61–70 of 191 posts
Remittance not useful because of currency exchange spreads? Well then no currencies are useful for remittance.
As for the illegal part, are US dollars not useful for Drugs, Gambling, Tax Evasion and Escaping capital controls anymore? So then, when was the last time some one used US Dollars for any of the illegal activities above? The news didn't reach me.
Earlier quoted context omitted.
Haha, because currency issued by a central reserve bank with historical origins in letters of credit and promissory notes is totally just like a cryptocurrency designed for illegal activity and backed by the wasteful expenditure of millions of dollars of electricity. It's the same thing, and you're so clever for noticing.
I never said it was the same thing. My point was to illustrate that they have similarities. The amount of mental energy you use to formulate these insane mental projections must be enormous. You should try to put it to better use. It's fine that we're having a disagreement though. I probably won't change your mind anyway and you'll just go back to purporting the status quo being fed to you by authority figures. That'…
Just because it seems obvious that Bitcoin is a narco-currency masquerading as a ponzi scheme, doesn't mean I am in favor of the status quo, nor to I have much respect for authority figures.
Given that VCs are piling investments into Bitcoin in the hopes of later selling to the greater fool; this makes Bitcoin a snake oil sold by authority figures trying to make a buck at the expense of the gullible.
Bitcoin's killer app is its function as a store of value. It's hard to see this when there are plenty of things that are storing value better at the moment, like traditional currencies and assets. But I don't think that will hold indefinitely (especially given our asset bubble), and that will lead people to look for ledgers with predictable supply, like gold and Bitcoin. Then again, maybe I'm crazy.
Isn't extreme volatility a very bad attribute for a store of value?
Play out the end of an asset bubble in your head. Lots of people sell their assets, and now have dollars. The job of our policy makers is to make sure dollars don't increase in value at all, and don't decrease in value too quickly. But if lots of people are exchanging assets for dollars, the demand for dollars makes the value go up. Our policy makers will take a variety of actions to make their value go down by up to 2% a year. If we're lucky, they'll be able to stave off deflation.
So if you've sold your assets and want to store your value, you really want some sort of ledger with a predictable supply so your value can go up, not stay the same or decrease by 2%. Gold is traditional the ledger that people seek when these sorts of things happen. But enough people will choose Bitcoin to raise the price significantly, which will make others choose it as well.
Gold might be the right bet, but Bitcoin is a more functional ledger (easy to store, easy to transfer, etc.), and the upside is higher. But again, maybe I'm crazy.
One of my biggest problems with bitcoin is that half the bitcoins which will ever be created are already in circulation. That means the rise of bitcoin is just going to create a new "1%", who own the majority of the currency.
According to this half the world's population is unable to get a bank account: http://mckinseyonsociety.com/half-the-world-is-unbanked/ Bitcoin allows for anyone with internet or even text-messaging access to hold, receive and send money. To me, this seems revolutionary. I don't know how the author can ignore this.
I suspect that the half of the word's population that is unable to get a bank account has a sizable overlap with the fraction that doesn't have internet or even text-messaging access.
http://data.worldbank.org/indicator/IT.CEL.SETS.P2?order=wba...
I derided Bitcoin and cryptocurrencies in general until I seriously looked into it, and then I could hardly sleep for days because of the huge implications of it. Bitcoin allows people who are unbanked, especially in developing countries, to hold and transmit money across the world at practically zero cost. Since bitcoin is decentralized, there are no middlemen like banks to take a cut or freeze your account. Besides…
Except the unbanked have been transmitting money across the world outside of banks for a few centuries now: http://en.wikipedia.org/wiki/Hawala I'm not so sure Bitcoin is a ground breaking change for the unbanked in developing countries, especially when the hawala market is substantially bigger and already widely used.
Read some reports and you'll find the average cost of remittance for poorer countries averages around 10%, an absurd borderline criminal rate.
You'll simultaneously find inflation rates of 10-30% not being uncommon.
The ability then to access international derivative markets, i.e. the option to easily buy and hold dollars using bitcoin providing relief from crazy inflation, and the ability to transfer it to others at the cost of moving 500 bytes of data, is hugely interesting.
Services like Bitpesa (cheaper remittance) or Bitreserve (hold money in different currencies using bitcoin) are the first such steps. In a few years I expect these things to massively undercut remittance costs and provide interesting relief from inflation. Some of the things the early Paypal founders were interested in, including Peter Thiel who spoke on the topic often in the early days.
I would tend to agree with the author here. I can't see Bitcoin ever emerging as something legal and useful to the average person. >Bitcoin enthusiasts disagree, claiming illicit activity is practically non-existent. Instead, they preach decentralization, trustlessness and smart contracts - none of which are benefits but merely features. Bitcoin enthusiasts preach an awful lot of things, particularly preaching about…
However, the features it has should be a huge source of inspiration for the banking system imo.
I don't understand why we even need to discuss the usefulness of Bitcoin beyond the fact that it's decentralized. Its decentralized nature, alone, is its most important attribute. Bitcoin cannot be stopped. Period. As long as multiple people can run a program on a set of computers that can connect to each other, Bitcoin can exist. If you want to receive it anonymously, you can perform services anonymously and take pa…
> Its decentralized nature, alone, is its most important attribute. Bitcoin cannot be stopped. Period. It's just as decentralized as tulip bulbs ( http://en.wikipedia.org/wiki/Tulip_mania ), and Bitcoin will be "stopped" when a) it is illegal to transmit or receive a blockchain (unlikely), or b) when people realize the only value Bitcoin has is in the belief that Bitcoin has value. All it takes for Bitcoin to be wort…
But that's true for almost any modern currency. If everyone believed that the US dollar is worthless it would become near worthless. There will always be some demand because US citizens have to pay their taxes in US dollars but that wouldn't be enough to keep the dollar at anywhere near it's current value.
Earlier quoted context omitted.
> All it takes for Bitcoin to be worthless is the belief that Bitcoin is worthless. Isn't this true for every currency that isn't literally a physically scarce and useful resource (gold, grain, uranium, gold-pressed latinum?)
No, it's not necessarily true for a currency backed by a state, since the state can force you to pay taxes in that currency, thus creating demand for the currency and underpinning its value.
A currency.
And a way to reliably account for who owns what, with no central authority.
As a currency, it has the problem that there's no natural demand for it. Nobody needs it to pay their taxes, and it's not widespread enough to be worth having for the common person. Naturally this could change, but until then you've got a game theory problem.
The protocol side is what makes it interesting. The protocol is basically a way for us to collectively scribble on a giant wall that grows every 10 minutes. And that wall cannot be changed, thanks to the clever incentive system that makes the primary use to account for who owns which bitcoins. The technology would still work if you used it to scribble love letters, but nobody would have an interest in keeping the system going.
So is this protocol useful? It very well could be. For instance, any number of currency-like things could be (and are) accounted for. You could put the whole land registry on the blockchain, and then you'd always be able to verify some person owned a parcel. You can put documents (or hashes of documents) in it and prove it existed at some time. The list goes on.
The big question is whether this protocol is economical and convenient enough to actually displace what's there already. We already have a land registry. We already have notaries.
There also needs to be some thought put in about how the infrastructure will be paid for. If the currency is useless, why do miners want to keep mining? Sure, there's the potential it won't be useless in the future, but how long can you string along an operation like that for? How do you plan if the price is so volatile it might be zero or a million in five years? Each price implies a very different level of investment.
One strategy might be a slightly different altcoin system (many, many altcoins have been invented) that tries to share the cost evenly, so no one economic actor has a special position. Another thing you could do is pass real money instead of BTCs.
But I think the protocol core is here to stay.