Why the practical applications of Bitcoin will be limited • Hacker News Board

Re: Why the practical applications of Bitcoin will be limited

#91

Post by ForHackernews » Wed, Mar 04, 2015, 9:21 PM UTC

lsadam0 wrote: post #52

ForHackernews wrote: post #44

Earlier quoted context omitted.

> What does a scammer selling unlicensed shares in porn production have anything to do with the success or failure of cryptocurrency? Because it demonstrates dramatically that one of the main purported advantages of bitcoin (its "trustless" nature) is comically false. As you say, bitcoin is just a payment method, and contrary to what its advocates claim, it does absolutely nothing to prevent shady scams or eliminate…

No. You're conflating the trust-less nature of bitcoin with the idea that individuals who possess Bitcoin are trustful. The very nature of Bitcoin lies on the assertion that no individual is trustful, and that a trustful network can arise in which no individual node is trusted. The blockchain allows us to verify that a particular operation has occurred. For example, the blockchain will verify that a particular addres…

Maybe you should clue in the rest of the bitcoin community, e.g. http://www.reddit.com/r/Bitcoin/comments/1f2ubh/why_bitcoins...

> 3) No fraud or charge-back (from a seller/business PoV).

> 13a) Potentially, because of the profit from no fraud and the deflationary nature of Bitcoin. Vendors will realise they can lower their prices for Btc purchases. And when inflation ends, due to no fraud, they will still be able to have lower prices than competitors.

Re: Why the practical applications of Bitcoin will be limited

#92

Post by frozenport » Wed, Mar 04, 2015, 9:22 PM UTC

aminok wrote: post #85

JoeAltmaier wrote: post #71

Earlier quoted context omitted.

I'm worried as you are. That silicon valley snobs will ignore a thousand years of learning, just to spite 'the man'. We've seen abominable cheating, lying and abuses in virtual currency systems - that surpass anything physical currency systems have experienced, in that they happen at the speed of the internet if nothing else.

I don't believe people should be banned from doing a whole host of things to ostensibly prevent cheating and fraud. The faith you have in centralised authority is extremely dangerous and leads to things like the multi-trillion dollar LIBOR scandal. Unlike with a market system, industries centralised through thousands of regulatory bans cannot evolve because they are typically dominated by a small number of super-gian…

Your post mentions nothing about the necessity of inflation for economic recovery and growth. Indeed is has nothing to do with economics, just listing difficulties for regulators. You bring up the internet but remember that it is goverment regulator who protect and enforce Net neutrality - not Comcast.

Re: Why the practical applications of Bitcoin will be limited

#93

Post by aminok » Wed, Mar 04, 2015, 9:26 PM UTC

sida wrote: post #17

shawnhermans wrote: post #13

The author makes a lot of statements but doesn't really back them up with solid facts or analysis. Consider the second reason of "Bitcoin will not end the need for trusted central parties" and claims that intermediaries do more than just payment processing. As an example, he talks about YouTube and revenue splitting. I don't understand the connection between YouTube revenue splitting and Bitcoin replacing traditional…

To build a bit more context, there are a lot of talks about how Bitcoin will: - Replace youtube in the form of a decentralized video platform - Decentralized Spotify - Decentralized Uber A google search of DAO (Decentralized Autonomous Organization) and you will find many many people talking about that. The thesis is that, no Bitcoin won't decentralize all these intermediaries, instead what is more feasible is that m…

>As for comparison payment processing space, this is more in point 1. Bitcoin is not cheaper. Bitcoin is extremely expensive to use and intended to be expensive.

Bitcoin is currently overly secure, due to the block subsidy, so therefore total mining costs relative to number of transactions is very high. As the block subsidy diminishes, this ratio will decline

Total security can be maintained, without transaction fees increasing, if transaction volumes increase, which is entirely possible, and is what has historically happened.

Re: Why the practical applications of Bitcoin will be limited

#94

Post by lsadam0 » Wed, Mar 04, 2015, 9:33 PM UTC

ForHackernews wrote: post #91

lsadam0 wrote: post #52

Earlier quoted context omitted.

