Live data from Hacker News

Bitcoin and Thoughts from Bill Gates

benjamingilbert.net

31–40 of 73 posts

Re: Bitcoin and Thoughts from Bill Gates

#31
post #27
post #16

Earlier quoted context omitted.

Two benefits that makes it all worthwhile: 1) you can transfer it to someone else (e.g. an heir) cost free, tax free, paperwork free, without the gov't even knowing you did it. Illegal, but you can do it and probably get away with it. 2) It can't be devalued by gov't action.

Both of those points can be seen as good arguments against bitcoin by many. Myself for instance, I don't consider facilitating tax evasion and impossibility to regulate by democratically elected governments a point in favour of bitcoin. That being said to get back on the technical merits of bitcoin, I agree with the OP that I can't imagine every individual handling their own bitcoin wallet and risk losing everything…

> Myself for instance, I don't consider facilitating tax evasion and impossibility to regulate by democratically elected governments a point in favour of bitcoin.

That makes Bitcoin immoral from your perspective, without saying anything about the feasibility.

You even restrict the morality argument yourself by saying it is good that a democratically elected government should have the ability to control financial transactions, which I completely disagree with, but even you will admit that there are a lot of unethical governments out there that hurt their population by controlling financial transactions and inflating the money supply.

Re: Bitcoin and Thoughts from Bill Gates

#32
post #21

Earlier quoted context omitted.

>more efficient way to transfer money In addition to your stated issues (which actually are probably fixable), there's the computational power requirement. That cannot be fixed. Bitcoin requires thousands of times (or more) more computational power to do a single transaction than any centralized currency system I can think of. I remember before bitcoin people would say "Oh, I have a couple spare computers... I just t…

"Bitcoin requires thousands of times (or more) more computational power to do a single transaction than any centralized currency system I can think of." Is that really the case? I'm quite sympathetic to the view that it might be, either presently or in the long run (an arms race where attackers and defenders are on the same footing can't get cheaper due to improved technology), but there are expenses in the current s…

there are expenses in the current system that bitcoin avoids

Which expenses would that be that are genuinely avoided while maintaining feature parity, rather than merely avoiding the feature that is bought by those expenses in the traditional system?

For example: Of course not having to worry about chargebacks and related fraud makes Bitcoin potentially cheaper than the existing credit card system. On the other hand, fraud protection is a useful feature, and adding it on top of Bitcoin removes any cost advantage that Bitcoin might have started out with.

This example provides a template that, as far as I can see, applies to every so-called cost saving aspect of Bitcoin (except possibly the fact that Bitcoin might make the whole banking system more competitive; that would undoubtedly be a good thing).

Re: Bitcoin and Thoughts from Bill Gates

#33
post #22

Benjamin, you're conflating bitcoin the protocol with bitcoin the 'currency'. This is an all too common mistake, so please don't feel too too bad about it. Bitcoin protocol does have some interesting things to offer us and I'm sure it will be built upon in novel ways. Bitcoin 'currency' on the other hand is a non-starter and as time goes on we will see it discarded. I hope more people would concentrate on the protoco…

You can't use the Bitcoin protocol in any meaningful way without using the Bitcoin currency.

Alternative crypto-currencies are less secure because they have less dedicated mining power and less developer support.

Re: Bitcoin and Thoughts from Bill Gates

#34

I had more optimism for Bitcoin before I saw people so aggressively evangelize it. I think it has great potential as a digital currency but some people are making into what's almost a totem.

Evangelizing was basically the only path for Bitcoin-the-currency to become valuable, so that's a bit of an odd complaint ;-)

Re: Bitcoin and Thoughts from Bill Gates

#35
The absurdity of this kind of thought is just profound. Thinking like this may be useful as a means of encouraging hope when all hope is lost, but Bitcoin is nowhere near there yet. Most of all this kind of talk smacks of deep desperation - "why won't people love me?"

I understand fully why one might feel so desperate. Bitcoin may have the potential to be truly revolutionary. Bitcoin solves the problem of orchestrating an international currency in a manner that limits the implementation details to the design, not banking/payment industry/political types who historically - for one reason or another - end up building in significant rigidities to the system.

It doesn't take a PhD in Economics to see the potential benefits of eradicating PayPal and consumer banks (although it may take one to see the potential pitfalls). More than this though, Bitcoin opens the door to truly free capital flow. It is possible to work in the Western world for a month or two and move, say, far East, and live like a king on the savings for a year or more. Why can't we just buy the stuff over there cheaply and consume it at home? One major reason is the rigidities in capital flow - it is hard, risky business in the current system. As a large company in a Bitcoin world you don't have to worry about a great class of risks of international trade, dumping money into the Cambodian economy is no longer a question of FX risk and "can I get it back out?"

This is a great step forward on the way to homogenising international capital stores i.e. ceteris paribus, rich people buy where things are cheapest, like in Cambodia, thereby flowing capital to, and driving up prices in, Cambodia. Cambodians get richer and the West gets poorer. Bitcoin has the vague potential to be the great equalizer.

We have seen some evidence of this at work in the EU with the Euro, if you look past the troubling dynamics of transition. Imagine how very different the US would be if every state had a different currency and payment processing rules, the diversity in income would be profound.

An educated economist will see a great many problems with this utopian vision, but will likely agree the aim is noble and that the basis - Bitcoin - is the closest thing we have so far to a workable solution.

Bitcoin may be as revolutionary as the fanboys want it to be, even if they don't understand why. My personal thought is that Bitcoin will soon be seen as the thing that started it all, but the solution won't be Bitcoin itself. There are too many problems - no matter how many times you read that a fixed supply currency is the greatest thing since sliced bread, it really isn't. It's also woefully easy to steal and the mining/verification mechanism is far too resource intensive and encouraging of looney speculation making its value at any point in time completely impossible to reason about.

