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What's the use for Bitcoin?

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Re: What's the use for Bitcoin?

#181

Post by exelius »

CyberDildonics wrote: post #157
exelius wrote: post #149

Earlier quoted context omitted.

I don't see how Bitcoin enables any of this - you use the term "frictionless" but the truth is BTC is simply low friction. There is already very little friction in the transaction of stocks, bonds and dividends - HFT platforms process trillions of transactions per day with much less friction than BTC (the current iteration of the blockchain will never scale to that volume). Operating agreements are already codified i…

Very low friction? Can you buy a stock in the next 10 minutes and get a dividend payout daily? You can't even buy middle man claim to a stock without signing up for an account over multiple days. To fund it? 4 days for checks to clear. To deposit your dividends... This doesn't even go in to the implications of stocks not being able to be sold in a fractional reserve style, taking out all the middle men etc. The finan…

Actually, you already get dividend payments on a continual basis. The future expected dividend payout of a stock is built in to the price of the stock on a continuous basis. Sure, you have to sign up for a brokerage account, but do you think the SEC is really going to let people buy and trade stock anonymously? You're going to have to sign up for some sort of financially verified account even if Bitcoin is powering the transaction system. There will be money laundering laws that will require an institution to verify your identity and credit history (likely by signing your transaction, and by SEC/treasury rules that stock transactions are only legally binding if signed by a licensed identity verification service). The banks and government will never give up the control they have today, and there are ways of introducing such control into a blockchain-style system.

The parts of the financial services industry that can be automated are already automated. Financial services drives the bleeding edge of the technology industry - online banking has been a thing even before the Internet (you used to get a program on floppy from your bank and dial in to their systems through a modem). BTC (or rather, the blockchain) does have the capability to reduce the cost of this automation, but it's already highly automated.

That 8% of GDP in financial services? It's all salesmanship. In order to give someone a loan, you have to be able to sell that loan to an investor. The lower the rate you can convince your investors to take, the more margin you get to keep. Why does Goldman Sachs charge more to issue an IPO than other investment banks? Is it because they're better at filing SEC paperwork? No, it's because they can sell the IPO better by convincing investors of the growth potential of the company (the majority of IPOs are funded through large direct sales to institutional investors). I never said it was fair, but I don't know that you can ever get rid of it entirely either (the US financial services industry also serves most of the rest of the world, which is why it's so much larger than in other countries).

But bottom line, most people are not educated enough in finance to handle this stuff themselves without getting completely ripped off. That fact alone will support a very large, regulated financial services industry. That also precludes the utopian vision of many Bitcoin devotees - unless Grandma Nelly who works as a greeter at Wal-Mart can understand finance, you're always going to have intermediaries. Because those intermediaries aren't to be trusted, they will need to be regulated by the government. It doesn't matter what the transaction system is, people need to be able to trust the economy without knowing a whole lot about how it works.

Re: What's the use for Bitcoin?

#182

Post by ericb »

jbooth wrote: post #113
ericb wrote: post #103

Earlier quoted context omitted.

-> 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.

I made no prediction about it usurping the dollar.

I'm saying bitcoin can do things money cannot. I listed some use cases that demonstrate the kinds of things it is suited for. When the PC first came out, the life-changing uses seemed theoretical and vague, and for about the first 5 years it was mainly a more expensive substitute for a typewriter.

Uber is marginally better than cabs, but that's more than enough to cause disruption.

edit: You know what, I didn't argue about it usurping anything, but I would put this out there as a point in that direction. There are enough use-cases like what I list to get bitcoin to a critical mass of fungibility. Products supporting new valuable use cases don't usually disappear. So if bitcoin supports these use-cases, it is entirely possible that they will propel it to a scale where peer-to-peer transactions make sense because it is prevalent enough. At that point, it could become the lingua-franca of currency.

Re: What's the use for Bitcoin?

#183

Post by exelius »

smokeyj wrote: post #154
exelius wrote: post #149

Earlier quoted context omitted.

I don't see how Bitcoin enables any of this - you use the term "frictionless" but the truth is BTC is simply low friction. There is already very little friction in the transaction of stocks, bonds and dividends - HFT platforms process trillions of transactions per day with much less friction than BTC (the current iteration of the blockchain will never scale to that volume). Operating agreements are already codified i…

Yes I mean low friction. I think we're largely talking about different markets, see my comment: https://news.ycombinator.com/item?id=9313044

I just don't think digitized financial services "scale down" to that level, even with BTC. Some transactions just aren't worth enough to bother setting up the safeguards and equity splits (which, again, have to be negotiated and implemented somehow). Someone will feel screwed, and eventually legislation will arise that introduces the friction back into the transaction.

I'm also not convinced that the low-friction transaction model is considered a good thing globally. The US and EU are the exception with respect to having low-friction transactions: in most of the rest of the world, buyers get angry if they can't haggle on price, even over the cheapest items. It's a cultural thing. Compared to the friction of negotiating price, cash or credit cards aren't that bad.

Re: What's the use for Bitcoin?

#184

Post by dragontamer »

smokeyj wrote: post #144
random28345 wrote: post #133

Earlier quoted context omitted.