No. You're conflating the trust-less nature of bitcoin with the idea that individuals who possess Bitcoin are trustful. The very nature of Bitcoin lies on the assertion that no individual is trustful, and that a trustful network can arise in which no individual node is trusted. The blockchain allows us to verify that a particular operation has occurred. For example, the blockchain will verify that a particular addres…

Maybe you should clue in the rest of the bitcoin community, e.g. http://www.reddit.com/r/Bitcoin/comments/1f2ubh/why_bitcoins... > 3) No fraud or charge-back (from a seller/business PoV). > 13a) Potentially, because of the profit from no fraud and the deflationary nature of Bitcoin. Vendors will realise they can lower their prices for Btc purchases. And when inflation ends, due to no fraud, they will still be able to…

The OP, BitcoinJobe, goes on in the comments of your link to clarify the statement is that there are not fraudulent chargebacks in Bitcoin. He's right. There aren't. You can't make a bitcoin purchase, receive the item, and then get your money back through a charge back. He's right on both points.

Fraudulent chargebacks are a legitimate concern for sellers, and I assure you that loss is reflected in the selling price you and I pay. 13a asserts that if a vendor is able to eliminate the chargeback problem through bitcoin use, then the savings can possibly be passed on to consumers.

What's insane about any of that? You're not comprehending what you're arguing against.

Re: Why the practical applications of Bitcoin will be limited

#95

Post by erok » Wed, Mar 04, 2015, 9:36 PM UTC

sp332 wrote: post #68

DennisP wrote: post #63

Earlier quoted context omitted.

VISA is typically around 2000 tx/sec, so it'd only saturate at peak. And anyone with gigabit fiber won't be bothered even at peak. If we reach that traffic level, gigabit will probably be fairly widespread by then. I don't see how those nefarious miners could succeed, unless they were powerful enough to carry out a 51% attack anyway. Otherwise their secret chain will soon fall behind the public chain.

The fewer miners there are, the easier it is to carry out a 51% attack. And the top miners have much more processing power than the average miner. Just a few of the top ones collaborating could carry it off.

This used to be an issue with pools but I don't believe this to be a risk so much anymore.

Re: Why the practical applications of Bitcoin will be limited

#96

Post by grubles » Wed, Mar 04, 2015, 9:50 PM UTC

GlickWick wrote: post #11

The title is very click-baity, I think we can all agree on that. However, a lot of the points made within are completely legit. The Bitcoin world is rife with scams and one of the primary uses of Bitcoin is to engage in illegal transactions. The benefits of de-regulation are obvious, but the downsides are killing it right now. A lot of people are stuck on the "regulation is evil!" rehtoric due to the current issues w…

>one of the primary uses of Bitcoin is to engage in illegal transactions.

Do you have a source for that statement?

Re: Why the practical applications of Bitcoin will be limited

#97

Post by grubles » Wed, Mar 04, 2015, 9:56 PM UTC

JoeAltmaier wrote: post #71

frozenport wrote: post #69

Is anybody worried about the terrible consequences if Bitcoin does succeed? It will be a like putting the world back on the gold standard, except with even less inflation! Is anger at online transaction fees worth destroying the world economy?

I'm worried as you are. That silicon valley snobs will ignore a thousand years of learning, just to spite 'the man'. We've seen abominable cheating, lying and abuses in virtual currency systems - that surpass anything physical currency systems have experienced, in that they happen at the speed of the internet if nothing else.

>lying and abuses in virtual currency systems - that surpass anything physical currency systems have experienced.

Bernie Madoff wasn't using dollars to run his scheme? What about the housing market bubble? Bank bailouts? I don't recall those happening in bitcoin-land. The fact is that scams happen everywhere all of the time with everything. Beanie babies...fake gold bars... you name it.

Re: Why the practical applications of Bitcoin will be limited

#98

Post by sp332 » Wed, Mar 04, 2015, 10:01 PM UTC

erok wrote: post #95

sp332 wrote: post #68

Earlier quoted context omitted.

