They don't want a federated pseudo-anonymous crypto-currency, just anonymous enough for theft without consequences, which requires them to hoard tokens on their home computer or a trusted server with extraordinary security measures as if they were gold coins and then pay a variable fee and wait a variable length of time (10 minutes!) to actually verify a transaction. I suppose gold bugs might be happy with it as a replacement for gold or stacks of cash under the mattress but as a currency it has glaring shortcomings. I don't think many people hate bitcoin, they just find the hype for it and its blockchain overblown and myopic. It's an interesting experiment, but it's unlikely to replace the currencies we have, I suspect that will happen at the transaction layer, not the currency layer (the underlying currency to a transaction is in many ways uninteresting).

The financial industry may well be ripe for disruption (indeed some startups in the UK have started), but the founding tenets of bitcoin are such that it is not a suitable replacement.

For the reasons given above I find that highly unlikely. Proof of work and distributed consensus are at odds with the requirements of a global real-time processing network.

Once again, whatever people's views on bitcoin at least realize that mining hashes don't dictate how many transactions can be processed by a miner. They mine a block, then they include as many transactions as they think they can get away with and keep the latency low enough to propagate. Right now they are capped by a block size limit which is the real next hurdle. Some people think there should be no block size limit - latency already becomes a limit in itself.

To hammer it home - someone using bitcoin does not need to use any more electricity than a computer and internet connection. The miners use the electricity and the amount of transactions they process is not directly linked in any way.

I agree bitcoin does have its flaws, economically bitcoin behaves like a commodity, which might hinder consumer adoption. There are ways to get around that, you could potentially issue a anonymous currency of sorts backed by bitcoin, with a fixed exchange change rate. So, the prices could remain relatively stable. May be that could drive consumer adoption.

TBH, I don't know what bitcoin is going to look like in the next 10 years. It's like the internet all over again. Just like the internet, bitcoin value doesn't necessarily come from the underlying utility as a transaction platform or in case of the internet TCP/IP, but from its distributed , permissionless and decentralized nature of governance. We know for a fact, that's what drives innovation.

I was under the impression that more than 50% of the mining power is controlled by a very small set of Chinese miners. Could they not wreak major havoc by deciding to tweak the protocol themselves or not adopt certain features?

Similarly, what happens if the few bitcoin core developers decided to do something nefarious with the client. Surely they would be caught right away, but then how would the community decide on what software/protocol to use?

There is no doubt though that cryptocurrencies are potentially fragile. I do think though that pandora's box has been opened. Maybe bitcoin will stand the test of time like jpeg, C, C++, http, TCP/UDP/IP, zip, bittorrent, fortran, x86, SMTP, unix, RTSP, vi, javascript, etc that have been good enough and persisted with a huge network effect. Or it could end up being a jumping off point for something that smooths out the rough edges needed for mass adoption.

No it is not. Regulation in Financial Services exists for a very good reason. To protect you the customer against the various kinds of risks.

When you run a company and borrow a significant amount of money from a lender you do not want that this lender changes terms half-way through because they are in trouble re-financing their portfolio. The same applies to due-diligence in credit underwriting. Social scoring was hailed as the future of credit origination but it does not work at all (yet). No social characteristic is correlating at to defaults.

What if you deposit your life savings or life insurance with a fintech startup and they do not survive (for whatever reason). Then what?

There are a lot of businesses out there relying on a stable financial systems. Fintech companies will work with established players to bring faster technical implementations and MVP's for banks to implement. After they have done their technical due diligence. Beyond that I am more than doubtful.

I have news for you all of these exotic and toxic investment vehicles that these investment banks cook up, largely because a previous loophole was close are essentially high flying risky startups inside the context of the bank.

Deposits and retirements savings did not survive in the last financial meltdown and this had nothing to do with fintech, these were white-glove investment houses. So yeah people do want protection, protection against this established racket. The established racket is the largest offender.

Yes it did. Nobody lost money in their savings or current accounts in commercial banks (Except Iceland)

What happened in the stock market was different but the core of the FSA/FCA is about protecting customer's money which they did. (See how they were able to ensure none of Northern Rock's customers lost money in the UK).

You mean the Glass-Steagal regulation that was repealed prior to the crisis?

Glass-Stegal would however further my point, its the regulatory capture in the financial industry that allowed that to happen, and by that I mean appointing an investment banking executive from Wall Street to head the Federal Reserve.

In my opinion, bitcoin will be overtaken by another coin, most likely ethereum. This is because while bitcoin has many issues, the underlying tech (blockchain) is sound.

The reason ethereum will succeed is because it is not just a currency. It's not even mostly a currency. It is a decentralized network that gives users the ability to engage in trustless programmatic contracts.

