[vazamb]

(i am somewhat familiar with the tech but don't follow the business side of bitcoin) what I find weird is the forks. A major selling point of bitcoin is that there will ever be only 21 Mio coins. You know, unless there is a hard fork and now there are suddenly twice as many coins. Presumably one of the resulting coins' value will drop but you are still creating value out of thin air, something that the crypto people hate about fist currency run by a central bank.

I also don't really know what to think about it. I am sure blockchain tech will be hugely successful in the banking and government sector and maybe (a comment I read yesterday) once it is proven to work the central banks will issue blockchain based currency. But bitcoin as a store of value? I don't know...

[namelost]

The forked currencies are just the same as altcoins, you can't sell 1 Bitcoin Cash for $7000. The fact that people are willing to accept money for them doesn't change the value of one Bitcoin.

[vanderreeah]

Forgive my total ignorance of bitcoin but - why can't you sell 1 Bitcoin for $7000?

[Slaul]

You can, it's confusing but there is Bitcoin, Bitcoin Cash, Bitcoin Gold, and soon to be another one Bitcoin Segwit2x or some such.

Each of these other "versions" of bitcoin were created by a fork. As far as I know, when a fork happens you get an equal number of "new coin" as you have original coin. Seemingly creating value out of nothing.

[vanderreeah]

Ah I missed the different name. Thanks for the clarification. I was thinking of comments I've seen before where people say that if you have 100 bitcoins you'll have a hard time converting them to (e.g.) $700k cash.

[madamelic]

You would.

If you put a sell order at 7,000 with a volume of 100, it would (likely) cause a flash crash

You can see flash crashes all the time when someone offloads a bunch of coins without balancing across exchanges.

Plus, you would have to find quite a few people that wanted to buy coins @ 7,000 and finding them before your order causes a flashcrash isn't likely.

[mywittyname]

My understanding is that most exchanges won't allow you to move more than $10k/day or so out of your account. So, if you use three separate exchanges, it might take you a month to liquidate the entire stake.

[psyc]

Bitcoin Cash is a different, suggestively named currency (it’s not Bitcoin) that was bootstrapped by copying Bitcoin’s blockchain.

[slindz]

Bitcoin Cash was born out of necessity to save Bitcoin from disaster when it was hijacked by corporate interests (funded by AXA/Mastercard).

Both sides of the SegWit fork (SegWit1X vs. 2X) ~Nov. 16) are intentionally crippling transaction speeds/costs to move transactions off the blockchain and into the pockets of said corporate interests.

The true spirit and potential of Bitcoin lives on through Bitcoin Cash.

[psyc]

That could be entirely true (and I believe there are several alts that are technically superior to BTC), however if a friend asks me for Bitcoin, I am not going to tell him to install a BCH wallet, send him BCH, and tell him not to worry about it because it's Bitcoin in spirit and it's going to be great.

[joosters]

The forked currencies behave very oddly. When bitcoin forked, the bitcoin price didn't change but the new coins had a non-zero value (something like 10-20% of btc, if I remember). So some extra value was created out of thin air. It makes little sense!

[acjohnson55]

Hypothetically, Bitcoin would have the sum of all these values if there were no fork. But in reality, it's a massive bubble.

[ForHackernews]

> I am sure blockchain tech will be hugely successful in the banking and government sector

Are you? Why? So far, no bitcoin/blockchain advocates have been able to explain to me a single non-illegal use case that isn't better served by a traditional, centralized database.

A single large Postgres instance could handle all the global transaction volume of bitcoin, and it would be faster and orders of magnitude more energy efficient, too.

(Cue bitcoin people telling me about how it's 'trustless', and I should just trust the miners, devs and exchanges and hurry up and buy some)

[tom_mellior]

> a single non-illegal use case that isn't better served by a traditional, centralized database

You know how PayPal blocked payments to Wikileaks? (Back when it wasn't yet obviously evil.) That's what traditional, centralized databases can do for you. Note that donations to Wikileaks weren't illegal, governments were just efficient in pressuring PayPal into enforcing rules that didn't even exist officially.

