing to accept block sizes of 1.5 to 3.5 GiB then we could handle that many transactions per day using no more energy than the current system. Of course, you'd need a 50+ Mbit dedicated downlink and some fairly capable hardware just to keep up with all the traffic, which is why we don't permit such large blocks.
I'm not sure on-chain transaction rate approaching new highs is cause for celebration. Last time the rate of new transactions exceeded bitcoin's capacity, confirmation times became erratic and fees unpredictable. Why do you think this won't happen again?
The bitcoin software is not the same as before, updates have happened in the meantime. Now, 40% of all transactions happening are SegWit transactions, a lighter format which enables the network to handle a higher volume of transactions simultaneously. SegWit transactions are also cheaper in terms of fees.
So, the number of transactions can exceed the previous high without colapsing the confirmation time or fees.
So, the number of transactions can exceed the previous high without colapsing the confirmation time or fees.
It's interesting that that is the case while interest in Bitcoin as evidenced by twitter activity seems to have dropped back to levels seen in 2014 and 2016 https://bitinfocharts.com/comparison/bitcoin-tweets.html
I'm not quite sure why. More algo trading perhaps?
I'm not quite sure why. More algo trading perhaps?
Bitcoin needs to die in a fire.
Well bitcoin is better for store of value, just use a CC for spending - more protection.
Has your local currency been so awful at storing value that it lost more than 75% of its value in a little over a year?
In Venezuela you’re probably better offer with Bitcoin. If you live in a developed free market economy then probably not.
In Venezuela you’re probably better offer with Bitcoin. If you live in a developed free market economy then probably not.
Bitcoin did not lose "more than 75% of its value in a little over a year". You're conveniently picking the peak price during a short-lived bubble as the baseline for your comparison, as if $20k were the normal price. No one with any sense purchased significant amounts of Bitcoin at that price. (Obviously quite a few people did buy at that price—but that's not the point. Buying after a sharp rise in the price is a losing strategy for almost any investment.) I could just as easily draw your attention to the fact that even now Bitcoin has nearly tripled in value (+190%) over the last two years.
Right before the run up to $20k Bitcoin was around $6k; now it's at $3700. That's only a loss of 40%, not 75%, if you bought at the pre-bubble price. And it reached $3700 for the first time only about a year and a half ago, in July of 2017. It's hardly the only investment to show no net gain (or loss) over that time period.
Right before the run up to $20k Bitcoin was around $6k; now it's at $3700. That's only a loss of 40%, not 75%, if you bought at the pre-bubble price. And it reached $3700 for the first time only about a year and a half ago, in July of 2017. It's hardly the only investment to show no net gain (or loss) over that time period.
That's the latest line since transaction costs of bitcoin have become out of this world. But it's more volatile than any non tin-pot dictatorship currency. It's vulnerable to hacking, hardware failure, or fraud by exchanges. I swear every 2 weeks a hear about another $100 million vanishing.
How is this not just an utterly useless technology for anything except illegal transactions?
How is this not just an utterly useless technology for anything except illegal transactions?
> That's the latest line since transaction costs of bitcoin have become out of this world.
You should update your FUD. The average cost to have your transaction accepted in the next block is currently about 31 cents. If 1-2 hours is acceptable (6 blocks) then you can reduce that to less than a quarter. There was a period when the transaction fees were much higher (because the network was undergoing DOS attacks) but that passed some time ago.
Bitcoin is vulnerable to hacking, hardware failure, or fraud by exchanges in much the same way the USD or EUR or any other currency is vulnerable to theft, physical destruction, or fraud by exchanges (or banks)—except that Bitcoin offers ways to protect yourself against theft or hardware failure which are not available for physical currencies, and there is no particular reason to maintain a balance at an exchange. People have no problem accepting that it's unsafe to carry around large amounts of physical currency but won't take simple measures like using a hardware wallet with a PIN to store their private keys. Don't blame the Bitcoin protocol for people failing to take obvious and recommended security precautions.
I'll grant that it's more volatile than most other currencies, but that's hardly unexpected for something new and experimental. It's less volatile now than it used to be, though, and that trend is likely to continue.
You should update your FUD. The average cost to have your transaction accepted in the next block is currently about 31 cents. If 1-2 hours is acceptable (6 blocks) then you can reduce that to less than a quarter. There was a period when the transaction fees were much higher (because the network was undergoing DOS attacks) but that passed some time ago.
Bitcoin is vulnerable to hacking, hardware failure, or fraud by exchanges in much the same way the USD or EUR or any other currency is vulnerable to theft, physical destruction, or fraud by exchanges (or banks)—except that Bitcoin offers ways to protect yourself against theft or hardware failure which are not available for physical currencies, and there is no particular reason to maintain a balance at an exchange. People have no problem accepting that it's unsafe to carry around large amounts of physical currency but won't take simple measures like using a hardware wallet with a PIN to store their private keys. Don't blame the Bitcoin protocol for people failing to take obvious and recommended security precautions.
I'll grant that it's more volatile than most other currencies, but that's hardly unexpected for something new and experimental. It's less volatile now than it used to be, though, and that trend is likely to continue.
Why would you 'store value' in something that's so new and volatile? If you want something impractical that serves to store value, buy Gold.
It's a terrible store of value. It requires a constant massive electricity expenditure to keep it up. Gold, property, etc. do not and are much better if you just want to park money in something other than a financial instrument.
