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A Prediction: Bitcoin Is Doomed to Fail

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Re: A Prediction: Bitcoin Is Doomed to Fail

#411

Post by andrewla »

tlrobinson wrote: post #266
andrewla wrote: post #155

Earlier quoted context omitted.

I'll jump on this and say that the script issue is irrelevant to Bitcoin's success. In fact, I would argue that the script functionality is a huge flaw in bitcoin, probably the largest flaw. The existence of a scripting language within the transaction log makes it much more difficult to analyze whether I hold bitcoins or not -- my ability to spend bitcoins "held" in my address is contingent on my having additional in…

"my ability to spend bitcoins "held" in my address is contingent on my having additional information at the time that I post the transaction." Fortunately software excels at automating tasks like this. You already need software to scan the entire blockchain to determine address balances, is it really that hard for it to keep track of non-trivial unspent transactions separately?

Yes, software can automate the task of redemption for specific types of transactions. But not being able to answer the question "how many bitcoins are at this address" seems to be very problematic.

Instead, you'll have a ton of publisher clearing house style "you just received a million bitcoins" notifications, once they enable more of the language in the client. It just seems confusing and unnecessary.

Re: A Prediction: Bitcoin Is Doomed to Fail

#412

Post by andrewla »

dwaltrip wrote: post #212
andrewla wrote: post #155

Earlier quoted context omitted.

I'll jump on this and say that the script issue is irrelevant to Bitcoin's success. In fact, I would argue that the script functionality is a huge flaw in bitcoin, probably the largest flaw. The existence of a scripting language within the transaction log makes it much more difficult to analyze whether I hold bitcoins or not -- my ability to spend bitcoins "held" in my address is contingent on my having additional in…

Can't one just simply check the nature of the transaction to see if it has any conditionals? It isn't hard to imagine those features being added to blockchain related web services, such as blockchain.info.

Sure - so what do you do if there are conditionals? In the full generality of the language, it will be hard to offer an experience to the "recipient" of the transaction that is not confusing.

Re: A Prediction: Bitcoin Is Doomed to Fail

#413

Post by andrewla »

justincormack wrote: post #161
andrewla wrote: post #148

Earlier quoted context omitted.

I should probably read Graeber's book, though based on what I see here I might find it a bit exhausting. I hear this argument a lot in discussions about bitcoins, and I ask, but have not yet received, a good explanation. Let me ask you if you can summarize the reasoning for why paying taxes in a currency helps a currency? It seems very obvious that the opposite is true -- if you don't have to pay taxes by working in…

The example in Graeber's book was the government pays soldiers in some currency it invents, and then taxes the non soldiers in the economy the same amount. The soldiers need to eat (which is important as they might otherwise just give the coins to the civilians). So the transaction of food for money makes sense, and the civilians can pay their taxes and the soldiers can eat, and the arbitrary currency has a measurabl…

Ah - this makes sense, at least historically. With a tax that is more of a levy rather than something proportional to receipts or income, then it makes sense. But like the Mises Regression theorem, this seems more to relate to the historical origins of money as opposed to current usage.

Re: A Prediction: Bitcoin Is Doomed to Fail

#414

Post by praxeologist »

enraged_camel wrote: post #406
praxeologist wrote: post #276

Earlier quoted context omitted.

The gov't has outlawed gold and silver as currency in favor of its fiatbux. If my friend and I like eating Skittles then some bully come slaps us around if we eat them, that isn't failure of us liking Skittles.

No, the government came and said you can't use gold or silver to trade Skittles, because neither material is a convenient medium of exchange (which is unarguably correct).

Fiat money has been around not even 200 years while various commodities used in coins worked fine for much longer. Oh but to you it isn't convenient somehow and this is "unarguably correct", lol whatever, spoken like a true state apologist I guess. Go on believing your own alternate history where the force and fraud of government are pretended away.

Re: A Prediction: Bitcoin Is Doomed to Fail

#415

Post by praxeologist »

brownbat wrote: post #163

The argument boils down to: 1. Money has always been controlled by governments, 2. So money always will be controlled by governments. 3. Bitcoin is identical to money, but 4. Bitcoin cannot be controlled by governments, 5. Therefore bitcoin is doomed to fail (no date specified). I'm not sure any of the premises are beyond scrutiny, or that the conclusion is even meaningful. Anyone can say that nothing lasts forever.…

1 is false and even if it weren't the transition to 2 is fallacious.

Re: A Prediction: Bitcoin Is Doomed to Fail

#416

Post by jljljl »

jnbiche wrote: post #409
jljljl wrote: post #277

Earlier quoted context omitted.

jnbiche, it's not letting me reply to you so I'm doing it here. You make a good point, and my above explanation was a bit confused. I think BTC faces both problems: There's high volatility, driven by the current level of speculation and the fixed quantity of Bitcoins that exist on the market. This makes Bitcoin a fairly poor medium of exchange since it is unlikely to hold a stable value from one day to the next. Ther…

>Is my liquidity assumption mistaken? You're absolute (and obviously) correct about Bitcoin's volatility, but you're mistaken about its liquidity. Bitcoin is quite liquid if you're in the U.S. and many other countries around the world. The only delay is the time required by the legacy banking system to wire or ACH funds in/out of your exchange account.

