If people thought a little beyond their personal use cases, they would understand the utility of Bitcoin/crypto for many others. The technology is a paradigm shift. The financial world is structured as it is because of its existing flaws. Bitcoin/crypto enables things that people don't know they need because they are now possible.
Apart from any "send money to your relatives back home" service, sms banking in entire continents, or Hawala.
Don't get me wrong, there's so much wrong with the current banking system, and I really hope someone or something manages to disrupt it, but Bitcoin is no solution to that.
people are constantly conflating bitcoin the currency alternative with some kind of new way do banking, finance, monetary policy, and never explain what needs disrupting and what the new world look like. is it just better, faster, cheaper? or some fundamental disruption, not just incrementally less costly.
This is the big problem with crypto. Trust moves around. But there is one solution: escrow backed by smart contracts - see here for one implementation [1]
Personally I think what we'll see in future is people being offered the option of going through existing institutions as a form of insurance for the reasons you mention, but an alternative on offer for people who just want to minimize fees or who don't think they'll need those conflict resolution services.
Also now I have to trust the smart contract developer
Ten+ years ago we were all told that the decentralised cryptocurrency would enable the unbanked masses to make micropayments to one another — and indeed, we could do that in the first few years. However, the mining fees are so exorbitant these days that micropayments end up being very expensive, at least percentage-wise. I didn't have any expectations about the bitcoin exchange rate ten years ago, but the “cheap micropayments” expectations were blown to pieces a long time ago.
Bitcoin Lightning, is that so simple that even my mother could use it without my help? For me that's the acid test.
She could use BCH. Just open Bitcoin.com app on phone, tap "SEND", "Scan a QR code" (or enter email, or phone number, or BCH address), and slide. Video: https://twitter.com/rogerkver/status/1179037602499837954
We can prove that A transferred BTC to B thanks to cryptographic signatures. But what if the ATM machine (turning BTC into USD or whatever) on the other side fails? You still have to trust 3rd parties whenever you do an "off chain" transaction.
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As long as BTC has huge volatility, it fails as a store of value. Swings up, or down, will incentivize "games" to be played with regards to any BTC / USD exchange.
Bitcoin is well known globally whereas Hawala in a subset of countries.
In OP's example he has to trust the Bitcoin ATM whereas for Hawala you'd have to trust the honour system (thus at least 2 parties).
Bitcoin is digital whereas Hawala requires exchange of money in person. In OP's example this gives him the flexibility of not having to prearrange a transaction.
«SMS banking» → Non existent in our situation (US recipient)
«Hawala» → Maybe, but unworkable in our situation. None of use have used Hawala, we wouldn't even have known WHERE to look for Hawala providers...
Thank you for demonstrating my point. Nothing could have beaten Bitcoin/crypto in this instance.
I can send a wire transfer for free to any other person in Poland at 4am on saturday night, and they will get it instantly (some exceptions apply).
I can even send them a direct code to withdraw a specific amount of money from most ATMs in the country, instantly and anonymously. (Could be to an unbanked person, but we don’t have those really - aside from some very senior citizens).
What you described is not so much a flaw in the banking system in general, but in the US banking system specifically.
Crypto has a ton of awesome use-cases - DeFi is the most promising one. Sending money to other people wirelessly can, and will, be solved by centralised institutions.
Depends on who you are, or who he is (or who he knows) and how much money you're sending, how much you've sent overall in the past X weeks/months, etc...
The concept of having electronic money that no one (banks nor governments) can touch is just incredibly appealing to me and has been so ever since I first discovered Bitcoin. I guess it's the anarchist/libertarian (I'm not politically affiliated) side in me... It goes hand in hand with what made the internet (and BBS's before that) so incredibly exciting back in the 90's.
Bitcoin definitely has its issues, but the attraction is still there, I can't shake it.
Instant transfers are not supported by every single bank yet, and there is a limit to 15k€. As a fallback you have electronic wire transfers that are usually free (or 0.25€), and have a guaranteed delivery of one working day (usually sooner).
You can literally 1M€ for 0 fee, and it gets delivered within 2-4 hours if you send it before 3pm, and if later - by 8am the next day.
After my first date with my gf, she wired me 15€ paying back for dinner, and I wired her back 7€ saying that 15€ was too much. Yes, you can literally flirt with wire transfers - that’s how cheap and common they are :)
As for having money that nobody can touch - sure, it has an appeal. I won’t argue that. But for person to person transfers, most of the world has already figured it out.
In canada we have Interac Online that allows you to send money instantly to anyone in the country but when it comes to international transfer it's usually really slow. (3-10 days). Bitcoin allows tou to send that money anywhere almost instantly.
What cryptocurrencies enables is border-less transfers, where geographic location doesn't matter anymore, as long as you have a internet connection.
> Sending money to other people wirelessly can, and will, be solved by centralised institutions
I wish I could be as optimistic as you. I have been living in three different countries for the last 20 years and heard that "instant wire transfers anywhere in the world" is coming for the last 20 years. Seems only Instant SEPA has been doing some actual work, but it still doesn't even cover 50% of the world.
And why wait for a centralized solution that might come 20 years in the future when you can use the decentralized solution that works today?
Recipient was unbanked (under severe financial hardship)
People keep arguing crypto when internal fiat is likely to end up as central bank digital wallets [2] and cross border transfers will be facilitated by fintechs like TransferWise, with central banks essentially assuming more and more of the cross border infra over time [3].
Anecdote: A friend needed financial help due to COVID, and I was able to get their Citi deposit account setup with Zelle in ~2 minutes and send them cash from our reserves. The transfer was effectively instantaneous. IMHO, the problem isn't the transfer mechanism, it's ensuring that everyone has a a bank account [4].
[1] https://www.zellepay.com/get-started
[2] https://www.atlanticcouncil.org/blogs/econographics/the-rise...
[3] https://asiatimes.com/2020/12/cross-border-payments-on-horiz...
The only time they will ask you questions is if you start with putting in huge amounts of money fast - then AML applies.
I know there is an issue with unbanked population in US, but it’s a regulatory one - it doesn’t have to be that way.
Hope this illustrates that Tesla’s commitment to clean energy is shallow, and their real commitment is to easy to manipulate financial securities.
I work at TransferWise so I know that 34% of our transactions are now instant (less than 20 sec).
However with Bitcoin there is no need for verification because a transfer is irreversible.
[1] https://insights.namescan.io/a-complete-guide-to-aml-regulat...
[2] https://en.wikipedia.org/wiki/Know_your_customer#Laws_by_cou...
Everything was a barrier. Language, paperwork, carrying cash around safely, time and finally most importantly, fees.
No thanks.
I didn't see any Bitcoin ATMs in either place, or Vietnam for that matter, and can't imagine the process of turning Bitcoin into spendable currency there would be easier, especially not for somebody without a local bank account.
And even that is debatable.
A new technology that has ignored the regulatory structure is not apples to apples. Someone could ignore regulations with current tech and be just as "convenient."
You don't need digital assets to commit fraud.
I just gave you no less than 6 reasons!
Slightly is an understatement.
What if I lost my wallet with my debit card, why would I know the language?
You are making a TON of assumptions and not considering A LOT of use cases.
I'm in country with a cash economy, am unable to use my debit card in the local ATMs and don't speak the local language. I login to online banking on my phone or in a cybercafe and send a bank transfer in my currency from my account to WU. Within a few minutes WU confirms receipt of the funds. I walk down the street to the large WU sign, show a MTCN number and my passport to the teller, and collect equivalent cash in local currency, less a bearable-in-the-circumstances transaction fee. (This actually happened by the way.)
Let's for the sake of argument, assume I already have a large fortune in Bitcoins, access on all the major exchanges and private keys memorised and written down in a secure box, all in my possession. Trouble is vendors want local currency not BTC, and I don't have the language skills to convince them that actually BTC is a much better store of value or locate the local BTC enthusiast's group (if there is such a thing) and negotiate an informal money transfer with them. In the end I probably give up and use Western Union...
The issue with those alternatives is that they cost a lot. In your case, this additional cost was worth it in an emergency but that's often not the case.
Think of the vast number of people who send money abroad to support their families.
Even if I could have found someone in a small Moroccan town that knew what a Bitcoin was and how to use it, the daft exchange rate they'd have offered me to convert it into cash would have easily exceeded the cost of Western Union for the same transaction. The villages people send money to support families are not full of hackers playing around with blockchains, and the few people in their country with the knowhow and resources to exchange Bitcoins for cash are not going to be cheaper or easier to deal with than WU.
Sure, I can cash out crypto via my bank account and bankcard pretty easily, but I can cash out cash even more easily...
How much cash do you really want to walk around with if you have lost your wallet which likely included some Of your identification.
Normally, you just have to show Western Union the verification number and your name. You don’t need to chat up the front desk.
> If I had a bank account with balance, why would I use western union?