The original Bitcoin paper is all about payments:
https://bitcoin.org/bitcoin.pdf
If Bitcoin isn't any good for that, it's kind of a failure.
https://bitcoin.org/bitcoin.pdf
If Bitcoin isn't any good for that, it's kind of a failure.
Bitcoin is terrible for storing value.
It's been a great store of value over the past 6 years. It has outperformed every major index and currency.
If you had invested just $10K in Bitcoin in May 2013, by July 2013 you would have lost almost half of your money...
But if you were smart and had held on to it, today you would have over $350K!
As Warren Buffet would say, you just have to buy when everyone else is selling and sell when everyone else is buying. You have to keep your eye on intrinsic value... and the other eye on the Lambo. Easy peasy.
As Warren Buffet would say, you just have to buy when everyone else is selling and sell when everyone else is buying. You have to keep your eye on intrinsic value... and the other eye on the Lambo. Easy peasy.
> It's been a great store of value over the past 6 years.
I don't think you understand what "store of value" means. Store of value means little to no volatility. Meanwhile, Bitcoin is one of the most volatile assets in existence. And a real store of value is a store of value permanently not just over a certain period of time.
I don't think you understand what "store of value" means. Store of value means little to no volatility. Meanwhile, Bitcoin is one of the most volatile assets in existence. And a real store of value is a store of value permanently not just over a certain period of time.
What Warren Buffett actually said "In terms of cryptocurrencies, generally, I can say with almost certainty that they will come to a bad ending."
Stores of value aren't investments.
> You have to keep your eye on intrinsic value
$0
$0
The only value Bitcoin has is group consensus. If nobody has a need to use it, the values of otherwise-meaningless numbers will trend to zero.
Literally true for every currency at some level. I suppose you could use a greenback as very poor toilet paper.
The part you're leaving out is that most currencies are backed by governments with significant economies and that backing creates a substantial market because you use those currencies to pay your taxes and government workers and contracts are paid using that currency.
In contrast, a pure fiat currency like Bitcoin has no inherent value and no built-in demand. If something else becomes popular, there's zero anchor for anyone who doesn't have a substantial holding and the pitch of “you should use this so I get rich” is not generally compelling.
In contrast, a pure fiat currency like Bitcoin has no inherent value and no built-in demand. If something else becomes popular, there's zero anchor for anyone who doesn't have a substantial holding and the pitch of “you should use this so I get rich” is not generally compelling.
Why I said "at some level": what are governments backed by?
'Need' is a relative term. If you ask me what I need, I'll say I need a house to live in, air to breathe, water to drink and food to eat.
If you ask Mark Zuckerberg what he needs, he'll say "All that can be counted".
Mark Zuckerberg has much more money than you or me. So when it comes to valuing things on the open market, his opinion of what 'Need' means matters a lot more.
Mark Zuckerberg has much more money than you or me. So when it comes to valuing things on the open market, his opinion of what 'Need' means matters a lot more.
That doesn't really relate to anything I wrote. My question was that if Bitcoin collapsed tomorrow, who'd notice other than the get-rich-quick crowd? Statistically nobody uses it for daily transactions and almost everyone has other options which are some combination of cheaper, faster, safer, and easier to use. There just isn't a long-term anchor pushing people to use that particular system, certainly not at the level needed to sustain the high infrastructure costs.
A lot of rich people use Bitcoin for self-realisation (e.g. to get that special "I own a lot of Bitcoin" feeling). As an average person, you might think it's a ridiculous use case but it's actually very important to them, therefore it's very important full stop.
It's the same reason why fine Art is expensive. People want to experience a very specific "I own a Picasso" feeling. Normal people don't understand this, but what normal people think doesn't matter in the current economy.
It's the same reason why fine Art is expensive. People want to experience a very specific "I own a Picasso" feeling. Normal people don't understand this, but what normal people think doesn't matter in the current economy.
Okay, so in addition to that claim being unsupported and rather unlikely you have a major problem with this theory: art only requires one person to like it but a currency requires an active network and someone who just likes to look at SHA hashes isn't going to generate much transaction volume.
Well there are a lot of technology-oriented rich people who want to be able to say to themselves and others that x% of their wealth is in Bitcoin (even if it's just a hedge bet) and this shared desire to own Bitcoin is reliable enough that it can be quantified; and that shared desire determines the market cap of Bitcoin.
It's not different from any other currency. The main difference is that a government cannot use the tax system to force people to use Bitcoin - But then again, the government cannot force rich people to pay tax at all.
It's not different from any other currency. The main difference is that a government cannot use the tax system to force people to use Bitcoin - But then again, the government cannot force rich people to pay tax at all.
obvious sarcasm, people.
It’s the lack of user focus. Setting up a bitcoin account, understanding the security implications, hardware wallet, secret keys, the whole enchilada is too big for an average consumer to digest.
Somewhere in Jobs’ biography by Walter Isaacson, there is a snippet about how products often fail when they’re designed by geeks, engineers and technology people - they make products to sell to customers that are like themselves. I’m an engineer myself and I also think the contrary is also true - products and services developed by “MBA” kinds often fail because the people in charge of the company roadmap have no fucking clue about the technical details and trade-offs of the product.
Bitcoin transaction process is designed for the most part for the nerds, not for the average Joe. I know there exists Coinbase and other “easy” setups for Bitcoin. But I’m talking about what happens when an average joe Googles “How to setup a bitcoin account”. Instant “nope” - I don’t have time for this shit and my personal money is at stake if I mess this up.