Bitcoin and blockchain enthusiasts have been claiming that bitcoin (or etherum) is going to take the world by storm any day now, yet all I ever see anywhere are big claims (revolutionizing payments, disrupting remittance, ending wars, freeing the people, destroying the banks etc, ad nauseam) with very little substance and lots of scams, frauds and dead-end ventures. Dark markets, internet gambling and a handful of other novelty and niche communities can extract genuine utility from bitcoin, and that should continue into the foreseeable future, but the general population just has no use for it. None. Despite all the hand wringing about having to endure the treachery of big banks, pull style payments, and entering long credit card numbers, bitcoin is still harder to use, even harder to keep secure, and without any guarantees, assurances or consumer protections. Bitcoin is an interesting novelty at best, and everyone knows it, even many bitcoin enthusiasts.
Now, in recent months, we're suddenly hit with a bevy of stories about big name financial brands and famous VCs pouring cash and research into the blockchain, and just like that, the goalposts have shifted. This is what we've all been waiting for; this is what will really bring bitcoin into the mainstream, there has to be something big here when you look at all the colossal mountains of cash that have been dumped into the bitcoinverse... yet somehow, we're still at a loss as to exactly how the "x but with blockchains" formula is meant to revolutionize everything. If the 100 million dollar investment into 21inc's vision of putting a bitcoin miner in every refrigerator is any indication of what we're to expect from all this investor cash, I think we can safely assume that what we're witnessing is simply the hyperbolic bitcoin hype machine functioning within normal parameters.
Of course, I'm probably just an idiot who doesn't "get" bitcoin, it's pretty difficult to understand, since even after all these years I just can't grasp the amazing potential of bitcoin. What other explanation could there be?
You're not an idiot -- the things you described are very real. I've heard about tons of scams and quite a few dead-end ventures. The 21inc thing sounds pretty bizarre to me as well, but there is more going on in the bitcoin world than just that.
I'm involved with a VPS hosting company called ChunkHost, and we've accepted bitcoin for many years. We're not criminals, and we don't tolerate criminals on our network, and nonetheless bitcoin has served us well as a means of payment. We've written on our blog[1] about how bitcoin payments are 20-30% of our revenue.
Another interesting company is purse.io -- they let you get something like a 20% discount on your Amazon purchases by paying in bitcoin. coffee.foldapp.com lets you get 20% off your Starbucks purchases by paying with bitcoin. Again, this is not a scam -- I use it and it works. Don't you think this is a real benefit that real people could appreciate?
I'm curious how long you've been following bitcoin. I've been interested in it since 2009/2010, and have seen the goalposts move a great deal: every time a goal is reached, the critics change it so they can declare bitcoin a failure. First it was that "you can't buy anything for it," which was true until a pizza was sold for 10,000 bitcoins in mid-2010.
Then it was "no store accepts it" -- which was true until a few months later when you could buy things like web hosting from tiny bitcoin-only companies. Then it became "no large company will ever accept it." That remained true for a while, but eventually Wordpress became the first large company to do so. Others like Newegg, Overstock, and even Microsoft followed soon after. "Nobody will ever pay with it" was another one, and that was shattered once those companies started posting bitcoin revenue which, despite being a tiny share of their overall revenue, showed that people were consistently spending their coins.
I'm not saying that grandma will be buying gas with bitcoin anytime soon (or ever) -- just that there is substance there: merchants accepting it, consumers spending it, and interesting things like purse.io that couldn't exist without it.
We at prgmr.com started accepting bitcoin recently via bitpay, and I think that a payment gateway like bitpay which allows you to accept bitcoin without actually having to hold bitcoins at any point make a huge difference. In the US, bitcoin counts as property which means you can have a capital gain or loss when it is exchanged later, which can become an accounting headache.
The reason we first started really thinking seriously about bitcoin was because existing customers weren't able to get very many US dollars anymore due to economic restrictions in their home country, and without offering bitcoin they couldn't pay us. As long as these sorts of economic constraints exist, there will be a market for bitcoin.
Let me see if I can give some useful goalposts, ones commonly used with other technologies. Consider the classic technology adoption curve, which is the focus of industry classic "Crossing the Chasm":
Oversimplifying, the Innovators, a few percent of a market, will buy anything just because it's cool. An obvious example there is Google Glass. Or a personal example, I just bought an IR camera for my phone. [1] I have absolutely no practical use for this, but that stopped me for about three seconds before I clicked "buy".
The next group is the Early Adopters. They buy in because they have a significant need not addressed by existing technology and are willing to work hard and/or pay lots to solve the problem. Then after that, we have the Early Majority, the first half of mainstream purchasers.
Now the supposed market of Bitcoin is "people spending or transferring money", which is a large fraction of humanity. So my goalpost would be getting out of the 2.5% of the market that is Innovators and well into the Early Adopters. Let's say 10% of the total market. (I'd even be happy with 10% of some major submarket, but since the claim is that Bitcoin will change everything, I'm glad to run with 10% of everything.)
From that standard, the fact that somebody bought a pizza is not so interesting. Ditto your hosting company; what you folks take in via Bitcoin in a year is about 0.00015% what AWS takes in in fiat dollars, or about 47 seconds of their annual revenue.
Ditto the things you mention with purse.io. Either they are subsidizing that 20% Amazon discount or there are hidden fees; Amazon makes under 10% on what they sell. As we learned in Bubble 1.0, you can't evaluate a business by the amazing deals they are using to acquire customers.
My prediction is that Bitcoin will never get close to the goalpost of 10% of the market, because nobody has found a way to solve a significant problem. My current belief that Bitcoin is Segway for the wallet: a really cool technology that almost nobody actually needs.
Like most disruptive technologies, it's not quite clear why Bitcoin / blockchain are better than incumbents, namely credit cards / centralized databases.
At Purse, we use blockchain escrows to unlock value from Amazon gift card balances. This was previously impossible (gift card exchanges can't transact Amazon), and the liquidity premium powers the discount. Escrows and other complex transactions are difficult using traditional payment systems, and we believe that they can be applied more broadly to many other markets.
Ok, so if I understand you correctly, there are some people who have gift cards and want cash. They're willing to take a substantial hit to do that. And a quick Google search shows that there are plenty of people in that business. But your unique angle is that other exchanges can't handle Amazon cards. Could you say more about why, and how Bitcoin makes that different for you?
purse.io's UI emphasizes the discounts you can get, by having a slider from 0% - 50% when you put in your wishlist. They claim they're just matchmaking with a buyer really interested in Bitcoin, but really, there's no way that 50% discounts on Amazon would ever happen, unless it's money laundering or CC fraud. And even then, 20% is really skeptical.
