It's because it's not just comprised of tech people, who are excited about its theoretical underpinnings, but also by business savvy people, who know that it will hardly fly for numerous reasons (and if a similar technology ever catches up, it will have so many government imposed regulations as to be totally different), plus old jaded tech persons who know a marginal at best tech and/or snake oil when they see it.
Aside for people excited by the tech (and its potential applications to other fields), the core of bitcoin believes are either get-rich-quick types who buy into the pyramid scheme, tin-foil crackpots (similar to gold hoarders), and stick-it-to-the-man true believers (with a freeman-of-the-land [1] mentality) naive enough to believe it can trump regulation and disrupt "the system".
I'm sorry, but you're looking at Bitcoin from a narrow viewpoint. There are in fact people who actually need Bitcoin in their day-to-day.
My home country Tunisia for example has very strict currency controls in place, which means that it is impossible to purchase any goods from outside the country or even transfer money overseas.
The government now provides rechargeable card with a 1000 TND (~500 USD) limit that can be used for online purchases. However, these are only issued to software developers and entrepreneurs to allow them to subscribe to online services, such as hosting, domain names, etc.
Bitcoin provides a quick and easy way to circumvent that: convert your TND to BTC, and use that to purchase online goods or to transfer money outside the country.
I'm actually thinking of setting up a MVP to test out this idea, but I'm struggling to come up with a solution that is completely transparent for the end-user. In other words, I don't want the user to have to understand Bitcoin or buy/sell it manually. I'd prefer instead for the system to use BTC under the hood.
Another example I read about recently is Argentina. People are using Bitcoin there for daily transactions and for their savings due to high fluctuations in the local currency.
>I'm sorry, but you're looking at Bitcoin from a narrow viewpoint. There are in fact people who actually need Bitcoin in their day-to-day.
Well, perhaps, but
(a) these people are a very small amount compared to "first world" bitcoin champions
(b) they would be better off pushing for actual policy change regarding their problems, instead of using a technological workaround who (depending on the whims of those in power) can land them in jail/money loss at any time...
Actually, I'd argue that the potential for Bitcoin lies more in third world countries than economically developed ones. First world countries usually don't suffer from unstable currencies or financial controls, which is what makes the utility of Bitcoin seem quite limited.
Yes, your second point is true, but sometimes the country itself is struggling to stabilize its currency. Thankfully, that's not (yet) the case in Tunisia.
Actually, (b) is exactly the opposite. Instead of voting for certain economic policies and hoping "my guy wins" I can just use Bitcoin, which has the qualities I need, here and now: for instance, I can send money to anyone in the world without any of the KYC and AML bullshit and I don't need to wait and vote in just the right politician who promises(!) to easy the said regulations.
I can certifiably tell you that I AM better off because I started using bitcoin. And it's not because of the exchange rate, but because of the freedom to do what I please with my money.
No, but the potential is there, and it's already been done in other countries such as South Africa. The biggest hurdle I think is that Bitcoin is essentially unknown in Tunisia. I'm actually planning on building something but I don't have the entire system fleshed out.
But the overwhelming majority of bitcoin investment, marketing and ownership isn't coming from Tunisia. It's coming from the West (and China), where most people have no problems spending or obtaining currency (maybe China does).
Why are Westerners so eager to make money off of people's inability to move money around poor countries, and why is it supported?
One major reason why Bitcoin is used in the West is that it enables integrity and privacy when making online purchases, as opposed to bank-issued cards.
I've used BTC in an emergency situation, to transfer money when I would otherwise have needed to wait for several days for an international bank transfer (and then would also have hit my bank's foreign ATM withdrawal limit).
Your third paragraph is a veiled insult based on a notion that if applied consistently would deem the international banking system at least as immoral as Bitcoin.
Not hating on Bitcoin, but just to set the record straight - unless you're going through some extra hoops like mixers etc - the level of privacy you get with Bitcoin is less than what you get with a CC payment.
It's actually virtually unknown in Tunisia as far as I can tell. I'm hoping that with an easy-to-use service and some marketing and advertising, it can become a bigger thing.
As for why it's big in more developed countries, I guess it's because people are using it either as an investment device, or for purchasing goods anonymously.
I take your TND, and then I give you BTC which I've purchased. I will also buy your BTC, but I'll likely rely on BTC purchased from foreign exchanges. You then use that BTC for whatever. The problem is that it becomes difficult to bring in casual customers due to the overhead introduced by Bitcoin, as Bitcoin is virtually unknown in Tunisia.
