Bitcoin Surpasses PayPal in Transaction Volume?(coinowl.com)
coinowl.com
Bitcoin Surpasses PayPal in Transaction Volume?
http://coinowl.com/bitcoin-surpasses-paypal-in-transaction-volume/
11 comments
The Bitcoin fantasy is spamming up HN so bad lately. I think soon I will have to ditch for r/programming.
All their stats are wild distortions based on made up numbers. Until it is in widespread adoption as A CURRENCY, these stats all mean nothing. They can speculate the price up to whatever they want and trade at that price, it doesn't mean its worth that much.
Only a major cashout or actual usage will provide some metric of Bitcoin's value and I think even then it will still be hard to peg. I hope it's dead before it gets to that point because the ecosystem as it stands now is very dangerous. It's just not sound theory for currency stabilization... it's good for a get-rich-quick fantasy, little more.
All their stats are wild distortions based on made up numbers. Until it is in widespread adoption as A CURRENCY, these stats all mean nothing. They can speculate the price up to whatever they want and trade at that price, it doesn't mean its worth that much.
Only a major cashout or actual usage will provide some metric of Bitcoin's value and I think even then it will still be hard to peg. I hope it's dead before it gets to that point because the ecosystem as it stands now is very dangerous. It's just not sound theory for currency stabilization... it's good for a get-rich-quick fantasy, little more.
> the ecosystem as it stands now is very dangerous
I do agree that the Paypal number is a load of bullshit - because Paypal transactions are mostly between merchants and consumers, while Bitcoin transactions are often between users and themselves. That one $150 million transaction, which was likely someone moving stuff into their own wallet, nearly doubled the "transaction volume".
However, I really think you're being overly negative.
I do agree that the Paypal number is a load of bullshit - because Paypal transactions are mostly between merchants and consumers, while Bitcoin transactions are often between users and themselves. That one $150 million transaction, which was likely someone moving stuff into their own wallet, nearly doubled the "transaction volume".
However, I really think you're being overly negative.
No apologies, Bitcoin can rot.
We as a society have the unique opportunity to reverse a pyramid scheme & foot black marketers with the bill, but instead everyone is just buying up more because "up up up and awayyyy it goes!!!". Because computers. Because cryptoooo. Because whatever-BS-notion-you-use-to-convince-yourself-that-the-ecosystem-is-so-valuable-it-has-an-insane-amount-of-subjective-worth-and-for-some-reason-subjectivity-is-now-esteemed. Because Litecoin isn't as hip.
Instead, people are contributing massive amounts of money to the ecosystem where black marketers & the founders already have the upper hand (you're buying that one Bitcoin for $600 or w/e made up price it currently has been bid to, as opposed to their hoards).
Even with your enlightened knowledge about "subjective value" you should realize that once you're in the same medium, their much bigger BTC# means a much bigger slice of the pie. But Bitcoiners believe the pie is infinite, right?
We as a society have the unique opportunity to reverse a pyramid scheme & foot black marketers with the bill, but instead everyone is just buying up more because "up up up and awayyyy it goes!!!". Because computers. Because cryptoooo. Because whatever-BS-notion-you-use-to-convince-yourself-that-the-ecosystem-is-so-valuable-it-has-an-insane-amount-of-subjective-worth-and-for-some-reason-subjectivity-is-now-esteemed. Because Litecoin isn't as hip.
Instead, people are contributing massive amounts of money to the ecosystem where black marketers & the founders already have the upper hand (you're buying that one Bitcoin for $600 or w/e made up price it currently has been bid to, as opposed to their hoards).
Even with your enlightened knowledge about "subjective value" you should realize that once you're in the same medium, their much bigger BTC# means a much bigger slice of the pie. But Bitcoiners believe the pie is infinite, right?
Erm, in order to cash out, founders/early adopters have to sell a slice of the pie. Furthermore, anyone with a lot of BTC is incentivized to cash out slowly in order to keep the price up.
The Man has the upper hand, as does any weakness in the protocol. Either one, especially the latter, has the capacity to destroy bitcoin overnight. I'm not too worried about "Nakamoto" devaluing bitcoin (though I do wonder what "Nakamoto" will do with that much money/power. A billion dollars can do a lot of good or a lot of ill.).
