[zajd]

Interesting article. But none of the problems described are actually with fiat currency. I see criticisms of the Fed, Banks, Credit Card Companies, Credit Unions. All the problems were due to issues with exchanges and intermediaries and with handling USD. It seems the actual fiat currency part worked fine.

[jstanley]

The difference is it's perfectly possible to use Bitcoin on your own without dealing with intermediaries.

But you can't send cash over the internet.

[zajd]

I find it amusing that you consider the internet "on your own" like there isn't a gigantic investment being made into that infrastructure that even enables bitcoin in the first place.

Do people who are in to Bitcoin think intermediaries solely exist to extract value from transactions? There's actually a service being provided.

[nicky0]

The internet (at least theoretically) a neutral infrastructure though. Bitcoin is just an application like email, the web or IM.

[zajd]

Well let me be the first to invite bitcoiners to rejoin us back in reality where the internet isn't. If the entire argument of the bitcoin community is "providing an alternative to fiat currency" and they can't, what's even the point?

The internet IS NOT neutral. Never has been, never will be.

[daptaq]

Could you elaborate ob your last point?

Regarding the first point: To my understating, as a Ex-Bitcoiner, the whole point is a massive distrust in financial institutions + the idea that the whole hierarchy of banks and clients seems superfluous, and could be done away with. Insted of giving up your responsibilities that you get by having money, you take them into your own hand, leaving banks and the similar with nothing left to do.

Now it will obviously make no sense to use bitcoin like Dollar/Pound/Euro+bank, because it isn't made for that. Currently (as far as I know) there are some internal struggles between the "core developers" because of this fact. For-Profit companies like CoinBase and BitPay would like to expand their market at the cost of the distributed network, while others say the whole point of the network would be lost by giving in to them.

[zajd]

It's more or less that all value created from Bitcoin only exists because of the fiat currency systems in place today. It's not like banks hold your money for days when transferring for no reason.

Trust is a social problem and simply cannot be solved via technology because the infrastructure that technology is built on cannot be neutral... we live on a planet with limited resources. If your master plan includes chopping down the tree that holds your treehouse... sounds pretty terrible. Look at international politics to see what "neutrality" in the real world looks like. It's just power dynamics that are outside our control. Is that really what we want out of our financial system?

You see the same thing in the eth community thinking they can use "code" to solve the problem of trust. You can't. Lawyers have been trying for millenia. Bitcoiners are going to need a much more compelling reason/feature than they do now if they want any sort of widescale-adoption (and beyond that, to avoid being smashed when the illegal activities that take place on the network force someone to care)

[rndmind]

The argument here is that the protocol itself is independent and can run on the internet like bittorrent, IRC, SMTP, XMPP etc. This is not about the physical laws and resources governing the internet.

[zajd]

The protocol cannot be separated from the physical infrastructure required to carry it out. Until Bitcoin separates from the internet itself and shows it can actually fund the infrastructure required to maintain it... don't see what the pull is.

[bertiewhykovich]

Have you tried torrenting anything recently?

[bertiewhykovich]

The point being, of course, that it's gotten fairly difficult. It's all very well and good to treat the Internet as an abstraction, but those "physical laws and resources" are critically important for any service that wants to be useful in the real world -- where physical laws and resources are very important.

[anarcat]

you can send cash over snail mail, who needs the internet anyways?

heck, you can transfer huge piles of cash with paper checks, which cost around 75¢ around here, try to beat those kind of fees...

[bduerst]

>it's perfectly possible to use Bitcoin on your own

Though not competitively, which was the point being made in the article.

[nicky0]

The point you have missed is that we don't need these intermediaries if fiat currency is taken out of the mix.

[zajd]

As the essay posted so clearly demonstrates.

[AsyncAwait]

> It seems the actual fiat currency part worked fine.

I don't think Bitcoin is made at will out of thin air like flat currency routinely is. You can still argue that this is not a problem with flat currency itself, but the problem is, unlike Bitcoin, the laws regarding printing and production of flat currency are not governed by hard-to-break math.

[zajd]

Unfortunately for Bitcoin all of the issues 99% people have with fiat currency today have literally nothing to do with how money is created. Yes, it's a difficult problem to solve. No, Bitcoin has not solved it. Piggybacking on the electrical grid to turn "fairness" into "how much electricity you can afford"... how is that fair?

[AsyncAwait]

I haven't said it's "fair", only that there's a proven algorithm behind it, which I'll trust more than the goodness of human nature alone.

[zajd]

I don't trust the goodness of human nature, I trust the legal and financial system that we've collectively built over the past millennia. Which actually does (at least attempts to) enforce some level of fairness. Why should I sign up to have the future of the financial system be controlled by an "algorithm" that is built on a technology (non-quantum crypto) that could be dead in less than 50 years?

[EdHominem]

> I don't trust the goodness of human nature, I trust the legal and financial system that we've collectively built over the past millennia.

I don't like X, I love X.

Your distrust of human nature has caused you to double-down on trusting human nature. Those elaborate systems to counter human nature are built on, get this, more human nature.

