Beyond the Bitcoin bubble • Hacker News Board

Re: Beyond the Bitcoin bubble

#231

Post by v64 » Wed, Jan 17, 2018, 1:41 PM UTC

gist wrote: post #198

v64 wrote: post #123

Earlier quoted context omitted.

> So are you saying that it's more rational to simply think 'anything is possible' even though the available evidence and information seems to point to the fact that that isn't the case? At what point do you believe the internet had made its case as a technology? 1975? 1985? 1995? 2005? In each of those years, you had naysayers saying the internet would never become something people use in their daily lives, but here…

> Many business owners in the 90s looked at computer and internet technology and dismissed it as a fad that would cease to exist in 5 years Well I've been around this for much longer than the 90's. Since the late 70's actually. I don't remember it that way at all. What I remember was that at the time it was either to expensive or the company (small ones) didn't have the time or resources to stop what they were doing…

Out of curiosity, where did you live and what sector did you work in? From my own experience, I agree that the businesses that were excited about computer technology were businesses with high amounts of inventory and paperwork where automation could greatly simplified their business processes, and that many of these businesses were located in urban centers that were at the forefront of infrastructure. These large businesses can make large profit by cutting margins by a few points, so it made sense for them. It was from small to medium sized businesses where I saw the most resistance, both from a cost and a cultural point of view. I demonstrated broadband internet to individuals at the time and still couldn't convince them of its merits, so I don't think everyone then understood the implications of fast, always on internet.

Even just 5 years ago, I worked for a tech company in the self-storage industry, and many large operators were still running their entire businesses in physical ledgers with no equivalent computerized records. There is still a strong resistance among many older businesses to convert to computerized records, despite the clear cost savings that can be demonstrated at this point. Reasons include not wanting to learn a new system and being afraid that the business couldn't run if the internet goes out. As I said, this was in 2012.

Re: Beyond the Bitcoin bubble

#232

Post by thatthatis » Wed, Jan 17, 2018, 1:45 PM UTC

v64 wrote: post #123

gist wrote: post #116

Earlier quoted context omitted.

So are you saying that it's more rational to simply think 'anything is possible' even though the available evidence and information seems to point to the fact that that isn't the case? After all you don't go around thinking that a country like (insert small insignificant country) is ever going to pass the United States in ability but sure 'anything is possible'. It could happen after all the US surpased Europe in man…

> So are you saying that it's more rational to simply think 'anything is possible' even though the available evidence and information seems to point to the fact that that isn't the case? At what point do you believe the internet had made its case as a technology? 1975? 1985? 1995? 2005? In each of those years, you had naysayers saying the internet would never become something people use in their daily lives, but here…

I think the internet proved its core thesis of usefulness with the installation of the first transatlantic telegraph line.

Instant, zero marginal cost communication reduced cost, and improved decision speed.

telegraph:instant communication::bitcoin:block chain

internet:instant communication::______:block chain?

Re: Beyond the Bitcoin bubble

#233

Post by v64 » Wed, Jan 17, 2018, 1:50 PM UTC

thatthatis wrote: post #230

iamwil wrote: post #145

Earlier quoted context omitted.

It's just really hard for people to see beyond the present. Innovators in one cycle are often blind to the opportunities in the next. I see it in a couple of my successful friends that built their own companies on the web and mobile when it comes to crypto. I'm reminded of the quote about the radio: “The wireless music box has no imaginable commercial value. Who would pay for a message sent to no one in particular?”…

I can't tell you how excited I am to have an aerial drone deliver a keto-friendly pizza to my driverless hotel room minutes after I get out of a hyper loop station. Most world changing technologies have visionaries forecasting their effect, even in spite of the naysayers. You are correct that the presence of nay-sayers has no impact on the viability of a technology. But you're looking at the wrong variable. Where are…

I agree with a lot of what you say, but I don't think we're at the visionary stage yet. Right now we're inventing TCP/IP. At that point, the best you could say is that we're developing technology for a global communications network. And people would reply "We have that, it's called telephones, and we already own the equipment today".

TCP/IP alone wasn't enough to sell people on the idea of the Internet. We had to invent POP3 and NNTP, then eventually HTTP. Even after we had the web, people still weren't sold on the relevance of the internet, but at that point, we had visionaries who could start to paint a clearer picture.

To compare them to the internet, blockchains and cryptocurrencies aren't even out of the DARPA yet, by at least 20 years. The point I was trying to make is that the Internet took more than a decade to really come into its own, and blockchains will take as long as well. Skepticism is welcome, but closemindedness isn't.

Re: Beyond the Bitcoin bubble

#234

Post by v64 » Wed, Jan 17, 2018, 2:15 PM UTC

thatthatis wrote: post #224

v64 wrote: post #163

Earlier quoted context omitted.

From a fintech perspective, I'll make a thirty year prediction that blockchains will be used to reduce costs associated with third party clearinghouses and auditing firms by strengthening assurances that data hasn't been manipulated while reducing the amount of staff necessary to carry out the required verifications.

While an excellent use case, how big on an overall economic level is this? $20 billion? The big four accounting firms bring in about $40 billion in revenue each. Thus $160 billion would seem to me to be a reasonable order of magnitude estimate for the max value audit-free fin-tech can create. Is there a better estimate of total value this can create?