The Man has the upper hand, as does any weakness in the protocol. Either one, especially the latter, has the capacity to destroy bitcoin overnight. I'm not too worried about "Nakamoto" devaluing bitcoin (though I do wonder what "Nakamoto" will do with that much money/power. A billion dollars can do a lot of good or a lot of ill.).
i'm not convinced the currency can survive since it's really blind faith that is holding it up, so i'm partially just examining an end-game scenario.
If BTC starts to plummet (which will likely happen at some point in an ecosystem so volatile) people may literally lose their investment entirely. Why? No one will want to sell assets they paid $600 for for $10, they'd rather believe it is going to climb back up. Then even if they decide "fuckit it's over its just a currency now I guess I'll sell" nobody will want to buy. They'll instead buy a cryptocurrency that has a better theoretical mechanism for stability and can actually be used in practice (unless people are so dense that they want to restart the speculation cycle).
The ecosystem could just freeze and there is no way to force people to continue to buy into it (I once read an analysis by an economist in which he mentioned that black marketers may end up having to intimidate constituents to buy into it in order to keep it afloat).
Basically this all kindof boils down to a Game Theory issue where everyone wants to sneak their money out at the proper time in order to maximize their cashout before the system fails or the market corrects (I'm not sure it ever will based on the nonsense principles used to design the mining rules / currency cap).
But not everyone can cashout at the amount they paid in. In fact, as I point out in my endgame scenario, many may not even be able to cash out at all. It's a mass vehicle for redistributing wealth and the volatility makes it useless as a currency. It may take a while to fail but when it does a lot of people will get screwed.
Think about it. The guys with those hoards are probably slowly cashing out 10 BTC now & then to put 5k in the bank, knowing full well that these crazy prices can't hold forever. They are a godsend for the scheme's designers who printed all the free money for themselves. For blackmarketers & gambling sites its more dangerous because they may end up with a wallet full of worthless coins.
When people say "Don't invest more than you can afford to lose" I like to internally translate that to "Don't invest more than you'd be comfortable with having a criminal potentially steal from you".
And then good luck trying to get the US Gov to bail you out, lol. They are looking at Bitcoin totally amorally to understand it. They couldn't give a rats ass about the investors. Amway is legal, after all. :D
If BTC starts to plummet (which will likely happen at some point in an ecosystem so volatile) people may literally lose their investment entirely. Why? No one will want to sell assets they paid $600 for for $10, they'd rather believe it is going to climb back up. Then even if they decide "fuckit it's over its just a currency now I guess I'll sell" nobody will want to buy. They'll instead buy a cryptocurrency that has a better theoretical mechanism for stability and can actually be used in practice (unless people are so dense that they want to restart the speculation cycle).
The ecosystem could just freeze and there is no way to force people to continue to buy into it (I once read an analysis by an economist in which he mentioned that black marketers may end up having to intimidate constituents to buy into it in order to keep it afloat).
Basically this all kindof boils down to a Game Theory issue where everyone wants to sneak their money out at the proper time in order to maximize their cashout before the system fails or the market corrects (I'm not sure it ever will based on the nonsense principles used to design the mining rules / currency cap).
But not everyone can cashout at the amount they paid in. In fact, as I point out in my endgame scenario, many may not even be able to cash out at all. It's a mass vehicle for redistributing wealth and the volatility makes it useless as a currency. It may take a while to fail but when it does a lot of people will get screwed.
Think about it. The guys with those hoards are probably slowly cashing out 10 BTC now & then to put 5k in the bank, knowing full well that these crazy prices can't hold forever. They are a godsend for the scheme's designers who printed all the free money for themselves. For blackmarketers & gambling sites its more dangerous because they may end up with a wallet full of worthless coins.
When people say "Don't invest more than you can afford to lose" I like to internally translate that to "Don't invest more than you'd be comfortable with having a criminal potentially steal from you".
And then good luck trying to get the US Gov to bail you out, lol. They are looking at Bitcoin totally amorally to understand it. They couldn't give a rats ass about the investors. Amway is legal, after all. :D
There is nothing unique about Bitcoin's jump from any other asset price bubble other than possibly there is little leverage involved (30:1 leverage at investment banks during 2008.)
