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Why Bitcoin Matters

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Re: Why Bitcoin Matters

#101

Post by VMG »

kolev wrote: post #66
minimax wrote: post #16

Bitcoin is the first Internet-wide payment system where transactions either happen with no fees or very low fees (down to fractions of pennies). Existing payment systems charge fees of around 2 percent to three percent As long as consumers are paid in their local currency and vendors pay their employees, their taxes, and their other costs in local currency, then bitcoin as a payment technology has similar costs as cr…

I got tired arguing with people with vested interest in Bitcoin that Bitcoin is not cheaper. You see a lot of people on Reddit getting super excited buying junk at Overstock and saying: "The banks got nothing!" without realizing that: 1) Coinbase sold their bitcoins at Bitstamp. 2) When more people sell than buy, Coinbase needs to wire money from Bitstamp to their European bank account and then to their US one; 3) Ov…

Your points are fair when you look at national payments (with the current adoption), but the math changes when looking at international money transfer.

Re: Why Bitcoin Matters

#102

Post by atmosx »

toomim wrote: post #82
kolev wrote: post #66

Earlier quoted context omitted.

I got tired arguing with people with vested interest in Bitcoin that Bitcoin is not cheaper. You see a lot of people on Reddit getting super excited buying junk at Overstock and saying: "The banks got nothing!" without realizing that: 1) Coinbase sold their bitcoins at Bitstamp. 2) When more people sell than buy, Coinbase needs to wire money from Bitstamp to their European bank account and then to their US one; 3) Ov…

> In other words, this over complicated process involves a lot > more banking activity than credit cards! No, it's still FAR less banking activity than credit cards. You have no idea what happens behind the scenes when you swipe! Go watch this 11-minute Khan Academy video to see how much banking activity goes on behind the scenes when you swipe your card: https://www.youtube.com/watch?v=IPxQQNyCxas Bitcoin isn't free…

> Bitcoin isn't free, but it's far, far, cheaper than credit cards, and gives far less money to banks.

You're not listening: BitCoin is WAY more EXPENSIVE than a credit card TODAY.

* People know how credit cards work * Everybody accepts credit cards

You are comparing a payment medium with an asset/currency/payment-method/protocol. It's not a fair comparison (for BTC) because it's a really awesome technology which could evolve in many different things.

BUT saying that BTC is cheaper/easier than using a credit card TODAY is a simply not TRUE.

Re: Why Bitcoin Matters

#103

Post by eurleif »

riemannzeta wrote: post #100

Bitcoin is a digital bearer instrument. It is a way to exchange money or assets between parties with no pre-existing trust: A string of numbers is sent over email or text message in the simplest case. The sender doesn’t need to know or trust the receiver or vice versa. Related, there are no chargebacks – this is the part that is literally like cash – if you have the money or the asset, you can pay with it; if you don…

>If the BGP is about solving the problem of fraud, then Bitcoin hasn't solved it.

Do you have any idea what the BGP is?

Re: Why Bitcoin Matters

#104

Post by kolev »

drcode wrote: post #92
kolev wrote: post #88

Earlier quoted context omitted.

No, it's not far cheaper - it just has a different way to compensate its processing costs. In fact, without even considering Coinbase fees, it's still more than credit cards: https://blockchain.info/charts/cost-per-transaction-percent

That's misleading: A lot of those transactions are microtransactions (not possible at all with credit cards) so of course the % will look elevated.

Dwolla has free micropayments (up to $10). Amazon offers special pricing for micropayments (5% + $.05) and so does PayPal (although it requires a separate account). If BTC price goes too high, the dollar costs of Bitcoin transaction fees will get pretty high as well. Anyway, here's an interesting article to read: http://www.bloomberg.com/news/2014-01-02/bitcoin-is-an-expen...

Re: Why Bitcoin Matters

#105

Post by hendzen »

sigil wrote: post #80

Bitcoin is the first practical solution to a longstanding problem in computer science called the Byzantine Generals Problem. Wait, isn't Paxos arguably the first practical solution to BGP? [0] [1] It's been in production use at Google since at least 2006. [2] Furthermore, Paxos actually has a proof that timely consensus will be reached. Do we have the same level of rock-solid mathematical certainty about Bitcoin yet?…

No, Paxos is not a solution to BGP. Paxos explicitly does not consider malicious processes.

