[simias]

Cryptocurrencies have a niche use, mainly to buy things on the black market but also for small peer-to-peer international payments when other options are not practical. For this reason I don't expect that cryptocurrencies will completely disappear any time soon.

However the value of bitcoin is mainly driven by speculation at this point, a currency that's so volatile is very difficult to use if you're a business. At best you accept it at the current exchange rate and you immediately convert it to fiat. Anything else is very risky.

But that might be temporary, eventually the exchange rate might stabilize, at which point speculation could be vastly reduced and it would work better as a currency. That's kind of a chicken-and-egg problem though, in order for the exchange rate to stabilize you must attach a real world value to the currency by buying and selling things, paying taxes etc... But that won't happen as long as the exchange rate is so volatile.

I'm also very much unconvinced that a deflationary currency can work at all in the long run or that bitcoin will end up fixing the problems its proponents say it will, but that's up for debate.

[lallysingh]

> However the value of bitcoin is mainly driven by speculation at this point, a currency that's so volatile is very difficult to use if you're a business. At best you accept it at the current exchange rate and you immediately convert it to fiat. Anything else is very risky.

Note that any business that already deals in multiple currencies (say, having offices in two countries) already runs an equivalent risk. And many use their currencies to make a bit more money on the forex market.

[simias]

Sure, but that's why most international trade deals in Dollars, Euros or some other reasonably stable currency. The EUR/USD change rate does not typically vary by orders of magnitude within a few years, the Bitcoin/USD exchange rate does. The risk is wildly different.

[sei33qd]

> a currency that's so volatile is very difficult to use if you're a business

This is not an issue. There is a bunch of automated software in the developed world to mitigate the risk. In the third world, there are buildings full of cheap/slave labour that perform the same function manually.

[Jommi]

Your first sentence mostly fits Bitcoin, but misses the point on most of the other cryptocurrencies.

[simias]

Please do enlighten me then, what do other cryptocurrencies offer?

I also think my first sentence applies to bitcoin and ethereum which together have a bigger market cap than all the other cryptocurrencies added together.

[Jommi]

>Please do enlighten me then, what do other cryptocurrencies offer?

Other cryptocurrencies can provide:

- Private, near untracable ways of doing payments

- Efficient, near 0-cost ways of transfering funds.

>I also think my first sentence applies to bitcoin and ethereum which together have a bigger market cap than all the other cryptocurrencies added together. "Cryptocurrencies have a niche use, mainly to buy things on the black market but also for small peer-to-peer international payments when other options are not practical. For this reason, I don't expect that cryptocurrencies will completely disappear anytime soon."

If you want to talk about Bitcoin and Ethereum, say Bitcoin and Ethereum, and not "Cryptocurrencies".

Bitcoin is not anonymous. Bitcoin has high transaction cost. Ethereum is not anonymous. Ethereum has a comparable high transaction cost.

These facts mean buying on the black market, and small international payments are not ideal to do with these cryptocurrencies.

[agumonkey]

Big banks are already looking seriously into cryptocurrencies. Like seriously.

[madamelic]

I think you might be confusing cryptocurrency with blockchain.

Cryptocurrency uses blockchain but blockchain isn't cryptocurrency.

Blockchain technology is already incredibly useful for banks doing interbank currency trading iirc.

I guess you could be talking about banks doing crypto trading, then I would guess that they are but a number are still stuck in the stone ages.

[tlrobinson]

A “blockchain” without a cryptocurrency facilitating decentralization and incentivizing security doesn’t solve any new problem.

[base698]

Banks are doing more than just blockchain now: https://techcrunch.com/2017/09/28/fidelity-ceo-abigail-johns...

[agumonkey]

I think they're using both, as a mean to scale for billion or more number of accounts.

[simias]

Using the blockchain, a technology that's shown to have trouble handling single digit numbers of transactions per second, to scale for billion of accounts? That's interesting.

I wish people in this entire thread weren't allergic to providing citations and references though.

[nikcub]

There's nothing about blockchain's that prevents them from scaling beyond single digit transactions per second - you're referring to the design decision Bitcoin has made to opt for a smaller blockchain in order to ensure distribution and decentralization.

A settlement blockchain between financial organizations doesn't have the same design parameters, and could conceivably run larger blocks, shorter block times, or not store block history at all but rather reach consensus on state (which is what Ripple does)

[agumonkey]

I can't cite, it was a CS guy working for a large bank explaining us why they were paying him.

Calm down

[oldboyFX]

Big banks are looking into all kinds of high-risk speculative assets — as we've seen in 2008.