I have nothing against Bitcoin. The concept of programmable currency is great. To use the word investment here is a mistake. Buying bitcoin for the purpose of holding is a speculation that the price will continue rising.
I have nothing against Bitcoin. The concept of programmable currency is great. To use the word investment here is a mistake. Buying bitcoin for the purpose of holding is a speculation that the price will continue rising.
You sound frightfully bitter about Bitcoin in this and your other recent posts. Bitcoin really is a remarkable feat of technical engineering and design. We're living through the adoption and growth of the world's first significant cryptocurrency. We never got flying cars but this is what the future should feel like. Bitcoin might very well crash and burn but cryptocurrencies here to stay.
If you can't marvel or at the very least appreciate such impressive new technologies this might indeed not be the place for you.
If you can't marvel or at the very least appreciate such impressive new technologies this might indeed not be the place for you.
Sure the technology is great. Happy?
But appreciating the technological wonder of Bitcoin is so double-edged. It's like witnessing the advent of fire but seeing that that the first thing people do with it is to burn down each others houses.
The only reason I've bothered with these discussions is because I think it's interesting and happen to be present to watch its usefulness get perverted. I'm trying to mentally divorce it from the scheme aspect and figure out a way in which it might actually work. Part of that is acknowledging the flaws in the current system & understanding why proponents believe they're actually a boon (cuz from what I've gathered through these discussions Bitcoiners won't admit its anything less than perfect). Is it really theoretically sound or is it just hype? If you go through my arguments a lot of the discussions begin with people defending Bitcoin but ending with why they think it's a viable trading market. But they try to blind people of those intentions at first giving some buzzword speech about the perfection of this technological marvel.
Why should we respect a scheme just because it employs clever technology? I think this is the biggest mistake in the tech community, we love the means & don't care about the end. Or why is the scheme subject to any less scrutiny than the code? In the case of a new currency I would say the dispersement plan and market stabilization tactics are perhaps an even more important technologies than transfer/storage methods.
Plus the buzz around Bitcoin isn't people marvelling at the tech, it's just $$ sign linkbait. If the discussions were instead about how to implement a proper cryptocurrency, I'd be much more intrigued.
It probably seems like I'm bitter but it's actually part of the struggle to understand what this is all about. Somebody needs to call bullshit now & then. It's like having a tech discussion with too many metaphors instead of "Let's go from A to B intelligently" tech plans/specs. I feel like a lot of the Bitcoiners I've argued with obfuscate the logic on purpose & use a lot of concepts borrowed from Wall Street trading but not proven to be in play. Bitcoin is not a stock. But they discuss it like a stock when it's convenient, at other times they deny.
I've learned a lot through these arguments but yeah it's getting boring. Nobody wants to implement a proper cryptocurrency. I have an idea for one but I doubt I'll bother other than a blog post because I don't think the shadow Wall Street is the place for me
And yes HN is probably not the place for me either. It's becoming more like a money/business forum for non-technical startup types. They have some good tech articles now and then but I'm sure there is a more focused forum elsewhere.
But appreciating the technological wonder of Bitcoin is so double-edged. It's like witnessing the advent of fire but seeing that that the first thing people do with it is to burn down each others houses.
The only reason I've bothered with these discussions is because I think it's interesting and happen to be present to watch its usefulness get perverted. I'm trying to mentally divorce it from the scheme aspect and figure out a way in which it might actually work. Part of that is acknowledging the flaws in the current system & understanding why proponents believe they're actually a boon (cuz from what I've gathered through these discussions Bitcoiners won't admit its anything less than perfect). Is it really theoretically sound or is it just hype? If you go through my arguments a lot of the discussions begin with people defending Bitcoin but ending with why they think it's a viable trading market. But they try to blind people of those intentions at first giving some buzzword speech about the perfection of this technological marvel.
Why should we respect a scheme just because it employs clever technology? I think this is the biggest mistake in the tech community, we love the means & don't care about the end. Or why is the scheme subject to any less scrutiny than the code? In the case of a new currency I would say the dispersement plan and market stabilization tactics are perhaps an even more important technologies than transfer/storage methods.
