Bitcoin and Thoughts from Bill Gates • Hacker News Board

Re: Bitcoin and Thoughts from Bill Gates

#61

Post by VMG » Mon, Mar 17, 2014, 8:59 PM UTC

simias wrote: post #38

VMG wrote: post #31

Earlier quoted context omitted.

> 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…

> 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.

Bitcoin was designed to be a peer-to-peer payment system where the owner of the private key is the owner of the funds. Unfortunately, building secure hardware and software is very difficult, that's why many people choose to not keep their private key on their device but let a service deal with the security, which is often a bad idea. One secure hardware is cheaply available on the market[1] and two-factor-authentication becomes more widespread, this becomes less of an issue.

http://www.bitcointrezor.com/

Re: Bitcoin and Thoughts from Bill Gates

#62

Post by genwin » Mon, Mar 17, 2014, 9:17 PM UTC

hft_throwaway wrote: post #30

genwin wrote: 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.

1. You could do the same thing with cash or gold in many domestic cases. Transferring a substantial amount of cash in/out of a BTC exchange is going to require AML paperwork and the blockchain/exchange has enough information for a regulator to back out where the money went. You might be able to trade locally for cash to avoid this, but for serious amounts of money that could get you robbed or arrested. 2. BTC can be…

1. Good points. I'm thinking in terms of giving, not trading, as in heirs. Currently leaving money for heirs is messy with probate and paperwork and taxes. There are solutions like living trusts and so forth but again that's paperwork and management. Not so much with bitcoin. It's like digital gold, and less like cash, which loses value even if demand remains constant.

2. Yep, bitcoin can be indirectly devalued by gov't. Or it could end up like beanie babies.

Re: Bitcoin and Thoughts from Bill Gates

#63

Post by genwin » Mon, Mar 17, 2014, 9:33 PM UTC

euank wrote: post #25

genwin wrote: 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.

You can transfer cash to someone else cost free, tax free, and paperwork free if you don't mind breaking the law. If you transfer money by other means (e.g. the bank, bonds, etc) there are perks that make up for the additional cost generally. If nothing else, simplicity. You really think it can't be devalued by the government? Its value changed when China implemented laws regulating it (and even when there was specul…

I get your point that it can be indirectly devalued. That should be true for any store of wealth imaginable.

A transfer of cash is a transfer of a continuously devaluing currency. If I bury a barrel of cash to give to my heirs it might be worth half in today's dollars by the time they dig it up. Not so likely with bitcoin, assuming demand for it remains the same or higher than now.

The gov't could ban bitcoin transactions but that's becoming more and more unlikely as Wall Street gets into bitcoin-related services.

> If you transfer money by other means (e.g. the bank, bonds, etc) there are perks that make up for the additional cost generally. If nothing else, simplicity.

Agreed. For heirs, for example, a living trust is probably the way to go, over bitcoin inheritance.

Re: Bitcoin and Thoughts from Bill Gates

#64

Post by mahyarm » Mon, Mar 17, 2014, 9:39 PM UTC

hft_throwaway wrote: post #53

mahyarm wrote: post #49

Earlier quoted context omitted.

The thing is, the average consumer DOES NOT have access to with 30bps currency exchange fees. They don't have the access you do as an HFT guy does. For retail currency exchange and international transfers, especially for international remittances, the fees, paperwork, delays and bullshit are very high. To do an international wire transfer from the US to Canada for example, costs $25-$50 and has a %3 currency exchange…

The average consumer can do far better than 30 bps on currency trades, even on something like an Interactive Brokers account. Retail guys probably see tighter prices than HFTs do, to be honest, since FX is an OTC market and generally speaking, broker-dealers will give tighter pricing to uninformed traders than informed speculators. Anyway, let's say we're at a dollar amount where fees and rates really add up to somet…

I'm talking about the average person who wont get an IB account with it's reams of paperwork, professionals only attitude, and $10+/month minimum fees to maybe do a bunch of currency exchange for a one time or occasional thing. Also using IB as an actual currency exchanger where I get cash from US account A to CAD account B is actually pretty hard to do, they charge fees to do it, and there are long delays in the process. They basically only want you to use their FX platform to try to make money exchanging currencies, but once you want to cash out, you have to convert everything back to you home currency and take it back as a domestic transfer.

I've researched this extensively, since I had to pay my Canadian student loan while working in the US. The easiest and cheapest way to do it ended up being a schwab debit card with it's %0 currency exchange fee and ATM refunds. A close second would be BTC. Then it's Paypal, then it's the retail bank (think a chase checking account) international wire transfer service with $50 fees. Only schwab and & BTC would be relatively instant.

The actual currency exchange is also not transparent at all whenever I use any of these services except Paypal and BTC. I charge $XXX CAD, and some time later I'll see a charge for $XXX USD on my bank statement. I have a large time-span where they could of transferred at any time. I have no idea if they did profit maximizing shenanigans like BoA arranged withdrawals and deposits to maximize overdraft fees. I just know it's about %1-2 off what I saw as the mid market price on my phone when I did the transaction even with no 'currency exchange fee'.

When going from Canada to USA is even worse, since there is no such thing as a zero currency exchange fee card or account like you can get in the USA.

