Beyond the Bitcoin bubble • Hacker News Board

Re: Beyond the Bitcoin bubble

#181

Post by RealityVoid » Tue, Jan 16, 2018, 9:04 PM UTC

raiyu wrote: post #85

catbird wrote: post #64

I don't understand the transit example presented in this article. I feel like I am missing something fundamental about the utility of any of these distributed services backed by their own type of coin. For the transit example you have some people who want to request rides, and some people who want to provide rides. OK. Someone develops an application to process these requests, in some kind of bidding system... How ar…

You hit the nail on the head, the challenge with Blockchain and Bitcoin is that it did two things, which together were supposed to tackle the original problem, peer to peer monetary exchange without a trusted intermediary. So for that the blockchain provides the trust mechanism which is useful. However, the blockchain is just the channel, it needed a medium of exchange, you couldn't very well use USD because then you…

> Now absent speculation, the price of BitCoin would be reasonable, and determined by the effort of the miners, since they are exchanging their fiat currency for computers and energy, and that creates a stable layer for the price.

You've got it backwards. The effort by the miners is determined by the price of Bitcoin, not viceversa.

Also, I think requiring what you suggest is a fallacy, since I, as a user of some tech, don't care about how hard it is to maintain that tech, I only care for its utility to me. If that utility is lower than the cost, I won't pay for it, even though the creator might have poured more effort.

Re: Beyond the Bitcoin bubble

#182

Post by v64 » Tue, Jan 16, 2018, 9:05 PM UTC

prepend wrote: post #176

v64 wrote: post #108

It's strange to me how there are many among the Hacker News crowd who can read an article like this and have doubts about its thesis. You lived through the 80s and 90s right? I can't count how many times in my life I was told no one would ever need a computer in their house, we've gotten along for decades just fine without them. No one will ever buy books online, that's ridiculous, you can go to the store and have on…

You have a really good point. My issue is that the speculation is tied so closely with cryptocurrency. The future will definitely have cryptocurrency used in ways we can’t even imagine. Digital cash will be huge. That I believe. That any of the current currencies warrant any value at all much less the speculation, I’m iffy on. Both statements “the future is crypto” and “current crypto is a bubble and all are worthles…

> So the article doesn’t seem in conflict with my HN reading, 80s/90s surviving self any more than me thinking AOL and Broadcast.com sucked back then even though I bet my whole career on the Internet.

I think we agree and I haven't made my point clear. To use your analogy, my criticism was more directed toward those who think AOL = the Internet. I'm not cheering for Bitcoin per se, but I'm cheering for the development of the technology underlying it, and disagree with those here in the comments who are saying we don't need blockchains because we already have relational databases.

Re: Beyond the Bitcoin bubble

#183

Post by acdha » Tue, Jan 16, 2018, 9:07 PM UTC

alphydan wrote: post #143

acdha wrote: post #101

Earlier quoted context omitted.

That’s a common marketing claim but the comparison has problems: Bitcoin is turning 10 without a single application where it has a significant advantage over the status quo unless you count ransomware. In contrast, as soon as the internet became available to normal people they had immediate new or improved options for a bunch of different activities. Yes, speculators backed a lot of bad business ideas but that was be…

> Bitcoin is turning 10. It all depends on where you start counting. In 2008 it was just Satoshi and a few cypherpunks. I would argue it looked a lot like Arpanet [0]. So Fast forward 10 years from 1973 ... and was the internet really useful in 1983? On January 1st 1983, "every machine connected to ARPANET had to use TCP/IP. TCP/IP became the core Internet protocol and replaced NCP entirely." [1] ... hardly a huge co…

I don't think that comparison holds so tightly, but if it did it seems to make it worse: ARPANET had significant dependency delays in availability since computers cost a fortune, modems were slow, and you had to pay by the minute for phone calls. In contrast, despite Bitcoin being available to everyone on the first day most people have never had a reason to use it other than speculation.