Plus the buzz around Bitcoin isn't people marvelling at the tech, it's just $$ sign linkbait. If the discussions were instead about how to implement a proper cryptocurrency, I'd be much more intrigued.
It probably seems like I'm bitter but it's actually part of the struggle to understand what this is all about. Somebody needs to call bullshit now & then. It's like having a tech discussion with too many metaphors instead of "Let's go from A to B intelligently" tech plans/specs. I feel like a lot of the Bitcoiners I've argued with obfuscate the logic on purpose & use a lot of concepts borrowed from Wall Street trading but not proven to be in play. Bitcoin is not a stock. But they discuss it like a stock when it's convenient, at other times they deny.
I've learned a lot through these arguments but yeah it's getting boring. Nobody wants to implement a proper cryptocurrency. I have an idea for one but I doubt I'll bother other than a blog post because I don't think the shadow Wall Street is the place for me
And yes HN is probably not the place for me either. It's becoming more like a money/business forum for non-technical startup types. They have some good tech articles now and then but I'm sure there is a more focused forum elsewhere.
There is no "they." Bitcoin tends to attract genius (Satoshi, Gavin) and a bunch of hippy losers. I can hardly stand /r/bitcoin, for instance.
heh just because there is no official backing organization doesn't mean that there isn't a contingency with an interest in this playing out. In fact.... well all those who have money invested automatically fall into that camp.
I feel you about the split in personalities though, ugh...
I feel you about the split in personalities though, ugh...
80,000 are only transactions that are recorded in the blockchain, it doesn't take into account transactions that go through Bitpay, Coinbase, gambling sites, the Reddit bitcoin bot, etc.
By definition, only transactions handled by the blockchain ARE bitcoin transactions, everything else is just secondary shuffling and would apply to any network that we would be comparing.
Coinometrics provide no information on the source of their Bitcoin data. They quote "a metric calculating the average daily transaction volume on the Bitcoin protocol in US Dollars"
Of the things you list, only Bitpay and Coinbase offer merchant services directly comparable to PayPal. If you have numbers for those, that'd be great. I'm keen to find quality metrics.
Of the things you list, only Bitpay and Coinbase offer merchant services directly comparable to PayPal. If you have numbers for those, that'd be great. I'm keen to find quality metrics.
If i got a million dollar bill and take it out a wallet in my right pocket in put it in a wallet in my left pocket (and vice versa) every 4 minutes. Would i myself be bigger than paypal?
That's how these things are calculated. It's nonsense, but it's the best we can do, or something. It's the same with GDP figures. But no one seems to be able to find better metrics to use...
One critical difference between PayPal and bitcoin here. PayPal is not treated as a currency to be traded against other currencies. I suspect that the vast majority of bitcoin transactions are currently just trades to/from USD.
Bitcoin trades happen on exchanges, off the blockchain. Bitcoin "transactions" are bitcoin payments going from one address to another, not trades.
This was just because of that single $147MM transaction yesterday. Of course it's great because this shows bitcoin can sustain a small number of high volume transactions.
Unfortunately one of the biggest challenges the bitcoin network is facing right now is getting smaller transactions confirmed faster. This issue will need to get solved and get solved sooner rather than later if bitcoin wants to be a competitor to VISA or MasterCard.
Maybe more HNers should take a look at the core: https://github.com/bitcoin/bitcoin
Unfortunately one of the biggest challenges the bitcoin network is facing right now is getting smaller transactions confirmed faster. This issue will need to get solved and get solved sooner rather than later if bitcoin wants to be a competitor to VISA or MasterCard.
Maybe more HNers should take a look at the core: https://github.com/bitcoin/bitcoin
This is an argument not so different from those often given regarding 'linux on the desktop'. Bitcoin doesn't want anything. It's an idea, not a company.
If the protocol is effective, it will thrive in its own right. If it doesn't, something else will appear in its place. The designer(s) of Bitcoin could have favored short confirmation times, but they didn't. Plenty of companies are working on solutions that effectively yield shorter confirmation times for merchants.
If I want to buy a car with BTC, I'll be happy to wait five minutes to ensure the transaction goes through. It's a lot faster than going to the bank for a cashier's check.
