And if this is a speculative bubble the way it looks like it is, it will end like other speculative bubbles. A few people will get absurdly rich, not because they added any value to the system, but because they were able to time the market. Their money will come from the many others who will lose a lot because they tried to do the same thing but were too late.
Beyond that, there seems to be a small group of people who are interested in it because they see it as an alternative to fiat currency. But strong opposition to fiat currency seems to be one of those odd economic beliefs that some people get, similar to the people who think that our society would be great if we just got rid of money and had a barter system. Outside of fringe beliefs, fiat currency is generally seen as a useful tool.
A lot of millenials have learned a lot about the existing financial system due to Bitcoin, even if it was initially to make a quick buck, and I suspect there's no way back to fiat for a lot of them.
This is exactly the kind of one-sided perspective that makes me very sceptical. No, they didn't 'leave fiat' in any way, and they never will. At best they can hedge against it a little. But while that might be personally profitable, it is not clear at all whether it is a net benefit; the main problem of western economies nowadays seems to be too tight monetary policy, and crypto is tighter than fiat.
Is not cryptocurrency the ultimate fiat currency?
It only has worth because we all "agree" it does via supply and demand for the currency itself, rather than any backing material value. Aside from a bunch of power plants in China, I suppose? But people don't hold Bitcoin at $20,000 because they strongly believe in the material worth of the rural Chinese electric grid.
(post edited to say "fiat currency" rather than the noun "fiat" which means decree or command)
I did not mean the bare word "fiat", and will update my post accordingly.
Whether millenials have learned about existing financial systems or not is immaterial. It's unlikely they'd be holding a position in bitcoin if it weren't for the massive gains that have been seen in the past year. It's purely a get rich quick play for the majority of buyers today.
I can't do anything with Bitcoin that I can't do more easily with my credit card. It offers no value except a tool for rampant speculation. Block chain is junk, and while I see promise in the future I strongly believe we're in the Myspace stage. Something better will come along in a few years and blow this garbage away. Something that's actually usable as a real currency in all the ways I can use a dollar and maybe more.
It has a good chance of working, in my opinion (the lightning network), if they don't dawdle too long. But the clock is ticking.
The whole reason we have currency is to allow transactions between people that don't trust each other, so I don't think Lightning network will do anything significant
1. With the caveat that you (or a service you delegate) need to be prepared to broadcast a transaction within some time period if a peer tries to defraud you, which is unlikely since if they fail they lose their funds in the channel.
2. Assuming enough liquidity in the network
Lighting network is also distributed, you don't need a direct channel between you and another party to pay them. You just have to find a route.
Who cares? Honestly, who cares if BTC is the one that wins? I only care about some cryptocurrency seeing mass adoption, I don't care if that's BTC or any of the other thousand coins.
I think a bigger risk than specifically Bitcoin failing is all this crypto fragmentation. If not Bitcoin, then what?
When Yahoo was replaced by Google people switched and their lives didn’t change.
If/when Bitcoin goes to zero people could lose faith in crypto completely there might never be a replacement.
If currencies go to zero and the masses lose their money then they could lose faith in the whole system. Interop of 100+ currencies won’t matter if all have zero value.
I’m not saying this will happen, but suggesting it’s a worst case scenario.
Well, everyone who is long on BTC.
Is it not obvious to you that no fees is a ridiculous proposition? Free transactions mean spam and that doesn't work in a distributed ledger.
That's false as your credit card issuer controls who you can and cannot transact with. With BTC you control whom you transact with.
Good old fashioned cash is much better for criminal activity.
A crypto like Zcash (another fairly large crypto) that utilizes zk snarks to encrypt transactions and then decouple coins from their history would be much better suited for illegal transactions.
BTC was always about reducing control from a few centralized parties. I don't want my bank or paypal account being arbitrarily frozen.
Nowadays BTC is not very good at transactions due to exorbitant fees + very slow confirmation times, but things like ethereum, bitcoin cash, and altcoins offer options. ETH is very quick.
For Bitcoin like technologies completely lack privacy.
Sure, all of this technology is nascent and scaling issues are yet to be solved. But it's far from useless in its current form. Not every application needs 10s of thousands of txs per second, for example ICOs. I know that this is another hot-button issue, but some of us feel strongly that people should not be protected from themselves. And that's the most important thing that blockchain offers: true freedom, and that's why it's so exciting. Especially at this junction, in the wake of the internet having been co-opted by big business and big government.
[1]https://arstechnica.com/tech-policy/2017/12/bitcoins-insane-...
There’s also some contention because Bitcoin Cash (the other fork of Bitcoin) is in a lot of ways closer to the original design of Bitcoin (“peer-to-peer cash”), but is having to fight for the name “Bitcoin”.
I think having the first-mover advantage and name recognition, the network effect that it has right now and the global media's attention, it looks really difficult for a smaller coin with better tech overtaking BTC anytime soon.
We've all seen technologies that are more advanced than an established player in a field but a lot of times, that does not matter. That's what I believe at least for the short to mid-term timeline.
Obviously, there is more than enough happy-clapping on the side of speculators to balance everything out, but I do wish the conversation more often found a practical mid-ground.
