Well, this is baked into the limited number of transactions per second. At 10 transactions per second max, the usefulness as a day to day currency is inversely proportional to its popularity. Our favorite joke coin, DogeCoin, does 10 times better at 100/sec with faster blocks, but it’s still too slow. Visa is like 2000-100,000 transactions per second depending on if you use average or theoretical maximum. Anything which wants to be usable as a day to day currency of the future should shoot for either niche uses or should shoot for 10,000-100,000 transactions per second as a minimum. 1 million to be on the safe side.
Otherwise, the more popular it is, the less usable it is as a real currency. (As the transaction fees get bid up to higher levels if transaction throughput is limited.)
(Oh, and without a custodian, the Lightning network sucks as a bandaid for this. Maybe something like that will someday be usable but it sucks right now.... and it’s not obvious how these problems will be solved in a way that doesn’t introduce a whole bunch more game theory and/or technical/resource/usability constraints.)
It's not just the speed, it's also the fees. You ideally want something that has really minimal fees, so that you can send $.0001 without paying 10x that in fees. The ability to process micro-transactions cheaply and at scale could actually have the transforming affect that bitcoin was originally after.
Pretty much. If bitcoin (or any cypto) can be a stable currency, I would jump on it. Otherwise, it is just a gambling tool at the moment. I don't gamble with things I don't understand (unless I am in Vegas and willing to lose a few bucks for fun). So it is a hard pass for me at the moment.
There are stablecoins on top of Ethereum. Some are backed by off-chain bank accounts, others are based on price feeds and on-chain derivatives over ETH.
I'm finding it to be used a hell of a lot more in countries with precarious economies like where I've been spending most of my adult life. In brazil especially I've seen a lot of facilitation of adoption of crypto. I know because I've developed the systems myself, from everything to paying your phone bill to bus tickets, although bitcoin is hardly the only or best option for these things
Unfortunately most "investors" aka gamblers aren't pushing coins with the best tech, but rather the coins that are most deflationary (and using the tech as sexy marketing to hook people in). Unfortunately deflationary coins just encourages everyone to never spend on actual stuff, simply hold onto it till they can sell it off to some other investor.
People are looking forward to an economy that revolves around a deflationary/limited-supply currency like Bitcoin so, for example, excess housing supply doesn't get wasted for the sake of speculation/inflation-hedging. People looking to protect wealth would liquidate as many assets as possible for Bitcoin to achieve the maximum passive return and not hold underutilized assets on their balance sheet.
Have 3 houses and only live in 1? The fact that your houses are losing value in Bitcoin terms will push you to sell if wealth preservation is the goal.
I spent .2btc to buy a $50 domain name at one point around 2013, that I only used for a year or something. Woooops. But hey, I figured, the future of money, let's do it! Oh well.
I still don't understand this mindset of Bitcoin becoming the future of money. It isn't. It never was meant to be, and it never advertised itself as such.
Bitcoin solves the issue of trust. Bitocin itself will never work as a currency that governments can rely.
First reason for that is that governments want control over their money. There has to be a central authority for multiple reasons. Banks need bailing out? As much as I'm against bail-out, sometimes the damage of not bailing them can be far greater than not bailing them out. Need the £85k insurance that your money is safe in any bank?
Governments need control of their own currency. Bitcoin does not provide that.
I see Bitcoin more as a commodity. Something like gold, and just like gold, the supply must be finite. This is something Bitcoin provides.
There is nothing stopping a government from building their own cryptocurrency that they'll have control over, but that gets rid of the main selling point of Bitcoin, that is that you don't have to trust individuals (for the most part anyway).
> It never was meant to be, and it never advertised itself as such.
Totally untrue. Read Satoshi's emails--it was in the title of his first email about Bitcoin, and the first sentence in the whitepaper! The current bitcoin core devs took over from Gavin who also shared the "cash" vision. They booted everyone with plans for making it cash, and censored or blocked everyone in the bitcoin subreddit who said anything about cash or large block sizes.
>A purely peer-to-peer version of electronic cash would allow online payments to be sent directly from one party to another without going through a financial institution
Conclusion:
>We have proposed a system for electronic transactions without relying on trust.
So that's exactly what I said. Bitcoin solves the issue of trust. I do not have to trust that someone really has the money they say do, because Bitcoin will refuse to allow them to spend such money.
It really won't. It will make money obsolete if/when governments are okay with not having control of their currency. No sane government will do that, especially not the likes of the UK, US and EU.
Bitcoin is an interesting technology that was adopted by a bunch of people who spouse a crazy ideology. They believe that all financial problems we have are due to the specific currency used, namely paper-based currency controlled by a central bank. While I don't agree with all decisions made by the American currency creators, it is crazy to think that all financial issues would be solved by moving tomorrow to gold or bitcoins. This belief system is what made bitcoin popular along a certain segment of the population.