FoldApp seems to just be subsidizing purchases with VC money for adoption. It doesn't seem to be going well.
So the UI allows users to set a discount rate, similar to the way you set a limit order on etrade or Name Your Price on Priceline. I can place an order to buy AAPL for $100 or bid to stay in a 5 star hotel for $10. Doesn't mean they will get filled.
But they will be filled. By people who are very eager to cash out of some stolen credit cards or need some dirty money in someone else's hands. And, bonus points, in a way that makes the transaction irreversible.
Or, more likely, someone will jump in front of that request for 50% and ask for 45%. Then 40%, then 30, then 20 and then 8%. It's a market.
I do agree, though, that those very high discounts should be a red flag, if they're for any serious money. Stuff for $5 with a 50% discount is no big deal if someone just wants ot be rid of a card and doesn't mind losing a couple bux, which they'd end up paying in fees buying BTC anyway.
German police searched a house and seized stuff for months in one case[1], Amazon reversed gift credit in another[2].
Obviously this is no proof that fraud is rampant, but I still lean toward thinking fraud is too likely for me to want to be involved with using purse.io, especially if I wanted a good deal (big discount = more likely it's a carder cashing out a stolen card.) If nothing else these stories show there's a small chance you might get burned pretty badly. Has anything significantly changed to remove or lessen the risk?
Restrictions on buyers (unverified users are limited, 6 levels), social verification, behavior analytics (sift science), among others. User was made whole, police dropped the case, and we introduced $10,0000 guarantee. Not an excuse, but we were a team of 2 when that transaction happened, and it was 3 months after we started while we were in an accelerator.
"all I ever see anywhere are big claims with very little substance"
Bitcoin is certainly growing. Consider that in 6 years: it went from zero to over 100 000 merchants accepting it (including big names like Microsoft, Dell, Expedia, Newegg, Overstock, etc), from zero to millions of users worldwide, from a market cap of zero to over $3 billion dollars, etc. If someone had predicted Bitcoin would reach these milestones within 6 years when the software was first released in 2009, you would have called that person a lunatic. Yet this happened. Reflect on this for a minute before saying you see nothing.
Bitcoin is a good example of a disruptive technology. If it succeeds, it will happen slowly over time (5, 10, 20 years...) and there will be no special "that's-the-day-bitcoin-won" moment. So don't hold your breath for one.
For example a person in China can instantaneously send bitcoins to his relative living in the US, who can then spend them within minutes on electronics or house stuff on Newegg or Overstock. This is, in itself, incredible. This is fast, reliable, and avoids stupid limits or problems of legacy financial systems, like wire transfers taking days, China exerting capital controls, Paypal suddenly freezing your account because the large amount being transferred triggered a false fraud alert, etc.
Another example: I can't even pay my $2700 monthly rent to my landlord electronically even though we both have checking accounts at the same bank (Wells Fargo), because they limit internet transfers to $2000 a month due to a policy chosen by their fraud and risk analysts. How annoying! Bitcoin lets me pay my landlord without problems because no one is here to tell me how much of my own money I am allowed to spend.
I am not saying that I want to use Bitcoin for every single transaction, eg. paying my lunch at the restaurant, but for certain types of needs like the two examples above, Bitcoin is very useful.
I've seen you make numerous posts in support of bitcoin in the past that are far better than the article you have linked. In fact I find in the search for 'bitcoin plusses' people often put forward contradictory aspects of it, to support their agenda of presenting it in positive light. For example, full traceable, vs. anonymous. Deflationary vs. mine your own. Being a jack of all trades system, "money", money transfer, ledger based, anonymous, store of value and alternative banking system - means that it is internally conflicted.
> For example a person in China can instantaneously send bitcoins
Once they have bitcoins. Getting bitcoins without using local bitcoins requires use of the traditional financial system. It can also involve snake like middle men if the would be bitcoin user is not very savvy.
1. It's fast compared to international transfers, it's a little slow compared to using cash to buy things or bank transfers.
2. It's cheap - it's cheaper than western union, it's expensive when something goes wrong - you can't reverse/dispute transactions.
3. Central governments can’t take it away. Central governments have all the guns and can make up any laws provided they can be passed. Bitcoin is not a runaway success in Russia for example.
4. There are no chargebacks - this is a bug and a feature.
5. People can’t steal your payment information from merchants - they just go after the middle men - instead of TK Maxx getting hacked, one of the middle men will be. Or indeed the middle man runs away with the goods. That the middle men continue to exist points to inherent difficulties in managing your own wallet.
6. It isn’t inflationary - the number of bitcoins minted every year grows faster than inflation - ultimately it will stop. Then it will be deflationary because coins will be lost.
7. You don’t need to trust anyone else - au contraire - in every transaction you need trust, the same is true in bitcoin as any other system.
8. You own it - it works better as a transfer medium than a 'store of value' because the price fluctuates. In addition the network operators can decide to fork.
9. You can create your own money - sure, so can other people - yet somehow it's not inflationary.
It's very difficult to dispute your assertions that Bitcoin currently provides very little utility outside niche markets, that a lot of the investments being made are laughable, and that the shifting goalposts phenomenon is in full effect.
But remember, a lot of things we use the internet and mobile phones for today were envisioned and promised in the late 90s but failed to materialize in a practical, mainstream way until very recently, over a decade later.
Who knows what cryptocurrencies, or the concepts behind them, will mean in another 5, 10, or 20 years. Maybe nothing, maybe a lot. It's still too early to tell.
(I'm skeptical myself, especially in actual currency applications, but open minded.)
> Of course, I'm probably just an idiot who doesn't "get" bitcoin
Two more "idiots" who don't get Bitcoin are Warren Buffett and Charlie Munger. Munger says Bitcoins are "rat poison". It's possible they're just old fuddy duddies who "don't get it". It's also possible that, both being born during or before Herbert Hoover's presidency, that they've had decades of experience sniffing out what's valuable and what's not.
The article makes an analogy with the internet in 1994, which is when experienced technology "experts" such as Bill Gates were dismissing the internet as a "fad".
