Maybe everything is in an economic bubble right now.
If you work in a big city and look around; there are tall office buildings everywhere; packed with millions of people. But what do these people actually do? Is that an efficient use of their time in terms of creating value for each other?
Maybe cryptocurrency is a bubble, but maybe also everything else is a bubble. Companies like Snapchat are worth billions of dollars, but they lose billions of dollars each year. At least most cryptocurrencies don't lose money (except some of them due to electricity costs).
Even companies like Facebook which are themselves profitable are deriving most of their profits by providing services to companies that are unprofitable.
Maybe the total value of all cryptocurrencies isn't actually going up, maybe it's the value of everything else around it that's hyperinflating. Maybe the current system is just begging to be dismantled.
> If you work in a big city and look around; there are tall office buildings everywhere; packed with millions of people. But what do these people actually do? Is that an efficient use of their time in terms of creating value for each other?
Thank you. The whole system is people running in empty circles. Most people are not doing anything useful or out of value for regular folks (housing, utilities and transportation). Even worse, we are consuming lots of resources and human time and yet (many countries) still can't solve the basic problems: decent food, affordable and acceptable housing, functioning transportation.
I'm in a city block where there is lots of "call centers". Their target is stupid, old, or ill people from the developed world. They make money "legally" from getting these people to call them on expensive lines. It's a multi-million euros business. It's fueling the whole block (real estate, food joints, coffee shops, accountants, retailers, etc...) Many of these are relying on these call centers.
The whole block is a scam. Albeit a legal one. And albeit some guys (like a food joint) has nothing to do with it.
The whole economy is something like that. Universities, hospitals, consulting, advertising, and the big one "Government" and its army of bureaucracy buildings and stuff.
The whole system is bankrupt. Bitcoin is an open system that is showing the true color of humans and greed. We are fueling crypto because that is what we are. We are just getting more efficient at it thanks to technology.
Can't tell if serious but here's a reasonable way to think about things:
In human civilization there are really two categories of things: Services for survival, services for comfort.
Services for survival breed so much commerce: Food, Medical Research, Doctors, Medicine, etc. Suddenly you need to move the food; automotive. Suddenly you need to convince people to take chances (loans + big payout). Eventually when people have more than they need they would prefer to get comfort.
This is obviously a very oversimplified view of humanity and economics, but the reality is that we're not just running around in circles.
Bigger population #s breeds bigger logistical problems. Some see problems and inefficiencies and try to improve upon them. Etc. Seriously imagine getting rid of all these logistical services and supporting services, you wouldn't be able to feed, cloth, or heal a giant population well. We have examples, hell look at India and their structures. Look at Syria.
BitCoin cannot become a currency. It is literally impossible. The ability to have many billions of transactions a day is a prerequisite for a currency. There can be no delays, no fees. Imagine if every time that I went to a store and paid a dollar for a pack of gum I also had to pay a fee associated. Note: Taxes are different, they are fees that go back into society, not a mechanism to profit off (save the corrupt government debate for later). Imagine if my friend asked for $20 I also had to pay a fee. Imagine if that also took like 1 week to process. Not practical.
Cash (or currency) is important because otherwise I'd be trading raw beef for ipads because of what commodities I have.
Now, not to say every industry is necessary. Call centers like you describe are a predatory commerce, but these things do happen, and hard to eliminate humans taking advantage of humans, it is in our nature. If it won't be call centers it'd be another thing.
> Imagine if every time that I went to a store and paid a dollar for a pack of gum I also had to pay a fee associated.
I agree that Bitcoin is unlikely to find utility as a usable currency, but this point rings extremely hollow, since buying a pack of gum with a credit card incurs a flat inquiry fee as well as a percentage of the sale, as does giving your friend $20. ATM transactions usually have fees associated as well.
I agree with most of your other points, but there's a pretty wide gulf between trading beef for ipods and the maximal cash utility of cryptocurrencies, and there's space for a more transactional crypto with more reasonable fees and processing times to disrupt the 2.5% + $0.30 credit card industry.
I think the poster is talking about BTC as a currency there, not a payment method. When talking about it as a payment method, sure there are fees and processing times. But when just handing your friend $20, or buying gum with cash, not so much.
Over here in Europe, FYI, most ATM transactions don't have fees (if you use one run by a bank anyway), and sending money to your friend by direct bank transfer is also free.
It's important to note that while you may not see a ATM fee, there is one inherent to running the network and machine. Typically the owner of the machine will charge the bank/network for the transaction.
In the same way, when you transfer your money to your friend 'for free' using a direct bank transfer, it might be free to the user at the point of use, but it's being paid for somewhere, indirectly.
When I pay for $20 of groceries with a credit/debit card, someone is paying a transaction fee somewhere. You don't see that as the end-user, although you may be aware of it.
In a similar vein, consider that cash costs money to design, print, enforce anti-forgery, replace over time etc. All costs that have to be borne by the system that should be considered if you're going to compare 'giving your mate $20' vs. 'giving your mate some BTC'.
I think the issue may be that while a grocery store certainly has a payment processing fee to receive $20, they have fees on top of BitCoin. So BitCoin adds to these fees. And the existing fee is very small, between .25-5% for cash/cc while BitCoin is much higher.
There are no fees for me to pay my friend.
I don’t know if you remember the olden days when PayPal was mainly for paying your friend $20. It was slow and cost a lot so not very cool. There would be fees just to send your friend money. This was bad.
While “giving your mate some
BTC” is possible, the amount lost to fees is pretty lame.
It's true bitcoin cannot become a global currency. The core devs are employed by blockstream. Blockstream doesn't want bitcoin to succeed. They want to implement the LN because can profit off it more than from bitcoin. The Lightning network is independent from bitcoin any currency can implement it to support atomic swaps at which point it no longer matters which currency you use.
Bitcoin cash is a fork of bitcoin because blockstream opposed the 2x blocksize increase which would have solved bitcoins current problems. Bitcoin cash has now a 8MB blocksize and can process significantly more transactions. Increasing the blocksize up to 1 Gigabyte is practical today which would result in a transaction rate in the order of of 7000 transactions per second.
If we assume every human on the planet makes 50 transactions per day it would require terabyte blocks which are still feasable with current technology but it would cost roughly 26million per full node over 20 years. The expected fees of half a cent per transaction would be enough to fund at a minimum 300 of these nodes.
The blockchain can scale. Bitcoin can't. It's 100% speculation until LN arrives but even then bitcoin might become irrelevant
You seem to have a bias against bitcoin. I didn't mention bitcoin is becoming a global currency or even a currency. From my experience and entourage, most people involved in bitcoin are interested in doubling their money and not in changing the system.
My point is: as the system sophisticated, we are turning more resources toward bullshit and fake employment rather than real issues. You can't find decent, healthy food in the city center (which is affordable and doesn't cost a fortune). You can't find reliable housing in the city center too.
You can't find amenities in the suburbs. So you either pay too damn high rent or drive for longer hours. But you can't get to your location in time because we haven't been building reliable transportation or upgrading roads. Instead we are spending money on other stuff and to support countless counts of bureaucratic armies.
This certainly differs from country to country. Some countries are more efficient. Some countries are a blackhole of public money and social workforce.
> You can't find decent, healthy food in the city center (which is affordable and doesn't cost a fortune).
I'd say you can; we're spoiled like that, in that we take for granted that food should cost a fraction of our income. Historically speaking, the income was barely sufficient to cover food. What you're saying is that you can't find cheap sophisticated food and exotic items... yes, that's right, but you never could. We're improving on this, we're not getting worse...
> You can't find reliable housing in the city center too.
It's unclear what you mean by "reliable". For the right price, yes you can, most definitely. "The city center" is by definition a finite resource, so a limited number of people have access to it; if the city is very desirable, some people will always be outpriced (at least, for as long as we have a physical presence/ as long as the "limited number" constraint stays true).
My point is: as the system sophisticated, we did solve a lot of issues (not all, but that's to be expected). Did the bullshit increase? Yes, but so did everything else. And I'd much rather see an increase in bullshit than in, say, war. "Panem et circenses" - you have to keep the people occupied so that they don't become troublemakers. If you can find a reliable way to transform a bullshit occupation into a productive occupation, I'm pretty sure you're going to get extremely rich. This is a hard problem - we're not doing it because we don't know how to do it any better than we currently are, not because we don't want to.
Check out "Debt: The First 5000 Years", which puts forth decent reasoning that the "barter -> currency -> lending" path is not accurate but rather a bad post-hoc analysis of what we think might have happened that is based off of "what if modern society didn't have currency", as opposed to "how did real societies before currency look".
From that basis, it suggests a likelier path of "local lending -> currency", i.e. that a straight up barter system never existed in ancient societies, and instead a notion of "who owes whom" was publicly known in small tribes and while those with the power to enact violence often had the ability to demand things somewhat disproportionately, most people did a good job of assessing what stuff to give, what people to give it to, and when to do so, as a moderate sized socialable semi-cooperative set of families with common interests might be capable of just... knowing.
When tribes began trading things to each other at scales too large or untrustworthy to keep track of by memory, the simple innovation of writing it down in some form would often occur, which is the birth of currency, long after the notion of indebtedness, and other innovations of abstraction and regulation and such can build on top of that over time to create the modern concept.
This doesn't really speak to your major point that a modern currency must support a large number of transactions/minute with low or no fees, which I agree with and agree Bitcoin seems (for now) ill-suited to handle; I've seen suggestions (on a paper linked on marginal revolution I think) that Bitcoin makes more sense as an asset to hold like gold or stock than it does as a currency, because its transaction fees, timing, and (for the moment) growth characteristics strongly incentivize not spending it.
