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What's the use for Bitcoin?

scottyli.com

101–110 of 191 posts

Re: What's the use for Bitcoin?

#101
I think bitcoin will be incredibly useful in the digital goods economy. Global digital marketplaces need payment solutions that transcend nationalities. If you create an album of music and want to sell digital copies online you should be able to accept payments from customers anywhere in the world using any currency. Bitcoin allows that to happen. If you want to create a video content channel and let people pay a monthly subscription there should not be any type of restriction because of what country the viewer lives in. All of these borders and constraints are artificial and unnecessary in a digital economy. If you want to create a digital service that operates entirely on the internet, why should you be restricted to using a subset of currencies? Bitcoin can be the transaction layer that makes all the human constraints irrelevant. Digital goods also offer essentially no cost of replication so the only real limitation on the size of the digital economy is the number of agents participating in it, which increases daily. The tools needed to create and consume digital products are becoming cheaper every year and more people are gaining access to them globally. IMO the future of the world economy is going to be increasingly digital, and increasingly created by independent producers. Games, books, education, movies, short format shows, PC and mobile applications, web services, photography, art, comics, all will be available to anyone in the world at very low cost and with no necessity for restriction. As I see it the only thing holding back this digital revolution is that consumers are largely ignorant as to it's existence and continue to support antiquated development and delivery systems. I do not think that the rising young generations have this impediment in their habits. What really seems to be missing is a global system for independent content discovery. I'd like to see a universal amazon style digital product aggregation and distribution system that only uses digital currency. The store would provide discovery and distribution (maybe digital currency exchange as well) to a global audience for a transaction fee that beats traditional payment methods. A wiki style product information page that allows users to provide additional product details and translations for localization would be interesting to see (while difficult to moderate).

tl;dr with bitcoin anyone in the world can create a digital product with nearly zero replication or distribution costs and sell it to anyone else in the world basically instantly. That infrastructure exists today but is underutilized.

Re: What's the use for Bitcoin?

#102
post #6

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…

The article we're discussing might be wrong, but it's fairly level-headed.

Responses like this, with breathless invocations of the world-changing implications of Bitcoin and heroes-and-villains narratives about governments and banks, sap credibility from Bitcoin.

They suggest that very simple arguments with Bitcoin critics can't be addressed without stipulating that Bitcoin is going to rewrite all of commerce and perhaps even all of regulation. Virtually nobody in the real world is willing to stipulate that.

If Bitcoin is going to work out in the long run, it will need arguments that work even if the IRS retains its ability to enforce tax laws and the DOJ retains its ability to regulate casinos.

Re: What's the use for Bitcoin?

#103
post #86
post #6

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…

So what would you place in the "legal/useful" quadrant in the author's post? Maybe I'm just lacking imagination but it seems that bitcoin's uses are 90% speculation and 10% illegal. What's the killer app that's actually going to make it a useful currency rather than an asset resembling a dutch tulip?

-> Inheritance (transactions that unlock by date)

-> flavored money (only spendable in certain ways)

-> contingent funds (if home_inspector_signs_off then pay electrical_contractor)

-> trustless escrow

-> complex securities (if dow is down but nasdaq is up pay 10% of difference)

Re: What's the use for Bitcoin?

#104

Earlier quoted context omitted.

> 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…

You realize that while your criticism of Bitcoin is factually accurate, your criticism could apply to just about any fiat currency. Dollars, Euros, Yen, aren't backed by anything other than the belief that it is money. However, I do acknowledge that states invest a lot of resources into indoctrination, so the belief in fiat currency might be stronger than the belief in cryptocurrency.

Aren't dollars are backed by the American economy and military? Unless you are speaking in a "Our reality is only our perception" type of way, at which point I'm not sure I buy the argument.

However, I do acknowledge that states invest a lot of resources into indoctrination, so the belief in fiat currency might be stronger than the belief in cryptocurrency.

I'm not sure how you think this will help anyone take you seriously?

Re: What's the use for Bitcoin?

#105
post #43

Earlier quoted context omitted.

There are things that the third world already uses for this purpose, such as M-Pesa. Money through SMS is already in wide use, for millions, right now. How can I send someone bitcoin through text messaging? http://en.wikipedia.org/wiki/M-Pesa

I wasn't aware of M-Pesa. Bitcoin transaction fees are still lower though. Coinbase and other companies allow you to send bitcoins via SMS: https://www.coinbase.com/sms_service

Transaction costs on the order of $10 per transaction is not exactly cheap.

Re: What's the use for Bitcoin?

#106
post #90

Earlier quoted context omitted.

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.

You describe the Western Union of bitcoin. The game changer will be the Nasdaq of bitcoin. The frictionless issuance of stocks bonds and dividends will change everything. Operating agreements will be codified in software and organizations can operate entirely transparently with a degree of accountability never before seen. Why would this be cool? Communities can come together and finance join ventures that were previ…

I think that you could be right about this particular vision of Bitcoin as a financial platform.

It's my belief that the future of Bitcoin will be analogous to something like Linux; a great deal of financial infrastructure will rely on blockchain technology, but Bitcoin itself will have little visibility or use to the average consumer outside of a small, dedicated circle of enthusiasts.

Re: What's the use for Bitcoin?

#107
post #6

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…

> 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. There aren't any now, but that's not because it's inherently impossible to have such a thing with BTC. It's just that the economy hasn't grown enough for them to exist…

There are already middlemen in the bitcoin business. The most notable ones today are the centralized exchanges and online wallets, and more are sure to come.

The important difference is that Bitcoin makes it much easier not to use a middlemen. You can't have a credit card without a middlemen, and the choice of middlemen is limited. Bitcoin abstracts your choice of middlemen away and the person you are buying from or paying to doesn't even notice whether you have chosen to use a middlemen or not.

My prediction is that using middlemen like banks (or should we call them central wallets?) will stay the norm, but they will have entirely new market pressures because not using them at all is suddenly a viable option.

Re: What's the use for Bitcoin?

#108
post #44

Earlier quoted context omitted.

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.

Even if that's true bringing internet or text messaging to the third world is easier than expanding bank coverage.

The mobile phone operators are well positioned to offer payment services, and they do:

http://en.wikipedia.org/wiki/M-Pesa

(I don't know how many others there are, that's one of the big ones)

Re: What's the use for Bitcoin?

#109
post #3

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…

So you've two sides to Bitcoin in reality - speculators praying other people adopt it as a currency and those using it for nefarious purposes - both of which are off-putting to any normal person who'd consider using Bitcoin for purchases.

Don't forget the anarchists.

Re: What's the use for Bitcoin?

#110
post #6

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…

> 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. There aren't any now, but that's not because it's inherently impossible to have such a thing with BTC. It's just that the economy hasn't grown enough for them to exist…

[...] transmit money across the world at practically zero cost.

Transaction costs on the order of $10 per transaction are only practically zero if you transfer $1000 or more. Not sure if this is such a common scenario for unbanked people in developing countries.

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