In my experience, the people who don't "get" it often don't distinguish between Bitcoin itself and the underlying technologies. It would be like identifying the internet in 1994 with one particular web browser, or web site, or startup. The transformative elements in this case are things like the distributed ledger for decentralised trust, the possibilities for automated micropayments by devices rather than people, and so on. For example, as per my other comment on this thread, most of the large finance companies which are investigating blockchain technologies are investigating private blockchains rather than the Bitcoin blockchain, but this distinction is often missed by the press in their reporting (indeed isn't an entirely clear distinction in this article).
what's valuable today, perhaps. Blockchain tech might surprise us all yet. I don't think the possibilities are overblown, just the timeline. It really is a financial solution for a different world then what we currently live in, and only extreme global circumstances can even come close the momentum needed to spark a change such as that in our financial system.
You are not an idiot. You are just underestimating how large the "fraud" economy is, at a global scale. Think SilkRoad, Ponzi Schemes and Capital fleeing overseas.
Bitcoin can be huge in these industries and this can drive it to be huge overall and then it might become successful on the mainstream use.
The other explanation is that people invested in bitcoin want you to jump in order to increase the price of bitcoins.
Anyway, for me the biggest argument against bitcoin is that there is no way that its intentionally wasteful proof-of-work system can be actually cheaper and faster than the alternatives. Currently, this cost is hidden because blockchain maintenance is subsidized by newly-minted bitcoins being handed out to miners. If you take out this subsidy then each bitcoin transaction would actually cost around $10 worth of energy, which probably came from burning fossil fuels in China.
Raising more venture capital in non-inflation adjusted terms, is not the same as growing faster. Those are completely different concepts. Also, adjust that for almost 20 years of inflation, and it's half as much. Not to mention that figure only includes a portion of the total VC raised by Internet companies in 1996, it's intentionally misleading in just about every way possible.
Even comparing the VC raised, in inflation adjusted terms, would be comically simplistic. What were interest rates in 1996?
Beyond that, Bitcoin better grow drastically faster than the Web in 1996: bitcoin gets to ride on top of trillions in investment having already been made into infrastructure and computing. Even if it were true that it's only growing 25% faster than the Web in 1996, I'd say it's moving too slow by a factor of x200.
Imagine the laugh we'd be having, if you were to say that the iPhone today was only 25% larger than the Palm Pilot after seven years on the market, despite all the market / infrastructure / Internet advantages that the iPhone gets to enjoy today.
The "shared ledger" analogy for blockchains is limiting. If you want to understand the potential applications, you should stop using it in your thinking.
Blockchains give us publicly writable databases. Such a thing never existed before. A blockchain has one or more programs that define what can be written to the public database. Bitcoin's program is mostly about distributing the 21 million coins to miners and preventing users from sending more bitcoins than they own.
A blockchain's program can manage any data, though. There are so many human interactions that are governed by private databases—that used to be the only way to do it. The sea change you are about to witness is those interactions transitioning to public databases. Everything will be rebuilt, especially where companies are charging for those interactions, like Uber and Airbnb.
Applications will be able to read from and write to all of the public databases, and they will all use the same cryptographic identities for seamless integration. Every application can trivially have payments built in. Or ride hailing. Or package shipping.
Network effects are public goods, and we now have the technology to provide them in a public manner. Go build something.
It gives you a publicly writable database that is only secured by people desiring to throw away large sums of computation in an environmentally unfriendly manner.
Writes are also slow (10 mins...) and requires relatively high bandwidth and space to be used securely.
There's no reason that AirBnb or Uber would want their database to be public, slower, and broken as soon as people lose interest in splitting up mining.
In fact, the more valuable stuff goes on a block chain, the more people will want to break it in order to be able to manipulate that information.
It's neat how the generals problem can work when the blockchain is for money. If it weren't for money, then why would people have an incentive to throw computation at it? To secure their AirBnb trip? If it's only AirBnb that has such an incentive, then suddenly it's a massively expensive enterprise to do so compared to running a normal distributed database that they control read/writes to.
I agree with you on most points but the idea would be an Airbnb or Uber that don't take a large fee and make a large profit right?
I know this is all wishful thinking stuff but it doesn't seem fair to say this is terrible because companies that exist to centralise transactions within a space won't want it.
You're right that it doesn't seem to work without money though, and if it is a centralised service it's way more expensive than before. It all feels too theoretical when you get talking about multiple blockchains.
Blockchains can be built without 10 minute block times or wasteful proof-of-work for mining. You can just pick people the users trust to make blocks or use proof-of-stake mining.
Blockchains are harder to break than most corporate databases.
Reading up on Ethereum will answer most of your questions.
If your "blockchain" doesn't have a proof-of-work beyond trusted people, that's hardly different than a company publishing their database full of signed transactions.
I'm aware that 10 minutes is a configurable number, but there's a reason it's as high as it is.
I'm also familiar with Ethereum, and I still don't see it as better than a company-run database for anything like uber/airbnb/etc with a central company behind it.
> Blockchains are harder to break than most corporate databases.
Strange, Google and Amazon and many other sites have done just fine with databases (though there are exceptions like Ashley Madison etc) while there have already been real double-spends with the bitcoin Blockchain and numerous other issues.
Proportional to usage, I'd say bitcoin has proven to be terrible compared to databases.
So yeah, citation needed.
Additionally, if you change your mining to be "people users trust", your security is now equivalent to corporate database security -- a lead pipe to the head to get a password in.
> I'm also familiar with Ethereum, and I still don't see it as better than a company-run database for anything like uber/airbnb/etc with a central company behind it.
It's better because no one is taking a cut off of the transactions that the network enables. No one has to approve a new application that uses the network, so every application can build on top of the network. The people own the network, not companies.
This isn't just better, it's better to the degree that the Internet was better than private networks. That difference was world changing, and this one will be too.
> Additionally, if you change your mining to be "people users trust", your security is now equivalent to corporate database security -- a lead pipe to the head to get a password in.
Blockchains have programs that validate transactions. You'd have to get every validator to incorporate a fraudulent transaction. Hacking three financial institutions at the same time, for example, is pretty hard. Ten is even harder.
That's a nice pipe dream. Unfortunately, it's not how Bitcoin has played out in the real world. The Bitcoin network has unfortunately not been owned by the people, but instead dominated by Chinese miners with ASICs. The current low-ball estimate based on public numbers is that Chinese miners account for ~70% of the hashrate -- see https://blockchain.info/pools
As the database gets larger and larger, less and less people can afford the disk space, bandwidth, and electricity, and they will be pushed out by people who can. The current scalability of Bitcoin, with its absolutely miniscule userbase, and incredibly high miner count, can barely scrape past 3 transactions per second. Attempts at trying to fix this have absolutely fractured the community. See BIP101 / BitcoinXT and the resulting blowout, especially on the /r/bitcoin subreddit.
