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Bitcoin is none of the things it was supposed to be

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Re: Bitcoin is none of the things it was supposed to be

#51

Post by mikeash »

pkulak wrote: post #18
pc2g4d wrote: post #14

The high transaction fees are forcing Bitcoin in this direction. If buying a hamburger cost you $30 in fees on top of the $6 burger, you'd stop using dollars for everyday purchases, too. Seems we're stuck in this situation so long as the block size remains where it is. That artificially reduces the supply of transactions, forcing the price up. No matter how many miners there are competing for those transaction fees,…

No one who owns BTC wants it used for transactions. They want it to be an investment and go up forever, so they'll never go with a fork that allows it. It's like home owners in a neighborhood locking out new construction so their own homes raise in value.

Seems like the miners have a strong incentive to keep the "supply" of transactions artificially limited too, since it results in sky-high transaction fees for them.

Re: Bitcoin is none of the things it was supposed to be

#52

Post by wereHamster »

owenversteeg wrote: post #32
vintageseltzer wrote: post #19

Earlier quoted context omitted.

The Lightning Network is meant to address this: https://lightning.network/

Lightning ultimately has to come into contact with Bitcoin at some point, unfortunately. Even if you just have one Bitcoin transaction a month, I'm paying $20/month at the current tx prices just to be able to use Bitcoin. $240/year. Does that sound anywhere near reasonable to you?

The goal is that there will be fewer BTC transactions once LN becomes widespread, especially if people or institutions open long-lived channels between each other (active for months, years, or even indefinitely). Then you'd only have to hit the BTC blockchain a few times a year, at most, and that's a level of transactions which the BTC blockchain can easily handle, even if the whole world population uses it for everyday trading.

However I also expect that fees will go down once this craze is over (in a few days hopefully). They have tripled in the past three days (see https://fork.lol/tx/fee).

Re: Bitcoin is none of the things it was supposed to be

#53

Post by r00fus »

pkulak wrote: post #18
pc2g4d wrote: post #14

The high transaction fees are forcing Bitcoin in this direction. If buying a hamburger cost you $30 in fees on top of the $6 burger, you'd stop using dollars for everyday purchases, too. Seems we're stuck in this situation so long as the block size remains where it is. That artificially reduces the supply of transactions, forcing the price up. No matter how many miners there are competing for those transaction fees,…

No one who owns BTC wants it used for transactions. They want it to be an investment and go up forever, so they'll never go with a fork that allows it. It's like home owners in a neighborhood locking out new construction so their own homes raise in value.

Those who want an appreciable asset own it, those who want transactions use it.

Re: Bitcoin is none of the things it was supposed to be

#54

Post by lend000 »

diego_moita wrote: post #49

The best criticism I've seen on Bitcoin is, by far, Paul Krugman's "Bitcoin is Evil" [1]. In essence: Bitcoin doesn't have "monetary policy" to regulate it's supply. That's why it is prone to speculative bubbles and very dangerous as money. [1] https://krugman.blogs.nytimes.com/2013/12/28/bitcoin-is-evil...

Painful to read. Paul Krugman is a laughing stock in the crypto-world, which he has been wrong about so confidently, so many times.

As an aside, the US had active monetary policy for about a century, and it has enjoyed plenty of bubbles and crashes. Some of those were worsened by monetary policy (e.g. easy money in the early 1920's swapped to deflationary monetary policy in 1929 as soon as the easy money bubble popped, low interest rates fueling real estate speculation in the early 2000's, etc.)

Re: Bitcoin is none of the things it was supposed to be

#55

Post by dawhizkid »

pkulak wrote: post #18
pc2g4d wrote: post #14

The high transaction fees are forcing Bitcoin in this direction. If buying a hamburger cost you $30 in fees on top of the $6 burger, you'd stop using dollars for everyday purchases, too. Seems we're stuck in this situation so long as the block size remains where it is. That artificially reduces the supply of transactions, forcing the price up. No matter how many miners there are competing for those transaction fees,…

No one who owns BTC wants it used for transactions. They want it to be an investment and go up forever, so they'll never go with a fork that allows it. It's like home owners in a neighborhood locking out new construction so their own homes raise in value.