How often would you not have a bank account, not know the local language, and not be near people you know who would help with money in some extreme case?
—
The other two sibling comments repeated more points. Really all of us are wondering what use cases you’re thinking of.
I don’t think you realize how easy services like Western Union are. I didn’t either until I used it recently.
Because sending money to people in the third world who DON'T have a bank account is almost impossible via a normal transfer. My understanding is that the vast majority of the Somali population in the US, for instance, send money home to friends and family via WU. They have a bank account in the US, their friends/family back home do not.
>What if I lost my wallet with my debit card, why would I know the language?
If you lost your wallet and debit card, why would you have thousands of dollars of cash on hand in a country you don't speak the language? That sounds both unlikely and extremely dangerous.
>You are making a TON of assumptions and not considering A LOT of use cases.
I've actually considered most of them, and I've yet to hear a situation that makes any realistic sense outside of illegal activities.
Vs
> If you’re in a third world country
This is a different scenario.
There’s many people that send money back home. What they use varies. I know people that transfer funds to someone and they give the cash to the person minus an amount. The method will depend on the location. I can’t speak for everyone and won’t try to.
>If you lost your wallet and debit card, why would you have thousands of dollars of cash on hand in a country you don't speak the language? That sounds both unlikely and extremely dangerous.
Depends. What country?
And in that country, how much is a room? Where am I staying? How much is a ticket? What do I need to get my stuff replaced? Do I have anything planned? Is it a business trip or leisure?
https://ycharts.com/indicators/bitcoin_average_transaction_f...
Western Union just needs the verification code and proof of who you are to give you money. I don’t see the big barrier with it.
I once sent $100 to someone in South America and it cost me $13.
WU is a relic that targets and takes advantage of the less fortunate and those in 3rd world countries.
A lightning transaction currently costs $0.000432200 but you would have to have an existing channel open (which would make sense for a heavy user to have already)
And that's only looking at on-chain mechanics. Solutions exist to remedy issues with scalability of the underlying blockchain.
I just don't get the Western Union hate.
I just now sent $100 to someone in South America and it cost me $17.
Bitcoin is a fad that targets and takes advantage of gullible people and those involved in the illegal drug trade.
This is for exchanges, right?
You can have a confirmation with Lightning for like less than 1/100th of a penny and there's no ID requirements for Bitcoin.
To start using Bitcoin, you don't need any ID. You can download, install, and use the normal Bitcoin client.
You only need ID to open an account on an exchange, and that's because exchanges have to follow Know Your Customer laws just like banks. But if you sell something for Bitcoin, you can accept it without an account anywhere.
You only need an account somewhere to convert between fiat and Bitcoin, and even that can be avoided if you find someone willing to sell you coins for cash.
However, part of the costs of course arise from supporting
a) a branch network that also enables those without smartphone to use the service, and
b) all the pesky KYC AML measures that Bitcoin conveniently circumvents.
I just looked it up, for BTC you currently pay a transfer fee equivalent to $11, with spikes to $17 in the past month.
With BTC I can buy them via the internet, and the person on the other side can also convert to cash in their own account via the internet, then withdraw on any ATM.
It's worlds apart.
Edit: I guess if you only consider the parent's use-case where the other person went to a Bitcoin ATM it's not that different but my point stands as it's only 1 other layer in the process and it's an online one.
And this is reason enough to replace all other currencies with btc ? Because it's fast ?
If people thought a little beyond their personal use cases, they would understand the NON utility of Bitcoin/crypto for most
What's up with this mindset that Bitcoin must REPLACE the existing system? As a Bitcoin user for 10+ years I always envisioned Bitcoin would simply co-exist with the rest. Your mind is too binary, my friend.
You tell me, I'm not the one who came up with it
https://www.finextra.com/newsarticle/34920/deutsche-bank-pre...
https://cointelegraph.com/news/crypto-will-eventually-replac...
https://www.forbes.com/sites/investor/2019/08/05/crypto-is-r...
and hundreds of other articles...
Not that fast: for most purposes you have to wait about an hour. Not as fast as centralised fast systems.
The whole reason that it is not allowed to send money to an anonymous person is... Well don't actually know where to start explaining it.
Anti money laundering? Counter-terrorism financing? Financial transaction reporting?
With Bitcoin, just like cash, you can freely transfer it as you please.
The disagreement is if that is good or bad.
Perhaps nations would be less likely/able to do things like this if citizens were able to flee without leaving behind their life savings.
As a currency it's dreadful, suffering from tens of thousands of percent in deflation (= value increased relative to the cost of goods).
As a trade product it's terrible, suffering from a lack of oversight from e.g. the SEC, opening it up to price manipulation (see MtGox creating artificial demand, the Tether money printer, the smaller crypto's being fucked around with by traders who have enough money to throw around to influence the price, and the meme coins being influenced by Elon Musk making a tweet about it (although afaik he can't be accused of manipulation directly, this time).
Further, every currency has problems. Is USD perfect in your mind and without it’s own unique set of issues?
One year into its existence, a Pan-European Clearinghouse provided clearing services for participating countries.
Six years into its existence, in 2008, credit transfers and direct debit are operational across the SEPA area, meaning roughly that international payments are on par with domestic payments (i.e. no fees, 1-2 days wait time).
Eight years into its existence, SEPA transfers have become the dominant form of electronic payments in the Eurozone.
Since 2017 (fifteen years in), anyone with a SEPA bank account can send money to anyone else in the Area instantly³, and free of charge.
Throughout this time: * The Euro didn't suffer hyperdeflation. * There are ways to recover payments that were sent to mistyped IBANs and/or were sent fraudulently. * Users who forgot their e-banking password can get a new one from their bank and not lose all of their assets.
In 2019, SEPA processed about 22 billion credit transfers⁴. That's about 700 transactions per second, or about a hundred times more than the Bitcoin network is able to handle. SEPA also handled about the same number of direct debits, something that BTC doesn't offer. Best of all: SEPA did all that, without using approximately Chile's annual energy use.
Bitcoin is amazing Sci-Fi, brought to life. It's a testament to Satoshi's genius, to a cyberpunk-y spirit, and to applying game theory in a system that actually kinda works. But given its immense costs for miners, users, and society overall, it's something that falls squarely on the dystopian side of sci-fi.
¹: Mainly because the Euro is a multinational project and not a national currency. And also a little bit because the US banking system is a bit of a mess. But mainly for the "international" aspect.
²: Technically, it was created in 1992 and could be used, in electronic form, from 2001 onward. Still, banknotes and coins were introduced in 2002, so that feels like a good starting point.
³: "10 seconds, or up to 20 seconds in some circumstances"
⁴: https://www.europeanpaymentscouncil.eu/what-we-do/be-involve...
No one here can pay for their pizza delivery through SEPA. Intermediaries like PayPal are still needed. I'm baffled that banks can't get their shit together to offer an instant payment solution that works over the internet (ie. no card reader) for small purchases.
What's the problem?
There are several banks that support it. However, for instant transfers to work in practice, both the sending and receiving bank need to support it. I know of at least one person who opened a bank account with an Instant-Transfer-capable bank to get access to Instant Transfers.
The SEC only deals with securities. Bitcoin is not a security.
The problem is that it is a prisoner's dilemma situation, where capital holders do not want to be 'encouraged' to invest their money even if it might be a net benefit to society as a whole.
No one invests for a "net benefit to society as a whole." They invest for a return, and you can NPV your project in both inflationary and deflationary environments.
https://transferwise.com/gb/send-money/instant-money-transfe...
It's impossible for 2 new unverified users to sign up to TW and send money instantly within 1 hour, cash in hand. Lengthy verification steps, etc. So TW wouldn't have worked in our urgent situation.
We've had the Lighting Network but that's not seen good adoption and has it's own problems. Sadly Bitcoin has first mover's advantage, name recognition and good reputation that can't be replicated by other more innovative solutions.
Can I ask why you chose Bitcoin specifically to make the transfer?
95% of the population is banked, but only 11% own bitcoin.
Are you kidding me?
>If people thought a little beyond their personal use cases, they would understand the utility of Bitcoin/crypto for many others.
What use case is that? Skirting AML regulations? You think governments will allow that?
Sending money to an unbanked person in severe financial hardship, for food & shelter. Nothing else worked. Not WU. Not TW.
I've been hearing that for 10 years. From a purely compliance/surveillance viewpoint, government authorities tend to prefer Bitcoin over cash, because they can monitor and run all sorts of analytics on the Bitcoin blockchain, which is not 100% anonymous, but merely pseudonymous. Compare this to cash transactions which are offline, untraceable. If you asked me to bet whether most democracies would crack down and ban Bitcoin within the next few decades, I'd confidently say "not going to happen".
https://business.ebanx.com/en/resources/payments-explained/p...
Imagine the same situation but the other person doesn't have a bank account.