If the protocol is effective, it will thrive in its own right. If it doesn't, something else will appear in its place. The designer(s) of Bitcoin could have favored short confirmation times, but they didn't. Plenty of companies are working on solutions that effectively yield shorter confirmation times for merchants.
If I want to buy a car with BTC, I'll be happy to wait five minutes to ensure the transaction goes through. It's a lot faster than going to the bank for a cashier's check.
> The designer(s) of Bitcoin could have favored short confirmation times, but they didn't.
Shorter confirmation times do not help with anything, because the system is based on proof-of-work. The idea is the longer you wait for the network to compute things, the more solidified your transaction becomes.
A coin network that has a shorter block duration (like Litecoin with 2.5 minutes instead of 10) doesn't make any difference because what you really want to wait for to ensure you got your coins is "time spent computing", not "number of blocks computed".
Bitcoins (and any other cryptocurrencies) can never have secure real-time transactions as long as they rely on the proof-of-work network.
Shorter confirmation times do not help with anything, because the system is based on proof-of-work. The idea is the longer you wait for the network to compute things, the more solidified your transaction becomes.
A coin network that has a shorter block duration (like Litecoin with 2.5 minutes instead of 10) doesn't make any difference because what you really want to wait for to ensure you got your coins is "time spent computing", not "number of blocks computed".
Bitcoins (and any other cryptocurrencies) can never have secure real-time transactions as long as they rely on the proof-of-work network.
Just a nitpick, not arguing your point in general, but: car dealerships generally don't require cashier's checks. Regular checks do just fine. Not that taking ten minutes to pay for a car is a problem, but you can pay for one with a normal check in no time at all.
I've only ever bought used cars :).
The real problem is that you consider Bitcoin as an absolute solution for every transaction.
I don't know for you, but when I want to transfer cash in my bank to someone in another country, it take way more than 60 minutes (6 blocks). If I want to do it faster, I use a private service that will do it faster. The same will apply with Bitcoin.
I don't know for you, but when I want to transfer cash in my bank to someone in another country, it take way more than 60 minutes (6 blocks). If I want to do it faster, I use a private service that will do it faster. The same will apply with Bitcoin.
I don't really consider bitcoin to be the absolute solution. But it's certainly flexible enough to be a great solution.
With increasing transaction volumes the bitcoin network is lately having some issues confirming transactions with low or no fees. Furthermore, with the appreciation of bitcoin/usd value the minimum transaction fee (hardcoded at 0.0001 BTC) is getting too high. (Rising from 0.05 to 0.08 cents)
The thing is, bitcoin is still very much a WIP project, a beta if you will. It still needs more bright people working on it to improve it.
With increasing transaction volumes the bitcoin network is lately having some issues confirming transactions with low or no fees. Furthermore, with the appreciation of bitcoin/usd value the minimum transaction fee (hardcoded at 0.0001 BTC) is getting too high. (Rising from 0.05 to 0.08 cents)
The thing is, bitcoin is still very much a WIP project, a beta if you will. It still needs more bright people working on it to improve it.
Transactions on the Ripple ledger are much faster, with a new ledger (analogous to a block) every few seconds. The speed-up is because there's no mining (proof of work).
I'm more interested in the Daily Transaction Quantity (table on right side http://coinometrics.com/bitcoin/btix ). Bitcoin still lags far behind.
To put it in perspective:
Paypal 7,700,000 transactions per day
Bitcoin 67,000 transactions per day.
To put it in perspective:
Paypal 7,700,000 transactions per day
Bitcoin 67,000 transactions per day.
But, by protocol design, bitcoin's number of transactions will not get much higher than that. Only the transaction size will get larger.
For a higher number of transactions, you need to include the 3rd parties that provide services as a layer on top of the protocol.
For a higher number of transactions, you need to include the 3rd parties that provide services as a layer on top of the protocol.
It's not by design. There was a temporary built-in anti-spam limit (max block size of 1Mb) that is not even hit yet. When the pressure of transactions will push blocks closer to 1 Mb, most miners will raise the limit to not diminish the usefulness of the protocol (and therefore value of their own earnings). Essentially, the limit will depend on network latency. No miner wants to risk creating orphan blocks if his 100 Gb block takes too much time to reach everyone else. I don't expect hardcoded limit to be completely removed. Miners will still want to have some limit to still prevent a situation when someone creates a huge block just for fun, so everyone has to carry it around forever.