That said, there were still plenty of ARPANET users in the early days if you look at the subset of people for whom network access was an option. The benefits of email were obvious and group forums like Usenet (1980[1]) had similar quick adoption, at least in technical or academic fields where communicating with people outside of your location was important. Similarly, FTP (1980[2]) had clear value and the pricing made sense more often than it might have seemed since all of the other alternatives cost money, too.

The other thing to remember is that this wasn't happening in a vacuum — while the internet was emerging, there was popular mainstream usage for companies like The Source, CompuServ, etc. starting in the late 1970s[3] and so again there was clearly a business opportunity if you could bring the access costs down. The number of people willing to pay by the minute to chat, shop, etc. suggested that an even large number of people would be interested as that per-minute rate dropped.

It's that last part which makes me question the current valuations: even if you assume that all of the operational problems were solved with Bitcoin, it's hard to see what value it has to the ordinary person beyond possibly reclaiming the ~3% overhead of a credit card transaction — and that's assuming that VISA, et al. wouldn't just lower their rates to beat whatever the operational cost + fraud insurance costs ended up being for Bitcoin.

1. https://en.wikipedia.org/wiki/Usenet#History

2. https://tools.ietf.org/html/rfc765

3. There's a great series starting with https://www.filfre.net/2017/10/a-net-before-the-web-part-1-t...

Re: Beyond the Bitcoin bubble

#184

Post by v64 » Tue, Jan 16, 2018, 9:09 PM UTC

nora4 wrote: post #177

v64 wrote: post #140

Earlier quoted context omitted.

> I lived through the 80s and early 90s. The difference is that I could do stuff with the early Internet. I could do stuff with BBSes. I could do stuff with early PCs. These things were almost immediately very useful to a lot of people. You must have hung out with a nerdier crowd than I did :) I was the only person I knew who owned a personal computer until well into the late 90s. > The reason I've become a bear on c…

I liked your answer. But you didn't answer his/her other criticism: "...It's almost 10 years old and today it's actually less useful than it was a few years ago due to runaway fee growth. The feedback system works in the wrong direction. Did the Internet get less useful the more people used it?" The fact that network effects to some extent works in the wrong direction for this technology is concerning. What happens w…

Cryptocurrency isn't blockchains anymore than AOL is the Internet. Bitcoin may be getting less useful, showing that a proof of work system that incentivizes miners the way it does may be broken, but this doesn't fundamentally cease to justify the use of blockchains as a data structure. It just means we need to figure out a way to keep blockchain security while improving/replacing proof of work.

Re: Beyond the Bitcoin bubble

#185

Post by martin1975 » Tue, Jan 16, 2018, 9:11 PM UTC

companyhen wrote: post #171

martin1975 wrote: post #106

The answer to the fundamental ills of both Ethereum and Bitcoin is addressed in Cardano, which has been hard at work for 2+ years to create Ada and the first formally verified PoS type algorithm, Ouroboros. I wish more people would wrap their heads around the rigid approach to developing Ada that Cardano's taken so the light will come on... sort of like seasoned imperative language programmers who get bitten by the F…

Coin shilling has officially entered HN.

It's more like their tech I'm shilling. But hey, you're welcome to downvote me.

Re: Beyond the Bitcoin bubble

#186

Post by test6554 » Tue, Jan 16, 2018, 9:15 PM UTC

prepend wrote: post #176

v64 wrote: post #108

It's strange to me how there are many among the Hacker News crowd who can read an article like this and have doubts about its thesis. You lived through the 80s and 90s right? I can't count how many times in my life I was told no one would ever need a computer in their house, we've gotten along for decades just fine without them. No one will ever buy books online, that's ridiculous, you can go to the store and have on…

You have a really good point. My issue is that the speculation is tied so closely with cryptocurrency. The future will definitely have cryptocurrency used in ways we can’t even imagine. Digital cash will be huge. That I believe. That any of the current currencies warrant any value at all much less the speculation, I’m iffy on. Both statements “the future is crypto” and “current crypto is a bubble and all are worthles…

My main concern are the transaction fees. The software needs to let me set whatever fee I want to pay, knowing that I might be totally fine waiting a month for the transaction to go through.