> the future of the financial system be controlled by an "algorithm" that is built on a technology (non-quantum crypto) that could be dead in less than 50 years?

Well, it's only one coin, with one algorithm, and people are pricing that into its value. But show me a better system. Not even the USD has a 50-year guarantee. Not only are your dollars likely worth 10% of their current value in fifty years, but there's an even chance that something has wiped their value out completely.

You're just irrationally afraid of crypto risk and irrationally accepting of human risk.

> Why should I sign up

Oh, I see your issue... Don't worry, nobody wants your permission any more than they do with USD. You don't need to, and can't, do anything.

[Mickydtron]

Regarding the trustworthiness of social institutions, there are mechanisms for creating more trustworthy systems on top of less trustworthy parts. A simple example is TCP. It is a leaky abstraction at times, yes, but it is more trustworthy in the face of adversity than UDP is.

This is not to say that our current batch of social institutions are even as trustworthy as TCP, just that it is possible to build institutions that are, and that we have a lot more experience as a civilization with debugging social institutions than we do debugging software. Thus, I do not think it is paradoxical to lean on social institutions to reign in raw human nature.

[EdHominem]

> the issues 99% people have with fiat currency today have literally nothing to do with how money is created

Not even remotely. Everyone is China is acutely aware that the government can print their money into oblivion. That's why they're rushing to dump it into anything. Hundreds of millions have been through this in other countries in recent years.

> Piggybacking on the electrical grid to turn "fairness" into "how much electricity you can afford"

Piggybacking doesn't mean what you think it does.

> How is that fair?

Fair doesn't apply in the world. It's hard to cheat and thus predictable and that's all it needs to be.

fwiw, fiat isn't fair either. Nobody came by to give me my share...

[rhino369]

Bitcoin is made at will out of thin air. It's just an arbitrary amount created every day. The creation rate was just picked by whoever created it. I think it can actually be changed by concensus.

I see no reason why an arbitrary rate is better than a rate chosen to minimize inflation and deflation.

Bitcoin basically is a fiat currency, except no government forces people to use it.

[AsyncAwait]

> I see no reason why an arbitrary rate is better than a rate chosen to minimize inflation and deflation.

It's not about the rate, but about the EXACT rules being agreed upon up front by the MAJORITY of the network and actually enforced by a proven algorithm, rather than people's conscience alone.

[zajd]

The irony being if something like Fusion power happened bitcoin hyperinflation would be guaranteed.

[EdHominem]

No, the difficulty would rise but the number of "coins" created would be constant and they'd cost the same because the same dollar-value of electricity was spent generating them.

[bduerst]

Or when quantum computing breaks ECDSA and allows you to deduce Bitcoin holders' private keys.

[AsyncAwait]

Yeah, let's speculate about far-fetched hypotheticals, because flat currency is totally immune to these.

[zajd]

it's fiat, not flat

smh

[AsyncAwait]

That's what you get for relying too much on autocorrect...

[dlp211]

> I don't think Bitcoin is made at will out of thin air like flat currency routinely is.

This is a gross oversimplification of how the vast majority of central banks(ie: the ones that matter) handle their fiat currency. In theory, yes, they could just print money, in practice, they don't "just print money".

[AsyncAwait]

I kind of assumed that is enough to get the point across, but my point was that a flat currency relies too much on the moral code of a few human actors, whereas in Bitcoin, the contract agreed upon by the majority of the network is not enforced by humans, but by a cryptographic protocol.

[Mickydtron]

A well designed fiat currency system would not rely on the moral code of humans, but rather on having created an incentive structure such that the actors in power are pushed towards doing the correct thing. We have not fully accomplished this, but it is a state that we can strive towards. It is important to note that fiat currency is not based on the idea that we can reliably find and promote saints to run it (at least in theory).

[hackcasual]

But it's not really based on math. A majority of miners could decide, say after the next halvening that future block rewards should be held as is. Sure, it would split the network, but a majority of miners may decide it's in their economic interest to do so.

[EdHominem]

If they fork it's effectively the same as them switching to a totally new coin with entirely different branding. NewBitcoin is no more threatening that Ethereum.

There's nothing they can do that gets rid of your bitcoin though. That's the "math" point. As long as they're on the main chain the rules (expressible as math) prevent arbitrary creation or destruction of coins.

[AsyncAwait]

I guess I could have phrased it better, but the point is that the majority of the network needs to decide something and the enforcement of the decided upon rules is based on math, rather than good morals.

[dsjoerg]

the future of Bitcoin/USD is decided by a shadowy cabal of bankers/miners

[eli]

As a consumer, I'm not sure I care.

[EdHominem]

Right, you don't care how the wings are held on the aircraft either, but you do care that it's done correctly...

[bduerst]

Consumers trust the economists who designed it, the same way you trust the engineers when you step onto an aircraft.

[bduerst]

I can't tell if you trying arguing that a deflationary currency like Bitcoin is somehow better, or if you're just using this an excuse to gripe about a government organization.

In either case it's not relevant to the article.