I wrote in detail on economics of block size limit here: http://blog.oleganza.com/post/43849158813/this-is-how-block-...
It's a question of whether the hardcoded block size should or should not raised. There's no incentive not to raise it when needed, that's all.
Of course, there's also need for some ultra-frequent small transactions. Those will be handled just fine by some clearing houses or distributed clearing networks. All debts will be covered very often with real BTC transaction completely automatically, so there's no much risk of fraud (like creation of yet another fractional reserve system).
I wrote in detail on economics of block size limit here: http://blog.oleganza.com/post/43849158813/this-is-how-block-...
It's a question of whether the hardcoded block size should or should not raised. There's no incentive not to raise it when needed, that's all.
Of course, there's also need for some ultra-frequent small transactions. Those will be handled just fine by some clearing houses or distributed clearing networks. All debts will be covered very often with real BTC transaction completely automatically, so there's no much risk of fraud (like creation of yet another fractional reserve system).
Not really. Satoshi may have intended it as a temporary measure, but he underestimated just how hard it would be to change a lot of things about the Bitcoin protocol. In particular, changing the maximum block size will result in a hard fork of the Bitcoin network - since existing Bitcoin clients will reject any block over 1 MB, everyone has to be convinced to move over to the new block size at once. This is unlikely to happen. We've never had a successful hardfork of this kind (I think there was technically a very minor one at one point due to Bitcoin being too dependent on the internals of BDB, but that was to remove an unintended - and previously unnoticed - protocol rule.)
Also, at least one of the main Bitcoin developers is strongly opposed to the idea of increasing the block size - he believes that the 1 MB limit is essential in order to avoid a race to the bottom that would end in miners not making enough money from fees, and that small transactions should be done off-blockchain by Bitcoin institutions analagous to banks.
Also, at least one of the main Bitcoin developers is strongly opposed to the idea of increasing the block size - he believes that the 1 MB limit is essential in order to avoid a race to the bottom that would end in miners not making enough money from fees, and that small transactions should be done off-blockchain by Bitcoin institutions analagous to banks.
I don't think he underestimated it. Here's a quote: http://blog.oleganza.com/post/61694565252/satoshi-on-bitcoin...
Later in 2010, Satoshi also mentioned that block size limit can be raised if needed in the future. https://bitcointalk.org/index.php?topic=1347.0
My point is not philosophical. It's purely economical. When miners start getting much more transactions than they could fit in, usefulness of Bitcoin will become limited by the costs of transactions (bigger fees would be needed to outcompete other transactions and get in the block). If costs go up, value of Bitcoin does not grow or even goes down (because value of money is always speculative: if the future does not look bright, one money quickly loses in value and becomes replaced by some other money). Miners earn bitcoins, not dollars. Investing a lot in expensive hardware, they are very interested in getting a decent return. They would never do something "out of principle" if it hurts their entire business. Block size will be raised by the vast majority of miners from 1 Mb to, say, 8 Mb. It's still small enough to protect against flood, but still gives enough room of growth.
Also: "race to the bottom" is just someone's personal fear. In reality, very soon only huge chip factories will be miners. They will produce chips as fast as possible and plug them into their computing clusters right away. Forget about shipping nice boxes overseas, that's too inefficient. Mining will be done by big factories in China or Iceland (cheap electricity).
I believe, mining in the hands of small number of big players is not a problem for censorship of transactions or raising their cost. If a miner tries to hurt fungibility of the coins on large scale, he'll simply be boycotted by other miners. (Because they are driven by desire to keep Bitcoin value up.)
Later in 2010, Satoshi also mentioned that block size limit can be raised if needed in the future. https://bitcointalk.org/index.php?topic=1347.0
My point is not philosophical. It's purely economical. When miners start getting much more transactions than they could fit in, usefulness of Bitcoin will become limited by the costs of transactions (bigger fees would be needed to outcompete other transactions and get in the block). If costs go up, value of Bitcoin does not grow or even goes down (because value of money is always speculative: if the future does not look bright, one money quickly loses in value and becomes replaced by some other money). Miners earn bitcoins, not dollars. Investing a lot in expensive hardware, they are very interested in getting a decent return. They would never do something "out of principle" if it hurts their entire business. Block size will be raised by the vast majority of miners from 1 Mb to, say, 8 Mb. It's still small enough to protect against flood, but still gives enough room of growth.
