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Digital coins may be on the verge of going mainstream

nytimes.com

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Re: Digital coins may be on the verge of going mainstream

#111

Post by neilwilson »

jknz wrote: post #68

Bitcoin seems quite straightforward and easy to understand, compared to our current banking system. A lot of comments mention the difficulty of explaining what is bitcoin and how it works, and that mainstream people cannot get enough understanding to start using it. What about the actual banking system? There are so much mainstream ignorance about our current banking system. What does it even mean that I own $2000 at…

It means exactly the same as bitcoins. You have an entry on some computers somewhere.

The difference is that the entry on a regulated bank's computer can be used to settle a tax bill, or a loan. The entry in a blockchain can do neither.

So at some point you have get the right sort of money to settle debts imposed on you by wider society.

Blockchain 'currencies' are just intangible bottles of wine, artworks, or tulip bulbs and will go through the same bubble and bust as all those things have previously.

Re: Digital coins may be on the verge of going mainstream

#112

Post by kowdermeister »

sillysaurus3 wrote: post #3
booleandilemma wrote: post #2

My parents know about bitcoin, so as far as I'm concerned digital coins are already mainstream. I'm still waiting for them to ask me what an ICO is.

What is an ICO? (I'm only being half-serious. But it's amusing that there isn't a consistent definition. It's basically "you can buy an asset I created out of thin air that may or may not have any utility.")

Pretty good summary:

http://www.investopedia.com/terms/i/initial-coin-offering-ic...

Re: Digital coins may be on the verge of going mainstream

#113

Post by neilwilson »

wingerlang wrote: post #83
honestlyreally wrote: post #80

Earlier quoted context omitted.

If everyone wants to take their $2000 out at once, can they? In most countries that's highly unlikely, so is it really $2000? Or something entirely different?

I think it is common knowledge that banks use money to invest, lend to others for profit and so on. So no, not everyone could take it out at once as it would crash the bank. I guess you could say that they hold your $2000 most times, but at times they use it for something else and are in debt to you. I don't think on the user-level it is complicated at all. You can literally go to a bank, have them create your accoun…

It's common understanding. It's also completely wrong.

Banks are money factories, not warehouses. When you go for a loan the Bank creates the money for you on the spot. DR Loan Assets, CR Deposits.

We pay for things by swapping somebody else's liabilities with each other.

Re: Digital coins may be on the verge of going mainstream

#114

Post by neilwilson »

jondubois wrote: post #106

Money has been getting increasingly less tangible over the past few thousand years. Initially, the value of money was in the materials that made it up; e.g gold, silver coins. Then people started paying with paper backed by gold; so although the paper itself had no value, it could be used to redeem gold. ... People got used to paper. Then people started paying with paper fiat currencies not backed by anything. Then p…

Money has never been tangible. It always has been a token for a debt owed by somebody.

There is no difference between a paper bill, a coin and a cheque other than the account it references.

Re: Digital coins may be on the verge of going mainstream

#115

Post by capex »

legulere wrote: post #88
mrb wrote: post #30

Earlier quoted context omitted.

" What is cryptocurrency going to help these people do that they can't do already today? " International payments confirmed and spendable in minutes not days. Escaping inflation in Venezuela/Argentina/whoeverisnext. Sending remittance to family overseas without 10% wasted in fees. Receiving monetary donations for organizations that might be victim of oppressive censorship. Participating in modern e-commerce for the u…

> International payments When was the last time you made an international payment? I never made a payment outside of the EU and inside the EU I already have free wire transfers. For most people this is not interesting. > unbanked/underbanked You have the right to a bank account in the EU. > Allowing merchants to save 2% in credit card fees Currently Bitcoin is more expensive for typical transactions. And there's dire…

'International' exists outside of EU. Actually most of the problems mentioned above belong to the vast majority of people outside the developed west.

Re: Digital coins may be on the verge of going mainstream

#116

Post by zAy0LfpBZLC8mAC »

wingerlang wrote: post #83
honestlyreally wrote: post #80

Earlier quoted context omitted.

If everyone wants to take their $2000 out at once, can they? In most countries that's highly unlikely, so is it really $2000? Or something entirely different?