The conversion has occur somewhere or they whole world has to accept bit coin and participate in tax evasion schemes by being so called unbanked.
There is limit to bit coin usage and alike and they will eventually hit the limitation and regulation.
The unbanked people are not buying Tesla. They will pay the tax.
You mention the right things, but it's two separate ones. Sending/receiving currency in 1 hour - this is not impossible with banking technology today. But if you're sending $10000 this to avoid income taxes, fees or any other kind of regulation – then it's a different thing you're talking about.
You are still relying upon a 3rd party to run the ATM or the exchange – and the main differentiator here is – they are not regulated by KYC (Know Your Customer). This means, they are not yet obliged to check who you are, whether you are reporting this $1000 as your income, or the person sending it as service fee, whatever. It's basically black money. In your case – you might have as well transferred $1000 as ransom for releasing your family (god forbid).
The point at which you exchange BTC for your local government cash – can be enforced by the government at any time by mandating KYC. And then things will equalize. Or we can assume there will be no such point, and all the last mile purchases will also be BTC. This means no government cash at all, shops accept BTC directly, and since BTC wallets are encrypted – they can simply report whatever they want as income or expense. But at some point, they have to pay their suppliers. And then we can also assume this extends to the suppiers, and all the way up to the supply chain. No reporting anywhere.
If the entire money circulation becomes black money (unreported, untaxed), then there is basically no way for any government to function at all. Then the state actor has every incentive to simply shutdown power and take majority control over the ledger (remember: the state has impossibly more compute than anyone else).
TL;DR: Lack of regulation is not a feature. It's just a temporary state. We can enjoy it while it lasts.
Bitcoin is the first time in history of a financial asset that no one can take from you plus you can send it. It is gold++
And every bank account I had has this.
Who in this modern era is unbanked and how did that unbanked person turn around and spend the $1,000 in BTC you sent them?
+ Sending actual cash from A to B is not a complicated process.
+ We usually use 'banks' for this process, generally for very good reason, in particular, regulatory compliance, security and especially concerns over fraud and money laundering.
+ That banks create essentially a layer of bureaucracy is not that great, however, it's mild relative to the propagation of unregulated currency.
+ BTC is neither a currency, nor a store of value - it's just monopoly money. It's not a currency because it can't be used in any economic system as a standard means of payment, and it's not a store of value for obvious reasons of volatility and no underlying inherent value. Literally any other classical store of value i.e. real estate, bonds, cash, commodities - are much better 'stores of value'.
+ Almost all of BTC's 'value' thus far expressed, comes down to either 1) playing speculative, Ponzi-like games where massively wealth individuals effectively control the market (defeating any notion of real distribution), or 2) skipping over regulatory concerns to do what amounts to illicit stuff, or 3) novelty and intellectual curiosity, which is nice, but not worth it.
+ The stated value of BTC which is to day 'hedge against debasement' unfortunately does not work. Currency is an essential thing for an economy, a 'super hard currency' (i.e. literally ever note backed by Gold) implies zero flexibility in the system and is guaranteed to cause serious strains on growth and/or very ugly deflationary spirals. And other problems.
What we want, ideally is 'very smart monetary policy' that enables us to move the levers as necessary for everyone's well-being. During the COVID crisis, we would be in serious trouble without monetary policy levers, the economic calamity would be much worse if we were all using BTC for example.
Obviously - having monetary policy, means a risk of debasement, such as we see in Venezuela, but Venezuela did not crash merely because of bad monetary policy - it was 'bad everything policy'. Venezuela faced economic collapse because every part of it's system was corrupted, including the Central Bank. There's a 100% chance, that even with a 'Gold Backed Currency' - that some entity in power will have had a chance to corrupt that system as well. For one - stealing the Gold.
+ Currency is a 'social contract'. It's a 'contract with the economy' and there is absolutely no getting away from the fact that it's somewhat intangible and fungible. $100USD basically means 'Americans owe you about this much'. That's it.
This notion that you can 'hold $10B in your pocket' is kind of myth - it's only even possible due to the complex mechanization of financial markets and the banking system.
You just can't sit on 'something' that's worth that much because there's far too going on in terms of comparative value - either that $10B represent assets that have to be managed, or, in a more long term store of value (like real-estate) whereupon even then the value will shift over time.
+ Some nice regulations to enable more fluid transfer of money would be nice. An instrument that was broadly backed by other things of value i.e. stocks, bonds, basked of currencies - and that which itself could be used as a 'global currency' would be nice as well. That could happen. But it may not have anything to do with blockchain.
+ Finally - Blockchain and decentralization - there's just no way getting around having to have trust in our institutions of various kinds. If they don't work, we all fall down. There's no magical way to wish that away and put trust in our pockets. Maybe better trust and transparency.
Finally: I should note there's a 'disruptive' value in BTC I think. It's a 'demonstrative' meme that can help use 'see' the relative value of blockchain etc. in various scenarios.
It is taxable in your hand as well as theirs. So any tax avoidance agenda makes the trade illegal.
So it is not like a bank transfer which is legit.
Obviously, it is "not like a bank transfer". Then again, that you personally have never seen anything like it, makes no difference in its actual legitimacy or usefulness as a medium of transaction.
If this isn’t resonating with you after the past year, I don’t know. I was forced to watch my government bungle a pandemic in the worst possible way and then asked to pay for it for decades. No I don’t think I will. Bitcoin is a way for me to step outside that debt I did not want or deserve.
That has very little to do with currency and everything to do with you not wanting to pay taxes.
You may think that COVID response has been a catastrophic waste of money but if you'd lost your job would you have claimed the increased unemployment benefits? I suspect the vast majority of people would have.
There's a lot to criticise in terms of government COVID response (and from your post you could be talking about any one of a number of governments!) but big government spending right now to stop even greater economic depression in the future is not some kind of wasteful accident, it's deliberate action to improve everyone's situation in the long term.
Sure they can. They are artificially inflated all the time - look at tether.
And it's not as if governments forced these shutdowns on a whim or because they felt like it. They were the result of scientific examination, and more importantly, the majority of voters were in favour of them (I think 8 out of 10 in the US in April?). In this case the government was just expressing the will of the people, whether it was your personal will or not.
[Source: a friend of mine who worked in local government disaster & contingency planning]
I don't believe that government-mandated lockdowns were ever part of any pre-Covid19 pandemic planning. It was assumed that [for instance] schools might well end up having to close if the spread of disease got so widespread that there wouldn't be enough healthy staff to keep them open, not because government would order them closed.
So if we did nothing, then P1 / B.1.351 would have reinfected the country anyway. Manaus (Brazil) got reinfected and its hospitals are overflowing with P1 infections, even after achieving 76% infection rate last year.
I say this because there's a large number of people who actually believe that "do nothing" is the correct response. Now with the hindsight of these new variants, we now know for sure that "doing nothing" is the wrong answer.
Not only does "do nothing" fail to prepare against future variants, it CREATES new variants as large masses of the population mutate the virus.
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It is increasingly looking like vaccination is our only option. (or really, has always been our only option, and we're only gathering proof today that this is absolutely the case).
For those at high risk, vaccination sounds like an excellent idea. A bit like we do with seasonal flu?
Except note that: "Flu viruses are constantly changing, so the vaccine composition is reviewed each year and updated as needed based on which influenza viruses are making people sick, the extent to which those viruses are spreading, and how well the previous season’s vaccine protects against those viruses"[0]
What do we do about those who are at low / very low risk from Covid19?
We give them the vaccine to stop the spread, once the vaccine is proven safe. After all: the vaccine slows down the spread of the disease (probably at a lesser rate than it prevents hospitalizations, but a slowdown in any case is good).
I'm not sure what you're trying to insinuate in your post. Since the vaccine has been given to over 30-million Americans, we know it is safe at this point (with issues occurring in literally one-in-a-million allergy issues, which is largely solved by just watching the patients 30-minutes after injection).
EDIT: I should note that we should vaccinate the high-risk / high-impact population first. The only reason we don't vaccinate the low-impact / low-risk population yet is because we don't have enough vaccine yet. But as Johnson&Johnson, AstraZeneca, and Novavax release their doses, things will go a lot faster.
Of course people hope that the vaccines actually do reduce transmission, the first study on that being the case for one of the vaccines appears to be less than a week old[sic] and it's not published yet.
"the study shows [for] the first time a vaccine has been shown to reduce transmission of the virus" [0]
> Since the vaccine has been given to over 30-million Americans, we know it is safe at this point[..]
I can think of a few things that were "known" to be safe that later turned out not to be quite as safe at all, let's all hope that isn't the case here.
> The only reason we don't vaccinate the low-impact / low-risk population yet is because we don't have enough vaccine yet
I'm not sure it's that simple. It's not just that there isn't enough vaccine, none of the vaccines are (yet) licenced for children.
