Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Bitcoin: the Stripe perspective

stripe.com

Post reply on HN
Print view View original

161–170 of 249 posts

Re: Bitcoin: the Stripe perspective

#161

Post by XorNot »

Vik1ng wrote: post #137
pmorici wrote: post #104

Earlier quoted context omitted.

The answer for why Bitcoin instead of Gold or stocks or whatever comes down to trust and logistics. Take Gold for example you have to have to either ship the gold around which is expensive and slow or have a trusted third party store the gold and handle netting out the transactions between entities or accept delayed payment and trust that the counter party will deliver the underlying asset. Bitcoin does not require t…

You are completely ignoring that you still have to trust your own security and 3rd party apps and services.

Also that BTC has no chargebanks, fraud detection etc. Once its gone from your account its gone.

Re: Bitcoin: the Stripe perspective

#162

Post by kijin »

xiphias wrote: post #114
rsp1984 wrote: post #97

Earlier quoted context omitted.

Let me ask a dumb question: If money exchange is the main problem that Bitcoin solves, then why isn't the problem of money exchange attacked directly instead, i.e. through some other less volatile classical stores of value like gold or stock? Why is money exchange a problem anyway and why couldn't a classical wire transfer solve the problem? The article doesn't say anything about these things and the underlying princ…

You're not alone: all the people who bought Bitcoin and holding it use Bitcoin mainly as the best store of value in human history. All fiat currencies are being printed like crazy (CHF was an exception, but it changed a few years ago)

Cryptocurrencies are no different in that regard.

The maximum amount of each cryptocurrency is hardcoded into their design, but nothing stops people from "printing" new cryptocurrencies. There's bitcoin, litecoin, peercoin, darkcoin, namecoin, primecoin, and of course dogecoin... Gimme a few hours and I could cook up xiphiascoin in your honor.

And when something happens that makes people migrate en masse from one *coin to another (perhaps a security flaw in the reference implementation), you might wake up to find that your old coins are now worth less than a Zimbabwe dollar.

Re: Bitcoin: the Stripe perspective

#163

Post by kaonashi »

xiphias wrote: post #123
wpietri wrote: post #116

Earlier quoted context omitted.

Could you explain that? Compared with traditional currencies, Bitcoin's high volatility and unknown long-term risk profile make it look like a terrible store of value to me. (And, for similar reasons, very attractive to speculators.)

Volatility should never be important when selecting a store of value. Gold and silver has much volatility compared to USD and hamburger price, still if you sold a cow 5000 years ago in Egypt for silver, you could buy at least 0.1 cows from the same amount of silver today. Silver doesn't lose more than 0.01% of its value/year (still the volatility is much higher than that). It's actually more important to understand w…

How many ancient Egyptians are around wanting to trade their silver coin for cows?

Re: Bitcoin: the Stripe perspective

#164

Post by neom »

drusenko wrote: post #147
neom wrote: post #133

Earlier quoted context omitted.

A currency can be as volatile as it wants from day to day, but if over a very long time the value appreciates consistently then wouldn't that make it a good value store? You're hedging day to day against a long term win, surely?

how can you make the assumption that "over a very long time the value appreciates consistently"? in fact, one definition of a bubble is when people start to assume that an asset will always appreciate over time...

I don't, I think it's dumb.. but I think that's how people are defining it? I'm no economics major though. Totally ignorant.

Re: Bitcoin: the Stripe perspective

#165

Post by neom »

a_c_s wrote: post #144
neom wrote: post #133

Earlier quoted context omitted.

A currency can be as volatile as it wants from day to day, but if over a very long time the value appreciates consistently then wouldn't that make it a good value store? You're hedging day to day against a long term win, surely?