A common issue in Tunisia especially is sending money to relatives in France. I want to give them the end-to-end experience in one place: you send me TND, I send your relative EUR. But everything I've thought of to accomplish that is just too complex.
So right now my idea is just to give users BTC in an online wallet and let them do whatever they want with it. That means I'll need to effectively educate users about the basics of Bitcoin at the very least.
> I take your TND, and then I give you BTC which I've purchased.
In that case you end up holding TND and need to purchase the bitcoin to give to your customers in another currency. You would have an easier result if you just directly exchanged TND to EUR without putting BTC in between. Likely that's about as legal as your solution. Just because at some point the value is hold in BTC doesn't mean currency controls cease to exist.
I don't see the value Bitcoin provides here at all except for the fact that the government agency that should enforce currency controls is likely not competent enough yet to spot what you are doing. I'd place a bet that as soon as you start advertising your transparent TND-EUR conversion scheme that they'll shut you down as fast as if you wouldn't use BTC.
I can't reply to Cyphons coment for some reason, but there seems to be a problem with setting up the trade he describes. If it's succesful, he will then be stuck with a large amount of TND, which he has no use for and, due to the currency controls, can't convert to a currency that is useful for him.
That is leaving out the point that both the operators and the clients are willfully circumventing the law, which most governments don't appreciate.
Actually I'm a Tunisian, so the TND will be useful in the long run as an investment. But that still prevents me from reinvesting it into the business i.e. buying more BTC.
One way is to simply buy BTC from local sellers who perhaps bring BTC from outside the country. They take a cut and I add a markup before selling it back.
But there's another advantage I have. I'm currently residing outside the country, and if I do setup the business it will be funded using outside money. Because the company is funded externally, I can actually transfer any revenue it generates outside of the country.
As for your last point, that is in fact my biggest concern. The government could easily close down the company and its bank accounts at its pleasure. To avoid this, I think the safest option is to go with a purely decentralized market that simply connects buyers with sellers, but that will make it much harder to take a cut.
Anyways, I'm still thinking about the whole thing, and as you noted, it's not that straightforward.
Bitcoin is for the underserved. It will grow to be exactly as large as this market is regulated to be. Thus far this market is sex, drugs,gambling and capital flight. It will fly, because government subsidizes it's use here.
i am homeless and can not use banks or paypal, bitcoin is only option for me to pay stuff on internet. For me personaly bitcoin is best currency. It is absolutely vital in my lifestyle, and if unbanked people of world(vast majority) would also be as tech savy as me it would be biggest currency.
I think there are literally hundreds of examples from the past century where huge swaths of the population lost all of their wealth due to political and economic turmoil. You are welcome to keep all of your funds in the hands of the central bankers if you believe in them, nobody will stop you. I will keep a portion of my money in my own hands in BTC where no corrupt politician or banker can get it.
Out of the hands of politicians and bankers and right into the hands of a script kiddie when the box that stores your wallet - be it locally or an exchange - gets hijacked and your wallet depleted. Or where nobody can get to it after you suffer catastrophic data-loss and you can't get to your wallet anymore.
If you want a hedge against a catastrophic collapse of the dollar (or whatever your local currency happens to be), there are innumerable other, better alternatives.
Besides, if there was such a collapse, who's to say that Bitcoin won't get dragged down with it? After all, more than likely you're using bitcoins to buy things that cost dollars.
If I suffered a catastrophic data loss large that caused me to lose my BTC, I'd still be more concerned about the rest of my valuable data that I presumably lost too.
Bitcoin is far from the only case where catastrophic data losses or leaks are very costly. It's something that's certainely worth thinking about carefully, but it's not a fatal flaw for the system's usability - if it were all digital data use cases would be fatally flawed.
I use a hardware wallet to store mine, analogy would be keeping your cash in a vault, yes you have to unlock it manually each time to get money out. Given the ease of use and recovery with a hardware wallet its the safest and most free store of value that I know of. Definitely a must have for amounts over a few hundred dollars. Its quite ingenious when you figure out how they work.
You are neglecting the class of users that is the one of the oldest. The people that use it for illegal means. Until something comes out that approaches the financial stability of bitcoin (yeah bitcoin isn't great, but other cryptocurrencies are worse) and is harder to trace than bitcoin, bitcoin will be what is used for illegal online transactions.
A few of us look at it for uses in other countries, where local currencies are unreliable, and corruption makes it desirable to hold large amounts of your income as "black money."
In areas of high corruption, a networked, global currency could be rather freeing.