(Full disclosure: all three of our kids are up to date on all their regularly scheduled vaccinations...)
Do you think some|most|all parents will consent to their children having one or more vaccinations against Covid19 when "the likelihood of children having significant detriment if they catch Covid-19 is very, very low" (quote from UK Health Secretary, Matt Hancock)[1]
How often do those kids see their Grandma?
Even in your grossly optimistic scenario, you're assuming that those parents (and kids) are willing to risk spreading COVID19 to their Grandparents, killing them. There's plenty of grandparents who are unable to receive vaccinations due to high-risk conditions (heck: Pregnancy hasn't been tested yet: so Pregnant parents this year are going to have to go unprotected).
Preventing the spread through the use of vaccines is an obvious win. The studies are pending, but vaccines in the past have prevented spread (even lesser-effective vaccines, like the 2014 flu vaccine).
When we're looking at 95% efficacy against symptoms (Pfizer / Moderna's vaccines), the amount of "prevents the spread" is likely going to be very very high.
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If you have a family of 5, and the mother is Pregnant, the best way to protect the mother (and potential #6 child) is to vaccinate everyone else. The family unit achieves herd immunity (>66% vaccination rate), making it very hard for COVID19 to spread to the mother.
There's a HUGE number of untested people with regards to the vaccine. Everyone who has been proven safe with the vaccine should be vaccinated. For the sake of pregnant mothers, cancer patients, and yes children (for now). Hopefully, when children are tested and proven safe, we can vaccinate them too afterwards.
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Alternatively, we can start testing at-risk patients, like pregnant women and cancer survivors. Which seems like the "greater evil" in my opinion. It makes more sense to test children and inoculate them, than to test higher-risk groups.
Joking aside, are we really seeing a data-driven approach to dealing with Covid19?
(Un)fortunately we still have our elected politicians holding the levers of power, and they have a habit of wanting to manage the narrative.
> Pregnant parents this year are going to have to go unprotected
I can't quickly find the appropriate data, but would imagine it's worth looking at the pre-Covid19 risk of dying in pregnancy vs dying as a result of Covid19 for an otherwise healthy woman in her 30s.
Data on leading causes of death by age group can be pretty eye-opening, I'd recommend everyone take a look.[0]
When and where on the charts do we think Covid19 is going to end up placing once the 2020/21 data is available?
1. Dying in pregnancy WITH COVID19 because you can't breath seems like a higher-risk situation.
2. Reducing oxygen levels is likely bad for the baby.
> Joking aside, are we really seeing a data-driven approach to dealing with Covid19?
We can't afford a data-driven approach. It takes months to answer questions with a study. We still don't technically know if vaccines prevent the spread of COVID19 for instance (even though its widely assumed).
I don't see any evidence that contradicts the assumed vaccine protection (vaccines protect us from other diseases). So why not assume until data proves otherwise?
Big government spending is absolutely a waste of economic resources, and will make the situation worse. The REAL problem is that most americans don't have enough money saved to take care of themselves during hard times. Why might that be?
The FED's influence has resulted in our entire economic structure discouraging saving. This is specifically a problem bitcoin tries to solve (by having a specific and tapering inflation curve that results in deflationary pressures).
Or inflation will be used to reduce inequalities now that taxes have been made unacceptable by the rich (who wouldn't pay taxes). It's more a replacement than a sum.
Elected officials don't have much of a a choice when the economy goes to trash and the poor becoming poorer to a point where violence becomes a good solution for the poor to have some control over the economy (who should serve society and not the other way around).
> The REAL problem is that most americans don't have enough money saved to take care of themselves during hard times. Why might that be?
Because they already went through economic crises than got them near bankruptcy?
The rich tend hold their wealth in stock, land, and other assets. Most of which inflation is mostly neutral or beneficial to. The dollar value of TSLA goes up in response to general inflation, but the purchasing power generally remains the same.
> You may think that COVID response has been a catastrophic waste of money but if you'd lost your job would you have claimed the increased unemployment benefits? I suspect the vast majority of people would have.
Do our expenditures like unemployment benefits actually have any relationship with tax revenue at this point?
There's a lot more than this, but at the heart of this debt system is a war machine.
Debasing a currency is not a normal tax. Currency debasement is extremely regressive.
- The poorer someone is, the more of their assets are likely to just be some cash in the bank.
- it is a permanent loss of quality of life for people on fixed incomes.
- it doesn’t exempt people a normal tax code does (low income, blind, high dependent count, etc)
> it's deliberate action to improve everyone's situation in the long term.
This is the justification for nearly every government action.
Wouldn't call it extremely regressive.
> The poorer someone is, the more of their assets are likely to just be some cash in the bank.
The poor generally have less cash in the bank than the rich.
> - it is a permanent loss of quality of life for people on fixed incomes.
Those living of fixed incomes are rarely the poorest, either. Pensions in many countries are tied to inflation.
> This is the justification for nearly every government action.
Yes, and in many many cases, that justification is entirely justified. Where it isn't, the problem typically is bad government, not government.
As a percentage of total assets, absolutely not.
> Those living of fixed incomes are rarely the poorest, either. Pensions in many countries are tied to inflation.
No, this is incorrect. There is a ton of middle class retirement based on fixed payment annuities. Additionally, the “cost of living adjustments” for things like social security are often completely incorrect due to the spending patterns of elderly being impacted by some categories far more than others.
> The poor generally have less cash in the bank than the rich.
The OP said the only assets some poorer people will have will be some cash [in the bank]. Is this not correct? I’ve been near broke before. The only assets I had besides a dying car was money in between Venmo, PayPal, bank account, and actual cash.
Honestly, all the fretting about the debasing of value of a poor person's small pile of cash seems like outright misdirection to me. You have to look at the whole picture, and that whole picture is that the poor person might be trading say a <$10 loss to inflation on a small savings account for a $1000 stimulus check. That's a good bargain.
More broadly, the hard money/bitcoin people seems to want exchange the elimination of their hypothetical fear of (hyper)inflation for a very real likelihood of lingering recessions due to austerity policies. That doesn't seem like a good bargain to me.
The current stimulus checks are certainly great because it hasn’t shaken confidence in the USD so borrowing rates are cheap. But if inflation takes off because of oversupply of money or a cash shortage (due to hawkish positions) then debasement is a real fuck you to everyone paid in USD.
Similarly, your second paragraph to me is fear-mongering. Not based in actual reality.
The unemployment stimulus and expansion to include gig and freelance workers has been amazing. In a state like my New Jersey, you were able to get a minimum $831 a week with the April-July 13 week $600 stimulus. And currently $531 and $631 a week if Biden’s stimulus includes $400 extra a week.
A family member shut down their business at the beginning of the pandemic. All the minimum wage no benefit receiving former employees were able to make more through July 2020 from unemployment.
Adding on to what you said - the hard money/Bitcoin people like many other people, will blame a recession beginning in 2021 or 2022 on the other side regardless of the reasons.
Currency fundamentally requires trust - at the very least it requires trust that the asset you are receiving is roughly equivalent in worth to the asset you're giving as part of the transaction. In the case of centralized banks, you have to trust the bank to help ensure the value of the currency. In the case of bitcoin, you have to trust the network, its participants, the exchanges, etc. Knowing that your transaction itself is secure is only a part of the actual, practical issue. You also have to be confident you can then use that asset to purchase an item of equivalent worth in the near term future. Trust doesn't stop, it simply moves. Centralized banks have made mistakes most certainly. They have also been around for hundreds of years. Bitcoin has perhaps fewer disappointments (although certainly not zero). It has also been around for a tiny fraction of that. How much of the extra confidence in Bitcoin is purely attributed to its otherwise relatively limited history as a store or exchange of value?
I won't opine on which one is "better" (if such a description even makes sense). However, it does seem at times that people rail against central banks while turning a convenient blind eye to the challenges of decentralized banks. Is it the case that only decentralized banking problems can be solved, and centralized banking problems cannot?
Checkout uniswap. Which is a decentralized exchange which the smart contract ensuring you get X asset for Y btc.
My point is not to say that the problem can't be solved on a technical level. It's that it still requires trust. That problem doesn't get eliminated, it simply moves.
Fluctuates relative to what? If BTC becomes the unit of account (as it already apparently has in certain channels of international trade), then it’s only fiat money doing the fluctuating, while goods and services are priced in BTC.
In other words: the mass public is unlikely to become Bitcoin-first until they can gain confidence in the stability of Bitcoin. This is notwithstanding the fact that stable governments likely will not accept BTC as a national currency, meaning citizens will still need USD/EUR/GBP/their local currency for paying taxes and transacting with the government.
It feels as though your post just handwaved away all of the practical issues with actually making the world BTC-first and then asked why I cared about them. Because, in order for the world you're proposing to exist, we almost certainly have had to solve them.