But what I was saying was that currency is not important because "without it we'd all be bartering", rather, it's important because "without it we would need to trust and know everyone we deal with every day well enough to track all our mutual indebtedness mentally", Which is plainly impossible in today's world!
Currency needs to have few reasons to hold onto it rather than use it, and needs to be able to be exchanged quickly between any pair of actors regardless of external state. Cash is great for that, credit cards are getting there (me->business is good, business->business and business->me and me->you all much less so), and Bitcoin is a long, long way off.
To tag some more weight into this very long post: my personal bet is that networks of micro-applicable cryptocurrencies (say, "Toronto Downtown Ethereum") in a network-system like Cosmo that settles debts across multiple blockchains quickly and efficiently will approach the use-case of cash, with the properties of local, highly scalable, and low-fee transactions. We'll all be using baskets of currencies all the time, basically, but with that fact abstracted for most people down to card or phone tap actions. Some professionals will still care which currencies, and how they operate, but they'll be a bit like forex traders are today.
To make this prediction interesting, I give it a 15% chance at being reality somewhere within 3 years, a 50% chance in 5 years, 80% in 10 years, and 20% chance it takes longer than that or never happens because new technology/events make us skip/avoid it. (these averages obviously must accumulate the earlier cases within them where needed.)
The thing to note, just like governments, food distribution, and web requests: all things have limitations on scale. Governing 20 people and 200 is vastly different. And 200 and 2000, and 2000 vs 20000. Etc. The bigger the scale, the harder the problems.
BitCoin is only solving the decentralization aspect of currency, but is not solving the other aspects. And without a strong backing of it, we can see the price fluctuating wildly.
"I want to retain my own identity. Therefore the thing I’m most anxious to avoid is any kind of work that can be considered ‘interesting’ in its own right. I want something that can’t possibly touch me. I want some big, swollen corporation that’s been bumbling along making money in its sleep for a hundred years, where they have to hire eight guys for every one job because none of them can be expected to care about whatever boring thing it is that they are supposed to be doing. I want to go into that kind of place and say, Look. You can have my body and my nice college-boy smile for so many hours a day, in exchange for so many dollars, and beyond that we’ll leave each other strictly alone."
- Richard Yates, Revolutionary Road, 1961
I don't wanna go dig through my copy to find it right now, but there's also a pretty long bit where he describes how most of the "work" that most of the "workers" at his (the character, Frank Wheeler's) firm do is making brief comments on various proposals or memos or whatever then sending them off to other people for their comments, trying to avoid being caught with the hot potato and actually having to do whatever's being proposed. They're all very good at it.
a lot of these people sitting in these big building, read a lot of hacker news if they are experienced engineers, browse facebook if they are young/new hires, read WSJ/Time if they are business folks or read Quora if they are having a mid-life crisis. [Based on real data on walking around the floor 10 minutes back] :)
You know what the nihilist in me would like to see? Derivative contracts on the future worth of instagram models and YouTube stars traded using BitCoin. Maybe even derivatives on top of derivatives, such as swaps on "prime" and "sub-prime" tranches of YouTube stars :-)
The entire process would be confusing as hell to most folks, who continue to exist in denial that most modern "work" is already a surreal effect of the networking of human beings enabled to an exponential degree (exacerbated?) by technology.
The Unabomber must be laughing hard in jail, reading today's news headlines.
> If you work in a big city and look around; there are tall office buildings everywhere; packed with millions of people. But what do these people actually do? Is that an efficient use of their time in terms of creating value for each other?
If you enjoy your current standard of living, then the answer is a clear, resounding "yes". You wouldn't be able to post on HN without the time investment of the people who created your browser, or maintain HN, or provide and maintain the infrastructure you use to post.
> Maybe cryptocurrency is a bubble, but maybe also everything else is a bubble. Companies like Snapchat are worth billions of dollars, but they lose billions of dollars each year.
That's an arbitrary example that supports your argument, but is not representative for the general economy -- in fact, it's entirely the opposite.
Now compare your sentence to one where I substituted Apple for Snapchat:
> Maybe cryptocurrency is a bubble, but maybe everything else isn't a bubble. Companies like Apple are worth hundreds of billions of dollars, and they make tens of billions of dollars in profit each year.
Apologies, but Crypto notwithstanding, your whole post about "everything" is nonsense. Just because value is not immediately obvious to you personally, it doesn't follow that this value is zero. Just because you see a bunch of tall buildings and people in them and you don't know what they do, it doesn't follow that there is no value to what they do. I'm tired of hearing this point, it's like a cockroach that keeps coming back again and again.
This brings to mind the quote often deployed against climate-change deniers: "Your inability to understand science is not an argument against it."
The whole 'truthiness' aspect is mildly surprising to see on HN ("It feels right, so it must be true", and usually it applies to others - never the poster or their organisation.)
Maybe you need some exposure to the inside of these buildings. You will understand what the parent poster is talking about before long. There are literally people employed to undo the work of other people in places like that.
'But what do these people actually do?'
Awesome. Thats exactly what is in my head for so long.
I myself go to one of these offices, and yes I do sh1t which produces no value, only money for my company. We get paid by another company doing sh1t.
I spend half my live learning to code. And now I code shitty forms and buttons which will get thrown away and replaced in 5 years by the next guy doing the same.
That's pretty negative. If someone is willing to pay you money, by definition your work has value for someone. Keep in mind that value is subjective. Creating anti AIDS medicine would probably be considered work of value by you? But it's not to me, at least not now.
I don't know. If you pay Sisyphos to roll a stone uphill once a day, does he create value just because you pay him doing it?
My definition of value may be opinionated, but recreating the same software again and again, based on an outdated stack and thrown into garbage has no value for me. Maybe it's different somewhere else. But where I live most coders do exactly this.
Who pays Sisyphos? Another Sisyphos who is just doing his job or following societal norms once created by Sisyphoses who are now long dead. Every individual Sisyphos is rational, but the whole system is not. I am not saying that such a system is objectively bad or anything, but it's an interesting observation and worth keeping in mind when making decisions or arguing.
Because I want to demonstrate "growth" to investors by hiring as many employees as I can afford, whether or not I actually have something for them to do.
The central concern of The Myth of Sisyphus is what Camus calls "the absurd." Camus claims that there is a fundamental conflict between what we want from the universe (whether it be meaning, order, or reasons) and what we find in the universe (formless chaos).
Why would you? This example isn't realistic. It just shows value isn't precise to any single example, but an expected outcome over time; individual value judgments aggregate over the population to give a "true" metric of value.
What value isn't created directly by Sisyphus, could be created in the fact that Sisyphus is willing to provide a service without finding any personal value in it. The freedom to do things without demonstrating its value, itself has value.
> has no value for me
Inefficiencies are opportunities. Can you sell the same stack over and over again?
It's negative, but it's true. The fact that you get paid is a poor way to assess the value of your work. In my opinion, the real question is, what positive societal impact does your work bring about? Are you forgoing the opportunity to make a better contribution to society for the comfort of a steady salary (albeit with little personal satisfaction)?
My priorities are to ensure the health and comfort of myself and my family. If "the comfort of a steady salary" appears to be the best way to achieve that, then I will be happy "forgoing the opportunity to make a better contribution to society".
If my work can help society at the same time then that's fantastic, but as long as it allows me to provide for those closest to me then, for me and my family, my work is the most valuable use of my time possible.
The nominal value of your contribution is high (my original comment was not meant as an insult), but imagine a world where it can be higher still. And you get personal satisfaction, and you contribute towards a higher goal, rather than just ever growing cycles of consumption. Surely you would prefer that option if it was made available to you, no?
Are you saying no one will have to build houses? No one will need to build roads? No one to drive the trucks? No janitors or waiters/waitresses? Arguably these things just fuel the cycles of consumption. They are actually just as societally impactful as say Elon Musk. Without these things society breaks down. You may not feel like you are contributing as much as you can, but if you look at it you might be contributing more than you think. I feel that way sometimes, but I know insurance is necessary for society and without it who knows what would happen.
Absolutely and I do see the value of anti AIDS drugs, that was not the point. I'm saying value is a subjective thing. Something does not have intrinsic value, things have value to people, and sometimes something is valued so broadly that it is of value to society at large indeed.
It is of course nice to have work of which you personally value the output. But in your case, someone else values your output and pays you to produce it. Calling your work "without value" is thus a bit strange to me.
How do you determine what "value" is? It's all subjective isn't it? What metric do you use for "positive societal impact"? Perhaps someone devoutly religious would consider religiosity as "positive", for example.
If someone is paying you, you might be contributing to their definition of value. The money you earned are stored tokens of recognition of that fact, that can be traded to persuade others to contribute to your definition of value.
I must say I find it very hard to wrap my head around that you would say that the creation of a medicine to cure a real disease is not a work of value.
But there is value for him as he would have quick access to medicine if he ever gets AIDS. Of course someone who as AIDS values the medicine more but saying there is no value for him seems very short sighted.
The point is, everyone cannot be working on creating AIDS medicine. Someone has to be working on things that, say, cheer up the person working on aids medicine when she hits a wall.
Sure but these all have values then. His point was to show that AIDS medicine has no value for him, but it actually does. He can't use that argument to prove that value is subjective considering that it actually does have value for everyone.
The entire system is a scam. Inflation and debt are designed to subjugate people to the state from cradle to grave, and to create an orderly and contained society that preserves the power and status of a privileged few. It doesn't just seem like people are spinning their wheels, they are doing exactly that. People who are paying off their mortgage and worrying about their student debt are literally enslaved by this system. Bitcoin is important because it has shown us that we can create value and engage in commerce without the state. I think this will be an important historical artifact, because it points to the possibility that we are rapidly developing a radical new way to organize people.
It's sad to see this text in gray, but given that the audience here contains a disproportionate percentage of entrepreneurs, I understand why it is. Your point about crypto technology empowering decentralized trust systems to "organize people" is a valid one, and I hope to see more of it myself.
