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Bitcoin is a disaster

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791–800 of 992 posts

Re: Bitcoin is a disaster

#791

Earlier quoted context omitted.

WU is very expensive though; btc, if you know what you are doing, does not come close. WU is a horrible but unavoidable evil for millions of workers worldwide. This is one of the cases that should be disrupted.

I just checked, it seems that WU charges approximately 1% for transfers relative to the nominal exchange rate. I don't transfer money much, but superficially that doesn't seem too expensive considering the volatility risk to WU due to fluctuating exchange rates combined with the overheads of regulatory requirements. It seems to me that Bitcoin is only as cheap as it is because it sidesteps those regulatory overheads.…

I am not a big btc fan, I made some money with it and I like the concept somewhat for the purpose it is meant for.

But this btc is used for drugs, human trafficking etc is getting somewhat weird: sure it is, but normal money is far more. So you do not use that either? That is in fact regulated and more expensive and still human traffickers use it all the time. So I do not see the point: in the end btc is easier to follow than a suitcase of dollars coming from Medellin where it was taken from children in the sex trade. So not sure what you mean there besides parotting this point. Private groups and govs have advanced systems for doxxing Btc accounts: they were a bit late to start but now that mining is basically impossible, it is far easier to follow than dollar bills.

Also WU cash point to point money is quite well known for being off the taxes radar in most countries (for some reason): the remittance to the homeland of (illegally) earned money via WU and evade taxes back home is probably it's biggest usecase which is why they can use these depressingly bad rates.

Re: Bitcoin is a disaster

#792

Earlier quoted context omitted.

I know WU from the dropoff points where cheap labour bring their money to send home; they use an extremely bad conversion rate. Like paypal but even worse. Sources: official WU dropoff points in HK, SG, TH, NL and ES. The exchange rates + fees are indeed 10-20% removed from what they really are. Maybe if you send online it is 1%, but most use it to bring cash (from cleaning houses etc) to families abroad. Edit: > The…

I don't think you'd be able to convert some weak currency from cash to cash in another weak currency efficiently with Bitcoin either. Last time I checked, its API didn't extend to collecting wads of bills! I know a lot of immigrants that send money home, they all use bank-to-bank transfers. Whether they use WU or not, the overheads seem to be in the 1% range...

Bank to bank sure, WU is much higher in all cases I have seen. But he, we are just some people on the internet. I can send you pics of conversion tables in WU cash points in HK which are off by 5-20% from the inter bank rate. Banks can do this cheaply (and you still get screwed with most banks but indeed 1-2%, not 5+) so WU definitely does something bad there.

Re: Bitcoin is a disaster

#793
post #339

Earlier quoted context omitted.

This isn't a very good criticism. Lots of new things recapitulate the structures they are replacing in many ways, while improving on them in just one or a few areas. The fact that ground is being retread is not itself a criticism or a sign of a lack of innovation. Yes, Bitcoin requires many of the same structures as traditional finance. That does not make them equivalent. Traditional finance does not allow you sovere…

It's not that the structures are inherently bad, it's that such structures are, philosophically, the exact sorts of things that many early (and current) proponents of crypto wanted to avoid. In that sense bitcoin hasn't failed as a system in & of itself, but it has failed to achieve the philosophical goals of those people. Bitcoin & crypto also might not be sovereign in origin but they have plenty of sovereign influe…

> It's not that the structures are inherently bad, it's that such structures are, philosophically, the exact sorts of things that many early (and current) proponents of crypto wanted to avoid. In that sense bitcoin hasn't failed as a system in & of itself, but it has failed to achieve the philosophical goals of those people.

I'm not sure that's quite true. Decentralization was a goal, but it wasn't necessarily the case that that decentralization had to pervade all use of the currency. The values of the ecosystem are that more decentralization is better - that's true, so Satoshi et al would have preferred to make decentralized transactions sufficiently scalable not to require centralized exchanges, but I don't think that it has fundamentally failed in its goals just because a lot of transactions happen in bank-like entities. The point is that users have the power to do it in a decentralized way.

> Bitcoin & crypto also might not be sovereign in origin but they have plenty of sovereign influence, basically as much as any sovereignty wants to impose on it. Especially as entities like the SEC & IRS come to terms with it, it will be just as vulnerable to government control as fiat currency. This is especially the case because any wide-spread adoption will require adoption by large financial institutions, which cannot avoid regulatory regimes of their local jurisdictions. From the US government's standpoint, US citizens holding bitcoins is not much different than US citizens holding Euros. How that money enters into the US economy & interacts with US financial institutions or changes hands from person to person are basically subject to the same rules & regulations. If you're conducting a a transaction in excess of $10,000 then whatever mechanism facilitates that will still be subject to CTR's, and any "suspicious" transaction of lower limits will still be reported, by law, to the government.

This just isn't accurate. It may in fact be vulnerable to some level of government influence, due to the fiat gateways involved. But it's just not true that it's equivalent to fiat in that regard. Cryptocurrencies will never be as regulable as fiat is, and I think it's pretty clear that that's true, given how widely they've been adopted by cyber criminals and darknet markets. Governments have been completely unable to prevent their use in this way, and will continue to be unable to do so.

It's true from a legal perspective that the government views it just like foreign currency (actually, in the US, they treat it like property, not currency, but we can ignore that for now). But from a technical perspective, its very very different. The technical differences make it very difficult to regulate. Think about music. When music got digitized, its legal status didn't change. It was just as illegal to download an MP3 as it was to steal a CD. What changed is the topology of the technical landscape underneath it, and that is what made all the difference.