Classic example of buying a good using BTC: say it costs 100 satoshis. By the time I click and purchase, and by the time the BTC arrives at the seller's address, the value may have changed for the better (BTC price goes down - hence I paid "less") or for the worse (BTC price goes up - hence I paid "more"). For the most extreme example, imagine how people that bought a pizza with Bitcoin when it was worth 5$ feel right now. A 15$ pizza in 2009 or whatever is worth ~150K USD now.
The pizza was 10k BTC (now ~$443M). Tesla bought about 25k BTC.
A 15$ pizza in 2009 or whatever is worth 18.10$ now.
So which currency should you be spending or which one should you be saving?
When the amount of goods and services you can buy in any country swings by 10% in a day, you’re nowhere near being treated like a currency.
On the topic of price fluctuations, I'd like to point out that not only are there a plurality of stablecoins pegged against and collateralized with dollars, there are also synthetic assets like DAI which follow in Satoshi's footsteps - using game theory, economics, and finance, to novel and practical effect.
I highly recommend reading the Bitcoin, Ethereum, and DAI whitepapers (in that order).
https://bitcoin.org/bitcoin.pdf
For Bitcoins, concerns about trust are warranted. Currency requires trust that it retains value; that is not given for Bitcoin and its countless clones at all.
Stablecoins collateralised by actual dollars quite obviously require trust, namely in the entity providing and holding the collateral.
Stablecoins collateralised by "the algorithm" have never been seriously tested, in my opinion, and it not clear to me at all whether you can manufacture stability algorithmically. DAI, SAI, MAI, whatever, are only collateralised by "assets" on the Ethereum blockchain, so ultimately self-referential (or, if collateralised by something tied to something real, require trust there.)
https://crypto-anonymous-2021.medium.com/the-bit-short-insid...
DAI specifically is collateralized with ETH using smart contracts - it's over 100% collateralization is incontrovertible.
So effectively, you've linked DAI to the value of a coin that is set by tether. That being the case, the actual value of the collateral is in question.
That's why I replied that way.
The gold standard attracts a lot of people because of the naïve view that the government can't debase gold like it can fiat. However, that view is naïve: the gold standard doesn't prevent debasement, it just means that the government has to make a choice between maintaining the gold standard or pursuing the fiscal policy. (And the moment of decision can be delayed a surprisingly long amount of time.)
Yet, historically, when forced to make the choice, governments have almost always chosen continuation of fiscal policy over the gold standard. Many times (e.g., the early 1930s), governments chose the gold standard only for things to get even worse and instead opt for fiscal policy. In the long run, every country has ultimately abandoned the gold standard.
This. There's a lot of very very smart people who are totally lost among the trees on the technicalities of Bitcoin who don't get this 1 simple aspect. It's never happening.
On the contrary, it's made me more firm in my position: fiat is better than bitcoin because fiat is responsive to the demands of democracy, while bitcoin is responsive only to a protocol written in the late aughts.
There's a lot of issues with American democracy, but it's still democracy. I can vote, and theoretically any root problems can be fixed with constitutional amendments. The only way to do something similar with bitcoin is a hard fork, which just proliferates additional coins like bitcoin cash.
If global democracy fails and is replaced with authoritarianism I'd be all on board with crypto, but until then I'm happy with a currency where I'm a part of the decision making process, even if it's just a tiny little part.
No thx
Try paying your taxes in Bitcoin. Then you'll find that it has nothing to do with trust and everything to do with avoiding having your assets stripped by the IRS.
You want to live in a jurisdiction, then you pony up the tokens that jurisdiction demands. Or you lose your liberty and everything you own.
It's happening already: https://www.swissinfo.ch/eng/-crypto-valley--canton-to-accep...
> You want to live in a jurisdiction, then you pony up the tokens that jurisdiction demands.
It has less to do with paying the taxes in the currency used by the State and more with protecting your wealth at the same that you can keep yourself liquid. If you ever experienced hyperinflation you would understand. Growing up in the 80's in Brazil, I remember how every 5th of the month (when my dad and my mom would get paid) was very busy.
- Pay school, bills as early as possible to try to get a discount. Prices were adjusted 20-25% every month and if you paid earlier you could get some 5-10% off.
- Going to the supermarket to buy 3/4 shopping carts of groceries.
- Fueling up the car. I remember the traffic(!!) caused by car lines backed at the gas stations, waiting to get fuel before the prices went up.
- If we needed any clothes / school stuff, head to the mall.
As soon everything was paid that month, my father would get whatever money was left in the bank and would buy US dollars. For him it was worth the 5-10% spread between the black market rate and the official rate because the alternative was to see all his melt away.
He would still pay his taxes in local currency.
But not enough clearly given the lack of saving and underdeveloped productive capacity, otherwise there wouldn't be inflation.
"If you ever experienced hyperinflation you would understand."
By analogy because planes crash due to bad piloting heavier than air flight is clearly completely impossible and we shouldn't attempt it.
Moreover we should design planes based solely on lurid tales from those who have survived plane crashes and are suffering PSTD from it not by listening to those who have studied aeronautics and actually understand the physics involved.
Your experiences may be sad, but you have the cause and effect completely wrong in your mind. Like those who believe 5G causes cancer.
What we need are better trained pilots. Preferably those who know they are flying an aircraft, not driving a bus.
How much more you think they should be paying in taxes for the absolutely shitty public services provided?
You are right, part of the issue to solve inflation was related with increased taxes. So now the average Brazilian pays taxes like they are in some Western European country, but still get the same shitty public services and we have removed the ability for the middle class to save.
> By analogy because planes crash due to bad piloting heavier than air flight is clearly completely impossible and we shouldn't attempt it.
No. The analogy is that we shouldn't board into any plane where the pilots have parachutes for themselves but not for the passengers.
The lack of aligned incentives between Government (and its elites) and the governed is the problem.
> Your experiences may be sad.
Actually, no. There is nothing sad about it. Looking back, my (relative) standard of living was never as high as it was then. Two-parent family income was "needed" to afford private schools and our own home, but I'd wager that even if we depended only on my not-college-educated mother salary we would be better off then as the standard single-income family of today. And that comparison applies to even living in Europe like I am today.
> What we need are better trained pilots.
Yes, the old "We havent't tried real socialism/communism/my-favorite-pet-theory-of-everything". Piss off, will ya?
well administered flexible ms > fixed ms > badly administered flexible ms.
So, let central bankers do their job, unimpeded by politicians.
Case in point: the USD your father bought were fiat with a flexible money supply, administered by the Fed.
The issue then becomes of how to have "well administered flexible money supply". Is it working in the US? EU? China? Turkey? Lebanon? Japan? Argentina? Brazil? Venezuela?
Besides the financial elites, are people seeing their work turn into prosperity? Are people from lower income nowadays more capable of saving and investing, or is it becoming something available only for the rich?
Even if we consider the rich countries: do we really want to live in a world where the majority of people depend on welfare and a perpetual money printer running to keep people consuming crap that no one really needs and enabling governments to fund armies to fight over resources across the globe? How sustainable is this?
> So, let central bankers do their job, unimpeded by politicians.
You might have trust in a bunch of technocrats, I don't.
Alternatively, let people make experiments with different crypto currencies, different governance models, different technologies, different requirements and different values. Evolutionary processes are more reliable/less fragile than a rigid central-planning structure. Haven't we learned anything from the almost-century-long experiment called USSR?
This is not to me saying "all flexible money supplies are crap, let's get rid of it." Only Bitcoin maxis would say something silly like that. What I am saying though is that Bitcoin was the first successful attempt at decentralized governance and that has a lot of value and (to some) is better than many of the existing central banks.
Central bankers are unelected wonks with no more idea about what is happening than the politicians. The cult of central bankers has become a religion.
It's like putting your faith in the pope rather than Henry the Eighth.
https://www.coindesk.com/miami-mayor-previews-favorable-cryp...
So far even attempts are seastading failed due to traditional countries destroying them militarily (one italian attempt for example was just bombed until nothing remained, and an attempt the pacific resulted in nearby countries landing troops on the built islands and kicking people out)
Some entity (state) has to have the monopoly on violence to enforce laws or there are no enforceable laws.
When there was some kind of micronation-mania some years ago, with multiple mainstream papers mentioning Sealand and that Australian farmer and whatnot, I went to check, and found out that the UN itself is quite dangerous, in fact is why being "UN recognized" as a country is so important (for example why Taiwan would want to be a country officially), the UN navigation laws state that everyone that is a member of the UN has several rights of navigation, and the US for example is one of the main enforcers of these (US warships patrol around the world to ensure "free passage"), but the way those rigths is written, imply that if you are NOT a member of the UN, any member can sink you without any penalty.
Thus the only way to be anywhere on the sea while not being in the UN, is if you are ally of the US (Taiwan), because otherwise you are at risk of being shot at.