The counterpoint would be that there is a huge amount of 'real life' happening within the confines of the system as you describe it, and many people are not so negatively affected as you might think.
Underneath it all, yeah, a great many aspects of how we do things are arbitrary, horrifically inefficient kludges with overly externalized costs that would be replaced immediately on a more level playing field... but solving the problem of 'greed at the top' is possibly the biggest and most difficult challenge we face as a species, and I don't think it makes you a bad person to decide you're not up for spending too much of your brief existence fighting against it. Enjoy what you can while you're here, sometimes that's the most effective way to brighten the world around you.
"The Matrix is a system, Neo. That system is our enemy. But when you're inside, you look around, what do you see? Businessmen, teachers, lawyers, carpenters. The very minds of the people we are trying to save."
Are you a beneficiary of this system? We aren't very good at thinking on a large scale as a species, and most of us on Hacker news are in some way beneficiaries of the system, relative successes. However, there is something deeply troubling about the social and economic structures that are currently pervasive. I don't think you or anyone else is a 'bad person' for not fighting against the way things are, but I personally believe there is a better way, and we have the tools now to find it.
I guess as the necessities of providing food and shelter require a progressively smaller percentage of the workforce more people will occupy themselves with less fundamentally necessary things like building websites, apps and cryptocurrencies for each other.
Or maybe there’s just a tech bubble that snapchat is at the forefront of.
In New York for example, most of those tall buildings and millions of people have withstood the test of time, numerous decades, snapchat and cryptocurrencies have not.
> Is that an efficient use of their time in terms of creating value for each other?
Yes. Value is largely subjective. This underpins supply and demand. Things that are in demand are valuable to us, and what's in demand is often subjective.
So although you or someone else may not value things like Snapchat or Facebook, society in the aggregate does. Much in the same way that gold, bitcoin, or a rare painting is "valuable". It's valuable because someone is willing to pay for it.
I agree somewhat. I think a lot of people feel that way - some of them perhaps only unconsciously. That's why when someone comes along and says he has something meaningful to do (be it religion or making life multi-planetary), he gets attention.
It sure resonates with me as well (not the religion part ;-) ).
I've worked in industries I had no idea even existed until I worked there. But they made sense once I found them, and I created value, as did most of my colleagues. Maybe you're in a bad job at the moment and need to look a bit wider?
> Companies like Snapchat are worth billions of dollars, but they lose billions of dollars each year. At least most cryptocurrencies don't lose money (except some of them due to electricity costs).
All cryptocurrencies are burning money on electricity costs. And what do they have to show for it? I've got plenty of fun out of Snapchat, so even if their investors don't get a return it's not like the money was completely burned, whereas cryptocurrencies spend electricity with nothing to show for it except some numbers that hash to other numbers.
> I've worked in industries I had no idea even existed until I worked there. But they made sense once I found them, and I created value, as did most of my colleagues.
Value is relative. You may have created value in the reference frame of a particular industry, but perhaps that industry is not of value. As e.g. Ponzi schemes show, people pay for things that have no value, so money is not a reliable indicator.
Another example is the entertainment industry. A lot of money is being spent, orders of magnitude more per minute of content than say, 40 years ago. But are people more entertained now per minute of content than back in the old days?
> Value is relative. You may have created value in the reference frame of a particular industry, but perhaps that industry is not of value. As e.g. Ponzi schemes show, people pay for things that have no value, so money is not a reliable indicator.
It has its flaws but on the whole it works. Certainly in the cases I'm thinking of my industry was producing value and I was producing value to the industry.
> Another example is the entertainment industry. A lot of money is being spent, orders of magnitude more per minute of content than say, 40 years ago. But are people more entertained now per minute of content than back in the old days?
Yes, much more. Try watching old films, playing old games. There are a few gems but there's a lot of awfulness, and even more than that, even in the good ones everything's so slow.
> Value is relative. You may have created value in the reference frame of a particular industry, but perhaps that industry is not of value.
You seem to be confused to the point that you assume that value can only exist if you personally find anything to be of any value and only in the long run. That's not how the world works. Value is subjective and everyone has their particular needs at each point in time. I don't go buy speedos in the dead of winter or skis in august, nor I'm going to spend money on a show or a book that doesn't interest me. Does that mean that any of those things has any value?of course not.
Mining is a highly nessisarily industry, but it depends on a lot of niche industries that we don't think about. Yes, building high explosives is nessisarily because we need them to mine with. But high explosives are now an industry that needs support, quality control, R&D etc.
Keep going and the beast feeds it's self with communication overhead requiring a lot of office workers.
Not the same thing. Your browser does a necessary computation and nothing more; if computers get twice as fast, your browser will spend half as much electricity, but bitcoin "miners" will be burning as much as ever.
Recommended bit sizes for a given cipher do increase but only very gradually, since the attack cost is exponential in the number of bits. 20 years ago 1024 or 2048 bit RSA was standard; now 2048 is recommended as a minimum for extremely high-value and long-lived keys (i.e. CA root certificates) but that's all. Host key lengths are actually shorter these days than they were 10 years ago, since algorithmic improvements (elliptic curves) allow the same level of security with much shorter keys.
Burning electricity is not the only way we know to secure a currency, though. It's the decentralized nature of cryptocurrencies that requires their high operational costs, because the "good guys" and the "bad guys" are equal from the point of view of the protocol, so the "good guys" need to spend more than any "bad guy" can afford.
A centralized currency lets the central source of trust protect their security at far lower cost.
Then you aren't comparing like-for-like. Value in bitcoin represents a disagreement with your consideration of who is "good", in the same way investment in a currency might be seen as confidence in the institutions that back it. You could just as well argue there should only be one monetary currency.
How much effort do credit-rating, fraud etc agencies make? A centralized currency requires trust, which crypto-currencies don't. To compare value, you need to add a price tag to this liability. The lower cost comes from the savings made in not having to secure against the central authority itself.
But this decentralization is a feature, not a bug. It might be more efficient on the surface to centralize and just have everyone trust a mint, but that defeats the purpose of decentralization.
There are other upsides like independence.
It’s more efficient for everyone to take a bus and never drive a car alone. But cars give freedom. It’s more efficient for the world to eat soy lent instead of a diverse diet.
Complaining about how cars use more fuel than buses or how strawberries take more water and fertilizer than soy neglects to capture all the benefits gained for those higher costs.
While the mainstream argues about whether bitcoin is or isn't this or that, while bitcoin attracts all the attention because of its spectacularly high price, people are working on blockchain things all over the place, relatively quietly in the background.
Whether or not bitcoin does this or that is immaterial to growth of non-currency blockchain applications.
One reason that people are working on blockchain things all over the place because money is pouring into it at an absurd rate thanks to investors' fear of missing out on the next big thing. This is not a criticism, there is nothing wrong with entrepreneurs going where the capital is.
10 years on there are no non-currency blockchain applications that make any sense. And even if they did exist, since the blockchain integrity guarantees only work if there is a valuable reward for "mining", a failure of blockchain-as-currency would doom non-currency blockchain applications as well.
There are very few good use cases for blockchains, a lot of companies are doing things with blockchain tech that are not suited and they would be better off simply using a traditional database and APIs.
True, but the article is not about the blockchain; moreover, I'd be shocked if CNBC were discussing inner works of software and technical concepts that the general public has no interest in.
I think what might be happening here is that the traditional software development practices and habits would get on that, turning it into a project costing millions, taking years, and not doing what it promised.
Also verifying image authenticity in a world quickly hurtling past a the uncanny valley with turn key neural nets to fake just about any media at no cost and with no special skills.
There are quite a few projects vying for owning the next generation of block chain. Generally known as ffm tech (fast,free,and minerless). They depend on some variation of PoS, hierarcal blockchains, and Byzantine consensus algos. Basically there's lots of serious work going into making blockchain ledgers scalable to permit money-like usage.
Some examples are Raiblocks and Ethereum's Plasma protocol.
You generally get around the "nothing at stake" problem by requiring validators (consensus-forming nodes) to submit a deposit that is subject to deletion upon proof of bad behavior. For example, if I get two conflicting messages signed by you in Ethereum's Casper network, I can present that data as proof to the Casper smart contract where you lose your deposit.
The solution in Casper: if you approve more than one block at the same height, someone can submit both your approvals to the winning chain, which destroys your stake on that chain. The submitter gets a reward. There's a long delay to withdraw your stake so plenty of time for someone to submit.
It's fine for your favored chain to win. And maybe you can get a group of validators to cooperate and make that happen. But they better have bet on only that chain, or they will lose their stake.
If the validators are conspiring on a secret chain, and they're betting only on the secret blocks, the public blocks won't be finalized.
Bitcoin/Monero/Zcash are already incredibly useful by making things like Wikileaks possible, which was previously shut out of the world financial system from US Govt pressure. This contribution to international politics alone has changed the world.
Does anyone see WikiLeaks as a good thing anymore? The concept is interesting but WikiLeaks is beyond worthless and Julian is just an attention seeking whore, being played by global superpowers
You're getting downvoted, but this piece from the Atlantic really made me deeply suspicious of Wikileaks' motivations. A chilling quotation from the article:
>“Hi Don. Sorry to hear about your problems,” WikiLeaks wrote. “We have an idea that may help a little. We are VERY interested in confidentially obtaining and publishing a copy of the email(s) cited in the New York Times today,” citing a reference in the paper to emails Trump Jr had exchanged with Rob Goldstone, a publicist who had helped set up the meeting. “We think this is strongly in your interest,” WikiLeaks went on. It then reprised many of the same arguments it made in trying to convince Trump Jr. to turn over his father’s tax returns, including the argument that Trump’s enemies in the press were using the emails to spin an unfavorable narrative of the meeting. “Us publishing not only deprives them of this ability but is beautifully confounding.”