Interesting. I did some digging and have a few follow ups:

1) Bid Ask spreads vary by exchange and currency, but it seems that with the exception of BT China an MtGox, the bid ask spreads can be quite wide. Prices for BTC/USD also very a good bit by exchange, meaning the price a merchant sets might be influenced by which exchange they use.

[1] http://bitcoinwatch.com

2) The MtGox live chart seems to imply that an order of a few bitcoins (or a few thousand dollars) could have a profound impact on the actual price of BTC/USD. This does not seem particularly liquid to me, unless I misunderstand the chart.

http://mtgoxlive.com/orders

Re: A Prediction: Bitcoin Is Doomed to Fail

#417

Post by fat0wl »

phaemon wrote: post #408
fat0wl wrote: post #407

Earlier quoted context omitted.

My intuition says that the storeowner has no reason to accept. I think what a lot of the merchants are doing is using 3rd party processors, basically just saying "Fine yeah I'll take it" as long as a Bitcoin buyer is already lined up (which is essentially what a 3rd party exchange functions as). That way they get cash less transaction fee. But really even if they accept Bitcoin for 4 melons that doesn't mean they hav…

> My intuition says that the storeowner has no reason to accept. Well, of course they don't. Things have just got worse for them. But that's exactly what happened to many local retailers when their customers realised they could get stuff cheaper by ordering over the Internet than they could buying locally. It's just how things go. > However, I do not believe Bitcoin is a stock, so I'm not sure what it is. It's an inf…

eh you lost me, man. he still has the option to only take USD or use a 3rd party payment processor. At the moment, it seems that this approach is not costing any businesses in sales, since Bitcoin is still used infrequently as currency. The only point it actually becomes a currency itself is when the shop owner stops using a 3rd party processor and says "you know what? I'm comfortable just holding onto these". With the market volatility of Bitcoin this is unlikely to happen for a while, unless they are among the believers who think the value can increase indefinitely and accurately represented by trading prices.

I definitely understand the value as an infrastructure, but this is the web. Better solutions will emerge and could just co-opt the Bitcoin infrastructure. Like the way ISPs came in and bought access to the data lines of phone companies, same idea.

Re: A Prediction: Bitcoin Is Doomed to Fail

#418

Post by SeanLuke »

UK-AL wrote: post #381
SeanLuke wrote: post #272

Earlier quoted context omitted.

Quite to the contrary: I am fairly convinced deflation and currency speculation will be the end of Bitcoin, because there is no central authority which can stop it from happening.

There needs to be a feedback loop in cyptocurrencies. They look at the value of the coins on a exchange, the adjusts the amount of money generated to keep inflation at a constant 1% or 2% or whatever.

The question is: who gets the money?

Re: A Prediction: Bitcoin Is Doomed to Fail

#419

Post by jnbiche »

jljljl wrote: post #416
jnbiche wrote: post #409

Earlier quoted context omitted.

>Is my liquidity assumption mistaken? You're absolute (and obviously) correct about Bitcoin's volatility, but you're mistaken about its liquidity. Bitcoin is quite liquid if you're in the U.S. and many other countries around the world. The only delay is the time required by the legacy banking system to wire or ACH funds in/out of your exchange account.

Interesting. I did some digging and have a few follow ups: 1) Bid Ask spreads vary by exchange and currency, but it seems that with the exception of BT China an MtGox, the bid ask spreads can be quite wide. Prices for BTC/USD also very a good bit by exchange, meaning the price a merchant sets might be influenced by which exchange they use. [1] http://bitcoinwatch.com 2) The MtGox live chart seems to imply that an ord…

No one is using MtGox anymore, exactly because it isn't very liquid (money hard to get in and out). Take a look at Bitstamp.

Re: A Prediction: Bitcoin Is Doomed to Fail

#420

Post by Ma8ee »

cashmonkey85 wrote: post #323
rimantas wrote: post #152

Earlier quoted context omitted.

Did you forget about wire transfers? At least where I live it is possible to live without touching physical money for a long long time, we have pretty advanced e-banking and m-banking (and we never had checkbooks). Yes id does involve the bank, but from the end user perspective it is almost no overhead and sometimes even saves the trouble. Is stuff like direct-debit even possible with bitcoin?

That is true for me locally also but you realise when you travel or do business international the current systems all fail to do their job.

I use my Visa wherever I go in the world without any problem, and for business money transfers are fast and easy.

I really fail to see what problem that isn't already solved in this regard.

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