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Goldman Sachs Report Explores Use of Bitcoin as Currency

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Re: Goldman Sachs Report Explores Use of Bitcoin as Currency

#191
post #186

Earlier quoted context omitted.

Gold's intrinsic value is perhaps 10% of it's current value. You are not holding gold because you want to make jewelry, you are holding because of it's perceived value and it's scarcity.

Absolutely, I agree with you. The speculation around gold pushes significantly higher extrinsic value onto it. I'm just making a point that it has a floor of intrinsic value as well, even if that's smaller than the speculative activity.

No it has no floor that can't go away (just like it have no ceiling)

The only way to determine it's value is to see if people want to pay for it. Just because they want to pay for it right now doesn't mean they want to do it tomorrow.

And thats exactly why the idea of intrinsic value should die. It doesn't exist. There isn't an absolute floor only a market determined one .... just like with bitcoin.

Re: Goldman Sachs Report Explores Use of Bitcoin as Currency

#192
post #170

Earlier quoted context omitted.

No, it's not all that distinguishes it from clone coins. Bitcoin has a unique history and a unique set of backers, current and future utility and more trust than any other cryptocurrency. None of the other coins have that. Your argument is like saying that the only thing that distinguishes the USD from the drakmar is branding. There is always a reason why something have a value and people trust it. The value of that…

It has no more utility than a direct clone. None whatsoever. It's a nonsense claim to say it has more than any other - it has less uility than most! Many of the alts added many new capabilities. The US Dollar is supported by a government that will help adjust supply, interest rates etc to keep its value roughly stable and it's utility in place. By design Bitcoin has none of this stuff. I'm not making arguments about…

US dollar is supported by a government (or more precisely a central bank) just like Greece and Venezuela is. But who supports the government? A government can default. The USD can default. It is only in very recent times that currencies have been stable (at the cost of having to grow the economy to beat the inflation) historically they haven't. Just ask the Germans in the 30ies.

It's an illusion to think that just because a government is behind a currency it's exempt from loosing all it's value.

The lender of last resort is the government but governments can fail.

Just because they are stable today does not make them stable tomorrow.

Bitcoin has more utility than a clone because it has a unique history and a unique set of backers (the network) and those backers have exactly the same function as they state.

Bitcoin is better supported than some currencies and worse supported than others. But it exist in that spectrum not separate from it.

Re: Goldman Sachs Report Explores Use of Bitcoin as Currency

#193
post #134

Earlier quoted context omitted.

> Bitcoin's 7x max 1 block per 10 minutes with 4000tx per block results in 7tx/s ... well, why not use blocks of 100x size for starters, that would immediately produce 700tx/s. Still not VISA, yet that would be at least something. The main reason it is not going to happen is probably that that the major Bitcoin stakeholders are completely satisfied with the current situation where they are collecting higher and highe…

Literally the comment above: > On-chain scaling is not sustainable. If you want to handle as many transaction as for example Visa, you would need 1 GB blocks every 10 minutes, which would make the whole blockchain heavily centralized because regular users won't be able to host full nodes to validate payments.

Do we have most of regular users validating payments today? Not really, especially considering that most of the tx happen on exchanges, off the chain.

Re: Goldman Sachs Report Explores Use of Bitcoin as Currency

#194

Bitcoin is not remotely usable as a currency now. The fees are incredible, the confirmation times ridiculous. We need to move on to something more modern like Ethereum, Stellar Lumens, etc. immediately. Asking the current 1 mb blocksize version of Bitcoin to be a currency is like Goldman Sachs writing a report saying they want to run their website on Intel 486 processors. They mention Zimbabwe moving to it as an alte…

On-chain scaling is not sustainable. If you want to handle as many transaction as for example Visa, you would need 1 GB blocks every 10 minutes, which would make the whole blockchain heavily centralized because regular users won't be able to host full nodes to validate payments. About "adopting" and increasing block size. I think most developers agree that we would need to increase it at some point, but I believe cor…

Bitcoin, over the long haul, becomes impossible without checkpointing. Eventually an eternally growing stream of data, becomes too large to transmit and store. Raising the block size just changes the rate.

