[fdggdfsvscvsd]

Maybe with Bitcoin I have to trust the software a little bit, but at least if it turns out to be faulty, I can switch to another app.

That's much harder to do with governments controlling fiat money. Or with banks. What is a person supposed to do, who is denied financial transactions by the established financial service providers (paypal, credit cards,...)? There have now been several cases where paypal and others have tried to silence people by cancelling their accounts. What can you do, in the traditional banking world?

And many complaints are not about things Bitcoin actually promises to do. It doesn't promise to make exchanges safe.

The environmental impact is a concern. Miner power perhaps not so much. For example mining hardware coming from one company doesn't seem that bad - you can simply verify the transactions the miners find before sending them out to the network.

[dkonofalski]

Isn't that the central problem with something like Bitcoin and currencies that can be (read: have to be) mined, though? You gain units of the currency for underpinning the integrity of the system. The average person will never be able to build up a mining system to compete with the likes of China and India where they're mining Bitcoin in farms that potentially devalue the currency every single second.

Edit: For clarity, yes, I understand that there is a finite amount of Bitcoin that can be mined. I'm talking about the value of what's constantly being mined. The US would never use Bitcoin as a currency when other countries already have more of it than we do.

[fdggdfsvscvsd]

What do you mean by "farms that potentially devalue the currency every single second"?

[dkonofalski]

Any currency is only as valuable as the goods or services that they can be exchanged for. The value of money comes from its inherent scarcity as, in the case of fiat currency, only a government or federal agency can issue more of it. With Bitcoin, farms are generating more of the currency all the time. If I generate a ton of Bitcoin but never spend it or use it in exchange for goods and services, I'm simply devaluing the currency that's already out there by making it less rare and, by extension, less valuable.

This may be a misplaced example but I think Star Trek is a decent analogy. Money becomes worthless once replicators are invented in that universe because you can just make more of whatever you need. If China can just mine more Bitcoin than the average citizen of any other country, then China starts to determine what the value of that currency is. It's one of the main reasons why I don't think Bitcoin will ever replace fiat currency. It's already being exploited.

[fdggdfsvscvsd]

If you mine a Bitcoin and don't spend it, you are making the remaining Bitcoins more valuable (in theory). You have reduced the overall supply.

With Bitcoin, the maximum number of Bitcoins that will ever exist is fixed.

It doesn't really matter who mines them. Of course at the moment, indeed, new Bitcoins are mined all the time, but the timeline for the future is clear.

Whether it is a good thing, I don't know. There are a lot of weird aspects about it.

As for China - sure, some miners will accumulate a lot of BTC. But they can only affect the price by selling or not selling it. If they wouldn't mine the BTC, somebody else would. It doesn't really give them that much more power, except for monetary power.

It's probably true that right now there are several people or entities who could crash the Bitcoin price by simply selling off all their BTC. That's not very reassuring.

On the other hand, such a crash could also be a chance to distribute BTC more evenly. It would actually be in the interest of the rich BTC people, too, as it would lead to more adaption and hence more value and stability.

Distribution is a hard problem.

There are several problems with crypto, but they are also interesting, and smart people are trying to solve them. At least it is fun, even if it is unclear if it will be worthwhile in the end.

[stcredzero]

That's much harder to do with governments controlling fiat money.

What about government supported fiat money implemented with blockchain? The best way to implement that would be to preserve as many of the attributes of blockchain as possible. So the government could take coins in their possession out of circulation, or change mining parameters to print more money. Perhaps they could even print money just by signing it. However, they would not be able to make money disappear out of other party's accounts.

And many complaints are not about things Bitcoin actually promises to do. It doesn't promise to make exchanges safe.

Is it really viable not to have safe exchanges?

[fdggdfsvscvsd]

"What about government supported fiat money implemented with blockchain?"

Not sure how that would supposedly work.

There is one interesting application of government, though: the distribution of the coins. That is what all the cryptocoins struggle with. A government could give every citizen an equal amount of coins, because they have a database of people.

"Is it really viable not to have safe exchanges?"

Some would say that they don't need exchanges, they want to be able to pay everything with Bitcoin. So they wouldn't need fiat money.

Apart from that, exchanges can be at least as safe as banks or traditional stock exchanges. I am mostly using one that is associated with a bank, in fact.

[astrodust]

"If I lose all my Bitcoin because it turns out that Bitcoin was a total scam, at least I can switch my now worthless assets to...wait a second."

Fiat money rarely becomes utterly worthless. Even Zimbabwe currency, unbelievably inflated, is still worth a marginal amount as a collectible.

Blockchain currencies have gone from something to nothing in seconds.

[fdggdfsvscvsd]

The value of Bitcoin is not something Bitcoin makes any promises about.

The technology is obviously not a scam. At most it could turn out that it has technical flaws, like the crypto algorithms could be broken or whatever.

People selling you Bitcoin or making you promises about Bitoin might well be scammers. But that's not the same thing.

Worthless fiat money: it seems to happen a lot, actually. I have a couple of Billion Reichsmarks I could show you. I don't think Zimbabwe $ are worth enough to support your argument.

Of course to use Bitcoin, you have to trust that it will have or keep some value. In that sense, yes, you are back to trust.

[astrodust]

When the Bitcoin network goes offline then every BTC in existence will be worth exactly $0.0000.

When Zimbabwe blew up their money the bills themselves still had marginal utility as wallpaper or as collectibles. Collectively these bills are probably worth millions because there were so many of them.

If you have any Reichmarks around they're actually worth a fair bit considering they're not legal tender. Bills on eBay go for $5 or more depending on their condition, coins for far more. This is almost a hundred years after the implosion of the currency.

Zimbabwe and the Reichmark are extremely rare events. There are hundreds of countries in the world and every decade one or two might suffer from out of control inflation.

Bitcoin may well be a scam. We can't prove it isn't because the creator(s) remain unknown and their intent is based entirely on speculation.

I assure you that Bitcoin physical memorabilia will be worth infinitely more than Bitcoin itself within twenty years. A single shirt or mouse pad will be worth more than the entire market cap of Bitcoin.

[fdggdfsvscvsd]

I doubt Zimbabwe Dollar paper is worth millions, but OK...

I'll check the value of the Reichsmark, but again, I suspect the market is limited.

Network going down: in theory you could keep it up with a Raspberry Pie, so I suppose somebody will. Although I don't know if all the mining hardware out there would make it nonviable (as anybody could start a mining attack with such mining hardware, against a Pie).

As for proving Bitcoin isn't a scam: we don't need the inventor or their plans, we have the implementations of it. That can be validated, as much as possible. I'd argue that if it still has flaws, then they weren't because of scamming, but because of technical issues nobody could foresee.

Edit: they seem to be selling notes of one billion Reichsmark for 1€ on ebay (here in Germany). Not really worth the effort.

[astrodust]

1€ is an infinitely larger amount for an old "worthless" bit of paper than anyone will pay for any amount of Bitcoin when the network collapses.

I don't mean it "goes offline", I mean that the blockchain is compromised by a 51% attack or something worse and the whole thing can't be trusted, so nobody cares about it at all.

[nixpulvis]

Am I missing something, "switch to another app" in this context also means finding buyers for all your bitcoin and exchanging them for whatever your new coin-de-jour is.

[fdggdfsvscvsd]

No another app is just another implementation for a wallet. That is what I meant by apps - in response to Schneier's argument that you have to trust the software anyway.