Also, traditional, centralized banks simply do not currently offer me the possibility of near-instantaneous money transfers. (This varies depending on where you live.) Bitcoin does.

There are a lot of things wrong with Bitcoin, the fees are much too high, and yes, its proof-of-work scheme is terribly wasteful. But the view that it doesn't offer anything useful is a bit one-dimensional.

[ForHackernews]

> the possibility of near-instantaneous money transfers.

Maybe the possibility. In actual fact, don't bitcoin transaction confirmations sometimes take >24 hours?

[splintercell]

I can even make a bitcoin tx take more than a month by not attaching any tx fee to it.

Attach a higher fee, and it will get cleared in 10 mins, attach a lower fee, and it would take time.

[ForHackernews]

So that seems...much worse than "legacy" banking solutions.

Here in the UK, I can send an extremely fast (matter of minutes) "faster payment" to any UK account for free, and a pretty-darn-quick (matter of hours) SWIFT transfer to any European account for a very low flat fee.

[tom_mellior]

Sometimes. You can throw money at the problem, but yes, it's a gamble. It should be all that easier for banks to beat this, but they don't.

[lucozade]

Having a globally ordered, immutable, common ledger is a really useful thing in banking. Particularly in the inter-bank space where a vast quantity of data is shoveled around and everyone keeps partial, flawed copies.

Any given piece of data is, usually, required to be private to a small number of parties but is, usually, all required to be available to some parties i.e. regulators.

Doing all that is absurdly costly and error-prone. And that's when you're doing it well. Do it badly and the costs are eye-watering (ask, well, anyone).

Some of the ideas and techniques, particularly the cryptographic ones, used in the blockchains have opened the banking folks eyes to what could be possible. And this is a very active area of interest.

But it's not the bitcoin blockchain, per se, that's particularly interesting. For example, the trustless piece is largely a pointless waste in the problem I outlined above. We know all the participants and can safely move keys etc around. In the same vein, proof of work is unnecessary, we can identify block creators and easily use external remedies if they play silly buggers (no-one is suggesting we get rid of all our lawyers).

Now, you could argue that, if using the relevant techniques, you could keep all of that in a big, central DB and you'd be right. But it's not "big, central"-ness that's key. It's the "globally ordered, immutable, common"-ness. Along with selective privacy. Postgres doesn't give us what we want any more than Bitcoin does. The real change has been that we know relational DBs really well but we're learning about the possibility of the crypto and block chain tools. It's as much a mental shift as a technical one.

One final, minor point. A central DB, though possible, would be quite painful in practice. Although not fundamental, having a distributed ledger is actually quite handy. Although it would mean that we wouldn't completely do away with reconciliation hell, it wouldn't surprise me if something like a gold copy plus validated replicas approach or similar became popular. And again, some of the crypto techniques make this sort of thing much more tenable.

[acjohnson55]

> But it's not the bitcoin blockchain, per se, that's particularly interesting. For example, the trustless piece is largely a pointless waste in the problem I outlined above. We know all the participants and can safely move keys etc around. In the same vein, proof of work is unnecessary, we can identify block creators and easily use external remedies if they play silly buggers (no-one is suggesting we get rid of all our lawyers).

Yep, you could basically accomplish the same thing with Git and some rules for how to model a ledger and consensus. In that sense, there's nothing particularly new about the concept of an immutable distributed history. Now there's simply an implementation that cuts the banks out of the loop and lights a fire under them to offer better service.

[lucozade]

> Yep, you could basically accomplish the same thing with Git

Not entirely sure that "Git and a bit" is likely to be sufficient but, yes, there are some intersections. The idea isn't new at all.

The belief that practical solutions for a common ledger that meet strict privacy and confidentiality requirements is relatively new.

> Now there's simply an implementation that cuts the banks out of the loop

Not sure what you mean here. If you're talking about Bitcoin as a product then I don't think the banks are that concerned. It's starting to be interesting as an extra option for portfolio diversification but that's about it. If anything, the well publicised schoolboy errors have been net positive for the banks.

As I said, where it has generated most interest as a technology is in inter-bank. There are 3rd parties appearing in this space but that's been encouraged (and often funded) by the banks. It's a space with a lots of cost and operational risk but very little actual value.