1) I'm still bitter I threw all mine away. I had a few hundred in the early days and thought, "this isnt going anywhere"....
2) I'm one of HN's resident conspiracy theorists, for lack of a better term, and bitcoin can be seen as a threat to freedom because for all the awesome things it is, it is not anonymous. This may seem innocuous at first, but if you subscribe to the globalist conspiracy view, one of the primary tenants of "their plan" involves cashless, digital only currecy easily tied to your personhood. In essence, I fear the future will be more totalitarian and dystopian than people realize, and digital currencies like bt seem ripe for abuse and use in such a system.
3) Along the same lines as 2, I feel like once banks start getting into bitcoin heavily, despite its theoretical mechanisms to prevent it, the banks will find a way to corrupt and control the system. The community has already experienced the first attempts in the form of the huge first price inflation.
4) Another problem with bitcoin is that it requires good cybersecurity, which we all know is much more rare than anyone wants to admit. It's ripe for mass thefts. Once that wallet is gone, not much can be done.
Ok, thats most of it, now I have to say that I understand there are many "ifs" in what I am saying, but to me the threats are real. I still will use bitcoin for the time being anyway, and there are many good things about it and other *coins, but you didnt ask what I liked, you asked what I dont like.
On that note, blockchain technology independent of bitcoin I expect to be a huuge hit. Blockchain all the things!
Blockchain isn't about "effeciencies" anyway. It's about a verifiable record, and the key is that it's a decentralized verifiable record. I would appreciate further elaboration about this "hype".
I think the sector is full of bullshit and there are a lot of people looking for easy money because you can easily setup a gambling site without asking for regulatory based permissions.
But, again, the core innovation about cryptocurrencies/blockchain (I risk a lot of HN karma using the later word!) is strong and has long term implications beyond the current issues on PoW, miners, etc.
Because a lot of us understand the underlying tech, and how bullshit it is that a $100 cell phone has a higher TPS rate than the entire bitcoin network, which consumes more electricity than a small country (and all the CO2 emissions that go with it)
A $100 cellphone isn't a decentralized peer to peer network. You are comparing apples to nose-hairs. Bitcoin will scale in the same way the internet scaled... slowly and then suddenly.
For me the largest put off with Bitcoin is the community. They seem to be very intolerant of criticism, to the appearance of a cult or ideology.[1] The problem lies in that unlike most open source projects, a sizeable portion of the community stands to make huge profits, giving rise to a permanent conflict of interest. Time and time again, the financial interest of the early adopters continue to stifle actual development of the technology.[2]
That's exactly my problem with bitcoin as well. I'm just elaborating Hearn's points here; but as it turns out the incentive for miners (in order to pay their mining) is actually a deflationary good (so the value of their mined coins keeps increasing). Unfortunately miners are also required for the confirmation of transactions.
On the other hand a global payment system would require a currency which is at the very least stable (and not increasing in value). But a stable value might not be enough to cover the expenses of most of the miners. Mining is already dominated by Chinese miners which happen to have access to the cheapest electricity - which incidentally completely undermines the aspect of decentralization.
In summary it seems that at this point a decentralized payment system just appears to be too expensive (computationally) to be any serious competition for currencies in countries with a well established, trusted payment system. It still might be of use in the developing world.
Stability is relative and a matter of perspective - it's not technically possible to engineer something that has a stable value because the value of everything is constantly in flux.
The value does not need to increase for miners to profit. Mining difficulty scales with the total mining power in order to keep the block rate stable. Increased value only gives an incentive for competition, increasing mining power and THEN increasing difficulty.
It works in the other direction too. Lowered value lowers mining competition which LOWERS difficulty. It stabilizes itself automatically.
Ohhhhh yes. Not only are there those with financial interests that are terrible community members, there appears to be quite a lot of ideological, over enthusiastic fanboys who ruin it.
This is a valid point, but there are far sharper criticisms out there than Mike Hearn's. I find that following the code and not the community is the way to go in Bitcoin-land.
People don't use cars because they have a hard on for internal combustion engines. They use cars to go from one place to another, i.e their utility. The utility of bitcoin is its TPS rate.
But you need the person n the other end to be set up with bitcoin. With the current transaction limit, the likelyhood that the other person is set up to accept bitcoin stays low.
Like I said, Bitcoin will scale like the internet scaled which is in direct proportion to demand. Blocks aren't often full and if you are in a hurry then you need to pay 10 or 20 cents to prioritize your transaction.
