Why bitcoin will rise in price again, but it will take years(forum.theuklibertarian.com)
forum.theuklibertarian.com
Why bitcoin will rise in price again, but it will take years
http://forum.theuklibertarian.com/viewtopic.php?f=3&t=597&start=20#p8590
3 comments
But would the customer who wants to pay wth BitC using NFC technology accept that he must wait for some confirmations before he can take his merchandize home? And would merchants, especially large stores that go to substantive effort to streamline checkout processes, accept a payment protocol that by design adds a one hour delay (IIRC, people seem to regard six confirmations as definitive proof of payment, and the work factor is adjusted to give one confirmation per ten minutes on average) to every checkout? Even requiring just one confirmation would mean that a supermarket cashier could only process about four or five customers per hour if you want to keep the process sequential.
unnecessary. transactions don't have to be bitcoin transactions. two people with accounts with mtgox can have instant transfers for instance.
why would you use bitcoin below that though? requiring a both vendor and customer have an account at some paypal like site just makes it paypal. it will have the same problems. so what does bitcoin add? nothing
Lower transaction fees maybe? Like in the 0.x%.
Right. People tend to forget that bitcoin is just the base layer, the first step. Like the kernel would be to an OS. Its goal is to support sending value from A to B reliably. All kinds of functionality needed to run a full-fledged economy can be built on-top without affecting the core system too much. For example using Open Transactions.
I agree. I also think (possibly somewhat antagonizing your idea of pacifying merchants) that things like the banking embargo against Wikileaks and the probably inevitable expansion of those kinds of actions against whatever the antagonizer of established power of the day is.
Bitcoin is building a start point for what will inevitably be a cat and mouse game future of supporting unpopular (with Power at least) movements.
Bitcoin is building a start point for what will inevitably be a cat and mouse game future of supporting unpopular (with Power at least) movements.
I looked at mining BTC when it was $7/coin, and I couldn't make it work economically. Now that it's $3/coin, I certainly couldn't. And the fact that it hit $17/coin makes it even worse.
You see, the more miners there are, the harder it is to mine each BTC. So in order for it to be worth my electricity and hardware, a LOT of people would have to stop mining. I don't see how it could possibly make sense for me to start mining while so many people are quitting, either.
You see, the more miners there are, the harder it is to mine each BTC. So in order for it to be worth my electricity and hardware, a LOT of people would have to stop mining. I don't see how it could possibly make sense for me to start mining while so many people are quitting, either.
I'm seeing a lot of posts on HN supportive of Bitcoin, and honestly, I just don't get it. Someone explain.
1) I don't see that Bitcoin can escape any boom-bust cycle. I don't. Arguably the dollar can't either, but I think that's part of my point: that's with people _trying_ to regulate it. Bitcoin ultimately has a finite economy, which means that it's only stable if it is constantly deflationary (unless the population size stays the same I guess? I'm not going to make _that_ assumption) and _that_ motivates hoarding, which locks down currency.
You can _maybe_ construct some differential equation where the amount of hoarding is balanced out by the amount of 'cashing out' as people give up hoarding to spend freely, but that's a _heck_ of a wild guess to base a currency on. And anything _less than that perfection_ will inevitably result in boom-bust: freeze until you sell your dough, therefore simultaneous motivation to sell, therefore flooding of market, therefore crash. Which tangentially brings up:
2) In the above example, Bitcoin is (like any other currency) a surrogate of value for the things you can _do_ with it, which tells us that value lies outside of currency altogether and that currency is just a measuring stick. And therefore...
3) Bitcoin is essentially _still_ a fiat currency, but without the benefits of, you know, a significant support base. Sorry, you can go into almost any bank in the world and exchange an American dollar for local coin. I'd rather just _abolish money_ than supplant it with even _more_ imaginary money.
Sure, some counterculture activity subsists on Bitcoin. Sure, it's a neat thought experiment. But I can't see it becoming practical (read: successful).
1) I don't see that Bitcoin can escape any boom-bust cycle. I don't. Arguably the dollar can't either, but I think that's part of my point: that's with people _trying_ to regulate it. Bitcoin ultimately has a finite economy, which means that it's only stable if it is constantly deflationary (unless the population size stays the same I guess? I'm not going to make _that_ assumption) and _that_ motivates hoarding, which locks down currency.
You can _maybe_ construct some differential equation where the amount of hoarding is balanced out by the amount of 'cashing out' as people give up hoarding to spend freely, but that's a _heck_ of a wild guess to base a currency on. And anything _less than that perfection_ will inevitably result in boom-bust: freeze until you sell your dough, therefore simultaneous motivation to sell, therefore flooding of market, therefore crash. Which tangentially brings up:
2) In the above example, Bitcoin is (like any other currency) a surrogate of value for the things you can _do_ with it, which tells us that value lies outside of currency altogether and that currency is just a measuring stick. And therefore...
