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What's the use for Bitcoin?

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Re: What's the use for Bitcoin?

#111

Post by maxerickson »

aboutus wrote: 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…

There are no middlemen if you manage to airlift in a bitcoin economy. Short of that, you probably get your bitcoin from a middleman.

At a glance, M-Pesa looks a lot more popular among the under-banked than bitcoin.

Re: What's the use for Bitcoin?

#112

Post by abalone »

aboutus wrote: 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…

Actually M-Pesa has been enabling the unbanked to hold and transmit money by phone for many years now and is quite popular. It has a whole retail network and everything.

What Bitcoin primarily offers beyond that is bypassing rules and regulations around cross-border transfers. But that's consistent with the article's thesis.

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

Re: What's the use for Bitcoin?

#113

Post by jbooth »

ericb wrote: post #103
jbooth wrote: post #86

Earlier quoted context omitted.

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)

But we already have imperfect solutions for all of those, and together they make up a very minor % of all currency transactions.

Are you saying that being debatably marginally better at those corner-cases will propel it into usurping the dollar and euro? I'm having trouble reconciling these use-cases with world-changing rhetoric.

Re: What's the use for Bitcoin?

#114

Post by paulsutter »

olalonde wrote: post #100
paulsutter wrote: post #8

> Bitcoin is great for illegal goods/services > Tax evasion and escaping capital controls are also possible with Bitcoin Bitcoin is about as useful as lucky sunglasses for illegal transactions. Just ask Ross William Ulbricht. I don't engage in illegal transactions. But if I did, I wouldn't use a mechanism that leaves a permanent, publicly available record just waiting to be de-anonymized. > Bitcoin is powerful becaus…

> Just ask Ross William Ulbricht. Ross William Ulbricht wasn't caught because of Bitcoin. I read the FBI report and there was absolutely no mention of the blockchain if I recall correctly.

Shouldn't Bitcoin have given him magic immunity?

All the people who transacted on Silk Road, do you think they should sleep well at night? Or do they all nervously await the statute of limitations expiration?

You don't think the FBI has the blockchain loaded into Palantir where they can map all those transactions against all the other data they have? The more traces you leave behind the greater the chance for that one slip up that links it all together.

Maybe the seller slips up and orders a pizza from the wrong wallet. Now they have him, and using the post office scan data they got you. Add as much complexity as you like, there's a way to unravel it. And you can't go back and take it out of the blockchain.

Re: What's the use for Bitcoin?

#115

Post by [deleted] »

random28345 wrote: post #56
streptomycin wrote: post #7

The conclusion ("It’s incorrect to say Bitcoin doesn’t have a use case. It does. It’s just illegal in the US.") seems strange given that there is a big section of the article on semi-illegal things - basically things that are legal but traditional financial companies don't want to touch. The article says "mostly gambling, marijuana, and porn" but I'd also add politically controversial things, like when all the paymen…

> when all the payment processors decided they didn't want to handle donations to Wikileaks after the US government asked them to make that change. On the face of it, this seems like the one legal use of Bitcoin, to circumvent situations where the government uses influence to block certain economic activity through words (a request to payment processors) instead of the threat of force (new laws). However, the only re…

[deleted]

Re: What's the use for Bitcoin?

#116

Post by codexon »

cporios wrote: post #9
Mikeb85 wrote: post #2

There really is no use for it. Banks have made transactions dirt simple and convenient (especially those outside the US), as well as safe. The only real use for Bitcoin is for anonymous, difficult to trace transactions (ie. black markets), and speculation. With my regular bank account and credit card, I can buy products from China to NA to Europe and just about anywhere, can change my funds into a myriad of currencie…

> The problems Bitcoin claims to be trying to solve were already solved by the banks a while back. Bitcoin (according to its website) claims to provide instant P2P transactions and very low processing fees. International bank transactions take days or weeks and have very high fees. But even more importantly, bitcoins do not require a bank account. All it requires is internet or text messaging access. This is very imp…

I don't understand how people could say bitcoin is instant. It makes me think they've never actually tried buying anything with bitcoin.

All the bitcoin stores/processors I have used require 3 or more "confirmations" with each confirmation taking an average of 8 minutes which means each purchase takes at least 24 minutes and sometimes even several hours.

When I tried to sell things with bitcoin, customers told me it was a hassle when a Paypal or credit card transaction completes in seconds. This is the main unfixable problem with bitcoin and that is why I believe it will not take off.

Re: What's the use for Bitcoin?

#117

Post by dragontamer »

bdamm wrote: post #81
random28345 wrote: post #23

Earlier quoted context omitted.

> Micropayments. There is simply no other infrastructure that does this as well as Bitcoin does, because processing fees dominate. You mean aside from currency conversion fees, the transaction fees ( https://blockchain.info/charts/transaction-fees ) and the massive $6,000 to $25,000 block reward? If you do the math, bitcoin is easily the most expensive currency to transact in, and least economically efficient currenc…

Transaction fees are typically less than the equivalent of a penny. If I want to give 100 people each a nickel, how much would that cost in Bitcoin, and how much would that cost in USD via Visa? Hint: You can't even do it over Visa, because the receiver is liable for the transaction fees, which have minimums much higher than a nickel.

Which is why the article mentions Dwolla as the micropayment structure.

Answer to your question btw, is $0 if you give less than $10 to everyone. You can easily send $5 to 5000 different people in Dwolla, since it takes advantage of the ACH system already in place in the US.

I think he has a very strong point about micropayments. Afterall, DOGE outcompeted BTC due to those transaction fees and carved out a niche within the alt-coins explicitly because BTC's fees are a bit high IIRC.

Re: What's the use for Bitcoin?

#118

Post by JTF195 »

random28345 wrote: post #56
streptomycin wrote: post #7

The conclusion ("It’s incorrect to say Bitcoin doesn’t have a use case. It does. It’s just illegal in the US.") seems strange given that there is a big section of the article on semi-illegal things - basically things that are legal but traditional financial companies don't want to touch. The article says "mostly gambling, marijuana, and porn" but I'd also add politically controversial things, like when all the paymen…

> when all the payment processors decided they didn't want to handle donations to Wikileaks after the US government asked them to make that change. On the face of it, this seems like the one legal use of Bitcoin, to circumvent situations where the government uses influence to block certain economic activity through words (a request to payment processors) instead of the threat of force (new laws). However, the only re…

If I want to, I can buy my next motherboard from Newegg using Bitcoin.

There are TONS of websites that accept Bitcoin, and a growing number of brick and mortar stores accept it also.

You assert that black markets are the only factor that drive value in Cryptocurrencies, how about you back up that assertion with some evidence.

Re: What's the use for Bitcoin?

#119

Post by pbreit »

aboutus wrote: 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…

I'm still on the fence about Bitcoin but this article describes our experience at early PayPal almost exactly. I suspect the most valuable uses of Bitcoin will be more blockchain oriented than financial.

Re: What's the use for Bitcoin?

#120

Post by dragontamer »

bdamm wrote: post #4

Useful but not on his list: * Bitcoin is excellent as a charity funding mechanism. Often I may wish to give to a charity, but don't want to give out my credit card number. I give up my tax credit, but for small handouts that's quite alright. * Micropayments. There is simply no other infrastructure that does this as well as Bitcoin does, because processing fees dominate.

Those $0.00 fees from Dwolla are really harmful to microtransactions...
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