I think it is common knowledge that banks use money to invest, lend to others for profit and so on. So no, not everyone could take it out at once as it would crash the bank. I guess you could say that they hold your $2000 most times, but at times they use it for something else and are in debt to you. I don't think on the user-level it is complicated at all. You can literally go to a bank, have them create your accoun…

Which primarily shows that you don't understand the banking system?

Banks generally don't invest (with the exception of investment banks, but that does not have anything to do with the money in your account). They don't hold your money at all, rather they are in debt to you the moment you put money into your account. Also, there are way more functions and processes at a bank than "putting money into your account" and "withdrawing from your account".

Re: Digital coins may be on the verge of going mainstream

#117

Post by _nalply »

jordigh wrote: post #41
CPLX wrote: post #22

Earlier quoted context omitted.

But with Google your Mom can find out when the store is open and where it is. Facebook lets grandparents see photos of grandchildren. Reading a blog replaces reading the gossip column in the daily paper. You could finally buy plane tickets without driving somewhere. And so on. The early web was really fucking useful as it started to mature. It solved a lot of real problems. What is cryptocurrency going to help these…

For me the real benefit of bitcoin is how easy it makes it to send money on the internet. If society at large treated bitcoin like a currency (i.e. suitable for settling all debts, whether public or private), the ease with which it can be sent online without intermediaries, anywhere in the world is what's really great about it. Internet money, true international internet money. That's what I like about it. If you jus…

It's illuminative that you didn't mention the trustlessness of blockchain.

After all that was the original idea: Anybody can verify transactions without asking a central authority. But this is mostly not happening.

Why?

It's too difficult. To really trust blockchain on your own you have to understand game theory, cryptography and networks. You have to read source code and compile your clients yourself. Almost nobody does that.

So what's the point?

People are mostly in it for gambling or because they don't have a choice, for example illegal transactions. A honest answer whether they trust bitcoin would be a resounding no! And the banks? They see a way to reduce costs. Then the customers will trust the bank telling them to use it (or not).

It's quite a perversion. I predict: Blockchain will succeed not because of its trustless nature but because it helps reducing transaction costs.

Poor Satoshi Nakamoto would roll over in his grave (if he is dead).

Re: Digital coins may be on the verge of going mainstream

#118

Post by tudorw »

The value of fiat currency is that the issuing entity assures it's worth, ensures it's security, it's validity and facilitates flow. The benefits of cryptocurrency may look appealing, however, as a store of wealth it's a long way from 'mainstream' and I believe entropy will prevail, in the fiat system entropy is handled, the supply of money is flexible, in a system with entropy, everyone's wealth will tend towards zero over the long term.

Re: Digital coins may be on the verge of going mainstream

#119

Post by wingerlang »

zAy0LfpBZLC8mAC wrote: post #116
wingerlang wrote: post #83

Earlier quoted context omitted.

I think it is common knowledge that banks use money to invest, lend to others for profit and so on. So no, not everyone could take it out at once as it would crash the bank. I guess you could say that they hold your $2000 most times, but at times they use it for something else and are in debt to you. I don't think on the user-level it is complicated at all. You can literally go to a bank, have them create your accoun…

Which primarily shows that you don't understand the banking system? Banks generally don't invest (with the exception of investment banks, but that does not have anything to do with the money in your account). They don't hold your money at all, rather they are in debt to you the moment you put money into your account. Also, there are way more functions and processes at a bank than "putting money into your account" and…

So where do the $2000 go when I hand the bills over? Surely they keep it somewhere. And when I want to take it out, they give it back to me (obviously not the same bills).

But yeah, I don't really know how banks work and what they do. But for the average jo (me included) is is all extremely simple to use - which is my point, that Bitcoins are not.

Re: Digital coins may be on the verge of going mainstream

#120

Post by lapphi »

rubatuga wrote: post #94
jordigh wrote: post #41

Earlier quoted context omitted.

For me the real benefit of bitcoin is how easy it makes it to send money on the internet. If society at large treated bitcoin like a currency (i.e. suitable for settling all debts, whether public or private), the ease with which it can be sent online without intermediaries, anywhere in the world is what's really great about it. Internet money, true international internet money. That's what I like about it. If you jus…

Wait? Inefficient? But how about the millions of dollars spent on electricity to mine bitcoins? I’m sure you could reach a level of trust at a fraction of that cost!

At least it's nonviolent, compared to some fiat currencies.
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