Why Bitcoin Matters • Hacker News Board

Re: Why Bitcoin Matters

#161

Post by lectrick » Tue, Jan 21, 2014, 10:34 PM UTC

vladd wrote: post #78

Guvante wrote: post #71

> The practical consequence of solving this problem is that Bitcoin gives us, for the first time, a way for one Internet user to transfer a unique piece of digital property to another Internet user, such that the transfer is guaranteed to be safe and secure, everyone knows that the transfer has taken place, and nobody can challenge the legitimacy of the transfer. The consequences of this breakthrough are hard to over…

The reason I feel bitcoin is a scam is due to such misunderstandings. Bitcoin is not what makes any of this possible, the research happening for 20+ years in the background is. Bitcoin is just a marketing term, a specific implementation of those principles that derives its power just from the number of clients installed across the world with it. All the arguments that Andreessen gave are not Bitcoin's, but are rather…

Your argument is, paraphrased, "bitcoin is bad because it is new and does not fit well into current conceptions of money and current payment systems."

Well, first of all, most of this friction only happens when trading bitcoin for fiat. It's the fault of the existing system.

I can send any amount of Bitcoin in 5 seconds, anywhere in the world where there is an Internet connection or a reasonably good cellphone. So can any kid (who can't get a credit card), so can any third world unbanked person. You simply cannot do that trick with any other currency.

Cryptocoins, led by Bitcoin, truly are "of, by, and for the Internet".

Secondly, shit changes. Look at what the Internet did, and it too had its famous skeptics: http://kenhoma.wordpress.com/2011/09/15/the-internet-is-just...

Re: Why Bitcoin Matters

#162

Post by guscost » Tue, Jan 21, 2014, 10:34 PM UTC

jellicle wrote: post #37

dragonwriter wrote: post #18

Earlier quoted context omitted.

> But fiat currencies are simply currencies that aren't backed by collateral. That's the looser definition, the narrower one (from which the name comes) is that that it is currency not backed by collateral but backed by a government's designation of it (by fiat) as legal tender. Given the absence of significant non-representative non-government-issued currencies prior to modern cryptocurrencies, the looser definition…

So what's the term for something shadier than fiat currency, something not backed by collateral NOR by government dictate? It should convey all the scorn directed at "fiat currency", but moreso.

What do you say to the idea that Bitcoin is backed by established laws of math and economics?

Re: Why Bitcoin Matters

#163

Post by nazgulnarsil » Tue, Jan 21, 2014, 10:34 PM UTC

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…

wrong, with credit cards you have a 2.5% fee with every single transfer you ever make. A pays B pays C pays D, each step has a fee. With Bitcoin ONLY the people who do fiat exchanges pay a fee, A pays B pays C pays D, only A and D pay a fee. This has massive economic implications if bitcoin starts getting penetration.

Re: Why Bitcoin Matters

#164

Post by atmosx » Tue, Jan 21, 2014, 10:34 PM UTC

smtddr wrote: post #117

atmosx wrote: post #98

Earlier quoted context omitted.

> [...] But once Bitcoin penetration is significant [...] I think we passed that point, there is an adoption of bitcoin, but it will NEVER be used as a currency IMHO. I really hope the price stops fluctuating so we can use it as a value storage medium, but even that can be disputed.

This might be me being hyper-pedantic, but I'd argue that not even USD is a particularly good store of value. If you have a significant amount of money it should probably be in at least low-risk stocks or re-estate. Not just sitting in a regular savings account in a regular bank. But, I do get the point that at least the USD dollar doesn't lose/gain 50% value in a few hours by wild speculation every month.

I wasn't thinking of USD, I was thinking more about something used for a couple of millenia as a value storage, but yes sure... Compared to today's BTC even the USD seems okay.

Re: Why Bitcoin Matters

#165

Post by reqres » Tue, Jan 21, 2014, 10:37 PM UTC

drcode wrote: post #125

kolev wrote: post #111

Earlier quoted context omitted.

Many have tried, but people keep using what they are used to. Same with Bitcoin. People will keep using their convenient credit cards regardless if they are a superior or a subpar technology. Until Bitcoin diehards get this simple fact and quit spreading delusions that Bitcoin is replacing cash, credit cards, and Western Union, people will not take them seriously.

Centralized technologies: Compuserve, MasterCard. Decentralized technologies: The Internet, Bitcoin.

So you're saying both can work?

Re: Why Bitcoin Matters

#166

Post by [deleted] » Tue, Jan 21, 2014, 10:42 PM UTC

drcode wrote: post #154

[deleted] wrote: post #140

Earlier quoted context omitted.

[deleted]

OF COURSE you owe taxes every time you realize a gain. I pay taxes on every bitcoin I earn, including any I use to pay for expenses. Nothing I wrote implies that you don't have to pay taxes on all money earned with bitcoins. However, just because you earn money with bitcoin doesn't mean you can't pay for the taxes on those bitcoins with money you earned in fiat.

[deleted]

Re: Why Bitcoin Matters

#167

Post by plock » Tue, Jan 21, 2014, 10:51 PM UTC

ye wrote: post #158

plock wrote: post #133

Earlier quoted context omitted.