I don't think China has yet the navy needed to counterbalance that.
Then the Big Man with the most guns and the heaviest mates becomes the jurisdiction. And you don't get to vote for him.
Because when it boils down to it human beings are just Strategically Shaved Chimps.
https://fredblog.stlouisfed.org/2021/01/whats-behind-the-rec...
https://fred.stlouisfed.org/series/M2
Yet consumer price indexes do not appear to have been greatly affected
https://fred.stlouisfed.org/series/CPILFESL
The dollar has however lost ~9% to the euro
As for me, I loved the original promise of bitcoin. A decentralized peer-to-peer electronic cash. It's not that though, and it never will be.
There are lots of fascinating blockchain projects though, and we have bitcoin to thank for that.
Do you have a list? Here [1] is a 2018 article from The Register titled "Blockchain study finds 0.00% success rate and vendors don't call back when asked for evidence", and here [2] is a 2021 article titled "IBM Blockchain Is a Shell of Its Former Self After Revenue Misses, Job Cuts: Sources" saying that
> “There is not really going to be a blockchain team any longer,” said a person familiar with the situation.
> Expectations for enterprise blockchain were too high, they said, adding that IBM “didn’t really manage to execute, despite doing a lot of announcements.”
[1] https://www.theregister.com/2018/11/30/blockchain_study_find...
[2] https://www.coindesk.com/ibm-blockchain-revenue-misses-job-c...
Alternatively, if Bitcoin was our currency, we'd be in a deep depression because it'd impossible to increase the money supply and people would hoard. The government would have had to confiscate Bitcoin, like was done with gold in the 30s.
I have been skeptical of the MMT people but now wonder if they might be right. One way or the other, the policy will be taught in economics books.
Inside its borders the US Dollar also derives value from chartalism, but the currency clearly has other sources of de facto value.
BTC doesn't have that (there's some BTC-denominated debt, but it's relatively thin and/or unenforceable) and so future demand is based on fickle wants rather than established needs. I'd be more inclined to trust the long term value of cryptocurrency if it was issued as repayable debt, but I'm not sure how you begin to achieve that in a decentralised, anonymous and enforceable way.
A currency is literally 'trust' - it's a social contract. it's trust in the economic system where the currency prevails.
If you don't trust it, you don't trust where it comes from.
It's impossible to have a currency that is not use widely in some economy, and it's almost impossible to not have some management of that currency. For example, if any nation officially adopted BTC as their currency, as opposed to some fiat, they would be in for a difficult ride with a complete lack of any monetary policy. Nations that use the USD are actually leveraging the value of the US system. In general, the US system has more credibility than their own, so it's a benefit, and they are generally small.
As a store of value it's monopoly money.
The 'allure of not having to trust' people is a total myth, for any currency, even the hardest ones back by gold, land etc..
I think I prefer your options...
Taxes are a different issue and that's up to each jurisdiction to solve via better legislation.
Lightning Network adoption is slow and steady. There are several newbie-friendly mobile wallet apps available [1][2][3]. Some nice improvements have been developed and pushed live in the last 18 months (e.g watchtowers [4] and atomic multi-path payments (AMP) [5]). There are now five Lightning Network node implementations (lnd, eclair, c-lightning, rust lightning, Electrum). And there are hardware projects working to bring LN into the physical space - one of which is my own project, a Lightning-only Bitcoin ATM named "Bleskomat" [6].
[2] https://www.walletofsatoshi.com/ (!!) <-- custodial
[4] https://github.com/lnbook/lnbook/blob/8d2582e51eb615c850b24e...
[5] https://lists.linuxfoundation.org/pipermail/lightning-dev/20...
There were 2, and both appear to be out of business.
This removes a little friction, but the vendors are not taking crypto. Its not really any different than using a US credit card in a foreign country - the vendor isn't taking USD, even if thats what I end up being billed in (along with the associated fees).
I’m sure you’ll find many others willing to take your bitcoin in exchange for helping you buy what you need or provide the services you require.
> Yes it has, anyone in the world can open their own "current account"/"deposit account" for free, right now.
Maybe, but it simultaneously un-solves many problems around fraud and theft, because it's (for instance) impossible to reverse a transaction.
Probably Zcash is a more likely contender for that, as it is the only cryptocurrency offering fully anonymous transfers together with normal, public transfers in the same wallet.
Do you know how difficult it is to get millions of people to agree that something is a store of value, not only agree, but to put their money where their mouth is? THIS is why bitcoin is where it's at.
What usefulness does a $100 million painting have?
I don't think $100 million paintings are a good store of value or medium of exchange either. But again: at least many of them are nice to look at.
1) There is no central authority that can print more
2) It is deflationary. There is a limited supply.
3) Everyone has agreed on the protocol, and everyone can be confident that their bitcoins are their own and they can trade them however they want. This is important.
4) There is no inherent value. This is the part that trips many people up. An items inherent value simply gives it a natural price minimum. For example, golds 'inherent value' is that it is an excellent conductor, and theoretically if the price gets too low then people will use it for just that, which will keep the price stable at that market value. Bitcoin doesn't have this - however this also keeps it from having no price maximum either. People want it because they want it. What is 1 BTC worth? There is nothing to tie the price to. It's worth what people will pay for it.
People are buying into bitcoin now because they see a graph going up and want it to keep going up. It could just as well be shares in a video game retailer.
I personally think BTC is useful, especially in times like these, mainly because it has no intrinsic value. People are scared of inflation. Interest rates are low. The market is extremely overvalued, trading at massive P/E ratios. Nobody really wants to be holding cash, stocks or bonds. So what do people do with their money when there is no alternative?
Disclaimer: I own $1500 or so in BTC.
> People are buying into bitcoin now because they see a graph going up and want it to keep going up. It could just as well be shares in a video game retailer.
You're absolutely right. People are only going to buy BTC if they think the price will go up, or remain stable, or whatever their goals are with their money. I don't think our opinions are at odds here.
And yes, "overthrowing the system" was indeed heavily discussed all the previous times, here's one example : https://m.slashdot.org/story/144938 Also remember how the creation of bitcoin was spurred by the 2008 financial crisis?
Aren't they doing that because they see helicopter money flying? Haven't you noticed that S&P500 and gold are also high?
Networks of people are what allows for ideas to get popular...
So basically fiat money, then.
If you are asking why stable coins pegged to the dollar don't exist, well they already exist.
Because I've lost count for bitcoin : it's about to have it's, what 5th or 6th, bubble-popping ? (Coming back stronger each time.)
Go ahead then, I would genuinely like to hear your critical evaluation since you just shit all over the Bitcoin whitepaper without any actual critique in your post.
I don't understand the extreme polarization of Bitcoin on HN. It's a very interesting tech and it's still early in the adoption phase and the space is still evolving.
For example, rich people are known to buy expensive art and then lock it away in a warehouse. Why do this? You're not getting any value out of the piece. The reason is that the sole purpose of the art piece is to be a reliable store of value. You're paying a lot for something that you know will hold its value.
This is what Bitcoin has become. It's valuable because it's valuable. And the fact that it has become more valuable over time (despite volatility) makes it even more valuable.
And Bitcoin will always remain what it is now, a system for transferring bits in a decentralized fashion over the internet. Even if Bitcoin is worth $0, as long as there is a sender and a receiver (and at least one miner online), you'll be able to transact Bitcoin, this is hardly worthless.
> governments who see it as a threat , with India even going so far as to suggest they would ban it
This for me is a huge selling point for Bitcoin (et al). If famously shady governments like India and the US starts talking about banning something, I immediately start looking into why and how they are banning it. So far, the arguments seems to be that they are scared of loosing control, and if it gotten that far, it's because they genuinely believe cryptocurrencies could replace their centralized currencies. More reason to get involved in it.
Yes, but you really can't fight the government and run a parallel currency. If the government bans it then you cannot use it for any legal transactions.
> Yes, but you really can't fight the government and run a parallel currency. If the government bans it then you cannot use it for any legal transactions.
But even in that situation, you would still be free to bring your money into the control of a different government instead, who has laws you find more favourable. You wouldn't be victim to currency controls and bank runs
Another thing to consider is that people buy gold jewellery as a store of value. You don't spend $30k on a watch if you don't think it will keep its value.
Yes you do. You’ll almost never get the retail value out of a piece of jewelry if you try to resell it.
>Another thing to consider is that people buy gold jewellery as a store of value. You don't spend $30k on a watch if you don't think it will keep its value.
This isn't true because the vast majority of retail jewelry, which is the majority of jewelry sold is a terrible store of value.
The average person that spends say $10k on a diamond ring isn't going to be able to get that value back again. Even beyond the issue with how much it's marked up, there's the problem that jewelry stores tend to sell on consignment, so they have little incentive to buy and resell used jewelry.
And if you look specifically at gold watches, a small fraction of the price is actually the price of gold itself.