People do discuss Bitcoin differently depending on whether they have bought in or not. But the dangerous effect is the opposite of what you aluded to. People attached to bitcoin who have money on the line engage in acrobatic brain gymnastics to find ways to rationalize the value of it because they desperately want their gains to be real. At the moment they simply aren‘t. Bitcoin has failed it‘s initial mission, it‘s impractical and people just speculate that somehow things might change in the future. It‘s just a mind game right now. So your mid-ground would require me to accept that there is some value in the speculation regarding bitcoin which is a tough sell. It‘s mostly greed and people will be hurt by it at some point. Let‘s stop before it gets to messy!
There isn't much middle ground. Bitcoin has proven to do a horrible job at just about every single thing it was originally marketed as. It isn't free, it isn't instant, it isn't permissionless, it isn't anonymous, it isn't secure, and it isn't decentralized. The only thing bitcoin has going for it is the price, which is more likely than not fueled largely by exchanges pulling funny business.
The social mechanisms (regulatory etc.) around retail banking are a crucial safety measure for individuals in the first instance. Bitcoin discards all that. If you repair the safety net, by creating a web of trust between principals (e.g. banks), proof-of-work becomes an unnecessary nuisance.
From the recent ING paper: "The average person [...] dislike[s] having no rights, no recourse, no guarantees, no legal coverage, nothing. They just want secure, reliable and hassle-free access to their money, and if they forget their password, they want to be able to call their provider and have the password reset for them. And with reason: recent analysis suggests that up to about 20% of all Bitcoin in circulation may be lost forever, due to, for example, misdirected transactions, lost passwords and crashed hard disks. Banks are the usual providers of custodian functions preventing loss and theft."
It's possible to be anti-Bitcoin while accepting that digital money is the future.
The Bitcoin/blockchain-agnostic term for the basic abstraction these intermediaries share is "distributed ledger", though that doesn't solve the whole problem.
On top of all that, we're still entirely unsure how the system is going to function once all bitcoin has been mined and it becomes a pure transaction system.
Maybe, but the current price is no reflection of that. The current price is based on speculation, not utility. No "maybe" about it.
Worse, people with massive crypto fortunes can act as evil as they want, and society can't do anything to stop them. Right now we can take the money away from the powerful, if society collectively agrees to. That will become impossible.
If BTC had no upper limit, I would agree with you. But Satoshi capped it, and theories abound as to why. The most reasonable explanation is that he wanted to incentivize network strength: more participants, the healthier the network, and deflationary currency encourages adoption from a game theory point of view.
But think about the endgame. What do you think will happen when coins stop being minted? When there are only 400 BTC left to mine? What will happen to all those miners and the vast worldwide mining apparatus?
If Satoshi were still around, he would likely want to remove the hard cap. And then we'd be in a different situation. But he didn't, so we're not.
And you might not be able to take money away from the powerful, but you can still throw them in prison.
That's the kind of threat model at stake here. Another Putin emerging. And this one may be much less predictable.
If Satoshi were around, his opinion would carry weight. He's the spiritual leader and mysterious benefactor, the only person to have ever solved the byzantine generals problem with sybil resistance. If he spoke, people would listen more closely than to others.
In fact, people are resisting change mostly because they want to stick to satoshi's original vision. So he is speaking to us, in a way, by saying nothing. That's him communicating his vision to us, and us agreeing with it.
If he were still around, he might very well say "I only did that to ensure the network stayed healthy! We still have an endgame to think about! The miners will eventually run out of coins to mine, and it's in our interests to continue the status quo rather than degenerate into that world."
You can't thrown Putin in prison because he's not a resident of a country you control.
Likewise, you can't steal his money, even under the current system.
Can we present the argument without appealing to a fear of the evil Russian boogeymen?
As long as you don't mind the value of that wealth fluctuating by very large amounts. Today that wealth might be worth $10k, but in a month it very well could be $100...
Wells Fargo clerk issue is totally separate from this.
This is a really poor reason to use BTC.
A) BTC is supposed to be a currency - generally, a currency is not where you should be storing wealth. Currencies are not designed to be 'stores of value' - they are there to facilitate economic activity and transactions.
If you want to 'store wealth' - put it in real estate, bonds or equities. Commodities. Other currencies. A broad mix/basket of many of them.
B) There's no reason at all to think that BTC will necessarily be worth more/less than another currency. Why do you think BTC will 'always go up'? Much of the BTC hype may have already been had.
C) By simply keeping your currency in a trivial savings account, will roughly protect it from inflation.
In addition - most bank accounts are Federally insured - in case something goes wrong, you get up to $200K back etc..
D) Risk. BTC could go to zero tomorrow. Probably not - but possibly. It's extremely volatile = bad store of value.
People have this really odd view that 'currency = value' ... it's not ... currency is just a 'medium of exchange' - so you only need to hold it when you want to transact with someone else in a common/liquid way.
Over any reasonable length of time, currency is generally not a good place to hold value, and it's not designed for that.
If you have lot's of currency, trade it for something else, spread it out.