>not to mention that there's no freedom from being prosecuted for non-payment of taxes. What? If I pay my taxes, I won't be prosecuted for non-payment of taxes. >in that case Bitcoin's intrinsic value is that it's backed by the freedom of storage Storage of what? >transfer, It doesn't matter how easy it is to transfer something to someone else if they don't want it. That thing must be seen as valuable for some other…

First of all, I can pay taxes in Bitcoin. There's a company that handles it for me. Second of all, your dollar's "intrinsic value" being an American criminal law makes zero sense. It's geography-specific. Suddenly if I'm not from US, that "intrinsic value" disappears. So much for that dumb definition. > It doesn't matter how easy it is to transfer something to someone else if they don't want it. That thing must be se…

>First of all, I can pay taxes in Bitcoin. There's a company that handles it for me.

That company doesn't pay the US government in bitcoin. They just buy dollars on your behalf. Every dollar owed in taxes must be paid in USD.

>Suddenly if I'm not from US, that "intrinsic value" disappears. So much for that dumb definition.

It doesn't 'disappear'. There are still millions upon millions of people who need USD to pay their taxes. That's where the backing comes from. It doesn't matter if not everyone has to pay taxes in USD. Quite a lot do, and they need to buy dollars from other people in order to do so.

>There are multibillion global transportation industries out there, and they don't care what they transport (as long as it's legal).

I'm sure the people that hire them to transport goods value what's being transported.

>People pay them because they provide ease of transportation at a reasonable price per pound.

What point are you trying to make?

>I'd say ease of transportation is much more valuable to the majority of the world than some "freedom from prosecution" by some government that can't touch them.

Freedom from prosecution is pretty important to the people in the US that owe taxes to the US government. But you're comparing apples to oranges.

Ease of transportation is a feature of bitcoin. But ease of transportation does not itself give anything value. You are easily transporting your words to my computer. That doesn't mean they're valuable. Ease of transportation makes bitcoin a more suitable currency than something that is equal in all other ways but is harder to transport. But something having some features that make it suitable as a currency doesn't mean it is actually a good currency.

On the other hand, freedom from prosecution is something you can buy with USD. It's not a feature of the piece of cloth called the USD that you can pay taxes with it. It just happens to be that way. And I would say that a guarantee that your money will be worth something [because people will always have to buy it in order to escape prosecution from non-payment of taxes] is more important than ease of transportation.

Re: Why Bitcoin Matters

#168

Post by dllthomas » Tue, Jan 21, 2014, 10:58 PM UTC

oafitupa wrote: post #144

dllthomas wrote: post #129

Earlier quoted context omitted.

While I wouldn't put it past the USG to use arms to prop up the dollar, I'm not sure if there are specific actions you're referring to.

Uh, every invasion of a country or coup/assassination in the last decades?

None of those that come to mind have anything to do with support of the currency, so far as I can tell. You will have to be substantially more specific.

Re: Why Bitcoin Matters

#169

Post by sigil » Tue, Jan 21, 2014, 11:05 PM UTC

hendzen wrote: post #155

sigil wrote: post #136

Earlier quoted context omitted.

I referred in the top level comment above to Byzantine Paxos, a modified version of Paxos that is BFT. http://en.wikipedia.org/wiki/Paxos_(computer_science)#Byzant...

Ah - when the term Paxos is used it is usually in reference to the original, non-BFT algorithm. Also, Google's implementations of Paxos (in Chubby, as well as Megastore) are non-BFT, and I am not aware of any use of Byzantine Paxos in production elsewhere.

Interesting, and makes sense. Why would you need the full BFT Paxos among trusted participants?

Still, the claim that Bitcoin represents "a breakthrough in computer science" on the Byzantine Generals Problem rings false to me. First, we already had BFT algorithms, just no compelling need for them. Second, if this is really a computer science breakthrough, where's the proof?

Don't get me wrong, I think Bitcoin is an enormous breakthrough in engineering terms. It's just too important now to not have the proven properties we're relying on.

Re: Why Bitcoin Matters

#170

Post by plock » Tue, Jan 21, 2014, 11:06 PM UTC

lectrick wrote: post #151

interstitial wrote: post #116

Earlier quoted context omitted.

The dollar's value comes from the barrel of gun. I thought that was plain enough. Bitcoins not so much.

> I thought that was plain enough. All that barrel does is stop counterfeiters and tax evaders. Neither of those things are "intrinsic value". And Bitcoin is FAR more difficult to duplicate (you can't even forge or counterfeit it, you have to "double spend" it in a tricky operation requiring owning at least 50% of the network, good luck with that) than any other currency. Read this: http://bitcoinsurvey.wordpress.com…

>All that barrel does is stop counterfeiters and tax evaders. Neither of those things are "intrinsic value".

If anything can be said to have 'intrinsic value', being free from prosecution is surely one of those things. Dollars can buy you freedom from prosecution for non-payment of taxes. That's a lot closer to 'intrinsic value' than anything bitcoin can put up.