3) Bitcoin is essentially _still_ a fiat currency, but without the benefits of, you know, a significant support base. Sorry, you can go into almost any bank in the world and exchange an American dollar for local coin. I'd rather just _abolish money_ than supplant it with even _more_ imaginary money.
Sure, some counterculture activity subsists on Bitcoin. Sure, it's a neat thought experiment. But I can't see it becoming practical (read: successful).
> But I can't see it becoming practical (read: successful).
And to add one more point: if it were to become successful, governments would likely make it illegal. Yes, it's decentralized, but they could still sue random people for using it, just like with people downloading music.
So, yes, neat thought experiment, revolutionary idea, but very unlikely to be used by more than a handful of people.
And to add one more point: if it were to become successful, governments would likely make it illegal. Yes, it's decentralized, but they could still sue random people for using it, just like with people downloading music.
So, yes, neat thought experiment, revolutionary idea, but very unlikely to be used by more than a handful of people.
I feel like this is the real achilies' heel of bitcoin. Once governments start losing tax revenue they're going to pull out all the stops. Beyond that, US law enforcement is already concerned with bitcoin because of its use in drug trafficking, online poker, and other dubious crimes then you add in the omnipotent banking lobby who have an obvious agenda to assert. I can't imagine a world where a successful bitcoin would be allowed to thrive.
This is just the kind of thinking (nonsense) that will continue to relegate bitcoin out of the mainstream. It makes no sense from a legislative standpoint to make the actual 'system' of bitcoin illegal, instead, your income and unreported transactions will violate tax codes. Law enforcement will pursue those violations, not the system of bitcoin itself. This is the same as law enforcement currently pursuing people downloading illegal content from torrents, not people using torrents for legitimate purposes.
Bitcoin starts to make more sense when you realise that it is an open protocol for transferring and manipulating wealth, in the same way that HTTP is an open protocol for transferring and manipulating data.
I would like to use Bitcoin for micro-payment transactions in Mexico.
The toy plan I drafted starts with a "broker" (my service) printing and selling "cards" for certain amount of money (say USD$50). Each card is linked to a specific account maintained by the "broker" which knows how much money has the individual spent.
When a user wants to pay using bitcon, the amount of bitcoins are converted to USD$ and then reduced from the card's account, plus a small commission (the profit point).
The user sees all the transactions in USD$ (or MXN$) while the transaction between the "broker" and the seller is done in Bitcoins.
This will help "popularize" Bitcoins, and will allow people in Mexico to do payments without having a bank card, and use micropayments.
One of the many issues is the distribution of such point cards. But on the other hand, sellers do not get tied to a closed payment system.
Of course such type of plans have to be thought quite deeply as there will be a lot of issues to solve. But I think in Mexico it would be good business because currently the options to accept micropayments (e.g., SMS payment or by phone, etc) do not exist (or are not profitable for sellers) and credit cards are not really used by the majority of the population.
The toy plan I drafted starts with a "broker" (my service) printing and selling "cards" for certain amount of money (say USD$50). Each card is linked to a specific account maintained by the "broker" which knows how much money has the individual spent.
When a user wants to pay using bitcon, the amount of bitcoins are converted to USD$ and then reduced from the card's account, plus a small commission (the profit point).
The user sees all the transactions in USD$ (or MXN$) while the transaction between the "broker" and the seller is done in Bitcoins.
This will help "popularize" Bitcoins, and will allow people in Mexico to do payments without having a bank card, and use micropayments.
One of the many issues is the distribution of such point cards. But on the other hand, sellers do not get tied to a closed payment system.
Of course such type of plans have to be thought quite deeply as there will be a lot of issues to solve. But I think in Mexico it would be good business because currently the options to accept micropayments (e.g., SMS payment or by phone, etc) do not exist (or are not profitable for sellers) and credit cards are not really used by the majority of the population.
Is it? It's incredibly unstable and has a tiny pool of buyers/sellers, that makes it a terrible characteristic for wealth transfer.
Why? The long term stability of the currency is irrelevant if you're just using bitcoins as a temporary intermediary, as the exchange rate only has to be remain constant for the time taken to verify a transaction.
Because with such a tiny market you cannot actually move a lot of wealth without influencing the value of the currency itself.
But that would only be a problem if you wanted to move large amounts of wealth infrequently. If you only wanted to move small amounts of wealth frequently (like Paypal), then there wouldn't be any problem.
Your argument basically boils down to: it's a toy 'currency,' is that really the best argument you can make?
If so, this really isn't worth discussing because it's a joke.
