I pay for things with cryptocurrencies fairly frequently. I don't want every company I buy things from having my name, address, date of birth and credit card info if they don't need it. If I'm buying goods or services that don't require physical shipping, all they need to know is what I want and that the money has changed hands. Crypto facilitates those kinds of transactions.

It would have to be a very compelling argument to persuade me that transacting through a middle-man (who then holds all my personal information and card details and also takes a cut) is better than just handing over cash and getting what I want.

Once you get to the point of using a reputable escrow system (which will have to charge a fee), that plus the bitcoin fees (either direct transfer fees or the implicit tax that is mining rewards) are unlikely to be cheaper than the credit card system (which doesn't have to burn immense amounts of processing power for business-as-usual). Having all participants be anonymous and untrusted adds a lot of overhead; in a civilized environment with a reasonable legal system you can shave that off by being willing to trust your counterparties (trust that is made possible by central clearing houses and verified identities).

Participants aren't necessarily anonymous; if you're buying from a known vendor and having something shipped to your house, neither party is all that anonymous. People are working on adding verified identities, for people who want them.

Ethereum hopes to do away with mining by early 2017.

At which point why use this instead of a credit card?

> Ethereum hopes to do away with mining by early 2017.

How are they doing byzantine-fault-tolerant consensus without it?

They're switching to proof of stake. Early PoS designs have some issues, like the infamous "nothing at stake" problem, but theirs addresses those. People lock up ether for several months, and bet it on which blocks will be included in the chain. The blocks that get the best odds in the betting are the ones that get included, so basically you're betting on what everybody else will do. You start with low-confidence bets that don't risk much, and as you see other people's bets you progress to high-confidence bets that pay off better, and it converges.

Miners essentially do the same thing: by choosing a block to mine on, they're betting their energy cost on that block being chosen.

Sure, but that doesn't really change anything. Their service will cost a certain amount to run, and so you'll end up paying an average of x amount per transaction/per dollar spent, whichever way you slice it.

> Either way you're paying only for the arbitration, not for stockholder dividends.

And yet for-profit companies usually end up being the most effective way to get something done. If I need a tree cut down in my yard I don't try to find some non-profit tree-surgeon collective, I call a professional from a reputable company. (And I would think that anyone who supported cryptocurrencies - which are all about directly transferring money without involving a social layer - to feel this way even more strongly).

> They're switching to proof of stake. Early PoS designs have some issues, like the infamous "nothing at stake" problem, but theirs addresses those. People lock up ether for several months, and bet it on which blocks will be included in the chain. The blocks that get the best odds in the betting are the ones that get included, so basically you're betting on what everybody else will do. You start with low-confidence bets that don't risk much, and as you see other people's bets you progress to high-confidence bets that pay off better, and it converges.

> Miners essentially do the same thing: by choosing a block to mine on, they're betting their energy cost on that block being chosen.

Hmm. Doesn't that mean the reward for fraud is much higher? Can't someone just bet a massive amount that their fork will win, and then their fork wins precisely because they bet a massive amount on it?

If you're not dealing with dodgy people, the big pain points are getting it, and keeping it safe once you have it.

I would like to know how much REAL MONEY went into this thing rather than its "value" as a result of funny-money speculation. I expect that any adult that put money or compute cycles into ethereum understands that the value could literally vaporize at any time, so it seems disingenuous to throw around dollar figures inflated by speculation. Is anyone _really_ losing their shirt at this point?

This. This is what I'd like to know before I can give a crap about crytocurrencies. Otherwise, it is all tulip bulbs in a land far, far away.

With cryptocurrencies, however, there isn't enough "legitimate activity" (i.e. people actually conducting business with Bitcoin) to allow a stable price to emerge. This makes them vulnerable to manipulation because there is no function for the form to follow. At least with regular currencies, speculation has to follow reality. With cryptocurrencies, reality follows speculation!

This leads to a negative feedback loop; people are reluctant to use cryptocurrencies for business because the price is unstable, and the price is unstable because not enough people are using them for business.

That's a wholly circular argument, and a counterfactual one.

If speculation influences prices then it's in the interest of speculators to create pricing mechanisms that are perpetually "out of whack" so they can profit from them.

There is no such thing as an accurate commodity or currency price, and there never can be. There's only market sentiment, and that's largely based on optimism or pessimism about the future - which is unknown.

Markets are just entrail reading, with very expensive and complicated entrails.

DOA was more like a meta-entrail system with an extra layer or two of obfuscation. But it was no more stable than any other market, and fell prey to exactly the same problem - manipulation of mechanisms creating a dishonest illusion of objectivity for profit.

"If speculation influences prices then it's in the interest of speculators to create pricing mechanisms that are perpetually "out of whack" so they can profit from them"

How exactly will they influence said prices without trading? Which costs money? HOw would they move a price (cost money) then move it back (cost money) without constantly losing money? You need other people to take you out of your speculative position, and those other people must be (net-net) non-speculators, and sufficient in number (which was @omegaham's point). Separately, any market which is purposefully "perpetually out of whack" is not even a market, and will quickly tend to zero participants.

"Markets are just entrail reading"

Another eye-roller so vacant that I don't know how to respond.

I wish people like you wouldn't jump in with such certainty about subjects in which you are eminently and so evidently without the foggiest of any idea, but willing to get your word in anyway.