According to this link https://www.montredo.com/how-much-gold-is-in-a-solid-gold-ro... a 30k Euro gold Rolex only contains about 4k Euros worth.
This link says something similar https://millenarywatches.com/how-much-gold-in-rolex/
A $30k gold Rolex contains about $5k worth of gold, yet it costs $22k more than the non gold version.
The problem Bitcoin and other cryptos actually solves for most people is different. That problem is summarized as "I have (or can borrow, at a low rate) fiat currency, and want to get a much higher return on my investment than the low rates traditional savings provide."
Money is cheap right now, and essentially, the returns on these things beat inflation and stock markets. For now. But one of these days the market will collapse - you just have to make sure you get out before that happens.
I would like to see your plans for this ;)
Jokes aside, I think that Bitcoin attracting greedy people was inevitable. Bitcoin _was_ revolutionary in that it was a new financial instrument. Couple that with its explosion in value, and the 'hustle bros' will definitely come flocking trying to take advantage. However, if you were a part of it before it became popular, you would definitely know that it started as an oddity, a hobby for cryptographic enthusiasts. The hustle bros didn't write the protocol or sit around scheming about how to design this thing so they can scam people. It doesn't necessarily mean that Bitcoin is inherently bad, but its nature (decentralized, anonymous payments, complex, end users mostly don't understand the details) makes it ripe for the scams you mentioned.
There was a lot of repeating, over and over again, how amazing and revolutionary bitcoin was. "For the first time ever, a computer owns currency!" one youtuber said without the slightest effort to explain why I should care.
Maybe I missed something. Obviously some people did well on it, and if I'd just skipped all those videos, bought a few hundred dollars worth, and then sold those shares a few years later I'd be a lot better off right now.
The truth is for most people, there's no reason to care. Maybe there will be in the future, but not yet.
Most people aren't looking for an investment vehicle, a replacement for USD, a way to challenge central banks, or a way to perform zero-trust financial transactions.
Most people want to do what they already do in day-to-day life but with less overhead costs or more ease of use. Bitcoin does nothing for this: on-chain transaction fees are too high, lightning network is not there yet, very few places offer support for btc payments, and so on. All these problems add up to a simple conclusion that btc is not useful for the average person, so instead proponents have to sell a majestic vision of the future or a get-rich-quick scheme. Most go for the latter.
I agree with you, and I am a "invest in a well-balanced mutual fund and retire in comfort" sort of person, not at all the target audience for bitcoin.
Still, even an explanation of why it had the potential to replace USD or challenge the central banks would have been interesting. No one seemed to go further than "because I said so"
Honestly I've yet to meet anyone who wants to take down central banking who seems to have the faintest idea how banking works.
Here's a pretty large literature list as well: https://nakamotoinstitute.org/literature/
Personally I'd recommend "The Ascent of Money: A Financial History of the World" by Niall Ferguson for a more complete look at what makes money, money.
It's easy to feel FOMO but if you educate yourself and still are not comfortable, then you're absolutely right to sit it out.
[1] https://www.amazon.co.uk/Price-Tomorrow-Deflation-Abundant-F...
Projects like particl [1] are creating a decentralised, anonymous marketplace with very low fees. Imagine being able to sell on ebay or amazon and only paying pennies in listing fees.
This is an early stage in crypto but the trend is inevitable.
I wholeheartedly agree that we definitely do need some vehicle of value, and it might as well be currencies as we know them now, but with some hoarding-prevention mechanisms built in, or maybe some other way to figure out a value of time you provide to the society. Right now we rely on free market for that, but is the coffee you buy in the morning of same value to you as it is to the person in the queue after you? And if that coffee helps you build more value to society than your fellow man for whatever the reason, maybe part of that difference could also be captured by the coffee producer as well. If price of coffee was expressed in something like a fractional unit of your value in a day, let's say 0.02u, then you'd pay the same price, yet with wildly different absolute values. This is just random thought, and it probably will fail in hundreds of ways, but maybe something to spark your imagination.
There has been very few research and development into decentralized economic planning. (Imagine if only a fraction of the development resources that have gone into High Frequency and Momentum Trading had been invested into Decentralized Economic Planning)
https://www.wikiwand.com/en/Planned_economy#/Decentralized_p...
I am quite sure many here would agree that the Economic Calculation Problem doesn't hold much water nowadays (or at least won't in the near future) with the available computation power.
If a competitor opened up next to him, they'd both then compete, thus trigger your decentralized planning since they both have to innovate or come up with methods to gain customers.
No it isn't, decentralized economic planning involves communal ownership not private (shareholder) ownership which allows communal management and prioritizing the needs of people and not the wants of those with most money/capital.
The current political-economy in most countries is Liberalism. ( https://www.wikiwand.com/en/Economic_liberalism )
> If I have a skill to provide a service, I can start my own business in my town to make a living.
If you have a skill then under decentralized economic planning you would provide it as needed and not start a business (own or otherwise)
> I can more or less accept payment via other goods such as food for my family. In smaller towns this is still not unheard of.
That would be barter, it is more common to accept non-currency IOUs when doing communal work / services rather than directly into goods/services.
> If a competitor opened up next to him, they'd both then compete, thus trigger your decentralized planning since they both have to innovate or come up with methods to gain customers.
In a decentralized planned economy if someone else wanted to work as a mechanic then they would cooperate rather than compete.
In a perfect world, where there are no corrupt or selfish people, I suppose it could work, since we'd all be working towards a greater good. But that utopia doesn't exist, and possibly never will without stripping the rights of individuals.
The comment you were originally replying to was regarding non-currency economies, so first of all I would assume "require less labour" or "more efficient use of materials".
> I wouldn't be able to since I'd be required to share my trade secret with Sharon.
If you want Patent protection you currently need to share the mechanics of how you achieved that. If you use it as a "trade secret" and someone independently figures a similar or identical way then you are out of luck.
> What incentive would I have to innovate?
Requiring less labour on your community and yourself, if both you and Sharon are more efficient then you both have more free time for other stuff, even leisure or study. Currently if you are an employee in a private company if you make something more efficient good luck because you are getting to do more work for the same pay. (and the company might decide not to hire more people or fire people depending on how much labour you saved them)
In the current political-economy where most people are employees they are desincentivized from working efficiently by the threat of losing their employment.
> In Bullshit Jobs, American anthropologist David Graeber posits that the productivity benefits of automation have not led to a 15-hour workweek, as predicted by economist John Maynard Keynes in 1930, but instead to "bullshit jobs": "a form of paid employment that is so completely pointless, unnecessary, or pernicious that even the employee cannot justify its existence even though, as part of the conditions of employment, the employee feels obliged to pretend that this is not the case."
The value is made up and the economics (and lack of eco-validity) don't matter! Eth's new developments may fix this but 99% less is still a lot without investment.
A more fun way to frame this story is 'Self-aggrandizing Green-tech company admits to supporting use of payment processor that uses more than 1000X more power than other options'
Each time this happens, I stand in awe of the brilliance of bitcoin - not so much the details of UTXOs or hash magic, but the choice of time base and halving intervals.
Its as if it were designed to be a FOMO feedback loop from the outset. The fact that its still working after so many boom/bust cycles is amazing.
[Edit] clarify reference to parent
Since there's little actual utility in using bitcoin right away (even if it was accepted everywhere, but you have fiat, why would you need to buy btc and immediately sell it?), people who'd like to invest would never rush buying until price stabilizes and begins growing. This naturally produces these "steps": BTC goes up 5-10x, then mania kicks in, then it goes 2-3x higher and then pops 2-3x down. Every convinced investor bought before the mania phase, weak hands sold off at a moderate return or at a loss, while a bunch of new people got interested.
Halvings are just one of those points that help tipping off the balance for the already formed crowd.
I prefer representative government by elected officials.
Great, don't think we have any currencies that are run by a cartel of corporations (yet), although Facebook's currency was probably gonna end up being that.
For cryptocurrencies, they are usually run by "miners" who can be anyone, not just corporations. You can run your own miner, or your own node, hence they are called decentralized. This feature does not exist in our current centralized currencies, and is one of the main selling point of cryptocurrencies.
> I prefer representative government by elected officials.
That is great that you feel that you are represented correctly in your government, I am really happy for you. For many other people in the world though, that does not exist or if it does, doesn't work out in practice and people don't feel represented. You don't have to look very far to discover which countries I'm referring to.
For people living in these countries, where they don't trust the central bank (like many don't trust the central bank in the US to have people's best interest at heart), cryptocurrencies offer a way out of the system without going off-grid and leaving the option of having things to trade with, without going back to a goods barter ecosystem.
For all the talk of Bitcoin being decentralized there are a dozen people or so that could destroy the whole system if they so chose to. Overtly or covertly.
Despite my feelings about governments specific actions, and the bank system, not even the President or the Fed or Congress could do that as quickly with the dollar.... although sometimes you would think they are trying.