Of course Bitcoin is the digital crypto analogy for SF Bay Area NIMBYism :)

Re: Bitcoin is none of the things it was supposed to be

#56

Post by oscilloscope »

ordinaryradical wrote: post #50
cryptodogemoon wrote: post #37

Earlier quoted context omitted.

Why bother attempting to patch on layers on top of BTC when it's already centralized with ASIC farms? Start fresh. Early adopters of BTC are trying to con new users into buying coins produced for minimal capital/computational work. The flaw in BTC is inherent to the malicious minting algorithm designed to harm new users. There's other cryptocurrencies who are far out pacing the BTC core team.

Which currencies do you see as addressing these problems in a technically proven way?

Vertcoin is the probably the most Bitcoin-like one that addresses the mining centralization issue.

Re: Bitcoin is none of the things it was supposed to be

#57

Post by AVTizzle »

lumberjack wrote: post #23

As we learn more about cryptocurrencies, more evolved altcoins will emerge, with much more sophisticated economics. As it is, none of the developers of cryptocurrencies really understand economics and the majority of them believe in heterodox economic ideas that are probably wrong. But currently people are just trying to get rich. At this point in time I'm more bullish about GNU Taler. It is not a cryptocurrency but…

Hey Lumberjack - I’m curious to learn more about the economics most folks in the space are ignoring.

Are there any particular economic theories or resources you would recommend as a starting point for someone interested in studying up?

Email in bio if you feel so inclined. Appreciate it!

Re: Bitcoin is none of the things it was supposed to be

#58

Post by mentos »

cryptodogemoon wrote: post #37
vintageseltzer wrote: post #19

Earlier quoted context omitted.

The Lightning Network is meant to address this: https://lightning.network/

Why bother attempting to patch on layers on top of BTC when it's already centralized with ASIC farms? Start fresh. Early adopters of BTC are trying to con new users into buying coins produced for minimal capital/computational work. The flaw in BTC is inherent to the malicious minting algorithm designed to harm new users. There's other cryptocurrencies who are far out pacing the BTC core team.

Ha because then that would devalue bitcoin and everyone's dream of selling to a greater fool would collapse!

Re: Bitcoin is none of the things it was supposed to be

#59

Post by oscilloscope »

acchow wrote: post #44
AlexandrB wrote: post #41

Bitcoin seems like just another medium of exchange. Almost all the properties of bitcoin - decentralization, anonymity, worldwide acceptance - apply equally well to gold bullion. The one additional property bitcoin had was convenience. But as transaction costs increase this is becoming less true. Given the above, why would anyone expect bitcoin to behave differently than physical gold in the real world? The world of…

You can't send $50M of gold halfway around the world for $3.

Right now, you probably can't send $50M of Bitcoin around for the world for $3 either.

Re: Bitcoin is none of the things it was supposed to be

#60

Post by wott »

coryl wrote: post #3

The author seems to expect that the changes created by cryptocurrency should be visible immediately. It is a lack of patience, and lack of understanding that changing deeply rooted systems and behaviors takes time. People have never managed software where if you lost your "password", your money was gone forever. They never had to keep a 12-24 word recovery phrase. They've never sent money to addresses that look like…

> People have never managed software where if you lost your "password", your money was gone forever. They never had to keep a 12-24 word recovery phrase. They've never sent money to addresses that look like hash strings. Their money value was never this volatile (in some countries anyway) and never this complicated to use (understanding and waiting for block confirmations, looking up transactions in the blockchain explorer).

Well yeah, nobody in his sane mind would have designed such an unpractical system. It took a bunch of out of touch, fresh out of school computer scientists to reach such nonsense.

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