The security of Bitcoin is abysmal. There are major mining pools that don't even bother to validate the incoming transactions, since validating was slower than not validating, and more blocks means more money -- https://bitcoin.org/en/alert/2015-07-04-spv-mining
So Bitcoin seems to be a vehicle for Chinese BTC miners to trade cheap electricity for VC money. Up until everything bursts, at least.
It's also worth mentioning that if anybody was able to get these miners to collude, they could completely crash it if they wanted to. Bitcoin's security is largely based on no one entity having a majority of the network's power.
Etherum has all of the same problems and none of the solutions. The official FAQ even says that we're going to see a tilted hashrate arms race ("AMD GPUs will be 'faster' than similarly priced NVIDIA GPUs") -- https://forum.ethereum.org/discussion/197/how-to-help-secure...
"Bitcoin seems to be a vehicle for Chinese BTC miners to trade cheap electricity for VC money."
I suspect that some of the Chinese BTC mining is simply a way to convert yuan to dollars. That's hard to do from inside China, because the People's Bank of China imposes currency controls.
Back in 2013, it was possible to buy Bitcoin with yuan transferred through the banking system within China and sell it outside China for dollars. That's what cause the big run-up in Bitcoin to over $1000. Then the PBOC clamped down, which caused the big drop in Bitcoin to around $250.
Bitcoin mining, though, is viewed as manufacturing and export under Chinese law. Those activities are encouraged, and subsidies may be available for construction and power. The Bitcoins can be sold outside China for dollars or euros. So, even if the mining just breaks even, it has utility for the owners of the mining operations.
I'm not sure how flooding the market with bitcoin trying to buy USD would drive the USD price of bitcoin up. I think you have something backwards here.
> The Bitcoin network has unfortunately not been owned by the people, but instead dominated by Chinese miners with ASICs.
This is not the ownership I'm talking about. It doesn't matter who gets the reward for a particular transaction. What matters is how many people are validating the transactions to ensure that no one is putting fraudulent data into a blockchain's database. Those Chinese miners that comprise 70% of the hashrate have no power to dictate which transactions are valid and which aren't. If they try to incorporate invalid transactions, they will be ignored.
Something has to validate transactions. If miners don't do it, who else will? Clients run by users won't, because they can't store the 50GB-and-ever-growing blockchain locally. They simply use the SPV protocol, which trusts that somebody else has validated the chain for them.
As you can tell by the bitcoin.org alert, it was a serious issue that miners stopped validating transactions, because lots of wallets blindly trusted the longest chain, which was actually invalid.
The majority hashrate can effectively determine the longest chain, and thus, most wallet implementations out there.
Even if the wallets start doing limited validation, the Chinese miners could always exclude specific transactions they don't like.
There's precisely two (and maybe one) reasons where blockchains offer an economic efficiency. Immutability and/or regulatory arbitrage. When you can buy crack on Google and Amazon, then we'll no longer see an efficiency with blockchains.
Calling it a public database is misleading, it's not really public even the Bitcoin blockchain ins't really public as it's access isn't free (proof of work).
The blockchain that will be used by banks won't be public just like SWIFTNet and other similar banking networks aren't public. What WS and the banks want is a private blockchain to replace the current messaging and clearance systems and services into something which will be cheaper, faster and will have lower intrinsic risk.
Banks, clearinghouses and other similar financial institutions will have access to it and will provide the needed infrastructure to support it, it will allow them to conduct their financial operations at a much lower costs increasing their profit margins it's not meant for you to be accessing it from your mobile phone everytime you use apple pay.
Access isn't free, but anyone can write to it without permission. That makes it public.
Individuals couldn't compete with SWIFT because they had no way to coordinate their actions. Public databases change that. The first phase will be financial institutions using blockchains to lower their costs. The second phase will be financial institutions pursuing new business models around blockchains anyone can access every time they use Apple Pay.
The genie is out of the bottle. Middlemen are no longer necessary for anything.
Again you think that those blockchains will be publicly accessible which is incorrect, they'll have their own blockchains for their own settlement, maybe they'll have some sub-chains in the long run for end-users but still you can bet your house on that they'll find a way to ensure that users can't simply join the blockchain "fully" (e.g. find a way to separate wallets from mining, like BC does with mining pools for example but for another reason) like they can currently with Bitcoin.
And having a non-free access make it non-public by definition sorry.
Bitcoin is moderated by the amount of effort needed to perform certain operation, some take very little like generating your key and address tomorrow they can change that to a point where only the large bitcoin farms could do it would you still call it a public system?
If so so is SWIFTNet sure you just need a couple of billion and to open a bank but hey any one can join....
BTW you see a similar thing today, BC is "complicated" this is why things like coinbase become more and more popular, people don't keep their bitcoins in their own wallets anymore they use a 3rd party mostly in the form of various bitcoin exchanges.
If a "public" based system has already degraded into pretty much a hierarchy what do you think a system designed by the financial sector will turn out like?
That is correct. The major financial organisations currently working on "blockchain technologies" aren't working with the Bitcoin blockchain - they're typically working on private (or consortium) blockchains e.g. for clearing house like functionality.
Yes but the price to write to the Blockchain is so low, a few cents that it's really accessible to everyone. I think Bitcoin is still a very significant development purely because it's completely independent from the existing global financial system.
That's a choice not a fact, not to mention that they can simply block off the blockchain from the internet just like they do with SWIFTNet and other financial networks.
One of two things: I either do not understand Wall Street's obsession with blockchainesque technologies, or Wall Street's obsession with it is totally emblematic of their buzzword-obsessed technology-ignorant groupthink that fried the tech industry in the late 90's.
I'm seeing companies like this pop up all over the place. Blythe Masters's new venture[1], which made the cover of this month's Bloomberg Business, seems to be the pinnacle.
Bitcoin technologies solved some very important problems in the creation of currencies: double spending, decentralization, cost distribution, &c. These are not problems that need to be solved in securities trading. One company running on one platform doesn't have a double spendng problem. Decentralization is irrelevant. And cost is no issue.