There will never, ever be a currency or any other magical currency store of value that will provide what you are kind of implying. Never. This is because the ratio of 'things people need' and the 'amount of currency they need to transact for' is constantly in flux, ergo, a 'fixed' currency constantly in flux relative to that.
They were talking about the blockchain and its public recordkeeping. There's nothing like Wells Fargo doing shady things and charging you money, or BofA randomly charging you money or changing their account rules, or freezing your account...
Coins have their downsides, but a public ledger for absolute truthkeeping is not one of them.
Before you jump on the hype train, just ask yourself if it really is a train you want to get on, consequences and all. Alas I fear lot of people are already too invested in bitcoin as to see the problems with it.
Blockchains are objectively a better system. If the government pulls a Napster on Bitcoin (and Blockchains), I hope they get whatever is coming to them. Napster -- it had its problems with fairness and ownership, and a reasonable case could be made as to why it hurt creative producers. But Bitcoin/Blockchains? Literally no case can be made as to why we have banks when we have Bitcoin. It helps everyone except the people in charge of the inferior systems.
For example, what happened with Slavery? There was a lot of old money in Slavery and at some point we had to be like "sorry guys, your system sucks". Of course, that ended with war. But at the end of the day, we are in a better system. I can proudly say "slavery is disgusting" without fear of being hurt by the government.
Today we live in a time of financial slavery. A time where certain people get to control our money and thus our means. When will we be able to say that "banks are disgusting"? I am waiting for that day.
I can only speak for myself but I see this chance as practically being 0.
As far as I can tell the only people who would need something like Bitcoin are those who participate in illegal/immoral activity. Seeing as there is no regulation, I don't think it's far fetched to believe those who have a large amount of Bitcoin, such as hackers who were paid ransoms in it, would have motivation to try to increase the perceived value of it.
Personally I believe that people, especially those who already participate in illegal activity, trying to profit is easy for my mind to grasp and believe than for some technological revolution. I suppose the bias from my personal experiences shows as well given that I haven't met a single person who has purchased Bitcoin for its utility but many who have bought it because "it's going to go UP!!!!!!!!!".
I suppose personally I don't want to see people throw their money away, especially because in this case I believe it will benefit scammers, and that's why I have a negative attitude towards it.
> I think you should give the cryptoscene another chance and do some research on what's going on. Saying that all this work, money and effort is something that will only benefits scammers is a bit unfair.
I suppose the issue is that I don't really see anything wrong with our existing currencies but there are hurdles and issues to using cryptocurrencies (I can't actually use it to buy many things and its value fluctuates too much for my stomach to handle).
It's entirely fair. Bitcoin is a solution in search of a problem. The only "solution" it's solved so far is lining the pockets of the folks at the top of its pyramid. Bitcoin has been around for, what, 9 years now? If it was going to see mainstream adoption, it would have happened a long time ago.
Having said that, I think there's a bit of (healthy) skepticism amongst those of us who hold "traditional" assets regarding BTC.
As someone who holds real estate as part of the investment portfolio, I understand and see the return from the rental properties. Stocks give me dividends. Bonds give me interest payments.
Currently, all these yields are in dollars. But would I gladly accept BTC as payment? Currently -- no. It's too volatile for it to be useful. And the entire issue of blockchain transaction backlog is worrisome.
So if a tenant comes to me and says, "I'll pay this month's rent in BTC," I'd still have to say, "No thanks. I'll take dollars please."
https://www.schneier.com/blog/archives/2017/12/crypto_is_bei...
Crypto just means hidden.
The housing market crashed in 2008 when everyone defaulted on their loans and all the speculation on those assets went upside down. I wonder what a cryptocurrency crash would look like.
- it is not transactional, as each trade costs $30-40. as exchanges hold the orders for weeks
- it is not rare, as there are tons of viable cryptocurrencies coming out each day
- it is not safe, as exchanges go bankrupt and shutdown.
- it is not stable, as prices fluctuate wildly each day. Downside could be 90%, upside could be 20%.
- it is not fast, as 100K+ transactions awaits
- it is not anonymous
- it is not valued correctly, as a sell order of $100M will most likely reduce the price by 50%
People are negative about it because they missed the ride up. It was at $1k earlier this year when these people started dissing it and calling it a Ponzi scheme, and now it's at $15k. Those people missed out a 15x gain, something most startups they've labored their life over can't do. It's human nature to be jealous
Yes, this is possibly getting too large too fast. Yes there is a chance this is a bubble because the barbers and shoeshine boys are talking about it. But there is also a chance that we genuinely are at the beginning of the transition from Fiat currencies to crypto (beginning of the S-curve mass adoption). And given that we live in the digital connected age dealing with a virtual concept, it takes a lot less time for things to catch on and spread like wild fire, as opposed to other transitions in history like snail mail -> Email (which also was not that slow).
And if at all that crypto vision does come true, the value of BTC and some of these other top cryptos would be worth a _lot_ more than it is right now.
Again, this could go the other way and it could all come crashing down soon and maybe the hype dies down. But I feel a majority of the HN community is just waiting for that to happen which I did not expect.