There is already a global currency which works great: USD. I live in Pakistan, and I regularly pay my AWS bill, IDE subscription, Netflix, VPN, and a lot of other things with USD.
Like anything in life I think there is a bit of 'crab mentality' here where people don't want to see something succeed if they do not stand to see any reward from it.
I think it's more a reaction to the culty "get rich quick" Bitcoin "investors". It seems that very few people are actually interested in Bitcoin for its UX and the things it enables, everyone is either get-rich-quick or anti-get-rich-quick.
>I think it's more a reaction to the culty "get rich quick" Bitcoin "investors".
Are there any other kind?
Besides, the fact that among the top 3 exchanges were the crap fests of "a man-week of amateur PHP code" and the like that were taken down speaks volumes about the kind of crap the bitcoin crowd can't see through.
Different reasons for different people. There are several camps of BitCoin haters:
(1) There are people who think it's a pure speculative bubble or pyramid scheme. (I disagree because it has utility.)
(2) There are also people who point out that it's a deflationary currency and therefore broken. (I sympathize a bit with this view but it's not enough to make me dismiss it completely. I think this might be a solvable problem.)
(3) There seem to be some who just take a contrarian position against things that have received a ton of hype or that are too fashionable.
There is also a camp of people who don't think Bitcoin has much utility when compared to established alternatives, let alone other advances in other crypto/blockchain tech.
As a big bitcoin supporter from the olden days my impression is that there have always been many quite open minded people commenting on stories, and most of the criticism has at least been reasonably informed.
Because right now, the exchanges are run by people that have no business running it in the first place (huge hacks every month and people losing thousands of dollars), the average consumer will have no idea how to keep it secure (my parents would probably lose all of their money), and it seems the inflation rate can still easily be manipulated (the value has crashed multiple times in the last few years).
Until these things are fixed, I don't think I will ever use or invest in Bitcoin.
What exactly is the news here? Some company accepts some new form of payment that hardly anyone uses.
When it comes to "money", Bitcoin proponents seem massively misinformed on how it actually works. The blockchain technology is interesting, but a new currency isn't as exciting as they want you to believe. I don't care that my dollar has no inherent value, as long as people accept it in exchange, that's all I care about. And they do, everywhere.
Plenty of people care about a lot more than that in a currency, namely that is it responsibly and equitably managed. Bitcoin is not this, of course, but it's a giant step in the right direction compared to the Federal Reserve.
>"It's a giant step in the right direction compared to the Federal Reserve.
The Fed system is far from perfect, but despite what the conspiracy theorists think, it didn't spring out of some sinister idea; it's the evolution of a complex financial system that has generated more wealth, for more people, faster, than at any point in history. Those are facts that you're up against when promoting Bitcoin, a system where some early adopters think they are going to hoard the currency until they get rich from it, because other people can't obtain it. Why would any outsiders buy into that system? That's the thing that some people can't grasp; there is no reason whatsoever for your currency to be scarce. It should grow to match demand.
No, it's a massive step in the wrong direction compared to the federal reserve. There is reason bitcoins value wildly fluctuates and the US dollars doesn't.
Not really - it's more because the dollar-based economy is massive in comparison to Bitcoin and thus has much higher capital requirements to move the market. If you think that centrally managed currencies are great, you should probably read the multitude of horror stories. Here's a recent one: http://bloom.bg/1ryY2ZK
> Some company accepts some new form of payment that hardly anyone uses.
I also believed that. Recently I've come to realize I'm skewed because I'm in an eastern country with little financial controls. Bitcoin has real traction in places like Brazil or China. That has real value, and it is enough to make BTC gain critical mass.
Had you asked me two months ago, I'd say bitcoin as a currency was doomed. Today? Not so sure anymore.
Maybe this isn't a bad analogy. I'm sure you are aware that Linux is the most used consumer facing OS today (android). So sometimes these prophecies do come true, just almost never in the way you think in advance.
Extrapolating the analogy, this leads me to believe that there will eventually be a company that uses the blockchain to deliver a killer app, but it won't be Bitcoin.
Linux is on the desktop. It's just the definition of "desktop" has changed... The devices people use day-to-day are predominantly either iOS or Android, just like how the devices people used day-to-day in the 90's were Windows.
Yes! According to this new definition, about one out of every three devices run Linux at the moment.[0]
I hate this "Linux of the desktop" analogy because people really fail to realize that it has already happened and that they have missed it. I blogged about this a couple of months back: https://blog.r3bl.me/en/year-of-linux/