[can16358p]

Many people buy Bitcoin to "hodl", not to use, giving it some gold-like characteristic.

If there was some crypto without any incentives of hodling long term, I'm sure the adoption would be higher. People don't spend Bitcoin the same way they don't spend gold in daily life: to own it as a long-term value reserve.

[n4r9]

My best guess at why the average person is hesitant to use bitcoin as a primary currency is: where do I go when it goes wrong? If the system holding my money is hacked, or I get scammed in some way, where is my legal recourse? Legal recourse is typically something provided by a state. But state regulation nullifies a lot of what bitcoin advocates claim is the advantage of cryptocurrency. I'm not up to scratch on the details in El Salvador, so curious to know whether they have solved this issue.

[wikfwikf]

That's not the whole story. When Bitcoin started it was used more as a currency than it is now. Firstly by evangelists who tried to establish a BTC economy, and secondly in the illicit economy.

Bitcoin miners and devs took the project in a specific direction a few years later, optimizing it for use as digital gold, while making it much harder and more expensive to use as a currency.

[SkipperCat]

100% agree. The early days of Silk Road showed the true value of Bitcoin. It was a great untraceable currency. Perfect for buying drugs (no moral judgement, just saying what happened). Then, around 2016, CNBC “discovered” crypto and so much investor money and mania jumped in. Now it’s just a value store for dreamers. The fact that the word HODL exists kinda proves that point.

[2muchcoffeeman]

Not just dreamers, it’s an identity. Someone else on this topic is calling themselves a “hodler”. Not just an investor. But a “hodler”, a “True Believer” I suppose.

Your investment is there to make you money, not to provide you with an identity.

[cool_dude85]

Personally, I like for my untraceable currency not to have a permanent, public ledger showing every transaction I make.

[ridgered4]

Yes, my understanding of bitcoin is that it is not untraceable at all since the transactions can be followed back to their source, but it was widely perceived as such by dark markets for a number of years. I guess maybe if you mined it yourself (no longer really feasible for an individual?) or somehow purchased it with cash it might be.

[pessimizer]

> That's not the whole story. When Bitcoin started it was used more as a currency than it is now.

I still reflexively think of bitcoin primarily as the way you buy abstract board games from Spanish libertarians, because of https://nestorgames.com/

[upsidesinclude]

See my other comment.

El S. is in a pretty strange place because they don't have their own currency. They have no control over their economy in that regard, so adopting a separate currency which frees them from singular dollar dependence is quite useful.

Nullifies what claims exactly?

[n4r9]

> Nullifies what claims exactly?

Bitcoin seems to be intended as a decentralised payment system that bypasses any third party institutions. My gut feeling is that: in order for a state to provide legal recourse, bitcoin addresses need to be linked to a centralised personal/business identity that can be tracked down and sued or prosecuted if necessary. For Bitcoin to feel safe for the normal person, it would have to introduce centralisation and third parties. My gut may be wrong, of course.

[upsidesinclude]

You might be right.

The important thing is that the person must accept the responsibility of owning all aspects of their wealth.

No one can remove it from you, but you can make the mistake of giving it away. Then you bear the responsibility for losing it.

That's not a very big trade off for some people.

[n4r9]

Yeah, I think most people find consumer protection regulations very reassuring. It's natural that they're reluctant to transition to a system that does not (and arguably cannot) have any.

[spiralx]

Ironically the Chivo wallet is a centralised system that only touches the wider BTC network when transactions are made to a non-Chivo address.

[n4r9]

Thank you for the info, I didn't know about Chivo. This may well be the government's attempt to address the issue of legal recourse. Interesting though that it still was barely used, at least partly because of security issues:

> Though around half of the Salvadorans surveyed have downloaded Chivo to date, with 40% of those downloads happening in September 2021, around 61% of those have abandoned it after withdrawing the $30 dollar sign-up incentive, the National Bureau of Economic Research found. Only 1.6% of all remittances were received in bitcoins via digital wallets in February 2022, according to El Salvador’s Central Bank.

