Bitcoin: the Stripe perspective • Hacker News Board

Re: Bitcoin: the Stripe perspective

#41

Post by mbesto » Mon, Jul 21, 2014, 6:57 PM UTC

napoleond wrote: post #9

This is my favourite article about Bitcoin to date, and properly describes one of the main ideas I wish Bitcoin detractors would come around to. Bitcoin has a lot of problems as a unit of account and as a store of value, but that is not primarily what Satoshi was building ( https://bitcoin.org/bitcoin.pdf ). Bitcoin is, and has always been, a medium of exchange first and foremost. It still has some shortcomings in th…

> Bitcoin has a lot of problems as a unit of account and as a store of value, but that is not primarily what Satoshi was building (https://bitcoin.org/bitcoin.pdf). Bitcoin is, and has always been, a medium of exchange first and foremost.

Which is consistent with the primary function and origin of money: because there is a division of labor it means a common medium of exchange must exist. The secondary functions of money - store of value and unit of account - are precisely that...secondary. You can't have the secondaries without the primary (see: gold). I sort of wish the OP wouldn't have made the characteristic of money as being a medium of exchange out to be a "oh well money is also this". The problem is that the press got a hold of Bitcoin for it's secondary reasons and drove the eyeballs to that without defining the problem to begin with: our medium of exchange, globally, is broken.

IMHO, Bitcoin adoption curve is taking exactly the course it should be: the exchanges that are at most threatened by poor inefficiencies ("third world") are seeing the most benefit. The first world doesn't have a problem moving money because there are solutions...they just cost money. Third world doesn't have solutions. Once they all see benefit the "first world" will adopt. It won't happen overnight and it shouldn't.

Re: Bitcoin: the Stripe perspective

#42

Post by [deleted] » Mon, Jul 21, 2014, 6:57 PM UTC

[deleted]

Re: Bitcoin: the Stripe perspective

#43

Post by zby » Mon, Jul 21, 2014, 6:58 PM UTC

sassypants wrote: post #35

napoleond wrote: post #9

This is my favourite article about Bitcoin to date, and properly describes one of the main ideas I wish Bitcoin detractors would come around to. Bitcoin has a lot of problems as a unit of account and as a store of value, but that is not primarily what Satoshi was building ( https://bitcoin.org/bitcoin.pdf ). Bitcoin is, and has always been, a medium of exchange first and foremost. It still has some shortcomings in th…

What exactly is the problem with a store of value with 500% annual returns? I read people talking about the supposedly awful volatility, but they fail to mention that the volatility has a very distinct trajectory. Bitcoin is volatile as it increased in value by orders of magnitude year after year. The article repeats this fear of volatility in the context of one's live savings. How frequently do people tap their life…

The growth has to stop very soon - exponential functions can go on only so long. And when it stops the volatility will not stop - this is a prediction of course - but I am pretty sure that it will be this way.

Re: Bitcoin: the Stripe perspective

#44

Post by freedom123 » Mon, Jul 21, 2014, 6:59 PM UTC

Bitcoin, no matter how you word it or rationalize it will always have a root problem and inherent risk...it is backed by nothing. Users today think its usage gives it market value and it can but to a limit. Money (USD) originally (the dollar bill) worked because it was back by gold. A metal that worked because everyone on the planet wants it. That dollar bill was a "check" or agreement stating, this dollar bill represents this much gold thus the value of money. The USA today does not have gold backing its money-- so as you can see we already have a bitcoin and the USA will not allow you to complete with its money - enjoy

Re: Bitcoin: the Stripe perspective

#45

Post by nawitus » Mon, Jul 21, 2014, 6:59 PM UTC

MichaelGG wrote: post #20

jmhain wrote: post #12

Earlier quoted context omitted.

I think it's just a consequence of Metcalfe's law; the first implementation of a good idea will never be perfect, but has the greatest chance of succeeding. Sure IPv4, JavaScript, Bitcoin, and countless others have defects, but the world is still better with than without them.

JavaScript could have had a better design without impacting adoption. Likewise if IE had fixed the language along with all the other improvements they added, it'd also be better by now. IPv4 is vastly better than JavaScript for what it does.

If Brendan Eich wouldn't have rushed the JavaScript design, Netscape would've chosen another language which was already in the works (or complete?). It was apparently similar to PHP, and probably would've been worse than JavaScript.

Re: Bitcoin: the Stripe perspective

#46

Post by maaku » Mon, Jul 21, 2014, 7:01 PM UTC

napoleond wrote: post #9

This is my favourite article about Bitcoin to date, and properly describes one of the main ideas I wish Bitcoin detractors would come around to. Bitcoin has a lot of problems as a unit of account and as a store of value, but that is not primarily what Satoshi was building ( https://bitcoin.org/bitcoin.pdf ). Bitcoin is, and has always been, a medium of exchange first and foremost. It still has some shortcomings in th…

Bitcoin (the currency) is a terrible medium of exchange. It may make for a decent store of value. Are you sure you're using those terms correctly?