A site that engages in leaking evidence of our government's wrongdoing is necessary. But it seems that they're starting to take a far more politically biased role and that the Wikileaks of the past is no more.
Yes, Wikileaks has a spin (it’s run by people after all), but they’ve only posted factual documents. To give public full picture, we need more Wikileaks-copycats with a different spin.
Beyond worthless? That’s a spat in the face to all whistleblowers, journalists and lawyers who WikiLeaks worked together with to reveal dirty state and corporation secrets.
Did everyone forget Afghan and Iraq war documents already? Cable leaks? Journalists who were risking their lives?
WikiLeaks to this day hasn’t released a single inauthentic leak.
>Did everyone forget Afghan and Iraq war documents already? Cable leaks? Journalists who were risking their lives?
Have you? Wikileaks is irresponsible as hell. Their leaks were unredacted and put the lives of informants at risk as well as exposing the names of people who have been victims of sex crimes and persecuted by corrupt governments.
People like Glenn Greenwald and the journalists working on the Panama Papers illustrate really well how irresponsible and biased Wikileaks is.
They decided to become a political organization and obliterated their credibility.
If they release something is it real... probably. Is it free from spin? probably not. Are they releasing things in a fair and even fashion (i.e. everything gets released unless there is a damn good reason not to, like people could end up dead)? I doubt it now.
It seems some people view apolitical as leaking things damaging to people they don't like, and political when leaking damaging things against people they do.
i'd expect that kind of stupidity from reddit, but here? Has mainstream media truly got such a hold over everyone? that they can destroy the reputation of a service (and a political refugee) while doing absolutely everything they accuse the service of doing, except blatantly and malevolently?
Starting to wonder whether the west deserves a service like Wikileaks; maybe we should be condemned back into the days where whistle blowers were quietly dealt with and the population could live in dumb ignorance.
>that they can destroy the reputation of a service (and a political refugee) while doing absolutely everything they accuse the service of doing, except blatantly and malevolently?
Can you show me where the NYTimes told Chelsea Clinton her mom should claim the election was rigged and refuse to concede?
Wikileaks destroyed it's own reputation with irresponsible releases with unredacted names, clearly timed releases to act as damage control for specific candidates, and generally just being unprofessional as hell.
They are the only place a whistle-blower can go, without being hung out to dry; Your main complaint about them is that they sometimes, supposedly act like the rest of our media...
I don't know how you can make that claim with a straight face. Wikileaks has played a ridiculous coy Was-he-or-wasn't-he game with regard to Seth Rich to the detriment of his family and national discourse.
Meanwhile, whistle blowers have gone to major media organizations again and again without being hung out to dry. The Washington Post didn't hang out Deep Throat to die - his identity got revealed by a family lawyer 3 decades later. Süddeutsche Zeitung didn't out the Panama Papers leaker. Most of 2017 has been spent with major stories covering the airwaves based on whistle blowers from within the White House. Edward Snowden's name got revealed at his own request.
Let's not be disingenuous and act like there aren't responsible organizations and journalists dedicating their lives to aiding whistleblowers and publishing the news in a responsible manner.
I don’t think there’s any debate that the information WL releases is factual. The only complaint I hear is that they are not shining their flashlight where some particular entity wants it shined. The obvious answer is more flashlights, not to smash the bulb of the single light we have.
There were very few complaints about WL until they exposed Clinton.
The complaints might have started then, but Assange was all that was left of Wikileaks at that point simply a joke attempting to regain some form of legitimacy.
In my opinion, the man never had any values and just lucked out exposing some legitimate info, in an irresponsible manner. Finally he just went off the rails believing his own press.
You aren't being very objective about Assange. He played bait and switch throughout the election cycle acting like he had some kind of big reveal that he never revealed and he picked sides with Trump. He's got an agenda. It's not wrong to have an agenda, but he's manipulative.
I don't have an particular allegiance to "that rag". If you don't want to present the full picture, that's your issue, but you obviously have a dog in race.
You could argue that Ethereum is a useful application because it allows for about fifty other major coins to work, becoming like a provider for virtual currencies.
This article is probably true but this is just typical clickbait from CNBC.
The author begins by saying
> Admittedly I'm green with envy for failing to foresee the explosive rally in the price of bitcoin when it was first brought to my attention several years ago.
That should be enough to stop reading right there.
I don’t know how articles like this make it to the top of hacker news.
Just because Warren Buffet doesn’t think crypto currencies don’t have a future doesn’t mean they don’t. He also still uses a flip phone, and didn’t invest in tech stocks at all until recently. He admitted to not understanding crypto currencies at all.
Also the dollar as reserve currency is the weakest argument I can think of as to why Bitcoin can’t be a global currency. I personally trade crypto from time to time, and I care much much more about the Bitcoin (satoshi) value of my portfolio than the dollar value. In the crypto world, Bitcoin IS the reserve currency. Most other tokens trade vs. it. It’s not that insane to imagine a world where people’s net worth are expressed as a number of Bitcoin. Do I think that is likely? No, but it is certainly a possibility.
Just because CNBC and other mainstream media outlets use dollars to explain net worth “Winklevoss twins are first Bitcoin billionaires” that has less to do with Bitcoin as a currency and much more to do with explaining things in a way that is easy for regular people to understand.
This. Exactly this. I’ve been an investor in BTC and trading crypto on multiple exchanges for years. BTC is -the- reserve currency of crypto. It is the currency all other crypto is denominated in. BTC will exist long after many of the anchors and writers on CNBC have retired.
I'm worried because family and friends of mine who are not tech oriented at all, are buying bitcoin as investments. They are my canary in the coal mine.
Yup. I've got the same canary dying at this point. Work colleagues are asking me "which crypto" they should buy.
4 years ago, when btc hit $1000, it was my uncle who asked me to buy a couple. A few months later it dropped to $300.
Crypto currencies feel a lot more mainstream this time around. It makes me worried that a crash could actually impact the "real" (as in non-crypto) economy.
At $1,000 the economist hat a story on bitcoin which probably caused (some of) the following rise and crash shortly after. This time the buyer base is much larger (low yields on nearly everything else) but bitcoin has already been struggling to keep its value in recent weeks.
In hindsight, yeah, but you can't predict the future. I wouldn't be surprised if e.g. Bitcoin collapses, for example due to the transaction costs and time. If the miners pull out the network dies.
Same here, a lot of my non tech friends are trading cryptocurrency parroting the technobabble in the ICO whitepapers without any understanding of the technical basics.
Successful shorting is only possible if you can predict the timing of the collapse, if you could do that you might just as well play the regular pyramid game (and then start shorting on the way out, for maximum gambling reward)
A good currency has a stable value, and is fungible. Bitcoin is neither:
The dramatic surge in Bitcoin's value is awful for real commerce. In contrast, a dollar or euro's value changes very little on a day to day or year to year basis. (Inflation is about 4% a year.) You know what a dollar is worth without needing to follow currency markets.
I can exchange a dollar with little overhead. (Hard currency, Visa, Amex, or check.) The time it takes for Bitcoin to settle, and the fees, means that I can not conduct any real commerce with it.
Bitcoin is an experiment. The limited supply made it useful to demonstrate how a cryptocurrency may work; but that ultimately makes it a poor replacement for real currency. The best thing to do is to learn from it and re-apply blockchain elsewhere.
Its the first way to have a trustless, digital cash system as opposed to a digital payment system. In a payment system, people essentially exchange IOU's. Like writing a "good for $x note" or cheque. Payments always incur counter party risk, and thus can only happen among users who trust each other - or they must rely on a trusted third party (bank, paypal, credit card company etc).
Bitcoin allows peer 2 peer cash settlements, where users do not need to trust each other, because there is no counter party risk since they exchange something of value. Think gold, or although that is somewhat confusing, paying with bank notes (bank notes really are IOUs, but issued by a bank or central bank, so when we use them, we consider them valuable because we trust the bank, not the person paying with them). With cash payments, you dont rely on a third party, you dont take on counter party risk, you exchange things that actually have value, that you have to be sure can not be forged. Sounds trivial, but its a really difficult thing to pull off. Even in the real world, its not easy, bank notes can be counterfeit, gold may be fake, etc. In the digital world, its even harder because you also have to make sure each coin can only be spent once (its trivial to copy data). Bitcoin was the first solution to this problem.
source: https://np.reddit.com/r/CryptoCurrency/comments/6ufksx/am_i_...
What people confuse often that the Blockchain != Bitcoin. The concepts behind the Blockchain are certainly valuable, but to equate all that value to the value of Bitcoin itself is a logical fallacy.
Folks should learn to appreciate the Blockchain separately from any cryptocurrency. We can have a world where Blockchain is widely used, but we don't use any of 1500+ coins and tokens out on coinmarketcap.com.
> With cash payments, you dont rely on a third party, you dont take on counter party risk, you exchange things that actually have value, that you have to be sure can not be forged.
Funny. To me, practically only value bitcoin and gold have is based on the trust that you find a third party tomorrow who is willing to change it to something actually valuable (actually as in actually useful in your life). So you very much rely on third parties.
Price is dictated by third parties (the market) in any economy. What OP is referring to is the ability to own or trade the asset without reliance on any third party such as a bank or exchange.
CNBC demonstrated "how easy it is" to buy Ripple via Poloniex exchange on television. They also often have a "Ripple watch" counter on the screen displaying current worth in dollars.
They skipped the step where, after trying for days due to server overload, you have to verify your coinbase account with a webcam photo of your id which will then get rejected for unknown reasons.
Indeed. Quite a few exchanges are either having serious performance issues or they completely stopped new user registrations. And good luck with the verification process. If you succeed after a month, consider yourself lucky.