Also: "race to the bottom" is just someone's personal fear. In reality, very soon only huge chip factories will be miners. They will produce chips as fast as possible and plug them into their computing clusters right away. Forget about shipping nice boxes overseas, that's too inefficient. Mining will be done by big factories in China or Iceland (cheap electricity).
I believe, mining in the hands of small number of big players is not a problem for censorship of transactions or raising their cost. If a miner tries to hurt fungibility of the coins on large scale, he'll simply be boycotted by other miners. (Because they are driven by desire to keep Bitcoin value up.)
If people have to use 3rd-party services, doesn't that defeat the purpose of using Bitcoin?
Painfully inaccurate.
This appears to assume all coins were valued at Today numbers, not the numbers on the days they occurred.
PayPal does $44B a year in transactions. https://www.paypal-media.com/about
Today there are $12M Bit coins in existence. If each coin is valued at $800 (make my math easy and assume the sum of all bit coins is $10B)
It is possible to have more in transactions than you have in holdings. I pay you, you pay your baby sitter, $20 was $40 in transactions. But for the math to work BitCoin holders would have to be all averaging 4 transactions of 100% of their holdings a year.
This isn't possible since we know that the majority of bit coins are held by speculators, not consumers. (We know this because no one would buy bread if the price could double or half in 6 hours).
This appears to assume all coins were valued at Today numbers, not the numbers on the days they occurred.
PayPal does $44B a year in transactions. https://www.paypal-media.com/about
Today there are $12M Bit coins in existence. If each coin is valued at $800 (make my math easy and assume the sum of all bit coins is $10B)
It is possible to have more in transactions than you have in holdings. I pay you, you pay your baby sitter, $20 was $40 in transactions. But for the math to work BitCoin holders would have to be all averaging 4 transactions of 100% of their holdings a year.
This isn't possible since we know that the majority of bit coins are held by speculators, not consumers. (We know this because no one would buy bread if the price could double or half in 6 hours).
It's too early to measure any value of BTC in dollars. Any trial comparing to dollars or in any other currency are hype.
BTC transaction meaningless because you don't need to pay commission. It's simply can go infinite at any time if you have enough BTC.
BTC transaction meaningless because you don't need to pay commission. It's simply can go infinite at any time if you have enough BTC.
So if I'd send 1 BTC to myself - this would be considered as $800 transaction?
What exactly is bitcoin being spent on?
Even if Bitcoin is spent on nothing, it could become worth as much as gold eventually.
It could even become worth as much as the moon eventually. Your comment is pretty void of anything but hype.
My comment is true even if I didn't go into a huge explanation of why.
No it's not. The market offers the price it's willing to pay for it. If what you were saying were just 'true', the price would already reflect that.
Your comment is nonsense even if you had gone into a huge explanation of why. Hell, I thought it was sarcasm at first.
How is this useless blogspam getting upvoted to the front page?
I have this fear that too many HN readers have bought into bitcoin and are now using this website to keep promoting it in order to keep the hype (and price) high.
That may be it; in the last couple of weeks there's regularly been some useless Bitcoin related speculation/incorrect statistic etc. on the frontpage. Or the constant announcements how much one is worth.
PayPal processes about $500M a day [2]. Even if Bitcoin was pegged at $1000, that's be equialent to ~500,000 coins being traded for USD in a day.... which is 10 times the average daily trading volume of the largest exchange, BTC China [3] ... and most are those are probably from market makers, whereas PayPals volume overwhelmingly reflects real purchases (30% is eBay, for instance).
Whatever way you cut it, Bitcoin as an economy is still tiny. Like Gold perhaps [4], a large % of trade is pure investment.
[1] https://www.paypal-media.com/about
[2] http://bitcoincharts.com/bitcoin/
[3] http://bitcoincharts.com/markets/btcnCNY.html
[4] http://www.gold.org/investment/why_and_how/why_invest/demand...