I disagree, and think there is some observation bias going on here. I've been using a Bitcoin-linked debit card for a couple of years now, and take payment in Bitcoin for odd jobs I do for people online. I also always list that I accept Bitcoin when I post things for sale on Craigslist and other "classifieds" sites, and probably 10% of people use it for payment now. I've had several people buy things from me on Craigslist from across the country and the world that I wouldn't have accepted otherwise due to payments fraud. I'm happy to ship a $400 fountain pen to a buyer in Lagos (which I've done!) if they pay in Bitcoin, but I'd never consider doing so if they used any other payment method for fear of fraud.
I don't see anyone posting about everyday uses, but they do seem to be happening.
> People only worried about how high it can go
The only time I really think about the current price of Bitcoin is when it's in a period of volatility. Otherwise it seems to be consistently slightly deflationary, which is exactly what I expect it will be long-term.
I'm assuming you're placing your ad in USD and converting to BTC for the transaction, instead of listing a BTC price.
There are however some people that price their "services" in BTC, most notably ransomware criminals. I think also bets are quite often valued in BTC.
If you hold during the bear market, you might have had a different opinion about the slightly deflationary nature of the beast. x10 return in a couple years is not slightly deflationary by any measure.
> x10 return in a couple years is not slightly deflationary by any measure.
At no point was I holding significant value for daily transactions over a long period - I mostly use it like I would use PayPal, to take payments online and easily spend the proceeds.
Please, tell us about the debit card. Who is the issuer?
That's been my daily life for a couple years now and it's been liberating. Certainly there's a challenge so you don't loss net-worth with volatility when it drops, but I see it as a cost of freedom.
Also curious: is there a debit card that you can back with Bitcoins?
I personally have found ways and can manage Bitcoin's volatility just fine (relatively predictable income/expenses + fiat reserve + futures) (of course you could just sell for a fiat currency/USD), so I really don't have a single issue with Bitcoin, apart from not being accepted yet to more places.
I also looked into these Bitcoin-backed debit cards and they have all the same issues as normal debit cards but worse:
- 1% fee to load the card (this is nuts) - ATM fees like usual - Other misc fees, monthly or otherwise
Every time someone talks about how great using Bitcoin is it sound like they just liked the idea of it and very deliberately modeled parts of their lives around it, rather than it offering any actual benefit.
Like I said, restrictions apply to countries that have Capital controls, for starters you are only allowed to withdraw $300 per week and of course no purchases outside the country. Obviously I'm not in the US and I'm merely describing my case.
My card's fee is a flat 0.5% on any amount loaded and ~$2 per withdrawal from an ATM, imo it's not that much plus the exchange rates are better than if I tried myself on my exchange. Also, I skip the fees from international remittances.
I don't know the reality of daily life in the US, but even there it's not the same for everyone, I've read the stories of the unbanked. Just because it doesn't seem useful to your case, it doesn't prevent it from being for others.
I raise this every once in a while on BTC discussions and nobody's ever been able to tell me anything about the investment fundamentals of BTC. Why should it even be worth anything, and why should it go up? Owning (some part of) a BTC just means that you can use the blockchain to prove that a while ago, someone raised the total entropy of the universe by solving a relatively unimportant crypto problem. I fail to see why that (solving an insignificant crypto instance) should be worth money in the first place.
BTC is literally just some bits in a few computers out there. It is not backed by the full faith and credit of a stable entity like the US government, and, because the blockchain is literally a distributed, public transaction ledger, it's more trackable than cash (as another commenter noted. I can't reasonably expect to make significant amounts of transactions with them in day to day life (Bay Area coffee shops that accept BTC notwithstanding). I can't explain it to my mom, which tells me I don't understand it, and nobody else can explain it to me, which tells me they don't understand it.
Even assuming you can answer why they should be worth something, why should these bits be worth more than the output of /dev/random, or some bits that make up a MP3 file?
Money is just information, like music. There is no reason it needs to be slow, expensive, or restricted - which all other money currently is.
Bitcoin is better at organizing the information of money than all other existing methods. This (+ scarcity) is what enables it to be valuable.
Specific bits in the bitcoin blockchain are not valuable, as you're stating. There are no individual bits in memory or on disk that have value. They're simply clones of the same distributed information, which is that you have some slice of the pie. It's your ownership of the slice of the pie that is valuable, because it is scarce, and because it is value-information that is fast, cheap, and global.
What does "backed by the full faith and credit of a stable entity" even mean? Why does it matter? Does it have anything to do with the organization of information? It seems like it doesn't.