Re: Goldman Sachs Report Explores Use of Bitcoin as Currency

#195
post #42

Earlier quoted context omitted.

> more like gold But without that nifty property of intrinsic value.

There is no intrinsic value in gold. Or any other thing. The only value things have are the exchange and use values humans imbue them with.

That is not what intrinsic value means. Gold has value in electronics and jewelry (people will always value gold for jewelry and other ornamental objects, have since its discovery). You cannot just pedantically re-define the economic meaning of the term; the rest of the world disagrees with you.

Re: Goldman Sachs Report Explores Use of Bitcoin as Currency

#196

Earlier quoted context omitted.

There is no intrinsic value in gold. Or any other thing. The only value things have are the exchange and use values humans imbue them with.

That is not what intrinsic value means. Gold has value in electronics and jewelry (people will always value gold for jewelry and other ornamental objects, have since its discovery). You cannot just pedantically re-define the economic meaning of the term; the rest of the world disagrees with you.

Before electronics gold had two types of usages. Jewelry and store of value. Before a monetary system gold had some value as jewelry, before the ability to create jewelry or ornamental objects it had no value. In other words the "intrinsic value" is contextual and not objective.

Intrinsic value means the actual value but the only way to determine the actual value is to see what people will pay for it in an exchange. In other words the market determines the value of gold based on a set of assumptions. These assumptions can change in the future. Bitcoin is also valued by the market based on a set of assumptions.

The world doesn't disagree with parent, in fact it agrees with him and bitcoin is the proof of this.

You can't both have your cake and eat it. Either gold and bitcoin have intrinsic value by the economic definition and the market determines what that is or neither of them have.

Re: Goldman Sachs Report Explores Use of Bitcoin as Currency

#197
post #170

Earlier quoted context omitted.

It has no more utility than a direct clone. None whatsoever. It's a nonsense claim to say it has more than any other - it has less uility than most! Many of the alts added many new capabilities. The US Dollar is supported by a government that will help adjust supply, interest rates etc to keep its value roughly stable and it's utility in place. By design Bitcoin has none of this stuff. I'm not making arguments about…

US dollar is supported by a government (or more precisely a central bank) just like Greece and Venezuela is. But who supports the government? A government can default. The USD can default. It is only in very recent times that currencies have been stable (at the cost of having to grow the economy to beat the inflation) historically they haven't. Just ask the Germans in the 30ies. It's an illusion to think that just be…

I didn't say it's exempt from losing value, however we have some fairly good means of trying to ensure that doesn't happen, which have been relatively successful of late.

With Cryptocurrencies there are none, by design.

>> Bitcoin has more utility than a clone because it has a unique history and a unique set of backers (the network) and those backers have exactly the same function as they state.

This is utter nonsense, backers have none of the power of the state to alter supply, set rates etc etc.

>> Bitcoin is better supported than some currencies and worse supported than others. But it exist in that spectrum not separate from it.

Well, given the fees, processing times, lack of support mechanisms and transaction processing limits, I'd say it's a damn poor one.

Re: Goldman Sachs Report Explores Use of Bitcoin as Currency

#198
post #166

Earlier quoted context omitted.

It has first mover advantage and a brand name. That's literally all the distinguishes it from clone coins. There being a set amount is only relevant in that context.

What distinguishes from the clone coins is its dev team.

Only if clones don't get to re-use the output of the dev team.

Which they do.

Re: Goldman Sachs Report Explores Use of Bitcoin as Currency

#199
post #88

Earlier quoted context omitted.

Either the Lightning Network has found a solution to the routing problem which the entire internet has relied upon since 1989 [1], or the LN marketing is disingenuous and the actual implementation will be nothing more than an excuse to extract wealth to centralized payment processor hubs, further distancing Bitcoin from the main design of electronic cash: "A purely peer-to-peer version of electronic cash would allow…

jstanley makes a very good point, especially considering that Bitcoin itself is a probabilistic good-enough solution to the Byzantine Generals Problem, rather than a perfect deterministic one. But you didn't even address jstanley's question, you just repeated the exact same talking points you posted higher up in this thread, hoping that readers can't tell the difference. That is not an honest debate, but propaganda.…

I cited BGP.