Re: Beyond the Bitcoin bubble

#187

Post by mhb » Tue, Jan 16, 2018, 9:19 PM UTC

frgtpsswrdlame wrote: post #111

mhb wrote: post #97

Earlier quoted context omitted.

it is illegal for him not to accept the national currency According to the United States Department of the Treasury’s site[1], there is no federal law requiring that businesses accept currency or coins as payment for goods or services. [1] https://www.treasury.gov/resource-center/faqs/Currency/Pages...

Yes but not accepting currency[0] or coins is different from not accepting USD. In the United States a creditor may choose to only accept certain forms of USD (ie. no $100 bills at some stores) but they still must accept USD in some form. [0] It is obvious from your link that the Treasury intends "currency" to be interpreted as paper money, see this: There is, however, no Federal statute mandating that a private busi…

I'd be interested in your reference. I think it's obvious that businesses aren't required to accept credit cards, checks, ACH transfers, whatever else. If they also aren't required to accept bills or coins, it would seem as though they don't need to accept payment in USD in any form.

This creates a problem for them, but why do you think they must accept USD in some form?

Re: Beyond the Bitcoin bubble

#188

Post by mhb » Tue, Jan 16, 2018, 9:22 PM UTC

dragonwriter wrote: post #127

mhb wrote: post #97

Earlier quoted context omitted.

it is illegal for him not to accept the national currency According to the United States Department of the Treasury’s site[1], there is no federal law requiring that businesses accept currency or coins as payment for goods or services. [1] https://www.treasury.gov/resource-center/faqs/Currency/Pages...

post-service payment is a debt, taxi payment is usually post-service, and as your own link says “This statute means that all United States money as identified above are a valid and legal offer of payment for debts when tendered to a creditor”. The import of this is that such an offer (even if rejected) has a substantial impact on the creditors legal ability to pursue a debt.

I agree that limiting one's accepted methods of payment is problematic for a business, but it's not illegal for a business to not accept bills and coins.

Re: Beyond the Bitcoin bubble

#189

Post by dragonwriter » Tue, Jan 16, 2018, 9:27 PM UTC

mhb wrote: post #188

dragonwriter wrote: post #127

Earlier quoted context omitted.

post-service payment is a debt, taxi payment is usually post-service, and as your own link says “This statute means that all United States money as identified above are a valid and legal offer of payment for debts when tendered to a creditor”. The import of this is that such an offer (even if rejected) has a substantial impact on the creditors legal ability to pursue a debt.

I agree that limiting one's accepted methods of payment is problematic for a business, but it's not illegal for a business to not accept bills and coins.

It's not illegal for a business not to accept bills and coins, true; but there are potential adverse consequences on ability to collect debts and otherwise available nonpayment penalties (interest, etc.) if you reject a legal tender offer for valid debt.

Lots of businesses (e.g., typical retail) deal primary with payment in advance of providing goods and services and don't mainly deal with debt, so this isn't a concern. Legal tender is (as the text on paper US currency lays out fairly explicitly) an issue that comes into play with settlement of debt.

Re: Beyond the Bitcoin bubble

#190

Post by v64 » Tue, Jan 16, 2018, 9:29 PM UTC

miscreanity wrote: post #179

DenisM wrote: post #158

Earlier quoted context omitted.

So your point is that some technologies take a lot longer to mature than average, for example {some examples}, and the delay itself should not be held against such late-blooming technologies. I'm onboard with that. Although your argument may benefit from better phrasing, because it actually does come across like that, which is a disservice to your advocacy effort. Back on topic, I don't see a lot of people in this th…

The ultimate use case is control and tracking beyond any form created thus far. Paper currency that may be in your pocket has serial numbers printed on it. Those numbers cannot be readily associated with an individual. Bitcoin and all other blockchain systems can be connected to a user directly or through alternative methods. This is ideal for government and is the direction most are taking - control over blockchain…

This is a great point that I don't see a lot of people making. The US government would love nothing more than having a USDCoin that allows them to see exactly how money flows from person to person and institution to institution, as well as having a way to revoke your coins at will.

The draconian implications of this technology, like many others, concern me greatly. Thanks for providing this perspective.