The fewer miners there are, the easier it is to carry out a 51% attack. And the top miners have much more processing power than the average miner. Just a few of the top ones collaborating could carry it off.

This used to be an issue with pools but I don't believe this to be a risk so much anymore.

Why not? Pools are still huge, and at least the "ethical" members of a pool could move their processing power to a different pool. If individuals are bigger than pools now, that means even fewer people have to collude to get 51%.

Re: Why the practical applications of Bitcoin will be limited

#99

Post by aminok » Wed, Mar 04, 2015, 10:32 PM UTC

JoeAltmaier wrote: post #87

aminok wrote: post #85

Earlier quoted context omitted.

I don't believe people should be banned from doing a whole host of things to ostensibly prevent cheating and fraud. The faith you have in centralised authority is extremely dangerous and leads to things like the multi-trillion dollar LIBOR scandal. Unlike with a market system, industries centralised through thousands of regulatory bans cannot evolve because they are typically dominated by a small number of super-gian…

No faith; just experience. Virtual currencies are unregulated, and behave like it. That sort of system got us the great depression and numerous recessions. I appreciate some supporters are there for good reasons; 'snob' may be too strong a word. But it's naïve to believe a pure unregulated market is a good idea, especially one that responds at the speed of light. And where did that comment about banning bitcoin come…

The experience of a brand new tech industry is not indicative of its future. As mentioned, the internet matured, and became safer, on its own, without regulations. Regulatory prohibitions would have destroyed everything good about the internet.

The Great Depression was caused by the Federal Reserve, not free markets. The current system, in place since 1973, has overseen an increase in the banking sector's share of total corporate profits to 42%, while the Middle Class has been left behind, and the industrial core has been hollowed out.

There have never been as many regulatory bans, centralized regulatory agencies, and leeway for the central bank to manipulate the money supply, as there have been over the 42 years. I'd be interested to know why you don't blame the current state of the economy on the anti-free-market system, the way you pin 1929 on free markets.

>And where did that comment about banning bitcoin come from?

I got the impression that you were endorsing the prevailing political ideology that favors regulatory control over industries. Regulations are a type of ban in function, if not in popular wisdom. They ban action A, if conditions X, Y, and Z aren't met. We now have thousands of such bans, limiting our actions. It makes for an unfree society. It's naive to think that government bureaucrats will not do more harm than good when given the ideological cover to prohibit nearly any activity.

Re: Why the practical applications of Bitcoin will be limited

#100

Post by aminok » Wed, Mar 04, 2015, 11:04 PM UTC

frozenport wrote: post #92

aminok wrote: post #85

Earlier quoted context omitted.

I don't believe people should be banned from doing a whole host of things to ostensibly prevent cheating and fraud. The faith you have in centralised authority is extremely dangerous and leads to things like the multi-trillion dollar LIBOR scandal. Unlike with a market system, industries centralised through thousands of regulatory bans cannot evolve because they are typically dominated by a small number of super-gian…

Your post mentions nothing about the necessity of inflation for economic recovery and growth. Indeed is has nothing to do with economics, just listing difficulties for regulators. You bring up the internet but remember that it is goverment regulator who protect and enforce Net neutrality - not Comcast.

Hardly anyone thinks Bitcoin is going to displace national currencies. In a Bitcoin success scenario, bitcoin would be an additional currency that co-exists with inflationary currencies. As governments will always retain the power to tax, their currencies will always have value, and they will always be able to spur activity through inflationary monetary policy.

" You bring up the internet but remember that it is goverment regulator who protect and enforce Net neutrality - not Comcast."

That's the telecoms, which deal with the underlying infrastructure, not 'the internet'. The telecommunication industry naturally gravitates to a oligopoly, because it provides a utility. It is inherently not competitive, so it's justifiable for government to set ground rules. That is until a decentralized global meshnet can replace the current infrastructure.

If the internet itself had been subject to thousands of regulatory bans, like prohibiting people from running a server without a license from a state or federal regulatory agency, it would be nothing today.