> Basically, if you want to convert bitcoin to the local currency to buy something, you'll need to use some sort of off-ramp that will be a regulatory bottleneck. Want to build a "shadow" economy purely driven by crypto exchange? Well, you'll still have to deal with the IRS knocking on your door & saying "You have things of value that you are performing work to receive. We don't care what currency or form you received them in, you received things of value. Give us our cut."

I think you are under-weighting the significance of friction. In principle, sure, the IRS might do that - but we don't live in principle. We live in a physical world with resource constraints. If you make something harder to accomplish, it may no longer be economical to do it. Collecting income taxes from people that keep their money in crypto who don't want to pay them will never be as efficient as doing so in the fiat banking system.

Re: Bitcoin is a disaster

#794
post #514
post #339

Earlier quoted context omitted.

This isn't a very good criticism. Lots of new things recapitulate the structures they are replacing in many ways, while improving on them in just one or a few areas. The fact that ground is being retread is not itself a criticism or a sign of a lack of innovation. Yes, Bitcoin requires many of the same structures as traditional finance. That does not make them equivalent. Traditional finance does not allow you sovere…

> Traditional finance does not allow you sovereignty over your money. What do you mean sovereignty? Do you mean property? Traditional finance is not only compatible with the ownership of money, it relies entirely on it!

I mean sovereignty in the sense of actual control. When you put your money in a bank account, you give up control of it to that bank. The money may legally be yours, but they physically possess it, and can keep you from transacting with it whenever they wish. I in fact just had this issue the other day. I have a company, and due to a clerical error with the state its registered in, my company was listed as being "not in good standing", and because of this, Wells Fargo froze my accounts and wouldn't let me transact for two weeks until I got the whole thing cleared up. That could never happen with a crypto wallet, because I have actual sovereignty over my crypto wallets, nobody can freeze them for any reason.

Re: Bitcoin is a disaster

#795
post #344

Earlier quoted context omitted.

This is a pretty silly comment. It's you that's cherry picking. The overall trend of Bitcoin over its lifetime has been up. Any complete analysis of its time series would tell you that. Buying at any point in its history would have been a good idea.

This is the same argument Wirecard shareholders always made.

No it isn't. I am not arguing that the price going up makes it good. That would be silly. I am merely disputing the characterization of the prior comment as 'cherry picking'.

Re: Bitcoin is a disaster

#796
post #632

Earlier quoted context omitted.

> Governments can't print more of it. I never really understood that line of reasoning. Why would one person want to reduce the ability to apply economic policy in their country? Certainly, you could use Gold instead of Bitcoin as a similar investment tool, right?

they have the mistaken belief that the gov't policies are either corrupt (i.e., enriching one group at the cost of another), or they are incompetent.

some governments are corrupt and incompetent so that's not necessarily a mistaken belief.

Re: Bitcoin is a disaster

#797
post #643
post #511

Earlier quoted context omitted.

I still question the early bag-holders of Bitcoin. Where are they and what do they do now? I think Litecoin came at a time when more people had an awareness of cryptocurrency, it's more democratized during the initial phases because of Scrypt and GPU's being the dominant mining tool at the time. ASICs shifted that balance again but I still have my doubts about who owns the majority of Bitcoin.

I would bet a lot of folks have been selling it over time. My wallet once held ~10 BTC for a few transactions back in the early days. I ended up with 5 btc left over that I rode the bull market with, selling half the position post bull run each time. I kick myself for loosing the BTC my friend and I mined back in '09 on CPU time when it truly was worthless. But I was a dumb college student at the time and was simply…

I would love to understand this in detail.

If you mined it once you get a hash. When you say you lost those coins you lost the hash to the account? When you mined in 2009 was the hash smaller than today? Is brute forcing possible?

Re: Bitcoin is a disaster

#798

I think the biggest failure of Bitcoin is that it was marketed as a "currency" and ended up becoming a commodity. Bitcoin isn't something you use to spend wealth, it's used to hold wealth. Unlike a stock, however, whose value is based on what price people are willing to pay for it, Bitcoin's value is determined by its scarcity. Sound familiar? That's why I hate the term "cryptocurrency". It has a lie baked right into…

The thing is, for the vast majority of civilized human history, currencies have been commodities. Cryptocommodity does have a nice ring to it, though.

+1 for Cryptocommodity

Re: Bitcoin is a disaster

#799

Earlier quoted context omitted.

I'm not sure we have any definition here :-) But claim that anything is economically wothless unless there are people willing to participate in exchanging it is in fact supported (not denied as you seem to imply) by any example of speculative bubble, including of course Tulipmania.

People are using bitcoins price to justify its value. Price is not value, certainly not on a short timescale. Consider that in the short term a market is a popularity content but in the long term, it weighs actual value. This is another way of saying that the market can remain irrational longer than you can remain solvent. If you actually attempt to assess fundamental value of Bitcoin based on anything comparable it’…

The value of a bitcoin is the rarity of owning a coin is limited and the way it works opens up transactions globally. The price is the market demand.

Re: Bitcoin is a disaster

#800
post #58

Earlier quoted context omitted.

The Lightning Network doesn't solve the congestion problem for global adoption. To open a lightning channel you need an on-chain transaction. The same is true to close one. Assuming 2,500 transactions per block, you will need ~970 days to just open a lightning channel for each US citizen (assuming 350 million citizens and no other Bitcoin transactions). Due to his limitation the Lightning Network is unsuited for any…

https://blockonomi.com/channel-factories-bitcoin-lightning-n...

Now they reinvented credit cards. Cryptocurrencies are really speedrunning financial history.
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