Bitcoin (the protocol) is awesome for payments. But that is a separate issue from the monetary policy underlying bitcoin (the currency), which is stacked against being a medium of exchange.

Re: Bitcoin: the Stripe perspective

#47

Post by maaku » Mon, Jul 21, 2014, 7:01 PM UTC

boucher wrote: post #37

sassypants wrote: post #35

Earlier quoted context omitted.

What exactly is the problem with a store of value with 500% annual returns? I read people talking about the supposedly awful volatility, but they fail to mention that the volatility has a very distinct trajectory. Bitcoin is volatile as it increased in value by orders of magnitude year after year. The article repeats this fear of volatility in the context of one's live savings. How frequently do people tap their life…

Unless of course they invested when bitcoin was over $1000. Ever heard the phrase "past performance is not an guarantee of future returns?"

Gold is the typical store of value asset, and the story there is very similar.

Re: Bitcoin: the Stripe perspective

#48

Post by sassypants » Mon, Jul 21, 2014, 7:05 PM UTC

lxmorj wrote: post #36

sassypants wrote: post #35

Earlier quoted context omitted.

What exactly is the problem with a store of value with 500% annual returns? I read people talking about the supposedly awful volatility, but they fail to mention that the volatility has a very distinct trajectory. Bitcoin is volatile as it increased in value by orders of magnitude year after year. The article repeats this fear of volatility in the context of one's live savings. How frequently do people tap their life…

Dude, go look up tulips on wikipedia.

Bitcoin has shown predictable, steady growth sustained over a many year period.

https://i.imgur.com/kV2IRT5.png

Tulips experienced exponential an order of magnitude shift in price during the course of one year in 1637.

Unlike tulips, Bitcoin is widely appreciated for its utility. I don't think the comparison is as meaningful as critics would make it out to be.

Steady logarithmic growth in valuations is a normal phenomenon among tech startups -- yet it seems to me that many otherwise smart people are flustered by this growth when applied to Bitcoin, thinking it must be too good to be true.

Re: Bitcoin: the Stripe perspective

#49

Post by Taek » Mon, Jul 21, 2014, 7:05 PM UTC

jarin wrote: post #30

Taking this a step further, when using it as a pure transport medium, the cryptocurrency itself doesn't matter. It could be Bitcoin, Litecoin, Dogecoin, 2304293f20983uf2089j2f3coin, or whatever, as long as it's liquid enough to convert back and forth. What we really need is a gateway system that will intelligently convert between your local currency -> the cryptocurrency with the best liquidity/exchange rate -> the d…

I see the future of cryptocurrency as being a bunch of behind-the-scenes transactions where the currency you are using isn't relevant at all, because everything will be hyper-liquid.

You pick you favorite currency (or portfolio) as a store-of-value, and then if you need to trade with other people, your client and portfolio negotiates with their client and portfolio to arrange an acceptable exchange. Then you use a decentralized network of exchanges to restore any ratios you want to maintain.

This allows people to create their own currency and enforce it's particular use, backing it explicitly. For example, you could crate 'SoylentCoin', which can be cashed in for 1 month of Soylent shipped by a certain date. You sell it for some price that keeps you in business, but then the market is free to trade it at-will and you can hit more efficient price points for your product. Sometimes you might find that your product is worth a lot more than you are selling it for.

Or in a decentralized example, you could do proof-of-resource sale that sells coins directly transferable to a type of resource. In example of disk storage, you provide storage to the network in return for disk-coins. To get the storage, you need to buy disk-coins. This isolates the disk-coin price to the supply and demand of disk storage precisely. Anyone can participate, and upon buying or selling the disk-coin, they can immediately convert to or from whatever portfolio of coins they personally maintain.

Re: Bitcoin: the Stripe perspective

#50

Post by sassypants » Mon, Jul 21, 2014, 7:11 PM UTC

zby wrote: post #43

sassypants wrote: post #35

Earlier quoted context omitted.

What exactly is the problem with a store of value with 500% annual returns? I read people talking about the supposedly awful volatility, but they fail to mention that the volatility has a very distinct trajectory. Bitcoin is volatile as it increased in value by orders of magnitude year after year. The article repeats this fear of volatility in the context of one's live savings. How frequently do people tap their life…

The growth has to stop very soon - exponential functions can go on only so long. And when it stops the volatility will not stop - this is a prediction of course - but I am pretty sure that it will be this way.

But why would it stop sooner than a $200 billion market capitalization? Or $700 billion for that matter?

When Facebook was raising money at $10 billion valuations would it be wise to predict that it had to "stop very soon"?

I don't disagree that Bitcoin will at some point stop revaluing upwards by orders of magnitude, and I don't pretend to know what the market cap will be in a few years time. But I don't think it would be all that surprising if Bitcoin were to be more valuable than say, What's App. And for that to happen we're going to likely see another order of magnitude adjustment.