How so? According to https://www.blockchain.com/charts/pools, it would be no easy feat to start controlling more than half of the current network. Even if some of the pools got together. And if you launch such an attack, it would be easy to notice what's going on.
But if you do have some idea on how the network could be overtaken by a "dozen people or so", please do tell as you have some unique insight.
there's powerful people that can destroy industries and countries, so that point is moot. there's no much point in debating wether there's someone with the power to drop a nuke, or the economic equivalent, on your head.
are you talking about devs and miners?
explain yourself.
So long as we still exist in a scarcity reality (not the utopian post-scarcity vision), there must a way to abstractly represent the value one possesses and may trade for goods/services.
You mention that decentralization is a very important step that we should try to take as a society. If that's the case, then why isn't Bitcoin (or PeerCoin etc etc) a step function revolution?
Decentralisation has to happen through increasing trust between people, while cryptocurrencies are designed to replace trust. Yeah, current institutions controlling our monies are hardly worth the trust, but honestly bitcoin doesn't even remove that trust (it just shifts it to some random self-proclaimed experts at Tether, twitter gurus or god knows what else the crypto people are up to nowadays).
I think Bitcoin, which has its obvious flaws, is sort of the de facto flag-bearer of crypto, and more of a harbinger of things to come. I'm not yet convinced that Bitcoin will be the only cryptocurrency in widespread use, in the same way that the USD isn't the only fiat currency used in the world today.
Cryptocurrencies have potential to drastically change how recognition of value is created and distributed, so that's definitely an avenue to explore. Most of the big cryptos that are out there today don't really try to explore that, and currency is something external to value generation and recognition. I'd argue that even fiat currencies are actually closer to the value generation (as the money creation happens when banks give out loans, which at least are supposed to make world better). Purely from cryptocurrency perspective the only thing that it values is keeping the ledger alive. Exactly those self-sustaining by all means mechanisms are what leads to rot in many areas of life (academia, politics, corporations, you name it).
"Bitcoin For The Open Minded Skeptic" - https://www.paradigm.xyz/Bitcoin_For_The_Open_Minded_Skeptic...
"Stone Ridge 2020 Shareholder Letter" - https://www.microstrategy.com/content/dam/website-assets/col...
Many have tried. Probably most famously, the writers behind Star Trek tried to build a fictional world without currencies. Even that didn't last. All manner of currencies were introduced to sustain various plot points. Some form of money exists in every large scifi franchise. We cannot even maintain the thought experiment of a fictional society without currency. At this point a world without currency is literally beyond our imagination.
Then we learned that there are enough bad actors to ruin most decentralized applications before they get big enough to make a difference.
Unless the incentives are strong enough.
Tokenomics has proven to be a pretty effective way to do that.
Everything flies out of the window when they discover Bitcoin. Suddenly they don't want to work anymore and just buy Bitcoin and confessed they've been stupid all this time railing against Bitcoin.
Bitcoin IS a terrible currency because it's volatile. Really the worst aspect to have in a currency.
Also, your statement alludes to Bitcoin being the one true way, as if there are no other options for third world countries.
Volatility in a currency is a terrible idea and it gets even more terrible of an idea when utilized by people with little money.
Can you explain how a volatile thing like Bitcoin is a reasonable currency for third world countries?
After all, pro crooks do not want to leave an eternal trace of their transactions on a public ledger on the internet.
The FBI has already proven pretty well that with a big enough dragnet (and resource that places like the NSA absolutely have), they can associate people to wallet addresses. It just takes slipping up a single time and they'll find you.
https://www.bnnbloomberg.ca/booming-crypto-market-a-potentia...
so not sure about the claim.
https://www.justice.gov/opa/pr/two-chinese-nationals-charged...
https://www.justice.gov/opa/pr/ohio-resident-charged-operati...
The upside of crypto currencies is decentralization, but a public ledger is public to law enforcement as well. With time and serious funding they often can link wallets to people.
I’m not saying it is good, only as a matter of fact it is a thing.
https://www.coindesk.com/us-prosecutors-attempt-to-seize-bit...
“Bad money drives out good.” Best money is a compact, moderate/high value, easily verified, inherently useful/desirable, fungible, divisible/mergeable, stable material of a generally agreed on value. Worse money scrapes away these factors as a matter of convenience & opportunism. We’re now reduced to verbal anonymous confirmation that user X is agreed owner of number B, with a market value of V - there is no physical manifestation.
When people look at bitcoins they think of 2 things. 1. A form of investments that will give fantastic returns in future. 2. A technology that solves a problem.
Its the 2nd point that is more important about but the 1st that will always dominate conversations.
1) It won't give fantastic returns in the future forever.
The coin/currency thing is misleading. You should compare it more to gold than to USD etc. Something off which the issuers can't conjure up 4 trillion out of thin air whenever their palls want 'moar!'. USD would be completely Zim dollas by now if it weren't for the petrodollar scam.
One "strong-manning" observation: it seems to me that a digital currency could really facilitate international trade. As I understand it, bitcoin may not be technically suited for general transactional use (I may be wrong) but in general this could be very useful, to avoid the bureaucracy and charges of changing currency multiple times.
I agree. The future is not keeping track. If someone needs something they should have it. The only reason that hasn't happened is scarcity and logistics, which I believe we will solve in the not so distant future.
What mechanism will exist to validate conflicting "needs" of different people in the not-so-distant future? Extreme example: we can't give everyone their own mansion with a beachfront view in order to prevent triggering them.
The reason why Bitcoin is a mystery for many people is exactly because of this ^. Bitcoin is NOT a currency. It doesn't position itself as a currency. This fairytale is long gone, forget about it. Bitcoin is a store of value.
It cost $7.6M and took five years to repatriate 53,780 gold bars worth $27B back from the US to Germany.
It's >1000X faster and >10X cheaper to move that much in Bitcoin , even accounting for N>>6 confirmations.
Bitcoin doesn’t position itself as anything.
In other comments, though, you can see people are still defending its usefulness as currency.
Your example is a bit strange, by the way. Transatlantic bank transfers in your currency of choice have been a solved problem for decades.
Ok then. It can also be stolen or lost more easily, though.
The volatility concern will eventually go away. Volatility represents people's opinion about Bitcoin. They don't understand it yet. If you look into history, you'll notice that pretty much every new invention goes through this phase. People's first reaction is always the same - "nobody needs it, nobody's going to ever use it".
sorry about that. one day you will understand it
Literally the same happens to any investment: tell people to buy stock X, time share Y, precious metal Z, that it's awesome, so it gains value, etc
The fact is Bitcoin/crypto is revolutionary. For example it allows merchants to cut down on fraud, since a payment received in BTC is irreversible, so chargeback fraud is impossible. It enables instantaneous B2B international payments. It allows escaping your country inflationary currency. It's censorship-resistant. It empowers the unbanked & underbanked.
That's how I view it. A very small minority of die hards are trying to use it for other things, donations of course, but it's mostly used for drugs.
There's a "paper" on pnas claiming the opposite but if you actually read it they make massive assumptions in it. I can't believe they were allowed to publish a paper based on assumptions.
Storing value. Smart ass answer, I know. But it's true.
As a private currency, Bitcoin is like a screen door. So I don't know why you'd use it for illegal activities.
Just look at the stories of darkweb markets they take down. Thousands of sellers, catering to tens or hundreds of thousands of buyers.
There is no other market anywhere in the world using cryptocurrency to that extent.
Aka "I don't know what I'm talking about."
Time to do some research.
Here's the white paper: (pick your prefered language)
https://bitcoin.org/en/bitcoin-paper
Read it over and over again. Then read and understand some commentary on Bitcoin:
https://nakamotoinstitute.org/crash-course/
Then get back to us.
> Getting rid of currency altogether.
Let's get rid of water while we're at it too.
Please, next time learn something before spouting off your ignorance, that's just plain tr0lling... Unless you ask direct questions!
It feels like this is where all the "how to get rich quick" book writers and other hustle bros went and created one giant financial pyramid, which works in quite simple way: - buy bitcoin - tell everyone around how revolutionary it is, so they buy it and what you holding increases in value, then tell them to do the same.
Keep repeating the above two steps through different layers of abstraction, so it's not so obvious anymore.
The other thing that comes into play and makes it grow even bigger is when people see others who made money on this bunch of bollocks, and think that the fact they are rich somehow makes them smart. Then they buy into all of the cryptocurrency platitudes wholesale without stopping for a moment to critically evaluate it.
I think I'm a bit sour, because this whole crypto-crap infested the idea space of decentralisation, which is imho very important step that we should try to take take as a society. Now it's just forever tainted with bitcoin and all the greed fuelled people there, while the decentralisation should be quite the opposite in nature.
You know what would be revolutionary? Getting rid of currency altogether.