On the positive side the mess is a result of an enormous demand. If you had a serious exchange that's taking new users and a quick verification, you'd make a killing.
First you have to buy Ethereum then wait for it to placed into your Coinbase account. Once you own Ethereum there's a bunch of steps to buy Ripple using Ethereum.
Out of all the cryptos I've seen over the years, I'm most bullish on Ripple. They actually have a clear use case and are being implemented by big companies. Its still a bit of a pain to buy some, but I'm crossing my fingers that Coinbase will add them this year.
He's completely wrong. In his experience people talk about their value not in bitcoins but in dollars, that's because he's talking with speculators who are not interested in what decentralised and distributed ledgers mean. People who think that we're in a revolution of not just currency but also government talk about the value of their crypto in terms of bitcoins and not dollars.
Bitcoin is still young and the technology is immature. What we see today is not what we're going to end up with. But, at one point the idea of separating church and state would have seemed insane, now in a big chunk of the world having any religion associated with government would be unthinkable. Likewise in the future we could look back at the dark ages where centralised authorities managed currency and manipulated it for the benefit of the few.
The thing about revolutions is that people often don't see them coming.
Bitcoin will never be a currency in the traditional sense, as it fails the stable store of value test, which then impairs it's ability to serve the other functions money (unit of account, medium of exchange). However, Bitcoin and other cryptos are more like investments that also happen to be massively efficient global wealth transfer systems (relative to existing methods). CNBC's crypto coverage continues to be shallow, click-baity, disappointing garbage.
...when compared to a handful of fiat currencies, maybe. It's not fair to gatekeep with top performers, in my opinion.
There are many national currencies that lack stability. That doesn't make them "not currencies". It just makes them volatile currencies.
In fact, that's precisely why Bitcoin has become so popular in those countries—particularly Latin America; Bitcoin may not be stable, but it's a more reliable store of value (for now) than the bolivar or Argentinian peso.
that's precisely why Bitcoin has become so popular in those countries
I wonder though, if this relative stability is more to do with the stake invested in it from more stable currencies like Dollar, Euro and Yen.
In my head I can't get away from the idea, that beneath all the value vested in bitcoin is the actual olde worlde currencies that ultimately people need to change it back to in order to buy things.
When currencies experience hyperinflation, people stop using them. Even the people required to use them by law (wherever there is hyperinflation, there are always capital controls). They can still nominally be called currencies, but they are not much of anything.
I don't think anyone ever complained about their savings appreciating in value. I had used bitcoin for years to buy things online and send money to friends/family, until the fees went nuts. Now we use other coins like ZCash and Ethereum.
Compared to what? Don't forget that there are likely 10x or more resources spent on securing fiat accounts and transactions then there ever has been for Bitcoin.
Since 2008, I personally know much more millionaires from the cryptoeconomy than from startups. Which makes me reorder the average guy lucky taxonomy from the luckiest "gambling" in descending order:
1/ Lottery
2/ Founding startups
3/ Working in startups (this item is from YC Startup School 2017 Episode 1)
4/ Cryptoeconomy
5/ Just working in the IT field in a place with high salaries, and saving/investing the money.
I rem that YC startup school lecture], I guess what the speaker missed out was that it also takes a lot of skill or luck to actually figure out which startup to work in. Each of these startups claim to be rocketships but in reality, only maybe a 1% of these ships even take off the ground.
I personally know a few friends who have wasted their prime years working in startups which never took off.
And so did google and Facebook and amazon. But the trick is that as an employee you had to be there relatively early on (within a few years) or you missed the boat. If you join one of these places now you’ll get a good salary and bonuses and stocks but it will take years to save a mil or two.
In some ways it's already a significant currency. Just yesterday I changed euros to btc to buy some shares in Kucoin and used btc very much like I'd use US dollars to say buy shares in eTrade. Fair enough it's rubbish for buying a cup of coffee but btc and etherium are the standard currencies for crypto trading.
And that's not a small market - $50bn was traded in the last 24hrs according to coinmarketcap.
To me, it's not "very much like [you'd] use US dollars" at all. You didn't actually buy anything, did you? You used it to trade more bitcoins. I mean, if people were just pushing around dollars, exchanging them with each other, and not purchasing actual goods and services with them, then maybe it would be the same.
On the other hand, my knowledge of all this is pretty superficial. But the one thing that sticks with me that the naysayers keep bringing up is just that: no one (or very, very few) is actually using bitcoins in any useful way other than trading them with other bitcoins.
I bought some Kucoin Shares (KCS) (https://coinmarketcap.com/currencies/kucoin-shares/) which actually pay a dividend (in other cryptos) which should be 15% of the Kucoin exchange's trade fees. It doesn't seem so different from buying shares in eTrade which will hopefully pay some dividends in USD paid out of the profits from their trading fees.
KCS are a little unusual in paying dividends but the whole crypto markets I think are moving towards being more like traditional financial markets. At the moment it's just shares in a business trading crypto but in the future I could see maybe shares in a business doing more normal things.
Maybe I'm misunderstanding what Kucoin Shares are. Are they not just shares in other bitcoin markets? It looks to me like it's just a "currency exchange", really. Or are you actually buying shares in some underlying company that provides value? If it's the latter, then sure, it's like buying shares on eTrade. But if there's no underlying company or product you're investing in, then I don't seem them as being similar at all.
Wait, so it's just buying shares in the company Kucoin itself? Which itself is just a bitcoin exchange? By trading on Kucoin you are investing in Kucoin? I don't see how this is anything like buying stocks in real company. It almost sounds like a multi-level marketing scheme.
> You didn't actually buy anything, did you? You used it to trade more bitcoins
"bitcoin" is not a generic term for cryptocurrencies. He didn't trade his bitcoins for "more bitcoins", he traded it for a token that represents a share in a company
While I do think the whole crypto market is insanely overvalued, there's definitely a lot of value in there too. In the future I could see stock exchanges replaced with token exchanges, and all stocks being crypto tokens
Well if that's the case - that he's actually buying shares in some underlying company - then I'm just misunderstanding. Again, my knowledge is very superficial here - at a glance it looks like Kucoin is just an exchange for other bitcoin markets. But if it's actually an exchange to buy shares in real companies, then that's a rather different situation.
> Kucoin is just an exchange for other bitcoin markets
Again it sounds like you're confusing the words "bitcoin" and "cryptocurrency".
They are a cryptocurrency exchange. You can trade Bitcoin for other cryptocurrencies (such as Ether, Litecoin, etc).
They have issued their own cryptocurrency called "Kucoin Shares", which represent a share of the exchange. I'm not sure exactly how this works and if it has any legal weight, but they pay some percentage of their trading fees to holders of these shares
Why do people keep thinking about bitcoin as a currency? It was its original intent but these days it's more seen as gold.
The value of the bitcoin is the money invested in it that alone can be used for something where the need for transactions aren't high, as an example for large international contracts.
I don't know anyone with just the slightest understanding of bitcoin who believe it's a currency anymore.
People mined gold because it was very valuable, gold have also been doing it's ups and downs the same have currencies historically (before the central banks).
Bitcoin is gold for the digital space. Bitcoin can survive any one company or institution going down it can survive wars too.
Bitcoin is 9 years old gold is thousands. Golds value could easily go to zero in the future.
Most bitcoins are in the hands of people who didn't buy beause of it's growth but because they believe it ads value to the digital space.
Bitcoin is currently not what Bitcoin was when it was created. Slow peer-to-peer transactions and high processing fees.
Average fees are hovering around 60 dollars. That's an average. Unconfirmed transactions has been at over 100k for months. The mempool is also hovering around an ATH. The Bitcoin is crippled. Sentences like "store of value" are now the term used to describe Bitcoin. Very far from what the Bitcoin used to be.
I think there is a real possibility of a "death spiral of the blockchain". Fees will increase and it will become impossible to move coins on the blockchain besides the upper 10% of bitcoin holders. For traders on exchanges bitcoin seems fast; because no transactions are taking place. When you actually decide to move your bitcoins to a wallet you own you'll pay high fees... if not your transaction could take months to clear or never actually clear.
The fork that occurred on 1st August created Bitcoin Cash. This fork is much closer to what the Bitcoin was. Bitcoin Cash is this today. Removal of the segwit code (which hasn't solved anything), disabling of RBF (replace-by-fee) enabling 0-confirmation transactions again. A new DAA (difficulty adjustment algorithm). Finally increase the block size to 8MiB.
The Bitcoin has been crippled on purpose by Blockstream deep in the pockets of bankers and insurance companies. Blockstream is the main contributor to the Bitcoin development. Look at the sponsors; https://www.blockstream.com/about/#investors
Now all of this has led to a complete divide and clusterfuck of the community. It is an very ugly and toxic environment and is sad to look at. On top of that we now have thousands of alternative coins and blockchains.
The current version of bitcoin is crippled and completely unusable as a currency as is.
That's the Bitcoin Cash spin, which gets a fair amount of play given that one of its backers is wealthy enough to own or have investments in a lot of Bitcoin-related businesses and websites. The trouble is that it's not true.
Transaction replacement is so much a part of what Bitcoin was intended to be that Satoshi included a 32-bit field in every single transaction solely to provide ordering for replacements. (It was disabled only because the original design let people spam the network with unlimited replacements for free, which was later fixed by requiring replacements pay higher fees.) If you want to accept 0-conf transactions, you just have to check they're not marked replaceable - and the way you check is the same as in Satoshi's day.
What does break 0-conf transactions is the transaction malleability problem that Segwit was designed to fix. It's not safe to accept 0-conf transactions from people you trust entirely, or even from yourself, because third parties can invalidate them by malleating the transactions they depend on. This majorly broke outgoing payments from some Bitcoin Cash exchanges shortly after the fork and required manual intervention to fix. Satoshi's original code was even less able to cope with malleability; it got completely confused and wallet transactions tended to get permanently stuck.