Yes, the securities trading industry is wrought with disgusting inefficiencies, and technology should play a central role in becoming more efficient, but I do not see how shoehorning in blockchain tech helps in any way. If keeping track of ownership and transfer of securities is such a cumbersome process, make a company that keeps track of ownership and transfer of securities. Use computers. Use web interfaces. Make transactions publicly viewable. Create robust contract definitions. Remove paper trails. Hire programmers. Pay AWS. But I have no clue how they think blockchain technology adds to any solution here.
>"Bitcoin technologies solved some very important problems in the creation of currencies: double spending, decentralization, cost distribution, &c. These are not problems that need to be solved in securities trading. One company running on one platform doesn't have a double spendng problem. Decentralization is irrelevant. And cost is no issue."
You're thinking of the securities trading of today, which has its roots in the 16th Mercantile Revolution of Europe. Securities are still essentially pieces of paper: stock certificates. If you've started a company(assuming it was a C-Corp) you know this system is shit.
While this is the case, equity markets, for all that's been developed are like rocket ships tethered to the ground.
In the future you will be able to do business globally the way you can communicate globally today. That means not just transacting money, but assets as well. Bitcoin is a system of digital tokens, which can represent anything.
For this, you do need the trustless transactions that the blockchain enables. Would you trust a Russian stock market? Russia has very different ethical standards and very different laws. What if you are declared a persona non grata and your assets are to be confiscated? What if Russia and the United States go to war? What about a Nigerian stock exchange? Would it be reliable? Your reluctance to engage in these markets means entrepreneurs there do not have access to capital.
Math and the laws of computation are the same everywhere. This allows for new types and a level of global commerce that will change the world the same way global communication did.
Bitcoin is way, way more than a currency. It allows assets to flow like email. And that is just the beginning.
Equity markets have the DTCC and registered exchanges. Even though there are some 16th century pieces of paper still around today, actual transfer of equity from one party to another is little more than an exchange notifying the DTCC that a transaction took place, and the DTCC changing a log in its own database moving the stock from one clearing firm to the other. That sounds boatloads more efficient that blockchain already.
There are other security markets that do not operate as efficiently, but to me, the solution looks more similar to the DTCC model, not the blockchain model.
Keep in mind, too, we still do not have any system that reasonably ties bitcoin technology back to a real-life asset. Bitcoin works because it's self-contained. In the world you described, I could have all the necessary ones and zeros to represent an ownership stake in a Nigerian oil company, but that means diddly squat if it's impossible for me to exert control on the company or receive dividends. Nigeria nationalizing the rigs has nothing to do with whether or not I have a claim on it with a piece of paper from an exchange or a cryptographic key. Those are currently real-world issues impairing investment in those regions, not the exchanging mechanisms. Though I do concede, the exchanging mechanisms aren't perfect.
Bitcoin is way, way more than a currency. It allows assets to flow like email. And that is just the beginning.
Bitcoin is not required for that, it's not even very good at it.
Cryptographic signing of assets, asymmetric public-key cryptography, digital certificates, etc are not unique to bitcoin and a far simpler system with far fewer fundamental flaws and third party dependencies could be constructed if you want to track assets and replace paper certificates. Trustless, pseudo-anonymous transactions are significantly less useful than verified identity transactions with reversibility, central authorities, regulation, insurance, etc. There are a lot of properties of bitcoin that make it wildly unsuitable for tracking financial assets (or as a digital currency).
Would you trust a Russian stock market?...Your reluctance to engage in these markets means entrepreneurs there do not have access to capital.
How does Bitcoin solve the problems of world peace and corrupt regimes? A simple rubber-hose attack will render up your key or the computer your coins reside on just as it will any other asset, and other assets can be appropriated whether stakes of ownership are stored via the blockchain or not.
Me too mentality; Bloomberg journos have been extra gullible with regard to BTC. One of them actually had his coins stolen because he showed a QRcode on tv. Like every other journalist these days they'll just print whatever the PR agency sent them.
People pay Nasdaq to make their trades reliable and safe.
Reliable and safe trades can now be done by a swarm of computers running free software, and they only charge a tiny margin over the costs of bandwidth, energy and storage.
How is Wall Street supposed to make money now? They're all trying to find out, and they all need to be the first. Financial profits will be much smaller, and the slow movers will have a smaller slice of a smaller pie.
> People pay Nasdaq to make their trades reliable and safe.
People pay Nasdaq because they have to pay someone. Only SEC-registered exchanges and ATSs can confirm a transaction in publicly listed equities, then the DTC actually transfers ownership. And the amount you pay to transact stock at one of these places is the best deal you could find to transact virtually anything. I can't think of any popular good whose intermediary takes as little as exchanges like Nasdaq take (e.g. to buy $62,000 of Google stock, Nasdaq takes like 50 cents).
> Reliable and safe trades can now be done by a swarm of computers running free software, and they only charge a tiny margin over the costs of bandwidth, energy and storage.
When Nasdaq runs their own software, it's still free, and they pay zero margin over the cost of bandwidth, energy and storage. If you don't trust Nasdaq specifically, then you can use one of the other myriad exchanges and ATSs to trade on. And the existence of all of these trading venues have already pushed margins to an extremely competitive rate.
> Reliable and safe trades can now be done by a swarm of computers running free software, and they only charge a tiny margin over the costs of bandwidth, energy and storage.
Do you have an example of such a market today?
It's actually not NASDAQ that makes trades reliable and safe. Sure, they're involved in many trades, but the more relevant entity in this context might be DTCC [1]. The fact that almost no one here will have ever heard of DTCC before may help illustrate the size of the gap in understanding between the US securities markets today and "Let's use the blockchain to trade stocks for free."
> only charge a tiny margin over the costs of bandwidth, energy and storage.
The margin charged in terms of energy is massive. The bitcoin network can't handle many TPS because each transaction needs significant computational work to secure it.
On the other hand, if I trust my database I can do the tiny work to write it, make sure I've got consensus among my DB nodes it's written, and be done with it.
I'd say that bitcoin so far has neither been reliable nor safe. Hell, if you look at MtGox alone, I bet a higher percent of bitcoin users were impacted than the total number of USD users who have experienced any kind of fraud.
In addition, there was the Nth "stress test" last week which crashed nodes and delayed transactions for hours... yeah, great tiny margin and reliability...
