[pjc50]

Bitcoin addressed at most one issue in finance, without properly tying it to the financial crisis, and since then has reinvented all the others in a massive Chesterton's Fence speedrun. It's been nothing but "oh, so that's why the rules are that way" since then.

[freeAgent]

I’d say that Bitcoin itself has been operating pretty well, minus the stupid decision to keep the block size cap in the single-digit MBs that has created tx congestion and excessive fee competition (BCH fixed that, thankfully). The problem with cryptocurrency is simply that it’s attracting to frauds, and is dominated by fraud and get-rich-quick gambling/speculation.

It’s attractive to fraud for the same reasons why it’s attractive to people who take issue with legacy finance. Your “account” (wallet) can’t really be shut down or frozen, you can transact quickly and easily with only an internet connection and a phone regardless of borders or capital controls, and the currency itself can be audited and resists inflation. All those things continue to be true, but unfortunately the current largest, visible use case is fraud.

The original use case for Bitcoin was right in the title of the white paper: P2P electronic cash. Unfortunately, that hasn’t taken off, and some governments like the US have done their best to kill it. See the IRS guidance for Bitcoin taxes from 2013 which made it practically impossible to use as cash in a legally compliant way. That was the first, and clearest, regulation of cryptocurrency I’m aware of. All other currencies are treated differently. Only Bitcoin/cryptocurrency was singled out for particularly onerous tax treatment.

[tsimionescu]

> All other currencies are treated differently. Only Bitcoin/cryptocurrency was singled out for particularly onerous tax treatment.

Well, that's because Bitcoin is not a currency, by many reasonable definitions.

[freeAgent]

How is it not a currency? It is a medium of exchange, right? That is what its intention was, as laid out in the white paper.

[mrguyorama]

You can barter with anything you want, that doesn't make it a currency. In fact, bitcoin has a way harder path to being recognized as a currency explicitly because there is no army to enforce it as a currency. That means it can only really be a currency by consensus, and if walmart and kroger don't take it, good luck making people agree to it being a currency.

Bitcoin does not meet the desires laid out in the whitepaper, not even close. Bitcoin isn't even a currency by it's own standards.

[freeAgent]

Barter goods also serve a purpose other than as a medium of exchange. And Bitcoin is legal tender in El Salvador (not that I like El Salvador or their Bitcoin law), so it actually is a currency.

[bcrl]

At least with barter exchange tends to happen in person so you can figure out if you're being scammed before you hand over your goods. Bitcoin gives you the worst of all worlds by making the exchange completely impersonal while lacking the ability to look your counter-party in the eye. The two are most decidedly not the same.

[tsimionescu]

Gold and precious stones can also be mediums of exchange. That doesn't make them currency.

A currency has to be widely accepted as a medium of exchange, and it has to have a relatively stable value. Bitcoin fails bitterly at both of these. And experiments with bitcoin payments in the mainstream quickly failed (Steam, Tesla).

[freeAgent]

Your definition of a currency is incorrect. Many fiat currencies have experienced rapid devaluations (hyperinflation) while still being recognized as currencies. El Salvador has recognized Bitcoin as legal tender, so it also has at least some recognition as a currency. The IRS has not updated its guidance.