Also, the new difficulty adjustment algorithm in the 1st of August fork was terribly broken. It had a design flaw that allowed miners to repeatedly drive difficulty down much lower than it should be in a relatively short period of time, then mine large numbers of blocks at the lower difficulty, creating new Bitcoin Cash at a much more rapid rate than intended. Not only that, but during the drive-down phase blocks took hours to mine, making the network almost unusable a large chunk of the time. That's why exchanges resorted to using change from unconfirmed withdrawals as inputs to subsequent withdrawals, causing chaos when someone exploited malleability. It's also why supporters were so keen on promoting 0-conf transactions as safe.
On, and the tweet you're pointing to as proof that there was no discussion of limiting the block size until the evil Blockstream got involved was written by one of the key employees and co-founders of Blockstream after he founded it. Meanwhile, the most ardently small-block of the core devs is Luke Jr who's very conspicuously refused to work for them in order to preserve his independence.
The paragraph about difficulty adjustment and transaction times is not really fair. It is true that the algorithm was broken which led to large block times, but since the network was not over capacity (as is the case with Bitcoin Core) your transaction would be included in the next block in <2 hours. This is comparable to the normal waiting time of Bitcoin.
With all due respect to Warren Buffett, I wouldn't listen to his opinion on Bitcoin. He doesn't even pretend to understand it. Who cares if Bitcoin does or doesn't have a shot at becoming a major global currency. There is a virtually infinite variety of valuable assets of which currency is just one kind. Bitcoin is an asset, and has value. Same for many other cryptocurrencies. As long as there's a use case for cryptos (currency or something else) they will have some value. End of story.
> I wouldn't listen to his opinion on Bitcoin. He doesn't even pretend to understand it.
People said the same thing back in 1999 when he said he does not understand the tech boom and cannot figure out the winners from losers so he is going to ignore it.
People called him a dinosaur because he did not understand tech and you know what happened next. Most tech companies went bankrupt.
Dinosaur is a fair summation of Buffet's approach to investment. He's built his wealth on shying away from risk, identifying stable low-growth sectors and sinking his capital there. Very old fashioned and unsexy but pure sense.
That's not true. You cannot buy food with Bitcoin, you have to exchange it. And to do that, you have to sign up to some exchange or equivalent. Many of such exchanges have turned out to be a bit more dodgy than the typical first world bank. Plus, huge volatility and high fees.
But how does it keep it's value stable? How does a store of value weather a small panic when the hope and excitement has died down? When the hodl has stopped because everybody is tired, living their lives, and using Bitcoin. Bitcoin isn't `the magical internet money' anymore, it won't stay buzzword of 20xx either.
Bitcoin needs an inherent value otherwise it will crash. I always believed Bitcoin provided a service to keep it's value stable. You argue against this.
I agree broadly with what you're saying here, but with respect to GP, you could indeed say the same thing about gold ... it's only worth the value ascribed to it in terms of "real world" things. Except that gold does have a few pretty nifty usecases based on its intrinsic properties as well, such as for jewellery and electronics.
I wonder if the same could be said about BTC, in that mining is effectively digging up new prime numbers right? and prime numbers do have intrinsic value for many communications and computing applications no?
Nope, bitcoin mining is based on finding large integers that hash to small integers (under the current threshold). It's got nothing to do with primes. Although there is a cryptocurrency based on this very concept, currently with a market cap of $12M: http://primecoin.io/
I don't think there is any different value to that of Bitcoin. However I think they provide a service (money transmitting) better than existing competitors.
I also think that altcoins don't compete with Bitcoin because Bitcoin is unable to saturate the market.
You could not. Exactly because it has some nifty use cases. The jewelry market is what keeps gold stable - it can absorb a small panic and stop it from becoming a large burst and anchors the gold price into a real world quantity.
If you create a store of wealth without any kind of real world anchoring, any small panic would be enough to permanently move its price to any random value. That makes it quite useless for a store wealth.
No, mining does not generate value except supporting Bitcoin. Prime numbers (not mining) also only have cryptographic value if they aren't known to anybody else.
Losing the nifty usecases for gold would plummet the price. Luckily were addicted to technology and jewelery. This won't change quickly. However Bitcoin is losing their usecase and already struggling to stay relevant.
But what's the advantage over directly buying Dollars or Euros?
A very good use-case for cryptocurrencies is taking money out of countries with strict capital control, like China. But obviously, such governments are also quite authoritarian and will not have problems blocking a cryptocurrency if they see fit.
I'm not an economist, but the argument in the article seems a little constructed. There are plenty of places where cryptocurrencies can be exchanged against cash. On the other side, when did the author last try to buy a pizza with actual gold?
None of them are nothing else than classic fiat debit Visa or MC cards. They just make an API call to exchange some gold or crypto for cash at point of sale. Merchant still gets paid with fiat from the "gold" card.
Merchant still gets paid in his local currency even when you pay with a foreign visa card.
The merchant sees his favourite currency, the customer sees his favourite currency, and all the exchanging goes on behind-the-scenes. I don't see why a bitcoin or gold debit card is materially different to any other foreign debit card, from the perspective of either the merchant or the customer.
Yeah but sometimes it seems like people are not aware of this. Lots of crypto advocates are talking about future where crypto will become de facto currency and transactions will be done in BTC or some other tokens. So merchants would price their goods and services in crypto tokens.
We are definitely not there if we ever will be (personally I am skeptical most of these tokens will turn out to be more than fads few years from now). Merchant still gets paid with USD, GBP, JPY, EUR or whatever currency is local to the merchant.
It also must be more inefficient to use Bitcoin or gold card. Because there is an additional layer of conversion from BTC/gold to fiat which I believe is not as advantageous as paying with fiat which uses daily Visa/MC interchange rate (Visa/MC set exchange rate for currency pairs once per day so it doesn't fluctuate when you buy 2 coffees per day for example) and is as good as you can get.
I imagine whatever service you use to change BTC/gold to fiat in the background must incur some fees albeit small ones (Coinbase or something else that's used by these cards, the API call you make to Coinbase to change BTC to USD will charge you small fee). So you will be paying more on fees / get worse exchange rate.
I still don't understand what's the advantage of using these Bitcoin or gold debit cards as it seems you are just paying extra fees for extra layer of conversion. I'd stick with old school boring bank debit cards since transactions are done in fiat anyways.
There is no point. A paragraph later, "I understand that the entire development of this ecosystem is new, hence the need to compare it to existing forms of money. And, yes, 10 or 20 years from now, dollars may be obsolete and bitcoin could be the world's reserve currency."
This article is terrible. One empty contradictory statement after another with zero actual analysis. It really is shameful this kind of thing gets published by someone who calls himself a senior analyst & commentator.
CNBC is a joke. It's the Techcrunch of financial news. Occasionally they publish something of value, but mostly it's just repurposed press releases and garbage commentary.
I don't know, right now it's easier for me to purchase BTC than for me to purchase ¥ or € online. If treated as a foreign currency and not a future, I think it has promise.
Most of the value of the US Dollar comes from international treaties that require barrels of oil to be sold in dollars. This gives the dollar an intrinsic, positive energy value, backed by the military. Contrast that with Bitcoin which has a negative energy value. There are no treaties requiring oil to be sold in Bitcoin.
Energy is what is scarce, has real value, and what drives the economy. At some point in the future, after the hype has died, it won't be worth the energy to mine bitcoin.
Oil has almost nothing to due with the value of USD. People need to pay a few trillion dollars in US taxes every year based on the size of the US economy. If the dollar was worth 1/10 as much they would then need to pay 10x as many dollars in taxes because people pay taxes as a percentage of value creation not simply arbitrary units.
On top of that people who want US goods like movies need USD to buy them. Further, US companies foreign profits need to be converted back to USD to pay out dividends. Apple may sell a Chinese made iPad in China, but the profit needs to be converted to USD.
Trading volume has little to do with a currency's power.
To be a medium of exchange something needs to have value. Euro's are unstable due to polical issues, but the EU's economy is why it has any value in the first place. Now this has and will change over time, but it's really stability not military power that backs the adoption of USD's.
The energy cost of mining bitcoin equates to exactly what people are willing to pay for it.
If the cost of mining increases, profits decrease, and the system re-equalizes.
It is simply another market, BTC/kj.
Energy costs are only part of the equation. The point where people buy new equipment is significantly different from the point where they turn off equipment they already own.
#1 - Bitcoin. And Bitcoin's #1 problem is the 1MB limit. I expect none of the bitcoin developers (except Satoshi of course) anticipated that people would actually try to use it already (https://en.wikipedia.org/wiki/Tongue-in-cheek). The Noobs have been unceremoniously walked into that "slow and expensive" wall this winter and they are bitter.
But ripple (xrp) does. It may only be a slim chance, but it is real. It could be the first currency (like the euro, yen, swiss franc, etc.) backed by a private company. But unlike the sovereign currencies, xrp is totally transparent. No cooking the books like the banks have been caught doing with the LIBOR rates.
I don't know if Ripple will truly become a currency like USD. But I think it will be adopted by companies as a way to facilitate easier movement of government-backed currencies, which will give it a value all its own. So perhaps more of a happy medium.
Bankers colluding to keep the LIBOR rates fixed at preferential values.
The LIBOR rate is in theory merely an indicator of the average of interest rates estimated by the leading banks in London, that they would charge to borrow from other banks. In practice, this rate has significant impacts downstream, since it affects many other loan / savings accounts / etc. rates. So the fact that this rate was manipulated, not a true reflection, ended up being A Very Big Deal. An article about it from the Economist: http://www.economist.com/node/21558281
I think that cryptocurrency will take over eventually. There might be big booms and busts in the meantime but it will take over. For many people, cryptocurrency has become an ideology so they will keep buying back every time it drops.
