[acdha]

Cryptocurrency is a speculative gamble, not an alternative financial system. There’s no path to real world adoption without better cost, performance, fraud control or customer service[1] but the changes needed to deliver negate the concept.

1. Not saying that banks are great here, but that better isn’t an impossibly high bar.

[happytiger]

Fiat currency is a speculative gamble, and controlled by a specious and small number of players.

You could have said the same thing about it the early financial system as well.

What you have is a developed ecosystem and a developing ecosystem, and you’re pointing to the developed ecosystem and saying the developing one doesn’t have all the things. Of course it doesn’t. It’s developing. And it’s doing it in spite of the existing financial system trying to damage or destroy it periodically.

Let’s not confuse the technology innovation we’re referring for the mature ecosystem of a graduated and dominant financial ecosystem.

[acdha]

> You could have said the same thing about it the early financial system as well.

Only if you have no understanding of what the words mean. For example, most cryptocurrencies are fiat currencies - just exceptionally weak ones. The reason why using USD isn’t a gamble is that it’s linked to a massive economy with guaranteed demand.

> Of course it doesn’t. It’s developing. And it’s doing it in spite of the existing financial system trying to damage or destroy it periodically.

Ah, yes, this part of the sales pitch was bound to come up. The flaws I described aren’t some sort of minor growing pains, they’re architectural. After 15 years and billions of dollars, not having a progress towards fixing them suggests that telling people to ignore them and buy in anyway is not the way you fix design defects.

[happytiger]

1) Sigh. These arguments are far too ideologically generated.

2) There are many “cryptos” and technologies. Crypto is not a homogeneous system. Fiats all suck: even ones I implemented as crypto or digital currencies or whatever terminology one would want to use.

3) I think you have it out for crypto. I’m not a hype person or a crypto advocate, but I like the idea of decentralized financial systems and believe we have had very little innovation in the space (and need more).

4) Technology waves take 20-40 years to reach maturity. Radio. Television. Internet. They all take a lot longer than people realize.

5) There has been plenty of progress. If you want to be closed to that progress and dig your feet in to defending the existing system, that’s fine. But the idea that there hasn’t been “progress in 15 years” is absurd reasoning.

[acdha]

The early internet or web are often used in cryptocurrency sales pitches to excuse the lack of demand, but the comparison falls apart as soon as you learn any of the history. When the internet dawned, computers were incredibly expensive and slow and networks were even worse – but people went to great lengths to get online because it offered something immediately of value which was unrelated to the business of making or selling internet access. By the 1980s, people were paying for connectivity even at telephone monopoly rates because there were things like email, Usenet, IRC, file transfers, etc. which made your life better. When the first TV station opened in the 1920s, ordinary people went to buy sets because it gave them something they’d never had before.

In contrast, Bitcoin has been available globally since it launched and it did so in an era where much of the human population had everything they needed to use it - very much unlike the early internet, or radio, or TV. Tons of speculative money poured in hoping to find demand … but nobody really cares about it because for most it’s not better than what they had before. It isn’t cheaper, faster, or safer and it is much less convenient to use, so even the few people who hold it don’t. The few businesses which accepted it have generally reported very little consumer interest and many have stopped. That just isn’t like the demand curve for those other technologies: as soon as Marconi had his first radio telegraph demo, he had businesses and governments interested and the primary limit was the difficulty of making the technology available, not lack of public interest – anyone could see how it could let them do something they couldn’t do before.

That last part is key: I’m all for changes to the financial system, I’ve followed this space since David Chaum was writing in the 90s, but you have to base it on an advantage over the status quo. The problem is not just that they picked an unsuitable data structure but also that it became the community identity, preventing attempts to learn from the mistake.