That's not even a little true. The transaction requires little/no work whatsoever. The miners require precisely as much work as there is speculative value for bitcoin. If Bitcoin were worth $10,000 per bitcoin - the energy burned per transaction would be 40 times higher. But that is not to say that the transaction itself required this expense.
Mt Gox had as much to do with bitcoin as it did to do with http. I wouldn't argue with you that centralized databases are way more efficient than blockchains (hence why some nodes went down), but you simply don't understand the basics of what's going on with bitcoin.
The transaction has to be included in a block. That requires proof of work.
As you say, the energy burned should be proportional to the value of bitcoin; if I have 100 BTC then I have a vested interest in mining outside of gaining new BTC -- I also want to protect the BTC&transactions I have from attacks.
The argument that it's okay to spend that amount of money securing that amount of money, however, is nonsensical.
Transactions in traditional databases do take almost no work. There's no thousands of computers computing and discarding hashes just to be able to add and subtract some numbers.
I'll acknowledge that MtGox isn't a good thing to reference here, but the fact of the matter is that bitcoin is rife with things that a regular man would call "unreliability".
I don't appreciate that you immediately condescend that I don't understand anything to do with bitcoin when your response has little substance.
Your response is basically "transactions don't require that energy is burned but energy is burned for transactions" and you have the gall to say I don't understand anything?
Your claim was that there was a 'cost per transaction'. This is easily proved false when you examine the number of transactions in a block. If there were a cost per transaction, some blocks would cost less to produce than others (and/or returning varying rewards to miners. 2. the cost per transaction is directly relative to the price per bitcoin.
As for traditional databases,they are almost always more efficient - I think many of these bitcoin companies are absurd.
As for your pennies reference, I simply don't understand why the cost of a penny is at all relevant. At best, Bitcoin isn't "real" money, and even if it were, I don't know what seniorage costs add to this discussion.
The unreliability of bitcoin may be worth discussing, but that's tangential to your original post. Thus far, I think it's done pretty well in that department considering how new and exotic this technology is.
Your hubris on matters that you clearly don't understand justifies my response, which IMO was fair, balanced, and respectful. Don't rephrase my response unless you wish to misrepresent them, my words stand alone and don't need a tldr.
That's not really true at all. Right now the cost of mining is MASSIVELY subsidized by the block reward, currently to the tune of just under $6k per block. Without the subsidy the actual cost of a transaction would be approximately $4...and it's only that cheap if every block is full.
> People pay Nasdaq to make their trades reliable and safe.
How much of the value people see in Nasdaq is the technical systems that execute the trades?
I'd argue that the technical systems that reliably execute trades are important; Nasdaq would fail if they didn't work reliably, but having a reliable system to execute trades doesn't make it easy to setup a competitor to the Nasdaq, you know what I mean? The technical systems are necessary but not sufficient; the rest of what you need to set up a stock exchange is absolutely huge.
I'll make the analogy of e-bay. I think most people would agree with my assertion that the technical challenges of building a competitor to ebay are trivial when compared with the effort that would be required to get the buyers and sellers to leave ebay and join your new platform.
Of course, NASDAQ has plenty of other assets, such as its ownership of not just one but three of the national exchange registrations (it bought BX and PHLX). Not to mention all the US companies which are listed on NASDAQ (there may be a bunch of places to trade them, but NASDAQ is "home" to Apple, Facebook, etc.).
>They do a good-sized business selling their technical systems to other markets
that's a lot like saying that because IBM and HP, ITC and TCS do a lot of contracting of the outsourced worker variety, their value is in the technical people they hire.
The value is in the connections, the name, the fact that large companies will pay a lot for my time, if they are buying that time from a company like IBM or HP, ITC or TCS, while they won't pay anything for the exact same time sold direct through prgmr.com.
The value is that relationship and reputation. The value is that if you hire those companies and things go south, your boss won't blame you for taking a risk on an unknown brand.
They will still make money the same way, heck they'll make much more money than before because operational costs and inherit risks will be much lower.
Today it costs banks to transfer money for multiple reasons the blockchain can remove some of those reasons but it will never be accessible to you as a consumer.
The blockchain can integrate allot of the stuff that for example SWIFT is currently used for but combine it with services that correspondent banking and clearinghouses provide to facilitate the actual transaction.
This means that if a bank A wants to move money to bank B it will be much easier and safer (from a risk perspective) but it doesn't mean you'll enjoy those benefits just like you can't install a SWIFT gateway at home.
It's not actual blockchains they're finding useful. It's the reasonably robust framework that people are building around it, where they get a whole lot for free and just need to optimise that annoying blockchain bit in the middle. Rather than do all of the crypto, security R&D they would need to do by not using 'blockchain technology' they just turn off the mining and get it all for free.
Why do blockchains need proof of work at all? It seems that this is only to solve the Byzantine Generals problem, not to prevent spam or something like that (which HashCash used).
Given a network where every node eventually communicates with every other node, a vector clock is enough. You can simply have append-only trees! This data structure is ideally suited for distributed applications.
In a smaller network, question about double-spend is simply solved by having a MAJORITY of parties report that they've seen a certain precondition at time A (ie Person X has Y coins) before any subsequent transaction is considered validated.
What is also beautiful about appending to a TREE instead of a ledger is that you can have subsets of the network which care about a particular subtree. You don't need everyone to store everything!
Proof of Work does disincentive spam a little because you can only spam as quickly as the network can incorporate transactions (6tps iirc) due to the slow nature of the network. If the network were more efficient and used vector clocks, you could spam much more efficiently too.
If the majority of parties can decide such things without a proof of work, then a single person can just create a large number of accounts and own the network. You need to avoid the problem of fake accounts somehow. Proof of Work does that and you don't propose a solution.
> Today the Bitcoin network is restricted to a sustained rate of 7 tps due to the bitcoin protocol restricting block sizes to 1MB.
I've heard the number from other sources as being 6 or 7 before too, particularly after the scale tests I believe.
I know there's the blocksize increase debate which will make this comment inaccurate soon.
Also, I believe that a 0 fee transaction will still get processed eventually and, since such a thing is valid, it's not going to stop spam entirely, just slow it a lot.
Proof of work tells you which version of history has the most work behind it.
Imagine you join the network, trusting nobody. All you trust are the laws of physics and computation. You ask everyone you see "What is the current status of the ledger?" People give you different answers.
So you choose the answer that has the most proof of work behind it. This is the one that the world is most invested in.