Decentralized, meaning that no one person has the ability to tamper with important documents or files.

Programmatic in that contracts are actual programs that get run at a predetermined time.

And trustless in that some third party mediator isn't required to enforce terms. This point is the most important because it means that organizational structures that simply would not be feasible otherwise are possible.

Organizations as we know them today are necessarily built like pyramids (governments, large corporations) or they are kept very small for mobility (startups). With trustless organizations, this won't (always) be true anymore.

And with the momentum of these features, I could see Ether (Ethereum's currency) dethroning Bitcoin. It's already got a fifth of the market cap that BTC has.

Can you wrap your head around getting rid of the system completely? 'Money' is an artificial numerical system of tokenised management that fundamentally limits our progression as a race. We can't repair roads, fund disease treatment, build structures to house our sick or educate our children, distribute food to the needy because the 'numbers' don't let us. The concept of finance is thrust upon us from birth and we're all but incapable of seeing what a stupid system it really is.

Example. I work x hours and get paid y tokens. y tokens thus equals x hours of my work. I now go and buy a cutlery set. That was produced by n people over m hours, and is sold with p profit. My y tokens is equal to n * m + p, which is equal to x * y.

Money exists to make the n * m + p = x * y things workable. It's an abstracted barter system, where rather than having to work in Sony's programming department to earn a new TV, I can write code for other people, get paid something, and then pay it to Sony, who can equate it to the cost of a TV.

The doing all the things you talked about in the second paragraph is a management and distribution of labour issue, which is down to society and governance. There's many nations that manage those things fine, and have financial systems. The issue is with a society that isn't able to provide those things, because the values held and the outcomes desired are fundamentally opposed.

If you want to fix something, get involved in local politics and make a difference.

The monetary system, is an attempt to use money, and market price setting to solve the problem you describe - and that problem is essentially NP complete, so what markets and market price setting, in conjunction with an enormous number of local decisions made in response to those price signals are doing is trying to find a reasonably efficient approximate solution.

It's an untested assumption that the monetary system can actually do that without any regulation. There are good reasons to think that it can't, especially over long periods.

Completely agree about the involvement in local politics - it's easy to be an armchair economist, and ignore the reality that at the end of the day the single most important government function is that the garbage is collected regularly.

That's a massively oversimplified perspective on the completely broken political systems most of us in western psuedo-democratic nations live in, whereby resolving a lot of the systemic issues requires a lot more than a single individual getting involved in local politics.

Better to be involved and work towards the change you want to see, than to throw your hands up and despair over the "broken political system of our western psuedo-democratic nations".

That's the point of democracies - they only work when people effectively engage. Most people don't, but that's not a failure of democracy, it's a failure of society. History is rife with examples of single individuals and small groups who made massive change over time. The American civil rights movement, the Indian independence movement, the anti-Apartheid movement in South Afica...

You can work to make change and then bemoan anything you want, but if you choose not to engage, your words lack authenticity and merit.

Not quite:

"Money's a matter of functions four,

A Medium, a Measure, a Standard, a Store"

How does that translate to the billions that hedge fund managers "earn".

Overthrowing the system isn't on my bucket list, but it makes for an interesting debate - eg: https://medium.com/@RickWebb/the-economics-of-star-trek-29ba...

Additionally, if you do have over-abundant capacity to pre-manufacture well above that required "spike", then you need to a) use logistics to get it there and b) foresight of knowing where you need to get it to, and how much of it.

Otherwise, you'd have to have the ability to produce any arbitrary amount of it at the desired location when the need requires. By it, I generally mean all products.

The implosion currently going on in fintech indicates otherwise: Lending (Square, Lending Club, OnDeck) and Investment (Robo Advisors) both are unraveling.

A currency backed by no one is unlikely to earn the trust of many.

You could argue "the infrastructure of a bunch of ISP companies", but then you can argue that about Bitcoin as well. The infrastructure of a bunch of (eventually) more trusted companies built around the currency (like Coinbase, etc), and the computing power of the miners propogating the blockchain, plus the entire ledger being public and independently verifiable, could earn the trust of many (it might not, but it could).

There are obstacles getting in the way of that, though, including it being such a new and different concept that most people can't wrap their heads around it.

A currency policy that is constantly being manipulated and a money supply that is constantly tinkered with(quantitative easing?) is unlikely to keep the trust of many when there are alternatives.

Maintaining a currency requires threading a needle. Only strong governments have ever been successful at it.

Perhaps there is a technological solution, but it's not bitcoin or any of its brethren, because their growth rate is decoupled from the economy.

Yep, that's the problem with BitCoin alright: a bunch of people sitting on coins because they got in "early", thinking everyone is going to climb aboard and make them rich.

Probably not gonna happen.