If you love BTC today, don't spout bullshit strings of meaningless words in some grandiose display of being ahead of the times. Make it stronger and better because if you don't history will judge this whole thing very severely in 10 years time, when it really is just a way of buying drugs and hitmen.

Re: Bitcoin and Thoughts from Bill Gates

#36
post #21

I think this is a lousy defense of Bitcoin. I cringe whenever I read "oh it's new technology of course people will be scared!" or worse yet, "you must be jealous because you didn't get in on the ground floor." I think it's a really cool technology but the economics don't make a lot of sense. There are a few major issues I see: -What problem does it solve? Many claim that it's a more efficient way to transfer money, b…

>more efficient way to transfer money In addition to your stated issues (which actually are probably fixable), there's the computational power requirement. That cannot be fixed. Bitcoin requires thousands of times (or more) more computational power to do a single transaction than any centralized currency system I can think of. I remember before bitcoin people would say "Oh, I have a couple spare computers... I just t…

> That cannot be fixed. Bitcoin requires thousands of times (or more) more computational power to do a single transaction than any centralized currency system I can think of.

Bitcoin's goal is not to allow financial transactions, it's goal is to allow financial transactions without having to trust a third party.

This is impossible in a centralized system, this is why Bitcoin is the most efficient system of making secure digital transactions without relying on a trusted third party.

Re: Bitcoin and Thoughts from Bill Gates

#37
post #22

Benjamin, you're conflating bitcoin the protocol with bitcoin the 'currency'. This is an all too common mistake, so please don't feel too too bad about it. Bitcoin protocol does have some interesting things to offer us and I'm sure it will be built upon in novel ways. Bitcoin 'currency' on the other hand is a non-starter and as time goes on we will see it discarded. I hope more people would concentrate on the protoco…

The protocol and the currency are actually inseparable: http://timothyblee.com/2014/03/01/heres-why-bitcoin-the-netw...

Re: Bitcoin and Thoughts from Bill Gates

#38
post #31
post #27

Earlier quoted context omitted.

Both of those points can be seen as good arguments against bitcoin by many. Myself for instance, I don't consider facilitating tax evasion and impossibility to regulate by democratically elected governments a point in favour of bitcoin. That being said to get back on the technical merits of bitcoin, I agree with the OP that I can't imagine every individual handling their own bitcoin wallet and risk losing everything…

> Myself for instance, I don't consider facilitating tax evasion and impossibility to regulate by democratically elected governments a point in favour of bitcoin. That makes Bitcoin immoral from your perspective, without saying anything about the feasibility. You even restrict the morality argument yourself by saying it is good that a democratically elected government should have the ability to control financial tran…

I never said my view was the correct one, I just said I had a different opinion on the matter.

The parent is the one who said that it made it "all worthwhile". That sounded like a general truth to me, I felt the need to point out that it was still up for debate.

And my 2nd point was about the feasibility, I still have to hear from the bitcoin crowd what's the solution for day-to-day use of the currency that does not involve a bank-but-we-don't-call-it-a-bank-seriously-it's-not-a-bank.

Re: Bitcoin and Thoughts from Bill Gates

#39
post #23

I think this is a lousy defense of Bitcoin. I cringe whenever I read "oh it's new technology of course people will be scared!" or worse yet, "you must be jealous because you didn't get in on the ground floor." I think it's a really cool technology but the economics don't make a lot of sense. There are a few major issues I see: -What problem does it solve? Many claim that it's a more efficient way to transfer money, b…

Thanks for writing this. I agree with everything you said. I'd also add the concern of Bitcoin lacking an inflationary mechanism. I can't see it ever becoming a currency without that. If it's lucky, it may be a transactionary vehicle before the next technology displaces it. But, like you pointed out, it doesn't have much of a utility for that purpose anyway - taking transaction fees, security and usability into accou…

I'm not an economist or an expert on monetary policy, but I don't think a currency necessarily needs to be inflationary. Humans have used currencies such as gold which has a relatively fixed number of units in the past, which may have been less flexible but still worked. A currency does need to have some broad base of customary use and pricing, whether that be through social agreement or government fiat. People need JPY because their suppliers need JPY to pay their employees who have contracts in JPY or who need it to pay taxes to the government. They won't take any other currency outright, and if they do, they will peg their prices such that they'll be able to meet their obligations in JPY. This drives demand for the specific currency which helps set its value in the market.

For Silk Road type uses, people need a cryptocurrency or other pseudonymous way to transfer value, but do not need BTC specifically. Any sufficiently liquid crypto currency would work as a short-term transient store of value. I think that is an interesting use case and something neat about these protocols, but it doesn't explain why BTC is worth more than LTC, for example.

Re: Bitcoin and Thoughts from Bill Gates

#40

Earlier quoted context omitted.

>What can I do with bitcoin that I can't with paypal or even a bank account (many let you instantly transfer money these days for no/low fees to pay friends, landlords, etc.)? With bitcoin, you don't have to have a third party such as Paypal or your bank to transfer money over the internet. You don't have to trust a third party. It's very close to a face-to-face cash transfer, albeit with possibility of being traced…

but if you want to transfer coins you have to have them first. how easy is it for the average person to get bitcoins? not very. with coinbase you have to link a bank account. so they essentially have a blank check from you. if you trust them, great. if not... you can wire money (bank) to bitstamp but they also want scans of verifying documents like a passport or drivers license. is the average person off the street g…

It's safer to buy Bitcoin on coinbase and use those to make online payments than buying online by submitting your credit card information.
Post reply on HN