If you mean that governments will embrace a non-decentralised cryptocurrency and use that to replace their previous less traceable currency, then yeah, maybe it will take over :)
That's the state of the world now. Long term, if cryptocurrencies are to be genuinely useful and pervasive, it will probably be exactly one that nails all the design issues and captures 99% of the market.
I don't think that's true. A cryptocurrency can be optimised, so there'd be currencies for fast and cheap transaction validation (like raiblocks), currencies for more secure transactions (ethereum?), currencies that are strongly private (mimblewimble), and so on. There's likely to be more than one of each 'type' as popularity of a coin will ebb and flow. We'll see lots of them come and go.
I don't think Bitcoin is really optimised for anything. It's a brilliant and successful proof of concept, but there are too many flaws compared to other coins for it not to be surpassed. I used to think it could hang on as a base currency that people transfer money between other currencies, but that'd be horribly inefficient and probably unnecessary so I don't think so now. Eventually its price will plateau as people actually start to use cryptocurrencies rather than speculate, and then it'll die.
All entirely speculation on my part though, obvs. I don't hold any currencies so it makes no difference to me really.
Most of the stuff I read about Bitcoin seems to be articles trying to make something positive or negative happen to it, rather than accurately describing what's happening with Bitcoin.
Being a major global currency is never the goal. Even if it's something people want to achieve, there are still many factors, how loose the central banks control fiat money flow is one of them.
You could agree with this title and still want to buy bitcoin, because even if it were true that bitcoin has little shot at ever being a major global currency, the expected value of owning it could still be higher than the current price. If bitcoin became a major global currency its value could easily be 100x what it is now, which means there only has to be a 1% chance of that happening for it to be worth buying.
I see a lot of value in Bitcoin, but strangely enough, I can see that value without looking at Bitcoin at all. Confused? Let me explain the non-obvious reasons why I think Bitcoin has a fair chance.
(I've been following Bitcoin since it was at $1, so I had a lot of time to think about it ;)).
1. I don't expect my kids to ever carry around wallets or keys when they are older. Everything will be in their smartphone. Passport, pictures, credit cards, VISA card, car key, key of house, etc. There is nothing there that couldn't (technically) already be in your smartphone.
When doing payments, I expect them to just physically hold their phone close to some shops terminal, or when doing personal payments, send it over chat.
2. What is the value of Dollar or Euro's nowadays? (I thought a lot about this, but think to have a proper answer). The value is in the network, just the same as with Facebook. In US, every shop supports Dollars, so it has value there. In Europe, Euro's, so that has value. Same with Bitcoin, the new technology might instigated it, but in the end, it's the network of people using and supporting it that give it value.
3. The world is bigger than the industrialized countries alone. Dollar and Euro might be considered more stable than Bitcoin, but not all currencies are like that. For a recent example look at Zimbabwe.
4. (A) A bubble occurs when people think something has more value than it actually has. (B) People think the numbers on their bank account is the money they instantly have available. (C) Fraction reserve banking multiplies money so that the number on your bank are not actually money that is available instantly.
5. Which do you trust more: (A) governments and banks or (B) math and algorithms?
6. A global currency would be very convenient for people who travel a lot.
Of course, there are still a lot of questions too.
1. How will government legislation treat cryptocurrencies in the future?
2. Will some cryptocurrency ever have a stable enough price (such as gold), so that goods can be expressed in it?
3. Will some app make it simple/easy/convenient enough and have a big enough network so all people can agree on starting to use it for making and receiving payments?
4. Will lightning network and/or sidechains be enough and a good solution for the limited payments per second?
Final conclusion: In the end, it will all come to which payment system will have the network. If people want to get payed in Dollars because everybody else works with Dollars, that will have the network. If people want to get payed in Bitcoin because everybody else works with Bitcoin, that will have the network. Is Dollar/Euros Facebook, or is it MySpace? Who can tell? I think nobody at this point. But it is fair to say that fiat money might be Goliath and crypto might be David. Only time will tell.
> In the end, it will all come to which payment system will have the network.
Dollars, in the usa at least, already has the network and banks are already innovating on top of this network. For instance, sales through credit cards are now often deposited into the sellers bank account the very same day as the transaction. Credit cards also allow buyers to send money to strangers with confidence knowing they will be protected. This also benefits the seller as it makes it easier to make a sale.
From an american perspective - crypto as a payment system is also pretty cumbersome with it being treated as an asset. There are simply not many people out there who will want to keep track and report every payment to the IRS.
Your point 5 is quite a strawman. As everyone who does real (applied) crypto knows, it's not about maths and algorithms. Those are sound, but the devil is in the implementation details.
Let's not pretend cryptocurrencies are usable for payments. They are not: the technical side is way too hard for random people to use. I'd say, PGP-hard.
You are correct about point 5 that the devil is in the implementation details. But in the end I think that's not a problem (and that my explanation was actually incorrect).
If you look at what happened to Ethereum when something went wrong, the community just decides to rollback the mistake.
So maybe it's not "math and algorithms" as I stated it, but more like trust in "the community". The community just uses math and algorithms, but is not afraid to rollback when an implementation mistake was made.
You are also correct that cryptocurrencies are not usable for payments. But I would add a "yet" to that. That's why I added counterpoint 3, that an easy to use app needs to be made for the regular public.
I don't see this as a major hurdle, because nowadays even grandparents and kids can use a computer to go on the internet.
but that's different. There's only a limited amount of btc you can mine, whereas currency can be printed as profligately as you like ... it's more like "gold" in that sense ...
Interesting point. I wouldn't say profligate since creating a new coin, and getting people to adopt it is far less trivial than printing a bundle of notes. But, I think you're right in pointing out that it is a side-channel through which more money can be "created", but in this case it's not a fiat (government) policy decision.
Yes, the point being that it is (generally) easier to control a few government decision makers than exactly everyone who can make a website and start a cryptocurrency first node.
There are many international institutions that check such things (IMF, or just the international money markets, etc). Basically everything that the cryptocurrency-libertarians folks keep on ignoring: turns out such problems were basically solved already.
Bitcoin has shown us exactly why centralized monetary authorities are so important, and that alone was worth it. With a decentralized currency you end up with something that is neither stable nor easily liquid, because it’s not in the interest of those who hold the most to provide either.
Decentralized _operation_ might be ok but decentralized management and oversight seems to have not worked out. "Market Forces" don't seem to produce good architecture.
As far as I can tell the biggest problem with Bitcoin right now is the high transaction cost, which happens because it's not worth it for miners to validate transactions unless you essentially bribe them. If mining were more lucrative on its own, this wouldn't be a problem, but the reward rate for mining is hardwired. So in this case I'd say the problem isn't caused by the market but rather by the hard-coded nature of the monetary policy and the fact that there isn't a good process to change such core matters.
No, the high transaction costs are because the blocks are too small. As the currency has grown in popularity the volume has increased but the blocks have not, therefore the competition to get your transaction into the block has grown and market forces means prices have increased because of it.
Still the argument that "high transaction costs are because the blocks are too small" doesn't conflict with the argument that there is no easy way to change the code running bitcoin's blockchain, and in fact the latter would allow the former.
No, forking bitcoin doesn't change the code running bitcoin's blockchain. Carefully re-read what I wrote: "no easy way to change the code running bitcoin's blockchain".
“They” are? Everyone seems to expect everything in Bitcoin development to happen by magic and complain when things don’t happen quite fast enough. These complainers are rarely writing code to make it happen themselves though. If you don’t like it, get involved and help it move faster. Lightning is testing right now, so people who want to help could start there by helping to test the network.
I’m using “they” to refer to the larger community. Go back a few years ago and look at hypotheticals about changing bitcoin to deal with scaling issues. The thought was that when changes were needed the community would vote for those changes. Simple. Until it wasn’t.
But now voting power is too consolidated for any real community change to occur. The block size needs to change. Lightning doesn’t solve the fundamental problem. It just creates a new group of people with power to confirm transactions. Decentralized… until it isn’t.
There was this idea early on that power would be distributed across a wide range of people and the future of BTC would be transparent and democratic. I don’t know that mining pools were really forseen, at least not in the way the exist today.
I guess my point of this whole thread was that we quickly found out when something is “decentralized” it just results in a relatively small group of people becoming the defacto authority through force (in this case, sheer computational power). It was thought that wouldn’t be possible. But here we are.
> when something is “decentralized” it just results in a relatively small group of people becoming the defacto authority through force
Failure to grasp this principle accounts for a large percentage of libertarians, and to somewhat of a lesser, though still significant, degree, ideological conservatives.
Lightning solves the fundamental problem that a blockchain can’t scale to support the number of transactions needed. A block size limit increase can only get you so far. The block size will still need to increase with lightning at some point but it’ll be many orders of magnitude less.
Under lightning who is this new group that confirms transactions you’re concerned about? At the moment hashing power is fairly well distributed on the Bitcoin blockchain, not at all well on BCH. For lightning transactions there could be thousands of “people” you can decide to open a channel with. You can set up your own nodes if you wish.
So in the dystopian future of Chinese bank account/citizen social points and even present-day American Fed/Bank collusion, you are continuously supportive of centralization? And now you claim the experiment has been "worth playing out" while Bitcoin has experienced the most adoption it's ever had within the last few months? What?????? Please tell me you are joking.
Also, what incentive do governments have to keep people paying their taxes and using their own fiat that corporations seem to be able to control and play with hundreds of billions on their own accord and on separate rules. What about privacy, with the government having easy access to every financial institution I encounter and every transaction I make, why should I agree to that?
