Author Topic: Why bitcoin will fail as money  (Read 7845 times)

flesh

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Re: Why bitcoin will fail as money
« Reply #20 on: January 04, 2017, 03:33:44 PM »


I see, so presumably china would have to put the hammer down, which I have no way to quantify.

For those of us in the USA or any other country with the desire, doesn't what I said still stand? If it promotes black markets and reduces taxes the govt could go after those that facilitate the transactions/any business directly or indirectly related to it and make it a criminal offense?


brendanb22

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Re: Why bitcoin will fail as money
« Reply #21 on: January 04, 2017, 05:10:40 PM »
Just be mindful that there are two types of blockchain network; non-permissioned (Bitcoin), and permissioned (most bank syndicates). The non-permissioned networks are too slow (10 minute mining) for high volume purposes, the miners are consolidating into cartels (independence issue), & it is not really scalable. Permissioned networks have none of these limitations, but are wholly private - and operate under a very different understanding of what 'trust' means (counterparties, software code, etc.); the major downside is a much less robust fault tolerance (excluding mixer and check node workarounds).   

Most Bitcoin wallet holders are not spending their coin, they are hoarding it. The argument is that there are a fixed total number of bitcoin, & over time less & less new coin is created; convince a small number of people that bitcoin is a safe store of value (ie: raise demand) and the price of that very limited quantity of it must increase - convince a lot of people, & you get another tulip mania. The kicker is that the existing design total of bitcoin could be changed at any time, simply by mutual consent; collapsing the bubble.

You may also want to look up the 3rd party oracle providers, before you go too far down the programing route.
Much of the basics needed to operate and run a blockchain application are already available via cloud providers. It's very basic, but enough for 'proof of concept' - and everyone has to start somewhere.

SD   

   

Great points by many here. A few comments. Over 2016, BTC unfortunately did not live up to the promise of forming a scalable payment network, with lower fees and faster transfer / confirmation times. Going into 2017, I doubt this will ever occur. However, with that being said BTC showed its immense value as an asset class that people can and have fleed to in times of trouble, almost like a digital gold. Just like gold, my bet is that people will flee to BTC in times of trouble, and leave (partially) in times that indicate otherwise. Ultimately another digital currency will emerge that is better suited for nimble, quick transactions and forms the decentralized payment network that so many are predicting (my bet is that it's through the Ethereum blockchain).

I'm skeptical of the argument that just because BTC is viewed as a store of value and effectively limited in supply, people will hoard it, drive a bubble and ultimately it's demise. That hasn't happened with gold and unlike tulips, BTC will have much greater and frictionless distribution.

BTC may not succeed as money, per se, but I wouldn't bet against it being here to stay and am confident in its appreciation in value.
« Last Edit: January 04, 2017, 05:13:00 PM by brendanb22 »

wachtwoord

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Re: Why bitcoin will fail as money
« Reply #22 on: January 05, 2017, 01:01:48 AM »

Great points by many here.

No I think this is the most terrible most far off topic on this forum. This topic lies exactly in the blind spot of most here.

At least  Aberhound got it and managed to identify what was most important here. Congrats man.
« Last Edit: January 05, 2017, 01:05:53 AM by wachtwoord »
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Hielko

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Re: Why bitcoin will fail as money
« Reply #23 on: January 05, 2017, 03:26:17 AM »
I think the main problem of bitcoin is that it's inherently inefficient. It's only secure when the computing power of the network is so big that at all times it's too expensive to launch an attack compared to what the potential reward is. Because of that I don't think the bitcoin network will ever be able to facilitate cheap transactions. That's the real problem IMO.

wachtwoord

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Re: Why bitcoin will fail as money
« Reply #24 on: January 05, 2017, 05:22:46 AM »
I think the main problem of bitcoin is that it's inherently inefficient. It's only secure when the computing power of the network is so big that at all times it's too expensive to launch an attack compared to what the potential reward is. Because of that I don't think the bitcoin network will ever be able to facilitate cheap transactions. That's the real problem IMO.

Completely true. Except that that's a problem. Bitcoin is (will be) for high value transactions only that require this sort of security. For lower value transactions other methods will be used (currect systems or alternative cryptos with a lower level of security).

This is why the whole block size debate is so stupid. Don't increase the blocksize as it will undermine the security of the network. An essential selling point beyond which it's not worth much. Luckily the people with actual financial skill int he game and most technical people in higher places in the informal organization seem to understand this (based on their actions, they are not screaming it off the rooftops).
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orthopa

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Re: Why bitcoin will fail as money
« Reply #25 on: January 05, 2017, 06:27:27 AM »
Just be mindful that there are two types of blockchain network; non-permissioned (Bitcoin), and permissioned (most bank syndicates). The non-permissioned networks are too slow (10 minute mining) for high volume purposes, the miners are consolidating into cartels (independence issue), & it is not really scalable. Permissioned networks have none of these limitations, but are wholly private - and operate under a very different understanding of what 'trust' means (counterparties, software code, etc.); the major downside is a much less robust fault tolerance (excluding mixer and check node workarounds).   

Most Bitcoin wallet holders are not spending their coin, they are hoarding it. The argument is that there are a fixed total number of bitcoin, & over time less & less new coin is created; convince a small number of people that bitcoin is a safe store of value (ie: raise demand) and the price of that very limited quantity of it must increase - convince a lot of people, & you get another tulip mania. The kicker is that the existing design total of bitcoin could be changed at any time, simply by mutual consent; collapsing the bubble.

You may also want to look up the 3rd party oracle providers, before you go too far down the programing route.
Much of the basics needed to operate and run a blockchain application are already available via cloud providers. It's very basic, but enough for 'proof of concept' - and everyone has to start somewhere.

SD   

   

Sharper I know a while back you noted a risk to Visa was block chain but it appears as if Visa has started to integrate blockchain technology into its network. Do you feel its still a threat?

orthopa

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Re: Why bitcoin will fail as money
« Reply #26 on: January 05, 2017, 06:29:52 AM »
From what I gather the momentum behind bitcoin recently has been govt cracking down on paper money such as China and India. My thought is that long term the most likely beneficiary of this is plastic IE, AXP, V and MA. Visa is currently pushing hard into India with the recent ban on low denomination bills.

orthopa

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Re: Why bitcoin will fail as money
« Reply #27 on: January 05, 2017, 07:00:51 AM »
Bitcoin down 20% this Am.  :o :o :o

wachtwoord

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Re: Why bitcoin will fail as money
« Reply #28 on: January 05, 2017, 07:47:03 AM »
Bitcoin down 20% this Am.  :o :o :o

That happened every time the previous ATH was being overtaken. Actually I consider this volatility low. GO check out some old charts. Likely back to today's prices in one or 2 days.
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NewbieD

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Re: Why bitcoin will fail as money
« Reply #29 on: January 06, 2017, 02:22:16 PM »
A comment on this :"because they won't be able to find them in sufficient quantities for everyday use."

Bitcoin is not like the coins you have in your pockets. You can divide them into very small parts. Someone here might now the exact number of decimals that can be handled, I just know it's many.

So when hoarding gives a value per bitcoin of a billion USD, you would still be able to pay the right amount for a beer.