[eksemplar]

Maersk uses it to fight corruption in container ownership claims. It used to be a piece of paper, that cost more than the actual container to transport because whoever held it could pick the container up at the port.

These days it's run on block chain making it virtually impossible to claim a container that isn't yours.

A similar use case could be used for almost any sort of ownership record in the public sector, like landownership.

[the_stc]

Can not a database or simply digital signatures do the same thing? Why does Maersk need a trustless system?

[jypepin]

I think with some sort of blockchain technologies, it would be harder for central banks to do things like what happened in Argentina, Greece or Zimbabwe.

[simias]

That's a very broad claim. What "things" are you referring to and how would blockchain technology have prevented them?

Very simply put the Greek financial crisis was mainly due to poor bookkeeping by the Greek institutions (that's being kind), rampant tax evasion and foreign governments (especially within the EU) not wanting to keep footing the bill. I'm not sure how a clever use of SHA-256 would solve these systemic, cultural and diplomatic issues.

Especially since tax evasion would be significantly easier in a bitcoin world where you can launder and hide money extremely easily. No need for a hidden account in some tax heaven, just generate a new RX address and you're good to go, receive all the bribes and "off the record" payments you want.

[charlesdm]

I think he meant the fact that banks were locked down by the Central Bank and Greek people couldn't withdraw cash they legally owned (yet foreigners, with foreign cards etc could).

Re tax evasion, perhaps for small amounts, but not meaningful sums. That money still has to show up somewhere in the banking system, at some point, if a counterparty accepts it. You could make the same argument about diamonds or gold ingots (though those are obviously less convenient to move around)

[charlesdm]

I'm not a libertarian, but I do believe it's good there are ways to hold relatively liquid assets outside of the traditional banking system. Greece is a great example.

Each system has their flaws, but Bitcoin is not worthless. The question is more, how much is it actually worth? I don't think anyone really knows at this point.

But the more you think about it: easy money policies might help keep the economy afloat, but at a significant price. Cash is losing value fast (perhaps not due to traditional inflation, but because assets just increase so much in value). I don't really believe this is going away anytime soon -- there is just too much money in the world looking for yield, and rates will be kept low.

Let's say you were a wealthy person with $5m in 2008. If you had the guts to put that into an S&P fund and borrow another $10m through portfolio margin (= $15m), you'd be worth around $50m today (excluding taxes, interest expenses, etc etc).

[xiphias]

The only extra thing blockchain based cryptocurrencies provide is decentalized ordering of transactions. David Chaum tried what you suggest and his currency was shut down by the government quite fast and easily (and people lost their money as their tokens were worth nothing after the incident).

[weddpros]

Imagine you don't want a single person to control everything in your country (dictator), and you don't want a single person to control your currency.

Against dictators, we have democracy.

Against a centrally controlled currency, there's not much but crypto currencies. They're actually democratic, the majority wins.

Also, I don't want to be the one who will handle security for the single server with a Postgres database that has 100B$ in it. Do you? Do you want to be on call when the RAID array crashes or the datacenter goes dark?

I do believe there will be alternatives to proof of work, but a single database server isn't one of them.

[EliRivers]

They're actually democratic, the majority wins.

Majority of what? Not the demos, I bet; not so democratic. Majority of bitcoins? Majority of processing power?

[psyc]

Bitcoin resists pithy statements about who has the power. Be skeptical of anyone trying to dumb it down to "it's the miners" or "it's the nodes". It's a complicated system of checks and balances, by design, and the fact that all of this was thought through in depth and then proven in practice is the reason we're having this thread today.

This essay does a decent job of summarizing the checks and balances:

https://medium.com/@twobitidiot/bitcoins-constitutional-cris...

[weddpros]

Majority of participants in the network. I run a full node, I don't mine, but my voice counts. Of course I don't like the weight of huge mining farms, and I hope there will be viable alternatives to proof of work, to make BTC more democratic.

In the meantime, not a single country controls BTC, and even heavy weight miners can't decide unilaterally...