I want the government to raise taxes, because I want it to do a lot of useful things for society that it can't otherwise do. That's what government is for.
And I want it to be very hard to dodge taxes, so everybody pays their share. If that means less privacy, so be it.
Pretty much all the early adopters who sought to use bitcoin as a currency have backed out because transactions aren’t confirmed for days, in which the price swings wildly, or transaction costs are insane, or some combination of both.
And what about privacy? At least with banks you have some. Or with cash you have the ultimate privacy. With Bitcoin every transaction is public and permanent. You’ve got to convert to dollars at some point, because bitcoin is no longer really transactable itself, and once you do your entire spending history is now available to the big bad government.
Yeah? Visa and MasterCard can confirm a transaction in seconds for 3¢ on the dollar. The price can swing 10% in 10 minutes—and you’re talking about two days? It’s not usable.
Lmao. Who is going to let you buy a car not knowing how much the currency you are paying with is going to be worth by the time they cash it out? Or do you just pay an extra 25% to cover the spread just incase?
The blockchain has some great uses. Decentralized currency is not one of them.
And as far as doing business with me, I really doubt you could afford me, so there’s no worries there.
Once again, pure retardation. The blockchain is completely useless if not backed by miners and value creation, otherwise it’s just a regular distributed server.
I’m glad you’re exposing yourself in this way to me, gives me that much more confidence in you being wrong entirely and me being right. Which I already knew, but I appreciate the extra confirmation.
EDIT: HAHAHAHAHAHA just saw your other comment saying Ripple literally has more intrinsic value than Bitcoin. My GOD. MY GOD. PLEASE KILL YOURSELF IMMEDIATELY. You are absolutely done, brain is roasted my friend. Your view of the world is about as accurate as that of my 3 week pup.
Lol at that subtle jab. With your IQ/RQ I would really be surprised if you have a net worth of over $3.50.
@rjromero, it doesn't hurt to be courteous and respectful to people. The crypto community has a very bad reputation for obvious reasons and it really is not pleasant.
Not true, some projects like Groestlecoin already have it implemented on their mainnets. Bitcoin development is akin to airframe development. Slow is smooth, smooth is fast.
Money has/is currency when it is generally accepted. Bitcoin is unlikely to ever be generally accepted for various reasons. The transaction costs are too high, it's inconvenient for typical currency users, and you can't pay essential expenses such taxes in it.
It may never overtake USD, EUR, or other majors. But it doesn't have to, even just making it to the top 10 currencies would put it into the trillions. As more country's currencies fail or get reset, bitcoin becomes that much more trustworthy.
While I don't agree to the general sentiment of the article, gold and oil barrels were never really considered currency. The question becomes: is bitcoin currency or a commodity?
Why does Bitcoin need to become a major global currency? Even if were to attain a 0.01% global market share (very minor) that would still be a huge achievement.
It is not a currency today, just a source of endless speculation that is bound to end badly for many. Let's not forget that above all it's just a horribly inefficient way to trade value.
I suppose all the people who think Bitcoin is bs just wait and watch this ponzi scheme unfold while the others who have invested in it heavily defend each such article in the comments here.
Unless people solve the engineering problems underlying its inefficiencies there is absolutely zero chance it will become a currency, let alone a global one.
The author seems to go out of his way to demonstrate that he doesn't understand how cryptocurrencies work, and half the article is somewhere between factually incorrect and misleading. It's amusing that he felt the need to demonstrate that the dollar is the more established currency.
At the end he's pretty much correct though. Crypto has a long way to go before it's demonstrated to not just be a speculative bubble. I hope it gets there ... or at least I think I do.
I feel like all these stock market type journalists and investors can't really wrap their head around it. The decentralized nature of it really trips them up.
yeah, and Netscape isn't the dominant web browser, and I don't order pet food from pets.com, my grandma no longer uses AOL, and I don't listen to music with Napster anymore. What's the point?
My nephew works at [insert very large financial institution here]. He's been telling me for a long time that bitcoin is already dead. Financial institutions are already working on their own crypto-currency and, in two years, no one will hear of bitcoin again.
Napster and Limewire were peer to peer but not decentralised. There is no one bittorrent network.
My guess is that bitcoin as we know it now will not exist in the future, but there will be a fork which wins and that fork will take on the name bitcoin. When Napster died it's network was lost, not so with bitcoin, the blockchain will fork and a fork will win.
>V1 of a technology as disruptive as this doesn't necessarily survive in the end. Version 2 or Version 3 is where it gets really interesting.
The technology that's here to stay is blockchain, the currencies associated with them are irrelevant in the grand scheme for now. I think Bitcoin has the brand recognition to hang in there for a while, but if nothing new is brought to the table with every newly introduced altcoin they're destined for failure.
Even Kodak is trying to get into cryptocurrency/blockchain game. I think DRM via smart contracts is a feasible and cool concept, but no one is going to take Kodakcoin (it's a real thing) seriously unless it has liquidity and value beyond photographers. Until they can leverage atomic swaps it's going nowhere in my opinion.
> The technology that's here to stay is blockchain, the currencies associated with them are irrelevant in the grand scheme for now.
But blockchain's validity is validated by miners, and miners stick around because they're compensated for constructing a valid block.
How does miner compensation work in the cryptocurrency-free environment, and if there are no miners, what are the guarantees that some central entity did not rewind and fork the blockchain?
>How does miner compensation work in the cryptocurrency-free environment, and if there are no miners, what are the guarantees that some central entity did not rewind and fork the blockchain?
You can establish whatever hypothetical situation you desire, but in the real world not all blockchain/cryptocurrencies are designed to operate the same way. Bitcoin, Ethereum and Ripple are all different approaches. They each have their own incentives and use cases, but they all sit atop blockchain.
>Is there a significant difference between Bitcoin and Ethereum approaches?
The two have very different approaches. Bitcoin was designed to be a currency, with blockchain being the mechanism to facilitate transactions. Ethereum was built from the start as a platform to run applications for zero downtime, along with its own cryptocurrency and smart contracts. If you follow the HBO series Silicon Valley, Pied Piper's platform running thanks to the smart refrigerators is reminiscent of Ethereum.
>From what I can tell Ripple expects entities to run validation nodes as a service to the public
Ripple is an oddball, but I threw it in as an example. It was created by a company which mined all of the coins from day one and held onto a significant portion of them, yet claim it was built to connect different payment systems together. For example, here's a statement their lead cryptographer made.
“Payment systems today are where email was in the early ‘80s. Every provider built their own system for their customers and if people used different systems they couldn’t easily interact with each other. Ripple is designed to connect different payment systems together.”
Yes, they removed distributed Proof-of-Work from the equation and used a distributed consensus algorithm instead. They're encouraging companies and institutions who are interested to run their own validator nodes. Running one doesn't make you any money, but it does help make the network more secure. Its an interesting alternative to PoW that doesn't require anywhere near as much electricity as PoW mining does.
If Napster disappeared overnight, literally nothing of value is lost. If Bitcoin disappeared overnight, millions of dollars of value is gone.
That's the game Bitcoin is playing in. It doesn't matter if it becomes a global currency, but if it's not being taken seriously and is just for playing around, there are a lot of people who are going to lose a lot of money. What you're describing is gambling at best, theft and fraud at worst.
I posted another comment above but it reflects on this one as well.
The difference is that napster was centralised even if it was peer to peer. Bitcoin cannot simply disappear in the same way that Bittorent hasn't disappeared, the paradigm is different as there is no central server which tracks the nodes.
In the early days, detractors would said Bitcoin paper doesn't make sense. Then they admitted the paper makes sense, but said there is no value of the coins. Then they admitted the coins had value, but they said only criminals would use it. Then after many established legitimate businesses adopted it, then they said it is only usable by people with computer smarts but not for average folk. Then average folk started using it and they said it is not scalable. Then all these low transaction forks and innovations like the lightning network we're coming out, and then they say, "little shot at ever being a major global currency".
The bar has been constantly rasied, and the crypto currency community continues to pass it. The fact that this mainstream news article is making the high criticism that it won't be a global currency and not one of these earlier lower criticisms is evidence of success.
> Then they admitted the coins had value, but they said only criminals would use it. Then after many established legitimate businesses adopted it, then they said it is only usable by people with computer smarts but not for average folk.
And now many criminals and legitimate businesses are beginning to drop support for Bitcoin [1][2][3]. The crypto currency community is failing to reach pitifully low bars that were set years ago.
Mainstream news articles are making this hype train go much more faster. Feels like a bunch of PR firms are hyping bitcoin and I don't know why. I even saw another Bloomberg post that has the opposite conclusion today. Someone is ordering a bunch of submarines. (See http://paulgraham.com/submarine.html )
Opinions are irrelevant. People will store the value they generate by working in any medium that offers them the most security and long-term increase of value over time. If a cryptocurrency is more secure, convenient, and less deflationary than someone's local fiat counterpart, why would they not store most of their value in it? If we go through 20 years of seeing Bitcoin outperform the inflation of a dollar, no hijackings of the blockchain, no breaking of SHA or ECDSA, why would I not store a majority of my value in it?
If you work in a big city and look around; there are tall office buildings everywhere; packed with millions of people. But what do these people actually do? Is that an efficient use of their time in terms of creating value for each other?
Maybe cryptocurrency is a bubble, but maybe also everything else is a bubble. Companies like Snapchat are worth billions of dollars, but they lose billions of dollars each year. At least most cryptocurrencies don't lose money (except some of them due to electricity costs).
Even companies like Facebook which are themselves profitable are deriving most of their profits by providing services to companies that are unprofitable.
Maybe the total value of all cryptocurrencies isn't actually going up, maybe it's the value of everything else around it that's hyperinflating. Maybe the current system is just begging to be dismantled.