> Is there a better estimate of total value this can create?

I don't think there'll be a way to realistically estimate this for at least another decade. That would be like asking what the effect of TCP/IP will be on eCommerce in 1980. What I've laid out is very, very high level, while the technology is still in what could be considered pre-alpha stages.

Re: Beyond the Bitcoin bubble

#235

Post by tehlike » Wed, Jan 17, 2018, 2:26 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…

Not if you use coins like monero, zcash and thr likes.

Re: Beyond the Bitcoin bubble

#236

Post by alphydan » Wed, Jan 17, 2018, 2:39 PM UTC

acdha wrote: post #183

alphydan wrote: post #143

Earlier quoted context omitted.

> 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 p…

It seems we are both cherry picking to back up our beliefs. Just to show the other side of the coin:

> the number of [Usenet] hosts nearly doubled to 940 in 1984. More than 100 newsgroups existed, more than 20 devoted

How does that compare to the number of Bitcoin miners today? or the number of nodes (11,000)? or the number of users (>30M)?

> people have never had a reason to use it other than speculation.

I did. I paid small amounts for small jobs in various countries of the world with nearly zero fees. (Back in 2013). Had I used Paypal, 50% of the amount sent would have been eaten up by the exchange rate and fees. Bank transfers between these countries cost 100% of the transaction. I also use it to buy hosting, domains, vpns, etc.

> there was clearly a business opportunity if you could bring the access costs down.

Well, guess what? If you can bring the fees down in Bitcoin and Ethereum, there are clear business opportunities. And yet, still in the 90s people said "People will never shop online. You need to go to the store to see and try the stuff."

Re: Beyond the Bitcoin bubble

#237

Post by lu11 » Wed, Jan 17, 2018, 2:51 PM UTC

What happens if we end up using bitcoin (or any coin) for currency and then for some reason (like earthquake) we lose electricity for 24h or more... how we would be paying for things?

Re: Beyond the Bitcoin bubble

#238

Post by krrrh » Wed, Jan 17, 2018, 3:52 PM UTC

thatthatis wrote: post #225

krrrh wrote: post #213

Earlier quoted context omitted.

> Many businesses incur costs to third parties that could be reduced or eliminated by trustless systems The way you phrase this it sounds like a marginal reduction of costs, and maybe a marginal reduction in the auditor workforce. That’s great, and it will bring about some efficiency in the businesses it applies to, but it doesn’t sound like a story of transformational change and an unlocking of new value. Even in th…

moving electronic payment cost from 3% to 1% is a marginal reduction, but if we get that reduction across a few trillion in transactions it becomes real money. Unfortunately, a lot of the cost of the 3% is providing fraud and chargeback protection that lets customers be comfortable paying online. So, while it's conceivable that a stable block chain based payment method could revolutionize ecommerce payments, the pres…

GP was talking about auditing costs at financial institutions which is a different issue than credit card transactions (I think).

Another portion of that 3% cost is marketing in the form of cashback and rewards points which can be eliminated if the market or regulators demand it. In Australia they capped credit card fees to around 0.5% on the basis that the fees were a market distortion. They review them regularly and have suggested that lower fees are appropriate [1]. It doesn’t actually cost Visa that much to handle transactions, and there are proven solutions to fixing credit card fees if that is what is desired.

[1] search document for “cap” http://www.rba.gov.au/payments-and-infrastructure/review-of-...

Re: Beyond the Bitcoin bubble

#239

Post by krrrh » Wed, Jan 17, 2018, 3:55 PM UTC

acdha wrote: post #222

krrrh wrote: post #218

Earlier quoted context omitted.

> and that's assuming that VISA, et al. wouldn't just lower their rates They easily could, their current rates contribute a lot toward cashback and points rewards and other marketing programs. Australia regulated a cap on rates at 0.4% iirc, and Visa still covered its costs.

Their profit margins seem like a good estimate for how low they could go without much pain, and given the size of the revenue stream I’m sure they could go lower.

It’s not just their profits because they spend a good portion of their revenue on customer acquisition and retention. We may have a more stable economy if there was less customer acquistiin in the consumer credit space.

Re: Beyond the Bitcoin bubble

#240

Post by gist » Wed, Jan 17, 2018, 6:30 PM UTC

v64 wrote: post #231

gist wrote: post #198

Earlier quoted context omitted.

> Many business owners in the 90s looked at computer and internet technology and dismissed it as a fad that would cease to exist in 5 years Well I've been around this for much longer than the 90's. Since the late 70's actually. I don't remember it that way at all. What I remember was that at the time it was either to expensive or the company (small ones) didn't have the time or resources to stop what they were doing…

Out of curiosity, where did you live and what sector did you work in? From my own experience, I agree that the businesses that were excited about computer technology were businesses with high amounts of inventory and paperwork where automation could greatly simplified their business processes, and that many of these businesses were located in urban centers that were at the forefront of infrastructure. These large bus…

> Out of curiosity, where did you live and what sector did you work in?

On the east coast near a major city and in wholesale and distribution primarily.