The amount of risk I would be taking is about 1-10 minutes with Bitcoin, and 'regulated bank' isn't much solace when things like Cyprus, Argentina and others happen. Then there is the domestic transfer out time, which can be fairly quick or up to a day or two. But when your at that stage, all of the currency exchange risk is gone.

The uneven international exchange rates are a double edge sword that will go away as the market gets bigger. The sell/buy spread between kraken and bitstamp for example is less compared to cavirtex.

In practice sending money from US to Canada with BTC is about as much work as using paypal. You just have to compare the two before you do the transfer. Sometimes it really in your favor to do BTC, sometimes it's better to do paypal.

Re: Bitcoin and Thoughts from Bill Gates

#65

Post by genwin » Mon, Mar 17, 2014, 9:49 PM UTC

simias wrote: post #27

genwin wrote: 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.

If we had a strong democracy I'd support your viewpoint here. But in our 2-party oligopoly gov't, the general voters' interests are typically secondary to the wealthy's. Bitcoin helps even the score.

Re: Bitcoin and Thoughts from Bill Gates

#66

Post by dllthomas » Mon, Mar 17, 2014, 9:53 PM UTC

genwin wrote: post #65

simias wrote: 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. If we had a strong democracy I'd support your viewpoint here. But in our 2-party oligopoly gov't, the general voters' interests are typically secondary to the wealthy's. Bitcoin helps even the score.

Tax evasion helps the wealthy a whole heck of a lot more than it helps the impoverished, so I'm not sure it helps to even the score on that count. Avoiding regulation can go either way - reducing barriers to entry by circumventing regulatory capture is a plus (though the wealthy will be in a better position to enter), reducing the pricing in of externalities is a minus (and the wealthy will be best able to exploit this).

Re: Bitcoin and Thoughts from Bill Gates

#67

Post by dllthomas » Mon, Mar 17, 2014, 9:55 PM UTC

simias wrote: post #38

VMG wrote: post #31

Earlier quoted context omitted.

> 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…

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

I get what you're saying, but presumably the fact that you hold an opinion indicates that you think it's the correct one.

Re: Bitcoin and Thoughts from Bill Gates

#68

Post by gnopgnip » Mon, Mar 17, 2014, 9:58 PM UTC

ewoodrich wrote: post #15

hft_throwaway wrote: post #11

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…

I've thought that Bitcoin (or more likely, a future crypto currency) might be better served as a transaction backbone for payment processors, banks, and the like. It could still be used for transactions between two individuals, but the bulk of transactions would be for routine inter-bank processing. This would have an effect of stabilizing the exchange rate, and could replace Fedwire/ACH for a large portion of transa…

Bitcoin works great as a system where you cannot trust anyone, with a proportional resource cost. In a closed system like that the extra cost would not outweigh the benefits.

Re: Bitcoin and Thoughts from Bill Gates

#69

Post by gnaritas » Mon, Mar 17, 2014, 11:28 PM UTC

dcc1 wrote: post #51

ewoodrich wrote: post #19

Earlier quoted context omitted.

> instantly calculate taxes due on income Uh, sign me up? The political complications of tax reform aside, return free filing would save millions of hours required for tax preparation, and it is estimated that between 8 and 60 million taxpayers would not need to file a return at all. And for the rest it would streamlined. Of course, the IRS already knows 90% of your income information, without Bitcoin, because of 109…

Which is how state controlled bitcoin like currencies will be pushed onto people, claiming it would save time/money etc, be more safe and secure etc. Tho' I highly doubt bureaucrats in IRS or similar would rollover so quickly and put themselves out of a job! Giving the state (or 3rd parties) even more control over currency and every day use that could be gained by a state run bitcoin like currency is very scary propo…

Given the choice between Govcoin and Bitcoin, I'd imagine most people will choose Bitcoin. I can't see the state launching a coin successfully. Lack of central authority is one of the killer features of crypto.

Re: Bitcoin and Thoughts from Bill Gates

#70

Post by Retric » Mon, Mar 17, 2014, 11:58 PM UTC

dllthomas wrote: post #60

Retric wrote: post #59

Earlier quoted context omitted.

Ahh, this is the important point USD start as digital currency. When the fed 'makes money' they are not talking about physical objects. (There are other views of the money supply that include IOU's as money but that's something of a side issue and can also apply to bit-coins or stocks when someone shorts it.) More importantly the physical dollars only go into circulation after removing a digital dollar that already e…

None of that changes the fact that there is substantially more need to ship around physical stores of value with USD than with BTC. It's not just banks, it's every merchant accepting cash.

The inability for cryptocurrencies to do a transaction without an internet connection is a bug not a feature. Still, plenty of people go years without touching physical cash which makes up around 7% of the actual cash in the US. So it's not like Amazon.com or IBM have to use forklifts to move pallets of cash around. Better yet they can write a check for 100 million and the only transaction fee is the wait until the check clears.

PS: Sweden is down to 3% but we have a much larger underground economy which thrives on cash. Even more interesting MintChip is an example of a government backed anonymous digital currency system which supports USD. http://en.wikipedia.org/wiki/MintChip Which suggests cryptocurrencies may not actually make it.