At present, this global computer is very weak. Cryptocurrencies are a good first program to implement on this computer because each transaction is essentially just adding and subtracting a few numbers. So yes, in some sense, it's crazy that the cost of adding and subtracting a few numbers costs $20.
However, even though these global computers are currently very weak computationally, the new computational model allows for new things to be built. For instance, smart contracts. Using smart contracts and cryptocurrencies, you could easily implement almost every facet of the global financial system. From bank accounts, to money transfers, to bonds, to securities, brokerage services, margin services, options, credit default swaps, etc. Yes, many of these things can be implemented some other way, but blockchains allow anyone with a computer to build something along these lines.
And yes, it's nice that the Eurozone regulated free money transfers. But how much work went into building the Eurozone and passing the required regulations? What if you want to write your own options contract? How long would it take to get regulation passed in the EU to allow free options contracts? Blockchains allow you to build a system akin to the entire EU banking infrastructure from your laptop. Even if it's not quite as good as the current system, I think it's still a cool idea.
Any fraudster that wants to!
There are more reasons than technical why such things are limited.
> The existing Visa credit card network processes about 15 million Internet purchases per day worldwide. Bitcoin can already scale much larger than that with existing hardware for a fraction of the cost.
If the original design of Bitcoin anticipated Visa-scale transactions for a fraction of the cost, what's the motivation for a L2?
I'm assuming Nakamoto wasn't being cheeky when he wrote fraction of the cost. Afterall, 1000/1 is a fraction...
I could just as easily come up with a post hoc story that says that the reason that he has never come forward to claim credit is out of extreme embarrassment about the size of the fortune he lost, and that this is evidence that he does care about the money.
The entire conversation started because someone pointed out that just because Satoshi said something doesn't mean it has to be true (although they made that point in a rude way.)
The vibe I am getting from your responses is: 'satoshi is a saint, everything he said has to be true, and any attempt to point out that we have little evidence about Satoshi's character is a baseless smear.'
I am sure that is an inaccurate and unfair characterization of what you are trying to see, so please correct me as to where I have it wrong.
I thought you were defending the a comment claiming satoshi was being malicious. I would've done better to search for a more charitable interpretation.
If Satoshi did stretch the truth or lie in that quote, I would be inclinded to view it as motivated by ideolatry rather than greed. However, any speculation as to motives is fairly pointless given the lack of information.
For all we know, these coins have already been "burned"
like I said, the best you can do is burn the private keys, but that isn't verifiable - you can't prove something doesn't exist
The leading L2s on Ethereum are rollups, which store all transactions on chain in compressed form.
the TAM is 400+ trillion.
Payments are low margin, low value business. Often even subsidized by the systemic banks.
Do you really think it costs zero to secure the entire GDP, and the entire wealth, of an entire economy? zero cost SEPA transactions don't secure the EU economy. The US military and their nuclear weapons do, and they don't cost zero, like a SEPA transactions for a coffee.
What's the cost to secure 10 trillion? 100 trillion?
What do you mean by that? Backing?
The point is that money is not wealth. Wealth is the ability to consume goods and services. If you got stranded on a deserted island with a suitcase full of millions you'd still live in extreme poverty despite all your millions.
Therefore securing crypto-currencies doesn't replace the need for securing actual wealth. On the contrary, it's an extra cost that its users have to bear, in addition to the costs of securing GDP and the entire economy.
The suitcase, stuffed with medium of exchange, holds value across time.
This is the key concept to understand the issue at hand.
For a medium of exchange to become useful, it must first become able to hold value, preferably long term, months/years.
The only way an asset can do that, if there is demand to hold the asset for long durations, committed long term investors.
Bitcoin is an experiment in bootstrapping a neutral money system from scratch.
If you look at bitcoins money velocity, it’s much closer to M2, than M1. Thus comparing it to investment assets, or bonds, is much more relevant today than to payment systems. It’s a store of value for now, maybe a little speculative, sure.
Once it grows large enough and value becomes more stable, it can become a decent medium of exchange then.
This implies market capitalisation in many trillions, and if it proves to be successful: displacement of many other store of value. Negative yield bonds, gold. Maybe even real estate and rental yields on that are actually negative in real terms in many markets. We will see.
As such it would represents a cloud economy of sorts with large amounts of wealth stored in it, trillions of dollars. That would require a correspondingly sizeable security budget to protect.
Regarding the question of bitcoin's utility as money. The defining trait of money is that it's used widely as medium of exchange, not that it holds value. An asset has to hold value reasonably well, for it to be able to be used as money, but holding value is not what makes an asset money. Some assets depreciate quickly and don't hold value, but most don't, most assets do store value and yet are not money. Is bitcoin a good store of value? No, it isn't, because a good store of value not only has to hold value over long periods, it also needs to have low volatility. Using a high volatility asset such as bitcoin as a store of value, means there's a big chance you may forced to sell it at times when its market price is well below your purchase price.
Lastly, I don't know what "bitcoin's velocity" is. As far as I know, the velocity of money is a concept from the Quantity Theory of Money. The basic assumption that this theory makes is that GDP is sold and paid for with money. If you wanted to apply QTM to bitcoin, first you'd need to locate a country that sells its entire GDP in bitcoin, and only then you could calculate bitcoin's velocity, in principle. This velocity would be specific to this country. Then again, I'm not aware that such a country exist, so I don't know what you mean by bitcoin's velocity or why it is relevant to this conversation.
In theory. Many banks are not using this system and stayed on old SEPA wire transfers: charges split between sender and receiver or covered by sender, 3 work days to process, ability to pay more to speed-up the process by two days etc. It's slow and/or costly.
If we get to cherry-pick from whatever money transfer systems exist, it's worth remembering that bank transfers within the Eurozone area are free and practically immediate. What crypto can beat that? Clearly you don't need cryptocurrency to deliver a service that's ideal for consumers, as regulation has achieved it in Europe.