> Chivo download numbers have been negligible in 2022, suggesting that the push has run out of steam. Some of those who have stuck with the application are using it for transactions unrelated to Bitcoin. The median active user does not send or receive a single Bitcoin payment a month nor make any Chivo ATM withdrawals, the survey found.

https://restofworld.org/2022/el-salvador-chivo-bitcoin-walle...

[eimrine]

> If the system holding my money is hacked

We the hodlers believe that Bitcoin can be hacked only by hacking cryptografic hash-functions, which will lead to collapse all the banks, all passwords on all websites, maybe some data structures like hash-maps.

> or I get scammed in some way, where is my legal recourse?

How will you get scammed if you have a backup which you promise to yourself to not even introduce to computer with online? Also nobody recommends you to hold all your wealth in crypto. Some metals work not bad also, my favorite example is copper.

> But state regulation nullifies a lot of what bitcoin advocates claim is the advantage of cryptocurrency.

Let me guess, you have not read / have to reread the bitcoin.org/bitcoin.pdf whitepaper?

[n4r9]

I'm not talking about the hash function being hacked, I'm talking about websites like Coinbase that provide wallet and exchange services being hacked. Banks of course are also vulnerable to social engineering etc but there is more regulation and consumer protection for when that happens.

And by "scammed" I mean someone providing a fraudulent or faulty service or product. In the UK we have "Section 75" which protects consumers who pay via credit card or paypal: https://www.citizensadvice.org.uk/consumer/somethings-gone-w... . Is such protection possible with bitcoin?

[eimrine]

> I'm not talking about the hash function being hacked, I'm talking about websites like Coinbase that provide wallet and exchange services being hacked.

What part of Bitcoin whitepaper tells you have to rely on third-parties? I'm not a trader, I'm a hodler, I even do not have a Coinbase account.

Of course if third-parties get lost you lose everything you have believed they will guard for you.

upd after reading responses

Sorry guys I forgot that average person needs to be an idiot. My bad, usually I consider an opposite.

[thraxil]

Remember that the comment started with "My best guess at why the average person is hesitant to use bitcoin".

The "average person" needs something roughly equivalent to a current bank or credit card in terms of simplicity. Currently, that basically means using third-parties like Coinbase, not reading the Bitcoin whitepaper, managing their own hardware wallets and encryption keys, thinking through backups and disaster recovery scenarios, and being dilligent about maintaining opsec.

[andybak]

When I held crypto, I used a 3rd party.

Why?

Because they are more trustworthy than my own ability to not screw up. I lose/break things all the time. I didn't want a fragile token or backup costing me 5 figures.

[thraxil]

> upd after reading responses > Sorry guys I forgot that average person needs to be an idiot. My bad, usually I consider an opposite.

Right. Wanting simplicity and low risk around basic daily purchases and transactions means that someone's an idiot. You seem like a lovely person. Thanks for representing the crypto/BTC community so well.

[UncleMeat]

"Don't worry, you can manage your wallet completely yourself without any 3rd parties" is in absolutely stark opposition to "adoption will grow and grow." If the only people that use BTC are hobbyists who are willing to go through the trouble to find a way to safely manage their own wallet then BTC will never see widespread use.

[gjulianm]

I mean, if being secure requires an average person having an airgapped computer holding the wallet keys, it's not going to see much adoption. Also you can't really use it as a currency if you do that.

[redox99]

> having an airgapped computer holding the wallet keys

That's basically a hardware wallet (not 100% "airgapped" but the same idea). And yes you obviously you can use it as a currency that way.

Still I agree that crypto is too complex for the average person and I wouldn't trust my mom to not lose it or get scammed.

[saberience]

This borderline snarky and condescending comment isn't helpful and isn't what is encouraged on HackerNews.

[pjc50]

> I'm sure the adoption would be higher

Adoption for what purpose though?