If bitcoin truly solved the issue of trust there would be no need for all of the various intermediaries who have popped up to insert themselves into the transactions. Also, there wouldn’t be nearly as many scams.
In reality though, those intermediaries make use of Bitcoin easier. They are not a requirement. I can buy Bitcoin from individuals directly providing I can find one who wants something to trade for it and I have a way of delivering the goods. I can also send my Bitcoins to individuals without any intermediary. All I need is the official Bitcoin application on my computer. No need for any intermediaries.
Seems to be unpopular but I agree.
If Bitcoin “wins” then what will it be denominated in? Will we go to the barter system? I just can’t see it replacing the USD. (Been in crypto since 2012)
It’s not going anywhere as a protocol, but as a speculative asset, its price could fall dramatically if it were to be abandoned.
We should hope that happens because it’s holding up progress. It’s like people are flying around in replicas of the Wright brothers’ first airplane. Sure, put it in a museum but don’t fly the thing.
the article actually says that it is a great tool for brave traders. Especially with the crazy up and down waves.
the article does not say bitcoin will disappear.
the article just claims that bitcoin is not the future of money, and makes some reasonable observations regarding this. especially that it is so easily manipulated by billionaires.
especially that it is so easily manipulated by billionaires.
Ironically the billionaire in question is Elon Musk, who's company bought $1.5 billion of BTC as a treasury reserve asset. Tesla sold 10% of its BTC after it appreciated in price to make it appear to be profitable, even though Tesla made more money selling BTC than it did from selling cars.
The price corrected because said billionaire tweeted stale energy FUD because he wants to make his company--who's cars plug-in to a grid powered by fossil fuels and who's batteries are made from rare earth minerals from 3rd world countries--appear to care about the environment. And make Tesla look like an appropriate recipient of energy tax credits.
It didn't help that his tweet coincided with the news that China is banning cryptocurrency for like the 10th time and the fed having to admit that with the highly manipulated CPI being something like 4.6% that inflation might actually be a thing.
So you keep on thinking Elon or any other billionaire can manipulate the price of BTC at his or her whim.
I keep running into the issue that blockchain seems to have very few legal uses that a centralized database isn't better for. Remittances seems to be the best use case with actual usage. But that doesn't really need anything. Every thing else seems like tech demos with no real world application or ways to do illegal things more efficiently.
Is there a use case someone really likes that blockchain seems like the best tool for the job?
I don't know that Bitcoin-as-in-BTC will be 'the future of money' by then, but I would bet that money will continue to look more like Bitcoin than it does like today's dollar.
Like it or not, and I know a lot of you don't, cryptocurrencies aren't censorable (governments can't stop you from sending or receiving them), are hard to seize, and can't just be inflated away from storing value. These are attractive properties to a lot of people.
They are also volatile and slow energy-hogs, for the most part. The question is if those problems can be mitigated, and that strikes me as easier than fixing the bugs in government fiat money which I mentioned above.
BTC is a first mover, and has a lot of flaws relative to later entrants. It also has the bulk of the mind-share and stores the most value (for now). If they can add shielded transactions, and Lightning Network pays out, it can still win.
> but I would bet that money will continue to look more like Bitcoin than it does like today's dollar.
so not Bitcoin. Thats the authors point.
> Like it or not, and I know a lot of you don't, cryptocurrencies aren't censorable (governments can't stop you from sending or receiving them), are hard to seize, and can't just be inflated away from storing value. These are attractive properties to a lot of people.
I agree. It is however getting harder and harder to get BTC without disclosing the full identity. Here in the Netherlands at least its super hard. This does indeed make certain use cases much more harder. It's not outright banning but I bet that more and more restrictions will come around it that only some smart asses will be able to bypass through (semi-)illegal moves.
If PoS works out at scale then PoW chains are probably toast. I don't know if that will happen, though, there's a self-licking lollipop aspect to the whole concept which has never set right with me.
I'm glad we're going to get to find out though. I think the entire discourse around energy use is misguided, but there's no question that using 2000 times less energy and equipment is both better for the environment and economically superior ceteris paribus.
The complete auditability of BTC is not to its credit, but Bitcoin is conservative, not completely static. Big blocks didn't get implemented (I agree with this decision) but Segwit 2x did. If BTC added ZK-SNARK shielded transactions, that would be a big win for privacy and anonymity.
That could easily happen in the next ten years. The winning network is more of a game theory problem than a technological one; we'll just have to wait, take such bets as we're comfortable taking, and see what happens.