Nope: long term appreciation may make it a good investment but a poor store of value. Lets say you have two magical safes, and you put $100 in each one. The first safe gives you the real-dollar value of what you put in, less $0.50 per-month. So a year later, you get $94 worth of inflation-adjusted dollars no matter how high or low inflation has been over the course of the year. The other safe gives you an additional…

Gotcha. I've been thinking a lot about BTC recently, but I'm useless when it comes to economics and there is a lot of "faffing" around it. Thanks for the information. :)

Re: Bitcoin: the Stripe perspective

#166

Post by lambda »

megablast wrote: post #158
Bakkot wrote: post #107

Earlier quoted context omitted.

The answer to basically all of your questions is that to transfer money, you need to move money . This can be basically a promise of money, as with wire transfers, or physical, as you'd do by transporting bullion or cash. The problem with using a promise to move money is that you have to trust whoever's promising. That works alright if there's a central authority, like a bank, but less well if you don't want to trust…

> The answer to basically all of your questions is that to transfer money, you need to move money. Is that true? I everyone around the world is moving money around, then most trades can be covered by not moving any money around, just between people in the same country. If I want to move $1000 to France, and someone else wants $1000 from France, we just swap money, and two people in France do the same. What is left is…

> What is left is keeping track what everyone has put in, and what they have taken out.

And that's exactly what Bitcoin is; a secure digital ledger. It's a way to securely and globally record "person A has 10 BTC, gave person B 5BTC, then person B gave persone C 3 BTC" in a way that doesn't allow person A to simultanously have given those same 5 BTC to person D (who, given the anonymity of the internet, may also be person A).

That's all Bitcoin does; it provides a secure way to record such transactions without having a trusted third party who must trust to increment and decrement the right accounts in the right way.

Re: Bitcoin: the Stripe perspective

#167

Post by kaonashi »

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 problem is with a medium of exchange with 500% annual returns.

Re: Bitcoin: the Stripe perspective

#168

Post by kaonashi »

embolalia wrote: post #110
krschultz wrote: post #56

Earlier quoted context omitted.

I agree with this completely. BTC is proving out the idea, but the total market cap is only $8 billion. What stops Goldman Sachs from seeding a cryptocurrency tomorrow with a market cap that massively eclipses BTC? The big IBanks are sloshing billions and billions of dollars around all the time. There is this assumption that BitCoin is so big that it is the winner, but it is "so big" relative to a bunch of people tha…

The thing that stops them is the lack of a reason to start them. Why would Goldman throw that much money at a new system, rather than using the existing one? Bitcoin has an existing user and development base; it's proven, whether it's at full scale or not. Goldman does not have a guarantee that their hypothetical coin will gain any acceptance outside their walls. And Goldman would have to ask themselves that same que…

> Why would Goldman throw that much money at a new system, rather than using the existing one

Why would Apple create their own app store, when they could just use existing ones?

Re: Bitcoin: the Stripe perspective

#169

Post by boucher »

sassypants wrote: post #50
zby wrote: post #43

Earlier quoted context omitted.

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 wo…

When Webvan was raising money valued at $1 billion would it have been wise to predict that it would "stop very soon"?

Anecdotes are not market principles.

Re: Bitcoin: the Stripe perspective

#170

Post by oska »

nlh wrote: post #5

This is one of the best posts on the "state of the Bitcoin economy" I've read yet. They nail a few key points that shows they get it in a real-world sense. * Mass-consumer adoption of Bitcoin is a tough sell in developed countries (USA, etc.) * Bitcoin the Network may ultimately be more valuable than BTC the currency * "No chargebacks!" is a pitch to merchants for BTC, not consumers. Consumers like chargebacks & trus…

> "No chargebacks!" is a pitch to merchants for BTC, not consumers. Consumers like chargebacks & trust.

Consumers also like discounts. Merchants can return the savings from unfair chargebacks and reduced fraud as a percentage discount for paying with bitcoin. Many merchants are already doing this.

And the multisignature transaction feature of bitcoin allows for a more robust and fairer 'chargeback' feature than currently provided by credit cards, where arbitration is done by a third party who has built a reputation for fair rulings. See for example Bitrated [1].

[1] https://www.bitrated.com/faq.html

Post reply on HN