If you're not keeping a substantial "float" in the currency, you have to buy more every time you want to use it. So you've just inserted an extra, riskier step into your ecommerce or international wire transfer.

Within El Salvador, the policy behaves like dollarisation with all its advantages and disadvantages, with an extra disadvantage that the currency has fallen by a third against the dollar.

[espadrine]

> If there was some crypto without any incentives of hodling long term, I'm sure the adoption would be higher

Interestingly, that is also the analysis that most central banks make. Their monetary policy sets a positive target inflation rate for this exact goal.

However, that monetary policy is often a large part of why people use Bitcoin.

[sschueller]

Should do what Switzerland has been trying to do. Negative interest rates to punish those who are hodl the Swiss Franc.

[soco]

Then it wouldn't be a free currency anymore, and that's a tenet of crypto (whether real or only promised, the mileage may vary).

[taolegal]

I have a hard time with left leaning economics if only because they revile "consumerism" but their policy prescriptions, in practice, make it impossible to do anything but consume.

The demonization of "hoarding" is basically an endorsement of consumption. Of course, they then regulate your consumption.

You could see how people resent the micromanaging of their lives.

[jollybean]

"If there was some crypto without any incentives of hodling long term, "

The opposite.

Cryptos that are anchored to USD have no appeal. They're less useful than USD, and, there's no 'get rich quick' aspect. So what's the point.

The Ponzi Mania is what drives people into BTC and to talk about it incessantly on the Internet etc.. Without the mania, it's not going to spread.

An institutionalized crypto, like one by the government, and which had some kind of stability (i.e. central banked) would probably get critical mass and therefore have some utility.

El Salvador leader is basically criminally derelict, he should be jailed.

[sparkie]

The use of "stablecoins" is for crypto arbitrage. Exchanging to USD via traditional means is just too slow to take any risks.

There was an early alt-coin, http://freico.in/, which had a demurrage fee for holding, which was intended to incentivize spending over saving. A terrible idea if you ask me.

Long-term saving is the biggest selling-point for Bitcoin. If the value of savings went down by design, it would have never got to where it is.

[redox99]

There's about 150B in stablecoins[1]. You can argue that some of that is fake, not backed. But even if 75% of that were fake it's still a huge amount of money. So it's clear that cryptos that are anchored to USD do have appeal.

The appeal however is not from people wanting to use them to buy their coffe. The appeal is DeFi.

[1] https://coinmarketcap.com/view/stablecoin/

[jollybean]

$150B is a small amount of money that is otherwise just sitting there. Nobody is using it for anything and it's not growing.

It's generally a riskless thing thing to put your money in so it's not surprising that a few funds have gone big on it. They will fold the bet eventually.

[upsidesinclude]

If?

There's Tether and USDC, plus a handful of others.

The critical thing at the moment is to be "sophisticated" enough to make the right choice.

In US law, an investor has to prove they have means (money to spare) to do risky things. They are "sophisticated" investors and can afford losses. (This word is used in the law)

The rest don't get to play. So the rest don't know the rules and don't understand contract law.

If you read a contract it defines the rules. Most people don't want to or don't know to do this and, right now, the government isn't stopping them from making these decisions about investment in crypto.

Many people talk about crypto without acknowledging the fundamental nature of investments, because the don't invest (i.e. not "sophisticated"). They want something like their bank. Somebody to make sure they don't mess up and take care of them if things go sour.

If that person is you, leave your opinions aside and keep your money in bonds and mutual funds

[tromp]

> If there was some crypto without any incentives of hodling long term

There are some that strongly discourage speculation by having a purely linear emission, which after n years still has a yearly supply inflation of 1/n and takes a whole century to get down to 1%. Offering the same rewards to later generations helps avoid concentration of wealth that most cryptocurrencies, especially premined ones, suffer from.

[latchkey]

This last cycle, many people bought Bitcoin to use as collateral for loans, which was a novel and even smarter use of it. Use your money to make money.