If so, this really isn't worth discussing because it's a joke.
Huh? That's not my argument at all. Have you replied to the wrong comment by accident?
I did, and I stand by my statement. You are arguing that it's viable if you move small amounts of money. That means it only works with toy amounts, any large amount of money will influence the price because demand is shallow. Thus, you argue if you move small amounts frequently it would work, but then it is subject to the same volatility. This is why it's a toy 'currency' because it only works with tiny amounts of money.
So, in your opinion Paypal, credit cards, and physical cash are all toys because they're designed for moving small amounts of money?
Or are you saying that the potential threat of a sudden market crash precludes using bitcoin as a reliable way of transferring wealth?
Let's take a look at the economics of the latter. Let's assume that over the course of the year, a modest $1 million worth of money passes through my dollar-to-bitcoin and bitcoin-to-dollar gateways, and as I'm charging 1% on each (2% total), I'm making a $20,000 profit.
Then bitcoin market suddenly crashes, and 99% of bitcoin's value is lost. What a disaster! I'll lose all of... well... assuming I wait 1 hour to confirm transactions, I'll lose $100 dollars on average. If I waited 10 minutes, then I'd lose only $16 dollars.
So whilst bitcoin might be volatile, the odd market crash doesn't actually affect people who want to bitcoin as a protocol for transferring wealth, rather than storing it.
Or are you saying that the potential threat of a sudden market crash precludes using bitcoin as a reliable way of transferring wealth?
Let's take a look at the economics of the latter. Let's assume that over the course of the year, a modest $1 million worth of money passes through my dollar-to-bitcoin and bitcoin-to-dollar gateways, and as I'm charging 1% on each (2% total), I'm making a $20,000 profit.
Then bitcoin market suddenly crashes, and 99% of bitcoin's value is lost. What a disaster! I'll lose all of... well... assuming I wait 1 hour to confirm transactions, I'll lose $100 dollars on average. If I waited 10 minutes, then I'd lose only $16 dollars.
So whilst bitcoin might be volatile, the odd market crash doesn't actually affect people who want to bitcoin as a protocol for transferring wealth, rather than storing it.
Paypal, credit cards and physical handle large amounts infinitely better than bitcoin. Look at mtgoxlive and see how much money it really takes to move the market a good amount. $10,000 would move it 20 cents on the buy side which is a 7% move because the demand is shallow. It's a toy currency. Paypal can handle 5 figure transactions without blinking (maybe even 6, havent heard of anyone try but I've seen 5 figure transactions).
My point is, you can't even move a good chunk of money without influencing the value of the market. It doesn't help that you can't store value in it either because of its volatility.
My point is, you can't even move a good chunk of money without influencing the value of the market. It doesn't help that you can't store value in it either because of its volatility.
If you're using bitcoin as a mechanism for transferring wealth, the volatility doesn't matter if your revenue stream is relatively constant, because only a small percentage of your revenue will exist as bitcoins at any instance in time.
Volatility only matters if you're interested in storing wealth, or if your transactions are both infrequent and large relative to the bitcoin market. These are the only conditions where a sizeable proportion of your capital would have to exist as bitcoins at one time, and therefore the only conditions where you'd care about volatility.
So sure, using bitcoins to pay for a house or an expensive car is probably not a good idea, but it seems, well, utterly bizarre to dismiss bitcoins just because it's currently unsuitable for a small segment of the market.
And personally, I'd view physical cash as being wholly unsuitable for purchases over $10,000, due to the risk of manually transporting that much money. If I had a choice solely between paying someone $10,000 in physical cash, or $10,000 in bitcoins, then I'd think seriously about using bitcoins. Does this mean that physical money is just a "toy currency"?
Volatility only matters if you're interested in storing wealth, or if your transactions are both infrequent and large relative to the bitcoin market. These are the only conditions where a sizeable proportion of your capital would have to exist as bitcoins at one time, and therefore the only conditions where you'd care about volatility.
So sure, using bitcoins to pay for a house or an expensive car is probably not a good idea, but it seems, well, utterly bizarre to dismiss bitcoins just because it's currently unsuitable for a small segment of the market.
And personally, I'd view physical cash as being wholly unsuitable for purchases over $10,000, due to the risk of manually transporting that much money. If I had a choice solely between paying someone $10,000 in physical cash, or $10,000 in bitcoins, then I'd think seriously about using bitcoins. Does this mean that physical money is just a "toy currency"?
Of course, it would help if merchants wouldn't have to be afraid that FBI will come knocking at their door questioning them about it, or if the Government wouldn't immediately freak out about it if its usage explodes in the marketplace. You'd need a president that supports currency competition, too, and might even allow something like this in the market (Ron Paul could be such a president).