I understand it to meant that the country in question will be a currency-recipient of last resort: the country will always accept taxes paid in this currency, and will use this currency to charge for government services and pay its employees. This ensures that there's always a market for the currency -- something that you don't have a guarantee of otherwise, unless the mode of payment has non-financial uses (like rice, cloth, nails, or cows).
The collective belief in the value of intrinsically useless mediums with certain properties is one of the major technological breakthroughs of humanity. Currency is the bubble that seemingly never pops. Bitcoin and its future incarnations aim to improve it.
Proof of work has nothing to do with giving Bitcoin value. PoW is the cost the distributed network pays for trustless consensus, nothing more.
To understand your fundamental misconceptions, I would start by reading the seemingly unrelated but actually very relevant book Sapiens by Noah Yuval Harari.
Finally, Monero solves the privacy problem of Bitcoin if that's the kind of transaction you want to make, but this is another topic.
Well why don't you generate some bits from /dev/random and see how much people will offer you for them?
The reason Bitcoin is worth more than arbitrary bits is because it can't be faked (you can't just create more bits for free and spend them again) and because everybody else agrees that they're worth something. The same properties that any system of money requires.
EDIT: And what do you think it means to be "backed by full faith and credit"? It sounds grandiose but is meaningless.
In other words, owning a non-dust amount of Satoshis gives you some useful property. Anything scarce and useful will have value and market will price it. Anything with price and good properties to become means of exchange, unit of account or store of value can under some circumstances become some form of money.
Output of /dev/random is not scarce.
"Backed by faith" doesn't exactly inspire my confidence, and the US government is unhinged.
Sure, it's being adopted by criminals. Great. Not many startups opportunities there, unless you want to risk a lifetime in jail.
There is no evidence of these kinds of biases and lots of evidence to the contrary. Coinbase said that they added a million new customers on this last price rise and is now valued at well over a billion dollars. They shutdown people's accounts when they trace their transactions to dark net market activity. And yet people still keep going on about bitcoin only being adopted by criminals.
Are you really going to tell me that the thousands of bitcoin ATMs around the world are all being used for people getting on the TOR network, using encrypted messaging, and buying drugs from darknet markets over TOR hidden services?
Any other play is a losing one as your risk of huge devaluations in trying to use Bitcoin like cash make it incompatible to the average person. The usage of Bitcoin as it was originally envisioned is far from the truth.
You think all of us who use bitcoin to buy things are just lying?
Until Bitcoin as a whole stabilizes, the original vision that Bitcoin and other cryptocurrencies that soon arised were meant to advocate for, will never be realized.
Under current US tax laws, every time you purchase something with BTC, you need to calculate the cost basis in that individual lot of BTC and then determine if capital gains taxes are owed, and if so, then remember to include them on your tax return for the year. Do you have the discipline to do this? I don't. Hopefully the laws change to become more pragmatic in the future, but until then, it's pretty much DOA if you want to remain totally tax compliant.
That said, evasion of governmental restrictions is and always has been a core use case for Bitcoin. While that's not my primary concern I don't see that as a negative.
I think you're absolutely right, with the caveat that...
Yes, just because people are coming to Bitcoin with this in mind, does not mean that ultimately Bitcoin is successful at that use case.
Graphs like this coin flow graph[1] and the story[2] that goes with it, make claims that Bitcoin users can more successfully evade government restrictions, seem particularly dubious.
Coinbase, a licensed Money Service business, follows Know Your Customer and grows increasingly interested in their customers. I recently had to answer a follow-up survey about how I use Bitcoin and where my income is coming from, in order to withdraw less than $1000.
It would have been pretty easy to lie on this survey (and the questions were particularly non-invasive) but there's not really any doubt in my mind that Bitcoin is a platform where the users can be tracked.
We're running out of examples of major Bitcoin heists that went unsolved.
Bitcoin is absolutely more trackable than cash, and in a lot of cases (although maybe not so much for "tracking users" who are associated with governments, that already likely do have access to databases which the rest of us don't... but for the unprivileged anonymous internet users who are interested in tracking) Bitcoin is significantly more transparent and even more trackable than the banking system.
[1]: http://wizsec.jp/images/theft_flow.svg
[2]: http://blog.wizsec.jp/2017/07/breaking-open-mtgox-1.html
I do see some mild counter-evidence. There were two very large dark-net markets that were shut down recently, and the price of Bitcoin didn't seem to respond.
Sure, but let's compare apples to apples and compare the percentage of USD being used daily for buying illegal drugs (and other illegal) products with the percentage of Bitcoin being used daily for the same purpose.