Hi, I'm the writer who wrote this story. Someone on Twitter alerted me to the conversation. Thanks, Paul Pajo! I didn't get to read the whole thread as I am heading out on a flight today but I just wanted to say that I am coming out with a story tomorrow morning Eastern Time that addresses some (though not all) of the initial question. This is the Forbes page where you can watch for the story. http://www.forbes.com/sites/laurashin/
One thing I will mention quickly is that the main thrust of my story is that Wall Street is interested in using it to make their own processes more efficient. In a developer economies, because or existing systems work so well, we will have a slower road to consumer adoption than developing economies will. One of the sidebars to the story goes into this a little bit. Plane is pushing back from the gate, so I have to go. But I hope hats helpful.
> Express now collect 1% to 3% of domestic credit and debit transactions, generating more than $70 billion a year in fees in the U.S. market alone. “That’s a tax on all payments,” says Wedbush analyst Luria. With Bitcoin that goes practically to zero.
There are and will be also tx fees for Bitcoin.
> Here’s how primitive the infrastructure is now: The Bitcoin blockchain can currently handle 7 transactions a second
That's not an infrastracture issue but an intentional limitation by design.
It's unfortunate this is basically (another) piece on the funding that chain.com recently landed. The article itself has about zip in the way of new content related to blockchain technologies.
> By early 2014 the three had $4 million in seed funding and had narrowed their focus to Bitcoin apps. But they found that the software tools they needed to build those apps didn’t exist and pivoted to building the tools themselves.
> ON A MONDAY MORNING seven Chain.com employees sit in a circle on their Aeron chairs plotting the week’s plan of attack for various projects. The shoptalk is a jargon-fest of “open assets,” “confirmation time,” “UI,” “sidechains,” “federated chains” and, of course, “coins.” Khosla Ventures’ Rabois, the company’s lead VC investor, says he backed Chain.com because it had a nucleus of “10X engineers,” which he defines as “engineers who have the output and insight that’s ten times better than a regularly good engineer.” Elite groups like these, he says, are essential to build tools “so more regular engineers can build applications” for blockchain.
In The Industry, how common is investing $4 million in a company before they have even "narrowed their focus to Bitcoin apps," based on the unproven potential of the founders? What am I missing?
This is my followup story, which answers some of the questions about how we'll end up using Bitcoin, and how people in developing economies will likely deal with it more directly than people in developed economies -- at least at first: http://www.forbes.com/sites/laurashin/2015/09/14/bitcoin-blo...
For all the bubble talk...if there is any sign of a bubble, it is Bitcoin. Bitcoins are completely worthless, they have no value. The price action shows it - they are currently bouncing between $230 and $235, six months ago that was $260, and one year ago it was $400. It is headed to $0.
The smell of scam is all over it. The inventor hides his identity. Bitcoin companies are awash in scams and criminal charges - Mt. Gox, Butterfly Labs etc.
The Bitcoin hype machine can't answer one simple question - why do Bitcoins have any value? They can't give a rational answer to this. You can get a Florida real estate swamp land sales shop, or MLM organization running for a little while, but eventually it folds.
I'm glad to see that two people who have had a long, long history of observing financial markets agree with me - Warren Buffett and Charlie Munger. They've been around long enough to see every snake oil scam under the planet. That's why Munger says Bitcoins are "rat poison" and Buffett expressed similar sentiments.
Incidentally, I knew this when Bitcoin was $460 and even mentioned it on HN ( https://news.ycombinator.com/item?id=6753545 ). Those who listened to me saved themselves from losing half their investment. Soon enough I will be pointing to this post when it halves again to $115-$118.
That's a tautological answer. When a Bitcoin was worth over 4 times its present value a number of months ago, the same answer could be given - "it's worth that because people will pay for that".
I can give a rational answer for why commodities like apples have value, or a gallon of gasoline, or a table, or a shirt. Even houses in 2007 real estate development projects in the outskirts of Sacramento have a rational (if at one time overblown) value. There is no rational explanation why a hashed number called a Bitcoin has any value. A bar of gold had value 4000 years ago, it has value today, and if the concept of commodity value exists 4000 years from now, it will have value then.
As I said, I pointed all of this out on HN before Bitcoins lost half of their value. I'm quite confident they will be halved again from their present value, and eventually hit $0. They're worthless hashes. Your explanation for why they have value would not have me comfortable as someone holding onto such commodities. Warren Buffett and Charlie ("Bitcoins are rat poison") Munger agree with me.
Things don't have value on their own. They have value to someone in some context. Your Apple has value to a hungry person because it can be eaten, it has value to an apple producer, or merchant, because it can be sold, and it has value to a truck driver because it needs transporting.
It's not an intrinsic property of the apple. It is entirely a result of the plans and hopes of those individuals who deals with the apple.
You can of course counter that all value is derived from the hunger of the apple eater, why else would the driver, merchant and producer bother?
And that's where something like Bitcoin could enter the picture. It establish value in the other direction. It has value to the apple eater because it can be used to buy an apple, to the truck driver because it buys fuel, to the merchant because it buys more apples, and to the producer because it buys a well earned vacation trip.
The intrinsic properties of being of a fixed supply, securely transferable, highly divisible and cheap to store and move around makes it useful as an intermediate token of value exchanged.
That said, I do think the high volatility of Bitcoin takes away much of is usefulness as a currency. In this regard it's to much like gold. A future replacement should probably have an elastic supply like the credit based currencies we are used to dealing with.
> And that's where something like Bitcoin could enter the picture. It establish value in the other direction. It has value to the apple eater because it can be used to buy an apple
Right...but this can be said about any commodity. If I own a new iPhone, or a bar of gold, or what have you, it won't take me long to sell those and buy apples. But iPhones, gold etc. have inherent value and use, Bitcoin has no use value.
> fixed supply
most commodities
> highly divisible, cheap to store
some commodities have these properties...like precious metals
> securely transferable
fortunes are wired from bank to bank around the world every day
Gold is a useful commodity. For wiring, for filling teeth, for other purposes. It is also durable, divisible, uniform, portable, and all those things which make a commodity useful as a currency. Bitcoins are not a useful commodity, they are a hash number ultimately. When the game of musical chairs ends, people flock to commodities that have had value for thousands of years, like gold. They have inherent usefulness and value. Bitcoins don't.
1. Gold had value 4000 years ago because it was rare enough that people could use it as a currency, not because it was a useful metal. Incidentally, it's not useful at all compared to steel, copper, aluminum, etc. hence its use in jewelry.