> The frictionless issuance of stocks bonds and dividends will change everything. Right now, I can issue all the stock I want for a minimal filing fee. In spite of this, companies regularly pay investment banks billions of dollars to file an IPO. If you think that Bitcoin is somehow going to change that, I have a blockchain to sell you.

My comment wasn't about billion dollar IPOs. I'm talking about small communities that would like to purchase something like a solar panel. Maybe they want to sell excess power and return the profits as dividends. My point is, small scale joint ventures require prohibitively expensive overhead (even without the threat of corrupt government officials). Bitcoin stands a real chance at tackling some of those problems.

> I'm talking about small communities that would like to purchase something like a solar panel.

How the hell does Bitcoin help any of that?

If you really want to do that, you start an LLC, issue stock to your members (possibly requiring dues or whatever). That will cost you $100 to file for an organization in your state, maybe $50 for the proper LegalZoom papers.

Then you have to actually _run_ said organization. Even paying some dude minimum wage for the effort is going to grossly trump the costs of creating said organizations.

The LLC exists so that when the "company" screws over one of its members and you start getting sued, the "company" can go bankrupt without its members losing everything.

-------------

If you're willing to take on the risk yourself, go all sole proprietorship. Take the responsibility for the solar panel yourself, convince your neighbors to chip in. Doing that is perfectly legal (but stupid).

Because as soon as one of your neighbors / shareholders gets pissed off at you, they can sue you personally.

Companies exist as a protection mechanism. Instead of _you_ getting sued for damages, the company gets sued. You are protected from legal issues.

But none of this has anything to do with Bitcoin. How the heck can Bitcoin make any of this easier? Companies are nothing more than a mechanism to prevent their owners from getting sued by the public at large.

Re: What's the use for Bitcoin?

#185

Post by chisleu »

Igglyboo wrote: post #87
chisleu wrote: post #39

Earlier quoted context omitted.

You assume that We, the People, have a say in current US economic policy. We don't. If Ee, the People, are on bitcoin, we have already made the decision to use a gold-like limited resource as a currency that will absolutely become deflationary at some point. You have no agency in government; no matter how great your use of punctuation.

We, the People, can elect representatives that do have a say in our economic policy.

If you think your vote means anything to the person you elect, you are part of the problem.

Re: What's the use for Bitcoin?

#186

Post by chisleu »

shawnb576 wrote: post #41
chisleu wrote: post #17

Bitcoin has many benefits for the average man, provided it is in wide use. Currently it isn't, so the advantages are not yet substantive. For one thing, the government doesn't control the inflation of bitcoin like it does with dollars. The fed aims for ~2.5-3% "inflation" every year, however this is inflation beyond the massive deflation that occurs year over year due to technology and efficiency increases... The sup…

By your argument the cost of food/goods are going up because we're becoming less efficient at producing it. This is not how inflation works, and that's not how deflation works. Maybe go bone up on your basic economics?

No... That isn't my argument at all. I guess you should go back and read my argument again because you clearly can't understand it in a single go.

The reason the prices go up are because the fed absorbs all of the technology-powered reductions in price in order to maintain an artificial level of inflation.

You are a baboon.

Re: What's the use for Bitcoin?

#187

Post by [deleted] »

paulsutter wrote: post #114
olalonde wrote: post #100

Earlier quoted context omitted.

> 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 on…

[deleted]

Re: What's the use for Bitcoin?

#188

Post by stevedekorte »

Monetary gold is just a physical implementation of a secure ledger with very limited inflation, and at a $6T market cap, it's clear that such a ledger has value for more than just black and grey market uses.

Bitcoin is a digital version of a secure ledger (with long term zero monetary inflation) but solves gold's transport, secure storage, divisibility, verifiability, etc issues.

Re: What's the use for Bitcoin?

#189

Post by olalonde »

paulsutter wrote: post #114
olalonde wrote: post #100

Earlier quoted context omitted.

> 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 on…

> Shouldn't Bitcoin have given him magic immunity?

No, why do you think that'd be the case?

> All the people who transacted on Silk Road, do you think they should sleep well at night?

Probably not. But certainly not because the FBI will track them through the blockchain, that's just ridiculous. There's absolutely no way to prove someone owns Bitcoins unless you get access to their wallet.

Re: What's the use for Bitcoin?

#190

Post by AlexMuir »

mikeyouse wrote: post #162
AlexMuir wrote: post #11

I just wrote a post at lunch about this. Right now for most people Bitcoin is the only way to leave your wallet at home and pay for things with your mobile phone. http://alexmuir.com/bitcoins-practical-use

I can guarantee the following; 1. More people have Applepay than have a Bitcoin wallet 2. More stores and restaurants accept Applepay than Bitcoin 12.2M people had used Applepay at least once between launch and the end of February -- Some significant portion more than once. There were only 12.263M bitcoin transactions in the same time period -- many of which were basically dust / micro-transactions of a few pennies w…

Good points. It doesn't address the fact that Apple Pay is currently only usable in the US. And it will be forever limited to those with the latest iOS device and credit cards. My point is that Bitcoin provides more functionality than Apple Pay today for the 99.9% of the world who aren't holding an iPhone 6 in the US.
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