You've provided no technical details, only an ad hominem fallacy.

Feel free to explain actual technical details of how LN does anything interesting, other than further centralize Bitcoin into centralized payment processor hubs?

As per the LN white paper:

  8.4 Payment Routing

  It is theoretically possible to build a route map 
  implicitly from observing 2-of-2 multisigs on the 
  blockchain to build a routing table. Note, however, this 
  is not feasible with pay-to-script-hash transaction 
  outputs, which can be resolved out-of-band from the 
  bitcoin protocol via a third party routing service. 
  Building a routing table will become necessary for large 
  operators (e.g. BGP, Cjdns). Eventually, with 
  optimizations, the network will look a lot like the 
  correspondent banking network, or Tier-1 ISPs.

Re: Goldman Sachs Report Explores Use of Bitcoin as Currency

#200

The article makes the point that Bitcoin could be viable in many countries where people already use foreign currencies because they don't trust their domestic currency. That's one of the few arguments for cryptocurrency that I find convincing, but I think it's a stronger argument for cryptocurrencies other than Bitcoin. The Bitcoin transaction fees are so high right now that it doesn't make sense to use it for small…

I am struggling to see how cryptocurrencies would have any tangible advantage over US Dollars in developing nations. Remember that in many of these countries, most people don't have smart phones, and there's a lot of people who don't even have phones. Electricity and internet connections are intermittent at best. Good luck convincing Cambodian street hawkers that your magic internet money is better than a good old fa…

I'll outline the argument, and let you decide. (I made a lot of generalizations below regarding developing economies/countries, I'm sure I'm wrong in some cases, this is just what I know largely to be true)

>Remember that in many of these countries, most people don't have smart phones, and there's a lot of people who don't even have phones.

Depending on the country you're talking about, smartphone penetration for a lot of Africa is over 20% by population, increasing with increasing wealth or earnings. Cambodia, from your example, has about 50% smartphone penetration and 98% mobile phone penetration.

>Electricity and internet connections are intermittent at best.

Anecdotally, I can report that 3G coverage is ubiquitous in mid-size or larger population centers in Asia and Africa, even in very poor countries. In the countryside, it is hit or miss.

>Good luck convincing Cambodian street hawkers that your magic internet money is better than a good old fashioned Greenback.

I don't think small scale transactions are the use case for developing economy cryptocurrency utilization. Rather, the argument is that households may prefer an alternative to their local currency which allows them to hold liquid or semi-liquid savings. In developed economies we have bank accounts, stocks, bonds, CDs, and many other vehicles allowing for liquid store of value, and we (mostly) trust the government and banking system. In developing economies, lower and middle class households often have only cash vehicles. Some may have bank accounts, but those are subject to governmental whims (see India's disastrous surprise currency change last year) or currency volatility. When possible, many households will hold long-term savings in USD or EUR cash notes, as those are perceived as safe (wealthy households typically do the same, only by having a USD or EUR denominated bank account with a local or, preferably, international bank). Households save up local currency and then change it out for these high denomination USD/EUR cash notes with a bank or money changer. They would not go use $100 bills at the local market for groceries, they would change their currency back to local fiat if needed. Alternatively, they can sometimes transact large purchases with USD or EUR notes for things like computers, cars, property, and livestock.

Essentially, the argument for cryptocurrency as a store of wealth in developing countries is: 1)households would prefer not to hold notes, as they are more easily lost or destroyed than a backup key would be 2)there are fewer transactions to deal with in exchanging currencies 3)remittances are easier and lower cost 4)holding high value notes only works for households of a certain wealth class, cryptocurrencies will allow lower income/wealth households to do what middle-lower income/wealth households are already doing

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