2. Gold has value today because some people are willing to buy it and some others are willing to sell it. I don't see how it couldn't be the same with Bitcoins (or anything for that matters). Can you explain to me why dollars have value? Euros? Drachmas?
3. You repeating that two successful investors said something at some point doesn't mean they are right, and you saying that they "agree with you" doesn't mean you are right. When trying to find the truth, blindly referring to authority is the last thing you should do.
Of course gold has value due to its usefulness. Plenty of electrical equipment is gold-plated. Dentists fill teeth with gold. It has other industrial uses as well.
The value of precious metals are solely due to their usefulness, extending usefulness to their aesthetic, decorative quality as well. The price reflects this over the medium and long term. Of course, an ounce of silver in 1979 and 1981 was $8 an ounce, but for a variety of reasons it hit $40 an ounce for a few days in 1980. Short term price swings happen due to events, or major technological breakthroughs, but over time, price reflects value and utility.
> Can you explain to me why dollars have value? Euros? Drachmas?
Until 1971, dollars (and other currencies) were explicitly exchangeable for gold. Today they're implicitly backed by gold (or whatever commodity the US government can drum up).
Can you explain why the USA holds thousands of tons of gold in Fort Knox and other places? What is the purpose of the expenditures to hold all of that gold? There is only one answer - to put a floor under the value of the dollar.
Bitcoin does not have thousands of tons of gold propping up its market cap.
The industrial value of gold is far below its trade value.
And the value in jewelry is largely due to its perceived cost - otherwise any number of alloys that look the same would have just as astronomical cost. Just look at diamonds where nearly the whole retail value is based on de Beers marketing and industrial diamonds are in a different class.
> The industrial value of gold is far below its trade value
Huh? Don't supply and demand meet at price? Isn't that mainstream economic theory?
If the price of gold went over its industrial value, or electrical coating value, or value as a tooth filling - then, as mainstream economic theory goes, demand falls as the price rises. The fact that wire manufacturers, dentists, industry etc. buy gold shows that it is trading at its proper value - when they want to use it.
Yes, the price of gold or any commodity can go above its real value for a short period of time, even for a few years. Eventually it always goes back to its utility price though.
> de Beers
I don't disagree that monopolies can fix prices for years, even decades. We can throw in Verizon/AT&T prices for mobile or land lines. Electrical companies. And so on. Yes, monopolies do throw off prices and values.
> > The industrial value of gold is far below its trade value
> Huh? Don't supply and demand meet at price? Isn't that mainstream economic theory?
Supply and demand have nothing to do with inherent value. You said it yourself: supply and demand meet at a price. I can personally value gold at $0, yet can resonably expect to sell it at a higher price tomorrow than I could buy it today.
Have a look at palladium. That metal has even higher industrial value than gold, and is rarer. Yet the market price per ounce is drastically lower than that of gold.
I suspect you're being deliberately ignorant to why Bitcoin, a fixed quantity commodity that is immune to counterfeiting, has value.
You're confounding physical utility and symbolic value. I don't have a problem with Bitcoin becoming a wild success or another case of Tulip Mania. I do have a problem with your feigned ignorance just so you can maintain your initial position.
You're doing yourself a disservice for life. There's no shame in understanding a concept more and discarding misconceptions.
> I suspect you're being deliberately ignorant to why Bitcoin, a fixed quantity commodity that is immune to counterfeiting, has value
A word in your sentence contains the answer to your statement. Commodity. I do not think Bitcoin is a commodity. Commodities are what I can go down to the store and buy - apples, flashlights. Maybe go to another store and buy a bar of gold. All of these things are useful. Precious metals like gold even have properties which allow them to be good currencies (portable, divisible, durable, uniform...) Bitcoins are not like these commodities - they are not consumed! Commodities are.
> You're confounding physical utility and symbolic value
I would not want to conflate the idea of arbitrary utility and the standard price and exchange value of a commodity. Obviously they are different - as someone else alluded to, an apple has more utility to someone who is very hungry than someone who is not.
> There's no shame in understanding a concept more and discarding misconceptions.
As I said earlier - I said right here on HN back when Bitcoin's price was twice what it is now that Bitcoin's price would crash to $0. That is what "maintaining my initial position" is. So far my prediction has been going in the direction I envisaged! Who should be understanding concepts more and discarding misconceptions, me who knew Bitcoins would lose half their value, or those who were hyping it back then?
Making a value immutable instantiates trust in a system. Systems that have trust in them are, historically, worth more than untrustworthy systems.
Blamers, like you, spend most of their time trying to convince others what to do based on biased arguments. Biases are cheap hacks/workarounds to establishing human trust and have no value to anyone, even if they did listen to you.
The intrinsic value of bitcoin (if this matters) is immutable storage. You see this utilized with projects such as counterparty. The non-intrinsic value of bitcoin is the ability to engage in censored commerce. (backpage, wikileaks, silk road, etc.)
> The intrinsic value of bitcoin (if this matters) is immutable storage. You see this utilized with projects such as counterparty.
I have heard people talk about the storage aspect of Bitcoin as having value before, and it's probably the best argument for Bitcoin having any inherent value whatsoever. You're making a more intelligent observation than most of the people in this thread.
That said, Bitcoin has a $3.4 billion market cap. Litecoin has a $119 million market cap, and even the joke crypto-currency Dogecoin has a $12 million market cap - and they can be used as storage mediums as well. As a storage medium, Bitcoin would be way overpriced. It's price is due to the other points I mentioned, mainly the hype.
Now, in recent months, we're suddenly hit with a bevy of stories about big name financial brands and famous VCs pouring cash and research into the blockchain, and just like that, the goalposts have shifted. This is what we've all been waiting for; this is what will really bring bitcoin into the mainstream, there has to be something big here when you look at all the colossal mountains of cash that have been dumped into the bitcoinverse... yet somehow, we're still at a loss as to exactly how the "x but with blockchains" formula is meant to revolutionize everything. If the 100 million dollar investment into 21inc's vision of putting a bitcoin miner in every refrigerator is any indication of what we're to expect from all this investor cash, I think we can safely assume that what we're witnessing is simply the hyperbolic bitcoin hype machine functioning within normal parameters.
Of course, I'm probably just an idiot who doesn't "get" bitcoin, it's pretty difficult to understand, since even after all these years I just can't grasp the amazing potential of bitcoin. What other explanation could there be?