Netherlands have one of the lowest capital gain taxes for Bitcoin, so there isn't any real need to hide it there.
I'm in Hungary where people preferred to move to other countries (like Malta at 0%) to realize their capital gains than to pay 28%, but finally the government decreases it to 15%, which is a fair deal between a country and its citisens.
Go to the git repo on GitHub, check out the code, go to the first commit, and see how many times the word “Poker” is in the code base.
Bitcoin was simply designed to be an in game currency for a poker game, but the narrative has been co-opted by so many people that it’s become something else.
Look at this batch of function handlers[1]. Why does it have functions named "Deal Hand" "Fold" "Call" "Leave Table" etc... ?
This thing was clearly a poker game that was co-opted by a ton of narrative changes into what it is now. I'm not saying that the co-opting and narrative changes are bad because I think the underlying function of trestles digital uniqueness is brilliant, but looking at the code tells a different story than what a lot of people would have you believe.
I am not a huge Bitcoin fan, and don't really have a strong opinion on it. It has some real problems, such as its energy usage, and slow transactions. All the technical complaints aside, which are legitimate, these news outlets write some of the worst pieces on Bitcoin. They are hopelessly biased in many cases and there are a lot of Bitcoin bears that eagerly celebrate its demise or anything negative around it. Sort of like all the folks that get giddy when Tesla stumbles. I think much more unbiased commentary I read recently was Bridgewater / Dalio's analysis: https://www.bridgewater.com/research-and-insights/our-though...
It is a very balanced take and Ray lays out the risks very clearly without all the breathlessness around volatility, etc.
Readit News
I remember Bitcoin was getting a wider adoption for payment back in 2013ish. I paid for my domain from namecheap in Bitcoin back then.
But it then blew up and everyone treated it more as a store of value and it made all the shops stop accepting it as payment due to its volatility.
Otherwise, the more popular it is, the less usable it is as a real currency. (As the transaction fees get bid up to higher levels if transaction throughput is limited.)
(Oh, and without a custodian, the Lightning network sucks as a bandaid for this. Maybe something like that will someday be usable but it sucks right now.... and it’s not obvious how these problems will be solved in a way that doesn’t introduce a whole bunch more game theory and/or technical/resource/usability constraints.)
I believe we have now reached the point where more time has passed since the Lightning whitepaper than between the Bitcoin and Lightning whitepapers.
This + micropayments, (i.e. negligible fees so it makes sense to send 0.01USD to someone, every day, or w/e.
Have 3 houses and only live in 1? The fact that your houses are losing value in Bitcoin terms will push you to sell if wealth preservation is the goal.
I hope he hung onto it!
One whose value fluctuates wildly over time, one that is lost if you lose your keys, one that is susceptible to a hacker stealing your keys, etc.
Bitcoin solves the issue of trust. Bitocin itself will never work as a currency that governments can rely.
First reason for that is that governments want control over their money. There has to be a central authority for multiple reasons. Banks need bailing out? As much as I'm against bail-out, sometimes the damage of not bailing them can be far greater than not bailing them out. Need the £85k insurance that your money is safe in any bank?
Governments need control of their own currency. Bitcoin does not provide that.
I see Bitcoin more as a commodity. Something like gold, and just like gold, the supply must be finite. This is something Bitcoin provides.
There is nothing stopping a government from building their own cryptocurrency that they'll have control over, but that gets rid of the main selling point of Bitcoin, that is that you don't have to trust individuals (for the most part anyway).
Totally untrue. Read Satoshi's emails--it was in the title of his first email about Bitcoin, and the first sentence in the whitepaper! The current bitcoin core devs took over from Gavin who also shared the "cash" vision. They booted everyone with plans for making it cash, and censored or blocked everyone in the bitcoin subreddit who said anything about cash or large block sizes.
https://www.metzdowd.com/pipermail/cryptography/2008-October...
Abstract:
>A purely peer-to-peer version of electronic cash would allow online payments to be sent directly from one party to another without going through a financial institution
Conclusion:
>We have proposed a system for electronic transactions without relying on trust.
[0]: https://www.coinbase.com/bitcoin.pdf
Like nearly all mainstream articles, this one is quite shortsighted.
It’s like saying the TCP/IP protocol has failed in the early 90s when there were many competitors that were more popular.
I’m old enough to remember when you had to install a TCP/IP as an add-on to Mac OS and Windows.
Let’s look back at this article when Fidelity’s bitcoin ETF is approved later this year…
We should hope that happens because it’s holding up progress. It’s like people are flying around in replicas of the Wright brothers’ first airplane. Sure, put it in a museum but don’t fly the thing.
the article does not say bitcoin will disappear.
the article just claims that bitcoin is not the future of money, and makes some reasonable observations regarding this. especially that it is so easily manipulated by billionaires.
so I think your point is m00t.