EDIT: fixed typo

Re: Why Bitcoin Matters

#106

Post by ye »

mgulaid wrote: post #68
ye wrote: post #36

Earlier quoted context omitted.

Yeah, you described pretty much the worst case scenario where everything goes through fiat. But once Bitcoin penetration is significant and people start getting paid in Bitcoin (already happening) and accept it as payment (also already happening), all these exchange fees go away. With fiat you're stuck with the fees forever. Also your 0.5% assumption is wrong. You can place a buy ad on LocalBitcoins and actually buy…

But the bottom line argument is that when everyone gets paid in the same currency, the exchange fees go away. This can happen with US $ or Yan.

But transfer fees and payment fees won't go away with fiat.

Credit card fees eat into many businesses' profit margins, especially the ones with low margins.

And that's not the only Bitcoin's advantage.

Re: Why Bitcoin Matters

#107

Post by maaku »

sigil wrote: post #80

Bitcoin is the first practical solution to a longstanding problem in computer science called the Byzantine Generals Problem. Wait, isn't Paxos arguably the first practical solution to BGP? [0] [1] It's been in production use at Google since at least 2006. [2] Furthermore, Paxos actually has a proof that timely consensus will be reached. Do we have the same level of rock-solid mathematical certainty about Bitcoin yet?…

> but AFAIK there is no rigorous proof yet that the selfish mining equilibrium isn't a real threat.

It's very easy to detect and respond to. Point your miners at the large pools, and check if they are building off of non-public blocks. Respond accordingly.

Re: Why Bitcoin Matters

#108

Post by galactus »

drcode wrote: post #99
kolev wrote: post #66

Earlier quoted context omitted.

I got tired arguing with people with vested interest in Bitcoin that Bitcoin is not cheaper. You see a lot of people on Reddit getting super excited buying junk at Overstock and saying: "The banks got nothing!" without realizing that: 1) Coinbase sold their bitcoins at Bitstamp. 2) When more people sell than buy, Coinbase needs to wire money from Bitstamp to their European bank account and then to their US one; 3) Ov…

I run a bitcoin ecommerce site without converting to fiat. Just because Overstock wants to pay additional overhead doesn't mean everyone else has to.

If you were paying taxes or employees like overstock does you'd have to convert to fiat, wouldnt you?

Re: Why Bitcoin Matters

#109

Post by riemannzeta »

eurleif wrote: post #103
riemannzeta wrote: post #100

Bitcoin is a digital bearer instrument. It is a way to exchange money or assets between parties with no pre-existing trust: A string of numbers is sent over email or text message in the simplest case. The sender doesn’t need to know or trust the receiver or vice versa. Related, there are no chargebacks – this is the part that is literally like cash – if you have the money or the asset, you can pay with it; if you don…

>If the BGP is about solving the problem of fraud, then Bitcoin hasn't solved it. Do you have any idea what the BGP is?

I'm not an expert, but I read the paper. So you don't need an intermediary to confirm that a particular digital transaction took place between two people. By analogy to the original problem as stated, that's like saying you don't need an intermediary to confirm that a message with particular content was delivered between two generals. You still need an intermediary to confirm that the recipient is going to act on it as intended.

And I believe the history of Silk Road and its would be successors is evidence that an intermediary is still required post-Bitcoin. So you don't have to worry about the money not being there. You still need an escrow agent.

http://www.nytimes.com/2014/01/19/business/eagle-scout-ideal...

Re: Why Bitcoin Matters

#110

Post by maaku »

varjag wrote: post #87
Guvante wrote: post #70

Earlier quoted context omitted.

The USD is a debt based currency, so that is expected. Bitcoins are a proof of work based currency, but unfortunately it acts more like a commodity at the moment.

Proof of useless work based, to be precise: the only reason work tokens are hash computations instead of say push-ups or soap bubbles is the ease of bookkeeping. So it always puzzled me why that aspect matters.

The fact that the work is useless is essential to the security of the system. It's a proof of sacrificed opportunity. If the proof of work was actually useful and monetizable, you might be able to pay for your mining via its utility, and that would completely destroy the security assumptions underlying bitcoin.
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