[this_user]

Plus operating ransomware.

The problem with Bitcoin is the costs associated with using it. Due to its decentralised nature it will always be more costly than centralised solutions. Therefore, Bitcoin simply cannot compete unless illegal activities are involved. The economics simply do not work out.

[kneel]

>Due to its decentralised nature it will always be more costly than centralised solutions.

That's a really sweeping claim and I'd argue that it's too soon to really claim one way or another.

The security of bitcoin is inherited from it's decentralization. The massive proof of work operations in Bitcoin (and the resulting costs) are part of bitcoin's security.

Centralized solutions will always be vulnerable as long as security bugs exist (have you ever heard of a completely secure database?) And fraud will always be part of the equation.

So what's better? Currently no one knows. But interestingly enough the direction of bitcoin right now is to build centralized networks on top of a decentralized network.

[davidgerard]

This follows from basic computer science. (Something I increasingly find Bitcoin advocates handwaving away.) If decentralisation were more efficient than centralisation, systems aiming for efficiency would naturally centralise; this is not what we observe.

The decentralisation is stupendously inefficient, Proof of Work is 47kg of carbon per transaction literally wasted, and it all centralises anyway - the code is controlled by just a few people, the mining is controlled by four miners (and there is no guarantee they are owned separately), most of the mining is in one country and 75% is about to be in one building.

Bitcoin decentralises things that don't need to be decentralised, wastefully, then naturally recentralises anyway.

[kneel]

>If decentralisation were more efficient than centralisation, systems aiming for efficiency would naturally centralise; this is not what we observe.

I'm going to assume you mixed up your words there. I'd argue that we see lots of decentralization on the web. I don't see why it has to be one or the other, they seem to work fine in a hybrid state.

>the code is controlled by just a few people, the mining is controlled by four miners

Code is available on github and you can fork it. Mining centralization was the result of competition and some ambitious Chinese living next to dams. There is nothing preventing this from changing in the future.

>Bitcoin decentralises things that don't need to be decentralised, wastefully, then naturally recentralises anyway.

I'd say that money should definitely be decentralized.

[davidgerard]

Others have pointed out that the web people actually use is centralising hugely, but I must note:

>Code is available on github and you can fork it. Mining centralization was the result of competition and some ambitious Chinese living next to dams. There is nothing preventing this from changing in the future.

There is: mining benefits from economies of scale. Increasing specialisation increases your efficiency in hashes per dollar spent, and this increases the barrier to entry. To compete in mining now, you need not just super-cheap power but to design your own ASICs.

Specialised hardware will always be more efficient on a specific task than general hardware. I'm frankly amazed whenever I have to point this out on HN of all places, and have had to do so repeatedly.

As for the code base: the protocol is ill-specified outside the code base. So you need to get the network to adopt your forked code, or you just have another altcoin. Again, this should be well-known if you claim to know how bitcoin actually works in practice.

[ffwd]

> I'd argue that we see lots of decentralization on the web.

Youtube, Paypal, Facebook, Steam, Reddit, Medium, Github, hell even hackernews - I think the big success story of the internet in the past decade has been the centralization. Decentralization is usually popular because of illegal intents (like bittorrent). I agree with you though, they could exist in a hybrid state and there will always be markets for decentralized systems. But a global economic system run that way is on a totally different scale and stake.

> I'd say that money should definitely be decentralized.

Depending on how it's done, it very well should, but a lot of things come into question like governance and consumer protection, and actually moving the world forward and helping those who aren't computer savvy. Unless you're a libertarian, the economy is really a means to an end and not and end in itself, and another big success story over the past decades has been the huge global economy that has been created and enabled everyone from the poor to the old to people who aren't as savvy to work and live relatively safe lives. You can't just dump the bitcoin software on everyone and say, "here it is! your life savings, your paycheck, your everything, just make sure you don't fry the hard drive that it's stored on and make backups!"

Decentralization is for the most part, an enthusiast endeavour. The centralization aspect is powerful because it offloads all the technical details so that 5 hours per day of brainpower on the whole globe isn't wasted on just trying to do something as simple as recovering 5 bucks in an emergency. And this applies to almost any decentralized service and applies even more strongly to things that are of survival importance like money. I'm not disregarding the idea or making a prediction, it's just there's a lot here to think about I think

[kneel]

>Decentralization is usually popular because of illegal intents (like bittorrent).

I guess we view de/centralization in a different way. All the sites you listed are centralized under a brand/code but decentralized on cloud servers. Inspecting a page and viewing sources you can see how many places a site loads from (hackernews is pretty centralized)

>Decentralization is for the most part, an enthusiast endeavour.

I'd agree that Bitcoin is an enthusiast endeavour currently. There are several elephants in the room though, the federal reserve, unaccountable corruption, currency manipulation, SuperPACS, offshore tax havens. I'm not naive enough to claim that Bitcoin could solve these problems or even any of them, but it could be used as a tool if utilized properly.