Ironically the billionaire in question is Elon Musk, who's company bought $1.5 billion of BTC as a treasury reserve asset. Tesla sold 10% of its BTC after it appreciated in price to make it appear to be profitable, even though Tesla made more money selling BTC than it did from selling cars.
The price corrected because said billionaire tweeted stale energy FUD because he wants to make his company--who's cars plug-in to a grid powered by fossil fuels and who's batteries are made from rare earth minerals from 3rd world countries--appear to care about the environment. And make Tesla look like an appropriate recipient of energy tax credits.
It didn't help that his tweet coincided with the news that China is banning cryptocurrency for like the 10th time and the fed having to admit that with the highly manipulated CPI being something like 4.6% that inflation might actually be a thing.
So you keep on thinking Elon or any other billionaire can manipulate the price of BTC at his or her whim.
Is there a use case someone really likes that blockchain seems like the best tool for the job?
Let's check back in ten years.
I don't know that Bitcoin-as-in-BTC will be 'the future of money' by then, but I would bet that money will continue to look more like Bitcoin than it does like today's dollar.
Like it or not, and I know a lot of you don't, cryptocurrencies aren't censorable (governments can't stop you from sending or receiving them), are hard to seize, and can't just be inflated away from storing value. These are attractive properties to a lot of people.
They are also volatile and slow energy-hogs, for the most part. The question is if those problems can be mitigated, and that strikes me as easier than fixing the bugs in government fiat money which I mentioned above.
BTC is a first mover, and has a lot of flaws relative to later entrants. It also has the bulk of the mind-share and stores the most value (for now). If they can add shielded transactions, and Lightning Network pays out, it can still win.
so not Bitcoin. Thats the authors point.
> Like it or not, and I know a lot of you don't, cryptocurrencies aren't censorable (governments can't stop you from sending or receiving them), are hard to seize, and can't just be inflated away from storing value. These are attractive properties to a lot of people.
I agree. It is however getting harder and harder to get BTC without disclosing the full identity. Here in the Netherlands at least its super hard. This does indeed make certain use cases much more harder. It's not outright banning but I bet that more and more restrictions will come around it that only some smart asses will be able to bypass through (semi-)illegal moves.
So not necessarily Bitcoin, is my point.
If PoS works out at scale then PoW chains are probably toast. I don't know if that will happen, though, there's a self-licking lollipop aspect to the whole concept which has never set right with me.
I'm glad we're going to get to find out though. I think the entire discourse around energy use is misguided, but there's no question that using 2000 times less energy and equipment is both better for the environment and economically superior ceteris paribus.
The complete auditability of BTC is not to its credit, but Bitcoin is conservative, not completely static. Big blocks didn't get implemented (I agree with this decision) but Segwit 2x did. If BTC added ZK-SNARK shielded transactions, that would be a big win for privacy and anonymity.
That could easily happen in the next ten years. The winning network is more of a game theory problem than a technological one; we'll just have to wait, take such bets as we're comfortable taking, and see what happens.
I'm in Hungary where people preferred to move to other countries (like Malta at 0%) to realize their capital gains than to pay 28%, but finally the government decreases it to 15%, which is a fair deal between a country and its citisens.
Bitcoin was simply designed to be an in game currency for a poker game, but the narrative has been co-opted by so many people that it’s become something else.
In the original-bitcoin repo I've found CPokerLobbyDialogBase class [2]. So I can partially confirm your theory.
According to bitcoin.com in the early stages of the project there was an idea for implementing on-chain poker game [3].
> Bitcoin was simply designed to be an in game currency for a poker game
Could you back this theory with some evidence?
[1]: https://github.com/bitcoin/bitcoin/commit/4405b78d6059e536c3...
[2]: https://github.com/trottier/original-bitcoin/blob/92ee8d9a99...
[3]: https://news.bitcoin.com/satoshis-pre-release-bitcoin-code-c...
This thing was clearly a poker game that was co-opted by a ton of narrative changes into what it is now. I'm not saying that the co-opting and narrative changes are bad because I think the underlying function of trestles digital uniqueness is brilliant, but looking at the code tells a different story than what a lot of people would have you believe.
[1] - https://github.com/bitcoin/bitcoin/blob/4405b78d6059e536c369...
Dead Comment
It is a very balanced take and Ray lays out the risks very clearly without all the breathlessness around volatility, etc.
It's biased because it's an opinion piece, but do you have an actual counter to that main concern?
Bitcoin needs to die. The useful parts can get incorporated into cryptocurrencies that are actually used as currencies and not for hoarding.