I don't understand how someone can talk about making everyday purchases with BTC without addressing the transaction fees and confirmation times. Doesn't it currently cost several dollars to spend a dollar? Is there some reason to think that in the far future confirmation times and transaction fees will trend towards zero?
The Cryptocurrency Singularity
31–40 of 90 posts
Re: The Cryptocurrency Singularity
#32Earlier quoted context omitted.
Bitcoin is not "better" than fiat currencies, it's worse in every way except for the fact that it is not operated by a central authority. In terms of convenience, security, and ease of use it is clearly worse. The world does need a "back channel" currency, and bitcoin is a perfect fit for this, but it will never move beyond that because there's simply no reason for the masses to use it.
> it's worse in every way except for the fact that it is not operated by a central authority National currencies are better for buying a cup of coffee and paying your taxes. But over the last 9 years, Bitcoin has proven to be a far superior store of value. Maybe Bitcoin's role will be as a reserve currency, the "gold standard" of both national currencies and cryptocurrencies. Bitcoin is slow, stable, secure and relia…
You find Bitcoin stable?!
Re: The Cryptocurrency Singularity
#33Rothbard's History of Money and Banking in the United States: The Colonial Era to World War II [1] wades through hundreds of years of Gresham's Law in action. Special attention is devoted to par laws and legal tender laws in exacerbating the tendency of banks to print more notes than there is metal in the vault. [1] https://mises.org/library/history-money-and-banking-united-s... (free audio book, epub, and pdf availa…
Aw, you had me until mises.org. I prefer to get my economics from reputable sources.
Re: The Cryptocurrency Singularity
#34Once Bitcoin gets linked up with Litecoin, lightning network, and atomic swaps, seems like it will become more viable as a payment channel. It still beats me, however, as to why anyone would by anything with it if it might be worth twice as much in 6 months. Of course, it could also be worth half as much.
When I buy things with Bitcoin, I typically convert more fiat currency to BTC to keep my BTC balance constant.
So you're buying things with fiat currency.
Re: The Cryptocurrency Singularity
#35Once Bitcoin gets linked up with Litecoin, lightning network, and atomic swaps, seems like it will become more viable as a payment channel. It still beats me, however, as to why anyone would by anything with it if it might be worth twice as much in 6 months. Of course, it could also be worth half as much.
When I buy things with Bitcoin, I typically convert more fiat currency to BTC to keep my BTC balance constant.
So why not just use fiat? Coinbase used to offer this service, where you would 'auto-topup' your balance, but removed this because it was silly as it generated multiple tx's just to do what paying in fiat would achieve in the first place.
As time goes on, the notion that coffee or meals are suitable to be paid in bitcoin seems more absurd. You would no more pay for a meal with a gold bar than you would with a Krugerrand. It will be seen as decadent for all those pizzas, controlled substances and ransoms to have been paid in BTC -- a kings ransom for pizza?
Bitcoin will likely never be a general purpose payment network. Lightning MAY if it obtains support from legacy services like VISA and MASTERCARD. I suspect V/MC will be the lightning nodes with the most payment channel volume.
Re: The Cryptocurrency Singularity
#36I don't understand how someone can talk about making everyday purchases with BTC without addressing the transaction fees and confirmation times. Doesn't it currently cost several dollars to spend a dollar? Is there some reason to think that in the far future confirmation times and transaction fees will trend towards zero?
Bitcoin is not the only cryptocurrency, and not all cryptocurrencies are based on a blockchain data-structure.
There are other currencies which are not-inflationary, trustless and decentralized, and many more currencies with various levels of those properties, some are more centralized and require trust in a few in various ways, and some are decentralized trust-less but still inflationary.
There is even cryptocurrencies which do not use Proof-of-Work, or Proof-of-Stake, or Proof-of-Anything - but still can reach consensus in open distributed network.
Re: The Cryptocurrency Singularity
#37This is full of misunderstandings about monetary policy.
Currencies that are not designed to lose value over time can not be stable. Intrinsically worthless tokens engineered to have better than market risk adjusted, liquidity adjusted, real returns compared to real productive investment will always be unstable and fluctuate increasingly wildly as they get more popular. This is a result of physical limits of production. As people hoard worthless tokens, their price increases which causes more people to hoard them instead of investing in real businesses with real production capacity.
This eventually causes production capacity to drop. That's right, when enough people do it, token hoarding displaces investment in businesses and factories and lowers global production capacity. This means token hoarding causes a future drop in things available to buy with these tokens.
Eventually there will be people who want to buy real things with their stock of tokens. The tokens will be chasing fewer goods which means prices for stuff will rise (tokens will lose value). This might happen suddenly when people with large stockpiles of tokens notice that value is dropping and that there are tons of other tokens waiting on the sideline to make it drop even further. Hoarders might rush to get rid of their stockpile all at the same time before they're worthless which will cause their fall to worthlessness. This drop will bring the tokens closer to their natural intrinsic value of zero. The cycle can then start again, such is aggregate economics.
The 1920s and 1930s suffered from this type of production drop but with gold tied currencies instead of cryptocoins. It happened to a lesser extent in 2007 when western world central banks failed to keep inflation rates high enough.
It's important for the world's sake to not let deflationary currencies become too popular. When savings or financial promises are insufficiently tied to future production or to accumulation of real goods, there will be disappointment when many people try to exchange them for real stuff. That is true for crypto currencies as well as government currencies (that is why the system is designed to make banks invest people's money in real businesses and minimize the proportion of money that is stockpiled idly).
It's true that crypto currencies are currently not widely held enough to significantly affect the aggregate economy but speculation already keeps them volatile and the knowledge that as they get more popular, there will be more macroeconomic pressures towards volatility keeps the speculation wild and cryptocoins unstable.
Re: The Cryptocurrency Singularity
#38Whenever I read articles like this I'm reminded of this quote by Richard Buckminster Fuller "You never change things by fighting the existing reality. To change something, build a new model that makes the existing model obsolete." IMHO this is what Bitcoin is all about. Not a get-rich-quick scheme or whatever insults some people throw at it, but a sound, arguably better alternative to fiat currencies. Aside: If you h…
Bitcoin is not "better" than fiat currencies, it's worse in every way except for the fact that it is not operated by a central authority. In terms of convenience, security, and ease of use it is clearly worse. The world does need a "back channel" currency, and bitcoin is a perfect fit for this, but it will never move beyond that because there's simply no reason for the masses to use it.
You are quite mistaken.
We can't trust fiat currencies but we didn't have any other choice for a very long time so we got used to them. There is no way for you to carry hundreds of notes and coins on you and feel secure let alone convenient.
As for ease of use, I remember when the Euro was introduced many people were super confused with the new currency.
Re: The Cryptocurrency Singularity
#39I was hoping this article was going to be a serious look at if an AI could run on a currency like Ethereum.
A few months back I wrote a tongue in cheek version about if the DAO hack was to prevent the singularity [1]. But I'd be curious if it were actually possible.
1. http://arthur-johnston.com/essay/2016/06/26/Rokos_DAO.html
Re: The Cryptocurrency Singularity
#40I was hoping this article was going to be a serious look at if an AI could run on a currency like Ethereum. A few months back I wrote a tongue in cheek version about if the DAO hack was to prevent the singularity [1]. But I'd be curious if it were actually possible. 1. http://arthur-johnston.com/essay/2016/06/26/Rokos_DAO.html
If an AI can run on a universal Turing machine, then it can run on a Turing-equivalent platform like ether.
That doesn't make it a good or economical idea.