[EliRivers]

Is it the majority of nodes, then? If I run ten nodes and you run one, I get ten times as many votes as you?

[130434089]

Only miners really matter, if you only have a full node you don't have control over the network, just the ability to verify it. You will have to follow wherever the miners lead you.

[weddpros]

The following is just my understanding, correct me if I'm wrong:

People don't connect directly to miners. They connect to nodes (8000+) which forward to miners. Nodes can declare an order is valid or invalid and they can blacklist bad-behaving miners. They can refuse nodes/miners that signal a change they don't agree with.

So I think full nodes are VERY important in the network and their voice counts. That's why I'm running one.

[SilasX]

I'm more interested in your dismissal of the fact that it can be used to do illegal activity. Do you plan to go the rest of your life without ever breaking a law? And as a sibling poster noted, there can be financial chokeholds even on activities that they didn't bother to make illegal, like donating to Wikileaks.

(I don't think you responded to the point that Wikileaks is a non-illegal use case for BTC.)

[ForHackernews]

> (I don't think you responded to the point that Wikileaks is a non-illegal use case for BTC.)

Ok, you're right: Transferring money to unsavory-but-legal groups is a use-case for bitcoin. You could also mail a check.

I'm still not convinced that makes it a promising technology with a bright future, but I've certainly been wrong before.

[SilasX]

>Ok, you're right: Transferring money to unsavory-but-legal groups is a use-case for bitcoin. You could also mail a check.

That’s vulnerable to the same financial blockade techniques as for credit cards and forces you to put your name on the donation. (Not to say bitcoin guarantees anonymity but it’s not immediately detectable.)

[vidarh]

> Are you? Why? So far, no bitcoin/blockchain advocates have been able to explain to me a single non-illegal use case that isn't better served by a traditional, centralized database.

I agree if you change "isn't" to "couldn't be".

Consider if I'm a small company and want to process cards. So I try to sign up for a payment provider. Except, oops, I'm outside the US where terms tends to be stricter. And, oops, I'm in a legal field (in my jurisdiction) but one that the payment provider considers risky or morally suspect, such as, say gambling, or adult products, or prostitution, or even just travel.

A lot of companies find themselves spending ages sorting out payments because of this. I've worked with startups (in travel, in one case) that spent weeks getting approvals from one provider before suddenly getting "no" - in the end it took four attempts and several months in case; we developed the whole platform faster than we could get approval from a payment provider. That's unusual, but it happens, and in general having dealt with payment processors in various companies over a period of nearly 20 years: it's been nothing but pain and misery most of the time.

That's not a problem of the "traditional centralized database" directly, but indirectly because the centralized database allows for centralized gatekeepers of transactions: Your payment provider may or may not care about the nature of your business, but if the card association does, or the issuing banks does, or the bank handling the merchant account does, it doesn't matter.

This, to me, is the biggest potential value of crypto-currencies: The rising importance of card payments over cash have been one of the largest un-democratic power-grabs of our time by handing power to those controlling the approvals process.

Some previous developments, like PayPal, had the potential to change this, but quickly ended up as steeped in problems as the card providers.

I understand why: They're taking significant risk, and they're managing that risk. I'm not suggesting some sinister cabal trying to control morality through payments; merely that these companies first interest is to protect their share holders investment, not the public interest.

But crypto-currencies has the potential to give us "digital cash", of sorts, in that while it's not exactly the same (it's much easier to track for starters), it is much closer to cash than cards in terms of inability to control its use. We can track it after the fact like we can with cards, but we can't easily stop people from making payments or taking payments.

That has value. Whether that's enough to sustain Bitcoins current momentum is another matter.

[matthewmarkus]

Bitcoin IS a central bank. It is an "alternative" central bank with a "deflationary" bias written in code and run and administered by a collective. Is that a good thing? Probably, from the perspective of providing competition to other central banks. Also, that's Bitcoin's core value proposition. Everything else (e.g., transaction speed) is secondary. Bitcoin will be a store of value as long as people believe its rules for creating Bitcoin are sound.

[charlesdm]

> I am sure blockchain tech will be hugely successful in the banking and government sector

Then it's worth looking into Ethereum.